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

 
 
 
ASSET PURCHASE AGREEMENT
 
by and among
 
GATEHOUSE MEDIA, INC.,
 
GATEHOUSE MEDIA OPERATING, INC.,
 
MORRIS PUBLISHING GROUP, LLC,
 
MPG ALLEGAN PROPERTY, LLC,
 
BROADCASTER PRESS, INC.,
 
MPG HOLLAND PROPERTY, LLC,
 
THE OAK RIDGER, LLC,
 
YANKTON PRINTING COMPANY
 
AND
 
MORRIS COMMUNICATIONS COMPANY, LLC
 

 
Effective as of October 23, 2007

 
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TABLE OF CONTENTS

ARTICLE I.  SALE OF ACQUIRED ASSETS AND TERMS OF PAYMENT
 
1.1          Transfer of Acquired Assets 
1.2          Excluded Assets 
1.3          Liabilities. 
1.4          Purchase Price; Payment of Purchase Price 
1.5          Manner of Payment 
1.6          Adjustments 
1.7          Allocation of Purchase Price 
 
 
ARTICLE II.  THE CLOSING[

 
2.1          Time and Place of Closing 
2.2          Deliveries by Seller 
2.3          Deliveries by Buyer 
2.4          Taking of Necessary Action; Further Action 16
 
 
ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF SELLERS AND MORRIS
COMMUNICATIONS

 
3.1          Organization; Qualification 
3.2          Authority Relative to this Agreement 
3.3          Income Statements 
3.4          Business Since the Income Statement Date 
3.5          Non-Contravention; No Defaults 
3.6          Undisclosed Liabilities
3.7          Licenses and Authorizations
3.8          Condition and Adequacy of the Acquired Assets; Title
3.9          Contracts and Arrangements
3.10        Real Property
3.11        Intellectual Property 
3.12        Litigation and Compliance with Laws
3.13        Labor Relations and Employee Issues; Employee Benefit Programs;
ERISA 
3.14        INTENTIONALLY OMITTED
3.15        Changes 
3.16        Environmental Matters 
3.17        INTENTIONALLY OMITTED
3.18        Insurance 
3.19        Taxes 
3.20        Investment Representations
3.21        Brokers
 
 
ARTICLE IV.  REPRESENTATIONS AND WARRANTIES OF BUYER

 
4.1          Organization 
4.2          Authority Relative to this Agreement 
4.3          No Defaults 
4.4           Non-Contravention; No Defaults
4.5           Financial Capability
4.6          Reports and Financial Statements 
4.7          Absence of Certain Changes or Events 
4.8          Brokers 
 
 
ARTICLE V.  PRE-CLOSING COVENANTS OF SELLERS AND BUYER PENDING THE CLOSING DATE.

 
5.1          Maintenance of Business 
5.2          Organization; Goodwill 
5.3          Access to Facilities, Files and Records 
5.4          Representations and Warranties 
5.5          Corporate Action 
5.6          Consents 
5.7          Confidential Information 
5.8          Consummation of Agreement 
5.9          Notice of Proceedings 
5.10        Interim Financial Statements 
5.11        Taxes 
5.12        Audited Financial Statements; Interim Financial Statements 
5.13        Title Matters
5.14        Buyer's Representations and Warranties 
5.15        Corporate Action 
5.16        Consummation of Agreement 
5.17        Notice of Proceedings
5.18        No Solicitation; Acquistion Proposals
5.19        Phase I Environmental Site Accessment 
5.20        Bulk Transfer Laws 
 
 
ARTICLE VI.  ADDITIONAL COVENANTS47

 
6.1          No Securities Transactions 
 
 
ARTICLE VII.  CONDITIONS TO THE OBLIGATIONS OF SELLERS

 
7.1          Representations, Warranties and Covenants 
7.2          Proceedings.
7.3          Hart-Scott-Rodino. 
 
 
ARTICLE VIII.  CONDITIONS TO THE OBLIGATIONS OF GATEHOUSE MEDIA AND BUYER

 
8.1          Representations, Warranties and Covenants 
8.2          Proceedings 
8.3          Hart-Scott-Rodino. 
8.4          Consents. 
8.5          Title Insurance
8.6          Real Property Phase I Reports 
8.7          Landlord Estoppel Certificates
 
 
ARTICLE IX.  INDEMNIFICATION

 
9.1
Survival; Limitations 
 

 
9.2          Indemnification of Buyer and GateHouse Media 
9.3          Indemnification of Sellers and Morris Communications
9.4          Notice of Claims
9.5          Defense of Third Party Claims 
 
 
ARTICLE X.  MISCELLANEOUS PROVISIONS

 
10.1          Risk of Loss
10.2          Termination of Agreement 
10.3          Liabilities Upon Termination 
10.4          Expenses 
10.5          Employees and Employee Benefits 
10.6          Further Assurances and Consents
10.7          Waiver of Compliance 
10.8          Notices 
10.9          Assignment 
10.10        Governing Law 
10.11        Public Announcements 
10.12        No Third Party Rights 
10.13        Waiver of Jury Trial 
10.14        Counterparts
10.15        Headings 
10.16        Specific Performance 
10.17        Severability 
10.18        Entire Agreement; Amendments 
10.19        Guaranties
10.20        Knowledge
 
 
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.List of Schedules (Delivered Concurrently)

Schedule 1.1(f)  Names of Publications
Schedule 1.2(h) Excluded Assets
Schedule 1.6(a)  Sellers Accounting Practices
Schedule 3.3      Income Statements
Schedule 3.4      Business Since Income Statement Date
Schedule 3.5      Non-Contravention; No Defaults
Schedule 3.7      Material Permits
Schedule 3.8      Condition and Adequacy of the Acquired Assets; Title
Schedule 3.9      Material Contracts
Schedule 3.10(a)  Owned Real Property
Schedule 3.10(b)  Leased Real Property
Schedule 3.10(f)   Flood Plains
Schedule 3.10(g)  Facilities
Schedule 3.10(h)  Improvements
Schedule 3.11       Intellectual Property
Schedule 3.12       Litigation and Compliance with Laws
Schedule 3.13(a)  Employees; Salaries
Schedule 3.13(b)  Labor Agreements
Schedule 3.15       Changes Since Income Statement Date
Schedule 3.16       Environmental Matters
Schedule 3.18       Insurance
Schedule 3.19       Taxes
Schedule 4.4         Non-Contravention; No Defaults
Schedule 5.1         Maintenance of Business

Exhibits

Exhibit A                                Publications

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ASSET PURCHASE AGREEMENT
 
 
THIS ASSET PURCHASE AGREEMENT (this “Agreement”), is made effective as of _____
, 2007, by and among GateHouse Media Operating, Inc., a Delaware corporation
(“Buyer”), GateHouse Media, Inc., a Delaware corporation (“GateHouse Media”),
Morris Communications Company LLC, a Georgia limited liability company (“Morris
Communications”), Morris Publishing Group, LLC, a Georgia limited liability
company (“Morris Publishing”), MPG Allegan Property, LLC, a Georgia limited
liability company (“MPG Allegan”), Broadcaster Press, Inc., a South Dakota
corporation (“Broadcaster”), MPG Holland Property, LLC, a Georgia limited
liability company (“MPG Holland”), The Oak Ridger, LLC, a Tennessee limited
liability company (“Oak Ridger”) and Yankton Printing Company, a South Dakota
corporation (“Yankton” and collectively, with Morris Publishing, MPG Allegan,
Broadcaster, MPG Holland and Oak Ridger, are referred to herein as “Sellers” and
each individually as a “Seller”.  As used herein, and as the context requires,
the term “Sellers” shall also refer to “Seller”).

WHEREAS, Sellers operate businesses which own and publish various daily and
non-daily publications which are  distributed  in South Dakota, Florida, Kansas,
Michigan, Missouri, Nebraska, Oklahoma and Tennessee, together with all related
publications (as set forth on Exhibit A hereto) and services and assets and
facilities, all related domain names, with related HTML design and data and all
of Sellers’ rights to prepare, publish, sell and distribute any of the foregoing
in all languages (collectively, the “Publications”) and the mastheads and
certain other intellectual property associated with the Publications
(collectively, the “Mastheads”, which term is more particularly defined in
Section 1.1);

WHEREAS, Sellers operate the Publications from facilities in South Dakota,
Florida, Kansas, Michigan, Missouri, Nebraska, Oklahoma and Tennessee which are
owned or leased by Sellers, together with all printing sites, buildings,
offices, structures, residences, fixtures, and improvements, including all real
property, whether developed or undeveloped, owned or leased by Sellers or
associated with any of the foregoing (collectively, the “Facilities”); and

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WHEREAS, Sellers desire to sell and Buyer desires to purchase substantially all
of the assets related to the operation, publication and distribution of the
Publications as a going concern, together with the Mastheads.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and based upon the representations and warranties made by
each of the parties to the other in this Agreement, the parties have agreed to
consummate the sale of the Publications and the Mastheads on the terms contained
herein.

ARTICLE I.
SALE OF ACQUIRED ASSETS AND TERMS OF PAYMENT
 

1.1           Transfer of Acquired Assets.  Upon the terms and subject to the
conditions of this Agreement, on the Closing Date (as defined in Section 2.1
hereof) Sellers will sell, assign, convey or cause to be conveyed, transfer and
deliver to Buyer, and Buyer will purchase and accept from Sellers, all of the
assets and properties of Sellers, tangible or intangible, of every kind and
description, used by Sellers that relate primarily to the business and operation
of the Publications as a going concern (all such assets being referred to herein
as the “Sellers’ Assets”), but excluding the Excluded Assets described in
Section 1.2 below.

In addition, upon the terms and subject to the conditions of this Agreement, on
the Closing Date, Sellers will sell, assign, convey or cause to be conveyed,
transferred and delivered to Buyer, and Buyer will purchase and accept from
Sellers, the Publications’ “Mastheads” which consist of the mastheads,
trademarks, trade dress, trade names, service marks, registrations, domain
names, and other property rights relating thereto and all goodwill associated
therewith.  The Sellers’ Assets along with the Mastheads are hereinafter
collectively referred to as the “Acquired Assets.”  The Acquired Assets include,
without limitation, the following:

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(a)           The Owned Real Property (as defined in Section 3.10(a));
(b)           All Real Property Leases for the Leased Real Property (as such
terms are defined in Section 3.9 and Section 3.10(b) respectively);
(c)           All tangible personal property, editorial material, work in
process, finished goods, manuscripts, notes and drafts, graphic artwork, cuts,
photographs and negatives owned by Sellers to the extent they relate primarily
to the Publications; all promotional materials, inserts, and direct mail
materials owned by Sellers to the extent they relate primarily to the
Publications; all stationery, supplies, purchase orders, forms, labels, shipping
materials and catalogs owned by Sellers to the extent they relate primarily to
the Publications; and all lists owned by Sellers of contributors, authors,
correspondents, reviewers, photographers, illustrators and editors who
contribute or have contributed to the Publications; all other inventory and
supplies, and other assets and equipment relating primarily to the Publications;
(d)           All contracts, agreements and similar documents that relate
primarily to the operation of the Publications or are otherwise specifically
assumed pursuant hereto, together with all subscriptions and all orders and
agreements for the sale of advertising, space reservations and insertion orders
relating to the Publications, including without limitation those described in
Schedule 3.9;
(e)           All of Sellers’ right, title and interest in and to all licenses,
Permits (as defined in Section 3.16), variances, franchises, certifications,
approvals and other governmental authorizations relating primarily to the
Publications, together with any renewals, extensions or modifications thereof
and additions thereto;
(f)           All publishable materials of any nature primarily used by the
Publications, the names  used by each Publication including but not limited to
those set forth on Schedule 1.1(f), all copyrights, patents, trademarks, service
marks, logotypes and trade names (including registrations and applications for
registration of any of the foregoing), domain names (including HTML design and
data related to said domain names), processes, inventions, computer software,
computer programs and software and program rights, trade secrets, goodwill and
other intangible rights and interests issued to or owned by Sellers and used
primarily in connection with the operation, publication and distribution of the
Publications or primarily in connection with the ownership of any of the
Acquired Assets (collectively referred to herein as the “Rights”), it being
understood that computers and servers located at Sellers’ home office in
Augusta, Georgia, and

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software developed by Sellers for use beyond the Publications are not used
primarily by the Publications and are not “Rights”;
(g)           All of Sellers’ accounts or other receivables, claims, evidences
of debt owed to Sellers, utility deposits and other deposits and prepaid
expenses arising out of Sellers’ operation of the Publications, together with
all records relating thereto;
(h)           All of the Publications’ files and other records, in whatever form
is reasonably practicable, relating to the operation of the Publications,
including without limitation all of the historical materials relating to the
Publications’ advertising, circulation and distribution, all circulation,
subscriber, delivery and mailing lists and carrier routes maintained by Sellers,
all data related to such lists, all circulation readership studies, audience
surveys and research owned by Sellers, and all other mailing lists, together
with all records, reports and disks of computer data owned by Sellers, rate
cards, verification cards, advertising insertion orders, specimen copies of all
advertisements carried in the Publications, and copies of current price lists,
discount lists, catalogs, public relations materials, sales correspondence, call
reports, call books, advertiser lists and sales promotion lists, in each case to
the extent they relate primarily to the Publications;
(i)           All claims, causes of action, rights of recovery and rights of
set-off of any kind (including, without limitation, rights under and pursuant to
all warranties, representations and guarantees made by suppliers, distributors
or vendors of products, materials or equipments, or components thereof) to the
extent they relate to the Publications, which are owned by Sellers and relate to
the period of time following the Closing;
(j)           All of Sellers’ libraries of back and current issues of the
Publications, in whatever medium;
(k)           All of Sellers’ goodwill in and going concern value of the
Publications;
(l)           Any prepaid Taxes of Sellers which are included as Acquired Assets
on the Closing Date Balance Sheet (as defined in Section 1.6(c));
(m)           All of Sellers’ right, title and interest in and to any
non-solicitation, non-competition and non-disclosure agreements to the extent
benefiting the Publications;
(n)           The bank accounts and the cash contained therein as of the Closing
Date used as operating accounts for the Publications, a list of which shall be
provided by Sellers to Buyer prior to Closing and the balances of which shall be
included on the Closing Date Balance Sheet; and

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(o)           Without duplication, all assets relating primarily to the
operations of the Publications reflected in the Closing Date Balance Sheet.

1.2           Excluded Assets.  The following assets relating to the business of
operating, publishing and distributing the Publications shall be retained by
Sellers and shall not be sold, assigned, conveyed, transferred or delivered to
Buyer (the “Excluded Assets”):

(a)           Claims by Sellers with respect to the Excluded Assets and
liabilities not assumed by Buyer, including without limitation all refunds and
claims for Tax refunds (except for prepaid Taxes acquired by Buyer pursuant to
Section 1.1(l) above) and counterclaims with respect to obligations and
liabilities not being assumed by Buyer hereunder;
(b)           All contracts of insurance, Tax records and Tax Returns;
(c)           All Employee Benefit Programs (as defined in Section 3.13(g));
(d)           The right to use the “Morris” and “Morris Publishing” names and,
except for the agreements described in Schedule 3.9, the right to participate in
any plan, procedure or right that was made available to the Publications by or
through Morris Communications, or any of its Affiliates (as defined below),
including but not limited to any Employee Benefit Program (as defined in Section
3.13(g));
(e)           All claims, refunds, causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment of Sellers related to the
businesses of the Publications on or prior to the Closing, exclusive of the
rights granted in Section 1.1(g) ;
(f)           (i) the franchise to be a limited liability company or
corporation; (ii) the organizational documents (including articles or
certificate of formation or bylaws (as applicable)); (iii) the minute books;
(iv) the stock and/or membership interest  ledgers and all stock and/or
membership certificates; (v) the qualifications to transact business as a
foreign entity; (vi) the arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers; (vii) other records
or similar documents relating to the organization, maintenance and existence of
Sellers as limited liability companies and/or corporations; and (vii) any other
corporate records relating to the limited liability company and/or corporate
organization or capitalization (as applicable) of Sellers;

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(g)           All items that are located at the headquarters offices of Morris
Communications or otherwise not located at the Real Property (as defined in
Section 3.10) included in the Acquired Assets except for the data relating to
the Publications described in Section 1.1(h) stored on Sellers’ server at the
headquarters offices, copies of which will be delivered or transmitted to Buyer
in whatever form is reasonably practicable for the parties;
(h)           Any right, property or asset described in Schedule 1.2(h),
including the property and rights which are shared with any Affiliates of any
Seller and not used primarily in the businesses of the Publications;
(i)           Any assets or properties of Sellers, tangible or intangible, of
every kind and description which are not used primarily in connection with the
businesses and operation of the Publications and are not included in the Closing
Date Balance Sheet;
(j)           Sellers’ rights under this Agreement;
(k)           Cornerstone Property, 2.86 acres (Block 69, Parcel B) at corner of
Highway 50 and Burleight Street, Yankton, Yankton County, South Dakota;
(l)           All tax sharing agreements and management agreements with Morris
Communications; and
(m)           All equity interests in third parties, including but not limited
to equity interests of any Seller in any Affiliate of Morris Communications;
(n)           For purposes of this Agreement, “Affiliate” of a person means any
other person that directly or indirectly controls, is controlled by, or is under
common control with, such person.  The term “control”, “controlled by” and
“under common control with”, as used with respect to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of securities, by contract or otherwise.

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1.3           Liabilities.

(a)           The Acquired Assets shall be sold and conveyed to Buyer free and
clear of all Liens (as defined in Section 3.8), except for Permitted
Encumbrances (as defined in Section 3.10), except that Buyer shall assume,
discharge and perform the following liabilities (the “Assumed Liabilities”):
(i)           those liabilities and obligations of Sellers under the contracts
assigned to Buyer which are described in Section 1.1(d) (other than any
obligation under any such contract related or arising prior to the Closing Date,
including, without limitation, any liability for breach or nonperformance);
provided, however, that if any such contract requires a consent to the
assignment thereof to Buyer and such consent has not been obtained, then this
Agreement, to the extent permitted by law, shall constitute an equitable
assignment by Sellers to Buyer of all rights, benefits, title and interest,
liabilities and obligations under such contract;
(ii)           those liabilities and obligations of Sellers as of the Closing
Date under agreements for advertising to the extent to be run in issues of the
Publications published after the Closing Date (subject to the adjustment
provisions of Section 1.6 below);
(iii)           those liabilities and obligations of Sellers for trade accounts
payable, advertising rebates payable and taxes which are included on the Closing
Date Balance Sheet (as defined Section 1.6(c) below) (to the extent of the
amount reflected on such balance sheet as a liability) and any expenses for
which Buyer is responsible under Section 1.6(a); and
(iv)           those liabilities and obligations of the Publications included on
the Closing Date Balance Sheet, which shall include paid in advance
subscriptions and accrued liabilities of Sellers to employees of Sellers for
unused vacation, sick leave, holiday and personal days (to the extent of the
amounts reflected on such balance sheet and only to the extent Sellers do not
have a legal obligation to pay such amounts upon termination of employment on or
before the Closing Date).
(b)           Except as set forth in Section 1.3(a) above or as otherwise
expressly set forth herein, Buyer does not assume and will not be liable for,
and Sellers shall remain unconditionally liable for, any other liabilities or
obligations of Sellers (or any other person, in the case of liabilities or
obligations for Taxes) (the “Excluded Liabilities”), including, but not limited
to:

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    (i)           any liability or obligation arising prior to the Closing under
any contract not described in Section 1.1(d) above;
(ii)           any liability under any contract of insurance or relating to any
Excluded Assets;
(iii)           any liability to any of Sellers’ employees of any nature
whatsoever related to the period on or prior to the Closing Date, including
under any employee benefit plan of any nature and including, but not limited to,
any Employee Benefit Programs, and any unemployment or workers compensation
claims;
(iv)           any liability arising out of any termination by any of Sellers of
the employment of any employee, consultant or independent contractor of any of
Sellers on or prior to the Closing Date, or who retired on or prior to the
Closing Date;
(v)           any liability under any litigation, proceeding or claim of any
nature related to the Publications arising during, or brought by any person or
entity with respect to, the period of time on or prior to the Closing Date,
whether or not such litigation, proceeding or claim is pending, threatened or
asserted before, on or after the Closing Date;
(vi)           any liability for (A) any Taxes (other than Taxes of Sellers
assumed by Buyer pursuant to Section 1.3(a)(iii) above) with respect to the
Publications or the Acquired Assets for periods ending on or prior to the
Closing Date and Taxes deemed, pursuant to Section 1.6(b), payable for the
portion ending on the Closing Date of a Straddle Period (as defined in Section
1.6(b)), (B) except as allocated in Section 10.4, any Taxes imposed on the
transfer of the Acquired Assets or the Publications on or prior to the Closing
Date and, (C) any estate or gift Taxes imposed with respect to Sellers, the
Acquired Assets or the Publications on or prior to the Closing Date; provided,
however, that Transfer Taxes (as defined in Section 10.4) on the transfer of the
Acquired Assets pursuant to this Agreement shall be paid by Buyer as provided in
Section 10.4;
(vii)           except as otherwise set forth in this Agreement, any and all
liabilities incurred by Sellers in connection with the negotiation, execution or
performance of this Agreement (including, without limitation, all legal,
accounting, brokers, finders and other professional fees and expenses);
(viii)          any and all obligations, liabilities and/or commitments,
including but not limited to obligations, liabilities and/or commitments
pursuant to any Environmental Law (as defined in Section 3.16), arising out of
or related to facts, circumstances, conditions or

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events arising from or related to the Real Property (as defined in Section 3.10)
and/or the operation of the Publications thereon that occurred on or prior to
the Closing Date; and
(ix)           the Bank Liens (as defined in Section 3.10(l)).

1.4           Purchase Price; Payment of Purchase Price.  Subject to the
conditions contained in this Agreement, and in consideration of the sale of the
Acquired Assets as set forth herein, Buyer agrees to pay the Purchase Price to
Sellers, at Closing, in an amount equal to One-Hundred Fifteen Million dollars
($115,000,000.00) (the “Base Purchase Price”), as adjusted by the Closing Date
Working Capital Adjustment pursuant to Section 1.6 below (the “Purchase Price”).

The Base Purchase Price will be payable as follows: (a) One Hundred Five Million
Dollars ($105,000,000) in cash (the “Cash Portion”) and (b) the balance by
GateHouse Media issuing a promissory note (the “Note”) in favor of Sellers (or
their designee) in the principal amount of Ten Million Dollars
($10,000,000).  The Note shall have a one year term; accrue interest on the
unpaid balance at the rate of eight percent (8%) per annum (which interest shall
be payable quarterly); and may be prepaid at any time without penalty.  The Note
will also provide that except pursuant to corporate credit facilities, finance
leases and purchase money security interests, GateHouse Media will not grant any
third party a position senior to that of Buyer as the Note holder.  The form of
the Note, which shall be in accordance with the above, unless agreed otherwise,
will be agreed upon by Sellers and Buyer prior to the Closing Date.

1.5           Manner of Payment.  The Cash Portion shall be paid to Sellers on
the Closing Date in immediately available funds by wire transfer to a bank
account or bank accounts designated by Sellers in writing at least two (2)
business days prior to the Closing Date.  At the Closing, GateHouse Media shall
deliver the Note to Sellers.

1.6           Adjustments.

(a)           Closing Date Working Capital Adjustment.  Sellers shall be
entitled to all income earned and collected and be responsible for all expenses
incurred in connection with the business and operation of the Publications on or
prior to the Closing Date.  Buyer shall be entitled to all

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income earned and be responsible for all expenses incurred in connection with
the business and operation of the Publications after the Closing Date.  The
Purchase Price is subject to a further adjustment for working capital (the
“Closing Date Working Capital Adjustment”) as determined in accordance with
Section 1.6(c) below.  The Closing Date Working Capital Adjustment shall be an
amount, as of the Closing Date, equal to the dollar value of the current assets
of the Publications less the dollar value of the current liabilities of the
Publications (including, but not limited to, accounts payable, prepaid
advertising, unearned subscription revenue, accrued salary, payroll and wages,
vacation and sick pay, and similar items with respect to New Employees (as
defined in Section 10.5), and net of Sellers’ reserves for uncollectible
receivables established by Sellers in the ordinary course of business consistent
with past practice, in each case only to the extent included in the Acquired
Assets or the Assumed Liabilities and as set forth in the Closing Date Balance
Sheet).

In computing the Closing Date Working Capital Adjustment, components of the
Closing Date Balance Sheet (as defined in Section 1.6(c)) shall be derived from
subsidiary ledgers maintained in accordance with Sellers’ historical accounting
practices which reflect accrual basis accounting and are utilized by Morris
Publishing in the preparation of consolidated financial statements in accordance
with generally accepted accounting principles in the United States (“GAAP”). The
Closing Date Balance Sheet shall be prepared in a manner consistent with the
notes to the Working Capital History set forth on Schedule 1.6(a), each line
item of which shall reflect components derived from and prepared consistently
with the methods used in the preparation of Morris Publishing’s balance sheets
which methods are used by Sellers in the ordinary cause of business consistent
with past practice and are in accordance with GAAP (“Sellers Accounting
Practices”).  All intercompany and Affiliate receivables or liabilities will be
treated as shareholders’ equity and will be excluded from the Closing Date
Working Capital Adjustment and will not be assumed by Buyer.  All prepaid
advertising and unearned subscription revenue shall be accrued as liabilities in
the amount of such prepayments.

(b)           Other Adjustments.  All items of income and expense directly
relating to the business of operating the Publications, other than the income
and expenses referred to above, shall be prorated between Sellers and Buyer as
of the close of business on the Closing Date.  Such items

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to be prorated shall include, without limitation, power and utility charges,
personal property Taxes and real property Taxes.  The portion of any personal
property Taxes and real property Taxes for a taxable period that includes the
Closing Date (a “Straddle Period”) that shall be deemed to be payable for the
portion of the period ending on the Closing Date shall be the amount of such
Taxes for the entire period (or, in the case of such Taxes determined on an
arrears basis, the amount such Taxes for the immediately preceding period)
multiplied by a fraction the numerator of which is the number of calendar days
in the period ending on the Closing Date and the denominator of which is the
number of calendar days in the entire period.  The portion of any other item of
income or expense for a Straddle Period that shall be deemed to be payable for
the portion of the period ending on the Closing Date shall be determined based
on an interim closing of the books to the extent practicable and otherwise based
on the formula described in the immediately preceding sentence.

(c)           Adjustment Calculations.  Three (3) business days prior to the
Closing Date, to the extent practicable, the adjustments provided in this
Section 1.6 shall be made to the Cash Portion of the Base Purchase Price on the
basis of the then most recently available financial statements of the
Publications, which shall be reflected on a preliminary balance sheet for the
Publications (the “Preliminary Balance Sheet”) prepared by Sellers in accordance
with Sellers Accounting Practices.  Within ninety (90) days after the Closing
Date, Sellers will prepare an adjusted balance sheet for the Publications (the
“Closing Date Balance Sheet”) as of the close of business on the Closing Date,
reflecting the adjustments provided in this Section 1.6 and showing the
recalculation of adjustments reflected on the Preliminary Balance Sheet, along
with back-up materials necessary for Buyer’s understanding of the Closing Date
Balance Sheet and Buyer’s confirmation of the calculations thereof.  Sellers and
their accountants will provide Buyer’s accountants with reasonable access to the
books, records and working papers of Sellers necessary to review such
calculations.  Within one-hundred fifty (150) days after the Closing Date, final
adjustments pursuant to this Section 1.6 and any required refund or payment
shall be made on the basis of the Closing Date Balance Sheet (the “Adjustment
Payment Date”), provided that if any amounts are in dispute, the Adjustment
Payment Date for the disputed amounts shall be the date payment is required to
be made as required below.  If any dispute arises over the amount to be refunded
or paid, such refund or payment shall nonetheless be promptly made to the extent

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such amount is not in dispute.  If Buyer does not notify Sellers within
forty-five (45) days of receiving the Closing Date Balance Sheet that Buyer
disputes the information contained therein, then Buyer shall be deemed to agree
to the Closing Date Balance Sheet and to
have waived all further right to dispute the information contained therein and
its use in applying the provisions of this Agreement.  If Buyer does notify
Sellers of a dispute regarding the Closing Date Balance Sheet within the
forty-five (45) day period of receiving the Closing Date Balance Sheet, and if
such dispute cannot be resolved by the parties within thirty (30) days
thereafter, such dispute shall be referred to a mutually satisfactory
independent public accounting firm of national stature which has not been
employed by any of the parties herein for the two (2) years preceding the
Closing Date.  If Buyer and Sellers cannot agree upon an independent public
accounting firm to perform the valuation of the Acquired Assets, then Buyer and
Sellers shall each select an independent public accounting firm which firms
shall select and engage an independent public accounting firm to perform and
prepare a written determination of the adjustments or dispute between the
parties. The determination of such independent accounting firm shall be
conclusive and binding on each party and any required payment or refund in
accordance therewith shall be made in immediately available funds within ten
(10) days of such determination.  The fees of such firm shall be shared equally
by Morris Publishing and Buyer.

1.7                      Allocation of Purchase Price.  Buyer and Sellers shall
reasonably cooperate and, at the request of the other party, exchange
information, including copies of IRS Form 8594, regarding allocation of the
Purchase Price to the Acquired Assets. Notwithstanding anything herein to the
contrary, Buyer and Sellers agree that the allocation of the Purchase Price
attributable to the Real Property shall be determined as follows.  As soon as
practicable after the date of this Agreement but in no event later than ten (10)
days after the date of this Agreement, Buyer and Sellers shall agree, and
Sellers shall engage an independent and mutually acceptable appraiser to perform
and prepare a written valuation of the Real Property.  The cost of the valuation
prepared by an agreed appraiser shall be borne by Buyer.   If Buyer and Sellers
cannot agree upon an independent appraiser to perform the valuation of the Real
Property, then Buyer and Sellers shall each select an independent appraiser
which appraisers shall select and engage an independent appraiser to perform and
prepare a written valuation of the Real Property.   In such event, the cost of
the valuation shall be borne equally between Buyer and Sellers.   The
 

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written valuation shall be binding on and used by Buyer and Sellers in
allocating the Purchase Price to the Real Property.  The entire portion of the
Purchase Price allocated to the Real Property shall be paid from the Cash
Portion of the Purchase Price.
 

ARTICLE II.
THE CLOSING

2.1           Time and Place of Closing.  The closing (the “Closing”) of the
sale and purchase of the Acquired Assets shall be held in the offices of
Sellers’ counsel, Hull, Towill, Norman, Barrett & Salley, on the third (3rd)
business day following the satisfaction or waiver of all of the conditions to
closing set forth in Articles VII and VIII, or at such other time and place as
shall be mutually agreed upon by the parties (the “Closing Date”).  Closing
shall be deemed effective at 11:59 p.m. local time on the Closing Date.

2.2           Deliveries by Seller.  At the Closing, Sellers, will deliver to
Buyer the following, each of which shall be in form and substance satisfactory
to the parties hereto:

(a)           Bills of sale, special warranty deeds, assignments and other
instruments of transfer and documents as shall be appropriate to carry out the
intent of this Agreement and sufficient to sell, assign, convey and transfer
good and valid (or in the case of Real Property, good and marketable) title to
the Acquired Assets to Buyer, subject only to Permitted Encumbrances;
(b)           Assignments of all Sellers’ domain names and other Rights relating
to the Publications;
(c)           Any consents to assignments from third parties obtained by Sellers
relating to the Material Contracts that require such consent as shown on
Schedule 3.9, as well as any other consents obtained by Sellers;
(d)           Receipt for the Purchase Price;
(e)           If agreed upon prior to Closing, commercially reasonable
transition services agreements among Sellers and Buyer executed by Sellers, in
form and substance mutually agreeable to Sellers and Buyer, which, among other
things, shall provide for Sellers to continue to provide certain services with
respect to the Publications for various periods of time after the Closing Date
(the “Transition Services Agreements”);

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(f)           Non-competition and non-solicitation agreements among Morris
Communications, Sellers and Buyer executed by Morris Communications and Sellers
in form and substance mutually agreeable to Sellers and Buyer (the
“Non-Competition Agreements”).  The Non-Competition Agreements shall provide
that, among other things, until the fifth anniversary (or, with respect to
non-newspaper products, the third anniversary) of the Closing Date, none of
Morris Communications or Sellers will, whether as a partner, principal,
stockholder, member of in any other equity investment or profits interest
capacity, directly or indirectly, either alone or in concert with others, (i)
establish or launch, be connected with or and or otherwise assist any daily,
bi-weekly or weekly newspaper or other publication, either in print or online,
which is primarily targeted at and is primarily intended to serve any portion or
portions of or any or all of the counties which any of the Publications
currently serve (collectively, the “Territory”), or (ii) acquire any equity or
profits or other financial interest in any such daily, bi-weekly or weekly
newspaper or other publication (other than a non-controlling or non-management
interest of any publicly owned company), Notwithstanding anything to the
contrary contained herein, the foregoing restrictions  in clauses (i)–(ii) will
not apply with respect to (A) any of Morris Communications or Sellers’
businesses (other than the Publications) as in effect (and to the same scope and
extent) as of the date hereof, (B) any “national” publications not intended to
primarily or exclusively serve any or all of the Territory, (C) non-newspaper
publications focused on the metropolitan areas of Kansas City, Kansas or
Missouri; Orlando, Florida; Knoxville, Tennessee;  or Wichita, Kansas which do
not directly or indirectly solicit local advertisers within or focused on the
Territory, and (D) new publications similar to existing (on the date hereof)
Morris Communications visitor, niche or other non-newspaper publications (such
as Where, Guest Informant, Best Read Guides or Skirt Magazines) focused on the
Kansas City, Kansas or Missouri metropolitan area which may solicit advertisers
within such area.  For purposes of the Non-Competition Agreements, “newspapers”
shall include daily and weekly publications, as well as similar on-line
publications, which deal with the general dissemination of news.  In addition,
none of Morris Communications or Sellers will, whether as a partner, principal,
stockholder, member of in any other equity investment or profits interest
capacity, directly or indirectly, either alone or in concert with others, until
the third anniversary of the Closing Date, recruit or hire (other than as a
result of a general solicitation), or otherwise solicit for employment, any
employees, or former employees of the Publications hired by Buyer or its

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Affiliates at the Closing within six (6) months following their termination of
employment with Buyer or its Affiliates (provided that the restriction in this
sentence shall not apply to any such employees terminated by Buyer or its
Affiliates; and provided further that the restrictions in this sentence shall
only apply until the first anniversary of the Closing Date  with respect to any
such employees who voluntarily leave the employ or Buyer or its Affiliates
without any solicitation, inducement or influence of any type by Morris
Communications or Sellers);
(g)           Certificates, dated as of the Closing Date, of an appropriate
officer of Morris Communications and each Seller as to approval of Morris
Communications and each Seller relating to this Agreement and the transactions
contemplated hereby;
(h)           Certificates of an appropriate officer of Morris Communications
and each Seller certifying the fulfillment of the conditions set forth in
Sections 8.1(a) and 8.1(b) below;
(i)           A certificate of an appropriate officer of each Seller as to its
status as a non-foreign entity; and
(j)           Such other certificates, instruments and documents as are required
to be delivered by Morris Communications and Sellers pursuant to the terms of
this Agreement or as may be reasonably requested by Buyer.

2.3           Deliveries by Buyer.  At the Closing, Buyer will deliver to
Sellers the following, each of which shall be in form and substance satisfactory
to the parties hereto:

(a)           Funds equal to the Cash Portion in such manner as described in
Section 1.5 above;
(b)           The Note, duly executed by GateHouse Media;
(c)           An instrument of assumption pursuant to which Buyer shall assume
the Assumed Liabilities as provided in Section 1.3 hereof
(d)           The Transition Services Agreements, if agreed upon prior to
Closing, executed by Buyer;
(e)           The Non-Competition Agreements, executed by Buyer;
(f)           Certificate dated the Closing Date, of an officer of Buyer and
GateHouse Media as to the approval of Buyer and GateHouse Media relating to this
Agreement and the transactions contemplated hereby;
(g)           Certificate of an officer of Buyer and GateHouse Media certifying
the fulfillment of the conditions set forth in Sections 7.1(a) and 7.1(b) below;
and

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(h)           Such other certificates, instruments and documents as are required
to be delivered by Buyer and GateHouse Media pursuant to the terms of this
Agreement or as may be reasonably requested by Sellers.

2.4           Taking of Necessary Action; Further Action. If, at any time after
the Closing, any further action is necessary to carry out the intent or purposes
of this Agreement and to vest Buyer with full right, title and possession to all
assets, property, rights, privileges, powers and franchises of Sellers in the
Acquired Assets and the Publications, Sellers will take all such lawful and
necessary action and execute all such documents or agreements as may be
reasonably requested by Buyer.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND MORRIS COMMUNICATIONS

Morris Communications and Sellers, jointly and severally represent and warrant
to Buyer and GateHouse Media  that the statements contained in this Article III
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date, except as may be set forth in the
disclosure schedules delivered pursuant hereto.  Disclosure made in a specific
section or subsection of the disclosure schedules shall not be deemed to have
been made with respect to any other section or subsection herein unless an
explicit cross-reference appears in such disclosure schedule to that effect or
such disclosure is reasonably apparent on its face.

3.1           Organization; Qualification.  Each Seller is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
respective organization or incorporation.  Each Seller has the full power and
authority to own and operate the Acquired Assets (excluding the Mastheads) and
carry on the business and operations of the Publications as are now being
conducted.  Each Seller has the full power and authority to own the Masthead and
the Rights.  Each Seller (a) is duly qualified to do business and in good
standing, and is duly licensed, authorized or qualified to transact business in
each jurisdiction in which the ownership or lease of real property or the
conduct of its business related to the Publications requires it to be so

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qualified, and (b) has all Permits (as defined in Section 3.16) necessary to own
its properties and assets and carry on its business related to the Publications
as it is now being conducted, except in each case, for any failures to be so
qualified or licensed, or to have such Permits which would not, individually, or
in the aggregate have or be reasonably expected to have a Material Adverse
Effect (as defined in Section 3.4 hereof).  Any applications for the renewal of
any such Permits related to the Publications that are due prior to the Closing
Date have been timely made or filed by Sellers prior to the Closing Date. No
proceeding to renew, suspend, modify, suspend, revoke, withdraw, terminate or
otherwise limit any such Permit related to the Publications is pending or
threatened.

3.2           Authority Relative to this Agreement.  Each of Morris
Communications and each Seller has the full power, authority and legal right to
execute and deliver this Agreement and to consummate the transactions and
perform its obligations as contemplated hereby.  The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action, and this Agreement has
been duly and validly executed and delivered by Morris Communications and
Sellers and, assuming due authorization, execution and delivery by Buyer and
GateHouse Media, constitutes a legal, valid and binding obligation of Morris
Communications and Sellers enforceable against Morris Communications and Sellers
in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency or similar law affecting the rights of creditors generally.

3.3           Income Statements.Schedule 3.3 sets forth (a) the unaudited
consolidated statement of income (before taxes and interest) of the Publications
for the fiscal year ended December 31, 2006 and (b) unaudited consolidated
statement of income (before taxes and interest) of the Publications for the
period through June 30, 2007 (the “Income Statement Date”) (the financial
statements referred to in clauses (a) and (b) being “Income
Statements”).  Morris Publishing operates (and reports its financial results) as
a single operating segment.  Accordingly, separate balance sheets, income
statements or other financial statements are not maintained for the Publications
as a group, or for any individual Publication.  The Income Statements were
prepared,  (i) specifically in contemplation of this Agreement, (ii) following
the guidance of the Securities and Exchange Commission (the “SEC”) for preparing
full carve-out income

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statements (but disregarding interest and taxes, as described in Schedule 3.3),
(iii) from Morris Publishing’s consolidated statements of income, and (iv) on
the accrual basis in accordance with GAAP.  Schedule 3.3 also sets forth a true
and complete line item reconciliation of such Income Statements to GAAP and to
the requirements for “carve out” financial statements.  The Income Statements
reflect fees for management and shared services paid to Affiliates and
allocations of shared expenses based upon various factors (such as a percentage
of circulation, advertising revenue, total revenue, newsprint consumption or
employees) deemed by Morris Publishing as of the Income Statement Date to be
appropriate for such expenses, but no attempt has been made to determine what
such costs would have been if the Publications had been operated on a
stand-alone basis.  Subject to the foregoing, the Income Statements fairly
present in all material respects the results of operations of the Publications
(before interest and taxes) for the periods covered thereby and have been
prepared in conformity with Sellers Accounting Practices.  The Working Capital
History has been prepared in accordance with Sellers Accounting Practices and
consistent with past practice.  Sellers shall deliver on the Closing Date to
Buyer a schedule of the Publications’ outstanding accounts receivable as of the
Closing Date.  All such accounts receivable have arisen in the ordinary course
of business consistent with past practice and represent bona fide indebtedness
incurred by the applicable account debtor and have been properly adjusted for
bankrupt and other uncollectible accounts in accordance with Sellers Accounting
Practices.  Assuming reasonable collection efforts by Buyer, Morris
Communications and Sellers have no reason to believe that such accounts
receivable would not be collectible (net of Sellers’ reserves for uncollectible
receivables established by Sellers in the ordinary course of business consistent
with past practice).

3.4           Business Since the Income Statement Date.  Except as set forth on
Schedule 3.4, since the Income Statement Date, the business of the Publications
has been conducted in the ordinary course of business and in substantially the
same manner as it was before the Income Statement Date.  Since the Income
Statement Date, there has been no change in the business, condition (financial
or otherwise), properties, operations or prospects of the Publications or other
event or occurrence which has had or would reasonably be expected to have a
material adverse effect on the business, operations, properties, condition or
prospects (financial or otherwise) of the Publications taken as a whole
(“Material Adverse Effect”) as of the Closing Date.

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3.5           Non-Contravention; No Defaults.

(a)            Except as disclosed in Schedule 3.5, the execution, delivery and
performance of this Agreement by Sellers and Morris Communications will not
(i) conflict with any provision of the governing documents of Morris
Communications or Sellers, (ii) result in a default (or give rise to any right
of termination, cancellation or acceleration), with notice or passage of time or
both, under or conflict with any of the terms, conditions or provisions of any
Material Contract (as defined in Section 3.9), note, bond, mortgage or other
instrument, obligation or agreement relating to the business or operation of the
Publications or to which any of the Acquired Assets may be subject, except for
any such defaults which would not, individually or in the aggregate, have or be
reasonably expected to have a Material Adverse Effect or a material adverse
effect on Morris Communications’ or Sellers’ ability to consummate the
transactions contemplated hereby, (iii) violate any law, statute, rule,
regulation, order, injunction or decree of any government or any agency, bureau,
board, commission, court, department, officer, official, employee, agent,
political subdivision, tribunal or other instrumentality of any government,
whether federal, state, local or foreign (each a “Governmental Authority”)
applicable to Sellers or any of the Acquired Assets except for any such
violations which would not individually or in the aggregate, have, or be
reasonably expected to have a Material Adverse Effect or a material adverse
effect on Sellers’ ability to consummate the transactions contemplated hereby,
or (iv) result in the creation or imposition of any Lien of any nature
whatsoever on any of the Acquired Assets.

(b)           Except for the required consents with respect to the contracts
referred to in Section 3.9 and the requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “Hart-Scott-Rodino Act”),
neither Morris Communications nor any Seller is required to submit any notice,
report or other filing with, or obtain any consent, approval or waiver from, any
Governmental Authority or any other third party in connection with the
execution, delivery or performance of this Agreement  or the consummation of the
transactions contemplated hereby, except for any such failure which would not
individually or in the aggregate have or be

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reasonably expected to have a material adverse effect on Sellers’ ability to
consummate the transactions contemplated hereby.

3.6           Undisclosed Liabilities.  Sellers have no obligation or liability
required to be reflected or reserved against in any of the Income Statements in
accordance with GAAP which is not fully reflected or reserved against in such
Income Statements except for liabilities which have arisen after the Income
Statement Date in the ordinary course of business consistent with past practice,
liabilities disclosed in the disclosure schedules delivered pursuant hereto,
Excluded Liabilities and Taxes payable to Morris Communications pursuant to
Sellers’ Tax sharing agreement with Morris Communications as set forth in
Section 1.2(l).

3.7           Licenses and Authorizations.  All Permits required to own the
Acquired Assets and to conduct the business of the Publications are held by
Sellers and are in full force and effect with no violations of any of them
having occurred except for any such violations which would not, individually or
in the aggregate, have or be reasonably expected to have a Material Adverse
Effect.  All such material Permits known by Sellers without further inquiry are
listed in Schedule 3.7.  Prior to the Closing, Sellers shall update Schedule 3.7
to include all material Permits.  Except as disclosed in Schedule 3.7, no
proceeding is pending or, to the knowledge of Sellers, threatened, seeking the
suspension, revocation, modification, cancellation or limitation of any such
Permit and, to the knowledge of Morris Communications and Sellers, there is no
basis for taking any such action.

3.8           Condition and Adequacy of the Acquired Assets; Title.  Except as
disclosed in Schedule 3.8, the material tangible assets included in the Acquired
Assets, taken as a whole, are in adequate operating condition and repair,
ordinary wear and tear excepted, and are adequate and suitable in accordance
with general industry practices and applicable law for the purposes for which
they are currently used.  Each of Sellers has good, valid and marketable title
to all of the Acquired Assets which such Seller purports to own free and clear
of all security interests, mortgages, conditional sales agreements, charges,
liens and other encumbrances (collectively, the “Liens”), except for Permitted
Encumbrances (as defined in Section 3.10(c) below).  All inventory of Sellers
included in the Acquired Assets is useful in the ordinary course of business

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and operation of the Publications and none of which is slow-moving, obsolete,
damaged or defective.  Without limiting the generality of any of the foregoing,
except as indicated on Schedule 3.8, Sellers do not use furniture, fixtures,
equipment, inventory or supplies in connection with the operation of the
Publications which they do not own.  Except for the Excluded Assets or as
indicated on Schedule 3.8, the Acquired Assets are, in the aggregate, all of the
assets which are necessary to operate the Publications in the manner in which
the Publications were operated during the 12-month period ending on the Income
Statement Date and since such time, except for additions thereto and deletions
therefrom in the ordinary course of business and consistent with past
practice.  No asset primarily used in the Publications or the Acquired Assets is
located in Morris Communications corporate headquarters or at any location not
included in the Acquired Assets.

3.9           Contracts and Arrangements.Schedule 3.9 lists the following
written, oral, implied or other agreements, contracts, understandings,
arrangements, instruments, notes, guaranties, indemnities, representations,
warranties, deeds, assignments, powers of attorney, certificates, purchase
orders, work orders, insurance policies, benefit plans, commitments, covenants,
assurances and undertakings of any nature relating primarily to the Publications
or the Acquired Assets (collectively, the “Material Contracts”), to which any of
Sellers is a party:

(a)           Sales agency or advertising representation contracts involving
annual consideration of more than $100,000;
(b)           Contracts for the future construction or purchase of capital
improvements, purchase of materials, supplies or equipment, or for the sale of
assets involving annual consideration of more than $100,000;
(c)           Consulting contracts, employment agreements or freelance
agreements involving annual consideration of more than $100,000;
(d)           Licenses or agreements involving annual consideration of more than
$100,000 under which Sellers are authorized to publish materials supplied by
others in future issues of the Publications;
(e)           Leases or subleases of Real Property (collectively, the “Real
Property Leases”);
(f)           Leases of any personal property involving annual consideration of
more than $100,000;

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(g)           All contracts which are licenses and sublicenses (in which any of
Sellers is licensor or licensee) involving annual consideration of more than
$100,000;
(h)           Any contract for the purchase or sale of products, or other
personal property, or for the furnishing or receipt of services, involving
annual consideration of more than $100,000;
(i)           Any contract concerning a partnership or joint venture;
(j)           Any contract under which Sellers have created, incurred, assumed,
or guaranteed any indebtedness for borrowed money or pursuant to which Sellers
have advanced or loaned money;
(k)           Any contract with any Affiliates of Sellers, or any entity in
which any Affiliates of Sellers holds an equity or any other economic interest;
(l)           Any contract concerning non-disclosure, confidentiality or
noncompetition;
(m)           Any contract under which the consequences of a default or
termination could have an effect on the business, financial condition,
operations, results of operations, or future prospects of any of Sellers in an
amount in excess of $100,000; or
(n)           Any other contract (or group of related contracts) the performance
of which involves consideration in excess of $100,000, or cannot be terminated
without penalty, payment or breach on ninety (90) days or less notice.

Schedule 3.9 also specifies those Material Contracts, the assignment of which
requires the consent of a third party.  Provided that any requisite consent to
the assignment of Material Contracts to Buyer is obtained, each of the contracts
and leases which is assigned to and assumed by Buyer on the Closing Date is
valid and in full force and effect.  There is no existing default, event of
default or other event under such Material Contracts which, with or without
notice or lapse of time or both, would constitute a default or an event of
default by Sellers under any such contract.  To the knowledge of Seller, there
is not, under any of the Material Contracts, any existing default or event of
default which, with or without notice or lapse of time or both would constitute
a default or event of default on the part of any other party thereto.  Prior to
the Closing Date, Sellers will make available to Buyer true, correct and
complete copies (or written summaries of oral contracts) of all of the Material
Contracts.

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3.10           Real Property.

(a)           All of the real property owned by Sellers and used primarily in
the business and operation of the Publications is identified on Schedule
3.10(a), together with all buildings, structures, residences, fixtures,
landscaping, utility lines, roads, driveways, fences, parking areas, contiguous
and adjacent entry rights, construction in progress, and all other improvements
to such real property that are owned by Sellers or any Affiliate, located in and
upon such real property, and used primarily in the business and operation of the
Publications, together with all rights, privileges, and easements appurtenant to
the foregoing (all of the foregoing collectively referred to as the “Owned Real
Property”);
(b)           Schedule 3.10(b) sets forth a complete and accurate list of all
leasehold interests of Sellers used primarily in the business and operation of
the Publications (the “Leased Real Property”).  The Leased Real Property and the
Owned Real Property are collectively referred to as the “Real Property”.
(c)           Good and marketable fee title to each parcel of Owned Real
Property disclosed on Schedule 3.10(a) is owned by Sellers set forth on such
schedule, free and clear of any Liens, easements, rights-of-way, licenses, use
restrictions, claims, charges, options, rights of first offer, rights of first
refusal or title defects, of any nature whatsoever, except for Permitted
Encumbrances (as defined below).  As used in this Agreement, the term “Permitted
Encumbrances” means (i) Liens for Taxes not yet due and payable; (ii) Liens for
Taxes which are being contested in good faith and by appropriate proceedings in
the amount of which a reserve has been created and set forth on the Closing Date
Balance Sheet; (iii) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business
consistent with past practice or which are being contested in good faith and by
appropriate proceedings in the amount of which a reserve has been created on the
Closing Date Balance Sheet (which reserve under clauses (ii) or (iii) shall, to
the extent Sellers are successful in finally, definitively and irrevocably
contesting any such Liens and Buyer effectively gets the benefit thereof, will
upon written notice and delivery of satisfactory proof thereof, be refunded to
Sellers); (iv) easements, rights-of-way, encroachments, licenses, restrictions,
conditions and other similar encumbrances which do not materially interfere with
the current use of any of the Owned Real Property;

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(d)           Each Seller has a valid and enforceable interest in each parcel of
Leased Real Property disclosed in Schedule 3.10(b) as being leased by such
Seller; and
(e)           There is no action or proceeding pending or, to the knowledge of
Sellers, threatened by any Governmental Authority for assessment or collection
of past-due Taxes, impact fees or special assessments affecting any part of any
Owned Real Property, and no condemnation or eminent domain proceeding is pending
or, to the knowledge of Sellers, threatened against any part of any Real
Property.
(f)           Except as set forth in Schedule 3.10(f), none of the Real Property
is located within a flood plain or lakeshore erosion hazard area, fresh water
wetlands as defined under applicable laws or coastal zone management area
protected, regulated or controlled by any laws.
(g)           Except as set forth in Schedule 3.10(g) (which schedule is as of
the date hereof prepared to Sellers’ knowledge without further inquiry and which
schedule will, prior to Closing, be updated to Sellers’ knowledge after due
inquiry),  (i) the Facilities are in an adequate state of repair and condition,
ordinary wear and tear excepted; (ii) there are no conditions or defects which
pose a significant danger to life or human health existing upon or in the
Facilities; (iii) there are no structural defects in the Real Property that
would adversely affect the operation of any of the Facilities as presently
conducted; and (iv) there are no life safety code deficiencies or other survey
requirements which are not subject to waiver or currently the subject of a plan
of correction which is being implemented.
(h)           Except as set forth in Schedule 3.10(h) (which schedule is as of
the date hereof prepared to Sellers’ knowledge without further inquiry and which
schedule will, prior to Closing, be updated to Sellers’ knowledge after due
inquiry), all buildings, structures, fixtures, building systems and equipment,
and all components thereof, including the roof, foundation, load-bearing walls
and other structural elements thereof, heating, ventilation, air conditioning,
mechanical, electrical, plumbing and other building systems, environmental
control, remediation and abatement systems, sewer, storm and waste water
systems, irrigation and other water distribution systems, parking facilities,
fire protection, security and surveillance systems, and telecommunications,
computer, wiring and cable installations, included in any Real Property
(collectively, the “Improvements”) are in adequate condition and repair, have
been appropriately and routinely maintained, and are sufficient for the business
and operation of the Publications. Except as set forth in Schedule 3.10(h), to
Sellers’ and Morris Communications’ knowledge,

-24-

there are no structural deficiencies or latent defects affecting any of the
Improvements and there are no facts or conditions affecting any of the
Improvements which would, individually or in the aggregate, interfere in any
respect with the use or occupancy of the Improvements or any portion thereof in
the operation of the Publications as currently conducted thereon.
(i)           The current use and occupancy of the Real Property and the
business and operation of the Publications as currently conducted thereon do not
violate any easement, covenant, condition, restriction or similar provision in
any instrument of record or other unrecorded agreement affecting such Real
Property except for any such violations, which would not, individually or in the
aggregate, have or be reasonably expected to have a material adverse effect on
such Real Property or Buyer’s intended use of such Real Property or the
continued business and operation of the Publications as currently conducted
therein. Sellers have not received any notice of violation of any such
documents, and to their knowledge there is no basis for the issuance of any such
notice or the taking of any action for such violation.
(j)           None of the Improvements encroach on any land which is not
included in the Real Property or on any easement affecting such Leased Real
Property, or violate any building lines or set-back lines, and there are no
encroachments onto any of the Real Property, or any portion thereof, which
encroachment would interfere with the use or occupancy of such Real Property or
the continued business and operation of the Publications as currently conducted
thereon except for any such violations, which would not individually or in the
aggregate, have or be reasonably expected to have a material adverse effect on
such Real Property or Buyer’s intended use of such Real Property or the
continued business and operation of the Publications as currently conducted
therein.
(k)            There are no taxes, assessments, fees, charges or similar costs
or expenses imposed by any Governmental Authority, association or other entity
having jurisdiction over the Real Property with respect to any Real Property or
portion thereof which are delinquent.
(l)           Prior to the Closing, all Liens under all of Sellers’ existing
secured financing arrangements will be released (the “Bank
Liens”).  Notwithstanding anything to the contrary contained herein, the
existence of Bank Liens shall not be considered a breach of any representation
or warranty hereunder, provided such Bank Liens are released at Closing.

-25-

3.11           Intellectual Property.  Except for the Excluded Assets (as
defined in Section 1.2) and any matter relating thereto, all Rights are valid,
in good standing and uncontested.  The Rights include, but are not limited to,
those Rights of Sellers relating to the business and operation of the
Publications or related to the ownership of any of the Acquired Assets as set
forth in Schedule 3.11.  Sellers possess adequate rights, licenses or other
authority necessary to use and own the Acquired Assets, to use and own the
Rights and to conduct the business and operations of the Publications as
currently conducted.  Sellers have not received any notice with respect to any
alleged infringement or unlawful or improper use of any Rights owned or alleged
to be owned by others.  Neither any Affiliate of Sellers nor any officer or
employee of Sellers has any interest in any Rights, all of which are free and
clear of any Lien.  Sellers have no knowledge of any infringement of any of the
Rights.

3.12           Litigation and Compliance with Laws.  Except as set forth on
Schedule 3.12:  (a) the Publications have not been operating under or subject
to, or in default with respect to, any order, writ, injunction, judgment or
decree of any Governmental Authority; (b) neither Sellers nor any of their
agents or Affiliates has received any inquiry, written or oral, from any such
authority concerning any of the operations or business of the Publications
during the two (2) year period prior to the date of this Agreement; (c) there is
no litigation, claim or arbitration pending by or against, or to the knowledge
of Seller or its Affiliates, threatened against, Sellers, the Publications or
Sellers’  agents or Affiliates related to or affecting any of the Acquired
Assets or the operation of the Publications, including without limitation, any
litigation, arbitration or claim relating to any union or union activities; and
(d) Sellers and their Affiliates have complied with all laws, regulations,
orders or decrees applicable to Sellers, the Acquired Assets and the
Publications and the present uses by Seller of the Acquired Assets and the
business and operation of the Publications do not violate any such laws,
regulations, orders or decrees except for any such violations, which would not
individually or in the aggregate, have or be reasonably expected to have a
Material Adverse Effect.

3.13           Labor Relations and Employment Issues; Employee Benefit Programs;
ERISA.
(a)  Schedule 3.13(a) lists as of the date shown thereon, which date shall be no
earlier than ten (10) days prior to the date hereof, the names and salaries,
compensation, wages or rates of

-26-

commission, date of employment (with Sellers or, if applicable, the prior owner
of any of the Publications) and job title of all the full and part-time
employees of Sellers primarily serving the Publications and/or the Acquired
Assets (the “Publication Employees”); provided, however, that the Schedule
3.13(a) delivered concurrently with this Agreement does not include (i)
independent contractors or other non-employees, or (ii) local incentive
arrangements for local department heads.  Schedule 3.13(a) will be updated by
Sellers prior to the Closing to reflect a date no earlier than ten (10) days
prior to the Closing and to include the omitted information described in clause
(ii) of the provisio of the preceding sentence.  The term “Publication
Employees” does not include any of Sellers’ employees based in Sellers’ home
offices in Augusta, Georgia but for purposes of this Section 3.13 does include
employees, independent contractors or other persons providing services for or on
behalf of the Publications.
(b)           Except as set forth in Schedule 3.13(b), (i) Sellers have not
entered into any collective bargaining agreement or other contract with any
employee, union, labor organization or other employee representative or group of
employees and, to the knowledge of Sellers and Morris Communications, no such
organization or person has made or is making any attempt to organize or
represent any employees of Sellers, in each case related to the Publications
and/or the Acquired Assets; (ii) there is no pending grievance or arbitration
and no unsatisfied or unremedied grievance or arbitration award against Sellers
or any agent, representative or employee of Sellers, in each case related to the
Publications and/or the Acquired Assets and, to the knowledge of Sellers, there
is no basis for any such grievance or arbitration; (iii) there is no unfair
labor practice charge, pending trial of unfair labor practice charges,
unremedied unfair labor practice finding or adverse decision of the National
Labor Relations Board or any Governmental Authority, against Sellers or any
agent, representative or employee of any of Sellers, in each case related to the
Publications and/or the Acquired Assets and, to the knowledge of Sellers, there
is no basis for any such unfair labor practice charge; and (iv) there is no
labor dispute, strike or work stoppage pending or, to the knowledge of Sellers,
threatened, in writing, with respect to Sellers or their employees, in each case
related to the Publications and/or the Acquired Assets.
(c)           Without limiting the generality of Section 3.12, Sellers are in
full compliance with all applicable laws, rules, regulations, standards and
contracts relating to employment, in each case related to the Publications
and/or the Acquired Assets, including those relating to wages, hours,

-27-

working conditions, hiring, promotion, occupational health and safety (including
those dealing with employee handling or use of or exposure to hazardous or toxic
substances and the training of employees with respect to such substances),
except for any instances of non-compliance which would not, individually or in
the aggregate, have or be reasonably expected to have a Material Adverse Effect
and the payment and withholding of Taxes and other similar obligations, and
neither Sellers nor any of their Affiliates have received any notice of any
actual or alleged violation of any such law, rule, regulation, standard or
contract.  Sellers are in full compliance with all applicable affirmative action
and equal employment opportunity obligations arising under any state or Federal
law, regulation, executive order or ordinance or any contract or subcontract
with any Governmental Authority or other entity or person except for any
instances of non-compliance which would not individually or in the aggregate,
have or be reasonably expected to have a Material Adverse Effect.  Sellers have
withheld from the wages and salaries of its Publication Employees as is required
by law and are not liable for any arrears of wages or any tax or penalty in
connection therewith.
(d)           Without limiting the generality of Section 3.13, except as set
forth in Schedule 3.13, and except as would not, individually or in the
aggregate have or reasonably be expected to have a Material Adverse Effect,
there is no employment-related claim, cause of action, grievance, judgment or
other adverse charge, allegation or decision of any kind, in each case related
to the Publications and/or the Acquired Assets (including any in the nature of
employment discrimination of any type, breach of contract, wrongful discharge,
retaliation, health, safety or right-to-know violations, child labor violations
or non-payment of wages, benefits or wage supplements), under any law, rule,
regulation, standard, collective bargaining agreement or other contract, pending
or threatened against Sellers or any of their officers, employees or agents,
and, to the knowledge of Sellers, there is no basis for any such claim, cause of
action, grievance, judgment or other adverse charge or decision.
(e)           No current or former employee of Sellers has made or, to the
knowledge of Morris Communications or Sellers, threatened any claim against
Sellers or any of their officers, employees or agents under any law, rule,
regulation, standard or contract on account of or for overtime pay (other than
overtime pay for the current payroll period), wages or salary for any period
other than the current payroll period, vacation, holiday or other time off or
pay in lieu thereof (other than time off or pay in lieu thereof earned in
respect of the current year), or any

-28-

violation of any law, rule, regulation, standard or contract relating to the
payment of wages, fringe benefits, wage supplements or hours of work in each
case as it relates to the Publications and/or the Acquired Assets.
(f)           Neither Sellers nor Buyer are, nor immediately after the Closing
will be, liable for severance pay or any other payment of monies to any
Publication Employees as a result of the execution of this Agreement or the
parties’ performance of its terms, or for any other reason in any way related to
the consummation of the transactions contemplated hereby, including any change
of ownership of the Publications.
(g)     
    (i)           Sellers have delivered (or will deliver supplementally prior
to Closing) to Buyer true, complete and accurate summaries of each employment,
bonus, incentive, deferred compensation, pension, stock purchase, stock option,
stock appreciation right, profit-sharing or retirement plan, arrangement or
practice, each material medical, vacation, retiree medical, group insurance and
severance pay plan, and each other material agreement or fringe benefit plan,
arrangement or practice, of Morris Communication or Sellers, whether legally
binding or not, including all “employee benefit plans,” as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), which currently cover one or more Publication Employees (“Employee
Benefit Programs”).  Morris Communications and Sellers and their respective
ERISA Affiliates (as defined below) have complied, in all material respects,
with the terms of all Employee Benefit Programs and all laws with respect to
such programs, including the Code (as defined in Section 3.19) and ERISA, and no
default exists with respect to the obligations of Morris Communications or
Sellers or any of their respective ERISA Affiliates under any such Employee
Benefit Programs as it relates to the Publication Employees.  The Buyer shall
not incur, and could not reasonably be expected to incur (by operation of law or
otherwise), any liability under any Employee Benefit Program and/or other
employee benefit or compensation plans, programs or arrangements associated with
the Publications, Morris Communications, Sellers or their respective ERISA
Affiliates, as part of the transactions contemplated by this Agreement or
otherwise,  except to the extent of liabilities for paid time off that are
included as Assumed Liabilities pursuant to Section 1.3(a)(iv).
    (ii)           Except as set forth on Schedule 3.13(g), neither Morris
Communications, Sellers nor any of their respective ERISA Affiliates has made a
complete or partial withdrawal, within the meaning of Section 4201 of ERISA,
from any multiemployer plan which covered one or more

-29-

employees of Sellers, in each case related to the Publications and/or the
Acquired Assets which has resulted in, or could result in, any withdrawal
liability.  Except as set forth on Schedule 3.13(g) none of Sellers nor, to
Sellers’ knowledge, any predecessor owner of any of the Publications have, nor
have Sellers’ or Morris Communications’ or any of their respective ERISA
Affiliates, ever maintained or contributed to a multiemployer plan.
    (iii)           Neither Morris Communications, Sellers nor any of their
respective ERISA Affiliates has provided or is required to provide, security to
any pension plan or to any single-employer plan which covered one or more
employees of the Publications at any time during 2006-2007 pursuant to Section
401(a)(29) of the Code.
    (iv)           Sellers, Morris Communications and their respective ERISA
Affiliates have complied in all material respects with the health care
continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, Section 4980B of the Code, Title I Part
6 of ERISA, in each case related to the Publication Employees and any similar
state group health plan continuation law, together with all regulations and
proposed regulations promulgated thereunder with respect to any events occurring
prior to and including the Closing Date.
    (v)           “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.  “ERISA Affiliate” means, with
respect to any entity, trade or business, any other entity, trade or business
that is a member of a group described in Section 414(b), (c), (m) or (o) of the
Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same “controlled group” as the first
entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

3.14           [INTENTIONALLY OMITTED]

3.15           Changes.  Except as shown on Schedule 3.15 to this Agreement,
since the Income Statement Date, Sellers have not, with respect to the business
and operation of the Publications: (a) mortgaged, pledged or subjected to a
Lien, any of the Acquired Assets; (b) sold, leased, removed or transferred any
material asset used or useful in the business or operation of the Publications;
or (c) increased the compensation payable or to become payable to any
Publication Employee or agent, except increases in accordance with historical
practices.

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3.16           Environmental Matters.

(a)           Except as set forth on Schedule 3.16, Sellers have, with respect
to the ownership and operation of the Publications and Real Property, obtained
all Permits (as defined below) required under all Environmental Laws and are in
compliance with all Environmental Laws and with all such Permits and there have
been no violations of the Environmental Laws or Permits having or reasonably
expected to have a Material Adverse Effect.  For purposes of this Agreement,
“Environmental Law” means all Legal Requirements and Permits concerning land
use, public health, safety, welfare, or the environment, including without
limitation the Resource Conservation and Recovery Act, (42 U.S.C. §§ 6901 et
seq.), as amended, and the Comprehensive Environmental Response, Compensation,
and Response Act (42 U.S.C. §§ 9601 et seq.), as amended (“CERCLA”).  For
purposes of this Agreement, “Legal Requirements” means any statute, ordinance,
code or other law (including the common law), rule, regulation, order, notice,
standard, procedure, guideline, or requirement enacted, adopted, applied or
issued by any Governmental Authority, including, without limitation judicial
decisions applying or interpreting  any such Legal Requirement.  For purposes of
this Agreement, “Permit” shall mean any permit, license, consent, authorization,
approval, franchise privilege, waiver, exception, variance, exclusionary or
inclusionary orders and other concessions.  All such Permits are current and in
full force and effect;
(b)     Except as set forth on Schedule 3.16, with respect to the business,
ownership and/or operation of the Publications and Real Estate, Sellers have not
received and, to the knowledge of Sellers, no other person has received, any
notice from any Governmental Authority to the effect that Sellers have
performed, failed to perform, or suffered any act, or that a condition exists,
which might reasonably give rise to liability to Sellers under CERCLA, nor have
Sellers, or, to the knowledge of Sellers, any other person, submitted any notice
pursuant to section 103 of CERCLA to, or responded to any request for
information pursuant to section 104 of CERCLA from, any Governmental Authority;
(c)     Except as set forth on Schedule 3.16, Sellers have not caused or
contributed to the release or threat of release of any Hazardous Substance, and
to the knowledge of Sellers there exists no Hazardous Substance released,
threatened to be released, disposed, discharged, dumped or spilled on, at,
beneath, from or to the Real Property (including without limitation any surface
waters or groundwaters thereon).  For purposes of this Agreement, “Hazardous
Substance” means any element, material,

-31-

chemical, compound, mixture or solution defined, designated, listed, classified
or regulated under any Environmental Law;
(d)     Except as set forth on Schedule 3.16, to the knowledge of Sellers, no
Hazardous Substance used, generated or handled by the Publications on the Real
Property or elsewhere has been released, disposed, discharged, dumped or spilled
on, or migrated to or from, any other real property;
 (e)     Sellers have provided to Buyer true and complete copies of all
non-proprietary audits, data, reports, investigations or other materials
conducted in respect of or concerning the environmental condition of the Real
Property or the Publications that are in  their possession, custody or control;
and
(f)     Except as set forth on Schedule 3.16, to the knowledge of Sellers, no
underground storage tanks or asbestos containing materials are or have been
located in, on or under any portion of the Real Property or structures thereon.

3.17           [INTENTIONALLY OMITTED]

3.18           Insurance. Schedule 3.18 sets forth a true, correct and complete
list of all claims made by Sellers or Morris Communications under insurance
policies of any kind or nature maintained as of the date of this Agreement by or
on behalf of Sellers or Morris Communications and relating to the Publications
and/or the Acquired Assets which are still outstanding, setting forth as to each
claim the date, nature and amount thereof and its current status, excluding
claims for employee health benefits or other amounts under Employee Benefit
Programs, which amounts and claims are Excluded Liabilities.

3.19           Taxes.

(a) “Code” means the Internal Revenue Code of 1986, as amended.
(b)           “Tax” or “Taxes” means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
§ 59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, whether computed on a
separate or consolidated, unitary or combined basis or in any other manner,
including any interest, penalty, or addition

-32-

thereto, whether disputed or not and including any obligation to indemnify or
otherwise assume or succeed to the tax liability of any other person or entity.
(c)           “Tax Return” means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
(d)           Except as set forth in Schedule 3.19, with respect to the
Publications and/or the Acquired Assets Sellers have timely filed, after giving
effect to any applicable extensions, all Tax Returns required to be filed by
them, and all such Tax Returns were complete and correct at the time of filing
and continue to be complete and correct and were prepared in substantial
compliance with all applicable laws and regulations.  Sellers have timely paid,
after giving effect to any applicable extensions, all taxes required to be paid
by them with respect to the Publications and/or the Acquired Assets whether or
not shown on a Tax Return except amounts being contested in good faith by
appropriate proceedings.  Sellers are currently not the beneficiary of any
extension of time within which to file any Tax Return.
(e)           No representative of any taxing authority is asserting in writing
or orally any material Tax deficiency with respect to the Publications and/or
the Acquired Assets that has not been adequately reserved for, and no liens in
respect of Taxes exist (other than liens for Taxes not yet due or for Taxes
being contested in good faith), with respect to the Acquired Assets or the
Publications.  All required Tax estimates, deposits, prepayments and similar
reports or payments with respect to the Publications and/or the Acquired Assets
for current periods have been properly made with respect to the Publications
and/or the Acquired Assets.  There are no actions, suits, proceedings,
investigations or claims pending or, to the knowledge of Sellers, threatened
against Sellers in respect of Taxes, nor are any material matters under
discussion with any Governmental Authority relating to Taxes, to the knowledge
of Sellers, no claim has ever been made by any Governmental Authority in a
jurisdiction where Sellers do not file a Tax Return that any Seller is or may be
subject to taxation in that jurisdiction.  No Tax Returns of Sellers currently
are the subject of audit.  
(f)  All Taxes that are required to be collected or withheld by Sellers with
respect to the Publications and/or the Acquired Assets have been duly collected
and withheld, and any such amounts that are required to have been remitted to
any taxing authority have been duly remitted.

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(g)            Sellers have not waived any statute of limitations in respect of
Taxes with respect to the Publications and/or the Acquired Assets or agreed to
an extension of time with respect to a Tax assessment or deficiency.
(h)           It is understood that Sellers are not making any representation to
GateHouse Media or Buyer that Sellers’ methodologies for calculating Taxes are
appropriate or correct for Tax Returns to be filed by Buyer to the extent that
such Tax Returns relate to any periods after the Closing.

3.20           Investment Representations.

(a)           Sellers and Morris Communications are acquiring the Note for
investment for their own account and not with a view to, or for resale in
connection with, the distribution thereof in contravention of securities laws.
(b)           Sellers’ and Morris Communications’ knowledge and experience in
financial and business matters are such that Sellers and Morris Communications
are capable of evaluating the merits and risks of their acquisition of the
Note.  Sellers acknowledge that GateHouse Media has made available to Sellers
and Morris Communications, their legal and tax counsel, and their advisors,
prior to the date hereof, the opportunity to ask questions of, and to receive
answers from, GateHouse Media and its representatives, about GateHouse Media and
access to any information, documents, financial statements, records and books
(i) relative to GateHouse Media and its business and an investment in the Note,
and (ii) necessary to verify the accuracy of any information furnished to
Sellers and Morris Communications, including, but not limited to, the
information set forth in the GateHouse Media’s reports filed under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(c)           Sellers and Morris Communication are “accredited investors” as
defined in Rule 501 promulgated under the Securities Act of 1933, as amended
(the “Securities Act”).
(d)           Sellers and Morris Communications acknowledge that GateHouse Media
and its advisors will rely on the representations and warranties of Sellers and
Morris Communications contained in this Section 3.20.  for purposes of
determining whether the issuance of the Note, if any, is exempt from
registration under the Securities Act and other applicable securities laws.
(e)           Sellers and Morris Communications have carefully reviewed the
section of GateHouse

-34-

Media’s Annual Report on Form 10-K for the year ended December 31, 2006 entitled
“Risk Factors”.

3.21           Brokers.  Neither Sellers nor Morris Communications have incurred
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which the Buyer or GateHouse Media could become liable or obligated.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer and GateHouse Media represent and warrant to Sellers that the statements
contained in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date, except as may
be set forth in a disclosure schedule delivered to Sellers pursuant hereto.

4.1           Organization.  Buyer is a corporation validly existing and in good
standing under the laws of the State of Delaware.  GateHouse Media is a
corporation validly existing and in good standing under the laws of the State of
Delaware.

4.2           Authority Relative to this Agreement.  Buyer and GateHouse Media
have the full power, authority and legal right to execute and deliver this
Agreement and to consummate the transactions and perform its obligations as
contemplated hereby without a vote of the shareholders of GateHouse Media.  The
execution and delivery of this Agreement by Buyer and GateHouse Media and the
consummation of the transactions contemplated hereby by Buyer and GateHouse
Media have been duly and validly authorized by all necessary action, and this
Agreement has been duly and validly executed and delivered by Buyer and
GateHouse Media and assuming due authorization, execution and delivery by
Sellers and Morris Communications, constitutes a legal, valid and binding
obligation of Buyer and GateHouse Media enforceable against Buyer and GateHouse
Media in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar law affecting the rights of creditors
generally.  Upon the execution and delivery by GateHouse Media, the Note will
constitute the legal, valid

-35-

and binding obligation of GateHouse Media, enforceable against GateHouse Media
in accordance with its terms.

4.3           No Defaults.  The execution, delivery and performance of this
Agreement by Buyer and GateHouse Media will not (a) conflict with or result in
any breach of any provision of the certificate of incorporation, by-laws or
other organizational documents of Buyer, or (b) violate any law, statute, rule,
regulation, order, injunction or decree of any Governmental Authority applicable
to Buyer or GateHouse Media.

4.4           Non-Contravention; No Defaults.

(a)            Except as disclosed in Schedule 4.4, the execution, delivery and
performance of this Agreement by Buyer and GateHouse Media will not (i) conflict
with any provision of the governing documents of GateHouse Media or Buyer,
(ii) result in a default (or give rise to any right of termination, cancellation
or acceleration), with notice or passage of time or both, under or conflict with
any of the terms, conditions or provisions of any contract, note, bond, mortgage
or other instrument, obligation or agreement material to the business of
GateHouse Media and its subsidiaries as a whole, except for any such defaults
which would not, individually or in the aggregate, have or be reasonably
expected to have a material adverse effect on GateHouse Media and its
subsidiaries taken as a whole or a material adverse effect on GateHouse Media’s
or Buyer’s ability to consummate the transactions contemplated hereby, or
(iii) violate any law, statute, rule, regulation, order, injunction or decree
Governmental Authority applicable to GateHouse Media or Buyer except for any
such violations which would not individually or in the aggregate, have, or be
reasonably expected to have a material adverse effect on GateHouse Media and its
subsidiaries taken as a whole or a material adverse effect on GateHouse Media’s
Buyer’s ability to consummate the transactions contemplated hereby.
(b)           Except for notices and filings required to be delivered to
GateHouse Media’s banks and except for the requirements of the Hart-Scott-Rodino
Act, neither GateHouse Media nor Buyer is required to submit any notice, report
or other filing with, or obtain any consent, approval or waiver from, any
Governmental Authority or any other third party in connection with the
execution, delivery or performance of this Agreement  or the consummation of the
transactions

-36-

contemplated hereby, except for any such failure which would not individually or
in the aggregate have or be reasonably expected to have a material adverse
effect on GateHouse Media’s or Buyer’s ability to consummate the transactions
contemplated hereby.

4.5           Financial Capability.  Buyer, on the Closing Date will have,
sufficient funds unconditionally available to it (without the need to obtain any
additional bank or other additional third party financing commitment) to pay to
Sellers the Purchase Price and otherwise to satisfy all of its obligations under
this Agreement.

4.6           Reports and Financial Statements.  Since October 26, 2006,
GateHouse Media has filed with the SEC all forms, reports and documents required
to be filed by it under each of the Securities Act and the Exchange Act, and the
respective rules and regulations thereunder, all of which complied in all
material respects with all applicable requirements of the appropriate act and
the rules and regulations thereunder.  The audited consolidated financial
statements of GateHouse Media included in such reports have been prepared in
accordance with GAAP applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present the financial position of
GateHouse Media as at the dates thereof and the results of its operations and
changes in financial position for the periods then ended subject, in the case of
unaudited interim financial statements, to normal year-end and audit adjustments
and any other adjustments as described therein.

4.7           Absence of Certain Changes or Events.  Since June 30, 2007, except
as disclosed in any of GateHouse Media’s Current Reports on Form 8-K or
Quarterly Reports on Form 10-Q filed subsequently to June 30, 2007, there has
not been any material adverse change in the financial condition or in the
results of operations or the businesses, properties, assets, liabilities or
prospects of GateHouse Media and its subsidiaries, taken as a whole.

4.8           Brokers.  There is no broker or finder or other person who would
have any valid claim against any Sellers or Morris Communications for a
commission or brokerage in connection with this Agreement or the transactions
contemplated hereby as a result of any agreement, understanding or action by
Buyer or GateHouse Media.

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ARTICLE V.
PRE-CLOSING COVENANTS OF SELLERS AND BUYER PENDING THE CLOSING DATE

Each of Morris Communications, Sellers, Buyer and GateHouse Media, as
applicable, covenant and agree that from the date hereof to and including the
Closing Date:

5.1           Maintenance of Business.  Sellers shall continue to carry on the
business and operation of, and maintain the books, accounts and records of, the
Publications in substantially the same manner as heretofore in the ordinary
course of business and shall maintain the properties, machinery, equipment and
other Acquired Assets used in the business of the Publications in substantially
the same manner as heretofore in the ordinary course of business consistent with
past practice.

Except as set forth on Schedule 5.1, prior to the Closing Date, Sellers will
not, with respect to the Publications, without the prior written consent of
Buyer, which will not be unreasonably withheld, conditioned or delayed:

(a)           (i) Make any change in circulation practices, or promotional,
marketing or premium practices of the Publications, other than changes in the
ordinary course of business which changes are not material, or (ii) make any
change in policies for the pricing of circulation or advertising of the
Publications except for changes in the ordinary course of business which changes
are not material;
(b)           Sell, lease, remove, transfer or agree to sell, lease, remove or
transfer any of the Acquired Assets without replacement thereof with an asset of
substantially equivalent kind, condition and value and except in the ordinary
course of business consistent with past practice;
(c)           Enter into or amend any contract of employment or collective
bargaining agreement, or permit or commit to any increases or changes in the
compensation (including, but not limited to, bonus, pension, profit-sharing,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other employee
benefit plan, agreement or arrangement) of any Publication Employee or any
independent contractor or

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other person providing services to any of Sellers primarily as it relates to the
Publications and/or the Acquired Assets, except for increases in accordance with
historical practices and except in the ordinary course of business consistent
with past practice;
(d)           Enter into or amend any contract or commitment as it relates to
any of the Publications involving annual consideration of more than $25,000
individually or $250,000 in the aggregate, waive any right or enter into any
other transaction, other than as permitted by other provisions of this
Agreement;
(e)           Sell, assign, transfer, license or permit to lapse any material
Right;
(f)           Make any material change in any of the Real Property or fail to
maintain the Real Property or other Acquired Assets in adequate repair and
condition, ordinary wear and tear excepted; or cancel or fail to renew any of
the current insurance policies or any of the coverage thereunder maintained for
the protection of any of the Real Property or the other Acquired Assets;
(g)           Except for Permitted Encumbrances, encumber any of the Acquired
Assets or permit any of the Acquired Assets to become subject to any Lien;
(h)           Enter into any contracts, agreements or arrangements (written or
oral) with any Affiliate except those that would not create an Assumed
Liability; or
(i)           Take any action that would otherwise require disclosure to be made
on Schedule 3.4.

5.2           Organization; Goodwill.  Sellers shall use its reasonable efforts
to preserve the business organization of the Publications intact and preserve
the goodwill of the Publications’ suppliers, customers and others having
business relations with them.

5.3           Access to Facilities, Files and Records.  At the reasonable
request of Buyer and subject to the need to preserve the confidentiality of this
transaction prior to Closing in order to preserve relationships with employees
and customers, Sellers and Morris Communications shall give or cause to be given
to the officers, employees, accountants, counsel and authorized representatives
of Buyer (a) access after prior notice during normal business hours to all
Facilities, property, accounts, books, minute books, deeds, title papers,
licenses, agreements, contracts, Tax Returns (other than Federal and State
income Tax Returns), records and files of every character, equipment, machinery,
fixtures, furniture, vehicles, notes and accounts payable and receivable

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and inventories primarily related to the Publications, and (b) all such other
information concerning the Acquired Assets and affairs of the Publications as
Buyer may reasonably request.  With the consent and supervision of Sellers,
Sellers and Morris Communications shall permit representatives of Buyer to
perform inspections of the Real Property and the structures located thereon and
to perform surveys, environmental assessments, sampling and audits as Buyer may
request with respect to the Acquired Assets.

5.4           Representations and Warranties.  Sellers and Morris Communications
shall give detailed written notice to Buyer and GateHouse Media promptly upon
the occurrence of or becoming aware of the impending or threatened occurrence of
any event which would cause or constitute a breach, or would have caused a
breach had such event occurred or been known to Sellers or Morris Communications
prior to the date hereof, of any of Sellers’ or Morris Communications’
representations or warranties contained in this Agreement or in any schedule
delivered pursuant hereto.  Buyer and GateHouse Media shall give detailed
written notice to Sellers promptly upon becoming aware of any inaccuracy in any
of the representations or warranties in Article III or any other breach of this
Agreement, which notice shall not waive or otherwise limit any of  GateHouse
Media’s or Buyer’s rights or remedies hereunder.  From time to time on or prior
to the Closing, Sellers and Morris Communications shall supplement or amend any
schedules delivered in connection herewith with respect to any matter arising
after the date hereof, which, if arising prior to the date of this Agreement,
would have been required to be set forth or described in such schedule or which
is necessary to correct any information in such schedule which has been rendered
inaccurate as a result of a matter arising after the date hereof and such
amendment shall not be deemed to create a breach of any representation or
warranty.

5.5           Corporate Action.  Subject to the provisions of this Agreement,
Sellers and Morris Communications will take all necessary action required of
them to carry out the transactions contemplated by this Agreement.

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5.6           Consents.

 (a)           Sellers will use commercially reasonable efforts to obtain or
cause to be obtained prior to the Closing Date consents to the assignment to or
assumption by Buyer of all of the Material Contracts which require the consent
of any third party by reason of the transactions provided for in this Agreement
as shown on Schedule 3.9 and Schedule 3.10(b); provided, however, that Sellers
shall not be required to make any payments or to incur any obligations to third
parties in connection with the obtaining of any such consent.
(b)           Nothing in this Agreement shall be deemed to be a condition to
Closing or to constitute or require the transfer or assignment or the attempt to
transfer or assign any of the Acquired Assets if the attempted transfer or
assignment thereof, without the consent of a third party, would adversely affect
in any way the rights of any of Sellers or Morris Communications, on the one
hand, or Buyer or GateHouse Media, on the other hand or, in Buyer’s opinion,
would adversely affect any of the Publications or the Acquired Assets.  If any
such consent shall not have been obtained at or prior to the Closing, or the
attempted transfer or assignment of any of the Acquired Assets at the Closing
would have an adverse effect on Sellers or Morris Communications, on the one
hand, or Buyer, GateHouse Media, the Publications or the Acquired Assets on the
other hand, or on Buyer’s rights thereto or Buyer would not in fact receive the
rights thereto, (i) Sellers will cooperate with Buyer in any reasonable
arrangement designed to provide for Buyer the rights thereto and benefits
thereunder, including, without limitation, (A) enforcing for the benefit of
Buyer any or all rights of Sellers under any contract, commitment or other
agreement against any other party thereto, or (B) at Buyer’s election, not
transferring, conveying, assigning or delivering to Buyer at the Closing, and
retaining legal title to such Acquired Asset, while permitting Buyer the
possession and use of such Acquired Asset for Buyer’s account and with Buyer
receiving the benefits and bearing the burdens of such Acquired Asset as if such
Acquired Asset had been so transferred, conveyed, assigned and delivered, and
(ii) Sellers will take all reasonable appropriate further action to obtain such
consents, approvals or novations as may be required under applicable laws or
otherwise to effect the transfer or assignment of such Acquired Asset to
Buyer.  Pending the obtaining of such consents, approvals or novations, Buyer
will continue performance of any remaining unfulfilled obligations of Sellers
under any contract,

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commitment or other agreement constituting such an Acquired Asset in the same
manner as though Buyer rather than Sellers was a party to such contract,
commitment or agreement, with Buyer receiving the benefits and bearing the
burdens thereof.  Sellers agree to remit to Buyer all collections received in
respect of any such Acquired Asset promptly on receipt thereof less any amount
due Sellers from Buyer with respect to such Acquired Assets.  Expenses incurred
in connection with actions taken pursuant to this Section 5.6(b) shall be borne
in such a manner as to place Sellers and Buyer in the economic positions in
which they would have been had such Acquired Asset been transferred, conveyed,
assigned or delivered at Closing.

5.7           Confidential Information.  If for any reason the transactions
contemplated in this Agreement are not consummated, none of Sellers nor Morris
Communications shall disclose to third parties any information designated as
confidential and received from Buyer, GateHouse Media or their respective agents
in the course of investigating, negotiating and completing the transactions
contemplated by this Agreement.  Nothing shall be deemed to be confidential
information with respect to the preceding sentence which:  (a) is known to
Sellers or Morris Communications at the time of its disclosure to it; (b)
becomes publicly known or available other than through disclosure by Sellers or
Morris Communications; (c) is rightfully received by Sellers from a third party
not known by Sellers or Morris Communications to be subject to an obligation of
confidentiality; or (d) is independently developed by Sellers or Morris
Communications.  If for any reason the transactions contemplated in this
Agreement are not consummated, the parties acknowledge and agree that the terms
of the Confidentiality Agreement dated July 19, 2007 shall continue to apply to
all confidential information.

5.8           Consummation of Agreement.  Subject to the provisions of Section
10.2 of this Agreement, Sellers and Morris Communications shall use reasonable
efforts to fulfill and
perform all conditions and obligations on their part to be fulfilled and
performed under this Agreement and to cause the transactions contemplated by
this Agreement to be fully carried out.

5.9           Notice of Proceedings.  Sellers and Morris Communications will
promptly notify Buyer in writing upon becoming aware of any order or decree or
any complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement or the transactions

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contemplated hereunder, or upon receiving any notice from any Governmental
Authority of its intention to institute an investigation into, or institute any
action or proceeding to restrain or enjoin consummation of this Agreement or
such transactions, or to nullify or render ineffective this Agreement or such
transactions if consummated.

5.10           Interim Financial Statements.  Sellers and Morris Communications
shall deliver to Buyer and GateHouse Media unaudited interim balance sheets and
statements of income, changes in stockholders’ equity and cash flows for the
Publications promptly but not later than twenty (20) days after the close of
each of the Publications’ periodic accounting periods (and in no event less
frequently than on a monthly basis), if any, that occurs between the Income
Statement Date and the Closing Date.  Such interim periodic financial statements
shall include financial information both for the current accounting period and
for the fiscal year to date, as well as comparisons with the respective
corresponding periods in the prior fiscal year.

5.11           Taxes.  Sellers shall pay all Taxes relating to the Publications
or the Acquired Assets as they become due.

5.12           Audited Financial Statements; Interim Financial Statements.  If
and when requested by Buyer, Sellers and Morris Communications will, within 60
days of Closing provided such request is made by November 1, 2007, cause to be
delivered to Buyer an audit of the Publications’ financial statements for up to
the three years ending December 31, 2006 and interim financial statements of
Publications as required by financial reporting standards affecting Buyer or
GateHouse Media.  Buyer shall pay Sellers’ reasonably incurred and necessary
incremental third party costs and expenses for such audit.  It is understood
that Sellers shall not be responsible for any delays to the extent caused by the
outside auditors provided Sellers and Morris Communications use commercially
reasonable efforts to promptly and fully cooperate with such auditors and timely
comply with their requests.

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5.13           Title Matters.

(a)           Within five (5) days after the date of this Agreement, Sellers and
Morris Communications will provide Buyer with copies of all title information in
the possession of Sellers or Morris Communications, any of their respective
Affiliates, or their respective agents relating to the Owned Real Property,
including abstracts of title, surveys and policies of title insurance.
(b)           Within thirty (30) days after the date of this Agreement,  Buyer
will obtain title commitments for a 2006 ALTA Owner’s Title Insurance Policy or
Policies with respect to the Owned Real Property (each a “Title Commitment”),
issued by a title company reasonable acceptable to Buyer and its lenders (the
“Title Company”), in form and substance reasonably satisfactory to Buyer and its
lenders.  Each Title Commitment will be accompanied by readable copies of all
documents cited as exceptions to title therein (the “Underlying Documents”),
which will be certified by the Title Company as true, correct and complete
copies of the Underlying Documents.  Buyer, at its option, may obtain survey
maps of the Owned Real Property (each a “Survey”) acceptable to the title
insurance company providing the Title Commitments, prepared and certified in
accordance with generally accepted professional standards by a duly licensed
land surveyor, dated after the date of this Agreement.  Buyer shall provide
Sellers with legible copies of the Title Commitments, exception documents and
other instruments referenced therein and survey maps, if any, promptly following
Buyer’s receipt thereof.  Buyer will bear all costs of any surveys and the costs
of such Title Commitments and any title policies issued pursuant to the Title
Commitments.
(c)           Buyer will have twenty (20) days after its receipt of a Title
Commitment and the related Survey to review each of them and to notify Sellers
in writing of any exceptions other than exceptions to the Title Commitment to
which Buyer reasonably objects, other than Permitted Encumbrances (the “Title
Objections”).  If prior to Closing any Title Objection or other Lien is asserted
against any of the Owned Real Property by, through or under Sellers or any of
their Affiliates that is not a Permitted Encumbrance, Sellers and Morris
Communications will, at their sole expense, either (i) obtain the release of
such Title Objection or Lien, (ii) obtain title insurance covering such Title
Objection or Lien, (iii) provide alternative arrangements, satisfactory to Buyer
in its sole discretion, which provide Buyer the full economic benefit of the
ownership of the affected Owned Real Property without any of the risk associated
with or

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relating to such Title Objections or Lien or (iv) remove such particular parcel
of the Owned Real Property from the Acquired Assets being transferred upon
written notice to Buyer, and with an equitable adjustment to the Purchase Price
in accord with the agreed upon allocation of Purchase Price described in Section
1.7   If Sellers fail to cure or address, prior to Closing, all Title Objections
with respect to any particular parcel of the Owned Real Property as provided
above, then Buyer may either (A) consummate the transactions contemplated
hereby, notwithstanding the Title Objections, with an equitable adjustment to
the Purchase Price described in Section 1.7 or (B) terminate this Agreement.
(d)           Any matters shown on a Title Commitment or Survey to which Buyer
does not object during the twenty (20) day period set forth in Section 5.13(c),
or to which any Title Objection is waived by Buyer, will become Permitted
Encumbrances.

5.14.                      Buyer’s Representations and Warranties.  Buyer and
GateHouse Media shall give detailed written notice to Sellers promptly upon the
occurrence of or becoming aware of the impending or threatened occurrence of any
event which would cause or constitute a breach, or would have caused a breach
had such event occurred or been known to Buyer and GateHouse Media prior to the
date hereof, of any of the representations and warranties of Buyer contained in
this Agreement.

5.15           Corporate Action.  Subject to the provisions of this Agreement,
each of Buyer and GateHouse Media, on one hand, and Sellers and Morris
Communications, on the other hand, will take all necessary corporate and other
action required of them to carry out the transactions contemplated by this
Agreement.

5.16  Consummation of Agreement.  Subject to the provisions of Section 10.2 of
this Agreement, each of Buyer and GateHouse Media shall use its reasonable
efforts to fulfill and perform all conditions and obligations on its part to be
fulfilled and performed under this Agreement and to cause the transactions
contemplated by this Agreement to be fully carried out.
5.17  Notice of Proceedings.  Buyer and GateHouse Media will promptly notify
Sellers in writing upon becoming aware of any order or decree or any complaint
praying for an order or decree restraining or enjoining the consummation of this
Agreement or the transactions

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contemplated hereunder, or upon receiving any notice from any Governmental
Authority of its intention to institute an investigation into, or institute any
action or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consummated.

5.18           No Solicitation; Acquisition Proposals.  Except following a
termination in accordance with Section 10.2, Morris Communications and Sellers
agree that they will not, directly or indirectly, through any officer, director,
employee, partner, stockholder, agent, or Affiliate or otherwise, except in
furtherance of the transactions of the type contemplated by this Agreement (a)
solicit, initiate, or encourage submission of proposals or offers from any
person relating to any transactions of the type contemplated herein or to the
direct or indirect purchase of any of the Acquired Assets, the Publications
(collectively, an “Acquisition Proposal”), (b) participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with or assist, facilitate, or
encourage, any Acquisition Proposal by any person, (c) enter into any agreement,
arrangement, or understanding with respect to any Acquisition Proposal, or (d)
sell, transfer, or otherwise dispose of, or enter into any agreement,
arrangement, or understanding with respect to, any interest in the Acquired
Assets.

5.19           Phase I Environmental Site Assessment.  Buyer may obtain Phase I
Environmental Reports (prepared in accordance with ASTM standards) for the Real
Property certified to Buyer and prepared by independent consultants approved by
Buyer (“Real Property Phase I Reports”), the results of which shall be
satisfactory to Buyer in its sole discretion, subject to the remainder of this
Section 5.19.  Sellers and Morris Communications shall fully cooperate with
Buyer and Buyer’s representatives and exercise commercially reasonable efforts
to cause all third parties to fully cooperate with Buyer and Buyer’s
representatives in obtaining the Real Property Phase I Reports.  Upon Buyer’s
review of the Real Property Phase I Reports, Buyer shall notify Sellers in
writing of any matters set forth therein to which Buyer reasonably object or has
concerns (the “Environmental Objections”).  Sellers may cure prior to Closing,
at their sole expense, all of the Environmental Objections, to the sole
satisfaction of Buyer either by (i) the remediation/repair of such Environmental
Objections, (ii) the procurement of insurance endorsements for the benefit

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of GateHouse Media and Buyer providing full and complete coverage against loss
or damage as a result of such Environmental Objections,  (iii) providing
alternative arrangements, satisfactory to Buyer in its sole discretion,
providing Buyer the full economic benefit of the ownership of the affected Owned
Real Property without any of the risk associated with or relating to such
Environmental Objections or (iv) remove such particular parcel of the Owned Real
Property from the Acquired Assets being transferred upon written notice to
Sellers, and with an equitable adjustment to the Purchase Price in accord with
the agreed upon allocation of Purchase Price described in Section 1.7.  If
Sellers fail to cure or address, prior to Closing, all Environmental Objections
with respect to any particular parcel of the Owned Real Property as provided
above, then Buyer, in its sole discretion may either (A) consummate the
transactions contemplated hereby, notwithstanding the Environmental Objections,
with an equitable adjustment to the Purchase Price described in Section 1.7 or
(B) terminate this Agreement.

5.20           Bulk Transfer Laws.  The parties hereby waive compliance with the
provisions of the applicable bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.

ARTICLE VI.
ADDITIONAL COVENANTS

6.1  
No Securities Transactions.

(a)           Neither Morris Communications, Sellers nor any of their respective
managers, members or officers or any of their Affiliates, directly or
indirectly, shall engage in any transactions involving the securities of
GateHouse Media prior to the time of the making of a public announcement of the
transactions contemplated by this Agreement. Morris Communications and Sellers
shall use their commercially reasonable efforts to ensure compliance with the
foregoing requirement.
(b)           None of GateHouse Media, Buyer nor any of their respective
managers, members or officers or any of their Affiliates, directly or
indirectly, shall engage in any transactions involving the securities of Morris
Publishing prior to the time of the making of a public

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announcement of the transactions contemplated by this Agreement. GateHouse Media
and Buyer shall use their commercially reasonable efforts to ensure compliance
with the foregoing requirement.

ARTICLE VII.
CONDITIONS TO THE OBLIGATIONS OF SELLERS

The obligations of Sellers and Morris Communications under this Agreement are,
at their option, subject to the fulfillment of the following conditions prior to
or at the Closing Date:

7.1           Representations, Warranties and Covenants.

(a)           The representations and warranties of Buyer and GateHouse Media
contained in this Agreement and in any statement, certificate, schedule or other
document delivered by Buyer and GateHouse Media pursuant hereto or in connection
with the transactions contemplated hereby, shall have been true and accurate as
of the date when made and shall be deemed to be made again on and as of the
Closing Date and shall then be true and accurate, except for untrue or
inaccurate representation or warranties which would not, in the aggregate,
impair Buyer’s or GateHouse Media’s ability to fulfill its obligations under
this Agreement or have a Material Adverse Effect on GateHouse Media and its
subsidiaries, taken as a whole;
(b)           Buyer and GateHouse Media shall have performed and complied in all
material respects with each and every covenant and agreement required by this
Agreement to be performed or complied with by them prior to or at the Closing
Date, and shall have delivered all agreements and documents contemplated by
Section 2.3, other than the delivery by Buyer and GateHouse Media of the
Purchase Price and the instrument of assumption, each of which shall be
delivered as of the Closing; and
(c)           Buyer and GateHouse Media shall have delivered to Sellers a
certificate of an appropriate officer of Buyer and GateHouse Media, dated the
Closing Date, certifying to the fulfillment of the conditions set forth in
Sections 7.1(a) and 7.1(b) above.

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7.2           Proceedings.

(a)           No action or proceeding shall have been instituted before
any  Governmental Authority to restrain or prohibit, or to obtain substantial
damages in respect of, the consummation of the transactions contemplated by this
Agreement which, in the reasonable opinion of Sellers, may be expected to result
in an award of substantial damages or have a Material Adverse Effect on
GateHouse Media and its subsidiaries, taken as a whole;
(b)           None of the parties to this Agreement shall have received written
notice from any Governmental Authority of (i) its intent to institute any action
or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry), into the consummation of this Agreement, or (ii) the
actual commencement of such an investigation.  In the event such a notice of
intent is received or such an investigation is commenced, this Agreement may not
be terminated by Sellers for a period of ninety (90) days from the date of such
notice of intent or notice of commencement, but Closing shall be delayed during
such period.  This Agreement may be terminated after this ninety (90)-day period
if, in the reasonable opinion of Sellers, there is a likely probability that an
investigation will result in an action or proceeding of the type described in
clause (a) of this Section 7.2; and
(c)           At the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any Governmental Authority in effect which
restrains or prohibits the consummation of the sale and purchase of the Acquired
Assets as contemplated by this Agreement.

7.3           Hart-Scott-Rodino.  The waiting period (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated, and all other authorizations, consents and approvals of Governmental
Authority required for consummation of the transactions contemplated hereby
shall have been obtained.

ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF GATEHOUSE MEDIA AND BUYER

The obligations of GateHouse Media and Buyer under this Agreement are, at their
option, subject to the fulfillment of the following conditions prior to or at
the Closing Date.

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8.1           Representations, Warranties and Covenants.

(a)           The representations and warranties of Sellers and Morris
Communications contained in this Agreement and in any statement, deed,
certificate, schedule or other document delivered pursuant to this Agreement or
in connection with the transactions contemplated hereby, shall have been true
and accurate as of the date when made and shall be deemed to be made again on
and as of the Closing Date and shall then be true and accurate;
(b)           Sellers and Morris Communications shall have performed and
complied in all material respects with each and every covenant and agreement
required by this Agreement to be performed or complied with by them prior to or
at the Closing Date, and shall have delivered all agreements and documents
contemplated by Section 2.2, other than delivery to Buyer of the instruments
conveying the Acquired Assets to Buyer which shall be delivered as of the
Closing; and
(c)           Sellers and Morris Communications shall have delivered to Buyer
certificates of appropriate officers of Sellers, dated the Closing Date,
certifying to the fulfillment of the conditions set forth in Sections 8.1(a) and
8.1(b) above.

8.2           Proceedings.

(a)           No action or proceeding shall have been instituted before any
Governmental Authority to restrain or prohibit, or to obtain substantial damages
in respect of, the consummation of this Agreement which, in the reasonable
opinion of Buyer, may be expected to result in an award of such substantial
damages;
(b)           None of the parties to this Agreement shall have received written
notice from any Governmental Authority of (i) its intent to institute any action
or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry), into the consummation of this Agreement, or (ii) the
actual commencement of such an investigation.  In the event such a notice of
intent is received or such an investigation is commenced, this Agreement may not
be terminated by Buyer for a period of ninety (90) days from the date of such
notice of intent or notice of

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commencement, but Closing shall be delayed during such period.  This Agreement
may be terminated after this ninety (90)-day period if, in the reasonable
opinion of Buyer, there is a likely probability that an investigation will
result in an action or proceeding of the type described in clause (a) of this
Section 8.2; and
(c)           At the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any Governmental Authority or body in effect
which restrains or prohibits the consummation of the sale and purchase of the
Acquired Assets contemplated by this Agreement.

8.3           Hart-Scott-Rodino.  The waiting period (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated, and all other authorizations, consents and approvals of Governmental
Authority required for consummation of the transactions contemplated hereby
shall have been obtained.

8.4           Consents.  Sellers shall have obtained the consents set forth on
Schedule 3.9 and Schedule 3.10(b), all of which shall be reasonably satisfactory
to Buyer in form and substance.

8.5           Title Insurance.  Buyer shall have received and be satisfied with
the Title Commitments for the Owned Real Property in accordance with the
requirements of Section 5.13.

8.6           Real Property Phase I Reports.   The Real Property Phase I Reports
shall be performed at each Real Property and a copy of the Real Property Phase I
Reports shall be satisfactory to Buyer in accordance with the requirements of
Section 5.19.

8.7           Landlord Estoppel Certificates.  Sellers shall have obtained and
delivered to Buyer an estoppel certificate with respect to each of the Leases
dated no more than thirty (30) days prior to the Closing Date, from the other
party to such Lease, in form and substance reasonably satisfactory to Buyer.

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ARTICLE IX.
INDEMNIFICATION

9.1           Survival; Limitations.

(a)           The representations and warranties of the parties contained in or
made pursuant to this Agreement shall be deemed to have been made on the date
hereof and on the Closing Date, shall survive the Closing Date and shall remain
operative and in full force and effect for the period ending 18 months
thereafter (the “Survival Period”); provided that if on or prior to the
expiration of the Survival Period, a notice of claim for indemnification shall
have been given in accordance with Section 9.4 hereof, the indemnified party
shall continue to have the right to be indemnified with respect to such
indemnification claim until such claim for indemnification has been satisfied or
otherwise resolved as provided in this Article IX; and provided further that the
representations and warranties contained in, Section 3.16 (‘Environmental
Matters’), Section 3.19 (‘Taxes’)
and Section 3.20 (‘Investment Representations’) shall survive until the
expiration of the applicable statute of limitations period plus 90 days and the
representations and warranties contained in Sections 3.2 (‘Authority Relative to
the Agreement’), 3.21 (‘Brokers’), 4.2 (‘Authority Relative to the Agreement’)
and 4.8 (‘Brokers’) and all covenants and agreements made by any party hereunder
which are to be performed after the Closing Date shall survive without time
limit, with the exception of Sections 9.2(a) and 9.3(a), which shall only remain
operative and in full force and effect as long as indemnification with respect
to the underlying representation and warranty remains available in accordance
with the foregoing provisions of this Section 9.1(a) (including as extended
pursuant to the first proviso hereof).
(b)           Except for any Loss and Expense (as defined in Section 9.2)
suffered by Buyer based on the breach of any representation or warranty
contained in Section 3.16 (‘Environmental Matters’), Section 3.19 (‘Taxes’) and
Section 3.20 (‘Investment Representations’) or resulting from fraud or willful
misconduct by Sellers or Morris Communications, Buyer and/or GateHouse Media
shall not be entitled to indemnification under this Agreement for any
indemnification claim under Section 9.2(a) until the aggregate Loss and Expense
suffered by Buyer and/or GateHouse Media subject to indemnification under
Section 9.2(a) of this Agreement exceeds $1,000,000 (the “Threshold”).  Once the
Threshold has been reached, Buyer and/or GateHouse Media shall be entitled to
full indemnification from Sellers pursuant to Section 9.2(a) below for

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the aggregate amount of Loss and Expense suffered by Buyer and/or GateHouse
Media, in excess of the Threshold.  Notwithstanding the foregoing, the Threshold
shall not apply to any adjustments under Section 1.6, any Loss and Expense
suffered by Buyer and GateHouse Media based on any breach of any representation
or warranty contained in , Section 3.16 (‘Environmental Matters’), Section 3.19
(‘Taxes’) or Section 3.20 (‘Investment Representations’) or resulting from fraud
or willful misconduct by Sellers or Morris Communications or to any
indemnification claim related to covenants and agreements made by any party
hereto which are to be performed after the Closing Date.
(c)           Sellers’ and Morris Communication’s maximum aggregate liability to
Buyer and GateHouse Media for indemnification claims under Section 9.2(a) of
this Agreement with respect to any Loss and Expense shall be $11.5 million (the
“Cap”); provided that the Cap shall not apply to any Loss and Expense suffered
by Buyer and GateHouse Media based on any breach of any representation or
warranty contained in Section 3.16 (‘Environmental Matters’), Section 3.19
(‘Taxes’) or Section 3.20 (‘Investment Representations’) or resulting from fraud
or willful misconduct by Sellers or Morris Communications or any covenants and
agreements made by any party hereto which are to be performed after the Closing
Date.  Except with regard to compensation for claims paid to third parties, no
indemnifying party shall have any liability to an indemnified party for any
punitive, indirect, incidental or consequential damages or loss including,
without limitation, loss of revenue or loss of profits.
(d)           Except for enforcement of the Note or equitable remedies
(including, without limitation, injunctive relief) and in the absence of fraud,
the parties hereto acknowledge and agree that the sole and exclusive remedy of
the parties, as the case may be, from and after the Closing Date with respect to
any Loss and Expense whatsoever and any and all claims for breach or liability
under this Agreement or any of the transactions contemplated hereby shall be
solely in accordance with, and limited by, the indemnification provisions set
forth in this Agreement.

9.2           Indemnification of Buyer and GateHouse Media.  Morris
Communications and Sellers, jointly and severally agree to indemnify, defend and
hold Buyer and GateHouse Media harmless from and against any and all damages,
claims, losses, expenses, costs, fines, penalties, obligations and liabilities,
including without limitation, liabilities for reasonable attorneys’ fees and
disbursements net of the benefit of Tax deductions and insurance claims
(collectively, “Loss

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and Expense”), suffered directly or indirectly by Buyer and/or GateHouse Media
by reason of, or arising out of:

(a)           any breach of any representation or warranty made by Morris
Communications or Sellers pursuant to this Agreement, in each case as read
without regard to any materiality qualifiers or references to material adverse
effect if any single Loss or Expense (or series of related Losses or Expenses in
the aggregate) exceeds $50,000 (the “Materiality Threshold”), in which case
Buyer and GateHouse Media shall be indemnified from the first dollar of such
Loss or Expense; provided however that the Materiality Threshold shall not apply
where there are no such qualifiers or references;
(b)           any failure by Morris Communications or any of Sellers to perform
or fulfill any of their covenants or agreements set forth in this Agreement, in
each case as read without regard to any materiality qualifiers or references to
material adverse effect if any single Loss or Expense (or series of related
Losses or Expenses in the aggregate) exceeds the Materiality Threshold, in which
case Buyer and GateHouse Media shall be indemnified from the first dollar of
such Loss or Expense; provided however that the Materiality Threshold shall not
apply where there are no such qualifiers or references;
(c)           any failure by Morris Communications or any of Sellers to pay or
perform when due any of their liabilities or obligations arising out of or
related to the business and operation of the Publications on or prior to the
Closing Date which have not been assumed by Buyer hereunder, including, but not
limited to, the Excluded Liabilities;
(d)           any litigation, proceeding or claim by any third party relating to
the business or operations of the Publications on or prior to the Closing Date
which have not been expressly assumed by Buyer;
(e)           the Excluded Assets; or
(f)           any liability, including but not limited to any liability pursuant
to any Environmental Law, arising from or related to conditions or events that
occurred prior to the Closing arising from or related to the ownership of the
Real Property and/or the operations of the Publications on the Real Property on
or prior to the Closing Date; provided, however, that Morris Communications and
Sellers shall have no liability pursuant to (i) any changes in use of the Real
Property after the Closing Date which trigger clean-up standards that are more
stringent than the

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clean-up standards applicable based on the use of the Real Property as of the
Closing Date and any reasonably foreseeable or related uses and (ii) any changes
in Environmental Laws after the Closing Date which result in clean-up standards
that are more stringent than the clean-up standards applicable as of the Closing
Date with respect to the uses of the Real Property as of the Closing Date and
any reasonably foreseeable or related uses.

9.3           Indemnification of Sellers and Morris Communications.  Buyer and
GateHouse Media, jointly and severally, agree to indemnify, defend and hold
Sellers and Morris Communications harmless from and against any and all Loss and
Expense suffered directly or indirectly by such Sellers and/or Morris
Communications by reason of, or arising out of:

(a)           any breach of any representation or warranty made by Buyer or
GateHouse Media pursuant to this Agreement;
(b)           any failure by Buyer or GateHouse Media to perform or fulfill any
of their covenants or agreements set forth in this Agreement or the Note;
(c)           any failure by Buyer or GateHouse Media to pay or discharge on or
subsequent to the Closing Date any Assumed Liabilities hereunder or any
liabilities or obligations arising out of or related to the business of the
Publications incurred or first required to be performed by Buyer or GateHouse
Media after the Closing Date;
(d)           any litigation, proceeding or claim by any third party relating to
the business or operation of the Publications after the Closing Date; or
(e)           claims made by New Employees with respect to termination of
employment by Buyer after the Closing Date, including, but not limited to, any
claims for improper termination or severance payments.

9.4           Notice of Claims.  If any party to the Agreement believes that it
has suffered or incurred any Loss and Expense, it shall notify the other
party(ies) promptly in writing and within the applicable time period specified
in Section 9.1, describing such Loss and Expense, the amount thereof, if known,
and the method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred; provided, however,
that the amount of the Loss and

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Expense set forth in the notice shall not be a limitation on any claim for the
actual amount of such Loss and Expense.

9.5           Defense of Third Party Claims.  If any action at law or suit in
equity is instituted by a third party (a “Claim”) with respect to which any of
the parties intends to claim a Loss and Expense under this Article IX, such
party shall promptly notify the indemnifying party(ies) of such action or
suit.  The indemnifying party(ies) shall have the right to conduct and control
any Claim through counsel of its own choosing, but the indemnified party may, at
its election, participate in the defense of any such Claim at its sole cost and
expense.  If the indemnifying party(ies) does not notify the indemnified party
within 10 days after receipt of the notice specified in this Section 9.5 that it
is defending any such Claim, then the indemnified party may defend such Claim,
and settle such Claim, through counsel of its own choosing, and recover from the
indemnifying party the amount of any such settlement or of any judgment and the
costs and
expenses of such defense, including, but not limited to, reasonable attorneys’
fees and disbursements.

Notwithstanding the foregoing, the failure by a party to abide by these terms
and conditions shall not affect the other party’s obligations to indemnify such
party against Loss and Expense under this Article IX, except to the extent the
indemnifying party(ies) is actually prejudiced thereby.

ARTICLE X.
MISCELLANEOUS PROVISIONS
 
10.1           Risk of Loss.  The risk of any loss, damage or destruction to any
of the Acquired Assets to be transferred to Buyer hereunder from any cause shall
be borne by Sellers at all times prior to the Closing hereunder.  Upon the
occurrence of any loss or damage in excess of $100,000 to any of the Acquired
Assets to be transferred hereunder prior to the Closing, Sellers shall notify
Buyer of same in writing immediately stating with particularity the extent of
the loss or damage incurred, the cause thereof if known and the extent to which
restoration, replacement and repair of the Acquired Assets lost or destroyed
will be reimbursed under any insurance policy with respect thereto.  In the
event the loss exceeds $1,000,000 and the Acquired Assets cannot be
substantially repaired or restored within ninety (90) days after such loss, or,
without regard to the

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amount or duration of such loss, if production of any publication is interrupted
for three (3) consecutive days resulting in a loss or expected loss of revenues
following the Closing Date of $1,000,000 or more, Buyer shall have the option,
exercisable by giving written notice to Sellers within 30 days after such loss,
to:

(a)           Accept alternative arrangements proposed by Sellers to provide
Buyer the full economic benefit of the ownership of the effected Acquired Assets
or Publications;
(b)           Remove such particular Acquired Assets or the entire Publication
with an equitable adjustment to the Purchase Price, in an amount subject to the
reasonable consent of Sellers;
(c)           If such loss is a Material Adverse Event, either:
(i)           Terminate this Agreement unless the parties can agree to an
equitable adjustment to the Purchase Price;
(ii)           Postpone the Closing until such time as the Acquired Assets have
been substantially repaired, replaced or restored; or
(d)           Elect to consummate the Closing and accept the Acquired Assets in
their “then” condition, in which event Sellers shall assign to Buyer all rights
under any insurance claim covering the loss and pay over to Buyer any proceeds
under any such insurance policy thereto received by Sellers with respect
thereto.

10.2           Termination of Agreement.  This Agreement may be terminated by
Sellers or Buyer at any time prior to the Closing Date:

(a)           By the mutual consent of the parties hereto;
(b)           Subject to extension under Section 7.2(b), by Sellers and Morris
Communications if any of the conditions provided in Article VII hereof has not
been timely met and cannot be met on or before December 31, 2007 (in each case
other than as a result of a breach of this Agreement by Sellers or Morris
Communications) and has not been waived, provided Sellers or Morris
Communications is not then in material breach of this Agreement;
(c)           Subject to extension under Section 8.2(b), by Buyer and GateHouse
Media if any of the conditions provided in Article VIII hereof has not been
timely met by and cannot be met on or before December 31, 2007 (in each case
other than as a result of a breach of this Agreement by

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Buyer or GateHouse Media) and has not been waived, provided Buyer or GateHouse
Media is not then in material breach of this Agreement;
(d)           As provided in Sections 1.4, 5.13, 5.19 or 10.1;
(e)           By Buyer if any amendment, update or supplement made by Sellers
and/or Morris Communications after the date hereof to the Schedules delivered to
them by or on behalf of Seller pursuant to this Agreement or any materials
supplementally delivered by or on behalf of Sellers and/or Morris Communications
discloses any facts or circumstances which, individually or in the aggregate,
which have, or may be reasonably expected to have, a  Material Adverse Effect;
or
(f)           By either Buyer or Sellers if the Closing has not occurred prior
to April 1, 2008 and the other Party has not provided notice of an intention to
pursue a claim for a breach of this Agreement by the terminating Party.

10.3           Liabilities Upon Termination.  In the event this Agreement is
terminated pursuant to Section 10.2 above, no party hereto shall have any
liability to any other party for costs, expenses, damages, loss of anticipated
profits or otherwise, unless the termination occurs because of a willful and
intentional breach by such party.

10.4           Expenses.  Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and
expenses.  Any sales or use Taxes or recording or transfer Taxes or fees
directly related to transferring the Acquired Assets to Buyer (“Transfer Taxes”)
shall be paid by Buyer.  The cost of title insurance for the Real Property
purchased by Buyer hereunder shall be paid by Buyer.

10.5           Employees and Employee Benefits.

(a)           Buyer hereby agrees to offer employment, effective the day after
the Closing Date, to all individuals who are, on the Closing Date, active, full
or part-time Publication Employees (including employees on short-term
leave).  With respect to each such Publication Employee to whom Buyer offers
employment, Buyer shall offer to employ such person at a rate of total
 

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compensation substantially similar as that which was paid to such Publication
Employee immediately prior to Closing.  Each Publication Employee of Sellers who
accepts employment with Buyer on the Closing Date is hereinafter referred to as
a “New Employee”.
 
(b)           Except as set forth in subsection (a) above, Buyer, in its sole
discretion, shall determine what employee benefits will be made available to New
Employees; provided, however, that Buyer (i) will offer medical coverage to New
Employees immediately after the Closing Date; (ii) shall waive for New
Employees, to the extent permitted by Buyer’s health plans, any pre-existing
condition limitations and waiting periods that may apply under such health
plans; and (iii) shall recognize New Employees’ service with Sellers or any of
their respective Affiliates as if it were service with Buyer for purposes of
satisfying any vesting requirements under any benefit plans offered by Buyer
(but not for purposes of benefit accrual or for determining the amount of
benefits payable under any benefit plan other than a vacation
plan).  Notwithstanding the foregoing, nothing contained herein shall (i) be
treated as an amendment to any particular employee benefit plan, (ii) obligate
Buyer or any of its Affiliates to (A) maintain any particular benefit plan or
(B) retain the employment of any particular employee (in general or at a
particular rate of compensation), or (iii) give any third party the right to
enforce any of the provisions of this Agreement.  Buyer retains all rights to
amend or terminate any of its benefit programs in its sole discretion.
 (c)           Buyer shall be responsible for any obligations under federal,
state or local plant closing statutes, including the Worker Adjustment and
Retraining Notification Act of 1988, as amended (“WARN Act”), with respect to
events occurring after the Closing Date other than any such obligations arising
from the consummation of the transactions contemplated by this Agreement.
 
(d)           Sellers and Morris Communications shall be responsible for and
timely pay all compensation owed to New Employees and shall be responsible for
and timely provide New Employees with all benefits owed under the Employee
Benefit Programs through the Closing Date.  Sellers and Morris Communications
will retain all of the Employee Benefit Programs, including all employee benefit
plans and pension plans, and Buyer will not assume obligations under any such
programs.  Sellers shall take all necessary and appropriate action to ensure
that New Employees will not continue to be active participants in the Employee
Benefit Programs after the Closing Date.  Sellers and Morris Communications
shall be fully and solely responsible for any costs, expenses, obligations and
liabilities arising out of the pension, retirement or other
 

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benefit obligations attributable to the Employee Benefit Programs and Sellers’
current or former employees related to the period on or prior to the Closing
Date.
 

 
10.6           Further Assurances and Consents.

(a)           To the extent Buyer and GateHouse Media have proceeded with
Closing notwithstanding the failure of Sellers or Morris Communications to
effect the deliveries contemplated by Sections 8.1(b) or 8.4, from time to time
after the Closing Date, without further consideration, Sellers and Morris
Communications will, at their expense, (i) execute and deliver, or cause to be
executed and delivered, such documents to Buyer and GateHouse Media as Buyer and
GateHouse Media may reasonably request in order to effectively vest in Buyer
good and valid (and, in the case of Real Property, good and marketable) title to
the Acquired Assets, and (ii) subject to Section 5.6(b), use reasonable efforts
to obtain any third-party consents to the assignment to Buyer of the Material
Contracts which require the consent of any third party by reason of the
transactions provided for in this Agreement and which were not obtained by
Sellers or Morris Communications on or before the Closing Date.
 
(b)           From time to time after the Closing Date, Buyer will provide
Sellers with access, with reasonable prior notice and during normal business
hours, to the financial records of the Publications related to the period on or
prior to the Closing Date for use by Sellers in connection with Tax and/or legal
proceedings related to the operation of the Publications on or prior to the
Closing Date.  Buyer agrees to maintain all Tax records related to the
Publications for all Tax years that remain open as of the Closing Date unless
and until (i) Sellers notify Buyer in writing that any such Tax year(s) has
(have) been closed or (ii) Buyer has given Sellers prior written notice of its
intent to destroy such records and Sellers have not reasonably and promptly
requested that such records not be destroyed.
(c)           If, in order to properly prepare its financial statements or
documents to be filed with any Governmental Authority, it is necessary that any
party hereto be furnished with additional information relating to the Acquired
Assets or the Publications and such information is in the possession of any of
the other parties hereto, such party or parties agree to use its/their best
efforts to furnish such information to the requesting party without cost or
expense to the

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requesting party, unless it is necessary for such party or parties to incur
third party expenses (e.g. legal or accounting fees) in connection with such
request in which case the requesting party shall reimburse the furnishing party
for such third party expenses.  After the Closing Date, except to the extent
otherwise noted, each of the parties hereto, shall, to the extent reasonably
requested by any other party hereto: (i) assist in the preparation of Tax
Returns relating to the Acquired Assets and/or the Publications, (ii) cooperate
in preparing any audits by or disputes with any Governmental Authority,
including but not limited to, regarding any Tax Returns, (iii) at any time after
the execution of this Agreement, assist in the preparation of audited financial
statements to the extent they relate to, incorporate or rely upon any
information regarding the Acquired Assets and/or the Publications, including but
not limited to providing relevant work papers and any certification or
representation reasonably requested, (iv) make available information, records
and documents relating to Taxes relating to the Acquired Assets and/or the
Publications (provided that each party shall have the right to reasonably limit
contact and communications to specific individuals within their respective
companies), and (v) furnish copies of correspondence received from any
Governmental Authority in connection with any Tax audit or information request
relating to the Acquired Assets and/or the Publications.
(d)  Each of Buyer and GateHouse Media, on the one hand, and Sellers and Morris
Communications on the other hand, shall use its reasonable commercial efforts,
and shall cause its respective Affiliates to use their reasonable commercial
efforts, to consummate the transactions contemplated by this Agreement as soon
as practicable following the date hereof.  Each of Buyer and GateHouse Media, on
the one hand, and Sellers and Morris Communications on the other hand, shall
cooperate with the other party, and use all reasonable commercial efforts, to
(a) procure all necessary and appropriate applications, notifications, filings
and certifications, and satisfy all requirements prescribed by applicable law,
rule on regulation for, and all conditions set forth in this Agreement to, the
consummation of the Transactions contemplated hereby or thereby, and (b) effect
the transactions contemplated by this Agreement at the earliest practicable date
consistent with the terms hereof.  Without limiting the generality of the
foregoing, each of Buyer and GateHouse Media, on the one hand, and Sellers and
Morris Communications on the other hand, shall (i) cooperate in good faith and
take all actions necessary, appropriate or advisable to file expeditiously and
diligently with the Federal Trade Commission and the Department of Justice the
materials required pursuant to the Hart-Scott

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Rodino Act, (ii) use its reasonable  commercial efforts to prosecute such
filings and respond to inquiries related to a favorable conclusion, (iii) not
extend any waiting period under the Hart-Scott-Rodino Act or enter into any
agreement not to consummate the transactions contemplated by this Agreement,
except with the prior written consent of the other party, and (iv) use its
reasonable commercial efforts to avoid entry of (or to have vacated or
terminated) any decree, order or judgment that would restrain, prevent or delay
the Closing.  In addition, subject to Sections 5.7 and 10.18 and except as
prohibited by applicable law, rule or regulation, each of  Buyer and GateHouse
Media, on the one hand, and Sellers and Morris Communications on the other hand,
shall (x) promptly notify the other party of any written communication to such
party from any Governmental Authority regarding antitrust matters and permit
such other party to review in advance any proposed written communication to any
such Governmental Authority, and (y) not participate in any meetings or
substantive discussions with any Governmental Authority with respect to
antitrust matters without offering the other party a meaningful opportunity to
participate in such meetings or discussions.
(e)           If the parties are not able to agree upon the Transition Services
Agreements prior to the Closing, Morris Communications and Sellers shall provide
to Buyer transition services as and to the extent reasonably requested by Buyer,
at Buyer’s cost (which shall be equal to Sellers’ cost), pending the execution
of the Transition Services Agreements, if any.

10.7           Waiver of Compliance.  Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
only by a written instrument signed by the party granting the waiver.  Any such
waiver or failure to insist upon strict compliance with a term of this Agreement
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure to comply.

10.8           Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):

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(a)           If to Sellers, to:
Morris Publishing Group, LLC
725 Broad Street
Augusta, Georgia 30901
Attn:
Fax No.
 
with a copy to:
 
Hull, Towill, Norman, Barrett & Salley, P.C.
801 Broad Street, 7th Floor
Augusta, Georgia  30901
Attn:  Lawton Jordan, Esq.
Facsimile: 706-722-9779

(b)           If to Buyer:
GateHouse Media Operating, Inc.
350 WillowBrook Office Park
Fairport, New York 14450
Attn:  Randy Cope
Fax No. 585-248-2631

with a copy to:

GateHouse Media, Inc.
350 WillowBrook Office Park
Fairport, New York 14450
Attn:  Polly Grunfeld Sack
General Counsel
Fax No. (585) 248-9562

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(c)           If to GateHouse Media:

 
GateHouse Media, Inc.

350 WillowBrook Office Park
Fairport, New York 14450
Attn:                      Michael E. Reed
Chief Executive Officer
 
Fax No. (585) 248-2631

with a copy to:

GateHouse Media, Inc.
350 WillowBrook Office Park
Fairport, New York 14450
Attn:  Polly Grunfeld Sack
General Counsel
Fax No. (585) 248-9562

(d)           If to Morris Communications:

Morris Communications Company, LLC
725 Broad Street
Augusta, Georgia 30901
Attn:
Fax No.
 
with a copy to:
 
Hull, Towill, Norman, Barrett & Salley, P.C.
801 Broad Street, 7th Floor
Augusta, Georgia  30901
Attn:  Lawton Jordan, Esq.
Facsimile: 706-722-9779

10.9           Assignment.  This Agreement and all of its terms shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns.  Prior to the Closing, this Agreement shall not be assigned
by any party hereto without the prior written consent of the other parties;
provided, however, that Sellers may assign its rights under this Agreement with
respect to the portion of the Purchase Price allocated to the Real Property in
accordance with Section 1.7 to a qualified intermediary for the purpose of
facilitating a tax-free like-kind exchange of real estate.  Any such assignment
to a qualified intermediary shall not relieve Sellers of any obligation
hereunder, and shall not require Buyer to incur any additional expense or

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liabilities.  Furthermore, Sellers shall reimburse GateHouse Media and Buyer for
all costs and expenses (including reasonable attorney’s fees) in connection
therewith.

10.10                      Governing Law.  This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York
without reference to the choice of law principles thereof.  This Agreement sets
forth the entire understanding of the parties, and supersedes any and all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof and shall be governed and construed under the laws of the
State of New York.  Any action or proceeding involving this Agreement shall be
adjudicated in a court with jurisdiction in Monroe County, New York and the
parties irrevocably consent to the personal jurisdiction and venue of such
court.

10.11                      Public Announcements.  Prior to the Closing, except
as required by applicable law, rule or regulation, no public announcement
(including an announcement to employees), press release or other disclosure to
third parties concerning this Agreement or the transactions provided for herein
shall be made by any party without the prior written approval of the other
parties, which shall not be unreasonably withheld, conditioned or delayed.  With
respect to any disclosures required by applicable law, rule or regulation,
including disclosure requirements under applicable securities laws and Current
Reports on Form 8-K under the Exchange Act, each party will consult with the
other party and allow the other party to review the proposed disclosure prior to
making any such disclosures.

10.12                      No Third Party Rights.  Nothing in this Agreement
shall be deemed to create any right on the part of any person or entity not a
party to this Agreement.

10.13                      Waiver of Jury Trial.  The parties hereto
specifically waive any right to trial by jury in any court with respect to any
contractual, tortious or statutory claim, counterclaim or crossclaim against the
other arising out of or connected in any way to this Agreement because the
parties hereto, each of whom are represented by counsel, believe that the
complex commercial aspects of their dealing with one another make a jury
determination neither desirable nor appropriate.

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10.14                      Counterparts.  This Agreement may be executed via
e-mail or facsimile and/or in identical counterparts and each counterpart hereof
shall be deemed to be an original instrument, but all counterparts hereof taken
together shall constitute a single document.

10.15                      Headings.  The article and section headings contained
in this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.

10.16                      Specific Performance.  Except as provided in Section
10.3, without limiting or waiving in any respect any rights or remedies of any
of the parties hereto given under this Agreement, or now or hereafter existing
at law or in equity or by statute, each of the parties hereto shall be entitled
to seek specific performance of the obligations to be performed by any other
party hereto, as the case may be, in accordance with the provisions of this
Agreement.

10.17                      Severability.  If any provision of this Agreement or
the application of any such provision to any person or circumstance shall be
held invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.

10.18                      Entire Agreement; Amendments.  This Agreement,
including the Exhibits and the Schedules delivered pursuant hereto and the
documents delivered hereunder, embodies the entire agreement and understanding
of the parties in respect of the subject matter hereof, and supersedes all prior
agreements and understandings between the parties.  This Agreement may not be
amended except in a writing signed by both parties; provided, however, that the
terms of that certain Confidentiality Agreement dated July 19, 2007 between
Sellers and GateHouse Media shall continue to be in force and effect in
accordance with its terms.  The parties have caused this Agreement to be signed
by their respective duly authorized officers as of the date first above written.

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10.19                      Guaranties.

(a)  Morris Communications hereby guarantees to Buyer and GateHouse Media, as a
primary obligor, payment and performance by Sellers of their obligations under
this Agreement and under each of the other agreements contemplated hereunder to
which Sellers are a party (including without limitation, all amendments hereof
and thereof), in each case, subject to the terms, conditions and limitations
hereof and thereof.  Morris Communications hereby waives suretyship defenses,
demand, payment, protest and notice of dishonor or nonperformance of any such
obligations (other than any copies of notices required to be delivered under
this Agreement to Morris Communications), and no consent of Morris
Communications shall be required with respect to any amendment or waiver of this
Agreement (other than this Section 10.19) that is effected in accordance with
this Agreement.  The liability of Morris Communications under this Agreement by
reason of this Section 10.19 is primary, and neither Buyer nor GateHouse Media
shall be required to make any demand on Sellers for performance of any of its
obligations under this Agreement, nor to exhaust any legal, contractual or
equitable remedies against Sellers, prior to proceeding against Morris
Communications.
 (b)  GateHouse Media hereby guarantees to Sellers, as a primary obligor,
payment and performance by Buyer of its obligations under this Agreement and
under each of the other agreements contemplated hereunder to which Buyer is a
party (including without limitation, all amendments hereof and thereof), in each
case, subject to the terms, conditions and limitations hereof and
thereof.  GateHouse Media hereby waives suretyship defenses, demand, payment,
protest and notice of dishonor or nonperformance of any such obligations (other
than any copies of notices required to be delivered under this Agreement to
GateHouse Media), and no consent of GateHouse Media shall be required with
respect to any amendment or waiver of this Agreement (other than this Section
10.19) that is effected in accordance with this Agreement.  The liability of
GateHouse Media under this Agreement by reason of this Section 10.19 is primary,
and neither Sellers nor Morris Communications shall be required to make any
demand on Buyer for performance of any of its obligations under this Agreement,
nor to exhaust any legal, contractual or equitable remedies against Buyer, prior
to proceeding against GateHouse Media.

10.20                      Knowledge.  For all purposes hereunder, “to the
knowledge of Morris Communications or Sellers” (or words of like import) shall
mean to the actual knowledge of each of William S. Morris III, William S. Morris
IV, Craig S. Mitchell, Steve K. Stone, James C. Currow, Michael Traynor and Lucy
Talley, in each case after due inquiry; and “to the knowledge of GateHouse Media
or Buyer” (or words of like import) shall mean to the actual knowledge of each
of Michael Reed, Mark Thompson or Polly Grunfeld Sack, in each case after due
inquiry.

{Signature page follows}

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which is
effective as of the date first written above.

SELLERS:

MORRIS PUBLISHING GROUP, LLC
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                      

MPG ALLEGAN PROPERTY, LLC
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                       

BROADCASTER PRESS, INC.
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                      

MPG HOLLAND PROPERTY, LLC
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                       

-67-

THE OAK RIDGER, LLC
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                     

YANKTON PRINTING COMPANY
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                       

MORRIS COMMUNICATIONS COMPANY, LLC
By:           /s/                                                                
Name:                         William S. Morris
IV                                            
Title:                         President                       
 

BUYER:

____________________________________
GATEHOUSE MEDIA OPERATING, INC.
By:           /s/                                                                
Name:  Mark Thompson_
Title:    Chief Financial Officer

GATEHOUSE MEDIA, INC.
By:           /s/                                                                
Name: Mark
Thompson                                                                
Title:   Chief Financial
Officer                                                               

-68-

Exhibit A
Publications

The Daily Ardmoreite (Ardmore, Oklahoma)
Spotlight (Ardmore, Oklahoma)
Dodge City Daily Globe (Dodge City, Kansas)
Shoppers Weekly (Dodge City, Kansas)
Girard Press (Girard, Kansas)
The Grand Island Independent (Grand Island, Nebraska)
Heartland Shoppers (Grand Island, Nebraska)
Hannibal Courier-Post (Hannibal, Missouri)
Salt River Journal (Hannibal, Missouri)
Hillsdale Daily News (Hillsdale, Michigan)
Sampler (Hillsdale, Michigan)
The Holland Sentinel (Holland, Michigan)
Zeeland Sentinel (Holland, Michigan)
Hamilton Herald (Holland, Michigan)
The Shawnee News-Star (Shawnee, Oklahoma)
Shopper’s Advantage (Shawnee, Oklahoma)
York News-Times (York, Nebraska)
The Morning Sun (Pittsburg, Kansas)
The Sunland Shopper (Pittsburg, Kansas)
Vermillion Plain Talk (Vermillion, South Dakota)
LaEstrella de Dodge City (Dodge City, Kansas)
Tip-Off Shopping Guide (Jonesville, Michigan)
Trade & Transactions Advantage (York, Nebraska)
Trade West (Grand Island, Nebraska)
Flashes Publishers (Allegan, Michigan) (Commercial Printing)
Flashes Shopping Guide (Allegan/North Holland/South
Holland/Kalamazoo/Lakeshore/Zeeland, Michigan)
West Michigan Senior Times (West Michigan)
The Newton Kansan (Newton, Kansas)
Prairie Shopper (Newton, Kansas)
Prairie Shopper Plus (Newton, Kansas)
The Examiner (Blue Springs, Missouri)
The Examiner (Independence, Missouri)
The Extra (Independence, Missouri)
Winter Haven News Chief (Winter Haven, Florida)
Winter Haven Shopping Guide (Winter Haven, Florida)
The Polk Shopper (Winter Haven, Florida)
The Oak Ridger (Oak Ridge, Tennessee)
Missouri Valley Shopper (Yankton, South Dakota)
The Broadcaster (Vermillion, South Dakota)
Yankton Daily Press & Dakotan (Yankton, South Dakota)
Town and Country (Yankton, South Dakota)
 
-69-

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