Bulletin case breaks new legal groundHere is the full text of the agreement
Bulletin keeps on rolling
between Liberty Newspapers Limited Partnership
and Gannett Pacific Corporation.
This Amendment and Termination Agreement ("Termination Agreement") is entered into as September 7, 1999 by and between Gannett Pacific Corporation (formerly known as Honolulu Advertiser, Inc.) ("Advertiser"), a Hawaii corporation and Liberty Newspapers Limited Partnership ("Liberty"), an Arkansas limited partnership.
AMENDMENT AND TERMINATION AGREEMENT
WHEREAS, Advertiser owns and publishes a morning daily newspaper and a Sunday newspaper in Honolulu, Hawaii known as the "The Honolulu Advertiser" and Liberty owns and publishes an afternoon daily newspaper and a Saturday newspaper in Honolulu, Hawaii known as the "Honolulu Star-Bulletin" (collectively, the "Newspapers" and singularly, a "Newspaper");
WHEREAS, the parties previously entered into an Amendment and Restatement of Mutual Publishing Plan Agreement dated as of January 30, 1993 (the "Agreement") under which they agreed in 1962 to combine the business operations of the Newspapers while maintaining the editorial independence of each Newspaper, and under which they have done so for more than 37 years;
WHEREAS, the Agreement provides for the production and distribution of the Newspapers, all in a manner consistent with the Newspaper Preservation Act, 15 U.S.C. 180) et seq;
WHEREAS, pursuant to the terms of the Agreement, the Partnership (as defined below) is obligated to make weekly cash payments to Liberty until December, 2012 and to print, distribute and perform other business functions related to the Star-Bulletin;
WHEREAS, Liberty has requested termination of the Agreement and a lump sum cash payment in lieu of the remaining payments and other obligations due to it from the Partnership under the Agreement;
WHEREAS, on a standalone basis, the expenses of publishing the Star-Bulletin substantially exceed the incremental revenues, and the Star-Bulletin is no longer profitable;
WHEREAS, Liberty upon its own initiative has determined that it is not in its interest to continue to publish the Star-Bulletin pursuant to the Agreement; and
WHEREAS, the parties desire to amend the Agreement to, among other things, provide for the orderly termination of the Agreement.
NOW, THEREFORE, in consideration of the agreements contained herein, the parties agree as follows:
1. Termination. Subject to the satisfaction or waiver of all conditions precedent stated in paragraph 2 below, the Agreement is hereby amended to provide that on or before the close of business on October 30, 1999 (the "Termination Date");
The Agreement, and the Agreement of Limited Partnership of Hawaii Newspaper Agency Limited Partnership ("Partnership") shall terminate, the obligations of the parties under the Agreement and the Partnership with respect to each other shall terminate, and Advertiser shall be relieved of its obligations to print, distribute and perform other business functions related to the Star-Bulletin; and2. Conditions to Termination. The Agreement and the Partnership shall terminate at the time described in paragraph 1 above only if all of the following conditions precedent have been satisfied or have been waived in writing by the party for whose benefit the condition is in place;
Advertiser shall pay Liberty $26,500,000 (the "Termination Payment") in immediately available funds, by wire transfer to an account designated by Liberty. Except as described in paragraph 5 below, the Termination Payment shall dissolve the Partnership and satisfy in full all payment and performance obligations of Advertiser to Liberty under the Agreement and the Partnership.
Each of the parties' respective representations and warranties contained in paragraph 4 below made as of the date of this Termination Agreement shall have remained true and correct in all material respects as if such representations and warranties were made on and as of the Termination Date;3. Parties' Efforts. If between the date hereof and the Termination Date, any party should become aware of any event or matter the occurrence or existence of which would cause any of the conditions described in paragraph 2 above to not be satisfied as of the Termination Date if still in existence on such date, such party shall give immediate written notice to the other describing the event or matter, and the parties agree to use their reasonable best efforts to eliminate any such matter or cause any such event to be rendered unobstructive to the consummation of the transactions contemplated by this Termination Agreement. The parties agree from the date hereof through the Termination Date to use their reasonable best efforts and take all reasonable actions necessary, as may be requested by the other party, from time to time, to ensure the satisfaction of the conditions described in paragraph 2 above and, generally, to assure that the consummation of this Termination Agreement occurs as contemplated herein.
The transitional covenants contained in paragraph 5 below shall have been complied with in all material respects except to the extent such covenants contemplate performance after the Termination Date; and
All actions required by, and all instruments and payment required to be delivered pursuant to, paragraph 1 above shall have been taken or delivered.
4. Representations and Warranties. Each of the parties hereby represents and warrants to the other that:
It is a corporation or partnership, as the case may be, duly organized, validly existing, and in good standing under the laws of the state of its organization;5. Covenants. The parties hereby covenant and agree to take the actions set forth below following the Termination Date:
The execution and delivery by it of this Termination Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on its part, and this Termination Agreement has been duly executed and delivered by it; and
This Termination Agreement constitutes its valid and binding obligation enforceable in accordance with its terms, except as enforcement may be limited by applicable laws affecting the rights of creditors generally, and no approval or consent is necessary for execution, delivery, and performance by it.
Advertiser will contribute, if necessary, sufficient funds to the Partnership to ensure that the Partnership has funds available to meet its obligations to Liberty arising out of the termination of the Agreement and the Partnership including, without limitation, to reimburse Liberty for (i) severance costs as provided under Section IV (J)(iii) of the Agreement, including severance payments to each of the publisher and editor of the Star-Bulletin at Closing in an amount equal to up to two times his 1999 salary and 1998 bonus, respectively, (ii) any obligations under federal or state plant closing provisions arising out of this Termination Agreement, and (iii) all post-Termination Date obligations with respect to the health and other benefit plans currently provided by Liberty to its employees, and all benefits Liberty will make available to Liberty employees as required under COBRA. It is the intention of the parties that, by reason of its payment of the Termination Payment and its funding obligations under this paragraph 5(a), Advertiser shall bear no liability of any nature to Liberty employees;6. Survival and Indemnification. The representations, warranties, covenants and agreements of the parties in this Termination Agreement shall survive the execution hereof and the Termination Date. Each party shall indemnify the other from and against any and all liability, damage, loss, cost or expense (including without limitation reasonable attorneys' fees and expenses) resulting from any misrepresentation, breach of warranty or failure to fulfill any of its covenants or agreements under this Termination Agreement.
Liberty and its authorized agents and representatives shall have access to and may inspect the books and records for the time periods prior to the Termination Date, maintained by Advertiser under the Agreement or the Partnership, at any time and from time to time during ordinary business hours following the Termination Date, for any reasonable purpose related to the Agreement or the Partnership, including without limitation any federal, state or local income tax audit of Liberty or its operations;
Liberty will pay and be responsible for the costs of defending, settling, paying or discharging all liabilities and claims on account of anything published in or excluded from the Star-Bulletin (at the direction or under the supervision of the editorial department of the Star-Bulletin) through the Termination Date;
Within 30 days after the Termination Date, Liberty will cause its employees to vacate the editorial and office space provided by the Partnership under the Agreement; within 60 days after the Termination Date, Liberty will remove from the Partnership premises all editorial property owned by Liberty, and Advertiser will deliver to Liberty any editorial property of Liberty in possession of Advertiser;
Within 30 days after the Termination Date, Advertiser, pursuant to Section IV(J) of the Agreement, will pay to Liberty the amount, through the Termination Date, of the weekly distribution payment due for any time periods preceding the Termination Date, including a proportionate amount for the week in which the Termination Date occurs; provided, however, the total amount of distribution payments in 1999 shall not exceed the budgeted amount for 1999 prorated on the basis of the number of weeks that the Star-Bulletin was published in 1999 prior to the Termination Date; and
To permit Advertiser to satisfy its contractual obligations to Star-Bulletin's prepaid and other subscribers under the Agreement, Section V(D) of the Agreement is hereby amended to provide that for the 90-day period beginning on the Termination Date, Advertiser (i) will retain a non-exclusive right to use the then-outstanding advertising, circulation and subscription materials of the Star-Bulletin (which advertising, circulation and subscription materials of the Star-Bulletin shall remain the property of Liberty) and (ii) will retain a continuing, non-exclusive right to use the Star-Bulletin's names, trademarks, and masthead (which names, trademarks and masthead shall remain the property of Liberty), its right under (i) and (ii) being limited to use in connection with satisfying its obligations to Star-Bulletin subscribers and advertisers and related activities).
7. Tax Matters. It is the intent of the Advertiser and Liberty that the Termination Payment shall be treated as a payment for the termination of Advertiser's obligations under the Agreement for federal, state and local income tax purposes. Both parties agree to report the Termination Payment consistently with the above intent for federal, state and local income tax purposes.
8. Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Termination Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses.
9. Notices. Any documents, notices, requests, demands or communications given or required or permitted to be given under or in connection with this Termination Agreement shall be hand delivered or sent to the address stated herein, or any other address requested by a party in accordance with this section, by way of first class registered or certified mail, return receipt requested, postage prepaid, or by facsimile addressed as follows:
10. Assignment. Neither party may assign its rights or obligations under the Agreement or this Termination Agreement without the prior written consent of the other party.TO: Gannett Pacific Corporationwith a copy to
c/o Gannett Co., Inc.
1100 Wilson Blvd.
Arlington, VA 22234
Fax No.: (703) 558-3897
Attention: Thomas L. Chapple,
Senior Vice President
c/o Rupert Phillips
1713 Grant Sycamore Lane
Baker, FL 32531
Fax No.: (850) 537-4050
Jackson Farrow Jr., Esq.
111 Center Street
LIttle Rock, AR 72201
Fax No.: (501) 377-3453
11. Governing Law. This Termination Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
12. Public Announcements. Prior to the Termination Date, neither party shall, without approval of the other, make any press release or other public announcement concerning the transactions contemplated by this Termination Agreement; provided, however, that nothing herein will prohibit any party from issuing or causing the publication of any such press release or public announcement to the extent that such party determines, based upon the advice of its counsel, that such action is required by law, in which event the party making such determination will use reasonable efforts to allow the other party reasonable time to comment on such release or announcement in advance of its issuance. The parties agree that nothing in this paragraph 12 or elsewhere in this Termination Agreement shall limit or restrict any news or editorial coverage or comment that may appear in either Newspaper in the ordinary course of their respective journalistic operations.
13. No Third Party Rights. Nothing in this Termination Agreement shall be deemed to create any right on the part of any person or entity not a party to this Termination Agreement.
14. Challenges. If an action shall be pending challenging the effectiveness or validity of, or claiming substantial damages from one or both parties by reason of, this Termination Agreement, or if a temporary, preliminary, or permanent restraining order or injunction shall have been issued and be pending against the parties enjoining, restraining or otherwise restricting the termination of the Agreement, then either party may terminate this Termination Agreement upon written notice to the other and if the Advertiser shall have received a civil investigation demand or equivalent process from any federal or state agency, the Advertiser may terminate this Termination Agreement upon written notice to Liberty.
15. Effect of Non-Termination. If for any reason the Agreement does not terminate by the close of business on December 23, 1999, including because of failure of a condition precedent as provided in paragraph 2 above or by reason of notice by a party as provided in paragraph 14 above, all provisions of this Termination Agreement shall be null and void and of no effect, and the Agreement and Partnership shall remain in full force and effect for its remaining term, unless the parties otherwise agree in writing.
16. Conflicts. To the extent there is any conflict between the provisions of this Termination Agreement and the provisions of the Agreement or the Partnership, the provisions of this Termination Agreement shall control.
17. Entire Agreements: Counterparts. This Termination Agreement constitutes the entire agreement of this parties with respect to the subject matter contained herein and supersedes any prior such agreements. There are no other agreements written or oral, except as specifically provided herein. This Termination Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be duly executed by their duly authorized officers, as of the day and year first written above.
Gannett Pacific Corporation
By: Larry Miller (signed)
Title: Senior Vice President
Liberty Newspapers Limited Partnership
By: Phillips Media Services, Inc.
By: Rupert E. Phillips (signed)
Bulletin case breaks new legal ground
Bulletin keeps on rolling
Star-Bulletin closing Oct. 30, 1999