Partnership Agreement
For
California Newspapers Partnership
A Delaware General Partnership
By and Among
West Coast MediaNews LLC
Donrey Newspapers LLC
The Sun Company of San Bernardino, California
And
MediaWest - SBC, Inc.
March 31, 1999
TABLE OF CONTENTS
Article I
Definitions
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Article II
The Partnership
---------------
2.1 Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 Business Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Registered Office and Agent . . . . . . . . . . . . . . . . . . . . . . . . .6
2.5 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.6 Principal Place of Business . . . . . . . . . . . . . . . . . . . . . . . . .6
2.7 Title to Partnership Property . . . . . . . . . . . . . . . . . . . . . . . .6
2.8 The Initial Partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.9 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.10 Representations and Warranties of the Parties . . . . . . . . . . . . . . . .7
Article III
Capital Structure and Contributions
-----------------------------------
3.1 Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.2 No Other Mandatory Capital Contributions. . . . . . . . . . . . . . . . . . 10
3.3 No Right of Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Loans by Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Article IV
Capital Accounts; Allocation
Of Profits And Losses
---------------------
4.1 Capital Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Book Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Tax Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Article V
Distributions
-------------
5.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Article VI
Accounting And Reports
----------------------
6.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Reports to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Annual Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Actions in Event of Audit . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Tax Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Article VII
Actions By Partners
-------------------
7.1 Consents and Other Actions by Sun and MWSB. . . . . . . . . . . . . . . . . 16
7.2 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.3 Actions by the Partners . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article VIII
Management
----------
8.1 The Management Committee. . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Removal of Members; Vacancies . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Meetings of the Management Committee; Notice. . . . . . . . . . . . . . . . 18
8.4 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.5 Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.6 Certain Matters Requiring a Unanimous
Vote of the Management Committee. . . . . . . . . . . . . . . . . . . . . 18
8.7 Action by Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.8 Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.9 Provision of Services to Partnership by MediaNews . . . . . . . . . . . . . 21
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Article IX
Transfer of Partnership Interests;
Additional and Substitute Partners
----------------------------------
9.1 Prohibited Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Permitted Transfer by Partners. . . . . . . . . . . . . . . . . . . . . . . 22
9.3 Substitute Partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.4 Involuntary Withdrawal by a Partner . . . . . . . . . . . . . . . . . . . . 23
9.5 Right of First Refusal of Sale of Partnership Interests . . . . . . . . . . 23
9.6 Tag-Along Rights Regarding Sales of Partnership Interests . . . . . . . . . 26
9.7 West Coast MediaNews Drag-Along Rights. . . . . . . . . . . . . . . . . . . 27
9.8 Admission of Additional Partners. . . . . . . . . . . . . . . . . . . . . . 28
9.9 Donrey Put Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.10 Gannett's Put Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.11 Partnership's Call Option re Section 9.10 Put Option. . . . . . . . . . . . 31
9.12 Acknowledgment of Pledge of Interests . . . . . . . . . . . . . . . . . . . 32
Article X
Dissolution and Liquidation
---------------------------
10.1 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Election to Continue the Business . . . . . . . . . . . . . . . . . . . . . 33
10.3 Closing of Affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article XI
Amendment to Agreement
----------------------
Article XII
Indemnification
---------------
12.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.2 Indemnification Obligations . . . . . . . . . . . . . . . . . . . . . . . . 35
12.3 Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.4 Third Party Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.5 Other Indemnification Claims. . . . . . . . . . . . . . . . . . . . . . . . 38
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Article XIII
General Provisions
------------------
13.1 Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.4 Entire Agreement, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.5 Construction Principles . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.10 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.11 Additional Documents and Acts . . . . . . . . . . . . . . . . . . . . . . . 41
13.12 No Third Party Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . 41
13.13 Formation of Subsidiary Limited Partnership . . . . . . . . . . . . . . . . 41
Exhibits
Exhibit 1 - Schedule of Certain Partnership Assets and Liabilities To Be
Transferred to Subsidiary Limited Partnership.
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PARTNERSHIP AGREEMENT
FOR
CALIFORNIA NEWSPAPERS PARTNERSHIP
A DELAWARE GENERAL PARTNERSHIP
THIS PARTNERSHIP AGREEMENT OF CALIFORNIA NEWSPAPERS PARTNERSHIP, a
Delaware general partnership (the "Partnership") is made and entered into as
of this 31st day of March, 1999 by and among West Coast MediaNews LLC, a
Delaware limited liability company ("West Coast MediaNews"), Donrey
Newspapers LLC, an Arkansas limited liability company ("Donrey", The Sun
Company of San Bernardino, California, a California corporation ("Sun"),
Media West - SBC, Inc., a Delaware corporation ("MWSB", with Sun and MWSB
being sometimes hereinafter collectively referred to as "Gannett") and each
other individual or business entity who may hereafter be admitted from time
to time as a Partner hereunder. West Coast MediaNews Donrey Sun, MWSB and
any other individual and/or business entity subsequently admitted shall be
known as and referred to as "Partners" and individually as a "Partner".
RECITALS
WHEREAS, the Partners desire to form a general partnership
under the laws of the State of Delaware; and
WHEREAS, the parties desire to enter into a written agreement
as to the affairs of the Partnership and the conduct of its business,
NOW THEREFORE, in consideration of the mutual covenants
contained herein, they agree as follows:
ARTICLE I
DEFINITIONS
"ADDITIONAL CAPITAL CONTRIBUTIONS" means any additional Capital
Contributions made pursuant to Section 3.1(b) of this Agreement.
"ADDITIONAL CONTRIBUTION TERMS" shall have the meaning ascribed to
it in Section 3.1(b) of this Agreement.
"ADDITIONAL PARTNER" means any additional person admitted to
the Partnership, pursuant to Section 9.8 of this Agreement, but does not
include a Substitute Partner.
"AFFILIATE" means any person controlled by, controlling, or
under common control with the entity in question.
"BOOK VALUE" means, with respect to any asset of the
Partnership, the adjusted basis of such asset as of the relevant date for
federal income tax purposes, except as follows:
(i) the initial Book Value of any asset contributed by a
Partner to the Partnership shall be the fair market value of such asset;
(ii) the Book Values of all Partnership assets (including
intangible assets such as goodwill) shall be adjusted to equal their
respective fair market values as of the following times:
(A) 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;
(B) the distribution by the Partnership to a Partner
of more than a DE MINIMIS amount of money or Partnership property as
consideration for an Interest in the Partnership; and
(C) the liquidation of the Partnership within the
meaning of Regulation section 1.704-1(b)(2) (iv)(f)(5)(ii);
(iii) the Book Value of the 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 Regulation section 1.704-1(b)(2)(iv)(m); and
(iv) if the Book Value of an asset has been determined or
adjusted pursuant to subsection (i), (ii) or (iii) above, such Book Value
shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Profits and Losses and other
items allocated pursuant to Section 4.2.
The foregoing definition of Book Value is intended to comply
with the provisions of Regulation section 1.704-1(b)(2)(iv) and shall be
interpreted and applied consistently therewith.
"BUSINESS DAY" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of California).
"BUSINESS PLAN" means the business plan for the Partnership for
the period ending June 30, 1999, substantially in the form attached hereto as
Exhibit A, and as adopted annually thereafter by the Management Committee.
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"CAPITAL ACCOUNT" means, for each Partner, the capital account
maintained by the Partnership for such Partner as described in Section 4.1.
"CAPITAL CONTRIBUTION" means the amount of money and the other
property (net of any liabilities that the Partnership is considered to
assume, or take subject to, pursuant to Code Section 752, except to the
extent such liabilities are in fact discharged by the Partners contributing
such property) which is contributed by a Partner to the Partnership pursuant
to Article III hereof, including Additional Capital Contributions.
"CODE" means the Internal Revenue Code of 1986, as currently
amended.
"CONTRIBUTION AGREEMENT" means that contribution agreement
described in Section 3.1 of the Agreement.
"DEPRECIATION" means, for each Fiscal Year or part thereof, an
amount equal to the depreciation, amortization, or other cost recovery
deduction allowable for federal income tax purposes with respect to an asset
for such Fiscal Year or part thereof, except that if the Book Value of an
asset differs from its adjusted basis for federal income tax purposes, the
depreciation, amortization or other cost recovery deduction for such Fiscal
Year or part thereof shall be an amount which bears the same ratio to such
Book Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such Fiscal Year or part thereof bears to such
adjusted tax basis. If such asset has a zero adjusted tax basis, the
depreciation, amortization or other cost recovery deduction for each Fiscal
Year shall be determined under a method reasonably selected by the Tax
Matters Partner.
"EXECUTIVE OFFICERS" means the following officers of the
Partnership: its president and chief executive officer, chief financial
officer and any other individual who would be an "executive officer" of the
Partnership as determined in accordance with Rule 3b-7 promulgated under the
Securities Exchange Act of 1934.
"FISCAL YEAR" means the fiscal year of the Partnership as
defined in Section 2.9 hereof.
"FORMATION DATE" means the date on which the term of the
Partnership shall commence as defined in Section 2.5 hereof.
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"GAAP" means generally accepted accounting principles, as in
effect from time to time.
"INDEBTEDNESS" means those obligations for borrowed money which
were assumed by the Partnership as a consequence of, or to which property of
the Partnership was subject immediately following the Partner's initial
Capital Contributions, within the meaning of Section 3.1(a) hereof and any
obligation of a Partner to pay money to the Partnership which has been
assumed by the Partnership other than such obligations which are included on
the working capital statement described in Section 4.5 of the Contribution
Agreement, as set forth on Schedule A hereto.
"INITIAL PARTNERS" means those Partners whose names are set
forth in Section 2.8 hereof.
"INTEREST" means, with respect to any Partner at any time, such
Partner's entire beneficial ownership interest in the Partnership and its
property at such time, including such Partner's Capital Account, voting
rights (if any), and right to share in Profits and Losses, all items of
income, gain, loss, deduction and credit, distributions and all other
benefits of the Partnership as specified in this Agreement, together with
such Partner's obligations to comply with all of the terms of this Agreement.
"INVOLUNTARY TRANSFER" shall have the meaning ascribed thereto
in Section 9.4.
"MAJORITY" means the Partners having a majority of the
Percentage Interests.
"PERCENTAGE INTEREST" means, for each Partner, such Partner's
percentage interest as set forth in Section 3.1 hereof as such may be
adjusted from time to time in accordance with this Agreement.
"PROFITS" and "LOSSES" means, for each Fiscal Year or part
thereof, the taxable income or loss of the Partnership for such Fiscal Year
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:
(i) any income of the Partnership that is exempt from
federal income tax shall be added to such taxable income or loss;
(ii) any expenditures of the Partnership described in Code
section 705(a)(2)(B) or treated as such pursuant to Regulation section
1.704-1(b)(2)(iv)(I) shall be subtracted from such taxable income or loss;
4
(iii) any Depreciation for such Fiscal Year or part thereof
shall be taken into account in lieu of the depreciation, amortization and
other cost recovery deductions taken into account in computing such taxable
income or loss;
(iv) 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 with reference to the Book
Value of the property disposed of, rather than the adjusted tax basis of such
property;
(v) in the event the Book Value of any Partnership asset is
adjusted pursuant to section (ii) or (iii) of the definition of Book Value
hereof, the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such assets for purposes of computing Profits
and Losses; and
(vi) such taxable income or loss shall be deemed not to
include any income, gain, loss, deduction or other item thereof allocated
pursuant to Section 4.3.
"REGULATIONS" means the income tax regulations promulgated
under the Code by the Department of the Treasury, as such regulations may be
amended from time to time.
"SUBSTITUTE PARTNER" means a person who has become a substitute
Partner pursuant to Section 9.3 hereof, but does not include an Additional
Partner.
"TRANSFER" means any sale, assignment, gift, alienation, or
other disposition, whether voluntary or by operation of law (other than a
transfer which may arise by reason of death or incapacity), of an interest or
any portion thereof, but shall not include any pledge, hypothecation or
granting of a security interest in such Interest.
"TRANSFEREE" means a purchaser, transferee, assignee (other
than collateral assignees) or any other person who takes, in accordance with
the terms of this Agreement, an Interest in the Partnership.
ARTICLE II
THE PARTNERSHIP
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2.1 FORMATION. The parties hereto have formed a partnership in
accordance with the further terms and provisions hereof. Each of the
Partners shall execute or cause to be executed from time to time all other
instruments, certificates, notices and documents, and shall do or cause to be
done all such filing, recording, publishing and other acts, in each case, as
may be necessary or appropriate from time to time to comply with all
applicable requirements for the formation and/or operation and, when
appropriate, termination of a partnership in the State of Delaware and all
other jurisdictions where the Partnership shall desire to conduct its
business.
2.2 NAME. The name of the Partnership shall be "California
Newspapers Partnership" and its business shall be carried on in this name
with such variations and changes as the Management Committee, in its sole
judgment, deems necessary or appropriate to comply with the requirements of
the jurisdictions in which the Partnership's operations are conducted.
2.3 BUSINESS PURPOSE. The purpose of the Partnership is to carry
on any lawful business and to engage in any lawful act or activity for which
a partnership may be formed under the laws of the State of Delaware;
PROVIDED, HOWEVER, that the business of the Partnership shall, without the
unanimous consent of the Management Committee, be limited to activities
involving the ownership, operation, and publication (in printed and
electronic form) of newspapers and related publications and business
activities directly related or incidental to such ownership, operation and
publication including, without limitation, commercial printing, alternate
distribution services and direct mail activities.
2.4 REGISTERED OFFICE AND AGENT. The registered office of the
Partnership in the State of Delaware and its registered agent for service of
process on the Partnership in the State of Delaware shall be as determined by
the Management Committee.
2.5 TERM. The term of the Partnership shall commence on the date
of this Agreement (the "Formation Date") and shall continue until December
31, 2048 unless earlier dissolved and liquidated in accordance with Article
XI hereof.
2.6 PRINCIPAL PLACE OF BUSINESS. The Partnership shall maintain
its principal place of business at 00000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx,
Xxxxxxxxxx 00000 or such other location or locations as the Management
Committee may from time to time select.
2.7 TITLE TO PARTNERSHIP PROPERTY. Except as shown in Schedule B,
legal title to all property of the Partnership other than leased property shall
be held and conveyed in the name of the Partnership.
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2.8 THE INITIAL PARTNERS. The name and place of residence of each
Initial Partner is as follows:
NAME RESIDENCE
West Coast MediaNews c/o MediaNews Group, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Donrey c/o Stephens Group, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Sun c/o Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
MWSB 00 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xxxx, Xxxxxx 00000
2.9 FISCAL YEAR. Unless the Tax Matters Partner shall otherwise
determine in accordance with Section 706 of the Code, the fiscal year of the
Partnership shall end on June 30 of each year, and the initial Fiscal Year of
the Partnership shall commence on the Formation Date and end on June 30,
1999.
2.10 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each of the
parties represents and warrants that:
(a) It is a corporation or limited liability corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization;
(b) It has all requisite power and authority to enter into
this Agreement; the execution and delivery by such party of this Agreement
and the consummation by such party of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
such party; and this Agreement has been duly and validly executed and
delivered by such party and constitutes (assuming the due and valid execution
and delivery of this Agreement by the other parties), the legal, valid and
binding obligation of each party, enforceable against each party in
accordance with its terms;
(c) Except as set forth in Schedule 2.10(c) hereto, there is
no litigation pending or, to the best knowledge of such party, threatened
against such party which has a reasonable likelihood of materially and
adversely affecting the operations, properties or business of the Partnership
or any of such party's obligations under this Agreement;
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(d) The execution, delivery and performance by such party of
this Agreement will not, as of and after the Closing Date, result in a breach
of any of the terms, provisions or conditions of any agreement to which such
party is a party which has a reasonable likelihood of materially and
adversely affecting the operations, properties or business of the Partnership
or such party's obligations under this Agreement;
(e) The execution and delivery by such party of this
Agreement and the formation of the Partnership does not require any filing by
it with, or approval or consent of, any governmental authority which has not
already been made.
ARTICLE III
CAPITAL STRUCTURE AND CONTRIBUTIONS
3.1 CAPITAL CONTRIBUTIONS.
(a) INITIAL CONTRIBUTIONS. Each Partner shall make (or
cause to be made) a Capital Contribution to the Partnership as set forth in
the Contribution Agreement among Garden State Newspapers, Inc., Alameda
Newspapers, Inc., V&P Publishing, Inc., and Internet Media Publishing, Inc.
(on behalf of West Coast MediaNews), DR Partners (on behalf of Donrey), Sun
and MWSB, dated as of March 3, 1999 (the "Contribution Agreement"). As a
result of such Capital Contributions, West Coast MediaNews will receive a
Percentage Interest in the Partnership of 58.8%, Donrey will receive a
Percentage Interest in the Partnership of 28.5% and Sun will receive a
Partnership Interest in the Partnership of 11.4% and MWSB will receive a
Partnership Interest of 1.3%. Percentage Interests shall not be adjusted on
account of the payment of any sums, or the contribution of any property,
treated as a Capital Contribution without the unanimous consent of the
Partners.
(b) ADDITIONAL CAPITAL CONTRIBUTIONS. At any time, and from
time to time after the Formation Date, the Management Committee, in its sole
and absolute discretion, may, by unanimous vote, determine that the
Partnership requires additional capital contributions (the "Additional
Capital Contributions") and the amount, terms and conditions thereof. Such
Additional Capital Contributions will be used by the Partnership for such
activities as are designated by the Management Committee in its approval
resolution. All Additional Capital Contributions will be made by the
Partners in proportion to their then-current Percentage Interests in the
Partnership. In addition, with the unanimous consent of the Management
Committee, Additional Capital Contributions may be obtained by the admittance
of Additional Partners in accordance with Section 9.8. In the event
Additional Partners are admitted, the Percentage Interests of the existing
and Additional Partners shall be adjusted as determined by the Management
Committee, voting unanimously. From the date of the Management Committee's
determination that an Additional Capital Contribution is required until it
has been paid, a Partner's obligation to make that
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contribution shall accrue interest at a rate of 9% per annum until such
obligation (and all accrued interest, if any, with respect thereto) has been
paid in full. All cash distributions to which such Partner shall otherwise
be entitled to receive pursuant to Section 5.1(a) hereof, shall instead be
retained by the Partnership and credited to the discharge of such obligations
and accrued interest. Any amounts so retained shall be treated as
distributed to such Partner and, first paid to the Partnership in the amount
of the accrued interest and, second, with respect to the remainder thereof,
contributed to the Partnership as an Additional Capital Contribution on
behalf of the Partner owing such obligation.
(c) CAPITAL CONTRIBUTIONS REQUIRED UNDER SECTION 12.2. As
provided in Section 12.2 of this Agreement, any Partner owing an
indemnification obligation to the Partnership arising under Article XII of
this Agreement shall make a capital contribution in cash or other immediately
available funds in the amount of such obligation promptly upon the
determination of such obligation. Furthermore, from the date of the
determination of such obligation until the date such capital contribution is
made in cash or other immediately available funds, the amount of such
obligation shall accrue interest owing to the Partnership at a rate of 9 per
cent per annum, and until such obligation (and all accrued interest, if any,
with respect thereto) has been paid in full in cash or other immediately
available funds, all cash distributions to which a Partner shall otherwise be
entitled to receive pursuant to Section 5.1(a) hereof, shall instead be
retained by the Partnership and credited to the discharge of such obligations
and accrued interest. Any amounts so retained shall be treated as
distributed to such Partner and, first paid to the Partnership in the amount
of the accrued interest and, second, with respect to the remainder thereof,
contributed to the Partnership as an Additional Capital Contribution on
behalf of the Partner owing such obligation.
(d) OTHER CONTRIBUTIONS. At any time during the term of
this Agreement, any Partner may offer to contribute to the Partnership as an
additional capital contribution any newspapers, mastheads or related assets
owned by it that are located in the State of California. Should the
Management Committee, by a unanimous vote, agree to accept such contribution,
the Capital Account and, if determined by unanimous vote of the Management
Committee, as provided in Section 8.6 hereof, the Percentage Interest, of the
contributing Partner will be adjusted upward to reflect the fair market value
of such contribution and, if determined by unanimous vote of the Management
Committee, as provided in Section 8.6 hereof, the Percentage Interest of the
other Partners will be adjusted downward proportionately to reflect the
increase in the contributing Partner's Percentage Interest.
3.2 NO OTHER MANDATORY CAPITAL CONTRIBUTIONS. Except as specified
in Section 3.1(b), Section 3.1(c) or Section 12.2, no Partner shall be
obligated to make any Additional Capital Contribution to the Partnership's
capital.
3.3 NO RIGHT OF WITHDRAWAL. No Partner shall have the right to
withdraw any portion of such Partner's Capital Contributions to, or to
receive any distributions from, the Partnership, except as provided in
Articles V, IX and X hereof.
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3.4 LOANS BY THIRD PARTIES. Subject to the provisions of Section 8.6
hereof, the Partnership may borrow funds or enter into other similar credit,
guarantee, financing or refinancing arrangements for any purpose from any
Partner or from any person upon such terms as the Management Committee
determines, in its sole and absolute discretion, are appropriate.
ARTICLE IV
CAPITAL ACCOUNTS; ALLOCATION
OF PROFITS AND LOSSES
4.1 CAPITAL ACCOUNTS. Each Partner shall have a capital account (a
"Capital Account") which account shall be (1) increased by the amount of (a)
the Capital Contributions of such Partner, (b) the allocations to such
Partner of Profits and items of income or gain pursuant to Section 4.2, and
(c) any positive adjustment to such Capital Account by reason of an
adjustment to the Book Value of such Partner's share of Partnership assets,
and (2) decreased by the amount of (x) any cash and the Book Value of any
property (net of liabilities secured by such property that such Partner is
considered to assume or take subject to under Code section 752) distributed
to such Partner, (y) the allocation to such Partner of Losses and items of
loss pursuant to Section 4.2, and (z) any negative adjustment to such Capital
Account by reason of an adjustment to the Book Value of such Partner's share
of Partnership assets. The provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulation
section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulation.
4.2 BOOK ALLOCATION.
(a) IN GENERAL. This Section 4.2 sets forth the general
rules for book allocations of Profits, Losses and similar items to the
Partners as reflected in their Capital Accounts.
(b) PROFITS AND LOSSES. Profits shall be allocated to the
Partners in proportion to their Percentage Interests. Losses shall be
allocated to the Partners in proportion to their Percentage Interests except
that any interest expense or other deduction attributable to any Indebtedness
(other than any depreciation or amortization deductions attributable to
property which is contributed to the Partnership subject to such
Indebtedness) and any deductions attributable to any indemnity payments
described in Section 12.2 shall be allocated to the Partner that contributed
such property or such indemnity payment.
(c) SPECIAL RULES.
(i) Notwithstanding the general allocation rules set
forth in Section 4.2(b), in the case of any deduction allocable to a
"nonrecourse liability" (as that term is defined in Regulations Section
1.704-2(b)(3)) and any deduction allocable to a "partner nonrecourse
liability" (as that term is defined in Regulations Section 1.704-2(b)(4)),
shall be subject to the rules applicable thereto and described in Regulations
Section 1.704-2.
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(ii) If in the opinion of independent tax counsel for
the Partnership, it is necessary to provide special allocation rules in order
to avoid a significant risk that a material portion of any allocation set
forth in this Article IV would not be respected for federal income tax
purposes, the Partners shall negotiate in good faith any amendments to this
Agreement as, in the opinion of such counsel, are necessary or desirable,
taking into account the interests of the Partners as a whole and all other
relevant factors, to avoid or reduce significantly such risk to the extent
possible without materially changing the amounts allocable and distributable
to any Partner pursuant to this Agreement.
(iii) If there is a change made, by unanimous vote of
the Management Committee in accordance with the provisions of Section 8.6
hereof, in any Partner's share of the Profits, Losses or other items of the
Partnership during any Fiscal Year, allocations among the Partners shall be
made in accordance with their interests in the Partnership from time to time
during such Fiscal Year in accordance with Code section 706, using the
closing-of-the-books method, except that Depreciation shall be deemed to
accrue ratably on a daily basis over the entire Fiscal Year during which the
corresponding asset is owned by the Partnership.
(iv) Except as otherwise provided in Sections 4.2(b)
and 4.3(b)(i), each item of income, gain, loss, and deduction and all other
items governed by Code section 702(a) shall be allocated among the Partners
in proportion to the allocation of Profits, Losses and other items to the
Partners hereunder, provided that any gain recognized from any disposition of
a Partnership asset that is treated as ordinary income because it is
attributable to the recapture of any depreciation or amortization shall be
allocated among the Partners in the same ratio as the prior allocations of
Profits, Losses or other items that included such depreciation or
amortization, but not in excess of the gain otherwise allocable to each
Partner.
4.3 TAX ALLOCATIONS.
(a) IN GENERAL. Except as set forth in Section 4.3(b),
allocations for tax purposes of items of Profit, Loss and other items of
income, gain, loss, deduction, credit and distribution therefor, shall be
made in the same manner as allocations for book purposes set forth in Section
4.2(b). All such allocations pursuant to Section 4.3(b) shall be considered
made solely for purposes of federal, state and local income taxes, and shall
not affect or in any way be taken into account in computing any Partner's
Capital Account or share of Profits, Losses, other items or gain, deduction
and distribution pursuant to any provision of this Agreement.
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(b) SPECIAL RULES.
(i) ELIMINATION OF BOOK/TAX DISPARITIES. In
determining a Partner's allocable share of Partnership taxable income, the
Partner's allocable share of each item of Profits and Losses shall be
properly adjusted to reflect the difference between such Partner's share of
the adjusted tax basis and the Book Value of Partnership assets used in
determining such item under any method adopted by the Tax Matters Partner and
allowable under Code Section 704(c), provided, however, that any deductions
for depreciation or amortization attributable to property contributed to the
Partnership by a Partner shall be allocated to the Partner contributing such
property. In the event that the method for the allocation of depreciation or
amortization deductions attributable to contributed property described in the
previous sentence is disallowed, then the Tax Matters Partner shall make such
compensating allocations of items including (notwithstanding the second
sentence of Section 4.3(a)) such book allocations as are intended to
accomplish the same economic result.
(ii) TAX CREDITS. Any tax credits shall be allocated
among the Partners in accordance with Regulation section 1.704-1(b)(4)(ii),
unless the applicable Code provision shall otherwise require.
(c) CONFORMITY OF REPORTING. The Partners are aware of the
income tax consequences of the allocations made or to be made pursuant to
this Article 4 and Section 6.5 and hereby agree to be bound by the provisions
of this Article 4 and Section 6.5 in reporting their shares of Partnership
profits, gains, income, losses, deductions, credits and other items for
income tax purposes.
ARTICLE V
DISTRIBUTIONS
5.1 DISTRIBUTIONS.
(a) The Management Committee (or, at the Management
Committee's direction, the Executive Officers of the Partnership), on or
before the last day of each month shall (i) determine the amount (x) of
earnings or other Partnership funds available for distribution to Partners
(whether as a distribution of earnings or as loans or advances) and (y) the
amount of working capital needed for the continuing operations of the
business of the Partnership (including, without limitation, capital
expenditures), and (ii) cause the excess, if any, of (x) over (y) to be
distributed to the Partners (subject to the provisions of Sections 3.1(b) and
3.1(c) hereof relating to the Partnership's retention of sums otherwise
distributable to a Partner to discharge certain unpaid capital
contributions). Except as otherwise provided herein, all distributions shall
be made in proportion to the Partners' Percentage Interests. For the
purposes of this Section 5.1(a), any payment of principal or interest with
respect to Indebtedness shall be treated as distributed by the Partnership to
the Partner that transferred the property to the Partnership to which such
Indebtedness relates, and then as contributed to the Partnership by such
Partner as an Additional Capital Contribution.
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(b) If a distribution of cash is deemed made pursuant to
Sections 3.1(b), 3.1(c) or 5.1(a) and, the distribution is not in proportion
to the Partner's Percentage Interest, then the Management Committee shall
adjust subsequent distributions so that the cumulative distributions deemed
made pursuant to Sections 3.1(b), 3.1(c) or 5.1(a) and this Section 5.1(b)
are, in the aggregate, in proportion to the Partners' Percentage Interests.
ARTICLE VI
ACCOUNTING AND REPORTS
6.1 BOOKS AND RECORDS.
(a) The Partnership shall maintain or cause to be maintained
at an office of the Partnership this Agreement and all amendments thereto and
full and accurate books of the Partnership showing all receipts and
expenditures, assets and liabilities, Profits and Losses, and all other
books, records and information required by the Act as necessary for recording
the Partnership's business and affairs. The Partnership's books and records
shall be maintained in accordance with GAAP except to the extent otherwise
provided hereunder for purposes of maintaining Capital Accounts in accordance
with Article IV hereof and calculating the Profits or Losses charged or
credited thereto. Such documents, books and records shall be maintained at
such office or such designated successor office until two (2) years after the
termination and liquidation of the Partnership.
(b) Each Partner shall have the right at reasonable times
during usual business hours to inspect the facilities of the Partnership, to
observe the Partnership's operations and to examine, audit and make copies of
the books of account and other books and records of the Partnership and other
books and records relating to the reserves, assets, liabilities and expenses
of the Partnership and expenditures by the Management Committee on behalf of
the Partnership; PROVIDED, HOWEVER, that none of the foregoing activities
shall be conducted in a manner that unreasonably interferes with the
Partnership's operations or business or the Management Committee'
management thereof. Such right may be exercised through any agent or
employee of a Partner designated in writing by it or by an independent public
accountant, engineer, attorney or other consultant so designated. The
Partner making the request shall bear all expenses incurred in any
inspection, audit or examination made at such Partner's behest. Should any
inspection, audit or examination disclose any errors or improper charges, the
Management Committee shall make, or cause to be made, appropriate adjustments
therefor.
6.2 REPORTS TO PARTNERS.
(a) As soon as practicable and in any event within thirty
(30) days after the end of each calendar month, the Tax Matters Partner shall
cause to be prepared and sent to each Partner unaudited statements of
income, cash flow and changes in retained
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earnings and Partners' equity, for the month in question and from the
beginning of such Fiscal Year to the end of such month and an unaudited
balance sheet as of the close of such month, all of which shall (i) be
prepared in accordance with GAAP (except that certain footnotes may be
omitted) and (ii) set forth in each case in comparative form the figures for
the same monthly period for the previous fiscal year.
(b) As soon as practicable and in any event within
seventy-five (75) days after the end of each Fiscal Year, the Tax Matters
Partner shall provide to each Partner audited statements of income, retained
earnings, cash flow and Partner's equity, for such Fiscal Year and a balance
sheet as of the close of such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, prepared and
certified as to the scope of its audit by the accounting firm of Ernst &
Young or such other certified public accountants as may be selected by the
Management Committee.
(c) As requested, the Tax Matters Partner shall provide to
each Partner such information as may be necessary for them to comply with
applicable financial reporting requirements of any competent governmental
authorities or agencies or stock exchange on which the securities of any such
Partner are listed including, without limitation, the U.S. Securities and
Exchange Commission and such information regarding the financial position,
business, properties or affairs of the Partnership as a Partner may
reasonably request.
6.3 ANNUAL TAX RETURNS.
(a) West Coast MediaNews is hereby designated the "Tax
Matters Partner" for federal income tax purposes pursuant to Section 6231 of
the Code with respect to all taxable years of the Partnership and is
authorized to do whatever is necessary to qualify as such. If West Coast
MediaNews is no longer a Partner or has resigned as the Tax Matters Partner,
the Tax Matters Partner shall be any Partner designated as such by a
unanimous vote of the Partners, and in the absence of a unanimous vote, as
shall be determined under applicable provisions of the Code and/or
Regulations. The Tax Matters Partner shall, as soon as practicable under the
circumstances, inform each Partner of all tax-related matters that are, or
have the reasonable potential to become, material to the Partnership that
come to its attention in its capacity as Tax Matters Partner.
(b) The Tax Matters Partner shall prepare or cause to be
prepared all tax returns required of the Partnership, which returns shall be
reviewed in advance of filing by Ernst & Young LLP or another certified
public accountant selected by the Management Committee. As soon as
practicable after the end of each Fiscal Year, the Tax Matters Partner shall
furnish to each Partner such information in the possession of the Tax Matters
Partner requested by such Partner as necessary to timely fulfill such
Partner's federal, state, local and foreign tax obligations, including Form
K-1, or any similar form as may be required by the Code or the Internal
Revenue Service (the "IRS") or, to the extent any such information is not in
the Tax Matters Partner's possession, the Tax Matters Partner shall take all
reasonable steps necessary to have such information provided to the
requesting Partner. No later than forty-five (45) business days prior to
filing with the IRS, the Tax Matters Partner shall deliver to each Partner
for its review a complete copy of the federal income tax return proposed to
be filed by the Partnership. The Tax Matters
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Partner shall consider in good faith, consistent with Section 6.3(c) hereof,
any comments of the Partners with respect to such return made within thirty
(30) business days of sending the copy of such return. The Partners shall
file their individual or corporate returns in a manner consistent with the
Partnership tax and information returns.
(c) The Tax Matters Partner shall, consistent with the
Business Plan, use its best efforts to do all acts and take whatever steps
are required to maximize, in the aggregate, the federal, state and local
income tax advantages available to the Partnership and shall defend all tax
audits and litigation with respect thereto. The Tax Matters Partner shall
maintain the books, records and tax returns of the Partnership in a manner
consistent with the acts, elections and steps taken by the Partnership.
6.4 ACTIONS IN EVENT OF AUDIT. If an audit of any of the
Partnership's tax returns shall occur, each Partner shall, at the expense of
the Partnership, participate in the audit. No Partner may contest, settle or
otherwise compromise assertions of the auditing agent which may be adverse to
the Partnership or any Partner without the approval of a unanimous Management
Committee. The Management Committee may, if it determines that the retention
of accountants or other professionals would be in the best interests of the
Partnership, retain such accountants or other professionals, to assist in any
such audits. The Partnership shall indemnify and reimburse the Management
Committee for all expenses, including legal and accounting fees, claims,
liabilities, losses, and damages to the extent borne by the Management
Committee, incurred in connection with any administrative or judicial
proceeding with respect to any audit of the Partnership's tax returns. The
payment of all such expenses to which this indemnification applies shall be
made before any distributions are made to the Partners under Article V
hereof. Neither the Tax Matters Partner, nor any other person shall have any
obligation to provide funds for such purpose. The taking of any action and
the incurring of any expense by the Management Committee in connection with
any such proceeding, except to the extent required by law, is a matter in the
sole discretion of the Management Committee.
6.5 TAX ELECTIONS. The Tax Matters Partner shall, in its
reasonable discretion, determine (x) whether or not to cause the Partnership
to file an election under Code section 754 and the Regulations thereunder and
a corresponding election under the applicable section of state and local law,
(y) which method to apply to any asset of the Partnership under Section
704(c) of the Code consistent with Section 4.3(b) hereof and whether or not
to make any other elections provided for under related state and local laws,
and (z) any other tax elections.
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ARTICLE VII
ACTIONS BY PARTNERS
7.1 CONSENTS AND OTHER ACTIONS BY SUN AND MWSB. In each instance
under this Agreement when any consent, approval or other action is required
or authorized to be taken by Sun and/or MWSB in their capacity as Partners,
and in each instance hereunder when Sun and/or MWSB are entitled to the
receipt of notice of any matter, it is hereby agreed by each of the parties
hereto that (a) Sun shall act on behalf of Sun and MWSB, (b) that any
consent, approval or other action made, given or taken by Sun shall be deemed
to have been made, given and taken on behalf of both Sun and MWSB and (c)
that any notice duly delivered to Sun shall be deemed to have been duly
delivered to Sun and MWSB, however, notices shall also be sent to MWSB.
7.2 MEETINGS. Meetings of the Partners shall be held at the place
and time designated from time to time unanimously by the Partners. The
Partners may take action by the vote of Partners at a meeting in person or by
proxy, or without a meeting by written consent. In no instance where action
is authorized by written consent need a meeting of Partners be called or
noticed.
7.3 ACTIONS BY THE PARTNERS. All actions required or permitted to
be taken by the Partners with respect to the Partnership require the vote or
consent of all of the Partners.
ARTICLE VIII
MANAGEMENT
8.1 THE MANAGEMENT COMMITTEE. The business and affairs of the
Partnership shall be managed under the direction and authority of a
Management Committee, who shall annually adopt a Business Plan.
(a) NUMBER, APPOINTMENT AND TERM OF MANAGERS. The
Management Committee shall be comprised of seven members. Four members shall
be appointed by West Coast MediaNews, two members shall be appointed by
Donrey and one member shall be appointed jointly by Sun and MWSB. The
managers shall act solely as the agents of the Partners appointing them.
Each manager shall serve at the pleasure of the Partner appointing him and
until his successor has been duly appointed, or until his resignation or
removal. In addition, the Chief Executive Officer of the Partnership, as
named pursuant to Section 8.8(a), shall be entitled to attend all meetings
and participate in all discussions of the Management Committee except as to
matters regarding the Chief Executive Officer or as otherwise determined by
the Management Committee. Each Partner shall also be entitled to designate
one non-voting observer to attend and participate in all meetings of the
Management Committee.
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(b) DUTIES AND POWERS. The Management Committee may
exercise all such powers of the Partnership and do all such lawful acts and
things as are not directed or required to be exercised or done by the
Partners. Each member of the Management Committee may delegate to a
representative by written proxy the right to act on behalf of the member in
any respect, including without limitation the right to attend meetings or
telephone conferences, and to vote upon resolutions with or without a meeting.
8.2 REMOVAL OF MEMBERS; VACANCIES. A member of the Management
Committee may be removed at any time, with or without cause, by the Partner
(or Partners) who appointed such member. Any vacancy on the Management
Committee resulting from removal, resignation, death or incapacity shall be
filled by the Partner (or Partners) who is entitled to appoint such member.
8.3 MEETINGS OF THE MANAGEMENT COMMITTEE; NOTICE. The Management
Committee shall meet in regular meetings held at least quarterly at such time
and place as may from time to time be determined by the Management Committee
either in person or by telephone. Special meetings of the Management
Committee may be called by any member. Written notice of regular and special
meetings of the Management Committee, stating the place, date and hour of the
meeting shall be delivered to each member together with a reasonably detailed
agenda for such meeting not less than five Business Days before the date of
the meeting, provided, that the foregoing notice requirement may be waived by
the Management Committee with respect to any meeting at which at least four
(4) members of the Management Committee (including at least one member
appointed by each Partner) vote for waiver of notice. Notice may be
delivered to members in person, by telephone, telecopy, fax, electronic mail
or other means of telecommunication. The meetings of the Management Committee
shall be convened by the chairman (if one has been elected) or in the absence
or unavailability of the chairman, by the member who requested the meeting.
8.4 QUORUM. Four (4) members of the Management Committee shall
constitute a quorum for the transaction of all such business as shall have
been set forth with reasonable specificity in the agenda accompanying the
notice for such meeting, either in person or by telephone provided that such
four (or more) members who are in attendance at such meeting include members
appointed by at least two Partners. For the transaction of all other
business at a regular or special meeting of the Management Committee, four
(4) members of the Management Committee, whether present in person or by
telephone, shall again constitute a quorum, provided that such four (4) or
more members who are in attendance include members appointed by each of the
Partners.
8.5 VOTING. Any matter brought before the Management Committee
shall be decided by a majority of members present, except for matters that
require a unanimous
17
vote of the Management Committee as provided in this Agreement or as
otherwise provided under the laws of the State of Delaware.
8.6 CERTAIN MATTERS REQUIRING A UNANIMOUS VOTE OF THE MANAGEMENT
COMMITTEE. The Partnership shall not, without a unanimous vote of all seven
members of the Management Committee:
(a) admit any new Partners to the Partnership;
(b) sell, lease, transfer or otherwise dispose of (other
than PRO RATA to the Partners) substantially all of the assets, property and
goodwill of any newspaper or related publication owned by the Partnership;
(c) except for distributions to Partners pursuant to Section
5.1 which may be deemed to be advances, commit or cause the Partnership to
invest in or purchase the securities of, or any interests of, any person
except short-term investments in U.S. Government securities,
federally-insured certificates of deposit, repurchase agreements for such
securities, or commercial paper rated A-1 or better by Standard and Poor's or
P-1 or better by Xxxxx'x or its equivalent by a nationally recognized
statistical rating organization;
(d) commit or cause the Partnership to acquire all or
substantially all of the capital stock or all or substantially all of the
assets of any person or business;
(e) obligate the Partners to make any Additional Capital
Contribution or adjust any Partner's Percentage Interest;
(f) cause the Partnership to create, or enter into, any
corporation, partnership, joint venture, association, trust or other business
entity or to merge or consolidate with any person;
(g) except as provided in Section 8.9 hereof, commit or
cause the Partnership to enter into any contract, agreement, understanding or
transaction (i) with any person, that is other than in the ordinary course of
the Partnership's business, (ii) with a Partner or an affiliate of any
Partner, which would have the result of imposing terms or conditions on the
Partnership that are more onerous or less advantageous to the Partnership
than those customarily provided by such Affiliate to its affiliates or (iii)
with a Partner or an Affiliate of any Partner that either involves goods,
services or properties of a value of more than $1,000,000 in the aggregate
over the entire term of such contract, agreement, understanding or
transaction, or does not reflect standard and customary commercial terms;
18
(h) accept the contribution of any additional newspapers or
related assets from any Partner as an Additional Capital Contribution under
the provision of Section 3.1(c) hereof;
(i) commit or cause the Partnership (i) to borrow any funds;
(ii) to enter into any capitalized leases, in each case in excess of an
aggregate of $500,000 per year (on a combined basis), except for refinancings
or extensions of any existing indebtedness of the Partnership (including,
without limitation, the Indebtedness) or (iii) enter into any hedge agreement;
(j) make any single capital expenditure in excess of $1.0
million or make capital expenditures in any Fiscal Year in excess of $2.5
million in the aggregate;
(k) except as permitted pursuant to Article XI hereof,
dissolve or liquidate the Partnership;
(l) make any material change to the nature of the
Partnership's business as described in Section 2.3.; or
(m) adopt any portion of the Business Plan which would, of
itself, require a unanimous vote of the Management Committee.
8.7 ACTION BY CONSENT. Any action required or permitted to be
taken on behalf of the Partnership at any meeting of the Management Committee
may be taken without a meeting by written consent signed by the number of
members of the Management Committee required to approve such action, provided
that such members include at least one member appointed by each of the
Partners.
8.8 EXECUTIVE OFFICERS.
(a) The Management Committee shall elect a chief executive
officer of the Partnership (the "Chief Executive Officer") who shall have the
responsibility for managing the day-to-day business operations and affairs of
the Partnership and supervising its other officers, subject to the direction,
supervision and control of the Management Committee and the Partners. In
general, the Chief Executive Officer shall have such other powers and perform
such other duties as usually pertain to the office of a chief executive
officer, and as from time to time may be assigned to him by the Management
Committee, including, without limitation, the authority to retain and
terminate employees of the Partnership. The powers and duties of the Chief
Executive Officer shall at all times be subject to the provisions of this
Agreement.
(b) The Management Committee shall also elect a chief
financial officer of the Partnership (the "Chief Financial Officer") who
shall have the responsibility for managing the Partnership's financial
affairs and books of account, subject to the direction
19
of the Management Committee, the Chief Executive Officer, and the Partners.
In general, the Chief Financial Officer shall have such other powers and
perform such other duties as usually pertain to the office of a chief
financial officer, and as from time to time may be assigned to him by the
Management Committee. The powers and duties of the Chief Financial Officer
shall at all times be subject to the provisions of this Agreement.
(c) The Management Committee may in its discretion also
elect from time to time such other Executive Officers as it may determine,
each of whom shall have such powers and perform such duties as usually
pertain to such offices and as from time to time may be assigned to such
persons by the Management Committee. The powers and duties of each Executive
Officer shall be subject to the provisions of this Agreement.
(d) Except during a reasonable transition period following
the execution of this Agreement, both the Partnership's Chief Executive
Officer (other than with the approval of at least two of the Partners) and
the Chief Financial Officer shall be employees of the Partnership and shall
not simultaneously be employees of any Partner nor any Affiliate of any
Partner.
(e) Subject to the provisions of this Agreement and to the
directives and policies of the Management Committee, the Chief Executive
Officer, the Chief Financial Officer and the other officers of the
Partnership shall have the power, acting individually or jointly, to
represent and bind the Partnership in all matters, in accordance with the
scope of their respective duties subject to Section 8.6 hereof and any other
limitations imposed by the Management Committee.
8.9 PROVISION OF SERVICES TO PARTNERSHIP BY MEDIANEWS. The
Partners hereby agree that the Partnership shall obtain management services,
operating, administrative, accounting, electronic media and/or other support
services, newsprint purchase services, financial reporting services, human
resource services, risk management services, tax reporting and tax return
preparation services and other similar services which MediaNews Group, Inc.,
a Delaware corporation, and the parent company of West Coast MediaNews
("MediaNews") provides to its own operating affiliates (collectively, the
"MediaNews Support Services") from MediaNews. In exchange for these
services, the Partnership shall pay MediaNews, on a monthly basis, an amount
equal to 1.25 percent of the Partnership's gross revenues (as calculated in
accordance with generally accepted accounting principles); PROVIDED, HOWEVER,
that the amount of 1.25 percent may not be altered at any time without the
unanimous vote of the Management Committee. All services and supplies
including employee benefits and newsprint, shall be provided at cost without
any adjustment for overhead or any other direct or indirect payment to
MediaNews or its affiliates. MediaNews by agreeing to provide management
services, agrees to perform those services with the degree of care that a
reasonably prudent person would exercise and shall not enter into any
transaction in which it may have a conflict of interest without the unanimous
consent of the members of the Management Committee. If MediaNews should at
anytime, due to bankruptcy, insolvency or similar incapacity,
20
become unable to continue to provide such services on behalf of the
Partnership, the Partners shall, by mutual agreement, make appropriate
arrangements for the provisions of such services by one or more of the other
Partners or their Affiliates, or by one or more third parties.
ARTICLE IX
TRANSFER OF PARTNERSHIP INTERESTS;
ADDITIONAL AND SUBSTITUTE PARTNERS
9.1 PROHIBITED TRANSFERS. No Partner may Transfer its Interest or
any part thereof in any way whatsoever, and any such Transfer in violation of
this Article IX shall be null and void as against the Partnership, except as
otherwise permitted herein or provided by law, and the Transferring or
withdrawing Partners shall be liable to the Partnership and the other
Partners for all damages that they may sustain as a result of such attempted
Transfer or withdrawal.
9.2 PERMITTED TRANSFERS BY PARTNERS. No Partner may Transfer all
or a portion of its Interest unless:
(a) the Partner desiring to consummate such Transfer (the
"Assigning Partner"), and the prospective Transferee each execute,
acknowledge and deliver to all the other Partners such instruments of
transfer and assignment with respect to such Transfer and such other
instruments as are reasonably satisfactory in form and substance to all the
Partners (including those written instruments described in 9.6(d));
(b) the Transfer will not violate any federal or state laws;
(c) the Transfer will not cause any violation of or an event
of default under, or result in acceleration of any indebtedness under, any
note, mortgage, loan, or similar instrument or document to which the
Partnership is a party;
(d) the Transfer will not cause a material adverse tax
consequence to the Partnership or any of the Partners including but not
limited to any material adverse tax consequence resulting, directly or
indirectly, from the termination of the Partnership under section 708 of the
Code;
(e) the Transfer will not cause the Partnership to be
classified as an entity other than a partnership for purposes of the Code; and
(f) except for transfers of a Partner's Interest to an
Affiliate of such Partner, any amendments to this Agreement required by or
made a condition by any Partner to its consent to the transfer, have been
made.
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9.3 SUBSTITUTE PARTNER. A Transferee of the whole or any part of
an Interest who satisfies the conditions set forth in Section 9.2 hereof
shall have the right to become a Partner in place of the Assigning Partner
only if all of the following conditions are satisfied:
(a) the fully executed and acknowledged written instrument
of assignment that has been filed with the Partnership sets forth a statement
of the intention of the Assigning Partner that the Transferee become a
Substitute Partner in its place;
(b) the Transferee executes, adopts and acknowledges this
Agreement (as it may be amended) and agrees to assume all the obligations of
the Assigning Partner; and
(c) any costs of the Transfer incurred by the Partnership
shall have been reimbursed by the Assigning Partner or the Transferee to the
Partnership.
9.4 INVOLUNTARY WITHDRAWAL BY A PARTNER.
With respect to the Transfer of a Partner's Interest due to
bankruptcy, or other insolvency, involuntary dissolution or liquidation, or
foreclosure (or other exercise of remedies by a party holding a security
interest in such Interest) (each, an "Involuntary Transfer"), the Partner
with respect to whom such event occurred shall forthwith cease to be a
Partner and shall have no rights or powers as a Partner except for such
rights as are specified pursuant to Articles III, IV and V and Section
10.3(b) hereof.
9.5 RIGHT OF FIRST REFUSAL FOR SALE OF PARTNERSHIP INTERESTS.
(a) Except as otherwise herein provided, no Partner may
voluntarily transfer all or any part of its Interest in the Partnership to
any party (i) in any case prior to January 1, 2004 or (ii) after that date
unless it has complied with the procedures of Section 9.2 and first offers to
sell such Interest to the other Partner(s) pursuant to the terms of this
Section 9.5; PROVIDED that this Section 9.5 shall not be applicable with
respect to a Transfer to an Affiliate of the Transferring Partner.
(b) A Partner (the "Offering Partner") who has received a
firm, written, bona fide offer from a third-party for its Interest ( a "Third
Party Offer") or who has otherwise determined to offer its Interest for sale
shall, before offering such Interest or agreeing to accept such offer for
such Interest (in either case, the "Offered Interest"), give written notice
to the other Partners that are not Affiliates of the Offering Partner (each
an "Option Partner") of such offer or intent including, in the case of a
Third Party Offer, a copy of such Third Party Offer and a complete
description thereof including, by way of
22
example but not of limitation, the nature and extent of such Third Party
Offer, the purchase price therein, the terms of payment and the time for
performance.
(c) Upon receiving the Offering Partner's written notice
pursuant to Section 9.5(b), the Option Partner(s) shall have a period of
thirty (30) days following the date of receipt by the Option Partner of the
Offering Partner's notice to elect to purchase the Offered Interest at the
price determined in accordance with Section 9.5(f). If an Option Partner
desires to purchase the Offered Interest it shall give written notice to the
Offering Partner in the manner set forth in Section 13.2 hereof within such
30-day period. To be effective, this notice must be received by the Offering
Partner within such 30-day period. In no event may the Option Partner(s)
elect to acquire less than all of the Offered Interest. To the extent there
are more than one Option Partners, the Option Partners accepting such offer
shall be jointly and severally liable to the Offering Partner to purchase all
of the Offered Interest.
(d) The closing of the sale and purchase of the Offered
Interest shall be promptly completed, but in any event, to the extent
practicable, within ninety (90) days after the receipt of the Option
Partner(s)' notice of acceptance (or such later date as necessary to obtain
any necessary regulatory approvals). The Management Committee shall assist
in coordinating the closing. At the closing, the Offering Partner shall sell
the Offered Interest, free and clear of all liens and encumbrances, and
execute and deliver such assignment(s) and all other documents or other
instruments of assignment or conveyance necessary to effect and evidence the
assignment. At the closing, the Option Partner(s) shall deliver to the
Offering Partner cash, a certified or official bank check or shall pay by
wire transfer of immediately available funds for the applicable purchase
price.
(e) If the Option Partner(s) do not elect to purchase all of
the Offered Interest pursuant to this Section 9.5, then the Offering Partner
shall be free to sell, assign, transfer, pledge, encumber or otherwise
dispose of the Offered Interest pursuant to the Third Party Offer or, in the
case of a non-Third Party Offer, to any third party for an amount equal to
fair market value, as hereunder determined, in either case, within six
month's after the date of the Option Partner(s)' notice of refusal or after
the expiration of the 30-day response period, whichever occurs first. For
purposes of this Section 9.5(e), a sale shall be deemed made when there is
executed a legally binding agreement between the Offering Partner and the
prospective purchaser, subject to no condition or contingency which permits
the prospective purchaser to terminate or cancel the agreement, except for
the default of the Offering Partner, and routine approvals or conditions. If
a sale within the meaning of this Section 9.5(e) is not made within such
6-month period, then the Offered Interest shall remain subject to the
restrictions of this Agreement and must again be first offered to the Option
Partner(s) if the Offering Partner thereafter wishes to sell its Interest to
a third party.
(f) (i) In the case of a Third Party Offer, if the
consideration offered by the prospective purchaser is offered in cash and/or
a promissory or other similar instrument to be issued by the prospective
purchaser, the price shall be the price offered
23
by such prospective purchaser. If (A) the consideration offered by the
prospective purchaser is offered in a form other than cash and/or a
promissory note or other similar instrument or (B) the Offering Partner has
not received a Third Party Offer, then in either case, the price shall be the
Fair Market Value of the Offered Interest, as defined below.
(ii) For the purposes of this Agreement, "Fair Market
Value" shall be the amount that would be paid for the Interest in the
Partnership as a going concern, on a consolidated basis, by a willing buyer
to a willing seller. The Offering Partner and the Option Partner(s) may
mutually agree as to the Fair Market Value of the Interest in question. If
the Offering Partner and the Option Partner(s) are unable to agree on such
Fair Market Value within fifteen (15) days after the Offering Partner's
written notice of the proposed sale, then in such event Fair Market Value
shall be determined pursuant to Section 9.5(f)(iii) by two independent
qualified appraisers, one to be appointed by the Offering Partner and the
other to be appointed by the Option Partner(s).
(iii) The two independent appraisers shall be appointed
within fifteen (15) days after receipt by the Option Partner(s) of the notice
of proposed sale. If either side fails to appoint an appraiser within such
period, then its right to do so shall lapse and the appraisal made by the one
independent appraiser who is timely appointed shall be the Fair Market Value.
If two appraisals are made, and if the two appraised values differ by less
than 15 percent, Fair Market Value shall be the average of the two
appraisals, and if the two appraised values differ by more than 15 percent,
the two appraisers shall jointly select a third appraiser and, the Fair
Market Value shall be the average of the two of the three appraisals that are
closest together in amount. All appraisals shall be made within thirty (30)
days of appointment of an appraiser, and written notice of the results of
such appraisals shall be given to all parties within such 30-day period. The
Fair Market Value shall be determined based upon the value of the Partnership
in its entirety as a going concern, with the Offering Partner receiving a
proportionate part of such total value based upon its Percentage Interest.
In making any appraisal hereunder, all debts and liabilities shall be taken
into account. Each side shall pay the fees of the appraiser selected by them.
24
9.6 TAG-ALONG RIGHTS REGARDING SALES OF PARTNERSHIP INTERESTS.
(a) Except for Transfers of a Partner's Interest to an
Affiliate of such Partner and except following an Involuntary Transfer of a
Partner's Interest, in any case where a Partner has declined to exercise its
rights of first refusal under Section 9.5, no Partner (the "Tag-Along
Offeror") shall, individually or collectively, in any one transaction or
series of transactions, directly or indirectly, sell or otherwise dispose of
its Interest, to any person (a "Third Party") unless the terms and conditions
of such sale or other disposition to such Third Party shall include an offer
to each other Partner (each, a "Tag-Along Offeree") to include, at the option
of each Tag-Along Offeree, in the sale or other disposition to the Third
Party, such Tag-Along Offeree's Interest (the "Tag-Along Right"). Each
Partner proposing to effect such a sale or other disposition shall send a
written notice (the "Tag-Along Notice") to each of the Tag-Along Offerees
setting forth the terms of the offer. At any time within 15 days after its
receipt of the Tag-Along Notice, each Tag-Along Offeree may exercise its
Tag-Along Option by furnishing written notice of such exercise (the
"Tag-Along Exercise Notice") to the Tag-Along Offeror.
(b) If the proposed sale or other disposition to the Third
Party by the Partner providing the Tag-Along Notice is consummated, each
Tag-Along Offeree shall have the right to sell such Third Party all of its
Interest.
(c) Each Partner participating in the sale or other
disposition to the Third Party shall have the right, in their sole
discretion, at all times prior to consummation of the proposed sale or other
disposition giving rise to the Tag-Along Right granted by this Section to
abandon, rescind, annul, withdraw or otherwise terminate such sale or other
disposition as it relates to such Partner's Interest whereupon that Partner's
Tag-Along Rights in respect of such sale or other disposition pursuant to
this Section shall become null and void, and neither the Tag-Along Offeror
nor the Third Party shall have any liability or obligations to the
withdrawing Tag-Along Offeree with respect thereto by virtue of such
abandonment, rescission, annulment, withdrawal or termination.
(d) The purchase of each Tag-Along Offeree's Interest
pursuant to this Section shall be on the same terms and conditions, including
but not limited to the purchase price (as adjusted for any difference in size
of the respective Interest's), as are applicable to the Partner giving the
Tag-Along Notice, which shall be stated in such Tag-Along Notice. In
determining the purchase price of any Interest under this Section, the
aggregate purchase price of all Interests being acquired by the Third Party
shall be increased to the extent any of the selling Partners shall receive
additional compensation (A) for covenants not to compete or (B) for services
(such as pursuant to consulting agreements or management agreements) which
are in excess of the amounts which would be payable for comparable services
as a result of an arm's-length transaction.
(e) If, within 15 days after receipt of a Tag-Along Notice,
any Tag-Along Offeree has not delivered a Tag-Along Exercise Notice, such
Tag-Along Offeree will be deemed to have waived any and all of its rights
with respect to the sale or other
25
disposition of Interests described in such Tag-Along Notice and the other
Partners shall have 135 days following the expiration of such 15-day period
in which to consummate such sale or other disposition on terms not more
favorable to such other Partners than those described in the Tag-Along
Notice. If, at the end of 150 days following receipt of such Tag-Along
Notice, the sale or other disposition described therein has not been
completed, then all restrictions on sale or other disposition contained in
this Agreement shall again be in effect.
9.7 WEST COAST MEDIANEWS DRAG-ALONG RIGHTS.
(a) If, at any time after January 1, 2005, West Coast
MediaNews receives a bona fide written offer to purchase all of the Interests
in the Partnership from an independent third party, in one transaction or a
series of transactions, and West Coast MediaNews determines to accept such
offer, then, notwithstanding any other provisions of this Agreement, at West
Coast MediaNews's election, all other Partners shall, subject to (b) below,
be required to sell their respective Interests on the same terms and
conditions (except for adjustments based upon the relative size of Percentage
Interests) as have been offered to West Coast MediaNews (the West Coast
MediaNews Drag-Along Rights); PROVIDED THAT the aggregate purchase price of
all Interests being acquired by the Third Party shall be increased to the
extent any of the selling Partners shall receive additional compensation (A)
for covenants not to compete or (B) for services (such as pursuant to
consulting agreements or management agreements) which are in excess of the
amounts which would be payable for comparable services as a result of an
arm's-length transaction; AND FURTHER PROVIDED THAT all other Partners
receive fair market value (as determined in accordance with Section 9.5(f))
for their Interest.
(b) If West Coast MediaNews elects to exercise its
Drag-Along Rights, it shall provide written notice (the "Drag-Along Notice")
to each other Partner of such election at least 30 days in advance of the
closing date for such transaction, which notice shall describe the terms and
conditions of such offer and the proposed closing date. Upon receipt of the
Drag-Along Notice, each other Partner shall be obligated to sell its entire
Interest to the Third Party making such offer on the terms set forth in the
Drag-Along Notice. However, if the transaction is not completed within 90
days after the giving of the Drag-Along Notice, then any sale thereafter by
West Coast MediaNews of its Interest with respect to which it wishes to
exercise its Drag-Along Rights shall require a new notice under this Section
9.7(b).
9.8 ADMISSION OF ADDITIONAL PARTNERS. A person shall become an
Additional Partner only if and when each of the following conditions is
satisfied:
(a) the Management Committee, unanimously and in its sole
and absolute discretion, determine the Additional Contribution Terms;
26
(b) the Partnership has complied with the terms of Section
3.1(b);
(c) all of the Partners consent in writing to such
admission, which consent may be withheld by any such Partner in its sole and
absolute discretion;
(d) the Management Committee receives written instruments
(including, without limitation, such person's consent to be bound by this
Agreement (as it may be amended) as an Additional Partner) that are in a form
satisfactory to the Management Committee (as determined in its sole and
absolute discretion);
(e) the Partnership has received such person's Capital
Contribution; and
(f) any amendments to this Agreement required by or made a
condition by any Partner to its consent to the transfer, have been made.
9.9 DONREY PUT OPTION.
(a) At any time on or after January 1, 0000, Xxxxxx may, by
written notice to West Coast MediaNews and Gannett, require West Coast
MediaNews and Gannett to cause the Partnership to enter into a contract to
redeem all of Donrey's Interest in the Partnership in exchange for a
distribution of cash equal to the then-determined Fair Market Value of such
Interest (net of any liabilities allocable to such Interest) plus the amounts
described in Section 9.9(b) below within 2 years of the date the Fair Market
Value of such Interest is determined under this Section 9.9. Such Fair
Market Value shall be determined in accordance with the procedures set forth
in Section 9.5(a) through (f) above, PROVIDED, HOWEVER, that the period for
negotiation between the Partners set forth in Section 9.5(f)(ii) shall be 90
days. At the time such Fair Market Value is determined, the Interest of
Donrey in the Partnership shall terminate and Donrey shall be treated as a
"retiring partner" for purposes of Code Section 736 and the payment described
in this Section 9.9(a) shall be treated as described in Code Section 736(b).
(b) Upon the date of the determination of such Fair Market
Value, Donrey's right to receive any distribution or allocation of Profits
from the Partnership under Section 4.2(b) shall convert automatically into a
first priority interest in the Profits of the Partnership equal to the
product of (x) the determined Fair Market Value of such Interest and (y) the
30-day London Inter-Bank Offered Rate ("LIBOR") plus (I) 1 percent for the
first 6-month period following the date of determination of the Fair Market
Value; (II) 2 percent for the seventh through ninth months following the date
of determination of the Fair Market Value; (III) 3 percent for the tenth
through twelfth months following the date of determination of the Fair Market
Value; (IV) 4 percent for the thirteenth through fifteenth months following
the date of determination of the Fair Market Value; (V) 5 percent for the
sixteenth through eighteenth months following the date of determination of
the Fair Market Value; (VI) 6 percent for the nineteenth through twenty-first
months following the date of determination of the Fair Market Value; and
(VII) 7 percent for the twenty-second through
27
twenty-fourth months following the date of determination of the Fair Market
Value. The payments described in this Section 9.9(b) shall be treated as
distributions of partnership income as described in Code Section 736(a).
(c) In connection with Donrey's exercise of the put option
described in subsection (a) above, each of the other Partners shall be
obligated, effective as of the closing for the Partnership's acquisition of
Donrey's Interest in the Partnership, to make as an additional capital
contribution their pro rata share of such additional cash sums as may be
required by the Partnership to acquire Donrey's Interest in the Partnership
under the terms of this Section 9.9. Notwithstanding the foregoing, however,
(i) if West Coast MediaNews shall advise Gannett, in its sole discretion, of
its election, with Gannett's concurrence, to contribute less than its pro
rata share of such required additional capital contributions, then Gannett
shall, at its option, be permitted to contribute the portion of such funds
which West Coast MediaNews elects not to contribute and (ii) if at the time
Donrey exercises its put Gannett's Percentage Interest is less than 20%,
Gannett shall, in its sole election, in any event be permitted to contribute
so much of the additional cash sums required for the Partnership to acquire
Donrey's interest as shall appropriately cause Gannet's Percentage Interest
(after the making of both Gannett's and West Coast Media News' capital
contribution) to be increased to 20%. Immediately following the making of the
additional capital contributions required for the Partnership to acquire
Donrey's interest, Gannett's and West Coast Media News' Percentage Interests
shall be appropriately re-adjusted.
(d) If prior to the closing for the Partnership's
acquisition of Donrey's Interest in the Partnership pursuant to Donrey's
exercise of its put option pursuant to subsection (a) above, Gannett shall
have exercised its put option pursuant to Section 9.10 of this Agreement, all
obligations of the Partnership to Donrey and Gannett relative to the exercise
of both put options shall rank PARI PASSU.
9.10 GANNETT PUT OPTION.
(a) At any time on or after January 1, 2003, Gannett may, by
written notice to West Coast MediaNews and Donrey, require West Coast
MediaNews and Donrey to cause the Partnership to enter into a contract to
redeem all of Gannett's Interest in the Partnership in exchange for a
distribution of cash equal to the then-determined Fair Market Value of such
Interest (net of any liabilities allocable to such Interest) plus the amounts
described in Section 9.10(b) below within 2 years of the date the Fair Market
Value of such Interest is determined under this Section 9.10. Such Fair
Market Value shall be determined in accordance with the procedures set forth
in Section 9.5(a) through (f) above, PROVIDED, HOWEVER, that the period for
negotiation between the Partners set forth in Section 9.5(f)(ii) shall be 90
days. At the time such Fair Market Value is determined, the Interest of
Gannett in the Partnership shall terminate and Gannett shall be treated as a
"retiring partner" for purposes of Code Section 736 and the payment described
in this Section 9.9(a) shall be treated as described in Code Section 736(b).
28
(b) Upon the date of the determination of such Fair Market
Value, Gannett's right to receive any distribution or allocation of Profits
from the Partnership under Section 4.2(b) shall convert automatically into a
first priority interest in the Profits of the Partnership equal to the
product of (x) the determined Fair Market Value of such Interest and (y)
LIBOR plus (I) 1 percent for the first 6-month period following the date of
determination of the Fair Market Value; (II) 2 percent for the seventh
through ninth months following the date of determination of the Fair Market
Value; (III) 3 percent for the tenth through twelfth months following the
date of determination of the Fair Market Value; (IV) 4 percent for the
thirteenth through fifteenth months following the date of determination of
the Fair Market Value; (V) 5 percent for the sixteenth through eighteenth
months following the date of determination of the Fair Market Value; (VI) 6
percent for the nineteenth through twenty-first months following the date of
determination of the Fair Market Value; and (VII) 7 percent for the
twenty-second through twenty-fourth months following the date of
determination of the Fair Market Value. The payments described in this
Section 9.10(b) shall be treated as distributions of partnership income as
described in Code Section 736(a).
(c) In connection with Gannett's exercise of the put option
described in subsection (a) above, each of the other Partners shall be
obligated, effective as of the closing for the Partnership's acquisition of
Gannett's Interest in the Partnership, to make as an additional capital
contribution their pro rata share of such additional cash sums as may be
required by the Partnership to acquire Gannett's Interest in the Partnership
under the terms of this Section 9.9. Notwithstanding the foregoing, however,
if West Coast MediaNews shall advise Donrey, in its sole discretion, of its
election, with Donrey's concurrence, to contribute less than its pro rata
share of such required additional capital contributions, then Donrey shall,
at its option, be permitted to contribute the portion of such funds which
West Coast MediaNews elects not to contribute. In that circumstance,
Donrey's and West Coast Media News' Percentage Interests shall be
appropriately re-adjusted following the making of such additional capital
contribution.
(d) If prior to the closing for the Partnership's
acquisition of Gannett's Interest in the Partnership pursuant to Gannett's
exercise of its put option pursuant to subsection (a) above, Donrey shall
have exercised its put option pursuant to Section 9.9 of this Agreement, all
obligations of the Partnership to Donrey and Gannett relative to the exercise
of both put options shall rank PARI PASSU.
9.11 PARTNERSHIP CALL OPTION RE SECTION 9.10 PUT OPTION.
(a) At any time subsequent to the exercise by Donrey of its
put option set forth in Section 9.9 of this Agreement, the Partnership shall
have the option, by written notice to Gannett, to call the put option set
forth in Section 9.10 of this Agreement, if at the time of such call (i) such
put option shall not previously have been exercised and (ii) the Percentage
Interest of Gannett shall be less than 20%.
29
(b) Upon the exercise by the Partnership of its call option
set forth in subsection (a) hereof, the Partnership shall undertake to redeem
all of Gannett's interest in the Partnership, in exchange for a distribution
of cash equal to the then-determined Fair Market Value of such Interest (net
of any liabilities allocable to such Interest) plus the amounts described in
Section 9.11(c) below within 2 years of the date the Fair Market Value of
such Interest is determined under this Section 9.11. Such Fair Market Value
shall be determined in accordance with the procedures set forth in Section
9.5(a) through (f) above, PROVIDED, HOWEVER, that the period for negotiation
between the Partners set forth in Section 9.5(f)(ii) shall be 90 days. At
the time such Fair Market Value is determined, the Interest of Gannett in the
Partnership shall terminate and Gannett shall be treated as a "retiring
partner" for purposes of Code Section 736 and the payment described in this
Section 9.11(b) shall be treated as described in Code Section 736(b).
(c) Upon the date of the determination of such Fair Market
Value, Gannett's right to receive any distribution or allocation of Profits
from the Partnership under Section 4.2(b) shall convert automatically into a
first priority interest in the Profits of the Partnership equal to the
product of (x) the determined Fair Market Value of such Interest and (y)
LIBOR plus (I) 1 percent for the first 6-month period following the date of
determination of the Fair Market Value; (II) 2 percent for the seventh
through ninth months following the date of determination of the Fair Market
Value; (III) 3 percent for the tenth through twelfth months following the
date of determination of the Fair Market Value; (IV) 4 percent for the
thirteenth through fifteenth months following the date of determination of
the Fair Market Value; (V) 5 percent for the sixteenth through eighteenth
months following the date of determination of the Fair Market Value; (VI) 6
percent for the nineteenth through twenty-first months following the date of
determination of the Fair Market Value; and (VII) 7 percent for the
twenty-second through twenty-fourth months following the date of
determination of the Fair Market Value. The payments described in this
Section 9.11(c) shall be treated as distributions of partnership income as
described in Code Section 736(a).
9.12 ACKNOWLEDGMENT OF PLEDGES OF INTERESTS.
(a) Donrey and Gannett hereby each acknowledges that West
Coast MediaNews's Interest in the Partnership has been pledged as security
under an Amended and Restated Credit Agreement dated as of October 31, 1996
among Garden State Newspapers, Inc., The Bank of New York, as agent, and
other banks.
(b) West Coast MediaNews and Gannett each hereby
acknowledges that DR Partners has pledged Donrey's Interest in the
Partnership under the following agreements: (i) the Amended and Restated
Credit Agreement among DR Partners, NationsBank and other banks dated as of
December 15, 1993; and (ii) the Senior Secured Note Purchase Agreement dated
as of December 15, 1993.
30
ARTICLE X
DISSOLUTION AND LIQUIDATION
10.1 DISSOLUTION.
(a) The Partnership shall be dissolved upon the first to
occur (each a "Dissolution Event"):
(i) December 31, 2048;
(ii) At any time after January 1, 2004, the election
by written notice to the other Partners by one or more Partners (the
"Electing Partner") to terminate the Partnership prior to December 31, 2048;
PROVIDED, HOWEVER, that such right may be exercised at any time in connection
with an Involuntary Transfer of a Partner's Interest or to the extent
required to effect compliance with the provisions of any indenture applicable
to publicly held indebtedness of a Partner; or
(iii) The occurrence of any other event specified under
the Delaware Uniform Partnership Law (6 Del. C. 1953, '1501 ET SEQ.) as one
effecting such dissolution.
(b) Notwithstanding the provisions of subsection (a)(ii)
above, a dissolution of the Partnership shall not occur if, within 10
business days of receipt of the written notice described in subsection
(a)(ii) above, both of the Partners other than the Partner who is the
Electing Partner provide written notice to the Electing Partner of their
election to continue the business of the Partnership and of their undertaking
to cause the Partnership to enter into a contract to redeem all of the
Interest in the Partnership of the Partner electing to terminate the
Partnership, in exchange for a distribution of cash equal to the
then-determined Fair Market Value of such Interest (net of any liabilities
allocable to such Interest) plus the amounts described in the second to last
sentence of this subsection within 2 years of the date the Fair Market Value
of such Interest is determined under this Section 10.1(b). Such Fair Market
Value shall be determined in accordance with the procedures set forth in
Section 9.5(a) through (f) above, PROVIDED, HOWEVER, that the period for
negotiation between the Partners set forth in Section 9.5(f)(ii) shall be 90
days. At the time such Fair Market Value is determined, the Interest of the
Electing Partner in the Partnership shall terminate and Electing Partner
shall be treated as a "retiring partner" for purposes of Code Section 736 and
the payment described in this Section 9.9(a) shall be treated as described in
Code Section 736(b). Upon the date of the determination of such Fair Market
Value, the Electing Partner's right to receive any distribution or allocation
of Profits from the Partnership under Section 4.2(b) shall convert
automatically into a first priority interest in the Profits of the
Partnership equal to the product of (x) the determined Fair Market Value of
such Interest and (y) LIBOR plus (I) 1 percent for the first 6-month period
following the date of determination of the Fair Market Value; (II) 2 percent
for the seventh through ninth months following the date of determination of
the Fair Market Value; (III) 3 percent for the tenth through twelfth months
following the date of determination of
31
the Fair Market Value; (IV) 4 percent for the thirteenth through fifteenth
months following the date of determination of the Fair Market Value; (V) 5
percent for the sixteenth through eighteenth months following the date of
determination of the Fair Market Value; (VI) 6 percent for the nineteenth
through twenty-first months following the date of determination of the Fair
Market Value; and (VII) 7 percent for the twenty-second through twenty-fourth
months following the date of determination of the Fair Market Value. The
payments described in this Section shall be treated as distributions of
partnership income as described in Code Section 736(a).
10.2 ELECTION TO CONTINUE THE BUSINESS. The Partnership shall also
not be dissolved pursuant to a Dissolution Event specified in Sections
10.1(a)(i) or (iii) (except as otherwise provided in the Act), if, within 20
business days of such Dissolution Event, all the remaining Partners
unanimously agree in writing to continue the business of the Partnership.
10.3 CLOSING OF AFFAIRS.
(a) In the event of the dissolution of the Partnership for
any reason, and in the absence of an election pursuant to Section 10.2 hereof
to continue the business of the Partnership, the Management Committee shall
commence to close the affairs of the Partnership, to liquidate or retain for
distribution to the Partners its investments and to terminate the
Partnership, in each instance in such manner as the Management Committee may
reasonably determine to be appropriate, provided, however, that no
distribution of any Partnership property shall be made to any of the Partners
(except for PRO RATA distributions) except upon the prior approval of all of
the Partners. Upon complete liquidation of the Partnership's property and
compliance with the distribution provisions set forth in Section 10.3(b)
hereof, the Partnership shall cease to be such, and the Management Committee
shall cause to be executed, acknowledged and filed all certificates necessary
to terminate the Partnership.
(b) In liquidating the Partnership, the assets of the
Partnership shall be applied to the extent permitted by the Act in the
following order of priority:
(i) FIRST, to pay the costs and expenses of the
closing of the affairs and liquidation of the Partnership;
(ii) SECOND, to pay the matured debts and liabilities
of the Partnership;
(iii) THIRD, to establish reserves adequate to meet any
and all contingent or unforeseen liabilities or obligations of the
Partnership, provided that at the expiration of such period of time as the
Management Committee may deem advisable, the
32
balance of such reserves remaining after the payment of such contingencies or
liabilities shall be distributed as hereinafter provided;
(iv) FOURTH, to all Partners in proportion to each
Partner's Percentage Interest in the Partnership, after taking appropriate
account of, and making appropriate adjustments for, (A) any Indebtedness then
remaining outstanding which is attributable to any Partnership assets
previously contributed by a particular partner, and (B) any portion of any
required capital contributions or accrued but unpaid interest described in
either Section 3.1(b) or 3.1(c) of this Agreement which then remains
outstanding (provided, however, that to the extent that any Partner has a
finally adjudicated indemnity obligation to any other Partner, any
distribution that would otherwise be distributed to the partner subject to
such obligation shall be distributed to the Partner entitled to the benefit
of the indemnity obligation to the extent thereof).
(c) No Partner shall have any obligation to restore a
deficit balance in its Capital Account.
ARTICLE XI
AMENDMENT TO AGREEMENT
Amendments to this Agreement and to the Certificate of Formation of
the Partnership shall be approved in writing by all of the Partners. An
amendment shall become effective as of the date specified in the Partners'
approval or if none is specified as of the date of such approval or as
otherwise provided in the Act.
ARTICLE XII
INDEMNIFICATION
12.1 GENERAL. From and after the Closing, the Partners shall
indemnify each other as provided in this Article XII. As used in this
Agreement, the term "DAMAGES" shall mean all liabilities, demands, claims,
actions or causes of action, regulatory, legislative or judicial proceedings
or investigations, assessments, levies, losses (including, without
limitation, any adverse tax consequences to other parties arising directly or
indirectly from a violation of a covenant in this Agreement by a party),
fines, penalties, damages, costs and expenses, including, without limitation:
reasonable attorneys', accountants', investigators', and experts' fees and
expenses sustained or incurred in connection with the defense or
investigation of any such claim.
12.2 INDEMNIFICATION OBLIGATIONS. Notwithstanding any other
provision of this Agreement, each party (an "INDEMNIFYING PARTY") shall
defend, indemnify, save and keep harmless the other Partners, the Partnership
and their respective successors and permitted
33
assigns (collectively, the "INDEMNIFIED PARTIES") against and from any and
all Damages sustained or incurred by any of them resulting from or arising
out of or by virtue of:
(a) any breach of any representation or warranty made by the
Indemnifying Party in this Agreement or in any closing document delivered to
the Indemnified Parties in connection with this Agreement;
(b) any breach by the Indemnifying Party of, or failure by
the Indemnifying Party to comply with, any of its covenants or obligations
under this Agreement (including, without limitation, their obligations under
this Article XII); or
(c) any indemnification obligation of such party or any
affiliate thereof arising under the provisions of Article XI of the
Contribution Agreement.
In no event, however, shall any party be liable to indemnify the other
parties with respect to any breach of which such other Partner(s) had actual
knowledge prior to the Closing.
Any indemnification obligation arising under this Article XII and/or
Article X of the Contribution Agreement shall be discharged by a capital
contribution by the Partner owing such obligation to the Partnership in the
amount of the Damages relating thereto. Any payment by the Partnership of
Damages to which an indemnification obligation relates shall be charged as a
distribution to the Indemnifying Partner and taken into account for purposes
of current and future distributions made by the Partnership pursuant to
Section 5.1. In addition, no item of Partnership property shall be revalued
to reflect such indemnification payment. From the date of determination of
such obligation (which shall be the date agreed by the parties or the date of
a final binding determination by a mediator or the date of a final,
non-appealable determination by a court of competent jurisdiction, as
applicable) and until such obligation (and all accrued interest, if any, with
respect thereto) has been paid in full in cash or other immediately available
funds, all cash distributions to which a Partner shall otherwise be entitled
to receive pursuant to Section 5.1(a) hereof, shall instead be retained by
the Partnership and credited to the discharge of such obligations and accrued
interest. Any amounts so retained shall be treated as distributed to such
Partners and, first paid to the Partnership in the amount of the accrued
interest and, second, with respect to the remainder thereof, contributed to
the Partnership as an Additional Capital Contribution on behalf of the
Partner owing such obligation.
12.3 EXCLUSIVE REMEDY. The sole and exclusive remedy of Indemnified
Parties with respect to any and all claims relating to the subject matter of
this Agreement shall be pursuant to the indemnification provisions set forth
in this Article XII.
12.4 THIRD PARTY CLAIMS. Promptly following the receipt of notice of
any claim for Damages or for equitable relief which are asserted or threatened
by a party other than the
34
parties hereto, their successors or permitted assigns (a "THIRD PARTY
CLAIM"), the party receiving the notice of the Third Party Claim shall (a)
notify the other Partners in writing in accordance with Section 13.2 hereof
of its existence setting forth with reasonable specificity the facts and
circumstances of which such party has received notice and (b) if the party
giving such notice is an Indemnified Party, specifying the basis hereunder
upon which the Indemnified Party's claim for indemnification is asserted. No
failure to give notice of a claim shall affect the indemnification
obligations of the Indemnifying Party hereunder, except to the extent that
the Indemnifying Party can demonstrate that such failure materially
prejudiced such Indemnifying Party's ability to successfully defend the
matter giving rise to the claim. The Indemnified Party shall tender the
defense of a Third Party Claim to the Indemnifying Party.
The Indemnified Party shall not have the right to defend or settle
such Third Party Claim. The Indemnified Party shall have the right to be
represented by counsel at its own expense in any such contest, defense,
litigation or settlement conducted by the Indemnifying Party. The
Indemnifying Party shall lose its right to defend and settle the Third Party
Claim if it shall fail to diligently contest the Third Party Claim. So long
as the Indemnifying Party has not lost its right and/or obligation to defend
and settle as herein provided, the Indemnifying Party shall have the right to
contest, defend and litigate the Third Party Claim and shall have the right,
in its discretion exercised in good faith, and upon the advice of counsel, to
settle any such matter, either before or after the initiation of litigation,
at such time and upon such terms as it deems fair and reasonable; provided
that in any event the Indemnifying Party shall consult with the Indemnified
Party with respect to settling such matter which decision shall be made by
mutual agreement of the Indemnifying Party and the Indemnified Party, not to
be unreasonably withheld by either. All expenses (including without
limitation attorneys' fees) incurred by the Indemnifying Party in connection
with the foregoing shall be paid by the Indemnifying Party. Notwithstanding
the foregoing, in connection with any settlement negotiated by an
Indemnifying Party, no Indemnified Party shall be required by an Indemnifying
Party to (w) enter into any settlement that does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
litigation, (x) enter into any settlement that attributes by its terms
liability to the Indemnified Party, (y) consent to the entry of any judgment
that does not include as a term thereof a full dismissal of the litigation or
proceeding with prejudice or (z) enter into any settlement which would, or
could reasonably be expected to, result in or relate to either a material
nonmonetary obligation or restriction of any kind whatsoever being imposed
upon the Indemnified Party or Damages other than Damages which are
indemnifiable under this Article XII; PROVIDED, HOWEVER, that the
Indemnifying Party may enter into the settlements described in (w) and (y)
above if (1) such settlement is not in any way materially damaging or harmful
to the Partnership's business or the Indemnified Parties, as the case may be,
and (2) the Indemnifying Party agrees to remain liable to the Indemnified
Party for indemnification with respect to such claim indefinitely thereafter.
No failure by an Indemnifying Party to acknowledge in writing its
indemnification obligations under this Article XII shall relieve it of such
obligations to the extent they exist. If an Indemnified Party is entitled to
indemnification against a Third Party Claim, and the
35
Indemnifying Party fails to accept the defense of a Third Party Claim
tendered pursuant to this Section 12.4, or if, in accordance with the
foregoing, the Indemnifying Party shall lose its right to contest, defend,
litigate and settle such a Third Party Claim; provided that the Indemnifying
Party shall be entitled to participate, at its expense, with counsel of its
choice, and any settlement shall be approved by the Indemnifying Party, such
approval not to be unreasonably withheld, the Indemnified Party shall have
the right, without prejudice to its right of indemnification hereunder, in
its discretion exercised in good faith and upon the advice of counsel, to
contest, defend and litigate such Third Party Claim, and subject to the
preceding sentence may settle such Third Party Claim, either before or after
the initiation of litigation. If, pursuant to this Section 12.4, the
Indemnified Party so defends or (except as hereinafter provided) settles a
Third Party Claim, for which it is entitled to indemnification hereunder, as
hereinabove provided, the Indemnified Party shall be reimbursed by the
Indemnifying Party for the reasonable attorneys' fees and other expenses of
defending the Third Party Claim which is incurred from time to time,
forthwith following the presentation to the Indemnifying Party of itemized
bills for said attorneys' fees and other expenses.
12.5 OTHER INDEMNIFICATION CLAIMS. The Indemnified Party shall give
the Indemnifying Party prompt notice of any Indemnification Claim (other than
a Third Party Claim) specifying the basis hereunder upon which the
Indemnified Party's claim for indemnification is asserted. No failure to
give notice of a claim shall affect the indemnification obligations of the
Indemnifying Party hereunder, except to the extent that the Indemnifying
Party can demonstrate that such failure materially prejudiced such
Indemnifying Party's ability to successfully defend or otherwise respond to
the matter giving rise to the claim. In respect of any Indemnification Claim
other than a Third Party Claim, the Partnership shall provide the
Indemnifying Party with the opportunity and all appropriate access to the
applicable facilities, personnel, books and records to conduct (under the
Indemnifying Party's control) necessary to respond to such Indemnification
Claim.
ARTICLE XIII
GENERAL PROVISIONS
13.1 MEDIATION. Each Partner agrees that, in the event of any
dispute among such Partners regarding the interpretation or application of
this Agreement (including any dispute regarding the operation of the
Partnership that cannot be resolved by the procedures created by the
provisions of this Agreement), it will follow the following procedures:
(a) it will give each other Partner written notice of the
matter in dispute;
(b) it will negotiate reasonably and in good faith with the
other Partners in order to resolve such dispute for a period of not less than
fifteen (15) business days following receipt of the notice in (a);
36
(c) if the dispute has not been resolved by negotiation
pursuant to (b), it will cooperate with the other Partners to submit the
dispute to an independent mediator (to be selected by the unanimous consent
of the Partners, which shall only be withheld on the basis of good faith
concerns about the independence or adequacy of expertise of the proposed
mediator) who shall have ten (10) business days after the matter is fully
submitted to him or her to propose a settlement of the dispute;
(d) if any Partner refuses, in its sole and unreviewable
discretion to accept the proposed resolution of the mediator, it shall give
prompt written notice of such refusal to the other Partners and, at any time
following receipt of any such notice, any Partner shall be free to pursue any
legal, equitable or other remedies available to it regarding the matter in
dispute.
Notwithstanding the foregoing, no Partner shall be required to pursue
the notice, negotiation or mediation steps set forth above if it determines,
reasonably and in good faith, the delay involved in such procedure would
cause irreparable, material harm to it or its interest in the Partnership.
13.2 NOTICES. Unless otherwise specifically provided in this
Agreement, all notices and other communications required or permitted to be
given hereunder shall be in writing, directed or addressed to the respective
addresses set forth in Schedule 13.2 attached hereto, and shall be either (i)
delivered by hand, (ii) delivered by a nationally recognized commercial
overnight delivery service, (iii) mailed postage prepaid by registered or
certified mail, or (iv) transmitted by facsimile, with receipt confirmed.
Such notices shall be effective: (a) in the case of hand deliveries when
received; (b) in the case of an overnight delivery service, when received in
accordance with the records of such delivery service; (c) in the case of
registered or certified mail, upon the date received by the addressee as
determined by the U.S. Postal Service; and (d) in the case of facsimile
notices, when electronic indication of receipt is received. Any party may
change its address and telecopy number by written notice to the other parties
given in accordance with this Section 13.2.
13.3 CONFIDENTIALITY. Each of the Partners agrees that, except as
required by law, legal process, government regulators, or as reasonably
necessary for performance of its obligations or enforcement of its rights
under this Agreement, without the prior written consent of the other
Partners, it will treat and hold as confidential (and not disclose or provide
access to any person other than such Partner's attorneys or accountants) and
it will cause its Affiliates, officers, managers, partners, employees and
agents to treat and hold as confidential (and not divulge or provide access
to any person) all information relating to (i) the business of the
Partnership and (ii) any patents, inventions, designs, know-how, trade
secrets or other intellectual property relating to the Partnership, in each
case excluding (A) information in the public domain when received by such
Partner or thereafter in the public domain through sources other than such
Partner, (B) information
37
lawfully received by such Partner from a third party not subject to a
confidentiality obligation and (C) information developed independently by
such Partner. The obligations of the Partners hereunder shall not apply to
the extent that the disclosure of information otherwise determined to be
confidential is required by applicable law, provided, however, that prior to
disclosing such confidential information to any party other than a
governmental agency exercising its ordinary regulatory oversight of a
Partner, a Partner shall notify the Partnership thereof, which notice shall
include the basis upon which such Partner believes the information is
required to be disclosed. This Section 13.3 shall survive for a period of
four years with respect to any Partner that withdraws from the Partnership
and, with respect to any dissolution or termination of the Partnership
pursuant to Article X hereof, for a period of time agreed by the all of
Partners.
13.4 ENTIRE AGREEMENT, ETC. This Agreement, together with the
Contribution Agreement, constitutes the entire agreement among all of the
parties hereto relating to the subject matter hereof and supersedes all prior
contracts, agreements and understandings among all of them, except for such
agreements that may make specific reference to this provision. No course of
prior dealings among all of the parties shall be relevant to supplement or
explain any term used in the Agreement. Acceptance or acquiescence in a
course of performance rendered under this Agreement shall not be relevant to
determine the meaning of this Agreement even though the accepting or the
acquiescing party has knowledge of the nature of the performance and an
opportunity for objection. All waivers, amendments and modifications of this
Agreement must be in writing, executed by a duly authorized officer of the
party against whom enforcement of any waiver, modification or consent is
sought. No waiver of any terms or conditions of this Agreement in one
instance shall operate as a waiver of any other term or condition or as a
waiver in any other instance.
13.5 CONSTRUCTION PRINCIPLES. As used in this Agreement words in
any gender shall be deemed to include all other genders. The singular shall
be deemed to include the plural and vice versa. The captions and article and
section headings in this Agreement are inserted for convenience of reference
only and are not intended to have significance for the interpretation of or
construction of the provisions of this Agreement.
13.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts by the parties hereto, each of which when so executed will be an
original, but all of which together will constitute one and the same
instrument.
13.7 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, such provision shall be ineffective
to the extent of such invalidity or unenforceability; provided, however, that
the remaining provisions will continue in full force without being impaired
or invalidated in any way unless such invalid or unenforceable provision or
clause shall be so significant as to materially affect the parties'
38
expectations regarding this Agreement. Otherwise, the parties hereto agree
to replace any invalid or unenforceable provision with a valid provision
which most closely approximates the intent and economic effect of the invalid
or unenforceable provision.
13.8 EXPENSES. The Initial Partners each agree to bear their own
costs for all matters involved in the negotiation, execution and performance
of this Agreement and related transactions unless otherwise specified herein.
13.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
transactions taking place wholly within Delaware between Delaware residents.
13.10 BINDING EFFECT. Subject to the provisions of this Agreement
relating to transferability, this Agreement shall be binding upon, and inure
to the benefit of, the Partners and their respective permitted distributees,
heirs, successors and assigns.
13.11 ADDITIONAL DOCUMENTS AND ACTS. Each Partner agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions, and conditions of this Agreement
and of the transactions contemplated hereby.
13.12 NO THIRD PARTY BENEFICIARY. This Agreement is made solely for
the benefit of the parties hereto and their permitted distributees, heirs,
successors and assigns and no other person shall have any rights, interest,
or claims hereunder or otherwise be entitled to any benefits under or on
account of this Agreement as a third party beneficiary or otherwise.
13.13 FORMATION OF SUBSIDIARY LIMITED PARTNERSHIP. Concurrently with
the formation of the Partnership, the Partners shall cause the Partnership to
contribute (by such means as the Partnership may deem appropriate) all of the
Partnership's assets and liabilities relating to the business and assets of
the newspapers listed on Exhibit 1 to this Agreement to a new California
limited partnership to be established among the Partnership, Donrey and West
Coast MediaNews, pursuant to a limited partnership agreement in form and
substance acceptable to each of the Partners (the "Limited Partnership, and
the "Limited Partnership Agreement"). In exchange for (i) its contribution
of such assets and liabilities to the Limited Partnership and (ii) its
undertaking to guarantee the discharge/performance of all of the liabilities
and obligations of the Limited Partnership, the Partnership shall receive a
Limited Partner interest in such Limited Partnership equal to 99.99% of all
the partnership interests in the Limited Partnership. In exchange for cash
equal to .005% of
39
the net value of the assets and liabilities transferred to the Limited
Partnership, each of Donrey and West Coast MediaNews shall receive a general
partnership interest in the Limited Partnership, equal to .05% of the total
partnership interests in the Limited Partnership. Under the Limited
Partnership Agreement the Partners contemplate that the rights of the Limited
Partner shall not include any right which would in Gannett's judgment cause
the Federal Communications Commission (the "FCC") to conclude that the
Limited Partner is not sufficiently insulated from being able to exert
influence over the media business of the Limited Partnership to preclude
ownership of such business being attributed to the Limited Partner; provided,
however that the Partners agree to reform the Limited Partnership in the
event that FCC rules would permit the Partners to own the newspapers in such
a structure but would not permit ownership (without disposition of a
business) in the General Partnership structure.
40
IN WITNESS WHEREOF, each Partner has duly executed this Agreement as
of this 31st day of March, 1999.
West Coast MediaNews LLC
By: ______________________
Name:
Title:
Donrey Newspapers, LLC
By: ______________________
Name:
Title:
The Sun Company of
San Bernardino, California
By: ______________________
Name:
Title:
Media West - SBC, Inc.
By: ______________________
Name:
Title:
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