Joint Appendix Vol II — Lebron v. National Railroad Passenger Corporation

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% No. 93-1525 |

JUL 25 1994

AWE Of MME CLES

Supreme Court of the nt tates

OCTOBER TERM, 1994

IN THE

MICHAEL A. LEBRON,

Petitioner,

—V —

NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK),

Respondent.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

JOINT APPENDIX

EXHIBITS

(Pages J.A. 200 to 748)

DAVID D. COLE KEVIN T. BAINE

Counsel of Record Counsel of Record

CENTER FOR CONSTITUTIONAL RIGHTS NICOLE K. SELIGMAN

Georgetown University Law Center STEVEN M. FARINA

600 New Jersey Avenue, N.W. WILLIAMS & CONNOLLY

Washington, D.C. 20001 725 Twelfth Street, N.W.

(202) 662-9078 Washington, D.C. 20005

Additional Counsel for Petitioner (202) 434-5000

Continued on Inside Cover Attorneys for Respondent

PETITION FOR CERTIORARI FILED MARCH 28, 1994

CERTIORARI GRANTED MAY 23, 1994

: "

-—_” | i Re By en —

”™

JOINT APPENDIX

EXHIBITS

TABLE OF CONTENTS

PLAINTIFF’S EXHIBITS

Station Advertising Agreement By and

Between National Railroad Passenger

Corporation and Transportation Displays

Inc. (March 15, 1991)

In-Station Advertising Agreement By and

Between National Railroad Passenger

Corporation and Winston Network, Inc.

NUE Be IN CGG oh cnceduasnccdbedoncs couse

Permit for Advertising Display Facility

Between National Railroad Passenger

Corporation and Transportation

Displays Inc. (August 15, 1980)

Letter, DeAngelo to Haut December 23,

National Railroad Passenger Corporation,

1991 Annual Report

Conveyance from Pennsylvania Tunnel!

and Terminal Railroad Company to

Consolidated Railroad Corporation

[PT&T-CRC-ATK-RPI-2]....

PAGE PAGE

12) Deed By and Between Consolidated Rail 60 Minutes, National Passenger Railroad

Corporation to National Railroad Passenger Corporation Board of Directors

Corporation [NY-EPT& PCRC-ATK-RPE 2] M7 (September 23, 1987) 472

IS Pennsvivania Railroad TDI Agreement 61. National Passenger Railroad © orporation,

May 26, 1967) 318 1992 Annual Report 374

7 Justification of Spectacular Sign Agree 65. Minutes, National Railroad Passenger

ment to A&S Department Stores (8/20/87) 449 Corporation Board of Directors (February 27

is dtas ude... 10)

38 Letter, Notaro to Bourque (September 14,

1987) 7 141 66. National Railroad Passenger Corporation

1976 Annual Report 40)3

48 Letter, Notaro to Simpson (October 10, 1979) 342

68. Secretary of Transportation's Final System

48 Fujitsu letters | TDI production nos. 16, jo PE TEETLCEE EEE 42%

86-93, 19. 11, 13] (six letters and artwork,

various dates) | barat 343 71. Minutes, National Railroad Passenger

Corporation Board of Directors (January 23

49. Two Letters, Notaro to Bourque (July 23 |) RE Seieoh dives << tr 46%

and August 13, 1987) ‘oaaeegapens ert 348

77. National Railroad Passenger Corporation,

Sl. Letter, Ament to Bourque (August 23, 1989) 351 1990 Annual Report ........ 471

S54. TDI Penn Station Floor Plan eo UE 352 SL. Level A And Platform Lease. Pennsy lvania

Station New York, Between Nationa! Rai!-

So New York City Tax Assessments for road Passenger Corporation and the Long

Penn Station—Tax Year 1992-19903............... 353 Island Railroad Company (August 5, 1988) 490)

S&S Minutes. Amtrak Board of Directors Real 82. Pennsylvania Station New York Joint Facility

Estate Subcommittee (September 22. 1987) .... 368 Agreement Between Nationa! Railroad

Passenger Corporation and Long Island

5% Monutes, National Passenger Railroad Railroad Company (August 5, 1985) 334

Corporation Board of Directors Finance

Committee (September 22, 1987)............. | 370 84. Letter, Silverman to Landman and Kohane

. (January 19, 1993)........ 584

85.

SO.

SS.

90.

95.

96.

97.

98.

Letter, Slattery to Silverman (January 21,

POs 60 bv tselis bh bet caavotensecedebees arene:

Letter, Wolmetz to Silverman (January 21,

PPI SS ceb vlad cdegneckdsnns td0¥u Cdpedwntces

National Railroad Passenger Corporation,

SPs RAE BN 5. isc dicivaveiisscceses

National Railroad Passenger Corporation,

1989 U.S. Corporation Income Tax Return

National Railroad Passenger Corporation,

Sere GHEE SEIU is vo ewk a ceecacdetvccies

National Railroad Passenger Corporation,

ESSE AMMUR) TOPOE o.oo oc cc ccccecccccces

National Railroad Passenger Corporation,

39GG ABNER] OPO . . oo... ese ceewececess

Bylaws of National Railroad Passenger

Corporation (Updated Through January

. Letter, Metropolitan Transit Authority to

National Railroad Passenger Corporation

CARI Ty Rab na eee ee ecccteceess

DEFENDANTS’ EXHIBITS

Contract between TDI and Plaintiff, dated

EEE STARS EARP SES DSI A tae tO

Amtrak Report—Towards Self-Sufficiency

in the Year 2000,” dated 6/1/91.................

“ese ee

“_**

PAGE

588

592

593

598

602

618

624

658

669

674

Amtrak Fiscal Year 1993 Grant Request and

Pea idedssccnuesnsedetsecendcasionctves

Amtrak’s Fee Title Insurance Policy, dated

GS dc daeut nnd tices baeese se tem caetebacbekns i

Letter from Vincent Notaro to Bruce Bourque,

I hin odes Ceadechcu sass pncdi teen ns

Series of contracts between TDI and various

I GI PITIONG oo oi oc ces ieececcesccses

PAGE

694

729

J.A. 200

PLAINTIFF’S EXHIBIT 2

STATION ADVERTISING AGREEMENT

BY AND BETWEEN

NATIONAL RAILROAD PASSENGER CORPORATION

AND

TRANSPORTATION DISPLAYS. INC. (TDL)

This Agreement made this 15th day of March, 1991,

between the NATIONAL RAILROAD PASSENGER COR-

PORATION, a corporation of the District of Columbia, hav-

ing offices at 60 Massachusetts Avenue, N.E., Washington,

DC 20002 (hereinafter referred to as “Amtrak”), and

Transportation Displays, Inc. (TDI) a New York Corporation,

having an office at 275 Madison Avenue, New York, N-Y.

10016 (hereinafter referred to as “TDI”).

SECTION 1. GRANT

For and in consideration of the payments, covenants and

agreements hereinafter mentioned, Amtrak does hereby grant

to TDI the right and privilege to develop, construct, place and

maintain posters, islands, TDI clocks and dioramas, and to

sell advertising space thereon, at those locations which may

be authorized by Amtrak, at the sole discretion of Amtrak.

TDI may enter into contracts, licenses and sub-licenses for

advertising displays in the name of TDI, but not in the name

of Amtrak. Both Amtrak and TDI may develop, construct,

place and maintain self-contained and manned floor exhibits

and sell advertising space thereon in accordance with rates

published by TDI, for the particular location. It is mutually

agreed that TDI will use its best efforts to expand installed

inventory to those stations listed on Exhibit A.

SECTION 2. TERM

Subject to the terms and conditions hereof, this Agreement

shall be for a term of ten (10) years, commencing on March I,

J.A. 201

1991, and ending on the last day of February 2001 and shall

continue from year-to-year thereafter unless either party

hereto shall give to the other not less than (1) year’s written

notice of termination of this Agreement.

Amtrak may terminate this Agreement at any time with

respect to all or any stations by giving thirty (30) day’s prior

written notice of termination and upon the date of termination

specified in such notice, this Agreement shall cease, terminate

and come to an end, provided, however, that this Agreement

shall continue in full force and effect with respect to any indi-

vidual advertising contract so long as said contract does not

have an initial term in excess of one year, nor, in any event,

be in effect for more than one year following said termination

date.

In the event that ownership of a station changes or a party

other than Amtrak assumes control of a station, that event

shall cause notice of termination within 30 days.

Upon execution, this License shall terminate, cancel and

supersede, an Agreement dated the first day of December,

1985, between Amtrak and Winston Network, Inc., whereby

Amtrak granted Winston Network, the right and privilege to

develop, construct, place and maintain posters, TDI clocks

and dioramas, and to sell advertising thereon at those loca-

tions authorized by Amtrak.

SECTION 3. GUARANTEED ANNUAL PAYMENT

(a) In consideration of the rights and privileges granted

herein, TDI agrees to pay to Amtrak, from the date of the

commencement of this Agreement, a guaranteed annual min-

imum fee (hereinafter referred to as “Minimum Fee”) of per

year or if greater, a fee (hereinafter referred to as “Percentage

Fee”) equal to certain percentages of TDI’s net receipts, as set

forth in Section 3(c) and Section (e) below. On the first

anniversary date of this Agreement; and on each anniversary

date thereafter, for a period of five (5S) years, said Minimum

Fee shall be of the guaranteed annual payment payable here-

under in the year immediately preceding. Commencing March

J.A. 202

1, 1996, and on each March 1 thereafter, said Minimum Fee

shall be shall of the guaranteed annual payment hereunder in

the year immediately proceeding.

(b) On or before the 25th day of each month, TDI shall fur-

nish Amtrak with a complete statement of TDI’s net receipts

(as defined in subsection [e] of this Section 3 for the pre-

ceding month, (hereinafter “Net Receipts”). Such statement

shall show the total amount of the Net Receipts for the pre-

ceding month, including the name of the advertiser(s),

amount(s) billed, and amount(s) collected. TDI’s check for

Percentage Payment shall accompany each statement if in

excess of 1/12 of the minimum annual fee.

Net Receipts, according to media used, as follows:

(1) Self-contained Floor Exhibits, if marketed by TDI

(ii) Clocks, Dioramas, Islands and Posters

By mutual agreement in writing, the parties hereto may add

to the foregoing other media and the percentages of Net

Receipts to be made applicable thereto.

(d) As used herein, “Installed Inventory” shall mean adver-

tising display equipment as defined in Section 13 hereof.

Exhibit “B” attached hereto and made part hereof sets forth

the Installed Inventory, as of the date of execution hereof, at

the rail passenger stations listed in said Exhibit “B”.

(ec) As used herein, “Net Receipts” shall mean and include

the gross amounts paid to or received by TDI from advertis-

ers or their advertising agencies for the use of advertising

facilities under this Agreement; provided however that there

shall be excluded from the computation of the Net .eceipts

the following:

(1) Standard advertising commissions paid to recog-

nized advertising agencies with respect to the use of

advertising facilities hereunder, not to exceed fif-

teen (15%) percent for all advertising media;

J.A. 203

(ii) Quantity purchase discounts actually allowed by

TDI to advertisers or their advertising agencies

hereunder;

(iii) Taxes separately stated and paid by advertisers or

their advertising agencies and payable to or for the

account of TDI and

(iv) Any amounts received by TDI which are not related

to the use of advertising facilities hereunder.

SECTION 4. AUDITS

(a) In order to verify the amount of Net Receipts reported

by TDI for any year or portion thereof under this Agreement,

Amtrak shall have the right, at any time (but not after 3 years

subsequent to the expiration of any such year), to conduct an

audit of TDI’s books and records pertaining to this

Agreement. Such audits may be made by Amtrak’s Auditing

Department or by independent Certified Public Accountants,

or by any other agent selected by Amtrak, or by any federal

agency (including the General Accounting Office) which has

the right to audit accounts.

(b) If such audit reveals an understatement of TDI’s Net

Receipts for the period in question, and a consequent defi-

ciency in Percentage Payment, TDI shall forthwith pay the

amount of such deficiency to Amtrak, and the cost of such

audit shall be borne by TDI and, if such audit reveals an over-

payment of Percentage Payment, Amtrak shall credit against

the next monthly installment(s) of Percentage Payment to fall

due, the amount of such overpayment; provided, however,

that if the amount of any refund due to TDI hereunder

exceeds the aggregate of installment(s) of Percentage

Payment total due, and if, and TDI has fully complied with all

of the terms, covenants, conditions and provisions to be per-

formed by TDI under this Agreement and is not indebted to

Amtrak, the amount of such excess shall be paid to TDI

within thirty (30) days. The cost of such audit shall be borne

J.A. 204

by Amtrak. The provisions of this covenant shall survive the

expiration or other termination of this Agreement.

SECTION 5. LATE PAYMENT FEE

If TDI fails to pay any Minimum Fee, Percentage Fee or

additional fees, charges or sums hereunder on the day when

the same shall become due and payable, TDI shall pay

Amtrak a service charge at the then existing Manufacturers

Hanover Trust Company prime rate of interest plus two per-

centum (2%) of the amount of such fees or additional fees,

charges or sums, or all of them for each month or portion of

a month that they or any of them remain unpaid.

SECTION 6. APPROVAL OF ADVERTISING MATERIAL &

LOCATIONS

All advertising material, exhibit material, noti s and

advertisements, and their manner of presentation and design,

Shall be subject to approval by Amtrak, which may disap-

prove army such items at its own discretion. TDI will imme-

diately remove, at its sole expense, upon written demand of

Amtrak, any display, sign, poster, or other advertising mate-

rial (including advertisement content) which may be consid-

ered objectionable by Amtrak. In the event that such matter is

not removed immediately upon receipt of written demand,

Amtrak may remove said material or display and TDI will pay

any costs or expense incurred by Amtrak, including all labor

charges and warehouse or storage rental incurred as a con-

sequence of such action. Amtrak shall not, in any way, be

held responsible or liable for any actions taken under this

Section.

SECTION 7. LAWS, ORDINANCES, RULES AND REGU-

LATIONS

(a) TDI shall comply with all applicable federal, state, and

local laws, ordinances, rules and regulations and with the

rules and regulations of Amtrak, in the erection, display and

}.A. 205

maintenance of all advertising. in the event that such laws,

ordinances, rules or regulations require removal of all or any

TDI Installed Inventory, TDI shall promptly comply with such

requirement at its own cost and expense.

(b) TDI shall procure all necessary licenses, certificates,

permits and authorizations, and shall pay all costs thereof.

shall be prohibited, the parties hereto agree to negotiate in

good faith, an adjustment to the Guaranteed Annual Payment

pavable under Section 3 hereof, said adjustment to reflect the

loss of such advertising categories. In particular, TDI shall

not sell nor display advertisements competitive to Amtrak's

own business.

SECTION 8. RATES

(a) TDI shall establish and print a schedule of rates for all

advertising displayed under this Agreement.

(b) A copy of TDI’s published rates, effective as of the

date of this Agreement, is attached hereto as Exhibit “C”. TDI

shall furnish Amtrak with copies of all revisions, changes and

amendments to Exhibit “C” within thirty (30) days of their

publication.

available. TDI shall furnish Amtrak with all data relevant to

determining the schedule of rates for all advertising displayed

under this Agreement.

SECTION 9. CONTRACT FORMS

TDI shall submit to Amtrak, for prior approval, all forms to

be utilized by TDI for contracting with advertisers. Copies of

all contracts or agreements made by TDI pursuant to this

Agreement shall also be submitted, upon request, to Amtrak.

L.A. 206

SECTION 10. STORAGE SPACE

Amtrak agrees, where conditions permit and space is avail-

able, to provide TDI with reasonable space within stations for

handling and storing of TDI’s supplies, materials and adver-

tising matter to be used pursuant to this Agreement. Amtrak

shall incur no cost, expense or liability whatsoever in con-

nection with such space, and TDI, if required, shall pay mar-

ket rate rental for any unimproved Storage space made

available by Amtrak for TDI’s use.

SECTION 11. WORK ON AMTRAK PROPERTY

The work of constructing, maintaining, repairing, altering,

renewing, relocating, or removing any Installed Inventory

Shall be done under such conditions as shall be satisfactory to

and be approved in advance by the Chief Engineer of Amtrak,

or kis designee, and as will not interfere with the proper and

Safe use, operation and enjoyment of the property of Amtrak.

No such work shall be undertaken by or on behalf of TDI

without prior written approval as aforesaid. TDI, at its own

cost and expense, shall, when performing any work in con-

nection with any part of the Installed Inventory, arrange for

any necessary watchmen or flagman to ensure that personnel,

equipment and materials are kept a safe distance away from

the railroad tracks and shall attend Amtrak sponsored safety

classes, as required. Any notification required to be given to

Amtrak by TDI shall be sent by certified mail to such persons

and addresses as may be designated by Amtrak’s Chief

Engineer or his designee.

SECTION 12. MAINTENANCE

TDI agrees that it will furnish, mount, install and contin-

uously maintain in a clean and first-class condition its

Installed Inventory, as defined in SECTION 13, and all parts

thereof, and, in general, do any and all work under this

Agreement, subject to the supervision and approval of

Amtrak, at such times and in such manner as in no way to

J.A. 207

impede or interfere with the use or operation of Amtrak's

facilities. TDI, its employees, servants, suppliers of materi.

als, and furnishers of service shall have the right of ingress

and egress at Amtrak's facilities, subject to prior approval by

Amtrak in order to perform its obligations as set forth in this

Agreement

SECTION 13. ADVERTISING EQUIPMENT

(a) TDI shall furnish, mount and install its own advertising

display equipment, including, but not limited to frames,

boards, clocks, poster panels, exhibits, dioramas, or any other

advertising display equipment, at its sole cost and expense.

All equipment is and shall remain the property of TDI, unless

owned by a third party and installed in stations on a rental

basis.

(>) TDI agrees to survey all TDlI-installed equipment

within sixty (60) days of commencement of this Agreement

and to submit to Amtrak a written plan to replace old equip-

ment and or add new equipment to the Installed Inventory.

Such plan shall be evaluated by Amtrak and Amtrak and TDI

shall mutually agree on additions to Installed Inventory. It is

the intent of TDI to increase its capital investment and

improvements in Installed Inventory in Amtrak stations over

the term of this Agreement by Five Hundred Thousand

Dollars ($500,000), in addition to improvements specified in

the predecessor agreement of $500,000 and specifically to

include those improvements listed in Exhibit D.

(¢) Upon expiration or termination of this Agreement for

any reason, TDI at its sole cost and expense, shall remove

from the property, facilities and premises of Amtrak, al!

Installed Inventory, including but not limited to advertising

trames, clocks, displays, exhibits, and advertising equipment

and materials which TDI and those claiming by, through or

under It were permitted to install or maintain under the rights

and privileges given by this Agreement, and shall restore said

—

JA. 208

property, facilities and premises, reasonable wear and tear

excepted.

(d) If TDI shall fail to commence removal of its Installed

Inventory within thirty (30) days after expiration or termi-

nation, then Amtrak may effect such removal and restoration

at the expense of TDI, and TDI agrees to pay Amtrak the rea-

sonable cost and expense thereof promptly upon receipt of

invoice therefor.

SECTION 14. ELECTRICITY

(a) Amtrak shall provide existing electrical current for the

illumination/operation of advertising displays and clocks for

that equipment documented in Exhibit B and Exhibit D.

(b) Amtrak shall not be responsible for reductions or inter-

ruptions in the supply of electrical power.

SECTION 15. NON-INTERFERENCE WITH CONCES.-

SIONAIRES

The rights and privileges granted herein to TDI shall not be

deemed to limit the right of Amtrak to grant tenants, licensees

and concessionaires the right to advertise in the premises or

Space used by them by agreement of Amtrak.

SECTION 16. TERMINATION BY AMTRAK

In addition to any other termination rights contained in the

Agreement, Amtrak shall have the right, upon sixty (60) days

written notice to TDI, to terminate this Agreement any time

after the occurrence of any one or more of the following

events: '

(i) Non-payment of the Guaranteed Annual! Payment

or Percentage Payment due Amtrak when such

non-payment shall continue for a period of twenty

(20) days.

(ii) If any petition shall be filed by or against TDI to

declare TDI bankrupt or to delay, reduce or mod-

J.A. 209

ify TDI’s debts or obligations “or if TDI be

declared insolvent according to law, or if any

assignment of TDI’s property shall be made for the

benefit of creditors, or if a receiver or trustee Is

appointed for TDI or its property, Amtrak may

treat the occurrence of any one or more the fore-

going events as breach of the Agreement without

notice, and immediately enter and repossess the

spaces covered hereunder.

(iii) Abandonment by TDI of and discontinuance of

operations hereunder.

(iv) Non-performance of any covenant of this

Agreement, excluding the covenant of payment

herein contained, and failure of TDI to remedy

such breach within a period of sixty (60) days

after receipt of written notice from Amtrak of the

existence of said breach.

(v) If TDI becomes permanently deprived of the

rights, powers and privileges necessary to the

proper conduct and operations of the Installed

Inventory specified in this Agreement.

(vi) Damage by fire or other casualty to the stations

listed in Exhibit A hereto.

(vii) Assumption of control of any of the aforesaid sta-

tion by parties other than Amtrak.

SECTION 17. TERMINATION BY TDI

In addition to any other termination rights contained in this

Agreement, this Agreement shall be subject to termination by

TDI in the event any one or more of the following events

occur: ates

(i) The permanent abandonment of Amtrak s trans-

portation system, or substantial portions thereof.

J.A. 210

(ii) The lawful assumption by the United States

Government, or any authorized agency thereof, of

the operation, control or use of the transportation

facilities covered hereunder, or any substantial

part or parts thereof in such a manner as to sub-

stantially restrict TDI from operating therefrom

for a period in excess of ninety (90) days.

(iii) Issuance by any court of competent jurisdiction of

any injunction in any way preventing or restrain-

ing the use of Amtrak’s facilities, and the remain-

ing in force of such injunction for a period in

excess of ninety (90) days.

(iv) The default by Amtrak in the performance of any

covenant or agreement herein required to be per-

formed by Amtrak, and the failure of Amtrak to

remedy such default for a period of sixty (60) days

after receipt of written notice by TDI to remedy

the same.

SECTION 18. ABANDONMENT, LEASES, SALES

(a) This Agreement is expressly made subject to any aban-

donment of a part of a line or lines or any facilities or ter-

minals of Amtrak, to any and all sales, leases, assignments or

licenses of any of the aforementioned property or premises by

Amtrak, to the provisions of all leases or agreements under

which Amtrak holds said property or premises, to all encum-

brances, conditions, covenants, rights and easements to which

the title of Amtrak is or may be subject, to ali other leases or

licenses to which Amtrak is or may be subject, to all leases or

licenses which Amtrak may have granted or may grant in the

future to other parties, and to the right of Amtrak at any and

all times: (1) to place or cause to be placed, notices and bul-

letins (in locations other than on TDI’s signs) advertising its

Own services and matters of interest to the public or for the

information of employees or patrons of Amtrak, (2) to sell,

J.A. 211

lease or license any and all of its property and premises, and

(3) to carry on all of its general and special business opera-

tions.

(b) In the event Amtrak desires at any time or times to sell,

assign, lease, license or otherwise dispose of any or all of its

property, facilities, and premises, or to abandon any part of a

line or lines of railroad, TDI at TDI’s sole cost and expense,

shall in any and all such events remove forthwith, upon notice

from Amtrak, any and all Installed Inventory and advertising

matter thereon permitted hereunder that Amtrak specifies

should be removed from the property, facilities or premises to

be sold, leased, licensed, or otherwise disposed of.

SECTION 19. FORCE MAJEURE, STRIKE, ETC.

(a) If TDI is deprived of advertising space in any or ail the

stations set forth in Exhibit A hereto for more than thirty (30)

successive days by reason of force majeure, strike, fire, loss

of inventory by action of Amtrak or other cause beyond the

control of TDI, then the Guaranteed Annual Payment payable

shall be adjusted and/or abated to reflect the loss of use of the

space On a pro-rata basis.

(b) If TDI is totally deprived of advertising space in all the

aforesaid stations for more than sixty (60) successive days

because of force majeure, labor strike, or any other cause

beyond the control of TDI, or if the public is totally denied

norma! access to such stations for any reason, then TDI may

cancel this Agreement in its entirety as of the date of such

deprivation of space or denial of access by giving Amtrak

written notice of its intention do to so, without any further

liability being incurred thereby on the part of TDI or Amtrak.

SECTION 20. INSURANCE AND LIABILITY

(a) TDI shall indemnify and save harmless Amtrak and its

directors, officers, employees, agents, representatives, con-

tractors, invitees or any other persons from al! suits and

Ctewe on

J.A. 212

action of every type and description brought against them, or

which may arise as a result of any injuries or damages

received or sustained by any person, persons or property, or

from acts of said TDI, its agents, servants or employees, per-

formed on the premises of Amtrak.

(b) TDI shall indemnify and save harmless Amtrak and its

directors, officers, employees, agents, representatives, con-

tractors, invitees or any other persons against any claims or

liability arising from or based upon the violation of any fed-

eral, state county or city laws, by-laws, ordinances, or regu-

lations, by TDI, its agents, servants and employees.

Installed Inventory or to any part thereof or to the contents of

any advertising displays shall not at any time be an obligation

of Amtrak.

(d) TDI shall procure and maintain at all times during the

term of this agreement, at its own cost and expense, the insur-

ance specified below. All insurance shall be placed with

insurance carriers acceptable to Amtrak and licensed to do

business in the states where the signs are located. TDI shall

furnish Amtrak with a certificate or certificates of insurance

giving evidence of the required coverage at the exercise of

this agreement and on an annua! basis thereafter. With respect

to Railroad Protective Liability Insurance, TDI shall furnish

Amtrak with the original policy at the exercise of this agree-

ment and on an annual basis thereafter. No acceptance by

Amtrak of any insurance certificate or policy required here-

under shall constitute or be construed as a waiver by Amtrak

of the requirements below which shall be and remain the sole

responsibility of TDI. All insurance shall provide for 30 days

prior written notice to be given to Amtrak in the event cov-

erage is substantially changed, cancelled, or non-renewed.

Such notices shall be mailed to Amtrak marked, “Attention:

Vice President-Real Estate and Operations Development”, at

the address set forth on page first hereof. The failure by TDI

at any time to procure and/or maintain any of the below stated

J.A. 213

insurance will constitute a default under Section 30 hereot

and Amtrak may terminate this agreement. Amtrak reserves

the right to increase the required coverage at any time at the

sole discretion of Amtrak. _

(i) Commercial General Liability Insurance—\ssued to

and covering liability imposed upon TDI with

respect to the operations of this agreement, and all

obligations assumed by TDI under the terms of this

agreement. Products/completed operations, inde-

pendent contractors, contractual, and personal

injury/advertising liability coverages are to be

included, and Amtrak is to be named as an addi-

tional insured with respect to TDI’s operations in

connection with this agreement. Coverage under

this policy shall have limits of liability of not less

than two million dollars ($2,000,000) combined sin-

gle limit for bodily injury (including disease or

death), personal injury, and property damage

(including loss of use) liability.

(ii) Workers’ Compensation Insurance—Complying with

the requirements of the statutes of jurisdiction in

which operations of TDI will take place, covering

all employees of TDI. Employers’ Liability cover-

age with limits of liability of not less than five hun-

dred thousand dollars ($500,000) each accident or

illness shall be included.

(iii) Railroad Protective Liability Insurance—TDI shall

provide, with respect to its operations or operations

of its subcontractors within fifty (50) feet vertically

or horizontally of railroad tracks, Railroad Protec-

tive Liability Insurance, AAR-AASHTO (ISO/RIMA)

Form, in the name of National Railroad Passenger

Corporation (Amtrak). The policy shall have limits

of liability of not less than two million dollars

($2,000,000) per occurrence, combined single limit,

JA. 214

for coverages A and B, for losses arising out of

injury to or death of all persons, and for physical

loss or damage to or destruction of property, includ-

ing the loss of use thereof. A six million dollar

($6,000,000) annual aggregate may apply. The pol-

icy shall be endorsed to protect Amtrak against all

risk of liability arising directly or indirectly from

TDI's use or occupancy of any sign location pur-

suant to this agreement

(iv) Property Insurance—covering all sign structures

and improvements against loss or damage by fire

and such other damage by hazards as are included

in the extended coverage endorsement in an amount

not less than ninety percent (90%) of the full

replacement cost of such property. This insurance

Shall contain a waiver of subrogation against

Amtrak.

SECTION 21. ASSIGNMENT, SUCCESSORS AND ASSIGNS

(a) TDI shall not assign or transfer any of the rights or

privileges granted herein without the prior written approval

of Amtrak, which approval shall not be unreasonab!y with-

held.

_(b) The terms of this Agreement shall be binding upon the

executors, administrators, successors and assigns of the par-

ties hereto.

SECTION 22. PATENTS AND TRADEMARKS

TDI represents that it is the owner of or fully authorized to

use any and all services, processes, machines, articles, marks,

names or slogans used by it in its operations under or con-

nected with this Agreement. TDI agrees to save and hold

Amtrak, its directors, officers, employees, agents, represen-

tatives, contractors, invitees or any other persons free and

harmless of and from any loss, liability, expenses, suit or

J.A. 215

claim for damages in connection with any actual or alleged

infringement of any patent, trademark or copyright, or arising

from any alleged or actual unfair competition or other simi-

‘ar claim arising out of the operations of TDI under or con-

nected with this Agreement.

SECTION 23. CONDUCT OF EMPLOYEES

TDI agrees that while its officers, agents and employees are

on Amtrak premises, and about the station buildings, plat-

forms and grounds, it will cause them to conduct themselves

in a proper manner, and if complaint is made by Amtrak, it

will forthwith take such corrective measures as are necessary.

SECTION 24. NOTICES

All notices, consents, demands, approvals, and requests

(“notices”) which are required or permitted to be given by

either party to the other, pursuant to any provision of this

Agreement, shall be sent by United States certified mail,

return receipt requested, and shail be addressed as follows (or

to such other address as either party may designate from time

to time by written notice to the other):

(i) If to Amtrak:

National Railroad Passenger Corporation

v0 Massachusetts Avenue, N.E.

Washington, DC 20002

Attention: Vice President-Real Estate and

"Operations Development

(11) If to TDI:

Transportation Displays, Incorporated

275 Madison Avenue oO

New York, NY 10016

Attention: Senior Vice President, Franchises

eS ee — oo

J.A. 216

SECTION 25. WAIVER

No waiver of any term, condition or breach of this

Agreement on any occasion shall be deemed to be a waiver of

any other term, condition or breach of this Agreement on any

other occasion, or a waiver of any Continuing or subsequent

breach of the same term or condition.

SECTION 26. INDEPENDENT CONTRACTOR

TDI is a independent professional firm contracting with

Amtrak to provide expert assistance. TDI, its directors, offi-

cers, employees, agents, and servants are not to be deemed

employees, agents, or servants of Amtrak. TDI assumes full

responsibility for liability arising out of the negligence of its

employees, whether by action or inaction. Amtrak assumes no

liability or responsibility for the negligent acts of TDI, its

directors, officers, employees, agents, or servants, by virtue

of entering into this Agreement. TDI is and shall remain an

independent contractor under the terms of this Agreement.

SECTION 27. INTERPRETATION OF AGREEMENT

This Agreement shall be governed and constructed in accor-

dance with the laws of the District of Columbia.

SECTION 28. SECTION TITLES

The titles of Sections are for ease of reference only, and

Shall not be construed to control or in any way alter the plain

meaning of the text of this Agreement.

SECTION 29. NON-DISCRIMINATION

TDI, in exercising any of the rights or privileges herein

granted to it, shall not, on the grounds of age, sex, religion,

race, color or national origin, discriminate or permit dis-

crimination against any person or group of persons in any

manner prohibited by federal, state or local laws. TDI shall

comply with such Equal Opportunity and Affirmative Action

J.A. 217

policies required of Amtrak contractors as Amtrak may estab-

lish from time-to-time.

SECTION 30. ENTIRE AGREEMENT

(a) This Agreement represents the entire understanding and

agreement between the parties with respect to the subject mat-

ter hereof.

(b) This Agreement may not be changed oraily. This

Agreement may be changed only by mutual agreement in

writing.

invalid or unenforceabie, it shall be considered deleted here-

from and shall not invalidate the remaining provisions hereof.

SECTION 31. PRIOR AGREEMENTS

This Agreement cancels and supersedes all prior agree-

ments relating to the subject matter of this Agreement

between TDI or predecessors to TDI and Amtrak and the pre-

decessors of Amtrak, as such Agreements pertain to the prop-

erty and land that is owned, leased or otherwise used or

occupied by Amtrak

SECTION 32. PUBLIC SERVICE ADVERTISING

(a) TDI shall provide space for public service and Amtrak

advertising on a preemptible basis. All public service a“ver-

tising shall be subject to removal at any time for the benefit

of paying advertisers.

(b) Public service advertising shall be entitled, at TDI dis-

cretion, to receive unsold advertising space at no space

charge. However, TDI shall be permitted to charge a one-time

labor fee to cover its out-of-pocket labor costs. Such labor fee

shall not be deemed a part of TDI’s Net Receipts as defined in

this Agreement.

J.A. 218

at no space cost, shall provide advertising space, on a pre-

emptible basis, to legitimate non-profit organizations, at an

established discount from regular space rate. The availability

of the discount on the space rate shall be determined by TDI

at its own discretion. All revenues collected pursuant to this

Subsection shall be subject to regular revenue sharing with

Amtrak.

(d) Amtrak reserves the right to place its own messages,

publicizing its own services, on the facilities covered by this

Agreement. TDI will post and remove all such messages for

Amtrak at no charge to Amtrak. All copies shall be provided

to TDI by Amtrak at Amtrak’s expense. All messages posted

pursuant to this sub-section shall be on a preemptible basis

for the benefit of paying advertisers, and shall be reasonable

as to quantity to be posted. All materials to be posted shall be

delivered to TDI not less than three (3) weeks prior to the

required posting date.

SECTION 33. ARBITRATION

Any controversy or claim arising out of or relating to this

contract, or breach thereof, shall be settled by arbitration in

accordance with the Commercial Arbitration Rules of the

American Arbitration Association and judgment upon the

award rendered by the Arbitrator(s) may be entered in any

court having jurisdiction thereof.

IN WITNESS WHEREOF, the parties hereto, by their autho-

rized officers, have executed this Agreement as of the day and

year first above written.

ATTEST: TRANSPORTATION DISPLAYS, INC.

By: [ILLEGIBLE] /s/

Witness By: ____[ILLEGIBLE) /s/

Executive Vice President

Date: [ILLEGIBLE]

NATIONAL RAILROAD PASSENGER

J.A. 219

CORPORATION

By: TONY DE ANGELO by [ILLEGIBLE]

Tony DeAngelo

Vice President

Real Estate and

Date:

Operations Development

March 28, 1991

J.A. 220

EXHIBIT A

Station Advertising Agreement by and between National

Railroad Passenger Corporation (Amtrak) and Transportation

Displays, Inc. (TDI).

Stations where advertising is installed

1. New York Penp Station

2. Princeton Junctior © w Jersey

3. Trenton, New Jersey

4. Newark, New Jersey

5 Wilm; _Del i, bs eee

6. Baltimore Penn Station

7. Philadelphia 30th Street Station

8. North Philadelphia

)

]

. Septa Stations owned by Amtrak

10. New Carrollton, Maryland

11. Washington D.C. Union Station |

Stations specifically excluded from Agreement

1. Chicago Union Station

Stations for expansion “

Providence, R.lI.

Albany/Rensselaer, N.Y.

Hudson, New York

Rhinecliff, New York

Kingston, Rhode Island

Old Saybrook, Connecticut

New London, Connecticut

Connecticut Commuter Stations

BWI

Westerly, Rhode Island

Pee ar raer rr

—

J.A. 221

PLAINTIFF’S EXHIBIT 3

IN-STATION ADVERTISING AGREEMENT

BY AND BETWEEN NRPC and WNI

FORM PARAGRAPHS

ISAA.

INTRODUCTION

SECTION 1. , GRANT

SECTION 2... TERM

SECTION 3. ANNUAL PAYMENT 7

SECTION 4. NEW YORK CITY-

PENNSYLVANIA STATION

ADVERTISING

SPECTACULAR DISPLAY

SECTION 5. AUDITS

SECTION 6. APPROVAL OF

ADVERTISING MATERIAL

& LOCATIONS

SECTION 7. LAWS, ORDINANCES,

RULES AND REGULATIONS

SECTION 8. RATES

SECTION 9. CONTRACT FORMS

SECTION 10. STORAGE SPACE

SECTION 11. WORK ON AMTRAK

PROPERTY

SECTION 12. MAINTENANCE

SECTION 13. ADVERTISING

EQUIPMENT

SECTION 14. ELECTRICITY

SECTION 15. NON-INTERFERENCE

WITH CONCESSIONAIRES :

SECTION 16. TERMINATION BY

AMTRAK

SECTION 17. TERMINATION BY WNI

SECTION 18. ABANDONMENT, LEASES,

SALES

ISAA. 19

ISAA. 20

J.A. 222

SECTION 19.

SECTION 20.

SECTION 21.

SECTION 22.

SECTION 23.

SECTION 24.

SECTION 25.

SECTION 26.

SECTION 27.

SECTION 28.

SECTION 29.

SECTION 30.

SECTION 31.

SECTION 32.

SECTION 33.

FORCE MAJEURE,

STRIKE, ETC.

INSURANCE AND

LIABILITY

ASSIGNMENTS,

SUCCESSORS AND ASSIGNS

PATENTS AND

TRADEMARKS

CONDUCT OF EMPLOYEES

NOTICES :

WAIVER

INDEPENDENT CONTRACTOR

INTERPRETATION OF

AGREEMENT

SECTION TITLES

NON-DISCRIMINATION

ENTIRE AGREEMENT

PRIOR AGREEMENT

PUBLIC SERVICE

ADVERTISING

ARBITRATION

IN WITNESS

J.A. 223

IN-STATION ADVERTISING AGREEMENT

BY AND BETWEEN

NATIONAL RAILROAD PASSENGER CORPORATION

AND

WINSTON NETWORK, INC.

This Agreement (Agreement), dated as of the first-day of

December, 1985, is made between the NATIONAL RAIL-

ROAD PASSENGER CORPORATION, a Corporation of the

Street, Washington, DC 20001 (hereinafter referred to as

“Amtrak”), and Winston Network, Inc., a New York Corpora-

tion, having an office at 275 Madison Avenue, New York,

New York 10016 (hereinafter referred to as “WNI”).

SECTION 1. GRANT

For and in consideration of the payments, covenants and

agreements hereinafter mentioned, Amtrak does hereby grant

to WNI the right and privilege to develop, construct, place

and maintain posters, WNI Islands, clocks and dioramas, and

to sell advertising space thereon, at those locations listed in

Exhibit A hereto as well as at additional locations which may

be authorized by Amtrak, at the sole discretion of Amtrak.

WNI may enter into contracts, licenses and sub-licenses for

advertising displays in the name of WNI, but not in the name

of Amtrak. Both Amtrak and WNI may develop, construct,

place and maintain self-contained floor exhibits and sell

advertising space thereon.

SECTION 2. TERM

Subject to all the terms and conditions hereof, this

Agreement shall be for a term of five (5) years, commencing

on December 1, 1985, and ending on November 30, 1990 and

shall continue from year-to-year thereafter unless either party

hereto shall give to the other not less than one (1) year’s writ-

J.A. 224

ten notice of termination of this Agreement; which notice

shall expire on the last day of the term or the last day of any

subsequent additional year, as the case may be.

Amtrak may terminate this Agreement at any time with

respect to all or any stations by giving thirty (30) days prior

written notice of termination and upon the date of termination

specified in such notice, this Agreement shall cease, terminate

and come to an end, provided, however, that this Agreement

Shall continue in full force and effect with respect to any indi-

vidual advertising contract so long as said contract does not

have an initial term in excess of one year, nor, in any event,

be in effect for more than one year following said termination

date. j

SECTION 3. ANNUAL PAYMENT

(a) In consideration of the rights and privileges granted

herein, WNI agrees to pay to Amtrak, on and after the first

anniversary date of this Agreement, a guaranteed annual pay-

ment based on Installed Inventory; as defined herein and the

applicable percentages of net receipts (hereinafter “Percent-

age Payment”), as set forth in Section 3(d) and Section (e)

below. On the second anniversary date of this Agreement; and

on each anniversary date thereafter, said guaranteed annual

payment shall be one hundred and ten percent (110%) of the

guaranteed annual payment payable hereunder in the year

immediately preceding.

(b) On or before the 25th day of each month, WNI shall

furnish Amtrak with a complete statement of WNI’s net

receipts (as defined in subsection (f) of this Section 3 for the

preceding month, (hereinafter “Net Receipts”). Such state-

ment shall show the total amount of Net Receipts for the pre-

ceding month, including the name of the advertiser(s),

amount(s) billed, and amount(s) collected. WNI’s check for

Percentage Payment shall accompany each statement if in

excess of '/,, of the minimum annual fee.

J.A. 225

year and of this Agreement and each continued year here-

under, WNI shall furnish Amtrak with a consolidated state-

ment of Net Receipts (hereinafter “Net Receipts”) for the year

in question, certified by an independent Certified Public

Accountant.

(d) WNI shall pay to Amtrak the following percentages of

Net Receipts according to media used, as follows:

(i) Self-contained Floor Exhibits, —60%

if marketed by WNI

(ii) Clocks, Dioramas, Posters —50%

and WNI Island Displays

By mutual agreement in writing the parties hereto may add

to the foregoing other media and the percentages of Net

Receipts to be made applicable thereto.

Percentages of Net Revenue payable by WNI hereunder

shall be no lower than those payable by WNI to railroads

other than Amtrak:

(e) As used herein, “Installed Inventory” shall mean adver-

tising display equipment as defined in Section 13 hereof.

Exhibit “A” attached hereto and made part hereof sets forth

the Installed Inventory, as of the date of execution hereof, at

the rail passenger stations listed in said Exhibit “A”. On

the anniversary date of each year of this Agreement; and

each continued year, WNI shall deliver to Amtrak a revised

Exhibit A, specifying additions to, and deletions from the pre-

vious year’s Installed Inventory. The guaranteed annual fee

shall be adjusted annually (on the anniversary date of this

Agreement) by mutual agreement between Amtrak and WNI,

to reflect all changes in Installed Inventory.

(f) As used herein, “Net Receipts” shall mean and include

the gross amounts paid to or received by WNI from adver-

tisers or their advertising agencies for the use of advertising

facilities under this Agreement; provided, however, that there

J.A. 226

Shall be excluded from the computation of Net Receipts th

following: : :

(i) Standard advertising commissions paid to recog-

nized advertising agencies with respect to the use

of advertising facilities hereunder, not to exceed

; fifteen (15%) percent for all advertising media;

(ii) Quantity purchase discounts actually allowed by

WNI; to advertisers or their advertising agencies

hereunder;

(iii) Taxes separately stated and paid by advertisers or

their advertising agencies and payable to or for the

account of WNI; and

(iv) Any amounts received by WNI which are not

related to the use of advertising facilities here-

under.

(v) Labor fees charged by WNI to public service

advertising pursuant to Section 32(b) hereof.

SECTION 4. NEW YORK CITY—PENNSYELVANIA STATION

ADVERTISING SPECTACULAR DISPLAY

(a) This Agreement cancels and supersedes that certain

Permit for Advertising Display Facilities, between Amtrak

and WNI, dated August 15, 1980, Permit No. 31-01-047.

SECTION 5. AUDITS

(a) In order to verify the amount of Net Receipts reports by

WNI for any year or portion thereof under this Agreement

Amtrak shall have the right, at any time (but not after 2 years

subsequent to the expiration of any such year), to conduct an

audit of WNI’s books and records pertaining to this

Agreement. Such audits may be made by Amtrak’s Auditing

Department or by independent Certified Public Accountants

or by any other agent selected by Amtrak, or by any federal

agency (including the General Accounting Office) whi

the right to audit accounts. , itt sat

J.A. 227

(b) If such audit reveals an understatement of WNI’s Net

Receipts for the period in question, and a consequent defi-

ciency in Percentage Payment, WNI shall forthwith pay the

amount of such deficiency to Amtrak, and, if such audit

reveals an overpayment of Percentage Payment, Amtrak shall

credit against the next monthly installment(s) of Percentage

Payment to fall due, the amount of such overpayment, pro-

vided, however, that if the amount of any refund due to WN]

hereunder exceeds the aggregate of installment(s) of

Percentage Payment total due, and if, and WNI has fully com-

plied with all of the terms, covenants, conditions and provi- _

sions to be performed by WNI under this Agreement and is

not indebted to Amtrak, the amount of such excess shall be

paid to WNI within thirty (30) days. The cost of such audit

shall be borne by Amtrak. The provisions of this covenant

shall survive the expiration or other termination of this

Agreement.

SECTION 6. APPROVAL OF ADVERTISING MATERIAL &

LOCATIONS

All advertising material, exhibit material, notices and

advertisements, and their manner of presentation and design,

shall be subject to approval by Amtrak, which may disap-

prove any such items at its own discretion. WNI will imme-

diately remove, at its sole expense, upon written demand of

Amtrak, any display, sign, poster, or other advertising mate-

rial (including advertisement content) which may be consid-

ered objectionable by Amtrak. In the event that such matter is

not removed immediately upon receipt of written demand,

Amtrak may remove said material or display and WNI will

pay any costs or expense incurred by Amtrak, including all

labor charges and warehouse or storage rental incurred as a

consequence of such action. Amtrak shall not, in any way, be

held responsible for liable for any actions taken under this

Section.

J.A. 228

SECTION 7. LAWS, ORDINANCES, RULES AND REGU-

LATIONS

(a) WNI shall comply with all applicable federal, state, and

local laws, ordinances, rules and regulations and with the

rules and regulations of Amtrak, in the erection, display and

maintenance of all advertising. In the event that such laws,

ordinances, rules or regulations require removal of all or any

WNI Installed Inventory, WNI shall promptly comply with

such requirement at its own cost and expense.

(b) WNI shall procure all necessary licenses, certificates,

permits and authorizations, and shall pay all costs thereof.

Shall be prohibited, the parties hereto agree to negotiate in

good faith, an adjustment to the Percentage Payment payable

under Section 3 hereof, said adjustment to reflect the loss of

such advertising categories.

SECTION 8. RATES

(a) WNI shall establish and print a schedule of rates for all

advertising displayed under this Agreement.

(b) A copy of WNI’s published rates, effective as of the

date of this Agreement, is attached hereto as Exhibit “B”,

WNI shall furnish Amtrak with copies of all revisions,

changes and amendments to Exhibit “B”.

as available. WNI shall furnish Amtrak with all data relevant

to determining the schedule of rates for all advertising dis-

played under this Agreement.

SECTION 9. CONTRACT FORMS

WNI shall submit to Amtrak, for prior approval, a!l forms

to be utilized by WNI for contracting with advertisers. Copies

of all contracts or agreements made by WNI pursuant to this

Agreement shall also be submitted, upon request, to Amtrak.

J.A. 229

SECTION 10. STORAGE SPACE

Amtrak agrees, where conditions permit and space is avail-

able, to provide WNI with reasonable space within stations

for handling and storing of WNI’s supplies, materials and

advertising matter to be used pursuant to this Agreement.

Amtrak shall incur no cost, expense or liability whatsoever in

connection with such space, and WNI, if required, shall pay

market rate rental for any unimproved storage space made

available by Amtrak for WNI’s use.

SECTION 11. WORK ON AMTRAK PROPERTY

The work of constructing, maintaining, repairing, altering,

renewing, relocating, or removing any Installed Inventory

shall be done under such conditions as shall be satisfactory to

and be approved in advance by the Chief Engineer of Amtrak,

or his designee, and as will not interfere with the proper and

safe use, operation and enjoyment of the property of Amtrak.

No such work shall be undertaken by or on behalf of WNI

without prior written approval as aforesaid. WNI, at its own

cost and expense, shall, when performing any work in con-

nection with any part of the Installed Inventory, arrange for

any necessary watchmen or flagman to ensure that personnel,

equipment and materials are kept a safe distance away from

the railroad tracks. Any notification required to be given to

Amtrak by WNI shall be sent by certified mail to such per-

sons and addresses as may be designated by Amtrak’s Chief

Engineer or his designee.

SECTION 12. MAINTENANCE

WNI agrees that it will furnish, mount, install and contin-

uously maintain in a clean and first-class condition its

Installed Inventory and all parts thereof, and, in general, do

any and all work under this Agreement, subject to the super-

vision and approval of Amtrak, at such times and in such

manner as in no way to impede or interfere with the use or

operation of Amtrak’s facilities. WNI, its employees, ser-

J.A. 230

vants, suppliers of materials, and furnishers of service shall

have the right to ingress and egress at Amtrak’s facilities,

subject prior approval by Amtrak in order to perform its obli-

gations set forth in this Agreement.

SECTION 13. ADVERTISING EQUIPMENT

(a) WNI shall furnish, mount and install, its own adver-

tising display equipment, including, but not limited to frames,

boards, clocks, poster panels, islands, exhibits, dioramas, or

any other advertising display equipment, at its sole cost and

expense. All equipment is and shall remain the property of

WNI, unless owned by a third party and installed in stations

on a rental basis.

(b) WNI agrees to survey all WNI-installed equipment

within one year of commencement of this Agreement and to

submit to Amtrak a written plan to replace old equipment

and/or add new equipment to the Installed Inventory. Such

plan shall be evaluated by Amtrak and Amtrak and WNI shall

mutually agree on additions to Inventory. It is the intent of

WNI to increase its capital investment and improvements in

Installed Inventory in Amtrak stations over the term of this

Agreement by $1,000,000.

any reason, WNI, at its sole cost and expense, shall remove

from the property, facilities and premises of Amtrak, all

Installed Inventory, including but not limited to advertising

frames, clocks, displays, exhibits, and advertising equipment

and materials which WNI and those claiming by, through or

under it were permitted to install or maintain under the rights

and privileges given by this Agreement, and shall restore said

property, facilities and premises, reasonable wear and tear

excepted.

(d) If WNI shall fail to commence removal of its Installed

Inventory within ninety (90) days after expiration or termi-

nation, then Amtrak may effect such removal and restoration

J.A. 231

at the expense of WNI, and WNI agrees to pay Amtrak the

reasonable cost and expense thereof promptly upon receipt of

invoice therefor.

SECTION 14. ELECTRICITY

(a) Amtrak shall provide existing electrical current for the

illumination/operation of advertising displays and clocks.

(b) Amtrak shall not be responsible for reductions or inter-

ruptions in the supply of electrical power.

SECTION 15. NON-INTERFERENCE WITH

CONCESSIONAIRES

The rights and privileges granted herein to WNI shall not

be deemed to limit the right of Amtrak to grant tenants,

licensees and concessionaires the right to advertise in the

premises or space used by them by agreement of Amtrak.

SECTION 16. TERMINATION BY AMTRAK

In addition to any other termination rights contained in the

Agreement, Amtrak shall have the right, upon sixty (60) days

written notice to WNI, to terminate this Agreement any time

after the occurrence of any one or more of the following ©

events:

(i) Non-payment of Percentage Payment due Amtrak

when such non-payment shall continue for a

periodof twenty (20) days after written notice of

demand for payment.

(ii) If any petition shall be filed by or against WNI to

declare WNI bankrupt, or to delay, reduce or mod-

ify WNI’s debts or obligations or if WNI be

declared insolvent according to law, or if any

assignment of WNI’s property shall be made for

the benefit of creditors, or if a receiver or trustee

is appointed for WNI or its property, Amtrak may

treat the occurrence of any one of more of the

J.A. 232

foregoing events as breach of the Agreement with-

out notice, and immediately enter and repossess

the spaces covered hereunder.

(iii) Abandonment by WNI of and discontinuance of

- Operations hereunder.

(iv) Non-performance of any covenant of this

Agreement, excluding the covenant of payment

herein contained, and failure of WNI to remedy

such breach within a period of sixty (60) days

after receipt of written notice from Amtrak of the

existence of said breach.

(v) If WNI becomes permanently deprived of the

rights, powers and privileges necessary to the

proper conduct and operations of the Installed

Inventory specified in this Agreement.

(vi) Damage by fire or other casualty to the stations

listed in Exhibit A hereto.

(vii) Assumption of control of any of fhe aforesaid sta-

tion by parties other than Amtrak.

SECTION 17. TERMINATION BY WNI

In addition to any other termination rights contained in this

Agreement, this Agreement shall be subject to termination by

WNI in the event any one or more of the following events

occur:

(i) The permanent abandonment of Amtrak’s trans-

portation system, or substantial portions thereof.

(ii) The lawful assumption by the United States

Government, or any authorized agency thereof, of

the operation, control or use of the transportation

facilities covered hereunder, or any substantial

part or parts thereof in such a manner as to sub-

Stantially restrict WNI from operating therefrom

for a period in excess of ninety (90) days.

J.A. 233

(iii) Issuance by any court of competent jurisdiction of

an injunction in any way preventing or restraining

the use of Amtrak’s facilities, and the remaining In

force of such injunction for a period in excess of

ninety (90) days.

(iv) The defau!t oy Amtrak in the performance of any

covenant or agreement herein required to be per-

formed by Amtrak, and the failure of Amtrak to

remedy such default for a period of sixty (60) days

after receipt of written notice by WNI to remedy

the same.

SECTION 18. ABANDONMENT, LEASES, SALFS

(a) This Agreement is expressly made Subject to any aban-

donment of a part of a line or lines or any facilities or ter-

minals of Amtrak, to any and all sales, leases, assignments or

licenses of any of the aforementioned property or premises by

Amtrak, to the provisions of all leases or agreements under

which Amtrak holds said property or premises, to all encum-

brances, conditions, covenants, rights and easements to which

the title of Amtrak is or may be subject, to all other leases or

licenses to which Amtrak is or may be subject, to all leases or

licenses which Amtrak has granted or may grant in the future

to other parties, and to the right of Amtrak at any and all

times: (1). to place or cause to be placed, notices and bulletins

(in locations other than on WNI’s signs) advertising its own

services and mattérs of interest to the public or for the infor-

mation of employees or patrons of Amtrak, (2) to sell, lease

or license any and all of its property and premises, and (3) to

carry on all of its general and special business operations.

(b) In the event Amtrak desires at any time or times to sell,

assign, lease, license or otherwise dispose of any or all of its

property, facilities, and premises, or to abandon any part ofa

line or lines of railroad, WNI at WIN’s sole cost and expense,

shall in any and all such events remove forthwith, upon notice

from Amtrak, any and all Installed Inventory and advertising

J.A. 234

matter thereon permitted hereunder that Amtrak specifies

Should be removed from the property, facilities or premises to

be sold, leased, licensed, or otherwise disposed of.

SECTION 19. FORCE MAJEURE, STRIKE, ETC.

(a) If WNI is deprived of advertising space in any or all the

Stations set forth in Exhibit A hereto for more than thirty (30)

successive days by reason of force majeure, strike, fire, or

other cause beyond the control of WNI, then the Percentage

Payment payable shall be adjusted and/or abated to reflect the

loss of use of the space on a pro-rata basis.

(b) If WNI is totally deprived of advertising space in all

the aforesaid stations for more than sixty (60) successive days

because of force majeure, labor strike, or any other cause

beyond the control of WNI, or if the public is totally denied

normal access to such stations for any reason, then WN] may

cancel this Agreement.in its entirety as of the date of such

deprival of space or denial of access by giving Amtrak writ-

ten notice of its intention do to so, without any further lia-

bility being incurred thereby on the part of WNI or Amtrak

SECTION 20. INSURANCE AND LIABILITY

(a) WNI shall indemnify and save harmless Amtrak and its

_ directors, officers, employees, agents and representatives

from all suits and action of every name and description

brought against them, or which may arise as a result of any

injuries or damages received or sustained by any person, per-

sons or property, or from acts of said WNI, its agents, ser-

vants or employees, performed on the premises of Amtrak.

(b) WNI shall indemnify and save harmless Amtrak and its

directors, officers, employees, agents and representatives

against any claims or liability arising from or based upon the

violation of any federal, state, county or city laws, by-laws,

ordinances, or regulations, by said WNI, its agents, servants

and employees.

J.A. 235

Installed Inventory or to any part thereof or to the contents of

any advertising displays shall not at any time be an obligation

of Amtrak.

(d) WNI shall, at its own cost and expense, maintain in

effect at all times during the existence of this Agreement,

Workmen’s Compensation and Comprehensive Public

Liability Insurance, insurance against death, personal injury,

property damage, and legal-contractual liability, arising from

or in connection with acts or omissions pursuant to this

Agreement, in an amount not less than Three Million Dollars

($3,000,000.00) combined single limit.

(e) During such times as WNI is performing major con-

struction or major repairs, as determined by Amtrak, WN]

will provide Railroad Protective Liability Insurance written

for and on behalf of Amtrak, providing limits of Two Million

Dollars ($2,000,000.00).

(f) Upon execution of this Agreement by Amtrak, WNI

shall furnish certificates of such required insurance, as to con-

tents and carriers, to Amtrak, which will contain the follow-

ing provisions:

(i) Thirty (30) days prior notice to Amtrak of policy

cancellation or termination.

(ii) Under all policies of insurance, Amtrak shall be

included as an additional named insured.

SECTION 21. ASSIGNMENT, SUCCESSORS AND ASSIGNS

(a) WNI shall not assign or transfer any of the rights or

privileges granted herein without the prior written approval

of Amtrak, which shall not be unreasonably withheld.

(b) The terms of this Agreement shall be binding upon the

executors, administrators, successors and assigns of the par-

ties hereto.

J.A. 236

SECTION 22. PATENTS AND TRADEMARKS

WNI represents that it is the owner of or fully authorized to

use any and all services, processes, machines, articles, marks,

names or slogans used by it in its operations under or con-

nected with this Agreement. WNI agrees to save and hold

Amtrak, its directors, officers, employees, agents and repre-

sentatives free and harmless of and from any loss, liability,

expenses, suit or claim for damages in connection with any

actual or alleged infringement of any patent, trademark or

petition or other similar claim arising out of the operations of

WNI under or connected with this Agreement.

SECTION 23. CONDUCT OF EMPLOYEES

WNI agrees that while its officers, agents and employees

are on Amtrak premises, including but not limited to, rail

cars, and about the station buildings, platforms and grounds,

it will cause them to conduct themselves in a proper manner,

and if complaint is made by Amtrak, it will forthwith take

such corrective measures as are necessary.

SECTION 24. NOTICES

All notices, consents, demands, approvals, and requests

(“notices”) which are required or permitted to be given by

either party to the other, pursuant to any provision of this

Agreement, shall be sent by United States certified mail,

return receipt requested, and shall be addressed as follows (or

to such other address as either party may designate from time

to time by written notice to the other):

(i) If to Amtrak:

National Railroad Passenger Corporation

400 North Capitol Street, NW

Washington, DC 20001

Attention: Vice President-Real Estate

J.A. 237

(ii) If to WNI:

Winston Network, Inc.

275 Madison Avenue

New York, NY 10016

Attention: Senior Vice President, Franchise

SECTION 25. WAIVER

No waiver of any term, condition or breach of this

Agreement on any occasion shall be deemed to be a waiver of

any other term, condition or breach of this Agreement on any

other occasion, or a waiver of any continuing or subsequent

breach of the same term or condition.

SECTION 26. INDEPENDENT CONTRACTOR

WNI is an independent professional firm contracting with

Amtrak to provide expert assistance. WNI, its directors, offi-

cers, employees, agents, and servants are not to be deemed

employees, agents, or servants of Amtrak. WNI assumes full

responsibility for liability arising out of the negligence of its

employees, whether by action or inaction. Amtrak assumes no

liability or responsibility for the negligent acts of WNI, its

directors, officers, employees, agents, or servants, by virtue

of entering into this Agreement. WNI is and shall remain an

independent contractor under the terms of this Agreement.

SECTION 27. INTERPRETATION OF AGREEMENT

This Agreement shall be governed and constructed in accor-

dance with the laws of the District of Columbia.

SECTION 28. SECTION TITLES

The titles of Sections are for ease of reference only, and

shall not be construed to control or in any way alter the plain

meaning of the text of this Agreement.

J.A. 238

SECTION 29. NON-DISCRIMINATION

WNI, in exercising any of the rights or privileges herein

granted to it, shall not, on the grounds of age, sex, religion,

race, color or national origin, discriminate or permit dis-

crimination against any person or group of persons in any

manner prohibited by federal, state or local laws. WNI shall

comply with such Equal Opportunity and Affirmative Action

policies required of Amtrak contractors as Amtrak may estab-

lish from time-to-time.

SECTION 30. ENTIRE AGREEMENT

(a) This Agreement represents the entire understanding and

agreement between the parties with respect to the subject mat-

ter hereof.

(b) This Agreement may not be changed orally. This

Agreement may be changed only by a mutual agreement in

writing.

. (c) If any provision of this Agreement is determined to be

invalid or unenforceable, it shall be considered deleted here-

from and shall not invalidate the remaining provisions hereof.

SECTION 31; PRIOR AGREEMENTS

This Agreement cancels and supersedes all prior agree-

ments relating to the subjer: matter of this Agreement

between WNI and Amtrak and |e predecessors of Amtrak, as

such Agreements pertain to the property and land that is

owned, leased or otherwise used or occupied by Amtrak.

SECTION 32. PUBLIC SERVICE ADVERTISING .

(a) WNI shall provide space for public service advertising

On a preemptible basis. All public service advertising shall

be subject to removal at any time for the benefit of paying

advertisers.

J.A. 239

(b) Public service advertising shall be entitled, at WNI,

discretion, to receive unsold advertising space at no space

charge. However, WNI shall be permitted to charge a one-

time labor fee to cover its out-of-pocket labor costs. Such

labor fee shall not be deemed a part WNI’s Net Receipts as

defined in this Agreement.

ing at no space cost, shall provide advertising space, on a pre-

emptible basis, to legitimate non-profit organizations, at an

established discount from regular space rate. The availability

of the discount on the space rate shall be determined by WNI

at its own discretion. All revenues collected pursuant to this

subsection shall be subject to regular revenue sharing with

Amtrak.

(d) Amtrak reserves the right place its own messages, pub-

licizing its own services, on the facilities covered by this

Agreement. WNI will post and remove all such messages for

Amtrak at no charge to Amtrak. All copy shall be provided to

WNI by Amtrak at Amtrak’s expense. All messages posted

pursuant to this sub-section shall be on a preemptible basis

for the benefit of paying advertisers, and shall be reasonable

as to quantity to be posted. All materials to be posted shall be

delivered to WNI not less than three (3) weeks prior to the

required posting date.

SECTION 33. ARBITRATION

Any controversy or claim arising out of or relating to this

contract, or the breach thereof, shall be settled by arbitration

in accordance with the Commercial Arbitration Rules of the

American Arbitration Association and judgment upon the

award rendered by the Arbitrator(s) may be entered in any

court having jurisdiction thereof.

J.A. 240

IN WITNESS WHEREOF, the parties hereto, by their autho-

rized officers, have executed this Agreement as of the day and

year first above written.

ATTEST: WINSTON NETWORK, INC.

By: _[illegible]/s/

Witness By: __[illegible|/s/

Senior Vice President

Date: _[illegible]

ATTEST: NATIONAL RAILROAD PASSENGER

By: _[illegible]/s CORPORATION

Witness

By: _[illegible]/s/

Assistant Vice President

Real Estate

Date: February 28. 1986

J.A. 241

EXHIBIT A

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J.A. 242

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STATION }- 2. 3- CLCKS DRMS OTHER PLAINTIFF’S EXHIBIT 4

SH. SH. SH. in ‘ PERMIT FOR

DEVON ate eee ADVERTISING DISPLAY FACILITY

BERWYN a a 0 0 (ADF)

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DAYLESFORD ; , THIS PERMIT AGREEMENT is made this 15th day of

PAOLI | : 8.2 Ss August, 1980, by and between the NATIONAL RAILROAD

TOTAL 112 687 425 77 44

PASSENGER CORPORATION, a Corporation of the District

of Columbia, with offices at 400 North Capitol Street, N.W.,

Washington, D. C. 20001 (hereinafter called the “Permiitor”),

and TRANSPORTATION DISPLAYS INC., a Corporation of

the State of New York, with offices at 275 Madison Avenue,

New York, New York 10016, (hereinafter called the

“Permittee”).

1. GRANT

WITNESSETH, that for and in consideration of the pay-

ments, covenants and agreements hereinafter mentioned, stip-

ulated and contained, on the part of the Permittee to be paid,

kept and performed, Permittor does hereby permit the

Permittee to be the sole and exclusive advertising sales rep-

resentative for the advertising spectacular display hereinafter

described and to maintain, at Permittee’s sole cost and

expense, said advertising spectacular display (hereinafter

called the “facility”) for sale to advertisers, being 100 feet in

length by 10 feet in width situate over Permittor’s ticket

counter located on the west side of the Ticket Concourse of

Permittor’s Pennsylvania Station situate between Eighth and

Seventh Avenues, 31st to 33rd Streets, in the Borough of

Manhattan, City, County and State of New York.

J.A. 245

2. PURPOSE

The purpose of the Permittor in extending the permission

granted hereby is to have available at the location afore-

mentioned the services which the Permittee is authorized to

render hereunder, and with respect hereto the Permittee agrees

that it will conduct a first class operation and will furnish all

necessary equipment, personnel, supplies, materials and other

facilities therefor.

3. RESERVATION

Permittor hereby reserves unto itself and its licensees the

right and easement to maintain, repair and renew any pipe,

conduit, electric and communication lines, and any other

facilities of like character, as may now exist or may hereafter

be placed upon, under or over the facility, it being agreed that

this permit is subject and subordinate to any and all such

rights, easements and uses. Permittee shall occupy and use the

facility in a careful, safe and orderly manner so as not to

interfere in any way with the maintenance or operation of the

business of Permittor or of its licensees or with any structures

or facilities appurtenant to the business of Permittor or of its

licensees.

4. EFFECTIVE PERIOD

The effective period of this Permit is Five (5) years, com-

mencing on the First day of January 1980, and ending on the

Last day of December 1984, yielding and paying therefor to

Permittor, without any previous demand therefor, such fees,

additional charges and sums as hereinafter set forth at P.O.

Box 1582, Group No. 5, Washington, D- C. 20013, or at any

such other place as Permittor may from time to time

designate.

J.A. 246

5. TERMINATION

Permittor shall have the right to terminate this permit at any

time during the effective period hereof by giving to Permittee

at least Ninety (90) days prior written notice of intention so

to do in the event that the Permittor shall desire to use the

facility, or any portion thereof, either for itself or through

agreement with others for transportation or public service pur-

poses, or for construction, reconstruction, demolition, sale or

lease of that portion of the building of which the demised

premises constitute a part and upon the date of termination

specified in such notice this permit shall cease, terminate and

come to an end. In the event of the expiration or termination

of this permit, whether under the provisions of this Section

“5S”, or otherwise, Permittee shall peaceably quit and deliver

possession of the facility to Permittor on or before such date

of expiration or termination.

If the last day of the term of this permit falls on Sunday

this permit shall expire on the business day immediately

preceding.

6. COMPENSATION

The Permittee shall pay to Permittor from the date of com-

mencement of this permit fees which shall be equal to sixty-

five per centum (65%) of the monthly gross receipts of

Permittee from said facility; said fee to be paid in equal

monthly installments, on or before the fifteenth (15th) day of

each succeeding month during the continuance of this permit,

said payment to be accompanied by a true statement, signed

by Permittee’s chief financial officer, of Permittee’s gross

receipts during the preceding month in such form and detail

as the Permittor may request (Permittor reserves the right at

any time and from time to time to change said form and/or

request different or additional information); adjustments on

account thereof shall be made for the preceding year here-

under within thirty (30) days following the end of said yearly

J.A. 247

period. On or before such day, Permittee shall furnish

Permittor with a statement of its gross receipts for the said

yearly period attested to by Permittee’s chief financial officer

or by the Certified Public Accountant then under retainer by

Permittee for the audit of its books and records (if Permittee

shall have such public accountant then under retainer) or such

other person normally charged by the Permittee with such

responsibility for the audit or maintenance of Permittee’s

books and records.

The term “Gross Receipts” as used in this Permit shall

mean and include all gross revenue of Permittee, derived from

or attributable to the use, enjoyment or operation of the facil-

ity, including, without limitation, the following:

All gross revenues (i) for the use of facility under any use

Or occupancy agreements, written or oral and however

denominated (whether sub-lease, license, concession, fran-

chise, privilege or otherwise), from any persons, including

subtenants, licensees, concessionaires or otherwise, (ii) for

and in consideration of the cancellation, surrender or modi-

fication of any such agreement, (iii) for the admission to or

use of facilities forming a part of or appurtenant to the facil-

ity (iv) from the operation or use of the facility or any busi-

ness conducted thereon by Permittee and (v) all amounts paid

by advertisers or users of the facility to Government

Authorities or persons other than Permittee in discharge of

obligations of Permittee, whether or not arising out of or in

connection with the facility.

Provided however that “Gross Receipts” shall not mean or

include the following:

(1) Agency commissions, cash discounts, or fees paid to

collection agencies, excluding however commissions of any

kind of parent, subsidiary, or affiliated companies.

Permittee further covenants and agrees to pay to the

Permittor, as additional fees for the electric current and ven-

tilation furnished, a sum of Eight Hundred Thirty One and

78/100 Dollars ($831.78) per month commencing January I,

1980, said sum to be paid in advance on the first day of each

ef sae

J.A. 248

and every month during the continuance of this agreement at

the office hereinbefore designated; provided, however, that

from time to time the amount of such additional fees shall be

reviewed and adjusted by the Permittor in accordance with

Permittee’s actual consumption of electricity and the rate

charged Permittor therefor.

If Permittor is entitled to an adjustment of the fees in accor-

dance with the above provisions, Permittor shall send a notice

to Permittee setting forth the new fees. Any delay of

Permittor in sending such notice shall not constitute a waiver

of or in any way impair the continuing obligation of Permittee

to pay such fee adjustments. In the event of an adjustment in

the fees applicable to the permit year in which this permit ter-

minates, the Permittee shall pay to the Permittor any addi-

tional fees owed for the months elapsed in such permit year

within fifteen (15) days after such notice.

7. RECORD KEEPING: AUDITS

Permittor shall have the right, at any time and from time to

time (but not after three (3) years subsequent to the expiration

of the pertinent permit year), to cause an audit of Permittee’s

operation of the facility to be made by Permittor’s Auditing

Department, an independent Certified Public Accountant, or

a firm of independent Certified Public Accountants or any

other agent of Permittor selected by Permittor, or any federal

agency including the General Accounting Office which has

the right to audit Permittor’s accounts, to verify the amount

of Permittee’s gross receipts reported by Permittee for any

permit year or portion thereof.

If such audit reveals an understatement of Permittee’s gross

receipts for the period in question and a consequent defi-

ciency in the payment of percentage fees, Permittee shall

forthwith pay the amount of such deficiency to Permittor, and

if such audit reveals an overpayment of percentage fees,

Permittor shall credit against the next monthly installment(s)

of fees falling due the amount of such overpayment; provided,

J.A. 249

however, that if the amount of any refund due Permittee here-

under exceeds the aggregate remaining installment(s) of fees

and Permittee has fully complied with all of the terms,

covenants, conditions and provisions to be performed by

Permittee under this permit and is not indebted to Permittor,

the amount of such excess shall be paid by Permittee within

thirty (30) days after Permittee has duly vacated the facility.

The cost of such audit shall be borne by Permittor unless such

audit reveals a deficiency of more than two percent (2%) or

Five Hundred Dollars ($500.00), whichever is the lesser, in

the percentage fees which should have been paid by Permittee

for the period in question, in which event Permittee shali pay

to Permittor on demand the costs of such audit and ten per-

cent (10%) of the amount so underpaid as additional fees.

Any payment, credit or refund to be made under this pro-

vision shall be without interest. The provisions of this

covenant shall survive the expiration or other termination of

this permit.

Permittee agrees to maintain and keep at its offices afore-

mentioned for a period of not less than three (3) years fol-

lowing the end of each permit year, records which shall show

annual gross receipts from the facility. For the period of three

(3) years following the expiration or earlier termination of

this permit, all of the records provided for hereunder shall be

made available to Permittor upon written demand therefor by

Permittor to Permittee, and to that extent the provisions of

this covenant shall survive the expiration of the term.

It is the purpose and intent of the Permittor and Permittee

that the annual fees shall be absolutely net to the Permittor, so

that this permit shall yield, to the Permittor, the fees herein-

before provided on the dates specified, and that all costs, fees,

interest, charges, expenses, reimbursements, and obligations

of every kind and nature whatsoever relating to the facility

(excepting any payments on account of any fee mortgage

which the Permittor may place upon the fee) which may arise

or become due during or out of the term if this permit shall be

paid or discharged by the Permittee as additional fees, and the

J.A. 250

Permittee hereby agrees to indemnify and hold Permittor

harmless from and against such costs, fees, interests, charges,

expenses, reimbursements, obligations and any interest

thereon. :

Permittee will also pay without notice, and without abate-

ment, deduction, or set off, except as may be required or per-

mitted by this permit, as additional fees, all sums, taxes,

assessments, costs, expenses, and other payments which the

Permittee in any of the provisions of this permit assumes or

agrees to pay, and in the event of any nonpayment thereof, the

Permittor shall have (in addition to all other rights, and reme-

dies) all the rights and remedies provided herein or by law in

the event of nonpayment of fees.

8. COVENANT TO PAY FEES

Permittee will pay all fees and additional fees when due,

without any setoff or deduction whatsoever, and any payment

or receipt thereof by Permittor or its agent of any amount less

than the full amount to which Permittor deems it is entitled

Shall not operate or be deemed to operate as a settlement or

Satisfaction of said fees or other amounts due, notwith-

Standing any statement or endorsement on the check or other

paper accompanying the payment, but Permittor shall be

deemed to have accepted said payment without prejudice and

subject to its right to collect the balance actually due, as well

as subject to any and all other rights available to Permittor by

law and under this permit agreement.

9. LATE PAYMENT

If Permittee does not pay fees or any additional fees here-

under on the day when the same shall become due -and

payable and such failure to pay fees or any additional fees

shall continue for a period of ten (10) days, Permittee shall

pay to Permittor, a service charge at the rate of twelve percent

(12%) per annum, or the highest rate allowed by law,

J.A. 251

whichever is the greater of the amount of such fees or any

additional fees or all of them for each month or portion of a

month that the same shall remain unpaid; provided, however,

that such service charge shall in no event, be less than Fifty

Dollars ($50.00) for any month or portion of a month that fees

or any additional fees shall remain unpaid. The provisions of

this paragraph shall not preclude Permittor from exercising its

options as set forth in any other Section of this permit

agreement.

10. ELECTRICITY AND VENTILATION

Permittor will allow use of existing electric current for

Permittee’s needs and allow use of ventilating equipment nec-

essary to exhaust heat generated by illumination of the facil-

ity; provided however, that Permittee shall provide all

ventilation equipment and modifications, if needed, to elec-

tric current solely at its own expense and cost. Permittee

agrees that Permittor shall not be liable for any failure to sup-

ply electric current or ventilation not due solely to its gross

negligence; provided however, that in event of any power fail-

ure wherein Permittee is obligated to grant a third-party

Advertiser a credit against fees or the cost of electricity con-

sumed, then Permittor shall grant the same credit to

Permitiee.

Perraittee shall give Permittor prompt written notice of any

accidents to or defects in electric wires, to be remedied by

Permittor with due diligence.

11. TAXES

The Permittee shall pay all taxes, license, certification,

permit and examination fees and excises which may be

assessed, levied, exacted or imposed on or against the facil-

ity or other property of the Permittee or the ownership, pos-—

session or use thereof, or on the Permittee’s operation

hereunder or on the gross receipts or income from such oper-

aT Mu sibed

J.A. 252

ation, and shall make all applications, reports and returns

required in connection therewith.

The obligation to make any payment pursuant to this

Article “11” shall survive the expiration, revocation, or ter-

mination of the effective period hereof.

Permittee shall, in addition to the foregoing, pay any new

tax of a nature not presently in effect or contemplated, but

which may be hereafter levied, assessed, or imposed upon the

Permittor or the facility, if such tax shall be based on or arise

out of the ownership, use, occupation or operation of the

facility.

12. LIMITED USE

Permittee shall not use or occupy the facility for any other

purpose whatsoever than: commercial advertising.

The statement in this permit as to the nature of the business

to be conducted by Permittee in the facility shall not be

deemed or construed to constitute a representation or warranty

by Permittor that such business that may be conducted in or

on the facility is lawful or permissible.

13. MAINTENANCE AND REPAIRS

Permittee has inspected and accepts the facility in its pre-

sent condition and agrees that no representations or warranties

with regard to condition, fitness for use or zoning of facility

have been made that are not specifically expressed herein;

and further agrees, at Permittee’s sole cost and expense, to put

and keep the facility in constant good order, repair and safe

condition; and further agrees upon the expiration or other ter-

mination of this permit, to peaceably quit and deliver control

of the facility to Permittor in like good order, repair and safe

condition, reasonable wear and tear expected.

Permittee further agrees that upon the termination of this

agreement, Permittee shall, at its sole cost and expense,

remove from the said facility all fixtures and equipment,

J.A. 253

goods and property owned by it and restore the facility to a

condition satisfactory to Permittor; in case Permittee shall

neglect, or refuse so to do, Permittor shall have the right

forthwith to make such removal and restoration at the cost

and expense of Permittee, which cost and expense Permittee

hereby expressly agrees to pay on demand. and Permittee

hereby authorizes Permittor so to do, without being liable to

Permittee or to any other person or corporation, for any dam-

age or compensation or to any suit or action for or on account

of such removal and restoration.

Permittee further agrees that it shall, at its own cost and

expense, assume maintenance of the entire advertising display

and supporting structure and all facilities in connection there-

with, including, but not limited to ordinary and extra-ordinary

maintenance, cleaning, replacement lamps, supervision, all

display equipment including transparencies, front lighted

copy, lighting equipment and light fixtures, and all special

equipment and fixtures required.

Permittee further agrees for itself, its employees and

agents, that it will and they will place, remove and arrange

materials or property, and in general do any and all work

under this agreement, at such times and in such manner as in

no way to impede or interfere with the operations of

Permittor.

It is expressly agreed that should Permittor at any time at

its option make any repairs, renewals or alterations, same

shall not constitute a waiver of this covenant “13”, or any por-

tion hereof, or of any other provisions of this lease agreement,

or of any law or custom pertaining to Permittee’s obligations

relative to maintenance, repairs, renewals or alterations.

14. COVENANT AGAINST ASSIGNMENT

Permittee shall not assign or transfer this permit in whole

or in part, without the prior written consent of Permittor; and

Permittee shall not mortgage or otherwise encumber or per-

mit to be encumbered the facility or any part thereof, or any

J.A. 254

structures now or hereafter placed on the facility, without the

prior written consent of Permittor, and written consent to

assign or transfer this permit in whole or in part, or to mort-

gage or otherwise encumber the facility or any part thereof, or

any structures now or hereafter placed on the facility, shall

not be deemed as waiving this restriction except to the extent

of Permittor’s said written consent, or as giving assent to any

or further assignment, subletting, mortgaging or encum-

brancing. Any assignment or transfer by merger, consolida-

tion, operation of law or proceedings in equity, bankruptcy,

insolvency or reorganization, or any other transfer of a con-

trolling interest of the stock of Permittee to persons not now

in control, shall be deemed to be an assignment within the

meaning of this provision.

The term “assign”, as used herein, shall also include (i) an

assignment of a part interest in this permit, as well as any

assignment from one co-tenant to another; and (ii) an assign-

ment to any prior owner of tenant’s interest herein or part

thereof.

15. HAZARDOUS USE

Permittee shall comply with all regulations, recommenda-

tions, rules and requirements of Permittor, the local board of

fire underwriters and any insurance carrier which insures or

participates in insuring the facility and Permittee shall not

knowingly permit any article to be brought upon or any act to

be done upon or about the facility that will cause cancellation

of any policy of insurance thereon or increase rates for such

insurance beyond those usually charged for similar properties

used for the purpose herein authorized.

Without limiting the generality of the foregoing, Permittee

shall not use or keep gasoline in any form upon the facility, or

bring upon, store or allow to be stored upon the facility any

materials of a dangerous or highly flammable nature or of

such nature as to cause an extra fire risk or hazard, unless

otherwise specifically provided herein, and will comply with

J.A. 255

all such reasonable rules and regulations as Permittor may

prescribe looking to prevention of fires and compliance with

insurance contracts and policies.

Permittee will allow Permittor’s Insurance Department

Inspectors to periodically inspect the said facility when mak-

ing any fire inspection of the building which the same is a

part.

16. CLEANING AND SANITATION

Permittee shall keep the facility in a clean and sanitary con-

dition, including cleaning of floors, windows and lighting fix-

tures, and will cause all dirt, rubbish and other refuse matter

to be carefully collected and promptly disposed of in a man-

ner satisfactory to Permittor. The removal of said dart, rubbish

and other refuse matter shall be at the expense 6{Permittee

who shall employ only such cleaning, garbage and trash

removal contractors as may be approved by Permittor.

17. ORDINANCES

Permittee, at its sole cost and expense, shall comply with

and obey all laws, ordinances, rules, regulations and require-

ments of all Federal, State, Municipal, County, Town, Village

or other governmental authorities and the various departments —

thereof now existing or hereafter created, so far as the same

may affect the facility and make any corrections to the facil-

ity necessary to comply with said laws, ordinances, rules and

regulations and requirements, and will indemnify, defend and

save harmless Permittor from any failure on the part of

Permittee so to do.

18. SERVICE PERSONNEL

Permittee will provide sufficient personnel to ‘service and

maintain the facility.

J.A. 256

Permittee’s service personnel and those doing busincss with

Permittee shall at all times be neatly dressed, observe all reg-

ulations in effect at the facility, and conduct operations in an

orderly and proper manner so as not to annoy, disturb or be

offensive to others at the facility. In the event Permittor shall

object to the demeanor, conduct and appearance of the

employees and invitees of the Permittee, and of those doing

business with Permittee, Permittee will take all steps neces-

sary to remove the cause of the objection.

19. PARKING

The Permittee, its employees, invitees and others doing

business with Permittee shall have no right hereunder to park

vehicles at the Station beyond a reasonable loading or dis-

charging time, except in regular parking areas, if any, and

~ upon payment of the regular charges therefor.

All service personnel shall use the designated service

entrance and park service vehicles in the designated areas, if

any.

20. SIGNS AND ADVERTISING

Permittee shall not paint, post or display any sign or adver-

tisement on the said facility without the prior written approval

of Permittor and requirement for such approval shall extend

to the location, character, design, coloring and lettering of

such sign or advertisement.

21. ALTERATIONS AND REMOVALS

Permittee shall not make any alterations, additions or

improvements on or to the facility without the prior written

consent of Permittor, and all alterations, additions or improve-

ments which may be made by either Permittor or Permittee

upon the facility, unless herein otherwise provided, and

J.A. 257

except the personal property of Permittee which includes

movable furniture, furnishings, and equipment shall be prop-

erty of Permittor and shall remain upon and be surrendered

with the facility as part thereof at the expiration or other ter-

mination of this permit without disturbance, molestation or

injury.

22. PERMITTEE’S RESPONSIBILITY

TO ITS EMPLOYEES

~ Permittee, in the performance of any and all work by

Permittee under the terms of this permit or otherwise, upon or

adjacent to the facility, will furnish all labor and supervisory

forces of every kind and Permittee shall employ, pay from

Permittee’s own funds and have the right to discharge all per-

sons engaged in the performance of such work and all such

persons shall be and remain the sole employees of Permygtee

and subiect to Permittee’s exclusive supervision, direction

and control.

23. LIENS AND CHARGES

Permittee, within thirty (30) days after completion of any

construction, alterations, repair or improvement in or upon the

facility, shall furnish to Permittor, a detailed certified state-

ment of all labor and materials furnished and charges there-

for, together with evidence of payment of all such charges,

and a complete waiver and release of liens.

The creation or imposition of any lien or charge upon the

demised premises through acts or omissions of Permittee, its

agents, contractors or sub-contractors shall be deemed a

default under the provisions of this permit.

In the event any such lien or charge shall not be paid or

bonded by Permittee within fifteen (15) days after the lien

or charge accrues, Permittor shall have the right to pay such

lien or charge and Permittee shall repay the cost to Permittor,

as additional fees hereunder, with interest at twelve percent

J.A. 258

(12%) per annum or the highest interest allowable by law,

whichever is the greater from the date of payment by

Permittor, promptly upon rendition of a bill therefor. Nothing

in this paragraph or in any other paragraph of this permit shall

be deemed or construed as authority to Permittee to create any

lien on the Permittor’s interest in the facility.

24. INDEMNIFICATION

Permittee will be responsible for and will indemnify, save

harmless and defend Permittor against and from any and all

claims and suits for, and any and all liability, loss or expense

arising from or incidental to or in connection with, damage to

or loss of property of Permittor, Permittee, or of agents, ser-

vants, licensees, contractors, invitees or employees of either,

or of any other person, and against and from any and all

claims and suits for, and any and all liability, loss or expense

arising from or incidental to or in connection with, injury to

or death of persons, including agents, servants, contractors,

licensees, invitees or employees of Permittor or of Permittee,

or any other person (including Permittee if a natural person),

which said damage, loss, injury or death shall arise in any

manner, directly or indirectly, out of or incidental to or in

connection with, this permit or the facility, or the use or occu-

pation thereof, including any appurtenant sidewalks or

driveways.

Permittee specifically agrees to relieve Permittor of any and

all liability for damage to contents of the facility owned by or

in the custody of Permittee, or improvements therein owned

by or in the custody of Permittee, whether damaged by fire

and extended coverage perils or other causes.

The term “Permittor” as used in this Section “24”, shall

include not only Permittor specifically named herein, but also

any licensees, contractors or corporate affiliate of Permittor.

J.A. 259

25. LOSS OR DAMAGE

Permittor shall not be liable to Permittee for any loss,

injury or damage which may happen to the person (if Per-

mittee is natural person) or property of Permittee, of

Permittee’s employees or of persons claiming under Per-

mittee, while on.or about the facility, caused by theft, fire, or

by the handling of electrical installations, or by accident to

or breakage of any of the machinery, piping or plumbing, fix-

tures or other appurtenances connected with any building or

by water, rain or snow which may leak into, issue or overflow

from any part of any such building.

26. INSURANCE

Permittee shall, at its own expense, procure and keep in

force at all times during the term of this permit, insurance of

the following types and amounts: Comprehensive Public

Liability insurance in an amount of not less than Five

Hundred Thousand Dollars ($500,000.) for personal injury to

any one person; One Million Dollars ($1,000,000.) for per-

sonal injuries arising out of any one accident or occurrence

and One Hundred Thousand Dollars ($100,000.) for property

damage.

Permittee, if requested by Permittor at any time or times,

shall provide and maintain in effect during the term hereof,

fire and extended coverage and vandalism and malicious mis-

chief insurance on the facility and any and all structures and

improvements thereon, protecting Permittor in limits, carri-

ers and form acceptable to Permittor and Permittee shall also

provide and maintain in effect during the term hereof, cov-

erage against such other hazards as Permittor may from time

to time require.

All insurance shall be in the name of Permittee with con-

tractual liability endorsement identifying the permit location,

principals, date, and quoting verbatim the liability assumed

by Permittee. The insurance shall be placed with insurance

J.A. 260

companies licensed to do business in the state where the facil-

ity is located and if approved by Permittor. Permittee shall

furnish Permittor with a certificate, or certificates, issued by

the insurance carrier(s) evidencing such insurance including

a waiver of subrogation against Permittor and reciting the

contractual liability assumed by Permittee. Each policy shall

provide that it shall not be cancelled or materially changed

unless at least thirty (30) days” prior written notice of can-

cellation or change shall have been mailed by the insurance

carrier to Permittor at the address designed in Article “4”

hereof. All policies of insurance shall be subject to inspection

by Permittor at any time.

Policy or policies of fire, extended coverage or other insur-

ance on property of Permittee or in the Permittee’s care and

custody shall contain a waiver of subrogation against

Permittor.

Permittee shall furnish to Permittor complete copies of all

such insurance policies with evidence of payment of prem1-

ums therefor upon request of Permittor. All such policies shall

be endorsed to provide not less than thirty (30) days’ notice

to Permittor of any cancellation thereof and of any material

change in coverage.

The providing of said insurance coverages shall not be

deemed a limitation on the liability of Permittee as provided

in this permit, but shall be additional security therefor.

Each and every year on the First (1st) day of January,

Permittee shall furnish Permittor with a certificate or cer-

tificates, issued by the insurance carrier(s) with evidence of

payments of premium(s).

The failure by the Permittee at any time to procure and/or

maintain the above stated insurance will constitute a default

under Article “31” hereof and Permittor may terminate this

permit.

J.A. 261

27. THIRD-PARTY ADVERTISEMENTS

Before any binding contract is entered into and any adver-

tisement is emplaced or installed, Permittee shall submit all

third-party advertisements to the Permittor for its written

approval of the following: the size or dimension, nature of

product to be advertised, form, nature, style, wording and

contents of the advertisement.

Without limiting the scope of its right to disapprove any

advertising which Permittor in its sole judgment considers

should not be accepted or installed by Permittee, Permittor

makes the reservations contained herein to preclude any

advertising that, in its judgment, may be unlawful, immoral,

improper or offensive to good taste, or be in competition

directly or indirectly with the transportation conducted by

Permittor or its affiliated companies; or involve political or

other views which could result in dissension or involve

Permittor in dissension, complaints or controversy with its

patrons or the public or involve matters or ramifications not

now anticipated or foreseeable.

Permittee shall provide in its contracts with its third-party

advertisers that notwithstanding the fact that Permittor and

Permittee may have permitted the advertising to be placed on

Permittor’s property as herein provided, Permittor has

reserved the right and shall have the right to cause to be

removed forthwith without liability to Permittee or its third-

party advertiser any advertisement which in the judgment of

Permittor is or might be deemed to be slanderous, libelous,

unlawful, immoral, offensive to good taste, involves illegal

competition or trade practices, infringement of trademarks,

trade names, violates rights or privacy, infringement of copy-

rights or proprietary rights. 3

Permittee, as part of its obligation under Article “26”

to provide insurance against liability of Permittor, shall in

addition thereto provide insurance against any action against

itself or Permittor in the nature of defamation, libel, slander,

J.A. 262

invasion of privacy or the like in the same amounts and under

the same conditions as provided in Article “26”

28. FIRE CLAUSE

If the facility and/or the location(s) wherein the equipment

is placed or installed shall be so damaged by fire or other

cause without the fault or neglect of Permittee, Permittee’s

servants, employees, or agents, so as to render the facility

and/or the location(s) unuseable for Permittee’s operations,

then either party may terminate or revoke, this permit upon

ten (10) days’ prior written notice to the other, and neither

party shall incur any liability or have any claims against the

other by reason of such termination except for such sums due

and owing to Permittor from Permittee prior to the date of ter-

mination or revocation; provided, however, if such damage is

due to the fault of Permittee, Permittee’s servants, employees,

Or agents, the damage shall be repaired by or at the

Permittee’s expense and fees payable during the period of dis-

repair shall not be less than the average monthly fees due or

paid Permittor over the preceding six-month period.

29. CONDEMNATION

If the whole or any part of the facility shall be taken for any

public or quasi-public use, under any statute or by right of

eminent domain or private purchase in lieu thereof by a pub-

lic body vested with the power of eminent domain, then, when

control shall be taken thereunder of the facility, or any part

thereof, the term herein granted and all rights of the Permittee

hereunder shall immediately terminate, and Permittee shall

have no claim against Permittor for the value of any unex-

pired term of this permit.

J.A. 263

30. DEFINITIONS

The word “Permittee” as used herein shall be construed to

include the plural as well as the singular and the necessary

grammatical changes required to make the provisions hereof

apply either to corporations or other forms of business asso-

ciation or to an individual or individuals, masculine or fem-

inine, in all cases shall be assumed as having been made

herein as though herein fully expressed.

The term “Permittor” as used in this permit, means only the -

owner or the mortgagee in possession for the time being of

the land and building (or the owner of a lease of the building

or of the land and building) of which the facility forms a part

so that in the event of any sale or sales of said land and build-

ing or of said permit, or in the event of a lease of said build-

ing, or of the land and building, the said Permittor shall! be

and hereby is entirely freed and relieved of all covenants and

obligations of Permittee hereunder.

The words “re-enter” and “re-entry” as used in this permit

are not restricted to their technical legal meaning.

The word “period” as used in this permit shall include any

preliminary period and/or any extension, renewal, or contin-

ued period or periods except where expressly excluded.

The term “permit year” as used herein shall be the period of

one year’s duration commencing on the first day when

Permittee becomes obligated to pay fees and each successive

period of one year’s duration commencing on the anniversary

of the first day when Permittee becomes obligated to pay fees.

The term “additional fees” as used herein shall be all costs

and expenses other than fixed fees which Permittee assumes

or agrees to pay pursuant to this permit.

31. DEFAULT

If default shall be made in Permittee’s covenants herein to

pay fees or additional fees, or if default shall be made in any

other covenants and agreements herein contained on the part

J.A. 264

of Permittee to be kept or performed, and if any such default

shall not be cured within thirty (30) days after Permittee has

been given written notice by Permittee to do so, or if the

facility shall not be used by Permittee for the purposes herein

authorized for a period of more than thirty (30) days, or if the

facility should at any time be used for purposes other than as

herein permitted, or if Permittee shall file or suffer to be filed

against it a petition in bankruptcy, or if Permittee shall have

an order for relief entered against it according to bankruptcy

law, or if a receiver or trustee be appointed for the property of

Permittee, or if Permittee shall make a general assignment for

the benefit of creditors, then, in any of such cases, Permittor

may, by written notice to Permittee immediately declare this

permit terminated, and in such event, in addition to any other

action or remedy which Permittor may have at law or in

equity to recover damages or otherwise by reason of a breach

by Permittee of provisions of this permit, Permittor shall have

the right to remove Permittee by summary proceedings and

thereafter Permittor may re-enter upon and take control of the

facility and every part thereof, either by force or otherwise,

without being liable to any prosecution, action or damages

therefor and have and enjoy the facility as of its former estate

free, clear and discharged of this permit and of all rights of

Permittee hereunder; and all buildings, structures, improve-

ments, materials and personal property owned, erected or

placed upon the facility by or for Permittee or acquired by

Permittee from a prior occupant, shall thereupon be and

become the property of Permittor and may be sold or retained

by Permittor or may be removed or demolished by Permittor

at the sole cost and expense of Permittee, which cost and

expense Permittee shall pay to Permittor upon demand; and

Permittee also shall pay to Permittor upon demand all fees

and expenses, including reasonable attorneys fees, incurred in

connection with and in obtaining contro) of the facility as

aforesaid. aes od

Upon termination of this permit by Permittor under the

default provisions of this permit agreement, all fees for the

———

J.A. 265

remainder of the term of this permit, or for the remainder of

any continued term hereof, shall be due and payable forthwith

and Permittor may proceed according to law to collect the

same and may subcontract the facility and receive and retain

fees therefor and Permittee shall pay to Permittor any defi-

ciency between the fees hereby reserved, including additional

fees, and the fees collected for each month of the period

which would otherwise have constituted the balance of the

term of this permit or of any continued term hereof.

. The receipt by or on behalf of Permittee of any fees or

additional fees with or without knowledge of any breach of

any of the terms, covenants or conditions of this permit agree-

ment, shall not be deemed a waiver of such breach, nor shall

such receipt be deemed a withdrawal of any notice given to

Permittee under the terms of this permit agreement, nor shall

such receipt be deemed a reinstatement or reestablishment of

this permit or any portion thereof after termination or can-

cellation, nor shall the termination or other cancellation of

this permit agreement or any portion thereof waive the obli-

gation of Permittee to pay or discharge any fees, additional

fees, taxes or other obligations accruing under this permit

agreement.

Permittee hereby waives and relinquishes unto and in favor

of Permittor the operation of all laws which do now or here-

after may exempt any property on the facility or any property

in any way belonging to Permittee, whether on the facility or

elsewhere, from levy and sale upon distress for rent or upon

execution of any judgment obtained in an action brought for

non-payment of any fees or additional fees hereunder or for

breach of any other provisions hereof. The parties hereto shall

and do hereby waive trial by jury in any action, proceeding or

counter-claim brought by either party against the other on any

matter whatsoever arising out of or in any way connected with

this permit or Permittee’s use of and occupancy of the facil-

ity or arising out of or in any way connected with any claim

of injury or damage arising out of or in connection with this

permit or such use or control. Permittee hereby expressly

J.A. 266

_ Waives any and all rights of redemption granted by or under

any present or future laws in the event of Permittee being

evicted or dispossessed for any cause or in the event of

Permittor obtaining control of facility by reason of the vio-

lation by Permittee of any of the covenants and conditions of

this permit or otherwise. ao

32. REMOVAL

Upon the expiration of the term hereof, or upon any other

termination of this permit for reasons other than default on the

part of Permittee, or upon default if required by Permittor

Permittee at sole cost and expense, shall remove from the

facility any materials not owned by Permittor, and all waste

rubbish and debris; and restore the premises to as good con-

dition as they were in before such property was erected or

placed thereon; and all such work of removal and restoration

shall be cpmpleted on or before the expiration or other ter-

mination of this permit. Should Permittee fail, neglect or

refuse to so remove such property and make the aforesaid

restoration, then and in such event Permittor shall have the

following rights, which are hereby expressly given it, viz.: to

remove such property and to make the aforesaid restoration

all at the expense of Permittee, which expense Permittee

hereby expressly agrees to pay promptly upon demand, or to

sell any of such property and retain the proceeds of such sale

and to deliver such property to the purchaser or purchasers

thereof free and clear of any right, title or interest therein of

Permittee or of any person or corporation claiming through or

under Permittee or of any person or corporation claiming

through or under Permittee and without any liability what-

soever to Permittee or to any other person or corporation; or

if Permittor so elects, in lieu of such sale or removal of any of

such property, Permittor may retain and use the same for any

purpose whatsoever free and clear of any right, title or inter-

est therein of Permittee or of any person or corporation claim-

J.A. 267

ing through or under Permittee and without any liability what-

soever to Permittee or to any other person or corporation.

33. DEFAULT REMEDIES

The actions and remedies provided in this permit in event

of default shall not be deemed exclusive but shall be in addi-

tion to all other actions and remedies at law or in equity in

event of any such default; and no action or remedy taken or

omitted by Permittor in event of default shall be deemed a

waiver of such default and waiver of a particular default shall

not be deemed a waiver of any other default or a waiver of the

same default again occurring, nor shall any failure on the part

Permittor to compel a fulfillment of any one or more of the

covenants, terms and conditions herein contained be held to

be a waiver of its right to enforce the same at any time there-

after during the term of this permit.

34. EQUAL OPPORTUNITY AFFIRMATIVE ACTION:

NON-DISCRIMINATION

During the term of this permit the Permittee covenants and

agrees to conform and comply (where and when applicable)

with each and every term and condition outlined on Exhibits

“A”, and “B” which are attached hereto and made a part

hereof. The terms “Permittor” and “Permittee” shall be sub-

stituted for “Lessor” and “Lessee,” respectively, whenever the

same appear in Exhibits “A” and “B”. It is agreed that the

Permittee’s non-compliance with the provisions of this clause

shall constitute a default under Article “31” hereof and the

Permittor may terminate this permit, or may pursue such other

remedies as may be provided by law.

35. INABILITY TO PERFORM

This permit and obligation of Permittee to pay fees and/or

additional fees hereunder and to keep and perform all other

J.A. 268

covenants and agreements hereunder on part of Permittee to

be kept or performed shall in no way be affected, impaired, or

excused because Permittor is unable to fulfill any of its obli-

gations under this permit, or is unable to supply, or because

Permittor is delayed in supplying any service expressly or

impliedly to be supplied by Permittor, or is unable to perform,

or because Permittor is delayed in performing, any work or

service for which it is liable hereunder, if Permittor is pre-

vented or delayed from so doing by reason of labor troubles

or any outside cause beyond control of Permittor, including,

but not limited to, governmental action or preemption, act of

God, war or civil commotion or unrest.

36. SUBORDINATION

This permit is subject and subordinate to any and all ground

or underlying leases and to any and all mortgages which may

now or hereafter affect such leases or the real property of

which the facility forms a part, and to all renewals, modifi-

cations, consolidations, replacements and extensions thereof.

This clause shall be self-operative and no further instrument

of subordination shall be required by any mortgagee; how-

ever, in confirmation of such subordination, Permittee shall

execute promptly any certificate to that effect upon request by

Permittor. Permittee hereby constitutes and appoints Permittor

as Permittee’s attorney-in-fact to execute any such certificate

or certificates for and on behalf of Permittee.

37. SUCCESSORS AND ASSIGNS

The covenants and agreements herein contained shall inure

to the benefit of and be binding upon the successors, heirs,

executors, administrators, and assigns of the parties hereto

respectively, provided, however, that this permit shall not be

assigned by Permittee without the prior written consent of

Permittor.

J.A. 269

38. NOTICES

Except as otherwise in this permit provided, a bill, state-

ment, notice or communication which Permittor may desire,

or be required to give to Permittee, shall be sufficiently given

or rendered if in writing, delivered to Permittee personally or

sent by registered or certified mail addressed to Permittee at

275 Madison Avenue, New York, New York 10016 or at any

such address as Permittee shall designate by written notice,

and the time of the rendition of such bill or statement and of

the giving of such notice or communication shall be deemed

to be the time when the same is delivered to Permittee, or

mailed, as herein provided. Any notice by Permittee to

Permittor must be sent by registered or certified mail

addressed to National Railroad Passenger Corporation, Real

Estate Department at 400 North Capitol Street, N.W.,

Washington, D. C. 20001 or at any such other address as

Permittor may designate by written notice.

39. INTEGRATION

No change or modification of any of the covenants, terms

or provisions hereof shall be valid unless in writing and

signed by the parties hereto.

There are no understandings or agreements of any kind

between the parties hereto, verbal or otherwise, other than as

set forth in this permit.

This permit, including exhibits, if any, constitutes the entire

agreement between Permittor and the Permittee on the subject

matter hereof.

40. NOT A JOINT VENTURE

This permit shall not be deemed or construed as appointing

the Permittee, the agent or representative of Permittor for any

purpose whatsoever. Neither a partnership nor any joint ven-

ture is hereby created, notwithstanding the fact that all or a

J.A. 270

portion of the fees to be paid hereunder may be determined by

gross receipts from the operations of the Permittee hereunder.

41. NO WAIVER

The failure of Permittor to seek redress for violation of, or

to insist upon the strict performance of, any covenant or con-

dition of this permit, or any of the Rules and Regulations

hereinafter adopted by Permittor shall not prevent a subse-

quent act, which would have originally constituted a viola-

tion, from having all the force and effect of an original

violation. The receipt by Permittor of fees with knowledge of

the breach of any covenant of this permit shall not be deemed

a waiver of such breach.

42. RULES AND REGULATIONS

The Permittee shall observe and obey (and compel its offi-

cers, employees, guests, invitees, and those doing business

with it to observe and obey) the rules and regulations of

Permittor now in effect, if any, and such further rules and reg-

ulations which may from time to time during the effective

period of this permit, be promulgated by Permittor.

43. SEVERABILITY

The provisions of this permit are severable and it is the

intention of the parties hereto that if this permit cannot take

effect in its entirety because of the final judgment of any

court of competent jurisdiction holding invalid any part or

parts thereof, the remaining provisions of the lease shall be

given full force and effect as completely as if the part or parts

held invalid had not been included therein.

J.A. 271

44. PARAGRAPH CAPTIONS

Paragraph captions used herein are placed for reading con-

venience and shall not have any other meaning, implication or

purpose, legal or otherwise.

45. EXTENT REQUIRED BY LAW

To the extent required by law, this permit shall be subject

to the approval, if necessary, of any State Commerce

Commission, Board of Public Utility Commissioners, Public

Service Commission or any such State body as may have

jurisdiction.

46. NOT STRICTLY CONSTRUED

This permit shall not be strictly construed against the

Permittor or Permittee. No remedy or election given by any

provision of this permit shall be deemed exclusive unless so

indicated, but each shall, wherever possible, be cumulative

with all other remedies in law or equity unless otherwise

specifically provided. Each provision hereof shall be deemed

both a covenant and a condition and shall run with the land.

47. WORDS OF OBLIGATION

Whenever in this permit agreement any words of obligation

or duty are used, such words or expressions shall have the

same force and effect as though made in the form of

covenants.

48. FORCE MAJEURE

This obligation of the Permittor hereunder shall be subject

to Force Majeure which shall include but not be limited to

labor troubles.

J.A. 272

49. LAW GOVERNING

This agreement shall be governed by the laws of the

District of Columbia.

50. TIME OF THE ESSENCE

Time and specific performance are each of the essence in

this permit.

51. ENVIRONMENTAL

Permittee shall comply with all environmental regulations

issued by Federal, State or Local Environmental Agencies,

hereinafter called “Agencies”, and shall maintain the facility

according to environmental standards set by such agencies,

including, bui not limited to, water, air and noise standards.

In the event Permittee fails to maintain the facility according

to standards set by an agency and if, after giving reasonable

notice of the failure to Permittee, Permittor acts to bring the

facility into compliance, Permittee shall repay Permittor for

all costs incurred by Permittor in abating a violation of such

standards, and paying any fine or assessment levied as a result

of violation of such standards, including, but not limited to,

consulting, engineering, construction and legal costs. Per-

mittee shall further indemnify, defend and save harmless

Permittor from any claim of a violation of environmental

Standards resulting from Permittor’s use of the facility,

whether brought by an agency, a private citizen, or in a court

procedure; and Permittee shall, at its cost, respond to all such

claims for its benefit and for the benefit of Permittor.

52. REFUND

In the event of termination of this permit by Permittor for

any cause other than default or failure to comply with the

J.A. 273

terms of this permit by Permittee and if fees shall have been

paid by Permittee in advance to a day subsequent to the date

of such termination of this permit, then Permittor shall refund

and repay to Permittee and Permittee shall receive and accept

as full payment for all loss, damages, and demands occa-

sioned by such termination of this permit, the apportioned

amount of the term so avoided, except that no refund will be

made of any amount less than Fifty Dollars ($50.00).

Permittee shall remain liable for the payment of real estate

taxes and other charges assessed or imposed upon Permittee’s

buildings or improvements or in connection therewith which

may have accrued to date of such termination, and other taxes

and assessments which Permittee is obligated to pay as addi-

tional fees hereunder shall be prorated to the date of termi-

nation.

Permittor shall not be obligated to reimburse Permittee for

any expenditure by Permittee for construction of improve-

ments, or for alterations, on or to the facility and Permittee

hereby expressly waives any claim against Permittor for such

reimbursement.

53. EXECUTION OF AGREEMENT BY LESSOR

It is understood and agreed between the parties hereto that

execution of this Agreement by Permittee, and negotiation of

any check or other negotiable instrument by Permittor, prior

to the date of execution of this agreement by Permittor, shall

in no way be deemed or construed by Permittee to be accep-

tance of this agreement by Permittor. In the event that this

agreement is not executed by Permittor for any reason what-

soever, then and in that event the amount set forth in any such

check or other negotiable instrument shall be refunded to

Permittee within a reasonable period of time after written

notification that this agreement will not be executed by

Permittor; provided, however, that the payment by Permittee

of a preparation fee, if any, to Permittor shall be nonrefund-

able and made as fu!l payment for the Permittor’s preparation

J.A. 274

of this document without regard to whether or not same is

ever executed.

IN WITNESS WHEREOF, the parties hereto have caused

these presents to be executed by their proper officers, thereto

duly authorized, day and year first above written.

WITNESS: NATIONAL RAILROAD PASSENGER

B MaciEe CORPORATION

By: KURT WEISSHEIMER |

Kurt Weissheimer

TITLE: Assistant Vice President—

Real Estate

WITNESS: TRANSPORTATION DISPLAYS, INC.

__ BERTON MILLER By: JULIAN G. PIZZANO

TITLE: Executive Vice President/

General Manager

J.A. 275

EXHIBIT ‘A’

EQUAL OPPORTUNITY

During the performance of this Agreement, the Lessee agrees

as follows:

(a) The Lessee will not discriminate against any employee

or applicant for employment because of race, color, religion,

sex, age, or national origin. The Lessee will take affirmative

action to ensure that applicants are employed, and that employ-

ees are treated during employment, without regard to their

race, color, religion, sex, age, or national origin. Such action

shall include, but not be limited to, the following; employ-

ment, upgrading, demotion, or transfer; recruitment or recruit-

ment adverting; layoff or termination; rates of pay or other

forms of compensation; and selection .for training, including

apprenticeship. The Lessee agrees to post in conspicuous

places, available to employees and applicants for employ-

ment, notices setting forth the provision of this Equal

Opportunity clause.

(b) The Lessee will, in all solicitations or advertisements

for employees placed by or on behalf of the Lessee, state that

all qualified applicants will receive consideration for employ-

ment without regard to race, color, religion, sex, age, OF

national origin.

tative of workers with which lessee has a collective bargain-

ing agreement or other contract or understanding, a notice

advising the labor union or workers representative of the

Lessee’s commitments under this Equal Opportunity clause,

and shall post copies of the notice in conspicuous places

available to employees and applicants for employment.

(d) The Lessee will comply with all provisions of Executive

Order No. 11246 of September 24, 1965, as amended by

Executive Order No. 11375 of October 13, 1967, and of the

J.A. 276

rules, regulations and relevant orders for the Secretary of

Labor.

(e) The Lessee will furnish all information and reports

required by Executive Order No. 11246 of September 24,

1965 as amended by Executive Order No. 11375 of October

13, 1967, and by the rules, regulations and orders of the

Secretary of Labor, and pursuant thereto and will permit

access to his books, records, and accounts by the contracting

agency and the Secretary of Labor for purposes of investi-

gation to ascertain compliance with such rules, regulations

and orders.

(f) In the event of the Lessee’s noncompliance with the

Equal Opportunity clause of this Agreement or with any of

the said rules, regulations, or orders, this Agreement may be

canceled, terminated, or suspended, in whole or in part, and

the Lessee may be declared ineligible for further contracts in

accordance with procedures authorized in Executive Order

No. 11246 of September 24, 1965 as amended by Executive

Order No. 11375 of October 13, 1967, or by rule, regulation,

or order of the Secretary of Labor, or as otherwise provided

by law.

(g) The Lessee will include the provisions of paragraphs

(a) through (g) in every subcontract or purchase order unless

exempted by rules, regulations, or orders of the Secretary of

Labor issued pursuant to section 204 of Executive Order No.

11246 of September 24, 1965, as amended by Executive Order

No. 11375 of October 13, 1967, so that such provisions will

be binding upon each subcontractor or vendor. The Lessee

will take such action with respect to any subcontract or pur-

chase order as the contracting agency may direct as a means

of enforcing such provisions, including sanctions for non-

compliance: provided, however, that in the event the Lessee

becomes involved in, or is threatened with, litigation with a

subcontractor or vendor as a result of such direction by the

contracting agency, the Lessee may request the United States

to enter into such litigation with a subcontractor or vendor as

J.A. 277

a result of such direction by the contracting agency, the

Lessee may request the United States to enter into such liti-

gation to protect the interests of the United States.

J.A. 278

EXHIBIT ‘B’

AFFIRMATIVE ACTION

(a) The Lessee agrees to use its best efforts to achieve

minority employment within its total work force, including its

associates and subcontractors. For purposes.of this clause, (a)

“minority employment” means employment of minority group

members as hereinafter defined.

(b) The Lessee agrees to use its best efforts to carry out

this policy in the award of its subcontracts, if any, to the

fullest extent consistent with the efficient performance of this

Agreement. As used herein, the term “minority business

enterprise” means a business organization having at least fifty

(50%) percent of its equity (exclusive of any equity interest

held by any governmental agency) owned by minority group

persons, or where less than fifty (50%) percent, the organi-

zation is controlled by such persons or such other organiza-

tions as the Amtrak determines to be a bona-fide minority

business organization.

which are as follows:

(1) As a condition to receiving Federal financial assistance

under the Railroad Revitalization and Regulatory Reform Act

of 1976 (“Act”), or the provisions of the Regional Rail

Reorganization Act of 1973, as amended (45 U.S.C. 701 et.

seq.) or the Rail Passenger Service Act of 1970 as amended

(45 U.S.C. 501 et. seq.) amended by the Act, (collectively

called, together with the Act, the “Rails Acts”), the Lessee

hereby agrees to observe and comply with the following:

(i) No person in the United States shall on the grounds

of race, color, national origin, age, or sex be excluded from

participation in, or denied the benefits of, or be subjected to

discrimination under, any project, program, or activity funded

in whole or in part through such assistance.

J.A. 279

(2) The following specific discriminatory actions are pro-

hibited:

(i) A Lessee under any project, program or activity to

which these clauses apply shall not, directly or through con-

tractual or other arrangements, on the grounds of race, color,

national origin, age, OF sex:

(A) Deny a person any service, financial aid, or other

benefit provided under such project, program or activity;

(B) Provide any service, financial aid, or other bene-

fit to a person which is different, or is provided in a different

manner, from that provided to others under such project, pro-

gram or activity;

ment in any matter related to his receipt of any service, finan-

cial aid or other benefit under such project, program and

activity;

(D) Restrict a person in any way in the enjoyment of

any advantage or privilege enjoyed by others receiving any

service, financial aid or other benefit under such project, pro-

gram or activity;

(E) Deny a person an opportunity to participate in

such project, program or activity through the provision of ser-

vices or otherwise or afford him/her an opportunity to do so

which is different from that afforded others under such pro-

ject, program or activity.

(ii) A Lessee, in determining the types of services, finan-

cial aid, or other benefits, or facilities which will be provided

under any such project, program or activity or the class of

persons to whom, or the situations in which such services,

financial aid, other benefits, or facilities will be provided

under any such project, program or activity, or the class of

persons to be afforded an opportunity to participate in any

such project, program or activity shall not, directly or through

contractual or other arrangements, utilize criteria or methods

J.A. 280

of administration which have the effects of subjecting persons

to discrimination because of their race, color, national origin,

age, or sex, or have the effect of defeating or substantially

impairing accomplishment of the objectives of the project,

program or activity, with respect to individuals of a particu-

lar race, color, national origin, age, or sex.

(iii) In determining the site or location of facilities, a

Lessee shall not make selections with the purpose or effect of

excluding persons from, denying them the benefits of, or sub-

jecting them to discrimination under any project, program or

activity to which these clauses apply on the grounds of race,

color, national origin, age, or sex, or with the purpose or

effect of defeating or substantially impairing the accom-

plishment of the objectives of these clauses.

(iv) The Lessee shall not discriminate against any

employee or applicant for employment because of race, color,

national origin, age, or sex. Except as otherwise required by

the regulations or orders of Lessor, the Lessee shall take affir-

mative action to insure that applicants for employment are

employed, and that employees are treated during employment,

~ without regard to their race, color, national origin, age, Or sex.

Such action shall include, but not be limited to, the following:

employment, promotion, demotion, transfer, recruitment or

recruitment advertising, layoff or termination, rates of pay or

other forms of compensation, and selection for training,

including apprenticeship. The Lessee agrees to post in con-

spicuous places, available to employees and applicants for

employment, notices setting forth the provisions of these

nondiscrimination clauses. The Lessee understands and agrees

that it shall not be an excuse for the Lessee’s failure to pro-

vide affirmative action that the labor organizations with

which the Lessee has a collective bargaining agreement failed

or refused to admit or qualify minorities for admission to

the union, or that the provisions of such agreements other-

wise prevent Lessee from implementing its affirmative action

program.

J.A. 281

(V) The Lessee shall not discriminate against any

business organization in the award of any contract because of

race, color, national origin, age, or sex of its employees, man-

agers or owners. Except as otherwise required by the regu-

lations or orders of the Lessor, the Lessee . shall take

affirmative action to insure that business organizations are

permitted to compete and are considered for awards of con-

tracts without regard to race, color, national origin, age, OF

Sex.

(3) As used in these clauses, the services, financial

aid, or other benefits provided under a project, program, or

activity receiving financial assistance under the Rail Acts

include any service, financial aid, or other benefit provided in

or through a facility funded through financial assistance pro-

vided under the Rail Acts. — -

(4) The enumeration of specific forms of prohibited

discrimination does not limit the generality of the prohibition

in paragraph (a)(1)(i) of this section.

(5) These clauses do not prohibit the consideration of

race, color, national origin, age, or sex if the purpose and

effect are to receive or overcome the consequences of prac-

tices or impediments which have restricted the availability of,

or participation in Lessee’s operations or activities on the

grounds of race, color, national origin, age, or sex. Where

prior discriminatory or other practice or usage tends, on the

grounds of race, color, national origin, age, Or sex, to exclude

individuals or businesses from participation in, to deny them

the benefits of, or to subject them to discrimination under any

project, program or activity to which these clauses apply, the

Lessee must take affirmative action to remove or overcome

the effect of the prior discriminatory practice or usage. Fven

in the absence of prior discriminatory practice or usage to

which this part applies, the Lessee is expected to take affir-

mative action to insure that no person is excluded from par-

ticipation in or denied the benefits of the project, program or

activity on the grounds of race, color, national origin or sex,

J.A. 282

and that minorities and minority businesses are afforded a

reasonable opportunity to participate in employment and pro-

curement opportunities that will result from financial assis-

tance provided under the Rail Acts.

(6) The Lessee agrees to take such actions as are nec-

essary to monitor its activities and those of its contractors

who will be paid in whole or in part with funds provided by

the Rail Acts, or from obligations guaranteed by Lessor pur-

suant to the Rail Acts, except obligations guaranteed under

section 602 of the Rail Passenger Service Act, in order to

carry out affirmatively the purposes of paragraph (1) above,

and to implement the affirmative action program developed

and implemented pursuant to 49 CFR 265.

(7) The Lessee shall, in all advertisements for employ-

ees, or solicitations for services or materials from business

Organizations placed by or on behalf of the Lessee, in con-

nection with any project, program or activities funded in

whole or in part with financial assistance under the Rail Acts,

State that all applicants for employment will receive consid-

eration for employment, and all business organizations will

receive consideration for an award of a contract, without

regard to race, color, national origin, age, or sex.

(8) The Lessee shall send to each labor organization or

representative of workers with which it has a collective bar-

gaining agreement or other contract or understanding a notice

to be provided by the agency’s representative, advising the

labor organization or workers’ representative of the Lessee’s

commitments under section 905 of the Act, and shall post

copies of the notice in conspicuous places available to

employees and applicants for employment.

(9) The Lessee shall comply with all provisions of sec-

tion 905 of the Act, the Civil Rights Act of 1964, any other

Federai Civil Rights Act, and with the rules, regulations, and

orders issued under such acts.

J.A. 283

(10) The Lessee shall furnish all information and

reports required by the rules, regulations, and orders of the

Lessor, and will permit access to its books, records, and

accounts by Lessor or any Federal agency, including the gen-

eral accounting office which has the right to audit Lessor’s

accounts for purposes of investigation to ascertain compliance

with rules, regulations, and orders referred to in paragraph (9)

hereof.

(11) Lessee shall furnish such relevant procurement

information, not included in its affirmative action program, as

may be requested by the Minority Business Resource Center.

Upon the request of the Lessee, the Center shall keep such

information confidential to the extent necessary to protect

commercial or financial information or trade secrets to the

extent permitted by law.

(12) In the event of the Lessee’s noncompliance with

the nondiscrimination clauses of this Agreement, or with the

provisions of section 905 of the Act, the Civil Rights Act of

1964, or with any other Federal Civil Rights Act or with any

rules, regulations, or orders issued under such acts, this

Agreement will, after notice of such noncompliance, be can-

celed, terminated, or suspended in whole or in part and the

Lessee may be declared ineligible for further Federal finan-

cial assistance in accordance with procedures authorized in

section 905 of the Act, or as otherwise provided by law.

(13) The Lessee shall not enter into any contract or

contract modification whether for the furnishing of supplies

or services or for the use of real or personal property, includ-

ing lease arrangements or for construction in connection with

a project, program or activity which receives financial assis-

tance under the Rails Act with a Contractor debarred from or

who has not demonstrated eligibility for Federal or federally

assisted contracts, and will carry out such sanctions and

penalties for violation of this part as may be imposed upon

contractors and subcontractors by any authorized Federal offi-

cial. The Lessee shall insure that the clauses required by

J.A. 284

41 CFR 60 1.46 implementing Executive Order No. 11246

will be placed in each non-exempt federally assisted con-

struction contract.

(4) The Lessee agrees to comply with and implement

the written affirmative action program as approved by Lessor

pursuant to section 265.17 of Title 49 CFR.

(15) The Lessee agrees to notify Lessor promptly of

any suit or complaint filed against the Lessee alleging dis-

crimination on the basis of race, color, national origin, age, Or

sex. the Lessee shall include the preceding provisions of para-

graphs (a) through (d) in every contract or purchase order,

whether for the furnishing of supplies or services or for the

use of real or personal property, including lease arrangements,

or for construction relating to projects, programs or activities

financed in whole or in part under the Rail Acts. The Lessee

shall cause each such contractor or vendor to include the pro-

visions of paragraphs (a) through (d) in every subcontract.

The Lessee will take such action with respect to any such

contract or purchase order as Lessor may direct as a means of

enforcing such provisions including sanctions of noncom-

pliance; provided, however, that in the event the Lessee

becomes involved in, or is threatened with, litigation with a

contractor or vendor as a result of such direction by Lessor,

the Lessee may request the United States to enter into such

litigation.

J.A. 285

PLAINTIFF’S EXHIBIT 6

[LETTERHEAD OF AMTRAK]

December 23, 1992

Tina Kowalsky Haut, Esq.

Sr. Vice President/General Counsel

Transportation Displays Incorporated

275 Madison Avenue

New York, NY 10016

Dear Ms. Haut:

Pursuant to Section 6 of the License Agreement between

the National Railroad Passenger Corporation (“Amtrak”) and

Transportation Displays Incorporated (“TDI”) dated March

15, 1991, Amtrak hereby notifies TDI that it cannot accept the

advertising proposed for the Penn Station, New York spec-

tacular advertising sign beginning January 1, 1993. Amtrak's

policy is that it will not allow political advertising on the

spectacular advertising sign.

Sincerely,

/s/ TONY DEANGELO

Tony DeAngelo

Vice President-Real Estate and

Operations Development

J.A. 286

PLAINTIFF’S EXHIBIT 7

NATIONAL RAILROAD

PASSENGER CORPORATION

1991 ANNUAL REPORT

J.A. 287

FIVE-YEAR COMPARISON OF PERFORMANCE

1991 1990 1989 1988 1987

Revenues ;

(millions) $1,359.0 $1,.308.4 $1,269.11 $1,106.7 $973.5

Expenses ' d

(millions) $2,080.5 $2,011.18 $1.934.5 $1,.757.1 $1,672.0

Revenue-to- ;

Expense Ratio .719% 72 72 69 65

Revenue-to-Shot-Term

Avoidable Cost

Ratio** 1.23 1.20 1.20 1.15 1.03

Revenue-to-Long-Term

Avoidable Cost

Ratio*** 6 93 91 90 79

Passenger Miles -

(millions)**** 6,273 6,057 5,859 5,678 §,221

Passenger Miles per

Train-Mile**** 184.5 183.3 188.4 188.3 176.8

System On-Time 2

Performance 77% 76% 75% 71% “738%

Ridership (millions) :

Amtrak System 22.0 22.2 21.4 21.5 aA

Contract Commuter 18.1 18.0 17.4 15.4 : acndl

~ Total 40.1 40.2 38.8 36.9 30.6

* Beginning in fiscal year 1991, the methodology of computing this

ratio was changed to reflect the exclusion.of excess Railroad

Retirement and Unemployment Insurance Taxes which are now paid

directly to the Internal Revenue Service by the Federal Railroad

Administration on behalf of Amtrak. This change resulted in an

increase of .06. .

** Short-term avoidable costs—Costs of activities that would stop with

the discontinuance of a route or train, or begin with the introduction

of a new route or train. Such costs include train and engine crews,

fue! and power, and maintenance of way.

*** Long-term avoidable costs—All short-term avoidable costs, plus

claims expenses, heavy maintenance, and a portion of corporate and

field overhead.

**** Contract commuter passengers not included.

* * *

J.A. 288

PRESIDENT’S REPORT

* * *

What a dramatic change there has been in public percep-

tions about rail passenger service. From a dying industry,

Amtrak is now recognized to be a vital part of the nation’s

transportation solution—an energy-efficient mode capable of

reducing automobile and airport congestion and of assisting

states and regions in meeting tough new air quality standards.

Far more important than perceptions, however, is the real

growth we have seen in many segments of our business.

Despite a very weak national economy during 1991, and a

struggling travel industry, we posted modest increases in pas-

senger miles and revenues. Admittedly, growth was well

below projections, but not even the most pessimistic

economists foresaw a recession of the kind we have wit-

nessed. Yet, compared to the air industry that saw billion dol-

lar losses and continued bankruptcies, Amtrak improved our

revenue-to-cost ratio, increased our share of the Northeast

Corridor travel market, and initiated a number of new, inno-

vative services. Although we still required an operating sub-

sidy to cover some $343 million in operating losses, we

remain optimistic that we can meet our goal of eliminating the

need for operating support by the end of this decade.

> > *

During the 1950s and 1960s, I had the misfortune to watch

the slow demise of rail passenger service in this country, and

more recently have had the opportunity to witness, and per-

haps assist in, its resurrection. | am proud and deeply appre-

ciative of the Amtrak employees who made this rebirth

possible; of the passengers who have chosen time and time

again to travel by Amtrak; of the localities and states that

believed in the future of Amtrak and provided us with new

train stations and other improvements; and, of course, of

those in the Congress of the United States who had the vision

and wherewithal to create and nurture us. I am proud of our

J.A. 289

past achievements and even more optimistic about our future.

We truly are at the dawn of a new era of highly marketable

conventional and high-speed rail passenger service. Amtrak

intends to be the leader in this area and at the forefront of a

dynamic, financially healthy travel industry.

—W. Graham Clayton, Jr.

President

A STRATEGY FOR GROWTH

Amtrak’s national passenger system forges an important

link between the immense rural stretches of the nation and its

urban centers. With over 500 stations and a 25,000 mile route

system, Amtrak provides travelers—business executives,

vacationers, families, students—with an important, enjoyable

transportation alternative. During FY 1991, the number of

miles traveled by Amtrak passengers grew 3.6 percent to 6.3

billion, up more than 110 percent since Amtrak commenced

operations in 1971. Ridership remained steady at 40 million

passengers, including 22 million intercity passengers (down

a fraction of a percentage point from last year) and 18 million

commuter passengers transported by Amtrak under contract

with state or regional commuter authorities. The result of this

growth in passenger miles has been an increase of revenues to

$1.36 billion, up some 3.9 percent over last year. Revenues

covered 79 percent of Amtrak’s costs, the highest in the cor-

poration’s history. Given the weak national economy, this is

an enviable achievement for a passenger transportation

company.

J.A. 290

NEW SERVICE AND FACILITIES

As the nation’s sole provider of intercity rail passenger ser-

vice, it is Amtrak’s goal to add service wherever it can eco-

nomically be justified. While the cost of equipment, capital

improvements to the rail line, and potential operating losses,

particularly on new routes, makes Significant expansion of the

Amtrak system financially unlikely at this time, a growing

partnership with states willing to help fund new trains has

enabled Amtrak to grow modestly each year. Already, over 40

daily trains are funded in part by states, and plans for addi-

tional service are proliferating. In California, a new multi-fre-

quency rail service between Sacramento and San Jose will

begin in December 1991. Two more Chicago-Milwaukee

trains were added this past October and a second train in

North Carolina is planned for next year. Several additional

State-supported trains are under consideration.

One of the most important changes during the past year was

completion of the Empire Connection in New York City, the

first direct rail route between the Northeast Corridor and

points north and west of New York City. In April, Amtrak

trains to Albany and points beyond began operating directly

out of New York Penn Station, eliminating Amtrak’s Grand

Central Terminal operations and the time-consuming cross-

town transfers for passengers traveling to or from the

Northeast Corridor. The consolidation of train operations in

Penn Station represents a significant improvement for

Amtrak’s passengers. At the same time, it will reduce the

operating costs associated with two New York City stations

and boost revenues through improved ridership.

* * .

These and other station improvements reflect Amtrak’s

belief that train stations represent the front door of our busi-

ness. They play a critical role in customer satisfaction and in

the image Amtrak strive to project. As a result, Amtrak con-

tinues to work closely with states and communities to obtain

J.A. 291

local funding for passenger station improvements. Over a

dozen stations—including Lincoln, Neb., Carlinville, Ill.,

Montgomery, Ala., and Red Wing, Minn.—were renovated

during the past year, funded primarily by states and local

communities that want the traveler’s first glimpse of their

towns to be a positive one.

» » ™

Of enormous long-term importance was the decision by

Congress to fund continued improvements on the Northeast

Corridor between New York and Boston to reduce travel time

between the two cities to three hours or less. Completion of

this project, scheduled for 1997, will mean 24 daily New

York-Boston round-trip frequencies and some three million

additional passengers each year. The service, which will oper-

ate with all new high-speed train equipment, is expected to

generate important incremental profits that will improve

Amtrak’s bottom line.

Three hour service will further position the railroad to be

the transportation mode of choice for travelers along the

entire Washington-Boston Northeast Corridor.

DIVERSIFYING THE REVENUE STREAM

One important reason for Amtrak’s growth during such a

difficult time is its success in other revenue generating areas.

Passenger revenues grew during 1991 at the rate of 3.6 per-

cent and are approaching $1 billion for the first time in

Amtrak’s history. Of great importance, however, was growth

of 4.6 percent in non-passenger revenues. Two key areas are

generating significant revenues for Amtrak and represent

superb growth opportunities for the future. The transportation

of mail for the U.S. Postal Service grew dramatically, helped

in part by national transportation priorities during the recent

Desert Storm operation. Revenues grew to $43.6 million, an

increase of 26 percent. With the acquisition of additional mail

handling cars, Amtrak expects this area to generate close to

J.A. 292

$100 million by the end of the decade. Moreover, potential

mail revenues can provide the additional operating revenues

necessary to initiate new rail passenger service. The reroute

of the Pioneer through Wyoming was made possible by the

potential for new mail business.

The operation of commuter services under contract for

local, state or regional authorities is another high-growth

opportunity tor Amtrak. This area also has great symbolic sig-

nificance, for each new commuter contract cements Amtrak’s

position as the rail passenger operator of choice. Amtrak’s

ability to successfully compete for the operation of new com-

muter and high-speed rail systems represents an important key

to its future.

Amtrak carried some 18 miliion rail commuters under con-

tract for the Boston area MBTA, Maryland MARC system,

Connecticut DOT and Orange County, Calif., Transportation

Commission. During the coming year, Amtrak will begin

operation of the new Virginia Railway Express service

between northern Virginia and Washington, and will compete

for the contract to operate the San Jose-San Francisco

Peninsula Commute Service in California.

One of Amtrak’s most exciting achievements was the recent

decision by Southern California Regional Rail Authority to

award Amtrak a contract to operate an ambitious commuter

network in the Los peaatad area. The commuter service is

expected to grow significantly over the next decade as addi-

tional Los Angeles area commuter lines begin operation:

As the decade develops, Amtrak expects that revenues from

real estate development, contract commuter operations, mail

and express, and other revenue enhancement areas will con-

tinue to grow significantly. These activities will provide

Amtrak with a cushion again yearly fluctuations in the

national economy and travel market.

* * *

J.A. 293

CONSOLIDATED STATEMENTS OF CHANGES

IN CAPITALIZATION

National Railroad Passenger Corporation and Subsidiaries (Amtrak)

Preferred Common Other paid- Accumulated

Stock stock —_—in capital deficit Totals

Balance at

September

30, 1989 $6,056,003 $93,857 $3,711,425 $(6,494,396) $3,366,889

Issuance of

preferred stock $60,411 _ — — 560,411

Federal paid-in-

capital _— — 23,162 — 23,612

Federal and state

capital payments — -- 15,250 _ 15,150

Net Loss — -- —s (703,415) 703,415

Balance at

September

30, 1990 6.016.414 93,857 3,750,187 (7,J97,811) 3,262,647

Issuance of

preferred stock §29,.375 — _ = $29,375

Federal paid-in

capital _- — 180,689 = 180,689

Federal and state

capital payments — _ 22,445 — 22,445

Net loss — = = (721,588) (721,588)

Balance at

September

30, 1991 £72,145,789 $93,857 $3,953,321 ($7,919,399) $3,273,568

J.A. 294

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

National Railroad Corporation and Subsidiaries (Amtrak)

For the Years Ended September 30, 1991 and 1990

Summary of Significant Accounting Policies

Note 1.

PRINCIPLES OF CONSOLIDATION

The financial statements reflect the consolidated operations

of the National Railroad Passenger Corporation and its

wholly-owned subsidiaries, Chicago Union Station Company

(CUS) and Washington Terminal Company. All significant

intercompany transactions have been eliminated. Certain

reclassifications have been made to the prior year’s state-

ments to conform with the 1991 presentation.

PASSENGER RELATED REVENUE

Passenger fares are recognized as operating revenues when

the related transportation services are furnished. Tickets

which have been sold but not used are presented as “Deferred

ticket revenue” in the Consolidated Balance Sheets.

CONTRACTED SERVICES

The Consolidated Statements of Operations include the

gross revenues earned and expenses incurred under arrange-

ments to operate various commuter rail services, to provide

access to the Northeast Corridor and other Amtrak-owned

facilities, and to perform services for freight railroads.

~ CASH EQUIVALENTS AND SHORT-TERM CASH

INVESTMENTS

Amtrak considers all financial instruments purchased hav-

ing a maturity of three months or less to be cash equivalents.

J.A. 295

Those financial instruments purchased with a maturity of over

three months, and which mature not more than one year from

the Consolidated Balance Sheet date, are classified as short-

term cash investments. Approximately $6,400,000 of the cash

and cash equivalents balance at September 30, 1991 is

restricted for repair or acquisition of capital equipment.

PROPERTY AND DEPRECIATION

Property and equipment are stated at cost, and are depre-

ciated using the composite straight-line method over their

estimated useful lives. Certain major items of property

acquired through capital lease agreements are recorded as

assets and are amortized over the shorter of their estimated

useful lives or the lease term.

CASUALTY LOSSES

Provision is made for Amtrak’s portion of the estimated lia-

bility for unsettled casualty and accident claims. The current

portion of this liability is included in the Consolidated

Balance Sheets under “Accrued expenses and other current

liabilities.” The non-c

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