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EXHIBIT 10.2.1
AMENDED AND RESTATED
JOINT OPERATING AGREEMENT
BETWEEN
STAR PUBLISHING COMPANY
AND
CITIZEN PUBLISHING COMPANY
December 22, 1988
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AMENDED AND RESTATED
JOINT OPERATING AGREEMENT
BETWEEN
STAR PUBLISHING COMPANY
AND
CITIZEN PUBLISHING COMPANY
December 22, 1988
TABLE OF CONTENTS
Page
ARTICLE 1: THE AGENCY
1.1 Formation. . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Initial Capital Contribution of Star . . . . . . . . . 4
1.3 Initial Capital Contribution of Citizen. . . . . . . . 7
1.4 Valuation of Initial Capital Contributions . . . . . . 10
1.5 Other Capital Contributions. . . . . . . . . . . . . . 11
1.6 Failure to Make Payments . . . . . . . . . . . . . . . 11
1.7 Dissolution of TNI . . . . . . . . . . . . . . . . . . 12
1.8 Assumption of Liabilities. . . . . . . . . . . . . . . 13
1.9 Employees. . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2: ACTIVITIES OF THE AGENCY
2.1 Publication and Operations . . . . . . . . . . . . . . 14
2.2 Capital Assets . . . . . . . . . . . . . . . . . . . . 16
2.3 Editorial Independence . . . . . . . . . . . . . . . . 17
2.4 News and Editorial Services and Expenses . . . . . . . 18
2.5 Budgets and Allocations of News Space. . . . . . . . . 21
ARTICLE 3: ALLOCATIONS AND OTHER FINANCIAL MATTERS
3.1 Distributions. . . . . . . . . . . . . . . . . . . . . 23
3.2 Allocations. . . . . . . . . . . . . . . . . . . . . . 23
3.3 Books and Records. . . . . . . . . . . . . . . . . . . 23
3.4 Financial Statements . . . . . . . . . . . . . . . . . 24
3.5 Auditors and Fiscal Year . . . . . . . . . . . . . . . 25
3.6 Bank Accounts. . . . . . . . . . . . . . . . . . . . . 25
3.7 TAX Returns. . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 4: GOVERNANCE OF THE AGENCY
4.1 Board of Directors . . . . . . . . . . . . . . . . . . 26
4.2 Officers of the Agency . . . . . . . . . . . . . . . . 29
4.3 Deadlocks. . . . . . . . . . . . . . . . . . . . . . . 30
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ARTICLE 5: DURATION; TERMINATION
Page
5.1 Term; Renewals . . . . . . . . . . . . . . . . . . . . . . 35
5.2 Termination; Dissolution of the Agency . . . . . . . . . . 35
5.3 Dissolution Prior to Expiration of Term. . . . . . . . . . 38
5.4 Termination at End of Term . . . . . . . . . . . . . . . . 44
5.5 Change of Control. . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 6: MISCELLANEOUS
6.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 48
6.3 Entire Understanding . . . . . . . . . . . . . . . . . . . 48
6.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.5 Governing Law; Modification . . . . . . . . . . . . . . . 49
6.6 Severability . . . . . . . . . . . . . . . . . . . . . . . 49
6.7 Further Assurances . . . . . . . . . . . . . . . . . . . . 50
6.8 Force Majeure. . . . . . . . . . . . . . . . . . . . . . . 50
6.9 Specific Performance . . . . . . . . . . . . . . . . . . . 51
6.10 No Third Party Beneficiaries . . . . . . . . . . . . . . . 51
6.11 Nature of Relationship . . . . . . . . . . . . . . . . . . 51
6.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 51
Exhibit A: Partnership Agreement
Exhibit B: License Agreement (Star)
Exhibit C: License Agreement (Citizen)
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AMENDED AND RESTATED
JOINT OPERATING AGREEMENT
THIS AMENDED AND RESTATED JOINT OPERATING AGREEMENT dated as of
December 22, 1988 between STAR PUBLISHING COMPANY, an Arizona corporation
("Star"), and CITIZEN PUBLISHING COMPANY, an Arizona corporation ("Citizen").
WHEREAS, Star publishes The Arizona Daily Star, a seven day per
week morning newspaper, including Sunday, and Citizen publishes the Tucson
Citizen, a weekday afternoon and Saturday newspaper, both in Tucson, Arizona;
WHEREAS, Star and Citizen, or their respective predecessors,
have entered into and are operating pursuant to that certain Operating Agreement
dated March 28, 1940, as amended by agreements dated June 15, 1953 and October
14, 1970 (collectively, the "Operating Agreement"), whereby Tucson Newspapers,
Inc., an Arizona corporation ("TNI"), was organized by Star and Citizen to
handle, manage and operate The Arizona Daily Star and Tucson Citizen, save and
except for the news and editorial departments of each of the newspapers, which
news and editorial departments have remained separate and independent;
WHEREAS, the current term of the Operating Agreement runs until
June 1, 1990 and, pursuant to the terms thereof, has been renewed and extended
for an additional twenty-five year period from such date;
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WHEREAS, Star and Citizen desire to reformulate their
arrangement to provide that the functions currently performed by TNI, a
corporation 50% of whose capital stock is owned by each of Star and Citizen,
will be performed by a general partnership that is 50% owned by each of Star and
Citizen, and to provide for the organization, operation and governance of such
partnership;
WHEREAS, the purpose and intent of this Agreement is to provide
a plan of common operation of the newspapers published by Star and Citizen, so
as to afford economy in money and effort, produce better newspapers for their
readers, improve acceptance for their advertisers, subserve public interests by
maintaining the separate identities, individuality and editorial and news
freedom and integrity of each of said newspapers, and ensure the ability of each
newspaper to maintain its journalistic characteristics and to meet the
highest standards of editorial quality and journalistic excellence; and
Whereas, this agreement continues to maintain as separate and
independent the respective news, editorial and reportorial operations,
departments and staffs (the "news operations" or "news departments") of Star and
Citizen, consistent with the requirements of the Newspaper Preservation Act, 15
U.S.C. Section 1801 et seq.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereby agree that the
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Operating Agreement shall be amended and restated in its entirety as follows:
ARTICLE 1
THE AGENCY
1.1 Formation.
(a) Star and Citizen will on the date hereof cause to be formed
under the laws of the State of Arizona a general partnership named "TNI
Partners" (such new partnership is referred to herein as the "Agency"), by
executing and delivering to each other the Partnership Agreement (the
"Partnership Agreement") in the form set forth as Exhibit A hereto, and by
making such filings and taking such other actions as are appropriate under
applicable Arizona law.
(b) Each of Star and Citizen shall have a 50% partnership
interest in the Agency and shall, as of the Effective Date, make the respective
initial capital contributions described in Sections 1.2 and 1.3 hereof.
(c) As used in this Agreement, the "Effective Date" shall be
12:01 A.M., Tucson, Arizona time, on December 26, 1988.
(d) Star and Citizen will cause the Agency, on the date hereof,
to become a party to this Agreement and to agree to perform all of the
obligations herein to be performed by it by signing this Agreement and
delivering executed copies hereof to Star and Citizen.
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1.2 Initial Capital Contribution of Star.
(a) Effective as of the Effective Date, Star hereby
contributes, assigns, transfers and conveys to the Agency all of its right,
title and interest (which Star represents and warrants to Citizen are free and
clear of any and all pledges, mortgages, security interests, liens or other
encumbrances except for those that do not materially affect use, value or
marketability), in and to the following property and assets (collectively, the
"Star Contributed Assets"):
(1) Star's interest in all trade accounts receivable and
contracts in existence on the Effective Date that arise from or in
connection with any activity or operation that has been carried on by TNI
as agent for Star and Citizen, including without limitation trade
accounts receivable and contracts arising out of or relating to the sale
or distribution of The Arizona Daily Star or the Tucson Citizen, the sale
of advertising in either such newspaper, or the printing or distribution
of any other material;
(2) Star's interest in any and all non-capital assets in
existence on the Effective Date that are jointly owned by Star and
Citizen and that are used or held for use in connection with, or that
arise from, any activity or operation that has been carried on by TNI as
agent for Star and Citizen; and
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(3) All shares of common stock of TNI owned by Star, which Star
represents and warrants to Citizen constitute 50% of TNI's outstanding
capital stock.
(b) The following assets shall not constitute any part of the Star
Contributed Assets but shall remain the separate property of Star:
(1) (i) The whole or any part of the name, title, and masthead
of The Arizona Daily Star, together with all names, titles and slogans
used exclusively in connection with The Arizona Daily Star and all
intangible rights and privileges of whatever kind belonging to or
incidental thereto, including any and all copyrights and trademarks
relating thereto, and any and all copyrights, and the right to renew the
same, on issues of The Arizona Daily Star published before, on or after
the Effective Date, and the right to reprint all or any part thereof
(collectively the "Star Names"), (ii) all lists relating to
subscriptions, bulk sales, circulation, dealers and sub-dealers of The
Arizona Daily Star, together with all records and other lists relating to
or concerning the following: routes, daily draws by editions,
distribution, delivery, sales, subscriptions and returns of The Arizona
Daily Star in any territory, all lists of dealers and agencies served by
all distribution methods in the city of Tucson, its
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metropolitan areas and in all cities and towns served by The Arizona Daily Star,
including a list of dealer and agency deposits, if any, and (iii) lists of all
advertisers and advertising contracts relating to The Arizona Daily Star and
related advertiser information, including dates of contracts, names and
addresses of advertisers, space contracted for, frequency of insertions, rates
per line, expiration dates and any special conditions, records requirements or
publication orders with advertisers with the dates thereof, as well as lists of
any special agreements or commitments with advertisers and all insertion orders
(the assets described in clauses (ii) and (iii) of this subsection being
referred to collectively as the "Star Intangibles"); provided however, that Star
shall grant to the Agency a royalty-free license covering the Star Names and the
Star Intangibles, in the form attached hereto as Exhibit B, which shall be
executed by Star and delivered to the Agency on the Effective Date;
(2) The library or "morgue" of The Arizona Daily Star, including all
files of clippings, photographs (negatives and positives) and related
publication material, together with all bound files and file copies of The
Arizona Daily Star and microfilms thereof;
(3) Any properties, assets and contract and other rights of Star used
or held for use solely in connection
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with the operation of the news department of The Arizona Daily Star;
(4) Star's interest in all capital assets in existence on the
Effective Date that are jointly owned by Star and Citizen and that are
used or held for use in connection with any activity or operation that
has been carried on by TNI as agent for Star and Citizen; and
(5) Any asset or property right of any kind or description
that is not specifically listed in section 1.2(a) hereof.
1.3 Initial Capital Contribution of Citizen.
(a) Effective as of the Effective Date, Citizen hereby
contributes, assigns, transfers and conveys to the Agency all of its right,
title and interest (which Citizen represents and warrants to Star are free and
clear of any and all pledges, mortgages, security interests, liens or other
encumbrances except for those that do not materially affect use, value or
marketability), in and to the following property and assets (collectively, the
"Citizen Contributed Assets"):
(1) Citizen's interest in all trade accounts receivable and
contracts in existence on the Effective Date that arise from or in
connection with any activity or operation that has been carried on by
TNI as agent for Star and Citizen, including without limitation trade
accounts
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receivable and contracts arising out of or relating to the sale or
distribution of The Arizona Daily Stag or the Tucson Citizen, the sale
of advertising in either such newspaper, or the printing or distribution
of any other material.
(2) Citizen's interest in any and all non-capital assets in
existence on the Effective Date that are jointly owned by Star and
Citizen and that are used or held for use in connection with, or that
arise from, any activity or operation that has been carried on by TNI as
agent for Star and Citizen.
(3) All shares of common stock of TNI owned by Citizen, which
Citizen represents and warrants to Star constitute 50% of TNI's
outstanding capital stock.
(b) The following assets shall not constitute any part of the
Citizen Contributed Assets but shall remain the separate property of Citizen:
(1) (i) The whole or any part of the name, title, and masthead
of Tucson Citizen, together with all names, titles and slogans used
exclusively in connection with Tucson Citizen and all intangible rights
and privileges of whatever kind belonging to or incidental thereto,
including any and all copyrights and trademarks relating thereto, and
any and all copyrights, and the right to renew the same, on
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issues of Tucson Citizen published before, on or after the Effective Date, and
the right to reprint all or any part thereof (collectively the "Citizen Names"),
(ii) all lists relating to subscriptions, bulk sales, circulation, dealers and
sub-dealers of Tucson Citizen, together with all records and other lists
relating to or concerning the following: routes, daily draws by editions,
distribution, delivery, sales, subscriptions and returns of Tucson Citizen in
any territory, all lists of dealers and agencies served by all distribution
methods in the City of Tucson, its metropolitan area and in all cities and towns
served by Tucson Citizen, including a list of dealer and agency deposits, if
any, and (iii) lists of all advertisers and advertising contracts relating to
Tucson Citizen and related advertiser information, including dates of contracts,
names and addresses of advertisers, space contracted for, frequency of
insertions, rates per line, expiration dates and any special conditions, records
requirements or publication orders with advertisers with the dates thereof, as
well as lists of any special agreements or commitments with advertisers and all
insertion orders (the assets described in clauses (ii) and (iii) of this
subsection being referred to collectively as the "Citizen Intangibles");
provided, however, that Citizen shall grant to the Agency a royalty-free license
covering
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the Citizen Names and Citizen Intangibles, in the form attached hereto
as Exhibit C, which shall be executed by Citizen and delivered to the
Agency on the Effective Date;
(2) The library or "morgue" of Tucson Citizen, including all
files of clippings, photographs (negatives and positives) and related
publication material, together with all bound files and file copies of
Tucson Citizen and microfilms thereof;
(3) Any properties, assets and contract and other rights of
Citizen used or held for use solely in connection with the operation of
the news department of Tucson Citizen;
(4) Citizen's interest in all capital assets in existence on
the Effective Date that are jointly owned by Star and Citizen and that
are used or held for use in connection with any activity or operation
that has been carried on by TNI as Agent for Star and Citizen; and
(5) Any asset or property right of any kind or description
that is not specifically listed in Section 1.3(a) hereof.
1.4 Valuation of Initial Capital Contributions. For all
purposes of this Agreement and the Partnership Agreement, the value of the
respective initial capital contributions of Star and Citizen shall be equal in
amount and shall each be equal to the sum of (i) 50% of the book value of the
aggregate
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trade accounts receivable referred to in Sections 1.2(a)(1) and 1.3(a)(1)
hereof, (ii) 50% of the book value of the aggregate non-capital assets referred
to in Sections 1.2(a)(2) and 1.3(a)(2) hereof, and (iii) 50% of the total
stockholders' equity of TNI as of the close of business on December 25, 1988.
1.5 Other Capital Contributions. In the event that the
Agency shall require funds or other capital contributions for any authorized
business purpose, such funds or contributions, unless obtained from outside
sources, shall be contributed by Star and Citizen on identical terms and in
equal amounts when and as authorized and directed by the Agency's Board of
Directors.
1.6 Failure to Make Payments. If either partner (a
"Defaulting Party") (i) fails to make any payment to the Agency including, but
not limited to, any properly authorized capital contribution, whether arising
under the terms of this Agreement or the Partnership Agreement, or (ii) fails
to pay its portion of any properly authorized capital expenditure, then the
other partner may lend the amount thereof to the Agency or make such payment on
behalf of the Defaulting Party, as the case may be, including any amounts or
payments necessary to cure the consequences of the failure by the Defaulting
Party to have made such payment. In either such event, no distributions
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shall thereafter be made by the Agency pursuant to Section 3.1 hereof or
otherwise until the full amount of such loan and/or such payment and/or the cost
of such cure that was made or incurred by the non-Defaulting Party (plus
interest from the date of default to the date(s) of such repayment(s) at a rate
per annum equal to the lesser of (i) 150% of the rate announced from time to
time by Xxxxxx Guaranty Trust Company of New York as its prime or reference rate
or (ii) the maximum rate permitted by applicable law as in effect from time to
time) has been paid in full to the non-Defaulting Party by the Agency. If at any
time both partners are entitled to the priority payments set out herein, then
priority payments shall be made in the same ratio as the respective payments due
to each of them bear to one another.
1.7 Dissolution of TNI. Effective on the Effective Date:
(i) the status of TNI as agent of Star and Citizen under the Operating Agreement
shall terminate, except for the discharge of any liabilities of TNI not assumed
by the Agency and any other winding up of TNI's affairs; and (ii) the Agency
will cause TNI to distribute to the Agency all or substantially all of TNI's
assets and property rights of every kind and description. As soon as practicable
after the Effective Date, the Agency will cause TNI to be dissolved under the
applicable provisions of Arizona law.
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1.8 Assumption of Liabilities. Effective as of the
Effective Date, the Agency will assume and agree to pay, perform and discharge
(i) any and all obligations and liabilities arising under the contracts assigned
to it pursuant to Section 1.2(a)(1) or Section 1.3(a)(1) hereof, and (ii) all
or substantially all of the contracts, obligations and liabilities of TNI,
contingent or otherwise, that are in existence as of the Effective Date.
1.9 Employees. It is the intention of the parties that:
(i) on the Effective Date, the Agency will employ, or offer to employ, all those
who were employees of TNI immediately before the Effective Date; (ii) the terms
and conditions of such employment by the Agency shall be the same or
substantially the same as those in effect with TNI immediately before the
Effective Date; and (iii) the Agency shall take such actions as are appropriate
with respect to any pension or employee benefit plans applicable to such
employees in order to ensure that such plans (or their substantial equivalent),
including credit for years of service, will be applicable to such employees in
their capacity as employees of the Agency.
Nothing herein, however, is intended to confer on any employee
of TNI or the Agency any legal or contractual right (as a third party
beneficiary or otherwise) to be or remain
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employed by the Agency, to be or remain employed by the Agency on any particular
terms and conditions of employment, or to be entitled to the continuation of, or
to participate in, any pension or employee benefit plan.
ARTICLE 2
ACTIVITIES OF THE AGENCY
The parties agree that from and after the Effective Date:
2.1 Publication and Operations.
(a) Subject to the provisions of Section 2.3 hereof, the Agency
shall print, produce, distribute, sell and market (both circulation and
advertising) The Arizona Daily Star seven mornings per week, including Sunday,
and Tucson Citizen weekday afternoons and Saturday. The Agency shall control,
supervise, manage and perform all operations (other than news/editorial
operations) involved in printing, producing, distributing, selling and marketing
the newspapers; shall determine the edition times of the newspapers; shall
purchase newsprint, materials and supplies as appropriate; shall solicit and
sell advertising space in such newspapers; shall collect for its own account all
accounts receivable, whether such accounts receivable come into existence prior
to, on or after the Effective Date; shall establish circulation and advertising
rates for such newspapers; and shall make all determinations
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and decisions and do any and all acts and things necessarily connected with the
foregoing activities;
(b) The Agency shall promote and market each newspaper in a
manner designed to enhance or improve the advertising in and circulation of each
newspaper and allow each newspaper to achieve its full market potential;
(c) The Agency shall provide all accounting and controlling
services necessary in connection with the business and affairs of the Agency and
the newspapers;
(d) The Agency shall receive and collect all of the receipts
and income relating to The Arizona Daily Star and the Tucson Citizen, and from
such income pay all operating expenses incident to the Agency's operations and
the publication of the newspapers in the manner and to the extent provided in
this Agreement; and
(e) Subject to Section 2.3 hereof, the Agency may engage in
other activities that would be appropriate for an entity that owns one or more
newspapers, including distributing or making available all or a portion of the
information or advertising in the newspapers by printed or other various means
of distribution; commercial printing, including commercial printing of other
publications; and any other activities necessary for or compatible with its
principal business. Star and Citizen shall retain exclusive rights to all news
and information content (including photographs) generated for
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publication in their respective newspapers, but any sale or licensing thereof
to wire services or otherwise shall be for the account of the Agency.
2.2 Capital Assets.
(a) The parties presently intend that the Agency will own no
capital assets, and that in producing, and carrying on the business functions
of, the newspapers under this Agreement, the Agency shall utilize plant,
property and equipment owned or leased jointly by Star and Citizen.
(b) Each of Star and Citizen agree that they shall make
available to the Agency such plant, property and equipment as is appropriate for
the Agency's operations, including all capital assets that are currently used or
held for use by TNI, Star or Citizen (whether or not jointly owned by Star and
Citizen) and including such capital assets as the Agency's Board of Directors
may in the future determine (pursuant to the budgeting process described in
Section 2.5(a) hereof) are necessary or appropriate for the Agency's operations
or for the news and editorial departments of Star and Citizen. In the case of
such future capital assets, Star and Citizen will jointly (on an equal basis)
acquire and fund the acquisition of such assets, and make the same available to
the Agency, Star or Citizen, as the case may be.
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(c) All operating costs, including costs of repair,
maintenance, light, heat, air conditioning, janitorial services and the like,
associated with all capital assets referred to in this Section 2.2 shall be an
operating expense of the Agency or, if paid by Star and/or Citizen in the first
instance, will be reimbursed by the Agency.
2.3 Editorial Independence. Preservation of the editorial
independence of each newspaper is of the essence of this Agreement. The
editorial and reportorial staffs of the respective newspapers shall be
independent and shall not be merged, combined or amalgamated, and their
editorial policies shall be independently determined. Star and Citizen shall
retain complete and exclusive control of the news operations, contracts, conduct
and contents, and the selection of the editors and news department employees,
for their respective newspapers. Neither Star, Citizen nor the Agency shall seek
to influence or to impair the independent news, editorial and reportorial voice
and content of any other party's newspaper. Each of Star and Citizen shall
independently develop standards for determining the acceptability of
advertising copy for publication in its newspaper, and the Agency shall apply
these standards in determining the acceptability of advertising copy for
publication in such newspaper. The news department of The Arizona Daily Star and
all employees engaged in said department
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shall be employed by and under the exclusive direction and control of Star. The
news department of Tucson Citizen and all employees engaged in said department
shall be employed by and under the exclusive direction and control of Citizen.
2.4 News and Editorial Services and Expenses.
(a) Each newspaper shall maintain a staff of news and
editorial employees appropriate to furnish, and shall furnish to the Agency,
complete news and editorial services necessary and appropriate for the
publication of such newspaper as provided in this Agreement. Each newspaper, in
furnishing news and editorial copy and like materials to the Agency for
publication, shall conform to the mechanical standards and limitations which
prevail in the Agency's plant or plants from time to time, including edition
times established by the Agency.
(b) Subject to the reimbursement provisions of Section 2.4(d)
hereof, all Editorial Expense (as defined in Section 2.4(c) hereof) of the news
department of The Arizona Daily Star shall be borne by Star and all Editorial
Expense of the news department of the Tucson Citizen shall be borne by Citizen.
(c) The term "Editorial Expense" as used in this Agreement
shall mean all costs and expenses associated with the news department of The
Arizona Daily Star or of the Tucson Citizen. Notwithstanding the foregoing,
Editorial Expense
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shall not include, and the reimbursement provisions of Section 2.4(d) hereof
shall not be applicable to, the following:
(1) the capital cost of office space, equipment, and
other capital assets that are owned by Star and/or Citizen or that are jointly
leased by Star and Citizen, and that in either case are related to the news
departments of The Arizona Daily Star or the Tucson Citizen, such assets to be
provided by, and the cost of which shall be borne equally by, Star and Citizen,
it being the intention of the parties that (i) the cost of such capital assets
that have been acquired before the Effective Date shall be borne by Star or
Citizen, as the case may be, as the separate owner thereof, (ii) the ownership
and cost of such capital assets that are jointly acquired on or after the
Effective Date shall be shared equally by Star and Citizen, and (iii) the rental
cost of any capital assets that either Star or Citizen may elect separately to
lease for its news department (and any operating costs associated therewith)
shall, subject to Section 4.1(a)(x) hereof, be deemed an Editorial Expense and
shall be subject to the reimbursement provisions of Section 2.4(d) hereof;
(2) any salary, benefits, memberships, travel or other
costs associated with the publisher (or equivalent local senior executive) of
either newspaper, or any executive or parent-level persons who are not full-time
employees of either newspaper, or any financial, accounting or controlling
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employees of either newspaper, all such costs to be borne separately by Star or
Citizen, as the case may be;
(3) the cost of defending, settling, paying or
discharging any liability or claim on account of anything published in the news
or editorial columns of either of the newspapers, or an account of the
advertising acceptability standards of either of the newspapers, where such
liability or claim does not result from an error in printing or the negligence
of an employee of the Agency, it being the intention of the parties that (i)
Star or Citizen, as the case may be, shall bear the full cost of such
liabilities or claims, (ii) the Agency shall bear, as an operating expense, the
full cost of liabilities or claims resulting from an error in printing or the
negligence of an employee of the Agency, and (iii) notwithstanding the
foregoing, costs incurred by Star or Citizen for insurance policies insuring
against such liabilities, as well as costs incurred for any pre-publication
review of material prepared for publication in the news or editorial columns of
either of the newspapers, shall in each case be deemed an Editorial Expense and
shall be subject to the reimbursement provisions of Section 2.4(d) hereof;
(4) any depreciation on any capital assets owned by
Star and/or Citizen;
(5) any charitable contributions made by Star or
Citizen, unless such contributions are specifically authorized
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by the Agency's Board of Directors as being in the Agency's best interest;
(6) any costs or fees incurred for any audit or review
of the separate financial statements of Star or Citizen; or
(7) any costs or expenses incurred for any special
cultural or promotional events that are not produced or sponsored by the Agency.
(d) On a monthly basis during each fiscal year, the Agency
shall, as part of its operating expenses, reimburse Star and Citizen for their
respective actual Editorial Expense, as documented by each newspaper. In the
event that the actual total Editorial Expense of either Star or Citizen for a
full fiscal year shall exceed the aggregate reimbursable Editorial Expense
budget for such newspaper applicable to such year, then the amount of such
excess shall be billed by the Agency to, and promptly paid by, Star or Citizen,
as the case may be. Nothing in this Agreement, however, shall in any way
whatsoever limit the amount of Editorial Expense that either Star or Citizen
may, in its sole discretion, elect from time to time to expend.
2.5 Budgets and Allocations of News Space.
(a) On an annual basis, the Agency's Board of Directors
will consider and approve, for the Agency's next fiscal year, capital and
operating budgets, including an
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aggregate reimbursable Editorial Expense budget for each of Star and Citizen,
all in a manner and amounts consistent with the purposes and intent of this
Agreement. The determination by the Board of the capital and operating budgets,
including an aggregate reimbursable Editorial Expense budget for each of Star
and Citizen, shall take into account, among other things, the editorial and news
expenses incident to the nature, frequency of publication and edition times of
the newspapers as contemplated by this Agreement. The Board may in its
discretion review and revise any of such budgets from time to time.
(b) As part of the budgeting process, the Agency's Board of
Directors will establish allocations of news space for The Arizona Daily Star
and the Tucson Citizen, which shall include "newshole banks" of space beyond the
normal allocations to be used for coverage of special stories or projects as
separately determined by Star or Citizen. Star or Citizen may exceed its
respective allocations of news space (including such "newshole bank") upon
reasonable notice to the Agency; provided, however, that (i) such excess must be
compatible with the Agency's production capability and scheduling, and (ii) the
newsprint and production costs associated with such excess shall be billed by
the Agency to, and promptly paid by, Star or Citizen, as the case may be, at the
end of the applicable fiscal year.
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ARTICLE 3
ALLOCATIONS AND OTHER FINANCIAL MATTERS
The parties agree that from and after the Effective Date:
3.1 Distributions. The Agency shall, after payment of its
operating expenses, distribute equally to Star and citizen all funds in excess
of funds reasonably needed by the Agency for the conduct of its business. Such
distributions shall be made at least monthly, or at more frequent intervals as
may be authorized by the Agency's Board of Directors.
3.2 Allocations. Net income or net loss of the Agency, as
determined in accordance with generally accepted accounting principles
consistently applied (except as otherwise agreed by the Agency's Board of
Directors), shall be allocated equally to Star and Citizen. Taxable income or
taxable loss of the Agency shall be allocated equally to Star and Citizen.
3.3 Books and Records. The Agency shall keep, at its
principal office, accurate, full and complete books of accounts and records,
wherein all transactions of the Agency, and of Star and Citizen (insofar as such
transactions of Star or Citizen relate to activities contemplated by this
Agreement), shall be entered in accordance with generally accepted
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accounting principles consistently applied (except as otherwise agreed by the
Agency's Board of Directors). Star, Citizen and their respective representatives
shall have the right to inspect, copy or reproduce, each at its own expense, the
books and records of the Agency.
3.4 Financial Statements. The Agency shall account monthly
to Star and Citizen for all revenues and expenditures of the Agency and keep
Star and Citizen regularly informed of its affairs and business. In addition,
the Agency shall cause to be delivered to Star and to Citizen the following
financial statements and reports of the Agency (and of each of Star and Citizen,
insofar as such statements of Star or Citizen relate to activities contemplated
by this Agreement) prepared, in each case, in accordance with generally accepted
accounting principles consistently applied (except as may otherwise be agreed by
the Agency's Board of Directors):
(a) promptly upon availability and in any event within
eight business days after the end of each fiscal month, (i) an
unaudited balance sheet as of the end of such month and a
comparison of such balance sheet with the balance sheet for the
same month of the fiscal year immediately preceding, and (ii)
an unaudited statement of income or loss for the interim period
through such month and the monthly period then
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ended, in reasonable detail, and a comparison of such statements
with statements for the same periods of the fiscal year
immediately preceding; and
(b) such other analytical reports relating to
activities contemplated by this Agreement as either Star or
Citizen (or their respective parent corporations) may from time
to time request.
3.5 Auditors and Fiscal Year. The independent auditors of
the Agency shall be selected by the Agency's Board of Directors. The Agency
shall keep its books and records on the basis of a 52/53 week fiscal year ending
on the last Sunday of each calendar year and on the basis of four fiscal
quarters, each composed of months of five, four and four weeks.
3.6 Bank Accounts. The Agency shall maintain bank accounts
in such banks or institutions as its Board of Directors from time to time shall
select, and such accounts shall be drawn upon by check signed by any person, and
in such manner, as may be designated by the Board of Directors. All moneys of
the Agency shall be deposited in the bank accounts of the Agency and all debts
and obligations of the Agency (except xxxxx expense items) shall be paid by
check or other prudent and customary method, including electronic transfer of
funds.
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3.7 Tax Returns. The Agency shall cause income and other
required tax returns for the Agency to be prepared and timely filed with the
appropriate authorities, making such elections as the Board of Directors shall
deem to be in the best interests of the Agency, Star and Citizen. The Agency
shall submit any such income tax filing to Star and Citizen for review at least
30 days prior to its filing date unless otherwise agreed to by Star and Citizen.
ARTICLE 4
GOVERNANCE OF THE AGENCY
4.1 Board of Directors.
(a) The business and affairs of the Agency shall be
managed by or under the direction of a Board of Directors in a manner consistent
with the purposes and intent of this Agreement. The Board of Directors shall
have and exercise final authority with respect to such business and affairs
except as otherwise provided in this Agreement or the Partnership Agreement.
Without limiting the generality of the foregoing, the Board of Directors shall
have the sole power and authority to take or authorize the Agency to take the
following actions:
(i) Elect and remove the President and other
officers of the Agency;
(ii) Approve and revise budgets as provided in
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Section 2.5 hereof;
(iii) Make any capital call to Star and Citizen
as provided in Section 1.5 (a) hereof;
(iv) Determine the timing of editions and the
production format of the two newspapers, and
determine whether the number of editions and/or
sections of either newspaper shall be changed;
(v) Determine circulation and advertising rates
for the two newspapers;
(vi) Determine the benefits and policies
applicable to employees of the Agency;
(vii) Approve any material contracts that the Agency
may enter into, including without limitation any
employment contract, any contract with any labor
union, any contract with a duration of more than one
year, any contract in any fiscal year involving a
value in excess of such amount as shall be determined
from time to time by the Board of Directors, and any
contract out of the ordinary course of business;
(viii) Determine whether and on what terms the Agency
shall incur indebtedness for borrowed money;
(ix) Select the Agency's outside auditors;
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(x) Determine whether and on what basis the Agency
shall acquire or lease any capital assets, and
determine whether and on what basis to reimburse Star
or Citizen for the cost of any capital assets that may
be acquired or leased separately by either of them;
(xi) Make any significant tax or accounting election
for the Agency;
(xii) Waive any right of the Agency to
receive any payment due to it from either Star or
Citizen; and
(xiii) Allocate appropriate office space and other
capital assets for the news departments and
executive officers of Star and Citizen.
(b) Unless otherwise agreed in writing by both Star and
Citizen, there shall be six members of the Agency's Board of Directors, three of
whom shall be appointed by Star, and three of whom shall be appointed by
Citizen. There shall in no event be an uneven number of directors, and each of
Star and Citizen shall at all times have the right to appoint an equal number of
directors. Each director shall hold office until he shall die, resign or be
removed (with or without cause, with or without notice) by the party by whom he
or she was appointed, whereupon such party shall appoint a successor.
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(c) As provided in the Partnership Agreement, if proper notice
(as set forth therein) of a meeting is given to all directors or waived, the
presence at any meeting of the Board of Directors (in person or represented by
proxy) of both (i) a majority of the total authorized number of directors, and
(ii) a majority of directors who were appointed by Star and a majority of
directors who were appointed by Citizen, shall constitute a quorum for the
taking of action. Subject to the written consent procedure described in Section
3.2(c) of the Partnership Agreement, the Board of Directors shall act on all
matters by an affirmative vote of both (i) a majority of directors present at
any meeting in person or by proxy, and (ii) a majority of those directors who
were appointed by Star and a majority of those directors who were appointed by
Citizen.
4.2 Officers of the Agency.
(a) The Agency shall have a President and such other officers
as the Board of Directors may from time to time determine. Officers shall serve
for a one-year term unless they earlier die, resign or are removed. Any officer
may be removed by the Board of Directors with or without cause or notice.
(b) Subject to this Agreement, the Partnership Agreement and
the determinations of the Board of Directors, the President shall have full
day-to-day operating authority,
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control and management of the business and affairs of the Agency.
(c) Subject to this Agreement and the Partnership Agreement,
any other officers of the Agency shall have such authority as is from time to
time determined by the Board of Directors.
4.3 Deadlocks. In the event of a controversy arising pertaining
to the affairs of the Agency wherein the members of the Board of Directors
representing Star and the members of the Board of Directors representing Citizen
are evenly divided, then:
(a) At the written call of Star or Citizen, which call shall
include a written statement specifically setting forth the matter or matters in
controversy and the proposed resolution or resolutions of the Board of Directors
on which the Board is deadlocked, the parties shall meet within fifteen (15)
days from the date on which the written call is served for the purpose of
resolving such controversy. If the parties shall also be evenly divided on the
matter or matters so specified for more than fifteen (15) days following the
date of such meeting, then either Star or Citizen (the "demanding party") may
thereafter demand that the matter or matters in controversy be submitted to
arbitration by serving a written demand on the other party.
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(b) In the event of a demand for arbitration, the parties
shall seek to mutually appoint a Disinterested Person (as hereafter defined) to
resolve the matter or matters in controversy. As used in this Section 4.3,
"Disinterested Person" means a person who (i) has no employment, professional or
financial interest in either party or in any person, firm, corporation or other
entity directly or indirectly controlling, controlled by, or under common
control with, either party and (ii) has significant experience in the newspaper
publishing industry (who shall include for purposes of this clause (ii) any
director of the American Newspaper Publishers Association).
(c) If, within thirty (30) days after service of the
demand for arbitration, the parties are unable to agree upon and mutually
appoint a single arbitrator who is a Disinterested Director and is willing to
serve, then the parties shall provide for the appointment of a panel of three
Disinterested Persons to resolve the matter or matters in controversy, as
follows:
(i) Each of Star and Citizen shall name an
arbitrator who is a Disinterested Person. Should the demanding party fail to
name an arbitrator who is a Disinterested Person within fifteen (15) days of
the lapse of the aforesaid thirty
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(30) day period, the demanding party's right to arbitration of the specific
matter or matters in controversy shall lapse. Should the other party fail to
name an arbitrator who is a Disinterested Person within the same fifteen (15)
day period, then the matter or matters in controversy shall be determined by
the Disinterested Person appointed by the demanding party, acting as a single
arbitrator.
(ii) In turn, the two arbitrators so named shall name
a third arbitrator who is a Disinterested Person. Should the two arbitrators,
within thirty (30) days after having been named as arbitrators as provided
herein, fail to name a third arbitrator who is a Disinterested Person and is
willing to serve, then the demanding party, within thirty (30) days of the
lapse of the aforesaid thirty (30) days, either alone or together with the other
party, may apply to the presiding judge for the United States District Court for
the District of Arizona, sitting in Tucson, or if he refuses, within fifteen
(15) days of such refusal, to the Senior Judge of the Pima County Superior
Court, Tucson, Arizona, to designate and appoint a third arbitrator, from a list
of six names submitted with the application to the court. The list shall contain
the names of three Disinterested Persons specified by each of the two
arbitrators. The three arbitrators shall decide the matter or matters in
controversy by majority vote. If the demanding
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party fails to make application to the court for designation and appointment of
a third arbitrator within the specified time period (which shall include the
names of three Disinterested Person designated by the arbitrator named by it),
the demanding party's right to arbitration of the specific matter or matters in
controversy shall lapse. If the other party fails to join in the application to
the court or to furnish the names of three Disinterested Persons designated by
the arbitrator named by it, then the matter or matters in controversy shall be
determined by the Disinterested Person initially appointed by the demanding
party, acting as a single arbitrator.
(d) The decision of a single arbitrator shall be rendered in
writing within thirty (30) days after his appointment, and where three
arbitrators are acting said decision shall be rendered in writing within thirty
(30) days after appointment of the third arbitrator; provided, however,
additional time to render a decision may be taken by the arbitrator or
arbitrators as he, she or they may deem reasonably necessary under the
circumstances. The written decision of the arbitrator or arbitrators, as the
case may be, shall be final and shall be binding upon the parties and the
Agency. All expenses and compensation of the arbitrator or the arbitrators, as
the case may be, in connection with any matter or matters in controversy shall
be paid by the Agency. No arbitrator(s) shall determine or have the power to
determine
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whether any party is in breach of any obligation under this Agreement or any
other agreement, it being the intention of the parties that the sole function of
the arbitration process described in this Section 4.3 is to provide a mechanism
to break a deadlock at the Board of Directors of the Agency on matters that are
appropriately before the Board and that are within the power and authority of
the Board of Directors pursuant to this Agreement.
(e) Notwithstanding the foregoing, the parties agree that if
the Board of Directors is evenly divided and therefore unable to approve, for
any fiscal year, the reimbursable Editorial Expense budget for either Star or
Citizen, as contemplated by Section 2.5(a) hereof, then the Board of Directors
shall nonetheless be deemed to have approved for such fiscal year an aggregate
reimbursable Editorial Expense budget that is identical to the budget (as the
same may have been revised by the Board of Directors from time to time) that was
actually approved by the Board of Directors for the next preceding year. If the
Board of Directors is evenly divided and unable to approve an aggregate
reimbursable Editorial Expense budget for two or more consecutive years, then
the controversy shall be resolved and a budget for the year in dispute shall be
set
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by way of the procedures described in Section 4.3(a)-(d) hereof. Pending such
resolution, the parties shall proceed as if such budget were identical to the
budget that was in effect for the next preceding year, but upon such resolution
such budget shall be effective retroactively to the beginning of the year for
which the Board of Directors shall not have approved, or shall not be deemed to
have approved, a budget.
ARTICLE 5
DURATION; TERMINATION
5.1 Term; Renewals. This Agreement shall run for a period
ending at the close of business on June 1, 2015, and may be renewed and extended
for subsequent periods of twenty-five (25) years each at the option of either
Star or Citizen. Unless two years' written notice is given by both Star and
Citizen that they desire to end this Agreement or any renewal hereof, this
Agreement shall continue in force for subsequent periods of twenty-five (25)
years each. Only by mutual written consent can this Agreement or any renewal
hereof be terminated.
5.2 Termination; Dissolution of the Agency.
(a) This Agreement shall terminate only upon expiration of its
term, including any renewals thereof, as provided in and subject to Section 5.1
hereof.
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(b) No partner shall cause the Agency to be dissolved except as
provided in this Section 5.2(b), and the Agency shall continue until so
dissolved. The Agency shall be dissolved upon the occurrence of any of the
following:
(i) expiration of the term of this Agreement, including
any renewals thereof, as set forth in Section 5.1 hereof; or
(ii) upon the bankruptcy of a partner. For purposes hereof,
"bankruptcy" means with respect to any partner, (A) the making
by such partner of an assignment for the benefit of creditors
or admitting in writing its inability to pay its debts when
due; or (B) the commencement by such partner with respect to
itself or its assets of any liquidation, dissolution,
bankruptcy, reorganization, insolvency or other proceeding for
the relief of financially distressed debtors; or (C) the
appointment for such partner, or a substantial part of such
partner's assets, of a receiver, liquidator, custodian or
trustee, and, if any of the events referred to in this clause
(C) occur involuntarily, the failure of the same to be
dismissed, stayed or discharged within 90 days; or (D) the
entry of an order for relief against such partner under Title
11 of the United States Code, or any other similar law enacted
by the United States
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Congress to regulate bankruptcies; or (E) the commencement against such partner
of any liquidation, dissolution, bankruptcy, reorganization, insolvency or other
proceeding for the relief of financially distressed debtors if such proceeding
remains undismissed for a period of 90 days; or
(iii) at the written election of a partner if a court of competent
jurisdiction, in a judgment no longer subject to appeal or judicial review, has
found that (1) the other partner (and only the other partner) has willfully or
persistently committed one or more material breaches of this Agreement or the
Partnership Agreement, and (2) such breaches materially and adversely frustrate
the essential purposes and intent of the parties as expressed in this Agreement,
and (3) the electing partner gave written notice to the other partner of such
breaches and such breaches were not substantially cured within 90 days after
such notice was given; it being the intention of the parties that either
partner may seek such a judgment in a court of competent jurisdiction without
being barred from doing so by reason of the provisions of Section 4.3 hereof,
which provisions are intended as a mechanism to break a deadlock at the Board of
Directors of the Agency as provided in
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Section 4.3(d) hereof, rather than as a mechanism to determine
whether any breaches of this Agreement or the Partnership
Agreement of the nature described in this Section 5.2(b)(iii)
have occurred; or
(iv) in the manner and subject to the requirements
provided in Sections 4.2 and 4.3 of the Partnership
Agreement.
No termination of this Agreement or dissolution of the
Agency shall be construed to release any partner from liability at law or in
equity to the other partner or the Agency arising out of any breach of the terms
of this Agreement or the Partnership Agreement.
5.3 Dissolution Prior to Expiration of Term.
As contemplated by Sections 5.1 and 5.2(a), it is the
intention of Star and Citizen that both this Agreement and the Partnership
Agreement shall continue in full force and effect until June 1, 2015 and
thereafter for successive 25 year periods so long as either Star or Citizen
wishes such renewals to occur. Star and Citizen recognize, however, that the
partnership between them may be dissolved upon bankruptcy of a partner (as
provided in Section 5.2(b)(ii) hereof) or pursuant to the provisions of Section
5.2(b)(iii) hereof or pursuant to the provisions of the applicable partnership
law of the State
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of Arizona. In order to take account of the possibility of such a dissolution,
the parties therefore wish to provide in this Section 5.3 for the orderly
continuation of this Agreement for its term and any renewals thereof in the
unlikely and unanticipated event of, and notwithstanding, any such dissolution
of the partnership between them that may occur.
For purposes of this Section 5.3 "Defaulting Partner" shall
mean (i) a partner who becomes bankrupt within the meaning of Section 5.2(b)(ii)
hereof, (ii) a partner whose breaches led to dissolution of the Agency in
accordance with Section 5.2(b)(iii) hereof, or (iii) a partner who causes a
dissolution of the Agency under applicable law but in contravention of this
Agreement or the Partnership Agreement (whether by such partner's express will
or otherwise); "Non-defaulting Partner" shall mean the partner other than the
Defaulting Partner; "Buying Party" shall mean the party who purchases the other
party's property rights (as described in Arizona Revised Statutes Sections
29-201 et seq. or other applicable law) in the Agency and other assets pursuant
to this Section 5.3; and "Selling Party" shall mean the party who sells its
property rights in the Agency and other assets pursuant to this Section 5.3.
If the Agency dissolves after the Effective Date and prior to
the expiration of the then current term of this Agreement (other than in the
manner and in accordance with the
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requirements provided in Sections 4.2 and 4.3 of the Partnership Agreement),
then:
(a) This Agreement and the joint operating arrangement
contemplated hereby (as modified, however, pursuant to this Section 5.3) shall
not terminate but shall continue for the remaining term of years (and any
renewals) hereof.
(b) The Non-defaulting Partner (and not the Agency or the
Board of Directors) shall, notwithstanding any provision of this Agreement or
the Partnership Agreement, have and exercise final authority with respect to
all the affairs of the Agency between the date of dissolution of the Agency
(the "Dissolution Date") and the Closing Date (as defined below), and the
Non-defaulting Partner may exercise any and all authority conferred in this
Agreement or the Partnership Agreement on the Board of Directors (whether by
majority vote, unanimous vote, or otherwise) or on the Agency.
(c) Within 90 days after the Dissolution Date, the Defaulting
Partner shall give written notice to the Non-defaulting Partner of a specific
dollar amount (the "Specified Amount"), which shall be a single number and not a
formula of any kind. If the Defaulting Partner fails to do so, the
Non-defaulting Partner shall give written notice to the Defaulting Partner of a
Specified Amount, and that shall be the Specified Amount for purposes of this
Section unless the Defaulting Partner within 10 days thereafter gives the
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Non-defaulting Partner written notice of a different Specified Amount, in which
event such different Specified Amount shall be the Specified Amount for purposes
of this Section. Within 180 days after the Dissolution Date, the Non-defaulting
Partner may give written notice to the Defaulting Partner of the Non-defaulting
Partner's election either (1) to sell all its property rights as a partner in
the Agency and all its property rights in capital assets used or held for use by
the Agency to the Defaulting Partner for the Specified Amount (in which event
the Non-defaulting Partner shall be the Selling Party and the Defaulting Partner
shall be the Buying Party), or (2) to purchase all the Defaulting Partner's
property rights as a partner in the Agency and all its property rights in
capital assets used or held for use by the Agency for the Specified Amount (in
which event the Non-defaulting Partner shall be the Buying Party and the
Defaulting Partner shall be the Selling Party). If the Non-defaulting Partner
fails to make a timely election, the Defaulting Partner shall within 210 days
after the Dissolution Date make such election on behalf of the Non-defaulting
Partner, and the Non-defaulting Partner shall be bound thereby. The date on
which such election is made is referred to herein as the "Election Date".
(d) The closing of the purchase and sale contemplated by
Section 5.3(c) hereof (the "Closing") shall occur at the principal offices of
the Agency on a date (the "Closing Date")
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selected by the Buying Party and as to which it has given at least 15 days'
prior written notice to the Selling Party. The Closing Date shall be not less
than 45 days nor more than 90 days after the Election Date.
(e) At the Closing, the Buying Party shall deliver to the
Selling Party the full amount of the Specified Amount in immediately available
funds. At the Closing, the Selling Party shall execute and deliver to the Buying
Party such assignments of interest, deeds, bills of sale, instruments of
conveyance, and other instruments as the Buying Party may reasonably require, to
give good and clear record and marketable title to all the Selling Party's
property rights as a partner in the Agency and all the Selling Party's property
rights in capital assets used or held for use by the Agency.
(f) Following the Closing and for the remaining term of this
Agreement (and any renewals thereof), the Buying Party shall print, produce,
distribute and market (both circulation and advertising) the newspapers in the
same manner that this Agreement contemplates shall be done by the Agency,
subject in all cases to the editorial independence of the newspapers as
contemplated herein. Each of Star and Citizen shall continue to be obligated to
provide news and editorial product as provided in Section 2.4(a) hereof. All
revenues, costs, expenses and distributions of money with respect to such
newspapers shall be treated by the Buying Party in the same
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manner that this Agreement contemplates shall be done by the Agency except that,
for all periods of time subsequent to the Closing Date, distributions of all
funds in excess of the funds reasonably needed by the Buying Party for the
conduct of the joint operating arrangement contemplated hereby shall be made 75%
to the Non-defaulting Partner and 25% to the Defaulting Partner. Notwithstanding
anything in this Agreement, however, the Buying Party shall have sole and
exclusive control, power and authority over all matters (excluding editorial
matters of the Selling Party) related to the implementation of the joint
operating arrangement contemplated by this Agreement, including without
limitation, all right, power and authority that this Agreement contemplates
shall be exercised by the Board of Directors (whether by majority vote,
unanimous vote, or otherwise) or by the Agency.
(g) Upon dissolution of the Agency and occurrence of the events
contemplated in this Section 5.3, nothing in this Agreement or the arrangements
of the parties shall constitute the parties hereto partners, joint venturers,
successors, alter egos, joint employers or an unincorporated association, or as
having any relationship other than as specifically provided by this Agreement
(as this Agreement is modified however, pursuant to this Section 5.3).
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5.4 Termination at End of Term. If both this Agreement and the
Partnership Agreement terminate upon expiration of their term, including any
renewals thereof, and the purchase and sale contemplated by Section 5.3 shall
not have occurred:
(a) Star and Citizen will meet with each other and use their
best efforts to develop a just and equitable plan for discontinuing and
dissolving the Agency, distributing its assets in kind between Star and Citizen
(after payment of all indebtedness and liabilities of the Agency and all costs
of dissolution and liquidation) equally to Star and Citizen, and partitioning on
an equal basis all capital assets used or held for use by the Agency, so as to
enable Star and Citizen to resume separate publication of The Arizona Daily Star
and Tucson Citizen, respectively, as independent businesses (a "Distribution
Plan"). If Star and Citizen agree on a Distribution Plan, the assets of the
Agency shall be distributed, and said capital assets shall be partitioned, in
accordance with the Distribution Plan, the Licenses granted pursuant to Sections
1.2(b)(i) and 1.3(b)(i) hereof shall automatically expire and terminate, and the
Agency shall thereupon be dissolved. Except as provided in the Distribution
Plan and upon the effective distribution of assets by the Agency pursuant
thereto, neither Star nor Citizen shall have any separate right, title or
interest in or to any asset of the Agency.
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(b) If Star and Citizen are unable to agree upon a Distribution
Plan, or if the Agency's assets are not sufficient to pay all of its
indebtedness and liabilities and all costs of dissolution and liquidation, the
business affairs and assets of the Agency shall be liquidated as promptly as
possible and receivables collected, all in an orderly and businesslike manner so
as not to involve undue sacrifice, and the assets of the Agency and the capital
assets used or held for use by the Agency shall be converted into cash and all
of its indebtedness and liabilities paid. In the event there is a cash surplus
available for distribution, the surplus will be distributed equally to Star and
Citizen, and in the event there is a deficiency, the same will be made up by
Star and Citizen in accordance with Section 1.5 hereof, and the Agency shall
thereupon be dissolved.
5.5 Change of Control.
(a) Neither control of Star or Citizen nor the assets or
business of The Arizona Daily Star or Tucson Citizen shall be transferred to any
other person, corporation, partnership, trust or other entity unless the
transferee assumes all obligations of Star or Citizen, as the case may be, under
this Agreement, the Partnership Agreement and the applicable License Agreement.
Any purported transfer in violation of this Section 5.5(a) shall be null, void
and of no effect. Neither
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Star nor Citizen shall transfer any of its right, title and interest in this
Agreement or in its partnership interest in the Agency except as part of a
transaction permitted by this Section 5.5(a) in which control of Star or
Citizen, or all or substantially all of the assets and business of The Arizona
Daily Star or Tucson Citizen, are being transferred. For purposes of this
Section 5.5(a), no transfer or change of control shall be deemed to have
occurred as a result of a transfer to an Affiliate as permitted by Section 4.2
of the Partnership Agreement or a change of control, directly or indirectly, of
the ultimate parent of Star or Citizen, as the case may be.
(b) If from time to time either Star or Citizen (the
"transferring party") intends to effect a transfer other than one referred to in
the last sentence of Section 5.5(a), notice of such intent shall first be given
to the other party (the "non-transferring party") at least 30 days before the
transferring party enters into any definitive agreement, agreement in principle,
letter of intent or similar understanding with a transferee regarding the
material terms of such a transfer. If requested by the transferring party, the
non-transferring party will maintain the confidentiality of such notice. If,
after giving such notice to the nontransferring party and within 150 days
thereafter, the transferring party has not consummated with a third party a
transaction of the type contemplated by this Section 5.5, then this Section
5.5(b) shall again become applicable except to the
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consummation of a transaction with a third party that is contemplated pursuant
to a definitive agreement (as it may be amended) that was entered into with such
third party during such 150 day period.
ARTICLE 6
MISCELLANEOUS
6.1 Notices. Each notice or other communication given pursuant
to this Agreement or the Partnership Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered or five days after being
deposited in the United States mail, certified, postage prepaid, return receipt
requested, and addressed to the party to be notified at such party's address as
set forth below:
Star: Star Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000-0000
Attention: Vice President
and Business Manager
with a copy to:
Pulitzer Publishing Company
000 Xxxxx Xxxxxx Xxxx.
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President-
Newspaper Operations
Citizen: Citizen Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000-0000
Attention: Publisher
with a copy to:
51
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Gannett Co., Inc.
0000 Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Agency: TNI Partners
0000 Xxxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxx, Arizona 85726-6887
Attention: President
All such notices to the Agency shall be to the attention of the President, with
copies to Star and Citizen at the addresses then designated by them for the
receipt of such notices pursuant to this Section 6.1. Any party may change its
address or the individual to whom notice is to be directed hereunder by notice
to the other parties given in accordance with this Section 6.1.
6.2 Assignment. Subject to Section 5.5 hereof, this Agreement
shall be binding upon and shall inure to the benefit of each of the parties
hereto and their permitted successors and assigns.
6.3 Entire Understanding. This Agreement (including
the Exhibits hereto) and the Partnership Agreement constitute the entire
understanding and agreement of the parties hereto on the subject matter herein
contained and any and all other representations or agreements heretofore made on
such subject
52
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matter, whether oral or in writing, of any party or its agents shall be null,
void and of no effect whatsoever.
6.4 Headings. Headings have been inserted in this Agreement for
the purpose of convenience only. They will not be used to interpret or construe
the meaning of the Articles or Sections hereof, nor will they have the effect of
limiting or enlarging the meaning thereof.
6.5 Governing Law; Modification. This Agreement shall be
governed by, construed and enforced in accordance with the internal laws of the
State of Arizona, without giving effect to conflict of laws principles. This
Agreement may not be changed orally, but only by an agreement in writing and
signed by the party against whom enforcement of any waiver, modification or
discharge is sought.
6.6 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall to any extent be held in
any proceeding to be invalid or unenforceable, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to which it was held to be invalid or unenforceable, shall not be affected
thereby, and shall be valid and be enforceable to the fullest extent
53
- 50 -
permitted by law, but only if and to the extent such enforcement would not
materially and adversely frustrate the parties' essential purposes and intent as
expressed herein.
6.7 Further Assurances. Each party agrees to take all action
necessary to carry out and effectuate the intent, purposes and provisions of
this Agreement and the Partnership Agreement, and to cooperate with the others
in every reasonable and proper way that will promote the successful operation of
the arrangements contemplated by this Agreement and the Partnership Agreement.
6.8 Force Majeure. No party shall be liable to the others for
any failure or delay in performance under this Agreement or the Partnership
Agreement occasioned by war, riot, act of God or public enemy, strike, labor
dispute, shortage of any supplies, failure of suppliers or workers or other
cause beyond the control of the party required to perform, and such failure or
delay shall not be considered a default hereunder, but this Section 6.8 shall
not excuse any party from its obligation to pay any sum of money which such
party is otherwise required to pay pursuant to this Agreement or the
Partnership Agreement.
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6.9 Specific Performance. In addition to any other remedies the
parties may have, each party shall have the right to enforce the provisions of
this Agreement through injunctive relief or by a decree or decrees of specific
performance.
6.10 No Third Party Beneficiaries. Nothing in this Agreement,
express or implied, shall give to anyone other than the parties hereto and their
respective permitted successors and assigns any benefit, or any legal or
equitable right, remedy or claim, under or in respect of this Agreement.
6.11 Nature of Relationship. Nothing contained in this
Agreement shall constitute the parties hereto as alter egos or joint employers
or as having any relationship other than as specifically provided herein and in
the Partnership Agreement.
6.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement, and any party hereto may execute
this Agreement by signing one or more counterparts hereof. This Agreement shall
become effective when counterparts hereof have been duly executed and delivered
by each party.
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IN WITNESS WHEREOF, the parties have executed this Agreement by
their respective duly authorized officers as of the day and year first above
written.
STAR PUBLISHING COMPANY
By: Xxxxxxxx X. Xxxxxxxx XX
-------------------------------
Title: Senior vice President
CITIZEN PUBLISHING COMPANY
By: Xxxx X. Xxxxxx
-------------------------------
Title: Vice President
TNI PARTNERS, being the Agency referred to in the foregoing
Agreement, hereby becomes a party thereto and agrees to perform all of the
obligations therein to be performed by it and to be bound by all of the terms
and provisions thereof.
TNI PARTNERS
By: Star Publishing Company
General Partner
By: Xxxxxxxx X. Xxxxxxxx XX
-------------------------------
Title: Senior Vice President
By: Citizen Publishing Company
General Partner
BY: Xxxx X. Xxxxxx
-------------------------------
Title: Vice President
56
EXHIBIT A
---------
PARTNERSHIP AGREEMENT
PARTNERSHIP AGREEMENT, dated as of December 22, 1988, between
STAR PUBLISHING COMPANY ("STAR"), an Arizona corporation, and CITIZEN PUBLISHING
COMPANY ("CITIZEN"), an Arizona corporation.
1. FORMATION OF PARTNERSHIP.
1.1 Partners. STAR and CITIZEN (individually, a "Partner"
and collectively, the "Partners") hereby form a general partnership under the
laws of the State of Arizona (the "Partnership") for the purposes and on the
terms set forth herein.
1.2 Name and Principal Office. The name of the Partnership
shall be "TNI PARTNERS", or such other name as shall be mutually agreeable to
the Partners. The Partnership shall do business under the name "TNI PARTNERS"
and its principal office shall be located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxx,
Xxxxxxx 00000, or such other place as the Partners shall designate from time to
time.
1.3 Purpose of Partnership. The purpose of the Partnership
shall be (i) to be the Agency (as that term is defined in that certain Amended
and Restated Joint Operating Agreement, dated the date hereof, between STAR and
CITIZEN (the "Agency Agreement")) and to conduct all the activities, have all of
the rights and powers, and perform all of the duties and obligations, of the
Agency set forth in the Agency Agreement, and (ii) to do any act and thing and
to enter into any contract incidental to, or necessary, proper or advisable for,
the accomplishment of such purposes, to the extent permitted by law.
1.4 Commencement; Term. The Partnership shall commence
on the date hereof and continue for a term ending at the close of business on
June 1, 2015, and may be renewed and extended for subsequent periods of twenty-
five (25) years each at the option of either STAR or CITIZEN. Unless two years'
written notice is given by both STAR and CITIZEN that they desire to end this
Partnership or any renewal hereof, this Partnership shall continue in force for
subsequent periods of twenty-five (25) years each. Only by mutual written
consent shall this Partnership Agreement or any renewal hereof be terminated.
2. PARTNERSHIP INTERESTS, CONTRIBUTIONS AND DISTRIBUTIONS.
2.1 Partnership Interests. Except as otherwise expressly
provided herein or in the Agency Agreement, the
57
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respective interests of the Partners in the assets, liabilities, profits and
losses of the Partnership ("Partnership Interest") shall be as follows:
STAR: 50%
CITIZEN: 50%
Each Partner shall have at all times an interest as a tenant in partnership in
the assets and properties of the Partnership equal to its Partnership Interest
and neither Partner shall have any separate right, title or interest in or to
any asset or property of the Partnership.
2.2 Capital Accounts and Contributions.
(a) The initial capital account of each Partner shall
be the amount determined in accordance with Section 1.4 of the
Agency Agreement. Subsequently, each Partner's capital account
shall be (i) increased by (x) the amount of any net income of
the Partnership allocable to such Partner pursuant to Section
3.2 of the Agency Agreement and (y) the amount of any cash plus
the fair market value of any non-cash assets subsequently
contributed by such Partner to the Partnership, and (ii)
decreased by (a) the amount of any net loss of the Partnership
allocable to such Partner pursuant to Section 3.2 of the Agency
Agreement and (b) the amount of any cash and the fair market
value of any non-cash assets distributed by the Partnership to
such Partner.
(b) Each Partner shall make one or more capital
contributions to the Partnership in such amounts, and upon such
terms and conditions, as are provided in the Agency Agreement.
No interest shall be paid by the Partnership on any capital
contributed to the Partnership unless the Partners otherwise
agree.
2.3 Distributions of Cash and Allocations of Taxable
Income or Loss.
(a) Cash shall be distributed to each Partner at such
times and in such amounts as is provided in Section 3.1 of the
Agency Agreement.
(b) Net income and net loss shall be allocated to the
Partners in the amounts specified in Section 3.2 of the Agency
Agreement.
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-3-
(c) For income tax purposes, taxable income and loss
and allocations thereof to each Partner will be determined in
accordance with Section 3.2 of the Agency Agreement.
2.4 Expenses Incurred Prior to the Formation of the
Partnership. No expense or obligation incurred for services performed or
products supplied by either Partner prior to the formation of the Partnership
shall be considered to be a contribution or loan to, or made on behalf of, the
Partnership, unless otherwise provided in the Agency Agreement or by agreement
of the Partners.
2.5 Distribution to Partners; Funding of Losses. Cash and
other property shall be distributed by or withdrawn from the Partnership, and
losses of the Partnership shall be funded, on the terms and conditions (and
pursuant to the procedures) set forth in the Agency Agreement.
3. MANAGEMENT OF THE PARTNERSHIP.
3.1 Board of Directors. There is hereby established a
Board of Directors of the Partnership consisting of six members, or such even
number of Directors as the Partners may from time to time agree upon, to have
and exercise final authority, except as otherwise provided herein or in the
Agency Agreement, with respect to the affairs of the Partnership specified in
this Agreement. The initial members of the Board of Directors shall be appointed
by the Partners on or prior to December 26, 1988, and shall consist of three
members appointed by STAR and three members appointed by CITIZEN. Each member
shall hold office until he shall die, resign or be removed (with or without
cause or notice) by the Partner that he represents, whereupon such Partner shall
appoint such member's successor to the Board of Directors. Each member shall
have one vote.
3.2 Meetings and Action of the Board of Directors.
(a) The initial meeting of the Board of Directors shall take place at
such time and place as the Partners shall agree. The Board of Directors may
establish meeting dates and requisite notice requirements, adopt rules of
procedure it deems consistent herewith, and may meet by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time.
59
-4-
(b) Any member of the Board of Directors may call a meeting. Unless
waived, at least five business days' notice of a meeting is required. Notice to
a director shall be given to the Partner whom the director represents, and shall
be given in the manner described in Section 6.1 of the Agency Agreement. If
proper notice of a meeting is given to all directors or waived, the presence at
any meeting, in person or by proxy, of both (i) a majority of the total
authorized number of directors and (ii) a majority of directors who were
appointed by STAR and a majority of directors who were appointed by CITIZEN,
shall constitute a quorum for the taking of any action, subject to Section 3.3
hereof. Any member may, in writing, appoint a proxy to act on his behalf and
vote in his stead at any meeting. Subject to Section 3.2(c) below, the Board of
Directors shall act on all matters by an affirmative vote of both (i) a majority
of directors present at any meeting in person or by proxy, and (ii) a majority
of directors who were appointed by STAR and a majority of directors who were
appointed by CITIZEN.
(c) Any action required or permitted to be taken by the Board
of Directors may be taken without notice and without a meeting if a majority of
the total authorized number of directors, including at least a majority of
directors who were appointed by CITIZEN and at least a majority of directors who
were appointed by STAR, consent in writing to the adoption of a resolution
authorizing the action.
3.3 Actions by Partners.
(a) The Board of Directors shall have no power, without action
by the Partners themselves, (i) to amend this Agreement; (ii) to act other than
in accordance with the purposes of the Partnership as set forth in Section 1.3
hereof; (iii) to admit a new partner; (iv) to merge or consolidate the
Partnership with any other entity; or (v) to dissolve the Partnership.
(b) No partner shall, except as authorized by the provisions
hereof, take any action or assume any obligations or liabilities on behalf of
the Partnership.
(c) Nothing in this Agreement or the Agency Agreement shall in
any way restrict, prohibit or impair the right of each Partner to sell or
otherwise license its own news, editorial and feature content to wire services
or otherwise (for the account of the Partnership) as it deems in its best
interest.
60
-5-
(d) Any fiduciary or other duty that either Partner (or any
Affiliate thereof) may owe to the other with respect to any of its businesses or
operations that are allegedly in competition with those of the Agency shall be
determined as if the legal relationship between the Partners were that which
existed under the Previous operating Agreement, and without regard to any
subsequent agreement between the parties other than the express contractual
provisions under this Agreement or the Agency Agreement. For purposes of this
Section 3.3(d), "Previous Operating Agreement" means that certain Operating
Agreement dated March 28, 1940, as amended by agreements dated June 15, 1953 and
October 14, 1970.
3.4 President and Other Officers. The Agency shall have a
President and such other officers as the Board of Directors may from time to
time determine. Officers shall serve for a one-year term unless they earlier
die, resign or are removed. Any officer may be removed by the Board of Directors
with or without cause or notice. Subject to the Agency Agreement, this Agreement
and the determinations of the Board of Directors, the President shall have full
day-to-day operating authority, control and management of the business and
affairs of the Agency, and any other officers of the Agency shall have such
authority as is from time to time determined by the Board of Directors.
The President and such other officers shall act in accordance with the
decisions of the Board of Directors and shall have no authority to take any
action requiring prior Board of Directors approval without first obtaining the
approval of the Board of Directors.
3.5 Indemnification.
(a) The Partnership shall indemnify any person made, or threatened to be
made, a party to an action or proceeding, whether brought by a Partner or
Affiliate of a Partner or any other person, whether civil or criminal, including
an action by or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any member of the Board of Directors or officer
of the Partnership served in any capacity at the request of the Partnership, by
reason of the fact that he, his testator or intestate, is or was a member of the
Board of Directors or an officer of the Partnership, or served such other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees actually and
61
- 6 -
necessarily incurred as a result of such action or proceeding, or any appeal
therein, if such member of the Board of Directors or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the Partnership and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding
by judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such member of the
Board of Directors or officer did not act, in good faith, for a purpose which he
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interest of the Partnership or that
he had reasonable cause to believe that his conduct was unlawful.
(c) For the purpose of this Section 3.5, the Partnership shall be deemed
to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the Partnership also imposes duties
on, or otherwise involves services by, such person to the plan or participants
or beneficiaries of the plan; excise taxes assessed on a person with respect to
an employee benefit plan pursuant to applicable law shall be considered fines;
and action taken or omitted by a person with respect to an employee benefit plan
in the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be a purpose which is not opposed to the best interests
of the Partnership.
(d) Indemnification under this Section 3.5 shall be made by the
Partnership in any specific case only:
(i) if the beneficiary thereof shall have prevailed in an
action or proceeding brought against him or shall have
been found to have acted in compliance with the
applicable standard of conduct set forth in this
Section 3.5; or,
(ii) by the Board of Directors upon the opinion in writing
of independent legal counsel that indemnification is
proper in the circumstances because the applicable
standard of conduct set
62
-7-
forth in this Section 3.5 has been met by such member
or officer.
(e) The Partnership shall have the power, but shall not be obligated, to
purchase and maintain insurance:
(i) to indemnify the Partnership for any obligation which
it incurs as a result of the indemnification of the
Board of Directors and officers under the provisions
of this Section 3.5;
(ii) to indemnify such members and officers in instances
in which they may be indemnified by the Partnership
under the provisions of this Section 3.5; and
(iii) to indemnify such members and officers in instances in
which they may not otherwise be indemnified by the
Partnership under the provision of this Section 3.5.
4. TRANSFER OF PARTNERSHIP INTERESTS.
4.1 Prohibited Transfers. Except as expressly permitted by
Section 4.2 hereof, neither Partner may transfer any of its right, title or
interest in or to its Partnership Interest, in whole or in part. No attempted
transfer of any Partnership Interest in violation of any provision of this
Agreement or of the Agency Agreement shall be effective to pass any right, title
or interest therein, but shall instead be null, void and of no effect.
4.2 Transfer to Affiliate. Subject to Section 4.3 hereof,
a Partner (the "Transferor Partner") may transfer its entire Partnership
Interest to any Affiliate of the Transferor Partner or to another transferee in
accordance with the express provisions of Section 5.5 of the Agency Agreement.
As used in this Agreement, an "Affiliate" of a party is any corporation or
entity that directly or indirectly wholly owns such party, is directly or
indirectly wholly-owned by such party, or is directly or indirectly wholly-owned
by any other Affiliate of such party.
4.3 Conditions to Transfer. Any transfer made under
Section 4.2 hereof is subject to satisfaction of the following conditions:
(a) the transferee shall be admitted as a Partner
of the Partnership and the Partners shall cause this Agreement
to be amended accordingly;
63
-8-
(b) the transferee shall in writing assume and agree
to perform all of its duties and obligations as a Partner under
this Agreement and under the Agency Agreement; and
(c) the Transferor Partner (and any Affiliate that
directly or indirectly wholly owns the Transferor Partner)
shall agree fully to indemnify on an after tax basis the other
Partner against any adverse tax consequences to the other
Partner that may result from any termination of the Partnership
for tax purposes on account of such transfer.
5. DISSOLUTION AND TERMINATION OF THE PARTNERSHIP.
5.1 Dissolution of the Partnership. The Partnership shall
continue until dissolved as herein provided. Except as provided in Section 4.2
hereof or in Section 5.2 of the Agency Agreement, no Partner shall cause the
Partnership to be dissolved without the prior written consent of the other
Partner. Upon dissolution of the Partnership, the provisions of Section 5.2, 5.3
and 5.4 of the Agency Agreement shall apply, as the case may be.
6. MISCELLANEOUS.
6.1 Amendments and Waivers. This Agreement may not be
amended, modified, terminated, rescinded, or cancelled, except by a writing
signed by both of the Partners. The observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) by a writing signed by the Partner against which such waiver
is to be asserted.
6.2 Specific Performance. In addition to any other
remedies the Partners may have, each Partner shall have the right to enforce the
provisions of this Agreement through injunctive relief or by a decree or decrees
of specific performance.
6.3 Severability. If any provision of this Agreement or
the application thereof to any person or circumstance shall to any extent be
held in any proceeding to be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those to which it was held to be invalid or unenforceable, shall not
be affected thereby, and shall be valid and be enforceable to the fullest extent
permitted by law, but only if and to the extent such enforcement would not
materially and
64
-9-
adversely frustrate the Partners' essential purposes and intent as expressed
herein and in the Agency Agreement.
6.4 No Waiver. No delay on the part of any Partner in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any Partner of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
6.5 Headings. The section headings herein are intended
only for convenience and do no constitute a part of this Agreement and shall not
be considered in the interpretation of this Agreement or any of its provisions.
6.6 Variation of Pronouns. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity or identities of the antecedent person or persons may
require.
6.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement, and any party hereto may execute
this Agreement by signing one or more counterparts hereof. This Agreement shall
become effective when counterparts hereof duly executed by each Partner have
been delivered to each Partner.
6.8 Binding Effect; No Third-Party Beneficiaries. This
Agreement shall be binding upon and shall inure to the benefit of the Partners
and their respective permitted successors and assigns. Nothing in the Agreement,
expressed or implied, shall give to anyone other than the Partners and their
respective permitted successors and assigns and the Partnership any benefit, or
any legal or equitable right, remedy or claim, under or in respect of this
Agreement.
6.9 Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the internal laws of the State of
Arizona, without giving effect to conflict of laws principles.
6.10 Priority of Interpretation. If any provision of this
Agreement conflicts with any provision in the Agency Agreement, the provision in
the Agency Agreement shall control.
6.11 Notices. Each notice or other communication given
pursuant to this Agreement shall be given as provided in Section 6.1 of the
Agency Agreement.
65
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first above written.
STAR PUBLISHING COMPANY
By:
----------------------------------
Name:
Title:
CITIZEN PUBLISHING COMPANY
By:
----------------------------------
Name:
Title:
66
EXHIBIT B
---------
LICENSE AGREEMENT (Star)
THIS LICENSE AGREEMENT (the "License Agreement") is made as of
the 26th day of December, 1988, by and between STAR PUBLISHING COMPANY, an
Arizona corporation ("Licensor") and TNI PARTNERS, an Arizona partnership
("Licensee").
WHEREAS, Licensor and CITIZEN PUBLISHING COMPANY, an Arizona
corporation, have entered into an Amended and Restated Joint Operating Agreement
dated as of December 22, 1988 (the "Contract"), and have formed the Licensee
under a Partnership Agreement (the "Partnership Agreement"), for the purpose of
establishing a joint operating arrangement to publish The Arizona Daily Star,
owned by Licensor, and the Tucson Citizen owned by Citizen Publishing Company,
all on the terms set forth in the Contract; and
WHEREAS, the Contract provides that Licensor shall grant to
Licensee a license as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements herein contained, the parties agree as follows:
1. Grant of License. Licensor hereby grants Licensee a
royalty-free license and right (which license and right shall be exclusive
against all persons and entities, except for Licensor and its Affiliates, as
that term is defined in the Partnership Agreement, subject to the provisions of
Section 3 herein) to use (i) the whole or any part of the name, title, and
masthead of The Arizona Daily Star and all intangible rights and privileges of
whatever kind belonging to or incidental thereto, including any and all
copyrights and trademarks relating thereto and any and all copyrights, and the
right to renew the same, on issues of The Arizona Daily Star published before,
on or after the date hereof, and the right to reprint all or any part thereof
(collectively the "Names"); (ii) all lists relating to subscriptions, bulk
sales, circulation, dealers and sub-dealers of The Arizona Daily Star, together
with all records and other lists relating to or concerning the following:
routes, daily draws by editions, distribution, delivery, sales, subscriptions
and returns of The Arizona Daily Star in any territory, all lists of dealers and
agencies served by all distribution methods in the City of Tucson, its
metropolitan areas and in all cities and towns served by The Arizona Daily Star,
including a list of dealer and agency deposits, if any; and (iii) lists of all
advertisers and advertising contracts relating to The Arizona Daily Star and
related advertiser information, including dates of contracts, names and
addresses of advertisers, space contracted
67
-2-
for, frequency of insertions, rates per line, expiration dates and any special
conditions, records requirements or publication orders with advertisers with the
dates thereof, and any special agreements or commitments with advertisers, as
well as lists of all insertion orders (the items in clauses (ii) and (iii) are
collectively referred to as the "Intangibles").
2. Term. The term of this License shall remain in effect
for so long as and only for so long as the Contract remains in effect.
3. Use by Licensor. Licensor shall maintain quality
control of the manner in which the Names are used by Licensee, all as provided
in the Contract. Neither Licensor, Pulitzer Publishing Company nor any of their
respective Affiliates shall use any of the Names or the Intangibles in
connection with the printing or distribution of a daily newspaper, the
dissemination of news or editorial information, or the sale or dissemination of
advertising, in each case in the Tucson, Arizona metropolitan area, or otherwise
in competition with the activities of the Licensee contemplated or permitted by
the Contract. Notwithstanding the foregoing, Licensor, Pulitzer Publishing
Company, and their respective Affiliates may engage in those activities
described in the last sentence of Section 3.3(c) of the Partnership Agreement.
4. Default. If, for a period of six consecutive months,
Licensee uses neither the Names nor the Intangibles, or if Licensee becomes
insolvent, or if Licensee initiates proceedings in any court under any
bankruptcy, reorganization or similar law or for the appointment of a trustee or
receiver of Licensee's property, or if Licensee is adjudicated a bankrupt or
debtor under any bankruptcy, reorganization or similar law, or if there shall be
a default in the performance of any agreement herein contained on the part of
Licensee and such default remains uncured for more than 180 days after written
notice of such default is given by Licensor, this License Agreement (if Licensor
so elects by written notice to Licensee) shall thereupon become null and void,
and Licensee shall have no further right to use of the Names or the Intangibles.
5. Assignment. Licensee shall not, without Licensor's
prior written consent, which consent shall not be unreasonably withheld, assign,
directly or indirectly, its rights hereunder, except that no such consent shall
be required if such assignment is made pursuant to Section 5.3 of the Contract.
68
-3-
6. Indemnification. Licensor agrees to indemnify and hold
Licensee and its officers, agents and employees harmless from and against any
and all claims, actions, liabilities, losses, damages, costs and expenses
including reasonable attorneys' fees, arising out of any claim that Licensor did
not have the right and power to enter into and perform this License Agreement
and to license the Names and the Intangibles to Licensee as provided in this
License Agreement without infringing the rights of any third party. Licensor
shall have the right to defend any such claim or action at Licensor's own
expense with counsel of its selection, in which event Licensee shall have the
right at its expense to participate in such defense with counsel of its own
selection. Licensee shall notify Licensor promptly of any adverse use or
infringement of the use of the Names by any third parties and assist Licensor in
all reasonable ways in the protection thereof. Subject to the first sentence of
this Section 6, Licensor shall not be liable to Licensee for any loss or
liability suffered by Licensee by reason of Licensee's use of the Names or the
Intangibles or by reason of any infringement thereof by any third parties unless
caused by Licensor.
7. Waivers. No assent, express or implied, by either
party hereto, to any breach of any of the other party's covenants or agreements
shall be deemed or taken to be a waiver of any succeeding breach of the same
covenant or agreement.
8. Notices. Each notice or other communication given
hereunder shall be deemed to have been duly given when hand delivered or five
days after being deposited in the U.S. mail, certified, postage prepaid, return
receipt requested, addressed as follows (or to such other address as may be
given by either party hereto to the other party:
Licensor:
Star Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Vice President
and Business Manager
With a copy to:
Pulitzer Publishing Company
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President - Newspaper
Operations
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Licensee:
TNI Partners
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Vice President
and Business Manager
With copies to:
Citizen Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Publisher
Pulitzer Publishing Company
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President-Newspaper
Operations
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
9. Law Governing. This License Agreement shall be
governed by, construed, and enforced in accordance with the internal laws of the
State of Arizona, without giving effect to conflicts of laws principles.
10. Counterparts. This License Agreement may be executed
in counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement, and any party hereto may
execute this License Agreement by signing one or more counterparts hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
License Agreement as of the day and year first above written.
STAR PUBLISHING COMPANY
By:
----------------------------
Title:
-------------------------
70
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TNI PARTNERS
By: Citizen Publishing Company,
General Partner
By:
----------------------------
Title:
-------------------------
By: Star Publishing Company,
General Partner
By:
----------------------------
Title:
-------------------------
71
EXHIBIT C
---------
LICENSE AGREEMENT (Citizen)
THIS LICENSE AGREEMENT (the "License Agreement") is made as of
the 26th day of December, 1988, by and between CITIZEN PUBLISHING COMPANY, an
Arizona corporation ("Licensor") and TNI PARTNERS, an Arizona partnership
("Licensee").
WHEREAS, Licensor and STAR PUBLISHING COMPANY, an Arizona
corporation ("STAR"), have entered into an Amended and Restated Joint Operating
Agreement dated as of December 22, 1988 (the "Contract"), and have formed the
Licensee under a Partnership Agreement (the "Partnership Agreement"), for the
purpose of establishing a joint operating arrangement to publish The Arizona
Daily Star, owned by Star Publishing Company and the Tucson Citizen owned by
Licensor, all on the terms set forth in the Contract; and
WHEREAS, the Contract provides that Licensor shall grant to
Licensee a license as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements herein contained, the parties agree as follows:
1. Grant of License. Licensor hereby grants Licensee a
royalty-free license and right (which license and right shall be exclusive
against all persons and entities, except for Licensor and its Affiliates, as
that term is defined in the Partnership Agreement, subject to the provisions of
Section 3 herein) to use (i) the whole or any part of the name, title, and
masthead of the Tucson Citizen and all intangible rights and privileges of
whatever kind belonging to or incidental thereto, including any and all
copyrights and trademarks relating thereto and any and all copyrights, and the
right to renew the same, on issues of the Tucson Citizen published before, on or
after the date hereof, and the right to reprint all or any part thereof
(collectively the "Names"); (ii) all lists relating to subscriptions, bulk
sales, circulation, dealers and sub-dealers of the Tucson Citizen, together with
all records and other lists relating to or concerning the following: routes,
daily draws by editions, distribution, delivery, sales, subscriptions and
returns of the Tucson Citizen in any territory, all lists of dealers and
agencies served by all distribution methods in the City of Tucson, its
metropolitan areas and in all cities and towns served by the Tucson Citizen,
including a list of dealer and agency deposits, if any; and (iii) lists of all
advertisers and advertising contracts relating to the Tucson Citizen and related
advertiser information, including dates of contracts, names and addresses of
advertisers, space contracted for,
72
-2-
frequency of insertions, rates per line, expiration dates and any special
conditions, records requirements or publication orders with advertisers with the
dates thereof, and any special agreements or commitments with advertisers, as
well as lists of all insertion orders (the items in clauses (ii) and (iii) are
collectively referred to as the "Intangibles").
2. Term. The term of this License shall remain in effect
for so long as and only for so long as the Contract remains in effect.
3. Use by Licensor. Licensor shall maintain quality
control of the manner in which the Names are used by Licensee, all as provided
in the Contract. Neither Licensor, Gannett Co., Inc. nor any of their respective
Affiliates shall use any of the Names or the Intangibles in connection with the
printing or distribution of a daily newspaper, the dissemination of news or
editorial information, or the sale or dissemination of advertising, in each case
in the Tucson, Arizona metropolitan area, or otherwise in competition with the
activities of the Licensee contemplated or permitted by the Contract.
Notwithstanding the foregoing, Licensor, Gannett Co. Inc., and their respective
Affiliates may engage in those activities described in the last sentence of
Section 3.3(c) of the Partnership Agreement.
4. Default. If, for a period of six consecutive months,
Licensee uses neither the Names nor the Intangibles, or if Licensee becomes
insolvent, or if Licensee initiates proceedings in any court under any
bankruptcy, reorganization or similar law or for the appointment of a trustee or
receiver of Licensee's property, or if Licensee is adjudicated a bankrupt or
debtor under any bankruptcy, reorganization or similar law, or if there shall be
a default in the performance of any agreement herein contained on the part of
Licensee and such default remains uncured for more than 180 days after written
notice of such default is given by Licensor, this License Agreement (if Licensor
so elects by written notice to Licensee) shall thereupon become null and void,
and Licensee shall have no further right to use of the Names or the Intangibles.
5. Assignment. Licensee shall not, without Licensor's
prior written consent, which consent shall not be unreasonably withheld, assign,
directly or indirectly, its rights hereunder, except that no such consent shall
be required if such assignment is made pursuant to Section 5.3 of the Contract.
73
-3-
6. Indemnification. Licensor agrees to indemnify and hold
Licensee and its officers, agents and employees harmless from and against any
and all claims, actions, liabilities, losses, damages, costs and expenses
including reasonable attorneys' fees, arising out of any claim that Licensor did
not have the right and power to enter into and perform this License Agreement
and to license the Names and the Intangibles to Licensee as provided in this
License Agreement without infringing the rights of any third party. Licensor
shall have the right to defend any such claim or action at Licensor's own
expense with counsel of its selection, in which event Licensee shall have the
right at its expense to participate in such defense with counsel of its own
selection. Licensee shall notify Licensor promptly of any adverse use or
infringement of the use of the Names by any third parties and assist Licensor in
all reasonable ways in the protection thereof. Subject to the first sentence of
this Section 6, Licensor shall not be liable to Licensee for any loss or
liability suffered by Licensee by reason of Licensee's use of the Names or the
Intangibles or by reason of any infringement thereof by any third parties unless
caused by Licensor.
7. Waivers. No assent, express or implied, by either
party hereto, to any breach of any of the other party's covenants or agreements
shall be deemed or taken to be a waiver of any succeeding breach of the same
covenant or agreement.
8. Notices. Each notice or other communication given
hereunder shall be deemed to have been duly given when hand delivered or five
days after being deposited in the U.S. mail, certified, postage prepaid, return
receipt requested, addressed as follows (or to such other address as may be
given by either party hereto to the other party:
Licensor:
Citizen Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Publisher
With a copy to:
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
74
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Licensee:
TNI Partners
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: President
With copies to:
Star Publishing Company
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Vice President and
Business Manager
Pulitzer Publishing Company
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President-Newspaper
Operations
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
9. Law Governing. This License Agreement shall be
governed by, construed, and enforced in accordance with the internal laws of the
State of Arizona, without giving effect to conflict of laws principles.
10. Counterparts. This License Agreement may be executed
in counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement, and any party hereto may
execute this License Agreement by signing one or more counterparts hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
License Agreement as of the day and year first above written.
CITIZEN PUBLISHING COMPANY
By:
---------------------------
Title:
------------------------
75
-5-
TNI PARTNERS
By: Citizen Publishing Company,
General Partner
By:
----------------------------
Title:
-------------------------
By: Star Publishing Company,
General Partner
By:
----------------------------
Title:
-------------------------
