THIRD AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
MEDIA GENERAL, INC.
MEDIANEWS GROUP, INC.
DENVER NEWSPAPERS, INC.
JUNE 30, 1999
TABLE OF CONTENTS
PAGE
Table of Contents.................................................... i
LIST OF EXHIBITS..................................................... iv
1. SALE OR TRANSFER OF STOCK........................................ 3
1.01 Additional Securities................................. 3
1.02 Restrictions.......................................... 4
1.03 Permitted Transfers................................... 4
1.04 Transferees Bound..................................... 5
1.05 Termination of Restrictions........................... 6
2. ANI'S AND THE COMPANY'S RIGHT OF FIRST PURCHASE IN CONNECTION WITH
PROPOSED PUBLIC OFFERINGS AND RULE 144 SALES BY CLASS
A SHAREHOLDERS................................................. 7
2.01 Proposed Public Offerings by Class A Shareholders..... 7
2.02 Proposed Rule 144 Sales by the Class A Shareholders... 8
3. SHAREHOLDER'S OPTION TO PURCHASE COMMON STOCK; DRAG-ALONG
AND TAG-ALONG RIGHTS........................................... 10
3.01 Option to Purchase.................................... 10
3.02 Required Notice....................................... 11
3.03 Exercise and Scope of Exercise........................ 12
3.04 Bona Fide Non-Cash Third Party Offers................. 13
3.05 Failure To Exercise................................... 14
3.06 Drag-Along Rights..................................... 15
3.07 Tag-Along Rights...................................... 17
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TABLE OF CONTENTS
PAGE
3.08 Payment of Purchase Price and Closing of the Transfer
of Shares of Common Stock........................... 19
4. PUT AND CALL OPTIONS............................................. 20
4.01 Put Option............................................ 20
4.02 Put Option Term....................................... 20
4.03 Call Option........................................... 20
4.04 Call Option Term...................................... 21
4.05 Determination of Put/Call Purchase Price.............. 21
4.06 Put Option Closing.................................... 22
4.07 Deferral of the Put Option Closing.................... 23
5. RESTRICTIVE LEGEND............................................... 24
5.01 Form of Legend........................................ 24
5.02 Removal of Legend..................................... 24
6. GENERAL COVENANTS................................................ 25
6.01 Applicability of Covenants............................ 25
6.02 Affirmative Covenants................................. 26
6.03 Governance Rights..................................... 31
7. PREEMPTIVE RIGHTS................................................ 38
8. MISCELLANEOUS.................................................... 40
8.01 Indemnification....................................... 40
8.02 Notices............................................... 40
8.03 Entire Agreement...................................... 42
8.04 Successors and Assigns................................ 42
8.05 Brokers and Expenses.................................. 42
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TABLE OF CONTENTS
PAGE
8.06 Waivers............................................... 43
8.07 Announcement.......................................... 43
8.08 Captions and Pronouns................................. 44
8.09 Choice of Law......................................... 44
8.10 Registration Rights................................... 44
8.11 Facsimile Signatures; Counterparts.................... 44
8.12 Equitable Relief...................................... 44
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TABLE OF CONTENTS
PAGE
EXHIBITS
EXHIBIT A - Registration Rights.................................
EXHIBIT B - Preliminary Budget..................................
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THIRD AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
This Third Amended and Restated Shareholders' Agreement
(this "AGREEMENT") is made as of this 30th day of June, 1999, by and among
Media General, Inc., a Virginia corporation ("MEDIA GENERAL"), MediaNews
Group, Inc., a Delaware corporation ("ANI"), and Denver Newspapers, Inc., a
Delaware corporation (the "COMPANY"), amending and restating the Second
Amended and Restated Stock and Warrant Purchase and Shareholders' Agreement,
dated May 20, 1994 (the "SECOND SHAREHOLDERS' AGREEMENT"), among Media
General, ANI and the Company. (Media General, ANI and the Company are
sometimes collectively referred to herein as the "PARTIES", and Media General
and ANI are sometimes individually referred to herein as a "SHAREHOLDER" and
collectively as the "SHAREHOLDERS" and the holders of the Class A Common
Stock (as hereafter defined) (other than those to whom shares of Class A
Common Stock are Transferred (as defined below) pursuant to Section 1.03(e))
are sometimes individually referred to herein as a "CLASS A SHAREHOLDER" and
collectively as the "CLASS A SHAREHOLDERS"). Following the Contribution (as
defined below), Garden State Newspapers, Inc., a Delaware corporation
("Garden State"), will succeed to ANI's rights and obligations hereunder and
all references to ANI herein will be deemed to be references to Garden State
(unless the context requires otherwise).
WHEREAS, pursuant to that certain Stock Purchase Agreement,
dated as of June 30, 1999 (the "STOCK PURCHASE AGREEMENT"), between Media
General and ANI, Media General will sell to ANI and ANI will purchase from
Media General, twenty (20) shares of Class A common stock, par value $1.00
per share, of the Company (the "CLASS A COMMON STOCK")
owned by Media General, which, in accordance with the Second Amended and
Restated Certificate of Incorporation of the Company, will immediately be
converted, on a share for share basis, into shares of Class B common stock,
par value $1.00 per share, of the Company ("CLASS B COMMON STOCK");
WHEREAS, Media General will continue to own twenty (20)
shares of Class A Common Stock, which shares will comprise all of the
remaining issued and outstanding shares of Class A Common Stock of the
Company on such date (the Class A Common Stock and the Class B Common Stock
are sometimes collectively referred to herein as the "COMMON STOCK");
WHEREAS, concurrently with the closing under the Stock
Purchase Agreement (the "CLOSING"), the Shareholders amended and restated the
Second Amended and Restated Certificate of Incorporation of the Company (as
so amended and restated and as may be further amended and restated from time
to time, the "CERTIFICATE OF INCORPORATION"), and amended and restated the
Restated Bylaws of the Company (as so amended and restated and as may be
further amended and restated from time to time, the "BYLAWS");
WHEREAS, it is contemplated that ANI will Transfer (as
defined below) its shares of Common Stock to Garden State, a wholly-owned
subsidiary of ANI (the "Contribution"), whereupon Garden State will succeed
to ANI's rights and obligations hereunder, and that subsequent to such
Transfer Garden State will merge with ANI (the "ANI MERGER");
WHEREAS, as soon after the Closing as is practicable, it is
contemplated that The Denver Post Corporation, a Colorado corporation and a
wholly-owned subsidiary of the Company ("THE DENVER POST"), will merge with
and into the Company, with the Company being the surviving corporation;
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WHEREAS, contemporaneously with the execution and delivery
of this Agreement, ANI, Media General and the Company are entering into a Tax
Sharing Agreement (the "TAX SHARING AGREEMENT"); and
WHEREAS, in consideration of the consummation of the
transactions contemplated by the Stock Purchase Agreement, ANI, Media General
and the Company wish to amend and restate the Second Shareholders' Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, the parties hereto mutually agree to amend
and restate the Second Shareholders' Agreement to read in full as set forth
herein:
1. SALE OR TRANSFER OF STOCK
1.01 ADDITIONAL SECURITIES. The Parties hereby agree that,
except as provided in the Registration Rights, attached as Exhibit A to this
Agreement (the "REGISTRATION RIGHTS"), and other than for (i) the issuance of
shares of Class B Common Stock solely in exchange for Class A Common Stock,
on a share for share basis, as authorized by the Certificate of
Incorporation, and (ii) the issuance of securities or obligations authorized
by the Board of Directors of the Company in the manner provided by Section
6.03(b) hereof, the Company shall not hereafter issue or create and shall not
permit any subsidiary of the Company to issue or create, equity securities of
the Company or any subsidiary or securities convertible into equity
securities of the Company or any subsidiary, or incur any obligation to issue
additional equity securities or securities convertible into equity securities
of the Company or any subsidiary of the Company.
1.02 RESTRICTIONS. No Shareholder shall sell, transfer,
assign, pledge, give away or otherwise dispose of, alienate, or encumber in
any manner any interest in any shares of any class, now or hereafter
authorized of the Common Stock (each, a "TRANSFER") owned from time to
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time by such Shareholder except (i) with the prior written consent of the
other Parties, which may be granted or withheld in the sole and absolute
discretion of such other Parties, or (ii) as authorized by Section 1.03
hereof. Any attempt to Transfer any of shares of Common Stock in violation of
this Agreement shall be void and of no effect and shall not be recognized or
recorded in the stock transfer books of the Company.
1.03 PERMITTED TRANSFERS. The following Transfers of shares
of Common Stock are permitted:
(a) ANI may Transfer shares of Common Stock to Garden
State and Garden State may transfer shares of Common Stock to MediaNews
Group, Inc. in the ANI Merger.
(b) Media General may Transfer shares of Common Stock
to any business entity controlled (directly or indirectly) by Media General
or the D. Xxxxxxx Xxxxx Media General Trust or any beneficiaries thereof.
(c) ANI may Transfer shares of Common Stock to Media
General and Media General may Transfer shares of Common Stock to ANI.
(d) Subject to its having complied with the provisions
of Article 3 hereof (to the extent applicable), any Shareholder may Transfer
shares of Common Stock to third parties (other than in public offerings or
pursuant to Rule 144 under the Securities Act (as defined below)).
(e) Subject to its having complied with the provisions
of Article 2 hereof, any Class A Shareholder may Transfer shares of Common
Stock to third parties in a public offering registered under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), or
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(following an initial public offering by the Company) pursuant to Rule 144
under the Securities Act.
(f) ANI may Transfer shares of Common Stock to third
parties in a public offering registered under the Securities Act, or
(following an initial public offering by the Company) pursuant to Rule 144
under the Securities Act.
(g) ANI may pledge and grant security interests, liens
and other encumbrances on shares of the Common Stock in order to secure the
obligations of itself and its affiliates (including the Company and its
subsidiaries) under and in respect of indebtedness of ANI and its affiliates
(including the Company and its subsidiaries) to unaffiliated third party bank
lenders ("BANK LENDERS") and agreements and instruments governing such
indebtedness with such Bank Lenders ("BANK DOCUMENTS"). In the event the Bank
Lenders of such debt (or their agents) foreclose on such shares (or otherwise
acquires such shares pursuant to the exercise of its remedies under the Bank
Documents), they (and all of their subsequent transferees) shall take such
shares free of the terms, conditions and restrictions (as well as any options
and rights ) set forth in this Agreement, but, notwithstanding Section 1.05
hereof, and without limitation of ANI's right to assign its rights
thereunder, ANI shall continue to be bound by its obligations under Sections
4.01, 4.02, 4.05, 4.06 and 4.07 of this Agreement.
1.04 TRANSFEREES BOUND. All transferees of shares of Common
Stock permitted by Section 1.03 (other than a Transfer permitted by Sections
1.03(e), 1.03(f) or 1.03(g)) shall take such shares subject to all of the
terms, conditions and restrictions set forth in this Agreement, and shall be
entitled to such rights and benefits under this Agreement as its transferor
shall have transferred to it, PROVIDED that in the case of a Transfer by
Media General (or any other Class A Shareholder) (x) to a transferee other
than ANI and its affiliates (or other than as
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permitted pursuant to Section 1.03(e)), the Call Option and the Put Option
(each as defined in Article 4 below) shall under all circumstances bind the
transferees or (y) to ANI and its affiliates, the rights, benefits and
obligations hereunder in respect of such shares shall not be retained by
Media General (or such Class A Shareholder) and (ii) it shall be a condition
to the effectiveness of each such Transfer that the transferee execute an
instrument in form and substance reasonably satisfactory to the Shareholders
by which it agrees to become a party to this Agreement (and be bound by such
terms, conditions and restrictions as if it were the transferring
Shareholder). Any right or benefit afforded Class A Shareholders hereunder
will not extend to Class A Shareholders who receive their shares in a
Transfer described in Section 1.03(e). Transferees in Transfers permitted by
Section 1.03(e), 1.03(f) or 1.03(g) shall take such shares of Common Stock
free of the terms, conditions and restrictions set forth in this Agreement.
In the event that a third-party holder of shares of Common Stock shall become
a party hereto, the Parties shall amend this Agreement so that the terms,
conditions and restrictions set forth herein apply to the new party MUTATIS
MUTANDIS.
1.05 TERMINATION OF RESTRICTIONS. The rights, obligations
and restrictions of this Agreement shall terminate as to any Shareholder at
such time as such Shareholder no longer holds any Common Stock; PROVIDED,
that (x) such Shareholder shall not be released from (and shall remain
responsible for) all obligations accrued and any liability in respect of any
breach of this Agreement occurring prior to such time, (y) indemnification
rights and obligations in respect of the Registration Rights will survive in
respect of registrations theretofore effected and (z) without limitation of
ANI's right to assign its rights thereunder, ANI shall not be released from
its obligations under Sections 4.01, 4.02, 4.05, 4.06 and 4.07 of this
Agreement if it ceases to be a Shareholder.
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2. ANI'S AND THE COMPANY'S RIGHT OF FIRST PURCHASE IN
CONNECTION WITH PROPOSED PUBLIC OFFERINGS AND RULE 144
SALES BY CLASS A SHAREHOLDERS
2.01 PROPOSED PUBLIC OFFERINGS BY CLASS A SHAREHOLDERS. If
a Class A Shareholders desires to sell any of its Common Stock in a public
offering to be registered under the Securities Act (a "PUBLIC OFFERING
SHAREHOLDER"), it shall deliver to ANI and the Company written notice of such
desire (a "NOTICE OF PROPOSED PUBLIC OFFERING"), describing the Common Stock
proposed to be sold in such offering (the "PUBLICLY OFFERED SHARES"), the
proposed effective date, and the proposed price per share of such public
offering (the "PROPOSED OFFERING PRICE"). The Notice of Proposed Public
Offering shall constitute an option for first ANI and then the Company, to
purchase all, but not less than all, of the Publicly Offered Shares at the
Proposed Offering Price, payable in cash. Exercise of such option shall be
made by ANI or the Company, as the case may be, giving written notice of such
exercise (the "PUBLIC OFFERING EXERCISE NOTICE") to the Public Offering
Shareholder not more than thirty (30) days after receipt of the Notice of
Proposed Public Offering. Such Public Offering Exercise Notice shall set
forth a closing date, which shall be not less than ten (10) nor more than
ninety (90) days after the date of the Public Offering Exercise Notice. If no
Public Offering Exercise Notice is timely given or the Public Offering
Exercise Notice is given with respect to less than all of the Publicly
Offered Shares to which the Notice of Proposed Public Offering relates, the
Public Offering Shareholder may, at any time within six months immediately
following the later of (i) the date the registration statement in respect of
such public offering is declared effective by the Securities and Exchange
Commission (the "SEC") or (ii) the expiration of the period during which the
Public Offering Exercise Notice could be given (or such prior date as ANI and
the Company shall in writing advise the Public Offering Shareholder of their
election not to exercise the right of first purchase
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set forth in this Section 2.01), sell the Publicly Offered Shares in a public
offering registered under the Securities Act; PROVIDED, HOWEVER, that (y) any
such public offering shall be at a price per share or other unit not less
than 90% of the Proposed Offering Price, and (z) if such price (the "PUBLIC
OFFERING REVISED PRICE") shall be less than 90% of the Proposed Offering
Price, then the Public Offering Shareholder shall deliver to ANI and the
Company written notice of such Public Offering Revised Price (the "NOTICE OF
PUBLIC OFFERING REVISED PRICE"), the Public Offering Shareholder shall not
sell the Publicly Offered Shares until the 10-day period described in the
next sentence has expired (without ANI having exercised the option described
in the next sentence), and this proviso shall apply to any such sale (for
which purpose the Proposed Offering Price shall be the Public Offering
Revised Price). The Notice of Public Offering Revised Price shall constitute
an option for first ANI and then the Company, to purchase all, but not less
than all, of the Publicly Offered Shares subject to such Notice of Proposed
Public Offering at a price equal to 110% of the Public Offering Revised
Price, payable in cash, which option may be exercised only during the 10-day
period beginning on the day after receipt by ANI and the Company of the
Notice of Public Offering Revised Price from the Public Offering Shareholder.
2.02 PROPOSED RULE 144 SALES BY THE CLASS A SHAREHOLDERS.
If following an initial public offering by the Company, a Class A Shareholder
desires to sell any of its Common Stock pursuant to Rule 144 under the
Securities Act (a "144 SHAREHOLDER"), it shall deliver to ANI and the Company
written notice of such desire (a "NOTICE OF PROPOSED 144 SALE"), describing
the Common Stock proposed to be sold in such offering (the "OFFERED 144
SHARES") and the proposed purchase price per share of the Offered 144 Shares
(the "PROPOSED SALE PRICE"). The Notice of Proposed 144 Sale shall constitute
an option for first ANI and then the Company, to purchase all, but not less
than all, of the Offered 144 Shares at the Proposed Sale Price,
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payable in cash. Exercise of such option shall be made by ANI or the Company,
as the case may be, giving written notice of such exercise (the "144 EXERCISE
NOTICE") to the 144 Shareholder not more than thirty (30) days after receipt
of the Notice of Proposed 144 Sale. Such 144 Exercise Notice shall set forth
a closing date, which shall be not less than ten (10) nor more than ninety
(90) days after the date of the 144 Exercise Notice. If no 144 Exercise
Notice is timely given or the 144 Exercise Notice is given with respect to
less than all of the Offered 144 Shares to which the 144 Exercise Notice
relates, the 144 Shareholder may, at any time within thirty (30) days
immediately following the expiration of the period during which the 144
Exercise Notice could be given (or such prior date as ANI and the Company
shall in writing advise the 144 Shareholder of their election not to exercise
the right of first purchase set forth in this Section 2.02), sell the Offered
144 Shares pursuant to Rule 144; PROVIDED, HOWEVER, that (y) any such sale
shall be for a price per share or other unit not less than 90% of the
Proposed Sale Price, and (z) if such price (the "144 REVISED PRICE") shall be
less than 90% of the Proposed Sale Price, then the 144 Shareholder shall
deliver to ANI and the Company written notice of such 144 Revised Price (the
"NOTICE OF 144 REVISED PRICE"), the 144 Shareholder shall not sell the
Offered 144 Shares until the 10-day period described in the next sentence has
expired (without ANI having exercised the option described in the next
sentence) and this proviso shall apply to any such sale (for which purpose
the Proposed Sale Price shall be the 144 Revised Price). The Notice of 144
Revised Price shall constitute an option for first ANI and then the Company,
to purchase all, but not less than all, of the Offered 144 Shares subject to
such Notice of Proposed 144 Sale at a price equal to 110% of the 144 Revised
Price, payable in cash, which option may be exercised only during the
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10-day period beginning on the day after receipt by ANI and the Company of
the Notice of 144 Revised Price from the 144 Shareholder.
3. SHAREHOLDER'S OPTION TO PURCHASE COMMON STOCK;
DRAG-ALONG AND TAG-ALONG RIGHTS
3.01 OPTION TO PURCHASE. Except as otherwise expressly
authorized pursuant to Section 1.03, should any Shareholder desire to
Transfer all or any part of such Shareholder's Common Stock (in such context,
the "SELLING SHAREHOLDER") to a third-party transferee, whether the Selling
Shareholder desires to initiate a disposition or is responding affirmatively
to an offer to purchase, before doing so the Selling Shareholder shall first
permit ANI (in the case of a Transfer by Class A Shareholders) or the Class A
Shareholders (in the case of a Transfer by ANI) (in such context, the
"REMAINING SHAREHOLDERS") to exercise a first option to purchase (the "FIRST
PURCHASE OPTION") the shares of Common Stock which the Selling Shareholder
desires to Transfer, in accordance with the provisions of this Article 3.
Nothing in this Agreement shall be deemed to restrict or prohibit a
Shareholder from soliciting third parties to purchase its Common Stock prior
to offering the same to the Remaining Shareholders, but no sale to a third
party may be consummated until such Common Stock has been offered to the
Remaining Shareholders in accordance with this Article 3 and any such sale to
a third-party pursuant to this Section 3.01 will be subject to the Tag-Along
Rights and (to the extent applicable) Drag-Along Rights described in Sections
3.06 and 3.07. Upon delivery of the First Right of Purchase Notice (as
defined below) by a Selling Shareholder other than ANI, ANI's right to
exercise its Drag-Along Rights in respect of the shares of Common Stock
subject to such First Right of Purchase Notice and any shares of Common Stock
in respect of which (in connection with the Transfer described in such First
Right of Purchase Notice) any Remaining Shareholder exercises its tag-along
rights in accordance with
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Section 3.07 (except in respect of a Transfer described in a First Right of
Purchase Notice delivered by ANI prior to the delivery of such First Right of
Purchase Notice by such Selling Shareholder) shall be stayed until the
earlier of (x) the consummation of the Transfer of such shares of Common
Stock pursuant to the First Purchase Option or the consummation of the
Transfer described in such First Right of Purchase Notice and (y) the
expiration of the 90-day period specified in Section 3.05.
3.02 REQUIRED NOTICE.
(a) Upon deciding to Transfer all or any part of its
Common Stock, whether the Selling Shareholder desires to initiate a
disposition or is responding affirmatively to an offer to purchase, except as
otherwise expressly authorized pursuant to Section 1.03, the Selling
Shareholder shall simultaneously notify the Company and the Remaining
Shareholders in writing of its intended disposition (the "FIRST RIGHT OF
PURCHASE NOTICE"). Such First Right of Purchase Notices shall be given as
provided in Section 8.02 of this Agreement.
(b) Such First Right of Purchase Notices shall contain
a complete description of the proposed transaction including (i) the identity
of the proposed transferee, (ii) the purchase price offered (PROVIDED,
HOWEVER, that if the purchase offer is a non-cash offer (in whole or in part)
(a "NON-CASH OFFER"), instead of the purchase price, such First Right of
Purchase Notices shall instruct the Remaining Shareholders to contact the
Selling Shareholder for purposes of determining the present cash value of the
Non-Cash Offer in accordance with Section 3.04) (the cash purchase price of
Common Stock or the present cash value of Common Stock offered in a Non-Cash
Offer is referred to hereinafter as the "PURCHASE PRICE"), and (iii) all
other material terms of such transaction. Such First Right of Purchase
Notices shall also specify whether the Selling Shareholder is only willing to
sell all of its shares of Common Stock, or is
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willing to sell only a portion thereof, and such specifications shall control
the scope of any option to purchase such shares thereunder.
3.03 EXERCISE AND SCOPE OF EXERCISE. Upon receipt of a
First Right of Purchase Notice from a Selling Shareholder pursuant to Section
3.02, the Remaining Shareholders shall thereupon have the First Purchase
Option with respect to all, but not less than all, of the shares Common Stock
offered at the Purchase Price. In the event that more than one Remaining
Shareholder exercises the First Purchase Option, each Remaining Shareholder
exercising the First Purchase Option shall be deemed to have exercised the
First Purchase Option in respect of a pro rata portion of the shares subject
to such First Purchase Option (calculated based upon the number of shares of
Common Stock each Remaining Shareholder desires to purchase pursuant to the
First Purchase Option). Except in the case of a Non-Cash Offer, the First
Purchase Option must be exercised by the Remaining Shareholders within thirty
(30) days after receipt of the First Right of Purchase Notice delivered
pursuant to Section 3.02. Any such exercise of a First Purchase Option by the
Remaining Shareholders shall be made within such 30-day period by written
notice to the Selling Shareholder, with copy to the Company, given as
provided in Section 8.02 of this Agreement. In the case of a Non-Cash Offer,
the First Purchase Option shall be exercised as set forth in Section 3.04(e).
3.04 BONA FIDE NON-CASH THIRD PARTY OFFERS.
(a) Upon receipt of a First Right of Purchase Notice
which indicates that the Selling Shareholder has decided to Transfer all or
any part of its Common Stock pursuant to a Non-Cash Offer for such shares of
Common Stock, the Remaining Shareholders and the Selling Shareholder shall
promptly consult to determine the present cash value of such Non-Cash Offer.
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(b) If within 30 days of receipt by the Remaining
Shareholders of such First Right of Purchase Notice, the Selling Shareholder
and the Remaining Shareholders cannot agree on the present cash value of such
Non-Cash Offer, then within forty-five (45) days of receipt by the Remaining
Shareholders of such First Right of Purchase Notice, each of the Selling
Shareholder and the Remaining Shareholders shall appoint one qualified
independent appraiser knowledgeable in the appropriate industry to determine
the present cash value of the Non-Cash Offer. If either the Selling
Shareholder or the Remaining Shareholders fail to appoint an appraiser within
such 45-day period, then its right to do so shall lapse, and the appraisal
made by the one independent appraiser which is timely appointed shall be
conclusive.
(c) If the two appraisers make appraisals of the
present cash value of the Non-Cash Offer, and the higher appraisal does not
exceed 110% of the lower appraisal, the present cash value of the Non-Cash
Offer shall be average of such two appraisals. If the two appraisals are
further apart than 10%, the first two appraisers will select a third
qualified independent appraiser knowledgeable in the appropriate industry
within fifteen (15) business days of the date on which the second appraisal
is delivered to the Selling Shareholder and the Remaining Shareholders. In
such case, the cash value of the Non-Cash Offer will be deemed to be the
average of the appraisal delivered by such third appraiser and the one of the
first two appraisals which is closer to such third appraisal. If the first
two appraisals are equidistant from the third appraisal, the third appraisal
shall be final, conclusive and binding on the Parties.
(d) Each appraiser appointed pursuant to this Article
3 shall deliver its appraisal in writing to the Selling Shareholder and the
Remaining Shareholders concurrently within thirty (30) days of its
appointment. Each of the Parties hereto and the Company agrees that it will
use its best efforts to provide each appraiser with such information as such
appraiser
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may reasonably require in order to complete its appraisal within such 30-day
period. The Selling Shareholder shall pay the fee of the appraiser selected
by it, and the Remaining Shareholders shall pay the fee of the appraiser
selected by it. The fee of any third appraiser shall be divided equally
between the Selling Shareholder and the Remaining Shareholders.
(e) In the case of a Non-Cash Offer, the First
Purchase Option must be exercised by the Remaining Shareholders within twenty
(20) days after the date on which the later, in the case of two appraisals,
or the last, in the case of three appraisals, is delivered to the Selling
Shareholder and the Remaining Shareholders pursuant to Section 3.04(d). Any
such exercise of a First Purchase Option by the Remaining Shareholders shall
be made within such twenty (20) day period by written notice to the Selling
Shareholder, with copy to the Company, given as provided in Section 8.02 of
this Agreement
3.05 FAILURE TO EXERCISE. If the Remaining Shareholders
fail to exercise their First Purchase Options within the period specified in
Sections 3.03 or 3.04(e) (the "EXERCISE PERIOD"), then, subject to Sections
3.06 and 3.07, the Selling Shareholder shall be free to Transfer the shares
of Common Stock specified in the First Right of Purchase Notice within a
90-day period after the expiration of the Exercise Period; PROVIDED, that (i)
the purchase price for such Transfer is at least equal to (and in the same
form as) the Purchase Price at which the First Purchase Option was offered to
the Remaining Shareholders; (ii) the proposed transferee is the same
transferee specified in the First Right of Purchase Notice; and (iii) the
other terms and conditions of such Transfer are equivalent to the remaining
terms and conditions that were specified in the First Right of Purchase
Notice. If the Common Stock is not disposed of within such 90-day period,
then the Selling Shareholders' rights to Transfer shares of Common Stock
under this Section 3.05 shall lapse, and the Selling Shareholder must
thereafter offer to the
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Remaining Shareholders another First Purchase Option if it subsequently
wishes to so Transfer its shares. For purposes of this Section 3.05, a sale
shall be deemed made when closing has occurred, and the transfer agent has
been requested to record the transfer of Common Stock in the stock transfer
records of the Company.
3.06 DRAG-ALONG RIGHTS.
(a) If the Selling Shareholder is ANI and ANI intends
to dispose of shares of Common Stock constituting not less than 50% of the
outstanding Common Stock in a Transfer to which Section 3.01 applies to a
bona fide third party transferee that is not an Affiliate of ANI, and (i) the
Put Option (as defined below) is not and has not previously been exercised
prior to the date on which such Class A Shareholder receives a First Right of
Purchase Notice in accordance with Section 3.02, (ii) the First Purchase
Option has not been exercised in respect of such First Right of Purchase
Notice and (iii) no stay provided for by the last sentence of Section 3.01 is
in effect, then ANI shall have the option to require each Class A Shareholder
that does not exercise Tag-Along Rights set forth in Section 3.07 with
respect to all of its shares of Common Stock (a "DRAGGABLE SHAREHOLDER") to
Transfer all of its shares of Common Stock to the proposed transferee
specified in such First Right of Purchase Notice on the same terms and
conditions described therein (the "DRAG-ALONG RIGHTS") in connection with the
proposed Transfer by ANI of its shares of Common Stock to such transferee. In
connection with such Transfer, no Draggable Shareholder (x) shall be required
to give any representations or warranties or indemnities other than with
respect to itself, its title to the Common Stock and the transfer of such
title to the transferee free and clear of all security interests,
encumbrances, claims, liens or charges of any kind, other than those created
by or through Buyer or its affiliates ("LIENS") (this sentence not being
intended to limit a Draggable Shareholder's responsibility for any Purchase
Price
-15-
adjustment or its participation in escrow arrangements), (y) be required to
Transfer a greater percentage of the Common Stock held by it than the lowest
percentage of Common Stock held that is Transferred by ANI and any other
Draggable Shareholder (assuming that all of the Draggable Shareholders comply
with their obligations under this Section 3.06) or (z) be required to
Transfer any of its shares of Common Stock pursuant to ANI's exercise of such
Drag-Along Right later than six (6) months after delivery of the Drag-Along
Notice required by Section 3.06(b).
(b) Upon deciding to exercise the Drag-Along Rights,
ANI shall simultaneously notify the Company and each other Shareholder in
writing of its intended exercise (the "DRAG-ALONG NOTICES"). Such Drag-Along
Notices shall be given as provided in Section 8.02 of this Agreement.
3.07 TAG-ALONG RIGHTS.
(a) Except as otherwise expressly authorized pursuant
to Section 1.03, no Selling Shareholder shall, in any one transaction or
series of transactions, directly or indirectly, Transfer shares of Common
Stock unless the terms and conditions of such Transfer include an offer to
the Remaining Shareholders (in such context, the "TAG-ALONG OFFEREES") to
include in the Transfer to such third party, at the option of each Tag-Along
Offeree, such number of shares of Common Stock owned by such Tag-Along
Offeree at the time of such Transfer as determined in accordance with this
Section 3.07 on the same terms and conditions (including without limitation,
the proposed Purchase Price and date of Transfer) as are available to the
Selling Shareholder (the "TAG-ALONG RIGHTS").
(b) The Tag-Along Offerees shall be entitled to
include in the contemplated Transfer, at the same price and on the same terms
as available to the Selling
16
Shareholder, a number of shares of Common Stock (the "PROPORTIONATE TAG-ALONG
SHARES") up to the product of (i) the quotient determined by dividing the
number of shares of Common Stock to be transferred by the Selling Shareholder
to the third party by the aggregate number of shares of Common Stock owned by
the Selling Shareholder and (ii) the aggregate number of shares of Common
Stock owned by the Tag-Along Offeree.
(c) A Tag-Along Offeree may exercise its Tag-Along
Rights by delivering written notice of such exercise (the "TAG-ALONG EXERCISE
NOTICE") to the Selling Shareholder, by the expiration of the applicable
Exercise Period in respect of such Transfer.
(d) In the event that the number of shares of Common
Stock proposed to be Transferred by the Selling Shareholder, PLUS the
proportionate number of shares of Common Stock proposed to be transferred by
the Tag-Along Offerees (the "TOTAL TRANSFERRED SHARES"), exceeds the maximum
number of shares of Common Stock that the third party is willing to purchase
or otherwise acquire, then the number of shares of Common Stock to be
Transferred by the Selling Shareholder and each Tag-Along Offeree,
respectively, shall be reduced by equal percentages until the number of Total
Transferred Shares equals the maximum number of shares of Common Stock that
the third party is willing to purchase or otherwise acquire; provided that if
such allocation would result in any such Tag-Along Offeree selling or
disposing of less than the minimum number of shares of Common Stock as set
forth in such Tag-Along Offeree's Tag-Along Exercise Notice, such Tag-Along
Exercise Notice shall be revoked and the shares of Common Stock which such
Tag-Along Offeree would otherwise have been entitled to sell or dispose of to
the Third Party shall be allocated among the Selling Shareholder and the
other Tag-Along Offerees who have given Tag-Along Exercise Notices pro rata
(based
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on the number of shares of Common Stock they would otherwise have
Transferred). All calculations pursuant to this Section 3.07 shall exclude
and ignore any unissued shares of Common Stock of the Company issuable
pursuant to stock options, warrants and other rights to acquire shares of
Common Stock.
(e) Each of the Selling Shareholder and the proposed
transferee shall have the right, in its sole discretion, at all times prior
to the consummation of the proposed Transfer giving rise to the Drag-Along
Rights and Tag-Along Rights set forth in Section 3.06 and this Section 3.07,
to abandon, rescind, annul, withdraw or otherwise terminate such Transfer
whereupon all Drag-Along Rights and Tag-Along Rights in respect of such
Transfer shall become null and void, and neither the Selling Shareholder nor
the third party shall have any liability or obligations to the Draggable
Shareholders and Tag-Along Offerees with respect thereto by virtue of such
abandonment, rescission, annulment, withdrawal or termination.
3.08 PAYMENT OF PURCHASE PRICE AND CLOSING OF THE TRANSFER
OF SHARES OF COMMON STOCK.
(a) Payment for the shares of Common Stock Transferred
pursuant to this Article 3 shall be made in one of the following ways: (i)
subject to clause (iii) below, if the Remaining Shareholder exercises its
First Purchase Option, the Remaining Shareholders shall match the same price
and payment terms offered by the proposed third-party transferee (PROVIDED,
that any non-cash consideration shall be paid in cash at the present cash
value determined pursuant to Section 3.04); or (ii) if a third-party
transferee (other than another Shareholder) purchases the Remaining
Shareholder's shares of Common Stock pursuant to Section 3.06 or 3.07, such
transferee shall match the same price (including the form of the
consideration) and payment terms offered to the Selling Shareholder; or (iii)
if Media General
-18-
purchases ANI's shares of Common Stock, Media General may deliver shares of
the publicly traded common stock of Media General (valued at the average of
the publicly traded closing price for the twenty (20) trading days
immediately preceding the date of delivery) or by a combination thereof in
payment of the Purchase Price (in which case Media General and ANI shall
enter into a registration rights agreement reasonably acceptable to each of
them providing ANI with registration rights in respect of such shares
comparable to the Registration Rights).
(b) The closing of a sale of shares of Common Stock to
the Remaining Shareholders pursuant to Section 3.01 shall occur on a date
mutually selected by the Selling Shareholder and the Remaining Shareholders
which date is not less than ten (10) nor more than one hundred twenty (120)
days after the date the Selling Shareholder delivers the First Right of
Purchase Notice under Section 3.02 of this Agreement.
4. PUT AND CALL OPTIONS
4.01 PUT OPTION. Media General and each other Class A
Shareholder shall have an option (the "PUT OPTION") to require ANI to
purchase for the Put/Call Purchase Price (as defined below), in the manner
set forth below, all, but not less than all, of the shares of Common Stock
owned by Media General and the other Class A Shareholders at the time of the
exercise of the Put Option. If there is more than one Class A Shareholder,
the decision to exercise the Put Option shall be made by Media General in its
sole discretion or by such other Class A Shareholder(s) to which Media
General shall have assigned such authority (provided that ANI shall have been
given written notice of such assignment of authority in accordance with
Section 8.02)) (the "AUTHORIZED SHAREHOLDER").
4.02 PUT OPTION TERM. The Authorized Shareholder may
deliver to ANI in accordance with Section 8.02 a notice of exercise of the
Put Option (the "PUT EXERCISE NOTICE")
-19-
no earlier than the second anniversary and no later than the fifth
anniversary of the date hereof. In the event that the Authorized Shareholder
has not delivered a Put Exercise Notice to ANI by the fifth anniversary of
the date hereof, the Put Option shall expire.
4.03 CALL OPTION. ANI shall have an option (the "CALL
OPTION") to purchase all, but not less than all, of the shares of Common
Stock owned by Media General and the other Class A Shareholders at the time
of the exercise of the Call Option for the Put/Call Purchase Price.
4.04 CALL OPTION TERM. Provided that the Authorized
Shareholder has not theretofore delivered a Put Exercise Notice, ANI may
deliver to the Class A Shareholders in accordance with Section 8.02 a notice
of its exercise of the Call Option (the "CALL EXERCISE NOTICE") no earlier
than the day after the fifth anniversary of the date hereof and no later than
the sixth anniversary of the date hereof.
4.05 DETERMINATION OF PUT/CALL PURCHASE PRICE.
(a) Within fifteen (15) days of delivery of the Put
Exercise Notice or the Call Exercise Notice, Media General (or, in the case
of an exercise of the Put Option, the Authorized Shareholder, in each case on
behalf of the Class A Shareholders) and ANI shall each select a qualified
independent appraiser knowledgeable in the appropriate industry to determine
the fair market value of the Company based on its full, private market value
(such determination is herein referred to as an "APPRAISED FAIR MARKET
VALUE"), each of which firms shall determine the Appraised Fair Market Value
of the Company within thirty (30) days following its selection. In connection
with its determination of Appraised Fair Market Value, each qualified
independent appraiser shall deduct the sum of (i) outstanding Permitted Debt
(as defined in Section 6.03), PLUS (ii) any other Debt of the Company (and
its subsidiaries) the incurrence of which was
-20-
approved by Media General or the Class A Director (as defined in Section
6.02(d)) in accordance with Section 6.03(e), plus (iii) capitalized leases of
the Company (and its subsidiaries) (other than capitalized leases entered
into in violation of Section 6.03(e)).
(b) If the lower of the two determinations of
Appraised Fair Market Value of the Company, as calculated by the two (2)
qualified independent appraisers selected by Media General and ANI, is within
20% of the higher, then the "PUT/CALL PURCHASE PRICE" shall be an amount
equal to the Fraction (as defined below), MULTIPLIED BY of the average of
such two appraisals, which shall be final, conclusive and binding on the
parties. However, if the lower of the appraisals is not within 20% of the
higher, then the two previously chosen qualified independent appraisers will,
within ten (10) days of the completion of their appraisals, select a third
qualified independent appraiser knowledgeable in the appropriate industry to
determine the Appraised Fair Market Value of the Company within thirty (30)
days of the selection of the third appraiser, and the "PUT/CALL PURCHASE
PRICE" shall be an amount equal to the Fraction, MULTIPLIED BY (x) the
average of the two closest of the three appraisals of Appraised Fair Market
Value or (y) by the middle Appraised Fair Market Value if it is equidistant
form the high and low of the three appraisals, which shall be final,
conclusive and binding on the parties. As used herein, "FRACTION" shall mean
a fraction, the numerator of which is the number of shares of Common Stock to
be purchased, and the denominator of which is the number of shares of Common
Stock then outstanding.
(c) The Company and the Shareholders shall cooperate
with the appraisers in all respects, including providing the appraisers with
all financial statements and other information required to complete the
appraisals. ANI and the Class A Shareholders shall each bear the cost and
expenses of their own appraiser. The fees, expenses and costs of the third
-21-
appraisers shall be borne equally by ANI, on the one hand, and the Class A
Shareholders, on the other hand.
4.06 PUT OPTION CLOSING. Within fifteen (15) business days
after the final determination of the Put/Call Purchase Price, ANI will pay to
the Class A Shareholders by wire transfer of immediately available funds the
Put/Call Purchase Price against delivery of the shares of Common Stock to be
sold pursuant to the Put Option or the Call Option, as the case may be, (the
"OPTION SHARES") free and clear of all Liens (other than this Agreement) but
otherwise without representation or warranty or other indemnity, together
with stock powers executed in blank with all necessary stock transfer and
other documentary stamps attached. Amounts payable to ANI pursuant to Section
7(e) of the Tax Sharing Agreement may be offset against the Put/Call Purchase
Price as provided therein. The obligations of the Class A Shareholders to
deliver their shares of Common Stock free and clear of all Liens is several
and not joint and no default by any such Class A Shareholder shall relieve
ANI of its obligation to pay the Put/Call Purchase Price to non-defaulting
Class A Shareholders.
4.07 DEFERRAL OF THE PUT OPTION CLOSING.
(a) In the event the Class A Shareholders exercise
their Put Option pursuant to this Article 4, ANI may elect to defer the
closing of the purchase of the Option Shares for up to twelve (12) months
from the date on which the closing of such purchase is otherwise required to
occur pursuant to Section 4.06 (the "DEFERRAL PERIOD"). During the Deferral
Period, the Put/Call Purchase Price shall increase at a rate equal to seven
percent (7%) per annum during the first three (3) months of the Deferral
Period, nine percent (9%) per annum during the second three (3) months of the
Deferral Period, eleven percent (11%) per annum during the third three (3)
months of the Deferral Period and thereafter at a rate of thirteen percent
(13%) per
-22-
annum until the Put/Call Purchase Price has been paid in full (in each case,
compounded quarterly).
(b) In the event that the closing of the purchase of
the Option Shares as to which the Put Option has been exercised has not
occurred by the end of the Deferral Period (other than as a result of a
default (including the failure to transfer its shares of Common Stock as
provided in Section 4.06) by a Class A Shareholder), ANI's Call Option will
terminate in respect of the shares of Common Stock held by all non-defaulting
Class A Shareholders, and ANI will be deemed to be in breach of the Put
Option of such non-defaulting Class A Shareholders.
5. RESTRICTIVE LEGEND
5.01 FORM OF LEGEND. All certificates for shares of the
Common Stock subject to this Agreement shall bear the legend set forth below:
"Sale, transfer, assignment, pledge, gift or any other
disposition, alienation or encumbrance of the shares
represented by this certificate is restricted by (and shares
represented by this certificate are subject to a right of
first purchase and may be subject to certain other rights of
purchase by certain persons pursuant to) the terms of a Third
Amended and Restated Shareholders' Agreement, dated as of June
30, 1999, among Media General, Inc., MediaNews Group, Inc. and
the Company, which may be examined at the principal office of
the Company, and such shares may be sold, transferred,
assigned, pledged, given or otherwise disposed of, alienated
or encumbered only upon compliance with the terms of that
Agreement."
"The shares represented by this certificate have not been
registered under the Securities Act of 1993 (the "ACT") and
may not be offered, sold or otherwise transferred unless and
until (i) a registration statement with respect thereto is
effective under the Act or (ii) in the opinion of counsel,
which opinion is reasonably satisfactory in form and in
substance to counsel for the Company, such offer, sale or
other transfer is in compliance with the Act and any
applicable state securities laws."
-23-
5.02 REMOVAL OF LEGEND. The first part of the legend set
forth in Section 5.01 is intended to ensure compliance with Articles 1, 2, 3
and 4 of this Agreement and shall be removed by the Company, or by the
transfer agent and registrar of the Company upon the Company's instructions,
from the certificates evidencing any shares of Common Stock upon Transfer of
such shares in connection with a public offering or Rule 144 sale by ANI in
accordance with Section 1.03(f) or any Class A Shareholder in accordance with
Section 1.02(e) or Article 2 or in connection with a foreclosure described in
Section 3.03(g).
The second part of the legend set forth in Section 5.01 is
intended to ensure compliance with the Securities Act and shall be removed by
the Company, or by the transfer agent and registrar of the Company upon the
Company's instructions, from the certificates evidencing shares of Common
Stock to which either of clause (i) or (ii) of such second part of the legend
applies when (a) a registration statement covering the sale of such Common
Stock becomes effective under the Securities Act or (b) the Company receives
an opinion of counsel satisfactory to the Company that such restrictions are
no longer required on the certificates evidencing such Common Stock in order
to ensure compliance with the Securities Act.
When the holder of any shares of Common Stock is entitled
to have the legend, or any part thereof, set forth in Section 5.01 removed
from the certificates evidencing such Common Stock, the Company shall, or
shall instruct its transfer agent and registrar to, issue new certificates
evidencing such Common Stock in the name of the holder not bearing the
legend, or such part thereof, set forth in Section 5.01 hereof.
6. GENERAL COVENANTS
6.01 APPLICABILITY OF COVENANTS. The covenants set forth in
this Article 6 are made for the benefit of Media General, as the holder of
the Class A Common Stock and, in the
-24-
case of Sections 6.02(b), 6.02(c), and 6.02(d)(i), (ii), (iv), (v) and (vi),
for the benefit of ANI, as the holder of the Class B Common Stock. Such
covenants shall also run in favor of any transferee permitted hereunder of
the Common Stock other than any third party transferee (or subsequent
transferee) of Common Stock sold in connection with a public offering or Rule
144 sale.
6.02 AFFIRMATIVE COVENANTS.
(a) ANI and the Company covenant that they shall
immediately inform each Class A Shareholder of any defaults or events of
default occurring under any loan agreement or other instrument governing Debt
of either of them or of any of their respective direct or indirect
subsidiaries, in each case, in excess of $3,000,000, and shall keep each
Class A Shareholder informed as to the status of such defaults or events of
default. ANI and the Company shall furnish each Class A Shareholder with
copies of all notices and correspondence received or sent by either of them
or by any of their respective direct or indirect subsidiaries relating to any
such defaults or events of default.
(b) ANI and the Company covenant that on October 1 of
each year commencing October 1, 2000 (or the next business day, if such day
is not a business day) (each, a "PAYMENT DATE") all Available Cash (as
defined below) shall be applied to reduce Permitted Debt, with such Available
Cash being applied first to Permitted Debt described in clauses (1), (2) and
(3) of the definition of Permitted Debt. As used herein, "AVAILABLE CASH"
shall mean in respect of a Payment Date an amount equal to all cash and cash
equivalents of the Company and its subsidiaries in excess of $5,000,000 on
such date reduced by (x) amounts payable pursuant to the Tax Sharing
Agreement or to state and local tax authorities in respect of taxes relating
to the fiscal year prior to such Payment Date and (y) such other amounts as
ANI, with the approval of
-25-
Media General (not to be unreasonably withheld) determines should be withheld
to meet future expenditures (i) pursuant to the Approved Budget or (ii) which
otherwise have not been incurred in violation of Section 6.03.
(c) In the event that the Company lacks sufficient
working capital to fund operating needs, each Shareholder covenants that it
will make capital contributions to the Company to fund such requirements in
proportion to its percentage ownership of the Company's Common Stock up to an
amount equal to dividends and distributions received by such Shareholder from
the Company after the Closing in respect of shares of Common Stock held by
such Shareholder at the time the capital contribution is to be made, PROVIDED
(1) that a transferee of Common Stock pursuant to Sections 1.03(a) or 1.03(b)
shall be responsible to make capital contributions pursuant to this paragraph
up to an amount equal to dividends and distributions received after the
Closing by such Shareholder and all previous holders of such shares in
respect of such shares of Common Stock (that were previously transferred to
it pursuant to Sections 1.03(a) or 1.03(b)) and (2) that in the event a
Shareholder is required to make a capital contribution pursuant to this
paragraph that is less than the total dividends and distributions paid after
the Closing in respect of the shares of Common Stock held by it at such time
(as a consequence of having acquired its shares after the Closing), the
capital contributions required to be made by the other Shareholders pursuant
to this paragraph will be reduced such that the capital contributions made by
all Shareholders are in proportion to the shares of Common Stock held by them
at such time.
(d) The Company and the Shareholders hereby covenant
and agree as follows:
-26-
(i) The Shareholders at any annual meeting of
stockholders of the Company or any special
meeting at which directors are to be
elected (or in any written consent in lieu
of any such meeting), will cast or cause to
be cast all their votes of Common Stock so
as to cause the election of one (1)
director to be selected by the holders of
Class A Common Stock (the "CLASS A
DIRECTOR") and four (4) directors to be
selected by the holders of Class B Common
Stock (the "CLASS B DIRECTORS"), in each
case in the manner provided in the
Certificate of Incorporation and Bylaws,
for a total of five (5) directors (which
shall constitute the entire Board of
Directors of the Company). Media General
(so long as it is a Shareholder) shall have
the right to have up to two of its officers
or employees attend all meetings of the
Board of Directors of the Company as
observers.
(ii) If a vacancy with respect to the Class A
Director or a Class B Director should be
created on the Board of Directors of the
Company for any reason, including, but not
limited to, the death, disability,
resignation or removal of such director,
such vacancy will promptly be filled by the
holders of Class A Common Stock, with
respect to the Class A Director, or the
holders of Class B Common Stock, with
respect to the Class B Director, as the
case may be, at a special meeting called
for that purpose (or by a written consent
in lieu of such meeting), and at such
special meeting (or by such consent), the
Shareholders shall cast or cause to be cast
all of their votes in favor of the
replacement director selected by the Common
Shareholders who previously selected the
director whose death, resignation, etc.
created the vacancy. No person who,
directly or indirectly, as an employee,
director, consultant, or in any other
capacity, is engaged in any newspaper
publishing business which is in direct
competition with any newspaper published by
the Company or any of its subsidiaries
shall be a director of the Company or any
of its subsidiaries or one of Media
General's observers.
(iii) The Class A Director shall be (x) a member
of each committee designated by the Board
of Directors, (y) a director of each
subsidiary of the Company and (z) entitled
to access to the Company's outside auditors
in the absence
-27-
of the designation by the Board of Directors
of an audit committee.
(iv) A majority of the entire Board of Directors
of the Company or any of its subsidiaries
shall constitute a quorum for the
transaction of business or of any specified
item of business; PROVIDED, HOWEVER, that
the presence of the Class A Director shall
be necessary to constitute a quorum at any
meeting of any such Board of Directors as
to which any action to be taken (y) was not
described with reasonable specificity as
being part of the agenda in the formal
written notice of such meeting or (z) is
required to be approved by the Class A
Director pursuant to Section 6.03.
(v) All directors shall be entitled to attend
meetings of the Board of Directors of the
Company and its subsidiaries and committees
thereof by telephone.
(vi) Each subsidiary of the Company shall have
five (5) directors. At any annual meeting
of stockholders of a subsidiary of the
Company or any special meeting at which
directors of a subsidiary of the Company
are to be elected (or in any written
consent in lieu of such meeting), the
Company will cast all of its votes of
capital stock of such subsidiary so that
the Class A Director and the Class B
Directors are elected to the Board of
Directors of such subsidiary. If a vacancy
with respect to a director of a subsidiary
of the Company should be created for any
reason, including, but not limited to, the
death, disability, resignation or removal
of such director, such vacancy will
promptly be filled by the Company at a
special meeting called for that purpose (or
by a written consent in lieu of such
meeting), and at such meeting (or by such
consent), the Company shall cause to be
elected a replacement director selected by
the Common Shareholders who previously
selected the director whose death,
resignation, etc. created the vacancy.
(e) The Company will deliver to each Class A
Shareholder:
(i) within twenty-five (25) days after the end
of each month, consolidated balance sheets
of the Company as of the end of such month
and related consolidated statements of
earnings and cash flow for such month and
for the fiscal year through the end of such
month and for the comparable
-28-
month and period of the prior year,
certified by the Company's chief financial
officer as presenting fairly in all
material respects the consolidated
financial position and results of
operations of the Company and its
consolidated subsidiaries in accordance
with generally accepted accounting
principles consistently applied, except
that such financial statements (a) do not
contain footnotes and (b) are subject to
customary year-end adjustments, and with
such other exceptions as are agreed by ANI
and Media General.
(ii) within forty-five (45) days of the close of
the first three fiscal quarters of each
year, quarterly consolidated balance sheets
of the Company as of the end of such
quarter and related consolidated statements
of earnings and cash flow for such quarter
and for the fiscal year through the end of
such quarter and for the comparable quarter
and period of the prior year, certified by
the Company's chief financial officer as
presenting fairly in all material respects
the consolidated financial position and
results of operations of the Company and
its consolidated subsidiaries in accordance
with generally accepted accounting
principles consistently applied, except
that such financial statements (a) do not
contain footnotes and (b) are subject to
customary year-end adjustments, and with
such other exceptions as are agreed by ANI
and Media General.
(iii) within ninety (90) days of the close of the
fiscal year end, year-end audited
financials, including consolidated balance
sheets of the Company as of the end of such
fiscal year and related consolidated
statements of earnings and cash flow for
such fiscal year and for the prior fiscal
year certified by the Company's independent
public accountants presenting fairly the
consolidated financial position and results
of operations of the Company and its
consolidated subsidiaries in accordance
with generally accepted accounting
principles consistently applied.
(iv) promptly (but within any event within three
(3) business days) after receipt by the
Company copies of management letters (if
any) from the Company's independent public
accountants or internal auditors,
(v) a written agenda at least ten (10) days in
advance of each meeting of the board or
board committee of the Company or its
subsidiaries,
-29-
(vi) management's proposed capital and operating
budget for each fiscal year at least
fifteen (15) days prior to the Board
meeting at which it is to be submitted for
approval by the Board and beginning with
the budget for fiscal year 2001, in any
event at least fifteen (15) days prior to
the commencement of such fiscal year (and,
in the case of fiscal year 2000, on or
prior to July 15, 1999),
(vii) prior written explanation of any waiver or
consent that any Class A Shareholder is
requested to sign, if the action for which
such waiver or consent is requested will
conflict with or limit any of Media
General's or the Class A Shareholders'
rights under this Agreement, the
Certificate of Incorporation, the Bylaws,
the Stock Purchase Agreement or the
Tax-Sharing Agreement (collectively, the
"OPERATIVE DOCUMENTS"), and
(viii) any other information that any Class A
Shareholder may reasonably request in
writing.
(f) ANI shall cause the Company to take all actions
necessary and appropriate to comply with the Company's covenants contained in
this Section 6.02.
(g) ANI and the Company covenant and agree that ANI
and the Company shall owe to the Class A Shareholders the full scope of
fiduciary duties, including, but not limited to, good faith, fairness and
fair dealing, which the Company would owe to any of its common stockholders.
The Company and ANI acknowledge that (while the Company is technically not a
"close corporation" under Delaware Law) the Company is a closely held
corporation, and that as such, the fiduciary duties owed by the Company to
the Class A Shareholders and ANI are of the highest degree and character, and
ANI owes to the Class A Shareholders the same fiduciary duties which the
Company owes to its Class A Shareholders.
6.03 GOVERNANCE RIGHTS. Except as provided in the next
sentence, all action of the Board of Directors of the Company and its
subsidiaries (including without limitation the
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declaration of dividends and distributions) shall require the affirmative
vote of a majority of directors present at a meeting at which a quorum is
present. ANI and the Company covenant that the Company shall not, nor shall
it permit any subsidiary to, take or permit any of the following actions,
unless the same shall have first been approved by the requisite number of
directors and the Class A Director, and ANI covenants that it shall cause the
Company and any subsidiary of the Company, to refrain from the following
actions, unless they have been approved in the manner provided above:
(a) Make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or
assets to, or purchase any property or assets
from, or enter into or make or amend any
transaction, contract, agreement, understanding,
loan advance or guarantee with or for the benefit
of ANI or its affiliates (other than the Company
and its subsidiaries), other than (i) the payment
of management fees of $1 million per annum (except
to the extent a greater amount is set forth in the
Approved Budget), (ii) to the extent provided for
(x) in a specific line item of the Approved Budget
(which line item shall specify that the payment is
to or for the benefit of ANI or one of its
affiliates (other than the Company and its
subsidiaries)) or (y) pursuant to the Tax Sharing
Agreement, (iii) loans, advances or other
transfers of properties or assets to the extent
failure to make such loans, advances or other
transfers of properties or assets would cause
Garden State or ANI to be in default under the
indenture dated March 16, 1999 in respect of
Garden State's 8-5/8% Senior Subordinated Notes
due 2011 or the indenture dated October 1, 1997 in
respect of Garden State's 8-3/4% Senior
Subordinated Notes due 2009, in each case as in
effect on the date hereof, and (iv) Permitted
Intercompany Debt (as defined below),
(b) Sell any equity interests or rights to acquire
equity interest in the Company or any of its
subsidiaries,
(c) Merge (other than with The Denver Post),
consolidate, sell substantially all of the
Company's assets or liquidate (other than (x) the
pledge or grant of a security interest in shares
of capital stock of the Company's subsidiaries to
secure Permitted Debt, and the foreclosure on any
such pledge or security interest, and (y) as
permitted by clause (a)(iii) above),
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(d) Make any Investments (including acquisitions of
another business entity and expansion into new
businesses) exceeding an aggregate amount of such
Investments outstanding at any time of $15 million,
(e) Incur any Debt except (i) Permitted Debt and (ii)
capitalized leases of less than $10 million at any
time outstanding (exclusive of those in effect on
the date hereof),
(f) Refinance or refund or amend, supplement or
otherwise modify or waive any material term of any
loan agreement in respect of Debt required to be
approved by the Class A Director pursuant to
clause (e) above,
(g) Enter into joint ventures and partnerships which
amount to a cumulative equity commitment in excess
of $10 million in the aggregate,
(h) Amend the Tax Sharing Agreement, the Certificate
of Incorporation or the Bylaws,
(i) Fix the level of compensation for any employee
over $300,000 per year,
(j) Enter into or permit to exist any agreement which
limits or restricts the rights of Media General or
the Class A Shareholders under the Operative
Documents or the obligations of any Denver Person
(as such term is defined in Section 1.6(a) of the
Stock Purchase Agreement) under the Operative
Documents,
(k) Terminate the independent certified public
accountants of the Company or The Denver Post or
appoint an independent certified public accountant
for the Company or The Denver Post (other than
Ernst & Young LLP),
(l) Appoint and/or dismiss the Publisher of The Denver
Post,
(m) Make capital expenditures in excess of $10 million
in any year (other than to the extent set forth in
the Approved Budget),
(n) Repurchase or redeem securities of the Company, and
(o) Approve the capital and operating budget for the
Company and its subsidiaries for each fiscal year
(as approved, the "APPROVED BUDGET"), provided
that until the Approved Budget for fiscal year
-32-
2000 is adopted, the preliminary budget attached
as Exhibit B shall be deemed to be the fiscal year
2000 Approved Budget.
As used in this Agreement:
"DEBT" means (i) any indebtedness for borrowed money
or the deferred purchase price of property as evidenced by a note, bonds, or
other similar instruments, (ii) obligations as lessee under capital leases
(to the extent required to be capitalized under GAAP), (iii) without
duplication, obligations secured by any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind existing on any asset owned or held
by the Company or any subsidiary of the Company whether or not the Company or
a subsidiary has assumed or become liable for the obligations secured
thereby, (iv) any obligation under any interest rate swap agreement, (v)
accounts payable and (vi) obligations under direct or indirect guarantees of
(including obligations (contingent or otherwise) to assure a creditor against
loss in respect of) indebtedness or obligations of the kinds referred to in
clauses (i), (ii), (iii), (iv) and (v), above; PROVIDED that Debt shall not
include obligations in respect of any accounts payable that are incurred in
the ordinary course of the Company's business.
"INVESTMENT" means (i) any direct or indirect purchase
or other acquisition by the Company or any of its subsidiaries of, or of a
beneficial interest in, stock or other securities of any other Person (other
than a Person that prior to such purchase or acquisition was a wholly-owned
subsidiary of the Company), (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any subsidiary of the
Company from any Person other than the Company, of any equity securities of
such subsidiary, or (iii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses in the
ordinary course of business) or capital contribution by the Company or any of
its subsidiaries to
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any other Person other than a wholly-owned subsidiary of the Company
including all indebtedness and accounts receivable from that other Person
that are not current assets or did not arise from sales to that other Person
in the ordinary course of business. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"PERMITTED DEBT" shall mean (1) Debt incurred to
redeem the 9% Cumulative Preferred Stock, par value $.01 per share (including
accrued but unpaid dividends to the date of such redemption) as contemplated
by the Stock Purchase Agreement, (2) Debt incurred to refinance the Company's
and The Denver Post's outstanding indebtedness to Norwest Bank Colorado,
National Association ("NORWEST BANK") as of the date of the Closing under the
Loan Agreement, dated as of May 20, 1994, between The Denver Post and Norwest
Bank, as amended, together with the amount of any bank overdrafts at Norwest
Bank outstanding at such time, (3) Debt incurred to fund net losses (other
than depreciation and amortization) pursuant to the Approved Budget or other
initiatives or deviations from the Approved Budget approved by the Board of
Directors of the Company and its subsidiaries (including the Class A
Director) from time to time in accordance with this Section 6.03, (4) Debt
incurred to make capital expenditures (other than capital expenditures made
in violation of Section 6.03(m)), (5) revolving Debt of up to $5 million
incurred for working capital purposes, (6) up to $8 million of Debt incurred
in respect of the press project associated by the New York Times Company
commercial print contract, (7) up to $10 million of other Debt not described
in the immediately preceding clauses (1) through (6), and (8) Debt incurred
to make required payments of principal, interest, fees and other amounts on
Permitted Debt to the extent the Company and its subsidiaries have
insufficient
-34-
funds to make such payments. As used in the preceding sentence, Debt shall
include all fees and expenses incurred and borrowed in connection with the
incurrence of such Debt. Permitted Debt described in clauses (1), (2) and (3)
of the definition thereof that is repaid pursuant to Section 6.02(b) may not
be reborrowed as Permitted Debt, provided that (without limitation of and
subject to Section 6.02(b)), the foregoing shall not limit the ability of the
Company and its subsidiaries to pay down and reborrow Permitted Debt in
connection with cash management activities between Payment Dates; provided
further, that, upon reborrowing, the amount of Permitted Debt described in
clauses (1), (2) and (3) shall not exceed the amount of such Permitted Debt
outstanding on the most recent Payment Date after application of Available
Cash required by Section 6.02(b) to be applied to the repayment of Permitted
Debt on such Payment Date (or, if the Company shall have failed to apply such
Available Cash, the amount of such Permitted Debt that would have been
outstanding assuming such Available Cash had been so applied). Guarantees by
the Company or any of its subsidiaries of Debt or other obligations of ANI or
any of its affiliates (other than the Company and its wholly-owned
subsidiaries) ("GUARANTEED OBLIGATIONS") shall be Permitted Debt only if such
guarantees meet the following conditions: (w) the proceeds of Guaranteed
Obligations may be used solely to fund the business, liabilities and
obligations of the Company and its wholly-owned subsidiaries by way of
Permitted Intercompany Debt and capital contributions, (x) the liability of
the Company in respect of such permitted guarantees shall not exceed (A) the
sum of all proceeds of Guaranteed Obligations advanced to the Company and its
wholly-owned subsidiaries, plus interest on and other amounts payable in
respect of Permitted Intercompany Debt LESS (B) the sum of all amounts paid
by the Company and its subsidiaries to or for the benefit of ANI and its
affiliates
-35-
(other than the Company and its subsidiaries) for any purpose whatsoever in
excess of amounts permitted by Sections 6.03(a)(i) and (ii) or otherwise
approved by the Board of Directors of the Company (including the Class A
Director) in accordance with Section 6.03, (y) the Company shall be entitled
to offset any amounts paid by the Company or any of its subsidiaries on or in
respect of such permitted guarantees against any amounts owed by the Company
or any of its subsidiaries to ANI or any of its affiliates with such amounts
to be applied first against Permitted Intercompany Debt and (z) the Company
and its subsidiaries shall be subrogated to the rights of the beneficiaries
of such permitted guarantees against ANI and its affiliates (other than the
Company and its subsidiaries) when all obligations of ANI and its affiliates
(including the Company and its subsidiaries) to such beneficiaries have been
discharged.
To the extent that Permitted Debt (x) is borrowed
directly by the Company or its subsidiaries pursuant to a credit facility of
ANI or its affiliates (other than the Company and its subsidiaries), (y)
constitutes a guarantee of Debt of ANI or its affiliates (other than the
Company and its subsidiaries) or (z) is borrowed from ANI or any of its
affiliates (other than the Company and its subsidiaries), such Debt shall be
on terms no less favorable as to amortization, mandatory prepayments,
interest rates, fees and covenants (except as to prepayment and amortization
as provided herein) than Debt of ANI or its affiliates, in the case of clause
(x), under such credit facility, and in the case of clause (y), in respect of
the Debt guaranteed, and in the case of clause (z), under the most favorable
revolving credit facility of ANI and its affiliates (other than the Company
and its subsidiaries) (unless the proceeds of such Debt are loaned to the
Company and its subsidiaries, in which case such terms shall by no less
favorable than those of the credit facility under which such Debt is
incurred). Permitted Debt described in clauses (y) and (z) above is referred
to as "PERMITTED INTERCOMPANY DEBT".
-36-
7. PREEMPTIVE RIGHTS
The Company hereby grants to the Class A Shareholders the
right to purchase additional shares of the Company's equity securities (or
rights to acquire such equity securities) (the "PURCHASE RIGHT") in
connection with any issuance from time to time by the Company of equity
securities after the Closing Date, other than any public offering by the
Company (such securities the issuance of which gives rise to a Purchase Right
are referred to herein as "COVERED SECURITIES") in accordance with the
following provisions:
(a) In the event the Company determines to sell
Covered Securities, it shall deliver to each Class A Shareholder a written
notice (the "TRANSACTION NOTICE") stating (i) its bona fide intention to sell
Covered Securities, (ii) the identity of the proposed transferee and the
material terms of the transaction and (iii) the Per Share Price (as defined
below) at which it intends to issue such Covered Securities.
(b) No later than ten (10) days after delivery to each
Class A Shareholder of a Transaction Notice (or, if later, five days
following the date the independent qualified appraiser described in the
definition of Per Share Price delivers its determination to the Class A
Shareholders), each Class A Shareholder may elect to purchase from the
Company such number of shares of Covered Securities ("PREEMPTIVE SHARES") as
will maintain its percentage ownership in the Company on a fully diluted
basis (after giving effect to the sale of the Covered Securities described in
the Transaction Notice and the sale of the Common Stock pursuant to the
Purchase Right) at a price per share equal to the Per Share Price by delivery
to the Company of an election notice (the "ELECTION NOTICE") stating such
Class A Shareholder's intention to exercise the Purchase Right.
-37-
(c) PERMITTED SALES. The Company shall have ninety
(90) days from the expiration of the relevant period set forth in Section
7(b) to sell the Covered Securities as to which a Transaction Notice has been
given by the Class A Shareholders to the Person or Persons specified in the
Transaction Notice, but only upon terms and conditions that are no more
favorable in the aggregate to such other Person or Persons or less favorable
to the Company than those set forth in the Transaction Notice.
(d) REDUCTION IN AMOUNT OF OFFERED SECURITIES. In the
event the Company shall sell less than all the Covered Securities specified
in a Transaction Notice (any such sale to be in the manner and on the terms
specified in Section 7(c) above), then the number of the Preemptive Shares to
be purchased by a Class A Shareholder shall be reduced PRO RATA.
(e) CLOSING. Upon the closing of the sale to such
other Person or Persons of Covered Securities, the Class A Shareholders shall
purchase from the Company, and the Company shall sell to the Class A
Shareholders, the number of Preemptive Shares specified in the Election
Notices, as reduced pursuant to Section 7(d).
(f) FURTHER SALE. In each case, any Covered Securities
covered by a Transaction Notice that are not sold on the basis set forth in
paragraph (c) above may not be sold or otherwise disposed of until the
procedures specified in this Section 7 are complied with again.
(g) "PER SHARE PRICE" shall mean, with respect to
Covered Securities to be issued by the Company, an amount equal to the
aggregate consideration (expressed in dollars) to be paid to the Company for
such Covered Securities (which may be zero), DIVIDED BY the number of Covered
Securities to be issued on fully-diluted basis. If such consideration
includes non-cash consideration, and the Class A Shareholders exercising
their rights under this Article 7 and the Company cannot agree on the dollar
value of such consideration within five days of
-38-
delivery of the Transaction Notice to the Class A Shareholders, such
consideration will be valued for purposes this Article 7 by independent
qualified appraisers jointly engaged by such Class A Shareholders and the
Company, whose fees and expenses shall be split between the Company, on the
one hand, and such Class A Shareholders, on the other hand.
8. MISCELLANEOUS
8.01 INDEMNIFICATION. ANI hereby agrees to indemnify and
hold Media General and each other Class A Shareholder and the Company
harmless from and against any damage to Media General and each other Class A
Shareholder and/or the Company resulting from any breach of any covenant made
herein by ANI, including all actions, suits, judgments, costs and legal and
accounting expenses incident to any of the foregoing. Media General and each
Class A Shareholder hereby agrees to indemnify and hold ANI and the Company
harmless from and against any damage to ANI and/or the Company resulting from
any breach of any covenant made herein by Media General or such Class A
Shareholder, as the case may be, including all actions, suits, judgments,
costs and legal and accounting expenses incident to any of the foregoing.
8.02 NOTICES. All notices and other communications
hereunder shall be in writing and deemed to have been duly given if delivered
by hand or mailed, postage prepaid by certified mail, return receipt
requested or by facsimile transmission to the following persons and addresses:
(a) To the Company, or ANI Mr. W. Xxxx Xxxxxxxxx,
Vice Chairman
Denver Newspapers, Inc.
Xxxxx 000
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
-39-
With Copies to: Xxxxxx X. Xxxxx, Xx., Esq.
Verner, Liipfert, Bernhard,
XxXxxxxxx & Hand Chartered
Xxxxx 000
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000) 000-0000
and
Xxxxx Xxxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
(b) To Media General: Mr. J. Xxxxxxx Xxxxx III
Chairman
Media General, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
and
Xxxxxx X. Xxxxxxx, Esq.
General Counsel & Secretary
Media General, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
With Copies to: Xxxxxx Xxxx, Esq.
Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
or to such subsequent persons and addresses as may be specified by notice.
All notices shall be deemed to be given when received, PROVIDED that any
notice received after business hours or on a day that is not a business day
shall be deemed to be received on the next business day.
-40-
8.03 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement contains the entire agreement among the
parties and it may not be modified, changed, or amended unless the same be in
writing and signed by all of the parties hereto, or their successors or
assigns.
8.04 SUCCESSORS AND ASSIGNS. Subject to Section 1.04, all
of the terms and conditions herein contained shall bind and inure to the
benefit of each of the parties hereto, their successors, assigns,
distributees, legatees, heirs, executors, administrators and personal
representatives and also any receiver or trustee in bankruptcy or insolvency,
including without limitation on Garden State following the Contribution and
on the surviving corporation in the merger of the Company and The Denver Post
(which shall be deemed to be the "Company" hereunder) and the surviving
corporation in the merger of ANI and Garden State (which shall be deemed to
be "ANI" hereunder).
8.05 BROKERS AND EXPENSES. Except as set forth in this
Section 8.05, the Parties agree to pay their respective expenses incurred in
connection with this Agreement. The Company agrees to (a) pay the legal and
accounting expenses necessarily and appropriately incurred by the Company in
the implementation of the transactions contemplated hereby (excluding any
fees relating to the negotiation and documentation of such transactions) and
(b) reimburse Media General for the expenses incurred by no more than two
persons in attending meetings of the Board of Directors of the Company and
any of its subsidiaries and any committees thereof, including the cost of air
travel not to exceed the cost of first class airfare. Each of Media General
and ANI agrees to indemnify the other and the Company against and hold the
others harmless from any and all liabilities (including without limitation,
cost of counsel) to any persons claiming brokerage commissions or finder's
fees on account of services
-41-
purported to have been rendered on behalf of, or loss of investment rights or
opportunity caused by, the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.
8.06 WAIVERS. The terms, covenants, representations,
warranties or conditions of this Agreement may be waived only by a written
instrument executed by the Party waiving compliance. The failure of any Party
at any time or times to require performance of any provision hereof shall in
no manner affect the right at a later time prior to any subsequent change in
capital structure to enforce the same. No waiver by any Party of any breach
of any term, covenant, representation, condition or warranty contained in
this Agreement, whether by contract or otherwise, in any one or more
instances, shall be deemed to be or construed as a waiver of any other breach
of any other term, covenant, representation, condition or warranty contained
in this Agreement.
8.07 ANNOUNCEMENT. Such public announcement or "release"
describing the transactions provided for herein as may be required by
applicable law or regulation shall be made by the Parties, the same to be
approved in advance by all Parties. No other public announcement or release
with respect to the transactions provided for herein shall be made by any
Party, unless the same shall be approved in advance by the other Parties
hereto.
8.08 CAPTIONS AND PRONOUNS. The captions appearing in this
Agreement are included solely for the convenience of the parties and shall
not be given any effect in construing this Agreement. Wherever singular
pronouns are used herein, the same shall include the plural, and vice versa
and wherever words of any gender are used herein, such words shall include
other genders.
-42-
8.09 CHOICE OF LAW. This Agreement shall be construed and
interpreted in accordance with the internal laws of the State of New York,
without regard to the conflict of laws provisions thereof.
8.10 REGISTRATION RIGHTS. From and after the date hereof,
Media General, as holder of the shares of Class A Common Stock, shall have
the Registration Rights with respect to such shares of Class A Common Stock
as set forth in Exhibit A hereto, which Exhibit is hereby incorporated in
full herein, and with respect to any other "REGISTRABLE SECURITIES," as
defined therein.
8.11 FACSIMILE SIGNATURES; COUNTERPARTS. This Agreement may
be executed by facsimile signatures and in one or more counterparts, each of
which shall be deemed an original and all of which together will constitute
one and the same instrument.
8.12 EQUITABLE RELIEF. The parties hereby acknowledge that
monetary damages are insufficient to adequately remedy the damages which will
accrue, or which have accrued, to a party hereto by reason of a failure to
perform any of the obligations required under this Agreement. Therefore, if
any Party hereto shall institute any action or proceeding to enforce the
provisions hereof, any Person (including the Company) against whom such
action or proceeding is brought hereby waives the claim or defense therein
that such Party or personal representative has or have an adequate remedy at
law, and such Person shall not advance in any such action or proceeding the
claim or defense that such remedy at law exists.
-43-
IN WITNESS WHEREOF, the parties have signed this Agreement
as of the date and year first shown above.
DENVER NEWSPAPERS, INC.
By:
------------------------------------
Its: Executive Vice President and Chief
Financial Officer
MEDIA GENERAL, INC.
By:
------------------------------------
Its:
----------------------------------
MEDIANEWS GROUP, INC.
By:
------------------------------------
Its: Executive Vice President and Chief
Financial Officer
GARDEN STATE NEWSPAPERS, INC., agrees to
be bound by this Agreement as "ANI"
following the Contribution
By:
------------------------------------
Its: Executive Vice President and Chief
Financial Officer
-44-
EXHIBIT A
REGISTRATION RIGHTS
1. CERTAIN DEFINITIONS. As used in this Exhibit A, the
following phrases shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the
Securities Act.
"COMMON STOCK" shall mean the Class A Common Stock and the
Class B Common Stock.
"DENVER SHAREHOLDERS' AGREEMENT" shall mean the Third Amended
and Restated Shareholders' Agreement, dated as of June 30,
1999, of which this Exhibit A is a part.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934
or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in
effect at the time.
"HOLDER" shall mean any person who is the owner of record of
any of the Registrable Securities.
"REGISTRABLE SECURITIES" shall mean the shares of Class A
common stock, par value of $1.00 per share (the "CLASS A COMMON
STOCK"), of Denver Newspapers, Inc., a Delaware corporation
(the "COMPANY") held by Media General, Inc. on June 30, 1999,
or hereafter acquired by any Class A Shareholders pursuant to
Section 3.01 of the Denver Shareholders' Agreement and any
other securities that may be issued or issuable by the Company,
or any successor of the Company, as a dividend or distribution
upon or in exchange for or in replacement or conversion of such
shares (including any shares of Class B common stock, par value
of $1.00 per share ("CLASS B COMMON STOCK") issued upon
conversion of the Class A Common Stock), or any such other
securities. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities
when (a) a Registration Statement with respect to the sale of
such securities shall have become effective under the
Securities Act and such securities shall have been disposed of
in accordance with such Registration Statement, (b) they shall
have been sold as permitted by, and in compliance with, Rule
144 (or successor provision) promulgated under the Securities
Act, (c) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further
transfer under the Securities Act or the Denver Shareholders'
Agreement shall have been delivered by the Company and
subsequent public distribution of them shall not require
registration of them under the Securities Act, or (d) they
shall have ceased to be outstanding.
"REGISTRATION STATEMENT" shall mean a Registration Statement
filed or to be filed by the Company to register under the
Securities Act a sale of any of the Registrable Securities by
or for the account of any Holder. Such term includes any
prospectus included in the Registration Statement.
-2-
"SECURITIES ACT" shall mean the Securities Act of 1933 or any
similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at
the time.
"SELLING HOLDERS" shall mean the Holders of Registrable
Securities included in a registration under either Section 2 or
Section 3 of this Exhibit A.
"TRANSFER" shall mean any sale or other disposition of any
Registrable Securities which would constitute a sale thereof
under the Securities Act.
All other capitalized terms not otherwise defined herein shall
have the meaning assigned to such terms in the Denver
Shareholders' Agreement.
2. PIGGYBACK REGISTRATION.
(a) If at any time the Company determines that it will file a
Registration Statement for any public offering of its securities, either for
its own account or the account of any security holder (a "PIGGYBACK
REGISTRATION"), then the Company shall give written notice to each Holder, at
least 45 days in advance of filing such Registration Statement, that such
filing is expected to be made (the "PIGGYBACK Notice"). Such Notice shall
also be given by the Company to all other holders of the Company's securities
that are entitled to registration rights with respect to such securities and
all such holders shall be offered the opportunity to have such securities
included in the Piggyback Registration. Such Notice to each Holder shall be
deemed to be confidential information about the Company and the Holder hereby
agrees to maintain the confidentiality of such information and shall not,
directly or indirectly, take any action (including, without limitation, the
purchase or sale of the Company's securities), with respect to
-3-
such information that is inconsistent with the confidential nature of such
information. Upon the written request of any Holder received by the Company
no later than 30 days following the Piggyback Notice (the "PIGGYBACK
REQUEST"), and subject to the conditions set forth in this Section 2, the
Company shall include in such Registration Statement all, but not less than
all, of the Registrable Securities held by such Holder for the purpose of
registering those Registrable Securities for sale by or for the account of
such Holder. The Company shall have exclusive control over the filing,
amending, withdrawal and other actions regarding such Registration Statement
in accordance with the provisions of Section 2(c) hereof. The Company shall
have no obligation to give notice to any Holder with respect to the filing
of, or to include any Registrable Securities for any Holder in, any
Registration Statement on Form S-4 or Form S-8 (or successor forms thereto).
(b) If (i) the securities to be sold by the Company pursuant to
a Registration Statement described in Section 2(a) hereof or (ii) none are to
be sold by the Company then, if the majority of the securities to be sold by
others pursuant to any such Registration Statement, are to be sold in any
underwritten public offering and are of the same class as the Registrable
Securities, the right of any Holder to have the Registrable Securities
included in the same Registration Statement may be conditioned upon the
inclusion of such Holder's Registrable Securities in the same underwriting.
The Company, all Selling Holders and all other security holders proposing to
sell securities in such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters.
Notwithstanding any other provisions of this Section 2(b), if the managing
underwriter, which shall be a reputable and experienced firm selected by the
Company, determines that marketing factors require a limitation of the number
of securities to be included in the underwriting, the
-4-
managing underwriter, in its sole discretion, may either eliminate all
Registrable Securities from such underwriting, or ratably limit the number of
Registrable Securities to be included in the underwriting for all Selling
Holders. The Company shall advise all Holders who shall have requested
inclusion of their Registrable Securities in the same underwriting of the
aggregate number of Registrable Securities that may be included for all
Selling Holders. Such aggregate number shall be allocated among all such
Selling Holders in proportion, as nearly as practical, to the number of
Registrable Securities for which each Selling Holder requested registration.
No Registrable Securities excluded from an underwriting by reason of such
marketing limitation shall be included in the Registration Statement. If any
Holder disapproves of the terms of the underwriting, he may elect to withdraw
his Registrable Securities by giving written notice to the Company and the
managing underwriter. After receiving any such Notice, the Company shall
withdraw those Registrable Securities from the Registration Statement. If a
withdrawal of Registrable Securities or any withdrawal of other securities
(except a complete withdrawal of all securities that were to be sold by the
Company, in which case the Company may withdraw the Registration Statement in
its entirety) makes it possible, within the marketing limitation set by the
managing underwriter and the Company, to include in the underwriting a
greater number of Registrable Securities held by other Selling Holders
participating in such underwriting, then to the extent practical, without
delaying the underwriting, the Company shall offer to all Selling Holders who
then have Registrable Securities included in the underwriting an opportunity
to include additional Registrable Securities in the proportion previously
described in this Section 2(b).
(c) After filing such Registration Statement, the Company shall
use its best efforts and shall take all appropriate actions to cause such
Registration Statement to become
-5-
effective as soon as practical. After such Registration Statement becomes
effective, the Company shall use its best efforts and shall take all
appropriate actions to maintain the effectiveness of such Registration
Statement for such reasonable period, not exceeding 15 months, as the Selling
Holders participating in such registration may require to complete their
contemplated sales in compliance with the Securities Act. So long as the
Registration Statement remains in effect, the Company shall furnish to the
Selling Holders participating in such registration and their underwriters
such quantities of each prospectus included in the Registration Statement as
they may reasonably request.
3. REGISTRATION ON REQUEST.
(a) REQUEST. Subject to Section 3(i) hereof, at any time and
from time to time, upon the written request of one or more Holders (the
"INITIATING HOLDERS") of Registrable Securities representing not less than
25% of the Registrable Securities that the Company effect the registration
under the Securities Act of all or part of such Initiating Holders'
Registrable Securities (a "DEMAND NOTICE"), the Company will promptly give
written notice of such requested registration to all registered Holders of
Registrable Securities, and thereupon the Company will use its best efforts
to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company
has been so requested to register by such Initiating Holders, and
(ii) all other Registrable Securities which the
Company has been requested to register by the Holders thereof by
written request given to the Company within 30 days after the giving of
such written notice by the Company (the "REQUESTING HOLDERS"), all to
the extent requisite to permit the disposition of the Registrable
Securities so to be registered.
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(b) REGISTRATION OF OTHER SECURITIES. Whenever the Company
shall effect a registration pursuant to this Section 3 in connection with an
underwritten offering by one or more Selling Holders of Registrable
Securities, no securities other than Registrable Securities shall be included
among the securities covered by such registration unless (a) the managing
underwriter of such offering shall have advised each Selling Holder of
Registrable Securities to be covered by such registration in writing that the
inclusion of such other securities would not adversely affect such offering
or (b) the Selling Holders of not less than 66-2/3% of all Registrable
Securities to be covered by such registration shall have consented in writing
to the inclusion of such other securities.
(c) REGISTRATION STATEMENT FORM. Registrations under this
Section 3 shall be on such appropriate registration form of the Commission as
shall be selected by the Company and as shall be reasonably acceptable to the
Selling Holders of more than 50% of the Registrable Securities so to be
registered. The Company agrees to include in any such Registration Statement
all information which, in the opinion of counsel to the Selling Holders of
Registrable Securities so to be registered and counsel to the Company, is
required to be included.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 3 shall not be deemed to have been effected (i)
unless a Registration Statement with respect thereto has become effective,
(ii) if after it has become effective, such registration is interfered with
by any stop order, injunction or other order or requirement of the Commission
or other governmental agency or court for any reason not attributable to the
Selling Holders and has not thereafter become effective, or (iii) if the
conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or
waived, other than by reason of a failure on the part of the Selling Holders.
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(e) SELECTION OF UNDERWRITERS. The underwriter or underwriters
of each underwritten offering of the Registrable Securities so to be
registered under this Section 3 shall be selected by the Initiating Holders
with the consent of the Selling Holders (including the Initiating Holders) of
more than 50% of the Registrable Securities so to be registered.
(f) PRIORITY IN REQUESTED REGISTRATION. If the managing
underwriter of any underwritten offering shall advise the Company in writing
(with a copy to each Selling Holder of Registrable Securities requesting
registration) that, in its opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering within a price range acceptable to the Selling Holders of 66-2/3% of
the Registrable Securities requested to be included in such registration, the
Company will include in such registration, to the extent of the number which
the Company is so advised can be sold in such offering, Registrable
Securities requested to be included in such registration, pro rata among the
Selling Holders requesting such registration on the basis of the percentage
of the Registrable Securities of such Selling Holders requested so to be
registered. No Registrable Securities excluded from an underwriting by reason
of proration under this Section 3(f) shall be included in the Registration
Statement. If the Selling Holders of more than 50% of the Registrable
Securities so to be registered elect to sell their Registrable Securities in
an underwritten public offering, the right of any other Holder to have
Registrable Securities included in the same Registration Statement shall be
conditioned upon the inclusion of such Holder's Registrable Securities in the
same underwriting. All Holders proposing to sell their Registrable Securities
in such underwriting shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected in the manner set forth
above. If any Holder disapproves of the terms of the underwriting, he may
elect to withdraw his Registrable Securities by giving written notice to
-8-
the Company and the managing underwriter. After receiving any such notice the
Company shall withdraw those Registrable Securities from the Registration
Statement.
(g) STOCK SPLIT. In connection with an initial public offering,
upon request from the Initiating Holders, or the managing underwriters
selected in accordance with Section 3(e), the Company and its shareholders
shall promptly effect a stock split of the Common Stock on a pro rata basis
to provide for such number of shares as the Initiating Holders or such
managing underwriter determines is appropriate.
(h) LIMITATIONS IF COMPANY OFFERING IN PROCESS. After the
initial public offering of Registrable Securities, notwithstanding the other
provisions of this Section 3, the Company shall not be obligated to file any
Registration Statement pursuant to Section 3 hereof during any period
commencing with the date of filing of a Registration Statement under the
Securities Act pertaining to an underwritten public offering of Common Stock
to be sold by or for the account of the Company and ending three months after
the effective date of such Registration Statement, provided that (i) the
procedures of Section 2 are complied with in connection with such offering,
(ii) the managing underwriter determined that marketing factors required the
exclusion of all Registrable Securities and (iii) during such period the
Company and the managing underwriter in good faith use reasonable efforts to
cause such Registration Statement to become effective and to complete the
public offering covered by such Registration Statement.
(i) LIMITATIONS ON REGISTRATION ON REQUEST. Notwithstanding
anything in this Section 3 to the contrary, in no event will the Company be
required to effect, in the aggregate pursuant to this Section 3, without
regard to the holder of Registrable Securities making such request, more than
three registrations during the term of this Agreement.
-9-
4. REGISTRATION AND QUALIFICATION PROCEDURES. Whenever the Company
is required by the provisions of Section 3 to use its best efforts to effect
the registration of any Registrable Securities under the Securities Act or
the Company is required by the provisions of Section 2 to include Registrable
Securities in any registration of its securities, the Company will:
(i) as expeditiously as possible and in any event within
60 days of the Demand Notice in the case of a request for registration
pursuant to Section 3, prepare and file with the Commission a
Registration Statement with respect to such Registrable Securities in
connection with which the Company will give each Selling Holder, the
underwriters, if any, their respective counsel and accountants, the
opportunity to participate in the preparation of such Registration
Statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers
and the independent public accountants that have examined its financial
statements as shall be necessary, in the opinion of such Selling
Holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act;
(ii) in the case of registration required by Section 3,
use its best efforts to cause such registration statement to become
effective not later than 120 days after the Demand Notice;
(iii) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the prospectus used
in connection therewith as may be necessary to keep such Registration
Statement effective and the prospectus current and to comply with the
provisions of the Securities Act with respect to the sale of the
securities
-10-
covered by such registration statement whenever the Selling Holder of
such securities shall desire to sell the same; PROVIDED, HOWEVER, the
Company shall have no obligation to file any amendment or supplement
at its own expense more than 15 months after the effective date of
such Registration Statement;
(iv) furnish to each Selling Holder such numbers of copies
of preliminary prospectuses and prospectuses and each supplement or
amendment thereto and such other documents as each such Selling Holder
may reasonably request in order to facilitate the sale or other
disposition of the Registrable Securities owned by such Selling Holder
in conformity with (A) the requirements of the Securities Act and (B)
such Selling Holders' proposed method of distribution;
(v) register or qualify the Registrable Securities
covered by such Registration Statement under the securities laws of
such jurisdictions within the United States as each Selling Holder
shall reasonably request, and do such other reasonable acts and things
as may be required of it to enable each Selling Holder to consummate
the sale or other disposition in such jurisdictions of the securities
owned by such Selling Holder; PROVIDED, HOWEVER, that the Company shall
not be required to (A) qualify as a foreign corporation or consent to a
general and unlimited service of process in any such jurisdictions, or
(B) qualify as a dealer in securities;
(vi) furnish, at the request of any Selling Holder on the
date such Registrable Securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being
sold through underwriters, on the date the Registration Statement with
respect to such Registrable Securities becomes effective, (i) an
opinion, dated such date, of counsel representing the Company for the
purposes of such
-11-
registration, addressed to the underwriters, if any, and to each
Selling Holder, covering such legal matters with respect to the
registration in respect of which such opinion is being given as the
Selling Holder of such Registrable Securities may reasonably request
and are customarily included in such opinions and (ii) letters, dated,
respectively, (l) the effective date of the Registration Statement and
(2) the date such securities are delivered to the underwriters, if any,
for sale pursuant to such registration, from a firm of independent
public accountants of recognized national standing selected by the
Company, addressed to the underwriters, if any, and to the Selling
Holder making such request, covering such financial, statistical and
accounting matters with respect to the registration in respect of which
such letters are being given as the Selling Holder of such Registrable
Securities may reasonably request and are customarily included in such
letters;
(vii) enter into and perform an underwriting agreement with
the managing underwriter, if any, selected as provided herein,
containing customary (A) terms of offer and sale of the Registrable
Securities, payment provisions, underwriting discounts and commissions,
and (B) representations, warranties, covenants, indemnities, terms and
conditions; the Selling Holders may, at their option, require that any
or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Selling
Holders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Selling Holders; such
Selling Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such Selling
Holders and
-12-
such Selling Holders' intended method of distribution and any other
representation required by law and Section 7(c) hereof; and
(viii) notify each Selling Holder at any time when a
prospectus relating to the registration is required to be delivered
under the Securities Act, upon discovery that, or upon happening of any
event as a result of which, the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
and at the request of any such Selling Holder promptly prepare and
furnish to such Selling Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
5. ALLOCATION OF EXPENSES. If the Company is required by the
provisions hereof to use its best efforts to effect the registration or
qualification under the Securities Act or any state securities laws of any
Registrable Securities, the Company shall pay all expenses in connection
therewith (other than underwriting discounts and commissions attributable to
the Registrable Securities being registered or qualified), including, without
limitation, (i) all expenses incident to filing with the National Association
of Securities Dealers, (ii) registration fees, (iii) printing expenses, (iv)
accounting and legal fees and expenses, except to the extent in a
registration pursuant hereto the holders of Registrable Securities elect to
engage accountants or attorneys in
-13-
addition to the accountants and attorneys engaged by the Company and one firm
of attorneys for the Selling Holders, in which case such holders shall pay
the fees and expenses of such additional accountants and attorneys, (v)
expenses of any special audits incident to or required by any such
registration or qualification, (vi) premiums for insurance in such amount, if
any, deemed appropriate by the managing underwriter and (vii) expenses of
complying with the securities laws of any jurisdictions in connection with
such registration or qualification.
6. INDEMNIFICATIONS. In connection with any Registration Statement
filed pursuant to this Exhibit A, the Company shall indemnify and hold
harmless each Selling Holder whose Registrable Securities are included in the
Registration Statement, each underwriter who may purchase from or sell any
Registrable Securities for any such Selling Holder and each person who
controls any such Selling Holder or any such underwriter, within the meaning
of the Securities Act or the Exchange Act and against any and all losses,
claims, damages, and liabilities (joint or several) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any preliminary prospectus, prospectus or offering
material or any related state securities or "blue sky" applications or other
instruments or caused by any omission or alleged omission to state in the
Registration Statement or any preliminary prospectus, prospectus or offering
material or any related state securities or "blue sky" applications or other
instruments any material fact required to be stated or necessary to make the
statements which are made, in light of the circumstances under which they
were made, not misleading, or any violation or alleged violation of the
Exchange Act, state securities laws, or the rules and regulation thereunder,
together with the costs of investigating and defending any such claim
(including reasonable attorneys' fees) except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission or
-14-
alleged omission based upon information furnished in writing to the Company
by such Selling Holder, underwriter or controlling person expressly for use
in the Registration Statement or any related state securities or "blue sky"
applications or other instruments. Each Selling Holder whose Registrable
Securities are included in any Registration Statement filed pursuant to this
Exhibit A shall severally, and not jointly, indemnify and hold harmless the
Company, its directors, each officer signing the Registration Statement, each
other person (including each other Holder) whose securities are included in
the Registration Statement, each underwriter who may purchase from or sell
any securities for the Company or any other person pursuant to the
Registration Statement and each person, if any, who controls the Company, any
such other person or any such underwriter, within the meaning of the
Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, preliminary
prospectus, prospectus or offering material or any related state securities
or "blue sky" applications or other instruments or caused by any omission or
alleged omission to state therein any material fact required to be stated or
necessary to make the statements which are made, in light of the
circumstances under which they were made, not misleading, insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
alleged untrue statement or omission or alleged omission based upon
information furnished in writing signed by an officer of the Selling Holder
from whom indemnification is sought expressly for use in the Registration
Statement or any related state securities or "blue sky" applications or other
instruments. To the extent the provisions contained in this Exhibit A are in
conflict with any indemnification provisions that are included in any
underwriting agreement entered into by the Company and/or
-15-
one or more Selling Holders with one or more underwriters in connection with
any underwritten public offering registered under any Registration Statement
filed pursuant to this Exhibit A, the provision of the underwriting agreement
shall govern. The indemnities provided for in this Section 6 shall be
independent of and in addition to any other indemnity provisions of the
Agreement.
7. MISCELLANEOUS.
(a) Each Selling Holder whose Registrable Securities are
included in any Registration Statement filed pursuant to this Exhibit A shall
furnish to the Company such information regarding such Selling Holder and the
sale proposed by such Selling Holder as may reasonably be required for
inclusion in the Registration Statement or any related state securities or
"blue sky" applications or other instruments, as may be necessary to provide
supplement information to the Commission, the National Association of
Securities Dealers, Inc. or any administrator of any state securities or
"blue sky" law, or as the Company or any underwriter may reasonably request.
(b) The registration rights granted in this Exhibit A are not
assignable, in whole or in part, without the prior written consent of the
Company, except such rights shall transfer with the ownership of the
Registrable Securities in accordance with the Denver Shareholders' Agreement.
(c) As a condition to having Registrable Securities included in
any Registration Statement filed pursuant to this Exhibit A, such Holder may
be required to agree, in a manner acceptable to the Company, that in selling
the Registrable Securities the Holder will comply with all applicable laws
and regulations including, but not limited to, Regulation M, if applicable,
promulgated under the Securities Exchange Act of 1934, as amended.
-16-
(d) All rights of Holders of Registrable Securities under this
Exhibit A are subject to compliance with and the rights of the Company and
MediaNews Group, Inc. (and their successors) under Article 2 of the Denver
Shareholders' Agreement.
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