exv10w1



 





Exhibit 10.1




EXECUTION COPY




DISTRIBUTION AGREEMENT




          This Distribution Agreement (this “Agreement”) is made and entered into this 8th day of
August, 2007, between The Sun-Times Company (“Sun-Times”), individually and on behalf of Chicago
Sun-Times LLC, Chicago Group Acquisition LLC, Fox Valley Publications LLC, Midwest Suburban
Publishing, Inc., Pioneer Newspapers Inc. and The Post-Tribune Company LLC (collectively, the “Sun
Times Subsidiaries” and, together with Sun-Times, “STC”), and Chicago Tribune Company (“CTC”)
(hereinafter jointly the “Parties”).




          WHEREAS, STC is in the business of publishing the Chicago Sun-Times as well as the other
newspapers set forth in Schedule A (hereinafter the “Publications”); and




          WHEREAS, STC and CTC have determined that having CTC accomplish distribution of Publications
for STC will result in substantial cost savings and improvements to customer service for both STC
and CTC, will enhance the ability of both STC and CTC to market their publications and therefore
increase distribution penetration, and will make it possible to offer advertisers of both CTC and
STC greater choice with respect to zoned advertising.



NOW THEREFORE, the Parties agree as follows:




SECTION I — DEFINITIONS





	1.1	 	“CTC Contractors” is defined as independent contractors and other third parties utilized by
CTC to distribute its and other third party publications in the Distribution Area.
	 
	1.2	 	“CTC Distribution Center” is defined as the distribution centers listed on Schedule B and
such other distribution centers as may be mutually agreed upon by the Parties.
	 
	1.3	 	“Distribution Area” is defined as the geographic area encompassed on the date hereof by the
zip codes listed in Schedule F and such other zip codes as may be mutually agreed upon by the
Parties.
	 
	1.4	 	“Force Majeure Event” is defined as any event that prevents a party from performing its
obligations hereunder due to causes beyond the reasonable control of such party including,
without limitation, acts of God, acts of civil or military authorities, riots or civil
disobedience, wars, strikes, walk-outs, lock-outs or other labor or industrial disputes,
fires, terrorist attacks, or interruptions in telecommunications or Internet services, which
interruptions are specifically due to failure of regional Network Access Points or Internet
backbones or other failure affecting a significant number of telecommunications or Internet
users not accessing the CTC system. It is expressly agreed that interruptions, failures or
delays caused by CTC bandwidth or security issues shall not be considered a Force Majeure
Event.
	 
	1.5	 	“Hot Complaint” is defined as a delivery complaint that has escalated beyond normal
notifications and is deemed “urgent”.





 









 











	1.6	 	“Insert” is defined as an individual newspaper section and/or free standing advertising
insert. The Publications themselves are not inserts, and cannot be delivered together for
purposes of avoiding per copy distribution fees. Any other publication, reasonably considered
to be a stand-alone publication, whether or not owned or controlled by STC, is also not an
insert, and cannot be delivered with the Publications for purposes of avoiding per copy
distribution fees; provided, however, that the Plainfield Sun, to the extent it is inserted in
The Herald News and distributed in the 60435 zip code area, and the Lincolnway Sun, to the
extent it is inserted in The Herald News and distributed in the 60442 and 60451 zip code
areas, shall both be considered Inserts.
	 
	1.7	 	“Publications” is defined as set forth in the first recital above. If during the term of
this Agreement, STC purchases or otherwise acquires or establishes additional daily or weekly
newspapers to be delivered in the morning within the Distribution Area with similar delivery
standards to those set forth in this Agreement, such publications will be added to the
Publications set forth in Schedule A of this Agreement; provided, however, that if such
additional publication(s) will increase the overall volume of copies to be delivered pursuant
to this Agreement by fifteen percent (15%) or more over the volume of STC circulation as of
the date of this Agreement, then the Parties will negotiate in good faith and will mutually
agree upon (i) whether the additional publication(s) will be distributed under this Agreement
and (ii) the terms and conditions relating to the delivery of such additional publication(s).
	 
	1.8	 	“Saturation Sample Copies” is defined as copies of the Publications distributed free for a
limited time to non-subscribers or prospective advertisers and do not include copies delivered
as part of a contractual agreement or opt in/opt out free subscriptions. To be eligible for
reduced saturation sample copy delivery fees, saturation sample copies, plus all other copies
must be delivered to ninety percent (90%) of the households in a specified carrier route.
	 
	1.9	 	“Bulk Copies” is defined as copies related to Newspaper in Education programs, and other
programs where more than five (5) copies of the Publications are delivered to an individual
address.





SECTION II — HOME DELIVERY





	2.1	 	CTC’s Obligations and STC’s Obligations. CTC agrees to distribute the Publications,
through the CTC Contractors, to STC’s home delivery subscribers in quantities and throughout
areas agreed upon in accordance with the terms of this Agreement beginning on the dates set
forth on Schedule H to the extent that STC shall make available on a consistent basis to each
location requested by CTC, as described in Schedule B, a sufficient number of copies of the
Publications (and such inserts or extra sections as may be required) and at such arrival times
as described in Schedule B, to enable CTC to provide the Publications to CTC Contractors for
delivery to all required locations and subscribers as identified by STC. STC will arrange for
the delivery of all Publications from STC’s printing site(s) to the CTC Distribution Centers
at STC’s sole expense. Publications will be delivered on pallets and the pallets will be unloaded by STC personnel
into CTC-designated areas at the CTC Distribution Centers. CTC agrees to cause the
Publications to be delivered in a dry and undamaged condition at or before the




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	 	 	times
enumerated on Schedule C. If STC requests delivery standards that exceed those in Schedule
C and CTC agrees to provide them or if STC consents in writing to improved delivery
standards proposed by CTC, CTC and STC shall jointly share the cost of implementing those
improved standards on a pro rata basis (i.e. based upon the relative amounts of circulation
provided by STC, CTC and other publications distributed by CTC). CTC will not, and will
not permit or allow the CTC Contractors, through specific contractual commitments with the
CTC Contractors, to stamp upon, attach to, or insert in copies of the Publications provided
by STC any material not furnished by STC, nor will CTC insert such Publications within any
imprinted wrapping, covering, or container not furnished or sold to CTC by STC.
	 
	2.2	 	Workplace Rules and Regulations. STC shall cause its employees and independent
contractors to abide by CTC’s reasonable CTC Distribution Center rules and regulations at all
times when such persons are on CTC’s premises.
	 
	2.3	 	Fees.






	 	 	(a) For the services to be provided under this Section II, CTC shall receive fees and other
payments as described in Schedule D. Delivery fees include fees for clear plastic delivery
bags to be used as part of the delivered Publications.
	 
	 	 	(b) Additional or special inserting or delivery services to be provided by CTC (including,
but not limited to, one or more parts, advertising, product samples, and/or CDs) shall be
subject to mutual agreement of the Parties. On occasion STC will supply “Post-it” style
advertising notes to be applied to the front page news section of STC publications prior to
delivery. Application of such “Post-it” notes will be subject to a per piece rate as
outlined in Schedule D. Any additional or special inserting or delivery services requested
by STC shall require fourteen (14) days prior written notice to CTC, unless otherwise
mutually agreed by the parties. Bonus Day copies or additional copies added under other
special services that add more than twenty percent (20%) volume to any individual CTC
Distribution Center will require twenty-one (21) days notice. At CTC’s option, any day
with such event will not be counted in the complaint average for any service penalty or
incentive provision.
	 
	 	 	(c) STC reserves the right to require distribution under this Agreement of an additional
copy of the Publications to STC subscribers who normally do not subscribe to a given
delivery day. These “Bonus Day” copies shall be incorporated into existing delivery lists
and shall be distributed to customers by the normal delivery requirements in this
Agreement. Bonus Day copies shall be invoiced to STC at the agreed upon per copy rate and
STC shall compensate CTC for these additional fees based on the payment terms outlined in
Section 4.3. STC shall provide CTC fourteen (14) days notice prior to any Bonus Day.
	 
	 	 	(d) During the term of this Agreement, if any of STC’s Publications convert in whole or
part to a form of non-paid circulation, regular delivery fees set forth in Schedule D will
still apply. Non-paid circulation includes, but is not limited to, the following
categories: (i) “Controlled Circulation” is defined as a distribution to a specific end recipient, at a
specific address, and for a pre-determined duration of time (opt in or opt out); (ii)
“Requested Delivery” is defined as distribution to individuals who have made a specific




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	 	 	request for delivery and includes documentation of the request and dates of delivery; and
“Public Access Distribution” is defined as multiple copies of a publication intended for
consumers and distributed to a public place, and may include but is not limited to retail
establishments, street racks and apartments.
	 
	2.4	 	Late Deliveries and Redeliveries.






	 	 	(a) If CTC is notified by 10:00 A.M. on any delivery day that a copy of a Publication that
was to be delivered that day has not been received by the subscriber, CTC shall deliver
another (service) copy of that Publication to that subscriber (“redelivery”) within sixty
(60) minutes of receipt of request for redelivery. Service copies will be supplied by STC
for this purpose. CTC will be responsible for the cost of this redelivery unless the delay
in the delivery of Publications is due to STC’s failure to deliver Publications to the
specified CTC distribution facilities within sixty (60) minutes of the times specified on
Schedule B attached hereto (or, in the case of deliveries of The Beacon News and The
Courier News to the Elgin, North Aurora, Schaumburg and Woodstock CTC Distribution Centers,
within thirty (30) minutes of the times specified on Schedule B attached hereto).
	 
	 	 	(b) If STC fails to deliver the Publications to the specified CTC Distribution Centers
within sixty (60) minutes of the times specified on Schedule B attached hereto (or, in the
case of deliveries of The Beacon News and The Courier News to the Elgin, North Aurora,
Schaumburg and Woodstock CTC Distribution Centers, within thirty (30) minutes of the times
specified on Schedule B attached hereto) CTC shall not be obligated to deliver such
late-delivered Publications to STC home delivery subscribers the same day but shall make
commercially reasonable efforts through the CTC Contractors to deliver such late-delivered
STC Publications to STC home delivery subscribers the same day. Where such efforts require
a second delivery pass, and CTC is able to provide a second delivery pass, an additional
per copy fee as detailed in Schedule D will apply. However, if CTC is unable to do so, the
Publications will be delivered the next delivery day in conjunction with that day’s normal
deliveries. In this event, CTC shall receive only the regular per copy fee for the normal
delivery of each Publication and no additional per copy fee will be applied.
	 
	 	 	(c) Notwithstanding anything to the contrary set forth in this Section 2.4, and without
limiting this Section 2.4, if during the term of this Agreement STC’s delivery of any of
the Publications to one or more specified CTC Distribution Centers consistently runs more
than thirty (30) minutes later than the times specified on Schedule B, CTC shall be
entitled to provide written notice of such late deliveries to STC and STC will promptly
develop a plan intended to remediate such late deliveries and implement such plan within in
one (1) month of receipt of CTC’s notice.
	 
	2.5	 	Subscriber Complaints. Upon receipt of notice in writing or by computer or other
electronic transmission from STC of the name and address of a subscriber and the subject
matter of the subscriber complaint, CTC shall take substantially similar measures to resolve
the complaint as it takes to resolve similar complaints related to the delivery of non-CTC
publications distributed by CTC or its affiliates. CTC shall communicate the
resolution of all Hot Complaints to STC within twenty-four (24) hours following such
resolution.




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	2.6	 	Delivery List.
	 
	 	 	(a) CTC will receive from STC a delivery list containing the names and addresses of the
Publications’ home delivery subscribers subject to this Agreement, and CTC acknowledges
that this delivery list is and shall remain the property of STC and CTC will use the
information on STC’s delivery list only in connection with its delivery obligations herein.
STC may add to the delivery list new subscribers within the Distribution Area by providing
notice in writing or by email or other electronic transmission to CTC of the names and
addresses of such new subscribers and such other information as CTC may reasonably require.
CTC shall take such steps as may be required to commence deliveries to such new subscribers
within forty-eight (48) hours of receipt of notification from STC, unless delivery is
scheduled for later than forty-eight (48) hours from receipt of notification, such as in a
Sunday-only subscription. CTC shall notify STC promptly in the event the address of any
subscriber that STC adds to its delivery list shall be undeliverable. CTC will receive
from STC a daily start and stop report containing subscriber changes, which will be
provided in writing or by email or other electronic transmission. STC will send all
additions, deletions and other subscriber changes to the person(s) and addresses or numbers
(physical, email or fax) as indicated in Schedule E hereto. The contact information for
the person(s) listed in Schedule E may be changed by CTC from time to time upon notice to
STC. These changes will be entered, updated, and implemented within CTC’s network on a
daily basis.
	 
	 	 	(b) CTC agrees that the delivery list (as it is updated from time to time) will not be
transferred, exhibited or disclosed to any other person or firm, except that CTC may
disclose or exhibit the list to those CTC employees or CTC Contractors (and their
subcontractors and sub-agents) who require the information to fulfill the obligations under
this Agreement. CTC agrees to protect the confidentiality of the information contained
within the delivery list as provided in Section 4.6(b) below. CTC will permit STC to
conduct a yearly audit of its security policies, procedures and systems, upon at least five
(5) business days prior written notice and during normal business hours so as not to
materially effect CTC’s operation of its business. The cost of any security audits that
STC requests shall be paid for by STC.
	 
	 	 	(c) Upon termination of this Agreement, CTC will promptly deliver to STC the delivery
list(s) in both hard copy and electronic formats, and shall contractually require CTC
Contractors to destroy all copies thereof. CTC will also destroy, and will contractually
require CTC Contractors (and their subcontractors and sub-agents) to destroy, any database
or other tangible or electronic media that contains such information. CTC will certify in
writing compliance with the obligations set forth in this Section 2.6(c). Nothing in this
Section 2.6 shall be deemed to restrict CTC’s rights with respect to its own subscribers
and delivery list. Furthermore, STC acknowledges that CTC contacts all households in the
Distribution Area to market its own products, and this Agreement does not restrict any CTC
sales, marketing, and/or distribution efforts.
	 
	 	 	(d) The provisions of this Section 2.6 are in addition to those set forth in Section 4.6 of
this Agreement.




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	2.7	 	Complaint Ratios; Penalties; Incentives.
	 
	 	 	(a) As used herein, the term “Complaint Ratio” shall mean the number of STC customer
delivery complaints received per day per 1,000 home deliveries of the Publications provided
by CTC.
	 
	 	 	(b) As used herein, the terms “Complaint Target,” “Penalty Target” and Incentive Target”
shall mean the number of delivery complaints per 1,000 home deliveries of the Publications
provided by CTC as follows:





	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	COMPLAINT	 	 	PENALTY	 	 	INCENTIVE
	TIME PERIOD	 	 	TARGET	 	 	TARGET	 	 	TARGET
	 	 	 	 	 	 	 	 	 	 
	From the date of this
Agreement until 30 days
after commencement
of
delivery services

	 	 	3.5 — 4.5
	 	 	None
	 	 	None
	 	 	 	 	 	 	 	 	 	 
	From 30 days after
commencement of delivery
services to

December, 2007

	 	 	3.0 — 3.5
	 	 	Over 3.5
	 	 	None
	 	 	 	 	 	 	 	 	 	 
	January — March 2008

	 	 	3.0 — 3.25
	 	 	Over 3.25
	 	 	None
	 	 	 	 	 	 	 	 	 	 
	April — December 2008

	 	 	1.5 — 3.0
	 	 	Over 3.25
	 	 	None
	 	 	 	 	 	 	 	 	 	 
	January 2009 to end of Term

	 	 	1.5 — 3.0
	 	 	Over 3.0
	 	 	Under 1.5
	 	 	 	 	 	 	 	 	 	 






	 	 	(c) Beginning October 1, 2007, if at the end of any 4-week period, CTC’s average Complaint
Ratio for such 4-week period for all Publications combined exceeds the applicable Penalty
Target for the applicable time period set forth in the above table, CTC will pay STC as
liquidated damages, the sum of $25,000; provided, however, that for each day during the
relevant period an STC delivery to a CTC Distribution Center is over thirty (30) minutes
beyond the time set forth on Schedule B, complaints relating to such day(s)’ distribution
from the affected CTC Distribution Center, at CTC’s option, shall be excluded from the
4-week period. Additionally, should any Force Majeure Event occur, complaints relating to
such day(s)’ distribution, at CTC’s option, shall also be excluded from the relevant 4-week
period. Such $25,000 payment shall be made to STC within fourteen (14) days from the end
of the applicable measurement period.
	 
	 	 	(d) Beginning January 1, 2009, if at the end of any 4-week period, CTC’s average Complaint
Ratio for such 4-week period for all Publications combined is less than the Incentive
Target set forth in the above table, STC will pay CTC as an incentive payment the sum of
$25,000; provided, however, that for each day during the relevant period an STC delivery to
a CTC Distribution Center is over thirty (30) minutes beyond the time set forth on Schedule
B, complaints relating to such day(s)’ distribution from the affected CTC Distribution
Center, at CTC’s option, shall be excluded from the 4-week period. Additionally, should
any Force Majeure Event occur, complaints relating to such day(s)’ distribution, at CTC’s
option, shall also be excluded from the relevant 4-week period. Such $25,000 payment shall
be made to CTC within fourteen (14) days from the end of the applicable measurement period.





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	 	 	(e) CTC shall have the right to audit all STC late delivery complaint data upon five (5)
days written notice and STC shall provide to CTC STC’s method of calculating Complaint
Ratios. Any such audit by CTC will be conducted during normal business hours so as not to
materially effect STC’s operation of its business. The cost of any security audits that
CTC requests shall be paid for by CTC.
	 
	 	 	(f) Notwithstanding anything to the contrary set forth in this Section 2.7, and without
limiting this Section 2.7, if during the term of this Agreement one or more STC
Publications experiences a Complaint Ratio in the Penalty Target range for two (2)
consecutive weeks, STC shall be entitled to provide written notice to CTC of such problem
and CTC will promptly develop a plan intended to remediate such problem and implement such
plan within one (1) month of receipt of STC’s notice.
	 
	2.8	 	Bulk Deliveries. CTC agrees to provide distribution of STC Publications to specified
schools, colleges, hotels and other Bulk Copy delivery recipients, at STC’s request, at or
before the times set forth on Schedule C. CTC will receive from STC a delivery list
containing addresses of Bulk Copy delivery recipients. STC shall make available on a
consistent basis to each location requested by CTC, as described in Schedule B, a sufficient
number of copies of the Publications (and such inserts or extra sections as may be required)
and at such arrival times as described in Schedule B, to enable CTC to deliver the
Publications, through the CTC Contractors, to Bulk Copy delivery recipients. STC shall pay
CTC the fees for Bulk Copy deliveries described in Schedule D. Notwithstanding the otherwise
exclusive nature of this Agreement, nothing contained herein shall require STC to use CTC for
distribution of STC Publications to Bulk Copy delivery recipients within the limits of the
City of Chicago. CTC’s exclusivity provisions apply to all Bulk Copy deliveries in the
Distribution Area outside the limits of the City of Chicago.
	 
	2.9	 	Saturation Sample Deliveries. In the event STC offers a Saturation Sample Copy
distribution opportunity to CTC and CTC elects to undertake such opportunity, CTC shall
provide distribution of Saturation Sample Copies at or before the times set forth on Schedule
C. CTC will receive from STC a delivery list containing addresses of Saturation Sample Copy
delivery recipients. STC shall make available to each location requested by CTC, as described
in Schedule B, a sufficient number of Saturation Sample Copies and at such arrival times as
described in Schedule B, to enable CTC to deliver the Saturation Sample Copies, through the
CTC Contractors, to Saturation Sample Copy recipients. STC shall pay CTC the fees for
Saturation Sample Copy deliveries described in Schedule D. Notwithstanding the otherwise
exclusive nature of this Agreement, nothing contained herein shall require STC to use CTC for
distribution of Saturation Sample Copies within the Distribution Area.





SECTION III — SINGLE COPY





	3.1	 	CTC’s Obligations and STC’s Obligations. CTC agrees, through its CTC Contractors, to
distribute single copies of the Publications to single copy outlets in quantities and
throughout areas agreed upon in accordance with the terms of this Agreement beginning on the
dates set forth in Schedule H to the extent that STC shall make available on a consistent
basis to each location requested by CTC, as described in Schedule B, a sufficient number of
copies of the Publications (and such inserts or extra sections as may




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	 	 	be required) and at such arrival times as described in Schedule B, to enable CTC to cause
the delivery of the Publications to all sales outlets at the times outlined in Schedule C.
CTC, through the CTC Contractors, shall collect leftover copies (or a report of leftover
copies) of the Publications from retail outlets on a weekly basis. CTC will not be liable
for the refusal or inability of a retailer to pay for sold copies. In the event that a
retailer refuses or is unable to pay for copies sold, STC will remain at risk for
collection of such amounts and will not seek to collect any such amounts from CTC.
Notwithstanding the otherwise exclusive nature of this Agreement, within the City of
Chicago, STC reserves the right to distribute copies of the Publications in any manner
other than by means of home delivery. CTC shall have no rights, obligations or
responsibilities in connection with STC’s distribution of these copies.
	 
	3.2	 	Fees. CTC shall receive fees for single copy delivery, inserting and other services
as described in Schedule D.
	 
	3.3	 	Invoicing and Payment. CTC, through its CTC Contractors, shall be responsible for
invoicing and collecting monies due for all single copies sold in sales outlets in the
Distribution Area. The monies collected by CTC per this Section 3.3 shall be retained by CTC
and applied as a credit against the monies STC owes CTC for fees per Sections 2.3 and 3.2 of
this Agreement and shall in no event be remitted to STC directly by CTC or the CTC
Contractors. On or before the 15th of each month during the term hereof, CTC shall
provide to STC an accounting and reconciliation of all amounts invoiced and collected in
respect of Publications delivered by CTC hereunder during the prior month.
	 
	3.4	 	News Racks. STC shall provide newspaper vending racks to CTC, which remain the sole
property of STC (“STC Racks”). CTC, through its CTC Contractors, shall be responsible for the
basic appearance, safe placement and reporting of safe working condition of the STC Racks;
provided, however, that CTC shall not be responsible for the current condition or placement of
STC Racks currently in place. CTC agrees to contractually require the CTC Contractors to
notify it, and CTC in turn will provide such information received to STC reasonably promptly
in the event an STC Rack becomes unsafe or inoperable and cannot be repaired. CTC shall
contractually require the CTC Contractors to refrain from placing any materials in STC’s Racks
other than Publications made available to CTC by STC or newsrack cards and/or materials
supplied to CTC by STC. CTC shall contractually require the CTC Contractors to comply with
all municipal rack ordinances, including those municipalities with modular or common racks.
All licensing, maintenance, repairs, and regulatory fees shall be the sole responsibility of
STC. STC reserves the right to relocate the STC Racks within the Distribution Area at any
time.
	 
	3.5	 	Audit Bureau of Circulations. The Parties acknowledge that STC must accurately
report its circulation figures to the Audit Bureau of Circulations (“ABC”) and to the United
States Postal Service (“USPS”) on terms and in the forms dictated by ABC or the USPS, as the
case may be. Therefore, CTC agrees to provide to STC periodic and accurate reports of the
numbers of each of the Publications reported to it as distributed by the CTC Contractors as
well as the number of such Publications that were left over or remained unsold in forms and
with such frequency as are reasonably required by STC to comply with ABC or USPS requirements.
Without limiting the foregoing, CTC agrees to submit to STC’s office by Friday of each week,
a data file that includes returns by outlet for the week ending the previous Sunday, and CTC
agrees to submit to STC’s office within two




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	 	 	(2) weeks of the date of publication, an affidavit reporting the total number of leftover
copies each day. CTC also agrees to permit ABC (or any Alternative Auditor (as defined
herein)) and/or STC access to CTC Contractor draw/return and payment records, CTC
Distribution Centers and CTC Contractors as needed to comply with the audit procedures of
ABC or any Alternative Auditor. In addition, should the circulation of any of the
Publications be audited by a group or entity other than ABC during the term hereof (an
“Alternative Auditor”), CTC agrees to cooperate with STC to ensure that STC is able to
comply with such Alternative Auditor’s reporting rules and regulations.





SECTION IV — GENERAL





	4.1	 	Performance Standards. CTC shall be responsible for the accurate and timely
distribution of each of the Publications to homes, offices, and sales outlets in the
Distribution Area, and the provision of such other products and services as are contemplated
hereby, in each case using the same general standard of care exercised with respect to other
publications distributed by CTC (including, without limitation, publications owned by CTC or
its affiliates). Late arrival of other papers distributed by CTC, including the Chicago
Tribune, to CTC Distribution Centers shall not affect or delay CTC’s obligations hereunder to
timely deliver the Publications in the manner contemplated hereby. Notwithstanding that
certain of CTC’s obligations hereunder are designated herein as to be performed through the
CTC Contractors, STC shall be entitled to hold CTC directly responsible for each such
obligation undertaken by the CTC Contractors if CTC does not exercise the same general
standard of care with respect to the CTC Contractors’ performance of such obligations
hereunder as it exercises with respect to other publications distributed by CTC (including,
without limitation, publications owned by CTC or its affiliates)..
	 
	4.2	 	Exclusive Rights. Subject to Sections 2.8, 2.9 and 3.1 hereof, CTC has exclusive
rights to deliver the Publications in the Distribution Area.
	 
	4.3	 	Invoice and Payment. CTC agrees to invoice STC on a weekly basis for delivery
services rendered during the preceding week (Monday-Sunday). Any payments due must be made in
full within fourteen (14) days from the invoice date. Payment for all Publications will be
itemized and shall be made in one payment; provided, however, that such payment shall reflect
monies already retained by CTC per Section 3.3 of this Agreement. Interest on the unpaid
balance shall accrue at an annual percentage rate of twelve percent (12%) until paid in full.
	 
	4.4	 	Indemnification.
	 
	 	 	(a) Indemnification by STC. STC agrees to defend and indemnify CTC and its
directors, officers, employees, independent contractors, affiliates, successors, or assigns
(“CTC Indemnified Parties”), and hold them harmless against any and all liability, loss,
and expense (including reasonable attorney’s fees, costs, and legal expenses), arising from
(i) claims, arising either before or after the date of this Agreement, of libel, unfair
competition, infringements of trademarks, copyrights and other proprietary rights,
advertiser claims, claims by ABC, claims by any federal or state agency or department,
claims of violations of rights of privacy, plagiarism, and any other claims of any nature,





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	 	 	in each case arising from, or attributable to, the publication or content of each of the
Publications; (ii) claims arising before the date of this Agreement relating or
attributable to the circulation of each of the Publications; (iii) claims of third parties,
including advertisers, arising from or relating to the reporting of circulation of and by
the Publications; (iv) claims arising before or after the effective date of this Agreement
that are based upon or arise from any action taken or omitted to be taken by STC in
connection with the transition of the distribution of the Publications to CTC from STC,
including without limitation any claims brought by or on behalf of STC employees,
contractors (other than CTC and its affiliates and the CTC Contractors), carriers, agents,
customers, third parties, federal or state agencies or departments, landlords (including
without limitation the landlords under the Leases (as defined in Section 4.25 of this
Agreement)) arising prior to the date or dates such Leases are assigned to CTC, or others;
(v) claims made by or on behalf of any employee of STC for damage or injury if such claim,
if made against STC, would otherwise be subject to limitation under applicable workers
compensation laws or regulations; or (vi) any breach of the terms of this Agreement by STC.
STC also agrees to defend and indemnify the CTC Indemnified Parties from and against all
damages, costs, claims and actions (including reasonable attorney’s fees, costs, and legal
expenses) for, or on account of, any direct or indirect injury or damage, including death,
to persons or property which may be occasioned by or result from any intentional or
negligent acts or omissions of STC, its officers, agents, employees, or subcontractors
(other than CTC and its affiliates and the CTC Contractors) during the performance of the
work contemplated by this Agreement.
	 
	 	 	(b) Indemnification by CTC. CTC agrees to defend and indemnify STC and its
directors, officers, employees, independent contractors, affiliates, successors, or assigns
(“STC Indemnified Parties”), and hold them harmless against any and all liability, loss,
and expense (including reasonable attorney’s fees, costs, and legal expenses), arising from
(i) the Assumed Liabilities (as defined in Section 4.25 of this Agreement), or the
assignment or assumption thereof; (ii) claims arising before or after the effective date of
this Agreement that are based upon or arise from any action taken or omitted to be taken by
CTC or its affiliates in connection with the transition of the distribution of the
Publications to CTC from STC, including without limitation any claims brought by or on
behalf of CTC employees, contractors, carriers, agents, customers, third parties, federal
or state agencies or departments, landlords, or others; (iii) claims made by or on behalf
of any employee of CTC for damage or injury if such claim, if made against CTC, would
otherwise be subject to limitation under applicable workers compensation laws or
regulations; or (iv) any breach of the terms of this Agreement by CTC. CTC also agrees to
defend and indemnify the STC Indemnified Parties from and against all damages, costs,
claims and actions (including reasonable attorney’s fees, costs, and legal expenses) for,
or on account of, any direct or indirect injury or damage, including death, to persons or
property which may be occasioned by or result from any intentional or negligent acts or
omissions of CTC, its officers, agents, employees, or subcontractors during the performance
of the work contemplated by this Agreement.
	 
	 	 	(c) Special Damages. Neither CTC nor STC shall be liable to the other for any
consequential, indirect, special, incidental or punitive damages incurred as a result of
either Party’s performance or non-performance of their obligations under this Agreement.




10









 












	 
	 	 	(d) Claim Notice. A CTC Indemnified Party or a STC
Indemnified Party seeking indemnification under this Agreement shall give written notice (a “Claim Notice”) to the
Party from whom indemnity is sought (the “Indemnifying Party”). The Claim Notice shall be
given within a reasonable time after the CTC Indemnified Party or STC Indemnified Party
becomes aware of the facts indicating that indemnification may be warranted. Each Claim
Notice shall specify the nature of the underlying claim or demand. Failure or delay in
providing any Claim Notice to any Indemnifying Party will not relieve such Indemnifying
Party of any liability it may have to the Indemnified Party, except and only to the extent
that such failure or delay causes actual harm to the Indemnifying Party with respect to
such claim.
	 
	 	 	(e) Procedure with Respect to Third Party Claims.






       (i) As promptly as reasonably practicable after the commencement of any legal
proceeding by a third party against any STC Indemnified Party or CTC Indemnified Party, as
appropriate (for purposes of this Section 4.4(e), the “Indemnified Party”), which could
give rise to a claim for indemnification under Section 4.4, the Indemnified Party shall
give a Claim Notice to the Indemnifying Party pursuant to Section 4.4(d). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within five (5) business days
after the Indemnified Party’s receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the legal
proceeding. The Indemnifying Party shall then be entitled to participate in such legal
proceeding and, to the extent that it shall wish, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnified Party and, after notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the defense
thereof, the Indemnifying Party shall not be liable to such Indemnified Party under Section
4.4 for any fees of other counsel or any other expenses, in each case subsequently incurred
by such Indemnified Party in connection with the defense thereof.




       (ii) If an Indemnifying Party assumes the defense of such a Proceeding, (a) no
compromise or settlement thereof may be effected by the Indemnifying Party without the
Indemnified Party’s consent (which shall not be unreasonably withheld) unless (i) there is
no finding or admission of any violation of Law or any violation of the rights of any
person by, and no effect on any other claims that may be made against, the Indemnified
Party and (ii) the sole relief provided is monetary damages that are paid by the
Indemnifying Party and (b) the Indemnifying Party shall have no liability with respect to
any compromise or settlement thereof effected by the Indemnified Party without its consent
(which shall not be unreasonably withheld). If the Indemnifying Party chooses to defend
any legal proceeding, the Parties hereto shall cooperate in the defense or prosecution of
such legal proceeding. Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to the Indemnifying Party of records and
information that are reasonably relevant to such proceeding, and making employees available
on a mutually convenient basis to provide additional information and explanation of any
material provided hereunder.




       (iii) If the Indemnified Party gives the Indemnifying Party written notice of the
commencement of any legal proceeding and the Indemnifying Party does not, within 30 days
after the Indemnified Party’s notice is given, give written notice to the Indemnified Party
of its election to assume the defense thereof, the Indemnifying Party shall be bound by any
determination made in such proceeding or any compromise or settlement thereof
effected by the Indemnified Party.



11









 






       (iv) Notwithstanding the foregoing provisions of this Section 4.4(e), if an
Indemnified Party provides the Indemnifying Party with evidence that there is a reasonable
probability that an action may materially and adversely affect it or its affiliates other
than as a result of monetary damages, such Indemnified Party may, by written notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle such action,
but the Indemnifying Party shall have no liability with respect to a judgment entered in
any action so defended, or a compromise or settlement thereof entered into without its
consent.




	4.5	 	Insurance.
	 
	 	 	(a) STC agrees to purchase and maintain, during the term of this Agreement, insurance for
its employees performing services hereunder as follows: (i) Worker’s Compensation and
Employers’ Liability Insurance in such amounts as may be required by applicable state law;
(ii) Automobile Liability Insurance with limits of not less than $500,000 for each injury
person and $500,000 for each occurrence, and insurance against liability for damage to
property of third persons with a limit of not less than $50,000 for each occurrence; and
(iii) General Personal Injury and Property Damage Liability Insurance with limits of not
less than $1,000,000.
	 
	 	 	(b) STC will furnish certificates of insurance to CTC as evidence of the above stated
coverage which shall contain a provision for fifteen (15) days written notice to CTC of
cancellation or non-renewal.
	 
	 	 	(c) CTC agrees to purchase and maintain, during the term of this Agreement, insurance for
its employees performing services hereunder as follows: (i) Worker’s Compensation and
Employers’ Liability Insurance in such amounts as may be required by applicable state law;
(ii) Automobile Liability Insurance with limits of not less than $500,000 for each injured
person and $500,000 for each occurrence, and insurance against liability for damage to
property of third persons with a limit of not less than $250,000 for each occurrence; and
(iii) General Personal Injury and Property Damage Liability Insurance with limits of not
less than $1,000,000.
	 
	 	 	(d) CTC will furnish certificates of insurance to STC as evidence of the above stated
coverage which shall contain a provision for fifteen (15) days written notice to CTC of
cancellation or non-renewal.
	 
	4.6	 	Confidentiality.
	 
	 	 	(a) Subject to the conditions contained herein, in the course of performing this Agreement,
each Party (“Receiving Party”) will be furnished with certain Confidential Information of
the other (“Disclosing Party”). The term “Confidential Information” means all information
concerning the Disclosing Party or its business, products or services that is not generally
known to the public, regardless of whether such information is provided to the Receiving
Party orally, in writing or other tangible form, via email or in electronic form.
Confidential Information includes, without limitation, technical, financial or business
information or data; product plans, delivery lists and other lists of




12









 












	 	 	actual or potential customers. Confidential Information also includes all information that
the Disclosing Party is required by third parties (including the Disclosing Party’s
customers) to keep confidential.
	 
	 	 	(b) The Receiving Party shall not use any portion of the Confidential Information in any
manner or for any purpose other than in connection with the performance of this Agreement
(the “Permitted Purpose”). At all times that the Receiving Party is in possession of
Confidential Information, the Receiving Party shall (i) safeguard the Confidential
Information from unauthorized use and disclosure, using at least the same level of
protection as the Receiving Party affords its own confidential and proprietary information,
but in no event shall the Receiving Party use less than a reasonable degree of care to
prevent the unauthorized use or disclosure of such Confidential Information; (ii) disclose
the Confidential Information to no one other than employees, contractors (and their
subcontractors and sub-agents), each with a specific need to know in order to perform the
Permitted Purpose; and (c) advise all such employees and independent contractors of their
obligations with respect to the Confidential Information. Where CTC is the Receiving
Party, CTC further agrees that all of the independent contractor agreements signed by CTC
Contractors will contain provisions providing for the imposition of penalties for breach of
confidentiality, and that CTC will enforce such contractual provisions with respect to
STC’s Confidential Information to substantially the same extent it enforces such provisions
with respect to its own Confidential Information.
	 
	 	 	(c) No press release of the existence or terms of this Agreement or the transactions
contemplated hereby shall be made by either Party without the consent of the other Party
and each Party shall furnish to the other Party advance copies of any release which it
proposes to make public concerning this Agreement or the transactions contemplated hereby
and the date upon which such Party proposes to make public such press release; provided,
however, that nothing in this Agreement shall prohibit CTC or STC journalists or other
journalists working for Tribune Publishing newspapers from commenting or reporting about
the existence or terms of this Agreement using any information, data or materials that are
independently discovered or publicly known.
	 
	 	 	(d) This Section 4.6 shall not, however, be construed to prohibit the Receiving Party from
(i) making any disclosures that it is required to make by law, the rules of any stock
exchange or market, court of law or other legal process; provided that Receiving Party (A)
gives the Disclosing Party reasonably prompt written notice of an impending disclosure
pursuant to this sentence, (B) provides reasonable assistance to the Disclosing Party in
opposing or limiting the compelled or required disclosure and (C) makes only such
disclosure, in both manner and content, as is compelled or required, (ii) disclosing this
Agreement or its terms to its attorneys, accountants, lenders, agents or advisors, (iii)
using any general knowledge, ideas, concepts, skills, know-how and expertise (including
general knowledge related to techniques, methodologies, practices and processes) acquired
or developed in connection with this Agreement, so long as such use does not disclose
information pertaining specifically to the other Party or its business operations; or (iv)
using any information, data or materials that are independently discovered, publicly known
or that have been rightfully received from any third-party source or sources without any
violation or obligation of nondisclosure.




13









 












	 	 	(e) All Confidential Information, including any documents, copies, reproductions,
extracts or summaries which contain or embody such Confidential Information (regardless of
who made such) shall be and remain the property of the Disclosing Party. Upon request by
the Disclosing Party or upon completion of the activities constituting the Permitted
Purpose, the Receiving Party must promptly re-deliver to the Disclosing Party all
Confidential Information furnished to the Receiving Party in tangible form, and any
documents, copies, reproductions, extracts or summaries which contain or embody any
Confidential Information (regardless of who made such). Upon the Disclosing Party’s
request, an officer of the Receiving Party will certify as to its compliance with this
Section 4.6.
	 
	 	 	(f) The Receiving Party shall notify the Disclosing Party reasonably promptly upon
discovery of any unauthorized disclosure or use of Confidential Information. The Receiving
Party will cooperate with the Disclosing Party in a commercially reasonable manner to help
the Disclosing Party regain possession of its Confidential Information and/or to prevent
further unauthorized use or disclosure. In the event of the Receiving Party’s threatened
or actual breach of the terms of this Agreement, the Disclosing Party shall have no
adequate remedy at law and shall be entitled to (i) seek all equitable remedies, including
immediate injunctive and other equitable relief (without bond and without the necessity of
showing actual monetary damages) enjoining the Receiving Party and every other party from
breaching the terms of this Agreement; and (ii) any other legal remedies that may be
available.
	 
	 	 	(g) Nothing in this Agreement shall in any way affect or limit CTC journalists, STC
journalists, or other journalists for other Tribune Company newspapers from reporting on
any aspect of CTC’s or STC’s business or personnel, using any information, data or
materials that are independently discovered, or independently obtained, or publicly known.
In addition, nothing in this Agreement shall be construed to prevent CTC or STC from
affirmatively marketing and promoting their respective publications to all potential
subscribers without use of the other Party’s Confidential Information.
	 
	4.7	 	Term & Termination.
	 
	 	 	(a) This Agreement shall commence on August 8, 2007 and continue through August 31, 2017 or
until terminated, suspended, or extended in a manner as prescribed below:






       (i) Either Party may terminate this Agreement, without cause, upon the giving of three
(3) years notice in writing to the other Party, said termination being effective three (3)
years from the date upon which notice is given under this Section 4.7(a).




       (ii) Failure by STC to meet its payment obligations contained in Sections 2.3, 3.2 and
4.3 of this Agreement is a material breach of this Agreement and CTC reserves the right to
give written notice to STC to cure such default within thirty (30) days; provided, however,
that any failure to meet a payment obligation by STC shall not be a material default if and
to the extent that the payment amount in question is the subject of a good faith dispute by
STC and such good faith dispute has been asserted by STC in writing. If STC has not cured
a payment default within thirty (30) days after notice, CTC shall be entitled, in addition
to any other rights it may have under this Agreement or otherwise under law, to terminate
this Agreement immediately.



14









 






       (iii) A breach by STC of the exclusivity covenant contained in Section 4.2 is a
material breach of this Agreement and CTC reserves the right to give written notice to STC
to cure such default within sixty (60) days. If STC has not cured such default within
sixty (60) days after notice, CTC shall be entitled, in addition to any other rights it may
have under this Agreement or otherwise under law, to terminate this Agreement immediately.




       (iv) Failure by CTC to perform a material term of this Agreement shall entitle STC to
give written notice to CTC to cure such default within thirty (60) days. If CTC has not
cured such default within thirty (60) days after receipt of written notice, STC may at its
discretion terminate this Agreement, subject to the transition provisions set forth in
Section 4.8, in addition to any other rights it may have under this Agreement or otherwise
under law.




       (v) In the event that an event or multiple events reasonably proximate in time and
related in subject matter, outside of CTC’s reasonable control, increase(s) CTC’s costs to
perform the distribution services provided under this Agreement and for all other
publications distributed by CTC (including, without limitation, publications owned by CTC
or its affiliates) by more than fifteen percent (15%) over the aggregate cost to perform
such services as of the date immediately prior to the occurrence of such event or events
(an “Extraordinary Cost Increase”), then CTC shall give written notice to STC detailing the
components of the Extraordinary Cost Increase and revised fee schedules determined in
accordance with Schedule D-2 attached hereto. Within thirty (30) days of receipt of such
written notice, STC shall provide CTC with written notice of its election to either (1)
continue the Agreement at the increased rates specified in CTC’s notice; or (2) terminate
the Agreement at such time specified in the notice. In the event STC elects to terminate
the Agreement pursuant to the immediately preceding sentence, the increased rates will
apply commencing thirty (30) days following receipt of CTC’s notice communicating the
Extraordinary Cost Increase through the end of the term as specified in STC’s termination
notice. Notwithstanding the foregoing, increases in fuel expenses shall not qualify as an
Extraordinary Cost Increase, it being the intention of the Parties that the Fuel Escalator
contemplated by Section 4.9 hereof shall be the sole and exclusive price adjustment
mechanism for changes in fuel costs.




       (vi) Beginning in August 2013, the Parties shall meet and confer in good faith for the
purpose of renegotiating the fees, rates and other terms set forth herein for periods
beyond the expiration of the initial ten (10) year term. The Parties shall complete
negotiations of term, fees and rates for renewal no later than August 1, 2014.




	 	 	(b) The terms and conditions of this Agreement that, by their sense and context, are
intended to survive the expiration or termination of this Agreement, including specifically
and without limitation the provisions of Section 4.6 of this Agreement, shall so survive
the expiration or termination of this Agreement, regardless of the reason for such
expiration or termination.
	 
	4.8	 	Transition Upon Termination. Notwithstanding anything else in this Agreement to the
contrary, in the event that this Agreement is not renewed at the end of the term hereof, or is
terminated for any reason other than for a breach of (i) STC’s payment obligations pursuant to
Sections 2.3, 3.2 and 4.3 that is not cured as contemplated by




15









 












	 	 	Section 4.7(a)(ii) hereof; or (ii) STC’s exclusivity obligations pursuant to Section 4.2 that is
not cured as contemplated by Section 4.7(a)(iii) hereof, CTC shall cooperate with STC in
the rebuilding of a new separate distribution network. In the event of a termination of
this Agreement by CTC, STC shall have the right to terminate this Agreement before the end
of the notice period mandated hereby in STC’s sole and unrestricted discretion.
	 
	4.9	 	Fuel Escalator.
	 
	 	 	(a) As used in the Agreement, the term “Base Rate” shall mean $3.06 per gallon of regular
grade gasoline.
	 
	 	 	(b) If during the term of this Agreement, the retail price of regular grade gasoline in the
Chicago metropolitan area, determined with reference to the Energy Information
Administration retail price Index (on an average per gallon basis) as published at
www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/padd_chicago_mini_report.html
(“EIA Index”), increases by at least $0.50 per gallon over the Base Rate, STC shall pay CTC
an additional $8,750 weekly for each full $0.50 increment over the Base Rate. The EIA
Index is published weekly, and additional fuel escalator charges shall be evaluated weekly
as each new index is published. Each such surcharge shall apply only for so long as the
price of regular grade gasoline remains at or above the $0.50 per gallon increase related
to such surcharge and no surcharge shall be required if the price of regular grade gasoline
returns to the Base Rate or below. STC shall make any payments to CTC required under this
Section 4.9(a) on a monthly basis.
	 
	 	 	(c) If during the term of this Agreement, the EIA Index, decreases by at least $0.50 per
gallon below the Base Rate, CTC shall provide a weekly $8,750 credit to STC for each full
$0.50 increment under the Base Rate. The EIA Index is published weekly, and additional
fuel escalator credits shall be evaluated weekly as each new index is published. Each such
credit shall apply only for so long as the price of regular grade gasoline remains at or
below the $0.50 per gallon decrease related to such credit and no credit shall be required
if the price of regular grade gasoline returns to the Base Rate or above.
	 
	4.10	 	Zoning. In order to increase advertiser options for zoned advertising, during the
term of this Agreement, STC may avail itself at no charge of CTC’s newspaper and newspaper
delivered pre-print zoning capabilities for delivery of the Publications. In the event CTC
further refines its zoning options, CTC will also make available to STC the new zoning options
at the time CTC implements them. If CTC restricts or limits current zoning capabilities, CTC
will provide STC with (i) three (3) months advance notice of these zoning changes. CTC agrees
not to restrict or limit its zoning levels below the zip code level.
	 
	4.11	 	Governing Law. This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of the State of
Illinois without reference to the principles governing conflicts of laws. The Parties agree
that courts in Cook County, Illinois, shall have exclusive jurisdiction over any dispute
arising hereunder.
	 
	4.12	 	Notices. All notices, requests, demands and other communications required or
permitted to be given or delivered under or by reason of the provisions of this Agreement
shall




16









 












	 	 	(unless otherwise specifically provided herein) be in writing (which shall include notice
by telecopy or like transmission), and shall be deemed given upon actual receipt (or
refusal of such receipt) and may be sent by personal delivery, facsimile transmission,
overnight Federal Express or similar bonded, overnight courier service or certified
first-class mail, return receipt requested, to the Parties at the addresses and facsimile
numbers set forth below (or such other addresses and facsimile numbers as a Party may have
specified by notice given to the other parties hereto pursuant to this provision):






	 	 	 	 	 
	 	If to CTC:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Chicago Tribune Company	 	 
	 

	 	777 W. Chicago Avenue	 	 
	 

	 	Chicago, IL 60610-2489	 	 
	 

	 	Attn:
	Tony Hunter
	 

	 	 	Senior Vice President
	 

	 	 	Circulation & Operations
	 

	 	Fax:
	(312) 222-2353
	 
	 	 	 	 
	 	with a copy to:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Tribune Company	 	 
	 

	 	435 N. Michigan Avenue	 	 
	 

	 	Chicago, IL 60611	 	 
	 

	 	Attn:
	General Counsel
	 

	 	Fax:
	312-222-4206
	 
	 	 	 	 
	 	If to STC:
	 	 	 	 
	 
	 	 	 	 
	 

	 	The Sun-Times Company	 	 
	 

	 	c/o Sun-Times Media Group, Inc.	 	 
	 

	 	350 North Orleans Street 10-S	 	 
	 

	 	Chicago, IL 60654	 	 
	 

	 	Attn:
	Vice President, Operations
	 

	 	Fax:
	312-321-2199
	 
	 	 	 	 
	 	with a copy to:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Legal Department	 	 
	 

	 	Sun-Times Media Group, Inc.	 	 
	 

	 	350 North Orleans Street 10-S	 	 
	 

	 	Chicago, IL 60654	 	 
	 

	 	Attn:
	General Counsel
	 

	 	Fax:
	312-321-0629






17











 









	4.13	 	Successors & Assigns. This Agreement shall be binding upon and shall inure to the
benefit of each of the Parties hereto and their respective successors and permitted assigns.
	 
	4.14	 	Waste Disposal. Any waste or trash resulting from materials provided by STC to CTC
or CTC Contractors shall be the sole responsibility of CTC.
	 
	4.15	 	Assignment. No right, obligation or interest in this Agreement shall be assigned by
either Party, whether by action of law or otherwise; provided, however, that (a) CTC will
assign all of its rights and obligations under this Agreement to any party that succeeds to
substantially all of the assets of CTC or CTC’s newspaper distribution business whether
through merger, buy-out or otherwise and will require that the successor/purchaser assume all
obligations of this Agreement; (b) STC will assign all of its rights and obligations under
this Agreement to any party that succeeds to substantially all of the assets of STC whether
through merger, buy-out or otherwise and will require that the successor/purchaser assume all
obligations of this Agreement; and (c) if any of the Sun-Times Subsidiaries or the
Publications are sold, transferred or otherwise acquired by another party, STC shall, as a
condition of such transfer, require that the purchaser or transferee agrees to assume all of
STC’s obligations under this Agreement as they relate to the purchased or transferred
Publication or Publications. In the event of an assignment contemplated by Section 4.15(c),
the rates contained in this Agreement and attached Schedules will remain in effect as to such
transferred Publication or Publications for only three (3) years from the date of sale or
transfer of such Publication or Publications.
	 
	4.16	 	Inflation Adjustment. Subject to adjustments relating to an Extraordinary Cost
Increase as provided in Section 4.7(a)(v), the fees and rates set forth in Schedule D shall
remain in effect until December 31, 2012. Thereafter, beginning on January 1, 2013 and
effective on each January 1 for the balance of the term of this Agreement, the fees and rates
set forth in Schedule D for the next twelve (12) month period shall be adjusted to reflect the
year-over-year percentage change from the prior year in the Chicago-Gary-Kenosha Consumer
Price Index for All Urban Consumers (CPI-U), calculated without giving effect to changes in
gasoline prices.
	 
	4.17	 	Relationship of the Parties. The Parties are independent contractors and each of
them may engage in any other business or employment, including the delivery and sale of other
publications or products. If required by applicable law, Form 1099 will be completed and sent
to the Internal Revenue Service each year reporting fees paid to CTC for services rendered.
The Parties acknowledge and agree that this Agreement is limited to the distribution of the
Publications as provided herein with the intent of promoting efficiency, customer service and
the ability of each Party to offer zoned advertising to advertisers. The Parties shall
continue to compete in all other respects. This Agreement does not limit or restrict either
Party’s ability to compete in the marketing or sale of each Party’s publications or
advertising within those publications and neither Party shall perform or fail to perform its
respective obligations hereunder in a manner calculated to limit or restrict the other Party’s
ability to so compete. In particular, the Parties shall continue their respective independent
efforts to promote and expand their readership base, to aggressively market to advertisers and
to constantly improve the editorial content of their respective publications. Each Party
shall remain solely responsible for the publication, printing/production, advertising
solicitation, circulation solicitation, business development, establishment of advertising
rates and establishment of circulation rates for




18









 












	 	 	each of their respective publications and shall not coordinate or collaborate with the
other Party on any of the foregoing matters. There shall be no merger, combination or
amalgamation of editorial or reportorial staffs hereunder and all editorial policies of
each Party’s respective publications will continue to be independently determined.
	 
	4.18	 	Intellectual Property. Neither Party may use any trademarks, trade names, slogans,
or logos or other intellectual property of the other Party in connection with its performance
of its obligations hereunder without the prior written consent of the other Party.
	 
	4.19	 	Force Majeure Event. If either Party is unable to carry out the whole or any part of
its obligations under this Agreement by reason of a Force Majeure Event, and which by exercise
of reasonable due diligence, such affected Party could not reasonably have been expected to
avoid, overcome or obtain, or cause to be obtained, a commercially reasonable substitute
therefor, then the performance of the obligations under this Agreement of such Party as they
are affected by such cause will be excused during the continuance of the inability so caused.
No Party will be relieved of its obligations hereunder if its failure of performance is due to
removable or remediable causes which such Party fails to remove or remedy using commercially
reasonable efforts within a reasonable time period. A Party that is rendered unable to
fulfill any of its obligations under this Agreement by reason of a Force Majeure Event will
give prompt notice of such fact to the other Party, followed by written confirmation of
notice, and will exercise due diligence to remove such inability with all reasonable dispatch.
	 
	4.20	 	Representations and Warranties.
	 
	 	 	(a) Of CTC. CTC represents and warrants as follows:






       (i) CTC has the full right and power to enter into and perform its obligations under
this Agreement and that there is no contract or agreement with any other person, firm, or
corporation which will in any manner interfere with rights granted or obligations assumed
herein.




       (ii) CTC is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. CTC (i) has all requisite corporate power to own,
operate and lease its properties and carry on its business as the same is now being
conducted and (ii) is qualified to do business as a foreign corporation and is in good
standing in the State of Illinois. This Agreement has been duly and validly executed and
delivered by CTC and constitutes the legal, valid and binding agreement of CTC, enforceable
against CTC in accordance with its terms.




       (iii) Neither the execution and delivery by CTC of this Agreement, nor the performance
by CTC of its obligations hereunder (a) violates, is in conflict with, accelerates the
performance required by or constitutes a default (or an event which, with notice or lapse
of time or both, would constitute a default), requires any consent, approval or
authorization under or would result in a loss of any benefit to which CTC or any of its
subsidiaries is entitled under any material agreement, or (b) violates the certificate of
incorporation of CTC, any law or any judgment, decree or order of any court applicable to
CTC or, to CTC’s knowledge, the CTC Contractors.



19









 






       (iv) CTC is not required to obtain any consent, approval or authorizations of, or make
any declaration, filing or registration with, any person or entity (including any
governmental body) in connection with the execution, delivery and performance by CTC of
this Agreement.




	 	 	(b) Of STC. Sun-Times represents and warrants, on behalf of itself and each of the
Sun-Times Subsidiaries, as follows:






       (i) Each of the Sun-Times and the Sun-Times Subsidiaries has the full right and power
to enter into and perform its respective obligations under this Agreement and that there is
no contract or agreement with any other person, firm, or corporation which will in any
manner interfere with rights granted or obligations assumed herein.




       (ii) Each of the Sun-Times and the Sun-Times Subsidiaries is a corporation or limited
liability company, as appropriate, duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Sun-Times and the Sun-Times
Subsidiaries (i) has all requisite corporate or limited liability company power to own,
operate and lease its properties and carry on its business as the same is now being
conducted and (ii) is qualified to do business as a foreign corporation or limited
liability company and is in good standing in the State of Illinois. This Agreement has
been duly and validly executed and delivered by STC and constitutes the legal, valid and
binding agreement of STC and the Sun-Times Subsidiaries, enforceable against STC and each
of the Sun-Times Subsidiaries in accordance with its terms.




       (iii) Neither the execution and delivery by Sun-Times of this Agreement, nor the
performance by Sun-Times or any of the Sun-Times Subsidiaries of their respective
obligations hereunder (a) violates, is in conflict with, accelerates the performance
required by or constitutes a default (or an event which, with notice or lapse of time or
both, would constitute a default), requires any consent, approval or authorization under or
would result in a loss of any benefit to which Sun-Times or any of the Sun-Times
Subsidiaries is entitled under any material agreement, or (b) violates the certificate of
incorporation or organization of STC or any of the Sun-Times Subsidiaries, any law or any
judgment, decree or order of any court applicable to Sun-Times or any of the Sun-Times
Subsidiaries.




       (iv) Neither Sun-Times nor any of the Sun-Times Subsidiaries is required to obtain any
consent, approval or authorizations of, or make any declaration, filing or registration
with, any person or entity (including any governmental body) in connection with the
execution, delivery and performance by Sun-Times or any of the Sun-Time Subsidiaries of
this Agreement.




	4.21	 	Further Assurances. Each Party shall execute all such certificates and other
documents and shall do all such filing, recording, publishing and other acts as the Parties
deem appropriate to comply with the requirements of law for the performance of the Agreement
and to comply with any laws, rules, and regulations relating to the distribution services to
be provided hereunder. CTC and STC shall cooperate in connection with any governmental or
other administrative or regulatory investigation arising out of the Parties’ respective
obligations under this Agreement.




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	4.22	 	Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be an original and all of which, when taken together, shall constitute one and the
same instrument.
	 
	4.23	 	Construction; Interpretation. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any of the provisions of this Agreement. The captions contained herein
are for the convenience of the parties and shall not be deemed to be part of this Agreement.
If any provision of this Agreement is found invalid or unenforceable, that provision will be
enforced to the maximum extent permissible, and the other provisions of this Agreement will
remain in force.
	 
	4.24	 	Entire Agreement; Modification. This Agreement, including all attached Schedules,
which are hereby incorporated by reference, and the Equipment Purchase Agreement (as defined
in Section 4.29) constitute the entire Agreement between the Parties and supersede any prior
agreement of any kind, either oral or written, between the Parties. The terms of this
Agreement may be modified only by a writing signed by an authorized agent of each Party.
	 
	4.25	 	Real Estate Lease Assignments. On or before October 1, 2007, STC will transfer and
assign to CTC all of STC’s right, title and interest in, to and under the lease agreements
identified on Schedule G (the “Leases”) and CTC will assume and agree to satisfy or perform
when due all of STC’s debts, liabilities, obligations and commitments under the Leases arising
after the effective dates of such assignments, including payment to STC of an amount equal to
the amount of unencumbered security deposits due under the Leases at the expiration of the
current terms (collectively, the “Assumed Liabilities”). In the event any of the Leases are
renewed by CTC beyond the expiration of their current terms, STC, CTC and the respective
landlords will conduct an assessment of the facilities as of the time of the renewal term
commencement date and will mutually agree on the amount of the security deposit that is not
encumbered to bring the facility up to the condition required in the current lease. STC and
CTC shall each from time to time at the other’s request and without further consideration
execute and deliver to the other such additional instruments of transfer, conveyance,
assignment and assumption as may be reasonably requested in order better (a) to assure, convey
and confirm to the other all of the right, title and interest in the Leases to be assigned,
conveyed and transferred by STC hereunder; and (b) to assume, indemnify, perform and discharge
all of the Assumed Liabilities by CTC. To the extent that STC’s rights under any Lease may
not be assigned without the consent of a third party that has not been obtained, STC and CTC
shall cooperate to obtain such consent, and this Agreement shall not constitute an agreement
to assign the same if an attempted assignment would constitute a breach thereof or be
unlawful. If any such consent shall not be obtained or if any attempted assignment would be
ineffective or would impair CTC’s rights under the Lease in question so that CTC would not in
effect acquire the benefit of all such rights, then STC to the maximum extent permitted by
law, shall act after October 1, 2007 as an agent in order to obtain for CTC the benefits
thereunder and shall cooperate, to the maximum extent permitted by law, with CTC in any other
reasonable arrangement designed to provide such benefits to Buyer.




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	4.26	 	Injunctive Relief. CTC acknowledges and agrees that STC is dismantling its
distribution network in reliance on CTC’s promises to provide distribution services on the
terms and subject to the conditions set forth in this Agreement. CTC therefore agrees that
STC, in addition to any other rights and remedies STC may have at law or in equity, shall be
entitled to seek an order of specific performance, injunction, restraining order or such other
interim or permanent equitable relief (without the requirement to post bond) restraining CTC
from committing or continuing any breach of its obligations contained herein.
	 
	4.27	 	Information Rights, Record Keeping and Audit Rights. During the term of this
Agreement, CTC shall provide STC with reports, data and information reasonably requested by
STC regarding the distribution of the Publications hereunder, provided such reports, data and
information is prepared by CTC in the normal course of managing its overall newspaper
distribution network and is readily available. Notwithstanding the immediately preceding
sentence, the Parties agree that STC shall not be entitled to any cost, pricing or other
sensitive information. In addition, during the term of this Agreement and for a period of
seven (7) years after the termination of this Agreement, CTC shall keep full and accurate
books and records of all items necessary (i) to accurately and correctly calculate the
payments due to it from STC hereunder for the most recent three (3) calendar years; (ii) to
accurately and correctly calculate the amounts invoiced and collected by CTC pursuant to
Section 3.3 hereof; (iii) to justify any and all price increases imposed by CTC pursuant to
the terms of Section 4.7(a)(v) of this Agreement; (iv) to support and justify the circulation
amounts reported by STC to any circulation auditing or reporting agency during the term
hereof; and (v) to confirm that CTC is fulfilling each of its other obligations under this
Agreement. Upon a request of STC, and not more than once in any 12-month period, CTC shall
permit an independent public accounting firm reasonably acceptable to CTC engaged by STC to
examine such books and records (insofar as they relate to such payments) during normal
business hours, on reasonable prior written notice, to audit such books and records for
purposes of confirming the information reflected therein; provided, however, that such
independent accountants shall not disclose CTC’s confidential information to STC, except to
the extent such disclosure is otherwise permitted or required under this Agreement. If such
accounting firm concludes that CTC has overcharged STC for distribution services under the
terms of this Agreement, then, unless CTC’s independent accounting firm provides written
notice of disagreement with such conclusion, CTC shall pay, within 30 days of the date that
STC advises CTC in writing of such overpayment, the amount of such overpayment. All expenses
relating to such audit shall be borne by STC, unless such audit discloses an overpayment in
excess of five percent (5%) with respect to the amount charged, in which case such expenses
shall be paid by CTC.
	 
	4.28	 	Communication Protocols and Dispute Resolution.
	 
	 	 	(a) Each Party agrees that it will designate in writing a single person who is authorized
to represent such Party in discussions or communications with the other Party with respect
to any and all matters that arise in connection with this Agreement. The persons so
designated are referred to herein as the “Party Representatives.” Each Party
Representative may designate in writing one or more persons to act in his or her place.
The Parties agree that the Party Representatives will promote open communications in an





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	 	 	effort to avoid miscommunication and disputes between the Parties. The initial Party
Representatives shall be Kevin King, Vice President of Distribution, for STC and Earnest
Sutton, Director, Commercial Delivery, for CTC.
	 
	 	 	(b) Before commencing any claims hereunder, the Parties agree to in good faith try to
settle any disputes as to validity, enforceability, construction, or breach hereof
(“Disputes”) by negotiations between them. Such negotiations are to include, at a minimum,
written notice by the Party initiating the Dispute describing in detail the legal,
evidentiary and business bases of the Dispute and any proposed remedy or solution, a
written response to the notice describing in detail the other Party’s disagreements, if
any, with the initiating Party’s description of the bases of the Dispute and proposed
remedy or solution, and one or more discussions between executives with authority to
resolve the Dispute. Unless otherwise mutually agreed by the Parties in writing, the
period for negotiation will be deemed ended thirty days after receipt of the initial
written notice. Nothing in this Section 4.28 shall prevent or require the delay of any
filing or other action if reasonably necessary to prevent a claim being barred by an
applicable statute of limitations.
	 
	4.29	 	Equipment Purchases. On or before October 15, 2007, CTC shall purchase from STC
certain equipment currently used by STC in connection with the distribution of the
Publications as more fully described in Exhibit A to the equipment purchase agreement set
forth in Schedule I attached hereto (the “Equipment Purchase Agreement”) for a price and in
accordance with the terms set forth in the Equipment Purchase Agreement.





[THE BALANCE OF THIS PAGE IS BLANK]




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          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and the date
first above written.




	 	 	 	 	 
	 
	 	 	 	 
	 	By:  	     /s/ Scott C. Smith
 	 
	 	Chicago Tribune Company 	 
	 	Scott C. Smith

President and Publisher 	 
	 
	 	 	 
	 	By:  	     /s/ Cyrus F. Freidheim, Jr.
 	 
	 	The Sun-Times Company 	 
	 	Cyrus F. Freidheim, Jr.

President and Chief Executive Officer 	 
	 




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