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                                                                    EXHIBIT 10.4

                  AMENDED AND RESTATED MANAGEMENT SUBSCRIPTION
                           AND STOCKHOLDERS AGREEMENT

         This Amended and Restated Management Subscription and Stockholders
Agreement (the "Agreement") is entered into as of February 1, 2000, by and
between Liberty Group Publishing, Inc., a Delaware corporation (the "Company"),
Green Equity Investors II, L.P., a Delaware limited partnership ("GEI"), and the
person identified on Annex A attached hereto (hereinafter referred to as the
"Management Investor"), with reference to the following facts:

         WHEREAS, GEI is the principal shareholder of the Company;

         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 has previously issued, and may from time to time hereafter desire to
issue, uncertificated shares of the Company's common stock (collectively, the
"Common Stock") to the Management Investor as set forth herein;

         WHEREAS, the Company, GEI and the Management Investor are parties to
that certain Management Subscription and Stockholders Agreement entered into as
of March ___, 1998 (the "Original Agreement"); and

         WHEREAS, the Company, GEI and the Management Investor desire to amend
and restate the Original Agreement in its entirety to be in the form of this
Agreement.

         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.       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 business
enterprises acquired by the Company, 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 Common Stock
hereunder and (iv) the purchase or issuance of Common Stock hereunder will be
consistent, in both nature and amount, with the Management Investor's overall
investment

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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.
The Management Investor further acknowledges that investment in the Common Stock
hereunder involves significant risks and that these risks include, without
limitation, the facts that the Company is a relatively newly-formed holding
company and that the Company will have a leveraged financial structure.

                  (b)      Purchase for Investment.

                           (1) The Management Investor represents and warrants
that: (A) the Common Stock acquired by the Management Investor hereunder 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 such Common Stock 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 Common
Stock except in compliance with the Securities Act of 1933, as amended (the
"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.

                           (2) Subject to Section 6 below, in addition to the
other restrictions provided in this Agreement, the Management Investor agrees
that prior to making any disposition of any Common Stock acquired hereunder
(other than a disposition to the Company), the Management Investor will give not
less than 10 days' advance written notice to the 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.

                           (3) The Management Investor acknowledges that no
trading market for the Common Stock 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 Common Stock acquired hereunder for an
indefinite period. Further, the Company has no obligation to register any of the
Common Stock, except as expressly provided in Section 7 of this Agreement.

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                           (4) The Management Investor acknowledges and agrees
that nothing herein, including the opportunity to make any equity investment in
the Company, shall be deemed to create any implication concerning the adequacy
of the Management Investor's services to any of the Company 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 the Company or its
subsidiaries 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.

         2.       Grant of Management Shares and Legend on Certificates.

                  (a) Grant of Management Shares. The Company hereby grants to
the Management Investor the right to purchase, on the terms and conditions set
forth in this Agreement, all or any part of the number of shares of Common Stock
indicated on Annex A hereto (the "Initial Purchased Shares") at the purchase
price of $100 (the "Purchase Price") per share. In addition, the Company hereby
grants to the Management Investor the number of shares of Common Stock indicated
in Annex B hereto (the "Grant Shares"). All shares of Common Stock issued
hereunder (including, but not limited to, the Initial Purchased Shares, the
Grant Shares and any additional shares of Common Stock issued to the Management
Investor from time to time hereafter, whether as a dividend or other
distribution with respect to or in replacement of shares of Common Stock, as a
result of a stock dividend, stock split or subdivision, stock combination or
recapitalization, upon the exercise or conversion of other securities issued to
the Management Investor or otherwise) shall be subject to all of the terms and
restrictions contained in this Agreement, including, without limitation, those
in Sections 1(b), 3, 4, 8 and 9, and shall be uncertificated shares. Subject to
the limitations set forth in Section 2(b), the Management Investor shall be
entitled, upon written request to the Company, to have a certificate issued to
him or her representing Common Stock issued hereunder.

                  (b) Legend on Certificates. Each stock certificate issued to
the Management Investor upon written request to the Company representing Common
Stock issued hereunder shall bear the following (or substantially equivalent)
legends on the face or reverse side thereof:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
                  HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
                  MADE IN ACCORDANCE WITH RULE 144 OR ANY SUCCESSOR RULE UNDER
                  THE ACT OR LIBERTY GROUP PUBLISHING, INC. (THE "COMPANY")
                  RECEIVES AN

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                  OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN
                  EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
                  REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AMENDED AND
                  RESTATED MANAGEMENT SUBSCRIPTION AND STOCKHOLDERS AGREEMENT
                  DATED AS OF FEBRUARY ___, 2000, BETWEEN THE PURCHASER PARTY
                  THERETO AND THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE
                  SECRETARY OF THE COMPANY, AND THE SECURITIES REPRESENTED BY
                  THIS CERTIFICATE MAY NOT BE VOTED, TRANSFERRED, SOLD,
                  ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
                  UNLESS SUCH VOTING, TRANSFER, SALE, ASSIGNMENT, PLEDGE,
                  HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
                  PROVISIONS OF SUCH AGREEMENT.

Any stock certificate issued at any time in exchange or substitution for any
certificates bearing such legends (except a new certificate issued upon the
completion of a public distribution of Common Stock represented thereby) shall
also bear such (or substantially equivalent) legends, unless the Common Stock
represented by such certificate is no longer subject to the provisions of this
Agreement and, in the opinion of counsel for the Company, the Common Stock
represented thereby need no longer be subject to restrictions pursuant to the
Act or applicable state securities law. The Company shall not be required to
transfer on its books any certificate for Common Stock in violation of the
provisions of this Agreement.

         3.       Transfer of Stock.

                  (a) Prohibition on Transfer. Subject to the provisions of
Section 6, the Management Investor agrees that the Management Investor will not,
on or prior to the tenth anniversary of this Agreement, directly or indirectly,
sell, pledge, give, bequeath, transfer, assign or in any other way whatsoever
encumber or dispose of (a "transfer") any Common Stock (or any interest therein)
acquired hereunder, except for transfers (i) pursuant to this Section 3 or
Sections 4, 7, 8, or 9 of this Agreement or (ii) as may be specifically
authorized by the Board of Directors of the Company in its sole discretion
(either of (i) or (ii), a "Permitted Transfer").

                  (b) Transfer Procedure; Right of First Refusal. The Management
Investor agrees that the Management Investor will not, after the lapse of the
restriction in clause (a) of this Section 3, transfer any Common Stock (or
interest therein) acquired hereunder, except for Permitted Transfers or
transfers in accordance with the following:

                           (1) If the Management Investor shall have received a
         bona fide arm's length written offer (a "Bona Fide Offer") which the
         Management Investor desires to

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         accept from an independent party unrelated to the Management Investor
         (the "Outside Party") for the purchase of such Common Stock for
         consideration consisting entirely of cash, then the Management Investor
         shall give a notice in writing (the "Option Notice") to the Company
         setting forth such desire, which notice shall set forth at least the
         name and address of the Outside Party and the price and terms of the
         Bona Fide Offer and be accompanied by a copy of the Bona Fide Offer.

                           (2) Upon the giving of such Option Notice, the
         Company shall have an option (transferable, in the sole discretion of
         the Board of Directors of the Company, to GEI or to a subsidiary) to
         purchase all of the Common Stock specified in the Option Notice, said
         option to be exercised within thirty (30) days after the giving of such
         Option Notice, by giving a counter-notice (the "Election Notice") to
         the Management Investor.

                           (3) If the Company (or GEI or a subsidiary, if
         applicable) elects to purchase all of such Common Stock, it shall be
         obligated to purchase, and the Management Investor shall be obligated
         to sell, such Common Stock at the cash price and terms indicated in the
         Bona Fide Offer, except that the closing of the purchase by the Company
         (or GEI or a subsidiary, if applicable) shall be held on a business day
         within sixty (60) days after the giving of the Election Notice at 10:30
         a.m., Central Standard Time, at the principal executive office of the
         Company, or at such other time and place as may be mutually agreed to
         by the Company (or GEI or a subsidiary) and the Management Investor.

                           (4) If an Election Notice is not delivered by the
         Company (or GEI or a subsidiary, if applicable) within the period
         specified above, the Management Investor thereafter, at any time within
         a period of sixty (60) days from the giving of said Option Notice, may
         transfer all of the provisions of this Agreement and, as a condition
         precedent to the completion of such transfer of Common Stock to such
         Outside Party, shall execute and deliver to the Company a written
         consent to such effect in form and substance satisfactory to the
         Company; provided, however, that in the event the Management Investor
         has not so transferred said Common Stock to the Outside Party within
         said three-month period, then said Common Stock thereafter shall
         continue to be subject to all of the restrictions contained in this
         Agreement.

                  (b) No Waiver by Company. Any election in any instance by the
Company (or GEI or a subsidiary, if applicable) not to exercise its rights of
first refusal under this Section 3 shall not constitute a waiver of such rights
with respect to any other proposed transfer of Common Stock.

                  (c) Transfer to Related Transferees. Notwithstanding anything
to the contrary contained in clauses (a) through (c) of this Section 3, the
Management Investor may transfer the Management Investor's Common Stock without
restriction to the Management Investor's Related Transferees (as defined below)
provided that each such Related Transferee shall first (i) execute a written
consent in form and substance satisfactory to the Company to be

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bound by all of the provisions of this Agreement and (ii) give a duplicate
original of such consent to the Company. The "Related Transferee" of the
Management Investor shall consist of the Management Investor's spouse, the
Management Investor's adult lineal descendants, the adult spouses of such lineal
descendants, trusts solely for the benefit of the Management Investor's spouse
or the Management Investor's minor or adult lineal descendants and, in the event
of death, the Management Investor's personal representatives (in their
capacities as such), estate and named beneficiaries. In the event of any
transfer by the Management Investor to his Related Transferees of all or any
part of the Management Investor's Common Stock (or in the event of any
subsequent transfer by any such Related Transferee to another Related Transferee
of the Management Investor), such Related Transferees shall receive and hold
said Common Stock subject to the terms of this Agreement and the rights and
obligations hereunder of the Management Investor from whom such Common Stock was
originally transferred as though said Common Stock was still owned by the
Management Investor, and such Related Transferees shall be deemed Management
Investors for the purposes of this Agreement (except as stated in Sections 13(b)
and (c) hereof). There shall be no further transfer of such Common Stock by a
Related Transferee except between and among such Related Transferee, the
Management Investor to whom such Related Transferee is related and the other
Related Transferees of the Management Investor, or except as permitted by this
Agreement.

         4.       Company "Call" Option.

                  (a) Upon the termination of the Management Investor's
employment or cessation of services as director with the Company or any of its
subsidiaries for any reason (including without limitation Voluntary Termination,
a Just Cause Dismissal, Involuntary Termination Without Cause or the Retirement,
death or Permanent Disability of the Management Investor (as such terms are
defined in Section 5 below)) (a "Call Purchase Event"), subject to the
provisions of Section 6 and this Section 4, the Company may, at its option
exercisable by written notice (a "Purchase Notice") delivered to the Management
Investor (or in the case of a deceased Management Investor, the Management
Investor's personal representative) within ninety (90) days after the applicable
Call Purchase Event (or, in the event the applicable Call Purchase Event is the
death of the Management Investor, within thirty (30) days after the appointment
and qualification of the deceased Management Investor's personal representative,
if later), elect to purchase and, upon the giving of such notice, the Company
shall be obligated to purchase and the Management Investor (and the Related
Transferees, if any, of the Management Investor or, in the case of a deceased
Management Investor, his personal representative) (the "Seller" shall be
obligated to sell, all, or any lesser portion indicated in the Purchase Notice,
of the Common Stock held by the Management Investor (and his Related
Transferees, if any) at a per share price equal to:

                           (1) in the case of Voluntary Termination or a Just
         Cause Dismissal, the lower of the Purchase Price or the Fair Market
         Value (as such term is defined in Section 5 below); or

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                           (2) in the case of any other termination (including
         without limitation Involuntary Termination Without Cause, death,
         Retirement or Permanent Disability), the Fair Market Value.

                  (b) If the Company does not elect to exercise its option set
forth in paragraph (a) of this Section 4, the Company shall give written notice
that it is not so electing to GEI within the time periods specified in paragraph
(a) of this Section 4 for the giving of the Purchase Notice. Upon receipt of
such notice from the Company, GEI shall have the option, exercisable by written
notice (a "GEI Purchase Notice") delivered to the Management Investor (or, in
the case of a deceased Management Investor, the Management Investor's personal
representative) within fifteen (15) days after receipt of such notice from the
Company, to purchase from the Seller (and, upon the giving of the GEI Purchase
Notice, GEI shall be obligated to purchase and the Seller shall be obligated to
sell) all, or any lesser portion indicated in the GEI Purchase Notice, of the
Common Stock held by the Seller at the per share price set forth in paragraph
(a) of this Section 4.

                  (c) In the event a purchase of shares of Common Stock pursuant
to this Section 4 shall be prohibited by law or would cause a default under the
terms of any indenture or loan agreement or other instrument to which the
Company or any of its subsidiaries may be a party, the obligations of the Seller
and the Company pursuant to this Section 4 shall be suspended and no such
default would be caused; provided, however, that (x) the purchase price to be
paid by the Company for the shares shall accrue interest at the lowest rate
necessary to prevent the imputation of interest or original issue discount under
the Internal Revenue Code of 1986, as amended, reduced by any dividends or
distributions on such Common Stock during the period of such suspension, which
interest shall likewise be paid when such prohibition first lapses or is waived
and no such default would be caused and (y) in the event of any such suspension,
if GEI so elects and no violation of law would be caused and no default under
the terms of any indenture or loan agreement or other instrument to which the
Company or any of its subsidiaries may be a party would result, the Company
shall transfer its obligations under this Section 4 to GEI or to a subsidiary,
in which case GEI or the subsidiary (as the case may be) and the Management
Investor (and the Related Transferees, if any, of the Management Investor) shall
be obligated to complete the purchase of shares of Common Stock pursuant to this
Section 4.

         5.       Purchase Price, Closing and Terms of Payment for "Call" Sales.

                  (a) For purposes of this Agreement, the "Fair Market Value" of
each share of Common Stock shall be determined as of the time of the Call
Purchase Event by the Board of Directors of the Company in the exercise of its
reasonable discretion; provided, however, that such determination shall be based
upon the Company as a going concern and shall not discount the value of such
shares either because they are subject to the restrictions set forth in this
Agreement or because they constitute only a minority interest in the Company.
Upon delivery of notice of such Fair Market Value to the Seller of Common Stock
pursuant to Section 4 (which shall indicate, in a general fashion, the factors
considered by the Board of Directors in determining such amount), such Seller
shall have ten (10) business days in which

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to notify the Company in writing of any disagreement. If no written notice of
disagreement is given, the Fair Market Value as determined by the Board of
Directors of the Company shall be conclusive. If written notice is given of a
disagreement, the Company and such Seller shall mutually agree upon an
independent appraiser experienced in making valuations of such sort which shall
make a determination of the Fair Market Value. Such determination shall be
final, binding and nonappealable upon the Company and such Seller. The costs and
expenses incurred in connection with the determination made by the independent
appraiser shall be borne equally by the Company and by the Seller.

                  (b) For purposes of this Agreement, the Management Investor
shall be deemed to be "Permanently Disabled" if the Management Investor becomes
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. The Company, at its option and expense, shall
be entitled to retain a physician to confirm the existence of such incapacity or
disability and the determination of such physician shall be binding upon the
Company and the Management Investor; provided, however, that if the Management
Investor disagrees with such determination of Permanent Disability within
fifteen (15) days of being notified of it, the Management Investor and the
Company shall jointly agree upon an independent physician (or, if they are
unable to agree upon such physician, they shall each select a physician and
those two physicians shall select the independent physician) who shall make the
determination, whose decision shall be binding upon the Company and the
Management Investor.

                  (c) For the purposes of this Agreement, the Management
Investor shall be deemed to be "Involuntarily Terminated Without Cause" upon the
later of the termination of the Management Investor's employment by, or removal
or failure to be reelected as a director of, the Company or any of its
subsidiaries, unless such termination, removal or failure to be reelected is due
to Retirement, death, Permanent Disability or a Just Cause Dismissal.
"Retirement" shall mean retirement in accordance with the retirement policies or
practices of the Company or its subsidiaries applicable to executives or
directors, as the case may be, but in no event at an age of less than seventy
(70). "Voluntary Termination" shall mean the termination by the Management
Investor of his employment with, or his resignation or refusal to stand for
reelection as a director of, the Company or any of its subsidiaries, for any
reason other than death, Permanent Disability, or Retirement. A "Just Cause
Dismissal" shall mean termination of the Management Investor's employment with,
or service as a director of, the Company or any of its subsidiaries as a result
of any of the following (each, a "Cause"):

                           (1) the Management Investor commits any act of fraud,
         intentional misrepresentation or serious misconduct in connection with
         the business of the Company or its subsidiaries, including but not
         limited to, falsifying any documents or agreements (regardless of
         form); or

                           (2) the Management Investor materially violates any
         rule or policy of the Company or its subsidiaries (A) for which
         violation an employee may be terminated pursuant to the written
         policies of the Company or its subsidiaries reasonably applicable

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         to an executive employee, or (B) which violation results in material
         damage to the Company or its subsidiaries, or (C) which, after written
         notice to do so, the Management Investor fails to correct within a
         reasonable time; or

                           (3) the Management Investor willfully breaches or
         habitually neglects any material aspect of the Management Investor's
         duties (A) as described in the Management Investor's employment
         contract, or (B) in the ordinary course of the Management Investor's
         employment or service as a director, or (C) assigned to the Management
         Investor by the Company or its subsidiaries, which assignment was
         reasonable in light of the Management Investor's position with the
         Company or its subsidiaries (all of the foregoing duties, "Duties"); or

                           (4) the Management Investor fails, after written
         notice, adequately to perform any Duties and such failure is reasonably
         likely to have an adverse impact upon the Company, its subsidiaries or
         the operations of any of them; or

                           (5) the Management Investor materially fails to
         comply with a direction from the Board of Directors of the Company or
         its subsidiaries with respect to a material matter, which direction was
         reasonable in light of the Management Investor's position with the
         Company or its subsidiaries; or

                           (6) while employed by the Company or its
         subsidiaries, and without the written approval of the Chief Executive
         Officer of the Company (or, in case the Management Investor is such
         Chief Executive Officer, approval of the Company's Board of Directors),
         the Management Investor performs services for any other corporation or
         person which competes with the Company or its subsidiaries; or

                           (7) the Management Investor is convicted by a court
         of competent jurisdiction of a felony (other than a traffic or moving
         violation) or any crime involving dishonesty; or

                           (8) any other action or condition that may result in
         termination of an employee for cause pursuant to any generally applied
         standard, of which standard the Management Investor knew or reasonably
         should have known, adopted in good faith by the Board of Directors of
         the Company or its subsidiaries from time to time but prior to such
         action or condition; or

                           (9) any willful breach by the Management Investor of
         his or her fiduciary duties as a director of the Company or any of its
         subsidiaries.

In the event that there is a dispute between the Management Investor and the
Company as to whether "Cause" for termination exists: (x) such termination shall
nonetheless be effective, (y) such dispute shall be subject to arbitration
pursuant to Section 13(f) hereof and (z) the payments or deliveries, if any, to
be made by the Company or GEI or any subsidiary in connection with a sale or
purchase of the Common Stock held by the Management Investor

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pursuant to Section 4 shall be delayed until the final resolution of such
dispute in such arbitration.

                  (b) The closing for all purchases and sales of Common Stock
provided for in Section 4 hereof shall be at the principal executive offices of
the Company at 10:30 a.m., Central Standard Time, on the later of (A) the
sixtieth day after the giving of the applicable Purchase Notice or GEI Purchase
Notice and (B) the thirtieth day after the final determination of the Fair
Market Value of the Common Stock as set forth above; provided, however, that if
the Management Investor (or a Related Transferee) who has become obligated to
sell shares of Common Stock hereunder is deceased on the closing date and such
deceased person's personal representative shall not have been appointed and
qualified by such date, then the closing shall be postponed until the tenth day
after the appointment and qualification of such personal representative. If the
aforesaid closing date falls on a day which is not a business day, then the
closing shall be held on the next succeeding business day.

                  (c) The purchase price for the purchase and sale of Common
Stock pursuant to the provisions hereof shall be paid in cash, by certified or
by official bank check.
                  (d) The Seller or Sellers of shares of Common Stock sold
pursuant to Section 4 hereof, if such shares are represented by one or more
certificates issued by the Company, shall cause such certificated shares to be
delivered to the Company at the closing free and clear of all liens, charges or
encumbrances of any kind. Such Seller or Sellers shall take all actions as the
Company shall request as necessary to vest in the Company at such closing all
shares sold pursuant to Section 4 hereof, whether in certificated or
uncertificated form, free and clear of all liens, charges and encumbrances
incurred, voluntarily or involuntarily, by or through Seller. At each closing
pursuant to Section 4, the Company shall deliver to the Seller reasonable
assurances to the effect that the Company's or a subsidiary's purchase of shares
thereat has been duly and validly authorized and complies with applicable state
securities laws.

         6.       Termination and Lapse of Rights and Restrictions; Application
to Other Stock.

                  (a) The provisions of Sections 1(b) (ii), 3(a), 3(b), 4, 8 and
9 of this Agreement shall lapse and be of no further effect with respect to
shares of Common Stock upon the commencement of the public trading of the
Company's Common Stock (or any capital stock exchanged for or distributed upon
such Common Stock as described in paragraph (b) of this Section 6) on any
national securities exchange, on the NASDAQ National Market System or on the
NASDAQ "Small Cap" Issues System.

                  (b) In the event any capital stock of the Company or any other
corporation shall be distributed on, with respect to, or in exchange for shares
of Common Stock of the Company as a stock dividend, stock split, spin-off,
reclassification or recapitalization in connection with any merger or
reorganization, the restrictions, rights and options set forth in Sections 3, 4,
8 and 9 shall apply with respect to such other capital stock to the same extent
as

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they are, or would have been applicable, to the Common Stock acquired hereunder
on, or with respect to, which such other capital stock was distributed.

         7.       Piggyback Registration Rights.

                  (a) As used in this Agreement, the term "Holder" means the
Management Investor, a Related Transferee of the Management Investor or an
Outside Party.

                  (b) Subject to the provisions herein, if the Company at any
time proposes to include all or any part of GEI's Common Stock in a public
offering of Common Stock registered under the Act (other than registration (x)
on Forms S-4 or S-8 or any successor forms thereto or (y) filed in connection
with an exchange offer), the Company shall give written notice of the proposed
registration to each Holder at least thirty (30) days prior to the filing
thereof, and each Holder shall have the right to request that all or any part of
its shares of Common Stock be included in such registration by giving written
notice to the Company within fifteen (15) days after the giving of such notice
by the Company (any Holder giving the Company a notice requesting that shares of
Common Stock owned by it be included in such proposed registration being
hereinafter referred to in this Section 7 as a "Registering Holder"); provided,
however, that (i) if the registration is in whole or in part an underwritten
primary registration on behalf of the Company and the managing underwriters of
such offering determine that the aggregate amount of securities of the Company
which all Registering Holders and all other security holders of the Company,
pursuant to contractual rights to participate in such registration ("Other
Holder"), propose to include in such registration statement exceeds the maximum
amount of securities that should be included therein, the Company will include
in such registration, first, the shares which the Company proposes to sell and,
second, the shares of such Registering Holders and other securities to be sold
for the account of Other Holders, pro rata among all such Registering Holders
and Other Holders, taken together, on the basis of the relative equity interests
in the Company of all Registering Holders and Other Holders who have requested
that securities owned by them be so included (it being agreed and understood,
however, that such underwriters shall have the right to eliminate entirely the
participation in such registration of all Registering Holders and Other
Holders), and (ii) if the registration is an underwritten secondary registration
on behalf of any of the Other Holders pursuant to demand registration rights
(other than such right of GEI or its Affiliates (defined below)) and the
managing underwriters determine that the aggregate amount of securities which
all Registering Holders and all Other Holders propose to include in such
registration exceeds the maximum amount of securities that should be included
therein, the Company will include in such registration, first, the securities to
be sold for the account of the Other Holders demanding registration (but only to
the extent such Other Holders are entitled to demand inclusion thereof) second,
any securities to be sold for the account of the Company, and, third, the shares
of such Registering Holders and other securities to be sold for the account of
the Other Holders electing to include (but not being entitled to demand
inclusion of) securities in such registration, pro rata among all such
Registering Holders and Other Holders, taken together, on the basis of relative
equity interests in the Company of all Registering Holders and such Other
Holders who have requested that securities owned by them be included (it being
agreed and understood, however, that such underwriters shall have the right to

                                       11

<PAGE>   12

eliminate entirely the participation therein of all such Registering Holders and
Other Holders not entitled to demand inclusion of securities in such
registration). Shares of Common Stock proposed to be registered and sold for the
account of any Registering Holder shall be sold to prospective underwriters
selected or approved by the Company on the terms and subject to the conditions
of one or more underwriting agreements negotiated between the Company and/or
Other Holders demanding registration and the prospective underwriters. For the
purposes hereof, an "Affiliate" of any person or entity means any other person
or entity controlling, controlled by or under common control with such person or
entity; provided, however, that none of the Management Stockholders (defined
below) or any of their Affiliates shall be deemed to be an Affiliate of GEI.
"Management Stockholders" means, collectively, all holders of capital stock or
other securities issued by the Company who are also employees of the Company or
its subsidiaries.

         In the event the Company proposes to register any of its Common Stock
under the Act on Form S-8 (or any successor thereto), if the Company determines
that it is permissible to do so and will not result in material added costs to
the Company from such registration, the Company shall, at a Registering Holder's
request, include in such registration a portion of such Registering Holder's
shares of Common Stock equal to the portion, if any, of GEI's shares of Common
Stock held as of the date of this Agreement sold by GEI in private transactions
from the date hereof to the date of such request.

         The Registering Holders shall be permitted to withdraw all or a part of
the shares of Common Stock held by such Registering Holders which were to be
included in such registration at any time prior to the effective date of such
registration. The Company shall not be required to maintain the effectiveness of
the registration statement for such registration beyond the earlier to occur of
120 days after the effective date thereof or consummation of the distribution by
the Registering Holders included in such registration statement. The Company may
withdraw any registration statement at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Holder.

                  (c) The registration rights sets forth in this Section 7 shall
terminate and be of no further effect with respect to the Common Stock held by a
Holder: (i) at such time as the Company has filed, and there has become
effective, one registration statement in which all Registering Holders have been
afforded the opportunity to include all shares of such class of securities held
by them or (ii) if earlier, after an initial public offering, all shares of
Common Stock acquired hereunder and held by the Management Investor are eligible
for sale pursuant to the provisions of Rule 144 under the Act.

                  (d) In connection with any registration of shares under the
Act pursuant to this Section 7, the Company will furnish each Holder whose
shares of Common Stock are registered thereunder with a copy of the registration
statement and all amendments thereto and will supply each such Holder with
copies of any prospectus included therein (including a preliminary prospectus
and all amendments and supplements thereto), in such quantities as may be
reasonably necessary for the purpose of the proposed sale or distribution
covered by such registration. The Company shall not, however, be required to
maintain the registration statement and to supply copies of a prospectus for a
period beyond 120 days after the effective date of such registration statement,
at the end of such period, the Company may deregister any shares of Common Stock
covered by such registration

                                       12

<PAGE>   13

statement and not then sold or distributed. In connection with any such
registration of shares of Common Stock, the Company will, at the request of the
managing underwriter with respect thereto, use its best efforts to qualify such
registered shares for sale under the securities laws of such state as is
reasonably required to permit the distribution of such registered shares;
provided, however, that the Company shall not be required in connection
therewith or as condition thereof to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or become
subject to taxation in any jurisdiction.

                  (e) Notwithstanding any other provision of this Section 7,
Holder agrees that in the event of an underwritten public offering of Common
Stock for the account of the Company, such Holder will not offer for public sale
(other than as part of such underwritten public offering) any shares of Common
Stock during the ten (10) days prior to, and such number of days (not in excess
of 180) after, the effective date of the registration statement in connection
with such public offering as the underwriters and the Company may request in
writing, without the consent of the underwriters; provided, however, that, in
the case of death of a Holder, if consented to by the underwriters, a Holder
shall be permitted to offer for public sale prior to the expiration of such
period shares of Common Stock reasonably necessary to generate funds of the
payment of estate taxes.

                  (f) Except as otherwise required by state securities laws or
the rules and regulations promulgated thereunder, all expenses, disbursements
and fees incurred by the Company in connection with carrying out its obligations
under this Section 7 shall be borne by the Company; provided, however, that each
Holder shall pay (i) all costs and expenses of counsel for such Holder, if such
counsel is not also counsel for the Company, (ii) all underwriting discounts,
commissions and expenses and all transfer taxes with respect to the shares of
Common Stock sold by such Holder and (iii) all other expenses incurred by such
Holder and incidental to the sale and delivery of the shares of Common Stock to
be sold by such Holder.

                  (g) It shall be a condition of each Holder's rights hereunder
to have shares of Common Stock owned by such Holder registered that:

                           (1) such Holder shall cooperate with the Company by
         supplying information and executing documents relating to such Holder
         or the securities of the Company owned by such Holder in connection
         with such registration;

                           (2) such Holder shall enter into any undertakings and
         take such other action relating to the conduct of the proposed offering
         which the Company or the underwriters may reasonably request as being
         necessary to insure compliance with federal and state securities laws
         and the rules or other requirements of the National Association of
         Securities Dealers, Inc. or which the Company or the underwriters may
         reasonably request to otherwise effectuate the offering; and

                                       13

<PAGE>   14

                           (3) such Holder shall execute and deliver an
         agreement to indemnify and hold harmless the Company, each of its
         directors, each of its officers who has signed the registration
         statement, any underwriter (as defined in the Act) and each person, if
         any who controls the Company or such underwriter within the meaning of
         the Act, against such losses, claims, damages or liabilities (including
         reimbursement for legal and other expenses) to which the Company or any
         such director, officer, underwriter or controlling person may become
         subject under the Act or otherwise, in such manner as is customary for
         registration of the type then proposed and, in any event, equivalent in
         scope to indemnities given by the Company in connection with such
         registration, but only with respect to written information furnished by
         such Holder in his or her capacity as a selling shareholder in
         connection with such registration.

                  (h) In the event of any registration under the Act of any
shares of Common Stock pursuant to this Section 7, the Company hereby agrees to
indemnify and hold harmless each Holder disposing of such shares against such
losses, claims, damages or liabilities (including reimbursement for legal and
other expenses) to which such Holder may become subject under the Act or
otherwise, in such manner as is customary for registrations of the type then
proposed, but not with respect to written information furnished by such Holder
in his capacity as a selling shareholder in connection with such registration.

         8.       Tag-Along Rights.

                  (a) Right to Participate in Sale. If GEI enters into an
agreement to transfer, sell or otherwise dispose of (such transfer, sale or
other disposition being referred to as a "Tag-Along Sale") a majority of its
shares of Common Stock of the Company held on the date hereof, then GEI shall
afford the Holder the opportunity to participate proportionately in such
Tag-Along Sale in accordance with this Section 8. The Holder shall have the
right, but not the obligation (except as provided in Section 9), to participate
in such Tag-Along Sale. The number of shares of Common Stock that the Holder
will be entitled to include in such Tag-Along Sale (the "Management Investor's
Allotment") shall be determined by multiplying (i) the number of shares of
Common Stock held by the Holder on the Tag-Along Sale Date (as defined below),
by (ii) a fraction, the numerator or which shall equal the number of shares of
Common Stock proposed by GEI to be sold or otherwise disposed of pursuant to the
Tag-Along Sale and the denominator of which shall equal the total number of
shares of Common Stock that are beneficially owned by (a) GEI and (b) any holder
of shares of Common Stock (including the Holder) that has the right to
"tag-along" in the Tag-Along Sale on the Tag-Along Sale Date. The "Tag Along
Notice Date" shall be the date that the Tag-Along Sale Notice (as defined below)
is first delivered, mailed or sent by courier, Telex or telecopy to the Holder.

                  (b) Limitation on Management Investor Representations;
Indemnity. Any sales of shares of Common Stock by a Holder as a result of the
"Tag-Along Rights" granted to the Holder pursuant to this agreement shall be on
the same terms and conditions as the proposed Tag-Along Sale by GEI; provided,
however, that in negotiating a Tag-Along Sale, GEI shall use its reasonable,
good faith efforts to provide (i) that the only representation and warranty
which the Holder shall be required to make in connection with any transfer is a
warranty with

                                       14

<PAGE>   15

respect to the Holder's own ability to convey title thereto free and clear of
liens, encumbrances or adverse claims and (ii) that the warranty made in
connection with any transfer is the several liability of the Holder (and not
joint with any other person) and that such liability is limited to the amount of
proceeds actually received by such Holder.

                  (c) Sale Notice. GEI shall provide the Holder with written
notice (the "Tag-Along Sale Notice") not more than sixty (60) nor less than
twenty (20) days prior to the proposed date of the Tag-Along Sale (the
"Tag-Along Sale Date"). Each Tag-Along Sale Notice shall set forth: (i) the name
and address of each proposed transferee or purchaser of shares in the Tag-Along
Sale; (ii) the number of shares proposed to be transferred or sold by GEI; (iii)
the proposed amount and form of consideration to be paid for such shares and the
terms and conditions of payment offered by each proposed transferee or
purchaser; (iv) the aggregate number of shares of Common Stock held of record as
of the close of business on the day immediately preceding the Tag-Along Notice
Date by GEI; (v) the Management Investor's Allotment assuming the Holder elected
to sell the maximum number of shares of Common Stock possible; (vi) confirmation
that the proposed purchaser or transferee has been informed of the "Tag-Along
Rights" provided for herein and has agreed to purchase shares of Common Stock
(including Vested Shares) in accordance with the terms hereof and (vii) the
Tag-Along Sale Date.

                  (d) Tag-Along Notice. If the Holder wishes to participate in
the Tag-Along Sale, the Holder shall provide written notice (the "Tag-Along
Notice") to GEI no less than ten (10) days prior to the Tag-Along Sale Date. The
Tag-Along Notice shall set forth the number of shares of Common Stock that such
Holder elects to include in the Tag-Along Sale, which shall not exceed the
Management Investor's Allotment. The Tag-Along Notice shall also specify the
aggregate number of additional shares of Common Stock owned of record as of the
close of business on the day immediately preceding the Tag-Along Notice Date by
such Holder, if any, which such Holder desires also to include in the Tag-Along
Sale ("Additional Shares") in the event there is any undersubscription for the
entire amount of all Management Investors' Allotments of all shares that may be
included by persons having, and pursuant to, tag-along rights relative to GEI
(collectively, the "Management Investors' Allotments"). In the event there is an
under-subscription by all holders of Management Investors' Allotments for the
entire amount of the Management Investors' Allotments, GEI shall apportion the
unsubscribed Management Investors' Allotments to such holders whose tag-along
apportionment shall be on a pro rata basis among such holders in accordance with
the number of Additional Shares specified by all such holders in their Tag-Along
Notice. The Tag-Along Notices given by the Holder shall constitute the Holder's
binding agreement to sell such shares of Common Stock on the terms and
conditions applicable to the Tag-Along Sale, subject to the provisions of
Section 8(b) above; provided, however, that in the event that there is any
material change in the terms and conditions of such Tag-Along Sale applicable to
the Holder after the Holder gives the Tag-Along Notice, then, notwithstanding
anything herein to the contrary, the Holder shall have the right to withdraw
from participation in the Tag-Along Sale with respect to all of its shares of
Common Stock affected thereby. If the purchaser does not consummate the purchase
of all of such shares on the same terms and conditions applicable to GEI (except
as otherwise provided herein) then GEI shall not consummate the Tag-Along Sale
of any of its shares to such

                                       15

<PAGE>   16

transferee or purchaser, unless the shares of the Holder and GEI are reduced or
limited pro rata in proportion to the respective number of shares actually sold
in any such Tag-Along Sale.

         If a Tag-Along Notice is not received by GEI from the Holder prior to
the ten-day period specified above, GEI shall have the right to sell or
otherwise transfer the number of shares specified in the Tag-Along Notice to the
proposed purchaser or transferee without any participation by such Holder, but
only on terms and conditions which are no more favorable in any material respect
to GEI than as stated in the Tag-Along Notice to the Holder and only if such
Tag-Along Sale occurs on a date within sixty (60) business days of the Tag-Along
Sale Date.

                  (e) Authority to Record Transfer/Delivery of Certificates. On
the Tag-Along Sale Date, the Holder, if a participant therein, authorizes the
Company (or the Company's transfer agent, if any) to record in the Company's
books and records the transfer of all of the Holder's shares of Common Stock
which are not represented by one or more certificates issued by the Company,
from the Holder to the purchaser in the Tag-Along Sale. On the Tag-Along Sale
Date, the Holder, if a participant therein, shall also deliver all certificates,
if any, issued by the Company which represent shares of the Company's Common
Stock, duly endorsed for transfer with signatures guaranteed, to the purchaser
in the Tag-Along Sale, in the manner and at the address indicated in the
Tag-Along Notice against delivery of the purchase price for such shares;
provided, however, that in the event the Company has possession of any such
certificate(s) pursuant to this Agreement, upon the written request of the
Holder at least five (5) business days in advance of the Tag-Along Sale Date,
the Company shall deliver such certificate(s) to the purchaser at the time and
in the manner described above.

                  (f) Exempt Transfers. The provisions of this Section 8 shall
not apply to (i) any bona fide underwritten offering of Common Stock pursuant to
an effective registration statement under the Act or any bona fide public
distribution of Common Stock pursuant to Rule 144 thereunder, provided that any
such sale complies with the provisions of this Agreement; (ii) any transfer,
sale or other disposition by GEI to one of its Affiliates (except that (A) prior
to any such disposition, the party receiving such shares of Common Stock shall
agree in writing to be bound by the terms of this Agreement applicable to GEI as
if such transferee were an original party hereto and (B) any such shares of
Common Stock shall continue to be subject to this Agreement); (iii) any
redemption by the Company of its Common Stock or (iv) any GEI Distribution (as
defined in Section 14).

         9.       Drag-Along Sales.

                  (a) Right to Require Sale. Notwithstanding any other provision
hereof, if GEI agrees to sell 100% of the shares of Common Stock held by it to a
third person who is not an affiliate of GEI (a "Third Party") or if GEI agrees
to sell a portion of its shares pursuant to a transaction in which more than 50%
of the total Common Stock of the Company will be sold to a Third Party (either
of such sales, a "Drag-Along Sale"), then, upon the demand of GEI, each Holder
hereby agrees to sell to such Third Party the same percentage of the total
number of shares of Common Stock held by such Holder on the date of the
Drag-Along Notice, as the

                                       16

<PAGE>   17

number of shares GEI is selling in the Drag-Along Sales bears to the total
number of shares held be GEI as of the date of the Drag-Along Notice (the "Sale
Percentage"), at the same price and on the same terms and conditions as GEI has
agreed to with such Third Party; provided, however, that GEI shall use its
reasonable, good faith efforts to provide that (i) the only representation and
warranty which the Holder shall be required to make in connection with the
Drag-Along Sale is a representation and warranty with respect to the Holder's
own ownership of the shares of Common Stock to be sold by it and its ability to
convey title thereto free and clear of liens, encumbrances or adverse claims and
(ii) that the liability of any other Holder with respect to any representation
and warranty made in connection with the Drag-Along Sale is the several
liability of such other Holder (and not joint with any other person) and that
such liability is limited to the amount of proceeds actually received by such
other Holder in the Drag-Along Sale; provided further, that the Holder shall not
be obligated to participate in any Drag-Along Sale unless the Holder is provided
an opinion of counsel to the effect that the Drag-Along Sale is not in violation
of applicable federal or state securities or other laws or, if the Holder is not
provided with an opinion with respect to any matters contemplated by this
proviso, GEI shall (in addition to the indemnification contemplated below)
indemnify the Holder for any violation. If the Drag-Along Sale is in the form of
a merger transaction, the Holder agrees to vote his or her shares of Common
Stock in favor of such merger and not to exercise any rights of appraisal or
dissent afforded under applicable law.

                  (b) Drag-Along Notice. Prior to making any Drag-Along Sale, if
GEI elects to exercise the option described in this Section 9, GEI shall provide
the Holder with written notice (the "Drag-Along Notice") not more than sixty
(60) nor less than twenty (20) days prior to the proposed date of the Drag-Along
Sale (the "Drag-Along Sale Date"). The Drag-Along Notice shall set forth: (i)
the name and address of the Third Party; (ii) the proposed amount and form of
consideration to be paid per share and the terms and conditions of payment
offered by the Third Party; (iii) the aggregate number of shares of Common Stock
held by GEI as of the date that the Drag-Along Notice is first delivered, mailed
or sent by courier, telex or telecopy to the Holder; (iv) the sale percentage;
(v) the Drag-Along Sale Date and (vi) confirmation that the proposed Third Party
has agreed to purchase the Management Investor's shares of Common Stock in
accordance with the terms hereof.

                  (c) Authority to Record Transfer/Delivery of Certificates. The
Company (or the Company's transfer agent, if any) shall record in the Company's
books and records the transfer of the Sale Percentage of the Holder's shares of
Common Stock which is not represented by one or more certificates issued by the
Company, from the Holder to the Third Party, on the Drag-Along Sale Date. If any
part of the Sale Percentage of the Holder's shares of Common Stock is
represented by one or more certificates issued by the Company, the Holder shall
deliver such certificate or certificates for such shares, duly endorsed for
transfer with signatures guaranteed, to such Third Party on the Drag-Along Sale
Date in the manner and at the address indicated in the Drag-Along Notice against
delivery of the purchase price for the shares; provided, however, that in the
event the Company has possession of any such certificate(s) pursuant to this
Agreement, upon the written request of the Holder at least five (5) business
days in advance of the Drag-Along Sale Date, the Company shall deliver such
certificate(s) to the purchaser at the time and in the manner described above.

                                       17

<PAGE>   18

                  (d) Consideration. The provisions of this Section 9 shall
apply regardless of the form of consideration received in the Drag-Along Sale.

         10.      Noncompetition.

                  (a) Management Investor covenants and agrees that Management
Investor will not, during the period of his employment with the Company or any
of the Company's subsidiaries, and for a period of three (3) years after the
termination of such employment, without the prior written consent of the
Company, individually or in partnership or in conjunction with or as an
employee, officer, director, manager or agent of any other person, firm,
corporation or other entity, either directly or indirectly, undertake or carry
on or be engaged or have any financial or other interest in, or in any other
manner advise or assist any person, firm, corporation or other entity engaged or
interested in, any newspaper publishing business or any other business involving
the printing or publication of any newspaper, flyer, shopper, circular or other
publication carrying advertising, or any other business involving the
solicitation of local advertising, or any advertising agency business, or any
job printing business, carried on in any community or communities described in
Annex C attached hereto or within a radius of fifty (50) miles of the center
point of any such community.

                  (b) Management Investor further covenants and agrees to
refrain, for a period of three (3) years following the termination of Management
Investor's employment by or on behalf of the Company or any of the Company's
subsidiaries, for whatever reason, from (i) selling, or attempting to sell, any
advertising which is or is intended to be distributed or disseminated within any
community or communities listed in Annex B hereto or within a fifty (50) mile
radius of the center point of any such community to any person, firm,
corporation or other entity which, at the termination of such employment, was a
purchaser of advertising from one or more of the newspapers or other
publications of the Company or any of the Company's subsidiaries; (ii) inducing,
or attempting to induce, any person, firm or corporation to cease, discontinue
or fail to renew any advertising contract, agreement or arrangement with one or
more of the newspapers or other publications of the Company or any of the
Company's subsidiaries; and (iii) soliciting, employing, diverting or taking
away, or attempting to solicit, employ, divert or take away, any person who, at
the time of such termination or at any time during the six (6) month period
prior to such termination, was employed by or on behalf of the Company or any of
the Company's subsidiaries.

                  (c) Management Investor further agrees and warrants that the
covenants contained in this Section 10 are reasonable, that valid consideration
has been and will be received therefor and that the agreements set forth herein
are the result of arm's length negotiation between the parties hereto.
Management Investor believes that he will be able to earn an adequate livelihood
for himself and his dependents if the covenants contained in this Section 10 are
enforced against him.

                  (d) If any of the provisions of or covenants contained in this
Section 10 is hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which

                                       18

<PAGE>   19

shall be given full force and effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions of or
covenants contained in this Section 10 is held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the parties
agree (i) that the court making such determination shall have the power to
reduce the duration and/or geographical scope of such provision or covenant and,
in its reduced form, said provision or covenant shall be enforceable, provided,
however, that the determination of such court shall not affect the
enforceability of this Section 10 in any other jurisdiction, and (ii) that if
the court making such determination shall not have the power, or shall refuse to
exercise its power, to reduce the duration and/or geographical scope of such
provision or covenant, then the Management Investor shall, in further
consideration of stock sold pursuant to this Agreement, and without the
requirement of any further consideration, enter into a new Noncompetition
Agreement substantially in the form of this Section 10 but containing such
reduced duration and/or geographical scope as shall be determined by the
Company, in its sole discretion.

         11. 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 in Annex A or at such other place as the
Management Investor shall have designated by notice as herein provided to the
Company;

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

         12. 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 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.

                                       19

<PAGE>   20

         13.      Miscellaneous.

                  (a) Except as provided in the last sentence of this paragraph,
this writing 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, GEI and the Management Investor; provided,
however, that any of the provisions of this Agreement (except as hereinafter
provided) may be modified, amended or eliminated by agreement of the Company,
GEI and a majority in interest (on the basis of the number of shares of Common
Stock then owned by the Management Investor and/or his Related Transferees) of
all of the Management Investors and all holders of securities pursuant to
agreements in forms substantially similar to this Agreement, which agreement
shall bind the Management Investor whether or not the Management Investor has
agreed thereto; provided, further, that no modification or amendment which would
materially adversely affect the rights of the Management Investor under Sections
3, 4, 5, 6, 7, 8, 9, 10 or 13(a) of this Agreement shall be effective as to the
Management Investor if the Management Investor shall not have consented in
writing thereto. Anything in this Agreement to the contrary notwithstanding, any
modification or amendment of this Agreement by a written agreement signed by, or
binding upon, the Management Investor shall be valid and binding upon any and
all persons or entities who may, at any time, have or claim any rights under or
pursuant to this Agreement in respect of Common Stock acquired hereunder is
subject to, and the Company and the Management Investor agree to be bound by,
all of the terms and conditions of this Agreement.

                  (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) who may, at any time, have or claim any rights
under or pursuant to this Agreement in respect of the Common Stock acquired
hereunder.

                  (c) Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company, its
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 Common Stock acquired hereunder except in accordance
with this Agreement and any transferee shall hold such Common Stock having only
those rights and being subject to the restrictions provided for in this
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.

                                       20

<PAGE>   21

                  (e) The provisions of this Agreement shall apply to all shares
of Common Stock acquired hereunder by the Management Investor (including the
Management Investor's Related Transferees and any Outside Parties).

                  (f) Except as set forth in Section 12, arbitration shall be
the exclusive remedy for resolving any dispute or controversy between the
Company, any of its subsidiaries or GEI and any Management Investor, personal
representative of an Management Investor, Related Transferee, Holder or Outside
Party. 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
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.

                  (g) 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.

                  (h) 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.

                  (i) Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by any other party in order to carry out the provisions and
purposes of this Agreement.

                  (j) The Management Investor represents that, if the Management
Investor is married, the Management Investor's spouse has signed the
Acknowledgment and Agreement of Spouse relating to the Management Investor at
the end of this Agreement.

                                       21

<PAGE>   22

                  (k) 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.

                  (l) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.

                  (m) 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.

                  (n) 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.

         14.      GEI Distributions Exempt.

                  It is expressly understood and agreed that GEI may distribute
to its partners or equity participants, in accordance with the terms of its
limited partnership agreement, all or any part of the shares of the Company's
capital stock or other Company securities held by it (any such distribution, a
"GEI Distribution"). Notwithstanding anything to the contrary contained in this
Agreement, any GEI distribution shall not constitute a "sale," "transfer" or
"disposition" for any purpose under this Agreement and shall be exempt in all
respects from the terms and conditions of this Agreement. As an example, and
without limiting the generality of the foregoing, it is expressly understood and
agreed that a GEI Distribution shall not constitute a Tag-Along Sale for the
purposes of Section 8 hereof. Further, it is also expressly understood and
agreed that, following a GEI Distribution (i) the shares of the Company's
capital stock or other Company securities distributed to the partners or equity
participants of GEI shall in no way be subject to this Agreement and (ii) any
partner or equity participant of GEI which receives shares of the Company's
capital stock or other Company securities pursuant to a GEI Distribution shall
not be required or deemed to become a party to this Agreement or otherwise be
subject to this Agreement.

         15.      Original Agreement.

         This Agreement amends and restates the Original Agreement in its
entirety.

                                       22

<PAGE>   23

         IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Management Stockholders Agreement as of the first date written above.

                                  LIBERTY GROUP PUBLISHING, INC.

                                  By: _________________________________________
                                  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: _________________________________________
                                  Name: _______________________________________

                                  Management Investor

                                  By: _________________________________________
                                  Name: Kevin B. O'Shea

<PAGE>   24

                     Acknowledgment and Agreement of Spouse

         The undersigned, being the spouse of the Management Investor listed on
Annex A hereto, hereby agrees to be bound by the provisions of this Agreement.

                                      By: _____________________________________
                                      Name: ___________________________________

<PAGE>   25

                                     Annex A

<TABLE>
<CAPTION>
Name and Address
of Management Investor                       Number of Initial Purchased Shares
----------------------                       ----------------------------------

<S>                                                        <C>
Kevin B. O'Shea                                            800
123 Myrtle
Elmhurst, IL 60126
</TABLE>

<PAGE>   26

                                     Annex B

<TABLE>
<CAPTION>
Name and Address
of Management Investor                                   Number of Grant Shares
----------------------                                   ----------------------

<S>                                                                <C>
Kevin B. O'Shea                                                    27.5
123 Myrtle
Elmhurst, IL 60126
</TABLE>

<PAGE>   27

                                     Annex C

                Communities Subject to Noncompetition Provisions

                           None<PAGE>   1
                                                                    EXHIBIT 10.5

                  AMENDED AND RESTATED MANAGEMENT SUBSCRIPTION
                           AND STOCKHOLDERS AGREEMENT

         This Amended and Restated Management Subscription and Stockholders
Agreement (the "Agreement") is entered into as of February 1, 2000, by and
between Liberty Group Publishing, Inc., a Delaware corporation (the "Company"),
Green Equity Investors II, L.P., a Delaware limited partnership ("GEI"), and the
person identified on Annex A attached hereto (hereinafter referred to as the
"Management Investor"), with reference to the following facts:

         WHEREAS, GEI is the principal shareholder of the Company;

         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 has previously issued, and may from time to time hereafter desire to
issue, uncertificated shares of the Company's common stock (collectively, the
"Common Stock") to the Management Investor as set forth herein;

         WHEREAS, the Company, GEI and the Management Investor are parties to
that certain Management Subscription and Stockholders Agreement entered into as
of March ___, 1998 (the "Original Agreement"); and

         WHEREAS, the Company, GEI and the Management Investor desire to amend
and restate the Original Agreement in its entirety to be in the form of this
Agreement.

         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.       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 business
enterprises acquired by the Company, 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 Common Stock
hereunder and

<PAGE>   2

(iv) the purchase or issuance of Common Stock 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.
The Management Investor further acknowledges that investment in the Common Stock
hereunder involves significant risks and that these risks include, without
limitation, the facts that the Company is a relatively newly-formed holding
company and that the Company will have a leveraged financial structure.

                  (b)      Purchase for Investment.

                  (1) The Management Investor represents and warrants that: (A)
the Common Stock acquired by the Management Investor hereunder 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 such Common Stock 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 Common
Stock except in compliance with the Securities Act of 1933, as amended (the
"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.

                  (2) Subject to Section 6 below, in addition to the other
restrictions provided in this Agreement, the Management Investor agrees that
prior to making any disposition of any Common Stock acquired hereunder (other
than a disposition to the Company), the Management Investor will give not less
than 10 days' advance written notice to the 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.

                  (3) The Management Investor acknowledges that no trading
market for the Common Stock 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 Common Stock acquired hereunder for an indefinite
period. Further, the Company has no obligation to register any of the Common
Stock, except as expressly provided in Section 7 of this Agreement.

                                       2
<PAGE>   3

                  (4) The Management Investor acknowledges and agrees that
nothing herein, including the opportunity to make any equity investment in the
Company, shall be deemed to create any implication concerning the adequacy of
the Management Investor's services to any of the Company 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 the Company or its subsidiaries 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.

         2.       Grant of Management Shares and Legend on Certificates.

                  (a) Grant of Management Shares. The Company hereby grants to
the Management Investor the right to purchase, on the terms and conditions set
forth in this Agreement, all or any part of the number of shares of Common Stock
indicated on Annex A hereto (the "Initial Purchased Shares") at the purchase
price of $100 (the "Purchase Price") per share. In addition, the Company hereby
grants to the Management Investor the number of shares of Common Stock indicated
in Annex B hereto (the "Grant Shares"). All shares of Common Stock issued
hereunder (including, but not limited to, the Initial Purchased Shares, the
Grant Shares and any additional shares of Common Stock issued to the Management
Investor from time to time hereafter, whether as a dividend or other
distribution with respect to or in replacement of shares of Common Stock, as a
result of a stock dividend, stock split or subdivision, stock combination or
recapitalization, upon the exercise or conversion of other securities issued to
the Management Investor or otherwise) shall be subject to all of the terms and
restrictions contained in this Agreement, including, without limitation, those
in Sections 1(b), 3, 4, 8 and 9, and shall be uncertificated shares. Subject to
the limitations set forth in Section 2(b), the Management Investor shall be
entitled, upon written request to the Company, to have a certificate issued to
him or her representing Common Stock issued hereunder.

                  (b) Legend on Certificates. Each stock certificate issued to
the Management Investor upon written request to the Company representing Common
Stock issued hereunder shall bear the following (or substantially equivalent)
legends on the face or reverse side thereof:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
                  AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
                  TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
                  AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
                  COVERING SUCH SECURITIES, THE SALE IS MADE IN
                  ACCORDANCE WITH RULE 144 OR ANY SUCCESSOR RULE UNDER
                  THE ACT OR LIBERTY GROUP PUBLISHING, INC. (THE
                  "COMPANY") RECEIVES AN

                                   3
<PAGE>   4

                  OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN
                  EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE
                  SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
                  TO AN AMENDED AND RESTATED MANAGEMENT SUBSCRIPTION AND
                  STOCKHOLDERS AGREEMENT DATED AS OF FEBRUARY ___, 2000,
                  BETWEEN THE PURCHASER PARTY THERETO AND THE COMPANY, A
                  COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
                  COMPANY, AND THE SECURITIES REPRESENTED BY THIS
                  CERTIFICATE MAY NOT BE VOTED, TRANSFERRED, SOLD,
                  ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
                  OF UNLESS SUCH VOTING, TRANSFER, SALE, ASSIGNMENT,
                  PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
                  WITH THE PROVISIONS OF SUCH AGREEMENT.

Any stock certificate issued at any time in exchange or substitution for any
certificates bearing such legends (except a new certificate issued upon the
completion of a public distribution of Common Stock represented thereby) shall
also bear such (or substantially equivalent) legends, unless the Common Stock
represented by such certificate is no longer subject to the provisions of this
Agreement and, in the opinion of counsel for the Company, the Common Stock
represented thereby need no longer be subject to restrictions pursuant to the
Act or applicable state securities law. The Company shall not be required to
transfer on its books any certificate for Common Stock in violation of the
provisions of this Agreement.

         3.       Transfer of Stock.

                  (a) Prohibition on Transfer. Subject to the provisions of
Section 6, the Management Investor agrees that the Management Investor will not,
on or prior to the tenth anniversary of this Agreement, directly or indirectly,
sell, pledge, give, bequeath, transfer, assign or in any other way whatsoever
encumber or dispose of (a "transfer") any Common Stock (or any interest therein)
acquired hereunder, except for transfers (i) pursuant to this Section 3 or
Sections 4, 7, 8, or 9 of this Agreement or (ii) as may be specifically
authorized by the Board of Directors of the Company in its sole discretion
(either of (i) or (ii), a "Permitted Transfer").

                  (b) Transfer Procedure; Right of First Refusal. The Management
Investor agrees that the Management Investor will not, after the lapse of the
restriction in clause (a) of this Section 3, transfer any Common Stock (or
interest therein) acquired hereunder, except for Permitted Transfers or
transfers in accordance with the following:

                           (1) If the Management Investor shall have received a
         bona fide arm's length written offer (a "Bona Fide Offer") which the
         Management Investor desires to

                                        4
<PAGE>   5

         accept from an independent party unrelated to the Management Investor
         (the "Outside Party") for the purchase of such Common Stock for
         consideration consisting entirely of cash, then the Management Investor
         shall give a notice in writing (the "Option Notice") to the Company
         setting forth such desire, which notice shall set forth at least the
         name and address of the Outside Party and the price and terms of the
         Bona Fide Offer and be accompanied by a copy of the Bona Fide Offer.

                           (2) Upon the giving of such Option Notice, the
         Company shall have an option (transferable, in the sole discretion of
         the Board of Directors of the Company, to GEI or to a subsidiary) to
         purchase all of the Common Stock specified in the Option Notice, said
         option to be exercised within thirty (30) days after the giving of such
         Option Notice, by giving a counter-notice (the "Election Notice") to
         the Management Investor.

                           (3) If the Company (or GEI or a subsidiary, if
         applicable) elects to purchase all of such Common Stock, it shall be
         obligated to purchase, and the Management Investor shall be obligated
         to sell, such Common Stock at the cash price and terms indicated in the
         Bona Fide Offer, except that the closing of the purchase by the Company
         (or GEI or a subsidiary, if applicable) shall be held on a business day
         within sixty (60) days after the giving of the Election Notice at 10:30
         a.m., Central Standard Time, at the principal executive office of the
         Company, or at such other time and place as may be mutually agreed to
         by the Company (or GEI or a subsidiary) and the Management Investor.

                           (4) If an Election Notice is not delivered by the
         Company (or GEI or a subsidiary, if applicable) within the period
         specified above, the Management Investor thereafter, at any time within
         a period of sixty (60) days from the giving of said Option Notice, may
         transfer all of the provisions of this Agreement and, as a condition
         precedent to the completion of such transfer of Common Stock to such
         Outside Party, shall execute and deliver to the Company a written
         consent to such effect in form and substance satisfactory to the
         Company; provided, however, that in the event the Management Investor
         has not so transferred said Common Stock to the Outside Party within
         said three-month period, then said Common Stock thereafter shall
         continue to be subject to all of the restrictions contained in this
         Agreement.

                  (b) No Waiver by Company. Any election in any instance by the
Company (or GEI or a subsidiary, if applicable) not to exercise its rights of
first refusal under this Section 3 shall not constitute a waiver of such rights
with respect to any other proposed transfer of Common Stock.

                  (c) Transfer to Related Transferees. Notwithstanding anything
to the contrary contained in clauses (a) through (c) of this Section 3, the
Management Investor may transfer the Management Investor's Common Stock without
restriction to the Management Investor's Related Transferees (as defined below)
provided that each such Related Transferee shall first (i) execute a written
consent in form and substance satisfactory to the Company to be

                                       5
<PAGE>   6

bound by all of the provisions of this Agreement and (ii) give a duplicate
original of such consent to the Company. The "Related Transferee" of the
Management Investor shall consist of the Management Investor's spouse, the
Management Investor's adult lineal descendants, the adult spouses of such lineal
descendants, trusts solely for the benefit of the Management Investor's spouse
or the Management Investor's minor or adult lineal descendants and, in the event
of death, the Management Investor's personal representatives (in their
capacities as such), estate and named beneficiaries. In the event of any
transfer by the Management Investor to his Related Transferees of all or any
part of the Management Investor's Common Stock (or in the event of any
subsequent transfer by any such Related Transferee to another Related Transferee
of the Management Investor), such Related Transferees shall receive and hold
said Common Stock subject to the terms of this Agreement and the rights and
obligations hereunder of the Management Investor from whom such Common Stock was
originally transferred as though said Common Stock was still owned by the
Management Investor, and such Related Transferees shall be deemed Management
Investors for the purposes of this Agreement (except as stated in Sections 13(b)
and (c) hereof). There shall be no further transfer of such Common Stock by a
Related Transferee except between and among such Related Transferee, the
Management Investor to whom such Related Transferee is related and the other
Related Transferees of the Management Investor, or except as permitted by this
Agreement.

         4.       Company "Call" Option.

                  (a) Upon the termination of the Management Investor's
employment or cessation of services as director with the Company or any of its
subsidiaries for any reason (including without limitation Voluntary Termination,
a Just Cause Dismissal, Involuntary Termination Without Cause or the Retirement,
death or Permanent Disability of the Management Investor (as such terms are
defined in Section 5 below)) (a "Call Purchase Event"), subject to the
provisions of Section 6 and this Section 4, the Company may, at its option
exercisable by written notice (a "Purchase Notice") delivered to the Management
Investor (or in the case of a deceased Management Investor, the Management
Investor's personal representative) within ninety (90) days after the applicable
Call Purchase Event (or, in the event the applicable Call Purchase Event is the
death of the Management Investor, within thirty (30) days after the appointment
and qualification of the deceased Management Investor's personal representative,
if later), elect to purchase and, upon the giving of such notice, the Company
shall be obligated to purchase and the Management Investor (and the Related
Transferees, if any, of the Management Investor or, in the case of a deceased
Management Investor, his personal representative) (the "Seller" shall be
obligated to sell, all, or any lesser portion indicated in the Purchase Notice,
of the Common Stock held by the Management Investor (and his Related
Transferees, if any) at a per share price equal to:

                           (1) in the case of Voluntary Termination or a Just
         Cause Dismissal, the lower of the Purchase Price or the Fair Market
         Value (as such term is defined in Section 5 below); or

                                       6
<PAGE>   7

                           (2) in the case of any other termination (including
         without limitation Involuntary Termination Without Cause, death,
         Retirement or Permanent Disability), the Fair Market Value.

                  (b) If the Company does not elect to exercise its option set
forth in paragraph (a) of this Section 4, the Company shall give written notice
that it is not so electing to GEI within the time periods specified in paragraph
(a) of this Section 4 for the giving of the Purchase Notice. Upon receipt of
such notice from the Company, GEI shall have the option, exercisable by written
notice (a "GEI Purchase Notice") delivered to the Management Investor (or, in
the case of a deceased Management Investor, the Management Investor's personal
representative) within fifteen (15) days after receipt of such notice from the
Company, to purchase from the Seller (and, upon the giving of the GEI Purchase
Notice, GEI shall be obligated to purchase and the Seller shall be obligated to
sell) all, or any lesser portion indicated in the GEI Purchase Notice, of the
Common Stock held by the Seller at the per share price set forth in paragraph
(a) of this Section 4.

                  (c) In the event a purchase of shares of Common Stock pursuant
to this Section 4 shall be prohibited by law or would cause a default under the
terms of any indenture or loan agreement or other instrument to which the
Company or any of its subsidiaries may be a party, the obligations of the Seller
and the Company pursuant to this Section 4 shall be suspended and no such
default would be caused; provided, however, that (x) the purchase price to be
paid by the Company for the shares shall accrue interest at the lowest rate
necessary to prevent the imputation of interest or original issue discount under
the Internal Revenue Code of 1986, as amended, reduced by any dividends or
distributions on such Common Stock during the period of such suspension, which
interest shall likewise be paid when such prohibition first lapses or is waived
and no such default would be caused and (y) in the event of any such suspension,
if GEI so elects and no violation of law would be caused and no default under
the terms of any indenture or loan agreement or other instrument to which the
Company or any of its subsidiaries may be a party would result, the Company
shall transfer its obligations under this Section 4 to GEI or to a subsidiary,
in which case GEI or the subsidiary (as the case may be) and the Management
Investor (and the Related Transferees, if any, of the Management Investor) shall
be obligated to complete the purchase of shares of Common Stock pursuant to this
Section 4.

         5.       Purchase Price, Closing and Terms of Payment for "Call" Sales.

                  (a) For purposes of this Agreement, the "Fair Market Value" of
each share of Common Stock shall be determined as of the time of the Call
Purchase Event by the Board of Directors of the Company in the exercise of its
reasonable discretion; provided, however, that such determination shall be based
upon the Company as a going concern and shall not discount the value of such
shares either because they are subject to the restrictions set forth in this
Agreement or because they constitute only a minority interest in the Company.
Upon delivery of notice of such Fair Market Value to the Seller of Common Stock
pursuant to Section 4 (which shall indicate, in a general fashion, the factors
considered by the Board of Directors in determining such amount), such Seller
shall have ten (10) business days in which

                                       7
<PAGE>   8

to notify the Company in writing of any disagreement. If no written notice of
disagreement is given, the Fair Market Value as determined by the Board of
Directors of the Company shall be conclusive. If written notice is given of a
disagreement, the Company and such Seller shall mutually agree upon an
independent appraiser experienced in making valuations of such sort which shall
make a determination of the Fair Market Value. Such determination shall be
final, binding and nonappealable upon the Company and such Seller. The costs and
expenses incurred in connection with the determination made by the independent
appraiser shall be borne equally by the Company and by the Seller.

                  (b) For purposes of this Agreement, the Management Investor
shall be deemed to be "Permanently Disabled" if the Management Investor becomes
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. The Company, at its option and expense, shall
be entitled to retain a physician to confirm the existence of such incapacity or
disability and the determination of such physician shall be binding upon the
Company and the Management Investor; provided, however, that if the Management
Investor disagrees with such determination of Permanent Disability within
fifteen (15) days of being notified of it, the Management Investor and the
Company shall jointly agree upon an independent physician (or, if they are
unable to agree upon such physician, they shall each select a physician and
those two physicians shall select the independent physician) who shall make the
determination, whose decision shall be binding upon the Company and the
Management Investor.

                  (c) For the purposes of this Agreement, the Management
Investor shall be deemed to be "Involuntarily Terminated Without Cause" upon the
later of the termination of the Management Investor's employment by, or removal
or failure to be reelected as a director of, the Company or any of its
subsidiaries, unless such termination, removal or failure to be reelected is due
to Retirement, death, Permanent Disability or a Just Cause Dismissal.
"Retirement" shall mean retirement in accordance with the retirement policies or
practices of the Company or its subsidiaries applicable to executives or
directors, as the case may be, but in no event at an age of less than seventy
(70). "Voluntary Termination" shall mean the termination by the Management
Investor of his employment with, or his resignation or refusal to stand for
reelection as a director of, the Company or any of its subsidiaries, for any
reason other than death, Permanent Disability, or Retirement. A "Just Cause
Dismissal" shall mean termination of the Management Investor's employment with,
or service as a director of, the Company or any of its subsidiaries as a result
of any of the following (each, a "Cause"):

                           (1) the Management Investor commits any act of fraud,
         intentional misrepresentation or serious misconduct in connection with
         the business of the Company or its subsidiaries, including but not
         limited to, falsifying any documents or agreements (regardless of
         form); or

                           (2) the Management Investor materially violates any
         rule or policy of the Company or its subsidiaries (A) for which
         violation an employee may be terminated pursuant to the written
         policies of the Company or its subsidiaries reasonably applicable

                                       8
<PAGE>   9

         to an executive employee, or (B) which violation results in material
         damage to the Company or its subsidiaries, or (C) which, after written
         notice to do so, the Management Investor fails to correct within a
         reasonable time; or

                           (3) the Management Investor willfully breaches or
         habitually neglects any material aspect of the Management Investor's
         duties (A) as described in the Management Investor's employment
         contract, or (B) in the ordinary course of the Management Investor's
         employment or service as a director, or (C) assigned to the Management
         Investor by the Company or its subsidiaries, which assignment was
         reasonable in light of the Management Investor's position with the
         Company or its subsidiaries (all of the foregoing duties, "Duties"); or

                           (4) the Management Investor fails, after written
         notice, adequately to perform any Duties and such failure is reasonably
         likely to have an adverse impact upon the Company, its subsidiaries or
         the operations of any of them; or

                           (5) the Management Investor materially fails to
         comply with a direction from the Board of Directors of the Company or
         its subsidiaries with respect to a material matter, which direction was
         reasonable in light of the Management Investor's position with the
         Company or its subsidiaries; or

                           (6) while employed by the Company or its
         subsidiaries, and without the written approval of the Chief Executive
         Officer of the Company (or, in case the Management Investor is such
         Chief Executive Officer, approval of the Company's Board of Directors),
         the Management Investor performs services for any other corporation or
         person which competes with the Company or its subsidiaries; or

                           (7) the Management Investor is convicted by a
         court of competent jurisdiction of a felony (other than a traffic or
         moving violation) or any crime involving dishonesty; or

                           (8) any other action or condition that may result in
         termination of an employee for cause pursuant to any generally applied
         standard, of which standard the Management Investor knew or reasonably
         should have known, adopted in good faith by the Board of Directors of
         the Company or its subsidiaries from time to time but prior to such
         action or condition; or

                           (9) any willful breach by the Management Investor of
         his or her fiduciary duties as a director of the Company or any of its
         subsidiaries.

In the event that there is a dispute between the Management Investor and the
Company as to whether "Cause" for termination exists: (x) such termination shall
nonetheless be effective, (y) such dispute shall be subject to arbitration
pursuant to Section 13(f) hereof and (z) the payments or deliveries, if any, to
be made by the Company or GEI or any subsidiary in connection with a sale or
purchase of the Common Stock held by the Management Investor

                                       9

<PAGE>   10

pursuant to Section 4 shall be delayed until the final resolution of such
dispute in such arbitration.

                  (b) The closing for all purchases and sales of Common Stock
provided for in Section 4 hereof shall be at the principal executive offices of
the Company at 10:30 a.m., Central Standard Time, on the later of (A) the
sixtieth day after the giving of the applicable Purchase Notice or GEI Purchase
Notice and (B) the thirtieth day after the final determination of the Fair
Market Value of the Common Stock as set forth above; provided, however, that if
the Management Investor (or a Related Transferee) who has become obligated to
sell shares of Common Stock hereunder is deceased on the closing date and such
deceased person's personal representative shall not have been appointed and
qualified by such date, then the closing shall be postponed until the tenth day
after the appointment and qualification of such personal representative. If the
aforesaid closing date falls on a day which is not a business day, then the
closing shall be held on the next succeeding business day.

                  (c) The purchase price for the purchase and sale of Common
Stock pursuant to the provisions hereof shall be paid in cash, by certified or
by official bank check.

                  (d) The Seller or Sellers of shares of Common Stock sold
pursuant to Section 4 hereof, if such shares are represented by one or more
certificates issued by the Company, shall cause such certificated shares to be
delivered to the Company at the closing free and clear of all liens, charges or
encumbrances of any kind. Such Seller or Sellers shall take all actions as the
Company shall request as necessary to vest in the Company at such closing all
shares sold pursuant to Section 4 hereof, whether in certificated or
uncertificated form, free and clear of all liens, charges and encumbrances
incurred, voluntarily or involuntarily, by or through Seller. At each closing
pursuant to Section 4, the Company shall deliver to the Seller reasonable
assurances to the effect that the Company's or a subsidiary's purchase of shares
thereat has been duly and validly authorized and complies with applicable state
securities laws.

         6.       Termination and Lapse of Rights and Restrictions; Application
to Other Stock.

                  (a) The provisions of Sections 1(b) (ii), 3(a), 3(b), 4, 8 and
9 of this Agreement shall lapse and be of no further effect with respect to
shares of Common Stock upon the commencement of the public trading of the
Company's Common Stock (or any capital stock exchanged for or distributed upon
such Common Stock as described in paragraph (b) of this Section 6) on any
national securities exchange, on the NASDAQ National Market System or on the
NASDAQ "Small Cap" Issues System.

                  (b) In the event any capital stock of the Company or any other
corporation shall be distributed on, with respect to, or in exchange for shares
of Common Stock of the Company as a stock dividend, stock split, spin-off,
reclassification or recapitalization in connection with any merger or
reorganization, the restrictions, rights and options set forth in Sections 3, 4,
8 and 9 shall apply with respect to such other capital stock to the same extent
as

                                       10

<PAGE>   11

they are, or would have been applicable, to the Common Stock acquired hereunder
on, or with respect to, which such other capital stock was distributed.

         7.       Piggyback Registration Rights.

                  (a) As used in this Agreement, the term "Holder" means the
Management Investor, a Related Transferee of the Management Investor or an
Outside Party.

                  (b) Subject to the provisions herein, if the Company at any
time proposes to include all or any part of GEI's Common Stock in a public
offering of Common Stock registered under the Act (other than registration (x)
on Forms S-4 or S-8 or any successor forms thereto or (y) filed in connection
with an exchange offer), the Company shall give written notice of the proposed
registration to each Holder at least thirty (30) days prior to the filing
thereof, and each Holder shall have the right to request that all or any part of
its shares of Common Stock be included in such registration by giving written
notice to the Company within fifteen (15) days after the giving of such notice
by the Company (any Holder giving the Company a notice requesting that shares of
Common Stock owned by it be included in such proposed registration being
hereinafter referred to in this Section 7 as a "Registering Holder"); provided,
however, that (i) if the registration is in whole or in part an underwritten
primary registration on behalf of the Company and the managing underwriters of
such offering determine that the aggregate amount of securities of the Company
which all Registering Holders and all other security holders of the Company,
pursuant to contractual rights to participate in such registration ("Other
Holder"), propose to include in such registration statement exceeds the maximum
amount of securities that should be included therein, the Company will include
in such registration, first, the shares which the Company proposes to sell and,
second, the shares of such Registering Holders and other securities to be sold
for the account of Other Holders, pro rata among all such Registering Holders
and Other Holders, taken together, on the basis of the relative equity interests
in the Company of all Registering Holders and Other Holders who have requested
that securities owned by them be so included (it being agreed and understood,
however, that such underwriters shall have the right to eliminate entirely the
participation in such registration of all Registering Holders and Other
Holders), and (ii) if the registration is an underwritten secondary registration
on behalf of any of the Other Holders pursuant to demand registration rights
(other than such right of GEI or its Affiliates (defined below)) and the
managing underwriters determine that the aggregate amount of securities which
all Registering Holders and all Other Holders propose to include in such
registration exceeds the maximum amount of securities that should be included
therein, the Company will include in such registration, first, the securities to
be sold for the account of the Other Holders demanding registration (but only to
the extent such Other Holders are entitled to demand inclusion thereof) second,
any securities to be sold for the account of the Company, and, third, the shares
of such Registering Holders and other securities to be sold for the account of
the Other Holders electing to include (but not being entitled to demand
inclusion of) securities in such registration, pro rata among all such
Registering Holders and Other Holders, taken together, on the basis of relative
equity interests in the Company of all Registering Holders and such Other
Holders who have requested that securities owned by them be included (it being
agreed and understood, however, that such underwriters shall have the right to
eliminate entirely the participation therein of all

                                       11

<PAGE>   12

such Registering Holders and Other Holders not entitled to demand inclusion of
securities in such registration). Shares of Common Stock proposed to be
registered and sold for the account of any Registering Holder shall be sold to
prospective underwriters selected or approved by the Company on the terms and
subject to the conditions of one or more underwriting agreements negotiated
between the Company and/or Other Holders demanding registration and the
prospective underwriters. For the purposes hereof, an "Affiliate" of any person
or entity means any other person or entity controlling, controlled by or under
common control with such person or entity; provided, however, that none of the
Management Stockholders (defined below) or any of their Affiliates shall be
deemed to be an Affiliate of GEI. "Management Stockholders" means, collectively,
all holders of capital stock or other securities issued by the Company who are
also employees of the Company or its subsidiaries.

         In the event the Company proposes to register any of its Common Stock
under the Act on Form S-8 (or any successor thereto), if the Company determines
that it is permissible to do so and will not result in material added costs to
the Company from such registration, the Company shall, at a Registering Holder's
request, include in such registration a portion of such Registering Holder's
shares of Common Stock equal to the portion, if any, of GEI's shares of Common
Stock held as of the date of this Agreement sold by GEI in private transactions
from the date hereof to the date of such request.

         The Registering Holders shall be permitted to withdraw all or a part of
the shares of Common Stock held by such Registering Holders which were to be
included in such registration at any time prior to the effective date of such
registration. The Company shall not be required to maintain the effectiveness of
the registration statement for such registration beyond the earlier to occur of
120 days after the effective date thereof or consummation of the distribution by
the Registering Holders included in such registration statement. The Company may
withdraw any registration statement at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Holder.

                  (c) The registration rights sets forth in this Section 7 shall
terminate and be of no further effect with respect to the Common Stock held by a
Holder: (i) at such time as the Company has filed, and there has become
effective, one registration statement in which all Registering Holders have been
afforded the opportunity to include all shares of such class of securities held
by them or (ii) if earlier, after an initial public offering, all shares of
Common Stock acquired hereunder and held by the Management Investor are eligible
for sale pursuant to the provisions of Rule 144 under the Act.

                  (d) In connection with any registration of shares under the
Act pursuant to this Section 7, the Company will furnish each Holder whose
shares of Common Stock are registered thereunder with a copy of the registration
statement and all amendments thereto and will supply each such Holder with
copies of any prospectus included therein (including a preliminary prospectus
and all amendments and supplements thereto), in such quantities as may be
reasonably necessary for the purpose of the proposed sale or distribution
covered by such registration. The Company shall not, however, be required to
maintain the registration statement and to supply copies of a prospectus for a
period beyond 120 days after the effective

                                       12
<PAGE>   13

date of such registration statement, at the end of such period, the Company may
deregister any shares of Common Stock covered by such registration statement and
not then sold or distributed. In connection with any such registration of shares
of Common Stock, the Company will, at the request of the managing underwriter
with respect thereto, use its best efforts to qualify such registered shares for
sale under the securities laws of such state as is reasonably required to permit
the distribution of such registered shares; provided, however, that the Company
shall not be required in connection therewith or as condition thereof to qualify
as a foreign corporation or to execute a general consent to service of process
in any jurisdiction or become subject to taxation in any jurisdiction.

                  (e) Notwithstanding any other provision of this Section 7,
Holder agrees that in the event of an underwritten public offering of Common
Stock for the account of the Company, such Holder will not offer for public sale
(other than as part of such underwritten public offering) any shares of Common
Stock during the ten (10) days prior to, and such number of days (not in excess
of 180) after, the effective date of the registration statement in connection
with such public offering as the underwriters and the Company may request in
writing, without the consent of the underwriters; provided, however, that, in
the case of death of a Holder, if consented to by the underwriters, a Holder
shall be permitted to offer for public sale prior to the expiration of such
period shares of Common Stock reasonably necessary to generate funds of the
payment of estate taxes.

                  (f) Except as otherwise required by state securities laws or
the rules and regulations promulgated thereunder, all expenses, disbursements
and fees incurred by the Company in connection with carrying out its obligations
under this Section 7 shall be borne by the Company; provided, however, that each
Holder shall pay (i) all costs and expenses of counsel for such Holder, if such
counsel is not also counsel for the Company, (ii) all underwriting discounts,
commissions and expenses and all transfer taxes with respect to the shares of
Common Stock sold by such Holder and (iii) all other expenses incurred by such
Holder and incidental to the sale and delivery of the shares of Common Stock to
be sold by such Holder.

                  (g) It shall be a condition of each Holder's rights hereunder
to have shares of Common Stock owned by such Holder registered that:

                           (1) such Holder shall cooperate with the Company by
         supplying information and executing documents relating to such Holder
         or the securities of the Company owned by such Holder in connection
         with such registration;

                           (2) such Holder shall enter into any undertakings and
         take such other action relating to the conduct of the proposed offering
         which the Company or the underwriters may reasonably request as being
         necessary to insure compliance with federal and state securities laws
         and the rules or other requirements of the National Association of
         Securities Dealers, Inc. or which the Company or the underwriters may
         reasonably request to otherwise effectuate the offering; and

                                       13
<PAGE>   14

                           (3) such Holder shall execute and deliver an
         agreement to indemnify and hold harmless the Company, each of its
         directors, each of its officers who has signed the registration
         statement, any underwriter (as defined in the Act) and each person, if
         any who controls the Company or such underwriter within the meaning of
         the Act, against such losses, claims, damages or liabilities (including
         reimbursement for legal and other expenses) to which the Company or any
         such director, officer, underwriter or controlling person may become
         subject under the Act or otherwise, in such manner as is customary for
         registration of the type then proposed and, in any event, equivalent in
         scope to indemnities given by the Company in connection with such
         registration, but only with respect to written information furnished by
         such Holder in his or her capacity as a selling shareholder in
         connection with such registration.

                  (h) In the event of any registration under the Act of any
shares of Common Stock pursuant to this Section 7, the Company hereby agrees to
indemnify and hold harmless each Holder disposing of such shares against such
losses, claims, damages or liabilities (including reimbursement for legal and
other expenses) to which such Holder may become subject under the Act or
otherwise, in such manner as is customary for registrations of the type then
proposed, but not with respect to written information furnished by such Holder
in his capacity as a selling shareholder in connection with such registration.

         8.       Tag-Along Rights.

                  (a) Right to Participate in Sale. If GEI enters into an
agreement to transfer, sell or otherwise dispose of (such transfer, sale or
other disposition being referred to as a "Tag-Along Sale") a majority of its
shares of Common Stock of the Company held on the date hereof, then GEI shall
afford the Holder the opportunity to participate proportionately in such
Tag-Along Sale in accordance with this Section 8. The Holder shall have the
right, but not the obligation (except as provided in Section 9), to participate
in such Tag-Along Sale. The number of shares of Common Stock that the Holder
will be entitled to include in such Tag-Along Sale (the "Management Investor's
Allotment") shall be determined by multiplying (i) the number of shares of
Common Stock held by the Holder on the Tag-Along Sale Date (as defined below),
by (ii) a fraction, the numerator or which shall equal the number of shares of
Common Stock proposed by GEI to be sold or otherwise disposed of pursuant to the
Tag-Along Sale and the denominator of which shall equal the total number of
shares of Common Stock that are beneficially owned by (a) GEI and (b) any holder
of shares of Common Stock (including the Holder) that has the right to
"tag-along" in the Tag-Along Sale on the Tag-Along Sale Date. The "Tag Along
Notice Date" shall be the date that the Tag-Along Sale Notice (as defined below)
is first delivered, mailed or sent by courier, Telex or telecopy to the Holder.

                  (b) Limitation on Management Investor Representations;
Indemnity. Any sales of shares of Common Stock by a Holder as a result of the
"Tag-Along Rights" granted to the Holder pursuant to this agreement shall be on
the same terms and conditions as the proposed Tag-Along Sale by GEI; provided,
however, that in negotiating a Tag-Along Sale, GEI shall use its reasonable,
good faith efforts to provide (i) that the only representation and warranty
which the Holder shall be required to make in connection with any transfer is a
warranty with

                                       14
<PAGE>   15

respect to the Holder's own ability to convey title thereto free and clear of
liens, encumbrances or adverse claims and (ii) that the warranty made in
connection with any transfer is the several liability of the Holder (and not
joint with any other person) and that such liability is limited to the amount of
proceeds actually received by such Holder.

                  (c) Sale Notice. GEI shall provide the Holder with written
notice (the Tag-Along Sale Notice") not more than sixty (60) nor less than
twenty (20) days prior to the proposed date of the Tag-Along Sale (the
"Tag-Along Sale Date"). Each Tag-Along Sale Notice shall set forth: (i) the name
and address of each proposed transferee or purchaser of shares in the Tag-Along
Sale; (ii) the number of shares proposed to be transferred or sold by GEI; (iii)
the proposed amount and form of consideration to be paid for such shares and the
terms and conditions of payment offered by each proposed transferee or
purchaser; (iv) the aggregate number of shares of Common Stock held of record as
of the close of business on the day immediately preceding the Tag-Along Notice
Date by GEI; (v) the Management Investor's Allotment assuming the Holder elected
to sell the maximum number of shares of Common Stock possible; (vi) confirmation
that the proposed purchaser or transferee has been informed of the "Tag-Along
Rights" provided for herein and has agreed to purchase shares of Common Stock
(including Vested Shares) in accordance with the terms hereof and (vii) the
Tag-Along Sale Date.

                  (d) Tag-Along Notice. If the Holder wishes to participate in
the Tag-Along Sale, the Holder shall provide written notice (the "Tag-Along
Notice") to GEI no less than ten (10) days prior to the Tag-Along Sale Date. The
Tag-Along Notice shall set forth the number of shares of Common Stock that such
Holder elects to include in the Tag-Along Sale, which shall not exceed the
Management Investor's Allotment. The Tag-Along Notice shall also specify the
aggregate number of additional shares of Common Stock owned of record as of the
close of business on the day immediately preceding the Tag-Along Notice Date by
such Holder, if any, which such Holder desires also to include in the Tag-Along
Sale ("Additional Shares") in the event there is any undersubscription for the
entire amount of all Management Investors' Allotments of all shares that may be
included by persons having, and pursuant to, tag-along rights relative to GEI
(collectively, the "Management Investors' Allotments"). In the event there is an
under-subscription by all holders of Management Investors' Allotments for the
entire amount of the Management Investors' Allotments, GEI shall apportion the
unsubscribed Management Investors' Allotments to such holders whose tag-along
apportionment shall be on a pro rata basis among such holders in accordance with
the number of Additional Shares specified by all such holders in their Tag-Along
Notice. The Tag-Along Notices given by the Holder shall constitute the Holder's
binding agreement to sell such shares of Common Stock on the terms and
conditions applicable to the Tag-Along Sale, subject to the provisions of
Section 8(b) above; provided, however, that in the event that there is any
material change in the terms and conditions of such Tag-Along Sale applicable to
the Holder after the Holder gives the Tag-Along Notice, then, notwithstanding
anything herein to the contrary, the Holder shall have the right to withdraw
from participation in the Tag-Along Sale with respect to all of its shares of
Common Stock affected thereby. If the purchaser does not consummate the purchase
of all of such shares on the same terms and conditions applicable to GEI (except
as otherwise provided herein) then GEI shall not consummate the Tag-Along Sale
of any of its shares to such

                                    15

<PAGE>   16

transferee or purchaser, unless the shares of the Holder and GEI are reduced or
limited pro rata in proportion to the respective number of shares actually sold
in any such Tag-Along Sale.

         If a Tag-Along Notice is not received by GEI from the Holder prior to
the ten-day period specified above, GEI shall have the right to sell or
otherwise transfer the number of shares specified in the Tag-Along Notice to the
proposed purchaser or transferee without any participation by such Holder, but
only on terms and conditions which are no more favorable in any material respect
to GEI than as stated in the Tag-Along Notice to the Holder and only if such
Tag-Along Sale occurs on a date within sixty (60) business days of the Tag-Along
Sale Date.

                  (e) Authority to Record Transfer/Delivery of Certificates. On
the Tag-Along Sale Date, the Holder, if a participant therein, authorizes the
Company (or the Company's transfer agent, if any) to record in the Company's
books and records the transfer of all of the Holder's shares of Common Stock
which are not represented by one or more certificates issued by the Company,
from the Holder to the purchaser in the Tag-Along Sale. On the Tag-Along Sale
Date, the Holder, if a participant therein, shall also deliver all certificates,
if any, issued by the Company which represent shares of the Company's Common
Stock, duly endorsed for transfer with signatures guaranteed, to the purchaser
in the Tag-Along Sale, in the manner and at the address indicated in the
Tag-Along Notice against delivery of the purchase price for such shares;
provided, however, that in the event the Company has possession of any such
certificate(s) pursuant to this Agreement, upon the written request of the
Holder at least five (5) business days in advance of the Tag-Along Sale Date,
the Company shall deliver such certificate(s) to the purchaser at the time and
in the manner described above.

                  (f) Exempt Transfers. The provisions of this Section 8 shall
not apply to (i) any bona fide underwritten offering of Common Stock pursuant to
an effective registration statement under the Act or any bona fide public
distribution of Common Stock pursuant to Rule 144 thereunder, provided that any
such sale complies with the provisions of this Agreement; (ii) any transfer,
sale or other disposition by GEI to one of its Affiliates (except that (A) prior
to any such disposition, the party receiving such shares of Common Stock shall
agree in writing to be bound by the terms of this Agreement applicable to GEI as
if such transferee were an original party hereto and (B) any such shares of
Common Stock shall continue to be subject to this Agreement); (iii) any
redemption by the Company of its Common Stock or (iv) any GEI Distribution (as
defined in Section 14).

         9.       Drag-Along Sales.

                  (a) Right to Require Sale. Notwithstanding any other provision
hereof, if GEI agrees to sell 100% of the shares of Common Stock held by it to a
third person who is not an affiliate of GEI (a "Third Party") or if GEI agrees
to sell a portion of its shares pursuant to a transaction in which more than 50%
of the total Common Stock of the Company will be sold to a Third Party (either
of such sales, a "Drag-Along Sale"), then, upon the demand of GEI, each Holder
hereby agrees to sell to such Third Party the same percentage of the total
number of shares of Common Stock held by such Holder on the date of the
Drag-Along Notice, as the

                                       16
<PAGE>   17

number of shares GEI is selling in the Drag-Along Sales bears to the total
number of shares held be GEI as of the date of the Drag-Along Notice (the "Sale
Percentage"), at the same price and on the same terms and conditions as GEI has
agreed to with such Third Party; provided, however, that GEI shall use its
reasonable, good faith efforts to provide that (i) the only representation and
warranty which the Holder shall be required to make in connection with the
Drag-Along Sale is a representation and warranty with respect to the Holder's
own ownership of the shares of Common Stock to be sold by it and its ability to
convey title thereto free and clear of liens, encumbrances or adverse claims and
(ii) that the liability of any other Holder with respect to any representation
and warranty made in connection with the Drag-Along Sale is the several
liability of such other Holder (and not joint with any other person) and that
such liability is limited to the amount of proceeds actually received by such
other Holder in the Drag-Along Sale; provided further, that the Holder shall not
be obligated to participate in any Drag-Along Sale unless the Holder is provided
an opinion of counsel to the effect that the Drag-Along Sale is not in violation
of applicable federal or state securities or other laws or, if the Holder is not
provided with an opinion with respect to any matters contemplated by this
proviso, GEI shall (in addition to the indemnification contemplated below)
indemnify the Holder for any violation. If the Drag-Along Sale is in the form of
a merger transaction, the Holder agrees to vote his or her shares of Common
Stock in favor of such merger and not to exercise any rights of appraisal or
dissent afforded under applicable law.

                  (b) Drag-Along Notice. Prior to making any Drag-Along Sale, if
GEI elects to exercise the option described in this Section 9, GEI shall provide
the Holder with written notice (the "Drag-Along Notice") not more than sixty
(60) nor less than twenty (20) days prior to the proposed date of the Drag-Along
Sale (the "Drag-Along Sale Date"). The Drag-Along Notice shall set forth: (i)
the name and address of the Third Party; (ii) the proposed amount and form of
consideration to be paid per share and the terms and conditions of payment
offered by the Third Party; (iii) the aggregate number of shares of Common Stock
held by GEI as of the date that the Drag-Along Notice is first delivered, mailed
or sent by courier, telex or telecopy to the Holder; (iv) the sale percentage;
(v) the Drag-Along Sale Date and (vi) confirmation that the proposed Third Party
has agreed to purchase the Management Investor's shares of Common Stock in
accordance with the terms hereof.

                  (c) Authority to Record Transfer/Delivery of Certificates. The
Company (or the Company's transfer agent, if any) shall record in the Company's
books and records the transfer of the Sale Percentage of the Holder's shares of
Common Stock which is not represented by one or more certificates issued by the
Company, from the Holder to the Third Party, on the Drag-Along Sale Date. If any
part of the Sale Percentage of the Holder's shares of Common Stock is
represented by one or more certificates issued by the Company, the Holder shall
deliver such certificate or certificates for such shares, duly endorsed for
transfer with signatures guaranteed, to such Third Party on the Drag-Along Sale
Date in the manner and at the address indicated in the Drag-Along Notice against
delivery of the purchase price for the shares; provided, however, that in the
event the Company has possession of any such certificate(s) pursuant to this
Agreement, upon the written request of the Holder at least five (5) business
days in advance of the Drag-Along Sale Date, the Company shall deliver such
certificate(s) to the purchaser at the time and in the manner described above.

                                       17
<PAGE>   18

                  (d) Consideration. The provisions of this Section 9 shall
apply regardless of the form of consideration received in the Drag-Along Sale.

         10.      Noncompetition.

                  (a) Management Investor covenants and agrees that Management
Investor will not, during the period of his employment with the Company or any
of the Company's subsidiaries, and for a period of three (3) years after the
termination of such employment, without the prior written consent of the
Company, individually or in partnership or in conjunction with or as an
employee, officer, director, manager or agent of any other person, firm,
corporation or other entity, either directly or indirectly, undertake or carry
on or be engaged or have any financial or other interest in, or in any other
manner advise or assist any person, firm, corporation or other entity engaged or
interested in, any newspaper publishing business or any other business involving
the printing or publication of any newspaper, flyer, shopper, circular or other
publication carrying advertising, or any other business involving the
solicitation of local advertising, or any advertising agency business, or any
job printing business, carried on in any community or communities described in
Annex B attached hereto or within a radius of fifty (50) miles of the center
point of any such community.

                  (b) Management Investor further covenants and agrees to
refrain, for a period of three (3) years following the termination of Management
Investor's employment by or on behalf of the Company or any of the Company's
subsidiaries, for whatever reason, from (i) selling, or attempting to sell, any
advertising which is or is intended to be distributed or disseminated within any
community or communities listed in Annex C hereto or within a fifty (50) mile
radius of the center point of any such community to any person, firm,
corporation or other entity which, at the termination of such employment, was a
purchaser of advertising from one or more of the newspapers or other
publications of the Company or any of the Company's subsidiaries; (ii) inducing,
or attempting to induce, any person, firm or corporation to cease, discontinue
or fail to renew any advertising contract, agreement or arrangement with one or
more of the newspapers or other publications of the Company or any of the
Company's subsidiaries; and (iii) soliciting, employing, diverting or taking
away, or attempting to solicit, employ, divert or take away, any person who, at
the time of such termination or at any time during the six (6) month period
prior to such termination, was employed by or on behalf of the Company or any of
the Company's subsidiaries.

                  (c) Management Investor further agrees and warrants that the
covenants contained in this Section 10 are reasonable, that valid consideration
has been and will be received therefor and that the agreements set forth herein
are the result of arm's length negotiation between the parties hereto.
Management Investor believes that he will be able to earn an adequate livelihood
for himself and his dependents if the covenants contained in this Section 10 are
enforced against him.

                  (d) If any of the provisions of or covenants contained in this
Section 10 is hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which

                                       18

<PAGE>   19

shall be given full force and effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions of or
covenants contained in this Section 10 is held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the parties
agree (i) that the court making such determination shall have the power to
reduce the duration and/or geographical scope of such provision or covenant and,
in its reduced form, said provision or covenant shall be enforceable, provided,
however, that the determination of such court shall not affect the
enforceability of this Section 10 in any other jurisdiction, and (ii) that if
the court making such determination shall not have the power, or shall refuse to
exercise its power, to reduce the duration and/or geographical scope of such
provision or covenant, then the Management Investor shall, in further
consideration of stock sold pursuant to this Agreement, and without the
requirement of any further consideration, enter into a new Noncompetition
Agreement substantially in the form of this Section 10 but containing such
reduced duration and/or geographical scope as shall be determined by the
Company, in its sole discretion.

         11. 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 in Annex A or at such other place as the
Management Investor shall have designated by notice as herein provided to the
Company;

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

         12. 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 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.

                                       19

<PAGE>   20

         13.      Miscellaneous.

                  (a) Except as provided in the last sentence of this paragraph,
this writing 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, GEI and the Management Investor; provided,
however, that any of the provisions of this Agreement (except as hereinafter
provided) may be modified, amended or eliminated by agreement of the Company,
GEI and a majority in interest (on the basis of the number of shares of Common
Stock then owned by the Management Investor and/or his Related Transferees) of
all of the Management Investors and all holders of securities pursuant to
agreements in forms substantially similar to this Agreement, which agreement
shall bind the Management Investor whether or not the Management Investor has
agreed thereto; provided, further, that no modification or amendment which would
materially adversely affect the rights of the Management Investor under Sections
3, 4, 5, 6, 7, 8, 9, 10 or 13(a) of this Agreement shall be effective as to the
Management Investor if the Management Investor shall not have consented in
writing thereto. Anything in this Agreement to the contrary notwithstanding, any
modification or amendment of this Agreement by a written agreement signed by, or
binding upon, the Management Investor shall be valid and binding upon any and
all persons or entities who may, at any time, have or claim any rights under or
pursuant to this Agreement in respect of Common Stock acquired hereunder is
subject to, and the Company and the Management Investor agree to be bound by,
all of the terms and conditions of this Agreement.

                  (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) who may, at any time, have or claim any rights
under or pursuant to this Agreement in respect of the Common Stock acquired
hereunder.

                  (c) Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company, its
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 Common Stock acquired hereunder except in accordance
with this Agreement and any transferee shall hold such Common Stock having only
those rights and being subject to the restrictions provided for in this
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.

                                       20
<PAGE>   21

                  (e) The provisions of this Agreement shall apply to all shares
of Common Stock acquired hereunder by the Management Investor (including the
Management Investor's Related Transferees and any Outside Parties).

                  (f) Except as set forth in Section 12, arbitration shall be
the exclusive remedy for resolving any dispute or controversy between the
Company, any of its subsidiaries or GEI and any Management Investor, personal
representative of an Management Investor, Related Transferee, Holder or Outside
Party. 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
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.

                  (g) 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.

                  (h) 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.

                  (i) Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by any other party in order to carry out the provisions and
purposes of this Agreement.

                  (j) The Management Investor represents that, if the Management
Investor is married, the Management Investor's spouse has signed the
Acknowledgment and Agreement of Spouse relating to the Management Investor at
the end of this Agreement.

                                       21
<PAGE>   22

                  (k) 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.

                  (l) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.

                  (m) 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.

                  (n) 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.

         14.      GEI Distributions Exempt.

                  It is expressly understood and agreed that GEI may distribute
to its partners or equity participants, in accordance with the terms of its
limited partnership agreement, all or any part of the shares of the Company's
capital stock or other Company securities held by it (any such distribution, a
"GEI Distribution"). Notwithstanding anything to the contrary contained in this
Agreement, any GEI distribution shall not constitute a "sale," "transfer" or
"disposition" for any purpose under this Agreement and shall be exempt in all
respects from the terms and conditions of this Agreement. As an example, and
without limiting the generality of the foregoing, it is expressly understood and
agreed that a GEI Distribution shall not constitute a Tag-Along Sale for the
purposes of Section 8 hereof. Further, it is also expressly understood and
agreed that, following a GEI Distribution (i) the shares of the Company's
capital stock or other Company securities distributed to the partners or equity
participants of GEI shall in no way be subject to this Agreement and (ii) any
partner or equity participant of GEI which receives shares of the Company's
capital stock or other Company securities pursuant to a GEI Distribution shall
not be required or deemed to become a party to this Agreement or otherwise be
subject to this Agreement.

         15.      Original Agreement.

         This Agreement amends and restates the Original Agreement in its
entirety.

                                       22
<PAGE>   23

         IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Management Stockholders Agreement as of the first date written above.

                                 LIBERTY GROUP PUBLISHING, INC.

                                 By: __________________________________________
                                 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: __________________________________________
                                 Name: ________________________________________

                                 Management Investor

                                 By: __________________________________________
                                 Name: Gene Hall

<PAGE>   24

                     Acknowledgment and Agreement of Spouse

         The undersigned, being the spouse of the Management Investor listed on
Annex A hereto, hereby agrees to be bound by the provisions of this Agreement.

                                 By: __________________________________________
                                 Name: ________________________________________

<PAGE>   25

                                     Annex A

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

      Name and Address                   Number of Initial Purchased Shares
    of Management Investor
-------------------------------------------------------------------------------

  Gene Hall                                             800
  2157 Pin Oak Estates Lane
  Charles City, IA 50616
-------------------------------------------------------------------------------

<PAGE>   26

                                     Annex B

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

      Name and Address                        Number of Grant Shares
    of Management Investor
-------------------------------------------------------------------------------

  Gene Hall                                            27.5
  2157 Pin Oak Estates Lane
  Charles City, IA 50616
-------------------------------------------------------------------------------

<PAGE>   27

                                     Annex C

Communities Subject to Noncompetition Provisions

      Charles City, IA
      Atchison, KS
      Leavenworth, KS
      Crookston, MN
      Camdenton, MO
      Rolla, MO
      St. James, MO
      Osage Beach, MO
      Waynesville, MO

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