-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, iKCNQwSzcG9Wz6gDBHMbeEiU6qNa4//FEsuVO2hZzd5GrUWl6VBUFf82Az2RCytH iY+eQ94EtVXMKNdxSKDEsw== 0000950112-94-000712.txt : 19940322 0000950112-94-000712.hdr.sgml : 19940322 ACCESSION NUMBER: 0000950112-94-000712 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW YORK TIMES CO CENTRAL INDEX KEY: 0000071691 STANDARD INDUSTRIAL CLASSIFICATION: 2711 IRS NUMBER: 131102020 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-05837 FILM NUMBER: 94516905 BUSINESS ADDRESS: STREET 1: 229 W 43RD ST CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125561234 10-K 1 NEW YORK TIMES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 --------------- FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-5837 THE NEW YORK TIMES COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW YORK 13-1102020 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 229 WEST 43D STREET, NEW YORK, N. Y. 10036 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 556-1234 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED Class A Common Stock of $.10 par value American Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: Not Applicable (TITLE OF CLASS) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes. X. No. .... Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) The aggregate market value of Class A Common Stock held by non-affiliates as of February 28, 1994, was approximately $2.14 billion. As of such date, non-affiliates held 55,597 shares of Class B Common Stock. There is no active market for such stock. The number of outstanding shares of each class of the registrant's common stock as of February 28, 1994, was as follows: 106,461,863 shares of Class A Common Stock and 431,681 shares of Class B Common Stock. DOCUMENT INCORPORATED BY REFERENCE PART Proxy Statement for the 1994 Annual Meeting of Stockholders . ....... III - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INDEX TO THE NEW YORK TIMES COMPANY 1993 FORM 10-K ------------------------ PART I
ITEM NO. PAGE 1. Business......................................................................... 1 Introduction................................................................. 1 Summary of Segment Information............................................ 1 Newspapers................................................................... 2 The New York Times........................................................ 2 Circulation............................................................ 2 Advertising............................................................ 3 Production............................................................. 3 The Boston Globe.......................................................... 4 Circulation............................................................ 4 Advertising............................................................ 5 Production............................................................. 5 Regional Newspapers....................................................... 5 International Herald Tribune S.A.......................................... 6 Magazines.................................................................... 6 Women's Magazines......................................................... 6 Sports/Leisure Magazines.................................................. 7 Broadcasting/Information Services............................................ 7 Broadcasting.............................................................. 7 Information Services...................................................... 8 Forest Products Companies.................................................... 8 Competition.................................................................. 9 Employees.................................................................... 10 2. Properties....................................................................... 10 3. Legal Proceedings................................................................ 11 4. Submission of Matters to a Vote of Security Holders.............................. 11 Executive Officers of the Registrant................................................ 11 PART II 5. Market for the Registrant's Common Equity and Related Stockholder Matters........ 13 6. Selected Financial Data.......................................................... 13 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................................... 13 8. Financial Statements and Supplementary Data...................................... 13 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......................................................................... 13 PART III 10. Directors and Executive Officers of the Registrant.............................. 13 11. Executive Compensation.......................................................... 13 12. Security Ownership of Certain Beneficial Owners and Management.................. 13 13. Certain Relationships and Related Transactions.................................. 13 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................. 14
PART I ITEM 1. BUSINESS. INTRODUCTION The New York Times Company (the "Company") was incorporated on August 26, 1896, under the laws of the State of New York. The Company is engaged in diversified activities in the communications field. The Company also has substantial equity interests in two Canadian newsprint companies and a Maine supercalendered paper manufacturing partnership. On October 1, 1993, a wholly owned subsidiary of the Company was merged with Affiliated Publications, Inc. ("API"), the parent company of The Boston Globe, which became a wholly owned subsidiary of the Company. (See Note 2 of Notes to Consolidated Financial Statements and "Newspapers--The Boston Globe".) The Company currently classifies its businesses into the following segments: Newspapers: The New York Times ("The Times"); The Boston Globe, a daily newspaper, and the Boston Sunday Globe (both editions, "The Globe"); 23 other daily and five non-daily newspapers in Alabama, California, Florida, Kentucky, Louisiana, Maine, Mississippi, North Carolina, South Carolina and Tennessee ("Regional Newspapers"); a newspaper wholesaler in the New York City metropolitan area; and a one-half interest in the International Herald Tribune. Magazines: Family Circle, McCall's, American HomeStyle, Child, Fitness, Custom Builder, Golf Digest, Golf World (U.S.), Golf World (U.K.), Golf Shop Operations, Golf World Industry News (U.K.), Golf Weekly (U.K.), Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Sailing Business, Snow Country and Ski Business. Broadcasting/Information Services: television stations WREG-TV in Memphis, Tennessee, WNEP-TV in Wilkes-Barre/Scranton, Pennsylvania, WHNT-TV in Huntsville, Alabama, WQAD-TV in Moline, Illinois, and KFSM-TV in Fort Smith, Arkansas; radio stations WQXR (FM) and WQEW (AM) in New York City; news, photo and graphics services and news and features syndication; TimesFax; The New York Times Index; and licensing of electronic data bases and microform, CD-ROM products and the trademarks and copyrights of The Times. SUMMARY OF SEGMENT INFORMATION In 1993 the Company's consolidated revenues increased to $2,019,654,000 from $1,773,535,000 in 1992, due principally to the October 1, 1993 acquisition of The Globe, the June 1992 acquisition of two wholesale newspaper distribution businesses and higher advertising and circulation revenues. The Company's net income in 1993 was $6,123,000, or $.07 per share, compared with a net loss of $44,709,000, or $.57 per share, in 1992. The 1993 net income includes pre-tax charges aggregating $35,400,000, or $.23 per share, to cover severance and related costs resulting from anticipated white-collar and composing room staff reductions at The Times and an after-tax noncash charge of $47,000,000, or $.56 per share, to write down the Company's investment in its Forest Products Group to reflect current operating conditions and economic factors in the industry. The 1992 loss includes an after-tax charge of $33,437,000, or $.43 per share, related to the net cumulative effect of adopting three accounting changes in 1992 and a pre-tax loss of $53,768,000, or $.47 per share, due to the closing of The Gwinnett (Georgia) Daily News, the sale of its residual assets and its 1992 operations. A summary of segment information for the three years ended December 31, 1993, is set forth on pages F-2 and F-3 of this Form 10-K. Also see "Management's Discussion and Analysis" on pages F-4 through F-7 of this Form 10-K. As part of the API merger, the Company acquired a one-third interest in BPI Communications, L.P. ("BPI"), a publisher of speciality magazines including Billboard and Hollywood Reporter. In February 1994 BPI was sold and the Company received approximately $53,000,000 for its interest. The Company expects to receive additional payments of approximately $2,000,000 later in the year. (See Note 2 of Notes to Consolidated Financial Statements.) The Company's largest source of revenues is advertising, which influences the pattern of the Company's quarterly consolidated revenues and is seasonal in nature. Traditionally second-quarter and fourth-quarter advertising volume is higher than that which occurs in the first quarter. Advertising volume tends to be lower in the third quarter primarily because of the summer slow-down in many areas of economic activity. In addition, quarterly trends are affected by the overall economy and economic conditions that may exist in specific markets served by the Company's business segments. NEWSPAPERS The Newspaper Group had revenues of $1,537,934,000 in 1993, compared with $1,306,952,000 in 1992, and an operating profit of $114,332,000 in 1993, compared with $81,173,000 in 1992. Exclusive of the special items discussed in more detail in "Management's Discussion and Analysis" on pages F-4 and F-5 of this Form 10-K, operating profit of the Newspaper Group increased to $150,832,000 in 1993 from $129,073,000 in 1992. Improvements in operating profit were mainly due to inclusion of the results of The Globe since the October 1, 1993 acquisition date, higher advertising and circulation revenues, cost controls throughout the Group and cost savings related to The Times's Edison facility. Advertising weakness at the Company's two California regional newspapers and higher depreciation and newsprint prices partially offset the higher results. THE NEW YORK TIMES CIRCULATION The Times, a standard-size weekday and Sunday newspaper which commenced publication in 1851, is circulated in each of the 50 states and the District of Columbia and worldwide. Approximately 64% of the weekday (Monday through Friday) circulation is sold in the 31 counties that make up the greater New York City area which includes New York City, Westchester and parts of upstate New York, Connecticut and New Jersey; 36% is sold elsewhere. On Sundays approximately 63% of the circulation is sold in the greater New York City area and 37% elsewhere. According to reports of the Audit Bureau of Circulations ("ABC"), an independent agency that audits the circulation of most U.S. newspapers and magazines on an annual basis, for the semi-annual period ended September 30, 1993, of all seven-day United States newspapers, The Times's daily and Sunday circulations were the largest. The Times's average weekday and Sunday circulations for the five 12-month periods ended September 30, 1993, as audited by ABC (except as indicated), are shown in the table below.
Weekday Sunday ----------- ------- (Thousands of copies) 1989............................................................. 1,091.9 1,644.1 1990............................................................. 1,128.3 1,695.9 1991............................................................. 1,160.0 1,730.0 1992............................................................. 1,175.9 1,757.0 1993 (unaudited)................................................. 1,185.0 1,785.0
During the year ended December 31, 1993, the average weekday circulation of The Times increased by approximately 1,700 copies to 1,179,000 copies and the average Sunday circulation of The Times increased by approximately 17,100 copies to 1,781,200 copies. Approximately 52% of the weekday circulation and 42% of the larger Sunday circulation were sold through home and office delivery; the remainder were sold primarily on newsstands. The suggested newsstand price of The Times within the New York City metropolitan area is $.50 on weekdays and $2.00 on Sunday. The suggested newsstand price in the New England-Middle Atlantic states outside the New York City metropolitan area is $.75 on weekdays and $2.00 on Sundays. The suggested newsstand price of the National Edition, distributed throughout the rest of the country, is $.75 on weekdays and $3.50 on Sundays, except that, effective January 10, 1994, the suggested 2 newsstand price of the National Edition in 11 southwest and southeast states and the Caribbean is $1.00 on weekdays. ADVERTISING The Times published 77,787,000 lines of advertising in 1993, compared with 77,012,000 lines in 1992. Both figures include part-run linage, which totaled 21,728,000 lines in 1993, compared with 20,574,000 lines in 1992. Total linage in The Times for the five years ended December 31, 1993, as measured by Leading National Advertisers Incorporated ("LNA"), an independent agency that measures advertising volume, is shown in the table below. The "National" heading in the table below includes such categories as automotive, financial and general advertising.
Retail National Classified ---------------------- ---------------------- ---------------------- Total Weekday Sunday Weekday Sunday Weekday Sunday ----------- --------- ----------- --------- ----------- --------- --------- (Thousands of lines) 1989 21,365 29,267 13,527 15,581 9,612 18,681 108,033 1990 19,542 25,983 11,823 13,920 7,434 14,341 93,043 1991 17,344 22,318 10,173 12,134 5,661 10,988 78,618 1992 18,082 21,528 9,696 12,811 4,721 10,174 77,012 1993 18,377 23,172 9,494 12,463 4,030 10,251 77,787
The table includes linage for The New York Times Magazine, which published 2,857 pages of advertising in 1993, compared with 2,742 pages in 1992. Advertising rates for The Times increased an average of 5% in January 1993 and in January 1994. PRODUCTION Except for The New York Times Magazine, the Television section, the National Edition and certain supplements, The Times is currently produced at its New York City production facility and a newly-operational production and distribution facility in Edison, New Jersey. The Times is fully photocomposed, and all news is processed through electronic editing terminals and photocomposition equipment that produce text at a rate of up to 3,000 lines per minute. Page images are reproduced on lightweight printing plates through the use of negatives that are produced by laser beams scanning paste-ups. The page images are transmitted by direct wire to the platemaking room in the Manhattan facility and by a combination of microwave and satellite transmission from the composing room in the Manhattan facility to the platemaking room in Edison and each of the eight National Edition printing sites around the country. The new Edison facility, which recently replaced an older production facility in Carlstadt, New Jersey, prints all the advance sections of the Sunday newspaper (except The New York Times Magazine and the Television section) and approximately one-third of the weekday New York edition. The Edison facility houses six 10-unit Goss Colorliner presses as well as modern, automated packaging and distribution equipment. No decision has been made as to the disposition of the Carlstadt plant, which was closed in February 1993. During 1993 The Times began printing some of its advance Sunday sections at Edison in color; it expects to add at least two color sections in 1994. The National Edition of The Times is distributed from eight printing sites: in the Midwest from printing sites in Chicago, Illinois, and Warren, Ohio; in the West from printing sites in Torrance and Walnut Creek, California, and Tacoma, Washington; in the Southwest from a printing site in Austin, Texas; and in the Southeast from printing sites in Atlanta, Georgia, and Ft. Lauderdale, Florida. Satellite transmission of page images to the National Edition printing sites permits early-morning delivery to homes and newsstands in many major markets. 3 In June 1992 the Company acquired two wholesale newspaper distribution businesses that distribute The Times and other newspapers and periodicals in New York City and central and northern New Jersey. (See Note 2 of Notes to Consolidated Financial Statements.) These wholesalers operate under the name of City & Suburban Delivery Systems. Approximately 46% of The Times's daily circulation and 40% of its Sunday circulation in the New York City metropolitan area are delivered to retail outlets and home delivery depots through these wholesale operations. The Times has an agreement with R.R. Donnelley & Sons Company to print The New York Times Magazine through December 1999 and an agreement with KTB Associates, Inc. to print the Television section through February 1998. In 1993 The Times used approximately 301,000 metric tons of newsprint, which was purchased primarily under long-term contracts from both related and unrelated suppliers (see "Forest Products Companies"). The New York Times Magazine used approximately 21,000 metric tons of supercalendered paper, an intermediate grade of magazine quality paper, in 1993. This supercalendered paper was purchased under long-term contracts from both related (see "Forest Products Companies") and unrelated suppliers. The Times and The New York Times Magazine are not dependent on any one supplier. THE BOSTON GLOBE The Company acquired The Globe on October 1, 1993, pursuant to a merger of a wholly owned subsidiary of the Company into API. The Globe is owned and published by an API subsidiary, Globe Newspaper Company (as used herein, "The Globe" may also be used to refer to Globe Newspaper Company). CIRCULATION The Globe is distributed throughout New England, though its circulation is concentrated in the Boston metropolitan area. According to ABC reports, as of September 30, 1993, the daily circulation of The Globe was the 12th largest of any daily newspaper, and circulation of the Sunday edition was the 9th largest of any Sunday newspaper published in the United States; and its daily and Sunday circulation was the largest of all newspapers published in either Boston or New England. During the year ended December 26, 1993, the average weekday circulation of The Globe decreased by approximately 3,300 copies to 504,600 copies and the average Sunday circulation increased by approximately 2,700 copies to 814,500 copies. Approximately 68% of The Globe's total daily circulation and 54% of The Globe's total Sunday circulation were sold through home or office delivery; the remainder were sold primarily on newsstands. Within the 30-mile-radius of Boston, the newsstand price of the daily edition of The Globe during 1993 was $.35. The newsstand price for copies sold more than 30 miles from Boston was $.50. The newsstand price of the Sunday edition of The Globe was $1.50. The seven-day home delivery price for the newspaper was $4.00. The following table shows the average weekday and Sunday paid circulation of The Globe for the editions and the periods indicated.
PERIOD WEEKDAY SUNDAY - ---------------------------------------------------------------------- --------- --------- 52 Weeks ended March 28, 1993*........................................ 506,996 811,743 26 Weeks ended September 26, 1993**................................... 507,647 814,036
- --------------- * Per audit report of ABC. ** As submitted by The Globe to ABC. 4 ADVERTISING The Globe's total advertising volume by category of advertising for the year ended December 31, 1993 for all editions, as measured by The Globe, is set forth below: Run of Press inches, Daily & Sunday Retail............................................................................... 816,911 National............................................................................. 510,973 Classified........................................................................... 1,158,163 Zone advertising inches................................................................ 252,408 Preprint distribution in pieces........................................................ 637,670,000
Advertising rates in each category of advertising were adjusted in 1993. The latest increase in retail advertising rates occurred on January 1, 1994. Increases in national and classified advertising rates occurred effective July 1, 1993 and August 1, 1993, respectively. These increases ranged from 2.1% to 4.5%. PRODUCTION All editions of The Globe are printed and prepared for delivery at its main Boston plant or its Billerica, Massachusetts, satellite plant. Both of the plants use Goss Metroliner offset presses. The Boston plant has a comprehensive computerized information system utilizing terminals for entering news and advertising copy into its phototext setting equipment. The data for printing The Globe at the Billerica plant are delivered by dedicated telephone lines. In June 1992, The Globe purchased a 126,000 square foot building in Westwood, Massachusetts, which became operational as a Sunday pre-print storage, inserting and packaging plant in the fall of 1993. Virtually all of The Globe's home-delivered circulation is delivered through The Globe's distribution subsidiary, Community Newsdealers Inc. In 1993, The Globe used approximately 128,000 metric tons of newsprint. The major portion was purchased under long-term contracts with unrelated suppliers; The Globe is not dependent on any one supplier. REGIONAL NEWSPAPERS The Company currently owns 23 daily and five non-daily smaller-city newspapers. Daily Newspapers Non-Daily Newspapers ---------------- -------------------- Sarasota Herald-Tribune The Courier (Houma, La.) York County Coast Star (Fla.) Daily Commercial (Kennebunk, Me.) The Press Democrat (Santa (Leesburg, Fla.) The News-Sun (Sebring/ Rosa, Cal.) Times-News Avon Park, Fla.) The Ledger (Lakeland, Fla.) (Hendersonville, N.C.) Marco Island Eagle The Gainesville Sun (Fla.) Daily World (Opelousas, La.) (Fla.) Santa Barbara The Dispatch (Lexington, N.C.) News-Leader News-Press (Cal.) Lenoir News-Topic (N.C.) (Fernandina Beach, Fla.) Spartanburg Daily Comet (Thibodaux, La.) The Banner-Independent Herald-Journal (S.C.) Palatka Daily News (Fla.) (Booneville, Miss.) Wilmington Morning Star The Messenger (N.C.) (Madisonville, Ky.) Ocala Star-Banner (Fla.) The Daily Corinthian Times Daily (Corinth, Miss.) (Florence, Ala.) Lake City Reporter (Fla.) The Tuscaloosa News (Ala.) State Gazette (Dyersburg, The Gadsden Times (Ala.) Tenn.)
5 The regional daily newspapers achieved circulation gains for the year ended December 31, 1993, as weekday circulation increased 4,500 copies to 851,000 copies and Sunday circulation increased 9,200 copies to 853,700 copies; the circulation of the non-dailies decreased 500 copies to 72,700 copies. Advertising volume, stated on the basis of six columns per page, was 35,163,700 inches in 1993, compared with 33,854,000 inches in 1992. The circulation gains and the advertising volume exclude the 1992 circulation and advertising volume of The Gwinnett (Georgia) Daily News, which the Company closed in September 1992. The circulation and advertising volume include the two weekly Georgia newspapers sold at year-end, The Forsyth County News (Cumming) and The Winder News (Winder). (See Note 2 of Notes to Consolidated Financial Statements.) All of the Regional Newspapers are produced by photocomposition and offset printing. In 1993 the Regional Newspapers used approximately 99,000 metric tons of newsprint, which was purchased under long-term contracts from both related (see "Forest Products Companies") and unrelated suppliers. The Regional Newspapers are not dependent on any one supplier. INTERNATIONAL HERALD TRIBUNE S.A. The Company owns a one-half interest in the International Herald Tribune S.A., which publishes the International Herald Tribune. The newspaper is edited in Paris and printed simultaneously in Paris, London, Zurich, Hong Kong, Singapore, The Hague, Marseille, Tokyo, Rome, Frankfurt and New York. The other one-half interest is owned by The Washington Post Company. MAGAZINES The Company's Magazine Group had revenues of $394,463,000 in 1993, compared with $386,120,000 in 1992, and operating profit of $12,330,000 in 1993, compared with $9,929,000 in 1992. Exclusive of the amortization costs associated with the acquisitions of McCall's and Golf World (U.S.), which were structured to maximize cash flow, the Group's operating profit was $25,400,000 in 1993, which is equal to 1992. Continuing softness in advertising in the consumer packaged goods category in the women's magazines field continues to affect the Group adversely. All of the Company's magazines are printed under long-term contracts with unrelated printers. In 1993 the magazines used approximately 78,000 metric tons of coated paper, all of which was purchased from unrelated suppliers under long-term contracts. WOMEN'S MAGAZINES As of December 31, 1993, NYT Women's Magazines published the magazines listed in the chart below:
PERCENTAGE INCREASE (DECREASE) IN AVERAGE PUBLICATION SUBJECT/ AVERAGE CIRCULATION ADVERTISING MAGAZINE CYCLE AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(4) - -------------------------- ----------------- ------------------ ---------- ----------- --------------- ----------- Family Circle............. 17 issues per Women's Service 5,000,000 5,092,000 (1.3) 1,570 year McCall's.................. Monthly Women's Service 4,600,000 4,604,000 (1.6) 1,138 American HomeStyle(2)..... 8 issues per year Home decorating 700,000(2) 712,000 7.4 469 Child(3).................. 10 issues per Parents of 650,000(3) 612,000 13.3 872 year children under 12 Fitness................... 6 issues per year Health and fitness 500,000(5) 408,000 40.9 237 Custom Builder............ 7 issues per year Trade publication Not 28,000 4.7 357 for the shelter Applicable field PERCENTAGE INCREASE (DECREASE) IN ADVERTISING MAGAZINE PAGES OVER 1992 - -------------------------- --------------- Family Circle............. (8.9) McCall's.................. (5.2) American HomeStyle(2)..... 3.3 Child(3).................. 5.1 Fitness................... 91.3 Custom Builder............ 42.2
- --------------- (1) As reported by the publisher to ABC or the Business Publications Association ("BPA"). (2) Formerly called Decorating Remodeling. Six ancillary publications were published in 1993: Home Plans (four times a year), Kitchen Plans (two times a year), Build It, Build It Ultra, Weekend Decorator, Weekend Remodeler. The Ratebase for American HomeStyle increased from 675,000 to 700,000 in January 1994. (3) Four ancillary publications were published in 1993: Organized Parent, Organized Pregnancy, Having a Baby, Child's Guide to Baby Products. The Ratebase for Child increased from 600,000 to 650,000 in January 1994. (4) As reported by the publisher to Publisher's Information Bureau ("PIB"); or, in the case of Custom Builder, as calculated by the publisher using the same methodology as for PIB. (5) The Ratebase increased from 400,000 to 500,000 in January 1994. In 1993, NYT Women's Magazines also published 14 Special Interest Publications on such topics as Christmas, food and shelter. 6 SPORTS/LEISURE MAGAZINES As of December 31, 1993, NYT Sports/Leisure Magazines published the magazines listed in the chart below:
PERCENTAGE PERCENTAGE INCREASE INCREASE (DECREASE) IN (DECREASE) IN AVERAGE ADVERTISING PUBLICATION AVERAGE CIRCULATION ADVERTISING PAGES MAGAZINE CYCLE SUBJECT/AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(2) OVER 1992 - ----------------------- ----------------- ------------------- --------- ----------- ------------- ----------- ------------- Golf Digest............ Monthly Golf 1,450,000 1,459,000 2.8 1,344 0.9 Tennis................. Monthly Tennis 800,000 804,000 5.8 795 3.5 Snow Country........... 8 issues per year Skiing market 460,000 428,000 14.9 669 24.6 Recreational Cruising World......... Monthly sailors 143,000 148,000 0.9 1,169 10.3 44 issues per Golf World (U.S.)...... year Golf 135,000 141,000 2.0 1,622 (1.9) Golf World (U.K.)...... Monthly Golf 94,500 95,000 3.0 1,180 5.9 Sailing World.......... Monthly Racing sailors 61,000 64,000 1.5 555 13.0 10 issues per Golf Shop Operations... year Golf trade 16,500 17,000 1.3 1,469 (2.1) Ski Business........... 6 issues per year Ski trade 11,500 12,000 (8.1) 302 62.4 Tennis Buyer's Guide... 6 issues per year Tennis trade 10,100 10,000 (0.9) 326 (9.9) Sailing Business....... 6 issues per year Sailing trade 8,500 8,000(3) 17.7 93 3.3 Golf Weekly (U.K.)..... Weekly Golf 8,250 8,000 (21.6) 651 8.7 Golf World Industry News (U.K.)............ Monthly Golf trade 5,000 5,000 0 231 20.3
- --------------- (1) As reported by the publisher to ABC or BPA. (2) As reported by the publisher to PIB; or, in the case of trade publications, as calculated by the publisher using the same methodology as for PIB. (3) As provided by publisher. BROADCASTING/INFORMATION SERVICES Broadcasting/Information Services had revenues of $87,257,000 in 1993, up from $80,463,000 in 1992, and an operating profit of $19,403,000 in 1993, compared with $14,766,000 in 1992. Higher local advertising revenues at the Company's television stations accounted for the improved results. BROADCASTING The Company's television and radio stations are operated under licenses from the Federal Communications Commission ("FCC") and are subject to FCC regulations. Each television station's license is for a five-year term. The licenses for WREG-TV (Memphis, Tenn.), WHNT-TV (Huntsville, Ala.), WQAD-TV (Moline, Ill.) and KFSM-TV (Fort Smith, Ark.) will expire in 1997. The license of WNEP-TV (Wilkes-Barre/Scranton, Pa.) will expire on August 1, 1994. The Company expects this license to be renewed. All of the television stations have three principal sources of revenue: local advertising sold to advertisers in the immediate geographic areas of the stations, national spot advertising and compensation paid by the networks for carrying commercial network programs. WREG-TV, WHNT-TV and KFSM-TV are affiliated with the CBS Television Network and WNEP-TV and WQAD-TV are affiliated with the ABC Television Network. WREG-TV, WQAD-TV and KFSM-TV are in the VHF band; WNEP-TV and WHNT-TV are in the UHF band, as are all other stations in their markets. According to A. C. Nielsen Company, Memphis is the 42nd largest television market in the United States, Wilkes-Barre/Scranton is the 47th largest market, Huntsville is the 87th largest market, Moline is part of the Quad Cities market, the 88th largest, and Fort Smith is the 118th largest market. The Company's two radio stations serve the New York metropolitan area. WQXR (FM) is currently the only commercial classical music station serving this market. WQEW (AM) is the only station that offers a format of American popular standards for the market. Applications for renewal of the FCC licenses for both stations for the seven-year terms starting June 1, 1991, are pending. Although the National Hispanic Media Coalition has filed an opposition to the radio stations' license renewals, the Company expects its licenses to be renewed. 7 INFORMATION SERVICES The New York Times Syndication Sales Corporation ("Syndication Sales") operates The New York Times News Service, Special Features and the licensing and reprint permission operations of The Times. The News Service transmits articles, graphics and photographs from The Times to approximately 650 newspapers and magazines in the United States and in 53 countries worldwide. Special Features markets other supplemental news services and feature material, graphics and photographs from The Times and other leading news sources to newspapers and magazines around the world. In 1993 the Company continued to expand its distribution of TimesFax, a six- to eight-page synopsis of The Times delivered to customers' facsimile machines or personal computers in markets where The Times is not easily available. In addition to distribution by satellite to cruise ships and U.S. Navy vessels, TimesFax is distributed to hotels, governments and corporations in over 50 countries and territories. In 1993 the Company launched its first industry specific fax product: The Monday Media edition, a six-page synopsis of media-related news, is produced weekly and distributed to media and advertising executives. Through its Index department and Times On-Line Services, Inc., the Company creates The New York Times Index and computer-retrievable data bases. The Company licenses Mead Data Central, Inc. to store, market and distribute its on-line computer data bases and University Microfilms, Inc. to produce and sell The New York Times Index and The Times on microform and CD-ROM. The Company has entered into license agreements which will make material from The Times available online on the day of publication through Dow Jones Business Information Services and America Online beginning in the first half of 1994. FOREST PRODUCTS COMPANIES The Company has equity interests in two Canadian newsprint companies, Donohue Malbaie Inc. ("Malbaie"), and Gaspesia Pulp and Paper Company Ltd. ("Gaspesia"), and in a partnership operating a supercalendered paper mill in Maine, Madison Paper Industries ("Madison") (collectively, the "Forest Products Companies"). None of these companies' debt is guaranteed by the Company. Exclusive of the $47,000,000 noncash charge to write down the Company's investment in the Forest Products Group (see "Summary of Segment Information"), the Company's equity in operations (an after-tax amount) of these businesses in 1993 was a loss of $4,852,000 compared with a loss of $8,718,000 in 1992. Softness due to oversupply is continuing. The improved year over year results are due principally to lower newsprint discounts and a favorable Canadian exchange rate. The Company has a 49% equity interest in Malbaie. The other 51% is owned by Donohue, Inc. ("Donohue"), a publicly traded Canadian company whose voting shares are controlled by Quebecor, a Canadian publishing company. Malbaie purchases pulp from Donohue and manufactures newsprint from this raw material on the paper machine it owns within the Donohue paper mill at Clermont, Quebec. Malbaie is wholly dependent upon Donohue for its pulp. The production capacity for 1993 of Malbaie was 196,000 metric tons. In 1993 Malbaie produced 192,000 metric tons of newsprint, 82,000 tons of which were sold to the Company with the balance sold to Donohue for resale. The Company has a 49% equity interest in Gaspesia. The other 51% is owned by Abitibi-Price Inc. ("Abitibi"), a publicly traded Canadian company. Gaspesia produces newsprint at Chandler, Quebec, on the southern coast of the Gaspe Peninsula. Gaspesia has cutting rights on approximately 2,500 square miles of forest under a license from the Province of Quebec. It also purchases wood from local jobbers and farmers. The production capacity for 1993 of Gaspesia was 256,000 metric tons. Under the terms of the Company's agreement with Abitibi, all of Gaspesia's production is purchased by Abitibi for resale to the Company and other customers. The Company has a long-term newsprint purchase agreement with Abitibi, pursuant to which it purchased 133,000 tons of newsprint from Abitibi in 1993. The Company includes all of this newsprint as affiliated tonnage when calculating how much newsprint the Company purchases from affiliated companies. 8 Madison is a partnership between Northern SC Paper Corporation ("Northern") and a subsidiary of Myllykoski Oy, a Finnish papermaking company. The Company owns 80% of Northern, and Myllykoski Oy, through a subsidiary, owns the remaining 20%. Madison produces supercalendered paper at its facility in Madison, Maine. Madison purchases all its wood from local suppliers, mostly under long-term contracts. Madison's production capacity for 1993 was 170,000 metric tons, 10,050 tons of which were sold to the Company. In 1994 Madison's five largest customers, one of which is the Company, are expected to purchase approximately 68% of Madison's budgeted production. The Forest Products Companies are subject to comprehensive environmental protection laws, regulations and orders of provincial, federal, state and local authorities of Canada or the United States (the "Environmental Laws"). The Environmental Laws impose effluent and emission limitations and require the Forest Products Companies to obtain, and operate in compliance with the conditions of, permits and other governmental authorizations ("Governmental Authorizations"). The Forest Products Companies follow policies and operate monitoring programs to ensure compliance with applicable Environmental Laws and Governmental Authorizations and to minimize exposure to environmental liabilities. Various regulatory authorities periodically review the status of the operations of the Forest Products Companies. Based on the foregoing, the Company believes that the Forest Products Companies are in substantial compliance with such Environmental Laws and Governmental Authorizations. COMPETITION The Times competes with newspapers of general circulation in New York City and its suburbs. The Times also competes in varying degrees with national publications such as The Wall Street Journal and USA Today and with television, radio and other media. Based on a specially prepared LNA report and The Times's own internal analysis, The Times believes that it ranks first in advertising revenue in the general weekday and Sunday newspaper field in the New York City metropolitan area. The Regional Newspapers and the International Herald Tribune compete with a variety of other advertising media in their respective markets. The Globe competes with other newspapers distributed in Boston and its neighboring suburbs. However, the only major daily metropolitan newspaper in direct competition with The Globe is The Boston Herald (daily and Sunday), whose publisher and sole stockholder (through Herald Media, Inc.) is Patrick J. Purcell. The Globe also competes with other communications media, such as direct mail, magazines, radio, television (including cable television), and nationally-distributed newspapers. Based on information supplied by major daily newspapers published in New England and assembled by the New England Newspaper Association, Inc., for the 12-month period ending December 31, 1993, The Globe ranked first in advertising inches among all newspapers published in Boston and New England. All the magazines published by the Company compete directly with comparable publications as well as with general interest magazines and other media, such as newspapers and broadcasting. All of the Company's television stations compete directly with other television stations in their respective markets and with other video services such as cable network programming carried on local cable systems. WQXR (FM) competes in New York City with WNYC (a non-commercial station) for the classical music audience, and it and WQEW (AM) compete with many adult-audience commercial radio stations and other media in New York City and surrounding suburbs. Syndication Sales's operations compete with several other syndicated features and supplemental news services. The Forest Products Companies are in a highly-competitive industry. 9 EMPLOYEES As of December 31, 1993, the Company had approximately 13,000 full-time employees. Approximately 4,290 full-time employees of The Times and City & Suburban Delivery Systems, which operates its newspaper wholesaler business, are represented by 14 unions. The Times has collective bargaining agreements effective through March 30, 2000, with all of its six production unions and with seven of its eight non-production unions. The production agreements enabled The Times to begin full operation of its Edison production and distribution facility in February 1993. The Times is in the process of negotiating the remaining agreement with the Newspaper Guild of New York; this agreement expired on March 30, 1993; The Times cannot predict the timing or the outcome of the negotiations. Three other entities owned by the Company (The Press Democrat, WQXR and WQEW) also have collective bargaining agreements covering certain of their employees. Approximately 2,103 full-time employees of The Globe and Wilson Tisdale Company, its subsidiary which owns the truck fleet used in delivery of The Globe, are represented by 12 unions. As of December 31, 1993, labor agreements with four of its 11 mechanical unions were in effect with expiration dates ranging from December 31, 1995, to December 31, 1998. Labor agreements with six of the other mechanical unions expired on December 31, 1992, and one expired on December 31, 1993; negotiations are proceeding with respect to these new agreements, all of which The Globe expects to be completed during 1994. A new agreement with The Boston Globe Employees' Association covering the period from January 1, 1991, through December 31, 1994, was recently approved by the union membership. On March 10, 1994, the membership of that union voted to affiliate with The Newspaper Guild. ITEM 2. PROPERTIES. The Times: The Company owns its headquarters at 229 West 43d Street, New York, New York. The building has 15 stories and approximately 714,000 square feet of floor space and serves as a publishing facility for The Times. The other publishing facility is located in Edison, New Jersey. This 1,300,000 square foot facility is occupied pursuant to a long-term lease with renewal and purchase options. The Edison production and distribution facility began producing newspapers in September 1992, and produces all of the advance Sunday sections of The Times (except The New York Times Magazine and the Television section) and approximately one-third of the weekday and Sunday New York edition. (See Notes 3 and 13 of Notes to Consolidated Financial Statements.) The Edison facility is the first step in a plan to modernize the production facilities of The Times, giving the Company the ability to add color, increase paging and sections and improve quality. To complete this upgrade in capability and capacity, the Company plans to replace the production facility housed in the basement at its 43d Street facility. On December 17, 1993, the Company executed a lease agreement and related agreements with the City of New York under which the Company will lease a 31-acre site for this replacement facility in Queens, New York. The agreements include a package of tax benefits and energy cost reductions valued at approximately $29 million. The Company has ten years in which to begin construction, and the lease will run for 25 years from the start of construction. The Company has the option to purchase the property at any time prior to the end of the lease. Construction of the facility is subject to approval of the Company's Board of Directors. (See Note 3 of Notes to Consolidated Financial Statements.) The Globe owns its printing plants in Boston and Billerica, Massachusetts, as well as its new Sunday pre-print storage, inserting and packaging plant in Westwood, Massachusetts. The Globe and its subsidiaries own or lease office and other facilities that are suitable and adequate for their current activities. The Regional Newspapers own their printing facilities. The Company's regional newspapers, magazines, broadcast stations and information businesses own or lease office facilities that are suitable and adequate for their current activities. 10 ITEM 3. LEGAL PROCEEDINGS. There are various legal actions that have arisen in the ordinary course of business and are now pending against the Company. Such actions are usually for amounts greatly in excess of the payments, if any, that may be required to be made. It is the opinion of management after reviewing such actions with legal counsel to the Company that the ultimate liability which might result from such actions will not have a material adverse effect on the consolidated financial position or results of operations of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT
Employed By Registrant Position(s) As Of Name Age Since March 21, 1994(1) - ------------------------------------ ----------- ---------- ----------------------------------------------------------- CORPORATE OFFICERS Arthur Ochs Sulzberger.............. 68 1951 Chairman (since 1973); Chief Executive Officer; Director; Publisher of The New York Times ("The Times") (1963 to 1992) Lance R. Primis..................... 47 1969 President and Chief Operating Officer (since 1992); President and General Manager of The Times (1988 to 1992) Katharine P. Darrow................. 50 1970 Senior Vice President (since 1993), Broadcasting, Corporate Development and Human Resources; Vice President, Broadcasting/Information Services and Corporate Development (1989 to 1993); Vice President, Information Services (1988 to 1989); General Counsel (1981 to 1989) David L. Gorham..................... 61 1974 Senior Vice President and Chief Financial Officer (since 1980); Treasurer (1988 to 1992) Michael E. Ryan..................... 55 1956 Senior Vice President (since 1980), Law, Forest Products and Special Projects Frank R. Gatti...................... 47 1974 Vice President (since 1988); Corporate Controller Leslie A. Mardenborough............. 45 1981 Vice President, Human Resources (since 1990); Director, Corporate Personnel (1987 to 1990) Gordon Medenica..................... 42 1982 Vice President, Operations and Planning (since 1993); Vice President, Corporate Planning (1990 to 1993); Director, Planning (1986 to 1990) Thomas H. Nied...................... 51 1977 Vice President, Taxation (since 1990); Tax Director (1977 to 1990) Elise J. Ross....................... 50 1973 Vice President and Chief Information Officer (since 1992); Senior Vice President of Systems and Technology of The Times (1992); Senior Vice President of Systems of The Times (1988 to 1992) Solomon B. Watson IV................ 49 1974 Vice President (since 1990); General Counsel (since 1989); Secretary (1979 to 1989)
11
Employed By Registrant Position(s) As Of Name Age Since March 21, 1994(1) - ------------------------------------ ----------- ---------- ----------------------------------------------------------- Laura J. Corwin..................... 49 1980 Secretary (since 1989) and Corporate Counsel (since January 1993); Assistant Secretary (1983 to 1989) Richard G. Thomas................... 45 1977 Treasurer (since 1992); Assistant Treasurer (1983 to 1992) OPERATING UNIT EXECUTIVES James W. FitzGerald................. 55 1968 President, Sports/Leisure Division of the Company's Magazine Group (since 1985) Stephen Golden...................... 47 1974 Vice President, Forest Products, Health, Safety and Environmental Affairs (since 1992); President and General Manager of the Company's Forest Products Group (since January 1994); Vice President, Forest Products (1990 to 1992); Director, Forest Products Group (1987 to 1990) C. Frank Roberts.................... 50 1970 Vice President, Broadcasting (since 1986) Arthur O. Sulzberger, Jr............ 42 1978 Publisher of The Times (since 1992); Deputy Publisher of The Times (1988 to 1992) William O. Taylor................... 61 1993 Publisher of The Boston Globe (since 1978) and Chairman and Chief Executive Officer of Globe Newspaper Company (since 1982) James C. Weeks...................... 51 1971 President, Regional Newspaper Group of the Company (since 1993); Senior Vice President, Operations, Regional Newspaper Group (1988 to 1993)
- --------------- (1) During the past five years, all of the executive officers listed above have held positions which were the same or substantially similar to those they currently hold except as indicated above. 12 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The information required by this item appears at page F-26 of this Form 10-K. ITEM 6. SELECTED FINANCIAL DATA. The information required by this item appears at page F-28 of this Form 10-K. ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The information required by this item appears at pages F-4 to F-7 of this Form 10-K. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by this item appears at pages F-2, F-3 and F-8 to F-27 of this Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. In addition to the information set forth under the caption "Executive Officers of the Registrant" in Part I of this Form 10-K, the information required by this item is incorporated by reference to pages 6 to 14 of the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders. ITEM 11. EXECUTIVE COMPENSATION. The information required by this item is incorporated by reference to pages 14 to 20 (but only up to and not including the paragraph entitled "Performance Presentation") of the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information required by this item is incorporated by reference to pages 1 to 8 of the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information required by this item is incorporated by reference to pages 14 to 15 and pages 17 to 20 (but only up to and not including the paragraph entitled "Performance Presentation") of the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders. 13 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (A) DOCUMENTS FILED AS PART OF THIS REPORT (1) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES (a) The consolidated financial statements of the Company are filed as part of this Form 10-K and are set forth on pages F-2, F-3 and F-8 to F-25. The report of Deloitte & Touche, Independent Public Accountants, dated February 10, 1994, is set forth on page F-26 of this Form 10-K. (b) The following additional consolidated financial information is filed as part of this Form 10-K and should be read in conjunction with the consolidated financial statements set forth on pages F-2, F-3 and F-8 to F-25. Schedules not included with this additional consolidated financial information have been omitted either because they are not applicable or because the required information is shown in the consolidated financial statements at the aforementioned pages.
Page ---- Consent of Independent Public Accountants......................................... 18 Consolidated Schedules for the Three Years Ended December 31, 1993: V--Property, Plant and Equipment............................................. S-1 VI--Accumulated Depreciation of Property, Plant and Equipment................ S-2 VIII--Valuation and Qualifying Accounts...................................... S-3 IX--Short-term Borrowings.................................................... S-4 X--Supplementary Income Statement Information................................ S-5
Separate financial statements and supplemental schedules of associated companies accounted for by the equity method are omitted in accordance with the provisions of Rule 3-09 of Regulation S-X. (2) EXHIBITS (2.1) Agreement and Plan of Merger dated as of June 11, 1993, as amended by the First Amendment dated as of August 12, 1993, by and among the Company, Sphere, Inc. and Affiliated Publications, Inc. (filed as Exhibit 2 to the Form S-4 Registration Statement, Registration No. 33-50043, on August 23, 1993, and included as Annex I to the Joint Proxy Statement/Prospectus included in such Registration Statement (schedules omitted--the Company agrees to furnish a copy of any schedule to the Commission upon request), and incorporated by reference herein). (2.2) Stockholders Agreement dated as of June 11, 1993 by and between the Company and the other parties signatory thereto (filed as Exhibit 2.1 to the Form S-4 Registration Statement, Registration No. 33-50043, on August 23, 1993, and included as Annex II to the Joint Proxy Statement/Prospectus included in such Registration Statement, and incorporated by reference herein). (3.1) Certificate of Incorporation as amended by the Class A and Class B stockholders and as restated on September 29, 1993. (3.2) By-laws as amended through February 17, 1994. (4) The Company agrees to furnish to the Commission upon request a copy of any instrument with respect to long-term debt of the Company and any subsidiary for which consolidated or unconsolidated financial statements are required to be filed, and for which the 14 amount of securities authorized thereunder does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. (9.1) Globe Voting Trust Agreement, dated as of October 1, 1993. (9.2) Jordan Voting Trust Agreement, dated as of January 29, 1987, as amended through May 15, 1987 (filed as Exhibit 9.2 to API's Form 10-K for fiscal year ended December 31, 1989, and incorporated by reference herein). (10.1) The Company's Executive Incentive Compensation Plan as amended through December 20, 1990 (filed as an Exhibit to the Company's Form 10-K dated March 1, 1991, and incorporated by reference herein). (10.2) The Company's 1991 Executive Stock Incentive Plan, as amended through April 13, 1993. (10.3) The Company's 1991 Executive Cash Bonus Plan, adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy Statement dated March 1, 1991, and incorporated by reference herein). (10.4) The Company's Non-Employee Directors' Stock Option Plan, adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy Statement dated March 1, 1991, and incorporated by reference herein). (10.5) The Company's Supplemental Executive Retirement Plan as amended through May 5, 1989 (filed as an Exhibit to the Company's Form 10-K dated March 29, 1990, and incorporated by reference herein). (10.6) Lease (short form) between the Company and Z Edison Limited Partnership dated April 8, 1987 (filed as an Exhibit to the Company's Form 10-K dated March 27, 1988, and incorporated by reference herein). (10.8) Agreement of Lease, dated as of December 15, 1993, between The City of New York, Landlord, and the Company, Tenant (as successor to New York City Economic Development Corporation (the "EDC"), pursuant to an Assignment and Assumption of Lease With Consent, made as of December 15, 1993, between the EDC, as Assignor, to the Company, as Assignee). (10.9) Funding Agreement #1, dated as of December 15, 1993, between the EDC and the Company. (10.10) Funding Agreement #2, dated as of December 15, 1993, between the EDC and the Company. (10.11) Funding Agreement #3, dated as of December 15, 1993, between the EDC and the Company. (10.12) Funding Agreement #4, dated as of December 15, 1993, between the EDC and the Company. (10.13) New York City Public Utility Service Power Service Agreement, made as of May 3, 1993, between The City of New York, acting by and through its Public Utility Service, and The New York Times Newspaper Division of the Company. (10.14) Employment Agreement, dated May 19, 1993, between API, Globe Newspaper Company and William O. Taylor. (10.15) API's 1989 Stock Option Plan (filed as Annex F-1 to API's Proxy Statement-Joint Prospectus, dated as of April 28, 1989, contained in API's Registration Statement on 15 Form S-4 (Registration Statement No. 33-28373) declared effective April 28, 1989, and incorporated by reference herein). (10.16) API's Supplemental Executive Retirement Plan, as amended effective September 15, 1993. (10.17) API's 1990 Stock Option Plan (Restated 1991) (filed as Exhibit 1 to API's Quarterly Report on Form 10-Q for the Quarter ended June 30, 1991 (Commission File No. 1-10251), and incorporated by reference herein). (10.18) Form of Substituted Stock Option Option Agreement/Incentive 86 among API, its predecessor company and certain employees (filed as Exhibit 10.27 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's Registration Statement on Form S-4 (Registration Statement No. 33-28373) declared effective April 28, 1989, and incorporated by reference herein). (10.19) Form of Substituted Stock Option Option Agreement/Incentive 87 among API, its predecessor company and certain employees (filed as Exhibit 10.29 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's Registration Statement on Form S-4 (Registration Statement No. 33-28373) declared effective April 28, 1989, and incorporated by reference herein). (10.20) Form of Substituted Stock Option Option Agreement/Incentive 88 among API, its predecessor company and certain employees (filed as Exhibit 10.31 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's Registration Statement on Form S-4 (Registration Statement No. 33-28373) declared effective April 28, 1989, and incorporated by reference herein). (21) Subsidiaries of the Company. (B) REPORTS ON FORM 8-K During the quarter ended December 31, 1993, no reports on Form 8-K were filed. 16 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. Date: March 21, 1994 (Registrant) THE NEW YORK TIMES COMPANY By: LAURA J. CORWIN ................................. Laura J. Corwin, Secretary PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE - --------------------------------------------------- -------------------------------------- -------------------- ARTHUR OCHS SULZBERGER Chairman (Chief March 21, 1994 (Arthur Ochs Sulzberger) Executive Officer), Director JOHN F. AKERS Director March 21, 1994 (John F. Akers) FRANK R. GATTI Vice President, March 21, 1994 (Frank R. Gatti) Corporate Controller (Principal Accounting Officer) RICHARD L. GELB Director March 21, 1994 (Richard L. Gelb) LOUIS V. GERSTNER, JR. Director March 21, 1994 (Louis V. Gerstner, Jr.) DAVID L. GORHAM Senior Vice President and Chief March 21, 1994 (David L. Gorham) Financial Officer (Principal Financial Officer) MARIAN S. HEISKELL Director March 21, 1994 (Marian S. Heiskell) A. LEON HIGGINBOTHAM, JR. Director March 21, 1994 (A. Leon Higginbotham, Jr.) RUTH S. HOLMBERG Director March 21, 1994 (Ruth S. Holmberg) ROBERT A. LAWRENCE Director March 21, 1994 (Robert A. Lawrence) WALTER E. MATTSON Director March 21, 1994 (Walter E. Mattson) GEORGE B. MUNROE Director March 21, 1994 (George B. Munroe) CHARLES H. PRICE II Director March 21, 1994 (Charles H. Price II) LANCE R. PRIMIS President (Chief Operating Officer) March 21, 1994 (Lance R. Primis) GEORGE L. SHINN Director March 21, 1994 (George L. Shinn) DONALD M. STEWART Director March 21, 1994 (Donald M. Stewart) JUDITH P. SULZBERGER Director March 21, 1994 (Judith P. Sulzberger) WILLIAM O. TAYLOR Director March 21, 1994 (William O. Taylor) CYRUS R. VANCE Director March 21, 1994 (Cyrus R. Vance)
17 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS THE NEW YORK TIMES COMPANY: We consent to the incorporation by reference in Registration Statements No. 2-91826, 33-31538, 33-43210, 33-43211, 33-50461, 33-50465, 33-50457, 33-50467 and 33-50459 on Forms S-8 of our report dated February 10, 1994, appearing in this Annual Report on Form 10-K of The New York Times Company (the "Company") for the year ended December 31, 1993. We also consent to the Company extending the reference to us under the heading "Experts" in Registration Statement No. 33-31538 to comprehend our report, dated February 10, 1994, on the consolidated balance sheets of the Company as of December 31, 1993 and 1992, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993 included in the aforementioned Form 10-K. DELOITTE & TOUCHE New York, New York March 21, 1994 18 THE NEW YORK TIMES COMPANY 1993 Consolidated Financial Statements - ---------------------------------------------------------------------- Contents Page - ---------------------------------------------------------------------- Financial Highlights F-1 Segment Information F-2 Management's Discussion and Analysis F-4 Consolidated Statements of Operations F-8 Consolidated Balance Sheets F-9 Consolidated Statements of Cash Flows F-11 Consolidated Statements of Stockholders' Equity F-13 Notes to Consolidated Financial Statements F-14 Independent Auditors' Report F-26 Management's Responsibilities Report F-26 Market Information F-26 Quarterly Information F-27 Ten-Year Supplemental Financial Data F-28 FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------------------- Dollars in thousands except per share data Year Ended December 31 1993 1992 1991 1990 1989 - -------------------------------------------------------------------------------------------------------------------- REVENUES AND INCOME Revenues $2,019,654 $1,773,535 $1,703,101 $1,776,761 $1,768,893 Operating profit 126,581 88,408 93,639 129,779 169,044 Income from continuing operations before income taxes and equity in operations of forest products group 101,206 8,525 63,053 110,190 148,364 Income (Loss) from continuing operations before equity in operations of forest products group 57,975 (2,554) 41,293 60,871 84,097 Equity in operations of forest products group (51,852) (8,718) 5,700 3,965 (15,922) Income (Loss) from continuing operations before net cumulative effect of accounting changes 6,123 (11,272) 46,993 64,836 68,175 Income from discontinued operations, net of taxes - - - - 198,448 Net cumulative effect of accounting changes - (33,437) - - - Net income (loss) 6,123 (44,709) 46,993 64,836 266,623 - -------------------------------------------------------------------------------------------------------------------- FINANCIAL POSITION Property, plant and equipment - net 1,112,024 902,755 966,593 1,013,430 972,474 Total assets 3,215,204 1,994,974 2,127,981 2,149,623 2,187,520 Long-term debt and capital lease obligations 460,063 206,911 213,487 319,449 337,417 Common stockholders' equity 1,598,883 999,630 1,073,442 1,055,785 1,064,446 - -------------------------------------------------------------------------------------------------------------------- PER SHARE OF COMMON STOCK Continuing operations before net cumulative effect of accounting changes .07 (.14) .61 .85 .87 Discontinued operations - - - - 2.52 Net cumulative effect of accounting changes - (.43) - - - Net income (loss) .07 (.57) .61 .85 3.39 Dividends .56 .56 .56 .54 .50 Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63 - -------------------------------------------------------------------------------------------------------------------- KEY RATIOS (See notes below) Operating profit to revenues 6% 5% 5% 7% 10% Income from continuing operations before equity in operations of forest products group to revenues 3% 2% 2% 3% 5% Return on average stockholders' equity - 2% 4% 6% 27% Return on average total assets - 1% 2% 3% 13% Long-term debt and capital lease obligations to total capitalization 22% 17% 17% 23% 24% Current assets to current liabilities .89 1.08 .89 .81 .86 - -------------------------------------------------------------------------------------------------------------------- EMPLOYEES 13,000 10,100 10,100 10,400 10,600 - -------------------------------------------------------------------------------------------------------------------- Amounts for 1993 have been affected by the October 1, 1993 acquisition of The Boston Globe (see Note 2).
In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold the residual assets. The closing and related sale resulted in a pre-tax loss of $53.8 million ($37.1 million after taxes or $.47 per share). This transaction is not reflected in the 1992 income amounts used in the applicable key ratio calculations presented above. Net cumulative effect of accounting changes reflects the 1992 adoption of the change in methods of accounting for income taxes, postretirement benefits other than pensions and postemployment benefits. The net cumulative effect is not reflected in the 1992 income amounts used in the applicable key ratio calculations presented above. For 1993, return on average stockholders' equity and return on average total assets are less than 1 percent due to several factors which lowered net income for the year. See Management's Discussion and Analysis on page F-4. F-1 SEGMENT INFORMATION - ------------------------------------------------------------------------------ The Company has classified its business into the following segments and equity interests: NEWSPAPERS: The New York Times, The Boston Globe, 28 regional newspapers, a wholesale newspaper distribution business in the New York City metropolitan area and a one-half interest in the International Herald Tribune S.A. MAGAZINES: Numerous publications and related activities in the women's publishing and sports/leisure fields. BROADCASTING/INFORMATION SERVICES: Five network-affiliated television stations, two radio stations, a news service, a features syndicate, TimesFax and licensing operations of The New York Times databases and microfilm. FOREST PRODUCTS: Equity interests in two newsprint companies and a partnership in a supercalendered paper mill that together supply the major portion of the Newspaper Group's annual paper requirements. - ------------------------------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - ------------------------------------------------------------------------------- REVENUES Newspapers $1,537,934 $1,306,952 $1,274,435 Magazines 394,463 386,120 352,686 Broadcasting/Information services 87,257 80,463 75,980 - ------------------------------------------------------------------------------- Total $2,019,654 $1,773,535 $1,703,101 - ------------------------------------------------------------------------------- OPERATING PROFIT (LOSS) Newspapers $ 114,332 $ 81,173 $ 93,578 Magazines 12,330 9,929 (492) Broadcasting/Information services 19,403 14,766 13,957 Unallocated corporate expenses (19,484) (17,460) (13,404) - ------------------------------------------------------------------------------- Total 126,581 88,408 93,639 Interest expense, net of interest income 25,375 26,115 30,586 Loss on disposition of Gwinnett Daily News - 53,768 - - ------------------------------------------------------------------------------- Income before income taxes and equity in operations of forest products group 101,206 8,525 63,053 Income taxes 43,231 11,079 21,760 - ------------------------------------------------------------------------------- Income (Loss) before equity in operations of forest products group 57,975 (2,554) 41,293 Equity in operations of forest products group (51,852) (8,718) 5,700 - ------------------------------------------------------------------------------- INCOME (LOSS) BEFORE NET CUMULATIVE EFFECT OF ACCOUNTING CHANGES $ 6,123 $ (11,272) $ 46,993 - ------------------------------------------------------------------------------- See notes to consolidated financial statements. F-2 SEGMENT INFORMATION - ------------------------------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - ------------------------------------------------------------------------------- DEPRECIATION AND AMORTIZATION Newspapers $ 98,957 $ 74,495 $ 77,090 Magazines 18,616 20,628 26,683 Broadcasting/Information services 10,731 12,424 12,621 Corporate 528 385 446 - ------------------------------------------------------------------------------- Total $ 128,832 $ 107,932 $ 116,840 - ------------------------------------------------------------------------------- CAPITAL EXPENDITURES Newspapers $ 71,746 $ 42,675 $ 21,867 Magazines 3,059 1,888 1,467 Broadcasting/Information services 3,323 1,863 2,697 Corporate 1,491 903 169 - ------------------------------------------------------------------------------- Total $ 79,619 $ 47,329 $ 26,200 - ------------------------------------------------------------------------------- IDENTIFIABLE ASSETS AT DECEMBER 31 Newspapers $2,676,779 $1,321,667 $1,444,462 Magazines 247,723 255,777 272,323 Broadcasting/Information services 113,675 117,679 122,436 Corporate 101,007 160,459 125,760 Investment in forest products group 76,020 139,392 163,000 - ------------------------------------------------------------------------------- Total $3,215,204 $1,994,974 $2,127,981 - ------------------------------------------------------------------------------- See notes to consolidated financial statements. Newspaper Group amounts for 1993 have been affected by the October 1, 1993 acquisition of The Boston Globe (see Note 2). Newspaper Group operating profit for 1993, 1992 and 1991 includes charges of $35.4 million, $28.0 million and $20.0 million, respectively, for costs related to staff reductions at The New York Times newspaper. Equity in operations of Forest Products Group and investment in Forest Products Group for 1993 reflect an after-tax noncash charge of $47.0 million to write down the Company's investment in this Group to reflect current operating conditions and economic factors in the industry. Newspaper Group operating results for 1992 were negatively affected by $21.4 million for labor disruptions and training and start-up costs related to the new production and distribution facility located in Edison, New Jersey ("Edison") for The New York Times newspaper. F-3 MANAGEMENT'S DISCUSSION AND ANALYSIS - ------------------------------------------------------------------------------- Per share amounts in the following Management's Discussion and Analysis are computed on an after-tax basis. Results of Operations: 1993 Compared with 1992 In 1993, the Company reported net income of $6.1 million, or $.07 per share compared with a net loss of $44.7 million, or $.57 per share, in 1992. Earnings for 1993 were affected by the following factors: - $47.0 million after-tax charge ($.56 per share) against equity in operations of the Forest Products Group to write down the Company's investment in the Group to reflect current operating conditions and economic factors in the industry. - $30.0 million pre-tax charge ($.20 per share) to cover severance and related costs resulting from anticipated white-collar staff reductions at The New York Times newspaper ("The Times"). - $5.4 million pre-tax charge ($.03 per share) to cover severance and related costs resulting from voluntary early retirements from the composing room of The Times. - $2.6 million pre-tax gain ($.02 per share) on the sale of assets. - $5.6 million tax expense ($.07 per share) due to the enactment of the Omnibus Budget Reconciliation Act of 1993 ("Tax Act") which increased the Federal corporate income tax rate from 34 percent to 35 percent retroactively to January 1, 1993, affected the deductibility of certain costs and caused the Company to remeasure its year-end 1992 deferred tax balances to reflect the higher tax rate. - $3.7 million pre-tax ($.02 per share) in unfavorable advertising and circulation rate adjustments due to a snowstorm in March that disrupted delivery of The Times. Earnings for 1992 were affected by the following factors: - $33.4 million after-tax charge ($.43 per share) for the adoption as of January 1, 1992, of three mandated non-cash accounting changes related to income taxes, postretirement benefits and postemployment benefits. - $3.1 million pre-tax gain ($.02 per share) on the sales of assets. - $28.0 million pre-tax charge ($.20 per share) to cover severance and related costs for production unions at The Times. - $53.8 million pre-tax loss ($.47 per share) due to the closing of The Gwinnett (Ga.) Daily News, the sale of its residual assets and its 1992 operations. - $10.4 million pre-tax ($.07 per share) for training and start-up costs related to The Times's new production and distribution facility located in Edison, N.J. ("Edison"). - $11.0 million pre-tax ($.08 per share) due to labor disruptions arising from a dispute between independent distributors of The Times and its Drivers' Union. Exclusive of the factors described above for the 1993 and 1992 periods, earnings would have been $.93 per share in 1993 compared with $.66 per share in 1992. Consolidated revenues for 1993 increased to $2.02 billion from $1.77 billion in 1992, due principally to the October 1, 1993 acquisition of The Boston Globe ("The Globe"), the June 1992 acquisition of two wholesale newspaper distribution businesses and higher advertising and circulation revenues. Costs and expenses after excluding special items increased to $1.86 billion from $1.64 billion in 1992. The increase was due principally to the October 1993 Globe acquisition, the June 1992 wholesale distribution business acquisition and higher newsprint, depreciation, and payroll and benefit costs. Operating profit after excluding the special factors rose to $163.1 million from $134.7 million in 1992 due principally to higher advertising and circulation revenues in the Newspaper Group, which included the operations of The Globe subsequent to October 1, 1993 and a strong performance by the Company's television stations which was partially offset by higher newsprint prices and increased depreciation. Interest expense, net of interest income, declined to $25.4 million in 1993 from $26.1 million in 1992. Lower levels of borrowings through the first half of 1993 were partially offset by increased borrowings in connection with the Company's stock repurchase program (see Note 13) and the utilization of cash balances in connection with the October 1, 1993 acquisition of The Globe. The Company's effective income tax rate for 1993 was 42.7 percent compared with 44.5 percent in 1992, exclusive of the effect of the Gwinnett transaction. The lower rate is due principally to the recognition of capital loss carryforwards and state operating loss carryforwards, which were partially offset by the negative impact of the Tax Act. A discussion of the operating results of the Company's segments and equity interests follows: Exclusive of the special pre-tax items ($36.5 million in 1993 and $47.9 million in 1992), operating profit of the Newspaper Group was $150.8 million compared with $129.1 million in 1992 on revenues of $1.54 billion and $1.31 billion respectively. Improvements in revenues were due to higher advertising and circulation rates, principally at The Times, the June 1992 acquisition of two wholesale newspaper distribution businesses and the October 1, 1993 acquisition of The Globe. The higher operating profit results principally from the inclusion of the results of The Globe since the October 1, 1993 acquisition date, higher advertising and circulation revenues, cost controls throughout the Group and cost savings related to Edison, which were partially offset by advertising weakness at the Company's two California regional newspapers, increased depreciation and start-up and redesign costs related to certain sections of The Times. F-4 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) - ------------------------------------------------------------------------------- Advertising linage at The Times increased 1.0 percent over 1992 to 77.8 million lines. Retail advertising rose 4.9 percent over 1992 while national and classified advertising declined 2.4 percent and 4.1 percent respectively. Circulation of The Times for the year ended December 31, 1993 was 1,179,000 copies weekdays, approximately equal to the 1992 period. Sunday circulation of 1,781,200 copies reached a record high, up 17,100 copies over the prior year. At The Globe, full-run advertising volume for the year 1993 increased 4.0 percent over 1992 to 2.5 million inches. Retail and classified advertising increased 9.9 percent and 2.6 percent, respectively, over 1992, but national advertising declined 1.6 percent. Circulation of The Globe for the year ended December 31, 1993 was 504,600 copies weekdays, down 3,300 copies, and 814,500 copies Sundays, up 2,700 copies. At the 30 regional newspapers that were in the Group for the entire 1993 and 1992 periods (two weekly newspapers were sold at the end of 1993), advertising volume increased 3.9 percent to 35.2 million inches. The 1993 amount includes a significantly higher volume of advertising inserts. Circulation for the daily regional newspapers for the year ended December 31, 1993 was 851,000 copies weekdays, up 4,500 copies, and 853,700 copies Sundays, up 9,200 copies. Circulation for the non-dailies was 72,700 copies, down 500 copies. The Magazine Group's operating profit was $12.3 million in 1993 compared with $9.9 million in 1992 on revenues of $394.5 million and $386.1 million respectively. Exclusive of the amortization costs associated with the acquisitions of McCall's and Golf World (U.S.), the Group's operating profit was $25.4 million in both years. Results for 1993 were adversely affected by an August 1993 lawsuit settlement of $1.5 million. In addition, continuing softness in the consumer packaged goods category in the women's magazines field continues to affect the Group adversely. Advertising pages as reported to Publications Information Bureau ("PIB") for Golf Digest increased 1 percent from 1992 to 1,344 pages; for Tennis increased 4 percent from 1992 to 795 pages; for Family Circle decreased 9 percent from 1992 to 1,570 pages, and for McCall's decreased 5 percent from 1992 to 1,138 pages. The Broadcasting/Information Services Group operating profit was $19.4 million compared with $14.8 million in 1992 on revenues of $87.3 million and $80.5 million respectively. Higher local advertising revenues at the Company's television stations accounted for the improved results. Exclusive of the $47.0 million noncash charge to write down the Company's investment in its Forest Products Group, equity in operations (an after-tax amount) of the Group was a loss of $4.9 million compared with a loss of $8.7 million in 1992. The 1993 results have been adversely affected by $0.6 million resulting from the impact of the Tax Act. Lower newsprint discounts and a favorable Canadian exchange rate accounted for the improved results. Higher newsprint discounts which were effective October 1, 1993 negatively affected the Group during the fourth quarter and into 1994. The Forest Products Group write-down resulted principally from the softening of paper prices due to continuing oversupply, as well as high costs and projected environmental expenditures at one mill. All of the Company's paper mills were affected by pricing difficulties in 1993. Newsprint prices showed some strengthening during the second and third quarters but they resumed their decline in October and were at their lowest point at year-end. This trend continued into the first quarter of 1994 as prices fell further in January. A modest March 1, 1994, newsprint price increase has been announced throughout the industry. However, other recently announced increases have not become effective because of oversupply, and it is uncertain whether this increase will be realized. In addition to pricing difficulties, one of the Company's two newsprint mills has been unable to fully overcome high cost disadvantages. This mill also requires a capital expenditure (estimated to be $25.0 million) to comply with environmental regulations which become effective in 1995. This expenditure, if it is made, will not lower the mill's costs. In measuring the write-down, the Company projected the future cash flows of the mills, including the required capital expenditure, and determined that the value of those cash flows was less than the carrying value of its investment in the Forest Products Group. Due in part to this write-down, the Company currently expects to report an improvement in 1994 equity operations since it will not be recording operating losses for one of its mills. - ------------------------------------------------------------------------------- Results of Operations: 1992 Compared with 1991 In 1992, the Company reported a net loss of $44.7 million, or $.57 per share, compared with net income of $47.0 million, or $.61 per share, in 1991. The 1992 year was adversely affected by $33.4 million, or $.43 per share, resulting from the net cumulative effect of adopting three mandated noncash accounting changes related to postretirement and postemployment benefits (see Note 11) and income taxes (see Note 7) as of January 1, 1992. Exclusive of the net cumulative effect of the accounting changes, the net loss for 1992 was $11.3 million or $.14 per share. Earnings for 1992 and 1991 have also been affected by the following factors: - $3.1 million pre-tax gains ($.02 per share) in 1992 on the sale of assets. - $28.0 million pre-tax charge ($.20 per share) in 1992 to cover severance and related costs resulting from labor agreements for various production unions at The Times. - $53.8 million pre-tax loss ($.47 per share) in 1992 due to the closing of The Gwinnett (Ga.) Daily News, the sale of its residual assets and its 1992 operations. F-5 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) - ------------------------------------------------------------------------------ - $10.4 million pre-tax ($.07 per share) in 1992 for training and start-up costs related to commencement of operations at Edison. - $11.0 million pre-tax ($.08 per share) in 1992 due to labor disruptions arising from a dispute between inde-pendent distributors of The Times and its Drivers' Union. - $7.8 million pre-tax ($.05 per share) in 1992 for the annual charge related to postretirement benefits. - $20.0 million pre-tax charge ($.15 per share) in 1991 to cover severance and related costs resulting from a voluntary early retirement program for 160 employees, mainly Newspaper Guild at The Times. - $10.0 million ($.13 per share) in 1991 for the reversal of a provision for income taxes which related to a settlement with the Internal Revenue Service for tax years 1980 through 1984. Exclusive of these factors, 1992 earnings would have been $.71 per share compared with $.63 per share for 1991. Excluding the factors mentioned above, the principal reason for the increase in net income is higher advertising and circulation revenues in the Newspaper and Magazine Groups and lower newsprint costs due to increased price discounting offset, in part, by the adverse effect such discounting had on equity in earnings of the Forest Products Group. Consolidated revenues increased to $1.77 billion from $1.70 billion in 1991. The increase was due principally to higher advertising rates, higher circulation revenues in the Newspaper and Magazine Groups and the June 1992 acquisition of two wholesale newspaper distribution businesses, which distribute The Times and other publications in New York City and parts of New Jersey. Excluding the special factors, costs and expenses increased to $1.63 billion in 1992 from $1.59 billion in 1991 due principally to higher payroll and benefit costs and operating expenses of two wholesale distribution businesses acquired in June 1992 offset, in part, by lower newsprint prices. Interest expense, net of interest income, declined to $26.1 million compared with $30.6 million in 1991 due to lower levels of borrowings. The nondeductibility of a portion of the loss on the closedown and sale of The Gwinnett (Ga.) Daily News significantly increased the Company's tax rate. Exclusive of the Gwinnett transaction and the 1991 favorable IRS settlement, the effective income tax rate in 1992 declined to 44.5 percent compared with 50.4 percent in 1991. The lower rate is due principally to a decrease in the relationship of amortization expense for intangible assets to 1992's pre-tax income, which was significantly higher than that of 1991. A discussion of the operating results of the Company's segments and equity interests follows: Exclusive of the special pre-tax items ($47.9 million in 1992 and $20.0 million in 1991), operating profit of the Newspaper Group increased to $129.1 million in 1992 from $113.6 million in 1991 on revenues of $1.31 billion and $1.27 billion respectively. Improvements in revenues and operating profit were due to higher advertising and circulation rates and increased circulation. Lower newsprint costs also favorably affected the Group. The June 1992 acquisition of wholesale newspaper distribution businesses also increased the Group's revenues. Advertising linage at The Times declined 2.0 percent to 77.0 million lines compared with 1991. Retail advertising was flat compared with 1991 and national advertising rose 0.9 percent. However, classified advertising declined 10.5 percent from last year. Circulation of The Times for the year ended December 31, 1992, reached record highs. Circulation was 1,181,500 copies weekdays and 1,763,800 copies Sundays, up 21,600 copies and 29,800 copies, respectively, over the prior year. Depreciation of the building portion of Edison amounted to $14.0 million per year beginning in 1990. Depreciation of the facility's equipment has begun and will increase as each element is placed in service. Production commenced in September 1992 and depreciation of related equipment began in the fourth quarter. Full operation of the facility began during the first quarter of 1993. The Company estimates that depreciation of the building and equipment will total $33.0 million in 1993 increasing to $35.0 million in 1994 when the facility is operational for a full year. At the 30 regional newspapers that were in the Group for the entire 1992 and 1991 periods, advertising volume increased 2.5 percent to 33.8 million inches. The 1992 amount includes a significantly higher volume of advertising inserts. Circulation for the daily regional newspapers for the year ended December 31, 1992, was 844,500 copies Sundays, up 13,800 copies, and 846,500 copies weekdays, up 10,400 copies. Circulation for the non-dailies was 73,200 copies, up 3,100 copies. The Magazine Group's operating profit was $9.9 million in 1992 compared with a loss of $0.5 million in 1991 on revenues of $386.1 million and $352.7 million respectively. Exclusive of the amortization costs associated with the acquisitions of McCall's and Golf World (U.S.), which were structured to maximize cash flow, the Group's operating profit was $25.4 million in 1992 compared with $21.2 million in 1991. The better 1992 results were primarily due to increased advertising pages at most of the Group's magazines and lower magazine paper prices. Most of the Group's magazines increased their market share compared with 1991. Advertising pages as reported to PIB for Golf Digest increased 10 percent from 1991 to 1,332 pages; for Tennis increased 4 percent from 1991 to 768 pages; for Family Circle increased 12 percent from 1991 to 1,723 pages, and for McCall's increased 11 percent from 1991 to 1,201 pages. Broadcasting/Information Services Group operating profit was $14.8 million in 1992 compared with $14.0 million in 1991 on revenues of $80.5 million and $76.0 million respectively. The higher operating profit was due to higher local advertising revenues at the Company's television stations offset, in part, by costs related to a format change for the AM radio station WQEW, formerly WQXR- AM. Equity in operations of the Forest Products Group (an after-tax amount) was a loss of $8.7 million compared with income of $5.7 million in 1991. Higher paper discounts due to oversupply continue to have a negative impact. F-6 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONCLUDED) - ------------------------------------------------------------------------------- Liquidity and Capital Resources Net cash provided by operating activities of $175.3 million was used primarily to modernize facilities and equipment, to pay dividends to stockholders, to repurchase shares of the Company's Class A Common Stock and, in part, to purchase The Globe. The ratio of current assets to current liabilities was 0.89 at December 31, 1993 compared with 1.08 at December 31, 1992, and long-term debt and capital lease obligations as a percentage of total capitalization was 22 percent at December 31, 1993 compared with 17 percent at December 31,1992. The increase was due principally to the impact of the Company's stock repurchase program discussed below, which was partially offset by the acquisition of The Globe on October 1, 1993. In October 1993, the Company announced authorized expenditures of up to $150.0 million for repurchases of its Class A Common Stock. Under the program, purchases may be made from time to time either in the open market or through private transactions. The number of shares that may be purchased in market transactions may be limited as a result of The Globe transaction. Purchases may be suspended from time to time or discontinued. To date the Company has repurchased approximately 30,000 shares of its Class A Common Stock at an average price of $24.78 per share under this program. Under a previously announced program that expired at the close of The Globe transaction, the Company expended approximately $254.0 million. Under this program, the Company repurchased approximately 10,231,000 shares of its Class A Common Stock at an average price of $24.87 per share. In December 1993 the Company and the City of New York executed a lease agreement and related agreements, under which the Company will lease 31 acres of City-owned land in Queens, New York, on which The Times plans to build a state- of-the-art printing and distribution facility. The Company estimates that the cost of the new facility will be approximately $280.0 million with construction to begin in the summer of 1994 and completion expected in 1997. Construction of the facility is subject to approval of the Company's Board of Directors. The Company currently estimates that, exclusive of the Queens facility, capital expenditures for 1994 will range from $90.0 million to $110.0 million. In connection with the 1991 divestiture of a jointly-owned affiliate, Spruce Falls Power and Paper Company Limited, the Company committed to lend up to $26.5 million (C$30.0 million) to the new owners of the mill. Such loans will take place over a five-year period ending December 1996. To date the Company has loaned approximately U.S. $20.5 million under the commitment. In October 1993 the Company issued notes totaling $200.0 million to an insurance company with interest payable semi-annually. $100.0 million of five- year notes were issued at a rate of 5.50 percent, and the remaining $100.0 million were issued as six and one-half year notes at a rate of 5.77 percent. In connection with the previously announced charges totaling $35.4 million for white-collar and production union staff reductions (see Note 4), the Company currently anticipates that the staff reductions and related expenditures will occur during 1994 and that the cost of this program will be recovered through reduced costs over a two-year period. The charges cover approximately 300 employees with an average annual wage and benefit cost of $110,000 per employee. The Company does not anticipate that its ongoing business operations will be affected by this reduction of staff and expects to fund this charge through internally generated funds. In January 1994 a definitive agreement was reached regarding the sale of a partnership (BPI Communications, L.P.) in which the Company has a one-third interest. In February 1994, the Company received approximately $53.0 million, which will primarily be utilized to repay notes payable, which totaled $62.3 million at December 31, 1993. In addition to cash provided from operating activities, the Company has several established sources for future liquidity purposes, including several revolving credit and term loan agreements. At December 31, 1993, $150.0 million was available for borrowing by the Company under these agreements. The Company anticipates that during 1994 cash for operating, investing and financing activities will continue to come from a combination of internally generated funds and external financing. F-7 CONSOLIDATED STATEMENTS OF OPERATIONS - ------------------------------------------------------------------------------- Dollars and shares in thousands except Year Ended December 31 per share data 1993 1992 1991 - ------------------------------------------------------------------------------- REVENUES Advertising $1,399,042 $1,254,764 $1,254,365 Circulation 473,971 419,454 390,600 Other 146,641 99,317 58,136 - ------------------------------------------------------------------------------- Total 2,019,654 1,773,535 1,703,101 - ------------------------------------------------------------------------------- COSTS AND EXPENSES Production costs: Raw materials 280,531 250,575 288,618 Wages and benefits 437,528 388,403 361,660 Other 418,554 365,651 341,105 - ------------------------------------------------------------------------------- Total 1,136,613 1,004,629 991,383 Selling, general and administrative expenses 756,460 680,498 618,079 - ------------------------------------------------------------------------------- Total 1,893,073 1,685,127 1,609,462 - ------------------------------------------------------------------------------- OPERATING PROFIT 126,581 88,408 93,639 Interest expense, net of interest income 25,375 26,115 30,586 Loss on disposition of Gwinnett Daily News - 53,768 - - ------------------------------------------------------------------------------- Income before income taxes and equity in operations of forest products group 101,206 8,525 63,053 Income taxes 43,231 11,079 21,760 - ------------------------------------------------------------------------------- Income (Loss) before equity in operations of forest products group 57,975 (2,554) 41,293 Equity in operations of forest products group (51,852) (8,718) 5,700 - ------------------------------------------------------------------------------- Income (Loss) before net cumulative effect of accounting changes 6,123 (11,272) 46,993 Net cumulative effect of accounting changes - (33,437) - - ------------------------------------------------------------------------------- NET INCOME (LOSS) $ 6,123 $ (44,709) $ 46,993 - ------------------------------------------------------------------------------- Average number of common shares outstanding 84,459 78,534 77,299 Per share of common stock Before net cumulative effect of accounting changes $ .07 $ (.14) $ .61 Net cumulative effect of accounting changes - (.43) - Net income (loss) .07 (.57) .61 Dividends .56 .56 .56 - ------------------------------------------------------------------------------- See notes to consolidated financial statements. F-8 CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------- December 31 1993 1992 - ------------------------------------------------------------------------------- ASSETS Dollars in thousands - ------------------------------------------------------------------------------- CURRENT ASSETS Cash and short-term investments (at cost which approximates market: 1993, $27,744,000; 1992, $91,685,000) $ 42,058 $ 118,503 Accounts receivable (net of allowances: 1993, $43,507,000; 1992, $33,300,000) 264,218 192,233 Inventories 47,271 51,551 Deferred subscription costs 32,597 32,830 Other current assets 107,009 37,661 - ------------------------------------------------------------------------------- Total current assets 493,153 432,778 - ------------------------------------------------------------------------------- INVESTMENT IN FOREST PRODUCTS GROUP 76,020 139,392 - ------------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT (at cost) Land 65,839 61,961 Buildings, building equipment and improvements 650,186 597,597 Equipment 874,479 751,186 Construction and equipment installations in progress 93,007 47,842 - ------------------------------------------------------------------------------- Total 1,683,511 1,458,586 Less accumulated depreciation 571,487 555,831 - ------------------------------------------------------------------------------- Total property, plant and equipment - net 1,112,024 902,755 - ------------------------------------------------------------------------------- INTANGIBLE ASSETS ACQUIRED Costs in excess of net assets acquired 1,383,582 554,014 Other intangible assets acquired 227,377 63,200 - ------------------------------------------------------------------------------- Total 1,610,959 617,214 Less accumulated amortization 190,006 160,991 - ------------------------------------------------------------------------------- Total intangible assets acquired - net 1,420,953 456,223 - ------------------------------------------------------------------------------- MISCELLANEOUS ASSETS 113,054 63,826 - ------------------------------------------------------------------------------- Total $3,215,204 $1,994,974 - ------------------------------------------------------------------------------- See notes to consolidated financial statements. F-9 - ------------------------------------------------------------------------------- December 31 1993 1992 - ------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Dollars in thousands - ------------------------------------------------------------------------------- CURRENT LIABILITIES Accounts payable $ 115,402 $ 139,115 Notes payable 62,340 - Payrolls 71,256 47,820 Accrued expenses 171,515 90,063 Unexpired subscriptions 130,627 119,508 Short-term debt 2,590 2,643 - ------------------------------------------------------------------------------- Total current liabilities 553,730 399,149 - ------------------------------------------------------------------------------- OTHER LIABILITIES Long-term debt 413,581 158,131 Capital lease obligations 46,482 48,780 Deferred income taxes 196,875 187,701 Other 403,869 199,799 - ------------------------------------------------------------------------------- Total other liabilities 1,060,807 594,411 - ------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY 5 1/2% Cumulative prior preference stock of $100 par value - authorized 110,000 shares; outstanding: 1993 and 1992, 17,837 shares 1,784 1,784 Serial preferred stock of $1 par value - authorized 200,000 shares - none issued - - Common stock of $.10 par value Class A - authorized 200,000,000 shares; issued: 1993, 107,678,024 shares; 1992, 88,047,623 shares (including treasury shares: 1993, 1,251,573; 1992, 8,773,419) 10,768 8,805 Class B, convertible - authorized 600,000 shares; issued: 1993, 571,624 shares; 1992, 571,804 (including treasury shares: 1993 and 1992, 139,943) 57 57 Additional capital 599,758 164,928 Earnings reinvested in the business 1,022,958 1,065,347 Common stock held in treasury, at cost (34,658) (239,507) - ------------------------------------------------------------------------------- Total stockholders' equity 1,600,667 1,001,414 - ------------------------------------------------------------------------------- Total $3,215,204 $1,994,974 - ------------------------------------------------------------------------------- See notes to consolidated financial statements. F-10
CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - -------------------------------------------------------------------------------------------------------------------- CASH PROVIDED (USED): OPERATING ACTIVITIES Income (loss) before net cumulative effect of accounting changes $ 6,123 $ (11,272) $ 46,993 Adjustments to reconcile income (loss) before net cumulative effect of accounting changes to net cash provided by operating activities Depreciation 89,274 69,880 72,441 Amortization 39,558 38,052 44,399 Equity in operations of forest products group - net 52,311 943 (6,406) Cash distributions and dividends from forest products group - 6,775 775 Loss on closing and disposition of Gwinnett Daily News - 53,768 - Deferred income taxes (37,901) (18,216) 8,729 (Increase) Decrease in receivables - net (21,636) 430 (2,375) Decrease (Increase) in inventories 10,799 (10,707) 5,471 Decrease (Increase) in deferred subscription costs and other current assets 4,749 1,078 (13,963) (Decrease) Increase in accounts payable (41,429) 15,216 9,120 Increase (Decrease) in payrolls and accrued expenses 46,758 (12,474) 9,377 Increase in unexpired subscriptions 11,196 4,342 6,666 Other - net 15,491 290 4,944 - -------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 175,293 138,105 186,171 - -------------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Businesses acquired, net of cash acquired (134,384) (23,091) - Proceeds on sale of residual assets of Gwinnett Daily News - 68,000 - Additions to property, plant and equipment (75,738) (47,068) (39,708) Purchases of marketable securities (65,077) - - Proceeds from sales of marketable securities 65,077 - - Decrease in investment in forest products group - - 46,234 Loans to former affiliate (15,000) - (5,000) Other investing proceeds 944 4,985 1,495 Other investing payments (1,986) (8,629) (16,354) - -------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (226,164) (5,803) (13,333) - -------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Short-term borrowing - net 62,340 - (11,971) Long-term obligations and notes payable Increase 200,000 - 76,963 Reduction (5,510) (63,847) (167,477) Capital shares Issuance 19,894 19,785 15,121 Repurchase (255,222) - (9) Dividends paid to stockholders (47,076) (54,935) (32,580) - -------------------------------------------------------------------------------------------------------------------- Net cash used in financing activities (25,574) (98,997) (119,953) - -------------------------------------------------------------------------------------------------------------------- Net (decrease) increase in Cash and short-term investments (76,445) 33,305 52,885 Cash and short-term investments at the beginning of the year 118,503 85,198 32,313 - -------------------------------------------------------------------------------------------------------------------- Cash and short-term investments at the end of the year $ 42,058 $ 118,503 $ 85,198 - -------------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements and supplemental disclosures to consolidated statements of cash flows.
F-11 SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS - ------------------------------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - ------------------------------------------------------------------------------- NONCASH INVESTING AND FINANCING TRANSACTIONS Capital lease assets and obligations incurred $ 338 $ 668 $ 311 ========== ========== ========== Businesses acquired Fair value of assets acquired $1,237,029 $ 34,462 Liabilities assumed (209,000) (11,371) Liabilities incurred, net of payments (18,744) - Common stock issued (874,901) - --------- ---------- Net cash paid $ 134,384 $ 23,091 ========= ========== Valuation reserve (investment in forest products group) $ (26,927) ========== CASH FLOW INFORMATION Cash payments during the year for Interest (net of amount capitalized) $ 26,861 $ 28,486 $ 31,367 ========= ======== ========= Income taxes $ 55,327 $ 36,776 $ 25,620 ========= ======== ========= - ------------------------------------------------------------------------------- F-12
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------------ Dollars in thousands except per share data Capital Stock Common 5 1/2% Class A Class B Earnings Stock Preference Common Common Reinvested Held in Additional in the Treasury Capital Business at cost - ------------------------------------------------------------------------------------------------------------------------ BALANCE, JANUARY 1, 1991 $1,798 $ 8,755 $58 $178,826 $1,157,045 $(288,899) - ------------------------------------------------------------------------------------------------------------------------ Net income 46,993 - ------------------------------------------------------------------------------------------------------------------------ Dividends, preference - $5.50 per share (98) Dividends, common - $.56 per share (43,306) - ------------------------------------------------------------------------------------------------------------------------ Issuance of shares: Retirement units, etc. - 26,544 Class A shares from treasury 348 370 Employee stock purchase plan - 1,041,858 Class A shares 1 (2,062) 16,978 Stock options - 95,125 Class A shares 13 963 (891) Stock conversions - 8,572 shares 1 (1) - ------------------------------------------------------------------------------------------------------------------------ Purchase of company stock - 143 preference shares (14) 5 - ------------------------------------------------------------------------------------------------------------------------ Foreign currency translation (1,657) - ------------------------------------------------------------------------------------------------------------------------ BALANCE, DECEMBER 31, 1991 1,784 8,770 57 178,080 1,158,977 (272,442) - ------------------------------------------------------------------------------------------------------------------------ Net loss (44,709) - ------------------------------------------------------------------------------------------------------------------------ Dividends, preference - $5.50 per share (98) Dividends, common - $.56 per share (43,987) - ------------------------------------------------------------------------------------------------------------------------ Issuance of shares: Retirement units, etc. - 19,576 Class A shares from treasury (491) 524 Employee stock purchase plan - 1,069,743 Class A shares 1 (16,432) 34,311 Stock options - 252,435 Class A shares 34 3,771 (1,900) Stock conversions - 600 shares - - - ------------------------------------------------------------------------------------------------------------------------ Foreign currency translation (4,836) - ------------------------------------------------------------------------------------------------------------------------ BALANCE, DECEMBER 31, 1992 1,784 8,805 57 164,928 1,065,347 (239,507) - ------------------------------------------------------------------------------------------------------------------------ Net income 6,123 - ------------------------------------------------------------------------------------------------------------------------ Dividends, preference - $5.50 per share (98) Dividends, common - $.56 per share (47,003) - ------------------------------------------------------------------------------------------------------------------------ Issuance of shares: The Globe acquisition - 36,397,313 Class A shares 1,940 432,624 440,337 Retirement units, etc. 10,877 Class A shares from treasury 123 339 Employee stock purchase plan - 819,166 Class A shares (2,612) 20,329 Stock options - 185,611 Class A shares 23 4,695 (934) Stock conversions - 180 shares - - - ------------------------------------------------------------------------------------------------------------------------ Purchase of company stock - 10,260,900 Class A shares (255,222) - ------------------------------------------------------------------------------------------------------------------------ Foreign currency translation (1,411) - ------------------------------------------------------------------------------------------------------------------------ BALANCE, DECEMBER 31, 1993 $1,784 $10,768 $57 $599,758 $1,022,958 $ (34,658) - ------------------------------------------------------------------------------------------------------------------------ See notes to consolidated financial statements.
F-13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. The consolidated financial statements include the accounts of The New York Times Company and all subsidiaries (the "Company") after elimination of intercompany items. Inventories. Inventories are stated at the lower of cost or current market value. Inventory cost generally is based on the last-in, first-out ("LIFO") method for newsprint and magazine paper and the first-in, first-out ("FIFO") method for other inventories. Investments. Investments in which the Company has at least a 20 percent but not more than 50 percent interest are accounted for under the equity method. Property, Plant and Equipment. Property, plant and equipment is stated at cost, and depreciation is computed by the straight-line method over estimated service lives. The Company capitalizes interest costs as part of the cost of constructing major facilities and equipment. Intangible Assets Acquired. Costs in excess of net assets acquired consist of excess costs of businesses acquired over values assigned to their net tangible assets and other intangible assets. The excess costs which arose from acquisitions after October 31, 1970 are being amortized by the straight-line method principally over 40 years. The remaining portion of such excess, which arose from acquisitions before November 1, 1970 (approximately $13,000,000), is not being amortized since in the opinion of management there has been no diminution in value. Other intangible assets acquired consist principally of advertiser and subscriber relationships which are being amortized over the remaining lives, ranging from 5 to 40 years. Subscription Revenues and Costs. Proceeds from subscriptions and related costs, principally agency commissions, are deferred at the time of sale and are included in the Consolidated Statements of Operations on a pro rata basis over the terms of the subscriptions. Foreign Currency Translation. The assets and liabilities of foreign companies are translated at the year-end exchange rates. Results of operations are translated at the average rates of exchange in effect during the year. The resultant translation adjustment is included as a component of stockholders' equity. Earnings Per Share. Earnings per share is computed after preference dividends and is based on the weighted average number of shares of Class A and Class B Common Stock outstanding during each year. The effect of shares issuable under the Company's Incentive Plans (see Note 12), including stock options, is not material and therefore excluded from the computation. Cash and Short-Term Investments. For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company has overdraft positions at certain banks caused by outstanding checks. These overdrafts have been reclassified to accounts payable. - ------------------------------------------------------------------------------- 2. ACQUISITIONS/DIVESTITURES On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June 11, 1993, as amended as of August 12, 1993 (the "Merger Agreement"), a wholly-owned subsidiary of the Company was merged with Affiliated Publications, Inc., the parent company of The Boston Globe ("The Globe"), which became a wholly-owned subsidiary of the Company. The transaction was accounted for as a purchase and, accordingly, the results of The Globe's operations have been included in the Company's consolidated financial statements beginning October 1, 1993, the date the transaction closed. The acquisition had a net cost of approximately $1,028,000,000. Under the Merger Agreement the Company exchanged cash of approximately $160,000,000 for 15 percent of The Globe's common stock with the remainder of the consideration paid by the exchange of approximately 36,400,000 shares of the Company's Class A Common Stock valued at $24.03 per share. The purchase resulted in increases in costs in excess of net assets acquired of approximately $830,000,000 (which will be amortized by the straight-line method over 40 years); other intangible assets acquired of $161,000,000 (which consist principally of advertiser and subscriber relationships which are being amortized by the straight-line method over an average period of 33 years); and property, plant and equipment of $246,000,000. Net liabilities assumed as a result of the transaction totaled approximately $209,000,000. The following pro forma supplemental financial information is presented as if the enterprises had combined at the beginning of the respective periods. It is not necessarily indicative of the combined results that would have occurred had the merger taken place as of the beginning of the periods provided, nor necessarily indicative of results that may be achieved in the future: (Dollars in thousands Year Ended December 31, except per share data) 1993 1992 - ---------------------------------------------------------------------------- Revenues $ 2,335,985 $2,187,490 Income (loss) before net cumulative effect of accounting changes 1,380 (14,237) Net income (loss) 1,380 (61,783) Income (loss) per share before net cumulative effect of accounting changes .01 (.13) Net income (loss) per share .01 (.54) F-14 Pro forma depreciation and amortization expense for the year ended December 31, 1993 and 1992 was approximately $166,816,000 and $158,363,000 respectively. On December 31, 1993 the Company sold two weekly newspapers and recognized a pre-tax gain of $2,600,000, or $.02 per share, on the transaction. In January 1994, a definitive agreement was announced regarding the sale of BPI Communications, L.P. ("BPI"), a partnership in which the Company acquired a one-third interest through its October 1993 merger with The Globe. The Company received approximately $53,000,000 when the transaction was completed in February 1994 with additional payments of approximately $2,000,000 expected later in the year. For financial reporting purposes, no gain or loss will be recognized on the transaction. The Company's investment in BPI of $55,000,000 has been included in other current assets on the accompanying Consolidated Balance Sheet at December 31, 1993. In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold the residual assets. The closing, related sale and its 1992 operations resulted in a pre-tax loss of approximately $53,768,000 ($37,113,000 after taxes or $.47 per share). The newspaper had not earned a profit since its acquisition in 1987, but its annual operating losses were not material. In June 1992 the Company acquired two wholesale newspaper distribution businesses that distribute The Times and other newspapers and periodicals in New York City and central and northern New Jersey. The acquisition was accounted for as a purchase; accordingly, the operating results have been included in the consolidated financial statements from the date of the acquisition. The cost of the acquisition was approximately $34,500,000, of which $23,091,000 was paid in cash with the remainder representing net liabilities assumed. The purchase resulted in an increase in intangible assets acquired of $34,462,000. In April 1991 the Company increased its interest in the International Herald Tribune S.A. to 50 percent. - ------------------------------------------------------------------------------- 3. CAPITAL INVESTMENT PROJECTS Depreciation of the building portion of the Company's Edison facility, amounting to approximately $14,000,000 per year, began in 1990 when the facility was substantially completed. Due to the resolution of various labor issues, commencement of production at the facility was delayed until late in 1992. Depreciation of the equipment began during the fourth quarter and was phased in as each element was placed in service with full operation of the facility beginning in the first quarter of 1993. Depreciation of the building and equipment totaled $33,000,000 in 1993 and will increase to $35,000,000 in 1994 when the facility is operational for a full year. In February 1993 the Company announced that The Times closed its printing plant in Carlstadt, New Jersey, and transferred production and distribution to the new Edison facility. The carrying value of the facility (approximately $24,000,000) has been included in miscellaneous assets at December 31, 1993 pending the Company's determination of the future of the facility. The closing of the plant and decision related to its future is not expected to result in a writedown. In December 1993 the Company and the City of New York executed a lease agreement and related agreements, under which the Company will lease 31 acres of City-owned land in Queens, New York, on which The Times plans to build a state- of-the-art printing and distribution facility. Such agreement will not commence until certain provisions relating to site preparation have been met and, accordingly, the transaction has not yet been recorded on the Company's financial statements. The Company estimates that the cost of the new facility will be approximately $280,000,000 with construction to begin in the summer of 1994 and completion expected in 1997. The new facility will replace presses and distribution facilities now located at The Times's facility in Manhattan. The lease will continue for 25 years after the start of construction with an option ultimately to purchase the property. Under the terms of the agreement, The Times would receive various tax and energy cost reductions. Construction of the facility is subject to approval of the Company's Board of Directors. - ------------------------------------------------------------------------------- 4. VOLUNTARY STAFF REDUCTIONS AND PRODUCTION UNION NEGOTIATIONS The Company announced two fourth quarter 1993 pre-tax charges totaling $35,400,000 or $.23 per share for severance and related costs resulting from anticipated white-collar staff reductions (approximately $30,000,000) and voluntary early retirements from the composing room (approximately $5,400,000) at The Times. In 1993 the Company completed the negotiations of long-term labor agreements with all of its production unions, which extend to the year 2000. These agreements include wages, payments to the unions' benefit and pension funds, job security and financial incentives. The agreements extend to all of The Times's production and distribution facilities and to any new facilities which the Company might utilize (see Note 3). In connection with these agreements, the Company recorded two pre-tax charges, $28,000,000, or $.20 per share, in 1992 and $30,000,000, or $.22 per share, in 1989) for voluntary production union staff reductions at The Times related to the opening of Edison (see Note 3), the further automation of newspaper production in the composing room and the announced closing of Carlstadt. In 1991 the Company recorded a $20,000,000 before-tax charge ($.15 per share) for severance and related costs resulting from a voluntary termination benefits program for approximately 160 employees at The Times, most of whom were members of The Newspaper Guild of New York. At December 31, 1993 and 1992, approximately $40,000,000 and $29,000,000, respectively, are included in accrued expenses in the accompanying Consolidated Balance Sheets, which represents the unpaid balance of the pre-tax charges. F-15 - ------------------------------------------------------------------------------- 5. INVESTMENT IN FOREST PRODUCTS GROUP The Company has equity interests in two Canadian newsprint companies and a paper manufacturing company operating as a partnership. The equity interests in the newsprint companies are: Donohue Malbaie Inc. - 49 percent; and Gaspesia Pulp and Paper Company Ltd. - 49 percent. In 1993 the Company recorded an after-tax noncash charge of $47.0 million ($.56 per share) against equity in operations to write down the Company's investment in the Forest Products Group to reflect current operating conditions and economic factors in the industry. In December 1991 the Company and Kimberly-Clark Corporation announced the completion of the divestiture of their jointly-owned affiliate, Spruce Falls Power and Paper Company, Limited ("Spruce Falls"). Spruce Falls is a producer of newsprint in which the Company held a 49.5 percent equity interest. In connection with the divestiture, the Company committed to lend up to $26,500,000 (C$30,000,000) to the new owners of the mill. Such loans will take place over a five-year period ending December 1996. At December 31, 1993 and 1992 the Company had loaned Spruce Falls approximately $20,515,000 and $5,515,000, respectively, under the loan commitment. Interest on the outstanding balance is payable quarterly at annual rates ranging from 4 to 10 percent. Commencing in December 1997, the borrowings outstanding at the end of the commitment (December 1996) are payable annually over a 5 year period in 20 percent increments. The Company and Myllykoski Oy, a Finnish paper manufacturing company, are partners through subsidiary companies in Madison Paper Industries ("Madison"). Loans and contributions to Madison by an 80 percent-owned subsidiary of the Company totaled $1,279,000, $1,337,000 and $1,806,000, respectively, in 1993, 1992 and 1991. The partners' interests in the net assets of Madison at any time will depend on their capital accounts, as defined, at such time. Through the 80 percent-owned subsidiary, the Company's share of Madison's profits and losses is 40 percent. At December 31, 1993, the Company recorded a distribution receivable from Donohue Malbaie Inc. of $8,224,000. Such amount is included in other current assets in the Company's consolidated balance sheet at such date. No other distributions were received from the Canadian newsprint companies in 1993, 1992 or 1991. The Company's share of undistributed earnings of these companies aggregated approximately $3,975,000 and $24,551,000 at December 31, 1993 and 1992, respectively. Loans and contributions to the Canadian newsprint companies by the Company totaled $171,000 in 1991. No loans and contributions were made in 1993 or 1992. - ------------------------------------------------------------------------------- Condensed Combined Balance Sheets of Forest Products Group Dollars in thousands - ------------------------------------------------------------------------------- December 31 1993 1992 - ------------------------------------------------------------------------------- Current assets $ 87,984 $ 76,317 Less current liabilities 75,073 65,026 - ------------------------------------------------------------------------------- Working capital 12,911 11,291 Fixed assets, net, etc. 345,413 372,554 Long-term debt (71,528) (77,025) Deferred income taxes, etc. (102,752) (86,755) - ------------------------------------------------------------------------------- Net assets $184,044 $220,065 - ------------------------------------------------------------------------------- At December 31, 1993 long-term debt of the Forest Products Group (exclusive of $10,275,000 due within one year) matures as follows: 1995, $10,335,000; 1996, $46,085,000; and 1997, $15,108,000. The maturities of a substantial portion of the debt may be accelerated if cash flow, as defined, exceed certain levels. None of the Forest Products Group's debt is guaranteed by the Company. - ------------------------------------------------------------------------------- Condensed Combined Statements of Operations of Forest Products Group Dollars in thousands - ------------------------------------------------------------------------------- Year Ended December 31 1993 1992 1991 - ------------------------------------------------------------------------------- Net sales and other income $254,324 $266,451 $287,924 Costs and expenses 269,845 297,117 276,062 - ------------------------------------------------------------------------------- Income (Loss) before taxes (15,521) (30,666) 11,862 Income tax benefit (2,700) (11,680) (544) - ------------------------------------------------------------------------------- Net income (loss) $(12,821) $(18,986) $ 12,406 - ------------------------------------------------------------------------------- The condensed combined financial information of the Forest Products Group excludes the income tax effects related to Madison. Such tax effects (see Note 7) have been included in the Company's consolidated financial statements. The accumulated translation adjustment (included in earnings reinvested in the business) decreased stockholders' equity by $2,628,000 and $1,217,000 at December 31, 1993 and 1992 respectively. Upon the disposition of Spruce Falls in 1991, stockholders' equity was reduced by $3,506,000 to reflect the accumulated translation adjustment for such company. Adjustments from translating certain balance sheet accounts, principally of the Canadian newsprint companies, for each of the three years in the period ended December 31, 1993, are set forth in the Consolidated Statements of Stockholders' Equity. During 1993, 1992 and 1991, the Company's Newspaper Group purchased newsprint and supercalendered paper from the Forest Products Group at competitive prices. Such purchases aggregated approximately $102,000,000, $112,000,000, and $127,000,000 respectively. F-16 - -------------------------------------------------------------------------------- 6. INVENTORIES Inventories as shown in the accompanying Consolidated Balance Sheets are composed of the following: - --------------------------------------- Dollars in thousands - --------------------------------------- December 31 1993 1992 - --------------------------------------- Newsprint and magazine paper $38,691 $44,570 Work-in-process, etc. 8,580 6,981 - --------------------------------------- Total $47,271 $51,551 - --------------------------------------- Utilization of the LIFO method reduced inventories as calculated on the FIFO method by approximately $2,263,000 and $1,765,000 at December 31, 1993 and 1992 respectively. - -------------------------------------------------------------------------------- 7. INCOME TAXES The Company adopted Statement of Financial Accounting Standards No. 109 - Accounting for Income Taxes ("SFAS 109") as of January 1, 1992 which changed its method of accounting for income taxes from the deferred method (Accounting Principles Board Opinion No. 11 - "APB 11") to an asset and liability approach. The cumulative effect of this change in accounting method on net income was a credit of $13,414,000 ($.17 per share) and was reflected as of January 1, 1992. Income taxes for 1991 are measured under APB 11. SFAS 109 requires recognition of deferred tax liabilities and assets for the estimated future tax consequences attributable to temporary differences. Such temporary differences exist when the tax basis differs from the financial reporting amount of assets or liabilities. All tax liabilities and tax assets are measured using current tax law and applicable rates. A valuation allowance is recorded to reduce deferred tax assets to amounts which, in management's judgment, are most likely to be realized. SFAS 109 further requires adjustment of tax balances to reflect enacted changes in tax law or rates in the period of enactment. Accordingly, 1993 results include increased tax expense resulting from the enactment of the Tax Act in August. The Tax Act increased the statutory corporate income tax rate one percent (to 35 percent) retroactive to January 1, 1993, and made other changes concerning the deductibility of certain costs in determining taxable income. Income tax expense as shown in the Consolidated Statements of Operations is composed of the following: - ----------------------------------------------------- Dollars in thousands 1993 1992 1991 - ----------------------------------------------------- Current tax expense Federal $60,178 $8,970 $21,666 State, local, foreign 17,612 1,413 695 - ----------------------------------------------------- 77,790 10,383 22,361 - ----------------------------------------------------- Deferred tax expense Federal (26,982) (1,157) (2,335) State, local, foreign (8,919) 1,302 4,941 - ----------------------------------------------------- (35,901) 145 2,606 - ----------------------------------------------------- Income tax expense including the tax effects of equity in operations 41,889 10,528 24,967 Less income tax (benefit) expense related to equity in operations (1,342) (551) 3,207 - ----------------------------------------------------- Income tax expense $43,231 $11,079 $21,760 - ----------------------------------------------------- Tax expense in 1993 was reduced by approximately $7,000,000 and $2,485,000, respectively, relating to a decrease in valuation allowance and recognition of federal tax benefits of capital loss carryforwards. Of the decrease in valuation allowance, $4,390,000 was associated with federal tax benefits of capital loss carryforwards; with the remainder attributable to state and local tax benefits of net operating loss carryforwards. Adjustment of the Company's deferred tax balances for the one percent rate increase provided in the Tax Act added $4,359,000 to deferred tax expense, inclusive of $600,000 of expense reported in equity in operations of the forest products group. In accordance with the provisions of SFAS 109, approximately $1,600,000 of additional reduction in valuation allowance, which was established against acquired deferred tax assets, was recorded as a reduction of goodwill. No such amounts affected 1992 tax expense. In connection with the Gwinnett transaction in 1992 (see Note 2), the Company had a net tax benefit of $16,655,000 on a pre-tax loss of $53,768,000. The difference of $1,626,000 between the tax benefit and such benefit calculated at the federal statutory rate is mainly attributable to an unrecognized capital loss (which increased tax expense by $3,405,000), net of the impact of previously amortized intangibles (which decreased tax expense by $1,779,000). In 1991 the Company reversed a provision for income tax contingencies of $10,000,000 related to a settlement with the Internal Revenue Service for tax years 1980 through 1984. The components of deferred income tax expense for 1991, which totaled $2,606,000, are as follows: depreciation $13,288,000; tax certificate $(10,409,000); tax settlement $(10,000,000); subscription expenses $7,969,000; and other net deferred tax expense of $1,758,000. Income tax benefits credited directly to stockholders' equity totaled $3,595,000, $3,735,000 and $707,000 during 1993, 1992 and 1991 respectively. Foreign taxes included in income tax expense in each of the years presented were not significant. F - 17 The reasons for the variance between the effective tax rate on income before income taxes and equity in operations of the Forest Products Group and the federal statutory rate (exclusive in 1992 of the loss on the disposition of Gwinnett) are as follows: Year Ended December 31 1993 1992 1991 - ------------------------------------------------------------------------------ % of % of % of Dollars in thousands Amount Pretax Amount Pretax Amount Pretax - ------------------------------------------------------------------------------ Tax at federal statutory rate $35,422 35.0% $21,180 34.0% $21,438 34.0% Increase (decrease) resulting from State and local taxes - - net 6,883 6.8 2,294 3.7 3,507 5.6 Capital loss carryforwards (6,875) (6.8) - - - - Amortization of intangible assets acquired 5,602 5.5 4,033 6.5 6,970 11.1 Change in enacted tax rate 3,759 3.7 - - - - Tax settlement - - - - (10,000) (15.9) Other - net (1,560) (1.5) 227 0.3 (155) (0.3) - ------------------------------------------------------------------------------ Subtotal 43,231 42.7% 27,734 44.5% 21,760 34.5% - ------------------------------------------------------------------------------ Gwinnett disposition - (16,655) - - ------------------------------------------------------------------------------ Income tax expense $43,231 $11,079 $21,760 - ------------------------------------------------------------------------------ Federal income taxes currently refundable totaled $2,992,000 and $4,842,000 at December 31, 1993 and 1992, respectively, and are included in other current assets on the Consolidated Balance Sheets. The components of the net deferred tax liabilities recognized on the respective Consolidated Balance Sheets, are as follows: - ----------------------------------------- Dollars in thousands December 31 1993 1992 - ----------------------------------------- Deferred Tax Assets Intangible assets acquired $23,568 $ 23,504 Accrued state and local taxes 19,890 18,522 Postretirement and postemployment 78,655 40,177 benefits Other accrued employee benefits 110,218 25,370 and compensation Allowance for doubtful 23,557 24,077 accounts AMT credit - 4,033 carryforward Tax loss 23,595 26,741 carryforwards Other 20,151 6,521 - ----------------------------------------- Total deferred tax 299,634 168,945 assets Valuation allowance (25,064) (19,851) - ----------------------------------------- Net deferred tax $274,570 $149,094 assets - ----------------------------------------- - ----------------------------------------- Dollars in thousands December 31 1993 1992 - ----------------------------------------- Deferred Tax Liabilities Property, plant and equipment $131,189 $ 127,691 Tax certificate 137,343 145,631 Nontaxable 145,298 - acquisition Deferred subscription 21,743 21,361 expenses Safe harbor tax 20,376 24,433 lease Other 18,446 20,703 - ----------------------------------------- Total deferred tax 474,395 339,819 liabilities - ----------------------------------------- Net deferred tax (274,570) (149,094) assets - ----------------------------------------- Net deferred tax 199,825 190,725 liability - ----------------------------------------- Less amounts included in: Other current (4,812) - assets Accrued expenses 7,762 3,024 - ----------------------------------------- Deferred income $196,875 $187,701 taxes - ----------------------------------------- At December 31, 1993, there were no federal net operating loss carryforwards. Benefits from state and local loss carryforwards are attributable mainly to tax operating losses. Such loss carryforwards expire in accordance with provisions of applicable tax law and have remaining lives ranging from 1 to 15 years. At December 31, 1993 the tax benefits relating to these carryforwards expire as follows: 1996, $4,829,000; 1997, $7,984,000; 1998, $3,017,000; 1999 through 2003, $6,540,000 and 2004 through 2008, $1,225,000. In connection with the sale in 1989 of its cable television system, the Federal Communications Commission granted the Company a tax certificate. This certificate enabled the Company to defer income taxes on the gain on the transaction and pay such taxes over a number of years. Under the provisions of the Internal Revenue Code, this is accomplished through a reduction in the tax bases of various assets. As a result, $10,820,000, $10,388,000 and $10,409,000 of income taxes that were so deferred became currently payable in 1993, 1992 and 1991 respectively. Additional income taxes that were deferred will become currently payable over the remaining lives of those assets with reduced tax bases. Federal income tax returns for all years through 1989 have been examined by the Internal Revenue Service. Tentative agreements have been reached for all years through 1989. F - 18 Examinations of the tax returns for the years 1990 through 1992 have not commenced. Management is of the opinion that any assessments resulting from these examinations will not have a material effect on the consolidated financial statements. Equity in operations of the Forest Products Group (see Note 5) includes the income tax effects of the Company's interest in Madison and its equity in the operations of the Canadian newsprint companies. Of such amounts, tax benefits of $585,000 in 1993, $1,219,000 in 1992 and $120,000 in 1991 are applicable to the Canadian newsprint companies. Deferred taxes attributable to the Company's interest in Madison were $1,562,000, $265,000, and $(561,000), respectively, for 1993, 1992 and 1991. These deferred taxes relate principally to differences between financial reporting and tax depreciation. The Company's consolidated federal income tax returns include the income tax effects of its interest in Madison. - -------------------------------------------------------------------------------- 8. DEBT Long-term debt consisted of the following: - ----------------------------------------- Dollars in thousands December 31 1993 1992 - ----------------------------------------- Notes due 1998-2000 (a) $200,000 $ - Notes due 1995 net of unamortized discount: 1993, $2,444; 1992, $4,169 (b) 159,856 158,131 Notes due 1995 net of unamortized premium of $3,725 in 1993(c) 53,725 - Other notes, due in 1993 at a weighted average interest rate of 7.80% in 1992 - 22 - ----------------------------------------- Total 413,581 158,153 Less current portion - 22 - ----------------------------------------- Total long-term portion $413,581 $158,131 - ----------------------------------------- (a) In October 1993 the Company issued senior notes totaling $200,000,000 to an insurance company with interest payable semi-annually. Five-year notes totaling $100,000,000 were issued at a rate of 5.50 percent, and the remaining $100,000,000 were issued as six and one-half year notes at a rate of 5.77 percent. (b) In connection with the 1985 acquisition of certain newspapers, the Company issued 10-year notes with an aggregate stated value of $162,300,000 which have been discounted at an interest rate of 11.85 percent for financial reporting purposes. Interest on certain of the notes is payable semi-annually. The original difference of $12,600,000 between the stated value of the notes and the amount that results from discounting the notes at 11.85 percent is being amortized as interest expense over the term of the notes. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of these notes is $179,000,000. (c) In connection with the 1993 acquisition of The Globe (see Note 2), the Company assumed $50,000,000 of 9.34 percent fixed-rate notes maturing July 1995 which have been valued for financial reporting purposes using a discount rate of 4.25 percent. Interest on the notes is payable semi-annually. The excess of the fair value of the notes at the acquisition date over the stated value of such notes was $4,303,000, which is being amortized as a reduction of interest expense over the remaining term of the notes. The Company has an interest rate swap agreement (the "Agreement") with a major financial institution to manage interest costs. The Agreement matures in 1995 and effectively converts the 9.34 percent interest rate to a variable rate which is semi-annually indexed to the six-month LIBOR rate. Based on quoted market prices, the Agreement was valued at $1,800,000 at the acquisition date and is being amortized as interest expense over its term. Such amount has been included in miscellaneous assets in the accompanying balance sheet at December 31, 1993. During the 1993 fourth quarter and on December 31, 1993, the Company's effective interest rate on these unsecured notes was 6.42 percent. As of December 31, 1993, the recorded amounts for these unsecured notes and the Agreement approximate fair value. - ------------------------------------------------------------------------------ In May 1992 the Company entered into an $80,000,000 revolving credit and term loan agreement with a group of banks, which replaced the previous $100,000,000 revolving credit and term loan agreement which would have terminated in July 1992. The new agreement, as amended, terminates in May 1995. At such time, then outstanding borrowings would be payable semi-annually aggregating 5 percent, 20 percent, 45 percent and 30 percent annually from 1995 to 1998. At the Company's discretion, this facility may be converted into term loans at any time. The Company also has a $40,000,000 revolving credit agreement with the same group of banks that expires May 1994, at which time, any outstanding borrowings would be payable. The agreements permit borrowings which bear interest, at the Company's option, (i) for domestic borrowings: based on the certificates of deposit rate, the Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar borrowings: based on the London interbank rate. Borrowings under these agreements may be prepaid without penalty. In October 1992 the Company entered into a new $20,000,000 revolving credit and term loan agreement with a bank and its affiliate, which replaced a previous $30,000,000 revolving credit agreement with the same bank. The new agreement, as amended, terminates in May 1995. At such time, then outstanding borrowings would be payable semi-annually aggregating 5 percent, 20 percent, 45 percent and 30 percent annually from 1995 to 1998. At the Company's discretion, this facility may be converted into term loans at any time. The Company also has entered into a $10,000,000 revolving credit agreement with the same bank and its affiliate that expires May 1994, at which time, any outstanding borrowings would be payable. The agreements permit borrowings which bear interest, at the Company's option, (i) for domestic borrowings: based on the certificates of deposit rate, a prime rate or a quoted rate; or (ii) for F - 19 Eurodollar borrowings based on the London interbank rate. Borrowings under these agreements may be prepaid without penalty. No borrowings under any of the above agreements were outstanding during 1993. Both agreements provide for an annual commitment fee of 1/8th of 1 percent on the unused commitment. Certain of the agreements also include provisions which require, among other matters, specified levels of stockholders' equity. At December 31, 1993 approximately $1,148,000,000 of stockholders' equity was unrestricted. Short-term debt is comprised of current maturities of long-term debt and capital lease obligations. Outstanding notes payable at December 31, 1993 consists of $62,340,000 of short-term bank borrowings at an average interest rate of 3.71 percent. There were no outstanding notes payable at December 31, 1992. Interest expense, net of interest income, as shown in the accompanying Consolidated Statements of Operations consisted of the following: - ------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - ------------------------------------------------------- Interest expense $29,549 $30,075 $32,401 Interest income (4,174) (3,960) (1,815) - ------------------------------------------------------- Net $25,375 $26,115 $30,586 - ------------------------------------------------------- In connection with various construction projects, interest of approximately $1,351,000 and $705,000 was capitalized as property, plant and equipment for 1993 and 1992 respectively. There was no interest capitalized in 1991. - -------------------------------------------------------------------------------- 9. LEASE COMMITMENTS In December 1993, the Company and The City of New York executed a long-term lease agreement and related agreements, under which the Company will lease land to build a state-of-the-art printing and distribution facility for The Times (see Note 3). Operating Leases: Such lease commitments are primarily for office space and equipment. Certain office space leases provide for adjustments relating to changes in real estate taxes and other operating expenses. Rental expense amounted to $24,744,000 in 1993, $23,689,000 in 1992 and $24,159,000 in 1991. The approximate minimum rental commitments under noncancelable leases (exclusive of minimum sublease rentals of $301,000) at December 31, 1993 were as follows: 1994, $16,917,000; 1995, $11,977,000; 1996, $9,647,000; 1997, $8,566,000; 1998, $7,416,000 and $36,427,000 thereafter. Capital Leases: In connection with its Capital Investment Projects (see Note 3), the Company entered into a long-term lease for a building and site in Edison, New Jersey. The lease provides the Company with certain early cancellation rights, as well as renewal and purchase options. For financial reporting purposes, the lease has been classified as a capital lease; accordingly, an asset of approximately $57,000,000 (included in buildings, building equipment and improvements at December 31, 1993 and 1992) has been recorded. The following is a schedule of future minimum lease payments under all capitalized leases together with the present value of the net minimum lease payments as of December 31, 1993: Dollars in thousands - -------------------------------------- Year Ended December 31 Amount - -------------------------------------- 1994 $ 7,221 1995 6,871 1996 6,623 1997 6,411 1998 6,400 Later years 52,800 - -------------------------------------- Total minimum lease payments 86,326 Less: amount representing interest 37,254 - -------------------------------------- Present value of net minimum lease payments including current maturities of $2,590 $49,072 - -------------------------------------- F - 20 - -------------------------------------------------------------------------------- 10. PENSION PLANS The Company sponsors several pension plans and makes contributions to several others in connection with collective bargaining agreements, including a joint Company-union plan and a number of joint industry-union plans. These plans cover substantially all employees. The Company-sponsored pension plans provide participating employees with retirement benefits in accordance with benefit provision formulas which are based on years of service and final average or career pay, and where applicable, employee contributions. Funding is based on an evaluation and review of the assets, liabilities and requirements of each plan. Retirement benefits are also provided under supplemental unfunded pension plans. Amounts for 1993 have increased due to the October 1, 1993 acquisition of The Globe. Net periodic pension cost was $16,461,000 in 1993, $15,082,000 in 1992, and $14,467,000 in 1991. The components of net periodic pension cost are: - ---------------------------------------------------------------- Dollars in thousands Year Ended December 31 1993 1992 1991 - ---------------------------------------------------------------- Service cost $14,075 $11,879 $11,210 Interest cost 26,675 24,167 22,451 Actual return on plan assets (38,907) (25,365) (37,430) Curtailment gain - (885) - Net amortization and deferral 14,618 5,286 18,236 - ---------------------------------------------------------------- Net periodic pension cost $16,461 $15,082 $14,467 - ---------------------------------------------------------------- Assumptions used in the actuarial computations were: - ---------------------------------------------------------------- Year Ended December 31 1993 1992 1991 - ---------------------------------------------------------------- Discount rate 7.0% 8.0% 8.25% Rate of increase in compensation levels 5.5% 5.5% 5.5% Expected long-term rate of return on assets 8.75% 8.75% 8.75% - ---------------------------------------------------------------- In connection with collective bargaining agreements, the Company contributes to several other pension plans including a joint Company-union plan and a number of joint industry-union plans. Contributions are determined as a function of hours worked or period earnings. Pension cost for these plans was $17,970,000 in 1993, $15,700,000 in 1992, and $15,052,000 in 1991. The funded status of the Company's plans which were valued at September 30, 1993 and 1992 is as follows: Plans Plans Whose Whose Assets Accumulated Exceed Benefits December 31, 1993 Accumulated Exceed Dollars in thousands Benefits Assets - ---------------------------------------------------- Actuarial present value of benefit obligation: Vested benefit obligation $187,972 $219,554 - ---------------------------------------------------- Accumulated benefit obligation $193,951 $227,102 - ---------------------------------------------------- Projected benefit obligation $251,679 $282,179 Plan assets at fair value 234,366 142,015 - ---------------------------------------------------- Projected benefit obligation in excess of plan assets 17,313 140,164 Unrecognized net losses (24,972) (20,043) Unrecognized prior service cost 7,746 (9,633) Unrecognized transition obligation (2,690) (2,724) Fourth-quarter contribution, net (2,675) (3,220) Adjustment required to recognize additional minimum liability - 10,087 - ---------------------------------------------------- Recorded pension (asset) liability $ (5,278) $114,631 - ---------------------------------------------------- Plans Plans Whose Whose Assets Accumulated Exceed Benefits December 31, 1992 Accumulated Exceed Dollars in thousands Benefits Assets - ---------------------------------------------------- Actuarial present value of benefit obligation: Vested benefit obligation $230,705 $21,039 - ---------------------------------------------------- Accumulated benefit obligation $235,994 $21,153 - ---------------------------------------------------- Projected benefit obligation $296,312 $30,722 Plan assets at fair value 284,469 - - ---------------------------------------------------- Projected benefit obligation in excess of plan assets 11,843 30,722 Unrecognized net gains (losses) 6,181 (6,393) Unrecognized prior service cost (1,202) (1,005) Unrecognized net asset (transition obligation) 1,873 (6,339) Fourth-quarter contribution, net (3,172) (265) Adjustment required to recognize additional minimum liability - 4,167 - ---------------------------------------------------- Recorded pension liability $ 15,523 $20,887 - ---------------------------------------------------- Plan assets, which were valued as of September 30, 1993 and 1992, consist of money market investments, investments in marketable fixed income and equity securities, an investment in a diversified real estate equity fund and investments in group annuity insurance contracts. The additional liability relating to the unfunded status of these plans is included in other liabilities on the Consolidated Balance Sheets as of December 31, 1993 and 1992 and miscellaneous assets includes a related intangible asset of equal amount. F - 21 - -------------------------------------------------------------------------------- 11. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS AND POSTEMPLOYMENT BENEFITS The Company provides health and life insurance benefits to retired employees (and their eligible dependents) who are not covered by any collective bargaining agreements if the employee meets specified age and service requirements. The Company adopted the provisions of SFAS No. 106 - Employers' Accounting for Postretirement Benefits Other Than Pensions ("SFAS 106"), changing to the accrual method of accounting for these benefits effective January 1, 1992. Prior to 1992, postretirement benefit expenses were recognized on a pay-as-you- go basis and were not material. As permitted by SFAS 106, the Company elected to recognize in 1992 the accumulated postretirement benefit obligation related to prior service costs. The Company recorded this obligation of $64,856,000 ($37,411,000 after taxes or $.48 per share) as the cumulative effect of an accounting change at January 1, 1992. Net periodic postretirement cost was $10,809,000 and $7,776,000 in 1993 and 1992 respectively. The components of this cost are as follows: - -------------------------------------------- Dollars in thousands 1993 1992 - -------------------------------------------- Service cost for benefits earned during the period $3,955 $3,299 Interest cost on accumulated postretirement benefit obligation 6,854 5,239 Curtailment gain - (762) - -------------------------------------------- Net periodic postretirement benefit cost $10,809 $7,776 - ------------------------------------------- The Company's policy is to fund the above-mentioned payments as claims and premiums are paid. The following table sets forth the amounts included in "Accrued Expenses" and "Other Liabilities" in the Consolidated Balance Sheets at December 31, 1993 and 1992 based on valuation dates of September 30 in each year. The 1993 amounts have increased principally due to the October 1, 1993 acquisition of The Globe. - -------------------------------------------- Dollars in thousands - -------------------------------------------- December 31 1993 1992 - -------------------------------------------- Accumulated postretirement benefit obligation Retirees $53,677 $28,054 Fully eligible active 28,450 18,943 plan participants Other active plan participants 51,522 25,645 - -------------------------------------------- Total 133,649 72,642 Unrecognized net gains (losses) 3,093 (2,198) Fourth-quarter expense net of benefit payment 621 - - -------------------------------------------- Total accrued postretirement benefit liability 137,363 70,444 Current portion included in accrued expenses 4,040 2,591 - -------------------------------------------- Long-term accrued postretirement benefit liability $133,323 $67,853 - -------------------------------------------- For 1993 the accumulated postretirement benefit obligation was determined using a discount rate of 7.0 percent, an estimated increase in compensation levels of 5.5 percent and a health care cost trend rate of between 13 percent and 11 percent in the first year grading down to 5 percent in the year 2008. Increasing the assumed health care cost trend rates by one percentage point in each year and holding all other assumptions constant would increase the accumulated postretirement benefit obligation as of December 31, 1993 by $18,857,000 and increase the net periodic postretirement benefit cost for 1993 by $2,300,000. For 1992 the accumulated postretirement benefit obligation was determined using a discount rate of 8.0 percent, an estimated increase in compensation levels of 5.5 percent and a health care cost trend rate of approximately 15.0 percent for pre-age-65 benefits, decreasing to 6.25 percent in the year 2014 and thereafter and a rate of 14.75 percent for post-age-65 benefits decreasing to 6.0 percent in the year 2014 and thereafter. In connection with collective bargaining agreements, the Company contributes to several welfare plans including a joint Company-union plan and a number of joint industry-union plans. Contributions are determined as a function of hours worked or period earnings. Portions of these contributions, which cannot be disaggregated, related to postretirement benefits for plan participants. Total contributions to these welfare funds were approximately $18,000,000 and $16,800,000 in 1993 and 1992 respectively. The Company also adopted SFAS No. 112 - Employers' Accounting for Postemployment Benefits ("SFAS 112") as of the beginning of 1992. SFAS 112 requires that certain benefits provided to former or inactive employees, after employment but before retirement, such as workers' compensation, disability benefits and health care continuation coverage be accrued if attributable to employees' service already rendered. The cumulative effect on net income of this change in accounting method resulted in a one-time charge of $16,365,000 ($9,440,000 after taxes or $.12 per share) and has been reflected as of January 1, 1992. F - 22 - -------------------------------------------------------------------------------- 12. EXECUTIVE AND NON-EMPLOYEE DIRECTORS' INCENTIVE PLAN Under the Company's 1991 Executive Stock Incentive Plan and 1991 Executive Cash Bonus Plan (together the "1991 Executive Plans"), the Board of Directors may authorize incentive compensation awards and grant stock options to key employees of the Company. Awards may be granted in cash, restricted and unrestricted shares of the Company's Class A Common Stock, Retirement Units or such other forms as the Board of Directors deems appropriate. Under the 1991 Executive Plans, stock options of up to 10,000,000 shares of Class A Common Stock may be granted and stock awards of up to 1,000,000 shares of Class A Common Stock may be made. In adopting the 1991 Executive Plans, shares previously available for issuance of retirement units and stock options under prior plans are no longer available for future awards. Retirement Units are payable in Class A Common Stock over a period of 10 years following retirement. Stock options currently outstanding were granted under the Company's 1974 and 1984 Stock Option Plans and the 1991 Executive Plans. The Plans provide for granting of both incentive and non-qualified stock options principally at an option price per share of 100 percent of the fair market value of the Class A Common Stock on the date of grant. These options have terms of five or ten years, and become exercisable in annual periods ranging from one year to four years from the date of grant. Payment upon exercise of an option may be made in cash, with previously-acquired shares, with shares (valued at fair market value) which would be otherwise issued on the exercise of the option or any combination thereof. Under the Company's Non-Employee Directors' Stock Option Plan (the "Directors' Plan"), non-qualified options with ten-year terms are granted annually to each non-employee director of the Company. Each annual grant allows the director to purchase from the Company up to 1,000 shares of Class A Common Stock at the fair market value of such shares at the date of grant. Options for an aggregate of 250,000 shares of Class A Common Stock may be granted under the Directors' Plan. Outstanding stocks options granted to key employees of The Globe to purchase its Series A and/or Series B Common Stock prior to the merger have been converted to stock options to purchase the Company's Class A Common Stock. The former Globe stock options were converted at a ratio of 0.6 shares of Class A Common for each share of Globe stock as determined by the merger agreement. All of these stock options became exercisable effective with the merger on October 1, 1993. Changes in stock options for each of the three years in the period ended December 31, 1993 were as follows: - -------------------------------------------------------------- Dollars in thousands Option Price except per share data Shares Per Share($) Total - -------------------------------------------------------------- Options outstanding January 1, 1991 3,296,385 4.77 to 38.87 76,344 Granted 1,269,064 20.00 to 20.81 25,391 Exercised (134,984) 4.77 to 18.40 (1,121) Terminations (94,957) 20.56 to 38.87 (2,515) - -------------------------------------------------------------- Options outstanding December 31, 1991 4,335,508 5.76 to 38.87 98,099 Granted 1,103,410 25.93 to 28.88 28,473 Exercised (466,320) 5.76 to 26.75 (7,900) Terminations (91,982) 20.56 to 36.43 (2,737) - -------------------------------------------------------------- Options outstanding December 31, 1992 4,880,616 13.96 to 38.87 115,935 Granted 1,909,080 26.50 to 30.68 50,641 Globe stock option conversion 958,654 6.89 to 22.50 14,381 Exercised (346,334) 6.89 to 26.75 (6,333) Terminations (41,175) 20.00 to 36.43 (1,116) - -------------------------------------------------------------- Options outstanding December 31, 1993 7,360,841 6.89 to 38.87 $173,508 - -------------------------------------------------------------- Options which became exercisable during 1991 1,086,077 20.56 $22,332 1992 728,859 20.00 to 20.81 14,588 1993 1,803,174 6.89 to 28.88 35,098 - -------------------------------------------------------------- Options exercisable at December 31, 1991 3,066,444 5.76 to 38.87 $72,708 1992 3,237,964 13.96 to 38.87 76,678 1993 4,673,663 6.89 to 38.87 104,789 - -------------------------------------------------------------- F-23 - -------------------------------------------------------------------------------- 13. CAPITAL STOCK The 5 1/2 percent cumulative prior preference stock, which is redeemable at the option of the Company on 30-day's notice at par plus accrued dividends, is entitled to an annual dividend of $5.50 payable quarterly. The serial preferred stock is subordinate to the 5 1/2 percent cumulative prior preference stock. The Board of Directors is authorized to set the distinguishing characteristics of each series prior to issuance, including the granting of limited or full voting rights; however, the consideration received must be at least $100 per share. No shares of serial preferred stock have been issued. The Class A and Class B Common Stock are entitled to equal participation in the event of liquidation and in dividend declarations. The Class B Common Stock is convertible at the holders' option on a share-for-share basis into Class A shares. As provided for in the certificate of incorporation, the Class A Common Stock has limited voting rights, including the right to elect 30 percent of the Board of Directors, and the Class A and Class B Common Stock have the right to vote together on reservations of Company stock for stock options, on the ratification of the selection of independent certified public accountants and, in certain circumstances, on acquisitions of the stock or assets of other companies. Otherwise, except as provided by the laws of the State of New York, all voting power is vested solely and exclusively in the holders of the Class B Common Stock. At a special meeting of shareholders in September 1993, an amendment of the Company's Restated Certificate of Incorporation was approved to increase the total number of authorized shares of Class A Common Stock to 200,000,000 shares, thereby increasing the Company's overall total number of authorized shares of capital stock of The New York Times Company to 200,910,000 shares. Under a stock repurchase program which commenced in June 1993 and expired at the close of The Globe transaction on October 1, 1993, the Company repurchased approximately 10,231,000 shares of its Class A Common Stock at an average price of $24.87 per share. In a new program announced in October 1993, the Company's Board of Directors authorized additional expenditures of up to $150,000,000 for repurchases of its Class A Common Stock. Under the new Board authorization, purchases may be made from time to time either in the open market or through private transactions. The number of shares that may be purchased in market transactions may be limited as a result of The Globe transaction. Purchases may be suspended from time to time or discontinued. Under this program, to date, the Company has repurchased approximately 30,000 shares of its Class A Common Stock at an average price of $24.78 per share. Had stock repurchases, under both programs, occurred as of January 1, 1993, earnings per share for the year 1993 would have been $.08. Under the 1994 Offering of the Employee Stock Purchase Plan, eligible employees may purchase Class A Common Stock through payroll deductions during 1994 at the lower of $20.03 per share (85 percent of the average market price on November 1, 1993) or 85 percent of the average market price on December 29, 1994. Shares of Class A Common Stock reserved for issuance at December 31, 1993 and 1992 were as follows: - -------------------------------------------------- December 31 1993 1992 - -------------------------------------------------- Retirement Units Outstanding 216,806 229,574 Stock Awards Available 993,359 - Stock Options Outstanding 7,360,841 4,880,616 Available 5,988,480 7,651,526 Employee Stock Purchase Plan Available 993,919 1,813,085 Voluntary Conversion of Class B Common Stock Available 571,624 571,804 - -------------------------------------------------- Total 16,125,029 15,146,605 - -------------------------------------------------- F - 24 - -------------------------------------------------------------------------------- 14. ACCOUNTING CHANGES During 1992, the Company adopted three noncash accounting changes mandated by the Financial Accounting Standards Board: SFAS No. 106-Employers' Accounting for Postretirement Benefits Other Than Pensions (see Note 11), SFAS 109- Accounting for Income Taxes (see Note 7) and SFAS 112-Employers' Accounting for Postemployment Benefits (see Note 11). All accounting changes have been adopted prospectively and, accordingly, earnings for 1991 have not been restated. The cumulative effect of adopting these accounting changes is as follows: - ---------------------------------------------- After-tax effects Earnings (Dollars in thousands) per share - ---------------------------------------------- Postretirement Benefits $(37,411) $(.48) Income Taxes 13,414 .17 Postemployment Benefits (9,440) (.12) -------- ----- Net charge $(33,437) $(.43) ======== ===== - ---------------------------------------------- - -------------------------------------------------------------------------------- 15. SEGMENTS The Company's segment and related information is included on pages 2 and 3 of this Appendix. The information for the years 1993, 1992 and 1991 appearing therein is presented on a basis consistent with, and is an integral part of, the consolidated financial statements. Revenues from individual customers, revenues between business segments and revenues, operating profit and identifiable assets of foreign operations are not significant. - -------------------------------------------------------------------------------- 16. CONTINGENT LIABILITIES There are various libel and other legal actions that have arisen in the ordinary course of business and are now pending against the Company. Such actions are usually for amounts greatly in excess of the payments, if any, that may be required to be made. It is the opinion of management after reviewing such actions with legal counsel to the Company that the ultimate liability which might result from such actions would not have a material adverse effect on the consolidated financial statements. - -------------------------------------------------------------------------------- 17. RECLASSIFICATIONS For comparability, certain 1991 and 1992 amounts have been reclassified to conform with the 1993 presentation. F - 25 INDEPENDENT AUDITORS' REPORT BOARD OF DIRECTORS AND STOCKHOLDERS OF THE NEW YORK TIMES COMPANY: We have audited the accompanying consolidated balance sheets of The New York Times Company as of December 31, 1993 and 1992 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993. Our audits also include the financial schedules listed in the Index at Item 14(a). These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The New York Times Company as of December 31, 1993 and 1992 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in notes 7, 11 and 14, the Company changed its methods of accounting for income taxes, postretirement benefits other than pensions and postemployment benefits effective January 1, 1992 to conform with Statements of Financial Accounting Standards 109, 106 and 112. -Deloitte & Touche- New York, New York February 10, 1994 MANAGEMENT'S RESPONSIBILITIES REPORT The Company's consolidated financial statements were prepared by management who is responsible for their integrity and objectivity. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles and, as such, include amounts based on management's best estimates and judgments. Management is further responsible for maintaining a system of internal accounting control, designed to provide reasonable assurance that the Company's assets are adequately safeguarded and that the accounting records reflect transactions executed in accordance with management's authorization. The system of internal control is continually reviewed for its effectiveness and is augmented by written policies and procedures, the careful selection and training of qualified personnel and a program of internal audit. The consolidated financial statements were audited by Deloitte & Touche, independent auditors. Their audit was conducted in accordance with generally accepted auditing standards and their report is shown on this page. The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets regularly with the independent auditors, internal auditors and management to discuss specific accounting, financial reporting and internal control matters. Both the independent auditors and the internal auditors have full and free access to the Audit Committee. Each year the Audit Committee selects, subject to ratification by stockholders, the firm which is to perform audit and other related work for the Company. MARKET INFORMATION The Class A Common Stock is listed on the American Stock Exchange. The Class B convertible Common Stock and the 5 1/2 percent cumulative prior preference stock are unlisted and are not actively traded. Dividends on the preference stock were paid at the quarterly rate of $1.375 per share during each of the two years. The approximate number of security holders of record as of January 31, 1994 was as follows: Class A Common Stock: 17,245; Class B Common Stock: 43; 5 1/2 percent cumulative prior preference stock: 65. The market price range of Class A Common Stock in 1993 and 1992 is as follows: - ------------------------------------------ Quarter Ended 1993 1992 - ------------------------------------------ High Low High Low March 31 $31.25 $26.37 $32.12 $22.62 June 30 31.25 23.00 32.00 26.00 September 30 26.12 22.62 29.75 25.00 December 31 28.75 22.37 28.37 23.62 Year 31.25 22.37 32.12 22.62 - ------------------------------------------ F - 26
QUARTERLY INFORMATION (Unaudited) - ---------------------------------------------------------------------------------------------------------------- Dollars and shares in millions First Second Third Fourth except per share data Quarter Quarter Quarter Quarter Year 1993 1992 1993 1992 1993 1992 1993 1992 1993 1992 - ---------------------------------------------------------------------------------------------------------------- Revenues $ 454.5 $ 435.9 $ 483.6 $443.2 $ 445.6 $ 426.2 $ 636.0 $468.2 $2,019.7 $1,773.5 - ---------------------------------------------------------------------------------------------------------------- Costs and Expenses Production costs: Raw materials 63.7 67.6 67.5 62.1 64.2 63.6 85.1 57.3 280.5 250.6 Wages and benefits 101.2 91.4 100.1 92.7 99.8 100.5 136.4 103.8 437.5 388.4 Other 94.5 84.5 98.6 84.5 102.9 88.7 122.6 107.9 418.6 365.6 - ---------------------------------------------------------------------------------------------------------------- Total 259.4 243.5 266.2 239.3 266.9 252.8 344.1 269.0 1,136.6 1,004.6 Selling, general and administrative expenses 164.0 157.6 168.4 167.2 166.5 162.0 257.6 193.7 756.5 680.5 - ---------------------------------------------------------------------------------------------------------------- Total 423.4 401.1 434.6 406.5 433.4 414.8 601.7 462.7 1,893.1 1,685.1 - ---------------------------------------------------------------------------------------------------------------- Operating profit 31.1 34.8 49.0 36.7 12.2 11.4 34.3 5.5 126.6 88.4 Interest expense, net 5.2 7.0 5.2 6.7 6.6 6.4 8.4 6.0 25.4 26.1 Loss on disposition of Gwinnett Daily News - 1.6 - 1.1 - 51.1 - - - 53.8 Income taxes 12.9 11.2 20.9 12.4 6.5 (13.2) 2.9 0.7 43.2 11.1 - ---------------------------------------------------------------------------------------------------------------- Income (Loss) before equity in operations of forest products group 13.0 15.0 22.9 16.5 (0.9) (32.9) 23.0 (1.2) 58.0 (2.6) Equity in operations of forest products group (2.1) (1.6) (0.5) (2.5) (2.1) (2.1) (47.2) (2.5) (51.9) (8.7) - ---------------------------------------------------------------------------------------------------------------- Income (Loss) before net cumulative effect of accounting changes 10.9 13.4 22.4 14.0 (3.0) (35.0) (24.2) (3.7) 6.1 (11.3) Net cumulative effect of accounting changes - (33.4) - - - - - - - (33.4) - ---------------------------------------------------------------------------------------------------------------- Net income (loss) $ 10.9 $(20.0) $ 22.4 $14.0 $ (3.0) $(35.0) $(24.2) $(3.7) $ 6.1 $(44.7) - ---------------------------------------------------------------------------------------------------------------- Average number of common shares outstanding 79.9 78.4 79.7 78.5 72.4 78.6 106.0 78.6 84.5 78.5 Per share of common stock Before net cumulative effect of accounting changes $ .14 $ .17 $ .28 $.18 $ (.04) $(.44) $ (.23) $(.05) $ .07 $ (.14) Net cumulative effect of accounting changes - (.43) - - - - - - - (.43) Net income (loss) .14 (.26) .28 .18 (.04) (.44) (.23) (.05) .07 (.57) Dividends .14 .14 .14 .14 .14 .14 .14 .14 .56 .56 - ----------------------------------------------------------------------------------------------------------------
The 1993 quarters do not equal the 1993 year-end amount for earnings per share due to the weighted average number of shares outstanding used in the computations for the respective periods. Per share amounts for the respective quarters and years have been computed using the average number of common shares outstanding as presented in the table above. The significant differences in the number of shares in the 1993 periods are due principally to the issuance of approximately 36.4 million shares due to the October 1993 Globe acquisition offset, in part, by stock repurchases of approximately 10.3 million shares during the third and fourth quarter. The Company's largest source of revenues is advertising, which influences the pattern of the Company's quarterly consolidated revenues and is seasonal in nature. Traditionally, second-quarter and fourth-quarter advertising volume is higher than that in the first quarter. Advertising volume tends to be lower in the third quarter primarily because of the summer slow-down in many areas of economic activity. Quarterly trends are also affected by the overall economy and economic conditions that may exist in specific markets served by each of the Company's business segments. First-quarter 1993 was negatively affected by $3.7 million pre-tax ($.02 per share) due to a March snowstorm. Third-quarter 1993 includes $5.6 million ($.07 per share) of additional income tax expense due to the enactment of the Tax Act. Fourth-quarter 1993 includes a $2.6 million pre-tax gain ($.02 per share) on the sale of assets. Fourth-quarter 1993 includes $35.4 million of pre-tax charges ($.19 per share) for white-collar and production union staff reductions at The Times. Fourth-quarter 1993 includes an after-tax noncash charge to equity in operations of $47.0 million ($.44 per share) to write-down the Company's investment in its Forest Products Group to reflect current operating conditions and economic factors in the industry. First-quarter 1992 includes $3.1 million pre-tax gain ($.02 per share) on the sales of assets. Second-quarter 1992 was negatively affected by $11.0 million pre-tax ($.08 per share) due to labor disruptions at The Times. Third and fourth-quarter 1992 include pre-tax $2.8 million ($.02 per share) and $7.6 million ($.05 per share), respectively, for training and start-up costs for commencement of operations at Edison. Fourth-quarter 1992 includes a $28.0 million pre-tax charge ($.20 per share) for voluntary union staff reductions at The Times. F - 27
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA - -------------------------------------------------------------------------------------------------------------------------------- Dollars and shares in millions Year Ended December 31 except per share data 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 - -------------------------------------------------------------------------------------------------------------------------------- Revenues and Income Revenues $2,020 $1,774 $1,703 $1,777 $1,769 $1,700 $1,642 $1,524 $1,358 $1,199 - -------------------------------------------------------------------------------------------------------------------------------- Operating Profit 127 88 94 130 169 251 284 266 210 176 - -------------------------------------------------------------------------------------------------------------------------------- Income (Loss) from continuing operations before equity in forest products group 58 (2) 41 61 84 132 138 110 93 86 Equity in operations of forest products group (52) (9) 6 4 (16) 29 18 20 21 13 - -------------------------------------------------------------------------------------------------------------------------------- Income (Loss) from continuing operations 6 (11) 47 65 68 161 156 130 114 99 Discontinued operations - - - - 199 7 4 2 2 1 Net cumulative effect of accounting changes - (34) - - - - - - - - - -------------------------------------------------------------------------------------------------------------------------------- Net income (loss) 6 (45) 47 65 267 168 160 132 116 100 - -------------------------------------------------------------------------------------------------------------------------------- Balance Sheet Total assets 3,215 1,995 2,128 2,150 2,188 1,915 1,712 1,405 1,296 869 Long-term debt and capital lease obligations 460 207 213 319 337 378 391 217 274 75 Common stockholders' equity 1,599 1,000 1,073 1,056 1,064 873 823 705 586 485 - -------------------------------------------------------------------------------------------------------------------------------- Per share of Common Stock Continuing operations .07 (.14) .61 .85 .87 2.00 1.91 1.60 1.43 1.25 Discontinued operations - - - - 2.52 .08 .05 .03 .02 .01 Net cumulative effect of accounting changes - (.43) - - - - - - - - Net income (loss) .07 (.57) .61 .85 3.39 2.08 1.96 1.63 1.45 1.26 Dividends .56 .56 .56 .54 .50 .46 .40 .33 .29 .25 Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63 11.02 10.04 8.59 7.24 6.09 - -------------------------------------------------------------------------------------------------------------------------------- Shares Outstanding (end of year) Class A and Class B Common 106.9 79.7 78.4 77.2 78.1 79.2 82.0 82.0 80.9 79.7 - -------------------------------------------------------------------------------------------------------------------------------- Market Price (end of year) 26.25 26.37 23.62 20.62 26.37 26.87 31.00 35.50 24.50 19.19 - --------------------------------------------------------------------------------------------------------------------------------
1993 - Results include pre-tax $3.7 million ($.02 per share) due to a March snowstorm. Results include $5.6 million ($.07 per share) of additional tax expense due to the enactment of the Tax Act. Results include a $2.6 million pre-tax gain ($.02 per share) on the sale of assets. Results include $35.4 million of pre-tax charges ($.23 per share) for staff reductions at The Times. Results include an after-tax noncash charge of $47.0 million ($.56 per share) against equity in operations to write down the Company's investment in its Forest Products Group to reflect current operating conditions and economic factors in the industry. 1992 - Results included a $53.8 million pre-tax loss ($.47 per share) on the closing of The Gwinnett (Ga.) Daily News. Results included a $3.1 million pre-tax gain ($.02 per share) from the sales of assets. Results included a $28.0 million pre-tax charge ($.20 per share) for voluntary union staff reductions at The Times. Results included $21.4 million pre-tax ($.15 per share) for labor disruptions and training and start-up costs at Edison. 1991 - Results included a $20.0 million pre-tax charge ($.15 per share) for voluntary union staff reductions at The Times. Results include the reversal of a provision for income taxes of $10.0 million ($.13 per share) for a favorable tax settlement. 1989 - Results included an after-tax gain of $193.3 million ($2.46 per share) from the sale of the Company's cable television operations. The gain and results of operations through the 1989 sale date are included as discontinued operations. Results included a $30.0 million pre-tax charge ($.22 per share) for voluntary union staff reductions at The Times. Results included an after-tax charge of $27.2 million ($.35 per share) for a valuation reserve against the Company's investment in the Forest Products Group. 1986 - Results included an interest charge of $8.5 million ($.05 per share) which relates to a court decision arising from the Company's 1981 acquisition of two cable television systems. 1985 - Results included a $2.8 million gain ($.03 per share) from the sale of property. The Company acquired five newspapers and two television stations for $389.6 million. F-28 SCHEDULE V THE NEW YORK TIMES COMPANY PROPERTY, PLANT AND EQUIPMENT FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- -------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E Column F - -------------------------------------------------------------------------------------------------------- Balance at Other Balance at beginning changes-- end Classification of period Additions Retirements add (deduct) of period - -------------------------------------------------------------------------------------------------------- Dollars in thousands YEAR ENDED DECEMBER 31, 1993 Land........................ $ 61,961 $ 275 $ 15 $ 3,618(2,3) $ 65,839 Buildings, building equipment and improvements.............. 597,597 9,587 147 43,149(2,3) 650,186(5) Equipment................... 751,186 28,610 9,497 104,180(2,3) 874,479 Construction and equipment installations in progress.................. 47,842 41,147(1) -- 4,018(2) 93,007 ------------- ------------ ----------- ------------ ------------- Total............. $ 1,458,586 $ 79,619 $ 9,659 $ 154,965(2,3) $1,683,511 ------------- ------------ ----------- ------------ ------------- ------------- ------------ ----------- ------------ ------------- YEAR ENDED DECEMBER 31, 1992 Land........................ $ 66,022 $ 551 $ 894 $ (3,718)(4) $ 61,961 Buildings, building equipment and improvements.............. 605,416 9,849 856 (16,812)(4) 597,597(5) Equipment................... 770,651 16,917 14,319 (22,063)(4) 751,186 Construction and equipment installations in progress.................. 27,830 20,012(1) -- -- 47,842 ------------- ------------ ----------- ------------ ------------- Total............. $ 1,469,919 $ 47,329 $ 16,069 $ (42,593)(4) $ 1,458,586 ------------- ------------ ----------- ------------ ------------- ------------- ------------ ----------- ------------ ------------- YEAR ENDED DECEMBER 31, 1991 Land........................ $ 60,131 $ 5,908 $ 17 $ -- $ 66,022 Buildings, building equipment and improvements.............. 602,402 3,182 168 -- 605,416(5) Equipment................... 762,250 15,248 6,847 -- 770,651 Construction and equipment installations in progress.................. 25,968 1,862(1) -- -- 27,830 ------------- ------------ ----------- ------------ ------------- Total............. $ 1,450,751 $ 26,200 $ 7,032 $ -- $ 1,469,919 ------------- ------------ ----------- ------------ ------------- ------------- ------------ ----------- ------------ -------------
- --------------- (1) Net change for the period. (2) Includes property, plant and equipment acquired through the October 1, 1993 acquisition of The Boston Globe. (3) Includes reclassification of closed production facility (totaling $89 million) to miscellaneous assets pending decision related to future use of such facility. (4) Sale of residual assets of The Gwinnett (Ga.) Daily News. (5) Includes $57 million capitalized lease of building and site for a production and distribution facility in Edison, New Jersey for The New York Times. S-1 SCHEDULE VI THE NEW YORK TIMES COMPANY ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- ----------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E Column F - ----------------------------------------------------------------------------------------------------------- Balance at Other Balance at beginning changes-- end Description of period Additions(1) Retirements add (deduct) of period - ----------------------------------------------------------------------------------------------------------- Dollars in thousands YEAR ENDED DECEMBER 31, 1993 Buildings, building equipment and improvements...................... $ 209,247 $ 31,386 $ 101 $ (21,616)(2) $ 218,916 Equipment........................... 346,584 57,888 8,445 (43,456)(2) 352,571 ----------- ----------- ----------- ------------ ----------- Total..................... $ 555,831 $ 89,274 $ 8,546 $ (65,072)(2) $ 571,487 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ----------- YEAR ENDED DECEMBER 31, 1992 Buildings, building equipment and improvements...................... $ 178,869 $ 31,834 $ 378 $ (1,078)(3) $ 209,247 Equipment........................... 324,457 38,046 10,771 (5,148)(3) 346,584 ----------- ----------- ----------- ------------ ----------- Total..................... $ 503,326 $ 69,880 $ 11,149 $ (6,226)(3) $ 555,831 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ----------- YEAR ENDED DECEMBER 31, 1991 Buildings, building equipment and improvements...................... $ 147,723 $ 31,187 $ 41 $ -- $ 178,869 Equipment........................... 289,598 41,254 6,395 -- 324,457 ----------- ----------- ----------- ------------ ----------- Total..................... $ 437,321 $ 72,441 $ 6,436 $ -- $ 503,326 ----------- ----------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ -----------
- --------------- (1) Depreciation of property, plant and equipment is provided at annual rates based on estimated service lives. The rates are applied by the straight-line method using ranges of estimated service lives as follows: 15 to 50 years for buildings; 5 to 30 years for building equipment and improvements and 2 to 20 years for equipment. (2) Reclassification of closed production facility to miscellaneous assets pending decision related to future use of such facility. (3) Sale of residual assets of The Gwinnett (Ga.) Daily News. S-2 SCHEDULE VIII THE NEW YORK TIMES COMPANY VALUATION AND QUALIFYING ACCOUNTS FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- ---------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E - ---------------------------------------------------------------------------------------------------------- Additions Deductions charged for to costs purposes and for Balance at expenses which Balance beginning or accounts at end Description of period revenues were set up of period - ---------------------------------------------------------------------------------------------------------- Dollars in thousands YEAR ENDED DECEMBER 31, 1993 Deducted from assets to which they apply Uncollectible accounts...................... $ 12,809 $ 18,495 $ 14,196 $ 17,108 Returns and allowances, etc................. 20,491 71,657 65,749 26,399 ----------- ----------- ----------- ----------- Total.................................. $ 33,300 $ 90,152 $ 79,945 $ 43,507 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- YEAR ENDED DECEMBER 31, 1992 Deducted from assets to which they apply Uncollectible accounts...................... $ 13,020 $ 14,848 $ 15,059 $ 12,809 Returns and allowances, etc................. 17,621 61,154 58,284 20,491 ----------- ----------- ----------- ----------- Total.................................. $ 30,641 $ 76,002 $ 73,343 $ 33,300 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- YEAR ENDED DECEMBER 31, 1991 Deducted from assets to which they apply Uncollectible accounts...................... $ 11,837 $ 20,334 $ 19,151 $ 13,020 Returns and allowances, etc................. 17,968 42,957 43,304 17,621 Investment in forest products group valuation allowance......................... 26,927 -- 26,927 -- ----------- ----------- ----------- ----------- Total.................................. $ 56,732 $ 63,291 $ 89,382 $ 30,641 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
S-3 SCHEDULE IX THE NEW YORK TIMES COMPANY SHORT-TERM BORROWINGS FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------------- Column A Column B Column C Column D Column E Column F - ------------------------------------------------------------------------------------------------------------------- Maximum Average Weighted amount amount average Weighted outstanding outstanding interest rate Category of aggregate Balance at average during the during the during the short-term borrowings end of period interest rate period period(1) period(2) - ------------------------------------------------------------------------------------------------------------------- Dollars in thousands YEAR ENDED DECEMBER 31, 1993 Borrowings from banks and commercial paper................................ $ 62,340 3.7% $ 281,050 $ 75,924 3.5% ------------- ------ ----------- ----------- ------ ------------- ------ ----------- ----------- ------ YEAR ENDED DECEMBER 31, 1992 Borrowings from banks and commercial paper................................ $ -- -- % $ 45,000 $ 2,331 4.0% ------------- ------ ----------- ----------- ------ ------------- ------ ----------- ----------- ------ YEAR ENDED DECEMBER 31, 1991 Borrowings from banks and commercial paper................................ $ -- -- % $ 66,000 $ 18,941 6.6% ------------- ------ ----------- ----------- ------ ------------- ------ ----------- ----------- ------
- --------------- (1) Calculated by dividing the aggregate amount borrowed during the year by the number of days in a year. (2) Calculated by dividing the total short-term interest expense by the average short-term borrowings outstanding during the period. S-4 SCHEDULE X THE NEW YORK TIMES COMPANY SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- -------------------------------------------------------------------------------------------------------------------------- Column A Column B - -------------------------------------------------------------------------------------------------------------------------- Charged to costs Item(1) and expenses - -------------------------------------------------------------------------------------------------------------------------- Dollars in thousands YEAR ENDED DECEMBER 31, 1993 Advertising costs (promotion, media, etc.).............................. $ 112,153 ------------------- ------------------- YEAR ENDED DECEMBER 31, 1992 Advertising costs (promotion, media, etc.).............................. $ 98,144 ------------------- ------------------- YEAR ENDED DECEMBER 31, 1991 Advertising costs (promotion, media, etc.).............................. $ 95,463 ------------------- -------------------
----------------------- (1) Amounts for other items required by this schedule are omitted as they are presented in the consolidated financial statements or are less than 1% of consolidated revenues. S-5 EXHIBIT INDEX Exhibit No. Description - ------ --------------------------------------------------------------- 3.1 -Certificate of Incorporation as amended by the Class A and Class B stockholders and as restated on September 29, 1993. 3.2 -By-laws as amended through February 17, 1994. 9.1 -Globe Voting Trust Agreement, dated as of October 1, 1993. 10.2 -The Company's 1991 Executive Stock Incentive Plan, as amended through April 13, 1993. 10.8 -Agreement of Lease, dated as of December 15, 1993, between The City of New York, Landlord, and the Company, Tenant (as successor to New York City Economic Development Corporation (the "EDC"), pursuant to an Assignment and Assumption of Lease With Consent, made as of December 15, 1993, between the EDC, as Assignor, to the Company, as Assignee). 10.9 -Funding Agreement #1, dated as of December 15, 1993, between the EDC and the Company. 10.10 -Funding Agreement #2, dated as of December 15, 1993, between the EDC and the Company. 10.11 -Funding Agreement #3, dated as of December 15, 1993, between the EDC and the Company. 10.12 -Funding Agreement #4, dated as of December 15, 1993, between the EDC and the Company. 10.13 -New York City Public Utility Service Power Service Agreement, made as of May 3, 1993, between The City of New York, acting by and through its Public Utility Service, and The New York Times Newspaper Division of the Company. 10.14 -Employment Agreement, dated May 19, 1993, between API, Globe Newspaper Company and William O. Taylor. 10.16 -API's Supplemental Executive Retirement Plan, as amended effective September 15, 1993. 21 -Subsidiaries of the Company. EX-3.1 2 EXHIBIT 3.1 THE NEW YORK TIMES COMPANY Certificate of Incorporation As Amended and Restated on September 29, 1993 RESTATED CERTIFICATE OF INCORPORATION of THE NEW YORK TIMES COMPANY Under Section 807 of the Business Corporation Law Pursuant to the provisions of Section 807 of the Business Corporation Law, the undersigned, being a Senior Vice President and the Secretary, respectively, of THE NEW YORK TIMES COMPANY (hereinafter called the "Corporation"), hereby certify as follows: FIRST: The name of the Corporation is THE NEW YORK TIMES COMPANY. SECOND: The Certificate of Incorporation of the Corporation was filed by the Department of State, Albany, New York, on the 26th day of August, 1896. THIRD: That the text of Article THIRD relating to the share structure of the Corporation and Article EIGHTH relating to the number of directors of the Corporation each is hereby amended as stated below, and the text of Articles FIRST, SECOND, FOURTH, FIFTH, SIXTH, SEVENTH and NINTH each is hereby restated, without amendment or change, to read in full, as follows: "CERTIFICATE OF INCORPORATION of THE NEW YORK TIMES COMPANY. FIRST The name of the proposed corporation is The New York Times Company. SECOND The objects for which it is to be formed are as follows: 1. The business of printing, publishing and selling newspapers, books, pamphlets and other publications; gathering, transmitting and supplying news reports, general job printing, and any and all other business incidental to the foregoing or any of them or thereunto pertaining or proper in connection therewith. 2. To purchase, take on lease or in exchange, hire or otherwise acquire any real or personal property, rights or privileges suitable or convenient for any purpose of its business, and to erect and construct, make, improve or aid or subscribe towards the construction, erection, making and improvement of any building institution, machinery or other appliance insofar as the same may be appurtenant to or useful for the conduct of the business above specified, but only to the extent to which the Corporation may be authorized under the laws of the State of New York or of the United States. 3. To acquire and carry on all or any part of the business or property of any corporation engaged in a business similar to that authorized to be conducted by this Corporation, and to undertake in conjunction therewith any liabilities of any person, firm, association or corporation possessed of property suitable for any of the purposes of this Corporation, or for carrying on any business which this Corporation is authorized to conduct, and as the consideration for the same to pay cash or to issue shares, stock or obligations of this Corporation. 4. To purchase, subscribe for or otherwise acquire, hold and dispose of the shares, stock or obligations of any corporation organized under the laws of this state or any other state, or of any territory of the United States or of any foreign country, except moneyed corporations, insofar as the same may be useful for the conduct of the business of this Corporation and incidental to or proper in connection therewith; and to issue in exchange therefor its stock, bonds or other obligations. 5. To borrow or raise money for any of the aforementioned purposes of this Corporation, and to secure the same and the interest thereon accruing, or for any purpose, to mortgage or charge the undertaking, or all or any part of the property, present or after acquired, subject to the limitations herein expressed, and to create, issue, make, draw, accept and negotiate debentures or debenture stock, mortgage bonds, promissory notes or other obligations or negotiable instruments. 6. To guarantee the payment of dividends or interest on any share, stocks or debentures or other securities issued by, or any other contract or obligation of any corporation whenever proper or necessary for the business of this Corporation, provided the required authority be first obtained for that purpose. 7. To do any and all such other things as are incidental or conducive to the attainment of the above- mentioned objects. THIRD The Capital Stock is to consist of 200,910,000 shares, of which 110,000 shares of the par value of One Hundred Dollars ($100) each shall be 5 1/2% Cumulative Prior Preference Stock, 200,000 shares of the par value of One Dollar ($1) each shall be Serial Preferred Stock, 200,000,000 shares of the par value of Ten Cents (10 cents) each shall be Class A Common Stock and 600,000 of the par value of Ten Cents (10 cents) each shall be Class B Common Stock. FOURTH The designations, preferences, privileges and voting powers of the shares of each class and the restrictions or qualification thereof are as follows: (I) The holders of the 5 1/2% Cumulative Prior Preference Stock shall be entitled to receive, when and as declared by the Board of Directors, dividends at the rate of 5 1/2% of the par value thereof per annum and no more, payable in equal quarterly installments on the first day of January, April, July and October in each year, accruing from October 1, 1957, in respect of shares of the 5 1/2% Cumulative Prior Preference Stock issued before October 1, 1957, and in respect of shares of 5 1/2% Cumulative Prior Preference Stock issued on or after said date, from the quarterly dividend payment dates on which issued, or, if not issued on a quarterly dividend payment date, from the quarterly dividend payment date next preceding the date of issue of said shares, before any distribution, whether by way of dividends or otherwise, shall be declared or paid upon or set apart for the Serial Preferred Stock or the Common Stock of the Corporation, or any other stock of the Corporation, except stock having a preference over, or being on a parity with, the 5 1/2% Cumulative Prior Preference Stock. Such dividends 2 upon the 5 1/2% Cumulative Prior Preference Stock shall be cumulative so that unless all dividends on the 5 1/2% Cumulative Prior Preference Stock for all past quarterly dividends shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and after the full dividend thereon for the current quarterly dividend period shall have been paid, or declared and a sum sufficient for the payment thereof set apart, the Corporation shall not declare or pay any dividend, in cash or stock or otherwise on the Serial Preferred Stock, the Class A Common Stock, the Class B Common Stock or any other stock of the Corporation, except stock having such preference over, or being on a parity with, the 5 1/2% Cumulative Prior Preference Stock. (II) After all dividends upon the 5 1/2% Cumulative Prior Preference Stock for all past quarterly dividend periods shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and after the full dividend thereon for the current quarterly dividend period shall have been paid, or declared and a sum sufficient for the payment thereof set apart, then, and not otherwise, the holders of the Serial Preferred Stock shall be entitled to receive, when and if declared by the Board of Directors, dividends thereon at the rate and time and in the manner and on the terms and conditions, prescribed by the Board of Directors pursuant to paragraph VIII of this Article FOURTH before any distribution, whether by way of dividends or otherwise, may be declared or paid upon or set apart for the Class A Common Stock, or Class B Common Stock of the Corporation or any other stock of the Corporation, except stock having a preference over, or being on a parity with, the Serial Preferred Stock. (III) After all dividends upon the 5 1/2% Cumulative Prior Preference Stock for all past quarterly dividend periods shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and after the full dividend thereon for the current quarterly dividend period shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and after all dividends upon all series of Serial Preferred Stock for all past quarterly dividend periods shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and after the full dividend thereon for the current quarterly dividend and a sum sufficient for the payment thereof set apart, then, and not otherwise, dividends may be declared upon, and paid to the holders of the Class A Common Stock and to the holders of the Class B Common Stock, share for share, to the exclusion of the holders of the 5 1/2% Cumulative Prior Preference Stock and the Serial Preferred Stock. (IV) The Corporation at the option of the Board of Directors may redeem in whole or in part the 5 1/2% Cumulative Prior Preference Stock at the time or times, but only after October 1, 1962, fixed by the Board of Directors with respect to the shares of 5 1/2% Cumulative Prior Preference Stock so to be redeemed and on the terms and conditions fixed herein, upon notice duly given as hereinafter provided, by paying therefor in cash for each share of 5 1/2% Cumulative Prior Preference Stock to be redeemed the sum of One Hundred Dollars ($100) plus an amount equal to the amount of all the dividends accumulated and unpaid thereon at the redemption date, but without interest, whether or not earned or declared (such sum being hereinafter called the "redemption price"). At least 30 days' previous notice of any such redemption of 5 1/2% Cumulative Prior Preference Stock shall be mailed, addressed to the holders of record of the shares to be redeemed at their respective addresses as the same shall appear on the books of the Corporation as of such date (which shall be not more than 50 days prior to the redemption date) as shall be established by the Board of Directors, and such notice shall also be published in a daily newspaper printed in the English language and published and of general circulation 3 in the Borough of Manhattan, City of New York. In case of the redemption of only part of the 5 1/2% Cumulative Prior Preference Stock at the time outstanding, the shares so to be redeemed shall be selected by either of the following methods as the Board of Directors shall elect: (a) By lot; or (b) By redeeming as nearly as practicable that proportion of the number of shares of 5 1/2% Cumulative Prior Preference Stock held by each holder of record of shares of 5 1/2% Cumulative Prior Preference Stock as of the record date established by the Board of Directors as hereinabove provided which the total number of shares thereof so to be redeemed bears to the total number of shares thereof then outstanding. If such notice of redemption shall have been duly given as aforesaid at least 30 days prior to the redemption date, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares of 5 1/2% Cumulative Prior Preference Stock so called for redemption, so as to be and continue to be available therefor, then, from and after the redemption date, notwithstanding that any certificate for the shares of 5 1/2% Cumulative Prior Preference Stock so called for redemption shall not have been surrendered for cancellation, the shares represented thereby shall no longer be deemed to be outstanding, the right to receive dividends thereon shall cease and all rights with respect to such shares of 5 1/2% Cumulative Prior Preference Stock so called for redemption shall forthwith on such redemption date cease and terminate except only the right of the holders thereof to receive the redemption price of such shares so to be redeemed, but without interest thereon. Any moneys so set aside by the Corporation and unclaimed at the end of 6 years from the date fixed for such redemption shall revert to the general funds of the Corporation. The Corporation may, however, prior to the redemption date specified in the notice of redemption, deposit in trust for the account of the holders of the shares of 5 1/2% Cumulative Prior Preference Stock so to be redeemed, with a bank or trust company in good standing organized under the laws of the United States of America or of the State of New York, doing business in the Borough of Manhattan, the City of New York, having a capital, surplus and undivided profits aggregating at least $5,000,000, designated in such notice of redemption, all funds necessary for such redemption, together with irrevocable written instructions authorizing such bank or trust company, on behalf and at the expense of the Corporation, to cause the notice of redemption to be duly mailed and the publication of such notice to be made as hereinabove provided, at least 30 days prior to the redemption date, and thereupon, notwithstanding that any certificate for the shares of 5 1/2% Cumulative Prior Preference Stock so called for redemption shall not have been surrendered for cancellation, all shares of 5 1/2% Cumulative Prior Preference Stock with respect to which such deposit shall have been made shall no longer be deemed to be outstanding and all rights with respect to such shares of 5 1/2% Cumulative Prior Preference Stock shall forthwith upon such deposit in trust cease and terminate, except only the rights of the holders thereof to receive from such bank or trust company, at any time on or after the redemption date, the redemption price for such shares so to be redeemed. Any moneys so deposited by the Corporation and unclaimed at the end of 6 years from the date fixed for such redemption shall be repaid to the Corporation upon its request expressed in a resolution of its Board of Directors, after which repayment, the holders of the shares so called for redemption shall look only to the Corporation for payment thereof. 4 (V) In the event of liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the 5 1/2% Cumulative Prior Preference Stock then outstanding shall be entitled to be paid out of the assets of the Corporation, whether from capital, surplus or earnings, before any payment or distribution out of such assets shall be made to the holders of the Serial Preferred Stock or the holders of the Class A Common Stock or the holders of the Class B Common Stock, or any other stock of the Corporation, except stock having preference over, or being on a parity with, the 5 1/2% Cumulative Prior Preference Stock, the sum of One Hundred Dollars ($100) per share plus an amount equal to the amount of all the dividends accumulated and unpaid thereon, but without interest, whether or not earned or declared, and thereafter the holders of the 5 1/2% Cumulative Prior Preference Stock shall be entitled to no further payment or distribution. A reorganization, consolidation or merger of this Corporation (in whatever manner effected, including the sale or transfer of its assets) shall not be regarded as a voluntary liquidation, dissolution or winding up of this Corporation. (VI) In the event of liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, after payment in full of the amounts required to be paid to the holders of all 5 1/2% Cumulative Prior Preference Stock then outstanding, the holders of all series of Serial Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation, whether from capital, surplus or earnings, in the order of the preference, if any, of the various series of the Serial Preferred Stock, before any payment or distribution out of such assets shall be made to the holders of the Class A Common Stock or the holders of the Class B Common Stock, or any other stock of the Corporation, except stock having a preference over, or being on a parity with, the Serial Preferred Stock, the sum of One Hundred Dollars ($100) per share, and if required by the resolution or resolutions of the Board of Directors establishing such series, an amount which shall be equal to the amount of all dividends accumulated and unpaid thereon, whether or not earned or declared, but without interest, and thereafter the holders of all series of the Serial Preferred Stock shall be entitled to no further payment or distribution. A reorganization, consolidation or merger of this Corporation (in whatever manner effected, including the sale or transfer of its assets) shall not be regarded as a voluntary liquidation, dissolution or winding up of this Corporation. (VII) In the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment in full of the amounts required to be paid to the holders of all 5 1/2% Cumulative Prior Preference Stock then outstanding, and after payment in full of the amounts required to be paid to the holders of all series of the Serial Preferred Stock then outstanding, the holders of the Class A Common Stock and the holders of the Class B Common Stock shall be entitled to the exclusion of the holders of the 5 1/2% Cumulative Prior Preference Stock and the holders of all series of the Serial Preferred Stock to share, ratably, share for share, in all remaining assets of the Corporation. A reorganization, consolidation or merger of this Corporation (in whatever manner effected, including the sale or transfer of its assets) shall not be regarded as a voluntary liquidation, dissolution or winding up of this Corporation. (VIII) (a) Subject to applicable provisions of law and to the provisions of this Certificate of Incorporation (including without limitation those provisions set forth in paragraphs II and VI of this Article FOURTH) authority is hereby expressly granted to and vested in the Board of Directors, to the extent permitted by and upon compliance with the provisions set forth in the law of the State of New York to issue the Serial Preferred Stock from time to time in one or more series, each series to have such relative rights, preferences, 5 limitations or restrictions, and bear such designations, as shall be determined and stated prior to the issuance of any shares of any such series in and by a resolution or resolutions of the Board of Directors authorizing the issuance of such series, including without limitation: (1) The number of shares to constitute such series and the distinctive designation thereof; (2) The dividend rate or rates to which the shares of such series shall be entitled and whether dividends shall be cumulative and, if so, the date from which dividends shall accumulate, and the quarterly dates on which dividends, if declared, shall be payable; (3) Whether the shares of such series shall be redeemable, the limitations and restrictions in respect of such redemptions, the manner of selecting shares of such series for redemption if less than all shares are to be redeemed, and the amount per share, including the premium, if any, which the holders of shares of such series shall be entitled to receive upon the redemption thereof, which amount may vary at different redemption dates and may be different in respect of shares redeemed through the operation of any retirement or sinking fund and in respect of shares otherwise redeemed; (4) Whether the holders of shares of such series shall be entitled to receive, in the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, an amount equal to the dividends accumulated and unpaid thereon, whether or not earned or declared, but without interest; (5) Whether the shares of such series shall be subject to the operation of a purchase, retirement or sinking fund and, if so, whether such fund shall be cumulative or noncumulative, the extent to and the manner in which such fund shall be applied to the purchase or redemption of the shares of such series for retirement or to other corporate purposes, and the terms and provisions in respect of the operation thereof; (6) Whether the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or series thereof or of any other series of the same class, and if so convertible or exchangeable, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same; (7) The voting powers, if any, of the shares of such series in addition to the voting powers provided by law; (8) Any other rights, preferences, limitations or restrictions not inconsistent with law or the provisions of this Certificate of Incorporation. (b) All shares of any one series of Serial Preferred Stock shall be identical with each other in all respects, except that in respect of any series entitled to cumulative dividends, shares of such series issued at different times may differ as to the dates from which such dividends shall be cumulative. 6 (c) The shares of Serial Preferred Stock shall be issued for a consideration of at least One Hundred Dollars ($100) per share, and the stated capital allocable to each such issued share shall be at least One Hundred Dollars ($100). (IX) The holders of the Class A Common Stock shall be entitled to one vote for each share thereof held by them in the election of 30% of the Board of Directors proposed to be elected at any meeting of stockholders held for that purpose (or the nearest larger whole number if such percentage is not a whole number) voting separately and as a class; and the holders of the Class B Common Stock shall be entitled to one vote for each share held by them in the election of the balance of the Board of Directors proposed to be elected at any such meeting, voting separately and as a class. Nothing herein shall be deemed to limit the authority of the Board of Directors with respect to the voting powers of any series of Serial Preferred Stock which may be issued pursuant to paragraph (VIII) of this Article FOURTH. (X) The holders of the Class A Common Stock, the holders of the Class B Common Stock, and (to the extent determined by the Board of Directors in determining the rights of any series of Serial Preferred Stock issued pursuant to paragraph VIII hereof) the holders of shares of any series of Serial Preferred Stock shall be entitled to one vote per share, voting together and not as separate classes, upon: (1) The matters specifically set forth in paragraph XII of this Article FOURTH; (2) Any proposal submitted to a vote of shareholders in connection with the ratification of the selection of independent certified public accountants to serve as auditors of the Company. (XI) Except as provided in paragraphs VIII, IX and X of this Article FOURTH and as otherwise required by the laws of the State of New York, the entire voting power shall be vested solely and exclusively in the holders of the shares of Class B Common Stock, the holders of Class B Common Stock to be entitled to 1 vote for each 1 share thereof held upon all matters requiring a vote of stockholders of the Corporation and the holders of the 5 1/2% Cumulative Prior Preference Stock or of the Class A Common Stock shall have no voting power, and shall not have the right to participate in any meeting of stockholders or to have notice thereof. (XII) Authorization by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon shall be required for any one or more of the following actions, unless the Corporation shall, prior to any such action, receive in writing the consent of any stock exchange upon which any stock of the Corporation may be listed to such action without authorization of stockholders, or unless at the time of such action no shares of stock of the Corporation are listed upon any stock exchange: (1) Reservation of any shares of capital stock of the Corporation for options granted or to be granted to officers, directors or employees of the Corporation: (2) The acquisition of the stock or assets of any other company in the following circumstances: 7 (a) If any officer, director or holder of 10% or more of any class of shares of voting securities of the Corporation has an interest, directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction; (b) If the transaction involves the issuance of Class A Common Stock or Class B Common Stock or securities convertible into either, or any combination of the three, and if the aggregate number of shares of Common Stock so to be issued together with the Common Stock which could be issued upon conversion of such securities approximates (in the reasonable judgment of the Board of Directors) 20% of the aggregate number of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such transaction; or (c) If the transaction involves issuance of Class A Common Stock or Class B Common Stock and any additional consideration, and if the value of the aggregate consideration so to be issued (including the value of any Common Stock which may be issuable in the future in accordance with the terms of the transaction) has in the reasonable judgment of the Board of Directors a combined fair value of approximately 20% or more of the aggregate market value of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such transaction. (XIII) Except for the holders of Class B Common Stock, no holder of any share of any class of stock of the Corporation shall have any preemptive or other rights to subscribe for or purchase any shares of any class or any notes, debentures, bonds or any other securities of the Corporation, whether now or hereafter authorized and whether or not convertible into, or evidencing or carrying options, warrants or rights to purchase shares of any class or any notes, debentures, bonds or any other securities now or hereafter authorized, and whether the same shall be issued for cash, services or property, or by way of dividend or otherwise. (XIV) Whenever any shares of Class A Common Stock or Class B Common Stock of the Corporation shall have been redeemed, purchased or otherwise reacquired, the Board of Directors shall be authorized either to eliminate such shares from the authorized number of shares of the Corporation or to restore such shares to the status of authorized but unissued shares. (XV) (1) Each share of Class B Common Stock may at any time be converted, at the option of the holder thereof, into one fully paid and non-assessable (except to the extent provided in Section 630 of the Business Corporation Law) share of Class A Common Stock. Such right shall be exercised by the surrender of the certificate representing such share of Class B Common Stock to be converted at the office of the transfer agent of the Corporation (the "Transfer Agent") during normal business hours accompanied by a written notice of the election by the holder thereof to convert and (if so required by the Corporation or the Transfer Agent) an instrument of transfer, in form satisfactory to the Corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and funds in the amount of any applicable transfer tax (unless provision satisfactory to the Corporation is otherwise made therefor), if required pursuant to subparagraph (3) below. (2) As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock in the manner provided in subparagraph (1) above and the payment in cash of any amount required by the provisions of subparagraphs (1) and (3), the Corporation will deliver or cause to be delivered at the office of the Transfer 8 Agent to or upon the written order of the holder of such certificate, a certificate or certificates representing the number of fully paid and non-assessable (except to the extent provided in Section 630 of the Business Corporation Law) shares of Class A Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class B Common Stock, and all rights of the holder of such shares of Class B Common Stock as such holder shall cease at such time and the person or persons in whose name or names the certificate or certificates representing the shares of Class A Common Stock are to be issued shall be treated for all purposes as having become the record bolder or holders of such shares of Class A Common Stock at such time; provided, however, that any such surrender and payment on any date when the stock transfer books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates representing shares of Class A Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer books are open. (3) The issuance of certificates for shares of Class A Common Stock upon conversion of shares of Class B Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class B Common Stock converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance, or shall establish to the satisfaction of the Corporation that such tax has been paid. (4) When shares of Class B Common Stock have been converted, they shall be cancelled and not reissued. FIFTH The amount with which said Corporation shall commence business is the sum of Seven Hundred Dollars ($700). SIXTH The Secretary of State is designated as agent for the service of process. The principal office of the Corporation shall be located in the City of New York, County of New York and State of New York, and the address to which the Secretary of State shall mail a copy of process in any action or proceeding against the Corporation which may be served on him is 229 West 43d Street, New York, N.Y. 10036. SEVENTH The duration of the Corporation shall be perpetual. 9 EIGHTH The number of directors of the Corporation shall be not less than three nor more than eighteen, each of whom shall hold at least one share of Capital Stock. NINTH No director of the Corporation shall be personally liable to the Corporation or its stockholders for damages for any breach of duty as a director; provided that this Article NINTH shall neither eliminate nor limit liability: (a) if a judgment or other final adjudication adverse to such director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that his or her acts violated Section 719 of the Business Corporation Law; or (b) for any act or omission prior to the effectiveness of this Article NINTH. Any repeal of or modification to the provisions of this Article NINTH shall not adversely affect any right or protection of a director of the Corporation existing pursuant to this Article NINTH immediately prior to such repeal or modification." FOURTH: The amendments to the Certificate of Incorporation effected by the foregoing restatement were authorized by a vote of the Board of Directors at a meeting of the Board of Directors held at 229 West 43rd Street, New York, New York, on the 10th day of June, 1993, at 3:00 p.m. local time, upon notice pursuant to Section 711 of the Business Corporation Law followed by the affirmative vote of the holders of record of a majority of the outstanding shares of the Class B Common Stock of the Corporation at a special meeting of the shareholders held at Town Hall, 123 West 43rd Street, New York, New York 10036 on the 28th day of September, 1993, at 9:00 a.m., local time, upon notice pursuant to Section 605 of the Business Corporation Law. IN WITNESS WHEREOF, we have hereunto subscribed this Certificate this 29th day of September, 1993, and affirm that the statements contain therein are true under the penalties of perjury. By -------------------------- Michael E. Ryan Senior Vice President By --------------------------- Laura J. Corwin Secretary 10 EX-3.2 3 THE NEW YORK TIMES COMPANY ------------------ By-Laws ------------------ As Amended by the Board of Directors October 21, 1968, February 26, 1969, March 24, 1971, March 29, 1972, March 28, 1973, May 30, 1973, November 28, 1973, March 27, 1974, March 31, 1976, April 26, 1977, January 30, 1978, October 25, 1978, April 3, 1979, July 23, 1979, March 20, 1980, May 15, 1980, March 19, 1981, March 18, 1982, February 17, 1983, April 28, 1983, February 16, 1984, July 18, 1985, February 20, 1986, April 30, 1986, October 16, 1986, February 19, 1987, February 18, 1988, March 16, 1989, February 15, 1990, February 21, 1991, February 20, 1992, February 18, 1993, October 21, 1993, December 16, 1993, and February 17, 1994. As Ratified by the Class B Stockholders April 22, 1969 and the Class A and Class B Stockholders (Article XI only) April 19, 1988 BY-LAWS OF THE NEW YORK TIMES COMPANY As Amended by the As Ratified by the Board of Directors Class B Stockholders October 21, 1968 April 22, 1969 February 26, 1969 and the Class A and March 24, 1971 Class B Stockholders March 29, 1972 (Article XI only) March 28, 1973 (April 19, 1988) May 30, 1973 November 28, 1973 March 27, 1974 March 31, 1976 April 26, 1977 January 30, 1978 October 25, 1978 April 3, 1979 July 23, 1979 March 20, 1980 May 15, 1980 March 19, 1981 March 18, 1982 February 17, 1983 April 28, 1983 February 16, 1984 July 18, 1985 February 20, 1986 April 30, 1986 October 16, 1986 February 19, 1987 February 18, 1988 March 16, 1989 February 15, 1990 February 21, 1991 February 20, 1992 February 18, 1993 October 21, 1993 December 16, 1993 February 17, 1994 i I N D E X PAGE ARTICLE I. Stockholders........................................................................... 1 1. Annual Meeting................................................................. 1 2. Special Meetings............................................................... 1 3. Notice of Meetings............................................................. 1 4. Quorum......................................................................... 1 5. Voting......................................................................... 1 ARTICLE II. Closing Transfer Books; Setting Record Date............................................ 2 1. Qualification of Voters........................................................ 2 2. Determination of Stockholders of Record for Other Purposes..................... 2 ARTICLE III. Board of Directors..................................................................... 2 1. Number, Classification, Election and Qualifications............................ 2 2. Vacancies...................................................................... 2 3. Regular Meetings............................................................... 3 4. Special Meetings............................................................... 3 5. Quorum......................................................................... 3 6. Committees..................................................................... 4 7. Salaries....................................................................... 4 8. Resignation.................................................................... 4 9. Telephonic Meetings............................................................ 4 ARTICLE IV. Officers............................................................................... 4 1. Appointment.................................................................... 4 2. Term of Office................................................................. 4 3. The Chairman of the Board...................................................... 5 4. The Vice Chairman of the Board................................................. 5 5. The President.................................................................. 5 6. Vice Presidents................................................................ 5 7. The Secretary.................................................................. 5 8. The Treasurer.................................................................. 5 9. Duties of Officers may be Delegated............................................ 6 ARTICLE V. Stock Certificates..................................................................... 6 1. Issuance of Stock Certificates................................................. 6 2. Lost Stock Certificates........................................................ 6 3. Transfers of Stock............................................................. 6 4. Regulations.................................................................... 6 ARTICLE VI. Seal................................................................................... 7 ARTICLE VII. Checks................................................................................. 7 ARTICLE VIII. Books of Account and Stock Book........................................................ 7 ARTICLE IX. Fiscal Year............................................................................ 7 ARTICLE X. Voting Securities...................................................................... 7 ARTICLE XI. Indemnification........................................................................ 7 ARTICLE XII. Interest of Directors and Officers in Contracts with the Company....................... 8 ARTICLE XIII. Notices................................................................................ 8 ARTICLE XIV. Amendment.............................................................................. 9
ii THE NEW YORK TIMES COMPANY BY-LAWS ARTICLE I STOCKHOLDERS 1. Annual Meeting. The Annual Meeting of Stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the third Tuesday in April, at such time and place either within or without the State of New York as may be specified by the Board of Directors. 2. Special Meetings. Special meetings of the stockholders, to be held at such place either within or without the State of New York and for the purpose or purposes as may be specified in the notices of such meetings, may be called by the Chairman of the Board or the President and shall be called by the President or the Secretary at the request of a majority of the Board of Directors or of stockholders owning 25 per cent or more of the shares or stock of the Company issued and outstanding and entitled to vote on any action proposed by such stockholders for such meetings. Such request shall be in writing and shall state the purpose or purposes of the proposed meeting. 3. Notice of Meetings. Notice of the time, place and purpose or purposes of every meeting of stockholders shall be in writing, signed by the President or the Secretary, and shall be mailed by the Secretary, or the person designated by him to perform this duty, at least ten, and not more than fifty, days before the meeting, to each stockholder of record entitled to vote at such meeting and to each stockholder of record who would be entitled to have his stock appraised if the action proposed at such meeting were taken. Such notice shall be directed to a stockholder at his address as it appears on the stock book, unless he shall have filed with the Secretary a written request that notices intended for him be mailed to some other address, in which case it will be mailed to the address designated in such request. 4. Quorum. The holders of record of a majority of the shares of stock issued and outstanding and entitled to vote thereat, present in person or by proxy, shall be requisite and shall constitute a quorum at each meeting of stockholders for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation or by these By-laws; provided that, when any specified action is required to be voted upon by a class of stock voting as a class, the holders of a majority of the shares of such class shall be requisite and shall constitute a quorum for the transaction of such specified action. If, however, there shall be no quorum, the officer of the Company presiding as chairman of the meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. 5. Voting. Each stockholder entitled to vote on any action proposed at a meeting of stockholders shall be entitled to one vote in person or by proxy for each share of voting stock held of record by him. Every proxy must be executed in writing by the stockholder or by his duly authorized attorney. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein its duration. 1 The vote for directors shall be by ballot, and the election of each director shall be decided by a plurality vote. Except as otherwise provided by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, votes on any other matters coming before any meeting of stockholders shall be decided by the vote of the holders of a majority of the shares represented at such meeting, in person or by proxy, and entitled to vote on the specific matter. Except as required by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, the chairman presiding at any meeting of stockholders may rule on questions of order or procedure coming before the meeting or submit such questions to the vote of the meeting, which vote may at his direction be by ballot. The chairman shall submit any such questions to the vote of the meeting at the request of any stockholder entitled to vote present in person or by proxy at the meeting, which vote shall be by ballot. ARTICLE II CLOSING TRANSFER BOOKS; SETTING RECORD DATE 1. Qualification of Voters. The Board of Directors may prescribe a period, not exceeding fifty days prior to the date of any meeting of the stockholders or prior to the last day on which the consent or dissent of stockholders may be effectively expressed for any purpose without a meeting, as the time as of which stockholders entitled to notice of and to vote at such a meeting or whose consent or dissent is required or may be expressed for any purpose, as the case may be, shall be determined, and all persons who were holders of record of voting stock at such time and no others shall be entitled to notice of and to vote at such meeting or to express their consent or dissent, as the case may be. 2. Determination of Stockholders of Record for Other Purposes. The Board of Directors may fix a time, not exceeding forty days preceding the date fixed for the payment of any dividend or for the making of any distribution or for the delivery of evidences of rights or evidences of interests arising out of any change, conversion or exchange of capital stock, as a record time for the determination of the stockholders entitled to receive any such dividend, distribution, rights or interests, and in such case only stockholders of record at the time so fixed shall be entitled to receive such dividend, distribution, rights or interests. ARTICLE III BOARD OF DIRECTORS 1. Number, Classification, Election and Qualifications. The affairs of the Company shall be managed by a Board of Directors consisting of sixteen members. For the purpose of election of directors only, and not for any other purpose, the sixteen directors shall be divided into two classes, the five directors whom the holders of Class A Common Stock are entitled to elect, to be designated the Class A directors, and the eleven directors whom the Class B Common Stock are entitled to elect, to be designated the Class B directors. The directors shall, except as provided in Section 2 of this Article III, be elected by the classes of shares entitled to elect them, by ballot at each annual meeting of stockholders, and shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualify. All directors must be of full age and at least one shall be a citizen of the United States and a resident of New York State. 2. Vacancies. Any vacancy in the Board of Directors, whether caused by resignation, death, increase in the number of directors, disqualification or otherwise, may be filled by a majority of the directors in office 2 after the vacancy has occurred, although less than a quorum. A director so elected shall hold office for the unexpired term in respect of which such vacancy occurred. 3. Regular Meetings. A regular meeting of the Board shall be held in each year immediately following the Annual Meeting of Stockholders or if such meeting be adjourned, the final adjournment thereof at the same place as such meeting of stockholders. No notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting. Other regular meetings of the Board may be held at such time and place, either within or without the State of New York, as shall from time to time be determined by a resolution of the Board. Any business may be transacted at any regular meeting at which a quorum is present. The time and place of any such regular meeting may be changed (i) at the preceding regular meeting; or (ii) subsequent to the adjournment of the preceding regular meeting by consent in writing signed by a majority of the whole Board; provided, however, that in either case notice of such change be served on each director personally or by telegram two days or by mail five days prior to the date originally designated for such regular meeting. 4. Special Meetings. A special meeting of the Board of Directors may be held at the time fixed by resolution of the Board or upon call of the Chairman of the Board, the President or any two directors and may be held at any place within or without the State of New York. Except as otherwise provided by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, notice of the time and place of any special meeting of the Board shall be given by the Secretary or other person designated by him to perform this duty by serving the same personally or by telegram on each director at his post office address as the same shall appear on the books of the Company at least two days previous to such meeting or by mailing a copy of such notice, postage prepaid, to each director at such address at least five days previous to such meeting, provided, however, that no notice need be given to any director if waived by him either before or after the meeting or if he shall be present at such meeting, and any meeting of the Board may be held at any time without notice if all the directors then in office shall be present thereat. Any such notice shall also state the items of business which are expected to come before the meeting, and the items of business transacted at any special meeting of the Board shall be limited to those stated in such notice, unless all the directors are present at the meeting, or all those absent consent in writing either before or after the meeting, to the transaction of an item or items of business not stated in such notice. 5. Quorum. At all meetings of the Board, the presence of any five of the directors in office shall be necessary and sufficient to constitute a quorum for the transaction of business, and, except as otherwise required by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, the affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be necessary for the adoption of any business or resolution which may come before the meeting; provided, however, that in the absence of a quorum a majority of the directors present or any director solely present may adjourn any meeting from time to time until a quorum is present. No notice of any adjournment to a later hour on the date originally designated for the holding of a meeting need be given, but immediate telegraphic notice shall be given by the Secretary or other person designated by him to perform this duty to all directors of any adjournment to any subsequent date, and such notice shall be deemed sufficient, though less than the notice required by Section 3 if such meeting be an adjourned regular meeting of the Board, or by Section 4 if such meeting be an adjourned special meeting of the Board. 3 6. Committees. The Board of Directors may by resolution or resolutions passed by a majority of the whole Board designate one or more committees, each committee to consist of three or more of the directors, which, to the extent provided in said resolution or resolutions, shall have and may exercise powers of the Board of Directors in the management of the business and affairs of the Company and may have power to authorize the seal of the Company to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. All committees so appointed shall keep regular minutes of the business transacted at their meetings. 7. Salaries. Directors, as such, shall not receive any stated salary for their services, but by resolution of the Board may receive an annual retainer and, in addition, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting, or adjourned session thereof, of the Board; provided that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of committees may be allowed such compensation as may be fixed from time to time by the Board for attending committee meetings. 8. Resignation. Any director may, at any time, resign, such resignation to take effect upon receipt of written notice thereof by the President or the Secretary, unless otherwise stated in the resignation. 9. Telephonic Meetings. One or more directors may participate in a meeting of the Board of Directors, or a committee designated pursuant to Section 6 of this Article III, by a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear and speak to each other. Participation in a meeting pursuant to this provision shall constitute actual attendance at such meeting. ARTICLE IV OFFICERS 1. Appointment. The Board of Directors at its first meeting after the Annual Meeting of Stockholders, or as soon as practicable after the election of directors in each year, may appoint from their number a Chairman of the Board and one or more Vice Chairmen of the Board. The Board of Directors shall appoint a President, a Secretary and a Treasurer and may also appoint one or more Vice Presidents, none of whom need be members of the Board, and may from time to time appoint such other officers as they may deem proper. Any two of the aforesaid offices, except those of President and Vice President, or President and Secretary, may be filled by the same person. The compensation of all officers of the Company shall be fixed by the Board. 2. Term of Office. The officers of the Company shall hold office at the pleasure of the Board of Directors. Any officer elected or appointed by the Board may be removed from office at any time for or without cause by the affirmative vote of a majority of the whole Board of Directors. Any officer may resign his office at any time, such resignation to take effect upon receipt of written notice thereof by the Company, unless otherwise stated in the resignation. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board. 4 3. The Chairman of the Board. The Chairman of the Board shall be the chief executive officer of the Company. He shall preside at all meetings of the Board of Directors and all meetings of the stockholders. He shall have final authority subject to the control of the Board of Directors over the general policy and business of the Company, and shall have such other powers and duties as may from time to time be prescribed by the Board of Directors. 4. The Vice Chairman of the Board. Each Vice Chairman of the Board shall have such powers and duties as may from time to time be prescribed by the Board of Directors or by the Chairman of the Board. In the absence or inability to act of the Chairman of the Board, a Vice Chairman of the Board, in order of seniority or priority established by the Board, shall preside at all meetings of the Board of Directors and all meetings of the stockholders. 5. The President. The President shall be the chief operating officer of the Company and as such shall have the general control and management of the business and affairs of the Company subject, however, to the control of the Chairman of the Board. The President shall have the power, subject to the control of the Chairman of the Board, to appoint or discharge and to prescribe the duties and to fix the compensation of such agents and employees of the Company as he may deem necessary. He shall have, as does the Chairman of the Board, the authority to make and sign bonds, mortgages and other contracts and agreements in the name and on behalf of the Company, except when the Board of Directors by resolution instructs the same to be done by some other officer or agent. He shall see that all orders and resolutions of the Board of Directors are carried into effect and shall perform all other duties necessary to his office or properly required of him by the Board of Directors, subject, however, to the right of the directors to delegate any specific powers, except such as may by statute be exclusively conferred upon the President, to any other officer or officers of the Company. In the absence or inability to act of the Chairman of the Board, the President shall have the duties prescribed for the Chairman of the Board subject, however, to Section 4 of this Article IV. 6. Vice Presidents. Each Vice President shall have such powers and perform such duties as may be assigned to him from time to time by the Chairman of the Board or the President. 7. The Secretary. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President. He shall keep in safe custody the seal of the Company and shall see that it is affixed to all documents, the execution of which, on behalf of the Company, under its seal, is necessary or proper, and when so affixed may attest the same. 8. The Treasurer. The Treasurer shall, if required by the Board of Directors, give a bond for the faithful discharge of his duties in such amount and with such surety or sureties as the Board of Directors may determine; the cost of any such bond, and any expenses incurred in connection therewith, shall be borne by the Company. He shall have the custody of the corporate funds and securities, except as otherwise provided by the Board, and shall cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositaries as may be designated by the Board of Directors. He 5 shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and the directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. 9. Duties of Officers may be Delegated. In the case of the absence of any officer, or for any other reason that the Board may deem sufficient, the President or the Board may delegate for the time being the powers or duties of such officer to any other officer or to any director. ARTICLE V STOCK CERTIFICATES 1. Issuance of Stock Certificates. The Capital Stock of the Company shall be represented by certificates signed by the Chairman or the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and sealed with the seal of the Company. Such seal may be a facsimile, engraved or printed and where any such certificate is signed by a transfer agent or transfer clerk and by a registrar the signatures of any officers appearing thereon may be facsimiles, engraved or printed. 2. Lost Stock Certificates. The Board of Directors may by resolution adopt, from time to time, such regulations concerning the issue of any new or duplicate certificates for lost, stolen or destroyed stock certificates of the Company as shall not be inconsistent with the provisions of the laws of the State of New York as presently in effect or as they may hereafter be amended. 3. Transfers of Stock. Transfers of stock shall be made only on the stock transfer books of the Company, and, except in the case of any such certificate which has been lost, stolen or destroyed, in which case the resolutions of the Board then in effect respecting lost, stolen or destroyed stock certificates shall be complied with, such transfer shall only be made upon surrender to the Company of a certificate for shares for cancellation duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer. Upon the issue of a new certificate to the person entitled thereto, the Company shall cancel the old certificate and record the transaction upon its books. 4. Regulations. Except to the extent that the exercise of such power shall be prohibited or circumscribed by these By-laws, by the Certificate of Incorporation, or other certificate filed pursuant to law, or by statute, the Board of Directors shall have power to make such rules and regulations concerning the issuance, registration, transfer and cancellation of stock certificates as it shall deem appropriate. 6 ARTICLE VI SEAL The seal of the Company shall be circular in form, shall bear the legend: "The New York Times Company-1851 Inc. 1896" and shall contain in the center the letters NYT. ARTICLE VII CHECKS All checks or demands for money and notes of the Company shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. ARTICLE VIII BOOKS OF ACCOUNT AND STOCK BOOK The Company shall keep at its principal office correct books of account of all its business and transactions. A book to be known as the stock book, containing the names alphabetically arranged, of all persons who are stockholders of the Company, showing their places of residence, the number of shares of stock held by them respectively, the times when they respectively became the owners thereof, and the amount paid thereon, shall be kept at the principal office of the Company or its transfer agent. ARTICLE IX FISCAL YEAR The fiscal year of the Company shall be the calendar year unless otherwise provided by the Board of Directors. ARTICLE X VOTING SECURITIES Unless otherwise ordered by the Board of Directors, the President, or, in the event of his absence or inability to act, the Vice Presidents, in order of seniority or priority established by the Board or by the President, unless and until the Board shall otherwise direct, shall have full power and authority on behalf of the Company to attend and to act and to vote, or to execute in the name and on behalf of the Company a proxy authorizing an agent or attorney-in-fact for the Company to attend and to act and to vote at any meetings of security holders of corporations in which the Company may hold securities, and at such meetings he or his duly authorized agent or attorney-in-fact shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner thereof the Company might have possessed and exercised, if present. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. ARTICLE XI INDEMNIFICATION 1. Directors and Officers. The Company shall, to the fullest extent permitted by applicable law as the same exists or may hereafter be in effect, indemnify any person who is or was made or threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or 7 any other entity, which any director or officer of the Company is serving, has served or has agreed to serve in any capacity at the request of the Company, by reason of the fact that such person or such person's testator or intestate is or was or has agreed to become a director or officer of the Company, or is or was serving or has agreed to serve such other corporation, partnership, joint venture, trust, employee benefit plan or other entity in any capacity, against judgments, fines, amounts paid or to be paid in settlement, taxes or penalties, and costs, charges and expenses, including attorneys' fees, incurred in connection with such action or proceeding or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated or (ii) he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled. 2. Non-Exclusivity. Nothing contained in this Article XI shall limit the right to indemnification and advancement of expenses to which any person would be entitled by law in the absence of this Article, or shall be deemed exclusive of any other rights to which such person seeking indemnification or advancement of expenses may have or hereafter may be entitled under law, any provision of the Certificate of Incorporation, or By-laws, any agreement approved by the Board of Directors, or a resolution of stockholders or directors; and, the adoption of any such resolution or entering into of any such agreement approved by the Board of Directors is hereby authorized. 3. Continuity of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article XI shall (i) apply with respect to acts or omissions occurring prior to the adoption of this Article XI to the fullest extent permitted by law and (ii) survive the full or partial repeal or restrictive amendment hereof with respect to events occurring prior thereto. ARTICLE XII INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY A director or officer of the Company shall not be disqualified by his office from dealing or contracting with the Company either as a vendor, purchaser or otherwise, nor shall any transaction or contract of the Company be void or voidable by reason of the fact that any director or officer or any firm of which any director or officer is a member or any corporation of which any director or officer is a shareholder, officer or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved either (1) by a vote of a majority of a quorum of the Board of Directors, without counting in such majority or quorum any director so interested or member of a firm so interested, or a shareholder, officer or director of a corporation so interested, or (2) by the written consent, or by the vote at any stockholders' meeting of the holders of record of a majority of all the outstanding shares of stock of the Company entitled to vote on such transaction or contract; nor shall any director or officer be liable to account to this Company for any profits realized by or from or through any such transaction or contract of the Company authorized, ratified or approved as aforesaid by reason of the fact that he, or any firm of which he is a member or any corporation of which he is a shareholder, officer or director, was interested in such transaction or contract. Nothing herein contained shall create liability in the events above described or prevent the authorization, ratification or approval of such transactions or contracts in any other manner permitted by law. ARTICLE XIII NOTICES Whenever, under the provisions of these By-laws, notice is required to be given to any director, officer, or stockholder, it shall not be construed to mean personal notice, but unless otherwise expressly stated in these By-laws, such notice may be given in writing by depositing the same in a post office or letter box in a postpaid sealed wrapper, addressed to such stockholder, officer or director, at such 8 address as appears on the books of the Company, and such notice shall be deemed to have been given at the time when the same was thus mailed. ARTICLE XIV AMENDMENT These By-laws may be amended, altered, changed, added to or repealed by a majority vote of all the Class B Common Stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided that such amendments are not inconsistent with any provisions of the Company's Certificate of Incorporation. The Board of Directors, at any regular or at any special meeting, by a majority vote of the whole Board, may amend, alter, change, add to or repeal these By-laws, provided that such amendments are not inconsistent with any provisions of the Company's Certificate of Incorporation, and provided further that if any By-law regulating an impending election of directors is adopted or amended or repealed by the Board, there shall be set forth in the notice of the next stockholders meeting for the election of directors the By-laws so adopted or amended or repealed, together with a concise statement of the changes made. 9 EX-9.1 4 GLOBE VOTING TRUST VOTING TRUST AGREEMENT dated as of October 1, 1993 by and among the stockholders of The New York Times Company (the "Company") who execute this Agreement (the "Holders") and William O. Taylor, Charles H. Taylor, Benjamin B. Taylor, Alexander B. Hawes, Jr. and Davis Taylor Pillsbury (collectively, with their successors in trust, the "Voting Trustees"), amending, restating and extending the Taylor Voting Trust dated as of October 1, 1954, as heretofore amended. RECITALS 1. This Agreement may from time to time be referred to as the "Globe Voting Trust." 2. All the initial Holders were indirect stockholders of Affiliated Publications, Inc. ("API"), prior to the merger of a subsidiary of the Company into API, by reason of their participation in the Taylor Voting Trust. 3. On October 1, 1993, the Taylor Voting Trust became entitled to receive shares of Class A Common Stock of the Company ("Class A Stock") upon the merger of the subsidiary of the Company into API. 4. The Holders are unanimously of the opinion that, throughout the term of this Agreement, the operation of this Agreement in accordance with its terms (i) would assure the voting of shares of Class A Stock deposited hereunder ("Deposited Stock") as a unit for the election of a Board of Directors of the Company and on other matters as provided herein, (ii) would be conducive to safe and prudent management of the Company, (iii) would support the current emphasis of the Company on maintaining the independence and editorial excellence of its newspaper properties, including The Boston Globe, and a long-term corporate perspective for the benefit of its shareholders, employees, communities, suppliers and readers and (iv) would be in the interests of all the Holders and also in the interests of the beneficial -2- owners of any such additional shares of Class A Stock as may be deposited hereunder. 5. API shares were also held by the Jordan Voting Trust pursuant to a Voting Trust Agreement dated as of January 29, 1987, as amended, established by the trustees of the Jordan Trust created pursuant to the Will of Eben D. Jordan. Such API shares have also been converted into Class A Stock. When the Jordan Voting Trust and the Jordan Trust terminate on January 16, 1996 in accordance with their terms, the beneficiaries of the Jordan Trust who receive shares of Class A Stock upon the liquidation of the Jordan Trust will be offered the opportunity to deposit their holdings of Class A Stock with the Voting Trustees under this Agreement. 6. The terms "Deposited Stock" and "Class A Stock" and words of similar import wherever appearing in this Agreement shall be taken to be synonymous and to mean and include any voting stock of the Company (other than Class B Common Stock of the Company), or of any entity which is a successor of the Company or which may from time to time be issued with respect to or in exchange for any voting stock held by the Voting Trustees hereunder or into which any such voting stock may be changed as a result of any reorganization, merger, recapitalization or similar transaction. The term "Company" wherever appearing in this Agreement shall be taken to mean and include the issuer of any voting stock held hereunder for the time being as "Deposited Stock." 7. "Taylor Descendant" means a descendant by blood or adoption of Charles H. Taylor, first Treasurer of Globe Newspaper Company, a spouse of such descendant or a trustee or trustees holding for the benefit of any such descendant or descendants or for the benefit of a spouse of any such descendant or descendants or a stock corporation all the voting stock of which is owned by the foregoing. 8. "Jordan Descendant" means a descendant by blood or adoption of Eben D. Jordan, a spouse of such descendant or a trustee or trustees holding for the benefit of any such descendant or descendants or for the benefit of a spouse of any such descendant or descendants or a stock corporation all the voting stock of which is owned by any of the foregoing. NOW, THEREFORE, in consideration of the premises and of the agreements herein contained and for other good and valuable consideration, receipt of all of which consideration is hereby acknowledged, the parties hereto amend, restate and extend the Taylor Voting Trust so that it reads in its entirety as follows: 1. Initial Interests in the Voting Trust. The ------------------------------------------- interest of each Holder is set forth in Schedule A and shall -------- - -3- be reflected in transfer records maintained by the Voting Trustees, periodic reports of which will be sent to the Holder. Only if a Holder expressly requests that his interest be represented by a certificate shall the Voting Trustees issue to the Holder a Voting Trust Certificate, registered in the name of that Holder. Certificates issued under the Taylor Voting Trust are no longer valid and should be destroyed. 2. Subsequent Deposits and Interests. The Voting ------------------------------------ Trustees shall accept transfer and delivery to them of additional shares of Class A Stock from any Taylor Descendant and from any Jordan Descendant who shall have executed a copy of this Agreement. The interest of each person who so becomes a Holder shall be reflected in the Voting Trustees' transfer records. Only if such a Holder expressly so requests shall the Voting Trustees issue a Voting Trust Certificate. The Voting Trustees shall prepare a revised Schedule A adding the name and address of each new Holder and -------- - the number of additional shares of Class A Stock so transferred. All such additional shares shall be held by the Voting Trustees hereunder in accordance with and subject to the provisions of this Agreement. 3. Voting. The Voting Trustees shall vote all shares ------ of Deposited Stock as the holders of record of such shares as follows: (a) With respect to any shares of Class A Stock deposited by any stockholder who is a party to the Stockholders Agreement dated June 11, 1993 among the Company and certain of the Stockholders (the "Stockholders Agreement"), as required by Section 3.6 of the Stockholders Agreement for so long as the provisions of such Section 3.6 shall apply. (b) On any question of selling, mortgaging, leasing or otherwise disposing of substantially all the assets or dissolving, merging or consolidating the Company not governed by paragraph (a) of this Section 3, in accordance with the written instructions of the Holder with respect to his or her shares of Deposited Stock. (c) On all other matters, including the election of directors of the Company, as recommended by the Board of Directors of the Company. 4. Disposition of Deposited Stock by Voting Trustees. --------------------------------------------------- The Voting Trustees shall not pledge, mortgage, sell or otherwise dispose of any of the Deposited Stock or any interest therein, provided, however, that if any transaction requires the exchange or conversion of Deposited Stock, the -4- Voting Trustee may surrender the Deposited Stock and receive distribution in respect thereof in accordance with the terms of the transaction and provided, further, that any dissenters' appraisal rights in respect of any such transaction shall be exercised by the Voting Trustees on behalf of any Holder in accordance with the instructions of that Holder at the Holder's expense and provided, further, that the Voting Trustees will exercise no right of dissent with respect to any transaction approved in accordance with Section 3.6 of the Stockholders Agreement. 5. Transfer of Deposited Stock to Other Holders, Other ---------------------------------------------- ----- Taylor Descendants and Other Jordan Descendants. Any Holder ------------------------------------------------ may at any time and from time to time transfer his or her interest in any shares of Deposited Stock to any other Holder, whether by gift or by sale. Any Holder may at any time and from time to time transfer his or her interest in any shares of Deposited Stock to any other Taylor Descendant or Jordan Descendant, whether by gift, by bequest or by sale, and each recipient of an interest shall be conclusively deemed to have assented to all the terms of this Agreement as fully as though the recipient had executed a copy of this Agreement as a Holder. Promptly after receiving advice of any such transfer, the Voting Trustees shall correct Schedule -------- A. - 6. Withdrawal of Deposited Stock for Sale by a Holder. --------------------------------------------------- A Holder may withdraw shares of Deposited Stock for the purpose of selling them either to the Company or in a broker's transaction, subject to the limitations set forth in this Section 6. No Holder may withdraw in any calendar year more than 20% of the total number of shares of Deposited Stock deposited by or for him or her from time to time, computed without deducting withdrawals in prior calendar years. In the event that the value of any interest in shares of Deposited Stock is taxed to any person, estate or trust by reason of the death of any person, the 20% limitation shall not apply to the Holder or Holders of such interest, who shall be limited instead, in the aggregate, to the number of shares the sale of which will generate funds in the amount of the taxes and expenses arising by reason of such person's death, whether or not attributable to the value of an interest in Deposited Stock. Any Holder desiring to sell up to and including 1,000 shares of Deposited Stock in any calendar year may do so in one or more broker's transactions. Any Holder desiring to sell more than 1,000 shares in any year must first offer to sell the excess shares to the Company at the average closing price of Class A Stock on the largest exchange on which it is listed over the ten trading days preceding the date of the offer. Notice of the offer shall be sent to the Company at 229 West 43rd Street, New York, New York 10036, Attention: Secretary. If the Company shall not have accepted the offer within ten calendar -5- days, the Holder may sell the excess withdrawn shares in one or more broker's transactions. If the sales shall not have been completed within six months after the withdrawal, the shares shall once again become Deposited Stock. 7. Withdrawal of Deposited Stock for Charitable ---------------------------------------------------- Contribution. A Holder may withdraw any number of shares for ------------ contribution to any corporation, trust of community chest, fund or foundation, gifts to which are deductible under Section 170(c)(2) of the Internal Revenue Code of 1986 or any successor provisions thereto. If the contribution shall not have been completed within six months after the withdrawal, the remaining shares shall once again become Deposited Stock. 8. Compensation and Expenses. The Voting Trustees --------------------------- shall serve without compensation. Each Voting Trustee shall be entitled to reimbursement from the assets held by them under this Agreement for such reasonable out-of-pocket expenses as he may incur and as are reasonably incident to the performance of his duties hereunder. 9. Dividends and Other Distributions. From all ------------------------------------- dividends or other cash distributions received from the Company by the Voting Trustees as record holders hereunder of Deposited Stock, the Voting Trustees may deduct such sums as may be required to pay any and all reasonable expenses incurred by the Voting Trustees in the administration of this Voting Trust Agreement. After such deductions, the Voting Trustees shall forthwith pay to the Holders, in proportion to their beneficial interest in the Deposited Stock, the entire balance of the dividends and other cash distributions so received by the Voting Trustees. Dividends and other distributions received by the Voting Trustees in respect of Deposited Stock in the form of voting stock of the Company shall be held by the Voting Trustees as additional Deposited Stock. Any other distributions of securities or property shall be distributed by the Voting Trustees pro rata to the Holders. In case the Company should grant to its stockholders the right to subscribe to any securities, such rights will be granted by the Voting Trustees pro rata to the Holders, provided, however, that if such rights relate to securities which would constitute Deposited Stock, such rights may be exercised through the Voting Trustees only, with funds provided by the respective Holders and the securities so purchased will be retained hereunder as additional Deposited Stock. If the Voting Trustees are required to pay over to any government any withholding tax, they may deduct the amount so required to be paid over from cash distributions received and, if such distributions are insufficient for the purpose, the Holders agree to deliver to the Voting Trustees such amounts as they may require for the purpose. -6- 10. Termination. This Voting Trust Agreement (a) shall ----------- terminate on September 30, 2003, (b) may be terminated on any earlier date as may be fixed in a written notice to the Voting Trustees signed by the Holders of Voting Trust Certificates representing 66-2/3% of the Deposited Stock delivered to the Voting Trustees at least 30 calendar days prior to the termination date so fixed in such notice and (c) may be terminated on any earlier date by unanimous declaration of the Voting Trustees made by written notice addressed to the Holders at least 15 calendar days prior to the date of expiration fixed in such declaration. Upon termination of this Voting Trust Agreement, the Holders who hold certificates shall promptly surrender their certificates to the Voting Trustees for cancellation, and the Voting Trustees shall cause to be delivered to the Holders certificates for the Deposited Stock. 11. Resignation and Replacement. Any Voting Trustee ----------------------------- may resign at any time by delivering to the remaining Voting Trustees and to the Company his written resignation, to take effect at the time of delivery. If any Voting Trustee shall die or resign before any Jordan Descendants shall have become Holders, the then remaining Voting Trustees shall elect a successor Voting Trustee from among Taylor Descendants. When any Jordan Descendant shall have become a Holder, three of the Voting Trustees shall resign. Two of the positions shall be filled by the Holders who are Jordan Descendants, voting as a class (in proportion to their interests in the Globe Voting Trust) for Jordan Descendants; and the remaining position (the "Fifth Trustee") shall be filled by the executive of Globe Newspaper Company, if any, who is a director of the Company or, if none, by vote of the other four Voting Trustees. Thereafter, any vacancy caused by death or resignation of a Voting Trustee who is a Taylor Descendant (but not the Fifth Trustee) shall be filled by the Holders who are Taylor Descendants, voting as a class for a Taylor Descendant, any vacancy caused by the death or resignation of a Voting Trustee who is a Jordan Descendant (but not the Fifth Trustee) shall be filled by the Holders who are Jordan Descendants, voting as a class for a Jordan Descendant, and any vacancy caused by the death or resignation of the Fifth Trustee shall be filled in the same manner as the vacancy filled by election of the original Fifth Trustee. Each and every power granted to a Voting Trustee under this Voting Trust Agreement shall vest in each and every successor Voting Trustee immediately upon his or her appointment and acceptance of said office. Each successor Voting Trustee shall be deemed to have accepted said office upon delivery of a writing to that effect to the remaining Voting Trustees and to the Company. 12. Standards of Conduct. In voting or consenting or -------------------- taking or failing to take any action with respect to the -7- Deposited Stock, the Voting Trustees shall exercise their best judgment with respect to the proper management of the Company and the best interests of the Holders, but it is understood and agreed that no Voting Trustee incurs any liability as Voting Trustee hereunder, except for his own individual malfeasance, and no Voting Trustee shall be responsible for the acts or omissions of any other Voting Trustee hereunder. The Voting Trustees may vote any shares of Deposited Stock held by them in their own interests in each case without any liability to account. The Voting Trustees or any firms of which they may be members or any corporations of which they may be stockholders, directors, officers or counsel may enter into any contract or financial arrangements with, or be pecuniarily interested in any matter or transaction with, the Company as fully as though the Voting Trustees were not Voting Trustees hereunder. 13. Proof of Authority of Voting Trustees. No person -------------------------------------- dealing with the Voting Trustees or their agents shall be bound to make any inquiry concerning the authorization or validity of any act purporting to be done by the Voting Trustees or their agents. Any certificate signed by the Voting Trustees shall be conclusive evidence of the matters contained therein in favor of all persons acting in good faith in reliance thereon. 14. Notices. All notices to Holders shall be given by ------- mail at the address furnished by the Holders to the Voting Trustees. All notices to the Voting Trustees shall be c/o Bingham, Dana & Gould, 150 Federal Street, Boston, Massachusetts 02110, Attention: Director of Fiduciary Services. 15. Amendments. This Agreement may be amended at any ---------- time by a written instrument executed by all of the Voting Trustees then acting and consented to in writing by the Holders of interests in two-thirds or more of the Deposited Stock. 16. Securities Law Representation and Transfer ---------------------------------------------------- Restriction. Each Holder represents and warrants to the ----------- Voting Trustees that the Holder's interest in the Voting Trust is being acquired for the Holder's own account for investment only and not with a view to any resale or distribution thereof, and each Holder agrees that no interest in the Globe Voting Trust may be sold or otherwise disposed of in violation of the Securities Act of 1933, as amended. The Holder understands that the Holder's interest must be held indefinitely unless transfers are made in compliance with applicable law and understands that any certificate that may be issued to evidence the Holder's interest in the Globe Voting Trust will bear the following restrictive legend: -8- "This security has not been registered under the Securities Act of 1933 and may not be sold, assigned or otherwise transferred in the absence of an effective registration statement under that Act or an opinion of counsel satisfactory to the issuer that registration under that act is not required." 17. Acceptance of Trust. The Voting Trustees hereby -------------------- accept the trust created hereby and agree that they will in good faith in all respects exercise the powers granted to them hereunder or accruing to them by reason of the ownership of Deposited Stock in trust as herein provided. 18. No Action Inconsistent with Stockholders Agreement. --------------------------------------------------- Notwithstanding the express provisions of Sections 5, 6, 7 and 15 of this Agreement, transfer of interests in Deposited Stock and transfer of Deposited Stock will at no time be made by any Holder bound by the Stockholders Agreement in violation of any of the provisions of the Stockholders Agreement. 19. Counterparts. This Agreement may be signed in any ------------ number of counterparts, with Holders signing separate counterparts; and all counterparts taken together shall constitute a single instrument. IN WITNESS WHEREOF, the Voting Trustees and the Holders have caused this Voting Trust Agreement to be executed and delivered on the date first written above. s/ William O. Taylor s/ Alexander B. Hawes, Jr. ----------------------------- ----------------------------- William O. Taylor Alexander B. Hawes, Jr. s/ Charles H. Taylor s/ Davis Taylor Pillsbury ----------------------------- ----------------------------- Charles H. Taylor Davis Taylor Pillsbury s/ Benjamin B. Taylor ----------------------------- Benjamin B. Taylor Charles H. Taylor ----------------------------- Name of Holder s/ Charles H. Taylor ----------------------------- Signature SCHEDULE A NYTCO SHS DEPOSITED TO: ** GLOBE VOTING TRUST ** 12/29/93 # of NYT A Shs to UNITHOLDER GLOBE VTG TR C H TAYLOR 1993 GLOBE TRUST 199,656 C H TAYLOR GLOBE FAMILY TRUST 248,400 ROSAMOND T DYE REV TRUST 61,531 PAMELA S COTHEY REV TRUST 10,638 CHARLES H TAYLOR 85,560 CHARLES H TAYLOR 88 IRR TRUST 19,440 STEPHEN EMYLIN TAYLOR 10,000 E B TAYLOR STUART 13,230 PAMELA ROGERS WETZELS 127,291 KATRINA WETZELS TRUST 15,921 THOMAS T WETZELS TRUST 15,921 PETER BLACK 1,636 SYLVIA BLACK RIPLEY 20,787 EMILY TAYLOR ANDREWS 460,272 EUNICE T VANDERHOEF TRUST 248,380 ELIZABETH T FESSENDEN TRUST 625,817 LOUISE C RIEMER (MOTHER) 4,708 KARL DAVIS RIEMER 2,760 LOUISE C REIMER (DAUGHTER) 2,760 HENRY F REIMER 2,220 ELIZABETH L RIEMER REECE 2,760 KATHARINE C FEGUSON TRUST 4,708 WILLIAM DAVIS TAYLOR REV TR 289,681 ANNE MACY TAYLOR REV TRUST 26,907 WILLIAM OSGOOD TAYLOR 426 WILLIAM OSGOOD TAYLOR 20,449 WILLIAM OSGOOD TAYLOR 42,970 WILLIAM DAVIS TAYLOR II 499 EDMUND C TAYLOR 180 EDMUND C TAYLOR 630 OLIVIA P HEARFIELD TRUST 387,403 EVANS S PILLSBURY III MAR TRUST 311,318 EVANS S PILLSBURY III RES TR 192,218 TAYLOR PILLSBURY GLOBE TRUST 129,822 ELIZ SCULLY MARCHEWKA 9,570 NYTCO SHS DEPOSITED TO: ** GLOBE VOTING TRUST ** 12/29/93 # of NYT A Shs to UNITHOLDER GLOBE VTG TR MARGARET B TAYLOR FAM TRUST 22,200 BLAKE TAYLOR CHLDRN'S TRUST 184,548 JOHN I TAYLOR REV TRUST 117,734 CARSON TAYLOR 1,338 TIMOTHY B TAYLOR REV TRUST 79,864 DAVID V N TAYLOR REV TRUST 149,662 SHELLEY G HALL-TAYLOR REV TR 30,000 SUSAN D CONNER 1,000 ELIZA TAYLOR 6,676 MATTHEW VAN NESS TAYLOR 6,676 BENJAMIN B TAYLOR REV TRUST 194,312 KATHERINE S TAYLOR REV TRUST 1,338 ABIGAIL TAYLOR 1,781 SAMUEL S TAYLOR 1,781 WILLIAM I TAYLOR 1,781 LITTLE CHILDREN'S TRUST 116,098 ALEXANDER BOYD HAWES TRUST 242,852 ALEXANDER BOYD HAWES 1,330 ELIZABETH SAVAGE WRIGHT 1,526 JOHN WRIGHT 238 MATT. ARMSTRONG HAWES TR 55,384 CHRIS. DeBOUVRY HAWES TRUST 8,533 TOTAL NYTCO SHARES DEPOSITED 4,823,121 --------- --------- EX-10.2 5 EXHIBIT 10.2 The New York Times Company 1991 EXECUTIVE STOCK INCENTIVE PLAN As approved by Class A and Class B Shareholders on April 16, 1991 As amended by the Board of Directors on April 13, 1993 __________________________________________________________________ N Y T THE NEW YORK TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN 1. NAME AND GENERAL PURPOSE The name of this plan is The New York Times Company 1991 Executive Stock Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to enable the Company (as hereinafter defined) to retain and attract executives who enhance its tradition and contribute to its success by their ability, ingenuity and industry, and to enable them to participate in the long-term success and growth of the Company. 2. DEFINITIONS (a) "Awards"--has the meaning specified in Section 12 hereof. (b) "Board"--means the Board of Directors of the Company. (c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan. (d) "Code"--means the Internal Revenue Code of 1986, as amended. (e) "Committee"--means the Committee referred to in Section 3 of the Plan. If at any time no Committee shall be in office then the functions of the Committee specified in the Plan shall be exercised by those members of the Board who are Disinterested Persons. (f) "Common Stock"--means shares of the Class A Common Stock of the Company. (g) "Company"--means The New York Times Company, a corporation organized under the laws of the State of New York (or any successor corporation), and its subsidiaries (as hereinafter defined) and other non-corporate entities in which it owns directly or indirectly 40% or more of the equity interests. A "subsidiary" means any corporation in which the Company possesses directly or indirectly 50% or more of the combined voting power of all classes of stock. (h) "Consolidated Statement of Income"--means the consolidated statement of income (or any comparable statement, however designated) of the Company, audited by the independent certified public accountants of the Company and contained in the Company's annual report to stockholders or proxy statement. (i) "Disability"--means total disability as defined under the Company's long term disability plan, whether or not the Participant is covered by such plan, as determined by the Committee. (j) "Disinterested Person"--means any Director of the Company who at the time of acting is a "disinterested person" under Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (k) "Equity in Operations of Forest Products Group"--means the amount designated as Equity in Operations of the Forest Products Group for the applicable year and shown separately in the Consolidated Statement of Income for such year. (l) "Fair Market Value"--means the arithmetic mean of the highest and lowest sales prices of the Common Stock as reported in the Consolidated Transactions of the American Stock Exchange ("AMSE") (or such other national securities exchange on which the Common Stock may be listed at the time of determination, and if the Common Stock is listed on more than one exchange, then on the one located in New York or if the Common Stock is listed only on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), then on such system) on the date of the grant or other date on which the Common Stock is to be valued hereunder. If no sale shall have been made on the AMSE, such other exchange or the NASDAQ on such date or if the Common Stock is not then listed on 1 any exchange or on the NASDAQ, Fair Market Value shall be determined by the Committee in accordance with Treasury Regulations applicable to incentive stock options. (m) "Participant"--means a key employee of the Company who is selected by the Committee to participate in any one or more parts of the Plan from among persons who in the judgment of the Committee are key employees of the Company. In general, key employees are those employees who have principal responsibility for, or who contribute substantially to, the management efficiency, editorial achievement or financial success of the Company. (n) "Pre-Tax Income"--means income before income taxes and Equity in Operations of Forest Products Group, as shown in the Consolidated Statement of Income for the applicable year, but before the amount of any provision for Awards under the Plan and awards under the Cash Plan for such year. (o) "Retirement"--means retirement as defined by the terms of "The New York Times Companies Pension Plan" which became effective December 31, 1988, or any successor retirement plan whether or not the Participant is a member of such retirement plan. 3. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Board or the Committee appointed by it and composed of two or more directors all of whom shall be Disinterested Persons. The membership of the Committee shall be constituted so as to comply at all times with the applicable requirements of Rule 16b-3. The Committee shall serve at the pleasure of the Board and shall have such powers as the Board may from time to time confer upon it. 4. OPTIONS AND AWARDS UNDER THE PLAN Options, which include "Non-Qualified Options" and "Incentive Stock Options" or combinations thereof, are rights to purchase Common Stock of the Company. Non-Qualified Options and Incentive Stock Options are subject to the terms, conditions and restrictions provided in Part I of the Plan. Awards under the Plan may include one or more of the following types, either alone or in any combination thereof: (i) "Stock Awards," (ii) "Restricted Stock Awards," (iii) "Retirement Unit Awards," and (iv) "Performance Awards" or "Other Awards." Stock Awards are granted under Part IIA of the Plan. Restricted Stock Awards are granted under Part IIB of the Plan. Retirement Unit Awards are granted under Part IIC of the Plan. Performance Awards or Other Awards are granted under Part IID of the Plan. Awards are subject to the terms, conditions and restrictions provided in the respective subparts of Part II of the Plan. PART I STOCK OPTIONS. 5. PURPOSE The purpose of the Stock Option portion of the Plan is to provide an added incentive for effective service and high levels of performance to participating key employees of the Company by affording them an opportunity, under the terms of the Plan, to acquire Common Stock and thereby to increase their proprietary interest in the continued progress and success of the Company. 6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS (a) The Committee may grant options to purchase Common Stock ("Options") to key employees of the Company in such amounts as the Committee may determine, subject to the conditions and limitations set forth in the Plan. Options may be granted in combination with Awards made under the Plan, and Options may be granted to any Participant whether or not he or she was eligible for, or received, an Award. 2 (b) There may be issued under the Plan pursuant to the exercise of Options, an aggregate of not more than 10,000,000 shares of Common Stock, subject to adjustment as provided in Sections 28 and 29 hereof. Shares of Common Stock issued pursuant to Options may be either authorized but unissued shares, treasury shares, reacquired shares, or any combination thereof. Any shares subject to an Option which expires without being exercised shall be available for issuance under new Options. 7. OPTION PRICE The exercise price of Common Stock subject to Options granted pursuant to the Plan shall be the Fair Market Value thereof at the time the Option is granted. If a Participant owns or is deemed to be the owner of, by reason of the attribution rules under Section 425(d) of the Code, more than 10% of the combined voting power of all classes of the stock of the Company or any subsidiary of the Company and an Option granted to such Participant is intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code, the option price shall be no less than 110% of the Fair Market Value of the Common Stock on the date the Option is granted. 8. PAYMENT OF OPTION PRICE The purchase price is to be paid in full when the Option is exercised and stock certificates will be delivered only against such payment. Such purchase price may be paid in such form as the Committee may determine. Payment of the option price may be made (i) in cash, (ii) by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price, (iii) by delivering to the Company shares of Common Stock previously owned, (iv) by electing to have the Company retain Common Stock which would be otherwise issued on exercise of the Option, or (v) any combination of the foregoing forms, all subject to the approval of the Committee and to such rules as the Committee may adopt. In determining the number of shares of Common Stock necessary to be delivered to or retained by the Company, such Common Stock shall be valued at Fair Market Value. 9. TYPES OF STOCK OPTIONS (a) Options granted under the Plan may be two types, an incentive stock option ("Incentive Stock Option") and a non-qualified stock option ("Non-Qualified Option"). It is intended that Incentive Stock Options granted hereunder shall constitute incentive stock options within the meaning of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, (i) no provision of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify either the Plan or any Incentive Stock Option granted under such provisions of the Code, and (ii) no Option designated by the Committee as a Non-Qualified Option shall constitute an Incentive Stock Option. In furtherance of the foregoing and not by way of limitation, no Incentive Stock Option shall be granted to a Participant who is not an employee of The New York Times Company or one of its subsidiaries. (b) If the aggregate Fair Market Value of the Common Stock (determined as of the date of grant) for which any optionee may for the first time exercise Incentive Stock Options in any calendar year under the Plan and any other stock option plan of the Company, considered in the aggregate, exceeds $100,000, such excess Incentive Stock Options will be treated as Non-Qualified Options. 10. TERMS OF STOCK OPTIONS (a) Each Option will be for a term of not more than ten years from the date of grant, except that if a Participant owns or is deemed to be the owner of, by reason of the attribution rules of Section 425(d) of the Code, more than 10% of the combined voting power of all classes of stock of the Company or any subsidiary of the Company and an Incentive Stock Option is granted to such Participant, the term of such Option shall be no more than five years from the date of grant. 3 (b) An Option may not be exercised within one year after the date of grant except in the case of the death of the optionee or upon termination of active employment with the Company by reason of the Disability or Retirement of the optionee during such period (but subject to the provisions of Section 18 hereof with respect to any optionee subject to the reporting requirements of Section 16 of the Exchange Act). Thereafter, an Option shall be exercisable in such installments, if any, as the Committee may specify, and shall be exercisable during the optionee's lifetime only by the optionee (or, if the optionee is disabled, by any guardian or other legal representative appointed to represent him or her) and, except as provided in subsections (c) and (d) below, shall not be exercisable by the optionee unless at the time of exercise such optionee is an employee of the Company. (c) Upon termination of active employment with the Company by reason of Disability or Retirement, an optionee (or, if the optionee is disabled, any guardian or legal representative appointed to represent him or her) may exercise all Options otherwise exercisable by him or her at the time of such termination of employment (subject to the provisions of subsection (e) below) until the expiration thereof. In the event an optionee dies while employed by the Company or after termination of employment by reason of Disability or Retirement, the person who acquired the right to exercise his or her Options by reason of the death of the optionee, as provided in Section 30 hereof, may exercise such Options otherwise exercisable at the time of death (subject to the provisions of subsection (e) below) at any time until the expiration thereof. (d) Upon termination of employment with the Company for any reason other than death, Retirement or Disability, the optionee may exercise all Options otherwise exercisable by him or her at the time of such termination of employment for an additional one year after such termination of employment. In the event such optionee dies within such one-year period, the person who acquired the right to exercise his or her Options by reason of the death of the optionee, as provided in Section 30 hereof, may exercise such Options at any time within the period of the greater of (i) the remainder of the one-year period described in the foregoing sentence, or (ii) three months from the date of the optionee's death. (e) Notwithstanding any of the foregoing, no Option shall be exercisable in whole or in part after the expiration date provided in the Option. In the event of the death of the optionee while employed by the Company, or the Disability or Retirement of the optionee, the Committee shall have the discretion to provide for the acceleration of the exercisability of Options exercisable over a period of time, or alternatively, to provide for all or any part of such Options to continue to become exercisable in such installments as originally specified by the Committee, or such revised installments as specified by the Committee at the time of termination of employment (but in no event beyond the original expiration date), in either case subject to such conditions as determined by the Committee in its discretion (but in all cases subject to the provisions of Section 18 hereof with respect to any optionee subject to the reporting requirements of Section 16 of the Exchange Act). No Option shall be transferable otherwise than by will or by the laws of descent and distribution. 11. OPTION AGREEMENTS In consideration of any Options granted to a Participant under the Plan, such Participant shall enter into an Option Agreement with the Company providing, in addition to such other terms as the Committee may deem advisable, that the optionee must remain in the employ of the Company for one year before such optionee will be entitled to exercise the Option, except as provided in Section 10 hereof with respect to death, Disability and Retirement, and specifying the installments, if any, in which such Option shall become exercisable. 4 PART II AWARDS. 12. FORM OF AWARDS The Award portion of the Plan is designed to provide incentives for key employees of the Company by the making of awards of supplemental compensation ("Awards"). The Committee, subject to the terms and conditions hereof, may make Awards to a Participant in any one, or in any combination, of the following forms: (a) Common Stock as provided in Part IIA of the Plan ("Stock Awards"); (b) Restricted Stock as provided in Part IIB of the Plan ("Restricted Stock Awards"); (c) Retirement Units as provided in Part IIC of the Plan ("Retirement Unit Awards"); and (d) Performance Awards ("Performance Awards") or other forms of Awards ("Other Awards") as provided in Part IID of the Plan. Awards may be made to a Participant whether or not he or she is receiving an Option grant under Part I of the Plan for the year and whether or not he or she receives an award under the Cash Plan. Awards will be based on a Participant's performance in those areas for which the Participant is directly responsible. Performance for this purpose may be measured by the achievement of specific management goals such as, but not limited to, an increase in earnings or the operating cash flow of the Company, outstanding initiative or achievement in any department of the Company, or any other standards specified by the Committee. 13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER PART II OF THE PLAN FOR ANY YEAR (a) No accrual for Awards shall be made hereunder (or under the Cash Plan) for any year unless cash dividends of not less than ten cents ($.10) per share (subject to adjustment as provided in Sections 28 and 29 hereof) have been declared on the outstanding Class A and Class B Common Stock of the Company during such year. (b) In the event that the above condition is met for any year during the continuance of this Plan, the maximum aggregate amount that may be accrued for Awards under the Plan and the Cash Plan for such year shall be 4% of the sum of: (1) Pre-Tax Income plus (2) Equity in Operations of Forest Products Group. The Committee, in its sole discretion, may make adjustments in Pre-Tax Income and Equity in Operations of Forest Products Group to take account of extraordinary, unusual or infrequently occurring events and transactions, changes in accounting principles that substantially affect the foregoing, or such other circumstances as the Committee may determine warrant such adjustment. (c) As soon as feasible after the close of each year, the independent certified public accountants of the Company shall report the maximum amount that may be accrued for Awards for such year under the formula described in Section 13(b), subject to the second sentence of such Section. (d) If amounts are accrued in any year under the formula described in this Section 13 and are not awarded in full in such year under the Plan and the Cash Plan, such unawarded amounts may, in the discretion of the Committee, be carried forward and be available for Awards under the Plan and under the Cash Plan in any future year without regard to the provisions of Sections 13(a) or (b) of the Plan applicable to Awards made in such year. (e) Awards under the Plan for any year may not exceed the sum of (i) the amount accrued for such year under Section 13(b) above plus (ii) unawarded accrued amounts carried forward from previous years under Section 13(d) above plus (iii) amounts that may become available for Awards pursuant to the last sentence of Section 15(c) hereof, minus (x) the amount of interest or dividend equivalents set aside during such year pursuant to Section 15(c) hereof and the amount of dividend equivalents allocated to Retirement Unit Accounts during such year pursuant to Section 24 hereof, and minus (y) 5 the amount of awards made for such year under the Cash Plan (and any interest equivalents allocated during such year pursuant to Section 10(b) thereof). For this purpose, the amount of Awards of Common Stock under the Plan shall be based on the Fair Market Value of the Common Stock subject to Awards as of the date of grant of such Awards. (f) Subject to Sections 28 and 29 hereof, the aggregate number of shares of Common Stock for which Stock, Restricted Stock, Retirement Units, Performance and Other Awards may be made under the Plan shall not exceed 1,000,000 shares, which shall be treasury shares reserved for issuance of Awards under the Plan. Shares of Common Stock subject to, but not issued under, any deferred Award which has been discontinued by the Committee pursuant to the provisions hereof or any Restricted Stock which is forfeited by any Participant shall again be available for Awards under the Plan. 14. DETERMINATION OF AWARDS AND PARTICIPANTS (a) As promptly as practicable after the end of each year, the Committee may make Awards for such year and determine the amounts to be carried forward for Awards in future years. The Committee may also, in its discretion, make Awards prior to the end of the year based on the amounts available under clauses (ii) and (iii) of Section 13(e) and reasonable estimates of the accrual for the year in question. (b) The Committee shall have absolute discretion to determine the key employees who are to receive Awards under the Plan for any year and to determine the amount of such Awards based on such criteria and factors as the Committee in its sole discretion may determine, such as the Company's operating cash flow and overall financial performance. Recommendations as to the key employees who are to receive Awards under the Plan for any year and as to the amount and form of such Awards shall, however, be made to the Committee by the chief executive officer of the Company. The fact that an employee is selected as eligible for an Award shall not mean, however, that such employee will necessarily receive an Award. (c) A person whose employment terminates during the year or who is granted a leave of absence during the year may, in the discretion of the Committee and under such rules as the Committee may from time to time prescribe, be given an Award with respect to the period of such person's service during such year. 15. METHOD AND TIME OF PAYMENT OF AWARDS (a) Awards shall be paid in full as soon as practicable after the Award is made; provided, however, that the payment of any or all Awards may be deferred, divided into annual installments, or made subject to such other conditions as the Committee in its sole discretion may authorize under such rules and regulations as may be adopted from time to time by the Committee. (b) The Committee's rules and regulations may include procedures by which a Participant expresses a preference to the Committee as to the form of Award or method of payment of an Award but the final determination as to the form and the terms and conditions of any Award shall rest solely with the Committee. (c) Awards deferred under the Plan shall become payable to the Participant or, in the event of the Participant's death, as specified in Section 30 hereof, in such manner, at such time or times (which may be either before or after Retirement or other termination of service), and subject to such conditions as the Committee in its sole discretion shall determine. In any year the Committee shall have the discretion to set aside, for payment in such year or any future year, interest on any deferred Award payable partly in cash, and amounts equivalent to dividends on any deferred Award payable wholly or partly in stock; provided, however, that the total amount of such interest and dividend equivalents shall be deducted from the maximum amount available for Awards under Section 13(e) of the Plan. Any forfeited deferred Awards (including any forfeited stock at its Award value) shall be carried forward and be 6 available for Awards in any future year without regard to the provisions of Sections 13(a) or (b) of the Plan. 16. INDIVIDUAL AGREEMENTS (a) The Committee may in its discretion require that each Participant receiving an Award enter into an agreement with the Company which shall contain such terms and conditions as the Committee in its discretion may require. (b) The Committee may cancel any unexpired, unpaid or deferred Award at any time if the Participant is not in compliance with all applicable provisions of the agreement referred to above, if any, and the Plan. 17. STATUS OF PARTICIPANTS No Participant in this Plan shall be deemed to be a stockholder of the Company, or to have any interest in any stock or any specific assets of the Company by reason of the fact that deferred Stock Awards, Retirement Unit Awards, Performance Awards, Other Awards or dollar credits are to be recorded as being held for such Participant's account to be paid in installments in the future. The interest of all Participants shall derive from and be determined solely by the terms and provisions of the Plan set forth herein. 18. DISPOSITION OF STOCK RECEIVED UNDER AN AWARD; SECTION 16(B). In the case of any Participant subject to the reporting requirements of Section 16 of the Exchange Act, no shares of Common Stock received pursuant to any Award under the Plan or upon the exercise of any "derivative security" (as defined in the rules promulgated under Section 16 of the Exchange Act) received under the Plan may be sold, assigned, pledged or otherwise transferred for the period of time after the date of such Award or receipt of such derivative security as is specified in Rule 16b-3. PART IIA STOCK AWARDS. 19. DETERMINATION OF STOCK AWARDS (a) Each year the Committee shall designate those key employees of the Company who shall receive Stock Awards under this part of the Plan. Stock Awards are made in the form of grants of Common Stock, which may be delivered immediately, in installments or on a deferred date, as the Committee, in its discretion, may provide. (b) If the Committee determines that some portion of a Stock Award to a Participant shall be treated as a deferred Stock Award and payable in annual or other periodic installments, then the Participant will be notified in writing when such deferred Stock Awards shall be paid and over what period of time. As soon as feasible after the granting of such a Stock Award, there shall be reserved out of the treasury shares of the Company, a number (which may include a fraction) of shares of Common Stock equal to the number of shares of Common Stock so awarded. In each year at the discretion of the Committee there may also be allocated or credited to each Participant a dollar amount equal to the cash dividends declared and paid by the Company on its Common Stock which the Participant would have received had such Participant been the owner of the number of shares of any Common Stock deferred for future payment. Any amounts provided for pursuant to the preceding sentence shall become payable in such manner, at such time or times, and subject to such conditions (which may include provision for an amount equivalent to interest on such dividend equivalents at rates fixed by the Committee) as the Committee in its sole discretion shall determine; provided, however, that the total value of such dividend equivalents (and any interest thereon) shall be deducted from the amount available for Awards under the provisions of Section 13(e) of the Plan. The Committee in its discretion may make appropriate equitable adjustments to such deferred Stock Award to account for any dividends of property (other 7 than cash) declared and paid by the Company on its Common Stock, or to account for any other event described in Sections 28 and 29 hereof. PART IIB RESTRICTED STOCK AWARDS. 20. DETERMINATION OF RESTRICTED STOCK AWARDS Each year the Committee shall designate the key employees of the Company who shall receive Restricted Stock Awards. Shares awarded under this part of the Plan, while subject to the restrictions hereinafter set forth, are referred to as "Restricted Stock". 21. TERMS OF RESTRICTED STOCK AWARDS Any Award of Restricted Stock shall be subject to the following terms and conditions and to any other terms and conditions not inconsistent with the Plan as shall be prescribed by the Committee in its sole discretion and which may be contained in the agreement, if any, referred to in Section 16 above (or in any amendment thereto): (a) Delivery of Restricted Stock. Unless otherwise determined by the Committee, the Company shall transfer treasury shares to each Participant to whom an Award of Restricted Stock has been made equal to the number of shares of Restricted Stock specified in the Award, and hold the certificates representing such shares of Restricted Stock for the Participant for the period of time during which such shares shall remain subject to the restrictions set forth in the Award (the "Restricted Period"). Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered by a Participant during the Restricted Period, except as hereinafter provided. Except for the restrictions set forth herein and unless otherwise determined by the Committee, a Participant shall have all the rights of a stockholder with respect to the shares of Restricted Stock comprising his or her Award, including, but not limited to, the right to vote and the right to receive dividends (which if in shares of Common Stock shall be Restricted Stock under the same terms and conditions). (b) Lapse of Restricted Period. The Restricted Period shall commence upon the date of the Award (which unless otherwise specified by the Committee shall be the date the Restricted Stock is transferred to the Participant) and, unless sooner terminated as otherwise provided herein, shall continue for such period of time as specified by the Committee in the Award, which shall in no event be less than one year, and thereafter shall lapse in such installments, if any, as provided by the Committee in the Award. (c) Legend. Each certificate issued in respect of shares of Restricted Stock transferred or issued to a Participant under an Award shall be registered in the name of the Participant and shall bear the following (or a similar) legend: "THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE "PLAN") APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK AGREEMENT DATED (THE "AGREEMENT"), AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY MANNER DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY." (d) Death or Disability. Unless the Committee shall otherwise determine in the Award (and subject to Section 18 hereof), if a Participant ceases to be employed by the Company by reason of 8 death or Disability, the Restricted Period covering all shares of Restricted Stock transferred or issued to such Participant under the Plan shall immediately lapse. (e) Retirement. Unless the Committee shall otherwise determine in the Award (and subject to the provisions of Section 18 hereof), the Restricted Period covering all shares of Restricted Stock transferred to a Participant under the Plan shall immediately lapse upon such Participant's Retirement, whether early or not. (f) Termination of Employment. Unless the Committee shall otherwise determine in the Award or otherwise determine at or after the date of grant, if a Participant ceases to be employed by the Company other than due to a condition described in Sections 21(d) or (e) above, all shares of Restricted Stock owned by such Participant for which the Restricted Period has not lapsed shall revert back to the Company upon such termination. Authorized leave of absence or absence in military service shall constitute employment for the purposes of this Section 21(f). Whether absence in government service may constitute employment for the purposes of the Plan shall be conclusively determined by the Committee. (g) Waiver of Forfeiture Provisions. The Committee, in its sole and absolute discretion (but subject to the provisions of Section 18 hereof), may waive the forfeiture provisions in respect of all or some of the Restricted Stock awarded to a Participant. (h) Issuance of New Certificates. Upon the lapse of the Restricted Period with respect to any shares of Restricted Stock, such shares shall no longer be subject to the restrictions imposed in the Award and shall no longer be considered Restricted Stock for the purposes of the Award and the Plan, and the Company shall issue new share certificates respecting such shares registered in the name of the Participant without the legend described in Section 21(c) in exchange for those previously issued. PART IIC RETIREMENT UNIT AWARDS. 22. DETERMINATION OF RETIREMENT UNIT AWARDS Each year the Committee shall designate those key employees of the Company who shall receive Retirement Unit Awards under the Plan. The Company shall create and maintain appropriate records of account for each Participant which shall be designated as the Participant's Retirement Unit Account. 23. CREDITS TO RETIREMENT UNIT ACCOUNTS The Committee shall allocate to each Participant selected to receive a Retirement Unit Award for that year such dollar amount as the Committee shall determine, taking into account the value of the Participant's services to the Company. Such dollar amount shall thereupon be converted into Retirement Units or fractions of Units and credited to each such Participant's Retirement Unit Account in a number equal to the quotient obtained by dividing such allocated dollar amount by the Fair Market Value of one share of Common Stock as of the date the allocation is made. 24. DIVIDEND CREDITS At the discretion of the Committee there may also be allocated in each year to each Participant a dollar amount equal to the cash dividends declared and paid by the Company on the Common Stock which the Participant would have received had such Participant been the owner of the number of shares of Common Stock equal to the number of the whole Retirement Units (but not fractional Units) credited to the Participant's Retirement Unit Account; provided, however, that the total value of such dividend equivalents shall be deducted from the amount available for Awards under Section 13 of the Plan. The dollar amounts allocated shall be converted into and credited to the Participants' Retirement Unit Accounts as Retirement Units or fractions thereof as set forth in Section 23 above as of the date on 9 which such dividends were paid by the Company. No interest shall be paid on the dollar amount so allocated to the Retirement Unit Account of any Participant. The Committee in its discretion may make appropriate equitable adjustments to such Retirement Unit Accounts to account for any dividends of property (other than cash) declared and paid by the Company on its Common Stock, or to account for any other event described in Sections 28 and 29 hereof. 25. RESERVATION OF STOCK AND ACCOUNTING RECORDS The Company shall keep records of the Participant's Retirement Unit Accounts. At the time of any allocation to a Participant's account under Sections 23 or 24 hereof, there shall be reserved out of treasury shares of the Company a number (which may include a fraction) of shares of Common Stock equal to the number of Units or fraction thereof so allocated. 26. MATURITY AND PAYMENT AFTER MATURITY (a) The Retirement Unit Account of each Participant shall mature upon such Participant's death, Retirement or other termination of employment. (b) After maturity, the Company shall deliver to the Participant (or in the event of the death of the Participant, as specified in Section 30 hereof) in ten approximately equal annual installments, shares of Common Stock equal in the aggregate to the number of Retirement Units credited to the Participant's Retirement Unit Account. Any fraction of a Unit credited to the Participant's account at maturity shall be paid in cash with the first installment, the fractional Unit being converted into cash at the Fair Market Value of the Common Stock on such first payment date. The first such installment shall be paid within 90 days after maturity. However, the Committee in its discretion at or any time after maturity may, with the consent of the Participant (or the beneficiary of a deceased Participant as specified in Section 30 hereof), (i) defer the commencement of such distribution or defer any installment, (ii) deliver full payment of the shares of Common Stock equal to the aggregate number of Retirement Units credited to the Participant's Retirement Unit Account and the dollar amount credited thereto, or (iii) reduce or increase the number of annual installments in which the payments are to be made. (c) So long as Retirement Units remain credited to the Retirement Unit Account of a Participant subsequent to maturity, such account shall be credited with the dollar amount allocated to the account as dividends as provided for in Section 24 hereof. Any dollar amount so credited may be paid in cash with the next succeeding annual installment made under Section 26(b) above, or in such manner, at such time or times, and subject to such conditions as the Committee in its sole discretion shall determine; provided, however, that in the case of any dollar amount credited to an account after maturity in respect of a dividend declared prior to maturity, such dollar amounts shall be converted to Retirement Units as of the date of payment and the remaining installments of Common Stock shall be increased accordingly. PART IID PERFORMANCE OR OTHER AWARDS. 27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS (a) Each year the Committee in its sole discretion may authorize other forms of Awards such as, but not limited to, Performance Awards, if the Committee deems it appropriate to do so in order to further the purposes of the Plan. (b) A "Performance Award" shall mean an Award which entitles the Participant to receive Common Stock, Restricted Stock, Retirement Units, Options under Part I of the Plan or other compensation (which may include cash), or any combination thereof, in an amount which depends upon the financial performance of the Company during a stated period of more than one year. Performance for this purpose may be measured by the growth in book value of the Common Stock, an increase in per 10 share earnings of the Company, an increase in operating cash flow, or any other indicators specified by the Committee. The Committee shall also fix the period during which such performance is to be measured, the value of a Performance Award for purposes of providing for the accrual pursuant to Section 13 of the Plan and the form of payment to be made in respect of the Performance Award. PART III GENERAL PROVISIONS. 28. STOCK DIVIDEND OR STOCK SPLIT If at any time the Company shall take any action whether by stock dividend, stock split, combination of shares, or otherwise, which results in a proportionate increase or decrease in the number of shares of Common Stock theretofore issued and outstanding, (i) the number of shares of Common Stock then subject to deferred Stock Awards, credited to Retirement Unit Accounts (matured or unmatured) or set aside for Performance or Other Awards, (ii) the number of outstanding Options, the number of shares of Common Stock for which such Options are exercisable and the exercise price thereof, (iii) the number of shares of Common Stock reserved for Stock Awards, and (iv) the number of shares of Common Stock reserved for Options, shall be increased or decreased in the same proportion. The Committee shall make an appropriate equitable adjustment to the provisions of Section 13(a) to take account of such increase or decrease in issued and outstanding shares. The Committee in its discretion may make appropriate equitable adjustments respecting deferred Stock Awards, Retirement Units, Performance or Other Awards and outstanding Options to take account of a dividend by the Company of property other than cash. All such adjustments shall be made by the Committee whose determination shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 29. RECLASSIFICATION OR MERGER If at any time the Company reclassifies or otherwise changes its issued and outstanding Common Stock (other than in par value) or the Company and one or more corporations merge and the Company is the surviving corporation of such merger, then each Stock Award, Retirement Unit (matured or unmatured), Performance Award or Other Award which at the time of such reclassification or merger is credited as a Stock Award, Retirement Unit, Performance Award or Other Award shall thereafter be deemed to be the equivalent of (and all Units thereafter credited to a Retirement Unit Account shall be computed with reference to), and outstanding Options shall be exercisable for, the shares of stock or other securities of the Company which pursuant to the terms of such reclassification or merger are issued with respect to each share of Common Stock. The Committee shall also make an appropriate equitable adjustment to the provisions of Section 13(a) to take account of such event. All such adjustments shall be made by the Committee whose determination shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 30. NON-ALIENATION OF BENEFITS Except as herein specifically provided, no right or unpaid benefit under this Plan shall be subject to alienation, assignment, pledge or charge and any attempt to alienate, assign, pledge or charge the same shall be void. If any Participant or person entitled to the benefits hereunder should attempt to alienate, assign, pledge or charge any benefit hereunder, then such benefit shall, in the discretion of the Committee, cease. Notwithstanding the foregoing, rights and benefits hereunder shall pass by will or the laws of descent and distribution in the following order: (i) to beneficiaries so designated by the Participant; if none, then (ii) to a legal representative of the Participant; if none, then (iii) to the persons entitled thereto as determined by a court of competent jurisdiction. Awards so passing shall be made at such times and in such manner as if the Participant were living. 11 31. WITHHOLDING OR DEDUCTION FOR TAXES If at any time specified herein for the making of any payment or delivery of any Common Stock to any Participant or beneficiary, any law or regulation of any governmental authority having jurisdiction in the premises shall require the Company to withhold, or to make any deduction for, any taxes or take any other action in connection with the payment or delivery then to be made, such payment or delivery shall be deferred until such withholding or deduction shall have been provided for by the Participant or beneficiary, or other appropriate action shall have been taken. Subject to the provisions of Rule 16b-3 and the consent of the Committee for persons subject to Section 16 of the Exchange Act, the Participant or beneficiary may satisfy the obligation for such withholding or deduction in whole or in part by electing to deliver shares of Common Stock already owned or to have the Company retain from the distribution shares of Common Stock, in each case having a Fair Market Value equal to the amount to be withheld or deducted. 32. ADMINISTRATION EXPENSES The entire expense of administering this Plan shall be borne by the Company. 33. GENERAL CONDITIONS (a) The Board in its discretion may from time to time amend, suspend or terminate any or all of the provisions of this Plan, provided that no change may be made which would prevent Incentive Stock Options granted under the Plan from being Incentive Stock Options as described therein without the consent of the optionees concerned, and further provided that the Board may not make any amendment which (1) changes the class of persons eligible for Incentive Stock Options, or (2) increases the total number of shares for which Options may be granted under Section 6(b), or (3) materially affects the provisions of Sections 13(a) or (b) of the Plan, or (4) increases the total number of shares authorized under Section 13(f) for which Awards may be granted, without the consent and approval of the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon, voting together as one class. The foregoing provisions shall not be construed to prevent the Committee from exercising its discretion, or to limit such discretion, to increase the total number of shares for which Options may be granted under Section 6(b) or the total number of shares authorized under Section 13(f) for which Awards may be granted, as expressly permitted by Sections 28 and 29 hereof, or to adjust the provisions of Sections 13(a) and (b) hereof as expressly permitted by Sections 13(b), 28 and 29 hereof, or otherwise to exercise any discretion to the extent expressly authorized hereunder. (b) Nothing contained in the Plan shall prohibit the Company from establishing incentive compensation arrangements in addition to this Plan and the Cash Plan. Payments made under any such separate arrangements shall not be included in or considered a part of the maximum dollar amount available for Awards under the Plan and Cash Plan, or number of shares available for Awards or Options under the Plan, and shall not be charged against the dollar or share amounts available for Awards under the Plan and Cash Plan or Options under the Plan. In the discretion of the Committee, employees shall be eligible to participate in such other arrangements, as well as the Plan and Cash Plan, in the same year. (c) Nothing in this Plan shall be deemed to limit in any way the right of the Company to terminate a Participant's employment with the Company at any time. (d) The Committee may promulgate rules and regulations relating to the administration and interpretation of, and procedures under, the Plan. Any decision or action taken by the Company, the Board or the Committee arising out of or in connection with the construction, administration, interpretation and effect of the Plan shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 12 (e) No member of the Board or of the Committee shall be liable for any act or action, whether of commission or omission, taken by any other member or by any officer, agent or employee, nor for anything done or omitted to be done by such Director except in circumstances involving actual bad faith. (f) Notwithstanding any other provision of this Plan, the Company shall not be obligated to make any Award, issue any shares of Common Stock, or grant any Option with respect thereto, unless it is advised by counsel of its selection that it may do so without violation of the applicable Federal and State laws pertaining to the issuance of securities, and may require any stock so issued to bear a legend, may give its transfer agent instructions, and may take such other steps, as in its judgment are reasonably required to prevent any such violation. (g) It is the intent of the Company that the Plan comply in all respects with Rule 16b-3, that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be deemed null and void to the extent required to permit the Plan to comply with Rule 16b-3. The Board may adopt rules and regulations under, and amend, the Plan in furtherance of the intent of the foregoing. 34. TRANSITION Upon the effectiveness of this Plan, as provided below, and the Cash Plan, such plans shall replace the Company's present Executive Incentive Compensation Plan ("EICP"), except that the EICP shall continue to govern options and awards of restricted stock outstanding under the EICP. No further awards will be made under the EICP, and all amounts accrued for awards under the EICP and unawarded shall be carried forward and be available for Awards under the Plan and awards under the Cash Plan. All unmatured and matured but undistributed retirement units and all performance awards respecting current performance cycles awarded under the EICP shall be deemed Retirement Units and Performance Awards awarded hereunder and any payments or distributions in respect thereof shall be made hereunder; provided, however, that the number of shares of Common Stock available for Awards pursuant to Section 13(f) hereof shall not be reduced by the number of such retirement units previously awarded under the EICP and paid subsequently under the Plan. 35. EFFECTIVE DATES The Plan shall become effective for periods beginning after January 1, 1991 if approved by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual Meeting of Stockholders, in person or by proxy, voting together as a single class. No Options may be granted or Awards made under the Plan after December 31, 2000, or such earlier expiration date as may be designated by resolution of the Board. 13 EX-10.8 6 AGREEMENT OF LEASE between THE CITY OF NEW YORK, Landlord, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION Tenant. Dated as of December 15, 1993 Premises Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, p/o Lot 1 and Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, and Block 4339, Lot 46, plus demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned new tentative tax block and lot numbers Block 4282, Lot 100 for future identification. TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS................................. 3 ARTICLE 2 DEMISE OF PREMISES AND TERM OF LEASE........ 31 Section 2.01. Demise of Premises; Term 31 Section 2.02. Pre-Possessory Date Access and Use 31 ARTICLE 3 RENTAL...................................... 34 Section 3.01. Method and Place of Payment 34 Section 3.02. Base Rent 34 Section 3.03. [Intentionally Omitted] 36 Section 3.04. [Intentionally Omitted] 36 Section 3.05. Payments in Lieu of Taxes 36 Section 3.06. Offset for Funding Default 47 Section 3.07. [Intentionally Omitted] 47 Section 3.08. Exemption From Certain Taxes 47 Section 3.09. Impositions and College Point Improvement Fund Payments 55 Section 3.10. Single Tax Lot 60 Section 3.11. Tax Benefits Applications 60 ARTICLE 4 OFFSETS AGAINST RENTAL...................... 62 Section 4.01. Offsets Against Rental 62 Section 4.02. Notice of Offset 63 Section 4.03. Inability to Take Full Amount of Offset 64 ARTICLE 5 PROHIBITION AGAINST LANDLORD TRANSFERS AND ENCUMBRANCES............................ 65 Section 5.01. Prohibited Encumbrances 65 Section 5.02. Prohibited Transfers 65 ARTICLE 6 LATE CHARGES................................ 67 ARTICLE 7 INSURANCE................................... 68 Section 7.01. Insurance Requirements 68 Section 7.02. Treatment of Proceeds 69 Section 7.03. General Requirements Applicable to Policies 70 Section 7.04. Increases in Coverage 73 Section 7.05. No Representation as to Adequacy of Coverage 73 Section 7.06. Blanket and/or Umbrella Policies 73 Section 7.07. Liability Insurance Requirements 74 Section 7.08. Property and Other Insurance Requirements 75 Section 7.09. Construction Insurance Requirements 76 Section 7.10. Deductibles 77 Section 7.11. No Separate Contractor Coverage Required 77 ARTICLE 8 DAMAGE, DESTRUCTION AND RESTORATION......... 79 Section 8.01. Notice to Landlord 79 Section 8.02. Tenant's Option Upon a Substantial Casualty Loss 79 Section 8.03. Lease Termination or Purchase 80 Section 8.04. Casualty Restoration Construction Work 80 Section 8.05. Restoration Funds 81 Section 8.06. Effect of Casualty on This Lease 82 ARTICLE 9 CONDEMNATION................................ 83 Section 9.01. Substantial Condemnation 83 Section 9.02. Less Than A Substantial Condemnation 85 Section 9.03. [Intentionally Omitted] 86 Section 9.04. Temporary Taking 86 Section 9.05. Governmental Action Not Resulting in a Condemnation 88 Section 9.06. Collection of Awards 89 Section 9.07. Tenant's Approval of Settlements 89 Section 9.08. Negotiated Sale 89 Section 9.09. Reduction of Base Rent and Land PILOT 89 Section 9.10. Reduction of Purchase Price 90 ARTICLE 10 TRANSFER AND SUBLETTING..................... 91 Section 10.01. Tenant's Right to Assign, Sublet, Transfer, Etc. 91 Section 10.02. Subtenant Violation 101 Section 10.03. Tenant's Right to Sublease 101 ARTICLE 11 MORTGAGES................................... 102 Section 11.01. Effect of Mortgages 102 Section 11.02. Mortgagee's Rights Not Greater than Tenant's 102 Section 11.03. Notice and Right to Cure Tenant's Defaults 103 Section 11.04. Execution of New Lease 106 ii Section 11.05. Recognition by Landlord of Recognized Mortgagee Most Senior in Lien 109 Section 11.06. Appearance at Condemnation Proceedings 110 Section 11.07. Rights Limited to Recognized Mortgagees 110 Section 11.08. Consent to Assignment of Tenant Rights 110 Section 11.09. Prohibition Against Surrender 112 Section 11.10. No Merger 112 Section 11.11. No Subordination to Fee Mortgage 112 Section 11.12. No Modifications 112 Section 11.13. Estoppel Certificate 113 Section 11.14. Modification of Lease 113 Section 11.15. Chattel Mortgages 114 Section 11.16. Additional Notices to Mortgagees 115 Section 11.17. Provisions of Lease Continue in Effect After Foreclosure 115 ARTICLE 12 CAR POUND................................... 116 Section 12.01. Removal of Car Pound 116 Section 12.02. Damages for Tenant's Failure to Construct after Notice 117 Section 12.03. Damages for Landlord's Failure to Remove Car Pound 119 Section 12.04. Tenant's Self-Help Remedy 123 Section 12.05. Tenant's Right to Terminate the Lease 125 Section 12.06. Interim Car Pound 126 Section 12.07. Interim Car Pound License 127 ARTICLE 13 CONSTRUCTION WORK........................... 128 Section 13.01. Construction of the Project 128 Section 13.02. Subsequent Construction Work 139 Section 13.03. [Intentionally Omitted] 139 Section 13.04. Supervision of Architect 140 Section 13.05. Conditions Precedent to Tenant's Commencement of All Construction Work 140 Section 13.06. Completion of Construction Work 141 Section 13.07. Title to the Improvements and Materials 142 Section 13.08. [Intentionally Omitted] 143 Section 13.09. Construction Agreements 143 Section 13.10. Consent for Demolition 145 ARTICLE 14 REPAIRS, MAINTENANCE, ETC................... 146 Section 14.01. Maintenance of the Premises, Etc. 146 Section 14.02. [Intentionally Omitted] 146 Section 14.03. Free of Dirt, Snow, Etc. 146 Section 14.04. No Obligation of Landlord To Repair or to Supply Utilities 146 iii ARTICLE 15 CAPITAL IMPROVEMENTS........................ 148 Section 15.01. Capital Improvements 148 ARTICLE 16 REQUIREMENTS OF GOVERNMENTAL AUTHORITIES.... 149 Section 16.01. Requirements 149 ARTICLE 17 DISCHARGE OF LIENS; BONDS................... 151 Section 17.01. Creation of Liens 151 Section 17.02. Discharge of Liens 151 ARTICLE 18 REPRESENTATIONS............................. 153 Section 18.01. Landlord's Representations and Warranties 153 Section 18.02. Tenant's Acknowledgment of No Other Representations 155 Section 18.03. No Payments 156 ARTICLE 19 LANDLORD NOT LIABLE FOR INJURY OR DAMAGE, ETC................................. 157 Section 19.01. Landlord not Liable for Injury or Damage, Etc. 157 Section 19.02. Waiver of Claims 158 ARTICLE 20 INDEMNIFICATION OF LANDLORD AND OTHERS...... 159 Section 20.01. Tenant's Obligation to Indemnify 159 Section 20.01A. Landlord's Obligation to Indemnify 160 Section 20.02. Contractual Liability 161 Section 20.03. Defense of Claim, Etc. 161 Section 20.04. Notice 163 Section 20.05. Survival Clause 163 ARTICLE 21 PURCHASE OPTION ............................ 164 Section 21.01. Purchase Option 164 Section 21.02. Default under Purchase Agreement; Extension of Term 167 Section 21.03. Condemnation 171 Section 21.04. Right to Terminate 171 iv ARTICLE 22 LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS................................... 172 Section 22.01. Landlord's Right to Perform 172 Section 22.02. Reimbursement of Amounts Paid 172 Section 22.03. Waiver, Release and Assumption of Obligations 172 ARTICLE 23 USE OF THE PREMISES......................... 174 Section 23.01. Permitted Uses 174 Section 23.02. Prohibited Uses 174 ARTICLE 24 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES, ETC.................. 175 Section 24.01. Definition 175 Section 24.02. Enforcement of Performance 177 Section 24.03. Expiration and Termination of Lease 177 Section 24.04. Arbitration of Certain Defaults 180 Section 24.05. Receipt of Moneys after Notice or Termination 181 Section 24.06. Exercise of Purchase Option 181 Section 24.07. Strict Performance 182 Section 24.08. Right to Enjoin Defaults 182 Section 24.09. Survival of Article 183 ARTICLE 25 NOTICES..................................... 184 Section 25.01. All Notices, Communications, Etc. in Writing 184 Section 25.02. Service 185 ARTICLE 26 NO SUBORDINATION............................ 186 v ARTICLE 27 SANITARY SEWER.............................. 187 Section 27.01. Requirement of Sanitary Sewer 187 Section 27.02. Obligation to Construct Sanitary Sewer 188 Section 27.03. Damages for Landlord's Failure to Construct Sanitary Sewer 190 Section 27.04. Damages for Delaying Tenant's Construction of the Sanitary Sewer 191 Section 27.05. Sewer Self-Help Remedy 192 ARTICLE 28 ABANDONMENT OF THE PROJECT.................. 194 Section 28.01. Effect of Abandonment of the Project 194 Section 28.02. Loss of Certain Benefits 194 Section 28.03. Reimbursement of Funding 195 Section 28.04. Right to Terminate 196 ARTICLE 29 CERTIFICATES BY LANDLORD AND TENANT......... 198 Section 29.01. Certificate of Tenant 198 Section 29.02. Certificate of Landlord 198 ARTICLE 30 CONSENTS AND APPROVALS...................... 200 Section 30.01. Effect of Granting or Failure to Grant Approvals or Consents 200 Section 30.02. Remedy for Refusal to Grant Consent or Approval 200 Section 30.03. No Unreasonable Delay 201 Section 30.04. No Fees Etc. 201 ARTICLE 31 SURRENDER AT END OF TERM.................... 202 Section 31.01. Surrender of Premises 202 Section 31.02. Delivery of Subleases, Etc. 202 Section 31.03. Personal Property 203 Section 31.04. Survival Clause 204 ARTICLE 32 ENTIRE AGREEMENT............................ 205 ARTICLE 33 QUIET ENJOYMENT............................. 206 vi ARTICLE 34 ARBITRATION................................. 207 Section 34.01. Disputes to be Submitted to Arbitration 207 Section 34.02. Procedure for Arbitration 207 Section 34.03. Selection of Arbiter 208 Section 34.04. Recognized Mortgagees 210 Section 34.05. Arbiter's Decision 210 Section 34.06. Lists of Arbiters 210 ARTICLE 35 ADMINISTRATIVE AND JUDICIAL PROCEEDINGS, CONTESTS, ETC.................. 215 Section 35.01. Tax Contest Proceedings 215 Section 35.02. Imposition Contest Proceedings 216 Section 35.03. Requirement Contest 217 Section 35.04. Landlord's Participation in Contest Proceedings 218 ARTICLE 36 SALES AND COMPENSATING USE TAXES............ 219 Section 36.01. Exemption 219 Section 36.02. Public Purpose Payments 219 ARTICLE 37 REPORTS, SUBMISSIONS AND RECORDS............ 221 Section 37.01. Financial Reports 221 Section 37.02. Submission of Certificates of Occupancy 221 ARTICLE 38 RECORDING OF LEASE.......................... 222 ARTICLE 39 TENANT'S PROPERTY........................... 223 ARTICLE 40 NONDISCRIMINATION; AFFIRMATIVE ACTION....... 224 Section 40.01. Executive Order No. 50 224 Section 40.02. Limitations 225 Section 40.03. E.O. 50 Remedies 226 Section 40.04. Nondiscrimination; Affirmative Action 227 Section 40.05. Nondiscrimination Remedies 228 ARTICLE 40A INVESTIGATIONS, ETC......................... 230 Section 40A.01. Cooperation in Investigations 230 Section 40A.02. Hearing 231 Section 40A.03. Adjournments of Hearing, Etc. 232 Section 40A.04. Penalties 232 Section 40A.05. Criteria for Determination 234 vii Section 40A.06. Payment of Penalties 235 Section 40A.07. Definitions 235 Section 40A.08. Exclusive Remedy 236 Section 40A.09. Right to Dispute Determinations of Deputy Mayor 237 ARTICLE 41 EMPLOYMENT REPORTING AND REQUIREMENTS................................ 238 Section 41.01. Employment Reporting and Requirements 238 ARTICLE 42 APPOINTMENT OF LEASE ADMINISTRATOR.......... 240 Section 42.01. Appointment of Lease Administrator 240 Section 42.02. Revocation of Appointment 240 Section 42.03. Binding Nature of Lease Administrator's Actions 240 Section 42.04. Obligation of Landlord to Perform Certain Acts 241 ARTICLE 43 MISCELLANEOUS............................... 243 Section 43.01. Captions 243 Section 43.02. Table of Contents 243 Section 43.03. Reference to Landlord and Tenant 243 Section 43.04. Person Acting on Behalf of a Party Hereunder 243 Section 43.05. Comptroller's Statutory Right of Audit 244 Section 43.06. Limitation on Liability 244 Section 43.07. Remedies Cumulative 248 Section 43.08. Merger 248 Section 43.09. Performance at Party's Sole Cost and Expense 249 Section 43.10. Relationship of Landlord and Tenant 249 Section 43.11. Waiver, Modification, Etc. 249 Section 43.12. [Intentionally Omitted] 249 Section 43.13. Governing Law 249 Section 43.14. Successors and Assigns 250 Section 43.15. Publicity 250 Section 43.16. [Intentionally Omitted] 250 Section 43.17. [Intentionally Omitted] 250 Section 43.18. Termination by Tenant 251 Section 43.19. Hazardous Substances, Etc. 251 ARTICLE 44 STORM DRAINAGE SYSTEM....................... 254 ARTICLE 45 BROKERS..................................... 255 ARTICLE 46 WHITESTONE ROAD............................. 256 viii EXHIBITS PAGE Exhibit A - Mayoral Authorization 2 Exhibit B - Land 17 Exhibit C - Maximum Improvement PILOT 18 Exhibit D - Maximum Land PILOT 19 Exhibit E - Sanitary Sewer Easement 31 Exhibit F - [Intentionally Omitted] Exhibit G - Title Matters 31 Exhibit H - Form of Assumption Agreement 92 Exhibit I - Plan of Parcels A, B and C 31 Exhibit J - South Brooklyn Marine Terminal Site 124 Exhibit K - Agreement of Sale and Purchase 165 Exhibit L - [Intentionally Omitted] Exhibit M-1 Reimbursement Schedule 195 Exhibit M-2 Amortized Reimbursement Schedule 195 Exhibit N - Employment Questionnaire 238 Exhibit O - Site Connection Proposal Form 254 Exhibit P - E.O. 50 Construction Contract Rider 224 ix AGREEMENT OF LEASE AGREEMENT OF LEASE, made as of the 15th day of December, 1993, between THE CITY OF NEW YORK, a municipal corporation of the State of New York, having an address at City Hall, New York, New York 10007, as landlord, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, a local development corporation formed under Section 1411 of the New York Not-for-Profit Corporation Law, having an address at 110 William Street, New York, NY 10038, as tenant. W I T N E S S E T H: RECITALS WHEREAS: (1) The City of New York is the owner of the Land (as hereinafter defined) and any buildings and other improvements situated thereon or therein. (2) The parties desire to provide a public benefit by providing for the construction and operation on the Land of a new facility for the printing, production and distribution of newspapers to be constructed and operated by The New York Times Newspaper Division of The New York Times Company or an Affiliate (as hereinafter defined) of The New York Times Newspaper Division of The New York Times Company. (3) The Mayor of the City of New York has authorized the City of New York to enter into this Lease pursuant to Mayoral Authorization Cal. No. 9, dated January 13, 1993, a copy of which is annexed hereto as Exhibit A. (4) It is anticipated that the number of permanent jobs to be retained and/or created in connection with the Project (as hereinafter defined) is approximately 410 - 710, depending upon the size of the Project to be constructed by Tenant (as hereinafter defined), based upon manning levels currently in effect under conditions resulting from current technology and collective bargaining agreements currently in effect; provided, however, that The New York Times Newspaper Division of The New York Times Company makes no representations as to the number of jobs to be retained and/or created under conditions resulting from future technological advances or modifications to existing collective bargaining agreements or new collective bargaining agreements that may become effective during the Term (as hereinafter defined). TERMS OF AGREEMENT NOW, THEREFORE, it is hereby mutually covenanted and agreed by and between the parties hereto that this Lease is made upon and subject to the terms, covenants and conditions hereinafter set forth. -2- ARTICLE 1 DEFINITIONS For all purposes of this Lease, the terms defined in this Article shall have the following meanings: "Abandonment of the Project" means any of the following occurrences: (a) Tenant shall have delivered to Landlord written notice of its election to abandon the Project as of the date specified in such notice, in which event Abandonment of the Project shall be effective on such date. (b) at any time during the period between the Lease Execution Date and the Operational Date, Tenant shall have permanently relocated substantially all of the jobs and/or functions directly related to the printing, bundling, collating, production and distribution of The New York Times newspaper located, on the Lease Execution Date, at the 43rd Street Facility to another facility outside of the City of New York, in which event Abandonment of the Project shall be effective on the effective date of such permanent relocation of jobs and/or functions; (c) at any time after the Construction Commencement Date Tenant shall have failed to make reasonable and diligent efforts to construct a -3- facility constituting at least the Minimum Printing Facility to completion, and as a result of such failure Tenant shall not Substantially Complete construction of a facility constituting at least the Minimum Printing Facility by the Scheduled Completion Date (subject to Unavoidable Delays), and such failure to Substantially Complete construction of a facility constituting at least the Minimum Printing Facility shall continue for thirty (30) days after written notice from Landlord, in which event Abandonment will be effective on the day after the expiration of such 30-day period (provided that prior to the expiration of such 30-day period, Tenant has not commenced to cure such failure); (d) on or before the Outside Operation Date, Tenant shall have failed to equip the Minimum Printing Facility with printing presses and such other equipment as is necessary to enable the Minimum Printing Facility to be operational for the printing, collating, bundling and distribution of newspapers and magazines or other periodicals or printed materials and to commence the operation of the Minimum Printing Facility, in which event Abandonment shall be effective on the Outside Operation Date; or -4- (e) at any time after the Operational Date, Tenant shall have ceased operation of the Minimum Printing Facility and failed to resume the operation of the Minimum Printing Facility as a major printing facility serving the New York City Metropolitan Area within a five (5) year period and such failure shall have continued for thirty (30) days after written notice from Landlord, in which event Abandonment will be effective on the day after expiration of such 30-day period (provided that prior to the expiration of such 30-day period, Tenant has not commenced to cure such failure). Notwithstanding anything to the contrary contained herein, Abandonment of the Project shall in no event be deemed to have occurred if The New York Times Company or any successor thereto shall have assigned its interest in this Lease in accordance with the provisions hereof and the assignee of such interest in this Lease shall either perform or continue to perform the obligations of the Tenant set forth herein with respect to the construction, equipping and operation of the Minimum Printing Facility. Nothing contained herein shall be construed as granting to any such assignee any extension of the time periods set forth herein for the performance of such obligations. "Accounting Principles" at any time means the then current generally accepted accounting principles consistently -5- applied which relate to the accrual method of accounting, but subject to the exceptions, if any, expressly set forth in this Lease. "Acquisition Date" has the meaning provided in Section 21.02. "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such Person. For purposes hereof, the term "control" means the possession by a Person, directly or indirectly, of the power to direct or cause the direction of the management and policies of another Person through the ownership of voting rights or interests, by contract, or otherwise. Ownership of or by a Person includes beneficial ownership effected by ownership or control of intermediate entities. Unless the context otherwise requires, any reference to an "Affiliate" in this Lease shall be deemed to refer to an Affiliate of Tenant. "Amortized EDC Reimbursement Amount" has the meaning provided in Section 28.03(b). "Amortized Reimbursement Schedule" has the meaning provided in Section 28.03(b). "Arbiter" has the meaning provided in Section 34.02(a). "Architect" means any registered architect, architectural firm, professional engineer or engineering firm, -6- or a combined practice or association, licensed in the State of New York selected by Tenant, or any licensed architect or engineer on the staff of a general contractor selected by Tenant responsible for the performance of all or any portion of the general construction work relative to any Construction Work who is authorized to sign construction documents, in his or her professional capacity, on behalf of such general contractor. "Base Rent" has the meaning provided in Section 3.02. "Basic Penalty Offset" has the meaning provided in Section 12.03(b). "Basic Purchase Price" has the meaning provided in Section 21.01(a). "Buildings Department" means the New York City Department of Buildings and its successors. "Business Day" mean any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions in New York City are authorized by law or executive order to close. "Capital Improvement" has the meaning provided in Section 15.01(c). "Car Pound" means the Police Department Vehicle Pound operated on the Land by the New York City Police Department as the same may exist on the Lease Execution Date. "Car Pound Completion Date" has the meaning provided in Section 12.03(b). -7- "Car Pound Offset Amounts" has the meaning provided in Section 12.03. "Car Pound Removal Date" has the meaning provided in Section 12.01(a). "Car Pound Removal Notice" has the meaning provided in Section 12.01. "Casualty Restoration" has the meaning provided in Section 8.02(a). "Certificate of Occupancy" means a certificate of occupancy, either temporary or permanent, issued by the Buildings Department. "Certified Public Accountant" means an independent certified public accountant or accounting firm selected by Tenant. "City" means The City of New York, a municipal corporation of the State of New York. "Collateral Assignment" has the meaning provided in Section 10.01(b). "College Point Improvement Fund" has the meaning provided in Section 3.09(b)(ii). "College Point Improvement Fund Payments" has the meaning provided in Section 3.09(b)(iii). "Commence Construction of the Project" or "Commencement of Construction of the Project" has the meaning provided in Section 13.01(b)(i). -8- "Comptroller" has the meaning provided in Section 37.03(b). "Condemnation" has the meaning provided in Section 9.01(c)(i) "Condemnation Restoration" has the meaning provided in Section 9.02(b). "Construction Agreement(s)" has the meaning provided in Section 13.09(b). "Construction Commencement Date" has the meaning provided in Section 13.01(b)(ii). "Construction of the Project" has the meaning provided in Section 13.01(b)(iii). "Construction Work" means any construction work performed under this Lease including, without limitation, Construction of the Project, a repair, a Restoration, a Capital Improvement, or work performed in connection with the use, maintenance or operation of the Premises, or any demolition work. "Date of Condemnation" has the meaning provided in Section 9.01(c)(ii). "Default" means any condition or event, or failure of any condition or event to occur, which constitutes, or would after notice and/or the lapse of time constitute, an Event of Default. "Default Damages Period" has the meaning provided in Section 21.02(b). -9- "DEP Sewers" has the meaning provided in Section 43.17. "Dispute Notice" has the meaning provided in Section 34.02(a). "Division" means The New York Times Newspaper Division of The New York Times Company. "EDC" means New York City Economic Development Corporation and its successors. "EDC Reimbursement Amount" has the meaning provided in Section 28.03(a). "Engineer of Record" means the professional engineer, if any, designated to act as engineer of record by (a) Tenant, (b) any general contractor selected by Tenant responsible for the performance of general construction work relative to the construction of the Project, or (c) any construction manager selected by Tenant responsible for the performance of construction management services relative to the the construction of the Project. "Equipment" means all fixtures and personal property incorporated in or attached to and used or usable in the operation of or in connection with the Premises and shall include, but shall not be limited to, all apparatus, devices, motors, engines, dynamos, compressors, pumps, boilers and burners, heating, lighting, plumbing, ventilating, air cooling and air conditioning equipment; chutes, ducts, pipes, tanks, fittings, conduits and wiring; incinerating equipment; -10- elevators, escalators and hoists; partitions, doors, cabinets, hardware; floor, wall and ceiling coverings; washroom, toilet and lavatory equipment; lobby decorations; windows, window washing hoists and equipment; communications equipment; and all additions thereto or replacements thereof, excluding, however, Tenant's Property and any personal property which is owned by Subtenants or contractors engaged in maintaining same, or by utility companies serving the Premises. "Event of Default" has the meaning provided in Section 24.01. "Exempt Taxes" has the meaning provided in Section 3.08. "Expansion Construction Commencement Date" has the meaning provided in Section 3.05(b)(ii). "Expansion Improvement" has the meaning provided in Section 3.05(b)(ii)(B)(2). "Expiration Date" means, subject to postponement pursuant to the provisions of Section 21.02 hereof, the earliest to occur of (i) the twenty-fifth (25th) anniversary of the Construction Commencement Date, (ii) the thirty-fifth (35th) anniversary of the Lease Execution Date, or (iii) the date, if any, upon which this Lease is terminated pursuant to any provision of this Lease. "Failure to Exercise Notice" has the meaning provided in Section 21.01(c). -11- "15th Year Normal Improvements PILOT" has the meaning provided in Section 3.05(b)(ii)(C). "Finance Department" means the New York City Department of Finance and its successors. "First Year Abatement Period" has the meaning provided in Section 21.02(b). "Fiscal Year" has the meaning provided in Section 3.05(d)(iv). "Fixed Improvements Value" has the meaning provided in Section 3.02(b)(ii)(A). "Fixed Land PILOT" has the meaning provided in Section 3.05(b)(i)(B)(1)(y)(I). "Floor Area" has the meaning provided for such term in the City's Zoning Resolution effective on the Lease Execution Date. "4th Anniversary Date" has the meaning provided in Section 3.02(a). "43rd Street Facility" meants Tenant's 43rd Street facility as it exists on the Lease Execution Date. "Full Assessment Date" has the meaning provided in Section 3.05(b)(ii)(A). "Fund" means the College Point Improvement Fund. "Funding" has the meaning provided in Funding Agreement #1, Funding Agreement #2, Funding Agreement #3 or Funding Agreement #4, as applicable. -12- "Funding Agreement #1", "Funding Agreement #2", "Funding Agreement #3" and "Funding Agreement #4" mean, respectively, the four funding agreements so denominated between EDC and The New York Times Company, dated as of the Lease Execution Date, as the same may be amended from time to time. "Governmental Authority or Authorities" means the United States of America, the State of New York, New York City and any agency, department, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having legal jurisdiction over the Premises or any portion thereof or any street, road, avenue or sidewalk comprising a part of, adjoining, or in front of, the Premises, or any vault in or under the Premises. "Gross Building Area" means, at any time, the gross building area of the Improvements completed as of such time as determined by the Finance Department or, if Tenant does not agree with such determination, Tenant shall give notice to Lease Administrator of such disagreement, and in such event, the Gross Building Area shall be determined by arbitration in accordance with Article 34. Lease Administrator shall promptly notify Tenant of the Finance Department's determination of Gross Building Area and Lease Administrator shall have the right to include in such notice a provision indicating that such determination of Gross Building Area shall be binding upon -13- Landlord and Tenant for purposes of this Lease unless Tenant notifies Lease Administrator of its disagreement with such determination within ninety (90) days after Tenant's receipt of such notice from Lease Administrator. In the event that any such determination of Gross Building Area becomes binding upon Landlord and Tenant for purposes of this Lease, such determination shall remain binding unless and until there is a recalculation of Gross Building Area by the Finance Department as the result of an expansion of or addition to the Improvements. The binding nature of any such determination of Gross Building Area shall be for purposes only of performing calculations under Section 3.05(b)(ii) hereof, and shall not prejudice, limit or affect in any manner Tenant's rights under Section 35.01(a) hereof or be admissible in any action or proceeding referred to in said Section 35.01(a). "Hazardous Substances" has the meaning provided in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 USCA SEC.9601 et. seq. "Hazardous Substances Extension Period" has the meaning provided in Section 43.19(d). "Imposition" or "Impositions" has the meaning provided in Section 3.09(b)(i). "Improvements" means any building (including footings and foundations), Equipment, and other improvements and appurtenances of every kind and description hereafter erected, -14- constructed, or placed upon the Land including, without limitation, the Initial Improvements, any Expansion Improvements, any Capital Improvements and any and all alterations and additions thereto and replacements and substitutions therefor, excluding, however, Tenant's Property and any personal property which is owned by Subtenants or contractors engaged in maintaining same, or by utility companies serving the Premises. "Improvements PILOT" has the meaning provided in Section 3.05(b)(ii). "Improvements Taxes" has the meaning provided in Section 3.05(d)(iii). "Initial Improvements" means any building or buildings (including footings and foundations), at least 360,000 square feet in Gross Building Area (or such lesser amount of square feet as may qualify for reimbursement under Funding Agreement #1), first placed on the Land in accordance with the Plans and Specifications. "Initial Improvements PILOT Period" has the meaning provided in Section 3.05(b)(ii). "Initial Land PILOT Period" has the meaning provided in Section 3.05(b)(i)(A). "Initial Land PILOT Period Termination Date" has the meaning provided in Section 3.05(b)(i)(A). "Initial Three Month Period" has the meaning provided in Section 12.03(a). -15- "Institutional Lender" means (a) a state or federally chartered savings bank, savings and loan association, commercial bank, trust company (whether acting individually or in a fiduciary capacity), financial institution, other entity involved in the business of making loans or providing financing, trust fund whose trustee is a bank or trust company, or any similar institution, or any of the foregoing organized under the laws of any foreign jurisdiction; an insurance company organized and existing under the laws of the United States or any state thereof or the laws of any foreign jurisdiction; a religious, educational or eleemosynary institution or any organization described in Section 501(c)(3) of the Internal Revenue Code; a federal, state or municipal employee's welfare, benefit, pension or retirement fund; a brokerage, investment advisor or investment banking organization (acting as principal or agent); any governmental agency or entity insured by a governmental agency; any trust, partnership, or other entity organized by any of the foregoing for the purpose of acquiring receivables, or other assets from or providing financing to Tenant as part of a securitized financing; or any combination of Institutional Lenders; provided, that each of the above entities shall qualify as an Institutional Lender only if it shall (A) be subject (or agree to be subject) to the jurisdiction of the courts of the State of New York in any action with respect to its rights hereunder -16- as a Recognized Mortgagee, and (B) have net assets of not less than $50,000,000; provided, however, that with respect to any institution acting in a trust capacity or as agent or which has organized an entity for purposes of financing a Mortgage, such net asset requirement shall apply to such institution rather than to the entity for which such institution is acting in trust for, as agent for, or has organized for the purpose of a financing transaction, and (b) any Affiliate of an Institutional Lender described in clause (a). "Land" means the land described in Exhibit B hereto. "Land PILOT" has the meaning provided in Section 3.05(b)(i) "Land Taxes" has the meaning provided in Section 3.05(d)(ii). "Landlord" means the City acting in its capacity as such (rather than in its municipal capacity), provided, however, that if the City or any successor to its interest hereunder transfers or assigns its interest in the Land or its interest under this Lease (which assignee must be a municipal entity), then from and after the date of such assignment or transfer, the term "Landlord" shall mean the assignee or transferee. "Landlord Indemnitees" has the meaning provided in Section 20.01. -17- "Landlord's Liability Amount" has the meaning provided in Section 43.06(a). "Landlord's Sewer Commencement Date" has the meaning provided in Section 27.02. "Landlord's Unavoidable Delays" has the meaning provided in Section 12.01. "Late Charge Rate" means one percent (1%) over the Prime Rate. "Lease" means this Agreement of Lease and all exhibits hereto and all amendments, modifications and supplements thereof. "Lease Administrator" means EDC, or an affiliate entity controlled by EDC, acting in its capacity as administrator of this Lease pursuant to the terms of Article 42 hereof. "Lease Execution Date" means the date on which this Lease has been fully executed by both parties hereto and unconditionally delivered by each such party to the other. "Lease Year" means each full calendar year falling within the Term and the partial calendar year, if any, that begins on the Possessory Date. "Major Sublease" has the meaning provided in Section 10.01(b)(i)(B). "Maximum Improvements PILOT" means, for any period, the amount of Improvements PILOT for such period shown in Exhibit C, after deducting the applicable abatement amounts shown on said Exhibit C. -18- "Maximum Land PILOT" means, for any period, the amount of Land PILOT for such period shown in Exhibit D, after deducting the applicable abatement amounts shown on said Exhibit D. "Minimum Printing Facility" means a facility for the printing, production and distribution of newspapers, magazines and/or other periodicals of not less than approximately 360,000 square feet of floor area, which facility and its foundation shall be adequate to accommodate the installation and operation therein of four printing presses and other equipment related primarily to printing, collating, bundling and distribution functions necessary in connection with the production of newspapers and magazines or other periodicals or printed materials. "Mortgage" has the meaning provided in Section 11.01(b). "Mortgagee" means the holder of a Mortgage. "Normal Expansion Improvements PILOT" has the meaning provided in Section 3.05(b)(ii)(B). "Normal Improvements PILOT" has the meaning provided in Section 3.05(b)(ii)(B). "Notice Period" has the meaning provided in Section 34.02(b). "Offset Amounts" has the meaning provided in Section 4.01. -19- "Offset Dispute Notice" has the meaning provided in Section 4.02. "Offset Notice" has the meaning provided in Section 4.02. "Offset Liability Portion" has the meaning provided in Section 43.06(a). "Operational Date" means the date on which Tenant commences the operation of the Minimum Printing Facility. "Outside Commencement Date" has the meaning provided in Section 13.01(b)(iv). "Outside Operation Date" means the date which is five (5) years after Substantial Completion of construction of the Minimum Printing Facility. "Parcel A," "Parcel B," and "Parcel C" have the meanings provided in Section 2.02. "Permitted Encumbrances" has the meaning provided in Section 5.1 of the Purchase Agreement. "Permitted Testing" has the meaning provided in Section 2.02. "Person" means an individual, corporation, partnership, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing. "PILOT" has the meaning provided in Section 3.05(a). "PILOT Refund Amount" has the meaning provided in Section 35.02. -20- "Plans and Specifications" has the meaning provided in Section 13.01(b)(v). "Plans and Specifications Offset Amount" has the meaning provided in Section 13.01(h). "Possessory Date" means, subject to the applicable provisions of Article 12 hereof, the date on which possession of the Premises is delivered to Tenant free of the Car Pound and all vehicles and structures and other improvements, free of any claims to possession by any party and free of Hazardous Substances to the extent required by Section 43.19(a) hereof, and substantially free of any debris, but subject nevertheless to any obligations that may be imposed upon Landlord pursuant to the provisions of Section 43.19(c) hereof. "Power Agreement" means that certain New York City Public Utility Service Power Service Agreement made as of May 3, 1993 between The City of New York, acting by and through its Public Utility Service, and the Division. "Preliminary Site Work" has the meaning provided in Section 13.01(b)(i). "Premises" means the Land and the Improvements. "Prime Rate" means the base or prime rate of interest charged from time to time by Chemical Bank, as published in The New York Times newspaper or by The Wall Street Journal if such rate is not then being published by The New York Times newspaper. -21- "Printing Facility" means a facility for the printing, production and distribution of newspapers and magazines or other periodicals or printed materials. "Prohibited Encumbrances" has the meaning provided in Section 5.01. "Prohibited Person" has the meaning provided in Section 10.01(c). "Project" means a Printing Facility of not less than approximately 360,000 square feet and, in the sole discretion of Tenant, such other buildings and Improvements as Tenant may deem necessary in connection with such Printing Facility including, without limitation, the expansion of the Printing Facility to a size greater that 360,000 square feet. "Property" has the meaning provided in Section 21.01(a). "Public Purpose Payment" has the meaning provided in Section 36.02. "Public Sewer Delay" has the meaning provided in Section 27.04. "Purchase Agreement" has the meaning provided in Section 21.01(d). "Purchase Default Date" has the meaning provided in Section 21.02(b). "Purchase Notice" has the meaning provided in Section 21.01(b). -22- "Purchase Option" means the purchase option described in Article 21. "Purchase Price" has the meaning provided in Section 21.01(a). "Recognized Mortgage" has the meaning provided in Section 11.02(b). "Recognized Mortgagee" means the holder of a Recognized Mortgage. "Reimbursement Schedule" has the meaning provided in Section 28.03(a). "Rejection Notice" has the meaning provided in Section 34.02(b). "Remaining Abatement Period" has the meaning provided in Section 21.02(b). "Remaining Improvements PILOT Period" has the meaning provided in Section 3.05(b)(ii)(B). "Remaining Land PILOT Period" has the meaning provided in Section 3.05(b)(i)(B). "Remaining Liability Portion" has the meaning provided in Section 43.06(a). "Rental" means Base Rent, Impositions, PILOT, College Point Improvement Fund Payments, any amounts payable pursuant to Article 20 or Section 36.02 and any other sums, costs or expenses which Tenant is obligated, pursuant to any of the provisions of this Lease, to pay. "Requirements" has the meaning provided in Section 16.01. -23- "Restoration" means either a Casualty Restoration or a Condemnation Restoration, or both. "Reviewable Features" has the meaning provided in Section 13.01. "Sales Tax Offset Limit" has the meaning provided in Section 3.08.1(f). "Sanitary Sewer" has the meaning provided in Section 27.01. "Sanitary Sewer Default Date" has the meaning provided in Section 27.03. "Sanitary Sewer Easement" means the permanent easement, approximately 30 feet wide, running along the portion of the Premises fronting on the Whitestone Expressway Service Road, more fully described in Exhibit E. "Sanitary Sewer Offset Period" has the meaning provided in Section 27.03. "Sanitary Sewer Work" has the meaning provided in Section 27.02. "Scheduled Completion Date" has the meaning provided in Section 13.01(b). "Scheduled Sanitary Sewer Completion Date" has the meaning provided in Section 27.02. "Self-Help Notice" has the meaning provided in Section 12.04(a). "Sewer Delay Offset Amount" has the meaning provided in Section 27.04. -24- "Sewer Delay Period" has the meaning provided in Section 27.04. "Sewer Drawings" has the meaning provided in Section 27.01. "Sewer Offset Amount" has the meaning provided in Section 27.03. "Sewer Plans" has the meaning provided in Section 27.01. "Sublease" means any sublease (including a sub-sublease or any further level of subletting), occupancy, license, franchise or concession agreement applicable to the Premises or any part thereof. "Subsequent Construction Work" means Construction Work other than construction of the Initial Improvements. "Substantial Completion Date" means the date on which the Construction of the Initial Improvements shall have been Substantially Completed, as certified by the Architect or Engineer of Record in accordance with Section 13.01(b)(viii) hereof. "Substantial Completion" or "Substantially Complete(d)" has the meaning provided in Section 13.01(b)(viii). "Substantially All of the Premises" means (a) with respect to a taking, such portion of the Premises as, when taken, would leave a balance of the Premises that, due either to the area so taken or the location of the part so taken in relation to the part not so taken, would not, under zoning laws and building regulations then existing, permit the Premises to -25- be used as a Printing Facility to the same extent that the Premises were used at the time of the taking including, without limitation, adequate parking and other ancillary uses such as a garage and (b) with respect to a casualty, such portion of the Premises as, when damaged, would leave a balance of the Premises that would not permit the Premises, in Tenant's reasonable opinion, to be used as a Printing Facility in the same manner and to the same extent that the Premises were used at the time of the casualty including, without limitation, adequate parking and other ancillary uses such as a garage. With respect to any taking that would not be deemed a taking of Substantially All of the Premises pursuant to clause (a) of the immediately preceding sentence, at Tenant's sole election, to be exercised by written notice to Landlord within one hundred eighty (180) days after a taking, Substantially All of the Premises shall be deemed to have been taken if the the portion of the Premises, when taken, would leave a balance of the Premises that, due either to the area so taken or the location of the part so taken to the part not so taken, would not, under zoning laws and building regulations then existing, permit the Improvements existing at the time of the taking to be expanded to a Printing Facility consisting of not less than 720,000 square feet of Gross Building Area and all facilities ancillary thereto including, without limitation, adequate parking and a garage. "Subtenant" means any subtenant, operator, licensee, franchisee, concessionaire or other occupant of the Premises or any portion thereof under a Sublease. -26- "Survey" means the survey of the Land performed by Robert A. Haynes, dated August 28, 1990, incorporated herein by reference. "Tax Benefits" has the meaning provided in Section 3.05(d)(i). "Taxes" has the meaning provided in Section 3.05(d)(i). "Tax Year" has the meaning provided in Section 3.05(d)(v). "Temporary Car Pound Relocation Site" has the meaning provided in Section 12.04(a). "Tenant" means the tenant under this Lease and, as of the Lease Execution Date, the Tenant is EDC; provided, however, that from and after the date of the contemplated assignment of this Lease to The New York Times Company, the term "Tenant" shall mean The New York Times Company and any successor to The New York Times Company; and provided, further, that, from and after such time as The New York Times Company or any successor transfers or assigns this Lease, in accordance with this Lease, the term "Tenant" shall mean the assignee or transferee. For so long as the "Tenant" is The New York Times Company or any successor thereto, the non-monetary obligations and covenants set forth in this Lease as being the obligations or covenants of "Tenant" shall apply only to and be performed by the Division and the employees assigned to such Division, and Landlord shall look solely to such Division for the performance -27- of such non-monetary obligations and covenants; provided, however, that any default by such Division in the performance of such non-monetary obligations or covenants shall be treated with the same force and effect pursuant to the applicable provisions of this Lease as if such default had been committed by "Tenant." "Tenant Indemnitees" has the meaning provided in Section 20.01A. "Tenant Readiness Date" has the meaning provided in Section 27.02. "Tenant's Property" means all moveable partitions, business and trade fixtures, business machinery and equipment, communications and office equipment, tools, supplies, and spare parts, whether or not attached to or built into the Premises, which are installed in the Premises by Tenant or any Subtenant, and all furniture, furnishings, and other moveable articles of personal property owned by Tenant or any Subtenant. Notwithstanding anything to the contrary set forth herein, Tenant's Property shall include, without limitation, printing presses and all other machinery and equipment used in the process of printing, bundling, collating and distributing newspapers, magazines and other printed materials. "Term" has the meaning provided in Article 2. "Title Matters" has the meaning provided in Article 2. "Transfer" has the meaning provided in Section 10.01(b). -28- "Transferee" has the meaning provided in Section 10.01(b). "Unavoidable Delays" means delays caused by strikes, slowdowns, walkouts, lockouts or other labor troubles; acts of God; catastrophic weather conditions; inability to obtain labor or materials due to labor disputes; court orders enjoining commencement or continuation of Construction Work; enemy action; civil commotion; shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency; failure or defect in the supply of electricity, oil, gas or water to the Premises provided that such failure or defect is not due to the action or inaction of Tenant or any of its contractors or their subcontractors; fire, casualty; the failure of the Lease Administrator to review, comment on, approve, disapprove and/or inform the Buildings Department of its approval of the Plans and Specifications within the specified time periods, provided that such failure is not a result of Tenant's failure to submit Plans and Specifications in sufficient detail to permit Lease Administrator to properly review such Plans and Specifications or Tenant's failure to submit Plans and Specifications appropriately modified to reflect Lease Administrator's comments thereon, provided that such comments were submitted to Tenant in writing in sufficient detail to make such modifications; the failure of EDC to disburse any Funding under -29- Funding Agreement #1; and/or any other cause or causes not within Tenant's control that are causing a delay in Tenant's performance of its construction obligations hereunder. Tenant shall make good faith efforts to notify the Lease Administrator in writing, stating when such delay commenced, not later than ten (10) Business Days after Tenant received knowledge of the occurrence of any of the foregoing conditions; provided, however, that Tenant's failure to so notify the Lease Administrator as aforesaid shall not affect the commencement of any Unavoidable Delay or otherwise result in any adverse consequences to Tenant under this Lease; and provided, further, that Tenant's financial condition or inability to obtain financing shall not constitute an Unavoidable Delay. "Urban Renewal Plan" means the Second Amended Urban Renewal Plan for the College Point II Industrial Development Project, dated February 1989, with (a) all amendments and modifications thereto from time to time up to and including the Lease Execution Date (but not subsequent to the Lease Execution Date, except as set forth in clause (b) of this sentence) and (b) any amendments or modifications thereto after the Lease Execution Date with respect only to landscaping, compliance with which would not require Tenant to incur a material cost. -30- ARTICLE 2 DEMISE OF PREMISES AND TERM OF LEASE Section 2.01. Demise of Premises; Term. Landlord does hereby demise and lease to Tenant, and Tenant does hereby hire and take from Landlord, the Premises, together with the Improvements to be constructed thereon and all easements, appurtenances and interests and other rights and privileges now or hereafter belonging or appertaining to the Premises, subject to the terms and conditions of this Lease, and subject also to (a) the reservation of the Sanitary Sewer Easement as set forth in Exhibit E and (b) those matters affecting title set forth in Exhibit G (the "Title Matters"), for a term (the "Term") commencing on the Possessory Date and expiring on the Expiration Date, as such Term may be extended pursuant to the provisions of Section 21.02 hereof. Section 2.02. Pre-Possessory Date Access and Use. Notwithstanding anything to the contrary contained herein, Tenant, from and after the date hereof, shall have a right of access to the entire Premises, subject to the terms and conditions hereinafter set forth in this Section 2.02, for the performance of Preliminary Site Work including, without limitation, the driving of test pilings, and such Construction Work in connection with the Construction of the Project that Tenant may be able to perform in light of the restrictions contained in this Section 2.02. Attached hereto as Exhibit I -31- and made a part hereof is a plan of the Land divided into three (3) parcels denominated as Parcel A, Parcel B, and Parcel C. As of the date hereof, the Car Pound occupies Parcel C only. Tenant's access to and use of Parcel A, Parcel B, and Parcel C shall be restricted as follows during the following time periods: (a) During the period commencing on the date hereof and ending on the Possessory Date, Tenant shall have the right to consruct a fence around Parcel A with such opening or openings to a street or streets that Tenant may deem necessary in order to obtain access to and use Parcel A for the purposes permitted by this Section 2.02, and Tenant shall have access to, and the sole and exclusive use of Parcel A, for the performance of Preliminary Site Work and Construction Work in connection with the Construction of the Project; (b) During the period commencing on the date hereof and expiring on the Possessory Date, Tenant shall not have access to Parcel C, except to the extent that such access may be granted by the New York City Police Department to perform test soil borings and surveys ("Permitted Testing") or such other Preliminary Site work that the New York City Police Department may permit; and (c) During the period commencing on (x) the date hereof, and expiring on (y) the Possessory Date, Tenant shall have access to Parcel B for the purposes of: (l) erecting one -32- or more temporary structures and maintaining vehicles or other equipment thereon, (2) carving out an opening in the existing fence (fronting on Linden Boulevard) so as to provide vehicular access to Parcel B, (3) filling and/or paving Parcel B and (4) erecting such fence or fences, if any, that Tenant may deem appropriate to secure its structures and equipment. Tenant's access to and use of portions of the Premises prior to the Possessory Date shall be upon all of the terms and conditions of this Lease, except for such terms which by their nature are inapplicable to periods prior to the Possessory Date (e.g., the obligation to pay Rental). -33- ARTICLE 3 RENTAL Section 3.01. Method and Place of Payment. Except as otherwise specifically provided herein, all Rental shall be paid without setoff or deduction and without prior notice or demand. All Rental payable to Landlord (except PILOT, which is payable in accordance with Section 3.05, Public Purpose Payments, if any, which are payable pursuant to Section 36.02, and Impositions, if the rules and regulations of the City governing such payment are to the contrary) shall be paid by good checks payable to the order of Landlord and drawn on a bank which is either (i) a bank in the top one hundred (100) banks in the United States in total assets, (ii) a U.S. money center bank or (iii) a bank that is a member of the New York Clearing House Association (or any successor body of similar function), mailed or delivered to Landlord c/o New York City Economic Development Corporation, 110 William Street, New York, New York, 10038, Attention: Lease Administration, or at such other place as Landlord shall direct by notice to Tenant. Impositions shall be payable in the form and to the location provided by rules and regulations governing the payment of such as if Tenant owned the Premises. Section 3.02. Base Rent. Tenant shall pay Landlord base rent ("Base Rent") during the Term as follows: -34- (a) if the Construction Commencement Date occurs on or prior to the fourth (4th) anniversary of the Lease Execution Date (the "4th Anniversary Date"): (i) for the period commencing with the Possessory Date and continuing until the third (3rd) anniversary of the Construction Commencement Date, Base Rent will be at an annual rate of $1.00 (Landlord hereby acknowledges receipt of $7.00 as advance payment on account of such Base Rent); and (ii) from the day after the third (3rd) anniversary of the Construction Commencement Date, and for each Lease Year thereafter during the Term, Base Rent shall be at the annual rate of five hundred fifty-two thousand dollars ($552,000). (b) if the Construction Commencement Date shall not have occurred on or prior to the 4th Anniversary Date, Base Rent for the period commencing with the Possessory Date and ending on the Expiration Date shall be at the annual rate of five hundred fifty-two thousand dollars ($552,000). (c) Payment of Base Rent. (i) Period. Base Rent shall be paid in monthly installments, the first monthly installment payable in advance on the Possessory Date for the calendar month or portion thereof in which it falls due and on the first day of each calendar month thereafter. -35- (ii) Prorations of Base Rent. Base Rent which is due for any period of less than a full calendar month shall be appropriately apportioned on a 365- or 366-day basis. Section 3.03. [Intentionally Omitted] Section 3.04. [Intentionally Omitted] Section 3.05. Payments in Lieu of Taxes. (a) Tenant's Obligation to Pay PILOT. For each Tax Year or portion thereof within the Term, Tenant shall pay as Rental (and not as a tax) to Landlord, c/o City Collector, Department of Finance, Bureau of Central Real Estate, 25 Elm Place, Brooklyn, New York 11201 (or such other address of which the Landlord shall give Tenant notice), in accordance with notice of the amount due and payable, an annual sum (each such sum being hereinafter referred to as a "PILOT") in the aggregate amounts and in the manner determined as provided in Section 3.05(b) (b) Amount of PILOT. PILOT shall be payable in the following amounts: (i) Land PILOT. Tenant shall make payments in lieu of real estate taxes on the Land (the "Land PILOT") for each Fiscal Year or portion thereof included within any period (apportioned, on a 365- or 366-day basis, as appropriate, for any part of a Fiscal Year) during the Term, payable in arrears in equal semi-annual installments within ten (10) days after the receipt of a notice from Lease Administrator, as follows: -36- (A) for the period (the "Initial Land PILOT Period") commencing with the Possessory Date and continuing until the date (the "Initial Land PILOT Period Termination Date") which shall be the earlier of (1) the Substantial Completion Date or (2) (x) if the Possessory Date occurs on or prior to the 4th Anniversary Date, the sixth (6th) anniversary of the Lease Execution Date or (y) if the Possessory Date occurs after the 4th Anniversary Date, the second (2nd) anniversary of the Possessory Date, Land PILOT for each Fiscal Year within such period will be in an amount equal to (I) the lesser of (x) $299,480 ("Fixed Land PILOT") or (y) Land Taxes for the Fiscal Year less (II) $100,000; (B) for the period (the "Remaining Land PILOT Period") commencing with the day after the Initial Land PILOT Period Termination Date and continuing until the end of the Term, Land PILOT for each Fiscal Year within such period will be in an amount equal to -37- (I) the lesser of (aa) Land Taxes for the Fiscal Year, or (bb) Fixed Land PILOT, increased as of the beginning of the first full Fiscal Year of the Remaining Land PILOT Period, and as of the beginning of every Fiscal Year thereafter, by four percent (4%) of the amount paid as Land PILOT with respect to the prior Fiscal Year or portion thereof, less (II)(aa) (if the Initial Land PILOT Period Termination Date shall have occurred on or prior to the Substantial Completion Date), $100,000 per annum for the period commencing on the day after the Initial Land PILOT Period Termination Date and ending on the Substantial Completion Date, and (bb) $200,000 per annum for the period commencing on the day after the Substantial Completion Date and ending on the date that is the 20th anniversary of the Possessory Date. (C) In no event will Tenant be obligated to pay more under the foregoing provisions of this Section 3.05(b)(i) than Maximum Land PILOT. -38- (ii) Improvements PILOT. Tenant shall make payments in lieu of real estate taxes on the Improvements (the "Improvements PILOT") for each Tax Year (appropriately apportioned on a 365- or 366-day basis for any period of less than a full Tax Year) during the Term, payable in arrears in equal semi-annual installments within ten (10) days after the receipt of a notice from Lease Administrator, as follows (subject to abatement as provided in clause (C) below): (A) for the period (the "Initial Improvements PILOT Period") commencing with the Construction Commencement Date and continuing until the date (the "Full Assessment Date") on which the Initial Improvements have been fully assessed by the Finance Department for taxing purposes, the Improvements PILOT for each Tax Year included within such period will be an amount equal to $110.00 (the "Fixed Improvements Value") multiplied by (1) the actual total square footage of Gross Building Area completed as of the time of the assessment for each Tax Year; (2) forty-five percent (45%); and (3) the fixed tax rate of 10.698%; (B) for the period (the "Remaining Improvements PILOT Period") commencing with the day after the Full Assessment Date and continuing until -39- the end of the Term, the Improvements PILOT for each Tax Year within such period will be in an amount equal to the following: (1) with respect to Improvements (exclusive of Expansion Improvements) completed on or prior to the Full Assessment Date, the lesser of (a) Improvements Taxes for such Tax Year (exclusive of Improvement Taxes attributable to Expansion Improvements), or (b) an amount equal to the Fixed Improvements Value decreasing, at the rate of one percent (1%) per annum (with the first one percent (1%) decrease to take effect on the first anniversary of the Full Assessment Date), multiplied by (x) the actual total square footage of Gross Building Area of such Improvements, (y) forty-five percent (45%), and (z) the fixed tax rate of 10.698%; (2) with respect to any Improvements completed after the Full Assessment Date that add square footage of Gross Building Area, including without limitation, expansions or modifications to existing Improvements (each such Improvement -40- hereinafter individually referred to as an "Expansion Improvement"), the lesser of (a) Improvements Taxes for such Tax Year attributable to such Expansion Improvement, or (b) an amount equal to the Fixed Improvements Value increasing at the rate of three percent (3%) of the Fixed Improvements Value per annum from the Full Assessment Date until the date on which the Expansion Improvement being assessed was substantially completed, and decreasing thereafter at the rate of one percent (1%) of the Fixed Improvements Value (as increased by such three percent (3%) per annum increases) per annum (with the first such one percent (1%) decrease to take effect on the first anniverary of the substantial completion of the Expansion Improvement), multiplied by (x) the actual total square footage of Gross Building Area of the Expansion Improvement constructed that adds square footage of Gross Building Area, (y) forty-five percent (45%), and (z) the fixed tax rate of 10.698%; -41- (3) with respect to any Improvements completed after the Full Assessment Date that do not add square footage of Gross Building Area, an amount equal to zero. The amount of Improvements PILOT (exclusive of Improvements PILOT attributable to Expansion Improvements) for any Tax Year, computed pursuant to the foregoing paragraphs of this Section 3.05(b)(ii)(B) as of the beginning of such Tax Year, is hereinafter referred to as the "Normal Improvements PILOT" for such Tax Year. The amount of Improvements PILOT attributable to an Expansion Improvement for any Tax Year, computed pursuant to the foregoing paragraphs of this Section 3.05(b)(ii)(B) as of the beginning of such Tax Year, is hereinafter referred to as the "Normal Expansion Improvements PILOT" for such Tax Year. (C) Abatement of Improvements PILOT. (i) The Improvements PILOT computed in accordance with Section 3.05(b) with respect to Improvements completed on or prior to the Full Assessment Date shall be subject to the following abatements from and after the Construction Commencement Date: for the first fifteen (15) Tax Years after the Construction Commencement Date, Tenant shall be exempt from Improvements PILOT -42- in an amount equal to one hundred percent (100%) of Normal Improvements PILOT for each such Tax Year or portion thereof; for the following nine (9) Tax Years thereafter (i.e., from Tax Year 16 through and including Tax Year 24), Tenant shall be exempt from Improvements PILOT in an amount equal to the following percentages of Normal Improvements PILOT determined in Tax Year 15 ("15th Year Normal Improvements PILOT"): 90% thereof in Tax Year 16, decreasing by 10% of 15th Year Normal Improvements PILOT each Tax Year thereafter; and for Tax Year 25, Tenant shall be exempt from Improvements PILOT in an amount equal to 10% of 15th Year Normal Improvements PILOT. The computation of the abatements described above are illustrated as follows: Tax Years Exemption 1 - 15 100% of the Normal Improvements PILOT for such Tax Year 16 90% of 15th Year Normal Improvements PILOT 17 80% of 15th Year Normal Improvements PILOT 18 70% of 15th Year Normal Improvements PILOT 19 60% of 15th Year Normal Improvements PILOT 20 50% of 15th Year Normal Improvements PILOT 21 40% of 15th Year Normal Improvements PILOT -43- 22 30% of 15th Year Normal Improvements PILOT 23 20% of 15th Year Normal Improvements PILOT 24 10% of 15th Year Normal Improvements PILOT 25 10% of 15th Year Normal Improvements PILOT (ii) The Improvements PILOT computed in accordance with Section 3.05(b) with respect to an Expansion Improvement shall be subject to the following abatements (which abatements shall be available after the expiration or earlier termination of this Lease only if Tenant shall have applied for and qualified for same pursuant to the provisions of Section 3.11 hereof or otherwise) from and after the date on which Tenant commences construction of such Expansion Improvement (the "Expansion Construction Commencement Date"): for the first fifteen (15) Tax Years after the Expansion Construction Commencement Date, Tenant shall be exempt from Improvements PILOT in an amount equal to one hundred percent (100%) of Normal Expansion Improvements PILOT for each such Tax Year or portion thereof; for the following nine (9) Tax Years thereafter (i.e., from the sixteenth (16th) through and including the twenty-fourth (24th) Tax Year after the Expansion Construction Commencement Date), Tenant shall be exempt from Improvements PILOT in an amount equal to the following percentages of Normal Expansion Improvements PILOT determined in the fifteenth (15th) Tax Year following the Expansion -44- Construction Commencement Date ("15th Year Expansion Normal Improvements PILOT"): 90% thereof in the 16th Tax Year following the Expansion Construction Commencement Date, decreasing by 10% of 15th Year Normal Expansion Improvements PILOT each Tax Year thereafter; and for the 25th Tax Year after the Expansion Construction Commencement Date, Tenant shall be exempt from Improvements PILOT in an amount equal to 10% of 15th Year Normal Expansion Improvements PILOT. (D) In no event will Tenant be obligated to pay more under the foregoing provisions of this Section 3.05(b)(ii) than Maximum Improvements PILOT. (c) Effect of Abandonment of Project. Notwithstanding the foregoing provisions of this Section 3.05, from and after Abandonment of the Project, PILOT shall be equal to Taxes. (d) Definitions. (i) "Taxes" means the real property taxes determined with respect to the assessed value of the Premises pursuant to the provisions of the New York State Real Property Tax Law, Chapter 58 of the Charter of the City of New York and Title 11, Chapters 2, 3 and 4 of the Administrative Code of the City of New York, as the same may now exist or hereafter be amended, or any successor provision, statute or ordinance (whether or not the Premises are actually exempt by law from such real property taxation, assessment, levy or payment for the Tax Year in question), subject to the provisions of Section -45- 35.01. Notwithstanding anything to the contrary contained herein, for the sole purpose of computing the amounts of PILOT payable pursuant to the terms of this Lease (e.g., if PILOT shall be equal to Taxes due to an Abandonment of the Project or if Taxes are lower than the amounts of PILOT that would otherwise be payable pursuant to the terms of this Lease), Taxes shall be computed taking into account any and all tax benefits, exemptions, abatements, deferments or reductions that Tenant would be entitled to if Tenant were the owner, rather than the lessee, of the Property including, without limitation, the benefits of the Industrial and Commercial Incentive Program (together, the "Tax Benefits"), with the same force and effect as if Tenant had timely filed any necessary applications or taken any necessary administrative steps to obtain such Tax Benefits, without regard to whether Tenant actually did so. (ii) "Land Taxes" means the portion of Taxes attributable to the Land. (iii) "Improvements Taxes" means the portion of Taxes attributable to the Improvements. (iv) "Fiscal Year" means any 12 month period falling within the term of the Lease, commencing on July 1 of any calendar year and ending on June 30 of the following calendar year. (v) "Tax Year" means a full City Fiscal Year except that the period of time from the Construction -46- Commencement Date to the first day of the first full City Fiscal Year occurring thereafter shall be deemed to be a Tax Year if it is longer than six (6) months and, if it is shorter than six (6) months, such period shall be deemed to be part of such next occurring Tax Year. Section 3.06. Offset for Funding Default. Pursuant to Section 4.01(a) hereof, if EDC shall be in default in its obligations to disburse to Tenant any Funding in accordance with the terms and conditions of Funding Agreement #1, Funding Agreement #2, Funding Agreement #3 or Funding Agreement #4, and such default shall not have been cured by EDC within thirty (30) days after notice from Tenant, Tenant may (unless and until there has been an Abandonment of the Project) offset the amount of such defaulted Funding against future installments of Rental (excluding Impositions, but including College Point Improvement Fund Payments) until such time as the aggregate amount of such offsets equals the aggregate amount of defaulted Funding. Section 3.07. [Intentionally Omitted]. Section 3.08. Exemption From Certain Taxes. Section 3.08.1. Exempt Taxes. Subject to the provisions of Article 28 hereof, Landlord warrants and represents that Tenant shall not be required to pay, and Landlord hereby agrees to indemnify, defend and hold Tenant harmless from and against, any and all of the following taxes, assessments, levies, fees, charges, payments or amounts with respect to the Premises or the operation thereof (other than -47- PILOT, College Point Improvement Fund Payments and payments to a BID pursuant to the provisions of Section 3.09(c) hereof), whether or not any taxing authority has determined that Tenant is legally or administratively entitled to an exemption from any such amounts (the "Exempt Taxes"): (a) Taxes; (b) any new or additional real estate tax or franchise, income, transit, profit, "gains", "value added" or other tax or governmental imposition imposed by reason of the ownership or occupancy of the Property, however designated, that may be imposed or levied as a substitution in whole or in part for, or in lieu of, or in addition to, any tax which would constitute Taxes, excluding, however, any such new or additional tax imposed or levied by New York State (and not by the City) for the benefit of New York State (and not for the City) from which the City lacks the legal authority to exempt the Property; (c) (i) assessments and special assessments imposed by reason of the ownership or occupancy of the Property, excluding, however, any such assessments or special assessments imposed or levied by New York State (and not by the City) for the benefit of New York State (and not for the City) from which the City lacks the legal authority to exempt the Property, and (ii) amounts that constitute Exempt Taxes pursuant to the provisions of Section 3.09(c)(iii) hereof; -48- (d) for so long as there has been no Abandonment of the Project, the New York City Commercial Rent or Occupancy Tax or any similar or successor tax, or any tax (including, without limitation, any tax on personal property) levied at any time by the City as a substitution in whole or in part for, or in lieu of, or in addition to, such a tax; (e) with respect to materials, fixtures and Equipment purchased and incorporated into the Improvements, New York City sales and compensating use taxes, or any tax imposed at any time by the City as a substitution in whole or in part for, or in lieu of, or in addition to, such taxes; (f) with respect to machinery and equipment (including, without limitation, printing presses) utilized in connection with the production of newspapers and magazines or other periodicals or printed materials (but not the installation, maintenance and repair of such machinery and equipment), New York City sales and compensating use taxes; provided, however, that if in the future the City imposes a sales and compensating use tax on such machinery or equipment, such taxes shall nevertheless remain Exempt Taxes, but only (i) if such taxes are imposed in connection with the initial equipping of the Minimum Printing Facility, the Five Press Facility, the Six Press Facility, the Seven Press Facility and/or the Eight Press Facility (as such terms are defined in Funding Agreement #1), respectively, and (ii) up to the Sales -49- Tax Offset Limit. For purposes only of this Section 3.08.1(f), the "Sales Tax Offset Limit" shall mean an amount of such taxes equal to: (i) with respect to machinery and equipment utilized in the Minimum Printing Facility, an amount equal to $7,437,500.00, (ii) with respect to machinery and equipment utilized in that portion of the Five Press Facility which is in addition to the Minimum Printing Facility, an amount equal to $1,859,375.00, (iii) with respect to machinery and equipment utilized in that portion of the Six Press Facility which is in addition to the Five Press Facility, an amount equal to $1,965,625.00, (iv) with respect to machinery and equipment utilized in that portion of the Seven Press Facility which is in addition to the Six Press Facility, an amount equal to $1,753,125.00, and (v) with respect to machinery and equipment utilized in that portion of the Eight Press Facility which is in addition to the Seven Press Facility, an amount equal to $1,859,375.00; (g) to the extent imposed in connection with (x) the execution, structure and/or performance of this Lease, (y) the assignment of this Lease from EDC to The New York Times Company or (z) the transfer of the Property to Tenant pursuant to its Purchase Option set forth in Article 21 hereof: (1) the New York City Real Property Transfer Tax; (2) the New York State Real Estate Transfer Tax; (3) the New York State Real Property Transfer Gains Tax; -50- (4) the New York State or City Mortgage Recording Tax; or (5) any tax or imposition levied at any time by any Governmental Authority as a substitution in whole or in part for, or in lieu of, or in addition to, the taxes described in subsections (1) through (4) of this Section 3.08.1(g); and (h) any interest, penalties, or additions to the tax imposed with respect or relating to any of the taxes or charges enumerated in the foregoing Sections 3.08.1(a) through 3.08.1(g), any other amounts imposed on, assessed against or incurred by Tenant with respect or relating to, or based upon, any of such taxes or charges, and any amounts, charges, liabilities or expenses incurred by Tenant in contesting the imposition or assessment of any of such taxes, charges or other amounts. Section 3.08.2. Procedures. (a) Landlord, at no cost to Tenant, shall cooperate with Tenant's efforts to establish Tenant's entitlement to exemption from Exempt Taxes imposed or administered by any Governmental Authority (including, without limitation, the City), and with Tenant's instituting, defending and prosecuting any applications, audits, contests, or administrative or judicial proceedings necessary to establish Tenant's -51- entitlement to such exemption. Notwithstanding anything to the contrary contained herein, Tenant shall notify Landlord in writing if Tenant does not intend to institute or prosecute any claim of exemption, contest or appeal or initiate or prosecute any administrative or judicial proceedings to establish such exemption because Tenant believes in good faith, for reasons such as a change in law or taxing policy or otherwise, that such exemption will not be upheld notwithstanding that the taxes in question fall within the meaning of Exempt Taxes, in which event Tenant shall have no obligation to institute or prosecute any such claim of exemption, contest, appeal or administrative or judicial proceeding unless Landlord directs Tenant in writing to do so (and states the grounds on which the exemption may be claimed) within thirty (30) days after its receipt of Tenant's written notice, it being understood and agreed that (i) any costs incurred in connection therewith by Tenant shall constitute Exempt Taxes pursuant to Section 3.08.1(h) hereof and (ii) in either event, if any such Exempt Taxes are paid by Tenant, then Tenant shall have the right of offset set forth in Section 4.01(e) hereof and/or its right pursuant to Section 4.03 hereof, as the case may be. (b) With respect to the Exempt Taxes described in Section 3.08.1(g) hereof, Landlord and Tenant shall comply with all procedural and return filing requirements applicable in connection with the execution, commencement and performance of this Lease, the assignment of this Lease from EDC to The New -52- York Times Company or the transfer of the Property to Tenant pursuant to its Purchase Option set forth in Article 21 hereof. (c) If any Exempt Taxes are asserted by any Governmental Authority (including the City) to be payable by Tenant, Tenant shall pay the same as and when due and payable, subject to Tenant's right pursuant to Section 4.01(e) hereof to an offset against Rental (other than Impositions or College Point Improvement Fund Payments) in an amount equal to such Exempt Taxes with interest thereon at the Prime Rate from the date paid through the date of offset against Rental and/or its right pursuant to Section 4.03 hereof, as the case may be. Notwithstanding anything to the contrary contained herein, with respect to the transfer of the Property to Tenant pursuant to its Purchase Option set forth in Article 21 hereof, Landlord shall pay the taxes described in Section 3.08.1(g) hereof, as applicable, to the appropriate taxing authority on the date of execution and delivery by Landlord to Tenant of the deed to the Property, except as otherwise provided in Section 7.1.1 of the Purchase Agreement, unless prior thereto Tenant has been furnished by Landlord with a written determination of the appropriate taxing authority that such tax is not payable or that Tenant is exempt from such tax with respect to the transaction involved. (d) The provisions of Section 3.08.3 below shall supercede the provisions of Sections 3.08.2(a) and (c) hereof with respect to Exempt Taxes imposed or asserted subsequent to -53- the expiration or termination of this Lease or subsequent to the transfer of the Property to Tenant pursuant to its Purchase Option set forth in Article 21 hereof. Section 3.08.3. Exempt Taxes Imposed After Lease Expiration or Termination. In the event that at any time after the expiration or termination of this Lease, or subsequent to the transfer of the Property to Tenant pursuant to its Purchase Option set forth in Article 21 hereof (including as a result of a post-transfer audit), any Exempt Taxes shall be imposed upon or asserted to be payable by Tenant (including The New York Times Company and/or any successor or successors-in-interest to the rights of Tenant under this Lease) with respect to (i) the Premises for any period of time prior to such expiration or termination, (ii) the execution or performance of this Lease, (iii) the assignment of this Lease from EDC to The New York Times Company, or (iv) in connection with the transfer of the Property to Tenant pursuant to such Purchase Option, then Tenant shall inform Landlord thereof in writing prior to the date by which Tenant might be subject to any penalty, collection proceeding or other adverse consequence for failure to pay such Exempt Taxes and, if requested by Landlord in writing, shall refrain from paying such Exempt Taxes for so long as Tenant may do so without penalty or adverse consequences (including, without limitation, collection proceedings) during which period Landlord shall attempt to reverse the imposition of such Exempt Taxes, and if Landlord fails to do so before Tenant is required to pay such Exempt Taxes, Landlord shall pay to Tenant (and/or such successor or -54- successors-in-interest, as the case may be) the amount of such Exempt Taxes within ninety (90) days after Landlord's receipt of a notice from Tenant (including The New York Times Company and/or any successor or successors-in-interest to the rights of Tenant under this Lease) accompanied by proof of payment of such Exempt Taxes. Section 3.08.4. Survival. This Section 3.08 shall survive the assignment of this Lease from EDC to The New York Times Company, any further assignment of this Lease by Tenant pursuant to the terms hereof, the expiration or termination of this Lease, and any transfer of the Property to Tenant pursuant to such Purchase Option. Section 3.09. Impositions and College Point Improvement Fund Payments. (a) Obligation to Pay. Tenant shall pay Impositions and College Point Improvement Fund Payments. (b) Definitions. (i) "Imposition" or "Impositions" means water meter rates and charges and any other governmental charges (other than Taxes and Exempt Taxes) which at any time during the Term are charged with respect to the Premises which, if not paid, would (but for the City's ownership of the Premises) be or become a lien or other encumbrance on the Premises or any part thereof. -55- (ii) "College Point Improvement Fund" or "Fund" means a separate fund consisting of sums paid to EDC by Tenant and other owners and occupants of similarly burdened property in the College Point Industrial Park, to be used by EDC solely for the construction, maintenance and improvement of (1) roads, sewers, drainage systems, buffer strips, utilities and sidewalks within College Point Industrial Park, and (2) other facilities of general benefit to College Point Industrial Park or portions thereof as determined by EDC in its discretion. (iii) "College Point Improvement Fund Payments" means payments due on the first days of January, April, July and October, commencing on the first of such days to occur after the fourth (4th) anniversary of the Possessory Date in an amount equal to one-eighth of one percent (0.125%) of the assessed value of the Land and Improvements, as such assessed value is determined by the Finance Department for Taxes, without regard to whether the City is Landlord; provided, however, that for purposes hereof, in no event shall (a) the assessed value of the Land be deemed to exceed $2,799,401 (increased by four percent (4%) per annum beginning with the first full Fiscal Year of the Remaining Land PILOT Period) or (b) the -56- assessed value of the Improvements be deemed to exceed the assessed value used for each respective Tax Year to compute the Maximum Improvements PILOT. (c) Provisions Applicable to College Point Improvement Fund Payments. (i) All College Point Improvement Fund Payments shall be made by Tenant to EDC. (ii) Tenant's obligation to make College Point Improvement Fund Payments during the Term shall be enforceable by EDC, or its successor or assign or designee. If there shall be established within College Point Industrial Park, or any portion thereof, a Business Improvement District ("BID") pursuant to Article 2-B of the General City Law or any successor statute thereto, then, if the Premises are included within such BID and charges or assessments with regard to the BID must be or are paid in connection with the Premises in an amount in the aggregate less than, equal to or greater than the amount that would be payable by Tenant to EDC or its successor or assign or designee for the Fund in connection with the Premises, then (x) Tenant shall, subject to the provisions of Section 3.09(c)(iii) below, pay such charges or assessments and (y) Tenant shall be relieved and discharged from any obligation to make any further -57- College Point Improvement Fund Payments with respect to any period from and after the date to which Tenant's first payment to such BID is applicable, and EDC shall promptly refund to Tenant any portion of any College Point Improvement Fund Payments made by Tenant which were applicable to any period beyond such date. If the funds received by the BID in connection with the Premises and other properties in such BID (the "Burdened Properties"), in EDC's or its successor's or assign's or designee's reasonable determination, are devoted to similar purposes as those to which the Fund is devoted, then the district management association formed in connection with such BID shall succeed to EDC's or its successor or assign's or designee's functions in connection with the Fund with regard to the area in such BID, and EDC or its successor or assign or designee shall transfer moneys within the Fund on hand and attributable to the properties included within such BID to such district management association. (iii) Landlord hereby assigns to Tenant, effective as of the date hereof, all of its authority and right, as landowner, to attend hearings and meetings and to vote in connection with the formation of any BID affecting the Property and participate in -58- the decision-making of such BID, and Landlord shall execute and deliver any documents required by such BID or otherwise to evidence such assignment. In the event that either (x) Landlord shall fail to take such steps as may be required of it to transfer to Tenant all of Landlord's authority and right to vote and participate in connection with a BID to the full extent set forth in the immediately preceding sentence or (y) a BID is formed without Tenant's participation as a result of Landlord's failure to take the steps required by subclause (x) above before the formation of any such BID or Landlord's failure to forward to Tenant any notice in connection therewith forwarded to Landlord rather than to Tenant, and Tenant is required to make payments thereto in excess of the amounts that would be payable by Tenant to the Fund, then all amounts payable with respect to such BID with respect to the Property shall constitute Exempt Taxes. (d) Apportionment. Any Imposition or College Point Improvement Fund Payment payable with respect to a period part of which is included within the Term and a part of which precedes the Possessory Date or follows the Expiration Date, shall be appropriately apportioned on the basis of a 365- or 366-day year. -59- Section 3.10. Single Tax Lot. Promptly following the execution of this Lease, Landlord and Tenant, at no cost to Tenant, shall cause the Premises to be identified by a single Block and Lot Number on the Tax Map of the Borough of Queens, County of Queens, City and State of New York. The Premises have been tentatively assigned new tentative block and lot numbers Block 4282, Lot 100 for future identification. Section 3.11. Tax Benefits Applications. Landlord and Tenant acknowledge that it may be necessary for Tenant to file for Tax Benefits during the Term to preserve Tenant's entitlement to such Tax Benefits after the expiration or early termination of this Lease. In furtherance thereof, Landlord will cooperate in any manner reasonably requested by Tenant (including, without limitation, the execution and delivery of applications and other documents) to enable Tenant to qualify for or obtain and thereafter keep in full force and effect the maximum Tax Benefits available to Tenant at any time during the Term. During the Term, Landlord shall comply in a timely manner with any rules and regulations that may be necessary to preserve the maximum Tax Benefits for the benefit of Tenant, as the same shall apply to Landlord. Nothing contained herein shall be construed as imposing any obligation on Tenant to file for any Tax Benefits and, during the Term, for purposes of computing PILOT payable under this Lease, Tenant shall be deemed to have filed for and obtained and maintained the -60- maximum Tax Benefits available to it, as more particularly set forth in Section 3.05(d)(i) hereof. The provisions of this Section 3.11 are intended to apply to the City only in its capacity as Landlord and not in its municipal capacity. -61- ARTICLE 4 OFFSETS AGAINST RENTAL Section 4.01. Offsets Against Rental. Subject to the provisions of this Article 4, Tenant shall have the right to offset against installments of Rental (exclusive of Impositions or College Point Improvement Fund Payments; provided, however, that Tenant shall have a right of offset against College Point Improvement Fund Payments with respect to the amount set forth in Section 4.01(a) below) coming due under this Lease, any and all of the following amounts (the "Offset Amounts"): (a) an amount equal to that portion of the Funding, if any, which EDC fails to pay to Tenant in accordance with the provisions of Funding Agreement #1, Funding Agreement #2 , Funding Agreement #3 and/or Funding Agreement #4; (b) an amount equal to any amounts other than the Funding owed to Tenant by EDC pursuant to the provisions of Funding Agreement #1, Funding Agreement #2, Funding Agreement #3 or Funding Agreement #4, but not paid; (c) an amount equal to the Car Pound Offset Amount, computed in accordance with the provisions of Article 12 hereof; (d) an amount equal to the Sewer Offset Amount or the Sewer Delay Offset Amount, computed in accordance with the provisions of Article 27 hereof; -62- (e) an amount equal to any Exempt Taxes paid by Tenant, with interest thereon at the Prime Rate from the date paid through the date of offset against Rental; (f) an amount equal to the Plans and Specifications Offset Amount, computed in accordance with the provisions of Section 13.01(c) hereof; (g) an amount equal to the PILOT Refund Amount, with interest, computed in accordance with the provisions of Section 35.01(c) hereof; (h) [Intentionally Omitted] (i) [Intentionally Omitted] (j) [Intentionally Omitted] (k) an amount equal to any amount owed to Tenant by Landlord pursuant to the provisions of this Lease; (l) an amount equal to the amount of any judgment obtained by Tenant against the City, EDC or Landlord in connection with this Lease or Funding Agreement #1, Funding Agreement #2, Funding Agreement #3 or Funding Agreement #4; (m) an amount equal to the Offset Portion; and (n) an amount equal to any other amount permitted to be offset against Rental pursuant to any provision of this Lease. Section 4.02. Notice of Offset. Tenant shall give Landlord at least thirty (30) days' prior written notice (an "Offset Notice") of its intention to offset any Offset Amounts against Rental. -63- Section 4.03. Inability to Take Full Amount of Offset. In the event that Tenant exercises its option to purchase the Property pursuant to Article 21 hereof, the Purchase Price shall be reduced by any amounts that Tenant is entitled to offset against Rental pursuant to the provisions of this Lease, which amounts have not been so offset as of the date on which transfer of title to the Property to Tenant is accomplished, and if such amounts shall reduce the Purchase Price below zero, the amount by which such amounts exceed the Purchase Price shall be due and payable by Landlord to Tenant within forty-five (45) days after the transfer of title to Tenant. In the event that this Lease is terminated for any reason other than the exercise by Tenant of its option to purchase the Property prior to the date on which Tenant has offset against Rental the full amount that it is entitled to so offset, Landlord shall immediately pay to Tenant that portion of the amount that Tenant was unable to offset against Rental prior to such Lease termination. Notwithstanding anything to the contrary contained herein, the termination of this Lease shall not be delayed by the pendency of any dispute regarding the amounts that Tenant is entitled to offset against Rental. -64- ARTICLE 5 PROHIBITION AGAINST LANDLORD TRANSFERS AND ENCUMBRANCES Section 5.01. Prohibited Encumbrances. Landlord shall not place or permit to be placed on or with respect to the Premises any liens, charges, easements, agreements of record, encumbrances or other objections to title ("Prohibited Encumbrances") other than Permitted Encumbrances (as such term is defined in the Purchase Agreement). In the event that any Prohibited Encumbrances shall be placed on or with respect to the Premises, Landlord, at Landlord's sole cost and expense, shall promptly take all such actions as may be necessary (including, without limitation, the commencement of and the diligent prosecution of legal proceedings and the payment of money) to remove such Prohibited Encumbrances. Landlord shall also pay to Tenant any damages (other than consequential damages suffered by Tenant) or costs and expenses that Tenant may suffer or incur by reason of Landlord's breach of and/or default under the provisions of this Article 5. Section 5.02. Prohibited Transfers. Landlord shall not (i) transfer its interest in this Lease and/or the Premises to any entity that is not a municipal entity, (ii) transfer its interest in this Lease to a municipal entity without simultaneously transferring its interest in the Premises to such municipal entity, (iii) transfer its interest in the Premises to a municipal entity without simultaneously -65- transferring its interest in this Lease to such municipal entity, (iv) transfer its interest in this Lease and/or the Premises to any municipal entity if the effect of such transfer would be to diminish or adversely affect in any manner whatsoever Tenant's rights under this Lease, Funding Agreement #1, Funding Agreement #2, Funding Agreement #3, Funding Agreement #4, the Power Agreement or any program, statute, rule or policy, including, without limitation, the Energy Cost Savings Program, or (v) transfer its interest in this Lease to any municipal entity without submitting to Tenant at least ten (10) Business Days prior to the effective date of such transfer (A) an agreement signed by such municipal entity, in form and substance reasonably satisfactory to Tenant, pursuant to which such municipal entity agrees to assume all of the obligations of Landlord under this Lease and (B) proof reasonably satisfactory to Tenant that such municipal entity has the requisite power and authority and has obtained all necessary authorizations, approvals, consents, resolutions or other documents of any nature whatsoever to enable it to fully perform all of the obligations of Landlord under this Lease including, without limitation, Landlord's obligations pursuant to Article 21 hereof. -66- ARTICLE 6 LATE CHARGES If any payment of Rental is not received by Landlord within ten (10) days after notice of an overdue payment has been sent to Tenant, a late charge on the sums so overdue, calculated at the Late Charge Rate from the date such Rental first becomes due to the date on which actual payment of the sums is received by Landlord, shall become due and payable to Landlord as liquidated damages for interest lost and the administrative costs and expenses incurred by Landlord by reason of Tenant's failure to make prompt payment. Tenant shall pay Landlord all late charges on demand, which may be made from time to time. No failure by Landlord to insist upon the strict performance by Tenant of its obligations to pay late charges shall constitute a waiver by Landlord of its right to enforce the provisions of this Article 6 in any instance thereafter occurring. -67- ARTICLE 7 INSURANCE Section 7.01. Insurance Requirements. (a) Liability Insurance. At all times during the Term, Tenant, at its sole expense, shall carry or cause to be carried insurance against all liability with respect to the Premises and the operations related thereto, whether conducted on or off the Premises, in an amount not less than twenty-five million dollars ($25,000,000) per occurrence and designating Landlord and Lease Administrator as an additional insured. Such insurance shall meet all of the standards, limits, minimums and requirements described in Section 7.07. (b) Property Insurance. At all times during the Term, Tenant, at its sole cost and expense, shall carry or cause to be carried All Risk property damage insurance protecting Tenant against loss to the Improvements, and meeting all of the standards, limits, minimums and requirements described in Section 7.08. (c) Workers' Compensation and Disability Insurance. At all times during the Term, Tenant, at its sole cost and expense, shall carry or cause to be carried Statutory Workers' Compensation and New York State Disability Benefits Insurance and any other insurance required by law covering all persons employed by Tenant, contractors, subcontractors, or any entity performing work on or for the Premises, including -68- Employers Liability coverage in an amount not less than $2,000,000.00. (d) Construction Insurance. During the performance of any Construction Work the estimated cost of which exceeds $500,000.00, the liability insurance carried or caused to be carried by Tenant pursuant to Section 7.01(a) hereof shall also include the insurance described in Section 7.09. The fifty million dollar ($50,000,000) combined single limit set forth in Section 7.09 shall constitute the aggregate amount of liability insurance (including the twenty-five million dollar ($25,000,000) amount set forth in Section 7.01(a)) carried by Tenant during the performance of any Construction Work the estimated cost of which exceeds $500,000.00. Section 7.02. Treatment of Proceeds. (a) Proceeds of Property Insurance in General. Insurance proceeds payable with respect to a property loss shall be paid to Tenant and shall be used for Restoration purposes to the extent required by this Lease. (b) Cooperation in Collection of Proceeds. Landlord shall cooperate with Tenant in connection with the collection of any insurance moneys that may be due in the event of loss, and Landlord, at Tenant's request, shall execute and deliver such proofs of loss and other instruments as may be required of Landlord for the purpose of obtaining the recovery -69- of any such insurance moneys, provided that Tenant shall pay or reimburse Landlord for any out-of-pocket costs and expenses incurred by Landlord in connection therewith. Section 7.03. General Requirements Applicable to Policies. (a) Insurance Companies. All of the insurance required by this Article shall be with companies licensed or authorized to do business in the State of New York that have a rating in the latest edition of "Best's Key Rating Guide" of B 10 or better, or such lower rating that Landlord may approve in writing, such approval not to be unreasonably withheld or delayed; provided, however, that Tenant shall have the right to act as a self-insurer with respect to the insurance required to be carried by Tenant pursuant to this Lease in accordance with the provisions of Section 7.03(b) hereof. (b) Self Insurance. In the event that Tenant wishes to act as a self-insurer with respect to all or any portion of the insurance required to be carried by Tenant pursuant to this Lease, Tenant shall submit to Landlord a plan of self insurance therefor, and Landlord (in consultation with a recognized risk management firm) shall review such plan of self insurance and shall not unreasonably withhold or delay its consent to Tenant's acting as a self-insurer pursuant to such plan of self insurance. In the event that Landlord withholds its consent to such plan of self insurance, Landlord shall -70- specify its reasons for withholding such consent and shall advise Tenant of the changes to such plan of self insurance that would make it acceptable to Landlord. Notwithstanding anything to the contrary contained herein: (i) in the event that Tenant obtains approval from the State of New York to act as a self-insurer with respect to Workers Compensation Insurance, Landlord's consent to Tenant acting as a self-insurer with respect to Workers Compensation Insurance shall be deemed given, (ii) Tenant shall have the right to submit to arbitration pursuant to Article 34 hereof the issue of whether Landlord has acted unreasonably in withholding its consent to Tenant's plan of self insurance and what changes, if any, should be required to such plan of self insurance and (iii) Landlord, upon prior written notice to Tenant, shall have the right to review Tenant's plan of self insurance in consultation with Landlord's in-house risk manager in lieu of a recognized risk management firm; provided, however, if Landlord notifies Tenant of its intention to do so, Tenant shall have the right to require Landlord to retain a recognized risk management firm of Landlord's choosing, at Tenant's reasonable expense. (c) Required Certificates. Certificates of insurance evidencing the issuance of all insurance required by this Article (which certificates shall not indicate that the issuance of such insurance is subject to payment), describing -71- the coverage and providing for thirty (30) days prior notice to Landlord of cancellation or non-renewal, shall be delivered to Landlord upon issuance of such insurance or, in the case of new or renewal policies replacing any policies expiring during the Term, not later than ten (10) days before the expiration dates of any expiring policies. The certificates of insurance shall be issued by the insurance company or a duly authorized agent. Upon reasonable prior written request, Landlord shall have the right to review and copy the original policy or policies of insurance at Tenant's offices. (d) [Intentionally Omitted]. (e) Required Insurance Policy Clauses. Each policy of insurance required to be carried pursuant to the provisions of this Article shall contain (i) with respect to property insurance only, if the insurer would otherwise have a right to subrogation with respect to its claims against Landlord, a written acknowledgment by the insurance company that its right to subrogation has been waived with respect to all such claims (provided that such waiver is then customarily available at no additional cost for similar types of insurance policies), (ii) an agreement by the insurer that such policy shall not be canceled, modified or denied renewal (other than for non-payment of premium) without at least thirty (30) days prior written notice to Landlord and (iii) a provision that no act or omission of Tenant shall limit the obligation of the -72- insurance company to pay the amount of any loss sustained by Landlord. Section 7.04. Increases in Coverage. From time to time, but not more frequently than once per year, Landlord may require Tenant to increase or cause to be increased the amount of coverage provided under the policies of insurance, provided, however, that (a) unless Landlord is able reasonably to demonstrate the need for a greater level of coverage, the amount of such increased coverage shall not exceed the amounts of similar coverages as at the same time are commonly carried by owners of comparable buildings, (b) in the event Tenant disputes any determination by Landlord under this Section, the matter shall be resolved by arbitration pursuant to Article 34 hereof and (c) in no event shall Tenant be required to purchase coverage in amounts not then available at commercially reasonable rates. Section 7.05. No Representation as to Adequacy of Coverage. The requirements set forth herein with respect to the nature and amount of insurance coverage to be maintained or caused to be maintained by Tenant hereunder shall not constitute a representation or warranty by Landlord that such insurance is in any respect adequate. Section 7.06. Blanket and/or Umbrella Policies. The insurance required by the provisions of this Article may, at Tenant's election, be effected by blanket and/or umbrella -73- policies issued to Tenant covering the Premises and other properties owned or leased by Tenant. If the insurance required by this Article shall be effected by any such blanket or umbrella policies, Tenant shall furnish to Landlord, upon Landlord's request, certificates of insurance as provided in this Article, setting forth the amount of insurance applicable to the Project. Section 7.07. Liability Insurance Requirements. The insurance required by Section 7.01(a) of this Lease shall consist of commercial general liability insurance protecting against liability for bodily injury, death, property damage and personal injury. Such insurance shall: (a) include a broad form property damage liability endorsement with fire legal liability limit of not less than $100,000.00; (b) contain blanket contractual liability insurance covering written contractual liability; (c) contain contractual liability insurance covering Tenant's indemnification obligations under Article 20; (d) contain independent contractors coverage; (e) contain a notice of occurrence clause; (f) contain a knowledge of occurrence clause; (g) contain a thirty (30) day notice of cancellation or non-renewal clause specifically including notice of cancellation or non-renewal for non-payment of premium; -74- (h) contain an unintentional errors and omissions clause; (i) contain coverage for suits arising from the use of reasonable force to protect persons and property; (j) contain a cross liability endorsement; (k) contain coverage for automobiles owned or leased by Tenant; and (l) contain no exclusions other than those included in the basic forms described unless specifically approved in each instance by Landlord, such approval not to be unreasonably withheld or delayed. Section 7.08. Property and Other Insurance Requirements. The insurance required by Section 7.01(b) of this Lease shall consist at least of the following: (a) Insurance covering all Improvements in the amount of the full Replacement Value of the Improvements and including the following coverages or clauses: (i) a replacement cost valuation without depreciation or obsolescence clause; (ii) debris removal coverage; (iii) demolition cost for undamaged portion coverage; (iv) increased cost of construction coverage; (v) an agreed or stipulated amount endorsement negating any coinsurance clauses; -75- (vi) a thirty (30) day prior notice of cancellation or non-renewal clause providing for notice to Landlord and specifically including cancellation or non-renewal for non-payment of premium. Section 7.09. Construction Insurance Requirements. The insurance required by Section 7.01(d) shall consist at least of the following: (a) Insurance in an amount not less than fifty million dollars ($50,000,000) combined single limit for bodily injury and property damage protecting Tenant, Landlord, Lease Administrator and the general contractor against all insurable legal liability claims resulting from work being performed by or for general contractors and subcontractors engaged to work on or for the Premises. (b) Automobile liability insurance covering any automobile or other motor vehicle owned or leased by Tenant and used in connection with work being performed on or for the Premises in an amount not less than ten million dollars ($10,000,000). (c) The insurance specified in Section 7.09(a) and (b) shall contain: (i) Products Liability/Completed Operations coverage; (ii) a broad form property damage endorsement; -76- (iii) explosion, collapse and underground property damage coverage; (iv) independent contractors coverage; (v) blanket contractual liability, written and oral, coverage; (vi) contractual liability coverage covering any indemnification agreement protecting Tenant, Landlord, Lease Administrator and the City (if the City is no longer Landlord); and (vii) an endorsement providing that excavation and foundation work are covered and that the "XCU exclusions" have been deleted. Section 7.10. Deductibles. Landlord agrees that Tenant shall have the right to carry such deductibles with respect to the insurance required herein as Tenant may reasonably determine, taking into account (i) changes in the insurance market from time to time, (ii) the financial strength of Tenant and (iii) the fact that other companies similar in size and/or financial strength to Tenant often carry substantial deductibles. Section 7.11. No Separate Contractor Coverage Required. Notwithstanding anything to the contrary in this Lease or Funding Agreement #1, Tenant shall not be required to cause any contractors, subcontractors or suppliers engaged in the performance of Construction Work to carry insurance of any -77- nature whatsoever, it being understood and agreed between Landlord and Tenant that Landlord's interests are adequately protected by Tenant's obligations under this Article 7 and by Tenant's obligation to indemnify Landlord pursuant to Article 20 hereof. -78- ARTICLE 8 DAMAGE, DESTRUCTION AND RESTORATION Section 8.01. Notice to Landlord. Tenant shall notify Landlord reasonably promptly upon obtaining actual knowledge thereof if, after the Possessory Date, the Premises are damaged or destroyed in whole or in part (other than an insubstantial part) by fire or other casualty ("Casualty Loss"). Section 8.02. Tenant's Option Upon a Substantial Casualty Loss. In the event of a Casualty Loss to Substantially All of the Premises, Tenant may elect, in its sole discretion by notice in writing to Landlord within one hundred and eighty (180) days after obtaining knowledge of the Casualty Loss (a) to terminate this Lease or (b) to exercise its option to purchase the Premises subject to and in accordance with Article 21. In the absence of any such election, or in the event of a Casualty Loss to less than Substantially All of the Premises, Tenant shall restore the Premises, in accordance with the provisions of this Article and Article 13, to the extent, at least, that immediately after the Casualty Restoration, the Premises shall contain a Printing Facility which, at Tenant's option, shall be at least a Minimum Printing Facility or a smaller Printing Facility that has substantially the same capacity with respect to the printing, production and distribution of newspapers, magazines and other periodicals or printed materials as the Printing Facility that -79- was in operation immediately prior to the Casualty Loss (or, if the Casualty Loss is prior to Substantial Completion, then at least a Minimum Printing Facility (a "Casualty Restoration"). Section 8.03. Lease Termination or Purchase. (a) Lease Termination. If Tenant shall have elected to terminate this Lease pursuant to Section 8.02(a), the Expiration Date shall be the date specified in Tenant's termination notice, which shall be within three hundred and sixty-five (365) days thereafter. In the event the Lease is terminated pursuant to this Section, Tenant shall cause the damaged portions of the Improvements to be demolished to the foundation and cleared of debris, and shall repair and restore any preexisting fence, unless Landlord shall have requested Tenant not to demolish any particular Improvement, in which event Tenant shall have no obligation to demolish such Improvement. If any portion of the foundation is destroyed, Tenant shall demolish such portion and bring the land thereunder to the pre-existing grade of the foundation. (b) Purchase Option. If Tenant shall have elected to exercise its Purchase Option, such exercise shall be governed by the provisions of Article 21. Section 8.04. Casualty Restoration Construction Work. If Tenant shall not have elected to terminate this Lease pursuant to Section 8.02(a) or exercised its Purchase Option pursuant to Article 21, Tenant shall (subject to Unavoidable -80- Delays) commence the Construction Work in connection with a Casualty Restoration within one hundred and eighty (180) days after receipt of the insurance proceeds arising from the damage or destruction which caused the need for such Casualty Restoration, to the extent insured, or within one hundred and eighty (180) days of the Casualty Loss, to the extent the same is not insured. Tenant shall provide Landlord with Tenant's estimate of the cost of the Casualty Restoration and the time schedule pertaining to the performance and completion of such Casualty Restoration. Tenant shall also submit to Landlord copies of all Plans and Specifications prepared in connection with such Casualty Restoration for Landlord's review and approval, subject to the provisions of Section 13.01(c) including, without limitation, the provisions thereof providing for deemed approvals, notification to the Buildings Department and any other applicable Governmental Authorities and an abatement of Rental for Lease Administrator's failure to take certain actions in a timely manner, and shall not commence construction of such Casualty Restoration until such Plans and Specifications have been approved or deemed approved by Landlord. Section 8.05. Restoration Funds. All insurance proceeds shall be paid directly to Tenant (unless Tenant agrees with a Recognized Mortgagee to have such funds paid to the Recognized Mortgagee thereof to be used for Casualty -81- Restoration purposes) and, if Tenant shall not have elected to terminate this Lease pursuant to Section 8.02(a) or exercised its Purchase Option pursuant to Article 21, shall be applied by Tenant to the extent necessary toward the Casualty Restoration. Section 8.06. Effect of Casualty on This Lease. If Tenant shall not have elected to terminate this Lease pursuant to Section 8.02 or exercised its Purchase Option pursuant to Article 21, this Lease shall not terminate, be forfeited or be affected in any manner whatsoever, and there shall be no reduction or abatement of Rental, by reason of damage to, or total or partial destruction of, or untenantability of, the Premises or any part thereof resulting from a Casualty Loss. Subject to Section 8.02, Tenant's obligations hereunder, including the payment of Rental, shall continue as though the Casualty Loss had not occurred, without abatement, suspension, diminution or reduction whatsoever. It is the intention of Landlord and Tenant that the foregoing is an "express agreement to the contrary" as provided in Section 227 of the Real Property Law of the State of New York. -82- ARTICLE 9 CONDEMNATION Section 9.01. Substantial Condemnation. (a) Termination of Lease for Substantial Condemnation. If all or Substantially All of the Premises are taken in a Condemnation, this Lease shall terminate on the Date of Condemnation and the Rental payable by Tenant hereunder shall be apportioned and paid to the Date of Condemnation. (b) Disbursement of Award. If all or Substantially All of the Premises are taken in a Condemnation, the entire award paid in connection with such Condemnation shall be apportioned as follows and in the following order: (i) there shall first be paid to Landlord so much of the award as would equal the Purchase Price that would be payable for that part of the Land taken in such proceeding based upon the ratio that the square footage of the Land taken bears to the total square footage of the Land (provided that, in such event, the Purchase Price specified in Article 21 shall be reduced by the amount of the award paid to Landlord under this Section); and -83- (ii) subject to rights of any Recognized Mortgagees, Tenant shall receive the balance of the award, if any. Notwithstanding the foregoing, if all or any portion of the Premises are taken or condemned by the City or any department, agency or instrumentality thereof, the City (whether or not it is Landlord hereunder at the time) agrees to pay to Tenant, in addition to the award paid to Tenant as the result of such taking or condemnation, an additional sum of money such that the total compensation paid to Tenant as the result of such taking or condemnation shall include an amount equal to the difference between (x) all costs incurred or to be incurred by Tenant as the result of such taking or condemnation including, without limitation, (i) moving expenses, (ii) land acquisition costs and (iii) the total cost of constructing, purchasing, leasing and equipping (with new equipment if the utility of the equipment at the Premises would be materially impaired upon removal and installation at a replacement facility, or with such existing equipment, in which event Landlord shall be responsible for all costs associated with the disassembly, moving, reassembly and installation of such equipment) or otherwise acquiring a replacement facility, and (y) the amount of the award paid to Tenant as the result of such taking or condemnation. -84- (c) Definition. (i) "Condemnation" means a taking (whether or not described as a "condemnation") of all or any part of the Premises (excluding a taking which is limited to the fee interest in the Land provided that, after such taking, Tenant's rights under this Lease including, without limitation, Tenant's option pursuant to Article 21 hereof to purchase the Premises, are not affected) for any public or quasi-public purpose by any lawful power or authority by the exercise of the right of condemnation or eminent domain pursuant to the provisions of applicable law. (ii) "Date of Condemnation" means the earlier of (A) the date on which actual possession of the Premises, or any part thereof, as the case may be, is acquired by any lawful power or authority in a Condemnation or (B) the date on which title to the Premises, or any part thereof, as the case may be, has vested in any lawful power or authority in a Condemnation. Section 9.02. Less Than A Substantial Condemnation. (a) Condemnation of Less than Substantially All of the Premises. If less than Substantially All of the Premises are taken in a Condemnation, this Lease shall continue for the -85- remainder of the Term and (i) the Rental payable hereunder shall be reduced pursuant to the provisions of Section 9.09 hereof and (ii) there shall not be any diminution of any of Tenant's non-montary obligations hereunder, except to the extent Tenant may be prevented from meeting any such obligations by order of the condemning authority. (b) Obligation to Restore the Premises. If less than Substantially All of the Premises are taken in a Condemnation, Tenant shall restore the remaining portion of the Premises not so taken to the same extent that would be required for a Casualty Restoration under Section 8.02 (a "Condemnation Restoration"). (c) Payment of Award. In the event of any Condemnation pursuant to Section 9.02(a), the award shall be paid in accordance with Section 9.01(b). (d) Performance of Condemnation Restoration. The Construction Work in connection with a Condemnation Restoration, submission of plans and specifications, provision of estimated cost and time schedule, and disbursement by Tenant of the Condemnation award shall be done, determined, made and governed in accordance with the provisions of Section 8.04 as if the Condemnation Restoration were a Casualty Restoration. Section 9.03. [Intentionally Omitted] Section 9.04. Temporary Taking. -86- (a) Notice of Temporary Taking. If the temporary use of the whole or any portion of the Premises is taken for a public or quasi-public purpose by a lawful power or authority by the exercise of the right of condemnation or eminent domain, Tenant shall give Landlord notice within thirty (30) days thereof. If the Temporary Taking is by the City or any department, agency or instrumentality thereof, the City (whether or not it is the Landlord hereunder at the time) shall pay to Tenant an amount equal to two (2) times the amount of the award(s) paid to Tenant as the result of such Temporary Taking, at the same time that such award(s) are paid to Tenant. The Term shall not be reduced or affected in any way by reason of such temporary taking and Tenant shall continue to pay to Landlord the Rental without reduction or abatement. (b) Effect of Temporary Taking. In the event of a temporary taking as described in Section 9.04(a), Tenant shall be entitled to receive the entire amount of any award made for such taking, whether paid by way of damages, rent or otherwise; provided, however, that if such period of temporary use or occupancy shall extend beyond the expiration of the Term such award shall be apportioned between Landlord and Tenant as of such date of expiration of the Term; provided, however, that Landlord shall not be entitled to any portion of such award if Tenant exercises its option to purchase the Premises within six (6) months after notice to Tenant of the determination of such -87- award. Notwithstanding the foregoing, if the taking results in changes or alterations in the Project that would necessitate expenditures to permit the operation of the Premises as a Printing Facility, then Tenant shall to the extent of the moneys received from the award with respect to the Temporary Taking restore the Project in the same manner, and subject to the same terms and conditions, as if such restoration were a Condemnation Restoration. (c) Temporary Taking Exceeding Ninety Days. Notwithstanding anything to the contrary contained in this Lease, if there is a Temporary Taking of Substantially All of the Premises for a period exceeding ninety (90) days, Tenant, at its option, shall have all of the rights afforded to it under this Lease as if such event was a taking of Substantially All of the Premises pursuant to the provisions of Section 9.01 hereof. Section 9.05. Governmental Action Not Resulting in a Condemnation. In case of any governmental action not resulting in the Condemnation of any portion of the Premises but creating a right to compensation therefor, such as the changing of the grade of any street upon which the Premises abut, then this Lease shall continue in full force and effect without reduction or abatement of Rental. Any award payable thereunder shall be paid to Tenant. -88- Section 9.06. Collection of Awards. Each of the parties shall execute documents that are reasonably required to facilitate collection of any awards made in connection with any condemnation proceeding referred to in this Article. Section 9.07. Tenant's Approval of Settlements. Tenant shall have the exclusive right to settle or compromise any Condemnation or other governmental action without the consent of Landlord. Section 9.08. Negotiated Sale. In the event Tenant approves a negotiated sale of all or a portion of the Premises in lieu of condemnation, the proceeds shall be distributed as provided herein for cases of condemnation. Section 9.09. Reduction of Base Rent and Land PILOT. In the event of any Condemnation described in Section 9.02, effective upon the Date of Condemnation, Base Rent and Land PILOT (and the Schedule of Maximum Land PILOT annexed hereto as Exhibit D) shall be reduced by an amount (and recalculated in the case of Exhibit D) equal to the product obtained by multiplying the Base Rent and Land PILOT (and Maximum Land PILOT) payable (or shown on Exhibit D) immediately prior to such Date of Condemnation by a fraction, the numerator of which is the amount of Land at the Premises taken pursuant to the Condemnation proceeding and the denominator of which is the amount of Land at the Premises immediately before the Condemnation. Improvements PILOT shall be appropriately -89- reduced in accordance with Section 3.05(b)(ii)(A) and (B) based on any reduction in Gross Building Square footage caused by the condemnation. Section 9.10. Reduction of Purchase Price. In the event of any Condemnation, the Purchase Price shall be reduced by the amount, if any, equal to the portion of any Condemnation award paid to Landlord pursuant to the provisions of Section 9.01(b)(i) hereof. -90- ARTICLE 10 TRANSFER AND SUBLETTING Section 10.01. Tenant's Right to Assign, Sublet, Transfer, Etc. (a) Limitations on Right of Transfer. Tenant shall not enter into any Transfer other than a Collateral Assignment or a Permitted Transfer. (b) Definitions. (i) "Transfer" means (A) the sale, exchange, assignment or other disposition of all or substantially all of Tenant's interest in this Lease or the leasehold estate created hereby whether by operation of law or otherwise, or (B) a Sublease of all or substantially all of the Premises (a "Major Sublease"). (ii) "Collateral Assignment" means a Transfer (A) to a Recognized Mortgagee or an Affiliate of a Recognized Mortgagee, as collateral security, or following foreclosure of the Recognized Mortgage, or in lieu of foreclosure thereof, or (B) by a Recognized Mortgagee or an Affiliate thereof following either foreclosure of the Recognized Mortgage or a Transfer in lieu of foreclosure thereof. (iii) "Transferee" means a Person to which a Transfer is made. -91- (iv) "Permitted Transfer" means a Transfer to either (x) a Transferee which is an Affiliate of Tenant, regardless of whether such Transferee is a Prohibited Person (an "Affiliate Transfer"), (y) a Transferee which is a successor to Tenant or any Affiliate of Tenant by merger, consolidation or transfer of substantially all of the assets of Tenant or such Affiliate of Tenant, regardless of whether such Transferee is a Prohibited Person (a "Merger/Sale Transfer") or (z) a Transferee which is not a Prohibited Person provided that, in the case of (x), (y) and (z) above: (A) except in the case of a Major Sublease, the Transferee assumes all of Tenant's obligations hereunder in accordance with the form of Assumption attached hereto as Exhibit H; (B) on the effective date of the Transfer this Lease is in full force and effect; (C) notice pursuant to Section 10. 01(e) and (f) has been given to Landlord; (D) Tenant has delivered or, within five (5) Business Days after the Transfer, delivers to Landlord copies of the instruments of Transfer in conformance with Section 10.01(h). (c) Definition of Prohibited Persons. The term "Prohibited Person" as used in this Lease shall mean: -92- (i) Any Person (A) that is in monetary default after notice and beyond any applicable grace period, of its obligations under any material written agreement with Landlord, or (B) that directly controls, is controlled by, or is under common control with a Person that is in monetary default after notice and beyond any applicable grace period, of its obligations under any material written agreement with Landlord, unless, in each instance, such default or breach either (x) has been waived in writing by Landlord or (y) is being disputed in a court of law, administrative proceeding, arbitration or other forum or (z) is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default. (ii) Any Person that is an organized crime figure, unless the City is otherwise doing business with such person notwithstanding such organized crime status. (iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in -93- violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof. (iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended. (v) Any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than $10,000, unless such default is then being contested in good faith in accordance with the law or unless such default is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default. -94- (vi) Any Person that has solely owned at any time during the three (3) years immediately preceding a determination of whether such Person is a Prohibited Person, any property which both (x) was acquired by such Person during such three (3) year period in an in rem tax foreclosure and (y) was reacquired during such three (3) year period from such Person by the City in an in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City. (vii) Any Person that is or has been at any time during the three (3) years immediately preceding a determination of whether such Person is a Prohibited Person, in material, non-monetary default directly related to a statutory requirement, Executive Order or a regulation of a City agency after notice and beyond any applicable grace period (which material, non-monetary default has not been cured) under any material written agreement with Landlord, unless, in each instance, either (x) such default has been waived in writing by Landlord or Landlord has not commenced prior to its receipt of Tenant's notice given pursuant to Section 10.01(e) hereof and thereafter diligently pursued efforts to terminate its relationship with -95- such Person or commenced prior to its receipt of Tenant's notice given pursuant to Section 10.01(e) hereof and thereafter diligently sought alternative remedies available to it under such material written agreement with respect to such material, non-monetary default, (y) such default is being disputed in a court of law, administrative proceeding, arbitration or other forum (provided that such dispute was initiated by such Person by the later to occur of (A) the date that is sixty (60) days after such Person's receipt of notice from Landlord of such material, non-monetary default or (B) the date that is one hundred eighty (180) days prior to the date of Tenant's notice given pursuant to Section 10.01(e) hereof, failing which, the issue of whether such Person is a Prohibited Person shall be determined by arbitration pursuant to the provisions of Section 10.01(g) hereof) or (z) such default is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default. (d) Determination of Organized Crime Figure. The determination as to whether any Person is an organized crime figure shall be within the reasonable discretion of Landlord and shall be made within thirty (30) days of the receipt of Tenant's request for such determination. -96- (e) Notice to Landlord. Tenant shall notify Landlord of its intention to enter into any Transfer not less than thirty (30) days before the proposed effective date of such Transfer with respect to a Transfer that is not an Affiliate Transfer or a Merger/Sale Transfer, and not less than ten (10) days after the effective date of such Transfer with respect to a Transfer which is an Affiliate Transfer or a Merger/Sale Transfer. (f) Contents of Notice. (i) The notice required by Section 10.01(e) shall contain the following information: (A) in the case of a proposed corporate Transferee or in the case of a corporate general partner in a partnership that is the proposed Transferee (other than a corporation whose common stock is traded on a recognized exchange or over-the-counter or is registered under the Securities Act of 1933, as amended), a certificate of an authorized officer of such corporation giving the names and addresses of all directors and officers of the corporation and Persons having more than a five percent (5%) interest in such Transferee; -97- (B) in the case of a proposed corporate Transferee, or corporate general partner in a partnership that is the proposed Transferee, whose stock is publicly traded on a recognized exchange or over-the-counter or is registered under the Securities Act of 1933, as amended, a certificate of an authorized officer of such corporation giving the names and addresses of all directors and senior officers of the corporation and Persons having more than a ten percent (10%) interest in such Transferee, to the extent such information is disclosed in such corporation's then most recent filings required to be made by it with the Securities and Exchange Commission; (C) in the case of a proposed partnership Transferee, a certificate of the managing general partner or other authorized general partner in the proposed Transferee giving the names and addresses of all general and limited partners in the partnership; and (D) in all cases, a certification by an authorized officer, managing general partner, or other authorized general partner -98- of Tenant, whichever shall be applicable, to the effect that, to the best of his or her knowledge, the Transfer does not violate the provisions of Section 10.01(a), but in no event shall such person incur any personal liability in the event such certification is incorrect. (ii) If any change in circumstances prior to the closing of the transaction renders the information provided in clause (i) above materially incomplete or incorrect, Tenant shall notify Landlord of the change, which notification shall recommence the period for Landlord's notification to Tenant under Section 10.01(g). (g) Objections; Deemed Consent. Landlord shall notify Tenant, within thirty (30) days after receipt of notice from Tenant pursuant to the provisions of Section 10.01(e), whether the Landlord objects to consummation of the Transfer on the grounds that the same would violate the provisions of Section 10. 01(a), which objection shall be in writing and in reasonable detail, and, in the absence of any such written objection from Landlord within such period, Landlord shall be deemed to have consented to the proposed Transfer. Notwithstanding anything to the contrary set forth herein, (x) Landlord's consent shall not be required with respect to -99- any Transfer that is an Affiliate Transfer or a Merger/Sale Transfer and (y) with respect to any Transfer that is not an Affiliate Transfer or a Merger/Sale Transfer the only permissible grounds for withholding consent shall be that the Transferee is a Prohibited Person. Tenant shall have the right to submit to arbitration pursuant to Article 34 hereof the issue of whether Landlord has acted unreasonably in withholding its consent to any Transfer that is not an Affiliate Transfer or a Merger/Sale Transfer. If the Arbiter determines that Landlord has acted unreasonably, then (i) Landlord shall be deemed to have consented to such Transfer effective as of the date of the Arbiter's decision and (ii) Tenant or the Transferee shall be entitled to an offset against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) in an amount equal to the product arrived at by multiplying (x) $1,000.00 by (y) the number of days in the period commencing on the date Tenant gives a Dispute Notice in connection with Landlord's withholding of consent and expiring on the date of the Arbiter's decision. (h) Instruments of Transfer. Tenant shall deliver to Landlord, or shall cause to be delivered to Landlord, within thirty (30) days after execution and delivery thereof, (i) in the case of an assignment (including a Collateral Assignment) of the Tenant's interest in this Lease, executed counterpart(s) or photostatic copies of the -100- instrument(s) of assignment and assumption, (ii) in the case of a Major Sublease, an executed counterpart or a photostatic copy of the Sublease, and (iii) for all other Transfers, an executed counterpart or a photostatic copy of the instrument of Transfer. (i) Invalidity of Transactions. Subject to the provisions of Section 10.01(g) hereof, any Transfer entered into without Landlord's consent (or deemed consent, pursuant to Section 10.01(g)) as required in this Lease, or which in any other material respect fails to comply with the provisions of this Lease, shall have no validity and shall be null and void and without any effect. Section 10.02. Subtenant Violation. No failure to include an obligation under this Lease in any Sublease shall relieve Tenant of, or in any way limit, such obligation under this Lease. A violation or breach of any of the terms, provisions or conditions of this Lease that results from, or is caused by, an act or omission by a Subtenant (whether or not such act or omission is permitted by such Subtenant's Sublease) shall not relieve Tenant of Tenant's obligation to cure such violation or breach. Section 10.03. Tenant's Right to Sublease. Except as expressly provided in Section 10.01(a) with respect to Major Subleases, Tenant shall have the unrestricted right to sublet portions of the Premises at any time and from time to time. -101- ARTICLE 11 MORTGAGES Section 11.01. Effect of Mortgages. (a) Tenant shall have the right, at any time and from time to time during the Term, to mortgage the leasehold estate created hereby; provided that no Mortgage shall extend to, affect, or be a lien or encumbrance upon, the estate and interest of Landlord in the Premises or any part thereof. (b) "Mortgage" means any mortgage or deed of trust (including any consolidation of two or more mortgages or deeds of trust) that constitutes a lien on Tenant's interest in this Lease and the leasehold estate created hereby. Section 11.02. Mortgagee's Rights Not Greater than Tenant's. (a) With the exception of the rights granted to Recognized Mortgagees pursuant to the provisions of Sections 11.03, 11.04, 11.06, 11.07, and 11.10, and by any other provision of this Lease, the execution and delivery of a Mortgage or a Recognized Mortgage shall not give nor shall be deemed to give a Mortgagee or a Recognized Mortgagee any greater rights against Landlord than those granted to Tenant hereunder. (b) Definition: "Recognized Mortgage" means a Mortgage (i) the holder of which is not an Affiliate of Tenant; -102- (ii) that is held by a Person which is either an Institutional Lender or which has (or has an Affiliate which has) the financial capacity and business expertise to operate the Premises as a Printing Facility and, in either case, is not controlled by an organized crime figure; and (iii) a photostatic copy of which has been delivered to Landlord (with photostatic copies of all modifications and extensions), together with a certification by Tenant and the Mortgagee confirming that said photostatic copies are true copies of the documents and giving the name and post office address of the holder of the Mortgage. Section 11.03. Notice and Right to Cure Tenant's Defaults. (a) Notice to Recognized Mortgagee. Landlord shall give to each Recognized Mortgagee, at the address of the Recognized Mortgagee stated in the certification referred to in Section 11.02(b), or in any subsequent notice given by the Recognized Mortgagee to Landlord, and otherwise in the manner pursuant to the provisions of Article 25, a copy of each notice of Default, at the same time as it gives such notice of Default, to Tenant, and no such notice of Default shall be -103- deemed effective unless and until a copy thereof shall have been so given to each Recognized Mortgagee. In no event will notices be delivered to more than two addresses per Recognized Mortgagee. (b) Right and Time to Cure. Subject to the provisions of Sections 11.03(d) and 11.05, each Recognized Mortgagee shall have a period of (i) thirty (30) days more, in the case of a Default in the payment of Rental, and (ii) sixty (60) days more, in the case of any other Default, than is given Tenant under the provisions of this Lease to remedy the Default, cause it to be remedied, or cause action to remedy a Default to be commenced, provided that, except with respect to a Default in payment of Rental, such Recognized Mortgagee delivers to Landlord, within thirty (30) days after the expiration of the time given to Tenant pursuant to the provisions of this Lease to remedy the event or condition which would otherwise constitute an Event of Default hereunder, a written notice that it will take the action described in Section 11.03(d)(iii)(A) or (B). (c) Acceptance of Recognized Mortgagee's Performance. Subject to the provisions of Section 11.05, Landlord shall accept performance by a Recognized Mortgagee of any covenant, condition or agreement on Tenant's part to be performed hereunder with the same force and effect as though performed by Tenant. -104- (d) Commencement of Performance by Recognized Mortgagee for Non-Rental Defaults. No Event of Default (other than an Event of Default arising from the nonpayment of Rental) shall be deemed to have occurred so long as (i) all Rental is being timely paid as required in this Lease (it being understood that, in the case of a Recognized Mortgagee, Rental shall be deemed timely paid if paid prior to the expiration of the cure period provided in Section 11.03(b)(i)), (ii) a Recognized Mortgagee has delivered the notice required by Section 11.03(b) within the period required thereby, and (iii) the Recognized Mortgagee that delivered such notice: (A) in the case of a Default that is curable without possession of the Premises by the Recognized Mortgagee, has commenced in good faith, within the period required in Section 11.03(b)(ii), to cure the Default and is prosecuting such cure to completion with diligence and continuity, or (B) in the case of a Default where possession of the Premises is required in order to cure the Default, or which is a Default that is otherwise not susceptible of being cured by -105- a Recognized Mortgagee, has instituted foreclosure proceedings, and is diligently prosecuting the foreclosure proceedings to obtain possession of the Premises, and, upon obtaining possession of the Premises, promptly commences to cure the Default (other than a Default which is not susceptible of being cured by a Recognized Mortgagee) and prosecutes such cure to completion with diligence. Section 11.04. Execution of New Lease. (a) Notice of Termination. If this Lease is terminated by reason of an Event of Default, Landlord shall give prompt notice thereof to each Recognized Mortgagee. (b) Request for and Execution of New Lease. If, within sixty (60) days of the later of (i) the date of Landlord's notice to a Recognized Mortgagee pursuant to Section 11.04(a) or (ii) the date on which such Recognized Mortgagee obtains possession of the Premises, such Recognized Mortgagee shall request a new lease, then subject to the provisions of Sections 11.04(c) and 11.05, within thirty (30) days after Landlord shall have received such request, Landlord shall execute and deliver at least two (2) counterparts of a new lease of the Premises for the remainder of the Term to the Recognized Mortgagee, or a designee or nominee thereof, -106- provided that such designee or nominee is not a Prohibited Person. Said Recognized Mortgagee (or permitted designee or nominee thereof) shall promptly after its receipt of such new lease of the Premises execute such new lease, as tenant thereunder and deliver one (1) fully-executed counterpart to Landlord. The new lease shall have the same priority and shall contain all of the covenants, conditions, limitations and agreements contained in this Lease, provided, however, Landlord shall not be deemed to have represented or covenanted that such new lease shall be superior to claims of Tenant, Tenant's other creditors or a judicially appointed receiver or trustee for Tenant. (c) Conditions Precedent to Landlord's Execution of New Lease. The provisions of Section 11.04(b) notwithstanding, Landlord shall not be obligated to enter into a new lease with a Recognized Mortgagee unless the Recognized Mortgagee (i) pays to Landlord, concurrently with the execution and delivery of the new lease to Landlord, all Rental due under this Lease up to and including the date of the commencement of the term of the new lease and all expenses, including, without limitation, out-of-pocket reasonable attorneys' fees and disbursements and court costs, incurred by Landlord or Lease Administrator in connection with the Default or -107- Event of Default, the termination of this Lease and the preparation of such new lease, (ii) agrees that it shall reasonably promptly after execution of the new lease cure all material Defaults (other than those not susceptible of cure by a Recognized Mortgagee) then existing under this Lease (as though this Lease had not been terminated), and (iii) delivers to Landlord a statement, in writing, acknowledging that Landlord, by entering into such new lease with such Recognized Mortgagee, shall not have or be deemed to have waived any material Defaults or Events of Default then existing under this Lease (other than those not susceptible of cure by a Recognized Mortgagee) notwithstanding that any such material Defaults or Events of Default existed prior to the execution of such new lease and that the breached obligations which gave rise to the Defaults or Events of Default are also obligations under such new lease; provided that prior to the delivery of such statement to Landlord, if requested by a Recognized Mortgagee, Landlord shall specify in reasonable detail, in writing, all existing material Defaults then known to Landlord and, in the event the Recognized Mortgagee disputes any such specified -108- material Default of a nature described in Sections 24.01(b) or (c) hereof, the Recognized Mortgagee may submit the matter to arbitration; provided, however, that notwithstanding anything to the contrary contained herein, such Recognized Mortgagee shall not be responsible for any Defaults or Events of Default which either (x) have been cured or, for any other reason, no longer constitute a continuing Default or Event of Default or (y) are not susceptible of cure by a Recognized Mortgagee. Section 11.05. Recognition by Landlord of Recognized Mortgagee Most Senior in Lien. If more than one Recognized Mortgagee has exercised any of the rights afforded by Sections 11.03 or 11.04, then, unless otherwise provided in the Recognized Mortgage most senior in lien (and priority) or consented to by the holder thereof, only that Recognized Mortgagee, to the exclusion of all other Recognized Mortgagees, whose Recognized Mortgage is most senior in lien (and priority) shall be recognized by Landlord as having exercised such right, for so long as such Recognized Mortgagee shall be diligently exercising its rights under this Lease with respect thereto, and thereafter only the Recognized Mortgagee whose Recognized Mortgage is next most senior in lien (and priority) shall be recognized by Landlord, unless such Recognized Mortgagee has designated a Recognized Mortgagee whose Mortgage is junior in -109- lien to exercise such right. If the parties shall not agree on which Recognized Mortgage is prior in lien, such dispute shall be determined, at no expense to Landlord, by a then current certificate of title issued by a title insurance company licensed in New York State and chosen by Landlord, and such determination shall bind the parties. Section 11.06. Appearance at Condemnation Proceedings. A Recognized Mortgagee shall have the right to appear in any condemnation proceedings and to participate in any and all hearings, trials and appeals in connection therewith. Section 11.07. Rights Limited to Recognized Mortgagees. The rights granted to a Recognized Mortgagee under the provisions of this Lease shall not apply in the case of any Mortgagee that is not a Recognized Mortgagee. Section 11.08. Consent to Assignment of Tenant Rights. Landlord hereby consents to the inclusion of a provision in any Recognized Mortgage providing for, at the option of the Recognized Mortgagee: (a) a conditional assignment of the option to purchase granted under Article 21 of this Lease, (b) an assignment of Tenant's share of the net proceeds from any award or other compensation resulting from a Condemnation of Substantially All of the Premises or less than Substantially All of the Premises as set forth in Article 9 of this Lease, (c) the entry of the Recognized Mortgagee upon the -110- Premises, without notice to Landlord or Tenant, to view the state of the Premises, (d) an assignment of Tenant's right, if any, to terminate, cancel, modify, change, supplement, alter or amend this Lease, (e) an assignment of Tenant's rights under any Sublease, and (f) effective upon any default under any such Recognized Mortgage (i) the foreclosure of the Recognized Mortgage pursuant to a power of sale by judicial proceedings or other lawful means and the subsequent sale of the leasehold estate to the purchaser at the foreclosure sale and a sale by such purchaser and/or a sale by any subsequent purchaser, (ii) the appointment of a receiver, irrespective of whether the Recognized Mortgagee accelerates the maturity of all indebtedness secured by the Recognized Mortgage (iii) the right of the Recognized Mortgagee or the receiver to enter and take possession of the Premises to manage and operate the same and to collect the subrentals, issues and profits therefrom and to cure any default under the Recognized Mortgage or any default by Tenant under this Lease, and (iv) an assignment of Tenant's right, title and interest in and to any deposit of cash, securities or other property which may be held to secure the performance of covenants, conditions and agreements contained in this Lease, the premiums for or dividends upon any insurance provided for the benefit of any Recognized Mortgagee or required by the terms of this Lease, as well as in all refunds or rebates of Taxes, Impositions or Exempt Taxes assessments -111- upon or other charges against the Premises, whether paid or to be paid. Section 11.09. Prohibition Against Surrender. Landlord shall not, without the prior written consent of each Recognized Mortgagee, accept a voluntary surrender of this Lease at any time while a Recognized Mortgage remains a lien on the leasehold estate demised hereby. Section 11.10. No Merger. Landlord hereby agrees, for the benefit of any Recognized Mortgagee, that, so long as any Recognized Mortgage shall remain a lien on the leasehold estate demised hereby, that in the event title to the fee interest in the Premises and the leasehold estate interest of Tenant in this Lease shall for any reason, whether by operation of law or otherwise, be vested in the same party, the respective interests or estates shall not be deemed to merge, it being the intention of the parties that the fee estate and leasehold estate survive as separate distinct estates. Section 11.11. No Subordination to Fee Mortgage. In the event that Landlord shall place any mortgage on its fee interest in the Premises, whether or not in violation of Section 5.01 hereof, this Lease and any Recognized Mortgage shall not be subordinate to any such fee mortgage. Section 11.12. No Modifications. In the event that Landlord and Tenant shall amend or alter any of the terms or provisions of this Lease without the prior written consent of -112- any Recognized Mortgagees, any such amendment or alteration shall not be binding upon any such Recognized Mortgagees. Section 11.13. Estoppel Certificate. Landlord, at any time, and from time to time, upon at least twenty (20) days' prior notice by a Recognized Mortgagee, shall execute, acknowledge and deliver to such Recognized Mortgagee, and/or to any other person, firm or corporation specified by such Recognized Mortgagee, a statement certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), stating the dates to which the rent and additional rent have been paid, and stating whether or not there exist any defaults by Tenant under this Lease, and, if so, specifying each such default. Such statement shall also certify as to any additional matters reasonably requested by such Recognized Mortgagee. Section 11.14. Modification of Lease. In the event that an entity that meets the requirements set forth in Sections 11.02(b)(i) and (ii) hereof requests that reasonable modifications be made to this Lease as a precondition to entering into a Recognized Mortgage with Tenant with respect to the Premises, Landlord shall agree and enter into such reasonable modifications with Tenant; provided, however, that no such requested modification shall (a) reduce the amounts payable by Tenant hereunder, (b) modify the Term, (c) -113- materially increase the rights of Tenant hereunder, or (d) materially adversely affect the rights and obligations of Landlord hereunder. Section 11.15. Chattel Mortgages. Landlord acknowledges and agrees that Tenant may lease or finance purchases of Tenant's Property. Landlord, upon Tenant's request, will enter into written agreements with any vendor, lessor or lender from whom Tenant has purchased or leased Tenant's Property or borrowed money for the purchase thereof on such vendor's, lessor's or lender's standard form with such reasonable changes that Landlord may request, providing that: (i) such Tenant's Property shall be and remain personal property notwithstanding the fact that the same may be affixed to the Premises, (ii) the security interest of such vendor, lessor or lender in such Tenant's Property shall be senior to any interest of Landlord therein, (iii) in the event of a default by Tenant under this Lease, Landlord shall provide such vendor, lessor or lender with at least sixty (60) days prior written notice and an opportunity to remove from the Premises any Tenant's Property in which such vendor, lessor or lender has a security interest and (iv) that such vendor, lessor or lender may enter the Premises at any time pursuant to a written agreement between Tenant and such vendor, lessor or lender for the sole purpose of removing such Tenant's Property if such removal is necessary to protect its security interest therein; -114- provided that, in conducting such entry and removal, such vendor, lessor or lender shall: (a) prior to entry, provide Landlord upon Landlord's request with evidence of appropriate liability insurance as reasonably determined by Landlord, (b) use reasonable care, (c) repair all damage caused by its activities in or about the Premises, and (d) comply with all applicable laws. Section 11.16. Additional Notices to Mortgagees. In addition to providing a copy of each notice of Default to Recognized Mortgagees pursuant to Section 11.03(a) hereof, Landlord shall give to each Recognized Mortgagee, at the address of the Recognized Mortgagee stated in the certification referred to in Section 11.02(b), or in any subsequent notice given by the Recognized Mortgagee to Landlord, and otherwise in the manner pursuant to the provisions of Article 25, a copy of each notice to Tenant, at the same time as it gives such notice to Tenant, which requires Tenant to take or refrain from taking any action if the failure to do so could result in a Default. Section 11.17. Provisions of Lease Continue in Effect After Foreclosure. In the event of a foreclosure of a Recognized Mortgage pursuant to a power of sale by judicial proceedings or other lawful means and the subsequent sale of the leasehold estate to the purchaser at the foreclosure sale, all of the terms and conditions of this Lease shall remain in full force and effect, and shall be binding upon any purchaser succeeding to the rights of Tenant under this Lease including, without limitation, the provisions of Article 28 hereof. -115- ARTICLE 12 CAR POUND Section 12.01. Removal of Car Pound. Landlord shall cause the Car Pound to be removed from the Premises and the Possessory Date to occur on or prior to the 4th Anniversary Date; provided that Tenant shall not be obligated to accept possession of the Premises (and accordingly the Possessory Date shall not occur) prior to the earlier to occur of (x) the Car Pound Removal Date and (y) the 4th Anniversary Date; and further provided, however, that at any time on or after the date hereof and prior to the 10th anniversary of the Lease Execution Date, if the Car Pound shall not have been removed from the Premises, Tenant may give Landlord written notice (the "Car Pound Removal Notice") (a) stating that Tenant is prepared to either (i) commence or continue the filling, rough grading and/or compaction of soil at the Project or (ii) Commence Construction of the Project on or about a date (the "Car Pound Removal Date") which shall be specified in the Car Pound Removal Notice and which Car Pound Removal Date shall be (i) not earlier than six (6) months after the date of the Car Pound Removal Notice and (ii) not later than nine (9) months after the date of the Car Pound Removal Notice, and -116- (b) requiring that the Car Pound be removed and the Possessory Date occur on or prior to the Car Pound Removal Date, in which event Landlord shall cause the Car Pound to be removed and cause the Possessory Date to occur not later than the Car Pound Removal Date subject, however, to delays due to acts of God (including, without limitation, catastrophic weather conditions), fire or casualty ("Landlord's Unavoidable Delays"); provided, however, that Tenant shall not be obligated to accept possession of the Premises (and acccordingly the Possessory Date shall not occur) prior to the Car Pound Removal Date specified in the Car Pound Removal Notice. Landlord hereby acknowledges its receipt of the Car Pound Removal Notice as of the date hereof, which Car Pound Removal Notice sets forth June 17, 1994 as the Car Pound Removal Date, and Landlord and Tenant agree that for the purposes of this Lease, the Car Pound Removal Date shall mean June 17, 1994; subject, however, to the provisions of the immediately preceding paragraph with respect to Landlord's Unavoidable Delays. Section 12.02. Damages for Tenant's Failure to Construct after Notice. If, without regard to whether Landlord shall have commenced construction of a permanent relocation Car Pound: -117- (a) Prior to the 4th Anniversary Date, Tenant shall deliver to Landlord a Car Pound Removal Notice, (b) Landlord shall, or shall cause EDC to, complete construction of an interim relocation Car Pound for the cars to be removed from the Premises, (c) the Possessory Date shall occur on or before the Car Pound Removal Date, and (d) Tenant shall fail to commence and dilgently prosecute the driving of piles at the Project within twelve (12) months after the Possessory Date (provided that such twelve-month time period shall be subject to "unavoidable delays" of the same kind described above with respect to Landlord's Unavoidable Delays), or such longer period during which Tenant may provide Landlord, on a monthly basis, with a certificate of a licensed professional engineer stating that in such professional engineer's opinion, taking into account sound construction practices, it would not be advisable to begin the driving of piles either (i) because soil brought to the Project had not settled sufficiently or (ii) due to other technical or weather-related reasons, then, within thirty (30) days after Tenant's receipt of Landlord's written demand, Tenant shall reimburse Landlord and/or EDC for all out-of-pocket costs (both design and -118- construction) incurred by Landlord or EDC in connection with the construction of such interim relocation Car Pound after receipt of the Car Pound Removal Notice. Landlord's demand shall be accompanied by invoices, receipts or other documentation evidencing the costs thereof, substantially the same as those invoices, receipts and documentation to be submitted by Tenant to Landlord in connection with the construction of the Interim Car Pound as set forth in Funding Agreement #3. Section 12.03. Damages for Landlord's Failure to Remove Car Pound. If the Possessory Date shall not have occurred prior to the Car Pound Removal Date, then from and after the Car Pound Removal Date and continuing until the Possessory Date (or for such shorter period as may be hereinafter set forth), Tenant shall be entitled to accrue, as liquidated damages, the following amounts ("Car Pound Offset Amounts") as offsets against future installments of Rental (exclusive of Impositions and College Point Improvement Fund Payments) becoming due and payable after the Possessory Date: (a) for each month or portion thereof that occurs during the period (the "Initial Three Month Period") commencing with the Car Pound Removal Date, and continuing until the earlier of (i) the day preceding the Possessory Date or (ii) the day that is three months after the Car Pound Removal Date, the Car -119- Pound Offset Amount shall be equal to 100% of the Base Rent and PILOT (which shall be deemed to accrue on a daily basis) becoming due and payable with respect to a like period of time commencing on the Possessory Date; and (b) for each month or portion thereof that occurs during the period beginning on the day after the expiration of the Initial Three Month Period, and continuing thereafter until the earlier of (i) the day preceding the Possessory Date or (ii) the day on which Tenant shall terminate the Lease pursuant to Section 12. 05, the Car Pound Offset Amount shall be equal to the sum of (x) the Car Pound Offset Amount described in Section 12.03(a), plus (y) $10,000 (apportioned on the basis of thirty (30) day months); (such Car Pound Offset Amount being hereafter referred to as the "Basic Penalty Offset"); provided, however, that (A) for each month or portion of a month after the Car Pound Completion Date the Car Pound Offset Amount shall be equal to 200% of the Basic Penalty Offset (for purposes hereof, the "Car -120- Pound Completion Date" means (x) the earlier to occur of (i) the date on which Landlord shall have completed construction of an interim or permanent relocation Car Pound or (ii) the date on which Landlord would have completed construction of an interim or permanent relocation Car Pound but for Landlord's willful failure to prosecute such construction with due diligence after commencement thereof or (y), with respect to the interim relocation Car Pound constructed by Tenant pursuant to a Self-Help Notice, the date Tenant shall have completed construction of such interim relocation Car Pound; (B) if Tenant has given the Self-Help Notice, and if within six (6) months thereafter Tenant shall have failed to complete construction of the interim relocation Car Pound (provided that such six-month period shall be extended in respect of any delays in completion due to Tenant's failure to use reasonable and diligent efforts or due to acts of God (including, without limitation, catastrophic weather conditions (but excluding soil conditions), fire or casualty), then, upon the expiration of such six-month period (as such six-month period may be extended as specifically provided in this subsection 12.03(b)(x)(B): -121- (i) for each month or portion thereof for the period commencing on the day after the expiration of such six-month period (as such six-month period may be extended as specifically provided in this subsection 12.03(b)(x)(B)) and continuing thereafter until the day that is six (6) months after the expiration of such six-month period (as such six-month period may be extended as specifically provided in this subsection 12.03(b)(x)(B)), the Car Pound Offset Amount shall be equal to one hundred fifty percent (150%) of the Basic Penalty Offset, and (ii) for each month or portion thereof during the period commencing with the day after the end of the period specified in the immediately preceding clause (i) (provided Tenant's failure to complete construction during such period was not due to Tenant's failure to use reasonable and diligent efforts or due to acts of God (including, without limitation, catastrophic weather conditions, (but excluding soil conditions), fire or casualty) and continuing until the completion of construction by the Tenant of -122- the interim relocation Car Pound, the Car Pound Offset Amount shall be equal to 200% of the Basic Penalty Offset; and (C) if Tenant has given the Self-Help Notice within six (6) months before or after the second anniversary of the Lease Execution Date and Landlord has certified that completion of construction of a permanent relocation Car Pound and causing the Possessory Date to occur would not require more than an additional ninety (90) days after the date of the Self-Help Notice, then during such 90-day period (but only if Landlord fails to cause the Possessory Date to occur before the expiration of such 90-day period), the Car Pound Offset Amount shall be equal to one hundred fifty percent (150%) of the Basic Penalty Offset. (e) The foregoing liquidated damage amounts are fixed in consideration of the material harm and damage that Tenant will sustain if the Possessory Date is delayed because the Car Pound is not removed from the Premises, it being recognized that the exact amount of damage is impossible to ascertain, and Tenant shall have no other or additional right to monetary damages or compensation by reason of such delay in the Possessory Date. Section 12.04. Tenant's Self-Help Remedy. -123- (a) If the Possessory Date shall not have occurred on or prior to the Car Pound Removal Date, Tenant, at its sole election, may give Landlord written notice (the "Self-Help Notice") at any time after the Car Pound Removal Date, but prior to the first (1st) anniversary of the Car Pound Removal Date, that Tenant elects to construct pursuant to Funding Agreement #3 an interim relocation Car Pound at the South Brooklyn Marine Terminal site described in Exhibit J or such other site in the City as Landlord may select if events have occurred after the date of this Lease that make it no longer feasible in Landlord's judgment to construct an interim relocation Car Pound at the South Brooklyn Marine Terminal site (the "Temporary Car Pound Relocation Site"); provided, however, that with respect to any other site selected by Landlord in accordance with the foregoing, Landlord shall represent and warrant to Tenant that the construction of an interim relocation Car Pound shall be capable of being completed by a date not later than the date that construction of an interim relocation Car Pound at the South Brooklyn Marine Terminal site could have been completed. Notwithstanding the foregoing, if Tenant gives a Self-Help Notice within three (3) months before or after the second -124- anniversary of the Lease Execution Date, and if Landlord certifies in good faith that completion of construction of a permanent relocation Car Pound and causing the Possessory Date to occur will not require more than an additional ninety (90) days after the date of the Self-Help Notice, Tenant shall not commence construction of an interim relocation Car Pound unless the Possessory Date shall not have occurred upon or prior to the expiration of such 90-day period. (b) If pursuant to the Self-Help Notice Tenant commences construction of the interim relocation Car Pound at the Temporary Car Pound Relocation Site, and as a result thereof Tenant is entitled to any Funding under Funding Agreement #3, then, if and to the extent that EDC defaults in providing any such Funding, Tenant shall have the right to offset all such defaulted Funding against future installments of Rental (excluding Impositions, but including College Point Improvement Fund Payments) as provided in Sections 3.06 and 4.01(a). Section 12.05. Tenant's Right to Terminate the Lease. If the Possessory Date shall not have occurred on or prior to the later to occur of (i) the first (1st) anniversary of the Car Pound Removal Date or (ii) if Tenant has given the -125- Self-Help Notice, the first (1st) anniversary of the delivery of the Self-Help Notice, Tenant may give written notice to Landlord of its election to terminate this Lease; provided, however, that, even if Tenant has given the Self-Help Notice it shall nonetheless have the right to terminate this Lease at any time after the first (1st) anniversary of the Car Pound Removal Date, but if Tenant elects to terminate this Lease prior to the first (1st) anniversary of the delivery of the Self-Help Notice, such termination shall not be effective unless and until Tenant shall have repaid to EDC all Funding received by Tenant under Funding Agreement #3. Section 12.06. Interim Car Pound. Notwithstanding anything to the contrary contained in this Lease, in the event that either (i) Tenant gives Landlord the Car Pound Removal Notice at any time on or before December 1, 1994 or (ii) Tenant gives Landlord the Car Pound Removal Notice at any time after December 1, 1994 and Landlord fails within thirty (30) days thereafter to certify in writing to Tenant that it believes in good faith that completion of the permanent relocation Car Pound and causing the Possessory Date to occur will not require more than six (6) months after the date of the Car Pound Removal Notice, then Landlord, in furtherance of its obligations pursuant to Section 12.01 hereof, shall promptly after the receipt of the Car Pound Removal Notice commence construction of an interim relocation Car Pound, which interim -126- relocation Car Pound shall be constructed by Landlord at the South Brooklyn Marine Terminal site unless events have occurred after the date of this Lease that make it no longer feasible for Landlord to construct an interim relocation Car Pound at the South Brooklyn Marine Terminal site. Section 12.07. Interim Car Pound License. Landlord hereby grants to Tenant a license, which will become effective in the event that Tenant delivers the Self-Help Notice and Landlord designates the Temporary Car Pound Relocation Site, to enter the Temporary Car Pound Relocation Site for all of the purposes set forth in Funding Agreement #3. The term of this license shall extend until such time that Tenant has completed its obligations at the Temporary Car Pound Relocation Site pursuant to Funding Agreement #3 and shall not be terminated or revoked by Landlord prior to such time unless Funding Agreement #3 is terminated in accordance with its terms. -127- ARTICLE 13 CONSTRUCTION WORK Section 13.01. Construction of the Project. (a) Commencement and Completion of Project. Tenant shall Commence Construction of the Project not later than the Outside Commencement Date, and Substantially Complete at least a Minimum Printing Facility on or before the Scheduled Completion Date. (b) Definitions. (i) "Commence Construction of the Project" or "Commencement of Construction of the Project" means the commencement of the driving of piles at the Project. Commencement of Construction of the Project shall not be deemed to have occurred merely because Tenant has commenced or performed any of the following functions (herein referred to as "Preliminary Site Work"); (1) physical surveys of the site and other functions of an investigatory nature, (2) Geotechnical investigations including, without limitation, the driving of a "split spoon" into the ground to determine the ability of the soil to support a structure, (3) the bringing on to the Premises of temporary construction structures and trailers, (4) removing debris from and grading and leveling the site, (5) the filling, rough grading and compaction of -128- the site to provide for a particular building elevation, (6) drainage construction and site grading and pavement and (7) the placement and storage of equipment and construction materials at the Premises. (ii) "Construction Commencement Date" means the date of Commencement of Construction of the Project. The Construction Commencement Date shall be established by delivery to Landlord of a certification from the Architect or Engineer of Record that the commencement of the driving of piles at the Project has occurred. (iii) "Construction of the Project" means the construction on the Land of the Project, in accordance with the approved Plans and Specifications. (iv) "Outside Commencement Date" means the tenth (10th) anniversary of the Lease Execution Date, which date shall be extended as the result of Unavoidable Delays. (v) "Plans and Specifications" means the drawings and plans and specifications for the Project or any portion or phase of the Project, prepared by the Architect, complying with Section 13.01(e), and approved pursuant to Section 13.01(c) and/or (d) as such plans and specifications and drawings may be modified, amended and supplemented from time to time in accordance with the terms of this Lease. -129- (vi) "Reviewable Features" means, with respect to any submission of proposed Plans and Specifications, features of such submission the review of which is necessary to enable Lease Administrator to determine: (A) compliance with Requirements set forth in the Urban Renewal Plan to the extent that such Requirements are applicable to the Project, and (B) the number of square feet of Gross Building Area to be constructed. (vii) "Scheduled Completion Date" means the date that is thirty (30) days after notice from Landlord given to Tenant at any time on or after the fourth (4th) anniversary of Commencement of Construction of the Project, which date shall be extended as the result of Unavoidable Delays. (viii) "Substantial Completion" or "Substantially Complete(d)" means, the completion of construction of an enclosed envelope of floor space, environmentally controlled and containing (1) heating, ventilating and air conditioning systems installed for general-purpose or multi-purpose occupancy, (2) water, sewer and sanitary facilities suitable for multi-purpose occupancy, (3) electrical service, including interior lighting, throughout the -130- constructed structure suitable for general purpose or multi-purpose occupancy, (4) fire detection and protection and safety facilities suitable for general-purpose or multi-purpose occupancy throughout the structure, and (5) building shell construction constructed to a level adequate to permit build-to-suit occupancy with interior and exterior walls and required for structural integrity; provided, however that such structure need not include production systems and the specific construction features required to make the above described utility system operational in the production of newspapers. Substantial Completion shall be established by delivery to Landlord of a certification from the Architect or Engineer of Record that the above-described structure shall have been constructed in accordance with the Plans and Specifications (subject to immaterial deviations) and any other construction documents filed with the Buildings Department, and the Substantial Completion Date shall be established by the date of delivery of such certification. (c) Landlord Review of Plans. At least twenty-five (25) days prior to the Commencement of Construction of the Project, Tenant shall submit proposed Plans and Specifications -131- for the Project to Lease Administrator for review and approval of Reviewable Features, except that Tenant may submit proposed Plans and Specifications for each phase or segment of construction at least twenty-five (25) days before Commencement of Construction of the portion of the Project described therein if Tenant elects to submit the Plans and Specifications in a phased sequence. The Plans and Specifications shall be prepared in accordance with all applicable requirements of the Buildings Department (including, without limitation, the requirements of the New York City Building Code) and all other applicable Requirements and, unless previously submitted, shall be accompanied by a letter from the Architect or the Engineer of Record stating that the facility contemplated by such Plans and Specifications to be constructed, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed to accommodate the printing presses and other equipment that Tenant has informed such Architect or Engineer of Record that it intends to install at the facility contemplated by such Plans and Specifications. The Plans and Specifications shall, in addition, be prepared, to the extent reasonably practicable, in such manner as to clearly show (either graphically or by appropriate notes) that all elements of the design conform to the Urban Renewal Plan to the extent that such requirements are applicable to the Project. Lease Administrator's review and approval of the Plans and -132- Specifications as provided in this Section 13.01(c) shall be limited to Reviewable Features, and Lease Administrator's approval, shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, Landlord acknowledges and agrees that (i) subject to Tenant's obligation to submit more complete Plans and Specifications at a later date, Plans and Specifications submitted to Lease Administrator pursuant to the terms of this Section 13.01(c) need not be completed to the extent needed by the Buildings Department to issue a building permit, but should, in any event, be completed to the extent needed by the Buildings Department to issue a foundation permit and (ii) Plans and Specifications submitted to Lease Administrator in a phased sequence pursuant to the terms hereof need not show compliance with all Requirements set forth in the Urban Renewal Plan that are applicable to the Project (subject to Tenant's ultimate obligation to submit Plans and Specifications which, in the aggregate, show compliance with all such Requirements), but should, in any event, show compliance with all such Requirements of the Urban Renewal Plan that could be violated by construction pursuant to the Plans and Specifications for the particular phase of construction submitted to Lease Administrator (e.g., Tenant shall have the right to submit Plans and Specifications for the construction of a building prior to finalizing its landscaping and signage design, in which event such Plans and -133- Specifications (x) would be required to demonstrate compliance with setback and building exterior materials Requirements of the Urban Renewal Plan, but (y) would not be required to demonstrate compliance with signage and landscaping Requirements of the Urban Renewal Plan). Lease Administrator shall approve or, if and to the extent that the Plans and Specifications are not in compliance with the Requirements of the Urban Renewal Plan which are required to be shown on such Plans and Specifications pursuant to the immediately preceding sentence or are not for a facility containing at least the square footage of foundation and floor area required for the Minimum Printing Facility, disapprove and comment on such submission within twenty-five (25) days after receipt thereof and, if approved, shall, concurrently with notification to Tenant of such approval, advise the Buildings Department and any other applicable Governmental Authority of such approval. If Lease Administrator has disapproved any submission of the Plans and Specifications or any portion or aspect thereof, such disapproval shall be given to Tenant in writing in a detailed manner setting forth the reasons for such disapproval within such twenty-five (25) day period. Any portions or aspects of the Plans and Specifications which Lease Administrator has not disapproved and commented on as aforesaid shall, upon the expiration of such twenty-five (25) day period, -134- be deemed approved. If the portions or aspects that have been approved or deemed approved constitute an independent element of the Project, Lease Administrator shall promptly advise the Buildings Department and any other applicable Governmental Authority of such approval. Tenant shall submit to Lease Administrator modified proposed Plans and Specifications with respect to any portions or aspects of such Plans and Specifications that are disapproved and commented on by Lease Administrator, responsive to such comments that are given to Tenant with respect to such disapproval, for Lease Administrator's approval or further disapproval and comment, until approved by Lease Administrator. Lease Administrator shall approve or disapprove and comment on such subsequent submission within fifteen (15) days after receipt thereof and, if approved, shall, concurrently with notification to Tenant of such approval, advise the Buildings Department and any other applicable Governmental Authority of such approval. (d) Modification of Approved Plans and Specifications. If Tenant desires to modify the Plans and Specifications, after they have been approved, Tenant shall submit the revisions to Landlord. Landlord shall review such submission as if such were an initial submission under Section 13.01(c), and the provisions thereof governing such a submission shall apply, except that the period of fifteen (15) days shall be substituted for the twenty-five (25) day period set forth in Section 13.01(c) hereof. -135- (e) Compliance with Requirements, Etc. The Plans and Specifications shall comply with all applicable Requirements, subject to the provisions hereof relating to the submission of Plans and Specifications in a phased sequence. It shall be Tenant's responsibility to assure such compliance. Landlord's approval of the Plans and Specifications shall not be, nor shall be construed as being, or relied upon as, a determination as to the adequacy or sufficiency, structural or otherwise, of the Plans and Specifications or of the compliance of such Plans and Specifications with the Requirements (other than the Urban Renewal Plan). (f) Landlord's Right to Visit Premises. Landlord shall have the right to visit the Premises at reasonable intervals upon reasonable advance notice to Tenant. (g) Arbitration of Plan Disapproval. In the event that Tenant disputes whether Landlord has acted reasonably in withholding its approval of Plans and Specifications or modifications or resubmissions of Plans and Specifications, Tenant shall have the right to submit such dispute to arbitration pursuant to the provisions of Article 34 hereof, and such Plans and Specifications or modifications or resubmissions thereof shall be deemed approved if the Arbiter determines that Landlord has acted unreasonably. (h) Offset Against Rental. -136- (i) In the event that Plans and Specifications or modifications or resubmissions thereof are deemed approved pursuant to the terms hereof because Landlord has not responded timely, Tenant shall give notice to Landlord advising Landlord that such plans are deemed approved, and if Landlord has not advised the Buildings Department and any applicable Reviewing Party of such approval within ten (10) days after the giving of such notice by Tenant, then Tenant shall be entitled to an offset against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) payable hereunder in an amount (the "Plans and Specifications Offset Amount") equal to $1,000 for each day during the period commencing on the day immediately following the expiration of such ten (10) day period and ending on the day on which Landlord advises the Buildings Department and any applicable Reviewing Party of such approval. (ii) In the event that Landlord approves the Plans and Specifications or modifications or resubmissions thereof and Landlord fails to advise the Buildings Department and any applicable Reviewing Party of such approval within ten (10) days after such approval, then Tenant shall be entitled to an offset -137- against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) payable hereunder in an amount equal to the Plans and Specifications Offset Amount for each day during the period commencing on the day immediately following the expiration of such ten (10) day period and ending on the day on which Landlord advises the Buildings Department and any applicable Reviewing Party that such Plans and Specifications have been approved. (iii) In the event that Plans and Specifications or modifications or resubmissions thereof are deemed approved because an Arbiter determines that Landlord has acted unreasonably in withholding its approval thereof, and Landlord fails to notify the Buildings Department and any applicable Reviewing Party of such approval within ten (10) days after the rendering of the Arbiter's decision to such effect, then Tenant shall be entitled to an offset against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) payable hereunder in an amount equal to the Plans and Specifications Offset Amount for each day during the period commencing on the day Tenant gives a Dispute Notice in connection with Landlord's -138- withholding of approval and ending on the day on which Landlord notifies the Buildings Department and any applicable Reviewing Party that such Plans and Specifications or modifications or resubmissions thereof have been approved. Section 13.02. Subsequent Construction Work. If any Subsequent Construction Work involves work that would affect the Reviewable Features, Tenant shall submit to Landlord at least twenty (20) days before commencement of such Subsequent Construction Work all of the plans and specifications for the proposed Subsequent Construction Work, in reasonable detail (all aspects of such plans and specifications which describe, involve or may affect in any way Reviewable Features shall be subject to review and approval or disapproval by Landlord in accordance with the provisions of Section 13.01(d) as a modification of the approved Plans and Specifications and deemed approved if Landlord does not disapprove such Plans and Specifications within fifteen (15) days after their submission to Landlord). If any Subsequent Construction Work involves an expansion of the foundation, Tenant shall also submit a letter from the Architect or Engineer of Record with respect to such expansion substantially similar to the letter required by the second sentence of Section 13.01(c) hereof; Section 13.03. [Intentionally Omitted]. -139- Section 13.04. Supervision of Architect. All Construction Work in connection with the Construction of the Project shall be carried out under the supervision of an Architect. Section 13.05. Conditions Precedent to Tenant's Commencement of All Construction Work. (a) Permits and Insurance. Tenant shall not commence any Construction Work unless (i) Tenant shall have obtained and delivered to Landlord copies of all necessary permits, consents, certificates and approvals of Governmental Authorities, and (ii) Tenant shall have delivered to Landlord copies, certificates or memoranda of the policies of insurance required to be carried pursuant to the provisions of Article 7. (b) Cooperation of Landlord in Obtaining Permits and Granting Easements. Landlord shall cooperate with Tenant in obtaining the permits, consents, certificates and approvals required by Section 13.05(a) and shall grant any necessary easements (subject to Tenant's obligation to grant or join in the granting of any such easements as the result of the leasehold interest conveyed to Tenant by this Lease), including, without limitation, utility and sewer easements and shall not unreasonably withhold or delay its signature on any application made by Tenant required to obtain such permits, consents, certificates, approvals and easements. Tenant shall reimburse Landlord within ten (10) days after Landlord's demand -140- for any third-party out-of-pocket cost or expense incurred by Landlord in obtaining or granting the permits, consents, certificates and approvals required by Section 13.05(a) and any necessary easements; provided that Landlord shall have given Tenant reasonable advance notice of the need to incur such third-party out-of-pocket costs and an opportunity to amend Tenant's request to avoid the need for such third-party, out-of-pocket costs. (c) Approval of Plans and Specifications. Tenant shall neither (i) commence Construction of the Project unless and until Landlord shall have approved (or been deemed to have approved) the Plans and Specifications as required above, nor (ii) if applicable to the Subsequent Construction Work being performed, commence any Subsequent Construction Work, unless and until Landlord shall have reviewed and, if required pursuant to the specific provisions of this Lease, approved (or been deemed to have approved) the proposed plans and specifications in the manner provided herein. Section 13.06 Completion of Construction Work. Upon substantial completion of any Construction Work the plans and specifications for which were required to be approved by Landlord, Tenant shall furnish Landlord with (a) a certification of the Architect that it has examined the applicable plans and specifications and that, in its professional judgment, after diligent inquiry, to its actual -141- knowledge and belief, the Construction Work has been substantially completed in accordance with the plans and specifications applicable thereto, (b) a copy or copies of all Certificate(s) of Occupancy for the Improvements issued by the Buildings Department in Tenant's possession, and (c) a complete set of "as built" plans and a survey showing the Improvements or, if "as built" plans are not available, a complete set of the Plans and Specifications with all addenda thereto and changes in respect thereof, marked to show all additions, deletions, changes and selections made during the course of Construction Work. Tenant's agreement with the Architect shall provide that Landlord shall have a license to use such "as built" plans (or submission in lieu thereof as provided herein), subject to any commercially reasonable reservations or restrictions reserved by the Architect including, without limitation, copyright and similar rights of the Architect to prohibit use of designs for purposes unrelated to the Improvements, as such rights exist in law or may appear in the Architect's contract, as well as payment of any moneys that are owed to the Architect with respect to the Project. Section 13.07. Title to the Improvements and Materials. Title to the Improvements (including without limitation the Project) shall be and vest in Landlord. Materials to be incorporated in the Project, shall, effective upon their purchase and at all times thereafter, constitute the -142- property of Landlord, and upon Construction of the Project or any Construction Work, or the incorporation of such materials therein, title thereto shall be and continue in Landlord subject to this Lease. However, (a) Landlord shall not be liable in any manner for payment or otherwise to any contractor, subcontractor, laborer or supplier of materials in connection with the purchase of any such materials, and (b) Landlord shall have no obligation to pay any compensation to Tenant by reason of its acquisition of title to the materials, and (c) under no circumstances shall title to any Tenant's Property vest in Landlord. Section 13.08. [Intentionally Omitted]. Section 13.09. Construction Agreements. (a) Required Clauses. All Construction Agreements shall include the following provisions: (i) "["Contractor"] ["Subcontractor"] ["Materialman"] hereby agrees that immediately upon the purchase from ["contractor"] ["subcontractor"] ["materialman"] of any building materials to be incorporated in the Project (as defined in the lease pursuant to which the contract purchaser hereunder acquired a leasehold interest in the property (the "Lease")), such materials shall become the sole -143- property of the City of New York, notwithstanding that such materials have not been incorporated in, or made a part of, such Project at the time of such purchase; provided, however, that neither EDC (as defined in the Lease) nor the City of New York shall be liable in any manner for payment or otherwise to ["contractor"] ["subcontractor"] ["materialman"] by reason of such materials becoming the sole property of the City of New York." (ii) "["Contractor"] ["Subcontractor"] ["Materialman"] hereby agrees that notwithstanding that ["contractor"] ["subcontractor"] ["materialman"] performed work at the Premises (as such term is defined in the Lease) or any part thereof, neither EDC (as defined in the Lease) nor the City of New York shall be liable in any manner for payment or otherwise to ["contractor"] ["subcontractor"] ["materialman"] in connection with the work performed at the Premises. (iii) "The City of New York and EDC (as defined in the Lease) are not parties to this -144- ["agreement"] ["contract"] and will not be responsible to any party for any claims of any nature whatsoever arising or which may arise from such ["contract"] ["agreement"]." (b) Definition. "Construction Agreement(s)" means a written agreement to do any Construction Work. Section 13.10. Consent for Demolition. Tenant shall have the right to demolish any Improvements during the Term without the consent of Landlord, provided that such demolition will not permanently (subject to the provisions hereof regarding Abandonment of the Project) restrict the use of the remaining Improvements as at least a Minimum Printing Facility, or a smaller Printing Facility that has substantially the same or greater capacity with respect to the printing, production and distribution of newspapers, magazines, and other periodicals or printed materials as the Minimum Printing Facility. Tenant's violation of this Section l3.l0 shall constitute an Abandonment of the Project pursuant to subparagraph (e) of the definition of Abandonment of the Project, but shall not constitute a default under this Lease. -145- ARTICLE 14 REPAIRS, MAINTENANCE, ETC. Section 14.01. Maintenance of the Premises, Etc. Tenant shall take good care of the Premises, adjacent sidewalks and curbs, and water, sewer and gas connections, and shall keep and maintain the same in good condition, all at Tenant's sole cost and expense. Tenant shall also comply with the landscaping requirements of the Urban Renewal Plan. Section 14.02. [Intentionally Omitted]. Section 14.03. Free of Dirt, Snow, Etc. Tenant, at its sole cost and expense, shall keep clean and free from dirt, snow, ice, rubbish, obstructions and encumbrances the sidewalks and all other areas and spaces located in front of, or adjacent to, the Premises for which Tenant would be so responsible by law if it were the fee owner of the Premises. Section 14.04. No Obligation of Landlord To Repair or to Supply Utilities. Subject to the provisions of Article 27 hereof, Landlord shall not be required (except to the extent, if any, that the City in its governmental capacity, may be legally required) to supply any facilities, services or utilities whatsoever to the Premises and shall not have any duty or obligation to make any alteration, change, improvement, replacement, Restoration or repair to the Improvements, and -146- Tenant assumes the full and sole responsibility for the condition, operation, alteration, change, improvement, replacement, Restoration, repair, maintenance and management of the Premises. -147- ARTICLE 15 CAPITAL IMPROVEMENTS Section 15.01. Capital Improvements. (a) Tenant's Right to Make Capital Improvements. Effective upon Substantial Completion of the Project, Tenant shall have the right to make Capital Improvements; provided that Tenant shall comply with the applicable provisions of Article 13 and Article 16. (b) Definition. "Capital Improvement" means a change, alteration, or addition to or replacement of the Improvements, other than Construction of the Project or a Restoration. -148- ARTICLE 16 REQUIREMENTS OF GOVERNMENTAL AUTHORITIES Section 16.01. Requirements. (a) Obligation to Comply. In connection with any Construction Work, and with the maintenance, management, use and operation of the Premises and Tenant's performance of its obligations hereunder, Tenant shall, subject to the provisions of Section 35.03, comply or take all appropriate measures to attempt to comply with all Requirements. No consent to, approval of, or acquiescence in any plans or actions of Tenant by Landlord, if any, shall be relied upon or construed as being a determination that such are in compliance with the Requirements, or in the case of construction plans, a determination that such are structurally, architecturally or by any other standard technically correct; provided that, notwithstanding anything to the contrary contained herein, any plans and specifications approved by EDC shall be deemed to comply with the Urban Renewal Plan. (b) Definition. "Requirements" means: (i) any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders and requirements of all Governmental Authorities (currently in force or hereafter adopted) applicable to the Premises or any street, road, avenue or -149- sidewalk comprising a part of the Premises, or adjacent to the Premises to the extent the owner of the Premises would have legal responsibility therefor (including, without limitation, the City Zoning Resolution, the Building Code of New York City and the laws, rules, regulations, orders, ordinances, statutes, codes and requirements of any applicable Fire Rating Bureau or other body exercising similar functions) and the Urban Renewal Plan; and (ii) the Certificate(s) of Occupancy issued for the Project as then in force. -150- ARTICLE 17 DISCHARGE OF LIENS; BONDS Section 17.01. Creation of Liens. Subject to the provisions of Article 11, Section 13.05(b) and Section 17.02 hereof, Tenant shall not create, cause to be created, or suffer or permit to remain, a lien, encumbrance or charge upon this Lease, the leasehold estate created hereby, the income therefrom or the Premises or any part thereof other than as specifically permitted by this Lease, unless such liens, encumbrances or charges are subordinate to the interest of Landlord in the Premises. The loss by Tenant of its interest in this Lease through the foreclosure of any such subordinate lien, encumbrance or charge shall constitute an Event of Default, subject, however, to the provisions of Article 11. Section 17.02. Discharge of Liens. If any mechanic's, laborer's, vendor's or materialman's lien is filed against the Premises or any part thereof and the aggregate amount of such liens exceeds $500,000, or if any public improvement lien created, or caused or suffered to be created by Tenant shall be filed against any assets of, or funds appropriated to, Landlord, Tenant shall, within thirty (30) days after receiving notice of the filing of such mechanic's, laborer's, vendor's, materialman's or similar statutory lien or public improvement lien, cause it to be vacated or discharged of record by payment, deposit, bond, order of a court of competent -151- jurisdiction or otherwise. However, Tenant shall not be required to discharge any such lien if Tenant shall have (a) furnished Landlord with a cash deposit, bond, personal guaranty or other security reasonably satisfactory to Landlord, in an amount sufficient to pay the lien with interest and penalties and (b) brought an appropriate proceeding to discharge such lien and is prosecuting such proceeding with diligence and continuity; except that if despite Tenant's efforts to seek discharge of the lien Landlord reasonably believes such lien is about to be foreclosed and so notifies Tenant, Tenant shall within five (5) Business Days after receipt of such notice, commence to take appropriate steps to cause such lien to be discharged of record or Landlord may use the security furnished by Tenant in order to so discharge the lien. -152- ARTICLE 18 REPRESENTATIONS Section 18.01. Landlord's Representations and Warranties. Landlord hereby warrants and represents that: (a) Landlord has good, insurable and marketable title to the Premises, free and clear of all liens and encumbrances except the Permitted Encumbrances. (b) Except for this Lease, there are no leases or occupancy agreements affecting the Premises. (c) There are no service, maintenance, supply or management agreements affecting the Premises as of the date hereof entered into by Landlord or any predecessor-in-interest of Landlord, except for the appointment of EDC as Lease Administrator pursuant to Article 42 hereof. (d) Landlord has no employees engaged in work at the Premises, except for employees of the New York City Police Department, who will be present on Parcel C as more particularly described in and pursuant to the terms of Section 2.02 hereof for the period expiring on the day immediately preceding the Possessory Date. (e) There are no taxes, assessments (including assessments which may be paid in installments), College Point Improvement Fund Payments, payments to any Business Improvement District or any other amounts whatsoever which are due and payable or which are to become due and payable or a lien, or -153- both, on the Premises with respect to any period of time prior to the Lease Execution Date. (f) Landlord has no knowledge of any pending or threatened condemnation or similar proceeding affecting the Premises or any portion thereof, or pending public improvements in or adjoining the Premises which will adversely affect the Premises; provided, however, that Landlord shall notify Tenant of any such proceeding that it has knowledge of, without regard to whether such proceeding might have an adverse effect on the Premises. (g) Landlord has no knowledge of any pending or threatened legal action of any kind or character whatsoever affecting Landlord or the Premises which will adversely affect the Premises upon or subsequent to the Lease Execution Date. (h) Each person executing and delivering this Lease and all documents to be executed and delivered on behalf of Landlord in regard to the consummation of the transaction which is the subject of this Lease represents to Tenant that he or she has due and proper authority to execute and deliver same. Landlord has the full right, power and authority to sell and convey or lease the Premises to Tenant as provided in this Lease and to carry out its obligations set forth in this Lease. The consummation by Landlord of the transaction which is the subject of this Lease will not conflict with or result in a breach of any of the terms of any agreement or instrument -154- to which Landlord is a party or by which Landlord is bound or constitute a default thereunder, and Landlord has obtained any and all required authorizations and approvals of the execution and delivery of this Lease, the transaction which is the subject of this Lease, and all documents referred to in this Lease. No other party has any right to purchase or lease the Premises, or any part thereof. (i) No representation or warranty by Landlord in this Lease knowingly omits a material fact necessary to make any representation or warranty not misleading. (j) Landlord has not done or suffered anything whereby the Premises has been transferred or encumbered in any way whatsoever except for the Permitted Encumbrances. (k) No air or development rights with respect to the Premises have been transferred or sold, and no contract to sell such air or development rights is outstanding, other than this Lease. Section 18.02. Tenant's Acknowledgment of No Other Representations. Tenant acknowledges, represents and confirms that it or its authorized representative has visited the Premises and is fully familiar with the physical condition thereof on the Lease Execution Date. Tenant confirms that: (a) except for the Car Pound and any Hazardous Substances that may be on or under the Land, as more specifically set forth in Section 43.19 hereof, the Premises in -155- their condition and state of repair on the Lease Execution Date are acceptable; (b) except as specifically set forth in this Lease, no representations, statements, or warranties, express or implied, have been made by, or on behalf of, Landlord or EDC (and Tenant has not relied on any such representations, statements or warranties) with respect to the Premises or the transactions contemplated by this Lease, the physical condition thereof, the zoning or other laws, regulations, rules and orders applicable thereto or the use that may be made of the Premises,; and (c) Landlord shall not be liable in any event whatsoever for any latent or patent defects in the Premises existing on the Lease Execution Date , except for the presence of Hazardous Substances, to the extent set forth in Section 43.19 hereof. Section 18.03. No Payments. Tenant warrants and represents that no officer, agent, employee or representative of The City of New York or EDC has received for its own benefit any payment or other consideration from Tenant for the making of this Lease and that no officer, agent, employee or representative of The City of New York or EDC has any interest, directly or indirectly, in Tenant's interest in this Lease. -156- ARTICLE 19 LANDLORD NOT LIABLE FOR INJURY OR DAMAGE, ETC. Section 19.01. Landlord not Liable for Injury or Damage, Etc. (a) Neither Landlord (in its capacity as Landlord as opposed to its municipal capacity) nor Lease Administrator shall be liable for any injury or damage to Tenant or to any Person happening on, in or about the Premises or its appurtenances, nor shall they be liable for any injury or damage to the Premises or to any property belonging to Tenant or to any other Person that may be caused by fire, by breakage, or by the use, misuse or abuse of any portion of the Premises (including, but not limited to, any of the common areas within the Improvements, hatches, openings, installations, stairways or hallways or other common facilities, and the streets or sidewalk areas within or adjacent to the Premises) or that may arise from any other cause whatsoever, unless caused by Landlord or Lease Administrator or their members', agents', employees' or contractors' negligence, misconduct or tortious acts. (b) Neither Landlord (in its capacity as Landlord as opposed to its municipal capacity) nor Lease Administrator shall be liable to Tenant or to any Person for (i) any failure of water supply, gas or electric current, -157- (ii) any injury or damage to any property of Tenant or of any Person or to the Premises caused by or resulting from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storm or disturbance or by or from water, rain or snow which may leak or flow from the street, sewer, gas mains or subsurface area or from any part of the Premises or by or from leakage of gasoline or oil from pipes, appliances, sewer or plumbing works therein or from any other place, or (iii) any interference with light or other incorporeal hereditaments by any Person, or caused by any public or quasi-public work, unless, and only to the extent of the proportion by which, caused by Landlord's or Lease Administrator's, or their agents', employees' or contractors' negligence, misconduct or tortious acts. Section 19.02. Waiver of Claims. Notwithstanding anything to the contrary contained herein, Tenant hereby releases Landlord with respect to any claim (including a claim for negligence) which Tenant might otherwise have against Landlord for loss, damage or destruction with respect to its property occurring during the Term, but only to the extent to which Tenant is, or is required to be, insured under a policy or policies containing a waiver of subrogation as provided in Section 7.02(b) hereof. -158- ARTICLE 20 INDEMNIFICATION OF LANDLORD AND OTHERS Section 20.01. Tenant's Obligation to Indemnify. From and after the Possessory Date, Tenant shall indemnify and save Landlord and Lease Administrator and their respective members, officers, directors, employees, agents and servants (collectively, the "Landlord Indemnitees") harmless from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable architects' and attorneys' fees and disbursements, that may be imposed upon or incurred by or asserted against any of the Landlord Indemnitees by reason of any of the following, except that no Landlord Indemnitee shall be so indemnified and saved harmless to the extent of the portion by which such liabilities, etc. are caused by the negligence, misconduct or tortious acts of any Landlord Indemnitee: (a) Construction Work. Construction work or any other work or act done in, on, or about the Premises or any part thereof; (b) Ownership. The ownership or use, non-use, possession, occupation, alteration, condition, operation, maintenance or management of the Premises, adjacent sidewalks and curbs, or water, sewer and gas connections; (c) Acts or Failure to Act of Tenant/Subtenant. Any act or failure to act on the part of Tenant or any -159- Subtenant or any of its or their respective partners, officers, shareholders, directors, agents, contractors, servants, employees, or licensees with respect to the Premises, adjacent sidewalks and curbs, or water, sewer and gas connections; (d) Accidents, Injury to Person or Property. Any accident, injury (including death at any time resulting therefrom) or damage to any Person or property occurring in, on, or about the Premises; or (e) Default of Tenant. Any failure on the part of Tenant to pay Rental or keep, observe and perform any of the other terms, covenants, agreements, provisions, conditions or limitations contained in this Lease. Section 20.01A. Landlord's Obligation to Indemnify. Landlord shall indemnify and save Tenant and Tenant's Affiliates and their respective officers, directors, employees, agents and servants (collectively, the "Tenant Indemnitees") harmless from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses, including without limitation, reasonable architects' and attorneys' fees and disbursements, that may be imposed upon or incurred by or asserted against any of the Tenant Indemnitees in connection with the Premises, adjacent sidewalks and curbs, or water, sewer and gas connections, by reason of the negligence, misconduct or tortious acts of Landlord or Lease Administrator or their respective partners, -160- members, officers, shareholders, directors, employees, agents, contractors or servants, except that no Tenant Indemnitee shall be so indemnified and saved harmless to the extent of the portion by which such liabilities, etc. are caused by the negligence, misconduct or tortious acts of any Tenant Indemnitee. Section 20.02. Contractual Liability. The obligations of Tenant and Landlord under this Article shall not be affected in any way by the absence of insurance coverage, or by the failure or refusal of any insurance carrier to perform an obligation on its part under insurance policies affecting the Premises. Section 20.03. Defense of Claim, Etc. If any claim, action or proceeding is made or brought against any of the Landlord Indemnitees or the Tenant Indemnitees by reason of any event to which reference is made in Sections 20.01 or 20.01A, then, upon demand by Landlord or Tenant, as the case may be, the other shall either resist, defend or satisfy such claim, action or proceeding in such Landlord or Tenant Indemnitee's name, by the attorneys for, or approved by, Landlord or Tenant's insurance carrier, as the case may be (if such claim, action or proceeding is covered by insurance) or by such other attorneys as the indemnifying party shall select (subject to the approval of Landlord or Tenant, as the case may be, which approval shall not unreasonably be withheld or delayed); -161- provided that the indemnifying party shall not be liable for any settlement agreed to by any Landlord or Tenant Indemnitee unless such settlement is approved in writing by the indemnifying party, which approval shall not unreasonably be withheld or delayed. The foregoing notwithstanding, such Landlord or Tenant Indemnitee may at its own cost and expense engage its own attorneys to defend such Landlord or Tenant Indemnitee, or to assist such Landlord or Tenant Indemnitee in such Landlord or Tenant Indemnitee's defense of such claim, action or proceeding, as the case may be; provided, that (i) such attorneys shall be subject to the approval of the indemnifying party, which approval shall not unreasonably be withheld or delayed (provided, however, that the approval of the indemnifying party shall not be required with respect to the engagement of an attorney in a strictly advisory capacity, with no right to file an appearance, participate in depositions, file legal papers or otherwise take an active role in the defense) and (ii) such Landlord or Tenant's Indemnitee shall be deemed to have waived its right to be indemnified pursuant to the provisions of this Lease if and to the extent that it engages its own attorneys to defend or assist in the defense of such Landlord or Tenant Indemnitee after it has received written notice from the indemnifying party that either (x) the indemnifying party does not approve such attorneys or (y) the engagement of such attorneys shall void or adversely affect the insurance coverage of such indemnifying party. -162- Section 20.04. Notice. In case any action or proceeding be brought against any Landlord or Tenant Indemnitee for which such Landlord or Tenant Indemnitee claims indemnification from Tenant or Landlord, as the case may be, pursuant to the terms of this Article 20, Landlord or Tenant, as the case may be, shall give prompt written notice thereof to the indemnifying party. Section 20.05. Survival Clause. The provisions of this Article shall survive the Expiration Date. -163- ARTICLE 21 PURCHASE OPTION Section 21.01. Purchase Option. (a) Option. Subject to the terms and conditions hereof, Tenant shall have the right to purchase, or to select a designee to purchase, the Premises and all personal property thereon belonging to Landlord (together, the "Property") at any time after Substantial Completion of Construction of the Initial Improvements and on or prior to the Expiration Date, for a purchase price of six million, nine hundred thousand dollars ($6,900,000) (the "Basic Purchase Price") as such purchase price may be adjusted pursuant to any provision of this Lease or the Purchase Agreement (as finally adjusted, the "Purchase Price"). (b) Exercise of Option. Tenant may exercise its option to purchase the Property by delivering a notice of such election to Landlord (the "Purchase Notice"). The Purchase Notice shall include the designation of a closing date (the "Closing Date") for the purchase, which shall be a business day not less than forty-five (45) nor more than one hundred eighty (180) days after the date of the Purchase Notice. (c) Notice of Failure to Exercise. In the event that Tenant shall not have delivered the Purchase Notice (or a notice that Tenant does not intend to exercise its option to purchase the Property) on or before the date that is -164- ninety (90) days prior to the expiration of the Term, Landlord shall deliver a notice to Tenant advising Tenant that Tenant has failed to exercise its option to purchase the Property and that such option shall be forfeited if not exercised by the date that is forty-five (45) days after the date of such notice (the "Failure to Exercise Notice"). In the event that Landlord fails to deliver the Failure to Exercise Notice by the date that is ninety (90) days prior to the expiration of the Term, the Term shall be automatically extended to the date that is ninety (90) days after the date of the Failure to Exercise Notice. (d) Agreement of Sale and Purchase. Promptly after delivering the Purchase Notice, Tenant shall deliver to Landlord four (4) duplicate originals of the Agreement of Sale and Purchase (the "Purchase Agreement") substantially in the form annexed hereto as Exhibit K, executed by Tenant or Tenant's designee. Tenant shall only make such changes to Exhibit K hereto as may be necessary to (i) insert the parties to the Purchase Agreement, (ii) modify the Purchase Price, if and to the extent required by any provision of this Lease, (iii) designate the Closing Date, (iv) designate the Title Company, (v) complete any items left blank in Exhibit K, (vi) indicate whether Tenant or Tenant's designee elects to take an assignment of the Lease, (vii) provide for compliance with any applicable future laws, rules or regulations -165- including, without limitation, those relating to the filing or submission of tax forms or returns and time periods in connection therewith, (viii) provide any provisions necessary to enable Tenant or Tenant's designee to obtain title insurance from the Title Company at prevailing rates, without excess premium and (ix) include any provisions mutually agreed upon by Landlord and Tenant. The Purchase Agreement shall be deemed executed and delivered by Landlord, as Seller, upon delivery to Landlord of such executed originals thereof; provided, however, that Landlord hereby agrees to execute, as Seller, and deliver to Tenant or Tenant's designee two (2) duplicate originals of the Purchase Agreement within ten (10) Business Days following delivery of the Purchase Agreement to Landlord as confirmation of such deemed execution and delivery. Landlord hereby agrees that if Landlord fails to execute and deliver to Tenant or Tenant's designee two (2) fully-executed duplicate originals of the Purchase Agreement within such ten (10) Business Day period, then Landlord hereby irrevocably constitutes and appoints Tenant as Landlord's attorney-in-fact, coupled with an interest, to execute and deliver the Purchase Agreement to Tenant; provided however, that notwithstanding such execution and delivery by Tenant acting as Landlord's attorney-in-fact, until Landlord, acting on its own behalf, executes and delivers two (2) fully-executed duplicate originals of the Purchase Agreement to Tenant or Tenant's designee, Tenant shall have the -166- right, but not the obligation, to obtain a mandatory injunction from a court of competent jurisdiction directing Landlord to execute, as Seller, and deliver to Tenant or Tenant's designee two (2) fully-executed duplicate originals of the Purchase Agreement; provided, however, that nothing contained herein shall be deemed to require the issuance of any such mandatory injunction or the execution and delivery by Landlord of the Purchase Agreement as a precondition to making the Purchase Agreement binding upon Landlord. Section 21.02. Default under Purchase Agreement; Extension of Term. (a) Purchaser's Default. In the event that the purchase of the Property pursuant to the Purchase Agreement is not consummated because of the Purchaser's default thereunder, Seller's sole remedy shall be the remedy set forth in Section 14.2 of the Purchase Agreement and, notwithstanding such default, this Lease shall remain in full force and effect upon all of its terms and conditions until the expiration of the Term, except that Tenant shall have no further option to purchase the Property pursuant to this Article 21. (b) Seller's Default. In the event that the purchase of the Property pursuant to the Purchase Agreement is not consummated because of the Seller's default thereunder or because of Landlord's failure to execute and deliver the Purchase Agreement, then, in addition to all of the Purchaser's -167- rights and remedies under the Purchase Agreement: (i) for the period (the "First Year Abatement Period") commencing on the date (the "Purchase Default Date") which is the earlier to occur of (x) the eleventh (11th) day following the giving of the Purchase Notice if Landlord has failed to execute and deliver the Purchase Agreement or (y) the date that Seller defaults under the Purchase Agreement, and ending on the earlier to occur or (1) the date that Tenant or Tenant's designee obtains title to the Property pursuant to the provisions of the Purchase Agreement or (2) the day immediately preceding the first anniversary of the Purchase Default Date, all Base Rent coming due under this Lease shall be abated in its entirety; (ii) Land PILOT and Improvements PILOT payable during the First Year Abatement Period shall be payable in arrears in quarterly installments equal to the last amount of such quarterly installments paid immediately prior to the Purchase Default Date; (iii) for the period (the "Remaining Abatement Period") commencing on the first anniversary of the Purchase Default Date and ending on the date that Tenant or Tenant's designee obtains title to the Property pursuant to the provisions of the Purchase Agreement, all Base Rent, Land PILOT and Improvements PILOT coming due under this Lease shall be abated in their entirety; (iv) in the event that Tenant or Tenant's designee has not obtained title to the Property pursuant to the provisions of the Purchase Agreement prior to -168- the scheduled expiration of the Term, this Lease shall automatically be extended for an additional term, not to exceed ninety-nine (99) years, which shall expire and come to an end on the earlier to occur of (x) the date on which Tenant or Tenant's designee obtains title to the Property pursuant to the provisions of the Purchase Agreement or (y) the date specified by Tenant in a notice to Landlord electing to terminate such extended Term, such extended Term to be upon all of the terms and conditions set forth in this Lease, except that Rental payable hereunder shall be abated in accordance with the provisions of this Section 21.02(b) and Landlord shall be responsible for any and all taxes, fees or charges of any nature whatsoever in connection with such extension of the Term, including, without limitation, any and all transfer or gains taxes, regardless of whether such taxes, charges or fees would customarily be the responsibility of the lessor or the lessee, (v) Landlord hereby irrevocably constitutes and appoints Tenant as Landlord's attorney-in-fact, coupled with an interest, to take any and all steps on behalf of Landlord, all at Landlord's sole cost and expense, that may be necessary to consummate the sale of the Property to Tenant or Tenant's designee pursuant to the terms of the Purchase Agreement including, without limitation, the execution of the Deed annexed to the Purchase Agreement as Exhibit G and (vi) Tenant shall have the right to obtain a mandatory injunction from a -169- court of competent jurisdiction directing Landlord to take any and all steps that may be necessary to consummate the sale of the Property to Tenant or Tenant's designee pursuant to the provisions of the Purchase Agreement. (c) Extension of Term. In the event that Tenant exercises its option to purchase the Property pursuant to the provisions of this Article 21 and the Closing (as that term is defined in the Purchase Agreement) does not take place prior to the originally scheduled date for the expiration of the Term for any reason other than the breach by Landlord of its obligations pursuant to Sections 21.01(d) or 21.02(b) hereof (in which event the provisions of Sections 21.01(d) or 21.02(b), respectively, shall govern), the Term shall automatically be extended to the date that is the earlier to occur of (i) the date on which the Closing occurs and (ii) the date on which the Purchase Agreement is terminated due to the default of the Purchaser thereunder; provided, however, that if the Term shall be so extended pursuant to the provisions of this Section 21.02(c) and Landlord shall thereafter breach its obligations pursuant to Sections 21.01(d) or 21.02(b) hereof, then all of the provisions of Sections 21.01(d) or 21.02(b), respectively, shall immediately go into effect including, without limitation, the provisions thereof providing for the abatement of Rental. -170- Section 21.03. Condemnation. In the event that Tenant or Tenant's designee elects to terminate the Purchase Agreement pursuant to Section 12.2 thereof, then (i) this Lease shall remain in full force and effect upon all of its terms and conditions until the expiration of the Term and (ii) notwithstanding such election to terminate the Purchase Agreement, Tenant's option to purchase the Property shall be reinstated and remain in full force and effect for the duration of the Term upon all of the terms and conditions of this Article 21. Section 21.04. Right to Terminate. In the event that the Term shall be extended pursuant to the provisions of Sections 21.02(b) hereof, Tenant shall have the right, to be exercised in Tenant's sole discretion by written notice to Landlord, to terminate the Term of this Lease (as so extended) as of a date to be set forth in such written notice, in which event (i) all of Tenant's obligations under this Lease shall terminate as of the termination date set forth in such notice and (ii) except with respect to Tenant's right to extend the Term with an abatement of Rental pursuant to the provisions of Section 21.02(b), Landlord's liability to Tenant for its breach of the provisions of Section 21.02(b) shall not be diminished in any manner whatsoever. -171- ARTICLE 22 LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS Section 22.01. Landlord's Right to Perform. If an Event of Default shall occur, and the failure to cure such Event of Default would subject Landlord to a monetary loss or civil or criminal suit, Landlord may, but shall be under no obligation to, perform the obligation the breach of which gave rise to such Event of Default, without waiving or releasing Tenant from any of its obligations contained in this Lease, provided that Landlord shall exercise such right only after five (5) days' prior written notice to Tenant, provided that no such notice shall be required in the event of an emergency. Section 22.02. Reimbursement of Amounts Paid. All sums paid by Landlord, and all costs and expenses incurred by Landlord in connection with the performance of any act pursuant to Section 22. 01, together with interest thereon at the Late Charge Rate from the respective dates of Landlord's making of each such payment or incurring of each such sum, cost, expense, charge, payment or deposit, to the respective dates on which actual payment thereof is received by Landlord, in New York Clearing House Association Funds or by wire transfer, shall constitute Rental hereunder and shall be paid by Tenant to Landlord on demand. Section 22.03. Waiver, Release and Assumption of Obligations. Any payment or performance by Landlord pursuant -172- to the foregoing provisions of this Article 22 shall not be nor be deemed to be (a) a waiver or release of the Default or Event of Default of Tenant with respect thereto or (b) Landlord's assumption of Tenant's obligations to pay or perform any of Tenant's past, present or future obligations hereunder. -173- ARTICLE 23 USE OF THE PREMISES Section 23.01. Permitted Uses. (a) Subject to the provisions of Article 28 hereof regarding Abandonment of the Premises and the consequences thereof, Tenant shall have the right to use the Premises for any lawful purpose permitted by the Urban Renewal Plan. Section 23.02. Prohibited Uses. Tenant shall not use or occupy the Premises, or permit or suffer the Premises or any part thereof to be used or occupied in violation of the certificate(s) of occupancy for the Improvements or the Urban Renewal Plan. Promptly after its discovery of any such use or occupation in violation of the certificate(s) of occupancy for the Improvements or the Urban Renewal Plan, Tenant shall take all reasonably necessary steps to discontinue such use or purpose. -174- ARTICLE 24 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES, ETC. Section 24.01. Definition. Subject to the provisions of Article 11 hereof, each of the following events shall be an "Event of Default" hereunder: (a) if Tenant shall fail to make any payment (or any part thereof) of Rental as due hereunder and such failure shall continue for a period of twenty (20) days after Tenant's receipt of notice thereof from Landlord; (b) if Tenant shall fail to Commence Construction of the Initial Improvements on or before the Outside Commencement Date; (c) if Tenant shall fail to Substantially Complete the Construction of the Initial Improvements on or before the Scheduled Completion Date and if such failure shall continue for a period of thirty (30) days after notice (unless such failure requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed within such thirty (30) day period, in which case no Event of Default shall exist as long as Tenant shall have (a) commenced curing the same within the thirty (30) day period and (b) shall diligently and continuously prosecute the same to completion within a reasonable period); -175- (d) if Tenant shall enter into (or permit to be entered into) a Transfer or any other transaction without compliance with any provisions of Article 10 of this Lease and such Transfer or other transaction shall not be made to comply with the provisions of this Lease or canceled within thirty (30) days after Landlord's notice thereof to Tenant (unless making such Transfer comply with the provisions of this Lease or cancelling such Transfer requires acts to be done or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed within such thirty (30) day period, in which case no Event of Default shall exist as long as Tenant shall (a) commence curing the same within the thirty (30) day period and (b) diligently and continuously prosecute the same to completion within a reasonable period); or (e) if Tenant shall fail to observe or perform one or more of the other material terms, conditions, covenants or agreements of this Lease and such failure shall continue for a period of sixty (60) days (subject to Unavoidable Delays) after Landlord's notice thereof to Tenant specifying in reasonable detail such failure (unless such failure requires work to be performed, acts to be done, or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed within such sixty (60) day period, in which case if Tenant shall commence curing the same within the sixty -176- (60) day period, no Event of Default shall be deemed to exist as long as Tenant shall be diligently and continuously prosecuting the same to completion). Section 24.02. Enforcement of Performance. Subject to the provisions of Section 43.06(b), if an Event of Default occurs, Landlord, at any time thereafter during the continuance of the Default that gave rise to such Event of Default and the expiration of at least ten (10) days after the giving of notice to Tenant that Landlord intends to pursue its remedies under this Section 24.02, may elect to proceed by appropriate judicial proceedings, either at law or in equity, to enforce performance or observance by Tenant of the applicable provisions of this Lease and/or to recover damages for breach thereof. Section 24.03. Expiration and Termination of Lease. (a)(i) If an Event of Default occurs pursuant to Section 24.01(b) only and Landlord, at any time thereafter during the continuance of Tenant's failure to Commence Construction of the Initial Improvements, gives Tenant notice stating that this Lease and the Term shall terminate on the date specified in such notice, which date shall not be less than twenty (20) Business days after the receipt of the notice, then this Lease and the Term and all rights of Tenant under this Lease shall expire and terminate as if the date -177- specified in the notice were the Expiration Date, and Tenant shall quit and surrender the Premises forthwith. If such termination is stayed by order of any court having jurisdiction in any case, action or proceeding, then following the expiration of any such stay, or if the trustee appointed in any such case, Tenant or Tenant as debtor-in-possession fails to assume Tenant's obligations under this Lease within the period prescribed therefor by law or within thirty (30) days after entry of the order for relief or as may be allowed by the court, or if the trustee, Tenant or Tenant as debtor-in-possession fails to provide adequate protection of Landlord's right, title and interest in and to the Premises and adequate assurance of the complete and continuous future performance of Tenant's obligations under this Lease as provided in Section 24.10, Landlord, to the extent permitted by law or by leave of the court having jurisdiction over such case, shall have the right, at its election, to terminate this Lease on sixty (60) days notice to Tenant, Tenant as debtor-in-possession or the trustee. Upon the expiration of the sixty (60) day period this Lease shall cease and Tenant, Tenant as debtor-in-possession and/or the trustee immediately shall quit and surrender the Premises. -178- (ii) If an Event of Default occurs other than pursuant to Section 24.01(b) hereof, at any time thereafter during the continuance of the Default which gave rise to such Event of Default and the expiration of at least ten (10) days after the giving of notice to Tenant that Landlord intends to pursue its remedies under this Section 24.03(a)(ii), Landlord, in addition to its rights under Section 24.02 hereof, may elect to proceed by appropriate judicial proceedings to terminate this Lease and dispossess Tenant, it being the intent of the parties hereto that no Event of Default other than an Event of Default pursuant to Section 24.01(b) hereof shall be treated or construed as a conditional limitation. Nothing contained herein shall be deemed to constitute a waiver by Tenant of any and all rights of redemption that may be available to it at law or in equity. (b) If this Lease is terminated as provided in Section 24.03(a)(i), Landlord may dispossess Tenant by summary proceedings or otherwise. (c) If this Lease shall be terminated as provided in Section 24.03(a), Tenant shall pay to Landlord all Rental payable under this Lease by Tenant to Landlord up to the date on which this Lease is so terminated and Tenant shall have no liability whatsoever for any Rental (and no Rental shall -179- accrue and become due) from and after such early date of termination. Section 24.04. Arbitration of Certain Defaults. In the event that Tenant disagrees with Landlord's determination that a Default or Event of Default of the nature described in Section 24.01(b) or (c) has occurred and is continuing, Tenant, at Tenant's sole election, shall have the right to submit to binding arbitration the issue of whether such a Default or Event of Default has occurred and is continuing. Tenant may exercise its option to arbitrate the issue of whether such a Default or Event of Default has occurred and is continuing by notice given to Landlord prior to the institution of legal proceedings by Landlord pursuant to Sections 24.02, 24.03 or 24.08 hereof. In the event that Tenant exercises its option to arbitrate as set forth in this Section 24.04, the running of the ten (10) day notice period set forth in Sections 24.02, 24.03 and 24.08 hereof or the twenty (20) Business Day period set forth in Section 24.03(a)(i) hereof, as the case may be, shall be tolled pending the outcome of such arbitration and Landlord shall not institute judicial proceedings pursuant to Sections 24.02, 24.03 or 24.08 hereof unless and until it is determined by arbitration that a Default or Event of Default has occurred and is continuing. Nothing contained herein shall be construed to adversely affect Tenant's right to cure any Default or Event of Default prior to the termination of this -180- Lease by a court of competent jurisdiction or to constitute a waiver of any right of redemption that Tenant may have at law or in equity. Section 24.05. Receipt of Moneys after Notice or Termination. No receipt of moneys by Landlord from Tenant after the termination of this Lease shall reinstate, continue or extend the Term, or operate as a waiver of the right of Landlord to enforce the payment of Rental payable by Tenant hereunder, or operate as a waiver of the right of Landlord to recover possession of the Premises by proper remedy. After a final order or judgment for the possession of the Premises, Landlord may demand, receive and collect any moneys due hereunder without in any manner affecting the notice, proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of the use and occupation of the Premises or, at the election of Landlord, on account of Tenant's liability hereunder. Section 24.06. Exercise of Purchase Option. Notwithstanding anything to the contrary contained in this Lease, Landlord shall not institute any proceedings to terminate this Lease and any such proceedings theretofore instituted shall be stayed, in the event that Tenant delivers the Purchase Notice and purchases the Premises, each in accordance with the provisions of Article 21 hereof. -181- Section 24.07. Strict Performance. No failure by one party hereto to insist upon the other party's strict performance of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy available to such party pursuant to the terms hereof, and no payment or acceptance of full or partial Rental during the continuance of any Default or Event of Default, shall constitute a waiver of any such Default or Event of Default or of the right to strict performance of such covenant, agreement, term or condition. No covenant, agreement, term or condition of this Lease to be performed or complied with by either party, and no Default or Event of Default shall be waived, altered or modified except by a written instrument executed by the other party. No waiver of any Default or Event of Default shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default. Section 24.08. Right to Enjoin Defaults. Subject to the provisions of Sections 24.04 and 43.06 hereof, in the event of Tenant's Default or the failure of Landlord to comply with its obligations under this Lease, Landlord or Tenant, as the case may be, shall be entitled, at any time thereafter during the continuance of such Tenant's Default or Landlord's failure and the expiration of at least ten (10) days after the giving of notice that Landlord or Tenant, as the case may be, intends -182- to pursue its remedies under this Section 24.08, to enjoin such Tenant's Default or Landlord's failure and shall have the right to invoke any rights and remedies allowed at law or in equity or by statute or otherwise, other remedies that may be available to Landlord or Tenant notwithstanding. Section 24.09. Survival of Article. The provisions of this Article 24 shall survive Expiration of the Term. -183- ARTICLE 25 NOTICES Section 25.01. All Notices, Communications, etc. in Writing. Whenever it is provided herein that notice, demand, request, consent, approval or other communication shall or may be given to, or served upon, either of the parties by the other, or whenever either of the parties desires to give or serve upon the other any notice, demand, request, consent, approval or other communication with respect hereto or to the Premises, each such notice, demand, request, consent, approval or other communication shall be in writing and shall be effective for any purpose only if given or served by personal delivery or by a national overnight courier service (e.g. Federal Express), with acknowledgement of receipt, or by certified or registered mail, postage prepaid, return receipt requested, addressed as follows: (a) If to Tenant, addressed to The New York Times Company, 229 West 43rd St., New York, NY 10036 Attention: Mr. David Thurm, Executive Director of Project Development and Administration, with a copy thereof to be sent in the same manner to (i) The New York Times Company, 229 West 43rd Street, New York, New York 10036 Attention: General Counsel and (ii) Bachner, Tally, Polevoy & Misher, 380 Madison Avenue, New York, New York 10017 Attention: Martin D. Polevoy, Esq. or to such other address(es) and attorneys as Tenant may -184- from time to time designate by notice given to Landlord as set forth herein. (b) If to Landlord, addressed to The City of New York, c/o New York City Economic Development Corporation, 110 William Street, New York, New York 10038, Attention: Lease Administration with a copy thereof to (i) EDC's General Counsel at the same address and (ii) The New York City Law Department, 100 Church Street, New York, New York 10007, Attention: Chief, Economic Development Division, or to such other address(es) and attorneys as Landlord may from time to time designate by notice given to Tenant as set forth herein. Section 25.02. Service. Every notice, demand, request, consent, approval or other communication hereunder shall be deemed to have been given or served (a) on the fourth (4th) business day after the same shall have been actually deposited in the United States mails, postage prepaid, as aforesaid, or, (b) in the case of personal delivery, or overnight courier service on the date delivered. -185- ARTICLE 26 NO SUBORDINATION Subject to the provisions of Article 11 and Section 13.05(b) hereof, and except with respect to liens or encumbrances consented to or created by or on behalf of Landlord, Landlord's interest in the Premises and in this Lease, as the same may be modified, amended or renewed, shall not be subject or subordinate to (a) any Mortgage now or hereafter existing, (b) any other liens or encumbrances hereafter affecting Tenant's interest in this Lease and the leasehold estate created hereby or (c) any Sublease or any mortgages, liens or encumbrances now or hereafter placed on any Subtenant's interest in the Premises. This Lease and the leasehold estate of Tenant created hereby and all rights of Tenant hereunder are and shall be subject to the Title Matters. -186- ARTICLE 27 SANITARY SEWER Section 27.01. Requirement of Sanitary Sewer. Landlord acknowledges that the leasehold estate granted hereby and the Improvements to be constructed on the Land shall be of no value to Tenant unless and until there is constructed and put into proper working order a sanitary sewer system designed on behalf of Lease Administrator to run along the westerly side of the Whitestone Expressway Service Road adjacent to the Premises with a design and capacity sufficient to service a Printing Facility of not less than 720,000 square feet of Gross Building Area, together with such other buildings and improvements that may be necessary in connection therewith (the "Sanitary Sewer"). It is presently contemplated that the Sanitary Sewer shall be constructed substantially in accordance with those certain drawings titled "Installation of Sanitary Sewers and Sundry Appurtenant Structures in College Point," Sheets 1 through 24, prepared by King & Gavaris and dated April 18, 1990 (the "Sewer Drawings" and, together with the specifications developed or to be developed in connection with such Sewer Drawings, as such Sewer Drawings and specifications may be modified in accordance with the immediately succeeding sentence, the "Sewer Plans"). Landlord may modify the design, size, materials or capacity of the Sanitary Sewer only to the extent necessary to comply with Requirements or respond to -187- technological changes; provided, however, that no such modification shall render the Sanitary Sewer insufficient to service a Printing Facility of not less than 720,000 square feet of Gross Building Area, together with such other buildings and improvements that may be necessary in connection therewith. Section 27.02. Obligation to Construct Sanitary Sewer. Landlord shall perform or cause to be performed the work necessary to construct and put into proper working order the Sanitary Sewer in accordance with the Sewer Plans (the "Sanitary Sewer Work"), except to the extent that the Sanitary Sewer Work is performed by Tenant pursuant to the provisions of Funding Agreement #2. The party performing the Sanitary Sewer Work shall be responsible for performing all work shown on or evidently required by the Sewer Plans including, without limitation, any and all excavation and/or piling work shown on or evidently required by the Sewer Plans. If Tenant performs the Sanitary Sewer Work pursuant to the provisions of Funding Agreement #2, the term "Work," as such term is defined in Funding Agreement #2, shall be deemed to include all work shown on or evidently required by the Sewer Plans. Landlord shall complete the Sanitary Sewer Work by the date (the "Scheduled Sanitary Sewer Completion Date") that is twenty-four (24) months after the earlier to occur of (i) the date on which Tenant gives Landlord written notice that it will not exercise its option to construct the Sanitary Sewer pursuant to the -188- provisions of Funding Agreement #2, (ii) the date on which Tenant gives written notice to Landlord revoking Tenant's election to construct the Sanitary Sewer pursuant to the provisions of Funding Agreement #2, (iii) the date that is ninety-one (91) days after the date on which Tenant Commences Construction of the Project, unless Tenant had duly exercised its option to construct the Sanitary Sewer prior thereto, or (iv) the date on which Funding Agreement #2 is terminated pursuant to any provision thereof or by order of a court of competent jurisdiction, if the Sanitary Sewer Work had not been completed prior to such termination (the earlier of (i), (ii), (iii) or (iv) being hereinafter referred to as "Landlord's Sewer Commencement Date"); provided, however, that (x) in no event shall the Scheduled Sanitary Sewer Completion Date be prior to December 1, 1995 and (y) notwithstanding anything to the contrary contained herein, in the event that Funding Agreement #2 is terminated as the result of EDC's default thereunder, Landlord shall complete the Sanitary Sewer Work not later than the date by which Tenant shall be ready to make its connection to the Sanitary Sewer and otherwise cause Substantial Completion to occur (the "Tenant Readiness Date"). In the event that Tenant gives written notice to Landlord revoking Tenant's election to construct the Sanitary Sewer pursuant to the provisions of Funding Agreement #2 for reasons unrelated to any act or failure to act by Landlord or EDC under -189- Funding Agreement #2, the twenty-four (24) month period specified in the second sentence of this Section 27.02 shall be increased by the number of days in the period commencing on (x) the date on which Tenant gives written notice to Landlord of its election to construct the Sanitary Sewer pursuant to the provisions of Funding Agreement #2, and expiring on (y) the date on which Tenant gives written notice to Landlord revoking such election. Tenant shall give Landlord not less than thirty (30) nor more than ninety (90) days' advance written notice of the date by which Tenant expects the Tenant Readiness Date to occur. Promptly following the Tenant Readiness Date, Tenant shall submit to Landlord a certificate of the Architect or Engineer of Record certifying to the effect that substantial completion has occurred with the exception of Tenant's hookup to the Sanitary Sewer and that Tenant would be ready to make such hookup if the Sanitary Sewer were completed. Section 27.03. Damages for Landlord's Failure to Construct Sanitary Sewer. If Landlord shall not have completed the Sanitary Sewer Work and/or Tenant, using reasonable diligence, shall not have made its connection to the Sanitary Sewer by the date (the "Sanitary Sewer Default Date") that is the later to occur of (i) the Scheduled Sanitary Sewer Completion Date and (ii) the Tenant Readiness Date, then, for the period (the "Sanitary Sewer Offset Period") commencing on the Sanitary Sewer Default Date and ending on the date by which -190- both (x) Landlord shall have completed the Sanitary Sewer Work and (y) Tenant, using reasonable diligence, shall have made (or, using reasonable diligence, should have made) its connection to the Sanitary Sewer, Tenant shall be entitled to accrue, as liquidated damages, as an offset against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) becoming due and payable after the Sanitary Sewer Default Date an amount (the "Sewer Offset Amount") equal to the product of (A) $1,000.00, multiplied by (B) the number of days in the Sanitary Sewer Offset Period. Section 27.04. Damages for Delaying Tenant's Construction of the Sanitary Sewer. If Tenant elects to perform the Sanitary Sewer Work pursuant to the provisions of Funding Agreement #2 or this Lease, and Tenant is delayed in completing the Sanitary Sewer Work and making its connection thereto beyond the Tenant Readiness Date, then Tenant shall be entitled to accrue, as liquidated damages, as an offset against future installments of Rental (excluding Impositions and College Point Improvement Fund Payments) becoming due and payable after the Tenant Readiness Date an amount (the "Sewer Delay Offset Amount") equal to the product of (A) $1,000, multiplied by (B) the number of days of Public Sewer Delay, not to exceed the number of days in the Sewer Delay Period. The term "Public Sewer Delay" shall mean any delay in the completion of the Sanitary Sewer Work and Tenant's connection -191- thereto arising from the acts or omissions of EDC, or Landlord or any of their employees, agents, contractors, departments, divisions or agencies including, without limitation: (i) defects in the Plans and Specifications for the Sanitary Sewer Work, (ii) the failure to make necessary revisions to such Plans and Specifications on a timely basis, (iii) EDC's inspection or requiring the uncovering of the Sanitary Sewer Work (unless EDC was correct in suspecting that such uncovering would reveal defective work) or any delays in performing such inspection, or (iv) EDC's failure to accept a low bid for all or any portion of the Sanitary Sewer Work because such low bid nonetheless exceeds the Engineer's Estimate. The term "Sewer Delay Period" shall mean the period commencing on (x) the Tenant Readiness Date, and expiring on (y) the date on which Tenant, using reasonable diligence, shall have (or, using reasonable diligence, should have) made its connection to the Sanitary Sewer. Section 27.05. Sewer Self-Help Remedy. In the event that either (i) Landlord fails to commence the Sanitary Sewer Work within one hundred eighty (180) days after Landlord's Sewer Commencement Date, subject to Landlord's right to an extension on a day-for-day basis for each day of Unavoidable Delays or (ii) Landlord shall cease the performance of the Sanitary Sewer Work for any period in excess of ninety (90) successive calendar days, subject to Landlord's right to an -192- extension on a day-for-day basis for each day of Unavoidable Delays, then, without regard to whether Tenant may have previously elected to perform the Sanitary Sewer Work pursuant to the provisions of Funding Agreement #2 or this Lease, or whether Funding Agreement #2 may have previously been terminated due to Tenant's default thereunder, Tenant shall have the right to elect to perform the Sanitary Sewer Work upon all of the terms and conditions of Funding Agreement #2. -193- ARTICLE 28 ABANDONMENT OF THE PROJECT Section 28.01. Effect of Abandonment of the Project. Landlord and Tenant acknowledge and agree that an Abandonment of the Project shall not constitute a Default or Event of Default. Section 28.02. Loss of Certain Benefits. From and after the date of Abandonment of the Project: (i) PILOT shall be equal to Taxes (computed in accordance with the provisions of Section 3.05(d)(i) hereof), (ii) Tenant shall be required to make Public Purpose Payments in accordance with the provisions of Section 36.02 hereof and (iii) the provisions of Section 3.08.1 hereof shall be of no further force and effect, except that (x) Section 3.08.1 shall continue in effect with respect to Exempt Taxes attributable to transactions occurring, or periods ending, prior to the date on which Abandonment of the Project shall be deemed to have occurred, including, without limitation, exercise by Tenant of its Purchase Option provided in Article 21 hereof prior to such date (regardless of whether the transfer of title to the Property takes place after such date); and (y) Sections 3.08.2 through 3.08.4 shall continue in effect with respect to any Exempt Taxes as to which Section 3.08.1 so continues in effect; and provided, however, that if and to the extent that any Taxes are required to be paid with respect to the Premises notwithstanding Landlord's ownership thereof, PILOT shall be reduced by a like amount. -194- Section 28.03. Reimbursement of Funding. (a) In the event that there shall be an Abandonment of the Project at any time prior to the Operational Date, Tenant shall reimburse EDC dollar for dollar for the Funding or any portion thereof disbursed by EDC pursuant to Funding Agreement #1 prior to the date of such Abandonment of the Project (the "EDC Reimbursement Amount") substantially in accordance with the illustration for such reimbursement set forth in "Reimbursement Schedule" attached hereto as Exhibit M-1 and made a part hereof, including interest thereon at the rate of the lesser of either (x) nine percent (9%) per annum or (y) the City's cost of borrowing, from the date on which EDC disbursed such funds to Tenant until Tenant fully reimburses EDC for such funds. (b) In the event that there shall be an Abandonment of the Project at any time after the Operational Date, Tenant shall reimburse EDC for an amortized amount (the "Amortized EDC Reimbursement Amount") of the Funding or any portion thereof disbursed by EDC pursuant to Funding Agreement #1 prior to the date of such Abandonment of the Project, amortized in accordance with the "Amortized Reimbursement Schedule" attached hereto as Exhibit M-2 and hereby made a part hereof, such amortized amount to include interest thereon at the rate of the lesser of either (x) nine percent (9%) per annum or (y) the City's cost of borrowing, -195- from the date on which EDC disbursed such funds to Tenant until Tenant fully reimburses EDC for the appropriate amortized amount of such funds. (c) Unless Tenant exercises the purchase option contained in Article 21 hereof, in which event the provisions of Article 21 and the Purchase Agreement shall govern, Tenant shall reimburse EDC for the amounts described in subsection (a) and (b) of this Section 28.03 in equal quarterly installments commencing on the first day of the calendar quarter occurring immediately after the date on which Abandonment of the Project is deemed to have occurred and continuing thereafter for a period of five (5) years. Tenant shall have the right, at any time during such five (5) year period, to prepay all or any portion of the Funding to be reimbursed (together with any interest accrued thereon pursuant to the terms hereof) without penalty or premium. Section 28.04. Right to Terminate. In the event that (i) there shall be an Abandonment of the Project, (ii) Tenant shall make all reimbursements to EDC required pursuant to Section 28.03 hereof and (iii) Tenant does not exercise the purchase option contained in Article 21 hereof, then, at any time thereafter, Tenant shall have the right, to be exercised in Tenant's sole discretion by written notice to Landlord, to terminate the Term of this Lease effective as of a date to be set forth in such notice, in which event all of Tenant's -196- obligations under this Lease shall terminate and come to an end effective as of the date of termination set forth in such notice. -197- ARTICLE 29 CERTIFICATES BY LANDLORD AND TENANT Section 29.01. Certificate of Tenant. Tenant shall, within fifteen (15) business days after notice by Landlord, execute, acknowledge and deliver to Landlord, or any other Person specified by Landlord, a written statement (which may be relied upon by such Person) (a) certifying (i) that this Lease is unmodified and in full force and effect (or if there are modifications, that this Lease, as modified, is in full force and effect and stating such modifications and providing a copy thereof if requested), and (ii) the date to which each item of Rental payable by Tenant hereunder has been paid, and (b) stating (i) whether Tenant has given Landlord written notice of any event that, with the giving of notice or the passage of time, or both, would constitute a default by Landlord in the performance of any covenant, agreement, obligation or condition contained in this Lease, and (ii) whether, to the actual knowledge of Tenant, Landlord is in default in performance of any covenant, agreement, obligation or condition contained in this Lease, and, if so, specifying in detail each such default, Section 29.02. Certificate of Landlord. Landlord shall, within fifteen (15) business days after notice by Tenant, execute, acknowledge and deliver to Tenant, or such other Person specified by Tenant, a statement (which may be relied upon by such Person) (a) certifying (i) that this Lease -198- is unmodified and in full force and effect (or if there are modifications, that this Lease, as modified, is in full force and effect and stating such modifications and providing a copy thereof if requested), and (ii) the date to which each item of Rental payable by Tenant hereunder has been paid, and (b) stating (i) whether an Event of Default has occurred or whether Landlord has given Tenant written notice of any event that, with the giving of notice or the passage of time, or both, would constitute an Event of Default, and (ii) whether, to the actual knowledge of Landlord, Tenant is in Default in the performance of any covenant, agreement, obligation or condition contained in this Lease, and, if so, specifying, in detail, each such Default or Event of Default. -199- ARTICLE 30 CONSENTS AND APPROVALS Section 30.01. Effect of Granting or Failure to Grant Approvals or Consents. All consents and approvals which may be given under this Lease shall, as a condition of their effectiveness, be in writing. The granting of any consent or approval by a party to perform any act requiring consent or approval under the terms of this Lease, or the failure on the part of a party to object to any such action taken without the required consent or approval, shall not, except where expressly stated otherwise, be deemed a waiver by the party whose consent was required of its right to require such consent or approval for any further similar act. Section 30.02. Remedy for Refusal to Grant Consent or Approval. If, pursuant to the terms of this Lease, any consent or approval by Landlord or Tenant is not to be unreasonably withheld or delayed or is subject to a specified standard (and provided that such provision does not provide for deemed approval if no response is given to Tenant within a specified period of time) then in the event there shall be a final determination that the consent or approval was unreasonably withheld or delayed or that such specified standard has been met so that the consent or approval should have been granted, the consent or approval shall be deemed granted and, unless specified to the contrary elsewhere in this Lease, Landlord -200- shall have no additional liability to Tenant for withholding or delaying such consent or approval. Section 30.03. No Unreasonable Delay. Wherever this Lease provides that Landlord's or Tenant's consent or approval is not to be unreasonably withheld, such consent or approval also shall not be unreasonably delayed. Unless specifically stated otherwise, all consents of Landlord required under this Lease shall be granted or withheld in Landlord's reasonable discretion. Section 30.04. No Fees Etc. Except as specifically provided herein, no fees or charges of any kind or amount shall be required by either party hereto as a condition of the grant of any consent or approval which may be required under this Lease. The preceding however shall not limit the City's right to charge, in its governmental capacity (as opposed to its capacity as Landlord and owner of the fee interest in the Premises), generally applicable fees and charges in connection with requests for building permits, certificates of occupancy or other permits, licenses, etc. -201- ARTICLE 31 SURRENDER AT END OF TERM Section 31.01. Surrender of Premises. Subject to Section 8.03 hereof, upon the Expiration Date (or upon a re-entry by Landlord upon the Premises pursuant to Article 24), Tenant, without any payment or allowance whatsoever by Landlord, shall surrender the Premises to Landlord in good order, condition and repair, reasonable wear and tear excepted, free and clear of all Subleases, liens and encumbrances other than Subleases to which Landlord has given recognition pursuant to the provisions of Section 10.06 or otherwise, easements and other rights which Landlord has agreed may survive the termination of this Lease and rights of Recognized Mortgagees under Section 11.04. Subject to the provisions of Section 21.01(c) hereof, Tenant hereby waives any notice now or hereafter required by law with respect to vacating the Premises on the Expiration Date. Section 31.02. Delivery of Subleases, etc. Upon the Expiration Date (or upon a re-entry by Landlord upon the Premises pursuant to Article 24), Tenant shall deliver to Landlord Tenant's executed counterparts of all Subleases and any service and maintenance contracts then affecting the Premises, and all warranties and guarantees then in effect which Tenant has received in connection with any work or services performed or Equipment installed at the Premises, -202- together with a duly executed assignment thereof to Landlord in form reasonably satisfactory to Tenant and Landlord, and copies of all financial reports, books and records required by Article 37 and any and all other material documents relating to the operation of the Premises and the condition of the Improvements (or copies thereof, to the extent Tenant is required by law or generally accepted accounting principles, to retain the originals). Section 31.03. Personal Property. Any personal property of Tenant, or of any Subtenant which has not been granted non-disturbance rights, which shall remain on the Premises for six (6) months after the Expiration Date (or after a reentry by Landlord upon the Premises pursuant to Article 24) and after the removal of Tenant or such Subtenant from the Premises, may, at the option of Landlord, be deemed to have been abandoned by Tenant or such Subtenant, and subject to the rights of Recognized Mortgages either may be retained by Landlord as its property or be disposed of at Tenant's expense, without accountability, in such manner as Landlord may see fit. Landlord shall not be responsible for any loss or damage occurring to any such property owned by Tenant or any Subtenant. Notwithstanding anything to the contrary contained herein, the right of Tenant or any Subtenant which has not been granted non-disturbance rights to leave personal property at the Premises for six (6) months after the Expiration Date -203- before such property shall be deemed abandoned, shall not be construed to permit Tenant or any such Subtenant to leave personal property at the Premises for more than three hundred sixty-five (365) days after the giving by Tenant of a notice to Landlord terminating this Lease pursuant to the provisions of Section 8.02(a); Section 31.04. Survival Clause. The provisions of this Article shall survive the Expiration Date. -204- ARTICLE 32 ENTIRE AGREEMENT This Lease, the Power Agreement and Funding Agreements #1, #2 and #3, including all the Exhibits, contain all of the promises, agreements, conditions, inducements and understandings between Landlord and Tenant concerning the Premises and there are no promises, agreements, conditions, understandings, inducements, warranties or representations, oral or written, expressed or implied, between them covering the Premises other than as expressly set forth herein or as may be expressly contained in any enforceable written agreements or instruments executed by the parties hereto. -205- ARTICLE 33 QUIET ENJOYMENT Landlord covenants that, as long as Tenant faithfully shall perform the agreements, terms, covenants and conditions hereof, Tenant shall (subject to the terms and conditions of this Lease) peaceably and quietly have, hold and enjoy the Premises for the Term without molestation or disturbance by or from Landlord or any Person claiming through Landlord. -206- ARTICLE 34 ARBITRATION Section 34.01. Disputes to be Submitted to Arbitration. Every dispute between the parties which is specifically provided in this Lease to be determined by arbitration shall be submitted to arbitration in the manner hereinafter provided. Section 34.02. Procedure for Arbitration. (a) Dispute Notice. The party desiring the arbitration shall, by notice to the other party (the "Dispute Notice"), require that the dispute in question be presented for resolution to the first available arbiter set forth on the applicable list below in Section 34.06. The party giving the Dispute Notice shall give a copy of such Dispute Notice to the first arbiter on such applicable list (unless such first arbiter is known to be unavailable) with a cover letter requesting such arbiter to serve. In the event the first named arbiter is not available or is unwilling to serve, the arbiter next set forth on the list shall be engaged, and so on, until arriving at an available arbiter. The arbiter serving to resolve any dispute hereunder is hereinafter referred to as the "Arbiter". (b) Rejection Notice. Either party may, within five (5) Business Days of its receipt of the other party's Dispute Notice (the "Notice Period") give notice to such other -207- party and to the Arbiter (the "Rejection Notice") stating that the dispute is not subject pursuant to the terms of this Lease to the dispute resolution mechanism of this Article 34. The validity of the Rejection Notice shall also be subject to arbitration as set forth herein by the first available Arbiter from the applicable list designated by the Dispute Notice, in which event the parties shall make such submissions as they may wish to the Arbiter regarding such validity within five (5) Business Days after the giving of the Rejection Notice. (c) Arbiter's Decision. If either: (i) the recipient of the Dispute Notice fails to give a Rejection Notice to the other party within the Notice Period, or (ii) the Arbiter determines that the dispute is arbitrable pursuant to the terms of this Lease, then such dispute shall be deemed arbitrable and both parties shall make such submissions as they may wish to the Arbiter within five (5) Business Days after the expiration of the Notice Period or, if a Rejection Notice is given, the determination that the dispute is arbitrable, as the case may be. Within five (5) Business Days thereafter, the Arbiter shall attempt to cause Landlord and Tenant to agree on a resolution to the dispute and, failing that, shall make a decision in writing by 5:00 P.M. on the last day of such five (5) Business-Day period. Copies of the Arbiter's decision shall be sent to Landlord and Tenant. Section 34.03. Selection of Arbiter. -208- (a) Disqualifications. During the month of January of each calendar year during the Term, Tenant and Landlord may each, by written notice to the other, disqualify one of the listed arbiters for any reason whatsoever. Landlord and Tenant may also by written notice to each other at any time (including the five (5) Business Day period following the giving of a Dispute Notice), require any arbiter to be disqualified for cause (including, without limitation, conflict of interest), the presence of such cause (if disputed) to be determined by another arbiter under the provisions of this Article 34. The remaining arbiters shall move up on the list to fill any vacancies so created. (b) Replacements. If any of the listed arbiters dies, becomes disabled, retires, goes out of business, is disqualified by Landlord or Tenant for cause or otherwise, or elects to withdraw from the list, then Landlord and Tenant shall agree on a replacement within twenty (20) days after notice thereof. If Landlord and Tenant fail to so agree, each, within five (5) days after such twenty (20) day period, shall designate one of the remaining listed arbiters and the two arbiters so chosen shall appoint a replacement within twenty (20) days thereafter. All newly chosen arbiters shall be placed at the last position on the list. If more than one arbiter is chosen at the same time, the arbiters who are so chosen shall be listed in alphabetical order. In the event -209- that, at any time, there is no listed arbiter available, Landlord and Tenant shall endeavor to agree upon a reputable and experienced arbiter to resolve the dispute in question. In the event that Landlord and Tenant are unable to agree on such arbiter, such arbiter shall be chosen in accordance with the rules of the American Arbitration Association then prevailing. The Arbiter, however chosen, shall proceed to resolve any dispute in accordance with the provisions set forth in this Article 34. Section 34.04. Recognized Mortgagees. Any Recognized Mortgagee may participate, through or in place of Tenant, in any arbitration conducted pursuant hereto, provided that any such participation shall not be deemed to expand Tenant's rights. Section 34.05. Arbiter's Decision. In rendering his or her decision, the Arbiter shall have no power to modify any of the provisions of this Lease, and the jurisdiction of the Arbiter is expressly limited accordingly. The decision of the Arbiter shall be final and conclusive on the parties, and judgment may be entered on the decision of the Arbiter rendered in accordance with this Article 34 and may be enforced in accordance with the laws of New York State. Section 34.06. Lists of Arbiters. (a) To determine disputes regarding the calculation of "Gross Building Area": -210- 1. Mr. David Castro-Blanco Castro-Blanco, Piscioneri Associates 62 Cooper Square New York, New York 10003 (212) 254-2700 2. Ms. Linda Eklund Emery Roth & Sons Architect 560 Lexington Avenue New York, New York 10022 (212) 753-1733 3. Mr. Robert Fox Fox & Fowle 22 West 19th Street New York, New York 10011 (212) 627-1700 4. Mr. Eugene Kohn Kohn Pederson Fox, Associates 111 West 57th Street New York, New York 11019 (212) 977-6500 (b) To determine disputes pursuant to Sections 7.03(b) and 7.04 hereof: 1. Ms. Laura Bouyet Marsh & McLennan 1166 Avenue of the Americas New York, New York 10036-2774 (212) 345-6590 2. Mr. Gordon Prager Johnson & Higgins 125 Broad Street New York, New York 10004-2424 (212) 574-8359 3. Ms. Pamela Newman Rollins Hudig Hall 261 Madison Avenue New York, New York 10005 (212) 573-5664 -211- 4. Mr. Jonathan Ostrau Alexander & Alexander 1185 Avenue of the Americas New York, New York 10036 (212) 575-8000 (c) To determine disputes as to whether (x) Landlord has acted unreasonably in withholding its consent to a Transfer that is not an Affiliate Transfer or a Merger/Sale Transfer or (y) a material default has occurred under Section 7.2(b) of Funding Agreement #1: 1. The then dean of Columbia Law School 2. The then dean of New York University Law School 3. The then dean of Fordham Law School 4. The then dean of Brooklyn Law School (d) To determine disputes under this Lease or Funding Agreement #1 as to whether Landlord has acted unreasonably in withholding its approval of Plans and Specifications or modifications or resubmissions of Plans and Specifications: 1. Mr. Richard Dattner Richard Dattner Architect P.C. 154 West 57th Street New York, New York 10019 (212) 247-2660 2. Mr. Fred Bland Beyer Blinder Belle 41 East 11th Street New York, New Yorzk 10003 (212) 777-7800 -212- 3. Mr. Henry Brennan Brennan Bear Gorman 515 Madison Avenue New York, New York 10001 (212) 888-7663 4. Mr. Brad Perkins Perkins Eastman & Partners 437 Fifth Avenue New York, New York 10016 (212) 889-1720 (e) To determine disputes as to whether a Default or Event of Default of the nature described in Section 24.01(b) or (c) hereof has occurred and is continuing: 1. Mr. Charles Uribe A.J. Contracting Corp. 470 Park Avenue South New York, New York 10016 (212) 889-9100 2. Mr. Mitch Solomon HRH Construction 909 3rd Avenue New York, New York 10022 (212) 751-3100 3. Mr. Arthur Thompsen Hennigan Construction, Inc. 250 West 30th Street New York, New York 10001 (212) 947-6441 4. Mr. Joseph Coppotelli Structure Tone, Inc. 15 East 26th Street New York, New York 10010 (212) 481-6100 (f) To determine disputes that are subject to arbitration pursuant to (x) Section 5.7(d) of Funding Agreement #2 or (y) any provision of Funding Agreement #4: -213- 1. Mr. Daniel Greenbaum Vollmer Associates 50 West 23rd Street New York, New York 10010 2. Mr. Neal J. Forshner Envirodyne Engineers, Inc. 41 East 42nd Street New York, New York 10017 3. Mr. Malcolm McLaren M.G. McLaren Consulting Engineers 100 Snake Hill Road West Nyack, New York 10994 (914) 353-6400 4. Mr. Mark Schiffman Shah Trans Inc. 101 South Bergen Place Freeport, New York 11520 (516) 868-0900 -214- ARTICLE 35 ADMINISTRATIVE AND JUDICIAL PROCEEDINGS, CONTESTS ETC. Section 35.01. Tax Contest Proceedings. (a) Tenant shall have the right, at its sole cost and expense, to seek reductions in the valuation of the Land and/or Improvements assessed for real property tax purposes and to prosecute any action or proceeding in connection therewith by appropriate proceedings in accordance with the City Charter and the City's Administrative Code, notwithstanding that the Premises may then be exempt from payment of any such real property tax or that any such tax may be abated by reason of this Lease or under applicable law. Landlord shall arrange for its Department of Finance to send "so-called" FLACK Notices setting forth changes in the assessed valuation of the Land and/or the Improvements directly to Tenant, with a copy to Tenant's General Counsel and Tenant's attorneys at the address set forth in Article 25 hereof, as such address may be changed in accordance with the provisions of said Article 25. (b) Tenant shall continue to pay the full amount of PILOT required under Section 3.05 until a final determination is made with respect to any such action or proceeding. -215- (c) If, upon the final determination of any such action or proceeding, it is determined that Tenant is entitled to such reduction, PILOT shall be reduced in accordance with such determination; and if pursuant to such determination Tenant is entitled to a reduction in the amount of any PILOT payment(s) or portion thereof already paid, the difference (the "PILOT Refund Amount") between the amount of the PILOT actually paid by Tenant and the amount of the PILOT that should have been paid in light of such reduction shall be offset against any future PILOT payments and/or other Rental payments that may be due, or, if no future PILOT payments and/or other Rental payments are due, Landlord shall promptly refund such amount to Tenant. The PILOT Refund Amount shall bear interest from the date of overpayment to the date of offset or refund, as the case may be, at the rate of interest that The City is paying to taxpayers who are entitled to real estate tax refunds. Section 35.02. Imposition Contest Proceedings. Tenant shall have the right to contest, at its sole cost and expense, the amount or validity, in whole or in part, of any Imposition by appropriate proceedings diligently conducted in good faith, or in any other manner permitted by law, including, without limitation, the right to prosecute administrative and/or judicial proceedings and judicial review and appeal of any decision which Tenant, in its sole discretion, considers adverse, and the right to settle or compromise any such -216- proceeding. In the event of any such contest, payment of such Imposition may be postponed until the matter is resolved. Any amount postponed hereunder shall bear interest at the Late Charge Rate until paid. Section 35.03. Requirement Contest. Tenant shall have the right to contest the validity of any Requirement or the application thereof in any manner permitted by law, including, without limitation, the right to prosecute administrative and/or judicial proceedings and judicial review and appeal of any decision which Tenant, in its sole discretion, considers adverse, and the right to settle or compromise any such proceeding. During such contest, compliance with any such contested Requirement may be deferred by Tenant. Any such proceeding instituted by Tenant shall be commenced reasonably promptly after the issuance of any such contested Requirement and shall be prosecuted with diligence to final adjudication, settlement, compliance or other disposition of the Requirement so contested which is acceptable to the Governmental Authority enforcing such Requirement. Tenant shall comply with any such Requirement in accordance with the provisions of Section 16.01(a) if the Premises, or any part thereof, are in danger of being forfeited or if Landlord is in danger of being subjected to criminal liability or penalty. -217- Section 35.04. Landlord's Participation in Contest Proceedings. Landlord, at Tenant's option, shall (i) join in any action or proceeding brought by Tenant referred to in this Article and/or (ii) permit the action to be brought by Tenant in Landlord's name, and/or (iii) execute such documents that Tenant may reasonably request in connection with such action or proceeding. -218- ARTICLE 36 SALES AND COMPENSATING USE TAXES Section 36.01. Exemption. Landlord warrants and represents that, by reason of Landlord's ownership of the Improvements, sales and compensating use taxes will not be payable in connection with the materials, fixtures and Equipment purchased and incorporated into the Improvements. Landlord shall assist Tenant to the extent required by the provisions of Section 3.08 hereof in establishing any such exemption. Notwithstanding the foregoing or anything to the contrary elsewhere in this Lease, Landlord hereby agrees that, for income tax purposes, Tenant shall be considered to have all of the benefits and burdens of ownership with respect to the Improvements and that Landlord will not claim any deduction or credit on its income tax returns or any other filings or financial statements with respect to the Improvements and will not otherwise take any action in connection with the Improvements which would disentitle Tenant to claim the deductions and credits that it would otherwise be entitled to claim as the owner of the Improvements for income tax purposes. Section 36.02. Public Purpose Payments. From and after Abandonment of the Project, Tenant shall pay to the appropriate taxing authority an amount equal to the amount of New York State and City sales and compensating use taxes that would, with respect to purchases completed after the date of -219- such Abandonment, thereafter be required to be paid by Tenant, or contractors working on its behalf or their subcontractors, with respect to any tangible personal property that thereafter becomes an integral component of any Improvement, if not for the exemption from such taxes based on the Landlord's ownership of the Premises, reduced by any amount representing such sales or use taxes which Tenant has for any reason paid to any taxing authority, including Landlord, or to any of Tenant's vendors, contractors of subcontractors. Payments required by this Article are referred to herein as "Public Purpose Payments" and shall not, from and after Abandonment of the Project, constitute Exempt Taxes. -220- ARTICLE 37 REPORTS, SUBMISSIONS AND RECORDS Section 37.01. Financial Reports. For as long as the City shall be Landlord and to the extent that City Administrative Code Section 11-208.1 (or successor thereto) is then in force and effect, Tenant shall furnish to Landlord income and expense statements of the type required by such City Administrative Code section (or successor thereto) as if Tenant were the "owner" of the Premises as such term is used in City Administrative Code Section 11-208.1, such statements to be submitted within the time periods and to the address provided for in City Administrative Code Section 11-208.1; such statements are to be furnished notwithstanding that the City holds fee title to the Premises, or that the Premises may therefore not be "income-producing property" as that concept is used in City Administrative Code Section 11-208.1. Section 37.02. Submission of Certificates of Occupancy. Tenant shall submit to Landlord a copy of each and every Certificate of Occupancy received for part or all of the Project, within thirty (30) Business Days of Landlord's request therefor. -221- ARTICLE 38 RECORDING OF LEASE Tenant may, at Tenant's option, cause this Lease and any amendments hereto, or a memorandum hereof or thereof, to be recorded in the Office of the Register of the City of New York (Queens County) after the execution and delivery of this Lease or any such amendments and Landlord shall promptly execute any such memorandum of lease upon request of Tenant. -222- ARTICLE 39 TENANT'S PROPERTY Notwithstanding anything to the contrary contained in Section 13.07 hereof, all Tenant's Property shall be and remain the property of Tenant (or any Subtenant of Tenant, as the case may be) and may be removed by Tenant (or such Subtenant) at any time during the Term. -223- ARTICLE 40 NONDISCRIMINATION; AFFIRMATIVE ACTION Section 40.01. Executive Order No. 50. The provisions of this Section 40.01 shall apply only with respect to contracts entered into directly by Tenant for Construction Work in an amount of $1,000,000 or more, and subcontracts for Construction Work in an amount of $750,000 or more, in each case with respect only to Construction Work necessary to accomplish Substantial Completion of the Initial Improvements or any subsequent expansions of the Initial Improvements which add in excess of 75,000 square feet of Gross Building Area (hereinafter referred to as "E.O. 50 Contracts" and "E.O. 50 Subcontracts," respectively). For so long as Executive Order No. 50 of April 25, 1980 (as amended, "E.O. 50") is in effect, except to the extent that an exemption under E.O. 50 applies, Tenant shall include in all E.O. 50 Contracts, and shall cause its contractors to include in all E.O. 50 Subcontracts, the provisions contained in Exhibit P hereto (the "E.O. 50 Construction Contract Rider"). Tenant shall utilize good faith efforts to cause the contractors under E.O. 50 Contracts to comply, and to cause the subcontractors under E.O. 50 Subcontracts to comply, with the provisions of the E.O. 50 Construction Contract Rider. The more restrictive provisions of Section 6.5(a)(i) of Funding Agreement #1 shall apply with -224- respect to contracts and subcontracts for "Construction Work" (as such term is defined in Funding Agreement #1), as more particularly described in said Section 6.5(a)(i). Section 40.02. Limitations. Notwithstanding anything to the contrary contained in this Lease, the E.O. 50 Construction Contract Rider or E.O. 50 and the rules and regulations promulgated thereunder: (i) the contractors and subcontractors under E.O. 50 Contracts and E.O. 50 Subcontracts shall in no event be bound by any obligations that are more stringent than the obligations imposed by E.O. 50 and the rules and regulations promulgated thereunder in effect as of the date of this Lease, (ii) no preapproval of the contractors and subcontractors under E.O. 50 Contracts and E.O. 50 Subcontracts by any Governmental Authority shall be required, (iii) for so long as New York State Labor Law Section 220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees, the trainee requirements of E.O. 50 shall not be applicable to E.O. 50 Contracts, E.O. 50 Subcontracts and the E.O. 50 Construction Contract Rider and in no event shall Tenant be deemed to be in breach of the terms hereof due to the non-compliance with such trainee requirements by any contractor or subcontractor or the non-inclusion of such trainee requirements in the E.O. 50 Construction Contract Rider or any E.O. 50 Contract or E.O. 50 Subcontract and (iv) in no event shall the default by Tenant under Section 40.01 or the default by any contractor or subcontractor under an E.O. 50 Contract or an E.O. 50 -225- Subcontract give Landlord or any Governmental Authority the right to stop, delay or otherwise interfere with the progress of Construction Work. Section 40.03. E.O. 50 Remedies. In the event of an alleged breach of Tenant's obligations under Section 40.01 hereof, or of the obligations of a contractor or subcontractor under an E.O. 50 Contract or E.O. 50 Subcontract, Landlord, acting through the Department of Labor Services ("DLS") shall notify Tenant (and the contractor or subcontractor, as the case may be) describing the extent of non-compliance. If the non-compliance is not remedied within thirty (30) days of Tenant's receipt of notice, DLS shall request a meeting with Tenant (and with the contractor or subcontractor, as appropriate) to negotiate an Employment Program of corrective actions to achieve Tenant's compliance with Section 40.01 and the compliance by such contractor or subcontractor with the E.O. 50 Contract or E.O. 50 Subcontract, as the case may be. If Tenant fails or refuses either to meet, to agree to take necessary corrective measures, to implement agreed corrective measures, or to enforce the obligations of a contractor pursuant to an E.O. 50 Contract and/or to cause a contractor to enforce the obligations of a subcontractor under an E.O. 50 Subcontract, Landlord, acting through DLS may (i) require such contractor and/or subcontractor, as the case may be, to take corrective measures in an Employment Program or (ii) assess against Tenant as liquidated damages an amount equal to the -226- wages and fringe benefits that would have been paid to the parties that should have been employed pursuant to the non-discrimination and trainee provisions of the E.O. 50 Contracts and E.O. 50 Subcontracts. The remedies set forth in this Section 40.03 shall be the sole remedies available to Landlord in the event of a breach by Tenant of its obligations under Section 40.01 hereof, and no other remedies set forth elsewhere in this Lease shall be applicable to a breach by Tenant of its obligations under Section 40.01. Section 40.04. Nondiscrimination; Affirmative Action. Tenant acknowledges that Landlord insists that parties with which Landlord enters into contracts do not engage in any unlawful discrimination in the selection of contractors or against any employee or job applicant because of race, creed, color, national origin, sex, age, disability, marital status, or sexual orientation with respect to all employment decisions including, but not limited to, recruitment, hiring, compensation, fringe benefits, leaves, promotion, upgrading, demotion, downgrading, transfer, training and apprenticeship, lay-off and termination and all other terms and conditions of employment. Tenant further acknowledges that Landlord insists that all parties with which Landlord enters into contracts take certain affirmative acts to make known to current and prospective employees of such parties that such parties do not engage in unlawful discrimination as more particularly described in the immediately preceding sentence. Landlord -227- acknowledges that (i) there exists at the federal, state and local level a framework of statutes that require Tenant not to engage in any unlawful discrimination of the nature described in this Section 40.04 and to take certain affirmative acts of the nature described in this Section 40.04 (the "Nondiscrimination Statutes"), (ii) there exists at the federal, state and local level a framework of agencies charged with the enforcement of the Nondiscrimination Statutes (the "Nondiscrimination Agencies") and (iii) the Nondiscrimination Statutes provide for certain sanctions that may be imposed by the Nondiscrimination Agencies or courts of competent jurisdiction in the event of a violation of the Nondiscrimination Statutes (the "Nondiscrimination Sanctions"). Tenant agrees that it shall comply with all Nondiscrimination Statutes with respect to the Premises that may be legally applicable to Tenant from time to time during the Term. Section 40.05. Nondiscrimination Remedies. In the event that Landlord has a reasonable basis for believing that Tenant is in violation of a Nondiscrimination Statute with respect to the Premises, Landlord shall notify Tenant describing the nature of such perceived violation. If such violation is not remedied within thirty (30) days of Tenant's receipt of notice, Landlord shall request a meeting with Tenant to discuss Tenant's position as to whether or not Tenant is, in fact, in violation of a Nondiscrimination Statute and, if so, -228- what steps, if any, Tenant intends to take to remedy such violation. If Tenant fails or refuses either to meet, to demonstrate that Tenant is not in violation of a Nondiscrimination Statute, or to take steps to remedy any existing violation of a Nondiscrimination Statute, Landlord, as its sole remedy under this Lease, shall have the right to report to the appropriate Nondiscrimination Agency Landlord's allegation that Tenant is in violation of a Nondiscrimination Statute. Nothing contained herein shall be construed to vest in Landlord the right to institute legal proceedings or seek damages against Tenant, it being understood and agreed that the imposition of any Nondiscrimination Sanctions against Tenant by a Nondiscrimination Agency or court of competent jurisdiction shall be Tenant's sole liability for a breach of its obligations under Section 40.04 hereof. The remedies set forth in this Section 40.05 shall be the sole remedies available to Landlord for an alleged breach of Tenant's obligations under Section 40.04 hereof or an alleged violation of a Nondiscrimination Statute, and no other remedies set forth elsewhere in this Lease shall be applicable to such an alleged breach or violation. -229- ARTICLE 40A INVESTIGATIONS, ETC. Section 40A.01. Cooperation In Investigations. (a) Subject to the exclusions set forth in paragraph (b) of this Section 40A.01, Tenant shall during the term of this Lease: (i) cooperate fully, and utilize good faith efforts to cause its Members to cooperate fully, with any Investigation; and (ii) report, and utilize good faith efforts to cause its Members to report, in writing to the Commissioner, any solicitation of which Tenant has actual knowledge of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or other Person, related to the obtaining and/or performance of the Transaction Documents or any of them. (b) The provisions of paragraph (a) of this Section shall not apply: (i) to any information or document known, prepared or obtained by Tenant or its Members (and the sources of such information or documents) that is protected from compelled disclosure by any present or future "Shield Law" or any other statute, constitutional provision, rule, regulation or case law -230- related to the rights of reporters and/or news organizations; (ii) to any Person who refuses to testify based on a properly invoked privilege against self-incrimination if such Person is not given assurances that his or her statement, and any information from such statement, will not be used against such Person in any subsequent criminal proceeding in any forum (provided, however, that any Person given such assurances shall have the right to have the legal sufficiency of such assurances adjudicated by a court of competent jurisdiction as a precondition of the applicability of paragraph (a) of this Section to such Person); and (iii) to any construction contract or other agreement (or the obtaining or performance thereof) with parties other than the City or EDC, including, without limitation, any contract or agreement being funded through any Transaction Document. Section 40A.02. Hearing. If Tenant or any Member of Tenant refuses to testify in an Investigation and, in connection with such failure to testify, the Commissioner determines that Tenant has failed to cooperate in the Investigation in violation of the provisions of Section 40A.01, the Commissioner may request the Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5) days' -231- written notice to Tenant, to determine if any penalties should be imposed for the Tenant's failure so to cooperate. Section 40A.03. Adjournments of Hearing, etc. (a) Tenant shall have the right to require that the Hearing be adjourned for a period of not more than thirty (30) days. (b) The Deputy Mayor may grant other adjournments of the Hearing in the exercise of his or her reasonable discretion; provided that, in the case of an adjournment occasioned by Tenant's failure to appear, the Deputy Mayor may, if he or she determines that there was no reasonable cause for the failure to appear, impose an Interim Penalty. (c) The City shall not incur any penalty or damages for delay or otherwise occasioned by an adjournment of the Hearing. Section 40A.04. Penalties. (a) The Deputy Mayor may impose a penalty during an adjournment due to Tenant's failure to appear or proceed with the scheduled Hearing pursuant to Section 40A.03(b) ("Interim Penalty") of not more than $1,000.00 per day for each day of such adjournment; provided, however, that such daily penalties shall cease to accrue from and after the date that Tenant makes itself available to appear at or proceed with the scheduled Hearing or gives written notice to the Deputy Mayor that it does not intend to appear at or proceed with the scheduled Hearing, in which event the Deputy Mayor shall have the right -232- to continue the Hearing and reach a determination without Tenant's participation. (b) If, after the Hearing, the Deputy Mayor determines that Tenant failed to cooperate in the Investigation in violation of Section 40A.01, and Tenant fails to commence to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, the Deputy Mayor may: (i) Impose a penalty ("Final Penalty"), which may not, in conjunction with any Interim Penalty imposed during the term of the Lease exceed $500,000 in the aggregate during the term of this Lease; and/or (ii) Disqualify Tenant for a period not to exceed five (5) years from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license with or from the City, other than as contemplated in the Transaction Documents. Notwithstanding anything to the contrary contained herein, in the event that Tenant is found after the Hearing to have failed to cooperate in the Investigation, but nonetheless is not subjected to a Final Penalty because Tenant commences to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, Tenant shall be liable for the cost of conducting such Hearing, not to exceed $5,000. -233- Section 40A.05. Criteria for Determination. The Deputy Mayor shall consider and address in reaching his or her determination and in assessing an appropriate Interim Penalty, Final Penalty, and/or disqualification, if any, the factors in subsections (a) and (b) below. He or she may also consider, if relevant and appropriate, the criteria established in subsections (c) and (d) below in addition to any other information which may be relevant and appropriate: (a) Tenant's good faith endeavors or lack thereof to cooperate fully with the Investigation, including but not limited to the discipline, discharge or disassociation of any Person failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other Members, agents, assignees or fiduciaries whose testimony is sought. The Deputy Mayor shall take into account whether the discipline, discharge or disassociation of any Person failing to testify would violate any union or other contract. (b) The relationship of the Person who refused to testify to Tenant, including, but not limited to, whether the Person whose testimony is sought has an ownership interest in Tenant and/or the degree of authority and responsibility the Person has within Tenant. (c) The nexus of the testimony sought to Tenant and the Transaction Documents. -234- (d) The effect a penalty may have on an unaffiliated and unrelated party or Entity that has a significant interest in Tenant, provided that (i) such unrelated party or Entity has given actual notice to the Commissioner or EDC upon the acquisition of the interest, or (ii) at the Hearing such related party or Entity gives notice and proves that such significant interest was previously acquired; under either circumstance, such unrelated party or Entity must present evidence at the Hearing demonstrating the potential adverse impact a penalty will have on such party or Entity. Section 40A.06. Payment of Penalties. Any Interim or Final Penalty hereunder shall, upon imposition thereof, be applied to reduce the aggregate of Offset Amounts then available to Tenant under Article 4 and the balance, if any, shall be paid promptly as additional Rental or, at Landlord's option, such balance shall be applied to reduce EDC's obligations with respect to any undisbursed Funding. Section 40A.07. Definitions. As used in this Article 40A: "Investigation" means any investigation, audit or inquiry conducted by the Department of Investigation with respect to the obtaining and/or performance of the Transaction Documents or any of them. -235- "Transaction Documents" means this Lease, Funding Agreement #1, Funding Agreement #2, Funding Agreement #3, Funding Agreement #4 and the Power Agreement. "Department of Investigation" means the Department of Investigation of the City or any City department or agency succeeding to the functions thereof. "Commissioner" means the Commissioner or Acting Commissioner of the Department of Investigation. "Deputy Mayor" means the Deputy Mayor for Finance and Development of the City (or the officer of the City succeeding to the functions of that office). "Entity" means any firm, partnership, corporation, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with the City. "Member" means any Person associated with another Person or Entity as a partner, director, officer, principal or employee. Section 40A.08. Exclusive Remedy. Notwithstanding anything to the contrary contained in this Lease, the remedies set forth in Section 40A.04 hereof shall be the sole and exclusive remedies available to Landlord in the event that Tenant breaches any of its obligations under this Article 40A, and no other remedies, including, without limitation, the remedies set forth elsewhere in this Lease for defaults by -236- Tenant in the performance of its obligations under this Lease, shall be applicable to a breach by Tenant of any of its obligations under this Article 40A. Section 40A.09. Right to Dispute Determinations of Deputy Mayor. Nothing contained herein shall be construed to limit in any manner whatsoever Tenant's right or ability to challenge or seek to enjoin, overturn, set aside or modify any action taken, determination made or penalty imposed by the Deputy Mayor pursuant to the provisions of this Article 40A. -237- ARTICLE 41 EMPLOYMENT REPORTING AND REQUIREMENTS Section 41.01 Employment Reporting and Requirements. (a) Within seven (7) days after execution of this Lease, Tenant, if it has not already done so, shall complete and deliver to the City a questionnaire, on the form attached hereto as Exhibit N, or such other employment reporting form requiring the provision of substantially similar information and detail as may be adopted and widely used by the City and its agencies, setting forth, in substance, how many and what types of jobs Tenant in good faith estimates will be transferred to or created at the Premises as of the Operational Date (the "Questionnaire"). In addition, with respect to each fiscal year of the City (i.e., July 1 through June 30) beginning with the fiscal year in which the Operational Date occurs and ending with the fiscal year in which occurs the seventh (7th) anniversary of the Possessory Date, Tenant shall, not later than the September 15th following each such fiscal year, complete the Questionnaire with respect to jobs at the Premises during such fiscal year. Landlord acknowledges that the number and types of jobs to be set forth on the initial Questionnaire by Tenant will represent Tenant's good faith expectation based upon manning levels, conditions, technology and collective bargaining agreements in effect as of the date of such initial Questionnaire. Landlord acknowledges that Tenant has made no representation as to the number of jobs -238- expected to be retained and/or created at the Premises under conditions resulting from future technological advances or modifications to existing collective bargaining agreements or new collective bargaining agreements that may become effective during the term of this Lease. (b) Tenant acknowledges that the submission of the Questionnaire regarding the number and types of jobs retained and/or created at the Premises is of material concern to Landlord and agrees that Tenant's covenants in this Article 41 are a material inducement for Landlord to enter into this Lease. (c) Tenant acknowledges that if Tenant should fail to observe the covenants contained in this Article 41, Landlord shall be entitled to injunctive relief, which shall be its exclusive remedy. -239- ARTICLE 42 APPOINTMENT OF LEASE ADMINISTRATOR Section 42.01. Appointment of Lease Administrator. Landlord hereby appoints EDC as Lease Administrator, to act as Landlord's agent, with full authority to bind Landlord, to administer this Lease on behalf of Landlord for the duration of the Term. The appointment of EDC as Lease Administrator shall not be construed as an assignment of Landlord's interest in this Lease or as releasing Landlord from any of its obligations hereunder. For purposes of this Article 42, EDC shall be deemed to include any affiliated entity of EDC that is controlled by EDC and designated by EDC to act as Lease Administrator. Section 42.02. Revocation of Appointment. Landlord shall have the right to revoke its appointment of EDC as Lease Administrator at any time during the Term; provided, however, that no such revocation shall be binding upon Tenant until the Business Day following Tenant's receipt of written notification from Landlord that Landlord has revoked its appointment of EDC as Lease Administrator. Section 42.03. Binding Nature of Lease Administrator's Actions. For so long as Tenant has not become bound by any revocation of Landlord's appointment of EDC as Lease Administrator pursuant to the provisions of Section -240- 42.02, Landlord shall be fully bound by and liable for any act or omission by EDC in connection with this Lease (without regard to whether such act or omission may conflict with or exceed the authority granted by Landlord to Lease Administrator pursuant to any oral understanding or written agreement, unless and from and after the date that Tenant has received written notice from Landlord of any limitation on EDC's authority) including, without limitation: (i) any notice, approval, determination, consent, or withholding of approval or consent, given or rendered by EDC, (ii) any failure by EDC to act within any time period specified in this Lease, (iii) any failure by EDC to cause the Possessory Date to occur in accordance with the terms of this Lease or (iv) any other failure by EDC to perform any act or refrain from any act in accordance with the provisions of this Lease, in each case with the same force and effect as if such act or omission by Lease Administrator had been performed or omitted by Landlord. Nothing contained herein shall be deemed to grant to Landlord any right to cure any act or omission of EDC or any entitlement to any extension of any time period contained in this Lease. Section 42.04. Obligation of Landlord to Perform Certain Acts. Landlord and Tenant acknowledge and agree that certain acts to be performed by Landlord hereunder may not be susceptible of being performed by EDC on behalf of Landlord. Such acts shall include, but shall not be limited to the -241- execution of the Agreement of Sale and Purchase, a deed, and certain other documents in connection with Tenant's exercise of its option to purchase the Property pursuant to Article 21 hereof. Notwithstanding anything to the contrary contained herein, Tenant shall be under no obligation whatsoever to notify Landlord of any acts required to be performed hereunder that are not susceptible of being performed by Lease Administrator on Landlord's behalf, and to the extent that Tenant is required pursuant to any provision of this Lease to give Landlord notice of the requirement to perform any such acts, the giving of notice by Tenant to Lease Administrator shall be deemed sufficient and binding in all respects upon Landlord. -242- ARTICLE 43 MISCELLANEOUS Section 43.01. Captions. The captions of this Lease are for the purpose of convenience of reference only, and in no way define, limit or describe the scope or intent of this Lease or in any way affect this Lease. Section 43.02. Table of Contents. The Table of Contents is for the purpose of convenience of reference only, and is not to be deemed or construed in any way as part of this Lease. Section 43.03. Reference to Landlord and Tenant. The use herein of the neuter pronoun in any reference to Landlord or Tenant shall be deemed to include any individual Landlord or Tenant, and the use herein of the words "successors and assigns" or "successors or assigns" of Landlord or Tenant shall be deemed to include the heirs, legal representatives and assigns of any individual Landlord or Tenant. Section 43.04. Person Acting on Behalf of a Party Hereunder. If more than one Person is named as, or becomes a party hereunder, the other party may require the signatures of all such Persons in connection with any notice to be given or action to be taken hereunder by the party acting through such Persons. Each Person acting through or named as a party shall be fully and jointly and severally liable for all of such party's obligations hereunder. Any notice by a party to any -243- Person acting through or named as the other party shall be sufficient and shall have the same force and effect as though given to all Persons acting through or named as such other party. Section 43.05. Comptroller's Statutory Right of Audit. Nothing contained in this Lease shall be construed to affect, expand, diminish, impair or compromise the statutory right of the Comptroller of the City set forth in Section 93(b) of the New York City Charter, nor shall anything contained in this Section 43.05 be construed to impose, affect or expand in any manner whatsoever any obligations of Tenant beyond those obligations specifically set forth elsewhere in this Lease. Section 43.06. Limitation on Liability. (a) Landlord's Exculpation. Except as specifically set forth to the contrary in this Section 43.06(a), there shall be no limitation on the liability of Landlord, or any other Person who has at any time acted as Landlord hereunder, for damages or otherwise in connection with this Lease. In the event that it is determined by a court of competent jurisdiction that Landlord is liable to Tenant for damages or otherwise in connection with this Lease (the amount of such damages or otherwise determined to be the liability of Landlord is hereinafter referred to as "Landlord's Liability Amount"), then, notwithstanding anything to the contrary contained herein, Landlord's Liability Amount shall be payable as follows: (i) for a period not to exceed five (5) years from -244- the date of determination of Landlord's Liability Amount, Tenant shall take an offset against Rental (exclusive of Impositions and the College Point Improvement Fund Payments) with respect to all or such portion of Landlord's Liability Amount (the "Offset Liability Portion") which, with interest at the rate of eight percent (8%) per annum, and taking into account such factors as whether Tenant is entitled to any other offsets against Rental and the number of years remaining in the Term, may be offset over a period not to exceed five (5) years, and (ii) the excess of Landlord's Liability Amount over the Offset Liability Portion (the "Remaining Liability Portion") shall be due and payable by Landlord to Tenant immediately upon the determination of Landlord's Liability Amount. In the event that Tenant exercises its option to purchase the Property pursuant to Article 21 hereof, the Purchase Price shall be reduced by any unpaid portion of Landlord's Liability Amount and the excess, if any, of such unpaid portion over the Purchase Price shall be due and payable by Landlord to Tenant within forty-five (45) days after the final determination of the Purchase Price and any adjustments thereto. In the event that either (i) this Lease is terminated for any reason other than the exercise by Tenant of its option to purchase the Property or (ii) Tenant shall become entitled to any additional right of offset against all or any portion of Rental pursuant to the terms of this Lease, then Tenant shall pay to Tenant, within forty-five (45) days thereafter, any unpaid portion of -245- Landlord's Liability Amount; provided, however, that if the remainder of the Term is of sufficient duration to permit such additional offset to be taken after offsetting the Offset Liability Portion, Landlord may elect, as an alternative to the immediate payment of the remainder of Landlord's Liability Amount, to have such additional right of offset accrue interest at the rate of eight percent (8%) per annum and thereafter be offset immediately after the full amount of the Offset Liability Portion has been fully offset. None of the directors, officers, partners, principals, shareholders, employees, agents or servants of Landlord shall have any liability (personal or otherwise) hereunder or be subject to levy, execution or other enforcement procedure for the satisfaction of any remedies of Tenant available hereunder. (b) Tenant's Exculpation. Notwithstanding anything to the contrary in this Lease, except for (i) liability for conversion, fraud, fraud of creditors, breach of trust or intentional damage to the Premises, (ii) liability of Tenant for Rental due or accrued and unpaid, (iii) liability of Tenant to Indemnitees pursuant to Article 20, (iv) all other obligations of Tenant hereunder which are expressly provided herein to survive termination of this Lease; and (v) any non-monetary rights or remedies in equity, Tenant's liability hereunder for damages or other monetary amounts or otherwise by reason of any Default, Event of Default or breach under this Lease, or any other claim against Tenant arising under this -246- Lease, shall be limited to Tenant's interest in the Premises, including, without limitation, rents or profits collectible but not yet collected, the proceeds of any insurance policies payable to Tenant covering or relating to the Premises, any awards payable to Tenant in connection with any condemnation of the Premises or any part thereof, and any other rights, privileges, licenses, franchises, claims, causes of action or other interests, sums or receivables appurtenant to the Premises. None of the directors, officers, principals, partners, shareholders, employees, agents, or servants of Tenant shall have any liability (personal or otherwise) under this Lease. No property or assets of Tenant or any of the directors, officers, partners, principals, venturers, shareholders, employees, agents or servants of Tenant shall be subject to levy, execution or any other enforcement procedure for the satisfaction of Landlord's remedies or claims arising under this Lease. This Section shall survive the Expiration Date. (c) Governs Lease. The provisions of this Section 43.06 shall govern every other provision of this Lease. The absence of explicit reference to this Section 43.06 in any particular provision of this Lease shall not be construed to diminish the application of this Section 43.06 to such provision. This Section 43.06 shall survive the Expiration Date. (d) Other Remedies. Nothing in this Section 43.06 is intended to limit the remedies available to any party -247- under this Lease other than in the manner and to the extent provided in this Section 43.06. Nothing in this Section 43.06 is intended to prevent or preclude a party from obtaining injunctive or declaratory relief with respect to any claim arising under this Lease or in connection with the Premises. Section 43.07. Remedies Cumulative. Each right and remedy of Landlord or Tenant provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Landlord or Tenant of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. Section 43.08. Merger. Unless Landlord, Tenant and all Mortgagees sign and record an agreement to the contrary, there shall be no merger of this Lease or the leasehold estate created hereby with the fee estate in the Premises or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Lease and the leasehold estate created hereby or any interest in this Lease or in such leasehold estate as well as the fee estate in the Premises. -248- Section 43.09. Performance at Party's Sole Cost and Expense. The exercise by Landlord or Tenant of any of its rights, and the rendering and/or performance by Landlord or Tenant of any of its obligations, shall be at the sole cost and expense of the party so exercising, rendering or performing unless expressly provided to the contrary in this Lease. Section 43.10. Relationship of Landlord and Tenant. This Lease is not to be construed to create a partnership or joint venture between the parties, it being the intention of the parties hereto only to create a landlord and tenant relationship. Section 43.11. Waiver, Modification, etc. No covenant, agreement, term or condition of this Lease shall be changed, modified, altered, waived or terminated except by a written instrument of change, modification, alteration, waiver or termination executed by Landlord and Tenant. No waiver of any Default shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default thereof. Section 43.12. [Intentionally Omitted]. Section 43.13. Governing Law. This Lease shall be governed by, and be construed in accordance with, the laws of the State of New York. -249- Section 43.14. Successors and Assigns. The agreements, terms, covenants and conditions herein shall be binding upon, and inure to the benefit of, Landlord and Tenant and, except as otherwise provided herein, their respective successors and assigns. Section 43.15. Publicity. Landlord and Tenant will consult and cooperate with each other with respect to (a) any and all press conferences or public ceremonies held by either of them, or their agents or representatives, and (b) any statements or announcements issued by Landlord or Tenant, or their agents or representatives, to any news media announcing the execution of this Lease, groundbreaking for the Project and/or the interim relocation Car Pound and no publicity announcement or other media release with respect thereto shall occur without the prior approval of both Lease Administrator and Tenant; provided, however, that this provision is not intended to restrict The New York Times newspaper from reporting any news. Officials of Landlord and Lease Administrator will have the right to participate in any press conferences or public ceremonies described in this Section 43.15. Section 43.16. [Intentionally Omitted] Section 43.17. [Intentionally Omitted] -250- Section 43.18. Termination by Tenant. Whenever Tenant shall have an option to terminate this Lease, such option shall be exercised by written notice thereof to Landlord; this Lease shall terminate as otherwise provided in this Lease or, if no specific provision is made therefor, upon the giving of such notice. From and after termination of this Lease by Tenant, except as otherwise specifically provided or with respect to any provisions specifically stated to survive the Expiration Date, (a) Tenant shall thereafter have no rights, obligations or liabilities under this Lease with respect to any period after the Expiration Date, and (b) Landlord shall have no further rights, obligations or liabilities under this Lease. Section 43.19. Hazardous Substances, Etc. (a) Landlord covenants that it will not place or permit or suffer to be placed on the Premises any Hazardous Substances in violation of any Requirements and that if any Hazardous Substances are placed on the Premises between the Lease Execution Date and the Possessory Date, Landlord will take all required clean-up and other remedial action to rid the Premises of such Hazardous Substances and will indemnify Tenant against the cost of any required clean-up or other remedial action required after the Possessory Date by reason of the presence of such Hazardous Substances placed on the Premises between the Lease Execution Date and the Possessory Date. -251- (b) Tenant covenants that, from and after the Possessory Date, it will not place or permit or suffer any Hazardous Substances to be placed on the Premises in violation of any Requirements, and that if any Hazardous Substances are placed on the Premises after the Possessory Date, Tenant will take all required clean-up and other remedial action to rid the Premises of such Hazardous Substances and will indemnify Landlord against the cost of any required clean-up or other remedial action required after the Possessory Date by reason of the presence of such Hazardous Substances on the Premises. (c) The respective rights and obligations of Landlord and Tenant with respect to any Hazardous Substances discovered at the Premises that are determined to have been placed at the Premises prior to the Lease Execution Date shall be governed by applicable laws in effect at the time of such discovery, and nothing contained in this Lease shall be construed as enlarging, diminishing or waiving any of Landlord's or Tenant's rights, obligations or liabilities pursuant to such applicable laws. (d) In the event that (i) any clean-up or other remedial action to rid the Premises of Hazardous Substances is undertaken by or on behalf of Landlord or Tenant during the period commencing on the Possessory Date and ending on the date after Substantial Completion that Tenant first occupies the Premises for the conduct of its business, and (ii) such -252- clean-up or other remedial action either (x) is required as the result of a breach of Landlord's covenant in Section 43.19(a) hereof or (y) is determined to be the obligation or responsibility of Landlord as more particularly set forth in Section 43.19(c) hereof, then, for all purposes of this Lease including, without limitation, the computation of periods of abatement of Rental, the Possessory Date shall be recomputed and deemed to have occurred on the date that is the date of the Possessory Date as originally calculated, plus the number of days in the Hazardous Substances Extension Period during which Tenant is delayed by such clean-up or remedial action in causing Substantial Completion and/or the Operational Date to occur. For purposes of this Lease, the term "Hazardous Substances Extension Period" shall mean the period commencing on (1) the date on which the need for such clean-up or other remedial action is discovered, and ending on (2) the date on which such clean-up or other remedial action is completed. -253- ARTICLE 44 STORM DRAINAGE SYSTEM Notwithstanding any other provision hereof, if Tenant shall have submitted to the City's Department of Environmental Protection, Division of Sewers ("DEP Sewers") a completed site connection proposal application, in conformance with all of DEP'S Sewers' rules, regulations and requirements, with respect to its storm drainage plan for the Project (which drainage plan assumes that the Project will be an approximately 720,000 square foot building and will not require additional on-site retention), and DEP Sewers shall not have given final approval of such application without any revisions or conditions by the date that is the earlier to occur of (i) two (2) months following the date on which such submission is deemed complete by DEP Sewers and (ii) six (6) months after the submission of such site connection proposal application accompanied by all of the documents required by the Site Connection Proposal Form attached hereto at Exhibit O, then Tenant shall have the right to terminate this Lease upon thirty (30) days notice to Landlord. Such termination shall be effective upon the expiration of such thirty (30) day period; provided, however, that if DEP Sewers gives such final approval within such thirty (30) day period, Tenant's termination notice shall have no effect and this Lease shall continue in full force and effect. -254- ARTICLE 45 BROKERS Each of Landlord and Tenant represents to the other that it has not dealt with any broker, finder or like entity in connection with this Lease or the transactions contemplated hereby, and each party shall indemnify the other against any claim for brokerage commissions, fees or other compensation by any Person arising out of any conversations, negotiations or dealings had by such Person with the indemnifying party in connection with this Lease or the transactions contemplated hereby. -255- ARTICLE 46 WHITESTONE ROAD As a material inducement to Tenant to enter into this Lease, Landlord hereby grants to Tenant the option to perform the work necessary to reconstruct, in accordance with New York City Department of Transportation standards, on behalf of Landlord, the Whitestone Expressway Service Road between 20th Avenue and Linden Place, a city street running along the easterly side of the Premises and along the easterly side of the premises adjacent to the Premises currently owned by the United States Postal Service, as such street is more particularly depicted in Appendix B to Funding Agreement #4 (the "Whitestone Road"), on all of the terms and conditions set forth in Funding Agreement #4. -256- IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first above written. THE CITY OF NEW YORK ATTEST: [SEAL] By: ---------------------------- - ------------------------- City Clerk Approved as to Form: - -------------------------- Acting Corporation Counsel NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: ---------------------------- -257- STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me ---------- personally came , to me known and known to me to be [a Deputy] Mayor of The City of New York and the same person who executed the foregoing instrument, and he or she acknowledged that he or she executed the foregoing instrument on behalf of the City of New York and pursuant to the authority vested in him or her. --------------------------- Notary Public STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me ---------- personally came , to me known and known to me to be the City Clerk of the City of New York, the corporation described in and which executed the foregoing instrument, and who being by me duly sworn, deposes and says that he resides at , New York, New York; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed as provided by law; and that he signed his name thereto as City Clerk by like authority. -------------------------- Notary Public -258- STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me --------- personally came , to me known, who, being by me duly sworn, did depose and say that he or she resides at ; that he or she is the of NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, the corporation described in and which executed the foregoing instrument; that he or she knows the seal of said corporation; that the seal affixed to said instrument is such corporation seal; that it was so affixed by order of the board of directors of said corporation, and that he or she signed his or her name thereto by like order. ---------------------------- Notary Public -259- EXHIBIT C MAXIMUM IMPROVEMENT PILOT EXHIBIT C SCHEDULE OF MAXIMUM IMPROVEMENTS PILOT PAYMENTS (ILLUSTRATIVE) Maximum Improvements PILOT in Initial Improvements PILOT Period Deemed Fair Market Value per square foot $ 110.00 Multiply times 45% = Deemed Assessed Value per square foot $ 49.50 Multiply times Stipulated Tax Rate 10.698% = Maximum Improvements PILOT per square foot before abatement $ 5.30 Less: 100% abatement $ 5.30 = Maximum Improvements PILOT per square foot after abatement $ 0.00
Deemed Fair Market Maximum Maximum Value Improvements Improvements per square PILOT per PILOT per foot sq. foot sq. foot Maximum Improvements PILOT in (decreases before Percentage $ after Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement - ----------------------------------- ---------- ----------- --------- ----------- ----------- Maximum Improvements PILOT before abatement in Initial Improvements PILOT Period $5.30 100% $5.30 $0.00 assumed to be tax year 4 $110.00 $5.30 100% $5.30 $0.00 assumed to be tax year 5 $108.90 $5.24 100% $5.24 $0.00 (cont'd on next page)
Deemed Fair Market Maximum Maximum Value Improvements Improvements per square PILOT per PILOT per foot sq. foot sq. foot Maximum Improvements PILOT in (decreases before Percentage $ after Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement - ----------------------------------- ---------- ----------- ---------- ---------- --------- assumed to be tax year 6 $107.81 $5.19 100% $5.19 $0.00 assumed to be tax year 7 $106.73 $5.14 100% $5.14 $0.00 assumed to be tax year 8 $105.67 $5.09 100% $5.09 $0.00 assumed to be tax year 9 $104.61 $5.04 100% $5.04 $0.00 assumed to be tax year 10 $103.56 $4.99 100% $4.99 $0.00 assumed to be tax year 11 $102.53 $4.94 100% $4.94 $0.00 assumed to be tax year 12 $101.50 $4.89 100% $4.89 $0.00 assumed to be tax year 13 $100.49 $4.84 100% $4.84 $0.00 assumed to be tax year 14 $ 99.48 $4.79 100% $4.79 $0.00 assumed to be tax year 15 $ 98.49 $4.74 100% $4.74 $0.00 assumed to be tax year 16 $ 97.50 $4.69 90% of tax $4.27 $0.42 year 15 assumed to be tax year 17 $ 96.53 $4.65 80% of tax $3.79 $0.86 year 15 assumed to be tax year 18 $ 95.56 $4.60 70% of tax $3.32 $1.28 year 15 assumed to be tax year 19 $ 94.61 $4.55 60% of tax $2.84 $1.71 year 15 assumed to be tax year 20 $ 93.66 $4.51 50% of tax $2.37 $2.14 year 15 assumed to be tax year 21 $ 92.72 $4.46 40% of tax $1.90 $2.56 year 15 assumed to be tax year 22 $ 91.80 $4.42 30% of tax $1.42 $3.00 year 15 assumed to be tax year 23 $ 90.88 $4.37 20% of tax $0.95 $3.42 year 15 assumed to be tax year 24 $ 89.97 $4.33 10% of tax $0.47 $3.86 year 15 - 2 - (cont'd on next page) Deemed Fair Market Maximum Maximum Value Improvements Improvements per square PILOT per PILOT per foot sq. foot sq. foot Maximum Improvements PILOT in (decreases before Percentage $ after Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement - ----------------------------------- ----------- ----------- ---------- --------- ------------ assumed to be tax year 25 $ 89.07 $4.29 10% of tax $0.47 $3.82 year 15 assumed to be tax year 26 $ 88.18 $4.25 $0.00 $4.25 assumed to be tax year 27 $ 87.30 $4.20 $0.00 $4.20 assumed to be tax year 28 $ 86.42 $4.16 $0.00 $4.16 assumed to be tax year 29 $ 85.56 $4.12 $0.00 $4.12 assumed to be tax year 30 $ 84.70 $4.08 $0.00 $4.08 assumed to be tax year 31 $ 83.86 $4.04 $0.00 $4.04 assumed to be tax year 32 $ 83.02 $4.00 $0.00 $4.00
Note: Tenant is entitled to an abatement of the Improvements PILOT for a total of 25 years from and after the Construction Commencement Date. The above illustrative schedule assumes: - construction takes three years (and therefore the first "Tax Year" is in the City's first fiscal tax year following beginning of construction). - Therefore, the first year of the "Remaining Improvements Tax Period" will be in Tax Year 4. - 3 - EXHIBIT D MAXIMUM LAND PILOT EXHIBIT D SCHEDULE OF MAXIMUM LAND PILOT Land PILOT for period from Lease Execution Date to Possessory Date: $0 Maximum Land PILOT for Initial Land PILOT Period Site size (in square feet) 1,382,420 Stipulated FMV per square foot $4.50 = Stipulated Fair Market Value $6,220,890 Multiply times 45% = Stipulated Assessed Value $2,799,401 Multiply times Stipulated Tax Rate 10.698% Maximum Land PILOT before abatement in Initial Land PILOT Period $299,480 Less Abatement in Initial Land PILOT Period $100,000 Maximum Land PILOT in each year of Initial Land PILOT Period $199,480
Max. Land PILOT Max. Land PILOT Before Substantial After Substantial Completion Date Completion Date Maximum Maximum Maximum Land Land PILOT Land PILOT PILOT Maximum Land PILOT Before After After in Remaining Land PILOT Period Abatement Abatement Abatement Abatement Abatement - ------------------------------ ---------- --------- ---------- --------- --------- Maximum Land PILOT before abatement in Initial Land PILOT Period $299,480 Plus 4% increase per year of Remaining Land PILOT Period:* year 1 311,459 100,000 211,459 200,000 111,459 year 2 323,917 100,000 223,917 200,000 123,917 year 3 336,874 100,000 236,874 200,000 136,874 (cont'd on next page) * The first such 4% increase to take place as of the beginning on the first full Fiscal Year (July 1 - June 30) of the Remaining Land PILOT Period. Max. Land PILOT Max. Land PILOT Before Substantial After Substantial Completion Date Completion Date Maximum Maximum Maximum Land Land PILOT Land PILOT PILOT Maximum Land PILOT Before After After in Remaining Land PILOT Period Abatement Abatement Abatement Abatement Abatement - ------------------------------ --------- --------- --------- --------- --------- year 4 350,349 100,000 250,349 200,000 150,349 year 5 364,363 100,000 264,363 200,000 164,363 year 6 378,938 100,000 278,938 200,000 178,938 year 7 394,095 100,000 294,095 200,000 194,095 year 8 409,859 100,000 309,859 200,000 209,859 year 9 426,253 100,000 326,253 200,000 226,253 year 10 443,303 100,000 343,303 200,000 243,303 year 11 461,035 100,000 361,035 200,000 261,035 year 12 479,477 100,000 379,477 200,000 279,477 year 13 498,656 100,000 398,656 200,000 298,656 year 14 518,602 n/a n/a 200,000 318,602 year 15 539,346 n/a n/a 200,000 339,346 year 16 560,920 n/a n/a 200,000 360,920 year 17 583,357 n/a n/a 200,000 383,357 year 18 606,691 n/a n/a 200,000 406,691 year 19 630,959 n/a n/a 200,000 430,959 year 20 656,197 n/a n/a 0 656,197 year 21 682,445 n/a n/a 0 682,445 year 22 709,743 n/a n/a 0 709,743 year 23 738,133 n/a n/a 0 738,133 year 24 767,658 n/a n/a 0 767,658 year 25 796,364 n/a n/a 0 796,364 year 26 830,299 n/a n/a 0 830,299 year 27 863,511 n/a n/a 0 863,511 year 28 898,051 n/a n/a 0 898,051 year 29 933,973 n/a n/a 0 933,973 year 30 971,332 n/a n/a 0 971,332 Tenant is entitled to an abatement of Land PILOT for a total of 20 years. Therefore: Land PILOT during the Remaining Land PILOT If the Initial Land PILOT Period Lasts: Period will be abated for the first: 1 year 19 years 2 years 18 years 3 years 17 years 4 years 16 years 5 years 15 years 6 years 14 years 7 years 13 years
- 2 - (2282J) EXHIBIT K AGREEMENT OF SALE AND PURCHASE between , Purchaser and , Seller Premises: Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, p/o Lot 1 and all of Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46, plus demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street as identified on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned new tentative tax block and lot numbers Block 4282, Lot 100 for future identification. INDEX ARTICLE SUBJECT PAGE I Inclusions in Sale 1 II Purchase Price 3 III Closing 4 IV Closing Documents 5 V State of Title 9 VI Violations 10 VII State of New York Gains Tax/ Transfer Taxes 11 VIII Representations, Warranties and Covenants 17 IX Closing Adjustments 23 X Commissions 25 XI Operations Prior to Closing 26 XII Risk of Loss 27 XIII Conditions to Closing 28 XIV Termination and Remedies 28 XV Notices 31 XVI Intentionally Omitted 33 XVII Miscellaneous 33 EXHIBIT SUBJECT A Description of Land *[B Assignment of Lease] C Bill of Sale D Post-Closing Adjustment Letter E FIRPTA Certificate F Permitted Encumbrances G Deed * To be included at Purchaser's option. THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made as of this day of by and between THE CITY OF NEW YORK* ("Seller"), a having an office at , and ("Purchaser"), a , having an office at . W I T N E S S E T H: Seller hereby agrees to sell to Purchaser and Purchaser hereby agrees to purchase from Seller, upon the terms and conditions hereinafter set forth, the "Property" (as such term is defined in Article I hereof). NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, and subject to the terms and conditions hereof, Seller and Purchaser hereby covenant and agree as follows: ARTICLE I INCLUSIONS IN SALE 1.1. There shall be included in this sale all of the following (collectively, the "Property"): * or such municipal entity to which the City of New York may transfer its interest in the Land pursuant to Section 5.02 of the Lease. 1.1.1. The land described on Exhibit A annexed hereto (the "Land"). 1.1.2. All rights and appurtenances now or hereafter pertaining to the Land, including, without limitation, any and all rights of Seller in and to all air and development rights, streets, roads, alleys, easements, streets and ways adjacent to the Land, strips and gores within or bounding the Land, and rights of ingress and egress thereto. 1.1.3. The buildings and other improvements now or hereafter erected or situated on the Land (the "Building"). 1.1.4. All of Seller's right, title and interest in and to that certain Agreement of Lease dated as of , 1993, between The City of New York (the "City") and New York City Economic Development Corporation with respect to the Property, which lease was assigned by New York City Economic Development Corporation to The New York Times Company (as amended, the "Lease"). 1.1.5. All equipment (including, without limitation, all equipment relating to the printing, collating, bundling and distribution of newspapers, -2- magazines and other periodicals or printed materials, all of which equipment is the property of the tenant under the Lease), furnishings and other tangible personal property (collectively, the "Personal Property") now or hereafter placed or installed on or about the Land or Building now or hereafter and used as part of or in connection with the Land or Building, excluding personal property owned by the tenant under the Lease or by any of its subtenants. 1.1.6. All rights to any award made or to be made or settlement in lieu thereof for damage to the Land, Building and Personal Property by reason of condemnation, eminent domain, exercise of police power or change of grade of any street. ARTICLE II PURCHASE PRICE 2.1. The purchase price (the "Purchase Price") for the Property shall be the sum of *[SIX MILLION NINE HUNDRED THOUSAND AND 00/100 THS DOLLARS ($6,900,000.00).] * Correct Purchase Price to be inserted in the event that such price has been adjusted pursuant to any applicable provisions of the Lease. -3- 2.2. The Purchase Price shall be paid by Purchaser at the "Closing" (as such term is defined in Section 3.1 hereof) by, at Purchaser's election, either wire transfer, or cashier's, bank, official, or certified check to Seller drawn on a U.S. money center bank or a bank that is a member of the New York Clearing House Association (or any successor body of similar function). If Purchaser elects to pay the Purchase Price by wire transfer, Seller shall, within one (1) Business Day after Purchaser's request therefor, notify Purchaser of the designated recipient of such wired funds together with all necessary wiring instructions. The term "Business Days" shall mean any days other than Saturdays, Sundays and all days on which banking institutions in New York City are authorized by law or executive order to close. 2.3. Purchaser and Seller agree that no part of the Purchase Price is allocable to the Personal Property or any other personal property. ARTICLE III CLOSING 3.1. The closing of the transaction which is the subject of this Agreement (the "Closing") shall be held on the date (the "Closing Date") which is the later to occur of (x) * and (y) the third day following the receipt * Date to be inserted by Purchaser prior to delivery of this Agreement to Seller, which date shall be not less than forty-five (45) days after the date of the Purchase Notice (as such term is defined in Section 21.01(b) of the Lease). -4- by Seller of the Return from the Tax Department (as such terms are defined in Section 7.1.2 hereof). Purchaser may, at its option, adjourn the Closing Date one or more times for up to an aggregate of three hundred sixty-five (365) days by giving written notice of such adjournments to Seller. The Closing shall be held at 10:00 A.M. at the office of Bachner, Tally, Polevoy & Misher, 380 Madison Avenue, New York, New York 10017, or at the offices of Purchaser's lending institution or such lending institution's attorneys, or at any other office in New York City selected by Purchaser, provided that Purchaser gives Seller notice of such place of Closing at last one day prior to the Closing. ARTICLE IV CLOSING DOCUMENTS 4.1. At the Closing, Seller shall cause to be delivered to Purchaser the following documents and instruments, and any other items specified in this Agreement, duly executed and acknowledged, in recordable form where applicable, and dated as of the Closing Date: 4.1.1. A Bargain and Sale Deed with Covenant Against Grantor's Acts containing the covenant required by Section 13 of the Lien Law of the State of New York (the "Deed"), substantially in the form -5- attached hereto as Exhibit G, in proper statutory form for recording, duly executed and acknowledged, subject to any modifications that may be required by law, by any title company as a condition of issuing title insurance (provided that such modifications required by a title company are commercially reasonable), and/or in order to make such deed recordable in Queens County, New York. *[ 4.1.2. An Assignment of Lease in the form of Exhibit B annexed hereto, together with originals of the Lease assigned thereby.] 4.1.3. A Bill of Sale in the form of Exhibit C annexed hereto. 4.1.4. A Post-Closing Adjustment Letter in the form of Exhibit D annexed hereto. 4.1.5. The certificate in the form of Exhibit E annexed hereto (the "FIRPTA Certificate"). * To be included at Purchaser's option. -6- 4.1.6. Affidavits and certificates as to facts within the knowledge of Seller relevant to the determination by (the "Title Company") as to the condition of title or the due performance by Seller of its obligations hereunder. 4.1.7. The New York State Combined Real Property Transfer Gains Tax Affidavit Real Estate Transfer Tax Return and Credit Line Mortgage Certificate (TP-584). 4.1.8. The Real Property Transfer Tax Return pursuant to Title 11, Chapter 21 of the New York City Administrative Code. 4.1.9. The Return, as defined in Section 7.1.2, duly executed and acknowledged by Seller. 4.1.10. Subject to the provisions of Article 28 of the Lease, certified checks in payment of the taxes to be paid by Seller at Closing pursuant to Sections 7.1.2 and 7.2 hereof; provided, however, notwithstanding the foregoing, if the aggregate amount of such taxes does not exceed the Purchase Price, then, at Seller's election, the payment of such taxes may be made by giving Purchaser a credit against the Purchase Price. -7- 4.1.11. Such other documents as may be reasonably required by the Title Company to consummate the transaction which is the subject of this Agreement. 4.1.12. Any other instruments specifically referred to in this Agreement. 4.2. At the Closing, Purchaser or its designee shall cause to be delivered to Seller the following documents and instruments: 4.2.1. The Purchase Price and any other sums payable by Purchaser at the Closing under any provisions of this Agreement. *[ 4.2.2. The Assignment of Lease in the form of Exhibit B annexed hereto.] 4.2.3. A Post-Closing Adjustment Letter in the form of Exhibit D annexed hereto. * To be included at Purchaser's option. -8- ARTICLE V STATE OF TITLE 5.1. As a condition to Purchaser's obligations at Closing, Seller's title to the Property shall be marketable and insurable without excess premium subject only to the liens, encumbrances and title conditions (hereinafter called the "Permitted Encumbrances") enumerated on Exhibit F annexed hereto. 5.2. (a) If there shall be any liens, charges, easements, agreements of record, encumbrances or other objections to title other than (i) Permitted Encumbrances or (ii) those that arose after the Lease Execution Date by reason other than the acts, negligence, misconduct or failure to act of Seller or EDC (collectively, "Title Objections"), then Seller shall take all such actions as may be necessary (including, without limitation, the commencement of and the diligent prosecution of legal proceedings and the payment of money) to remove such Title Objections. If Seller fails to remove any Title Objection in accordance with the provisions of the immediately preceding sentence, Purchaser, nevertheless, may elect (at or prior to the Closing) to consummate the transaction provided for herein subject to any such Title Objection as may exist as of the Closing with a credit against the Purchase Price equal to (y) the sum necessary to remove such Title Objection(s) which can be satisfied by a liquidated amount, and (z) the reasonably estimated reduction in the fair -9- market value of the Property resulting from any Title Objection which cannot be satisfied by the payment of a liquidated amount; provided, however, that Seller shall remain fully liable (which liability shall survive the Closing) for the cost of removing, and shall reimburse Purchaser for any costs, claims, damages, obligations, liabilities and expenses (including, without limitation, legal fees and expenses) incurred by Purchaser with respect to such Title Objections. If Purchaser shall not so elect, the provisions of Article XIV ("Termination and Remedies") hereof shall be applicable. (b) If there shall be any Title Objections other than those that may be removed by the payment of an ascertainable sum of money, then, Seller, if it so elects, shall be entitled to a reasonable adjournment of the Closing (but in no event more than ninety (90) days) in order to attempt to remove any such Title Objections. If after such reasonable period Seller is unable to remove any such Title Objections, the provisions of Section 5.2(a) and Article XIV ("Termination and Remedies") hereof shall apply. ARTICLE VI VIOLATIONS 6.1. All notes or notices of violations of law or municipal ordinances, orders or requirements noted or issued by any governmental authority having jurisdiction against or affecting the Property as the result of the act or omission of -10- Seller, the City of New York, any person or entity acting as the managing agent of Seller's interest in the Lease, or any of its or their employees, contractors or agents, and not the responsibility of the tenant under the Lease, shall be complied with by Seller and removed of record. ARTICLE VII STATE OF NEW YORK GAINS TAX/TRANSFER TAXES 7.1. New York State Real Property Transfer Gains Tax ("Gains Tax"). Subject to the provisions of Article 28 of the Lease and Seller's rights pursuant to Section 4.1.10 hereof: 7.1.1. If Seller is the City, and New York State Tax Law Section 1443.3(a) (or any successor or replacement provision granting a similar exemption from Gains Tax for transfers by the City) is then in effect, then at the Closing Seller shall properly execute and deliver to Purchaser a New York State Form TP-584 (Combined Real Property Gains Tax Affidavit, Real Estate Transfer Tax Return and Credit Line Mortgage Certificate) (or successor or replacement form) indicating in Schedule B thereof that the conveyance of the Property to Purchaser is exempt as a transfer by a governmental entity, and Seller shall not be obligated to pay any Gains Tax at Closing, nor shall Purchaser be obligated to complete, deliver or file a Transferee Questionnaire (as defined in Section -11- 7.1.2 hereof), but Seller's indemnity obligations under Sections 7.1.2 and 7.3 hereof, and under Section 3.08 of the Lease, shall continue unaffected. 7.1.2. If Section 7.1.1 hereof is inapplicable, then Purchaser shall cause to be delivered to Seller the New York State Real Property Transfer Gains Tax Questionnaire Transferee (TP-581) or any successor questionnaire or replacement form thereof with all relevant information completed thereon (hereinafter called the "Transferee Questionnaire"), such Transferee Questionnaire duly executed by Purchaser and acknowledged. Seller shall, within ten (10) days after it has received from Purchaser the duly executed and acknowledged Transferee Questionnaire, submit (x) such Transferee Questionnaire, (y) the New York State Real Property Transfer Gains Tax Questionnaire Transferor (TP-580) or any successor questionnaire or replacement form thereof with all relevant information completed thereon and duly executed by Seller and acknowledged (hereinafter called the "Transferor Questionnaire"), and (z) all other documentation required in connection therewith. Seller shall pay when due any Gains Tax, penalties, interest and additions to the tax imposed pursuant to Article 31-B of the Tax Law of the State of New York or any successor statute thereto -12- (hereinafter called the "Gains Law") on the sale of the Property by Seller to Purchaser as set forth herein. Seller shall, concurrently with its delivery of same to the State of New York Department of Taxation and Finance (the "Tax Department"), deliver to Purchaser a copy of Seller's transmittal letter enclosing the documentation delivered by Seller to the Tax Department in connection with the transaction which is the subject of this Agreement. Seller shall, promptly after its receipt of same from the Tax Department, deliver to Purchaser copies of any documentation received by Seller from the Tax Department in connection with the transaction which is the subject of this Agreement; provided, however, if Seller receives the original New York State Real Property Transfer Gains Tax Tentative Assessment and Return, Transferee Copy (TP-582.2) or any successor form thereto from the Tax Department, then Seller shall, promptly after its receipt of same, deliver to Purchaser the original of such document. Seller shall deliver to the Title Company at the Closing the original New York State Real Property Transfer Gains Tax Tentative Assessment and Return, Transferor Copy (TP-582) or any successor form thereto executed by Seller and acknowledged. If a tax is stated as due in the New York State Real Property Transfer Gains Tax Tentative Assessment and Return (TP-582) or any -13- successor form thereto (hereinafter called the "Return"), then at the Closing Seller shall deliver to the Title Company a certified check payable to the order of the Tax Department for the full amount of the tax due as set forth therein (or, if greater, the amount shown on the New York State Real Property Transfer Gains Tax Supplemental Return (TP-583) or any successor form thereto (hereinafter called the "Supplemental Return")), and, if the amount of consideration (as defined for purposes of the Gains Law) payable to Seller for the Property has changed from the amount stated on the Transferee Questionnaire and Transferor Questionnaire, then Seller shall also deliver to the Title Company at Closing a completed Supplemental Return duly executed by Seller and acknowledged. Seller shall pay the full amount of the Gains Tax stated on the Return or Supplemental Return (if greater) at Closing and shall not be entitled to elect installment payment thereof. Seller further agrees to pay any additional Gains Tax, interest, penalties and additions to the tax that may be assessed after the Closing pursuant to the Gains Law in connection with the transaction which is the subject of this Agreement and further agrees to indemnify and hold Purchaser harmless from and against any loss or liability including, but not limited to, attorneys' fees, resulting from Seller's failure to -14- pay any tax, interest, penalty or addition to the tax alleged to be due pursuant to the Gains Law in connection with the transaction which is the subject of this Agreement. Seller shall not assert before any taxing authority, including but not limited to the Tax Department, that Seller received as consideration an amount less than the amount reported as consideration payable by Purchaser on the Transferee Questionnaire (or, if greater, the adjusted amount of consideration utilized in computing Gains Tax due pursuant to the Return or the Supplemental Return, if applicable), and Seller hereby indemnifies and holds Purchaser harmless from and against any loss or liability resulting from Seller's breach of the foregoing provisions of this sentence. 7.2. State and City Transfer Taxes. Seller and Purchaser shall comply with all filing and procedural requirements applicable under, and Seller shall pay all taxes, together with all interest, penalties and additions to the tax applicable thereto, payable in connection with the sale of the Property pursuant to, (i) Article 31 of the Tax Law of the State of New York or any successor statute or statutes thereto, and (ii) Title 11, Chapter 21 of the Administrative Code of the City of New York or any successor statute or statutes thereto. Such taxes (to the extent reflected as payable in returns relating thereto executed by Seller and Purchaser at Closing) -15- shall be paid by Seller's delivery to the Title Company of certified checks payable to the applicable taxing authority at Closing. Any additional amounts of such taxes, interest, penalties or additions to the tax which are, subsequent to the Closing, determined to be due or assessed shall be paid by Seller as and when the same are due and payable or are assessed. 7.3. Indemnity. Seller hereby agrees to indemnify and hold Purchaser harmless from and against any loss or liability resulting from Seller's failure to pay when due any tax, together with any interest, penalties, or additions to the tax alleged to be due in connection with the sale of the Property pursuant to (i) Article 31-B of the Tax Law of the State of New York or any successor statute or statutes thereto, (ii) Article 31 of the Tax Law of the State of New York or any successor statute or statutes thereto, and (iii) Title 11, Chapter 21 of the Administrative Code of the City of New York or any successor statute or statutes thereto. Seller shall defend any proceedings thereunder relating to the conveyance of the Property to Purchaser at Seller's sole cost and expense, and Purchaser shall reasonably cooperate with Seller in connection therewith at no cost to Purchaser. Seller shall also reimburse and indemnify Purchaser for all costs and expenses incurred by Purchaser in defending or prosecuting any such proceedings by reason of Seller's failure to do so with reasonable diligence. -16- 7.4. Survival. The provisions of this Article VII shall survive the Closing. ARTICLE VIII REPRESENTATIONS, WARRANTIES AND COVENANTS 8.1. In addition to the representations, warranties and covenants contained in other Articles of this Agreement, Seller hereby makes the following representations, warranties and covenants which are true as of the date hereof, will be true at Closing and, except with respect to subsection 8.1.1, shall survive the Closing: 8.1.1. Seller has good, insurable and marketable title to the Property, free and clear of all liens and encumbrances except the Permitted Encumbrances. 8.1.2. Except for the Lease, and any subleases or occupancy agreements granted by the tenant under the Lease, there are no leases or occupancy agreements affecting the Property. 8.1.3. There are no service, maintenance, supply or management agreements affecting the Land or Building as of the date hereof entered into by Seller or any predecessor-in-interest of Seller. -17- 8.1.4. Seller will have no employees engaged in work at the Property following the Closing. 8.1.5. There shall be no taxes, assessments (including assessments which may be paid in installments), College Point Improvement Fund Payments, payments to any Business Improvement District or any other amounts whatsoever which are due and payable or which are to become due and payable or a lien, or both, on the Property with respect to any period of time prior to the Closing Date, except for such amounts that the tenant under the Lease is obligated to pay pursuant to the terms of the Lease. 8.1.6. Where copies of any documents have been delivered by Seller to Purchaser pursuant to this Agreement, such copies: (i) are exact copies of the originals of said documents, as executed and delivered by all of the parties thereto; (ii) constitute, in each case, the entire agreement between the parties thereto with respect to the subject matter thereof, and the -18- original instruments in the form delivered by Seller to Purchaser are now in full force and effect, are valid and enforceable in accordance with their respective terms and no party thereto is in default and no claim of default by any party has been made or is now pending and there does not now exist any default which, after either the giving of notice or the passing of time, or both, will or may constitute a default, or would excuse performance by any party thereto; and (iii) have not been changed, modified or amended except for amendments, if any, specifically referred to therein, photocopies of which have been delivered by Seller to Purchaser. 8.1.7. Seller has no knowledge of any pending or threatened condemnation or similar proceeding affecting the Property or any portion thereof, or pending public improvements in or adjoining the Property which will adversely affect the Property; provided, however, that Seller shall notify Purchaser of any such proceeding that it has knowledge of, without regard to whether such proceeding might have an adverse effect on the Property. -19- 8.1.8. Seller has no knowledge of any pending or threatened legal action of any kind or character whatsoever affecting Seller or the Property which will adversely affect the Property upon or subsequent to the Closing. 8.1.9. Each person executing and delivering this Agreement and all documents to be executed and delivered on behalf of Seller in regard to the consummation of the transaction which is the subject of this Agreement represents to Purchaser that he or she has due and proper authority to execute and deliver same. Seller has the full right, power and authority to sell and convey the Property to Purchaser as provided in this Agreement and to carry out its obligations set forth in this Agreement. The consummation by Seller of the transaction which is the subject of this Agreement will not conflict with or result in a breach of any of the terms of any agreement or instrument to which Seller is a party or by which Seller is bound or constitute a default thereunder, and Seller has obtained any and all required authorizations and approvals of the execution and delivery of this Agreement, the transaction which is the subject of this Agreement, and all documents -20- referred to in this Agreement. No other party has any right to purchase the Property, or any part thereof. 8.1.10. Intentionally Omitted 8.1.11. No representation or warranty by Seller in this Agreement knowingly omits or knowingly will omit to state a material fact necessary to make any representation or warranty not misleading. 8.1.12. Seller is not a "foreign person" as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (hereinafter called the "Code"). In the event that Seller is a "foreign person", or in the event that Seller fails or refuses to deliver the FIRPTA Certificate, or in the event that Purchaser receives notice from any "transferor's agent" or "transferee's agent" (as such terms are defined in Section 1445(d) of the Code), or Purchaser has actual knowledge that, the FIRPTA Certificate is false, Purchaser shall deduct and withhold from the Purchase Price a tax equal to 10% thereof, as required by Section 1445 of the Code. In the event of any such withholding, the Closing hereunder shall not be otherwise affected, Purchaser -21- shall remit such amount to and file the required form with the Internal Revenue Service, and Seller, in the event of any claimed over-withholding, (i) shall be limited solely to an action against the Internal Revenue Service for a refund, and (ii) hereby waives any right of action against Purchaser on account of such withholding. 8.1.13. Seller has not done or suffered anything whereby the Property has been transferred or encumbered in any way whatsoever except for the Permitted Encumbrances. 8.1.14. Intentionally Omitted 8.1.15. No air or development rights with respect to the Property have been transferred or sold, and no contract to sell such air or development rights is outstanding, other than this Agreement. 8.1.16. Seller is not now the subject of any existing, pending, threatened or contemplated bankruptcy, insolvency or other debtor's relief proceeding. -22- ARTICLE IX CLOSING ADJUSTMENTS 9.1. The following are to be adjusted, if feasible, at the Closing, as of 11:59 p.m. of the day immediately preceding the Closing Date (the "Adjustment Date"). If the net effect of the adjustment of the following is in Seller's favor, then Purchaser shall pay the net amount thereof to Seller at the Closing. If the net effect of the adjustment of the following is in Purchaser's favor, then Purchaser shall be entitled to a credit against the Purchase Price at the Closing. 9.1.1. The following are to be adjusted in favor of Seller: (a) any unpaid Rental (as that term is defined in and computed in accordance with the provisions of the Lease); (b) the EDC Reimbursement Amount or the EDC Amortized Reimbursement Amount, if any (as such terms are defined in and computed in accordance with the provisions of the Lease); and -23- (c) any and all other amounts due and payable to Seller by the tenant under the Lease through and including the Adjustment Date pursuant to the provisions of the Lease. 9.1.2. The following are to be adjusted in favor of Purchaser: (a) any amounts paid as Rental under the Lease which are in excess of the aggregate amount of Rental payable under the Lease for the period ending on the Adjustment Date; (b) the amount of any and all taxes, fees or other charges whatsoever that Purchaser may be required to pay, or which may become a lien on the Property if not paid by Seller, with respect to the consummation of the transactions contemplated by this Agreement, without regard to whether such taxes, fees or other charges may customarily or by law be payable by a purchaser of property from a municipal or other governmental entity; and (c) any and all other amounts payable to the tenant under the Lease pursuant to the provisions of -24- Funding Agreements #1, #2 or #3 or any provision of the Lease including, without limitation, any provision of the Lease providing for an offset against the Rental due and payable thereunder, it being expressly understood and agreed by Seller and Purchaser that the expiration or termination of the Lease shall not in any way prejudice or diminish Purchaser's right to a credit against the Purchase Price in the full amount that the tenant under the Lease would have been entitled to offset against Rental but for the expiration or termination of the Lease. 9.2. The parties hereto shall endeavor to prepare a schedule of adjustments no less than five (5) days prior to the Closing. 9.3. The parties shall correct any errors in the adjustments as soon after the Closing as amounts are finally determined. The parties shall enter into the Post-Closing Adjustment Letter at the Closing in the form of Exhibit D annexed hereto. ARTICLE X COMMISSIONS 10.1. Seller warrants and represents to Purchaser that Seller has had no dealings with any broker in connection -25- with this transaction and agrees to indemnify and hold Purchaser harmless from and against any loss or liability resulting from any claims of any broker alleging any dealings with Seller. Purchaser warrants and represents to Seller that Purchaser has had no dealings with any broker in connection with this transaction and agrees to indemnify and hold Seller harmless from and against any loss or liability resulting from any claims of any broker alleging any dealings with Purchaser. The provisions of this Section shall survive the Closing. ARTICLE XI OPERATIONS PRIOR TO CLOSING 11.1. Seller covenants and agrees that between the date hereof and the Closing Date, Seller shall: 11.1.1. Not enter into any leases or occupancy agreements with respect to the Property. 11.1.2. Not create (or agree to create) any exception to or covenant, restriction, easement or other lien on or affecting the Property. 11.1.3. Not grant or transfer or permit the grant or transfer of any interest in the Property including any air and development rights. -26- 11.1.4. Promptly advise Purchaser of any litigation or governmental proceeding to which Seller becomes a party affecting the Property. It shall be a condition precedent to Purchaser's obligation to accept title, that there shall be no such litigation or proceeding pending at Closing having a potential adverse effect upon the Property or Seller's ability to convey the Property to Purchaser. ARTICLE XII RISK OF LOSS 12.1. The risk of loss or damage to the Property by fire or other casualty shall be borne by Purchaser. In the event that damage, loss or destruction of the Property or any part thereof, by fire or other casualty, occurs prior to the Closing, Purchaser shall nonetheless be required to consummate the purchase of the Property without any credit against the Purchase Price. 12.2. If, prior to Closing, any governmental authority or other entity having condemnation authority shall institute an eminent domain proceeding or take any steps preliminary thereto (including the giving of any direct or indirect notice of intent to institute such proceedings) with regard to the Land or Improvements, and the same is not -27- dismissed beyond appeal on or before ten (10) days prior to the Closing Date set forth in this Agreement, Purchaser shall be entitled to terminate this Agreement in which event, the applicable provisions of Article 21 of the Lease shall govern. ARTICLE XIII CONDITIONS TO CLOSING 13.1. It shall be a condition to Purchaser's obligation to close the transaction which is the subject of this Agreement (subject to Purchaser's option, in its sole discretion, to waive one or more of the following) that each of Seller's (i) representations and warranties set forth in this Agreement be true as of the Closing, and (ii) covenants set forth in this Agreement be satisfied as of the Closing. ARTICLE XIV TERMINATION AND REMEDIES 14.1. In the event that any of Seller's representations or warranties contained in this Agreement are untrue or if Seller shall have failed to have performed any of the covenants or agreements contained in this Agreement which are to be performed by Seller, on or before the date set forth in this Agreement for the performance thereof, or if any of the conditions precedent to Purchaser's obligation to consummate the transaction which is the subject of this Agreement shall -28- have failed to occur, Purchaser may, at its option, elect any one or more of the following remedies: (i) rescind this Agreement and terminate the Lease; (ii) rescind this Agreement and permit the Lease to continue in full force and effect in accordance with the applicable provisions of Article 21 thereof; (iii) rescind this Agreement and extend the term of the Lease in accordance with the applicable provisions of Article 21 thereof; (iv) seek to enforce specific performance of this Agreement and reimbursement of all of Purchaser's expenses including, without limitation, reasonable attorney's fees, in connection with any such action for specific performance; (v) extend the term of the Lease in accordance with the applicable provisions of Article 21 thereof, and seek specific performance of this Agreement and reimbursement of all of Purchaser's -29- expenses including, without limitation, reasonable attorney's fees, in connection with any such action for specific performance; or (vi) consummate the transaction provided for herein in accordance with the applicable provisions of Article 5 hereof. It is expressly understood and agreed by Seller and Purchaser that the failure by Purchaser to rescind or terminate this Agreement for any reason pursuant to this Section shall in no way waive, alter or modify any rights of Purchaser in regard to the representations, warranties, covenants and agreements of Seller set forth in this Agreement. 14.2. If the purchase and sale which is the subject of this Agreement is not consummated because of Purchaser's default, Seller's sole remedy shall be reimbursement by Purchaser for Seller's actual costs and expenses reasonably incurred in connection with the proposed purchase (including, without limitation, legal costs, fees and disbursements and expenses of deed preparation) whether incurred out-of-pocket or in the form of staff time, Seller hereby specifically waiving any and all rights which it may have to any other damages or specific performance of Purchaser's default under this Agreement. -30- ARTICLE XV NOTICES 15.1. Except as otherwise provided in this Agreement, any and all notices, elections, demands, requests and responses thereto permitted or required to be given under this Agreement shall be in writing, signed by the party giving the same or by its attorneys, and shall be deemed to have been properly given and shall be deemed effective upon being (i) personally delivered, or (ii) delivered by an express overnight delivery service with receipt for delivery, or (iii) deposited in the United States mail, postage prepaid, certified with return receipt requested, to the other party at the address of such other party set forth below or at such other address within the continental United States as such other party may designate by notice specifically designated as a notice of change of address and given in accordance herewith; provided, however, that the time period in which a response to any such notice, election, demand or request must be given shall commence on the date of receipt thereof. Personal delivery to a party or to any officer, partner, agent or employee of such party at said address shall constitute receipt. Rejection or other refusal to accept or inability to deliver because of changed address of which no notice has been received shall also constitute receipt. Any such notice, election, demand, request or response shall be addressed as follows: -31- (i) To Seller: The City of New York c/o New York City Economic Development Corporation 110 William Street New York, New York 10038 Attention: Lease Administration with a copy to be given simultaneously to: EDC General Counsel New York City Economic Development Corporation 110 William Street New York, New York 10038 and to: The New York City Law Department 100 Church Street New York, New York 10007 Attention: Chief Economic Development Division (ii) To Purchaser: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: * and to: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: General Counsel * To be inserted by Purchaser prior to delivery of this Agreement to Seller. Purchaser may also change the addresses for notices and copies thereof prior to such delivery. -32- with a copy to be given simultaneously to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin D. Polevoy, Esq. ARTICLE XVI INTENTIONALLY OMITTED ARTICLE XVII MISCELLANEOUS 17.1. This Agreement cannot be changed, modified, discharged or terminated by any oral agreement or any other agreement and there cannot be any waiver of the warranties, representations and covenants expressly contained in this Agreement unless the same is in writing and signed by the party against whom enforcement of the change, modification, discharge or termination is sought. 17.2. This Agreement and the Exhibits annexed hereto contain the entire agreement between the parties with respect to the subject matter hereof, and no promise, representation, warranty or covenant not included in this -33- Agreement or any such Exhibits has been or is relied upon by either party hereto. 17.3. The Article and Exhibit headings herein are for convenience only, and are not to be used in determining the meaning of this Agreement or any part hereof. 17.4. This Agreement and its interpretation and enforcement shall be governed by the laws of the State of New York. 17.5. This Agreement shall be binding on, and the benefits hereof shall inure to, the successors and assigns of the parties hereto. 17.6. All Exhibits which are annexed to this Agreement are part of this Agreement and are incorporated herein by reference. 17.7. The provisions of this Agreement are for the sole benefit of the parties to this Agreement and their successors and assigns and shall not give rise to any rights by or on behalf of anyone other than such parties. -34- 17.8. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing this Agreement to be drafted. 17.9. This Agreement may be executed in any number of counterparts, each of which shall, when executed, be deemed to be an original and all of which shall be deemed to be one and the same instrument. 17.10. In the event that any litigation arises under this Agreement, Purchaser shall be entitled to recover, as a part of its judgment or settlement, reasonable attorneys' fees incurred in litigation or settlement discussions to the extent that such attorneys' fees are incurred after Seller has failed to perform its obligations hereunder and Purchaser has made a demand on Seller to cure such failure. 17.11. [Intentionally Omitted] 17.12. Seller will, whenever and as often as it shall be reasonably requested so to do by Purchaser, and Purchaser will, whenever and as often as it shall be reasonably requested so to do by Seller, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all conveyances, assignments, correction instruments and all -35- other instruments and documents as may be reasonably necessary in order to complete the transaction which is the subject of this Agreement and to carry out the intent and purposes of this Agreement. All such instruments and documents shall be reasonably satisfactory to the respective attorneys for Purchaser and Seller. The provisions of this Section shall survive the Closing. IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the date first above written. Seller: By: ------------------------------- Purchaser: By: ------------------------------- -36- EXHIBIT A LAND ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING IN THE BOROUGH AND COUNTY OF QUEENS, CITY AND STATE OF NEW YORK, BOUNDED AND DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY DISTANT 1750.00 FEET SOUTHERLY FROM THE CORNER FORMED BY THE INTERSECTION OF THE SOUTHERLY SIDE OF 20TH AVENUE AND THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY; THENCE SOUTHERLY ALONG THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY, 2,433.07 FEET TO A POINT OF CURVATURE; THENCE ALONG THE ARC OF A CURVE HAVING A RADIUS OF 25.00 FEET AND CONNECTING THE EASTERLY SIDE OF LINDEN PLACE WITH THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY, A DISTANCE OF 48.20 FEET; THENCE NORTHERLY ALONG THE EASTERLY SIDE OF LINDEN PLACE, 395.44 FEET; THENCE EASTERLY AT RIGHT ANGLES WITH THE EASTERLY SIDE OF LINDEN PLACE 235.94 FEET; THENCE NORTHERLY AT RIGHT ANGLES WITH THE PREVIOUS COURSE 87.58 FEET; THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 93 DEGREES 05 MINUTES 30 SECONDS WITH THE PREVIOUS COURSE, 335.95 FEET; THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 264 DEGREES 30 MINUTES 52 SECONDS WITH THE PREVIOUS COURSE, 752.41 FEET; THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 129 DEGREES 24 MINUTES 22 SECONDS WITH THE PREVIOUS COURSE, 1118.19 FEET; THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 94 DEGREES 50 MINUTES 44 SECONDS WITH THE PREVIOUS COURSE, 652.21 FEET TO THE POINT OR PLACE OF BEGINNING. FOR INFORMATION ONLY: BLOCK 4183 PART OF LOT 1 BLOCK 4242 PART OF LOT 1 BLOCK 4243 PART OF LOT 1 BLOCK 4280 PART OF LOT 1 BLOCK 4281 PART OF LOT 1 BLOCK 4282 LOT 1 BLOCK 4283 LOT 1 BLOCK 4284 LOT 1 BLOCK 4306 PART OF LOT 1 AND ALL OF LOT 44 BLOCK 4307 LOT 1 AND PART OF LOT 4 BLOCK 4308 LOTS 1 AND 36 BLOCK 4310 LOT 32 BLOCK 4336 LOT 35 AND PART OF LOT 50 BLOCK 4337 LOT 62 AND PART OF LOT 76 BLOCK 4339 LOT 46 PLUS DEMAPPED PORTIONS OF 28TH AVENUE, 25TH AVENUE, 138TH STREET AND 139TH STREET AS IDENTIFIED ON THE TAX MAP OF THE BOROUGH OF QUEENS, IN THE COUNTY OF QUEENS, CITY AND STATE OF NEW YORK. -2- EXHIBIT B ASSIGNMENT OF LEASE KNOW ALL MEN BY THESE PRESENTS that , having an office (the "Assignor"), in consideration of Ten ($10.00) Dollars and other good and valuable consideration in hand paid, by , having an office at (the "Assignee"), the receipt and sufficiency whereof is hereby acknowledged, hereby assigns unto Assignee all of Assignor's right, title and interest in and to that certain Agreement of Lease dated as of , 1993 between The City of New York and New York City Economic Development Corporation with respect to Block , Lot , on the Tax Map of the Borough of Queens, County of Queens, City and State of New York (as amended, the "Lease"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, from and after the date hereof, subject to the terms, covenants, conditions and provisions contained in the Lease. Assignee hereby assumes the performance of all of the terms, covenants and conditions of the Lease on Assignor's part to be performed thereunder from and after the date hereof. Assignor hereby agrees to indemnify and hold Assignee harmless from and against any and all loss, cost and expense (including reasonable attorneys' fees), damage and liability incurred by Assignee as a result of claims brought against Assignee as Assignor's successor in interest to the Lease relating to causes of action accruing prior to the date hereof arising from a breach of the Lease and the obligations of the lessor thereunder. IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the day of . , Assignor By: ------------------------------------------- , Assignee By: ------------------------------------------- EXHIBIT C BILL OF SALE KNOW ALL MEN BY THESE PRESENTS that having an office at ("Seller") for and in consideration of the sum of Ten ($10.00) Dollars and other good and valuable consideration to it in hand paid, at or before the ensealing and delivery of these presents by having an office at ("Purchaser"), the receipt and sufficiency whereof is hereby acknowledged, has transferred and conveyed and by these presents does release, transfer and convey unto the Purchaser, its successors and assigns, all of Seller's right, title, and interest in and to all fixtures, machinery and equipment to the extent same constitute personal property, all raw materials, work and materials in process, stock in trade, inventory and other equipment and other tangible personal property, and all other tangible personal property owned by Seller, attached or appurtenant to, or used in connection with the occupancy and operation of those certain premises known as Block , Lot , on the Tax Map of the Borough of Queens, County of Queens, City and State of New York (the "Premises"). All of the foregoing is herein collectively called the "Personal Property." TO HAVE AND TO HOLD, the same unto Purchaser, its successors and assigns, forever, Seller does hereby bind itself and its successors to forever warrant and defend the title to the Personal Property unto Purchaser, its successors and assigns, against every person whomsoever lawfully claiming, or to claim the same, or any part thereof. This transfer is made as part of the transfer of the Premises to Purchaser and both parties agree and acknowledge that no part of the consideration is allocated to the Personal Property. IN WITNESS WHEREOF, Seller has executed this instrument as of the day of . ------------------------------------- EXHIBIT D POST-CLOSING ADJUSTMENT LETTER [Date] [Purchaser] Re: Block , Lot , on the Tax Map of the Borough of Queens, County of Queens, City and State of New York (the "Premises") Gentlemen: In connection with the closing adjustments made pursuant to the transfer of title of the Premises by the undersigned to you, a copy of which closing adjustments is annexed hereto, it is hereby agreed that if any arithmetic calculations shall prove to be erroneous, or any adjustment shall be omitted, same shall be adjusted between you and the undersigned after the closing. Any such adjustment shall be paid promptly after same is ascertained. The obligation to correct any erroneous adjustment or to make any additional adjustment in accordance with the above shall survive the closing. Very truly yours, [Seller] AGREED TO: By: ----------------------- [Purchaser] By: ----------------------- EXHIBIT E Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by [name of transferor], the undersigned hereby certifies the following on behalf of [name of transferor]: 1. [Name of transferor] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. [Name of transferor]'s U.S. employer identification number is , and 3. [Name of transferor]'s office address is . [Name of transferor] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of [name of transferor]. Dated: - ---------------------------------- [Title] EXHIBIT "F" PERMITTED ENCUMBRANCES 1. Such state of facts as an accurate survey may show provided the same does not render title unmarketable or uninsurable without excess premium; 2. Zoning regulations affecting said premises; 3. Any liens, encumbrances or charges made, created or suffered after December 15, 1993 by reason other than the acts, negligence, misconduct or failure to act of Grantor or New York City Economic Development Corporation or any successors thereto. 4. The Second Amended Urban Renewal Plan for the College Point II Industrial Development Project, dated February 1989, with (a) all amendments and modifications thereto from time to time up to and including December 15, 1993 (but not subsequent to December 15, 1993, except as set forth in clause (b) of this sentence), and (b) any amendments or modifications thereto after December 15, 1993 with respect only to landscaping, compliance with which would not require Grantee to incur a material cost. 5. The 25 foot wide permanent slope easement acquired by an order dated January 2, 1962 vesting title in The City of New York pursuant to condemnation proceedings entitled, "In The Matter of An Application By The City of New York" relative to acquiring title to a permanent and perpetual slope easement in connection with the construction of the Whitestone Expressway, as shown on The City of New York's Alteration Map Number 4219, dated July 18, 1961, adopted September 22, 1961, which easement affects a portion of Blocks 4336, 4337, 4339 and 4308 of the Tax Maps of the City of New York, as shown on Survey No. 67832 made by Robert A. Haynes, dated August 28, 1990, and last redated December 14, 1993. EXHIBIT G --------- DEED ---- THIS INDENTURE, dated the day of , in the year between THE CITY OF NEW YORK, a municipal corporation with an office at City Hall, New York, New York 10007, hereinafter designated as the Grantor, and THE NEW YORK TIMES COMPANY, a New York State corporation, having its principal office at 229 West 43rd Street, New York, New York 10036, hereinafter designated as the Grantee. WHEREAS, The Mayor of the City of New York, on the 13th day of January, 1993, as clarified on December 15, 1993, authorized the sale of the premises hereinafter described. WHEREAS, the Queens Borough Board by Resolution adopted on November 16, 1992, as amended on December 14, 1993, approved the transfer of title therein. NOW, THEREFORE, WITNESSETH: That the Grantor, in consideration of the sum of TEN AND 00/100 ($10.00) DOLLARS, lawful money of the United States, and other valuable consideration, paid by the Grantee, does hereby grant and release unto Grantee, its successors and assigns forever: ALL that certain lot, piece or parcel of land, situate, lying and being in the Borough of Queens, City and State of New York, being known and designated as Block 4282, Lot 100*, on the Tax Map for the Borough of Queens, as more particularly described in Exhibit A annexed hereto and made a part hereof; TOGETHER with all buildings and improvements thereon -------------------- *This block and lot number has been tentatively assigned to the premises and should be confirmed at the time of the conveyance. 1 erected; TOGETHER with all right, title and interest, if any, of the Grantor in and to any streets and roads abutting the above described premises to the center lines thereof; TOGETHER with the appurtenances and all the estate and rights of the Grantor in and to said premises; RESERVING UNTO Grantor a permanent easement, approximately 30 feet wide, running along the portion of the described premises fronting on the Whitestone Expressway Service Road, more fully described in Exhibit C attached hereto and made a part hereof. TO HAVE AND TO HOLD said premises herein granted unto the Grantee, the successors and assigns of the Grantee forever. Subject to: 1. The trust fund provisions of Section 13 of the Lien Law; and 2. Those matters affecting title set forth in Exhibit B attached hereto. In the event of acquisition by The City of New York (the "City") by condemnation or otherwise of any part or portion of the above described premises lying within the bed of any street, avenue, expressway, parkway, park, public place or catchbasin, as shown on the present City Map, the Grantee and the heirs or successors and assigns of the Grantee shall only be entitled as compensation for such acquisition by the City to the amount of One Dollar ($1.00) and shall not be entitled to compensation for any buildings or structures erected thereon which may lie within 2 the bed or lines of the street, avenue, parkway, expressway, park, public place or catchbasin so laid out and acquired. This covenant shall run with the land and shall continue until the City Map is amended or changed to eliminate from within the bed or lines of any street, avenue, parkway, expressway, park, public place or catchbasin, any such part or portion of the premises and no longer. Grantee covenants, on behalf of itself, its successors and assigns, to use the premises in strict accordance with The Second Amended Urban Renewal Plan for the College Point II Industrial Development Project, dated February 1989 (the "Plan"), with (a) all amendments and modifications thereto from time to time up to and including December 15, 1993 (but not subsequent to December 15, 1993, except as set forth in clause (b) of this sentence), and (b) any amendments or modifications thereto after December 15, 1993, with respect only to landscaping, compliance with which would not require Grantee to incur a material cost. This covenant shall survive the delivery of this deed and shall run with the land and continue in effect until said Plan has expired or is no longer applicable to the premises. Commencing on the January 1, April 1, July 1 or October 1 first occurring after the date of this deed and thereafter on each January 1, April 1, July 1, and October 1, Grantee, its successors or assigns, shall pay to Grantor or its successor or assign or designee, a sum equal to one-eighth of one percent (.125%) of the assessed value of the land, and all improvements 3 thereon, as such assessed value is determined by the City's Department of Finance for purposes of real property taxation. Such sum, together with other similar sums paid by owners or occupants of similarly burdened property within College Point Industrial Park, shall be held by New York City Economic Development Corporation ("EDC"), or its successor or assign or designee, in a separate fund, known as the "College Point Improvement Fund" (the "Fund"), and shall be used by EDC solely for construction, maintenance and improvement of (1) roads, sewers, drainage systems, buffer strips, utilities and sidewalks within College Point Industrial Park, and (2) other facilities of general benefit to College Point Industrial Park or portions thereof, as determined by EDC or its successor or assign or designee. The obligation to make such payments shall be a covenant running with the land, enforceable by EDC, or its successor or assign or designee, and by other owners of property within College Point Industrial Park burdened by a similar obligation, and any such payment, once due, shall be a lien upon the premises. This obligation is for the benefit of the properties comprising College Point Industrial Park. If there shall be established within College Point Industrial Park, or a substantial portion thereof, a Business Improvement District ("BID") pursuant to Article 2-B of the General City Law or any successor statute thereto, then, if the premises are included within such BID and charges or assessments with regard to the BID must be or are paid in connection with the premises and other 4 properties in such BID burdened by an obligation similar to that set forth herein (the "Burdened Properties"), in an amount in the aggregate less than, equal to or greater than the amount that would be payable to EDC or its successor or assign or designee for the Fund in connection with the premises and Burdened Properties, then (i) Grantee shall pay such charges or assessments and (ii) Grantee shall be released and discharged from any obligation to make any further payments to the Fund with respect to any period from and after the date to which Grantee's first payment to such BID is applicable, and EDC shall promptly refund to Grantee any portion of any payments to the Fund made by Grantee which were applicable to any period beyond such date. If the funds received by the BID in connection with the premises and the Burdened Properties, in EDC's or its successor's or assign's or designee's reasonable determination, are devoted to similar purposes as those to which the Fund is devoted, then the district management association formed in connection with such BID shall succeed to EDC's or its successor's or assign's or designee's functions in connection with the Fund with regard to the area in such BID, and EDC or its successor or assign or designee shall transfer moneys within the Fund on hand and attributable to the properties included within such BID to such district management association. Grantee covenants that it will not restrict the use of the premises upon the basis of race, creed, color, sex or national origin. Grantee covenants that no covenant, lease, agreement, 5 conveyance or other instrument shall be effected or executed by Grantee or any of its heirs, successors or assigns, whereby the premises are restricted upon basis of race, creed, color, sex or national origin. The covenants of the Grantee hereunder shall run with the land and bind Grantee's successors and assigns. Grantor covenants that Grantor has not done or suffered anything whereby the premises have been encumbered in any way whatever, except as aforesaid. This Indenture is an absolute conveyance of title in effect as well as form and is not intended as a mortgage, deed of trust, trust conveyance or security of any kind. IN WITNESS WHEREOF, the Grantor and the Grantee have caused their corporate seals to be hereunto affixed and these presents to be signed by their duly authorized officers, the day and year first above written. THE CITY OF NEW YORK ATTEST: By: --------------------- ------------------------- CITY CLERK THE NEW YORK TIMES COMPANY APPROVED AS TO FORM: By: --------------------------- -------------------------- Acting Corporation Counsel c-cpip.dee 6 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me personally came , to me known, and known to me to be the Deputy Mayor/Deputy Commissioner, Department of General Services, Division of Real Property of the City of New York, and the same person who executed the foregoing instrument; and she/he acknowledged that she/he executed the foregoing instrument on behalf of the City of New York as said Deputy Mayor/Deputy Commissioner, pursuant to the authority vested in her/him. --------------------------------------- STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me personally came , with whom I am acquainted and known to me to be the City Clerk of the City of New York, who being by me duly sworn, deposed and said: that he resides at , , ; that he is the City Clerk of the City of New York, the municipal corporation described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed as provided by law; and that he signed his name thereto as City Clerk by like authority. ------------------------------------- STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this day of , 199 , before me personally came , to me known, who being by me duly sworn, did depose and say that he resides at ; that he is the of The New York Times Company, the corporation described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by such authority. --------------------------------------- EXHIBIT A PREMISES -------- ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING IN THE BOROUGH AND COUNTY OF QUEENS, CITY AND STATE OF NEW YORK, BOUNDED AND DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY DISTANT 1750.00 FEET SOUTHERLY FROM THE CORNER FORMED BY THE INTERSECTION OF THE SOUTHERLY SIDE OF 20TH AVENUE AND THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY; THENCE SOUTHERLY ALONG THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY, 2,433.07 FEET TO A POINT OF CURVATURE; THENCE ALONG THE ARC OF A CURVE HAVING A RADIUS OF 25.00 FEET AND CONNECTING THE EASTERLY SIDE OF LINDEN PLACE WITH THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY, A DISTANCE OF 48.20 FEET; THENCE NORTHERLY ALONG THE EASTERLY SIDE OF LINDEN PLACE, 395.44 FEET; THENCE EASTERLY AT RIGHT ANGLES WITH THE EASTERLY SIDE OF LINDEN PLACE 235.94 FEET; THENCE NORTHERLY AT RIGHT ANGLES WITH THE PREVIOUS COURSE 87.58 FEET; THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 93 DEGREES 05 MINUTES 30 SECONDS WITH THE PREVIOUS COURSE, 335.95 FEET; THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 264 DEGREES 30 MINUTES 52 SECONDS WITH THE PREVIOUS COURSE, 752.41 FEET; THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 129 DEGREES 24 MINUTES 22 SECONDS WITH THE PREVIOUS COURSE, 1118.19 FEET; THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 94 DEGREES 50 MINUTES 44 SECONDS WITH THE PREVIOUS COURSE, 652.21 FEET TO THE POINT OR PLACE OF BEGINNING. FOR INFORMATION ONLY: BLOCK 4183 PART OF LOT 1 BLOCK 4242 PART OF LOT 1 BLOCK 4243 PART OF LOT 1 BLOCK 4280 PART OF LOT 1 BLOCK 4281 PART OF LOT 1 BLOCK 4282 LOT 1 BLOCK 4283 LOT 1 BLOCK 4284 LOT 1 BLOCK 4306 PART OF LOT 1 AND ALL OF LOT 44 BLOCK 4307 LOT 1 AND PART OF LOT 4 BLOCK 4308 LOTS 1 AND 36 BLOCK 4310 LOT 32 BLOCK 4336 LOT 35 AND PART OF LOT 50 BLOCK 4337 LOT 62 AND PART OF LOT 76 BLOCK 4339 LOT 46 PLUS DEMAPPED PORTIONS OF 28TH AVENUE, 25TH AVENUE, 138TH STREET AND 139TH STREET AS IDENTIFIED ON THE TAX MAP OF THE BOROUGH OF QUEENS, IN THE COUNTY OF QUEENS, CITY AND STATE OF NEW YORK. -2- EXHIBIT B Permitted Title Exceptions -------------------------- 1. Such state of facts as an accurate survey may show provided the same does not render title unmarketable or uninsurable without excess premium; 2. Zoning regulations affecting said premises; 3. Any liens, encumbrances or charges made, created or suffered after December 15, 1993 by reason other than the acts, negligence, misconduct or failure to act of Grantor or New York City Economic Development Corporation or any successors thereto. 4. The Second Amended Urban Renewal Plan for the College Point II Industrial Development Project, dated February 1989, together with (a) all amendments and modifications thereto from time to time up to and including December 15, 1993 (but not subsequent to December 15, 1993, except as set forth in clause (b) of this sentence), and (b) any amendments or modifications thereto after December 15, 1993 with respect only to landscaping, compliance with which would not require Grantee to incur a material cost. 5. The 25 foot wide permanent slope easement acquired by an order dated January 2, 1962 vesting title in The City of New York pursuant to condemnation proceedings entitled, "In The Matter of An Application By The City of New York" relative to acquiring title to a permanent and perpetual slope easement in connection with the construction of the Whitestone Expressway, as shown on The City of New York's Alteration Map Number 4219, dated July 18, 1961, adopted September 22, 1961, which easement affects a portion of Blocks 4336, 4337, 4339 and 4308 of the Tax Maps of the City of New York, as shown on Survey No. 67832 made by Robert A. Haynes, dated August 28, 1990, and last redated December 14, 1993. EXHIBIT C --------- Proposed Sanitary Sewer Easement -------------------------------- Legal Description ----------------- Beginning at a point on the westerly side of Whitestone Expressway distant 1750.00 feet southerly from the corner formed by the intersection of the westerly side of Whitestone Expressway with the southerly side of 20th Avenue; running thence southerly along the westerly side of Whitestone Expressway 2433.07 feet to the northerly end of a curve; running thence along said curve, bearing to the right and having a radius of 25.00 feet a distance of 44.29 feet; running thence northerly along a line parallel with the westerly side of Whitestone Expressway 89.44 feet; running thence westerly, at right angles with the last described course, 10.00 feet; running thence northerly, at right angles to the last described course, 43.49 feet to a point of curve; running thence still northerly along the arc of a curve bearing to the left, having a radius of 3428.00 feet a distance of 16.51 feet; running thence easterly along a line radial with the last described course a distance of 10.00 feet; running thence northerly along the arc of a curve bearing to the left and having a radius of 3438.00 feet a distance of 1706.27 feet to a point of tangency; running thence still northerly and parallel with the westerly side of Whitestone Expressway 590.62 feet; running thence easterly along a line forming an exterior angle of 97 degrees, 18 minutes, 41 seconds with the last described course, 30.25 feet to the westerly side of Whitestone Expressway at the point or place of beginning.
Exhibit M-1 to Lease As a result of an Abandonment as described in Section 2.4(c)(i-iv) of Funding Agreement #1. Assumptions ----------- Funding Amount (per press)*: Repayment Assumptions: ---------------------------- ---------------------- Phase One (4 presses) $3,000,000 Term of Lease 25 Phase Two (5 presses) $2,250,000 Lesser of: 9.00% Phase Three (6 presses) $2,250,000 or City's borrowing cost(25 yr bonds) 9.00% Phase Four (7 presses) $3,750,000 Interest Calculation: Annual Phase Five (8 presses) $3,750,000 ---------- Total $15,000,000
Examples -------- Example #1: ----------- NYT commences Phases One/Two and Three in Year 3, and does not diligently pursue completion and Abandonment of the Project occurs pursuant to all of the terms and conditions of Funding Agreement #1. Phases One/Two/Three Grant: $7,500,000 Example #2: ----------- NYT commences and substantially completes Phase One Construction in Year 1 and receives capital grant of $3 million. NYT commences Phases Two and Three Construction in Year 3 and receives capital grant of $4.5 million. In Year 6, either NYT does not equip the facility or relocates substantially all employees to Stamford and Abandonment of the Project occurs pursuant to all of the terms and conditions of Funding Agreement #1. Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
ILLUSTRATIVE REIMBURSEMENT SCHEDULES Example #1 Example #2 ---------- ---------- Year Project Status Principal I Year Project Status Principal I Principal II ---- -------------- ----------- ---- -------------- ----------- ------------ End Year 1 Vacant 0 End Year 1 Const/Disbursmnt 3,000,000 2 Vacant 0 2 Const 3,000,000 3 Const/Disbursmnt 7,500,000 3 Const/Disbursmnt 3,000,000 4,500,000 4 Const 7,500,000 4 Construction 3,000,000 4,500,000 5 Const Ceases 7,500,000 5 Construction 3,000,000 4,500,000 6 Const Cease/Abdmnt 7,500,000 6 Relocation/Abdmnt 3,000,000 4,500,000 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25
Reimbursement Amount**: ----------------------- Example #1 ---------- Phase One/Two/Three Grant ($7.5 million) + (7.5 X 9% X 4 Yrs) = $10,200,000 Example #2 ---------- Phase One Grant ($3 million) + (3.0 X 9% X 6 Yrs) + Phase Two/Three Grant ($4.5 million) + ($4.5 X 9% X 4 yrs) = $10,740,000 Notes: ------ * Assumes full building size. Grant will be reduced in accordance with Section 2.2(c) of Funding Agreement #1 if building size is reduced. ** Assumes repayment to EDC in one payment; interest for multi-year repayment not included. (nytpay4l)
Exhibit M-2 to Lease As a result of an Abandonment as described in Section 2.4(c)(v) of Funding Agreement #1. Assumptions Funding Amount (per press)*: Repayment Assumptions: Phase One (4 presses) $3,000,000 Term of Lease 25 Phase Two (5 presses) $2,250,000 # Yrs before Abandonment: 5 Phase Three (6 presses) $2,250,000 Lesser of: 9.00% Phase Four (7 presses) $3,750,000 or City's borrowing cost(25 yr bonds) 9.00% Phase Five (8 presses) $3,750,000 Interest Calculation: Annual Total $15,000,000
Examples: Example #1 : NYT commences Phase One Construction in Year 1 and receives capital grant of $3 million. NYT commences Phases Two and Three Construction in Year 10 and receives capital grant of $4.5 million. NYT ceases operation in Year 14 and does not resume within 5 years and an Abandonment of the Project occurs pursuant to all the terms and conditions of Funding Agreement #1. Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000 Amortization Period: 25 Years Amortization Period: 15 Years Amount Amortized Annually: 120,000 Amount Amortized Annually: 300,000
Example #2 : NYT commences Phase One, Two and Three Construction in Year 1 and receives capital grant of $7.5 million. NYT operates for 5 years and ceases operation for 4 years before commencing construction of Phases Four/Five in Year 13. NYT commences operation but ceases operation in Year 19 and does not resume within 5 years and an Abandonment of the Project occurs pursuant to all the terms and conditions of Funding Agreement #1. Phase One Grant: $7,500,000 Phase Four/Five Grant: $7,500,000 Amortization Period: 25 Years Amortization Period: 13 Years Amount Amortized Annually: 300,000 Amount Amortized Annually: 576,923
ILLUSTRATIVE AMORTIZATION REIMBURSEMENT SCHEDULES Example #1 Example #2 - ---------- ---------- Year Project Status Principal I Principal II Year Project Status Principal I Principal II ---- -------------- ----------- ------------ ---- -------------- ----------- ------------ End Year 1 Const/Disbursmnt 3,000,000 End Year 1 Const/Disbursmnt 7,500,000 2 Const 2,880,000 2 Const 7,200,000 3 Const 2,760,000 3 Const 6,900,000 4 Operation 2,640,000 4 Operation 6,600,000 5 Operation 2,520,000 5 Operation 6,300,000 6 Operation 2,400,000 6 Operation 6,000,000 7 Operation 2,280,000 7 Operation 5,700,000 8 Operation 2,160,000 8 Operation 5,400,000 9 Operation 2,040,000 9 Cease Op-Yr 1 5,100,000 10 Operation/Cont 1,920,000 4,500,000 10 Cease Op-Yr 2 5,100,000 11 Operation/Cont 1,800,000 4,200,000 11 Cease Op-Yr 3 5,100,000 12 Operation 1,680,000 3,900,000 12 Cease Op-Yr 4 5,100,000 13 Operation 1,560,000 3,600,000 13 Const/Operation 4,800,000 7,500,000 14 Cease Op-Yr 1 1,440,000 3,300,000 14 Operation 4,500,000 6,923,077 15 Cease Op-Yr 2 1,440,000 3,300,000 15 Operation 4,200,000 6,346,154 16 Cease Op-Yr 3 1,440,000 3,300,000 16 Operation 3,900,000 5,769,231 17 Cease Op-Yr 4 1,440,000 3,300,000 17 Operation 3,600,000 5,192,308 18 Abndnmnt-Yr 5 1,440,000 3,300,000 18 Operation 3,300,000 4,615,385 19 19 Cease Op-Yr 1 3,000,000 4,038,462 20 20 Cease Op-Yr 2 3,000,000 4,038,462 21 21 Cease Op-Yr 3 3,000,000 4,038,462 22 22 Cease Op-Yr 4 3,000,000 4,038,462 23 23 Abndnmnt-Yr 5 3,000,000 4,038,462 24 24 25 25
Reimbursement Amount**: - -----------------------
Example #1 ---------- Amortized Reimbursement Amount = Phase One: $1,440,000+(($1,440,000 X 9%) X 18 Yrs) = $3,772,800 + Phase Two/Three: $3,300,000 +(($3,300,000 X 9%) X 9 Yrs) = $5,973,000 ---------- TOTAL = $9,745,800 Example #2 ---------- Amortized Reimbursement Amount=Phase One/Two/Three:$3,000,000+($3,000,000 X 9%)X23 Yrs= $9,210,000 + Phase Four/Five: $4,038,462+(($4,038,462 X 9%)X 11 Yrs) = $8,036,538 ---------- TOTAL = $17,246,538
Notes: ------ * Assumes full building or footprint size. Grant will be reduced in accordance with Section 2.2(c) of Funding Agreement #1 if building or footprint size, as the case may be, is reduced. ** Assumes repayment to EDC in one payment; no interest for multi-year repayment included. (nytpay3L) ASSIGNMENT AND ASSUMPTION OF LEASE WITH CONSENT NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, as Assignor, to THE NEW YORK TIMES COMPANY, as Assignee Affecting: Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1 Block 4280. p/o Lot 1 Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, Lot 44 and p/o Lot 1 Block 4307, Lot 1 and p/o Lot 4 Block 4308, Lot 1 and Lot 36 Block 4310, Lot 32 Block 4336, Lot 35 and p/o Lot 50 Block 4337, Lot 62 and p/o Lot 76 Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street Borough of Queens, New York Assigned Tentative Block 4282, Lot 100 for future identification Record and Return to: Frieda Dweck New York City Economic Development Corporation 110 William Street New York, New York 10038 THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("this Agreement") made as of December 15, 1993, between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION ("Assignor"), a local development corporation organized pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having an office at 110 William Street, New York, New York 10038, and THE NEW YORK TIMES COMPANY ("Assignee"), a corporation organized under the laws of the State of New York, having an address at 229 West 43rd Street, New York, N.Y. 10036. W I T N E S S E T H - - - - - - - - - - WHEREAS, The City of New York ("Landlord"), as landlord, and Assignor, as tenant, have, as of the date hereof, entered into a lease (the "Lease") under which Landlord demised and leased to Assignor, and Assignor hired and let from Landlord, certain premises identified as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, Lot 44 and p/o Lot 1, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street, on the Tax Map of the Borough of Queens, and assigned new tentative tax block and lot numbers Block 4282, Lot 100 for future identification,which premises are more particularly described in Attachment A hereto; and WHEREAS, a memorandum of the Lease is to be recorded simultaneously with the recording of this Agreement, in the Office of the City Register of Queens County, New York; and WHEREAS, Assignor desires to assign, and Assignee desires to acquire, all of Assignor's right, title and interest in and to the Lease as contemplated thereby; NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto, intending to be legally bound, covenant and agree as follows: 1. Assignor assigns, transfers and sets over to Assignee from and after the date hereof, all of Assignor's right, title and interest in and to the Lease, to have and to hold for all the rest, residue and remainder of the term of the Lease. 2. Assignor represents that: (i) there is no existing default under the Lease by Assignor; (ii) Assignor is the sole tenant under the Lease; (iii) the Lease is in full force and effect; (iv) all rent and other charges reserved in, or to be paid by the tenant under the Lease have been paid to the extent the same were payable as of the date hereof; (v) the Lease has not been assigned or modified or amended in any respect whatsoever; (vi) Assignor has full and lawful authority to assign the Lease; and (vii) the Lease embodies the entire agreement and understanding between the parties thereto with respect to the 2 premises demised thereunder. 3. Assignor agrees, at its sole cost, to do, execute, acknowledge and deliver or to cause to be done, executed acknowledged and delivered, all such acts and instruments as may from time to time be reasonably required by Assignee or Landlord to further assure and effectuate the assignment and transfer to Assignee of the interest of Assignor hereby assigned and transferred, or intended to be hereby assigned and transferred. 4. Assignee represents and warrants that it is a corporation organized under the laws of the State of New York. 5. Assignee assumes the obligations of the tenant under the Lease from and after the date hereof and Assignee agrees to perform and observe all of the covenants and conditions therein contained on Assignor's part to be performed and observed, and Assignee makes all of the representations and warranties binding upon the tenant under the Lease, with the same force and effect as if Assignee had executed the Lease originally as tenant. 6. Nothing contained herein shall be construed to modify, waive, impair or affect any of the covenants, agreements, terms, provisions or conditions contained in the Lease. 7. Assignee shall cause this instrument and a memorandum of the Lease to be recorded immediately at Assignee's expense in the Office of the City Register, Queens County, New York and also shall cause a copy of this instrument and such memorandum of the Lease, as recorded, to be transmitted to the General Counsel of Assignor. 8. This Agreement may not be changed, modified, discharged or terminated orally or in any other manner except by an agreement in writing signed by the parties hereto or their respective successors and permitted assigns. 9. All representations, warranties, grants, covenants, terms and provisions of this Agreement shall apply to, bind and inure to the benefit of the respective successors and, to the extent permitted under the Lease, the respective assigns, of Assignor, Assignee and Landlord. 10. Landlord hereby consents to the foregoing assignment of the Lease by Assignor to Assignee. 3 11. This Agreement is subject to the trust fund provisions of Section 13 of the Lien Law. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: /s/ Carl Weisbrod ------------------------------- Carl Weisbrod, President THE NEW YORK TIMES COMPANY By: /s/ Katharine P. Darrow ------------------------------- Name: Katharine P. Darrow Title: Senior Vice President THE CITY, BY SIGNING IN THE PLACE PROVIDED BELOW, CONSENTS TO THIS ASSIGNMENT, AS SET FORTH IN PARAGRAPH 10 HEREOF: THE CITY OF NEW YORK ATTEST: [SEAL] By: /s/ Barry F. Sullivan /s/ ------------------------------ ------------------------- City Clerk APPROVED AS TO FORM: By: /s/ ------------------------------ Acting Corporation Counsel 4 STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this 17th day of December 1993, before me personally came Carl Weisbrod, who being by me duly sworn, did depose and say that he resides at 110 William Street, New York, NY 10038, that he is the President of NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, the corporation described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the board of directors of said corporation; and that he signed his name thereto by like order. /s/ Concetta Miele ______________________________ Notary Public STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On the 17th day of December, 1993, before me personally came Katharine P. Darrow to me known, who, being by me duly sworn, did depose and say that she/he resides at 16 Garden Place, Brooklyn, NY; that she/he is the Senior Vice President of THE NEW YORK TIMES COMPANY, the corporation described in and which executed the foregoing instrument; that she/he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the board of directors of said corporation; and that she/he signed her/his name thereto by like order. /s/ Beverly Sturr ___________________________________ NOTARY PUBLIC 5 STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this 17th day of December 1993, before me personally came Barry F. Sullivan, who being by me duly sworn, did depose and say that he resides at c/o City Hall, New York, New York, that he is the Deputy Mayor of THE CITY OF NEW YORK and the same person who executed the foregoing instrument; and that he acknowledged that he signed his name thereto on behalf of The City of New York and pursuant to the authority vested in him. /s/ Concetta Miele ______________________________ Notary Public STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this 17th day of December 1993, before me personally came ________________________________________, to me known and known to me to be the City Clerk of The City of New York, the corporation described in and which executed the foregoing instrument, being by me duly sworn, did depose and say that she/he resides at 750 Kappock Street, Brooklyn, NY 10463; that she/he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed as provided by law; and that she/he signed her/his name thereto as City Clerk by like authority. /s/ Concetta Miele ______________________________ Notary Public 6 ATTACHMENT A LAND ---- The land consists of the following property, described in the survey performed by Robert A. Haynes, dated August 28, 1990, as follows: BEGINNING at a point on the westerly side of Whitestone Expressway distant 1750 feet southerly from the corner formed by the intersection of the southerly side of 20th Avenue and the westerly side of Whitestone Expressway; Thence southerly along the westerly side of Whitestone Expressway, 2,433.07 feet to a point of curvature; Thence along the arc of a curve having a radius of 25.00 feet and connecting the easterly side of Linden Place with the westerly side of Whitestone Expressway, a distance of 48.20 feet; Thence northerly along the easterly side of Linden Place, 395.44 feet; Thence easterly at right angles with the easterly side of Linden Place 235.94 feet; Thence northerly at right angles with the previous course 87.58 feet; Thence easterly along a course forming an interior angle of 93 degrees 05 minutes 30 seconds with the previous course, 335.95 feet; Thence northerly along a course forming an interior angle of 264 degrees 30 minutes 52 seconds with the previous course, 752.41 feet; Thence northerly along a course forming an interior angle of 129 degrees 24 minutes 22 seconds with the previous course, 1,118.19 feet; Thence easterly along a course forming an interior angle of 94 degrees 50 minutes 44 seconds with the previous course, 652.21 feet to the point or place of BEGINNING. The land is also identified by the following block and lot numbers: Block 4183 Lot p/o 1 Block 4242 Lot p/o 1 Block 4243 Lot p/o 1 Block 4280 Lot p/o 1 Block 4281 Lot p/o 1 Block 4282 Lot 1 Block 4283 Lot 1 Block 4284 Lot 1 Block 4306 Lots p/o 1 and 44 Block 4307 Lots 1 and p/o 4 Block 4308 Lot 1, Lot 36 Block 4310 Lot 32 Block 4336 Lots 35 and p/o 50 Block 4337 Lots 62 and p/o 76 Block 4339 Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street. The land has been assigned tentative tax block and lot numbers Block 4282, Lot 100, for future identification. - 8 - EX-10.9 7 FUNDING AGREEMENT #1 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION and THE NEW YORK TIMES COMPANY Dated as of December 15, 1993 Relative to site preparation work and foundation work required in connection with the construction of a printing facility by The New York Times Company in the College Point Industrial Park in the Borough of Queens TABLE OF CONTENTS Page PREAMBLE 1 DEFINITIONS 4 ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT - ----------- AND CONTRACT REQUIREMENTS Sec.1.1 General Provisions and Provisions Regarding Design and Construction 17 Sec.1.2 Procurement of Services and Goods 26 Sec.1.3 Liaison to EDC 31 ARTICLE TWO THE FUNDING - ----------- Sec.2.1 Agreement to Fund 32 Sec.2.2 Schedule for Disbursements 32 Sec.2.3 Disbursements 43 Sec.2.4 The Times's Abandonment of the Project 45 ARTICLE THREE THE TERM - ------------- Sec.3.1 Term 49 ARTICLE FOUR CONDITIONS FOR DISBURSEMENT - ------------ Sec.4.1 Initial Submissions by The Times 50 Sec.4.2 Documentation for Disbursements on Account of Eligible Costs 52 Sec.4.3 Direction of Submissions 56 ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND - ------------ GUARANTIES OF THE TIMES Sec.5.1 Organization; Standing 57 -i- Page Sec.5.2 Intentionally Omitted 57 Sec.5.3 Conflict, etc. under Other Documents 57 Sec.5.4 No Litigation 58 ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC - -------------- Sec.5A.1 Organization; Standing 59 Sec.5A.2 Due Authorization; Enforceable Obligations 59 ARTICLE SIX COVENANTS - ----------- Sec.6.1 Requisitions Update The Times's Representations 60 Sec.6.2 Compliance with Other Agreements and Law; Legal Status 60 Sec.6.3 Maintenance of and Compliance with Insurance Requirements 60 Sec.6.4 Maintenance of Office 61 Sec.6.5 Compliance with Applicable Law 61 Sec.6.6 Assignment 62 Sec.6.7 Maintenance of Records 63 Sec.6.8 Intentionally Omitted 63 Sec.6.9 Due Application of Funding Proceeds 63 Sec.6.10 Defects; Non-Conforming Work 64 Sec.6.11 Participation by Women and Minority Owned Businesses 64 Sec.6.12 No Liens 69 Sec.6.13 Intentionally Omitted 69 Sec.6.14 Intentionally Omitted 69 Sec.6.15 Intentionally Omitted 69 Sec.6.16 MacBride Principles 69 Sec.6.17 No Waiver of Compliance 70 -ii- Page ARTICLE SEVEN DEFAULT - ------------- Sec.7.1 Events of Default 71 Sec.7.2 Default Remedies; Exculpation 72 ARTICLE EIGHT NOTICES - ------------- Sec.8.1 Notices 76 Sec.8.2 Disbursement Submissions 77 ARTICLE NINE GENERAL CONDITIONS AND COVENANTS - ------------ Sec.9.1 Conflict of Interest 78 Sec.9.2 No Liability of Individuals 79 Sec.9.3 Anti-Boycott Provisions 79 Sec.9.4 Governing Law 80 Sec.9.5 Liability of EDC 80 Sec.9.6 Amendments 82 Sec.9.7 Successors and Assigns 82 Sec.9.8 Assignment of Funds 82 Sec.9.9 Counterparts 82 Sec.9.10 Interpretation 83 Sec.9.11 Indemnity 83 Sec.9.12 No Agency 84 Sec.9.13 Venue 85 Sec.9.14 Investigations; Cooperation 86 Sec.9.15 Intentionally Omitted 94 Sec.9.16 Maximum Interest Rate 94 Sec.9.17 Captions 94 Sec.9.18 Gender, Etc. 94 Sec.9.19 Assignment by EDC 95 Sec.9.20 Obligations of Newspaper Division 95 -iii- ARTICLE TEN AGREEMENT OF THE CITY - ----------- Sec.10.1 City's Agreement to Fund EDC 96 Sec.10.2 Valid Agreement of the City 96 Sec.10.3 The Times's Rights Against the City 96 Atts: Appendix A - Premises Appendix B - Insurance Requirements Appendix C - Reimbursement Schedule Appendix C-1 - Amortized Reimbursement Schedule Appendix D - The Times's Certificate of Good Standing Appendix E - EDC's Legal Opinion Appendix F - EDC's Secretary's Certificate Appendix G - Equal Employment Requirements Appendix H - Employment Reporting Requirement Appendix I - Intentionally Omitted Appendix J - MacBride Principles Rider Appendix K - Urban Renewal Plan Appendix L - Corporation Counsel's Legal Opinion Exhibit A - Form Legal Opinion Exhibit B - Form Certificate of Specimen Signature Exhibit C - AIA Forms Exhibit D - Form Certification to be Attached to Requisition Exhibit E - Form Expedited Certification Affidavit -iv- FUNDING AGREEMENT #1 dated as of December 15, 1993 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having its principal office at 110 William Street, New York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York State corporation, having its principal office at 229 West 43rd Street, New York, New York, 10036. PREAMBLE: - --------- W I T N E S S E T H ------------------- WHEREAS: A: The City of New York (the "City"), a municipal corporation of the State of New York, is the owner in fee of certain real property identified, as of the date hereof, as Block 4183, p/o Lot 1, Block 4242, Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, p/o Lot 1 and Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street, on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned tentative tax block and lot numbers Block 4282, Lot 100 for future identification, as such property is more particularly described in Appendix A attached hereto and made a part hereof (the "Premises); and -1- B: The City, as landlord, and EDC, as tenant, entered into a lease affecting the Premises dated as of the date hereof, which lease was assigned by EDC to The Times pursuant to an Assignment and Assumption of Lease with Consent dated as of the date hereof (the lease as so assigned, and as the same may hereafter be amended, is hereinafter referred to as, the "Lease"), and for which Lease EDC will act as the City's managing agent pursuant to Article 42 of the Lease; and C: Pursuant to the terms of the Lease, The Times is obligated to construct on the Premises a facility of no less than approximately 360,000 square feet for the printing, production and distribution of newspapers, magazines and other periodicals or printed materials, and, at the sole discretion of The Times, other such buildings and improvements on the Premises as are permitted pursuant to the terms and provisions of the Lease, including without limiting the generality of the foregoing, the expansion of the printing facility to a size greater than 360,000 square feet (collectively the "Project"); and D: As a part of the Project, The Times will be performing site preparation work (including drainage and filling) and foundation work (including, without limitation, piling) on the Premises; and E: In order to facilitate and enhance the feasibility of the construction of the Project, and in order to (i) perform certain site preparation work required in connection with the development of the Project, including drainage and filling, and (ii) perform foundation work on the Premises, including without limitation, the furnishing and driving of piles, the pouring of concrete for pile caps, grade beams and structural floor slab, and the -2- furnishing and installation of reinforcing steel, EDC and the City have agreed to make available City capital budget funds to The Times to pay for a portion of the costs incurred by The Times in connection with the performance of such work; and F: The City and EDC have entered into an Amended and Restated Contract dated as of June 30, 1993, as amended (the "Consolidated Contract"), pursuant to which the City will provide EDC with City capital budget funds for use, subject to the terms, conditions and limitations set forth in this Agreement, in connection with the construction of the Project; and G: The Times, independently, and not as agent of the City or EDC, desires to perform, or cause the performance of, the Construction Work (as hereinafter defined) subject to the terms, conditions and limitations set forth in this Agreement; and H: Pursuant to its obligations under the Consolidated Contract and in furtherance of its corporate purpose of fostering economic development in the City, EDC has agreed, subject to the terms, conditions and limitations set forth herein, to disburse to The Times for the performance of the Construction Work, payments up to, but not to exceed, $16,000,000 (the "Funding") for the purpose of financing the Eligible Costs (as hereinafter defined) of the Construction Work. NOW, THEREFORE, EDC and The Times covenant and agree as follows: -3- DEFINITIONS ----------- As used in this Funding Agreement, the following initially capitalized terms shall have the respective meanings indicated opposite each of them: "Abandonment Date" As defined in Sec.2.4(c). "Accounting Principles" The then current generally accepted accounting principles consistently applied which relate to the accrual method of accounting but subject to the exceptions, if any, expressly set forth in this Agreement. "Affiliate" Any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, The Times. For purposes hereof, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of The Times through the ownership of voting securities, by contract, or otherwise. Ownership of or by The Times includes beneficial ownership effected by ownership of intermediate entities. An "Affiliate" of a Person other than The Times shall be determined using the same standard of control and ownership set forth herein with respect to The Times. Unless the context otherwise requires, any reference to an "Affiliate" in this Agreement shall be deemed to refer to an Affiliate of The Times. "Agreement" This Funding Agreement and any amendments thereto. "Aggregated Construction Phase" The simultaneous construction by The Times of (i) the aggregate of two or more of the five separate construction phases hereinafter defined as Phase One Construction, Phase Two Construction, Phase Three Construction, Phase Four Construction and Phase Five Construction, and/or (ii) the aggregate of a Segment (as hereinafter defined) of Construction Work included within either Phase One Construction, Phase Two Construction, Phase Three Construction, Phase Four Construction or Phase Five Construction with one or more -4- Segments included within one or more of the other Construction Phases of the Construction Work. "Amortized Reimbursement Amount" As defined in Sec.2.4(a). "Approvals" As defined in Sec.1.1(b). "Architect" Any registered architect, architectural firm, professional engineer, combined practice or association licensed in the State of New York, selected by The Times, or any licensed architect or engineer on staff to a Construction Manager or General Contractor (as such terms are hereinafter defined) who is authorized to sign construction documents, in its professional capacity, on behalf of the Construction Manager or General Contractor. "Buildings Department" The City's Department of Buildings, or any successor in function. "Business Day" Any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions in New York City are authorized by law or executive order to close. "City" As defined in Recital A of the Preamble. "College Point Improvement Fund Payments" As defined in Section 3.09 (b)(iii) of the Lease. "Commencement Date" As defined in Sec.3.1. "Commissioner" As defined in Sec.9.14(a). "Completed Cover Sheet" As defined in Sec.4.1. "Consolidated Contract" As defined in Recital F of the Preamble. -5- "Construction Commencement Date" As defined in Section 13.01(b)(ii) of the Lease. "Construction Contract" (A) Any construction management agreement executed by The Times and the Construction Manager (as hereinafter defined), if any, with respect to the services performed by the Construction Manager with respect to all or any portion of the Construction Work; or (B) any contract between The Times and the General Contractor, if any, under which the General Contractor is obligated to perform all or any portion of the Construction Work; or (C) any contract between The Times and any other contractor for the performance of all or any part of the Construction Work. The term "Construction Contract" shall not include any contract entered into by a contractor with any subcontractor, materials supplier, consultant or any other Person. "Construction Manager" Any construction manager selected by The Times, responsible for the performance of certain construction management services relative to the Construction Work. "Construction Phase" Any one of the five separate construction phases hereinafter defined as Phase One Construction, Phase Two Construction, Phase Three Construction, Phase Four Construction or Phase Five Construction. "Construction Work" Any construction activities undertaken by or on behalf of The Times in order to (i) perform the following site preparation work ("Site Preparation Work") for the Project: drainage and filling, and (ii) make foundation-related improvements on the Premises, including without limitation, the furnishing and driving of piles, the pouring of concrete for pile caps, grade beams and structural floor slab, and the furnishing and installation of reinforcing steel; provided, however, that in no event shall Construction Work include any "pre-construction" activities such as the performance of soil boring work, staking, surveying, measuring and surcharging. For purposes hereof, the portion of the Site Preparation Work that is referred to as "filling" and that will be deemed to be Construction Work that is eligible for reimbursement from the Funding shall include the bringing to the Premises and the placement thereon of soil or other "fill" material in such amounts as will raise the grade of the land from the grade as it exists at the -6- Commencement Date to the "design grade" indicated on the Plans and Specifications (as hereinafter defined) submitted by The Times to the Buildings Department as the grade upon which The Times intends to construct its foundation for any of the Minimum Printing Facility, the Five Press Facility, the Six Press Facility, the Seven Press Facility and/or the Eight Press Facility (as such terms are hereinafter defined). In no event shall "filling" include the bringing to the Premises and the placement thereon of soil or other "fill" material which is necessary for the compaction or surcharging of the land and which, after such compaction, is removed from the Premises; provided, however, that if such soil or "fill" material is permitted to sit on the land for a period of time and after such period of time it is determined that a portion of the soil or "fill" material which initially lay above the "design grade" settled to such a degree that it is at the time of such determination at or below the "design grade", such portion of the soil or "fill" material will be deemed to be Construction Work that is eligible for reimbursement from the Funding. "Contractor" Any contractor under a Construction Contract, including without limitation, a Construction Manager or General Contractor. The term "Contractor" shall not include any subcontractor, materials supplier, or other Person that has not entered into a Construction Contract directly with The Times. "DBS" As defined in Sec.6.11(d). "Department of Investigation" As defined in Sec.9.14(a). "Deputy Mayor" As defined in Sec.9.14(a). "DLS" The Division of Labor Services of the City's Department of Business Services, or its successor in function. "EDC" As defined in the first paragraph of this Agreement. "EDC Default Notice" As defined in Sec.9.5(b). "Eight Press Facility" A Printing Facility (as hereinafter defined) adequate to accommodate the installation and operation therein of eight printing presses and other equipment related primarily to printing, collating, bundling, and -7- distribution functions necessary in connection with the production of newspapers, magazines and other periodicals or printed materials. "Eligible Costs" The costs of the Construction Work paid or payable by The Times to Contractors, subcontractors, suppliers and material persons for labor and materials utilized in connection with the Construction Work. "Engineer of Record" The professional engineer, if any, designated by The Times or by the Construction Manager or the General Contractor, as the case may be, to act as the engineer of record for the Project. "Entity" As defined in Sec.9.14(a). "Events of Default" Those events set forth in Sec.7.1. "Federal Courts" As defined in Sec.9.13. "Final Penalty" As defined in Sec.9.14(f)(ii). "43rd Street Facility" As defined in Sec.2.4(c)(ii). "Fourth Anniversary Date" As defined in Sec.2.2(a) "Five Press Facility" A Printing Facility adequate to accommodate the installation and operation therein of five printing presses and other ---- equipment related primarily to printing, collating, bundling and distribution functions necessary in connection with the production of newspapers, magazines and other periodicals or printed materials. "Funding" As defined in Recital H of the Preamble. -8- "Funding Agreement #2" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for the construction of a City sanitary sewer system to service the Premises, as such agreement may be amended from time to time. "Funding Agreement #3" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of funds necessary to pay for the construction of an interim New York City Police Department evidence vehicle facility, as such agreement may be amended from time to time. "Funding Agreement #4" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for certain reconstruction of the Whitestone Expressway Service Road from 20th Avenue to Linden Place (the "Whitestone Road"), a City street running adjacent to Premises, as such agreement may be amended from time to time. "General Contractor" Any general contractor selected by The Times, responsible for the performance of all or any portion of the general construction work relative to the Construction Work. "Good Faith W/MBE Participation Dollar Value" As defined in Sec.6.11(a). "Governmental Authorities" The United States of America, the State of New York, the City and any agency, department, legislative body, commission, board, bureau, instrumentality or political subdivision or public benefit corporation of any of the foregoing, now existing or hereafter created, having legal jurisdiction over the Premises or any portion thereof or any street, road, avenue, sidewalk or water comprising a part of or immediately adjacent to the Premises. "Gross Building Area" As defined in Article 1 of the Lease. -9- "Guaranteed W/MBE Participation Dollar Value" As defined in Sec.6.11(a). "Impositions" As defined in Section 3.09(b)(i) of the Lease. "Interim Penalty" As defined in Sec.9.14(f)(i). "Investigation" As defined in Sec.9.14(a). "Late Charge Rate" The Prime Rate (as hereinafter defined) plus one percent (1%). "Lease" As defined in Recital B of the Preamble. "Member" As defined in Sec.9.14(a). "Minimum Printing Facility" A Printing Facility of no less than approximately 360,000 square feet of floor area, which facility and its foundation shall be adequate to accommodate the installation and operation therein of four printing presses and other ---- equipment related primarily to printing, collating, bundling and distribution functions necessary in connection with the production of newspapers, magazines and other periodicals or printed materials. "MBEs" As defined in Sec.6.11(a). "New York State Courts" As defined in Sec.9.13. "Operational Date" As defined in Sec.2.4(c)(v). "Outside Operational Date" As defined in Sec.2.4(c)(iv). "Parties" EDC and The Times. "Person" An individual, corporation, partnership, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing. -10- "Phase One Construction" Site Preparation Work and the laying of a foundation for, and the construction of, a Minimum Printing Facility. "Phase Two Construction" Site Preparation Work and the laying of a foundation for, and the construction of, the Five Press Facility. "Phase Three Construction" Site Preparation Work and the laying of the foundation for, and the construction of, the Six Press Facility. "Phase Four Construction" Site Preparation Work and the laying of a foundation for, and the construction of, the Seven Press Facility. "Phase Five Construction" Site Preparation Work and the laying of a foundation for, and the construction of, the Eight Press Facility. "Plans and Specifications" (i) The drawings and plans and specifications for the Project which includes the Construction Phase or Aggregated Construction Phase to be initially constructed by The Times (The Times hereby acknowledging that the portion of the Project to be initially constructed by The Times shall be at least the Minimum Printing Facility and that the Plans and Specifications for such initial construction shall indicate thereon the plans and specifications for the construction of the Minimum Printing Facility, provided, however, that such plans and specifications need not be completed to the extent required by the Buildings Department to issue a building permit but should be completed to the extent required by the Buildings Department to issue a foundation permit), prepared by the Architect, and approved to the extent required by Sec.1.1 hereof, as such drawings and plans and specifications may be modified or amended from time to time in accordance with this Agreement, and (ii) any subsequent drawings and plans and specifications, or modifications or amendments to the initial drawings and plans and specifications, for any expansion of the Project required by any additional Construction Phase or Aggregated Construction Phase, prepared by the Architect and as approved to the extent required by Sec.1.1 hereof. "Premises" As defined in Recital A of the Preamble. "Prime Rate" The base or prime rate of interest from time to time charged by -11- Chemical Bank, as such rate is published by The New York ------------- Times newspaper, or by The Wall Street Journal if such rate ----- ------------------------ is not published by The New York Times at the time in -------------------- question. "Printing Facility" A facility for the printing, production and distribution of newspapers, magazines and other periodicals or printed materials. "Prohibited Person" As defined in Sec.1.2(b)(2). "Project" As defined in Recital C of the Preamble. "Project Budget" As defined in Sec.4.3. "Project Work" Any pre-construction activities (including, without limitation, soil borings, surveying and surcharging), clearing, excavation, grading, filling and construction activities undertaken by or on behalf of The Times for the purpose of constructing the Project all in accordance with this Agreement and the Plans and Specifications, whether or not paid for with the Funding. "Public Parties" As defined in Sec.9.11(a). "Reimbursement Amount" As defined in Sec.2.4(a). "Rental" As defined in Article 1 of the Lease. "Requirements" Any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders, resolutions and requirements of all Governmental Authorities currently in force or hereafter adopted applicable to the Premises and/or the Project Work including without limitation, those rules, regulations and requirements of the Urban Renewal Plan (as hereinafter defined). "Requisition" As defined in Sec.4.2(a)(ii). "Retainage" As defined in Sec.2.2(a)(1). "Reviewable Features" With respect to any submission of the Plans and Specifications, features of such submission the review of which is necessary to enable -12- EDC to determine (i) compliance with the requirements set forth in the Urban Renewal Plan to the extent that such requirements are applicable to The Times, and (ii) the number of square feet of Gross Building Area to be constructed. "Reviewing Parties" The Buildings Department, the City's Fire Department, the City's Department of Environmental Protection, the City's Department of Transportation, and any other Governmental Authority with jurisdiction over the Project or the Premises and responsible for reviewing and approving drawings, plans and specifications for the Project in the normal course of their business in connection with (i) the issuing of permits or approvals (including a building permit) with respect to any construction project in the Borough of Queens, City of New York, or (ii) ensuring compliance with the Requirements. "Scheduled Completion Date" The date on which The Times is required, pursuant to Section 13.01(b) of the Lease, to Substantially Complete (as hereinafter defined) construction of the Minimum Printing Facility. "Segments" Portions or aspects of the Project Work which can be performed or constructed independently from the remainder of the Project Work or from other portions or aspects of the Project Work; for example, Site Preparation Work, driving of piles, foundation work, construction of a Printing Facility, landscaping. "Seven Press Facility" A Printing Facility adequate to accommodate the installation and operation therein of seven printing presses and other ----- equipment related primarily to printing, collating, bundling and distribution functions necessary in connection with the production of newspapers, magazines and other periodicals or printed materials. "Site Preparation Work" As defined in the definition of Construction Work. "Six Press Facility" A Printing Facility adequate to accommodate the installation and operation therein of six printing --- presses and other equipment related primarily to printing, collating, bundling and distribution functions necessary in connection with the production of newspapers, magazines and other periodicals or printed materials. -13- "Short-Term Late Charge Rate" The rate of interest from time to time charged in connection with six (6) month Treasury bonds, plus one percent (1%). "Substantial Completion" or "Substantially Complete(d)" With respect to only the initial Construction Phase of the Project (which initial Construction Phase shall be no smaller in size than the Minimum Printing Facility), the completion of construction of an enclosed envelope of floor space, environmentally controlled and containing (i) heating, ventilating and air conditioning systems installed for general purpose or multi-purpose occupancy, (ii) water, sewer and sanitary facilities suitable for general purpose or multi-purpose occupancy, (iii) electrical service, including interior lighting, throughout the constructed structure suitable for general purpose or multi-purpose occupancy, (iv) fire detection and protection and safety facilities suitable for general purpose or multi-purpose occupancy throughout the structure, and (v) building shell construction constructed to a level adequate to permit build-to-suit occupancy with interior and exterior walls as required for structural integrity; provided, however that such structure need not include production systems and the specific construction features required to make the above described utility systems operational in the production of newspapers. Substantial Completion shall be established upon receipt by EDC of a certification from the Architect or Engineer of Record, that the above described structure shall have been constructed substantially in accordance with the Plans and Specifications and any other construction documents filed with the Buildings Department, provided however, that the date of Substantial Completion shall be established by the date of delivery of such certification. "Target Building Size" As defined in Sec.2.1(c)(i). "Target Footprint" As defined in Sec.2.1(c)(i). "Term" As defined in Sec.3.1. "The Times" As defined in the first paragraph of this Agreement. "The Times Indemnitees" As defined in Sec.9.11(b). -14- "Transaction Documents" As defined in Sec.9.14(a). "Unavoidable Delays" Delays caused by (i) strikes, slowdowns, walkouts, lockouts or other labor troubles, (ii) acts of God, (iii) catastrophic weather conditions, (iv) inability to obtain labor or materials due to labor disputes, (v) court orders enjoining commencement or continuation of the Project Work, (vi) enemy action, (vii) civil commotion, (viii) shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency, (ix) failure or defect in the supply of electricity, oil, gas or water to the Premises provided that such failure or defect is not due to the action or inaction of The Times or its Contractors or their subcontractors, (x) fire, (xi) casualty, (xii) the failure of EDC to disburse the Funding or any portion thereof in accordance with the provisions of this Agreement, (xiii) the failure of EDC to review, comment on, approve or disapprove, and inform the Buildings Department of its approval of, the Plans and Specifications within the time periods required by Article One hereof (provided that such failure is not a result of The Times's failure to submit Plans and Specifications of reasonably sufficient detail to permit EDC to properly review such Plans and Specifications or to submit Plans and Specifications appropriately modified to reflect EDC's comments thereon), or (xiv) other causes not within The Times's control that is causing a delay in The Times's performance of its construction obligations hereunder. The Times shall use its good faith efforts to notify EDC in writing, stating when such delay commenced, not later than ten (10) Business Days after The Times has first received knowledge of the occurrence of any of the foregoing conditions; provided, however, that The Times's failure to notify EDC of the occurrence of an event constituting an Unavoidable Delay shall not affect the commencement of such delay or otherwise result in the loss of any benefit or right granted to The Times under this Agreement. In no event shall The Times's financial condition or inability to obtain financing constitute an Unavoidable Delay. "Urban Renewal Plan" The Second Amended Urban Renewal Plan for the College Point II Industrial Development Project, dated February 1989, in effect as of the date of this Agreement (a copy of which is attached hereto as Appendix K), and all amendments and modifications thereto affecting landscaping requirements compliance with which would not require The Times to incur a material cost. -15- "WBEs" As defined in Sec.6.11(a). "W/MBEs" As defined in Sec.6.11(a). "W/MBE Participation Dollar Value" As defined in Sec.6.11(c). "W/MBE Percentage" As defined in Sec.6.11(c). "W/MBE Report" As defined in Sec.6.11(b). "Whitestone Road" As defined in the definition of Funding Agreement #4. -16- ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND ---------------------------------------------------- CONTRACT REQUIREMENTS --------------------- Sec.1.1 General Provisions and Provisions Regarding Design and --------------------------------------------------------------- Construction. - ------------- (a) General. The Times agrees to perform the Project Work and EDC -------- agrees to disburse the Funding on the terms and conditions contained in this Agreement. (b) Plans and Specifications. (1)(i) The Times shall prepare the ------------------------- Plans and Specifications in accordance with all applicable requirements of the Buildings Department (including, without limitation, the requirements of the New York City Building Code) and all other applicable Requirements. The Plans and Specifications shall, in addition, be prepared, to the extent reasonably practicable, in such manner as to clearly show (either graphically or by appropriate notes) that all elements of the design conform to the requirements of the Urban Renewal Plan to the extent that such requirements are applicable to The Times. The Times agrees to deliver a copy of the Plans and Specifications (in a single or in multiple submissions, at the option of The Times) prepared in accordance with the foregoing, together with a letter from the Architect or the Engineer of Record stating that the facility contemplated by such Plans and Specifications to be constructed, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed to accommodate the printing presses and other equipment that The Times has informed such Architect or Engineer of Record that it intends to install at the facility contemplated by such Plans and Specifications (it being understood that the printing presses and equipment that The Times informs such Architect or Engineer of Record that it intends to install at the facility -17- shall be such printing presses and equipment as is necessary to operate each of the Minimum Printing Facility, the Five Press Facility, the Six Press Facility, the Seven Press Facility and the Eight Press Facility, as the case may be), to EDC for EDC's review and approval prior to or simultaneous with its submission of the Plans and Specifications to the Buildings Department. EDC's review and approval of the Plans and Specifications as provided in this Sec.1.1(b) shall be limited to Reviewable Features. EDC's approval of the Plans and Specifications shall not be unreasonably withheld. EDC will approve or disapprove and comment on such submission with respect to Reviewable Features within twenty-five (25) days after receipt thereof and, if approved, will immediately notify The Times, the Buildings Department and any other applicable Reviewing Party of such approval. If EDC disapproves of and has comments on any submission of the Plans and Specifications or any portion or aspect thereof, such disapproval and comments will be given to The Times in writing in a detailed manner within the twenty-five (25) day time period specified herein. As to those portions or aspects of the Plans and Specifications which EDC does not disapprove and comment on in writing in a detailed manner within such twenty-five (25) day time period, such portions or aspects of the Plans and Specifications shall be deemed approved and if the portions or aspects that have been deemed approved constitute an independent element of the Project Work (e.g. Site Preparation Work, the driving of piles, foundation work, construction of the Printing Facility, landscaping), EDC shall promptly advise the Buildings Department and any other applicable Reviewing Party of such approval. The Times shall submit to EDC modified Plans and -18- Specifications with respect to those portions or aspects of the Plans and Specifications which are disapproved and commented on by EDC within the applicable time periods set forth herein, responsive to such comments, for EDC's approval or disapproval and comment, until approved by EDC. EDC will approve or disapprove and comment on each such subsequent submission within fifteen (15) days after receipt thereof, and, if approved, will immediately notify The Times, the Buildings Department and any other applicable Reviewing Party of such approval. As to those portions or aspects of the modified Plans and Specifications which EDC does not disapprove and comment on in writing in a detailed manner within such fifteen (15) day time period, such portions or aspects of the modified Plans and Specifications shall be deemed approved and if the portions or aspects that have been deemed approved constitute an independent element of the Project Work, EDC shall promptly advise the Buildings Department and any other applicable Reviewing Party of such approval. (ii) If EDC disapproves and comments on any submission of the Plans and Specifications and The Times has a good faith reason to believe that such disapproval and/or comments are unreasonable, then The Times shall have the right to submit to arbitration in accordance with the provisions of Article 34 of the Lease the question as to whether, taking into account the terms and conditions of this Agreement and the Lease, such disapproval and/or comments are unreasonable. If the arbitrator decides that EDC's disapproval and/or comments are unreasonable then, from the date of such determination in favor of The Times, the Plans and Specifications shall be deemed approved. -19- (iii) If any portion or aspect of the Plans and Specifications is deemed approved in accordance with Sec.1.1(b)(1)(i) or Sec.1.1(b)(1)(ii) above, then upon receipt of a notice from The Times that such portions or aspects of the Plans and Specifications have been deemed approved in accordance with Sec.1.1(b)(1)(i) of this Agreement or upon receipt by The Times of a determination in favor of The Times in arbitration in accordance with Sec.1.1(b)(1)(ii) of this Agreement, EDC shall have ten (10) days to advise the Buildings Department and any other applicable Reviewing Party of such deemed approval. For each day beyond the ten (10) day time period set forth herein that EDC fails to advise the Buildings Department and any other applicable Reviewing Party of such deemed approval of the Plans and Specifications, The Times shall be entitled to an abatement of future installments of Rental (other than Impositions and College Point Improvement Fund Payments) due under the Lease in an amount equal to $1,000. (2) In addition to The Times's submission of the Plans and Specifications to EDC for its review and approval in accordance with Sec.1.1(b)(1) hereof, The Times shall submit such Plans and Specifications to the Reviewing Parties, as required by law, rule, regulation or other applicable Requirement, for their review and approval in the normal course of their business. The Times shall also obtain all required permits, consents, certificates, licenses, authorizations and approvals of the Buildings Department, and all other Governmental Authorities having jurisdiction over the Project and the Premises (all such permits, consents, certificates, licenses, authorizations and approvals are hereinafter collectively referred to as the "Approvals"). The Times shall deliver to EDC copies of the -20- Plans and Specifications that are filed with, and approved by, the Buildings Department. (3) (i) The Times shall give notice to EDC of any and all changes The Times wishes to make to the Plans and Specifications prior to any construction in accordance with such proposed changes. No change which would (i) cause changes to be made to the Plans and Specifications with respect to those portions or aspects of the Plans and Specifications previously approved or deemed approved in accordance with Sec.1.1(b)(1) or this Sec.1.1(b)(3), or (ii) cause the Plans and Specifications to be in material noncompliance with the requirements set forth in the Urban Renewal Plan, or (iii) alter the Gross Building Area so that it is less than 360,000 square feet (unless such change to the Plans and Specifications is accompanied by a letter from the Architect or Engineer of Record stating that the Facility contemplated by such Plans and Specifications, if constructed in accordance therewith, is designed to accommodate the printing presses and other equipment that The Times has informed such Architect or Engineer of Record it intends to install at such Facility, it being understood that the printing presses and equipment that The Times informs such Architect or Engineer of Record of shall be at least such printing presses and equipment as is necessary to operate the Minimum Printing Facility), shall be made to the Plans and Specifications without the prior written approval of EDC, which approval shall not be unreasonably withheld. EDC will approve or disapprove and comment upon such changes within twenty- five (25) days after receipt thereof and, if approved, will immediately notify The Times, the Buildings Department and any other applicable Reviewing Party of such approval. If EDC disapproves and has comments on any such changes, such comments will be given to The Times in writing in a detailed manner within the twenty-five (25) day -21- time period specified herein. As to those changes which EDC does not disapprove and comment upon in writing in a detailed manner within such twenty-five (25) day time period, such changes shall be deemed approved and if those changes that have been deemed approved constitute changes to an independent element of the Project Work (as exemplified in Sec.1.1(b)(1)(i) above), EDC shall promptly advise the Buildings Department and any other applicable Reviewing Party of such approval. The Times shall submit to EDC modified Plans and Specifications with respect to those changes which are disapproved and commented on by EDC within the applicable time periods set forth herein, responsive to such comments, until approved by EDC. EDC will approve or disapprove and comment on each such subsequent submission within fifteen (15) days after receipt thereof, and, if approved, will immediately notify The Times, the Buildings Department and any other applicable Reviewing Party of such approval. As to those portions or aspects of the modified Plans and Specifications which EDC does not disapprove and comment on in writing in a detailed manner within such fifteen (15) day time period, such portions or aspects of the Plans and Specifications shall be deemed approved and if the portions or aspects that have been deemed approved constitute an independent element of the Project Work, EDC shall promptly advise the Buildings Department and any other applicable Reviewing Party of such approval. (ii) If EDC disapproves and comments on any proposed changes to the Plans and Specifications and The Times has a good faith reason to believe that such disapproval and/or comments are unreasonable, then The Times shall have the right to submit to arbitration in accordance with the provisions of Article 34 of the Lease the -22- question as to whether, taking into account the terms and conditions of this Agreement and the Lease, such disapproval and/or comments are unreasonable. If the arbitrator decides that EDC's disapproval and/or comments are unreasonable then, from the date of such determination in favor of The Times, the proposed changes to the Plans and Specifications shall be deemed approved. (iii) If any portion or aspect of any subsequent submission of the Plans and Specifications is deemed approved in accordance with Sec.1.1(b)(3)(i) or Sec.1.1(b)(3)(ii) above, then upon receipt of a notice from The Times that such portions or aspects of the subsequent submission of the Plans and Specifications have been deemed approved in accordance with Sec.1.1(b)(3)(i) of this Agreement or upon receipt by The Times of a determination in favor of The Times in arbitration in accordance with Sec.1.1(b)(3)(ii) of this Agreement, EDC shall have ten (10) days to advise the Buildings Department and any other applicable Reviewing Party of such deemed approval. For each day beyond the ten (10) day time period set forth herein that EDC fails to advise the Buildings Department and any other applicable Reviewing Party of such deemed approval of the subsequent submission of the Plans and Specifications, The Times shall be entitled to an abatement of future installments of Rental (other than Impositions and College Point Improvement Fund Payments) due under the Lease in an amount equal to $1,000. (4) Except with respect to compliance with the requirements set forth in the Urban Renewal Plan, EDC's approval of the Plans and Specifications or any modifications thereto or any subsequent submissions thereof shall not be, nor shall it be construed as being, or relied upon as, a determination that such comply with the Requirements or are -23- structurally, architecturally or by any other standard technically correct. (5) Notwithstanding anything to the contrary contained herein, Plans and Specifications submitted to EDC for EDC's review and approval in accordance herewith, if submitted in multiple submissions or otherwise in a phased sequence pursuant to the terms hereof, need not show compliance with all Requirements set forth in the Urban Renewal Plan that are applicable to the Project (subject to The Times's ultimate obligations under the Lease to submit Plans and Specifications that, in the aggregate, show compliance with all such Requirements), but should, in any event, show compliance with all such Requirements of the Urban Renewal Plan that could be violated by construction pursuant to the Plans and Specifications for the particular Segment, Construction Phase or Aggregated Construction Phase being reviewed by EDC. For example, the Plans and Specifications need not contain details regarding landscaping in order for the Times to proceed with Site Preparation Work or foundation work, provided that such Plans and Specifications show compliance with all Requirements of the Urban Renewal Plan applicable to such Site Preparation Work or foundation work. EDC agrees that it will not disapprove, comment on, or fail to advise the Buildings Department and any other applicable Reviewing Party of its approval or deemed approval of Plans and Specifications on the grounds that such Plans and Specifications do not show compliance with Requirements of the Urban Renewal Plan that are not required to be addressed by such Plans and Specifications pursuant to the provisions of this Sec.1.1(b)(5). (c) Right to Proceed. EDC will not be obligated to disburse any of ------------------ the Funding until (i) EDC has approved the Plans and Specifications in accordance with Sec.1.1(b) hereof, -24- and (ii) all Approvals necessary for the construction of any portion of the Construction Work which The Times is then requesting to be funded with the Funding, have been obtained. Nothing contained herein is intended to prohibit or otherwise prevent The Times from proceeding with the construction of the Project or any portion thereof which is not to be funded with the Funding. (d) Performance of the Work. The Times covenants and agrees to cause ------------------------- the Project to be constructed in accordance with the requirements of this Agreement and with the Plans and Specifications and all applicable Requirements. (e) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof, ----------------- The Times shall permit EDC, its agents and/or professional consultants to make inspections of the Premises, accompanied by a representative of The Times, during normal business hours or otherwise when Construction Work is in progress, at reasonable times and upon reasonable prior notice to The Times and in accordance with applicable safety standards, as it reasonably deems necessary to observe compliance with this Agreement. Such inspections shall be visual only and shall not require the uncovering of any work unless specifically requested in writing by EDC; provided, however, that EDC shall request the uncovering of work only if there is reasonable evidence or cause to believe that the work was not performed in accordance with the Plans and Specifications or the Requirements, and further provided that if the work that has been uncovered is determined to be performed in accordance with the Plans and Specifications or the Requirements, EDC shall pay the costs associated with the uncovering and if the work that has been uncovered is determined to -25- be unacceptable because it was not performed in accordance with the Plans and Specifications or the Requirements, The Times shall pay the costs associated with the uncovering. EDC shall use its best efforts to cause such inspections to be made in a manner such that it will not interfere with the progress of the Construction Work or other Project Work. The omission or failure of EDC or any representative thereof to make such inspections, or to notify The Times of any non-compliance with the terms of this Agreement or the Plans and Specifications, shall in no way relieve The Times of its obligations under this Agreement or impose any liability upon EDC, its consultants and agents. Nothing contained in this Sec.1.1(e) shall be construed to give EDC the right under this Agreement to stop, hinder or delay the Construction Work. Sec.1.2 Procurement of Services and Goods --------------------------------- (a) At such time as The Times enters into a Construction Contract or Construction Contracts, The Times shall enter into such Construction Contract or Construction Contracts independently and not as agent of the City or EDC for the performance of any Construction Phase of the Construction Work or any Segments of any Construction Phase or Aggregated Construction Phase of the Construction Work in accordance with the Plans and Specifications therefor, including without limitation, the performance of Site Preparation Work for the Project and the construction of the foundation and the making of foundation related improvements on the Premises (including, without limitation, piling). (b) (1) The Times shall have the right to enter into Construction Contracts with a Person or Persons selected by The Times in its sole discretion; provided however, that any -26- Construction Contract with a Construction Manager or General Contractor shall be subject to EDC's prior written approval solely as to whether such Construction Manager or General Contractor is a Prohibited Person. Prior to letting any Construction Contract with a Construction Manager or General Contractor, The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a statement as to the Person or Persons which The Times intends to select as its Construction Manager or General Contractor. EDC shall advise The Times, within fifteen (15) Business Days after receipt of such statement, whether any such Person or Persons is a Prohibited Person. If EDC fails to so advise The Times within such fifteen (15) Business Day period as to whether any such Person or Persons is a Prohibited Person, such Person shall be deemed not to be a Prohibited Person. EDC understands that The Times has entered into a Construction Contract with Lehrer McGovern Bovis, Inc. for the performance of certain construction management services and hereby acknowledges that, as of the date of this Agreement, Lehrer McGovern Bovis, Inc. is not a Prohibited Person. Notwithstanding anything to the contrary contained herein, once The Times has entered into a Construction Contract or Construction Contracts with a Person or Persons to act as its Construction Manager or General Contractor based on EDC's advice that such Person or Persons are not Prohibited Persons (or EDC's failure to notify The Times within the fifteen (15) Business Day period described above that such Person or Persons are Prohibited Persons), The Times shall in no event be required to terminate such Construction Contract or Construction Contracts even if EDC thereafter determines that such Person or Persons were, or had become, Prohibited Persons and the rights of The Times and EDC under this Agreement -27- shall be unaffected and remain in full force and effect as if such Person or Persons were not, or had not become, Prohibited Persons. (2) For purposes hereof, the term "Prohibited Person" shall mean: (i) Any Person (A) that is in default after notice and beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, or (B) that directly controls, is controlled by, or is under common control with a Person that is in default after notice and beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, unless, in each instance, such default or breach either (x) has been waived in writing by EDC or Landlord or (y) is being disputed in a court of law, administrative proceeding, arbitration or other forum or (z) is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default, (ii) Any Person that is an organized crime figure, unless the City is otherwise doing business with such person notwithstanding such organized crime status, (iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any particular in an international boycott in violation of) the Export Administration Act of -28- 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof, (iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which the regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended, (v) Any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than $10,000, unless such default is then being contested in good faith in accordance with the law or unless such default is cured within thirty (30) days after a determination and notice to Tenant from Landlord that such Person is a Prohibited Person as a result of such default, or (vi) Any Person that has solely owned, at any time during the three (3) years immediately preceding a determination of whether such Person is a Prohibited Person, any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property ------ in which the City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City. -29- (c) All Construction Contracts, in order to be eligible for disbursement under this Agreement, shall provide, in substance: (1) (intentionally omitted); (2) that neither the Contractor nor any of its employees or subcontractors is or shall be deemed to be an agent, servant, employee or contractor of the City or EDC by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or other authorization given by the City, EDC or any of their respective officers, officials, directors, members, agents or employees; and that the Contractor shall not commence any legal proceeding against the City or EDC to recover any compensation which may be payable under the Construction Contract; (3) that the Contractor is solely responsible for the work, direction, compensation and personal conduct of its employees and subcontractors; (4) (intentionally omitted); (5) that the Contractor shall maintain accurate, readily auditable records and accounts with supporting documentation, in accordance with Accounting Principles, of all Construction Work performed, and receipts and expenditures made, in connection therewith, and that the Contractor shall make such records and accounts available to EDC, the City and each of their respective agents and employees, for inspection and audit at reasonable times and upon reasonable prior written notice for a period of six (6) years after completion of the pertinent Construction Contract; and -30- (6) provisions incorporating the requirements of Sec.6.5(a) (Compliance with Applicable Law) and Sec.9.1 (Conflict of Interests). (d) The Times shall cause the Contractors to include in any subcontracts entered into by such Contractors for the performance of the Construction Work, provisions substantially the same as the provisions set forth in Sec.1.2(c) hereof. Sec.1.3 Liaison to EDC -------------- The Times will notify EDC, in writing, prior to the Construction Commencement Date, of the member or members (including an alternate) of The Times's staff who will have the authority and the primary responsibility to communicate with EDC (whether to respond to inquiries or to provide updates regarding the progress of the work or otherwise) regarding the performance of each Segment, Construction Phase or Aggregated Construction Phase of the Project Work. The Times agrees to use its good faith efforts to notify EDC in writing of any intended substitution of said person at least five (5) days prior to the date such substitution will take effect but in any event will notify EDC in writing of any such substitution on the day such substitution will take effect. The Times will cause such person to be available to the extent reasonably necessary to communicate with EDC regarding the performance of the Construction Work. -31- ARTICLE TWO - THE FUNDING ------------------------- Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions, -------------------- representations and warranties contained in this Agreement, EDC agrees to disburse to The Times, an amount not to exceed the Funding, and The Times agrees to accept the Funding, for performance by The Times of the Construction Work. The Times agrees to utilize the Funding solely in connection with the Construction Work. Subject to EDC's remedies upon an Event of Default and except as otherwise provided in Sec.2.4 hereof, the Funding, once disbursed under this Agreement, shall not be subject to any reimbursement whatsoever to EDC. (b) The Times acknowledges that neither EDC nor the City has represented or warranted that the Funding will be sufficient to pay for the entire cost of the Construction Work. The Times agrees that The Times will be solely responsible to the extent that the Eligible Costs of the Construction Work exceed the amount of the Funding for any reason. The Times acknowledges that the Funding is not a fee or other compensation earned by or paid to The Times. Sec.2.2 Schedule for Disbursements. (a) Subject to satisfaction of, ----------------------------- and/or compliance with, the terms and conditions of this Sec.2.2 with respect to each Segment, Construction Phase or Aggregated Construction Phase, EDC shall disburse the Funding to The Times in accordance with the following schedule: (1) With respect to the aggregate of all the Segments that constitute Phase -32- One Construction, provided that prior to or simultaneously with the first request for disbursement therefor The Times demonstrates to EDC's reasonable satisfaction through the production of invoices, purchase orders, a purchase and sale agreement, or other documentation reasonably satisfactory to EDC, that The Times has purchased, or contracted to purchase, four printing presses for delivery to the Premises and use in connection with the Minimum Printing Facility, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, a portion of the Funding in an aggregate amount equal to, (i) $3,000,000 if the Phase One Construction commences on or prior to the fourth anniversary of the date on which the Lease has been executed and delivered by the parties thereto (the "Fourth Anniversary Date"), or (ii) $4,000,000 if the Phase One Construction commences after the Fourth Anniversary Date. (2) With respect to the aggregate of all of the Segments that constitute Phase Two Construction, provided that prior to or simultaneously with the first request for disbursement in connection therewith, The Times delivers to EDC a letter from the Architect or the Engineer of Record stating that the improvements contemplated by such Construction Phase or Segment or Segments thereof (it being understood and agreed that such improvements may consist, at a minimum, of only the -33- piles on which a foundation and facility might be constructed at a later date), as described in the Plans and Specifications therefor, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed, when aggregated with the improvements contemplated by Phase One Construction, to accommodate the installation therein or thereon of five printing presses, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, a portion of the Funding (in addition to any amounts already disbursed in accordance with Sec.2.2(a)(1) above) in an aggregate amount equal to $2,250,000. (3) With respect to the aggregate of all of the Segments that constitute Phase Three Construction, provided that prior to or simultaneously with the first request for disbursement in connection therewith, The Times delivers to EDC a letter from the Architect or the Engineer of Record stating that the improvements contemplated by such Construction Phase or Segment or Segments thereof (it being understood and agreed that such improvements may consist, at a minimum, of only the piles on which a foundation and facility might be constructed at a later date), as described in the Plans and Specifications therefor, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed, when aggregated with the improvements contemplated by Phase One -34- Construction and Phase Two Construction, to accommodate the installation therein or thereon of six printing presses, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, a portion of the Funding (in addition to any amounts already disbursed in accordance with Sec.2.2(a)(1) and (2) above) in an aggregate amount equal to $2,250,000. (4) With respect to the aggregate of all of the Segments that constitute Phase Four Construction, provided that prior to or simultaneously with the first request for disbursement in connection therewith, The Times delivers to EDC a letter from the Architect or the Engineer of Record stating that the improvements contemplated by such Construction Phase or Segment or Segments thereof (it being understood and agreed that such improvements may consist, at a minimum, of only the piles on which a foundation and facility might be constructed at a later date), as described in the Plans and Specifications therefor, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed, when aggregated with the improvements contemplated by Phase One Construction, Phase Two Construction and Phase Three Construction, to accommodate the installation therein or thereon of seven printing presses, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, a portion of the Funding (in addition to any amounts already disbursed in -35- accordance with Sec.2.2(a)(1), (2) and (3) above) in an aggregate amount equal to $3,750,000. (5) With respect to the aggregate of all of the Segments that constitute Phase Five Construction, provided that prior to or simultaneously with the first request for disbursement in connection therewith, The Times delivers to EDC a letter from the Architect or the Engineer of Record stating that the improvements contemplated by such Construction Phase or Segment or Segments thereof (it being understood and agreed that such improvements may consist, at a minimum, of only the piles on which a foundation and facility might be constructed at a later date), as described in the Plans and Specifications therefor, if constructed in accordance with the specifications set forth in such Plans and Specifications, is designed, when aggregated with the improvements contemplated by Phase One Construction, Phase Two Construction, Phase Three Construction and Phase Four Construction, to accommodate the installation therein or thereon of eight printing presses, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, a portion of the Funding (in addition to any amounts already disbursed in accordance with Sec.2.2(a)(1), (2), (3) and (4) above) in an aggregate amount equal to $3,750,000. (b) If The Times elects to construct more than one Construction Phase simultaneously and/or sequentially, and/or elects to construct only one or more Segment -36- or Segments of one or more Construction Phases, without regard to whether such Segment or Segments are constructed in a sequence contemplated by Phase Two Construction, Phase Three Construction, Phase Four Construction and Phase Five Construction, then provided that (i) EDC has approved the Plans and Specifications for each such Construction Phase (or the Plans and Specifications for the Aggregated Construction Phase or Segment or Segments thereof which is to be constructed) in accordance with Sec.1.1 hereof, (ii) The Times has filed such Plans and Specifications with the Buildings Department, (iii) with respect to the Funding allocable to Phase One Construc- tion, The Times has demonstrated to EDC's reasonable satisfaction in accordance with Sec.2.2(a)(1) hereof the purchase or contract to purchase of the printing presses specified in Sec.2.2(a)(1) hereof and with respect to the Funding allocable to Phase Two Construction, Phase Three Construction, Phase Four Construction and Phase Five Construction or any Segment or Segments thereof, The Times has delivered to EDC the letter from the Architect or Engineer of Record specified in Sec.2.2(a)(2), (3), (4) and (5) hereof, and (iv) the Segment to be constructed is related to a Construction Phase that is not more than two subsequent construction phases away from the last Construction Phase that is to be constructed in its entirety, EDC shall disburse to The Times, in accordance with Sec.2.3 hereof, the portion of the Funding equal to the aggregate of the amounts allocated to each Construction Phase as set forth in Sec.2.2(a) hereof. Thus, for example, if The Times elected to perform all of the Construction Work included in Phase One Construction, Phase Two Construction, Phase Three Construction, Phase Four Construction and Phase Five Construction at the time that it constructed the Minimum Printing Facility, all of the Funding payable in connection with such Construction Work -37- would be disbursed to The Times in accordance with Sec.2.3 hereof as and when such Construction Work was performed. If, however, The Times elects to perform the Construction Work included in Phase One Construction and the Segment of the Construction Work identified as the driving of piles for a foundation and/or foundation work included in Phase Two Construction, Phase Three Construction, Phase Four Construction and Phase Five Construction, only the Funding payable in connection with the Construction Work included in Phase One Construction and the Segment of the Phase Two Construction and Phase Three Construction would be disbursed to The Times. Funding for the Construction Work included in the Segments of the Phase Four Construction and Phase Five Construction would be disbursed to The Times only at such time as The Times completed all of the Construction Work included in Phase Two Construction with respect to the Segments of Phase Four Construction, and in Phase Three Construction with respect to the Segments of Phase Five Construction (e.g. The Times would not be reimbursed for driving piles for a Seven Press Facility unless either (i) it was at the same time constructing at least the entire Five Press Facility or (ii) it constructed at least the entire Five Press Facility at a later date, in which case The Times would be reimbursed for such Construction Work at such later date on which the entire Five Press Facility was constructed). (c) (i) The Times acknowledges and agrees that, notwithstanding anything to the contrary contained in Sec.2.2(a) or Sec.2.2(b) above, the amount of Funding to be disbursed to The Times with respect to each Construction Phase as described in Sec.2.2(a) above, is based on the expectation that in connection with the construction of each Construction Phase, The Times will construct a Printing Facility containing a certain target aggregate square footage -38- for either (x) the footprint of such facility (the "Target Footprint") or (y) the building size of such facility (the "Target Building Size"). The Target Footprint and Target Building Size for each Construction Phase (on an aggregated basis, as applicable) is as follows: Printing Facility Target Footprint Target Building Size - ----------------- ---------------- -------------------- Minimum Printing Facility 220,000 360,000 Five Press Facility 282,000 465,000 Six Press Facility 345,000 570,000 Seven Press Facility 392,000 645,000 Eight Press Facility 440,000 720,000 The Target Footprint for a Printing Facility shall be relevant only if The Times seeks disbursement of Funding in connection with such Printing Facility for piling and/or foundation work without simultaneously constructing such Printing Facility. The Target Building Size for a Printing Facility shall be relevant only if The Times seeks disbursement of Funding in connection with such Printing Facility if it is constructing such Printing Facility promptly following the driving of piles and construction of the foundation in connection therewith. If the actual footprint or the actual building size, whichever is relevant pursuant to the immediately preceding paragraph, related to any Construction Phase for any Segment of any Construction Phase is more than ten percent (10%) less than the Target Footprint or the Target Building Size, as the case may be, allocable to such Construction Phase, as evidenced by the Plans and Specifications submitted by The Times to the Buildings Department with respect to such Construction Phase or Segment thereof, the amount of the Funding to be disbursed by EDC to The Times with respect to such Construction Phase or Segment thereof -39- will be reduced by an amount equal to (i) the total percentage amount by which the square footage of the footprint of the Printing Facility or the size of the Printing Facility related to such Construction Phase, whichever is relevant pursuant to the terms hereof, is less than the Target Footprint or the Target Building Size for such Construction Phase, as the case may be, minus (ii) ten percent (10%). Thus, for example, if The Times constructs a Minimum Printing Facility consisting of a building size of 324,000 square feet or more, EDC will disburse to The Times for the Eligible Costs incurred in connection therewith, up to the full $3,000,000 (or $4,000,000, if applicable) in Funding as provided in Sec.2.2(a)(1) hereof. If, at the same time that The Times constructs the Minimum Printing Facility, it also drives piles for the Six Press Facility, but does not at the same time construct the Six Press Facility, and the piles driven for the Six Press Facility are sufficient to accommodate a footprint which, when aggregated with the footprint for the Minimum Printing Facility, is 317,400 square feet (eight percent (8%) less than the 345,000 Target Footprint for the Six Press Facility), EDC will disburse to The Times in connection with Eligible Costs therefor, Funding in an amount equal to (i) $3,000,000 (or $4,000,000, if applicable) for the construction of the Minimum Printing Facility, and (ii) $4,500,000 (the sum of $2,250,000 allocated to the Five Press Facility and $2,250,000 allocated to the Six Press Facility). If, however, The Times drives piles for, and at the same time constructs, the Six Press Facility and the total square footage of the Six Press Facility, when aggregated with the square footage of the Minimum Printing Facility, is 484,000 square feet (fifteen percent (15%) less than the 570,000 Target Building Size for the Six Press Facility), the $4,500,000 Funding allocable to the Five Press Facility and the Six Press Facility will be reduced by five -40- percent (5%) to $4,275,000. (ii) The Parties further acknowledges and agrees that the portion of the Funding allocated to any Construction Phase, once reduced in accordance with Sec.2.2(c)(i) above, will never be increased or further reduced. Thus, if The Times constructs a Minimum Printing Facility and at the same time drives piles for the Six Press Facility sufficient to accommodate a footprint which, when aggregated with the footprint for the Minimum Printing Facility, is 276,000 square feet (twenty percent (20%) less than the 345,000 Target Footprint for the Six Press Facility), the $4,500,000 Funding allocable to the Five Press Facility and the Six Press Facility will be reduced by ten percent (10%) to $4,050,000. If, several years later, The Times constructs the Six Press Facility and the total square footage of the Six Press Facility, when aggregated with the square footage of the Minimum Printing Facility, is 570,000 square feet (the Target Building Size for the Six Press Facility), The Times will not be entitled to, and EDC will not be required to disburse to The Times, the difference between the $4,500,000 originally allocated to The Times with respect to the Five Press Facility and the Six Press Facility and the reduced amount of $4,050,000. If the Times constructs a Minimum Printing Facility and at the same time drives piles for the Six Press Facility sufficient to accommodate a footprint which, when aggregated with the footprint for the Minimum Printing Facility, is 345,000 square feet (the Target Footprint for the Six Press Facility) and EDC disbursed to The Times in connection therewith the $3,000,000 (or $4,000,000, if applicable) Funding allocable to the Minimum Printing Facility and the $4,500,000 Funding allocable to the Five Press Facility and the Six Press Facility, and at a later date The Times constructs the Six Press Facility and the total square footage of the Six -41- Press Facility is less than the Target Building Size for the Six Press Facility, The Times will not be required to refund any portion of the $4,500,000 Funding allocable to the Five Press Facility and the Six Press Facility. (iii) Notwithstanding anything to the contrary contained herein, except as set forth in Sec.2.4 herein with respect to an abandonment of the Project, The Times shall not be in default of this Agreement or otherwise be required to reimburse any portion of the Funding previously disbursed to The Times in accordance herewith, if The Times drives piles for any Printing Facility larger than the Minimum Printing Facility and does not subsequently construct such Printing Facility. (d) Notwithstanding anything to the contrary contained herein, the Parties acknowledge and agree that in the event that The Times elects to reconstruct the Whitestone Road as provided in Funding Agreement #4, that certain portion of the Funding allocated pursuant to Sec.2.2(a)(5) herein to Phase Five Construction may be reallocated to Funding Agreement #4 to pay for the eligible costs incurred by The Times in connection with the reconstruction of the Whitestone Road. The actual amount of such portion of the Funding to be so reallocated will be equal to the Total Reimbursement Amount (as such term is defined in Funding Agreement #4), determined in accordance with Sec.2.1(a) of Funding Agreement #4, provided that in no event shall such amount be more than the $3,750,000 allocated hereunder to Phase Five Construction. The Times agrees that it shall not have right to seek the reallocation to Funding Agreement #4 of any portion of the Funding other than the portion of the Funding allocated hereunder to Phase Five Construction, and that once the reallocation of the Funding has occurred; (i) The Times shall have no further right to seek any additional reallocation and (ii) any portion of the -42- $3,750,000 not reallocated to Funding Agreement #4 shall remain allocated to Phase Five Construction. Sec.2.3 Disbursements. (a) Subject to satisfaction of, and in accordance -------------- with the terms and conditions of this Article Two, Article Four and Article Five hereof, and provided that neither EDC nor the City shall have commenced an action to terminate this Agreement or the Lease, as the case may be, due to the existence of an uncured Event of Default under this Agreement or an uncured "Event of Default" (as defined in the Lease) under the Lease, as the case may be, EDC shall disburse the Funding to The Times after receipt by EDC of all items required by Sec.4.2 hereof, in installments equal to, the amount of the requested disbursement set forth in each Requisition, which amount shall be equal to, as appropriate in each instance, either (A) the product of (i) the schedule of values of the Eligible Costs for which disbursement is sought and (ii) the percentage of the Construction Work indicated on such schedule of values then completed (as certified by the Architect or the Engineer of Record), less the sum of the following: (x) an amount equal to the retainage, if any, retained by The Times or its Construction Manager or General Contractor, as the case may be (the "Retainage"); (y) the total amount previously disbursed by EDC hereunder with respect to such Eligible Costs, if any; and (z) the total amount otherwise previously disbursed to The Times for the Construction Work that at the time of the disbursement request was ineligible for reimbursement with the Funding pursuant to any provision of this Agreement, or (B) the product of (i) the quantities of materials installed at the Premises and (ii) the unit price for such materials, less the sum of the following: (x) an amount equal to the Retainage; (y) the total amount previously disbursed by EDC hereunder with respect -43- to such materials, if any, and (z) the total amount otherwise previously disbursed to The Times for such materials that at the time of the disbursement request was ineligible for reimbursement with the Funding pursuant to any provision of this Agreement; provided, however, that any amounts requested for the payment of Site Preparation Work shall be requisitioned and disbursed in accordance with (B) above only. (b) All disbursements shall be made by check at the principal office of EDC, or at such other place within the City of New York as EDC may designate. Disbursement requests shall be submitted within the time periods and in the manner provided therefor in Article 4. (c) No portion of the Funding shall be advanced for materials not incorporated into the Premises. (d) Disbursements of the Funding shall be no more frequent than once every thirty (30) days and shall be made within ten (10) Business Days after the date EDC receives from The Times a complete disbursement request, reasonably satisfactory to EDC, together with the Requisition and all such other documentation, as may be reasonably required or requested by EDC in support of such Requisition. Notwithstanding anything to the contrary contained herein, The Times shall not submit the first Requisition prior to the Construction Commencement Date and shall not submit any Requisition for the disbursement of funds related to a particular Construction Phase unless The Times has commenced, or has caused the commencement of, the driving of piles for the foundation related to such Construction Phase. -44- Sec.2.4 The Times's Abandonment of the Project. (a) Notwithstanding ------------------------------------------ anything to the contrary contained herein, if, at any time during the Term, The Times "abandons the Project" as such phrase is described in clauses (i) through (iv) of Sec.2.4(c) hereof, EDC shall have the right to terminate this Agreement and cease all further disbursements of the Funding, and The Times shall reimburse EDC dollar for dollar for the Funding or any portion thereof disbursed by EDC prior to the date of such abandonment substantially in accordance with the illustration for such reimbursement set forth in the "Reimbursement Schedule" attached hereto as Appendix C and hereby made a part hereof, including interest thereon at the rate of the lesser of either (x) nine percent (9%) per annum or (y) the City's cost of borrowing, from the date on which EDC disbursed such funds to The Times until The Times fully reimburses EDC for such funds (the amount of Funding to be reimbursed to EDC in accordance with the foregoing sentence, together with the interest accrued thereon, is referred to as the "Reimbursement Amount"). Notwithstanding anything to the contrary contained herein, if The Times "abandons" the Project as such phrase is described in clause (v) of Sec.2.4(c) hereof, EDC shall have the right to terminate this Agreement and cease all further disbursements of the Funding, and The Times shall reimburse EDC in an amount equal to the Funding or any portion thereof disbursed by EDC prior to the date of such abandonment amortized over time substantially in accordance with the illustration for such amortization set forth in the "Amortized Reimbursement Schedule" attached hereto as Appendix C-1 and hereby made a part hereof, including interest thereon at the rate of (i) the lesser of either (x) nine percent (9%) per annum or (y) the City's cost of borrowing, from the date on which EDC disbursed such funds to The Times until The Times fully -45- reimburses EDC for such funds (the amount of Funding to be reimbursed to EDC in accordance with the foregoing sentence, together with the interest accrued thereon, is referred to as the "Amortized Reimbursement Amount"). Unless The Times elects to exercise its option to purchase the Premises in accordance with Article 21 of the Lease (in which case The Times shall pay to EDC the Reimbursement Amount or the Amortized Reimbursement Amount, as applicable, prior to such purchase as more particularly set forth in Article 21 of the Lease), The Times shall reimburse such funds to EDC (together with any interest accrued thereon) in equal quarterly installments commencing on the Abandonment Date and continuing thereafter for a period of five (5) years. The Times shall have the right, at any time during such five (5) year period, to prepay all or any portion of the Funding to be reimbursed (together with any interest accrued thereon), without penalty or premium. (b) Intentionally omitted. (c) For purposes hereof, The Times shall be deemed to have "abandoned" the Project upon the occurrence of any of the following: (i) The Times notifies EDC, in writing, that it intends to abandon the Project as of the date specified in such notice, or (ii) at any time during the period between the Commencement Date and the Operational Date, The Times permanently relocates substantially all of the jobs and/or functions directly related to the printing, collating, bundling and distribution of the New York -------- Times newspaper located, on the date of this Agreement, at The ----- Times's 43rd Street facility (the "43rd Street Facility"), to -46- another facility outside of New York City, or (iii) at any time after the Construction Commencement Date, The Times fails to make reasonable and diligent efforts to construct the Minimum Printing Facility to completion, and as a result of such failure The Times shall not Substantially Complete construction of the Minimum Printing Facility by the Scheduled Completion Date (subject to Unavoidable Delays), and such failure continues for thirty (30) days after written notice from the landlord under the Lease and/or EDC, or (iv) by the date (the "Outside Operation Date") which is five (5) years after Substantial Completion of construction of the Minimum Printing Facility, The Times shall have failed to equip such Minimum Printing Facility with four printing presses and such other equipment as is necessary to enable such Minimum Printing Facility to be operational primarily for the printing, collating, bundling and distribution of newspapers, magazines and other periodicals or printed materials and to commence the operation of such Minimum Printing Facility, or (v) at any time after the date on which The Times commences the operation of the Minimum Printing Facility for the printing, collating, bundling and distribution of newspapers, magazines and other periodicals or printed materials (the "Operational Date"), The Times ceases such operation and, after a five (5) year period (subject to Unavoidable Delays), fails to resume the operation of such Minimum Printing Facility as a major printing facility -47- serving the New York City metropolitan area and such failure continues for thirty (30) days after written notice from the landlord under the lease and/or EDC. The "Abandonment Date" shall be either, (I) the date specified in the notice described in clause (i) above, (II) the date on which The Times permanently relocates substantially all of the jobs and/or functions directly related to the printing, collating bundling and distribution of the New York -------- Times newspaper located at the 43rd Street Facility to another facility - ----- outside of New York City, (III) the date which is thirty (30) days after the notice described in clause (iii) above (provided, that prior to the expiration of such thirty (30) day period, The Times has not commenced to cure the failure described in such notice), (IV) the Outside Operational Date, or (V) the date which is thirty (30) days after the notice described in clause (v) above (provided, that prior to the expiration of such thirty (30) day period, The Times has not commenced to cure the failure described in such notice). (d) Notwithstanding anything to the contrary contained in this Sec.2.4, The Times shall not be deemed to have "abandoned" the Project as defined in Sec.2.4(c) above, if it assigns its interest in the Lease in accordance with the provisions of the Lease and the assignee of such interest in the Lease performs, or continues to perform, the obligations of The Times set forth in the Lease with respect to the construction, equipping and operation of the Minimum Printing Facility. (e) The provisions of this Sec.2.4 shall survive the expiration or termination of this Agreement. -48- ARTICLE THREE - TERM -------------------- Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon ----- the execution of this Agreement by both Parties and the unconditional delivery of this Agreement by each Party to the other (the "Commencement Date") and shall expire upon the earlier to occur of (i) the complete disbursement by EDC of up to either (x) $15,000,000 of the Funding if The Times commenced the Phase One Construction on or prior to the Fourth Anniversary Date or (y) $16,000,000 of the Funding if The Times commenced the Phase One Construction after the Fourth Anniversary Date, (ii) the Abandonment Date, (iii) the expiration or earlier termination of the term of the Lease (including by reason of The Times's exercise of its right to purchase the Premises in accordance with Article 21 of the Lease), or (iv) the termination of this Agreement as hereinafter provided. -49- ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT ------------------------------------------ Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to ---------------------------------- disburse any of the Funding to The Times unless, at any time prior to or simultaneously with the first request for disbursement of the Funding but no later than ten (10) days prior to the date on which the first payment of the Funding to be made pursuant to this Agreement with respect to each Segment, Construction Phase or Aggregated Construction Phase is sought (except as otherwise specified herein), EDC shall have received the following documents, together with a cover sheet (a "Completed Cover Sheet") listing the items submitted: (a) if not previously submitted by The Times, certificates, in form and substance reasonably satisfactory to EDC, evidencing the insurance policies referred to in Appendix B, and in accordance with the sections of Article 7 of the Lease that are in effect during construction of any Segment, Construction Phase or Aggregated Construction Phase, naming the City and EDC as additional insureds, providing not less than thirty (30) days notice of cancellation to the City and EDC; provided, however, that EDC shall also have the right to review at the offices of The Times, and make copies of, the originals of the policies evidenced by such certificates, upon written request therefor; (b) intentionally omitted; (c) a legal opinion by counsel to, or general counsel of, The Times (addressed to EDC), in the form annexed hereto as Exhibit A, to the effect that (I) this Agreement is legal, valid and binding upon and enforceable against The -50- Times in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), and (II) The Times has been duly authorized to execute and deliver this Agreement; (d) copies of any then executed Construction Contract(s) (and any then executed first level subcontracts entered into between the Construction Manager or the General Contractor and a contractor with respect to which The Times is seeking reimbursement) for the performance of the Construction Work, containing all the provisions required pursuant to Sec.1.2(c) hereof and trade payment breakdown's and/or a schedule of values of Eligible Costs with respect to which The Times is then seeking reimbursement; (e) if not previously submitted by The Times, a set of the Plans and Specifications with respect to the Segment, Construction Phase or Aggregated Construction Phase then being constructed bearing the stamp of the Architect or Engineer of Record; (f) a collateral assignment by The Times to EDC of The Times' right, title and interest to the Plans and Specifications for the Segment, Construction Phase or Aggregated Construction Phase then being constructed, subject to any commercially reasonable rights or reservations reserved by the Architect or Engineer of Record (it being understood that if EDC exercises its rights under such collateral assignment, EDC shall, as of the date of such assignment, assume all of the future obligations and liabilities of The Times with respect -51- to such Plans and Specifications); and (g) a certificate, in the form annexed hereto as Exhibit B, of an authorized officer of The Times certifying the specimen signature of each officer, director or agent of The Times authorized to deliver Requisitions under this Agreement. Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC ------------------------------------------------------------- shall not be obligated to make the first disbursement of the Funding or any subsequent disbursement with respect to each Segment, Construction Phase or Aggregated Construction Phase unless, in addition to the conditions contained in Sec.4.1, the following documents, in form and substance reasonably satisfactory to EDC, together with a Completed Cover Sheet, shall, except to the extent previously submitted by The Times, be delivered to EDC at least ten (10) days in advance of the date on which each (except as otherwise indicated in this Sec.4.2) payment is sought: (i) copies of all Approvals necessary to lawfully perform the Construction Work for which the Funding is being sought in accordance with the Plans and Specifications; (ii) a requisition executed and certified by an authorized representative of The Times (and addressed to EDC), setting forth (w) the amount of the requested disbursement, (x) a schedule of values of the Eligible Costs for which the disbursement is sought indicating the amount requested for each item for which disbursement is sought, (y) a certification by such authorized representative, that each item of Eligible Costs has not previously been -52- reimbursed under this Agreement, and (z) a list of Contractors, and subcontractors and material suppliers of such Contractors whose work is covered by the requisition and whose total contract price exceeds $50,000, indicating the amount requested with respect to each such Construction Contract or subcontract. The requisition shall be accompanied by the certification described in Sec.6.1 hereof and copies of (I) all Construction Contracts (and first level, direct subcontracts of the Construction Manager or General Contractor) on account of which payment is being sought that have not been previously delivered, containing all the provisions required pursuant to Sec.1.2(c) hereof and trade payment breakdowns and/or a schedule of values of Eligible Costs with respect to such contract (or for Construction Contracts and subcontracts that have been previously delivered, a statement to that effect and copies of any amendments thereof); (II) a copy of an "Application and Certificate for Payment", substantially in the forms annexed hereto as Exhibit C, completed and executed by the Construction Manager or the General Contractor (as the case may be), with respect to all work performed by Contractor(s), subcontractors and material suppliers covered by The Times's requisition, together with a statement of the Architect, Engineer of Record or Construction Manager addressed to EDC that, to the Architect's, -53- Engineer of Record's or Construction Manager's knowledge, the Construction Work performed by the Contractor, subcontractor and material suppliers covered by the requisition (A) has been performed to the Architect's, Engineer of Record's or Construction Manager's reasonable satisfaction substantially in accordance with the Plans and Specifications and (B) has been performed in accordance with the Requirements, and stipulating, in the Architect's, Engineer of Record's or Construction Manager's professional opinion, the percentage of the Construction Work that has been completed or, as the case may be, the quantities of materials installed; (III) in connection with each disbursement request other than the first disbursement request, partial releases of liens from all Contractors (and first level, direct subcontractors of the Construction Manager or General Contractor), in respect to Construction Work completed under a Construction Contract or subcontract and for which the Eligible Costs incurred in connection therewith have been reimbursed with the Funding pursuant to a prior Requisition; and (IV) invoices from first level, direct subcontractors of the Construction Manager or General Contractor in support of the amount being requisitioned (the items described in this paragraph (ii), collectively the "Requisition"); (iii) (A) in connection with the first such disbursement, a photostatic copy of the current title report by a title insurer reasonably satisfactory to EDC (EDC hereby acknowledging that Chicago Title Insurance Company, First American Title Insurance Company, Ticor Title Guarantee Company or any of their respective affiliates are reasonably satisfactory title insurers) containing a description of the Premises, and UCC, judgment and federal tax lien searches against the Premises; (B) in connection with subsequent disbursements, a -54- photostatic copy of a certificate of title continuation indicating no change in the state of title and no survey exceptions or liens in excess of $250,000 not contemplated by the development of the Premises pursuant to this Agreement or previously approved by EDC; (iv) such additional documents, data or information reasonably requested by EDC within ten (10) days after EDC's receipt of the Requisition with respect to the Premises and the Construction Work or in support of the Requisition that are customarily requested by EDC when funding or paying for work similar to the Construction Work and without which EDC could not reasonably be expected to disburse the Funding prior to the receipt thereof; provided however, that in no event shall EDC withhold or delay any portion of the Funding to which such additional documents, data or information do not apply; and (v) with respect to each Contractor and each first level, direct subcontractor of the Construction Manager or General Contractor performing Construction Work for which Funding is being requisitioned, a written statement by DLS certifying that such Contractor or subcontractor has complied with the City's equal employment requirements under mayoral Executive Order No. 50 (April 25, 1980), as amended, if applicable, or evidence from The Times or DLS that Executive Order No. 50 or its successor does not apply; it being understood that such written statement or other satisfaction by DLS for such Contractor or subcontractor only needs to be submitted at the time of the submission of the first requisition covering such Contractor's or subcontractor's work and -55- that the noncompliance of any one such Contractor or subcontractor shall only affect EDC's funding obligations relating to Construction Work performed by such Contractor or subcontractor and shall not in any way affect EDC's funding obligations with respect to Construction Work performed by other Contractors or subcontractors in compliance, and it being further understood that, notwithstanding anything to the contrary contained herein, for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees, the trainee requirements of Executive Order No. 50 shall not be applicable to the Construction Work, the Contractors and the subcontractors and the Contractors and the subcontractors shall in no event be deemed to be in noncompliance with Executive Order No. 50 due to noncompliance with such trainee requirements. Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this ------------------------- Article Four shall be directed to EDC's Vice President for Construction. -56- ARTICLE FIVE ------------ REPRESENTATIONS, WARRANTIES AND GUARANTIES OF THE TIMES ------------------------------------------------------- To induce EDC to disburse the Funding, The Times represents and warrants as follows: Sec.5.1 Organization; Standing. The Times is a corporation duly organized ----------------------- and validly existing under the laws of the State of New York and has all requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. A copy of The Times's certificate of good standing from the Secretary of State of the State of New York is attached hereto as Appendix D, and hereby made a part hereof. Sec.5.2 Intentionally Omitted. Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery -------------------------------------- of this Agreement by The Times is not, and the performance of this Agreement by The Times will not be, effectively prohibited or prevented by, or in breach of (i) the certificate of incorporation or by-laws of The Times, (ii) to the best of The Times's knowledge, any presently existing or effective law, judgment, order, writ, injunction, decree, rule or regulation of any court or Governmental Authority applicable to The Times, or (iii) any agreement, instrument or undertaking which is binding on The Times. -57- Sec.5.4 No Litigation. As of the date of this Agreement there are no -------------- suits or proceedings pending or, to the best of The Times's knowledge, threatened against The Times which would materially affect the development and improvement of the Premises, the consummation of the transactions contemplated by this Agreement, or the full performance of the obligations of The Times under this Agreement. -58- ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC ------------------------------------------------------ To induce The Times to enter into this Agreement and perform the Construction Work, EDC represents and warrants as follows: Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation, ------------------------ organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation Laws and has all the requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has -------------------------------------------- been duly authorized, executed and delivered by EDC and constitutes a legally binding obligation of EDC enforceable in accordance with its terms. A legal opinion by general counsel of EDC (addressed to The Times) providing that this Agreement is legal, valid and binding upon and enforceable against EDC in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), is attached hereto as Appendix E and hereby made a part hereof. A certificate of the Secretary of EDC, dated as of the date of this Agreement, certifying to the adoption of resolutions by the Board of Directors of EDC authorizing the execution and delivery of this Agreement by EDC is attached hereto as Appendix F and hereby made a part hereof. -59- ARTICLE SIX ----------- COVENANTS --------- Sec.6.1 Requisitions Update The Times's Representations. The Times ------------------------------------------------- covenants that each Requisition presented to EDC under Article Four shall be accompanied by a completed certification, in the form attached hereto as Exhibit D. Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the ------------------------------------------------------- Term, The Times shall: (a) comply with all of the terms, conditions and covenants now or in the future binding upon or applicable to The Times under this Agreement; and (b) do all things necessary to maintain and keep in full force and effect its existence, rights and privileges under the laws of the State of New York. Sec.6.3 Maintenance of and Compliance with Insurance Requirements. If the ---------------------------------------------------------- Times elects to obtain and maintain commercial general liability insurance written under a "wrap around" program for the entire Project, The Times shall maintain or cause to be maintained at The Times's expense such insurance in the amounts and in accordance with the applicable provisions, set forth in Article 7 of the Lease. The Times shall comply with all of the applicable provisions of such insurance policies. Nothing contained in this Sec.6.3 is intended to confer any rights upon any third party. -60- Sec.6.4 Maintenance of Office. The Times will maintain an office in the ---------------------- City of New York where notices with respect to this Agreement may be delivered to it and inspections and audits in accordance with Sec.6.7 hereof may be conducted. Sec.6.5 Compliance with Applicable Law. (a) The Times shall include the ------------------------------- following requirements, as applicable, in all Construction Contracts, and shall require, or cause to be required, all subcontracts with respect to the Construction Work to include the same requirements, so that the Contractor(s) and any subcontractors and materials suppliers shall agree, in substance, with respect to the Construction Work, the following: (i) to comply with (1) the applicable provisions of City and New York State equal employment and affirmative action laws applicable to construction contractors, which are annexed to and made a part of this Agreement as Appendix G (consisting of "Construction Contract Rider" pursuant to mayoral Executive Order No. 50, provided, however that the trainee requirements set forth therein shall be inapplicable for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees), and the filing of any required construction employment reports with DLS on the forms annexed hereto as Appendix H, (2) New York State Labor Law Sec.220-e, and (3) City Administrative Code Sec.6-108; (ii) to comply with the applicable provisions of the New York City Noise -61- Control Code (Administrative Code Sec.24-216, as amended, and related regulations); and (iii) to pay no less than prevailing wage rates and supplemental benefits to laborers, workers and mechanics pursuant to Sec.220(3) of the New York State Labor Law in accordance with the currently scheduled rates, as amended from time to time. (b) The Times shall use its good faith efforts to promptly, diligently and continuously enforce the full and faithful compliance by the Contractors with whom The Times enters into Construction Contracts with the provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith efforts to cause such Contractors to enforce such compliance by the subcontractors and materials suppliers hired by such Contractors in connection with the Construction Work. Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall ----------- not assign this Agreement, except that The Times may assign this Agreement without EDC's prior written consent to an Affiliate or to any assignee to which The Times is permitted to assign its interest in the Lease pursuant to the terms thereof; provided that such assignee performs, or continues to perform, the obligations of The Times set forth in the Lease with respect to the construction, equipping and operation of the Minimum Printing Facility and does not "abandon" the Project, and further provided that (i) such Affiliate or assignee assumes all the rights and obligations of The Times under this Agreement, (ii) all the representations, warranties and covenants made by The Times in this Agreement shall be similarly made by -62- such Affiliate or assignee, and (iii) The Times provides to EDC a copy of the executed written agreement evidencing such assignment and assumption. Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate, ----------------------- readily auditable records and accounts with supporting documentation, in accordance with sound accounting principles, of (i) all of the Eligible Costs, (ii) all of its receipts and expenditures in connection with the Funding, and (iii) all financial accounts and transactions maintained or undertaken in connection with this Agreement as it relates to Eligible Costs. The Times shall make such records available for inspection and audit at The Times's place of business within New York City by EDC and the City at reasonable times and upon reasonable advance notice. All such records and accounts shall be maintained for a period of six years after the completion of the Construction Phase to which such records and accounts apply. The provisions of this Sec.6.7 shall survive the expiration or earlier termination of this Agreement. Sec.6.8 Intentionally omitted. Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and ------------------------------------ hold the proceeds of the Funding (including any insurance proceeds arising out of any casualty affecting property purchased with the Funding prior to substantial completion of any Segment, Construction Phase or Aggregated Construction Phase) as a trust fund to be applied exclusively for the payment of Eligible Costs (or reimbursement to The Times for -63- the payment of Eligible Costs) in accordance with the terms of this Agreement and, except for such insurance proceeds which are in excess of the amount necessary to pay for materials, equipment or other property purchased or reimbursed with the Funding prior to substantial completion of any Segment, Construction Phase or Aggregated Construction Phase, shall not use any part of the same for any other purpose. Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of ----------------------------- the Funding shall not constitute a waiver of any default by The Times on account of defective construction work in performance of the Construction Work or deviation from the Plans and Specifications. No part of the Funding shall be disbursed for the correction of non-conforming work. Sec.6.11 Participation by Women and Minority Owned Businesses ---------------------------------------------------- (a) EDC is committed to maximizing meaningful participation by women- owned business enterprises ("WBEs") and minority-owned business enterprises ("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its contracting opportunities. In accordance therewith, The Times agrees to cause to be awarded at least $4 million of the Project Work (the "Guaranteed W/MBE Participation Dollar Value") to W/MBEs and to use its good faith efforts to cause to be awarded an additional $6 million of the Project Work (the "Good Faith W/MBE Participation Dollar Value") to W/MBEs. The Project Work with respect to which the Guaranteed W/MBE Participation Dollar Value is fulfilled and to which good faith efforts are used to fulfill the Good Faith W/MBE Participation -64- Dollar Value may or may not, in the sole discretion of The Times, include all or any portion of the Construction Work. (b) In order to achieve the Guaranteed W/MBE Participation Dollar Value and to use good faith efforts to achieve the Good Faith W/MBE Participation Dollar Value, The Times will (subject to its right described in Sec.6.11(c)(iii) below to utilize alternative methods to achieve the Guaranteed W/MBE Participation Dollar Value and to use good faith efforts to achieve the Good Faith W/MBE Participation Dollars Value) instruct its Construction Manager (or its Contractors, as the case may be) to identify, and cause its subcontractors and material suppliers to the extent reasonably feasible to identify, (i) those portions or aspects of the Project Work that such Construction Manager (or Contractors, or their subcontractors or material suppliers) intends to competitively bid and with respect to which the Construction Manager (or Contractors, or their subcontractors or material suppliers) believes there are available, locally, W/MBEs that are equally or substantially equally qualified or acceptable to perform such portions or aspects of the Project Work as are the non-W/MBE contractors, subcontractors or material suppliers that such Construction Manager (or Contractor, or its subcontractors or material suppliers) intends to include on its bid list for such portions or aspects of the Project Work, and (ii) one or more W/MBEs that the Construction Manager (or Contractors, or their subcontractors or material suppliers) believe are available locally and that are equally or substantially equally qualified or acceptable to perform the portions or aspects of the Project Work that are identified in accordance with (i) above. The Times will (subject to its right described in Sec.6.11(c)(iii) below to utilize alternative methods to achieve the Guaranteed W/MBE Participation -65- Dollar Value and to use good faith efforts to achieve the Good Faith W/MBE Participation Dollar Value) further instruct its Construction Manager (or Contractors) to include, or cause its subcontractors and material suppliers to the extent reasonably feasible to include, at least one such W/MBE on each bid list for each such portion or aspect of the Project Work that the Construction Manager (or Contractors, or their subcontractors or material suppliers) intends to competitively bid with respect to which there are such equally or substantially equally qualified or acceptable W/MBEs. Once a quarter, commencing with the three (3) month anniversary of the date The Times commenced construction of any Segment, Construction Phase or Aggregated Construction Phase of the Project and every three (3) months thereafter until both the Guaranteed W/MBE Participation Dollar Value and the Good Faith W/MBE Participation Dollar Value have been achieved, The Times shall provide EDC with a status report (the "W/MBE Report") as to (x) the dollar value of contracts with respect to the Project Work theretofore awarded to W/MBEs, the identities of such W/MBEs with a trade breakdown, and a statement as to whether each such W/MBE was the lowest bidder, and (y) the identities of all W/MBEs theretofore included in bid lists with respect to the Project Work who were not selected, with a trade breakdown, and a statement as to whether each such W/MBE was the lowest bidder. Notwithstanding anything to the contrary contained herein, The Times's failure to provide EDC with the W/MBE Report shall not constitute a material default the occurrence of which would give EDC the right to terminate this Agreement in accordance with Sec.7.1(c) hereof unless such failure continues after receipt of written notice from EDC requesting that The Times provide the W/MBE Report within ten (10) days of such notice, in which event EDC may -66- give the twenty (20) Business Day notice required by Sec.7.1(c) to establish that an Event of Default has occurred. (c) Nothing contained in this Sec.6.11 shall be construed to (i) require The Times or its Construction Manager (or Contractors, or their subcontractors or material suppliers) to select a W/MBE that is not the lowest bidder (except to the extent that they may elect to do so, in their sole discretion, in order to achieve the Guaranteed W/MBE Participation Dollar Value), (ii) require The Times or its Construction Manager (or Contractors, or their subcontractors or material suppliers) to solicit bids with respect to all portions or aspects of the Project Work, (iii) prevent The Times from utilizing alternative methods to achieve the Guaranteed W/MBE Participation Dollar Value and to use good faith efforts to achieve the Good Faith W/MBE Participation Dollar Value; provided, however, that The Times shall provide EDC with reasonable advance notice of its decision to utilize alternative methods and a reasonable opportunity to comment on, and/or consult with, The Times as to the characteristics of such alternative methods, or (iv) require The Times or its Construction Manager (or Contractors, or their subcontractors or material suppliers) to continue to utilize any of the procedures set forth in Sec.6.11(b) above, or any other procedure adopted by The Times in accordance with clause (iii) above, to maximize participation by W/MBEs after such time as The Times has achieved both the Guaranteed W/MBE Participation Dollar Value and the Good Faith W/MBE Participation Dollar Value. In the event that the number of W/MBEs submitting lowest bids are insufficient to achieve the Guaranteed W/MBE Participation Dollar Value, The Times shall nonetheless achieve the -67- Guaranteed W/MBE Participation Dollar Value by means selected by The Times in its sole discretion, which means may, but shall not be required to, include selecting W/MBEs that do not submit the lowest bids. (d) In order to be considered W/MBEs for purposes hereof, WBEs and MBEs must have received certification, as WBEs and/or MBEs, from the New York City Department of Business Services ("DBS"). Businesses that have been certified as being women or minority owned by the New York State Department of Economic Development or the Port Authority of New York and New Jersey may be eligible to receive expedited certification from DBS, after completing the DBS "Expedited Certification Affidavit" in the form of Exhibit E attached hereto. Each of these entities maintain current lists of certified W/MBEs. The Times is encouraged to contact these entities in order to obtain copies of their current lists of certified W/MBEs who may be qualified to participate, either as Contractors, subcontractors or materials suppliers, in the Project Work. In the event that EDC is unable to verify that one or more of the W/MBEs included in the W/MBE Report has been certified as a WBE or MBE by DBS, The Times shall submit verification acceptable to EDC showing that all W/MBEs identified in the W/MBE Report are certified as WBEs and/or MBEs by DBS. (e) The Times shall provide for the participation of W/MBEs in the Project Work at a level at least equal to the Guaranteed W/MBE Participation Dollar Value. Both the Guaranteed W/MBE Participation Dollar Value and the Good Faith W/MBE Participation Dollar Value are a part of this Agreement. The Times cannot reduce the Guaranteed W/MBE Participation Dollar Value or the Good Faith W/MBE Participation Dollar Value. -68- Sec.6.12 No Liens. The Times will cause the Project to be constructed --------- free and clear of liens of mechanics, material persons and suppliers, including public improvement liens, or claims for any such liens in excess of $250,000 subject to The Times's right to cause any such lien to be removed or bonded within sixty (60) days after the placement of such lien. Sec.6.13 Intentionally omitted. Sec.6.14 Intentionally omitted. Sec.6.15 Intentionally omitted. Sec.6.16 MacBride Principles. The Times hereby agrees that with respect --------------------- to any Construction Contract entered into for the performance of the Construction Work and for which The Times intends to, or does in fact, seek reimbursement therefor with the Funding, The Times shall (i) include in such Construction Contract the requirements of the MacBride Principles Rider, attached hereto as Appendix J, and (ii) require its Contractors (A) to comply with the applicable covenants and representations set forth in Appendix J, and (B) to cause its contractors, subcontractors, and materials suppliers performing work pursuant to Construction Contracts receiving Funding, to also comply with the requirements of Appendix J. Notwithstanding anything to the contrary contained herein, the provisions of this Sec.6.16 shall not apply to any contractor, subcontractor or materials supplier with respect to which there is not another contractor, subcontractor or materials supplier to perform -69- work or supply materials of comparable quality at a comparable price. Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion ------------------------ of the Funding to The Times shall not constitute a waiver of EDC's right to require compliance with any of the covenants contained in this Article Six or otherwise contained in this Agreement. -70- ARTICLE SEVEN - DEFAULT ----------------------- Sec.7.1 Events of Default. An "Event of Default" shall exist if any of ------------------ the following shall have occurred: (a) intentionally omitted. (b) if The Times shall have applied the Funding in violation of the covenant set forth in Sec.6.9 and such misapplication was not corrected within ten (10) Business Days after receipt of written notice thereof; or (c) if The Times fails to duly observe or perform any of the material covenants and agreements contained in this Agreement (other than the covenants contained in Sec.6.9) and if such failure continues for twenty (20) Business Days after receipt of written notice to The Times by EDC specifying with particularity such material default and requiring such material default to be remedied; provided, however, that if because of Unavoidable Delays or if the nature of the default is such that The Times cannot reasonably be expected to cure the same within such period, then such material default shall not be an Event of Default if, within such period (subject to Unavoidable Delays), The Times commences in good faith to cure such material default and (subject to Unavoidable Delays) diligently prosecutes such cure to completion; or (d) if an "Event of Default" (as defined in the Lease) has occurred under the Lease and EDC has taken action to terminate the Lease in accordance with the terms thereof; or (e) if any representation or warranty by The Times contained in this Agreement -71- shall be materially false when made or reaffirmed and such representation or warranty materially adversely affects The Times's ability to enter into this Agreement and perform the Project Work in accordance with the terms hereof. Sec.7.2 Default Remedies; Exculpation. ------------------------------ (a) Except as otherwise set forth in Sec.7.2(d)(ii) and Sec.9.11 hereof, The Times Indemnitees shall not be liable for consequential damages under this Agreement. (b) Upon an Event of Default, EDC may exercise any right or remedy permitted to it by law, in equity, or under this Agreement, including, without limitation, the right to obtain restitution of any portion of the Funding which is applied by The Times, The Times's employees, agents or contractors in violation of Sec.6.9, with interest from the date of EDC's disbursement at the Late Charge Rate. Without limiting the generality of the foregoing, upon an Event of Default, EDC shall have the right to elect to terminate this Agreement (reserving, however, all remedies provided in this Article Seven or existing otherwise) or, with respect to an Event of Default described in Sec.7.1(b) or (d) above, to make no further disbursements until such Event of Default is remedied or determined not to be an Event of Default. With respect to an Event of Default described in Sec.7.1(c) above, EDC shall have the right to elect to terminate this Agreement or to make no further disbursements until such Event of Default is remedied: provided, however, that in the event that The Times disputes EDC's determination that an Event of Default described in Sec.7.1(c) above has occurred, The Times shall have the right to submit such dispute to arbitration in accordance -72- with the provisions of Article 34 of the Lease and if the arbitrator decides that no Event of Default as described in Sec.7.1(c) above has occurred, EDC shall immediately disburse to The Times all of the Funding that, under the terms of this Agreement, should have been disbursed to The Times during the period of the dispute with interest at the Short Term Late Charge Rate and recommence the further disbursement of the Funding, as appropriate. (c) Subject to the provisions of Sec.7.2(d) hereof, the liability of The Times under this Agreement for damages or otherwise shall be limited to (i) The Times's interest in any sums advanced hereunder but not heretofore expended by it and (ii) the proceeds of any insurance policies covering or relating to the Construction Work or the Premises (to the extent of the Funding advanced under this Agreement and actually received by The Times). In no event shall EDC look to the property or assets of any of the individuals who are the directors, officers, employees, shareholders, agents or servants of The Times, and no property or assets of any of the aforesaid Persons shall be subject to levy, execution or other enforcement procedure for the satisfaction of The Times's obligations under this Agreement, except in the event such individual has misapplied the Funding as described in Sec.7.2(d) hereof and then only to the extent of the actual dollar amount that such individual has misapplied the Funding; provided, however, that if such misapplication was the result of such individual's fraudulent conduct, such individual's liability shall be as set forth in Sec.7.2(d)(i) below. (d) (i) Each of the individuals described in Sec.7.2(b) above shall be personally liable (as distinguished from collective liability), to the full extent provided by law, in equity, -73- and by this Agreement if any such relevant individual shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct, in which case such liability shall not be limited as provided above. (ii) The Times shall be liable, to the full extent provided by law, in equity, and by this Agreement if The Times shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct on the part of The Times as opposed to the fraudulent conduct of an individual not authorized by The Times to act in such a manner, in which case such liability shall not be limited as provided above. (e) No course of dealing on the part of EDC or any failure on the part of EDC to exercise any right shall operate as a waiver of such right or otherwise prejudice EDC's remedies. No right or remedy conferred upon or reserved to EDC is intended to be exclusive of any other right or remedy. Every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as EDC may deem appropriate. -74- The exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of EDC in exercising any right or remedy occurring upon an Event of Default shall impair any such right or remedy or constitute a waiver of or acquiescence in such Event of Default. (f) The provisions of this Sec.7.2 shall survive the expiration or termination of the Term. -75- ARTICLE EIGHT - NOTICES ----------------------- Sec.8.1 Notices. All notices under this Agreement shall be in writing and -------- shall be deemed to have been sufficiently given or served for all purposes as of the date when sent by hand, or by national overnight courier service, or by certified or registered mail, return receipt requested, addressed as follows (or to such other addresses as may from time to time be designated by EDC or The Times by notice delivered to the other in accordance with this Section): (i) if to EDC: New York City Economic Development Corporation 110 William Street New York, N.Y. 10038 Attention: President with a copy via ordinary mail to General Counsel, at the same address and to: New York City Law Department 100 Church Street New York, New York 10007 Attention: Chief, Economic Development Division; (ii) if to The Times: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Solomon B. Watson, IV, Esq. General Counsel -76- with a copy via ordinary mail to David Thurm, Executive Director of Project Development, at the same address and with a copy in the same manner sent to The Times to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin Polevoy, Esq. Sec.8.2 Disbursement Submissions. All Requisitions and other submissions ------------------------- for disbursements required to be made pursuant to Article Four of this Agreement shall be addressed as directed in Sec.4.3 hereof. -77- ARTICLE NINE - GENERAL CONDITIONS AND COVENANTS ----------------------------------------------- The following covenants and conditions shall be applicable throughout the Term: Sec.9.1 Conflict of Interests. No member, officer, director or employee ---------------------- of EDC or the City, or their designees, consultants or agents; no member of the governing body of the City and no public official of the City who exercises or exercised any functions or responsibilities with respect to the subject matter of this Agreement during his/her tenure, if known to The Times, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Construction Work or in any activity or benefit arising out of or in connection with the performance of the Construction Work. Upon receiving actual notice or knowledge of any of the circumstances specified in the preceding sentence, The Times shall deliver notice to EDC of the circumstances and immediately shall use good faith efforts to cause the Persons affected to terminate their interest in the prohibited contract or property. The Times shall require the Construction Manager or General Contractor (as the case may be) and the Contractors, subcontractors and materials suppliers to make appropriate representations in writing that they, their employees and principals do not have any conflict of interest prohibited under this Sec.9.1, and to covenant to use good faith efforts to cause the prohibited persons to terminate their interest in the relevant contract or property upon demand by The Times. -78- Sec.9.2 No Liability of Individuals. No officer, employee, director, ----------------------------- member, agent or other person authorized to act on behalf of EDC or the City shall have any personal liability in connection with this Agreement or any default by EDC or the City. Sec.9.3 Anti-Boycott Provisions. ------------------------ The Times hereby covenants and agrees that, to the extent applicable to the Construction Work: (a) The Times is not participating, nor shall it participate during the Term, in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder, (b) upon the final determination by the United States Department of Commerce or any other agency of the United States as to conviction of The Times for participation in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder, EDC may, at its option, declare a default under this Agreement (which default is subject to cure by The Times in accordance with the terms of this Agreement), and (c) The Times shall comply in all respects with the provisions of Sec.6-114 of the Administrative Code of the City and the rules and regulations issued by the Comptroller of the City thereunder. -79- Sec.9.4 Governing Law. The provisions of this Agreement shall be governed -------------- and interpreted in accordance with the laws of the State of New York. Sec.9.5 Liability of EDC. (a) Except as otherwise set forth in Sec.9.11(b) ----------------- hereof, EDC shall not be liable for consequential damages under this Agreement to The Times or to any other Person in any matter arising out of the financing, development and construction of the Project. (b) Notwithstanding any provision to the contrary contained in this Agreement, if (i) EDC defaults in the disbursement of the Funding for which it is obligated, pursuant to the terms of this Agreement, to disburse to The Times or in the payment of any other monetary amount owed to The Times pursuant to the provisions of this Agreement and fails to cure such default within thirty (30) days after The Times delivers notice (the "EDC Default Notice") to EDC of such default, or (ii) the Funding shall not be made available to EDC by the City, in whole or in part for any reason, then, provided that The Times proceeds with the construction of the Project or any Construction Phase thereof, for each dollar not so disbursed or paid by EDC or made available to EDC by the City, The Times shall have the right to (y) offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Fund Payments due under the Lease in an amount equal to the Funding not so disbursed by EDC, and (z) offset against future Rental (other than Impositions and College Point Improvement Fund Payments) due under the Lease in an amount equal to any other monetary amount which EDC is obligated to pay -80- under this Agreement and has not so paid, until such time as EDC recommences the disbursement of the Funding or pays such other monetary amount. The Times agrees that the right to an offset against Rental (other than Impositions) and College Point Improvement Fund Payments as hereinabove described is The Times's sole remedy against EDC arising out of the failure of EDC to receive the Funding from the City, except as otherwise provided in this Agreement. (c) In the event that (i) EDC has defaulted in the performance of any obligation on EDC's part to perform under this Agreement other than the disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of the Funding and continues to be in default thereof after the receipt of the EDC Default Notice and expiration of the thirty (30) day cure period provided therein, The Times shall have all of its rights at law and in equity against EDC. (d) Except as otherwise provided in this Agreement; (i) no course of dealing on the part of The Times or any failure on the part of The Times to exercise any right shall operate as a waiver of such right or otherwise prejudice The Times's remedies, (ii) no right or remedy conferred upon or reserved to The Times is intended to be exclusive of any other right or remedy, (iii) every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as The Times may deem appropriate, and (iv) the exercise of any right or remedy shall not be construed as an election or a waiver of any -81- other right or remedy. No delay or omission of The Times in exercising any right or remedy occurring upon EDC's failure to disburse the Funding in accordance with this Agreement or to otherwise perform its obligations in accordance with the terms of this Agreement shall impair any such right or remedy or constitute a waiver of or acquiescence in any such failure. Sec.9.6 Amendments. This Agreement may not be amended, waived or ----------- terminated orally, but only by an instrument in writing signed by both parties. Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be ----------------------- binding upon and shall inure to the benefit of EDC and The Times and their respective successors and permitted assigns. Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1 -------------------- hereof, The Times acknowledges that the City capital budget dollars which form the Funding are not, and shall not be deemed to be, an assignment of any funds received by EDC from the City. The Times confirms that any right to the Funding arises exclusively under this Agreement. Sec.9.9 Counterparts. This Agreement may be executed in one or more ------------- counterparts which, when taken together, shall constitute one and the same document. -82- Sec.9.10 Interpretation. The provisions of the Lease incorporated by --------------- reference into this Agreement are intended to supplement the other provisions of this Agreement. In the event of any conflict between the Lease provisions and the other provisions of this Agreement relating to the performance of the Project Work, the provisions of the Lease shall control. Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their ---------- respective departments, offices, officers, members, directors, employees and agents shall collectively be referred to as "the Public Parties". The Times shall defend, indemnify and hold harmless the Public Parties, from and against any and all claims, damages (including consequential damages awarded to third parties against the Public Parties), judgments, liabilities and causes of action whatsoever to which they may be subject arising out of the acts or omissions of The Times, its contractors, subcontractors, agents, employees or material suppliers, and any and all Persons, in connection with the performance of the Project Work, or because of any negligence, fault or default of The Times, its contractors, subcontractors, agents, employees or material suppliers. The obligation of The Times to indemnify and hold harmless the Public Parties shall include but not be limited to the payment of any and all costs and reasonable legal fees as may be actually incurred by the Public Parties. The termination of this Agreement shall not release The Times from any liability to the Public Parties arising out of any act or omission of The Times in connection with this Agreement. (b) In this Sec.9.11(b), The Times and its officers, members, directors, employees and agents shall collectively be referred to as "The Times Indemnitees". EDC shall -83- indemnify and hold harmless The Times Indemnitees from and against any and all claims, damages (including consequential damages awarded to third parties against The Times Indemnitees), judgments, liabilities and causes of action whatsoever to which they may be subject to the extent caused as a result of the negligence or misconduct of EDC or its agents or professional consultants arising out of or in connection with EDC's or its agents' or professional consultants' inspections of the Premises or uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC to indemnify and hold harmless The Times Indemnitees pursuant to this Sec.9.11(b) shall include, but not be limited to, the payment of any and all costs and reasonable legal fees as may be actually incurred by The Times Indemnitees in connection with any such claim, damage, judgment, liability or causes of action. The termination of this Agreement shall not release EDC from any liability to The Times Indemnitees described in this Sec.9.11(b). Sec.9.12 No Agency. Neither The Times nor any of its employees, ----------- contractors or subcontractors is, shall be or shall represent that he, she or it is an agent, servant or employee of EDC or the City by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or authorization given by the EDC or the City or any of their officers, agents or employees. The Times shall be solely responsible for the work, direction, compensation and personal conduct of its officers, agents, employees and subcontractors. -84- Sec.9.13 Venue ----- (a) Any and all claims asserted by or against EDC or by or against The Times arising under this Agreement or related hereto shall be heard and determined either in the courts of the United States ("Federal Courts") located in the City or in the courts of the State of New York ("New York State Courts") located in the City of New York. To effect this agreement and intent, EDC and The Times agree and, where appropriate, shall require each Contractor to agree, as follows: (i) If either Party initiates any action against the other Party in Federal Court or in New York State Court, service of process may be made on The Times either in person, or by registered or certified mail (return receipt requested) addressed to the office of the General Counsel of The Times at the address set forth in Article Eight of this Agreement, or to such other address as The Times may provide to EDC in writing, and service of process may be made on EDC, either in person, or by registered or certified mail (return receipt requested) addressed to EDC at its address as set forth in Article Eight of this Agreement, or to such other address as EDC may provide to The Times in writing. (ii) With respect to any action between EDC and The Times in New York State Court, each Party hereby expressly waives and relinquishes any rights it might otherwise have (A) to move to dismiss on grounds of forum non conveniens, (B) to remove to Federal Court wholly outside -85- New York City, and (C) to move for a change of venue to New York State Court outside New York City. (iii) With respect to any action between EDC and the Times in Federal Court located in New York City, each Party expressly waives and relinquishes any right it might otherwise have to move to transfer the action to a Federal Court outside the City of New York. (iv) If either Party commences any action against the other Party in a court located other than in the City and State of New York, then, upon request of the Party against whom the action is brought, the Party bringing the action, shall either consent to a transfer of the action to a court of competent jurisdiction located in the City and State of New York or, if the court where the action is initially brought will not or cannot transfer the action, then to dismiss such action without prejudice, and may thereafter reinstitute the action in a court of competent jurisdiction in New York City. Sec.9.14. Investigations; Cooperation. ---------------------------- (a) Definitions. As used in this Sec.9.14: ------------ (i) "Investigation" shall mean any investigation, audit or inquiry conducted by the Department of Investigation with respect to the obtaining and/or performance of Transaction Documents or any of them, -86- (ii) "Department of Investigation" shall mean the Department of Investigation of the City or any City department or agency succeeding to the functions thereof, (iii) "Commissioner" shall mean the Commissioner or Acting Commissioner of the Department of Investigation, (iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and Economic Development of the City (or the officer of the City succeeding to the functions of that office), (v) "Entity" shall mean any firm, partnership, corporation, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with EDC or the City, (vi) "Member" shall mean any Person associated with another Person or entity as a partner, director, officer, principal or employee, and (vii) "Transaction Documents" shall mean the Lease, this Agreement, Funding Agreement #2, Funding Agreement #3 and Funding Agreement #4. (b) Cooperation with Investigations. Subject to the exclusions set --------------------------------- forth in paragraph (c) of this Sec.9.14, The Times shall during the term of this Agreement: (i) cooperate fully and faithfully, and utilize good faith efforts to cause its Members to cooperate fully and faithfully, with any Investigation; and (ii) report, and utilize its good faith efforts to cause its Members to report, in writing to the Commissioner, any solicitation of which The Times -87- has actual knowledge of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or any other Person, for any purpose relating to the procurement or obtaining and/or performance of any Transaction Document by The Times. (c) Exclusions. The provisions of Sec.9.14(b) above shall not apply: ----------- (i) to any information or document known, prepared or obtained by The Times or its Members (and the sources of such information or documents), that is protected from compelled disclosure by any present or future "Shield Law" or any other statute, constitutional provision, rule, regulation or case law related to the rights of reporters and/or news organizations; (ii) to any Person who refuses to testify based on his or her privilege against self-incrimination after having been given assurances that his or her statement, and any information from such statement, will not be used against such Person in any subsequent criminal proceeding in any forum (provided, however, that any Person given such assurances shall have the right to have the legal sufficiency of such assurances adjudicated by a court of competent jurisdiction as a precondition of the applicability of Sec.9.14(b) to such Person); and (iii) to any construction contract or other agreement (or the obtaining or -88- performance thereof) with parties other than the City or EDC, including without limitation, any contract or agreement being funded through any Transaction Document. (d) Hearing. If The Times or any Member of The Times refuses to -------- testify in an Investigation and, in connection with such failure to testify, the Commissioner determines that The Times has failed to cooperate in the Investigation in violation of the provisions of Sec.9.14(b) hereof, then the Commissioner may request the Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5) days written notice to The Times, to determine if any penalties should be imposed for The Times's failure to so cooperate in accordance with this Sec.9.14. (e) Adjournments of Hearing ----------------------- (i) The Times shall have the right to require that the Hearing be adjourned for a period of not more than thirty (30) days. (ii) The Deputy Mayor may grant other adjournments of the Hearing, in the exercise of his or her reasonable discretion; provided however, that in the case of an adjournment occasioned by The Times's failure to appear, the Deputy Mayor may, if he or she determines that there was no reasonable cause for the requested adjournment or failure to appear, impose an Interim Penalty. (iii) The City shall not incur any penalty or damages for delay or otherwise occasioned by an adjournment of the Hearing. -89- (f) Penalties. ---------- (i) The Deputy Mayor may impose a penalty during an adjournment due to The Times's failure to appear or proceed with the scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim Penalty") of not more than $1,000 per day for each day of such adjournment, provided, however, that such daily penalties shall cease to accrue from and after the date that The Times makes itself available to appear at or proceed with the scheduled Hearing or gives written notice to the Deputy Mayor that it does not intend to appear at or proceed with the scheduled Hearing, in which event the Deputy Mayor shall have the right to continue the Hearing and reach a determination without The Times's participation. (ii) If, after the Hearing, the Deputy Mayor determines that The Times failed to cooperate in the Investigation in violation of this Sec.9.14, and The Times fails to commence to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, the Deputy Mayor may: (A) impose a penalty ("Final Penalty") which may not, in conjunction with any Interim Penalty or Final Penalty imposed during the term of this Agreement under this Agreement and/or during the term of the Lease with respect to any other -90- Transaction Document, exceed $500,000 in the aggregate during the term of the Lease; and/or (B) disqualify The Times, for a period not to exceed five (5) years, from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license with or from EDC or the City, other than as contemplated in the Transaction Documents. Notwithstanding anything to the contrary contained herein, in the event that The Times is found after the Hearing to have failed to cooperate in the Investigation, but nonetheless is not subjected to a Final Penalty because The Times commences to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, The Times shall be liable for the cost of conducting such Hearing in an amount not to exceed $5,000. (g) Criteria for Determination. The Deputy Mayor shall consider and --------------------------- address in reaching his or her determination and in assessing an appropriate Interim Penalty, Final Penalty, and/or disqualification, the factors in clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if relevant and appropriate, the criteria established in clauses (iii) and (iv) of this Sec.9.14(g), in addition to any other information which may be relevant and appropriate: (i) The Times's good faith endeavors or lack thereof to cooperate fully and faithfully with the Investigation, including but not limited to the discipline, -91- discharge or disassociation of any Person failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other Members, agents, assignees or fiduciaries whose testimony is sought (the Deputy Mayor shall take into account whether the discipline, discharge or disassociation of any Persons failing to testify would violate any union or other contract), (ii) the relationship of the Person who refused to testify to The Times, including, but not limited to, whether the Person whose testimony is sought has an ownership interest in The Times and/or the degree of authority and responsibility the Person has within The Times, (iii) The nexus of the testimony sought to The Times and the Transaction Documents, and/or (iv) the effect a penalty may have on an unaffiliated and unrelated party or Entity that has a significant interest in The Times, provided that (x) such unrelated party or Entity has given actual notice to the Commissioner or EDC upon the acquisition of the interest, or (y) at the Hearing such unrelated party or Entity gives notice and proves that such significant interest was previously acquired; under either circumstance, such unrelated party or Entity must present evidence at the Hearing demonstrating the potential adverse impact a penalty will have on such party or Entity. -92- (h) Payment of Penalties. Any Interim or Final Penalty hereunder ---------------------- shall, upon imposition thereof, be applied to reduce the aggregate of Offset Amounts (as such term is defined in the Lease) then available to The Times under Article 4 of the Lease and the balance, if any, shall be paid promptly as additional Rental, or at the landlord under the Lease's option, such balance shall be applied to reduce EDC's obligations with respect to any undisbursed Funding. (i) Exclusive Remedy. Notwithstanding anything to the contrary ------------------ contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall be the sole and exclusive remedies available to EDC in the event that The Times breaches any of its obligations under this Sec.9.14, and no other remedies, including, without limitation, the remedies set forth elsewhere in this Agreement for defaults by The Times in the performance of its obligations under this Agreement, shall be applicable to a breach by The Times of any of its obligations under this Sec.9.14. (j) Right to Dispute Determinations of Deputy Mayor. Nothing ------------------------------------------------------- contained herein shall be construed to limit in any manner whatsoever The Times's right or ability to challenge or seek to enjoin, overturn, set aside or modify any action taken, determination made or penalty imposed by the Deputy Mayor pursuant to the provisions of this Sec.9.14. (k) Concurrent Lease Obligation. The obligations of The Times under ----------------------------- this Sec.9.14 constitute a portion of the obligations of The Times under Article 40A of the Lease, and nothing contained herein shall be construed as expanding, enlarging or increasing in any way, or as being separate from or in addition to, the obligations and liabilities of The Times -93- pursuant to Article 40A of the Lease. Sec.9.15. Intentionally omitted. Sec.9.16 Maximum Interest Rate --------------------- In the event that any interest payable under this Agreement shall be deemed to exceed the maximum rate permitted by law, then the amount of interest to be paid shall be the maximum rate so permitted. Sec.9.17 Captions -------- The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. Sec.9.18 Gender, Etc. ------------ The gender used in this Agreement shall be deemed to refer to the masculine, feminine, or neuter gender, as the identity of the contracting parties may require. The singular shall include the plural and vice versa as the context may dictate. -94- Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without ------------------ the prior written consent of The Times, except that EDC shall have the right, upon ten (10) Business Days prior written notice, to assign this Agreement and/or EDC's rights under this Agreement, without any further consent on the part of The Times, to the City. Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees ----------------------------------- that all non-monetary obligations set forth in this Agreement as being obligations of The Times shall apply only to, and be performed by, The New York Times Newspaper Division of The New York Times Company (the "Newspaper Division") and its employees and agents, and EDC shall look solely to the Newspaper Division for the performance of such non-monetary obligations; provided, however, that any default by the Newspaper Division in the performance of such non-monetary obligations shall be treated with the same force and effect pursuant to the applicable provisions of this Agreement as if such default had been committed by The Times. -95- ARTICLE TEN - AGREEMENT OF THE CITY ----------------------------------- Sec.10.1 City's Agreement to Fund EDC. The City, by executing this -------------------------------- Agreement as it effects this Article Ten only, (i) acknowledges that it is becoming a signatory to this Agreement as a material inducement to The Times to enter into this Agreement, (ii) warrants and represents that the Consolidated Contract is in full force and effect and legally binding upon the City; and (iii) covenants and agrees to provide EDC with City capital budget funds in such amounts and at such times as will permit EDC to comply with its obligations to disburse the Funding pursuant to the provisions of this Agreement, without regard to whether the Consolidated Contract is then in full force and effect or whether EDC is in compliance with the terms thereof. Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation ---------------------------- Counsel (addressed to The Times) to the effect that this Agreement is legal, valid and binding upon the City with respect to the provisions of this Article Ten in the form attached hereto as Appendix L, is hereby being delivered to The Times concurrently herewith. Sec.10.3 The Times's Rights Against the City. In the event that the City ------------------------------------ has defaulted in the performance of any obligation of the City pursuant to this Article Ten and continues to be in default thereof after notice from The Times and a thirty (30) day cure period, the Times shall have all of its rights at law and in equity against the City. -96- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: /s/ Carl Weisbrod -------------------------- Carl Weisbrod Title: President THE NEW YORK TIMES COMPANY By: /s/ Katharine P. Darrow -------------------------- Katharine P. Darrow Title: Senior Vice President THE CITY, BY SIGNING IN THE PLACE PROVIDED BELOW, AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLE TEN HEREOF: THE CITY OF NEW YORK By: /s/ Barry F. Sullivan ------------------------------ APPROVED AS TO FORM: By: /s/ ------------------------------ Acting Corporation Counsel -97- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Carl Weisbrod, to me known, who, being by me duly sworn, did depose and say that s/he resides at c/o 110 William St. NY NY; that s/he is the President of New York City Economic Development Corporation, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation. Frieda L. Dweck ------------------------------- Notary Public STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17thday of December, 1993,before me personally came Katharine P. Darrow, to me known, who, being by me duly sworn, did depose and say that s/he resides at 16 Garden Place, Brooklyn, NY; that s/he is the Senior V.P. of The New York Times Company, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation on behalf of such corporation. Beverly Sturr ------------------------------ Notary Public -98- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993, before me personally came Barry F. Sullivan, to me known, who, being by me duly sworn, did depose and say that s/he resides at c/o City Hall, NY, NY; that s/he is the Deputy Mayor of The City of New York and the same person who executed the foregoing instrument; and that s/he acknowledged that s/he signed her/his name thereto on behalf of The City of New York and pursuant to the authority vested in her/him. Frieda L. Dweck ----------------------------- Notary Public -99- Appendix C: NEW YORK TIMES FUNDING AGREEMENT #1 As a result of an Abandonment as described in Section 2.4(c)(i-iv) of Funding Agreement #1.
Assumptions Funding Amount (per press)*: Repayment Assumptions: ---------------------------- ----------------------- Phase One (4 presses) $3,000,000 Term of Lease 25 Phase Two (5 presses) $2,250,000 Lesser of: 9.00% Phase Three (6 presses) $2,250,000 or City's borrowing 9.00% cost(25 yr bonds) Phase Four (7 presses) $3,750,000 Interest Calculation: Annual Phase Five (8 presses) $3,750,000 ---------- Total $15,000,000
Examples Example #1: NYT commences Phases One/Two and Three in Year 3, and does not diligently pursue completion and Abandonment of the Project occurs pursuant to all of the terms and conditions of Funding Agreement #1. Phases One/Two/Three $7,500,000 Grant: Example #2: NYT commences and substantially completes Phase One Construction in Year 1 and receives capital grant of $3 million. NYT commences Phases Two and Three Construction in Year 3 and receives capital grant of $4.5 million. In Year 6, either NYT does not equip the facility or relocates substantially all employees to Stamford and Abandonment of the Project occurs pursuant to all of the terms and conditions of Funding Agreement #1. Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
ILLUSTRATIVE REIMBURSEMENT SCHEDULES
Example #1 Example #2 ---------- ---------- Year Project Status Principal I Year Project Status Principal I Principal II ---- -------------- ----------- ---- -------------- ----------- ------------ End Year 1 Vacant 0 End Year 1 Const/Disbursmnt 3,000,000 2 Vacant 0 2 Const 3,000,000 3 Const/Disbursmnt 7,500,000 3 Const/Disbursmnt 3,000,000 4,500,000 4 Const 7,500,000 4 Construction 3,000,000 4,500,000 5 Const Ceases 7,500,000 5 Construction 3,000,000 4,500,000 6 Const 7,500,000 6 Relocation/Abdmn 3,000,000 4,500,000 Cease/Abdmnt 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 Reimbursement Amount**: ----------------------- Example #1 ---------- Phase One/Two/Three Grant ($7.5 million) + (7.5 X 9% X 4 Yrs) = $10,200,000 Example #2 ---------- Phase One Grant ($3 million) + (3.0 X 9% X 6 Yrs) + Phase Two/Three Grant ($4.5 million) + ($4.5 X 9% X 4 yrs) = $10,740,000 Notes: *Assumes full building size. Grant will be reduced in accordance with Section 2.2(c) of Funding Agreement #1 if building size is reduced. ** Assumes repayment to EDC in one payment; interest for multi-year repayment not included. (nytpay4)
Appendix C-1: NEW YORK TIMES FUNDING AGREEMENT #1
As a result of an Abandonment as described in Section 2.4(c)(v) of Funding Agreement #1. Assumptions - ----------- Funding Amount (per press)*: Repayment Assumptions: - ---------------------------- ---------------------- Phase One (4 presses) $3,000,000 Term of Lease 25 Phase Two (5 presses) $2,250,000 # Yrs before Abandonment: 5 Phase Three (6 presses) $2,250,000 Lesser of: 9.00% Phase Four (7 presses) $3,750,000 or City's 9.00% borrowing cost(25 yr bonds) Phase Five (8 presses) $3,750,000 Interest Annual ---------- Calculation: Total $15,000,000
Examples: - --------- Example #1 : - ------------ NYT commences Phase One Construction in Year 1 and receives capital grant of $3 million. NYT commences Phases Two and Three Construction in Year 10 and receives capital grant of $4.5 million. NYT ceases operation in Year 14 and does not resume within 5 years and an Abandonment of the Project occurs pursuant to all the terms and conditions of Funding Agreement #1. Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000 Amortization Period: 25 Years Amortization Period: 15 Years Amount Amortized Annually: 120,000 Amount Amortized Annually: 300,000 Example #2 : - ------------ NYT commences Phase One, Two and Three Construction in Year 1 and receives capital grant of $7.5 million. NYT operates for 5 years and ceases operation for 4 years before commencing construction of Phases Four/Five in Year 13. NYT commences operation but ceases operation in Year 19 and does not resume within 5 years and an Abandonment of the Project occurs pursuant to all the terms and conditions of Funding Agreement #1. Phase One Grant: $7,500,000 Phase Four/Five Grant: $7,500,000 Amortization Period: 25 Years Amortization Period: 13 Years Amount Amortized Annually: 300,000 Amount Amortized Annually: 576,923 ILLUSTRATIVE AMORTIZATION REIMBURSEMENT SCHEDULES
Example #1 Example #2 - ---------- ---------- Year Project Status Principal I Principal II Year Project Status Principal I Principal II ---- -------------- ----------- ------------ ---- -------------- ----------- ------------ End Year 1 Const/Disbursmnt 3,000,000 End Year 1 Const/Disbursmnt 7,500,000 2 Const 2,880,000 2 Const 7,200,000 3 Const 2,760,000 3 Const 6,900,000 4 Operation 2,640,000 4 Operation 6,600,000 5 Operation 2,520,000 5 Operation 6,300,000 6 Operation 2,400,000 6 Operation 6,000,000 7 Operation 2,280,000 7 Operation 5,700,000 8 Operation 2,160,000 8 Operation 5,400,000 9 Operation 2,040,000 9 Cease Op-Yr 1 5,100,000 10 Operation/Cont 1,920,000 4,500,000 10 Cease Op-Yr 2 5,100,000 11 Operation/Cont 1,800,000 4,200,000 11 Cease Op-Yr 3 5,100,000 12 Operation 1,680,000 3,900,000 12 Cease Op-Yr 4 5,100,000 13 Operation 1,560,000 3,600,000 13 Const/Operation 4,800,000 7,500,000 14 Cease Op-Yr 1 1,440,000 3,300,000 14 Operation 4,500,000 6,923,077 15 Cease Op-Yr 2 1,440,000 3,300,000 15 Operation 4,200,000 6,346,154 16 Cease Op-Yr 3 1,440,000 3,300,000 16 Operation 3,900,000 5,769,231 17 Cease Op-Yr 4 1,440,000 3,300,000 17 Operation 3,600,000 5,192,308 18 Abndnmnt-Yr 5 1,440,000 3,300,000 18 Operation 3,300,000 4,615,385 19 19 Cease Op-Yr 1 3,000,000 4,038,462 20 20 Cease Op-Yr 2 3,000,000 4,038,462 21 21 Cease Op-Yr 3 3,000,000 4,038,462 22 22 Cease Op-Yr 4 3,000,000 4,038,462 23 23 Abndnmnt-Yr 5 3,000,000 4,038,462 24 24 25 25
Reimbursement Amount**: - ----------------------- Example #1 ---------- Amortized Reimbursement Amount = Phase One: $1,440,000+(($1,440,000 X 9%) X 18 Yrs) = $3,772,800 + Phase Two/Three:$3,300,000+(($3,300,000 X 9%) X 9 Yrs) = $5,973,000 ---------- TOTAL = $9,745,800 Example #2 ---------- Amortized Reimbursement Amount= Phase One/Two/Three:$3,000,000+($3,000,000 X 9%)X 23 Yrs = $9,210,000 + Phase Four/Five:$4,038,462+(($4,038,462 X 9%) X 11 Yrs) = $8,036,538 ---------- TOTAL = $17,246,538 Notes: * Assumes full building or footprint size. Grant will be reduced in accordance with Section 2.2(c) of Funding Agreement #1 if building or footprint size, as the case may be, is reduced. ** Assumes repayment to EDC in one payment; no interest for multi-year repayment included. EX-10.10 8 FUNDING AGREEMENT #2 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION and THE NEW YORK TIMES COMPANY Dated as of December 15, 1993 Relative to the construction of a City sanitary sewer system along the Whitestone Expressway Service Road in the College Point Industrial Park in the Borough of Queens TABLE OF CONTENTS Page PREAMBLE 1 DEFINITIONS 3 ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT - ----------- AND CONTRACT REQUIREMENTS Sec.1.1 General Provisions and Provisions Regarding Design and Construction 16 Sec.1.2 Procurement of Bids, Services and Goods 24 Sec.1.3 Liaison to EDC 35 ARTICLE TWO THE FUNDING - ----------- Sec.2.1 Agreement to Fund 36 Sec.2.2 Disbursements 36 Sec.2.3 Funding of Costs of Changes 39 ARTICLE THREE THE TERM - ------------- Sec.3.1 Term 44 ARTICLE FOUR CONDITIONS FOR DISBURSEMENT - ------------ Sec.4.1 Initial Submissions by The Times 45 Sec.4.2 Documentation for Disbursements on Account of Eligible Costs 46 Sec.4.3 Direction of Submissions 49 ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND - ------------ GUARANTIES OF THE TIMES Sec.5.1 Organization; Standing 50 Sec.5.2 Intentionally Omitted 50 -i- Page Sec.5.3 Conflict, etc. under Other Documents 50 Sec.5.4 No Litigation 51 Sec.5.5 Intentionally Omitted 51 Sec.5.6 Intentionally Omitted 51 Sec.5.7 Quality of Work; Guaranties and Warranties 51 ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC - -------------- Sec.5A.1 Organization; Standing 57 Sec.5A.2 Due Authorization; Enforceable Obligations 57 ARTICLE SIX COVENANTS - ----------- Sec.6.1 Requisitions Update The Time's Representations 58 Sec.6.2 Compliance with Other Agreements and Law; Legal Status 58 Sec.6.3 Maintenance of and Compliance with Insurance Requirements 58 Sec.6.4 Maintenance of Office 59 Sec.6.5 Compliance with Applicable Law 59 Sec.6.6 Assignment 60 Sec.6.7 Maintenance of Records 61 Sec.6.8 Intentionally Omitted 61 Sec.6.9 Due Application of Funding Proceeds 61 Sec.6.10 Defects; Non-Conforming Work 62 Sec.6.11 Participation by Women and Minority Owned Businesses 62 Sec.6.12 No Liens 65 Sec.6.13 Intentionally Omitted 65 Sec.6.14 Intentionally Omitted 65 Sec.6.15 Intentionally Omitted 65 Sec.6.16 MacBride Principles 65 Sec.6.17 No Waiver of Compliance 66 -ii- Page ARTICLE SEVEN DEFAULT AND TERMINATION - ------------- Sec.7.1 Events of Default 67 Sec.7.2 Default Remedies; Exculpation 68 Sec.7.3 Termination 71 Sec.7.4 Right to Reinstate Agreement 73 ARTICLE EIGHT NOTICES - ------------- Sec.8.1 Notice 74 Sec.8.2 Disbursement Submissions 75 ARTICLE NINE GENERAL CONDITIONS AND COVENANTS - ------------ Sec.9.1 Conflict of Interests 76 Sec.9.2 No Liability of Individuals 77 Sec.9.3 Anti-Boycott Provisions 77 Sec.9.4 Governing Law 78 Sec.9.5 Liability of EDC 78 Sec.9.6 Amendments 80 Sec.9.7 Successors and Assigns 80 Sec.9.8 Assignment of Funds 80 Sec.9.9 Counterparts 81 Sec.9.10 Interpretation 81 Sec.9.11 Indemnity 81 Sec.9.12 No Agency 83 Sec.9.13 Venue 83 Sec.9.14 Investigations; Cooperation 85 Sec.9.15 Intentionally Omitted 92 Sec.9.16 Maximum Interest Rate 92 Sec.9.17 Captions 92 Sec.9.18 Gender, Etc. 92 Sec.9.19 Assignment by EDC 93 Sec.9.20 Obligations of Newspaper Division 93 -iii- Page ARTICLE TEN AGREEMENT OF THE CITY - ----------- Sec.10.1 City's Agreement to Fund EDC 94 Sec.10.2 Valid Agreement of the City 94 Sec.10.3 The Times's Rights Against the City 94 Appendix A - Premises Appendix B - Sanitary Sewer System Appendix C - Insurance Requirements Appendix D - The Times's Certificate of Good Standing Appendix E - EDC's Legal Opinion Appendix F - EDC's Secretary's Certificate Appendix G - Equal Employment Requirements Appendix H - Employment Report Appendix I - Intentionally Omitted Appendix J - MacBride Principles Rider Appendix K - Corporation Counsel's Legal Opinion Exhibit A - Intentionally Omitted Exhibit B - Form List of Contractors Exhibit C - Investigation Forms Exhibit D - Change Order Form Exhibit E - Form Legal Opinion Exhibit F - Form Certificate of Specimen Signature Exhibit G - AIA Forms Exhibit H - W\MBE Plan Exhibit H-1 - Form Expedited Certification Affidavit Exhibit I - Form Certification to be Attached to Requisition -iv- FUNDING AGREEMENT #2 dated as of December 15, 1993 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having its principal office at 110 William Street, New York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York State corporation, having its principal office at 229 West 43rd Street, New York, New York 10036. PREAMBLE: WITNESSETH ---------- WHEREAS: A: The City of New York (the "City"), a municipal corporation of the State of New York, is the owner in fee of certain real property identified, as of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street, on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned new tentative tax block and lot numbers Block 4282, Lot 100 for future identification, as such property is more particularly described in Appendix A attached hereto and made a part hereof (the "Premises); and -1- B: The City, as landlord, and EDC, as tenant, entered into a lease dated as of the date hereof, which lease was assigned by EDC to The Times pursuant to an Assignment and Assumption of Lease with Consent dated as of the date hereof (the lease as so assigned, and as the same may hereafter be amended, is hereinafter referred to as the "Lease"), demising the Premises for the Project (as hereinafter defined), and for which Lease EDC will act as the City's managing agent pursuant to Article 42 of the Lease; and C: In connection with the Lease, The Times has the option to construct on behalf of the City a City sanitary sewer system designed by EDC, to run along the westerly side of the Whitestone Expressway Service Road adjacent to the Premises (the "Construction Site"), as such sanitary sewer system is more particularly depicted in Appendix B attached hereto (the "Sanitary Sewer System" or the "Improvements"); and D: The construction of the Improvements is a necessary prerequisite element to the Project without which The Times has determined it could not proceed with the construction of the Project; and E: If The Times elects to construct the Improvements in accordance with its option, EDC and the City will make available to The Times City capital budget funds sufficient to fully reimburse The Times for its construction of the Improvements and the performance of the Work (as hereinafter defined); and F: The City and EDC have entered into an Amended and Restated Contract dated as of June 30, 1993, as amended (the "Consolidated Contract") pursuant to which the City will provide EDC with the necessary City capital budget funds, which is currently -2- estimated by EDC to be approximately $3.6 million, for use in connection with the construction of the Improvements and pursuant to which EDC is authorized to contract with The Times to perform the Work; and G: The Times, independently, and not as agent of the City or EDC, has agreed that if it exercises its option to construct the Improvements it will perform, or cause the performance of, the Work in consideration of the payments to it by EDC of funds in an amount necessary to fully reimburse The Times for the Eligible Costs (as hereinafter defined) incurred in connection with the construction of the Improvements (the "Funding") pursuant to this Agreement; H: In furtherance of its obligations under the Consolidated Contract and its corporate purpose of fostering economic development in the City, EDC has agreed to disburse the Funding to The Times for the purpose of financing the Eligible Costs of the Work. NOW, THEREFORE, EDC and The Times covenant and agree as follows: DEFINITIONS ----------- As used in this Funding Agreement, the following initially capitalized terms shall have the respective meanings indicated opposite each of them: "Affiliate" Any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, The Times. For purposes hereof, the -3- term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of The Times through the ownership of voting securities, by contract, or otherwise. Ownership of or by The Times includes beneficial ownership effected by ownership of intermediate entities. An "Affiliate" of a Person other than The Times shall be determined using the same standard of control and ownership set forth herein with respect to The Times. Unless the context otherwise requires, any reference to an "Affiliate" in this Agreement shall be deemed to refer to an Affiliate of The Times. "Agreement" This Funding Agreement and any amendments thereto. "Approvals" Contractor's Approvals (as hereinafter defined) and Owner's Approvals (as hereinafter defined), collectively. "Business Day" Any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions in New York City are authorized by law or executive order to close. "City" As defined in Recital A of the Preamble. "College Point Improvement Fund Payments" As defined in Section 3.09(b)(iii) of the Lease. "Commissioner" As defined in Sec.9.14(a). "Completed Cover Sheet" As defined in Sec.4.1. "Consolidated Contract" As defined in Recital F of the Preamble. "Construction Contract" (A) Any agreement executed by The Times and the Resident Engineer (as hereinafter defined), if any, with respect to construction management and supervision services and engineering services; or (B) any contract between The Times and the General Contractor (as hereinafter defined), if any, -4- under which the General Contractor is obligated to perform the Construction Work; or (C) any contract with a contractor for performance of all or any part of the Construction Work, whether entered into by The Times, the General Contractor, the Resident Engineer, or the Construction Manager (as hereinafter defined). "Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction manager selected by The Times, reasonably approved by EDC, responsible solely for the performance of construction management services and/or construction contract administration services and supervision services relative to the Construction Work. "Construction Site" As defined in Recital C of the Preamble. "Construction Work" The portion of the Work the costs of which are considered hard costs of construction under normal industry standards, excluding the services of the Resident Engineer and the services of the Construction Manager, if any. "Contractor" Any contractor under a Construction Contract. "Contractor's Approvals" As defined in Sec.1.1(c)(3). "DBS" As defined in Sec.6.11(b). "Department of Investigation" As defined in Sec.9.14(a). "Deputy Mayor" As defined in Sec.9.14(a). "DLS" The Division of Labor Services of the City's Department of Business Services, or its successor in function. "EDC" As defined in the first paragraph of this Agreement. "EDC Default Notice" As defined in Sec.9.5(b). -5- "Eligible Costs" (i) The costs of the Work paid or payable by The Times to Contractors (other than the Resident Engineer), subcontractors, suppliers and material persons for (A) labor and materials utilized in connection with the Work, and (B) for labor, services, facilities or equipment customarily considered as "general conditions" items which are reasonably required by or consequent upon the Construction Work, including (x) all costs of contract bonds and of insurance that may be required or necessary during the period of and for performance of the Work, (y) all costs of obtaining and maintaining the guaranties required by this Agreement and/or the Final Plans and Specifications (as hereinafter defined), and (z) all costs of obtaining and maintaining the security services required by Sec.1.1(e)(ii) of this Agreement that are obtained by Contractors and subcontractors (other than the Resident Engineer) and are included in their respective contract prices together with those costs described in (i)(A) above, and (ii) the costs paid or payable by The Times to the Resident Engineer, including those costs incurred by the Resident Engineer for the performance of construction management and supervision services and/or engineering services, including without limitation, the performance of tests necessary to determine the efficiency of the Sanitary Sewer System, (x) in an amount not to exceed ten percent (10%) of the Hard Costs (as hereinafter defined) with respect to all "general condition" items and other reimbursable expenses, and (y) in an amount not to exceed three percent (3%) of the Hard Costs with respect to the Resident Engineer's fee. In no event shall Eligible Costs include the costs or fees paid or payable by The Times to the Construction Manager. "Engineer's Estimate" An engineer's estimate or estimates, prepared by EDC or its professional consultants with respect to the construction of the Improvements, of all Eligible Costs expected to be incurred in connection with such construction and a projection of the amounts that EDC expects The Times to requisition over the term of this Agreement in connection with the Improvements. The Engineer's Estimate may be amended from time to time to reflect inflation change order work or other changes to the Plans and Specifications, until such Plans and Specifications become the Final Plans and Specifications. The Engineer's Estimate shall not be construed to limit in any way the amounts to be paid to The Times in full reimbursement of the cost to -6- perform the Work pursuant to the provisions of this Agreement. "Entity" As defined in Sec.9.14(a). "Events of Default" Those events set forth in Sec.7.1. "Federal Courts" As defined in Sec.9.13. "Final Acceptance Date" Means the date on which all of the following shall have occurred: (i) the Resident Engineer or the Construction Manager shall have certified to EDC that the Work (including all Substantial Completion Punch List (as hereinafter defined) items) is complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, and the Requirements, and (ii) EDC and/or its professional consultants shall have inspected the Construction Site, within thirty (30) days after EDC's receipt from the Resident Engineer or the Construction Manager of the certification described in clause (i) above, and certified, by the later to occur of the expiration of such thirty (30) day period or five (5) days after such inspection was completed, to The Times that, in its opinion, the Improvements are complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, which certification shall not be unreasonably withheld; provided, however, that if EDC and/or its professional consultants shall have failed to inspect the Construction Site within the thirty (30) day period described above and to give the certification within the time period described above, EDC shall be deemed to have inspected the Construction Site and certified to The Times that the Improvements are complete. "Final Completion" Means that each of the following shall have occurred: (A) the Resident Engineer or the Construction Manager shall have issued to EDC a "Certificate of Payment", or certified its approval of a "Certificate of Payment" issued to EDC, in either case stating that it has examined the Final Plans and Specifications and, in its best professional judgment, after diligent inquiry, and on the basis of its observations and inspections, the Construction Work has been completed (except to an -7- immaterial extent) in accordance with the Final Plans and Specifications and all Requirements and that the final payment is due to The Times; (B) the Reviewing Parties (i) shall have made a final inspection of the Construction Site upon receipt of notice from The Times that the Work is Substantially Completed (as hereinafter defined) and (ii) shall have certified the Work, including all items on the Final Punch List, as being acceptable and complete; (C) The Times shall have submitted to EDC a final accounting, containing an affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which The Times may in any way be responsible (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), either have been paid or otherwise satisfied or will be paid simultaneously with or immediately after the receipt of the proceeds of any disbursement of the Funding for which Final Completion is required; (D) The Times shall have submitted to EDC receipts, releases and waivers of liens, or such other documentation establishing payment or satisfaction of all obligations arising out of the Work (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), to the extent and in such form as may be reasonably designated by EDC. If any lien for any work done by or on behalf of The Times has attached to the funds forming a part of the Funding, The Times shall have either removed or bonded such lien; (E) The Times shall have delivered to EDC two sets of the "as-built" drawings for the Improvements, as the same may have been amended, modified or supplemented, and such other documentation as may be required by the Reviewing Parties (including without limitation, videotape documentation required by the City's -8- Department of Environmental Protection, Division of Sewers in connection with the construction of a sanitary sewer system) or as may be necessary to evidence that the Work was completed in accordance with the Requirements. These drawings shall accurately show any deviations from the Final Plans and Specifications and the exact locations of any underground or otherwise concealed utilities and appurtenances as referenced to permanent surface improvements; and (F) receipt by EDC of notification from DLS that all labor requirements applicable to the Work have been fulfilled. "Final Penalty" As defined in Sec.9.14(f)(ii). "Final Plans and Specifications" The completed final drawings and plans and specifications for the construction of the Sanitary Sewer System, as developed by EDC and delivered by EDC to The Times in accordance with Sec.1.1(c)(2) hereof, and as such drawings and plans and specifications may be modified or amended from time to time in accordance with Sec.1.1(c) or Sec.2.3 of this Agreement. "Final Punch List" A statement by the Resident Engineer or the Construction Manager issued after Substantial Completion, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any observable defects and deficiencies, and any other defects or deficiencies of which the Resident Engineer or the Construction Manager have knowledge or of which the Reviewing Parties shall have observed and notified The Times or its Contractors, with respect to the Improvements or at or on the Construction Site including, but not limited to, deficiencies due to non-compliance with Requirements. "Funding" As defined in Recital G of the Preamble. "Funding Agreement #1" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for certain site preparation and foundation work required in connection with the construction of the Project, as such agreement may be -9- amended from time to time. "Funding Agreement #3" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of funds necessary to pay for the construction of an interim New York City Police Department evidence vehicle facility, as such agreement may be amended from time to time. "Funding Agreement #4" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for certain reconstruction of the Whitestone Expressway Service Road from 20th Avenue to Linden Place, a City street running adjacent to the Premises, as such agreement may be amended from time to time. "General Contractor" The Times's general contractor, if any, reasonably approved by EDC, engaged to perform and manage the Construction Work. "Governmental Authorities" The United States of America, the State of New York, the City and any agency, department, legislative body, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having legal jurisdiction over the Improvements or the Construction Site or any portion thereof or any street, road, avenue, sidewalk or water comprising a part of or immediately adjacent to the Construction Site. "Guaranty Periods" (i) A period of twelve (12) months after the Final Acceptance Date, and (ii) such other longer guaranty period as may be generally available within the relevant industry with respect to materials or equipment used in connection with the construction of, or incorporated in, the Sanitary Sewer System, and specified in the Final Plans and Specifications (provided such guaranty period is commercially available). "Hard Costs" The aggregate of the costs set forth in clauses (i)(A) and (i)(B) of the definition of Eligible Costs. "Impositions" As defined in Section 3.09(b)(i) of the Lease. -10- "Improvements" As defined in Recital C of the Preamble. "Initial Termination" As defined in Sec.7.4. "Interim Penalty" As defined in Sec.9.14(f)(i). "Investigation" As defined in Sec.9.14(a). "Investigation Forms" As defined in Sec.1.2(c). "Late Charge Rate" The Prime Rate (as hereinafter defined) plus one percent (1%). "Lease" As defined in Recital B of the Preamble. "Material Change" A change to the Final Plans and Specifications which either (i) individually or in the aggregate with all other changes increases the cost of the Construction Work by $100,000 or more, (ii) materially changes the quality or nature of the Construction Work, type of materials, workmanship or construction means, methods or techniques, or materially affects the layout or design of the Improvements, or (iii) is of such a nature that, in order to perform the work associated with such change, The Times will be required to obtain additional permits or approval. "Members" As defined in Sec.9.14(a). "MBEs" As defined in Sec.6.11(a). "New York State Courts" As defined in Sec.9.13. "Newspaper Division" As defined in Sec.9.20. "90 Day Election Period" As defined in Sec.1.1(b). "Owner's Approvals" As defined in Sec.1.1(c)(2). "Owner's Representative" Any person selected by The Times, reasonably approved by EDC, to act as The Times's representative at the Construction Site and responsible for the supervision of the Work performed by the General Contractor and the other Contractors, subcontractors and material suppliers. -11- "Parties" EDC and The Times. "Person" An individual, corporation, partnership, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing. "Plans and Specifications" The drawings and plans and specifications for the construction of the Sanitary Sewer System, as developed by EDC. The Plans and Specifications shall be complete and final except with respect to those changes which may be necessary or required as a result of changes to the design or changes in the Requirements which occur between the time the Plans and Specifications are delivered to The Times in accordance with Sec.1.1(c)(1) hereof and the time that The Times is prepared to commence construction of the Sanitary Sewer System. "Premises" As defined in Recital A of the Preamble. "Prime Rate" The base or prime rate of interest from time to time charged by Chemical Bank, as such rate is published by The New York Times newspaper or by ------------------ The Wall Street Journal if such rate is not ------------------------ published by The New York Times at the time in ------------------ question. "Project" The construction on the Premises of a facility of no less than approximately 360,000 square feet for the printing, production and distribution of newspapers and, at the sole discretion of The Times, other such buildings and improvements on the Premises as are permitted pursuant to the terms and provisions of the Lease, including without limiting the generality of the foregoing, the expansion of the printing facility to a size greater than 360,000 square feet. "Project Commencement Date" As defined in Sec.1.1(b). "Prohibited Person" As defined in Sec.1.2(b)(5). "Proposed Bidders List" As defined in Sec.1.2(b)(1). "Public Parties" As defined in Sec.9.11(a). "Rental" As defined in Article 1 of the Lease. -12- "Requirements" Any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders, resolutions and requirements of all Governmental Authorities currently in force or hereafter adopted applicable to the Construction Site and/or the Work. "Requisition" As defined in Sec.4.2(a)(ii). "Resident Engineer" The professional consultant engaged by EDC to prepare the Plans and Specifications and/or the Final Plans and Specifications (identified by EDC in its notice to The Times described in Sec.1.2(b)(4) hereof), or any other professional engineer, engineering firm, architectural firm with engineering expertise, combined practice or association licensed in the State of New York selected by The Times, reasonably approved by EDC as to the acceptability of such Resident Engineer and as to the scope of work proposed to be performed by such Resident Engineer, to act as resident engineer on behalf of The Times and to perform engineering services and/or construction contract administration and supervision services relative to the Work. The Resident Engineer, if any, shall act on behalf of The Times and shall be separate and apart from any engineer acting on behalf of EDC or the City for any reasons, including, without, limitation, the preparation of the Engineer's Estimate. "Resident Engineer Costs" The costs paid or payable by The Times to the Resident Engineer for the performance of construction management and supervision services and engineering services relative to the Work, as set forth in clause (ii) of the definition of Eligible Costs. "Retainage" As defined in Sec.2.2(a)(1). "Reviewing Parties" EDC, the City's Department of Environmental Protection, or their respective designees, including without limitation, their hired consultants, and any other Governmental Authority with jurisdiction over the Work, the Improvements or the Construction Site and responsible for (i) the issuing of permits or approvals with respect to the Improvements, or (ii) ensuring compliance with the Requirements. "Sanitary Sewer System" As defined in Recital C of the Preamble. -13- "Sewer Delay Offset Amount" As defined in Section 27.04 of the Lease. "Sewer System Election Notice" As defined in Sec.1.1(b). "Substantial Completion" or "Substantially Complete(d)" Means that the Work shall have been 95% completed in accordance with the Final Plans and Specifications and all Requirements, and the Reviewing Parties are able to inspect the Work and prepare a Final Punch List. "Substantial Completion Date" The date on which the Work shall have been Substantially Completed. "Substantial Completion Punch List" The statement by EDC, issued after inspection of the Construction Site, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any defects or deficiencies which EDC shall have noted with respect to the Improvements, including but not limited to, defects or deficiencies due to non-compliance with the Requirements. "Term" As defined in Sec.3.1. "The Times" As defined in the first paragraph of this Agreement. "The Times Indemnitees" As defined in Sec.1.1(c)(5). "Transaction Documents" As defined in Sec.9.14(a). "Unavoidable Delays" Delays caused by (i) strikes, slowdowns, walkouts, lockouts or other labor troubles, (ii) acts of God, (iii) catastrophic weather conditions, (iv) inability to obtain labor or materials due to labor disputes, (v) court orders enjoining commencement or continuation of the Work, (vi) enemy action, (vii) civil commotion, (viii) shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency, (ix) failure or defect in the supply of -14- electricity, oil, gas or water to the Construction Site provided that such failure or defect is not due to the action or inaction of The Times or its Contractors or subcontractors, (x) fire, (xi) casualty, (xii) the failure of EDC to disburse the Funding or any portion thereof in accordance with the provisions of this Agreement, (xiii) the failure of EDC to obtain the Owner's Approvals, (xiv) the failure of EDC to make changes to the Final Plans and Specifications in accordance with Sec.1.1(c)(4) hereof required by reason of the Requirements, changes to the Requirements, field conditions or other unexpected conditions arising during the course of the Construction Work that may affect the design of the Improvements, (xv) defects in the Final Plans and Specifications that cause the Plans and Specifications to be not in compliance with the Requirements or incorrect or inappropriate, (xvi) EDC's unreasonable delay in granting any approvals required under this Agreement, or (xvii) other causes not within The Times's control that is causing a delay in The Times's performance of its construction obligations hereunder. The Times shall use its good faith efforts to notify EDC in writing, stating when such delay commenced, not later than ten (10) Business Days after The Times has first received knowledge of the occurrence of any of the foregoing conditions; provided, however, that The Times's failure to notify EDC of the occurrence of an event constituting an Unavoidable Delay shall not affect the commencement of such delay or otherwise result in the loss of any benefit or right granted to The Times under this Agreement. "WBEs" As defined in Sec.6.11(a). "W/MBEs" As defined in Sec.6.11(a). "W/MBE Participation Dollar Value" As defined in Sec.6.11(c). "W/MBE Percentage" As defined in Sec.6.11(c). "W/MBE Plan" As defined in Sec.6.11(a)-14. "Work" Work undertaken by or on behalf of The Times for the purpose of constructing the Improvements all in accordance with this Agreement and the Final Plans and Specifications. -15- ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND ---------------------------------------------------- CONTRACT REQUIREMENTS ---------------------- Sec.1.1 General Provisions and Provisions Regarding Design and --------------------------------------------------------------- Construction. - ------------- (a) The Times's Option to Perform the Work. Pursuant to Article 27 of --------------------------------------- the Lease, The Times shall, in its sole discretion, have the right (but not the obligation), subject to such conditions set forth in paragraph (b) below, to elect to construct, on behalf of the City, the Sanitary Sewer System. If The Times elects to construct the Sanitary Sewer System, The Times shall notify EDC of such election in accordance with the notice provisions set forth in Sec.1.1(b) hereof, and thereafter The Times shall perform the Work related to such construction, and EDC shall disburse to The Times the Funding or any portion thereof allocable to the Work being performed by The Times, on the terms and conditions contained in this Agreement. (b) Notice of Election to Proceed. If The Times elects to exercise its ------------------------------ right to construct the Sanitary Sewer System on behalf of the City in accordance with Sec.1.1(a) hereof, The Times shall make such election by giving written notice thereof (the "Sewer System Election Notice") to EDC no earlier than the date (the "Project Commencement Date") on which The Times "Commences Construction of the Project" (as such term is defined in Article 13 of the Lease) on the Premises, but in no event later than ninety (90) days after the Project Commencement Date (the "90 Day Election Period"); provided, however, that The Times shall have the right to revoke such election if The Times notifies EDC of its -16- intention to construct the Sanitary Sewer System at any time within the 90 Day Election Period, but has not commenced the Work prior to the date which is one hundred and eighty (180) days after the Project Commencement Date. If The Times elects to revoke its election in accordance with the foregoing sentence, The Times shall effect such revocation by giving EDC written notice of such election and upon EDC's receipt of such notification of election to revoke, this Agreement shall terminate and thereafter neither Party shall have any rights against or obligations to the other Party by reason of this Agreement except as otherwise specifically set forth in this Agreement. The Sewer System Election Notice shall specify (i) the approximate date on which The Times intends to commence construction of the Sanitary Sewer System (which date shall be no later than nine (9) months after the Project Commencement Date), (ii) the Resident Engineer, Construction Manager, or Owner's Representative that The Times intends to select with respect to the construction of the Sanitary Sewer System, and (iii) the Person or Persons on The Times's staff selected by The Times to be responsible for communicating with EDC regarding the performance and completion of the Work in connection with the construction of the Sanitary Sewer System. (c) Plans and Specifications. (1) EDC shall deliver to The Times ------------------------- copies of the Plans and Specifications for the construction of the Sanitary Sewer System as soon as such plans have been completed, but in no event later than the date which is six (6) months after the date of this Agreement. The Plans and Specifications shall be submitted together with an Engineer's Estimate, as of the date of such submission. -17- (2) EDC shall deliver to The Times copies of the Final Plans and Specifications for the construction of the Sanitary Sewer System within six (6) months after EDC's receipt of the Sewer System Election Notice, but in no event earlier than three (3) months prior to the date specified in such notice on which The Times intends to commence construction. The Final Plans and Specifications shall be accompanied by (i) an updated Engineer's Estimate, if necessary, and (ii) all appropriate permits, consents, certificates, licenses, authorizations and approvals necessary for the construction of the Improvements generally considered in the construction industry to be the responsibility of the owner of a construction site to obtain ("Owner's Approvals"). If necessary, The Times shall assist EDC, at no cost to The Times, in obtaining such Owner's Approvals. (3) The Times shall obtain, or shall cause its Contractors to obtain, all appropriate permits, consents, certificates, licenses, authorizations and approvals necessary for the construction of the Improvements generally considered in the construction industry to be the responsibility of the "contractor" of a construction project to obtain (the "Contractor's Approvals"). If necessary, EDC shall assist The Times or its Contractors in obtaining such Contractor's Approvals. The cost of obtaining such permits, consents, certificates, licenses, authorizations and approvals shall be considered Eligible Costs payable with the Funding if such costs are included in The Times's Contractors' contract price. (4) Any changes required to be made to the Final Plans and Specifications shall be made in accordance with the terms and conditions set forth in Sec.2.3 hereof; provided, however, that any changes required to be made by reason of the Requirements, -18- changes to the Requirements, field conditions or other unexpected conditions arising during the course of the Construction Work that may affect the design or construction of the Improvements shall be made solely by EDC and/or its professional consultants, at EDC's cost and expense. The Times shall perform the Construction Work in accordance with all such changes. In addition, EDC may request that The Times construct the Improvements in conformity with any other changes to the Final Plans and Specifications reasonably proposed by EDC or the City which shall not cause "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System. In either such case, any increased cost of the Work associated with any such changes to the Final Plans and Specifications in accordance with this Sec.1.1(c)(4) shall be paid as provided in Sec.2.3(d) hereof. (5) EDC shall indemnify and hold harmless The Times and its officers, members, directors, employees and agents (collectively "The Times Indemnitees") from and against any and all claims, damages, judgments, liabilities and causes of action whatsoever to which they may be subject arising out of (i) the negligence or misconduct of EDC, its employees, agents or consultants in connection with the preparation of the Final Plans and Specifications and any modification or changes thereto and the obtaining of the Owner's Approvals, or (ii) the fact that the Final Plans and Specifications are not in compliance with the Requirements or are incorrect or inappropriate. The obligation of EDC to indemnify and hold harmless The Times Indemnitees shall include but not be limited to the payment of any and all costs and reasonable fees (including reasonable legal fees) as may be actually -19- incurred by The Times Indemnitees as a direct result of the negligence or misconduct of EDC, its employees, agents or consultants. (6) If, as a result of (i) the negligence or misconduct of EDC, its employees, agents or consultants in connection with the preparation of the Final Plans and Specifications and any modifications or changes thereto, or (ii) the fact that the Final Plans and Specifications are not in compliance with the Requirements or are incorrect or inappropriate, The Times is delayed in completing construction of the Sanitary Sewer System in accordance with this Agreement and such delay in completing the Sanitary Sewer System causes "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System, The Times shall have the right to offset against future Rental (other than Impositions and College Point Improvement Fund Payments) an amount equal to the Sewer Delay Offset Amount, as more particularly set forth in Section 4.01 and Article 27 of the Lease. (d) Right to Proceed. The Times may only proceed with the ------------------- Construction Work if and only if (i) all Approvals necessary for the construction of the Improvements have been obtained, (ii) certificates, in form and substance reasonably satisfactory to EDC, evidencing the insurance policies referred to in Appendix C, naming the City and EDC as additional insureds, providing not less than thirty (30) days notice of cancellation to the City and EDC and, if the certificates of insurance described above do not indicate thereon the receipt of due and payable premiums, proof of payment of such premiums, shall have been obtained and delivered to EDC, and (iii) all other Requirements have been complied with, it being -20- expressly agreed that The Times shall bear the entire risk of constructing the Improvements in variance with the Final Plans and Specifications and that EDC will not be obligated to disburse any of the Funding before all Approvals have been obtained and all conditions to disbursement under this Agreement have been satisfied. The fact that EDC has provided The Times with the Final Plans and Specifications and the Owner's Approvals, or any other action or failure to act by the Reviewing Parties, shall in no way constitute a representation that all applicable Requirements have been complied with or, subject to the provisions of Sec.1.1(c)(5) hereof, relieve The Times of its obligations to abide by the terms of this Agreement. (e) Performance of the Work. (i) Subject to Unavoidable Delays, The ------------------------- Times shall commence construction of the Improvements not later than nine (9) months after the Project Commencement Date. The Times covenants and agrees to cause the Improvements to be constructed in accordance with the requirements of this Agreement and with the Final Plans and Specifications and all applicable Requirements. The Times shall obtain all final acceptances from the appropriate Reviewing Parties as necessary to complete the Improvements. (ii) At all times during the performance of the Construction Work, The Times shall maintain, or cause to be maintained, the Construction Site in a neat and orderly condition and shall protect the Construction Site against deterioration, loss, damage or theft. (f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof, ----------------- The Times shall permit EDC and the Reviewing Parties, their agents, employees and/or professional -21- consultants to make inspections of the Construction Site during normal business hours or otherwise when Construction Work is in progress, at reasonable times and upon reasonable notice to The Times and in accordance with applicable safety standards, (i) with respect to EDC, as it deems necessary to observe compliance with and performance under this Agreement, and (ii) with respect to the Reviewing Parties, as are normally made by the City and its agencies in the course of a project or projects of similar nature and magnitude to the Work. Such inspection shall not require the uncovering of any work unless specifically requested in writing by EDC or the Reviewing Parties. If EDC requested the uncovering of the work and the work that has been uncovered is determined to have been performed in accordance with the Final Plans and Specifications and the Requirements, EDC shall pay the costs associated with the uncovering requested by EDC and, if such uncovering caused "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System, The Times shall have the right to offset against future Rental (other than Impositions and College Point Improvement Fund Payments) an amount equal to the Sewer Delay Offset Amount, as more particularly set forth in Section 4.01 and Article 27 of the Lease; if the work that has been uncovered is determined to be unacceptable because it was not performed in accordance with the Final Plans and Specifications or the Requirements, The Times shall pay the costs associated with the uncovering. EDC shall use its good faith efforts to cause such inspection to be made in a manner that will not interfere with the progress of the Work. A representative of The Times shall, if available, accompany the person or persons making -22- such inspection on behalf of EDC or the Reviewing Parties, unless The Times elects to forego such right. The Times shall cause a complete set of the Final Plans and Specifications, as then in effect, and shop drawings to be maintained at the Construction Site or at the Premises for inspection by EDC, the Reviewing Parties and each of their respective employees, consultants and agents. The omission or failure of EDC or the Reviewing Parties or any representative thereof to make such inspections, to identify any defects or to notify The Times of any observable defects or any non-compliance with the terms of this Agreement or the Final Plans and Specifications, shall in no way relieve The Times of its obligations under this Agreement or impose any liability upon EDC, the Reviewing Parties, or any of their respective employees, consultants and agents. (g) Completion. ----------- (1) Subject to Unavoidable Delays, The Times shall cause Substantial Completion of the Sanitary Sewer System to occur not later than twenty-four (24) months after The Times commences construction of such Sanitary Sewer System. (2) The Times shall notify EDC of the date the Work shall have been Substantially Completed. EDC shall have thirty (30) Business Days after the giving of the notice referred to in the preceding sentence to inspect the Improvements and notify The Times in writing of its acceptance of The Times's determination of Substantial Completion or to notify The Times in writing of specific objections which it believes renders the Work not Substantially Completed and prepare the Substantial Completion Punch List, if necessary, and deliver the same to The Times within such thirty (30) Business Day period. The Times shall -23- Substantially Complete those items of the Work, if any, specified in EDC's notice as not Substantially Complete or otherwise in the Substantial Completion Punch List. (3) After EDC's acceptance of The Times's determination of Substantial Completion, The Times shall cause the Resident Engineer or the Construction Manager to prepare a Final Punch List. Such Final Punch List shall be prepared after inspection of the substantially completed Improvements by the Reviewing Parties and shall incorporate those items determined by such Reviewing Parties to be necessary for Final Completion of the Work. (4) The Times shall use its good faith efforts to cause Final Completion to occur as soon as reasonably possible after Substantial Completion and, to the extent reasonably achievable, shall complete all items on the Final Punch List within ninety (90) days after the Substantial Completion Date. Sec.1.2 Procurement of Bids, Services and Goods --------------------------------------- (a)(1) If The Times elects to construct the Sanitary Sewer System as provided in Sec.1.1(a) hereof, The Times shall enter into a Construction Contract or Construction Contracts independently and not as agent of the City or EDC for the performance of the Construction Work in accordance with the Final Plans and Specifications so as to facilitate the construction of the Improvements. (2) Any Construction Contract entered into by The Times (and any bid packages prepared by The Times for the bid of the Construction Work) shall instruct the Contractors -24- (or bidders, as appropriate) as follows: title to the Construction Site and the Improvements shall be and vest in the City. Materials to be incorporated into the Construction Site shall, effective upon their purchase and at all times thereafter, constitute the property of the City and upon incorporation of such materials into the Construction Site title thereto shall be and continue in the City. In accordance therewith, purchases of tangible personal property by the Contractors arising in connection with the construction of the Improvements are exempt from the payment of certain sales and compensating use taxes to the extent that such property (i) is used to alter, maintain or improve, and becomes an integral component part of, the Construction Site, or (ii) remains tangible personal property and is installed on the Construction Site. This exemption does not apply to tools, machinery, equipment or other property leased by The Times or its Contractors, or to supplies, materials or other property which are consumed in the course of construction or for any other reason not incorporated into the Construction Site. (b)(1) Prior to letting any Construction Contract to be entered into directly by The Times or by The Times's Construction Manager, if any, The Times shall submit to EDC a list of proposed bidders and, to the extent known to The Times, identify the principals of the bidders (the "Proposed Bidders List"). EDC shall advise The Times in writing within fifteen (15) Business Days after receipt of the Proposed Bidders List, as to which bidders on the Proposed Bidders List are acceptable or unacceptable and, if any bidders are unacceptable, the specific reasons therefor. EDC may also advise The Times, within such fifteen (15) Business Day Period, of additional bidders that it proposes that The Times -25- include on the Proposed Bidders List. If EDC fails to provide such advice within such fifteen (15) Business Day Period, all of the bidders on the Proposed Bidders List shall be deemed approved. For purposes hereof, any bidder other than a bidder that is a Prohibited Person or has received a negative contractor evaluation from EDC or the City within the five (5) years prior to the date of the Proposed Bidders List, shall be deemed acceptable to EDC. The Times shall obtain proposals from at least six (6) qualified bidders from the list of acceptable bidders and if EDC has proposed additional bidders to be included on the Proposed Bidders List as provided above, at least three (3) of such six (6) qualified bidders shall be bidders proposed by EDC (or if EDC has proposed less than three (3) bidders, then the qualified bidders shall include all the bidders proposed by EDC). The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a bid summary, analysis and statement as to which bidder The Times intends to select, which statement shall be certified by The Times and give specific reasons for The Times's preference. The Times shall not accept a bid which is not the lowest bid without EDC's prior written approval. EDC, in its sole discretion, may (but is not obligated to) either accept a bid which is not the lowest bid if necessary to enable The Times to achieve the total W/MBE Participation Dollar Value and the total W/MBE Percentage or, in the alternative, reduce the W/MBE Participation Dollar Value and the W/MBE Percentage in an amount equal to the portion of the W/MBE Participation Dollar Value and the W/MBE Percentage that would have been achieved by accepting such bid. The Times shall not accept a bid which exceeds the Engineer's Estimate by more than ten percent (10%) without -26- EDC's prior written approval (it being understood, however, that if EDC approves any such bid, all Eligible Costs included in such bidder's contract price shall be paid for with the Funding notwithstanding the fact that such Eligible Costs may exceed the Engineer's Estimate by ten percent (10%) or more). EDC's approval of a bid which is not the lowest bid or a bid which exceeds the Engineer's Estimate by more than ten percent (10%) shall be deemed given if not denied in writing within ten (10) Business Days of The Times's written request therefor. If EDC refuses to approve a bid which exceeds the Engineer's Estimate by more than ten percent (10%), then EDC shall have a period of six (6) months following such refusal to either revise the Plans and Specifications such that the anticipated cost of constructing the Improvements is reduced to an amount not to exceed the Engineer's Estimate or seek and obtain the appropriation of additional funds from the City to pay for the additional expense, or take such other action as EDC may deem necessary in order to enable The Times to rebid the Construction Work and cause the construction of the Improvements. If, as a result of EDC's refusal to approve a bid which exceeds the Engineer's Estimate by more than ten percent (10%), The Times is delayed in completing construction of the Sanitary Sewer System and such delay causes "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System, The Times shall have the right to offset against future Rental (other than Impositions and College Point Improvement Fund Payments) an amount equal to the Sewer Delay Offset Amount, as more particularly set forth in Section 4.01 and Article 27 of the Lease. -27- (2) EDC reserves the right, at any time prior to The Times's acceptance of a bid in accordance with Sec.1.2(b)(1) above, to withdraw its prior approval of the bidder chosen in the event that EDC shall learn that the bidder shall have committed any act, or if the bidder shall become the subject of any investigation or legal proceeding, either or both of which would have disqualified the bidder from receiving EDC's original approval. Nothing contained in Sec.1.2(b)(1) or this Sec.1.2(b)(2) shall limit The Times's right to reject all bids in its sole discretion. (3) Notwithstanding anything to the contrary contained herein, in the event that EDC (A) does not approve any bidder selected by The Times, (B) withdraws its prior approval of any bidder chosen in accordance with Sec.1.2(b)(1) above, or (C) refuses to approve a bid which exceeds the Engineer's Estimate by more than ten percent (10%) and is unable, after the six (6) month period described in Sec.1.2(b)(1) above, to either reduce the cost of the Construction Work to an amount not to exceed the Engineer's Estimate or obtain an additional appropriation of funds sufficient to pay for the additional expense, or otherwise take such other action as would, in the reasonable opinion of The Times, enable The Times to rebid the Construction Work and cause the construction of the Improvements, then The Times shall have the right to revoke its election to construct the Improvements, provided that, with respect to (A) and (B) above, The Times reimburses EDC for any Funding already disbursed by EDC to The Times to pay for Resident Engineer Costs. Upon The Times's revocation of its election and reimbursement to EDC of the Funding previously disbursed as provided in the foregoing sentence, this Agreement shall terminate and -28- thereafter neither Party shall have any rights against or obligations to the other Party by reason of this Agreement, except as otherwise specifically set forth in this Agreement. (4) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1) or Sec.1.2(b)(2) above, at any time after the date hereof The Times shall have the right, without following the bidding procedure outlined in Sec.1.2(b)(1) above, to enter into a Construction Contract with respect to the construction of the Sanitary Sewer System with a Resident Engineer if such Resident Engineer is the professional consultant engaged by EDC to prepare the Plans and Specifications and/or the Final Plans and Specifications. Upon execution of a consultant contract therefor, EDC shall notify The Times in writing of the professional consultant so engaged by it to prepare the Plans and Specifications and/or the Final Plans and Specifications. (5) For purposes hereof, the term "Prohibited Person" shall mean: (i) Any Person (A) that is in default or in breach, beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that is in default or in breach, beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, unless, such default or breach has been waived in writing by EDC or Landlord, as the case may be. -29- (ii) Any Person (A) that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure. (iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof. (iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the -30- President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended. (v) Any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than $10,000, (or any person that directly controls, is controlled by, or is under common control with a Person in such default), unless such default is then being contested in good faith in accordance with the law. (vi) Any Person (A) that has owned at any time during the three (3) years immediately preceding a determination of whether such Person is a Prohibited Person any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the ------ City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City or (B) that, directly or indirectly controls, is controlled by, or is under common control with such a Person. (c) The Times shall provide EDC with a list of all Contractors, other than suppliers, whose Contract amount totals more than $100,000, on the form attached hereto as Exhibit B. The Times will furnish each Contractor, other than a supplier, whose Contract amount totals more than $100,000, with a subcontractor questionnaire in the form attached hereto as Exhibit C and/or such other qualification and background investigation form(s) as may be used by the City at such time ( collectively, "Investigation Forms") provided by -31- EDC to The Times, and shall use its good faith efforts to cause each such Contractor to fill out and complete the Investigation Forms in a timely fashion but in no event later than the completion of the work performed by such Contractor pursuant to its Contract. (d) All Construction Contracts, in order to be eligible for disbursement under this Agreement, shall provide, in substance: (1) that the Contractor shall obtain and maintain comprehensive general liability insurance and other insurance in the amounts and in accordance with the applicable provisions set forth in Appendix C; (2) that neither the Contractor nor any of its employees or subcontractors is or shall be deemed to be an agent, servant, employee or contractor of the City or EDC by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or other authorization given the City, EDC or any of their respective officers, officials, directors, members, agents or employees; and that the Contractor shall not commence any legal proceeding against the City or EDC to recover any compensation which may be payable under the Construction Contract; (3) that the Contractor is solely responsible for the work, direction, compensation and personal conduct of its employees and subcontractors; (4) that the Contractor shall indemnify and hold harmless the City, EDC and their respective agents, officers, directors, officials, members and employees from any and all claims, judgments or liabilities to which they may be subject -32- because of any act or omission of the Contractor or its respective agents, officers, directors, employees or subcontractors arising out of or in connection with the pertinent Construction Contract or because of any negligence, fault or default of the Contractor or its respective agents, employees, officers, directors or subcontractors (as the case may be); (5) that the Contractor shall maintain accurate, readily auditable records and accounts with supporting documentation, in accordance with Accounting Principles, of all work performed, and receipts and expenditures made, in connection with the pertinent Construction Contract, and that the Contractor shall make such records and accounts available to EDC, the City and each of their respective agents and employees, for inspection and audit at reasonable times and upon reasonable written notice for a period of six (6) years after completion of the pertinent Construction Contract; (6) provisions incorporating the requirements of Sec.6.5(a) (Compliance with Applicable Law) and Sec.9.1 (Conflict of Interests); and (7) that the Contractor represents and warrants, and shall cause its subcontractors and material suppliers to represent and warrant, that state and local sales tax has been excluded from the contract price, to the extent applicable; provided, however, that the Contractor and its subcontractors and material suppliers shall be responsible for and pay any and all applicable taxes, including sales and use taxes, imposed upon leased tools, machinery, equipment, and upon -33- all supplies and materials and other property which are consumed in the course of construction or for any other reasons not incorporated into the Construction Site. (e) Any proposed changes or amendments to a Construction Contract, the effect of which would be to increase the amount of the Funding, shall be made in accordance with the provisions of Sec.2.3 hereof. Any proposed changes or amendments to a Construction Contract which affect the provisions to be included in such Construction Contract pursuant to Sec.1.2(d) hereof shall not be made unless approved in writing by EDC, which approval shall not be unreasonably withheld and shall be deemed given unless denied in writing within five (5) Business Days after EDC's receipt of The Times's written request for such approval, and no Funding shall be disbursed in respect of any Work affected by any such change or amendment unless approved in writing or deemed approved by EDC. (f) In addition to the provisions required to be included in the Construction Contracts pursuant to Sec.1.2(d) hereof, The Times may include in the Construction Contracts (and the bid packages therefor) such other provisions as The Times deems necessary to incorporate the requirements of this Agreement therein, including without limitation, that the Contractor shall not receive payment under its Construction Contract until all the conditions for disbursement described in Article 4 hereof have been satisfied and The Times has received payment of the Funding from EDC under this Agreement. -34- Sec.1.3 Liaison to EDC -------------- The Times agrees that it will cause the Person or Persons on The Times's staff, described in the Sewer System Election Notice as the Person or Persons primarily responsible to communicate with EDC regarding the performance of the Work, to be available to the extent reasonably required by EDC in connection with this Agreement. The Times further agrees to use its good faith efforts to notify EDC in writing of any intended substitution of said Person or Persons at least five (5) days prior to the date such substitution will take effect but in any event will notify EDC in writing of any such substitutions on the day such substitution will take effect. -35- ARTICLE TWO - THE FUNDING ------------------------- Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions, -------------------- representations and warranties contained in this Agreement, EDC agrees to disburse the Funding and The Times agrees to accept the Funding and all other agreements and obligations of EDC and the City set forth herein as full consideration for performance by The Times of the Work. Subject to EDC's remedies upon an Event of Default and except as otherwise provided herein, the Funding, once disbursed under this Agreement, shall not be subject to any reimbursement whatsoever to EDC. (b) The amount of the Funding shall be consideration for any and all costs, fees and/or expenses of The Times in any way connected with the performance of the Work and, subject to the receipt of such Funding, The Times will be solely responsible for completion of the Improvements in accordance with the Final Plans and Specifications. The Times acknowledges that the Funding is not a fee or other compensation earned by or paid to The Times. Sec.2.2 Disbursements. (a) The Times agrees to accept the Funding and to ------------- utilize the proceeds thereof solely in connection with the Work. Except as otherwise specifically set forth herein, in no event shall The Times be required to expend any of its own funds to pay for the performance of the Work and the construction of the Improvements. After the completion of the portion of the Work to which the portion of the payment being disbursed -36- applies, disbursements shall be made by EDC to The Times as follows: (1) With respect to Hard Costs, after receipt by EDC of all items required by Sec.4.2 below, in installments equal to (A) the product of (i) the measurements of the quantities of items attributable to the Construction Work (as certified by the Resident Engineer or the Construction Manager) and (ii) the unit price for each such item, (B) less ten percent (10%) retainage, until fifty percent (50%) completion of the Construction Work, and upon fifty percent (50%) completion of the Construction Work such lesser retainage as The Times may, in its sole discretion, require in its Construction Contracts to be retained (the "Retainage"), subject to disbursement as set forth in (3) below; (2) With respect to Resident Engineer Costs, in monthly installments equal to the Resident Engineer Costs for the previous month, calculated based on the Resident Engineer's fee schedule attached to the Construction Contract with respect to the Resident Engineer; (3) With respect to the Retainage, within twenty (20) days after the Final Acceptance Date; provided, however, such portion of the Retainage equal to one percent (1%) of the total cost of performing the Work shall not be disbursed upon the Final Acceptance Date but shall be disbursed within twenty (20) days after Final Completion. (b) Intentionally omitted. (c) All disbursements shall be made by check at the principal office of EDC, or at such other place within the City of New York as EDC may designate. Disbursement requests shall be submitted within the time periods and in the manner provided therefor in Article 4. -37- (d) No portion of the Funding shall be advanced for materials not incorporated into the Construction Site. (e) Disbursements of the Funding shall be no more frequent than every thirty (30) days and shall be made by EDC within ten (10) Business Days after the date EDC receives from The Times a complete disbursement request, reasonably satisfactory to EDC, together with the Requisition and all such other documentation as may be required or reasonably requested by EDC. (f) If EDC fails to disburse the Funding in accordance with the terms and conditions of this Agreement, and as a result of such failure any one or more of the Contractors cease performing the Construction Work, then provided that The Times gives EDC thirty (30) days prior written notice and an opportunity to cure such failure, The Times shall have the right, but not the obligation, to pay such Contractor or Contractors from its own funds for the performance of the Construction Work and, in accordance with Sec.9.5(b) hereof, receive an offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Payments due under the Lease, in an aggregate amount equal to the funds so disbursed by The Times to such Contractor or Contractors, from the date that The Times paid such funds to such Contractor or Contractors until the earlier to occur of the date on which EDC recommences the disbursement of the portion of the Funding allocable to the Construction Work performed by such Contractor or Contractors or the date of such offset. (g) If any one or more of the Contractors cease performing the Construction Work as a result of EDC's failure to disburse the Funding to The Times in accordance with -38- the terms and conditions hereof, then, notwithstanding anything to the contrary contained herein, EDC shall indemnify and hold harmless The Times Indemnitees from and against any and all claims, judgments, liabilities and causes of action whatsoever instituted and/or obtained by such Contractor or Contractors as a result of such failure to fund. The obligation of EDC to indemnify and hold harmless The Times Indemnitees shall include but not be limited to the payment of any and all costs and reasonable fees (including reasonable legal fees) as may be actually incurred by The Times Indemnitees as a direct result of EDC's failure to fund. Sec.2.3 Funding of Costs of Changes --------------------------- (a) Notwithstanding any provision to the contrary contained in this Agreement, EDC shall not disburse increased Funding on account of Eligible Costs covered by changes to the Final Plans and Specifications except as expressly provided in this Sec.2.3. In no event will the amount of the Funding be increased on account of such changes made other than pursuant to Sec.2.3(b)(i), Sec.2.3(b)(ii) or Sec.2.3(d) hereof. The Eligible Costs incurred in connection with all changes made in accordance with Sec.2.3(b)(ii) or Sec.2.3(d) hereof shall be paid for with the Funding. (b) Changes Initiated by The Times ------------------------------ (i) Material Changes. In no event shall The Times have the ------------------ right to initiate Material Changes to the Final Plans and Specifications and EDC shall not be obligated to disburse the Funding on account of Eligible Costs increased by any such Material Change initiated by The Times. If, in the course of the Construction of the -39- Improvements, The Times or its Contractors determines that a Material Change to the Plans and Specifications will be required to complete the Improvements, The Times shall notify EDC of such determination. Within ten (10) days after EDC's receipt of such notification, EDC shall either inform The Times that it believes no Material Change is required or it shall instruct the professional consultant engaged by EDC to prepare the Plans and Specifications (or the Resident Engineer if such Resident Engineer is the same Person as the professional consultant engaged by EDC) to make the appropriate changes to the Plans and Specifications. If EDC fails to respond to The Times within the ten (10) day period described above and if the Resident Engineer is the same person as the professional consultant engaged by EDC to prepare the Plans and Specifications, the Material Changes requested by The Times shall be deemed approved by EDC and the Resident Engineer shall have the right to make the appropriate changes to the Plans and Specifications. If EDC instructs its professional consultant to make changes to the Plans and Specifications, EDC shall cause such professional consultant to complete such changes within thirty (30) days after the date of EDC's instruction. (ii) Non-Material Changes. The Times shall have the right to ---------------------- initiate changes to the Final Plans and Specifications which result only in a change in the quantity of materials to be supplied under a Construction Contract (even if such change results in an increase of the cost of such Construction Contract). EDC shall disburse the Funding on account of each such change to the Final Plans and Specifications described above, provided that EDC is notified of such change prior to The Times's submission of a Requisition pursuant to Article 4 for funds relating to the Work covered by the change, and further -40- provided that the need for such change does not result from or arise out of an error or omission on the part of The Times or an Affiliate, any Contractor or subcontractor. (c) Intentionally Omitted. (d) Changes Initiated by EDC ------------------------ (i) Changes in the Work. EDC shall have the right and ---------------------- authority, on behalf of itself and the Reviewing Parties, to make interpretations of the Final Plans and Specifications and/or to order minor changes in the Construction Work that do not increase the price of a Construction Contract or that do not cause "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System. The Times shall promptly cause the affected Contractor(s) to comply with any such order. (ii) Change Orders. In addition to the changes requested --------------- pursuant to clause (i) above and changes requested by The Times pursuant to Sec.2.3(b)(i) hereof, from time to time during the course of the Work, changes in the Requirements governing the construction of the Improvements, field conditions or other unexpected conditions may require changed, deleted and/or additional work to be performed. For purposes of this Sec.2.3(d), said changed, deleted or additional work shall be referred to as "change order work". Only EDC, on behalf of itself and the Reviewing Parties, shall have the right to require change order work to be performed. All change order work must be performed only if ordered by a written directive from EDC (for purposes of this Sec.2.3(d), the "change order"). Neither oral directives nor any writing not designated by EDC as a change order will constitute change orders. Upon receipt of a change order from EDC, the Times shall cause its Contractors -41- to promptly comply with it by performing all necessary work in accordance therewith. If work is added or deleted by a change order, then the amount of the increase (in the event the change order work would involve any adjustment in the price of a Construction Contract that would bring the aggregate price of the Work to an amount greater than the amount of the Funding) or decrease in the Funding shall be determined in one or more of the following ways as may be applicable: (A) If The Times and the Contractor shall agree upon a lump sum value or a unit price value to increase or decrease the amount of the Funding for the work specified, The Times shall notify EDC of such agreed upon lump sum value or unit price value and EDC shall, or shall cause, such value to be stated in writing in the change order, and the amount of the Funding shall be changed by such value; and/or (B) If the Construction Contract and/or the bid proposal of the affected Contractor is based upon or shall contain unit prices which are to be applicable to the type of work involved in the proposed change order work, then said unit prices shall be used to set the value of the increase or decrease to the amount of the Funding for the change order work; and/or (C) If The Times and the affected Contractor cannot agree upon a lump sum value or unit price value, and no unit price is specified in the Construction Contract and/or the bid proposal of such Contractor, then the increase or decrease to the amount of the Funding shall be determined on a time and materials basis. (iii) Payment for Change Order Work. Payments for change order ------------------------------- work shall become due and shall be made by EDC to The Times after the Contractor has performed -42- the change order work and after the Contractor submits a fully signed copy of said change order (or the portion thereof covered by a Requisition) on the form annexed hereto as Exhibit D, with The Times's next requisition for payment, noting on said change order that the Contractor agrees to and accepts said change order. In the event that the change order is a credit change order, EDC shall make the deduction for said change order immediately upon the issuance of said change order against any funds due or to become due under this Agreement and/or any other change orders with respect to the relevant Contractor, subcontractor or material supplier. -43- ARTICLE THREE - TERM -------------------- Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon ----- the execution of this Agreement by both Parties and the unconditional delivery of this Agreement by each Party to the other and shall expire upon the occurrence of any of the following events: (i) the expiration of the 90 Day Election Period if The Times fails to deliver to EDC a Sewer System Election Notice within such period, (ii) the date, prior to the date which is one hundred and eighty (180) days after the Project Commencement Date, on which EDC receives notice from The Times, in accordance with Sec.1.1(b)(1) hereof, of The Times's revocation of its election to construct the Sanitary Sewer System, or (iii) if The Times has delivered to EDC a Sewer System Election Notice and has not revoked such election on or prior to the date which is one hundred and eighty (180) days after the Project Commencement Date and has in fact commenced the Construction Work, then the later to occur of either (x) one month after Final Completion of the Work, or (y) the complete disbursement by EDC to The Times of all amounts payable to The Times pursuant to the terms of this Agreement, unless sooner terminated by EDC in accordance with this Agreement. All rights, remedies and liabilities arising prior to the termination or expiration of the Term shall survive the date of termination or expiration, as the case may be. -44- ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT ------------------------------------------ Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to --------------------------------- disburse any of the Funding to The Times unless, at any time prior to the first request for disbursement of the Funding but no later than ten (10) days prior to the date on which the first payment of the Funding to be made pursuant to this Agreement is sought, EDC shall have received the following documents, together with a cover sheet (a "Completed Cover Sheet") listing the items submitted: (a) a legal opinion by counsel to, or general counsel of, The Times (addressed to EDC) in the form annexed hereto as Exhibit E, to the effect that (I) this Agreement is legal, valid and binding upon and enforceable against The Times in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), and (II) The Times has been duly authorized to execute and deliver this Agreement; (b) a certificate, in the form annexed hereto as Exhibit F, of an authorized officer of The Times certifying the specimen signature of each officer, director or agent of The Times authorized to deliver Requisitions under this Agreement; (c) copies of any then executed Construction Contract(s), containing all the provisions required pursuant to Sec.1.2(d) hereof; and (d) a collateral assignment by The Times to EDC of The Times's right, title and -45- interest to the Construction Contracts, which collateral assignment shall be effective only upon an Event of Default and the termination of this Agreement. Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC ------------------------------------------------------------- shall not be obligated to make the first disbursement of the Funding or any subsequent disbursement with respect to the Work unless the following conditions, in addition to the conditions described in Sec.4.1, shall have been satisfied: (a) The following documents, in form and substance reasonably satisfactory to EDC, together with a Completed Cover Sheet, shall, except to the extent previously submitted by The Times, be delivered to EDC at least ten (10) days in advance of the date on which each (except as otherwise indicated in this Sec.4.2) payment is sought: (i) copies of all Contractor's Approvals necessary to lawfully perform the Construction Work for which the Funding is being sought in accordance with the Final Plans and Specifications; (ii) a requisition executed and certified by an authorized representative of The Times (and addressed to EDC), setting forth: (x) the amount of the requested disbursement, (y) an itemization of the Eligible Costs for which the disbursement is sought, and (z) a list of Contractors whose work is covered by the requisition, indicating the amount requested with respect to each such Construction Contract, with a certification by such authorized representative -46- that such Eligible Costs have not previously been reimbursed under this Agreement. The requisition shall be accompanied by the certification described in Sec.6.1 hereof and copies of (I) all Construction Contracts on account of which payment is being sought that have not been previously delivered, containing all the provisions required pursuant to Sec.1.2(d) hereof (or for Construction Contracts that have been previously delivered, a statement to that effect and copies of any amendments thereof); (II) as applicable, requisitions or applications for payment by the Resident Engineer or the Construction Manager to The Times; (III) as applicable, a copy of an "Application and Certificate for Payment", substantially in the forms annexed hereto as Exhibit G, completed and executed by the Resident Engineer or the Construction Manager with respect to all work performed by Contractor(s) and covered by The Times's requisition, together with a statement of the Resident Engineer or the Construction Manager addressed to EDC stating the quantities of materials installed with respect to the Construction Work completed as of the date of the requisition and that, to the Resident Engineer's or the Construction Manager's knowledge, the Construction Work performed by the Contractor(s) and covered by the requisition has been performed to the Resident Engineer's or the Construction Manager's reasonable satisfaction substantially in accordance with the Final Plans and Specifications; and (IV) in connection with each disbursement request other -47- than the first disbursement request, partial releases of liens from all Contractors, subcontractors and suppliers in respect to Construction Work performed under a Construction Contract or subcontract and for which the Eligible Costs in connection therewith have been reimbursed with the Funding pursuant to a prior Requisition (the items described in this paragraph (ii), collectively, the "Requisition"); (iii) such additional documents, data or information reasonably requested by EDC with respect to the Construction Site and the Work or in support of the Requisition, including without limitation, documents as would customarily be required by City agencies engaged in projects similar in scope to the Work such as trade payment breakdowns in support of all subcontractors' requisitions to the Resident Engineer, Construction Manager or General Contractor (as the case may be), if any, invoices, and receipts; (iv) a written statement by DLS certifying that each Contractor performing Work has complied with the City's equal employment requirements under mayoral Executive Order No. 50 (April 25, 1980), as amended, if applicable, or evidence from The Times or DLS that Executive Order No. 50 or its successor does not apply, it being understood that such written statement or other satisfaction by DLS for each Contractor only needs to be submitted at the time of the submission of the first requisition covering such Contractor's work and it being further understood that, notwithstanding anything to the -48- contrary contained herein, for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees, the trainee requirements of Executive Order No. 50 shall not be applicable to the Construction Work, the Contractors and the subcontractors and the Contractors and the subcontractors shall in no event be deemed to be in noncompliance with Executive Order No. 50 due to noncompliance with such trainee requirements; and (v) in connection with the first disbursement request, as described in Sec.6.12, a completed and duly executed W/MBE Plan in the form annexed hereto as Exhibit H. (b) As of the date of the disbursement, (i) the representations and warranties made in Article Five shall be correct and complete and (ii) there shall exist no unbonded public improvement lien relating to the Funding; provided, however, that in the event there exists an unbonded public improvement lien relating to the Funding, EDC shall continue to disburse to The Times those portions of the Funding which are otherwise payable hereunder reduced only by the amount of such unbounded lien. Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this ------------------------- Article Four shall be directed to EDC's Vice President for Construction. -49- ARTICLE FIVE - REPRESENTATIONS, WARRANTIES AND ---------------------------------------------- GUARANTIES OF THE TIMES ----------------------- To induce EDC to disburse the Funding, The Times represents and warrants as follows: Sec.5.1 Organization; Standing. The Times is a corporation duly organized ----------------------- and validly existing under the laws of the State of New York and has all requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. A copy of The Times's certificate of good standing from the Secretary of State of the State of New York is attached hereto as Appendix D, and hereby made a part hereof. Sec.5.2 Intentionally omitted. Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery -------------------------------------- of this Agreement by The Times is not, and the performance of this Agreement by The Times will not be, effectively prohibited or prevented by, or in breach of (i) the certificate of incorporation or by-laws of The Times, or (ii) to the best of The Times's knowledge, any presently existing or effective law, judgment, order, writ, injunction, decree, rule or regulation of any court or Governmental Authority applicable to The Times, or (iii) any agreement, instrument or undertaking which is binding on The Times. -50- Sec.5.4 No Litigation. As of the date of this Agreement there are no -------------- suits or proceedings pending or, to the best of The Times's knowledge, threatened against The Times which would materially affect the construction of the Improvements, the consummation of the transactions contemplated by this Agreement, or the full performance of the obligations of The Times under this Agreement. Sec.5.5 Intentionally omitted. Sec.5.6 Intentionally omitted. Sec.5.7 Quality of Work; Guaranties and Warranties. ------------------------------------------- (a) The Times shall cause the Construction Work to be performed in a good and workmanlike manner, and all materials and equipment and workmanship utilized or furnished in connection with the Construction Work shall be in new (unless otherwise specified in the Final Plans and Specifications) and good condition, fully operational, without defects (except to an immaterial extent), substantially in accordance with the Final Plans and Specifications. The Times shall, in connection with the Construction Work, obtain the maximum guaranties and warranties on labor, materials and equipment as are generally available within the relevant industry. The costs of obtaining such guaranties and warranties shall be considered Eligible Costs and are payable with the Funding. (b) (i) The Times shall repair, replace, restore, remedy or correct, or cause to be -51- repaired, replaced, restored, remedied or corrected, any defects, faults or deficiencies (including any damage arising out of such defects, faults or deficiencies) in workmanship or materials which exist, occur, or are discovered within or affecting the Construction Site and are covered by the guarantees and warranties required to be obtained pursuant to this Sec.5.7, within ten (10) Business Days after notice of such defect, fault or deficiency from EDC or the City to The Times (provided that The Times receives such notice at least ten (10) days prior to the one year anniversary of the relevant guaranty or warranty). If the nature of the correction or remedy is such that The Times cannot reasonably be expected to complete such remedy or correction or cause such remedy or correction to be completed within ten (10) Business Days of said notice, The Times shall commence, or cause the commencement of, such remedy or correction within such ten (10) Business Day period and diligently and in good faith prosecute such remedy or correction to completion. (ii) Notwithstanding anything to the contrary contained in clause (i) above, if any guaranty or warranty extends for a period longer than twelve (12) months after the Final Acceptance Date, The Times shall assign its rights and interests therein to EDC and the City, which assignment shall be in form and substance reasonably acceptable to EDC, and executed by The Times, the Construction Manager or the General Contractor (as the case may be). Thereafter, The Times shall have no further obligation under this Agreement to repair, replace, restore or correct, or cause the repair, replacement, restoration or correction of, any defects, faults or deficiencies (including any damage arising out of such defects, faults or deficiencies) in workmanship which The Times is notified of on or after -52- the date of the assignment of such guaranties and warranties and EDC and the City will not prosecute claims against The Times but rather will seek compensation or services from the party or parties giving the pertinent guaranty or warranty. The Times will cooperate with EDC and the City, at no cost or expense to The Times, in the prosecution of any claims against such parties after the expiration of the above described twelve (12) month Guaranty Period. (c) Intentionally Omitted. (d) If The Times fails to repair, replace, restore, remedy or correct, or cause to be repaired, replaced, restored, remedied or corrected, any defect, fault or deficiency within ten (10) Business Days after notice thereof as provided in Sec.5.7(b), or, if the nature of such correction or remedy is such that The Times cannot reasonably be expected to complete such repair, replacement, restoration, remedy or correction, or cause such repair, replacement, restoration, remedy or correction to be completed, within ten (10) Business Days after said notice, The Times has not promptly commenced, or caused to be commenced, within said ten (10) Business Days or diligently and in good faith prosecuted, or caused to be prosecuted, such repair, replacement, restoration, remedy or correction to completion, then EDC or the City may (but is not obligated to) provide The Times with written notice that, if such remedy or correction is not completed or commenced and diligently and in good faith prosecuted, as the case may be, within ten (10) Business Days following delivery of said notice, EDC or the City shall perform the required corrective or remedial work. The Times shall then cause the following to happen: (i) repair, replace, -53- restore, remedy or correct, or cause to be repaired, replaced, restored, remedied or corrected, the item within ten (10) Business Days following such notice except as provided in clause (ii) below, or (ii) if the nature of the repair, replacement, restoration, remedy or correction is such that The Times cannot reasonably be expected to complete, or cause to be completed, such repair, replacement, restoration, remedy or correction within said ten (10) Business Days following such notice, then The Times shall be required to commence, or cause to be commenced, within ten (10) Business Days such repair, replacement, restoration, remedy or correction, and diligently and in good faith prosecute, or cause to be prosecuted, such repair, replacement, restoration, remedy or correction to completion. If in the event of item (i) of the preceding sentence, such repair, replacement, restoration, remedy or correction is not completed or caused to be completed within ten (10) Business Days, or, in the event of item (ii) of the preceding sentence, such repair, replacement, restoration, remedy or correction is not commenced or caused to be commenced within ten (10) Business Days and diligently completed or caused to be completed, then EDC or the City may (but is not obligated to) perform the required corrective work itself or engage independent contractors and subcontractors to perform such corrective work, and shall be entitled to reimbursement for the reasonable cost of such work, plus an amount equal to interest at the Late Charge Rate on, and the out-of-pocket costs of collection of, any reimbursement due EDC or the City from The Times hereunder, including but not limited to reasonable attorneys' fees. If The Times disputes the need for such repairs, the obligation of The Times pursuant to this Agreement to repair or cause such repairs to be -54- made, or the cost of such repair, such dispute shall be resolved by arbitration in accordance with the procedure for arbitration set forth in Article 34 of the Lease and the time periods set forth in this Sec.5.7(d) shall be tolled during the pendency of such arbitration. The costs of such arbitration (including, but not limited to, legal fees) shall be paid as set forth in Section 34.02(b) of the Lease. (e) Intentionally omitted. (f) Any warranties or guaranties relating to the construction and completion of the Construction Work or materials in connection therewith that are required to be obtained hereunder shall, to the extent reasonably obtainable by The Times, the Resident Engineer, the Construction Manager or the General Contractor (as the case may be), expressly be made for the benefit of The Times, the Resident Engineer, the Construction Manager or the General Contractor (as the case may be), EDC and the City, and, to the extent that EDC or the City are not expressly named in any such warranty or guaranty, The Times, the Resident Engineer, the Construction Manager or the General Contractor (as the case may be), shall assign its rights and interest therein to EDC and the City in accordance with Sec.5.7(b)(ii) hereof. (g) The provisions of this Sec.5.7 shall survive the completion of disbursement of the Funding and the termination of this Agreement until the expiration of the respective Guaranty Periods or such period of time thereafter necessary to remedy or correct any default, fault or deficiency discovered within such Guaranty Periods which is required to be remedied or corrected hereunder. -55- (h) Notwithstanding anything to the contrary contained in this Agreement, if any Person other than The Times connects into the Sanitary Sewer System, then the provisions of this Sec.5.7 shall be deemed null and void and of no further effect and thereafter The Times shall have no responsibilities or obligations with respect to the workmanship and operation of the Sanitary Sewer System as set forth in this Sec.5.7. -56- ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC ------------------------------------------------------ To induce The Times to enter into this Agreement and perform the Work, EDC represents and warrants as follows: Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation, ------------------------ organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation Laws and has all the requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has -------------------------------------------- been duly authorized, executed and delivered by EDC and constitutes a legally binding obligation of EDC enforceable in accordance with its terms. A legal opinion by general counsel of EDC (addressed to The Times) providing that this Agreement is legal, valid and binding upon and enforceable against EDC in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), is attached hereto as Appendix E and hereby made a part hereof. A certificate of the Secretary of EDC, dated as of the date of this Agreement, certifying to the adoption of resolutions by the Board of Directors of EDC authorizing the execution and delivery of this Agreement by EDC is attached hereto as Appendix F and hereby made a part hereof. -57- ARTICLE SIX ----------- COVENANTS --------- Sec.6.1 Requisitions Update The Times's Representations. The Times --------------------------------------------------- covenants that each Requisition presented to EDC under Article Four shall be accompanied by a completed certification, in the form attached hereto as Exhibit I. Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the ------------------------------------------------------- Term, The Times shall: (a) comply with all of the terms, conditions and covenants now or in the future binding upon or applicable to The Times under this Agreement; (b) do all things necessary to maintain and keep in full force and effect its existence, rights and privileges under the laws of the State of New York; and (c) comply with, and do all things reasonably necessary to cause the Work to be performed in compliance with all Requirements applicable to the Work and/or the Construction Site, it being understood that The Times shall not be held responsible for failure to comply with the Requirements to the extent that such failure arises out of The Times's performance of the Work in accordance with the Final Plans and Specifications. Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The ------------------------------------------------------------ Times shall maintain or cause to be maintained the insurance coverage described in Appendix C -58- attached hereto. The Times shall comply with all of the applicable provisions of such insurance policies. Nothing contained in this Sec.6.3 is intended to confer any rights upon any third party. Sec.6.4 Maintenance of Office. The Times will maintain an office in the ----------------------- City of New York where notices with respect to this Agreement may be delivered to it and inspections and audits in accordance with Sec.6.7 may be conducted. Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or ------------------------------- cause to be included, the following requirements, as applicable, in all Construction Contracts, and shall require, or cause to be required, all subcontracts with respect to the Construction Work to include the same requirements, so that the Contractor(s) and any subcontractors shall agree, in substance: (i) to comply with (1) the applicable provisions of City and New York State equal employment and affirmative action laws applicable to construction contractors and non-construction contractors which are annexed to and made a part of this Agreement as Appendix G (consisting of "Construction Contract Rider" pursuant to mayoral Executive Order No. 50, provided, however that the trainee requirements set forth therein shall be inapplicable for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees), and the filing of any required construction employment reports with -59- the City's Bureau of Labor Services on the forms annexed hereto as Appendix H; (2) New York State Labor Law Sec.220e, and (3) City Administrative Code Sec.6-108; (ii) to comply with the applicable provisions of the New York City Noise Control Code (Administrative Code Sec.24-216, as amended, and related regulations); and (iii) to pay no less than prevailing wage rates and supplemental benefits to laborers, workers and mechanics pursuant to Sec.220(3) of the New York State Labor Law in accordance with the currently scheduled rates, as amended from time to time. (b) The Times shall use its good faith efforts to promptly, diligently and continuously enforce the full and faithful performance by the Contractors with whom The Times enters into Construction Contracts hereof with the provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith efforts to cause such Contractors to enforce such compliance by the subcontractors and materials suppliers hired by such Contractors in connection with the Construction Work. Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall ----------- not assign this Agreement except that The Times may assign this Agreement to an Affiliate without EDC's prior written consent, provided that such Affiliate assumes all the rights and obligations of The Times under this Agreement, and that all the representations, warranties and covenants made by The Times in this Agreement shall be similarly made by such -60- Affiliate, and further provided that The Times provides to EDC a copy of the executed written agreement evidencing such assignment and assumption. Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate, ----------------------- readily auditable records and accounts with supporting documentation, of (i) all of the costs related to the construction of the Improvements, (ii) all of its receipts and expenditures in connection with the Funding and with the Work, and (iii) all financial accounts and transactions maintained or undertaken in connection with this Agreement. The Times shall make such records available for inspection and audit at The Times's place of business within New York City by EDC and the City at reasonable times and upon reasonable advance notice. All such records and accounts shall be maintained for a period of six years after termination of this Agreement. The provisions of this Sec.6.7 shall survive the expiration or earlier termination of this Agreement. Sec.6.8 Intentionally omitted. Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and ------------------------------------ hold the proceeds of the Funding (including any insurance proceeds arising out of any casualty affecting property purchased with the Funding) as a trust fund to be applied exclusively for the payment of Eligible Costs (or reimbursement to The Times for the payment of Eligible Costs) in accordance with the terms of this Agreement and shall not use any part of the same for any other purpose. -61- Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of ----------------------------- the Funding shall not constitute a waiver of any default by The Times on account of defective construction work in performance of the Work or deviation from the Final Plans and Specifications. No part of the Funding shall be disbursed for the correction of such non-conforming work unless either (i) such defective work was performed in accordance with the Final Plans and Specifications, or (ii) such deviation from the Final Plans and Specifications was necessitated as a result of unexpected field conditions and was performed in accordance with good construction practices and EDC approved (which approval shall not be unreasonably withheld or delayed), in writing, the performance of such work. Sec.6.11 Participation by Women and Minority Owned Businesses ---------------------------------------------------- (a) EDC is committed to maximizing meaningful participation by women- owned business enterprises ("WBEs") and minority-owned business enterprises ("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its contracting opportunities. Based on its review of the scope of the Work and the lists of certified W/MBEs maintained by the interested government entities identified below, EDC estimates that a total aggregate W/MBE percentage of twenty-five percent (25%) can be attained by The Times for the Work. Accordingly, prior to receipt of any disbursements hereunder, The Times shall complete a utilization plan (the "W/MBE Plan"), in the form of Exhibit H attached hereto, describing The Times's plan for participation of W/MBEs in the Work. (b) In order to be considered W/MBEs for purposes of inclusion in the W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE Plan must -62- have received certification, as WBEs and/or MBEs, from the New York City Department of Business Services ("DBS"). Businesses that have been certified as being women or minority owned by the New York State Department of Economic Development or the Port Authority of New York and New Jersey may be eligible to receive expedited certification from DBS, after completing the DBS "Expedited Certification Affidavit" in the form of Exhibit H-1 attached hereto. Each of these entities maintain current lists of certified W/MBEs; The Times is encouraged to contact these entities in order to obtain copies of their current lists of certified W/MBEs who may be qualified to participate, either as Contractors, subcontractors or materials suppliers, in the Work. Together with submission of the W/MBE Plan, The Times shall submit verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan are certified as WBEs and/or MBEs by DBS prior to the award of the contract with respect to such Contractor, subcontractor or material supplier. (c) The Times should use the W/MBE Plan to identify potential W/MBEs that The Times, the Resident Engineer, the Construction Manager or the General Contractor intends to employ as Contractors, subcontractors or materials suppliers. The W/MBE Plan requires the identification of the specific trade and/or the specific material to be supplied by such W/MBEs. The W/MBE Plan requires that the level of participation by W/MBEs be described based on (i) a dollar value estimate of participation by W/MBEs (the "W/MBE Participation Dollar Value") and (ii) the percentage of the total Funding that will be passed on to W/MBEs (the "W/MBE Percentage"). (d) The Times shall not be required to utilize the specific W/MBEs listed in the -63- W/MBE Plan and substitutions may be made; however, The Times shall provide for the participation of W/MBEs in the Work at a level equal to or greater than the total aggregate W/MBE Participation Dollar Value and the total aggregate W/MBE Percentage as each are set forth in the W/MBE Plan. The W/MBE Participation Dollar Value and the W/MBE Percentage recorded on the W/MBE Plan are a part of this Agreement. The Times cannot reduce the W/MBE Participation Dollar Value or the W/MBE Percentage. (e) If The Times breaches the foregoing obligation relating to the participation of W/MBEs in the Work, then, as its sole and exclusive remedy against The Times with respect to such breach, EDC shall be entitled to withhold from disbursement to The Times a portion of the Funding in the amount equal to the difference between (i) the W/MBE Participation Dollar Value set forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value achieved by, and in fact paid to participating W/MBEs by or on behalf of, The Times in respect of the completed Work. No portion whatsoever of any of the Funding that is withheld pursuant to this Sec.6.11(e) shall be charged to the account of any W/MBEs employed in respect of the Work. (f) The Times may substitute other certified W/MBEs for those identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which approval shall not be unreasonably withheld) before being employed, either as Contractors, subcontractors, or as materials suppliers, in respect of the Work. The Times may also add additional W/MBEs to the W/MBE Plan provided that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage falls below that identified in the W/MBE Plan. -64- Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times --------- shall not create, permit or suffer to exist any mortgage, encumbrance, lien, security interest, claim or charge against the Construction Site, other than those portions of the Construction Site, if any, that constitute a part of the Premises (in which case, the creation of, or the permission or sufferance to exist of, any mortgage encumbrance, lien, security interest, claim or charge shall be made in accordance with the terms of the Lease). (b) The Times will cause the Improvements to be constructed free and clear of liens of mechanics, material persons and suppliers, including public improvement liens, or claims for any such liens subject to The Times's right to cause any such lien to be removed or bonded within sixty (60) days after the placement of such lien. The costs of removing or bonding such lien shall be paid by The Times except if such lien was placed solely as a result of EDC's failure to disburse to The Times the Funding in accordance with this Agreement, in which case EDC shall pay for the costs of removing or bonding such lien. Sec.6.13 Intentionally omitted. Sec.6.14 Intentionally omitted. Sec.6.15 Intentionally omitted. Sec.6.16 MacBride Principles. The Times hereby agrees that with respect -------------------- to any Construction Contract entered into for the performance of the Work, The Times shall (i) -65- include in such Construction Contract the requirements of the MacBride Principles Rider, attached hereto as Appendix J, and shall (ii) require its Contractors (A) to comply with applicable covenants and representations set forth in Appendix J, and (B) to cause its contractors, subcontractors, and materials suppliers performing the Work to also comply with the requirements of Appendix J. Notwithstanding anything to the contrary contained herein, the provisions of this Sec.6.16 shall not apply to any contractor, subcontractor or materials supplier with respect to which there is not another contractor, subcontractor or materials supplier to perform work or supply materials of comparable quality at a comparable price. Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion ------------------------ of the Funding to The Times shall not constitute a waiver of EDC's right to require compliance with any of the covenants contained in this Article Six or otherwise contained in this Agreement. -66- ARTICLE SEVEN - DEFAULT AND TERMINATION --------------------------------------- Sec.7.1 Events of Default. An "Event of Default" shall exist if any of ------------------ the following shall have occurred: (a) if The Times shall have applied the Funding in violation of the covenant set forth in Sec.6.9 and such misapplication was not corrected within ten (10) Business Days after receipt of written notice thereof; or (b) if The Times fails to duly observe or perform any of the material covenants and agreements contained in this Agreement (other than the covenants contained in Sec.6.9) and if such failure continues for twenty (20) Business Days after receipt of written notice to The Times by EDC specifying with particularity such material default and requiring such material default to be remedied; provided, however, that if because of Unavoidable Delays or if the nature of the default is such that The Times cannot reasonably be expected to cure the same within such period, then such material default shall not be an Event of Default if, within such period (subject to Unavoidable Delays), The Times commences in good faith to cure such material default and (subject to Unavoidable Delays) diligently prosecutes such cure to completion; or (c) if an "Event of Default" (as defined in the Lease) has occurred under the Lease and EDC has taken action to terminate the Lease in accordance with the terms thereof; or (d) if there is any cessation of the Construction Work for any period in excess of ninety (90) successive calendar days after the date upon which the Construction Work shall -67- commence, unless the cessation of the Construction Work shall have been caused by Unavoidable Delays and construction or construction-related activities shall have resumed promptly after the cause of the Unavoidable Delay shall have been removed and shall be diligently pursued (it being understood that during any such cessation of the Construction Work, EDC shall have the right, upon three (3) days prior written notice to The Times, to enter upon the Construction Site for the purpose of protecting the Construction Site against deterioration, loss, damage or theft if the Contractor or Contractors required, pursuant to its respective Construction Contract(s), to provide such services has ceased providing the services); or (e) if any representation or warranty by The Times contained in this Agreement shall be materially false when made or reaffirmed and such materially false representation or warranty materially adversely affects The Times's ability to enter into this Agreement and perform the Work in accordance with the terms hereof. Sec.7.2 Default Remedies; Exculpation. ------------------------------ (a) Upon an Event of Default, EDC may exercise any right or remedy permitted to it by law, in equity, or under this Agreement, including, without limitation, the right to obtain restitution of any portion of the Funding which is applied by The Times, The Times's employees, agents or contractors in violation of Sec.6.9, with interest from the date of EDC's disbursement at the Late Charge Rate. Without limiting the generality of the foregoing, upon an Event of Default, EDC shall have the right to elect to terminate this Agreement -68- (reserving, however, all remedies provided in this Article Seven or existing otherwise) or to make no further disbursements until such default is remedied or determined not to be an Event of Default. (b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof, the liability of The Times and its Affiliates under this Agreement for damages or otherwise shall be limited to (i) any sums advanced hereunder to The Times but not heretofore expended by it, (ii) the proceeds (to the extent actually received by The Times) of any insurance policies covering or relating to the Work or the Construction Site, (iii) the obligations of The Times set forth in Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the period prior to their assignment to EDC. In no event shall EDC look to the property or assets of any of the individuals who are the directors, officers, employees, shareholders, agents or servants of The Times, and no property or assets of any of the aforesaid Persons shall be subject to levy, execution or other enforcement procedure for the satisfaction of The Times's obligations under this Agreement, except in the event such individual has misapplied the Funding as described in Sec.7.2(c) below and then only to the extent of the actual dollar amount that such individual has misapplied the Funding; provided, however, that if such misapplication was the result of such individual's fraudulent conduct, such individual's liability shall be as set forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no event shall The Times Indemnitees be liable for consequential damages under this Agreement. (c)(i) Each of the individuals described in Sec.7.2(b) above shall be personally liable (as distinguished from collective liability), to the full extent provided by law, in equity, and -69- by this Agreement if any such relevant individual shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct, in which case such liability shall not be limited as provided above. (ii) The Times shall be liable to the full extent provided by law, in equity, and by this Agreement if The Times shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct on the part of The Times as opposed to the fraudulent conduct of an individual not authorized by The Times to act in such a manner, in which case such liability shall not be limited as provided above. (d) No course of dealing on the part of EDC or any failure on the part of EDC to exercise any right shall operate as a waiver of such right or otherwise prejudice EDC's remedies. No right or remedy conferred upon or reserved to EDC is intended to be exclusive of any other right or remedy. Every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as EDC may deem appropriate. -70- The exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of EDC in exercising any right or remedy occurring upon an Event of Default shall impair any such right or remedy or constitute a waiver of or acquiescence in such Event of Default. (e) The provisions of this Sec.7.2 shall survive the expiration or termination of the Term. Sec.7.3 Termination. If, upon the occurrence of an Event of Default ------------ described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this Agreement, or for any other reason provided for under this Agreement, this Agreement is terminated, EDC agrees that, provided that the Lease remains in full force and effect and no "Event of Default" (as defined in the Lease) shall have occurred and be continuing thereunder, EDC shall undertake the construction of the Sanitary Sewer System in accordance with the Final Plans and Specifications with such reasonable changes therein as EDC may from time to time and in its reasonable discretion, deem appropriate; provided that, in no event shall such changes diminish the ability of the Sanitary Sewer System to adequately serve the Premises and the Project, and further provided that in no event shall such discretionary changes (i.e. changes which are not required by the Requirements, field conditions or other unexpected conditions, or are not necessitated by reason of The Times's default under this Agreement) cause "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue of the inability to hook up the Project to the Sanitary Sewer System. In such circumstances, EDC shall have the right (but shall not be obligated) to assume any -71- Construction Contract made by or on behalf of The Times in any way relating to the Work and to take over and use all or any part or parts of the labor, materials, supplies and equipment contracted for, by, or on behalf of The Times, whether or not previously incorporated into the Construction Site, all in EDC's discretion. To effectuate the provisions of this paragraph, The Times hereby collaterally assigns to EDC all such Construction Contracts, whether presently existing or made in the future, as more particularly set forth in Sec.4.1(d) hereof, and, if EDC exercises its rights under such collateral assignment, EDC shall assume all of the obligations and liabilities of The Times under such Construction Contracts. In connection with any demolition or construction undertaken by EDC pursuant to the provisions of this Sec.7.3, EDC may (i) engage builders, contractors, architects, engineers and others for the purpose of furnishing labor, materials and equipment, (ii) reasonably pay, settle or compromise all bills or claims which may become liens against the Construction Site, or which have been or may be properly incurred, or for the discharge of liens, encumbrances or defects in the title of the Construction Site, and (iii) take such other reasonable action (including the employment of watchmen) to protect the Construction Site. Any costs incurred by EDC in connection with the performance of the above- described work which are in excess of the amount of the Funding and which are necessitated as a result of the earlier termination of this Agreement by reason of The Times's default or The Times's failure to perform its obligations with respect to the construction of the Improvements in accordance with this Agreement and the Final Plans and Specifications shall be paid by The Times. The provisions of this Sec.7.3 shall survive the expiration or termination of the Term. -72- Sec.7.4 Right to Reinstate Agreement. If, after termination of this ------------------------------- Agreement (the "Initial Termination"), EDC fails, in accordance with Sec.7.3 above, to either (i) commence the construction of the Sanitary Sewer System, or (ii) if The Times had already commenced the construction of the Sanitary Sewer System pursuant to the terms of this Agreement but such construction was stopped as a result of the termination of this Agreement, recommence the construction of the Sanitary Sewer System, in either case within six (6) months after the Initial Termination, then provided that The Times shall have given EDC thirty (30) days prior written notice and an opportunity to cure, The Times shall have the right to elect to reinstate this Agreement and construct the Sanitary Sewer System in accordance with the terms hereof; provided, however, that any costs incurred by The Times in excess of the amount of funds allocated by the City and EDC for the Funding at the time of the termination of this Agreement shall be paid at the sole cost and expense of The Times without any right of reimbursement under this Agreement or any other agreement of The Times with EDC or the City if and to the extent that such excess amounts are incurred by reason of The Times's default or The Times's failure to perform its obligations with respect to the construction of the Improvements in accordance with the Final Plans and Specifications (including, without limitation, construction delays). Upon reinstatement of this Agreement in accordance with this Sec.7.4, all terms and provisions of this Agreement shall be in full force in effect, including without limitation, the provisions of this Article 7 with respect to EDC's right to terminate this Agreement upon the occurrence of a further Event of Default. The provisions of this Sec.7.4 shall survive the Initial Termination but shall not survive any further or subsequent termination. -73- ARTICLE EIGHT - NOTICES ----------------------- Sec.8.1 Notices. All notices under this Agreement shall be in writing and -------- shall be deemed to have been sufficiently given or served for all purposes as of the date when sent by hand, or by a national overnight courier service, or by certified or registered mail, return receipt requested, and addressed as follows (or to such other addresses as may from time to time be designated by EDC or The Times by notice delivered to the other in accordance with this Sec.8.1): (i) if to EDC: New York City Economic Development Corporation 110 William Street New York, N.Y. 10038 Attention: President with a copy via ordinary mail to General Counsel, at the same address and to: New York City Law Department 100 Church Street New York, New York 10007 Attention: Chief, Economic Development Division; (ii) if to The Times: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Solomon B. Watson, IV, Esq. General Counsel -74- with a copy via ordinary mail to David Thurm, Executive Director of Project Development, at the same address, and with a copy in the same manner sent to The Times to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin Polevoy, Esq. Sec.8.2 Disbursement Submissions. All Requisitions and other submissions ------------------------- for disbursements required to be made pursuant to Article Four of this Agreement shall be addressed as directed in Sec.4.3 hereof. -75- ARTICLE NINE - GENERAL CONDITIONS --------------------------------- AND COVENANTS ------------- The following terms, covenants and conditions shall be applicable throughout the Term: Sec.9.1 Conflict of Interests. No member, officer, director or employee ---------------------- of EDC or the City, or their designees, consultants or agents; no member of the governing body of the City and no public official of the City who exercises or exercised any functions or responsibilities with respect to the subject matter of this Agreement during his/her tenure, if known to The Times, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Work or in any activity or benefit arising out of or in connection with the performance of the Work. Upon receiving actual notice or knowledge of any of the circumstances specified in the preceding sentence, The Times shall deliver notice to EDC of the circumstances and immediately shall use good faith efforts to cause the Persons affected to terminate their interest in the prohibited contract or property. The Times shall require the Resident Engineer, Construction Manager, Owner's Representative or General Contractor (as the case may be) and the Contractors, subcontractors and materials suppliers to make appropriate representations in writing that they, their employees and principals do not have any conflict of interest prohibited under this Sec.9.1, and to covenant to use good faith efforts to cause the -76- prohibited persons to terminate their interest in the relevant contract or property upon demand by The Times. Sec.9.2 No Liability of Individuals. No officer, employee, director, ------------------------------ member, agent or other person authorized to act on behalf of EDC or the City shall have any personal liability in connection with this Agreement or any default by EDC or the City. Sec.9.3 Anti-Boycott Provisions. ------------------------ (a) The Times agrees that it is not now participating, nor shall it participate during the Term, in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder. (b) Upon the final determination by the United States Department of Commerce or any other agency of the United States as to conviction of The Times for participation in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder, EDC may, at its option, declare a default under this Agreement (which default is subject to cure by The Times in accordance with the terms of this Agreement). (c) The Times shall comply in all respects with the provisions of Sec.6- 114 of the Administrative Code of the City and the rules and regulations issued by the Comptroller of the City thereunder. -77- Sec.9.4 Governing Law. The provisions of this Agreement shall be governed -------------- and interpreted in accordance with the law of the State of New York. Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b) ------------------ hereof, EDC shall not be liable for consequential damages under this Agreement to The Times or to any other Person in any matter arising out of the construction of the Improvements. (b) Notwithstanding any provision to the contrary contained in this Agreement, if EDC defaults in the disbursement of the Funding for which it is obligated, pursuant to the terms of this Agreement, to disburse to The Times or in the payment of any other monetary amount owed to The Times pursuant to the provisions of this Agreement and fails to cure such default within thirty (30) days after The Times delivers notice (the "EDC Default Notice") to EDC of such default, or if the moneys in the aggregate sum of approximately $3.6 million, or such other greater or lesser amount as may be necessary to pay for the costs of the Work and any change order work or other changes to the Final Plans and Specifications or Construction Contracts approved by EDC, shall not be made available to EDC by the City, in whole or in part for any reason, then, provided that The Times proceeds with the construction of the Improvements, for each dollar of Funding not so disbursed or monetary amount not so paid by EDC or made available to EDC by the City, The Times shall have the right to (y) offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Fund Payments due under the Lease in an amount equal to the Funding not so disbursed by EDC, and (z) offset against -78- Rental (other than Impositions and College Point Improvement Fund Payments) due under the Lease in an amount equal to any other monetary amount which EDC is obligated to pay under this Agreement and has not so paid, until such time as EDC recommences the disbursement of the Funding or pays such other monetary amount. The Times agrees that the right to an offset against Rental (other than Impositions) and against College Point Improvement Fund Payments as hereinabove described is The Times's sole remedy against EDC arising out of the failure of EDC to receive the Funding from the City and The Times shall not commence any action or proceeding against EDC as a result of such failure, except as otherwise provided in this Agreement. (c) In the event that (i) EDC has defaulted in the performance of any obligation on EDC's part to perform under this Agreement other than the disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of the Funding and continues to be in default thereof after the receipt of the EDC Default Notice and expiration of the thirty (30) day cure period provided therein, The Times shall have all of its rights at law and in equity against EDC. (d) Except as otherwise provided in this Agreement; (i) no course of dealing on the part of The Times or any failure on the part of The Times to exercise any right shall operate as a waiver of such right or otherwise prejudice The Times's remedies, (ii) no right or remedy conferred upon or reserved to The Times is intended to be exclusive of any other right or remedy, (iii) every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or -79- existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as The Times may deem appropriate, and (iv) the exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of The Times in exercising any right or remedy occurring upon EDC's failure to disburse the Funding in accordance with this Agreement or to otherwise perform its obligations in accordance with the terms of this Agreement shall impair any such right or remedy or constitute a waiver of or acquiescence in any such failure. Sec.9.6 Amendments. This Agreement may not be amended, waived or ----------- terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the amendment, waiver or termination is sought. Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be ----------------------- binding upon and shall inure to the benefit of EDC and The Times and their respective successors and permitted assigns. Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1 -------------------- hereof, The Times acknowledges that the City capital budget dollars which form the Funding are not and shall not be deemed to be an assignment of any funds received by EDC from the City. The Times confirms that its rights to the Funding arise exclusively under this Agreement. -80- Sec.9.9 Counterparts. This Agreement may be executed in one or more ------------- counterparts which, when taken together, shall constitute one and the same document. Sec.9.10 Interpretation. The provisions of the Lease incorporated by --------------- reference into this Agreement are intended to supplement the other provisions of this Agreement. In the event of any conflict between the Lease provisions and the other provisions of this Agreement, the provisions of the Lease shall control. Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their ---------- respective departments, offices, officers, members, directors, employees and agents shall collectively be referred to as "the Public Parties". The Times shall defend, indemnify and hold harmless the Public Parties, from and against any and all claims, damages (including consequential damages awarded to third parties against the Public Parties), judgments, liabilities and causes of action whatsoever to which they may be subject arising out of the acts or omissions of The Times, its Contractors, subcontractors, agents, employees or material suppliers, and any and all Persons, in connection with the performance of the Work, or because of any negligence, fault or default of The Times, its agents, employees, material suppliers or subcontractors. The obligation of The Times to indemnify and hold harmless the Public Parties shall include but not be limited to the payment of any and all costs and reasonable legal fees as may be actually incurred by the Public Parties. Nothing contained herein is intended to create an obligation on The Times to defend, indemnify and hold -81- harmless the Public Parties against those claims, damages, judgments, liabilities and causes of action described in Sec.1.1(c)(5) hereof for which it is determined that EDC or the City or their respective employees, agents or consultants are responsible for. The termination of this Agreement shall not release The Times from any liability to the Public Parties arising out of any act or omission of The Times in connection with this Agreement. (b) EDC shall indemnify and hold harmless The Times Indemnitees from and against any and all claims, damages (including consequential damages awarded to third parties against The Times Indemnitees), judgments, liabilities and causes of action whatsoever to which they may be subject to the extent caused as a result of the negligence or misconduct of EDC or its agents or professional consultants arising out of or in connection with EDC's or its agents' or professional consultants' inspections of the Construction Site or uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC to indemnify and hold harmless The Times Indemnitees pursuant to this Sec.9.11(b) shall include, but not be limited to, the payment of any and all costs and reasonable legal fees as may be actually incurred by The Times Indemnitees in connection with any such claim, damage, judgment, liability or causes of action. The termination of this Agreement shall not release EDC from any liability to The Times Indemnitees described in this Sec.9.11(b). -82- Sec.9.12 No Agency. Neither The Times nor any of its employees, ----------- Contractors or subcontractors is, shall be or shall represent that he, she or it is an agent, servant or employee of EDC or the City by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or authorization given by the EDC or the City or any of their officers, agents or employees. The Times shall be solely responsible for the work, direction, compensation and personal conduct of its officers, agents, employees and subcontractors. Sec.9.13 Venue ----- (a) Any and all claims asserted by or against EDC or by or against The Times arising under this Agreement or related hereto shall be heard and determined either in the courts of the United States ("Federal Courts") located in the City or in the courts of the State of New York ("New York State Courts") located in the City of New York. To effect this agreement and intent, EDC and The Times agree and, where appropriate, shall require each Contractor to agree, as follows: (i) If either Party initiates any action against the other Party in Federal Court or in New York State Court, service of process may be made on The Times either in person, or by registered or certified mail (return receipt requested) addressed to the office of the General Counsel of The Times at the address set forth in Article Eight of this Agreement, or to such other address as The Times may provide to EDC in writing, and service of process may be made on EDC, either in person or by registered or certified -83- mail (return receipt requested) addressed to EDC at its address as set forth in Article Eight of this Agreement, or to such other address as EDC may provide to The Times in writing. (ii) With respect to any action between EDC and The Times in New York State Court, each Party hereby expressly waives and relinquishes any rights it might otherwise have (A) to move to dismiss on grounds of forum non conveniens, (B) to remove to ----- --- ----------- Federal Court wholly outside New York City, and (C) to move for a change of venue to New York State Court outside New York City. (iii) With respect to any action between EDC and The Times in Federal Court located in New York City, each Party expressly waives and relinquishes any right it might otherwise have to move to transfer the action to a Federal Court outside the City of New York. (iv) If either Party commences any action against the other Party in a court located other than in the City and State of New York, then, upon request of the Party against whom the action is brought, the Party bringing the action shall either consent to a transfer of the action to a court of competent jurisdiction located in the City and State of New York or, if the court where the action is initially brought will not or cannot transfer the action, then to dismiss such action without prejudice, and may thereafter reinstitute the action in a court of competent jurisdiction in New York City. -84- Sec.9.14. Investigations; Cooperation. ---------------------------- (a) Definitions. As used in this Sec.9.14: (i) "Investigation" shall mean any investigation, audit or inquiry conducted by the Department of Investigation with respect to the obtaining and/or performance of the Transaction Documents or any of them, (ii) "Department of Investigation" shall mean the Department of Investigation of the City or any City department or agency succeeding to the functions thereof, (iii) "Commissioner" shall mean the Commissioner or Acting Commissioner of the Department of Investigation, (iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and Economic Development of the City (or the officer of the City succeeding to the functions of that office), (v) "Entity" shall mean any firm, partnership, corporation, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with EDC or the City, (vi) "Member" shall mean any Person associated with another Person or entity as a partner, director, officer, principal or employee, and (vi) "Transaction Documents" shall mean the Lease, this Agreement, Funding Agreement #1, Funding Agreement #3 and Funding Agreement #4. (b) Cooperation with Investigations. Subject to the exclusions set --------------------------------- forth in -85- paragraph (c) of this Sec.9.14, The Times shall during the term of this Agreement: (i) cooperate fully and faithfully, and utilize good faith efforts to cause its Members to cooperate fully and faithfully, with any Investigation; and (ii) report, and utilize its good faith efforts to cause its Members to report, in writing to the Commissioner, any solicitation of which The Times has actual knowledge of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or any other Person, for any purpose relating to the procurement or obtaining and/or performance of any Transaction Document by The Times. (c) Exclusions. The provisions of Sec.9.14(b) above shall not apply: ----------- (i) to any information or document known, prepared or obtained by The Times or its Members (and the sources of such information or documents), that is protected from compelled disclosure by any present or future "Shield Law" or any other statute, constitutional provision, rule, regulation or case law related to the rights of reporters and/or news organizations; (ii) to any Person who refuses to testify based on his or her privilege against self-incrimination after having been given assurances that his or her statement, and any information from such statement, will not be used against such Person in any subsequent criminal proceeding in any -86- forum (provided, however, that any Person given such assurances shall have the right to have the legal sufficiency of such assurances adjudicated by a court of competent jurisdiction as a precondition of the applicability of Sec.9.14(b) to such Person); and (iii) to any construction contract or other agreement (or the obtaining or performance thereof) with parties other than the City or EDC, including without limitation, any contract or agreement being funded through any Transaction Document. (d) Hearing. If The Times or any Member of The Times refuses to -------- testify in an Investigation and, in connection with such failure to testify, the Commissioner determines that The Times has failed to cooperate in the Investigation in violation of the provisions of Sec.9.14(b) hereof, then the Commissioner may request the Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5) days written notice to The Times, to determine if any penalties should be imposed for The Times's failure to so cooperate in accordance with this Sec.9.14. (e) Adjournments of Hearing ----------------------- (i) The Times shall have the right to require that the Hearing be adjourned for a period of not more than thirty (30) days. (ii) The Deputy Mayor may grant other adjournments of the Hearing, in the exercise of his or her reasonable discretion; provided however, that in the case of an adjournment occasioned by The Times's failure to -87- appear, the Deputy Mayor may, if he or she determines that there was no reasonable cause for the requested adjournment or failure to appear, impose an Interim Penalty. (iii) The City shall not incur any penalty or damages for delay or otherwise occasioned by an adjournment of the Hearing. (f) Penalties. ---------- (i) The Deputy Mayor may impose a penalty during an adjournment due to The Times's failure to appear or proceed with the scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim Penalty") of not more than $1,000 per day for each day of such adjournment, provided, however, that such daily penalties shall cease to accrue from and after the date that The Times makes itself available to appear at or proceed with the scheduled Hearing or gives written notice to the Deputy Mayor that it does not intend to appear at or proceed with the scheduled Hearing, in which event the Deputy Mayor shall have the right to continue the Hearing and reach a determination without The Times's participation. (ii) If, after the Hearing, the Deputy Mayor determines that The Times failed to cooperate in the Investigation in violation of this Sec.9.14, and The Times fails to commence to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of -88- such determination, the Deputy Mayor may: (A) impose a penalty ("Final Penalty") which may not, in conjunction with any Interim Penalty or Final Penalty imposed during the term of this Agreement under this Agreement and/or during the term of the Lease with respect to any other Transaction Document, exceed $500,000 in the aggregate during the term of the Lease; and/or (B) disqualify The Times, for a period not to exceed five (5) years, from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license with or from EDC or the City, other than as contemplated in the Transaction Documents. Notwithstanding anything to the contrary contained herein, in the event that The Times is found after the Hearing to have failed to cooperate in the Investigation, but nonetheless is not subjected to a Final Penalty because The Times commences to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, The Times shall be liable for the cost of conducting such Hearing in an amount not to exceed $5,000. (g) Criteria for Determination. The Deputy Mayor shall consider and ---------------------------- address in reaching his or her determination and in assessing an appropriate Interim Penalty, Final Penalty, and/or disqualification, the factors in clauses (i) and (ii) of this Sec.9.14(g). He or she -89- may also consider, if relevant and appropriate, the criteria established in clauses (iii) and (iv) of this Sec.9.14(g), in addition to any other information which may be relevant and appropriate: (i) The Times's good faith endeavors or lack thereof to cooperate fully and faithfully with the Investigation, including but not limited to the discipline, discharge or disassociation of any Person failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other Members, agents, assignees or fiduciaries whose testimony is sought (the Deputy Mayor shall take into account whether the discipline, discharge or disassociation of any Persons failing to testify would violate any union or other contract), (ii) the relationship of the Person who refused to testify to The Times, including, but not limited to, whether the Person whose testimony is sought has an ownership interest in The Times and/or the degree of authority and responsibility the Person has within The Times, (iii) The nexus of the testimony sought to The Times and the Transaction Documents, and/or (iv) the effect a penalty may have on an unaffiliated and unrelated party or Entity that has a significant interest in The Times, provided that (x) such unrelated party or Entity has given actual notice to the Commissioner or EDC upon the acquisition of the interest, or (y) at the Hearing such unrelated party -90- or Entity gives notice and proves that such significant interest was previously acquired; under either circumstance, such unrelated party or Entity must present evidence at the Hearing demonstrating the potential adverse impact a penalty will have on such party or Entity. (h) Payment of Penalties. Any Interim or Final Penalty hereunder ---------------------- shall, upon imposition thereof, be applied to reduce the aggregate of Offset Amounts (as such term is defined in the Lease) then available to The times under Article 4 of the Lease and the balance, if any, shall be paid promptly as additional Rental, or at the landlord under the Lease's option, such balance shall be applied to reduce EDC's obligations with respect to any undisbursed Funding. (i) Exclusive Remedy. Notwithstanding anything to the contrary ------------------ contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall be the sole and exclusive remedies available to EDC in the event that The Times breaches any of its obligations under this Sec.9.14, and no other remedies, including, without limitation, the remedies set forth elsewhere in this Agreement for defaults by The Times in the performance of its obligations under this Agreement, shall be applicable to a breach by The Times of any of its obligations under this Sec.9.14. (j) Right to Dispute Determinations of Deputy Mayor. Nothing ------------------------------------------------------- contained herein shall be construed to limit in any manner whatsoever The Times's right or ability to challenge or seek to enjoin, overturn, set aside or modify any action taken, determination made or penalty imposed by the Deputy Mayor pursuant to the provisions of this Sec.9.14. -91- (k) Concurrent Lease Obligation. The obligations of The Times under ----------------------------- this Sec.9.14 constitute a portion of the obligations of The Times under Article 40A of the Lease, and nothing contained herein shall be construed as expanding, enlarging or increasing in any way, or as being separate from or in addition to, the obligations and liabilities of The Times pursuant to Article 40A of the Lease. Sec.9.15. Intentionally Omitted. Sec.9.16 Maximum Interest Rate --------------------- In the event that any interest payable under this Agreement shall be deemed to exceed the maximum rate permitted by law, then the amount of interest to be paid shall be the maximum rate so permitted. Sec.9.17 Captions -------- The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. Sec.9.18 Gender, Etc. ------------ The gender used in this Agreement shall be deemed to refer to the masculine, feminine, or neuter gender, as the context or the identity of the persons being referred to -92- may require. The singular shall include the plural and vice versa as the context may dictate. Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without ------------------ the prior written consent of The Times, except that EDC shall have the right, upon ten (10) Business Days prior written notice, to assign this Agreement and/or EDC's rights under this Agreement, without any further consent on the part of The Times, to the City. Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees ----------------------------------- that all non-monetary obligations set forth in this Agreement as being obligations of The Times shall apply only to, and be performed by, The New York Times Newspaper Division of The New York Times Company (the "Newspaper Division") and its employees and agents, and EDC shall look solely to the Newspaper Division for the performance of such non-monetary obligations; provided, however, that any default by the Newspaper Division in the performance of such non-monetary obligations shall be treated with the same force and effect pursuant to the applicable provisions of this Agreement as if such default had been committed by The Times. -93- ARTICLE TEN - AGREEMENT OF THE CITY ----------------------------------- Sec.10.1 City's Agreement to Fund EDC. The City, by executing this -------------------------------- Agreement as it effects this Article Ten only, (i) acknowledges that it is becoming a signatory to this Agreement as a material inducement to The Times to enter into this Agreement, (ii) warrants and represents that the Consolidated Contract is in full force and effect and legally binding upon the City; and (iii) covenants and agrees to provide EDC with City capital budget funds in such amounts and at such times as will permit EDC to comply with its obligations to disburse the Funding pursuant to the provisions of this Agreement, without regard to whether the Consolidated Contract is then in full force and effect or whether EDC is in compliance with the terms thereof. Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation ---------------------------- Counsel (addressed to The Times) providing that this Agreement is legal, valid and binding upon the City with respect to the provisions of this Article Ten in the form attached hereto as Appendix K, is being delivered to The Times concurrently herewith. Sec.10.3 The Times's Rights Against the City. In the event that the City ------------------------------------- has defaulted in the performance of any obligation of the City pursuant to this Article Ten and continues to be in default thereof after notice from The Times and a thirty (30) day period to cure, The Times shall have all of its rights at law and in equity against the City. -94- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: /s/ Carl Weisbrod ------------------------------------- Title: President THE NEW YORK TIMES COMPANY By: /s/ Katharine P. Darrow -------------------------------------- Title: Senior Vice President THE CITY, BY SIGNING IN THE PLACE PROVIDED BELOW, AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLE TEN HEREOF: THE CITY OF NEW YORK By: /s/ Barry F. Sullivan -------------------------- APPROVED AS TO FORM: By: /s/ --------------------------- Acting Corporation Counsel -95- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Carl Weisbard, to me known, who, being by me duly sworn, did depose and say that he resides at c/o 110 William St., NY, NY; that he is the Pres. of New York City Economic Development Corporation, the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by authority of the board of directors of such corporation. /s/ Concetta Miele ---------------------------- Notary Public STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Katharine P. Darrow, to me known, who, being by me duly sworn, did depose and say that s/he resides at 16 Garden Place Brooklyn, NY; that s/he is the Senior V.P. of The New York Times Company, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation on behalf of such corporation. /s/ Beverly Sturr ------------------------- Notary Public -96- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993, before me personally came Barry Sullivan, to me known, who, being by me duly sworn, did depose and say that he resides at c/o City Hall, NY, NY; that s/he is the Deputy Mayor of The City of New York, the same person who executed the foregoing instrument; and that he acknowledged that he signed his name thereto on behalf of The City of New York and pursuant to the authority vsted in him. /s/ CONCETTA MIELE ------------------------ Notary Public -97- EX-10.11 9 FUNDING AGREEMENT #3 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION and THE NEW YORK TIMES COMPANY Dated as of December 15, 1993 Relative to the construction of an interim New York City Police Department vehicle pound at the South Brooklyn Marine Terminal in the Borough of Brooklyn or another site in the City of New York selected by EDC TABLE OF CONTENTS Page PREAMBLE 1 DEFINITIONS 4 ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT - ----------- AND CONTRACT REQUIREMENTS Sec.1.1 General Provisions and Provisions Regarding Design and Construction 16 Sec.1.2 Procurement of Bids, Services and Goods 24 Sec.1.3 Liaison to EDC 33 ARTICLE TWO THE FUNDING - ----------- Sec.2.1 Agreement to Fund 34 Sec.2.2 Disbursements 34 Sec.2.3 Funding of Costs of Changes 37 ARTICLE THREE THE TERM - ------------- Sec.3.1 Term 42 ARTICLE FOUR CONDITIONS FOR DISBURSEMENT - ------------ Sec.4.1 Initial Submissions by The Times 44 Sec.4.2 Documentation for Disbursements on Account of Eligible Costs 45 Sec.4.3 Direction of Submissions 48 ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND - ------------ GUARANTIES OF THE TIMES Sec.5.1 Organization; Standing 49 Sec.5.2 Intentionally Omitted 49 -i- Page Sec.5.3 Conflict, etc. under Other Documents 49 Sec.5.4 No Litigation 50 Sec.5.5 Intentionally Omitted 50 Sec.5.6 Intentionally Omitted 50 Sec.5.7 Quality of Work; Guaranties and Warranties 50 ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC - -------------- Sec.5A.1 Organization; Standing 52 Sec.5A.2 Due Authorization; Enforceable Obligations 52 ARTICLE SIX COVENANTS - ----------- Sec.6.1 Requisitions Update The Time's Representations 53 Sec.6.2 Compliance with Other Agreements and Law; Legal Status 53 Sec.6.3 Maintenance of and Compliance with Insurance Requirements 53 Sec.6.4 Maintenance of Office 54 Sec.6.5 Compliance with Applicable Law 54 Sec.6.6 Assignment 55 Sec.6.7 Maintenance of Records 56 Sec.6.8 Intentionally Omitted 56 Sec.6.9 Due Application of Funding Proceeds 56 Sec.6.10 Defects; Non-Conforming Work 57 Sec.6.11 Participation by Women and Minority Owned Businesses 57 Sec.6.12 No Liens 60 Sec.6.13 Intentionally Omitted 60 Sec.6.14 Intentionally Omitted 60 Sec.6.15 Intentionally Omitted 60 Sec.6.16 MacBride Principles 60 Sec.6.17 No Waiver of Compliance 61 -ii- Page ARTICLE SEVEN DEFAULT AND TERMINATION - ------------- Sec.7.1 Events of Default 62 Sec.7.2 Default Remedies; Exculpation 63 Sec.7.3 Termination 66 Sec.7.4 Right to Reinstate Agreement 67 ARTICLE EIGHT NOTICES - ------------- Sec.8.1 Notice 69 Sec.8.2 Disbursement Submissions 70 ARTICLE NINE GENERAL CONDITIONS AND COVENANTS - ------------ Sec.9.1 Conflict of Interests 71 Sec.9.2 No Liability of Individuals 72 Sec.9.3 Anti-Boycott Provisions 72 Sec.9.4 Governing Law 73 Sec.9.5 Liability of EDC 73 Sec.9.6 Amendments 75 Sec.9.7 Successors and Assigns 75 Sec.9.8 Assignment of Funds 75 Sec.9.9 Counterparts 76 Sec.9.10 Interpretation 76 Sec.9.11 Indemnity 76 Sec.9.12 No Agency 77 Sec.9.13 Venue 78 Sec.9.14 Investigations; Cooperation 79 Sec.9.15 Intentionally Omitted 87 Sec.9.16 Maximum Interest Rate 87 Sec.9.17 Captions 87 Sec.9.18 Gender, Etc. 87 Sec.9.19 Assignment by EDC 87 Sec.9.20 Obligations of Newspaper Division 88 -iii- Page ARTICLE TEN AGREEMENT OF THE CITY - ----------- Sec.10.1 City's Agreement to Fund EDC 89 Sec.10.2 Valid Agreement of the City 89 Sec.10.3 The Times's Rights Against the City 89 Appendix A - Premises Appendix B - Proposed Site for Interim Car Pound at South Brooklyn Marine Terminal Appendix C - Insurance Requirements Appendix D - The Times's Certificate of Good Standing Appendix E - EDC's Legal Opinion Appendix F - EDC's Secretary's Certificate Appendix G - Equal Employment Requirements Appendix H - Employment Report Appendix I - Intentionally Omitted Appendix J - MacBride Principles Rider Appendix K - Corporation Counsel's Legal Opinion Exhibit A - Intentionally Omitted Exhibit B - Form List of Contractors Exhibit C - Investigation Forms Exhibit D - Change Order Form Exhibit E - Form Legal Opinion Exhibit F - Form Certificate of Specimen Signature Exhibit G - AIA Forms Exhibit H - W\MBE Plan Exhibit H-1 - Form Expedited Certification Affidavit Exhibit I - Form Certification to be Attached to Requisition -iv- FUNDING AGREEMENT #3 dated as of December 15, 1993 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having its principal office at 110 William Street, New York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York State corporation, having its principal office at 229 West 43rd Street, New York, New York 10036. PREAMBLE: WITNESSETH ---------- WHEREAS: A: The City of New York (the "City"), a municipal corporation of the State of New York, is the owner in fee of certain real property identified, as of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street, on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned new tentative tax block and lot numbers Block 4282, Lot 100 for future identification, as such property is more particularly described in Appendix A attached hereto and made a part hereof (the "Premises); and -1- B: The City, as landlord, and EDC, as tenant, entered into a lease dated as of the date hereof, which lease was assigned by EDC to The Times pursuant to an Assignment and Assumption of Lease with Consent dated as of the date hereof (the lease as so assigned, and as the same may hereafter be amended, is hereinafter referred to as the "Lease"), demising the Premises for the Project (as hereinafter defined), and for which Lease EDC will act as the City's managing agent pursuant to Article 42 of the Lease; and C: In connection with the Lease, The Times has the option to construct on behalf of the City a New York City Police Department vehicle pound designed by EDC (the "Interim Car Pound"), to be located on a portion of the South Brooklyn Marine Terminal in the Borough of Brooklyn more particularly depicted in Appendix B attached hereto, or such other site in the City of New York as may be identified by EDC pursuant to Article 12 of the Lease (any such site, the "Construction Site"), to temporarily replace the existing New York City Police Department vehicle pound located on the Premises until a permanent relocation vehicle pound can be constructed by the City (the Interim Car Pound, is sometimes hereinafter referred to as the "Improvements"); and D: The construction of the Improvements is a necessary prerequisite element to the Project without which The Times has determined it could not proceed with the construction of the Project; and E: If The Times elects to construct the Improvements in accordance with its option, EDC and the City will make available to The Times funds sufficient to fully reimburse The Times for its construction of the Improvements and the performance of the -2- Work (as hereinafter defined); and F: The City and EDC have entered into an Amended and Restated Contract dated as of June 30, 1993, as amended (the "Consolidated Contract") pursuant to which the City will provide EDC with the necessary funds, which is currently estimated by EDC to be approximately $550,000, for use in connection with the construction of the Improvements and pursuant to which EDC is authorized to contract with The Times to perform the Work; and G: The Times, independently, and not as agent of the City or EDC, has agreed that if it exercises its option to construct the Improvements it will perform, or cause the performance of, the Work in consideration of the payments to it by EDC of funds in an amount necessary to fully reimburse The Times for the Eligible Costs (as hereinafter defined) incurred in connection with the construction of the Improvements (the "Funding") pursuant to this Agreement; H: In furtherance of its obligations under the Consolidated Contract and its corporate purpose of fostering economic development in the City, EDC has agreed to disburse the Funding to The Times for the purpose of financing the Eligible Costs of the Work. NOW, THEREFORE, EDC and The Times covenant and agree as follows: -3- DEFINITIONS ----------- As used in this Funding Agreement, the following initially capitalized terms shall have the respective meanings indicated opposite each of them: "Affiliate" Any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, The Times. For purposes hereof, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of The Times through the ownership of voting securities, by contract, or otherwise. Ownership of or by The Times includes beneficial ownership effected by ownership of intermediate entities. An "Affiliate" of a Person other than The Times shall be determined using the same standard of control and ownership set forth herein with respect to The Times. Unless the context otherwise requires, any reference to an "Affiliate" in this Agreement shall be deemed to refer to an Affiliate of The Times. "Agreement" This Funding Agreement and any amendments thereto. "Approvals" Contractor's Approvals (as hereinafter defined) and Owner's Approvals (as hereinafter defined), collectively. "Business Day" Any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions in New York City are authorized by law or executive order to close. "Car Pound Removal Date" As defined in Sec.1.1(b)(1). "Car Pound Self Help Notice" As defined in Sec.1.1(b)(1). "City" As defined in Recital A of the Preamble. -4- "College Point Improvement Fund Payments" As defined in Section 3.09(b)(iii) of the Lease. "Commissioner" As defined in Sec.9.14(a). "Completed Cover Sheet" As defined in Sec.4.1. "Consolidated Contract" As defined in Recital F of the Preamble. "Construction Contract" (A) Any agreement executed by The Times and the Resident Engineer (as hereinafter defined), if any, with respect to construction management and supervision services and engineering services, or (B) any contract between The Times and the General Contractor (as hereinafter defined), if any, under which the General Contractor is obligated to perform the Construction Work; or (C) any contract with a contractor for performance of all or any part of the Construction Work, whether entered into by The Times, the General Contractor, the Resident Engineer or the Construction Manager (as hereinafter defined). "Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction manager selected by The Times, reasonably approved by EDC, responsible solely for the performance of construction management services and/or construction contract administration services and supervision services relative to the Construction Work. "CM Costs" The costs paid or payable by The Times to the Construction Manager for the performance of construction management and supervision services relative to the Work, as more particularly set forth in the proviso to the last sentence of the definition of Eligible Costs. "Construction Site" As defined in Recital C of the Preamble. "Construction Work" The portion of the Work the costs of which are considered hard costs of construction under normal industry standards, excluding -5- the services of the Resident Engineer and the services of the Construction Manager, if any. "Contractor" Any contractor under a Construction Contract. "Contractor's Approvals"As defined in Sec.1.1(c)(3). "DBS" As defined in Sec.6.11(b). "Department of Investigation" As defined in Sec.9.14(a). "Deputy Mayor" As defined in Sec.9.14(a). "DLS" The Division of Labor Services of the City's Department of Business Services, or its successor in function. "EDC" As defined in the first paragraph of this Agreement. "EDC Default Notice" As defined in Sec.9.5(b). "Eligible Costs" (i) The costs of the Work paid or payable by The Times to Contractors (other than the Resident Engineer), subcontractors, suppliers and material persons for (A) labor and materials utilized in connection with the Work, and (B) for labor, services, facilities or equipment customarily considered as "general conditions" items which are reasonably required by or consequent upon the Construction Work, including (x) all costs of contract bonds and of insurance that may be required or necessary during the period of and for performance of the Work, (y) all costs of obtaining and maintaining the guaranties required by this Agreement and/or the Final Plans and Specifications (as hereinafter defined), and (z) all costs of obtaining and maintaining the security services required by Sec.1.1(e)(ii) of this Agreement that are obtained by Contractors and subcontractors (other than the Resident Engineer) and are included in their respective contract prices together with those costs described in (i)(A) above, and (ii) the costs paid or payable by The Times to the Resident Engineer for the performance of construction management and supervision services and/or engineering services, (x) in an amount not to exceed ten percent (10%) of the Hard Costs (as hereinafter -6- defined) with respect to all "general conditions" items and other reimbursable expenses, and (y) in an amount not to exceed three percent (3%) of the Hard Costs with respect to the Resident Engineer's fee. In no event shall Eligible Costs include the costs or fees paid or payable by The Times to the Construction Manager; provided, however that if The Times elects to engage a Construction Manager instead of a Resident Engineer (and not in addition to a Resident Engineer), then Eligible Costs shall include the costs paid or payable by The Times to the Construction Manager for the performance of construction management and supervision services, (x) in an amount not to exceed ten percent (10%) of the Hard Costs (as hereinafter defined) with respect to all "general conditions" items and other reimbursable expenses, and (y) in an amount not to exceed three percent (3%) of the Hard Costs with respect to the Construction Manager's fee. "Engineer's Estimate" An engineer's estimate or estimates, prepared by EDC or its professional consultants with respect to the construction of the Improvements, of all Eligible Costs expected to be incurred in connection with such construction and a projection of the amounts that EDC expects The Times to requisition over the term of this Agreement in connection with the Improvements. The Engineer's Estimate may be amended from time to time to reflect inflation, change order work or other changes to the Final Plans and Specifications. The Engineer's Estimate shall not be construed to limit in any way the amounts to be paid to The Times in full reimbursement of the cost to perform the Work pursuant to the provisions of this Agreement. "Entity" As defined in Sec.9.14(a). "Events of Default" Those events set forth in Sec.7.1. "Federal Courts" As defined in Sec.9.13. "Final Acceptance Date" Means the date on which all of the following shall have occurred: (i) the Resident Engineer or the Construction Manager shall have certified to EDC that the Work (including all Substantial Completion Punch List (as hereinafter defined) items) is complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, and the -7- Requirements, and (ii) EDC and/or its professional consultants shall have inspected the Construction Site, within thirty (30) days after EDC's receipt from the Resident Engineer or the Construction Manager of the certification described in clause (i) above, and certified, by the later to occur of the expiration of such thirty (30) day period or five (5) days after such inspection was completed, to The Times that, in its opinion, the Improvements are complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, which certification shall not be unreasonably withheld; provided however, that if EDC and/or its professional consultants shall have failed to inspect the Construction Site within the thirty (30) day period described above and to give the certification within the time period described above, EDC shall be deemed to have inspected the Construction Site and certified to The Times that the Improvements are complete. "Final Completion" Means that each of the following shall have occurred: (A) the Resident Engineer or the Construction Manager shall have issued to EDC a "Certificate of Payment", or certified its approval of a "Certificate of Payment" issued to EDC, in either case stating that it has examined the Final Plans and Specifications and, in its best professional judgment, after diligent inquiry, and on the basis of its observations and inspections, the Construction Work has been completed (except to an immaterial extent) in accordance with the Final Plans and Specifications and all Requirements and that the final payment is due to The Times; (B) the Reviewing Parties (i) shall have made a final inspection of the Construction Site upon receipt of notice from The Times that the Work is Substantially Completed (as hereinafter defined) and (ii) shall have certified the Work, including all items on the Final Punch List, as being acceptable and complete; (C) The Times shall have submitted to EDC a final accounting, containing an affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which The Times may in -8- any way be responsible (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), either have been paid or otherwise satisfied or will be paid simultaneously with or immediately after the receipt of the proceeds of any disbursement of the Funding for which Final Completion is required; (D) The Times shall have submitted to EDC receipts, releases and waivers of liens, or such other documentation establishing payment or satisfaction of all obligations arising out of the Work (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), to the extent and in such form as may be reasonably designated by EDC. If any lien for any work done by or on behalf of The Times has attached to the funds forming a part of the Funding, The Times shall have either removed or bonded such lien; (E) The Times shall have delivered to EDC two sets of the "as-built" drawings for the Improvements, as the same may have been amended, modified or supplemented, and such other documentation as may be required by the Reviewing Parties or as may be necessary to evidence that the Work was completed in accordance with the Requirements. These drawings shall accurately show any deviations from the Final Plans and Specifications and the exact locations of any underground or otherwise concealed utilities and appurtenances as referenced to permanent surface improvements; and (F) receipt by EDC of notification from DLS that all labor requirements applicable to the Work have been fulfilled. "Final Penalty" As defined in Sec.9.14(f)(ii). "Final Plans and Specifications" The completed final drawings and plans and specifications for the construction of the Interim Car Pound, as developed by EDC and delivered by EDC to The Times in accordance with -9- Sec.1.1(c)(2) hereof, and as such drawings and plans and specifications may be modified or amended from time to time in accordance with Sec.1.1(c) or Sec.2.3 of this Agreement. "Final Punch List" A statement by the Resident Engineer or the Construction Manager issued after Substantial Completion, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any observable defects and deficiencies, and any other defects or deficiencies of which the Resident Engineer or the Construction Manager has knowledge or of which the Reviewing Parties shall have observed and notified The Times or its Contractors, with respect to the Improvements or at or on the Construction Site including, but not limited to, deficiencies due to non-compliance with the Requirements. "Funding" As defined in Recital G of the Preamble. "Funding Agreement #1" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for certain site preparation and foundation work required in connection with the construction of the Project, as such agreement may be amended from time to time. "Funding Agreement #2" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for the construction of a City sanitary sewer system to service the Premises, as such agreement may be amended from time to time. "Funding Agreement #4" The Funding Agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for certain reconstruction of the Whitestone Expressway Service Road from 20th Avenue to Linden Place, a City street running adjacent to the Premises, as such agreement may be amended from time to time. "General Contractor" The Times's general contractor, if any, reasonably approved by -10- EDC, engaged to perform and manage the Construction Work. "Governmental Authorities" The United States of America, the State of New York, the City and any agency, department, legislative body, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having legal jurisdiction over the Improvements or the Construction Site or any portion thereof or any street, road, avenue, sidewalk or water comprising a part of or immediately adjacent to the Construction Site. "Hard Costs" The aggregate of the costs set forth in clauses (i)(A) and (i)(B) of the definition of Eligible Costs. "Impositions" As defined in Section 3.09(b)(i) of the Lease. "Improvements" As defined in Recital C of the Preamble. "Initial Termination" As defined in Sec.7.4. "Interim Car Pound" As defined in Recital C of the Preamble. "Interim Penalty" As defined in Sec.9.14(f)(i). "Investigation" As defined in Sec.9.14(a). "Investigation Forms" As defined in Sec.1.2(c). "Late Charge Rate" The Prime Rate (as hereinafter defined) plus one percent (1%). "Lease" As defined in Recital B of the Preamble. "Lease Execution Date" As defined in Article 1 of the Lease. "Material Change" A change to the Final Plans and Specifications which either (i) individually or in the aggregate with all other changes increases the cost of the Construction Work by $125,000 or more, (ii) materially changes the quality or nature of the Construction Work, type of materials, workmanship or construction means, methods or techniques, or materially affects the layout or design of the Improvements, or (iii) is of such a nature that, in order -11- to perform the work associated with such change, The Times will be required to obtain additional permits or approval. "Members" As defined in Sec.9.14(a). "MBEs" As defined in Sec.6.11(a). "New York State Courts" As defined in Sec.9.13. "Newspaper Division" As defined in Sec.9.20. "Owner's Approvals" As defined in Sec.1.1(c)(2). "Owner's Representative" Any Person selected by The Times, reasonably approved by EDC, to act as The Times's representative at the Construction Site and responsible for supervision of the Work performed by the General Contractor and the other Contractors, subcontractors and material suppliers. "Parties" EDC and The Times. "Person" An individual, corporation, partnership, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing. "Premises" As defined in Recital A of the Preamble. "Prime Rate" The base or prime rate of interest from time to time charged by Chemical Bank, as such rate is published by The New York Times newspaper or by ------------------ The Wall Street Journal if such rate is not ------------------------ published by The New York Times at the time in ------------------- question. "Project" The construction on the Premises of a facility of no less than approximately 360,000 square feet for the printing, production and distribution of newspapers and, at the sole discretion of The Times, other such buildings and improvements on the Premises as are permitted pursuant to the terms and provisions of the Lease, including without limiting the generality of the foregoing, the expansion of the printing facility to a size greater than 360,000 square feet. -12- "Prohibited Person" As defined in Sec.1.1(b)(4). "Proposed Bidders List" As defined in Sec.1.2(b)(1). "Public Parties" As defined in Sec.9.11(a). "Rental" As defined in Article 1 of the Lease. "Requirements" Any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders, resolutions and requirements of all Governmental Authorities currently in force or hereafter adopted applicable to the Construction Site and/or the Work. "Requisition" As defined in Sec.4.2(a)(ii). "Resident Engineer" The professional consultant engaged by EDC to prepare the Final Plans and Specifications (identified by EDC in its notice to The Times described in Sec.1.2(b)(4) hereof), or any other professional engineer, engineering firm, architectural firm with engineering expertise, combined practice or association licensed in the State of New York selected by The Times, reasonably approved by EDC as to the acceptability of such Resident Engineer and as to the scope of work proposed to be performed by such Resident Engineer, to act as resident engineer on behalf of The Times and to perform engineering services and/or construction contract administration and supervision services relative to the Work. The Resident Engineer, if any, shall act on behalf of The Times and shall be separate and apart from any engineer acting on behalf of EDC or the City for any reason, including, without limitation, the preparation of the Engineer's Estimate. "Resident Engineer Costs" The costs paid or payable by The Times to the Resident Engineer for the performance of construction management and supervision services and engineering services relative to the Work, as set forth in clause (ii) of the definition of Eligible Costs. "Retainage" As defined in Sec.2.2(a)(1). "Reviewing Parties" EDC, the City's Department of Business Services, or their respective designees, including without limitation, their hired -13- consultants, and any other Governmental Authority with jurisdiction over the Work, the Improvements or the Construction Site and responsible for (i) the issuing of permits or approvals with respect to the Improvements, or (ii) ensuring compliance with the Requirements. "Substantial Completion" or "Substantially Complete(d)" Means that the Work shall have been 95% completed in accordance with the Final Plans and Specifications and all Requirements, and the Reviewing Parties are able to inspect the Work and prepare a Final Punch List. "Substantial Completion Date" The date on which the Work shall have been Substantially Completed. "Substantial Completion Punch List" A statement by EDC, issued after inspection of the Construction Site, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any defects or deficiencies of which EDC shall have noted with respect to the Improvements, including but not limited to, defects or deficiencies due to non-compliance with the Requirements. "Term" As defined in Sec.3.1. "The Times" As defined in the first paragraph of this Agreement. "The Times Indemnitees" As defined in Sec.1.1(c)(5). "Transaction Documents" As defined in Sec.9.14(a). "Unavoidable Delays" Delays caused by (i) strikes, slowdowns, walkouts, lockouts or other labor troubles, (ii) acts of God, (iii) catastrophic weather conditions, (iv) inability to obtain labor or materials due to labor disputes, (v) court orders enjoining commencement or continuation of the Work, (vi) enemy action, (vii) civil commotion, (viii) shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency, (ix) failure or defect in the supply of -14- electricity, oil, gas or water to the Construction Site provided that such failure or defect is not due to the action or inaction of The Times or its Contractors or subcontractors (x) fire, (xi) casualty, (xii) the failure of EDC to disburse the Funding or any portion thereof in accordance with the provisions of this Agreement, (xiii) the failure of EDC to obtain the Owner's Approvals, (xiv) the failure of EDC to make changes to the Final Plans and Specifications in accordance with Sec.1.1(c)(4) hereof required by reason of the Requirements, changes to the Requirements, field conditions or other unexpected conditions arising during the course of the Construction Work that may affect the design of the Improvements, (xv) defects in the Final Plans and Specifications that cause the Plans and Specifications to be not in compliance with the Requirements or incorrect or inappropriate, (xvi) EDC's unreasonable delay in granting any approvals required under this Agreement, or (xvii) other causes not within The Times's control that is causing a delay in The Times's performance of its construction obligations hereunder. The Times shall use its good faith efforts to notify EDC in writing, stating when such delay commenced, not later than ten (10) Business Days after The Times has first received knowledge of the occurrence of any of the foregoing conditions; provided, however, that The Times's failure to notify EDC of the occurrence of an event constituting an Unavoidable Delay shall not affect the commencement of such delays or otherwise result in the loss of any benefit or right granted to The Times under this Agreement. "WBEs" As defined in Sec.6.11(a). "W/MBEs" As defined in Sec.6.11(a). "W/MBE Participation Dollar Value" As defined in Sec.6.11(c). "W/MBE Percentage" As defined in Sec.6.11(c). "W/MBE Plan" As defined in Sec.6.11(a). "Work" Work undertaken by or on behalf of The Times for the purpose of constructing the Improvements all in accordance with this Agreement and the Final Plans and Specifications. -15- ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND ---------------------------------------------------- CONTRACT REQUIREMENTS --------------------- Sec.1.1 General Provisions and Provisions Regarding Design and --------------------------------------------------------------- Construction. - ------------- (a) The Times's Option to Perform the Work. The Times shall, in its ---------------------------------------- sole discretion, have the right (but not the obligation), subject to such conditions set forth in paragraph (b) below and other such conditions and limitations as may be set forth in Article 12 of the Lease, to elect to construct, on behalf of the City, the Interim Car Pound. If The Times elects to construct the Interim Car Pound, The Times shall notify EDC of such election in accordance with the notice provisions set forth in Sec.1.1(b) hereof, and thereafter The Times shall perform the Work related to such construction, and EDC shall disburse to The Times the Funding or any portion thereof allocable to the Work being performed by The Times, on the terms and conditions contained in this Agreement. (b) Notice of Election to Proceed. (1) If The Times elects to exercise its right to construct the Interim Car Pound on behalf of the City in accordance with Sec.1.1(a) hereof, The Times shall make such election by giving written notice thereof (the "Car Pound Self Help Notice") to EDC pursuant to the applicable provisions of the Lease no earlier than the date (the "Car Pound Removal Date") determined in accordance with Section 12.01 of the Lease for the removal from the Premises of the existing New York City Police Department vehicle pound, but in no event later than the first anniversary of the Car Pound Removal Date; provided, however that, if The Times gives a Car Pound Self Help Notice within three -16- (3) months before or after the second anniversary of the Lease Execution Date and if EDC or the City certifies in good faith that completion of construction of a permanent relocation New York City Police Department vehicle pound and delivery of possession of the Premises to The Times will not require more than an additional ninety (90) days from the date of the Car Pound Self-Help Notice, The Times shall not have the right to construct the Interim Car Pound unless EDC shall have failed to remove, or caused to be removed, the Car Pound from the Premises and delivered possession of the Premises to The Times on or prior to the expiration of such ninety (90) day period. The Car Pound Self Help Notice shall specify (i) the approximate date on which The Times intends to commence construction of the Interim Car Pound (taking into consideration the limitation set forth in the foregoing sentence with respect to the commencement of such construction), (ii) the Resident Engineer, Construction Manager or Owner's Representative that The Times intends to select with respect to the construction of the Interim Car Pound, and (iii) the Person or Persons on The Times's staff selected by The Times to be responsible for communicating with EDC regarding the performance and completion of the Work in connection with the construction of the Interim Car Pound. (2) Intentionally omitted. (3) Notwithstanding the foregoing, if The Times notifies EDC in accordance with Sec.1.1(b) (1) above of its intention to construct the Interim Car Pound, The Times shall have the right to revoke such election by written notice to EDC at any time thereafter provided that the Times did not commence, or cause to be commenced, the -17- Work. If The Times notifies EDC of its revocation of the election in accordance with the foregoing sentence, then upon EDC's receipt of such notification of revocation, this Agreement shall terminate and thereafter neither Party shall have any rights against or obligations to the other Party by reason of this Agreement except as otherwise specifically set forth in this Agreement. (c) Plans and Specifications. (1) EDC shall deliver to The Times -------------------------- copies of the Final Plans and Specifications for the construction of the Interim Car Pound within ten (10) days after EDC's receipt from The Times of the Car Pound Self Help Notice. The Final Plans and Specifications shall be submitted together with (i) an Engineer's Estimate, as of the date of such submission, and (ii) all appropriate permits, consents, certificates, licenses, authorizations and approvals necessary for the construction of the Improvements generally considered in the construction industry to be the responsibility of the owner of a construction site to obtain ("Owner's Approvals"). If necessary, The Times shall assist EDC, at no cost to The Times, in obtaining such Owner's Approvals. (2) Intentionally Omitted. (3) To the extent that EDC has not obtained and assigned to The Times (or made available to The Times for it's benefit) the following items, The Times shall obtain, or shall cause its Contractors to obtain, all appropriate permits, consents, certificates, licenses, authorizations and approvals necessary for the construction of the Improvements generally considered in the construction industry to be the responsibility of the "contractor" of a construction project to obtain (the "Contractor's Approvals"). If necessary, EDC shall -18- assist The Times or its Contractors in obtaining such Contractor's Approvals. The cost of obtaining such permits, consents, certificates, licenses, authorizations and approvals shall be considered Eligible Costs payable with the Funding if such costs are included in The Times's Contractors' contract price. (4) Any changes required to be made to the Final Plans and Specifications shall be made in accordance with the terms and conditions set forth in Sec.2.3 hereof; provided, however that any changes required to be made by reason of the Requirements, changes to the Requirements, field conditions or other unexpected conditions arising during the course of the Construction Work that may affect the design or construction of the Improvements shall be made solely by EDC and/or its professional consultants, at EDC's cost and expense. The Times shall perform the Construction Work in accordance with all such changes and any increased cost of the Work associated with any such changes to the Final Plans and Specifications in accordance with this Sec.1.1(c)(4) shall be paid as provided in Sec.2.3(d) hereof. (5) EDC shall indemnify and hold harmless The Times and its officers, members, directors, employees and agents (collectively, "The Times Indemnitees") from and against any and all claims, damages, judgments, liabilities and causes of action whatsoever to which they may be subject arising out of (i) the negligence or misconduct of EDC, its employees, agents or consultants in connection with the preparation of the Final Plans and Specifications and any modification or changes thereto and the obtaining of the Owner's Approvals, or (ii) the fact that the Final Plans and Specifications are not in compliance with -19- the Requirements or are incorrect or inappropriate. The obligation of EDC to indemnify and hold harmless The Times Indemnitees shall include but not be limited to the payment of any and all costs and reasonable fees (including reasonable legal fees) as may be actually incurred by The Times Indemnitees as a direct result of the negligence or misconduct of EDC, its employees, agents or consultants. (d) Right to Proceed. The Times may only proceed with the ------------------- Construction Work if and only if (i) all Approvals necessary for the construction of the Improvements have been obtained, (ii) certificates, in form and substance reasonably satisfactory to EDC, evidencing the insurance policies referred to in Appendix C, naming the City and EDC as additional insureds, providing not less than thirty (30) days notice of cancellation to the City and EDC and, if the certificates of insurance described above do not indicate thereon the receipt of due and payable premiums, proof of payment of such premiums shall have been obtained and delivered to EDC, and (iii) all other Requirements have been complied with, it being expressly agreed that The Times shall bear the entire risk of constructing the Improvements in variance with the Final Plans and Specifications and that EDC will not be obligated to disburse any of the Funding before all Approvals have been obtained and all conditions to disbursement under this Agreement have been satisfied. The fact that EDC has provided The Times with the Final Plans and Specifications and the Owner's Approvals, or any other action or failure to act by the Reviewing Parties, shall in no way constitute a representation that all applicable Requirements have been complied with or, subject to the provisions of Sec.1.1(c)(5) hereof, relieve The Times of its obligations to abide by the terms of this -20- Agreement. (e) Performance of the Work. (i) The Times covenants and agrees to cause the Improvements to be constructed in accordance with the requirements of this Agreement and with the Final Plans and Specifications and all applicable Requirements. The Times shall obtain all final acceptances from the appropriate Reviewing Parties as necessary to complete the Improvements. (ii) At all times during the performance of the Construction Work, The Times shall maintain, or cause to be maintained, the Construction Site in a neat and orderly condition and shall protect the Construction Site against deterioration, loss, damage or theft. (f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof, ----------------- The Times shall permit EDC and the Reviewing Parties, their agents, employees and/or professional consultants to make inspections of the Construction Site during normal business hours or otherwise when Construction Work is in progress, at reasonable times and upon reasonable notice to The Times and in accordance with applicable safety standards, (i) with respect to EDC, as it deems necessary to observe compliance with and performance under this Agreement, and (ii) with respect to the Reviewing Parties, as are normally made by the City and its agencies in the course of a project or projects of similar nature and magnitude to the Work. Such inspections shall not require the uncovering of any work unless specifically requested in writing by EDC or the Reviewing Parties, and if the work that has been uncovered is determined to have been performed in accordance with the Final Plans and Specifications and the Requirements, EDC shall pay the costs associated with the uncovering -21- requested by EDC and if the Work that has been uncovered is determined to be unacceptable because it was not performed in accordance with the Final Plans and Specifications or the Requirements, The Times shall pay the costs associated with the uncovering. EDC shall use its good faith efforts to cause such inspection to be made in a manner that will not interfere with the progress of the Work. A representative of The Times shall, if available, accompany the person or persons making such inspection on behalf of EDC or the Reviewing Parties, unless The Times elects to forego such right. The Times shall cause a complete set of the Final Plans and Specifications, as then in effect, and shop drawings to be maintained at the Construction Site for inspection by EDC, the Reviewing Parties and each of their respective employees, consultants and agents. The omission or failure of EDC or the Reviewing Parties or any representative thereof to make such inspections, to identify any defects or to notify The Times of any observable defects or any non-compliance with the terms of this Agreement or the Final Plans and Specifications, shall in no way relieve The Times of its obligations under this Agreement or impose any liability upon EDC, the Reviewing Parties, or any of their respective employees, consultants and agents. (g) Completion. ----------- (1) Subject to Unavoidable Delays, The Times shall diligently proceed to cause Substantial Completion of the Interim Car Pound to occur; provided, however that if The Times believes that Substantial Completion of the Interim Car Pound will occur later than three (3) months after The Times commences construction of such Interim Car Pound, The -22- Times shall promptly notify EDC of the expected length of time it anticipates it will require to Substantially Complete the Interim Car Pound and delays encountered, if any. (2) The Times shall notify EDC of the date the Work shall have been Substantially Completed. EDC shall have ten (10) Business Days after the giving of the notice referred to in the preceding sentence to inspect the Improvements and notify The Times in writing of its acceptance of The Times's determination of Substantial Completion or to notify The Times of specific objections which it believes renders the Work not Substantially Completed and prepare the Substantial Completion Punch List, if necessary, and deliver the same to The Times within such ten (10) Business Day period. The Times shall Substantially Complete those items of the Work, if any, specified in EDC's notice as not Substantially Complete or otherwise specified in the Substantial Completion Punch List. (3) After EDC's acceptance of The Times's determination of Substantial Completion, The Times shall cause the Resident Engineer or the Construction Manager to prepare a Final Punch List. Such Final Punch List shall be prepared after inspection of the substantially completed Improvements by the Reviewing Parties and shall incorporate those items determined by such Reviewing Parties to be necessary for Final Completion of the Work. (4) The Times shall use its good faith efforts to cause Final Completion to occur as soon as reasonably possible after Substantial Completion and, to the extent reasonably achievable, shall complete all items on the Final Punch List within ten (10) days after the Substantial Completion Date. -23- Sec.1.2 Procurement of Bids, Services and Goods --------------------------------------- (a)(1) If The Times elects to construct the Interim Car Pound as provided in Sec.1.1(a) hereof, The Times shall enter into a Construction Contract or Construction Contracts independently and not as agent of the City or EDC for the performance of the Construction Work in accordance with the Final Plans and Specifications so as to facilitate the construction of the Improvements. (2) Any Construction Contract entered into by The Times (and any bid packages prepared by The Times for the bid of the Construction Work) shall instruct the Contractors (or bidders, as appropriate) as follows: title to the Construction Site and the Improvements shall be and vest in the City. Materials to be incorporated into the Construction Site shall, effective upon their purchase and at all times thereafter, constitute the property of the City and upon incorporation of such materials into the Construction Site title thereto shall be and continue in the City. In accordance therewith, purchases of tangible personal property by the Contractors arising in connection with the construction of the Improvements are exempt from the payment of certain sales and compensating use taxes to the extent that such property (i) is used to alter, maintain or improve, and becomes an integral component part of, the Construction Site, or (ii) remains tangible personal property and is installed on the Construction Site. This exemption does not apply to tools, machinery, equipment or other property leased by The Times or its Contractors, or to supplies, materials or other property which are consumed in the course of construction or for any other reason not incorporated into the Construction Site. -24- (b)(1) Prior to letting any Construction Contract to be entered into directly by The Times or by The Times's Construction Manager, if any, The Times shall submit to EDC a list of proposed bidders and, to the extent known to The Times, identify the principals of the bidders (the "Proposed Bidders List"). EDC shall advise The Times in writing within five (5) Business Days after receipt of the Proposed Bidders List, as to which bidders on the Proposed Bidders List are acceptable or unacceptable and, if any bidders are unacceptable, the specific reasons therefor. EDC may also advise The Times, within such five (5) Business Day period, of additional bidders that it proposes that The Times include on the Proposed Bidders List. If EDC fails to provide such advice within such five (5) Business Day period, all of the bidders on the Proposed Bidders List shall be deemed approved. For purposes hereof, any bidder other than a bidder that is a Prohibited Person or has received a negative contractor evaluation from EDC or the City within the five (5) years prior to the date of the Proposed Bidders List, shall be deemed acceptable to EDC. The Times shall obtain proposals from at least six (6) qualified bidders from the list of acceptable bidders and if EDC has proposed additional bidders to be included on the Proposed Bidders List as provided above, at least three (3) of such six (6) qualified bidders shall be bidders proposed by EDC (or if EDC has proposed less than three (3) bidders, then the qualified bidders shall include all the bidders proposed by EDC). The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a bid summary, analysis and statement as to which bidder The Times intends to select, which statement shall be certified by The Times and give specific reasons for The Times's preference. The Times -25- shall not accept a bid which is not the lowest bid without EDC's prior written approval. EDC, in its sole discretion, may (but is not obligated to) either accept a bid which is not the lowest bid if necessary to enable The Times to achieve the total W/MBE Participation Dollar Value and the total W/MBE Percentage or, in the alternative, reduce the W/MBE Participation Dollar Value and the W/MBE Percentage in an amount equal to the portion of the W/MBE Participation Dollar Value and the W/MBE Percentage that would have been achieved by accepting such bid. EDC reserves the right, at any time prior to The Times's acceptance of a bid, to withdraw its prior approval of the bidder chosen in the event that EDC shall learn that the bidder shall have committed any act, or if the bidder shall become the subject of any investigation or legal proceeding, either or both of which would have disqualified the bidder from receiving EDC's original approval. Nothing contained in this Sec.1.2(b)(1) shall limit The Times's right to reject all bids in its sole discretion. (2) Notwithstanding anything to the contrary contained herein, in the event that EDC does not approve any bidder selected by The Times, or withdraws its prior approval of any bidder chosen in accordance with Sec.1.2(b)(1) above, The Times shall have the right to revoke its election to construct the Improvements, provided that The Times reimburses EDC for any Funding already disbursed by EDC to The Times to pay for Resident Engineer Costs or CM Costs. The Times shall exercise its right to revoke its election in accordance with the foregoing by giving EDC written notice of such revocation. Upon EDC's receipt from The Times's of its notice of revocation and reimbursement of the Funding previously disbursed as provided above, this Agreement shall terminate and thereafter neither Party -26- shall have any rights against or obligations to the other Party by reason of this Agreement, except as otherwise specifically set forth in this Agreement. (3) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1) above, at any time after the date hereof The Times shall have the right, without following the bidding procedure outlined in Sec.1.2(b)(1) above, to enter into a Construction Contract with respect to the construction of the Interim Car Pound with a Construction Manager if such Construction Manager is Lehrer McGovern Bovis, Inc. (4) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1) above, at any time after the date hereof The Times shall have the right, without following the bidding procedure outlined in Sec.1.2(b)(1) above, to enter into a Construction Contract with respect to the construction of the Interim Car Pound with a Resident Engineer if such Resident Engineer is the professional consultant engaged by EDC to prepare the Final Plans and Specifications. Upon execution of a consultant contract therefor, EDC shall notify The Times in writing of the professional consultant so engaged by it to prepare the Final Plans and Specifications. (5) For purposes hereof, the term "Prohibited Person" shall mean: (i) Any Person (A) that is in default or in breach, beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that is in default or in breach, beyond any applicable grace period, of its -27- obligations under any material written agreement with EDC or Landlord, unless, such default or breach has been waived in writing by EDC or Landlord, as the case may be. (ii) Any Person (A) that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure. (iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof. -28- (iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended. (v) Any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than $10,000, (or any person that directly controls, is controlled by, or is under common control with a Person in such default), unless such default is then being contested in good faith in accordance with the law. (vi) Any Person (A) that has owned at any time during the three (3) years immediately preceding a determination of whether such Person is a Prohibited Person any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the ------ City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City or (B) that, directly or indirectly controls, is controlled by, or is under common control with such a Person. -29- (c) The Times shall provide EDC with a list of all Contractors, other than suppliers, whose Contract amount totals more than $100,000, on the form attached hereto as Exhibit B. The Times will furnish each Contractor, other than a supplier, whose Contract amount totals more than $100,000, with a subcontractor questionnaire in the form attached hereto as Exhibit C and/or such other qualification and background investigation form(s) as may be used by the City at such time ( collectively, "Investigation Forms") provided by EDC to The Times, and shall use its good faith efforts to cause each such Contractor to fill out and complete the Investigation Forms in a timely fashion but in no event later than the completion of the work performed by such Contractor pursuant to its Contract. (d) All Construction Contracts, in order to be eligible for disbursement under this Agreement, shall provide, in substance: (1) that the Contractor shall obtain and maintain comprehensive general liability insurance and other insurance in the amounts and in accordance with the applicable provisions set forth in Appendix C; (2) that neither the Contractor nor any of its employees or subcontractors is or shall be deemed to be an agent, servant, employee or contractor of the City or EDC by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or other authorization given the City, EDC or any of their respective officers, officials, directors, members, agents or employees; and that the Contractor shall not commence any legal proceeding against the City or EDC to recover any compensation which may be payable under the -30- Construction Contract; (3) that the Contractor is solely responsible for the work, direction, compensation and personal conduct of its employees and subcontractors; (4) that the Contractor shall indemnify and hold harmless the City, EDC and their respective agents, officers, directors, officials, members and employees from any and all claims, judgments or liabilities to which they may be subject because of any act or omission of the Contractor or its respective agents, officers, directors, employees or subcontractors arising out of or in connection with the pertinent Construction Contract or because of any negligence, fault or default of the Contractor or its respective agents, employees, officers, directors or subcontractors (as the case may be); (5) that the Contractor shall maintain accurate, readily auditable records and accounts with supporting documentation, in accordance with Accounting Principles, of all work performed, and receipts and expenditures made, in connection with the pertinent Construction Contract, and that the Contractor shall make such records and accounts available to EDC, the City and each of their respective agents and employees, for inspection and audit at reasonable times and upon reasonable written notice for a period of six (6) years after completion of the pertinent Construction Contract; (6) provisions incorporating the requirements of Sec.6.5(a) (Compliance with Applicable Law) and Sec.9.1 (Conflict of Interests); and -31- (7) that the Contractor represents and warrants, and shall cause its subcontractors and material suppliers to represent and warrant, that state and local sales tax has been excluded from the contract price, to the extent applicable; provided, however, that the Contractor and its subcontractors and material suppliers shall be responsible for and pay any and all applicable taxes, including sales and use taxes, imposed upon leased tools, machinery, equipment, and upon all supplies and materials and other property which are consumed in the course of construction or for any other reasons not incorporated into the Construction Site. (e) Any proposed changes or amendments to a Construction Contract, the effect of which would be to increase the amount of the Funding, shall be made in accordance with the provisions of Sec.2.3 hereof. Any proposed changes or amendments to a Construction Contract which affect the provisions to be included in such Construction Contract pursuant to Sec.1.2(d) hereof shall not be made unless approved in writing by EDC, which approval shall not be unreasonably withheld and shall be deemed given unless denied in writing within five (5) Business Days after EDC's receipt of The Times's written request for such approval, and no Funding shall be disbursed in respect of any Work affected by any such change or amendment unless approved in writing or deemed approved by EDC. (f) In addition to the provisions required to be included in the Construction Contracts pursuant to Sec.1.2(d) hereof, The Times may include in the Construction Contract (and the bid packages therefor) such other provisions as The Times deems necessary to -32- incorporate the requirements of this Agreement therein, including without limitation, that the Contractor shall not receive payment under its Construction Contract until all the conditions for disbursement described in Article 4 hereof have been satisfied and The Times has received payment of the Funding from EDC under this Agreement. Sec.1.3 Liaison to EDC -------------- The Times agrees that it will cause the Person or Persons on The Times's staff, described in the Car Pound Self Help Notice as the Person or Persons primarily responsible to communicate with EDC regarding the performance of the Work, to be available to the extent reasonably required by EDC in connection with this Agreement. The Times further agrees to use its good faith efforts to notify EDC in writing of any intended substitution of said Person or Persons at least five (5) days prior to the date such substitution will take effect but in any event will notify EDC in writing of any such substitutions on the day such substitution will take effect. -33- ARTICLE TWO - THE FUNDING ------------------------- Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions, ------------------- representations and warranties contained in this Agreement, EDC agrees to disburse the Funding and The Times agrees to accept the Funding and all other agreements and obligations of EDC and the City set forth herein as full consideration for performance by The Times of the Work. Subject to EDC's remedies upon an Event of Default and except as otherwise provided herein, the Funding, once disbursed under this Agreement, shall not be subject to any reimbursement whatsoever to EDC. (b) The amount of the Funding shall be consideration for any and all costs, fees and/or expenses of The Times in any way connected with the performance of the Work and, subject to the receipt of such Funding, The Times will be solely responsible for completion of the Improvements in accordance with the Final Plans and Specifications. The Times acknowledges that the Funding is not a fee or other compensation earned by or paid to The Times. Sec.2.2 Disbursements. (a) The Times agrees to accept the Funding and to ------------- utilize the proceeds thereof solely in connection with the Work. Except as otherwise specifically set forth herein, in no event shall The Times be required to expend any of its own funds to pay for the performance of the Work and the construction of the Improvements. After the completion of the portion of the Work to which the portion of the payment being disbursed -34- applies, disbursements shall be made by EDC to The Times as follows: (1) With respect to Hard Costs, after receipt by EDC of all items required by Sec.4.2 below, in installments equal to (A) the product of (i) the measurements of the quantities of items attributable to the Construction Work (as certified by the Resident Engineer or Construction Manager) and (ii) the unit price for each such item, (B) less ten percent (10%) retainage, until fifty percent (50%) completion of the Construction Work, and upon fifty percent (50%) completion of the Construction Work such lesser retainage as The Times may, in its sole discretion, require in its Construction Contracts to be retained (the "Retainage"), subject to disbursement as set forth in (3) below; (2) With respect to Resident Engineer Costs, in monthly installments equal to the Resident Engineer Costs for the previous month, calculated based on the Resident Engineer's fee schedule attached to the Construction Contract with respect to the Resident Engineer, or alternatively, if The Times elects to engage a Construction Manager instead of a Resident Engineer (and not in addition to a Resident Engineer), then with respect to CM Costs, in monthly installments equal to the CM Costs for the previous month, calculated based on the Construction Manager's fee schedule attached to the Construction Contract with respect to the Construction Manager; (3) With respect to the Retainage, within twenty (20) days after the Final Acceptance Date; provided, however, such portion of the Retainage equal to one percent (1%) of the total cost of performing the Work shall not be disbursed upon the Final Acceptance Date but shall be disbursed within twenty (20) days after Final Completion. (b) Intentionally omitted. -35- (c) All disbursements shall be made by check at the principal office of EDC, or at such other place within the City of New York as EDC may designate. Disbursement requests shall be submitted within the time periods and in the manner provided therefor in Article 4. (d) No portion of the Funding shall be advanced for materials not incorporated into the Construction Site. (e) Disbursements of the Funding shall be no more frequent than every thirty (30) days and shall be made by EDC within ten (10) Business Days after the date EDC receives from The Times a complete disbursement request, reasonably satisfactory to EDC, together with the Requisition and all such other documentation as may be required or reasonably requested by EDC. (f) If EDC fails to disburse the Funding in accordance with the terms and conditions of this Agreement, and as a result of such failure any one or more of the Contractors cease performing the Construction Work, then provided that The Times gives EDC thirty (30) days prior written notice and an opportunity to cure such failure, The Times shall have the right, but not the obligation, to pay such Contractor or Contractors from its own funds for the performance of the Construction Work and, in accordance with Sec.9.5(b) hereof, receive an offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Payments due under the Lease, in an aggregate amount equal to the funds so disbursed by The Times to such Contractor or Contractors, from the date that The Times paid such funds to such Contractor or Contractors until the earlier to occur of the date on which EDC recommences the disbursement of the portion -36- of the Funding allocable to the Construction Work performed by such Contractor or Contractors or the date of such offset. (g) If any one or more of the Contractors cease performing the Construction Work as a result of EDC's failure to disburse the Funding to The Times in accordance with the terms and conditions hereof, then, notwithstanding anything to the contrary contained herein, EDC shall indemnify and hold harmless The Times Indemnitees from and against any and all claims, judgments, liabilities and causes of action whatsoever instituted and/or obtained by such Contractor or Contractors as a result of such failure to fund. The obligation of EDC to indemnify and hold harmless The Times Indemnitees shall include but not be limited to the payment of any and all costs and reasonable fees (including reasonable legal fees) as may be actually incurred by The Times Indemnitees as a direct result of EDC's failure to fund. Sec.2.3 Funding of Costs of Changes --------------------------- (a) Notwithstanding any provision to the contrary contained in this Agreement, EDC shall not disburse increased Funding on account of Eligible Costs covered by changes to the Final Plans and Specifications except as expressly provided in this Sec.2.3. In no event will the amount of the Funding be increased on account of such changes made other than pursuant to Sec.2.3(b)(i), Sec.2.3(b)(ii) or Sec.2.3(d) hereof. The Eligible Costs incurred in connection with all changes made in accordance with Sec.2.3(b)(ii) or Sec.2.3(d) hereof shall be paid for with the Funding. -37- (b) Changes Initiated by The Times ------------------------------ (i) Material Changes. In no event shall The Times have the ----------------- right to initiate Material Changes to the Final Plans and Specifications and EDC shall not be obligated to disburse the Funding on account of Eligible Costs increased by any such Material Change initiated by The Times. If, in the course of the Construction of the Improvements, The Times or its Contractors determines that a Material Change to the Plans and Specifications will be required to complete the Improvements, The Times shall notify EDC of such determination. Within five (5) days after EDC's receipt of such notification, EDC shall either inform The Times that it believes no Material Change is required or it shall instruct the professional consultant engaged by EDC to prepare the Plans and Specifications (or the Resident Engineer if such Resident Engineer is the same Person as the professional consultant engaged by EDC) to make the appropriate changes to the Plans and Specifications. If EDC fails to respond to The Times within the five (5) day period described above and if the Resident Engineer is the same person as the professional consultant engaged by EDC to prepare the Plans and Specifications, the Material Changes requested by The Times shall be deemed approved by EDC and the Resident Engineer shall have the right to make the appropriate changes to the Plans and Specifications. If EDC instructs its professional consultant to make changes to the Plans and Specifications, EDC shall cause such professional consultant to complete such changes within thirty (30) days after the date of EDC's instruction. -38- (ii) Non-Material Changes. The Times shall have the right to -------------------- initiate changes to the Final Plans and Specifications which result only in a change in the quantity of materials to be supplied under a Construction Contract (even if such change results in an increase of the cost of such Construction Contract). EDC shall disburse the Funding on account of each such change to the Final Plans and Specifications described above, provided that EDC is notified of such change prior to The Times's submission of a Requisition pursuant to Article 4 for funds relating to the Work covered by the change, and further provided that the need for such change does not result from or arise out of an error or omission on the part of The Times or an Affiliate, any Contractor or subcontractor. (c) Intentionally Omitted. (d) Changes Initiated by EDC ------------------------ (i) Changes in the Work. EDC shall have the right and --------------------- authority, on behalf of itself and the Reviewing Parties, to make interpretations of the Final Plans and Specifications and/or to order minor changes in the Construction Work that do not increase the price of a Construction Contract or the amount of time necessary to complete the Construction Work. The Times shall promptly cause the affected Contractor(s) to comply with any such order. (ii) Change Orders. In addition to the changes requested -------------- pursuant to clause (i) above and changes requested by The Times pursuant to Sec.2.3(b)(i) hereof, from time to time during the course of the Work, changes in the Requirements governing the construction of the Improvements, field conditions or other unexpected conditions may require changed, deleted and/or additional work to be performed. For purposes of this Sec.2.3(d), said -39- changed, deleted or additional work shall be referred to as "change order work". Only EDC, on behalf of itself and the Reviewing Parties, shall have the right to require change order work to be performed. All change order work must be performed only if ordered by a written directive from EDC (for purposes of this Sec.2.3(d), the "change order"). Neither oral directives nor any writing not designated by EDC as a change order will constitute change orders. Upon receipt of a change order from EDC, The Times shall cause its Contractors to promptly comply with it by performing all necessary work in accordance therewith. If work is added or deleted by a change order, then the amount of the increase (in the event the change order work would involve any adjustment in the price of a Construction Contract that would bring the aggregate price of the Work to an amount greater than the amount of the Funding) or decrease in the Funding shall be determined in one or more of the following ways as may be applicable: (A) If The Times and the Contractor shall agree upon a lump sum value or a unit price value to increase or decrease the amount of the Funding for the work specified, The Times shall notify EDC of such agreed upon lump sum value or unit price value and EDC shall, or shall cause, such value to be stated in writing in the change order, and the amount of the Funding shall be changed by such value; and/or (B) If the Construction Contract and/or the bid proposal of the affected Contractor is based upon or shall contain unit prices which are to be applicable to the type of work involved in the proposed change order work, then said unit prices shall be used to set the value of the increase or decrease to the amount of the Funding for the change order work; and/or -40- (C) If The Times and the affected Contractor cannot agree upon a lump sum value or unit price value, and no unit price is specified in the Construction Contract and/or the bid proposal of such Contractor, then the increase or decrease to the amount of the Funding shall be determined on a time and a materials basis. (iii) Payment for Change Order Work. Payments for change order ------------------------------- work shall become due and shall be made by EDC to The Times after the Contractor has performed the change order work and after the Contractor submits a fully signed copy of said change order (or the portion thereof covered by a Requisition) on the form annexed hereto as Exhibit D, with The Times's next requisition for payment, noting on said change order that the Contractor agrees to and accepts said change order. In the event that the change order is a credit change order, EDC shall make the deduction for said change order immediately upon the issuance of said change order against any funds due or to become due under this Agreement and/or any other change orders with respect to the relevant Contractor, subcontractor or material supplier. -41- ARTICLE THREE - TERM -------------------- Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon ----- the execution of this Agreement by both parties and the unconditional delivery of this Agreement by each Party to the other and shall expire on the occurrence of any of the following events: (i) the first anniversary of the Car Pound Removal Date if The Times fails to deliver to EDC a Car Pound Self Help Notice prior thereto, or (ii) the date on which EDC receives notice from The Times of The Times's revocation of the Car Pound Self Help Notice in accordance with Sec.1.1(b)(3) or Sec.1.2(b)(2) hereof and reimburses EDC for any Funding already disbursed as required pursuant to the terms of this Agreement, or (iii) if The Times has delivered to EDC a Car Pound Self Help Notice within the time provided in Sec.1.1(b)(1) hereof and has not revoked such election in accordance with this Agreement and has in fact commenced the Construction Work, then the later to occur of either (x) one month after Final Completion of the Work, or (y) the complete disbursement by EDC to The Times of all amounts payable to The Times pursuant to the terms of this Agreement, unless sooner terminated by EDC in accordance with this Agreement; provided, however, that, notwithstanding anything to the contrary contained herein, if The Times has not yet exercised its option, pursuant to Sec.1.1 hereof, to construct the Interim Car Pound and EDC has completed construction of the permanent relocation New York City Police Department vehicle pound, then, this Agreement shall terminate upon EDC's completion of construction of the permanent relocation vehicle pound, and further provided that, notwithstanding -42- anything to the contrary contained herein, upon the expiration or earlier termination of the Lease, this Agreement shall terminate. All rights, remedies and liabilities arising prior to the termination or expiration of the Term shall survive the date of termination or expiration, as the case may be. -43- ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT ------------------------------------------ Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to --------------------------------- disburse any of the Funding to The Times unless, at any time prior to the first request for disbursement of the Funding but no later than ten (10) days prior to the date on which the first payment of the Funding to be made pursuant to this Agreement is sought, EDC shall have received the following documents, together with a cover sheet (a "Completed Cover Sheet") listing the items submitted: (a) a legal opinion by counsel to, or general counsel of, The Times (addressed to EDC) in the form annexed hereto as Exhibit E, to the effect that (I) this Agreement is legal, valid and binding upon and enforceable against The Times in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), and (II) The Times has been duly authorized to execute and deliver this Agreement; (b) a certificate, in the form annexed hereto as Exhibit F, of an authorized officer of The Times certifying the specimen signature of each officer, director or agent of The Times authorized to deliver Requisitions under this Agreement; (c) copies of any then executed Construction Contract(s), containing all the provisions required pursuant to Sec.1.2(d) hereof; and (d) a collateral assignment by The Times to EDC of The Times's right, title and -44- interest to the Construction Contracts, which collateral assignment shall be effective only upon an Event of Default and the termination of this Agreement. Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC ------------------------------------------------------------- shall not be obligated to make the first disbursement of the Funding or any subsequent disbursement with respect to the Work unless the following conditions, in addition to the conditions described in Sec.4.1, shall have been satisfied: (a) The following documents, in form and substance reasonably satisfactory to EDC, together with a Completed Cover Sheet, shall, except to the extent previously submitted by The Times, be delivered to EDC at least ten (10) days in advance of the date on which each (except as otherwise indicated in this Sec.4.2) payment is sought: (i) copies of all Contractor's Approvals necessary to lawfully perform the Construction Work for which the Funding is being sought in accordance with the Final Plans and Specifications; (ii) a requisition executed and certified by an authorized representative of The Times (and addressed to EDC), setting forth: (x) the amount of the requested disbursement, (y) an itemization of the Eligible Costs for which the disbursement is sought, and (z) a list of Contractors whose work is covered by the requisition, indicating the amount requested with respect to each such Construction Contract, with a certification by such authorized representative -45- that such Eligible Costs have not previously been reimbursed under this Agreement. The requisition shall be accompanied by the certification described in Sec.6.1 hereof and copies of (I) all Construction Contracts on account of which payment is being sought that have not been previously delivered, containing all the provisions required pursuant to Sec.1.2(d) hereof (or for Construction Contracts that have been previously delivered, a statement to that effect and copies of any amendments thereof); (II) as applicable, requisitions or applications for payment by the Resident Engineer or the Construction Manager to The Times; (III) as applicable, a copy of an "Application and Certificate for Payment", substantially in the forms annexed hereto as Exhibit G, completed and executed by the Resident Engineer or the Construction Manager with respect to all work performed by Contractor(s) and covered by The Times's requisition, together with a statement of the Resident Engineer or the Construction Manager addressed to EDC stating the quantities of materials installed with respect to the Construction Work completed as of the date of the requisition and that, to the Resident Engineer's or the Construction Manager's knowledge, the Construction Work performed by the Contractor(s) and covered by the requisition has been performed to the Resident Engineer's or the Construction Manager's reasonable satisfaction substantially in accordance with the Final Plans and Specifications; and (IV) in connection with each disbursement request other -46- than the first disbursement request, partial releases of liens from all Contractors, subcontractors and suppliers in respect to Construction Work performed under a Construction Contract or subcontract and for which the Eligible Costs in connection therewith have been reimbursed with the Funding pursuant to a prior Requisition (the items described in this paragraph (ii), collectively, the "Requisition"); (iii) such additional documents, data or information reasonably requested by EDC with respect to the Construction Site and the Work or in support of the Requisition, including without limitation, documents as would customarily be required by City agencies engaged in projects similar in scope to the Work such as trade payment breakdowns in support of all subcontractors' requisitions to the Resident Engineer, Construction Manager or General Contractor (as the case may be), if any, invoices, and receipts; (iv) a written statement by DLS certifying that each Contractor performing Work has complied with the City's equal employment requirements under mayoral Executive Order No. 50 (April 25, 1980), as amended, if applicable, or evidence from The Times or DLS that Executive Order No. 50 or its successor does not apply, it being understood that such written statement or other satisfaction by DLS for each Contractor only needs to be submitted at the time of the submission of the first requisition covering such Contractor's work and it being further understood that, notwithstanding anything to the -47- contrary contained herein, for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees, the trainee requirements of Executive Order No. 50 shall not be applicable to the Construction Work, the Contractors and the subcontractors, and the Contractors and the subcontractors shall in no event be deemed to be in noncompliance with Executive No. 50 due to noncompliance with such trainee requirements; and (v) in connection with the first disbursement request, as described in Sec.6.12, a completed and duly executed W/MBE Plan in the form annexed hereto as Exhibit H. (b) As of the date of the disbursement, (i) the representations and warranties made in Article Five shall be correct and complete and (ii) there shall exist no unbonded public improvement lien relating to the Funding; provided, however, that in the event there exists an unbounded public improvement lien relating to the Funding, EDC shall continue to disburse to The Times those portions of the Funding which are otherwise payable hereunder reduced only by the amount of such unbounded lien. Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this ------------------------- Article Four shall be directed to EDC's Vice President for Construction. -48- ARTICLE FIVE - REPRESENTATIONS, WARRANTIES AND ---------------------------------------------- GUARANTIES OF THE TIMES ----------------------- To induce EDC to disburse the Funding, The Times represents and warrants as follows: Sec.5.1 Organization; Standing. The Times is a corporation duly organized ---------------------- and validly existing under the laws of the State of New York and has all requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. A copy of The Times's certificate of good standing from the Secretary of State of the State of New York is attached hereto as Appendix D, and hereby made a part hereof. Sec.5.2 Intentionally omitted. --------------------- Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery ------------------------------------- of this Agreement by The Times is not, and the performance of this Agreement by The Times will not be, effectively prohibited or prevented by, or result in breach of (i) the certificate of incorporation or by-laws of The Times, or (ii) to the best of The Times's knowledge, any presently existing or effective law, judgment, order, writ, injunction, decree, rule or regulation of any court or Governmental Authority applicable to The Times, or (iii) any agreement, instrument, or undertaking which is binding on The Times. -49- Sec.5.4 No Litigation. As of the date of this Agreement there are no ------------- suits or proceedings pending or, to the best of The Times's knowledge, threatened against The Times which would materially affect the construction of the Improvements, the consummation of the transactions contemplated by this Agreement, or the full performance of the obligations of The Times under this Agreement. Sec.5.5 Intentionally omitted. Sec.5.6 Intentionally omitted. Sec.5.7 Quality of Work; Guaranties and Warranties. ------------------------------------------ (a) The Times shall cause the Construction Work to be performed in a good and workmanlike manner, and all materials and equipment and workmanship utilized or furnished in connection with the Construction Work shall be in new (unless otherwise specified in the Final Plans and Specifications) and good condition, fully operational, without defects (except to an immaterial extent), substantially in accordance with the Final Plans and Specifications. (b) The Times shall, in connection with the Construction Work, obtain the maximum guaranties and warranties on labor, materials and equipment as are generally available within the relevant industry. The costs of obtaining such guaranties and warranties shall be considered Eligible Costs and are payable with the Funding. -50- (c) The guaranties and warranties required pursuant to Sec.5.7(b) above shall, to the extent reasonably obtainable by The Times, the Construction Manager, the Resident Engineer or the General Contractor (as applicable), expressly be made for the benefit of The Times, the Construction Manager, the Resident Engineer or the General Contractor (as applicable), EDC and the City and, immediately upon obtaining the same, The Times, the Construction Manager, the Resident Engineer or the General Contractor (as applicable), shall assign its rights and interests therein to EDC and the City, which assignment shall be in form and substance reasonably acceptable to EDC. Thereafter, The Times, the Construction Manager, the Resident Engineer or the General Contractor (as applicable), shall be relieved in all respects with respect to any further obligations in connection with the Construction Work including, without limitation, the obligation to repair, replace, restore, or remedy or correct any defects, faults or deficiencies (including any damage arising out of such defects, faults or deficiencies) in workmanship or materials which exist, occur, or are discovered after the assignment of such guaranties and warranties. The requirements of the first sentence of this Sec.5.7(c) shall be included in all Construction Contracts. -51- ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC ------------------------------------------------------ To induce The Times to enter into this Agreement and perform the Work, EDC represents and warrants as follows: Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation, ----------------------- organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation Laws and has all the requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has ------------------------------------------- been duly authorized, executed and delivered by EDC and constitutes a legally binding obligation of EDC enforceable in accordance with its terms. A legal opinion by general counsel of EDC (addressed to The Times) providing that this Agreement is legal, valid and binding upon and enforceable against EDC in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), is attached hereto as Appendix E and hereby made a part hereof. A certificate of the Secretary of EDC, dated as of the date of this Agreement, certifying to the adoption of resolutions by the Board of Directors of EDC authorizing the execution and delivery of this Agreement by EDC is attached hereto as Appendix F and hereby made a part hereof. -52- ARTICLE SIX ----------- COVENANTS --------- Sec.6.1 Requisitions Update The Times's Representations. The Times ---------------------------------------------------- covenants that each Requisition presented to EDC under Article Four shall be accompanied by a completed certification, in the form attached hereto as Exhibit I. Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the ------------------------------------------------------ Term, The Times shall: (a) comply with all of the terms, conditions and covenants now or in the future binding upon or applicable to The Times under this Agreement; (b) do all things necessary to maintain and keep in full force and effect its existence, rights and privileges under the laws of the State of New York; and (c) comply with, and do all things reasonably necessary to cause the Work to be performed in compliance with all Requirements applicable to the Work and/or the Construction Site, it being understood that The Times shall not be held responsible for failure to comply with the Requirements to the extent that such failure arises out of The Times's performance of the Work in accordance with the Final Plans and Specifications. Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The ----------------------------------------------------------- Times shall maintain or cause to be maintained the insurance coverage described in Appendix C -53- attached hereto. The Times shall comply with all of the applicable provisions of such insurance policies. Nothing contained in this Sec.6.3 is intended to confer any rights upon any third party. Sec.6.4 Maintenance of Office. The Times will maintain an office in the ---------------------- City of New York where notices with respect to this Agreement may be delivered to it and inspections and audits in accordance with Sec.6.7 may be conducted. Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or ------------------------------ cause to be included, the following requirements, as applicable, in all Construction Contracts, and shall require, or cause to be required, all subcontracts with respect to the Construction Work to include the same requirements, so that the Contractor(s) and any subcontractors shall agree, in substance: (i) to comply with (1) the applicable provisions of City and New York State equal employment and affirmative action laws applicable to construction contractors and non-construction contractors which are annexed to and made a part of this Agreement as Appendix G (consisting of "Construction Contract Rider" pursuant to mayoral Executive Order No. 50, provided, however that the trainee requirements set forth therein shall be inapplicable for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees), and the filing of any required construction employment reports with -54- the City's Bureau of Labor Services on the forms annexed hereto as Appendix H; (2) New York State Labor Law Sec.220e, and (3) City Administrative Code Sec.6-108; (ii) to comply with the applicable provisions of the New York City Noise Control Code (Administrative Code Sec.24-216, as amended, and related regulations); and (iii) to pay no less than prevailing wage rates and supplemental benefits to laborers, workers and mechanics pursuant to Sec.220(3) of the New York State Labor Law in accordance with the currently scheduled rates, as amended from time to time. (b) The Times shall use its good faith efforts to promptly, diligently and continuously enforce the full and faithful performance by the Contractors with whom The Times enters into Construction Contracts hereof with the provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith efforts to cause such Contractors to enforce such compliance by the subcontractors and material suppliers hired by such Contractors in connection with the Construction Work. Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall ---------- not assign this Agreement except that The Times may assign this Agreement to an Affiliate without EDC's prior written consent, provided that such Affiliate assumes all the rights and obligations of The Times under this Agreement, and that all the representations, warranties and covenants made by The Times in this Agreement shall be similarly made by such -55- Affiliate, and further provided that The Times provides to EDC a copy of the executed written agreement evidencing such assignment and assumption. Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate, ---------------------- readily auditable records and accounts with supporting documentation, of (i) all of the costs related to the construction of the Improvements, (ii) all of its receipts and expenditures in connection with the Funding and with the Work, and (iii) all financial accounts and transactions maintained or undertaken in connection with this Agreement. The Times shall make such records available for inspection and audit at The Times's place of business within New York City by EDC and the City at reasonable times and upon reasonable advance notice. All such records and accounts shall be maintained for a period of six years after termination of this Agreement. The provisions of this Sec.6.7 shall survive the expiration or earlier termination of this Agreement. Sec.6.8 Intentionally omitted. Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and ----------------------------------- hold the proceeds of the Funding (including any insurance proceeds arising out of any casualty affecting property purchased with the Funding) as a trust fund to be applied exclusively for the payment of Eligible Costs (or reimbursement to The Times for the payment of Eligible Costs) in accordance with the terms of this Agreement and shall not use any part of the same for any other purpose. -56- Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of ---------------------------- the Funding shall not constitute a waiver of any default by The Times on account of defective construction work in performance of the Work or deviation from the Final Plans and Specifications. No part of the Funding shall be disbursed for the correction of such non-conforming work unless either (i) such defective work was performed in accordance with the Final Plans and Specifications, or (ii) such deviation from the Final Plans and Specifications was necessitated as a result of unexpected field conditions and was performed in accordance with good construction practices and EDC approved (which approval shall not be unreasonably withheld or delayed), in writing, the performance of such work. Sec.6.11 Participation by Women and Minority Owned Businesses ---------------------------------------------------- (a) EDC is committed to maximizing meaningful participation by women- owned business enterprises ("WBEs") and minority-owned business enterprises ("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its contracting opportunities. Based on its review of the scope of the Work and the lists of certified W/MBEs maintained by the interested government entities identified below, EDC estimates that a total aggregate W/MBE percentage of twenty-five percent (25%) can be attained by The Times for the Work. Accordingly, prior to receipt of any disbursements hereunder, The Times shall complete a utilization plan (the "W/MBE Plan"), in the form of Exhibit H attached hereto, describing The Times's plan for participation of W/MBEs in the Work. (b) In order to be considered W/MBEs for purposes of inclusion in the W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE Plan must -57- have received certification, as WBEs and/or MBEs, from the New York City Department of Business Services ("DBS"). Businesses that have been certified as being women or minority owned by the New York State Department of Economic Development or the Port Authority of New York and New Jersey may be eligible to receive expedited certification from DBS after completing the DBS "Expedited Certification Affidavit" in the form of Exhibit H-1 attached hereto. Each of these entities maintain current lists of certified W/MBEs; The Times is encouraged to contact these entities in order to obtain copies of their current lists of certified W/MBEs who may be qualified to participate, either as Contractors, subcontractors or materials suppliers, in the Work. Together with submission of the W/MBE Plan, The Times shall submit verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan are certified as WBEs and/or MBEs by DBS prior to the award of the contract with respect to such Contractor, subcontractor or material supplier. (c) The Times should use the W/MBE Plan to identify potential W/MBEs that The Times, the Resident Engineer, the Construction Manager or the General Contractor intends to employ as Contractors, subcontractors or materials suppliers. The W/MBE Plan requires the identification of the specific trade and/or the specific material to be supplied by such W/MBEs. The W/MBE Plan requires that the level of participation by W/MBEs be described based on (i) a dollar value estimate of participation by W/MBEs (the "W/MBE Participation Dollar Value") and (ii) the percentage of the total Funding that will be passed on to W/MBEs (the "W/MBE Percentage"). (d) The Times shall not be required to utilize the specific W/MBEs listed in the -58- W/MBE Plan and substitutions may be made; however, The Times shall provide for the participation of W/MBEs in the Work at a level equal to or greater than the total aggregate W/MBE Participation Dollar Value and the total aggregate W/MBE Percentage as each are set forth in the W/MBE Plan. The W/MBE Participation Dollar Value and the W/MBE Percentage recorded on the W/MBE Plan are a part of this Agreement. The Times cannot reduce the W/MBE Participation Dollar Value or the W/MBE Percentage. (e) If The Times breaches the foregoing obligation relating to the participation of W/MBEs in the Work, then, as its sole and exclusive remedy against The Times with respect to any such breach, EDC shall be entitled to withhold from disbursement to The Times a portion of the Funding in the amount equal to the difference between (i) the W/MBE Participation Dollar Value set forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value achieved by, and in fact paid to participating W/MBEs by or on behalf of, The Times in respect of the completed Work. No portion whatsoever of any of the Funding that is withheld pursuant to this Sec.6.11(a) shall be charged to the account of any W/MBEs employed in respect of the Work. (f) The Times may substitute other certified W/MBEs for those identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which approval shall not be unreasonably withheld) before being employed, either as Contractors, subcontractors, or as materials suppliers, in respect of the Work. The Times may also add additional W/MBEs to the W/MBE Plan provided that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage falls below that identified in the W/MBE Plan. -59- Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times -------- shall not create, permit or suffer to exist any mortgage, encumbrance, lien, security interest, claim or charge against the Construction Site. (b) The Times will cause the Improvements to be constructed free and clear of liens of mechanics, material persons and suppliers, including public improvement liens, or claims for any such liens subject to The Times's right to cause any such lien to be removed or bonded within sixty (60) days after the placement of such lien. The costs of removing or bonding such lien shall be paid by The Times except if such lien was placed solely as a result of EDC's failure to disburse to The Times the Funding in accordance with this Agreement, in which case EDC shall pay for the costs of removing or bonding such lien. Sec.6.13 Intentionally omitted. Sec.6.14 Intentionally omitted. Sec.6.15 Intentionally omitted. Sec.6.16 MacBride Principles. The Times hereby agrees that with respect ------------------- to any Construction Contract entered into for the performance of the Work, The Times shall (i) include in such Construction Contract the requirements of the MacBride Principles Rider, attached hereto as Appendix J, and shall (ii) require its Contractors (A) to comply with applicable covenants and representations set forth in Appendix J, and (B) to cause its -60- contractors, subcontractors, and materials suppliers performing the Work to also comply with the requirements of Appendix J. Notwithstanding anything to the contrary contained herein, the provisions of this Sec.6.16 shall not apply to any contractor, subcontractor or materials supplier with respect to which there is not another contractor, subcontractor or materials supplier to perform work or supply materials of comparable quality at a comparable price. Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion ----------------------- of the Funding to The Times shall not constitute a waiver of EDC's right to require compliance with any of the covenants contained in this Article Six or otherwise contained in this Agreement. -61- ARTICLE SEVEN - DEFAULT AND TERMINATION --------------------------------------- Sec.7.1 Events of Default. An "Event of Default" shall exist if any of ----------------- the following shall have occurred: (a) if The Times shall have applied the Funding in violation of the covenant set forth in Sec.6.9 and such misapplication was not corrected within ten (10) Business Days after receipt of written notice thereof; or (b) if The Times fails to duly observe or perform any of the material covenants and agreements contained in this Agreement (other than the covenants contained in Sec.6.9) and if such failure continues for twenty (20) Business Days after receipt of written notice to The Times by EDC specifying with particularity such material default and requiring such material default to be remedied; provided, however, that if because of Unavoidable Delays or if the nature of the default is such that The Times cannot reasonably be expected to cure the same within such period, then such material default shall not be an Event of Default if, within such period (subject to Unavoidable Delays), The Times commences in good faith to cure such material default and (subject to Unavoidable Delays) diligently prosecutes such cure to completion; or (c) if an "Event of Default" (as defined in the Lease) has occurred under the Lease and EDC has taken action to terminate the Lease in accordance with the terms thereof; or (d) if there is any cessation of the Construction Work for any period in excess of ninety (90) successive calendar days after the date upon which the Construction Work shall -62- commence, unless the cessation of the Construction Work shall have been caused by Unavoidable Delays and construction or construction-related activities shall have resumed promptly after the cause of the Unavoidable Delay shall have been removed and shall be diligently pursued (it being understood that during any such cessation of the Construction Work, EDC shall have the right to enter upon the Construction Site for the purpose of protecting the Construction Site against deterioration, loss, damage or theft if the Contractor or Contractors required, pursuant to its respective Construction Contract(s), to provide such services has ceased providing the services); or (e) if any representation or warranty by The Times contained in this Agreement shall be materially false when made or reaffirmed and such materially false representation or warranty materially adversely affects The Times's ability to enter into this Agreement and perform the Work in accordance with the terms hereof. Sec.7.2 Default Remedies; Exculpation. ----------------------------- (a) Upon an Event of Default, EDC may exercise any right or remedy permitted to it by law, in equity, or under this Agreement, including, without limitation, the right to obtain restitution of any portion of the Funding which is applied by The Times, The Times's employees, agents or contractors in violation of Sec.6.9, with interest from the date of EDC's disbursement at the Late Charge Rate. Without limiting the generality of the foregoing, upon an Event of Default, EDC shall have the right to elect to terminate this Agreement (reserving, however, all remedies provided in this Article Seven or existing otherwise) or to -63- make no further disbursements until such default is remedied or determined not to be an Event of Default. (b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof, the liability of The Times and its Affiliates under this Agreement for damages or otherwise shall be limited to (i) any sums advanced hereunder to The Times but not heretofore expended by it, (ii) the proceeds (to the extent actually received by The Times) of any insurance policies covering or relating to the Work or the Construction Site, (iii) the obligations of The Times set forth in Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the period prior to their assignment to EDC. In no event shall EDC look to the property or assets of any of the individuals who are the directors, officers, employees, shareholders, agents or servants of The Times, and no property or assets of any of the aforesaid Persons shall be subject to levy, execution or other enforcement procedure for the satisfaction of The Times's obligations under this Agreement, except in the event such individual has misapplied the Funding as described in Sec.7.2(c) below and then only to the extent of the actual dollar amount that such individual has misapplied the Funding; provided, however, that if such misapplication was the result of such individual's fraudulent conduct, such individual's liability shall be as set forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no event shall The Times Indemnitees be liable for consequential damages under this Agreement. (c)(i) Each of the individuals described in Sec.7.2(b) above shall be personally liable (as distinguished from collective liability), to the full extent provided by law, in equity, and by this Agreement if any such relevant individual shall have applied the Funding in violation -64- of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct, in which case such liability shall not be limited as provided above. (ii) The Times shall be liable to the full extent provided by law, in equity, and by this Agreement if The Times shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct on the part of The Times as opposed to the fraudulent conduct of an individual not authorized by The Times to act in such a manner, in which case such liability shall not be limited as provided above. (d) No course of dealing on the part of EDC or any failure on the part of EDC to exercise any right shall operate as a waiver of such right or otherwise prejudice EDC's remedies. No right or remedy conferred upon or reserved to EDC is intended to be exclusive of any other right or remedy. Every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as EDC may deem appropriate. The exercise of any right or remedy shall not be construed as an election or a waiver of any -65- other right or remedy. No delay or omission of EDC in exercising any right or remedy occurring upon an Event of Default shall impair any such right or remedy or constitute a waiver of or acquiescence in such Event of Default. (e) The provisions of this Sec.7.2 shall survive the expiration or termination of the Term. Sec.7.3 Termination. If, upon the occurrence of an Event of Default ----------- described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this Agreement, or for any other reason provided for under this Agreement, this Agreement is terminated, EDC agrees that, provided that the Lease remains in full force and effect and no "Event of Default" (as defined in the Lease) shall have occurred and be continuing thereunder, EDC shall undertake the construction of the Interim Car Pound in accordance with the Final Plans and Specifications with such reasonable changes therein as EDC may from time to time and in its reasonable discretion, deem appropriate; provided that such changes shall not increase the amount of time needed to complete the Construction Work. In such circumstances, EDC shall have the right (but shall not be obligated) to assume any Construction Contract made by or on behalf of The Times in any way relating to the Work and to take over and use all or any part or parts of the labor, materials, supplies and equipment contracted for, by, or on behalf of The Times, whether or not previously incorporated into the Construction Site, all in EDC's discretion. To effectuate the provisions of this paragraph, The Times hereby collaterally assigns to EDC all such Construction Contracts, whether presently existing or made in the future, as more particularly set forth in Sec.4.1(d) hereof, and, if EDC -66- exercises its rights under such collateral assignment, EDC shall assume all of the obligations and liabilities of The Times under such Construction Contracts. In connection with any demolition or construction undertaken by EDC pursuant to the provisions of this Sec.7.3, EDC may (i) engage builders, contractors, architects, engineers and others for the purpose of furnishing labor, materials and equipment, (ii) reasonably pay, settle or compromise all bills or claims which may become liens against the Construction Site, or which have been or may be properly incurred, or for the discharge of liens, encumbrances or defects in the title of the Construction Site, and (iii) take such other reasonable action (including the employment of watchmen) to protect the Construction Site. Any costs incurred by EDC in connection with the performance of the above-described work which are in excess of the amount of the Funding and which are necessitated as a result of the earlier termination of this Agreement by reason of The Times's default or The Times's failure to perform its obligations with respect to the construction of the Improvements in accordance with this Agreement and the Final Plans and Specifications shall be paid by the Times. The provisions of this Sec.7.3 shall survive the expiration or termination of the Term. Sec.7.4 Right to Reinstate Agreement. If, after termination of this ------------------------------ Agreement (the "Initial Termination"), EDC fails, in accordance with Sec.7.3 above, to either (i) commence the construction of the Interim Car Pound, or (ii) if The Times had already commenced the construction of the Interim Car Pound pursuant to the terms of this Agreement but such construction was stopped as a result of the termination of this Agreement, recommence the -67- construction of the Interim Car Pound, in either case within three (3) months after the Initial Termination, then provided that The Times shall have given EDC thirty (30) days prior written notice and an opportunity to cure, The Times shall have the right to elect to reinstate this Agreement and construct the Interim Car Pound in accordance with the terms hereof; provided, however, that any costs incurred by The Times in excess of the amount of funds allocated by the City and EDC for the Funding at the time of the termination of this Agreement shall be paid at the sole cost and expense of The Times without any right of reimbursement under this Agreement or any other agreement of The Times with EDC or the City if and to the extent that such excess amounts are incurred by reason of The Times's default or The Times's failure to perform its obligations with respect to the construction of the Improvements in accordance with this Agreement and the Final Plans and Specifications (including, without limitation, construction delays). Upon reinstatement of this Agreement in accordance with this Sec.7.4, all terms and provisions of this Agreement shall be in full force in effect, including without limitation, the provisions of this Article 7 with respect to EDC's right to terminate this Agreement upon the occurrence of a further Event of Default. The provisions of this Sec.7.4 shall survive the Initial Termination but shall not survive any further or subsequent termination. -68- ARTICLE EIGHT - NOTICES ----------------------- Sec.8.1 Notices. All notices under this Agreement shall be in writing and ------- shall be deemed to have been sufficiently given or served for all purposes as of the date when sent by hand, or by a national overnight courier service, or by certified or registered mail, return receipt requested, and addressed as follows (or to such other addresses as may from time to time be designated by EDC or The Times by notice delivered to the other in accordance with this Sec.8.1): (i) if to EDC: New York City Economic Development Corporation 110 William Street New York, N.Y. 10038 Attention: President with a copy via ordinary mail to General Counsel, at the same address and to: New York City Law Department 100 Church Street New York, New York 10007 Attention: Chief, Economic Development Division; (ii) if to The Times: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Solomon B. Watson, IV, Esq. General Counsel -69- with a copy via ordinary mail to David Thurm, Executive Director of Project Development, at the same address, and with a copy in the same manner sent to The Times to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin Polevoy, Esq. Sec.8.2 Disbursement Submissions. All Requisitions and other submissions ------------------------ for disbursements required to be made pursuant to Article Four of this Agreement shall be addressed as directed in Sec.4.3 hereof. -70- ARTICLE NINE - GENERAL CONDITIONS --------------------------------- AND COVENANTS ------------- The following terms, covenants and conditions shall be applicable throughout the Term: Sec.9.1 Conflict of Interests. No member, officer, director or employee --------------------- of EDC or the City, or their designees, consultants or agents; no member of the governing body of the City and no public official of the City who exercises or exercised any functions or responsibilities with respect to the subject matter of this Agreement during his/her tenure, if known to The Times, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Work or in any activity or benefit arising out of or in connection with the performance of the Work. Upon receiving actual notice or knowledge of any of the circumstances specified in the preceding sentence, The Times shall deliver notice to EDC of the circumstances and immediately shall use good faith efforts to cause the Persons affected to terminate their interest in the prohibited contract or property. The Times shall require the Resident Engineer, Construction Manager, Owner's Representative or General Contractor (as the case may be) and the Contractors, subcontractors and materials suppliers to make appropriate representations in writing that they, their employees and principals do not have any conflict of interest prohibited under this Sec.9.1, and to covenant to use good faith efforts to cause the -71- prohibited persons to terminate their interest in the relevant contract or property upon demand by The Times. Sec.9.2 No Liability of Individuals. No officer, employee, director, ----------------------------- member, agent or other person authorized to act on behalf of EDC or the City shall have any personal liability in connection with this Agreement or any default by EDC or the City. Sec.9.3 Anti-Boycott Provisions. ----------------------- (a) The Times agrees that it is not now participating, nor shall it participate during the Term, in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder. (b) Upon the final determination by the United States Department of Commerce or any other agency of the United States as to conviction of The Times for participation in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder, EDC may, at its option, declare a default under this Agreement (which default is subject to cure by The Times in accordance with the terms of this Agreement). (c) The Times shall comply in all respects with the provisions of Sec.6-114 of the Administrative Code of the City and the rules and regulations issued by the Comptroller of the City thereunder. -72- Sec.9.4 Governing Law. The provisions of this Agreement shall be governed ------------- and interpreted in accordance with the law of the State of New York. Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b) ----------------- hereof, EDC shall not be liable for consequential damages under this Agreement to The Times or to any other Person in any matter arising out of the construction of the Improvements. (b) Notwithstanding any provision to the contrary contained in this Agreement, if EDC defaults in the disbursement of the Funding for which it is obligated, pursuant to the terms of this Agreement, to disburse to The Times or in the payment of any other monetary amount owed to The Times pursuant to the provisions of this Agreement and fails to cure such default within thirty (30) days after The Times delivers notice (the "EDC Default Notice") to EDC of such default, or if the moneys in the aggregate sum of approximately $550,000, or such other greater or lesser amount as may be necessary to pay for the costs of the Work and any change order work or other changes to the Final Plans and Specifications or Construction Contracts approved by EDC, shall not be made available to EDC by the City, in whole or in part for any reason, then, provided that The Times proceeds with the construction of the Improvements, for each dollar of Funding not so disbursed or monetary amount not so paid by EDC or made available to EDC by the City, The Times shall have the right to (y) offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Fund Payments due under the Lease, in an amount equal to the Funding not so disbursed by EDC, and (z) offset against -73- future Rental (other than Impositions and College Point Improvement Fund Payments) due under the Lease in an amount equal to any other monetary amount which EDC is obligated to pay under this Agreement and has not so paid, until such time as EDC recommences the disbursement of the Funding or pays such other monetary amount. The Times agrees that the right to an offset against Rental (other than Impositions) and College Point Improvement Fund Payments as hereinabove described is The Times's sole remedy against EDC arising out of the failure of EDC to receive the Funding from the City and The Times shall not commence any action or proceeding against EDC as a result of such failure, except as otherwise provided in this Agreement. (c) In the event that (i) EDC has defaulted in the performance of any obligation on EDC's part to perform under this Agreement other than the disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of the Funding and continues to be in default thereof after the receipt of the EDC Default Notice and expiration of the thirty (30) day cure period provided therein, The Times shall have all of its rights at law and in equity against EDC. (d) Except as otherwise provided in this Agreement; (i) no course of dealing on the part of The Times or any failure on the part of The Times to exercise any right shall operate as a waiver of such right or otherwise prejudice The Times's remedies, (ii) no right or remedy conferred upon or reserved to The Times is intended to be exclusive of any other right or remedy, (iii) every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to -74- time and as often and in such order as The Times may deem appropriate, and (iv) the exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of The Times in exercising any right or remedy occurring upon EDC's failure to disburse the Funding in accordance with this Agreement or to otherwise perform its obligations in accordance with the terms of this Agreement shall impair any such right or remedy or constitute a waiver of or acquiescence in any such failure. Sec.9.6 Amendments. This Agreement may not be amended, waived or ---------- terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the amendment, waiver or termination is sought. Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be ---------------------- binding upon and shall inure to the benefit of EDC and The Times and their respective successors and permitted assigns. Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1 -------------------- hereof, The Times acknowledges that the City capital budget dollars which form the Funding are not and shall not be deemed to be an assignment of any funds received by EDC from the City. The Times confirms that its rights to the Funding arise exclusively under this Agreement. -75- Sec.9.9 Counterparts. This Agreement may be executed in one or more ------------ counterparts which, when taken together, shall constitute one and the same document. Sec.9.10 Interpretation. The provisions of the Lease incorporated by -------------- reference into this Agreement are intended to supplement the other provisions of this Agreement. In the event of any conflict between the Lease provisions and the other provisions of this Agreement, the provisions of the Lease shall control. Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their --------- respective departments, offices, officers, members, directors, employees and agents shall collectively be referred to as "the Public Parties". The Times shall defend, indemnify and hold harmless the Public Parties, from and against any and all claims, damages (including consequential damages awarded to third parties against the Public Parties), judgments, liabilities and causes of action whatsoever to which they may be subject arising out of the acts or omissions of The Times, its Contractors, subcontractors, agents, employees or material suppliers, and any and all Persons, in connection with the performance of the Work, or because of any negligence, fault or default of The Times, its agents, employees, material suppliers or subcontractors. The obligation of The Times to indemnify and hold harmless the Public Parties shall include but not be limited to the payment of any and all costs and reasonable legal fees as may be actually incurred by the Public Parties. Nothing contained herein is intended to create an obligation on The Times to defend, indemnify and hold -76- harmless the Public Parties against those claims, damages, judgments, liabilities and causes of action described in Sec.1.1(c)(5) hereof for which it is determined that EDC or the City or their respective employees, agents or consultants are responsible for. The termination of this Agreement shall not release The Times from any liability to the Public Parties arising out of any act or omission of The Times in connection with this Agreement. (b) EDC shall indemnify and hold harmless The Times Indemnitees from and against any and all claims (including consequential damages awarded to third parties against The Times Indemnitees), damages, judgments, liabilities and causes of action whatsoever to which they may be subject to the extent caused as a result of the negligence or misconduct of EDC or its agents or professional consultants arising out of or in connection with EDC's or its agents' or professional consultants' inspections of the Construction Site or uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC to indemnify and hold harmless The Times Indemnitees pursuant to this Sec.9.11(b) shall include, but not be limited to, the payment of any and all costs and reasonable legal fees as may be actually incurred by The Times Indemnitees in connection with any such claim, damage, judgment, liability or causes of action. The termination of this Agreement shall not release EDC from any liability to The Times Indemnitees described in this Sec.9.11(b). Sec.9.12 No Agency. Neither The Times nor any of its employees, ---------- Contractors or subcontractors is, shall be or shall represent that he, she or it is an agent, servant or employee of EDC or the City by virtue of this Agreement or by virtue of any approval, -77- permit, license, grant, right or authorization given by the EDC or the City or any of their officers, agents or employees. The Times shall be solely responsible for the work, direction, compensation and personal conduct of its officers, agents, employees and subcontractors. Sec.9.13 Venue ----- (a) Any and all claims asserted by or against EDC or by or against The Times arising under this Agreement or related hereto shall be heard and determined either in the courts of the United States ("Federal Courts") located in the City or in the courts of the State of New York ("New York State Courts") located in the City of New York. To effect this agreement and intent, EDC and The Times agree and, where appropriate, shall require each Contractor to agree, as follows: (i) If either Party initiates any action against the other Party in Federal Court or in New York State Court, service of process may be made on The Times either in person, or by registered or certified mail (return receipt requested) addressed to the office of the General Counsel of The Times at the address set forth in Article Eight of this Agreement, or to such other address as The Times may provide to EDC in writing, and service of process may be made on EDC, either in person or by registered or certified mail (return receipt requested) addressed to EDC at its address as set forth in Article Eight of this Agreement, or to such other address as EDC may provide to The Times in writing. (ii) With respect to any action between EDC and The Times in New -78- York State Court, each Party hereby expressly waives and relinquishes any rights it might otherwise have (A) to move to dismiss on grounds of forum non conveniens, (B) to remove to ----- --- ----------- Federal Court wholly outside New York City, and (C) to move for a change of venue to New York State Court outside New York City. (iii) With respect to any action between EDC and The Times in Federal Court located in New York City, each Party expressly waives and relinquishes any right it might otherwise have to move to transfer the action to a Federal Court outside the City of New York. (iv) If either Party commences any action against the other Party in a court located other than in the City and State of New York, then, upon request of the Party against whom the action is brought, the Party bringing the action shall either consent to a transfer of the action to a court of competent jurisdiction located in the City and State of New York or, if the court where the action is initially brought will not or cannot transfer the action, then to dismiss such action without prejudice, and may thereafter reinstitute the action in a court of competent jurisdiction in New York City. Sec.9.14. Investigations; Cooperation. ---------------------------- (a) Definitions. As used in this Sec.9.14: ----------- (i) "Investigation" shall mean any investigation, audit or inquiry conducted by the Department of Investigation with respect to the obtaining and/or -79- performance of the Transaction Documents or any of them, (ii) "Department of Investigation" shall mean the Department of Investigation of the City or any City department or agency succeeding to the functions thereof, (iii) "Commissioner" shall mean the Commissioner or Acting Commissioner of the Department of Investigation, (iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and Economic Development of the City (or the officer of the City succeeding to the functions of that office), (v) "Entity" shall mean any firm, partnership, corporation, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with EDC or the City, (vi) "Member" shall mean any Person associated with another Person or entity as a partner, director, officer, principal or employee, and (vii) "Transaction Documents" shall mean the Lease, this Agreement, Funding Agreement #1, Funding Agreement #2 and Funding Agreement #4. (b) Cooperation with Investigations. Subject to the exclusions set -------------------------------- forth in paragraph (c) of this Sec.9.14, The Times shall during the term of this Agreement: (i) cooperate fully and faithfully, and utilize good faith efforts to cause its Members to cooperate fully and faithfully, with any Investigation; and (ii) report, and utilize its good faith efforts to cause its Members to report, in writing to the Commissioner, any solicitation of which The Times -80- has actual knowledge of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or any other Person, for any purpose relating to the procurement or obtaining and/or performance of any Transaction Document by The Times. (b) Exclusions. The provisions of Sec.9.14(b) above shall not apply: ---------- (i) to any information or document known, prepared or obtained by The Times or its Members (and the sources of such information or documents), that is protected from compelled disclosure by any present or future "Shield Law" or any other statute, constitutional provision, rule, regulation or case law related to the rights of reporters and/or news organizations; (ii) to any Person who refuses to testify based on his or her privilege against self-incrimination after having been given assurances that his or her statement, and any information from such statement, will not be used against such Person in any subsequent criminal proceeding in any forum (provided, however, that any Person given such assurances shall have the right to have the legal sufficiency of such assurances adjudicated by a court of competent jurisdiction as a precondition of the applicability of Sec.9.14(b) to such Person); and (iii) to any construction contract or other agreement (or the obtaining or performance thereof) with parties other than the City or EDC, -81- including without limitation, any contract or agreement being funded through any Transaction Document. (d) Hearing. If The Times or any Member of The Times refuses to ------- testify in an Investigation and, in connection with such failure to testify, the Commissioner determines that The Times has failed to cooperate in the Investigation in violation of the provisions of Sec.9.14(b) hereof, then the Commissioner may request the Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5) days written notice to The Times, to determine if any penalties should be imposed for The Times's failure to so cooperate in accordance with this Sec.9.14. (e) Adjournments of Hearing ----------------------- (i) The Times shall have the right to require that the Hearing be adjourned for a period of not more than thirty (30) days. (ii) The Deputy Mayor may grant other adjournments of the Hearing, in the exercise of his or her reasonable discretion; provided however, that in the case of an adjournment occasioned by The Times's failure to appear, the Deputy Mayor may, if he or she determines that there was no reasonable cause for the requested adjournment or failure to appear, impose an Interim Penalty. (iii) The City shall not incur any penalty or damages for delay or otherwise occasioned by an adjournment of the Hearing. -82- (f) Penalties. --------- (i) The Deputy Mayor may impose a penalty during an adjournment due to The Times's failure to appear or proceed with the scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim Penalty") of not more than $1,000 per day for each day of such adjournment, provided, however, that such daily penalties shall cease to accrue from and after the date that The Times makes itself available to appear at or proceed with the scheduled Hearing or gives written notice to the Deputy Mayor that it does not intend to appear at or proceed with the scheduled Hearing, in which event the Deputy Mayor shall have the right to continue the Hearing and reach a determination without The Times's participation. (ii) If, after the Hearing, the Deputy Mayor determines that The Times failed to cooperate in the Investigation in violation of this Sec.9.14, and The Times fails to commence to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, the Deputy Mayor may: (A) impose a penalty ("Final Penalty") which may not, in conjunction with any Interim Penalty or Final Penalty imposed during the term of this Agreement under this Agreement and/or during the term of the Lease with respect to any other -83- Transaction Document, exceed $500,000 in the aggregate during the term of the Lease; and/or (B) disqualify The Times, for a period not to exceed five (5) years, from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license with or from EDC or the City, other than as contemplated in the Transaction Documents. Notwithstanding anything to the contrary contained herein, in the event that The Times is found after the Hearing to have failed to cooperate in the Investigation, but nonetheless is not subjected to a Final Penalty because The Times commences to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, The Times shall be liable for the cost of conducting such Hearing in an amount not to exceed $5,000. (g) Criteria for Determination. The Deputy Mayor shall consider and -------------------------- address in reaching his or her determination and in assessing an appropriate Interim Penalty, Final Penalty, and/or disqualification, the factors in clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if relevant and appropriate, the criteria established in clauses (iii) and (iv) of this Sec.9.14(g), in addition to any other information which may be relevant and appropriate: (i) The Times's good faith endeavors or lack thereof to cooperate fully and faithfully with the Investigation, including but not limited to the discipline, -84- discharge or disassociation of any Person failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other Members, agents, assignees or fiduciaries whose testimony is sought (the Deputy Mayor shall take into account whether the discipline, discharge or disassociation of any Persons failing to testify would violate any union or other contract), (ii) the relationship of the Person who refused to testify to The Times, including, but not limited to, whether the Person whose testimony is sought has an ownership interest in The Times and/or the degree of authority and responsibility the Person has within The Times, (iii) The nexus of the testimony sought to The Times and the Transaction Documents, and/or (iv) the effect a penalty may have on an unaffiliated and unrelated party or Entity that has a significant interest in The Times, provided that (x) such unrelated party or Entity has given actual notice to the Commissioner or EDC upon the acquisition of the interest, or (y) at the Hearing such unrelated party or Entity gives notice and proves that such significant interest was previously acquired; under either circumstance, such unrelated party or Entity must present evidence at the Hearing demonstrating the potential adverse impact a penalty will have on such party or Entity. -85- (h) Payment of Penalties. Any Interim or Final Penalty hereunder --------------------- shall, upon imposition thereof, be applied to reduce the aggregate of Offset Amounts (as such term is defined in the Lease) then available to The times under Article 4 of the Lease and the balance, if any, shall be paid promptly as additional Rental, or at the landlord under the Lease's option, such balance shall be applied to reduce EDC's obligations with respect to any undisbursed Funding. (i) Exclusive Remedy. Notwithstanding anything to the contrary ----------------- contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall be the sole and exclusive remedies available to EDC in the event that The Times breaches any of its obligations under this Sec.9.14, and no other remedies, including, without limitation, the remedies set forth elsewhere in this Agreement for defaults by The Times in the performance of its obligations under this Agreement, shall be applicable to a breach by The Times of any of its obligations under this Sec.9.14. (j) Right to Dispute Determinations of Deputy Mayor. Nothing ------------------------------------------------------ contained herein shall be construed to limit in any manner whatsoever The Times's right or ability to challenge or seek to enjoin, overturn, set aside or modify any action taken, determination made or penalty imposed by the Deputy Mayor pursuant to the provisions of this Sec.9.14. (k) Concurrent Lease Obligation. The obligations of The Times under ---------------------------- this Sec.9.14 constitute a portion of the obligations of The Times under Article 40A of the Lease, and nothing contained herein shall be construed as expanding, enlarging or increasing in any way, or as being separate from or in addition to, the obligations and liabilities of The Times -86- pursuant to Article 40A of the Lease. Sec.9.15. Intentionally Omitted. Sec.9.16 Maximum Interest Rate --------------------- In the event that any interest payable under this Agreement shall be deemed to exceed the maximum rate permitted by law, then the amount of interest to be paid shall be the maximum rate so permitted. Sec.9.17 Captions -------- The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. Sec.9.18 Gender, Etc. ----------- The gender used in this Agreement shall be deemed to refer to the masculine, feminine, or neuter gender, as the context or the identity of the persons being referred to may require. The singular shall include the plural and vice versa as the context may dictate. Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without ------------------ the prior written consent of The Times, except that EDC shall have the right, upon ten (10) Business Days prior written notice, to assign this Agreement and/or EDC's rights under this -87- Agreement, without any further consent on the part of The Times, to the City. Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees ---------------------------------- that all non-monetary obligations set forth in this Agreement as being obligations of The Times shall apply only to, and be performed by, The New York Times Newspaper Division of The New York Times Company (the "Newspaper Division") and its employees and agents, and EDC shall look solely to the Newspaper Division for the performance of such non-monetary obligations; provided, however, that any default by the Newspaper Division in the performance of such non-monetary obligations shall be treated with the same force and effect pursuant to the applicable provisions of this Agreement as if such default had been committed by The Times. -88- ARTICLE TEN - AGREEMENT OF THE CITY ----------------------------------- Sec.10.1 City's Agreement to Fund EDC. The City, by executing this ------------------------------- Agreement as it effects this Article Ten only, (i) acknowledges that it is becoming a signatory to this Agreement as a material inducement to The Times to enter into this Agreement, (ii) warrants and represents that the Consolidated Contract is in full force and effect and legally binding upon the City; and (iii) covenants and agrees to provide EDC with City capital budget funds in such amounts and at such times as will permit EDC to comply with its obligations to disburse the Funding pursuant to the provisions of this Agreement, without regard to whether the Consolidated Contract is then in full force and effect or whether EDC is in compliance with the terms thereof. Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation --------------------------- Counsel (addressed to The Times) to the effect that this Agreement is legal, valid and binding upon the City with respect to the provisions of this Article Ten in the form attached hereto as Appendix K, is being delivered to The Times concurrently herewith. Sec.10.3 The Times's Rights Against the City. In the event that the City ------------------------------------ has defaulted in the performance of any obligation of the City pursuant to this Article Ten and continues to be in default thereof after notice from The Times and a thirty (30) day period to cure, The Times shall have all of its rights at law and in equity against the City. -89- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: /s/ Carl Weisbrod --------------------- Title: President --------------------- THE NEW YORK TIMES COMPANY By: /s/ Katharine P. Darrow --------------------- Title: Senior Vice President --------------------- THE CITY, BY SIGNING IN THE PLACE PROVIDED BELOW, AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLE TEN HEREOF: THE CITY OF NEW YORK By: /s/ Barry F. Sullivan ____________________________ APPROVED AS TO FORM: By: /s/ ____________________________ Acting Corporation Counsel -90- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Carl Weisbrod, to me known, who, being by me duly sworn, did depose and say that s/he resides at 110 William St., NY, NY; that s/he is the President of New York City Economic Development Corporation, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation. Colleen B. McHale ---------------------------- Notary Public COLLEEN B. McHALE Commissioner of Deeds City of New York - No. 5-1201 Certificate Filed in Richmond County Commission Expires Oct. 1, 1994 STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Katharine Darrow, to me known, who, being by me duly sworn, did depose and say that s/he resides at 16 Garden Place, Brooklyn, NY; that s/he is the Senior Vice President of New York Times Company, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation. Beverly Sturr ---------------------------- Notary Public BEVERLY STURR Notary Public, State of New York No. 31-5014766 Qualified in New York County Commission Expires July 6, 1995 -91- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Barry F. Sullivan, to me known, who, being by me duly sworn, did depose and say that s/he resides at c/o City Hall, NY, NY; that s/he is the Deputy Mayor of The City of New York, the same person who executed the foregoing instrument; and that s/he acknowledged that s/he signed her/his name thereto on behalf of The City of New York and pursuant to the authority vested in her/him. Colleen B. McHale ---------------------------- Notary Public COLLEEN B. McHALE Commissioner of Deeds City of New York - No. 5-1201 Certificate Filed in Richmond County Commission Expires Oct. 1, 1994 -92- EX-10.12 10 FUNDING AGREEMENT #4 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION and THE NEW YORK TIMES COMPANY Dated as of December 15, 1993 Relative to the reconstruction of the Whitestone Expressway Service Road from 20th Avenue to Linden Place in the College Point Industrial Park in the Borough of Queens TABLE OF CONTENTS Page PREAMBLE 1 DEFINITIONS 4 ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT AND CONTRACT REQUIREMENTS Sec.1.1 General Provisions and Provisions Regarding Design and Construction 18 Sec.1.2 Procurement of Bids, Services and Goods 24 Sec.1.3 Liaison to EDC 35 ARTICLE TWO THE FUNDING Sec.2.1 Determination of Total Reimbursement Amount; Reallocation of Funding from Funding Agreement #1 to this Agreement 36 Sec.2.2 Agreement to Fund 39 Sec.2.3 Disbursements 39 Sec.2.4 Funding of Costs of Changes 41 ARTICLE THREE THE TERM Sec.3.1 Term 43 ARTICLE FOUR CONDITIONS FOR DISBURSEMENT Sec.4.1 Initial Submissions by The Times 44 Sec.4.2 Documentation for Disbursements on Account of Eligible Costs 45 Sec.4.3 Direction of Submissions 49 Sec.4.4 Failure to Make Submissions on a Timely Basis 49 -i- Page ARTICLE FIVE REPRESENTATIONS OF THE TIMES Sec.5.1 Organization; Standing 50 Sec.5.2 Intentionally Omitted 50 Sec.5.3 Conflict, etc. under Other Documents 50 Sec.5.4 No Litigation 51 Sec.5.5 Nonrecourse 51 ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC Sec.5A.1 Organization; Standing 52 Sec.5A.2 Due Authorization; Enforceable Obligations 52 ARTICLE SIX COVENANTS Sec.6.1 Requisitions Update The Time's Representations 53 Sec.6.2 Compliance with Other Agreements and Law; Legal Status 53 Sec.6.3 Maintenance of and Compliance with Insurance Requirements 53 Sec.6.4 Maintenance of Office 54 Sec.6.5 Compliance with Applicable Law 54 Sec.6.6 Assignment 55 Sec.6.7 Maintenance of Records 56 Sec.6.8 Intentionally Omitted 56 Sec.6.9 Due Application of Funding Proceeds 56 Sec.6.10 Defects; Non-Conforming Work 57 Sec.6.11 Participation by Women and Minority Owned Businesses 57 Sec.6.12 No Liens 60 Sec.6.13 Intentionally Omitted 60 Sec.6.14 Intentionally Omitted 61 Sec.6.15 Intentionally Omitted 61 Sec.6.16 MacBride Principles 61 -ii- Page Sec.6.17 No Waiver of Compliance 61 ARTICLE SEVEN DEFAULT AND TERMINATION Sec.7.1 Events of Default 63 Sec.7.2 Default Remedies; Exculpation 64 Sec.7.3 Termination 67 ARTICLE EIGHT NOTICES Sec.8.1 Notice 70 Sec.8.2 Disbursement Submissions 71 ARTICLE NINE GENERAL CONDITIONS AND COVENANTS Sec.9.1 Conflict of Interests 72 Sec.9.2 No Liability of Individuals 73 Sec.9.3 Anti-Boycott Provisions 73 Sec.9.4 Governing Law 74 Sec.9.5 Liability of EDC 74 Sec.9.6 Amendments 76 Sec.9.7 Successors and Assigns 76 Sec.9.8 Assignment of Funds 76 Sec.9.9 Counterparts 76 Sec.9.10 Interpretation 76 Sec.9.11 Indemnity 77 Sec.9.12 No Agency 78 Sec.9.13 Venue 78 Sec.9.14 Investigations; Cooperation 80 Sec.9.15 Intentionally Omitted 88 Sec.9.16 Maximum Interest Rate 88 Sec.9.17 Captions 88 Sec.9.18 Gender, Etc. 88 Sec.9.19 Assignment by EDC 88 Sec.9.20 Obligations of Newspaper Division 89 -iii- Page ARTICLE TEN AGREEMENT OF THE CITY Sec.10.1 City's Agreement to Fund EDC 90 Sec.10.2 Valid Agreement of the City 90 Sec.10.3 The Times's Rights Against the City 90 Appendix A - Premises Appendix B - Whitestone Road Appendix C - Contractor's Insurance Requirements Appendix C-1 - Consultant's Insurance Requirements Appendix D - The Times's Certificate of Good Standing Appendix E - EDC's Legal Opinion Appendix F - EDC's Secretary's Certificate Appendix G - Equal Employment Requirements Appendix H - Employment Report Appendix I - Intentionally Omitted Appendix J - MacBride Principles Rider Appendix K - Corporation Counsel's Legal Opinion Exhibit A - Illustrative Scope of Work Exhibit B - Form List of Contractors Exhibit C - Investigation Forms Exhibit D - Intentionally Omitted Exhibit E - Form Legal Opinion Exhibit F - Form Certificate of Specimen Signature Exhibit G - AIA Forms Exhibit H - W\MBE Plan Exhibit H-1 - Form Expedited Certification Affidavit Exhibit I - Form Certification to be Attached to Requisition -iv- FUNDING AGREEMENT #4 dated as of December 15, 1993 between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having its principal office at 110 William Street, New York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York State corporation, having its principal office at 229 West 43rd Street, New York, New York 10036. PREAMBLE: WITNESSETH WHEREAS: A: The City of New York (the "City"), a municipal corporation of the State of New York, is the owner in fee of certain real property identified, as of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44, Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street and 139th Street, on the Tax Map for the Borough of Queens, in the County of Queens, City and State of New York, and assigned new tentative tax block and lot numbers Block 4282, Lot -1- 100 for future identification, as such property is more particularly described in Appendix A attached hereto and made a part hereof (the "Premises); and B: The City, as landlord, and EDC, as tenant, entered into a lease dated as of the date hereof, which lease was assigned by EDC to The Times pursuant to an Assignment and Assumption of Lease with Consent dated as of the date hereof (the lease as so assigned, and as the same may hereafter be amended, is hereinafter referred to as the "Lease"), demising the Premises for the Project (as hereinafter defined), and for which Lease EDC will act as the City's managing agent pursuant to Article 42 of the Lease; and C: EDC and The Times entered into a funding agreement dated as of the date hereof, which provides for the funding to The Times of City capital budget dollars necessary to pay for certain site preparation work required in connection with the construction of the Project (such funding agreement, together with any amendments that may be made thereto, is hereinafter collectively referred to as "Funding Agreement #1"); and D: In connection with the Lease, The Times has the option to perform the work necessary to reconstruct, in accordance with New York City Department of Transportation standards, on behalf of the City, the Whitestone Expressway Service Road between 20th Avenue and Linden Place (the "Whitestone Road"), a City street running along the easterly side of the Premises and along the easterly side of the premises adjacent to the Premises currently owned by the United States Postal Service (the "Construction Site"), as such street is more particularly depicted in Appendix B attached hereto (the "Improvements"); and -2- E: The construction of the Improvements is a necessary prerequisite element to the completion of the Project; and F: If The Times elects to reconstruct the Whitestone Road in accordance with its option, EDC and the City will make available to The Times a portion of the City capital budget funds made available under Funding Agreement #1, to pay for costs incurred by The Times in connection with the performance of the Work (as hereinafter defined); and G: The City and EDC have entered into an Amended and Restated Contract dated as of June 30, 1993, as amended (the "Consolidated Contract") pursuant to which the City will provide EDC with City capital budget funds for use in connection with the construction of the Project in accordance with Funding Agreement #1, a portion of which such funds (as more particularly set forth herein), in an amount not to exceed $3,750,000 (the "Funding"), may be reallocated hereunder for use in connection with the reconstruction of the Whitestone Road, and pursuant to which EDC is authorized to contract with The Times to perform the Work; and H: The Times, independently, and not as agent of the City or EDC, has agreed that if it exercises its option to reconstruct the Whitestone Road it will perform, or cause the performance of, the Work; and I: In furtherance of its obligations under the Consolidated Contract and its corporate purpose of fostering economic development in the City, EDC has agreed, subject to the terms, conditions and limitations set forth herein, to disburse to The Times the -3- Funding, in an amount not to exceed $3,750,000, for the purpose of financing the Eligible Costs of the Work. NOW, THEREFORE, EDC and The Times covenant and agree as follows: DEFINITIONS ----------- As used in this Funding Agreement, the following initially capitalized terms shall have the respective meanings indicated opposite each of them: "Actual Road Reconstruction Commencement Date" The date on which The Times actually commences the reconstruction of the Whitestone Road. "Affiliate" Any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, The Times. For purposes hereof, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of The Times through the ownership of voting securities, by contract, or otherwise. Ownership of or by The Times includes beneficial ownership effected by ownership of intermediate entities. An "Affiliate" of a Person other than The Times shall be determined using the same standard of control and ownership set forth herein with respect to The Times. Unless the context otherwise requires, any reference to an "Affiliate" in this Agreement shall be deemed to refer to an Affiliate of The Times. "Agreement" This Funding Agreement, and any amendments thereto. "Anticipated Road Reconstruction Commencement Date" As defined in Sec.1.1(b). -4- "Approvals" As defined in Sec.1.1(c)(2). "Builder's Pavement Plan" The plans and drawings with respect to improvements to sidewalks, curbs and roadways within the public right-of-way adjacent to the Premises, approved by DOT's Office of Builder's Pavement and submitted by The Times to the City's Department of Buildings as part of its plans for the construction of the Project. "Builder's Pavement Plan Work" As defined in Sec.1.1(a). "Business Day" Any day other than a Saturday, Sunday, legal holiday, or a day on which banking institutions in New York City are authorized by law or executive order to close. "Certificate of Occupancy" The earlier to be issued by the City's Department of Buildings (or its successor in function) of a temporary or permanent certificate of occupancy or its equivalent with respect to the Project. "City" As defined in Recital A of the Preamble. "College Point Improvement Fund Payments" As defined in Section 3.09(b)(iii) of the Lease. "Commissioner" As defined in Sec.9.14(a). "Completed Cover Sheet" As defined in Sec.4.1. "Consolidated Contract" As defined in Recital G of the Preamble. "Construction Contract" (A) Any agreement executed by The Times and the Resident Engineer (as hereinafter defined), if any, with respect to construction management and supervision services and engineering services; or (B) any contract between The Times and the General Contractor (as hereinafter defined), if any, -5- under which the General Contractor is obligated to perform the Construction Work; or (C) any contract with a contractor for performance of all or any part of the Construction Work, whether entered into by The Times, the General Contractor, the Resident Engineer, or the Construction Manager (as hereinafter defined). "Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction manager selected by The Times, reasonably approved by EDC, responsible solely for the performance of construction management services and/or construction contract administration services and supervision services relative to the Construction Work. "Construction Site" As defined in Recital D of the Preamble. "Construction Work" The portion of the Work the costs of which are considered hard costs of construction under normal industry standards, excluding the services of the Resident Engineer and the services of the Construction Manager, if any. "Consultant" Any professional engineer, engineering firm, architectural firm with engineering expertise, combined practice or association licensed in the State of New York, and any special consultants (e.g. soil consultants) selected by The Times and reasonably approved by EDC, to perform the Design Services (as hereinafter defined). "Contract Price" The contract price (or the aggregate of the contract prices) for the performance of the Construction work, as set forth in the bid or bids of the Contractor or Contractors selected by The Times in accordance with Sec.1.2(c) hereof, to perform the Construction Work. "Contractor" Any contractor under a Construction Contract. "DBS" As defined in Sec.6.11(b). "DEP" The City's Department of Environmental Protection, or its successor in function. -6- "Department of Investigation" As defined in Sec.9.14(a). "Deputy Mayor" As defined in Sec.9.14(a). "Design Contract" Any agreement executed by The Times and the Consultant with respect to the performance of Design Services in connection with the design of the Improvements. "Design Costs" The costs paid or payable by The Times to the Consultant for the performance of Design Services, as set forth in clause (iii) of the definition of Eligible Costs. "Design Services" The design and engineering services relative to the Work and performed by the Consultant. "DLS" The Division of Labor Services of the City's Department of Business Services, or its successor in function. "DOT" The City's Department of Transportation, or its successor in function. "EDC" As defined in the first paragraph of this Agreement. "EDC Default Notice" As defined in Sec.9.5(b). "EDC Disagreement Notice" As defined in Sec.2.1(a). "EDC Disagreement Notice Dispute Period" As defined in Sec.2.1(a). "Eligible Costs" (i) The costs of the Work paid or payable by The Times to Contractors (other than the Resident Engineer), subcontractors, suppliers and material persons for (A) labor and materials utilized in connection with the Construction Work, and (B) for labor, services, facilities or equipment customarily considered as "general conditions" items which are reasonably required by or consequent upon the Construction Work, including (x) all costs of contract bonds and of insurance that may be required -7- or necessary during the period of and for performance of the Construction Work, (y) all costs of obtaining and maintaining the guaranties, if any, and (z) all costs of obtaining and maintaining the security services required by Sec.1.1(e)(ii) of this Agreement that are obtained by Contractors and subcontractors (other than the Resident Engineer) and are included in their respective contract prices together with those costs described in (i)(A) above, (ii)(A) the costs paid or payable by The Times to the Resident Engineer, including the Resident Engineer's fee, those costs incurred by the Resident Engineer for the performance of construction management and supervision services and/or engineering services, and all "general condition" items and other reimbursable expenses (including without limitation, the preparation of a Final Survey (as hereinafter defined)), and (B) costs paid or payable by The Times to the Consultant with respect to Design Services (the aggregate of the costs set forth in clauses (ii)(A) and (ii)(B) above are hereinafter referred to as "Soft Costs"), in an amount not to exceed twenty-three percent (23%) of the Hard Costs (as hereinafter defined); provided, however that the amount of Soft Costs includable in Eligible Costs may exceed twenty-three percent (23%) of the Hard Costs if such greater amount is commercially reasonable taking into account the nature and the scope of the Work and only if such greater amount is approved by EDC, which approval shall not be unreasonably withheld or delayed after the submission by The Times to EDC of all information reasonably requested by EDC to establish the scope of such Soft Costs and the basis for their exceeding twenty-three percent (23%) of the Hard Costs. In no event shall Eligible Costs include the costs or fees paid or payable by The Times to the Construction Manager. "Entity" As defined in Sec.9.14(a). "Events of Default" Those events set forth in Sec.7.1. "Federal Courts" As defined in Sec.9.13. -8- "Final Acceptance Date" Means the date on which all of the following shall have occurred: (i) the Resident Engineer or the Construction Manager shall have certified to EDC that the Construction Work (including all Substantial Completion Punch List (as hereinafter defined) items) is complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, and the Requirements, and (ii) EDC and/or its professional consultants shall have inspected the Construction Site, within thirty (30) days after EDC's receipt from the Resident Engineer or the Construction Manager of the certification described in clause (i) above, and certified, by the later to occur of the expiration of such thirty (30) day period or five (5) days after such inspection was completed, to The Times that, in its opinion, the Improvements are complete (except to an immaterial extent) in accordance with the Final Plans and Specifications, which certification shall not be unreasonably withheld; provided, however, that if EDC and/or its professional consultants shall have failed to inspect the Construction Site within the thirty (30) day period described above and to give the certification within the time period described above, EDC shall be deemed to have inspected the Construction Site and certified to The Times that the Improvements are complete. "Final Completion" Means that each of the following shall have occurred: (A) the Resident Engineer or the Construction Manager shall have issued to EDC a "Certificate of Payment", or certified its approval of a "Certificate of Payment" issued to EDC, in either case stating that it has examined the Final Plans and Specifications and, in its best professional judgment, after diligent inquiry, and on the basis of its observations and inspections, the Construction Work has been completed (except to an immaterial extent) in accordance with the Final Plans and Specifications and all Requirements and that the final payment is due to The Times; (B) the Reviewing Parties (i) shall have made a final inspection of the Construction Site upon receipt of -9- notice from The Times that the Construction Work is Substantially Completed (as hereinafter defined) and (ii) shall have certified the Construction Work, including all items on the Final Punch List, as being acceptable and complete; (C) The Times shall have submitted to EDC a final accounting, containing an affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the Construction Work for which The Times may in any way be responsible (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), either have been paid or otherwise satisfied or will be paid simultaneously with or immediately after the receipt of the proceeds of any disbursement of the Funding for which Final Completion is required; (D) The Times shall have submitted to EDC receipts, releases and waivers of liens, or such other documentation establishing payment or satisfaction of all obligations arising out of the Construction Work performed, or caused to be performed, by The Times (other than items, if any, disputed in good faith by The Times that are not being paid for by the Funding including, without limitation, the Construction Manager's costs and fees), to the extent and in such form as may be reasonably designated by EDC. If any lien for any work done by or on behalf of The Times has attached to the funds forming a part of the Funding, The Times shall have either removed or bonded such lien; (E) The Times shall have delivered to EDC two sets of the "as-built" drawings, in form customarily prepared for road construction (which "as-built" drawings shall include the Final Survey), for the Improvements, as the same may have been amended, modified or supplemented, and such other documentation as may be required by the Reviewing Parties or as may be necessary to evidence that the Construction Work performed, or caused to be -10- performed, by The Times was completed in accordance with the Requirements. These drawings shall accurately show any deviations from the Final Plans and Specifications and the exact locations of any underground or otherwise concealed utilities and appurtenances (if, and to the extent, that such utilities and appurtenances were installed, adjusted or protected in the course of the performance of the Construction Work) as referenced to permanent surface improvements; and (F) receipt by EDC of notification from DLS that all labor requirements applicable to the Work have been fulfilled. "Final Completion Notice" As defined in Sec.2.1(a). "Final Completion Notice Dispute Period" As defined in Sec.2.1(a). "Final Penalty" As defined in Sec.9.14(f)(ii). "Final Plans and Specifications" The completed final drawings and plans and specifications for the reconstruction of the Whitestone Road, as developed by The Times and delivered by The Times to EDC in accordance with Sec.1.1(c)(1) hereof, and as such drawings and plans and specifications may be modified or amended from time to time in accordance with Sec.2.4 of this Agreement. "Final Punch List" A statement by the Resident Engineer or the Construction Manager issued after Substantial Completion, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any observable defects and deficiencies, and any other defects or deficiencies of which the Resident Engineer or the Construction Manager have knowledge or of which the Reviewing Parties shall have observed and notified The Times or its Contractors, with respect to the Improvements -11- or at or on the Construction Site including, but not limited to, deficiencies due to non-compliance with Requirements. "Final Survey" The final survey to be prepared by a certified surveyor of curb, gutter and crown elevations in connection with the Whitestone Road. "Funding" As defined in Recital G of the Preamble. "Funding Agreement #1" As defined in Recital C of the Preamble. "Funding Agreement #2" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of City capital budget dollars necessary to pay for the construction of a City sanitary sewer system to service the Premises, as such agreement may be amended from time to time. "Funding Agreement #3" The funding agreement between EDC and The Times dated as of the date hereof which provides for the funding to The Times of funds necessary to pay for the construction of an interim New York City Police Department evidence vehicle facility, as such agreement may be amended from time to time. "General Contractor" The Times's general contractor, if any, reasonably approved by EDC, engaged to perform and manage the Construction Work. "Governmental Authorities" The United States of America, the State of New York, the City and any agency, department, legislative body, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having legal jurisdiction over the Improvements or the Construction Site or any portion thereof or any street, road, avenue, sidewalk or water comprising a part of or immediately adjacent to the Construction Site. "Hard Costs" The aggregate of the costs set forth in clauses (i)(A) and (i)(B) of the definition of Eligible Costs. -12- "Impositions" As defined in Section 3.09(b)(i) of the Lease. "Improvements" As defined in Recital D of the Preamble. "Interim Penalty" As defined in Sec.9.14(f)(i). "Investigation" As defined in Sec.9.14(a). "Investigation Forms" As defined in Sec.1.2(d). "Late Charge Rate" The Prime Rate (as hereinafter defined) plus one percent (1%). "Lease" As defined in Recital B of the Preamble. "Material Change" A change to the Final Plans and Specifications which, when aggregated with any previous changes to the Final Plans and Specifications, would increase the Contract Price by more than ten percent (10%). "Members" As defined in Sec.9.14(a). "MBEs" As defined in Sec.6.11(a). "New York State Courts" As defined in Sec.9.13. "Newspaper Division" As defined in Sec.9.20. "Owner's Representative" Any person selected by The Times, reasonably approved by EDC, to act as The Times's representative at the Construction Site and responsible for the supervision of the Construction Work performed by the General Contractor and the other Contractors, subcontractors and material suppliers. "Parties" EDC and The Times. "Person" An individual, corporation, partnership, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency -13- thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing. "Plans and Specifications" The progress drawings and plans and specifications for the reconstruction of the Whitestone Road, as developed by The Times and/or its Consultant, and approved by the Reviewing Parties in accordance with Sec.1.1(c)(1) hereof. "Premises" As defined in Recital A of the Preamble. "Prime Rate" The base or prime rate of interest from time to time charged by Chemical Bank, as such rate is published by The New York Times newspaper or by ------------------- The Wall Street Journal if such rate is not ------------------------- published by The New York Times at the time in ------------------- question. "Project" The construction on the Premises of a facility of no less than approximately 360,000 square feet for the printing, production and distribution of newspapers and, at the sole discretion of The Times, other such buildings and improvements on the Premises as are permitted pursuant to the terms and provisions of the Lease, including without limiting the generality of the foregoing, the expansion of the printing facility to a size greater than 360,000 square feet. "Prohibited Person" As defined in Sec.1.2(c)(4). "Proposed Bidders List" As defined in Sec.1.2(c)(1). "Public Parties" As defined in Sec.9.11(a). "Rental" As defined in Article 1 of the Lease. "Requirements" Any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders, resolutions and requirements of all Governmental Authorities currently in force or hereafter adopted applicable to the Construction Site and/or the Work. "Requisition Report" As defined in Sec.4.2(a)(ii). "Resident Engineer" The Consultant or any other professional engineer, engineering firm, architectural firm with engineering expertise, combined -14- practice or association licensed in the State of New York selected by The Times, reasonably approved by EDC as to the acceptability of such Resident Engineer and as to the scope of work proposed to be performed by such Resident Engineer, to act as resident engineer on behalf of The Times and to perform engineering services and/or construction contract administration and supervision services relative to the Work. The Resident Engineer, if any, shall act on behalf of The Times and shall be separate and apart from any engineer acting on behalf of EDC or the City for any reasons. "Resident Engineer Costs" The costs paid or payable by The Times to the Resident Engineer for the performance of construction management and supervision services and engineering services relative to the Work, as set forth in clause (ii) of the definition of Eligible Costs. "Reviewing Parties" DOT, DEP or their respective designees, including without limitation, their hired consultants, and any other Governmental Authority with jurisdiction over the Work, the Improvements or the Construction Site and responsible for (i) the issuing of permits or approvals with respect to the Improvements, or (ii) ensuring compliance with the Requirements. "Road Election Notice" As defined in Sec.1.1(b). "Scope of Work" As defined in Sec.1.1(a). "Substantial Completion" or "Substantially Complete(d)" Means that the Construction Work shall have been 95% completed in accordance with the Final Plans and Specifications and all Requirements, and the Reviewing Parties are able to inspect the Construction Work and prepare a Final Punch List. "Substantial Completion Date" The date on which the Construction Work shall have been Substantially Completed. -15- "Substantial Completion Punch List" The statement by EDC, issued after inspection of the Construction Site, setting forth a description in reasonable detail of any items to be remedied, corrected or completed in accordance with the Final Plans and Specifications or any defects or deficiencies which EDC shall have noted with respect to the Improvements constructed or caused to be constructed by The Times, including but not limited to, defects or deficiencies due to non- compliance with the Requirements. "Term" As defined in Sec.3.1. "The Times" As defined in the first paragraph of this Agreement. "The Times's Disagreement Notice" As defined in Sec.2.1(a). "The Times Indemnitees" As defined in Sec.9.11(b). "Total Reimbursement Amount" The amount, determined in accordance with the procedure therefor set forth in Sec.2.1(a) hereof, of the total Eligible Costs incurred by The Times in connection with the design and construction of the Improvements, which amount shall constitute the total amount of funds that are to be reallocated from Funding Agreement #1 to this Agreement in accordance with Sec.2.1(b) hereof. "Transaction Documents" As defined in Sec.9.14(a). "Unavoidable Delays" Delays caused by (i) strikes, slowdowns, walkouts, lockouts or other labor troubles, (ii) acts of God, (iii) catastrophic weather conditions, (iv) inability to obtain labor or materials due to labor disputes, (v) court orders enjoining commencement or continuation of the Work, (vi) enemy action, (vii) civil commotion, (viii) shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency, (ix) failure or defect in the supply of electricity, oil, gas or water to the Construction Site provided that such failure or defect is not due to the action or inaction -16- of The Times or its Contractors or subcontractors, (x) fire, (xi) casualty, (xii) the failure of EDC to disburse the Funding or any portion thereof in accordance with the provisions of this Agreement, (xiii) EDC's unreasonable delay in granting any approvals required under this Agreement, or (xiv) other causes not within The Times's control that is causing a delay in The Times's performance of its construction obligations hereunder. The Times shall use its good faith efforts to notify EDC in writing, stating when such delay commenced, not later than ten (10) Business Days after The Times has first received knowledge of the occurrence of any of the foregoing conditions; provided, however, that The Times's failure to notify EDC of the occurrence of an event constituting an Unavoidable Delay shall not affect the commencement of such delay or otherwise result in the loss of any benefit or right granted to The Times under this Agreement. "WBEs" As defined in Sec.6.11(a). "W/MBEs" As defined in Sec.6.11(a). "W/MBE Participation Dollar Value" As defined in Sec.6.11(c). "W/MBE Percentage" As defined in Sec.6.11(c). "W/MBE Plan" As defined in Sec.6.11(a)-14. "Whitestone Road" As defined in Recital D of the Preamble. "Work" Work undertaken by or on behalf of The Times for the purpose of designing and constructing the Improvements all in accordance with this Agreement and the Final Plans and Specifications. -17- ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND ---------------------------------------------------- CONTRACT REQUIREMENTS --------------------- Sec.1.1 General Provisions and Provisions Regarding Design and --------------------------------------------------------------- Construction. - ------------- (a) The Times's Option to Perform the Work. Pursuant to Article 46 of --------------------------------------- the Lease, The Times shall, in its sole discretion, have the right (but not the obligation, except as hereinafter set forth), subject to such conditions set forth in Sec.1.1(b) below, to elect to reconstruct, on behalf of the City, the Whitestone Road substantially in accordance with a scope of work (the "Scope of Work") prepared by The Times in its sole discretion, provided, however that EDC shall have the right to comment on such Scope of Work (provided that such comments shall not be binding upon The Times) and further provided that such Scope of Work shall conform to all DOT standards and specifications for the construction of City streets and otherwise be approved by DOT pursuant to DOT's procedures. An illustration of such Scope of Work (which illustration shall not be binding on The Times) is attached hereto as Exhibit A. Notwithstanding anything to the contrary contained herein, The Times acknowledges and agrees that if it does not elect to exercise its option to reconstruct the Whitestone Road in accordance with the foregoing, The Times shall nevertheless have the obligation to reconstruct and/or repair such portion of the Whitestone Road as is required pursuant to its Builder's Pavement Plan (the "Builder's Pavement Plan Work") and, in such event, shall not be entitled to the disbursement of the Funding in connection with such Builder's Pavement Plan Work. If The Times elects to reconstruct the Whitestone Road, -18- (i) The Times shall have the right to include the Builder's Pavement Plan Work within the Scope of Work, and (ii) The Times shall perform the Work related to such reconstruction, and EDC shall disburse to The Times the Funding or any portion thereof allocable to the Work being performed by The Times, on the terms and conditions contained in this Agreement. (b) Notice of Election to Proceed. If The Times elects to exercise its ------------------------------ right to reconstruct the Whitestone Road on behalf of the City in accordance with Sec.1.1(a) hereof, The Times shall make such election by giving written notice thereof (the "Road Election Notice") to EDC no later than the date which is six (6) months prior to the approximate date on which The Times anticipates that it will commence the reconstruction of the Whitestone Road (the "Anticipated Road Reconstruction Commencement Date"); provided, however, that The Times shall have the right to revoke such election at any time prior to the Actual Road Reconstruction Commencement Date. If The Times elects to revoke its election in accordance with the foregoing sentence, The Times shall effect such revocation by giving EDC written notice of such election and upon EDC's receipt of such notification of election to revoke, this Agreement shall terminate and thereafter neither Party shall have any rights against or obligations to the other Party by reason of this Agreement except as otherwise specifically set forth in this Agreement. The Times acknowledges that if it revokes its election to reconstruct the Whitestone Road in accordance with the foregoing, in no event shall EDC be required to disburse the Funding or any portion thereof to The Times for Work performed, or caused to be performed, by The Times prior to such -19- revocation (including, without limitation, Design Services). The Road Election Notice shall specify (i) the Consultant that The Times has selected, or intends to select, with respect to the design of the Whitestone Road, (ii) the Anticipated Road Reconstruction Commencement Date, (iii) the Resident Engineer, Construction Manager, or Owner's Representative that The Times intends to select with respect to the reconstruction of the Whitestone Road, and (iv) the Person or Persons on The Times's staff selected by The Times to be responsible for communicating with EDC regarding the performance and completion of the Work in connection with the reconstruction of the Whitestone Road. (c) Plans and Specifications. (1) If the Times elects to exercise its ------------------------- right to reconstruct the Whitestone Road, The Times shall design the Whitestone Road and prepare the Plans and Specifications in connection therewith in accordance with the Scope of Work prepared in accordance with Sec.1.1(a) hereof. The Plans and Specifications shall be subject to the review and approval of the Reviewing Parties and The Times shall deliver to EDC all Plans and Specifications submitted to the Reviewing Parties for their review and approval and EDC shall have the right to comment on such Plans and Specifications (provided that such comments by EDC shall not be binding on The Times). The Plans and Specifications shall describe all the Work, whether or not paid in whole, in part or at all with the Funding. (2) The Times shall obtain, or shall cause its Contractors to obtain, all appropriate permits, consents, certificates, licenses, authorizations and approvals necessary for the construction of the Improvements (the "Approvals"). Upon request of The Times, EDC shall assist The Times or its Contractors in obtaining such Approvals. The cost of -20- obtaining such permits, consents, certificates, licenses, authorizations and approvals shall be considered Eligible Costs payable with the Funding if such costs are included in The Times's Contractors' contract price. (3) Any changes required to be made to the Final Plans and Specifications shall be made in accordance with the terms and conditions set forth in Sec.2.4 hereof. (d) Right to Proceed. The Times may only proceed with the ------------------- Construction Work if and only if (i) all Approvals necessary for the construction of the Improvements have been obtained, (ii) certificates, in form and substance reasonably satisfactory to EDC, evidencing the insurance policies referred to in Appendix C and Appendix C-1 (as applicable), naming the City and EDC as additional insureds, providing not less than thirty (30) days notice of cancellation to the City and EDC and, if the certificates of insurance described above do not indicate thereon the receipt of due and payable premiums, proof of payment of such premiums, shall have been obtained and delivered to EDC, and (iii) all other Requirements have been complied with, it being expressly agreed that The Times shall bear the entire risk of constructing the Improvements in variance with the Final Plans and Specifications and that EDC will not be obligated to disburse any of the Funding before all Approvals have been obtained and all conditions to disbursement under this Agreement have been satisfied. The fact that EDC has approved the Final Plans and Specifications, or any other action or failure to act by EDC or the Reviewing Parties, shall in no way constitute a representation that all applicable Requirements have been complied with or relieve The Times of its obligations to abide by the terms of this Agreement. -21- (e) Performance of the Work. (i) The Times covenants and agrees to ------------------------- cause the Improvements to be constructed in accordance with the requirements of this Agreement and with the Final Plans and Specifications and all applicable Requirements. The Times shall obtain all final acceptances from the appropriate Reviewing Parties as necessary to complete the Improvements. (ii) At all times during the performance of the Construction Work, The Times shall maintain, or cause to be maintained, the Construction Site in a neat and orderly condition and shall protect the Construction Site against deterioration, loss, damage or theft. (f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof, The Times shall permit EDC and the Reviewing Parties, their agents, employees and/or professional consultants to make inspections of the Construction Site during normal business hours or otherwise when Construction Work is in progress, at reasonable times and upon reasonable notice to The Times and in accordance with applicable safety standards, (i) with respect to EDC, as it deems necessary to observe compliance with and performance under this Agreement, and (ii) with respect to the Reviewing Parties, as are normally made by the City and its agencies in the course of a project or projects of similar nature and magnitude to the Work. Such inspection shall not require the uncovering of any work unless specifically requested in writing by EDC or the Reviewing Parties. If EDC requested the uncovering of the work and the work that has been uncovered is determined to have been performed in accordance with the Final Plans and Specifications and the Requirements, EDC shall pay the costs associated with the uncovering requested by EDC; if the work that has been -22- uncovered is determined to be unacceptable because it was not performed in accordance with the Final Plans and Specifications or the Requirements, The Times shall pay the costs associated with the uncovering. EDC shall use its good faith efforts to cause such inspection to be made in a manner that will not interfere with the progress of the Work. A representative of The Times shall, if available, accompany the person or persons making such inspection on behalf of EDC or the Reviewing Parties, unless The Times elects to forego such right. The Times shall cause a complete set of the Final Plans and Specifications, as then in effect, and shop drawings to be maintained at the Construction Site or at the Premises for inspection by EDC, the Reviewing Parties and each of their respective employees, consultants and agents. The omission or failure of EDC or the Reviewing Parties or any representative thereof to make such inspections, to identify any defects or to notify The Times of any observable defects or any non-compliance with the terms of this Agreement or the Final Plans and Specifications, shall in no way relieve The Times of its obligations under this Agreement or impose any liability upon EDC, the Reviewing Parties, or any of their respective employees, consultants and agents. (g) Completion. ----------- (1) The Times shall notify EDC of the date the Construction Work shall have been Substantially Completed. EDC shall have ten (10) Business Days after the giving of the notice referred to in the preceding sentence to inspect the Improvements and notify The Times in writing of its acceptance of The Times's determination of Substantial Completion or to notify The Times in writing of specific objections which it believes renders the -23- Construction Work not Substantially Completed and prepare the Substantial Completion Punch List, if necessary, and deliver the same to The Times within such ten (10) Business Day period. The Times shall Substantially Complete those items of the Work, if any, specified in EDC's notice as not Substantially Complete or otherwise in the Substantial Completion Punch List. (2) After EDC's acceptance of The Times's determination of Substantial Completion, The Times shall cause the Resident Engineer or the Construction Manager to prepare a Final Punch List. Such Final Punch List shall be prepared after inspection of the substantially completed Improvements by the Reviewing Parties and shall incorporate those items determined by such Reviewing Parties to be necessary for Final Completion of the Construction Work. (3) The Times shall use its good faith efforts to cause Final Completion to occur as soon as reasonably possible after Substantial Completion and, to the extent reasonably achievable, shall complete all items on the Final Punch List within ninety (90) days after the Substantial Completion Date. Sec.1.2 Procurement of Bids, Services and Goods --------------------------------------- (a)(1) If The Times elects to reconstruct the Whitestone Road as provided in Sec.1.1(a) hereof, The Times shall enter into a Construction Contract or Construction Contracts and a Design Contract or Design Contracts independently and not as agent of the City or EDC for the performance of the Construction Work in accordance with the Final -24- Plans and Specifications and for the performance of the Design Services, so as to facilitate the construction of the Improvements. (2) Any Design Contract entered into by The Times in accordance herewith shall provide solely for the performance of Design Services in connection with the reconstruction of the Whitestone Road and shall be separate and apart from any other contract entered into by The Times for the performance of design services in connection with the Project. (3) Any Construction Contract entered into by The Times (and any bid packages prepared by The Times for the bid of the Construction Work) shall instruct the Contractors (or bidders, as appropriate) as follows: title to the Construction Site and the Improvements shall be and vest in the City. Materials to be incorporated into the Construction Site shall, effective upon their purchase and at all times thereafter, constitute the property of the City and upon incorporation of such materials into the Construction Site title thereto shall be and continue in the City. In accordance therewith, purchases of tangible personal property by the Contractors arising in connection with the construction of the Improvements are exempt from the payment of certain sales and compensating use taxes to the extent that such property (i) is used to alter, maintain or improve, and becomes an integral component part of, the Construction Site, or (ii) remains tangible personal property and is installed on the Construction Site. This exemption does not apply to tools, machinery, equipment or other property leased by The Times or its Contractors, or to supplies, materials or other property which are consumed in the course of construction or for any other reason not incorporated into the Construction Site. -25- (b) The Times shall have the right to enter into Design Contracts with a Person or Persons selected by The Times in its sole discretion; provided however, that any such Person shall be subject to EDC's prior written approval solely as to whether such Person is a Prohibited Person. Prior to letting any Design Contract, The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a statement as to the Person or Persons with whom The Times intends to enter into a Design Contract. EDC shall advise The Times, within fifteen (15) Business Days after receipt of such statement, whether any such Person or Persons is a Prohibited Person. If EDC fails to so advise The Times within such fifteen (15) Business Day period as to whether any such Person or Persons is a Prohibited Person, such Person shall be deemed not to be a Prohibited Person. Notwithstanding anything to the contrary contained herein, once The Times has entered into a Design Contract or Design Contracts with a Person or Persons based on EDC's advice that such Person or Persons are not Prohibited Persons (or EDC's failure to notify The Times within the fifteen (15) Business Day period described above that such Person or Persons are Prohibited Persons), The Times shall in no event be required to terminate such Design Contract or Design Contracts even if EDC thereafter determines that such Person or Persons were, or had become, Prohibited Persons and the rights of The Times and EDC under this Agreement shall be unaffected and remain in full force and effect as if such Person or Persons were not, or had not become, Prohibited Persons. (c)(1) Prior to letting any Construction Contract to be entered into directly by The Times or by The Times's Construction Manager, if any, The Times shall submit to EDC a -26- list of proposed bidders and, to the extent known to The Times, identify the principals of the bidders (the "Proposed Bidders List"). EDC shall advise The Times in writing within fifteen (15) Business Days after receipt of the Proposed Bidders List, as to which bidders on the Proposed Bidders List are acceptable or unacceptable and, if any bidders are unacceptable, the specific reasons therefor. EDC may also advise The Times, within such fifteen (15) Business Day Period, of additional bidders that it proposes that The Times include on the Proposed Bidders List. If EDC fails to provide such advice within such fifteen (15) Business Day Period, all of the bidders on the Proposed Bidders List shall be deemed approved. For purposes hereof, any bidder other than a bidder that is a Prohibited Person or has received a negative contractor evaluation from EDC or the City within the five (5) years prior to the date of the Proposed Bidders List, shall be deemed acceptable to EDC. The Times shall obtain proposals from at least six (6) qualified bidders from the list of acceptable bidders and if EDC has proposed additional bidders to be included on the Proposed Bidders List as provided above, at least three (3) of such six (6) qualified bidders shall be bidders proposed by EDC (or if EDC has proposed less than three (3) bidders, then the qualified bidders shall include all the bidders proposed by EDC). The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a bid summary, analysis and statement as to which bidder The Times intends to select, which statement shall be certified by The Times and give specific reasons for The Times's preference. The Times shall not accept a bid which is not the lowest bid without EDC's prior written approval. EDC, in its sole discretion, may (but is not obligated to) -27- either accept a bid which is not the lowest bid if necessary to enable The Times to achieve the total W/MBE Participation Dollar Value and the total W/MBE Percentage or, in the alternative, reduce the W/MBE Participation Dollar Value and the W/MBE Percentage in an amount equal to the portion of the W/MBE Participation Dollar Value and the W/MBE Percentage that would have been achieved by accepting such bid. EDC's approval of a bid which is not the lowest bid shall be deemed given if not denied in writing within ten (10) Business Days of The Times's written request therefor. (2) EDC reserves the right, at any time prior to The Times's acceptance of a bid in accordance with Sec.1.2(c)(1) above, to withdraw its prior approval of the bidder chosen in the event that EDC shall learn that the bidder shall have committed any act, or if the bidder shall become the subject of any investigation or legal proceeding, either or both of which would have disqualified the bidder from receiving EDC's original approval. Nothing contained in Sec.1.2(c)(1) or this Sec.1.2(c)(2) shall limit The Times's right to reject all bids in its sole discretion. (3) Notwithstanding anything to the contrary contained herein, in the event that EDC (A) does not approve any bidder selected by The Times, or (B) withdraws its prior approval of any bidder chosen in accordance with Sec.1.2(c)(1) above, then The Times shall have the right to revoke its election to reconstruct the Whitestone Road. Upon The Times's revocation of its election and reimbursement to EDC of the Funding previously disbursed as provided in the foregoing sentence, this Agreement shall terminate and thereafter neither -28- Party shall have any rights against or obligations to the other Party by reason of this Agreement, except as otherwise specifically set forth in this Agreement. (4) For purposes hereof, the term "Prohibited Person" shall mean: (i) Any Person (A) that is in default or in breach, beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that is in default or in breach, beyond any applicable grace period, of its obligations under any material written agreement with EDC or Landlord, unless, such default or breach has been waived in writing by EDC or Landlord, as the case may be. (ii) Any Person (A) that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure. -29- (iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof. (iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended. (v) Any Person that is in default in the payment to the City of any real estate taxes, sewer rents or water charges totalling more than $10,000, (or any person that directly controls, is controlled by, or is under common control with a Person in such default), unless such default is then being contested in good faith in accordance with the law. (vi) Any Person (A) that has owned at any time during the three (3) years immediately preceding a determination of whether such Person is a -30- Prohibited Person any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City or (B) that, directly or indirectly controls, is controlled by, or is under common control with such a Person. (d) The Times shall provide EDC with a list of all Contractors, other than suppliers, whose Contract amount totals more than $100,000, on the form attached hereto as Exhibit B. The Times will furnish each Contractor, other than a supplier, whose Contract amount totals more than $100,000, with a subcontractor questionnaire in the form attached hereto as Exhibit C and/or such other qualification and background investigation form(s) as may be used by the City at such time ( collectively, "Investigation Forms") provided by EDC to The Times, and shall use its good faith efforts to cause each such Contractor to fill out and complete the Investigation Forms in a timely fashion but in no event later than the completion of the work performed by such Contractor pursuant to its Contract. (e) All Construction Contracts, in order to be eligible for disbursement under this Agreement, shall provide, in substance: (1) that the Contractor shall obtain and maintain comprehensive general liability insurance and other insurance in the amounts and in accordance with the applicable provisions set forth in Appendix C; -31- (2) that neither the Contractor nor any of its employees or subcontractors is or shall be deemed to be an agent, servant, employee or contractor of the City or EDC by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or other authorization given the City, EDC or any of their respective officers, officials, directors, members, agents or employees; and that the Contractor shall not commence any legal proceeding against the City or EDC to recover any compensation which may be payable under the Construction Contract; (3) that the Contractor is solely responsible for the work, direction, compensation and personal conduct of its employees and subcontractors; (4) that the Contractor shall indemnify and hold harmless the City, EDC and their respective agents, officers, directors, officials, members and employees from any and all claims, judgments or liabilities to which they may be subject because of any act or omission of the Contractor or its respective agents, officers, directors, employees or subcontractors arising out of or in connection with the pertinent Construction Contract or because of any negligence, fault or default of the Contractor or its respective agents, employees, officers, directors or subcontractors (as the case may be); (5) that the Contractor shall maintain accurate, readily auditable records and accounts with supporting documentation, in accordance with Accounting Principles, of all work performed, and receipts and expenditures made, in -32- connection with the pertinent Construction Contract, and that the Contractor shall make such records and accounts available to EDC, the City and each of their respective agents and employees, for inspection and audit at reasonable times and upon reasonable written notice for a period of six (6) years after completion of the pertinent Construction Contract; (6) provisions incorporating the requirements of Sec.6.5(a) (Compliance with Applicable Law) and Sec.9.1 (Conflict of Interests); and (7) that the Contractor represents and warrants, and shall cause its subcontractors and material suppliers to represent and warrant, that state and local sales tax has been excluded from the contract price, to the extent applicable; provided, however, that the Contractor and its subcontractors and material suppliers shall be responsible for and pay any and all applicable taxes, including sales and use taxes, imposed upon leased tools, machinery, equipment, and upon all supplies and materials and other property which are consumed in the course of construction or for any other reasons not incorporated into the Construction Site. (f) All Design Contracts, in order to be eligible for disbursement under this Agreement, shall: (1) provide, in substance that the Consultant shall obtain and maintain comprehensive general liability insurance and other insurance in the amounts -33- and in accordance with the applicable provisions set forth in Appendix C-1; and (2) contain substantially the same provisions as the provisions described in Sec.1.2(e)(2), (3), (4), (5) and (6) hereof. (g) Any proposed changes or amendments to a Construction Contract or Design Contract which affect the provisions to be included in such Construction Contract pursuant to Sec.1.2(e) hereof, or the provisions to be included in such Design Contracts pursuant to Sec.1.2(f) hereof, shall not be made unless approved in writing by EDC, which approval shall not be unreasonably withheld and shall be deemed given unless denied in writing within five (5) Business Days after EDC's receipt of The Times's written request for such approval, and no Funding shall be disbursed in respect of any Work affected by any such change or amendment unless approved in writing or deemed approved by EDC. (h) In addition to the provisions required to be included in the Construction Contracts and Design Contracts pursuant to Sec.1.2(e) and Sec.1.2(f) hereof, The Times may include in the Construction Contracts (and the bid packages therefor) and the Design Contracts such other provisions as The Times deems necessary to incorporate the requirements of this Agreement therein, including without limitation, that the Contractor or Consultant shall not receive payment under its Construction Contract or Design Contract, as applicable, until all the conditions for disbursement described in Article 4 hereof have been satisfied and The Times has received payment of the Funding from EDC under this Agreement. -34- Sec.1.3 Liaison to EDC -------------- The Times agrees that it will notify EDC, in writing, prior to the commencement of any Work, of the Person or Persons on The Times's staff primarily responsible to communicate with EDC regarding the performance of the Work, to be available to the extent reasonably required by EDC in connection with this Agreement. The Times further agrees to use its good faith efforts to notify EDC in writing of any intended substitution of said Person or Persons at least five (5) days prior to the date such substitution will take effect but in any event will notify EDC in writing of any such substitutions on the day such substitution will take effect. -35- ARTICLE TWO - THE FUNDING ------------------------- Sec.2.1 Determination of Total Reimbursement Amount; Reallocation of ------------------------------------------------------------------ Funding from Funding Agreement #1 to this Agreement. (a) Upon Final - --------------------------------------------------------- Completion of the Improvements, The Times shall submit to EDC by hand delivery, registered or certified mail, or national overnight courier service, a written notice (the "Final Completion Notice") stating that the Improvements have been completed in accordance with the terms of this Agreement and setting forth the total amount of Eligible Costs incurred by The Times in connection with the design and construction of the Improvements. The Final Completion Notice shall be accompanied by such documents and materials, more particularly set forth in Article 4 hereof, not already submitted to EDC in accordance with Article 4 hereof, in support of its statement of Eligible Costs incurred (the "Final Requisition Report"). EDC shall advise The Times, within fifteen (15) days after receipt of the Final Completion Notice (the "Final Completion Notice Dispute Period"), that it agrees and accepts the Times's determination of Eligible Costs incurred or that it disagrees with such determination of Eligible Costs incurred. If EDC fails to notify The Times, within the Final Completion Notice Dispute Period, of its agreement and acceptance of or disagreement with The Times's determination, such determination shall be deemed accepted by EDC and such amount shall be deemed to be the Total Reimbursement Amount. If EDC accepts The Times's determination of the total amount of Eligible Costs incurred in connection with the design and construction of the Improvements, such amount shall be deemed to be the Total -36- Reimbursement Amount. If EDC disagrees with such determination, EDC will notify The Times in writing, within the fifteen (15) day time period specified herein, of such disagreement, specifying in a detailed manner the reasons for such disagreement and what it believes to be the total amount of Eligible Costs incurred by The Times in connection with the design and construction of the Improvements ("EDC's Disagreement Notice"). The Times shall advise EDC, within fifteen (15) days after receipt of EDC's Disagreement Notice (the "EDC Disagreement Notice Dispute Period"), that it agrees and accepts EDC's determination or that it disagrees with EDC's determination. If The Times accepts EDC's determination of the total amount of Eligible Costs incurred in connection with the design and construction of the Improvements, such amount shall be deemed to be the Total Reimbursement Amount. If The Times's disagrees with such determination, The Times will notify EDC in writing, within the EDC Disagreement Notice Dispute Period, of such disagreement specifying in a detailed manner the reasons for such disagreement ("The Times's Disagreement Notice"). If The Times fails to notify EDC within the EDC Disagreement Notice Dispute Period of its agreement and acceptance or disagreement of EDC's determination, such determination shall be deemed accepted by The Times and such amount shall be deemed to be the Total Reimbursement Amount. Upon EDC's receipt of The Times's Disagreement Notice, the Parties shall attempt to arrive at a mutually acceptable determination of the amount of the total Eligible Costs incurred by The Times in connection with the design and construction of the Improvements, provided however that that The Times shall have the right to submit to arbitration, in accordance with the -37- provisions of Article 34 of the Lease, the proper amount of the Total Reimbursement Amount, taking into account the terms and conditions of this Agreement and the Lease. The determination in such arbitration of the Total Reimbursement Amount shall be conclusive and binding upon the parties hereto. (b) Within four (4) months after the Total Reimbursement Amount is established in accordance with Sec.2.1(a) hereof, EDC shall obtain such approvals and perform such acts as may be necessary to cause a portion of the funds allocated under Funding Agreement #1 to be reallocated under this Agreement. The Times understands that the total amount of funds that shall be so reallocated shall be equal to the Total Reimbursement Amount, provided that in no event shall such amount exceed $3,750,000. The Times further understands and acknowledges that (i) the funds to be reallocated from Funding Agreement #1 to this Agreement shall consist solely of such funds allocated under Funding Agreement #1 to pay for Phase Five Construction (as such term is defined in Funding Agreement #1) and that The Times shall have no right to seek the reallocation of funds from Funding Agreement #1 to this Agreement from any other source of funds under Funding Agreement #1 other than that allocated for Phase Five Construction, and (ii) once the reallocation of funds from Funding Agreement #1 to this Agreement occurs, The Times shall have no further right to seek any additional reallocations. (c) Notwithstanding anything to the contrary contained herein, in no event shall EDC be required to disburse the Funding to The Times if the Total Reimbursement Amount is $650,000 or less. -38- Sec.2.2 Agreement to Fund. (a) Subject to the terms, conditions, -------------------- representations and warranties contained in this Agreement, EDC agrees to disburse to The Times, in an amount not to exceed the Funding, and The Times agrees to accept the Funding, for performance by The Times of the Work. The Times agrees to utilize the Funding solely in connection with the Work. Subject to EDC's remedies upon an Event of Default and except as otherwise provided herein, the Funding, once disbursed under this Agreement, shall not be subject to any reimbursement whatsoever to EDC. (b) The Times acknowledges that neither EDC nor the City has represented or warranted that the Funding will be sufficient to pay for the entire cost of the Work. The Times agree that The Times will be solely responsible to the extent that the Eligible Costs of the Work exceed the amount of the Funding for any reason. The Times acknowledges that the Funding is not a fee or other compensation earned by or paid to The Times. Sec.2.3 Disbursements. (a) The Times agrees to accept the Funding and to -------------- utilize the proceeds thereof solely in connection with the Work. After the Final Completion of the Work, disbursements shall be made by EDC to The Times as follows: (1) With respect to Hard Costs, after receipt by EDC of all items required by Sec.4.2 hereof, equal to the product of (i) the measurements of the quantities of items attributable to the Construction Work (as certified by the Resident Engineer or the Construction Manager) and (ii) the unit price for each such item; -39- (2) With respect to Resident Engineer Costs, after receipt by EDC of all items required by Sec.4.2 hereof, equal to the Resident Engineer Costs calculated based on the Resident Engineer's fee schedule attached to the Construction Contract with respect to the Resident Engineer; (3) Intentionally omitted; (4) With respect to Design Costs, after receipt by EDC of all items required by Sec.4.2 hereof, equal to the Design Costs calculated based on the Consultant's fee schedule attached to the Design Contract with respect to the Consultant. (b) Intentionally omitted. (c) All disbursements shall be made by check at the principal office of EDC, or at such other place within the City of New York as EDC may designate. Disbursement requests shall be submitted within the time periods and in the manner provided therefor in Article 4. (d) No portion of the Funding shall be advanced for materials not incorporated into the Construction Site. (e) Disbursements of the Funding shall be made by EDC within four (4) months after all of the following occurs: (1) EDC receives from The Times a Final Completion Notice, together with a Final Requisition Report and all such other documentation as may be required or reasonably requested by EDC, and (ii) the Total Reimbursement Amount shall have been established in accordance with Sec.2.1(a) hereof. -40- Sec.2.4 Funding of Costs of Changes --------------------------- (a) Notwithstanding any provision to the contrary contained in this Agreement, EDC shall not disburse increased Funding on account of Eligible Costs covered by changes to the Final Plans and Specifications except as expressly provided in this Sec.2.4. The Eligible Costs incurred in connection with all changes made in accordance with Sec.2.4(b) hereof shall be paid for with the Funding. (b) Changes. Except as limited in this Sec.2.4, EDC shall disburse the -------- Funding on account of (i) each change to the Plans and Specifications that is not a Material Change, provided that the need for such change does not result from or arise out of an error or omission on the part of The Times or an Affiliate, any Contractor or subcontractor, and (ii) each Material Change, provided that, subject to the provisions of Sec.2.4(c) hereof, EDC shall not be required to disburse the Funding with respect to any material change which EDC, acting in its reasonable discretion, has disapproved and (y) the need for such change does not result from or arise out of an error or omission on the part of The Times or an Affiliate, any Contractor or subcontractor. (c) Arbitration of Material Changes. The Times shall have the right to -------------------------------- submit to arbitration, in accordance with the provisions of Article 34 of the Lease and substantially in accordance with the procedure set forth in Sec.2.1 hereof, whether EDC has acted reasonably in disapproving any Material Change. The aribtration conducted pursuant to this Sec.2.4(c) shall determine the portion, if any, of such Material Change that should be included -41- in the Total Reimbursement Amount and such determination shall be binding upon EDC and The Times. -42- ARTICLE THREE - TERM -------------------- Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon ----- the execution of this Agreement by both Parties and the unconditional delivery of this Agreement by each Party to the other and shall expire upon the occurrence of any of the following events: (i) the date on which a Certificate of Occupancy with respect to the Project is issued if The Times fails to deliver to EDC a Road Election Notice prior to such date, (ii) the date on which EDC receives notice from The Times, in accordance with Sec.1.1(b) hereof, of The Times's revocation of its election to reconstruct the Whitestone Road, or (iii) if The Times has delivered to EDC a Road Election Notice and has not revoked such election and has in fact commenced the Construction Work, then upon the complete disbursement by EDC to The Times of all amounts payable to The Times pursuant to the terms of this Agreement, unless sooner terminated by EDC in accordance with this Agreement. All rights, remedies and liabilities arising prior to the termination or expiration of the Term shall survive the date of termination or expiration, as the case may be. -43- ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT ------------------------------------------ Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to --------------------------------- disburse any of the Funding to The Times unless, at any time prior to the Actual Road Reconstruction Commencement Date, EDC shall have received the following documents, together with a cover sheet (a "Completed Cover Sheet") listing the items submitted: (a) a legal opinion by counsel to, or general counsel of, The Times (addressed to EDC) in the form annexed hereto as Exhibit E, to the effect that (I) this Agreement is legal, valid and binding upon and enforceable against The Times in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), and (II) The Times has been duly authorized to execute and deliver this Agreement; (b) a certificate, in the form annexed hereto as Exhibit F, of an authorized officer of The Times certifying the specimen signature of each officer, director or agent of The Times authorized to deliver Requisition Reports under this Agreement; (c) copies of any then executed Construction Contract(s) and Design Contracts, containing all the provisions required pursuant to Sec.1.2(e) and Sec.1.2(f) hereof; (d) a collateral assignment by The Times to EDC of The Times's right, title and interest to the Construction Contracts and Design Contracts, which collateral -44- assignment shall be effective only upon an Event of Default and the termination of this Agreement; and (e) as described in Sec.6.12 hereof, a completed and duly executed W/MBE Plan in the form annexed hereto as Exhibit H. Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC ------------------------------------------------------------- shall not be obligated to disburse the Funding unless the following conditions, in addition to the conditions described in Sec.4.1, shall have been satisfied: (a) The following documents, in form and substance reasonably satisfactory to EDC, together with a Completed Cover Sheet, shall, except to the extent previously submitted by The Times, be delivered to EDC once a month commencing on the Actual Road Reconstruction Commencement Date and continuing until Final Completion: (i) copies of all Approvals necessary to lawfully perform the Construction Work for which the Funding is being sought in accordance with the Final Plans and Specifications; (ii) a report executed and certified by an authorized representative of The Times (and addressed to EDC), setting forth: (x) the amount of funds requested by Contractors and Consultants to be paid in connection with the performance of the Work for such monthly reporting period, (y) an itemization of the Eligible Costs for which such payment is sought, and (z) either (I) a list of Contractors whose work is covered by the report, indicating the amount -45- requested with respect to each such Construction Contract, or (II) that the work covered by the report is Design Services and indicating the amount requested with respect to such Design Services, together with a certification by such authorized representative that the Eligible Costs described in accordance with (y) above have not previously been paid by The Times to such Contractors or Consultants. The report shall be accompanied by the certification described in Sec.6.1 hereof and copies of (I) all Construction Contracts and/or Design Contracts on account of which payment is being sought that have not been previously delivered, containing all the provisions required pursuant to Sec.1.2(e) and Sec.1.2(f) hereof (or for Construction Contracts and Design Contracts that have been previously delivered, a statement to that effect and copies of any amendments thereof); (II) as applicable, requisitions or applications for payment by the Consultant, Resident Engineer or the Construction Manager to The Times and with regard to Design Costs, supporting bills, invoices or other documentation reflecting such Eligible Costs; (III) as applicable, a copy of an "Application and Certificate for Payment", substantially in the forms annexed hereto as Exhibit G, completed and executed by the Resident Engineer or the Construction Manager with respect to all work performed by Contractor(s) and covered by The Times's report, together with a statement of the Resident Engineer or the Construction Manager addressed to EDC stating the quantities of materials -46- installed with respect to the Construction Work completed as of the date of the report and that, to the Resident Engineer's or the Construction Manager's knowledge, the Construction Work performed by the Contractor(s) and covered by the report has been performed to the Resident Engineer's or the Construction Manager's reasonable satisfaction substantially in accordance with the Final Plans and Specifications; (IV) any change order requests made by the Contractors to The Times during the reporting period; and (V) at the request of EDC, in connection with each payment request other than the first payment request made by Contractors, subcontractors and suppliers of The Times, partial releases of liens from such Contractors, subcontractors and suppliers in respect to Construction Work performed under a Construction Contract or subcontract and for which the Eligible Costs in connection therewith that are to be reimbursed with the Funding have been paid for by The Times pursuant to a prior requisition (the items described in this paragraph (ii), collectively, the "Requisition Report"); (iii) such additional documents, data or information reasonably requested by EDC with respect to the Construction Site and the Work or in support of the Requisition Report, including without limitation, documents as would customarily be required by City agencies engaged in projects similar in scope to the Work such as trade payment breakdowns in support of all -47- subcontractors' requisitions to the Resident Engineer, Construction Manager or General Contractor (as the case may be), if any, invoices, and receipts; and (iv) a written statement by DLS certifying that each Contractor performing Construction Work has complied with the City's equal employment requirements under mayoral Executive Order No. 50 (April 25, 1980), as amended, if applicable, or evidence from The Times or DLS that Executive Order No. 50 or its successor does not apply, it being understood that such written statement or other satisfaction by DLS for each Contractor only needs to be submitted at the time of the submission of the first requisition covering such Contractor's work and it being further understood that, notwithstanding anything to the contrary contained herein, for so long as New York State Labor Law Sec.220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to trainees, the trainee requirements of Executive Order No. 50 shall not be applicable to the Construction Work, the Contractors and the subcontractors and the Contractors and the subcontractors shall in no event be deemed to be in noncompliance with Executive Order No. 50 due to noncompliance with such trainee requirements. (b) As of the date of the Requisition Report, (i) the representations and warranties made in Article Five shall be correct and complete and (ii) there shall exist no unbonded public improvement lien relating to the Funding; provided, however, that in the -48- event there exists an unbonded public improvement lien relating to the Funding, EDC shall continue to disburse to The Times those portions of the Funding which are otherwise payable hereunder reduced only by the amount of such unbounded lien. Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this ------------------------- Article Four shall be directed to EDC's Vice President for Construction. Sec.4.4 Failure to Make Submissions on a Timely Basis. Nothing contained ----------------------------------------------- herein shall be construed to cause The Times to forfeit all or any portion of the Funding as the result of (i) its failure to make any submission required hereunder on a timely basis, or (ii) its failure to provide EDC with the documents described in this Article 4 (subject to the obligation of The Times to provide all such documents to qualify for the disbursement of the Funding); provided, however, that if The Times fails to make submissions on a timely basis or fails to make complete submissions, then EDC shall have an additional period of time as may be reasonable, beyond the Final Completion Notice Dispute Period, to review the Final Requisition Report and the Final Completion Notice and advise The Times, in accordance with Sec.2.1(a) hereof, of its agreement and acceptance of, or disagreement with, The Times's determination of Eligible Costs incurred in connection with the design and construction of the Improvements. -49- ARTICLE FIVE - REPRESENTATIONS OF THE TIMES ------------------------------------------- To induce EDC to disburse the Funding, The Times represents and warrants as follows: Sec.5.1 Organization; Standing. The Times is a corporation duly organized ----------------------- and validly existing under the laws of the State of New York and has all requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. A copy of The Times's certificate of good standing from the Secretary of State of the State of New York is attached hereto as Appendix D, and hereby made a part hereof. Sec.5.2 Intentionally omitted. Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery ------------------------------------- of this Agreement by The Times is not, and the performance of this Agreement by The Times will not be, effectively prohibited or prevented by, or in breach of (i) the certificate of incorporation or by-laws of The Times, or (ii) to the best of The Times's knowledge, any presently existing or effective law, judgment, order, writ, injunction, decree, rule or regulation of any court or Governmental Authority applicable to The Times, or (iii) any agreement, instrument or undertaking which is binding on The Times. -50- Sec.5.4 No Litigation. As of the date of this Agreement there are no -------------- suits or proceedings pending or, to the best of The Times's knowledge, threatened against The Times which would materially affect the construction of the Improvements, the consummation of the transactions contemplated by this Agreement, or the full performance of the obligations of The Times under this Agreement. Sec.5.5 Nonrecourse. From and after Final Completion, EDC and the City ------------ shall have no recourse against The Times with respect to the Work. For the one year period commencing with Final Completion, The Times shall have no recourse against EDC or the City, with respect to the Work. -51- ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC ------------------------------------------------------ To induce The Times to enter into this Agreement and perform the Work, EDC represents and warrants as follows: Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation, ------------------------ organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation Laws and has all the requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement. Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has -------------------------------------------- been duly authorized, executed and delivered by EDC and constitutes a legally binding obligation of EDC enforceable in accordance with its terms. A legal opinion by general counsel of EDC (addressed to The Times) providing that this Agreement is legal, valid and binding upon and enforceable against EDC in accordance with its terms (subject, as to enforceability, to principles of equity and applicable bankruptcy, insolvency and other laws affecting the rights of creditors generally), is attached hereto as Appendix E and hereby made a part hereof. A certificate of the Secretary of EDC, dated as of the date of this Agreement, certifying to the adoption of resolutions by the Board of Directors of EDC authorizing the execution and delivery of this Agreement by EDC is attached hereto as Appendix F and hereby made a part hereof. -52- ARTICLE SIX ----------- COVENANTS --------- Sec.6.1 Requisitions Update The Times's Representations. The Times --------------------------------------------------- covenants that each Requisition Report presented to EDC under Article Four shall be accompanied by a completed certification, in the form attached hereto as Exhibit I. Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the ------------------------------------------------------- Term, The Times shall: (a) comply with all of the terms, conditions and covenants now or in the future binding upon or applicable to The Times under this Agreement; (b) do all things necessary to maintain and keep in full force and effect its existence, rights and privileges under the laws of the State of New York; and (c) comply with, and do all things reasonably necessary to cause the Work to be performed in compliance with all Requirements applicable to the Work and/or the Construction Site. Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The ------------------------------------------------------------ Times shall maintain or cause to be maintained the insurance coverage described in Appendix C and Appendix C-1 attached hereto. The Times shall comply with all of the applicable -53- provisions of such insurance policies. Nothing contained in this Sec.6.3 is intended to confer any rights upon any third party. Sec.6.4 Maintenance of Office. The Times will maintain an office in the ---------------------- City of New York where notices with respect to this Agreement may be delivered to it and inspections and audits in accordance with Sec.6.7 may be conducted. Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or ------------------------------- cause to be included, the following requirements, as applicable, in all Construction Contracts and all Design Contracts, and shall require, or cause to be required, all subcontracts with respect to the Construction Work and the Design Services to include the same requirements, so that the Contractor(s) and any subcontractors and the Consultant(s) and any subconsultants shall agree, in substance: (i) to comply with (1) the applicable provisions of City and New York State equal employment and affirmative action laws applicable to construction contractors and non-construction contractors which are annexed to and made a part of this Agreement as Appendix G (consisting of "Construction Contract Rider" pursuant to mayoral Executive Order No. 50, provided, however that the trainee requirements set forth therein shall be inapplicable for so long as New York State Labor Law Sec. 220 or any successor statute requires contractors performing work on public works projects to pay journey-level wages to -54- trainees), and the filing of any required construction employment reports with the City's Bureau of Labor Services on the forms annexed hereto as Appendix H; (2) New York State Labor Law Sec.220e, and (3) City Administrative Code Sec.6-108; (ii) to comply with the applicable provisions of the New York City Noise Control Code (Administrative Code Sec.24-216, as amended, and related regulations); and (iii) to pay no less than prevailing wage rates and supplemental benefits to laborers, workers and mechanics pursuant to Sec.220(3) of the New York State Labor Law in accordance with the currently scheduled rates, as amended from time to time. (b) The Times shall use its good faith efforts to promptly, diligently and continuously enforce the full and faithful performance by the Contractors and Consultants with whom The Times enters into Construction Contracts and Design Contracts hereof with the provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith efforts to cause such Contractors and Consultants to enforce such compliance by the subcontractors and materials suppliers hired by such Contractors in connection with the Construction Work and by the subconsultants hired by such Consultants in connection with the Design Services. Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall ----------- not assign this Agreement except that The Times may assign this Agreement to an Affiliate without -55- EDC's prior written consent, provided that such Affiliate assumes all the rights and obligations of The Times under this Agreement, and that all the representations, warranties and covenants made by The Times in this Agreement shall be similarly made by such Affiliate, and further provided that the Times provides to EDC a copy of the executed written agreement evidencing such assignment and assumption. Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate, ----------------------- readily auditable records and accounts with supporting documentation, of (i) all of the costs related to the design and construction of the Improvements, (ii) all of its receipts and expenditures in connection with the Funding and with the Work, and (iii) all financial accounts and transactions maintained or undertaken in connection with this Agreement. The Times shall make such records available for inspection and audit at The Times's place of business within New York City by EDC and the City at reasonable times and upon reasonable advance notice. All such records and accounts shall be maintained for a period of six years after termination of this Agreement. The provisions of this Sec.6.7 shall survive the expiration or earlier termination of this Agreement. Sec.6.8 Intentionally omitted. Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and ------------------------------------ hold the proceeds of the Funding (including any insurance proceeds arising out of any casualty -56- affecting property purchased with the Funding) as a trust fund to be applied exclusively for the payment of Eligible Costs (or reimbursement to The Times for the payment of Eligible Costs) in accordance with the terms of this Agreement and shall not use any part of the same for any other purpose. Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of ----------------------------- the Funding shall not constitute a waiver of any default by The Times on account of defective construction work in performance of the Work or deviation from the Final Plans and Specifications. No part of the Funding shall be disbursed for the correction of such non-conforming work unless such non- conforming work was the result of a deviation from the Final Plans and Specifications necessitated due to unexpected field conditions and was performed in accordance with good construction practices and EDC approved (which approval shall not be unreasonably withheld or delayed), in writing, the performance of such work. Sec.6.11 Participation by Women and Minority Owned Businesses ---------------------------------------------------- (a) EDC is committed to maximizing meaningful participation by women- owned business enterprises ("WBEs") and minority-owned business enterprises ("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its contracting opportunities. Based on its review of the scope of the Work and the lists of certified W/MBEs maintained by the interested government entities identified below, EDC estimates that a total aggregate -57- W/MBE percentage of twenty-five percent (25%) can be attained by The Times for the Work. Accordingly, prior to receipt of any disbursements hereunder, The Times shall complete a utilization plan (the "W/MBE Plan"), in the form of Exhibit H attached hereto, describing The Times's plan for participation of W/MBEs in the Work. (b) In order to be considered W/MBEs for purposes of inclusion in the W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE Plan must have received certification, as WBEs and/or MBEs, from the New York City Department of Business Services ("DBS"). Businesses that have been certified as being women or minority owned by the New York State Department of Economic Development or the Port Authority of New York and New Jersey may be eligible to receive expedited certification from DBS, after completing the DBS "Expedited Certification Affidavit" in the form of Exhibit H-1 attached hereto. Each of these entities maintain current lists of certified W/MBEs; The Times is encouraged to contact these entities in order to obtain copies of their current lists of certified W/MBEs who may be qualified to participate, either as Contractors, subcontractors or materials suppliers, in the Work. Together with submission of the W/MBE Plan, The Times shall submit verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan are certified as WBEs and/or MBEs by DBS prior to the award of the contract with respect to such Contractor, subcontractor or material supplier. (c) The Times should use the W/MBE Plan to identify potential W/MBEs that The Times, the Resident Engineer, the Construction Manager or the General Contractor -58- intends to employ as Contractors, subcontractors or materials suppliers. The W/MBE Plan requires the identification of the specific trade and/or the specific material to be supplied by such W/MBEs. The W/MBE Plan requires that the level of participation by W/MBEs be described based on (i) a dollar value estimate of participation by W/MBEs (the "W/MBE Participation Dollar Value") and (ii) the percentage of the total Funding that will be passed on to W/MBEs (the "W/MBE Percentage"). (d) The Times shall not be required to utilize the specific W/MBEs listed in the W/MBE Plan and substitutions may be made; however, The Times shall provide for the participation of W/MBEs in the Work at a level equal to or greater than the total aggregate W/MBE Participation Dollar Value and the total aggregate W/MBE Percentage as each are set forth in the W/MBE Plan. The W/MBE Participation Dollar Value and the W/MBE Percentage recorded on the W/MBE Plan are a part of this Agreement. The Times cannot reduce the W/MBE Participation Dollar Value or the W/MBE Percentage. (e) If The Times breaches the foregoing obligation relating to the participation of W/MBEs in the Work, then, as its sole and exclusive remedy against The Times with respect to such breach, EDC shall be entitled to withhold from disbursement to The Times a portion of the Funding in the amount equal to the difference between (i) the W/MBE Participation Dollar Value set forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value achieved by, and in fact paid to participating W/MBEs by or on behalf of, The Times in respect of the completed Work. No portion whatsoever of any of -59- the Funding that is withheld pursuant to this Sec.6.11(e) shall be charged to the account of any W/MBEs employed in respect of the Work. (f) The Times may substitute other certified W/MBEs for those identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which approval shall not be unreasonably withheld) before being employed, either as Contractors, subcontractors, or as materials suppliers, in respect of the Work. The Times may also add additional W/MBEs to the W/MBE Plan provided that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage falls below that identified in the W/MBE Plan. Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times --------- shall not create, permit or suffer to exist any mortgage, encumbrance, lien, security interest, claim or charge against the Construction Site. (b) The Times will cause the Improvements to be constructed free and clear of liens of mechanics, material persons and suppliers, including public improvement liens, or claims for any such liens subject to The Times's right to cause any such lien to be removed or bonded within sixty (60) days after the placement of such lien. The costs of removing or bonding such lien shall be paid by The Times except if such lien was placed solely as a result of EDC's failure to disburse to The Times the Funding in accordance with this Agreement, in which case EDC shall pay for the costs of removing or bonding such lien. Sec.6.13 Intentionally omitted. -60- Sec.6.14 Intentionally omitted. Sec.6.15 Intentionally omitted. Sec.6.16 MacBride Principles. The Times hereby agrees that with respect -------------------- to any Construction Contract entered into for the performance of the Construction Work and with respect to any Design Contract entered into for the performance of the Design Services, The Times shall (i) include in such Construction Contract and Design Contract the requirements of the MacBride Principles Rider, attached hereto as Appendix J, and shall (ii) require its Contractors and Consultants (A) to comply with applicable covenants and representations set forth in Appendix J, and (B) to cause, as applicable, its contractors, subcontractors, and materials suppliers performing the Construction Work and its subconsultants performing the Design Services, to also comply with the requirements of Appendix J. Notwithstanding anything to the contrary contained herein, the provisions of this Sec.6.16 shall not apply to any contractor, subcontractor, materials supplier, consultant or subconsultant with respect to which there is not another contractor, subcontractor, materials supplier, consultant or subconsultant to perform work or supply materials of comparable quality at a comparable price. Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion ------------------------- of the Funding to The Times shall not constitute a waiver of EDC's right to require compliance -61- with any of the covenants contained in this Article Six or otherwise contained in this Agreement. -62- ARTICLE SEVEN - DEFAULT AND TERMINATION --------------------------------------- Sec.7.1 Events of Default. An "Event of Default" shall exist if any of ------------------ the following shall have occurred: (a) if The Times shall have applied the Funding in violation of the covenant set forth in Sec.6.9 and such misapplication was not corrected within ten (10) Business Days after receipt of written notice thereof; or (b) if The Times fails to duly observe or perform any of the material covenants and agreements contained in this Agreement (other than the covenants contained in Sec.6.9) and if such failure continues for twenty (20) Business Days after receipt of written notice to The Times by EDC specifying with particularity such material default and requiring such material default to be remedied; provided, however, that if because of Unavoidable Delays or if the nature of the default is such that The Times cannot reasonably be expected to cure the same within such period, then such material default shall not be an Event of Default if, within such period (subject to Unavoidable Delays), The Times commences in good faith to cure such material default and (subject to Unavoidable Delays) diligently prosecutes such cure to completion; or (c) if an "Event of Default" (as defined in the Lease) has occurred under the Lease and EDC has taken action to terminate the Lease in accordance with the terms thereof; or (d) if there is any cessation of the Construction Work for any period in excess of ninety (90) successive calendar days after the date upon which the Construction Work shall -63- commence, unless the cessation of the Construction Work shall have been caused by Unavoidable Delays and construction or construction-related activities shall have resumed promptly after the cause of the Unavoidable Delay shall have been removed and shall be diligently pursued (it being understood that during any such cessation of the Construction Work, EDC shall have the right, upon three (3) days prior written notice to The Times, to enter upon the Construction Site for the purpose of protecting the Construction Site against deterioration, loss, damage or theft if the Contractor or Contractors required, pursuant to its respective Construction Contract(s), to provide such services has ceased providing the services); or (e) if any representation or warranty by The Times contained in this Agreement shall be materially false when made or reaffirmed and such materially false representation or warranty materially adversely affects The Times's ability to enter into this Agreement and perform the Work in accordance with the terms hereof. Sec.7.2 Default Remedies; Exculpation. ------------------------------ (a) Upon an Event of Default, EDC may exercise any right or remedy permitted to it by law, in equity, or under this Agreement, including, without limitation, the right to obtain restitution of any portion of the Funding which is applied by The Times, The Times's employees, agents or contractors in violation of Sec.6.9, with interest from the date of EDC's disbursement at the Late Charge Rate. Without limiting the generality of the foregoing, upon an Event of Default, EDC shall have the right to elect to terminate this Agreement -64- (reserving, however, all remedies provided in this Article Seven or existing otherwise) or to make no further disbursements until such default is remedied or determined not to be an Event of Default. (b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof, the liability of The Times and its Affiliates under this Agreement for damages or otherwise shall be limited to (i) any sums advanced hereunder to The Times but not heretofore expended by it, (ii) the proceeds (to the extent actually received by The Times) of any insurance policies covering or relating to the Work or the Construction Site, (iii) the obligations of The Times set forth in Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the period prior to their assignment to EDC. In no event shall EDC look to the property or assets of any of the individuals who are the directors, officers, employees, shareholders, agents or servants of The Times, and no property or assets of any of the aforesaid Persons shall be subject to levy, execution or other enforcement procedure for the satisfaction of The Times's obligations under this Agreement, except in the event such individual has misapplied the Funding as described in Sec.7.2(c) below and then only to the extent of the actual dollar amount that such individual has misapplied the Funding; provided, however, that if such misapplication was the result of such individual's fraudulent conduct, such individual's liability shall be as set forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no event shall The Times Indemnitees be liable for consequential damages under this Agreement. -65- (c)(i) Each of the individuals described in Sec.7.2(b) above shall be personally liable (as distinguished from collective liability), to the full extent provided by law, in equity, and by this Agreement if any such relevant individual shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct, in which case such liability shall not be limited as provided above. (ii) The Times shall be liable to the full extent provided by law, in equity, and by this Agreement if The Times shall have applied the Funding in violation of the covenant contained in Sec.6.9 of this Agreement and such misapplication was not corrected within ten (10) Business Days of notice thereof; provided, however, that such liability shall be limited to the actual dollar amount that was misapplied unless the misapplication was the result of fraudulent conduct on the part of The Times as opposed to the fraudulent conduct of an individual not authorized by The Times to act in such a manner, in which case such liability shall not be limited as provided above. (d) No course of dealing on the part of EDC or any failure on the part of EDC to exercise any right shall operate as a waiver of such right or otherwise prejudice EDC's remedies. No right or remedy conferred upon or reserved to EDC is intended to be exclusive of any other right or remedy. Every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained -66- in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as EDC may deem appropriate. The exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of EDC in exercising any right or remedy occurring upon an Event of Default shall impair any such right or remedy or constitute a waiver of or acquiescence in such Event of Default. (e) The provisions of this Sec.7.2 shall survive the expiration or termination of the Term. Sec.7.3 Termination. If, upon the occurrence of an Event of Default ------------ described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this Agreement, or for any other reason provided for under this Agreement, this Agreement is terminated, EDC agrees that, provided that the Lease remains in full force and effect and no "Event of Default" (as defined in the Lease) shall have occurred and be continuing thereunder, EDC shall have the right (but shall not be obligated) to undertake the reconstruction of the Whitestone Road in accordance with the Final Plans and Specifications with such reasonable changes therein as EDC may from time to time and in its reasonable discretion, deem appropriate; provided that, in no event shall such discretionary changes (i.e. changes which are not required by the Requirements, field conditions or other unexpected conditions, or are not necessitated by reason of The Times's default under this Agreement) cause "Substantial Completion" (as such term is defined in the Lease) of the Project to be delayed by virtue -67- of the inability to obtain a Certificate of Occupancy with respect to the Project. In such circumstances, EDC shall have the right (but shall not be obligated) to assume any Construction Contract or any Design Contract made by or on behalf of The Times in any way relating to the Work and to take over and use all or any part or parts of the labor, materials, supplies and equipment contracted for, by, or on behalf of The Times, whether or not previously incorporated into the Construction Site, all in EDC's discretion. To effectuate the provisions of this paragraph, The Times hereby collaterally assigns to EDC all such Construction Contracts and all such Design Contracts, whether presently existing or made in the future, as more particularly set forth in Sec.4.1(d) hereof, and, if EDC exercises its rights under such collateral assignment, EDC shall assume all of the obligations and liabilities of The Times under such Construction Contracts and Design Contracts. In connection with any demolition or construction undertaken by EDC pursuant to the provisions of this Sec.7.3, EDC may (i) engage builders, contractors, architects, engineers and others for the purpose of furnishing labor, materials and equipment, (ii) reasonably pay, settle or compromise all bills or claims which may become liens against the Construction Site, or which have been or may be properly incurred, or for the discharge of liens, encumbrances or defects in the title of the Construction Site, and (iii) take such other reasonable action (including the employment of watchmen) to protect the Construction Site. Any costs incurred by EDC in connection with the performance of the above-described work which are in excess of the amount of the Funding and which are necessitated as a result of the earlier termination of this Agreement by reason of The Times's default or The Times's -68- failure to perform its obligations with respect to the construction of the Improvements in accordance with this Agreement and the Final Plans and Specifications shall be paid by The Times. The provisions of this Sec.7.3 shall survive the expiration or termination of the Term. -69- ARTICLE EIGHT - NOTICES ----------------------- Sec.8.1 Notices. All notices under this Agreement shall be in writing and -------- shall be deemed to have been sufficiently given or served for all purposes as of the date when sent by hand, or by a national overnight courier service, or by certified or registered mail, return receipt requested, and addressed as follows (or to such other addresses as may from time to time be designated by EDC or The Times by notice delivered to the other in accordance with this Sec.8.1): (i) if to EDC: New York City Economic Development Corporation 110 William Street New York, N.Y. 10038 Attention: President with a copy via ordinary mail to General Counsel, at the same address and to: New York City Law Department 100 Church Street New York, New York 10007 Attention: Chief, Economic Development Division; (ii) if to The Times: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Solomon B. Watson, IV, Esq. General Counsel -70- with a copy via ordinary mail to David Thurm, Executive Director of Project Development, at the same address, and with a copy in the same manner sent to The Times to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin Polevoy, Esq. Sec.8.2 Disbursement Submissions. All Requisitions and other submissions ------------------------- for disbursements required to be made pursuant to Article Four of this Agreement shall be addressed as directed in Sec.4.3 hereof. -71- ARTICLE NINE - GENERAL CONDITIONS --------------------------------- AND COVENANTS ------------- The following terms, covenants and conditions shall be applicable throughout the Term: Sec.9.1 Conflict of Interests. No member, officer, director or employee ---------------------- of EDC or the City, or their designees, consultants or agents; no member of the governing body of the City and no public official of the City who exercises or exercised any functions or responsibilities with respect to the subject matter of this Agreement during his/her tenure, if known to The Times, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Work or in any activity or benefit arising out of or in connection with the performance of the Work. Upon receiving actual notice or knowledge of any of the circumstances specified in the preceding sentence, The Times shall deliver notice to EDC of the circumstances and immediately shall use good faith efforts to cause the Persons affected to terminate their interest in the prohibited contract or property. The Times shall require the Resident Engineer, Construction Manager, Owner's Representative or General Contractor (as the case may be) and the Contractors, subcontractors, materials suppliers, Consultants and subconsultants to make appropriate representations in writing that they, their employees and principals do not have any conflict of interest prohibited under this Sec.9.1, and to covenant to use good faith -72- efforts to cause the prohibited persons to terminate their interest in the relevant contract or property upon demand by The Times. Sec.9.2 No Liability of Individuals. No officer, employee, director, ------------------------------ member, agent or other person authorized to act on behalf of EDC or the City shall have any personal liability in connection with this Agreement or any default by EDC or the City. Sec.9.3 Anti-Boycott Provisions. ------------------------ (a) The Times agrees that it is not now participating, nor shall it participate during the Term, in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder. (b) Upon the final determination by the United States Department of Commerce or any other agency of the United States as to conviction of The Times for participation in an international boycott in violation of the provisions of the Export Administration Act of 1979, as amended, or the regulations promulgated thereunder, EDC may, at its option, declare a default under this Agreement (which default is subject to cure by The Times in accordance with the terms of this Agreement). (c) The Times shall comply in all respects with the provisions of Sec.6-114 of the Administrative Code of the City and the rules and regulations issued by the Comptroller of the City thereunder. -73- Sec.9.4 Governing Law. The provisions of this Agreement shall be governed ------------- and interpreted in accordance with the law of the State of New York. Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b) ------------------ hereof, EDC shall not be liable for consequential damages under this Agreement to The Times or to any other Person in any matter arising out of the construction of the Improvements. (b) Notwithstanding any provision to the contrary contained in this Agreement, if (i) EDC defaults in the disbursement of the Funding for which it is obligated, pursuant to the terms of this Agreement, to disburse to The Times and fails to cure such default within thirty (30) days after The Times delivers notice (the "EDC Default Notice") to EDC of such default, (ii) the Funding shall not be made available to EDC by the City, in whole or in part for any reason, then, for each dollar of Funding not so disbursed by EDC or made available to EDC by the City, The Times shall have the right to offset against future Rental (other than Impositions) due under the Lease and against College Point Improvement Fund Payments due under the Lease an amount equal to the Funding not so disbursed by EDC until such time as EDC recommences the disbursement of the Funding. The Times agrees that the right to on offset against Rental (other than Impositions) and against College Point Improvement Fund Payments as hereinabove described is The Times's sole remedy against EDC arising out of the failure of EDC to receive the Funding from the City and The Times shall not commence any action or proceeding against EDC as a result of such failure, except as otherwise provided in this Agreement. -74- (c) In the event that EDC (i) defaults in the performance of any obligation on EDC's part to perform under this Agreement other than the disbursement of the Funding or (ii) defaults in the disbursement of the Funding and continues to be in default thereof after the receipt of the EDC Default Notice and expiration of the thirty (30) day cure period provided therein, then The Times shall have all of its rights at law and in equity against EDC. (d) Except as otherwise provided in this Agreement; (i) no course of dealing on the part of The Times or any failure on the part of The Times to exercise any right shall operate as a waiver of such right or otherwise prejudice The Times's remedies, (ii) no right or remedy conferred upon or reserved to The Times is intended to be exclusive of any other right or remedy, (iii) every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy contained in this Agreement or existing at any time at law or in equity, or otherwise, and may be exercised from time to time and as often and in such order as The Times may deem appropriate, and (iv) the exercise of any right or remedy shall not be construed as an election or a waiver of any other right or remedy. No delay or omission of The Times in exercising any right or remedy occurring upon EDC's failure to disburse the Funding in accordance with this Agreement or to otherwise perform its obligations in accordance with the terms of this Agreement shall impair any such right or remedy or constitute a waiver of or acquiescence in any such failure. -75- Sec.9.6 Amendments. This Agreement may not be amended, waived or ----------- terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the amendment, waiver or termination is sought. Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be ----------------------- binding upon and shall inure to the benefit of EDC and The Times and their respective successors and permitted assigns. Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1 --------------------- hereof, The Times acknowledges that the City capital budget dollars which form the Funding are not and shall not be deemed to be an assignment of any funds received by EDC from the City. The Times confirms that its rights to the Funding arise exclusively under this Agreement. Sec.9.9 Counterparts. This Agreement may be executed in one or more ------------- counterparts which, when taken together, shall constitute one and the same document. Sec.9.10 Interpretation. The provisions of the Lease incorporated by --------------- reference into this Agreement are intended to supplement the other provisions of this Agreement. In the event of any conflict between the Lease provisions and the other provisions of this Agreement, the provisions of the Lease shall control. -76- Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their ---------- respective departments, offices, officers, members, directors, employees and agents shall collectively be referred to as "the Public Parties". The Times shall defend, indemnify and hold harmless the Public Parties, from and against any and all claims, damages (including consequential damages awarded to third parties against the Public Parties), judgments, liabilities and causes of action whatsoever to which they may be subject arising out of the acts or omissions of The Times, its Contractors, subcontractors, agents, employees or material suppliers, Consultants and subconsultants, and any and all Persons, in connection with the performance of the Work, or because of any negligence, fault or default of The Times, its agents, employees, material suppliers, subcontractors or subconsultants. The obligation of The Times to indemnify and hold harmless the Public Parties shall include but not be limited to the payment of any and all costs and reasonable legal fees as may be actually incurred by the Public Parties. The termination of this Agreement shall not release The Times from any liability to the Public Parties arising out of any act or omission of The Times in connection with this Agreement. (b) In this 9.11(b), The Times and its officers, members, directors, employees and agents shall collectively be referred to as "The Times Indemnitees". EDC shall indemnify and hold harmless The Times Indemnitees from and against any and all claims, damages (including consequential damages awarded to third parties against The Times Indemnitees), judgments, liabilities and causes of action whatsoever to which they may be subject to the extent caused as a result of the negligence or misconduct of EDC or its agents or -77- professional consultants arising out of or in connection with EDC's or its agents' or professional consultants' inspections of the Construction Site or uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC to indemnify and hold harmless The Times Indemnitees pursuant to this Sec.9.11(b) shall include, but not be limited to, the payment of any and all costs and reasonable legal fees as may be actually incurred by The Times Indemnitees in connection with any such claim, damage, judgment, liability or causes of action. The termination of this Agreement shall not release EDC from any liability to The Times Indemnitees described in this Sec.9.11(b). Sec.9.12 No Agency. Neither The Times nor any of its employees, ----------- Contractors or subcontractors, Consultants or subconsultants is, shall be or shall represent that he, she or it is an agent, servant or employee of EDC or the City by virtue of this Agreement or by virtue of any approval, permit, license, grant, right or authorization given by the EDC or the City or any of their officers, agents or employees. The Times shall be solely responsible for the work, direction, compensation and personal conduct of its officers, agents, employees, subcontractors and subconsultants. Sec.9.13 Venue ----- (a) Any and all claims asserted by or against EDC or by or against The Times arising under this Agreement or related hereto shall be heard and determined either in the courts of the United States ("Federal Courts") located in the City or in the courts of the -78- State of New York ("New York State Courts") located in the City of New York. To effect this agreement and intent, EDC and The Times agree and, where appropriate, shall require each Contractor and Consultant to agree, as follows: (i) If either Party initiates any action against the other Party in Federal Court or in New York State Court, service of process may be made on The Times either in person, or by registered or certified mail (return receipt requested) addressed to the office of the General Counsel of The Times at the address set forth in Article Eight of this Agreement, or to such other address as The Times may provide to EDC in writing, and service of process may be made on EDC, either in person or by registered or certified mail (return receipt requested) addressed to EDC at its address as set forth in Article Eight of this Agreement, or to such other address as EDC may provide to The Times in writing. (ii) With respect to any action between EDC and The Times in New York State Court, each Party hereby expressly waives and relinquishes any rights it might otherwise have (A) to move to dismiss on grounds of forum non conveniens, (B) to remove to ----- --- ---------- Federal Court wholly outside New York City, and (C) to move for a change of venue to New York State Court outside New York City. (iii) With respect to any action between EDC and The Times in Federal Court located in New York City, each Party expressly waives and -79- relinquishes any right it might otherwise have to move to transfer the action to a Federal Court outside the City of New York. (iv) If either Party commences any action against the other Party in a court located other than in the City and State of New York, then, upon request of the Party against whom the action is brought, the Party bringing the action shall either consent to a transfer of the action to a court of competent jurisdiction located in the City and State of New York or, if the court where the action is initially brought will not or cannot transfer the action, then to dismiss such action without prejudice, and may thereafter reinstitute the action in a court of competent jurisdiction in New York City. Sec.9.14. Investigations; Cooperation. ---------------------------- (a) Definitions. As used in this Sec.9.14: ------------ (i) "Investigation" shall mean any investigation, audit or inquiry conducted by the Department of Investigation with respect to the obtaining and/or performance of the Transaction Documents or any of them, (ii) "Department of Investigation" shall mean the Department of Investigation of the City or any City department or agency succeeding to the functions thereof, (iii) "Commissioner" shall mean the Commissioner or Acting Commissioner of the Department of Investigation, -80- (iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and Economic Development of the City (or the officer of the City succeeding to the functions of that office), (v) "Entity" shall mean any firm, partnership, corporation, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with EDC or the City, (vi) "Member" shall mean any Person associated with another Person or entity as a partner, director, officer, principal or employee, and (vi) "Transaction Documents" shall mean the Lease, this Agreement, Funding Agreement #1, Funding Agreement #2 and Funding Agreement #3. (b) Cooperation with Investigations. Subject to the exclusions set --------------------------------- forth in paragraph (c) of this Sec.9.14, The Times shall during the term of this Agreement: (i) cooperate fully and faithfully, and utilize good faith efforts to cause its Members to cooperate fully and faithfully, with any Investigation; and (ii) report, and utilize its good faith efforts to cause its Members to report, in writing to the Commissioner, any solicitation of which The Times has actual knowledge of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or any other Person, for any purpose relating to the procurement or obtaining and/or performance of any Transaction Document by The Times. -81- (c) Exclusions. The provisions of Sec.9.14(b) above shall not apply: ----------- (i) to any information or document known, prepared or obtained by The Times or its Members (and the sources of such information or documents), that is protected from compelled disclosure by any present or future "Shield Law" or any other statute, constitutional provision, rule, regulation or case law related to the rights of reporters and/or news organizations; (ii) to any Person who refuses to testify based on his or her privilege against self-incrimination after having been given assurances that his or her statement, and any information from such statement, will not be used against such Person in any subsequent criminal proceeding in any forum (provided, however, that any Person given such assurances shall have the right to have the legal sufficiency of such assurances adjudicated by a court of competent jurisdiction as a precondition of the applicability of Sec.9.14(b) to such Person); and (iii) to any construction contract or other agreement (or the obtaining or performance thereof) with parties other than the City or EDC, including without limitation, any contract or agreement being funded through any Transaction Document. (d) Hearing. If The Times or any Member of The Times refuses to -------- testify in an Investigation and, in connection with such failure to testify, the Commissioner determines -82- that The Times has failed to cooperate in the Investigation in violation of the provisions of Sec.9.14(b) hereof, then the Commissioner may request the Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5) days written notice to The Times, to determine if any penalties should be imposed for The Times's failure to so cooperate in accordance with this Sec.9.14. (e) Adjournments of Hearing ----------------------- (i) The Times shall have the right to require that the Hearing be adjourned for a period of not more than thirty (30) days. (ii) The Deputy Mayor may grant other adjournments of the Hearing, in the exercise of his or her reasonable discretion; provided however, that in the case of an adjournment occasioned by The Times's failure to appear, the Deputy Mayor may, if he or she determines that there was no reasonable cause for the requested adjournment or failure to appear, impose an Interim Penalty. (iii) The City shall not incur any penalty or damages for delay or otherwise occasioned by an adjournment of the Hearing. (f) Penalties. ---------- (i) The Deputy Mayor may impose a penalty during an adjournment due to The Times's failure to appear or proceed with the scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim Penalty") of not more than $1,000 per day for each day of such adjournment, provided, -83- however, that such daily penalties shall cease to accrue from and after the date that The Times makes itself available to appear at or proceed with the scheduled Hearing or gives written notice to the Deputy Mayor that it does not intend to appear at or proceed with the scheduled Hearing, in which event the Deputy Mayor shall have the right to continue the Hearing and reach a determination without The Times's participation. (ii) If, after the Hearing, the Deputy Mayor determines that The Times failed to cooperate in the Investigation in violation of this Sec.9.14, and The Times fails to commence to cooperate fully in such Investigation within five ( 5) Business Days following its receipt of written notice of such determination, the Deputy Mayor may: (A) impose a penalty ("Final Penalty") which may not, in conjunction with any Interim Penalty or Final Penalty imposed during the term of this Agreement under this Agreement and/or during the term of the Lease with respect to any other Transaction Document, exceed $500,000 in the aggregate during the term of the Lease; and/or (B) disqualify The Times, for a period not to exceed five (5) years, from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license -84- with or from EDC or the City, other than as contemplated in the Transaction Documents. Notwithstanding anything to the contrary contained herein, in the event that The Times is found after the Hearing to have failed to cooperate in the Investigation, but nonetheless is not subjected to a Final Penalty because The Times commences to cooperate fully in such Investigation within five (5) Business Days following its receipt of written notice of such determination, The Times shall be liable for the cost of conducting such Hearing in an amount not to exceed $5,000. (g) Criteria for Determination. The Deputy Mayor shall consider and ---------------------------- address in reaching his or her determination and in assessing an appropriate Interim Penalty, Final Penalty, and/or disqualification, the factors in clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if relevant and appropriate, the criteria established in clauses (iii) and (iv) of this Sec.9.14(g), in addition to any other information which may be relevant and appropriate: (i) The Times's good faith endeavors or lack thereof to cooperate fully and faithfully with the Investigation, including but not limited to the discipline, discharge or disassociation of any Person failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other Members, agents, assignees or fiduciaries whose testimony is sought (the Deputy Mayor shall take into account whether the discipline, discharge -85- or disassociation of any Persons failing to testify would violate any union or other contract), (ii) the relationship of the Person who refused to testify to The Times, including, but not limited to, whether the Person whose testimony is sought has an ownership interest in The Times and/or the degree of authority and responsibility the Person has within The Times, (iii) The nexus of the testimony sought to The Times and the Transaction Documents, and/or (iv) the effect a penalty may have on an unaffiliated and unrelated party or Entity that has a significant interest in The Times, provided that (x) such unrelated party or Entity has given actual notice to the Commissioner or EDC upon the acquisition of the interest, or (y) at the Hearing such unrelated party or Entity gives notice and proves that such significant interest was previously acquired; under either circumstance, such unrelated party or Entity must present evidence at the Hearing demonstrating the potential adverse impact a penalty will have on such party or Entity. (h) Payment of Penalties. Any Interim or Final Penalty hereunder ----------------------- shall, upon imposition thereof, be applied to reduce the aggregate of Offset Amounts (as such term is defined in the Lease) then available to The times under Article 4 of the Lease and the balance, if any, shall be paid promptly as additional Rental, or at the landlord under the -86- Lease's option, such balance shall be applied to reduce EDC's obligations with respect to any undisbursed Funding. (i) Exclusive Remedy. Notwithstanding anything to the contrary con- ------------------ tained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall be the sole and exclusive remedies available to EDC in the event that The Times breaches any of its obligations under this Sec.9.14, and no other remedies, including, without limitation, the remedies set forth elsewhere in this Agreement for defaults by The Times in the performance of its obligations under this Agreement, shall be applicable to a breach by The Times of any of its obligations under this Sec.9.14. (j) Right to Dispute Determinations of Deputy Mayor. Nothing ------------------------------------------------------- contained herein shall be construed to limit in any manner whatsoever The Times's right or ability to challenge or seek to enjoin, overturn, set aside or modify any action taken, determination made or penalty imposed by the Deputy Mayor pursuant to the provisions of this Sec.9.14. (k) Concurrent Lease Obligation. The obligations of The Times under ---------------------------- this Sec.9.14 constitute a portion of the obligations of The Times under Article 40A of the Lease, and nothing contained herein shall be construed as expanding, enlarging or increasing in any way, or as being separate from or in addition to, the obligations and liabilities of The Times pursuant to Article 40A of the Lease. -87- Sec.9.15. Intentionally Omitted. Sec.9.16 Maximum Interest Rate --------------------- In the event that any interest payable under this Agreement shall be deemed to exceed the maximum rate permitted by law, then the amount of interest to be paid shall be the maximum rate so permitted. Sec.9.17 Captions -------- The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. Sec.9.18 Gender, Etc. ------------ The gender used in this Agreement shall be deemed to refer to the masculine, feminine, or neuter gender, as the context or the identity of the persons being referred to may require. The singular shall include the plural and vice versa as the context may dictate. Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without ------------------- the prior written consent of The Times, except that EDC shall have the right, upon ten (10) Business Days prior written notice, to assign this Agreement and/or EDC's rights under this Agreement, without any further consent on the part of The Times, to the City. -88- Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees ----------------------------------- that all non-monetary obligations set forth in this Agreement as being obligations of The Times shall apply only to, and be performed by, The New York Times Newspaper Division of The New York Times Company (the "Newspaper Division") and its employees and agents, and EDC shall look solely to the Newspaper Division for the performance of such non-monetary obligations; provided, however, that any default by the Newspaper Division in the performance of such non-monetary obligations shall be treated with the same force and effect pursuant to the applicable provisions of this Agreement as if such default had been committed by The Times. -89- ARTICLE TEN - AGREEMENT OF THE CITY ----------------------------------- Sec.10.1 City's Agreement to Fund EDC. The City, by executing this -------------------------------- Agreement as it effects this Article Ten only, (i) acknowledges that it is becoming a signatory to this Agreement as a material inducement to The Times to enter into this Agreement, (ii) warrants and represents that the Consolidated Contract is in full force and effect and legally binding upon the City; and (iii) covenants and agrees to provide EDC with City capital budget funds in such amounts and at such times as will permit EDC to comply with its obligations to disburse the Funding pursuant to the provisions of this Agreement, without regard to whether the Consolidated Contract is then in full force and effect or whether EDC is in compliance with the terms thereof. Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation ---------------------------- Counsel (addressed to The Times) providing that this Agreement is legal, valid and binding upon the City with respect to the provisions of this Article Ten in the form attached hereto as Appendix K, is being delivered to The Times concurrently herewith. Sec.10.3 The Times's Rights Against the City. In the event that the City ------------------------------------- has defaulted in the performance of any obligation of the City pursuant to this Article Ten and continues to be in default thereof after notice from The Times and a thirty (30) day period to cure, The Times shall have all of its rights at law and in equity against the City. -90- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION By: /s/ Carl Weisbrod ---------------------- Title: President THE NEW YORK TIMES COMPANY By: /s/ Katharine P. Darrow ------------------------- Title: Senior Vice President THE CITY, BY SIGNING IN THE PLACE PROVIDED BELOW, AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLE TEN HEREOF: THE CITY OF NEW YORK By: /s/ Barry F. Sullivan APPROVED AS TO FORM: By: /s/ -------------------------- Acting Corporation Counsel -91- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Carl Weisbrod, to me known, who, being by me duly sworn, did depose and say that s/he resides at 11010 St. NY, NY; that s/he is the President of New York City Economic Development Corporation, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation. Colleen B. McHale --------------------------- Notary Public STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993,before me personally came Katharine Darrow, to me known, who, being by me duly sworn, did depose and say that s/he resides at 16 Garden Place, Brooklyn, NY; that s/he is the S.V.P. of The New York Times Company, the corporation described in and which executed the foregoing instrument; and that s/he signed her/his name thereto by authority of the board of directors of such corporation on behalf of such corporation. Beverly Sturr -------------------------- Notary Public -92- STATE OF NEW YORK ) ss: COUNTY OF NEW YORK ) On the 17th day of December, 1993, before me personally came Barry F. Sullivan, to me known, who, being by me duly sworn, did depose and say that s/he resides at c/o City Hall, NY, NY; that s/he is the Deputy Mayor of The City of New York, the same person who executed the foregoing instrument; and that s/he acknowledged that s/he signed her/his name thereto on behalf of The City of New York and pursuant to the authority vested in her/him. Colleen B. McHale ----------------------------- Notary Public -93- EX-10.13 11 ================================================================= NEW YORK CITY PUBLIC UTILITY SERVICE POWER SERVICE AGREEMENT Made as of May 3, 1993 between THE CITY OF NEW YORK, Acting by and through its Public Utility Service and THE NEW YORK TIMES NEWSPAPER DIVISON OF THE NEW YORK TIMES COMPANY ================================================================= TABLE OF CONTENTS ARTICLE TITLE PAGE Article 1 Definitions 1 Article 2 Sale and Purchase of Electricity 11 Article 3 Type of Service 17 Article 4 Term 18 Article 5 Quantity of Electricity to be Supplied 19 Article 6 Use of Service 22 Article 7 Billing 22 Article 8 Apportionment of Service 26 Article 9 Employment and Power Usage Levels 27 Article 10 Intentionally Omitted 36 Article 11 Breach of Contract 37 Article 12 Third Party Beneficiary 41 Article 13 Records 42 Article 14 Force Majeure 42 Article 15 Assignability of Agreement 44 Article 16 Notices 44 Article 17 Modifications to Agreement 45 Exhibit I NYPA/NYCPUS Contract Exhibit II NYPA Service Tariff No. 35 Exhibit III Con Edison Delivery Agreement Exhibit IV NYPA Resolution Exhibit V NYCPUS General Terms and Conditions - i - TABLE OF CONTENTS (cont'd) Exhibit VI NYCPUS Service Tariff No. 4 Exhibit VII Annual Job Report Form Exhibit VIII Customer's Agreement to Purchase - ii - NEW YORK CITY PUBLIC UTILITY SERVICE POWER SERVICE AGREEMENT THIS AGREEMENT made as of this May 3, 1993 between THE CITY OF NEW YORK, a municipal corporation of the State of New York, acting by and through its Public Utility Service, having an office at 75 Park Place, Sixth Floor, New York, New York 10007 and THE NEW YORK TIMES NEWSPAPER DIVISION OF THE NEW YORK TIMES COMPANY, having an address at 229 West 43rd Street, New York, New York. Article 1 - DEFINITIONS As used throughout this Agreement, the following terms, whether in the singular or plural, shall have the meaning set forth below: 1.1 Abandonment of the Project - The occurrence of any of the following: (i) notification by Customer to EDC, in writing, that it intends to abandon the Project as of the date specified in such notice, or (ii) at any time during the period between the date hereof and the date on which Customer has equipped the Project with the initial printing presses to be used in connection therewith and commenced the operation thereof (the "Operational Date"), Customer permanently relocates substantially all of the jobs and/or functions directly related to the printing, collating, bundling and distribution of the New York Times newspaper located, on the date of this Agreement, at Customer's 43rd Street facility (the "43rd Street Facility"), to another facility outside of New York City, or (iii) at any time after the Construction Commencement Date, Customer fails to make reasonable and diligent efforts to construct the minimum facility required to be constructed pursuant to the terms of the Lease (the "Minimum Printing Facility"), and as a result of such failure Customer shall not Substantially Complete (as such term is defined in the Lease) construction of the Minimum Printing Facility by the Scheduled Completion Date (subject to Unavoidable Delays), and such failure continues for thirty (30) days after written notice given to Customer pursuant to the terms of the Lease or (iv) by the date (the "Outside Operation Date") which is five (5) years after Substantial Completion (as such term is defined in the Lease) of construction of the Minimum Printing Facility, -2- Customer shall have failed to (a) equip such Minimum Printing Facility with the printing presses to be used by Customer in connection therewith and (b) commence the operation of such Minimum Printing Facility, or (v) at any time after the Operational Date, Customer ceases such operation and fails to resume such operation within a five (5) year period (subject to Unavoidable Delays) and such failure continues for thirty (30) days after written notice given to Customer pursuant to the terms of the Lease. Abandonment of the Project shall be deemed to have occurred effective as of: (I) the date specified in the notice described in (i) above; (II) the date on which Customer permanently relocates substantially all of the jobs and/or functions directly related to the printing, collating, bundling and distribution of the New York Times newspaper located at the 43rd Street Facility to another facility outside of New York City; (III) the date which is thirty (30) days after the notice described in (iii) above (provided, that prior to the expiration of such thirty-day period, Customer has not commenced to cure the failure described in such notice); (IV) the Outside Operational Date; or (V) the date which is thirty (30) days after the notice described in (v) above (provided, that prior to the expiration of such thirty-day -3- period, Customer has not commenced to cure the failure described in such notice). 1.2 Actual Demand - The integrated demand registered by Customer during each consecutive thirty (30) minute period during the term of this Agreement. 1.3 Affiliate - (i) Any Person which, directly or indirectly, through one or more intermediaries controls, or is under common control with, or is controlled by, Customer, or (ii) such other Person which may be requested by Customer to be treated as an Affiliate for purposes of this Agreement and approved in writing by the Director. The term "control" (including the related terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, or partnership or other ownership interests, by contract or otherwise; provided that in any event, any Person (including the family members of such Person) which owns directly or indirectly 50% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or which is a general partner of a partnership is deemed to control such corporation or partnership. 1.4 Allocation Increase Notice - Shall have the meaning provided in Section 5.2 of this Agreement. -4- 1.5 Building - A printing facility consisting of not less than 360,000 square feet to be constructed at the Project by Customer pursuant to the terms of the Lease. 1.6 City - The City of New York, its departments and political subdivisions, including the New York City Public Utility Service. 1.7 College Point Power Commencement Date - The date, chosen at Customer's discretion, at or about the beginning of a calendar month to coincide with the appropriate Con Edison "trip cycle" for such calendar month, which shall be specified by Customer in the College Point Power Commencement Notice, on which NYCPUS shall discontinue the allocation of Low-Cost Power to Customer at the 43rd Street Facility (and nothing contained herein shall be construed to mean that the power consumed by Customer at the 43rd Street Facility thereafter shall be reduced as the result thereof, or that such power shall not thereafter be provided by Con Edison to Customer at Con Edison's rates which are applicable to Customer) and commence the allocation of Low-Cost Power to Customer at the Project. In the event that Customer desires that NYCPUS provide 6.0 megawatts of Low-Cost Power to the Project as of the College Point Power Commencement Date, Customer shall give the College Point Power Commencement Notice not less than thirty (30) days prior to the College Point Power Commencement Date. In the event that Customer desires that NYCPUS provide more than 6.0 megawatts of Low-Cost Power -5- to the Project as of the College Point Power Commencement Date, Customer shall give the College Point Power Commencement Notice in accordance with the provisions of Section 5.2 hereof. 1.8 College Point Power Commencement Notice - The notice to be given by Customer to NYCPUS pursuant to Section 1.7 hereof, which notice shall specify (a) the College Point Power Commencement Date and (b) the number of megawatts of Low-Cost Power to be provided to the Project as of the College Point Power Commencement Date. 1.9 Con Edison - The Consolidated Edison Company of New York, Inc. 1.10 Construction Commencement Date - Shall have the meaning provided for that term in the Lease. 1.11 Construction Completion Date - The date upon which Customer Substantially Completes (as that term is defined in the Lease) construction of the Building. 1.12 Contract Demand - The amount of power determined from time to time in accordance with Articles 5 and 9 of this Agreement. 1.13 Customer - The New York Times Newspaper Divison of The New York Times Company; provided, however, that any obligation of Customer to be performed under this Agreement may be -6- performed by Customer or by one or more of Customer's Affiliates; provided, however, that any such performance by Customer's Affiliates shall be in accordance with all terms and conditions of this Agreement including, without limitation, job reporting and affirmative action requirements, to the extent that such terms and conditions are applicable to such performance. 1.14 Delivery Agent - The Consolidated Edison Company of New York, Inc. 1.15 Delivery Agreement - The Agreement between the City of New York and Consolidated Edison Company of New York, Inc. for the delivery of power and energy from the James A. FitzPatrick Power Project, dated October 23, 1987, attached hereto as Exhibit III, including the schedule of rates, terms, and conditions implementing said agreement duly and lawfully filed by Con Edison with the Federal Energy Regulatory Commission and the New York State Public Service Commission, and any amendments or changes thereto. 1.16 Director - The Director of the New York City Public Utility Service. 1.17 EDC - The New York City Economic Development Corporation. 1.18 EDPAB - The Economic Development Power Allocation Board as defined by the Economic Development Law Section 182. -7- 1.19 General Terms and Conditions - "General Terms and Conditions Applicable to the Rates and Charges of the New York City Public Utility Service," attached hereto as Exhibit V, as approved pursuant to Law and any amendments thereto. 1.20 Job Recalculation Notice - Shall have the meaning provided in Section 9.0 hereof. 1.21 Jobs - Positions filled by full-time equivalent production jobs and full-time equivalent non-production jobs in New York City only. Production jobs shall be defined as jobs associated with Customer's printing functions or successor functions thereto. Non-production jobs shall be defined as jobs other than those associated with Customer's printing functions. Full-time equivalent production jobs and non-production jobs shall be calculated in the manner provided in Section 9.9 hereof. 1.22 Law - The term "Law" shall include, but not be limited to, any federal or state law or rule or regulation, the New York City Charter, the New York City Administrative Code, a local law of the City of New York, and any ordinance, rule or regulation having the force of law. 1.23 Lease - That certain lease to be entered into between the City and EDC and simultaneously assigned by EDC to Customer in connection with the development by Customer of a printing and distribution facility at College Point, New York. 1.24 Lease Execution Date - The date on which the Lease is executed. -8- 1.25 Low-Cost Power - Power and energy provided by NYCPUS to Customer pursuant to the terms of this Agreement from the power and energy provided to NYCPUS by NYPA or any successor to NYPA pursuant to Service Tariff No. 35 or any successor tariff to Service Tariff No. 35. Such Low-Cost Power shall consist of (a) 6.0 megawatts of economic development power provided to NYCPUS by NYPA or any successor to NYPA, and (b) up to 4.5 additional megawatts from NYCPUS' Reserved Allocation (as that term is defined in the NYPA/NYCPUS Contract) provided by NYPA or any successor to NYPA. 1.26 Maximum Power Allocation - 10.5 megawatts of Low-Cost Power. 1.27 Minimum Production Jobs - Shall have the meaning provided in Section 9.0 hereof. 1.28 Minimum Non-Production Jobs - Shall have the meaning provided in Section 9.0 hereof. 1.29 NYCPUS - The New York City Public Utility Service. 1.30 NYCRR - New York Code of Rules and Regulations. 1.31 NYPA - The New York Power Authority (also known as the Power Authority of the State of New York ("PASNY"). 1.32 NYPA Capability Period - Approximately November 1 through April 30 and May 1 through October 31 of each year. 1.33 Person - Any individual, corporation, partnership, joint venture, trust or unincorporated organization. -9- 1.34 Project - A printing and distribution facility in College Point, New York, to be constructed by Customer pursuant to the terms of the Lease. 1.35 Scheduled Completion Date - Shall have the meaning provided for that term in the Lease. 1.36 Summer Temporary Reduction Month - Shall have the meaning provided in Section 9.7 of this Agreement. 1.37 Temporary Reduction Month - Shall have the meaning provided in Section 9.7 of this Agreement. 1.38 Winter Temporary Reduction Month - Shall have the meaning provided in Section 9.7 of this Agreement. 1.39 Unavoidable Delays - Delays caused by strikes, slowdowns, walkouts, lockouts or other labor troubles; acts of God; catastrophic weather conditions; inability to obtain labor or materials due to labor disputes; court orders enjoining commencement or continuation of construction work; enemy action; civil commotion; shortage of fuel, supplies or labor resulting from governmental declared priorities in connection with a public emergency; failure or defect in the supply of electricity, oil, gas or water to the Project provided that such failure or defect is not due to the action or inaction of Customer or any of its contractors; fire, casualty; the failure of the Lease Administrator (as such term is defined in the Lease) to review, comment on, approve, disapprove and/or inform -10- the Buildings Department of its approval of the Plans and Specifications (as such term is defined in the Lease) for the Project within the specified time periods, provided that such failure is not a result of Customer's failure to submit Plans and Specifications in sufficient detail to permit the Lease Administrator to properly review such Plans and Specifications or Customer's failure to submit Plans and Specifications appropriately modified to reflect the Lease Administrator's comments thereon; the failure of EDC to disburse any Funding under Funding Agreement #l (as such terms are defined in the Lease) and/or any other cause or causes not within Customer's control that are causing a delay in Customer's performance of its construction obligations under the Lease. Article 2 - SALE AND PURCHASE OF ELECTRICITY 2.0 The provision of Low-Cost Power under this Agreement is in consideration of: (1) Customer's commitment to make, or to cause one or more of Customer's Affiliates to make, certain investments in connection with the Project, as hereinafter provided, and (2) Customer's commitment, except as hereinafter provided, to retain, or to cause one or more of Customer's Affiliates to retain, an aggregate total of 3,200 Jobs in New York City for the duration of this Agreement pursuant to the provisions of Article 9 hereof including, without limitation, the last sentence of Section 9.0 hereof. Customer hereby -11- commits to complete an investment associated with the Project in an aggregate amount of no less than $5.8 million, which represents 12.5 percent of the equalized assessed value of Customer's facility at 229 W. 43rd Street, New York, New York. Such investment shall be completed no later than December 31, 1995 and may include, without limitation, architectural, engineering, legal and other professional costs and fees, and the cost of deposits made for the purchase of printing presses and other equipment ordered for the Project. In addition to the $5.8 million investment required to be made by December 31, 1995, Customer commits to expend no less than $89.2 million in connection with the contemplated construction of the Project (including architectural and engineering costs). 2.1 Customer expects to enter into an Assignment and Assumption Agreement whereby it will accept an assignment of the Lease from EDC no later than October 31, 1993. In the event that Customer (a) does not enter into such an Assignment and Assumption Agreement by October 31, 1993 (unless Customer is delayed or prevented from doing so by the acts or omissions of EDC or the City) or, (b) does enter into such an Assignment and Assumption Agreement but does not commence construction of the Project within ten years of the date the Lease is executed, subject to Unavoidable Delays as that term is defined in and pursuant to the terms of the Lease, then the breach and benefit recapture provisions of Article ll, infra, shall apply. -12- 2.2 Customer anticipates that construction of the Building shall be substantially completed by the Scheduled Completion Date. In the event that Customer does not substantially complete construction of the Building by the Scheduled Completion Date, then the breach and benefit recapture provisions of Article 11, infra, shall apply. 2.3 Beginning on February 28, 1994, and on each anniversary of such date through and concluding on February 28, of the year following the earlier to occur of (a) the calendar year during which Customer shall have completed or exceeded the investment requirement set forth in Section 2.0 hereof or (b) the calendar year in which the Construction Completion Date occurs, Customer shall provide NYCPUS with a report of the investments and expenditures described in Section 2.0 hereof made during the previous calendar year (except that the first report will contain all expenditures made from the inception of the Project, including calendar years prior to 1993, but not earlier than calendar year 1992) toward the investment requirements set forth herein. Such report may be in the form of a letter indicating for each expenditure: (a) the amount of such expenditure, (b) a description of the expenditure, and (c) the payee. Such data set forth in such letter shall be certified to be correct by an authorized representative of Customer reasonably acceptable to NYCPUS. For the sole purpose of verifying Customer's compliance with this provision, NYCPUS -13- shall have the right to examine and audit on reasonable advance notice all written and electronic records and data directly concerning such expenditures. Customer's failure to comply with the investment requirements or the investment reporting requirement shall constitute breach and subject Customer to the termination provisions of Article 11. 2.4 The City promises and agrees to sell and Customer promises and agrees to purchase Low-Cost Power in accordance with the terms of this Agreement and NYCPUS' Firm Industrial Economic Development Nuclear Power Service Tariff No. 4 and the accompanying General Terms and Conditions, which rates and regulations are duly established from time to time by or under authority of Law. A copy of Power Service Tariff No. 4 is attached hereto as Exhibit VI. 2.5 This Agreement and the furnishing of Low-Cost Power hereunder are contingent upon the receipt of power and energy by NYCPUS from NYPA and access to necessary transmission and distribution facilities and subject in all respects to a contract between NYCPUS and NYPA entitled, "Application for Electric Service to Municipal Customers within Downstate New York State", effective on September 10, 1990 ("the NYPA/NYCPUS Contract") (attached hereto as Exhibit I), NYPA Service Tariff No. 35 - Firm Nuclear Power Service-Industrial Economic Development (attached hereto as Exhibit II), the relevant provisions of the Official Compilation of Codes, Rules and -14- Regulations of the State of New York, including but not limited to 21 NYCRR Part 370 and 21 NYCRR Part 460, the Delivery Agreement (attached hereto as Exhibit III), and any and all applicable tariffs, rules and regulations of the Delivery Agent (including without limitation Con Edison's "Schedule for Electricity Service, PSC No. 8 - Electricity"), and any amendment, changes, or renewals to any of the foregoing; provided, however, that notwithstanding anything to the contrary contained in this Section 2.5 (and without limiting the ability of NYCPUS to reduce Customer's Contract Demand pursuant to the provisions of Article 9 hereof): (i) the provision of Low-Cost Power to Customer pursuant to the terms of this Agreement shall not be diminished or suspended in a discriminatory manner if there is a reduction in the amount of power and energy provided by NYPA to NYCPUS or a reduction in NYCPUS' access to necessary transmission and distribution facilities, (ii) the rates charged to Customer for Low-Cost Power shall be at uniform, non-discriminatory rates pursuant to applicable law, including, without limitation, Section l005(d) of the Public Authorities Law and (iii) the rates charged to Customer by Distribution Agent shall at no time be higher than the lowest distribution rate for Low-Cost Power charged by Distribution Agent to any customer in New York City. 2.6 Service hereunder shall commence on or about May 3, 1993. Customer shall provide City prior to the commencement of service hereunder with a signed statement indicating that Customer agrees to purchase the quantities of power and energy -15- prescribed hereunder during the contract period, and Customer is to receive such power and energy in lieu of purchasing power and energy from Con Edison during the term of this Agreement, such statement to be substantially in the form of Exhibit VIII attached hereto. Customer understands that Con Edison will not be required to initiate delivery of power and energy to Customer if Customer is not current on its payments for service from Con Edison and has not paid its outstanding financial obligations to Con Edison, if any. 2.7 Notwithstanding anything to the contrary contained in this Agreement including, without limitation, references stating that NYCPUS will "provide" or "discontinue" service to Customer, the parties to this Agreement acknowledge and agree that the actual delivery of electricity to Customer at the Project and at Customer's 43rd Street Facility shall be performed by Con Edison pursuant to the Delivery Agreement and any other applicable rules, regulations or agreements governing the relationship between Con Edison and Customer and that the "provision" or "discontinuance" of Low-Cost Power by NYCPUS shall relate to an allocation of Low-Cost Power with a corresponding change in the manner in which Customer is billed for that portion of its consumption of power that is equal to its allocation of Low-Cost Power, and shall not be construed to limit in any way the amount of power that Customer shall be entitled to purchase from Con Edison or the amount of power that Con Edison shall be obligated -16- to sell to Customer pursuant to the Delivery Agreement and any other applicable rules, regulations, or agreements governing the relationship between Con Edison and Customer. Article 3 - TYPE OF SERVICE 3.0 All Low-Cost Power to be sold and distributed pursuant to the provisions of this Agreement shall be 60 hertz electric service supplied to NYCPUS from NYPA, pursuant to a resolution of NYPA's Trustees to be attached hereto as Exhibit IV. 3.1 The points of delivery of all Low-Cost Power supplied under this Agreement shall be determined in accordance with the Delivery Agent's procedures for establishing point of service termination. Customer will deal directly with Delivery Agent in establishing the service point at which Delivery Agent will deliver Low-Cost Power to Customer's premises and in establishing, reinforcing, maintaining and removing Delivery Agent's facilities related to the provision of service under this Agreement. Customer will notify NYCPUS of delivery points and facility modifications and reinforcements so determined. Upon Customer's request, NYCPUS shall use reasonable efforts to cause Delivery Agent to accommodate Customer's reasonable needs and desires in establishing points of delivery and in establishing, reinforcing, maintaining and removing Delivery Agent's facilities related to the provision of service under this Agreement. NYCPUS shall enforce (or commence to enforce -17- and pursue such enforcement diligently) the obligations of Delivery Agent under the Delivery Agreement in the event that Delivery Agent does not abide by the terms of the Delivery Agreement governing its treatment of Customer. Article 4 - TERM 4.0 Power service pursuant to this Agreement shall begin on or about May 3, 1993 and shall continue through June 30, 2010, unless extended pursuant to the provisions of Section 5.3 hereof or otherwise, or terminated at an earlier date pursuant to the provisions hereof. Before this Agreement shall become effective, it shall be subject to approval of the Low-Cost Power Allocation Board and NYPA. 4.1 Customer shall have the right, to be exercised at Customer's sole discretion at any time during the term of this Agreement, to terminate this Agreement effective as of the date (the "Early Termination Date") to be set forth in a written notice given by Customer to NYCPUS (the "Early Termination Notice"), provided that (i) the Early Termination Date shall be the last day of a NYPA Capability Period, (ii) the Early Termination Notice shall be given at least twelve (12) months prior to the Early Termination Date and (iii) the Early Termination Date shall not occur prior to the end of the fourth (4th) NYPA Capability Period during which Customer receives Low-Cost Power pursuant to the terms of this Agreement. -18- Article 5 - QUANTITY OF ELECTRICITY TO BE SUPPLIED 5.0 Beginning on or about May 3, 1993, the City shall supply 6.0 megawatts of Low-Cost Power to Customer's 43rd Street Facility. This power shall be supplied to the 43rd Street Facility until the College Point Power Commencement Date. 5.1 Beginning on the College Point Power Commencement Date, NYCPUS will provide 6.0 megawatts of Low-Cost Power to Customer (or such greater amount not to exceed 10.5 megawatts as Customer may designate in the College Point Power Commencement Notice) at the Project. NYCPUS shall simultaneously discontinue supplying Low-Cost Power to Customer's 43rd Street Facility and, subject to the provisions of Section 2.7 hereof, Customer's power requirements at the 43rd Street Facility shall thereafter be supplied by Con Edison at Con Edison's then-applicable rates for Customer. In no case shall Low-Cost Power be allocated simultaneously to Customer's 43rd Street Facility and the Project. The cost of the Low-Cost Power to be provided to the Project will be further reduced through the reduction provided as set forth in the General City Law Sections 25-s and 25-t. NYCPUS shall provide Low-Cost Power to the Project through June 30, 2010 or such later date to which the term of this Agreement may be extended pursuant to the provisions of Section 5.3 hereof or otherwise. 5.2 In the event that Customer shall require more than 6.0 megawatts of Low-Cost Power on the College Point Power -19- Commencement Date or at any time thereafter in one or more incremental increases not to exceed the Maximum Power Allocation, Customer shall so advise NYCPUS by written notice (an "Allocation Increase Notice"), which notice shall (i) specify the first day of the NYPA Capability Period on which Customer desires such increase or increases to become effective and (ii) be given at least six (6) months prior to the first day of such NYPA Capability Period. NYCPUS shall provide Customer with such increased amounts of Low-Cost Power on the first day of the NYPA Capability Period specified in the Allocation Increase Notice; provided, however, that if NYCPUS does not have sufficient Low-Cost Power to fulfill the request set forth in any Allocation Increase Notice (taking into account any power from NYCPUS' Reserved Allocation that NYCPUS has committed to provide to another customer from the start of the next NYPA Capability Period), NYCPUS shall fulfill such request to the full extent that it is able to on the first day of the NYPA Capability Period designated in the Allocation Increase Notice and shall thereafter fulfill such request in its entirety on the first day of the first NYPA Capability Period thereafter on which it has sufficient Low-Cost Power, but in no event later than the first day of the NYPA Capability Period occurring on or immediately after the two (2) year anniversary of such Allocation Increase Notice. All increases in Contract Demand shall be in 100 kilowatt increments. Customer's Contract Demand -20- may be permanently reduced upon Customer's request and upon twelve (12) months notice to NYCPUS, with such changed Contract Demand always to occur at the beginning of a NYPA Capability Period and always to occur in 100 Kilowatt increments. 5.3 NYCPUS shall use its best efforts to obtain extensions of (i) the NYPA/NYCPUS Contract and (ii) NYPA's approval of the extension of the term of this Agreement and if such extensions are obtained the term of this Agreement shall be extended and NYCPUS shall give to Customer the same allocation of Low-Cost Power for the full duration of any such extension at rates which will at all times be (i) uniform, non-discriminatory rates for Low-Cost Power pursuant to applicable law, including, without limitation, Section l005(d) of the Public Authorities Law, and the most favorable Con Edison distribution rate for Low-Cost Power given to any customer in New York City and (ii) further reduced through the reduction provided in New York City's Energy Cost Savings Program as set forth in General City Law Section 25-s and 25-t. In the event that the NYPA/NYCPUS Contract is extended but NYPA refuses to approve the extension of the term of this Agreement for an allocation of 10.5 megawatts of Low-Cost Power, NYCPUS shall use best efforts to obtain any required approvals for the extension of the term of this Agreement for up to 4.5 megawatts of NYCPUS' Reserved Allocation. -21- Article 6 - USE OF SERVICE 6.0 All Low-Cost Power sold and distributed hereunder shall be used by Customer for its own use according to the schedule set forth in Article 5, supra. Customer agrees not to resell or otherwise redistribute such Low-Cost Power to any other Persons other than "Permitted Users" (hereinafter defined). For purposes hereof, Permitted Users shall mean subtenants, licensees and other occupants of the Project whose presence at the project facilitates or is in connection with Customer's use of the Project for printing and uses related thereto. For example, if Customer were to sublease to an operator a garage on the Project used by Customer's vehicles, such operator would be a Permitted User. Article 7 - BILLING 7.0 Customer agrees to pay City for Low-Cost Power billed hereunder in accordance with the NYCPUS General Terms and Conditions and the NYCPUS Service Tariff No. 4. Copies of the NYCPUS General Terms and Conditions and the NYCPUS Service Tariff No. 4 are attached hereto as Exhibits V and VI. In the event that such General Terms and Conditions or Tariff No. 4 are changed, as provided by Law, Low-Cost Power supplied after such change is to be paid for in accordance with such change, except to the extent that such change would conflict with the provisions of Sections 5.3 and 7.6 hereof. NYCPUS shall provide -22- Customer with timely notice of any such change in the General Terms and Conditions or Service Tariff No. 4. 7.1 Customer agrees that, within thirty (30) days after the initiation of service hereunder, it will provide NYCPUS with a security deposit. The security deposit, as provided in 21 NYCRR 451.1 and in the NYCPUS General Terms and Conditions, shall equal Five Hundred Sixty Thousand ($560,000) Dollars. NYCPUS shall hold the security deposit in a separate interest bearing thirty (30) day, automatically renewing certificate of deposit at a Customer selected bank from a list provided by NYCPUS. The deposit shall be held in the account for two years, at which time, if Customer is not delinquent in the payment of bills to NYCPUS, the account balance with accrued interest shall be returned to Customer. If Customer is delinquent, the account balance shall be used as an offset account. Notwithstanding the foregoing, if the security deposit is returned to Customer, and Customer subsequently becomes delinquent in its payments to NYCPUS under this Agreement, or if NYCPUS determines in accordance with the applicable provisions of 21 NYCRR 451.1 and the NYCPUS General Terms and Conditions that such measure is warranted, NYCPUS may require Customer to again provide a security deposit equal to two months' estimated billings on the same terms as for the initial security deposit. -23- 7.2 For the purpose of rendering bills to Customer, the actual demand and billing demand under this Agreement shall be determined in accordance with the NYCPUS applicable Service Tariff. 7.3 The City will submit bills to Customer in accordance with the provisions set forth in the General Terms and Conditions. In the event that there is a dispute on any item of a current bill rendered by the City, Customer shall pay such bill in its entirety within the prescribed period; provided, however, that upon delivery of a notice by Customer to City of a billing dispute hereunder, (i) City shall reasonably determine whether City is obligated to currently pay any such disputed amount to Delivery Agent or NYPA, in which case Customer is obligated to currently pay such disputed amount to City, and (ii) if City has a defense to avoid current payment of such disputed amount, City shall assert such defense in which case Customer may avoid current payment of such disputed amount to City. The City shall promptly notify Customer of its determination regarding obligations for current payment. In any event, including disputes regarding past bills, City shall diligently pursue any defense to payment available to it against third parties in order to resolve any billing dispute arising hereunder. If Customer is obligated to pay disputed amounts and it is thereafter determined that Customer should not have been obligated to pay all or any portion of such amounts, an appropriate refund will be made to Customer by the City, -24- together with any interest collected by the City in connection therewith. Customer may designate by written notice to City an agent for purposes of receiving bills and making payments under this Agreement, provided that any such designation shall not relieve Customer of any liability for such agent's or Customer's failure to make any payments required hereunder. 7.4 Customer shall arrange directly with Delivery Agent for establishing, reinforcing, maintaining and removing facilities related to the interconnection of Customer's facilities to those of the Delivery Agent. Customer shall be responsible for all costs lawfully charged by Delivery Agent to establish such interconnection. 7.5 Customer is on notice that pursuant to the Billing Adjustment section of the applicable Con Edison Economic Development Delivery Service Tariff, NYCPUS is authorized to act as collection agent for Con Edison regarding: (a) a billing adjustment per kilowatt/hour permitting the assessment of a charge or credit attributable to a 40-day deferred fuel cost for the billing period immediately preceding Customer's becoming a customer of NYCPUS, and (b) a charge representing PASNY's share of the savings passed on to Madison Square Garden in accordance with Section 3, Chapter 459, 1982 N.Y. Laws, allocated to service provided under the Rate Schedule. -25- 7.6 Notwithstanding anything to the contrary contained in this Agreement, throughout the term of this Agreement and any extension thereof, the rates charged to Customer for Low-Cost Power shall at all times be (i) uniform, non-discriminatory rates pursuant to applicable law, including, without limitation, Section l005(d) of the Public Authorities Law, and the most favorable Con Edison distribution rate for Low-Cost Power given to any customer in New York City and (ii) further reduced through the reduction provided by New York City's Energy Cost Savings Program as set forth in General City Law Sections 25-s and 25-t. Article 8 - APPORTIONMENT OF SERVICE 8.0 If Customer combines service under this Agreement with power and energy from other sources, the total power and energy utilized by Customer from all sources at a particular facility shall be apportioned as determined by the City, consistent with any applicable requirements of Law, NYPA, and the Delivery Agreement. The City will consult with Customer prior to determining any such apportionment. 8.1 The portion of Customer's electricity requirements at a particular facility in excess of that supplied by the City may be supplied by Con Edison and billed at the appropriate rates and charges of Con Edison's "Schedule for Electricity - PSC No. 8". If Customer receives retail electric service from both the -26- City and Con Edison at such facility, then, pursuant to the Delivery Agreement, Con Edison shall, as to the electricity purchased by Customer from Con Edison, perform all billing, metering, collection and customer service functions as it customarily performs for customers purchasing their full requirements from Con Edison. Customer, or its designated agent pursuant to Section 7.3, will deal directly with Con Edison respecting metering, billing, payment and collection for Customer's purchases from Con Edison. Article 9 - EMPLOYMENT AND POWER USAGE LEVELS 9.0 During the term of this Agreement, Customer shall, subject to the provisions of this Article 9, maintain in New York City through direct employment or subcontracting the "Minimum Production Jobs" and the "Minimum Non-Production Jobs." For purposes of this Agreement, the terms "Minimum Production Jobs" and "Minimum Non-Production Jobs" shall mean, respectively, (a) 1,000 full-time equivalent production Jobs and (b) 2,200 full-time equivalent non-production Jobs, or such lesser number of full-time equivalent production Jobs or full-time equivalent non-production Jobs, as the case may be, that Customer may request and NYCPUS may approve pursuant to the provisions of Section 9.1 hereof from time to time by written notice (the "Job Recalculation Notice") given by Customer to NYCPUS, in conjunction with Customer's annual report provided -27- pursuant to Section 9.2 hereof, as the then current number of full-time equivalent production and/or non-production Jobs. For both such categories of Jobs, such Jobs shall be associated with the 1,000 full-time equivalent production Jobs and the 2,200 full-time equivalent non-production Jobs in each case currently associated with the New York Times Newspaper in New York City and the functions performed in connection with such Jobs as of the date hereof, as such functions may evolve and be modified and as such Jobs may be replaced over the term of this Agreement. 9.1 Any Job Recalculation Notice given by Customer shall indicate the basis for the reported change in the Minimum Production Jobs and/or the Minimum Non-Production Jobs and shall indicate the effective date or dates of such changes. Notwithstanding anything to the contrary set forth in this Agreement, there shall be no reduction in Customer's Contract Demand or Maximum Power Allocation as the result of a reduction in the Minimum Production Jobs or the Minimum Non-Production Jobs if and to the extent that such reductions are due to events including, but not limited to, industry productivity trends, staffing and labor agreements, business cycles, operational needs, technological advances or temporary factors such as strikes, and Customer's rebuilding, repair, maintenance and upgrading of its facility and equipment. Each Job Recalculation Notice shall be accompanied by supporting documentation and NYCPUS shall approve any variation in employment levels with -28- respect to which Customer has submitted documentation sufficient in NYPA's and NYCPUS' reasonable opinion to establish such variation in employment levels. Promptly after its receipt of a Job Recalculation Notice, NYCPUS shall notify Customer in writing that either (a) it approves the variation in employment levels set forth in such Job Recalculation Notice or (b) it disapproves such variation in employment levels, in which event it shall set forth in detail its reasons for such disapproval and specify any variation in employment levels that it does approve. 9.2 Beginning on February 28, 1994, and on each February 28, during the term of this Agreement, Customer shall provide NYCPUS with an annual report indicating for the preceding calendar year, on a monthly basis, the total number of full-time equivalent production Jobs and full-time equivalent non-production Jobs at its facilities in New York City. NYCPUS shall provide Customer with the form of the annual report (Form RF l), which shall be in the form attached hereto as Exhibit VII, and the request for its completion, with not less than sixty days advance notice. Such report shall consist of two separate Forms RF l - one labeled "Full-Time Equivalent Production Jobs" and the other labeled "Full-Time Equivalent Non-Production Jobs" and (i) all references on Form RF 1 to forms provided to the Unemployment Insurance Division of the New York State Department of Labor shall be stricken and (ii) the -29- number of employees reported on Form RF 1 shall be the monthly number of full-time equivalent Jobs computed pursuant to Section 9.9 hereof. Such completed report shall be certified to be correct by an officer of Customer, or such other person authorized by Customer to prepare and file such report. Customer shall reasonably promptly notify NYCPUS of any material inaccuracies or changed circumstances of which Customer becomes aware which would render inaccurate or misleading in a material manner any annual report submitted to NYCPUS pursuant to this Section. NYCPUS and NYPA also shall have the right to examine and audit (but no more frequently than twice in any twelve-month period) on reasonable advance written notice all written and electronic records and data directly concerning employment levels of Customer in New York City for the purpose of determining whether the prescribed number of production and non-production Jobs are being maintained by Customer in New York City. The annual report for calendar year 1993 shall include all twelve (12) months of 1993, even though the term of this Agreement began in May, 1993. 9.3 In the event that Customer does not maintain in New York City ninety percent (90%) of the Minimum Production Jobs and the Minimum Non-Production Jobs in effect from time to time pursuant to Section 9.0 hereof, NYCPUS may, subject to the provisions of Article 14 (Force Majeure) hereof, reduce proportionately Customer's power allocation associated with such -30- category of Jobs in the manner set forth in Section 9.6 hereof. For the purposes of calculating such proportionate power reduction, 1 megawatt shall be associated with the Minimum Non-Production Jobs and the remainder of the then existing Contract Demand shall be associated with the Minimum Production Jobs. 9.4 NYCPUS shall determine compliance with the 90% minimum requirement for each calendar year by comparing the reported annual average number of production Jobs and non-production Jobs reported by Customer with the Minimum Production Jobs and the Minimum Non-Production Jobs, respectively, for such calendar year as determined pursuant to Section 9.0 hereof. For each category of Jobs, the annual average number of such Jobs shall be the sum of the monthly number of such Jobs reported pursuant to Section 9.2 hereof divided by twelve (including calendar year 1993). It is hereby stipulated that a reduction in the Contract Demand or Maximum Power Allocation pursuant to this Article shall not take place if Customer can indicate that any reduction in the number of Jobs is due to events including but not limited to, industry productivity trends, staffing and labor agreements, business cycles, operational needs, technological advances and such temporary factors as strikes and Customer's rebuilding, repair, maintenance and upgrading of its facility and equipment. -31- 9.5 If Customer does not comply with the 90% requirement and fails to cure such non-compliance within ninety (90) days after its receipt of written notice from NYCPUS, NYCPUS may, subject to the provisions of Article 14 (Force Majeure) hereof, permanently reduce the Maximum Power Allocation and the then current Contract Demand; provided, however, that all future increases in the Contract Demand, not to exceed the permanently reduced Maximum Power Allocation, are contingent upon the submission to NYCPUS of documentation sufficient in NYCPUS' reasonable opinion to establish increased load requirements. In the event that NYCPUS reduces the Contract Demand pursuant to the provisions of this Section 9.5, the reduced Contract Demand shall be determined by the formula shown below. The Maximum Power Allocation shall then be immediately reduced by the same amount as the reduction in the Contract Demand. Reduced Contract Demand = the sum of: 1.0 Megawatt x reported non-production Jobs ------------------------------------------- Minimum Non-Production Jobs plus (Contract Demand - 1.0 Megawatt) x reported production Jobs ----------------------------------------------------------- Minimum Production Jobs Immediately subsequent to any such permanent reduction, the required number of Jobs pursuant to this Agreement shall be reduced to the reported number of production and non-production -32- Jobs in the report for the immediately preceding year that resulted in such power reduction. 9.6 From and after January 1, 1996, if the average of Customer's six (6) highest Actual Demands for Low-Cost Power supplied under this Agreement in any consecutive twelve (12) month delivery period is less than 90% of the then current Contract Demand, the City may reduce the Contract Demand. The maximum amount of such reduction shall be the Contract Demand minus the amount by which the average of the six (6) highest Actual Demands in such twelve (12) month delivery period is less than 90% of the Contract Demand. Thus, for example, if the average of Customer's six (6) highest Actual Demands during a consecutive twelve (12) month period is 89% of the Contract Demand, the Contract Demand will be reduced by 1%. Any such reduction shall be rounded to the nearest 100 kilowatts. Notwithstanding anything to the contrary contained herein: (i) in the event that any such consecutive twelve (12) month period contains one or more "Summer Temporary Reduction Months" (as such term is hereinafter defined), the number of Actual Demands averaged for purposes of this Section 9.6 shall be the remainder of (a) six (6) minus (b) the number of Summer Temporary Reduction Months during such consecutive twelve (12) month period (e.g., if July and August were Summer Temporary Reduction Months, the computation to be performed hereunder would be with respect to Customer's four (4) highest Actual Demands during a consecutive twelve (12) month period) and (ii) -33- in the event that any such consecutive twelve (12) month period contains one or more "Winter Temporary Reduction Months" (as such term is hereinafter defined), the number of months in such consecutive twelve (12) month period shall be increased by the number of Winter Temporary Reduction Months (e.g., if December were a Winter Temporary Reduction Month, the computation to be performed hereunder would be with respect to Customer's six (6) highest Actual Demands during a consecutive thirteen (13) month period). For purposes hereof: (i) a "Summer Temporary Reduction Month" shall mean a "Temporary Reduction Month" (as such term is hereinafter defined) that occurs during the period designated as a Summer Billing Period by Delivery Agent and (ii) a "Winter Temporary Reduction Month" shall mean a Temporary Reduction Month that occurs during the period designated as the Winter Billing Period by Delivery Agent. For purposes hereof, a "Temporary Reduction Month" shall mean any month during which Customer's highest Actual Demand is less than 90% of the then current Contract Demand due to temporary causes such as events of force majeure, strikes, damage to or defects in the construction, design or manufacture of a facility or equipment, or the upgrading, maintenance or rebuilding of a facility or equipment. 9.7 Any permanent reduction pursuant to this Article 9 shall be made upon 60 days prior written notice to Customer, which notice shall be given after the expiration of any -34- applicable cure period, and shall be consistent with the applicable provisions of Law, the NYPA/NYCPUS Contract, and the terms of the Delivery Agreement. Before making any such reduction the City shall give Customer a full and fair opportunity to present extenuating events and circumstances and the City shall act in a reasonable manner in making its determination as to whether circumstances justify making such reductions. 9.8 Customer may, at any time after having received service, permanently reduce the Contract Demand in whole 100 kilowatt amounts; provided, however, that Customer shall provide the City with at least twelve (12) months' prior written notice of its intent to make such election and such reduction shall take place as of the first day of a NYPA Capability Period. Customer's financial obligation with regard to the Contract Demand and any other charges shall be reduced accordingly. If requested by Customer, the City will in good faith endeavor to obtain NYPA approval for such reduction within a shorter time period. 9.9 For purposes of this Agreement, monthly full-time equivalent production Jobs and monthly full-time equivalent non-production Jobs shall be computed separately, using the following formula: Monthly Full-Time = Aggregate Monthly Hours ----------------------- Equivalent Jobs Stipulated Monthly Hours -35- For purposes of this Agreement, the term "Aggregate Monthly Hours" shall mean the total number of hours credited during the month being reported on for regular time, overtime, vacation, holiday, sick leave, disability and other employer-paid hours for all production or non-production workers, as the case may be, associated with the Jobs or functions described in the last sentence of Section 9.0 hereof, whether employed by Customer, an Affiliate of Customer or one or more subcontractors or subsubcontractors of Customer or an Affiliate of Customer. For purposes of this Agreement, the term "Stipulated Monthly Hours" shall mean, with respect to each month being reported on, the product of (x) thirty-four (34) hours, multiplied by (y) the number of weeks in the month being reported on (e.g., 4 3/7 weeks in January, multiplied by 34 equals 150.6 Stipulated Monthly Hours); provided, however, that Customer may revise the term "Stipulated Hours" for purposes hereof upon submitting documentation reasonably satisfactory to NYCPUS that, due to reasons such as the renegotiation of union contracts, the average full-time employee of Customer is employed less than thirty-four (34) hours per week. Article 10 - INTENTIONALLY OMITTED -36- Article 11 - BREACH OF CONTRACT 11.0 Notwithstanding any other rights and remedies provided to the City herein or in NYCPUS's General Terms and Conditions of Service, and without derogation of such rights or remedies, the City may, after the expiration of any applicable notice, grace or cure period provided for herein, elect to terminate this Agreement if Customer materially breaches any of the following obligations hereunder: (i) the obligation to enter into the Assignment and Assumption Agreement referred to in Section 2.1 hereof by October 31, 1993 (unless Customer is delayed or prevented from doing so by the acts or omissions of EDC or the City), (ii) the obligation to cause the Construction Commencement Date to occur within ten (10) years after the date the Lease is executed, subject to Unavoidable Delays, (iii) the obligation to cause the Construction Completion Date to occur by the Scheduled Completion Date, subject to Unavoidable Delays, (iv) the obligation to make the payments required pursuant to the terms of this Agreement, (v) the obligation to avoid an Abandonment of the Project, and (vi) the obligation to comply with the Job reporting requirements set forth herein. NYCPUS shall provide Customer with written notice of breach and notice that the Agreement is subject to termination. As set forth in the General Terms and Conditions regarding discontinuance of service, NYCPUS shall afford Customer the opportunity to cure monetary breach within fifteen days after -37- delivery of such written notice. NYCPUS shall afford Customer the opportunity to cure (or commence to cure) non-monetary breach within thirty (30) days. Should Customer not cure (or commence to cure and diligently pursue such cure) within such thirty (30) day period, or agree to take such other corrective action as may be reasonably satisfactory to the Director, this Agreement is terminable if such non-monetary breach is with respect to one of the obligations described in the first sentence of this Section 11.0. In the event of a breach of the Agreement related to Customer's failure to pay NYCPUS, termination shall be in accordance with the provisions set forth in the General Terms and Conditions. 11.1 If this Agreement is terminated because either (i) Customer does not enter into the Assignment and Assumption Agreement referred to in Section 2.1 hereof by October 31, 1993 (unless Customer is delayed or prevented from doing so by the acts or omissions of EDC or the City), (ii) Customer informs EDC or NYCPUS in writing that it intends to abandon the Project, (iii) Customer fails to cause the Construction Commencement Date to occur within ten (10) years of the date the Lease is executed, subject to Unavoidable Delays, or (iv) Customer fails to complete construction of the Building by the Scheduled Completion Date, subject to Unavoidable Delays, or if any of the events described in subsections (i) through (iv) of this Section ll.l shall occur after Customer has exercised its -38- option to terminate this Agreement pursuant to Section 4.l hereof, then Customer shall be liable to repay NYCPUS the value of Customer's accrued savings, calculated as the difference between the cost of service at the then-applicable Con Edison retail rate and the cost of service from NYCPUS's Firm Industrial Economic Development Nuclear Power Service Tariff No.4, with non-compounded interest at the rate of 5.73% per annum. 11.2 The liability of Customer hereunder for Customer's failure to make payments hereunder shall be limited to the amount of such payments, with interest at the rate of one and one-half (l l/2%) percent per month from the date such payment was due until the date such payment is made. The liability of Customer hereunder for non-monetary breach of this Agreement or for any other claim against Customer arising under this Agreement other than claims described in the first sentence of this Section 11.2, shall be limited to Customer's accrued savings, calculated in accordance with the provisions of Section 11.1 hereof. None of the directors, officers, principals, partners, shareholders, employees, agents or servants of Customer shall have any liability (personal or otherwise) under this Agreement. This Section 11.2 shall survive the expiration of this Agreement. -39- 11.3 Customer and NYCPUS anticipate that the Lease will be finalized and entered into prior to October 31, 1993. Customer, the City and EDC have not, as of the date hereof, reached agreement as to the covenants applicable to Customer that should be included in the Lease (the "Non-Discrimination and Affirmative Action Covenants") with respect to: (i) discrimination against employees or applicants for employment because of race, creed, religion, color or certain other statuses with respect to employment decisions, (ii) the statement in solicitations or advertisements for employees by or on behalf of Customer that all qualified applicants will be afforded equal employment opportunity, (iii) non-discrimination against minority and women-owned businesses in the awarding of contracts and subcontracts and (iv) the submission of workforce utilization analyses. Customer, the City, and EDC have also not reached agreement, as of the date hereof, as to the remedies (the "Affirmative Action Remedies") that should be available in the event of a breach by Customer of the Non-Discrimination and Affirmative Action Covenants. Customer and NYCPUS hereby agree that upon the execution and delivery of the Lease and the Assignment and Assumption Agreement in connection therewith, the Non-Discrimination and Affirmative Action Covenants and the Affirmative Action Remedies will be deemed to be incorporated herein by reference (such incorporation by reference to be retroactive to the date of -40- this Agreement), except to the extent that their application would be inapplicable to this Agreement or the context may otherwise require; provided, however, that: (i) any restrictions contained in the Lease with respect to the utilization or application of the Affirmative Action Remedies shall also be applicable to NYCPUS and NYPA hereunder and (ii) in no event may NYCPUS or NYPA terminate or seek to terminate this Agreement, reduce or suspend Customer's Contract Demand or Maximum Power Allocation, or increase the rates charged to Customer for Low-Cost Power as the result of a breach of the Non-Discrimination and Affirmative Action Covenants. Article 12 - THIRD PARTY BENEFICIARY Pursuant to NYPA's Procedures for Allocation of Industrial Power and Enforcement of Contracts (21 NYCRR Part 370), NYPA shall be a third party beneficiary of the contractual commitments made by Customer under this Agreement, including the provisions of Article 2 (Investment in Real Property and Jobs retention), Article 9 (Employment and Power Usage Levels) and Article 10 (Affirmative Action), and NYPA shall have the independent right to enforce all such commitments. -41- Article 13 - RECORDS Customer agrees to maintain any and all books, documents, papers and records which are directly pertinent to, and to the extent necessary to confirm Customer's compliance with, its obligations under this Agreement, including the real property investment, Jobs and affirmative action requirements described herein, for a period of six (6) years after Customer's compliance with such obligations and to grant access to such records to the City or NYPA or any of their duly authorized representatives for the purpose of making audits, examinations, excerpts, and transcriptions. Article 14 - FORCE MAJEURE The term "force majeure" as used herein, shall include but not be limited to destruction, condemnation, repairs, rebuilding or defects in the construction, design or manufacture of part or all of Customer's 43rd Street Facility or the Project or the equipment located in either such facility, acts of God, fires, floods, storms, strikes, labor disputes, riots, insurrections, acts of war (whether declared or otherwise), unforeseeable acts of governmental, regulatory, or judicial bodies, or any other unforeseeable causes beyond the reasonable control of the party claiming force majeure. If either party because of force majeure is rendered wholly or partly unable to perform its obligations under this Agreement, -42- except for the obligation to make payments of money, that party shall be excused from whatever performance is affected by the force majeure to the extent so affected, provided that: (a) the non-performing party, within thirty (30) days after it becomes aware or should have become aware that it would be unable to perform, gives the other party written notice describing the particulars of the occurrence; (b) the suspension of performance is of no greater scope and of no longer duration than is required by the force majeure; (c) no obligations of either party which arose before the occurrence causing the suspension of performance are excused as a result of the occurrence; and (d) the non-performing party endeavors to remedy its inability to perform. This subparagraph shall not require the settlement of any strike, walkout, lockout or other labor dispute on terms which, in the sole judgment of the party involved in the dispute, are contrary to its interest. It is understood and agreed that the settlement of strikes, walkouts, lockouts or other labor disputes shall be entirely within the discretion of the party having the difficulty. Customer shall assume the risk for any and all Contract Demand charges and/or other minimum charges which are lawfully due and owing under NYCPUS' applicable tariff, and Customer shall pay any and all such amounts to the City when due, regardless of the occurrence of -43- force majeure, as defined in this Article, except to the extent that this Agreement expressly provides to the contrary. Upon the occurrence and continuance of an event of force majeure, the City agrees to use its best efforts to obtain from NYPA or Delivery Agent a temporary reduction in the applicable Contract Demand, or a waiver of Contract Demand or other minimum charges, to the extent Customer's electricity requirements are reduced by the occurrence and continuance of such event of force majeure. Article 15 - ASSIGNABILITY OF AGREEMENT This Agreement shall not be assigned without the prior consent of the City. Any assignee of the rights of the Customer hereunder shall be subject to all of the terms of this Agreement. Notwithstanding anything to the contrary contained herein, Customer shall have the right to assign this Agreement to an Affiliate of Customer without the City's consent. Notwithstanding such an assignment, Customer shall remain fully liable with the performance and observance of the obligations of Customer under this Agreement. Article 16 - NOTICES All notices under this Agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes as of the date when sent by hand, or by a national -44- overnight courier service, or by certified or registered mail, return receipt requested, and addressed as follows (or to such other addresses as may from time to time be designated by the City or Customer by notice delivered to the other in accordance with this Article 16): For the City: Director New York City Public Utility Service 75 Park Place - Sixth Floor New York, New York 10007 For Customer: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Solomon B. Watson IV, Esq. General Counsel and to: The New York Times Company 229 West 43rd Street New York, New York 10036 Attention: Mr. David Thurm Executive Director of Project Development with a copy in the same manner sent to Customer to: Bachner, Tally, Polevoy & Misher 380 Madison Avenue New York, New York 10017 Attention: Martin D. Polevoy, Esq. Article 17 - MODIFICATIONS TO AGREEMENT All previous communications between the parties hereto, either verbal or written, with reference to the subject matter -45- of this Agreement are hereby abrogated, and this Agreement, duly accepted and approved, constitutes the Agreement between the parties hereto, and no modifications of this Agreement shall be binding upon the parties or either of them unless such modifications shall be in writing, duly accepted by Customer and executed by NYCPUS. IN WITNESS WHEREOF, the Parties have executed this Agreement made as of this May 3, 1993 at New York, New York. Approved as to form: THE CITY OF NEW YORK /s/ By: /s/ - ---------------------------- ---------------------------- Acting Corporation Counsel Director, New York City of the City of New York Public Utility Service THE NEW YORK TIMES NEWSPAPER DIVISON OF THE NEW YORK TIMES COMPANY By: /s/ ---------------------------- -46- EXHIBIT IV ---------- April 27, 1993 5. Allocation of FitzPatrick Power to Citibank, N.A., Republic New York Corporation, and New York Times Company -------------------------------------------------- The President submitted the following report: SUMMARY - ------- "The Trustees are requested to approve the allocation of FitzPatrick industrial power to Citibank, N.A. ('Citibank'), Republic New York Corporation ('Republic'), and the New York Times Newspaper Division of the New York Times Company ('New York Times') as listed in Exhibit '5-A'. BACKGROUND - ---------- "On March 4, 1993, the Economic Development Power Allocation Board ('EDPAB') recommended the allocation of 6.6 MW of Economic Development Power ('EDP') to Citibank and 1.0 MW to Republic for job retention purposes. The applicable provisions of the Economic Development Law require the unanimous approval of all four EDPAB members for job retention allocations. The three members present on March 4, 1993, voted in favor of approval. EDPAB intends to meet again within several months to ratify these recommendations. In the interim it is recommended that the Authority make temporary allocations of FitzPatrick power to the companies. When EDPAB confirms its recommendation to the Authority, the necessary permanent EDP power allocations would commence. "On November 24, 1992, the Trustees approved the allocation of 6.0 MW of EDP to the New York Times on the basis of a recommendation by EDPAB. The New York City Public Utility Service ('NYCPUS') has requested the allocation of an additional 4.5 MW of power from the 50 MW block of FitzPatrick industrial power reserved for NYCPUS and other downstate municipal distribution agencies ('MDAs'). Approximately 33 MW of this amount were reserved for NYCPUS. "The proposed FitzPatrick allocations would be sold to NYCPUS under an existing Authority contract for resale to the designated consumers. Service to these companies would commence on or about May 1, 1993. DISCUSSION - ---------- "Citibank is consolidating its operations and evaluating relocation options for several divisions particularly its Financial Institutions and Transaction Services Group ('FITS') which has an existing operation in Tampa, Florida. After discussions with the New York City Economic Development Corporation ('NYCEDC'), Citibank has proposed to commit to retain most of its non-retail employees in New York City, as well as to bring some jobs into the city, primarily at four facilities which would be renovated and upgraded at a cost of $73 million. "Citibank has requested 6.6 MW of EDP for the energy intensive FITS operation which will be enlarged at 111 Wall Street. Citibank would commit to maintain at least 10,500 non-retail jobs in New York City (1,428 of these jobs would be consolidated at 111 Wall Street), resulting in a ratio of 1,590 jobs per megawatt. The renovation projects will utilize energy efficient air handling and lighting equipment. Savings are estimated to be approximately $700,000 annually over Consolidated Edison Company of New York, Inc. ('Con Edison's') standard rates for the full allocation which would have a term ending June 30, 2010. "Republic is a New York City-based commercial bank which has acquired the Manhattan Savings Bank and Williamsburg Savings Bank. The bank has examined space options for its growing operations. The lowest cost sites are in New Jersey, but NYCEDC has discussed incentives that would help reduce the cost gap, including an allocation of EDP for back office operations in Brooklyn. With the proposed 1.0 MW allocation, Republic would relocate and consolidate its back office and training facilities at 1 Hanson Place, Brooklyn, and commit to retain 562 jobs at this location. The bank would also retain at least 1,462 jobs city-wide. Approximately $4.6 million would be invested in the Brooklyn building. Energy conservation measures include the installation of thermopane replacement windows and high efficiency lighting and investigation of gas absorption air conditioning for the building. The 15 year allocation will save an estimated $55,000 annually over Con Edison's standard rates. "On November 24, 1992, the Trustees approved the allocation of 6.0 MW of EDP to the New York Times in connection with a proposal to construct a 1.2 million square foot printing and distribution facility in College Point, Queens and to maintain -2- a total of 3,000 newspaper jobs in New York City. Beginning in May 1993, this power will be used at the New York Times facility on West 43rd Street. When the College Point plant is opened, the EDP will be transferred to that site. "NYCPUS has requested allocation of an additional 4.5 MW to supply to the College Point plant to the extent its total demand exceeds the 6.0 MW EDP allocation. The total job commitment would be increased to 3,200 jobs, including 1,000 production (printing and distribution) and 2,200 non-production jobs. The increased allocation would be made from the quantity of FitzPatrick power reserved for NYCPUS as a downstate MDA contingent upon withdrawal of the required amount from other NYCPUS customers. The total 10.5 MW allocation would yield a ratio of 304 jobs per MW. "The proposed allocations have been reviewed in accordance with Part 460 of the Authority's Rules and Regulations (Procedures for Allocation of Industrial Power and Enforcement of Contracts (21 NYCRR 460 (1988)). The NYCPUS agreements with Citibank, Republic, and the New York Times (Exhibits '5-B' - '5-D') provide for reductions in an allocation in the event that employment or power usage levels are not maintained at specified levels. Reports regarding employment and affirmative action commitments and, for job retention purposes, investment in real property will be submitted to the Authority as provided by Section 460.4 of the Authority's Rules and Regulations. The contracts between NYCPUS and each of its proposed customers require approval of the Authority's Vice President - Industrial Economic Development. RECOMMENDATION - -------------- "The Vice President - Industrial Economic Development recommends that the Trustees approve the allocation of FitzPatrick Industrial Power to Citibank, Republic, and the New York Times as described herein. "The Senior Vice President - Power Contracts, the Senior Vice President and General Counsel, the Executive Vice President - Marketing and Development, and I concur in the recommendation." In response to questions from Trustee Miller, Mr. Woods ------------------------------------------------------- explained the job retention framework established by Chapter 32 - --------------------------------------------------------------- of the Laws of 1987 as well as the procedures adopted and - --------------------------------------------------------- implemented pursuant thereto by the Economic Development Power - -------------------------------------------------------------- Allocation Board. - ----------------- -3- The following resolution, as recommended by the President, was unanimously adopted: WHEREAS, the Economic Development Power Allocation Board has recommended allocations of Economic Development Power to Citibank, N.A. and Republic New York Corporation; and WHEREAS, the New York City Public Utility Service has requested the approval of an allocation of FitzPatrick industrial power to the New York Times Newspaper Division of the New York Times Company; NOW THEREFORE BE IT RESOLVED, That the Authority hereby approves the allocation of FitzPatrick industrial power to the companies described in the foregoing report of the President substantially in accordance with the terms described in such memorandum; and be it further RESOLVED, That the resale contracts between the New York City Public Utility Service and its customers described in the foregoing report of the President be subject to approval by the Vice President - Industrial Economic Development; and be it further RESOLVED, That the Senior Vice President - Power Contracts or his designee be, and hereby is, authorized to execute any and all documents necessary or desirable to effectuate the above allocations. -4- EXHIBIT V --------- GENERAL TERMS AND CONDITIONS APPLICABLE TO THE RATES AND CHARGES OF THE NEW YORK CITY PUBLIC UTILITY SERVICE ---------------------------------------- The following terms and conditions shall apply to electric service rendered by the New York City Public Utility Service: 1. Definitions ----------- "City" The City of New York. "Con Edison" Consolidated Edison Company of New York, Inc. "EDPAB" New York State Economic Development Power Allocation Board. "NYCPUS" New York City Public Utility Service. "NYPA" Power Authority of the State of New York (also known as the New York Power Authority). "Lease and Operating Agreement" The Lease and Operating Agreement between the City of New York and Consolidated Edison Company of New York, Inc., governing the delivery of Niagara/St. Lawrence hydropower, dated July 1, 1985, and any renewals or amendments thereof. "FitzPatrick Delivery Agreement" The agreement between the City of New York and Consolidated Edison Company of New York, Inc., governing the delivery of FitzPatrick economic development power, dated October 23, 1987, as amended, and any renewals or amendments thereof. "NYCRR" Official Compilation of Codes, Rules and Regulations of the State of New York. "City's Consumers" Any retail customer of NYCPUS receiving electric service pursuant to a NYCPUS Service Tariff. "Industrial Economic Development Consumer" A City's Consumer who (1) applies to, and is approved by, NYCPUS for service; (2) meets the criteria established herein, including the Lease and Operating Agreement or the FitzPatrick Delivery Agreement, whichever is applicable; and (3) is approved by EDPAB and NYPA, as may be required, pursuant to 21 NYCRR Part 370 and Part 460. "Distribution Agent" or "Delivery Agent" Con Edison. 2. Applicable Criteria ------------------- Electricity service shall be supplied to City's Consumers in accordance with the following, as such may be amended from time to time, and to the extent of availability of power and energy from NYPA and access to necessary transmission and distribution facilities: - the applicable service tariffs; - the City's Application for Electric Service to NYPA, executed by the City on August 12, 1985, and the accompanying NYPA Service Tariffs, as amended; - the Lease and Operating Agreement and FitzPatrick Delivery Agreement; - Chapters IX and X of Title 21 of the Official Compilation of Codes, Rules and Regulations of the State of New York, 21 NYCRR Parts 370 and 460; and - any and all other applicable laws, rules, regulations, tariffs, rulings, orders, directives, and guidelines. 3. Rendition of Service -------------------- (a) Industrial Economic Development Consumers ----------------------------------------- Potential Industrial Economic Development Consumers desiring to receive service from NYCPUS will make an application for service to NYCPUS in such form and at such times as prescribed by NYCPUS. Applications will be processed and approved by NYCPUS in accordance with the requirements described herein and, to the extent applicable, 21 NYCRR Part 370 and 460, the applicable -2- NYCPUS service tariff, and any regulations or guidelines adopted by NYCPUS. All allocations of industrial economic development power shall be subject to approval by EDPAB and/or NYPA as required by law. Industrial Economic Development Consumers shall be required to enter into a power service agreement with NYCPUS and shall provide such information as may be required, from time to time, by NYCPUS and its Delivery Agent. Such City's Consumers shall be required to adhere to any and all applicable terms and conditions of the City's Delivery Agent. (b) Other City's Consumers ---------------------- NYCPUS shall specify the service classifications eligible to receive power and energy under applicable tariffs, in accordance with the requirements established by NYPA. Such City's Consumers shall be required to adhere to any and all applicable terms and conditions of the City's Distribution Agent. 4. Load Shapes and Load Factors ---------------------------- (a) Deliveries of power and energy to City's Consumers, except for Industrial Economic Development Consumers, shall conform to the load shape of the class of City's Consumers being served. Such power and energy which does not so conform may, at the City's option, be reflected as adjustments in future deliveries or be subject to rejection by the Distribution Agent. (b) Industrial Economic Development Consumers which purchase electricity from both the City and the City's Delivery Agent shall be supplied by both the City and the Delivery Agent at the same load factor. 5. Liability --------- (a) The City and NYCPUS shall not be liable in the event that the supply of electric service under any of the foregoing tariffs is interrupted or irregular or defective or fails from causes beyond their control or through ordinary negligence of their employees or agents. The City and NYCPUS shall not be liable for any injury, casualty or damage resulting in any way from the supply or use of electricity or from the presence or operation of any structures, equipment, wires, pipes, appliances or devices on the premises of City's Consumers or otherwise from any failure of the generation, transmission, or distribution system, except injuries or damages resulting from gross negligence on the part of NYCPUS. (b) NYCPUS will endeavor to furnish electric service continuously except: -3- (i) for interruptions or reductions due to uncontrollable forces; (ii) for temporary interruptions or reductions which, in the opinion of NYCPUS, or its suppliers and agents, are required for power system protection or for providing temporary emergency assistance to interconnecting systems; and (iii) for temporary interruptions or reductions, which, in the opinion of NYCPUS, or its suppliers or agents, are necessary or desirable for the purpose of maintenance, repairs, replacements, installation of equipment, or investigation and inspection. NYCPUS, except in case of emergency as determined by it, will give City's Consumers, to the extent practicable, reasonable advance notice of such temporary interruptions or reductions and will exercise due diligence to remove the cause thereof. 6. Distribution and Customer Billing --------------------------------- (a) Distribution Agent ------------------ All City's Consumers shall be customers of NYCPUS, not the Distribution Agent, with respect to the power and energy supplied under the foregoing service tariffs. The Distribution Agent shall be responsible only for the local transmission and distribution of power and energy to City's Consumers, and such metering, billing and/or collection functions as described herein and in the Lease and Operating Agreement or the FitzPatrick Delivery Agreement, whichever is applicable. (b) Rates and Charges ----------------- In addition to the rates and charges specified in the applicable tariffs, City's Consumers shall be required to pay, or reimburse the City, for any and all metering costs and any and all charges incurred by NYCPUS as a direct result of interconnecting City's Consumers' facilities with those of Delivery Agent and supplying electricity to said City's Consumer. (c) Deposits -------- Thirty days prior to the initiation of service, Industrial Economic Development Consumers shall be required to pay NYCPUS a deposit equal to two months estimated billings, pursuant to 21 NYCRR -4- section 451.1. The deposit shall be held by NYCPUS for a period of two years. If, after a two year period, City's Consumers are not delinquent in the payment of bills, the deposit shall be refunded promptly, no later than the next bill for service after such two year period, without prejudice to NYCPUS' right to require a future deposit if deemed necessary. Interest shall be paid on the amount deposited at a rate prescribed annually by NYPA. (d) Payment of Bills and Late Payment Charges ----------------------------------------- (i) On or about the tenth day of each month, Industrial Economic Development Consumers shall receive an estimated bill statement for the monthly billing period, indicating the number of kilowatts and and kilowatt hours estimated to be supplied by NYCPUS during the billing period and the rates and costs therefor. For each subsequent bill, NYCPUS will reconcile the estimated usage with the actual usage for the prior billing period and the reconciliation amount shall be reflected in the estimated bill for the current month. Upon termination of service, a final reconciliation of any amounts owed by City's Consumers or to be paid by NYCPUS shall be made. NYCPUS may also make such reconciliation or adjustments to its rates and charges as are authorized hereunder or in the applicable NYCPUS Service Tariff. Where an Industrial Economic Development Consumer is a retail customer of both NYCPUS and its Distribution Agent, it shall receive separate bill statements with regard to each supplier. (ii) City's Consumers (other than Industrial Economic Development Customers) shall be billed each month by the City, through its Distribution Agent. Bills rendered by NYCPUS, through its Distribution Agent, shall be payable to said agent in accordance with all applicable rules and regulations of the Distribution Agent. (iii) Payment for bill statements rendered by NYCPUS to Industrial Economic Development Consumers is due on presentation, if hand delivered, or three days after the mailing of the bill and is payable by mail, to any duly authorized collector thereof, or otherwise as may be specified in the bill statement. A late payment charge at the rate of one and one half percent (1-1/2%) per monthly billing period, or such other rate as is approved by NYPA, may be applied to the account of any Industrial Economic Development Consumer which is delinquent in the payment of its bills to NYCPUS. The charge will be -5- applied to all amounts billed, including arrears, and unpaid late payment charge amounts applied to previous bills, which are not received on or before a date specified on the bill. This includes any additional amounts in cases where NYCPUS has underbilled, or failed to bill, because the City's Consumer was receiving service through tampered equipment. The date so specified shall not be less than 20 days after the date due. The late payment charge will apply to the amounts found to be owed for each monthly billing period, including any previous late payment charges. The late payment charge will not be applied to the account of any customer who can demonstrate neither responsibility for the tampering, nor knowledge that service was received through tampered equipment. (e) Discontinuance of Service ------------------------- (i) NYCPUS may assign to its Distribution Agent the right to discontinue service or bring any legal action, as specified in this paragraph, and the Distribution Agent may take any such action on behalf of NYCPUS, consistent with the distribution agreement between the City and said agent. Notwithstanding the foregoing, NYCPUS reserves the right to discontinue service and/or to take any other action permitted by law, consistent with the applicable Lease and Operating Agreement or FitzPatrick Delivery Agreement with respect to any City's Consumer who fails to make full and timely payment of all amounts due, including amounts due for late payment charges hereunder. In the event that NYCPUS, or its Distribution Agent, discovers tampering with equipment or meters, NYCPUS reserves the right to discontinue service to any City's Consumer and/or bring any legal action consistent with said Lease and Operating Agreement or FitzPatrick Delivery Agreement, to recover damages, including reasonable attorneys fees and costs, or to take such other action as may be permitted by law. (ii) NYCPUS may discontinue service to an Industrial Economic Development Consumer for failure to pay any and all amounts due within thirty-five (35) days after payment was due. Termination will not occur until at least fifteen (15) days after written notice has been personally served upon the Industrial Economic Development Consumer or at least fifteen (15) days after NYCPUS mails written notice by registered or certified letter to such customer at the address at which service is received. If an Industrial Economic Development Consumer has requested in writing to NYCPUS to have an alternate -6- address for billing purposes, written notice shall be sent both to the alternate address and to the premises where service is received. Failure to exercise any of these termination conditions by NYCPUS shall not constitute a waiver of any rights and powers set forth herein. (f) Determination of Demand ----------------------- Demand shall be determined in accordance with the applicable provisions of the Delivery Agent's service tariffs and any contract between NYCPUS and its customers. -7- EXHIBIT VI ---------- EFFECTIVE 4/1/93 NEW YORK CITY PUBLIC UTILITY SERVICE SERVICE TARIFF NO. 4 Firm Industrial Economic Development Nuclear Service I. AVAILABILITY ------------ This rate shall be available to specific industrial economic development consumers ("Customers") designated by NYCPUS and NYPA or EDPAB, as required by law. (See General Terms and Conditions.) II. CHARACTER OF SERVICE: --------------------- Alternating current, sixty hertz, voltage as available. III. MONTHLY RATE: ------------- A. NON-TIME-OF-DAY SERVICE: ------------------------ To Customers with maximum monthly actual demands of less than 1500 KW. Customers billed under this rate whose monthly maximum demands are 1500 KW or greater for two consecutive months shall thereafter be billed under Time-of-Day Service. Power charges are billed on the basis of billing demands. Transmission and delivery charges are billed on the basis of actual demands. 1) Demand Charge: -------------- a) High Tension Service -------------------- Base Power Charge (Summer and Winter) $8.30 per KW Purchased Power Adjustment Factor $0.77 per KW Adjusted Power Charge $9.07 per KW Base Transmission Charge (Summer and Winter) $1.61 per KW Purchased Power Adjustment Factor $0.06 per KW Adjusted Transmission Charge $1.67 per KW Plus Wheeling Charges: Summer ------ 1st - 900th KW $16.47 per KW 901st KW and over $14.59 per KW Winter ------ 1st - 900th KW $11.93 per KW 901st KW and over $10.05 per KW -2- b) Low Tension Service ------------------- Base Power Charge (Summer and Winter) $8.97 per KW Purchased Power Adjustment Factor $0.35 per KW Adjusted Power Charge $9.32 per KW Base Transmission Charge (Summer and Winter) $1.74 per KW Purchased Power Adjustment Factor ($0.03) per KW Adjusted Transmission Charge $1.71 per KW Plus Wheeling Charge: Summer ------ 1st - 900th KW $18.57 per KW 901st KW and over $16.37 per KW Winter ------ 1st - 900th KW $14.03 per KW 901st KW and over $11.82 per KW 2) Energy Charge ------------- a) High Tension Service 21.55 mills per KWh Purchased Power Adjustment Factor 3.98 mills per KWh Adjusted Energy Charge 25.53 mills per KWh b) Low Tension Service 23.29 mills per KWh Purchased Power Adjustment Factor 2.95 mills per KWh Adjusted Energy Charge 26.24 mills per KWh B) TIME-OF-DAY SERVICE: -------------------- To Customers with maximum monthly actual demands of 1500 KW or greater. Customers billed under this rate whose monthly maximum demands do not exceed 900 KW for 12 consecutive months shall thereafter be billed under Non-Time-of-Day Service. Power charges are billed on the basis of billing demands. Transmission and delivery charges are billed on the basis of actual demands. 1) Demand Charge: -------------- a) High Tension Service -------------------- Base Power Charge (Summer and Winter) $8.30 per KW Purchased Power Adjustment Factor $0.77 per KW Adjusted Power Charge $9.07 per KW -3- Base Transmission Charge (Summer and Winter) $1.61 per KW Purchased Power Adjustment Factor $0.06 per KW Adjusted Transmission Charge $1.67 per KW Plus Wheeling Charges: Summer Winter ------ ------ Transmission $6.65 per KW $1.09 per KW (Monday through Friday 8:00 A.M. to 6:00 P.M.) Primary Distribution $11.90 per KW $4.88 per KW (Monday through Friday 8:00 A.M. to 10:00 P.M.) Secondary Distribution No Charge No Charge (All hours -- All days) b) Low Tension Service ------------------- Base Power Charge (Summer and Winter) $8.97 per KW Purchased Power Adjustment Factor $0.35 per KW Adjusted Transmission Charge $9.32 per KW Base Transmission Charge (Summer and Winter) $1.74 per KW Purchased Power Adjustment Factor ($0.03) per KW Adjusted Transmission Charge $1.71 per KW Plus Wheeling Charges: Summer Winter ------ ------ Transmission $6.65 per KW $1.09 per KW (Monday through Friday 8:00 A.M. to 6:00 P.M.) Primary Distribution $11.90 per KW $4.88 per KW (Monday through Friday 8:00 A.M. to 10:00 P.M.) Secondary Distribution $6.82 per KW $2.03 per KW (All hours -- All days) 2) Energy Charge ------------- a) High Tension Service 21.55 mills per KWh Purchased Power Adjustment Factor 3.98 mills per KWh Adjusted Energy Charge 25.53 mills per KWh b) Low Tension Service 23.29 mills per KWh Purchased Power Adjustment Factor 2.95 mills per KWh Adjusted Energy Charge 26.24 mills per KWh IV. PROVISIONS APPLICABLE TO RATE: ------------------------------ A. Purchased Power Adjustment Factor. The rate under this --------------------------------- tariff shall be adjusted by any changes in the delivered cost of purchased power, pursuant to 21 NYCRR Section 452.4. -4- B. Contract Demand. The maximum demand to be supplied by --------------- NYCPUS as set forth in the Power Service Agreement between a City's consumer and NYCPUS. C. Billing Demand. Billing demand shall be the greater -------------- of: a) actual demand, or b) 75 percent of the Customer's contract demand. D. Actual Demand. Actual Demand shall be the Customer's ------------- maximum 30-minute integrated demand established during the billing period, not to exceed the Contract Demand. E. Taxes. The rates and charges under this Rate Schedule ----- shall be increased by the applicable rate of gross receipts taxes, sales taxes and such other taxes as NYCPUS may be required to collect by law. EX-10.14 12 EMPLOYMENT AGREEMENT -------------------- AGREEMENT dated May 19, 1993 between AFFILIATED PUBLICATIONS, INC., a Massachusetts corporation located at 135 Morrissey Boulevard, Boston, MA 02107 (the "Company"), GLOBE NEWSPAPER COMPANY, a Massachusetts corporation located at the same address (the "Globe"), and WILLIAM O. TAYLOR, an individual residing at 339 North Street, Medfield, Massachusetts 02052 (the "Employee"). 1. Employment. The Company agrees to employ the ---------- Employee as Chairman and President of the Company and Chairman, Chief Executive Officer and Publisher of the Globe, rendering the services and performing the duties prescribed by the Company's Board of Directors. The Employee agrees, while employed hereunder, to perform his duties faithfully and to the best of his ability. The Employee shall be employed at the Company's offices in Boston, Massachusetts, and his principal duties shall be performed primarily in Boston, Massachusetts, except for business trips reasonable in number and duration. If there should be a Change in Control of the Company (as defined in Section 5.2), the Globe shall be substituted for the Company as employer and the Globe's Board of Directors shall be substituted for the Company's Board of Directors as the body prescribing the Employee's duties. 2. Term. The employment of the Employee hereunder ---- shall begin on the date hereof and shall continue through the earlier of (a) December 31, 1998 or (b) the occurrence of a Termination Date, as defined in Section 5 (the "Term"). 3. Compensation. ------------ 3.1. As compensation for the Employee's services during the Term, the Company shall pay the Employee an annual base salary at the rate of $382,000 per year, payable weekly. Prior to the end of each year during the Term, the Company shall undertake an evaluation of the services of the Employee during the year then ended in accordance with the Company's Compensation Program at the date hereof (the "Program"). The Company shall consider the performance of the Employee, his contribution to the success of the Company and entities under common control with the Company (collectively, -2- "Affiliates"), and other factors and shall fix an annual base salary to be paid to the Employee during the ensuing year. 3.2. Notwithstanding the foregoing, the Company may change the Program from time to time or institute a successor to the Program, but the Employee's annual base salary shall in no event be less than his annual base salary in effect on the date of change adjusted regularly to reflect increases in the cost of living. 3.3. If the Employee is prevented by disability, for a period of six consecutive months, from continuing fully to perform his obligations hereunder, the Employee shall perform his obligations hereunder to the extent he is able and the Company may reduce his annual base salary to reflect the extent of the disability; provided that in no event may such rate, when added to payments received by him under any disability or qualified retirement or pension plan to which the Company or an Affiliate contributes or has contributed, be less than one-half of the annual base salary in effect at the time that such disability commenced. If there should be a dispute about the Employee's disability, disability shall be determined by the Board of Directors of the Company based upon a report from a physician who shall have examined the Employee. If the Employee claims disability, the Employee agrees to submit to a physical examination at any reasonable time or times by a qualified physician designated by the Chief Executive Officer and reasonably acceptable to the Employee. 4. Employee Benefits. The Employee shall be entitled ----------------- to participate in all "employee pension benefit plans," all "employee welfare benefit plans" (each as defined in the Employee Retirement Income Security Act of 1974) and all pay practices and other compensation arrangements maintained by the Company, on a basis at least as advantageous to the Employee as the basis on which other similarly situated executive employees of the Company are eligible to participate and, except as provided in Section 4.2, on a basis at least as advantageous to the Employee as the basis on which he participates therein on the date hereof. Without limiting the generality of the foregoing, the Employee shall be entitled to the following employee benefits (collectively, with the benefits contemplated by this Section 4, the "Benefits"): 4.1. The Employee shall continue to participate in the Supplemental Executive Retirement Plan under the formula in effect on the date hereof; provided that the Company may from time to time change the Plan or institute a successor to the Plan, so long as the -3- Employee continues to be entitled to receive benefits in amounts at least equal to those specified in the Plan as in effect on the date hereof. 4.2. The Employee and the Employee's dependents shall be covered by medical insurance comparable in scope to the coverage afforded on the date hereof, with only such contribution by the Employee toward the cost of such insurance as may be required from time to time from other employees at his level in the Program. If a Change in Control of the Company, as defined in Section 5.2.2, shall have occurred, the Company may not change the carriers providing medical insurance immediately before the change without the consent of the Employee, which consent will not unreasonably be withheld. 4.3. The Employee shall be covered by the cash bonus plan currently maintained by the Company and shall be afforded the opportunity thereunder to receive awards of percentages of annual base salary specified for his level in the Program, to be awarded upon the achievement of reasonable performance goals; provided that the Company may from time to time change the Program or institute a successor to the Program, so long as the Employee continues to be eligible to receive cash bonus awards of percentages of annual base salary in amounts at least equal to those specified for his level in the Program as in effect on the date hereof. 4.4. The Employee shall be eligible each year during the term of this Agreement to receive stock options under a stock option plan maintained by the Company for such numbers of shares and upon such terms and conditions as determined by the Company's Compensation Committee. If the Company no longer has a class of stock publicly-traded by reason of a Change in Control of the Company, as defined in Section 5.2.2, the Company's obligation under this Section 4.4 will be satisfied through options granted by the issuer with public stock then in control of the Company. 4.5. The Company agrees that if the Employee dies during the term of this Agreement, the Employee's then spouse for the duration of her life shall be entitled to monthly payments equal to 2.5% of the Employee's annual base salary in effect at the time of his death ("Salary at Death"). If the Employee is survived by one or more children less than 23 years of age, 1.25% of the Salary at Death shall be paid to or for each such child until that child reaches 23 years of age, provided that each payment to or for children shall be proportionately reduced so that the aggregate of the payments for any month to the spouse and to or for the children shall not -4- exceed 4.167% of the Salary at Death. The aggregate payments shall be proportionately reduced by the Family Death Benefits and/or the Normal Form for Married Participant benefit received by the spouse and children or other beneficiaries under any qualified retirement or pension plan to which the Company or any Affiliate contributes or has contributed (for example, the Family Death Benefit provided by subsection 6.1 of the Globe Newspaper Company Retirement Plan and the Normal Form for Married Participant Benefit provided by subsection 4.3 of that Plan), but in addition to any other death benefits to which the spouse, the children or other beneficiaries may be entitled under any other retirement plan or agreement maintained by the Company or any Affiliate. Payment to or for a child shall be made to the child or to a custodian for the child under the Uniform Transfers to Minors Act (or similar legislation) or to a trust for the benefit of the child, whether alone or with his or her siblings, as designated by the Employee or, in the absence of effective designation, as determined by the Company in its discretion. 4.6. The Employee shall be entitled to receive a resignation bonus under the Company's Resignation Bonus Plan as in effect on the date hereof, based on compensation and service to the date of termination. 4.7. The Company shall reimburse the Employee from time to time for the reasonable expenses incurred by the Employee in connection with the performance of his obligations hereunder. 4.8. The Employee shall be entitled to legal holidays and to annual paid vacation in accordance with the Company's holiday and vacation policy on the date hereof. 4.9. The Company shall reimburse the Employee for financial counseling services received, up to $10,000 per year, and shall gross up the reimbursement so that it will not increase the federal or state income tax payable by the Employee. 4.10. The Employee shall be entitled to an automobile, including maintenance and expenses, under the practice in effect on the date hereof. Notwithstanding the foregoing, the Company may from time to time change or substitute a plan or program under which one or more of the Benefits are provided to the Employee, provided that the Company first obtains the written consent of the Employee, which the Employee agrees not unreasonably to withhold, taking into account his personal situation. -5- 5. Termination Date; Consequences for Compensation and ---------------------------------------------------- Benefits -------- 5.1. Definition of Termination Date. The first to ------------------------------- occur of the following events shall be the Termination Date: 5.1.1. The date on which the Employee becomes entitled to receive long-term or shortterm disability payments by reason of total and permanent disability; 5.1.2. The Employee's death; 5.1.3. Voluntary resignation after one of the following events shall have occurred, which event shall be specified to the Company by the Employee at the time of resignation: material reduction in the responsibility, authority, power or duty of the Employee or a material breach by the Company of any provision of this Agreement, which breach continues for 30 days following notice by the Employee to the Company setting forth the nature of the breach ("Resignation with Reason"); 5.1.4. Voluntary resignation not accompanied by a notice of reason described in Section 5.1.3 ("General Resignation"); 5.1.5. Discharge of the Employee by the Company after one of the following events shall have occurred, which event shall be specified to the Employee by the Company at the time of discharge: of a material act by the Employee against the Company involving moral turpitude, material willful misconduct in the discharge of his duties, conviction of the Employee or the entry of a plea of guilty or nolo contendere by the Employee to any crime involving moral turpitude, or any material breach of any term of this Agreement by the Employee which is not cured within 30 days after written notice from the Board of Directors of the Company to the Employee setting forth the nature of the breach ("Discharge for Cause"); 5.1.6. Discharge of the Employee by the Company not accompanied by a notice of cause described in Section 5.1.5 ("General Discharge"). 5.2. Consequences for Compensation and Benefits. ---------------------------------------------- Following a Termination Date or expiration of this Agreement and through December 31, 2003, the Company will furnish to the Employee, at no cost to the -6- Employee, full office facilities with at least half-time secretarial services at a location selected by the Employee off the site of the Company's operations. If the Termination Date occurs by reason of disability, death, General Resignation, Discharge for Cause or, before a Change in Control of the Company, Resignation with Reason, the Company shall pay compensation to the Employee through the Termination Date and shall pay to the Employee all Benefits accrued through the Termination Date, payable in accordance with the respective terms of the plans, practices and arrangements under which the Benefits were accrued. If the Termination Date occurs by reason of General Discharge or, after a Change in Control of the Company, Resignation with Reason, (a) all stock options held by the Employee shall become immediately exercisable and shall remain exercisable for 30 days after the Termination Date, (b) the Company shall continue the health coverage contemplated by Section 4.2 through December 31, 1998, (c) the Company shall engage for the Executive, at the Company's expense, outplacement services appropriate to the Executive's position, for up to twelve months after the Termination Date, and (d) the Employee shall be entitled to receive, within 60 days after the Termination Date, the amount set forth in Section 5.2.1 or, if Section 5.2.2 is applicable and yields an amount equal to more than 90% of the amount set forth in Section 5.2.1 net after all applicable taxes, the amount set forth in Section 5.2.2. 5.2.1. The present value, calculated using the Pension Benefit Guaranty Corporation immediate discount rate for valuing benefits upon plan termination, of (a) the sum of (i) 125% of the Employee's annual base salary at the Termination Date and (ii) the target bonus for the year in which the Termination Date occurs, (b) multiplied by the number of weeks between the Termination Date and December 31, 1998 and (c) divided by 52. 5.2.2. If a Change in Control of the Company shall have occurred before the Termination Date, one dollar less than the amount which is three times the Employee's "base amount" of compensation and benefits, as defined in Section 280G of the Internal Revenue Code of 1986. A Change in Control of the Company shall occur upon the first to occur of the date when (a) persons who were Directors of the Company on May 19, 1993 no longer constitute a majority of the Board of Directors of the Company or (b) a person other than the trustees of -7- either or both of the (i) Taylor Voting Trust created by an agreement dated October 1, 1954, as from time to time amended, or (ii) the trust created under the will of Eben D. Jordan or any voting trust created to supersede or succeed such testamentary trust, "beneficially owns" (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934) in the aggregate 50% or more of the outstanding shares of capital stock entitled to vote generally in the election of the Directors of the Company. If the payments made pursuant to this Section 5.2 give rise to an excise tax under Section 4999 of the Internal Revenue Code of 1986, the Company shall also pay to the Employee or directly to the Internal Revenue Service in a timely fashion an amount sufficient, after federal and state income taxes, to pay the excise tax so payable and all directly related interest and penalties (whether reported initially or subsequently assessed). In the event of a dispute between the Company and the Employee with respect to the amount contemplated by the preceding sentence, the matter shall be determined (at the Company's expense) by an independent nationally-recognized accounting firm reasonably acceptable to both parties; provided, however, that the Employee shall cooperate with the Company in his tax reporting position and any defense thereof (which the Company shall control) in order to minimize the amount of such payments to the extent the Company has a reasonable legal basis therefor. 5.3. Liquidated Damages; No Duty to Mitigate ----------------------------------------------- Damages. The amounts payable pursuant to Section 5.2 ------- shall be deemed liquidated damages for the early termination of this Agreement and shall be paid to the Employee regardless of any income the Employee may receive from any other employer, and the Employee shall have no duty of any kind to seek employment from any other employer during the balance of the Term. 6. Indemnification. The Company shall indemnify the --------------- Employee against all loss, cost, liability and expense arising from the Employee's service to the Company or any Affiliate, whether as officer, director, employee, fiduciary of any employee benefit plan or otherwise, upon terms at least as favorable to the Employee as those provided by the Articles of Organization and By-laws of the Company on the date hereof. 7. Agreement Not to Compete. The Employee agrees -------------------------- that, while serving as an Employee of the Company, he will not serve as an employee or director of any business entity other than the Company and its Affiliates, but may serve as a director of a reasonable number of not-for-profit corporations and may devote a reasonable amount of time to -8- charitable and community service. For the period beginning on the Termination Date and continuing for the number of weeks or years specified below opposite the termination benefit payable to the Employee, the Employee shall not engage, directly or indirectly, in the newspaper business in the Boston Consolidated Metropolitan Statistical Area as defined on December 31, 1992: Termination Benefit Period ----------- ------- ------ Amount set forth in Longer of (a) number of Section 5.2.1 weeks between Termination Date and December 31, 1988 or (b) one year Amount set forth in 3 years in Section 5.2.2 Neither the amount set 1 year forth in Section 5.2.1 nor the amount set forth in Section 5.2.2 The Employee may hold stock or a limited partnership interest of 5% or less in any publicly-traded entity engaged in such newspaper business without violating this Agreement. 8. Agreement Not to Solicit. For one year following ------------------------- any Termination Date, regardless of the reason, the Employee shall not solicit any employee of the Company or an Affiliate to leave such employment and to provide services to the Employee or any business entity by which the Employee is employed or in which the Employee has a material financial interest. Soliciting a former employee of the Company and its Affiliates to provide such services shall not be a violation of this Agreement. 9. Confidential Information. Unless the Employee ------------------------- shall first secure consent of the Company, the Employee shall not disclose or use, either during or after the Term, any secret or confidential information of the Company or any Affiliate, whether or not developed by the Employee, except as required by his duties to the Company or the Affiliate. 10. Arbitration. In the event that any party hereto ----------- has any claim hereunder, the party shall promptly notify each other party of such claim. If within 30 days of the receipt of such notice of claim, the parties cannot agree on a resolution of such claim, the parties agree to submit such dispute to binding arbitration to be held in Boston, Massachusetts under the rules of the American Arbitration Association. Any such arbitration shall be conducted by -9- three arbitrators, one of whom shall be selected by the Employee, one of whom shall be selected by the Company and the Globe and one of whom shall be selected by the arbitrators so selected. The expenses of any such arbitration shall be paid by the non-prevailing party, as determined by the final order of the arbitrators. 11. Guarantee. The Globe guarantees the full and --------- prompt payment and performance by the Company of all its obligations under this Agreement. This guarantee is in consideration of past and future services by the Employee to the Globe, and this guarantee is intended to take effect as a sealed instrument under the laws of Massachusetts. 12. Notices. Whenever under this Agreement any notice ------- is to be given by the Company, the Globe or the Employee to the others, such notice shall be written and shall be delivered by hand, if to the Company or the Globe, at 135 Morrissey Boulevard, Boston, MA 02107, Attention: Treasurer, and if to the Employee, at his address specified above or at such other address as the Employee shall furnish to the Company in writing. 13. Governing Law. This Agreement shall be deemed a -------------- contract made and performed in the Commonwealth of Massachusetts, and shall be governed by the laws of the Commonwealth of Massachusetts. 14. Entire Agreement; Amendment. This Agreement ------------------------------ constitutes the entire agreement of the parties. This Agreement supersedes the Agreement between the Globe and the Employee dated October 24, 1986 and any other individual agreement between the Employee and the Company and/or the Globe and may be altered or amended or any provision hereof waived only by an agreement in writing signed by the party against whom enforcement of any alteration, amendment, or waiver is sought. No waiver by any party of any breach of this Agreement shall be considered as a waiver of any subsequent breach. 15. Binding Obligations. This Agreement shall be -------------------- binding upon and inure to the benefit of the Company and the Globe and their successors and assigns and the Employee and his personal representatives. 16. Assignability. Neither this Agreement nor any ------------ benefits payable to the Employee hereunder shall be assigned, pledged, anticipated, or otherwise alienated by the Employee, or subject to attachment or other legal process by any creditor of the Employee, and notwithstanding any attempted assignment, pledge, anticipation, alienation, attachment, or other legal process, any benefit payable to the Employee hereunder shall be paid only to the Employee or his estate. -10- IN WITNESS WHEREOF, the Company and the Globe, by their officers hereunto duly authorized, and the Employee have signed and sealed this Agreement as of the date first written above. AFFILIATED PUBLICATIONS, INC. By: s/ William B. Huff --------------------------- Executive Vice President GLOBE NEWSPAPER COMPANY By: s/ Richard C. Ockerbloom --------------------------- President s/ William O. Taylor ------------------------------- William O. Taylor EX-10.16 13 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN -------------------------------------- Affiliated Publications, Inc. (the "Company") hereby restates, effective September 15, 1993, this Executive Supplemental Retirement Plan, previously known as the Executive Deferred Compensation Plan I, (the "Plan") for the benefit of executives of the Company and its affiliates listed on Exhibit A (collectively, the "Executives"): ------- - 1. Purpose. The purpose of this Plan is to provide ------- supplemental retirement payments and supplemental death payments for Executives in salary grade 15 and above who become entitled to receive benefits under the Globe Newspaper Company Retirement Plan, as in effect from time to time (the "Retirement Plan"). Capitalized terms used herein shall have the meanings given them in the Retirement Plan unless otherwise defined in this Plan. 2. Supplemental Retirement Payments. The Company or an ------------ ---------- -------- affiliate shall pay to each Executive who has completed 36 months in this Plan (or to such person or persons as may at that time be entitled to receive payments with respect to such an Executive under the Retirement Plan) the amount by which (a) any benefit that would have been payable under the Retirement Plan if (i) the expression "1.83-1/3%" in the definition of "Gross Amount" in the Retirement Plan were changed to "2%," and (ii) clause (b) of the definition of --- "Gross Amount" were changed to read "the number of his/her Years of Accrual Service not in excess of 25 plus, if the Executive had more than 25 Years of Accrual Service, his/her Additional Earned Service, as defined in Section 2 of the Supplemental Executive Retirement Plan" and (iii) his/her --- regular compensation and regular annual bonuses (including any amounts deferred under the Affiliated Publications, Inc. Deferment Plan for Key Executives) were included in the calculation of the accrued amount under the Retirement Plan (except that for purposes of calculating this amount, the period used for calculating the average monthly rate of compensation will be the 260 consecutive weeks prior to normal retirement date or date of earlier termination), and --- (iv) the amount so calculated were payable without reference to any benefit limits affecting the Executive other than limits on the Family Death Benefit exceeds (b) the sum of (i) the benefit actually paid from time to time under the -2- Retirement Plan and (ii) the appropriate offset amount, as defined in the Retirement Plan. The amount payable with respect to an Executive who shall have completed less than 36 months in this plan shall be calculated as set forth in the preceding sentence but excluding therefrom all service and compensation before the Executive became listed on Exhibit A. ------- - Supplemental retirement payments hereunder shall be made on the same dates and over the same period as payments under the Retirement Plan are made. The Additional Earned Service for any Executive who was in salary grade 15 or 16 when last employed by the Company or an affiliate shall be .5 times the number by which the Executive's Years of Accrual Service, not to exceed 30, exceed 25; and the Additional Earned Service for any Executive who was in salary grade 17 or higher when last employed shall be .75 times the number by which the Executive's Years of Accrual Service, not to exceed 35, exceed 25. Exhibit A shall state for each employed Executive his/her ------- - salary grade. 3. Return to Active Employment Following Commencement of ------ -- ------ ---------- --------- ------------ -- Benefit. In the event an Executive who has begun to receive a ------- benefit hereunder is reemployed by the Company or an affiliate and his/her benefit under the Retirement Plan is suspended, his/her benefit shall be suspended during the period of such reemployment that benefits under the Retirement Plan are suspended. Upon his/her subsequent retirement or earlier termination of employment, he/she shall become entitled to an increased benefit, reduced by the actuarial equivalent of the payments made to him/her prior to reemployment. 4. Supplemental Death Payments. The Company, directly ------------ ----- -------- or through an insurance trust or other vehicle, shall pay as a supplemental death benefit to the designated beneficiary of an Executive an amount equal to (a) the product of (i) his/her regular annual compensation from the Company and its affiliates in effect on his/her date of death or his/her date of retirement, whichever is applicable, and (ii) the multiplier specified below for the status of Executive at the time of death (the "Multiplier") less the aggregate amount of life insurance payable upon the death of the Executive under policies, plans and programs paid for by the Company and its affiliates: -3- Executive's Status at Date of Death Applicable Multiplier ------------------------------------------------------ (1) Employed by Company and/or Multiplier set its subsidiaries, listed opposite name on on Exhibit A and less than Exhibit A ------- - ------- - 65 years of age (2) Employed by Company and/or 50% of Multiplier set its subsidiaries, listed opposite name on on Exhibit A and 65 years Exhibit A ------- - ------- - of age or older (3) Retired from employment 50% of Multiplier set by Company and its opposite name on subsidiaries at any time Exhibit B ------- - after 36 months prior to Normal Retirement Date (4) Employed by Company and/or Multiplier set its subsidiaries, Normal opposite name on Retirement Date has not Exhibit C ------- - occurred but taken off Exhibit A within 36 months ------- - prior to Normal Retirement Date (5) Listed on Exhibit D Multiplier set ------- - opposite name on Exhibit D ------- - "Normal Retirement Date" of an Executive means the first day of the month coinciding with or next following the first of the following events (a) his/her 65th birthday or, (b) his/her 62nd birthday if the Executive has then completed 30 calendar years in which the Executive has 1,000 Hours of Service. 5. Effect on Other Agreements. Nothing in this Plan ------ -- ----- ---------- shall limit the right of an Executive to receive payments pursuant to any other agreement if such payments are greater than the supplemental payments contemplated by Sections 2 and 3 of this Plan. 6. Vesting. If an Executive completes 10 years of ------- employment with the Company and its affiliates, but is removed from Exhibit A before payments begin under the Retirement ------- - Plan, his/her name shall be added to Exhibit D together with ------- - the date on which he/she was removed from Exhibit A and ------- - -4- his/her length of service as of that date, and the amount contemplated by Section 2 shall be paid to the Executive when such payments begin, subject to forfeiture under Section 7. In that event, the amount payable shall be calculated with regard to compensation, if any, from the Company and its affiliates after removal from Exhibit A, but without regard to ------- - length of service after that date. If the Executive fails so to complete 10 years of employment and is so removed, he/she shall have no benefit under this Plan. 7. Forfeiture. The right of any Executive to a benefit ---------- under this Plan shall be forfeited if the Executive is discharged for gross neglect of duty, insubordination or serious misconduct. No Executive shall at any time either during employment or, following his/her retirement, during the period in which any payments are being made to him/her pursuant to this Plan carry on activities which, in the opinion of the Company, are plainly detrimental in a material way to the best interests of the Company or its affiliates. Upon making a determination that the activities of any Executive are so detrimental, the Company shall so inform the Executive by written notice. If the Executive shall not cease and terminate such detrimental activities within 30-day period from receipt of such written notice, the Company shall have no further obligations under this Plan, and all payments to and rights and benefits of the Executive, any designated beneficiary or beneficiaries or any contingent beneficiary hereunder shall immediately cease and terminate and be forfeited and the Company shall have no further liability hereunder. 8. Unsecured Rights. The rights of each Executive, --------- ------ his/her designated beneficiary or beneficiaries and any contingent beneficiary shall be solely those of a general, unsecured creditor of the Company. The Company shall be under no obligation to set aside or segregate any funds or resources of any kind to meet any of its obligations hereunder, and no one shall have any rights on account of this Plan in or to any of the specific funds or resources of the Company. 9. Amendment; Revision of Exhibits A-D. The Company may --------- -------- -- -------- - - amend this plan in any way at any time by action of its Board of Directors, but no amendment shall deprive any Executive of rights vested pursuant to Section 6. In addition, Exhibits A- -------- - D may be replaced at any time by new Exhibits A-D, changing - -------- - - -5- one or more of the Executives listed thereon, their salary grades or their Multipliers, signed and dated by either the Chief Financial Officer of the Company or the Director of Executive Compensation of the Company. The most recently executed Exhibits A-D shall control. -------- - - IN WITNESS WHEREOF, Affiliated Publications, Inc., pursuant to action by its Board of Directors on September 15, 1993, has caused this restatement to be executed and delivered by its Clerk as of September 15, 1993. AFFILIATED PUBLICATIONS, INC. By:_____________________________ Catherine E. C. Henn, Clerk Exhibit A --------- AFFILIATED PUBLICATIONS, INC. ----------------------------- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN -------------------------------------- As of September 15, 1993 ------------------------ Death Benefit Name Salary Grade Multiplier ---- ------------ ----------- Group A William Connolly 17 4 Helen Donovan 18 4 John Driscoll 18 4 Frank Grundstrom 18 4 Catherine Henn 18 4 William Huff 22 4 Michael Ide 18 4 Timothy Leland 17 4 Godfrey Kauffmann 18 4 Loretta McLaughlin 17 4 Robert Murphy 18 4 Paul Norman 17 4 Carl Ockerbloom 27 4 Mary Jane Patrone 18 4 Oliver Rodman 18 4 Matthew Storin 23 4 Benjamin Taylor 24 4 Stephen Taylor 22 4 William O. Taylor 30 4 Gregory Thornton 18 4 Group B Thomas Ashbrook 15 3 Stephen Cahow 16 3 Richard Daniels 16 3 Harriet Gould 15 3 Ronald Kuzoian 15 3 Alfred Larkin 16 3 Robert Manning 16 3 Mary Marty 15 3 Gregory Moore 15 3 Thomas Mulvoy 16 3 James Regan 15 3 Signed in accordance with Section 9 of the Supplemental Executive Retirement Plan. /s/ Alexander B. Hawes, Jr. ___________________________________ Alexander B. Hawes, Jr. Director of Executive Compensation Exhibit B --------- AFFILIATED PUBLICATIONS, INC. ----------------------------- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN -------------------------------------- As of September 15, 1993 ------------------------ Death Benefit Name Multiplier ---- ----------- John Mullin 4 Daniel Orr 4 Millard Owen 4 David Stanger 4 John Reid 4 Robert A. King 3 Signed in accordance with Section 9 of the Supplemental Executive Retirement Plan. /s/ Alexander B. Hawes, Jr. ___________________________________ Alexander B. Hawes, Jr. Director of Executive Compensation Exhibit C --------- AFFILIATED PUBLICATIONS, INC. ----------------------------- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN -------------------------------------- As of September 15, 1993 ------------------------ Death Benefit Name Salary Grade Multiplier ---- ------------ ---------- (None as of September 15, 1993.) Signed in accordance with Section 9 of the Supplemental Executive Retirement Plan. /s/ Alexander B. Hawes, Jr. ___________________________________ Alexander B. Hawes, Jr. Director of Executive Compensation Exhibit D --------- AFFILIATED PUBLICATIONS, INC. ----------------------------- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN -------------------------------------- As of September 15, 1993 ------------------------ Date of Service Death Removal From as of Benefit Name Exhibit A Removal Multiplier ---- --------- ------- ----------- John P. Giuggio October 26, 1992 42 years 4* Martin F. Nolan October 26, 1992 24 years 3 * Reduces to two as of 65th birthday. Signed in accordance with Section 9 of the Supplemental Executive Retirement Plan. /s/ Alexander B. Hawes, Jr. ___________________________________ Alexander B. Hawes, Jr. Director of Executive Compensation EX-21 14 EXHIBIT 21 SUBSIDIARIES OF THE COMPANY(1)(2)
JURISDICTION OF INCORPORATION OR NAME OF SUBSIDIARY ORGANIZATION - ------------------------------------------------------------------------------ ------------------- Affiliated Publications, Inc.................................................. Massachusetts Affiliated Securities Corp.................................................. Massachusetts ARNY, Inc................................................................... Massachusetts Globe Newspaper Company..................................................... Massachusetts Boston Globe Investments, Inc............................................ Massachusetts Zakrewski Ltd. Partnership (99%)....................................... Massachusetts Wilson Tisdale Company................................................... Massachusetts Community Newsdealers Inc................................................ Massachusetts Globe Specialty Products, Inc............................................ Massachusetts Retail Sales, Inc........................................................ Massachusetts Comet-Press Newspapers, Inc................................................... Delaware Crossroads Holding Corporation................................................ New Jersey Cruising World Publications, Inc.............................................. Delaware Donohue Malbaie Inc. (49%).................................................... Canada Fernandina Beach News-Leader, Inc............................................. Florida Gainesville Sun Publishing Company............................................ Florida Gaspesia Pulp and Paper Company Ltd. (49%).................................... Canada Golf Digest/Tennis, Inc....................................................... Delaware Golf World Limited............................................................ United Kingdom Hendersonville Newspaper Corporation.......................................... North Carolina International Herald Tribune S.A. (50%)....................................... France Lake City Reporter, Inc....................................................... Florida Lakeland Ledger Publishing Corporation........................................ Florida London Bureau Limited......................................................... United Kingdom Northern SC Paper Corporation (80%)........................................... Delaware Madison Paper Industries (partnership)...................................... Maine NYT 1896T, Inc................................................................ Delaware NYTRNG, Inc................................................................... Delaware NYT Special Services, Inc. ................................................... Delaware Ocala Star-Banner Corporation................................................. Florida Retail Magazines Marketing Company, Inc....................................... New York Time Distribution Services (partnership) (37%).............................. New York Rome Bureau S.r.l............................................................. Italy Sarasota Herald-Tribune Co.................................................... Florida Sebring News-Sun, Inc......................................................... Florida The Dispatch Publishing Company, Inc.......................................... North Carolina The Family Circle, Inc........................................................ Iowa The Houma Courier Newspaper Corporation....................................... Delaware The Leesburg Daily Commercial, Inc............................................ Florida The New York Times Broadcasting Service, Inc.................................. Tennessee Interstate Broadcasting Company, Inc........................................ New York The Times Southwest Broadcasting, Inc....................................... Arkansas The New York Times Distribution Corporation................................... Delaware The New York Times Sales, Inc................................................. Delaware The New York Times Syndication Sales Corporation.............................. Delaware The Palatka Daily News, Inc................................................... Florida Times Leasing, Inc............................................................ Delaware Times On-Line Services, Inc................................................... New Jersey TSP Newspapers, Inc........................................................... Delaware Times Daily, Inc............................................................ Alabama Wilmington Star-News, Inc..................................................... New York WNEP-TV, Inc.................................................................. Pennsylvania
- --------------- (1) 100% owned unless otherwise indicated. (2) The names of certain subsidiaries have been omitted because, considered in the aggregate, as a single subsidiary, they would not constitute a significant subsidiary. -----END PRIVACY-ENHANCED MESSAGE-----