[Federal Register Volume 75, Number 47 (Thursday, March 11, 2010)]
[Notices]
[Pages 11682-11727]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5095]



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Part III





Department of Justice





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Antitrust Division



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United States v. Daily Gazette Company and Medianews Group, Inc.; 
Proposed Final Judgment and Competitive Impact Statement; Notice

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

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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Daily Gazette Company and Medianews Group, Inc.; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the Southern District of West Virginia 
in United States of America v. Daily Gazette Company and MediaNews 
Group, Inc, No. 2:07-cv-0329. On May 22, 2007, the United States filed 
a Complaint alleging that the Defendants violated Section 7 of the 
Clayton Act, 15 U.S.C. 18, and Sections 1 and 2 of the Sherman Act, 15 
U.S.C. 1 & 2, by entering into a May 2004 transaction that consolidated 
ownership and control of the only two daily newspapers in Charleston, 
West Virginia under the Daily Gazette Company and eliminated 
competition between the Defendants. The proposed Final Judgment, filed 
on January 20, 2010, requires the Defendants to restructure their joint 
operating arrangement to provide MediaNews Group with governance rights 
and independent control over the editorial operations of the Charleston 
Daily Mail; prohibits the Defendants from discriminating against the 
Daily Mail in circulation and advertising sales and other key aspects 
of newspaper operations; requires the Defendants to take remedial 
action to rebuild the circulation of the Daily Mail by offering 
specially-discounted subscriptions for a period of six months; 
establishes various economic incentives for MediaNews to compete with 
the Daily Gazette Company for readers; prevents the unjustified 
termination of publication of the Daily Mail unless it is financially 
failing and the United States approves; and specifies procedures for 
the disposition of the Daily Mail's intellectual property in the event 
that the newspaper ceases publication. The Final Judgment will expire 
ten years from the date of entry unless the Court grants an extension.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 5th Street, 
NW., Room 1010, Washington, DC 20530 (telephone: 202-514-2481), on the 
Department of Justice's Web site at http://www.usdoj.gov/atr, and at 
the Office of the Clerk of the United States District Court for the 
Southern District of West Virginia. Copies of these materials may be 
obtained from the Antitrust Division upon request and payment of the 
copying fee set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be addressed 
to John R. Read, Chief, Litigation III Section, Antitrust Division, 
U.S. Department of Justice, 450 5th Street, NW., Suite 4000, 
Washington, DC 20530, (202) 307-0468.

J. Robert Kramer II,
Director of Operations, Antitrust Division.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF WEST VIRGINIA 
CHARLESTON DIVISION

    UNITED STATES OF AMERICA, Plaintiff, v. DAILY GAZETTE COMPANY, and 
MEDIANEWS GROUP, INC. Defendants.
    Civil Action No. 2:07-0329.
    Filed: May 22, 2007.
    Stamp: COPY--The original was filed in the Clerk's Office at 
Charleston on May 22, 2007.
TERESA L. DEPPNER, CLERK, U.S. District Court, Southern District of 
West Virginia

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to obtain equitable and other relief to prevent and restrain 
defendants Daily Gazette Company (``Gazette Company'') and MediaNews 
Group, Inc. (``MediaNews Group'') from continuing to violate Section 7 
of the Clayton Act, 15 U.S.C. 18, and Sections 1 and 2 of the Sherman 
Act, 15 U.S.C. 1 & 2, as amended. The United States complains and 
alleges as follows:

I. Nature of the Action

    1. This lawsuit challenges a series of transactions in 2004 that 
extinguished competition between Charleston's two daily newspapers by 
combining The Charleston Gazette and the Charleston Daily Mail under 
the common ownership of Gazette Company as part of a plan to terminate 
the publication of the Charleston Daily Mail and leave Charleston with 
a single daily newspaper.
    2. For over 100 years, the citizens of Charleston have enjoyed the 
benefits of two local daily newspapers. Between 1958 and May 7, 2004, 
the owners of the Charleston Gazette and the Charleston Daily Mail 
eliminated some--but not all--elements of competition between the two 
newspaper owners by forming a joint operating agreement (``JOA''), 
referred to as Charleston Newspapers. Under the agreement, the two 
newspapers coordinated certain financial and operational aspects of 
producing the two newspapers--principally, the printing, distribution, 
and sales of subscriptions and advertisements. Importantly, however, 
the two newspapers did not combine all of their operations or 
ownership. Until May 2004, the Gazette Company maintained separate 
ownership of and independently made decisions regarding the content and 
style of the Charleston Gazette that determined the attractiveness and 
worth of the paper to readers. Similarly, MediaNews Group and its 
predecessors maintained separate ownership of the Charleston Daily Mail 
and independently made all decisions regarding the content and style of 
the Charleston Daily Mail that determined the attractiveness and worth 
of the paper to readers in the Charleston area. The attractiveness to 
readers of each paper directly affected the value of the separate 
ownership interest of each company.
    3. On May 7, 2004, Gazette Company, the Charleston Gazette's owner, 
acquired all of the assets of the Charleston Daily Mail, its only 
competitor, from MediaNews Group. On that same day, Gazette Company and 
MediaNews Group also entered into a new arrangement that gave MediaNews 
Group nominal responsibility for the news and editorial content of the 
Charleston Daily Mail, but gave Gazette Company ultimate control over 
the budgets, management, and news gathering and reporting of both 
newspapers, as well as the right to receive all the profits of both 
newspapers. The arrangement also gave Gazette Company the unilateral 
right to shut down the Charleston Daily Mail.
    4. The May 2004 transactions eliminated all remaining competition 
between the owners of the papers by consolidating the two papers under 
the ownership and control of Gazette Company as part of a plan by the 
Gazette Company to terminate publication of the Charleston Daily Mail 
and thereby force upon consumers in Charleston a single newspaper. 
Gazette Company's plan was to use that control to weaken the Daily Mail 
to the point where it would fail and could be eliminated as a 
competitor to the Charleston Gazette, and Gazette Company acted quickly 
to carry out that

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plan--until the Department's investigation interrupted those efforts.
    5. Because the May 2004 transactions were part of a plan to 
terminate the publication of one of the two newspapers, the 
transactions eliminated any claim that the arrangement is immune from 
antitrust scrutiny under the Newspaper Preservation Act (``NPA''), 15 
U.S.C. 1801, et seq. The NPA permits JOAs to be used to coordinate many 
of the commercial activities of otherwise independent newspapers, 
including the prices the newspapers charge for subscriptions and 
advertising, but only if the participants meet the Act's requirements 
by, inter alia, preserving the existence of two newspapers with 
independent editorial and reportorial operations. The May 2004 
transactions invalidated any claim by Charleston Newspapers to 
antitrust immunity under the NPA because they were part of a plan to 
terminate publication of the Charleston Daily Mail, leaving only one 
daily newspaper in the Charleston area.
    6. Without the benefit of antitrust immunity, the arrangement and 
the May 2004 transactions violated the antitrust laws. The Charleston 
Gazette and the Charleston Daily Mail are the only two daily newspapers 
in the Charleston area, so elimination of competition between them 
unreasonably restrains competition in two distinct respects. First, by 
consolidating ownership of the two newspapers under Gazette Company, 
the transactions eliminated the economic incentives that previously had 
existed for each owner to increase the attractiveness of its newspaper 
to readers in the Charleston area. This reduction in competition 
violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. 1 and 2, and 
Section 7 of the Clayton Act, 15 U.S.C. 18. Second, the arrangement 
eliminated competition between the two newspapers in the sale of 
subscriptions and advertising. Because the two newspapers did not enjoy 
antitrust immunity under the NPA at least as of May 7, 2004, and 
because, as of May 2004, neither of the two papers qualified as a 
failing firm within the meaning of the antitrust laws, such an 
elimination of competition violated Sections 1 and 2 of the Sherman 
Act.
    7. Consequently, as discussed more fully herein, the United States 
seeks, inter alia, an order: (a) Rescinding the May 7 transactions; and 
(b) requiring Gazette Company and MediaNews Group to restore the 
Charleston Daily Mail's competitiveness to the level that existed prior 
to the May 7 transactions.

II. Jurisdiction and Venue

    8. Both Gazette Company and MediaNews Group are engaged in, and 
their activities substantially affect, interstate commerce. Through 
subsidiaries and partnerships it controls, Gazette Company sells 
advertising, which is published in the Charleston Gazette and the 
Charleston Daily Mail, to national advertisers located throughout the 
United States. In addition, Gazette Company and Media News Group 
regularly publish news, syndicated material, and other information in 
the Charleston Gazette and the Charleston Daily Mail that is gathered 
from other states and nations. In turn, they communicate to newspapers 
outside West Virginia the news and information that their staffs 
gather.
    9. The Court has subject matter jurisdiction under 15 U.S.C. 4 and 
25, and 28 U.S.C. 1331, 1337(a), and 1345, to prevent and restrain the 
Defendants from continuing to violate 15 U.S.C. 1, 2 and 18.
    10. The defendants maintain offices, transact business, and are 
found in Charleston, West Virginia. A substantial part of the events 
giving rise to the violations alleged herein occurred in Charleston, 
West Virginia. Accordingly, this Court has personal jurisdiction over 
the Defendants and venue is proper in this judicial district under 
Section 12 of the Clayton Act, 15 U.S.C. 22, and under 28 U.S.C. 1391.

III. Defendants

    11. Defendant Gazette Company, the owner and publisher of the 
Charleston Gazette and, since May 2004, the owner of the Charleston 
Daily Mail, is a privately-held corporation organized and existing 
under the laws of the State of West Virginia, with its principal place 
of business in Charleston, West Virginia. Through its subsidiaries, 
Daily Gazette Publishing Company LLC and Daily Gazette Holding Company 
LLC, and in its capacity as General Partner of Charleston Newspapers 
Holdings Limited Partnership, Gazette Company owns all the assets and 
controls all the business operations of Charleston Newspapers. 
Charleston Newspapers is responsible for printing, circulating, 
promoting and marketing both the Charleston Gazette and the Charleston 
Daily Mail.
    12. Defendant MediaNews Group, the owner and publisher of the 
Charleston Daily Mail from about September 1998 until May 2004, is a 
corporation organized and existing under the laws of the State of 
Delaware, with its principal place of business in Denver, Colorado. 
MediaNews Group owns and publishes several dozen daily newspapers in 
various markets throughout the United States. On or about May 7, 2004, 
MediaNews Group sold the Charleston Daily Mail and related assets to 
Gazette Company. Today, MediaNews Group purports to provide 
``management and supervision'' services for the Charleston Daily Mail 
in return for a fixed fee paid by Gazette Company. In reality, however, 
the news and editorial assets and resources of the Charleston Daily 
Mail are under the ownership and control of Gazette Company.

IV. Background

A. Competition Between the Two Newspaper Owners

    13. For many years, the Charleston Gazette, founded in 1873, and 
the Charleston Daily Mail, founded in 1880, operated completely 
independently. In 1958, the then-owners of the two newspapers entered 
into a JOA, which combined the two newspapers' printing, advertising, 
subscription sales, and distribution functions under a single 
management. Congress, in 1970, seeking to preserve the ability of 
independent newspapers to reduce operating expenses through JOAs, gave 
JOA arrangements then in effect explicit, but limited, antitrust 
immunity when it passed the Newspaper Preservation Act, 15 U.S.C. 1801, 
et seq., as long as they met certain requirements. To receive that 
immunity, Congress required, inter alia, that the newspapers in a JOA 
be separately owned or controlled, that they maintain separate newsroom 
staffs, that their editorial policies be ``independently determined,'' 
and that at the time the JOA was entered, no more than one newspaper in 
the JOA ``was likely to remain or become a financially sound 
publication * * *.'' Id.
    14. Until May 7, 2004, the Gazette Company and MediaNews Group were 
equal partners in the JOA, with each company separately owning its 
respective newspaper. In addition, each company appointed half of the 
representatives to a JOA committee that approved all significant 
decisions, including each newspaper's budget and its advertising and 
subscription rates. That committee also selected a General Manager who 
was responsible for the Charleston JOA's day-to-day operations.
    15. Within the Charleston JOA, each company shared profits and 
losses equally. However, each company had an independent economic 
incentive to increase the value of its respective newspaper ownership 
interest by attracting readers to that newspaper. The number of 
newspapers circulated or

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sold is an important yardstick for measuring the franchise or sales 
value of a newspaper asset. In general, a newspaper that invests in 
increasing its quality and its appeal will attract more readers and 
advertisers, will have a longer lifespan, and will have an increased 
market value. Maintaining or increasing the value of a newspaper within 
a JOA can affect the outcome of, among other things, renegotiations of 
the terms or renewal of a JOA, negotiations over one or both JOA 
newspapers operating outside a JOA, and the identity and viability of 
the newspapers following the expiration or termination of a JOA. Thus, 
the owners of the Charleston newspapers had a variety of long and 
short-term economic incentives to compete to attract readers to their 
respective newspapers.
    16. The owners of the Charleston Gazette and the Charleston Daily 
Mail competed vigorously against each other for readers prior to the 
May 7 transactions. They did so in various ways, such as seeking to 
generate original news and other content of interest to readers; trying 
to cover local news with greater depth, breadth and accuracy; breaking 
stories first; and offering the most attractive mix of news, features 
and editorials to readers. All of these decisions were outside the 
cooperation authorized under the JOA. This head to-head competition 
between the owners of the Charleston Gazette and the Charleston Daily 
Mail benefitted readers by giving them a choice between two daily 
newspapers with unique news and other content.
    17. The Charleston Gazette and the Charleston Daily Mail remained 
consistently profitable through May 2004. Neither newspaper was in 
danger of failing in the near future.

B. Prelude to the May 7 Transactions

    18. In late 2003, MediaNews Group negotiated to sell the Charleston 
Daily Mail along with MediaNews Group's 50 percent stake in the 
Charleston JOA to an experienced third-party newspaper company. On 
December 18, 2003, that company signed a Letter of Intent to purchase 
the Charleston Daily Mail and MediaNews Group's share of the Charleston 
JOA for $55 million. MediaNews Group, pursuant to a Right of First 
Refusal provision included in the Charleston JOA, was required to 
notify Gazette Company of the Letter of Intent and give Gazette Company 
the opportunity to match the terms offered by the third party.
    19. Gazette Company sought to eliminate competition from the 
Charleston Daily Mail, rather than have a new owner continue that 
competition. Gazette Company achieved that goal by matching the third 
party's $55 million offer to acquire all of the ownership interest in 
the Charleston Daily Mail. During this time, Gazette Company developed 
a plan to shut down the Charleston Daily Mail and thus become the 
publisher of the sole remaining daily newspaper in Charleston. This 
plan, formulated with the advice of an outside consultant and shared 
with Gazette Company's lenders, called for the rapid reduction of the 
Charleston Daily Mail's circulation to a level at which the newspaper 
would no longer be economically viable (projected to be achieved within 
two or three years). Gazette Company believed it could then 
successfully argue to the Department of Justice that it should not 
oppose the termination of the JOA because the Charleston Daily Mail 
would be a ``failing company.'' Over the years, the Department of 
Justice has elected not to challenge the decision of several newspaper 
companies to stop publishing one of the newspapers in a JOA based on a 
demonstration that circulation for the newspaper had shrunk to the 
point where the paper was not economically viable and no buyer could be 
found.

C. The May 7 Transactions

    20. On May 7, 2004, Gazette Company and MediaNews Group entered 
into two simultaneous transactions that had the purpose and effect of 
lessening competition between the Charleston Gazette and the Charleston 
Daily Mail, with the ultimate goal of creating a monopoly. First, 
Gazette Company acquired from MediaNews Group control of the Charleston 
Daily Mail's assets and MediaNews Group's 50 percent ownership interest 
in the Charleston JOA, for a purchase price of approximately $55 
million. Second, the parties entered into a new contract that preserved 
the appearance that the Charleston Daily Mail was still being published 
by MediaNews Group but, in fact, gave Gazette Company control over 
Charleston Newspapers, which is now owned 100 percent by Gazette 
Company. Under the new arrangement, MediaNews Group no longer shares in 
the profits or losses of the two newspapers nor contributes to the 
capital costs of the business. The arrangement allows Gazette Company 
unfettered discretion to set the news and editorial budget for the 
Charleston Daily Mail and gives Gazette Company the sole power to 
terminate publication of the Charleston Daily Mail when it sees fit.
    21. The May 7 transactions ended the prior JOA and created an 
entirely new arrangement between Gazette Company and MediaNews Group 
that does not meet the statutory definition of a JOA under Newspaper 
Preservation Act. The arrangement created by the May 7 transactions 
does not qualify for the limited antitrust immunity under the Newspaper 
Preservation Act for several reasons, including that it has not been 
approved by the Attorney General and that it was part of a plan to 
terminate one of the two daily newspapers.
    22. The May 7 transactions gave Gazette Company, acting through its 
control of Charleston Newspapers, the unilateral right to take 
immediate and deliberate steps to implement its plan to shut down the 
Charleston Daily Mail by 2007. Shortly after the May 7 transactions 
were consummated, Gazette Company stopped all promotions and discounts 
for the Charleston Daily Mail; it stopped soliciting new readers for 
the Charleston Daily Mail; it stopped delivering the Charleston Daily 
Mail to thousands of customers; it attempted to convert existing 
Charleston Daily Mail home delivery subscribers to Charleston Gazette 
subscriptions; it stopped publishing a Saturday edition of the 
Charleston Daily Mail; it allowed almost half of the Charleston Daily 
Mail's reporters to leave the newspaper without permitting 
replacements, thus crippling the ability of the Charleston Daily Mail 
to cover the news; and it cut the Charleston Daily Mail's newsroom 
budget substantially in both 2004 and 2005, which forced the Charleston 
Daily Mail to continue reducing the breadth and depth of its news 
coverage.
    23. As a result of Gazette Company's actions following the May 7 
transactions, the Charleston Daily Mail's circulation dropped from 
35,076 in February 2004 to 23,985 in January 2005. This decline in 
circulation matched almost precisely the projections that Gazette 
Company and its consultants made as part of Gazette Company's pre-
acquisition plan to shut down the Charleston Daily Mail by 2007. During 
that same February 2004 to January 2005 time period, the Charleston 
Gazette's circulation increased slightly, peaking at over 52,000. Only 
after learning in or about December 2004 that the Antitrust Division of 
the Department of Justice was investigating the May 7 transactions did 
defendant Gazette Company take any steps to limit further damage to the 
Charleston Daily Mail caused by the actions described above. These 
steps, however, failed to restore the competitive conditions that had 
existed prior to the May 7 transactions.

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V. Relevant Markets

A. The Relevant Product Markets

    24. Local daily newspapers, such as the Charleston Gazette and the 
Charleston Daily Mail, provide a unique package of attributes for their 
readers. They provide national, state, and local news in a timely 
manner and in a convenient, hardcopy format. The news stories featured 
in such newspapers are more detailed, when compared to the news 
reported by radio or television, and they cover a wide range of topics 
of interest to local readers, not just major news highlights. 
Newspapers, such as the Charleston Gazette and the Charleston Daily 
Mail, are portable and allow the reader to read the news, 
advertisements, and other information at his or her own convenience. 
Readers also value other features of local daily newspapers, such as 
calendars of local events, movie and TV listings, classified 
advertisements, commercial advertisements, legal notices, comics, 
syndicated columns, and obituaries. Most readers of local daily 
newspapers in the Charleston area do not consider weekly newspapers, 
radio news, television news, Internet news, or any other media to be 
adequate substitutes for the two local daily newspapers serving the 
Charleston area. Thus, in the event of a small but significant increase 
in the price of local daily newspapers, the number of readers who would 
switch to other sources of local news and information, and would stop 
buying any daily local newspaper, would not be sufficient to make such 
a price increase unprofitable.
    25. Advertising in the Charleston Gazette and the Charleston Daily 
Mail allows advertisers to reach a broad cross-section of consumers in 
the Charleston metropolitan area with a detailed message in a timely 
manner. A substantial portion of advertisers seeking to reach 
Charleston area consumers do not consider other types of advertising, 
such as that in weekly newspapers, on radio, on television, or on the 
Internet to be adequate substitutes for advertising in a local daily 
newspaper. Thus, in the event of a small but significant increase in 
the price of daily newspaper local advertising, the number of 
advertisers seeking to reach Charleston area consumers that would 
substitute these other types of advertising for advertising in a local 
daily newspaper, or would reduce their purchase of advertising in a 
local daily newspaper, would not be sufficient to make such a price 
increase unprofitable.
    26. Accordingly, the sale of local daily newspapers to readers, and 
the sale of access to those readers to advertisers in those newspapers, 
each constitutes a line of commerce and a relevant product market 
within the meaning of Section 7 of the Clayton Act and for purposes of 
Sections 1 and 2 of the Sherman Act.

B. The Relevant Geographic Market

    27. The Charleston Gazette and the Charleston Daily Mail are both 
produced, published, and distributed to readers in the Charleston, West 
Virginia area (primarily Kanawha and Putnam Counties). Both newspapers 
provide news relating to the Charleston area in addition to state and 
national news.
    28. Local daily newspapers that serve areas outside of the 
Charleston area do not regularly provide local news specific to the 
Charleston area. From a reader's standpoint, local daily newspapers 
serving areas outside of the Charleston area are not acceptable 
substitutes for the Charleston Gazette and the Charleston Daily Mail. 
For this reason, local daily newspapers outside of the Charleston area 
do not have any significant circulation or sales in Charleston. In the 
event of a small but significant increase in the price of local daily 
newspapers in Charleston, the number of readers who would substitute 
local daily newspapers outside of the Charleston area, and would stop 
buying any daily local newspaper, would not be sufficient to make such 
a price increase unprofitable.
    29. The Charleston Gazette and the Charleston Daily Mail allow 
advertisers to target readers in the Charleston area. From the 
standpoint of an advertiser selling goods or services in the Charleston 
area, advertising in local daily newspapers serving areas outside of 
the Charleston area is not an acceptable substitute for advertising in 
the Charleston Gazette and the Charleston Daily Mail. In the event of a 
small but significant increase in the price of advertisements in local 
daily newspapers serving the Charleston area, the number of advertisers 
that would substitute local daily newspapers outside of the Charleston 
area, and would reduce their purchase of advertising in a local daily 
newspaper, would not be sufficient to make such a price increase 
unprofitable.
    30. Accordingly, the Charleston, West Virginia area is a section of 
the country and a relevant geographic market within the meaning of 
Section 7 of the Clayton Act and for purposes of Sections 1 and 2 of 
the Sherman Act.

VI. Anticompetitive Effects

    31. The May 7 transactions have and will continue to substantially 
lessen competition in the local daily newspaper market in the 
Charleston, West Virginia area by giving Gazette Company a monopoly in 
the Charleston local daily newspaper market. These transactions gave 
Gazette Company control over and the power to weaken or eliminate the 
Charleston Daily Mail and have already had, and will continue to have, 
among others, the following adverse effects on competition:
    a. Reduced output (both quantity and quality) of newspapers; and
    b. Increased prices to readers and advertisers.

VII. Entry

    32. Entry by local daily newspapers into the Charleston, West 
Virginia, area is time-consuming and difficult, and is not likely to 
prevent the anticompetitive effects of the May 7 transactions by 
constraining Gazette Company's market power in the foreseeable future. 
Local daily newspapers incur significant fixed costs, many of which are 
sunk. Examples of these sunk costs include building or gaining access 
to a printing facility, establishing a distribution network, hiring 
reporters and editors, news gathering, and marketing the very existence 
of the new paper, all of which take substantial time. These costs often 
are termed ``first copy'' costs because they are costs that newspaper 
companies must incur before they print the first copies of their 
newspapers. In the event that the entrant fails or exits the newspaper 
industry, it cannot recover all of these costs, making entry risky and 
likely unprofitable. As a result, entry into Charleston daily newspaper 
market would not be timely, likely, or sufficient to prevent the harm 
to competition resulting from the May 7 transactions. Since May 7, 2004 
there have been no attempts to enter the local daily newspaper market 
in the Charleston area.

VIII. Violations

Count One

(Violation of Section 7 of the Clayton Act)
    33. Each and every allegation in paragraphs 1 through 32 of this 
Complaint is here realleged with the same force and effect as though 
said paragraphs were here set forth in full.
    34. Gazette Company and MediaNews Group are hereby named as 
defendants on Count One of this Complaint.
    35. The May 7 transactions constitute an acquisition of assets by 
Gazette Company from MediaNews Group, the effect of which has been and 
is likely to continue to be to lessen competition substantially and to 
tend to create a monopoly in interstate trade and

[[Page 11686]]

commerce in the sale of local daily newspapers and advertising in those 
newspapers in the Charleston, West Virginia area, in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18.
    36. The May 7 transactions, in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18, have had the substantial anticompetitive 
effects set forth in ] 31 above, and, unless rescinded and restrained, 
those effects likely will continue.

Count Two

(Violation of Section 1 of the Sherman Act)
    37. Each and every allegation in paragraphs 1 through 32 of this 
Complaint is here realleged with the same force and effect as though 
said paragraphs were here set forth in full.
    38. Gazette Company and MediaNews Group are hereby named as 
defendants on Count Two of this Complaint.
    39. The May 7 transactions have eliminated the incentives and 
ability for MediaNews Group to compete effectively with Gazette Company 
in Charleston and have given Gazette Company the power to control and, 
ultimately, eliminate the Charleston Daily Mail. The arrangement 
created by the May 7 transactions is not immune under the Newspaper 
Preservation Act. For the above reasons, the May 7 transactions 
constitute a contract, combination or conspiracy by and among 
defendants that has unreasonably restrained trade and commerce in 
violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
    40. The May 7 transactions have had and will continue to have 
anticompetitive effects in the relevant market, including among others, 
those set forth in ] 31, above.
    41. The above violation is continuing and will continue unless the 
relief requested hereinafter is granted.

Count Three

(Violation of Section 2 of the Sherman Act)
    42. Each and every allegation in paragraphs 1 through 32 of this 
Complaint is here realleged with the same force and effect as though 
said paragraphs were here set forth in full.
    43. Gazette Company is hereby named as the defendant on Count Three 
of this Complaint.
    44. Through the anticompetitive conduct described herein, Gazette 
Company has monopolized the Charleston, West Virginia, local daily 
newspaper market. As a result of defendants' actions, Gazette Company 
now possesses substantial monopoly power in the sale of local daily 
newspapers in the Charleston area. Gazette Company has willfully 
maintained, and unless restrained by the Court will continue to 
willfully maintain, this unlawful monopoly power through 
anticompetitive and unreasonably exclusionary conduct. Defendants' 
actions and practices constitute unlawful monopolization in violation 
of Section 2 of the Sherman Act, 15 U.S.C. 2.

IX. Requested Relief

    45. The United States requests that the Court:
    a. Adjudge and decree that the May 7, 2004, transactions are 
illegal, and their effects may be substantially to lessen competition, 
or to tend to create a monopoly in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18;
    b. Adjudge and decree that the May 7 transactions constitute an 
illegal restraint of interstate trade and commerce in violation of 
Section 1 of the Sherman Act, 15 U.S.C. 1;
    c. Adjudge and decree that Gazette Company has unlawfully 
monopolized the Charleston daily newspaper market in violation of 
Section 2 of the Sherman Act, 15 U.S.C. 2;
    d. Rescind the May 7 transactions;
    e. Direct the defendants to restore the Charleston Daily Mail to 
its pre-May 7, 2004 competitive condition;
    f. Award the United States such other and further relief as the 
Court may deem just and proper to redress and prevent recurrence of the 
above violations, to dissipate their anticompetitive effects, and to 
restore effective competition in the Charleston daily newspaper market; 
and
    g. Award the United States the costs of this action.

DATED: May 22, 2007

FOR PLAINTIFF UNITED STATES OF AMERICA

THOMAS O. BARNETT,

Assistant Attorney General, Antitrust Division

DAVID L. MEYER,

Deputy Assistant Attorney General, Antitrust Division

J. ROBERT KRAMER II,

Director of Operations
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CHARLES T. MILLER,

United States Attorney, Southern District of West Virginia, by 
Stephen M. Horn /s/by CAD, Assistant United States Attorney, WV 
State Bar Number 1788, P.O. Box 1713, Charleston, WV 25326, Phone: 
304-345-2200 Fax: 304-347-5443, E-mail: [email protected]

JOHN R. READ,

Chief, Litigation III

NINA B. HALE,

Assistant Chief, Litigation III

THOMAS J. HORTON
BENNETT J. MATELSON
WILLIAM H. JONES II
MARK A. MERVA
MATTHEW J. BESTER
JENNIFER A. WAMSLEY

BERNARD M. HOLLANDER,

Senior Trial Attorney, Attorneys for the United States, United 
States Department of Justice, Antitrust Division, Litigation III 
Section, 325 7th Street, NW., Suite 300, Washington, DC 20530, 
Phone: 202-616-5871 Fax: 202-514-7308, E-mail: 
[email protected], [email protected]

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF WEST VIRGINIA

CHARLESTON DIVISION

    UNITED STATES OF AMERICA, Plaintiff, v. DAILY GAZETTE COMPANY, and 
MEDIANEWS GROUP, INC., Defendants.
    Civil Action No. 2:07-0329.
    Judge Copenhaver.
    Magistrate Judge Stanley.
    Filed: January 20, 2010

[Proposed] Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on May 22, 2007, the United States and Defendants, Daily Gazette 
Company and MediaNews Group, Inc., by their respective attorneys, have 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law, and without this Final 
Judgment constituting any evidence against or admission by any party 
regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt 
adoption of certain procedures and prohibitions by Defendants to assure 
that competition is not substantially lessened;
    And whereas, the United States requires Defendants to agree to 
certain procedures and prohibitions for the purpose of remedying the 
loss of competition alleged in the Complaint;
    And whereas, Defendants have represented to the United States that 
the actions required below can and will be made and that Defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the provisions contained below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon

[[Page 11687]]

consent of the parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18), and Sections 1 and 2 of the Sherman 
Act, as amended (15 U.S.C. 1 & 2).

II. Definitions

    As used in this Final Judgment:
    A. ``Charleston Daily Mail'' means the Daily Newspaper of that name 
distributed in the Charleston, West Virginia Area.
    B. ``Charleston Gazette'' means the Daily Newspaper of that name 
distributed in the Charleston, West Virginia Area.
    C. ``Charleston Newspapers'' means the unincorporated joint venture 
operating under the laws of West Virginia, with its principal place of 
business in Charleston, West Virginia, its successors and assigns, and 
its subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their shareholders, directors, officers, managers, 
agents, and employees.
    D. ``Charleston Newspapers Holdings, L.P.'' means the Delaware 
Limited Partnership formed on May 7, 2004.
    E. ``Charleston, West Virginia Area'' means Kanawha and Putnam 
Counties in West Virginia.
    F. ``Daily Newspaper'' means a print publication which is published 
no fewer than five days per week and in which a substantial portion of 
the content is devoted to the dissemination of news and editorial 
opinion.
    G. ``Editorial Content'' means the news, feature, and opinion 
content of, and the format, dress, makeup, and design of, a Daily 
Newspaper.
    H. ``Failing Firm'' means a firm that has satisfied all of the 
conditions stated in the U.S. Department of Justice and Federal Trade 
Commission Horizontal Merger Guidelines as applied by the Department of 
Justice and/or federal courts to newspapers published in a joint 
operating agreement under the Newspaper Preservation Act, 15 U.S.C. 
1801-1804.
    I. ``Final Judgment'' includes the following agreements attached as 
Exhibit A: Amended and Restated Limited Partnership Agreement for 
Charleston Newspapers Holdings L.P.; Amended and Restated Operating 
Agreement of Daily Gazette Holding Company, LLC; Second Amended and 
Restated Joint Operating Agreement; the Put/Call Agreement; and the 
Charleston Newspapers Holdings L.P. Warrant to Purchase Class B Limited 
Partnership Units Initially Constituting a 20% Percentage Interest.
    J. ``Gazette Company'' means defendant Daily Gazette Company, a 
privately-held corporation organized and existing under the laws of the 
State of West Virginia, with its principal place of business in 
Charleston, West Virginia, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their shareholders, directors, officers, managers, 
agents, and employees. Without limiting the foregoing, Gazette Company 
shall include Charleston Newspapers.
    K. ``Intellectual Property of the Charleston Daily Mail'' includes 
the masthead, trademarks, copyrights, trade names, service names and 
service marks of the Charleston Daily Mail; its subscriber lists and 
advertiser lists; print and electronic archives; associated Web sites 
and URLs (including ``dailymail.com''); and all legal rights associated 
with these assets.
    L. ``MediaNews Group'' means defendant MediaNews Group, Inc., now 
known as Affiliated Media, Inc., a corporation organized and existing 
under the laws of the State of Delaware, with its principal place of 
business in Denver, Colorado, its successors and assigns, and their 
shareholders, subsidiaries, divisions, groups, affiliates, partnerships 
and joint ventures, and their directors, officers, managers, agents, 
and employees. Without limiting the foregoing, MediaNews Group shall 
include Charleston Publishing Company.
    M. ``Person'' means any natural person, corporate entity, 
partnership, joint venture, association, government entity, trust, or 
other business or legal entity, whether private or governmental.
    N. ``Publication'' means all activities associated with the 
business of offering a Daily Newspaper to the public as a commercial 
endeavor, including but not limited to, editing, writing, printing, 
circulating, operating, marketing, and distributing such Daily 
Newspapers and selling advertisements and promotions therein.
    O. ``Relating to'' or ``Relates to'' means in whole or in part 
constituting, containing, concerning, discussing, describing, 
analyzing, identifying, or stating.
    P. ``United States'' means the Department of Justice, Antitrust 
Division.
    Q. The terms ``and'' and ``or'' have both conjunctive and 
disjunctive meanings.

III. Applicability

    This Final Judgment applies to Gazette Company and MediaNews Group, 
as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this Final 
Judgment by personal service or otherwise.

IV. Required and Prohibited Conduct

    A. (1) Within 5 business days after the entry of this Final 
Judgment, Gazette Company and MediaNews Group shall enter into, and 
abide by the terms of, the Amended and Restated Limited Partnership 
Agreement for Charleston Newspapers Holdings L.P.; the Amended and 
Restated Operating Agreement of Daily Gazette Holding Company, LLC; the 
Second Amended and Restated Joint Operating Agreement; the Put/Call 
Agreement; and the Charleston Newspapers Holdings L.P. Warrant to 
Purchase Class B Limited Partnership Units Initially Constituting a 20% 
Percentage Interest, which are incorporated into this Final Judgment 
and attached hereto as Exhibit A. Gazette Company and MediaNews Group 
shall operate Charleston Newspapers, Charleston Newspapers Holdings 
L.P., the Charleston Gazette and the Charleston Daily Mail in 
accordance with the terms of the agreements in Exhibit A. No agreement 
in Exhibit A may be modified, amended, superseded or terminated without 
the prior written approval of the United States for the term of the 
Final Judgment. Upon entering into the contracts in Exhibit A, any 
existing agreements between Gazette Company and MediaNews Group 
relating to the Publication of any Daily Newspaper in Charleston, West 
Virginia, other than those contained in Exhibit A, shall be void and 
shall not be enforced thereafter. Except as expressly authorized by the 
agreements in Exhibit A, Gazette Company and MediaNews Group shall not 
directly or indirectly enter into any agreement subsequent to the entry 
of this Final Judgment that relates to the Publication of any Daily 
Newspaper in Charleston, West Virginia, other than agreements entered 
into with third parties in the ordinary course of business, without the 
prior written consent of the United States.
    (2) Defendants shall not, without the prior written consent of the 
United States, pledge or otherwise offer as security or collateral, the 
assets comprising the Intellectual Property of the Charleston Daily 
Mail, in whole or in part, for credit or other consideration, to a 
greater extent than such assets were

[[Page 11688]]

pledged or offered as security or collateral as of December 11, 2009.
    B. The Charleston Daily Mail shall continue to be published as a 
Daily Newspaper. The publication of the Charleston Daily Mail as a 
Daily Newspaper shall not be terminated unless it is a Failing Firm and 
the United States has given its prior written approval, which approval 
shall not be unreasonably withheld. Prior to receiving written approval 
from the United States to terminate publication of the Charleston Daily 
Mail as a Daily Newspaper, Gazette Company and MediaNews Group may not 
establish a termination date for the Charleston Daily Mail. Disputes 
regarding the application of the provisions of this Section IV(B) may 
be submitted to the Court for resolution.
    C. If during the term of this Final Judgment the Charleston Daily 
Mail shall cease publication as a Daily Newspaper, or the operating 
agreement between Defendants governing Charleston Newspapers is 
dissolved or terminated, or Charleston Newspapers Holdings, L.P. is 
dissolved or terminated (collectively referred to as ``Termination 
Events''), ownership of the Intellectual Property of the Charleston 
Daily Mail shall, after the prior satisfaction of the claims of all 
creditors of Charleston Newspapers Holdings, L.P. in accordance with 
the provisions of Section 7.3 of the Amended and Restated Limited 
Partnership Agreement for Charleston Newspapers Holdings, L.P., 
immediately transfer to MediaNews Group at no cost. Within ninety days 
prior to the occurrence of any of the Termination Events, Gazette 
Company shall hire, subject to the approval of the United States, an 
appraiser experienced in the newspaper industry to perform an 
assessment of the fair market value, separately, of each asset 
comprising the Intellectual Property of the Charleston Daily Mail. To 
the extent the valuations determine that any assets comprising the 
Intellectual Property of the Charleston Daily Mail may be freely 
disposed of by Gazette Company under the terms of Section 7.8 of the 
United Bank Loan Agreement or the equivalent provision of any future 
credit agreement, Gazette Company shall transfer those assets to 
MediaNews Group (or its assignee) at no cost. In the event Gazette 
Company is unable to transfer immediately all or some of the assets 
comprising the Intellectual Property of the Charleston Daily Mail due 
to any security interest or lien held on those assets by any creditor, 
Gazette Company shall use its good faith efforts to (1) persuade any 
such creditor to release the security interest or lien on those assets; 
(2) assist any third party seeking such a release; or (3) transfer the 
assets as soon as possible in the next fiscal year (to the extent 
permissible under the United Bank Loan Agreement or any future credit 
agreement). Any assets that are released by the creditors shall be 
transferred to MediaNews Group (or its assignee) at no cost. In the 
event that the Charleston Daily Mail's print and electronic archives 
are not transferred to MediaNews Group, Charleston Newspapers will 
grant to MediaNews Group (or its assignee) a royalty-free license to 
use the Charleston Daily Mail's print and electronic archives for the 
sole purpose of continuing to publish the Charleston Daily Mail for so 
long as MediaNews Group (or its assignee) publishes the Charleston 
Daily Mail as a Daily Newspaper in Charleston. Except as expressly 
authorized by this Final Judgment, Gazette Company shall not directly 
or indirectly transfer to any other Person the ownership of some or all 
of the Intellectual Property of the Charleston Daily Mail without the 
prior written consent of the United States. If during the term of this 
Final Judgment the ownership of some or all of the Intellectual 
Property of the Charleston Daily Mail is transferred from Gazette 
Company to any other Person, Gazette Company shall not reacquire any 
part of the Intellectual Property of the Charleston Daily Mail during 
the term of this Final Judgment. Transfer of title to the Intellectual 
Property of the Charleston Daily Mail by Gazette Company shall be made 
free and clear of any liens or other encumbrances to the free transfer 
of title by the acquirer (including but not limited to rights of first 
refusal).
    D. The Editorial Content of the Charleston Daily Mail shall be 
determined solely by MediaNews Group and the staff of the Charleston 
Daily Mail. The Editorial Content of the Charleston Gazette shall be 
determined solely by Gazette Company and the staff of the Charleston 
Gazette. Gazette Company shall not, directly or indirectly, take any 
action to influence the Editorial Content of the Charleston Daily Mail, 
nor shall MediaNews Group, directly or indirectly, take any action to 
influence the Editorial Content of the Charleston Gazette. Gazette 
Company and MediaNews Group shall not enter into any agreement limiting 
the separate and independent determination of the Editorial Content of 
their respective Daily Newspapers.
    E. Gazette Company and MediaNews Group shall not take any action 
with the intent to cause the Charleston Daily Mail to become a Failing 
Firm. Neither Gazette Company nor MediaNews Group shall discriminate 
against, or cause Charleston Newspapers to discriminate against, the 
Charleston Daily Mail in performing circulation sales or advertising 
sales activities.
    F. Commencing no later than thirty (30) days after the entry of 
this Final Judgment and continuing for a period of no less than six (6) 
months thereafter, Defendants shall cause Charleston Newspapers to 
offer the Charleston Daily Mail at a discount of no less than fifty 
(50) percent off the regular retail price to all new subscribers. 
Charleston Newspapers shall inform prospective new subscribers of this 
discount in any subscription solicitation efforts that it undertakes. 
During this period, Charleston Newspapers may not extend this same 
discount, or any greater discount, to subscribers of the Charleston 
Gazette.

V. Affidavits

    Within sixty (60) calendar days of the entry of this Final Judgment 
in this matter, and every year thereafter until the expiration of this 
Final Judgment, Defendants shall deliver to the United States an 
affidavit as to the fact and manner of their compliance with Section IV 
of this Final Judgment. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by Defendants, including limitation on 
information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.

VI. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, or determining whether to consent to any proposed 
agreement per Section IV(A), or whether to approve a termination of 
publication per Section IV(B), or whether to consent to any transfer 
per Section IV(C), and subject to any legally recognized privilege, 
from time to time authorized representatives of the United States, 
including consultants and other persons retained by the United States, 
shall, upon written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants, be permitted:

    (1) access during defendants' office hours to inspect and copy, 
or at the option of the United States, to require defendants to 
provide hard copy or electronic copies of, all books, ledgers, 
accounts, records, data, and

[[Page 11689]]

documents in the possession, custody, or control of defendants, 
relating to any matters contained in this Final Judgment; and
    (2) to interview, either informally or on the record, 
defendants' officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
shall be subject to the reasonable convenience of the interviewee 
and without restraint or interference by defendants.

    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or response to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give defendants ten (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

VII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, including the agreements of the parties attached 
hereto as Exhibit A, to modify any of their provisions, to enforce 
compliance, and to punish violations of their provisions.

VIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry. The expiration of 
this Final Judgment shall not automatically trigger the termination of 
the agreements contained in Exhibit A. After the expiration of this 
Final Judgment, the agreements contained in Exhibit A will be governed 
by their own terms.

IX. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and the United States's responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and response to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

Dated:
John T. Copenhaver, Jr.

United States District Judge

EXHIBIT A

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

FOR

CHARLESTON NEWSPAPERS HOLDINGS, L.P.

A DELAWARE LIMITED PARTNERSHIP

    ------------------------, 2009
    THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT is entered 
into as of ------------------------, 2009 by and among Daily Gazette 
Holding Company, LLC, a Delaware limited liability company (``DGHC'') 
and Charleston Publishing Company, a Delaware corporation (``CPC'').

Recitals

    Whereas, the Partnership was formed on May 7, 2004 in connection 
with the transactions contemplated by that certain Master Restructuring 
and Purchase Agreement (the ``Master Restructuring Agreement'') entered 
into on May 7, 2004, by Daily Gazette Company, MediaNews Group, Inc. 
(now known as Affiliated Media, Inc.) (``MNG''), CPC and the Joint 
Venture;
    Whereas, the Partnership has managed and will, pursuant to the 
Second Amended and Restated Joint Venture Agreement dated as of even 
date herewith (the ``JOA''), continue to manage the business and 
affairs of the Joint Venture; and
    Whereas, DGHC and CPC desire to amend various provisions of the 
Limited Partnership Agreement dated May 7, 2004 (the ``Prior 
Partnership Agreement''), by and among DGHC, CPC and ABRY/Charleston, 
Inc. to restate it in its entirety and to supplement it, as herein 
provided; Now, therefore, the parties agree as follows:

Article I

Definitions

    1.1 Definitions. As used herein, the following terms shall have the 
following meanings:
    1.1.1 Act: the Delaware Revised Uniform Limited Partnership Act, 6 
Del. Code, as it may be amended from time to time, and any successor to 
such Act.
    1.1.2 Affiliate: with respect to any Person, any other Person 
directly or indirectly controlling or controlled by such Person or 
under direct or indirect common control with such Person.
    1.1.3 Adjusted Capital Account: with respect to any Partner, the 
deficit balance, if any, in such Partner's Capital Account as of the 
end of the relevant Fiscal Year or other period, after giving effect to 
the following adjustments:
    (i) Crediting to such Capital Account any amounts that such Partner 
is obligated to restore to the Partnership pursuant to this Agreement 
or as otherwise described Treasury Regulations Section 1.704-
1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the 
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) 
and 1.704-2(i)(5); and
    (ii) Debiting from such Capital Account the items described in 
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
    The foregoing definition of Adjusted Capital Account is intended to 
comply with the provisions of Treasury Regulations Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
    1.1.4 Agreement: this Amended and Restated Limited Partnership 
Agreement, as it may be amended from time to time.
    1.1.5 Capital Account: with respect to any Partner, the account 
maintained for such Partner in accordance with the capital accounting 
rules of Section 704(b) of the Code and the provisions of Treasury 
Regulations Section 1.704-1(b)(2)(iv). Subject to any contrary 
requirements of the Code and the Treasury Regulations issued 
thereunder, each Partner's Capital Account shall equal (1)(i) the 
amount set forth as such Partner's capital account as of the date 
hereof as set forth on Exhibit B; (ii) the amount of money which has 
been contributed by that Partner to the

[[Page 11690]]

Partnership after the date hereof, if any; (ii) the fair market value, 
determined without regard to Code Section 7701(g) of the property, if 
any, which has been contributed by that Partner to the Partnership 
after the date hereof (net of any liabilities that are secured by such 
contributed property or that the Partnership or any other Partner is 
considered to assume under Code Section 752); (iii) allocations which 
have been made to that Partner of Net Profit and items of income and 
gain pursuant to Article V after the date hereof; and (iv) other 
additions which have been made in accordance with the Code after the 
date hereof, decreased by (2)(i) the amount of cash which has been 
distributed to that Partner by the Partnership after the date hereof; 
(ii) allocations which have been made to that Partner of Net Loss and 
items of loss and deduction pursuant to Article V after the date 
hereof; (iii) the fair market value, determined without regard to Code 
Section 7701(g), of any property which has been distributed to that 
Partner by the Partnership after the date hereof (net of any 
liabilities that are secured by such distributed property or that such 
Partner is considered to assume or take under Code Section 752); and 
(iv) other deductions which have been made in accordance with the Code 
after the date hereof.
    1.1.6 Capital Contribution: with respect to any Partner, any cash 
or other property that such Partner has contributed to the capital of 
the Partnership pursuant to the terms of this Agreement.
    1.1.7 Certificate of Limited Partnership: the certificate of 
limited partnership of the Partnership, as amended.
    1.1.8 Class A Limited Partner: a Person owning Class A Limited 
Partner Units that has been admitted to the Partnership as a Limited 
Partner pursuant to the terms of this Agreement.
    1.1.9 Class A Limited Partnership Interest: the Partnership 
Interest with respect to the Class A Limited Partner Units.
    1.1.10 Class A Limited Partner Unit: any Partnership Unit having 
the rights and obligations specified in this Agreement with respect to 
a Class A Limited Partner Unit.
    1.1.11 Class B Limited Partner: a Person owning Class B Limited 
Partner Units that has been admitted to the Partnership as a Limited 
Partner pursuant to the terms of this Agreement.
    1.1.12 Class B Limited Partner Unit: any Partnership Unit having 
the rights and obligations specified in this Agreement with respect to 
a Class B Limited Partner Unit.
    1.1.13 Code: the Internal Revenue Code of 1986, as amended.
    1.1.14 Depreciation: with respect to each Fiscal Year, an amount 
equal to the depreciation, amortization or other cost recovery 
deduction allowable with respect to an asset for such Fiscal Year, 
except that if the Gross Asset Value of an asset differs from its 
adjusted basis for federal income tax purposes at the beginning of such 
Fiscal Year, Depreciation shall be determined in the manner that is 
described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3) or 
Treasury Regulations Section 1.704-3(d)(2), as applicable.
    1.1.15 Fair Market Value of the Partnership: has the meaning given 
such term in Section 5.2.3(b).
    1.1.16 Fiscal Year: the calendar year or, in the case of the first 
and the last fiscal years, the fraction thereof commencing on the date 
on which the Partnership is formed under the Act or ending on the date 
on which the winding up of the Partnership is completed, as the case 
may be.
    1.1.17 General Partner: DGHC and any successor General Partner.
    1.1.18 General Partner Unit: any Partnership Unit having the rights 
and obligations specified in this Agreement with respect to a General 
Partner Unit.
    1.1.19 GP Board: has the meaning given such term in Section 4.5.2.
    1.1.20 Gross Asset Value: with respect to any asset, the asset's 
adjusted basis for Federal income tax purposes, except as follows:
    (i) The initial Gross Asset Value of any asset contributed by a 
Partner to the Partnership after the date hereof shall be the gross 
fair market value of such asset as determined by the contributing 
Partner and the General Partner;
    (ii) The Gross Asset Value of each Partnership asset shall be 
adjusted to equal its gross fair market value, as determined by the 
General Partner, as of the following times: (a) The acquisition of an 
additional interest in the Partnership by any new or existing Partner 
in exchange for more than a de minimis Capital Contribution; (b) the 
distribution by the Partnership to a Partner of more than a de minimis 
amount of Partnership property as consideration for an interest in the 
Partnership; and (c) the liquidation of the Partnership within the 
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g). However, 
the adjustments which are described in clauses (a) and (b) above shall 
be made only if the General Partner reasonably determines that such 
adjustments are necessary or appropriate to reflect the relative 
economic interests of the Partners in the Partnership;
    (iii) The Gross Asset Value of any Partnership asset distributed to 
any Partner shall be adjusted to equal the gross fair market value of 
such asset on the date of distribution, as determined by the 
distributee Partner and the General Partner; and
    (iv) The Gross Asset Value of each Partnership asset shall be 
increased (or decreased) to reflect any adjustments to the adjusted 
basis of such asset pursuant to Code Section 734(b) or Code Section 
743(b), but only to the extent that such adjustments are taken into 
account in determining Capital Accounts pursuant to Treasury 
Regulations Section 1.704-1(b)(2)(iv)(m) and Section 5.3.8. However, 
Gross Asset Value shall not be adjusted pursuant to this clause (iv) to 
the extent that an adjustment pursuant to clause (ii) is necessary or 
appropriate in connection with a transaction that would otherwise 
result in an adjustment pursuant to this clause (iv).
    If the Gross Asset Value of an asset has been determined or 
adjusted pursuant to clauses (i), (ii) or (iv) of this definition, such 
Gross Asset Value shall thereafter be adjusted by the Depreciation 
taken into account with respect to such asset for purposes of computing 
Net Profit and Net Loss.
    1.1.21 Indemnified Person: has the meaning given such term in 
Section 4.7.
    1.1.22 JOA: has the meaning given such term in the Recitals to this 
Agreement, as such agreement may be amended from time to time.
    1.1.23 Joint Venture: Charleston Newspapers, an unincorporated West 
Virginia joint venture.
    1.1.24 Limited Partner: any Class A Limited Partner or Class B 
Limited Partner.
    1.1.25 Limited Partner Unit: any Class A Limited Partner Unit or 
Class B Limited Partner Unit.
    1.1.26 Mail: The Charleston Daily Mail.
    1.1.27 MNG: has the meaning given such term in the Recitals to this 
Agreement, and includes any successor or assign.
    1.1.28 Net Cumulative Profit: with respect to a Partner, an amount 
equal to the excess, if any, of (i) the aggregate Net Profits and items 
of income and gain allocated to such Partner pursuant to Article V for 
all Fiscal Years (or other periods) after the date hereof, over (ii) 
the aggregate Net Loss and items of loss and deduction allocated to 
such Partner pursuant to Article V for all Fiscal Years (or other 
periods) after the date hereof.
    1.1.29 Net Profit and Net Loss: with respect to each Fiscal Year or 
other period, an amount which is equal to the Partnership's taxable 
income or loss for such year or period, as determined in

[[Page 11691]]

accordance with Code Section 703(a) (for this purpose, all items of 
income, gain, loss or deduction that are required to be stated 
separately pursuant to Code Section 703(a)(1) shall be included in 
taxable income or loss), with the following adjustments:
    (i) Any income of the Partnership that is exempt from Federal 
income tax and not otherwise taken into account in computing Net Profit 
or Net Loss shall be added to such taxable income or loss;
    (ii) Any expenditures of the Partnership described in Code Section 
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures 
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and 
which are not otherwise taken into account in computing Net Profit or 
Net Loss, shall be subtracted from such taxable income or loss;
    (iii) In the event the Gross Asset Value of any Partnership asset 
is adjusted pursuant to clause (ii) or (iii) of the definition of Gross 
Asset Value, the amount of such adjustment shall be taken into account 
as gain or loss from the disposition of such asset for purposes of 
computing Net Profit or Net Loss;
    (iv) Gain or loss resulting from any disposition of Partnership 
property with respect to which gain or loss is recognized for Federal 
income tax purposes shall be computed by reference to the Gross Asset 
Value of the property disposed of, notwithstanding that the adjusted 
tax basis of such property differs from its Gross Asset Value;
    (v) In lieu of the depreciation, amortization and other cost 
recovery deductions that are taken into account in computing such 
taxable income or loss, there shall be taken into account Depreciation 
for such Fiscal Year or other period;
    (vi) Notwithstanding anything to the contrary that may be contained 
in the definition of the terms ``Net Profit'' and ``Net Loss,'' any 
items that are specially allocated pursuant to Section 5.3 or 5.4 
hereof shall be excluded in computing Net Profit or Net Loss; and
    (vii) For purposes of this Agreement, any deduction for a loss on a 
sale or exchange of Partnership property which is disallowed to the 
Partnership under Code Section 267(a)(1) or 707(b) shall be treated as 
a Code Section 705(a)(2)(B) expenditure.
    The amounts of the items of Partnership income, gain, loss, or 
deduction available to be specially allocated pursuant to Section 5.3 
or 5.4 shall be determined by applying rules analogous to those set 
forth in this definition of Net Profit and Net Loss.
    1.1.30 Newspapers: The Charleston Gazette, The Saturday Gazette-
Mail, The Sunday Gazette-Mail and the Mail collectively, and a 
``Newspaper'' means any one of the Newspapers.
    1.1.31 Nonrecourse Deductions: losses, deductions or Code Section 
705(a)(2)(B) expenditures that are attributable to Nonrecourse 
Liabilities of the Partnership. The amount of Nonrecourse Deductions 
for a Fiscal Year shall be determined in accordance with Treasury 
Regulations Section 1.704-2(c).
    1.1.32 Nonrecourse Liability: has the meaning set forth in Treasury 
Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).
    1.1.33 Partner: any of the General Partner and the Limited Partners 
individually, and ``Partners'' means each of the General Partner and 
the Limited Partners collectively.
    1.1.34 Partner Nonrecourse Debt: has the meaning set forth in 
Treasury Regulations Section 1.704-2(b)(4).
    1.1.35 Partner Nonrecourse Debt Minimum Gain: has the meaning set 
forth in Treasury Regulations Section 1.704-2(i)(2). The amount of 
Partner Nonrecourse Debt Minimum Gain shall be determined in accordance 
with Treasury Regulations Section 1.704-2(i)(3).
    1.1.36 Partner Nonrecourse Deductions: losses, deductions or Code 
Section 705(a)(2)(B) expenditures that are attributable to Partner 
Nonrecourse Debt. The amount of Partner Nonrecourse Deductions for a 
Fiscal Year shall be determined in accordance with Treasury Regulations 
Section 1.704-2(i)(2).
    1.1.37 Partner Ratio Percentage: with respect to any Class B 
Limited Partner, the percentage obtained by dividing the Percentage 
Interest of such Class B Limited Partner by the General Partner's 
Percentage Interest.
    1.1.38 Partnership: Charleston Newspapers Holdings, L.P., a 
Delaware limited partnership.
    1.1.39 Partnership Interest: means the entire ownership interest of 
a Partner in the Partnership at any particular time, including all of 
its rights and obligations hereunder and under the Act.
    1.1.40 Partnership Minimum Gain: has the meaning set forth in 
Treasury Regulations Section 1.704-2(b)(2). The amount of Partnership 
Minimum Gain for a Fiscal Year shall be determined in accordance with 
Treasury Regulations Section 1.704-2(d).
    1.1.41 Percentage Interest: with respect to any Class B Limited 
Partner and the General Partner, means the ratio of the number of Units 
held by such Partner divided by the total number of Class B Limited 
Partner Units and General Partner Units outstanding.
    1.1.42 Person: means any individual, partnership, joint venture, 
association, corporation, trust, estate, limited liability company, 
limited liability partnership or any other legal entity.
    1.1.43 Put/Call Agreement: a put/call agreement entered into by a 
Class B Limited Partner, DGHC and the Partnership in connection with 
the exercise by the Warrant Holder of its right to purchase Class B 
Limited Partner Units pursuant to the terms of the Warrant, in 
substantially the form attached to the Warrant as Exhibit B thereto.
    1.1.44 Regulatory Allocations: has the meaning given such term in 
Section 5.4.
    1.1.45 Subsidiary: means any Person (including the Joint Venture) 
that is controlled by the Partnership.
    1.1.46 Tax-Adjusted Percentage Interests: with respect to any Class 
B Limited Partner, the percentage determined by dividing (i) such Class 
B Limited Partner's Percentage Interest by (ii) one (1) minus the Tax 
Rate; and with respect to the General Partner, the percentage 
determined as one (1) minus the Tax-Adjusted Percentage Interest of 
such Class B Limited Partner. By way of illustration, if such Class B 
Limited Partner's Percentage Interest is 6.42% and the Tax Rate is 40%, 
such Class B Limited Partner's Tax Adjusted Percentage Interest shall 
be 10.70% and the General Partner's Tax-Adjusted Percentage Interest 
shall be 89.30%.
    1.1.47 Tax Distributions: distributions made pursuant to Section 
5.1.2.
    1.1.48 Tax Gross-Up Amount: has the meaning given such term in 
Section 5.2.3(a)(ii)(4).
    1.1.49 Tax Rate: the highest effective combined rate of federal, 
state and local income and franchise tax applicable to corporations 
doing business in Charleston, West Virginia.
    1.1.50 Tax Shortfall: has the meaning given such term in Section 
5.1.2(b).
    1.1.51 Transfer: has the meaning given to such term in Section 
6.1.1.
    1.1.52 Transferee: any Person that acquires a Partnership Interest 
from a Partner in accordance with the provisions of this Agreement.
    1.1.53 Treasury Regulations: the Income Tax Regulations that have 
been promulgated under the Code, as such regulations may be amended 
from time to time.
    1.1.54 Unit: an undivided share of the interests in the Partnership 
of all the

[[Page 11692]]

Partners, which include General Partner Units, Class A Limited Partner 
Units, and Class B Limited Partner Units, as set forth on Exhibit A 
attached hereto, as amended from time to time.
    1.1.55 Value of the Partnership's Business: has the meaning given 
such term in Section 5.2.3.
    1.1.56 Warrant: that certain warrant, dated as of even date 
herewith, granted to the Warrant Holder by the Partnership to purchase 
Class B Limited Partner Units.
    1.1.57 Warrant Holder: CPC or any permitted transferee of the 
Warrant.

Article II

Formation of the Partnership

    2.1 Formation. The Partnership was formed as a Delaware limited 
partnership pursuant to the terms of the Act and the Prior Partnership 
Agreement. The rights and liabilities of the Partners shall be 
determined pursuant to the Act and this Agreement. To the extent the 
rights or obligations of any Partner are different by reason of any 
provision of this Agreement than they would be in the absence of such 
provision, this Agreement shall, to the extent permitted by the Act, 
control.
    2.2 Partners. As of the date hereof, DGHC is the sole General 
Partner of the Partnership, CPC is the sole Class A Limited Partner of 
the Partnership and there is no Class B Limited Partner.
    2.3 Name. The name of the Partnership is ``Charleston Newspapers 
Holdings, L.P.'' The business of the Partnership may be conducted under 
that name or, upon compliance with applicable laws, any other name that 
the General Partner deems appropriate or advisable.
    2.4 Purpose. The purposes of the Partnership shall be (i) to own, 
directly and indirectly, all the interests in the Joint Venture, (ii) 
to engage in the business, directly and indirectly, of owning, 
operating and managing newspaper properties, including managing the 
business and affairs of the Joint Venture in accordance with the JOA, 
(iii) to borrow or raise money, to guarantee the obligations of others, 
and to secure the payment thereof by mortgage upon or pledge of the 
whole or any part of the property of the Partnership, (iv) to exercise 
all rights, powers, privileges and other incidents of ownership or 
possession with respect to securities or other assets held or owned by 
the Partnership, and (v) to do any act and thing and to enter into any 
contract incidental to, or necessary, proper or advisable for, the 
accomplishment of such purposes as determined by the General Partner in 
its sole discretion, including without limitation, entering into the 
JOA, the Warrant and a Put/Call Agreement and performing thereunder.
    2.5 Place of Business. The principal place of business of the 
Partnership is c/o Daily Gazette Company, 1001 Virginia Street, East, 
Charleston, West Virginia 25301, subject to change by the General 
Partner upon notice to all Partners.
    2.6 Agent for Service of Process. The agent of the Partnership for 
service of process in Delaware is the Corporation Service Company, 2711 
Centerville Road, Suite 400, Wilmington, Delaware 19808, subject to 
replacement from time to time by direction of the General Partner.
    2.7 Term. The term of the Partnership commenced on the date the 
Certificate of Limited Partnership was filed with the Secretary of 
State of the State of Delaware, and shall continue until June 30, 2024, 
unless sooner terminated as provided in this Agreement.
    2.8 Tax Matters. The parties acknowledge that for income tax 
purposes, the Partnership shall be treated as the continuation of the 
Joint Venture following the deemed merger of the Joint Venture and the 
Partnership.

Article III

Capital of the Partnership

    3.1 Transfers to Partnership. DGHC and CPC each made the transfers 
to the Partnership specified on Exhibit A and received the Units 
specified in Exhibit A.
    3.2 Future Capital Contributions; Capital Assets.
    3.2.1 The Limited Partners shall have no obligation to make any 
further contributions to the capital of the Partnership, subject to 
CPC's obligation to reimburse the Joint Venture for any expenses paid 
by the Joint Venture on behalf of CPC in accordance with the provisions 
of the JOA.
    3.2.2 DGHC shall in the future make such additional contributions 
to the capital of the Partnership as shall be necessary in its 
reasonable judgment to (1) fund acquisitions of capital assets 
necessary for the business and operations of the Partnership and/or the 
Joint Venture; (2) fund acquisitions of capital assets necessary for 
the business and operations of the editorial departments of each of the 
Newspapers to the extent such editorial departments' tangible capital 
assets on the date hereof require supplementation or replacement, (3) 
provide the Partnership and the Joint Venture with adequate working 
capital, and (4) ensure that the Partnership has adequate funds to make 
on a timely basis the cash distributions to CPC contemplated by Section 
V J (1) through (3) of the JOA, provided this is not intended to impose 
any greater obligation on the General Partner than is imposed on 
general partners generally under applicable law. The General Partner 
shall not have any personal liability for the repayment of the Capital 
Contributions of any other Partner; provided that the General Partner 
shall promptly return to the Partnership or to the Partner or Partners 
entitled thereto any distributions received by the General Partner in 
excess of those to which the General Partner is entitled under this 
Agreement.
    3.3 Interest on Capital Contributions. No interest shall be paid by 
the Partnership on Capital Contributions.
    3.4 Liability Limited to Capital. Except as otherwise provided 
under applicable law, the liability of a Limited Partner shall be 
limited to the total amount of Capital Contributions which such Limited 
Partner has made or is required to make pursuant to Section 3.1 hereof, 
and the Limited Partners shall have no further personal liability to 
contribute money to or in respect of the liabilities or obligations of 
the Partnership, nor shall the Limited Partners, as such, be personally 
liable for any obligation of the Partnership. A Limited Partner may, 
under certain circumstances, be required by law to return to the 
Partnership, for the benefit of the Partnership's creditors, amounts 
previously distributed. No Limited Partner shall be obligated by this 
Agreement to pay those distributions to or for the account of the 
Partnership or any creditor of the Partnership. However, if any court 
of competent jurisdiction holds that, notwithstanding the provisions of 
this Agreement, a Limited Partner must return or pay over any part of 
those distributions, the obligation shall be that of such Limited 
Partner alone and not of any other Partner. Any payment returned to the 
Partnership by a Partner or made directly by a Partner to a creditor of 
the Partnership shall be deemed a Capital Contribution by such Partner.
    3.5 Withdrawal of Capital. A Partner shall not be entitled to 
withdraw any part of its Capital Contribution or to receive any 
distribution from the Partnership, except as provided in this Agreement 
or the JOA.

[[Page 11693]]

Article IV

Management of the Partnership

    4.1 General Partner. DGHC shall serve as the General Partner of the 
Partnership.
    4.2 Partnership Powers. In furtherance of its purposes, the 
Partnership is hereby authorized to enter into any kind of lawful 
activity and to enter into, perform and carry out contracts of any kind 
in connection with the purposes of the Partnership.
    4.3 Authority, Responsibilities and Powers of General Partner. 
Subject to Section 4.5.2 hereof, the General Partner shall have 
complete authority over and exclusive control and management of the 
business and affairs of the Partnership and all of the rights, powers 
and privileges of partners of a general partnership and of general 
partners of a limited partnership under the laws of the State of 
Delaware. The General Partner shall devote such time to the Partnership 
as it may reasonably deem to be required for the achievement of its 
purposes. In connection with such management, the General Partner (i) 
may delegate such general or specific authority to the officers and 
employees of the Partnership and its Affiliates with respect to the 
business and day-to-day operations of the Partnership and its 
Affiliates as it may from time to time consider desirable, and the 
officers and employees of the Partnership may exercise the authority 
granted to them, and (ii) may employ on behalf of the Partnership any 
other Persons to perform services for the Partnership, including 
Affiliates of any Partner.
    4.4 No Management Participation by any Limited Partner. Subject to 
Section 4.5.2, no Limited Partner shall take part in, or at any time 
interfere in any manner with, the management, conduct or control of the 
business and operations of the Partnership, nor have any right or 
authority as such to act for or bind the Partnership in any manner 
whatsoever. No Partner shall have the power, right or authority to 
remove DGHC as the General Partner.
    4.5 Scope of Authority of the General Partner.
    4.5.1 Subject to Section 4.5.2 and 4.5.3 hereof, all decisions to 
be made on behalf of the Partnership shall be made by the General 
Partner and all actions to be taken or documents to be executed on 
behalf of the Partnership shall be taken and executed by the General 
Partner.
    4.5.2 While the general authority to manage the day-to-day business 
and affairs of the General Partner shall be vested in its members, the 
management of the General Partner shall be delegated to a board of 
managers of the General Partner (the ``GP Board'') consisting of up to 
five individual managers appointed by Daily Gazette Company and in no 
event may the GP Board consist of more than five managers without the 
consent of the managers appointed pursuant to Section 5(b) of the 
Operating Agreement of DGHC by the Warrant Holder or the Class B 
Limited Partner(s), as applicable; provided, however, that in no event 
may the GP Board consist of more than five managers unless not fewer 
than forty percent (40%) are appointed by the Warrant Holder or the 
Class B Limited Partner(s), as applicable. Unless and until the Warrant 
Holder exercises its rights under the Warrant to purchase any Class B 
Limited Partner Units, Daily Gazette Company shall delegate its right 
to appoint two (2) of the members of the GP Board (or such greater 
number as required by Section 5(b)(ii) of the Operating Agreement of 
DGHC) to the Warrant Holder, and upon the purchase by the Warrant 
Holder of any Class B Limited Partner Units pursuant to the Warrant, 
Daily Gazette Company shall delegate its right to appoint two (2) of 
the members of the GP Board (or such greater number as required by 
Section 5(b)(ii) of the Operating Agreement of DGHC) to the Class B 
Limited Partner(s). If there is more than one Class B Limited Partner, 
then the right to appoint two (2) of the members of the GP Board (or 
such greater number as required by Section 5(b)(ii) of the Operating 
Agreement of DGHC) will be vested solely in the Class B Limited Partner 
that supervises editorial and reportorial functions of the Mail 
pursuant to Section 9.1 hereof. Neither the Warrant Holder nor the 
Class B Limited Partner(s) may appoint current employees of the Joint 
Venture, Daily Gazette Company, DGHC, the Partnership or Daily Gazette 
Publishing Company, LLC to represent it on the GP Board. The GP Board 
shall only have the power and authority to act by the vote of the 
constituent managers and no individual manager, in the capacity of 
manager, shall have the power or authority to bind the General Partner. 
Voting by the managers shall be on a per capita basis. Actions may be 
taken by the GP Board by, but only by, a majority vote of the managers; 
provided, however, that actions by the GP Board concerning (x) the 
budgeted Editorial Expenses (as that term is defined in the JOA) for 
The Charleston Gazette and the Mail or (y) ``news hole'' and color 
usage allocations for The Charleston Gazette and the Mail shall require 
the prior approval of at least 75% of the managers of the GP Board 
(i.e., if the GP Board consists of four managers, not fewer than three 
managers must vote in favor of the particular action, and if the GP 
Board consists of five managers, not fewer than four managers must vote 
in favor of the particular action). Either Daily Gazette Company or, as 
applicable, the Warrant Holder or the Class B Limited Partner(s) may at 
any time, by written notice to the other, remove its managers, with or 
without cause, and substitute managers to serve in their stead. No 
manager shall be removed from office, with or without cause, without 
the consent of the Person that designated him. Each member of the GP 
Board appointed by the Warrant Holder or the Class B Limited Partner(s) 
may act (or refrain from acting), and the Warrant Holder or the Class B 
Limited Partner(s) may instruct such members of the GP Board, in their 
capacity as such, to act (or refrain from acting) solely according to 
the interests (or the perceived interests) of the Warrant Holder or the 
Class B Limited Partner(s) and none of the foregoing shall be deemed to 
breach any fiduciary duty that, pursuant to this Agreement or at law or 
in equity, the Warrant Holder or the Class B Limited Partner(s) 
otherwise would be deemed to have to the Partnership, the General 
Partner or Daily Gazette Company. The GP Board shall hold such meetings 
no less frequently than once per calendar quarter and at such times and 
places as shall be determined by the members of the GP Board. Special 
meetings of the GP Board may be called at any time by agreement of the 
members of the GP Board. The GP Board may establish such procedures for 
the conduct of meetings as may be agreed by the members of the GP 
Board.
    4.5.3 Without the written consent of the Limited Partners, or 
except as specifically authorized in this Agreement, the General 
Partner may not:
    (a) Do any act in contravention of this Agreement, the JOA or the 
Certificate of Limited Partnership.
    (b) Do any act that would make it impossible to carry on the 
ordinary business of the Partnership.
    (c) Change the purposes of the Partnership as set forth in Section 
2.4 hereof.
    (d) Dissolve the Partnership.
    (e) Make any disposition of assets contributed by CPC to the 
Partnership on the date of the Prior Partnership Agreement that would 
impair the ability of the Partnership to make the terminating 
distributions to CPC that are contemplated by Section 7.3 hereof 
(provided no consent of the Limited

[[Page 11694]]

Partners will be required for any disposition of such assets pursuant 
to any foreclosure action of the Joint Venture's lenders).
    4.6 Liability. If any provision herein shall, under applicable law, 
subject any Limited Partner to liability as a general partner of the 
Partnership, such provision shall be deemed suspended and of no force 
and effect until such time as the effectiveness of such provision does 
not subject such Limited Partner to such liability.
    4.7 Indemnification. The Partnership shall indemnify the General 
Partner and its Affiliates and the employees, officers, directors, each 
member of the GP Board, shareholders, partners, members and agents of 
such Persons (each an ``Indemnified Person'') and shall defend and hold 
the Indemnified Persons harmless from any claim, demand, judgment, cost 
or expense (including attorneys' fees, which shall be paid as incurred) 
arising out of or related to any act or omission by such Indemnified 
Persons on behalf of the Partnership, except for any act or omission 
which is finally adjudicated to have constituted willful misconduct on 
the part of such Indemnified Person. In no event shall any Indemnified 
Person be liable to the Partnership or to any other Partner, except for 
conduct which is finally adjudicated to have constituted willful 
misconduct on the part of such Indemnified Person. Any Person who is 
within the definition of ``Indemnified Person'' at the time of any act 
or omission shall be entitled to the benefits of this Section 4.7 as an 
``Indemnified Person'' regardless of whether such Person continues to 
be within the definition of ``Indemnified Person'' at the time of his 
or its claim for indemnification or exculpation hereunder.
    4.8 Partnership Expenses. The Partnership shall pay for all 
necessary and reasonable direct expenses of the Partnership.
    4.9 Other Ventures. Subject to the terms of the JOA, neither Daily 
Gazette Company, nor any Partner, may engage in other ventures in the 
Charleston, West Virginia market that are competitive with that of the 
Partnership or any of its Subsidiaries. For purposes of this Section 
4.9, any competitive venture undertaken by an Affiliate of a Partner in 
the Charleston, West Virginia market will be deemed to be a competitive 
venture undertaken by such Partner and a breach of this Agreement by 
such Partner.

Article V

Distributions and Allocations

    5.1 Distributions.
    5.1.1 Distributions to Class A Limited Partner. With respect to 
each Fiscal Year that the Class A Limited Partner produces editorial 
and news copy for the Mail, the General Partner shall cause the 
Partnership to distribute cash to the Class A Limited Partner in an 
amount equal to the cash received by the Partnership with respect to 
its interest in the Joint Venture, pursuant to and subject to the terms 
of paragraphs (1), (2) and (3) of Section V J of the JOA. Such cash 
shall be distributed by the Partnership to the Class A Limited Partner 
as soon as reasonably practicable following its receipt by the 
Partnership.
    5.1.2 Tax Distributions.
    (a) During each Fiscal Year, the General Partner shall cause the 
Partnership to distribute cash to the Class B Limited Partner(s) and to 
the General Partner in an amount equal to the excess, if any, of (i) 
the product of (1) the Net Cumulative Profit allocated to such Partner 
and (2) the Tax Rate with respect to such Fiscal Year, over (ii) the 
aggregate distributions to such Partner after the date hereof pursuant 
to Section 5.1.4 and this Section 5.1.2 (such excess being such 
Partner's ``Tax Shortfall''). For purposes of this Section 5.1.2(a), 
distributions made within 120 days of the end of any Fiscal Year may be 
designated by the General Partner as Tax Distributions with respect to 
such Fiscal Year and shall be treated for purposes of this Section 
5.1.2(a) as having been made during such Fiscal Year.
    (b) If the aggregate amount to be distributed by the Partnership 
pursuant to Section 5.1.2(a) is less than the aggregate amount of the 
Tax Shortfall for all Partners, then the amount to be distributed will 
be distributed among the Partners pro rata in accordance with the 
amounts of their respective Tax Shortfalls.
    5.1.3 Distributions to General Partner. With respect to a Fiscal 
Year, after the distributions required by Sections 5.1.1 and 5.1.2, the 
General Partner shall cause the Partnership to distribute cash in an 
amount not to exceed $650,000 to the General Partner. The distributions 
provided in this Section 5.1.3 shall be made only to the extent such 
distributions are not prohibited by the Partnership's credit agreements 
or other agreements to which the Partnership is a party.
    5.1.4 Other Cash Distributions. During a Fiscal Year, after the 
distributions required by Sections 5.1.1, 5.1.2 and 5.1.3, the General 
Partner may cause the Partnership to distribute additional cash at such 
times and in such amounts as the General Partner may determine to be 
appropriate in its sole discretion, in the following order and 
priority:
    (a) If the product of the Partner Ratio Percentage of any Class B 
Limited Partner and the sum of all distributions to the General Partner 
pursuant to Section 5.1.2 is greater than the sum of all distributions 
to such Class B Limited Partner pursuant to Section 5.1.2, cash shall 
be distributed to such Class B Limited Partner in the amount of such 
excess;
    (b) If the sum of all distributions to any Class B Limited Partner 
pursuant to Section 5.1.2 is greater than the product of Partner Ratio 
Percentage of such Class B Limited Partner and the sum of all 
distributions to the General Partner pursuant to Section 5.1.2, cash 
shall be distributed to the General Partner in the amount of such 
excess;
    (c) Thereafter, cash shall be distributed to the Class B Limited 
Partner(s) and the General Partner pro rata in accordance with their 
Capital Account balances until such Capital Account balances are zero; 
and
    (d) Any additional cash shall be distributed to the Class B Limited 
Partner(s) and the General Partner in accordance with their Percentage 
Interests.
    5.1.5 Withholding. Any amount that has been withheld pursuant to 
the Code or any provision of any state or local tax law with respect to 
any payment or distribution to the Partnership or the Partners shall be 
treated as an amount which was distributed to a Partner pursuant to 
Section 5.1 hereof for all purposes of this Agreement.
    5.2 Allocations of Net Profit and Net Loss.
    5.2.1 Net Profit. Except as otherwise provided in this Agreement, 
Net Profit of the Partnership for each Fiscal Year shall be allocated 
as follows:
    (a) first, Net Profit shall be allocated so as to offset any Net 
Loss allocated to the General Partner pursuant to Section 5.2.2(c);
    (b) second, Net Profit shall be allocated to the Class B Limited 
Partner(s) and to the General Partner so as to offset any Net Loss 
allocated to them pursuant to Section 5.2.2(b), pro rata in proportion 
to the amount of Net Loss to be offset; and
    (c) thereafter, Net Profit shall be allocated to the Class B 
Limited Partner(s) and the General Partner in accordance with their 
Tax-Adjusted Percentage Interests.

[[Page 11695]]

    5.2.2 Net Loss. Except as otherwise provided in this Agreement, Net 
Loss of the Partnership for each Fiscal Year shall be allocated as 
follows:
    (a) first, Net Loss shall be allocated to the Class B Limited 
Partner(s) and to the General Partner so as to offset any Net Profit 
allocated to them pursuant to Section 5.2.1(c) (to the extent not 
distributed pursuant to Section 5.1), pro rata in proportion to the 
amount of Net Profit to be offset.
    (b) second, Net Loss shall be allocated to the Class B Limited 
Partner(s) and the General Partner in accordance with their Percentage 
Interests until the Class B Limited Partner's or Partners' Adjusted 
Capital Account balance is zero; and
    (c) thereafter, all remaining Net Loss shall be allocated to the 
General Partner.
    5.2.3 Allocations of Net Profit and Net Loss Following Dissolution.
    (a) Notwithstanding Sections 5.2.1 and 5.2.2, following the 
dissolution of the Partnership pursuant to Article VII, beginning in 
the Fiscal Year in which such dissolution occurs or beginning in any 
Fiscal Year prior to the Fiscal Year in which such dissolution occurs 
if the Partnership's Federal income tax return for such prior Fiscal 
Year has not yet been required to be filed (not including extensions), 
items of income, gain, loss and deduction described in clause (iii) of 
Section 1.1.29 that are attributable to the adjustment to the Gross 
Asset Value of assets distributed in kind to the Class A Limited 
Partner pursuant to Section 7.3.2 (if any) shall be allocated to the 
Class A Limited Partner, and thereafter, all remaining items of income, 
gain, loss and deduction shall be allocated among the Partners so as to 
cause the credit balance in each Partner's Capital Account to equal the 
amount of distributions such Partner would be entitled to receive if 
the Partnership were to distribute an amount equal to the aggregate 
credit balances in all Partners' Capital Accounts (after such 
allocations of income and gain, loss and deduction) in accordance with 
the following:
    (i) First, the Partnership would distribute to the Class A Limited 
Partner cash in an amount equal to the aggregate cash distributed to 
the Partnership pursuant to clause (2)(a) of Section VI B of the JOA;
    (ii) Second, the Partnership would distribute to each Class B 
Limited Partner cash in an amount equal to the following:
    (1) the product of such Class B Limited Partner's Percentage 
Interest and the Fair Market Value of the Partnership; plus
    (2) the excess (only if such amount is greater than zero) of (A) 
the product of such Class B Limited Partner's Partner Ratio Percentage 
and the sum of all distributions to the General Partner pursuant to 
Section 5.1.2 over (B) the sum of all distributions to such Class B 
Limited Partner pursuant to Section 5.1.2; less
    (3) the excess (only if such amount is greater than zero) of (A) 
the sum of all distributions to such Class B Limited Partner pursuant 
to Section 5.1.2 over (B) the product of such Class B Limited Partner's 
Partner Ratio Percentage and the sum of all distributions to the 
General Partner pursuant to Section 5.1.2; plus
    (4) an amount equal to the excess, if any, of (A) the quotient 
obtained by dividing Net Cumulative Profits allocated to such Class B 
Limited Partner by one (1) minus the Tax Rate then in effect, over (B) 
Net Cumulative Profits allocated to such Class B Limited Partner (such 
amount being the ``Tax Gross-Up Amount'').
    (iii) Thereafter, the Partnership would distribute all remaining 
cash and other assets of the Partnership to the General Partner.
    (b) For purposes of this Section 5.2.3, the ``Fair Market Value of 
the Partnership'' shall equal:
    (i) the Value of the Partnership's Business, plus
    (ii) any current assets of the Partnership, calculated as of the 
date of dissolution, as defined and determined in accordance with 
generally accepted accounting principles, less
    (iii) the sum of $2,448,300 (which the parties agree shall 
represent the amount of the unfunded accrued benefit obligation for the 
Charleston Newspapers Retirement Benefit Plan as of the date of 
dissolution), and $506,731 (which the parties agree shall represent the 
amount of the unfunded accrued benefit obligation for the Charleston 
Newspapers Post Retirement Medical Benefit Program as of the date of 
dissolution), less
    (iv) any debts and liabilities of the Partnership and reserves for 
unmatured, contingent or unforeseen liabilities of the Partnership 
(other than unfunded obligations under the Charleston Newspapers 
Retirement Benefit Plan and Post-Retirement Medical Benefit Program), 
calculated as of the date of dissolution, as defined and determined in 
accordance with Section 7.3 and generally accepted accounting 
principles, less
    (v) the costs of an investment banking firm or appraisal firm or 
firms selected to determined the Fair Market Value of the Partnership, 
less
    (vi) the amount determined in Sections 5.2.3(a)(ii)(2) and 
5.2.3(a)(ii)(3), if any. The ``Value of the Partnership's Business'' 
shall be the going concern value of the Partnership as of the date of 
dissolution as determined by mutual agreement of the General Partner 
and the Class B Limited Partner(s) or by appraisals in accordance with 
this Section 5.2.3. In determining the Value of the Partnership's 
Business, the General Partner and the Class B Limited Partner(s), or 
the appraisers selected to determine the Fair Market Value of the 
Partnership, as the case may be, (1) shall assume that the value of any 
business is the cash price at which the assets of such business as a 
going concern would change hands between a willing buyer and a willing 
seller (neither acting under compulsion) in an arms-length transaction, 
on terms and subject to conditions and costs applicable in the 
newspaper publishing industry, (2) shall assume that all assets used in 
the operation of the business of the Partnership and its Subsidiaries, 
whether owned by or licensed to the Partnership or any of its 
Subsidiaries (and all other assets of any Affiliate of the Partnership 
that are used by the Partnership or any of its Subsidiaries), were 
entirely owned directly by the Partnership, (3) shall not take into 
account expenditures in respect of any management agreements entered 
into by the Joint Venture. In the event the General Partner and the 
Class B Limited Partner(s) do not agree on the Fair Market Value of the 
Partnership within twenty days, then within fifteen days of the 
expiration of such twenty day period (or such longer period as the 
General Partner and the Class B Limited Partner(s) mutually agree), 
each of the General Partner and the Class B Limited Partner(s) shall 
select a nationally recognized appraiser with experience in the 
newspaper industry to prepare, using the methodology described in this 
paragraph, a written appraisal setting forth such appraiser's 
determination of the Fair Market Value of the Partnership. If either 
the General Partner and the Class B Limited Partner(s) fail to so 
appoint an appraiser within such fifteen day period, then its right to 
do so shall lapse and the appraisal made by the one appraiser who is 
timely appointed shall be the Fair Market Value of the Partnership. If 
two appraisals are made, unless the higher of the two appraisals is 
more than 110% more than the lower appraisal, the Fair Market Value of 
the Partnership will be the average of the two appraisals, and if the 
higher of the two appraisals is more than 110% more than the lower of 
the appraisals, the General Partner and the Class B Limited Partner(s) 
shall jointly

[[Page 11696]]

select a third appraiser, and the Fair Market Value will be the average 
of the two of the three appraisals that are closest together in amount. 
All appraisals will be made within twenty days of appointment of such 
appraiser and must separately identify the amount of each of the items 
described in clauses (i) through (vi) of Section 5.2.3(b). A written 
notice of the results of each such appraisal shall be given to the 
General Partner and the Class B Limited Partner(s). The General Partner 
and the Class B Limited Partner(s) will each pay the fees of the 
appraiser selected by it, and the General Partner and the Class B 
Limited Partner(s) will share equally the fees of the third appraiser, 
if any. The General Partner and each Member will cooperate fully with 
each appraiser's attempt to determine the Fair Market Value of the 
Partnership.
    5.3 Special Allocations.
    5.3.1 Limited Partners.
    (a) The Partnership shall specially allocate to the Class A Limited 
Partner (in its capacity as such) items of Partnership income for each 
Fiscal Year in an amount equal to the cash distributed to the Class A 
Limited Partner (in its capacity as such) pursuant to Section 5.1.1. 
Notwithstanding any other provisions of this Agreement, except Section 
5.2.3 and this Section 5.3.1, no other items of income, gain, loss or 
deduction shall be allocated to the Class A Limited Partner (in its 
capacity as such).
    (b) The Partnership shall specially allocate to the General Partner 
items of Partnership income and gain in the amount of $650,000 for each 
Fiscal Year.
    5.3.2 Minimum Gain Chargeback. Notwithstanding any other provision 
of this Article V to the contrary, if there is a net decrease in 
Partnership Minimum Gain for any Fiscal Year, each of the General 
Partner and each Class B Limited Partner shall be specially allocated 
items of Partnership income and gain for such Fiscal Year (and if 
necessary, for succeeding Fiscal Years) in an amount equal to such 
Partner's share of the net decrease in Partnership Minimum Gain as 
determined in accordance with Treasury Regulations Section 1.704-2(g). 
Allocations pursuant to the previous sentence shall be made in 
proportion to the respective amounts required to be allocated to each 
Partner pursuant thereto. However, this Section 5.3.2 shall not apply 
to the extent that the circumstances which are described in Treasury 
Regulations Sections 1.704-2(f)(2), 1.704-2(f)(3), 1.704-2(f)(4) or 
1.704-2(0(5) exist. The items of Partnership income and gain that are 
to be allocated pursuant to this Section 5.3.2 shall be determined in 
accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-
2(j)(2). This Section 5.3.2 is intended to comply with the minimum gain 
chargeback requirement of Treasury Regulations Section 1.704-2(f) and 
shall be interpreted consistently therewith.
    5.3.3 Partner Minimum Gain Chargeback. Notwithstanding any other 
provision of this Article V, except Section 5.3.2, to the contrary, if, 
during any Fiscal Year, there is a net decrease in Partner Nonrecourse 
Debt Minimum Gain attributable to a Partner Nonrecourse Debt, each of 
the General Partner and each Class B Limited Partner with a share of 
that Partner Nonrecourse Debt Minimum Gain attributable to such Partner 
Nonrecourse Debt (as determined in accordance with Treasury Regulations 
Section 1.704-2(i)(5)) as of the beginning of such Fiscal Year shall be 
specially allocated items of Partnership income and gain for the Fiscal 
Year (and, if necessary, for succeeding Fiscal Years) in an amount 
equal to such Partner's share of the net decrease in the Partner 
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse 
Debt in accordance with Treasury Regulations Section 1.704-2(i)(4). 
Allocations pursuant to the previous sentence shall be made in 
proportion to the respective amounts required to be allocated to each 
Partner pursuant thereto. The items of Company income and gain to be 
allocated pursuant to this Section 5.3.3 shall be determined in 
accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-
2(j)(2). This Section 5.3.3 is intended to comply with the minimum gain 
chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) 
and shall be interpreted consistently therewith.
    5.3.4 Qualified Income Offset. In the event that any Partner 
unexpectedly receives any of the adjustments, allocations or 
distributions described in Treasury Regulations Section 1.704-
1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b) (2)(ii)(d)(6), 
items of Partnership income and gain shall be specially allocated to 
such Partner in an amount and manner sufficient to eliminate, to the 
extent required by the Treasury Regulations, any deficit balance of 
such Partner's Adjusted Capital Account as quickly as possible. 
However, an allocation shall be made pursuant to this Section 5.3.4 if, 
and only to the extent that, such Partner would have a deficit balance 
in its Adjusted Capital Account after all of the other allocations that 
are provided for in this Article V have been tentatively made as if 
this Section 5.3.4 were not a part of this Agreement.
    5.3.5 Gross Income Allocation. In the event that any Partner has a 
deficit Capital Account at the end of any Fiscal Year that is in excess 
of the sum of (i) the amount such Partner is obligated to restore to 
the Partnership pursuant to this Agreement or as otherwise described in 
Treasury Regulations Section 1.704-1(b)(2)(ii)(c), (ii) the amount such 
Partner is deemed to be obligated to restore pursuant to the 
penultimate sentence of Treasury Regulations Section 1.704-2(g)(1) and 
(iii) the amount such Partner is deemed to be obligated to restore 
pursuant to the penultimate sentence of Treasury Regulations Section 
1.704-2(i)(5), such Partner shall be specially allocated items of 
Partnership income and gain in the amount of such excess as quickly as 
possible. However, an allocation shall be made pursuant to this Section 
5.3.5 if, and only to the extent that such Partner would have a deficit 
Capital Account in excess of such sum after all of the other 
allocations that are provided for in this Article V have been 
tentatively made as if Section 5.3.4 and this Section 5.3.5 were not a 
part of this Agreement.
    5.3.6 Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal 
Year or other period shall be specially allocated to the General 
Partner.
    5.3.7 Partner Nonrecourse Deductions. Any Partner Nonrecourse 
Deductions for any Fiscal Year or other period shall be specially 
allocated to the Partner who bears the economic risk of loss with 
respect to the Partner Nonrecourse Debt to which such Partner 
Nonrecourse Deductions are attributable in accordance with Treasury 
Regulation Section 1.704-2(i).
    5.3.8 Section 754 Adjustment.
    (a) To the extent an adjustment to the adjusted tax basis of any 
Partnership asset pursuant to Code Section 734(b) or 743(b) is required 
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be 
taken into account in determining Capital Accounts as a result of a 
distribution other than in liquidation of a Partner's Partnership 
Interest, the amount of such adjustment shall be treated as an item of 
gain (if the adjustment increases the basis of such asset) or loss (if 
the adjustment decreases the basis of the asset) from the disposition 
of the asset and shall be taken into account for purposes of computing 
Net Profit and Net Loss.
    (b) To the extent an adjustment to the adjusted tax basis of any 
Partnership asset pursuant to Code Section 734(b) or Code Section 
743(b) is required, pursuant to Treasury Regulations

[[Page 11697]]

Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken 
into account in determining Capital Accounts as the result of a 
distribution to a Partner in complete liquidation of its interest, the 
amount of such adjustment to Capital Accounts shall be treated as an 
item of gain (if the adjustment increases the basis of the asset) or 
loss (if the adjustment decreases such basis) from the disposition of 
the asset and shall be specially allocated to the Partners as Net 
Profit or Net Loss in the event Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such distribution 
is made in the event Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
    5.4 Curative Allocations. The allocations set forth in Sections 
5.3.2, 5.3.3, 5.3.4, 5.3.5, 5.3.6, 5.3.7 and 5.3.8 hereof (the 
``Regulatory Allocations'') are intended to comply with certain 
requirements of the Treasury Regulations. It is the intent of the 
Partners that, to the extent possible, all Regulatory Allocations shall 
be offset either with other Regulatory Allocations or with special 
allocations of other items of income, gain, loss, or deduction pursuant 
to this Section 5.4. Therefore, notwithstanding any other provision of 
this Article V (other than the Regulatory Allocations), the General 
Partner shall make such offsetting special allocations of income, gain, 
loss, or deduction in whatever manner it determines appropriate so 
that, after such offsetting allocations are made, each Partner's 
Capital Account balance is, to the extent possible, equal to the 
Capital Account balance such Partner would have had if the Regulatory 
Allocations were not in this Agreement. In exercising its discretion 
under this Section 5.4, the General Partner shall take into account 
future Regulatory Allocations under Sections 5.3.2 and 5.3.3 that, 
although not yet made, are likely to offset other Regulatory 
Allocations previously made under Sections 5.3.6 and 5.3.7.
    5.5 Tax Allocations; Code Section 704(c).
    5.5.1 Except as otherwise provided in this Section 5.5, each item 
of income, gain, loss and deduction of the Partnership recognized for 
income tax purposes shall be allocated to the Partners in accordance 
with the allocation of the corresponding ``book'' items pursuant to 
Sections 5.2, 5.3 and 5.4.
    5.5.2 In accordance with Code Section 704(c) and the Treasury 
Regulations thereunder, income, gain, loss and deduction with respect 
to any property contributed to the capital of the Partnership shall, 
solely for tax purposes, be allocated among the Partners so as to take 
account of any variation between the adjusted basis of such property to 
the Partnership for Federal income tax purposes and its initial Gross 
Asset Value in accordance with Code Section 704(c) and the Treasury 
Regulations thereunder, provided, however, that no such Section 704(c) 
allocations shall be made to the Class A Limited Partner (in its 
capacity as such).
    5.5.3 In the event that the Gross Asset Value of any Partnership 
asset is adjusted pursuant to clause (ii) of the definition of Gross 
Asset Value, subsequent allocations of income, gain, loss and deduction 
with respect to such asset shall take account of any variation between 
the adjusted basis of such asset for Federal income tax purposes and 
its Gross Asset Value in accordance with Code Section 704(c) and the 
Treasury Regulations thereunder, provided, however, that no such 
Section 704(c) allocations shall be made to the Class A Limited Partner 
(in its capacity as such).
    5.5.4 Any elections or other decisions relating to such allocations 
shall be made by the Tax Matters Partner in any manner that reasonably 
reflects the purpose and intention of this Agreement. Allocations that 
are made pursuant to this Section 5.5 are made solely for purposes of 
Federal, state and local taxes and shall not affect, or in any way be 
taken into account in computing, any Partner's Capital Account or share 
of Net Profit, Net Loss or other items or distributions pursuant to any 
provision of this Agreement.
    5.6 Allocation in Event of Transfer. If a Partnership Interest is 
Transferred in accordance with Article VI of this Agreement, the Net 
Profit and Net Loss of the Partnership shall be calculated as of the 
end of the month immediately prior to the month in which the transfer 
is effective. The transferor Partner shall be allocated an amount which 
is equal to the Net Profit and Net Loss of the Partnership that is 
allocable to the period ending on the last day of the month immediately 
prior to the Transfer. The Transferee shall be allocated an amount 
which is equal to the Net Profit and Net Loss of the Partnership that 
is allocable to the remainder of the calendar year. As of the effective 
date of such Transfer, the Transferee shall succeed to the Capital 
Account of the transferor Partner with respect to the Transferred 
Partnership Interest. This Section 5.6 shall apply for purposes of 
computing a Partner's Capital Account and for Federal income tax 
purposes.

Article VI

Transfer of Partnership Interests

    6.1 Limitations on Transfers.
    6.1.1 Except as provided in Section 6.1.2, no sale, assignment, 
transfer, pledge, hypothecation or other disposition (any or all of the 
foregoing, a ``Transfer'') of a Partnership Interest will be effective 
nor will any purported Transferee become a Partner or otherwise be 
entitled to any of the attributes of ownership of the Partnership 
purportedly Transferred.
    6.1.2 The restrictions of Section 6.1.1 shall not apply to:
    (a) a Transfer pursuant to Article VII;
    (b) in the case of the Class A Limited Partner, a Transfer of its 
entire Class A Limited Partnership Interest approved by the General 
Partner, which approval shall not be unreasonably withheld (the Class A 
Limited Partner acknowledges and agrees that the General Partner's 
ability to grant consent to a Transfer is circumscribed by certain 
contractual restrictions under the Joint Venture's financing 
arrangements and the withholding of consent by the General Partner in 
order to comply with these contractual restrictions will not be 
considered unreasonable);
    (c) in the case of a Class B Limited Partner, a Transfer permitted 
by and made in accordance with the provisions of the Put/Call Agreement 
to which such Class B Limited Partner is a party;
    (d) in the case of the General Partner or any permitted Transferee 
of the General Partner, any Transfer to an Affiliate of the General 
Partner and any other Transfer so long as at the time of such Transfer 
the Joint Venture is current in the distributions and payments required 
to be made to the Class A Limited Partner pursuant to Section V J(l) 
through (4) of the JOA, and provided that if the Joint Venture is not 
so current, the General Partner shall obtain the consent of the Class A 
Limited Partner prior to any Transfer pursuant to this Section 
6.1.2(d);
    (e) a Transfer pursuant to a foreclosure action by the Joint 
Venture's lenders; or
    (f) any Transfer of all or any portion of the ownership interests 
in the Class A Limited Partnership Interest or the Partnership Interest 
with respect to any of the Class B Limited Partner Units to MNG or an 
Affiliate of MNG so long as (1) all of the other requirements of this 
Article VI have been complied with and (2) MNG or an Affiliate of MNG 
holds and maintains, directly or indirectly, voting control of such 
Transferee following such Transfer.
    6.2 Transferees.

[[Page 11698]]

    6.2.1 Notwithstanding any provision to the contrary contained 
herein, no Partnership Interest may be transferred unless such Transfer 
is made in accordance with the provisions of this Article VI and the 
transferor and the Transferee have complied with the following 
conditions:
    (a) the transferor has executed and delivered to the General 
Partner a copy of the assignment of the Partnership Interest to 
Transferee in form and substance reasonably satisfactory to the General 
Partner; and
    (b) the Transferee, if not already a party to this Agreement, 
becomes a party to this Agreement, assumes all of the obligations 
hereunder of its transferor in respect of such Partnership Interest and 
agrees to be bound by the terms and conditions hereof in the same 
manner as the transferor.
    6.2.2 Upon compliance with Section 6.1 and 6.2.1, any Transferee 
shall be substituted as a Partner for, and shall enjoy the same rights 
and be subject to the same obligations as, its predecessor as a Partner 
hereunder, and the General Partner shall prepare and file as soon as 
practicable, if required by law, an amendment to the Certificate of 
Limited Partnership and any other qualification documents. Exhibit A 
hereto shall also be amended to reflect such Transfer.
    6.2.3 If there is a permitted Transfer of a Partnership Interest 
under this Agreement:
    (a) In the case of a Transfer by any Partner, such Partner shall, 
upon the effectiveness of such Transfer, be released and discharged 
from any further liability under this Agreement in respect of such 
Partnership Interest, provided, however, that such transferring Partner 
shall remain liable to the Partnership for any Partnership 
distributions wrongfully paid to or received by such transferring 
Partner or that are required by law to be returned to the Partnership; 
and
    (b) If requested to do so by any transferring Partner or by the 
Transferee by notice given to the Partners, the Partnership shall make 
an election under Section 754 of the Code (and a corresponding election 
under applicable state and local law). Upon the request of any Partner, 
the Partnership shall also make a timely election under Section 754 of 
the Code upon a distribution of property or money to a Partner.
    6.3 Transfers of Interests in Partners.
    6.3.1 The transfer of a majority of the issued and outstanding 
capital stock (or equivalent interest) of a Partner or a controlling 
interest of a Partner, however accomplished, whether in a single 
transaction or in a series of related or unrelated transactions, and 
whether directly or by transfer of stock (or equivalent interest) of a 
direct or indirect parent corporation or other entity or otherwise, 
shall be deemed to be a purported Transfer of an interest in the 
Partnership for purposes of this Agreement.
    6.3.2 Except as provided in Section 6.3.3, MNG agrees that it will 
not Transfer (whether voluntarily, involuntarily or by operation of 
law) all or any part of its ownership interest in the Class A Limited 
Partner, without the consent of the General Partner, which consent 
shall not be unreasonably withheld (MNG acknowledges and agrees that 
the General Partner's ability to grant consent to a Transfer is 
circumscribed by certain contractual restrictions under the Joint 
Venture's financing arrangements, and the withholding of consent by the 
General Partner in order to comply with these contractual restrictions 
will not be considered unreasonable).
    6.3.3 The restriction of Section 6.3.1 shall not apply and no 
consent of the General Partner shall be required for (x) a Transfer 
directly or indirectly by MNG or CPC of its ownership interests in the 
Class A Limited Partner or any Class B Limited Partner to an Affiliate 
of MNG so long as (1) all of the other requirements of this Article VI 
have been complied with and (2) MNG or a MNG Affiliate holds and 
maintains, directly or indirectly, voting control of such Transferee 
following such Transfer, and (y) the grant of a security interest in 
the ownership interests in the Class A Limited Partner or any Class B 
Limited Partner.
    6.4 Other Consents and Requirements. Any Transfer must be in 
compliance with all requirements imposed by any state securities 
administrator having jurisdiction over the Transfer and the United 
States Securities and Exchange Commission.
    6.5 Assignment Not in Compliance. Any Transfer in contravention of 
any of the provisions of this Article VI (whether voluntarily, 
involuntarily or by operation of law) shall be void and of no effect, 
and shall neither bind nor be recognized by the Partnership.
    6.6 Pledge. Each Partner and any permitted Transferee of each 
Partner may collaterally assign its Partnership Interest and its 
attendant rights under this Agreement to the Joint Venture's lenders 
for security purposes. Each Limited Partner may at any time assign its 
Partnership Interest and its rights under this Agreement as collateral 
security to Persons extending financing to such Limited Partner or any 
of its Affiliates (and such Persons may at any time foreclose on such 
security interest).
    6.7 Division of Partnership Interests. The several rights and 
obligations inherent in the Capital Account and Partnership Interest 
are indivisible except in equal proportions, such that the assignment 
of a specified percentage of a Partner's Partnership Interest may only 
represent an equal percentage of the total Capital Account that was 
attributable to such Partner's Partnership Interest prior to the 
assignment.
    6.8 Withdrawal of Partners. No Partner may withdraw from the 
Partnership except upon the transfer of its Partnership Interest 
permitted under the provisions of this Agreement or upon the 
dissolution and winding up of the Partnership in accordance with the 
provisions of Article VII. For purposes of this Agreement, the term 
``withdrawal'' does not include the happening of any event described in 
Section 17-402(a)(4) or (5) of the Act, and no Partner shall cease to 
be a Partner solely upon the happening of such event(s). The withdrawal 
of a Partner shall not alter the allocations and distributions to be 
made to the Partners pursuant to this Agreement.
    6.9 Issuance of Partnership Interests. Subject to the provisions of 
any Put/Call Agreement, the General Partner may cause the Partnership 
to issue additional Partnership Interests to any Person and may admit 
to the Partnership as additional Partners the Person acquiring such 
Partnership Interests, if such Persons were not previously admitted as 
Partners. The Persons acquiring such Partnership Interests shall have 
the rights and be subject to the obligations set forth in this 
Agreement as it may be amended in accordance with Section 9.8 in 
connection therewith. A Person admitted as a new Partner shall only be 
entitled to distributions and allocations of Net Profit and Net Loss 
attributable to the period beginning on the effective date of its 
admission to the Partnership, and the Partnership shall attribute Net 
Profit and Net Loss to the period before the effective date of the 
admission of a new Partner and to the period beginning on the effective 
date of the admission of a new Partner by the closing of the books 
method. The Partnership will not issue any additional Class A Limited 
Partner Units to any other Person without the consent of the Class A 
Limited Partner and will not issue Class B Limited Partner Units to any 
other Person without the consent of the holders of the majority of the 
Class B Limited Partner Units.

[[Page 11699]]

Article VII

Dissolution and Liquidation

    7.1 Events of Dissolution. The Partnership shall be dissolved, 
terminated and liquidated upon the happening of any of the following 
events:
    (a) the expiration of the term of the Partnership as set forth in 
Section 2.7;
    (b) at such time as the JOA shall expire or otherwise terminate;
    (c) upon mutual agreement of the Partners; or subject to any 
provision of this Agreement that limits or prevents dissolution, the 
happening of any event that, under applicable law, causes the 
dissolution of a limited partnership.
    7.2 Liquidation. Upon dissolution of the Partnership for any 
reason, the Partnership shall immediately commence to wind up its 
affairs in accordance with this Article VII. A reasonable period of 
time shall be allowed for the orderly termination of the Partnership's 
business, discharge of its liabilities, and distribution or liquidation 
of the remaining assets so as to enable the Partnership to minimize the 
normal losses attendant to the liquidation process. The dissolution and 
liquidation of the Partnership shall be conducted and supervised by the 
General Partner, who is hereby authorized and empowered to execute on 
behalf of the Partnership any and all documents necessary or desirable 
to effectuate the dissolution and liquidation of the Partnership and 
the transfer of any property of the Partnership.
    7.3 Priority on Liquidation. The General Partner shall, to the 
extent feasible, liquidate and/or distribute the assets of the 
Partnership as promptly as shall be practicable consistent with the 
other provisions hereof. Such assets, or the proceeds of such 
liquidation, shall be applied as follows:
    7.3.1 first, to the payment of the debts and liabilities of the 
Partnership, in the order of priority provided by law (excluding any 
loans by any Partner to the Partnership);
    7.3.2 second, the Partnership shall distribute to the Class A 
Limited Partner the Mail masthead, all trademarks, copyrights, trade 
names, service names and service marks of the Mail, subscriber and 
advertiser lists, print and electronic archives of the Mail, associated 
Websites and URLs (including ``dailymail.com'') and all legal rights 
associated with these assets, subject to such dispositions, additions 
or substitutions relating thereto which may have occurred in the 
ordinary course of the operations of the Partnership or the Joint 
Venture subsequent to the date hereof, including in particular, any and 
all lists of advertisers and subscribers to Mail, together with copies 
of any contracts with such subscribers relating to Mail and any 
executory contracts for the purchase of advertising in Mail, free and 
clear of any lien, encumbrance, right or interest (including any option 
or any license or other right of use) of or in favor of a third party, 
transfer restriction (including any right of first offer or refusal or 
similar provision) or any other similar right or interest whatsoever;
    7.3.3 third, to the payment of loans by any Partner to the 
Partnership and the payment of the expenses of liquidation;
    7.3.4 fourth, to the setting up of any reserve which the General 
Partner may deem reasonably necessary for contingent or unforeseen 
liabilities or obligations of the Partnership or any liability or 
obligation not then due and payable; provided, however, that any such 
reserve shall be paid over by the General Partner into a Partnership 
account established for such purpose, to be held in such account for 
the purpose of disbursing such reserves in payment of such liabilities, 
and, at the expiration of such holdback period as the General Partner 
shall deem advisable, to distribute the balance thereafter remaining in 
the manner herein provided; and
    7.3.5 fifth, to payment to the Partners, in accordance with the 
following order of priority:
    (a) First, the Partnership shall distribute to the Class A Limited 
Partner, subject to the prior satisfaction of the claims of all 
creditors, cash in an amount equal to the aggregate cash distributed to 
the Partnership from the Joint Venture pursuant to clause (2)(a) of 
Section VI B of the JOA.
    (b) Thereafter, the Partnership shall distribute all remaining 
assets to the Class B Limited Partner(s) and the General Partner in 
accordance with their respective Capital Account balances.
    7.4 Statements on Liquidation. Each of the Partners shall be 
furnished with a statement which shall set forth the assets and 
liabilities of the Partnership as at the date of dissolution and as at 
the date of complete liquidation, the share of each Partner thereof, 
and a reasonably detailed report of the manner of disposition of the 
assets of the Partnership. Upon compliance with the foregoing 
distribution plan and completion of the winding up process, the 
Partnership shall be terminated and the General Partner shall cause the 
cancellation of the Certificate of Limited Partnership and all 
qualifications of the Partnership as a foreign limited partnership in 
jurisdictions other than the State of Delaware and shall take such 
other action as may be necessary to terminate the Partnership.
    7.5 Return of Capital or Partition. No Partner shall have any right 
to receive its Capital Contribution or any profit of the Partnership or 
to obtain a partition of assets of the Partnership or to cause the 
dissolution of the Partnership other than as provided in this 
Agreement. The General Partner shall not be personally liable for the 
return of the Capital Contributions of the Limited Partners, or of any 
portion thereof, it being expressly understood that any such return 
shall be made solely from Partnership assets.

Article VIII

Records and Accounting

    8.1 Books and Records. At all times during the continuance of the 
Partnership, the General Partner shall keep or cause to be kept books 
of account of the transactions of the Partnership consistent with the 
provisions of the JOA. The books of account, records and all documents 
and other writings of the Partnership shall be kept and maintained at 
the principal office of the Partnership or of the General Partner. Each 
Partner and its representatives shall, upon reasonable notice to the 
General Partner, have access to such books, records and documents 
during reasonable business hours and may inspect and make copies of any 
of them at its own expense.
    8.2 Bank Accounts. The General Partner may from time to time open 
and maintain on behalf of the Partnership a bank account or accounts 
with such depositaries as the General Partner shall determine, in which 
monies received by or on behalf of the Partnership shall be deposited. 
All withdrawals from such accounts shall be made upon the signature of 
such Person or Persons as the General Partner may from time to time 
designate.
    8.3 Required Filings. The General Partner shall cause the 
Partnership to file, on or before the dates the same may be due, giving 
effect to extensions obtained, all reports, returns and applications 
which may be required by any taxing authority or other governmental 
body having jurisdiction. The General Partner shall timely deliver to 
each of the Partners such information, including Schedules K-1, as may 
be necessary for the preparation by such Partner of its Federal, state 
or other tax returns.

[[Page 11700]]

Article IX

Miscellaneous

    9.1 Supervision of Editorial Staff. In order to fulfill its 
obligations under the JOA, CPC shall exercise exclusive supervision 
over all editorial and reportorial functions of the Mail. CPC shall 
select the staff, designate all editors and newsroom managers, make all 
newsroom assignments, and set all editorial policies for the Mail. 
DGHC, as General Partner of the Partnership, shall cause the Joint 
Venture to employ the employees selected by CPC and to assign those 
employees to work exclusively as the staff of the Mail. CPC shall have 
complete control and authority over the editors and other staff of the 
editorial department of the Mail (including the exclusive authority to 
determine the number, identity and salaries of the editorial department 
of the Mail and to make hiring and firing decisions, so long as the 
Editorial Expense for the Mail does not exceed the approved budgeted 
amount for the Mail). The term ``editorial department'' as used herein 
shall include the news, editorial, editorial promotion and photographic 
functions of the Mail.
    9.2 Notices. All notices, demands and other communications which 
may or are to be given hereunder or with respect hereto shall be in 
writing, shall be given either by personal delivery, facsimile or by 
certified or special express mail or recognized overnight delivery 
service, first class postage prepaid, or when delivered to such 
delivery service, charges prepaid, return receipt requested, and shall 
be deemed to have been given or made when personally received by the 
addressee, addressed as follows:
    (1) If to the Class A Limited Partner, to:

MediaNews Group, Inc., 101 W. Colfax Ave., Suite 1100, Denver, CO 
80202, Attn: Joseph J. Lodovic, IV President, Facsimile: (303) 954-
6320.

    With a copy to:

Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 
10004-1482, Attn: James Modlin, Facsimile: (212) 422-4726.

or such other addresses as the Class A Limited Partner may from time to 
time designate.
    (2) If to the General Partner or the Partnership, to:
Daily Gazette Company, 1001 Virginia Street, East Charleston, WV 25301, 
Attn: Ms. Elizabeth E. Chilton, President, Facsimile: (304) 348-5180.

And

Attn. Mr. Norman Watts Shumate III, Facsimile: (304) 348-1795.

    With a copy to:

Edmondson + Blumenthal PLLC, 12 Cadillac Drive, Suite 210, Brentwood, 
TN 37027, Attn: Steven E. Blumenthal, Facsimile: (615) 296-4600.

or such other addresses as the General Partner or the Partnership may 
from time to time designate.
    9.3 Further Assurances. The Partners will execute and deliver such 
further instruments and do such further acts and things as may be 
required to carry out the intent and purposes of this Agreement.
    9.4 Agreement in Counterparts. This Agreement may be executed in 
counterparts and all counterparts so executed shall constitute one 
agreement binding on all the parties hereto notwithstanding that all 
the parties hereto are not signatories to the original or to the same 
counterpart.
    9.5 Captions. Captions contained in this Agreement are inserted as 
a matter of convenience and in no way define the scope of this 
Agreement or the intent of any provision hereof.
    9.6 Construction. None of the provisions of this Agreement shall be 
for the benefit of or be enforceable by any creditor of the Partnership 
or of any Partner (subject to the security interest and other rights in 
favor of the Joint Venture's lenders).
    9.7 Successors. Except as otherwise expressly provided in this 
Agreement, all provisions of this Agreement shall be binding upon, 
inure to the benefit of, and be enforceable by or against the 
successors and permitted assigns of the parties hereto.
    9.8 Amendments.
    9.8.1 This Agreement may be modified or amended only upon the 
written agreement of each of the Partners (and subject to any 
applicable contractual restrictions under the Joint Venture's financing 
arrangements), except that this Agreement may be amended from time to 
time by the General Partner without the consent of the Limited 
Partners:
    (a) to reflect the rights and obligations of a Person admitted as a 
Partner upon the issuance of Partnership Interests pursuant to Section 
6.9 and any change in the rights and obligations of any existing 
Partner upon the issuance to any Person of partnership interests 
pursuant to Section 6.9, provided that the consent of an affected 
Limited Partner and/or the Warrant Holder shall be required to the 
extent such amendment adversely affects the interests of such Limited 
Partner and/or the Warrant Holder, as the case may be;
    (b) to change the Partnership's principal office or other place of 
business;
    (c) to change the Partnership's method of allocating income and 
loss for tax purposes to the extent required by new or changes to 
Treasury Regulations, Internal Revenue Service announcements or 
rulings, or final courts decisions, provided that the consent of an 
affected Limited Partner and/or the Warrant Holder shall be required to 
the extent such amendment adversely affects the interests of such 
Limited Partner and/or the Warrant Holder, as the case may be;
    (d) to add to the representations, duties or obligations of the 
General Partner (other than duties or obligations relating to the 
editorial and reportorial functions of the Mail); and
    (e) to cause to be deleted from this Agreement any provision or 
part of any provision that is found by a court of competent 
jurisdiction to be invalid or unenforceable in any respect, which 
provision may be deleted from this Agreement by the General Partner to 
the extent of such invalidity or unenforceability without in any way 
affecting the remaining parts of such provision or the remaining 
provisions of this Agreement.
    No change in the number of General Partner Units or Class B Limited 
Partner Units (whether by an amendment or otherwise) will be effective 
unless it has been executed or approved in writing by the holders of a 
majority of the Class B Limited Partner Units (or, prior to the 
exercise in full of the Warrant (or the termination of the Warrant), 
the Warrant Holder).
    9.8.2 The General Partner will give notice to the Limited Partners 
(and, prior to the exercise in full (or termination) of the Warrant, 
the Warrant Holder) ten days prior to any modification or amendment to 
this Agreement pursuant to this Section 9.8.
    9.8.3 The General Partner will cause the Partnership to prepare and 
file any amendment to the Certificate of Limited Partnership that may 
be required to be filed under the Act as a consequence of any amendment 
to this Agreement.
    9.9 Governing Law. This Agreement and the rights and obligations of 
the Partners shall be governed by and construed in accordance with the 
laws of the State of Delaware, without regard to its conflicts of laws 
principles.
    9.10 Integration. This Agreement amends and restates the Prior 
Partnership Agreement in its entirety. This Agreement, together with 
the JOA and the Warrant, constitutes the entire agreement among the 
parties hereto pertaining to the subject matter hereof

[[Page 11701]]

and supersedes all prior agreements (oral or written) and 
understandings pertaining thereto. In the event of any conflict between 
this Agreement and the JOA, this Agreement shall control.
    9.11 Severability. The invalidity of any article, section, 
subsection, clause or provision of this Agreement shall not affect the 
validity of the remaining articles, sections, subsections, clauses or 
provisions hereof.
    9.12 Representations by Partners. Each Partner represents and 
warrants to the other Partners and the Partnership that this Agreement 
is and will remain its valid and binding agreement, enforceable in 
accordance with its terms. Each Partner represents and warrants to the 
Partnership and the other Partners that: (i) it is fully aware that its 
Partnership Interest is not being registered under the Securities Act 
of 1933, as amended, and has been issued and sold in reliance upon 
federal and state exemptions for transactions not involving a public 
offering, that its Partnership Interest cannot and will not be sold or 
transferred except in a transaction that is exempt from registration 
under federal and state securities laws, and that such Partner is an 
``accredited investor'' within the meaning of Regulation D under the 
Securities Act of 1933, as amended.
    9.13 Non-Disclosure. Each Partner agrees that, except as otherwise 
consented to by the General Partner, all non-public information 
furnished to it or to which it has access pursuant to this Agreement 
will be kept confidential and will not be disclosed by such Partner or 
by any of its agents, representatives or employees, in any manner 
whatsoever, in whole or in part, except that:
    (a) each Partner shall be permitted to disclose such information to 
those of its (and its Affiliates') Affiliates, agents, representatives 
and employees who need to be familiar with such information in 
connection with such Partner's investment in the Partnership and who 
agree to maintain the confidentiality thereof in accordance with the 
provisions of this Section 9.13;
    (b) each Partner shall be permitted to disclose such information to 
its Affiliates;
    (c) each Partner shall be permitted to disclose information to the 
extent required by law, including federal or state securities laws or 
regulations, by the rules and regulations of any stock exchange or 
association on which securities of such Partner or any of its 
Affiliates are traded or by subpoena or other legal process so long as 
such Partner shall have first given the Partnership notice in advance 
of such disclosure (so that the Partnership may attempt to contest the 
necessity of disclosing such information) to the extent practicable 
under the circumstances;
    (d) each Partner shall be permitted to disclose information to the 
extent necessary for the enforcement of any right of such Partner 
arising under this Agreement;
    (e) each Partner shall be permitted to disclose information to a 
permitted Transferee or a prospective Permitted Transferee, so long as 
such Person agrees (in a writing which provides the Partnership with an 
independent right of enforcement) to be bound by the provisions of this 
Section;
    (f) each Partner shall be permitted to disclose information that is 
or becomes generally available to the public other than as a result of 
a disclosure by such Partner, its agents, representatives, or 
employees; and
    (g) each Partner shall be permitted to disclose information that 
becomes available to such Partner on a nonconfidential basis from a 
source (other than the Partnership, any other Partner, or their 
respective agents, representatives, and employees) that, to the best of 
such Partner's knowledge, is not prohibited from disclosing such 
information to such Partner by a legal, contractual, or fiduciary 
obligation to the Partnership or any other Partner or hat is derived by 
such Partner or its agents without reliance on information the 
disclosure of which is prohibited by this Section 9.13.
    9.14 Execution of Papers. The Partners agree that they will not 
unreasonably refuse to execute such instruments, documents and papers 
as the General Partner deems necessary or appropriate to carry out the 
intent of this Agreement.
    IN WITNESS WHEREOF, the parties hereto have each caused this 
Agreement to be duly executed by their respective officers duly 
authorized.

DAILY GAZETTE HOLDING COMPANY, LLC

By: Daily Gazette Company, Sole Member

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

CHARLESTON PUBLISHING COMPANY

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

MEDIANEWS GROUP, INC. now known as AFFILIATED MEDIA, INC. (for purposes 
of Section 6.3)

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

DAILY GAZETTE COMPANY (for purposes of Section 4.9)

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------


             Exhibit A--Transfers to Partnership by Partners
------------------------------------------------------------------------
           Partner                Contribution         Units received
------------------------------------------------------------------------
Daily Gazette Holding         (i) 100% of the       9,358 General
 Company, LLC.                 ownership interests   Partner Units.
                               in Daily Gazette
                               Publishing Company,
                               LLC.
                              (ii) cash and other
                               assets provided in
                               Master
                               Restructuring
                               Agreement.
Charleston Publishing         Intangible and other  1 Class A Limited
 Company.                      assets more fully     Partnership Unit.
                               described in Master
                               Restructuring
                               Agreement.
------------------------------------------------------------------------


          Exhibit B--Capital Account Balances as of Date Hereof
------------------------------------------------------------------------
                          Partner                               Value
------------------------------------------------------------------------
Daily Gazette Holding Company, LLC........................   $63,750,000
Charleston Publishing Company.............................            $1
------------------------------------------------------------------------

AMENDED AND RESTATED OPERATING AGREEMENT

OF

DAILY GAZETTE HOLDING COMPANY, LLC

    THIS AMENDED AND RESTATED OPERATING AGREEMENT OF DAILY GAZETTE 
HOLDING COMPANY, LLC, is entered into effective as of ------------, 
2009, by and between Daily Gazette Holding Company, LLC, a limited 
liability company organized pursuant to the Delaware Limited Liability 
Company Act (the ``Company''), and Daily Gazette Company, a West 
Virginia corporation, its sole member.

[[Page 11702]]

Recital

    The parties desire to amend and restate the Operating Agreement of 
the Company, dated as of May 7, 2004, as set forth herein.

Agreement

    In consideration of the mutual covenants and agreements set forth 
in this Agreement, the parties agree as follows.
    1. Definitions
    The following terms, as used in this Agreement, have the meanings 
set forth in this Section:
    ``Act'' means the Delaware Limited Liability Company Act.
    ``Affiliate'' means, with respect to any Person, any other Person 
that directly or indirectly through one or more intermediaries 
controls, is controlled by, or is under common control with such 
Person. For purposes of this definition, the term ``controls'' means 
the possession, direct or indirect, of the power to direct or cause the 
direction of the management and policies of a Person, whether through 
the ownership of voting securities, by contract, or otherwise. The 
terms ``controlled by'' and ``under common control with'' have meanings 
corresponding to the meaning of ``controls.''
    ``Agreement'' means this Amended and Restated Operating Agreement, 
as it may be amended, restated, modified, or supplemented from time to 
time in accordance with its terms.
    ``Board of Managers'' shall have the meaning set forth in Section 5 
hereof.
    ``Certificate'' is the Certificate of Formation of Daily Gazette 
Holding Company, LLC as filed with the Secretary of State of the State 
of Delaware, as the same may be amended from time to time.
    ``Class B Limited Partner'' shall have the meaning set forth in 
Section 1.1.11 of the Partnership Agreement.
    ``Class B Limited Partner Unit'' shall have the meaning set forth 
in Section 1.1.12 of the Partnership Agreement.
    ``Class B Managers'' means the Managers appointed by either the 
Warrant Holder or the Class B Limited Partner(s) pursuant to Section 
5(b)(ii) hereof.
    ``JOA'' means that certain Second Amended and Restated Joint 
Venture Agreement dated as of even date herewith, as such agreement may 
be amended from time to time.
    ``Joint Venture'' means Charleston Newspapers, an unincorporated 
West Virginia joint venture.
    ``Manager'' means a member of the Board of Managers.
    ``Member'' means Daily Gazette Company and its successors-in-
interest under this Agreement.
    ``Person'' means an individual, corporation, limited liability 
company, association, general partnership, limited partnership, limited 
liability partnership, joint venture, trust, estate, or other entity or 
organization.
    ``Partnership'' means Charleston Newspapers Holdings, L.P., a 
Delaware limited partnership.
    ``Partnership Agreement'' means that certain Amended and Restated 
Limited Partnership Agreement for Charleston Newspapers Holdings, L.P., 
dated as of even date herewith, as such agreement may be amended from 
time to time
    ``Put/Call Agreement'' means a put/call agreement entered into by a 
Class B Limited Partner, the Company and the Partnership in connection 
with the exercise by the Warrant Holder of its right to purchase Class 
B Limited Partner Units pursuant to the terms of the Warrant, in 
substantially the form attached to the Warrant as Exhibit B thereto.
    ``Warrant'' means that certain warrant, dated as of even date 
herewith, granted to the Warrant Holder by the Partnership to purchase 
Class B Limited Partner Units.
    ``Warrant Holder'' means Charleston Publishing Company or any 
permitted transferee of the Warrant.
    2. The Company and Its Business
    (a) Formation. The Company was formed on April 12, 2004, pursuant 
to the provisions of the Act. Except as provided in this Agreement, all 
rights, liabilities, and obligations among the Member, the Company, and 
other Persons, shall be as provided in the Act, and this Agreement 
shall be construed in accordance with the provisions of the Act. To the 
extent that the rights or obligations of the Member are different by 
reason of any provision of this Agreement than they would be in the 
absence of such provision, this Agreement shall, to the extent 
permitted by the Act, control.
    (b) Filing of Certificate of Limited Liability Company. The Member 
has caused the Certificate to be filed with the Secretary of State of 
Delaware and shall cause the Certificate to be filed or recorded in any 
other public office where filing or recording is required or advisable. 
The Member shall do, and continue to do, all other things that are 
required or advisable to maintain the Company as a limited liability 
company existing pursuant to the laws of the State of Delaware.
    (c) Company Name. The name of the Company shall be ``Daily Gazette 
Holding Company, LLC.'' The business of the Company may be conducted 
under that name or, upon compliance with applicable laws, any other 
name that the Member deems appropriate or advisable. The Member shall 
file any assumed name certificates and similar filings, and any 
amendments thereto, that the Member considers appropriate or advisable.
    (d) Term of the Company. The term of the Company commenced on the 
date of the filing of the Certificate with the Secretary of State of 
the State of Delaware and shall continue until the Company is dissolved 
and its affairs wound up in accordance with the Act and Article 8 of 
this Agreement.
    (e) Purpose of the Company. The purpose of the Company is to do all 
lawful acts and things necessary, appropriate, proper, advisable, 
incidental to, or convenient for the furtherance and accomplishment of 
the foregoing purpose.
    (f) Authority of the Company. The Company shall be empowered and 
authorized to do all lawful acts and things necessary, appropriate, 
proper, advisable, incidental to, or convenient for the furtherance and 
accomplishment of its purposes.
    (g) Principal Office and Other Offices; Registered Agent. The 
address of the Company's registered office which is required to be 
maintained by the Company in the State of Delaware pursuant to Section 
18-104 of the Act shall be located at Corporation Service Company, 2711 
Centerville Road, Suite 400, Wilmington, Delaware 19808, and the name 
of the Company's registered agent at such address is Corporation 
Service Company. The principal office of the Company shall be c/o 
Corporation Service Company, 2711 Centerville Road, Suite 400, 
Wilmington, Delaware 19808. The Company may maintain any other offices 
at any other places that the Board of Managers deems advisable. The 
Company may, upon compliance with the applicable provisions of the Act, 
change its principal office or registered agent from time to time at 
the discretion of the Board of Managers.
    (h) Foreign Qualification. The Company shall take all necessary 
actions to be authorized to conduct business legally in all appropriate 
jurisdictions, including registration or qualification of the Company 
as a foreign limited liability company in those jurisdictions that 
provide for registration or qualification.
    (i) Fiscal Year. The fiscal year of the Company shall be the 
calendar year. The Company shall have the same fiscal year for income 
tax purposes and for financial accounting purposes.
    3. Company Capital

[[Page 11703]]

    (a) Capital Contributions. The Member shall make such capital 
contributions to the Company as it deems appropriate.
    (b) Disbursements. Subject to Section 5 hereof, the Company shall 
pay all costs and expenses of the Company business. The Company may set 
aside funds for any items that are proper Company purposes, as 
determined by the Board of Managers.
    4. Cash Distributions; Allocations of Profits and Losses
    (a) Distributions. All cash of the Company available for 
distribution shall be distributed to the Member at such times and in 
such amounts as the Board of Managers may determine.
    (b) Allocations of Profits and Losses. All profits and losses of 
the Company shall be allocated to the Member.
    5. Rights and Powers of the Member; Board of Managers.
    (a) Management Rights Generally. The responsibility and control of 
the management and conduct of the Company's day-to-day activities and 
operations shall be vested in the Member, subject to Section 5(b) 
below.
    (b) Board of Managers.
    (i) The business and affairs of the Company shall be managed by or 
under the direction of a Board of Managers (the ``Board of Managers'') 
and all actions outside of the ordinary course of business of the 
Company, to be taken by or on behalf of the Company, shall require the 
approval of the Board of Managers. Except as otherwise provided in this 
Agreement, the Board of Managers shall have the duties, powers and 
rights of the board of directors of a corporation organized under the 
General Corporation Law of the State of Delaware (it being understood 
and agreed, nonetheless, that the individual Managers appointed by the 
Warrant Holder or the Class B Limited Partner(s) as provided below 
represent the interests of the Warrant Holder or the Class B Limited 
Partner(s)).
    (ii) The Board of Managers shall consist of up to five individual 
Managers appointed by the Member and in no event may the Board of 
Managers consist of more than five Managers without the consent of the 
Class B Managers; provided, however, that in no event may the Board of 
Managers consist of more than five Managers unless not fewer than forty 
percent (40%) of the Managers are Class B Managers. Unless and until 
the Warrant Holder exercises its rights under the Warrant to purchase 
any Class B Limited Partner Units, the Member shall delegate its right 
to appoint two (2) of the Managers (or such greater number as required 
by the first sentence of this section) to the Warrant Holder, and upon 
the purchase by the Warrant Holder of any Class B Limited Partner Units 
pursuant to the Warrant, the Member shall delegate its right to appoint 
two (2) of the Managers (or such greater number as required by the 
first sentence of this section) to the Class B Limited Partner(s). If 
there is more than one Class B Limited Partner, then the right to 
appoint two (2) of the Managers (or such greater number as required by 
the first sentence of this section) will be vested solely in the Class 
B Limited Partner that supervises editorial and reportorial functions 
of The Charleston Daily Mail pursuant to Section 9.1 of the Partnership 
Agreement. Neither the Warrant Holder nor the Class B Limited 
Partner(s) may appoint current employees of the Joint Venture, the 
Member, the Company, the Partnership or Daily Gazette Publishing 
Company, LLC to represent it on the Board of Managers.
    (iii) The Board of Managers shall only have the power and authority 
to act by the vote of the constituent Managers and no individual 
Manager, in the capacity of Manager, shall have the power or authority 
to act as the agent or representative of the Company or to otherwise 
bind the Company. Voting by the Managers shall be on a per capita 
basis. Actions may be taken by the Board of Managers by, but only by, a 
majority vote of the Managers; provided, however, that actions by the 
Board of Managers concerning (x) the budgeted Editorial Expenses (as 
that term is defined in the JOA) for The Charleston Gazette and The 
Charleston Daily Mail or (y) ``news hole'' and color usage allocations 
for The Charleston Gazette and The Charleston Daily Mail shall require 
the prior approval of at least 75% of the Managers (i.e., if the Board 
of Managers consists of four Managers, not fewer than three Managers 
must vote in favor of the particular action, and if the Board of 
Managers consists of five Managers, not fewer than four Managers must 
vote in favor of the particular action); provided further that no 
Manager appointed by the Warrant Holder or the Class B Limited 
Partner(s), as the case may be, shall participate in any decisions 
concerning the news, editorial policy or content of The Charleston 
Gazette or The Charleston Gazette-Mail or have any connection with the 
news and editorial operations of The Charleston Gazette or The 
Charleston Gazette-Mail, and all such decisions shall be made 
exclusively by the Managers appointed by the Member. Either the Member 
or, as applicable, the Warrant Holder or the Class B Limited Partner(s) 
may at any time, by written notice to the other, remove its Managers, 
with or without cause, and substitute Managers to serve in their stead. 
No Manager shall be removed from office, with or without cause, without 
the consent of the Person that designated such Manager. Each Manager 
appointed by the Warrant Holder or the Class B Limited Partner(s) may 
act (or refrain from acting), and the Warrant Holder or the Class B 
Limited Partner(s) may instruct such Managers, in their capacity as 
such, to act (or refrain from acting) solely according to the interests 
(or the perceived interests) of the Warrant Holder or the Class B 
Limited Partner(s) and none of the foregoing shall be deemed to breach 
any fiduciary duty that, pursuant to this Agreement or at law or in 
equity, the Warrant Holder or the Class B Limited Partner(s) otherwise 
would be deemed to have to the Company, the Partnership or the Member. 
The Board of Managers shall hold such meetings no less frequently than 
once per calendar quarter and at such times and places as shall be 
determined by the Managers. Special meetings of the Board of Managers 
may be called at any time by agreement of the Managers. The Board of 
Managers may establish such procedures for the conduct of meetings as 
may be agreed by the Managers.
    (c) Officers. The Board of Managers may appoint such officers, from 
time to time, as the Board of Managers deems necessary and advisable.
    (d) Authority of the Member. Subject to the management of the 
business and affairs of the Company by the Board of Managers pursuant 
to Section 5(b) hereof, the Member shall have all powers necessary to 
manage and control the day-to-day activities and operations of the 
Company.
    (e) Admission of Additional Members. The Member, in its discretion, 
may admit additional members to the Company on terms and conditions 
agreed to by the Member and the Person being admitted as an additional 
member; provided, however, that the Board of Managers shall not consist 
of more than five Managers without the consent of the Class B Managers 
and in no event may the Board of Managers consist of more than five 
Managers if fewer than forty percent (40%) of the Managers are Class B 
Managers.
    (f) Limitation of Liability of the Member and Managers. The debts, 
obligations, and liabilities of the Company, whether arising in 
contract, tort, or otherwise, shall be solely the debts, obligations, 
and liabilities of the Company; and the Member and the Managers shall 
not be obligated

[[Page 11704]]

personally for any such debt, obligation, or liability of the Company 
solely by reason of being the Member or a Manager, except and only to 
the extent as otherwise expressly required by law.
    (g) Indemnification.
    (i) In any threatened, pending, or completed claim, action, suit, 
or proceeding to which the Member or a Manager was or is a party or is 
threatened to be made a party by reason of its activities on behalf of 
the Company, the Company shall indemnify and hold harmless such Member 
and Manager against losses, damages, expenses (including attorneys' and 
accountants' fees), judgments, and amounts paid in settlement actually 
and reasonably incurred in connection with such claim, action, suit, or 
proceeding, except that the Member and the Managers shall not be 
indemnified for actions constituting the improper receipt of personal 
benefits, willful misconduct, recklessness, or gross negligence with 
respect to the business of the Company; provided, however, that to the 
extent the Member or a Manager has been successful on the merits or 
otherwise in defense of any action, suit, or proceeding to which it was 
or is a party or is threatened to be made a party by reason of the fact 
that it was or is a Member or Manager of the Company, or in defense of 
any claim, issue, or matter in connection therewith, the Company shall 
indemnify such Member and Manager and hold him harmless against the 
expenses (including attorneys' and accountants' fees) actually incurred 
by such Member and Manager in connection therewith.
    (ii) Expenses (including attorneys' and accountants' fees) incurred 
in defending a civil or criminal claim, action, suit, or proceeding 
shall be paid by the Company in advance of the final disposition of the 
matter upon receipt of an undertaking by or on behalf of the Member or 
a Manager to repay such amount if such Member or Manager is ultimately 
determined not to be entitled to indemnity.
    (iii) For purposes of this Section 5(g), the termination of any 
action, suit, or proceeding by judgment, order, settlement, or 
otherwise adverse to the Member or a Manager shall not, of itself, 
create a presumption that the conduct of such Member or Manager 
constitutes willful misconduct, recklessness, or gross negligence with 
respect to the business of the Company.
    6. Permitted Transactions
    (a) Other Businesses. The Member, the Managers and their respective 
affiliates, agents, and representatives, may engage in or possess an 
interest in other business ventures of any nature or description, 
independently or with others, whether currently existing or hereafter 
created and whether or not competitive with or advanced by the business 
of the Company. The Company shall not have any rights in or to the 
income or profits derived therefrom.
    (b) Transactions with the Company. The Company may, in the sole 
discretion of the Board of Managers, contract with any Person 
(including the Member or any Person affiliated with the Member or in 
which the Member may be interested) for the performance of any services 
which may reasonably be required to carry on the business of the 
Company, and any such Person dealing with the Company, whether as an 
independent contractor, agent, employee, or otherwise, may receive from 
others or from the Company profits, compensation, commissions, or other 
income incident to such dealings.
    7. Assignment, Transfer, or Sale of Interests in the Company
    Subject to the Put/Call Agreement, the Company may sell, assign, 
pledge, or otherwise encumber or transfer all or any part of its 
interest in the Company to any Person.
    8. Dissolution and Termination of the Company
    (a) Events of Dissolution. The Company shall dissolve upon the 
earlier to occur of:
    (i) an election to dissolve the Company made by the Board of 
Managers, subject to any restriction in any agreement to which the 
Company is a party; or
    (ii) the happening of any event that, under the Act, causes the 
dissolution of a limited liability company.
    (b) Actions on Dissolution. Upon the dissolution of the Company, 
the Board of Managers shall act as liquidator to wind up the Company. 
The proceeds of liquidation shall be applied first to the payment of 
the debts and liabilities of the Company (including any loans to the 
Company made by the Member), the expenses of liquidation, and the 
establishment of any reserves that the liquidator deems necessary for 
potential or contingent liabilities of the Company. Remaining proceeds 
shall be distributed to the Member as provided in Section 4(a). Upon 
the dissolution and winding up of the Company, the liquidator shall 
file a certificate of cancellation with the Secretary of State of 
Delaware in accordance with Section 18-203 of the Act. Upon the 
completion of the distribution of Company assets and the proceeds of 
liquidation as provided in this Section 8(b), the Company shall be 
terminated.
    9. Books, Records, and Returns
    (a) Books of Account and Records. A copy of this Agreement and any 
other records required to be maintained by the Act shall be maintained 
at the principal office of the Company at the location specified in 
Section 2(g). All such books and records shall be available for 
inspection and copying by the Member or its duly authorized 
representatives during ordinary business hours. The Company shall keep 
accurate books and records of the operation of the Company which shall 
reflect all transactions, be appropriate and adequate for the Company's 
business and for carrying out the provisions of this Agreement.
    (b) Deposit of Company Funds. All revenues, assessments, loan 
proceeds, and other receipts of the Company will be maintained on 
deposit in interest-bearing and non-interest bearing accounts and other 
investments as the Board of Managers deems appropriate.
    10. Miscellaneous
    (a) Captions. All section or paragraph captions contained in this 
Agreement are for convenience only and shall not be deemed part of this 
Agreement.
    (b) Pronouns, Singular and Plural Form. All pronouns and any 
variations thereof shall be deemed to refer to the masculine, feminine, 
and neuter as the identity of the Person or Persons referred to may 
require, and all words shall include the singular or plural as the 
context or the identity of Persons may require.
    (c) Further Action. The parties shall execute and deliver all 
documents, provide all information, and take, or forbear from, all 
actions that may be necessary or appropriate to achieve the purposes of 
this Agreement.
    (d) Entire Agreement. Except as to matters with respect to which 
additional agreements are referenced herein, this Agreement contains 
the entire understanding among the parties and supersedes any prior 
understandings and agreements between them regarding the subject matter 
of this Agreement.
    (e) Agreement Binding. This Agreement shall be binding upon the 
successors and assigns of the parties.
    (f) Severability. If any provision or part of any provision of this 
Agreement shall be invalid or unenforceable in any respect, such 
provision or part of any provision shall be ineffective to the extent 
of such invalidity or unenforceability only, without in any way 
affecting the remaining parts of such provision or the remaining 
provision of this Agreement.
    (g) Counterparts. This Agreement may be signed in counterparts with 
the same effect as if the signature on each counterpart were upon the 
same instrument.

[[Page 11705]]

    (h) Governing Law. This Agreement shall be governed, construed, and 
enforced in accordance with the laws of the State of Delaware (without 
regard to the choice of law provisions thereof).
    (i) Amendment. This Agreement shall not be amended without the 
prior written consent of the Warrant Holder or, if applicable, the 
Class B Limited Partner(s).
    (j) No Third-Party Beneficiaries. With the exception of the Warrant 
Holder, the Class B Limited Partner(s) and the Class B Managers, this 
Agreement is not intended to, and shall not be construed to, create any 
right enforceable by any Person not a party hereto, including any 
creditor of the Company or of the Member.
    IN WITNESS WHEREOF, the undersigned have executed this Agreement to 
be effective as of the date first above written.
DAILY GAZETTE COMPANY
By:--------------------------------------------------------------------
Elizabeth B. Chilton
President

DAILY GAZETTE HOLDING COMPANY, LLC
By: Daily Gazette Company, its sole member

By:--------------------------------------------------------------------
Elizabeth B. Chilton
President
SECOND AMENDED AND RESTATED JOINT OPERATING AGREEMENT BY AND AMONG 
DAILY GAZETTE COMPANY, A WEST VIRGINIA CORPORATION; DAILY GAZETTE 
HOLDING COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY; CHARLESTON 
NEWSPAPERS, A WEST VIRGINIA UNINCORPORATED JOINT VENTURE; CHARLESTON 
NEWSPAPERS HOLDING, L.P., A DELAWARE LIMITED PARTNERSHIP; DAILY GAZETTE 
PUBLISHING COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY; AND 
CHARLESTON PUBLISHING COMPANY, A DELAWARE CORPORATION
----------------, 2009
    THIS SECOND AMENDED AND RESTATED JOINT OPERATING AGREEMENT (this 
``JOA'') is dated as of ----------------, 2009 by and among Daily 
Gazette Company, a West Virginia corporation (``DGC''); Daily Gazette 
Holding Company, LLC, a Delaware limited liability company (``DGHC''); 
Charleston Newspapers, a West Virginia unincorporated joint venture 
(the ``Joint Venture''); Charleston Newspapers Holdings, L.P., a 
Delaware limited partnership (the ``Limited Partnership''); Daily 
Gazette Publishing Company, LLC, a Delaware limited liability company 
(``DGPC''); and Charleston Publishing Company, a Delaware corporation 
(``CPC'').
    Whereas, DGHC, the Joint Venture, the Limited Partnership, DGPC and 
CPC previously entered into an Amended and Restated Joint Venture 
Agreement dated as of May 7, 2004 (the ``Prior JVA''), pursuant to 
which the Joint Venture prior to the date hereof managed and operated 
The Charleston Gazette (``Gazette''), The Sunday Gazette-Mail 
(``Gazette-Mail'') and The Charleston Daily Mail (``Mail'') 
(collectively, the ``Newspapers'' and individually a ``Newspaper''), 
except for the news and editorial departments of Gazette and Gazette-
Mail, on one hand, and Mail, on the other, which have remained separate 
and independent;
    Whereas, simultaneously with the execution of this agreement, DGC 
and CPC and certain affiliated parties are effectuating certain 
transactions relating to the ownership and management of the Joint 
Venture and which are described herein;
    Whereas, DGC, CPC, DGHC, DGPC, the Limited Partnership and the 
Joint Venture desire to amend various provisions of the Prior JVA, to 
restate it in its entirety and to supplement it, as herein provided;
    Whereas, the purpose and intent of the JOA is to provide a plan of 
common operation of the Newspapers, so as to (1) provide efficient 
newspaper operations, (2) produce high quality newspapers that are 
attractive to readers and advertisers and (3) maintain the separate 
identities and free editorial and news voices of the Newspapers; and
    Whereas, the JOA will continue to maintain as separate and 
independent the respective news and editorial operations of the 
Newspapers consistent with the requirements of the Newspaper 
Preservation Act, 15 U.S.C. 1801 et seq.;
    Now Therefore, in consideration of the mutual promises contained 
herein and other good and valuable consideration, the parties hereby 
agree as follows:

I. The Limited Partnership

    A. General. On May 7, 2004, a limited partnership (the ``Limited 
Partnership'') was formed by DGHC, as the sole General Partner, CPC, as 
the sole Class A Limited Partner, and ABRY/Charleston, Inc., as the 
sole Class B Limited Partner. Prior to the date hereof, ABRY/
Charleston, Inc.'s entire interest as a Class B Limited Partner in the 
Limited Partnership was redeemed by the Partnership. Simultaneously 
herewith, the Limited Partnership is granting to CPC (in its capacity 
as the holder of the Warrant and any permitted transferee of the 
Warrant, the ``Warrant Holder'') a warrant (the ``Warrant'') to 
subscribe for and purchase up to an aggregate number of Class B Limited 
Partner Units in the Limited Partnership that constitute a twenty 
percent (20%) Percentage Interest (as defined in the Amended and 
Restated Limited Partnership Agreement of the Limited Partner dated as 
of the date hereof (the ``Limited Partnership Agreement''), by and 
among DGHC and CPC, the Limited Partnership) as of the date of 
exercise, subject to adjustment as provided therein.
    B. Future Capital Contributions; Capital Assets. CPC and any other 
limited partners of the Limited Partnership shall have no obligation to 
make any further contributions to the capital of the Limited 
Partnership. DGHC shall in the future make such additional 
contributions to the capital of the Limited Partnership as shall be 
necessary in its reasonable judgment to (1) fund acquisitions of 
capital assets necessary for the business and operations of the Limited 
Partnership and/or the Joint Venture; (2) fund acquisitions of capital 
assets necessary for the business and operations of the editorial 
departments of each of the Newspapers to the extent such editorial 
departments' tangible capital assets on the date hereof require 
supplementation or replacement, (3) provide the Limited Partnership and 
the Joint Venture with adequate working capital, and (4) ensure that 
the Limited Partnership and the Joint Venture have adequate funds to 
make on a timely basis the cash distributions and payments contemplated 
by Section V J (1) through (4) of this JOA. DGHC may from time to time 
cause the Limited Partnership or the Joint Venture to distribute and 
transfer to it one or more capital assets of the Limited Partnership so 
long as after such transfer the Limited Partnership and the Joint 
Venture shall have, as a result of their remaining capital assets and 
any other capital assets which DGHC shall at the time contribute or 
make available to the Limited Partnership and/or the Joint Venture 
pursuant hereto, capital assets whose adequacy and suitability for the 
Limited Partnership's and/or the Joint Venture's performance of the 
business and operations of the Newspapers are substantially the same as 
prior to such transfer.
    C. Management of Partnership and General Partner. The Limited 
Partnership shall be managed exclusively by DGHC as the General Partner 
of the Limited Partnership. The

[[Page 11706]]

members of DGHC have delegated the management of DGHC to a board of 
managers consisting of up to five individual managers, and in no event 
may the board of managers consist of more than five managers without 
the consent of the managers appointed pursuant to Section 5(b) of the 
Operating Agreement of DGHC by the Warrant Holder or the Class B 
Limited Partner(s), as applicable; provided, however, that in no event 
may the board of managers consist of more than five managers unless not 
fewer than forty percent (40%) are appointed by the Warrant Holder or 
the Class B Limited Partner(s), as applicable. DGC will appoint the 
members of DGHC's board of managers; provided, however, that until and 
unless the Warrant Holder exercises its rights under the Warrant and 
purchases any Class B Limited Partner Units, DGC will delegate to the 
Warrant Holder the right to appoint two (2) of the members of DGHC's 
board of managers (or such greater number as required by Section 
5(b)(ii) of the Operating Agreement of DGHC) and, upon the purchase by 
the Warrant Holder of any Class B Limited Partner Units pursuant to the 
Warrant, DGC will delegate to the Class B Limited Partner(s) the right 
to appoint two (2) of the members of DGHC's board of managers (or such 
greater number as required by Section 5(b)(ii) of the Operating 
Agreement of DGHC). If there is more than one Class B Limited Partner, 
then the right to appoint two (2) of the members of DGHC's board of 
managers (or such greater number as required by Section 5(b)(ii) of the 
Operating Agreement of DGHC) will be vested solely in the Class B 
Limited Partner that supervises editorial and reportorial functions of 
the Mail pursuant to Section V H hereof. The Warrant Holder or the 
Class B Limited Partner(s), as applicable, may not appoint any person 
who is, at the time of his or her appointment, an employee of the Joint 
Venture, DGC, DGHC, the Limited Partnership or DGPC to represent it on 
DGHC's board of managers.

II. The Joint Venture

    A. Continuation of Joint Venture. By this JOA, the Limited 
Partnership and DGPC shall continue the conduct of a joint venture for 
the publication of the Newspapers; provided (1) that there shall 
continue to be no merger, combination or amalgamation of the editorial 
or reportorial staff of Gazette and Gazette-Mail, on the one hand, and 
Mail, on the other hand, (2) that CPC shall continue to independently 
determine the editorial, news policy and content of Mail and (3) that 
DGHC shall continue to independently determine the editorial, news 
policy and content of Gazette and Gazette-Mail.
    B. Name and Place of Business. The Joint Venture shall continue to 
be conducted under the name ``Charleston Newspapers'' from its place of 
business at 1001 Virginia Street, East, City of Charleston, County of 
Kanawha, State of West Virginia.
    C. Ownership of and Title to Property. All of the parties hereto 
hereby confirm and agree that the ownership of and title to all real 
property and all tangible personal property used in and useful to the 
Joint Venture is exclusively in the Joint Venture rather than in any 
other party to this JOA, jointly or individually, and without regard to 
whether any property was contributed by any party to this JOA to the 
Joint Venture, was otherwise made available to the Joint Venture by any 
party to this JOA or was otherwise acquired by the Joint Venture, 
except that certain property is owned by G.M. Properties, Inc., a West 
Virginia corporation, of which all the outstanding shares are owned by 
the Joint Venture.
    D. Revenues, Expenses and Obligations. The Joint Venture shall 
receive all income and revenues of the Joint Venture and shall pay all 
expenses incurred or assumed by it. No party hereto shall be or shall 
become liable upon any contract or other obligation of the Joint 
Venture or any other party hereto, unless such party shall expressly 
assume such contract or other obligation or liability is imposed by 
law.
    E. Management of Joint Venture. Subject to the provisions of this 
JOA concerning the editorial independence of the Newspapers and such 
other limitations as are expressly set forth in this JOA or the Limited 
Partnership Agreement, the Limited Partnership shall have complete 
authority over and exclusive control and management of the business and 
affairs of the Joint Venture. The Limited Partnership may delegate such 
general or specific authority to the officers and employees of the 
Joint Venture with respect to the business and day-to-day operations of 
the Joint Venture as it may from time to time consider desirable, and 
the officers and employees of the Joint Venture may exercise the 
authority granted to them. The Joint Venture shall indemnify, defend 
and hold harmless DGPC and the Limited Partnership and its partners 
(and their respective shareholders, members, partners, directors, 
managers, officers, employees and agents) from any liability, loss or 
damage suffered by them by reason of any act or omission by them in 
connection with the business of the Joint Venture; provided, however, 
that indemnification shall not be available for any claim that results 
from the willful misconduct of such person or the breach by such person 
of its obligations under this JOA or other agreements to which such 
person may be subject. The Limited Partnership shall not be liable, in 
damages or otherwise, to the Joint Venture or its direct or indirect 
partners for any act or omission in the absence of willful misconduct.

III. Editorial Independence

    Preservation of the editorial independence of the Newspapers is the 
essence of this JOA. DGHC and CPC each agree to strictly maintain the 
separateness of their respective limited liability company and 
corporate identities, as the case may be, and to retain the editorial 
independence of Gazette and Gazette-Mail, on the one hand, and Mail, on 
the other hand. CPC agrees that neither it nor any affiliate shall have 
any connection with the news or editorial operations of Gazette or 
Gazette-Mail. The separate editorial and reportorial staffs of Gazette 
and Gazette-Mail, on the one hand, and Mail, on the other hand, shall 
be independent and shall not be merged, combined or amalgamated, and 
their editorial policies shall be independently determined. DGHC agrees 
that neither it nor any affiliate shall have any connection with the 
news or editorial operations of Mail. Actions of DGHC with respect to 
Mail shall be confined exclusively to its role as General Partner of 
the Limited Partnership and in such role to cause the Joint Venture to 
print, sell and distribute the Newspapers, and to solicit and sell 
advertising space therein, and to perform such other functions as are 
described in this JOA.

IV. Term

    Unless sooner terminated in accordance with the terms hereof, this 
JOA shall continue in effect from the date hereof through the close of 
business on June 30, 2024. This JOA shall thereupon be automatically 
renewed for additional five-year terms unless any party hereto gives 
written notice to the contrary to each of the other parties hereto at 
least 12 months prior to the end of the then-current term.

V. Continuing Operations

    A. General. On and after the date hereof the Joint Venture shall 
control, supervise, manage and perform all operations (other than the 
news and editorial operations of the Newspapers) involved in producing, 
printing, selling

[[Page 11707]]

and distributing the Newspapers; to determine press runs, press times, 
page sizes and cutoffs of the Newspapers; to determine whether 
supplemental products will be distributed in or with one or more 
Newspapers, including whether and how certain products will be 
distributed to non-subscribers; to purchase newsprint, materials and 
supplies as required; to solicit and sell advertising space in the 
Newspapers; to collect the Newspapers' circulation and advertising 
accounts receivable; to provide or make available to each Newspaper 
such parking, subscriptions, messenger services, and data processing 
services as are reasonable and appropriate (the costs for which shall 
be borne by the Joint Venture and which shall not be an Editorial 
Expense); and to make all determinations and decisions and do any and 
all acts and things necessarily connected with the foregoing 
activities, including maintaining insurance coverage that is normal and 
appropriate for similarly-situated businesses. The parties recognize 
that DGHC as General Partner of the Limited Partnership shall have 
general charge and supervision of the business of the Newspapers, but 
shall treat each of the Newspapers as separate and distinct editorial 
products, and shall have no duties or authority with respect to the 
news or editorial functions of Mail.
    B. Production. On and after the date hereof, the Joint Venture 
shall print the Newspapers on equipment owned or leased by the Joint 
Venture in plant or plants located at such place or places as the Joint 
Venture may determine, and all operations under this JOA, except the 
operation of the Newspapers' editorial departments, shall be carried on 
and performed by the Joint Venture with equipment from the Joint 
Venture's plant or plants or by independent contractors or agents 
selected by the Joint Venture. During the term of this JOA, CPC agrees 
to produce Mail's editorial and news copy, and DGHC agrees to produce 
Gazette's and Gazette-Mail's editorial and news copy, on equipment 
which is provided by the Joint Venture or which is compatible with the 
equipment used by the Joint Venture in its production facilities.
    C. Advertising and Circulation.
    (1) In general and subject to the exceptions set forth in clauses 
(a) through (d) below, the Joint Venture shall have complete control of 
and the right to determine the advertising and circulation rates for 
each of the Newspapers, and the Joint Venture shall use its reasonable 
efforts to sell advertising space in each Newspaper and to sell, 
promote and distribute each Newspaper as widely as practicable, 
consistent, however, with the objective of enhancing the overall 
economic performance of the Joint Venture and the Newspapers considered 
together in a manner that does not have a material adverse impact on 
the cash flow of the Joint Venture and the ability of the Joint Venture 
to make on a timely basis the cash distributions to the Limited 
Partnership and the payments to CPC contemplated by Section V J (1) 
through (4) hereof.
    (a) The Joint Venture may not reduce the primary circulation area 
of Mail as of August 1, 2009 without CPC's approval.
    (b) For a six month period commencing within a reasonable time 
after the date hereof, the Joint Venture will promote Mail by offering 
subscriptions at a 50% discounted rate. This promotion will be 
applicable solely to Mail.
    (c) Except as set forth in clause (b) above or as otherwise 
approved by CPC, the Joint Venture will offer the same promotions for 
Mail and Gazette to potential subscribers.
    (d) The Joint Venture will not discriminate against Mail in 
advertising, promotions or other sales or marketing efforts.
    (2) The Joint Venture shall be free to select and alter from time 
to time the national advertising representative(s) for each of the 
Newspapers and the commission payable to such national advertising 
representative(s) and any other terms of such arrangement(s) shall be 
determined by the Joint Venture; provided, however that the Joint 
Venture will not discriminate against Mail in advertising, promotions 
or other sales or marketing efforts.
    (3) The Joint Venture will pay to each of the Publisher of Mail and 
the Circulation Director of the Joint Venture a bonus for increases in 
Mail's average daily paid print circulation (as stated in the most 
recent six month audit conducted by the Audit Bureau of Circulations or 
other reputable third party media auditor). If the average daily paid 
print circulation of Mail for a six month audit period is greater than 
the average daily paid print circulation for the immediately preceding 
six month audit period, the bonus will be $3.00 per each additional 
subscriber and will be paid within a reasonable time after the Joint 
Venture receives the applicable six month audit.
    D. Publication Schedule. DGHC shall publish Gazette daily on 
weekdays and Saturday mornings and Gazette-Mail on Saturday and Sunday 
mornings, and CPC shall publish Mail daily on weekday mornings. The 
Joint Venture will not change the press deadlines, delivery targets, 
number of editions and days of publication of Mail without CPC's 
approval. If at any time DGHC determines in the good faith exercise of 
business judgment as General Partner of the Limited Partnership that 
the continuation of any scheduled publication of any edition(s) of 
Gazette or Gazette-Mail is no longer in the best interests of those 
Newspapers and the Joint Venture considered together, then, subject to 
the Newspaper Preservation Act, 15 U.S.C. 1801 et seq. (the ``Act''), 
within thirty days after written notice by the Limited Partnership to 
CPC, the scheduled publication of such edition(s) may be discontinued. 
The Joint Venture will not discontinue publication of Mail without 
CPC's approval unless (i) the incremental revenue from Mail fails to 
cover Mail's incremental costs and the discontinuation of Mail can be 
effected by satisfying the failing firm test as applicable to joint 
operating agreement newspapers under the Act and (ii) the U.S. 
Department of Justice approves the discontinuation of publication of 
Mail.
    E. Office Space and Equipment. On and after the date hereof, the 
Joint Venture shall furnish reasonably adequate office space for the 
separate use of the editorial departments of the Gazette, on the one 
hand, and Mail on the other hand. Such space shall be furnished with 
furniture and equipment which in the Joint Venture's reasonable 
judgment is sufficient and technologically adequate for each 
Newspaper's news and editorial operations.
    F. Other Services. The parties recognize that in addition to the 
operations with respect to the Newspapers contemplated by this JOA, the 
Joint Venture may also utilize its production and other facilities, 
personnel, and agents for any other lawful activities it may deem 
appropriate, including distributing news, advertising or other 
information to non-subscribers; distributing or making available all or 
a portion of the information or advertising in the Newspapers to 
subscribers by means of electronic distribution, microfilm, microfiche 
or mail; commercial printing, including commercial printing of other 
newspapers; distribution services; and any other activities not 
inconsistent with its principal business; provided, however, that such 
activities shall not unreasonably interfere with the printing or 
distribution of the Newspapers.
    G. Future Purchases. On and after the date hereof, subject to 
Section V H, the Joint Venture shall be responsible for the purchase of 
all inventory, supplies,

[[Page 11708]]

equipment and services as it deems to be necessary or desirable in 
connection with the operation of the Newspapers and other functions as 
are described in this JOA. In the event of shortages of inventory, 
supplies, equipment or services, no Newspaper shall be unfairly favored 
or discriminated against as regards the other.
    H. News and Editorial Matters. DGHC and CPC shall furnish complete 
news and editorial services necessary and appropriate for the 
publication of their respective Newspapers in the manner provided in 
this JOA.
    (1) Each of DGHC and CPC shall have complete and exclusive control 
and direction of the editorial department and editorial policies of its 
respective Newspapers and shall be responsible for and shall bear all 
of its respective Editorial Expense (as defined below). Without 
limiting the generality of the foregoing, each of DGHC and CPC shall 
have the exclusive right to determine the editorial format, dress, 
makeup and news and feature content of its respective Newspapers 
(including the content of all advertisements and advertising matter), 
and each shall have complete control and authority over the editors and 
editorial department staff of its respective Newspapers (including the 
exclusive authority to determine the number, identity and salaries of 
the editorial department of its respective Newspapers and to make 
hiring and firing decisions, so long as the Editorial Expense for each 
Newspaper does not exceed the budgeted amount for such Newspaper for 
the applicable year determined in accordance with Section V J(8) 
below). The term ``editorial department'' as used herein shall include 
the news, editorial, editorial promotion and photographic functions of 
the applicable Newspaper. DGHC and CPC each recognize the importance of 
the editorial quality of their respective Newspapers and each of them 
agrees to use reasonable efforts to provide editorial products for 
their Newspapers which are compatible with the needs of the Charleston, 
West Virginia area newspaper market and to preserve with respect to 
their Newspapers a high standard of newspaper quality and journalistic 
excellence.
    (2) The amount of reading content (sometimes known as ``news 
hole'') and the amount of color usage of each of the Newspapers shall 
be determined by the board of managers of the Limited Partnership 
during the annual budgeting process; provided, however, that the news 
hole and color usage allocations will be budgeted at the same level for 
both Mail and Gazette. Each Newspaper may elect to publish pages in 
excess of their news hole and/or exceed the amount of color usage 
determined for such Newspapers by the Joint Venture, provided the Joint 
Venture has the production capacity to accommodate such excesses. 
However, if any of the Newspapers exceeds its budgeted news hole 
allocation or color usage, then any newsprint and other production 
costs attributable to such excess shall be borne by such Newspaper, and 
upon being invoiced therefor by the Joint Venture, DGHC or CPC, as 
appropriate, shall reimburse the Joint Venture for such expense. If, 
from time to time following the determination by the Joint Venture of 
the news hole allocation, the Joint Venture shall require a greater 
news hole allocation for one or more editions of one or more of the 
Newspapers, the Newspapers shall have no obligation to reimburse the 
Joint Venture for any additional expense the Joint Venture may incur as 
a consequence thereof, and the Joint Venture shall reimburse the 
Newspapers promptly upon being invoiced therefor for any additional 
expenses the Newspapers may incur as a consequence thereof.
    (3) DGHC, independently of CPC, shall develop standards for 
determining the acceptability of advertising copy for publication in 
Gazette and Gazette-Mail. CPC, independently of DGHC and the Joint 
Venture, shall develop standards for determining the acceptability of 
advertising copy for publication in Mail.
    (4) Except as provided otherwise herein, the term ``Editorial 
Expense'' as used in this JOA shall mean all costs and expenses 
associated with the news and editorial departments of each Newspaper, 
including but not limited to: (a) Compensation, including payroll 
taxes, retirement, pension, health and death benefits, worker's 
compensation insurance and group insurance of news and editorial 
employees; (b) severance pay of news and editorial employees; (c) 
travel and other expenses of news and editorial employees; (d) press 
association assessments and charges; (e) charges for news services and 
editorial wire services; (f) charges for the right to publish news and 
editorial features, daily or weekly comics and other editorial material 
of every kind and character; (g) the cost of news and editorial 
materials, printing, stationery, office supplies and postage for the 
news and editorial department; (h) donations; (i) the cost of editorial 
promotions; (j) telegraphic, telephone, long-distance telephone and 
internet access charges of the news and editorial departments; (k) 
charges for the purchase, rental, repair and maintenance of editorial 
department cameras and related photographic equipment (provided, 
however, that the term ``Editorial Expense'' shall not include any 
cost, charge or expense related to any camera or other equipment made 
available to the editorial departments of the Newspapers pursuant to 
Section V E of this JOA, or to any equipment that is an integral part 
of the production process even though located in the news and/or 
editorial department of a Newspaper, or related to any editorial 
department capital assets owned by either Newspaper); (l) the cost of 
liability insurance and insurance with respect to libel and right of 
privacy and similar hazards; and (m) the cost of any Charleston, West 
Virginia based executive-level management of Mail. Notwithstanding the 
foregoing, the following shall not be included in the term ``Editorial 
Expense'' and shall be separately borne by the Newspaper which incurs 
them: (i) Certain uninsured liabilities for published or excluded 
material as provided in Section VII B, (ii) costs for excess news hole 
allocation or color usage as provided in Section V H(2), (iii) costs 
related to material changes from present, usual or customary practices 
as provided in Section V H(5), (iv) any interest, indebtedness, 
amortization, organizational costs or other costs or expenses relating 
to Mail and (v) except as described in (m) above, any portion of any 
salaries, expenses, overhead or corporate allocation attributable to 
any non-Charleston, West Virginia based ownership, management or 
supervision of Mail.
    (5) All Editorial Expense of the editorial departments of Gazette 
and Gazette-Mail shall be borne by DGHC, and all Editorial Expense of 
the editorial department of Mail shall be borne by CPC; provided, 
however, that costs resulting from any material change by any Newspaper 
from its present, usual or customary practices that result in 
additional future newsprint, production or other costs to be incurred 
on the part of the Joint Venture shall be borne by such Newspaper, and 
upon being invoiced therefor by the Joint Venture, DGHC or CPC, as 
appropriate, shall reimburse the Joint Venture for such costs.
    I. Accounting Matters. The Joint Venture shall cause to be 
maintained full and accurate books of account and records showing all 
transactions hereunder. Such books and records shall be kept on the 
basis of a year ending December 31 and under the accounting methods 
currently employed by DGC in accordance with generally accepted 
accounting principles, and shall at all times be kept at the principal

[[Page 11709]]

place of business of the Joint Venture. The independent auditors of the 
Joint Venture shall be the independent auditors of DGC. Any changes in 
accounting method shall be consistent with accepted accounting 
principles and with changes made generally by DGC, and CPC shall 
receive prompt notice of any such changes that could reasonably be 
expected to have an adverse effect on its interests under this JOA or 
the Limited Partnership Agreement. CPC and its respective authorized 
agents or representatives shall have access to and may inspect such 
books and records at any time and from time to time during ordinary 
business hours. Statements shall be rendered and settlements under this 
JOA shall be made on a monthly basis on the 15th day following the end 
of each monthly accounting period, with annual adjustments as soon as 
practicable at the conclusion of each year during the term of this JOA. 
An annual statement shall be furnished by the Joint Venture to the 
Limited Partnership not later than the 31st day of March of each year, 
summarizing in reasonable detail and fairly reflecting the transactions 
and the results of operations under this JOA during the preceding year. 
All payments shown to be due by CPC, DGHC or the Joint Venture shall be 
paid within thirty (30) days after the delivery of the applicable 
statement.
    J. Distributions to Partners.
    (1) For each year of this JOA, the Joint Venture shall distribute 
to the Limited Partnership cash equal to the amount actually expended 
or accrued as a current liability in accordance with generally accepted 
accounting principles by CPC for Editorial Expenses during such year; 
provided, however, that the amount distributed by the Joint Venture to 
the Limited Partnership pursuant to this Section V J(1) shall not, in 
respect of any year, exceed the budgeted amount for such year 
determined by the Joint Venture in accordance with Section V J(8) 
below; and provided further that the amount to be distributed by the 
Joint Venture to the Limited Partnership shall be reduced by any 
obligation of CPC to reimburse the Joint Venture for expenses paid by 
the Joint Venture on behalf of CPC. The Limited Partnership shall in 
turn distribute such net amount to CPC.
    (2) If, for any year, with the prior written concurrence of the 
Joint Venture, CPC makes a permanent reduction in its editorial 
workforce in accordance with the requirements of applicable laws, 
regulations and agreements, and if and to the extent the severance 
costs associated with such reduction are not included in CPC's 
applicable budgeted Editorial Expenses for such year determined in 
accordance with Section V J(8) below, then (a) the Joint Venture shall, 
in addition to the cash amounts described in subsection (1) above, 
distribute to the Limited Partnership in cash an amount equal to that 
portion of such severance costs that is reasonable and required to be 
incurred for such year pursuant to applicable laws, regulations or 
agreements, and that in any event does not exceed the costs DGHC would 
have incurred if DGHC had made corresponding reductions.
    (3) The distributions described in subsection (1) above shall be 
made on a monthly basis in increments of 1/12 of the applicable 
budgeted amount determined by the Joint Venture, subject to adjustment 
by the Joint Venture at the end of each year so that such aggregate 
distributions for the year are in such amounts as the Joint Venture 
shall determine (based on such records and evidence as the Joint 
Venture may request from CPC) are equal to the amounts expended or 
accrued by CPC for such year as provided in Section V J(8), but no 
greater than the budgeted Editorial Expenses of Mail for such year. The 
distributions described in subsection (2) above shall also be made on a 
monthly basis and shall be in such amounts as the Joint Venture shall 
determine (based on such records and evidence as the Joint Venture may 
request from CPC) are equal to the amounts expended or accrued by CPC 
for such period within the applicable budget amounts, with such 
subsequent adjustment as may be appropriate.
    (4) In addition to the distributions to the Limited Partnership 
and, in turn, to CPC provided for in Sections V J(1)-(3) above, there 
also shall be paid to CPC a fee for its services in the management and 
supervision of the news and editorial operations of the Mail. The 
management fee shall be paid on May 7 of each year during the term of 
this JOA (each date a ``Payment Date''). The amount of the management 
fee payable on May 7, 2010 shall be $225,000. For each Payment Date 
after May 7, 2010, the management fee payable to CPC shall be $225,000 
adjusted to reflect the aggregate change since May 7, 2010 in the 
Consumer Price Index. The ``Consumer Price Index'' for purposes of this 
JOA shall mean ``The Consumer Price Index for All Urban Consumers (CPI-
U) for the U.S. City Average for All Items, 1982-84 = 100'' released by 
the U.S. Department of Labor, Bureau of Labor Statistics, or any 
similar replacement index. For each Payment Date after May 7, 2010, the 
management fee payable to CPC shall also be adjusted annually on a non-
cumulative basis as follows:
    (a) If Mail's average daily paid print circulation for the most 
recent 12 month audited period exceeds the average daily paid print 
circulation for the immediately preceding 12 month audited period by 
more than 1%, the management fee payable on such Payment Date will be 
increased by $25,000.
    (b) If Mail's average daily paid print circulation for the most 
recent 12 month audited period is the same as the average daily paid 
print circulation for the immediately preceding 12 month audited period 
or if Mail's average daily paid print circulation for the most recent 
12 month audited period exceeds the average daily paid print 
circulation for the immediately preceding 12 month audited period by 1% 
or less, the management fee payable on such Payment Date will be 
increased by $10,000.
    (c) If Mail's average daily paid print circulation for the most 
recent 12 month audited period decreases by 1% or less from the average 
daily paid print circulation for the immediately preceding 12 month 
audited period, the management fee payable on such Payment Date will be 
decreased by $10,000 (provided that in no event will the management fee 
payable on any Payment Date be reduced to an amount below $225,000).
    (d) If Mail's average daily paid print circulation for the most 
recent 12 month audited period decreases by more than 1% from the 
average daily paid print circulation for the immediately preceding 12 
month audited period, the management fee payable on such Payment Date 
will be decreased by $25,000 (provided that in no event will the 
management fee payable on any Payment Date be reduced to an amount 
below $225,000).
    For purposes of the adjustments described in clauses (a) through 
(d) above, Mail's average daily paid print circulation will be 
determined based on 12 month audits conducted by the Audit Bureau of 
Circulations or other reputable third party media auditor.
    (5) Except for the foregoing distributions to the Limited 
Partnership, and except for such cash as the Limited Partnership may 
from time to time determine is necessary or desirable to retain in the 
Joint Venture for working capital purposes, the Joint Venture shall 
(subject to any applicable contractual restrictions under the Joint 
Venture's financing arrangements) distribute all remaining cash 
(including without

[[Page 11710]]

limitation the proceeds from any sale or disposition of Joint Venture 
capital assets) equally to the Limited Partnership and DGPC. Such 
distributions shall be made from time to time as determined by the 
Limited Partnership, but no such distributions shall be made at any 
time when the Joint Venture is not current in making the distributions 
to the Limited Partnership and the payments to CPC described in Section 
V J(l) through (4) hereof.
    (6) Pending the distributions contemplated by this Section V J, 
DGHC shall be authorized to manage the Joint Venture's cash pursuant to 
the corporate-wide policies of DGC.
    (7) All income, gain, profits, losses, and expenses of the Joint 
Venture shall be allocated between the Limited Partnership and DGPC in 
proportion to the cash distributed to them pursuant to this Section V 
J.
    (8) For each year of this JOA, the budgeted Editorial Expenses for 
Mail and Gazette shall be in amounts determined by the board of 
managers of DGHC and approved by at least 75% of the members of the 
board of managers (i.e., if the board consists of four members, not 
fewer than three members must vote in favor, and if the board consists 
of five members, not fewer than four members must vote in favor); 
provided, however that for Mail's 2010 annual Editorial Expense budget 
the staffing level in Mail's news and editorial departments will be 
budgeted at thirty-two (32) full time employees. Any Editorial Expense 
budget may be adjusted by action of the board of managers of DGHC 
(subject to the 75% supermajority voting requirement) from time to time 
during the course of a year of this JOA to take appropriate account of 
developments in products or technologies, material changes in any 
Newspaper's editorial workforce, or other material changes which may 
occur relative to any Newspaper's operations or circulation in any 
given year.

VI. Termination

    A. Termination.
    (1) If DGHC or CPC defaults by failing to make any payment 
hereunder when due or by otherwise failing to fulfill in any material 
respect any of its obligations under this JOA and the party in default 
does not correct its default within ninety (90) days after receipt from 
the other of written notice specifying the default, then the non-
defaulting party may, at its election, terminate this JOA upon ninety 
(90) days' prior written notice.
    (2) If publication of Mail is discontinued in accordance with the 
terms of this JOA or the Limited Partnership is dissolved, terminated 
and liquidated, this JOA shall terminate.
    B. Action After Termination.
    (1) It is understood that, as soon as practicable after the 
termination of this JOA by lapse of time or otherwise, the Limited 
Partnership shall, subject to the prior satisfaction of the claims of 
all creditors (other than the partners of the Limited Partnership) and 
the payment of the fee provided in Section V J(4), distribute to CPC, 
the Mail masthead, all trademarks, copyrights, trade names, service 
names and service marks of the Mail, the Mail subscriber and advertiser 
lists, print and electronic archives of the Mail, associated web sites 
and URLs (including ``dailymail.com'') and all legal rights associated 
with these assets, subject to such dispositions, additions or 
substitutions relating thereto which may have occurred in the ordinary 
course of the operations of the Limited Partnership or the Joint 
Venture or in satisfaction of the claims of creditors subsequent to the 
formation of the Limited Partnership, including, in particular, any and 
all lists of subscribers to Mail, together with copies of any contracts 
with such subscribers relating to Mail and any executory contracts for 
the purchase of advertising in Mail, free and clear of any lien, 
encumbrance, right or interest (including any option or any license or 
other right of use) of or in favor of a third party, transfer 
restriction (including any right of first offer or refusal or similar 
provision) or any other similar right or interest whatsoever.
    (2) Upon the termination of this JOA by lapse of time or otherwise, 
the Joint Venture shall dissolve and shall distribute its assets as 
follows:
    (a) That portion of any distributions to which the Limited 
Partnership may be entitled but which has not yet been distributed for 
the period up to the date of termination pursuant to Section V J(1) 
through (3) hereof, shall be distributed to the Limited Partnership.
    (b) All other assets of the Joint Venture shall be distributed 
equally to DGPC and the Limited Partnership.
    (3) A partial accounting and partial settlement under this JOA 
shall be made as promptly as practicable and a final accounting and 
final settlement shall be made not later than the 31st day of March of 
the year following the year in which this JOA is terminated.

VII. Miscellaneous Provisions

    A. Certain Liabilities; Force Majeure. Except as otherwise provided 
in this JOA, no party shall be charged with or held responsible for any 
contract, debt, claim, demand, damage, suit, action, obligation or 
liability arising by reason of any act or omission on the part of any 
other party, and no party shall be liable to any other for any failure 
or delay in performance under this JOA occasioned by war, riot, act of 
God or the public enemy, strike, labor dispute, shortage of any 
supplies, failure of supplier or workmen, or any cause beyond the 
control of the party required to perform, and such failure or delay 
shall not be considered a default hereunder.
    B. Liabilities for Published or Excluded Material. The Joint 
Venture shall obtain insurance to insure each of the Newspapers against 
liability for libel and right of privacy in such amount as it deems 
appropriate, with the premiums for such insurance being an Editorial 
Expense as provided in Section V H(4). However, the entire cost and 
expense of defending, settling, paying and discharging any liability or 
other claim which is not covered by the libel insurance obtained by the 
Joint Venture (excluding any such cost or expense which is not covered 
as a result of the application of any deductible amount or co-payment 
requirement provided under the insurance policy) for Gazette and 
Gazette-Mail on account of anything published in or excluded from 
Gazette or Gazette-Mail, or arising by reason of anything done or 
omitted to be done by the editorial departments thereof, shall be borne 
by DGHC; and any similar cost and expense on account of anything 
published in or excluded from Mail, or arising by reason of anything 
done or omitted to be done by the editorial department thereof, shall 
be borne by CPC. DGHC and CPC each agree to indemnify and hold the 
other party, the Joint Venture and the Limited Partnership harmless 
against any cost, expense or liability which such other party, the 
Joint Venture or the Limited Partnership may suffer or incur as a 
result of any such action or inaction for which the indemnifying party 
is responsible as provided above.
    C. Contravention of Law. Nothing contained in this JOA shall be 
construed to permit any party acting jointly or by unified action to 
engage in any predatory pricing, predatory practice or any other 
conduct which would be unlawful under any antitrust law as engaged in 
by any single entity. The parties hereto further mutually agree that if 
any part or provision of this JOA shall hereafter become, or be 
determined by action in any proper court to be, in contravention of 
law, this JOA shall not thereby be considered or adjudged to be a 
nullity, but that all parties shall, and each hereby agrees, 
immediately to take, or authorize such action to be taken, to reform 
this JOA,

[[Page 11711]]

or to modify, alter or supplement any of its provisions, as may be 
necessary to permit the intention and purpose of the parties hereto to 
be properly and lawfully carried out.
    D. Further Assurances. From time to time on and after the date 
hereof, each of the parties hereto will execute all such instruments 
and take all such actions as the other party shall reasonably request 
in connection with carrying out and effectuating the intention and 
purpose hereof and all transactions and things contemplated by this 
JOA, including, without limitation, the execution and delivery of any 
and all confirmatory and other instruments and the taking of any and 
all actions which may reasonably be necessary or desirable to complete 
the transactions contemplated thereby.
    E. Assignments and Transfers.
    (1) Except as authorized under the Limited Partnership Agreement, 
CPC may not sell, assign or transfer (including any pledge or 
hypothecation), any of its rights or interests under this JOA or 
pertaining to the Joint Venture or the Limited Partnership or the 
Newspapers to any person without the prior written consent of DGHC, 
which shall not be unreasonably withheld. Without limiting the 
generality of the foregoing, except as authorized under the Limited 
Partnership Agreement, a controlling interest in the capital stock of 
CPC may not be sold, assigned or transferred to any person without the 
prior written consent of DGHC, which shall not be unreasonably 
withheld. No consent of DGHC shall be required for a transfer relative 
to the Limited Partnership or any interests therein that is expressly 
authorized and made in compliance with the transfer provisions under 
the Limited Partnership Agreement, and, the foregoing transfer 
restrictions shall not apply to any transfer of any right or interest 
under this JOA or pertaining to the Joint Venture or the Newspapers to 
MNG or an affiliate of MNG so long as MNG or an affiliate of MNG holds 
and maintains, directly or indirectly, voting control of such 
transferee following such transfer. CPC acknowledges and agrees that 
DGHC's ability to grant consent to a transfer is circumscribed by 
certain contractual restrictions under the Joint Venture's financing 
arrangements and the withholding of consent by DGHC in order to comply 
with these contractual restrictions will not be considered 
unreasonable.
    (2) DGC, DGHC, the Limited Partnership, DGPC and the Joint Venture 
may, without the consent of CPC, sell, assign or transfer a part or all 
or substantially all of the assets of Gazette and Gazette-Mail as a 
going concern to any person and assign a part or all of their rights 
and obligations under this JOA to the purchaser thereof, or sell, 
assign or transfer part or all of their direct or indirect interests in 
DGHC, the Limited Partnership, DGPC and the Joint Venture to any 
person, so long as (1) at the time of such sale the Joint Venture is 
current in the distributions required to be made to the Limited 
Partnership and the payments required to be made to CPC pursuant to 
Section V J(1) through (4) hereof, and (2) the purchaser assumes (in 
the case of an assets sale) all of the obligations of the assignors 
pursuant to this JOA. In the event DGC, DGHC, the Limited Partnership, 
DGPC or the Joint Venture engages in an assets sale contemplated by 
this Section VII E, they shall, effective on the closing thereof, be 
released and discharged from any further liability under this JOA. No 
consent of CPC shall be required for (i) a pledge by DGC, DGHC, the 
Limited Partnership, DGPC or the Joint Venture of their rights under 
this JOA or their direct or indirect interests in DGHC, the Limited 
Partnership, DGPC and the Joint Venture to the Joint Venture's lenders 
for security purposes or a transfer of such interests and rights 
pursuant to any foreclosure action by the Joint Venture's lenders or 
any transfer in lieu of foreclosure.
    F. Other Ventures. Neither DGC nor any Partner of the Limited 
Partnership may engage in other ventures in the Charleston, West 
Virginia market that are competitive with that of the Limited 
Partnership or any of its Subsidiaries (including the Joint Venture). 
For purposes of this Section VII F, any competitive venture undertaken 
by an affiliate of a Partner in the Charleston, West Virginia market 
will be deemed to be a competitive venture undertaken by such Partner.
    G. Entire Agreement. This JOA amends and restates the Prior JVA in 
its entirety.
    H. Notices. All notices, requests, demands, claims and other 
communications which may or are to be given hereunder or with respect 
hereto shall be in writing, shall be given either by personal delivery, 
facsimile or by certified or special express mail or recognized 
overnight delivery service, first class postage prepaid, or when 
delivered to such delivery service, charges prepaid, return receipt 
requested, and shall be deemed to have been given or made when 
personally received by the addressee, addressed as follows:
    (1) If to CPC, to:

Affiliated Media, Inc., 101 W. Colfax Avenue, Suite 1100, Denver, CO 
80202. Attn: Joseph J. Lodovic, IV President, Facsimile: (303) 954-
6320.

    With a copy to:

Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 
10004. Attn: James Modlin, Facsimile: (212) 422-4726.

or such other addresses as CPC may from time to time designate.

    (2) If to DGC, DGHC, DGPC, the Joint Venture or the Limited 
Partnership, to:

Daily Gazette Company, 1001 Virginia Street, East, Charleston, WV 
25301. Attn: Ms. Elizabeth E. Chilton, President, Facsimile: (304) 348-
5180.

    And

Attn: Mr. Norman Watts Shumate III, Facsimile: (304) 348-1795.

    With a copy to:

Baker & Hostetler LLP, 1050 Connecticut Avenue, NW., Suite 1100, 
Washington, DC 20036. Attn: Lee H. Simowitz, Facsimile: (202) 861-1783.

or such other addresses as DGHC, DGC, DGPC, the Joint Venture or the 
Limited Partnership may from time to time designate.

    I. Announcements/Disclosures. The parties agree that, except as 
required by law, and then only upon the maximum advance notice to the 
other parties which is practicable under the circumstances, they will 
make no public announcement concerning this JOA and the transactions 
contemplated hereby prior to the first mutually agreed upon 
announcement thereof without the consent of the other parties as to the 
form, content, and timing of such announcement or announcements.
    J. Headings. Titles, captions or headings contained in this JOA are 
inserted only as a matter of convenience and for reference and in no 
way define, limit, extend or describe the scope of this JOA or the 
intent of any provisions hereof.
    K. Governing Law. This JOA shall be construed and enforced in 
accordance with the internal laws of the State of West Virginia.
    L. Modifications. This JOA shall be amended only by an agreement in 
writing and signed by the party against whom enforcement of any waiver, 
modification or discharge is sought (subject to any applicable 
contractual restrictions under the Joint Venture's financing 
arrangements).
    M. Specific Performance. In addition to any other remedies the 
parties may have, each party shall have the right to enforce the 
provisions of this JOA

[[Page 11712]]

through injunctive relief or by a decree or decrees of specific 
performance.
    N. No Third Party Beneficiaries. Nothing in this JOA, express or 
implied, shall give to anyone other than the parties hereto (and the 
parties entitled to indemnification hereunder) and their respective 
permitted successors and assigns any benefit, or any legal or equitable 
right, remedy or claim, under or in respect of this JOA.
    O. Nature of Relationship. Nothing contained in this JOA shall 
constitute the parties hereto as alter egos or joint employers or as 
having any relationship other than as specifically provided herein and 
in any other agreement to which they are subject. DGHC and CPC each 
will retain and be responsible for (and will indemnify the other 
parties, the Joint Venture and the Limited Partnership against) all of 
their respective debts, obligations, liabilities, and commitments which 
have not been expressly assumed by the Joint Venture pursuant to this 
JOA or the Limited Partnership, or for which the Joint Venture was not 
already liable under the Prior JVA.
    O. Survival. The expiration or termination of this JOA shall not 
abrogate the rights and obligations of the parties under Section VII(B) 
or any other provision of this JOA that contemplates actions to be 
taken after the expiration or termination of this JOA.
    P. Dispute Resolution. The terms of Exhibit A attached hereto, 
which include provisions related to the procedures pursuant to which 
the parties shall resolve any disputes, claims or controversies arising 
under, out of or in connection with this JOA are incorporated herein by 
this reference as if set out herein in full.

DAILY GAZETTE COMPANY
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

DAILY GAZETTE HOLDING COMPANY, LLC
By: Daily Gazette Company, Sole Member
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

CHARLESTON PUBLISHING COMPANY
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

CHARLESTON NEWSPAPERS

By: Charleston Newspapers Holdings, L.P., General Partner
By: Daily Gazette Holding Company, LLC, General Partner
By: Daily Gazette Company, Sole Member

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

DAILY GAZETTE PUBLISHING COMPANY, LLC

By: Charleston Newspapers Holdings, L.P., Sole Member
By: Daily Gazette Holding Company, LLC, General Partner
By: Daily Gazette Company, Sole Member

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

CHARLESTON NEWSPAPERS HOLDINGS, L.P.

By: Daily Gazette Holding Company, LLC, General Partner
By: Daily Gazette Company, Sole Member

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------

Exhibit A to Amended and Restated Joint Operating Agreement

Dispute Resolution

    (a) Any dispute, claim or controversy arising under, out of, in 
connection with or relating to this JOA, or any course of conduct, 
course of dealing, statements (oral or written), or actions of any 
party relating to this JOA, including any claim based on or arising 
from an alleged tort (each, a ``Dispute''), shall be resolved solely in 
the following manner:
    (i) Pre-arbitration procedures.
    (A) Each party shall cause one of its senior officers to first meet 
with the other party's senior officer and attempt to resolve the 
Dispute by agreement.
    (B) Failing resolution, either party may submit to the other party 
a written request for non-binding mediation. Within ten (10) business 
days after such written request is made, the parties shall attempt to 
agree on a single mediator. If the parties cannot agree on a mediator 
within such period, either party may proceed to implement the 
arbitration provisions of clause (a)(ii) below.
    (C) Mediation shall take place at the place or places and at the 
time or times set by the mediator, but shall not be held in public. The 
rules of procedure, evidence and discovery with respect to any 
mediation shall be as directed by the mediator. Neither party may be 
represented at hearings before the mediator by an attorney but the 
parties may consult with counsel outside the hearing room and counsel 
may assist in preparing any written materials to be used in the 
mediation, including statements and briefs.
    (D) The mediator shall facilitate communications between the 
parties and assist them in attempting to reach a mutually acceptable 
resolution of the Dispute by agreement. The mediator shall make no 
binding determinations, findings, or decisions.
    (E) The mediator's expenses shall be borne equally by the parties.
    (F) At any point in the mediation process after the initial meeting 
with the mediator, either party may declare in writing that an impasse 
exists, and thereafter either party may proceed to implement the 
arbitration provisions of clause (a)(ii) below. If the parties have not 
resolved their dispute pursuant to the provisions of this clause (a)(i) 
within thirty (30) days after appointment of the mediator, the parties 
shall immediately proceed to implement the arbitration provisions of 
clause (a)(ii) below.
    (ii) Arbitration.
    (A) All Disputes between the parties that are not resolved under 
clause (a)(i) above shall be finally resolved by arbitration in 
accordance with the rules of JAMS (or its successor) described below, 
subject to the limitations of this clause (a)(ii).
    (B) Except as provided in clause (a)(ii)(C), with respect to a 
Dispute in which the claim, counterclaim or amount in controversy does 
not exceed Two Hundred Fifty Thousand Dollars ($250,000) (a ``Minor 
Dispute''), a single arbitrator shall decide the Minor Dispute in 
accordance with the JAMS Streamlined Arbitration Rules and Procedures 
then in effect (the ``Streamlined Rules''). In the event the parties 
are unable to agree upon an arbitrator, the arbitrator shall be 
appointed by JAMS under the Streamlined Rules. The arbitrator shall 
determine the Minor Dispute in accordance with the terms of this JOA 
and the laws designated in Section VII K of the JOA and shall have 
authority to render a maximum award of Two Hundred Fifty Thousand 
Dollars ($250,000), including all damages of any kind and costs, fees 
and the like.
    (C) With respect to a Dispute in which (x) the claim, counterclaim 
or amount in controversy exceeds Two Hundred Fifty Thousand Dollars 
($250,000), or (y) the resolution of the Dispute may give a party a 
right to terminate this JOA (``Major Dispute''), any such Major Dispute 
shall be decided by a majority vote of three arbitrators. In the event 
the parties are unable to agree on the three arbitrators, the three 
arbitrators shall be appointed by JAMS under the JAMS Comprehensive 
Arbitration Rules and Procedures then in effect (the ``Comprehensive 
Rules''). The three arbitrators shall determine the Major Dispute in 
accordance with the terms of this JOA and the laws designated in 
Section VII K of this JOA. The majority of the three arbitrators may 
grant any award, remedy or relief (``Award'') that they deem just and 
equitable and within the scope of this JOA. The majority of

[[Page 11713]]

the arbitrators may also grant such ancillary relief as is necessary to 
make effective the Award, including injunctive relief and/or specific 
performance. In all arbitration proceedings in connection with a Major 
Dispute, the arbitrators shall make specific, written findings of fact 
and conclusions of law. In all Major Disputes, the parties shall, in 
addition to the limited statutory right to seek vacation or 
modification of any Award pursuant to applicable law, have the right to 
seek vacation or modification of any Award that is based in whole, or 
in part, on an incorrect or erroneous ruling of law by appeal to an 
appropriate court having jurisdiction; provided, however, that any 
application for vacation or modification of an Award based on an 
incorrect ruling of law must be filed in a court having jurisdiction 
pursuant to clause (c) below within thirty (30) days from the date the 
Award is rendered. The findings of fact made by the arbitrators shall 
be binding on all parties and shall not be subject to further review 
except as otherwise allowed by applicable law.
    (D) The non-prevailing party, as determined by the arbitrator or 
arbitrators, shall be required to pay all of the arbitrator's fees and 
shall reimburse the prevailing party for any advances made by such 
party in respect of such fees.
    (E) The arbitrator(s) shall not have the power to award (i) damages 
inconsistent with this JOA or (ii) punitive damages or any other 
damages not measured by the prevailing party's actual damages, and the 
parties expressly waive their right to obtain such damages in 
arbitration or in any other forum. In no event, even if any other 
portion of these provisions is held to be invalid or unenforceable, 
shall the arbitrator(s) have power to make an award or impose a remedy 
that could not be made or imposed by a court deciding the matter under 
the law designated in Section VII K of this JOA.
    (F) The arbitrator(s) shall have the authority to order the parties 
to produce documents or things for inspection and to provide 
appropriate discovery to each other, including the depositions of 
witnesses and the exchange of expert reports.
    (G) Neither the parties nor any arbitrator may disclose the 
existence, content or results of the arbitration, except as necessary 
to enforce an Award or comply with legal or regulatory requirements. 
Before making any such disclosure, a party shall give written notice to 
all other parties and shall afford these parties a reasonable 
opportunity to protect their interests.
    (H) Except as otherwise provided in clause (a)(ii)(C) above, the 
result of the arbitration will be binding on the parties, and judgment 
on the arbitrator's Award may be entered in a court designated in 
clause (c) below.
    (I) At the request of either party, arbitration proceedings shall 
include an oral hearing for the presentation of oral testimony and oral 
argument. Written presentations may also be received. The parties shall 
have the right to cross-examine witnesses, if requested. The 
arbitrator(s) shall have the authority to administer oaths and to issue 
orders requiring the presence of witnesses at the hearing if consistent 
with the law designated in Section VII K of this JOA, or to apply to a 
court designated in clause (c) below to issue such orders.
    (J) All arbitration hearings will be commenced within sixty (60) 
days of demand for arbitration by any party, provided, upon a showing 
of cause, the arbitrator or arbitrators may extend the commencement of 
such hearing for up to an additional thirty (30) days.
    (b) Limitations on Arbitration Requirement.
    (i) No provision of, nor the exercise of any rights under, this JOA 
regarding arbitration shall limit the right of either party to join the 
other party in litigation in the event of any litigation or proceeding 
commenced by any third party against a party to this JOA in which the 
other party is an indispensable party or potential third party 
defendant (e.g., where such other party may be obligated to indemnify 
the defendant in such third party action).
    (ii) No provision of, nor the exercise of any rights under, this 
JOA regarding arbitration shall limit the right of either party to seek 
provisional or ancillary judicial remedies with respect to any Dispute, 
such as preliminary injunctive relief, sequestration, attachment, 
garnishment, or the appointment of a receiver from a court having 
jurisdiction before, during or after the pendency of any arbitration. 
The institution and maintenance of an action for such judicial remedies 
shall not constitute a waiver of the right of any party, including the 
claimant in such action, to submit to arbitration nor render 
inapplicable the compulsory arbitration provisions hereof.
    (iii) Nothing in this JOA shall be deemed to limit applicability of 
any otherwise applicable statutes of limitation and any waivers 
contained in this JOA. No provision in this Exhibit regarding 
submission to jurisdiction and/or venue in any court is intended or 
shall be construed to be in derogation of the provisions in this 
Exhibit for arbitration of any Dispute.
    (c) WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING RELATING TO ANY 
AWARD OR ANY ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO 
COMPEL ARBITRATION OF ANY DISPUTE TO WHICH THIS EXHIBIT APPLIES, AND 
FOR ANY OTHER MATTER SO DESIGNATED IN THIS EXHIBIT, EACH PARTY 
IRREVOCABLY (1) CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF 
ANY UNITED STATES FEDERAL COURT OR WEST VIRGINIA STATE COURT SITTING IN 
THE CITY OF CHARLESTON IN THE STATE OF WEST VIRGINIA, (2) WAIVES ANY 
OBJECTION THAT IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY 
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT, (3) WAIVES ANY 
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH 
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (4) WAIVES THE RIGHT 
TO OBJECT, WITH RESPECT TO ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING 
BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION 
OVER THE PARTY, AND (5) WAIVES ALL RIGHT TO TRIAL BY JURY.

Put/Call Agreement

    PUT/CALL AGREEMENT, dated as of ---------------- (the ``Effective 
Date''), among DAILY GAZETTE HOLDING COMPANY, LLC, a limited liability 
company organized under the laws of the State of Delaware (``DGHC''); 
CHARLESTON NEWSPAPERS HOLDINGS, L.P., a limited partnership organized 
under the laws of the State of Delaware (the ``Limited Partnership''); 
and ----------------, a ---------------- (the ``Class B Partner'').

Recitals

    Whereas, the parties desire to enter into this Agreement to set 
forth certain agreements with respect to the Class B Partner's 
ownership of its Class B Limited Partner Units, including put rights 
and call rights;
    Now, Therefore, in consideration of the foregoing and the mutual 
covenants and agreements set forth herein, the parties agree as 
follows:

Article I

Definitions

    1.1 Definitions. The following terms used in this Agreement have 
the

[[Page 11714]]

meanings given such terms in this Section 1.1:
    ``Affiliate'' means, with respect to any Person, any other Person 
that directly or indirectly through one or more intermediaries 
controls, is controlled by or is under common control with such first-
named Person.
    ``Agreement'' means this Put/Call Agreement, as it may be amended, 
restated, modified or supplemented from time to time in accordance with 
its terms.
    ``Buyer'' has the meaning given such term in Section 3.1(a).
    ``Call'' has the meaning given such term in Section 5.1(b).
    ``Call Notice'' has the meaning given such term in Section 5.1(b).
    ``Class B Limited Partner'' has the meaning given such term in 
Section 1.1.12 of the Limited Partnership Agreement.
    ``Class B Limited Partner Unit'' has the meaning given such term in 
Section 1.1.14 of the Limited Partnership Agreement.
    ``CPC'' means Charleston Publishing Company, a Delaware 
corporation.
    ``DGC'' means Daily Gazette Company, a corporation organized under 
the laws of the State of West Virginia.
    ``DGHC'' has the meaning given such term in the Preamble.
    ``Drag-Along Notice'' has the meaning given such term in Section 
4.1(a).
    ``Drag-Along Right'' has the meaning given such term in Section 
4.1(a).
    ``Election Notice'' has the meaning given such term in Section 6.1.
    ``Fair Market Value of the Partnership'' has the meaning given such 
term in Section 5.2.3 of the Limited Partnership Agreement.
    ``General Partner'' means DGHC and any successor General Partner.
    ``General Partner Unit'' has the meaning given such term in Section 
1.1.18 of the Limited Partnership Agreement.
    ``JOA'' means the Second Amended and Restated Joint Operating 
Agreement dated as of the date hereof, by and among DGC, DGHC, the 
Joint Venture, the Limited Partnership, Daily Gazette Publishing 
Company, LLC, a Delaware limited liability company, and CPC.
    ``Joint Venture'' means Charleston Newspapers, a West Virginia 
unincorporated joint venture.
    ``Limited Partnership Agreement'' means that certain Amended and 
Restated Limited Partnership Agreement for Charleston Newspapers 
Holdings, L.P. dated as of --------------------, 2009, by and among 
DGHC and CPC, as such agreement may be amended, restated, modified or 
supplemented from time to time in accordance with its terms.
    ``New Units'' means any Units offered by the Limited Partnership 
after the date of this Agreement.
    ``Partner'' means any Person admitted as a Partner of the Limited 
Partnership in accordance with the provisions of the Limited 
Partnership Agreement.
    ``Permitted Transferee'' means any other Person that directly or 
indirectly succeeds to any or all of its Class B Limited Partner Units 
in accordance with the provisions of this Agreement and Article VI of 
the Limited Partnership Agreement and is admitted as a Partner in 
accordance with the provisions of Article VI of the Limited Partnership 
Agreement.
    ``Person'' means any individual, general partnership, limited 
partnership, corporation, limited liability company, limited liability 
partnership, joint venture, trust, business trust, cooperative, 
association, governmental agency or a division or subdivision of any of 
the foregoing, and the heirs, executors, administrators, legal 
representatives, successors and assigns of such Person where the 
context so permits.
    ``Pro Rata Portion'' means the Class B Partner's Percentage 
Interest in the Limited Partnership (as defined in the Limited 
Partnership Agreement).
    ``Residual Class B Partner Percentage'' means, as of any date, the 
percentage of the aggregate distributions by the Limited Partnership to 
the General Partner and the Class B Partner that the Class B Partner 
would be entitled to receive under Section 7.3 of the Limited 
Partnership Agreement if (i) the Limited Partnership were to sell its 
assets at the Fair Market Value of the Partnership, (ii) income, gain, 
loss and deduction arising from such sale were allocated among the 
Partners in accordance with Section 5.2.3 of the Limited Partnership 
Agreement, but without giving effect to any allocation of income or 
gain attributable to the Tax Gross-Up Amount (as defined in the Limited 
Partnership Agreement), and (iii) the Limited Partnership were then 
liquidated on such date, taking into account all unrealized 
appreciation or decline in value of the assets of the Limited 
Partnership, and assuming all reserves were distributed.
    ``Subsidiary'' means any Person (including the Joint Venture) that 
is controlled by the Limited Partnership.
    ``Tax-Adjusted Residual Class B Partner Percentage'' means, as of 
any date, the percentage of the aggregate distributions by the Limited 
Partnership to the General Partner and the Class B Partner that the 
Class B Partner would be entitled to receive under Section 7.3 of the 
Limited Partnership Agreement if (i) the Limited Partnership were to 
sell its assets at the Fair Market Value of the Partnership, (ii) 
income, gain, loss and deduction arising from such sale were allocated 
among the Partners in accordance with Section 5.2.3 of the Limited 
Partnership Agreement, and (iii) the Limited Partnership were then 
liquidated on such date, taking into account all unrealized 
appreciation or decline in value of the assets of the Limited 
Partnership, and assuming all reserves were distributed.
    ``Taxes'' means any and all taxes, fees, duties, tariffs, imposts 
and other charges of any kind imposed by any government or taxing 
authority, including, without limitation: federal, state, local, or 
foreign income, gross receipts, windfall profits, severance, property, 
ad valorem, sales, use, license, excise franchise, capital, transfer, 
recordation, employment, withholding, or other tax or governmental 
assessment.
    ``Tax Interest'' means any interest, additions, or penalties with 
respect to Taxes and any interest in respect of such additions or 
penalties.
    ``Unit'' means an undivided share of the interests in the Limited 
Partnership of all the Partners, which include the General Partner 
Units and Class B Limited Partner Units.
    ``Unpaid Tax Liabilities'' means the sum of (i) all unpaid Transfer 
Tax Liabilities, plus (ii) all unpaid Taxes of the Class B Partner due 
and owing (but, in the case of any Tax attributable to income or gain 
allocated to the Class B Partner by the Limited Partnership, only to 
the extent that such Tax would have been paid by the Class B Partner if 
the Class B Partner had used the full amount of all distributions 
received by it from the Limited Partnership after such Tax became due 
and payable to pay such Tax and all other Taxes arising thereafter), 
plus Tax Interest attributable thereto.

Article II

Restriction on Transfer

    2.1 Restriction on Transfer of Class B Limited Partner Units.
    (a) Permitted Transfer. Except as otherwise specifically provided 
in Section 2.1(c), the Class B Partner shall have the right to sell, 
exchange, transfer, pledge, hypothecate, assign or otherwise dispose of 
(any of the foregoing transactions referred to herein as a 
``Transfer'') all or any part of its Class B Limited Partner Units to 
any Person.
    (b) Transfer to an Affiliate. The Class B Partner shall be 
permitted to Transfer its Class B Limited Partner Units to an Affiliate 
of the Class B Partner and to assign its Class B Limited Partner Units

[[Page 11715]]

and its rights under this Agreement as collateral security to Persons 
extending financing to such Limited Partner or any of their Affiliates 
(and such Persons may at any time foreclose on such security interest).
    (c) Restriction on Transfer. Notwithstanding anything contained in 
Sections 2.1(a) or 2.1(b) to the contrary, the Class B Partner shall 
not have the right to Transfer all or any part of its Class B Limited 
Partner Units to any Person that is, or that is an Affiliate of a 
Person that is, a publisher of a general circulation daily newspaper 
(other than a newspaper published by the Joint Venture) whose principal 
newsroom is located in Kanawha County, West Virginia, or Putnam County, 
West Virginia; provided, however, that the foregoing restriction shall 
not apply to a publisher of a general circulation daily newspaper with 
a circulation market share in Kanawha and Putnam Counties of 5% or 
less. Any Transfer that is made in violation of this Section 2.1(c) 
shall not be permitted and shall be null and void for all purposes.
    (d) Transfer Tax Liabilities. Upon a Transfer of any Class B 
Limited Partner Units by the Class B Partner pursuant to this Section 
2.1, the Class B Partner and/or the transferee of such Class B Limited 
Partner Units shall be liable for all Taxes and Tax Interest, resulting 
from such Transfer (``Transfer Tax Liabilities'') and shall not be 
entitled to receive any tax distributions under the Limited Partnership 
Agreement in respect thereof (provided that this Section 2.1(d) shall 
not affect the Class B Partner's rights to receive distributions in 
accordance with the Limited Partnership Agreement).
    (e) Transfer in Compliance with the Limited Partnership Agreement; 
Agreement to be Bound by this Agreement. No Transfer may be made 
pursuant to this Section 2.1 unless such Transfer is also made in 
accordance with Article VI of the Limited Partnership Agreement and, 
without limiting the generality of the foregoing, the transferee of any 
Class B Limited Partner Units pursuant to this Section 2.1, if not 
already a party to this Agreement, shall execute and deliver an 
agreement to the General Partner by which it agrees to become a party 
to this Agreement, assume all of the obligations hereunder of its 
transferor with respect to the Class B Limited Partner Units 
transferred to it and be bound by the terms and conditions hereof in 
the same manner as the transferor with respect to such Units. Without 
limiting the generality of the foregoing, any and all Class B Limited 
Partner Units transferred pursuant to this Section 2.1 shall remain 
subject to, and shall enjoy the rights under, the Tag-Along Right, 
Drag-Along Right, Put and Call provisions set forth in Articles III, IV 
and V hereof and the Class B Limited Partner shall continue to have the 
Class B Partner Board Right set forth in Article VII hereof and the 
Limited Partnership Agreement. No Transfer may be made pursuant to this 
Section 2.1 unless such Transfer is also made in accordance with all 
applicable laws, including federal and state securities laws.

Article III

Tag-Along Rights

    3.1 Tag-Along Rights
    (a) If the General Partner proposes to Transfer any General Partner 
Units (``Transferor Units''), to one or more Persons who is not an 
Affiliate of the General Partner (each such Person, a ``Buyer''), then, 
as a condition to such transfer, the General Partner shall cause the 
Buyer to include an offer (the ``Tag-Along Offer'') to the Class B 
Partner to purchase from the Class B Partner, at the option of the 
Class B Partner, that number of Class B Limited Partner Units as 
determined in accordance with Section 3.1(b), on the same terms and 
conditions as are applicable to the Transferor Units (with the portion 
of the purchase price payable to the Class B Partner being the 
aggregate amount of the purchase price for all Units included in such 
sale multiplied by the Tax-Adjusted Residual Class B Partner 
Percentage). The General Partner shall provide a written notice (the 
``Tag-Along Notice'') of the Tag-Along Offer to the Class B Partner, 
which may accept the Tag-Along Offer by providing a written notice of 
acceptance of the Tag-Along Offer to the General Partner within thirty 
(30) days of the delivery of the Tag-Along Notice. Subject to Section 
3.1(e), if the Class B Partner fails to accept a Tag Along Offer within 
thirty (30) days of delivery of the Tag-Along Notice, the Class B 
Partner shall cease to have any rights hereunder with respect to such 
Tag-Along Offer.
    (b) The Class B Partner shall have the right (a ``Tag-Along 
Right'') to sell pursuant to the Tag-Along Offer the percentage of its 
Class B Limited Partner Units then held equal to the percentage of 
General Partner Units proposed to be sold by the General Partner (which 
percentage of General Partner Units may be reduced in the sole 
discretion of the General Partner and the Buyer).
    (c) The Class B Partner's Tag-Along Right shall not apply to any 
(i) pledge by the General Partner of Units for security purposes under 
any bona fide loan transaction; (ii) Transfer of Units pursuant to a 
foreclosure action under any bona fide loan transaction; or (iii) 
Transfer of Units by the General Partner to an Affiliate. If the 
General Partner Transfers any General Partner Units to an Affiliate of 
the General Partner, such Affiliate transferee shall become a party to 
and be bound by the terms of this Agreement to the same extent as the 
General Partner.
    (d) If the Class B Partner fails to accept a Tag-Along Offer within 
thirty (30) days of delivery of the Tag-Along Notice, the Buyer shall 
have one hundred twenty (120) days, commencing on the thirtieth (30th) 
day after delivery of the Tag-Along Notice to the Class B Partner, in 
which to purchase on terms no more favorable to the transferor than the 
terms set forth in the Tag-Along Offer from the General Partner the 
number of Transferor Units with respect to which the Tag-Along Notice 
was delivered. If such purchase and sale is not consummated on terms no 
more favorable to the transferor than the terms set forth in the Tag-
Along Offer within such one hundred twenty (120) day period, any 
Transfer of the Transferor Units shall again be subject to the 
provisions of this Section 3.1.
    (e) The provisions of this Section 3.1 shall apply to a sale of any 
membership interest in the General Partner to the same extent as such 
provisions apply to a sale of Units by the General Partner.

Article IV

Drag-Along Rights

    4.1 Drag-Along Rights. In the event the General Partner proposes to 
Transfer all of its General Partner Units for cash, in a single 
transaction or a series of related transactions, to a Person that is 
not an Affiliate of the General Partner, the General Partner shall have 
the right (the ``Drag-Along Right'') to cause the Class B Partner to 
sell all of its Class B Limited Partner Units to such Person on the 
same terms and conditions as the General Partner proposes to Transfer 
its General Partner Units (with the portion of the purchase price 
payable to the Class B Partner being the aggregate amount of the 
purchase price for all Units included in such sale multiplied by the 
Tax-Adjusted Residual Class B Partner Percentage). The General Partner 
may exercise its Drag-Along Right by giving written notice of such 
exercise (the ``Drag-Along Notice'') to the Class B Partner not fewer 
than ten (10) days prior to the consummation of the Transfer that is 
the subject of the Drag-Along Right. The Drag-Along Notice shall 
contain a copy of any definitive documentation pursuant to which

[[Page 11716]]

Transfer is to be made and will state the name and address of the 
purchaser and the anticipated closing date of such Transfer. Upon 
delivery of the Drag-Along Notice, the Class B Partner shall be 
obligated to Transfer and deliver its Class B Limited Partner Units on 
the terms and conditions applicable to the Transfer and shall use 
commercially reasonable efforts to cooperate in the Transfer and take 
all necessary actions to enter into appropriate Transfer or transaction 
documents. The Class B Partner's indemnification obligations under the 
transaction documents governing a Transfer pursuant to this Section 4.1 
shall be limited to the amount of any portion of the proceeds paid for 
the Class B Limited Partner Units sold in such transaction that is held 
in escrow for such purpose and not paid to the Class B Partner, such 
transaction documents shall not require the Class B Partner to make any 
representations other than those with respect to the Class B Partner's 
ownership of and its ability to Transfer the Class B Limited Partner 
Units to be sold in such transaction and any indemnification 
obligations shall be limited to breach of such representations only.

Article V

Put and Call Rights

    5.1 Put and Call Rights.
    (a) Class B Partner Put Right. Upon the cessation of the 
publication of The Charleston Daily Mail, the Class B Partner shall be 
required to sell to the General Partner (or an Affiliate or designee 
thereof) and the General Partner (or an Affiliate or designee thereof), 
shall be required, subject to the terms and conditions set forth in 
this Agreement, to purchase from the Class B Partner all, but not less 
than all, of the Class B Limited Partner Units. Additionally, at any 
time from and after the termination of the JOA by lapse of time or 
otherwise and/or dissolution and/or termination of the Joint Venture or 
upon the occurrence of any event which constitutes or results in a 
Change of Control (as defined below) of the Joint Venture, the Class B 
Partner shall have the right to sell to the General Partner (or an 
Affiliate or designee thereof) and the General Partner (or an Affiliate 
or designee thereof), shall be required, subject to the terms and 
conditions set forth in this Agreement, to purchase from the Class B 
Partner all, but not less than all, of the Class B Limited Partner 
Units. The obligation or right to sell and obligation to buy set forth 
in the preceding two sentences shall be referred to herein as the 
``Put''. With respect to the Put described in the second sentence of 
this Section 5.1(a), if the Class B Partner elects to exercise the Put, 
it shall send written notice thereof to the General Partner (the ``Put 
Notice)''. The General Partner's designation of an Affiliate or other 
designee to purchase the Class B Limited Partner Units in connection 
with the exercise of the Put will not relieve the General Partner of 
its obligations hereunder. For purposes of this Section, ``Change of 
Control'' means any event, transaction or occurrence as a result of 
which DGC ceases to control the General Partner, and ``control'' means 
the possession, direct or indirect, of the power to direct or cause the 
direction of the management and policies of a person, whether through 
the ownership of voting securities, by contract, or otherwise.
    (b) General Partner Call Right. At any time from and after the 
termination of the JOA by lapse of time or otherwise and/or the 
dissolution and/or termination of the Joint Venture, the General 
Partner (or an Affiliate or designee thereof) shall have the right to 
purchase from the Class B Partner, and the Class B Partner shall be 
required, subject to the terms and conditions set forth in this 
Agreement, to sell to the General Partner (or an Affiliate or designee 
thereof), all, but not less than all, of the Class B Limited Partner 
Units (such right to purchase, the ``Call''. If the General Partner 
elects to exercise the Call, it shall send written notice thereof to 
the Class B Partner (the ``Call Notice'').
    (c) Purchase Price. The purchase price to be paid to the Class B 
Partner upon the exercise of the Put or Call (the ``Put/Call Purchase 
Price'') shall be equal to (A) the amount that would be distributed to 
the Class B Partner under Section 7.3 of the Limited Partnership 
Agreement if the Limited Partnership were to sell its assets on the 
Put/Call Closing Date for the Fair Market Value of the Partnership and 
the income, gain, loss and deduction arising from such sale were 
allocated among the Partners in accordance with Section 5.2.3 of the 
Limited Partnership Agreement, but without giving effect to any 
allocation of income or gain attributable to the Tax Gross-Up Amount 
(as defined in the Limited Partnership Agreement), and the Limited 
Partnership were then liquidated in accordance with Article VII of the 
Limited Partnership Agreement on the Put/Call Closing Date, minus (B) 
the amount of any Unpaid Tax Liabilities or other outstanding 
liabilities of the Class B Partner (other than liabilities for Taxes 
and Tax Interest). The Fair Market Value of the Partnership shall be 
determined as of the Put/Call Closing Date by mutual agreement of the 
General Partner and the Class B Partner or by appraisals in accordance 
with the terms hereof. In the event the General Partner and the Class B 
Partner do not agree on the Fair Market Value of the Partnership within 
twenty days, then within fifteen days of the expiration of such twenty-
day period (or such longer period as the General Partner and the Class 
B Partner mutually agree), each of the General Partner and the Class B 
Partner shall select a nationally recognized appraiser with experience 
in the newspaper industry to prepare, using the methodology described 
in Exhibit A attached hereto, a written appraisal setting forth such 
appraiser's determination of the Fair Market Value of the Partnership. 
If either the General Partner and the Class B Partner fail to so 
appoint an appraiser within such fifteen-day period, then its right to 
do so shall lapse and the appraisal made by the one appraiser who is 
timely appointed shall be the Fair Market Value of the Partnership. If 
two appraisals are made, unless the higher of the two appraisals is 
more than 110% more than the lower appraisal, the Fair Market Value of 
the Partnership will be the average of the two appraisals, and if the 
higher of the two appraisals is more than 110% more than the lower of 
the appraisals, the General Partner and the Class B Partner shall 
jointly select a third appraiser, and the Fair Market Value will be the 
average of the two of the three appraisals that are closest together in 
amount. All appraisals will be made within twenty days of appointment 
of such appraiser and must separately identify the amount of each of 
the items described in clauses (i) through (vi) of Section 5.2.3(b) of 
the Limited Partnership Agreement. A written notice of the results of 
each such appraisal shall be given to the General Partner and the Class 
B Partner. The General Partner and the Class B Partner will each pay 
the fees of the appraiser selected by it, and the General Partner and 
the Class B Partner will share equally the fees of the third appraiser, 
if any. The General Partner and each Member will cooperate fully with 
each appraiser's attempt to determine the Fair Market Value of the 
Partnership.
    (d) Closing. The closing of the transaction pursuant to the 
exercise of the Put or Call, as the case may be, shall take place at 
the principal offices of the Limited Partnership no later than the 
thirtieth (30th) day following the final determination of the Put/Call 
Purchase Price; provided that such date shall be extended as necessary 
and for so long as

[[Page 11717]]

necessary to permit the parties to comply with applicable law to obtain 
all regulatory approvals, if any, necessary to consummate such 
transaction (such 30th day, as it may be extended, the ``Put/Call 
Closing Date''). The General Partner shall be responsible (solely at 
the General Partner's expense) for obtaining all approvals and consents 
necessary to permit the General Partner and Class B Partner to 
consummate such transactions (other than any such approvals or consents 
that are unique to the Class B Partner). Each party agrees to use its 
commercially reasonable efforts to cooperate in obtaining any 
regulatory approvals necessary to consummate such transaction as 
promptly as possible. If the closing of the transaction pursuant to the 
exercise of the Put has not occurred by the tenth (10th) day after the 
Put/Call Closing Date, the General Partner shall pay to the Class B 
Partner at the closing interest in an amount equal to 14.5% of the Put/
Call Purchase Price accruing daily on the basis of a 360-day year and 
compounding at the end of each 90-day period after the Put/Call Closing 
Date. At the closing of the Put or Call, as the case may be, the 
General Partner shall pay the Put/Call Purchase Price and any interest 
accrued thereon to the Class B Partner in cash or immediately available 
funds and the Class B Partner shall deliver instruments, in form and 
substance reasonably satisfactory to the General Partner, assigning all 
of its interest in the Class B Limited Partner Units to the General 
Partner free and clear of all liens, claims and encumbrances of any 
nature whatsoever (other than those arising under this Agreement, the 
Limited Partnership Agreement or the JOA or in favor of any lender(s) 
to the Limited Partnership or any of its Subsidiaries) against payment 
of the Put/Call Purchase Price therefor.

Article VI

Preemptive Rights

    6.1 Class B Partner Preemptive Rights. Prior to issuing any New 
Units to any Person (``New Unit Offerees''), the Limited Partnership 
shall offer (the ``New Unit Offer'') the Class B Partner an opportunity 
to purchase all or a portion of its Pro Rata Portion of such New Units 
upon the same terms and conditions offered to the New Unit Offerees, 
The Limited Partnership shall make such New Unit Offer by providing the 
Class B Partner with notice (the ``New Unit Notice'') setting forth: 
(i) The Class B Partner's Pro Rata Portion of such New Units; (ii) the 
consideration to be paid for each of the New Units; and (iii) all other 
material terms of such New Units. The Class B Partner may elect to 
accept the New Unit Offer by delivering written notice of its 
acceptance to the Limited Partnership within thirty (30) days after 
delivery of the New Unit Notice (the ``Election Notice'') setting forth 
the number of New Units the Class B Partner wishes to purchase. If the 
Class B Partner elects to purchase all or a portion of its Pro Rata 
Portion of such New Units, the sale thereof shall be consummated on the 
closing date applicable to all New Unit Offerees. In the event the 
Class B Partner elects not to exercise its right pursuant to this 
Section 6.1, fails to timely give an Election Notice or fails to 
purchase the New Units allocated to it at the closing designated 
therefor by the Limited Partnership, the Class B Partner shall cease to 
have any rights hereunder with respect to such New Unit Offer, provided 
that if there is any material change to the terms of the New Unit Offer 
following such non-exercise or failure, the Class B Partner's rights 
under this Section 6.1 will be reinstated.
    6.2 Issuance of New Units. In the event the Limited Partnership 
issues any New Units for no consideration or for consideration which is 
less than the fair market value of such New Units at the time of sale 
(as mutually determined by the General Partner and the Class B Partner 
or if the General Partner and Class B Partner cannot agree, pursuant to 
an appraisal process similar to the process set forth in Section 5.1(c) 
and at the Limited Partnership's expense) and the New Units are 
entitled to a portion of the net equity value of the Limited 
Partnership on liquidation and/or distributions under the Limited 
Partnership Agreement, then the Limited Partnership Agreement shall be 
amended to change the terms of the Class B Limited Partner Units so 
that, after giving effect to such amendment, the value of the net 
equity of the Limited Partnership and distributions by the Limited 
Partnership to which the Class B Partner is entitled by virtue of its 
ownership of Class B Limited Partner Units is the same as the value of 
the net equity of the Limited Partnership and distributions by the 
Limited Partnership to which the Class B Partner was entitled prior to 
giving effect to such issuance and such amendment (the intention of the 
parties being such amendment will afford the Class B Partner a benefit 
of the type afforded by a customary weighted-average antidilution 
adjustment). The parties will act in good faith to agree upon and 
execute such amendment to the Limited Partnership Agreement, which 
shall also provide for additional distributions to be paid to the Class 
B Partner on the date such amendment becomes effective in order to give 
effect to the terms of such amendment with respect to distributions (if 
any) made by the Limited Partnership after such issuance but prior to 
such amendment becoming effective.
    6.3 Termination of Preemptive Rights. The Class B Partner's 
preemptive rights pursuant to this Article VI shall terminate upon the 
completion of a successful underwritten public offering by the Limited 
Partnership (or any corporate successor thereto).
    6.4 Application of Article VI to Joint Venture. The provisions of 
this Article VI shall apply mutatis mutandis if the Joint Venture or 
any other Subsidiary of the Limited Partnership issues any new equity 
interests (other than any such equity interest issued to the Limited 
Partnership or another Subsidiary or the Limited Partnership).

Article VII

DGHC Board Representation

    7.1 Class B Partner Board Representation. The Class B Partner 
(together with any other Class B Limited Partners) shall have the right 
to appoint two (2) members to the board of managers of DGHC or such 
greater number as required by Section 5(b)(ii) of the Operating 
Agreement of DGHC (the ``Class B Partner Board Right''), which board of 
managers shall be governed by the Limited Partnership Agreement and the 
Operating Agreement of DGHC attached hereto as Exhibit B. The board of 
managers shall consist of up to five individual managers and in no 
event may the board of managers consist of more than five managers 
without the consent of the managers appointed by the Class B Partner(s) 
pursuant to Section 5(b) of the Operating Agreement of DGHC; provided, 
however, that in no event may the board of managers consist of more 
than five managers unless not fewer than forty percent (40%) of the 
managers are appointed by the Class B Partner(s) pursuant to Section 
5(b) of the Operating Agreement of DGHC. If there is more than one 
Class B Limited Partner, then the Class B Partner Board Right will be 
vested solely in the Class B Limited Partner that supervises editorial 
and reportorial functions of the The Charleston Daily Mail pursuant to 
Section 9.1 of the Limited Partnership Agreement. In no event may the 
Class B Limited Partner(s) appoint as members to the board of managers 
of DGHC any person who is, at the time of his or her appointment, an 
employee of the Joint Venture, DGC, DCHC, the Limited

[[Page 11718]]

Partnership or Daily Gazette Publishing Company, LLC.

Article VIII

Miscellaneous

    8.1 Registration Rights. The parties agree that prior to the 
consummation of any public offering of the Limited Partnership (or any 
corporate successor thereto), the parties will agree on a registration 
rights agreement which will include one demand registration and an 
unlimited number of piggyback registrations with respect to the Class B 
Partner's securities of the Limited Partnership (or any corporate 
successor thereto), in each case, at the Limited Partnership's (or any 
corporate successor thereto's) expense, containing customary terms and 
conditions and otherwise in form and substance reasonably acceptable to 
the parties.
    8.2 Assignment. This Agreement shall be binding upon and inure only 
to the benefit of and be enforceable against the parties hereto and 
their respective permitted successors and assigns. Nothing in this 
Agreement, express or implied, is intended to confer upon any Person, 
other than the parties hereto and their respective permitted successors 
and assigns, any rights or remedies under or by reason of this 
Agreement. The Class B Partner may assign this Agreement and such 
party's rights hereunder to any Permitted Transferee hereunder. The 
General Partner may assign this Agreement and its rights hereunder to 
any of its Affiliates, to a successor General Partner or as collateral 
for a loan or other financing; provided that no such assignment shall 
release the General Partner from any obligation hereunder.
    8.3 Amendment. This Agreement may not be amended except by a 
written instrument signed by the General Partner, the Limited 
Partnership and the Class B Partner.
    8.4 Governing Law. This Agreement shall be governed by and 
construed in accordance with the laws of the State of West Virginia, 
without regard to its conflicts of law principles.
    8.5 Notices. All notices and other communications given or made 
pursuant hereto shall be in writing and shall be deemed to have been 
duly given or made as of the date delivered if delivered by hand, by 
telecopier device or by overnight courier service to the parties at the 
following addresses:
    If to General Partner:

c/o Daily Gazette Company, 1001 Virginia Street, East, Charleston, WV 
25301. Attn: Ms. Elizabeth E. Chilton, President, Facsimile: (304) 348-
5180; and Attn: Mr. Norman Watts Shumate III, Facsimile: (304) 348-
1795.

    With A Copy to:

Edmondson + Blumenthal PLLC, 12 Cadillac Drive, Suite 210, Brentwood, 
TN 37027. Attn: Steven E. Blumenthal Facsimile: (615) 296-4600.

    If to Class B Partner:

[insert notice information]

    8.6 Severability. If any term or other provision of this Agreement 
is invalid, illegal or incapable of being enforced by any rule of law 
or public policy, all other conditions and provisions of this Agreement 
shall nevertheless remain in full force and effect so long as the 
economic or legal substance of the transactions contemplated hereby is 
not affected in any manner adverse to any party. Upon such 
determination that any term or other provision is invalid, illegal or 
incapable of being enforced, the parties hereto shall negotiate in good 
faith to modify this Agreement so as to effect the original intent of 
the parties as closely as possible in an acceptable manner to the end 
that transactions contemplated hereby are fulfilled to the greatest 
extent possible.
    8.7 Counterparts. This Agreement may be executed in one or more 
counterparts, each of which shall be an original, but all of which 
taken together shall constitute one and the same agreement.
    8.8 Headings. The section headings used in this Agreement are for 
reference purposes only and shall not affect the meaning or 
interpretation of any term or provision of this Agreement.
    8.9 Integration. This Agreement (together with the Limited 
Partnership Agreement and the JOA) represents the entire understanding 
of the parties with reference to the matters set forth herein. This 
Agreement supersedes all prior negotiations, discussions, 
correspondence, communications and prior agreements among the parties 
relating to the subject matter herein.

    IN WITNESS WHEREOF, the parties have caused this Put/Call Agreement 
to be duly executed as of the date first above written.

DAILY GAZETTE HOLDING COMPANY, LLC
By: Daily Gazette Company, its sole member

By:

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

CHARLESTON NEWSPAPERS HOLDINGS, L.P.

By: Daily Gazette Holding Company, LLC, its general partner
By: Daily Gazette Company, its sole member

By:

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

[insert name of Class B Partner]

By:

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

DAILY GAZETTE COMPANY (solely for the purposes of Article VII)

By:

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Exhibit A

Appraisal Methodology

    In determining the Fair Market Value, the appraiser will use the 
following methodology:
    The appraiser shall determine the Fair Market Value of the 
Partnership based on the going concern value of the Partnership as of 
the relevant date. In determining the Partnership's going concern 
value, the appraiser (i) shall assume that the value of any business is 
the cash price at which the assets of such business as a going concern 
would change hands between a willing buyer and a willing seller 
(neither acting under compulsion) in an arms-length transaction, on 
terms and subject to conditions and costs applicable in the newspaper 
publishing industry, (ii) shall assume that all assets used in the 
operation of the business of the Partnership and its Subsidiaries, 
whether owned by or licensed to the Partnership or any of its 
Subsidiaries (and all other assets of any Affiliate of the Partnership 
that are used by the Partnership or any of its Subsidiaries), were 
entirely owned directly by the Partnership, and (iii) shall not take 
into account expenditures in respect of any management agreements 
entered into by the Joint Venture.

Exhibit B

Operating Agreement of DGHC

    NEITHER THIS WARRANT NOR THE CLASS B LIMITED PARTNER UNITS TO BE 
ISSUED UPON EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES 
ACT OF 1933, AS AMENDED (THE ``SECURITIES ACT''). NO SALE OR OTHER 
DISPOSITION OF THIS WARRANT OR THE CLASS B LIMITED PARTNER UNITS 
ISSUABLE UPON EXERCISE HEREOF MAY BE MADE WITHOUT AN EFFECTIVE 
REGISTRATION STATEMENT RELATED THERETO OR PURSUANT TO AN EXEMPTION FROM 
REGISTRATION UNDER THE SECURITIES ACT. THIS WARRANT IS

[[Page 11719]]

ALSO SUBJECT TO CERTAIN ADDITIONAL TRANSFER RESTRICTIONS PROVIDED FOR 
HEREIN.

Charleston Newspapers Holdings, L.P.

Warrant To Purchase Class B Limited Partner Units Initially 
Constituting a 20% Percentage Interest

    This certifies that Charleston Publishing Company, a Delaware 
corporation (``Holder''), is entitled to subscribe for and purchase 
from Charleston Newspapers Holdings, L.P., a Delaware limited 
partnership (hereinafter, the ``Partnership''), up to an aggregate 
number of duly authorized, validly issued, fully paid and nonassessable 
Class B Limited Partner Units equal to the Warrant Units Amount, at a 
purchase price per Class B Limited Partner Unit equal to the Warrant 
Price (as defined below), subject to the provisions and upon the terms 
and conditions hereinafter set forth. Capitalized terms used herein and 
not otherwise defined herein shall have the meanings assigned to them 
in that certain Amended and Restated Limited Partnership Agreement for 
Charleston Newspapers Holdings, L.P. by and among Daily Gazette Holding 
Company, LLC, a Delaware limited liability company (``DGHC''), and 
Charleston Publishing Company (as it may be amended from time to time, 
the ``Partnership Agreement'').
    The purchase price of each Class B Limited Partner Unit shall be 
the price per Class B Limited Partner Unit determined in accordance 
with Exhibit A attached hereto and set forth in an addendum to this 
Warrant executed by Holder and the Partnership (the ``Warrant Price''). 
The maximum number of Class B Limited Partner Units to be issued upon 
exercise of this Warrant (as adjusted from time to time, the ``Warrant 
Units Amount'') shall be equal to the number of Class B Limited Partner 
Units that constitute a twenty percent (20%) Percentage Interest in the 
Partnership (subject to adjustment as provided below (as adjusted from 
time to time, the ``Warrant Percentage Amount'') as of the date of 
exercise. The term ``Class B Units'' shall mean, unless the context 
otherwise requires, the Class B Limited Partner Units and other 
property at the time receivable upon the exercise of this Warrant. The 
term ``Warrant(s)'' as used herein shall include this Warrant and any 
warrant(s) delivered in substitution or exchange therefor as provided 
herein.
Method of Exercise; Payment
    The purchase right represented by this Warrant may be exercised by 
Holder, in whole or in part, by:

The surrender of this Warrant at the principal office of the 
Partnership located at c/o Daily Gazette Company, 1001 Virginia Street, 
East, Charleston, WV 25301, Attn: Ms. Elizabeth Chilton, President, 
together with a written notice of Holder's election to exercise this 
Warrant, which notice shall specify the number of Class B Units (or the 
Percentage Interest of the Partnership) to be purchased;
the payment to the Partnership, by wire transfer of immediately 
available funds to an account designated by the Partnership, of an 
amount equal to the aggregate Warrant Price of the Class B Units being 
purchased;
if Holder is not already a party to the Partnership Agreement, the 
execution and delivery by Holder of an amendment to the Partnership 
Agreement (in a form prepared by Holder and reasonably acceptable to 
the General Partner) pursuant to which Holder will become a party to 
the Partnership as a Class B Limited Partner and agree to be bound by 
the terms and conditions of the Partnership Agreement (a ``Partnership 
Amendment''); and
if Holder is not already a party to a put/call agreement in 
substantially the form attached to this Warrant as Exhibit B (a ``Put/
Call Agreement''), the execution and delivery by Holder of a Put/Call 
Agreement.

    Class B Units purchased pursuant to this Warrant shall be 
uncertificated. Unless this Warrant has been fully exercised or has 
expired, a new Warrant representing the Class B Units with respect to 
which this Warrant shall not then have been exercised shall be issued 
to Holder as soon as practicable after each exercise of this Warrant, 
and in any event within thirty (30) days after the surrender of this 
Warrant. Each exercise of this Warrant shall be deemed to have been 
effected immediately prior to the close of business on the date on 
which items (a) and (b) above have been satisfied, and the person 
entitled to receive the Class B Units issuable upon such exercise shall 
be treated for all purposes as the holder of such Class B Units of 
record as of the close of business on such date.
Certain Agreements
    Upon surrender of this Warrant pursuant to Section 1:
    a. The Partnership will cause the General Partner to immediately 
execute and deliver to Holder the Partnership Amendment executed and 
delivered by Holder pursuant to Section 1(c) above; and
    b. The Partnership will (and the Partnership will cause the General 
Partner to) immediately execute and deliver to Holder the Put/Call 
Agreement executed and delivered by Holder pursuant to Section 1(d) 
above.
Covenant of Non-Impairment
    The Partnership will not, by amendment of the Partnership Agreement 
or through reorganization, consolidation, merger, dissolution, issue or 
sale of Partnership Interests or other securities, sale of assets or 
any other voluntary action, avoid or seek to avoid the observance or 
performance of any of the terms of this Warrant, but will at all times 
in good faith assist in the carrying out of all such terms and in the 
taking of all such action as may be necessary or appropriate in order 
to protect the rights of Holder against dilution or other impairment.
Adjustment of Percentage Interest
    At the end of each of the 2010, 2011, 2012, 2013 and 2014 fiscal 
years of the Partnership, the Warrant Percentage Amount shall be 
subject to adjustment as follows:
    a. If the Daily Mail's percentage share of the Combined Circulation 
for the most-recently ended 12-month audit period exceeds the Daily 
Mail's percentage share for the immediately preceding 12-month audit 
period by more than one (1) percentage point, then the Warrant 
Percentage Amount will increase one (1) percentage point.
    b. If the Daily Mail's percentage share of the Combined Circulation 
for the most-recently ended 12-month audit period is more than one (1) 
percentage point lower than the Daily Mail's percentage share for the 
immediately preceding 12-month audit period, then the Warrant 
Percentage Amount will decrease one (1) percentage point.
    For purposes of determining adjustments to be made pursuant to this 
Section 3, the terms set forth below shall have the meanings assigned 
to them below:
    ``Daily Mail'': The Charleston Daily Mail.
    ``Charleston Gazette'': The Charleston Gazette.
    ``Daily Print Circulation'': The average weekday paid print 
circulation of a newspaper as stated in the most recent 12-month audit 
conducted by the Audit Bureau of Circulations or other reputable third 
party media auditor.
    ``Combined Circulation'': The sum of the Daily Print Circulation of 
the Daily Mail and the Charleston Gazette.

[[Page 11720]]

Term; Termination
    This Warrant may be exercised in whole or in part at any time and 
from time to time, on or after [insert date] and shall terminate three 
(3) years thereafter. Notwithstanding the foregoing, this Warrant shall 
terminate immediately upon the cessation of the publication of The 
Charleston Daily Mail.
No Partner Rights
    Holder shall not, solely by virtue hereof, be entitled to any 
rights of a partner of the Partnership prior to any exercise of this 
Warrant, and nothing contained in this Warrant shall be construed as 
imposing any obligation on Holder to purchase any Partnership Interest 
or as imposing any liabilities on Holder as a partner of the 
Partnership (prior to any exercise of this Warrant), whether such 
obligation or liabilities are asserted by the Partnership or by 
creditors of the Partnership.
Transfer
    This Warrant may not be sold, assigned, disposed, hypothecated, 
pledged or otherwise transferred in whole or in part; provided, 
however, (x) Holder may assign this Warrant to any of Holder's 
Affiliates, provided that such Affiliate agrees to be bound by the 
provisions of this Warrant and (y) Holder may assign its rights under 
this Warrant as collateral security to persons or entities extending 
financing to Holder or any of its Affiliates (and such persons or 
entities may at any time foreclose on such security interest). The term 
``Holder'' as used herein shall include any transferee to whom this 
Warrant has been transferred in accordance with this Section 7. Any 
transfer or attempted transfer in violation of this Section 7 shall be 
null and void. The term ``Affiliate'' as used herein shall mean, with 
respect to any person or entity, any other person or entity directly or 
indirectly controlling or controlled by such person or entity or under 
direct or indirect common control with such person or entity.
Securities Act of 1933
    In addition to (and not in limitation of) the restrictions set 
forth in Section 6 above, Holder, by acceptance hereof, agrees that, 
absent an effective registration statement under the Securities Act of 
1933, as amended (the ``Securities Act''), covering the disposition of 
the Warrant or Class B Units issued or issuable upon exercise hereof, 
Holder will not sell or transfer any or all of such Warrant or Class B 
Units unless such sale or transfer will be exempt from the registration 
and prospectus delivery requirements of the Securities Act and an 
opinion of counsel reasonably satisfactory to the Partnership regarding 
such exemption is delivered to the Partnership. Holder consents to the 
Partnership's making a notation on its records in order to implement 
such restriction on transferability. Holder represents that it is an 
``accredited investor'' within the meaning of Rule 501 under the 
Securities Act.
Remedies
    The Partnership stipulates that the remedies at law of Holder, in 
the event of any default or threatened default by the Partnership in 
the performance of or compliance with any of the terms of this Warrant, 
are not and will not be adequate and that, to the fullest extent 
permitted by law, such terms may be specifically enforced by a decree 
for the specific performance of any agreement contained herein or by an 
injunction against a violation of any of the terms hereof or otherwise.
Loss or Mutilation
    Upon receipt by the Partnership of evidence satisfactory to it (in 
the exercise of reasonable discretion) of the ownership of and the 
loss, theft, destruction or mutilation of this Warrant and (in the case 
of loss, theft, or destruction) of indemnity satisfactory to it (in the 
exercise of reasonable discretion), and (in the case of mutilation) 
upon surrender and cancellation thereof, the Partnership will execute 
and deliver in lieu hereof a new Warrant of like tenor.
Successors
    All the covenants and provisions of this Warrant shall bind and 
inure to the benefit of Holder and the Partnership and their respective 
successors and permitted assigns.
Notices
    All notices and other communications given pursuant to this Warrant 
shall be in writing and shall be deemed to have been given when 
personally delivered or when mailed by prepaid registered, certified or 
express mail, return receipt requested. Notices should be addressed as 
follows:
    a. If to Holder, then to:

Affiliated Media, Inc., 101 W. Colfax Avenue, Suite 1100, Denver, CO 
80202. Attention: Joseph J. Lodovic, IV, President.

    With a copy (which shall not constitute notice) to:

Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 
10004. Attention: James Modlin.

    b. If to the Partnership, then to:

Daily Gazette Company, 1001 Virginia Street, East, Charleston, WV 
25301. Attention: Elizabeth E. Chilton, President and Norman Watts 
Shumate III.

    With a copy (which shall not constitute notice) to:

Edmondson + Blumenthal PLLC, 12 Cadillac Drive, Suite 210, Brentwood, 
TN 37027. Attention: Steven E. Blumenthal.

    Such addresses for notices may be changed by any party by written 
notice to the other party pursuant to this Section 12.
Amendment
    This Warrant may be amended only by an agreement in writing signed 
by the Partnership and Holder.
Construction of Warrant
    Captions contained in this Warrant are inserted as a matter of 
convenience and in no way define the scope of this Warrant or the 
intent of any provision hereof. None of the provisions of this Warrant 
shall be for the benefit of or be enforceable by any creditor of the 
Partnership, any Partner or Holder. This Warrant, together with the 
exhibits attached hereto and the Partnership Agreement and the JOA, 
constitute the entire agreement between the parties hereto pertaining 
to the subject matter hereof and supersedes all prior agreements (oral 
or written) and understandings pertaining thereto. In the event of any 
conflict between this Warrant and any other agreement, this Warrant 
shall control. The invalidity of any article, section, subsection, 
clause or provision of this Warrant shall not affect the validity of 
the remaining articles, sections, subsections, clauses or provisions 
hereof.
Governing Law
    This Warrant and the rights and obligations of the parties hereto 
shall be governed by and construed in accordance with the laws of the 
State of Delaware, without regard to its conflicts of law principles.

Dated as of [insert date]

Charleston Newspapers Holdings, L.P.

By: Daily Gazette Company, General Partner
By:--------------------------------------------------------------------

Elizabeth E. Chilton,
President.

Exhibit A

Methodology for Determining Price per Class B Limited Partner Unit

    The Warrant Price will be the appraised value of a Class B Limited

[[Page 11721]]

Partner Unit as of the date of this Warrant, as determined promptly 
following the execution and delivery of this Warrant by a nationally-
recognized appraiser with experience in the newspaper industry that is 
reasonably acceptable to both Daily Gazette Company and the Holder. 
Each of the following appraisers are hereby deemed to be ``reasonably 
acceptable'' to both Daily Gazette Company and the Holder:

Dirks, Van Essen & Murray

    In determining the price per Class B Limited Partner Unit, the 
appraiser will use the following methodology:
    The appraiser shall determine the fair market value of the 
Partnership based on the going concern value of the Partnership as of 
the relevant date, with the following adjustments. In determining the 
Partnership's going concern value, the appraiser (i) shall assume that 
the value of any business is the cash price at which the assets of such 
business as a going concern would change hands between a willing buyer 
and a willing seller (neither acting under compulsion) in an arms-
length transaction, on terms and subject to conditions and costs 
applicable in the newspaper publishing industry, (ii) shall assume that 
all assets used in the operation of the business of the Partnership and 
its Subsidiaries, whether owned by or licensed to the Partnership or 
any of its Subsidiaries (and all other assets of any Affiliate of the 
Partnership that are used by the Partnership or any of its 
Subsidiaries), were entirely owned directly by the Partnership, and 
(iii) shall not take into account expenditures in respect of any 
management agreements entered into by the Joint Venture. The Warrant 
Price with respect to any Class B Limited Partner Unit shall be an 
amount equal to (x) the fair market value of the Partnership as of the 
date of this Warrant (as determined in accordance with the preceding 
sentence) multiplied by (y) the Percentage Interest in the Partnership 
represented by such Class B Limited Partner Unit as of the date of 
exercise of the Warrant.

Exhibit B

Form of Class B Units Put/Call Agreement

[Attached]

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF WEST VIRGINIA

CHARLESTON DIVISION

    UNITED STATES OF AMERICA, Plaintiff, v. DAILY GAZETTE COMPANY, and 
MEDIANEWS GROUP, INC., Defendants.
    Civil Action No. 2:07-0329
    Judge Copenhaver
    Magistrate Judge Stanley
    Filed: January 20, 2010

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    The United States brought this lawsuit against Daily Gazette 
Company (``Gazette Company'') and MediaNews Group, Inc. (``MediaNews'') 
on May 22, 2007, challenging a series of agreements entered into by the 
defendants on May 7, 2004 (the ``May 2004 transactions''). The 
Complaint alleges that these transactions violated Section 7 of the 
Clayton Act, 15 U.S.C. 18, and Sections 1 and 2 of the Sherman Act, 15 
U.S.C. 1 & 2, by consolidating ownership and control of the only two 
local daily newspapers in Charleston, West Virginia, under Gazette 
Company and eliminating competition between them.
    On January 20, 2010, the United States filed a proposed Final 
Judgment, which is described in more detail below. The United States 
and Defendants have stipulated that the proposed Final Judgment may be 
entered after compliance with the APPA, unless the United States 
withdraws its consent. Entry of the proposed Final Judgment would 
terminate this action, except that this Court would retain jurisdiction 
to construe, modify, and enforce the proposed Final Judgment and to 
punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants

    Defendant Gazette Company is a privately-held corporation based in 
Charleston, West Virginia. It has for many years owned and operated the 
Charleston Gazette (``Gazette''), a local daily newspaper founded in 
1873 and circulated throughout a large portion of the State of West 
Virginia. MediaNews, now known as Affiliated Media, Inc., is a 
privately-held corporation with its principal place of business in 
Denver, Colorado. It owns and publishes over 50 daily newspapers in 
various markets throughout the United States. In 1998, MediaNews 
acquired the Charleston Daily Mail (``Daily Mail''), a local daily 
newspaper in Charleston, West Virginia, founded in 1880.

B. The Pre-2004 Joint Operating Arrangement

    For many years after their founding, the Gazette and Daily Mail 
operated completely independently. In 1958, the then-owners of the two 
newspapers entered into a joint operating agreement. The agreement 
created a partnership, which for most of its existence went by the name 
Charleston Newspapers. Charleston Newspapers was responsible for 
printing, distribution, and advertising and subscription sales for both 
newspapers. Each newspaper owner held a 50% interest in the venture and 
all profits, losses, and capital costs were shared equally. At no time, 
however, did the owners combine their news operations, which continued 
to operate independently. In addition, each newspaper remained 
separately owned outside the joint venture. Each owner retained 
exclusive rights to the use of the names of their respective 
newspapers, and all goodwill, subscriber lists, subscriber 
relationships, and other intangible assets associated with their 
newspapers.
    The two owners of Charleston Newspapers had an equal say in the 
management of the venture, and they jointly appointed a general manager 
who was responsible to both owners. Each owner appointed half of the 
representatives to a management committee that approved all significant 
decisions, including annual budgets and advertising and subscription 
rates. Each owner separately hired and supervised a publisher for its 
respective newspaper. The publishers oversaw the day-to-day business 
and news operations of each newspaper and reported directly to their 
respective newspaper's owner. The publishers exerted a substantial 
amount of control over the general manager and other employees of 
Charleston Newspapers and had the ability to block Charleston 
Newspapers from taking actions of which they disapproved.
    In 1970, Congress enacted the Newspaper Preservation Act (``NPA''), 
15 U.S.C. 1801, et seq., which provided qualifying joint operating 
arrangements then in effect with limited antitrust immunity for certain 
specified business activities, as long as they continued to meet the 
requirements set forth in the NPA. Among these requirements was that 
the newspapers in a joint operating arrangement remain separately owned 
or controlled, that they maintain separate newsroom staffs, and that 
their editorial policies be ``independently

[[Page 11722]]

determined.'' 15 U.S.C. 1802(2). Since 1970, Charleston Newspapers has 
held itself out as a qualifying newspaper joint operating arrangement 
and has claimed the antitrust immunity conferred by the NPA.
    Despite the formation of Charleston Newspapers, the two newspapers 
remained vigorous competitors for readers. Each newspaper sought to 
capture readers by breaking stories first, finding stories that the 
other newspaper did not have, covering local news with greater depth 
and accuracy, and offering the most attractive mix of news, features, 
editorials, and other content. The Gazette and the Daily Mail sought to 
make their products more appealing by introducing new features, 
increasing the quantity of coverage, redesigning the appearance of 
their newspapers, competing to hire the best newsroom talent available, 
and taking numerous other steps to gain a competitive edge. Reporters 
and editors from each newspaper monitored the other on a daily basis 
and reacted directly to news coverage appearing in the competing 
newspaper.
    Although the two newspaper owners were in a business partnership, 
they retained independent economic incentives. Each owner had the 
incentive to maximize the value of its own newspaper assets, which at 
all times remained under separate ownership outside the joint operating 
arrangement. This incentive existed for several reasons. First, each 
owner had an interest in preserving the value of its newspaper assets 
in case it wished to sell them in the future (either during the term of 
the joint operating arrangement or after its expiration). If an owner 
allowed its newspaper's circulation numbers and product quality to 
deteriorate, the effect would be to shorten that newspaper's life span, 
damage the value of its franchise, and deter potential buyers. Second, 
each owner wanted its respective newspaper to contribute to the success 
of Charleston Newspapers in order to maintain a strong bargaining 
position when the joint operating contract was renegotiated. 
Renegotiations of newspaper joint operating contracts occur on a 
regular basis, often driven by capital investments or other major 
strategic decisions, and frequently involve changes to the distribution 
of profit shares or other key contract terms. Owning a declining paper 
might result in a reduced share of the profits or other unfavorable 
terms for that owner. Third, the owners had conflicting interests 
regarding the termination or renewal of the joint operating 
arrangement. The Daily Mail, as the smaller-circulation newspaper in 
the afternoon position, wanted to maintain a high enough share of 
circulation credibly to threaten to continue competing when the joint 
operating arrangement ended, and to justify extending the termination 
date of the agreement so that it could continue to share in the profits 
of the venture. The Gazette, as the larger-circulation newspaper in the 
morning position, had the incentive to increase its circulation share 
to accelerate the demise of the Daily Mail and become the sole survivor 
in the market as soon as possible. Finally, if the joint operating 
arrangement were to terminate, the governing contract specified that 
the jointly-owned property would be divided to allow the owners to 
resume their status as independent competitors. The possibility that 
such competition could resume provided each owner with an incentive to 
keep its newspaper strong and maximize the value of its intellectual 
property.
    The newspaper owners acted on these incentives in their management 
of Charleston Newspapers. For example, each owner actively sought to 
protect and increase the circulation of its respective newspaper rather 
than seeking solely to achieve the most profitable combined 
circulation. Each owner insisted that Charleston Newspapers treat both 
newspapers equally with respect to circulation sales and promotion 
efforts and regularly monitored Charleston Newspapers to ensure that 
managers were not favoring one paper over the other. Each owner pushed 
to expand home delivery routes into new areas and to increase the level 
of discounting to boost circulation for its respective newspaper. Each 
owner insisted that any new discount or promotional incentive launched 
for the other's newspaper be applied to its newspaper as well. This 
quest for additional circulation, and the policy of treating the two 
newspapers equally in circulation sales efforts, led to newspaper 
subscribers receiving higher levels of discounts than they would likely 
have received had Charleston Newspapers been controlled by one owner. 
In addition, each owner sought to maintain a large news staff, a 
substantial newsroom budget, and generous newshole (the amount of 
newspaper space devoted to news content as opposed to advertising) to 
allow it to better compete with the other newspaper for readership. 
Each owner also insisted on retaining the power to set its newsroom's 
staffing and compensation levels. This competitive drive led the owners 
to spend far more on the newsrooms in Charleston than newspaper owners 
in comparably-sized newspaper markets typically do.
    Each owner took affirmative steps to preserve its competitive 
position and the long-term value of its assets. Each regularly blocked 
certain proposals that would have saved money for Charleston Newspapers 
because one owner believed that the proposal would provide the rival 
newspaper with a competitive advantage. Moreover, although each owner 
had the power to make cuts to its own newspaper's staff, newshole, 
budget, subscription discounts, or circulation area without obtaining 
the approval of the other owner, neither owner did so--even when such 
cuts clearly would have increased the profits of the venture--out of 
concern over being at a competitive disadvantage to the other 
newspaper. Neither owner was willing to sacrifice the value of its 
assets unless the other owner did the same. These actions taken by the 
owners in pursuit of their separate economic interests prevented 
Charleston Newspaper from achieving monopoly levels of output or 
profits.
    In short, the competition between the Gazette and the Daily Mail 
benefitted readers by giving them a choice between two high-quality 
local newspapers with unique content at lower prices than would have 
prevailed if there had been one newspaper owner in this market. 
Advertisers likewise benefitted by having access to two unique sets of 
readers at prices that were lower than in comparable single-owner 
markets.

C. The May 2004 Transactions

    At the end of 2003, MediaNews arranged to sell the Daily Mail and 
its 50% interest in Charleston Newspapers to an experienced newspaper 
operator for $55 million. At the time, Charleston Newspapers was 
earning substantial profits, and the Daily Mail was financially healthy 
and stable. The joint operating arrangement between MediaNews and 
Gazette Company allowed each partner the right of first refusal to 
match any third-party offer to buy one of the newspapers. Rather than 
allow the new buyer to take over the Daily Mail and continue the 
competition that had prevailed for decades, Gazette Company decided to 
exercise its right of first refusal and gain control of both 
newspapers.
    Several months earlier, anticipating that the opportunity to 
exercise its right of first refusal might arise, Gazette Company began 
contacting lenders to secure the necessary financing. As the Complaint 
alleges, during this time Gazette Company developed a plan to shut down 
the Daily Mail and become the publisher of the sole remaining

[[Page 11723]]

newspaper in Charleston. Gazette Company created a series of business 
plans, financial projections, and other documents showing that it would 
cease publishing the Daily Mail by no later than the end of 2007. The 
plans called for the rapid reduction of the Daily Mail's circulation 
and its newsroom staff and budget until, in 2007, the newspaper would 
no longer be economically viable. At that point, Gazette Company 
believed it would be able to justify the closure of the Daily Mail 
under the NPA to the Department of Justice. In short, Gazette Company 
planned to deliberately transform a financially healthy and stable 
Daily Mail into a failing newspaper and close it far earlier than the 
market would otherwise have dictated. According to its internal 
projections, Gazette Company calculated that it would be better off 
financially by closing the Daily Mail as soon as possible. By switching 
a critical mass of Daily Mail readers to the Gazette, advertising 
revenues would hold steady and the savings from disbanding the Daily 
Mail would allow Gazette Company to increase its profit margins 
substantially. These planning documents were provided to lenders and 
were the foundation upon which Gazette Company secured financing for 
the May 2004 transactions. None of Gazette Company's pre-transaction 
business plans contemplated the continued publication of the Daily Mail 
beyond 2007.
    On May 7, 2004, Gazette Company and MediaNews entered into a series 
of transactions that merged their economic interests and gave Gazette 
Company ownership and control over both newspapers. In exchange for 
approximately $55 million, MediaNews transferred ownership of the Daily 
Mail assets and its 50% interest in Charleston Newspapers to 
subsidiaries of the Gazette Company. Under this new arrangement, 
Gazette Company retained 100% of the profits generated by both 
newspapers. MediaNews no longer shared in the profits or losses of the 
business and had no further obligation to contribute to capital costs. 
MediaNews had no representatives on the management committee of the 
venture and no right to vote on any matter. Gazette Company was given 
sole discretion to manage Charleston Newspapers. It had the unilateral 
authority to establish the annual budgets, determine the staffing 
levels, and approve all the hiring and firing decisions for both 
newspapers. The 2004 agreements also gave Gazette Company the express 
right to terminate publication of the Daily Mail without the approval 
of MediaNews (a right that Gazette Company had specifically bargained 
for in negotiations). The Defendants attempted to satisfy the NPA's 
requirement of separately-controlled newsrooms by arranging to pay 
MediaNews a flat fee of $200,000 per year to provide ``management and 
supervision'' services to the newsroom of the Daily Mail. May 7, 2004 
Joint Operating Agreement Sec.  V (J)(4). The fee was adjusted annually 
for inflation but did not vary based on how well or how poorly the 
newspaper performed. Despite the payment of the fee, however, MediaNews 
employees did not exercise management control over the Daily Mail after 
May 2004. In reality, the Complaint alleges that Gazette Company 
controlled both newspapers.

D. Post-Transaction Conduct

    Almost immediately after the transactions closed, Gazette Company 
began to take steps to implement its plans to close the Daily Mail. As 
alleged in the Complaint, Gazette Company stopped soliciting new 
subscribers for the Daily Mail, stopped offering promotions and 
discounts to new Daily Mail subscribers, cut dozens of Daily Mail home 
delivery and single copy routes (and refused to accept new 
subscriptions on many routes that remained), attempted to convert 
numerous Daily Mail readers to the Gazette, and took other steps with 
the goal of reducing the Daily Mail's circulation.
    At the same time, Gazette Company took several other actions that 
damaged the quantity and quality of content available to Daily Mail 
readers: It allowed almost half of the Daily Mail newsroom staff to 
leave during 2004 and forbade the editor from hiring replacements; it 
cut the Daily Mail's budget substantially in both 2004 and 2005 (while 
increasing the Gazette's); it ended the Daily Mail's Saturday edition; 
and it transferred several of the best Daily Mail reporters to the 
Gazette. Gazette Company also directed the Daily Mail to end its second 
daily edition, which contained late-breaking news and was viewed by the 
newspaper's staff as important to maintaining the quality and 
competitiveness of the paper. As a result of these actions, the 
quantity and quality of original local content created by the Daily 
Mail staff fell steadily through the end of 2004. Original local 
content is considered by both Defendants to be the most important and 
valuable content produced by these newspapers. Due to the loss of 
staff, the remaining Daily Mail reporters were required to take on 
extra coverage areas, other coverage areas were dropped, several 
sections per week were cut from the paper, and more work was farmed out 
to stringers who were not full-time journalists. The Daily Mail staff 
was forced to fill space by doing things that they considered to be 
departures from the paper's prior standards of quality, such as 
reprinting stories verbatim from the Gazette without doing any new 
reporting, and running more non-local wire service stories.
    Due to these actions by Gazette Company, the circulation of the 
Daily Mail fell from 35,076 in February 2004 to 23,985 in January 2005. 
Moreover, the Daily Mail became a less vigorous competitor to the 
Gazette and its readers got less for their money. Had the Department of 
Justice investigation not interrupted Gazette Company's plans in late 
2004, the situation would likely have continued to deteriorate as more 
resources were shifted away from the Daily Mail in preparation for its 
closure in 2007.

E. The Competitive Effects of the Alleged Violation

    The Complaint alleges that the relevant product market is local 
daily newspapers and the relevant geographic market is Kanawha and 
Putnam counties in West Virginia. The local daily newspaper market is 
two-sided: Publishers sell newspapers to readers and simultaneously 
sell access to those readers to advertisers. With respect to readers, 
the two Charleston daily newspapers are a relevant market because, 
among other reasons, Charleston Newspapers has the ability to impose 
small but significant, non-transitory price increases on readers 
without losing so much business to other media as to make the increases 
unprofitable, and these newspapers have unique attributes (such as 
original, in-depth local news, local editorials and opinion, local 
display and classified advertising, and other features) that are not 
replicated by other local media. With respect to advertisers, the two 
Charleston daily newspapers are a relevant market because, among other 
reasons, Charleston Newspapers has the ability to impose small but 
significant, non-transitory price increases on its advertisers without 
losing so much business to other media as to make the increases 
unprofitable, and advertising in these newspapers has unique 
characteristics and a unique audience that cannot be replicated by 
other local media in Charleston.
    The Complaint alleged that the May 2004 transactions extinguished 
the independent competitive incentives that existed under the prior 
joint operating arrangement. As a result of the

[[Page 11724]]

transactions and the conduct described above, readers were harmed by a 
reduction in the amount and quality of original content generated by 
the Daily Mail, the lessening of competition between the Daily Mail and 
the Gazette, the elimination of the discounts that had been available 
prior to May 2004, and the reduction in the distribution area of the 
Daily Mail, meaning that many readers no longer had access to their 
preferred newspaper. Had the Gazette Company succeeded in its plan to 
close the Daily Mail, readers would have been deprived of a choice of 
local daily newspapers and would likely have paid higher prices for a 
newspaper with less content and lower quality. Likewise, advertisers 
were harmed because the circulation and household penetration of the 
Daily Mail fell as prices rose, rendering the newspaper a less 
effective means of advertising in the Charleston area.

III. Explanation of the Proposed Final Judgment

    The Final Judgment requires the Defendants to enter into a new 
contractual relationship that will supersede the existing arrangement 
that the United States challenged. The Defendants' new arrangement 
consists of five contracts: a Limited Partnership Agreement, a Joint 
Operating Agreement, a revised Operating Agreement of Daily Gazette 
Holding Company, a Put/Call Agreement, and a Warrant Agreement, all of 
which are attached to and made a part of the Final Judgment. The Final 
Judgment prohibits the Defendants from amending or terminating these 
contracts, or entering into any subsequent contracts relating to the 
publication of newspapers in Charleston, without the consent of the 
United States.
    The new contracts address the competitive concerns resulting from 
the May 2004 transactions by, among other things, implementing several 
important changes to the governance provisions of the Defendants' 
arrangement. MediaNews will be given the right to appoint two of the 
five seats on the Board of Managers overseeing the Limited Partnership. 
Currently, MediaNews does not have the right to name any board members. 
MediaNews' board representatives will have the right to vote on all 
matters coming before the board. Most matters will be subject to 
approval by a majority vote; however, the annual newsroom budgets for 
the Daily Mail and the Gazette must each be approved by a super-
majority of four votes. This requirement will provide MediaNews with 
the ability to protect the Daily Mail's budget and negotiate for the 
resources it needs to compete effectively with the Gazette. Under the 
2004 arrangement, the Daily Mail budget was unilaterally determined by 
Gazette Company and its appointed manager at Charleston Newspapers, and 
could be changed at any time.
    The Final Judgment guarantees that the content of the Daily Mail 
will be independently determined solely by MediaNews and the staff of 
the Daily Mail. Likewise, the content of the Gazette must be 
independently determined by the Gazette Company and Gazette staff. The 
Final Judgment forbids either Defendant from taking any action to 
influence the content of the other's newspaper. It also prohibits the 
Defendants from entering into any agreement that would limit the 
editorial independence of the two newspapers.
    Currently, the Gazette Company (through its control of Charleston 
Newspapers) determines the size of the Daily Mail newsroom and must 
approve any hiring and firing decisions. To further re-establish the 
independence of the Daily Mail, the revised contracts provide that 
MediaNews will have sole authority to determine the identity of the 
Daily Mail newsroom employees and how much they are paid. The Daily 
Mail will have no fewer than 32 newsroom positions in the first year of 
the agreement, and thereafter MediaNews will set the size of the 
newsroom at whatever level it sees fit, provided that if total employee 
expense exceeds the annual budgeted amount set by the Limited 
Partnership board, MediaNews must pay the excess cost. These changes to 
the contracts are designed to prevent the recurrence of the events of 
2004, described above.
    The Final Judgment also prohibits the Defendants from 
discriminating against the Daily Mail in performing any activities 
related to circulation sales or advertising sales. Among other things, 
this provision would prohibit the type of conduct alleged in the 
Complaint, whereby Charleston Newspapers discontinued efforts to 
solicit new Daily Mail subscribers and ceased offering discounts to new 
Daily Mail subscribers, while continuing these activities for the 
Gazette. The revised contracts contain several other protections for 
the Daily Mail, including that (1) the amount of space devoted to news 
content (newshole) and the availability of color will be budgeted at 
the same level for both newspapers; (2) the press deadlines, delivery 
targets, number of editions and days of publication for the Daily Mail 
will not be changed without the approval of MediaNews; and (3) the 
primary circulation area of the Daily Mail as of August 1, 2009 will 
not be reduced without the approval of MediaNews. Under the 2004 
arrangement, Gazette Company had the unilateral power to make changes 
in any of these areas.
    To enhance the competitiveness of the Daily Mail and remedy past 
practices, the Final Judgment contains a remedial provision that calls 
for the Defendants to offer subscriptions to the Daily Mail at no less 
than 50% off the regular price. This offer must be available for a 
period of at least six months and must be made available only to Daily 
Mail subscribers. Thereafter, Charleston Newspapers must make the same 
promotional offers available for potential subscribers of both 
newspapers, unless MediaNews approves a deviation. The purpose of the 
special offer is to remedy, to the extent possible, the effects of 
Gazette Company's actions that the Complaint alleged were intended to 
undermine the circulation of the Daily Mail.
    The Final Judgment contains several provisions to prevent the 
unjustified termination of publication of the Daily Mail. The 2004 
contracts gave Gazette Company the unilateral authority to cease 
publishing the Daily Mail. The Final Judgment provides that the Daily 
Mail must continue publishing as a daily newspaper (defined in the 
Final Judgment as a print publication which is published no fewer than 
five days per week) unless it is determined to be a failing firm under 
antitrust law, as applied to newspaper joint operating agreements, and 
the United States has given its prior written approval. The Defendants 
may not deliberately hasten the failure of the Daily Mail: Under the 
Final Judgment, the Defendants may not take any action with the intent 
to cause the Daily Mail to become a failing newspaper. Unless it 
receives approval from the United States, the Defendants may not 
establish a termination date for the Daily Mail.
    In the event that Charleston Newspapers is permitted to cease 
publication of the Daily Mail, the Final Judgment requires that 
ownership of all of the intellectual property associated with that 
newspaper (such as its masthead, copyrights, trademarks, subscriber and 
advertiser lists, Internet URL, and archives) must, after satisfaction 
of any current, outstanding creditors, be transferred back to MediaNews 
at no cost to MediaNews and free of any liens or other encumbrances. 
This transfer requirement would also be triggered if the Defendants end 
their Limited Partnership or Joint Operating agreements. Prior to the 
closure of the Daily Mail, Gazette Company must obtain an appraisal of 
the fair market

[[Page 11725]]

value of the newspaper's intellectual property. To the extent the 
appraisal determines that the assets may be freely disposed of by 
Gazette Company under the terms of Section 7.8 of the credit agreement 
with United Bank (or the equivalent provision of any future credit 
agreement), Gazette Company must transfer the intellectual property to 
MediaNews.\(1)\ If the transfer cannot be accomplished due to any 
outstanding security interest or lien, Gazette Company must use its 
good faith efforts to obtain a release of the assets by the creditors. 
Once the intellectual property has been transferred, it may not be 
reacquired by Gazette Company. These portions of the Final Judgment are 
intended to prevent Gazette Company from retaining ownership of the 
Daily Mail intellectual property in the event that MediaNews wishes to 
continue publishing the newspaper independently of Charleston 
Newspapers, or if a third-party wishes to acquire these assets from 
MediaNews in order to compete against Gazette Company. Under the 2004 
contracts, Gazette Company could retain the Daily Mail intellectual 
property upon the termination of the Joint Operating Agreement or the 
Limited Partnership Agreement unless MediaNews paid Gazette Company to 
get it back and assumed certain associated liabilities. If MediaNews 
did not want to buy back the intellectual property, it would remain 
under the permanent ownership of Gazette Company. If MediaNews did 
elect to buy back the intellectual property, Gazette Company held a 
right of first refusal to purchase it from MediaNews for 10 years after 
the end of the Joint Operating Agreement or the Limited Partnership 
Agreement, which limited the ability of third-parties to acquire the 
intellectual property to compete against Gazette Company. These 
provisions of the 2004 contracts have been removed from the new 
contractual arrangement.
    The Defendants' revised contracts will put in place several new 
financial incentives that are intended to spur them to compete for 
readers and enhance the quality of their newspapers. First, as 
discussed above, if the Daily Mail ceases publishing, the Limited 
Partnership ends, or the Joint Operating Agreement ends, the Daily Mail 
intellectual property will, subject to satisfaction of current security 
interests, transfer to MediaNews at no cost. MediaNews would then be 
free to use or sell these assets as it sees fit. The 2004 contracts 
imposed several conditions that substantially decreased the likelihood 
that MediaNews would ever own the Daily Mail intellectual property 
again. Under the revised contracts, the increased likelihood that 
MediaNews will receive these assets provides MediaNews with an ongoing 
incentive to increase their value. Second, concurrently with the 
settlement, MediaNews will receive a warrant entitling it to purchase 
Class B shares representing 20% of the equity in Charleston Newspapers 
Holdings Limited Partnership. Depending upon the future performance of 
the Daily Mail, the amount of equity MediaNews is eligible to purchase 
may be adjusted up or down. For each annual gain of 1% or more in Daily 
Mail circulation market share vis-a-vis the Gazette, MediaNews would be 
entitled to purchase an additional 1% of equity. Conversely, for each 
annual decline of 1% or more, the amount of equity MediaNews is 
entitled to purchase would decrease by 1%. The exercise price is the 
appraised value of a Class B share as of the date of the warrant's 
issuance. The warrant can be exercised during a three-year window 
starting on the fifth anniversary of its issuance. MediaNews will be 
allowed to purchase any amount of equity it desires, up to the maximum 
permitted by the warrant. Thereafter, it is permitted to sell its 
shares to third parties (except for a publisher of a competing 
newspaper in Charleston with a circulation market share above 5%). 
Class B shareholders are eligible to receive dividends that may be 
distributed by the Limited Partnership. The warrant will once again 
provide MediaNews a financial stake in the success of both the Daily 
Mail and the newspapers' joint venture.
    Should the Daily Mail cease publishing at any time after the 
conversion of the warrant, Gazette Company must repurchase all of the 
outstanding Class B shares. This mandatory repurchase requirement is 
necessary to avoid providing the owner(s) of the Class B shares a 
financial incentive to terminate publication of the Daily Mail.
    Third, the revised Limited Partnership Agreement creates a further 
financial incentive by basing the size of the annual Daily Mail 
management fee paid to MediaNews on the performance of the paper. Under 
the 2004 arrangement, MediaNews received a fixed management fee that 
did not vary based on the performance of the Daily Mail. The new 
Limited Partnership Agreement provides for a variable fee that can 
adjust upwards or downwards by as much as $25,000 depending on the 
annual changes in the Daily Mail's circulation. The adjustment in the 
fee is subject to a floor of $225,000 per year.
    A fourth financial incentive consists of cash bonuses paid to the 
Circulation Director of Charleston Newspapers and the publisher of the 
Daily Mail for increases in Daily Mail circulation in a given six-month 
period.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, or the last date of 
publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the United States Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment at 
any time prior to the Court's entry of judgment. The comments and the 
response of the United States will be filed with the Court and 
published in the Federal Register.
    Written comments should be submitted to: John R. Read, Chief, 
Litigation III Section, Antitrust Division, United States Department of 
Justice, 450 Fifth Street, NW., Suite 4000, Washington, DC 20530.

[[Page 11726]]

    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    At several points during the litigation, the United States received 
from Defendants proposals or suggestions that would have provided less 
relief than is contained in the proposed Final Judgment. These 
proposals and suggestions were rejected.
    The United States considered, as an alternative to the proposed 
Final Judgment, proceeding with the full trial on the merits against 
Defendants that was scheduled to commence on April 20, 2010. The United 
States is satisfied, however, that the prohibitions and requirements 
contained in the proposed Final Judgment will adequately address the 
competitive concerns regarding the unique local daily newspaper market 
in Charleston, and will avoid the delay, risks, and costs of further 
litigation.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:
    A. The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    B. the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the court's inquiry is necessarily a limited one as the United States 
is entitled to ``broad discretion to settle with the defendant within 
the reaches of the public interest.'' United States v. Microsoft Corp., 
56 F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act).\(2)\
    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the United States' complaint, whether the 
decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001). Courts have held that:
    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to the 
decree. The court is required to determine not whether a particular 
decree is the one that will best serve society, but whether the 
settlement is ``within the reaches of the public interest.'' More 
elaborate requirements might undermine the effectiveness of antitrust 
enforcement by consent decree.
    Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\(3)\ 
In determining whether a proposed settlement is in the public interest, 
a district court ``must accord deference to the government's 
predictions about the efficacy of its remedies, and may not require 
that the remedies perfectly match the alleged violations.'' SBC 
Commc'ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 
(noting the need for courts to be ``deferential to the government's 
predictions as to the effect of the proposed remedies''); United States 
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) 
(noting that the court should grant due respect to the United States' 
prediction as to the effect of proposed remedies, its perception of the 
market structure, and its views of the nature of the case).
    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 1459-60. As the United States District Court for the District of 
Columbia recently confirmed in SBC Communications, courts ``cannot look 
beyond the complaint in making the public interest determination unless 
the complaint is drafted so narrowly as to make a mockery of judicial 
power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). This language effectuates what 
Congress intended when it enacted the Tunney Act in 1974, as Senator 
Tunney explained: ``[t]he court is nowhere

[[Page 11727]]

compelled to go to trial or to engage in extended proceedings which 
might have the effect of vitiating the benefits of prompt and less 
costly settlement through the consent decree process.'' 119 Cong. Rec. 
24,598 (1973) (statement of Senator Tunney). Rather, the procedure for 
the public interest determination is left to the discretion of the 
court, with the recognition that the court's ``scope of review remains 
sharply proscribed by precedent and the nature of Tunney Act 
proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.

VIII. Determinative Documents

    Other than the contracts that are attached as Exhibit A to the 
Final Judgment and incorporated therein, there are no determinative 
materials or documents within the meaning of the APPA that were 
considered by the United States in formulating the proposed Final 
Judgment.

    Respectfully submitted,

Charles T. Miller,

,United States Attorney.

s/Stephen M. Horn

 Assistant United States.
Attorney.

Attorney for the United States (WVSB 1788), P.O. Box 1713, 
Charleston, WV 25326. Telephone: 304-345-2200, Fax: 304-347-5443, E-
mail: [email protected].

s/Bennett J. Matelson
Bennett J. Matelson,
William H. Jones II,
Matthew J. Bester,
Deborah Roy,

Attorneys for the United States, U.S. Department of Justice, 
Antitrust Division, 450 Fifth Street, NW., Suite 4000, Washington, 
DC 20530. Telephone: (202) 616-5871, Fax: (202) 514-7308, E-mail: 
[email protected].

Dated: January 20, 2010.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF WEST VIRGINIA 
CHARLESTON DIVISION

    UNITED STATES OF AMERICA, Plaintiff, v. DAILY GAZETTE COMPANY, and 
MEDIANEWS GROUP, INC., Defendants.

    Civil Action No. 2:07-0329
    Judge Copenhaver
    Magistrate Judge Stanley
    Filed: January 20, 2010

Certificate of Service

    I hereby certify that on January 20, 2010, I electronically filed 
the foregoing document with the Clerk of the Court using the CM/ECF 
system, which will send notification of such filing to the following 
CM/ECF participants:

Lee H. Simowitz, Ronald F. Wick, Baker & Hostetler LLP, Washington 
Square, Suite 1100, 1050 Connecticut Avenue, NW., Washington, DC 20036.
Benjamin L. Bailey, Brian A. Glasser, Bailey & Glasser LLP, 227 Capitol 
Street, Charleston, WV 25301.
Alan L. Marx, Stephen C. Douse, King & Ballow, 1100 Union Street Plaza, 
315 Union Street, Nashville, TN 37201.
Michael T. Chaney John R. Hoblitzel, Kay Casto & Chaney, P.O. Box 2031, 
Charleston, WV 25327-2031,

/s/ William H. Jones, II
William H. Jones, II.

Footnotes

    1. Section 7.8 of the United Bank agreement provides:
    Sale of Stock and Assets. No Credit Party shall sell, transfer, 
convey, assign or otherwise dispose of any of its properties or other 
assets, including the Stock of any of its Subsidiaries (whether in a 
public or a private offering or otherwise) or any of its Accounts, 
other than (a) the sale of Inventory in the ordinary course of 
business; (b) the sale or other disposition by a Credit Party of 
property that is obsolete or no longer used or useful in such Credit 
Party's business and having a book value, not exceeding $100,000 in the 
aggregate in any Fiscal Year; and (c) the sale or other disposition of 
other property having a book value not exceeding $100,000 in the 
aggregate in any Fiscal Year.
    2. The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the list 
of factors to focus on competitive considerations and to address 
potentially ambiguous judgment terms. Compare 15 U.S.C. 16(e) (2004), 
with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 489 F. Supp. 2d 
at 11 (concluding that the 2004 amendments ``effected minimal changes'' 
to Tunney Act review).
    3. Cf. BNS, 858 F.2d at 464 (holding that the court's ``ultimate 
authority under the [APPA] is limited to approving or disapproving the 
consent decree''); United States v. Gillette Co., 406 F. Supp. 713, 716 
(D. Mass. 1975) (noting that, in this way, the court is constrained to 
``look at the overall picture not hypercritically, nor with a 
microscope, but with an artist's reducing glass''). See generally 
Microsoft, 56 F.3d at 1461 (discussing whether ``the remedies [obtained 
in the decree are] so inconsonant with the allegations charged as to 
fall outside of the `reaches of the public interest' '').
    4. See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 
2000) (noting that the ``Tunney Act expressly allows the court to make 
its public interest determination on the basis of the competitive 
impact statement and response to comments alone''); United States v. 
Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 61,508, at 71,980 
(W.D. Mo. 1977) (``Absent a showing of corrupt failure of the 
government to discharge its duty, the Court, in making its public 
interest finding, should * * * carefully consider the explanations of 
the government in the competitive impact statement and its responses to 
comments in order to determine whether those explanations are 
reasonable under the circumstances.''); S. Rep. No. 93-298, 93d Cong., 
1st Sess., at 6 (1973) (``Where the public interest can be meaningfully 
evaluated simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').

[FR Doc. 2010-5095 Filed 3-10-10; 8:45 am]
BILLING CODE 4410-11-P