Document:

<PAGE>

Exhibit 10.5

             SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT AND
             --------------------------------------------------
                     AMENDMENT TO REVOLVING CREDIT NOTE
                     ----------------------------------

     THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT AND AMENDMENT TO
REVOLVING CREDIT NOTE (this "Amendment") is made and entered into as of June
12, 2003, by and between THE LACLEDE GROUP, INC., a Missouri corporation
("Borrower"), and U.S. BANK NATIONAL ASSOCIATION, formerly known as Firstar
Bank, N.A., a national banking association ("Lender"), and has reference to
the following facts and circumstances (the "Recitals"):

     A.   Borrower and Lender executed the Revolving Credit Agreement dated as
of June 13, 2002, as amended by the First Amendment to Revolving Credit
Agreement dated as of April 16, 2003 (as amended, the "Agreement"; all
capitalized terms used and not otherwise defined in the Amendment shall have
the respective meanings ascribed to them in the Agreement as amended by this
Amendment), pursuant to which Borrower executed the Revolving Credit Note
dated June 13, 2002, payable to the order of Lender, in the principal amount
of up to $20,000,000 (the "Note").

     B.   Borrower and Lender desire to further amend the Agreement, and to
amend the Note, in the manner hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:

     1.   RECITALS. The Recitals are true and correct, and, together with the
          --------
defined terms set forth therein, are incorporated herein by this reference.

     2.   AMENDMENT TO AGREEMENT. The definition of "Revolving Credit Period"
           ----------------------
in Section 1.01 of the Agreement is deleted and substituted with the following:

          "Revolving Credit Period shall mean the period commencing on the date
           -----------------------
     of this Agreement and ending June 11, 2004; provided, however, that the
     Revolving Credit Period shall end on the date the Lender's Revolving
     Credit Commitment is terminated pursuant to Section 6 or otherwise."

     3.   AMENDMENT TO NOTE. The first sentence in the top paragraph on page 1
          -----------------
of the Note is deleted and substituted with the following:

         "FOR VALUE RECEIVED, THE LACLEDE GROUP, INC., a Missouri corporation
     ("Borrower"), hereby promises to pay to the order of U.S. BANK NATIONAL
     ASSOCIATION, formerly known as Firstar Bank, N.A., a national banking
     association ("Lender"), on the last day of the Revolving Credit Period,
     the principal sum of Twenty Million Dollars ($20,000,000.00), or such
     lesser sum as may then constitute the aggregate unpaid principal amount
     of all Loans made by Lender to Borrower pursuant to the Agreement (defined
     below)."

     4.   COSTS AND EXPENSES. Borrower hereby agrees to reimburse Lender upon
          ------------------
demand for all out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Lender in the
preparation, negotiation and execution of this Amendment and any and all
other agreements, documents, instruments and/or certificates relating to the
amendment of Borrower's existing credit facilities with Lender. All of the
obligations of Borrower under this paragraph shall survive the payment of
Borrower's Obligations and the termination of the Agreement.

     5.   REFERENCES TO AGREEMENT AND NOTE. All references in the Agreement and
          --------------------------------
the Note to "this Agreement" and "this Note", and any other reference of
similar import shall henceforth mean the Agreement and the Note as amended
by this Amendment.

<PAGE>
<PAGE>

     6.   FULL FORCE AND EFFECT. Except to the extent specifically amended by
          ---------------------
this Amendment, all of the terms, provisions, conditions, covenants,
representations and warranties contained in the Agreement and the Note shall be
and remain in full force and effect and the same are hereby ratified and
confirmed.

     7.   BENEFIT. This Amendment shall be binding upon and inure to the
          -------
benefit of Borrower and Lender and their respective successors and assigns,
except that Borrower may not assign, transfer or delegate any of its
rights or obligations under the Agreement as amended by this Amendment.

     8.   REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
          ------------------------------
warrants to Lender that:

          (a) the execution, delivery and performance by Borrower of this
     Amendment are within the corporate powers of Borrower, have been
     duly authorized by all necessary corporate action and require no action
     by or in respect of, consent of or filing or recording with, any
     governmental or regulatory body, instrumentality, authority, agency or
     official or any other Person;

          (b) the execution, delivery and performance by Borrower of this
     Amendment do not conflict with, or result in a breach of the terms,
     conditions or provisions of, or constitute a default under or result
     in any violation of, the terms of the Articles of Incorporation or
     Bylaws of Borrower, any applicable law, rule, regulation, order, writ,
     judgment or decree of any court or governmental or regulatory body,
     instrumentality authority, agency or official or any agreement, document
     or instrument to which Borrower is a party or by which Borrower or any
     of its property is bound or to which Borrower or any of its property
     is subject;

          (c) this Amendment has been duly executed and delivered by Borrower
     and constitutes the legal, valid and binding obligation of Borrower
     enforceable against Borrower in accordance with its terms, except as
     such enforceability may be limited by (i) applicable bankruptcy,
     insolvency or similar laws affecting the enforcement of creditors'
     rights generally and (ii) general principles of equity (regardless of
     whether such enforceability is considered in a proceeding in equity or
     at law);

          (d) all of the representations and warranties made by Borrower in
     the Agreement and/or in any of the other Transaction Documents are true
     and correct in all material respects on and as of the date of this
     Amendment as if made on and as of the date of this Amendment; and

          (e) as of the date of this Amendment, no Default or Event of
     Default under or within the meaning of the Agreement has occurred and
     is continuing.

     9.   RELEASE. Borrower hereby unconditionally releases, acquits, waives,
          -------
and forever discharges Lender and its successors, assigns, directors, officers,
agents, employees, representatives and attorneys from any and all liabilities,
claims, causes of action or defenses, if any, and for any action taken or
for any failure to take any action, existing at any time prior to the
execution of this Amendment.

     10.  INCONSISTENCY. In the event of any inconsistency or conflict
          -------------
between this Amendment, the Agreement, and/or the Note, the terms, provisions
and conditions contained in this Amendment shall govern and control.

     11.  MISSOURI LAW. This Amendment shall be governed by and construed
          ------------
in accordance with the substantive laws of the State of Missouri (without
reference to conflict of law principles).

                                   - 2 -

<PAGE>
<PAGE>

     12.  NOTICE REQUIRED BY SECTION 432.045 R.S. MO. ORAL AGREEMENTS OR
          -------------------------------------------
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.
TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED
IN THIS WRITING WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

     13.  CONDITIONS PRECEDENT. Notwithstanding any provision contained in this
          --------------------
Amendment to the contrary, this Amendment shall not be effective unless and
until Lender shall have received the following, all in form and substance
acceptable to Lender:

          (a) this Amendment, duly executed by Borrower;

          (b) a Consent of Guarantor duly executed by SM&P;

          (c) a copy of resolutions of the Board of Directors of Borrower, duly
     adopted, which authorize the execution, delivery and performance of
     this Amendment;

          (d) an incumbency certificate, executed by the Secretary of
     Borrower, which shall identify by name and title and bear the signatures
     of all the officers of Borrower executing this Amendment;

          (e) a certificate of corporate good standing of Borrower issued by
     the Secretary of State of the State of Missouri, or other evidence of
     good standing satisfactory to Lender;

          (f) a copy of resolutions of the Board of Directors of SM&P, duly
     adopted, which authorize the execution, delivery and performance of the
     Consent of Guarantor;

          (g) an incumbency certificate, executed by the Secretary of SM&P,
     which shall identify by name and title and bear the signatures of all
     of the officers of Borrower executing the Consent of Guarantor;

          (h) a certificate of corporate good standing of SM&P issued by the
     Secretary of State of the State of Indiana, or other evidence of good
     standing satisfactory to Lender; and

          (i) such other documents and information as reasonably requested by
     Lender.

     IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as
of the day and year first above written.

                       (SIGNATURES ON FOLLOWING PAGE)

                                   - 3 -

<PAGE>
<PAGE>

                               SIGNATURE PAGE
               SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT

                                        Borrower:

                                        THE LACLEDE GROUP, INC.

                                        By:
                                           ---------------------------------
                                           Ronald L. Krutzman,
                                           Treasurer and Assistant Secretary

                                        Lender:

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        formerly known as Firstar Bank, N.A.

                                        By:
                                           ---------------------------------
                                           Eric J. Hartman, Vice President

                                   - 4 -EXHIBIT 4.2.41
                                                                  --------------

                       NOTE AND WARRANT PURCHASE AGREEMENT
                       -----------------------------------

            This Note and Warrant Purchase Agreement, dated as of July 10, 2003
(the "Agreement"), is entered into by and among Salon Media Group, Inc., a
Delaware corporation (the "Company"), and each of the undersigned purchasers
(collectively the "Purchasers" and individually a "Purchaser") listed on the
Schedule of Purchasers attached hereto as Exhibit A.

                                     RECITAL

            On the terms and subject to the conditions set forth herein, the
Purchasers are willing to purchase from the Company and the Company is willing
to sell to the Purchasers, Convertible Promissory Notes (individually a "Note",
and collectively, the "Notes") and warrants to purchase common stock
(individually, a "Warrant", and collectively, the "Warrants") to be issued by
the Company in the principal amounts and for the number of shares, respectively,
set forth opposite each Purchaser's name on the Schedule of Purchasers.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the foregoing, and the
representations, warranties, and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:

            1. Notes and Warrants.

            (a) Issuance of Notes and Warrants. In reliance upon the
representations, warranties and covenants of the parties set forth herein, the
Company agrees to issue, sell and deliver to the Purchasers, and the Purchasers
agree to purchase from the Company, the Notes and Warrants. The purchase price
for the Notes and Warrants shall be payable in immediately available funds.

            (b) Terms of the Notes and Warrants. The terms and conditions of the
Notes and Warrants are set forth in the forms of Note and Warrant attached
hereto as Exhibit C and Exhibit D, respectively. Capitalized terms not otherwise
defined herein shall have the meaning set forth in Exhibit C or Exhibit D.

            (c) Delivery. The Company will deliver to each Purchaser a Note and
Warrant to be purchased by such Purchaser against receipt by the Company of the
purchase price for such Note.

            2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser that:

            (a) Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
businesses as now conducted and as proposed to be conducted.

<PAGE>

            (b) Corporate Power. The Company has all requisite corporate power
necessary for the authorization, execution and delivery of this Agreement, and
the Warrants, to sell and issue the Notes hereunder, to carry out and perform
all of its obligations under the terms of this Agreement, and to carry on its
business as presently conducted and as presently proposed to be conducted, and
such other agreements and instruments. Each of the Agreement, the Notes and the
Warrants is a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights.

            (c) Capitalization. As of June 30, 2003, the authorized capital
stock of the Company is Fifty million (50,000,000) shares of Common Stock and
Five million (5,000,000) shares of Preferred Stock, and there are issued and
outstanding (i) 14,155,276 shares of the Common Stock, (ii) 809 shares of Series
A Preferred Stock, (iii) 125 shares of Series B Preferred Stock (iv) warrants to
purchase an aggregate of 13,493,053 shares of Common Stock, (v) options to
purchase an aggregate of 5,742,452 shares of Common Stock granted to employees
pursuant to the Company's 1995 Stock Option Plan, and (vi) an aggregate of
16,125,960 shares of Common Stock reserved for issuance upon conversion of the
Series A Preferred Stock and Series B Preferred Stock. The 16,125,960 shares of
Common Stock reserved for issuance upon conversion of the Series A Preferred
Stock and Series B Preferred Stock may increase according to anti-dilution
provisions to approximately 38,000,000 common shares on an "as converted" basis
should a Series C and D Preferred Round of approximately $4 million close with a
conversion ratio equaling $0.04 per common share. Bridge financing in the gross
amount of $1,214,039 and $1,400,000 has been received designated for conversion
to Series C Preferred Stock and Series D Preferred Stock, respectively, and may
represent approximately 65 million shares of common stock, on an "as converted"
basis. All such issued and outstanding shares have been duly authorized and
validly issued, are fully paid and nonassessable, and were issued in compliance
with all applicable state and federal laws concerning the issuance of
securities. From the period between June 30, 2003 and the date hereof, the
Company has not issued any shares of capital stock, nor granted any warrants or
options to purchase shares of Common Stock.

            (d) Authorization.

            (i) Corporate Action. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the sale and
issuance of the Notes and the authorization, execution and performance of the
Company's obligations hereunder and under the Warrants has been taken.

            (ii) Valid issuance. The Notes, the Warrants, and any shares of
common or preferred stock issued upon conversion or exercise of the Notes or
Warrants (the "Conversion Securities"), when issued in compliance with the
provisions of this Agreement will be validly issued, fully paid and
nonassessable and will be free of restrictions on transfer other than
restrictions under the Warrants and under applicable federal and state
securities laws.

            (e) No Preemptive Rights. No person has any right of first refusal
or any preemptive rights in connection with the issuance of the Notes, the
Warrants or Conversion Securities or any future issuances of securities by the
Company.

<PAGE>

            (f) Compliance with Other Instruments. The execution, delivery and
performance of and compliance with this Agreement, the Notes or the Warrants by
the Company, and the issuance and sale of the Conversion Securities, will not
result in any violation of the Certificate of Incorporation or Bylaws of the
Company or in any violation of or default in any material respect under the
terms of any mortgage, indenture, contract, agreement, instrument, judgment or
decree.

            (g) Offering. In reliance on the representations and warranties of
the Purchaser in Section 3 hereof, the offer, sale and issuance of the Notes and
the Warrants in conformity with the terms of this Agreement, the Notes and the
Warrants will not result in a violation of the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities laws, including the
qualification or registration requirements of applicable blue sky laws.

            (h) Company Reports; Disclosure.

            (i) Company Reports. For the purposes of this Agreement, the term
"Company Reports" shall mean, collectively, each registration statement, report,
proxy statement or information statement filed with the Securities and Exchange
Commission (the "SEC") since January 1, 1999, in the form (including exhibits,
annexes and any amendments thereto) filed with the SEC. As of their respective
dates, the Company Reports complied in all material respects with the
requirements of the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Nothing has occurred since February 14,
2003 (the date of filing of the Company's Form 10-Q reporting the period ending
December 31, 2002) which would require the filing of any additional report or of
any amendment to any of the Company Reports with the SEC, or which would cause
any of the Company Reports to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading.

            (ii) Disclosure. No representation or warranty by the Company in
this Agreement, or in any document or certificate furnished or to be furnished
to the Purchaser pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements made herein and therein, in the light of the
circumstances under which they were made herein and therein, in the light of the
circumstances under which they were made, not misleading. The Company has either
filed with the SEC or fully provided the Purchaser with all the information
necessary for the Purchaser to decide whether to purchase the Note.

            3. Representations and Warranties by the Purchaser. The Purchaser
represents and warrants to the Company as of the time of issuance of the Notes
and Warrants as follows:

            (a) Investment Intent: Authority. This Agreement is made with the
Purchaser in reliance upon such Purchaser's representation to the Company,
evidenced by Purchaser's execution of this Agreement, that Purchaser is
acquiring the Note and Warrant, including the

<PAGE>

Conversion Securities, for investment for such Purchaser's own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act. Purchaser has the full right, power, authority and
capacity to enter into and perform this Agreement and this Agreement will
constitute a valid and binding obligation upon Purchaser, except as the same may
be limited by bankruptcy, insolvency, moratorium, and other laws of general
application affecting the enforcement of creditors' rights.

            (b) Securities Not Registered. The Purchaser understands and
acknowledges that the offering of the Notes, the Warrants and the Conversion
Securities pursuant to this Agreement will not be registered under the
Securities Act or qualified under applicable blue sky laws on the grounds that
the offering and sale of securities contemplated by this Agreement are exempt
from registration under the Securities Act and exempt from qualifications
available under applicable blue sky laws, and that the Company's reliance upon
such exemptions is predicated upon the Purchaser's representations set forth in
this Agreement. The Purchaser acknowledges and understands that the Note, the
Warrant and the Conversion Securities must be held for at least 12 months after
Closing and thereafter indefinitely unless they are registered under the
Securities Act and qualified under applicable blue sky laws or an exemption from
such registration and such qualification is available.

            (c) No Transfer. Purchaser covenants that in no event will it
transfer the Note, the Warrant or the Conversion Securities other than (i) in
conjunction with an effective registration statement for the Securities under
the Securities Act or pursuant to an exemption therefrom, or in compliance with
Rule 144 promulgated under the Securities Act, or (ii) to a partner, former
partner, limited partner, member, former member, stockholder or other entity
affiliated with Purchaser or, in the case of a Purchaser who is an individual,
to a spouse, lineal descendant or ancestor, or any trust for any of the
foregoing, by transfer by gift, will or intestate succession; provided that in
each of the foregoing cases the transferee agrees in writing to be subject to
the terms of this Agreement to the same extent as if the transferee were the
original Purchaser hereunder.

            (d) Knowledge and Experience. Purchaser (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of Purchaser's prospective investment in the Note, the Warrant
and the Conversion Securities; (ii) has the ability to bear the economic risks
of Purchaser's prospective investment; (iii) has had access to such information
as Purchaser has considered necessary to make a determination to purchase the
Note, the Warrant and the Conversion Securities together with such additional
information as is necessary to verify the accuracy of the information supplied;
and (iv) has not been offered the Note, the Warrant or the Conversion Securities
by any form of advertisement, article, notice or other communication published
in any newspaper, magazine, or similar media or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any such
media.

            (e) Accredited Investor. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) under the Securities Act.

<PAGE>

            (f) Legends. Each certificate representing the Notes, the Warrants
and the Conversion Securities may be endorsed with the following legends:

            (i) Federal Legend. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER
THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii)
PURSUANT TO AN OPINION OF COUNSEL, THAT SUCH REGISTRATION OR COMPLIANCE IS NOT
REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.

            (ii) Other Legends. Any other legends required by applicable state
blue sky laws. The Company need not register a transfer of any legended Note,
Warrant or Conversion Securities, and may also instruct its transfer agent not
to register the transfer of the Notes, Warrants or Conversion Securities, unless
the conditions specified in each of the foregoing legends are satisfied.

            (g) Removal of Legend and Transfer Restrictions. Any legend endorsed
on a certificate pursuant to subsection 3(f) and the stop transfer instructions
with respect to such legend shall be removed, and the Company shall issue a
certificate without such legend to the holder of such Note, Warrant or
Conversion Securities if such Note, Warrant or Conversion Securities are
registered under the Securities Act and a prospectus meeting the requirements of
Section 10 of the Securities Act is available or if such holder satisfies the
requirements of Rule 144(k).

            4. Security Interest. The Company hereby grants to the Purchasers a
security interest in all of the Company's right, title and interest in presently
existing and hereafter acquired assets (the "Collateral"), as more fully
described in Exhibit B attached hereto, of the Company to secure the payment of
indebtedness under the Note. The Company agrees to prepare and file any UCC
financing statements and other documentation as may be necessary, and to take
such reasonable actions as may be requested by Purchasers, to perfect
Purchasers' security interest. Pre-existing apparently perfected security
interests, as further described in Exhibit E attached hereto, may be in
existence and may be senior in interest to the security interest granted to
Purchasers hereby. The security interest evidenced by the Note is junior certain
liens arising under or related to the Note and Warrant Purchase Agreement, dated
as of various dates among Salon Media Group, Inc. and the Purchasers identified
therein.

            5. Subordination. The indebtedness evidenced by the Notes
("Subordinated Indebtedness") is hereby expressly subordinated, to the extent
and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all of the Company's Senior Indebtedness (as defined below).

            (a) Definition of Senior Indebtedness. "Senior Indebtedness" shall
mean the principal of (and premium, if any), unpaid interest on and amounts
reimbursed, fees, expenses, costs of enforcement and other amounts due in
connection with any indebtedness of the

<PAGE>

Company to a commercial bank lender Silicon Valley Bank ("Bank"), which may be
incurred from time to time pursuant to an agreement between the Company and
Bank, which credit facility shall not exceed $1,000,000 ("Senior Indebtedness").

            (b) Payment and Remedies Blockage. Other than payouts made by the
Company so as to avoid issuing fractional shares upon conversion of the Notes,
Purchaser will not demand or receive from Company (and Company will not pay to
Purchaser) all or any part of the Subordinated Indebtedness by way of payment,
prepayment, setoff, lawsuit or otherwise, nor will Purchaser exercise any remedy
with respect to the Collateral, nor will Purchaser commence, or cause to
commence, prosecute or participate in any administrative, legal or equitable
action against the Company for so long as any portion of the Senior Indebtedness
remains outstanding. Notwithstanding the foregoing, (i) Purchaser may accept,
and the Company may pay, regularly scheduled interest payments in accordance
with the terms of the Notes provided an Event of Default does not exist under
any document executed in connection with the Senior Indebtedness or would exist
after giving effect to such payment, (ii) in the event that the stockholders of
the Company have not approved the Notes and Warrants, the Company shall repay
any and all Senior Indebtedness then outstanding so as to allow the Company to
pay the Purchasers any and all amounts of principal and accrued interest owing
under the Notes, and (iii) nothing in this Section 5 shall prevent or otherwise
restrict Purchaser from converting the Note into equity securities in accordance
with its terms.

            (c) Lien Subordination. The security interest granted in this
Agreement is subordinate to the security interest that Bank or its successor or
assignee may hold from time to time in the Collateral. Notwithstanding the
respective dates of attachment or perfection of the security interest of
Purchaser and the security interest of Bank, the security interest of Bank shall
at all time be prior to the security interest of Purchaser.

            (d) Bankruptcy, Insolvency. If there shall occur any receivership,
insolvency, assignment for the benefit of creditors, bankruptcy, reorganization,
or arrangements with creditors (whether or not pursuant to bankruptcy or other
insolvency laws), sale of all or substantially all of the assets, dissolution,
liquidation, or any other marshaling of the assets and liabilities of the
Company, no amount shall be paid by the Company in respect of the principal of,
interest on or other amounts due with respect to this Note at the time
outstanding, unless and until the principal of and interest on the Senior
Indebtedness then outstanding shall be paid in full.

            (e) Subrogation. Subject to the payment in full of all Senior
Indebtedness, the holder of the Notes shall be subrogated to the rights of the
holder(s) of such Senior Indebtedness (to the extent of the payments or
distributions made to the holder(s) of such Senior Indebtedness pursuant to the
provisions of this Section 5) to receive payments and distributions of assets of
the Company applicable to the Senior Indebtedness. No such payments or
distributions applicable to the Senior Indebtedness shall, as between the
Company and its creditors, other than the holders of Senior Indebtedness and the
Purchaser, be deemed to be a payment by the Company to or on account of the
Notes; and for purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness to which the Purchaser would be entitled except
for the provisions of this Section 5 shall, as between the Company and its
creditors, other

<PAGE>

than the holders of Senior Indebtedness and the Purchasers, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness.

            (f) No Impairment. Nothing contained in this Section 5 shall impair,
as between the Company and Purchasers, the obligation of Company, subject to the
terms and conditions hereof, to pay to the Purchaser the principal hereof and
interest hereon as and when the same become due and payable, or shall prevent
the Purchasers of the Notes, upon default hereunder, from exercising all rights,
powers and remedies otherwise provided herein or by applicable law.

            (g) Reliance of Purchasers of Senior Indebtedness. Purchaser, by its
acceptance hereof, shall be deemed to acknowledge and agree that the foregoing
subordination provisions are, and are intended to be, an inducement to and a
consideration of each holder of Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the creation of the
indebtedness evidenced by this Note, and each such holder of Senior Indebtedness
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and holding, or in continuing to hold, such Senior Indebtedness. No
amendment of this Agreement, the Notes or any other agreements relating to the
Subordinated Indebtedness shall modify the provision of this Section 5 in a way
that could reasonably be expected to impair the subordination of the security
interest or lien that Purchaser may have in the Collateral or the subordination
of any payment rights under the Subordinated Indebtedness. At any time and from
time to time, without notice to Purchaser, Bank may take such actions with
respect to the Senior Indebtedness as Bank, in its sole discretion, may deem
appropriate, including without limitation terminating advances to the Company,
increasing the principal amount up to $1,000,000, extending the time of payment,
increasing applicable interest rates, compromising or otherwise amending the
terms of any documents affecting the Senior Indebtedness, and enforcing or
failing to enforce any rights against the Company or any other person.

            6. Miscellaneous.

            (a) Waivers and Amendments. Any provision of this Agreement other
than the principal amount of the Notes and the number of shares subject to the
Warrants may be amended, waived or modified upon the written consent of the
Company and the Purchasers providing a majority of the aggregate principal
amounts provided pursuant to this Agreement.

            (b) Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Delaware.

            (c) Entire Agreement. This Agreement together with the Notes and
Warrants constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

            (d) Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be duly given upon receipt if
personally delivered or mailed by registered or certified mail, postage prepaid,
or by recognized overnight courier or personal delivery, addressed (i) if to a
Purchaser, at the address or facsimile number of such Purchaser set forth below
such party's name on Exhibit A, or at such other address or

<PAGE>

number as such Purchaser shall have furnished to the Company in writing, or (ii)
if to Company, at 22 Fourth Street, 16th Floor, San Francisco, CA 94103,
Attention: Chief Financial Officer or at such other address as Company shall
furnish to the Purchaser in writing.

            (e) Validity. If any provision of this Agreement, the Notes or the
Warrants shall be judicially determined to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

            (f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.

<PAGE>

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

                                              COMPANY:

                                              SALON MEDIA GROUP, INC.
                                              a Delaware corporation

                                              By:

                                              Name: Michael O'Donnell

                                              Title: President / CEO

PURCHASER:

By:______________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]