11682 Federal Register / Vol. 75, No. 47 / Thursday, March 11, 2010 / Notices 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. Daily Gazette 

Company and Medianews Group, Inc.; 

Proposed Final Judgment and 

Competitive Impact Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a proposed 

Final Judgment, Stipulation, and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the Southern District 

of West Virginia in United States of 

America v. Daily Gazette Company and 

MediaNews Group, Inc, No. 2:07–cv– 

0329. On May 22, 2007, the United 

States filed a Complaint alleging that the 

Defendants violated Section 7 of the 

Clayton Act, 15 U.S.C. 18, and Sections 

1 and 2 of the Sherman Act, 15 U.S.C. 

1 & 2, by entering into a May 2004 

transaction that consolidated ownership 

and control of the only two daily 

newspapers in Charleston, West 

Virginia under the Daily Gazette 

Company and eliminated competition 

between the Defendants. The proposed 

Final Judgment, filed on January 20, 

2010, requires the Defendants to 

restructure their joint operating 

arrangement to provide MediaNews 

Group with governance rights and 

independent control over the editorial 

operations of the Charleston Daily Mail; 

prohibits the Defendants from 

discriminating against the Daily Mail in 

circulation and advertising sales and 

other key aspects of newspaper 

operations; requires the Defendants to 

take remedial action to rebuild the 

circulation of the Daily Mail by offering 

specially-discounted subscriptions for a 

period of six months; establishes 

various economic incentives for 

MediaNews to compete with the Daily 

Gazette Company for readers; prevents 

the unjustified termination of 

publication of the Daily Mail unless it 

is financially failing and the United 

States approves; and specifies 

procedures for the disposition of the 

Daily Mail’s intellectual property in the 

event that the newspaper ceases 

publication. The Final Judgment will 

expire ten years from the date of entry 

unless the Court grants an extension. 

Copies of the Complaint, proposed 

Final Judgment and Competitive Impact 

Statement are available for inspection at 

the Department of Justice, Antitrust 

Division, Antitrust Documents Group, 

450 5th Street, NW., Room 1010, 

Washington, DC 20530 (telephone: 202– 

514–2481), on the Department of 

Justice’s Web site at http:// 

www.usdoj.gov/atr, and at the Office of 

the Clerk of the United States District 

Court for the Southern District of West 

Virginia. Copies of these materials may 

be obtained from the Antitrust Division 

upon request and payment of the 

copying fee set by Department of Justice 

regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, and responses thereto, will 

be published in the Federal Register 

and filed with the Court. Comments 

should be addressed to John R. Read, 

Chief, Litigation III Section, Antitrust 

Division, U.S. Department of Justice, 

450 5th Street, NW., Suite 4000, 

Washington, DC 20530, (202) 307–0468. 

J. Robert Kramer II, 

Director of Operations, Antitrust Division. 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF WEST 

VIRGINIA CHARLESTON DIVISION 

UNITED STATES OF AMERICA, 

Plaintiff, v. DAILY GAZETTE 

COMPANY, and MEDIANEWS GROUP, 

INC. Defendants. 

Civil Action No. 2:07–0329. 

Filed: May 22, 2007. 

Stamp: COPY—The original was filed 

in the Clerk’s Office at Charleston on 

May 22, 2007. 

TERESA L. DEPPNER, CLERK, U.S. 

District Court, Southern District of 

West Virginia 

Complaint 

The United States of America, acting 

under the direction of the Attorney 

General of the United States, brings this 

civil antitrust action to obtain equitable 

and other relief to prevent and restrain 

defendants Daily Gazette Company 

(‘‘Gazette Company’’) and MediaNews 

Group, Inc. (‘‘MediaNews Group’’) from 

continuing to violate Section 7 of the 

Clayton Act, 15 U.S.C. 18, and Sections 

1 and 2 of the Sherman Act, 15 U.S.C. 

1 & 2, as amended. The United States 

complains and alleges as follows: 

I. Nature of the Action 

1. This lawsuit challenges a series of 

transactions in 2004 that extinguished 

competition between Charleston’s two 

daily newspapers by combining The 

Charleston Gazette and the Charleston 

Daily Mail under the common 

ownership of Gazette Company as part 

of a plan to terminate the publication of 

the Charleston Daily Mail and leave 

Charleston with a single daily 

newspaper. 

2. For over 100 years, the citizens of 

Charleston have enjoyed the benefits of 

two local daily newspapers. Between 

1958 and May 7, 2004, the owners of the 

Charleston Gazette and the Charleston 

Daily Mail eliminated some—but not 

all—elements of competition between 

the two newspaper owners by forming 

a joint operating agreement (‘‘JOA’’), 

referred to as Charleston Newspapers. 

Under the agreement, the two 

newspapers coordinated certain 

financial and operational aspects of 

producing the two newspapers— 

principally, the printing, distribution, 

and sales of subscriptions and 

advertisements. Importantly, however, 

the two newspapers did not combine all 

of their operations or ownership. Until 

May 2004, the Gazette Company 

maintained separate ownership of and 

independently made decisions 

regarding the content and style of the 

Charleston Gazette that determined the 

attractiveness and worth of the paper to 

readers. Similarly, MediaNews Group 

and its predecessors maintained 

separate ownership of the Charleston 

Daily Mail and independently made all 

decisions regarding the content and 

style of the Charleston Daily Mail that 

determined the attractiveness and worth 

of the paper to readers in the Charleston 

area. The attractiveness to readers of 

each paper directly affected the value of 

the separate ownership interest of each 

company. 

3. On May 7, 2004, Gazette Company, 

the Charleston Gazette’s owner, 

acquired all of the assets of the 

Charleston Daily Mail, its only 

competitor, from MediaNews Group. On 

that same day, Gazette Company and 

MediaNews Group also entered into a 

new arrangement that gave MediaNews 

Group nominal responsibility for the 

news and editorial content of the 

Charleston Daily Mail, but gave Gazette 

Company ultimate control over the 

budgets, management, and news 

gathering and reporting of both 

newspapers, as well as the right to 

receive all the profits of both 

newspapers. The arrangement also gave 

Gazette Company the unilateral right to 

shut down the Charleston Daily Mail. 

4. The May 2004 transactions 

eliminated all remaining competition 

between the owners of the papers by 

consolidating the two papers under the 

ownership and control of Gazette 

Company as part of a plan by the 

Gazette Company to terminate 

publication of the Charleston Daily Mail 

and thereby force upon consumers in 

Charleston a single newspaper. Gazette 

Company’s plan was to use that control 

to weaken the Daily Mail to the point 

where it would fail and could be 

eliminated as a competitor to the 

Charleston Gazette, and Gazette 

Company acted quickly to carry out that 


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plan—until the Department’s 

investigation interrupted those efforts. 

5. Because the May 2004 transactions 

were part of a plan to terminate the 

publication of one of the two 

newspapers, the transactions eliminated 

any claim that the arrangement is 

immune from antitrust scrutiny under 

the Newspaper Preservation Act 

(‘‘NPA’’), 15 U.S.C. 1801, et seq. The 

NPA permits JOAs to be used to 

coordinate many of the commercial 

activities of otherwise independent 

newspapers, including the prices the 

newspapers charge for subscriptions 

and advertising, but only if the 

participants meet the Act’s requirements 

by, inter alia, preserving the existence of 

two newspapers with independent 

editorial and reportorial operations. The 

May 2004 transactions invalidated any 

claim by Charleston Newspapers to 

antitrust immunity under the NPA 

because they were part of a plan to 

terminate publication of the Charleston 

Daily Mail, leaving only one daily 

newspaper in the Charleston area. 

6. Without the benefit of antitrust 

immunity, the arrangement and the May 

2004 transactions violated the antitrust 

laws. The Charleston Gazette and the 

Charleston Daily Mail are the only two 

daily newspapers in the Charleston area, 

so elimination of competition between 

them unreasonably restrains 

competition in two distinct respects. 

First, by consolidating ownership of the 

two newspapers under Gazette 

Company, the transactions eliminated 

the economic incentives that previously 

had existed for each owner to increase 

the attractiveness of its newspaper to 

readers in the Charleston area. This 

reduction in competition violated 

Sections 1 and 2 of the Sherman Act, 15 

U.S.C. 1 and 2, and Section 7 of the 

Clayton Act, 15 U.S.C. 18. Second, the 

arrangement eliminated competition 

between the two newspapers in the sale 

of subscriptions and advertising. 

Because the two newspapers did not 

enjoy antitrust immunity under the NPA 

at least as of May 7, 2004, and because, 

as of May 2004, neither of the two 

papers qualified as a failing firm within 

the meaning of the antitrust laws, such 

an elimination of competition violated 

Sections 1 and 2 of the Sherman Act. 

7. Consequently, as discussed more 

fully herein, the United States seeks, 

inter alia, an order: (a) Rescinding the 

May 7 transactions; and (b) requiring 

Gazette Company and MediaNews 

Group to restore the Charleston Daily 

Mail’s competitiveness to the level that 

existed prior to the May 7 transactions. 

II. Jurisdiction and Venue 

8. Both Gazette Company and 

MediaNews Group are engaged in, and 

their activities substantially affect, 

interstate commerce. Through 

subsidiaries and partnerships it 

controls, Gazette Company sells 

advertising, which is published in the 

Charleston Gazette and the Charleston 

Daily Mail, to national advertisers 

located throughout the United States. In 

addition, Gazette Company and Media 

News Group regularly publish news, 

syndicated material, and other 

information in the Charleston Gazette 

and the Charleston Daily Mail that is 

gathered from other states and nations. 

In turn, they communicate to 

newspapers outside West Virginia the 

news and information that their staffs 

gather. 

9. The Court has subject matter 

jurisdiction under 15 U.S.C. 4 and 25, 

and 28 U.S.C. 1331, 1337(a), and 1345, 

to prevent and restrain the Defendants 

from continuing to violate 15 U.S.C. 1, 

2 and 18. 

10. The defendants maintain offices, 

transact business, and are found in 

Charleston, West Virginia. A substantial 

part of the events giving rise to the 

violations alleged herein occurred in 

Charleston, West Virginia. Accordingly, 

this Court has personal jurisdiction over 

the Defendants and venue is proper in 

this judicial district under Section 12 of 

the Clayton Act, 15 U.S.C. 22, and under 

28 U.S.C. 1391. 

III. Defendants 

11. Defendant Gazette Company, the 

owner and publisher of the Charleston 

Gazette and, since May 2004, the owner 

of the Charleston Daily Mail, is a 

privately-held corporation organized 

and existing under the laws of the State 

of West Virginia, with its principal 

place of business in Charleston, West 

Virginia. Through its subsidiaries, Daily 

Gazette Publishing Company LLC and 

Daily Gazette Holding Company LLC, 

and in its capacity as General Partner of 

Charleston Newspapers Holdings 

Limited Partnership, Gazette Company 

owns all the assets and controls all the 

business operations of Charleston 

Newspapers. Charleston Newspapers is 

responsible for printing, circulating, 

promoting and marketing both the 

Charleston Gazette and the Charleston 

Daily Mail. 

12. Defendant MediaNews Group, the 

owner and publisher of the Charleston 

Daily Mail from about September 1998 

until May 2004, is a corporation 

organized and existing under the laws of 

the State of Delaware, with its principal 

place of business in Denver, Colorado. 

MediaNews Group owns and publishes 

several dozen daily newspapers in 

various markets throughout the United 

States. On or about May 7, 2004, 

MediaNews Group sold the Charleston 

Daily Mail and related assets to Gazette 

Company. Today, MediaNews Group 

purports to provide ‘‘management and 

supervision’’ services for the Charleston 

Daily Mail in return for a fixed fee paid 

by Gazette Company. In reality, 

however, the news and editorial assets 

and resources of the Charleston Daily 

Mail are under the ownership and 

control of Gazette Company. 

IV. Background 

A. Competition Between the Two 

Newspaper Owners 

13. For many years, the Charleston 

Gazette, founded in 1873, and the 

Charleston Daily Mail, founded in 1880, 

operated completely independently. In 

1958, the then-owners of the two 

newspapers entered into a JOA, which 

combined the two newspapers’ printing, 

advertising, subscription sales, and 

distribution functions under a single 

management. Congress, in 1970, seeking 

to preserve the ability of independent 

newspapers to reduce operating 

expenses through JOAs, gave JOA 

arrangements then in effect explicit, but 

limited, antitrust immunity when it 

passed the Newspaper Preservation Act, 

15 U.S.C. 1801, et seq., as long as they 

met certain requirements. To receive 

that immunity, Congress required, inter 

alia, that the newspapers in a JOA be 

separately owned or controlled, that 

they maintain separate newsroom staffs, 

that their editorial policies be 

‘‘independently determined,’’ and that at 

the time the JOA was entered, no more 

than one newspaper in the JOA ‘‘was 

likely to remain or become a financially 

sound publication * * *.’’ Id. 

14. Until May 7, 2004, the Gazette 

Company and MediaNews Group were 

equal partners in the JOA, with each 

company separately owning its 

respective newspaper. In addition, each 

company appointed half of the 

representatives to a JOA committee that 

approved all significant decisions, 

including each newspaper’s budget and 

its advertising and subscription rates. 

That committee also selected a General 

Manager who was responsible for the 

Charleston JOA’s day-to-day operations. 

15. Within the Charleston JOA, each 

company shared profits and losses 

equally. However, each company had an 

independent economic incentive to 

increase the value of its respective 

newspaper ownership interest by 

attracting readers to that newspaper. 

The number of newspapers circulated or 


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sold is an important yardstick for 

measuring the franchise or sales value of 

a newspaper asset. In general, a 

newspaper that invests in increasing its 

quality and its appeal will attract more 

readers and advertisers, will have a 

longer lifespan, and will have an 

increased market value. Maintaining or 

increasing the value of a newspaper 

within a JOA can affect the outcome of, 

among other things, renegotiations of 

the terms or renewal of a JOA, 

negotiations over one or both JOA 

newspapers operating outside a JOA, 

and the identity and viability of the 

newspapers following the expiration or 

termination of a JOA. Thus, the owners 

of the Charleston newspapers had a 

variety of long and short-term economic 

incentives to compete to attract readers 

to their respective newspapers. 

16. The owners of the Charleston 

Gazette and the Charleston Daily Mail 

competed vigorously against each other 

for readers prior to the May 7 

transactions. They did so in various 

ways, such as seeking to generate 

original news and other content of 

interest to readers; trying to cover local 

news with greater depth, breadth and 

accuracy; breaking stories first; and 

offering the most attractive mix of news, 

features and editorials to readers. All of 

these decisions were outside the 

cooperation authorized under the JOA. 

This head to-head competition between 

the owners of the Charleston Gazette 

and the Charleston Daily Mail benefitted 

readers by giving them a choice between 

two daily newspapers with unique news 

and other content. 

17. The Charleston Gazette and the 

Charleston Daily Mail remained 

consistently profitable through May 

2004. Neither newspaper was in danger 

of failing in the near future. 

B. Prelude to the May 7 Transactions 

18. In late 2003, MediaNews Group 

negotiated to sell the Charleston Daily 

Mail along with MediaNews Group’s 50 

percent stake in the Charleston JOA to 

an experienced third-party newspaper 

company. On December 18, 2003, that 

company signed a Letter of Intent to 

purchase the Charleston Daily Mail and 

MediaNews Group’s share of the 

Charleston JOA for $55 million. 

MediaNews Group, pursuant to a Right 

of First Refusal provision included in 

the Charleston JOA, was required to 

notify Gazette Company of the Letter of 

Intent and give Gazette Company the 

opportunity to match the terms offered 

by the third party. 

19. Gazette Company sought to 

eliminate competition from the 

Charleston Daily Mail, rather than have 

a new owner continue that competition. 

Gazette Company achieved that goal by 

matching the third party’s $55 million 

offer to acquire all of the ownership 

interest in the Charleston Daily Mail. 

During this time, Gazette Company 

developed a plan to shut down the 

Charleston Daily Mail and thus become 

the publisher of the sole remaining daily 

newspaper in Charleston. This plan, 

formulated with the advice of an outside 

consultant and shared with Gazette 

Company’s lenders, called for the rapid 

reduction of the Charleston Daily Mail’s 

circulation to a level at which the 

newspaper would no longer be 

economically viable (projected to be 

achieved within two or three years). 

Gazette Company believed it could then 

successfully argue to the Department of 

Justice that it should not oppose the 

termination of the JOA because the 

Charleston Daily Mail would be a 

‘‘failing company.’’ Over the years, the 

Department of Justice has elected not to 

challenge the decision of several 

newspaper companies to stop 

publishing one of the newspapers in a 

JOA based on a demonstration that 

circulation for the newspaper had 

shrunk to the point where the paper was 

not economically viable and no buyer 

could be found. 

C. The May 7 Transactions 

20. On May 7, 2004, Gazette Company 

and MediaNews Group entered into two 

simultaneous transactions that had the 

purpose and effect of lessening 

competition between the Charleston 

Gazette and the Charleston Daily Mail, 

with the ultimate goal of creating a 

monopoly. First, Gazette Company 

acquired from MediaNews Group 

control of the Charleston Daily Mail’s 

assets and MediaNews Group’s 50 

percent ownership interest in the 

Charleston JOA, for a purchase price of 

approximately $55 million. Second, the 

parties entered into a new contract that 

preserved the appearance that the 

Charleston Daily Mail was still being 

published by MediaNews Group but, in 

fact, gave Gazette Company control over 

Charleston Newspapers, which is now 

owned 100 percent by Gazette 

Company. Under the new arrangement, 

MediaNews Group no longer shares in 

the profits or losses of the two 

newspapers nor contributes to the 

capital costs of the business. The 

arrangement allows Gazette Company 

unfettered discretion to set the news 

and editorial budget for the Charleston 

Daily Mail and gives Gazette Company 

the sole power to terminate publication 

of the Charleston Daily Mail when it 

sees fit. 

21. The May 7 transactions ended the 

prior JOA and created an entirely new 

arrangement between Gazette Company 

and MediaNews Group that does not 

meet the statutory definition of a JOA 

under Newspaper Preservation Act. The 

arrangement created by the May 7 

transactions does not qualify for the 

limited antitrust immunity under the 

Newspaper Preservation Act for several 

reasons, including that it has not been 

approved by the Attorney General and 

that it was part of a plan to terminate 

one of the two daily newspapers. 

22. The May 7 transactions gave 

Gazette Company, acting through its 

control of Charleston Newspapers, the 

unilateral right to take immediate and 

deliberate steps to implement its plan to 

shut down the Charleston Daily Mail by 

2007. Shortly after the May 7 

transactions were consummated, 

Gazette Company stopped all 

promotions and discounts for the 

Charleston Daily Mail; it stopped 

soliciting new readers for the Charleston 

Daily Mail; it stopped delivering the 

Charleston Daily Mail to thousands of 

customers; it attempted to convert 

existing Charleston Daily Mail home 

delivery subscribers to Charleston 

Gazette subscriptions; it stopped 

publishing a Saturday edition of the 

Charleston Daily Mail; it allowed almost 

half of the Charleston Daily Mail’s 

reporters to leave the newspaper 

without permitting replacements, thus 

crippling the ability of the Charleston 

Daily Mail to cover the news; and it cut 

the Charleston Daily Mail’s newsroom 

budget substantially in both 2004 and 

2005, which forced the Charleston Daily 

Mail to continue reducing the breadth 

and depth of its news coverage. 

23. As a result of Gazette Company’s 

actions following the May 7 

transactions, the Charleston Daily Mail’s 

circulation dropped from 35,076 in 

February 2004 to 23,985 in January 

2005. This decline in circulation 

matched almost precisely the 

projections that Gazette Company and 

its consultants made as part of Gazette 

Company’s pre-acquisition plan to shut 

down the Charleston Daily Mail by 

2007. During that same February 2004 to 

January 2005 time period, the 

Charleston Gazette’s circulation 

increased slightly, peaking at over 

52,000. Only after learning in or about 

December 2004 that the Antitrust 

Division of the Department of Justice 

was investigating the May 7 transactions 

did defendant Gazette Company take 

any steps to limit further damage to the 

Charleston Daily Mail caused by the 

actions described above. These steps, 

however, failed to restore the 

competitive conditions that had existed 

prior to the May 7 transactions. 


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V. Relevant Markets 

A. The Relevant Product Markets 

24. Local daily newspapers, such as 

the Charleston Gazette and the 

Charleston Daily Mail, provide a unique 

package of attributes for their readers. 

They provide national, state, and local 

news in a timely manner and in a 

convenient, hardcopy format. The news 

stories featured in such newspapers are 

more detailed, when compared to the 

news reported by radio or television, 

and they cover a wide range of topics of 

interest to local readers, not just major 

news highlights. Newspapers, such as 

the Charleston Gazette and the 

Charleston Daily Mail, are portable and 

allow the reader to read the news, 

advertisements, and other information 

at his or her own convenience. Readers 

also value other features of local daily 

newspapers, such as calendars of local 

events, movie and TV listings, classified 

advertisements, commercial 

advertisements, legal notices, comics, 

syndicated columns, and obituaries. 

Most readers of local daily newspapers 

in the Charleston area do not consider 

weekly newspapers, radio news, 

television news, Internet news, or any 

other media to be adequate substitutes 

for the two local daily newspapers 

serving the Charleston area. Thus, in the 

event of a small but significant increase 

in the price of local daily newspapers, 

the number of readers who would 

switch to other sources of local news 

and information, and would stop buying 

any daily local newspaper, would not be 

sufficient to make such a price increase 

unprofitable. 

25. Advertising in the Charleston 

Gazette and the Charleston Daily Mail 

allows advertisers to reach a broad 

cross-section of consumers in the 

Charleston metropolitan area with a 

detailed message in a timely manner. A 

substantial portion of advertisers 

seeking to reach Charleston area 

consumers do not consider other types 

of advertising, such as that in weekly 

newspapers, on radio, on television, or 

on the Internet to be adequate 

substitutes for advertising in a local 

daily newspaper. Thus, in the event of 

a small but significant increase in the 

price of daily newspaper local 

advertising, the number of advertisers 

seeking to reach Charleston area 

consumers that would substitute these 

other types of advertising for advertising 

in a local daily newspaper, or would 

reduce their purchase of advertising in 

a local daily newspaper, would not be 

sufficient to make such a price increase 

unprofitable. 

26. Accordingly, the sale of local daily 

newspapers to readers, and the sale of 

access to those readers to advertisers in 

those newspapers, each constitutes a 

line of commerce and a relevant product 

market within the meaning of Section 7 

of the Clayton Act and for purposes of 

Sections 1 and 2 of the Sherman Act. 

B. The Relevant Geographic Market 

27. The Charleston Gazette and the 

Charleston Daily Mail are both 

produced, published, and distributed to 

readers in the Charleston, West Virginia 

area (primarily Kanawha and Putnam 

Counties). Both newspapers provide 

news relating to the Charleston area in 

addition to state and national news. 

28. Local daily newspapers that serve 

areas outside of the Charleston area do 

not regularly provide local news 

specific to the Charleston area. From a 

reader’s standpoint, local daily 

newspapers serving areas outside of the 

Charleston area are not acceptable 

substitutes for the Charleston Gazette 

and the Charleston Daily Mail. For this 

reason, local daily newspapers outside 

of the Charleston area do not have any 

significant circulation or sales in 

Charleston. In the event of a small but 

significant increase in the price of local 

daily newspapers in Charleston, the 

number of readers who would substitute 

local daily newspapers outside of the 

Charleston area, and would stop buying 

any daily local newspaper, would not be 

sufficient to make such a price increase 

unprofitable. 

29. The Charleston Gazette and the 

Charleston Daily Mail allow advertisers 

to target readers in the Charleston area. 

From the standpoint of an advertiser 

selling goods or services in the 

Charleston area, advertising in local 

daily newspapers serving areas outside 

of the Charleston area is not an 

acceptable substitute for advertising in 

the Charleston Gazette and the 

Charleston Daily Mail. In the event of a 

small but significant increase in the 

price of advertisements in local daily 

newspapers serving the Charleston area, 

the number of advertisers that would 

substitute local daily newspapers 

outside of the Charleston area, and 

would reduce their purchase of 

advertising in a local daily newspaper, 

would not be sufficient to make such a 

price increase unprofitable. 

30. Accordingly, the Charleston, West 

Virginia area is a section of the country 

and a relevant geographic market within 

the meaning of Section 7 of the Clayton 

Act and for purposes of Sections 1 and 

2 of the Sherman Act. 

VI. Anticompetitive Effects 

31. The May 7 transactions have and 

will continue to substantially lessen 

competition in the local daily 

newspaper market in the Charleston, 

West Virginia area by giving Gazette 

Company a monopoly in the Charleston 

local daily newspaper market. These 

transactions gave Gazette Company 

control over and the power to weaken 

or eliminate the Charleston Daily Mail 

and have already had, and will continue 

to have, among others, the following 

adverse effects on competition: 

a. Reduced output (both quantity and 

quality) of newspapers; and 

b. Increased prices to readers and 

advertisers. 

VII. Entry 

32. Entry by local daily newspapers 

into the Charleston, West Virginia, area 

is time-consuming and difficult, and is 

not likely to prevent the anticompetitive 

effects of the May 7 transactions by 

constraining Gazette Company’s market 

power in the foreseeable future. Local 

daily newspapers incur significant fixed 

costs, many of which are sunk. 

Examples of these sunk costs include 

building or gaining access to a printing 

facility, establishing a distribution 

network, hiring reporters and editors, 

news gathering, and marketing the very 

existence of the new paper, all of which 

take substantial time. These costs often 

are termed ‘‘first copy’’ costs because 

they are costs that newspaper 

companies must incur before they print 

the first copies of their newspapers. In 

the event that the entrant fails or exits 

the newspaper industry, it cannot 

recover all of these costs, making entry 

risky and likely unprofitable. As a 

result, entry into Charleston daily 

newspaper market would not be timely, 

likely, or sufficient to prevent the harm 

to competition resulting from the May 7 

transactions. Since May 7, 2004 there 

have been no attempts to enter the local 

daily newspaper market in the 

Charleston area. 

VIII. Violations 

Count One 

(Violation of Section 7 of the Clayton 

Act) 

33. Each and every allegation in 

paragraphs 1 through 32 of this 

Complaint is here realleged with the 

same force and effect as though said 

paragraphs were here set forth in full. 

34. Gazette Company and MediaNews 

Group are hereby named as defendants 

on Count One of this Complaint. 

35. The May 7 transactions constitute 

an acquisition of assets by Gazette 

Company from MediaNews Group, the 

effect of which has been and is likely to 

continue to be to lessen competition 

substantially and to tend to create a 

monopoly in interstate trade and 


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commerce in the sale of local daily 

newspapers and advertising in those 

newspapers in the Charleston, West 

Virginia area, in violation of Section 7 

of the Clayton Act, 15 U.S.C. 18. 

36. The May 7 transactions, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18, have had the 

substantial anticompetitive effects set 

forth in ¶ 31 above, and, unless 

rescinded and restrained, those effects 

likely will continue. 

Count Two 

(Violation of Section 1 of the Sherman 

Act) 

37. Each and every allegation in 

paragraphs 1 through 32 of this 

Complaint is here realleged with the 

same force and effect as though said 

paragraphs were here set forth in full. 

38. Gazette Company and MediaNews 

Group are hereby named as defendants 

on Count Two of this Complaint. 

39. The May 7 transactions have 

eliminated the incentives and ability for 

MediaNews Group to compete 

effectively with Gazette Company in 

Charleston and have given Gazette 

Company the power to control and, 

ultimately, eliminate the Charleston 

Daily Mail. The arrangement created by 

the May 7 transactions is not immune 

under the Newspaper Preservation Act. 

For the above reasons, the May 7 

transactions constitute a contract, 

combination or conspiracy by and 

among defendants that has 

unreasonably restrained trade and 

commerce in violation of Section 1 of 

the Sherman Act, 15 U.S.C. 1. 

40. The May 7 transactions have had 

and will continue to have 

anticompetitive effects in the relevant 

market, including among others, those 

set forth in ¶ 31, above. 

41. The above violation is continuing 

and will continue unless the relief 

requested hereinafter is granted. 

Count Three 

(Violation of Section 2 of the Sherman 

Act) 

42. Each and every allegation in 

paragraphs 1 through 32 of this 

Complaint is here realleged with the 

same force and effect as though said 

paragraphs were here set forth in full. 

43. Gazette Company is hereby named 

as the defendant on Count Three of this 

Complaint. 

44. Through the anticompetitive 

conduct described herein, Gazette 

Company has monopolized the 

Charleston, West Virginia, local daily 

newspaper market. As a result of 

defendants’ actions, Gazette Company 

now possesses substantial monopoly 

power in the sale of local daily 

newspapers in the Charleston area. 

Gazette Company has willfully 

maintained, and unless restrained by 

the Court will continue to willfully 

maintain, this unlawful monopoly 

power through anticompetitive and 

unreasonably exclusionary conduct. 

Defendants’ actions and practices 

constitute unlawful monopolization in 

violation of Section 2 of the Sherman 

Act, 15 U.S.C. 2. 

IX. Requested Relief 

45. The United States requests that 

the Court: 

a. Adjudge and decree that the May 7, 

2004, transactions are illegal, and their 

effects may be substantially to lessen 

competition, or to tend to create a 

monopoly in violation of Section 7 of 

the Clayton Act, 15 U.S.C. 18; 

b. Adjudge and decree that the May 7 

transactions constitute an illegal 

restraint of interstate trade and 

commerce in violation of Section 1 of 

the Sherman Act, 15 U.S.C. 1; 

c. Adjudge and decree that Gazette 

Company has unlawfully monopolized 

the Charleston daily newspaper market 

in violation of Section 2 of the Sherman 

Act, 15 U.S.C. 2; 

d. Rescind the May 7 transactions; 

e. Direct the defendants to restore the 

Charleston Daily Mail to its pre-May 7, 

2004 competitive condition; 

f. Award the United States such other 

and further relief as the Court may deem 

just and proper to redress and prevent 

recurrence of the above violations, to 

dissipate their anticompetitive effects, 

and to restore effective competition in 

the Charleston daily newspaper market; 

and 

g. Award the United States the costs 

of this action. 

DATED: May 22, 2007 

FOR PLAINTIFF UNITED STATES OF 

AMERICA 

THOMAS O. BARNETT, 

Assistant Attorney General, Antitrust 

Division 

DAVID L. MEYER, 

Deputy Assistant Attorney General, Antitrust 

Division 

J. ROBERT KRAMER II, 

Director of Operations 

lllllllllllllllllllll

CHARLES T. MILLER, 

United States Attorney, Southern District of 

West Virginia, by Stephen M. Horn /s/by 

CAD, Assistant United States Attorney, WV 

State Bar Number 1788, P.O. Box 1713, 

Charleston, WV 25326, Phone: 304–345–2200 

Fax: 304–347–5443, E-mail: 

steve.horn@usdoj.gov 

JOHN R. READ, 

Chief, Litigation III 

NINA B. HALE, 

Assistant Chief, Litigation III 

THOMAS J. HORTON 

BENNETT J. MATELSON 

WILLIAM H. JONES II 

MARK A. MERVA 

MATTHEW J. BESTER 

JENNIFER A. WAMSLEY 

BERNARD M. HOLLANDER, 

Senior Trial Attorney, Attorneys for the 

United States, United States Department of 

Justice, Antitrust Division, Litigation III 

Section, 325 7th Street, NW., Suite 300, 

Washington, DC 20530, Phone: 202–616– 

5871 Fax: 202–514–7308, E-mail: 

Thomas.Horton@usdoj.gov, 

Bennett.Matelson@usdoj.gov 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF WEST 

VIRGINIA 

CHARLESTON DIVISION 

UNITED STATES OF AMERICA, 

Plaintiff, v. DAILY GAZETTE 

COMPANY, and MEDIANEWS GROUP, 

INC., Defendants. 

Civil Action No. 2:07–0329. 

Judge Copenhaver. 

Magistrate Judge Stanley. 

Filed: January 20, 2010 

[Proposed] Final Judgment 

Whereas, Plaintiff, United States of 

America, filed its Complaint on May 22, 

2007, the United States and Defendants, 

Daily Gazette Company and MediaNews 

Group, Inc., by their respective 

attorneys, have consented to the entry of 

this Final Judgment without trial or 

adjudication of any issue of fact or law, 

and without this Final Judgment 

constituting any evidence against or 

admission by any party regarding any 

issue of fact or law; 

And whereas, Defendants agree to be 

bound by the provisions of this Final 

Judgment pending its approval by the 

Court; 

And whereas, the essence of this Final 

Judgment is the prompt adoption of 

certain procedures and prohibitions by 

Defendants to assure that competition is 

not substantially lessened; 

And whereas, the United States 

requires Defendants to agree to certain 

procedures and prohibitions for the 

purpose of remedying the loss of 

competition alleged in the Complaint; 

And whereas, Defendants have 

represented to the United States that the 

actions required below can and will be 

made and that Defendants will later 

raise no claim of hardship or difficulty 

as grounds for asking the Court to 

modify any of the provisions contained 

below; 

Now therefore, before any testimony 

is taken, without trial or adjudication of 

any issue of fact or law, and upon 


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consent of the parties, it is ordered, 

adjudged and decreed: 

I. Jurisdiction 

This Court has jurisdiction over the 

subject matter of and each of the parties 

to this action. The Complaint states a 

claim upon which relief may be granted 

against Defendants under Section 7 of 

the Clayton Act, as amended (15 U.S.C. 

18), and Sections 1 and 2 of the 

Sherman Act, as amended (15 U.S.C. 1 

& 2). 

II. Definitions 

As used in this Final Judgment: 

A. ‘‘Charleston Daily Mail’’ means the 

Daily Newspaper of that name 

distributed in the Charleston, West 

Virginia Area. 

B. ‘‘Charleston Gazette’’ means the 

Daily Newspaper of that name 

distributed in the Charleston, West 

Virginia Area. 

C. ‘‘Charleston Newspapers’’ means 

the unincorporated joint venture 

operating under the laws of West 

Virginia, with its principal place of 

business in Charleston, West Virginia, 

its successors and assigns, and its 

subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their shareholders, 

directors, officers, managers, agents, and 

employees. 

D. ‘‘Charleston Newspapers Holdings, 

L.P.’’ means the Delaware Limited 

Partnership formed on May 7, 2004. 

E. ‘‘Charleston, West Virginia Area’’ 

means Kanawha and Putnam Counties 

in West Virginia. 

F. ‘‘Daily Newspaper’’ means a print 

publication which is published no fewer 

than five days per week and in which 

a substantial portion of the content is 

devoted to the dissemination of news 

and editorial opinion. 

G. ‘‘Editorial Content’’ means the 

news, feature, and opinion content of, 

and the format, dress, makeup, and 

design of, a Daily Newspaper. 

H. ‘‘Failing Firm’’ means a firm that 

has satisfied all of the conditions stated 

in the U.S. Department of Justice and 

Federal Trade Commission Horizontal 

Merger Guidelines as applied by the 

Department of Justice and/or federal 

courts to newspapers published in a 

joint operating agreement under the 

Newspaper Preservation Act, 15 U.S.C. 

1801–1804. 

I. ‘‘Final Judgment’’ includes the 

following agreements attached as 

Exhibit A: Amended and Restated 

Limited Partnership Agreement for 

Charleston Newspapers Holdings L.P.; 

Amended and Restated Operating 

Agreement of Daily Gazette Holding 

Company, LLC; Second Amended and 

Restated Joint Operating Agreement; the 

Put/Call Agreement; and the Charleston 

Newspapers Holdings L.P. Warrant to 

Purchase Class B Limited Partnership 

Units Initially Constituting a 20% 

Percentage Interest. 

J. ‘‘Gazette Company’’ means 

defendant Daily Gazette Company, a 

privately-held corporation organized 

and existing under the laws of the State 

of West Virginia, with its principal 

place of business in Charleston, West 

Virginia, its successors and assigns, and 

its subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their shareholders, 

directors, officers, managers, agents, and 

employees. Without limiting the 

foregoing, Gazette Company shall 

include Charleston Newspapers. 

K. ‘‘Intellectual Property of the 

Charleston Daily Mail’’ includes the 

masthead, trademarks, copyrights, trade 

names, service names and service marks 

of the Charleston Daily Mail; its 

subscriber lists and advertiser lists; 

print and electronic archives; associated 

Web sites and URLs (including 

‘‘dailymail.com’’); and all legal rights 

associated with these assets. 

L. ‘‘MediaNews Group’’ means 

defendant MediaNews Group, Inc., now 

known as Affiliated Media, Inc., a 

corporation organized and existing 

under the laws of the State of Delaware, 

with its principal place of business in 

Denver, Colorado, its successors and 

assigns, and their shareholders, 

subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

Without limiting the foregoing, 

MediaNews Group shall include 

Charleston Publishing Company. 

M. ‘‘Person’’ means any natural 

person, corporate entity, partnership, 

joint venture, association, government 

entity, trust, or other business or legal 

entity, whether private or governmental. 

N. ‘‘Publication’’ means all activities 

associated with the business of offering 

a Daily Newspaper to the public as a 

commercial endeavor, including but not 

limited to, editing, writing, printing, 

circulating, operating, marketing, and 

distributing such Daily Newspapers and 

selling advertisements and promotions 

therein. 

O. ‘‘Relating to’’ or ‘‘Relates to’’ means 

in whole or in part constituting, 

containing, concerning, discussing, 

describing, analyzing, identifying, or 

stating. 

P. ‘‘United States’’ means the 

Department of Justice, Antitrust 

Division. 

Q. The terms ‘‘and’’ and ‘‘or’’ have both 

conjunctive and disjunctive meanings. 

III. Applicability 

This Final Judgment applies to 

Gazette Company and MediaNews 

Group, as defined above, and all other 

persons in active concert or 

participation with any of them who 

receive actual notice of this Final 

Judgment by personal service or 

otherwise. 

IV. Required and Prohibited Conduct 

A. (1) Within 5 business days after the 

entry of this Final Judgment, Gazette 

Company and MediaNews Group shall 

enter into, and abide by the terms of, the 

Amended and Restated Limited 

Partnership Agreement for Charleston 

Newspapers Holdings L.P.; the 

Amended and Restated Operating 

Agreement of Daily Gazette Holding 

Company, LLC; the Second Amended 

and Restated Joint Operating 

Agreement; the Put/Call Agreement; and 

the Charleston Newspapers Holdings 

L.P. Warrant to Purchase Class B 

Limited Partnership Units Initially 

Constituting a 20% Percentage Interest, 

which are incorporated into this Final 

Judgment and attached hereto as Exhibit 

A. Gazette Company and MediaNews 

Group shall operate Charleston 

Newspapers, Charleston Newspapers 

Holdings L.P., the Charleston Gazette 

and the Charleston Daily Mail in 

accordance with the terms of the 

agreements in Exhibit A. No agreement 

in Exhibit A may be modified, amended, 

superseded or terminated without the 

prior written approval of the United 

States for the term of the Final 

Judgment. Upon entering into the 

contracts in Exhibit A, any existing 

agreements between Gazette Company 

and MediaNews Group relating to the 

Publication of any Daily Newspaper in 

Charleston, West Virginia, other than 

those contained in Exhibit A, shall be 

void and shall not be enforced 

thereafter. Except as expressly 

authorized by the agreements in Exhibit 

A, Gazette Company and MediaNews 

Group shall not directly or indirectly 

enter into any agreement subsequent to 

the entry of this Final Judgment that 

relates to the Publication of any Daily 

Newspaper in Charleston, West 

Virginia, other than agreements entered 

into with third parties in the ordinary 

course of business, without the prior 

written consent of the United States. 

(2) Defendants shall not, without the 

prior written consent of the United 

States, pledge or otherwise offer as 

security or collateral, the assets 

comprising the Intellectual Property of 

the Charleston Daily Mail, in whole or 

in part, for credit or other consideration, 

to a greater extent than such assets were 


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pledged or offered as security or 

collateral as of December 11, 2009. 

B. The Charleston Daily Mail shall 

continue to be published as a Daily 

Newspaper. The publication of the 

Charleston Daily Mail as a Daily 

Newspaper shall not be terminated 

unless it is a Failing Firm and the 

United States has given its prior written 

approval, which approval shall not be 

unreasonably withheld. Prior to 

receiving written approval from the 

United States to terminate publication 

of the Charleston Daily Mail as a Daily 

Newspaper, Gazette Company and 

MediaNews Group may not establish a 

termination date for the Charleston 

Daily Mail. Disputes regarding the 

application of the provisions of this 

Section IV(B) may be submitted to the 

Court for resolution. 

C. If during the term of this Final 

Judgment the Charleston Daily Mail 

shall cease publication as a Daily 

Newspaper, or the operating agreement 

between Defendants governing 

Charleston Newspapers is dissolved or 

terminated, or Charleston Newspapers 

Holdings, L.P. is dissolved or 

terminated (collectively referred to as 

‘‘Termination Events’’), ownership of the 

Intellectual Property of the Charleston 

Daily Mail shall, after the prior 

satisfaction of the claims of all creditors 

of Charleston Newspapers Holdings, 

L.P. in accordance with the provisions 

of Section 7.3 of the Amended and 

Restated Limited Partnership Agreement 

for Charleston Newspapers Holdings, 

L.P., immediately transfer to 

MediaNews Group at no cost. Within 

ninety days prior to the occurrence of 

any of the Termination Events, Gazette 

Company shall hire, subject to the 

approval of the United States, an 

appraiser experienced in the newspaper 

industry to perform an assessment of the 

fair market value, separately, of each 

asset comprising the Intellectual 

Property of the Charleston Daily Mail. 

To the extent the valuations determine 

that any assets comprising the 

Intellectual Property of the Charleston 

Daily Mail may be freely disposed of by 

Gazette Company under the terms of 

Section 7.8 of the United Bank Loan 

Agreement or the equivalent provision 

of any future credit agreement, Gazette 

Company shall transfer those assets to 

MediaNews Group (or its assignee) at no 

cost. In the event Gazette Company is 

unable to transfer immediately all or 

some of the assets comprising the 

Intellectual Property of the Charleston 

Daily Mail due to any security interest 

or lien held on those assets by any 

creditor, Gazette Company shall use its 

good faith efforts to (1) persuade any 

such creditor to release the security 

interest or lien on those assets; (2) assist 

any third party seeking such a release; 

or (3) transfer the assets as soon as 

possible in the next fiscal year (to the 

extent permissible under the United 

Bank Loan Agreement or any future 

credit agreement). Any assets that are 

released by the creditors shall be 

transferred to MediaNews Group (or its 

assignee) at no cost. In the event that the 

Charleston Daily Mail’s print and 

electronic archives are not transferred to 

MediaNews Group, Charleston 

Newspapers will grant to MediaNews 

Group (or its assignee) a royalty-free 

license to use the Charleston Daily 

Mail’s print and electronic archives for 

the sole purpose of continuing to 

publish the Charleston Daily Mail for so 

long as MediaNews Group (or its 

assignee) publishes the Charleston Daily 

Mail as a Daily Newspaper in 

Charleston. Except as expressly 

authorized by this Final Judgment, 

Gazette Company shall not directly or 

indirectly transfer to any other Person 

the ownership of some or all of the 

Intellectual Property of the Charleston 

Daily Mail without the prior written 

consent of the United States. If during 

the term of this Final Judgment the 

ownership of some or all of the 

Intellectual Property of the Charleston 

Daily Mail is transferred from Gazette 

Company to any other Person, Gazette 

Company shall not reacquire any part of 

the Intellectual Property of the 

Charleston Daily Mail during the term of 

this Final Judgment. Transfer of title to 

the Intellectual Property of the 

Charleston Daily Mail by Gazette 

Company shall be made free and clear 

of any liens or other encumbrances to 

the free transfer of title by the acquirer 

(including but not limited to rights of 

first refusal). 

D. The Editorial Content of the 

Charleston Daily Mail shall be 

determined solely by MediaNews Group 

and the staff of the Charleston Daily 

Mail. The Editorial Content of the 

Charleston Gazette shall be determined 

solely by Gazette Company and the staff 

of the Charleston Gazette. Gazette 

Company shall not, directly or 

indirectly, take any action to influence 

the Editorial Content of the Charleston 

Daily Mail, nor shall MediaNews Group, 

directly or indirectly, take any action to 

influence the Editorial Content of the 

Charleston Gazette. Gazette Company 

and MediaNews Group shall not enter 

into any agreement limiting the separate 

and independent determination of the 

Editorial Content of their respective 

Daily Newspapers. 

E. Gazette Company and MediaNews 

Group shall not take any action with the 

intent to cause the Charleston Daily 

Mail to become a Failing Firm. Neither 

Gazette Company nor MediaNews 

Group shall discriminate against, or 

cause Charleston Newspapers to 

discriminate against, the Charleston 

Daily Mail in performing circulation 

sales or advertising sales activities. 

F. Commencing no later than thirty 

(30) days after the entry of this Final 

Judgment and continuing for a period of 

no less than six (6) months thereafter, 

Defendants shall cause Charleston 

Newspapers to offer the Charleston 

Daily Mail at a discount of no less than 

fifty (50) percent off the regular retail 

price to all new subscribers. Charleston 

Newspapers shall inform prospective 

new subscribers of this discount in any 

subscription solicitation efforts that it 

undertakes. During this period, 

Charleston Newspapers may not extend 

this same discount, or any greater 

discount, to subscribers of the 

Charleston Gazette. 

V. Affidavits 

Within sixty (60) calendar days of the 

entry of this Final Judgment in this 

matter, and every year thereafter until 

the expiration of this Final Judgment, 

Defendants shall deliver to the United 

States an affidavit as to the fact and 

manner of their compliance with 

Section IV of this Final Judgment. 

Assuming the information set forth in 

the affidavit is true and complete, any 

objection by the United States to 

information provided by Defendants, 

including limitation on information, 

shall be made within fourteen (14) 

calendar days of receipt of such 

affidavit. 

VI. Compliance Inspection 

A. For the purposes of determining or 

securing compliance with this Final 

Judgment, or of determining whether 

the Final Judgment should be modified 

or vacated, or determining whether to 

consent to any proposed agreement per 

Section IV(A), or whether to approve a 

termination of publication per Section 

IV(B), or whether to consent to any 

transfer per Section IV(C), and subject to 

any legally recognized privilege, from 

time to time authorized representatives 

of the United States, including 

consultants and other persons retained 

by the United States, shall, upon written 

request of an authorized representative 

of the Assistant Attorney General in 

charge of the Antitrust Division, and on 

reasonable notice to defendants, be 

permitted: 

(1) access during defendants’ office hours 

to inspect and copy, or at the option of the 

United States, to require defendants to 

provide hard copy or electronic copies of, all 

books, ledgers, accounts, records, data, and 


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documents in the possession, custody, or 

control of defendants, relating to any matters 

contained in this Final Judgment; and 

(2) to interview, either informally or on the 

record, defendants’ officers, employees, or 

agents, who may have their individual 

counsel present, regarding such matters. The 

interviews shall be subject to the reasonable 

convenience of the interviewee and without 

restraint or interference by defendants. 

B. Upon the written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, defendants shall 

submit written reports or response to 

written interrogatories, under oath if 

requested, relating to any of the matters 

contained in this Final Judgment as may 

be requested. 

C. No information or documents 

obtained by the means provided in this 

Section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, 

except in the course of legal proceedings 

to which the United States is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

D. If at the time information or 

documents are furnished by defendants 

to the United States, defendants 

represent and identify in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure, and defendants mark each 

pertinent page of such material, ‘‘Subject 

to claim of protection under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure,’’ then the United States shall 

give defendants ten (10) calendar days 

notice prior to divulging such material 

in any legal proceeding (other than a 

grand jury proceeding). 

VII. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, including 

the agreements of the parties attached 

hereto as Exhibit A, to modify any of 

their provisions, to enforce compliance, 

and to punish violations of their 

provisions. 

VIII. Expiration of Final Judgment 

Unless this Court grants an extension, 

this Final Judgment shall expire ten (10) 

years from the date of its entry. The 

expiration of this Final Judgment shall 

not automatically trigger the termination 

of the agreements contained in Exhibit 

A. After the expiration of this Final 

Judgment, the agreements contained in 

Exhibit A will be governed by their own 

terms. 

IX. Public Interest Determination 

Entry of this Final Judgment is in the 

public interest. The parties have 

complied with the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16, including making copies 

available to the public of this Final 

Judgment, the Competitive Impact 

Statement, and any comments thereon 

and the United States’s responses to 

comments. Based upon the record 

before the Court, which includes the 

Competitive Impact Statement and any 

comments and response to comments 

filed with the Court, entry of this Final 

Judgment is in the public interest. 

Court approval subject to procedures of 

Antitrust Procedures and Penalties Act, 15 

U.S.C. 16. 

Dated: 

John T. Copenhaver, Jr. 

United States District Judge 

EXHIBIT A 

AMENDED AND RESTATED 

LIMITED PARTNERSHIP AGREEMENT 

FOR 

CHARLESTON NEWSPAPERS 

HOLDINGS, L.P. 

A DELAWARE LIMITED 

PARTNERSHIP 

llllllllllll, 2009 

THIS AMENDED AND RESTATED 

LIMITED PARTNERSHIP AGREEMENT 

is entered into as of 

llllllllllll, 2009 by and 

among Daily Gazette Holding Company, 

LLC, a Delaware limited liability 

company (‘‘DGHC’’) and Charleston 

Publishing Company, a Delaware 

corporation (‘‘CPC’’). 

Recitals 

Whereas, the Partnership was formed 

on May 7, 2004 in connection with the 

transactions contemplated by that 

certain Master Restructuring and 

Purchase Agreement (the ‘‘Master 

Restructuring Agreement’’) entered into 

on May 7, 2004, by Daily Gazette 

Company, MediaNews Group, Inc. (now 

known as Affiliated Media, Inc.) 

(‘‘MNG’’), CPC and the Joint Venture; 

Whereas, the Partnership has 

managed and will, pursuant to the 

Second Amended and Restated Joint 

Venture Agreement dated as of even 

date herewith (the ‘‘JOA’’), continue to 

manage the business and affairs of the 

Joint Venture; and 

Whereas, DGHC and CPC desire to 

amend various provisions of the Limited 

Partnership Agreement dated May 7, 

2004 (the ‘‘Prior Partnership 

Agreement’’), by and among DGHC, CPC 

and ABRY/Charleston, Inc. to restate it 

in its entirety and to supplement it, as 

herein provided; Now, therefore, the 

parties agree as follows: 

Article I 

Definitions 

1.1 Definitions. As used herein, the 

following terms shall have the following 

meanings: 

1.1.1 Act: the Delaware Revised 

Uniform Limited Partnership Act, 6 Del. 

Code, as it may be amended from time 

to time, and any successor to such Act. 

1.1.2 Affiliate: with respect to any 

Person, any other Person directly or 

indirectly controlling or controlled by 

such Person or under direct or indirect 

common control with such Person. 

1.1.3 Adjusted Capital Account: 

with respect to any Partner, the deficit 

balance, if any, in such Partner’s Capital 

Account as of the end of the relevant 

Fiscal Year or other period, after giving 

effect to the following adjustments: 

(i) Crediting to such Capital Account 

any amounts that such Partner is 

obligated to restore to the Partnership 

pursuant to this Agreement or as 

otherwise described Treasury 

Regulations Section 1.704–1(b)(2)(ii)(c) 

or is deemed to be obligated to restore 

pursuant to the penultimate sentences 

of Treasury Regulations Sections 1.704– 

2(g)(1) and 1.704–2(i)(5); and 

(ii) Debiting from such Capital 

Account the items described in Treasury 

Regulations Sections 1.704– 

1(b)(2)(ii)(d)(4), 1.704–1(b)(2)(ii)(d)(5) 

and 1.704–1(b)(2)(ii)(d)(6). 

The foregoing definition of Adjusted 

Capital Account is intended to comply 

with the provisions of Treasury 

Regulations Section 1.704–1(b)(2)(ii)(d) 

and shall be interpreted consistently 

therewith. 

1.1.4 Agreement: this Amended and 

Restated Limited Partnership 

Agreement, as it may be amended from 

time to time. 

1.1.5 Capital Account: with respect 

to any Partner, the account maintained 

for such Partner in accordance with the 

capital accounting rules of Section 

704(b) of the Code and the provisions of 

Treasury Regulations Section 1.704– 

1(b)(2)(iv). Subject to any contrary 

requirements of the Code and the 

Treasury Regulations issued thereunder, 

each Partner’s Capital Account shall 

equal (1)(i) the amount set forth as such 

Partner’s capital account as of the date 

hereof as set forth on Exhibit B; (ii) the 

amount of money which has been 

contributed by that Partner to the 


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Partnership after the date hereof, if any; 

(ii) the fair market value, determined 

without regard to Code Section 7701(g) 

of the property, if any, which has been 

contributed by that Partner to the 

Partnership after the date hereof (net of 

any liabilities that are secured by such 

contributed property or that the 

Partnership or any other Partner is 

considered to assume under Code 

Section 752); (iii) allocations which 

have been made to that Partner of Net 

Profit and items of income and gain 

pursuant to Article V after the date 

hereof; and (iv) other additions which 

have been made in accordance with the 

Code after the date hereof, decreased by 

(2)(i) the amount of cash which has been 

distributed to that Partner by the 

Partnership after the date hereof; (ii) 

allocations which have been made to 

that Partner of Net Loss and items of 

loss and deduction pursuant to Article 

V after the date hereof; (iii) the fair 

market value, determined without 

regard to Code Section 7701(g), of any 

property which has been distributed to 

that Partner by the Partnership after the 

date hereof (net of any liabilities that are 

secured by such distributed property or 

that such Partner is considered to 

assume or take under Code Section 752); 

and (iv) other deductions which have 

been made in accordance with the Code 

after the date hereof. 

1.1.6 Capital Contribution: with 

respect to any Partner, any cash or other 

property that such Partner has 

contributed to the capital of the 

Partnership pursuant to the terms of this 

Agreement. 

1.1.7 Certificate of Limited 

Partnership: the certificate of limited 

partnership of the Partnership, as 

amended. 

1.1.8 Class A Limited Partner: a 

Person owning Class A Limited Partner 

Units that has been admitted to the 

Partnership as a Limited Partner 

pursuant to the terms of this Agreement. 

1.1.9 Class A Limited Partnership 

Interest: the Partnership Interest with 

respect to the Class A Limited Partner 

Units. 

1.1.10 Class A Limited Partner Unit: 

any Partnership Unit having the rights 

and obligations specified in this 

Agreement with respect to a Class A 

Limited Partner Unit. 

1.1.11 Class B Limited Partner: a 

Person owning Class B Limited Partner 

Units that has been admitted to the 

Partnership as a Limited Partner 

pursuant to the terms of this Agreement. 

1.1.12 Class B Limited Partner Unit: 

any Partnership Unit having the rights 

and obligations specified in this 

Agreement with respect to a Class B 

Limited Partner Unit. 

1.1.13 Code: the Internal Revenue 

Code of 1986, as amended. 

1.1.14 Depreciation: with respect to 

each Fiscal Year, an amount equal to the 

depreciation, amortization or other cost 

recovery deduction allowable with 

respect to an asset for such Fiscal Year, 

except that if the Gross Asset Value of 

an asset differs from its adjusted basis 

for federal income tax purposes at the 

beginning of such Fiscal Year, 

Depreciation shall be determined in the 

manner that is described in Treasury 

Regulations Section 1.704– 

1(b)(2)(iv)(g)(3) or Treasury Regulations 

Section 1.704–3(d)(2), as applicable. 

1.1.15 Fair Market Value of the 

Partnership: has the meaning given such 

term in Section 5.2.3(b). 

1.1.16 Fiscal Year: the calendar year 

or, in the case of the first and the last 

fiscal years, the fraction thereof 

commencing on the date on which the 

Partnership is formed under the Act or 

ending on the date on which the 

winding up of the Partnership is 

completed, as the case may be. 

1.1.17 General Partner: DGHC and 

any successor General Partner. 

1.1.18 General Partner Unit: any 

Partnership Unit having the rights and 

obligations specified in this Agreement 

with respect to a General Partner Unit. 

1.1.19 GP Board: has the meaning 

given such term in Section 4.5.2. 

1.1.20 Gross Asset Value: with 

respect to any asset, the asset’s adjusted 

basis for Federal income tax purposes, 

except as follows: 

(i) The initial Gross Asset Value of 

any asset contributed by a Partner to the 

Partnership after the date hereof shall be 

the gross fair market value of such asset 

as determined by the contributing 

Partner and the General Partner; 

(ii) The Gross Asset Value of each 

Partnership asset shall be adjusted to 

equal its gross fair market value, as 

determined by the General Partner, as of 

the following times: (a) The acquisition 

of an additional interest in the 

Partnership by any new or existing 

Partner in exchange for more than a de 

minimis Capital Contribution; (b) the 

distribution by the Partnership to a 

Partner of more than a de minimis 

amount of Partnership property as 

consideration for an interest in the 

Partnership; and (c) the liquidation of 

the Partnership within the meaning of 

Treasury Regulations Section 1.704– 

1(b)(2)(ii)(g). However, the adjustments 

which are described in clauses (a) and 

(b) above shall be made only if the 

General Partner reasonably determines 

that such adjustments are necessary or 

appropriate to reflect the relative 

economic interests of the Partners in the 

Partnership; 

(iii) The Gross Asset Value of any 

Partnership asset distributed to any 

Partner shall be adjusted to equal the 

gross fair market value of such asset on 

the date of distribution, as determined 

by the distributee Partner and the 

General Partner; and 

(iv) The Gross Asset Value of each 

Partnership asset shall be increased (or 

decreased) to reflect any adjustments to 

the adjusted basis of such asset pursuant 

to Code Section 734(b) or Code Section 

743(b), but only to the extent that such 

adjustments are taken into account in 

determining Capital Accounts pursuant 

to Treasury Regulations Section 1.704– 

1(b)(2)(iv)(m) and Section 5.3.8. 

However, Gross Asset Value shall not be 

adjusted pursuant to this clause (iv) to 

the extent that an adjustment pursuant 

to clause (ii) is necessary or appropriate 

in connection with a transaction that 

would otherwise result in an adjustment 

pursuant to this clause (iv). 

If the Gross Asset Value of an asset 

has been determined or adjusted 

pursuant to clauses (i), (ii) or (iv) of this 

definition, such Gross Asset Value shall 

thereafter be adjusted by the 

Depreciation taken into account with 

respect to such asset for purposes of 

computing Net Profit and Net Loss. 

1.1.21 Indemnified Person: has the 

meaning given such term in Section 4.7. 

1.1.22 JOA: has the meaning given 

such term in the Recitals to this 

Agreement, as such agreement may be 

amended from time to time. 

1.1.23 Joint Venture: Charleston 

Newspapers, an unincorporated West 

Virginia joint venture. 

1.1.24 Limited Partner: any Class A 

Limited Partner or Class B Limited 

Partner. 

1.1.25 Limited Partner Unit: any 

Class A Limited Partner Unit or Class B 

Limited Partner Unit. 

1.1.26 Mail: The Charleston Daily 

Mail. 

1.1.27 MNG: has the meaning given 

such term in the Recitals to this 

Agreement, and includes any successor 

or assign. 

1.1.28 Net Cumulative Profit: with 

respect to a Partner, an amount equal to 

the excess, if any, of (i) the aggregate Net 

Profits and items of income and gain 

allocated to such Partner pursuant to 

Article V for all Fiscal Years (or other 

periods) after the date hereof, over (ii) 

the aggregate Net Loss and items of loss 

and deduction allocated to such Partner 

pursuant to Article V for all Fiscal Years 

(or other periods) after the date hereof. 

1.1.29 Net Profit and Net Loss: with 

respect to each Fiscal Year or other 

period, an amount which is equal to the 

Partnership’s taxable income or loss for 

such year or period, as determined in 


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accordance with Code Section 703(a) 

(for this purpose, all items of income, 

gain, loss or deduction that are required 

to be stated separately pursuant to Code 

Section 703(a)(1) shall be included in 

taxable income or loss), with the 

following adjustments: 

(i) Any income of the Partnership that 

is exempt from Federal income tax and 

not otherwise taken into account in 

computing Net Profit or Net Loss shall 

be added to such taxable income or loss; 

(ii) Any expenditures of the 

Partnership described in Code Section 

705(a)(2)(B), or treated as Code Section 

705(a)(2)(B) expenditures pursuant to 

Treasury Regulations Section 1.704– 

1(b)(2)(iv)(i), and which are not 

otherwise taken into account in 

computing Net Profit or Net Loss, shall 

be subtracted from such taxable income 

or loss; 

(iii) In the event the Gross Asset Value 

of any Partnership asset is adjusted 

pursuant to clause (ii) or (iii) of the 

definition of Gross Asset Value, the 

amount of such adjustment shall be 

taken into account as gain or loss from 

the disposition of such asset for 

purposes of computing Net Profit or Net 

Loss; 

(iv) Gain or loss resulting from any 

disposition of Partnership property with 

respect to which gain or loss is 

recognized for Federal income tax 

purposes shall be computed by 

reference to the Gross Asset Value of the 

property disposed of, notwithstanding 

that the adjusted tax basis of such 

property differs from its Gross Asset 

Value; 

(v) In lieu of the depreciation, 

amortization and other cost recovery 

deductions that are taken into account 

in computing such taxable income or 

loss, there shall be taken into account 

Depreciation for such Fiscal Year or 

other period; 

(vi) Notwithstanding anything to the 

contrary that may be contained in the 

definition of the terms ‘‘Net Profit’’ and 

‘‘Net Loss,’’ any items that are specially 

allocated pursuant to Section 5.3 or 5.4 

hereof shall be excluded in computing 

Net Profit or Net Loss; and 

(vii) For purposes of this Agreement, 

any deduction for a loss on a sale or 

exchange of Partnership property which 

is disallowed to the Partnership under 

Code Section 267(a)(1) or 707(b) shall be 

treated as a Code Section 705(a)(2)(B) 

expenditure. 

The amounts of the items of 

Partnership income, gain, loss, or 

deduction available to be specially 

allocated pursuant to Section 5.3 or 5.4 

shall be determined by applying rules 

analogous to those set forth in this 

definition of Net Profit and Net Loss. 

1.1.30 Newspapers: The Charleston 

Gazette, The Saturday Gazette-Mail, 

The Sunday Gazette-Mail and the Mail 

collectively, and a ‘‘Newspaper’’ means 

any one of the Newspapers. 

1.1.31 Nonrecourse Deductions: 

losses, deductions or Code Section 

705(a)(2)(B) expenditures that are 

attributable to Nonrecourse Liabilities of 

the Partnership. The amount of 

Nonrecourse Deductions for a Fiscal 

Year shall be determined in accordance 

with Treasury Regulations Section 

1.704–2(c). 

1.1.32 Nonrecourse Liability: has the 

meaning set forth in Treasury 

Regulations Sections 1.704–2(b)(3) and 

1.752–1(a)(2). 

1.1.33 Partner: any of the General 

Partner and the Limited Partners 

individually, and ‘‘Partners’’ means each 

of the General Partner and the Limited 

Partners collectively. 

1.1.34 Partner Nonrecourse Debt: 

has the meaning set forth in Treasury 

Regulations Section 1.704–2(b)(4). 

1.1.35 Partner Nonrecourse Debt 

Minimum Gain: has the meaning set 

forth in Treasury Regulations Section 

1.704–2(i)(2). The amount of Partner 

Nonrecourse Debt Minimum Gain shall 

be determined in accordance with 

Treasury Regulations Section 1.704– 

2(i)(3). 

1.1.36 Partner Nonrecourse 

Deductions: losses, deductions or Code 

Section 705(a)(2)(B) expenditures that 

are attributable to Partner Nonrecourse 

Debt. The amount of Partner 

Nonrecourse Deductions for a Fiscal 

Year shall be determined in accordance 

with Treasury Regulations Section 

1.704–2(i)(2). 

1.1.37 Partner Ratio Percentage: 

with respect to any Class B Limited 

Partner, the percentage obtained by 

dividing the Percentage Interest of such 

Class B Limited Partner by the General 

Partner’s Percentage Interest. 

1.1.38 Partnership: Charleston 

Newspapers Holdings, L.P., a Delaware 

limited partnership. 

1.1.39 Partnership Interest: means 

the entire ownership interest of a 

Partner in the Partnership at any 

particular time, including all of its 

rights and obligations hereunder and 

under the Act. 

1.1.40 Partnership Minimum Gain: 

has the meaning set forth in Treasury 

Regulations Section 1.704–2(b)(2). The 

amount of Partnership Minimum Gain 

for a Fiscal Year shall be determined in 

accordance with Treasury Regulations 

Section 1.704–2(d). 

1.1.41 Percentage Interest: with 

respect to any Class B Limited Partner 

and the General Partner, means the ratio 

of the number of Units held by such 

Partner divided by the total number of 

Class B Limited Partner Units and 

General Partner Units outstanding. 

1.1.42 Person: means any 

individual, partnership, joint venture, 

association, corporation, trust, estate, 

limited liability company, limited 

liability partnership or any other legal 

entity. 

1.1.43 Put/Call Agreement: a put/ 

call agreement entered into by a Class B 

Limited Partner, DGHC and the 

Partnership in connection with the 

exercise by the Warrant Holder of its 

right to purchase Class B Limited 

Partner Units pursuant to the terms of 

the Warrant, in substantially the form 

attached to the Warrant as Exhibit B 

thereto. 

1.1.44 Regulatory Allocations: has 

the meaning given such term in Section 

5.4. 

1.1.45 Subsidiary: means any Person 

(including the Joint Venture) that is 

controlled by the Partnership. 

1.1.46 Tax-Adjusted Percentage 

Interests: with respect to any Class B 

Limited Partner, the percentage 

determined by dividing (i) such Class B 

Limited Partner’s Percentage Interest by 

(ii) one (1) minus the Tax Rate; and with 

respect to the General Partner, the 

percentage determined as one (1) minus 

the Tax-Adjusted Percentage Interest of 

such Class B Limited Partner. By way of 

illustration, if such Class B Limited 

Partner’s Percentage Interest is 6.42% 

and the Tax Rate is 40%, such Class B 

Limited Partner’s Tax Adjusted 

Percentage Interest shall be 10.70% and 

the General Partner’s Tax-Adjusted 

Percentage Interest shall be 89.30%. 

1.1.47 Tax Distributions: 

distributions made pursuant to Section 

5.1.2. 

1.1.48 Tax Gross-Up Amount: has 

the meaning given such term in Section 

5.2.3(a)(ii)(4). 

1.1.49 Tax Rate: the highest effective 

combined rate of federal, state and local 

income and franchise tax applicable to 

corporations doing business in 

Charleston, West Virginia. 

1.1.50 Tax Shortfall: has the 

meaning given such term in Section 

5.1.2(b). 

1.1.51 Transfer: has the meaning 

given to such term in Section 6.1.1. 

1.1.52 Transferee: any Person that 

acquires a Partnership Interest from a 

Partner in accordance with the 

provisions of this Agreement. 

1.1.53 Treasury Regulations: the 

Income Tax Regulations that have been 

promulgated under the Code, as such 

regulations may be amended from time 

to time. 

1.1.54 Unit: an undivided share of 

the interests in the Partnership of all the 


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Partners, which include General Partner 

Units, Class A Limited Partner Units, 

and Class B Limited Partner Units, as set 

forth on Exhibit A attached hereto, as 

amended from time to time. 

1.1.55 Value of the Partnership’s 

Business: has the meaning given such 

term in Section 5.2.3. 

1.1.56 Warrant: that certain warrant, 

dated as of even date herewith, granted 

to the Warrant Holder by the 

Partnership to purchase Class B Limited 

Partner Units. 

1.1.57 Warrant Holder: CPC or any 

permitted transferee of the Warrant. 

Article II 

Formation of the Partnership 

2.1 Formation. The Partnership was 

formed as a Delaware limited 

partnership pursuant to the terms of the 

Act and the Prior Partnership 

Agreement. The rights and liabilities of 

the Partners shall be determined 

pursuant to the Act and this Agreement. 

To the extent the rights or obligations of 

any Partner are different by reason of 

any provision of this Agreement than 

they would be in the absence of such 

provision, this Agreement shall, to the 

extent permitted by the Act, control. 

2.2 Partners. As of the date hereof, 

DGHC is the sole General Partner of the 

Partnership, CPC is the sole Class A 

Limited Partner of the Partnership and 

there is no Class B Limited Partner. 

2.3 Name. The name of the 

Partnership is ‘‘Charleston Newspapers 

Holdings, L.P.’’ The business of the 

Partnership may be conducted under 

that name or, upon compliance with 

applicable laws, any other name that the 

General Partner deems appropriate or 

advisable. 

2.4 Purpose. The purposes of the 

Partnership shall be (i) to own, directly 

and indirectly, all the interests in the 

Joint Venture, (ii) to engage in the 

business, directly and indirectly, of 

owning, operating and managing 

newspaper properties, including 

managing the business and affairs of the 

Joint Venture in accordance with the 

JOA, (iii) to borrow or raise money, to 

guarantee the obligations of others, and 

to secure the payment thereof by 

mortgage upon or pledge of the whole 

or any part of the property of the 

Partnership, (iv) to exercise all rights, 

powers, privileges and other incidents 

of ownership or possession with respect 

to securities or other assets held or 

owned by the Partnership, and (v) 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 as 

determined by the General Partner in its 

sole discretion, including without 

limitation, entering into the JOA, the 

Warrant and a Put/Call Agreement and 

performing thereunder. 

2.5 Place of Business. The principal 

place of business of the Partnership is 

c/o Daily Gazette Company, 1001 

Virginia Street, East, Charleston, West 

Virginia 25301, subject to change by the 

General Partner upon notice to all 

Partners. 

2.6 Agent for Service of Process. The 

agent of the Partnership for service of 

process in Delaware is the Corporation 

Service Company, 2711 Centerville 

Road, Suite 400, Wilmington, Delaware 

19808, subject to replacement from time 

to time by direction of the General 

Partner. 

2.7 Term. The term of the 

Partnership commenced on the date the 

Certificate of Limited Partnership was 

filed with the Secretary of State of the 

State of Delaware, and shall continue 

until June 30, 2024, unless sooner 

terminated as provided in this 

Agreement. 

2.8 Tax Matters. The parties 

acknowledge that for income tax 

purposes, the Partnership shall be 

treated as the continuation of the Joint 

Venture following the deemed merger of 

the Joint Venture and the Partnership. 

Article III 

Capital of the Partnership 

3.1 Transfers to Partnership. DGHC 

and CPC each made the transfers to the 

Partnership specified on Exhibit A and 

received the Units specified in Exhibit 

A. 

3.2 Future Capital Contributions; 

Capital Assets. 

3.2.1 The Limited Partners shall 

have no obligation to make any further 

contributions to the capital of the 

Partnership, subject to CPC’s obligation 

to reimburse the Joint Venture for any 

expenses paid by the Joint Venture on 

behalf of CPC in accordance with the 

provisions of the JOA. 

3.2.2 DGHC shall in the future make 

such additional contributions to the 

capital of the Partnership as shall be 

necessary in its reasonable judgment to 

(1) fund acquisitions of capital assets 

necessary for the business and 

operations of the Partnership and/or the 

Joint Venture; (2) fund acquisitions of 

capital assets necessary for the business 

and operations of the editorial 

departments of each of the Newspapers 

to the extent such editorial departments’ 

tangible capital assets on the date hereof 

require supplementation or 

replacement, (3) provide the Partnership 

and the Joint Venture with adequate 

working capital, and (4) ensure that the 

Partnership has adequate funds to make 

on a timely basis the cash distributions 

to CPC contemplated by Section V J (1) 

through (3) of the JOA, provided this is 

not intended to impose any greater 

obligation on the General Partner than is 

imposed on general partners generally 

under applicable law. The General 

Partner shall not have any personal 

liability for the repayment of the Capital 

Contributions of any other Partner; 

provided that the General Partner shall 

promptly return to the Partnership or to 

the Partner or Partners entitled thereto 

any distributions received by the 

General Partner in excess of those to 

which the General Partner is entitled 

under this Agreement. 

3.3 Interest on Capital 

Contributions. No interest shall be paid 

by the Partnership on Capital 

Contributions. 

3.4 Liability Limited to Capital. 

Except as otherwise provided under 

applicable law, the liability of a Limited 

Partner shall be limited to the total 

amount of Capital Contributions which 

such Limited Partner has made or is 

required to make pursuant to Section 

3.1 hereof, and the Limited Partners 

shall have no further personal liability 

to contribute money to or in respect of 

the liabilities or obligations of the 

Partnership, nor shall the Limited 

Partners, as such, be personally liable 

for any obligation of the Partnership. A 

Limited Partner may, under certain 

circumstances, be required by law to 

return to the Partnership, for the benefit 

of the Partnership’s creditors, amounts 

previously distributed. No Limited 

Partner shall be obligated by this 

Agreement to pay those distributions to 

or for the account of the Partnership or 

any creditor of the Partnership. 

However, if any court of competent 

jurisdiction holds that, notwithstanding 

the provisions of this Agreement, a 

Limited Partner must return or pay over 

any part of those distributions, the 

obligation shall be that of such Limited 

Partner alone and not of any other 

Partner. Any payment returned to the 

Partnership by a Partner or made 

directly by a Partner to a creditor of the 

Partnership shall be deemed a Capital 

Contribution by such Partner. 

3.5 Withdrawal of Capital. A Partner 

shall not be entitled to withdraw any 

part of its Capital Contribution or to 

receive any distribution from the 

Partnership, except as provided in this 

Agreement or the JOA. 


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Article IV 

Management of the Partnership 

4.1 General Partner. DGHC shall 

serve as the General Partner of the 

Partnership. 

4.2 Partnership Powers. In 

furtherance of its purposes, the 

Partnership is hereby authorized to 

enter into any kind of lawful activity 

and to enter into, perform and carry out 

contracts of any kind in connection with 

the purposes of the Partnership. 

4.3 Authority, Responsibilities and 

Powers of General Partner. Subject to 

Section 4.5.2 hereof, the General Partner 

shall have complete authority over and 

exclusive control and management of 

the business and affairs of the 

Partnership and all of the rights, powers 

and privileges of partners of a general 

partnership and of general partners of a 

limited partnership under the laws of 

the State of Delaware. The General 

Partner shall devote such time to the 

Partnership as it may reasonably deem 

to be required for the achievement of its 

purposes. In connection with such 

management, the General Partner (i) 

may delegate such general or specific 

authority to the officers and employees 

of the Partnership and its Affiliates with 

respect to the business and day-to-day 

operations of the Partnership and its 

Affiliates as it may from time to time 

consider desirable, and the officers and 

employees of the Partnership may 

exercise the authority granted to them, 

and (ii) may employ on behalf of the 

Partnership any other Persons to 

perform services for the Partnership, 

including Affiliates of any Partner. 

4.4 No Management Participation by 

any Limited Partner. Subject to Section 

4.5.2, no Limited Partner shall take part 

in, or at any time interfere in any 

manner with, the management, conduct 

or control of the business and 

operations of the Partnership, nor have 

any right or authority as such to act for 

or bind the Partnership in any manner 

whatsoever. No Partner shall have the 

power, right or authority to remove 

DGHC as the General Partner. 

4.5 Scope of Authority of the 

General Partner. 

4.5.1 Subject to Section 4.5.2 and 

4.5.3 hereof, all decisions to be made on 

behalf of the Partnership shall be made 

by the General Partner and all actions to 

be taken or documents to be executed 

on behalf of the Partnership shall be 

taken and executed by the General 

Partner. 

4.5.2 While the general authority to 

manage the day-to-day business and 

affairs of the General Partner shall be 

vested in its members, the management 

of the General Partner shall be delegated 

to a board of managers of the General 

Partner (the ‘‘GP Board’’) consisting of 

up to five individual managers 

appointed by Daily Gazette Company 

and in no event may the GP Board 

consist of more than five managers 

without the consent of the managers 

appointed pursuant to Section 5(b) of 

the Operating Agreement of DGHC by 

the Warrant Holder or the Class B 

Limited Partner(s), as applicable; 

provided, however, that in no event may 

the GP Board consist of more than five 

managers unless not fewer than forty 

percent (40%) are appointed by the 

Warrant Holder or the Class B Limited 

Partner(s), as applicable. Unless and 

until the Warrant Holder exercises its 

rights under the Warrant to purchase 

any Class B Limited Partner Units, Daily 

Gazette Company shall delegate its right 

to appoint two (2) of the members of the 

GP Board (or such greater number as 

required by Section 5(b)(ii) of the 

Operating Agreement of DGHC) to the 

Warrant Holder, and upon the purchase 

by the Warrant Holder of any Class B 

Limited Partner Units pursuant to the 

Warrant, Daily Gazette Company shall 

delegate its right to appoint two (2) of 

the members of the GP Board (or such 

greater number as required by Section 

5(b)(ii) of the Operating Agreement of 

DGHC) to the Class B Limited Partner(s). 

If there is more than one Class B 

Limited Partner, then the right to 

appoint two (2) of the members of the 

GP Board (or such greater number as 

required by Section 5(b)(ii) of the 

Operating Agreement of DGHC) will be 

vested solely in the Class B Limited 

Partner that supervises editorial and 

reportorial functions of the Mail 

pursuant to Section 9.1 hereof. Neither 

the Warrant Holder nor the Class B 

Limited Partner(s) may appoint current 

employees of the Joint Venture, Daily 

Gazette Company, DGHC, the 

Partnership or Daily Gazette Publishing 

Company, LLC to represent it on the GP 

Board. The GP Board shall only have the 

power and authority to act by the vote 

of the constituent managers and no 

individual manager, in the capacity of 

manager, shall have the power or 

authority to bind the General Partner. 

Voting by the managers shall be on a per 

capita basis. Actions may be taken by 

the GP Board by, but only by, a majority 

vote of the managers; provided, 

however, that actions by the GP Board 

concerning (x) the budgeted Editorial 

Expenses (as that term is defined in the 

JOA) for The Charleston Gazette and the 

Mail or (y) ‘‘news hole’’ and color usage 

allocations for The Charleston Gazette 

and the Mail shall require the prior 

approval of at least 75% of the managers 

of the GP Board (i.e., if the GP Board 

consists of four managers, not fewer 

than three managers must vote in favor 

of the particular action, and if the GP 

Board consists of five managers, not 

fewer than four managers must vote in 

favor of the particular action). Either 

Daily Gazette Company or, as 

applicable, the Warrant Holder or the 

Class B Limited Partner(s) may at any 

time, by written notice to the other, 

remove its managers, with or without 

cause, and substitute managers to serve 

in their stead. No manager shall be 

removed from office, with or without 

cause, without the consent of the Person 

that designated him. Each member of 

the GP Board appointed by the Warrant 

Holder or the Class B Limited Partner(s) 

may act (or refrain from acting), and the 

Warrant Holder or the Class B Limited 

Partner(s) may instruct such members of 

the GP Board, in their capacity as such, 

to act (or refrain from acting) solely 

according to the interests (or the 

perceived interests) of the Warrant 

Holder or the Class B Limited Partner(s) 

and none of the foregoing shall be 

deemed to breach any fiduciary duty 

that, pursuant to this Agreement or at 

law or in equity, the Warrant Holder or 

the Class B Limited Partner(s) otherwise 

would be deemed to have to the 

Partnership, the General Partner or 

Daily Gazette Company. The GP Board 

shall hold such meetings no less 

frequently than once per calendar 

quarter and at such times and places as 

shall be determined by the members of 

the GP Board. Special meetings of the 

GP Board may be called at any time by 

agreement of the members of the GP 

Board. The GP Board may establish such 

procedures for the conduct of meetings 

as may be agreed by the members of the 

GP Board. 

4.5.3 Without the written consent of 

the Limited Partners, or except as 

specifically authorized in this 

Agreement, the General Partner may 

not: 

(a) Do any act in contravention of this 

Agreement, the JOA or the Certificate of 

Limited Partnership. 

(b) Do any act that would make it 

impossible to carry on the ordinary 

business of the Partnership. 

(c) Change the purposes of the 

Partnership as set forth in Section 2.4 

hereof. 

(d) Dissolve the Partnership. 

(e) Make any disposition of assets 

contributed by CPC to the Partnership 

on the date of the Prior Partnership 

Agreement that would impair the ability 

of the Partnership to make the 

terminating distributions to CPC that are 

contemplated by Section 7.3 hereof 

(provided no consent of the Limited 


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Partners will be required for any 

disposition of such assets pursuant to 

any foreclosure action of the Joint 

Venture’s lenders). 

4.6 Liability. If any provision herein 

shall, under applicable law, subject any 

Limited Partner to liability as a general 

partner of the Partnership, such 

provision shall be deemed suspended 

and of no force and effect until such 

time as the effectiveness of such 

provision does not subject such Limited 

Partner to such liability. 

4.7 Indemnification. The 

Partnership shall indemnify the General 

Partner and its Affiliates and the 

employees, officers, directors, each 

member of the GP Board, shareholders, 

partners, members and agents of such 

Persons (each an ‘‘Indemnified Person’’) 

and shall defend and hold the 

Indemnified Persons harmless from any 

claim, demand, judgment, cost or 

expense (including attorneys’ fees, 

which shall be paid as incurred) arising 

out of or related to any act or omission 

by such Indemnified Persons on behalf 

of the Partnership, except for any act or 

omission which is finally adjudicated to 

have constituted willful misconduct on 

the part of such Indemnified Person. In 

no event shall any Indemnified Person 

be liable to the Partnership or to any 

other Partner, except for conduct which 

is finally adjudicated to have 

constituted willful misconduct on the 

part of such Indemnified Person. Any 

Person who is within the definition of 

‘‘Indemnified Person’’ at the time of any 

act or omission shall be entitled to the 

benefits of this Section 4.7 as an 

‘‘Indemnified Person’’ regardless of 

whether such Person continues to be 

within the definition of ‘‘Indemnified 

Person’’ at the time of his or its claim 

for indemnification or exculpation 

hereunder. 

4.8 Partnership Expenses. The 

Partnership shall pay for all necessary 

and reasonable direct expenses of the 

Partnership. 

4.9 Other Ventures. Subject to the 

terms of the JOA, neither Daily Gazette 

Company, nor any Partner, may engage 

in other ventures in the Charleston, 

West Virginia market that are 

competitive with that of the Partnership 

or any of its Subsidiaries. For purposes 

of this Section 4.9, any competitive 

venture undertaken by an Affiliate of a 

Partner in the Charleston, West Virginia 

market will be deemed to be a 

competitive venture undertaken by such 

Partner and a breach of this Agreement 

by such Partner. 

Article V 

Distributions and Allocations 

5.1 Distributions. 

5.1.1 Distributions to Class A 

Limited Partner. With respect to each 

Fiscal Year that the Class A Limited 

Partner produces editorial and news 

copy for the Mail, the General Partner 

shall cause the Partnership to distribute 

cash to the Class A Limited Partner in 

an amount equal to the cash received by 

the Partnership with respect to its 

interest in the Joint Venture, pursuant to 

and subject to the terms of paragraphs 

(1), (2) and (3) of Section V J of the JOA. 

Such cash shall be distributed by the 

Partnership to the Class A Limited 

Partner as soon as reasonably 

practicable following its receipt by the 

Partnership. 

5.1.2 Tax Distributions. 

(a) During each Fiscal Year, the 

General Partner shall cause the 

Partnership to distribute cash to the 

Class B Limited Partner(s) and to the 

General Partner in an amount equal to 

the excess, if any, of (i) the product of 

(1) the Net Cumulative Profit allocated 

to such Partner and (2) the Tax Rate 

with respect to such Fiscal Year, over 

(ii) the aggregate distributions to such 

Partner after the date hereof pursuant to 

Section 5.1.4 and this Section 5.1.2 

(such excess being such Partner’s ‘‘Tax 

Shortfall’’). For purposes of this Section 

5.1.2(a), distributions made within 120 

days of the end of any Fiscal Year may 

be designated by the General Partner as 

Tax Distributions with respect to such 

Fiscal Year and shall be treated for 

purposes of this Section 5.1.2(a) as 

having been made during such Fiscal 

Year. 

(b) If the aggregate amount to be 

distributed by the Partnership pursuant 

to Section 5.1.2(a) is less than the 

aggregate amount of the Tax Shortfall 

for all Partners, then the amount to be 

distributed will be distributed among 

the Partners pro rata in accordance with 

the amounts of their respective Tax 

Shortfalls. 

5.1.3 Distributions to General 

Partner. With respect to a Fiscal Year, 

after the distributions required by 

Sections 5.1.1 and 5.1.2, the General 

Partner shall cause the Partnership to 

distribute cash in an amount not to 

exceed $650,000 to the General Partner. 

The distributions provided in this 

Section 5.1.3 shall be made only to the 

extent such distributions are not 

prohibited by the Partnership’s credit 

agreements or other agreements to 

which the Partnership is a party. 

5.1.4 Other Cash Distributions. 

During a Fiscal Year, after the 

distributions required by Sections 5.1.1, 

5.1.2 and 5.1.3, the General Partner may 

cause the Partnership to distribute 

additional cash at such times and in 

such amounts as the General Partner 

may determine to be appropriate in its 

sole discretion, in the following order 

and priority: 

(a) If the product of the Partner Ratio 

Percentage of any Class B Limited 

Partner and the sum of all distributions 

to the General Partner pursuant to 

Section 5.1.2 is greater than the sum of 

all distributions to such Class B Limited 

Partner pursuant to Section 5.1.2, cash 

shall be distributed to such Class B 

Limited Partner in the amount of such 

excess; 

(b) If the sum of all distributions to 

any Class B Limited Partner pursuant to 

Section 5.1.2 is greater than the product 

of Partner Ratio Percentage of such Class 

B Limited Partner and the sum of all 

distributions to the General Partner 

pursuant to Section 5.1.2, cash shall be 

distributed to the General Partner in the 

amount of such excess; 

(c) Thereafter, cash shall be 

distributed to the Class B Limited 

Partner(s) and the General Partner pro 

rata in accordance with their Capital 

Account balances until such Capital 

Account balances are zero; and 

(d) Any additional cash shall be 

distributed to the Class B Limited 

Partner(s) and the General Partner in 

accordance with their Percentage 

Interests. 

5.1.5 Withholding. Any amount that 

has been withheld pursuant to the Code 

or any provision of any state or local tax 

law with respect to any payment or 

distribution to the Partnership or the 

Partners shall be treated as an amount 

which was distributed to a Partner 

pursuant to Section 5.1 hereof for all 

purposes of this Agreement. 

5.2 Allocations of Net Profit and Net 

Loss. 

5.2.1 Net Profit. Except as otherwise 

provided in this Agreement, Net Profit 

of the Partnership for each Fiscal Year 

shall be allocated as follows: 

(a) first, Net Profit shall be allocated 

so as to offset any Net Loss allocated to 

the General Partner pursuant to Section 

5.2.2(c); 

(b) second, Net Profit shall be 

allocated to the Class B Limited 

Partner(s) and to the General Partner so 

as to offset any Net Loss allocated to 

them pursuant to Section 5.2.2(b), pro 

rata in proportion to the amount of Net 

Loss to be offset; and 

(c) thereafter, Net Profit shall be 

allocated to the Class B Limited 

Partner(s) and the General Partner in 

accordance with their Tax-Adjusted 

Percentage Interests. 


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5.2.2 Net Loss. Except as otherwise 

provided in this Agreement, Net Loss of 

the Partnership for each Fiscal Year 

shall be allocated as follows: 

(a) first, Net Loss shall be allocated to 

the Class B Limited Partner(s) and to the 

General Partner so as to offset any Net 

Profit allocated to them pursuant to 

Section 5.2.1(c) (to the extent not 

distributed pursuant to Section 5.1), pro 

rata in proportion to the amount of Net 

Profit to be offset. 

(b) second, Net Loss shall be allocated 

to the Class B Limited Partner(s) and the 

General Partner in accordance with their 

Percentage Interests until the Class B 

Limited Partner’s or Partners’ Adjusted 

Capital Account balance is zero; and 

(c) thereafter, all remaining Net Loss 

shall be allocated to the General Partner. 

5.2.3 Allocations of Net Profit and 

Net Loss Following Dissolution. 

(a) Notwithstanding Sections 5.2.1 

and 5.2.2, following the dissolution of 

the Partnership pursuant to Article VII, 

beginning in the Fiscal Year in which 

such dissolution occurs or beginning in 

any Fiscal Year prior to the Fiscal Year 

in which such dissolution occurs if the 

Partnership’s Federal income tax return 

for such prior Fiscal Year has not yet 

been required to be filed (not including 

extensions), items of income, gain, loss 

and deduction described in clause (iii) 

of Section 1.1.29 that are attributable to 

the adjustment to the Gross Asset Value 

of assets distributed in kind to the Class 

A Limited Partner pursuant to Section 

7.3.2 (if any) shall be allocated to the 

Class A Limited Partner, and thereafter, 

all remaining items of income, gain, loss 

and deduction shall be allocated among 

the Partners so as to cause the credit 

balance in each Partner’s Capital 

Account to equal the amount of 

distributions such Partner would be 

entitled to receive if the Partnership 

were to distribute an amount equal to 

the aggregate credit balances in all 

Partners’ Capital Accounts (after such 

allocations of income and gain, loss and 

deduction) in accordance with the 

following: 

(i) First, the Partnership would 

distribute to the Class A Limited Partner 

cash in an amount equal to the aggregate 

cash distributed to the Partnership 

pursuant to clause (2)(a) of Section VI B 

of the JOA; 

(ii) Second, the Partnership would 

distribute to each Class B Limited 

Partner cash in an amount equal to the 

following: 

(1) the product of such Class B 

Limited Partner’s Percentage Interest 

and the Fair Market Value of the 

Partnership; plus 

(2) the excess (only if such amount is 

greater than zero) of (A) the product of 

such Class B Limited Partner’s Partner 

Ratio Percentage and the sum of all 

distributions to the General Partner 

pursuant to Section 5.1.2 over (B) the 

sum of all distributions to such Class B 

Limited Partner pursuant to Section 

5.1.2; less 

(3) the excess (only if such amount is 

greater than zero) of (A) the sum of all 

distributions to such Class B Limited 

Partner pursuant to Section 5.1.2 over 

(B) the product of such Class B Limited 

Partner’s Partner Ratio Percentage and 

the sum of all distributions to the 

General Partner pursuant to Section 

5.1.2; plus 

(4) an amount equal to the excess, if 

any, of (A) the quotient obtained by 

dividing Net Cumulative Profits 

allocated to such Class B Limited 

Partner by one (1) minus the Tax Rate 

then in effect, over (B) Net Cumulative 

Profits allocated to such Class B Limited 

Partner (such amount being the ‘‘Tax 

Gross-Up Amount’’). 

(iii) Thereafter, the Partnership would 

distribute all remaining cash and other 

assets of the Partnership to the General 

Partner. 

(b) For purposes of this Section 5.2.3, 

the ‘‘Fair Market Value of the 

Partnership’’ shall equal: 

(i) the Value of the Partnership’s 

Business, plus 

(ii) any current assets of the 

Partnership, calculated as of the date of 

dissolution, as defined and determined 

in accordance with generally accepted 

accounting principles, less 

(iii) the sum of $2,448,300 (which the 

parties agree shall represent the amount 

of the unfunded accrued benefit 

obligation for the Charleston 

Newspapers Retirement Benefit Plan as 

of the date of dissolution), and $506,731 

(which the parties agree shall represent 

the amount of the unfunded accrued 

benefit obligation for the Charleston 

Newspapers Post Retirement Medical 

Benefit Program as of the date of 

dissolution), less 

(iv) any debts and liabilities of the 

Partnership and reserves for unmatured, 

contingent or unforeseen liabilities of 

the Partnership (other than unfunded 

obligations under the Charleston 

Newspapers Retirement Benefit Plan 

and Post-Retirement Medical Benefit 

Program), calculated as of the date of 

dissolution, as defined and determined 

in accordance with Section 7.3 and 

generally accepted accounting 

principles, less 

(v) the costs of an investment banking 

firm or appraisal firm or firms selected 

to determined the Fair Market Value of 

the Partnership, less 

(vi) the amount determined in 

Sections 5.2.3(a)(ii)(2) and 5.2.3(a)(ii)(3), 

if any. The ‘‘Value of the Partnership’s 

Business’’ shall be the going concern 

value of the Partnership as of the date 

of dissolution as determined by mutual 

agreement of the General Partner and 

the Class B Limited Partner(s) or by 

appraisals in accordance with this 

Section 5.2.3. In determining the Value 

of the Partnership’s Business, the 

General Partner and the Class B Limited 

Partner(s), or the appraisers selected to 

determine the Fair Market Value of the 

Partnership, as the case may be, (1) shall 

assume that the value of any business is 

the cash price at which the assets of 

such business as a going concern would 

change hands between a willing buyer 

and a willing seller (neither acting 

under compulsion) in an arms-length 

transaction, on terms and subject to 

conditions and costs applicable in the 

newspaper publishing industry, (2) shall 

assume that all assets used in the 

operation of the business of the 

Partnership and its Subsidiaries, 

whether owned by or licensed to the 

Partnership or any of its Subsidiaries 

(and all other assets of any Affiliate of 

the Partnership that are used by the 

Partnership or any of its Subsidiaries), 

were entirely owned directly by the 

Partnership, (3) shall not take into 

account expenditures in respect of any 

management agreements entered into by 

the Joint Venture. In the event the 

General Partner and the Class B Limited 

Partner(s) do not agree on the Fair 

Market Value of the Partnership within 

twenty days, then within fifteen days of 

the expiration of such twenty day 

period (or such longer period as the 

General Partner and the Class B Limited 

Partner(s) mutually agree), each of the 

General Partner and the Class B Limited 

Partner(s) shall select a nationally 

recognized appraiser with experience in 

the newspaper industry to prepare, 

using the methodology described in this 

paragraph, a written appraisal setting 

forth such appraiser’s determination of 

the Fair Market Value of the 

Partnership. If either the General Partner 

and the Class B Limited Partner(s) fail 

to so appoint an appraiser within such 

fifteen day period, then its right to do 

so shall lapse and the appraisal made by 

the one appraiser who is timely 

appointed shall be the Fair Market 

Value of the Partnership. If two 

appraisals are made, unless the higher 

of the two appraisals is more than 110% 

more than the lower appraisal, the Fair 

Market Value of the Partnership will be 

the average of the two appraisals, and if 

the higher of the two appraisals is more 

than 110% more than the lower of the 

appraisals, the General Partner and the 

Class B Limited Partner(s) shall jointly 


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select a third appraiser, and the Fair 

Market Value will be the average of the 

two of the three appraisals that are 

closest together in amount. All 

appraisals will be made within twenty 

days of appointment of such appraiser 

and must separately identify the amount 

of each of the items described in clauses 

(i) through (vi) of Section 5.2.3(b). A 

written notice of the results of each such 

appraisal shall be given to the General 

Partner and the Class B Limited 

Partner(s). The General Partner and the 

Class B Limited Partner(s) will each pay 

the fees of the appraiser selected by it, 

and the General Partner and the Class B 

Limited Partner(s) will share equally the 

fees of the third appraiser, if any. The 

General Partner and each Member will 

cooperate fully with each appraiser’s 

attempt to determine the Fair Market 

Value of the Partnership. 

5.3 Special Allocations. 

5.3.1 Limited Partners. 

(a) The Partnership shall specially 

allocate to the Class A Limited Partner 

(in its capacity as such) items of 

Partnership income for each Fiscal Year 

in an amount equal to the cash 

distributed to the Class A Limited 

Partner (in its capacity as such) 

pursuant to Section 5.1.1. 

Notwithstanding any other provisions of 

this Agreement, except Section 5.2.3 

and this Section 5.3.1, no other items of 

income, gain, loss or deduction shall be 

allocated to the Class A Limited Partner 

(in its capacity as such). 

(b) The Partnership shall specially 

allocate to the General Partner items of 

Partnership income and gain in the 

amount of $650,000 for each Fiscal 

Year. 

5.3.2 Minimum Gain Chargeback. 

Notwithstanding any other provision of 

this Article V to the contrary, if there is 

a net decrease in Partnership Minimum 

Gain for any Fiscal Year, each of the 

General Partner and each Class B 

Limited Partner shall be specially 

allocated items of Partnership income 

and gain for such Fiscal Year (and if 

necessary, for succeeding Fiscal Years) 

in an amount equal to such Partner’s 

share of the net decrease in Partnership 

Minimum Gain as determined in 

accordance with Treasury Regulations 

Section 1.704–2(g). Allocations 

pursuant to the previous sentence shall 

be made in proportion to the respective 

amounts required to be allocated to each 

Partner pursuant thereto. However, this 

Section 5.3.2 shall not apply to the 

extent that the circumstances which are 

described in Treasury Regulations 

Sections 1.704–2(f)(2), 1.704–2(f)(3), 

1.704–2(f)(4) or 1.704–2(0(5) exist. The 

items of Partnership income and gain 

that are to be allocated pursuant to this 

Section 5.3.2 shall be determined in 

accordance with Treasury Regulations 

Sections 1.704–2(f)(6) and 1.704–2(j)(2). 

This Section 5.3.2 is intended to comply 

with the minimum gain chargeback 

requirement of Treasury Regulations 

Section 1.704–2(f) and shall be 

interpreted consistently therewith. 

5.3.3 Partner Minimum Gain 

Chargeback. Notwithstanding any other 

provision of this Article V, except 

Section 5.3.2, to the contrary, if, during 

any Fiscal Year, there is a net decrease 

in Partner Nonrecourse Debt Minimum 

Gain attributable to a Partner 

Nonrecourse Debt, each of the General 

Partner and each Class B Limited 

Partner with a share of that Partner 

Nonrecourse Debt Minimum Gain 

attributable to such Partner Nonrecourse 

Debt (as determined in accordance with 

Treasury Regulations Section 1.704– 

2(i)(5)) as of the beginning of such Fiscal 

Year shall be specially allocated items 

of Partnership income and gain for the 

Fiscal Year (and, if necessary, for 

succeeding Fiscal Years) in an amount 

equal to such Partner’s share of the net 

decrease in the Partner Nonrecourse 

Debt Minimum Gain attributable to such 

Partner Nonrecourse Debt in accordance 

with Treasury Regulations Section 

1.704–2(i)(4). Allocations pursuant to 

the previous sentence shall be made in 

proportion to the respective amounts 

required to be allocated to each Partner 

pursuant thereto. The items of Company 

income and gain to be allocated 

pursuant to this Section 5.3.3 shall be 

determined in accordance with Treasury 

Regulations Sections 1.704–2(i)(4) and 

1.704–2(j)(2). This Section 5.3.3 is 

intended to comply with the minimum 

gain chargeback requirement in 

Treasury Regulations Section 1.704– 

2(i)(4) and shall be interpreted 

consistently therewith. 

5.3.4 Qualified Income Offset. In the 

event that any Partner unexpectedly 

receives any of the adjustments, 

allocations or distributions described in 

Treasury Regulations Section 1.704– 

1(b)(2)(ii)(d)(4), 1.704–1(b)(2)(ii)(d)(5) or 

1.704–1(b) (2)(ii)(d)(6), items of 

Partnership income and gain shall be 

specially allocated to such Partner in an 

amount and manner sufficient to 

eliminate, to the extent required by the 

Treasury Regulations, any deficit 

balance of such Partner’s Adjusted 

Capital Account as quickly as possible. 

However, an allocation shall be made 

pursuant to this Section 5.3.4 if, and 

only to the extent that, such Partner 

would have a deficit balance in its 

Adjusted Capital Account after all of the 

other allocations that are provided for in 

this Article V have been tentatively 

made as if this Section 5.3.4 were not a 

part of this Agreement. 

5.3.5 Gross Income Allocation. In 

the event that any Partner has a deficit 

Capital Account at the end of any Fiscal 

Year that is in excess of the sum of (i) 

the amount such Partner is obligated to 

restore to the Partnership pursuant to 

this Agreement or as otherwise 

described in Treasury Regulations 

Section 1.704–1(b)(2)(ii)(c), (ii) the 

amount such Partner is deemed to be 

obligated to restore pursuant to the 

penultimate sentence of Treasury 

Regulations Section 1.704–2(g)(1) and 

(iii) the amount such Partner is deemed 

to be obligated to restore pursuant to the 

penultimate sentence of Treasury 

Regulations Section 1.704–2(i)(5), such 

Partner shall be specially allocated 

items of Partnership income and gain in 

the amount of such excess as quickly as 

possible. However, an allocation shall 

be made pursuant to this Section 5.3.5 

if, and only to the extent that such 

Partner would have a deficit Capital 

Account in excess of such sum after all 

of the other allocations that are 

provided for in this Article V have been 

tentatively made as if Section 5.3.4 and 

this Section 5.3.5 were not a part of this 

Agreement. 

5.3.6 Nonrecourse Deductions. 

Nonrecourse Deductions for any Fiscal 

Year or other period shall be specially 

allocated to the General Partner. 

5.3.7 Partner Nonrecourse 

Deductions. Any Partner Nonrecourse 

Deductions for any Fiscal Year or other 

period shall be specially allocated to the 

Partner who bears the economic risk of 

loss with respect to the Partner 

Nonrecourse Debt to which such Partner 

Nonrecourse Deductions are attributable 

in accordance with Treasury Regulation 

Section 1.704–2(i). 

5.3.8 Section 754 Adjustment. 

(a) To the extent an adjustment to the 

adjusted tax basis of any Partnership 

asset pursuant to Code Section 734(b) or 

743(b) is required pursuant to Treasury 

Regulations Section 1.704– 

1(b)(2)(iv)(m)(4) to be taken into account 

in determining Capital Accounts as a 

result of a distribution other than in 

liquidation of a Partner’s Partnership 

Interest, the amount of such adjustment 

shall be treated as an item of gain (if the 

adjustment increases the basis of such 

asset) or loss (if the adjustment 

decreases the basis of the asset) from the 

disposition of the asset and shall be 

taken into account for purposes of 

computing Net Profit and Net Loss. 

(b) To the extent an adjustment to the 

adjusted tax basis of any Partnership 

asset pursuant to Code Section 734(b) or 

Code Section 743(b) is required, 

pursuant to Treasury Regulations 


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Section 1.704–1(b)(2)(iv)(m)(2) or 1.704– 

1(b)(2)(iv)(m)(4), to be taken into 

account in determining Capital 

Accounts as the result of a distribution 

to a Partner in complete liquidation of 

its interest, the amount of such 

adjustment to Capital Accounts shall be 

treated as an item of gain (if the 

adjustment increases the basis of the 

asset) or loss (if the adjustment 

decreases such basis) from the 

disposition of the asset and shall be 

specially allocated to the Partners as Net 

Profit or Net Loss in the event Treasury 

Regulations Section 1.704– 

1(b)(2)(iv)(m)(2) applies, or to the 

Partner to whom such distribution is 

made in the event Treasury Regulations 

Section 1.704–1(b)(2)(iv)(m)(4) applies. 

5.4 Curative Allocations. The 

allocations set forth in Sections 5.3.2, 

5.3.3, 5.3.4, 5.3.5, 5.3.6, 5.3.7 and 5.3.8 

hereof (the ‘‘Regulatory Allocations’’) are 

intended to comply with certain 

requirements of the Treasury 

Regulations. It is the intent of the 

Partners that, to the extent possible, all 

Regulatory Allocations shall be offset 

either with other Regulatory Allocations 

or with special allocations of other 

items of income, gain, loss, or deduction 

pursuant to this Section 5.4. Therefore, 

notwithstanding any other provision of 

this Article V (other than the Regulatory 

Allocations), the General Partner shall 

make such offsetting special allocations 

of income, gain, loss, or deduction in 

whatever manner it determines 

appropriate so that, after such offsetting 

allocations are made, each Partner’s 

Capital Account balance is, to the extent 

possible, equal to the Capital Account 

balance such Partner would have had if 

the Regulatory Allocations were not in 

this Agreement. In exercising its 

discretion under this Section 5.4, the 

General Partner shall take into account 

future Regulatory Allocations under 

Sections 5.3.2 and 5.3.3 that, although 

not yet made, are likely to offset other 

Regulatory Allocations previously made 

under Sections 5.3.6 and 5.3.7. 

5.5 Tax Allocations; Code Section 

704(c). 

5.5.1 Except as otherwise provided 

in this Section 5.5, each item of income, 

gain, loss and deduction of the 

Partnership recognized for income tax 

purposes shall be allocated to the 

Partners in accordance with the 

allocation of the corresponding ‘‘book’’ 

items pursuant to Sections 5.2, 5.3 and 

5.4. 

5.5.2 In accordance with Code 

Section 704(c) and the Treasury 

Regulations thereunder, income, gain, 

loss and deduction with respect to any 

property contributed to the capital of 

the Partnership shall, solely for tax 

purposes, be allocated among the 

Partners so as to take account of any 

variation between the adjusted basis of 

such property to the Partnership for 

Federal income tax purposes and its 

initial Gross Asset Value in accordance 

with Code Section 704(c) and the 

Treasury Regulations thereunder, 

provided, however, that no such Section 

704(c) allocations shall be made to the 

Class A Limited Partner (in its capacity 

as such). 

5.5.3 In the event that the Gross 

Asset Value of any Partnership asset is 

adjusted pursuant to clause (ii) of the 

definition of Gross Asset Value, 

subsequent allocations of income, gain, 

loss and deduction with respect to such 

asset shall take account of any variation 

between the adjusted basis of such asset 

for Federal income tax purposes and its 

Gross Asset Value in accordance with 

Code Section 704(c) and the Treasury 

Regulations thereunder, provided, 

however, that no such Section 704(c) 

allocations shall be made to the Class A 

Limited Partner (in its capacity as such). 

5.5.4 Any elections or other 

decisions relating to such allocations 

shall be made by the Tax Matters 

Partner in any manner that reasonably 

reflects the purpose and intention of 

this Agreement. Allocations that are 

made pursuant to this Section 5.5 are 

made solely for purposes of Federal, 

state and local taxes and shall not affect, 

or in any way be taken into account in 

computing, any Partner’s Capital 

Account or share of Net Profit, Net Loss 

or other items or distributions pursuant 

to any provision of this Agreement. 

5.6 Allocation in Event of Transfer. 

If a Partnership Interest is Transferred in 

accordance with Article VI of this 

Agreement, the Net Profit and Net Loss 

of the Partnership shall be calculated as 

of the end of the month immediately 

prior to the month in which the transfer 

is effective. The transferor Partner shall 

be allocated an amount which is equal 

to the Net Profit and Net Loss of the 

Partnership that is allocable to the 

period ending on the last day of the 

month immediately prior to the 

Transfer. The Transferee shall be 

allocated an amount which is equal to 

the Net Profit and Net Loss of the 

Partnership that is allocable to the 

remainder of the calendar year. As of 

the effective date of such Transfer, the 

Transferee shall succeed to the Capital 

Account of the transferor Partner with 

respect to the Transferred Partnership 

Interest. This Section 5.6 shall apply for 

purposes of computing a Partner’s 

Capital Account and for Federal income 

tax purposes. 

Article VI 

Transfer of Partnership Interests 

6.1 Limitations on Transfers. 

6.1.1 Except as provided in Section 

6.1.2, no sale, assignment, transfer, 

pledge, hypothecation or other 

disposition (any or all of the foregoing, 

a ‘‘Transfer’’) of a Partnership Interest 

will be effective nor will any purported 

Transferee become a Partner or 

otherwise be entitled to any of the 

attributes of ownership of the 

Partnership purportedly Transferred. 

6.1.2 The restrictions of Section 

6.1.1 shall not apply to: 

(a) a Transfer pursuant to Article VII; 

(b) in the case of the Class A Limited 

Partner, a Transfer of its entire Class A 

Limited Partnership Interest approved 

by the General Partner, which approval 

shall not be unreasonably withheld (the 

Class A Limited Partner acknowledges 

and agrees that the General Partner’s 

ability to grant consent to a Transfer is 

circumscribed by certain contractual 

restrictions under the Joint Venture’s 

financing arrangements and the 

withholding of consent by the General 

Partner in order to comply with these 

contractual restrictions will not be 

considered unreasonable); 

(c) in the case of a Class B Limited 

Partner, a Transfer permitted by and 

made in accordance with the provisions 

of the Put/Call Agreement to which 

such Class B Limited Partner is a party; 

(d) in the case of the General Partner 

or any permitted Transferee of the 

General Partner, any Transfer to an 

Affiliate of the General Partner and any 

other Transfer so long as at the time of 

such Transfer the Joint Venture is 

current in the distributions and 

payments required to be made to the 

Class A Limited Partner pursuant to 

Section V J(l) through (4) of the JOA, 

and provided that if the Joint Venture is 

not so current, the General Partner shall 

obtain the consent of the Class A 

Limited Partner prior to any Transfer 

pursuant to this Section 6.1.2(d); 

(e) a Transfer pursuant to a 

foreclosure action by the Joint Venture’s 

lenders; or 

(f) any Transfer of all or any portion 

of the ownership interests in the Class 

A Limited Partnership Interest or the 

Partnership Interest with respect to any 

of the Class B Limited Partner Units to 

MNG or an Affiliate of MNG so long as 

(1) all of the other requirements of this 

Article VI have been complied with and 

(2) MNG or an Affiliate of MNG holds 

and maintains, directly or indirectly, 

voting control of such Transferee 

following such Transfer. 

6.2 Transferees. 


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6.2.1 Notwithstanding any provision 

to the contrary contained herein, no 

Partnership Interest may be transferred 

unless such Transfer is made in 

accordance with the provisions of this 

Article VI and the transferor and the 

Transferee have complied with the 

following conditions: 

(a) the transferor has executed and 

delivered to the General Partner a copy 

of the assignment of the Partnership 

Interest to Transferee in form and 

substance reasonably satisfactory to the 

General Partner; and 

(b) the Transferee, if not already a 

party to this Agreement, becomes a 

party to this Agreement, assumes all of 

the obligations hereunder of its 

transferor in respect of such Partnership 

Interest and agrees to be bound by the 

terms and conditions hereof in the same 

manner as the transferor. 

6.2.2 Upon compliance with Section 

6.1 and 6.2.1, any Transferee shall be 

substituted as a Partner for, and shall 

enjoy the same rights and be subject to 

the same obligations as, its predecessor 

as a Partner hereunder, and the General 

Partner shall prepare and file as soon as 

practicable, if required by law, an 

amendment to the Certificate of Limited 

Partnership and any other qualification 

documents. Exhibit A hereto shall also 

be amended to reflect such Transfer. 

6.2.3 If there is a permitted Transfer 

of a Partnership Interest under this 

Agreement: 

(a) In the case of a Transfer by any 

Partner, such Partner shall, upon the 

effectiveness of such Transfer, be 

released and discharged from any 

further liability under this Agreement in 

respect of such Partnership Interest, 

provided, however, that such 

transferring Partner shall remain liable 

to the Partnership for any Partnership 

distributions wrongfully paid to or 

received by such transferring Partner or 

that are required by law to be returned 

to the Partnership; and 

(b) If requested to do so by any 

transferring Partner or by the Transferee 

by notice given to the Partners, the 

Partnership shall make an election 

under Section 754 of the Code (and a 

corresponding election under applicable 

state and local law). Upon the request of 

any Partner, the Partnership shall also 

make a timely election under Section 

754 of the Code upon a distribution of 

property or money to a Partner. 

6.3 Transfers of Interests in Partners. 

6.3.1 The transfer of a majority of 

the issued and outstanding capital stock 

(or equivalent interest) of a Partner or a 

controlling interest of a Partner, 

however accomplished, whether in a 

single transaction or in a series of 

related or unrelated transactions, and 

whether directly or by transfer of stock 

(or equivalent interest) of a direct or 

indirect parent corporation or other 

entity or otherwise, shall be deemed to 

be a purported Transfer of an interest in 

the Partnership for purposes of this 

Agreement. 

6.3.2 Except as provided in Section 

6.3.3, MNG agrees that it will not 

Transfer (whether voluntarily, 

involuntarily or by operation of law) all 

or any part of its ownership interest in 

the Class A Limited Partner, without the 

consent of the General Partner, which 

consent shall not be unreasonably 

withheld (MNG acknowledges and 

agrees that the General Partner’s ability 

to grant consent to a Transfer is 

circumscribed by certain contractual 

restrictions under the Joint Venture’s 

financing arrangements, and the 

withholding of consent by the General 

Partner in order to comply with these 

contractual restrictions will not be 

considered unreasonable). 

6.3.3 The restriction of Section 6.3.1 

shall not apply and no consent of the 

General Partner shall be required for (x) 

a Transfer directly or indirectly by MNG 

or CPC of its ownership interests in the 

Class A Limited Partner or any Class B 

Limited Partner to an Affiliate of MNG 

so long as (1) all of the other 

requirements of this Article VI have 

been complied with and (2) MNG or a 

MNG Affiliate holds and maintains, 

directly or indirectly, voting control of 

such Transferee following such 

Transfer, and (y) the grant of a security 

interest in the ownership interests in the 

Class A Limited Partner or any Class B 

Limited Partner. 

6.4 Other Consents and 

Requirements. Any Transfer must be in 

compliance with all requirements 

imposed by any state securities 

administrator having jurisdiction over 

the Transfer and the United States 

Securities and Exchange Commission. 

6.5 Assignment Not in Compliance. 

Any Transfer in contravention of any of 

the provisions of this Article VI 

(whether voluntarily, involuntarily or 

by operation of law) shall be void and 

of no effect, and shall neither bind nor 

be recognized by the Partnership. 

6.6 Pledge. Each Partner and any 

permitted Transferee of each Partner 

may collaterally assign its Partnership 

Interest and its attendant rights under 

this Agreement to the Joint Venture’s 

lenders for security purposes. Each 

Limited Partner may at any time assign 

its Partnership Interest and its rights 

under this Agreement as collateral 

security to Persons extending financing 

to such Limited Partner or any of its 

Affiliates (and such Persons may at any 

time foreclose on such security interest). 

6.7 Division of Partnership Interests. 

The several rights and obligations 

inherent in the Capital Account and 

Partnership Interest are indivisible 

except in equal proportions, such that 

the assignment of a specified percentage 

of a Partner’s Partnership Interest may 

only represent an equal percentage of 

the total Capital Account that was 

attributable to such Partner’s 

Partnership Interest prior to the 

assignment. 

6.8 Withdrawal of Partners. No 

Partner may withdraw from the 

Partnership except upon the transfer of 

its Partnership Interest permitted under 

the provisions of this Agreement or 

upon the dissolution and winding up of 

the Partnership in accordance with the 

provisions of Article VII. For purposes 

of this Agreement, the term 

‘‘withdrawal’’ does not include the 

happening of any event described in 

Section 17–402(a)(4) or (5) of the Act, 

and no Partner shall cease to be a 

Partner solely upon the happening of 

such event(s). The withdrawal of a 

Partner shall not alter the allocations 

and distributions to be made to the 

Partners pursuant to this Agreement. 

6.9 Issuance of Partnership Interests. 

Subject to the provisions of any Put/Call 

Agreement, the General Partner may 

cause the Partnership to issue additional 

Partnership Interests to any Person and 

may admit to the Partnership as 

additional Partners the Person acquiring 

such Partnership Interests, if such 

Persons were not previously admitted as 

Partners. The Persons acquiring such 

Partnership Interests shall have the 

rights and be subject to the obligations 

set forth in this Agreement as it may be 

amended in accordance with Section 9.8 

in connection therewith. A Person 

admitted as a new Partner shall only be 

entitled to distributions and allocations 

of Net Profit and Net Loss attributable 

to the period beginning on the effective 

date of its admission to the Partnership, 

and the Partnership shall attribute Net 

Profit and Net Loss to the period before 

the effective date of the admission of a 

new Partner and to the period beginning 

on the effective date of the admission of 

a new Partner by the closing of the 

books method. The Partnership will not 

issue any additional Class A Limited 

Partner Units to any other Person 

without the consent of the Class A 

Limited Partner and will not issue Class 

B Limited Partner Units to any other 

Person without the consent of the 

holders of the majority of the Class B 

Limited Partner Units. 


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Article VII 

Dissolution and Liquidation 

7.1 Events of Dissolution. The 

Partnership shall be dissolved, 

terminated and liquidated upon the 

happening of any of the following 

events: 

(a) the expiration of the term of the 

Partnership as set forth in Section 2.7; 

(b) at such time as the JOA shall 

expire or otherwise terminate; 

(c) upon mutual agreement of the 

Partners; or subject to any provision of 

this Agreement that limits or prevents 

dissolution, the happening of any event 

that, under applicable law, causes the 

dissolution of a limited partnership. 

7.2 Liquidation. Upon dissolution of 

the Partnership for any reason, the 

Partnership shall immediately 

commence to wind up its affairs in 

accordance with this Article VII. A 

reasonable period of time shall be 

allowed for the orderly termination of 

the Partnership’s business, discharge of 

its liabilities, and distribution or 

liquidation of the remaining assets so as 

to enable the Partnership to minimize 

the normal losses attendant to the 

liquidation process. The dissolution and 

liquidation of the Partnership shall be 

conducted and supervised by the 

General Partner, who is hereby 

authorized and empowered to execute 

on behalf of the Partnership any and all 

documents necessary or desirable to 

effectuate the dissolution and 

liquidation of the Partnership and the 

transfer of any property of the 

Partnership. 

7.3 Priority on Liquidation. The 

General Partner shall, to the extent 

feasible, liquidate and/or distribute the 

assets of the Partnership as promptly as 

shall be practicable consistent with the 

other provisions hereof. Such assets, or 

the proceeds of such liquidation, shall 

be applied as follows: 

7.3.1 first, to the payment of the 

debts and liabilities of the Partnership, 

in the order of priority provided by law 

(excluding any loans by any Partner to 

the Partnership); 

7.3.2 second, the Partnership shall 

distribute to the Class A Limited Partner 

the Mail masthead, all trademarks, 

copyrights, trade names, service names 

and service marks of the Mail, 

subscriber and advertiser lists, print and 

electronic archives of the Mail, 

associated Websites and URLs 

(including ‘‘dailymail.com’’) and all 

legal rights associated with these assets, 

subject to such dispositions, additions 

or substitutions relating thereto which 

may have occurred in the ordinary 

course of the operations of the 

Partnership or the Joint Venture 

subsequent to the date hereof, including 

in particular, any and all lists of 

advertisers and subscribers to Mail, 

together with copies of any contracts 

with such subscribers relating to Mail 

and any executory contracts for the 

purchase of advertising in Mail, free and 

clear of any lien, encumbrance, right or 

interest (including any option or any 

license or other right of use) of or in 

favor of a third party, transfer restriction 

(including any right of first offer or 

refusal or similar provision) or any other 

similar right or interest whatsoever; 

7.3.3 third, to the payment of loans 

by any Partner to the Partnership and 

the payment of the expenses of 

liquidation; 

7.3.4 fourth, to the setting up of any 

reserve which the General Partner may 

deem reasonably necessary for 

contingent or unforeseen liabilities or 

obligations of the Partnership or any 

liability or obligation not then due and 

payable; provided, however, that any 

such reserve shall be paid over by the 

General Partner into a Partnership 

account established for such purpose, to 

be held in such account for the purpose 

of disbursing such reserves in payment 

of such liabilities, and, at the expiration 

of such holdback period as the General 

Partner shall deem advisable, to 

distribute the balance thereafter 

remaining in the manner herein 

provided; and 

7.3.5 fifth, to payment to the 

Partners, in accordance with the 

following order of priority: 

(a) First, the Partnership shall 

distribute to the Class A Limited 

Partner, subject to the prior satisfaction 

of the claims of all creditors, cash in an 

amount equal to the aggregate cash 

distributed to the Partnership from the 

Joint Venture pursuant to clause (2)(a) of 

Section VI B of the JOA. 

(b) Thereafter, the Partnership shall 

distribute all remaining assets to the 

Class B Limited Partner(s) and the 

General Partner in accordance with their 

respective Capital Account balances. 

7.4 Statements on Liquidation. Each 

of the Partners shall be furnished with 

a statement which shall set forth the 

assets and liabilities of the Partnership 

as at the date of dissolution and as at the 

date of complete liquidation, the share 

of each Partner thereof, and a reasonably 

detailed report of the manner of 

disposition of the assets of the 

Partnership. Upon compliance with the 

foregoing distribution plan and 

completion of the winding up process, 

the Partnership shall be terminated and 

the General Partner shall cause the 

cancellation of the Certificate of Limited 

Partnership and all qualifications of the 

Partnership as a foreign limited 

partnership in jurisdictions other than 

the State of Delaware and shall take 

such other action as may be necessary 

to terminate the Partnership. 

7.5 Return of Capital or Partition. 

No Partner shall have any right to 

receive its Capital Contribution or any 

profit of the Partnership or to obtain a 

partition of assets of the Partnership or 

to cause the dissolution of the 

Partnership other than as provided in 

this Agreement. The General Partner 

shall not be personally liable for the 

return of the Capital Contributions of 

the Limited Partners, or of any portion 

thereof, it being expressly understood 

that any such return shall be made 

solely from Partnership assets. 

Article VIII 

Records and Accounting 

8.1 Books and Records. At all times 

during the continuance of the 

Partnership, the General Partner shall 

keep or cause to be kept books of 

account of the transactions of the 

Partnership consistent with the 

provisions of the JOA. The books of 

account, records and all documents and 

other writings of the Partnership shall 

be kept and maintained at the principal 

office of the Partnership or of the 

General Partner. Each Partner and its 

representatives shall, upon reasonable 

notice to the General Partner, have 

access to such books, records and 

documents during reasonable business 

hours and may inspect and make copies 

of any of them at its own expense. 

8.2 Bank Accounts. The General 

Partner may from time to time open and 

maintain on behalf of the Partnership a 

bank account or accounts with such 

depositaries as the General Partner shall 

determine, in which monies received by 

or on behalf of the Partnership shall be 

deposited. All withdrawals from such 

accounts shall be made upon the 

signature of such Person or Persons as 

the General Partner may from time to 

time designate. 

8.3 Required Filings. The General 

Partner shall cause the Partnership to 

file, on or before the dates the same may 

be due, giving effect to extensions 

obtained, all reports, returns and 

applications which may be required by 

any taxing authority or other 

governmental body having jurisdiction. 

The General Partner shall timely deliver 

to each of the Partners such information, 

including Schedules K–1, as may be 

necessary for the preparation by such 

Partner of its Federal, state or other tax 

returns. 


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Article IX 

Miscellaneous 

9.1 Supervision of Editorial Staff. In 

order to fulfill its obligations under the 

JOA, CPC shall exercise exclusive 

supervision over all editorial and 

reportorial functions of the Mail. CPC 

shall select the staff, designate all 

editors and newsroom managers, make 

all newsroom assignments, and set all 

editorial policies for the Mail. DGHC, as 

General Partner of the Partnership, shall 

cause the Joint Venture to employ the 

employees selected by CPC and to 

assign those employees to work 

exclusively as the staff of the Mail. CPC 

shall have complete control and 

authority over the editors and other staff 

of the editorial department of the Mail 

(including the exclusive authority to 

determine the number, identity and 

salaries of the editorial department of 

the Mail and to make hiring and firing 

decisions, so long as the Editorial 

Expense for the Mail does not exceed 

the approved budgeted amount for the 

Mail). The term ‘‘editorial department’’ 

as used herein shall include the news, 

editorial, editorial promotion and 

photographic functions of the Mail. 

9.2 Notices. All notices, demands 

and other communications which may 

or are to be given hereunder or with 

respect hereto shall be in writing, shall 

be given either by personal delivery, 

facsimile or by certified or special 

express mail or recognized overnight 

delivery service, first class postage 

prepaid, or when delivered to such 

delivery service, charges prepaid, return 

receipt requested, and shall be deemed 

to have been given or made when 

personally received by the addressee, 

addressed as follows: 

(1) If to the Class A Limited Partner, 

to: 

MediaNews Group, Inc., 101 W. Colfax 

Ave., Suite 1100, Denver, CO 80202, 

Attn: Joseph J. Lodovic, IV President, 

Facsimile: (303) 954–6320. 

With a copy to: 

Hughes Hubbard & Reed LLP, One 

Battery Park Plaza, New York, New 

York 10004–1482, Attn: James 

Modlin, Facsimile: (212) 422–4726. 

or such other addresses as the Class A 

Limited Partner may from time to time 

designate. 

(2) If to the General Partner or the 

Partnership, to: 

Daily Gazette Company, 1001 Virginia 

Street, East Charleston, WV 25301, 

Attn: Ms. Elizabeth E. Chilton, 

President, Facsimile: (304) 348–5180. 

And 

Attn. Mr. Norman Watts Shumate III, 

Facsimile: (304) 348–1795. 

With a copy to: 

Edmondson + Blumenthal PLLC, 12 

Cadillac Drive, Suite 210, Brentwood, 

TN 37027, Attn: Steven E. 

Blumenthal, Facsimile: (615) 296– 

4600. 

or such other addresses as the General 

Partner or the Partnership may from 

time to time designate. 

9.3 Further Assurances. The 

Partners will execute and deliver such 

further instruments and do such further 

acts and things as may be required to 

carry out the intent and purposes of this 

Agreement. 

9.4 Agreement in Counterparts. This 

Agreement may be executed in 

counterparts and all counterparts so 

executed shall constitute one agreement 

binding on all the parties hereto 

notwithstanding that all the parties 

hereto are not signatories to the original 

or to the same counterpart. 

9.5 Captions. Captions contained in 

this Agreement are inserted as a matter 

of convenience and in no way define the 

scope of this Agreement or the intent of 

any provision hereof. 

9.6 Construction. None of the 

provisions of this Agreement shall be for 

the benefit of or be enforceable by any 

creditor of the Partnership or of any 

Partner (subject to the security interest 

and other rights in favor of the Joint 

Venture’s lenders). 

9.7 Successors. Except as otherwise 

expressly provided in this Agreement, 

all provisions of this Agreement shall be 

binding upon, inure to the benefit of, 

and be enforceable by or against the 

successors and permitted assigns of the 

parties hereto. 

9.8 Amendments. 

9.8.1 This Agreement may be 

modified or amended only upon the 

written agreement of each of the 

Partners (and subject to any applicable 

contractual restrictions under the Joint 

Venture’s financing arrangements), 

except that this Agreement may be 

amended from time to time by the 

General Partner without the consent of 

the Limited Partners: 

(a) to reflect the rights and obligations 

of a Person admitted as a Partner upon 

the issuance of Partnership Interests 

pursuant to Section 6.9 and any change 

in the rights and obligations of any 

existing Partner upon the issuance to 

any Person of partnership interests 

pursuant to Section 6.9, provided that 

the consent of an affected Limited 

Partner and/or the Warrant Holder shall 

be required to the extent such 

amendment adversely affects the 

interests of such Limited Partner and/or 

the Warrant Holder, as the case may be; 

(b) to change the Partnership’s 

principal office or other place of 

business; 

(c) to change the Partnership’s method 

of allocating income and loss for tax 

purposes to the extent required by new 

or changes to Treasury Regulations, 

Internal Revenue Service 

announcements or rulings, or final 

courts decisions, provided that the 

consent of an affected Limited Partner 

and/or the Warrant Holder shall be 

required to the extent such amendment 

adversely affects the interests of such 

Limited Partner and/or the Warrant 

Holder, as the case may be; 

(d) to add to the representations, 

duties or obligations of the General 

Partner (other than duties or obligations 

relating to the editorial and reportorial 

functions of the Mail); and 

(e) to cause to be deleted from this 

Agreement any provision or part of any 

provision that is found by a court of 

competent jurisdiction to be invalid or 

unenforceable in any respect, which 

provision may be deleted from this 

Agreement by the General Partner to the 

extent of such invalidity or 

unenforceability without in any way 

affecting the remaining parts of such 

provision or the remaining provisions of 

this Agreement. 

No change in the number of General 

Partner Units or Class B Limited Partner 

Units (whether by an amendment or 

otherwise) will be effective unless it has 

been executed or approved in writing by 

the holders of a majority of the Class B 

Limited Partner Units (or, prior to the 

exercise in full of the Warrant (or the 

termination of the Warrant), the Warrant 

Holder). 

9.8.2 The General Partner will give 

notice to the Limited Partners (and, 

prior to the exercise in full (or 

termination) of the Warrant, the Warrant 

Holder) ten days prior to any 

modification or amendment to this 

Agreement pursuant to this Section 9.8. 

9.8.3 The General Partner will cause 

the Partnership to prepare and file any 

amendment to the Certificate of Limited 

Partnership that may be required to be 

filed under the Act as a consequence of 

any amendment to this Agreement. 

9.9 Governing Law. This Agreement 

and the rights and obligations of the 

Partners shall be governed by and 

construed in accordance with the laws 

of the State of Delaware, without regard 

to its conflicts of laws principles. 

9.10 Integration. This Agreement 

amends and restates the Prior 

Partnership Agreement in its entirety. 

This Agreement, together with the JOA 

and the Warrant, constitutes the entire 

agreement among the parties hereto 

pertaining to the subject matter hereof 


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and supersedes all prior agreements 

(oral or written) and understandings 

pertaining thereto. In the event of any 

conflict between this Agreement and the 

JOA, this Agreement shall control. 

9.11 Severability. The invalidity of 

any article, section, subsection, clause 

or provision of this Agreement shall not 

affect the validity of the remaining 

articles, sections, subsections, clauses or 

provisions hereof. 

9.12 Representations by Partners. 

Each Partner represents and warrants to 

the other Partners and the Partnership 

that this Agreement is and will remain 

its valid and binding agreement, 

enforceable in accordance with its 

terms. Each Partner represents and 

warrants to the Partnership and the 

other Partners that: (i) it is fully aware 

that its Partnership Interest is not being 

registered under the Securities Act of 

1933, as amended, and has been issued 

and sold in reliance upon federal and 

state exemptions for transactions not 

involving a public offering, that its 

Partnership Interest cannot and will not 

be sold or transferred except in a 

transaction that is exempt from 

registration under federal and state 

securities laws, and that such Partner is 

an ‘‘accredited investor’’ within the 

meaning of Regulation D under the 

Securities Act of 1933, as amended. 

9.13 Non-Disclosure. Each Partner 

agrees that, except as otherwise 

consented to by the General Partner, all 

non-public information furnished to it 

or to which it has access pursuant to 

this Agreement will be kept confidential 

and will not be disclosed by such 

Partner or by any of its agents, 

representatives or employees, in any 

manner whatsoever, in whole or in part, 

except that: 

(a) each Partner shall be permitted to 

disclose such information to those of its 

(and its Affiliates’) Affiliates, agents, 

representatives and employees who 

need to be familiar with such 

information in connection with such 

Partner’s investment in the Partnership 

and who agree to maintain the 

confidentiality thereof in accordance 

with the provisions of this Section 9.13; 

(b) each Partner shall be permitted to 

disclose such information to its 

Affiliates; 

(c) each Partner shall be permitted to 

disclose information to the extent 

required by law, including federal or 

state securities laws or regulations, by 

the rules and regulations of any stock 

exchange or association on which 

securities of such Partner or any of its 

Affiliates are traded or by subpoena or 

other legal process so long as such 

Partner shall have first given the 

Partnership notice in advance of such 

disclosure (so that the Partnership may 

attempt to contest the necessity of 

disclosing such information) to the 

extent practicable under the 

circumstances; 

(d) each Partner shall be permitted to 

disclose information to the extent 

necessary for the enforcement of any 

right of such Partner arising under this 

Agreement; 

(e) each Partner shall be permitted to 

disclose information to a permitted 

Transferee or a prospective Permitted 

Transferee, so long as such Person 

agrees (in a writing which provides the 

Partnership with an independent right 

of enforcement) to be bound by the 

provisions of this Section; 

(f) each Partner shall be permitted to 

disclose information that is or becomes 

generally available to the public other 

than as a result of a disclosure by such 

Partner, its agents, representatives, or 

employees; and 

(g) each Partner shall be permitted to 

disclose information that becomes 

available to such Partner on a 

nonconfidential basis from a source 

(other than the Partnership, any other 

Partner, or their respective agents, 

representatives, and employees) that, to 

the best of such Partner’s knowledge, is 

not prohibited from disclosing such 

information to such Partner by a legal, 

contractual, or fiduciary obligation to 

the Partnership or any other Partner or 

hat is derived by such Partner or its 

agents without reliance on information 

the disclosure of which is prohibited by 

this Section 9.13. 

9.14 Execution of Papers. The 

Partners agree that they will not 

unreasonably refuse to execute such 

instruments, documents and papers as 

the General Partner deems necessary or 

appropriate to carry out the intent of 

this Agreement. 

IN WITNESS WHEREOF, the parties 

hereto have each caused this Agreement 

to be duly executed by their respective 

officers duly authorized. 

DAILY GAZETTE HOLDING 

COMPANY, LLC 

By: Daily Gazette Company, Sole 

Member 

By: llllllllllllllll

Title: lllllllllllllll

CHARLESTON PUBLISHING 

COMPANY 

By: llllllllllllllll

Title: lllllllllllllll

MEDIANEWS GROUP, INC. now known 

as AFFILIATED MEDIA, INC. (for 

purposes of Section 6.3) 

By: llllllllllllllll

Title: lllllllllllllll

DAILY GAZETTE COMPANY (for 

purposes of Section 4.9) 

By: llllllllllllllll

Title: lllllllllllllll

EXHIBIT A—TRANSFERS TO PARTNERSHIP BY PARTNERS

Partner Contribution Units received 

Daily Gazette Holding Company, LLC ............... (i) 100% of the ownership interests in Daily 

Gazette Publishing Company, LLC.

9,358 General Partner Units. 

(ii) cash and other assets provided in Master 

Restructuring Agreement.

Charleston Publishing Company ........................ Intangible and other assets more fully described in Master Restructuring Agreement.1 Class A Limited Partnership Unit. 

EXHIBIT B—CAPITAL ACCOUNT

BALANCES AS OF DATE HEREOF

Partner Value 

Daily Gazette Holding Company, LLC ............................ $63,750,000 

Charleston Publishing Company .................................... $1 

AMENDED AND RESTATED 

OPERATING AGREEMENT 

OF 

DAILY GAZETTE HOLDING 

COMPANY, LLC 

THIS AMENDED AND RESTATED 

OPERATING AGREEMENT OF DAILY 

GAZETTE HOLDING COMPANY, LLC, 

is entered into effective as of 

llllll, 2009, by and between 

Daily Gazette Holding Company, LLC, a 

limited liability company organized 

pursuant to the Delaware Limited 

Liability Company Act (the ‘‘Company’’), 

and Daily Gazette Company, a West 

Virginia corporation, its sole member. 


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Recital 

The parties desire to amend and 

restate the Operating Agreement of the 

Company, dated as of May 7, 2004, as 

set forth herein. 

Agreement 

In consideration of the mutual 

covenants and agreements set forth in 

this Agreement, the parties agree as 

follows. 

1. Definitions 

The following terms, as used in this 

Agreement, have the meanings set forth 

in this Section: 

‘‘Act’’ means the Delaware Limited 

Liability Company Act. 

‘‘Affiliate’’ means, with respect to any 

Person, any other Person that directly or 

indirectly through one or more 

intermediaries controls, is controlled by, 

or is under common control with such 

Person. For purposes of this definition, 

the term ‘‘controls’’ means the 

possession, direct or indirect, of the 

power to direct or cause the direction of 

the management and policies of a 

Person, whether through the ownership 

of voting securities, by contract, or 

otherwise. The terms ‘‘controlled by’’ 

and ‘‘under common control with’’ have 

meanings corresponding to the meaning 

of ‘‘controls.’’ 

‘‘Agreement’’ means this Amended 

and Restated Operating Agreement, as it 

may be amended, restated, modified, or 

supplemented from time to time in 

accordance with its terms. 

‘‘Board of Managers’’ shall have the 

meaning set forth in Section 5 hereof. 

‘‘Certificate’’ is the Certificate of 

Formation of Daily Gazette Holding 

Company, LLC as filed with the 

Secretary of State of the State of 

Delaware, as the same may be amended 

from time to time. 

‘‘Class B Limited Partner’’ shall have 

the meaning set forth in Section 1.1.11 

of the Partnership Agreement. 

‘‘Class B Limited Partner Unit’’ shall 

have the meaning set forth in Section 

1.1.12 of the Partnership Agreement. 

‘‘Class B Managers’’ means the 

Managers appointed by either the 

Warrant Holder or the Class B Limited 

Partner(s) pursuant to Section 5(b)(ii) 

hereof. 

‘‘JOA’’ means that certain Second 

Amended and Restated Joint Venture 

Agreement dated as of even date 

herewith, as such agreement may be 

amended from time to time. 

‘‘Joint Venture’’ means Charleston 

Newspapers, an unincorporated West 

Virginia joint venture. 

‘‘Manager’’ means a member of the 

Board of Managers. 

‘‘Member’’ means Daily Gazette 

Company and its successors-in-interest 

under this Agreement. 

‘‘Person’’ means an individual, 

corporation, limited liability company, 

association, general partnership, limited 

partnership, limited liability 

partnership, joint venture, trust, estate, 

or other entity or organization. 

‘‘Partnership’’ means Charleston 

Newspapers Holdings, L.P., a Delaware 

limited partnership. 

‘‘Partnership Agreement’’ means that 

certain Amended and Restated Limited 

Partnership Agreement for Charleston 

Newspapers Holdings, L.P., dated as of 

even date herewith, as such agreement 

may be amended from time to time 

‘‘Put/Call Agreement’’ means a put/ 

call agreement entered into by a Class B 

Limited Partner, the Company and the 

Partnership in connection with the 

exercise by the Warrant Holder of its 

right to purchase Class B Limited 

Partner Units pursuant to the terms of 

the Warrant, in substantially the form 

attached to the Warrant as Exhibit B 

thereto. 

‘‘Warrant’’ means that certain warrant, 

dated as of even date herewith, granted 

to the Warrant Holder by the 

Partnership to purchase Class B Limited 

Partner Units. 

‘‘Warrant Holder’’ means Charleston 

Publishing Company or any permitted 

transferee of the Warrant. 

2. The Company and Its Business 

(a) Formation. The Company was 

formed on April 12, 2004, pursuant to 

the provisions of the Act. Except as 

provided in this Agreement, all rights, 

liabilities, and obligations among the 

Member, the Company, and other 

Persons, shall be as provided in the Act, 

and this Agreement shall be construed 

in accordance with the provisions of the 

Act. To the extent that the rights or 

obligations of the Member are different 

by reason of any provision of this 

Agreement than they would be in the 

absence of such provision, this 

Agreement shall, to the extent permitted 

by the Act, control. 

(b) Filing of Certificate of Limited 

Liability Company. The Member has 

caused the Certificate to be filed with 

the Secretary of State of Delaware and 

shall cause the Certificate to be filed or 

recorded in any other public office 

where filing or recording is required or 

advisable. The Member shall do, and 

continue to do, all other things that are 

required or advisable to maintain the 

Company as a limited liability company 

existing pursuant to the laws of the 

State of Delaware. 

(c) Company Name. The name of the 

Company shall be ‘‘Daily Gazette 

Holding Company, LLC.’’ The business 

of the Company may be conducted 

under that name or, upon compliance 

with applicable laws, any other name 

that the Member deems appropriate or 

advisable. The Member shall file any 

assumed name certificates and similar 

filings, and any amendments thereto, 

that the Member considers appropriate 

or advisable. 

(d) Term of the Company. The term of 

the Company commenced on the date of 

the filing of the Certificate with the 

Secretary of State of the State of 

Delaware and shall continue until the 

Company is dissolved and its affairs 

wound up in accordance with the Act 

and Article 8 of this Agreement. 

(e) Purpose of the Company. The 

purpose of the Company is to do all 

lawful acts and things necessary, 

appropriate, proper, advisable, 

incidental to, or convenient for the 

furtherance and accomplishment of the 

foregoing purpose. 

(f) Authority of the Company. The 

Company shall be empowered and 

authorized to do all lawful acts and 

things necessary, appropriate, proper, 

advisable, incidental to, or convenient 

for the furtherance and accomplishment 

of its purposes. 

(g) Principal Office and Other Offices; 

Registered Agent. The address of the 

Company’s registered office which is 

required to be maintained by the 

Company in the State of Delaware 

pursuant to Section 18–104 of the Act 

shall be located at Corporation Service 

Company, 2711 Centerville Road, Suite 

400, Wilmington, Delaware 19808, and 

the name of the Company’s registered 

agent at such address is Corporation 

Service Company. The principal office 

of the Company shall be c/o Corporation 

Service Company, 2711 Centerville 

Road, Suite 400, Wilmington, Delaware 

19808. The Company may maintain any 

other offices at any other places that the 

Board of Managers deems advisable. 

The Company may, upon compliance 

with the applicable provisions of the 

Act, change its principal office or 

registered agent from time to time at the 

discretion of the Board of Managers. 

(h) Foreign Qualification. The 

Company shall take all necessary 

actions to be authorized to conduct 

business legally in all appropriate 

jurisdictions, including registration or 

qualification of the Company as a 

foreign limited liability company in 

those jurisdictions that provide for 

registration or qualification. 

(i) Fiscal Year. The fiscal year of the 

Company shall be the calendar year. 

The Company shall have the same fiscal 

year for income tax purposes and for 

financial accounting purposes. 

3. Company Capital 


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(a) Capital Contributions. The 

Member shall make such capital 

contributions to the Company as it 

deems appropriate. 

(b) Disbursements. Subject to Section 

5 hereof, the Company shall pay all 

costs and expenses of the Company 

business. The Company may set aside 

funds for any items that are proper 

Company purposes, as determined by 

the Board of Managers. 

4. Cash Distributions; Allocations of 

Profits and Losses 

(a) Distributions. All cash of the 

Company available for distribution shall 

be distributed to the Member at such 

times and in such amounts as the Board 

of Managers may determine. 

(b) Allocations of Profits and Losses. 

All profits and losses of the Company 

shall be allocated to the Member. 

5. Rights and Powers of the Member; 

Board of Managers. 

(a) Management Rights Generally. The 

responsibility and control of the 

management and conduct of the 

Company’s day-to-day activities and 

operations shall be vested in the 

Member, subject to Section 5(b) below. 

(b) Board of Managers. 

(i) The business and affairs of the 

Company shall be managed by or under 

the direction of a Board of Managers 

(the ‘‘Board of Managers’’) and all 

actions outside of the ordinary course of 

business of the Company, to be taken by 

or on behalf of the Company, shall 

require the approval of the Board of 

Managers. Except as otherwise provided 

in this Agreement, the Board of 

Managers shall have the duties, powers 

and rights of the board of directors of a 

corporation organized under the General 

Corporation Law of the State of 

Delaware (it being understood and 

agreed, nonetheless, that the individual 

Managers appointed by the Warrant 

Holder or the Class B Limited Partner(s) 

as provided below represent the 

interests of the Warrant Holder or the 

Class B Limited Partner(s)). 

(ii) The Board of Managers shall 

consist of up to five individual 

Managers appointed by the Member and 

in no event may the Board of Managers 

consist of more than five Managers 

without the consent of the Class B 

Managers; provided, however, that in no 

event may the Board of Managers 

consist of more than five Managers 

unless not fewer than forty percent 

(40%) of the Managers are Class B 

Managers. Unless and until the Warrant 

Holder exercises its rights under the 

Warrant to purchase any Class B 

Limited Partner Units, the Member shall 

delegate its right to appoint two (2) of 

the Managers (or such greater number as 

required by the first sentence of this 

section) to the Warrant Holder, and 

upon the purchase by the Warrant 

Holder of any Class B Limited Partner 

Units pursuant to the Warrant, the 

Member shall delegate its right to 

appoint two (2) of the Managers (or such 

greater number as required by the first 

sentence of this section) to the Class B 

Limited Partner(s). If there is more than 

one Class B Limited Partner, then the 

right to appoint two (2) of the Managers 

(or such greater number as required by 

the first sentence of this section) will be 

vested solely in the Class B Limited 

Partner that supervises editorial and 

reportorial functions of The Charleston 

Daily Mail pursuant to Section 9.1 of the 

Partnership Agreement. Neither the 

Warrant Holder nor the Class B Limited 

Partner(s) may appoint current 

employees of the Joint Venture, the 

Member, the Company, the Partnership 

or Daily Gazette Publishing Company, 

LLC to represent it on the Board of 

Managers. 

(iii) The Board of Managers shall only 

have the power and authority to act by 

the vote of the constituent Managers and 

no individual Manager, in the capacity 

of Manager, shall have the power or 

authority to act as the agent or 

representative of the Company or to 

otherwise bind the Company. Voting by 

the Managers shall be on a per capita 

basis. Actions may be taken by the 

Board of Managers by, but only by, a 

majority vote of the Managers; provided, 

however, that actions by the Board of 

Managers concerning (x) the budgeted 

Editorial Expenses (as that term is 

defined in the JOA) for The Charleston 

Gazette and The Charleston Daily Mail 

or (y) ‘‘news hole’’ and color usage 

allocations for The Charleston Gazette 

and The Charleston Daily Mail shall 

require the prior approval of at least 

75% of the Managers (i.e., if the Board 

of Managers consists of four Managers, 

not fewer than three Managers must 

vote in favor of the particular action, 

and if the Board of Managers consists of 

five Managers, not fewer than four 

Managers must vote in favor of the 

particular action); provided further that 

no Manager appointed by the Warrant 

Holder or the Class B Limited Partner(s), 

as the case may be, shall participate in 

any decisions concerning the news, 

editorial policy or content of The 

Charleston Gazette or The Charleston 

Gazette-Mail or have any connection 

with the news and editorial operations 

of The Charleston Gazette or The 

Charleston Gazette-Mail, and all such 

decisions shall be made exclusively by 

the Managers appointed by the Member. 

Either the Member or, as applicable, the 

Warrant Holder or the Class B Limited 

Partner(s) may at any time, by written 

notice to the other, remove its Managers, 

with or without cause, and substitute 

Managers to serve in their stead. No 

Manager shall be removed from office, 

with or without cause, without the 

consent of the Person that designated 

such Manager. Each Manager appointed 

by the Warrant Holder or the Class B 

Limited Partner(s) may act (or refrain 

from acting), and the Warrant Holder or 

the Class B Limited Partner(s) may 

instruct such Managers, in their 

capacity as such, to act (or refrain from 

acting) solely according to the interests 

(or the perceived interests) of the 

Warrant Holder or the Class B Limited 

Partner(s) and none of the foregoing 

shall be deemed to breach any fiduciary 

duty that, pursuant to this Agreement or 

at law or in equity, the Warrant Holder 

or the Class B Limited Partner(s) 

otherwise would be deemed to have to 

the Company, the Partnership or the 

Member. The Board of Managers shall 

hold such meetings no less frequently 

than once per calendar quarter and at 

such times and places as shall be 

determined by the Managers. Special 

meetings of the Board of Managers may 

be called at any time by agreement of 

the Managers. The Board of Managers 

may establish such procedures for the 

conduct of meetings as may be agreed 

by the Managers. 

(c) Officers. The Board of Managers 

may appoint such officers, from time to 

time, as the Board of Managers deems 

necessary and advisable. 

(d) Authority of the Member. Subject 

to the management of the business and 

affairs of the Company by the Board of 

Managers pursuant to Section 5(b) 

hereof, the Member shall have all 

powers necessary to manage and control 

the day-to-day activities and operations 

of the Company. 

(e) Admission of Additional Members. 

The Member, in its discretion, may 

admit additional members to the 

Company on terms and conditions 

agreed to by the Member and the Person 

being admitted as an additional 

member; provided, however, that the 

Board of Managers shall not consist of 

more than five Managers without the 

consent of the Class B Managers and in 

no event may the Board of Managers 

consist of more than five Managers if 

fewer than forty percent (40%) of the 

Managers are Class B Managers. 

(f) Limitation of Liability of the 

Member and Managers. The debts, 

obligations, and liabilities of the 

Company, whether arising in contract, 

tort, or otherwise, shall be solely the 

debts, obligations, and liabilities of the 

Company; and the Member and the 

Managers shall not be obligated 


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personally for any such debt, obligation, 

or liability of the Company solely by 

reason of being the Member or a 

Manager, except and only to the extent 

as otherwise expressly required by law. 

(g) Indemnification. 

(i) In any threatened, pending, or 

completed claim, action, suit, or 

proceeding to which the Member or a 

Manager was or is a party or is 

threatened to be made a party by reason 

of its activities on behalf of the 

Company, the Company shall indemnify 

and hold harmless such Member and 

Manager against losses, damages, 

expenses (including attorneys’ and 

accountants’ fees), judgments, and 

amounts paid in settlement actually and 

reasonably incurred in connection with 

such claim, action, suit, or proceeding, 

except that the Member and the 

Managers shall not be indemnified for 

actions constituting the improper 

receipt of personal benefits, willful 

misconduct, recklessness, or gross 

negligence with respect to the business 

of the Company; provided, however, 

that to the extent the Member or a 

Manager has been successful on the 

merits or otherwise in defense of any 

action, suit, or proceeding to which it 

was or is a party or is threatened to be 

made a party by reason of the fact that 

it was or is a Member or Manager of the 

Company, or in defense of any claim, 

issue, or matter in connection therewith, 

the Company shall indemnify such 

Member and Manager and hold him 

harmless against the expenses 

(including attorneys’ and accountants’ 

fees) actually incurred by such Member 

and Manager in connection therewith. 

(ii) Expenses (including attorneys’ 

and accountants’ fees) incurred in 

defending a civil or criminal claim, 

action, suit, or proceeding shall be paid 

by the Company in advance of the final 

disposition of the matter upon receipt of 

an undertaking by or on behalf of the 

Member or a Manager to repay such 

amount if such Member or Manager is 

ultimately determined not to be entitled 

to indemnity. 

(iii) For purposes of this Section 5(g), 

the termination of any action, suit, or 

proceeding by judgment, order, 

settlement, or otherwise adverse to the 

Member or a Manager shall not, of itself, 

create a presumption that the conduct of 

such Member or Manager constitutes 

willful misconduct, recklessness, or 

gross negligence with respect to the 

business of the Company. 

6. Permitted Transactions 

(a) Other Businesses. The Member, 

the Managers and their respective 

affiliates, agents, and representatives, 

may engage in or possess an interest in 

other business ventures of any nature or 

description, independently or with 

others, whether currently existing or 

hereafter created and whether or not 

competitive with or advanced by the 

business of the Company. The Company 

shall not have any rights in or to the 

income or profits derived therefrom. 

(b) Transactions with the Company. 

The Company may, in the sole 

discretion of the Board of Managers, 

contract with any Person (including the 

Member or any Person affiliated with 

the Member or in which the Member 

may be interested) for the performance 

of any services which may reasonably 

be required to carry on the business of 

the Company, and any such Person 

dealing with the Company, whether as 

an independent contractor, agent, 

employee, or otherwise, may receive 

from others or from the Company 

profits, compensation, commissions, or 

other income incident to such dealings. 

7. Assignment, Transfer, or Sale of 

Interests in the Company 

Subject to the Put/Call Agreement, the 

Company may sell, assign, pledge, or 

otherwise encumber or transfer all or 

any part of its interest in the Company 

to any Person. 

8. Dissolution and Termination of the 

Company 

(a) Events of Dissolution. The 

Company shall dissolve upon the earlier 

to occur of: 

(i) an election to dissolve the 

Company made by the Board of 

Managers, subject to any restriction in 

any agreement to which the Company is 

a party; or 

(ii) the happening of any event that, 

under the Act, causes the dissolution of 

a limited liability company. 

(b) Actions on Dissolution. Upon the 

dissolution of the Company, the Board 

of Managers shall act as liquidator to 

wind up the Company. The proceeds of 

liquidation shall be applied first to the 

payment of the debts and liabilities of 

the Company (including any loans to 

the Company made by the Member), the 

expenses of liquidation, and the 

establishment of any reserves that the 

liquidator deems necessary for potential 

or contingent liabilities of the Company. 

Remaining proceeds shall be distributed 

to the Member as provided in Section 

4(a). Upon the dissolution and winding 

up of the Company, the liquidator shall 

file a certificate of cancellation with the 

Secretary of State of Delaware in 

accordance with Section 18–203 of the 

Act. Upon the completion of the 

distribution of Company assets and the 

proceeds of liquidation as provided in 

this Section 8(b), the Company shall be 

terminated. 

9. Books, Records, and Returns 

(a) Books of Account and Records. A 

copy of this Agreement and any other 

records required to be maintained by the 

Act shall be maintained at the principal 

office of the Company at the location 

specified in Section 2(g). All such books 

and records shall be available for 

inspection and copying by the Member 

or its duly authorized representatives 

during ordinary business hours. The 

Company shall keep accurate books and 

records of the operation of the Company 

which shall reflect all transactions, be 

appropriate and adequate for the 

Company’s business and for carrying 

out the provisions of this Agreement. 

(b) Deposit of Company Funds. All 

revenues, assessments, loan proceeds, 

and other receipts of the Company will 

be maintained on deposit in interestbearing and non-interest bearing 

accounts and other investments as the 

Board of Managers deems appropriate. 

10. Miscellaneous 

(a) Captions. All section or paragraph 

captions contained in this Agreement 

are for convenience only and shall not 

be deemed part of this Agreement. 

(b) Pronouns, Singular and Plural 

Form. All pronouns and any variations 

thereof shall be deemed to refer to the 

masculine, feminine, and neuter as the 

identity of the Person or Persons 

referred to may require, and all words 

shall include the singular or plural as 

the context or the identity of Persons 

may require. 

(c) Further Action. The parties shall 

execute and deliver all documents, 

provide all information, and take, or 

forbear from, all actions that may be 

necessary or appropriate to achieve the 

purposes of this Agreement. 

(d) Entire Agreement. Except as to 

matters with respect to which additional 

agreements are referenced herein, this 

Agreement contains the entire 

understanding among the parties and 

supersedes any prior understandings 

and agreements between them regarding 

the subject matter of this Agreement. 

(e) Agreement Binding. This 

Agreement shall be binding upon the 

successors and assigns of the parties. 

(f) Severability. If any provision or 

part of any provision of this Agreement 

shall be invalid or unenforceable in any 

respect, such provision or part of any 

provision shall be ineffective to the 

extent of such invalidity or 

unenforceability only, without in any 

way affecting the remaining parts of 

such provision or the remaining 

provision of this Agreement. 

(g) Counterparts. This Agreement may 

be signed in counterparts with the same 

effect as if the signature on each 

counterpart were upon the same 

instrument. 


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(h) Governing Law. This Agreement 

shall be governed, construed, and 

enforced in accordance with the laws of 

the State of Delaware (without regard to 

the choice of law provisions thereof). 

(i) Amendment. This Agreement shall 

not be amended without the prior 

written consent of the Warrant Holder 

or, if applicable, the Class B Limited 

Partner(s). 

(j) No Third-Party Beneficiaries. With 

the exception of the Warrant Holder, the 

Class B Limited Partner(s) and the Class 

B Managers, this Agreement is not 

intended to, and shall not be construed 

to, create any right enforceable by any 

Person not a party hereto, including any 

creditor of the Company or of the 

Member. 

IN WITNESS WHEREOF, the 

undersigned have executed this 

Agreement to be effective as of the date 

first above written. 

DAILY GAZETTE COMPANY 

By: llllllllllllllll

Elizabeth B. Chilton 

President 

DAILY GAZETTE HOLDING 

COMPANY, LLC 

By: Daily Gazette Company, its sole 

member 

By: llllllllllllllll

Elizabeth B. Chilton 

President 

SECOND AMENDED AND RESTATED 

JOINT OPERATING AGREEMENT BY 

AND AMONG DAILY GAZETTE 

COMPANY, A WEST VIRGINIA 

CORPORATION; DAILY GAZETTE 

HOLDING COMPANY, LLC, A 

DELAWARE LIMITED LIABILITY 

COMPANY; CHARLESTON 

NEWSPAPERS, A WEST VIRGINIA 

UNINCORPORATED JOINT VENTURE; 

CHARLESTON NEWSPAPERS 

HOLDING, L.P., A DELAWARE 

LIMITED PARTNERSHIP; DAILY 

GAZETTE PUBLISHING COMPANY, 

LLC, A DELAWARE LIMITED 

LIABILITY COMPANY; AND 

CHARLESTON PUBLISHING 

COMPANY, A DELAWARE 

CORPORATION 

llllllll, 2009 

THIS SECOND AMENDED AND 

RESTATED JOINT OPERATING 

AGREEMENT (this ‘‘JOA’’) is dated as of 

llllllll, 2009 by and among 

Daily Gazette Company, a West Virginia 

corporation (‘‘DGC’’); Daily Gazette 

Holding Company, LLC, a Delaware 

limited liability company (‘‘DGHC’’); 

Charleston Newspapers, a West Virginia 

unincorporated joint venture (the ‘‘Joint 

Venture’’); Charleston Newspapers 

Holdings, L.P., a Delaware limited 

partnership (the ‘‘Limited Partnership’’); 

Daily Gazette Publishing Company, 

LLC, a Delaware limited liability 

company (‘‘DGPC’’); and Charleston 

Publishing Company, a Delaware 

corporation (‘‘CPC’’). 

Whereas, DGHC, the Joint Venture, 

the Limited Partnership, DGPC and CPC 

previously entered into an Amended 

and Restated Joint Venture Agreement 

dated as of May 7, 2004 (the ‘‘Prior 

JVA’’), pursuant to which the Joint 

Venture prior to the date hereof 

managed and operated The Charleston 

Gazette (‘‘Gazette’’), The Sunday 

Gazette-Mail (‘‘Gazette-Mail’’) and The 

Charleston Daily Mail (‘‘Mail’’) 

(collectively, the ‘‘Newspapers’’ and 

individually a ‘‘Newspaper’’), except for 

the news and editorial departments of 

Gazette and Gazette-Mail, on one hand, 

and Mail, on the other, which have 

remained separate and independent; 

Whereas, simultaneously with the 

execution of this agreement, DGC and 

CPC and certain affiliated parties are 

effectuating certain transactions relating 

to the ownership and management of 

the Joint Venture and which are 

described herein; 

Whereas, DGC, CPC, DGHC, DGPC, 

the Limited Partnership and the Joint 

Venture desire to amend various 

provisions of the Prior JVA, to restate it 

in its entirety and to supplement it, as 

herein provided; 

Whereas, the purpose and intent of 

the JOA is to provide a plan of common 

operation of the Newspapers, so as to (1) 

provide efficient newspaper operations, 

(2) produce high quality newspapers 

that are attractive to readers and 

advertisers and (3) maintain the separate 

identities and free editorial and news 

voices of the Newspapers; and 

Whereas, the JOA will continue to 

maintain as separate and independent 

the respective news and editorial 

operations of the Newspapers consistent 

with the requirements of the Newspaper 

Preservation Act, 15 U.S.C. 1801 et seq.; 

Now Therefore, in consideration of 

the mutual promises contained herein 

and other good and valuable 

consideration, the parties hereby agree 

as follows: 

I. The Limited Partnership 

A. General. On May 7, 2004, a limited 

partnership (the ‘‘Limited Partnership’’) 

was formed by DGHC, as the sole 

General Partner, CPC, as the sole Class 

A Limited Partner, and ABRY/ 

Charleston, Inc., as the sole Class B 

Limited Partner. Prior to the date hereof, 

ABRY/Charleston, Inc.’s entire interest 

as a Class B Limited Partner in the 

Limited Partnership was redeemed by 

the Partnership. Simultaneously 

herewith, the Limited Partnership is 

granting to CPC (in its capacity as the 

holder of the Warrant and any permitted 

transferee of the Warrant, the ‘‘Warrant 

Holder’’) a warrant (the ‘‘Warrant’’) to 

subscribe for and purchase up to an 

aggregate number of Class B Limited 

Partner Units in the Limited Partnership 

that constitute a twenty percent (20%) 

Percentage Interest (as defined in the 

Amended and Restated Limited 

Partnership Agreement of the Limited 

Partner dated as of the date hereof (the 

‘‘Limited Partnership Agreement’’), by 

and among DGHC and CPC, the Limited 

Partnership) as of the date of exercise, 

subject to adjustment as provided 

therein. 

B. Future Capital Contributions; 

Capital Assets. CPC and any other 

limited partners of the Limited 

Partnership shall have no obligation to 

make any further contributions to the 

capital of the Limited Partnership. 

DGHC shall in the future make such 

additional contributions to the capital of 

the Limited Partnership as shall be 

necessary in its reasonable judgment to 

(1) fund acquisitions of capital assets 

necessary for the business and 

operations of the Limited Partnership 

and/or the Joint Venture; (2) fund 

acquisitions of capital assets necessary 

for the business and operations of the 

editorial departments of each of the 

Newspapers to the extent such editorial 

departments’ tangible capital assets on 

the date hereof require supplementation 

or replacement, (3) provide the Limited 

Partnership and the Joint Venture with 

adequate working capital, and (4) ensure 

that the Limited Partnership and the 

Joint Venture have adequate funds to 

make on a timely basis the cash 

distributions and payments 

contemplated by Section V J (1) through 

(4) of this JOA. DGHC may from time to 

time cause the Limited Partnership or 

the Joint Venture to distribute and 

transfer to it one or more capital assets 

of the Limited Partnership so long as 

after such transfer the Limited 

Partnership and the Joint Venture shall 

have, as a result of their remaining 

capital assets and any other capital 

assets which DGHC shall at the time 

contribute or make available to the 

Limited Partnership and/or the Joint 

Venture pursuant hereto, capital assets 

whose adequacy and suitability for the 

Limited Partnership’s and/or the Joint 

Venture’s performance of the business 

and operations of the Newspapers are 

substantially the same as prior to such 

transfer. 

C. Management of Partnership and 

General Partner. The Limited 

Partnership shall be managed 

exclusively by DGHC as the General 

Partner of the Limited Partnership. The 


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members of DGHC have delegated the 

management of DGHC to a board of 

managers consisting of up to five 

individual managers, and in no event 

may the board of managers consist of 

more than five managers without the 

consent of the managers appointed 

pursuant to Section 5(b) of the 

Operating Agreement of DGHC by the 

Warrant Holder or the Class B Limited 

Partner(s), as applicable; provided, 

however, that in no event may the board 

of managers consist of more than five 

managers unless not fewer than forty 

percent (40%) are appointed by the 

Warrant Holder or the Class B Limited 

Partner(s), as applicable. DGC will 

appoint the members of DGHC’s board 

of managers; provided, however, that 

until and unless the Warrant Holder 

exercises its rights under the Warrant 

and purchases any Class B Limited 

Partner Units, DGC will delegate to the 

Warrant Holder the right to appoint two 

(2) of the members of DGHC’s board of 

managers (or such greater number as 

required by Section 5(b)(ii) of the 

Operating Agreement of DGHC) and, 

upon the purchase by the Warrant 

Holder of any Class B Limited Partner 

Units pursuant to the Warrant, DGC will 

delegate to the Class B Limited 

Partner(s) the right to appoint two (2) of 

the members of DGHC’s board of 

managers (or such greater number as 

required by Section 5(b)(ii) of the 

Operating Agreement of DGHC). If there 

is more than one Class B Limited 

Partner, then the right to appoint two (2) 

of the members of DGHC’s board of 

managers (or such greater number as 

required by Section 5(b)(ii) of the 

Operating Agreement of DGHC) will be 

vested solely in the Class B Limited 

Partner that supervises editorial and 

reportorial functions of the Mail 

pursuant to Section V H hereof. The 

Warrant Holder or the Class B Limited 

Partner(s), as applicable, may not 

appoint any person who is, at the time 

of his or her appointment, an employee 

of the Joint Venture, DGC, DGHC, the 

Limited Partnership or DGPC to 

represent it on DGHC’s board of 

managers. 

II. The Joint Venture 

A. Continuation of Joint Venture. By 

this JOA, the Limited Partnership and 

DGPC shall continue the conduct of a 

joint venture for the publication of the 

Newspapers; provided (1) that there 

shall continue to be no merger, 

combination or amalgamation of the 

editorial or reportorial staff of Gazette 

and Gazette-Mail, on the one hand, and 

Mail, on the other hand, (2) that CPC 

shall continue to independently 

determine the editorial, news policy and 

content of Mail and (3) that DGHC shall 

continue to independently determine 

the editorial, news policy and content of 

Gazette and Gazette-Mail. 

B. Name and Place of Business. The 

Joint Venture shall continue to be 

conducted under the name ‘‘Charleston 

Newspapers’’ from its place of business 

at 1001 Virginia Street, East, City of 

Charleston, County of Kanawha, State of 

West Virginia. 

C. Ownership of and Title to Property. 

All of the parties hereto hereby confirm 

and agree that the ownership of and title 

to all real property and all tangible 

personal property used in and useful to 

the Joint Venture is exclusively in the 

Joint Venture rather than in any other 

party to this JOA, jointly or 

individually, and without regard to 

whether any property was contributed 

by any party to this JOA to the Joint 

Venture, was otherwise made available 

to the Joint Venture by any party to this 

JOA or was otherwise acquired by the 

Joint Venture, except that certain 

property is owned by G.M. Properties, 

Inc., a West Virginia corporation, of 

which all the outstanding shares are 

owned by the Joint Venture. 

D. Revenues, Expenses and 

Obligations. The Joint Venture shall 

receive all income and revenues of the 

Joint Venture and shall pay all expenses 

incurred or assumed by it. No party 

hereto shall be or shall become liable 

upon any contract or other obligation of 

the Joint Venture or any other party 

hereto, unless such party shall expressly 

assume such contract or other obligation 

or liability is imposed by law. 

E. Management of Joint Venture. 

Subject to the provisions of this JOA 

concerning the editorial independence 

of the Newspapers and such other 

limitations as are expressly set forth in 

this JOA or the Limited Partnership 

Agreement, the Limited Partnership 

shall have complete authority over and 

exclusive control and management of 

the business and affairs of the Joint 

Venture. The Limited Partnership may 

delegate such general or specific 

authority to the officers and employees 

of the Joint Venture with respect to the 

business and day-to-day operations of 

the Joint Venture as it may from time to 

time consider desirable, and the officers 

and employees of the Joint Venture may 

exercise the authority granted to them. 

The Joint Venture shall indemnify, 

defend and hold harmless DGPC and the 

Limited Partnership and its partners 

(and their respective shareholders, 

members, partners, directors, managers, 

officers, employees and agents) from 

any liability, loss or damage suffered by 

them by reason of any act or omission 

by them in connection with the business 

of the Joint Venture; provided, however, 

that indemnification shall not be 

available for any claim that results from 

the willful misconduct of such person 

or the breach by such person of its 

obligations under this JOA or other 

agreements to which such person may 

be subject. The Limited Partnership 

shall not be liable, in damages or 

otherwise, to the Joint Venture or its 

direct or indirect partners for any act or 

omission in the absence of willful 

misconduct. 

III. Editorial Independence 

Preservation of the editorial 

independence of the Newspapers is the 

essence of this JOA. DGHC and CPC 

each agree to strictly maintain the 

separateness of their respective limited 

liability company and corporate 

identities, as the case may be, and to 

retain the editorial independence of 

Gazette and Gazette-Mail, on the one 

hand, and Mail, on the other hand. CPC 

agrees that neither it nor any affiliate 

shall have any connection with the 

news or editorial operations of Gazette 

or Gazette-Mail. The separate editorial 

and reportorial staffs of Gazette and 

Gazette-Mail, on the one hand, and 

Mail, on the other hand, shall be 

independent and shall not be merged, 

combined or amalgamated, and their 

editorial policies shall be independently 

determined. DGHC agrees that neither it 

nor any affiliate shall have any 

connection with the news or editorial 

operations of Mail. Actions of DGHC 

with respect to Mail shall be confined 

exclusively to its role as General Partner 

of the Limited Partnership and in such 

role to cause the Joint Venture to print, 

sell and distribute the Newspapers, and 

to solicit and sell advertising space 

therein, and to perform such other 

functions as are described in this JOA. 

IV. Term 

Unless sooner terminated in 

accordance with the terms hereof, this 

JOA shall continue in effect from the 

date hereof through the close of 

business on June 30, 2024. This JOA 

shall thereupon be automatically 

renewed for additional five-year terms 

unless any party hereto gives written 

notice to the contrary to each of the 

other parties hereto at least 12 months 

prior to the end of the then-current 

term. 

V. Continuing Operations 

A. General. On and after the date 

hereof the Joint Venture shall control, 

supervise, manage and perform all 

operations (other than the news and 

editorial operations of the Newspapers) 

involved in producing, printing, selling 


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and distributing the Newspapers; to 

determine press runs, press times, page 

sizes and cutoffs of the Newspapers; to 

determine whether supplemental 

products will be distributed in or with 

one or more Newspapers, including 

whether and how certain products will 

be distributed to non-subscribers; to 

purchase newsprint, materials and 

supplies as required; to solicit and sell 

advertising space in the Newspapers; to 

collect the Newspapers’ circulation and 

advertising accounts receivable; to 

provide or make available to each 

Newspaper such parking, subscriptions, 

messenger services, and data processing 

services as are reasonable and 

appropriate (the costs for which shall be 

borne by the Joint Venture and which 

shall not be an Editorial Expense); and 

to make all determinations and 

decisions and do any and all acts and 

things necessarily connected with the 

foregoing activities, including 

maintaining insurance coverage that is 

normal and appropriate for similarlysituated businesses. The parties 

recognize that DGHC as General Partner 

of the Limited Partnership shall have 

general charge and supervision of the 

business of the Newspapers, but shall 

treat each of the Newspapers as separate 

and distinct editorial products, and 

shall have no duties or authority with 

respect to the news or editorial 

functions of Mail. 

B. Production. On and after the date 

hereof, the Joint Venture shall print the 

Newspapers on equipment owned or 

leased by the Joint Venture in plant or 

plants located at such place or places as 

the Joint Venture may determine, and 

all operations under this JOA, except 

the operation of the Newspapers’ 

editorial departments, shall be carried 

on and performed by the Joint Venture 

with equipment from the Joint Venture’s 

plant or plants or by independent 

contractors or agents selected by the 

Joint Venture. During the term of this 

JOA, CPC agrees to produce Mail’s 

editorial and news copy, and DGHC 

agrees to produce Gazette’s and GazetteMail’s editorial and news copy, on 

equipment which is provided by the 

Joint Venture or which is compatible 

with the equipment used by the Joint 

Venture in its production facilities. 

C. Advertising and Circulation. 

(1) In general and subject to the 

exceptions set forth in clauses (a) 

through (d) below, the Joint Venture 

shall have complete control of and the 

right to determine the advertising and 

circulation rates for each of the 

Newspapers, and the Joint Venture shall 

use its reasonable efforts to sell 

advertising space in each Newspaper 

and to sell, promote and distribute each 

Newspaper as widely as practicable, 

consistent, however, with the objective 

of enhancing the overall economic 

performance of the Joint Venture and 

the Newspapers considered together in 

a manner that does not have a material 

adverse impact on the cash flow of the 

Joint Venture and the ability of the Joint 

Venture to make on a timely basis the 

cash distributions to the Limited 

Partnership and the payments to CPC 

contemplated by Section V J (1) through 

(4) hereof. 

(a) The Joint Venture may not reduce 

the primary circulation area of Mail as 

of August 1, 2009 without CPC’s 

approval. 

(b) For a six month period 

commencing within a reasonable time 

after the date hereof, the Joint Venture 

will promote Mail by offering 

subscriptions at a 50% discounted rate. 

This promotion will be applicable solely 

to Mail. 

(c) Except as set forth in clause (b) 

above or as otherwise approved by CPC, 

the Joint Venture will offer the same 

promotions for Mail and Gazette to 

potential subscribers. 

(d) The Joint Venture will not 

discriminate against Mail in advertising, 

promotions or other sales or marketing 

efforts. 

(2) The Joint Venture shall be free to 

select and alter from time to time the 

national advertising representative(s) for 

each of the Newspapers and the 

commission payable to such national 

advertising representative(s) and any 

other terms of such arrangement(s) shall 

be determined by the Joint Venture; 

provided, however that the Joint 

Venture will not discriminate against 

Mail in advertising, promotions or other 

sales or marketing efforts. 

(3) The Joint Venture will pay to each 

of the Publisher of Mail and the 

Circulation Director of the Joint Venture 

a bonus for increases in Mail’s average 

daily paid print circulation (as stated in 

the most recent six month audit 

conducted by the Audit Bureau of 

Circulations or other reputable third 

party media auditor). If the average 

daily paid print circulation of Mail for 

a six month audit period is greater than 

the average daily paid print circulation 

for the immediately preceding six 

month audit period, the bonus will be 

$3.00 per each additional subscriber and 

will be paid within a reasonable time 

after the Joint Venture receives the 

applicable six month audit. 

D. Publication Schedule. DGHC shall 

publish Gazette daily on weekdays and 

Saturday mornings and Gazette-Mail on 

Saturday and Sunday mornings, and 

CPC shall publish Mail daily on 

weekday mornings. The Joint Venture 

will not change the press deadlines, 

delivery targets, number of editions and 

days of publication of Mail without 

CPC’s approval. If at any time DGHC 

determines in the good faith exercise of 

business judgment as General Partner of 

the Limited Partnership that the 

continuation of any scheduled 

publication of any edition(s) of Gazette 

or Gazette-Mail is no longer in the best 

interests of those Newspapers and the 

Joint Venture considered together, then, 

subject to the Newspaper Preservation 

Act, 15 U.S.C. 1801 et seq. (the ‘‘Act’’), 

within thirty days after written notice 

by the Limited Partnership to CPC, the 

scheduled publication of such edition(s) 

may be discontinued. The Joint Venture 

will not discontinue publication of Mail 

without CPC’s approval unless (i) the 

incremental revenue from Mail fails to 

cover Mail’s incremental costs and the 

discontinuation of Mail can be effected 

by satisfying the failing firm test as 

applicable to joint operating agreement 

newspapers under the Act and (ii) the 

U.S. Department of Justice approves the 

discontinuation of publication of Mail. 

E. Office Space and Equipment. On 

and after the date hereof, the Joint 

Venture shall furnish reasonably 

adequate office space for the separate 

use of the editorial departments of the 

Gazette, on the one hand, and Mail on 

the other hand. Such space shall be 

furnished with furniture and equipment 

which in the Joint Venture’s reasonable 

judgment is sufficient and 

technologically adequate for each 

Newspaper’s news and editorial 

operations. 

F. Other Services. The parties 

recognize that in addition to the 

operations with respect to the 

Newspapers contemplated by this JOA, 

the Joint Venture may also utilize its 

production and other facilities, 

personnel, and agents for any other 

lawful activities it may deem 

appropriate, including distributing 

news, advertising or other information 

to non-subscribers; distributing or 

making available all or a portion of the 

information or advertising in the 

Newspapers to subscribers by means of 

electronic distribution, microfilm, 

microfiche or mail; commercial 

printing, including commercial printing 

of other newspapers; distribution 

services; and any other activities not 

inconsistent with its principal business; 

provided, however, that such activities 

shall not unreasonably interfere with 

the printing or distribution of the 

Newspapers. 

G. Future Purchases. On and after the 

date hereof, subject to Section V H, the 

Joint Venture shall be responsible for 

the purchase of all inventory, supplies, 


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equipment and services as it deems to 

be necessary or desirable in connection 

with the operation of the Newspapers 

and other functions as are described in 

this JOA. In the event of shortages of 

inventory, supplies, equipment or 

services, no Newspaper shall be unfairly 

favored or discriminated against as 

regards the other. 

H. News and Editorial Matters. DGHC 

and CPC shall furnish complete news 

and editorial services necessary and 

appropriate for the publication of their 

respective Newspapers in the manner 

provided in this JOA. 

(1) Each of DGHC and CPC shall have 

complete and exclusive control and 

direction of the editorial department 

and editorial policies of its respective 

Newspapers and shall be responsible for 

and shall bear all of its respective 

Editorial Expense (as defined below). 

Without limiting the generality of the 

foregoing, each of DGHC and CPC shall 

have the exclusive right to determine 

the editorial format, dress, makeup and 

news and feature content of its 

respective Newspapers (including the 

content of all advertisements and 

advertising matter), and each shall have 

complete control and authority over the 

editors and editorial department staff of 

its respective Newspapers (including 

the exclusive authority to determine the 

number, identity and salaries of the 

editorial department of its respective 

Newspapers and to make hiring and 

firing decisions, so long as the Editorial 

Expense for each Newspaper does not 

exceed the budgeted amount for such 

Newspaper for the applicable year 

determined in accordance with Section 

V J(8) below). The term ‘‘editorial 

department’’ as used herein shall 

include the news, editorial, editorial 

promotion and photographic functions 

of the applicable Newspaper. DGHC and 

CPC each recognize the importance of 

the editorial quality of their respective 

Newspapers and each of them agrees to 

use reasonable efforts to provide 

editorial products for their Newspapers 

which are compatible with the needs of 

the Charleston, West Virginia area 

newspaper market and to preserve with 

respect to their Newspapers a high 

standard of newspaper quality and 

journalistic excellence. 

(2) The amount of reading content 

(sometimes known as ‘‘news hole’’) and 

the amount of color usage of each of the 

Newspapers shall be determined by the 

board of managers of the Limited 

Partnership during the annual budgeting 

process; provided, however, that the 

news hole and color usage allocations 

will be budgeted at the same level for 

both Mail and Gazette. Each Newspaper 

may elect to publish pages in excess of 

their news hole and/or exceed the 

amount of color usage determined for 

such Newspapers by the Joint Venture, 

provided the Joint Venture has the 

production capacity to accommodate 

such excesses. However, if any of the 

Newspapers exceeds its budgeted news 

hole allocation or color usage, then any 

newsprint and other production costs 

attributable to such excess shall be 

borne by such Newspaper, and upon 

being invoiced therefor by the Joint 

Venture, DGHC or CPC, as appropriate, 

shall reimburse the Joint Venture for 

such expense. If, from time to time 

following the determination by the Joint 

Venture of the news hole allocation, the 

Joint Venture shall require a greater 

news hole allocation for one or more 

editions of one or more of the 

Newspapers, the Newspapers shall have 

no obligation to reimburse the Joint 

Venture for any additional expense the 

Joint Venture may incur as a 

consequence thereof, and the Joint 

Venture shall reimburse the Newspapers 

promptly upon being invoiced therefor 

for any additional expenses the 

Newspapers may incur as a 

consequence thereof. 

(3) DGHC, independently of CPC, 

shall develop standards for determining 

the acceptability of advertising copy for 

publication in Gazette and Gazette-Mail. 

CPC, independently of DGHC and the 

Joint Venture, shall develop standards 

for determining the acceptability of 

advertising copy for publication in Mail. 

(4) Except as provided otherwise 

herein, the term ‘‘Editorial Expense’’ as 

used in this JOA shall mean all costs 

and expenses associated with the news 

and editorial departments of each 

Newspaper, including but not limited 

to: (a) Compensation, including payroll 

taxes, retirement, pension, health and 

death benefits, worker’s compensation 

insurance and group insurance of news 

and editorial employees; (b) severance 

pay of news and editorial employees; (c) 

travel and other expenses of news and 

editorial employees; (d) press 

association assessments and charges; (e) 

charges for news services and editorial 

wire services; (f) charges for the right to 

publish news and editorial features, 

daily or weekly comics and other 

editorial material of every kind and 

character; (g) the cost of news and 

editorial materials, printing, stationery, 

office supplies and postage for the news 

and editorial department; (h) donations; 

(i) the cost of editorial promotions; (j) 

telegraphic, telephone, long-distance 

telephone and internet access charges of 

the news and editorial departments; (k) 

charges for the purchase, rental, repair 

and maintenance of editorial 

department cameras and related 

photographic equipment (provided, 

however, that the term ‘‘Editorial 

Expense’’ shall not include any cost, 

charge or expense related to any camera 

or other equipment made available to 

the editorial departments of the 

Newspapers pursuant to Section V E of 

this JOA, or to any equipment that is an 

integral part of the production process 

even though located in the news and/or 

editorial department of a Newspaper, or 

related to any editorial department 

capital assets owned by either 

Newspaper); (l) the cost of liability 

insurance and insurance with respect to 

libel and right of privacy and similar 

hazards; and (m) the cost of any 

Charleston, West Virginia based 

executive-level management of Mail. 

Notwithstanding the foregoing, the 

following shall not be included in the 

term ‘‘Editorial Expense’’ and shall be 

separately borne by the Newspaper 

which incurs them: (i) Certain 

uninsured liabilities for published or 

excluded material as provided in 

Section VII B, (ii) costs for excess news 

hole allocation or color usage as 

provided in Section V H(2), (iii) costs 

related to material changes from 

present, usual or customary practices as 

provided in Section V H(5), (iv) any 

interest, indebtedness, amortization, 

organizational costs or other costs or 

expenses relating to Mail and (v) except 

as described in (m) above, any portion 

of any salaries, expenses, overhead or 

corporate allocation attributable to any 

non-Charleston, West Virginia based 

ownership, management or supervision 

of Mail. 

(5) All Editorial Expense of the 

editorial departments of Gazette and 

Gazette-Mail shall be borne by DGHC, 

and all Editorial Expense of the editorial 

department of Mail shall be borne by 

CPC; provided, however, that costs 

resulting from any material change by 

any Newspaper from its present, usual 

or customary practices that result in 

additional future newsprint, production 

or other costs to be incurred on the part 

of the Joint Venture shall be borne by 

such Newspaper, and upon being 

invoiced therefor by the Joint Venture, 

DGHC or CPC, as appropriate, shall 

reimburse the Joint Venture for such 

costs. 

I. Accounting Matters. The Joint 

Venture shall cause to be maintained 

full and accurate books of account and 

records showing all transactions 

hereunder. Such books and records 

shall be kept on the basis of a year 

ending December 31 and under the 

accounting methods currently employed 

by DGC in accordance with generally 

accepted accounting principles, and 

shall at all times be kept at the principal 


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place of business of the Joint Venture. 

The independent auditors of the Joint 

Venture shall be the independent 

auditors of DGC. Any changes in 

accounting method shall be consistent 

with accepted accounting principles 

and with changes made generally by 

DGC, and CPC shall receive prompt 

notice of any such changes that could 

reasonably be expected to have an 

adverse effect on its interests under this 

JOA or the Limited Partnership 

Agreement. CPC and its respective 

authorized agents or representatives 

shall have access to and may inspect 

such books and records at any time and 

from time to time during ordinary 

business hours. Statements shall be 

rendered and settlements under this 

JOA shall be made on a monthly basis 

on the 15th day following the end of 

each monthly accounting period, with 

annual adjustments as soon as 

practicable at the conclusion of each 

year during the term of this JOA. An 

annual statement shall be furnished by 

the Joint Venture to the Limited 

Partnership not later than the 31st day 

of March of each year, summarizing in 

reasonable detail and fairly reflecting 

the transactions and the results of 

operations under this JOA during the 

preceding year. All payments shown to 

be due by CPC, DGHC or the Joint 

Venture shall be paid within thirty (30) 

days after the delivery of the applicable 

statement. 

J. Distributions to Partners. 

(1) For each year of this JOA, the Joint 

Venture shall distribute to the Limited 

Partnership cash equal to the amount 

actually expended or accrued as a 

current liability in accordance with 

generally accepted accounting 

principles by CPC for Editorial Expenses 

during such year; provided, however, 

that the amount distributed by the Joint 

Venture to the Limited Partnership 

pursuant to this Section V J(1) shall not, 

in respect of any year, exceed the 

budgeted amount for such year 

determined by the Joint Venture in 

accordance with Section V J(8) below; 

and provided further that the amount to 

be distributed by the Joint Venture to 

the Limited Partnership shall be 

reduced by any obligation of CPC to 

reimburse the Joint Venture for 

expenses paid by the Joint Venture on 

behalf of CPC. The Limited Partnership 

shall in turn distribute such net amount 

to CPC. 

(2) If, for any year, with the prior 

written concurrence of the Joint 

Venture, CPC makes a permanent 

reduction in its editorial workforce in 

accordance with the requirements of 

applicable laws, regulations and 

agreements, and if and to the extent the 

severance costs associated with such 

reduction are not included in CPC’s 

applicable budgeted Editorial Expenses 

for such year determined in accordance 

with Section V J(8) below, then (a) the 

Joint Venture shall, in addition to the 

cash amounts described in subsection 

(1) above, distribute to the Limited 

Partnership in cash an amount equal to 

that portion of such severance costs that 

is reasonable and required to be 

incurred for such year pursuant to 

applicable laws, regulations or 

agreements, and that in any event does 

not exceed the costs DGHC would have 

incurred if DGHC had made 

corresponding reductions. 

(3) The distributions described in 

subsection (1) above shall be made on 

a monthly basis in increments of 1/12 of 

the applicable budgeted amount 

determined by the Joint Venture, subject 

to adjustment by the Joint Venture at the 

end of each year so that such aggregate 

distributions for the year are in such 

amounts as the Joint Venture shall 

determine (based on such records and 

evidence as the Joint Venture may 

request from CPC) are equal to the 

amounts expended or accrued by CPC 

for such year as provided in Section V 

J(8), but no greater than the budgeted 

Editorial Expenses of Mail for such year. 

The distributions described in 

subsection (2) above shall also be made 

on a monthly basis and shall be in such 

amounts as the Joint Venture shall 

determine (based on such records and 

evidence as the Joint Venture may 

request from CPC) are equal to the 

amounts expended or accrued by CPC 

for such period within the applicable 

budget amounts, with such subsequent 

adjustment as may be appropriate. 

(4) In addition to the distributions to 

the Limited Partnership and, in turn, to 

CPC provided for in Sections V J(1)–(3) 

above, there also shall be paid to CPC 

a fee for its services in the management 

and supervision of the news and 

editorial operations of the Mail. The 

management fee shall be paid on May 7 

of each year during the term of this JOA 

(each date a ‘‘Payment Date’’). The 

amount of the management fee payable 

on May 7, 2010 shall be $225,000. For 

each Payment Date after May 7, 2010, 

the management fee payable to CPC 

shall be $225,000 adjusted to reflect the 

aggregate change since May 7, 2010 in 

the Consumer Price Index. The 

‘‘Consumer Price Index’’ for purposes of 

this JOA shall mean ‘‘The Consumer 

Price Index for All Urban Consumers 

(CPI–U) for the U.S. City Average for All 

Items, 1982–84 = 100’’ released by the 

U.S. Department of Labor, Bureau of 

Labor Statistics, or any similar 

replacement index. For each Payment 

Date after May 7, 2010, the management 

fee payable to CPC shall also be adjusted 

annually on a non-cumulative basis as 

follows: 

(a) If Mail’s average daily paid print 

circulation for the most recent 12 month 

audited period exceeds the average 

daily paid print circulation for the 

immediately preceding 12 month 

audited period by more than 1%, the 

management fee payable on such 

Payment Date will be increased by 

$25,000. 

(b) If Mail’s average daily paid print 

circulation for the most recent 12 month 

audited period is the same as the 

average daily paid print circulation for 

the immediately preceding 12 month 

audited period or if Mail’s average daily 

paid print circulation for the most 

recent 12 month audited period exceeds 

the average daily paid print circulation 

for the immediately preceding 12 month 

audited period by 1% or less, the 

management fee payable on such 

Payment Date will be increased by 

$10,000. 

(c) If Mail’s average daily paid print 

circulation for the most recent 12 month 

audited period decreases by 1% or less 

from the average daily paid print 

circulation for the immediately 

preceding 12 month audited period, the 

management fee payable on such 

Payment Date will be decreased by 

$10,000 (provided that in no event will 

the management fee payable on any 

Payment Date be reduced to an amount 

below $225,000). 

(d) If Mail’s average daily paid print 

circulation for the most recent 12 month 

audited period decreases by more than 

1% from the average daily paid print 

circulation for the immediately 

preceding 12 month audited period, the 

management fee payable on such 

Payment Date will be decreased by 

$25,000 (provided that in no event will 

the management fee payable on any 

Payment Date be reduced to an amount 

below $225,000). 

For purposes of the adjustments 

described in clauses (a) through (d) 

above, Mail’s average daily paid print 

circulation will be determined based on 

12 month audits conducted by the Audit 

Bureau of Circulations or other 

reputable third party media auditor. 

(5) Except for the foregoing 

distributions to the Limited Partnership, 

and except for such cash as the Limited 

Partnership may from time to time 

determine is necessary or desirable to 

retain in the Joint Venture for working 

capital purposes, the Joint Venture shall 

(subject to any applicable contractual 

restrictions under the Joint Venture’s 

financing arrangements) distribute all 

remaining cash (including without 


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limitation the proceeds from any sale or 

disposition of Joint Venture capital 

assets) equally to the Limited 

Partnership and DGPC. Such 

distributions shall be made from time to 

time as determined by the Limited 

Partnership, but no such distributions 

shall be made at any time when the 

Joint Venture is not current in making 

the distributions to the Limited 

Partnership and the payments to CPC 

described in Section V J(l) through (4) 

hereof. 

(6) Pending the distributions 

contemplated by this Section V J, DGHC 

shall be authorized to manage the Joint 

Venture’s cash pursuant to the 

corporate-wide policies of DGC. 

(7) All income, gain, profits, losses, 

and expenses of the Joint Venture shall 

be allocated between the Limited 

Partnership and DGPC in proportion to 

the cash distributed to them pursuant to 

this Section V J. 

(8) For each year of this JOA, the 

budgeted Editorial Expenses for Mail 

and Gazette shall be in amounts 

determined by the board of managers of 

DGHC and approved by at least 75% of 

the members of the board of managers 

(i.e., if the board consists of four 

members, not fewer than three members 

must vote in favor, and if the board 

consists of five members, not fewer than 

four members must vote in favor); 

provided, however that for Mail’s 2010 

annual Editorial Expense budget the 

staffing level in Mail’s news and 

editorial departments will be budgeted 

at thirty-two (32) full time employees. 

Any Editorial Expense budget may be 

adjusted by action of the board of 

managers of DGHC (subject to the 75% 

supermajority voting requirement) from 

time to time during the course of a year 

of this JOA to take appropriate account 

of developments in products or 

technologies, material changes in any 

Newspaper’s editorial workforce, or 

other material changes which may occur 

relative to any Newspaper’s operations 

or circulation in any given year. 

VI. Termination 

A. Termination. 

(1) If DGHC or CPC defaults by failing 

to make any payment hereunder when 

due or by otherwise failing to fulfill in 

any material respect any of its 

obligations under this JOA and the party 

in default does not correct its default 

within ninety (90) days after receipt 

from the other of written notice 

specifying the default, then the nondefaulting party may, at its election, 

terminate this JOA upon ninety (90) 

days’ prior written notice. 

(2) If publication of Mail is 

discontinued in accordance with the 

terms of this JOA or the Limited 

Partnership is dissolved, terminated and 

liquidated, this JOA shall terminate. 

B. Action After Termination. 

(1) It is understood that, as soon as 

practicable after the termination of this 

JOA by lapse of time or otherwise, the 

Limited Partnership shall, subject to the 

prior satisfaction of the claims of all 

creditors (other than the partners of the 

Limited Partnership) and the payment 

of the fee provided in Section V J(4), 

distribute to CPC, the Mail masthead, all 

trademarks, copyrights, trade names, 

service names and service marks of the 

Mail, the Mail subscriber and advertiser 

lists, print and electronic archives of the 

Mail, associated web sites and URLs 

(including ‘‘dailymail.com’’) and all 

legal rights associated with these assets, 

subject to such dispositions, additions 

or substitutions relating thereto which 

may have occurred in the ordinary 

course of the operations of the Limited 

Partnership or the Joint Venture or in 

satisfaction of the claims of creditors 

subsequent to the formation of the 

Limited Partnership, including, in 

particular, any and all lists of 

subscribers to Mail, together with copies 

of any contracts with such subscribers 

relating to Mail and any executory 

contracts for the purchase of advertising 

in Mail, free and clear of any lien, 

encumbrance, right or interest 

(including any option or any license or 

other right of use) of or in favor of a 

third party, transfer restriction 

(including any right of first offer or 

refusal or similar provision) or any other 

similar right or interest whatsoever. 

(2) Upon the termination of this JOA 

by lapse of time or otherwise, the Joint 

Venture shall dissolve and shall 

distribute its assets as follows: 

(a) That portion of any distributions to 

which the Limited Partnership may be 

entitled but which has not yet been 

distributed for the period up to the date 

of termination pursuant to Section V J(1) 

through (3) hereof, shall be distributed 

to the Limited Partnership. 

(b) All other assets of the Joint 

Venture shall be distributed equally to 

DGPC and the Limited Partnership. 

(3) A partial accounting and partial 

settlement under this JOA shall be made 

as promptly as practicable and a final 

accounting and final settlement shall be 

made not later than the 31st day of 

March of the year following the year in 

which this JOA is terminated. 

VII. Miscellaneous Provisions 

A. Certain Liabilities; Force Majeure. 

Except as otherwise provided in this 

JOA, no party shall be charged with or 

held responsible for any contract, debt, 

claim, demand, damage, suit, action, 

obligation or liability arising by reason 

of any act or omission on the part of any 

other party, and no party shall be liable 

to any other for any failure or delay in 

performance under this JOA occasioned 

by war, riot, act of God or the public 

enemy, strike, labor dispute, shortage of 

any supplies, failure of supplier or 

workmen, or any cause beyond the 

control of the party required to perform, 

and such failure or delay shall not be 

considered a default hereunder. 

B. Liabilities for Published or 

Excluded Material. The Joint Venture 

shall obtain insurance to insure each of 

the Newspapers against liability for libel 

and right of privacy in such amount as 

it deems appropriate, with the 

premiums for such insurance being an 

Editorial Expense as provided in 

Section V H(4). However, the entire cost 

and expense of defending, settling, 

paying and discharging any liability or 

other claim which is not covered by the 

libel insurance obtained by the Joint 

Venture (excluding any such cost or 

expense which is not covered as a result 

of the application of any deductible 

amount or co-payment requirement 

provided under the insurance policy) 

for Gazette and Gazette-Mail on account 

of anything published in or excluded 

from Gazette or Gazette-Mail, or arising 

by reason of anything done or omitted 

to be done by the editorial departments 

thereof, shall be borne by DGHC; and 

any similar cost and expense on account 

of anything published in or excluded 

from Mail, or arising by reason of 

anything done or omitted to be done by 

the editorial department thereof, shall 

be borne by CPC. DGHC and CPC each 

agree to indemnify and hold the other 

party, the Joint Venture and the Limited 

Partnership harmless against any cost, 

expense or liability which such other 

party, the Joint Venture or the Limited 

Partnership may suffer or incur as a 

result of any such action or inaction for 

which the indemnifying party is 

responsible as provided above. 

C. Contravention of Law. Nothing 

contained in this JOA shall be construed 

to permit any party acting jointly or by 

unified action to engage in any 

predatory pricing, predatory practice or 

any other conduct which would be 

unlawful under any antitrust law as 

engaged in by any single entity. The 

parties hereto further mutually agree 

that if any part or provision of this JOA 

shall hereafter become, or be 

determined by action in any proper 

court to be, in contravention of law, this 

JOA shall not thereby be considered or 

adjudged to be a nullity, but that all 

parties shall, and each hereby agrees, 

immediately to take, or authorize such 

action to be taken, to reform this JOA, 


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or to modify, alter or supplement any of 

its provisions, as may be necessary to 

permit the intention and purpose of the 

parties hereto to be properly and 

lawfully carried out. 

D. Further Assurances. From time to 

time on and after the date hereof, each 

of the parties hereto will execute all 

such instruments and take all such 

actions as the other party shall 

reasonably request in connection with 

carrying out and effectuating the 

intention and purpose hereof and all 

transactions and things contemplated by 

this JOA, including, without limitation, 

the execution and delivery of any and 

all confirmatory and other instruments 

and the taking of any and all actions 

which may reasonably be necessary or 

desirable to complete the transactions 

contemplated thereby. 

E. Assignments and Transfers. 

(1) Except as authorized under the 

Limited Partnership Agreement, CPC 

may not sell, assign or transfer 

(including any pledge or 

hypothecation), any of its rights or 

interests under this JOA or pertaining to 

the Joint Venture or the Limited 

Partnership or the Newspapers to any 

person without the prior written 

consent of DGHC, which shall not be 

unreasonably withheld. Without 

limiting the generality of the foregoing, 

except as authorized under the Limited 

Partnership Agreement, a controlling 

interest in the capital stock of CPC may 

not be sold, assigned or transferred to 

any person without the prior written 

consent of DGHC, which shall not be 

unreasonably withheld. No consent of 

DGHC shall be required for a transfer 

relative to the Limited Partnership or 

any interests therein that is expressly 

authorized and made in compliance 

with the transfer provisions under the 

Limited Partnership Agreement, and, 

the foregoing transfer restrictions shall 

not apply to any transfer of any right or 

interest under this JOA or pertaining to 

the Joint Venture or the Newspapers to 

MNG or an affiliate of MNG so long as 

MNG or an affiliate of MNG holds and 

maintains, directly or indirectly, voting 

control of such transferee following 

such transfer. CPC acknowledges and 

agrees that DGHC’s ability to grant 

consent to a transfer is circumscribed by 

certain contractual restrictions under 

the Joint Venture’s financing 

arrangements and the withholding of 

consent by DGHC in order to comply 

with these contractual restrictions will 

not be considered unreasonable. 

(2) DGC, DGHC, the Limited 

Partnership, DGPC and the Joint 

Venture may, without the consent of 

CPC, sell, assign or transfer a part or all 

or substantially all of the assets of 

Gazette and Gazette-Mail as a going 

concern to any person and assign a part 

or all of their rights and obligations 

under this JOA to the purchaser thereof, 

or sell, assign or transfer part or all of 

their direct or indirect interests in 

DGHC, the Limited Partnership, DGPC 

and the Joint Venture to any person, so 

long as (1) at the time of such sale the 

Joint Venture is current in the 

distributions required to be made to the 

Limited Partnership and the payments 

required to be made to CPC pursuant to 

Section V J(1) through (4) hereof, and (2) 

the purchaser assumes (in the case of an 

assets sale) all of the obligations of the 

assignors pursuant to this JOA. In the 

event DGC, DGHC, the Limited 

Partnership, DGPC or the Joint Venture 

engages in an assets sale contemplated 

by this Section VII E, they shall, 

effective on the closing thereof, be 

released and discharged from any 

further liability under this JOA. No 

consent of CPC shall be required for (i) 

a pledge by DGC, DGHC, the Limited 

Partnership, DGPC or the Joint Venture 

of their rights under this JOA or their 

direct or indirect interests in DGHC, the 

Limited Partnership, DGPC and the Joint 

Venture to the Joint Venture’s lenders 

for security purposes or a transfer of 

such interests and rights pursuant to 

any foreclosure action by the Joint 

Venture’s lenders or any transfer in lieu 

of foreclosure. 

F. Other Ventures. Neither DGC nor 

any Partner of the Limited Partnership 

may engage in other ventures in the 

Charleston, West Virginia market that 

are competitive with that of the Limited 

Partnership or any of its Subsidiaries 

(including the Joint Venture). For 

purposes of this Section VII F, any 

competitive venture undertaken by an 

affiliate of a Partner in the Charleston, 

West Virginia market will be deemed to 

be a competitive venture undertaken by 

such Partner. 

G. Entire Agreement. This JOA 

amends and restates the Prior JVA in its 

entirety. 

H. Notices. All notices, requests, 

demands, claims and other 

communications which may or are to be 

given hereunder or with respect hereto 

shall be in writing, shall be given either 

by personal delivery, facsimile or by 

certified or special express mail or 

recognized overnight delivery service, 

first class postage prepaid, or when 

delivered to such delivery service, 

charges prepaid, return receipt 

requested, and shall be deemed to have 

been given or made when personally 

received by the addressee, addressed as 

follows: 

(1) If to CPC, to: 

Affiliated Media, Inc., 101 W. Colfax 

Avenue, Suite 1100, Denver, CO 

80202. Attn: Joseph J. Lodovic, IV 

President, Facsimile: (303) 954–6320. 

With a copy to: 

Hughes Hubbard & Reed LLP, One 

Battery Park Plaza, New York, New 

York 10004. Attn: James Modlin, 

Facsimile: (212) 422–4726. 

or such other addresses as CPC may 

from time to time designate. 

(2) If to DGC, DGHC, DGPC, the Joint 

Venture or the Limited Partnership, to: 

Daily Gazette Company, 1001 Virginia 

Street, East, Charleston, WV 25301. 

Attn: Ms. Elizabeth E. Chilton, 

President, Facsimile: (304) 348–5180. 

And 

Attn: Mr. Norman Watts Shumate III, 

Facsimile: (304) 348–1795. 

With a copy to: 

Baker & Hostetler LLP, 1050 

Connecticut Avenue, NW., Suite 

1100, Washington, DC 20036. Attn: 

Lee H. Simowitz, Facsimile: (202) 

861–1783. 

or such other addresses as DGHC, DGC, 

DGPC, the Joint Venture or the Limited 

Partnership may from time to time 

designate. 

I. Announcements/Disclosures. The 

parties agree that, except as required by 

law, and then only upon the maximum 

advance notice to the other parties 

which is practicable under the 

circumstances, they will make no public 

announcement concerning this JOA and 

the transactions contemplated hereby 

prior to the first mutually agreed upon 

announcement thereof without the 

consent of the other parties as to the 

form, content, and timing of such 

announcement or announcements. 

J. Headings. Titles, captions or 

headings contained in this JOA are 

inserted only as a matter of convenience 

and for reference and in no way define, 

limit, extend or describe the scope of 

this JOA or the intent of any provisions 

hereof. 

K. Governing Law. This JOA shall be 

construed and enforced in accordance 

with the internal laws of the State of 

West Virginia. 

L. Modifications. This JOA shall be 

amended only by an agreement in 

writing and signed by the party against 

whom enforcement of any waiver, 

modification or discharge is sought 

(subject to any applicable contractual 

restrictions under the Joint Venture’s 

financing arrangements). 

M. Specific Performance. In addition 

to any other remedies the parties may 

have, each party shall have the right to 

enforce the provisions of this JOA 


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through injunctive relief or by a decree 

or decrees of specific performance. 

N. No Third Party Beneficiaries. 

Nothing in this JOA, express or implied, 

shall give to anyone other than the 

parties hereto (and the parties entitled 

to indemnification hereunder) and their 

respective permitted successors and 

assigns any benefit, or any legal or 

equitable right, remedy or claim, under 

or in respect of this JOA. 

O. Nature of Relationship. Nothing 

contained in this JOA shall constitute 

the parties hereto as alter egos or joint 

employers or as having any relationship 

other than as specifically provided 

herein and in any other agreement to 

which they are subject. DGHC and CPC 

each will retain and be responsible for 

(and will indemnify the other parties, 

the Joint Venture and the Limited 

Partnership against) all of their 

respective debts, obligations, liabilities, 

and commitments which have not been 

expressly assumed by the Joint Venture 

pursuant to this JOA or the Limited 

Partnership, or for which the Joint 

Venture was not already liable under 

the Prior JVA. 

O. Survival. The expiration or 

termination of this JOA shall not 

abrogate the rights and obligations of the 

parties under Section VII(B) or any other 

provision of this JOA that contemplates 

actions to be taken after the expiration 

or termination of this JOA. 

P. Dispute Resolution. The terms of 

Exhibit A attached hereto, which 

include provisions related to the 

procedures pursuant to which the 

parties shall resolve any disputes, 

claims or controversies arising under, 

out of or in connection with this JOA 

are incorporated herein by this reference 

as if set out herein in full. 

DAILY GAZETTE COMPANY 

By: llllllllllllllll

Title: lllllllllllllll

DAILY GAZETTE HOLDING 

COMPANY, LLC 

By: Daily Gazette Company, Sole 

Member 

By: llllllllllllllll

Title: lllllllllllllll

CHARLESTON PUBLISHING 

COMPANY 

By: llllllllllllllll

Title: lllllllllllllll

CHARLESTON NEWSPAPERS 

By: Charleston Newspapers Holdings, 

L.P., General Partner 

By: Daily Gazette Holding Company, 

LLC, General Partner 

By: Daily Gazette Company, Sole 

Member 

By: llllllllllllllll

Title: lllllllllllllll

DAILY GAZETTE PUBLISHING 

COMPANY, LLC 

By: Charleston Newspapers Holdings, 

L.P., Sole Member 

By: Daily Gazette Holding Company, 

LLC, General Partner 

By: Daily Gazette Company, Sole 

Member 

By: llllllllllllllll

Title: lllllllllllllll

CHARLESTON NEWSPAPERS 

HOLDINGS, L.P. 

By: Daily Gazette Holding Company, 

LLC, General Partner 

By: Daily Gazette Company, Sole 

Member 

By: llllllllllllllll

Title: lllllllllllllll

Exhibit A to Amended and Restated 

Joint Operating Agreement 

Dispute Resolution 

(a) Any dispute, claim or controversy 

arising under, out of, in connection with 

or relating to this JOA, or any course of 

conduct, course of dealing, statements 

(oral or written), or actions of any party 

relating to this JOA, including any claim 

based on or arising from an alleged tort 

(each, a ‘‘Dispute’’), shall be resolved 

solely in the following manner: 

(i) Pre-arbitration procedures. 

(A) Each party shall cause one of its 

senior officers to first meet with the 

other party’s senior officer and attempt 

to resolve the Dispute by agreement. 

(B) Failing resolution, either party 

may submit to the other party a written 

request for non-binding mediation. 

Within ten (10) business days after such 

written request is made, the parties shall 

attempt to agree on a single mediator. If 

the parties cannot agree on a mediator 

within such period, either party may 

proceed to implement the arbitration 

provisions of clause (a)(ii) below. 

(C) Mediation shall take place at the 

place or places and at the time or times 

set by the mediator, but shall not be 

held in public. The rules of procedure, 

evidence and discovery with respect to 

any mediation shall be as directed by 

the mediator. Neither party may be 

represented at hearings before the 

mediator by an attorney but the parties 

may consult with counsel outside the 

hearing room and counsel may assist in 

preparing any written materials to be 

used in the mediation, including 

statements and briefs. 

(D) The mediator shall facilitate 

communications between the parties 

and assist them in attempting to reach 

a mutually acceptable resolution of the 

Dispute by agreement. The mediator 

shall make no binding determinations, 

findings, or decisions. 

(E) The mediator’s expenses shall be 

borne equally by the parties. 

(F) At any point in the mediation 

process after the initial meeting with the 

mediator, either party may declare in 

writing that an impasse exists, and 

thereafter either party may proceed to 

implement the arbitration provisions of 

clause (a)(ii) below. If the parties have 

not resolved their dispute pursuant to 

the provisions of this clause (a)(i) within 

thirty (30) days after appointment of the 

mediator, the parties shall immediately 

proceed to implement the arbitration 

provisions of clause (a)(ii) below. 

(ii) Arbitration. 

(A) All Disputes between the parties 

that are not resolved under clause (a)(i) 

above shall be finally resolved by 

arbitration in accordance with the rules 

of JAMS (or its successor) described 

below, subject to the limitations of this 

clause (a)(ii). 

(B) Except as provided in clause 

(a)(ii)(C), with respect to a Dispute in 

which the claim, counterclaim or 

amount in controversy does not exceed 

Two Hundred Fifty Thousand Dollars 

($250,000) (a ‘‘Minor Dispute’’), a single 

arbitrator shall decide the Minor 

Dispute in accordance with the JAMS 

Streamlined Arbitration Rules and 

Procedures then in effect (the 

‘‘Streamlined Rules’’). In the event the 

parties are unable to agree upon an 

arbitrator, the arbitrator shall be 

appointed by JAMS under the 

Streamlined Rules. The arbitrator shall 

determine the Minor Dispute in 

accordance with the terms of this JOA 

and the laws designated in Section VII 

K of the JOA and shall have authority 

to render a maximum award of Two 

Hundred Fifty Thousand Dollars 

($250,000), including all damages of any 

kind and costs, fees and the like. 

(C) With respect to a Dispute in which 

(x) the claim, counterclaim or amount in 

controversy exceeds Two Hundred Fifty 

Thousand Dollars ($250,000), or (y) the 

resolution of the Dispute may give a 

party a right to terminate this JOA 

(‘‘Major Dispute’’), any such Major 

Dispute shall be decided by a majority 

vote of three arbitrators. In the event the 

parties are unable to agree on the three 

arbitrators, the three arbitrators shall be 

appointed by JAMS under the JAMS 

Comprehensive Arbitration Rules and 

Procedures then in effect (the 

‘‘Comprehensive Rules’’). The three 

arbitrators shall determine the Major 

Dispute in accordance with the terms of 

this JOA and the laws designated in 

Section VII K of this JOA. The majority 

of the three arbitrators may grant any 

award, remedy or relief (‘‘Award’’) that 

they deem just and equitable and within 

the scope of this JOA. The majority of 


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the arbitrators may also grant such 

ancillary relief as is necessary to make 

effective the Award, including 

injunctive relief and/or specific 

performance. In all arbitration 

proceedings in connection with a Major 

Dispute, the arbitrators shall make 

specific, written findings of fact and 

conclusions of law. In all Major 

Disputes, the parties shall, in addition 

to the limited statutory right to seek 

vacation or modification of any Award 

pursuant to applicable law, have the 

right to seek vacation or modification of 

any Award that is based in whole, or in 

part, on an incorrect or erroneous ruling 

of law by appeal to an appropriate court 

having jurisdiction; provided, however, 

that any application for vacation or 

modification of an Award based on an 

incorrect ruling of law must be filed in 

a court having jurisdiction pursuant to 

clause (c) below within thirty (30) days 

from the date the Award is rendered. 

The findings of fact made by the 

arbitrators shall be binding on all parties 

and shall not be subject to further 

review except as otherwise allowed by 

applicable law. 

(D) The non-prevailing party, as 

determined by the arbitrator or 

arbitrators, shall be required to pay all 

of the arbitrator’s fees and shall 

reimburse the prevailing party for any 

advances made by such party in respect 

of such fees. 

(E) The arbitrator(s) shall not have the 

power to award (i) damages inconsistent 

with this JOA or (ii) punitive damages 

or any other damages not measured by 

the prevailing party’s actual damages, 

and the parties expressly waive their 

right to obtain such damages in 

arbitration or in any other forum. In no 

event, even if any other portion of these 

provisions is held to be invalid or 

unenforceable, shall the arbitrator(s) 

have power to make an award or impose 

a remedy that could not be made or 

imposed by a court deciding the matter 

under the law designated in Section VII 

K of this JOA. 

(F) The arbitrator(s) shall have the 

authority to order the parties to produce 

documents or things for inspection and 

to provide appropriate discovery to each 

other, including the depositions of 

witnesses and the exchange of expert 

reports. 

(G) Neither the parties nor any 

arbitrator may disclose the existence, 

content or results of the arbitration, 

except as necessary to enforce an Award 

or comply with legal or regulatory 

requirements. Before making any such 

disclosure, a party shall give written 

notice to all other parties and shall 

afford these parties a reasonable 

opportunity to protect their interests. 

(H) Except as otherwise provided in 

clause (a)(ii)(C) above, the result of the 

arbitration will be binding on the 

parties, and judgment on the arbitrator’s 

Award may be entered in a court 

designated in clause (c) below. 

(I) At the request of either party, 

arbitration proceedings shall include an 

oral hearing for the presentation of oral 

testimony and oral argument. Written 

presentations may also be received. The 

parties shall have the right to crossexamine witnesses, if requested. The 

arbitrator(s) shall have the authority to 

administer oaths and to issue orders 

requiring the presence of witnesses at 

the hearing if consistent with the law 

designated in Section VII K of this JOA, 

or to apply to a court designated in 

clause (c) below to issue such orders. 

(J) All arbitration hearings will be 

commenced within sixty (60) days of 

demand for arbitration by any party, 

provided, upon a showing of cause, the 

arbitrator or arbitrators may extend the 

commencement of such hearing for up 

to an additional thirty (30) days. 

(b) Limitations on Arbitration 

Requirement. 

(i) No provision of, nor the exercise of 

any rights under, this JOA regarding 

arbitration shall limit the right of either 

party to join the other party in litigation 

in the event of any litigation or 

proceeding commenced by any third 

party against a party to this JOA in 

which the other party is an 

indispensable party or potential third 

party defendant (e.g., where such other 

party may be obligated to indemnify the 

defendant in such third party action). 

(ii) No provision of, nor the exercise 

of any rights under, this JOA regarding 

arbitration shall limit the right of either 

party to seek provisional or ancillary 

judicial remedies with respect to any 

Dispute, such as preliminary injunctive 

relief, sequestration, attachment, 

garnishment, or the appointment of a 

receiver from a court having jurisdiction 

before, during or after the pendency of 

any arbitration. The institution and 

maintenance of an action for such 

judicial remedies shall not constitute a 

waiver of the right of any party, 

including the claimant in such action, to 

submit to arbitration nor render 

inapplicable the compulsory arbitration 

provisions hereof. 

(iii) Nothing in this JOA shall be 

deemed to limit applicability of any 

otherwise applicable statutes of 

limitation and any waivers contained in 

this JOA. No provision in this Exhibit 

regarding submission to jurisdiction 

and/or venue in any court is intended 

or shall be construed to be in derogation 

of the provisions in this Exhibit for 

arbitration of any Dispute. 

(c) WITH RESPECT TO ANY SUIT, 

ACTION OR PROCEEDING RELATING 

TO ANY AWARD OR ANY ACTION, 

INCLUDING A SUMMARY OR 

EXPEDITED PROCEEDING, TO 

COMPEL ARBITRATION OF ANY 

DISPUTE TO WHICH THIS EXHIBIT 

APPLIES, AND FOR ANY OTHER 

MATTER SO DESIGNATED IN THIS 

EXHIBIT, EACH PARTY 

IRREVOCABLY (1) CONSENTS AND 

SUBMITS TO THE EXCLUSIVE 

JURISDICTION OF ANY UNITED 

STATES FEDERAL COURT OR WEST 

VIRGINIA STATE COURT SITTING IN 

THE CITY OF CHARLESTON IN THE 

STATE OF WEST VIRGINIA, (2) 

WAIVES ANY OBJECTION THAT IT 

MAY HAVE AT ANY TIME TO THE 

LAYING OF VENUE OF ANY SUCH 

SUIT, ACTION OR PROCEEDING 

BROUGHT IN SUCH COURT, (3) 

WAIVES ANY CLAIM THAT ANY 

SUCH SUIT, ACTION OR PROCEEDING 

BROUGHT IN ANY SUCH COURT HAS 

BEEN BROUGHT IN AN 

INCONVENIENT FORUM, (4) WAIVES 

THE RIGHT TO OBJECT, WITH 

RESPECT TO ANY SUCH CLAIM, SUIT, 

ACTION OR PROCEEDING BROUGHT 

IN ANY SUCH COURT, THAT SUCH 

COURT DOES NOT HAVE 

JURISDICTION OVER THE PARTY, 

AND (5) WAIVES ALL RIGHT TO 

TRIAL BY JURY. 

Put/Call Agreement 

PUT/CALL AGREEMENT, dated as of 

llllllll (the ‘‘Effective Date’’), 

among DAILY GAZETTE HOLDING 

COMPANY, LLC, a limited liability 

company organized under the laws of 

the State of Delaware (‘‘DGHC’’); 

CHARLESTON NEWSPAPERS 

HOLDINGS, L.P., a limited partnership 

organized under the laws of the State of 

Delaware (the ‘‘Limited Partnership’’); 

and llllllll, a 

llllllll (the ‘‘Class B 

Partner’’). 

Recitals 

Whereas, the parties desire to enter 

into this Agreement to set forth certain 

agreements with respect to the Class B 

Partner’s ownership of its Class B 

Limited Partner Units, including put 

rights and call rights; 

Now, Therefore, in consideration of 

the foregoing and the mutual covenants 

and agreements set forth herein, the 

parties agree as follows: 

Article I 

Definitions 

1.1 Definitions. The following terms 

used in this Agreement have the 


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meanings given such terms in this 

Section 1.1: 

‘‘Affiliate’’ means, with respect to any 

Person, any other Person that directly or 

indirectly through one or more 

intermediaries controls, is controlled by 

or is under common control with such 

first-named Person. 

‘‘Agreement’’ means this Put/Call 

Agreement, as it may be amended, 

restated, modified or supplemented 

from time to time in accordance with its 

terms. 

‘‘Buyer’’ has the meaning given such 

term in Section 3.1(a). 

‘‘Call’’ has the meaning given such 

term in Section 5.1(b). 

‘‘Call Notice’’ has the meaning given 

such term in Section 5.1(b). 

‘‘Class B Limited Partner’’ has the 

meaning given such term in Section 

1.1.12 of the Limited Partnership 

Agreement. 

‘‘Class B Limited Partner Unit’’ has the 

meaning given such term in Section 

1.1.14 of the Limited Partnership 

Agreement. 

‘‘CPC’’ means Charleston Publishing 

Company, a Delaware corporation. 

‘‘DGC’’ means Daily Gazette Company, 

a corporation organized under the laws 

of the State of West Virginia. 

‘‘DGHC’’ has the meaning given such 

term in the Preamble. 

‘‘Drag-Along Notice’’ has the meaning 

given such term in Section 4.1(a). 

‘‘Drag-Along Right’’ has the meaning 

given such term in Section 4.1(a). 

‘‘Election Notice’’ has the meaning 

given such term in Section 6.1. 

‘‘Fair Market Value of the Partnership’’ 

has the meaning given such term in 

Section 5.2.3 of the Limited Partnership 

Agreement. 

‘‘General Partner’’ means DGHC and 

any successor General Partner. 

‘‘General Partner Unit’’ has the 

meaning given such term in Section 

1.1.18 of the Limited Partnership 

Agreement. 

‘‘JOA’’ means the Second Amended 

and Restated Joint Operating Agreement 

dated as of the date hereof, by and 

among DGC, DGHC, the Joint Venture, 

the Limited Partnership, Daily Gazette 

Publishing Company, LLC, a Delaware 

limited liability company, and CPC. 

‘‘Joint Venture’’ means Charleston 

Newspapers, a West Virginia 

unincorporated joint venture. 

‘‘Limited Partnership Agreement’’ 

means that certain Amended and 

Restated Limited Partnership Agreement 

for Charleston Newspapers Holdings, 

L.P. dated as of __________, 2009, by 

and among DGHC and CPC, as such 

agreement may be amended, restated, 

modified or supplemented from time to 

time in accordance with its terms. 

‘‘New Units’’ means any Units offered 

by the Limited Partnership after the date 

of this Agreement. 

‘‘Partner’’ means any Person admitted 

as a Partner of the Limited Partnership 

in accordance with the provisions of the 

Limited Partnership Agreement. 

‘‘Permitted Transferee’’ means any 

other Person that directly or indirectly 

succeeds to any or all of its Class B 

Limited Partner Units in accordance 

with the provisions of this Agreement 

and Article VI of the Limited 

Partnership Agreement and is admitted 

as a Partner in accordance with the 

provisions of Article VI of the Limited 

Partnership Agreement. 

‘‘Person’’ means any individual, 

general partnership, limited 

partnership, corporation, limited 

liability company, limited liability 

partnership, joint venture, trust, 

business trust, cooperative, association, 

governmental agency or a division or 

subdivision of any of the foregoing, and 

the heirs, executors, administrators, 

legal representatives, successors and 

assigns of such Person where the 

context so permits. 

‘‘Pro Rata Portion’’ means the Class B 

Partner’s Percentage Interest in the 

Limited Partnership (as defined in the 

Limited Partnership Agreement). 

‘‘Residual Class B Partner Percentage’’ 

means, as of any date, the percentage of 

the aggregate distributions by the 

Limited Partnership to the General 

Partner and the Class B Partner that the 

Class B Partner would be entitled to 

receive under Section 7.3 of the Limited 

Partnership Agreement if (i) the Limited 

Partnership were to sell its assets at the 

Fair Market Value of the Partnership, (ii) 

income, gain, loss and deduction arising 

from such sale were allocated among the 

Partners in accordance with Section 

5.2.3 of the Limited Partnership 

Agreement, but without giving effect to 

any allocation of income or gain 

attributable to the Tax Gross-Up 

Amount (as defined in the Limited 

Partnership Agreement), and (iii) the 

Limited Partnership were then 

liquidated on such date, taking into 

account all unrealized appreciation or 

decline in value of the assets of the 

Limited Partnership, and assuming all 

reserves were distributed. 

‘‘Subsidiary’’ means any Person 

(including the Joint Venture) that is 

controlled by the Limited Partnership. 

‘‘Tax-Adjusted Residual Class B 

Partner Percentage’’ means, as of any 

date, the percentage of the aggregate 

distributions by the Limited Partnership 

to the General Partner and the Class B 

Partner that the Class B Partner would 

be entitled to receive under Section 7.3 

of the Limited Partnership Agreement if 

(i) the Limited Partnership were to sell 

its assets at the Fair Market Value of the 

Partnership, (ii) income, gain, loss and 

deduction arising from such sale were 

allocated among the Partners in 

accordance with Section 5.2.3 of the 

Limited Partnership Agreement, and 

(iii) the Limited Partnership were then 

liquidated on such date, taking into 

account all unrealized appreciation or 

decline in value of the assets of the 

Limited Partnership, and assuming all 

reserves were distributed. 

‘‘Taxes’’ means any and all taxes, fees, 

duties, tariffs, imposts and other charges 

of any kind imposed by any government 

or taxing authority, including, without 

limitation: federal, state, local, or 

foreign income, gross receipts, windfall 

profits, severance, property, ad valorem, 

sales, use, license, excise franchise, 

capital, transfer, recordation, 

employment, withholding, or other tax 

or governmental assessment. 

‘‘Tax Interest’’ means any interest, 

additions, or penalties with respect to 

Taxes and any interest in respect of 

such additions or penalties. 

‘‘Unit’’ means an undivided share of 

the interests in the Limited Partnership 

of all the Partners, which include the 

General Partner Units and Class B 

Limited Partner Units. 

‘‘Unpaid Tax Liabilities’’ means the 

sum of (i) all unpaid Transfer Tax 

Liabilities, plus (ii) all unpaid Taxes of 

the Class B Partner due and owing (but, 

in the case of any Tax attributable to 

income or gain allocated to the Class B 

Partner by the Limited Partnership, only 

to the extent that such Tax would have 

been paid by the Class B Partner if the 

Class B Partner had used the full 

amount of all distributions received by 

it from the Limited Partnership after 

such Tax became due and payable to 

pay such Tax and all other Taxes arising 

thereafter), plus Tax Interest attributable 

thereto. 

Article II 

Restriction on Transfer 

2.1 Restriction on Transfer of Class 

B Limited Partner Units. 

(a) Permitted Transfer. Except as 

otherwise specifically provided in 

Section 2.1(c), the Class B Partner shall 

have the right to sell, exchange, transfer, 

pledge, hypothecate, assign or otherwise 

dispose of (any of the foregoing 

transactions referred to herein as a 

‘‘Transfer’’) all or any part of its Class B 

Limited Partner Units to any Person. 

(b) Transfer to an Affiliate. The Class 

B Partner shall be permitted to Transfer 

its Class B Limited Partner Units to an 

Affiliate of the Class B Partner and to 

assign its Class B Limited Partner Units 


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and its rights under this Agreement as 

collateral security to Persons extending 

financing to such Limited Partner or any 

of their Affiliates (and such Persons may 

at any time foreclose on such security 

interest). 

(c) Restriction on Transfer. 

Notwithstanding anything contained in 

Sections 2.1(a) or 2.1(b) to the contrary, 

the Class B Partner shall not have the 

right to Transfer all or any part of its 

Class B Limited Partner Units to any 

Person that is, or that is an Affiliate of 

a Person that is, a publisher of a general 

circulation daily newspaper (other than 

a newspaper published by the Joint 

Venture) whose principal newsroom is 

located in Kanawha County, West 

Virginia, or Putnam County, West 

Virginia; provided, however, that the 

foregoing restriction shall not apply to 

a publisher of a general circulation daily 

newspaper with a circulation market 

share in Kanawha and Putnam Counties 

of 5% or less. Any Transfer that is made 

in violation of this Section 2.1(c) shall 

not be permitted and shall be null and 

void for all purposes. 

(d) Transfer Tax Liabilities. Upon a 

Transfer of any Class B Limited Partner 

Units by the Class B Partner pursuant to 

this Section 2.1, the Class B Partner 

and/or the transferee of such Class B 

Limited Partner Units shall be liable for 

all Taxes and Tax Interest, resulting 

from such Transfer (‘‘Transfer Tax 

Liabilities’’) and shall not be entitled to 

receive any tax distributions under the 

Limited Partnership Agreement in 

respect thereof (provided that this 

Section 2.1(d) shall not affect the Class 

B Partner’s rights to receive 

distributions in accordance with the 

Limited Partnership Agreement). 

(e) Transfer in Compliance with the 

Limited Partnership Agreement; 

Agreement to be Bound by this 

Agreement. No Transfer may be made 

pursuant to this Section 2.1 unless such 

Transfer is also made in accordance 

with Article VI of the Limited 

Partnership Agreement and, without 

limiting the generality of the foregoing, 

the transferee of any Class B Limited 

Partner Units pursuant to this Section 

2.1, if not already a party to this 

Agreement, shall execute and deliver an 

agreement to the General Partner by 

which it agrees to become a party to this 

Agreement, assume all of the obligations 

hereunder of its transferor with respect 

to the Class B Limited Partner Units 

transferred to it and be bound by the 

terms and conditions hereof in the same 

manner as the transferor with respect to 

such Units. Without limiting the 

generality of the foregoing, any and all 

Class B Limited Partner Units 

transferred pursuant to this Section 2.1 

shall remain subject to, and shall enjoy 

the rights under, the Tag-Along Right, 

Drag-Along Right, Put and Call 

provisions set forth in Articles III, IV 

and V hereof and the Class B Limited 

Partner shall continue to have the Class 

B Partner Board Right set forth in 

Article VII hereof and the Limited 

Partnership Agreement. No Transfer 

may be made pursuant to this Section 

2.1 unless such Transfer is also made in 

accordance with all applicable laws, 

including federal and state securities 

laws. 

Article III 

Tag-Along Rights 

3.1 Tag-Along Rights 

(a) If the General Partner proposes to 

Transfer any General Partner Units 

(‘‘Transferor Units’’), to one or more 

Persons who is not an Affiliate of the 

General Partner (each such Person, a 

‘‘Buyer’’), then, as a condition to such 

transfer, the General Partner shall cause 

the Buyer to include an offer (the ‘‘TagAlong Offer’’) to the Class B Partner to 

purchase from the Class B Partner, at the 

option of the Class B Partner, that 

number of Class B Limited Partner Units 

as determined in accordance with 

Section 3.1(b), on the same terms and 

conditions as are applicable to the 

Transferor Units (with the portion of the 

purchase price payable to the Class B 

Partner being the aggregate amount of 

the purchase price for all Units included 

in such sale multiplied by the TaxAdjusted Residual Class B Partner 

Percentage). The General Partner shall 

provide a written notice (the ‘‘Tag-Along 

Notice’’) of the Tag-Along Offer to the 

Class B Partner, which may accept the 

Tag-Along Offer by providing a written 

notice of acceptance of the Tag-Along 

Offer to the General Partner within 

thirty (30) days of the delivery of the 

Tag-Along Notice. Subject to Section 

3.1(e), if the Class B Partner fails to 

accept a Tag Along Offer within thirty 

(30) days of delivery of the Tag-Along 

Notice, the Class B Partner shall cease 

to have any rights hereunder with 

respect to such Tag-Along Offer. 

(b) The Class B Partner shall have the 

right (a ‘‘Tag-Along Right’’) to sell 

pursuant to the Tag-Along Offer the 

percentage of its Class B Limited Partner 

Units then held equal to the percentage 

of General Partner Units proposed to be 

sold by the General Partner (which 

percentage of General Partner Units may 

be reduced in the sole discretion of the 

General Partner and the Buyer). 

(c) The Class B Partner’s Tag-Along 

Right shall not apply to any (i) pledge 

by the General Partner of Units for 

security purposes under any bona fide 

loan transaction; (ii) Transfer of Units 

pursuant to a foreclosure action under 

any bona fide loan transaction; or (iii) 

Transfer of Units by the General Partner 

to an Affiliate. If the General Partner 

Transfers any General Partner Units to 

an Affiliate of the General Partner, such 

Affiliate transferee shall become a party 

to and be bound by the terms of this 

Agreement to the same extent as the 

General Partner. 

(d) If the Class B Partner fails to 

accept a Tag-Along Offer within thirty 

(30) days of delivery of the Tag-Along 

Notice, the Buyer shall have one 

hundred twenty (120) days, 

commencing on the thirtieth (30th) day 

after delivery of the Tag-Along Notice to 

the Class B Partner, in which to 

purchase on terms no more favorable to 

the transferor than the terms set forth in 

the Tag-Along Offer from the General 

Partner the number of Transferor Units 

with respect to which the Tag-Along 

Notice was delivered. If such purchase 

and sale is not consummated on terms 

no more favorable to the transferor than 

the terms set forth in the Tag-Along 

Offer within such one hundred twenty 

(120) day period, any Transfer of the 

Transferor Units shall again be subject 

to the provisions of this Section 3.1. 

(e) The provisions of this Section 3.1 

shall apply to a sale of any membership 

interest in the General Partner to the 

same extent as such provisions apply to 

a sale of Units by the General Partner. 

Article IV 

Drag-Along Rights 

4.1 Drag-Along Rights. In the event 

the General Partner proposes to Transfer 

all of its General Partner Units for cash, 

in a single transaction or a series of 

related transactions, to a Person that is 

not an Affiliate of the General Partner, 

the General Partner shall have the right 

(the ‘‘Drag-Along Right’’) to cause the 

Class B Partner to sell all of its Class B 

Limited Partner Units to such Person on 

the same terms and conditions as the 

General Partner proposes to Transfer its 

General Partner Units (with the portion 

of the purchase price payable to the 

Class B Partner being the aggregate 

amount of the purchase price for all 

Units included in such sale multiplied 

by the Tax-Adjusted Residual Class B 

Partner Percentage). The General Partner 

may exercise its Drag-Along Right by 

giving written notice of such exercise 

(the ‘‘Drag-Along Notice’’) to the Class B 

Partner not fewer than ten (10) days 

prior to the consummation of the 

Transfer that is the subject of the DragAlong Right. The Drag-Along Notice 

shall contain a copy of any definitive 

documentation pursuant to which 


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Transfer is to be made and will state the 

name and address of the purchaser and 

the anticipated closing date of such 

Transfer. Upon delivery of the DragAlong Notice, the Class B Partner shall 

be obligated to Transfer and deliver its 

Class B Limited Partner Units on the 

terms and conditions applicable to the 

Transfer and shall use commercially 

reasonable efforts to cooperate in the 

Transfer and take all necessary actions 

to enter into appropriate Transfer or 

transaction documents. The Class B 

Partner’s indemnification obligations 

under the transaction documents 

governing a Transfer pursuant to this 

Section 4.1 shall be limited to the 

amount of any portion of the proceeds 

paid for the Class B Limited Partner 

Units sold in such transaction that is 

held in escrow for such purpose and not 

paid to the Class B Partner, such 

transaction documents shall not require 

the Class B Partner to make any 

representations other than those with 

respect to the Class B Partner’s 

ownership of and its ability to Transfer 

the Class B Limited Partner Units to be 

sold in such transaction and any 

indemnification obligations shall be 

limited to breach of such 

representations only. 

Article V 

Put and Call Rights 

5.1 Put and Call Rights. 

(a) Class B Partner Put Right. Upon 

the cessation of the publication of The 

Charleston Daily Mail, the Class B 

Partner shall be required to sell to the 

General Partner (or an Affiliate or 

designee thereof) and the General 

Partner (or an Affiliate or designee 

thereof), shall be required, subject to the 

terms and conditions set forth in this 

Agreement, to purchase from the Class 

B Partner all, but not less than all, of the 

Class B Limited Partner Units. 

Additionally, at any time from and after 

the termination of the JOA by lapse of 

time or otherwise and/or dissolution 

and/or termination of the Joint Venture 

or upon the occurrence of any event 

which constitutes or results in a Change 

of Control (as defined below) of the Joint 

Venture, the Class B Partner shall have 

the right to sell to the General Partner 

(or an Affiliate or designee thereof) and 

the General Partner (or an Affiliate or 

designee thereof), shall be required, 

subject to the terms and conditions set 

forth in this Agreement, to purchase 

from the Class B Partner all, but not less 

than all, of the Class B Limited Partner 

Units. The obligation or right to sell and 

obligation to buy set forth in the 

preceding two sentences shall be 

referred to herein as the ‘‘Put’’. With 

respect to the Put described in the 

second sentence of this Section 5.1(a), if 

the Class B Partner elects to exercise the 

Put, it shall send written notice thereof 

to the General Partner (the ‘‘Put Notice)’’. 

The General Partner’s designation of an 

Affiliate or other designee to purchase 

the Class B Limited Partner Units in 

connection with the exercise of the Put 

will not relieve the General Partner of 

its obligations hereunder. For purposes 

of this Section, ‘‘Change of Control’’ 

means any event, transaction or 

occurrence as a result of which DGC 

ceases to control the General Partner, 

and ‘‘control’’ means the possession, 

direct or indirect, of the power to direct 

or cause the direction of the 

management and policies of a person, 

whether through the ownership of 

voting securities, by contract, or 

otherwise. 

(b) General Partner Call Right. At any 

time from and after the termination of 

the JOA by lapse of time or otherwise 

and/or the dissolution and/or 

termination of the Joint Venture, the 

General Partner (or an Affiliate or 

designee thereof) shall have the right to 

purchase from the Class B Partner, and 

the Class B Partner shall be required, 

subject to the terms and conditions set 

forth in this Agreement, to sell to the 

General Partner (or an Affiliate or 

designee thereof), all, but not less than 

all, of the Class B Limited Partner Units 

(such right to purchase, the ‘‘Call’’. If the 

General Partner elects to exercise the 

Call, it shall send written notice thereof 

to the Class B Partner (the ‘‘Call Notice’’). 

(c) Purchase Price. The purchase price 

to be paid to the Class B Partner upon 

the exercise of the Put or Call (the ‘‘Put/ 

Call Purchase Price’’) shall be equal to 

(A) the amount that would be 

distributed to the Class B Partner under 

Section 7.3 of the Limited Partnership 

Agreement if the Limited Partnership 

were to sell its assets on the Put/Call 

Closing Date for the Fair Market Value 

of the Partnership and the income, gain, 

loss and deduction arising from such 

sale were allocated among the Partners 

in accordance with Section 5.2.3 of the 

Limited Partnership Agreement, but 

without giving effect to any allocation of 

income or gain attributable to the Tax 

Gross-Up Amount (as defined in the 

Limited Partnership Agreement), and 

the Limited Partnership were then 

liquidated in accordance with Article 

VII of the Limited Partnership 

Agreement on the Put/Call Closing Date, 

minus (B) the amount of any Unpaid 

Tax Liabilities or other outstanding 

liabilities of the Class B Partner (other 

than liabilities for Taxes and Tax 

Interest). The Fair Market Value of the 

Partnership shall be determined as of 

the Put/Call Closing Date by mutual 

agreement of the General Partner and 

the Class B Partner or by appraisals in 

accordance with the terms hereof. In the 

event the General Partner and the Class 

B Partner do not agree on the Fair 

Market Value of the Partnership within 

twenty days, then within fifteen days of 

the expiration of such twenty-day 

period (or such longer period as the 

General Partner and the Class B Partner 

mutually agree), each of the General 

Partner and the Class B Partner shall 

select a nationally recognized appraiser 

with experience in the newspaper 

industry to prepare, using the 

methodology described in Exhibit A 

attached hereto, a written appraisal 

setting forth such appraiser’s 

determination of the Fair Market Value 

of the Partnership. If either the General 

Partner and the Class B Partner fail to 

so appoint an appraiser within such 

fifteen-day period, then its right to do so 

shall lapse and the appraisal made by 

the one appraiser who is timely 

appointed shall be the Fair Market 

Value of the Partnership. If two 

appraisals are made, unless the higher 

of the two appraisals is more than 110% 

more than the lower appraisal, the Fair 

Market Value of the Partnership will be 

the average of the two appraisals, and if 

the higher of the two appraisals is more 

than 110% more than the lower of the 

appraisals, the General Partner and the 

Class B Partner shall jointly select a 

third appraiser, and the Fair Market 

Value will be the average of the two of 

the three appraisals that are closest 

together in amount. All appraisals will 

be made within twenty days of 

appointment of such appraiser and must 

separately identify the amount of each 

of the items described in clauses (i) 

through (vi) of Section 5.2.3(b) of the 

Limited Partnership Agreement. A 

written notice of the results of each such 

appraisal shall be given to the General 

Partner and the Class B Partner. The 

General Partner and the Class B Partner 

will each pay the fees of the appraiser 

selected by it, and the General Partner 

and the Class B Partner will share 

equally the fees of the third appraiser, 

if any. The General Partner and each 

Member will cooperate fully with each 

appraiser’s attempt to determine the 

Fair Market Value of the Partnership. 

(d) Closing. The closing of the 

transaction pursuant to the exercise of 

the Put or Call, as the case may be, shall 

take place at the principal offices of the 

Limited Partnership no later than the 

thirtieth (30th) day following the final 

determination of the Put/Call Purchase 

Price; provided that such date shall be 

extended as necessary and for so long as 


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necessary to permit the parties to 

comply with applicable law to obtain all 

regulatory approvals, if any, necessary 

to consummate such transaction (such 

30th day, as it may be extended, the 

‘‘Put/Call Closing Date’’). The General 

Partner shall be responsible (solely at 

the General Partner’s expense) for 

obtaining all approvals and consents 

necessary to permit the General Partner 

and Class B Partner to consummate such 

transactions (other than any such 

approvals or consents that are unique to 

the Class B Partner). Each party agrees 

to use its commercially reasonable 

efforts to cooperate in obtaining any 

regulatory approvals necessary to 

consummate such transaction as 

promptly as possible. If the closing of 

the transaction pursuant to the exercise 

of the Put has not occurred by the tenth 

(10th) day after the Put/Call Closing 

Date, the General Partner shall pay to 

the Class B Partner at the closing 

interest in an amount equal to 14.5% of 

the Put/Call Purchase Price accruing 

daily on the basis of a 360-day year and 

compounding at the end of each 90-day 

period after the Put/Call Closing Date. 

At the closing of the Put or Call, as the 

case may be, the General Partner shall 

pay the Put/Call Purchase Price and any 

interest accrued thereon to the Class B 

Partner in cash or immediately available 

funds and the Class B Partner shall 

deliver instruments, in form and 

substance reasonably satisfactory to the 

General Partner, assigning all of its 

interest in the Class B Limited Partner 

Units to the General Partner free and 

clear of all liens, claims and 

encumbrances of any nature whatsoever 

(other than those arising under this 

Agreement, the Limited Partnership 

Agreement or the JOA or in favor of any 

lender(s) to the Limited Partnership or 

any of its Subsidiaries) against payment 

of the Put/Call Purchase Price therefor. 

Article VI 

Preemptive Rights 

6.1 Class B Partner Preemptive 

Rights. Prior to issuing any New Units 

to any Person (‘‘New Unit Offerees’’), the 

Limited Partnership shall offer (the 

‘‘New Unit Offer’’) the Class B Partner an 

opportunity to purchase all or a portion 

of its Pro Rata Portion of such New 

Units upon the same terms and 

conditions offered to the New Unit 

Offerees, The Limited Partnership shall 

make such New Unit Offer by providing 

the Class B Partner with notice (the 

‘‘New Unit Notice’’) setting forth: (i) The 

Class B Partner’s Pro Rata Portion of 

such New Units; (ii) the consideration to 

be paid for each of the New Units; and 

(iii) all other material terms of such New 

Units. The Class B Partner may elect to 

accept the New Unit Offer by delivering 

written notice of its acceptance to the 

Limited Partnership within thirty (30) 

days after delivery of the New Unit 

Notice (the ‘‘Election Notice’’) setting 

forth the number of New Units the Class 

B Partner wishes to purchase. If the 

Class B Partner elects to purchase all or 

a portion of its Pro Rata Portion of such 

New Units, the sale thereof shall be 

consummated on the closing date 

applicable to all New Unit Offerees. In 

the event the Class B Partner elects not 

to exercise its right pursuant to this 

Section 6.1, fails to timely give an 

Election Notice or fails to purchase the 

New Units allocated to it at the closing 

designated therefor by the Limited 

Partnership, the Class B Partner shall 

cease to have any rights hereunder with 

respect to such New Unit Offer, 

provided that if there is any material 

change to the terms of the New Unit 

Offer following such non-exercise or 

failure, the Class B Partner’s rights 

under this Section 6.1 will be reinstated. 

6.2 Issuance of New Units. In the 

event the Limited Partnership issues 

any New Units for no consideration or 

for consideration which is less than the 

fair market value of such New Units at 

the time of sale (as mutually determined 

by the General Partner and the Class B 

Partner or if the General Partner and 

Class B Partner cannot agree, pursuant 

to an appraisal process similar to the 

process set forth in Section 5.1(c) and at 

the Limited Partnership’s expense) and 

the New Units are entitled to a portion 

of the net equity value of the Limited 

Partnership on liquidation and/or 

distributions under the Limited 

Partnership Agreement, then the 

Limited Partnership Agreement shall be 

amended to change the terms of the 

Class B Limited Partner Units so that, 

after giving effect to such amendment, 

the value of the net equity of the 

Limited Partnership and distributions 

by the Limited Partnership to which the 

Class B Partner is entitled by virtue of 

its ownership of Class B Limited Partner 

Units is the same as the value of the net 

equity of the Limited Partnership and 

distributions by the Limited Partnership 

to which the Class B Partner was 

entitled prior to giving effect to such 

issuance and such amendment (the 

intention of the parties being such 

amendment will afford the Class B 

Partner a benefit of the type afforded by 

a customary weighted-average 

antidilution adjustment). The parties 

will act in good faith to agree upon and 

execute such amendment to the Limited 

Partnership Agreement, which shall also 

provide for additional distributions to 

be paid to the Class B Partner on the 

date such amendment becomes effective 

in order to give effect to the terms of 

such amendment with respect to 

distributions (if any) made by the 

Limited Partnership after such issuance 

but prior to such amendment becoming 

effective. 

6.3 Termination of Preemptive 

Rights. The Class B Partner’s preemptive 

rights pursuant to this Article VI shall 

terminate upon the completion of a 

successful underwritten public offering 

by the Limited Partnership (or any 

corporate successor thereto). 

6.4 Application of Article VI to Joint 

Venture. The provisions of this Article 

VI shall apply mutatis mutandis if the 

Joint Venture or any other Subsidiary of 

the Limited Partnership issues any new 

equity interests (other than any such 

equity interest issued to the Limited 

Partnership or another Subsidiary or the 

Limited Partnership). 

Article VII 

DGHC Board Representation 

7.1 Class B Partner Board 

Representation. The Class B Partner 

(together with any other Class B Limited 

Partners) shall have the right to appoint 

two (2) members to the board of 

managers of DGHC or such greater 

number as required by Section 5(b)(ii) of 

the Operating Agreement of DGHC (the 

‘‘Class B Partner Board Right’’), which 

board of managers shall be governed by 

the Limited Partnership Agreement and 

the Operating Agreement of DGHC 

attached hereto as Exhibit B. The board 

of managers shall consist of up to five 

individual managers and in no event 

may the board of managers consist of 

more than five managers without the 

consent of the managers appointed by 

the Class B Partner(s) pursuant to 

Section 5(b) of the Operating Agreement 

of DGHC; provided, however, that in no 

event may the board of managers consist 

of more than five managers unless not 

fewer than forty percent (40%) of the 

managers are appointed by the Class B 

Partner(s) pursuant to Section 5(b) of the 

Operating Agreement of DGHC. If there 

is more than one Class B Limited 

Partner, then the Class B Partner Board 

Right will be vested solely in the Class 

B Limited Partner that supervises 

editorial and reportorial functions of the 

The Charleston Daily Mail pursuant to 

Section 9.1 of the Limited Partnership 

Agreement. In no event may the Class B 

Limited Partner(s) appoint as members 

to the board of managers of DGHC any 

person who is, at the time of his or her 

appointment, an employee of the Joint 

Venture, DGC, DCHC, the Limited 


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Partnership or Daily Gazette Publishing 

Company, LLC. 

Article VIII 

Miscellaneous 

8.1 Registration Rights. The parties 

agree that prior to the consummation of 

any public offering of the Limited 

Partnership (or any corporate successor 

thereto), the parties will agree on a 

registration rights agreement which will 

include one demand registration and an 

unlimited number of piggyback 

registrations with respect to the Class B 

Partner’s securities of the Limited 

Partnership (or any corporate successor 

thereto), in each case, at the Limited 

Partnership’s (or any corporate 

successor thereto’s) expense, containing 

customary terms and conditions and 

otherwise in form and substance 

reasonably acceptable to the parties. 

8.2 Assignment. This Agreement 

shall be binding upon and inure only to 

the benefit of and be enforceable against 

the parties hereto and their respective 

permitted successors and assigns. 

Nothing in this Agreement, express or 

implied, is intended to confer upon any 

Person, other than the parties hereto and 

their respective permitted successors 

and assigns, any rights or remedies 

under or by reason of this Agreement. 

The Class B Partner may assign this 

Agreement and such party’s rights 

hereunder to any Permitted Transferee 

hereunder. The General Partner may 

assign this Agreement and its rights 

hereunder to any of its Affiliates, to a 

successor General Partner or as 

collateral for a loan or other financing; 

provided that no such assignment shall 

release the General Partner from any 

obligation hereunder. 

8.3 Amendment. This Agreement 

may not be amended except by a written 

instrument signed by the General 

Partner, the Limited Partnership and the 

Class B Partner. 

8.4 Governing Law. This Agreement 

shall be governed by and construed in 

accordance with the laws of the State of 

West Virginia, without regard to its 

conflicts of law principles. 

8.5 Notices. All notices and other 

communications given or made 

pursuant hereto shall be in writing and 

shall be deemed to have been duly given 

or made as of the date delivered if 

delivered by hand, by telecopier device 

or by overnight courier service to the 

parties at the following addresses: 

If to General Partner: 

c/o Daily Gazette Company, 1001 

Virginia Street, East, Charleston, WV 

25301. Attn: Ms. Elizabeth E. Chilton, 

President, Facsimile: (304) 348–5180; 

and Attn: Mr. Norman Watts Shumate 

III, Facsimile: (304) 348–1795. 

With A Copy to: 

Edmondson + Blumenthal PLLC, 12 

Cadillac Drive, Suite 210, Brentwood, 

TN 37027. Attn: Steven E. Blumenthal 

Facsimile: (615) 296–4600. 

If to Class B Partner: 

[insert notice information] 

8.6 Severability. If any term or other 

provision of this Agreement is invalid, 

illegal or incapable of being enforced by 

any rule of law or public policy, all 

other conditions and provisions of this 

Agreement shall nevertheless remain in 

full force and effect so long as the 

economic or legal substance of the 

transactions contemplated hereby is not 

affected in any manner adverse to any 

party. Upon such determination that 

any term or other provision is invalid, 

illegal or incapable of being enforced, 

the parties hereto shall negotiate in good 

faith to modify this Agreement so as to 

effect the original intent of the parties as 

closely as possible in an acceptable 

manner to the end that transactions 

contemplated hereby are fulfilled to the 

greatest extent possible. 

8.7 Counterparts. This Agreement 

may be executed in one or more 

counterparts, each of which shall be an 

original, but all of which taken together 

shall constitute one and the same 

agreement. 

8.8 Headings. The section headings 

used in this Agreement are for reference 

purposes only and shall not affect the 

meaning or interpretation of any term or 

provision of this Agreement. 

8.9 Integration. This Agreement 

(together with the Limited Partnership 

Agreement and the JOA) represents the 

entire understanding of the parties with 

reference to the matters set forth herein. 

This Agreement supersedes all prior 

negotiations, discussions, 

correspondence, communications and 

prior agreements among the parties 

relating to the subject matter herein. 

IN WITNESS WHEREOF, the parties 

have caused this Put/Call Agreement to 

be duly executed as of the date first 

above written. 

DAILY GAZETTE HOLDING 

COMPANY, LLC 

By: Daily Gazette Company, its sole 

member 

By: 

Name: lllllllllllllll

Title: lllllllllllllll

CHARLESTON NEWSPAPERS 

HOLDINGS, L.P. 

By: Daily Gazette Holding Company, 

LLC, its general partner 

By: Daily Gazette Company, its sole 

member 

By: 

Name: lllllllllllllll

Title: lllllllllllllll

[insert name of Class B Partner] 

By: 

Name: lllllllllllllll

Title: lllllllllllllll

DAILY GAZETTE COMPANY (solely for 

the purposes of Article VII) 

By: 

Name: lllllllllllllll

Title: lllllllllllllll

Exhibit A 

Appraisal Methodology 

In determining the Fair Market Value, 

the appraiser will use the following 

methodology: 

The appraiser shall determine the Fair 

Market Value of the Partnership based 

on the going concern value of the 

Partnership as of the relevant date. In 

determining the Partnership’s going 

concern value, the appraiser (i) shall 

assume that the value of any business is 

the cash price at which the assets of 

such business as a going concern would 

change hands between a willing buyer 

and a willing seller (neither acting 

under compulsion) in an arms-length 

transaction, on terms and subject to 

conditions and costs applicable in the 

newspaper publishing industry, (ii) 

shall assume that all assets used in the 

operation of the business of the 

Partnership and its Subsidiaries, 

whether owned by or licensed to the 

Partnership or any of its Subsidiaries 

(and all other assets of any Affiliate of 

the Partnership that are used by the 

Partnership or any of its Subsidiaries), 

were entirely owned directly by the 

Partnership, and (iii) shall not take into 

account expenditures in respect of any 

management agreements entered into by 

the Joint Venture. 

Exhibit B 

Operating Agreement of DGHC 

NEITHER THIS WARRANT NOR THE 

CLASS B LIMITED PARTNER UNITS 

TO BE ISSUED UPON EXERCISE 

HEREOF HAS BEEN REGISTERED 

UNDER THE SECURITIES ACT OF 

1933, AS AMENDED (THE 

‘‘SECURITIES ACT’’). NO SALE OR 

OTHER DISPOSITION OF THIS 

WARRANT OR THE CLASS B LIMITED 

PARTNER UNITS ISSUABLE UPON 

EXERCISE HEREOF MAY BE MADE 

WITHOUT AN EFFECTIVE 

REGISTRATION STATEMENT 

RELATED THERETO OR PURSUANT 

TO AN EXEMPTION FROM 

REGISTRATION UNDER THE 

SECURITIES ACT. THIS WARRANT IS 


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ALSO SUBJECT TO CERTAIN 

ADDITIONAL TRANSFER 

RESTRICTIONS PROVIDED FOR 

HEREIN. 

Charleston Newspapers Holdings, L.P. 

Warrant To Purchase Class B Limited 

Partner Units Initially Constituting a 

20% Percentage Interest 

This certifies that Charleston 

Publishing Company, a Delaware 

corporation (‘‘Holder’’), is entitled to 

subscribe for and purchase from 

Charleston Newspapers Holdings, L.P., a 

Delaware limited partnership 

(hereinafter, the ‘‘Partnership’’), up to an 

aggregate number of duly authorized, 

validly issued, fully paid and 

nonassessable Class B Limited Partner 

Units equal to the Warrant Units 

Amount, at a purchase price per Class 

B Limited Partner Unit equal to the 

Warrant Price (as defined below), 

subject to the provisions and upon the 

terms and conditions hereinafter set 

forth. Capitalized terms used herein and 

not otherwise defined herein shall have 

the meanings assigned to them in that 

certain Amended and Restated Limited 

Partnership Agreement for Charleston 

Newspapers Holdings, L.P. by and 

among Daily Gazette Holding Company, 

LLC, a Delaware limited liability 

company (‘‘DGHC’’), and Charleston 

Publishing Company (as it may be 

amended from time to time, the 

‘‘Partnership Agreement’’). 

The purchase price of each Class B 

Limited Partner Unit shall be the price 

per Class B Limited Partner Unit 

determined in accordance with Exhibit 

A attached hereto and set forth in an 

addendum to this Warrant executed by 

Holder and the Partnership (the 

‘‘Warrant Price’’). The maximum number 

of Class B Limited Partner Units to be 

issued upon exercise of this Warrant (as 

adjusted from time to time, the ‘‘Warrant 

Units Amount’’) shall be equal to the 

number of Class B Limited Partner Units 

that constitute a twenty percent (20%) 

Percentage Interest in the Partnership 

(subject to adjustment as provided 

below (as adjusted from time to time, 

the ‘‘Warrant Percentage Amount’’) as of 

the date of exercise. The term ‘‘Class B 

Units’’ shall mean, unless the context 

otherwise requires, the Class B Limited 

Partner Units and other property at the 

time receivable upon the exercise of this 

Warrant. The term ‘‘Warrant(s)’’ as used 

herein shall include this Warrant and 

any warrant(s) delivered in substitution 

or exchange therefor as provided herein. 

Method of Exercise; Payment 

The purchase right represented by 

this Warrant may be exercised by 

Holder, in whole or in part, by: 

The surrender of this Warrant at the 

principal office of the Partnership 

located at c/o Daily Gazette Company, 

1001 Virginia Street, East, Charleston, 

WV 25301, Attn: Ms. Elizabeth 

Chilton, President, together with a 

written notice of Holder’s election to 

exercise this Warrant, which notice 

shall specify the number of Class B 

Units (or the Percentage Interest of the 

Partnership) to be purchased; 

the payment to the Partnership, by wire 

transfer of immediately available 

funds to an account designated by the 

Partnership, of an amount equal to the 

aggregate Warrant Price of the Class B 

Units being purchased; 

if Holder is not already a party to the 

Partnership Agreement, the execution 

and delivery by Holder of an 

amendment to the Partnership 

Agreement (in a form prepared by 

Holder and reasonably acceptable to 

the General Partner) pursuant to 

which Holder will become a party to 

the Partnership as a Class B Limited 

Partner and agree to be bound by the 

terms and conditions of the 

Partnership Agreement (a 

‘‘Partnership Amendment’’); and 

if Holder is not already a party to a put/ 

call agreement in substantially the 

form attached to this Warrant as 

Exhibit B (a ‘‘Put/Call Agreement’’), 

the execution and delivery by Holder 

of a Put/Call Agreement. 

Class B Units purchased pursuant to 

this Warrant shall be uncertificated. 

Unless this Warrant has been fully 

exercised or has expired, a new Warrant 

representing the Class B Units with 

respect to which this Warrant shall not 

then have been exercised shall be issued 

to Holder as soon as practicable after 

each exercise of this Warrant, and in 

any event within thirty (30) days after 

the surrender of this Warrant. Each 

exercise of this Warrant shall be deemed 

to have been effected immediately prior 

to the close of business on the date on 

which items (a) and (b) above have been 

satisfied, and the person entitled to 

receive the Class B Units issuable upon 

such exercise shall be treated for all 

purposes as the holder of such Class B 

Units of record as of the close of 

business on such date. 

Certain Agreements 

Upon surrender of this Warrant 

pursuant to Section 1: 

a. The Partnership will cause the 

General Partner to immediately execute 

and deliver to Holder the Partnership 

Amendment executed and delivered by 

Holder pursuant to Section 1(c) above; 

and 

b. The Partnership will (and the 

Partnership will cause the General 

Partner to) immediately execute and 

deliver to Holder the Put/Call 

Agreement executed and delivered by 

Holder pursuant to Section 1(d) above. 

Covenant of Non-Impairment 

The Partnership will not, by 

amendment of the Partnership 

Agreement or through reorganization, 

consolidation, merger, dissolution, issue 

or sale of Partnership Interests or other 

securities, sale of assets or any other 

voluntary action, avoid or seek to avoid 

the observance or performance of any of 

the terms of this Warrant, but will at all 

times in good faith assist in the carrying 

out of all such terms and in the taking 

of all such action as may be necessary 

or appropriate in order to protect the 

rights of Holder against dilution or other 

impairment. 

Adjustment of Percentage Interest 

At the end of each of the 2010, 2011, 

2012, 2013 and 2014 fiscal years of the 

Partnership, the Warrant Percentage 

Amount shall be subject to adjustment 

as follows: 

a. If the Daily Mail’s percentage share 

of the Combined Circulation for the 

most-recently ended 12-month audit 

period exceeds the Daily Mail’s 

percentage share for the immediately 

preceding 12-month audit period by 

more than one (1) percentage point, then 

the Warrant Percentage Amount will 

increase one (1) percentage point. 

b. If the Daily Mail’s percentage share 

of the Combined Circulation for the 

most-recently ended 12-month audit 

period is more than one (1) percentage 

point lower than the Daily Mail’s 

percentage share for the immediately 

preceding 12-month audit period, then 

the Warrant Percentage Amount will 

decrease one (1) percentage point. 

For purposes of determining 

adjustments to be made pursuant to this 

Section 3, the terms set forth below 

shall have the meanings assigned to 

them below: 

‘‘Daily Mail’’: The Charleston Daily 

Mail. 

‘‘Charleston Gazette’’: The Charleston 

Gazette. 

‘‘Daily Print Circulation’’: The average 

weekday paid print circulation of a 

newspaper as stated in the most recent 

12-month audit conducted by the Audit 

Bureau of Circulations or other 

reputable third party media auditor. 

‘‘Combined Circulation’’: The sum of 

the Daily Print Circulation of the Daily 

Mail and the Charleston Gazette. 


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Term; Termination 

This Warrant may be exercised in 

whole or in part at any time and from 

time to time, on or after [insert date] and 

shall terminate three (3) years thereafter. 

Notwithstanding the foregoing, this 

Warrant shall terminate immediately 

upon the cessation of the publication of 

The Charleston Daily Mail. 

No Partner Rights 

Holder shall not, solely by virtue 

hereof, be entitled to any rights of a 

partner of the Partnership prior to any 

exercise of this Warrant, and nothing 

contained in this Warrant shall be 

construed as imposing any obligation on 

Holder to purchase any Partnership 

Interest or as imposing any liabilities on 

Holder as a partner of the Partnership 

(prior to any exercise of this Warrant), 

whether such obligation or liabilities are 

asserted by the Partnership or by 

creditors of the Partnership. 

Transfer 

This Warrant may not be sold, 

assigned, disposed, hypothecated, 

pledged or otherwise transferred in 

whole or in part; provided, however, (x) 

Holder may assign this Warrant to any 

of Holder’s Affiliates, provided that 

such Affiliate agrees to be bound by the 

provisions of this Warrant and (y) 

Holder may assign its rights under this 

Warrant as collateral security to persons 

or entities extending financing to Holder 

or any of its Affiliates (and such persons 

or entities may at any time foreclose on 

such security interest). The term 

‘‘Holder’’ as used herein shall include 

any transferee to whom this Warrant has 

been transferred in accordance with this 

Section 7. Any transfer or attempted 

transfer in violation of this Section 7 

shall be null and void. The term 

‘‘Affiliate’’ as used herein shall mean, 

with respect to any person or entity, any 

other person or entity directly or 

indirectly controlling or controlled by 

such person or entity or under direct or 

indirect common control with such 

person or entity. 

Securities Act of 1933 

In addition to (and not in limitation 

of) the restrictions set forth in Section 

6 above, Holder, by acceptance hereof, 

agrees that, absent an effective 

registration statement under the 

Securities Act of 1933, as amended (the 

‘‘Securities Act’’), covering the 

disposition of the Warrant or Class B 

Units issued or issuable upon exercise 

hereof, Holder will not sell or transfer 

any or all of such Warrant or Class B 

Units unless such sale or transfer will be 

exempt from the registration and 

prospectus delivery requirements of the 

Securities Act and an opinion of 

counsel reasonably satisfactory to the 

Partnership regarding such exemption is 

delivered to the Partnership. Holder 

consents to the Partnership’s making a 

notation on its records in order to 

implement such restriction on 

transferability. Holder represents that it 

is an ‘‘accredited investor’’ within the 

meaning of Rule 501 under the 

Securities Act. 

Remedies 

The Partnership stipulates that the 

remedies at law of Holder, in the event 

of any default or threatened default by 

the Partnership in the performance of or 

compliance with any of the terms of this 

Warrant, are not and will not be 

adequate and that, to the fullest extent 

permitted by law, such terms may be 

specifically enforced by a decree for the 

specific performance of any agreement 

contained herein or by an injunction 

against a violation of any of the terms 

hereof or otherwise. 

Loss or Mutilation 

Upon receipt by the Partnership of 

evidence satisfactory to it (in the 

exercise of reasonable discretion) of the 

ownership of and the loss, theft, 

destruction or mutilation of this 

Warrant and (in the case of loss, theft, 

or destruction) of indemnity satisfactory 

to it (in the exercise of reasonable 

discretion), and (in the case of 

mutilation) upon surrender and 

cancellation thereof, the Partnership 

will execute and deliver in lieu hereof 

a new Warrant of like tenor. 

Successors 

All the covenants and provisions of 

this Warrant shall bind and inure to the 

benefit of Holder and the Partnership 

and their respective successors and 

permitted assigns. 

Notices 

All notices and other communications 

given pursuant to this Warrant shall be 

in writing and shall be deemed to have 

been given when personally delivered 

or when mailed by prepaid registered, 

certified or express mail, return receipt 

requested. Notices should be addressed 

as follows: 

a. If to Holder, then to: 

Affiliated Media, Inc., 101 W. Colfax 

Avenue, Suite 1100, Denver, CO 

80202. Attention: Joseph J. Lodovic, 

IV, President. 

With a copy (which shall not 

constitute notice) to: 

Hughes Hubbard & Reed LLP, One 

Battery Park Plaza, New York, New 

York 10004. Attention: James Modlin. 

b. If to the Partnership, then to: 

Daily Gazette Company, 1001 Virginia 

Street, East, Charleston, WV 25301. 

Attention: Elizabeth E. Chilton, 

President and Norman Watts Shumate 

III. 

With a copy (which shall not 

constitute notice) to: 

Edmondson + Blumenthal PLLC, 12 

Cadillac Drive, Suite 210, Brentwood, 

TN 37027. Attention: Steven E. 

Blumenthal. 

Such addresses for notices may be 

changed by any party by written notice 

to the other party pursuant to this 

Section 12. 

Amendment 

This Warrant may be amended only 

by an agreement in writing signed by 

the Partnership and Holder. 

Construction of Warrant 

Captions contained in this Warrant 

are inserted as a matter of convenience 

and in no way define the scope of this 

Warrant or the intent of any provision 

hereof. None of the provisions of this 

Warrant shall be for the benefit of or be 

enforceable by any creditor of the 

Partnership, any Partner or Holder. This 

Warrant, together with the exhibits 

attached hereto and the Partnership 

Agreement and the JOA, constitute the 

entire agreement between the parties 

hereto pertaining to the subject matter 

hereof and supersedes all prior 

agreements (oral or written) and 

understandings pertaining thereto. In 

the event of any conflict between this 

Warrant and any other agreement, this 

Warrant shall control. The invalidity of 

any article, section, subsection, clause 

or provision of this Warrant shall not 

affect the validity of the remaining 

articles, sections, subsections, clauses or 

provisions hereof. 

Governing Law 

This Warrant and the rights and 

obligations of the parties hereto shall be 

governed by and construed in 

accordance with the laws of the State of 

Delaware, without regard to its conflicts 

of law principles. 

Dated as of [insert date] 

Charleston Newspapers Holdings, L.P. 

By: Daily Gazette Company, General Partner 

By: lllllllllllllllllll

Elizabeth E. Chilton, 

President. 

Exhibit A 

Methodology for Determining Price per 

Class B Limited Partner Unit 

The Warrant Price will be the 

appraised value of a Class B Limited 


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Partner Unit as of the date of this 

Warrant, as determined promptly 

following the execution and delivery of 

this Warrant by a nationally-recognized 

appraiser with experience in the 

newspaper industry that is reasonably 

acceptable to both Daily Gazette 

Company and the Holder. Each of the 

following appraisers are hereby deemed 

to be ‘‘reasonably acceptable’’ to both 

Daily Gazette Company and the Holder: 

Dirks, Van Essen & Murray 

In determining the price per Class B 

Limited Partner Unit, the appraiser will 

use the following methodology: 

The appraiser shall determine the fair 

market value of the Partnership based 

on the going concern value of the 

Partnership as of the relevant date, with 

the following adjustments. In 

determining the Partnership’s going 

concern value, the appraiser (i) shall 

assume that the value of any business is 

the cash price at which the assets of 

such business as a going concern would 

change hands between a willing buyer 

and a willing seller (neither acting 

under compulsion) in an arms-length 

transaction, on terms and subject to 

conditions and costs applicable in the 

newspaper publishing industry, (ii) 

shall assume that all assets used in the 

operation of the business of the 

Partnership and its Subsidiaries, 

whether owned by or licensed to the 

Partnership or any of its Subsidiaries 

(and all other assets of any Affiliate of 

the Partnership that are used by the 

Partnership or any of its Subsidiaries), 

were entirely owned directly by the 

Partnership, and (iii) shall not take into 

account expenditures in respect of any 

management agreements entered into by 

the Joint Venture. The Warrant Price 

with respect to any Class B Limited 

Partner Unit shall be an amount equal 

to (x) the fair market value of the 

Partnership as of the date of this 

Warrant (as determined in accordance 

with the preceding sentence) multiplied 

by (y) the Percentage Interest in the 

Partnership represented by such Class B 

Limited Partner Unit as of the date of 

exercise of the Warrant. 

Exhibit B 

Form of Class B Units Put/Call 

Agreement 

[Attached] 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF WEST 

VIRGINIA 

CHARLESTON DIVISION 

UNITED STATES OF AMERICA, 

Plaintiff, v. DAILY GAZETTE 

COMPANY, and MEDIANEWS GROUP, 

INC., Defendants. 

Civil Action No. 2:07–0329 

Judge Copenhaver 

Magistrate Judge Stanley 

Filed: January 20, 2010 

Competitive Impact Statement 

Plaintiff United States of America 

(‘‘United States’’), pursuant to Section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ or ‘‘Tunney Act’’), 

15 U.S.C. 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. Nature and Purpose of the Proceeding 

The United States brought this 

lawsuit against Daily Gazette Company 

(‘‘Gazette Company’’) and MediaNews 

Group, Inc. (‘‘MediaNews’’) on May 22, 

2007, challenging a series of agreements 

entered into by the defendants on May 

7, 2004 (the ‘‘May 2004 transactions’’). 

The Complaint alleges that these 

transactions violated Section 7 of the 

Clayton Act, 15 U.S.C. 18, and Sections 

1 and 2 of the Sherman Act, 15 U.S.C. 

1 & 2, by consolidating ownership and 

control of the only two local daily 

newspapers in Charleston, West 

Virginia, under Gazette Company and 

eliminating competition between them. 

On January 20, 2010, the United 

States filed a proposed Final Judgment, 

which is described in more detail 

below. The United States and 

Defendants have stipulated that the 

proposed Final Judgment may be 

entered after compliance with the 

APPA, unless the United States 

withdraws its consent. Entry of the 

proposed Final Judgment would 

terminate this action, except that this 

Court would retain jurisdiction to 

construe, modify, and enforce the 

proposed Final Judgment and to punish 

violations thereof. 

II. Description of the Events Giving Rise 

to the Alleged Violation 

A. The Defendants 

Defendant Gazette Company is a 

privately-held corporation based in 

Charleston, West Virginia. It has for 

many years owned and operated the 

Charleston Gazette (‘‘Gazette’’), a local 

daily newspaper founded in 1873 and 

circulated throughout a large portion of 

the State of West Virginia. MediaNews, 

now known as Affiliated Media, Inc., is 

a privately-held corporation with its 

principal place of business in Denver, 

Colorado. It owns and publishes over 50 

daily newspapers in various markets 

throughout the United States. In 1998, 

MediaNews acquired the Charleston 

Daily Mail (‘‘Daily Mail’’), a local daily 

newspaper in Charleston, West Virginia, 

founded in 1880. 

B. The Pre-2004 Joint Operating 

Arrangement 

For many years after their founding, 

the Gazette and Daily Mail operated 

completely independently. In 1958, the 

then-owners of the two newspapers 

entered into a joint operating agreement. 

The agreement created a partnership, 

which for most of its existence went by 

the name Charleston Newspapers. 

Charleston Newspapers was responsible 

for printing, distribution, and 

advertising and subscription sales for 

both newspapers. Each newspaper 

owner held a 50% interest in the 

venture and all profits, losses, and 

capital costs were shared equally. At no 

time, however, did the owners combine 

their news operations, which continued 

to operate independently. In addition, 

each newspaper remained separately 

owned outside the joint venture. Each 

owner retained exclusive rights to the 

use of the names of their respective 

newspapers, and all goodwill, 

subscriber lists, subscriber 

relationships, and other intangible 

assets associated with their newspapers. 

The two owners of Charleston 

Newspapers had an equal say in the 

management of the venture, and they 

jointly appointed a general manager 

who was responsible to both owners. 

Each owner appointed half of the 

representatives to a management 

committee that approved all significant 

decisions, including annual budgets and 

advertising and subscription rates. Each 

owner separately hired and supervised 

a publisher for its respective newspaper. 

The publishers oversaw the day-to-day 

business and news operations of each 

newspaper and reported directly to their 

respective newspaper’s owner. The 

publishers exerted a substantial amount 

of control over the general manager and 

other employees of Charleston 

Newspapers and had the ability to block 

Charleston Newspapers from taking 

actions of which they disapproved. 

In 1970, Congress enacted the 

Newspaper Preservation Act (‘‘NPA’’), 15 

U.S.C. 1801, et seq., which provided 

qualifying joint operating arrangements 

then in effect with limited antitrust 

immunity for certain specified business 

activities, as long as they continued to 

meet the requirements set forth in the 

NPA. Among these requirements was 

that the newspapers in a joint operating 

arrangement remain separately owned 

or controlled, that they maintain 

separate newsroom staffs, and that their 

editorial policies be ‘‘independently 


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determined.’’ 15 U.S.C. 1802(2). Since 

1970, Charleston Newspapers has held 

itself out as a qualifying newspaper joint 

operating arrangement and has claimed 

the antitrust immunity conferred by the 

NPA. 

Despite the formation of Charleston 

Newspapers, the two newspapers 

remained vigorous competitors for 

readers. Each newspaper sought to 

capture readers by breaking stories first, 

finding stories that the other newspaper 

did not have, covering local news with 

greater depth and accuracy, and offering 

the most attractive mix of news, 

features, editorials, and other content. 

The Gazette and the Daily Mail sought 

to make their products more appealing 

by introducing new features, increasing 

the quantity of coverage, redesigning the 

appearance of their newspapers, 

competing to hire the best newsroom 

talent available, and taking numerous 

other steps to gain a competitive edge. 

Reporters and editors from each 

newspaper monitored the other on a 

daily basis and reacted directly to news 

coverage appearing in the competing 

newspaper. 

Although the two newspaper owners 

were in a business partnership, they 

retained independent economic 

incentives. Each owner had the 

incentive to maximize the value of its 

own newspaper assets, which at all 

times remained under separate 

ownership outside the joint operating 

arrangement. This incentive existed for 

several reasons. First, each owner had 

an interest in preserving the value of its 

newspaper assets in case it wished to 

sell them in the future (either during the 

term of the joint operating arrangement 

or after its expiration). If an owner 

allowed its newspaper’s circulation 

numbers and product quality to 

deteriorate, the effect would be to 

shorten that newspaper’s life span, 

damage the value of its franchise, and 

deter potential buyers. Second, each 

owner wanted its respective newspaper 

to contribute to the success of 

Charleston Newspapers in order to 

maintain a strong bargaining position 

when the joint operating contract was 

renegotiated. Renegotiations of 

newspaper joint operating contracts 

occur on a regular basis, often driven by 

capital investments or other major 

strategic decisions, and frequently 

involve changes to the distribution of 

profit shares or other key contract terms. 

Owning a declining paper might result 

in a reduced share of the profits or other 

unfavorable terms for that owner. Third, 

the owners had conflicting interests 

regarding the termination or renewal of 

the joint operating arrangement. The 

Daily Mail, as the smaller-circulation 

newspaper in the afternoon position, 

wanted to maintain a high enough share 

of circulation credibly to threaten to 

continue competing when the joint 

operating arrangement ended, and to 

justify extending the termination date of 

the agreement so that it could continue 

to share in the profits of the venture. 

The Gazette, as the larger-circulation 

newspaper in the morning position, had 

the incentive to increase its circulation 

share to accelerate the demise of the 

Daily Mail and become the sole survivor 

in the market as soon as possible. 

Finally, if the joint operating 

arrangement were to terminate, the 

governing contract specified that the 

jointly-owned property would be 

divided to allow the owners to resume 

their status as independent competitors. 

The possibility that such competition 

could resume provided each owner with 

an incentive to keep its newspaper 

strong and maximize the value of its 

intellectual property. 

The newspaper owners acted on these 

incentives in their management of 

Charleston Newspapers. For example, 

each owner actively sought to protect 

and increase the circulation of its 

respective newspaper rather than 

seeking solely to achieve the most 

profitable combined circulation. Each 

owner insisted that Charleston 

Newspapers treat both newspapers 

equally with respect to circulation sales 

and promotion efforts and regularly 

monitored Charleston Newspapers to 

ensure that managers were not favoring 

one paper over the other. Each owner 

pushed to expand home delivery routes 

into new areas and to increase the level 

of discounting to boost circulation for 

its respective newspaper. Each owner 

insisted that any new discount or 

promotional incentive launched for the 

other’s newspaper be applied to its 

newspaper as well. This quest for 

additional circulation, and the policy of 

treating the two newspapers equally in 

circulation sales efforts, led to 

newspaper subscribers receiving higher 

levels of discounts than they would 

likely have received had Charleston 

Newspapers been controlled by one 

owner. In addition, each owner sought 

to maintain a large news staff, a 

substantial newsroom budget, and 

generous newshole (the amount of 

newspaper space devoted to news 

content as opposed to advertising) to 

allow it to better compete with the other 

newspaper for readership. Each owner 

also insisted on retaining the power to 

set its newsroom’s staffing and 

compensation levels. This competitive 

drive led the owners to spend far more 

on the newsrooms in Charleston than 

newspaper owners in comparably-sized 

newspaper markets typically do. 

Each owner took affirmative steps to 

preserve its competitive position and 

the long-term value of its assets. Each 

regularly blocked certain proposals that 

would have saved money for Charleston 

Newspapers because one owner 

believed that the proposal would 

provide the rival newspaper with a 

competitive advantage. Moreover, 

although each owner had the power to 

make cuts to its own newspaper’s staff, 

newshole, budget, subscription 

discounts, or circulation area without 

obtaining the approval of the other 

owner, neither owner did so—even 

when such cuts clearly would have 

increased the profits of the venture—out 

of concern over being at a competitive 

disadvantage to the other newspaper. 

Neither owner was willing to sacrifice 

the value of its assets unless the other 

owner did the same. These actions taken 

by the owners in pursuit of their 

separate economic interests prevented 

Charleston Newspaper from achieving 

monopoly levels of output or profits. 

In short, the competition between the 

Gazette and the Daily Mail benefitted 

readers by giving them a choice between 

two high-quality local newspapers with 

unique content at lower prices than 

would have prevailed if there had been 

one newspaper owner in this market. 

Advertisers likewise benefitted by 

having access to two unique sets of 

readers at prices that were lower than in 

comparable single-owner markets. 

C. The May 2004 Transactions 

At the end of 2003, MediaNews 

arranged to sell the Daily Mail and its 

50% interest in Charleston Newspapers 

to an experienced newspaper operator 

for $55 million. At the time, Charleston 

Newspapers was earning substantial 

profits, and the Daily Mail was 

financially healthy and stable. The joint 

operating arrangement between 

MediaNews and Gazette Company 

allowed each partner the right of first 

refusal to match any third-party offer to 

buy one of the newspapers. Rather than 

allow the new buyer to take over the 

Daily Mail and continue the competition 

that had prevailed for decades, Gazette 

Company decided to exercise its right of 

first refusal and gain control of both 

newspapers. 

Several months earlier, anticipating 

that the opportunity to exercise its right 

of first refusal might arise, Gazette 

Company began contacting lenders to 

secure the necessary financing. As the 

Complaint alleges, during this time 

Gazette Company developed a plan to 

shut down the Daily Mail and become 

the publisher of the sole remaining 


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newspaper in Charleston. Gazette 

Company created a series of business 

plans, financial projections, and other 

documents showing that it would cease 

publishing the Daily Mail by no later 

than the end of 2007. The plans called 

for the rapid reduction of the Daily 

Mail’s circulation and its newsroom 

staff and budget until, in 2007, the 

newspaper would no longer be 

economically viable. At that point, 

Gazette Company believed it would be 

able to justify the closure of the Daily 

Mail under the NPA to the Department 

of Justice. In short, Gazette Company 

planned to deliberately transform a 

financially healthy and stable Daily Mail 

into a failing newspaper and close it far 

earlier than the market would otherwise 

have dictated. According to its internal 

projections, Gazette Company 

calculated that it would be better off 

financially by closing the Daily Mail as 

soon as possible. By switching a critical 

mass of Daily Mail readers to the 

Gazette, advertising revenues would 

hold steady and the savings from 

disbanding the Daily Mail would allow 

Gazette Company to increase its profit 

margins substantially. These planning 

documents were provided to lenders 

and were the foundation upon which 

Gazette Company secured financing for 

the May 2004 transactions. None of 

Gazette Company’s pre-transaction 

business plans contemplated the 

continued publication of the Daily Mail 

beyond 2007. 

On May 7, 2004, Gazette Company 

and MediaNews entered into a series of 

transactions that merged their economic 

interests and gave Gazette Company 

ownership and control over both 

newspapers. In exchange for 

approximately $55 million, MediaNews 

transferred ownership of the Daily Mail 

assets and its 50% interest in Charleston 

Newspapers to subsidiaries of the 

Gazette Company. Under this new 

arrangement, Gazette Company retained 

100% of the profits generated by both 

newspapers. MediaNews no longer 

shared in the profits or losses of the 

business and had no further obligation 

to contribute to capital costs. 

MediaNews had no representatives on 

the management committee of the 

venture and no right to vote on any 

matter. Gazette Company was given sole 

discretion to manage Charleston 

Newspapers. It had the unilateral 

authority to establish the annual 

budgets, determine the staffing levels, 

and approve all the hiring and firing 

decisions for both newspapers. The 

2004 agreements also gave Gazette 

Company the express right to terminate 

publication of the Daily Mail without 

the approval of MediaNews (a right that 

Gazette Company had specifically 

bargained for in negotiations). The 

Defendants attempted to satisfy the 

NPA’s requirement of separatelycontrolled newsrooms by arranging to 

pay MediaNews a flat fee of $200,000 

per year to provide ‘‘management and 

supervision’’ services to the newsroom 

of the Daily Mail. May 7, 2004 Joint 

Operating Agreement § V (J)(4). The fee 

was adjusted annually for inflation but 

did not vary based on how well or how 

poorly the newspaper performed. 

Despite the payment of the fee, 

however, MediaNews employees did 

not exercise management control over 

the Daily Mail after May 2004. In reality, 

the Complaint alleges that Gazette 

Company controlled both newspapers. 

D. Post-Transaction Conduct 

Almost immediately after the 

transactions closed, Gazette Company 

began to take steps to implement its 

plans to close the Daily Mail. As alleged 

in the Complaint, Gazette Company 

stopped soliciting new subscribers for 

the Daily Mail, stopped offering 

promotions and discounts to new Daily 

Mail subscribers, cut dozens of Daily 

Mail home delivery and single copy 

routes (and refused to accept new 

subscriptions on many routes that 

remained), attempted to convert 

numerous Daily Mail readers to the 

Gazette, and took other steps with the 

goal of reducing the Daily Mail’s 

circulation. 

At the same time, Gazette Company 

took several other actions that damaged 

the quantity and quality of content 

available to Daily Mail readers: It 

allowed almost half of the Daily Mail 

newsroom staff to leave during 2004 and 

forbade the editor from hiring 

replacements; it cut the Daily Mail’s 

budget substantially in both 2004 and 

2005 (while increasing the Gazette’s); it 

ended the Daily Mail’s Saturday edition; 

and it transferred several of the best 

Daily Mail reporters to the Gazette. 

Gazette Company also directed the Daily 

Mail to end its second daily edition, 

which contained late-breaking news and 

was viewed by the newspaper’s staff as 

important to maintaining the quality 

and competitiveness of the paper. As a 

result of these actions, the quantity and 

quality of original local content created 

by the Daily Mail staff fell steadily 

through the end of 2004. Original local 

content is considered by both 

Defendants to be the most important 

and valuable content produced by these 

newspapers. Due to the loss of staff, the 

remaining Daily Mail reporters were 

required to take on extra coverage areas, 

other coverage areas were dropped, 

several sections per week were cut from 

the paper, and more work was farmed 

out to stringers who were not full-time 

journalists. The Daily Mail staff was 

forced to fill space by doing things that 

they considered to be departures from 

the paper’s prior standards of quality, 

such as reprinting stories verbatim from 

the Gazette without doing any new 

reporting, and running more non-local 

wire service stories. 

Due to these actions by Gazette 

Company, the circulation of the Daily 

Mail fell from 35,076 in February 2004 

to 23,985 in January 2005. Moreover, the 

Daily Mail became a less vigorous 

competitor to the Gazette and its readers 

got less for their money. Had the 

Department of Justice investigation not 

interrupted Gazette Company’s plans in 

late 2004, the situation would likely 

have continued to deteriorate as more 

resources were shifted away from the 

Daily Mail in preparation for its closure 

in 2007. 

E. The Competitive Effects of the 

Alleged Violation 

The Complaint alleges that the 

relevant product market is local daily 

newspapers and the relevant geographic 

market is Kanawha and Putnam 

counties in West Virginia. The local 

daily newspaper market is two-sided: 

Publishers sell newspapers to readers 

and simultaneously sell access to those 

readers to advertisers. With respect to 

readers, the two Charleston daily 

newspapers are a relevant market 

because, among other reasons, 

Charleston Newspapers has the ability 

to impose small but significant, nontransitory price increases on readers 

without losing so much business to 

other media as to make the increases 

unprofitable, and these newspapers 

have unique attributes (such as original, 

in-depth local news, local editorials and 

opinion, local display and classified 

advertising, and other features) that are 

not replicated by other local media. 

With respect to advertisers, the two 

Charleston daily newspapers are a 

relevant market because, among other 

reasons, Charleston Newspapers has the 

ability to impose small but significant, 

non-transitory price increases on its 

advertisers without losing so much 

business to other media as to make the 

increases unprofitable, and advertising 

in these newspapers has unique 

characteristics and a unique audience 

that cannot be replicated by other local 

media in Charleston. 

The Complaint alleged that the May 

2004 transactions extinguished the 

independent competitive incentives that 

existed under the prior joint operating 

arrangement. As a result of the 


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transactions and the conduct described 

above, readers were harmed by a 

reduction in the amount and quality of 

original content generated by the Daily 

Mail, the lessening of competition 

between the Daily Mail and the Gazette, 

the elimination of the discounts that 

had been available prior to May 2004, 

and the reduction in the distribution 

area of the Daily Mail, meaning that 

many readers no longer had access to 

their preferred newspaper. Had the 

Gazette Company succeeded in its plan 

to close the Daily Mail, readers would 

have been deprived of a choice of local 

daily newspapers and would likely have 

paid higher prices for a newspaper with 

less content and lower quality. 

Likewise, advertisers were harmed 

because the circulation and household 

penetration of the Daily Mail fell as 

prices rose, rendering the newspaper a 

less effective means of advertising in the 

Charleston area. 

III. Explanation of the Proposed Final 

Judgment 

The Final Judgment requires the 

Defendants to enter into a new 

contractual relationship that will 

supersede the existing arrangement that 

the United States challenged. The 

Defendants’ new arrangement consists 

of five contracts: a Limited Partnership 

Agreement, a Joint Operating 

Agreement, a revised Operating 

Agreement of Daily Gazette Holding 

Company, a Put/Call Agreement, and a 

Warrant Agreement, all of which are 

attached to and made a part of the Final 

Judgment. The Final Judgment prohibits 

the Defendants from amending or 

terminating these contracts, or entering 

into any subsequent contracts relating to 

the publication of newspapers in 

Charleston, without the consent of the 

United States. 

The new contracts address the 

competitive concerns resulting from the 

May 2004 transactions by, among other 

things, implementing several important 

changes to the governance provisions of 

the Defendants’ arrangement. 

MediaNews will be given the right to 

appoint two of the five seats on the 

Board of Managers overseeing the 

Limited Partnership. Currently, 

MediaNews does not have the right to 

name any board members. MediaNews’ 

board representatives will have the right 

to vote on all matters coming before the 

board. Most matters will be subject to 

approval by a majority vote; however, 

the annual newsroom budgets for the 

Daily Mail and the Gazette must each be 

approved by a super-majority of four 

votes. This requirement will provide 

MediaNews with the ability to protect 

the Daily Mail’s budget and negotiate for 

the resources it needs to compete 

effectively with the Gazette. Under the 

2004 arrangement, the Daily Mail budget 

was unilaterally determined by Gazette 

Company and its appointed manager at 

Charleston Newspapers, and could be 

changed at any time. 

The Final Judgment guarantees that 

the content of the Daily Mail will be 

independently determined solely by 

MediaNews and the staff of the Daily 

Mail. Likewise, the content of the 

Gazette must be independently 

determined by the Gazette Company 

and Gazette staff. The Final Judgment 

forbids either Defendant from taking any 

action to influence the content of the 

other’s newspaper. It also prohibits the 

Defendants from entering into any 

agreement that would limit the editorial 

independence of the two newspapers. 

Currently, the Gazette Company 

(through its control of Charleston 

Newspapers) determines the size of the 

Daily Mail newsroom and must approve 

any hiring and firing decisions. To 

further re-establish the independence of 

the Daily Mail, the revised contracts 

provide that MediaNews will have sole 

authority to determine the identity of 

the Daily Mail newsroom employees 

and how much they are paid. The Daily 

Mail will have no fewer than 32 

newsroom positions in the first year of 

the agreement, and thereafter 

MediaNews will set the size of the 

newsroom at whatever level it sees fit, 

provided that if total employee expense 

exceeds the annual budgeted amount set 

by the Limited Partnership board, 

MediaNews must pay the excess cost. 

These changes to the contracts are 

designed to prevent the recurrence of 

the events of 2004, described above. 

The Final Judgment also prohibits the 

Defendants from discriminating against 

the Daily Mail in performing any 

activities related to circulation sales or 

advertising sales. Among other things, 

this provision would prohibit the type 

of conduct alleged in the Complaint, 

whereby Charleston Newspapers 

discontinued efforts to solicit new Daily 

Mail subscribers and ceased offering 

discounts to new Daily Mail subscribers, 

while continuing these activities for the 

Gazette. The revised contracts contain 

several other protections for the Daily 

Mail, including that (1) the amount of 

space devoted to news content 

(newshole) and the availability of color 

will be budgeted at the same level for 

both newspapers; (2) the press 

deadlines, delivery targets, number of 

editions and days of publication for the 

Daily Mail will not be changed without 

the approval of MediaNews; and (3) the 

primary circulation area of the Daily 

Mail as of August 1, 2009 will not be 

reduced without the approval of 

MediaNews. Under the 2004 

arrangement, Gazette Company had the 

unilateral power to make changes in any 

of these areas. 

To enhance the competitiveness of the 

Daily Mail and remedy past practices, 

the Final Judgment contains a remedial 

provision that calls for the Defendants 

to offer subscriptions to the Daily Mail 

at no less than 50% off the regular price. 

This offer must be available for a period 

of at least six months and must be made 

available only to Daily Mail subscribers. 

Thereafter, Charleston Newspapers must 

make the same promotional offers 

available for potential subscribers of 

both newspapers, unless MediaNews 

approves a deviation. The purpose of 

the special offer is to remedy, to the 

extent possible, the effects of Gazette 

Company’s actions that the Complaint 

alleged were intended to undermine the 

circulation of the Daily Mail. 

The Final Judgment contains several 

provisions to prevent the unjustified 

termination of publication of the Daily 

Mail. The 2004 contracts gave Gazette 

Company the unilateral authority to 

cease publishing the Daily Mail. The 

Final Judgment provides that the Daily 

Mail must continue publishing as a 

daily newspaper (defined in the Final 

Judgment as a print publication which 

is published no fewer than five days per 

week) unless it is determined to be a 

failing firm under antitrust law, as 

applied to newspaper joint operating 

agreements, and the United States has 

given its prior written approval. The 

Defendants may not deliberately hasten 

the failure of the Daily Mail: Under the 

Final Judgment, the Defendants may not 

take any action with the intent to cause 

the Daily Mail to become a failing 

newspaper. Unless it receives approval 

from the United States, the Defendants 

may not establish a termination date for 

the Daily Mail. 

In the event that Charleston 

Newspapers is permitted to cease 

publication of the Daily Mail, the Final 

Judgment requires that ownership of all 

of the intellectual property associated 

with that newspaper (such as its 

masthead, copyrights, trademarks, 

subscriber and advertiser lists, Internet 

URL, and archives) must, after 

satisfaction of any current, outstanding 

creditors, be transferred back to 

MediaNews at no cost to MediaNews 

and free of any liens or other 

encumbrances. This transfer 

requirement would also be triggered if 

the Defendants end their Limited 

Partnership or Joint Operating 

agreements. Prior to the closure of the 

Daily Mail, Gazette Company must 

obtain an appraisal of the fair market 


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value of the newspaper’s intellectual 

property. To the extent the appraisal 

determines that the assets may be freely 

disposed of by Gazette Company under 

the terms of Section 7.8 of the credit 

agreement with United Bank (or the 

equivalent provision of any future credit 

agreement), Gazette Company must 

transfer the intellectual property to 

MediaNews.(1) If the transfer cannot be 

accomplished due to any outstanding 

security interest or lien, Gazette 

Company must use its good faith efforts 

to obtain a release of the assets by the 

creditors. Once the intellectual property 

has been transferred, it may not be 

reacquired by Gazette Company. These 

portions of the Final Judgment are 

intended to prevent Gazette Company 

from retaining ownership of the Daily 

Mail intellectual property in the event 

that MediaNews wishes to continue 

publishing the newspaper 

independently of Charleston 

Newspapers, or if a third-party wishes 

to acquire these assets from MediaNews 

in order to compete against Gazette 

Company. Under the 2004 contracts, 

Gazette Company could retain the Daily 

Mail intellectual property upon the 

termination of the Joint Operating 

Agreement or the Limited Partnership 

Agreement unless MediaNews paid 

Gazette Company to get it back and 

assumed certain associated liabilities. If 

MediaNews did not want to buy back 

the intellectual property, it would 

remain under the permanent ownership 

of Gazette Company. If MediaNews did 

elect to buy back the intellectual 

property, Gazette Company held a right 

of first refusal to purchase it from 

MediaNews for 10 years after the end of 

the Joint Operating Agreement or the 

Limited Partnership Agreement, which 

limited the ability of third-parties to 

acquire the intellectual property to 

compete against Gazette Company. 

These provisions of the 2004 contracts 

have been removed from the new 

contractual arrangement. 

The Defendants’ revised contracts will 

put in place several new financial 

incentives that are intended to spur 

them to compete for readers and 

enhance the quality of their newspapers. 

First, as discussed above, if the Daily 

Mail ceases publishing, the Limited 

Partnership ends, or the Joint Operating 

Agreement ends, the Daily Mail 

intellectual property will, subject to 

satisfaction of current security interests, 

transfer to MediaNews at no cost. 

MediaNews would then be free to use or 

sell these assets as it sees fit. The 2004 

contracts imposed several conditions 

that substantially decreased the 

likelihood that MediaNews would ever 

own the Daily Mail intellectual property 

again. Under the revised contracts, the 

increased likelihood that MediaNews 

will receive these assets provides 

MediaNews with an ongoing incentive 

to increase their value. Second, 

concurrently with the settlement, 

MediaNews will receive a warrant 

entitling it to purchase Class B shares 

representing 20% of the equity in 

Charleston Newspapers Holdings 

Limited Partnership. Depending upon 

the future performance of the Daily 

Mail, the amount of equity MediaNews 

is eligible to purchase may be adjusted 

up or down. For each annual gain of 1% 

or more in Daily Mail circulation market 

share vis-a-vis the Gazette, MediaNews 

would be entitled to purchase an 

additional 1% of equity. Conversely, for 

each annual decline of 1% or more, the 

amount of equity MediaNews is entitled 

to purchase would decrease by 1%. The 

exercise price is the appraised value of 

a Class B share as of the date of the 

warrant’s issuance. The warrant can be 

exercised during a three-year window 

starting on the fifth anniversary of its 

issuance. MediaNews will be allowed to 

purchase any amount of equity it 

desires, up to the maximum permitted 

by the warrant. Thereafter, it is 

permitted to sell its shares to third 

parties (except for a publisher of a 

competing newspaper in Charleston 

with a circulation market share above 

5%). Class B shareholders are eligible to 

receive dividends that may be 

distributed by the Limited Partnership. 

The warrant will once again provide 

MediaNews a financial stake in the 

success of both the Daily Mail and the 

newspapers’ joint venture. 

Should the Daily Mail cease 

publishing at any time after the 

conversion of the warrant, Gazette 

Company must repurchase all of the 

outstanding Class B shares. This 

mandatory repurchase requirement is 

necessary to avoid providing the 

owner(s) of the Class B shares a 

financial incentive to terminate 

publication of the Daily Mail. 

Third, the revised Limited 

Partnership Agreement creates a further 

financial incentive by basing the size of 

the annual Daily Mail management fee 

paid to MediaNews on the performance 

of the paper. Under the 2004 

arrangement, MediaNews received a 

fixed management fee that did not vary 

based on the performance of the Daily 

Mail. The new Limited Partnership 

Agreement provides for a variable fee 

that can adjust upwards or downwards 

by as much as $25,000 depending on the 

annual changes in the Daily Mail’s 

circulation. The adjustment in the fee is 

subject to a floor of $225,000 per year. 

A fourth financial incentive consists 

of cash bonuses paid to the Circulation 

Director of Charleston Newspapers and 

the publisher of the Daily Mail for 

increases in Daily Mail circulation in a 

given six-month period. 

IV. Remedies Available to Potential 

Private Litigants 

Section 4 of the Clayton Act, 15 

U.S.C. 15, provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment will neither impair nor 

assist the bringing of any private 

antitrust damage action. Under the 

provisions of Section 5(a) of the Clayton 

Act, 15 U.S.C. 16(a), the proposed Final 

Judgment has no prima facie effect in 

any subsequent private lawsuit that may 

be brought against Defendants. 

V. Procedures Available for 

Modification of the Proposed Final 

Judgment 

The United States and Defendants 

have stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon the 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least sixty (60) days preceding the 

effective date of the proposed Final 

Judgment within which any person may 

submit to the United States written 

comments regarding the proposed Final 

Judgment. Any person who wishes to 

comment should do so within sixty (60) 

days of the date of publication of this 

Competitive Impact Statement in the 

Federal Register, or the last date of 

publication in a newspaper of the 

summary of this Competitive Impact 

Statement, whichever is later. All 

comments received during this period 

will be considered by the United States 

Department of Justice, which remains 

free to withdraw its consent to the 

proposed Final Judgment at any time 

prior to the Court’s entry of judgment. 

The comments and the response of the 

United States will be filed with the 

Court and published in the Federal 

Register. 

Written comments should be 

submitted to: John R. Read, Chief, 

Litigation III Section, Antitrust Division, 

United States Department of Justice, 450 

Fifth Street, NW., Suite 4000, 

Washington, DC 20530. 


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The proposed Final Judgment 

provides that the Court retains 

jurisdiction over this action, and the 

parties may apply to the Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

At several points during the litigation, 

the United States received from 

Defendants proposals or suggestions 

that would have provided less relief 

than is contained in the proposed Final 

Judgment. These proposals and 

suggestions were rejected. 

The United States considered, as an 

alternative to the proposed Final 

Judgment, proceeding with the full trial 

on the merits against Defendants that 

was scheduled to commence on April 

20, 2010. The United States is satisfied, 

however, that the prohibitions and 

requirements contained in the proposed 

Final Judgment will adequately address 

the competitive concerns regarding the 

unique local daily newspaper market in 

Charleston, and will avoid the delay, 

risks, and costs of further litigation. 

VII. Standard of Review Under the 

APPA for the Proposed Final Judgment 

The Clayton Act, as amended by the 

APPA, requires that proposed consent 

judgments in antitrust cases brought by 

the United States be subject to a sixtyday comment period, after which the 

court shall determine whether entry of 

the proposed Final Judgment ‘‘is in the 

public interest.’’ 15 U.S.C. 16(e)(1). In 

making that determination, the court, in 

accordance with the statute as amended 

in 2004, is required to consider: 

A. The competitive impact of such 

judgment, including termination of 

alleged violations, provisions for 

enforcement and modification, duration 

of relief sought, anticipated effects of 

alternative remedies actually 

considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the 

adequacy of such judgment that the 

court deems necessary to a 

determination of whether the consent 

judgment is in the public interest; and 

B. the impact of entry of such 

judgment upon competition in the 

relevant market or markets, upon the 

public generally and individuals 

alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public 

benefit, if any, to be derived from a 

determination of the issues at trial. 

15 U.S.C. 16(e)(1)(A) & (B). In 

considering these statutory factors, the 

court’s inquiry is necessarily a limited 

one as the United States is entitled to 

‘‘broad discretion to settle with the 

defendant within the reaches of the 

public interest.’’ United States v. 

Microsoft Corp., 56 F.3d 1448, 1461 (DC 

Cir. 1995); see generally United States v. 

SBC Commc’ns, Inc., 489 F. Supp. 2d 1 

(D.D.C. 2007) (assessing public interest 

standard under the Tunney Act).(2)

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

specific allegations set forth in the 

United States’ complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See Microsoft, 56 

F.3d at 1458–62. With respect to the 

adequacy of the relief secured by the 

decree, a court may not ‘‘engage in an 

unrestricted evaluation of what relief 

would best serve the public.’’ United 

States v. BNS, Inc., 858 F.2d 456, 462 

(9th Cir. 1988) (citing United States v. 

Bechtel Corp., 648 F.2d 660, 666 (9th 

Cir. 1981)); see also Microsoft, 56 F.3d 

at 1460–62; United States v. Alcoa, Inc., 

152 F. Supp. 2d 37, 40 (D.D.C. 2001). 

Courts have held that: 

[t]he balancing of competing social 

and political interests affected by a 

proposed antitrust consent decree must 

be left, in the first instance, to the 

discretion of the Attorney General. The 

court’s role in protecting the public 

interest is one of insuring that the 

government has not breached its duty to 

the public in consenting to the decree. 

The court is required to determine not 

whether a particular decree is the one 

that will best serve society, but whether 

the settlement is ‘‘within the reaches of 

the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel, 648 F.2d at 666 (emphasis 

added) (citations omitted).(3) In 

determining whether a proposed 

settlement is in the public interest, a 

district court ‘‘must accord deference to 

the government’s predictions about the 

efficacy of its remedies, and may not 

require that the remedies perfectly 

match the alleged violations.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 17; see 

also Microsoft, 56 F.3d at 1461 (noting 

the need for courts to be ‘‘deferential to 

the government’s predictions as to the 

effect of the proposed remedies’’); 

United States v. Archer-DanielsMidland Co., 272 F. Supp. 2d 1, 6 

(D.D.C. 2003) (noting that the court 

should grant due respect to the United 

States’ prediction as to the effect of 

proposed remedies, its perception of the 

market structure, and its views of the 

nature of the case). 

Courts have greater flexibility in 

approving proposed consent decrees 

than in crafting their own decrees 

following a finding of liability in a 

litigated matter. ‘‘[A] proposed decree 

must be approved even if it falls short 

of the remedy the court would impose 

on its own, as long as it falls within the 

range of acceptability or is ‘within the 

reaches of public interest.’ ’’ United 

States v. Am. Tel. & Tel. Co., 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citations 

omitted) (quoting United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975)), aff’d sub nom. Maryland 

v. United States, 460 U.S. 1001 (1983); 

see also United States v. Alcan 

Aluminum Ltd., 605 F. Supp. 619, 622 

(W.D. Ky. 1985) (approving the consent 

decree even though the court would 

have imposed a greater remedy). To 

meet this standard, the United States 

‘‘need only provide a factual basis for 

concluding that the settlements are 

reasonably adequate remedies for the 

alleged harms.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 17. 

Moreover, the court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that the United States has alleged in its 

Complaint, and does not authorize the 

court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459. Because the ‘‘court’s 

authority to review the decree depends 

entirely on the government’s exercising 

its prosecutorial discretion by bringing 

a case in the first place,’’ it follows that 

‘‘the court is only authorized to review 

the decree itself,’’ and not to ‘‘effectively 

redraft the complaint’’ to inquire into 

other matters that the United States did 

not pursue. Id. at 1459–60. As the 

United States District Court for the 

District of Columbia recently confirmed 

in SBC Communications, courts ‘‘cannot 

look beyond the complaint in making 

the public interest determination unless 

the complaint is drafted so narrowly as 

to make a mockery of judicial power.’’ 

SBC Commc’ns, 489 F. Supp. 2d at 15. 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of utilizing consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. 16(e)(2). This 

language effectuates what Congress 

intended when it enacted the Tunney 

Act in 1974, as Senator Tunney 

explained: ‘‘[t]he court is nowhere 


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Federal Register / Vol. 75, No. 47 / Thursday, March 11, 2010 / Notices 11727 

compelled to go to trial or to engage in 

extended proceedings which might have 

the effect of vitiating the benefits of 

prompt and less costly settlement 

through the consent decree process.’’ 

119 Cong. Rec. 24,598 (1973) (statement 

of Senator Tunney). Rather, the 

procedure for the public interest 

determination is left to the discretion of 

the court, with the recognition that the 

court’s ‘‘scope of review remains sharply 

proscribed by precedent and the nature 

of Tunney Act proceedings.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 11. 

VIII. Determinative Documents 

Other than the contracts that are 

attached as Exhibit A to the Final 

Judgment and incorporated therein, 

there are no determinative materials or 

documents within the meaning of the 

APPA that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Respectfully submitted, 

Charles T. Miller, 

United States Attorney. 

s/Stephen M. Horn 

Assistant United States. 

Attorney. 

Attorney for the United States (WVSB 1788), 

P.O. Box 1713, Charleston, WV 25326. 

Telephone: 304–345–2200, Fax: 304–347– 

5443, E-mail: steve.horn@usdoj.gov. 

s/Bennett J. Matelson 

Bennett J. Matelson, 

William H. Jones II, 

Matthew J. Bester, 

Deborah Roy, 

Attorneys for the United States, U.S. 

Department of Justice, Antitrust Division, 450 

Fifth Street, NW., Suite 4000, Washington, 

DC 20530. Telephone: (202) 616–5871, Fax: 

(202) 514–7308, E-mail: 

Bennett.Matelson@usdoj.gov. 

Dated: January 20, 2010. 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF WEST 

VIRGINIA CHARLESTON DIVISION 

UNITED STATES OF AMERICA, 

Plaintiff, v. DAILY GAZETTE 

COMPANY, and MEDIANEWS GROUP, 

INC., Defendants. 

Civil Action No. 2:07–0329 

Judge Copenhaver 

Magistrate Judge Stanley 

Filed: January 20, 2010 

Certificate of Service 

I hereby certify that on January 20, 

2010, I electronically filed the foregoing 

document with the Clerk of the Court 

using the CM/ECF system, which will 

send notification of such filing to the 

following CM/ECF participants: 

Lee H. Simowitz, Ronald F. Wick, Baker 

& Hostetler LLP, Washington Square, 

Suite 1100, 1050 Connecticut Avenue, 

NW., Washington, DC 20036. 

Benjamin L. Bailey, Brian A. Glasser, 

Bailey & Glasser LLP, 227 Capitol 

Street, Charleston, WV 25301. 

Alan L. Marx, Stephen C. Douse, King 

& Ballow, 1100 Union Street Plaza, 

315 Union Street, Nashville, TN 

37201. 

Michael T. Chaney John R. Hoblitzel, 

Kay Casto & Chaney, P.O. Box 2031, 

Charleston, WV 25327–2031, 

/s/ William H. Jones, II 

William H. Jones, II. 

Footnotes 

1. Section 7.8 of the United Bank 

agreement provides: 

Sale of Stock and Assets. No Credit 

Party shall sell, transfer, convey, assign 

or otherwise dispose of any of its 

properties or other assets, including the 

Stock of any of its Subsidiaries (whether 

in a public or a private offering or 

otherwise) or any of its Accounts, other 

than (a) the sale of Inventory in the 

ordinary course of business; (b) the sale 

or other disposition by a Credit Party of 

property that is obsolete or no longer 

used or useful in such Credit Party’s 

business and having a book value, not 

exceeding $100,000 in the aggregate in 

any Fiscal Year; and (c) the sale or other 

disposition of other property having a 

book value not exceeding $100,000 in 

the aggregate in any Fiscal Year. 

2. The 2004 amendments substituted 

‘‘shall’’ for ‘‘may’’ in directing relevant 

factors for court to consider and 

amended the list of factors to focus on 

competitive considerations and to 

address potentially ambiguous judgment 

terms. Compare 15 U.S.C. 16(e) (2004), 

with 15 U.S.C. 16(e)(1) (2006); see also 

SBC Commc’ns, 489 F. Supp. 2d at 11 

(concluding that the 2004 amendments 

‘‘effected minimal changes’’ to Tunney 

Act review). 

3. Cf. BNS, 858 F.2d at 464 (holding 

that the court’s ‘‘ultimate authority 

under the [APPA] is limited to 

approving or disapproving the consent 

decree’’); United States v. Gillette Co., 

406 F. Supp. 713, 716 (D. Mass. 1975) 

(noting that, in this way, the court is 

constrained to ‘‘look at the overall 

picture not hypercritically, nor with a 

microscope, but with an artist’s 

reducing glass’’). See generally 

Microsoft, 56 F.3d at 1461 (discussing 

whether ‘‘the remedies [obtained in the 

decree are] so inconsonant with the 

allegations charged as to fall outside of 

the ‘reaches of the public interest’ ’’). 

4. See United States v. Enova Corp., 

107 F. Supp. 2d 10, 17 (D.D.C. 2000) 

(noting that the ‘‘Tunney Act expressly 

allows the court to make its public 

interest determination on the basis of 

the competitive impact statement and 

response to comments alone’’); United 

States v. Mid-Am. Dairymen, Inc., 1977– 

1 Trade Cas. (CCH) ¶ 61,508, at 71,980 

(W.D. Mo. 1977) (‘‘Absent a showing of 

corrupt failure of the government to 

discharge its duty, the Court, in making 

its public interest finding, should * * * 

carefully consider the explanations of 

the government in the competitive 

impact statement and its responses to 

comments in order to determine 

whether those explanations are 

reasonable under the circumstances.’’); 

S. Rep. No. 93–298, 93d Cong., 1st Sess., 

at 6 (1973) (‘‘Where the public interest 

can be meaningfully evaluated simply 

on the basis of briefs and oral 

arguments, that is the approach that 

should be utilized.’’). 

[FR Doc. 2010–5095 Filed 3–10–10; 8:45 am] 

BILLING CODE 4410–11–P 


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