Exhibit 10.7 - Security Agreement

EXECUTION COPY

SECURITY AGREEMENT

This SECURITY AGREEMENT (together with all exhibits and schedules hereto, as
amended, supplemented or otherwise modified from time to time, this
“Agreement”), dated as of February 18, 2009, is made by PULITZER INC., a
Delaware corporation (together with its successors and assigns, the “Company”),
ST. LOUIS POST-DISPATCH LLC, a Delaware limited liability company (together with
its successors and assigns, the “Borrower”), and each Subsidiary of the Company
on the signature pages hereto (collectively, the “Initial Subsidiary Grantors”)
and each of the other Persons (as defined below) that from time to time becomes
an “Additional Grantor” pursuant to Section 12(m) of this Agreement (each, a
“Grantor” and, collectively, the “Grantors”) in favor of the Collateral Agent,
on behalf and for the benefit of the Secured Parties (as each such term is
defined below).

RECITALS

A. Reference is made to that certain Note Agreement, dated as of May 1, 2000 (as
amended, including pursuant to the Note Amendment (as defined below), and as in
effect on the date hereof, and as the same from time to time hereafter may be
amended, restated, supplemented or otherwise modified, the “Note Agreement”), by
and among St. Louis Post-Dispatch LLC, a Delaware limited liability company (the
“Borrower”), and the Purchasers named therein, pursuant to which, subject to the
terms and conditions set forth therein, the Borrower did issue and sell to such
Purchasers, and such Purchasers did purchase from the Borrower, the Notes (as
defined below).

B. Reference is also made to that certain Guaranty Agreement, dated as of May 1,
2000 (as amended, including pursuant to the Guaranty Amendment (as defined
below), and as in effect on the date hereof, and as the same from time to time
hereafter may be amended, restated, supplemented or otherwise modified, the
“Guaranty Agreement”), by and among the Company and the Purchasers, pursuant to
which, subject to the terms and conditions set forth therein, the Company did
guarantee the full, complete and final payment and performance of the
“Guaranteed Obligations” (as defined in the Guaranty Agreement).

C. Concurrently herewith, the Borrower is entering into a certain Limited Waiver
and Amendment No. 5 to Note Agreement, dated the date hereof (the “Note
Amendment”), with the Purchasers, pursuant to which the Purchasers and the
Borrower have, among other things, agreed to amend certain provisions of the
Note Agreement and make certain financial accommodations to the Borrower as
provided in such amendment.

D. Concurrently herewith, the Company is also entering into a certain Limited
Waiver and Amendment No. 5 to Guaranty Agreement, dated the date hereof (the
“Guaranty Amendment”), with the Purchasers, pursuant to which the Purchasers and
the Company have, among other things, agreed to amend certain provisions of the
Guaranty Agreement and make certain financial accommodations to the Company as
provided in such amendment.

E. Concurrently herewith, each Initial Subsidiary Grantor, and each additional
Person that hereinafter executes a joinder thereto, is entering into a certain
Subsidiary Guaranty Agreement, dated the date hereof (the “Subsidiary Guaranty
Agreement”), with the Purchasers, pursuant to which such Persons have, among
other things, agreed to guarantee the full, complete and final payment and
performance of the “Guaranteed Obligations” (as defined in the Subsidiary
Guaranty Agreement).

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F. The Purchasers are willing to enter into the Note Amendment and Guaranty
Amendment and otherwise make, extend and maintain certain financial
accommodations to the Borrower and Company as provided in such amendments, but
only upon the condition, among others, that the Company, the Borrower and the
Initial Subsidiary Grantors shall have executed and delivered this Agreement to
the Collateral Agent, on behalf and for the benefit of the Secured Parties.

AGREEMENT

NOW, THEREFORE, in order to induce the Purchasers to enter into the Note
Amendment and the Guaranty Amendment and to otherwise make, extend and maintain
financial accommodations to or for the benefit of the Credit Parties on the
terms and subject to the conditions set forth therein, and for other good and
valuable consideration, and intending to be legally bound, each Grantor, jointly
and severally, hereby represents, warrants, covenants and agrees as follows:

SECTION 1. Defined Terms. Capitalized terms not defined herein shall have the
meanings given to them in the Note Agreement. The following capitalized terms
shall have the following meanings (such meanings being equally applicable to
both the singular and plural forms of the terms defined):

“Account” means and includes any “account,” as such term is defined in Article 9
of the UCC, now owned or hereafter acquired or received by any Grantor or in
which any Grantor now holds or hereafter acquires or receives any right or
interest.

“Account Debtor” means a Person obligated on an Account, Chattel Paper or
General Intangible, but does not include a Person obligated to pay on or under
an Instrument, even if such Instrument constitutes a part of Chattel Paper.

“Additional Grantor” has the meaning specified for such term in Section 12(m) of
this Agreement.

“Affiliate” has the meaning specified for such term in the Note Agreement.

“Agreement” has the meaning specified for such term in the introductory
paragraph hereto.

“Asset Sale Proceeds Reserve Account” has the meaning specified in
Section 6(a)(iii).

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq., as now and hereafter in effect, any successors to such
statute and any other applicable bankruptcy, insolvency or other similar law of
any jurisdiction including, without limitation, any law of any jurisdiction
relating to the reorganization, readjustment, liquidation, dissolution, release
or other relief of debtors, or providing for the appointment of a receiver,
trustee, custodian or conservator or other similar official for all or any
substantial part of such debtor’s assets, or for the making of an assignment for
the benefit of creditors of a debtor.

 

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“Borrower” has the meaning specified for such term in the introductory paragraph
hereto.

“Certificate of Title” means all certificates of title (or similar ownership
documents) with respect to which applicable law provides for a security interest
to be identified on such certificate as a condition for the perfection or
priority of a security interest over the rights of a lien creditor or other
persons with respect thereto.

“Chattel Paper” means and includes any “chattel paper,” as such term is defined
in Article 9 of the UCC, now owned or hereafter acquired or received by Grantor
or in which any Grantor now holds or hereafter acquires or receives any right or
interest.

“Collateral” means all of each Grantor’s: (i) Accounts; (ii) Chattel Paper;
(ii) Commercial Tort Claims; (iii) Contracts; (iv) Deposit Accounts;
(v) Documents; (vi) Equipment; (vii) Fixtures; (viii) General Intangibles;
(ix) Instruments; (x) Inventory; (xi) Investment Property;
(xii) Letter-of-Credit Rights; (xiii) Supporting Obligations; (xiv) other goods
and personal property of such Grantor whether tangible or intangible and whether
now or hereafter owned or existing, leased, consigned by or to, or acquired by,
such Grantor and wherever located; and (xv) to the extent not otherwise
included, all Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of each of
the foregoing. Notwithstanding the foregoing, the term “Collateral” shall not
include “intent-to-use” trademarks at all times prior to the first use thereof,
whether by the actual use thereof in commerce, the recording of a statement of
use with the United States Patent and Trademark Office or otherwise.

“Collateral Agent” means The Bank of New York Mellon Trust Company, N.A. in its
capacity as collateral agent for the Secured Parties, together with its
successors and assigns in such capacity.

“Collateral Documents” has the meaning specified for such term in the Note
Agreement.

“Commercial Tort Claims” means any claim arising in tort now or hereafter owned
or acquired or received by any Grantor or in which any Grantor now holds or
hereafter acquires or receives any right or interest, including, without
limitation, those from time to time listed on Schedule VI hereto.

“Commodity Account” means and includes any “commodity account,” as such term is
defined in Article 9 of the UCC, now owned or hereafter acquired or received by
any Grantor or in which any Grantor now holds or hereafter acquires or receives
any right or interest.

“Company” has the meaning specified for such term in the introductory paragraph
hereto.

 

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“Contract” means any contract (including any customer, vendor, supplier, service
or maintenance contract), lease, license (including any License), undertaking,
purchase order, permit, franchise agreement or other agreement (other than any
right evidenced by Chattel Paper, Documents or Instruments), whether in written
or electronic form, in or under which any Grantor may now hold or hereafter
acquires or receives any right or interest, including with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.

“Copyright” means any of the following now owned or hereafter acquired or
created (as a work for hire for the benefit of such Grantor) by any Grantor or
in which any Grantor now holds or hereafter acquires or receives any right or
interest, in whole or in part: (a) any copyright, whether registered or
unregistered, held pursuant to the laws of the United States of America or of
any other country or foreign jurisdiction; (b) registration, application or
recording in the United States Copyright Office or in any similar office or
agency of the United States of America or any other country or foreign
jurisdiction; (c) any continuation, renewal or extension thereof; and (d) any
registration to be issued in any pending application, and shall include any
right or interest in and to work protectable by any of the foregoing which are
presently or in the future owned, created or authorized (as a work for hire for
the benefit of such Grantor) or acquired by such Grantor, in whole or in part.

“Copyright License” means any agreement, whether in written or electronic form,
now owned or hereafter acquired or received by any Grantor or in which any
Grantor now holds or hereafter acquires or receives any right or interest
granting any right to use or right not to be sued with respect to the use of any
Copyright or any work protectable by Copyright.

“Credit Party” means the Company, the Borrower and each Initial Subsidiary
Grantor.

“Deposit Account” means and includes any “deposit account” as such term is
defined in Article 9 of the UCC.

“Designated Accounts” has the meaning specified in Section 6(a).

“Documents” means and includes any “documents,” as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired or received by any Grantor
or in which any Grantor now holds or hereafter acquires or receives any right or
interest.

“Equipment” means and includes any “equipment,” as such term is defined in
Article 9 of the UCC, now or hereafter owned or acquired or received by any
Grantor or in which any Grantor now holds or hereafter acquires or receives any
right or interest.

“Event of Default” has the meaning specified for such term in Section 8 hereof.

“Excess Cash Flow Deposit Amount” means, with respect to any date of an Excess
Cash Flow Sweep Prepayment, that portion of the 20% of Excess Cash Flow for the
applicable fiscal quarter of the Company which is not applied to an Excess Cash
Flow Sweep Prepayment on such date, as provided in paragraph 4B of the Note
Agreement.

“Excess Cash Flow Sweep Account” has the meaning specified in Section 6(a)(i).

 

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“Fixtures” means and includes any “fixtures,” as such term is defined in
Article 9 of the UCC, now or hereafter owned or acquired or received by any
Grantor or in which any Grantor now holds or hereafter acquires or receives any
right or interest.

“GAAP” means generally accepted accounting principles (including International
Financial Reporting Standards, as applicable) as in effect from time to time.

“General Intangible” means and includes any “general intangible,” as such term
is defined in Article 9 of the UCC, now owned or hereafter acquired or received
by any Grantor or in which any Grantor now holds or hereafter acquires or
receives any right or interest.

“Grantors” has the meaning specified for such term in the Preamble hereto.

“Guaranty Agreement” has the meaning specified for such term in the Recitals
hereto.

“Guaranty Amendment” has the meaning specified for such term in the Recitals
hereto.

“Initial Subsidiary Grantors” has the meaning specified for such term in the
Preamble hereto.

“Instrument” means and includes any “instrument,” as such term is defined in
Article 9 of the UCC, now or hereafter owned or acquired or received by any
Grantor or in which any Grantor now holds or hereafter acquires or receives any
right or interest.

“Intellectual Property” means any intellectual property, in any medium, of any
kind or nature whatsoever, now or hereafter owned or acquired or received by any
Grantor or in which any Grantor now holds or hereafter acquires or receives any
right or interest, and shall include, in any event, any Copyright, Trademark,
Patent, trade secret, customer list, Internet domain name (including any right
related to the registration thereof), proprietary or confidential information,
mask work, source, object or other programming code, invention (whether or not
patented or patentable), technical information, procedure, design, knowledge,
know-how, software, data base, data, skill, expertise, recipe, experience,
process, model, drawing, material or record.

“Inventory” means and includes any “inventory,” as such term is defined in
Article 9 of the UCC, wherever located, now or hereafter owned or acquired or
received by any Grantor or in which any Grantor now holds or hereafter acquires
or receives any right or interest.

“Investment Property” means and includes any “investment property,” as such term
is defined in Article 9 of the UCC, now or hereafter owned or acquired or
received by any Grantor or in which any Grantor now holds or hereafter acquires
or receives any right or interest.

“Joinder Agreement” means a Joinder Agreement substantially in the form of
Exhibit A attached hereto.

“Letter-of-Credit Right” means any right now owned or hereafter acquired or
received by any Grantor or in which any Grantor now holds or hereafter acquires
or receives any right or interest, in each case to payment or performance under
a letter of credit (as such term is defined in Article 5 of the UCC), whether or
not the beneficiary has demanded or is at the time entitled to demand payment or
performance.

 

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“Lien” has the meaning specified for such term in the Note Agreement.

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests, whether in-bound or out-bound, whether in
written or electronic form, now or hereafter owned or acquired or received by
any Grantor or in which any Grantor now holds or hereafter acquires or receives
any right or interest, and shall include any renewals or extensions of any of
the foregoing thereof.

“Material Adverse Effect” means a material adverse effect on (i) the business,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole, or (ii) the ability of any Credit Party to perform its
obligations under any of the Transaction Documents, or (iii) the validity or
enforceability of any of the Transaction Documents.

“Note Agreement” has the meaning specified for such term in the Recitals hereto.

“Note Amendment” has the meaning specified for such term in the Recitals hereto.

“Note Documents” means the Note Agreement and Guaranty Agreement.

“Patent” means any of the following now hereafter owned or acquired or received
by any Grantor or in which any Grantor now holds or hereafter acquires or
receives any right or interest: (a) letters patent and right corresponding
thereto, of the United States of America or any other country or other foreign
jurisdiction, any registration and recording thereof, and any application for
letters patent, and rights corresponding thereto, of the United States of
America or any other country or other foreign jurisdiction, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States of America, any State thereof or any other country or other foreign
jurisdiction; (b) any reissue, continuation, continuation-in-part or extension
thereof; (c) any petty patent, divisional, and patent of addition; and (d) any
patent to issue in any such application.

“Patent License” means any agreement, whether in written or electronic form, now
hereafter owned or acquired or received by any Grantor or in which any Grantor
now holds or hereafter acquires or receives any right or interest granting any
right to use or right not to be sued with respect to any Patent or any invention
on which a Patent is in existence.

“Permitted Investments” has the meaning specified for such term in the
Collateral Agency Agreement.

“Person” has the meaning specified for such term in the Note Agreement.

“Pledge Agreement” means that certain Pledge Agreement dated the date hereof
entered into by the Company in favor of the Collateral Agent for the benefit of
the Secured Parties.

 

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“Proceeds” means and includes any “proceeds,” as such term is defined in
Article 9 of the UCC, now or hereafter owned or acquired or received by any
Grantor or in which any Grantor now holds or hereafter acquires or receives any
right or interest.

“Purchasers” means the original Purchasers of the Notes pursuant to the Note
Agreement, each of whom holds Notes on the date hereof.

“Requirement of Law” means, as to any Person, any law, treaty, rule, regulation,
guideline or determination of an arbitrator, a court or other governmental
authority, in each case applicable to or binding upon the Person or any of its
property or to which the Person or any of its property is subject.

“Required Holders” has the meaning specified for such term in the Note
Agreement.

“Restricted Cash Reserve Account” has the meaning specified in Section 6(a(ii).

“Secured Obligations” means (a) all obligations of the Borrower for the payment
of the principal amount of the Notes, accrued interest thereon,
Yield-Maintenance Amount, non-usage fees and all other fees and amounts due to
the holders of Notes pursuant to the terms of the Note Agreement and the other
Transaction Documents, (b) the “Guaranteed Obligations” as such term is defined
in the Guaranty Agreement, (c) the “Guaranteed Obligation” as such term is
defined in the Subsidiary Guaranty Agreement and (d) any and all other debts,
liabilities and reimbursement obligations, indemnity obligations and other
obligations for monetary amounts, fees, expenses, costs or other sums (including
reasonable attorneys’ fees and costs) chargeable to any Credit Party under or
pursuant to any of the Transaction Documents.

“Secured Parties” means the holders from time to time of the Notes.

“Securities Account” means and includes any “securities account,” as such term
is defined in Article 9 of the UCC, now or hereafter owned or acquired or
received by any Grantor or in which any Grantor now holds or hereafter acquires
or receives any right or interest.

“Subsidiary” has the meaning specified for such term in the Note Agreement.

“Subsidiary Guaranty Agreement” has the meaning specified for such term in the
Recitals hereto.

“Supporting Obligations” means and includes any “supporting obligations,” as
such term is defined in Article 9 of the UCC, now or hereafter owned or acquired
or received by any Grantor or in which any Grantor now holds or hereafter
acquires or receives any right or interest.

“Trademark License” means any agreement, whether in written or electronic form,
now or hereafter owned or acquired or received by any Grantor or in which any
Grantor now holds or hereafter acquires or receives any right or interest
granting any right to use or right not to be sued for the use of any Trademark
or Trademark registration.

“Trademarks” means any of the following now or hereafter owned or acquired or
received by any Grantor or in which any Grantor now holds or hereafter acquires
or receives any

 

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right or interest: (a) any trademark, service mark, trade name, corporate name,
business name, trade style, logo, other source or business identifier, print or
label on which any of the foregoing have appeared or appear, design or other
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including registration, recording and application in the
United States Patent and Trademark Office or in any similar office or agency of
the United States of America, any State thereof or any other country or other
foreign jurisdiction; and (b) any reissue, extension or renewal of any of the
foregoing.

“Transaction Documents” has the meaning specified for such term in the Note
Agreement.

“UCC” means the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York (and each reference in this Agreement to an
Article thereof shall refer to that Article as from time to time in effect;
provided, however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of the Collateral Agent’s
security interest in any collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code (including the Articles, Divisions,
Parts, Chapters, Sections and the like, as applicable, thereof) as in effect at
such time in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.

SECTION 2. Grant of Security Interest. As security for the full, complete and
final payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Secured Obligations and in order to induce
the Purchasers to enter into the Note Amendment and the Guaranty Amendment, and
make, extend and maintain financial accommodations to and for the benefit of the
Credit Parties upon the terms and subject to the conditions of the Transaction
Documents, each Grantor hereby mortgages, pledges and hypothecates to the
Collateral Agent, on behalf and for the benefit of the Secured Parties, and
hereby grants to the Collateral Agent, on behalf and for the benefit of the
Secured Parties, a security interest in and to all of such Grantor’s respective
right, title and interest in, to and under the Collateral, whether now existing
or hereafter arising or acquired.

SECTION 3. Assignment of Contracts; Rights of the Collateral Agent; Collection
of Accounts.

(a) In furtherance of Section 2 and the purposes of this Agreement, each Grantor
hereby mortgages, pledges and hypothecates to the Collateral Agent, on behalf
and for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent, on behalf and for the benefit of the Secured Parties, a security interest
in and to, all right, title and interest of such Grantor in and to, and all
benefits accruing to such Grantor pursuant to, each of the Contracts,
Instruments, Chattel Paper and Investment Property, provided, however, that,
unless an Event of Default shall have occurred and be continuing, such Grantor
shall have the right to exercise any of its rights under the Contracts,
Instruments, Chattel Paper or Investment Property to which it is a party or by
which it is bound (including the right to enter into possession of and use any
and all property leased or licensed to such Grantor, as lessee or licensee, the
right to use any or all of the

 

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facilities made available to such Grantor and the right to make all waivers and
agreements, to give all notices, consents and releases, to take all action upon
the happening of any default giving rise to a right in favor of such Grantor,
under any of the Contracts, Instruments, Chattel Paper or Investment Property to
which it is a party or by which it is bound, and to do any and all other things
whatsoever which such Grantor is or may become entitled to do under any of the
Contracts, Instruments, Chattel Paper or Investment Property to which it is a
party or by which it is bound); and provided, further, that during the
continuance of any Event of Default, the Collateral Agent shall have the right
(but not the obligation) to exercise any and all rights under the Contracts,
Instruments, Chattel Paper and Investment Property (including all rights set
forth in the parenthetical in the immediately preceding proviso and in
Section 3(d)).

(b) Notwithstanding anything contained in this Agreement to the contrary, each
Grantor expressly agrees that it shall not default under any of its Contracts,
Instruments, Chattel Paper or Investment Property, it shall observe and perform
all the conditions and obligations to be observed and performed by it thereunder
and that it shall perform all of its duties and obligations thereunder, all in
accordance with and pursuant to the terms and provisions of each such Contract,
Instrument, Chattel Paper or Investment Property unless and to the extent such
default(s) or other failure(s) could not, individually or in the aggregate, with
reasonable likelihood, be expected to have a Material Adverse Effect; provided,
however, that Grantor may suspend performance of its obligations under any such
Contract, Instrument, Chattel Paper or Investment Property in the event of a
material breach of such Contract, Instrument, Chattel Paper or Investment
Property by a third party. Neither the Collateral Agent nor any Secured Party
shall have any obligation or liability under any Contract, Instrument, Chattel
Paper or Investment Property by reason of or arising out of this Agreement or
the granting to the Collateral Agent of a security interest therein or the
receipt by the Collateral Agent or any Secured Party of any payment relating to
any Contract, Instrument, Chattel Paper or Investment Property pursuant hereto,
nor shall the Collateral Agent or any Secured Party be required or obligated in
any manner to perform or fulfill any of the obligations of any Grantor under or
pursuant to any Contract, Instrument, Chattel Paper or Investment Property, or
to make any payment, or to make any inquiry as to the nature or the sufficiency
of any payment received by it or the sufficiency of any performance by any party
under any Contract, Instrument, Chattel Paper or Investment Property, or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

(c) The Collateral Agent authorizes each Grantor to collect its Accounts;
provided that the Collateral Agent may, upon the occurrence and during the
continuation of any Event of Default and without notice, limit or terminate said
authority at any time. If required by the Collateral Agent at any time during
the continuation of any Event of Default, any Proceeds, when first collected by
any Grantor, received in payment of any such Account or in payment for any of
its Inventory or on account of any of its Contracts shall be promptly deposited
by such Grantor in precisely the form received (with all necessary endorsements)
in a special bank account maintained by the Collateral Agent subject to
withdrawal by the Collateral Agent only, as hereinafter provided, and until so
turned over shall be deemed to be held in trust by such Grantor for and as the
Collateral Agent’s property, on behalf and for the benefit of the Secured
Parties, and shall not be commingled with such Grantor’s other funds or
properties. Such Proceeds, when deposited, shall continue to be collateral
security for all of such Grantor’s

 

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Secured Obligations and shall not constitute payment thereof until applied as
hereinafter provided. Upon the occurrence and during the continuation of any
Event of Default, the Collateral Agent may, in its sole discretion, after
consultation with the Required Holders, apply all or a part of the funds on
deposit in said special account to the principal of or interest on, or both, in
respect of any of the Secured Obligations in accordance with the provisions of
Section 8(h), and any part of such funds which the Collateral Agent elects not
so to apply and deem not required as collateral security for the Secured
Obligations shall be paid over from time to time by the Collateral Agent to the
appropriate Grantor. If an Event of Default has occurred and is continuing, at
the request of the Collateral Agent, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the sale (or other disposition) and delivery of such Inventory and such Grantor
shall deliver all original and other documents evidencing and relating to, the
performance of labor or service which created such Accounts, including, without
limitation, all original orders, invoices and shipping receipts.

(d) The Collateral Agent may at any time, upon the occurrence and during the
continuation of any Event of Default, notify Account Debtors of such Grantor,
parties to the Contracts of such Grantor, obligors in respect of Instruments,
Chattel Paper and Investment Property of such Grantor that the Accounts and the
right, title and interest of such Grantor in and under such Contracts,
Instruments, Chattel Paper and Investment Property have been assigned as
collateral security to the Collateral Agent, on behalf and for the benefit of
the Secured Parties, and that payments shall be made directly to the Collateral
Agent pursuant to its written instructions. Upon the request of the Collateral
Agent, such Grantor shall so notify such Account Debtors, parties to such
Contracts and obligors in respect of such Instruments, Chattel Paper and
Investment Property. Upon the occurrence and during the continuation of an Event
of Default, the Collateral Agent may, in its name, or in the name of others
communicate with such Account Debtors, parties to such Contracts and Licenses
and obligors in respect of such Instruments, Chattel Paper and Investment
Property to verify with such parties, to the Collateral Agent’s satisfaction,
the existence, amount and terms of any such Accounts, Contracts, Licenses,
Instruments, Chattel Paper or Investment Property.

SECTION 4. Representations and Warranties. Each of the Grantors represents and
warrants to the Collateral Agent as of the date such Grantor becomes a party
hereto that:

(a) Such Grantor is the sole legal and equitable owner of, or, as to
Intellectual Property licensed from other Persons, licensee of, each item of the
Collateral in which it purports to grant a security interest hereunder, and such
Grantor has good, merchantable and insurable title or rights thereto free and
clear of any and all Liens, except for the Liens permitted under the Note
Documents.

(b) No effective security agreement, collateral control agreement, financing
statement, equivalent security or lien instrument or continuation statement
covering all or any part of the Collateral exists, except such as may have been
filed by such Grantor in favor of the Collateral Agent pursuant to this
Agreement or such as relate to the Liens expressly permitted under the Note
Documents.

(c) The security interest in the Collateral created hereunder in favor of the
Collateral Agent, on behalf and for the benefit of the Secured Parties,
constitutes a valid security

 

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interest in the Collateral securing the payment of the Secured Obligations. Upon
(i) the due filing of UCC financing statements naming the applicable Grantor as
“debtor”, naming the Collateral Agent as “secured party” and describing the
Collateral in the filing offices set forth on Schedule IA, and (ii) in the case
of the Collateral comprising Trademarks, Patents or Copyrights, in addition, the
due recordation of a “Notice of Grant of Security Interest in Intellectual
Property,” substantially in the form of Exhibit B, with respect to such
Trademarks or Patents, with the United States Patent and Trademark Office, and
with respect to Copyrights, with the United States Copyright Office, then the
security interest in the Collateral granted to the Collateral Agent, on behalf
and for the benefit of the Secured Parties, will, to the extent a security
interest in the Collateral may be perfected by filing UCC financing statements
and, in the case of the Collateral comprising Intellectual Property, in addition
to the filing of such UCC financing statements, by the recordation of the
“Notice of Grant of Security Interest in Intellectual Property” with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, constitute perfected security interests therein prior to all other
Liens (except for Liens expressly permitted under the Guaranty Agreement that
have priority by operation of law); provided, however, additional actions,
filings, recordings or registrations in the United States Patent and Trademark
Office and the United States Copyright Office may be required with respect to
the perfection of the Collateral Agent’s security interest in Intellectual
Property acquired by any Grantor after the date hereof.

(d) Such Grantor’s taxpayer and organizational identification numbers are, and
chief executive office, principal place of business, and the place where such
Grantor maintains its records concerning the Collateral are presently located at
the address(es), set forth on Schedule IB. If such Grantor is a corporation,
limited liability company, limited partnership, corporate trust or other
registered organization, the state (or if not a state, the other jurisdiction)
under whose law such registered organization was organized is set forth on
Schedule IC. The Collateral of such Grantor, other than Deposit Accounts,
Securities Accounts and Commodity Accounts, is presently located, within the
meaning of the UCC, at the address(es) further set forth for such Grantor on
Schedule ID. Such Grantor shall not change its taxpayer identification number or
such chief executive office, principal place of business or remove or cause to
be removed, the records concerning the Collateral from those premises without at
least thirty (30) days prior written notice to the Collateral Agent. In the
event that any Grantor shall change its chief executive office or principal
place of business (provided that the new location is leased to the Grantor),
then, concurrently with entering into the lease for the new location, such
Grantor shall furnish to the Collateral Agent, an executed and delivered access
agreement in favor of the Collateral Agent with respect to the new location, in
form and substance reasonably satisfactory to the Collateral Agent. Such Grantor
shall not change its jurisdiction of organization without the prior written
consent of the Collateral Agent.

(e) All Collateral of such Grantor comprising Chattel Paper, Instruments (in an
outstanding or stated principal amount in excess of $25,000) or Investment
Property comprising certificated securities is set forth for such Grantor on
Schedule II. All action necessary or desirable to protect and perfect such
security interest in each item set forth on Schedule II, including the delivery
of all originals thereof, duly indorsed in favor of the Collateral Agent, to the
Collateral Agent, has been duly taken. The security interest of the Collateral
Agent in each Grantor’s Collateral listed on Schedule II is prior in right and
interest to all other Liens (other than Liens expressly permitted under the
Guaranty Agreement that have priority by operation of law) and is enforceable as
such against creditors of and purchasers from such Grantor.

 

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(f) All federally registered Copyrights, Copyright Licenses, Patents, and
Trademarks owned, held or in which such Grantor otherwise has acquired or
received any rights or interest are listed on Schedule III. Such Grantor shall
promptly amend Schedule III from time to time to reflect any material additions
to or deletions from this list. Except as set forth on Schedule III, none of the
Patents, Trademarks or Copyrights has been licensed to any third party except in
the ordinary course of publishing newspapers and related products.

(g) The name and address of each depository institution at which such Grantor
maintains any Deposit Account and the account number and account name of each
such Deposit Account is listed on Schedule IV-A. The name and address of each
securities intermediary or commodity intermediary at which such Grantor
maintains any Securities Account or Commodity Account and the account number and
account name is listed on Schedule IV-A. Such Grantor agrees to amend Schedule
IV-A from time to time within five (5) Business Days after opening any
additional Deposit Account, Securities Account or Commodity Account, or closing
or changing the account name or number on any existing Deposit Account,
Securities Account, or Commodity Account.

(h) All motor vehicles and other Equipment subject to a Certificate of Title
owned, held or in which such Grantor otherwise has acquired or received any
rights or interest are listed on Schedule V. Such Grantor shall promptly amend
Schedule V from time to time to reflect any additions to or deletions from this
list.

(i) Such Grantor has no Commercial Tort Claims with a stated or potential claim
in excess of $100,000 other than those set forth on Schedule VI hereto. Such
Grantor shall promptly amend Schedule VI from time to time to reflect any
additions to or deletions from this list.

(j) There are no Accounts or Chattel Paper of such Grantor which arise out of a
contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, except for those listed on Schedule VII
hereto. Such Grantor shall promptly amend Schedule VII from time to time (and,
in any event, in accordance with Section 5(n) hereof) to reflect any additions
to or deletions from this list.

(k) Such Grantor is the sole holder of record and the sole beneficial owner of
all certificated securities and uncertificated securities pledged to the
Collateral Agent by such Grantor under Section 2 of this Agreement, free and
clear of any adverse claim, as defined in Section 8102(a)(1) of the UCC, except
for Liens created in favor of the Collateral Agent by this Agreement or as
expressly permitted under the Note Documents.

(l) None of the Investment Property of such Grantor has been transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such transfer may be subject.

 

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SECTION 5. Covenants. Each Grantor covenants and agrees with the Collateral
Agent that so long as any of the Secured Obligations shall remain unpaid:

(a) Further Assurances; Pledge of Instruments. At any time and from time to
time, upon the written request of the Collateral Agent, and at the sole expense
of such Grantor, such Grantor shall promptly and duly execute and deliver any
and all such further instruments and documents and take such further action as
the Collateral Agent may reasonably deem necessary or desirable to obtain the
full benefits of this Agreement and of the rights and powers herein granted,
including (i) using its best efforts to secure all consents and approvals
necessary or appropriate for the grant of a security interest to the Collateral
Agent in any Contract held by such Grantor or in which such Grantor has any
right or interest not heretofore assigned, (ii) executing, delivering and
causing to be filed any financing or continuation statements under the UCC with
respect to the security interests granted hereby, (iii) filing or cooperating
with the Collateral Agent in filing any forms or other documents required to be
recorded with the United States Patent and Trademark Office, United States
Copyright Office, or any actions, filings, recordings or registrations in any
foreign jurisdiction or under any intentional treaty, required to secured or
protect the Collateral Agent’s security interest in such Grantor’s Collateral,
(iv) transferring such Grantor’s Collateral to the Collateral Agent’s possession
(if a security interest in such Collateral can be perfected by possession),
(v) executing and delivering and causing the applicable depository institution,
securities intermediary, commodity intermediary or issuer or nominated party
under a letter of credit to execute and deliver a collateral control agreement
in form and substance reasonably acceptable to the Collateral Agent with respect
to each Deposit Account; provided however, a collateral control agreement shall
not be required for any individual Deposit Account with an amount less than
$15,000 at all times; notwithstanding the foregoing, in no event shall the
aggregate amount in all Deposit Accounts not subject to collateral control
agreement exceed $100,000 at any time), Securities Account, Commodity Account or
Letter-of-Credit Right in or to which such Grantor has any right or interest in
order to perfect the security interest created hereunder in favor of the
Collateral Agent (including giving the Collateral Agent “control” over such
Collateral within the meaning of the applicable provisions of Article 8 and
Article 9 of the UCC), but excluding the Deposit Accounts and Securities
Accounts identified on Schedule IV-B, which are used exclusively for employee
payroll or employee trust accounts, (vi) executing and delivering or causing to
be delivered written notice to insurers of the Collateral Agent’s security
interest in, or claim in or under, any policy of insurance (including unearned
premiums), (vii) using its best efforts to obtain acknowledgments from bailees
having possession of any Collateral and waivers of liens from landlords and
mortgagees of any location where any of the Collateral in an aggregate amount in
excess of $250,000 may from time to time be stored or located, and
(viii) placing the interest of the Collateral Agent as lienholder (or other
similar designation) on the Certificate of Title of any motor vehicles or other
Equipment constituting Collateral owned by such Grantor which is covered by a
Certificate of Title and delivering the original thereof to the Collateral Agent
or its designated agent), it being understood that the Grantors shall not be
required to comply with the foregoing requirements of this clause (viii) prior
to an Event of Default unless the aggregate book value of motor vehicles and
such Equipment exceeds $750,000 (in which case, and in the case of an Event of
Default, all Certificate of Titles will be required to be delivered with the
Collateral Agent’s Lien properly noted thereon). Such Grantor also hereby
authorizes the Collateral Agent and each Secured Party to file any such
financing or continuation statement, and any amendments thereto, all without the
signature of such Grantor. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law, and without

 

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limiting the generality of the foregoing, the Collateral Agent is expressly
authorized to use a collateral description that encompasses “all assets” or “all
personal property” or words of similar import in any such financing statement.
If any amount payable under or in connection with any of the Collateral is or
shall become evidenced by any Instrument, such Instrument, other than checks and
notes received in the ordinary course of business and any Instrument in the
outstanding or stated amount of less than $25,000, shall be duly endorsed in a
manner reasonably satisfactory to the Collateral Agent and delivered to the
Collateral Agent promptly and in any event within five (5) Business Days of such
Grantor’s receipt thereof. If at any time any Grantor shall hold any Investment
Property comprised of certificated or uncertificated securities, such Grantor
shall promptly, and in any event within five (5) Business Days of such Grantor’s
acquisition or receipt thereof, pledge such Investment Property to the
Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms
of a pledge agreement in form and substance satisfactory to the Collateral
Agent.

(b) Maintenance of Records. Such Grantor shall keep and maintain, at its own
cost and expense, satisfactory and complete records of its Collateral, including
a record of all payments received and all credits granted with respect to such
Collateral and all other dealings with such Collateral. At the Collateral
Agent’s reasonable request, such Grantor shall mark its books and records
pertaining to its Collateral with a legend, approved by the Collateral Agent in
its reasonable discretion, to identify and evidence this Agreement and the
security interests granted hereby.

(c) Indemnification. In any suit, proceeding or action brought by the Collateral
Agent or any Secured Party relating to any of such Grantor’s Accounts, Chattel
Papers, Deposit Accounts, General Intangibles (including any Contracts),
Instruments, Letter-of-Credit Rights or Investment Properties for any sum owing
thereunder, or to enforce any provision of any of such Grantor’s Accounts,
Chattel Papers, Deposit Accounts, General Intangibles (including any Contracts),
Instruments, Letter-of-Credit Rights or Investment Properties, such Grantor
shall save, indemnify and keep the Collateral Agent, each Secured Party, and
each of their respective officers, directors, employees, agents, advisors, and
representatives (collectively, the “Indemnified Persons”) harmless from and
against any and all liabilities, expenses, losses or damages suffered by reason
of any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder arising out of a breach by such Grantor of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, or in favor of, such obligor or its successors
from such Grantor, and all such obligations of such Grantor shall be and remain
enforceable against and only against such Grantor and shall not be enforceable
against any Indemnified Person. Each Grantor hereby further shall save,
indemnify and keep each Indemnified Person harmless from, any and all claims,
liabilities, expenses, losses or damages arising out of, resulting from, or
otherwise related to the subject matter of this Agreement, including but not
limited to any claims, liabilities, expenses, losses or damages arising out of
or resulting from (a) the failure by such Grantor to perform any obligations or
undertakings required to be performed by such Grantor under or in connection
with the Collateral (including the failure of any warranty or representation
(express or implied) in respect of the sale of any Inventory), (b) any failure
by such Grantor, in connection with any of the Collateral, to comply with any
applicable Requirement of Law, or (c) any bodily injury, death or property
damage occurring in connection with the use, sale or other disposition of the
Collateral; provided that such Grantor shall not be liable to any Indemnified
Person pursuant to this Section 5(c) solely to the extent any such liability,
expense, loss or damage arises from such Indemnified Person’s gross negligence
or willful misconduct.

 

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(d) Limitation on Liens on Collateral. Such Grantor shall not create, permit or
suffer to exist, and shall defend its Collateral against and take such other
action as is necessary to remove, any Lien on such Collateral, except for Liens
expressly permitted under the Note Documents. Such Grantor shall further defend
the right, title and interest of the Collateral Agent in and to any of such
Grantor’s rights under the Collateral and in and to the Proceeds thereof against
the claims and demands of all Persons whomsoever.

(e) Limitations on Modifications of Accounts, Etc. Upon the occurrence and
during the continuation of any Event of Default, such Grantor shall not, without
the Collateral Agent’s prior written consent, grant any extension of the time of
payment of any Account, Chattel Paper or Instrument or amounts due under any
Contract, Deposit Account, Letter-of-Credit Right or Investment Property,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof, or allow
any credit or discount whatsoever thereon other than trade discounts granted in
the ordinary course of business of such Grantor.

(f) Maintenance of Insurance. Such Grantor shall maintain, with financially
sound and reputable companies, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance, if adequate reserves are maintained with respect thereto) as
is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated. In addition, such Grantor
shall maintain, with financially sound and reputable companies, insurance
policies insuring (a) its Equipment, Fixtures and Inventory against loss by
fire, explosion, theft and such other casualties as are usually insured against
by companies engaged in the same or similar businesses, and reasonably
satisfactory to the Required Holders, and (b) against liability for personal
injury and property damage relating to such Equipment, Fixtures and Inventory,
and reasonably satisfactory to the Required Holders. The Grantor, at its
expense, shall obtain a loss payable endorsement to each policy of property
insurance in favor of the Collateral Agent for the benefit of the Secured
Parties and each policy of liability insurance shall name the Collateral Agent
for the benefit of the Secured Parties as an additional insured. Each Grantor
shall, if so requested by the Collateral Agent, deliver to the Collateral Agent,
as often as the Collateral Agent may reasonably request, a report of a reputable
insurance broker reasonably satisfactory to the Collateral Agent with respect to
the insurance on its Equipment, Fixtures and Inventory. Within 60 days of the
date hereof, all policies of insurance required to be maintained pursuant to
this Section 5(f) shall (i) contain a clause which provides that the Collateral
Agent’s and the Secured Parties’ interests under the policy shall not be
invalidated by any act or omission to act of, or any breach of warranty by, the
insured, or by any change in the title, ownership or possession of the insured
property, or by the use of the property for purposes more hazardous than is
permitted in the policy; and (ii) provide that, as to the interests of the
Collateral Agent under such policies, no cancellation, reduction in amount or
change in coverage thereof shall be effective until at least 30 days after
receipt by the Collateral Agent of written notice thereof.

(g) [Reserved]

 

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(h) Limitations on Disposition. Such Grantor shall not sell, lease, license,
transfer or otherwise dispose of any of such Collateral, or attempt or contract
to do so, except as permitted by the Note Documents.

(i) Further Identification of Collateral. Such Grantor shall, if so requested by
the Collateral Agent, furnish to the Collateral Agent, as often as the
Collateral Agent shall reasonably request, statements and schedules further
identifying and describing its Collateral and such other reports in connection
with such Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.

(j) Notices. Such Grantor shall advise the Collateral Agent promptly upon
obtaining knowledge thereof, in reasonable detail, of (a) any material Lien,
other than Liens expressly permitted under the Note Documents, attaching to or
asserted against any of its Collateral, (b) the occurrence of any other event
which could have a Material Adverse Effect with respect to the Collateral or on
the security interest created hereunder, and (c) the acquisition of any
Commercial Tort Claim and grant to the Collateral Agent, for the benefit of the
Secured Parties, of a security interest therein and in the proceeds thereof.

(k) Right of Inspection and Audit. Such Grantor shall permit the Collateral
Agent and the Secured Parties such rights of visitation, inspection and audit of
the Collateral as provided in the Note Documents or any other Transaction
Document.

(l) Maintenance of Properties. Such Grantor shall, and shall cause each of its
Subsidiaries to, (i) maintain and keep, or cause to be maintained and kept,
their respective properties, assets and facilities, including its Equipment and
Fixtures in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, and (ii) maintain and preserve all material
rights, privileges and franchises that such Grantor or its Subsidiaries now
have, in each case, except to the extent that the failure to do so would not
reasonably be expected to have a Material Adverse Effect.

(m) Covenants Regarding Intellectual Property.

(i) Such Grantor shall notify the Collateral Agent promptly if (A) it knows or
has reason to know that any application or registration relating to any Patent
or Trademark of such Grantor which is material to the conduct of such Grantor’s
business may become abandoned, (B) if a terminal disclaimer is filed with
respect to any Patent in the United States Patent and Trademark Office, or
(C) of any other adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office, or any
court) regarding such Grantor’s ownership or license of any Copyright, Patent or
Trademark which is material to the conduct of such Grantor’s business, its right
to register the same, or to keep and maintain the same.

(ii) Such Grantor shall take all commercially reasonable steps necessary (if any
be required) to prevent any misuse, infringement, invalidation,
misappropriation, unauthorized use or abandonment of its Copyrights, Patents,
Trademarks or

 

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other Intellectual Property, whether owned or licensed. Such Grantor’s efforts
pursuant to this Section 5(m) shall include, but not be limited to:
(A) establishing prudent security measures and procedures governing access to,
and use of, property protected by such Copyrights, Trademarks or Patents or of
such Intellectual Property owned or licensed by such Grantor or developed by any
Person on behalf of such Grantor; (B) establishing and maintaining in force any
agreements with employees and consultants or any written terms of employment, as
are customarily used in such Grantor’s industry for the protection of such
Intellectual Property; and (C) vigorous enforcement of such Grantor’s rights in
any such Intellectual Property.

(iii) In no event shall such Grantor, either itself or through any agent,
employee, licensee or designee, file an application for the registration of any
Patent or Trademark with the United States Patent and Trademark Office, any
Copyright with the United States Copyright Office, or any similar office or
agency in any other country or any political subdivision thereof unless it
promptly informs the Collateral Agent and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents, and papers
as the Collateral Agent may request to evidence the Collateral Agent’s security
interest in such Copyright, Patent or Trademark, including, with respect to
Trademarks, the goodwill of such Grantor, relating thereto or represented
thereby.

(iv) Such Grantor shall take all reasonable and necessary action to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain the registration of each of the Copyrights, Patents and Trademarks of
such Grantor which is material to the conduct of such Grantor’s business,
including the filing of applications for renewal, affidavits of use, affidavits
of noncontestability and opposition and interference and cancellation
proceedings.

(v) In the event that any Copyright, Patent or Trademark of such Grantor is
infringed, misappropriated or diluted by a third party, such Grantor shall
notify the Collateral Agent promptly after such Grantor learns thereof and
shall, unless such Grantor shall reasonably determine that such Copyright,
Patent or Trademark is not material to the conduct of such Grantor’s business,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution or take such
other actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Copyright, Patent or Trademark.

(vi) Such Grantor covenants and agrees that in the event any Patent is or
becomes subject to a terminal disclaimer, the security interest granted in this
Agreement shall extend to the Patent necessitating the disclaimer and such
Patent shall not be sold, transferred or otherwise alienated without the prior
written consent of the Collateral Agent.

(n) Covenants Regarding Federal Government Contracts. If any Account or Chattel
Paper of any Grantor arises out of a contract or contracts with the United
States of America or any department, agency, or instrumentality thereof, such
Grantor shall (i) promptly notify the Collateral Agent thereof in writing, and
execute and deliver in connection therewith (A) a collateral assignment of
claims in favor of the Collateral Agent, and (B) a notice of collateral
assignment of claims directed to the appropriate federal government agencies and
agents thereof as required under applicable law, each in form and substance
reasonably

 

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satisfactory to the Collateral Agent, (ii) promptly take any other steps
reasonably required by the Collateral Agent in order to ensure that all moneys
due or to become due under such contract or contracts shall be collaterally
assigned to the Collateral Agent, for the benefit of the Secured Parties, and
notice thereof given under the Assignment of Claims Act of 1940, as amended (31
U.S.C. 3727; 41 U.S.C. 15), or other applicable law, and (iii) promptly update
Schedule VII hereto and deliver a copy of such revised schedule to the
Collateral Agent, together with copies of all related contracts evidencing such
Accounts and/or Chattel Paper. Notwithstanding the foregoing, the Grantors shall
not be required to comply with the foregoing in connection with purchase orders
for the publication of notices so long as the aggregate amount owing under all
of such purchase orders does not at any time exceed $100,000.

SECTION 6. Designated Accounts.

(a) Creation of the Designated Accounts.

The Collateral Agent hereby establishes the following special, segregated and
irrevocable cash collateral accounts (the “Designated Accounts”) which shall be
maintained at all times until the termination of this Agreement:

(i) an account (the “Excess Cash Flow Sweep Account”) with account number
506217, pursuant to which amounts in respect of Excess Cash Flow will be
deposited in accordance with paragraph 4B of the Note Agreement, Section 4.9(i)
of the Guaranty Agreement and Section 6(b) hereof;

(ii) an account (the “Restricted Cash Reserve Account”) with account number
555041, pursuant to which amounts will be deposited in accordance with paragraph
4.9(ii) of the Guaranty Agreement and Section 6(c) hereof; and

(iii) an account (the “Asset Sale Proceeds Reserve Account”) with account number
555042, pursuant to which Asset Sale Proceeds will be deposited in accordance
with paragraph 4D of the Note Agreement, Section 4.9(iii) of the Guaranty
Agreement and Section 6(d) hereof.

All amounts from time to time in any Designated Account shall be held in the
name of the Collateral Agent for the benefit of the Secured Parties and the
Grantors. All amounts at any time in any of the Designated Accounts shall
constitute a part of the Collateral and shall not constitute payment of any
obligation owing to the Collateral Agent or the Secured Parties until applied as
hereinafter provided. Each deposit to a Designated Account shall specifically
identify the Designated Account to which such deposit shall be credited.

(b) Deposits to and Disbursements from Excess Cash Flow Sweep Account.

(i) Deposits to Excess Cash Flow Sweep Account. The Grantors shall deposit, or
cause to be deposited, with the Collateral Agent for further deposit into the
Excess Cash Flow Sweep Account on the 45th day after the last day of each fiscal
quarter of the Company (commencing with the fiscal quarter ending closest to
March 31, 2009 through and including the last day of the fiscal quarter ending
closest to December 31, 2011) the Excess Cash Flow Deposit Amount, if any, for
such fiscal quarter, which amount shall be as set forth in the certificate
delivered to the holders of Notes and the Collateral Agent pursuant to paragraph
4B of the Note Agreement.

 

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(ii) Disbursements. So long as no Event of Default has occurred and is
continuing, the Collateral Agent, on the 45th day after the last day of each
fiscal quarter of the Company (commencing with the fiscal quarter ending closest
to March 31, 2009 through and including the last day of the fiscal quarter
ending closest to December 31, 2011), shall disburse funds from the Excess Cash
Flow Sweep Account to the Secured Parties (in the manner and in the amounts set
forth in a written request of the Company or the Borrower delivered to the
Collateral Agent at least two Business Days prior to such 45th day) to pay the
principal of the Notes as provided in paragraph 4B of the Note Agreement. If an
Event of Default shall exist, such funds shall be disbursed at the direction of
the Required Holders.

(c) Deposits to and Disbursements from Restricted Cash Reserve Account.

(i) Deposits. The Grantors shall on the date hereof deposit $9,000,000 into the
Restricted Cash Reserve Account. The Grantors shall further deposit, or cause to
be deposited, with the Collateral Agent on the 45th day after the last day of
each fiscal quarter of the Company (commencing with the fiscal quarter ending
closest to March 31, 2009 through and including the last day of the fiscal
quarter ending closest to December 31, 2011) the amount required by
Section 4.9(ii) of the Guaranty Agreement, which cash shall be deposited in the
Restricted Cash Reserve Account.

(ii) Disbursements. So long as no Event of Default has occurred and is
continuing, the Collateral Agent shall within two Business Days of its receipt
of a written request of the Company or the Borrower, disburse funds in the
Restricted Cash Reserve Account, (i) (x) to the Secured Parties for the payment
of principal and interest due and owing on the Notes solely to the extent that
the Company and its Subsidiaries do not have sufficient cash on hand on such
date to make such payments, as certified in writing by the Company or the
Borrower in such written request or (y) if prior to April 28, 2009, to the
Company or the Borrower for working capital and other general corporate
purposes, in each case, in the manner and in the amounts set forth in such
written request and (ii) shall disburse all funds in excess of $4,500,000 in the
Restricted Cash Reserve Account on October 28, 2010 to the Secured Parties. If
an Event of Default shall exist such funds shall be disbursed solely at the
direction of the Required Holders. Notwithstanding the foregoing, the Collateral
Agent, after receipt of the deposit to the Restricted Cash Reserve Account on
the date hereof referenced above, shall disburse $4,700,000 of such funds on the
date hereof to the Persons, in the amounts and pursuant to the wire instructions
all as set forth in a written request of the Company, a copy of which is
attached hereto as Schedule VII.

(d) Deposits to and Disbursements from Asset Proceeds Reserve Account.

(i) Deposits. The Grantors shall deposit, or cause to be deposited, with the
Collateral Agent for further deposit in the Asset Sale Proceeds Reserve Account
all Asset Sale Proceeds immediately upon receipt thereof by any Grantor.

 

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(ii) Disbursements. So long as no Event of Default has occurred and is
continuing, the Collateral Agent shall, within two Business Days of its receipt
of a written request of the Company or the Borrower, disburse funds in the Asset
Sale Proceeds Reserve Account (in the amount and in the manner set forth in such
written request), to the Secured Parties for the payment of principal and
interest due and owing on the Notes. If an Event of Default shall exist such
funds shall be disbursed solely at the direction of the Required Holders.

(e) Investment of Funds in Deposited Accounts.

The Collateral Agent shall invest any cash held in any Designated Account from
time to time in Permitted Investments prior to an Event of Default at the
direction of the Company and thereafter at the direction of the Required
Holders. In the event the Company or the Required Holders, as the case may be,
fail to direct the investment of funds held by the Collateral Agent, the
Collateral Agent shall invest such funds in the investment described in clause
(vi) of the definition of Permitted Investments. Any income or gain realized as
a result of any such investment shall be held as part of the applicable
Deposited Account and reinvested as provided in this Agreement until disbursed
in compliance with this. Section 6. For purposes of any income tax payable on
account of any such income or gain, such income or gain shall be for the account
of the Company. The Collateral Agent shall have no liability for any loss
resulting from any such investment other than by reason of its willful
misconduct or gross negligence. Any such investment may be, but is not required
to be, liquidated by the Collateral Agent, in a manner intended to minimize any
loss of principal prior to maturity, whenever necessary to make any deposit,
distribution or transfer required by this Agreement. The Collateral Agent shall
not be liable to any Person for any investment loss resulting from any such
liquidation of investments.

SECTION 7. The Collateral Agent’s Appointment as Attorney-in-Fact.

(a) Subject to Section 7(b) below, each Grantor hereby irrevocably constitutes
and appoints the Collateral Agent and any officer, co-agent or sub-agent thereof
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such Grantor and
in the name of such Grantor or in its own name, from time to time at the
Collateral Agent’s discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, hereby gives the Collateral Agent the power and right (but not
the obligation), on behalf of such Grantor, without notice to or assent by such
Grantor to do the following:

(i) to ask, demand, collect, receive and give acquittances and receipts for any
and all monies due or to become due under any of such Grantor’s Collateral and,
in the name of such Grantor in its own name or otherwise to take possession of,
endorse and collect any checks, drafts, notes, acceptances or other Instruments
for the payment of monies due under any such Collateral and to file any claim or
to take or commence any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such monies due under any such Collateral whenever
payable;

 

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(ii) to pay or discharge any Liens, including any tax lien, levied or placed on
or threatened against such Collateral, to effect any repairs or any insurance
called for by the terms of this Agreement and to pay all or any part of the
premiums therefor and the costs thereof, which actions shall be on behalf and
for the benefit of the Secured Parties and the Collateral Agent and not such
Grantor; and

(iii) to (A) direct any Person liable for any payment under or in respect of any
of such Collateral to make payment of any and all monies due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct, (B) receive payment of any and all monies, claims and other amounts due
or to become due at any time arising out of or in respect of any such
Collateral, (C) sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other Instruments and
Documents constituting or relating to such Collateral, (D) commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect such Collateral or any part thereof and to
enforce any other right in respect of any such Collateral, (E) defend any suit,
action or proceeding brought against such Grantor with respect to any such
Collateral, (F) settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, give such discharges or releases
as the Collateral Agent may deem appropriate, (G) license or, to the extent
permitted by an applicable license, sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any Patent,
Copyright, Trademark or other Intellectual Property throughout the world for
such term or terms, on such conditions and in such manner as the Collateral
Agent shall in its sole discretion determine, and (H) sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of such Collateral
as fully and completely as though the Collateral Agent were the absolute owner
thereof for all purposes, and to do, at the Collateral Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Collateral Agent may reasonably deem necessary to protect, preserve or
realize upon such Collateral and the Collateral Agent’s security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

(b) The Collateral Agent agrees that, except upon the occurrence and during the
continuation of an Event of Default, it shall not exercise the power of attorney
or any rights granted to the Collateral Agent, on behalf and for the benefit of
the Secured Parties, pursuant to this Section 7 Each Grantor hereby ratifies, to
the extent permitted by law, all that said attorney shall lawfully do or cause
to be done by virtue hereof. The power of attorney granted pursuant to this
Section 7 is a power coupled with an interest and shall be irrevocable until the
Secured Obligations are finally and completely paid and performed in full;
provided that the foregoing power of attorney shall terminate upon the full,
complete and final payment and performance of the Secured Obligations and the
termination of all commitments and obligations of the Secured Parties under the
Transaction Documents.

(c) The powers conferred on the Collateral Agent hereunder are solely to protect
the Collateral Agent’s and each Secured Party’s interests in the Collateral and
shall not impose any duty upon the Collateral Agent to exercise any such powers.
The Collateral Agent shall have no duty as to any Collateral, including any
responsibility for (i) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral, or

 

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(ii) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Investment
Property, whether or not the Collateral Agent has or is deemed to have knowledge
of such matters. Without limiting the generality of the preceding sentence, the
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral if it takes such action for
that purpose as the applicable Grantor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default. Failure of the Collateral Agent to comply with any such request at any
time shall not in itself be deemed a failure to exercise reasonable care. No
failure of the Collateral Agent to do any act not so requested shall be deemed a
failure to act reasonably. The Collateral Agent shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers and
neither it nor any of its officers, directors, employees, agents or
representatives shall be responsible to any Grantor for any act or failure to
act.

(d) Each Grantor also authorizes the Collateral Agent, on behalf of itself and
the Secured Parties, at any time and from time to time upon the occurrence and
during the continuation of any Event of Default, to (i) communicate in its own
name with any party to any Contract of such Grantor with regard to the
assignment of the right, title and interest of such Grantor in and under the
Contracts hereunder and other matters relating thereto, and (ii) execute, in
connection with the sale of such Grantor’s Collateral provided for in Section 7,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to such Collateral.

(e) If any Grantor fails to perform or comply with any of its agreements
contained herein and the Collateral Agent or any Secured Party, as provided for
by the terms of this Agreement, shall perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable expenses,
including reasonable attorneys’ fees and expenses, of the Collateral Agent or
such Secured Party, shall be payable by such Grantor to the Collateral Agent
within (3) three days of written demand and shall constitute Secured Obligations
secured hereby.

SECTION 8. Rights and Remedies Upon Default. It shall be an “Event of Default”
hereunder if any Event of Default (as defined in the Note Agreement or the
Guaranty Agreement) shall occur. If any Event of Default shall have occurred and
be continuing, the Collateral Agent shall have the following rights and remedies
as set forth in this Section 8:

(a) If any Event of Default shall occur and be continuing, the Collateral Agent
may exercise in addition to all other rights and remedies granted to it under
this Agreement, the Note Agreement, the Guaranty Agreement, the other
Transaction Documents and under any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the UCC and other applicable law. Without limiting the
generality of the foregoing, each Grantor expressly agrees that in any such
event the Collateral Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon such Grantor or any other Person
(all and each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the UCC and other applicable law), may
(i) reclaim, take possession, recover, store, maintain, finish, repair, prepare
for sale or lease, shop, advertise for sale or lease and sell or lease (in the
manner provided herein) the

 

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Collateral, and in connection with the liquidation of the Collateral and
collection of the accounts receivable pledged as Collateral, use any Trademark,
Copyright, or process used or owned by such Grantor, and (ii) forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof, and
may forthwith sell, lease, assign, give an option or options to purchase or sell
or otherwise dispose of and deliver said Collateral (or contract to do so), or
any part thereof, in one or more parcels at public or private sale or sales, at
any exchange or broker’s board or at any of the Collateral Agent’s offices or
elsewhere at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. To the extent any Grantor
has the right to do so, such Grantor authorizes the Collateral Agent, on the
terms set forth in this Section 8, to enter the premises where the Collateral is
located, to take possession of the Collateral, or any part of it, and to pay,
purchase, contact, or compromise any encumbrance, charge, or lien which, in the
opinion of the Collateral Agent, appears to be prior or superior to its security
interest. The Collateral Agent or any Secured Party shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of said Collateral
so sold, free of any right or equity of redemption, which equity of redemption
each Grantor hereby releases. Each Grantor further agrees, at the Collateral
Agent’s request, to assemble its Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at such Grantor’s premises or elsewhere. The Collateral Agent and the
Secured Parties shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale as provided in Section 8(h), below,
with each Grantor remaining jointly and severally liable for any deficiency
remaining unpaid after such application, and only after so paying over such net
proceeds and after the payment by the Collateral Agent of any other amount
required by any provision of law, need the Collateral Agent account for the
surplus, if any, to any Grantor. To the maximum extent permitted by applicable
law, each Grantor waives all claims, damages, and demands against the Collateral
Agent or any Secured Party arising out of the repossession, retention or sale of
the Collateral. Each Grantor agrees that the Collateral Agent need not give more
than ten (10) days’ notice (which notification shall be deemed given if sent in
accordance with Section 12(a)) of the time and place of any public sale or of
the time after which a private sale may take place and that such notice is
reasonable notification of such matters. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or disposition of its Collateral are
insufficient to pay all amounts to which the Collateral Agent and the Secured
Parties are entitled from such Grantor, such Grantor also being liable for the
attorneys’ fees and expenses of any attorneys employed by the Collateral Agent
or any Secured Party to collect such deficiency.

(b) As to any Collateral constituting certificated securities or uncertificated
securities, if, at any time when the Collateral Agent shall determine to
exercise its right to sell the whole or any part of such Collateral hereunder,
such Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as
amended (as so amended the “Act”), the Collateral Agent may, in its discretion
(subject only to applicable Requirements of Law), sell such Collateral or part
thereof by private sale in such manner and under such circumstances as the
Collateral Agent may deem desirable, but subject to the other requirements of
this Section 8(b), and shall not be required to effect such registration or
cause the same to be effected. Without limiting the generality of the foregoing,
in any such event the Collateral Agent may, in its sole discretion: (i) in
accordance with applicable securities laws, proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Collateral or part thereof could be or shall have been filed under the

 

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Act; (ii) approach and negotiate with a single possible purchaser to effect such
sale; and (iii) restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Collateral or part thereof. In
addition to a private sale as provided above in this Section 8(b), if any of
such Collateral shall not be freely distributable to the public without
registration under the Act at the time of any proposed sale hereunder, then the
Collateral Agent shall not be required to effect such registration or cause the
same to be effected but may, in its sole discretion (subject only to applicable
requirements of law), require that any sale hereunder (including a sale at
auction) be conducted subject to such restrictions as the Collateral Agent may,
in its sole discretion, deem desirable in order that such sale (notwithstanding
any failure so to register) may be effected in compliance with the Bankruptcy
Code and other laws affecting the enforcement of creditors’ rights and the Act
and all applicable state securities laws.

(c) Each Grantor agrees that in any sale of any of such Collateral, whether at
a foreclosure sale or otherwise, the Collateral Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to Persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental authority, and each Grantor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Collateral Agent nor any Secured Party be liable nor accountable to such Grantor
for any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

(d) Each Grantor also agrees to pay all fees, costs, and reasonable expenses of
the Collateral Agent or any of the Secured Parties, including reasonable
attorneys’ fees and expenses, incurred in connection with the enforcement of any
of its rights and remedies hereunder.

(e) Upon the Collateral Agent’s request, each Grantor agrees that it will
promptly execute assignments of its entire right, title and interest in and to
each its Patents, Trademarks, Copyrights, and Licenses. Such assignments shall
be in form and content which is recordable in the United States Patent and
Trademark Office or Copyright Office, or any similar office or agency in any
other country or any political subdivision thereof, as applicable, and otherwise
reasonably acceptable to the Collateral Agent.

(f) Except as otherwise expressly permitted herein, each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Agreement or any Collateral.

(g) Each Grantor agrees that a breach of any covenants contained in this
Section 8 will cause irreparable injury to the Collateral Agent, on behalf of
itself and the Secured Parties, that in such event the Collateral Agent and the
Secured Parties would have no adequate remedy

 

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at law in respect of such breach and, as a consequence, agrees that in such
event each and every covenant contained in this Section 8 shall be specifically
enforceable against such Grantor, and each Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that the Secured Obligations are not then due and
payable.

(h) The Proceeds of any sale, disposition or other realization upon all or any
part of the Collateral shall be distributed by the Collateral Agent in the
following order of priorities:

First, to the Collateral Agent in an amount sufficient to pay in full the
reasonable costs of the Collateral Agent in connection with such sale,
disposition or other realization, including all fees, costs, expenses,
liabilities and advances incurred or made by the Collateral Agent in connection
therewith, including reasonable attorneys’ fees and expenses;

Second, to the Secured Parties in an amount sufficient to pay in full the
reasonable costs of the Secured Parties in connection with such sale,
disposition or other realization, including all fees, costs, expenses,
liabilities and advances incurred or made by the Secured Parties in connection
therewith, including reasonable attorneys’ fees and expenses;

Third, to the Secured Parties in an amount equal to the then unpaid principal of
and accrued interest, Breakage Cost Indemnity, non-usage and all other fees and
charges payable on the Secured Obligations;

Fourth, to the Secured Parties in an amount equal to any other Secured
Obligations under any of the Transaction Documents which are then unpaid; and

Finally, upon payment in full of all of the Secured Obligations, to the Grantors
or their representatives according to their interests or as a court of competent
jurisdiction may direct.

SECTION 9. Grant of License to Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise its rights and remedies under
Section 8, at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to such Grantor) to use, license or sublicense any
Copyright, Patent or Trademark, and to exercise any rights held by such Grantor
under any License, now owned or hereafter acquired by such Grantor or in which
such Grantor now holds or hereafter acquires any interest, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
and automatic machinery software and programs used for the compilation or
printout thereof, subject to any applicable restrictions or limitations
contained in such License.

SECTION 10. Limitation on the Collateral Agent’s Duty in Respect of Collateral.
The Collateral Agent shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it takes such action as
the applicable Grantor requests in

 

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writing other than upon the occurrence and during the continuance of any Event
of Default, but failure of the Collateral Agent to comply with any such request
shall not in itself be deemed a failure to act reasonably, and no failure of the
Collateral Agent to do any act not so requested shall be deemed a failure to act
reasonably.

SECTION 11. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective against each Grantor should any petition be filed
by or against such Grantor for liquidation or reorganization, should such
Grantor become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
such Grantor’s property and assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment or performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
avoided, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is avoided, rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so avoided, rescinded, reduced, restored or returned.

SECTION 12. Miscellaneous.

(a) Notices. Any notice or other communication hereunder shall be addressed and
delivered (i) to the Company by delivering such notice in accordance with
Section 7.4 of the Guaranty Agreement, (ii) to the Borrower by delivering such
notice in accordance with Section 11H of the Note Agreement, (iii) to the
Initial Subsidiary Grantors, pursuant to Section 14 of the Subsidiary Guaranty
Agreement, and (iv) to the Collateral Agent at the address and telefacsimile
number set forth under the Collateral Agent’s signature block of this Agreement.

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

(c) Headings. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
agreement or any provisions hereof.

(d) No Waiver; Cumulative Remedies.

(i) The Collateral Agent and each Secured Party shall not by any act, delay,
omission or otherwise be deemed to have waived any of their respective rights or
remedies hereunder, nor shall any single or partial exercise of any right or
remedy hereunder on any one occasion preclude the further exercise thereof or
the exercise of any other right or remedy.

(ii) The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

 

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(iii) None of the terms or provisions of this Agreement may be waived, altered,
modified or amended except by an instrument in writing, duly executed by each of
the Grantors and the Collateral Agent.

(e) Time is of the Essence. Time is of the essence for the performance of each
of the terms and provisions of this Agreement.

(f) Termination of this Agreement. Subject to Section 11, this Agreement shall
terminate upon the full, complete and final payment and performance of the
Secured Obligations.

(g) Release of Collateral. Upon any sale or other disposition of title in or to
any assets of any Grantor constituting Collateral permitted to be sold or
disposed of under the Note Documents, the Collateral Agent, at the reasonable
request and at the expense of the applicable Grantor, will execute and deliver
to such Grantor such instruments (including UCC partial release statements)
acknowledging the release of the Collateral Agent’s security interest in such
Collateral so sold or otherwise disposed of, provided that such security
interest shall continue to attach to and be perfected in the Proceeds of such
Collateral, and will record such instruments with the United States Patent and
Trademark Office and the United States Copyright Office as may be necessary to
evidence the release of the Collateral Agent’s security interest in such
Collateral.

(h) Successor and Assigns. This Agreement and all obligations of each of the
Grantors hereunder shall be binding upon the successors and assigns of each such
Grantor, and shall, together with the rights and remedies of the Collateral
Agent and the Secured Parties hereunder, inure to the benefit of such Collateral
Agent and the Secured Parties, and their respective successors and assigns. No
sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Secured
Obligations or any portion thereof or interest therein shall in any manner
affect the security interest created herein and granted to the Collateral Agent
hereunder.

(i) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF
THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH STATE.

(j) Waiver of Jury Trial. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY DEALINGS BETWEEN OR
AMONG THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY AND THE SECURED PARTY/GRANTOR RELATIONSHIP THAT IS BEING
ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.

 

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EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

(k) Jurisdiction; Venue. Each Grantor irrevocably agrees that any legal action
or proceeding with respect to this Agreement, the other Transaction Documents or
any of the agreements, documents or instruments delivered in connection herewith
shall be brought in the courts of the State of New York, or the United States of
America for the Southern District of New York as the Collateral Agent or any
Secured Party may elect, and, by execution and delivery hereof, each Grantor
accepts and consents to, for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts and agrees that
such jurisdiction shall be exclusive, unless waived by the Required Holders in
writing, with respect to any action or proceeding brought by such Grantor
against the Collateral Agent or any other Secured Party. Nothing herein shall
limit the right that the Collateral Agent or any Secured Party may have to bring
proceedings against any Grantor in the courts of any appropriate jurisdiction or
to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction. Each Grantor hereby waives, to the full extent permitted by
law, any right to stay or to dismiss any action or proceeding brought before
said courts on the basis of forum non conveniens.

(l) Counterparts. This Agreement may be executed in any number of counterparts
(including those transmitted by electronic transmission (including, without
limitation, facsimile and e-mail)), each of which when so delivered shall be
deemed an original, but all such counterparts shall constitute but one and the
same instrument. Delivery of this Agreement may be made by facsimile
transmission of a duly executed counterpart copy hereof.

(m) Additional Grantors. From time to time subsequent to the date hereof,
additional Subsidiaries and/or Affiliates of the Company may become parties
hereto, as additional Grantors (each, an “Additional Grantor”), by executing a
Joinder Agreement. Upon the delivery of the Joinder Agreement to the Collateral
Agent, such Additional Grantor shall be a Grantor and shall be as fully a party
hereto as if such Additional Grantor were an original signatory hereof.

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered by its duly authorized signatory on the date first set
forth above.

 

GRANTORS: PULITZER INC. By:  

/s/    Carl G. Schmidt

Name:   Carl G. Schmidt Title:   Treasurer ST. LOUIS POST-DISPATCH LLC, By:  
Pulitzer Inc., Managing Member By:  

/s/    Carl G. Schmidt

Name:   Carl G. Schmidt Title:   Treasurer

 

FAIRGROVE LLC FLAGSTAFF PUBLISHING CO. HANFORD SENTINEL INC. HOMECHOICE, LLC
HSTAR LLC KAUAI PUBLISHING CO. NAPA VALLEY PUBLISHING CO NIPC, INC. NLPC LLC
NORTHERN LAKES PUBLISHING CO. NVPC LLC PANTAGRAPH PUBLISHING CO. PULITZER
MISSOURI NEWSPAPERS, INC. PULITZER NETWORK SYSTEMS LLC PULITZER NEWSPAPERS, INC.
PULITZER TECHNOLOGIES, INC. PULITZER UTAH NEWSPAPERS, INC. SANTA MARIA TIMES,
INC. SHTP LLC SOPC LLC SOUTHWESTERN OREGON PUBLISHING CO. STL DISTRIBUTION
SERVICES LLC SUBURBAN JOURNALS OF GREATER ST.

 

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LOUIS LLC YNEZ CORPORATION By:  

/s/    C. D. Waterman III

Name:   C.D. Waterman III Title:   Secretary

 

30

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Accepted and acknowledged by:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent By:  

/s/    Geraldine Creswell

Name:   Geraldine Creswell Title:   Assistant Treasurer

Address for Notices:

The Bank of New York Mellon Trust Company, N.A.

Attn: Geraldine Creswell, Asst. Treasurer

10161 Centurion Parkway, N.

Jacksonville, Florida 32256

Fax: 904-645-1921

Email: geri.creswell@bnymellon.com

 

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