Exhibit 10.12SECOND AMENDED AND RESTATEDJOINT OPERATING AGREEMENTBY AND AMONGYORK PARTNERSHIP HOLDINGS, LLC,A DELAWARE LIMITED LIABILITY COMPANY,THE YORK NEWSPAPER COMPANY,A PENNSYLVANIA GENERAL PARTNERSHIP,YORK NEWSPAPERS HOLDINGS, L.P.,A DELAWARE LIMITED PARTNERSHIPANDYORK DISPATCH PUBLISHING COMPANY, LLC,A DELAWARE LIMITED LIABILITY COMPANYJUNE 30, 2007
 

 
**TABLE OF CONTENTS**               Page I. THE LIMITED PARTNERSHIP  3   A. Formation  3   B. General Partnership Interests of YNI  3   C. General Partnership Interests of YNHI  4   D. Limited Partnership Interest of YDPC  4   E. Nature of Partnership Contribution  4   F. Merger of YNI and YNHI into PNIP; Transfer of General Partnership Interest in the Limited Partnership to YPHLLC  4   G. Management of the Limited Partnership  5   H. Future Capital Contributions; Capital Assets  6   I. Dissolution of Limited Partnership  6          II. THE GENERAL PARTNERSHIP  7   A. Continuation of the General Partnership  7   B. Name and Place of Business  7   C. Ownership of and Title to Property  7   D. Revenues, Expenses and Obligations  8   E. Management of General Partnership  8   F. Dissolution of General Partnership  9          III. EDITORIAL INDEPENDENCE  9          IV. TERM  10          V. CONTINUING OPERATIONS  10   A. General  10   B. Production  11   C. Advertising and Circulation  11   D. Newspaper Editions and Comment Section for York Sunday News  12   E. Office Space and Equipment  12   F. Other Services  13   G. Future Purchases  13   H. News and Editorial Matters  13   I. Accounting Matters  17   J. Distributions to Partners  18          VI. TERMINATION  22   A. Default  22   B. Action After Termination  23 
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               Page VII. MISCELLANEOUS PROVISIONS  26   A. Certain Liabilities; Force Majeure  26   B. Liabilities for Published or Excluded Material  27   C. Contravention of Law  27   D. Further Assurances  28   E. Assignments and Transfers  28   F. Entire Agreement  30   G. Notices  30   H. Announcements/Disclosures  31   I. Headings  31   J. Governing Law  31   K. Modifications  31   L. Specific Performance  32   M. No Third Party Beneficiaries  32   N. Nature of Relationship  32   O. Survival  32   P. Execution by YDPC  32 
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THISSECOND AMENDED AND RESTATED JOINT OPERATING AGREEMENT(this “Agreement” or “JOA”) isdated as of June 30, 2007 by and among York Partnership Holdings, LLC, a Delaware limited liabilitycompany (“YPHLLC”), The York Newspaper Company, a Pennsylvania general partnership (the “GeneralPartnership”), York Newspapers Holdings, L.P., a Delaware limited partnership (the “LimitedPartnership”) and York Dispatch Publishing Company, LLC, a Delaware limited liability company(“YDPC”).          WHEREAS, York Daily Record, a daily newspaper, is published Monday through Saturday,York Sunday News, a weekly newspaper, is published on Sunday, and The YorkDispatch, a daily newspaper, is published Monday through Friday, except for legal holidays, allin York, Pennsylvania (collectively the “Newspapers”);          WHEREAS, York Newspapers, Inc., a Delaware corporation (“YNI”), the General Partnership andYork Daily Record, Inc., a Delaware corporation (“YRI”), previously entered into a Joint OperatingAgreement dated January 13, 1989, (the “1989 JOA”), pursuant to which the General Partnership priorto the date thereof managed and operated the Newspapers, except for the news and editorialdepartments of each Newspaper, which have remained separate and independent;          WHEREAS, YNI and the General Partnership, effective April 30, 2004, amended various provisionsof the 1989 JOA, restated it in its entirety, and supplemented it, as therein provided, and YorkNewspapers Holdings, Inc., a Delaware corporation (“YNHI”), the Limited Partnership and YDPC becameadditional parties to that agreement and YRI ceased to be a party to that agreement (the “2004Amended and Restated JOA”);
 

 
          WHEREAS, simultaneously with the execution of the 2004 Amended and Restated JOA, YNI, YDPC andcertain other parties effectuated certain other transactions which are described therein;          WHEREAS, the purpose and intent of the 2004 Amended and Restated JOA was to provide a plan ofcommon operation of the Newspapers, so as to (1) provide efficient newspaper operations, (2)produce high quality newspapers that would be attractive to readers and advertisers and (3)maintain the separate identities and free editorial and news voices of the Newspapers;          WHEREAS, pursuant to the 2004 Amended and Restated JOA, the parties continued to maintain asseparate and independent the respective news and editorial operations of the Newspapers consistentwith the requirements of the Newspaper Preservation Act, 15 U.S.C. §§ 1801 et seq.;          WHEREAS, effective June 30, 2005, YNI and YNHI were both merged into Hanover PublishingCompany, a Delaware corporation, which then changed its name, as the surviving corporation of themerger, to Pennsylvania Newspapers Publishing, Inc. (“PNPI”);          WHEREAS, just prior to the parties’ execution of the December 2005 Amended and Restated JointOperating Agreement dated as of December 25, 2005 (the “2005 Amended and Restated JOA”), by andbetween YPHLLC, the General Partnership, the Limited Partnership and YDPC, PNPI was merged intoNorthwest New Mexico Publishing Company (“NNMPC”), and thereafter NNMPC assigned to YPHLLC all ofthe general partnership interests it thus held in the Limited Partnership;          WHEREAS, the parties hereto desire to amend and restate the 2005 Amended and Restated JOA asof the date hereof; and
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          WHERAS, immediately following the execution and delivery of this Agreement, YPHLLC will assign(the “Class B Assignment”) all of its Class B Limited Partnership Interests (as defined in theLimited Partnership Agreement) to its parent, Texas-New Mexico Partnership Newspapers Partnership,a Delaware general partnership (“TNMNP”).          NOW THEREFORE, in consideration of the mutual promises contained herein and other good andvaluable consideration, the parties do hereby enter into this Second Amended and Restated JointOperating Agreement and do hereby agree as follows:I. THE LIMITED PARTNERSHIP          A. Formation. YNI, YNHI and YDPC did, effective April 30, 2004 (1) cause theformation of the Limited Partnership and (2) enter into a limited partnership agreement withrespect thereto, upon terms mutually agreeable to YNI, YNHI and YDPC (as amended and restated fromtime to time, the “Limited Partnership Agreement”).     B. General Partnership Interests of YNI. Effective April 30, 2004, and in return for57.5% of the general partnership interests in the Limited Partnership (as described in the LimitedPartnership Agreement), YNI did contribute the following to the capital of the Limited Partnership: (1) its 57.5% general partnership interests in the GeneralPartnership;  (2) all of its interests in all intangible assets related toYork Sunday News other than the York Sunday News masthead andall related trademarks, service marks and URL’s (collectively, the “York SundayNews Non-Masthead Related Intangible Assets”); and  (3) all of its interest in all intangible assets related to TheYork Dispatch (other than the York Dispatch Masthead, as hereinafterdefined), including, in particular, copyrights, The York Dispatchadvertiser and
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   subscriber lists, back issues, morgue and library (collectively, the “YorkDispatch Non-Masthead Related Intangible Assets”).     C. General Partnership Interests of YNHI. Effective April 30, 2004, and in returnfor 42.5% of the general partnership interests in the Limited Partnership (as described in theLimited Partnership Agreement), YNHI did contribute the following to the capital of the LimitedPartnership: (1) all of the outstanding membership interests of its subsidiary,York Newspapers Holdings LLC, a Delaware limited liability company (“YNHLC”)(which entity did at the time of such contribution own a 42.5% partnershipinterest in the General Partnership); and  (2) all of its interest in the masthead of The YorkDispatch and all related trademarks, service marks and URL’s (collectively,the “York Dispatch Masthead”).     D. Limited Partnership Interest of YDPC. In consideration for its undertakings inthis JOA and the Limited Partnership Agreement, YDPC received a limited partnership interest in theLimited Partnership (as described in the Limited Partnership Agreement).     E. Nature of Partnership Contribution. The assets described in Sections I B and I Cwere contributed to the Limited Partnership free and clear of all liens, security interests,mortgages and encumbrances of any nature.     F. Merger of YNI and YNHI into PNIP; Transfer of General Partnership Interest in theLimited Partnership to YPHLLC. As a result of YNI’s and YNHI’s merger into PNPI on June 30,2005, PPNI, effective that date, became the sole General Partner of the Limited Partnership. Justprior to the execution of the 2005 Amended and Restated JOA, PPNI was
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merged into NNMPC and thereafter NNMPC assigned the interest it acquired by virtue of thatmerger as General Partner of the Limited Partnership to YPHLLC, so that YPHLLC is now the soleGeneral Partner of the Limited Partnership.     G. Management of the Limited Partnership. Except as may otherwise expressly beprovided in this Agreement and/or the Limited Partnership Agreement, the Limited PartnershipAgreement shall be managed exclusively by YPHLLC as the General Partner of the Limited Partnership(the “General Partner”). To the extent that any provision of this Agreement or the LimitedPartnership Agreement or applicable law requires or authorizes the Limited Partnership to performany obligation, make any determination, give any notice, exercise any right or take any action,YPHLLC shall in its capacity as General Partner of the Limited Partnership be required orauthorized to do so on behalf of the Limited Partnership. In doing so, YPHLLC shall, in accordancewith the provisions of this Agreement and the Limited Partnership Agreement, as the GeneralPartner, conduct the business and operations of the Limited Partnership, the General Partnershipand the Newspapers (including incurring indebtedness of the Limited Partnership and/or GeneralPartnership) in a manner which it believes, in the good faith exercise of business judgment, is inthe best interest of the overall economic performance of the Limited Partnership, the GeneralPartnership and the Newspapers considered together and does not have a material adverse impact onthe cash flow of the Limited Partnership or the Limited Partnership’s ability to make on a timelybasis the cash distributions to YDPC contemplated by Section V J (1) through (3) hereof. Subjectto the foregoing, YPHLLC may, subject to such express limitations as may be provided in thisAgreement and/or the Limited Partnership Agreement, make reasonable distinctions among theNewspapers regarding the non-editorial business, operations and promotion of each of them that areintended to enhance such
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overall economic performance. YPHLLC shall have no liability to the Limited Partnership, theGeneral Partnership, YDPC or any other limited partner of the Limited Partnership for any action itmay take or fail to take in the absence of bad faith or willful misconduct. Throughout the term ofthis Agreement, YPHLLC shall also cause the Limited Partnership’s subsidiary, YNHLC, to license tothe General Partnership, on a royalty-free basis, all of its interest in all intangible assetsrelated to the York Daily Record (other than York Daily Record masthead and allrelated trademarks, service marks and URL’s).     H. Future Capital Contributions; Capital Assets. YDPC and any other limited partnersof the Limited Partnership shall have no obligation to make any further contributions to thecapital of the Limited Partnership, subject to any express obligation of YDPC under this JOA toreimburse the General Partnership for any expenses paid by the General Partnership on behalf ofYDPC in accordance with the provisions of this JOA. YPHLLC shall in the future make suchadditional contributions to the capital of the Limited Partnership as shall be necessary in itsreasonable judgment to (1) fund acquisitions of capital assets necessary for the business andoperations of the Limited Partnership and/or the General Partnership; (2) fund acquisitions ofcapital assets necessary for the business and operations of the editorial departments of each ofthe Newspapers to the extent such editorial departments’ tangible capital assets on the date hereofrequire supplementation or replacement, (3) provide the Limited Partnership and the GeneralPartnership with adequate working capital, and (4) ensure that the Limited Partnership has adequatefunds to make on a timely basis the cash distributions to YDPC contemplated by Section V J (1)through (3) of this JOA.     I. Dissolution of Limited Partnership. In the event that prior to the termination ofthis JOA the Limited Partnership is dissolved, this JOA shall nevertheless continue until the
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expiration of the term set forth in Section IV hereof unless sooner terminated pursuant toSection VI hereof and YPHLLC or an affiliate thereof shall assume all of the obligations of theLimited Partnership under this JOA.II. THE GENERAL PARTNERSHIP     A. Continuation of the General Partnership.          (1) Simultaneously with the formation of the Limited Partnership, through a series of relatedtransactions, YNHLC acquired the entire 42.5% interest in the General Partnership previously heldby Buckner News Alliance, Inc.          (2) By this JOA, the Limited Partnership and YNHLC shall continue to operate the GeneralPartnership for the purpose of publishing the Newspapers; provided (1) that there shall continue tobe no merger, combination or amalgamation of the editorial or reportorial staff of York DailyRecord and York Sunday News, on the one hand, and The York Dispatch, on theother hand, (2) that YDPC shall independently determine the editorial, news policy and content ofThe York Dispatch and (3) that the Limited Partnership shall independently determine theeditorial, news policy and content of York Daily Record and York Sunday News.     B. Name and Place of Business. The General Partnership shall continue to be conductedunder the name “York Newspaper Company” from its place of business at 1891 Loucks Road, York,Pennsylvania 17404.     C. Ownership of and Title to Property. All of the parties hereto hereby confirm andagree that the ownership of and title to all real property and all tangible personal property usedin and useful to the General Partnership is exclusively in the General Partnership rather than inany other party to this JOA, jointly or individually, and without regard to whether any propertywas contributed by any party to this JOA to the General Partnership, was otherwise made
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available to the General Partnership by any party to this JOA or was otherwise acquired by theGeneral Partnership.     D. Revenues, Expenses and Obligations. The General Partnership shall receive allincome and revenues of the General Partnership and shall pay all expenses incurred or assumed byit. No party hereto shall be or shall become liable upon any contract or other obligation of theGeneral Partnership or any other party hereto, unless such party shall expressly assume suchcontract or other obligation or liability is imposed by law.     E. Management of General Partnership. Subject to the provisions of this JOAconcerning the editorial independence of the Newspapers and such other limitations as may beexpressly set forth in this Agreement and/or the Limited Partnership Agreement, the LimitedPartnership shall have complete authority over and exclusive control and management of the businessand affairs of the General Partnership. The Limited Partnership may delegate such general orspecific authority to the officers and employees of the General Partnership with respect to thebusiness and day-to-day operations of the General Partnership as it may from time to time considerdesirable, and the officers and employees of the General Partnership may exercise the authoritygranted to them. The General Partnership shall indemnify, defend and hold harmless YDPC and theLimited Partnership and its partners (and their respective shareholders, members, partners,directors, officers, employees and agents) from any liability, loss or damage suffered by them byreason of any act or omission by them in connection with the business of the General Partnership;provided, however, that indemnification shall not be available for any claim that results from thewillful misconduct of such person or the breach by such person of its obligations under this JOA orother agreements to which such person may be subject. The Limited Partnership shall not be liable,in damages or otherwise, to the General
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Partnership or its direct or indirect partners for any act or omission in the absence ofwillful misconduct.     F. Dissolution of General Partnership. In the event that prior to the termination ofthis JOA the General Partnership is dissolved at the election of the general partners of theGeneral Partnership, this JOA shall nevertheless continue until the expiration of the term setforth in Section IV hereof unless sooner terminated pursuant to Section VI hereof and YPHLLC andthe Limited Partnership or their successors (or affiliates thereof) shall assume the obligations ofthe General Partnership under this Agreement.III. EDITORIAL INDEPENDENCE     Preservation of the editorial independence of the Newspapers is the essence of this JOA.YPHLLC and YDPC each agree to maintain the separateness of their respective limited liabilitycompany identities, as the case may be, and to retain the editorial independence of York DailyRecord and York Sunday News, on the one hand, and The York Dispatch, on theother hand. YDPC agrees that neither it nor any affiliate shall have any connection with the newsor editorial operations of York Daily Record or York Sunday News. The separateeditorial and reportorial staffs of York Daily Record and York Sunday News, on theone hand, and The York Dispatch, on the other hand, shall be independent and shall not bemerged, combined or amalgamated, and their editorial policies shall be independently determined.YPHLLC agrees that neither it nor any affiliate shall have any connection with the news oreditorial operations of The York Dispatch. Actions of YPHLLC with respect to The YorkDispatch shall be confined exclusively to its role as General Partner of the LimitedPartnership and in such role to cause the General Partnership to print, sell and distribute theNewspapers, and to solicit and sell advertising space therein, and to perform such other functionsas are described in this JOA.
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IV. TERM          Unless sooner terminated in accordance with the terms hereof, this JOA shall continue ineffect from the date hereof through the close of business on June 30, 2024. This JOA shallthereupon be automatically renewed for additional five-year terms unless any party hereto giveswritten notice to the contrary to each of the other parties hereto at least 12 months prior to theend of the then-current term.V. CONTINUING OPERATIONS     A. General. On and after the date hereof, the General Partner shall, in accordancewith the provisions of this Agreement and the Limited Partnership Agreement, control, supervise,manage and perform all operations (other than the news and editorial operations of the Newspapers)involved in producing, printing, selling and distributing the Newspapers; to determine press runs,press times, page sizes and cutoffs of the Newspapers; to determine whether supplemental productswill be distributed in or with one or more Newspapers, including whether and how certain productswill 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 andadvertising 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 General Partnership and which shall not be an EditorialExpense); and to make all determinations and decisions and do any and all acts and thingsnecessarily connected with the foregoing activities, including maintaining insurance coverage thatis normal and appropriate for similarly-situated businesses. The parties recognize that YPHLLC asGeneral Partner of the Limited Partnership shall, in accordance with the provisions of thisAgreement and the Limited Partnership Agreement, have general charge and supervision of thebusiness of the
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Newspapers, but shall treat each of the Newspapers as separate and distinct editorialproducts, and shall have no duties or authority with respect to the news or editorial functions ofThe York Dispatch.     B. Production. On and after the date hereof, the General Partner shall cause theNewspapers to be printed on equipment owned or leased by the General Partnership in plant or plantslocated at such place or places as the General Partner may determine to be appropriate, and alloperations under this JOA, except the operation of the Newspapers’ editorial departments, shall becarried on and performed by the General Partnership with equipment from the General Partnership’splant or plants or by independent contractors or agents selected by the Managing General Partner.During the term of this JOA, YDPC agrees to produce The York Dispatch‘s editorial and newscopy, and YPHLLC agrees to produce York Daily Record‘s and York Sunday News‘editorial and news copy, on equipment which is provided by the General Partnership or which iscompatible with the equipment used by the General Partnership in its production facilities.     C. Advertising and Circulation. On and after the date hereof, the General Partnershall, except as otherwise expressly herein provided, have complete control of and the right todetermine the advertising and circulation rates for each of the Newspapers, and the GeneralPartnership shall use its reasonable efforts to sell advertising space in each Newspaper and tosell, promote and distribute each Newspaper as widely as practicable consistent, however, with theobjective of enhancing the overall economic performance of the General Partnership and theNewspapers considered together in a manner that does not have a material adverse impact on the cashflow of the General Partnership and the ability of the General Partnership to make on a timelybasis the cash distributions to the Limited Partnership necessary to make the distributions
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to YDPC contemplated by Section V J (1) through (3) hereof, and provided that the GeneralPartnership in its business judgment, may spend disproportionately among the Newspapers withrespect to any matter. The General Partner shall be free to select and alter from time to time thenational advertising representative(s) for each of the Newspapers and the commission payable tosuch national advertising representative(s) and any other terms of such arrangement(s) shall bedetermined by the General Partner.     D. Newspaper Editions and Comment Section for York Sunday News.The York DailyRecord shall be published daily on weekdays and Saturdays, the York Sunday News shallbe published on Sunday and The York Dispatch shall be published daily on weekdays otherthan legal holidays. On legal holidays when The York Dispatch is not published, theYork Daily Record shall be distributed to The York Dispatch subscribers. YDPC may,if it elects to do so, at its cost, and as part of its Editorial Expense, prepare a Comment Sectionof up to one page in length, which will carry the masthead of The York Dispatch and will beinserted in each edition published of York Sunday News and in each edition of the YorkDaily Record published on legal holidays. The Comment Section shall not contain “hard” orbreaking news. The Comment Section may contain opinion material and feature news and may alsocontain advertising. The Comment Section shall be discrete and separate from the editorial contentof York Sunday News.     E. Office Space and Equipment. On and after the date hereof, the General Partnershipshall furnish reasonably adequate office space for the separate use of the York DailyRecord, York Sunday News and The York Dispatch editorial departments. Suchspace shall be furnished with furniture and equipment which in the reasonable judgment of theManagingGeneral Partner is sufficient and technologically adequate for each Newspaper’s news andeditorial operations.
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     F. Other Services. The parties recognize that in addition to the operations withrespect to the Newspapers contemplated by this JOA, the General Partnership may also utilize itsproduction and other facilities, personnel, and agents for any other lawful activities it may deemappropriate, including distributing or otherwise exploiting all manner of news, features,photographs, data or other information, whether constituting all or any portion of the content ofprinted editions of the Newspapers or otherwise, and regardless of when such editions may have beenpublished, to subscribers and/or non-subscribers of the Newspapers alike, by any and all means theManaging General Partner may deem appropriate, including, but not limited to, all forms ofelectronic distribution, mail or other forms of delivery, without having to obtain any furtherauthorization or consent from any of the parties hereto, or to additionally compensate suchparties, except or as may hereafter be expressly provided: commercial printing, includingcommercial printing of other newspapers; distribution services; and any other activities notinconsistent with its principal business; provided, however, that such activities shall notunreasonably interfere with the printing or distribution of the Newspapers.     G. Future Purchases. On and after the date hereof, subject to Section V H hereof, theGeneral Partnership shall be responsible for the purchase of all inventory, supplies, equipment andservices as it deems to be necessary or desirable in connection with the operation of theNewspapers and other functions as are described in this JOA. In the event of shortages ofinventory, supplies, equipment or services, no Newspaper shall be unfairly favored or discriminatedagainst as regards the other.     H. News and Editorial Matters. YPHLLC and YDPC shall furnish complete news andeditorial services necessary and appropriate for the publication of their respective Newspapers inthe manner provided in this JOA.
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          (1) Each of YPHLLC and YDPC shall have complete and exclusive control and direction of theeditorial department and editorial policies of its respective Newspapers and shall be responsiblefor and shall bear all of its respective Editorial Expense (as defined below). Without limiting thegenerality of the foregoing, each of YPHLLC and YDPC shall have the exclusive right to determinethe 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 completecontrol and authority over the editors and editorial staff of its respective Newspapers (includingthe exclusive authority to make hiring and firing decisions). The term “editorial department” asused herein shall include the news, editorial, editorial promotion and photographic functions.YPHLLC and YDPC each recognize the importance of the editorial quality of their respectiveNewspapers and each of them agrees to use reasonable efforts to provide editorial products fortheir Newspapers which are compatible with the needs of the York, Pennsylvania area newspapermarket and to preserve with respect to their Newspapers a high standard of newspaper quality andjournalistic excellence.          (2) In order to equitably distribute between YPHLLC and YDPC the cost of producing the newsand editorial content of the Newspapers, and in consideration of changes both in the demand fornewspaper products and the various costs of producing and distributing newspaper products and inthe demand for advertising, the amount of reading content, sometimes known as “news hole,” and theamount of color usage of each of the Newspapers shall be determined by the General Partner duringthe annual budgeting process, in consultation withYPHLLC and YDPC. The color usage and news hole allocations shall take into account relevantdistinguishing characteristics of each of the Newspapers, including among other things whether oneor more of the Newspapers carries supplemental products not carried in the others, historic
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andprojected levels of advertising and editorial content, color and editorial and advertising layoutpractices of each Newspaper, with total usage and the allocation thereof to be determined by theGeneral Partner. Each Newspaper may elect to publish pages in excess of their news hole and/orexceed the amount of color usage determined for such Newspapers by the Managing General Partner,provided the General Partnership has the production capacity to accommodate such excesses.However, if any of the Newspapers exceeds its budgeted news hole allocation or color usage, thenany newsprint and other production costs attributable to such excess shall be borne by suchNewspaper, and upon being invoiced therefor by the General Partnership, YPHLLC or YDPC, asappropriate, shall reimburse the General Partnership for such expense. If, from time to timefollowing the determination by the General Partner of the news hole allocation, the General Partnershall require a greater news hole allocation for one or more editions of one or more of theNewspapers, the Newspapers shall have no obligation to reimburse the General Partnership for anyadditional expense the General Partnership may incur as a consequence thereof, and the GeneralPartnership shall reimburse the Newspapers promptly upon being invoiced therefor for any additionalexpenses the Newspapers may incur as a consequence thereof.          (3) The General Partner, independently of YDPC, shall develop standards for determining theacceptability of advertising copy for publication in York Daily Record and York SundayNews. YDPC, independently of the General Partner, shall develop standards for determining theacceptability of advertising copy for publication in The York Dispatch.          (4) Except as provided otherwise herein, the term “Editorial Expense” as used in this JOAshall mean all costs and expenses associated with the news and editorial departments of eachNewspaper, including but not limited to: (a) compensation, including payroll taxes,
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retirement,pension, health and death benefits, worker’s compensation insurance and group insurance of news andeditorial staff; (b) severance pay of news and editorial staff; (c) travel and other expenses ofnews and editorial staff; (d) press association assessments and charges; (e) charges for newsservices and editorial wire services; (f) charges for the right to publish news and editorialfeatures, daily or weekly comics and other editorial material of every kind and character; (g) thecost of news and editorial materials, printing, stationery, office supplies and postage for thenews and editorial department; (h) donations; (i) the cost of editorial promotions; (j)telegraphic, telephone, long-distance telephone and internet access charges of the news andeditorial departments; (k) charges for the purchase, rental, repair and maintenance of editorialdepartment cameras and related photographic equipment (provided, however, that the term “EditorialExpense” shall not include any cost, charge or expense related to any camera or other equipmentmade 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 thenews and/or editorial department of a Newspaper, or related to any editorial department capitalassets owned by either Newspaper); (1) the cost of liability insurance and insurance with respectto libel and right of privacy and similar hazards; and (m) the cost of any York, Pennsylvania basedexecutive-level management of The York Dispatch. Notwithstanding the foregoing, thefollowing shall not be included in the term “Editorial Expense” and shall be separately borne bythe Newspaper which incurs them: (i) uninsured liabilities and costs other than deductibles,co-payments, andcosts of defending against claims (including reasonable attorneys’ fees) relating to publishedor excluded material to the extent provided in Section VII B, (ii) costs for excess news holeallocation or color usage as provided in Section V H(2), (iii) costs related to material changes
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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 TheYork Dispatch and (v) except as described in (m) above, any portion of any salaries, expenses,overhead or corporate allocation attributable to any non-York, Pennsylvania based ownership,management or supervision of The York Dispatch.          (5) All Editorial Expense of the editorial departments of York Daily Record andYork Sunday News shall be borne by YPHLLC, and all Editorial Expense of the editorialdepartment of The York Dispatch shall be borne by YDPC; provided, however, that costsresulting from any material change by any Newspaper from its present, usual or customary practicesthat result in additional future newsprint, production or other costs to be incurred on the part ofthe General Partnership shall be borne by such Newspaper, and upon being invoiced therefor by theGeneral Partnership, YPHLLC or YDPC, as appropriate, shall reimburse the General Partnership forsuch costs.     I. Accounting Matters. The General Partner shall cause to be maintained full andaccurate books of account and records showing all transactions hereunder. Such books and recordsshall be kept on the basis of a fiscal year ending June 30 and under the accounting methodsperiodically employed by YPHLLC in accordance with generally accepted accounting principles, andshall at all times be kept at the principal place of business of the General Partnership. Anychanges in accounting method shall be consistent with accepted accounting principles and withchanges made generally by YPHLLC. YDPC shall receive timely notice ofany changes in accounting methods or principles that could materially affect its interestsunder this Agreement. YDPC and its respective authorized agents or representatives shall haveaccess to and may inspect such books and records at any time and from time to time during ordinary
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business hours. Statements shall be rendered and settlements under this JOA shall be made on amonthly basis on the 15th day following the end of each monthly accounting period, withannual adjustments as soon as practicable at the conclusion of each year during the term of thisJOA. Quarterly and annual financial statements shall be furnished by the General Partner to eachof the limited partners of the Limited Partnership not later than the 30th day followingthe end of each quarter and the 90th day following the end of each fiscal year,summarizing in reasonable detail and fairly reflecting the transactions and the results ofoperations under this JOA during such period. All payments shown to be due by YDPC, YPHLLC or theGeneral Partnership pursuant to such statements shall be paid within thirty (30) days after thedelivery of the applicable statement.     J. Distributions to Partners.          (1) For each year of this JOA, there shall be distributed to the Class A Limited Partner ofthe Limited Partnership (the “Class A Limited Partner”) cash equal to One Hundred Percent (100%) ofthe amount actually expended or accrued by the Class A Limited Partner as a current liability inaccordance with generally accepted accounting principles for Editorial Expenses for the YDPCNewspaper during such year, plus a fee to compensate YDPC appropriately for the supervisory andmanagement services it is providing relative to the news and editorial departments of The YorkDispatch (the “Management Fee”). The Management Fee to be earned by the Class A LimitedPartner for the fiscal year ending June 30, 2005 and for each subsequent fiscal year shall be equalto Two Hundred Forty Thousand Dollars($240,000), as adjusted annually to reflect the compound annual changes subsequent to June 30,2004 in the level of the Bureau of Labor Standards Consumer Price Index, All Urban Consumer(CPI-U), U.S. City Average, All Items, or any similar index which may replace
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that index. Theamount to be distributed to the Class A Limited Partner pursuant to this Section V J(1) in respectof each fiscal year shall be the total of the following: (a) One Hundred Percent (100%) of thebudgeted amount for Editorial Expenses for the YDPC Newspapers for such fiscal year, as determinedby the General Partner in accordance with Section V J(7) below and (b) the applicable ManagementFee. The amount so distributable to the Class A Limited Partner, shall be net of any obligation ofthe Class A Limited Partner to reimburse the General Partnership for expenses paid by the GeneralPartnership on behalf of the Class A Limited Partner or to indemnify the General Partnershippursuant to Section VII B hereof, and shall be distributed by the Limited Partnership to the ClassA Limited Partner on a monthly basis.          (2) If, for any year, with the prior written concurrence of the General Partner, YDPC makes apermanent reduction in its editorial workforce in accordance with the requirements of applicablelaws, regulations and agreements, and if and to the extent the severance costs associated with suchreduction are not included in YDPC’s applicable budgeted Editorial Expenses for such yeardetermined in accordance with Section V J(7) below, then (a) in addition to the cash amountsdescribed in subsection (1) above, there shall be distributed to the Class A Limited Partner incash an amount equal to that portion of such severance costs that is reasonable and required to beincurred for such year pursuant to applicable laws, regulations or agreements, and that in anyevent does not exceed the costs YPHLLC would have incurred if YPHLLC had made correspondingreductions.          (3) All of the distributions described in subsection (1) above shall be made on a monthlybasis, on or before the 1st day of each month, in increments of 1/12 of the applicable budgetedamount determined by the General Partner, subject to adjustment by the
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General Partner at the endof each year, so that such aggregate distributions for the year are in such amounts as the GeneralPartner shall determine (based on such records and evidence as the General Partner may request fromthe Class A Limited Partner) are equal to 100% of the amounts expended or accrued by the Class ALimited Partner for such year as provided in Section V J(7) plus the applicable Management Fee, butno greater than 100% of the budgeted Editorial Expenses of The York Dispatch for such yearplus the applicable Management Fee. All of the distributions described in subsection (2) aboveshall also be made on a monthly basis and shall be in such amounts as the General Partner shalldetermine (based on such records and evidence as the General Partner may request from the Class ALimited Partner) are equal to the amounts expended or accrued by the Class A Limited Partner forsuch period within the applicable budget amounts, with such subsequent adjustment as may beappropriate. The Limited Partnership shall timely make all distributions to or for the benefit ofthe Class A Limited Partner provided for in this Agreement on or before the dates provided herein,regardless of whether the Limited Partnership shall receive distributions from the GeneralPartnership to fund those distributions on a timely basis.          (4) Except for the foregoing distributions to be made to the Class A Limited Partner, andexcept for such cash as the General Partner may from time to time determine is necessary ordesirable to retain in the General Partnership for working capital purposes, and subject to anyapplicable contractual restrictions under any General Partnership’s financing arrangements allremaining cash (including without limitation the proceeds from any sale ordisposition of General Partnership capital assets) shall be distributed to the General Partnerand the Class B Limited Partner of the Limited Partnership in proportion to their PercentageInterests (as defined in the Limited Partnership Agreement). Such distributions shall be made
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fromtime to time as determined by the General Partner, but no such distributions shall be made at anytime when the Limited Partnership is not current in making the distributions to the Class A LimitedPartner described in Section V J(1) through (3) hereof.          (5) Pending the distributions contemplated by this Section V J, the General Partner shall beauthorized to manage the General Partnership’s cash pursuant to the corporate-wide policies ofMediaNews Group, Inc.          (6) All income, gain, profits, losses, and expenses of the General Partnership shall beallocated between the Limited Partnership and YNHLC in proportion to the cash distributed to thempursuant to this Section V J.          (7) For each fiscal year of this JOA, the budgeted Editorial Expenses for The YorkDispatch shall be an amount determined by the General Partner after one or more meetings withYDPC during which the actual experiences of YDPC with respect to Editorial Expenses during theprior fiscal year, and any necessary or desirable adjustments to the budget for Editorial Expensesfor The York Dispatch which the General Partner deems appropriate, are discussed by YDPCand the General Partner and considered by the General Partner in good faith. A budget for theEditorial Expenses of The York Dispatch for each fiscal year of this JOA shall beestablished by the General Partner not less frequently than annually, provided that any EditorialExpense budget may be adjusted by the General Partner from time to time during the course of afiscal year of this JOA after consultation with YDPC to take appropriate account of developments inproducts or technologies, material changes in The York Dispatch’s editorialworkforce, or other material changes which may occur relative to The York Dispatch’soperations or circulation in any given year. Subject to the foregoing, in determining annualbudgets for Editorial Expenses of The York Dispatch for fiscal years subsequent to thefiscal
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year ending June 30, 2005, (a) the compensation and benefit components of The YorkDispatch’s budgets shall be adjusted annually from the prior fiscal year’s budget to reflectchanges comparable to the changes from the previous fiscal year in York Daily Record’scompensation and benefits for news and editorial staff, (b) those portions of The YorkDispatch’s budgets attributable to wire services, comics and other features shall for eachfiscal year reflect the actual costs for the applicable fiscal year of wire services, comics andfeatures comparable to those utilized during the fiscal year ending June 30, 2005 in The YorkDispatch, and (c) the remaining portions of The York Dispatch’s budgets shall beadjusted annually to reflect changes subsequent to June 30, 2004 in the U.S. All Items ConsumerPrice Index for All Urban Consumers, unless, in its reasonable judgment the General Partnerdetermines such adjustments are not appropriate and no such adjustment is made with respect to theYork Daily Record. Notwithstanding any other provision of this Agreement or thePartnership Agreement, for the first five full fiscal years following the effective date of thisAgreement, the budgeted Editorial Expenses for The York Dispatch will not be less than thebudgeted amount for such expenses established for the fiscal year ending June 30, 2005 of TwoMillion Sixty-Five Thousand Twenty-Two Dollars ($2,065,022) (the “Base Editorial Expenses Budget”)as such Base Editorial Expenses Budget amount shall be adjusted from June 30, 2004 for changes inthe U.S. All Items Consumer Price Index for All Urban Consumers from and after such date, unlessthe General Partnership experiences a material decline in net income from the level achieved in thefiscal year endingJune 30, 2005, as determined in accordance with generally accepted accounting principles,consistently applied.VI. TERMINATION     A. Default. If YPHLLC or YDPC defaults by failing to make any payment hereunder whendue or by otherwise failing to fulfill in any material respect any of its obligations
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under thisJOA and the party in default does not correct its default within ninety (90) days after receiptfrom the other of written notice specifying the default, then the non-defaulting party may, at itselection, terminate this JOA upon ninety (90) days’ prior written notice.     B. Action After Termination.          (1) It is understood that, as soon as practicable after the termination of this JOA by lapseof time or otherwise, the Limited Partnership shall, subject to the prior satisfaction of theclaims of all creditors, and subject to subsections (4) and (5) below distribute to the Class ALimited Partner (a) The York Dispatch masthead, (b) The York Dispatch advertiserand subscriber lists (subject to such dispositions, additions or substitutions relating theretowhich may have occurred in the ordinary course of the operations of the Limited Partnership or theGeneral Partnership subsequent to the formation of the Limited Partnership) including, inparticular, any and all lists of advertisers in and subscribers to The York Dispatch, (c)all contracts with such subscribers relating to The York Dispatch, (d) all executorycontracts for the purchase of advertising in The York Dispatch and (e) all of themembership interests of York Dispatch, LLC (the entity which employs the editorial staff of TheYork Dispatch).          (2) Upon the termination of this JOA by lapse of time or otherwise, the General Partnershipshall dissolve and shall distribute its assets as follows:          (a) That portion of any distributions to which the Limited Partnership may be entitled butwhich has not yet been distributed for the period up to the date of termination pursuant to SectionV J(1) through (3) hereof, shall be distributed to the Limited Partnership.          (b) All other assets of the General Partnership shall be distributed to YNHLC and the LimitedPartnership in proportion to their respective general partnership interest in the GeneralPartnership.
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          (3) A partial accounting and partial settlement under this JOA shall be made as promptly aspracticable and a final accounting and final settlement shall be made not later than the30th day of September of the year following the end of the fiscal year in which this JOAis terminated.          (4) Concurrent with the distribution of any assets by the Limited Partnership to the Class ALimited Partner, the Class A Limited Partner shall reimburse the Limited Partnership for the amountof the fair market value of the assets distributed by the Limited Partnership to the Class ALimited Partner. In addition, the Class A Limited Partner shall assume any liability forpublication related to executory contracts for advertising in The York Dispatch which aredistributed to the Class A Limited Partner. In determining the fair market value of the assetsdistributed by the Limited Partnership to the Class A Limited Partner, the General Partner and theClass A Limited Partner, or the investment banking firm or appraisers selected to determine thefair market value of such assets, as the case may be, shall assume that the fair market value ofsuch assets is the cash price at which such assets would change hands between a willing buyer and awilling seller (neither acting under compulsion) in an arms-length transaction, on terms andsubject to conditions and costs applicable in the newspaper publishing industry. In the event theGeneral Partner and the Class A Limited Partner are unable to agree onthe fair market value of any such assets within 20 days, the fair market value of such assetsshall be determined within 60 days thereafter by a nationally recognized investment banking firm ornationally recognized qualified appraisal firm mutually selected by the General Partner and theClass A Limited Partner. If the General Partner and the Class A Limited Partner cannot agree onthe selection of an investment banking firm or appraisal firm to determine the fair market value ofsuch assets, each of the General Partner and the Class A Limited Partner shall select a firm.
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Thefirms selected by the General Partner and the Class A Limited Partner shall then select a thirdfirm who will determine the fair market value of such assets within 60 days of being retained.Such firm’s determination shall be conclusive and binding on each of the partners of the LimitedPartnership. Each of the General Partner and the Class A Limited Partner shall pay one-half of theexpenses of the selected firm. If the firm is only able to provide a range in which the fairmarket value of such assets would exist, the fair market value of such assets shall be the averagevalue of the highest and lowest values of such range. Notwithstanding the foregoing, the Class ALimited Partner shall have the option, either before or after the determination of the value of theassets, to waive its right to receive such assets and to, therefore, be relieved of all of itsobligation to pay the value of such assets or any portion thereof. In such event, the Class ALimited Partner shall have no further right or obligation with respect to such assets or the JOA,and the Limited Partnership shall have the right, subject to all applicable provisions of theNewspaper Preservation Act, 15 U.S.C. § § 1801 et seq., to utilize or dispose of such assets as itchooses.          (5) For the 10 year period following the expiration or termination of this JOA, the GeneralPartner may, subject to compliance with all applicable requirements of the Newspaper PreservationAct, if any, and all other applicable laws, exercise a right of first refusalwith respect to any offer to acquire any of the assets described in Section VI B(1), or anyoffer that would effectuate a transfer of control of such assets, whether directly by an assettransfer or indirectly by a transfer of control of the Class A Limited Partner (by a stocktransfer, merger or other transaction or series of transactions) to an entity not owned orcontrolled by Philip F. Buckner. If the Class A Limited Partner desires to transfer such assets inany manner, it shall provide the General Partner with written notice (the “Offer Notice”) of a bonafide written offer
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(the “Transferee Offer”) from the proposed transferee, which Offer Notice shallcontain a copy of the written and signed Transferee Offer and shall state a cash price and all theother material terms and conditions of the Transferee Offer. The General Partner may give writtennotice of its intention to exercise its right of first refusal at any time within 30 days after thereceipt of the Offer Notice.  If the General Partner exercises its right of first refusal, it (orits designee) shall acquire such assets on substantially the same terms and conditions as theTransferee Offer, subject to compliance with all applicable requirements of the NewspaperPreservation Act, if any, and all other applicable laws.  If, despite using their commerciallyreasonable efforts, the parties are not able to close the transaction within 120 days after thereceipt of the Offer Notice, the Class A Limited Partner may close the transfer with the proposedtransferee at any time within 90 days after the end of such 120-day period, provided that suchtransfer shall be made on terms and conditions no less favorable to the Class A Limited Partnerthan the terms and conditions contained in the Transferee Offer.  In the event neither the transferto the General Partner nor the proposed transferee is closed within the applicable time period, anysubsequent proposed transfer by the Class A Limited Partner shall be subject to all of theconditions and restrictions of this section.VII. MISCELLANEOUS PROVISIONS     A. Certain Liabilities; Force Majeure. Except as otherwise provided in this JOA, noparty 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 anyother party, and no party shall be liable to any other for any failure or delay in performanceunder 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
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theparty required to perform, and such failure or delay shall not be considered a default hereunder.     B. Liabilities for Published or Excluded Material. The General Partnership shallobtain insurance to insure each of the Newspapers against liability for libel and right of privacyin such amount as it deems appropriate, with the premiums for such insurance being an EditorialExpense as provided in Section V H(4). The cost of any deductible or co-payment and the costs ofdefending against any claim, including attorneys’ fees, shall not be Editorial Expense but shall bepaid for in full by the General Partnership, without charge back to or against YDPC. However, theentire cost and expense of paying and discharging any liability or other claim in excess of thecoverage limits of the libel insurance obtained by the General Partnership for York DailyRecord and York Sunday News on account of anything published in or excluded fromYork Daily Record or York Sunday News, or arising by reason of anything done oromitted to be done by the editorial departments thereof, shall be borne by YPHLLC; and any similarcost and expense on account of anything published in or excluded from The York Dispatch, orarising by reason of anything done or omitted to be done by the editorial department of thatNewspaper, shall be borne by YDPC. YPHLLC and YDPC each agree to indemnify and hold the otherparty, the General Partnership and the Limited Partnership harmless against any cost, expense orliability which such other party, the General Partnership or the Limited Partnership maysuffer or incur as a result of any such action or inaction for which the indemnifying party isresponsible as provided above.     C. Contravention of Law. Nothing contained in this JOA shall be construed to permitany party acting jointly or by unified action to engage in any predatory pricing, predatorypractice or any other conduct which would be unlawful under any antitrust law as engaged in by
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anysingle entity. The parties hereto further mutually agree that if any part or provision of this JOAshall hereafter become, or be determined by action in any proper court to be, in contravention oflaw, this JOA shall not thereby be considered or adjudged to be a nullity, but that all partiesshall, and each hereby agrees, immediately to take, or authorize such action to be taken, to reformthis JOA, or to modify, alter or supplement any of its provisions, as may be necessary to permitthe 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 theparties hereto will execute all such instruments and take all such actions as the other party shallreasonably request in connection with carrying out and effectuating the intention and purposehereof and all transactions and things contemplated by this JOA, including, without limitation, theexecution and delivery of any and all confirmatory and other instruments and the taking of any andall actions which may reasonably be necessary or desirable to complete the transactionscontemplated thereby.     E. Assignments and Transfers.          (1) YDPC may sell, assign or transfer all, but not less than all, of its rights and interestsunder this JOA concurrently with its transfer of all of its rights pertaining to the GeneralPartnership, the Limited Partnership and the Newspapers to any person who YDPC determines, ingood faith, subject to the General Partner’s reasonable concurrence therein, has the ability,skills and resources necessary to adequately perform all of the obligations of YDPC under andpursuant to this JOA. Except as provided in the immediately preceding sentence, YDPC may not sell,assign or transfer any of its rights or interests under this JOA or pertaining to the GeneralPartnership or the Limited Partnership or the Newspapers to any person without the prior written
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consent of the General Partner, which shall not be unreasonably withheld. The transfer of acontrolling interest in the membership interests of YDPC shall be considered a transfer forpurposes of this Subsection E(1).     (2) YPHLLC, Limited Partnership, YNHLC and the General Partnership may, without the consent ofYDPC, sell, assign or transfer (any or all of the forgoing, a “Transfer”) a part or all orsubstantially all of the assets of York Daily Record and York Sunday News as agoing concern to any person and assign a part or all of their rights and obligations under this JOAto the purchaser thereof, or Transfer part or all of their direct or indirect interests in theLimited Partnership, YNHLC and the General Partnership to any person. In the event YPHLLC, theLimited Partnership, YNHLC and/or the General Partnership Transfer all or substantially all of theassets of York Daily Record and York Sunday News as a going concern to any person,or Transfer part or all of their direct or indirect interests in the Limited Partnership and theGeneral Partnership to any person, concurrently with such Transfer (1) except in the case of aTransfer to an affiliate of YPHLLC that has assumed all of the obligations of the assignorspursuant to this JOA, the General Partnership shall make all such distributions (if any) as arerequired to have been made to the Limited Partnership on or prior to the date of such sale,assignment or transfer pursuant to Section V J(1) through (3) hereof that have not been previouslymade and (2) theassignors shall cause the assignees to assume (in the case of an assets sale) all of theobligations of the assignors pursuant to this JOA. In the event YPHLLC, the Limited Partnership,YNHLC or the General Partnership engages in an assets sale contemplated by this Section VII E, theyshall, effective on the closing thereof, be released and discharged from any further liabilityunder this JOA. No consent of YDPC shall be required for any pledge or hypothecation by YPHLLC,the Limited Partnership, YNHLC or the General Partnership of their rights under this
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Agreement ortheir direct or indirect interests in the Limited Partnership, YNHLC and the General Partnership,or by the Limited Partnership or the General Partnership of its assets, or a transfer of suchinterests and rights pursuant to any foreclosure action or any transfer in lieu of foreclosure.     F. Entire Agreement. This document amends and restates the JOA in its entirety.     G. Notices. All notices, requests, demands, claims and other communications which mayor are to be given hereunder or with respect hereto shall be in writing, shall be given either bypersonal delivery, facsimile or by certified or special express mail or recognized overnightdelivery service, first class postage prepaid, or when delivered to such delivery service, chargesprepaid, return receipt requested, and shall be deemed to have been given or made when personallyreceived by the addressee, addressed as follows:          (1) If to YPHLLC, YNHLC, the Limited Partnership or the General Partnership, to:MediaNews Group, Inc.