EXHIBIT 10.2

 

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

 

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       ARTICLE 1: THE AGENCY      1.1      Formation    4 1.2      Initial
Capital Contribution of Star    5 1.3      Initial Capital Contribution of
Citizen    8 1.4      Valuation of Initial Capital Contributions    11 1.5     
Other Capital Contributions    12 1.6      Failure to Make Payments    12 1.7
     Dissolution of TNI    13 1.8      Assumption of Liabilities    14 1.9     
Employees    14        ARTICLE 2: ACTIVITIES OF THE AGENCY      2.1     
Publication and Operations    15 2.2      Capital Assets    17 2.3     
Editorial Independence    18 2.4      News and Editorial Services and Expenses
   19 2.5      Budgets and Allocations of News Space    22        ARTICLE 3:
ALLOCATIONS AND OTHER FINANCIAL MATTERS      3.1      Distributions    24 3.2
     Allocations    24 3.3      Books and Records    24 3.4      Financial
Statements    25 3.5      Auditors and Fiscal Year    26 3.6      Bank Accounts
   26 3.7      TAX Returns    27        ARTICLE 4: GOVERNANCE OF THE AGENCY     
4.1      Board of Directors    27 4.2      Officers of the Agency    30 4.3     
Deadlocks    31

 

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       ARTICLE 5: DURATION; TERMINATION      5.1      Term; Renewals    36 5.2
     Termination; Dissolution of the Agency    36 5.3      Dissolution Prior to
Expiration of Term    39 5.4      Termination at End of Term    45 5.5     
Change of Control    46        ARTICLE 6: MISCELLANEOUS      6.1      Notices   
48 6.2      Assignment    49 6.3      Entire Understanding    49 6.4     
Headings    50 6.5      Governing Law; Modification    50 6.6      Severability
   50 6.7      Further Assurances    51 6.8      Force Majeure    51 6.9     
Specific Performance    52 6.10      No Third Party Beneficiaries    52 6.11
     Nature of Relationship    52 6.12      Counterparts    52

 

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 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;

 

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(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 Morgan 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 petty 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 Section 2.5 hereof;

 

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(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, control and management of the business and affairs of the Agency.

 

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(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      4850 South Park Avenue      Tucson, Arizona
85726-6887      Attention: Vice President      and Business Manager      with a
copy to:      Pulitzer Publishing Company      900 North Tucker Blvd.      St.
Louis, Missouri 63101     

Attention: Senior Vice President-

                 Newspaper Operations

Citizen:

   Citizen Publishing Company      4850 South Park Avenue      Tucson, Arizona
85726-6887      Attention: Publisher

 

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     with a copy to:      Gannett Co., Inc.      1100 Wilson Blvd.     
Arlington, Virginia 22209      Attention: Chief Financial Officer

Agency:

   TNI Partners      4850 South Park Avenue      P.O. Box 26887      Tucson,
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

 

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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

 

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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:       /s/    NICHOLAS G. PENNIMAN IV            

Title:

  Senior vice President

CITIZEN PUBLISHING COMPANY

By:       /s/    GARY L. WATSON            

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:       /s/    NICHOLAS G. PENNIMAN IV            

Title:

  Senior Vice President By:  

Citizen Publishing Company

   

General Partner

BY:       /s/    GARY L. WATSON            

Title:

  Vice President

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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 4850 South Park Avenue, Tucson, Arizona
85726, 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.

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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

 

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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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(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.

 

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(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.

 

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(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

 

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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

 

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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;

 

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(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

 

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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.

 

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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:

   

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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;

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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

 

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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.

 

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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

4850 South Park Avenue

Tucson, Arizona 85726

Attention: Vice President and Business Manager

 

With a copy to:

 

Pulitzer Publishing Company

900 North Tucker Boulevard

St. Louis, Missouri 63102

Attention: Senior Vice President - Newspaper Operations

 

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Licensee:

 

TNI Partners

4850 South Park Avenue

Tucson, Arizona 85726

Attention: Vice President and Business Manager

 

With copies to:

 

Citizen Publishing Company

4850 South Park Avenue

Tucson, Arizona 85726

Attention: Publisher

 

Pulitzer Publishing Company

900 North Tucker Boulevard

St. Louis, Missouri 63101

Attention: Senior Vice President-Newspaper Operations

 

Gannett Co., Inc.

1100 Wilson Boulevard

Arlington, Virginia 22206

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:

       

 

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TNI PARTNERS

By:  

Citizen Publishing Company,
General Partner

By:    

Title:

    By:  

Star Publishing Company,
General Partner

By:        

Title:

   

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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;

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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,

 

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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.

 

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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

4850 South Park Avenue

Tucson, Arizona 85726

Attention: Publisher

 

With a copy to:

 

Gannett Co., Inc.

1100 Wilson Boulevard

Arlington, Virginia 22206

Attention: Chief Financial Officer

 

-4-

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Licensee:

 

TNI Partners

4850 South Park Avenue

Tucson, Arizona 85726

Attention: President

 

With copies to:

 

Star Publishing Company

4850 South Park Avenue

Tucson, Arizona 85726

Attention: Vice President and Business Manager

 

Pulitzer Publishing Company

900 North Tucker Boulevard

St. Louis, Missouri 63101

Attention: Senior Vice President-Newspaper Operations

 

Gannett Co., Inc.

1100 Wilson Boulevard

Arlington, Virginia 22206

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:

       

 

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TNI PARTNERS

By:  

Citizen Publishing Company,
General Partner

By:        

Title:

        By:  

Star Publishing Company,
General Partner

By:        

Title: