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                                                                    EXHIBIT 10.2


                                                               EXECUTION VERSION








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                                  PULITZER INC.







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                               GUARANTY AGREEMENT

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                             DATED AS OF MAY 1, 2000


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                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                              Page


<S>                                                                                                          <C>
1.    DEFINED TERMS; ACCOUNTING MATTERS.........................................................................1

       1.1.       Defined Terms.................................................................................1
       1.2.       Accounting and Legal Principles, Terms and Determinations.....................................5

2.    GUARANTY..................................................................................................6

       2.1.       Guaranty......................................................................................6
       2.2.       Guaranty of Payment and Performance...........................................................6
       2.3.       General Provisions Relating to the Guaranty...................................................7

3.    REPRESENTATIONS AND WARRANTIES...........................................................................11

       3.1.       Organization and Qualification; Due Authorization............................................11
       3.2.       Financial Statements.........................................................................11
       3.3.       Actions Pending..............................................................................12
       3.4.       Outstanding Debt.............................................................................12
       3.5.       Title to Properties..........................................................................12
       3.6.       Taxes........................................................................................12
       3.7.       Conflicting Agreements and Other Matters.....................................................13
       3.8.       ERISA........................................................................................13
       3.9.       Governmental Consent.........................................................................14
       3.10.      Disclosure...................................................................................14
       3.11.      Formation/Contribution Documents.............................................................14
       3.12.      Solvency.....................................................................................14
       3.13.      Representations and Warranties in Formation/Contribution Documents...........................14

4.    AFFIRMATIVE COVENANTS....................................................................................15

       4.1.       Financial Statements.........................................................................15
       4.2.       Inspection of Properties.....................................................................16
       4.3.       Covenant to Secure Notes Equally.............................................................16
       4.4.       Business.....................................................................................17
       4.5.       Compliance with Laws and Regulations.........................................................17
       4.6.       Patents, Trade Marks and Trade Names.........................................................17
       4.7.       Payment of Taxes and Other Claims............................................................17
       4.8.       ERISA Compliance.............................................................................18

5.    NEGATIVE COVENANTS.......................................................................................18

       5.1.       Consolidated Debt to EBITDA and Consolidated Net Worth Requirements..........................18
       5.2.       Liens........................................................................................18
       5.3.       Priority Debt................................................................................20
       5.4.       Loans, Advances and Investments..............................................................20
       5.5.       Sale or Disposition of Capital Assets........................................................22
</TABLE>

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<TABLE>
<S>                                                                                                           <C>
       5.6.       Sale and Lease-Back..........................................................................23
       5.7.       Merger.......................................................................................23
       5.8.       Transactions With Affiliates.................................................................23
       5.9.       Sale of Stock and Debt of Subsidiaries.......................................................24
       5.10.      Issuance of Stock by Subsidiaries............................................................24
       5.11.      Limitation on Certain Restrictive Agreements.................................................24
       5.12.      Conforming Debt Agreement Changes............................................................24

6.    EVENTS OF DEFAULT; REMEDIES..............................................................................25

       6.1.       Events of Default............................................................................25
       6.2.       Remedies.....................................................................................27

7.    MISCELLANEOUS............................................................................................27

       7.1.       Survival of Representations and Warranties; Entire Agreement.................................27
       7.2.       Consents to Amendments.......................................................................27
       7.3.       Binding Effect, etc..........................................................................28
       7.4.       Notices......................................................................................28
       7.5.       Severability.................................................................................28
       7.6.       Successors and Assigns.......................................................................28
       7.7.       Independence of Covenants....................................................................28
       7.8.       Satisfaction Requirement.....................................................................29
       7.9.       Counterparts.................................................................................29
       7.10.      Governing Law................................................................................29
       7.11.      Consent to Jurisdiction; Waiver of Immunities................................................29
       7.12.      WAIVER OF JURY TRIAL.........................................................................29
</TABLE>

         SCHEDULE 5.4 - EXISTING INVESTMENTS

         EXHIBIT A - FORM OF COMPLIANCE CERTIFICATE



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                               GUARANTY AGREEMENT


                  THIS GUARANTY AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this "GUARANTY") is made as of May 1, 2000
by PULITZER INC., a Delaware corporation (the "GUARANTOR"), in favor of the
holders from time to time of the Notes issued under the below-described Note
Agreement.

                                    RECITALS

         A. St. Louis Post-Dispatch LLC, a Delaware limited liability company
(the "COMPANY"), has entered into that certain Note Agreement dated as of even
date herewith (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "NOTE AGREEMENT") with the several Purchasers
listed in the Purchaser Schedule attached thereto, pursuant to which the Company
has agreed to sell and such Purchasers have agreed to purchase $306,000,000
aggregate principal amount of the Company's 8.05% Senior Notes due April 28,
2009 (together with any other notes issued in substitution or exchange therefor
pursuant to the terms of the Note Agreement, the "NOTES").

         B. Upon consummation of the Formation/Contribution Transactions (as
defined in the Note Agreement), the Company will be a Subsidiary of the
Guarantor.

         C. It is a condition precedent to the obligation of each Purchaser to
purchase the Notes to be purchased by it under the Note Agreement that this
Guaranty shall have been executed and delivered by the Guarantor and shall be in
full force and effect.

         D. The Board of Directors of the Guarantor has determined that the
Guarantor's execution, delivery and performance of this Guaranty may reasonably
be expected to benefit the Guarantor, directly or indirectly, and to be in the
best interests of the Guarantor.

            NOW THEREFORE, in order to induce, and in consideration of,
the purchase of the Notes pursuant to the Note Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
the Guarantor hereby covenants and agrees with, and represents and warrants to
each holder of Notes, as follows:

       1.   DEFINED TERMS; ACCOUNTING MATTERS

       1.1. DEFINED TERMS. All capitalized terms used herein, unless
specifically otherwise defined, shall have the meanings ascribed to them in the
Note Agreement. In addition, the following terms shall have the meanings
specified with respect thereto below (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):



<PAGE>   5



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

         "BANKRUPTCY LAW" shall have the meaning specified in clause (vi) of
Section 6.

         "CAPITALIZATION" shall mean Consolidated Net Worth plus Consolidated
Debt.

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

         "CLAIMS" shall have the meaning specified in Section 4.7 of this
Guaranty.

         "COMPANY" shall have the meaning specified in Recital A of this
Guaranty.

         "CONSOLIDATED DEBT" shall mean, with respect to the Guarantor and its
Subsidiaries on any date of determination, total Debt of the Guarantor and its
Subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles.

         "CONSOLIDATED INTEREST EXPENSE" shall mean, with respect to any period,
the sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between the Guarantor and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Guarantor and its Subsidiaries in
accordance with generally accepted accounting principles): (i) all interest and
prepayment charges in respect of Debt of the Guarantor and its Subsidiaries
(including imputed interest in respect of Capitalized Lease obligations and net
costs of any interest rate or currency hedging or similar arrangements) deducted
in determining consolidated net income for such period, together with all
interest capitalized or deferred during such period and not deducted in
determining consolidated net income for such period, and (ii) all debt discount
and expense amortized or required to be amortized in the determination of
consolidated net income for such period.

         "CONSOLIDATED NET EARNINGS" shall mean, with respect to any period,
consolidated gross revenues of the Guarantor and its Subsidiaries less all
operating and non-operating expenses of the Guarantor and its Subsidiaries
including all charges of a property character (including current and deferred
taxes on income, provision for taxes on unremitted foreign earnings which are
included in gross revenues, and current additions to reserves), but not
including in gross revenues any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, conversion or other
disposition of capital assets (i.e., assets other than current assets) in excess
of an aggregate amount of $5,000,000 in any one year, any gains resulting from
the write-up of assets, any equity of the Guarantor or any Subsidiary in the
unremitted earnings of any corporation which is not a Subsidiary or any earnings
of any Person


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acquired by the Guarantor or any Subsidiary through purchase, merger or
consolidation or otherwise for any year prior to the year of acquisition, or any
deferred credit representing the excess of equity in any Subsidiary at the date
of acquisition over the cost of investment in such Subsidiary; all determined in
accordance with generally accepted accounting principles

         "CONSOLIDATED NET WORTH" shall mean, at any time, the total amount of
total assets of the Guarantor and its Subsidiaries over total liabilities of the
Guarantor and its Subsidiaries as of the last day of the fiscal quarter most
recently then ended, determined on a consolidated basis in accordance with
generally accepted accounting principles.

         "CONSOLIDATED TOTAL ASSETS" shall mean, on any date of determination,
the total assets of the Guarantor and its Subsidiaries, all consolidated in
accordance with generally accepted accounting principles.

         "DEBT" shall mean and include without duplication:

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

                 (ii) Capitalized Lease Obligations;

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

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

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

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

                (vii) obligations under any contract to rent or lease (as
         lessee) any real or personal property if such contract (or any related
         document) provides that the obligation



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         to make payments thereunder is absolute and unconditional under
         conditions not customarily found in commercial leases then in general
         use or requires that the lessee purchase or otherwise acquire
         securities or obligations of the lessor;

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

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

provided, however, that Debt shall not include (a) loans, advances and capital
contributions by the Guarantor to any Subsidiary or by any Subsidiary to the
Guarantor or another Subsidiary or a guarantee of the obligations of a
Subsidiary under an executory contract to purchase or sell a business or (b) any
amounts which may be due in connection with the "Gross-Up Transactions"
described in Note 15 of the audited consolidated financial statements of the
Guarantor and its Subsidiaries for the fiscal year ended December 31, 1999, as
incorporated in the Guarantor's annual report on Form 10-K filed with the
Securities and Exchange Commission.

         "DEFAULT" shall mean any of the events specified in Section 6.1,
whether or not any requirement for such event to become an Event of Default has
been satisfied.

         "EBITDA" means, with respect to the Guarantor and its Subsidiaries for
any period, the sum of (i) Consolidated Net Earnings plus (ii) to the extent
deducted in the determination of Consolidated Net Earnings, (a) all provisions
for federal, state and other income tax, (b) Consolidated Interest Expense and
(c) provisions for depreciation and amortization, provided however, that any
acquisition or disposition by the Guarantor or any Subsidiary during any period
of all of the capital stock of (or other equity interests in) any Person, or of
all or substantially all of the assets of any Person, shall in each case be
reflected and given effect in EBITDA as if such acquisition or disposition
occurred on the first day of such period, so long as, in the case of any such
acquisition, the Guarantor shall have delivered or caused to be delivered to
each holder of Notes financial information, set forth within audited financial
statements regarding such Person, disclosing the prior operating results of such
Person, and provided further, that, for purposes of calculating EBITDA, the
consummation of the Formation/Contribution Transactions will be taken into
account by including, on a pro forma basis, Herald's share of EBITDA for periods
prior to the Date of Closing, as derived from the "St. Louis Agency adjustment"
reflected in the consolidated financial statements of the Guarantor and its
Subsidiaries incorporated in annual reports of the Guarantor on Form 10-K or
quarterly reports of the Guarantor on Form 10-Q, as the case may be, for the
applicable periods, filed with the Securities and Exchange Commission.


                                       4

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

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

         "GUARANTEED OBLIGATIONS" shall have the meaning specified in Section
2.1 of this Guaranty.

         "GUARANTOR" shall have the meaning specified in the introductory
paragraph of this Guaranty.

         "GUARANTY" shall have the meaning specified in the introductory
paragraph hereof.

         "NOTE AGREEMENT" shall have the meaning specified in Recital A of this
Guaranty.

         "NOTES" shall have the meaning specified in Recital A of this Guaranty.

         "PRIORITY DEBT" shall mean, with respect to the Guarantor and its
Subsidiaries on any date of determination, the aggregate amount of all Debt of
the Guarantor secured by a Lien plus all secured and unsecured Debt of all
Subsidiaries (excluding Debt represented by the Notes).

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

         1.2. ACCOUNTING AND LEGAL PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Guaranty to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall
mean generally accepted accounting principles, as in effect in the United States
from time to time. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with the most recent audited
consolidated financial statements of the Guarantor and its Subsidiaries
delivered pursuant to clause (i) or (ii) of Section 4.1 or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in Section 3.2. Any reference herein to any specific citation,
section or


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form of law, statute, rule or regulation shall refer to such new, replacement or
analogous citation, section or form should citation, section or form be
modified, amended or replaced.

         2. GUARANTY

       2.1. GUARANTY. The Guarantor hereby irrevocably, absolutely and
unconditionally guarantees unto each holder of Notes (i) the full and prompt
payment of the principal of, Yield-Maintenance Amount, if any, interest and all
other amounts due with respect to the Notes from time to time outstanding, as
and when such amounts shall become due and payable, whether by lapse of time,
upon redemption, prepayment or purchase, by extension or by acceleration or
declaration or otherwise (including (to the extent legally enforceable) interest
due on overdue payments of principal, Yield-Maintenance Amount, if any, or
interest at the rate set forth in the Notes or any other amounts due thereunder)
in coin or currency of the United States of America which at the time of payment
or demand therefor shall be legal tender for the payment of public and private
debts, (ii) the full and prompt payment, performance and observance by the
Company of all other obligations, covenants, conditions and agreements contained
in the Note Agreement or any other instrument or agreement entered into in
connection therewith or otherwise relating thereto, and (iii) the full and
prompt payment, upon demand by any holder of Notes of all costs and expenses
(including reasonable attorneys' fees), if any, as shall have been expended or
incurred in the protection or enforcement of any right or privilege under the
Notes, the Note Agreement or any other instrument or agreement entered into in
connection therewith or relating thereto or in the protection or enforcement of
any rights, privileges or liabilities under this Guaranty or in any consultation
or action in connection therewith or herewith (all such obligations, covenants,
conditions and agreements described in the foregoing clauses (i), (ii) and (iii)
being hereinafter collectively referred to as the "GUARANTEED OBLIGATIONS").

       2.2. GUARANTY OF PAYMENT AND PERFORMANCE. This is a guaranty of payment
and performance and not a guaranty of collection, and the Guarantor hereby
waives any right to require that any action on or in respect of any Note, the
Note Agreement or any instrument or agreement relating to the Guaranteed
Obligations be brought against the Company or any other Person or that resort be
had to any direct or indirect security for the Notes or for this Guaranty or any
other remedy. Any holder of Notes may, at its option, proceed hereunder against
the Guarantor in the first instance to collect monies when due, the payment of
which is guaranteed hereby, without first proceeding against the Company or any
other Person and without first resorting to any direct or indirect security for
the Notes, or for this Guaranty or any other remedy. The liability of the
Guarantor hereunder shall in no way be affected or impaired by any acceptance by
any holder of Notes of any direct or indirect security for, or other guaranties
of, the Guaranteed Obligations or by any failure, delay, neglect or omission by
any holder of Notes to realize upon or protect any of the Guaranteed Obligations
or any Notes or other instruments evidencing the same or any direct or indirect
security therefor or by any approval, consent, waiver, or other action taken or
omitted to be taken by any such holder. The Guarantor (i) acknowledges that
certain obligations of the Company under the Note Agreement will survive the
payment or transfer of any Note and the termination of the Note Agreement, and
(ii) agrees that the obligations of the Guarantor hereunder with respect to such
surviving obligations shall also survive the payment or transfer of any Note and
the termination of the Note Agreement.


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<PAGE>   10

         2.3.     GENERAL PROVISIONS RELATING TO THE GUARANTY.

                  (i)      The Guarantor hereby consents and agrees that any
         holder or holders of Notes from time to time, with or without any
         further notice to or assent from the Guarantor may, without in any
         manner affecting the liability of the Guarantor under this Guaranty,
         and upon such terms and conditions as any such holder or holders may
         deem advisable:

                           (a) extend in whole or in part (by renewal or
                  otherwise), modify, change, compromise, release or extend the
                  duration of the time for the payment or performance of any of
                  the Guaranteed Obligations, or waive any default with respect
                  thereto, or waive, modify, amend or change any provision of
                  the Note Agreement, the Notes or any other instrument or
                  agreement entered into in connection therewith or otherwise
                  relating thereto;

                           (b) sell, release, surrender, modify, impair,
                  exchange or substitute any and all property, of any nature and
                  from whomsoever received, held by, or for the benefit of, any
                  such holder as direct or indirect security for the payment or
                  performance of any of the Guaranteed Obligations; or

                           (c) settle, adjust or compromise any claim of the
                  Company against any other Person secondarily or otherwise
                  liable for any of the Guaranteed Obligations.

         The Guarantor hereby ratifies and confirms any such extension, renewal,
         change, sale, release, waiver, surrender, exchange, modification,
         amendment, impairment, substitution, settlement, adjustment or
         compromise and that the same shall be binding upon it, and hereby
         waives any and all defenses, counterclaims or offsets which it might or
         could have by reason thereof, it being understood that the Guarantor
         shall at all times be bound by this Guaranty and remain liable
         hereunder.

                  (ii) The Guarantor hereby waives: (a) notice of acceptance of
         this Guaranty by the holders of Notes or of the creation, renewal or
         accrual of any liability of the Company, present or future, or of the
         reliance of such holders upon this Guaranty (it being understood that
         all Guaranteed Obligations shall conclusively be presumed to have been
         created, contracted or incurred in reliance upon the execution of this
         Guaranty); (b) demand of payment by any holder of Notes from the
         Company or any other Person indebted in any manner on or for any of the
         Guaranteed Obligations hereby guaranteed; and (c) presentment for the
         payment by any holder of Notes or any other Person of the Notes or any
         other instrument, protest thereof and notice of its dishonor to any
         party thereto and to the Guarantor. The obligations of the Guarantor
         under this Guaranty and the rights of any holder of Notes to enforce
         such obligations by any proceedings, whether by action at law, suit in
         equity or otherwise, shall not be subject to any reduction, limitation,
         impairment or termination, whether by reason of


                                       7


<PAGE>   11

         any claim of any character whatsoever or otherwise and shall not be
         subject to any defense, setoff, counterclaim, recoupment or
         termination whatsoever.

                 (iii) The obligations of the Guarantor hereunder shall be
         binding upon the Guarantor and its successors and assigns, and shall
         remain in full force and effect irrespective of:

                       (a) the genuineness, validity, regularity or
                  enforceability of the Notes, the Note Agreement, this Guaranty
                  or any Notes or any other instrument or agreement entered into
                  in connection therewith or otherwise relating thereto, or any
                  of the terms of any thereof, the continuance of any obligation
                  on the part of the Company or any other Person on the Notes or
                  under the Note Agreement or any such other instrument or
                  agreement, or the power or authority or the lack of power or
                  authority of the Company to execute and deliver the Note
                  Agreement, the Notes or any such other instrument or
                  agreement, or to perform any of its obligations thereunder or
                  the existence or continuance of the Company or any other
                  Person as a legal entity;

                       (b) any default, failure or delay, willful or otherwise,
                  in the performance by the Company or any other Person of any
                  obligations of any kind or character whatsoever of the Company
                  or any other Person (including, without limitation, the
                  Guaranteed Obligations);

                       (c) any creditors' rights, bankruptcy, receivership
                  or other insolvency proceeding of the Company or any other
                  Person or in respect of the property of the Company or any
                  other Person or any merger, consolidation, reorganization,
                  dissolution, liquidation, the sale of all or substantially all
                  of the assets of or winding up of the Company or any other
                  Person;

                       (d) impossibility or illegality of performance on the
                  part of the Company or any other Person of its obligations
                  under the Notes, the Note Agreement, this Guaranty or any
                  other Notes or any other instrument or agreement entered into
                  in connection therewith or otherwise relating thereto;

                       (e) in respect of the Company or any other Person,
                  any change of circumstances, whether or not foreseen or
                  foreseeable, whether or not imputable to the Company or any
                  other Person, or other impossibility of performance through
                  fire, explosion, accident, labor disturbance, floods,
                  droughts, embargoes, wars (whether or not declared), civil
                  commotion, acts of God or the public enemy, delays or failure
                  of suppliers or carriers, inability to obtain materials,
                  action of any Federal or state regulatory body or agency,
                  change of law or any other causes affecting performance, or
                  any other force majeure, whether or not beyond the control of
                  the Company or any other Person and whether or not of the kind
                  hereinbefore specified;


                                       8


<PAGE>   12

                       (f) any attachment, claim, demand, charge, lien,
                  order, process, encumbrance or any other happening or event or
                  reason, similar or dissimilar to the foregoing, or any
                  withholding or diminution at the source, by reason of any
                  taxes, assessments, expenses, indebtedness, obligations or
                  liabilities of any character, foreseen or unforeseen, and
                  whether or not valid, incurred by or against any Person, or
                  any claims, demands, charges or liens of any nature, foreseen
                  or unforeseen, incurred by any Person, or against any sums
                  payable under this Guaranty, so that such sums would be
                  rendered inadequate or would be unavailable to make the
                  payments herein provided;

                       (g) any order, judgment, decree, ruling or regulation
                  (whether or not valid) of any court of any nation or of any
                  political subdivision thereof or any body, agency, department,
                  official or administrative or regulatory agency of any thereof
                  or any other action, happening, event or reason whatsoever
                  which shall delay, interfere with, hinder or prevent, or in
                  any way adversely affect, the payment or performance by any
                  party of any of the Guaranteed Obligations;

                       (h) any failure or lack of diligence in collection or
                  protection, failure in presentment or demand for payment,
                  protest, notice of protest, notice of default and of
                  nonpayment, any failure to give notice to the Guarantor of
                  failure of Company or any other Person to keep and perform any
                  of the Guaranteed Obligations, or failure to resort for
                  payment to the Company or to any other Person or to any other
                  guaranty or to any property, security, Liens or other rights
                  or remedies;

                       (i) the acceptance of any additional security or
                  other guaranty, the advance of additional money to the Company
                  or any other Person, the renewal or extension of the Notes or
                  amendments, modifications, consents or waivers with respect to
                  the Notes, the Note Agreement or any other instrument or
                  agreement entered into in connection therewith or otherwise
                  relating thereto, or the sale, release, substitution or
                  exchange of any security for the Notes;

                       (j) any defense whatsoever that the Company or any
                  other Person might have to the payment of the Notes
                  (principal, Yield-Maintenance Amount, if any, or interest or
                  any other amounts due thereunder), other than payment in cash
                  thereof, or to the payment, performance or observance of any
                  of the other Guaranteed Obligations, whether through the
                  satisfaction or purported satisfaction by the Company or any
                  other Person of its debts due to any cause such as bankruptcy,
                  insolvency, receivership, merger, consolidation,
                  reorganization, dissolution, liquidation, winding up or
                  otherwise;

                       (k) any act or failure to act with regard to the
                  Notes, the Note Agreement, this Guaranty or any other
                  instrument or agreement entered into in connection therewith
                  or otherwise relating thereto, or anything which might vary
                  the risk of the Guarantor; or


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<PAGE>   13

                       (l) any other circumstance (other than payment and
                  performance in full of the Guaranteed Obligations) which might
                  otherwise constitute a defense available to, or a discharge
                  of, the Guarantor in respect of its obligations under this
                  Guaranty;

         provided, that the specific enumeration of the above-mentioned acts,
         failures or omissions shall not be deemed to exclude any other acts,
         failures or omissions, though not specifically mentioned above, it
         being the purpose and intent of this Guaranty that the obligations of
         the Guarantor shall be absolute and unconditional and shall not be
         discharged, impaired or varied except by the full and prompt payment
         and performance of all of the Guaranteed Obligations. Without limiting
         the foregoing, it is understood that repeated and successive demands
         may be made and recoveries may be had hereunder as and when, from time
         to time, the Company or any other Person shall default under the terms
         of the Notes, the Note Agreement or Notes or any other instrument or
         agreement entered into in connection therewith or otherwise relating
         thereto and that notwithstanding recovery hereunder for or in respect
         of any given default or defaults by the Company or any other Person
         under the Notes, the Note Agreement or any such other instrument or
         agreement, this Guaranty shall remain in full force and effect and
         shall apply to each and every subsequent default.

                 (iv) All rights of any holder of Notes may be transferred or
         assigned at any time and shall be considered to be transferred or
         assigned at any time or from time to time upon the transfer of such
         Note whether with or without the consent of or notice to the Guarantor
         under this Guaranty or to the Company.

                  (v) The Guarantor hereby subordinates to the rights of the
         holders of Notes under the Note Agreement, the Notes or any other
         instrument or agreement entered into in connection therewith or
         otherwise relating thereto, and agrees to defer any assertion, until
         such time as the Guaranteed Obligations have been indefeasibly paid and
         performed in full, of any claim or other rights that it may now or
         hereafter acquire against the Company or any other Person that arise
         from the existence, payment, performance or enforcement of the
         Guarantor's obligations under this Guaranty, including, without
         limitation, any right of subrogation, reimbursement, exoneration,
         contribution or indemnification and any right to participate in any
         claim or remedy of any holder or holders of Notes against the Company
         or any other Person, whether or not such claim, remedy or right arises
         in equity or under contract, statute or common law, including, without
         limitation, the right to take or receive from the Company or any other
         Person, directly or indirectly, in cash or other property or by setoff
         or in any other manner, payment or security on account of such claim,
         remedy or right. If any amount shall be paid to the Guarantor in
         violation of the preceding sentence at any time prior to the payment
         and performance in full of all the Guaranteed Obligations, such amount
         shall be held in trust for the benefit of the holders of Notes and
         shall forthwith be paid to such holders to be credited and applied to
         the Guaranteed Obligations, whether matured or unmatured.



                                       10

<PAGE>   14

                 (vi) The Guarantor agrees that to the extent the Company or
         any other Person makes any payment on any Note or in respect of any of
         the other Guaranteed Obligations, which payment or any part thereof is
         subsequently invalidated, voided, declared to be fraudulent or
         preferential, set aside, recovered, rescinded or is required to be
         retained by or repaid to a trustee, receiver, or any other Person under
         any bankruptcy code, common law, or equitable cause, then and to the
         extent of such payment, the obligation or the part thereof intended to
         be satisfied shall be revived and continued in full force and effect
         with respect to the Guarantor's obligations hereunder, as if said
         payment had not been made. The liability of the Guarantor hereunder
         shall not be reduced or discharged, in whole or in part, by any payment
         to any holder of Notes from any source that is thereafter paid,
         returned or refunded in whole or in part by reason of the assertion of
         a claim of any kind relating thereto, including, but not limited to,
         any claim for breach of contract, breach of warranty, preference,
         illegality, invalidity, or fraud asserted by any account debtor or by
         any other Person.

                (vii) The holders of Notes shall have no obligation to (a) to
         marshal any assets in favor of the Guarantor or in payment of any or
         all of the Guaranteed Obligations or (b) pursue any other remedy that
         the Guarantor may or may not be able to pursue itself and that may
         lighten the Guarantor's burden, any right to which the Guarantor hereby
         expressly waives.

         3.   REPRESENTATIONS AND WARRANTIES

         The Guarantor represents, covenants and warrants as follows:

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

         3.2. FINANCIAL STATEMENTS. The Guarantor has furnished each Purchaser
with the following financial statements, identified by a principal financial
officer of the Guarantor: a consolidated balance sheet of the Guarantor (or its
predecessor, Pulitzer Publishing Company)


                                       11

<PAGE>   15



and its Subsidiaries as at December 31 in each of the years 1997 to 1999,
inclusive, and statements of consolidated income, financial position and cash
flows of the Guarantor (or its predecessor, Pulitzer Publishing Company) and its
Subsidiaries for each such year, all audited by Deloitte & Touche L.L.P. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the
Guarantor (or its predecessor, Pulitzer Publishing Company) and its Subsidiaries
required to be shown in accordance with such principles. The balance sheets
fairly present the condition of the Guarantor (or its predecessor, Pulitzer
Publishing Company) and its Subsidiaries as at the dates thereof, and the
statements of income and statements of financial position and cash flows fairly
present the results of the operations of the Guarantor (or its predecessor,
Pulitzer Publishing Company) and its Subsidiaries for the periods indicated.
There has been no material adverse change in the business, condition or
operations (financial or otherwise) of the Guarantor and its Subsidiaries taken
as a whole since December 31, 1999.

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

         3.4. OUTSTANDING DEBT. Neither the Guarantor nor any of its
Subsidiaries has outstanding any Debt except as permitted by Section 5.1 and
Section 5.3 and as set forth in the Guarantor's consolidated financial
statements for the year ended December 31, 1999. There exists no default under
the provisions of any instrument evidencing such Debt or of any agreement
relating thereto.

         3.5. TITLE TO PROPERTIES. The Guarantor has and each of its
Subsidiaries has good and marketable title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the consolidated balance sheet of the Guarantor as at December 31, 1999
referred to in Section 3.2 (other than properties and assets disposed of in the
ordinary course of business), including all properties and assets of the
Guarantor to be contributed to the Company in the Formation/Contribution
Transactions, subject to no Lien of any kind except Liens permitted by Section
5.2. All leases necessary in any material respect for the conduct of the
respective businesses of the Guarantor and its Subsidiaries are valid and
subsisting and are in full force and effect, subject to Liens permitted by
Section 5.2.

         3.6. TAXES. The Guarantor has and each of its Subsidiaries has filed
all Federal, state and other income tax returns which, to the best knowledge of
the officers of the Guarantor, are required to be filed and each has paid all
taxes as shown on such returns and on all assessments received by it to the
extent that such taxes have become due, except such taxes as are being


                                       12

<PAGE>   16

contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with generally accepted accounting
principles. Federal income tax returns of the Guarantor and its Subsidiaries
have been examined and reported on by the taxing authorities or closed by
applicable statutes and satisfied for all fiscal years prior to and including
the fiscal year ended December 31, 1995.

         3.7. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Guarantor
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other limited liability company or corporate restriction which
materially and adversely affects the business, property or assets, or financial
condition of the Guarantor and its Subsidiaries, taken as a whole. Neither the
execution nor delivery of this Guaranty, the Note Agreement, the Notes or the
Formation/Contribution Documents, nor the offering, issuance and sale of the
Notes, nor fulfillment of nor compliance with the terms and provisions hereof
and of the Note Agreement, the Notes and the Formation/Contribution Documents
will conflict with, or result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in any violation of, or result in
the creation of any Lien upon any of the properties or assets of the Guarantor
or any of its Subsidiaries pursuant to, the charter, by-laws, limited liability
company agreement or other organizational documents of the Guarantor or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with members or stockholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which the Guarantor or any of its
Subsidiaries is subject, except to the extent any such conflict, breach,
defaults, violation or creation of a Lien could not reasonably be expected to
have a material adverse effect on the business, operations, property or
financial or other condition of the Guarantor and its Subsidiaries, taken as a
whole, or the ability of the Guarantor to perform its obligations hereunder.
Except as set forth in the Limited Liability Company Agreement (as in effect on
the date hereof), neither the Guarantor nor any of its Subsidiaries is a party
to, or otherwise subject to any provision contained in, any instrument
evidencing indebtedness of the Guarantor or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its limited
liability company agreement, charter or other organizational documents) which
limits the amount of, or otherwise imposes restrictions on the incurring of,
Debt of the Guarantor represented by this Guaranty or Debt of the Company of the
type to be evidenced by the Notes.

         3.8. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the code), whether or not waived, exists with
respect to any Plan. No liability to the PBGC has been or is expected by the
Guarantor, any Subsidiary or any ERISA Affiliate to be incurred with respect to
any Plan by the Guarantor, any Subsidiary or any ERISA Affiliate which is or
would be materially adverse to the Guarantor and its Subsidiaries taken as a
whole. Neither the Guarantor, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under Title IV
of ERISA with respect to any Multiemployer Plan which is or would be materially
adverse to the Guarantor and its Subsidiaries taken as a whole. The execution
and delivery of this Guaranty and the Note Agreement and the issuance and sale
of the Notes will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. The representation by the
Guarantor in the preceding sentence is made in reliance upon and subject to the
accuracy of the representation of each Purchaser in paragraph 9B of the Note
Agreement.


                                       13

<PAGE>   17


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

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

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

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

         3.13. REPRESENTATIONS AND WARRANTIES IN FORMATION/CONTRIBUTION
DOCUMENTS. To induce the Purchasers to enter into the Note Agreement and to
purchase the Notes to be purchased by them thereunder, the Guarantor agrees that
each Purchaser shall be entitled to rely upon each of the representations and
warranties of the Guarantor or any of its Subsidiaries set forth in any of the
Formation/Contribution Documents as fully as if set forth in this Guaranty.


                                       14

<PAGE>   18



         4.   AFFIRMATIVE COVENANTS

         So long as any Note shall remain unpaid, the Guarantor covenants as
follows:

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

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

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

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


                                       15

<PAGE>   19


         Exchange Commission (or any governmental body or agency succeeding to
         the functions of the Securities and Exchange Commission);

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

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

Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Guarantor will deliver to each holder of Notes an Officer's
Certificate, substantially in the form of Exhibit A attached hereto, executed on
behalf of the Guarantor and demonstrating (with computations in reasonable
detail) compliance by the Guarantor and its Subsidiaries (including the Company)
with the provisions of Sections 5.1, 5.2(x), 5.3, 5.4, 5.5, 5.6, 5.9 and 5.10 of
this Guaranty and stating that there exists no Event of Default or Default, or,
if any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Guarantor proposes to take with respect
thereto. Together with each delivery of financial statements required by clause
(ii) above, the Guarantor will deliver or cause to be delivered to each holder a
certificate of such accountants stating that, in making the audit necessary for
their report on such financial statements, they have obtained no knowledge of
any Event of Default or Default or, if they have obtained knowledge of any Event
of Default or Default, specifying the nature and period of existence thereof.
Such accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or Default which would not
be disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards. The Guarantor also covenants that immediately after
any Responsible Officer obtains knowledge of an Event of Default or Default, it
will deliver to each holder an Officer's Certificate specifying the nature and
period of existence thereof and what action the Guarantor has taken, is taking
or proposes to take with respect thereto. Each holder of Notes is hereby
authorized to deliver a copy of any financial statement delivered to such holder
pursuant to this Section 4.1 to any regulatory body having jurisdiction over
such holder.

         4.2. INSPECTION OF PROPERTIES. The Guarantor will permit any Person
designated by any holder in writing, at such holder's expense if no Event of
Default then exists and at the Company's expense if an Event of Default then
exists, to visit and inspect any of the properties of the Guarantor and its
Subsidiaries, to examine the corporate or limited liability company books and
financial records of the Guarantor and its Subsidiaries and make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of any
of such limited liability companies or corporations with the principal officers
of the Guarantor and its independent public accountants, all at such reasonable
times and as often as such holder may reasonably request.

         4.3. COVENANT TO SECURE NOTES EQUALLY. The Guarantor will, if it or any
Subsidiary shall create or assume any Lien upon any of its property or assets,
whether now owned or


                                       16

<PAGE>   20


hereafter acquired, other than Liens permitted by the provisions of Section 5.2
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to Section 7.2), make or cause to be made effective
provision whereby the Guaranteed Obligations will be secured by such Lien
equally and ratably with any and all other Debt thereby secured, so long as any
such other Debt shall be so secured; provided that the creation and maintenance
of such equal and ratable Lien shall not in any way limit or modify the right of
the holders of the Notes to enforce the provisions of Section 5.2.

         4.4. BUSINESS. Except as otherwise provided in Section 5.4, the
Guarantor and its Subsidiaries taken as a whole will continue to engage in
business in substantially the same fields of enterprise as conducted on the date
hereof.

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

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

         4.7. PAYMENT OF TAXES AND OTHER CLAIMS. The Guarantor will and will
cause each of its Subsidiaries to file all income tax or similar tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, levies, trade accounts payable and claims for work, labor
or materials (all the foregoing being referred to collectively as "CLAIMS")
payable by any of them, to the extent such Claims have become due and payable
and before they have become delinquent; provided, that neither the Guarantor nor
any Subsidiary need pay any Claim if (i) the amount, applicability or validity
thereof is contested by the Guarantor or such Subsidiary on a timely basis in
good faith and in appropriate proceedings, and the Guarantor or such Subsidiary
has established adequate reserves therefor in accordance with generally accepted
accounting principles on its books or (ii) the nonpayment of all such Claims


                                       17

<PAGE>   21

in the aggregate could not reasonably be expected to have a material adverse
effect on the business, operations, property or financial or other condition of
the Guarantor and its Subsidiaries, taken as a whole, or the ability of the
Guarantor to perform its obligations hereunder.

         4.8. ERISA COMPLIANCE. The Guarantor will, and will cause each ERISA
Affiliate to, at all times:

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

              (ii)   comply with all other provisions of ERISA,

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

         5.   NEGATIVE COVENANTS

         So long as any Note shall remain unpaid, the Guarantor covenants as
follows:

         5.1. CONSOLIDATED DEBT TO EBITDA AND CONSOLIDATED NET WORTH
REQUIREMENTS. The Guarantor will not at any time permit:

              (i)    the ratio of (a) Consolidated Debt as of the last day of
         each fiscal quarter to (b) EBITDA for the four fiscal quarters most
         recently ended to be greater than 4.25 to 1.00; or

              (ii)   Consolidated Net Worth as of the last day of any fiscal
         quarter, commencing with the fiscal quarter ending June 30, 2000, to be
         less than the sum of (a) $650,000,000 plus (b) the product of (x)
         $3,750,000 multiplied by (y) the number of fiscal quarters that have
         ended since the Date of Closing, to and including the fiscal quarter
         ended on such measurement date.

         5.2. LIENS. The Guarantor will not, and will not permit any Subsidiary
to, create, assume or suffer to exist any Lien upon any of its property or
assets, whether now owned or hereafter acquired (whether or not provision is
made for the equal and ratable securing of the Guaranteed Obligations in
accordance with the provisions of Section 4.3), except:

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


                                       18

<PAGE>   22

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

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

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

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

              (vi)   any Lien existing on any property of any Person at the
         time it becomes a Subsidiary, or existing prior to the time of
         acquisition upon any property acquired by the Guarantor or any
         Subsidiary through purchase, merger, or consolidation or otherwise,
         whether or not assumed by the Guarantor or such Subsidiary, or placed
         upon property at the time of acquisition, construction or improvement
         by the Guarantor or any Subsidiary to secure all or a portion of (or to
         secure Debt incurred to pay all or a portion of) the purchase price or
         cost thereof or placed after acquisition upon property acquired,
         constructed or improved by the Guarantor or any Subsidiary after the
         date of closing, provided that any such Lien shall not encumber any
         other property of the Guarantor or such Subsidiary;

              (vii)  Liens on property owned or leased by the Guarantor or a
         Subsidiary (other than the Company) in favor of the United States of
         America or any state thereof, or any department, agency or
         instrumentality or political subdivision of the United States of
         America or any state thereof, or any political subdivision thereof, or
         in favor of holders of securities issued by any such entity, pursuant
         to any contract or statute (including, without limitation, mortgages to
         secure pollution control or industrial revenue bonds) to secure any
         indebtedness incurred for the purpose of financing all or any part of
         the purchase price or the cost of construction of the property subject
         to such Liens;


                                       19

<PAGE>   23

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

              (x)    any Liens permitted under paragraph 6C(1) of the Note
         Agreement; and

              (xi)   any other Lien which secures any Debt, provided that the
         aggregate principal amount of such Debt together with all other Debt of
         the Guarantor and its Subsidiaries secured by all Liens which would be
         permitted under the foregoing provisions (including, any such Debt
         permitted to be secured under clauses (i) through (ix) above), together
         with all other Priority Debt, does not exceed 15% of Capitalization and
         does not exceed the limitation imposed in clause (i) of Section 5.1.

         5.3. PRIORITY DEBT. The Guarantor will not at any time permit Priority
Debt to exceed 15% of Capitalization as of the then most recently ended fiscal
quarter of the Guarantor.

         5.4. LOANS, ADVANCES AND INVESTMENTS. The Guarantor will not, and will
not permit any Subsidiary to, make or permit to remain outstanding any loan or
advance to, or own, purchase or acquire any stock, obligations or securities of,
or any interest in, or make any capital contribution to, any Person, except that
the Guarantor or any Subsidiary may:

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

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

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

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

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


                                       20



<PAGE>   24

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

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

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

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

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

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

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

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

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

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


                                       21

<PAGE>   25


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

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

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

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

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

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

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



                                       22

<PAGE>   26

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

         5.7. MERGER. The Guarantor will not, and will not permit any Subsidiary
to, merge or consolidate with any other Person except that:

              (i)    any Subsidiary may merge or consolidate with the Guarantor
         (provided that the Guarantor shall be the continuing or surviving
         Person) or any one or more other Subsidiaries; and

              (ii)   the Guarantor may merge or consolidate with any other
         corporation, provided that upon such merger or consolidation the
         continuing or surviving corporation (a) shall be in compliance with all
         the terms and provisions of this Guaranty, and if the Guarantor is not
         the survivor, the continuing or surviving corporation shall have
         unconditionally and irrevocably assumed all of the Guarantor's
         obligations under this Guaranty (with such assumption accompanied by a
         legal opinion satisfactory in form and substance to the Required
         Holder(s) from Fulbright & Jaworski L.L.P., or other counsel reasonably
         satisfactory to the Required Holder(s)), and (b) after giving pro forma
         effect to such merger or consolidation, could have incurred at least
         one dollar of additional Debt on the last day of the fiscal quarter
         most recently ended without violating clause (i) of Section 5.1 or
         Section 5.3.

         5.8. TRANSACTIONS WITH AFFILIATES. Except as disclosed in the audited
consolidated financial statements of the Guarantor and its Subsidiaries for the
fiscal year ended December 31, 1999, as incorporated in the Guarantor's annual
report on Form 10-K filed with the Securities and Exchange Commission, the
Guarantor will not, and will not permit any Subsidiary to, directly or
indirectly enter, into or be a party to any transaction or arrangement,
including, without limitation, the purchase, sale, exchange or use of any
property or asset, or any interest therein, whether real, personal or mixed, or
tangible or intangible, or the rendering of any service, with any Affiliate,
except transactions in the ordinary course of and pursuant to


                                       23



<PAGE>   27
the reasonable requirements of the Guarantor's and each Subsidiary's business,
as the case may be, upon fair and reasonable terms that are no less favorable to
the Guarantor and the Subsidiaries, as the case may be, than those which might
be obtained in an arm's length transaction with a Person not an Affiliate. For
avoidance of doubt, the reference in this Section 5.8 to transactions with "any
Affiliate" shall be understood to exclude both (i) transactions between the
Guarantor and any Subsidiary and (ii) transactions between a Subsidiary of the
Guarantor and any other Subsidiary of the Guarantor.

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

         5.10. ISSUANCE OF STOCK BY SUBSIDIARIES. The Guarantor will not permit
any Subsidiary, the assets of which constitute more than 10% of Consolidated
Total Assets at the beginning of the fiscal year in which such issuance, sale or
disposition is to occur or which has contributed more than 10% of EBITDA for any
of the three fiscal years most recently ended, to issue, sell or dispose of any
shares of its stock (of any class) or any other equity interests except to the
Guarantor or another Subsidiary.

         5.11. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. Except as set forth
in the Limited Liability Company Agreement (as in effect on the date hereof),
the Guarantor will not permit any Subsidiary to enter into or suffer to exist
any contractual obligation which in any way restricts the ability of such
Subsidiary to (i) make any dividends, other distributions or advances to the
Guarantor or any other Subsidiary or (ii) transfer any of its property or assets
to the Guarantor or any other Subsidiary.

         5.12. CONFORMING DEBT AGREEMENT CHANGES. The Guarantor will not, and
will not permit any Subsidiary to, become or be a party to any agreement
relating to any Debt greater than $10,000,000 entered into after the date of
this Guaranty, or to any amendment of or supplement to any agreement relating to
any Debt greater than $10,000,000, if, in any such

                                       24
<PAGE>   28

case, the Guarantor or any Subsidiary is agreeing therein to any financial
covenants of a type specified in this Guaranty, which are more restrictive than
the covenants set forth herein, or to other financial covenants expressly
requiring the Guarantor or any Subsidiary to comply with similar computable
standards of financial condition or performance, unless the Guarantor offers to
amend this Guaranty so as to provide the benefit of similar covenants for the
benefit of the holders of the Notes for so long as such covenants are in full
force under such agreement, amendment or supplement. Any such offer shall be
made in writing to the holders of the Notes prior to being effected in any such
agreement, amendment or supplement and, absent such offer, shall be deemed to be
incorporated herein mutatis mutandis for the benefit of the holders of the Notes
for so long as such covenants are in full force under such agreement, amendment
or supplement unless and until the Required Holder(s) shall otherwise consent
thereto.

         6.   EVENTS OF DEFAULT; REMEDIES

         6.1. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "EVENT OF DEFAULT" under this Guaranty:

                  (i) the Guarantor or any Subsidiary defaults in any payment of
         principal of or interest on any obligation for money borrowed (or any
         Capitalized Lease Obligation, any obligation under a conditional sale
         or other title retention agreement, any obligation issued or assumed as
         full or partial payment for property whether or not secured by a
         purchase money mortgage or any obligation under notes payable or drafts
         accepted representing extensions of credit) beyond any period of grace
         provided with respect thereto (excluding, however, such a default by
         the Company in respect of the Notes), or the Guarantor or any
         Subsidiary fails to perform or observe any other agreement, term or
         condition contained in any agreement under which any such obligation is
         created (or if any other event thereunder or under any such agreement
         shall occur and be continuing) and the effect of such failure or other
         event is to cause, or to permit the holder or holders of such
         obligation (or a trustee on behalf of such holder or holders) to cause,
         such obligation to become due prior to its stated maturity (excluding,
         however, such a failure or other event under the Note Agreement) or any
         such obligation shall mature and remain unpaid, provided, that the
         aggregate amount of all obligations as to which such a payment default
         shall occur and be continuing or such a failure or other event causing
         or permitting acceleration shall occur and be continuing exceeds
         $10,000,000; or

                  (ii) any representation or warranty made (a) by the Guarantor
         herein or in any writing furnished in connection with or pursuant to
         this Guaranty, the Note Agreement or the transactions contemplated
         thereby, or (b) by Herald to or in favor of the holders, or upon which
         the holders have been authorized by Herald to rely, shall be false in
         any material respect on the date as of which made; or

                  (iii) the Guarantor fails to perform or observe any term,
         covenant or agreement contained in Sections 2 or 5 of this Guaranty; or


                                       25
<PAGE>   29

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

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

                  (vi)   any decree, judgment, or order for relief in respect of
         the Guarantor or any Subsidiary (other than a Subsidiary of the Company
         that is not a Material Subsidiary) is entered under any bankruptcy,
         reorganization, compromise, arrangement, insolvency, readjustment of
         debt, dissolution or liquidation or similar law, whether now or
         hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
         jurisdiction; or

                  (vii)  the Guarantor or any Subsidiary (other than a
         Subsidiary of the Company that is not a Material Subsidiary) petitions
         or applies to any tribunal for, or consents to, the appointment of, or
         taking possession by, a trustee, receiver, custodian, liquidator or
         similar official of the Guarantor or any such Subsidiary, or of any
         substantial part of the assets of the Guarantor or any such Subsidiary,
         or commences a voluntary case under the Bankruptcy Law of the United
         States or any proceedings (other than proceedings for the voluntary
         liquidation and dissolution of any such Subsidiary) relating to the
         Guarantor or any such Subsidiary under the Bankruptcy Law of any other
         jurisdiction; or

                  (viii) any such petition or application is filed, or any such
         proceedings are commenced, against the Guarantor or any Subsidiary
         (other than a Subsidiary of the Company that is not a Material
         Subsidiary) and the Guarantor or such Subsidiary by any act indicates
         its approval thereof, consent thereto or acquiescence therein, or an
         order, judgment or decree is entered appointing any such trustee,
         receiver, custodian, liquidator or similar official, or approving the
         petition in any such proceedings, and such order, judgment or decree
         remains unstayed and in effect for more than 60 days; or

                  (ix)   any order, judgment or decree is entered in any
         proceedings against the Guarantor or any Subsidiary (other than a
         Subsidiary of the Company that is not a Material Subsidiary) decreeing
         the dissolution of the Guarantor or such Subsidiary and such order,
         judgment or decree remains unstayed and in effect for more than 60
         days; or

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

                  (xi)   (a) any Plan shall fail to satisfy the minimum funding
         standards of ERISA or the Code for any plan year or part thereof or a
         waiver of such standards or extension of any amortization period is
         sought or granted under section 412 of the

                                       26

<PAGE>   30

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

         6.2. REMEDIES. Upon the occurrence of an Event of Default under this
Guaranty, the Required Holder(s) may, at its or their option, exercise any and
all remedies available to it or them, whether under the Note Agreement or any
other instrument or agreement entered into in connection therewith or relating
thereto or otherwise at law or in equity.

         7.   MISCELLANEOUS

         7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Guarantor in connection herewith shall survive the execution and
delivery of this Guaranty, the purchase or transfer of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any subsequent holder of Notes, regardless of any investigation made at any
time by or on behalf of any other holder of Notes. All statements contained in
any certificate or other instrument delivered by or on behalf of the Guarantor
pursuant to or in connection with this Guaranty shall be deemed representations
and warranties of the Guarantor under this Guaranty. Subject to the preceding
sentence, this Guaranty embodies the entire agreement and understanding between
the Guarantor and the holders of the Notes and supersedes all prior agreements
and understandings relating to the subject matter hereof.

         7.2. CONSENT TO AMENDMENTS. This Guaranty may be amended, and the
Guarantor may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Guarantor shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s),
except that (i) no amendment or waiver of any of the provisions of Section 2
hereof or any defined term (as it is used therein) and (ii) no termination of
this Guaranty in its entirety or release of the Guarantor herefrom will be

                                       27
<PAGE>   31


effective unless consented to in writing by the holder or holders of all Notes
at the time outstanding. The Guarantor will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

         7.3. BINDING EFFECT, ETC. Any amendment or waiver consented to as
provided in Section 7.2 hereof applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and the Guarantor
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Guarantor
and any holder of Notes nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note.

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

         7.5. SEVERABILITY. Any provision of this Guaranty 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.

         7.6. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Guaranty shall bind the successors and assigns of the Guarantor and shall inure
to the benefit of the successors and assigns of the holders of Notes (including,
without limitation, any Transferee) whether so expressed or not.

         7.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not (i) avoid the occurrence of an Event of


                                       28
<PAGE>   32



Default or Default if such action is taken or such condition exists or (ii) in
any way prejudice an attempt by the holders of Notes to prohibit (through
equitable action or otherwise) the taking of any action by the Guarantor or a
Subsidiary which would result in an Event of Default or Default.

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

         7.9. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.

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

         7.11. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. The Guarantor
hereby irrevocably submits to the jurisdiction of any New York state or Federal
court sitting in New York in any action or proceeding arising out of or relating
to this Guaranty, and the Guarantor hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in New York
state or Federal court. The Guarantor hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Guarantor agrees and irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing, by registered or certified U.S. mail, or by any other means or
mail that requires a signed receipt, of copies of such process to the Guarantor
at its address set forth in section 7.4. The Guarantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 7.10 shall affect the right of any
holder of the Notes to serve legal process in any other manner permitted by law
or affect the right of any holder of the Notes to bring any action or proceeding
against the Guarantor or its property in the courts of any other jurisdiction.
To the extent that the Guarantor has or hereafter may acquire immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Guarantor hereby
irrevocably waives such immunity in respect of its obligations under this
Guaranty.

         7.12. WAIVER OF JURY TRIAL. THE GUARANTOR AND THE HOLDERS OF THE NOTES
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY, THE NOTE AGREEMENT, THE
NOTES, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION AND THE LENDER/GUARANTOR RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE HOLDERS OF
THE NOTES AND THE GUARANTOR EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS


<PAGE>   33
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE HOLDERS OF THE NOTES AND THE GUARANTOR FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

                  IN WITNESS WHEREOF, the undersigned has caused this Guaranty
to be executed and delivered by its duly authorized officer as of the date first
above written to become effective as of such date.

                                  PULITZER INC.



                                  By: /s/Ronald H. Ridgway
                                     ------------------------------------------
                                  Name:  Ronald H. Ridgway
                                  Title: Senior Vice President - Finance


<PAGE>   34
                                  SCHEDULE 5.4


                        LOANS, ADVANCES AND INVESTMENTS
<TABLE>
<CAPTION>
                                                                                             Cost
                                                               Par Value                 As of 3/26/00
                                                               ---------                 -------------
<S>                                                            <C>                    <C>
Corporate Notes & Bonds:
  Comdisco Inc. Note                                               $750,000                   $749,947
  Kroger Co. Senior Note                                          1,755,000                  1,754,857
  Capital One Bank Medium Term Senior Notes                       1,500,000                  1,501,282
  Golden State Escrow Corp. Floating Rate Note                    2,000,000                  1,973,016
  Jones Intercable Inc. (Comcast Corp.)                           2,000,000                  2,111,858
  Korean Development Bank Bond                                    1,250,000                  1,272,402
  Niagara Mohawk Power Corp. Senior Disc Note                     1,575,000                  1,222,601
  Pohang Iron & Steel Note                                          800,000                    793,339
  Rite Aid Corp. Note                                             2,000,000                  1,935,859
  Sovereign Bancorp Inc. Note                                     2,300,000                  2,292,714


Municipal Bonds:
  Austin Texas Utilities                                          2,360,000                  2,458,700
  Columbus Ohio Water Systems                                     3,295,000                  3,323,300
</TABLE>

<TABLE>
<CAPTION>

                                                                                         Approximate
                                                                                          Cost Basis
                                                                                        As of 4/30/00
                                                                                      -----------------
<S>                                                                                   <C>
Employee Loans                                                                                   70,000

St. Louis EquityFund                                                                            477,564

Split Dollar Life Insurance Policies                                                          2,410,538

Sandler 21st Century Communications Partners, L.P.                                            3,078,859

Sandler Capital Partners IV, L.P.(a)
                                                                                             10,293,784
Ad One LLC                                                                                    2,542,353

I Own Holdings, Inc.                                                                          2,009,781

Next Generation Network                                                                       1,999,998

Hire.com, Inc.                                                                                1,010,878

Koz.com, Inc.                                                                                 1,001,026

Entry Point Incorporated                                                                        200,000
</TABLE>
(a) Amount includes the remaining commitment Of $910,779 due under the
    investment agreement.
<PAGE>   35

                                                                       EXHIBIT A

                        [FORM OF COMPLIANCE CERTIFICATE]

                             COMPLIANCE CERTIFICATE

                                 (PULITZER INC.)

                                   [FOR THE FISCAL QUARTER ENDING _____________]
                                      [FOR THE FISCAL YEAR ENDING _____________]

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

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


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

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

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

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


<PAGE>   36

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

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

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



                                 -------------------------------------
                                 [NAME], [TITLE]



                                       2

<PAGE>   37


                                                                         ANNEX A

                                   COVENANT
<TABLE>
<CAPTION>
COVENANTS                                                                                               Compliance
---------                                                                                            [Indicate Yes/No]
<S>                                                                             <C>                   <C>
1.        Consolidated Debt to EBITDA Ratio (Section 5.1(i))
          --------------------------------------------------
          The ratio of
                  (i)    Consolidated Debt(1) as of the last day of the
          fiscal quarter most recently ended to                                 $
                                                                                 -------------
                  (ii)   EBITDA(2) for the four fiscal quarters most
          recently ended                                                        $
                                                                                 -------------
          must not be greater than 4.25 to 1.00
                                                                                        to 1.00       -------------
                                                                                 -------
2.        Consolidated Net Worth (Section 5.1(ii))
          ----------------------------------------
          Commencing with the fiscal quarter ending June 30, 2000, Consolidated
          Net Worth(3) as of the last day of the fiscal quarter most recently
          ended                                                                 $
                                                                                 -------------

          must not be less than (a) $650,000,000 plus (b) the product of        $
                                                                                 -------------        -------------
          (x) $3,750,000 multiplied by (y) the number of fiscal quarters
          that have ended since the Date of Closing, to and including the
          fiscal quarter ended on such measurement date

3.        Limitation on Priority Debt (Section 5.3)
          -----------------------------------------
          Priority Debt(4) (including Debt secured by Liens permitted by        $
                                                                                 -------------
          Section 5.2)

          Capitalization(5) as of the last day of the fiscal quarter most
          recently ended                                                        $
                                                                                 -------------

          Percentage of Capitalization as of the last day of the fiscal
          quarter most recently ended                                                         %
                                                                                 -------------
          must not exceed 15% of Capitalization as of the last day of the
          fiscal quarter most recently ended                                                          -------------

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

-------------------------------
(1)      See Schedule 1, Item 1.
(2)      See Schedule 1, Item 2.
(3)      See Schedule 1, Item 3.
(4)      See Schedule 1, Item 4.
(5)      See Schedule 1, Item 5


                                      A-1



<PAGE>   38

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

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

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

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

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

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

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

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

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

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

          (x)  own, purchase or acquire obligations of the


                                      A-2

<PAGE>   39

     United States government or any agency thereof;

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

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

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

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

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

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

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

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

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

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


                                       A-3


<PAGE>   40


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

<TABLE>
<S>                                                                             <C>                 <C>
                                                                                $
                                                                                 -------------
                                        Consolidated Net Worth                  $
                                                                                 -------------
                                        Percentage of Consolidated Net Worth                 %
                                                                                 -------------
                                        (xxi) must not exceed 6% of Consolidated
                                        Net Worth                                                   -------------
</TABLE>

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

     Aggregate of capital assets sold or disposed of outside of the ordinary
     course of business during the fiscal year in which the period covered by
     this Compliance Certificate occurs
<TABLE>

<S>                                                                             <C>
                                                                                $
                                                                                 -------------
     Consolidated Total Assets at beginning of such fiscal year                 $
                                                                                 -------------
                                                                                              %
     Percentage of Consolidated Total Assets at the beginning of such            -------------
     fiscal year

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

                                                                                $
                                                                                 -------------

                                                                                $
                                                                                 -------------
</TABLE>




                                      A-4

<PAGE>   41

<TABLE>
<S>                                                                              <C>
     Percentage of EBITDA for each such year contributed by assets                            %
     sold or disposed of                                                         -------------
                                                                                              %
                                                                                 -------------
                                                                                              %
                                                                                 -------------

     must not involve assets totaling 10% or more of Consolidated Total Assets
     at the beginning of such fiscal year or contributing 10% or more of EBITDA
     for any of the three fiscal years then most recently ended (or such shorter
     period during which such assets were owned by the Guarantor or a
     Subsidiary) UNLESS, (i) the net proceeds (including the cash value of any
     securities received but deducting all expenses of sale and sales and
     transfer taxes and applicable Federal and state income taxes) from such
     sale or disposition are within 12 months from receipt invested in
     businesses substantially similar to any line of business in which the
     Guarantor or any Subsidiary has been continuously engaged since the date of
     issuance of the Notes or (ii) within 12 months after receipt of such net
     proceeds, an amount equal to such net proceeds is applied to the pro rata
     prepayment (based on outstanding principal amounts) of (a) the principal of
     the Notes then outstanding (in accordance with paragraph 4A of the Note
     Agreement, and together with all accrued interest on, and Yield-Maintenance
     Amount, if any, payable with respect to, the Notes) and (b) all other Debt
     of the Guarantor and its Subsidiaries consisting of obligations for
     borrowed money.
                                                                                 -------------
     6. Limitations on Sale and Leaseback (Section 5.6)
     The Guarantor will not, and will not permit any Subsidiary to, enter into
     any arrangement with any lender or investor or under which such lender or
     investor is a party, providing for the leasing or other similar arrangement
     by the Guarantor or any Subsidiary of real or personal property used by the
     Guarantor or any Subsidiary in the operations of the Guarantor or any
     Subsidiary, which has been or is sold or transferred by the Guarantor or
     any Subsidiary to such lender or investor or to any Person to whom funds
     have been or are to be advanced by such lender or investor on the security
     of such rental obligations of the Guarantor or such Subsidiary, EXCEPT that
     the Guarantor or any Subsidiary (other than the Company) may enter into
     sale and lease-back transactions involving newspaper equipment or
     facilities acquired after the issuance of the Notes if (i) such arrangement
     is for a period of less than three years by the end of which the use of
     such property by the lessee will be discontinued, (ii) the net proceeds of
     such sale are applied to the retirement of Debt, (iii) the net proceeds of
     the sale are used to purchase other property having a value at least equal
     to such net proceeds, (iv) the property immediately prior to such sale
     could have been subjected to a Lien securing Debt in an amount equal to
     such net proceeds and which Lien would have been permitted by clause (xi)
     of Section 5.2, or (v) the transaction represents a sale by a Subsidiary
     (other than the Company) to the Guarantor or another Subsidiary or by the
     Guarantor to a Subsidiary.
                                                                                 -------------
</TABLE>

                                      A-5

<PAGE>   42


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

<S>                                                                             <C>                 <C>
     Consolidated Total Assets at beginning of such fiscal year                 $
                                                                                 -------------

     Consolidated Total Assets represented by assets of Subsidiary              $
                                                                                 -------------
     Percentage of Consolidated Total Assets represented by
     assets of Subsidiary                                                                     %
                                                                                 -------------
     EBITDA for each of the three fiscal years then most recently ended         $
                                                                                 -------------

                                                                                $
                                                                                 -------------

                                                                                $
                                                                                 -------------
                                                                                              %
     Percentage of EBITDA for each such year contributed by                      -------------
                                                                                              %
     Subsidiary                                                                  -------------
                                                                                              %
                                                                                 -------------

     the assets of such Subsidiary must not constitute more than 10% of
     Consolidated Total Assets at the beginning of the fiscal year in which such
     sale or disposition is to occur and such Subsidiary must not have
     contributed more than 10% of EBITDA for any of the three fiscal years then
     most recently ended, unless such transaction was subject to, and in
     compliance with, Section 5.5.

                                                                                                    -------------
</TABLE>



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

                                      A-6

<PAGE>   43


     EBITDA for any of the three fiscal years most recently ended, to issue,
     sell or dispose of any shares of its stock (of any class) or any other
     equity interests except to the Guarantor or another Subsidiary.
<TABLE>

<S>                                                                             <C>                 <C>
     Consolidated Total Assets at beginning of such fiscal year                 $
                                                                                 -------------

     Consolidated Total Assets represented by assets of Subsidiary              $
                                                                                 -------------
     Percentage of Consolidated Total Assets represented by assets of                         %
     Subsidiary                                                                  -------------

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

                                                                                $
                                                                                 -------------

                                                                                $
                                                                                 -------------

     Percentage of EBITDA for each such year contributed by Subsidiary                        %
                                                                                 -------------
                                                                                              %
                                                                                 -------------
                                                                                              %
                                                                                 -------------

     the assets of such Subsidiary must not constitute more than 10% of
     Consolidated Total Assets at the beginning of the fiscal year in which such
     issuance, sale or disposition is to occur and the Subsidiary must not have
     contributed more than 10% of EBITDA for any of the three fiscal years                          -------------
     most recently ended.

</TABLE>


                                      A-7


<PAGE>   44
                 SCHEDULE 1 TO ANNEX A TO COMPLIANCE CERTIFICATE
<TABLE>
<S>                                                                             <C>
1.       Consolidated Debt
         -----------------

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

                  (ii)   Capitalized Lease Obligations;                         $
                                                                                 -------------
                  (iii)   indebtedness secured by any Lien existing on property
         owned by the Guarantor or any Subsidiary subject to such Lien, whether
         or not the indebtedness secured thereby shall have been assumed by the
         Guarantor or any Subsidiary;                                           $
                                                                                 -------------
                  (iv)   guarantees, endorsements (other than endorsements of
         negotiable instruments for collection in the ordinary course of
         business) and other contingent liabilities (whether direct or indirect)
         in connection with the obligations, stock or dividends of any Person;  $
                                                                                 -------------
                  (v)    obligations under any contract providing for the making
         of loans, advances or capital contributions to any Person, or for the
         purchase of any property from any Person, in each case in order to
         enable such Person primarily to maintain working capital, net worth or
         any other balance sheet condition or to pay debt, dividends or
         expenses;                                                              $
                                                                                 -------------
                  (vi)   obligations under any contract for the purchase of
         materials, supplies or other property from any Person if such contract
         (or any related document) requires that payment for such materials,
         supplies or other property shall be made regardless of whether or not
         delivery of such materials, supplies or other property is ever made or
         tendered;                                                              $
                                                                                 -------------
                  (vii)  obligations under any contract to rent or lease (as
         lessee) any real or personal property if such contract (or any related
         document) provides that the obligation to make payments thereunder is
         absolute and unconditional under conditions not customarily found in
         commercial leases then in general use or requires that the lessee
         purchase or otherwise acquire securities or obligations of the lessor;
                                                                                $
                                                                                 -------------
                  (viii) obligations under any contract for the sale or use
         of materials, supplies or other property, or the rendering of services,
         if such contract (or any related document) requires that payment for
         such materials, supplies or other property, or the use thereof, or
         payment for such services, shall be subordinated to any indebtedness
         (of the purchaser or user of such materials, supplies or other property
         or the Person entitled to the benefit of such services) owed or to be
         owed to any Person;                                                    $
                                                                                 -------------
                  (ix)   obligations under any other contract which, in economic
         effect, is substantially equivalent to a guarantee;                    $
                                                                                 -------------
         SUBTOTAL [(i)+(ii)+(iii)+(iv)+(v)+(vi)+(vii)+(viii)+(ix)]              $
                                                                                 -------------
                  (x)    But excluding (a) loans, advances and capital
         contributions by the Guarantor to any Subsidiary or by any Subsidiary
         to the Guarantor or another Subsidiary or a guarantee of the
         obligations of a Subsidiary under an executory contract to purchase or
         sell a business and (b) any amounts which may be due in connection with
         the "Gross-Up Transactions" described in Note 15 of the audited
         consolidated financial statements of the Guarantor and its Subsidiaries
         for the fiscal year ended December 31, 1999, as incorporated in the
         Guarantor's annual report on Form 10-K filed with the Securities and
         Exchange Commission

         CONSOLIDATED DEBT [SUBTOTAL above - (x)]                               $
                                                                                 =============
2.       EBITDA

                  (i)    Consolidated Net Earnings (determined as set forth in
         Item 2.1 below),                                                       $
                                                                                 -------------
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<S>                                                                             <C>

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

                         (a)  all provisions for federal, state and other income
                              tax                                               $
                                                                                 -------------
                         (b)  Consolidated Interest Expense (determined as set
                              forth in Item 2.2 below) and                      $
                                                                                 -------------
                         (c)  provisions for depreciation and amortization      $
                                                                                 -------------
                  Subtotal of (a), (b) and (c)                                  $
                                                                                 -------------
                  EBITDA [(i) + (ii)]                                           $
                                                                                 =============
         Note: Any acquisition or disposition by the Guarantor or any
         Subsidiary during any period of all of the capital stock of (or other
         equity interests in) any Person, or of all or substantially all of the
         assets of any Person, shall in each case be reflected and given effect
         in EBITDA as if such acquisition or disposition occurred on the first
         day of such period, so long as, in the case of any such acquisition,
         the Guarantor shall have delivered or caused to be delivered to each
         holder of Notes financial information, set forth within audited
         financial statements regarding such Person, disclosing the prior
         operating results of such Person, and provided further, that for
         purposes of calculating EBITDA, the consummation of the
         Formation/Consummation Transactions will be taken into account by
         including, on a pro forma basis, Herald's share of EBITDA for periods
         prior to the Date of Closing, as derived from the "St. Louis Agency
         adjustment" reflected in prior consolidated financial statements.

2.1      Consolidated Net Earnings
         -------------------------

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

2.2      Consolidated Interest Expense
         -----------------------------

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

                  (i)    all interest and prepayment charges in respect of Debt
         of the Guarantor and its Subsidiaries (including imputed interest in
         respect of Capitalized Lease obligations and net costs of any interest
         rate or currency hedging or similar arrangements) deducted in
         determining consolidated net income for such period, together with all
         interest capitalized or deferred during
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<S>                                                                             <C>

         such period and not deducted in determining consolidated net income for
         such period plus                                                       $
                                                                                 -------------
                  (ii)   all debt discount and expense amortized or required to
         be amortized in the determination of consolidated net income for such
         period                                                                 $
                                                                                 -------------
         CONSOLIDATED INTEREST EXPENSE [(i) + (ii)]                             $
                                                                                 =============

3.       CONSOLIDATED NET WORTH

                  (i)    Total amount of total assets of the Guarantor and its
         Subsidiaries as of the last day of the fiscal quarter most recently
         then ended, determined on a consolidated basis in accordance with
         generally accepted accounting principles less                          $
                                                                                 -------------
                  (ii)   Total liabilities of the Guarantor and its Subsidiaries
         as of the last day of the fiscal quarter most recently then ended,
         determined on a consolidated basis in accordance with generally
         accepted accounting principles.                                        $
                                                                                 -------------
         CONSOLIDATED NET WORTH [(i) - (ii)]                                    $
                                                                                 =============
4.       PRIORITY DEBT                                                          $
                                                                                 =============
                  (i)    Aggregate amount of all Debt of the Guarantor secured
         by a Lien plus                                                         $
                                                                                -------------
                  (ii)   All secured and unsecured Debt of all Subsidiaries
         (excluding Debt represented by the Notes)                              $
                                                                                 -------------
         PRIORITY DEBT [(i) + (ii)]                                             $
                                                                                 =============
5.       CAPITALIZATION

                  (i)    Consolidated Net Worth plus                            $
                                                                                 -------------
                  (ii)   Consolidated Debt                                      $
                                                                                 -------------
         CAPITALIZATION [(i) + (ii)]                                            $
                                                                                 ==============

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