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THE YORK NEWSPAPER COMPANY
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PARTNERSHIP AGREEMENT
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DATED AS OF JANUARY 13, 1989
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PAGE
1. THE PARTNERSHIP
1.1 Partners.................................................................1
1.2 Name and Principal Office................................................1
1.3 Purpose of Partnership...................................................1
1.4 Commencement; Term.......................................................1
1.5 Definitions - General....................................................2
2. PARTNERSHIP INTERESTS, CONTRIBUTIONS AND DISTRIBUTIONS
2.1 Partnership Interests....................................................9
2.2 Capital Contributions and Maintenance of Capital Accounts................9
2.3 Distributions of Net Cash From Operations and Allocations of
Net Income or Net Loss..................................................10
2.4 Special Allocations.....................................................10
2.5 Other Allocation Rules..................................................11
2.6 Binding Effect of Allocations...........................................12
2.7 Expenses Incurred Prior to the Formation of the Partnership.............12
2.8 Distributions to Partners; Funding of Losses............................12
3. MANAGEMENT OF THE PARTNERSHIP
3.1 Controlling Partner.....................................................12
3.2 Partner Representatives.................................................13
3.3 The Third Party.........................................................13
3.4 Meetings and Action of the Partner Representatives......................13
3.5 Actions by Partners.....................................................14
3.6 President and Other Management Personnel................................15
3.7 Indemnification.........................................................16
4. TRANSFER OF PARTNERSHIP INTERESTS
4.1 Prohibited Transfers....................................................18
4.2 Conditions to Transfer..................................................19
5. DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
5.1 Term....................................................................19
5.2 Termination of this Agreement; Dissolution of the Partnership...........20
5.3 Termination at End of Term..............................................22
6. MISCELLANEOUS
6.1 Notices.................................................................23
6.2 Non-Assignability.......................................................23
6.3 Entire Understanding....................................................23
PAGE
6.4 Headings................................................................23
6.5 Governing Law...........................................................23
6.6 Modification............................................................24
6.7 Severability............................................................24
6.8 Specific Performance....................................................24
6.9 No Third-Party Beneficiaries............................................24
6.10 No Waiver...............................................................24
6.11 Variation of Pronouns...................................................25
6.12 Survival................................................................25
6.13 Priority of Interpretation..............................................25
PARTNERSHIP AGREEMENT
This PARTNERSHIP AGREEMENT (the "Agreement"), dated as of January 13, 1989,
is entered into by and between York Newspapers, Inc., a Delaware corporation
("YNI") and a wholly-owned subsidiary of Garden State Newspapers, Inc., a
Delaware corporation ("Garden") and York Daily Record, Inc., a Delaware
corporation (the "Record") and an eighty percent subsidiary of Carlsbad
Publishing Co., a Washington corporation ("Carlsbad").
1. THE PARTNERSHIP.
1.1 PARTNERS. The Record and YNI (individually, a "Partner" and
collectively, the "Partners") hereby form a general partnership under the laws
of the Commonwealth of Pennsylvania (the "Partnership") for the purposes and on
the terms set forth herein.
1.2 NAME AND PRINCIPAL OFFICE. The name of the Partnership shall be "THE
YORK NEWSPAPER COMPANY" or such other name as shall be mutually agreeable to the
Partners. The Partnership shall do business under the name "THE YORK NEWSPAPER
COMPANY" and its principal office shall be located in York, Pennsylvania, or
such other place as the Partners shall designate from time to time.
1.3 PURPOSE OF PARTNERSHIP. The purpose of the Partnership shall be (i) to
be the agency (as that term is defined in the Joint Operating Agreement, dated
the date hereof, among the Record, YNI and the Partnership (the "JOA")) and to
conduct all the activities, have all of the rights and powers, and perform all
of the duties and obligations, of the Agency set forth in the JOA and (ii) to do
any act and thing and to enter into any contract incidental to, or necessary,
proper or advisable for, the accomplishment of such purposes, to the extent
permitted by law.
1.4 COMMENCEMENT; TERM. The Partnership shall commence on the date hereof
and continue for a term ending at the close business on the last day of the one
hundredth full fiscal year of the Partnership following the Effective Date (as
that term is defined in the JOA), unless earlier dissolved pursuant to Section
5.2 hereof, or unless continued in accordance with the following. This Agreement
shall automatically renew for succeeding renewal periods of twenty-five years
each, unless either of the Partners notifies the other at least five years
before the end of the initial period, or at least five years before the end of
the then current renewal period, of the election of the party giving such notice
to terminate this Agreement. If such notice is given, then this Agreement shall
terminate at the end of the initial period or the then current renewal period
during which such notice is given.
1.5 DEFINITIONS - GENERAL. Capitalized words and phrases used in this
Agreement have the following meanings:
(a) "Act" means the Pennsylvania Uniform Partnership Act, as set
forth in 59 Pa. Stat. Xxx. Section 301 ET SEQ., as amended from time to time (or
any corresponding provisions of succeeding law).
(b) "Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any Person owning or controlling ten percent or more of the
outstanding voting securities of such Person, (iii) any officer, director or
general partner of such Person, or (iv) any Person who is an officer, director,
general partner, trustee or holder of ten percent or more of the voting
securities of any Person described in clauses (i) through (iii) of this
sentence.
(c) "Agreement" or "Partnership Agreement" means this Partnership
Agreement, as amended from time to time. Words such as "herein," "hereinafter,"
"hereof," "hereto," and "hereunder" refer to this Agreement as a whole, unless
the context otherwise requires.
(d) "Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following provisions:
(1) To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive
share of Net Income and any items in the nature of income or gain
which are specially allocated pursuant to Section 2.4 hereof, and the
amount of any Partnership liabilities assumed by such Partner or which
are secured by any Partnership Property distributed to such Partner.
(2) To each Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership Property
distributed to such Partner pursuant to any provision of this
Agreement, such Partner's distributive share of Net Loss and any items
in the nature of expenses or losses which are specially allocated
pursuant to Section 2.4 hereof, and the amount of any liabilities of
such Partner assumed by the Partnership or which are secured by any
property contributed by such Partner to the Partnership.
(3) In the event any interest in the Partnership is transferred
in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferror to the extent that
it relates to the transferred interest.
(4) In determining the amount of any liability for purposes of
Sections 1.5(d)(1) and 1.5(d)(2) hereof, there shall be taken into
account Code Section 752(c) and any other applicable provisions of the
Code and Treasury Regulations.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in
a manner consistent with such Treasury Regulations. In the event the President
shall determine that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto (including, without limitation,
debits or credits relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership or Partners), are
computed in order to comply with such Treasury Regulations, the President may
make such modification, subject to Section 5.1(h)(ii) of the JOA, provided that
the modification is not likely to have a material effect on the amounts
distributable to any Partner pursuant to Section 5 hereof upon the dissolution
of the Partnership. Subject to Section 5.1(h)(ii) of the JOA, the President also
shall make any appropriate modifications required if unanticipated events occur
that might otherwise cause this Agreement not to comply with Treasury
Regulations Section 1.704-1(b) .
(e) "Capital Contribution" means the amount of money and the initial
Gross Asset Value of any property (other than money) contributed to the
Partnership with respect to the interests in the Partnership of each Partner in
accordance with Sections 1.4, 1.5, and 1.7 of the JOA.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time (or any corresponding provisions of succeeding law).
(g) "Depreciation" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis.
(h) "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(1) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of
such asset, as determined pursuant to the JOA;
(2) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as
determined pursuant to Section 1.6 of the JOA, as of the following
times: (i) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a
DE MINIMIS Capital Contribution; (ii) the distribution by the
Partnership to a Partner of more than a DE MINIMIS amount of
Partnership Property as consideration for an interest in the
Partnership if the President reasonably determines that such
adjustment is necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership, subject to
Section 5.1(h)(ii) of the JOA; and (iii) the liquidation of the
Partnership within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(G);
(3) The Gross Asset Value of any Partnership asset distributed
to any Partner shall be the gross fair market value of such asset on
the date of distribution; and
(4) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(M) and Section 2.4(d) hereof;
provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 1.5(h)(4) to the extent the President
determines that an adjustment pursuant to Section 1.5(h)(2) hereof is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this Section 1.5(h)(4),
subject to Section 5.1(h)(ii) of the JOA.
(5) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to Sections 1.5(h)(1), 1.5(h)(2) or 1.5(h)(4)
hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for
purposes of computing Net Income or Net Loss.
(i) "JOA" means that certain Joint Operating Agreement entered into
by and among The York Daily Record, Inc., York Newspapers, Inc., and The York
Newspaper Company on the date hereof combining the business functions, but not
news and editorial functions, of the Partners.
(j) "Net Cash From Operations" means the gross cash proceeds from
Partnership operations less the portion thereof used to pay or establish
reserves for all Partnership expenses, debt payments, capital improvements,
replacements, and contingencies, all as determined by the President. "Net Cash
From Operations" shall not be reduced by depreciation, amortization, cost
recovery deductions or similar allowances.
(k) "Net Income" and "Net Loss" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(1) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net
Income or Net Loss pursuant to this Section 1.5(k) shall be added to
such taxable income or loss;
(2) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(I), and not otherwise taken into account in
computing Net Income or Net Loss pursuant to this Section 1.5(k) shall
be subtracted from such taxable income or loss;
(3) In the event the Gross Asset value of any Partnership asset
is adjusted pursuant to Sections 1.5(h)(2) or 1.5(h)(3) hereof, the
amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Net
Income or Net Loss.
(4) Gain or loss resulting from any disposition of Partnership
Property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted
tax basis of such property differs from its Gross Asset Value:
(5) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such fiscal year or other period, computed in accordance with Section
1.5(g) hereof; and
(6) Notwithstanding any other provision of this Section 1.5(k),
any items which are specially allocated pursuant to Section 2.4 hereof
shall not be taken into account in computing Net Income or Net Loss.
(l) "Partners" means the Record and YNI, where no distinction is
required by the context in which the term is used herein. "Partner" means any
one of the Partners.
(m) "Partnership" means the partnership continued pursuant to this
Agreement and the partnership continuing the business of this Partnership in the
event of dissolution as herein provided.
(n) "Partnership Property" means all real and personal property
acquired by or contributed to the Partnership and any improvements thereto, and
shall include both tangible and intangible property.
(o) "Person" means any individual, partnership, corporation, trust or
other entity.
(p) "Property" means the property which will be acquired and operated
by or contributed to the Partnership in accordance with Sections 1.4 and 1.5 of
the JOA.
(q) "Treasury Regulations" means the Income Tax Regulations
promulgated under the Code, as such Treasury Regulations may be amended from
time to time (including corresponding provisions of succeeding Treasury
Regulations).
2. PARTNERSHIP INTERESTS, CONTRIBUTIONS AND DISTRIBUTIONS.
2.1 PARTNERSHIP INTERESTS. Except as otherwise expressly provided herein
or in the JOA, the respective interests of the Partners in the assets,
liabilities, profits and losses of the Partnership (the "Partnership Interest")
shall be as follows:
Record: 42.5%
YNI: 57.5%
Each Partner shall have at all times an interest as a tenant in partnership in
the assets and properties of the Partnership equal to its Partnership Interest
and neither Partner shall have any separate right, title or interest in or to
any asset or property of the Partnership.
2.2 CAPITAL CONTRIBUTIONS AND MAINTENANCE OF CAPITAL ACCOUNTS.
(a) Between the date hereof and the Effective Date, each Partner
shall contribute funds for the interim funding of the Partnership as set forth
in Section 1.7 of the JOA. On the Effective Date, each Partner shall contribute
to the Partnership the fair market value (determined in accordance with the
valuation procedures set forth in Section 1.6 of the JOA) of non-cash assets
required to be contributed by such Partner to the Partnership pursuant to
Sections 1.4 or 1.5 of the JOA, as the case may be, plus the amount of cash (if
any) required to be contributed pursuant to Section 1.6(d) of JOA. The
Partnership shall assume the current liabilities of such Partner as set forth in
Sections 1.4 or 1.5 of the JOA, as the case may be.
(b) Each Partner's Capital Account shall be maintained in accordance
with Section 1.5(d) hereof.
(c) No interest shall be paid by the Partnership on any capital
contributed to the Partnership unless the Partners otherwise agree.
2.3 DISTRIBUTIONS OF NET CASH FROM OPERATIONS AND ALLOCATIONS OF NET
INCOME OR NET LOSS.
(a) Net Cash From Operations shall be distributed to each Partner at
such times and in such amounts as is provided in Sections 4.1(c) and 4.2(b) of
the JOA.
(b) Except as provided in Section 2.4 hereof, Net Income and Net Loss
shall be allocated to the Partners in accordance with their respective
Partnership Interests.
2.4 SPECIAL ALLOCATIONS.
(a) In the event that any payments received by either or both of the
Partners from the Partnership pursuant to the General and Administrative
Services Contract dated as of January 13, 1989, and Section 6.1 of the JOA are
not deemed to be received in a transaction between the Partnership on the one
hand, and the Partners on the other, in a capacity other than as a member of the
Partnership in accordance with Code Section 707(a)(1) or Code Section 707(c), an
amount equal to the payments shall be specially allocated to the Partner
receiving such payments (as an item in the nature of income or gain).
(b) In the event that any payments received by the Partners from the
Partnership pursuant to Section 2.4(b)(iii) of the JOA, relating to the Page
Credit, are not deemed to be received in a transaction between the Partnership
on one hand, and the Partners on the other, in a capacity other than as a member
of the Partnership in accordance with Code Section 707(a)(1) or Code Section
707(c), an amount equal to the payments shall be specially allocated to the
Partner receiving such payments (as an item in the nature of income or gain).
(c) In the event that any payments paid by the Partners to the
Partnership pursuant to Section 2.4(c) of the JOA, relating to the Total Excess
Page Charge, or Section 2.4(e) of the JOA, relating to the Total Excess Color
Charge, are not deemed to be received in a transaction between the Partnership
on one hand, and the Partners on the other, in a capacity other than as a member
of the Partnership in accordance with Code Section 707(a)(1) or Code Section
707(c), an amount equal to the payments shall be specially allocated to the
Partner making such payment (as an item in the nature of deduction or loss).
(d) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required to be taken into account in determining Capital Accounts pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(M), the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis. Such gain or loss shall be specially allocated to the Partners in a
manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to the Treasury Regulations.
2.5 OTHER ALLOCATION RULES.
(a) In the event additional Partners are admitted to the Partnership
pursuant to Section 4.1 hereof, the Net Income or Net Loss allocated to the
Partners for such fiscal year shall be allocated among the Partners in
proportion to the Partnership Interest each Partner holds from time to time
during such fiscal year in accordance with Code Section 706, using any
convention permitted by law and selected by the President, subject to Section
5.1(h)(ii) of the JOA.
(b) In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value (computed in accordance
with Section 1.5(h) hereof). In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to Section 1.5(h)(2) hereof, subsequent
allocations among the Partners of income, gain, loss, and deduction with respect
to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner as required by Code Section 704(c) and the Treasury Regulations
thereunder. Any elections or other decisions relating to such allocations shall
be made by the President; subject to Section 5.1(h)(ii) of the JOA. Allocations
pursuant to this Section 2.5(b) are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Net Income, Net Loss or
other items of distributions pursuant to any provision of this Agreement.
2.6 BINDING EFFECT OF ALLOCATIONS. The Partners are aware of the income
tax consequences of the allocations made by this Section 2 and hereby agree to
be bound by the provisions of this Section 2 in reporting their shares of
Partnership income and loss for income tax purposes.
2.7 EXPENSES INCURRED PRIOR TO THE FORMATION OF THE PARTNERSHIP. No
expense or obligation incurred for services performed or products supplied by
either Partner prior to the formation of the Partnership shall be considered to
be a contribution or loan to, or made on behalf of, the Partnership, unless
otherwise provided in the JOA or by agreement of the Partners.
2.8 DISTRIBUTIONS TO PARTNERS; FUNDING OF LOSSES. Cash and other property
shall be distributed by or withdrawn from the Partnership, and losses of the
Partnership shall be funded, on the terms and conditions (and pursuant to the
procedures) set forth in the JOA.
3. MANAGEMENT OF THE PARTNERSHIP
3.1 CONTROLLING PARTNER. YNI shall be the controlling partner, except in
matters requiring Joint Action Without Recourse, as set forth in Section 5.1(g)
of the JOA, and Joint Action With Recourse, as set forth in Section 5.1(h) of
the JOA (collectively, "Joint Action"). In all matters other than those
requiring Joint Action, the decision of YNI shall be final, conclusive, and
binding upon the Partners and the Partnership. The Record shall be consulted in
such matters; provided that YNI may choose to disregard the advice of the Record
in its sole and absolute discretion.
3.2 PARTNER REPRESENTATIVES. The Partners will each appoint one
representative to the Partnership, neither of whom will be employed by the
Partnership. In addition, the Partners shall jointly appoint a third party to
serve as a representative as set forth in Section 3.3 hereof. Collectively, the
representatives appointed by the Partners are referred to as the "Partner
Representatives." The initial Partner Representatives shall be appointed by the
Partners on or prior to the date hereof. Except as provided in Section 3.3
hereof, each Partner Representative shall hold office until he shall die, resign
or be removed (with or without cause), by the Partner that he represents,
whereupon such Partner shall appoint such Partner Representative's successor.
Each Partner Representative shall have one (1) vote as set forth in Section 5.1
hereof.
3.3 THE THIRD PARTY. Both Partners shall agree upon the choice of a third
party (the "Third Party"), who is not and has not been affiliated with either
Partner and who is, or has been, active in newspaper management. The Third Party
shall be entitled to vote only in the event of a deadlock between the Partner
Representatives in a matter requiring joint Action With Recourse as set forth in
Section 5.1 hereof; otherwise, the Third Party shall not be entitled to vote on
any joint Action. If the Partners cannot reach agreement on the Third Party,
they shall jointly request that the President of the American Newspaper
Publisher's Association select a qualified individual to serve as the Third
Party.
3.4 MEETINGS AND ACTION OF THE PARTNER REPRESENTATIVES.
(a) The initial meeting of the Partner Representatives shall take
place at such time and place as the Partners shall agree. The Partner
Representatives may establish meeting dates and requisite notice requirements,
adopt rules of procedure consistent herewith, and may meet by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.
(b) The President may call a meeting of the Partner Representatives
and the President to discuss decisions requiring Action on thirty days' notice
("Agency Meeting") and the Partner Representatives shall be present in person or
by proxy. With respect to Partnership business specifically, but on any matter,
either Partner may call a meeting of the Partner Representatives alone, or the
Partner Representatives and the President, on 15 days' notice ("Partner
Meeting"). The Partner Representatives shall be present in person or by proxy;
the President shall attend in person, unless the President has a reasonable
excuse, in which case the President shall appoint a proxy.
3.5 ACTIONS BY PARTNERS.
(a) The Partner Representatives shall have no power, without action
by the Partners themselves, (i) to amend this Agreement; (ii) to act other than
in accordance with the purposes of the Partnership as set forth in Section 1.3
hereof; (iii) to admit a new partner; (iv) to merge or consolidate the
Partnership with any other entity; or (v) to dissolve the partnership.
(b) No Partner shall, except as authorized by this Agreement or by
the JOA, take any action or assume any obligations or liabilities on behalf of
the Partnership.
(c) Nothing in this Agreement or in the JOA shall be construed to (i)
restrict or prohibit either Partner or any Affiliate of either Partner from
carrying on any business or activity, whether or not any such business or
activity is competitive with the business of the Partnership except that
(subject to the immediately following sentence) neither Partner shall use or
permit any Affiliate to use any of their respective Names (as defined in
Sections 1.4(b)(1) and 1.5(b)(1) of the JOA) in connection with the printing or
distribution of a daily newspaper, the dissemination of news or editorial
information, or the sale or dissemination of advertising, in each case in the
York, Pennsylvania metropolitan area, or otherwise in competition with the
activities of the Partnership contemplated or permitted by the JOA, or (ii)
except as specifically provided in this Agreement or the JOA, create or be the
occasion of the existence of any fiduciary or other obligation of either Partner
(or Affiliate of such Partner) to the other Partner (or Affiliate of such other
partner). Nothing in this Agreement or the JOA (including, without limitation,
the immediately preceding sentence) shall in any way restrict, prohibit or
impair the right of each Partner to sell or otherwise license its own news,
editorial and feature content to wire services or otherwise for its own account
as it deems in its best interest.
(d) Each Partner shall give full information to the other partner
regarding letters, accounts, writings or other things that shall come into its
possession or to its knowledge concerning the Partnership.
3.6 PRESIDENT AND OTHER MANAGEMENT PERSONNEL. The initial President and
all successor Presidents shall be appointed, removed and replaced pursuant to,
and in the manner set forth in, the JOA. The President shall also appoint,
remove (with or without cause) and replace such other management personnel as he
deems necessary, proper or advisable. The President shall be responsible for the
day-to-day management of the operations and activities of the Partnership and,
in addition to the specific authorizations contained in this Agreement, shall be
authorized to conduct and transact the business of the Partnership and, to
execute in the name and on behalf of the Partnership all such instruments and
documents and to do all such acts and things as may be incidental to, or
necessary, proper or advisable for, the conduct and transaction of such
business. Notwithstanding the foregoing, approval of the Partner Representatives
shall be required with respect to the actions described in the JOA as requiring
Joint Action. The President and the other management personnel shall act in
accordance with the decisions of the Partner Representatives and shall have no
authority to take any action requiring prior approval of the Partner
Representatives without first obtaining the approval of the Partner
Representatives.
3.7 INDEMNIFICATION.
(a) The Partnership shall indemnify any person made, or threatened to
be made, a party to an action or proceeding, whether brought by a Partner or an
Affiliate of a Partner or any other person, whether civil or criminal, including
an action by or on behalf of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any Partner Representative, the Third Party or officer
of the Partnership served in any capacity at the request of the Partnership, by
reason of the fact that he, his testator or intestate, is or was a Partner
Representative, the Third Party or an officer of the Partnership, or served such
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees actually and
necessarily incurred as a result of such action or proceeding, or any appeal
therein, if such Partner Representative, Third Party or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the Partnership and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such Partner Representative, Third Party or officer did not act, in good faith,
for a purpose which he reasonably believed to be in, or, in the case of service
for any other corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise, not opposed to, the best interest of the
Partnership or that he had reasonable cause to believe that his conduct was
unlawful.
(c) For the purpose of this Section 3.7, the Partnership shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the Partnership also imposes
fiduciary duties on, or otherwise involves services by, such person with respect
to the plan or participants or beneficiaries of the plan. Excise taxes assessed
on a person with respect to an employee benefit plan pursuant to applicable law
shall be considered fines, and action taken or omitted by a person with respect
to an employee benefit plan in the performance of such person's duties for a
purpose reasonably believed by such person to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be a purpose which
is not opposed to the best interests of the partnership.
(d) Indemnification under this Section 3.7 shall be made by the
Partnership in any specific case only:
(1) If the beneficiary thereof shall have prevailed in an action
or proceeding brought against him or shall have been found to have
acted in compliance with the applicable standard of conduct set forth
in this Section 3.7; or
(2) If YNI receives an opinion in writing of independent legal
counsel that indemnification is proper in the circumstances because
the applicable standard of conduct set forth in this Section 3.7 has
been met by such Partner Representative, Third Party or officer.
(e) The Partnership shall have the power, but shall not be obligated,
to purchase and maintain insurance;
(1) To indemnify the Partnership for any obligation which it
incurs as a result of the indemnification of Partner Representatives,
the Third Party, and officers under the provisions of this Section
3.7;
(2) To indemnify such Partner Representatives, Third Party, and
officers in instances in which they may be indemnified by the
Partnership under the provisions of this Section 3.7; and
(3) To indemnify such Partner Representatives, Third Party, and
officers in instances in which they may not otherwise be indemnified
by the Partnership under the provisions of this Section 3.7.
4. TRANSFER OF PARTNERSHIP INTERESTS.
4.1 PROHIBITED TRANSFERS. Without the advance written consent of the other
Partner, which consent will not be unreasonably withheld, neither Partner shall
sell, assign, pledge, encumber, dispose of or otherwise transfer any of its
right, title or interest in or to its Partnership Interest, in whole or in part.
Further, without the advance written consent of the other Partner, which consent
shall not be unreasonably withheld, control of the Partners or Affiliates of the
Partners shall not be transferred to any other person, corporation, partnership,
trust or other entity. No such consent shall be deemed to have been withheld
unreasonably if the proposed transferee (or those controlling such proposed
transferee) does not have experience in and a good reputation within the
publishing industry. Notwithstanding the foregoing, each party shall have the
right to a veto of a single proposed transfer in its sole and absolute
discretion. One and only one proposed transfer may be vetoed by each Partner;
once the veto has been exercised, it shall not be exercised again. However, once
a proposed transfer has been vetoed, the transferee and its Affiliates shall be
deemed vetoed for all time and all purposes, unless the objecting party waives
its veto in writing. The Record shall not be entitled to veto a proposed
transfer if the transferee is Xxxxxxx X. Xxxxxxxxx, a member of the Xxxxxxx
Family, Media Central, Inc., or MediaNews Holdings, Inc. YNI shall not be
entitled to veto a proposed transfer if the transferee is Xxxxxx X. Xxxxxxx and
his family, Xxxxxx X. Xxxx and his family or Xxxxx X. Xxxxxxx and his family. No
attempted transfer of any Partnership interest or control of the Partners or
Affiliates of the Partners in violation of any provision of this Agreement shall
be effective to pass any right, title or interest therein, but shall instead be
null, void, and of no effect.
4.2 CONDITIONS TO TRANSFER. Any transfer made under Section 4.1 hereof is
subject to satisfaction of the following conditions:
(a) The transferee shall be admitted as a Partner of the Partnership
and this Agreement shall be amended accordingly;
(b) The transferee shall in writing assume and agree to perform all
of its duties and obligations as a Partner under this Agreement; and
(c) The transferor shall fully indemnify on an after tax basis the
other Partner against any adverse tax consequences to the other Partner that may
result from any termination of the Partnership for tax purposes on account of
such transfer.
5. DISSOLUTION AND TERMINATION OF THE PARTNERSHIP.
5.1 TERM. Unless renewed as provided in this Section 5.1 or terminated
pursuant to Section 5.2 hereof, this Agreement and the JOA shall continue for a
term ending at the close of business on the last day of the one hundredth full
fiscal year following the Effective Date, whereupon this Agreement and the
Partnership Agreement shall expire and terminate. This Agreement shall
automatically renew for succeeding renewal periods of twenty-five years each,
unless either of the Partners notifies the other at least five years before the
end of the then current renewal period, of the election of the party giving the
notice to terminate this Agreement. If such notice is given, this Agreement
shall terminate at the end of the initial period or the then current renewal
period during which the notice is given.
5.2 TERMINATION OF THIS AGREEMENT; DISSOLUTION OF THE PARTNERSHIP.
(a) After the Effective Date, this Agreement shall terminate only as
provided in this Section 5.2.
(b) No Partner shall cause the Partnership to be dissolved except as
provided herein. After the Effective Date, the Partnership shall continue until
dissolved as herein provided. The Partnership shall be dissolved upon the
occurrence of any of the following:
(1) Expiration of the term of this Agreement as set forth in
Sections 1.4 and 5.1 hereof;
(2) Upon the bankruptcy of either Partner. For purposes hereof,
"bankruptcy" means, with respect to any Partner, (i) the assignment by
such Partner for the benefit of creditors or the admission in writing
of its inability to pay its debts when due; or (ii) the commencement
by such Partner with respect to itself or its assets of any
liquidation, dissolution, bankruptcy, reorganization, insolvency or
other proceeding for the relief of financially distressed debtors; or
(iii) the appointment for such Partner, or a substantial part of such
Partner's assets, of a receiver, liquidator, custodian or trustee,
and, if any of the events referred to in this clause occur
involuntarily, the failure of the same to be dismissed, stayed or
discharged within ninety days; or (iv) the entry of an order for
relief against such Partner under Title 11 of the United States Code,
or any other similar law enacted by the United States Congress to
regulate bankruptcies; or (v) the commencement against such Partner of
any liquidation, dissolution, bankruptcy, reorganization, insolvency
or other proceeding for the relief of financially distressed debtors
if such proceeding remains undismissed for a period of ninety days;
(3) At the written election of a Partner if the other Partner
willfully or persistently commits one or more material breaches of
this Agreement or the JOA, or otherwise so conducts itself in matters
relating to the Partnership business that it is not reasonably
practicable to carry on the business of the Partnership; PROVIDED,
HOWEVER, that such election may be made only if the electing Partner
has given written notice to the other Partner and its parent of such
breaches or conduct and such breaches or conduct have not been
substantially cured within ninety days after such notice has been
given.
(4) If the Partnership experiences a Net Loss, as determined in
accordance with generally accepted accounting principles consistently
applied (except as otherwise agreed by the Partners) for any three
consecutive fiscal years or if either Partner does not, in respect of
any three consecutive fiscal years, receive under Section 4.1(c) of
the JOA aggregate monies sufficient to cover its aggregate Editorial
Expenses (as defined in the JOA) for such three years, then at any
time within six months following the end of any such three consecutive
fiscal years, such Partner may give the other Partner written notice
of its intention to terminate this Agreement and thereafter this
Agreement shall terminate six months after the delivery of such
notice, or earlier if mutually agreed by the Partners.
(c) No termination of the JOA or dissolution of the Partnership shall
be construed to release any Partner from liability at law or in equity to the
other Partner or the Partnership arising out of any breach of the terms of this
Agreement or the JOA.
(d) As soon as practicable after the termination of this Agreement by
lapse of time or otherwise, the Partnership shall liquidate as provided in
Section 5.3 hereof.
5.3 TERMINATION AT END OF TERM. If both this Agreement and the JOA
terminate by lapse of time or otherwise:
(a) The Partners will meet with each other and use their best efforts
to develop a just and equitable plan for discontinuing and dissolving the
Partnership and distributing its assets in kind between the Partners (after
payment of all indebtedness and liabilities of the Partnership and all costs of
dissolution and liquidation), in accordance with their respective capital
accounts in the Agency, so as to enable the Partners to resume separate
publication of THE YORK DAILY RECORD/YORK SUNDAY RECORD and THE YORK
DISPATCH/YORK SUNDAY NEWS, respectively, as independent businesses (a
"Distribution Plan"). If the Partners agree on a Distribution Plan, the assets
of the Partnership shall be distributed in accordance with the Distribution
Plan, all Licenses shall automatically expire and terminate, and the Partnership
shall thereupon be dissolved. Except as provided in the Distribution Plan and
upon effective distribution of assets by the Partnership pursuant thereto,
neither Partner shall have any separate right, title or interest in or to any
asset of the Partnership.
(b) If the Partners are unable to agree upon a Distribution Plan the
business affairs and assets of the Partnership shall be liquidated as promptly
as possible and receivables collected, all in an orderly and businesslike manner
so as not to involve undue sacrifice, and the assets of the Partnership shall be
converted into cash. The proceeds shall be applied and distributed in the
following order:
(1) To the payment and discharge of all of the Partnership's
debts and liabilities (other than those to the Partners), including
the establishment of any necessary reserves;
(2) To the payment of any debts and liabilities to Partners; and
(3) To the Partners in accordance with their Capital Accounts.
6. MISCELLANEOUS.
6.1 NOTICES. Each notice or other communication given pursuant to this
Agreement shall be given as provided in Section 9.1 of the JOA.
6.2 NON-ASSIGNABILITY. Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and their permitted assigns, but any
attempt by any party to assign any of its rights or to delegate any of its
duties hereunder shall be subject to Section 4.1 hereof.
6.3 ENTIRE UNDERSTANDING. This Agreement (including the Schedules attached
hereto) embodies the entire understanding and agreement of the parties on the
subject matter herein contained and supercedes any and all prior agreements,
arrangements and understandings relative to the subject matter hereof.
6.4 HEADINGS. Titles, captions or headings contained in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit, extend or describe the scope of this Agreement or the intent of any
provision hereof.
6.5 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the internal laws of the Commonwealth of Pennsylvania.
6.6 MODIFICATION. This Agreement shall be amended only by an agreement in
writing and signed by the party against which enforcement of any waiver,
modification or discharge is sought.
6.7 SEVERABILITY. Each provision of this Agreement shall be considered
severable from the rest and if any provision of this Agreement or its
application to an person or entity, or circumstance shall be held invalid and
contrary to any existing or future law or unenforceable to any extent, the
remainder of this Agreement and the application of any other provision to any
person, entity or circumstance shall not be affected thereby and shall be
interpreted and enforced to the greatest extent permitted by law so as to give
effect to the original intent of the parties hereto.
6.8 SPECIFIC PERFORMANCE. In addition to any other remedies the Partners
may have, each Partner shall have the right to enforce the provisions of this
Agreement through injunctive relief or by a decree or decrees of specific
performance.
6.9 NO THIRD-PARTY BENEFICIARIES. Nothing in the Agreement, expressed or
implied, shall give to anyone other than the parties hereto and their respective
permitted successors and assigns any benefit, or any legal or equitable right,
remedy or claim, under or in respect of this Agreement.
6.10 NO WAIVER. No delay on the part of any Partner in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any Partner of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
6.11 VARIATION OF PRONOUNS. All pronouns and all variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity or identities of the antecedent person or persons may require.
6.12 SURVIVAL. This Agreement shall survive the consummation of the
transactions contemplated hereby.
6.13 PRIORITY OF INTERPRETATION. If any provision of this Agreement
conflicts with any provision in the JOA, the provision in the JOA shall control.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
RECORD:
YORK DAILY RECORD, INC.
By: /S/ XXXXX X. XXXXXXX
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
YNI:
YORK NEWSPAPERS, INC.
By: /S/ X. X. XXXXXXX
-------------------------
Name: X. X. Xxxxxxx
Title: Exec V.P.
