Document:

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                                                                    EXHIBIT 10.7

                                MASTER AMENDMENT

         This MASTER AMENDMENT (this "Amendment"), dated as of April 18, 2000,
is by and between Green Equity Investors II, L.P., a Delaware limited
partnership ("GEI II"), Green Equity Investors III, L.P., a Delaware limited
partnership ("GEI III"), Liberty Group Publishing, Inc., a Delaware corporation
(the "Company"), and the persons listed on Schedule I hereto attached (the
"Management Investors"). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Stockholders Agreement.

                                    RECITALS

         A. GEI II is currently a stockholder in the Company, holding shares of
common stock, par value $0.01 per share ("Common Stock"), and other securities,
of the Company.

         B. The Company, GEI II and the Management Investors are parties to the
following agreements: (i) that certain Management Stockholders Agreement dated
as of January 28, 1998 by and among the Company, GEI II and Kenneth L. Serota
(the "Serota Agreement"); (ii) that certain Amended and Restated Management
Subscription and Stockholders Agreement dated as of February 1, 2000 by and
among the Company, GEI II and Scott Champion; (iii) that certain Amended and
Restated Management Subscription and Stockholders Agreement dated as of February
1, 2000 by and among the Company, GEI II and Gene Hall; (iv) that certain
Amended and Restated Management Subscription and Stockholders Agreement dated as
of February 1, 2000 by and among the Company, GEI II and Kevin B. O'Shea; (v)
that certain Amended and Restated Management Subscription and Stockholders
Agreement dated as of February 1, 2000 by and among the Company, GEI II and R.
Scott Koon; (vi) that certain Amended and Restated Management Subscription and
Stockholders Agreement dated as of February 1, 2000 by and among the Company,
GEI II and Kelly Luvison; (vii) that certain Amended and Restated Management
Subscription and Stockholders Agreement dated as of February 1, 2000 by and
among the Company, GEI II and Theodore Mike; (viii) that certain Amended and
Restated Management Subscription and Stockholders Agreement dated as of February
1, 2000 by and among the Company, GEI II and Carter Zerbe; (ix) that certain
Management Subscription and Stockholders Agreement dated as of February 1, 2000
by and among the Company, GEI II and Gerald R. Smith; (x) that certain
Management Subscription and Stockholders Agreement dated as of February 1, 2000
by and among the Company, GEI II and Randy Cope; (xi) that certain Management
Subscription and Stockholders Agreement dated as of February 1, 2000 by and
among the Company, GEI II and Larry Randa; and (xii) that certain Management
Subscription and Stockholders Agreement dated as of February 1, 2000 by and
among the Company, GEI II and Louie Seesz (collectively, the "Management
Agreements" and, together with the Serota Agreement, the "Stockholders
Agreements").

         C. GEI II has certain rights and obligations under and pursuant to the
Stockholders Agreements.

         D. The Company and GEI III have entered into that certain Stock
Purchase Agreement dated as of the date hereof (the "GEI III Stock Purchase
Agreement"), pursuant to which GEI III will purchase shares of Common Stock and
other securities of the Company, upon the terms and conditions thereof.
<PAGE>   2
         E. As a condition to the consummation of the transactions contemplated
by the GEI III Stock Purchase Agreement, the parties hereto desire to amend the
Stockholders Agreements as set forth herein.

                                   AGREEMENTS

         In consideration of the recitals and the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

         1. Agreement to be Bound. GEI III hereby agrees to become a party to,
and bound by, each of the Stockholders Agreements in the manner set forth
therein, as amended by this Amendment.

         2. Definitions. For purposes of each of the Stockholders Agreements,
the following terms shall have the following meanings:

         "GEI III" shall mean Green Equity Investors III, L.P., a Delaware
limited partnership.

         "GEI III Stock Purchase Agreement" shall mean that certain Stock
Purchase Agreement, dated as of April 18, 2000, between the Company and GEI III.

         "Green Entities" shall mean GEI and GEI III.

         3. Waiver of Right of First Refusal. Kenneth L. Serota hereby waives
his right pursuant to Section 7 of the Serota Agreement to purchase shares of
Common Stock or other securities of the Company to be issued pursuant to the GEI
III Stock Purchase Agreement.

         4. Amendments to Stockholders Agreements.

         (a) The word "uncertificated" in the second "Whereas" clause of each of
the Management Agreements is hereby deleted.

         (b) Section 3 of the Management Agreements and Section 4, 5, 11 and 13
of each of the Stockholders Agreements are hereby amended by deleting each
reference to "GEI" in any such section and inserting a reference to the "Green
Entities" in its place.

         (c) Section 4(b) of each of the Stockholders Agreements is hereby
amended by adding the following at the end thereof:

         "In the event both GEI and GEI III desire to exercise such option, each
         of GEI and GEI III shall have the right to purchase its Pro Rata
         Percentage of the Common Stock held by the Seller, or such other
         percentage as the Green Entities may mutually agree. For purposes
         hereof, "Pro Rata Percentage" means that percentage represented by the
         fraction, the numerator of which is the number of shares of Common
         Stock owned by such Green Entity and the denominator of which is the
         aggregate number of shares of Common Stock owned by the Green Entities"
<PAGE>   3
         (d) Section 7 of each of the Management Agreements and Section 8 of the
Serota Agreement are hereby amended as follows:

                  (i) The phrase "GEI's Common Stock" in Section 7(b) of each of
the Management Agreements and Section 8(b) of the Serota Agreement is deleted
and the phrase "the Common Stock held by GEI or GEI III" is inserted in its
place.

                  (ii) Each other reference to "GEI" in the first paragraph of
Section 7(b) of each of the Management Agreements and Section 8(b) of the Serota
Agreement is deleted and the phrase "GEI or GEI III" is inserted in its place.

                  (iii) The second paragraph of Section 7(b) of each of the
Management Agreements is amended by deleting the balance of such paragraph after
the phrase "if any," in the fifth line thereof and inserting the following in
place thereof:

                  "of the shares of Common Stock held by the Green Entities as
                  of the date of the consummation of the transactions
                  contemplated by the GEI III Stock Purchase Agreement sold by
                  either of the Green Entities in private transactions from such
                  date to the date of such request."

         (e) Section 8 of each of the Management Agreements and Section 9 of the
Serota Agreement are hereby amended as follows:

                  (i) The reference to "GEI" in the first line of paragraph 8(a)
of the Management Agreements and paragraph 9(a) of the Serota Agreement is
deleted and the phrase "GEI or GEI III (a "Tag-Along Seller")" is inserted in
its place.

                  (ii) Each other reference to "GEI" in Section 8 of the
Management Agreements and Section 9 of the Serota Agreement is deleted and the
phrase the "Tag-Along Seller" is inserted in its place.

         (f) Section 9 of each of the Management Agreements and Section 10 of
the Serota Agreement are hereby amended as follows:

                  (i) The first two references to "GEI" in Section 9 of the
Management Agreements and Section 10 of the Serota Agreement are hereby deleted
and the phrase "either of the Green Entities" are inserted in their place.

                  (ii) The other references to "GEI" in Section 9 of the
Management Agreements and Section 10 of the Serota Agreement are hereby deleted
and the phrase "such Green Entity" is inserted in their place.

                  (iii) Each reference to a singular pronoun relating to GEI in
Section 9 of the Management Agreements and Section 10 of the Serota Agreement
shall be a reference to a plural pronoun relating to either, or both, of the
Green Entities.

                  (iv) Each reference to the singular tense of a verb relating
to GEI in Section 9 of the Management Agreements and Section 10 of the Serota
Agreement shall be a reference to the plural tense of such verb relating to
either, or both, of the Green Entities.
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         (g) The references to "GEI" in Section 14 of each of the Stockholders
Agreements are hereby deleted and the phrase "any of the Green Entities" is
inserted in their place.

         5. Reference to and Effect on the Stockholders Agreements.

         (a) Upon the effectiveness of this Amendment, each reference in any of
the Stockholders Agreements to "this Agreement", "hereunder", "hereof",
"herein", or words of like import shall mean and be a reference to such
Stockholders Agreement as amended hereby, and each reference to any of the
Stockholders Agreements in any other document, instrument or agreement shall
mean and be a reference to such Stockholder Agreement as amended hereby.

         (b) Except as specifically amended above, each of the Stockholders
Agreements shall remain in full force and effect and is hereby ratified and
confirmed.

         (c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any party hereto under
any of the Stockholders Agreements nor constitute a waiver of any provision
contained therein, except as specifically set forth herein.

         6. Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
                            [SIGNATURE PAGES FOLLOW]
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         This Master Amendment is executed the date first written above.

                                 GREEN EQUITY INVESTORS II, L.P.
                                 BY:  GRAND AVENUE CAPITAL PARTNERS, L.P., ITS
                                      GENERAL PARTNER
                                 BY:  GRAND AVENUE CAPITAL CORPORATION,
                                      ITS GENERAL PARTNER

                                 By:         /s/  Peter J. Nolan
                                     -------------------------------------------
                                 Its:
                                     -------------------------------------------

                                 GREEN EQUITY INVESTORS III, L.P.
                                 BY:  GEI CAPITAL III, LLC, ITS GENERAL PARTNER

                                 By:         /s/  Peter J. Nolan
                                     -------------------------------------------
                                 Its:
                                     -------------------------------------------

                                 LIBERTY GROUP PUBLISHING, INC.

                                 By:         /s/  Kenneth L. Serota
                                     -------------------------------------------
                                 Its:           President and CEO

                                             /s/  Kenneth L. Serota
                                 -----------------------------------------------
                                 Kenneth L. Serota

                                             /s/  Scott Champion
                                 -----------------------------------------------
                                 Scott Champion

                                             /s/  Gene Hall
                                 -----------------------------------------------
                                 Gene Hall
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                                             /s/  Kevin O'Shea
                                 -----------------------------------------------
                                 Kevin O'Shea

                                             /s/  R. Scott Koon
                                 -----------------------------------------------
                                 R. Scott Koon

                                             /s/  Kelly Luvison
                                 -----------------------------------------------
                                 Kelly Luvison

                                             /s/  Theodore Mike
                                 -----------------------------------------------
                                 Theodore Mike

                                             /s/  Carter Zerbe
                                 -----------------------------------------------
                                 Carter Zerbe

                                             /s/  Gerald R. Smith
                                 -----------------------------------------------
                                 Gerald R. Smith

                                             /s/  Randy Cope
                                 -----------------------------------------------
                                 Randy Cope

                                             /s/  Larry Randa
                                 -----------------------------------------------
                                 Larry Randa

                                             /s/  Louie Seesz
                                 -----------------------------------------------
                                 Louie Seesz

                                   SCHEDULE 1
<PAGE>   7
Kenneth L. Serota
Scott Champion
Gene Hall
Kevin B. O'Shea
R. Scott Koon
Kelly Luvison
Theodore Mike
Carter Zerbe
Gerald R. Smith
Randy Cope
Larry Randa
Louie Seesz<PAGE>   1
                                                                    EXHIBIT 10.8

                       MANAGEMENT STOCK PURCHASE AGREEMENT

         This Management Stock Purchase Agreement (the "Agreement") is entered
into as of December 15, 2000, by and between Liberty Group Publishing, Inc., a
Delaware corporation (the "Company"), Green Equity Investors II, L.P., a
Delaware limited partnership ("Green II"), Green Equity Investors III, L.P., a
Delaware limited partnership ("Green III"), and Kevin O'Shea (hereinafter
referred to as the "Management Investor"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Stockholders
Agreement referred to below.

         WHEREAS, Management Investor is a key employee of the Company or one of
its subsidiaries and, accordingly, as an incentive to the Management Investor,
the Company desires to issue and sell uncertificated shares of the Company's
common stock, par value $0.01 per share (the "Common Stock") to the Management
Investor as set forth herein; and

         WHEREAS, Management Investor desires to purchase such shares of Common
Stock as set forth herein;

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

         1. Purchase of Common Stock.

                  (a) The Company agrees to issue and sell to the Management
Investor, and the Management Investor agrees to purchase from the Company, on
the date hereof, 5,794 shares of Common Stock (the "Equity"), for a purchase
price equal to $15.00 per share. The Equity shall be issued and sold to the
Management Investor free and clear of all liens, other than restrictions and
legends pursuant to federal or state securities laws, the Amended and Restated
Management Subscription and Stockholders Agreement dated as of February 1, 2000,
by and between Management Investor, the Company and Green II, as amended by that
certain Master Amendment dated as of April 18, 2000 pursuant to which Green III
became a party to such agreement (the "Stockholders Agreement") and the Pledge
Agreement referred to below. For avoidance of doubt, the Equity shall be
considered to be "Common Stock" for all purposes of the Stockholders Agreement.
The Equity issued hereunder shall be uncertificated shares and shall be subject
to all of the terms and restrictions contained in the Stockholders Agreement,
including, without limitation: Section 3 (Transfer of Stock); Section 7
(Piggyback Registration Rights); Section 8 (Tag-Along Rights) and Section 9
(Drag-Along Sales), except that the provisions of Section 4 (Company "Call"
Option) shall not apply to the Equity. Subject to the limitations set forth in
Section 2 of the Stockholders Agreement, the Management Investor shall be
entitled, upon written request to the Company, to have a certificate issued to
him or her representing the Equity issued hereunder.

                  (b) The Management Investor may pay 65% of the aggregate
purchase price for the Equity by issuing to the Company a non-recourse
promissory note in the form attached hereto as EXHIBIT A and the balance of the
aggregate purchase price for the Equity by issuing to the Company a full
recourse promissory note in the form attached hereto as EXHIBIT B
<PAGE>   2
(collectively, the "Equity Notes"). The percentage of the principal and accrued
interest under the Equity Notes equal to the percentage of the Equity held by
the Management Investor and sold in any Sales Event (as hereinafter defined)
shall become due and payable upon the consummation of such Sale Event. The
entire principal amount and accrued interest under the Equity Notes shall become
due and payable on December 31, 2025. The Equity Notes shall be secured by a
pledge of the Equity pursuant to the Pledge Agreement in the form attached
hereto as EXHIBIT C. A "Sale Event" shall mean any sale of all or a portion of
the Equity by the Management Investor.

                  (c) Any of Green II, Green III or the Company (or any
combination of the foregoing, collectively the "Optionee") shall have the option
to repurchase the Equity, at a price of $15.00 per share of Common Stock to be
repurchased, if the aggregate internal rate of return ("IRR") realized by Green
III on the Common Stock and the shares of Series B 10% Junior Redeemable
Cumulative Preferred Stock of the Company, par value $0.01 per share ("Junior
Preferred Stock") purchased by Green III pursuant to that certain Stock Purchase
Agreement, dated as of April 18, 2000, between the Company and Green III (the
"Green III Equity") does not equal or exceed twenty-five percent (25%) (the "IRR
Threshold") under the circumstances described below (the "Investment Performance
Repurchase Right").

                           (i) General. The Investment Performance Repurchase
         Right will be available to the Optionee (x) upon each occasion on which
         it disposes (including by way of a distribution to its partners) of a
         portion (or all) of the Common Stock included in the Green III Equity
         prior to the eighth anniversary of the date hereof and (y) with respect
         to any Equity for which the Investment Performance Repurchase Right has
         not terminated prior to the eighth anniversary of the date hereof, upon
         the eighth anniversary of the date hereof.

                           (ii) Valuation. Each time the Investment Performance
         Repurchase Right is available to the Optionee, all of the Green III
         Equity (Common Stock and Junior Preferred Stock) will be valued for
         purposes of determining whether the IRR Threshold has been achieved. In
         the case of an event described in clause (x), the shares disposed of by
         Green III will be valued at the price received by Green III in the
         disposition (or, in the case of a disposition to Green III's partners,
         at the price attributed to it in such distribution). If Junior
         Preferred Stock is not disposed of in the transaction, it will be
         valued at an amount equal to its liquidation preference plus accrued
         and unpaid dividends. In the event the Investment Performance
         Repurchase Right is exercised at the eighth anniversary instead of upon
         a disposition event, for purposes of calculating the IRR, the value of
         the Green III Equity shall be the same as the valuation most recently
         used by Green III pursuant to its governing documents.

                           (iii) Partial or Total Extinguishment of Investment
         Performance Repurchase Right. If and to the extent the IRR Threshold is
         achieved in the disposition, the Investment Performance Repurchase
         Right shall terminate as to the percentage of the Equity equal to the
         percentage of the Common Stock included in the Green III Equity sold in
         the disposition event, and if such IRR Threshold is not achieved, such
         percentage of the Equity will be subject to

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<PAGE>   3
         repurchase. All of the Equity as to which the Investment Performance
         Repurchase Right has not theretofore terminated in accordance with this
         paragraph will remain subject to the Investment Performance Repurchase
         Right.

                           (iv) Time Repurchase Right. In the event that, prior
         to January 1, 2004, the Management Investor's employment with Liberty
         Group Operating, Inc., a Delaware corporation and wholly-owned
         subsidiary of the Company ("Operating"), is terminated for any reason
         (including without limitation Voluntary Termination, Just Cause
         Dismissal, Involuntary Termination Without Cause or the retirement,
         death or Permanent Disability of the Management Investor), the Optionee
         shall have the option to repurchase the Equity at a price of $15.00 per
         share of Common Stock (the "Time Repurchase Right"). The Time
         Repurchase Right shall terminate with respect to one-third of the
         Equity on each of January 1, 2002 and January 1, 2003 and with respect
         to the balance of such Equity on January 1, 2004, so long as Management
         Investor is employed by Operating on such date, and with respect to all
         of the Equity on a Liquidity Event (as hereinafter defined), so long as
         the Management Investor is employed by Operating immediately prior to
         such Liquidity Event. The partial or complete extinguishment of the
         Time Repurchase Right will not affect the Investment Performance
         Repurchase Right, which will only expire as set forth above.

                  (d) The Optionee must exercise the Investment Performance
Repurchase Right, if at all, by written notice to the Management Investor within
thirty (30) days after a triggering event described above. To the extent not
exercised within such thirty (30) day period, the Investment Performance
Repurchase Right shall terminate with respect to such triggering event. The
Optionee must exercise its Time Repurchase Right, if at all, by written notice
to the Management Investor within thirty (30) days after the Management
Investor's employment with Operating is terminated. To the extent not exercised
within such thirty (30) day period, the Time Repurchase Right shall terminate.

                  (e) The Management Investor agrees that until the repurchase
rights set forth above have expired or been exercised, he shall in no event
dispose of the Equity subject to such repurchase rights without the prior
written consent of the Company.

                  (f) For purposes of this Agreement, a "Liquidity Event" shall
mean the earliest of (i) the consummation of a Change of Control, (ii) the
consummation of an initial public offering in which gross proceeds to the
Company equal or exceed $35,000,000 and (iii) the commencement of the public
trading of the Company's Common Stock on any national securities exchange,
including, but not limited to, the NASDAQ National Market System. A "Change of
Control" shall be deemed to have occurred if at any time after the date hereof
(i) Operating sells or otherwise disposes of all or substantially all of its
assets, except for a sale or disposition to Kenneth L. Serota ("Serota") or an
entity controlled, directly or indirectly, by Serota or (ii) Green II no longer
owns 50% or more of the voting shares of stock of the Company or the Company no
longer owns, directly or indirectly, at least 95% of the voting securities of
Operating, other than as a result of a public offering of the securities of the
Company registered

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<PAGE>   4
under the Securities Act of 1933, as amended (the "Act"), or an acquisition by
Serota or an entity controlled, directly or indirectly, by Serota.

         2. Management Investor Representations.

                  (a) Investment Risk. The Management Investor represents and
acknowledges that (i) as a result of the Management Investor's (A) existing
relationship with the Company and by virtue of being an executive of Operating,
and (B) experience in financial matters, the Management Investor is properly
able to evaluate the capital structure of the Company, the business of the
Company and its subsidiaries and the risks inherent therein; (ii) the Management
Investor has been given the opportunity to obtain any additional information or
documents from and to ask questions, and receive answers of, the officers and
representatives of the Company and its subsidiaries to the extent necessary to
evaluate the merits and risks related to an investment in the Company; (iii) the
Management Investor has been and will be, to the extent the Management Investor
deems necessary, advised by legal counsel of the Management Investor's choice at
Management Investor's expense in connection with this Agreement and the issuance
and sale of the Equity hereunder, (iv) the purchase or issuance of the Equity
hereunder will be consistent, in both nature and amount, with the Management
Investor's overall investment program and financial condition, and the
Management Investor's financial condition will be such that the Management
Investor will be able to bear the economic risk of holding unregistered Common
Stock for which there is no market and to suffer a complete loss of the
Management Investor's investment therein and (v) the Management Investor is an
"accredited investor" as that term is defined in Rule 501(a)(3) under the Act.
The Management Investor further acknowledges that investment in the Equity
hereunder involves significant risks and that these risks include, without
limitation, the fact that the Company has a leveraged financial structure.

                  (b) Purchase for Investment.

                           (i) The Management Investor represents and warrants
         that: (A) the Equity will be acquired for the Management Investor's own
         account for investment, without any present intention of selling or
         further distributing the same and the Management Investor will not have
         any reason to anticipate any change in the Management Investor's
         circumstances or any other particular occasion or event which would
         cause the Management Investor to sell any of the Equity and (B) the
         Management Investor is fully aware that in agreeing to sell or issue
         such Common Stock to the Management Investor the Company will be
         relying upon the truth and accuracy of these representations and
         warranties. The Management Investor agrees that the Management Investor
         will not sell or otherwise dispose of any of the Equity except in
         compliance with the Securities Act, the rules and regulations of the
         Securities and Exchange Commission thereunder, the relevant state
         securities laws applicable to the Management Investor's action and the
         terms of this Agreement and the Stockholders Agreement.

                           (ii) Subject to the restrictions provided in the
         Stockholders Agreement, the Management Investor agrees that prior to
         making any disposition of any of the Equity acquired hereunder (other
         than a disposition to the Company, Green II or Green III), the
         Management Investor will give not less than 10 days' advance written
         notice to the

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<PAGE>   5
         Company describing the manner of such proposed disposition. The
         Management Investor further agrees that the Management Investor will
         not effect such proposed disposition until either (A) the Management
         Investor has provided to the Company, if so requested by the Company,
         an opinion of counsel reasonably satisfactory in form and substance to
         the Company that such proposed disposition is exempt from registration
         under the Act and any applicable state securities laws or (B) a
         registration statement under the Act covering such proposed disposition
         has been filed by the Company under the Act and has become effective
         and compliance with applicable state securities laws has been effected.

                           (iii) The Management Investor acknowledges that no
         trading market for the Equity exists currently or is expected to exist
         at any time in the foreseeable future and that, as a result, the
         Management Investor may be unable to sell any of the Equity acquired
         hereunder for an indefinite period. Further, the Company has no
         obligation to register any of the Equity, except as expressly provided
         in Section 7 of the Stockholders Agreement.

                           (iv) The Management Investor acknowledges and agrees
         that nothing herein, including the opportunity to make an equity
         investment in the Company, shall be deemed to create any implication
         concerning the adequacy of the Management Investor's services to
         Operating or its subsidiaries or shall be construed as an agreement by
         the Company or its subsidiaries, express or implied, to employ the
         Management Investor or contract for the Management Investor's services,
         to restrict the right of Operating to discharge the Management Investor
         or cease contracting for the Management Investor's services or to
         modify, extend or otherwise affect in any manner whatsoever the terms
         of any employment agreement or contract for services which may exist
         between the Management Investor and the Company or its subsidiaries.

         3. Notices. All notices or other communications under this Agreement
shall be given in writing and shall be deemed duly given and received on the
third full business day following the day of the mailing thereof by registered
or certified mail or when delivered personally or sent by facsimile transmission
as follows:

                  (a) if to the Company, at its principal executive offices at
the time of the giving of such notice, or at such other place as the Company
shall have designated by notice as herein provided to the Management Investor,
Attention: Kenneth L. Serota;

                  (b) if to the Management Investor, at the address of the
Management Investor as it appears on the signature page to this Agreement or at
such other place as the Management Investor shall have designated by notice as
herein provided to the Company;

                  (c) if to Green II or Green III, at their principal executive
offices at the time of the giving of such notice, or at such other place as
Green II or Green III shall have designated by notice as herein provided to the
Company.

         4. Specific Performance. Due to the fact that the securities of the
Company cannot be readily purchased or sold in the open market and because
damages to the Company and its subsidiaries will be difficult to ascertain and
remedies at law to the Company and its subsidiaries

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<PAGE>   6
will be inadequate and for other reasons, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforced. In the
event of a breach or threatened breach of the terms, covenants and/or conditions
of this Agreement by any of the parties hereto, the other parties shall, in
addition to all other remedies, be entitled (without any bond or other security
being required) to a temporary and/or permanent injunction, without showing any
actual damage or that monetary damages would not provide an adequate remedy,
and/or a decree for specific performance, in accordance with the provisions
hereof.

         5. Miscellaneous.

                  (a) This Agreement, and the Stockholders Agreement,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be modified or amended except by a written agreement
signed by the Company, Green II, Green III and the Management Investor.

                  (b) No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature. Anything in
this Agreement to the contrary notwithstanding, any waiver, consent or other
instrument under or pursuant to this Agreement signed by, or binding upon, the
Management Investor shall be valid and binding upon any and all persons or
entities (other than the Company, Green II and Green III) who may, at any time,
have or claim any rights under or pursuant to this Agreement in respect of the
Equity acquired hereunder.

                  (c) Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company, Green
II and Green III and their respective successors and assigns and the Management
Investor and the Management Investor's heirs, personal representatives,
successors and assigns; provided, however, that nothing contained herein shall
be construed as granting the Management Investor the right to transfer any of
the Equity acquired hereunder except in accordance with this Agreement and the
Stockholders Agreement and any transferee shall hold the Equity having only
those rights and being subject to the restrictions provided for in this
Agreement and the Stockholders Agreement.

                  (d) If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.

                  (e) Except as set forth in Section 4, arbitration shall be the
exclusive remedy for resolving any dispute or controversy between the Company,
Green II or Green III and the Management Investor under this Agreement. Such
arbitration shall be conducted in accordance with the then most applicable rules
of the American Arbitration Association. The arbitrator shall be empowered to
grant only such relief as would be available in a court of law. In the event of
any conflict between this Agreement and the rules of the American Arbitration
Association, the provisions of this Agreement shall be determinative. If the
parties are unable to agree upon an arbitrator, they shall select a single
arbitrator from a list of seven arbitrators designated by the

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<PAGE>   7
office of the American Arbitration Association having responsibility for the
city in which the Management Investor last resided while employed by the Company
or its subsidiaries, all of whom shall be retired judges who are actively
involved in hearing private cases or members of the National Academy of
Arbitrators. If the parties are unable to agree upon an arbitrator from such
list, they shall each strike names alternatively from the list, with the first
to strike being determined by lot. After each party has used three strikes, the
remaining name on the list shall be the arbitrator. The fees and expenses of the
arbitrator shall initially be borne equally by the parties; provided, however,
that each party shall initially be responsible for the fees and expenses of its
own representatives and witnesses. If the parties cannot agree upon a location
for the arbitration, the arbitrator shall determine the location. Judgment may
be entered on the award of the arbitrator in any court having jurisdiction. The
prevailing party in the arbitration proceeding, as determined by the arbitrator,
and in any enforcement or other court proceedings, shall be entitled to the
extent provided by law to reimbursement from the other party for all of the
prevailing party's costs (including but not limited to the arbitrator's
compensation), expenses and reasonable attorneys' fees.

                  (f) Should any party to this Agreement be required to commence
any litigation concerning any provision of this Agreement or the rights and
duties of the parties hereunder, the prevailing party in such proceeding shall
be entitled, in addition to such other relief as may be granted, to the
reasonable attorneys' fees and court costs incurred by reason of such
litigation.

                  (g) The section headings contained herein are for the purposes
of convenience only and are not intended to define or limit the contents of said
sections.

                  (h) Words in the singular shall be read and construed as
though in the plural and words in the plural shall be read and construed as
though in the singular in all cases where they would so apply.

                  (i) This Agreement may be executed in one or more
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.

                  (j) The Management Investor hereby irrevocably and
unconditionally consents to the jurisdiction of any Delaware State court or
federal court of the United States sitting in the State of Delaware in any
action or proceeding relating to this Agreement and consents to service of
process in connection therewith by the delivery of notice to such Management
Investor's address set forth in this Agreement.

                  (k) This Agreement shall be deemed to be a contract under the
laws of the State of Delaware and for all purposes shall be construed and
enforced in accordance with the internal laws of said state without regard to
the principles of conflicts of law.

                                       7
<PAGE>   8
         IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase Agreement as of the first date written above.

                                LIBERTY GROUP PUBLISHING, INC.

                                By:           /s/  Kenneth L. Serota
                                    -------------------------------------------
                                Name:
                                      -----------------------------------------
                                Its:
                                     ------------------------------------------

                                GREEN EQUITY INVESTORS II, L.P.
                                By:  Grand Avenue Capital Partners, L.P., its
                                     General Partner
                                By:  Grand Avenue Capital Corporation, its
                                     General Partner

                                By:          /s/  Peter J. Nolan
                                    -------------------------------------------
                                Name:
                                      -----------------------------------------

                                GREEN EQUITY INVESTORS III, L.P.
                                By:  GEI Capital III, LLC , its General Partner

                                By:          /s/  Peter J. Nolan
                                    -------------------------------------------
                                Name:
                                      -----------------------------------------

                                MANAGEMENT INVESTOR

                                By:          /s/  Kevin O'Shea
                                    -------------------------------------------
                                Name:
                                      -----------------------------------------
                                Address:
                                        ---------------------------------------

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

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

                                       8

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