EXHIBIT 10.8

 

EXECUTION VERSION

 

ST. LOUIS POST-DISPATCH LLC

 

$306,000,000

 

8.05% SENIOR NOTES DUE APRIL 28, 2009

 

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NOTE AGREEMENT

 

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DATED AS OF MAY 1, 2000

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TABLE OF CONTENTS

 

(Not Part of Agreement)

 

          Page

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PARAGRAPH 1.

  

AUTHORIZATION OF ISSUE OF NOTES

   1

1.      Authorization of Issue of Notes

   1

PARAGRAPH 2.

  

PURCHASE AND SALE OF NOTES

   1

2.      Purchase and Sale of Notes

   1

PARAGRAPH 3.

  

CONDITIONS OF CLOSING

   2

3.      Conditions of Closing

   2

3A.   Certain Documents

   2

3B.   Opinion of Purchaser’s Special Counsel

   4

3C.   Transactions Permitted by Applicable Laws

   4

3D.   Private Placement Number

   4

3E.   Consummation of Formation/Contribution Transactions

   4

3F.   Payment of Fees

   4

3G.   Sale to Other Purchasers

   5

PARAGRAPH 4.

  

PREPAYMENTS

   5

4.      Prepayments

   5

4A.   Optional Prepayment With Yield-Maintenance Amount

   5

4B.   Notice of Optional Prepayment

   5

4C.   Partial Payments Pro Rata

   5

4D.   Retirement of Notes

   5

PARAGRAPH 5.

  

AFFIRMATIVE COVENANTS

   6

5.      Affirmative Covenants

   6

5A.   Financial Statements

   6

5B.   Inspection of Properties

   7

5C.   Covenant to Secure Notes Equally

   8

5D.   Compliance with Laws and Regulations

   8

5E.   Patents, Trade Marks and Trade Names

   8

5F.   Information Required by Rule 144A

   8

5G.   Payment of Taxes and Other Claims

   9

5H.   ERISA Compliance

   9

PARAGRAPH 6.

  

NEGATIVE COVENANTS

   9

6.      Negative Covenants

   9

6A.   Change of Business

   9

6B.   Limitation on Distributions

   9

 

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6C.   Lien, Debt and Other Restrictions

   10

6D.   Restrictions Upon Modification of Limited Liability Company Agreement

   15

6E.   Limitation on Certain Restrictive Agreements

   15

PARAGRAPH 7.

  

EVENTS OF DEFAULT

   15

7.      Events of Default

   15

7A.   Acceleration

   15

7B.   Rescission of Acceleration

   18

7C.   Notice of Acceleration or Rescission

   18

7D.   Other Remedies

   19

PARAGRAPH 8.

  

REPRESENTATIONS, COVENANTS AND WARRANTIES

   19

8.      Representations, Covenants and Warranties

   19

8A.   Organization and Qualification; Due Authorization

   19

8B.   Financial Statements

   19

8C.   Actions Pending

   20

8D.   Outstanding Debt

   20

8E.   Title to Properties

   20

8F.   Conflicting Agreements and Other Matters

   20

8G.   Offering of Notes

   21

8H.   Use of Proceeds

   21

8I.    ERISA

   21

8J.    Governmental Consent

   22

8K.   Business; Activities

   22

8L.   Ownership of Company

   22

8M.  Disclosure

   22

8N.   Formation/Contribution Documents

   22

8O.   Solvency

   23

8P.   Representations and Warranties in Formation/Contribution Documents

   23

PARAGRAPH 9.

  

REPRESENTATIONS OF THE PURCHASERS

   23

9.      Representations of the Purchasers

   23

9A.   Nature of Purchase

   23

9B.   Source of Funds

   23

9C.   Independent Investigation

   23

PARAGRAPH 10.

  

DEFINITIONS; ACCOUNTING MATTERS

   24

10.    Definitions; Accounting Matters

   24

10A. Yield-Maintenance Terms

   24

10B. Other Terms

   25

10C. Accounting and Legal Principles, Terms and Determinations

   30

 

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PARAGRAPH 11.

  

MISCELLANEOUS

   30

11.    Miscellaneous

   30

11A. Note Payments

   30

11B. Expenses

   31

11C. Consent  to Amendments

   31

11D.  Form,  Registration, Transfer and Exchange of Notes; Lost Notes

   32

11E. Persons  Deemed Owners; Participations

   32

11F. Survival  of  Representations and Warranties; Entire Agreement

   33

11G. Successors  and Assigns

   33

11H. Notices

   33

11I.  Payments  due on Non-Business Days

   33

11J.  Satisfaction  Requirement

   34

11K. Governing  Law

   34

11L. Severability

   34

11M. Descriptive  Headings

   34

11N. Counterparts

   34

11O. Independence  of Covenants

   34

11P. Severalty  of Obligations

   34

11Q. Consent  to Jurisdiction; Waiver of Immunities

   34

11R. Waiver  of Jury Trial

   35

 

PURCHASER SCHEDULE

 

EXHIBIT A -

  

FORM OF NOTE

EXHIBIT B -

  

FORM OF FUNDS DELIVERY INSTRUCTION LETTER

EXHIBIT C -

  

FORM OF OPINION OF COUNSEL TO COMPANY AND

    

GUARANTOR

EXHIBIT D -

  

FORM OF COMPLIANCE CERTIFICATE

EXHIBIT E -

  

FORM OF SUBORDINATED INTERCOMPANY NOTE

EXHIBIT F -

  

FORM OF GUARANTY AGREEMENT

 

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ST. LOUIS POST-DISPATCH LLC

900 NORTH TUCKER BOULEVARD

ST. LOUIS, MISSOURI 63101

 

As of May 1, 2000

 

TO EACH OF THE PURCHASERS NAMED ON

THE ATTACHED PURCHASER SCHEDULE

 

$306,000,000 8.05% Senior Notes

 

Ladies and Gentlemen:

 

The undersigned, ST. LOUIS POST-DISPATCH LLC, a Delaware limited liability
company (the “COMPANY”), hereby agrees with each Purchaser as follows:

 

PARAGRAPH 1. AUTHORIZATION OF ISSUE OF NOTES.

 

1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the issue of its
senior guaranteed promissory notes in the aggregate principal amount of
$306,000,000, to be dated the date of issue thereof, to mature April 28, 2009,
to bear interest on the unpaid balance thereof from the date thereof until the
principal thereof shall have become due and payable at the rate of 8.05% per
annum and on overdue payments at the rate specified therein, and to be
substantially in the form of Exhibit A attached hereto (the “NOTES”). The term
“NOTES” as used herein shall include each Note delivered pursuant to any
provision of this Agreement and each Note delivered in substitution or exchange
for any other Note pursuant to any such provision. Capitalized terms used herein
have the meanings specified in paragraph 10.

 

PARAGRAPH 2. PURCHASE AND SALE OF NOTES.

 

2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to each
Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company Notes in the aggregate principal
amount set forth opposite such Purchaser’s name on the Purchaser Schedule hereto
at 100% of such aggregate principal amount. The Company will deliver to each
Purchaser, at the offices of Baker Botts L.L.P. at 599 Lexington Avenue, New
York, New York 10022-6030, one or more Notes registered in its name, evidencing
the aggregate principal amount of Notes to be purchased by such Purchaser and in
the denomination or denominations specified in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer of immediately
available funds for credit to the Company’s account A/C 323 232 418 at The Chase
Manhattan Bank, New York, New York (ABA No. 021-000-021), as identified in a
written instruction of the Company, in the form of Exhibit B attached hereto,
delivered to each Purchaser on or before the date of closing, which shall be May
1, 2000 or any other date on or before May 1, 2000 upon which the parties hereto
may mutually agree (herein called the “CLOSING” or the “DATE OF CLOSING”).

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PARAGRAPH 3. CONDITIONS OF CLOSING.

 

3. CONDITIONS OF CLOSING. The obligation of each Purchaser to purchase and pay
for the Notes to be purchased by it hereunder is subject to the satisfaction, on
or before the Date of Closing, of the following conditions:

 

3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the following, each to
be dated the Date of Closing unless otherwise indicated:

 

(i) The Note(s) to be purchased by such Purchaser.

 

(ii) The Guaranty Agreement, duly executed and delivered by the Guarantor.

 

(iii) A favorable opinion of Fulbright & Jaworski L.L.P., counsel to the Company
and the Guarantor, substantially in the form of Exhibit C attached hereto. The
Company hereby directs such counsel to deliver such opinion and agrees that the
issuance and sale of any Notes will constitute a reconfirmation of such
direction.

 

(iv) Reliance letters in respect of any other legal opinions delivered in
connection with this Agreement, the Guaranty Agreement, the
Formation/Contribution Documents and the transactions contemplated hereby and
thereby.

 

(v) Copies of (a) the Certificate of Formation of the Company, certified as of a
recent date by the Secretary of State of Delaware, and (b) the Limited Liability
Company Agreement of the Company, certified by the Secretary or an Assistant
Secretary of the Company.

 

(vi) Copies of (a) the Certificate of Incorporation of the Guarantor, certified
as of a recent date by the Secretary of State of Delaware, and (b) the Bylaws of
the Guarantor, certified by the Secretary or an Assistant Secretary of the
Guarantor.

 

(vii) Incumbency certificates signed by the Secretary or an Assistant Secretary
and one other officer of each of the Company and the Guarantor, certifying as to
the names, titles and true signatures of the officers of the Company or the
Guarantor, as applicable, authorized to (a) sign on behalf of the Company this
Agreement, the Notes and the other documents to be delivered by the Company
hereunder or in connection with the transactions contemplated hereby, or (b)
sign on behalf of the Guarantor the Guaranty Agreement and the other documents
to be delivered by the Guarantor hereunder and thereunder or in connection with
the transactions contemplated hereby and thereby, as applicable.

 

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(viii) A certificate of the Secretary or an Assistant Secretary of the Guarantor
(a) attaching resolutions of the Board of Directors of the Guarantor evidencing
approval (in the Guarantor’s capacity as sole managing member of the Company) of
the transactions contemplated by this Agreement and the issuance of the Notes
and the execution, delivery and performance thereof, authorizing certain
officers to execute and deliver the same, and certifying that such resolutions
were duly and validly adopted and have not since been amended, revoked or
rescinded, and (b) certifying (in the Guarantor’s capacity as sole managing
member of the Company) that no dissolution or liquidation proceedings as to the
Company or any Material Subsidiary of the Company have been commenced or are
contemplated.

 

(ix) A certificate of the Secretary or an Assistant Secretary of the Guarantor
(a) attaching resolutions of the Board of Directors of the Guarantor evidencing
approval of the execution, delivery and performance of the Guaranty Agreement,
and authorizing certain officers to execute and deliver the same, and certifying
that such resolutions were duly and validly adopted and have not since been
amended, revoked or rescinded, and (b) certifying that no dissolution or
liquidation proceedings as to the Guarantor or any Subsidiary of the Guarantor
(other than a Subsidiary of the Company that is not a Material Subsidiary) have
been commenced or are contemplated.

 

(x) An Officer’s Certificate of a Responsible Officer of the Company certifying
that (a) the representations and warranties contained in paragraph 8 are true on
and as of the Date of Closing, except to the extent of changes caused by the
transactions herein contemplated, and (b) there exists on the Date of Closing no
Event of Default or Default.

 

(xi) An Officer’s Certificate of a Responsible Officer of the Guarantor
certifying that (a) the representations and warranties contained in Section 3 of
the Guaranty Agreement are true on and as of the Date of Closing, except to the
extent of changes caused by the transactions herein and therein contemplated,
and (b) there exists on the Date of Closing no Guaranty Event of Default or
Guaranty Default.

 

(xii) Corporate and tax good standing certificates as to (a) the Company and the
Guarantor, from the States of Delaware and Missouri, and (b) each Material
Subsidiary of the Company, from its state of organization.

 

(xiii) A copy of each of the Formation/Contribution Documents and the Indemnity
Agreement, certified as true and complete by the Secretary or an Assistant
Secretary of the Guarantor, the terms and conditions of which shall be in full
force and effect and shall not have been amended, modified or waived in any
material respect except with the prior written consent of such Purchaser.

 

(xiv) A pro forma consolidated balance sheet for the Company and its
Subsidiaries as at March 31, 2000, certified by an authorized financial officer
of the

 

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Company and reflecting the consummation of the Formation/Contribution
Transactions and the issuance of the Notes hereunder.

 

(xv) Such additional documents or certificates with respect to such legal
matters or corporate, limited liability company or other proceedings related to
the transactions contemplated hereby as may be reasonably requested by such
Purchaser.

 

3B. OPINION OF PURCHASER’S SPECIAL COUNSEL. Such Purchaser shall have received
from Baker Botts L.L.P., who are acting as special counsel for it in connection
with this transaction, a favorable opinion satisfactory to such Purchaser as to
such matters incident to the matters herein contemplated as it may reasonably
request.

 

3C. TRANSACTIONS PERMITTED BY APPLICABLE LAWS. The consummation of all
transactions contemplated hereby, including, without limitation, the offer by
the Company of the Notes, the purchase of and payment for the Notes to be
purchased by such Purchaser on the Date of Closing on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, section 5 of the Securities Act or Regulation T, U or X of
the Board of Governors of the Federal Reserve System) and shall not subject such
Purchaser to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and such Purchaser
shall have received such certificates or other evidence as such Purchaser may
request to establish compliance with this condition.

 

3D. PRIVATE PLACEMENT NUMBER. A Private Placement Number issued by Standard &
Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office
of the National Association of Insurance Commissioners) shall have been obtained
for the Notes.

 

3E. CONSUMMATION OF FORMATION/CONTRIBUTION TRANSACTIONS. Such Purchaser shall
have received satisfactory evidence that the Formation/Contribution Transactions
have been consummated prior to or concurrently with the issuance of the Notes
pursuant to and in accordance with the terms and conditions of the
Formation/Contribution Documents (no terms thereof having been amended,
supplemented, waived or otherwise modified in any material respect without such
Purchaser’s prior written consent); all corporate, limited liability company and
other proceedings taken or to be taken in connection with the
Formation/Contribution Transactions and all documents incident thereto shall be
satisfactory in substance and form to such Purchaser; and such Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents as such Purchaser may reasonably request.

 

3F. PAYMENT OF FEES. The Company shall have paid (i) to each Purchaser such fees
as are due it in connection with this Agreement, including such Purchaser’s pro
rata portion of the structuring fee of $150,000 (but subject to the provisions
of the letter agreement dated March 24, 2000 between the Guarantor and The
Prudential Insurance Company of America), and (ii) the fees and expenses of
Baker Botts L.L.P., Purchasers’ special counsel, as set forth

 

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in a statement to be delivered to the Company no later than one Business Day
prior to the Date of Closing.

 

3G. SALE TO OTHER PURCHASERS. The Company shall have sold to the other
Purchasers the Notes to be purchased by them on the Date of Closing and shall
have received payment in full therefor.

 

PARAGRAPH 4. PREPAYMENTS.

 

4. PREPAYMENTS. The Notes shall be subject to prepayment only with respect to
the optional prepayments permitted by paragraph 4A.

 

4A. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in a
minimum principal amount of $1,000,000 and integral multiples of $100,000) at
the option of the Company, at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each Note.

 

4B. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of each
Note irrevocable written notice of any prepayment pursuant to paragraph 4A not
less than 10 Business Days prior to the prepayment date (which shall be a
Business Day), specifying such prepayment date and the principal amount of the
Notes, and of the Notes held by such holder, to be prepaid on such date and
stating that such prepayment is to be made pursuant to paragraph 4A. Notice of
prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the Yield-Maintenance Amount, if any, with respect thereto,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4A, give telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each holder of a Note which shall have
designated a recipient of such telephonic notices in the Purchaser Schedule
attached hereto or by notice in writing to the Company; provided, that such
notice shall be given instead by telecopy to any holder which shall have elected
to receive such notices by telecopy and shall have designated a recipient of
such telecopy notices in the Purchaser Schedule attached hereto or by notice in
writing to the Company.

 

4C. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the Notes pursuant
to paragraph 4A, the principal amount so prepaid shall be allocated to all Notes
at the time outstanding in proportion to the respective outstanding principal
amounts thereof.

 

4D. RETIREMENT OF NOTES. The Company shall not, and shall not permit any of its
Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part
prior to their stated final maturity (other than by prepayment pursuant to
paragraph 4A or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly, Notes held by any
holder.

 

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PARAGRAPH 5. AFFIRMATIVE COVENANTS.

 

5. AFFIRMATIVE COVENANTS. So long as any Note shall remain unpaid, the Company
covenants as follows:

 

5A. FINANCIAL STATEMENTS. The Company will deliver or cause the Guarantor to
deliver to each holder in duplicate (it being understood that the Company need
not duplicate delivery by the Guarantor of the financial statements or other
items required to be delivered under Section 4.1 of the Guaranty Agreement):

 

(i) as soon as practicable and in any event within 45 days after the end of each
quarterly period (other than the last quarterly period) in each fiscal year, a
consolidating and consolidated statement of income and a consolidated statement
of cash flows of the Guarantor and its Subsidiaries (including the Company) for
the period from the beginning of the current fiscal year to the end of such
quarterly period, and a consolidating and consolidated balance sheet of the
Guarantor and its Subsidiaries (including the Company) as at the end of such
quarterly period, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year (if applicable, in the case of
the Company and its Subsidiaries), all in reasonable detail and certified by an
authorized financial officer of the Guarantor, subject to changes resulting from
year-end adjustments; to the extent they include the types of statements
described above and otherwise comply with the requirements of this clause (i),
such unaudited consolidated financial statements may be in the form incorporated
in the Guarantor’s reports on Form 10-Q or in other filings with the Securities
and Exchange Commission;

 

(ii) as soon as practicable and in any event within 90 days after the end of
each fiscal year, a consolidating and consolidated statement of income and a
consolidating and consolidated balance sheet of the Guarantor and its
Subsidiaries (including the Company) as at the end of such year and consolidated
statements of cash flows and stockholders’ equity of the Guarantor and its
Subsidiaries (including the Company) for such year, setting forth in each case
in comparative form corresponding consolidated figures from the preceding annual
audit, all in reasonable detail and satisfactory in scope to the Required
Holder(s) and, as to the consolidated statements, audited by independent public
accountants of recognized standing selected by the Guarantor whose opinion shall
be in scope and substance satisfactory to the Required Holder(s) and, as to the
consolidating statements, certified by an authorized financial officer of the
Guarantor; to the extent they include the types of statements described above
and otherwise comply with the requirements of this clause (ii), such audited
consolidated financial statements may be in the form incorporated in the
Guarantor’s annual report on Form 10-K or in other filings with the Securities
and Exchange Commission;

 

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(iii) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as the Guarantor shall send to
its stockholders and copies of all registration statements (without exhibits)
and all reports (other than reports as to which the Guarantor shall receive
confidential treatment) which the Guarantor or any Subsidiary (including the
Company) files with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and Exchange
Commission);

 

(iv) promptly upon receipt thereof, a copy of each other report submitted to the
Guarantor or any Subsidiary (including the Company) by independent accountants
in connection with any annual, interim or special audit made by them of the
books of the Guarantor or any Subsidiary (including the Company); and

 

(v) with reasonable promptness, such other information and documents as any
holder may reasonably request.

 

Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder a Compliance Certificate,
substantially in the form of Exhibit D attached hereto, executed on behalf of
the Company and demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of paragraphs
6B, 6C(2), 6C(3) and 6C(4) of this Agreement and stating that there exists no
Event of Default or Default, or, if any Event of Default or Default exists,
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto. Together with each delivery of
financial statements required by clause (ii) above, the Company will deliver or
cause to be delivered to each holder a certificate of such accountants stating
that, in making the audit necessary for their report on such financial
statements, they have obtained no knowledge of any Event of Default or Default
or, if they have obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed in the
course of an audit conducted in accordance with generally accepted auditing
standards. The Company also covenants that immediately after any Responsible
Officer obtains knowledge of an Event of Default or Default, it will deliver to
each holder an Officer’s Certificate specifying the nature and period of
existence thereof and what action the Company has taken, is taking or proposes
to take with respect thereto. Each holder is hereby authorized to deliver a copy
of any financial statement delivered to such holder pursuant to this paragraph
5A to any regulatory body having jurisdiction over such holder.

 

5B. INSPECTION OF PROPERTIES. The Company will permit any Person designated by
any holder in writing, at such holder’s expense if no Event of Default then
exists and at the Company’s expense if an Event of Default then exists, to visit
and inspect any of the properties of the Company and its Subsidiaries, to
examine the limited liability company or corporate books and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
limited liability

 

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companies or corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often as
such holder may reasonably request.

 

5C. COVENANT TO SECURE NOTES EQUALLY. The Company will, if it or any Subsidiary
shall create or assume any Lien upon any of its property or assets, whether now
owned or hereafter acquired, other than Liens permitted by the provisions of
paragraph 6C(l) (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to paragraph 11C), make or cause to be
made effective provision whereby the Notes will be secured by such Lien equally
and ratably with any and all other Debt thereby secured, so long as any such
other Debt shall be so secured; provided that the creation and maintenance of
such equal and ratable Lien shall not in any way limit or modify the right of
the holders of the Notes to enforce the provisions of paragraph 6C(1).

 

5D. COMPLIANCE WITH LAWS AND REGULATIONS. The Company will and will cause each
Subsidiary to be in material compliance with all laws and regulations
(including, but not limited to, those relating to equal employment opportunity
and employee health and safety) which are now in effect or may be legally
imposed in the future in any jurisdiction in which the Company and any
Subsidiary is doing business other than those laws and regulations which the
Company or such Subsidiary is contesting in good faith by appropriate
proceedings; provided, however, (i) the Company or such Subsidiary continues to
operate any affected business free of any requirement to escrow or sequester any
material amount of such business’ profits or revenues pending resolution of such
proceedings, or (ii) any non-compliance with any law or regulation could not
reasonably be expected to have a material adverse effect on the business,
operations, property or financial or other condition of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations hereunder.

 

5E. PATENTS, TRADE MARKS AND TRADE NAMES. The Company will and will cause each
Subsidiary to continue to own, or hold licenses for the use of, all copyrights,
franchises, licenses, marketing rights, patents, service marks, trade marks,
trade names, and rights in any of the foregoing, as in the aggregate are
necessary for the conduct of its business in the manner in which such business
is being conducted as of the date hereof except where failure to continue to own
or hold such licenses could not reasonably be expected to have a material
adverse effect on the business, operations, property or financial or other
condition of the Company and the Subsidiaries, taken as a whole, or the ability
of the Company to perform its obligations hereunder.

 

5F. INFORMATION REQUIRED BY RULE 144A. The Company will, upon the request of the
holder of any Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information as such holder
may reasonably determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in connection
with the resale of Notes, except at such times as the Company is subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act. For the
purpose of this paragraph 5B, the term “qualified institutional buyer” shall
have the meaning specified in Rule 144A under the Securities Act.

 

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5G. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will and will cause each of
its Subsidiaries to file all income tax or similar tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable by the Company or its Subsidiaries on such returns and all other taxes,
assessments, governmental charges, levies, trade accounts payable and claims for
work, labor or materials (all the foregoing being referred to collectively as
“CLAIMS”) payable by any of them, to the extent such Claims have become due and
payable and before they have become delinquent; provided, that neither the
Company nor any Subsidiary need pay any Claim if (i) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or such
Subsidiary has established adequate reserves therefor in accordance with
generally accepted accounting principles on its books or (ii) the nonpayment of
all such Claims in the aggregate could not reasonably be expected to have a
material adverse effect on the business, operations, property or financial or
other condition of the Company and its Subsidiaries, taken as a whole, or the
ability of the Company to perform its obligations hereunder.

 

5H. ERISA COMPLIANCE. The Company will, and will cause each ERISA Affiliate
controlled by the Company to, at all times:

 

(i) with respect to each Plan, make timely payments of contributions required to
meet the minimum funding standard set forth in ERISA or the Code with respect
thereto and, with respect to any Multiemployer Plan, make timely payment of
contributions required to be paid thereto as provided by Section 515 of ERISA,
and

 

(ii) comply with all other provisions of ERISA,

 

except for such failures to make contributions and failures to comply as could
not reasonably be expected to have a material adverse effect on the business,
operations, property or financial or other condition of the Guarantor and its
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations hereunder.

 

PARAGRAPH 6. NEGATIVE COVENANTS.

 

6. NEGATIVE COVENANTS. So long as any Note shall remain unpaid, the Company
covenants as follows:

 

6A. CHANGE OF BUSINESS. The Company will not change, and will not permit any
Material Subsidiary to change, in any material respect the purpose of its
business or operations from that of owning and operating the St. Louis
Post-Dispatch and other businesses directly or indirectly related thereto,
including certain businesses contributed to the Company pursuant to the
Contribution Agreement.

 

6B. LIMITATION ON DISTRIBUTIONS. The Company will not declare or make, or incur
any liability to declare or make, any distributions, except, the following:

 

(i) the distribution to Herald on the date hereof of the proceeds of the
issuance and sale of the Notes pursuant to Section 3.11(a) of the Limited
Liability Company Agreement;

 

9

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(ii) a distribution to Herald made pursuant to Section 3.11(b) of the Limited
Liability Company Agreement (as in effect on the date hereof); and

 

(iii) any other distribution permitted by the Formation/Contribution Documents,
provided, that both before and immediately after giving effect to any such
distribution, the “Reserve Asset Value” (as defined in the Limited Liability
Company Agreement as in effect on the date hereof) is at least equal to the
“Minimum Reserve Amount” (as defined in the Limited Liability Company Agreement
as in effect on the date hereof).

 

6C. LIEN, DEBT AND OTHER RESTRICTIONS. The Company will not, and will not permit
any Subsidiary to:

 

6C(1). LIENS. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes in accordance
with the provisions of paragraph 5C), except:

 

(i) Liens contemplated by, or arising as a result of, Section 2.8 of the
Contribution Agreement;

 

(ii) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other like
Liens arising or incurred in the ordinary course of business for amounts which
are not delinquent or are being actively contested in good faith by appropriate
proceedings;

 

(iii) with respect to real property, (a) easements, quasi-easements, licenses,
covenants, rights-of-way and other similar restrictions, including any other
agreements, conditions, restrictions or other matters which would be shown by a
current title report or other similar report or listing, (b) any conditions that
would be shown by a current survey or physical inspection and (c) zoning,
building and other similar restrictions;

 

(iv) Liens for taxes or assessments or other governmental charges or levies not
yet due or which are being actively contested in good faith by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or its Subsidiaries, as the case may be, in accordance with
generally accepted accounting principles;

 

(v) Liens on property or assets of a Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary;

 

10

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(vi) to the extent the Debt secured thereby is permitted under clause (v) of
paragraph 6C(2), (a) Liens securing Capitalized Lease Obligations of the Company
or its Subsidiaries, (b) Liens securing other Debt of the Company or its
Subsidiaries to finance the purchase price or cost of property acquired,
constructed or improved by the Company or any Subsidiary after the Date of
Closing (including, without limitation, pursuant to purchase price conditional
sales contracts) or (c) Liens existing on any property of any Person at the time
it becomes a Subsidiary, or existing prior to the time of acquisition upon any
property acquired by the Company or any Subsidiary through purchase, merger, or
consolidation or otherwise, whether or not assumed by the Company or such
Subsidiary, provided that any such Lien shall not encumber any other property of
the Company or such Subsidiary;

 

(vii) any Liens renewing, extending or refunding any Lien permitted by clause
(vi) above, provided that the principal amount secured is not increased and the
Lien is not extended to other property;

 

(viii) Liens consisting of financing statements filed under the Uniform
Commercial Code of any jurisdiction solely for precautionary or notice purposes
with respect to equipment leases; and

 

(ix) other Liens which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit, and which do not in the aggregate
materially impair the use of such property and assets in the operation of the
business of the Company and its Subsidiaries, or materially detract from the
value of such property or assets for the purpose of the business of the Company
and its Subsidiaries, taken as a whole.

 

6C(2). DEBT. Create, incur, assume, guarantee or in any way become liable for
any Debt except:

 

(i) Debt represented by the Notes;

 

(ii) Debt of the Company owing to the Guarantor; provided that such Debt is (a)
unsecured and (b) incurred pursuant to, and evidenced by, a Subordinated
Intercompany Note substantially in the form of Exhibit E attached hereto;

 

(iii) Debt of the Company or any of its Subsidiaries permitted under paragraph
6C(3);

 

(iv) Debt of the Company and its Subsidiaries consisting of trade payables
incurred in the ordinary course of business;

 

(v) (a) Debt of the Company and its Subsidiaries constituting Capitalized Lease
Obligations, (b) other Debt of the Company or its Subsidiaries to finance the
purchase price or cost of property acquired, constructed or improved by the
Company or

 

11

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any Subsidiary after the Date of Closing, or (c) Debt secured by Liens existing
on any property of any Person at the time it becomes a Subsidiary, or existing
prior to the time of acquisition upon any property acquired by the Company or
any Subsidiary through purchase, merger, or consolidation or otherwise, and
assumed by the Company or such Subsidiary, in each case the extent such Liens
are permitted under clause (vi) of paragraph 6C(1), provided that the aggregate
principal amount of all such Debt described in subclauses (a), (b) and (c) of
this clause (v) at any time outstanding shall not exceed $15,000,000; and

 

(vi) Debt secured by Liens permitted under clauses (v) and (vii) of paragraph
6C(1) (provided, in the case of Liens permitted under clause (vii) of paragraph
6C(1) that renew, extend or refund any Lien permitted under clause (vi) of
paragraph 6C(1), that such Liens shall be permitted only to the extent the Debt
secured thereby is permitted under clause (v) of this paragraph 6C(2)).

 

6C(3). LOANS, ADVANCES AND INVESTMENTS. Make, or permit to remain outstanding,
any loan or advance to, or own, purchase or acquire any stock, obligations or
securities of, or any interest in, or make any capital contribution to, any
Person, except that the Company or any Subsidiary may:

 

(i) make or permit to remain outstanding loans, advances or capital
contributions to any Subsidiary;

 

(ii) make or permit to remain outstanding any loans, advances or capital
contributions from any Subsidiary to the Company or any other Subsidiary;

 

(iii) own, purchase or acquire stock, obligations or securities of or other
equity interests in a Subsidiary or a Person which immediately after such
purchase or acquisition will be a Subsidiary;

 

(iv) make and permit to remain outstanding investments in notes receivable which
are received pursuant to (a) the sale of all or substantially all of a business
or operations or (b) the sale of used equipment in the ordinary course of
business, but in each case only to the extent that the aggregate uncollected
amount of all such notes receivable, together with all such notes receivable of
the Guarantor and its Subsidiaries, would be permitted under clause (iv) of
Section 5.4 of the Guaranty Agreement;

 

(v) make and permit to remain outstanding loans, advances and other investments
received in settlement of debts (created in the ordinary course of business)
owing to the Company or any Subsidiary;

 

(vi) own, purchase or acquire commercial paper issued by any corporation or
bankers’ acceptances issued by any member bank of the Federal Reserve System, in
either case, maturing within one year of the date of purchase and rated, by at
least two of

 

12

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Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc. and Fitch
Investors Service, Inc., “A-1”, “P-1” and “F-1”, respectively, and payable in
the United States in United States dollars;

 

(vii) own, purchase or acquire certificates of deposit in member banks of the
Federal Reserve System (each having capital resources in excess of $75,000,000)
or certificates of deposit in an aggregate amount not to exceed $2,000,000 in
banks having capital resources of less than $75,000,000), all due within one
year from the date of original issue thereof and payable in the United States in
United States dollars;

 

(viii) own, purchase or acquire repurchase agreements of member banks of the
Federal Reserve System (each having capital resources in excess of $75,000,000)
for terms of less than one year in respect of the foregoing certificates and
obligations;

 

(ix) own, purchase or acquire obligations of the United States government or any
agency thereof;

 

(x) own, purchase or acquire obligations guaranteed by the United States
government or any agency thereof;

 

(xi) own, purchase or acquire investments in stocks of investment companies
registered under the Investment Company Act of 1940 which invest primarily in
obligations of the type described in clauses (vi), (vii), (viii), (ix) or (x)
above, provided that any such investment company shall have an aggregate net
asset value of not less than $500,000,000;

 

(xii) own, purchase or acquire investments in money market mutual funds that are
classified as current assets in accordance with generally accepted accounting
principles, that are rated “AAAm” by Standard & Poor’s Ratings Group and that
invest solely in investments described in clauses (vi), (vii), (viii), (ix) or
(x) above, which funds are managed by Persons having capital and surplus in
excess of $500,000,000;

 

(xiii) own, purchase or acquire (a) asset-backed securities, mortgage-backed
securities and collateralized mortgage obligations issued by any entity and
rated at least Aa3 by Moody’s Investors Service, Inc. or AA- by Standard &
Poor’s Ratings Group and (b) notes and bonds issued by any domestic corporate
issuer and rated at least A3 by Moody’s Investors Service, Inc. or A- by
Standard & Poor’s Ratings Group;

 

(xiv) endorse negotiable instruments for collection in the ordinary course of
business;

 

(xv) make or permit to remain outstanding travel and other like advances to
officers and employees in the ordinary course of business;

 

13

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(xvi) make or permit to remain outstanding investments in demand deposit
accounts maintained by the Company or any Subsidiary in the ordinary course of
its business;

 

(xvii) make or permit to remain outstanding investments consisting of Eurodollar
time deposits, maturing within three months after the making thereof, with any
branch of a United States commercial bank having capital and surplus of not less
than $1 billion in the aggregate;

 

(xviii) make or permit to remain outstanding investments in municipal
obligations having a rating of “Aaa” by Moody’s Investors Service, Inc., or
“AAA” by Standard & Poor’s Ratings Group; and

 

(xix) make or permit to remain outstanding any other loan or advance to, or own,
purchase or acquire any other stock, obligations or securities of, or any other
interest in, or make any other capital contribution to any Person, provided that
the aggregate amount thereof, together with the aggregate amount of all such
loans, advances and investments of the Guarantor and its Subsidiaries, would be
permitted under clause (xxi) of Section 5.4 of the Guaranty Agreement.

 

6C(4). SALE OR DISPOSITION OF CAPITAL ASSETS. Sell or dispose of capital assets
(including capital stock or other equity interests), except (i) sales of
obsolete or worn-out equipment in the ordinary course of business, (ii) sales of
interests in any Subsidiary that is not a Material Subsidiary and (iii) sales by
the Company or any Subsidiary of its interest in the internet service provider
business located in St. Louis.

 

6C(5). SALE AND LEASE-BACK. Enter into any arrangement with any lender or
investor or under which such lender or investor is a party, providing for the
leasing or other similar arrangement by the Company or any Subsidiary of real or
personal property used by the Company or any Subsidiary in the operations of the
Company or any Subsidiary, which has been or is sold or transferred by the
Company or any Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such rental obligations of the Company or such Subsidiary.

 

6C(6). MERGER. Merge or consolidate with any other Person, except that any
Subsidiary may merge or consolidate with the Company (provided that the Company
shall be the continuing or surviving Person) or any one or more other
Subsidiaries; provided that nothing in this paragraph 6C(6) shall restrict the
ability of any Subsidiary which is not a Material Subsidiary to merge or
consolidate with any Person.

 

6C(7). TRANSACTIONS WITH AFFILIATES. Except with respect to transactions
involving the allocation of costs and expenses among the Guarantor and its
Subsidiaries (including the Company and its Subsidiaries) in respect of
insurance, technical support, compensation and benefits, overhead allocation and
other similar administrative costs and expenses, directly or

 

14

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indirectly enter into or be a party to any transaction or arrangement,
including, without limitation, the purchase, sale, exchange or use of any
property or asset, or any interest therein, whether real, personal or mixed, or
tangible or intangible, or the rendering of any service, with any Affiliate,
except transactions in the ordinary course of and pursuant to the reasonable
requirements of the Company’s and each Subsidiary’s business, as the case may
be, and upon fair and reasonable terms that are no less favorable to the Company
and the Subsidiaries, as the case may be, than those which might be obtained in
an arm’s length transaction with a Person not an Affiliate. For avoidance of
doubt, the reference in this paragraph 6C(7) to transactions with “any
Affiliate” shall be understood to exclude both (i) transactions between the
Company and any Subsidiary and (ii) transactions between a Subsidiary of the
Company and any other Subsidiary of the Company.

 

6C(8). ISSUANCE OR SALE OF STOCK OF SUBSIDIARIES. Issue, sell or otherwise
dispose of, or part with control of, any shares of stock of or other equity
interests in any Subsidiary (other than a Subsidiary which is not a Material
Subsidiary), except to the Company or another Subsidiary.

 

6C(9). SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, discount (other than
to the extent of finance and interest charges included therein) or otherwise
sell for less than face value thereof, any of its notes or accounts receivable,
except notes or accounts receivable of the Company or its Subsidiaries the
collection of which is doubtful in accordance with generally accepted accounting
principles.

 

6D. RESTRICTIONS UPON MODIFICATION OF LIMITED LIABILITY COMPANY AGREEMENT. The
Company will not alter, amend or modify, or permit the alteration, amendment or
modification of, any provision of Article IV or Article VI of the Limited
Liability Company Agreement.

 

6E. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. Except as set forth in the
Limited Liability Company Agreement (as in effect on the date hereof), the
Company will not and will not permit any of its Subsidiaries to enter into or
suffer to exist any contractual obligation, other than this Agreement, which in
any way restricts the ability of the Company or any of its Subsidiaries to (a)
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, (b) make any payments in respect of the Notes required under
this Agreement, (c) make any dividends or distributions or (d) transfer any of
its property or assets to the Company or a Subsidiary of the Company.

 

PARAGRAPH 7. EVENTS OF DEFAULT.

 

7. EVENTS OF DEFAULT.

 

7A. ACCELERATION. If any of the following events shall occur and be continuing
for any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law or otherwise):

 

(i) the Company defaults in the payment of any principal of or Yield-Maintenance
Amount payable with respect to any Note when the same shall become due, either
by the terms thereof or otherwise as herein provided; or

 

15

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(ii) the Company defaults in the payment of any interest on any Note for more
than 5 Business Days after the date due; or

 

(iii) (a) any representation or warranty made by the Company herein or in any
writing furnished in connection with or pursuant to this Agreement shall be
false in any material respect on the date as of which made, or (b) any
representation or warranty made by Herald to or in favor of the holders, or upon
which the holders have been authorized by Herald to rely, or any certification
made by or on behalf of Herald to or in favor of the Guarantor pursuant to
Section 2.9 of the Contribution Agreement, shall be false in any material
respect on the date as of which made; or

 

(iv) the Company fails to perform or observe any agreement contained in
paragraph 6; or

 

(v) the Company fails to perform or observe any other agreement, term or
condition contained herein and such failure shall not be remedied within 30 days
after any Responsible Officer of the Company obtains actual knowledge thereof;
or

 

(vi) the Company or any Material Subsidiary makes an assignment for the benefit
of creditors or is generally not able to pay its debts as such debts become due;
or

 

(vii) any decree, judgment, or order for relief in respect of the Company or any
Material Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the “BANKRUPTCY
LAW”), of any jurisdiction; or

 

(viii) the Company or any Material Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official of the Company or
any Material Subsidiary, or of any substantial part of the assets of the Company
or any Material Subsidiary, or commences a voluntary case under the Bankruptcy
Law of the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Material Subsidiary) relating to the
Company or any Material Subsidiary under the Bankruptcy Law of any other
jurisdiction; or

 

(ix) any such petition or application is filed, or any such proceedings are
commenced, against the Company or any Material Subsidiary and the Company or
such Material Subsidiary by any act indicates its approval thereof, consent
thereto or acquiescence therein, or an order, judgment or decree is entered
appointing any such

 

16

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trustee, receiver, custodian, liquidator or similar official, or approving the
petition in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or

 

(x) any order, judgment or decree is entered in any proceedings against the
Company or any Material Subsidiary decreeing the dissolution of the Company or
such Material Subsidiary and such order, judgment or decree remains unstayed and
in effect for more than 60 days; or

 

(xi) one or more final judgments in an aggregate amount in excess of $10,000,000
is rendered against the Guarantor, the Company or any of their respective
Subsidiaries and, within 60 days after entry thereof, any such judgment is not
discharged or execution thereof stayed pending appeal, or within 60 days after
the expiration of any such stay, such judgment is not discharged; or

 

(xii) (a) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under section 412 of
the Code, (b) a notice of intent to terminate any Plan in a distress termination
(within the meaning of ERISA section 4041(c)) shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a
Plan may become a subject of such proceedings, (c) the aggregate “amount of
unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall
exceed $5,000,000, (d) the Company or any ERISA Affiliate shall have incurred or
is reasonably expected to incur any liability pursuant to Title I or IV of ERISA
or the penalty or excise tax provisions of the Code relating to employee benefit
plans, (e) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (f) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary thereunder;
and any such event or events described in clauses (a) through (f) above, either
individually or together with any other such event or events, could reasonably
be expected to have a material adverse effect on the business, operations,
property or financial or other condition of the Guarantor and its Subsidiaries,
taken as a whole, or the ability of the Company to perform its obligations
hereunder; or

 

(xiii) any provision of the Guaranty Agreement shall for any reason cease to be
valid and binding on the Guarantor or the Guarantor shall so assert in writing;
or

 

(xiv) a Guaranty Event of Default shall have occurred and be continuing;

 

17

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then (A) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, the holder of any Note (other than the Company or any of its
Subsidiaries or Affiliates) may at its option during the continuance of such
Event of Default, by notice in writing to the Company, declare such Note to be,
and such Note shall thereupon be and become, immediately due and payable at par,
together with interest accrued thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company, (B) if
such event is an Event of Default specified in clause (vii), (viii) or (ix) of
this paragraph 7A with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and payable, together
with interest accrued thereon and the Yield-Maintenance Amount, if any, with
respect to each Note, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, and (C) with respect to any
event constituting an Event of Default (including an event described in clause
(A) above), the holder or holders of at least 66 2/3% of the aggregate principal
amount of Notes then outstanding may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the Notes
shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to each Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.

 

The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of the Yield-Maintenance Amount by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

 

7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes shall
have been declared immediately due and payable pursuant to paragraph 7A, the
holder or holders of at least 66 2/3% of the aggregate principal amount of Notes
then outstanding may, by notice in writing to the Company, rescind and annul
such declaration and its consequences if (i) the Company shall have paid all
overdue interest on the Notes, the principal of and Yield-Maintenance Amount, if
any, payable with respect to any Notes which have become due otherwise than by
reason of such declaration, and interest on such overdue interest and overdue
principal and Yield-Maintenance Amount at the rate specified in the Notes, (ii)
the Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and (iv)
no judgment or decree shall have been entered for the payment of any amounts due
pursuant to the Notes or this Agreement. No such rescission or annulment shall
extend to or affect any subsequent Event of Default or Default or impair any
right arising therefrom.

 

7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be declared
immediately due and payable pursuant to paragraph 7A or any such declaration
shall be

 

18

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rescinded and annulled pursuant to paragraph 7B, the Company shall forthwith
give written notice thereof to the holder of each Note at the time outstanding.

 

7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.

 

PARAGRAPH 8. REPRESENTATIONS, COVENANTS AND WARRANTIES.

 

8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants
and warrants as follows:

 

8A. ORGANIZATION AND QUALIFICATION; DUE AUTHORIZATION. The Company is a limited
liability company duly organized and existing in good standing under the laws of
the State of Delaware. Each Material Subsidiary is duly organized and existing
in good standing under the laws of the jurisdiction in which it is incorporated
or otherwise organized. The Company has and each Material Subsidiary has the
limited liability company or corporate power, as applicable, to own its
respective property and to carry on its respective business as now being
conducted, and the Company is and each Material Subsidiary is duly qualified as
a foreign limited liability company or foreign corporation, as applicable, to do
business and in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole. The Company
has the limited liability company power and authority to execute and deliver
this Agreement and the Notes and to perform the provisions hereof and thereof.
The execution, delivery and performance by the Company of this Agreement and the
Notes have been duly authorized by all necessary limited liability company
action.

 

8B. FINANCIAL STATEMENTS. The Company has caused to be furnished to you the
following financial statements, identified by a principal financial officer of
the Guarantor: a consolidated balance sheet of the Guarantor (or its
predecessor, Pulitzer Publishing Company) and its Subsidiaries as at December 31
in each of the years 1997 to 1999, inclusive, and statements of consolidated
income, financial position and cash flows of the Guarantor (or its predecessor,
Pulitzer Publishing Company) and its Subsidiaries for each such year all audited
by Deloitte & Touche L.L.P. Such financial statements (including any related
schedules and/or notes) are true and correct in all material respects, have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved

 

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and show all liabilities, direct and contingent, of the Guarantor (or its
predecessor, Pulitzer Publishing Company) and its Subsidiaries required to be
shown in accordance with such principles. The balance sheets fairly present the
condition of the Guarantor (or its predecessor, Pulitzer Publishing Company) and
its Subsidiaries as at the dates thereof, and the statements of income and
statements of financial position and cash flows fairly present the results of
the operations of the Guarantor (or its predecessor, Pulitzer Publishing
Company) and its Subsidiaries for the periods indicated. There has been no
material adverse change in the business, condition or operations (financial or
otherwise) of the Guarantor and its Subsidiaries taken as a whole since December
31, 1999.

 

8C. ACTIONS PENDING. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which might result in any material adverse change in the
business, condition or operations of the Company and its Subsidiaries taken as a
whole. There is no action, suit, investigation or proceeding pending or
threatened against the Company or any of its Subsidiaries which purports to
affect the validity or enforceability of this Agreement or any Note.

 

8D. OUTSTANDING DEBT. Neither the Company nor any of its Subsidiaries has
outstanding any Debt except as permitted by paragraph 6C(2). There exists no
default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto.

 

8E. TITLE TO PROPERTIES. The Company has and each of its Material Subsidiaries
has good and marketable title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets (including all properties and assets contributed to the
Company in the Formation/Contribution Transactions), subject to no Lien of any
kind except Liens permitted by paragraph 6C(l). All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
its Subsidiaries are valid and subsisting and are in full force and effect.

 

8F. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement or subject to any charter
or other limited liability company or corporate restriction which materially and
adversely affects the business, property or assets, or financial condition of
the Company and its Subsidiaries, taken as a whole. Neither the execution nor
delivery of this Agreement, the Notes or the Formation/Contribution Documents,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes and the
Formation/Contribution Documents will conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under, or result
in any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its Subsidiaries pursuant to, the
limited liability company agreement, charter, by-laws or other organizational
documents of the Company or any of its Subsidiaries, any award of any arbitrator
or any agreement (including any agreement with members or stockholders),
instrument, order, judgment, decree, statute, law, rule or

 

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regulation to which the Company or any of its Subsidiaries is subject, except to
the extent any such conflict, breach, defaults, violation or creation of a Lien
could not reasonably be expected to have a material adverse effect on the
business, operations, property or financial or other condition of the Company
and its Subsidiaries, taken as a whole, or the ability of the Company to perform
its obligations hereunder. Except as set forth in the Limited Liability Company
Agreement (as in effect on the date hereof), neither the Company nor any of its
Subsidiaries is a party to, or otherwise subject to any provision contained in,
any instrument evidencing indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
limited liability company agreement, charter or other organizational documents)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Debt of the Company of the type to be evidenced by the Notes.

 

8G. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf
has, directly or indirectly, offered the Notes or any similar security of the
Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than the Purchasers, and neither the Company nor
any agent acting on its behalf has taken or will take any action which would
subject the issuance or sale of the Notes to the provisions of Section 5 of the
Securities Act, or to the provisions of any securities or Blue Sky law of any
applicable jurisdiction.

 

8H. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or has any
present intention of acquiring any “margin stock” as defined in Regulation U (12
CFR Part 221) of the Board of Governors of the Federal Reserve System (“MARGIN
STOCK”). The proceeds of sale of the Notes will be used in connection with the
formation and capitalization of the Company pursuant to and in accordance with
the Formation/Contribution Documents. None of such proceeds will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any indebtedness which was originally incurred
to purchase or carry any stock that is currently a margin stock or for any other
purpose which might constitute this transaction a “purpose credit” within the
meaning of such Regulation U. Neither the Company nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or the
Notes to violate Regulation U, Regulation T or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Exchange Act, in
each case as in effect now or as the same may hereafter be in effect.

 

8I. ERISA. No accumulated funding deficiency (as defined in section 302 of ERISA
and section 412 of the code), whether or not waived, exists with respect to any
Plan. No liability to the PBGC has been or is expected by the Company, any
Subsidiary or any ERISA Affiliate to be incurred with respect to any Plan by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the Guarantor and its Subsidiaries taken as a whole. Neither the
Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
Guarantor and its Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the issuance and sale of the Notes will

 

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not involve any transaction which is subject to the prohibitions of section 406
of ERISA or in connection with which a tax could be imposed pursuant to section
4975 of the Code. The representation by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of the representation of each
Purchaser in paragraph 9B.

 

8J. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of closing with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement, the offering,
issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.

 

8K. BUSINESS; ACTIVITIES. The Company has not engaged in any business or
activities prior to the date of this Agreement, except for activities related to
its formation and organization and prospective operations as described in the
Formation/Contribution Documents.

 

8L. OWNERSHIP OF COMPANY. All capital contributions required in respect of the
limited liability company interests of the Company will, upon funding of the
Notes, have been made, subject to the provisions of Section 2.8 of the
Contribution Agreement.

 

8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or
statement furnished to you by or on behalf of the Company in connection herewith
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances at the time made. There is no fact
peculiar to the Company or any of its Subsidiaries which materially adversely
affects or in the future may (so far as the Company can now foresee) materially
adversely affect the business, property or assets, or financial condition of the
Company and its Subsidiaries taken as a whole and which has not been set forth
in this Agreement or in the other documents, certificates and statements
furnished to you by or on behalf of the Company prior to the date hereof in
connection with the transactions contemplated hereby.

 

8N. FORMATION/CONTRIBUTION DOCUMENTS. Each of the Formation/Contribution
Documents has been duly executed and delivered by the Guarantor and any of its
Subsidiaries parties thereto and constitutes the valid and binding agreement of
such parties, enforceable against each in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors’ rights generally and the exercise of
judicial discretion in accordance with general equitable principles. There
exists no material default by the Guarantor or any of its Subsidiaries (or, to
the knowledge of the Company, by Herald) under any Formation/Contribution
Document.

 

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8O. SOLVENCY. The Guarantor and the Company, individually, and the Guarantor and
its Subsidiaries, on a consolidated basis, are Solvent, both before and after
giving effect to this Agreement, the Guaranty Agreement, the
Formation/Contribution Documents and the transactions contemplated hereby and
thereby.

 

8P. REPRESENTATIONS AND WARRANTIES IN FORMATION/CONTRIBUTION DOCUMENTS. To
induce the Purchasers to enter into this Agreement and to purchase the Notes to
be purchased by them hereunder, the Company agrees that each Purchaser shall be
entitled to rely upon each of the representations and warranties of the Company
set forth in any of the Formation/Contribution Documents as fully as if set
forth in this Agreement.

 

PARAGRAPH 9. REPRESENTATIONS OF THE PURCHASERS.

 

9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents as follows:

 

9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes to be
purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of its property shall at all times be and remain within its control.

 

9B. SOURCE OF FUNDS. The source of the funds being used by such Purchaser to pay
the purchase price of the Notes being purchased by such Purchaser hereunder
constitutes assets: (i) allocated to the “insurance company general account” of
such Purchaser (as such term is defined under Section V of the United States
Department of Labor’s Prohibited Transaction Class Exemption 95-60, issued July
12, 1995 (“PTCE 95-60”), and as of the date of the purchase of the Notes such
Purchaser satisfies all of the applicable requirements for relief under Sections
I and IV of PTCE 95-60, (ii) allocated to a separate account maintained by such
Purchaser in which no employee benefit plan, other than employee benefit plans
identified on a list which has been furnished by such Purchaser to the Company,
participates to the extent of 10% or more, or (iii) of an investment fund, the
assets of which do not include assets of any employee benefit plan within the
meaning of ERISA. For the purpose of this paragraph 9B, the terms “SEPARATE
ACCOUNT” and “EMPLOYEE BENEFIT PLAN” shall have the respective meanings
specified in section 3 of ERISA.

 

9C. INDEPENDENT INVESTIGATION. Each Purchaser has made its own independent
investigation of the condition (financial and otherwise), prospects and affairs
of the Guarantor, the Company and their respective Subsidiaries in connection
with its purchase of the Notes hereunder and has made and shall continue to make
its own appraisal of the creditworthiness of the Company and the Guarantor. No
holder of Notes shall have any duty or responsibility to any other holder of
Notes, either initially or on a continuing basis, to make any such investigation
or appraisal or to provide any credit or other information with respect thereto.
No holder of Notes is acting as agent or in any other fiduciary capacity on
behalf of any other holder of Notes.

 

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PARAGRAPH 10. DEFINITIONS; ACCOUNTING MATTERS.

 

10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement, the
terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.

 

10A. YIELD-MAINTENANCE TERMS.

 

“BUSINESS DAY” shall mean any day on which banks are open for business in New
York City (other than a Saturday, a Sunday or a legal holiday in the States of
New York or New Jersey).

 

“CALLED PRINCIPAL” shall mean, with respect to any Note, the principal of such
Note that is to be prepaid pursuant to paragraph 4A or has become or is declared
to be immediately due and payable pursuant to paragraph 7A, as the context
requires.

 

“DISCOUNTED VALUE” shall mean, with respect to the Called Principal of any Note,
the amount obtained by discounting all Remaining Scheduled Payments with respect
to such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on the Notes is payable, if interest is
payable other than on a semi-annual basis) equal to the Reinvestment Yield with
respect to such Called Principal.

 

“REINVESTMENT YIELD” shall mean, with respect to the Called Principal of any
Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as “Page 678” on the Bridge Telerate Service (or such other display as may
replace Page 678 on the Bridge Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable (including by way of interpolation), (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.

 

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“REMAINING AVERAGE LIFE” shall mean, with respect to the Called Principal of any
Note, the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products obtained
by multiplying (a) each Remaining Scheduled Payment of such Called Principal
(but not of interest thereon) by (b) the number of years (calculated to the
nearest one-twelfth year) which will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

 

“REMAINING SCHEDULED PAYMENTS” shall mean, with respect to the Called Principal
of any Note, all payments of such Called Principal and interest thereon that
would be due on or after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date.

 

“SETTLEMENT DATE” shall mean, with respect to the Called Principal of any Note,
the date on which such Called Principal is to be prepaid pursuant to paragraph
4A or has become or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.

 

“YIELD-MAINTENANCE AMOUNT” shall mean, with respect to any Note, an amount equal
to the excess, if any, of the Discounted Value of the Called Principal of such
Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no event be less
than zero.

 

10B. OTHER TERMS.

 

“AFFILIATE” shall mean any Person directly or indirectly controlling, controlled
by, or under direct or indirect common control with, the Company, except a
Subsidiary. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.

 

“BANKRUPTCY LAW” shall have the meaning specified in clause (vii) of paragraph
7A.

 

“CAPITALIZED LEASE OBLIGATION” shall mean any rental obligation which, under
generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.

 

“CLAIMS” shall have the meaning specified in paragraph 5G.

 

“CLOSING” or “DATE OF CLOSING” shall have the meaning specified in paragraph 2.

 

“CODE” shall mean the Internal Revenue Code of 1986, as amended.

 

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“COMPANY” shall have the meaning specified in the introductory paragraph of this
Agreement.

 

“CONTRIBUTION AGREEMENT” shall mean that certain Joint Venture Agreement, dated
as of May 1, 2000, among the Guarantor, Pulitzer Technologies, Inc., Herald and
the Company, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“DEBT” shall mean and include without duplication:

 

(i) all obligations for borrowed money or obligations represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments and all
obligations upon which interest charges are customarily paid;

 

(ii) Capitalized Lease Obligations;

 

(iii) indebtedness secured by any Lien existing on property owned by the Company
or any Subsidiary subject to such Lien, whether or not the indebtedness secured
thereby shall have been assumed by the Company or any Subsidiary;

 

(iv) guarantees, endorsements (other than endorsements of negotiable instruments
for collection in the ordinary course of business) and other contingent
liabilities (whether direct or indirect) in connection with the obligations,
stock or dividends of any Person;

 

(v) obligations under any contract providing for the making of loans, advances
or capital contributions to any Person, or for the purchase of any property from
any Person, in each case in order to enable such Person primarily to maintain
working capital, net worth or any other balance sheet condition or to pay debt,
dividends or expenses;

 

(vi) obligations under any contract for the purchase of materials, supplies or
other property from any Person if such contract (or any related document)
requires that payment for such materials, supplies or other property shall be
made regardless of whether or not delivery of such materials, supplies or other
property is ever made or tendered;

 

(vii) obligations under any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides that the
obligation to make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general use or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor;

 

(viii) obligations under any contract for the sale or use of materials, supplies
or other property, or the rendering of services, if such contract (or any
related document)

 

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requires that payment for such materials, supplies or other property, or the use
thereof, or payment for such services, shall be subordinated to any indebtedness
(of the purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to any
Person; and

 

(ix) obligations under any other contract which, in economic effect, is
substantially equivalent to a guarantee;

 

provided, however, that Debt shall not include loans, advances and capital
contributions by the Company to any Subsidiary or by any Subsidiary to the
Company or another Subsidiary or a guarantee of the obligations of a Subsidiary
under an executory contract to purchase or sell a business.

 

“DEFAULT” shall mean any of the events specified in paragraph 7A, whether or not
any requirement for such event to become an Event of Default has been satisfied.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

“ERISA AFFILIATE” shall mean any Person which is a member of the same controlled
group of Persons as the Company within the meaning of section 414(b) of the
Code, or any trade or business which is under common control with the Company
within the meaning of section 414(c) of the Code.

 

“EVENT OF DEFAULT” shall mean any of the events specified in paragraph 7A,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act.

 

“EXCHANGE ACT” shall mean the Securities Exchange Act of 1934, as amended.

 

“FORMATION/CONTRIBUTION DOCUMENTS” shall mean (i) the Limited Liability Company
Agreement, (ii) the Contribution Agreement and (iii) all other written
agreements, documents, instruments and certificates now or hereafter executed
and delivered by any Person which are required to consummate the
Formation/Contribution Transactions (excluding the Indemnity Agreement), and any
and all amendments, supplements and other modifications thereof and all
renewals, extensions, restatement or substitutions from time to time of all or
any of the foregoing.

 

“FORMATION/CONTRIBUTION TRANSACTIONS” shall mean the formation and organization
of the Company, the contribution to the Company by its members of certain assets
used in connection with the ownership and operation of the St. Louis
Post-Dispatch and certain related transactions, all pursuant to and in
accordance with the terms and conditions of the Formation/Contribution
Documents.

 

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“GUARANTY AGREEMENT” shall mean the Guaranty Agreement, dated as of even date
herewith, made by the Guarantor in favor of the holders of the Notes,
substantially in the form of Exhibit F attached hereto, as amended, supplemented
or otherwise modified from time to time.

 

“GUARANTOR” shall mean Pulitzer Inc., a Delaware corporation.

 

“GUARANTY DEFAULT” shall mean a “Default” under the Guaranty Agreement (as such
term is defined therein).

 

“GUARANTY EVENT OF DEFAULT” shall mean an “Event of Default” under the Guaranty
Agreement (as such term is defined therein).

 

“HERALD” shall mean The Herald Company, Inc., a New York corporation.

 

“INCLUDING” shall mean, unless the context clearly requires otherwise,
“including without limitation”.

 

“INDEMNITY AGREEMENT” shall mean that certain Indemnity Agreement, dated as of
May 1, 2000, between the Guarantor and Herald, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“LIEN” shall mean any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or performance of an obligation,
provided, that in no event shall the term “Lien” include (i) any right, title or
interest of a lessor with respect to any lease of real or personal property
under which the lessee’s obligations are not Capitalized Lease Obligations or
(ii) the provisions of Sections 3.11(a) and 3.11(b) of the Limited Liability
Company Agreement (as in effect on the date hereof) requiring the making of the
distributions to Herald specified therein.

 

“LIMITED LIABILITY COMPANY AGREEMENT” shall mean the Operating Agreement of the
Company, dated as of May 1, 2000, entered into by and among the Guarantor,
Pulitzer Technologies, Inc. and Herald, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

“MATERIAL SUBSIDIARY” shall mean (i) postnet.com LLC, (ii) SCR Associates LLC
and (iii) any other Subsidiary of the Company (whether now existing or hereafter
acquired or organized) which has gross assets of more than $10,000,000 or has
contributed more than 5% of the consolidated revenues of the Company and its
Subsidiaries (in each case as reflected in the consolidated and consolidating
financial statements of the Guarantor and its Subsidiaries as of the end of the
most recently concluded fiscal year).

 

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“MULTIEMPLOYER PLAN” shall mean any employee pension benefit plan which is a
“multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

 

“OFFICER’S CERTIFICATE” shall mean a certificate signed in the name of the
Company or the Guarantor, as applicable, by its President, one of its Vice
Presidents or its Treasurer.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor or
replacement entity thereto under ERISA.

 

“PERSON” shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

 

“PLAN” shall mean any “employee pension benefit plan” (as such term is defined
in section 3 of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by the Company or any ERISA
Affiliate, other than a Multiemployer Plan.

 

“PURCHASER” shall mean each Person named on the Purchaser Schedule attached
hereto.

 

“REQUIRED HOLDER(S)” shall mean the holder or holders of at least 51% of the
aggregate principal amount of the Notes from time to time outstanding.

 

“RESPONSIBLE OFFICER” shall mean the chief executive officer, general counsel
(if any), principal financial officer or principal accounting officer of the
Company or the Guarantor, as applicable.

 

“SECURITIES ACT” shall mean the Securities Act of 1933, as amended.

 

“SOLVENT” shall mean, with respect to any Person as of the date of any
determination, that on such date (i) the fair value of the property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature and (v) such Person
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person’s property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and

 

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circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

 

“SUBSIDIARY” shall mean, as to the Company (or any other Person), any other
corporation, limited liability company, association or other business entity
organized under the laws of any state of the United States of America, Canada or
any province of Canada which conducts the major portion of its business in and
makes the major portion of its sales to Persons located in the United States of
America or Canada, and all of the stock of every class of which (except
directors’ qualifying shares) or other equity interests in which shall, at the
time as of which any determination is being made, be owned by the Company (or
such other Person), either directly or through Subsidiaries. Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a
Subsidiary of the Company.

 

“TRANSFEREE” shall mean any institutional investor that is a direct or indirect
transferee of all or any part of any Note purchased under this Agreement.

 

10C. ACCOUNTING AND LEGAL PRINCIPLES, TERMS AND DETERMINATIONS. All references
in this Agreement to “GENERALLY ACCEPTED ACCOUNTING PRINCIPLES” shall mean
generally accepted accounting principles, as in effect in the United States from
time to time. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with the most recent audited
consolidated financial statements of the Guarantor and its Subsidiaries
delivered pursuant to clause (i) or (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in paragraph 8B. Any reference herein to any specific citation,
section or form of law, statute, rule or regulation shall refer to such new,
replacement or analogous citation, section or form should citation, section or
form be modified, amended or replaced.

 

PARAGRAPH 11. MISCELLANEOUS

 

11. MISCELLANEOUS.

 

11A. NOTE PAYMENTS. So long as any Purchaser shall hold any Note, the Company
will make payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note, which comply with the terms of this
Agreement, by wire transfer of immediately available funds for credit (not later
than 1:00 p.m., New York City time, on the date due) to such Purchaser’s account
or accounts as specified in the Purchaser Schedule attached hereto, or such
other account or accounts in the United States as such Purchaser may designate
in writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. Each Purchaser agrees that, before disposing of
any Note, it will make a notation thereon (or on a schedule attached thereto) of
all principal payments previously made thereon and of the date to which interest
thereon has been paid. The

 

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Company agrees to afford the benefits of this paragraph 11A to any Transferee
which shall have made the same agreement as the Purchasers have made in this
paragraph 11A. No holder shall be required to present or surrender any Note or
make any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, the applicable holder shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal
executive office.

 

11B. EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated, the Company shall pay, and save each Purchaser and any Transferee
harmless against liability for the payment of, all out-of-pocket expenses
arising in connection with such transactions, including:

 

(i) (a) all stamp and documentary taxes and similar charges and (b) costs of
obtaining a private placement number for the Notes;

 

(ii) document production and duplication charges and the fees and expenses of
any special counsel engaged by such Purchaser or such Transferee in connection
with (a) this Agreement and the transactions contemplated hereby (subject,
however, to the terms and conditions of the letter agreement dated March 24,
2000 between the Guarantor and The Prudential Insurance Company of America) and
(b) any subsequent proposed waiver, amendment or modification of, or proposed
consent under, this Agreement, whether or not such the proposed action shall be
effected or granted; and

 

(iii) the costs and expenses, including attorneys’ fees, incurred by such
Purchaser or such Transferee in enforcing (or determining whether or how to
enforce) any rights under this Agreement, the Guaranty Agreement or the Notes or
in responding to any subpoena or other legal process served upon such Person in
connection with this Agreement or the transactions contemplated hereby or by
reason of such Purchaser or such Transferee having acquired any Note, including
without limitation costs and expenses incurred in any workout, restructuring or
renegotiation proceeding or bankruptcy case.

 

The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
Transferee and the payment of any Note.

 

11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) except that,
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to this Agreement shall change the maturity of any
Note, or change the principal of, or the rate, method of computation or time of
payment of interest on or any Yield-Maintenance Amount payable with respect to
any Note, or affect the time, amount or allocation of any prepayments, or change
the

 

31

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proportion of the principal amount of the Notes required with respect to any
consent, amendment, waiver or declaration. Each holder of any Note at the time
or thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. The Company will
not directly or indirectly pay or cause to be paid any remuneration, whether by
way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such waiver or
amendment. As used herein and in the Notes, the term “THIS AGREEMENT” and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

 

11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes
are issuable as registered notes without coupons in denominations of at least
$100,000, except as may be necessary to (i) reflect any principal amount not
evenly divisible by $100,000 or (ii) enable the registration of transfer by a
holder of its entire holding of Notes. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be exchanged
for other Notes of like tenor and of any authorized denominations, of a like
aggregate principal amount, upon surrender of the Note to be exchanged at the
principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder of
such Note or such holder’s attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder’s unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.

 

11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of

 

32

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principal of, interest on and any Yield-Maintenance Amount payable with respect
to such Note and for all other purposes whatsoever, whether or not such Note
shall be overdue, and the Company shall not be affected by notice to the
contrary. Subject to the preceding sentence, the holder of any Note may from
time to time grant participations in such Note to any Person on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion, provided that any such participation shall be in an amount of at
least $100,000, provided that no such granting of a participation shall increase
or otherwise affect the obligations of the Company hereunder.

 

11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by a Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.

 

11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.

 

11H. NOTICES. All written communications provided for hereunder shall be sent by
first class mail or nationwide overnight delivery service (with charges prepaid)
and (i) if to a Purchaser, addressed to it at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as such Purchaser shall have specified to the Company in writing, (ii)
if to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified to the Company in writing or,
if any such other holder shall not have so specified an address to the Company,
then addressed to such other holder in care of the last holder of such Note
which shall have so specified an address to the Company, and (iii) if to the
Company, addressed to it at 900 North Tucker Boulevard, St. Louis, Missouri
63101, Attention: Senior Vice President-Finance, or at such other address as the
Company shall have specified to the holder of each Note in writing.

 

11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes
to the contrary notwithstanding, any payment of principal of or interest on any
Note that is due on a date other than a Business Day shall be made on the next
succeeding Business Day. If the date for any payment is extended to the next
succeeding Business Day by reason of the preceding sentence, the period of such
extension shall not be included in the computation of the interest payable on
such Business Day.

 

33

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11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing,
or any action taken or to be taken, is by the terms of this Agreement required
to be satisfactory to any Purchaser or to the Required Holder(s), the
determination of such satisfaction shall be made by such Purchaser or the
Required Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.

 

11K. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK.

 

11L. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

11M. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.

 

11N. COUNTERPARTS. This Agreement may be executed in any number of counterparts
(or counterpart signature pages), each of which counterparts shall be an
original but all of which together shall constitute one instrument.

 

11O. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not (i) avoid the occurrence of an Event of Default or Default if such
action is taken or such condition exists or (ii) in any way prejudice an attempt
by the holders to prohibit (through equitable action or otherwise) the taking of
any action by the Company or a Subsidiary which would result in an Event of
Default or Default.

 

11P. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are to be
several sales, and the obligations of the Purchasers under this Agreement are
several obligations. Except as provided in paragraph 3G, no failure by any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and no
Purchaser shall be responsible for the obligations of, or any action taken or
omitted by, any other Purchaser hereunder.

 

11Q. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. The Company hereby
irrevocably submits to the jurisdiction of any New York state or Federal court
sitting in New York in any action or proceeding arising out of or relating to
this Agreement, and the Company hereby irrevocably agrees that all claims in
respect of such action or proceeding may

 

34

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be heard and determined in New York state or Federal court. The Company hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
Company agrees and irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing, by registered or certified U.S.
mail, or by any other means or mail that requires a signed receipt, of copies of
such process to the Company at its address set forth in paragraph 11H, and
hereby appoints such Person as its agent to receive such service of process. The
Company agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this paragraph 11Q shall affect
the right of any holder of the Notes to serve legal process in any other manner
permitted by law or affect the right of any holder of the Notes to bring any
action or proceeding against the Company or its property in the courts of any
other jurisdiction. To the extent that the Company has or hereafter may acquire
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Agreement.

 

11R. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDERS OF THE NOTES AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THE HOLDERS OF THE NOTES AND THE COMPANY EACH
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. THE HOLDERS OF THE NOTES AND THE COMPANY FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]

 

35

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Please sign the form of acceptance on the enclosed counterpart of this letter
and return the same to the Company, whereupon this letter shall become a binding
agreement between the Company and each Purchaser.

 

Very truly yours,

ST. LOUIS POST-DISPATCH LLC By:    /S/    ROBIN L. SPEARS            

Name:

  Robin L. Spears    

Title:

  Vice-President - Finance

 

The foregoing Agreement is hereby accepted as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By:

  /S/    CHRIS BUSBEE        

Name:

  R. Chris Busbee

Title:

  Vice-president AMERICAN GENERAL ANNUITY INSURANCE COMPANY AMERICAN GENERAL
LIFE INSURANCE COMPANY

By:

  /S/    C. SCOTT INGLIS        

Name:

  C. Scott Inglis

Title:

  Investment Officer GE EDISON LIFE INSURANCE COMPANY

By:

  /S/    WILLIAM R. WRIGHT        

Name:

  William R. Wright

Title:

  Chief Investment Officer FIRST COLONY LIFE INSURANCE COMPANY

By:

  /S/    MORIAN MOOERS        

Name:

  Morian Mooers

Title:

  Assistant Vice President and Investment Officer

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

By:

  /S/    A. KIPP KOESTER        

Name:

  A. Kipp Koester Its   Authorized Representative

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
FOR ITS GROUP ANNUITY SEPARATE ACCOUNT

By:

  Northwestern Investment Management Company     By:   /S/    A. KIPP
KOESTER             Name:   A. Kipp Koester     Its Managing Director PACIFIC
LIFE INSURANCE COMPANY

By:

  /S/    DIANE W. DALES        

Name:

  Diane W. Dales

Title:

  Assistant Vice President

By:

  /S/    AUDREY L. MILFS        

Name:

  Audrey L. Milfs

Title:

  Corporate Secretary

--------------------------------------------------------------------------------

EXHIBIT A

 

[FORM OF NOTE]

 

ST. LOUIS POST-DISPATCH LLC

 

8.05% SENIOR NOTE DUE APRIL 28, 2009

 

No.__________

      [DATE]

$ ___________

      PPN 85229* AA4

 

FOR VALUE RECEIVED, the undersigned, ST. LOUIS POST-DISPATCH LLC (the
“COMPANY”), a limited liability company organized and existing under the laws of
the State of Delaware, hereby promises to pay to
                                                 , or registered assigns, the
principal sum of                                         
                             DOLLARS on                             ,
                    , with interest (computed on the basis of a 360-day
year—30-day month) (a) on the unpaid balance thereof at the rate of 8.05% per
annum from the date hereof, payable quarterly on the 28th day of January, April,
July and October in each year, commencing with the January, April, July or
October next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement referred to below), payable quarterly as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) 9.05% or (ii) 1.0% over the
rate of interest publicly announced by The Bank of New York from time to time in
New York City as its prime rate.

 

Payments of principal of, interest on and any Yield-Maintenance Amount payable
with respect to this Note are to be made at the main office of The Bank of New
York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.

--------------------------------------------------------------------------------

This Note is one of a series of Senior Notes (the “NOTES”) issued pursuant to a
Note Agreement, dated as of May 1, 2000 (the “AGREEMENT”), among the Company and
the original purchasers of the Notes named in the Purchaser Schedule attached
thereto and is entitled to the benefits thereof and to the benefits of the
Guaranty Agreement (as defined in the Agreement). Each holder of this Note will
be deemed, by its acceptance hereof, to have made the representation set forth
in paragraph 9B of the Agreement on the date of its purchase of this Note with
respect to the source of the funds used by it to purchase this Note.

 

This Note is a registered Note and, as provided in the Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered holder hereof or
such holder’s attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.

 

This Note is subject to optional prepayment, in whole or from time to time in
part, on the terms specified in the Agreement.

 

In case an Event of Default, as defined in the Agreement, shall occur and be
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner and with the effect provided in the Agreement.

 

THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH STATE.

 

ST. LOUIS POST-DISPATCH LLC

By: 

   

Title: 

   

 

A-2

--------------------------------------------------------------------------------

EXHIBIT B

 

[FORM OF FUNDS DELIVERY INSTRUCTION]

 

[Company’s Letterhead]

 

[NAMES AND ADDRESSES OF ALL PURCHASERS]

 

  Re: Funds Delivery Instruction

 

Ladies and Gentlemen:

 

As contemplated by paragraph 2 of the Note Agreement, dated as of May 1, 2000,
among us, the undersigned hereby instructs you to deliver, on the date of
closing, the proceeds of the Notes in the manner required by paragraph 2 to the
undersigned’s account identified below:

 

Account Name:

Account No:

Bank:

Bank City & State:

Bank ABA No:

Reference:

 

This instruction has been executed and delivered by an authorized representative
of the undersigned.

 

Very truly yours,

ST. LOUIS POST-DISPATCH LLC

By: 

       

Title:

   

--------------------------------------------------------------------------------

EXHIBIT C

 

[FORM OF OPINION OF COUNSEL TO COMPANY AND GUARANTOR]

 

May 1, 2000

 

Each of the Purchasers named on

the Purchaser Schedule attached

to the below-described Note Agreement

 

Ladies and Gentlemen:

 

We have acted as counsel for St. Louis Post-Dispatch LLC, a Delaware limited
liability company (the “Company”), and Pulitzer Inc., a Delaware corporation
(the “Guarantor”), in connection with (i) the Note Agreement, dated as of May 1,
2000, among the Company and each of you (the “Note Agreement”), pursuant to
which the Company has issued to you today its 8.05% Senior Notes due April 28,
2009 in the aggregate principal amount of $306,000,000, and (ii) the Guaranty
Agreement, dated as of May 1, 2000, executed and delivered by the Guarantor in
favor of the holders of the Notes (the “Guaranty Agreement”). All terms used
herein that are defined in the Note Agreement have the respective meanings
specified in the Note Agreement. This letter is being delivered to you in
satisfaction of the condition set forth in paragraph 3A(iii) of the Note
Agreement and with the understanding that you are purchasing the Notes in
reliance, in part, on the opinions expressed herein.

 

In this connection, we have examined the Note Agreement, the Notes and the
Guaranty Agreement (collectively, the “Financing Documents”). In connection with
this opinion, we have reviewed such certificates of public officials, such
certificates and other instruments of officers of the Company and the Guarantor,
and originals or copies certified or otherwise identified to our satisfaction of
all such limited liability company records and papers of the Company, corporate
records and papers of the Guarantor, and of all such other documents, records
and papers, and such questions of law, as we have deemed relevant and necessary
as a basis for our opinion hereinafter set forth. We have relied, to the extent
that we deem such reliance proper, upon certificates of public officials, upon
certificates of officers of the Company and the Guarantor and upon the
representations and warranties contained in or made pursuant to the Loan
Documents, including the representation made by each of you in paragraph 9A of
the Note Agreement, in each case with respect to the accuracy of factual matters
contained therein which were not independently established.

--------------------------------------------------------------------------------

Each of the Purchasers named on the Purchaser Schedule

attached to the Note Agreement

May 1, 2000

Page 2

 

In such examination, we have assumed the genuineness of all signatures, except
the signatures on the Financing Documents by any officer of the Company or the
Guarantor, and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. We also assumed that:

 

(a) each Purchaser has been duly organized and is validly existing under the
laws of the jurisdiction of its organization;

 

(b) the Note Agreement has been duly authorized, executed and delivered by each
Purchaser;

 

(c) each Purchaser has corporate or equivalent power and authority and legal
capacity to execute, deliver and perform, and may lawfully perform its
obligations under, the Note Agreement; and

 

(d) the Note Agreement is the legal, valid and binding obligation of each
Purchaser enforceable against such Purchaser in accordance with its terms, and
does not breach, violate or conflict with any agreement or the laws or
governmental rules and regulations of any jurisdiction or authority.

 

Based on the foregoing and subject to the exceptions, limitations and
qualifications set forth herein, it is our opinion that:

 

1. The Company is a limited liability company duly organized and validly
existing in good standing under the laws of the State of Delaware.

 

2. The Guarantor is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware.

 

3. The Company has the limited liability company power and authority to carry on
its business as now being conducted, and to execute, deliver and perform the
Financing Documents to which it is a party, and is duly qualified as a foreign
limited liability company and in good standing in each jurisdiction where the
nature of the business transacted or properties owned by it makes such
qualification necessary, except where the failure to so qualify will not have a
material adverse effect on the Company and its Subsidiaries taken as a whole.

--------------------------------------------------------------------------------

Each of the Purchasers named on the Purchaser Schedule

attached to the Note Agreement

May 1, 2000

Page 3

 

4. The Guarantor has the corporate power and authority to carry on its business
as now being conducted, and to execute, deliver and perform the Financing
Documents to which it is a party, and is duly qualified as a foreign corporation
and in good standing in each jurisdiction where the nature of the business
transacted or properties owned by it makes such qualification necessary, except
where the failure to so qualify will not have a material adverse effect on the
Guarantor and its Subsidiaries taken as a whole.

 

5. The Note Agreement and the Notes have been duly authorized by all requisite
action and duly executed and delivered by authorized officers of the Company,
and are valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with their respective terms, and the Notes are
entitled to the benefits of the Note Agreement.

 

6. The Guaranty Agreement has been duly authorized by all requisite corporate
action and duly executed and delivered by authorized officers of the Guarantor,
and is the valid obligation of the Guarantor, legally binding upon and
enforceable against the Guarantor in accordance with its terms.

 

7. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Note Agreement
to register the Notes under the Securities Act of 1933, as amended, or to
qualify an indenture in respect of the Notes under the Trust Indenture Act of
1939, as amended.

 

8. The extension, arranging and obtaining of the credit represented by the Notes
do not result in any violation of Regulation T, U or X of the Board of Governors
of the Federal Reserve System.

 

9. The execution and delivery of the Note Agreement and the Notes, the offering,
issuance and sale of the Notes and fulfillment of and compliance with the
respective provisions of the Note Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the limited liability company agreement or
other organizational documents of the Company or any of its Subsidiaries, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect

--------------------------------------------------------------------------------

Each of the Purchasers named on the Purchaser Schedule

attached to the Note Agreement

May 1, 2000

Page 4

 

thereto and insofar as is material to the Company and its Subsidiaries, taken as
a whole) any agreement, instrument, order, judgment or decree to which the
Company or any of its Subsidiaries is a party or otherwise subject.

 

10. The execution and delivery of the Guaranty Agreement and fulfillment of and
compliance with the provisions of the Guaranty Agreement do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Guarantor or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to the charter, by-laws or other organizational
documents of the Guarantor or any of its Subsidiaries, any applicable law
(including any securities or Blue Sky law), statute, rule or regulation or
(insofar as is known to us after having made due inquiry with respect thereto
and insofar as is material to the Guarantor and its Subsidiaries, taken as a
whole) any agreement, instrument, order, judgment or decree to which the
Guarantor or any of its Subsidiaries is a party or otherwise subject.

 

The opinions expressed herein are subject to the following exceptions,
limitations and qualifications:

 

A. The opinions in numbered paragraphs 1 through 4 above are based on
certificates of recent date of public officials and certificates of officers of
the Company and the Guarantor.

 

B. The opinions in numbered paragraphs 5 and 6 above are subject to the
exception that the enforceability of the Financing Documents may be limited by
(a) any applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, liquidation, reorganization, moratorium or similar laws (including
court decisions) from time to time in effect affecting generally the enforcement
of creditors’ rights and remedies or providing for the relief of debtors, (b)
general principles of equity (regardless of whether such enforceability is
sought at law or in equity), and (c) an implied covenant of good faith and fair
dealing.

 

C. When a matter herein is stated to be “known to us” or “to our knowledge,” we
have not undertaken (a) any examination of courts, public records, judgments,
decrees or orders applicable to the Guarantor, the Company or their respective
Subsidiaries, (b) any other special investigation, or (c) any inquiry of any
Person other than the Company or the Guarantor and attorneys of this Firm
currently handling matters for the Guarantor, the Company and their respective
Subsidiaries;

--------------------------------------------------------------------------------

Each of the Purchasers named on the Purchaser Schedule

attached to the Note Agreement

May 1, 2000

Page 5

 

provided, however, that nothing has come to our attention that leads us to
believe that the matter is other than as stated herein.

 

D. Our opinions in paragraphs 9 and 10 as to laws, statutes, rules or
regulations are subject to the limitation that we express no opinion with
respect to compliance with the anti-fraud provisions of applicable federal or
state securities laws, rules or regulations.

 

The opinions expressed herein are limited exclusively to the laws of the State
of New York, the Limited Liability Company Act and General Corporation Law of
the State of Delaware, and federal law.

 

The opinions expressed herein are for the sole benefit of, and may be relied
upon by, each of you and those Persons who become holders from time to time of
the Notes in accordance with the Note Agreement. Such reliance is limited to the
transactions contemplated by the Note Agreement, and the opinions expressed
herein are limited to the law existing on the date hereof. In rendering these
opinions, we do not undertake to advise the Persons who may rely on this opinion
of any change in law or fact that may occur after the date hereof.

 

Very truly yours,

 

Fulbright & Jaworski L.L.P.

--------------------------------------------------------------------------------

EXHIBIT D

 

[FORM OF COMPLIANCE CERTIFICATE]

 

COMPLIANCE CERTIFICATE

 

(PULITZER INC.)

 

    [FOR THE FISCAL QUARTER ENDING____________]     [FOR THE FISCAL YEAR
ENDING___________]

 

To: Each holder of those certain 8.05% Senior Notes due April 28, 2009 issued by
St. Louis Post-Dispatch LLC, a Delaware limited liability company (the
“COMPANY”), pursuant to that certain Note Agreement dated as of May 1, 2000 (as
amended, restated, supplemented or otherwise modified from time to time, the
“NOTE AGREEMENT”) among the Company and the Purchasers listed on the Purchaser
Schedule thereto.

 

As required by Section 4.1 of that certain Guaranty Agreement dated as of even
date with the Note Agreement (as amended, restated, supplemented or otherwise
modified from time to time, the “GUARANTY AGREEMENT”), executed by Pulitzer
Inc., a Delaware corporation and the sole managing member of the Company (the
“GUARANTOR”), for the benefit of the holders of the Notes (all capitalized terms
used and not otherwise defined in this Compliance Certificate have the
respective meanings ascribed to them in the Guaranty Agreement), the undersigned
certifies as follows:

 

(1) The undersigned is the duly elected, qualified and acting [PRESIDENT] [ VICE
PRESIDENT] [TREASURER] of the Guarantor.

 

(2) In the undersigned’s capacity as an officer of the Guarantor, the
undersigned has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and the financial condition of the
Guarantor and its Subsidiaries and has determined that the Guarantor has
observed or performed in all material respects all of its covenants and other
agreements, and satisfied every condition, contained in the Guaranty Agreement
to be observed, performed or satisfied by it on or before the date hereof, and
as of the date hereof, no Default or Event of Default has occurred and is
continuing[, EXCEPT AS SET FORTH IN PARAGRAPH (3) BELOW].

 

[(3) BELOW (OR IN A SEPARATE SCHEDULE TO THIS COMPLIANCE CERTIFICATE) ARE THE
EXCEPTIONS, IF ANY, TO PARAGRAPH (2), LISTING, IN DETAIL, THE NATURE OF EACH
CONDITION OR EVENT WHICH CONSTITUTES A DEFAULT OR EVENT OF DEFAULT, THE PERIOD
DURING WHICH SUCH EVENT OR CONDITION HAS EXISTED AND THE ACTION WHICH THE
GUARANTOR HAS TAKEN, IS TAKING, OR PROPOSES TO TAKE WITH RESPECT TO EACH SUCH
CONDITION OR EVENT.]

 

([3] [4]) WITH RESPECT TO THE FINANCIAL STATEMENTS REFERRED TO IN CLAUSE (I) OF
SECTION 4.1 OF THE GUARANTY AGREEMENT, WHICH ARE DELIVERED CONCURRENTLY WITH THE

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DELIVERY OF THIS COMPLIANCE CERTIFICATE, THE UNDERSIGNED HEREBY CONFIRMS THAT
SUCH FINANCIAL STATEMENTS OF THE GUARANTOR AND ITS SUBSIDIARIES HAVE BEEN
PREPARED IN ACCORDANCE WITH GAAP APPLIED CONSISTENTLY THROUGHOUT THE PERIOD
INVOLVED, AND THE COVENANTS FROM THE GUARANTY AGREEMENT LISTED AND CALCULATED ON
ANNEX A ATTACHED HERETO ARE BASED ON SUCH FINANCIAL STATEMENTS.]

 

[([3] [4]) WITH RESPECT TO THE FINANCIAL STATEMENTS REFERRED TO IN CLAUSE (II)
OF SECTION 4.1 OF THE GUARANTY AGREEMENT, WHICH ARE DELIVERED CONCURRENTLY WITH
THE DELIVERY OF THIS COMPLIANCE CERTIFICATE, THE UNDERSIGNED HEREBY CONFIRMS
THAT SUCH FINANCIAL STATEMENTS OF THE GUARANTOR AND ITS SUBSIDIARIES, INCLUDING
THE RELATED NOTES AND SCHEDULES THERETO, HAVE BEEN PREPARED IN ACCORDANCE WITH
GAAP APPLIED CONSISTENTLY THROUGHOUT THE PERIODS INVOLVED, AND THE COVENANTS
FROM THE GUARANTY AGREEMENT LISTED AND CALCULATED ON ANNEX A ATTACHED HERETO ARE
BASED ON SUCH FINANCIAL STATEMENTS.]

 

([4] [5]) The undersigned hereby certifies that described below in reasonable
detail are the adjustments, if any, necessary to derive the information set
forth in Annex A from the financial statements referred to in paragraph ([3]
[4]) above.

 

 

[NAME], [TITLE]

 

2

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ANNEX A

 

COVENANTS

 

COVENANTS Compliance

--------------------------------------------------------------------------------

      

[Indicate Yes/No]

        

1.

   Consolidated Debt to EBITDA Ratio (Section 5.1(i))              

The ratio of

 

(i) Consolidated Debt(1) as of the last day of the fiscal quarter most recently
ended to

   $                    

(ii) EBITDA(2) for the four fiscal quarters most recently ended must not be
greater than 4.25 to 1.00

   $                    

to 1.00

     _____               _____  

2.

   Consolidated Net Worth (Section 5.1(ii))               Commencing with the
fiscal quarter ending June 30, 2000, Consolidated Net Worth(3) as of the last
day of the fiscal quarter most recently ended    $                     must not
be less than (a) $650,000,000 plus (b) the product of (x) $3,750,000 multiplied
by (y) the number of fiscal quarters that have ended since the Date of Closing,
to and including the fiscal quarter ended on such measurement date    $
              

3.

   Limitation on Priority Debt (Section 5.3)               Priority Debt(4)
(including Debt secured by Liens permitted by Section 5.2)    $                 
   Capitalization(5) as of the last day of the fiscal quarter most recently
ended    $                     Percentage of Capitalization as of the last day
of the fiscal quarter most recently ended must not exceed 15% of Capitalization
as of the last day of the fiscal quarter most recently ended                   %

4.

   Loans, Advances and Investments (Section 5.4)               The Guarantor
will not, and will not permit any Subsidiary to, make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any interest in, or make any capital
contribution         

--------------------------------------------------------------------------------

(1) See Schedule 1, Item 1.

 

(2) See Schedule 1, Item 2.

 

(3) See Schedule 1, Item 3.

 

(4) See Schedule 1, Item 4.

 

(5) See Schedule 1, Item 5.

 

A-1

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to, any Person, except that the Guarantor or any Subsidiary may:

 

(i) make or permit to remain outstanding loans, advances or capital
contributions to any Subsidiary;

 

(ii) make or permit to remain outstanding any loans, advances or capital
contributions from (a) any Subsidiary other than the Company to the Guarantor or
any other Subsidiary and (b) the Company to any Subsidiary of the Company;

 

(iii) own, purchase or acquire stock, obligations or securities of or other
equity interests in a Subsidiary or a Person which immediately after such
purchase or acquisition will be a Subsidiary;

 

(iv) make and permit to remain outstanding investments in notes receivable which
are received pursuant to (a) the sale of all or substantially all of a business
or operations or (b) the sale of used equipment in the ordinary course of
business, but in each case only to the extent that the aggregate uncollected
amount of all such notes receivable does not exceed $500,000;

 

(v) make and permit to remain outstanding loans, advances and other investments
in any business principally engaged in publishing (print or electronic),
provided that all such loans, advances and other investments to or in entities
which are not Subsidiaries do not in the aggregate exceed 10% of Capitalization;

 

(vi) make and permit to remain outstanding loans, advances and other investments
received in settlement of debts (created in the ordinary course of business)
owing to the Guarantor or any Subsidiary,

 

(vii) own, purchase or acquire commercial paper issued by any corporation or
bankers’ acceptances issued by any member bank of the Federal Reserve System, in
either case, maturing within one year of the date of purchase and rated, by at
least two of Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc.
and Fitch Investors Service, Inc., “A-1”, “P-1” and “F-1”, respectively, and
payable in the United States in United States dollars;

 

(viii) own, purchase or acquire certificates of deposit in member banks of the
Federal Reserve System (each having capital resources in excess of $75,000,000)
or certificates of deposit in an aggregate amount not to exceed $2,000,000 in
banks having capital resources of less than $75,000,000), all due within one
year from the date of original issue thereof and payable in the United States in
United States dollars;

 

(ix) own, purchase or acquire repurchase agreements of member banks of the
Federal Reserve System (each having capital resources in excess of $75,000,000)
for terms of less than one year in respect of the foregoing certificates and
obligations;

 

(x) own, purchase or acquire obligations of the

 

A-2

--------------------------------------------------------------------------------

United States government or any agency thereof;

 

(xi) own, purchase or acquire obligations guaranteed by the United States
government or any agency thereof;

 

(xii) investments in stocks of investment companies registered under the
Investment Company Act of 1940 which invest primarily in obligations of the type
described in clauses (vii), (viii), (ix), (x) or (xi) above, provided that any
such investment company shall have an aggregate net asset value of not less than
$500,000,000;

 

(xiii) own, purchase or acquire investments in money market mutual funds that
are classified as current assets in accordance with generally accepted
accounting principles, that are rated “AAAm” by Standard & Poor’s Ratings Group
and that invest solely in investments described in clauses (vii), (viii), (ix),
(x) or (xi) above, which funds are managed by Persons having capital and surplus
in excess of $500,000,000;

 

(xiv) endorse negotiable instruments for collection in the ordinary course of
business;

 

(xv) make or permit to remain outstanding travel and other like advances to
officers and employees in the ordinary course of business;

 

(xvi) make or permit to remain outstanding investments in demand deposit
accounts maintained by the Guarantor or any Subsidiary in the ordinary course of
its business;

 

(xvii) make or permit to remain outstanding investments consisting of Eurodollar
time deposits, maturing within 90 days after the making thereof, with any branch
of a United States commercial bank having capital and surplus of not less than
$1 billion in the aggregate;

 

(xviii) make or permit to remain outstanding investments in municipal
obligations having a rating of “Aaa” by Moody’s Investors Service, Inc., or
“AAA” by Standard & Poor’s Ratings Group;

 

(xix) permit to remain outstanding investments of the Guarantor and its
Subsidiaries set forth on Schedule 5.4;

 

(xx) own, purchase or acquire (a) asset-backed securities, mortgage- backed
securities and collateralized mortgage obligations issued by any entity and
rated at least AA3 by Moody’s Investors Service, Inc. or Aa- by Standard &
Poor’s Ratings Group and (b) notes and bonds issued by any domestic corporate
issuer and rated at least A3 by Moody’s Investors Service, Inc. or A- by
Standard & Poor’s Ratings Group; and

 

A-3

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(xxi) make or permit to remain outstanding any other loan or advance to, or own,
purchase or acquire any other stock, obligations or securities of, or any other
interest in, or make any other capital contribution to any Person, provided that
the aggregate amount thereof does not at any time exceed 6% of Consolidated Net
Worth as of the last day of then most recently ended fiscal quarter.

 

    

Consolidated Net Worth

   $                    

Percentage of Consolidated Net Worth

   $                    

(xxi) must not exceed 6% of Consolidated Net Worth

                  %

5.

   Limitation on Sale or Disposition of Capital Assets (Section 5.5) The
Guarantor will not, and will not permit any Subsidiary to, sell or dispose of
capital assets (including capital stock or other equity interests) outside the
ordinary course of business if the aggregate of capital assets so sold or
disposed of in any fiscal year involves assets totaling 10% or more of
Consolidated Total Assets at the beginning of such fiscal year or has
contributed 10% or more of EBITDA for any of the three fiscal years then most
recently ended (or such shorter period during which such assets were owned by
the Guarantor or a Subsidiary), unless either (i) the net proceeds (including
the cash value of any securities received but deducting all expenses of sale and
sales and transfer taxes and applicable Federal and state income taxes) from
such sale or disposition are within 12 months from receipt invested in
businesses substantially similar to any line of business in which the Guarantor
or any Subsidiary has been continuously engaged since the date of issuance of
the Notes or (ii) within 12 months after receipt of such net proceeds, an amount
equal to such net proceeds is applied to the pro rata prepayment (based on
outstanding principal amounts) of (a) the principal of the Notes then
outstanding (in accordance with paragraph 4A of the Note Agreement, and together
with all accrued interest on, and Yield-Maintenance Amount, if any, payable with
respect to, the Notes) and (b) all other Debt of the Guarantor and its
Subsidiaries consisting of obligations for borrowed money.              
Aggregate of capital assets sold or disposed of outside of the ordinary course
of business during the fiscal year in which the period covered by this
Compliance Certificate occurs    $                    

Consolidated Total Assets at beginning of such fiscal year

   $                    

Percentage of Consolidated Total Assets at the beginning of such fiscal year

                  %     

EBITDA for each of the three fiscal years then most recently ended

   $                          $                          $               

 

A-4

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     Percentage of EBITDA for each such year contributed by assets sold or
disposed of                 %                        %                        %
     must not involve assets totaling 10% or more of Consolidated Total Assets
at the beginning of such fiscal year or contributing 10% or more of EBITDA for
any of the three fiscal years then most recently ended (or such shorter period
during which such assets were owned by the Guarantor or a Subsidiary) UNLESS,
(i) the net proceeds (including the cash value of any securities received but
deducting all expenses of sale and sales and transfer taxes and applicable
Federal and state income taxes) from such sale or disposition are within 12
months from receipt invested in businesses substantially similar to any line of
business in which the Guarantor or any Subsidiary has been continuously engaged
since the date of issuance of the Notes or (ii) within 12 months after receipt
of such net proceeds, an amount equal to such net proceeds is applied to the pro
rata prepayment (based on outstanding principal amounts) of (a) the principal of
the Notes then outstanding (in accordance with paragraph 4A of the Note
Agreement, and together with all accrued interest on, and Yield-Maintenance
Amount, if any, payable with respect to, the Notes) and (b) all other Debt of
the Guarantor and its Subsidiaries consisting of obligations for borrowed money.
   _____  

6.

   Limitations on Sale and Leaseback (Section 5.6) The Guarantor will not, and
will not permit any Subsidiary to, enter into any arrangement with any lender or
investor or under which such lender or investor is a party, providing for the
leasing or other similar arrangement by the Guarantor or any Subsidiary of real
or personal property used by the Guarantor or any Subsidiary in the operations
of the Guarantor or any Subsidiary, which has been or is sold or transferred by
the Guarantor or any Subsidiary to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor on the
security of such rental obligations of the Guarantor or such Subsidiary, EXCEPT
that the Guarantor or any Subsidiary (other than the Company) may enter into
sale and lease-back transactions involving newspaper equipment or facilities
acquired after the issuance of the Notes if (i) such arrangement is for a period
of less than three years by the end of which the use of such property by the
lessee will be discontinued, (ii) the net proceeds of such sale are applied to
the retirement of Debt, (iii) the net proceeds of the sale are used to purchase
other property having a value at least equal to such net proceeds, (iv) the
property immediately prior to such sale could have been subjected to a Lien
securing Debt in an amount equal to such net proceeds and which Lien would have
been permitted by clause (xi) of Section 5.2, or (v) the transaction represents
a sale by a Subsidiary (other than the Company) to the Guarantor or another
Subsidiary or by the Guarantor to a Subsidiary.    _____  

 

A-5

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7.

   Limitation on Sale of Stock and Debt of Subsidiaries (Section 5.9) The
Guarantor will not, and will not permit any Subsidiary to, sell or otherwise
dispose of, or part with control of, any shares of stock of (or other equity
interests in) or Debt of any Subsidiary, except that shares of stock of (or
other equity interests in) or Debt of any Subsidiary (other than the Company)
may be sold or otherwise disposed of to the Guarantor or another Subsidiary, and
except that all shares of stock of (or other equity interests in) and Debt of
any Subsidiary (other than the Company) at the time owned by or owed to the
Guarantor or any Subsidiary may be sold as an entirety for a cash consideration
which represents the fair market value (as determined in good faith by the Board
of Directors of the Guarantor) at the time of sale of the shares of stock or
other equity interests and Debt so sold, provided that the assets of such
Subsidiary do not constitute more than 10% of Consolidated Total Assets at the
beginning of the fiscal year in which such sale or disposition is to occur and
that such Subsidiary shall not have contributed more than 10% of EBITDA for any
of the three fiscal years then most recently ended, unless such transaction
shall be subject to, and in compliance with, Section 5.5, and further provided
that, in any event, at the time of sale, such Subsidiary shall not own, directly
or indirectly, any shares of stock of (or other equity interests in) or Debt of
any other Subsidiary (unless all of the shares of stock of (or other equity
interests in) and Debt of such other Subsidiary are owned, directly or
indirectly, by the Guarantor and all Subsidiaries are simultaneously being sold
as permitted by Section 5.9 of the Guaranty).               Consolidated Total
Assets at beginning of such fiscal year    $                     Consolidated
Total Assets represented by assets of Subsidiary    $                    
Percentage of Consolidated Total Assets represented by assets of Subsidiary     
             %      EBITDA for each of the three fiscal years then most recently
ended    $                          $                          $               
     Percentage of EBITDA for each such year contributed by                   %
     Subsidiary                   %                          %      the assets
of such Subsidiary must not constitute more than 10% of Consolidated Total
Assets at the beginning of the fiscal year in which such sale or disposition is
to occur and such Subsidiary must not have contributed more than 10% of EBITDA
for any of the three fiscal years then most recently ended, unless such
transaction was subject to, and in compliance with, Section 5.5.         

8.

   Issuance of Stock by Subsidiaries (Section 5.10) The Guarantor will not
permit any Subsidiary, the assets of which constitute more than 10% of
Consolidated Total Assets at the beginning of the fiscal year in which such
issuance, sale or disposition is to occur or which has contributed more than 10%
of         

 

A-6

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     EBITDA for any of the three fiscal years most recently ended, to issue,
sell or dispose of any shares of its stock (of any class) or any other equity
interests except to the Guarantor or another Subsidiary. Consolidated Total
Assets at beginning of such fiscal year    $                     Consolidated
Total Assets represented by assets of Subsidiary    $                    
Percentage of Consolidated Total Assets represented by assets of Subsidiary     
             %      EBITDA for each of the three fiscal years then most recently
ended    $                          $                          $               
     Percentage of EBITDA for each such year contributed by Subsidiary     
             %                          %                          %      the
assets of such Subsidiary must not constitute more than 10% of Consolidated
Total Assets at the beginning of the fiscal year in which such issuance, sale or
disposition is to occur and the Subsidiary must not have contributed more than
10% of EBITDA for any of the three fiscal years most recently ended.         

 

A-7

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SCHEDULE 1 TO ANNEX A TO COMPLIANCE CERTIFICATE

 

1.

   Consolidated Debt            

(i) all obligations for borrowed money or obligations represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments and all
obligations upon which interest charges are customarily paid;

   $                  

(ii) Capitalized Lease Obligations;

   $                  

(iii) indebtedness secured by any Lien existing on property owned by the
Guarantor or any Subsidiary subject to such Lien, whether or not the
indebtedness secured thereby shall have been assumed by the Guarantor or any
Subsidiary;

   $                  

(iv) guarantees, endorsements (other than endorsements of negotiable instruments
for collection in the ordinary course of business) and other contingent
liabilities (whether direct or indirect) in connection with the obligations,
stock or dividends of any Person;

   $                  

(v) obligations under any contract providing for the making of loans, advances
or capital contributions to any Person, or for the purchase of any property from
any Person, in each case in order to enable such Person primarily to maintain
working capital, net worth or any other balance sheet condition or to pay debt,
dividends or expenses;

   $                  

(vi) obligations under any contract for the purchase of materials, supplies or
other property from any Person if such contract (or any related document)
requires that payment for such materials, supplies or other property shall be
made regardless of whether or not delivery of such materials, supplies or other
property is ever made or tendered;

   $                  

(vii) obligations under any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides that the
obligation to make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general use or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor;

   $                  

(viii) obligations under any contract for the sale or use of materials, supplies
or other property, or the rendering of services, if such contract (or any
related document) requires that payment for such materials, supplies or other
property, or the use thereof, or payment for such services, shall be
subordinated to any indebtedness (of the purchaser or user of such materials,
supplies or other property or the Person entitled to the benefit of such
services) owed or to be owed to any Person;

   $                  

(ix) obligations under any other contract which, in economic effect, is
substantially equivalent to a guarantee;

   $                   SUBTOTAL [(i)+(ii)+(iii)+(iv)+(v)+(vi)+(vii)+(viii)+(ix)]
   $                  

(x) But excluding (a) loans, advances and capital contributions by the Guarantor
to any Subsidiary or by any Subsidiary to the Guarantor or another Subsidiary or
a guarantee of the obligations of a Subsidiary under an executory contract to
purchase or sell a business and (b) any amounts which may be due in connection
with the “Gross-Up Transactions” described in Note 15 of the audited
consolidated financial statements of the Guarantor and its Subsidiaries for the
fiscal year ended December 31, 1999, as incorporated in the Guarantor’s annual
report on Form 10-K filed with the Securities and Exchange Commission

            CONSOLIDATED DEBT [SUBTOTAL above - (x)]    $                       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

2.

   EBITDA            

(i) Consolidated Net Earnings (determined as set forth in Item 2.1 below),

   $             

 

A1-1

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(ii) plus, to the extent deducted in the determination of Consolidated Net
Earnings,

           

(a) all provisions for federal, state and other income tax

   $                  

(b) Consolidated Interest Expense (determined as set forth in Item 2.2 below)
and

   $                  

(c) provisions for depreciation and amortization

   $                  

Subtotal of (a), (b) and (c)

   $                  

EBITDA [(i) + (ii)]

   $                       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

     Note: Any acquisition or disposition by the Guarantor or any Subsidiary
during any period of all of the capital stock of (or other equity interests in)
any Person, or of all or substantially all of the assets of any Person, shall in
each case be reflected and given effect in EBITDA as if such acquisition or
disposition occurred on the first day of such period, so long as, in the case of
any such acquisition, the Guarantor shall have delivered or caused to be
delivered to each holder of Notes financial information, set forth within
audited financial statements regarding such Person, disclosing the prior
operating results of such Person, and provided further, that for purposes of
calculating EBITDA, the consummation of the Formation/Consummation Transactions
will be taken into account by including, on a pro forma basis, Herald’s share of
EBITDA for periods prior to the Date of Closing, as derived from the “St. Louis
Agency adjustment” reflected in prior consolidated financial statements.       

2.1

   Consolidated Net Earnings            

(i) Consolidated gross revenues of the Guarantor and its Subsidiaries determined
in accordance with generally accepted accounting principles

   $                  

(ii) Less all operating and non-operating expenses of the Guarantor and its
Subsidiaries determined in accordance with generally accepted less accounting
principles

   $                   CONSOLIDATED NET EARNINGS [(i) - (ii)]    $             
         

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

     Note: The above include all charges of a property character (including
current and deferred taxes on income, provision for taxes on unremitted foreign
earnings which are included in gross revenues, and current additions to
reserves), but do not include in gross revenues any gains — (net of expenses and
taxes applicable thereto) in excess of losses resulting from the sale,
conversion or other disposition of capital assets (i.e., assets other than
current assets) in excess of an aggregate amount of $5,000,000 in any one year,
any gains resulting from the write-up of assets, any equity of the Guarantor or
any Subsidiary in the unremitted earnings of any corporation which is not a
Subsidiary or any earnings of any Person acquired by the Guarantor or any
Subsidiary through purchase, merger or consolidation or otherwise for any year
prior to the year of acquisition, or any deferred credit representing the excess
of equity in any Subsidiary at the date of acquisition over the cost of
investment in such Subsidiary.       

2.2

   Consolidated Interest Expense             The sum (without duplication) of
the following (in each case, eliminating all offsetting debits and credits
between the Guarantor and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements
of the Guarantor and its Subsidiaries in accordance with generally accepted
accounting principles) for the period covered by this Compliance Certificate for
the Guarantor and its Subsidiaries:            

(i) all interest and prepayment charges in respect of Debt of the Guarantor and
its Subsidiaries (including imputed interest in respect of Capitalized Lease
obligations and net costs of any interest rate or currency hedging or similar
arrangements) deducted in determining consolidated net income for such period,
together with all interest capitalized or deferred during such period and not
deducted in determining consolidated net income for such period plus

   $             

 

A1-2

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(ii) all debt discount and expense amortized or required to be amortized in the
determination of consolidated net income for such period

   $                   CONSOLIDATED INTEREST EXPENSE [(i) + (ii)]    $
                      

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

3.

   CONSOLIDATED NET WORTH            

(i) Total amount of total assets of the Guarantor and its Subsidiaries as of the
last day of the fiscal quarter most recently then ended, determined on a
consolidated basis in accordance with generally accepted accounting principles
less

   $                  

(ii) Total liabilities of the Guarantor and its Subsidiaries as of the last day
of the fiscal quarter most recently then ended, determined on a consolidated
basis in accordance with generally accepted accounting principles.

   $                   CONSOLIDATED NET WORTH [(i) - (ii)]    $               
       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

4.

   PRIORITY DEBT    $                       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

    

(i) Aggregate amount of all Debt of the Guarantor secured by a Lien plus

   $                  

(ii) All secured and unsecured Debt of all Subsidiaries (excluding Debt
represented by the Notes)

   $                   PRIORITY DEBT [(i) + (ii)]    $                       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

5.

   CAPITALIZATION            

(i) Consolidated Net Worth plus

   $                  

(ii) Consolidated Debt

   $                   CAPITALIZATION [(i) + (ii)]    $                       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

A1-3

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EXHIBIT E

 

[FORM OF SUBORDINATED INTERCOMPANY NOTE]

 

Effective Date:

   [                                         ].

Maker:

   ST. LOUIS POST-DISPATCH LLC, a Delaware limited liability company.

Maker’s Mailing Address:

   900 North Tucker Boulevard, St. Louis, Missouri 63101.

Payee:

   PULITZER INC., a Delaware corporation, or its assigns.

Payee’s Mailing Address:

   900 North Tucker Boulevard, St. Louis, Missouri 63101.

Place for Payment:

   Payee’s mailing address set forth above or such other location in the United
States of America as the Payee may from time to time designate.

Maximum Principal Amount:

   [$                                                             ].

Interest:

   [                    %, PAYABLE QUARTERLY IN ARREARS (COMPUTED ON THE BASIS
OF A 360-DAY YEAR OF TWELVE 30-DAY MONTHS) ON THE              DAY OF ,     ,
                 AND                  , COMMENCING WITH THE              DAY OF
                                 ,                                
,                                 , OR                                  NEXT
SUCCEEDING THE DATE HEREOF].

Repayment:

   All advances to the Maker and other amounts represented by this Subordinated
Intercompany Note shall be due and payable in full on [THE EARLIER OF ( A)]
demand [, OR (B)                             ].

Advances:

   The Payee may make advances to the Maker upon the Maker’s written request
therefor. All advances of cash made by the Payee to the Maker hereunder shall be
subject to the conditions set forth below and may, at the option of the Payee,
be recorded by the Payee on Schedule 1 attached hereto. Recordation of such
advances shall not be necessary but, if made, will be conclusive evidence of the
making of such advances for the account of the Maker.

--------------------------------------------------------------------------------

FOR VALUE RECEIVED, the Maker promises to pay to the order of the Payee, in
lawful money of the United States of America, in immediately available funds and
in accordance with the repayment terms set forth above, the Maximum Principal
Amount set forth above or, if less, the unpaid principal amount of all loans and
other advances made by the Payee to the Maker. The Maker also promises to pay
interest, in like money and funds and in accordance with the interest payment
terms set forth above, on the unpaid principal amount of all loans and other
advances made by the Payee to the Maker from the date such loan or advance is
made until and including the date such loan or advance is paid at the rate per
annum set forth above.

 

Additional terms and conditions of this Subordinated Intercompany Note are as
follows:

 

1. Prepayment. Subject to the terms and conditions set forth below, the Maker
may prepay the full amount or any part of this Subordinated Intercompany Note at
any time and from time to time without notice and without the payment of any
premium, fee or penalty.

 

2. Default. “EVENT OF DEFAULT” means any one of the following events:

 

(a) the default by the Maker in the payment when due of principal, interest or
any other amount payable with regard to this Subordinated Intercompany Note;

 

(b) the entry of a decree or order for relief in respect of the Maker or any
affiliate thereof in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Maker or any affiliate thereof or for any substantial part of their
respective property, or ordering the winding up or liquidation of their
respective affairs;

 

(c) the commencement by the Maker or any affiliate thereof of a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or the consent by the Maker or any affiliate thereof to the appointment to
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Maker or any affiliate thereof
for any substantial part of their property, or the making by either the Maker or
any affiliate thereof of any assignment for the benefit of creditors, or the
admission by the Maker or any affiliate thereof in writing of its inability to
pay debts generally as they become due;

 

(d) any event or condition occurs with respect to any material indebtedness of
the Maker or any affiliate thereof (including but not limited to the hereinafter
defined Senior Debt) or any indebtedness of any other party for which the Maker
or any affiliate thereof is a guarantor or surety or has pledged any of its
assets as security, the effect of which is to cause or to permit the holder of
any such indebtedness to cause the same or any portion thereof to become due
prior to its stated maturity date; or

 

(e) if the Maker is dissolved, split-up or winds up its affairs.

 

3. Waivers. The Maker expressly waives demand for payment, presentment, notice
of default, notice of intention to accelerate maturity, notice of acceleration
of maturity, protest

 

E-2

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and notice of protest and any and all other notices or action of any kind as to
this Subordinated Intercompany Note and as to each, every and all installments
or partial payments thereof.

 

4. Collection Fees. If an Event of Default occurs hereunder and this
Subordinated Intercompany Note is placed in the hands of an attorney for
collection (whether or not suit is filed) or if this Subordinated Intercompany
Note is collected by suit or legal proceedings or through bankruptcy
proceedings, the Maker agrees to pay, in addition to all sums then due hereon,
all expenses of collection, including, without limitation, reasonable attorneys’
fees.

 

5. Subordination.

 

(a) The payment of any and all Subordinated Debt (as hereinafter defined) is
expressly subordinated to all Senior Debt (as hereinafter defined) to the extent
and in the manner set forth in this Section 5. As used herein: (i) the term
“SUBORDINATED DEBT” means all amounts outstanding from time to time under this
Subordinated Intercompany Note and any other amounts loaned from or otherwise
advanced by the Maker to the Payee, whether direct, indirect, contingent, joint,
several, or independent, now or hereafter existing, due or to become due to, or
held or to be held by, the Payee, whether created directly or acquired by
assignment or otherwise, and whether or not evidenced by written instrument
(including, without limitation all post-petition interest in the event of any
bankruptcy of the Maker) and all fees and expenses related to or advanced in
connection with the foregoing, and (ii) the term “SENIOR DEBT” means all
indebtedness, liabilities, and obligations of the Maker to any holder or holders
of the Maker’s 8.05% Senior Notes due April 28, 2009 (together with any notes
issued in renewal, replacement, restatement, substitution or extensions thereof,
the “SENIOR NOTES”) with respect to the Senior Notes, whether direct, indirect,
contingent, joint, several, or independent, now or hereafter existing, due or to
become due, including, without limitation, all outstanding principal, interest
(including, without limitation all post-petition interest in the event of any
bankruptcy of the Maker) and Yield-Maintenance Amount (as defined in the
hereinafter defined Senior Note Agreement), if any, with respect to the Senior
Notes, all amounts payable by the Maker pursuant to or in connection with the
Note Agreement dated as of May 1, 2000 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “SENIOR NOTE
AGREEMENT”) among the Maker and the several Purchasers listed in the Purchaser
Schedule attached thereto (pursuant to which the Senior Notes were issued and
sold), and all fees and expenses in connection with the foregoing.

 

(b) Until the Senior Debt shall be indefeasibly paid and satisfied in full in
cash, the Payee shall not receive or collect, directly or indirectly, any amount
upon the Subordinated Debt; provided, however, that, the Payee may receive and
collect principal and interest in accordance with the principal repayment and
interest payment terms set forth above so long as no Event of Default of the
type described in Section 2(d) with respect to any Senior Debt has occurred and
is then continuing.

 

(c) The Payee acknowledges and agrees that it has no liens, security interests,
charges, mortgages, chattel mortgages, pledges, encumbrances, or other interests
in any assets of the Maker or its subsidiaries securing the repayment of
Subordinated Debt (collectively, referred

 

E-3

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to herein as a “LIEN”). The Payee further agrees not to acquire, by subrogation,
contract or otherwise, any Lien or other right, title or interest in any of the
assets of the Maker or its subsidiaries (including but not limited to any Liens
which may arise in respect to taxes, assessments or other governmental charges)
to secure the Subordinated Debt. Any Lien granted in violation hereof shall be
null and void, and the Payee shall release the same upon request by the holder
of any Senior Note.

 

(d) Any payments received by the Payee in violation of the terms hereof shall be
held by the Payee in trust for the holders of the Senior Debt, and the Payee
shall immediately turn over such payments to such holders, in the form received,
to be applied on the Senior Debt.

 

(e) Unless and until the Senior Debt has been indefeasibly paid in full in cash,
the Payee shall not (i) commence any action or proceeding of any kind whatsoever
against the Maker or any of its assets to recover all or any part of the
Subordinated Debt, or (ii) join with any creditor in bringing any proceedings
against the Maker under any liquidation, conservatorship, bankruptcy,
reorganization, rearrangement, debtor’s relief, or other insolvency law now or
hereafter existing.

 

(f) In the event of any liquidation, conservatorship, bankruptcy,
reorganization, rearrangement, debtor’s relief, or other insolvency proceedings
involving the Maker, the Payee will, at the request of any Person designated in
writing by the holders of 51% or more of the aggregate principal amount of the
Senior Notes then outstanding, file any claims, proofs of claim, or other
instruments of similar character necessary to enforce the obligations of the
Maker in respect of the Subordinated Debt and will hold in trust for the holders
of the Senior Debt and pay over to such holders, in the form received, to be
applied on the Senior Debt, any and all moneys, dividends, or other assets
received in any such proceedings on account of the Subordinated Debt, and unless
and until the Senior Debt shall be indefeasibly paid in full in cash, any Person
designated in writing by the holders of 51% or more of the aggregate principal
amount of the Senior Notes then outstanding may, as attorney-in-fact for the
Payee, take such action on behalf of the Payee, and the Payee hereby appoints
each Person so designated as attorney-in-fact for the Payee to demand, sue for,
collect, and receive any and all such moneys, dividends, or other assets and
give acquittance therefor and to file any claim, proof of claim, or other
instrument of similar character and to take such other proceedings in such
Person’s name or in the name of the Payee as such Person may deem necessary or
advisable for the enforcement of the agreements contained in this Subordinated
Intercompany Note, and the Payee will execute and deliver to such Person and
each holder of the Senior Notes such other and further powers of attorney or
other instruments as such Person may request in order to accomplish the
foregoing.

 

(g) So long as any Senior Debt remains unpaid, the Payee will not (i) amend,
modify or alter in any way the terms of the Subordinated Debt or any document,
agreement, instrument or certificate relating thereto (including, without
limitation, this Subordinated Intercompany Note) in a manner to alter the terms
of subordination or to otherwise adversely affect any holder of the Senior Debt,
as determined in such holders’ sole discretion; or (ii) exercise any remedies
with respect to any of the Subordinated Debt. The Payee agrees that it will not
challenge, object to or in any respect inhibit or otherwise interfere with the
enforcement by any holder of the

 

E-4

--------------------------------------------------------------------------------

Senior Debt of any of its rights or remedies in respect of the Senior Debt or
this Subordinated Intercompany Note.

 

(h) No holder of the Senior Debt shall have any liability to the Payee with
respect to, and the Payee waives any claim or defense which the Payee may now or
hereafter have against any holder of the Senior Debt arising from, (i) any and
all actions which any holder of the Senior Debt takes or omits to take
(including, without limitation, actions with respect to the creation, perfection
or continuation of Liens in any collateral now or hereafter securing any of the
Senior Debt, actions with respect to the occurrence of any default under any
Senior Debt, actions with respect to the foreclosure upon, sale, release of,
depreciation of or failure to realize upon any of such collateral, and actions
with respect to the collection of any claim for all or any part of the Senior
Debt from any account debtor, guarantor or any other Person) with respect to the
Senior Debt or the valuation, use, protection or release of any collateral now
or hereafter securing same; (ii) any right, now or hereafter existing, to
require any holder of the Senior Debt to proceed against or exhaust any
collateral now or at any time hereafter securing the Senior Debt or to marshal
any assets in favor of the Payee; (iii) any notice of the incurrence or increase
of Senior Debt, it being understood that any holder of the Senior Debt may make
advances now or hereafter relating to the Senior Debt, without notice to or
authorization of the Payee, in reliance upon these subordination provisions,
(iv) any defense based upon or arising by reason of (A) any disability or other
defense of the Maker or any other person or entity; (B) any lack of authority of
any agent or any other person or entity acting or purporting to act on behalf of
the Maker or the Payee; or (C) any failure by any holder of the Senior Debt to
properly perfect any Lien in any asset of the Maker; (v) the election by any
holder of the Senior Debt, in any proceeding instituted under Chapter 11 of
Title 11 of the United States Code (11 U.S.C. ss. 101 et seq.) (the “BANKRUPTCY
CODE”), of the application of Section 1111(b)(2) of the Bankruptcy Code; and/or
(vi) any borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code.

 

(i) The holders of the Senior Debt may, at any time and from time to time,
without the consent of or notice to the Payee, without incurring responsibility
to the Payee, and without impairing or releasing, any of its rights, or any of
the obligations of the Payee, (i) change the amount, manner, place, or terms of
payment or change or extend the time of payment of or increase, renew or alter
the Senior Debt, or any part thereof, or enter into or amend in any manner any
agreement (including any related loan agreement, promissory notes and collateral
documents) relating to the Senior Debt; (ii) sell, exchange, release, or
otherwise deal with all or any part of any property by whomsoever now or at any
time hereafter pledged or mortgaged to secure, or howsoever securing, the Senior
Debt, or any part thereof; (iii) release anyone liable in any manner for the
payment or collection of the Senior Debt or any part thereof; (iv) exercise or
refrain from exercising any rights against the Maker and others (including the
Payee); and (v) apply any sums, by whomsoever paid or however realized, to the
Senior Debt.

 

6. Prohibition on Transfers or Assignments. So long as the Senior Debt remains
outstanding, the Payee shall not transfer or assign this Subordinated
Intercompany Note, without the prior written consent of the holders of 51% or
more of the aggregate principal amount of the Senior Notes then outstanding.

 

E-5

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7. Third Party Beneficiaries. The holders of the Senior Debt shall be third
party beneficiaries hereunder, and such holders shall be entitled to enforce the
terms of this Subordinated Intercompany Note; provided, however, that no other
creditor of the Payee and no other party acting by or through the Payee shall
have any rights hereunder or shall be entitled to rely hereon. As used in this
Subordinated Intercompany Note, the phrase “holders of the Senior Debt” includes
any transferees from time to time thereof.

 

8. Notices. Any notice, demand or other communication required or permitted to
be given to any party hereunder shall be in writing, and shall be deemed to have
been delivered when actually received or, regardless of whether or not received,
on the second business day after deposit in the United States mail, registered
or certified mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth above or such other address as may hereafter be
indicated by written notice delivered to the other party in accordance with the
terms hereof.

 

9. Governing Law. THIS SUBORDINATED INTERCOMPANY NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
                     WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS.

 

Executed as of the date set forth on the first page of this Subordinated
Intercompany Note.

 

ST. LOUIS POST-DISPATCH LLC

BY:         

Name:

   

Title:

 

By its execution below, the Payee consents and agrees to be bound by the
provisions of this Subordinated Intercompany Note applicable to it.

 

PULITZER INC.

By:         

Name:

   

Title:

 

E-6

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Schedule 1

 

Date

--------------------------------------------------------------------------------

 

Amount Advanced

--------------------------------------------------------------------------------

 

E-7

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EXECUTION VERSION

 

AMENDMENT NO. 1 TO NOTE AGREEMENT

 

THIS AMENDMENT NO. 1 TO NOTE AGREEMENT (this “Amendment”) is entered into as of
November 23,2004 by and between ST. LOUIS POST-DISPATCH LLC, a Delaware limited
liability company (the “Company”), and the undersigned holders of Notes (as
hereinafter defined).

 

Recitals

 

A. The Company entered into that certain Note Agreement dated as of May 1, 2000
(as amended, restated, supplemented or otherwise modified from time to time, the
“Note Agreement”), with the several Purchasers listed in the Purchaser Schedule
attached thereto, pursuant to which the Company issued and sold to such
Purchasers the Company’s 8.05% Senior Notes due April 28, 2009, in the aggregate
principal amount of $306,000,000 (together with any such promissory notes that
may have been issued in substitution or exchange therefor prior to the date
hereof, the “Notes”).

 

B. As of the Effective Date (as hereinafter defined), the undersigned holders of
Notes together hold at least 51% of the aggregate outstanding principal amount
of the Notes, and therefore constitute the Required Holder(s) (as defined in the
Note Agreement) for purposes of this Amendment.

 

C. The Company desires to make certain amendments and modifications to the Note
Agreement, as set forth in this Amendment, and the undersigned holders of Notes,
subject to the terms and conditions set forth herein, are willing to agree to
such amendments and modifications.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the respective meanings ascribed to them in the Note Agreement.

 

2. Amendments to Paragraph 6C(3) (Loans, Advances and Investments).

 

(a) Paragraph 6C(3) of the Note Agreement is amended by deleting clause (xii)
thereof in its entirety and replacing it with the following:

 

“(xii) own, purchase or acquire investments in money market funds that are
classified as current assets in accordance with generally accepted accounting
principles, and that are rated “AAAm” or the equivalent by Standard & Poor’s
Ratings Group, or Moody’s Investors Service, Inc. or Fitch Investors Service,
Inc., which funds are managed by either (a) Persons having capital and surplus,
or net worth, in excess of $500,000,000 or (b) any Person that is a direct or
indirect subsidiary of a Person described in the foregoing clause (a);”

--------------------------------------------------------------------------------

(b) Paragraph 6C(3) of the Note Agreement is further amended by (i) deleting the
word “and” from the end of clause (xviii) thereof, (ii) renumbering clause (xix)
thereof as clause (xx) and (iii) adding a new clause (xix) thereto, such new
clause (xix) to read as follows:

 

“(xix) own, purchase or acquire investments in commingled funds/portfolios that
invest primarily in U.S. dollar denominated obligations, with a weighted average
portfolio maturity of 120 days or less, and rated “AAA” or the equivalent, by at
least two of Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc.
and Fitch Investors Service, Inc., which funds are managed by either (a) Persons
having capital and surplus, or net worth, in excess of $500,000,000 or (b) any
Person that is a direct or indirect subsidiary of a Person described in the
foregoing clause (a); and”

 

3. Representations and Warranties of the Company. The Company hereby represents
and warrants as follows:

 

(a) Organization; Power and Authority: Enforceability. The Company is a limited
liability company duly organized and validly existing in good standing under the
laws of the State of Delaware. The Company has all requisite limited liability
company power to execute and deliver this Amendment and to perform its
obligations under this Amendment and the Note Agreement as amended hereby. The
execution and delivery by the Company of this Amendment and the performance by
the Company of its obligations under this Amendment and the Note Agreement as
amended hereby have been duly authorized by all requisite limited liability
company action on the part of the Company. The Company has duly executed and
delivered this Amendment, and this Amendment and the Note Agreement as amended
hereby constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.

 

(b) No Default or Event of Default. No Default or Event of Default exists,
either before or immediately after giving effect to this Amendment.

 

(c) No Material Adverse Change. Since December 31, 2003, there has been no
material adverse change in (i) the business, condition or operations (financial
or otherwise) of the Company and its Subsidiaries, (ii) the ability of the
Guarantor to perform its obligations under the Guaranty Agreement or the ability
of the Company to perform its obligations under the Note Agreement or the Notes
or (iii) the validity or enforceability of the Note Agreement, the Guaranty
Agreement or the Notes.

 

2

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4. Conditions to Effectiveness. This Amendment shall become effective, as of the
date first written above (the “Effective Date”), upon satisfaction of the
following conditions precedent:

 

(a) The undersigned holders of Notes shall have received the following, each in
form and substance satisfactory to such holders, in their sole discretion, duly
executed and delivered by each of the parties thereto:

 

(i) a counterpart of this Amendment; and

 

(ii) Amendment No. 2 to Guaranty Agreement, dated as of even date herewith, with
respect to the Guaranty Agreement.

 

(b) The representations and warranties of the Company contained in this
Amendment and the Note Agreement shall be true on and as of the Effective Date
(except for those which expressly relate to an earlier date, which shall be true
on and as of such earlier date).

 

5. Miscellaneous.

 

(a) References to Note Agreement. Upon and after the date of this Amendment,
each reference to the Note Agreement in the Note Agreement, the Guaranty
Agreement, the Notes or any other instrument or agreement entered into in
connection therewith or otherwise related thereto shall mean and be a reference
to the Note Agreement as amended by this Amendment.

 

(b) Ratification and Confirmation. Except as specifically amended herein, the
Note Agreement shall remain in full force and effect, and is hereby ratified and
confirmed.

 

(c) No Waiver. The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any holder of Notes,
nor constitute a waiver of any provision of the Note Agreement, the Guaranty
Agreement, any Note or any other instrument or agreement entered into in
connection therewith or otherwise related thereto.

 

(d) Expenses. The Company agrees to pay promptly, or to cause the Guarantor to
pay promptly, all expenses of the holders of Notes related to this Amendment and
all matters contemplated hereby, including, without limitation, all fees and
expenses of the holders’ special counsel.

 

(e) GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK.

 

(f) Guarantor Consent. Notwithstanding that such consent is not required under
the Guaranty Agreement, the Guarantor consents to the execution and delivery of
this Amendment by the parties hereto. As a material inducement to the
undersigned holders of Notes to amend the Note Agreement, the Guarantor (i)
acknowledges and confirms the continuing existence, validity and effectiveness
of the Guaranty Agreement and (ii) agrees that the execution, delivery

 

3

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and performance of this Amendment shall not in. any way release, diminish,
impair, reduce or otherwise affect its obligations under the Guaranty Agreement.

 

(g) Counterparts. This Amendment may be executed in counterparts (including
those transmitted by facsimile), each of which shall be deemed an original and
all of which taken together shall constitute one and the same document. Delivery
of this Amendment may be made by facsimile transmission of a duly executed
counterpart copy hereof.

 

[The remainder of this page is intentionally left blank; signature pages follow]

 

4

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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed
and delivered by their duly authorized officers as of the date first above
written.

 

ST. LOUIS POST-DISPATCH LLC

By:   /s/    ROBIN L. SPEARS        

Name:

  Robin L. Spears

Title:

  Vice-President

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By:   /s/    BRIAN LEMONS             Vice-President

AMERICAN GENERAL LIFE INSURANCE COMPANY

AIG ANNUITY INSURANCE COMPANY

AIG EDISON LIFE INSURANCE COMPANY

By:  

AIG Global Investment Corp., Investment Advisor

    By:   /s/    PETER DEFAZIO            

Name:

  Peter DeFazio    

Title:

  Vice President

FIRST COLONY LIFE INSURANCE COMPANY

By:   /s/    JOHN R. ENDRES        

Name:

  John R. Endres

Title:

  Investment Officer

 

Signature page to Amendment No. 1 to Note Agreement

--------------------------------------------------------------------------------

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

By:   /s/    MARK E. KISHLER        

Name:

  Mark E. Kishler

Its

  Authorized Representative

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, for its Group Annuity Separate
Account

By:  

Northwestern Investment Management Company

    By:   /s/    MARK E. KISHLER            

Name:

  Mark E. Kishler    

Its

  Managing Director

PACIFIC LIFE INSURANCE COMPANY

By:   /s/    DIANE W. DALES        

Name:

  Diane W. Dales

Title:

  Assistant Vice President By:   /s/    DAVID C. PATCH        

Name:

  David C. Patch

Title:

  Assistant Secretary

 

Agreed and acknowledged for the Purposes specified in Section 5(f).

PULITZER INC.

By:   /s/    JON H. HOLT        

Name:

  Jon H. Holt

Title:

  Treasurer

 

Signature page to Amendment No. 1 to Note Agreement