EXHIBIT 2.4 ASSET PURCHASE AGREEMENT

EXHIBIT 2.4

ASSET PURCHASE AGREEMENT

by

and

among

LEE ENTERPRISES, INCORPORATED,

LEE PROCUREMENT SOLUTIONS CO.

and

TARGET MEDIA PARTNERS OPERATING COMPANY, LLC

Dated September 5, 2006

TABLE OF CONTENTS

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TABLE OF CONTENTS

(Continued)

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TABLE OF CONTENTS

(Continued)

EXHIBITS :

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of September 5, 2006, by and among TARGET MEDIA PARTNERS OPERATING COMPANY, LLC, a Delaware limited liability company ("Buyer"), LEE ENTERPRISES, INCORPORATED, a Delaware corporation ("Lee Enterprises"), and LEE PROCUREMENT SOLUTIONS CO., an Iowa corporation ("Lee Procurement" and, together with Lee Enterprises, "Lee").

RECITALS

WHEREAS, Lee Enterprises owns all the Assets listed on Schedule A hereto, which it uses to conduct the business of operating the newspapers and publications listed on Schedule B hereto (the "Acquired Publications"), and is subject to certain liabilities relating to the business and operations of the Acquired Publications (collectively, the "Business"), and Lee Procurement is the owner of certain Intellectual Property (as defined below) and other intangibles listed on Schedule C hereto;

WHEREAS, at the Closing (as defined below), Lee desires to sell to Buyer, and Buyer desires to purchase from Lee, the Acquired Assets (as defined below), and in connection therewith, Buyer has agreed to assume certain liabilities relating to the Business, all upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows.

ARTICLE 1

DEFINITIONS

1.1 Certain Definitions . For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.1 :

"Acquired Assets" — the Assets set forth on Schedule A hereto.

"ADEA" — the Age Discrimination in Employment Act of 1967, as amended.

"Affiliates" — as to any Person, any other Person which, directly or indirectly, Controls, or is controlled by, or is under common control with, such Person.

"Allowable Lost Profits" — profits which were reasonably certain to have been realized but for the occurrence of the breach and which can be ascertained and measured with reasonable certainty, less any damage which the indemnifying party proves could have been reasonably avoided.

"Ancillary Agreements" — the Bill of Sale, Assignment and Assumption Agreement, Transition Services Agreement, Real Property Deeds and the instruments described in clauses (iii) , (iv) , (v) , (vi) , (vii) , (ix) , (x), (xi)  and (xiii)  of Section 2.7(a) and clauses (ii)  and (vi)  of Section 27(b) .

"Assets" — all properties, assets, rights (contractual or otherwise) and claims, whether personal, tangible or intangible.

"Business Day" — any day other than a Saturday, Sunday or a day on which the banks in New York or California are authorized by law or executive order to be closed.

"Closing Date" — the date and time as of which the Closing actually takes place.

"Consequential Damages" — damages that do not arise as an immediate, natural, and probable result of the breach, but arise from the interposition of an additional cause, without which there would have been no harmful result, and which could have been reasonably prevented by cover or otherwise.

"Control" (including, with its correlative meanings, "controlled by" and "under common control with") — the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by Contract or otherwise.

"Effective Time" shall mean the close of business on September 30, 2006; provided, however, that if the Closing does not occur on October 2, 2006, the "Effective Time" shall be as agreed by the parties or, if the parties do not agree, shall be close of business on the Business Day before the Closing Date.

"ERISA" — all compensation or employee benefit plans, programs, policies, agreements or other arrangements, whether or not "employee benefit plans" within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

"Excluded Assets" — the Assets set forth on Schedule D hereto, whether such Assets are Assets of the Acquired Publications, Lee Enterprises or Lee Procurement.

"GAAP" — United States generally accepted accounting principles.

"Governmental Entity" — any Federal, state or local government or any court, administrative agency, bureau, commission, department or other authority of any domestic or foreign government or any arbitrator in any case that has jurisdiction over an applicable party or any of its properties or Assets.

"Income Taxes" — any income, franchise or similar Taxes.

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"IRC" — the Internal Revenue Code of 1986, as amended, or any successor law.

"IRS" — the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.

"Knowledge" — (i) with respect to Buyer, the actual knowledge (without duty to investigate) of any of James Sington, John Humphreville, Mark Schiffmacher or Susan Humphreville; and (ii) with respect to Lee, the actual knowledge (without duty to investigate) of any of the individuals listed on Section 10.3(a) of the Lee Disclosure Schedules.

"Liability" — any direct or indirect debt, obligation or liability of any kind or nature, whether accrued or fixed, absolute or contingent, determined or determinable, matured or unmatured, and whether due or to become due, asserted or unasserted or known or unknown.

"Person" — an individual, a corporation, a partnership, a limited liability company or partnership, an association, a trust or any other entity, group (as such term is used in Section 13 of the Securities and Exchange Act of 1934, as amended) or organization, including a Governmental Entity, and any permitted successors and assigns of such person.

"Prime Rate" — the rate of interest publicly announced from time to time by Bank of America, National Association, as its "prime rate" of interest per annum.

"Proceeding" — any action, inquiry, proceeding, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Entity.

"Representative" — with respect to a particular Person, any director, officer, employee, agent, consultant or other representative of such Person, including legal counsel, accountants, financial advisors and lenders.

"SEC" — the United States Securities and Exchange Commission.

"Subsidiary" — any corporation, limited liability company or partnership, association, trust or other form of legal entity of which (i) more than 50% of the outstanding voting securities are on the date hereof directly or indirectly owned by any party; or (ii) such party or any subsidiary of such party is a general partner (excluding partnerships in which such party or any subsidiary of such party does not have a majority of the voting interests in such partnership).

1.2 Other Definitions . The following terms are defined in the sections indicated:

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ARTICLE 2

SALE OF THE ACQUIRED ASSETS; CLOSING

2.1 Purchase and Sale of the Acquired Assets . Subject to the terms and conditions of this Agreement, at the Closing, but effective as of the Effective Time, Lee Enterprises and Lee Procurement will sell, convey, transfer, assign and deliver to Buyer all of their right, title and interest in and to the Acquired Assets.

2.2 Assumption of Liabilities .

• (a) Assumption . Upon the terms and subject to the conditions set forth herein, at the Closing and effective as of the Effective Time, Buyer shall assume from Lee (and therefore agree to pay, perform and discharge), and Lee shall irrevocably convey, transfer and assign to Buyer, all of the Assumed Liabilities.

  (b) Definition of Assumed Liabilities . For all purposes of and under this Agreement, the term "Assumed Liabilities" shall mean, refer to and include all of the Liabilities of Lee that arose out of or relate to the operation of the Business or the Acquired Assets (but excluding the Excluded Liabilities), including:

  • • (i) Liabilities of Lee and its Affiliates under all Contracts (including leases of real property, the Assignment Resulting in Change of Ownership regarding that portion of the Spokane, Washington market and pricing therefor set forth in Appendix A under the Media Audit Lease Agreement dated March 2, 2006 between Lee Enterprises and International Demographics, Inc., the Linen Service Agreement with American Linen dated February 15, 2006

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• • • and the Equipment Lease Agreement dated April 25, 2006 between Lee Enterprises and Bank of the West with Addendum to the extent of the "Additional Commitment" involving equipment located at 13026 West McFarlane Road, Building 2, Airway Heights, Washington supplied by Kodak Graphic Communications Company and Southern Lithoplate and referred to in Section 3.4 of the Lee Disclosure Schedules, all of which have been previously disclosed to Buyer) included in or otherwise related to the Acquired Assets (other than Liabilities and obligations relating to breaches occurring prior to the Closing Date);

      (ii) All current Liabilities of Lee reflected in the Statement of Working Capital (as provided in Section 2.3(b)(ii) ), as of the Effective Time to the extent such Liabilities are reflected on the Business Balance Sheet or incurred after June 30, 2006 in the ordinary course of the Business and in connection with the operation of the Business and disclosed, but not including Excluded Liabilities or any Liabilities related to the Excluded Assets;

      (iii) Liabilities for Transfer Taxes that are the responsibility of Buyer pursuant to Section 5.6 hereof;

      (iv) Liabilities of Buyer relating to the Hired Employees under Article 6 , including (a) the Participation Agreement between Lee Enterprises and Judy Olson dated April 30, 2006, and any other such agreement pursuant to Section 5.1 (b)(i)(B) and (b) the Buyer Severance Amount for any Eligible Hired Employee pursuant to Section 6.3(b) hereof.

  (c) Definition of Excluded Liabilities . Notwithstanding anything to the contrary set forth in this Section 2.2 or elsewhere in this Agreement, Buyer shall not assume, and Lee agrees that Buyer shall not be liable or otherwise responsible for, the following Liabilities, except to the extent provided in this Agreement or otherwise agreed to by the parties in writing and included in the Statement of Working Capital as provided in Section 2.3(b)(ii) (the Liabilities referred to in clauses (i) through (vii) of this Section 2.2(c) , collectively, the "Excluded Liabilities"):

  • • (i) Liabilities under any Benefit Plan which is retained by Lee, which retained Benefit Plans are set forth on Section 2.2(c)(i) of the Lee Disclosure Schedules (excluding the Liabilities described in clause (iv) of Section 2.2(b) ;

      (ii) Liabilities of the Business in respect of transaction costs payable by Lee pursuant to Section 5.6 hereof;

      (iii) Liabilities of the Business occurring prior to the Closing Date for any amounts owed to Lee pursuant to any note or account payable with any division of Lee or any Affiliate thereof;

      (iv) Liabilities of Lee with respect to indebtedness for borrowed money (but excluding the equipment lease referred to in Section 2.2(b)(i) hereof);

      (v) Liabilities of Lee owed to Buyer (or, pursuant to Article 9 , any Buyer Indemnified Parties) as a result of any breach of this Agreement by Lee;

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• • • (vi) Liabilities for Taxes of Lee, except as otherwise provided in this Agreement;

      (vii) Liabilities of Lee not arising out of or relating to the operation of the Business;

      (viii) Liabilities arising prior to the Closing Date the existence of which would constitute a breach of the warranty set forth in Section 3.4 ;

      (ix) Tort Liabilities arising prior to the Closing Date;

      (x) Liabilities under all employment agreements arrangements or other Contracts between Lee and any Business Employee, including any obligation to make payments to any Business Employee as set forth in any employment agreement or other Contract between Lee and any such Business Employee, except as specifically provided in this Section 2.2 ;

      (xi) Liabilities under the Equipment Lease dated April 25, 2006 between Lee Enterprises and Bank of the West except to the extent of the "Additional Commitment" involving equipment located at 13026 West McFarlane Road, Building 2, Airway Heights, Washington supplied by Kodak Graphic Communications Company and Southern Lithoplate and referred to in Section 3.4 of the Lee Disclosure Schedules; and

      (xii) Liabilities associated with corporate allocations to health and welfare which are Excluded Assets.

2.3 Consideration for the Acquired Assets .

• (a) Purchase Price . Subject to the adjustments in Section 2.3(b) , the aggregate consideration (the "Purchase Price") for the Acquired Assets will be (i) Eighteen million five hundred thousand ($18,500,000.00) in cash and (ii) the Assumed Liabilities assumed by Buyer pursuant to Section 2.2 hereof.

  (b) Working Capital Adjustment .

  • • (i) For all purposes of and under this Agreement, the term "Working Capital" shall mean (x) the value of the current assets of the categories described on Schedule E hereto of the Business and included in the Acquired Assets, minus (y) the value of the current liabilities of the categories described on Schedule F hereto of the Business and included in the Assumed Liabilities.

      (ii) As promptly as practicable, but in any event within sixty (60) calendar days following the Closing, Lee shall cause to be prepared and delivered to the Buyer a statement (the "Statement of Working Capital") setting forth the Working Capital as of the

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• • • Effective Time (the "Closing Working Capital"). The Closing Working Capital will reflect the principle that all expense and revenue arising from the operation of the Business prior to the close of business as of the Effective Time shall be for the account of Lee and those arising after the close of business after the Effective Time shall be for the account of Buyer. The Statement of Working Capital will be prepared, to the extent practicable, in accordance with GAAP and past practice, except that (A) no cash or cash equivalents shall be included as current assets, (B) no transfer costs and expenses or Transfer Taxes incurred in connection with the transactions contemplated hereby that are the responsibility of a party hereto pursuant to Section 5.6 hereof will be included, (C) no Excluded Liabilities will be included, (D) no Excluded Assets will be included, (E) no Tax asset or Tax liability relating to Income Taxes will be included, (F) the Severance Amount of each Eligible Hired Employee and the Participation Agreement between Lee Enterprises and Judy Olson dated April 30, 2006, and any other such agreement pursuant to Section 5.1(b)(i)(B) shall not be included, (G) no intercompany charge payable by the Business to Lee Procurement for newsprint and other services shall be included as a current liability, and (H) the Business Financial Statements are summary in nature and do not include the statement of cash flows and notes and related disclosures required by GAAP.

      (iii) Subject to Section 2.3(b)(iv) hereof, within twenty (20) calendar days following delivery of the Statement of Working Capital pursuant to Section 2.3(b)(ii) hereof, (A) Lee shall pay to Buyer the amount, if any, by which $0 exceeds the Closing Working Capital reflected in the Statement of Working Capital, or (B) Buyer shall pay to Lee the lesser of (a) $875,000 or (b) the amount, if any, by which the Closing Working Capital reflected in the Statement of Working Capital exceeds $0. Any and all payments made pursuant to this Section 2.3(b)(iii) shall be made by wire transfer of immediately available funds to an account designated in writing by the party to receive such payment. Any payment made pursuant to this Section 2.3(b)(iii) shall be deemed to be an adjustment to the Purchase Price and included in the allocation of the Purchase Price set forth in Schedule G pursuant to Section 2.3(c) hereof and allocated to purchase of working capital.

      (iv) If Buyer disagrees with the Statement of Working Capital, then Buyer shall notify Lee in writing (the "Notice of Disagreement") of such disagreement within fifteen (15) calendar days following delivery of the Statement of Working Capital. If Lee has not received a Notice of Disagreement within such fifteen (15) day period, Buyer shall be deemed to have accepted the Statement of Working Capital. Any Notice of Disagreement shall set forth in reasonable detail the adjustments Buyer proposes to make to the Statement of Working Capital and the basis therefor and shall be consistent with the provisions of Section 2.3(b)(ii) . Thereafter, Lee and Buyer shall attempt in good faith to resolve and finally determine the amount of the Closing Working Capital. If Lee and Buyer are unable to resolve the disagreement within thirty (30) calendar days following delivery of the Notice of Disagreement, then Lee and Buyer shall select a mutually acceptable, nationally recognized independent accounting firm that does not then have a present relationship with Lee or Buyer (the "Independent Accountant"), to resolve the disagreement and make a determination with respect thereto. If Lee and Buyer are unable, within ten (10) calendar days, to select a mutually acceptable Independent Accountant, then each of Lee and Buyer shall select a nationally

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• • • recognized independent accounting firm and these two firms will choose a nationally recognized independent accounting firm which will serve as the Independent Accountant. The determination of the Independent Accountant to resolve the disagreement between Lee and Buyer as to the Statement of Working Capital will be made, and written notice thereof given to Lee and Buyer, within thirty (30) calendar days after the selection of the Independent Accountant. The determination by the Independent Accountant shall be final, binding and conclusive upon Lee and Buyer. The scope of the Independent Accountant’s engagement (which will not be an audit) shall be limited to the resolution of the disputed items described in the Notice of Disagreement, and the recalculation, if any, of the Statement of Working Capital in light of such resolution. If an Independent Accountant is engaged pursuant to this Section 2.3(b)(iv) , the fees and expenses of the Independent Accountant shall be borne equally by Lee and Buyer. Within ten (10) calendar days after delivery of a notice of determination by the Independent Accountant as described above, any payment required by Section 2.3(b)(iii) hereof shall be made, based on such determination.

  (c) Allocation of Purchase Price to the Acquired Assets . As soon as practicable after the Closing Date and no later than sixty (60) days thereafter, Lee shall provide Buyer with a draft of Internal Revenue Service Form 8594 allocating the consideration payable under Section 2.3(a) which shall not be materially different from the allocation set forth on Schedule G (except for the adjustment to the Purchase Price provided in Section 2.3(b)(iii) ). Buyer shall review such Form 8594 and provide any comments with respect thereto to Lee not more than thirty (30) days after the date Lee’s draft is provided to Buyer. Each of Buyer and Lee shall report the allocation (and any adjustments thereto) for Tax purposes and file its Tax Returns (including Form 8594) in a manner consistent with any mutually-agreed allocations determined pursuant to Schedule G , as adjusted pursuant to Section 2.3(b)(iii) .

2.4 Further Assurances . At and after the Closing, and without further consideration therefor, (a) Lee Enterprises and Lee Procurement shall execute and deliver to Buyer such further instruments and certificates of conveyance and transfer as Buyer may reasonably request in order to more effectively convey and transfer the Acquired Assets to Buyer and to put Buyer in operational control of the Business, or to aid, assist, collect and reduce to possession any of the Acquired Assets and exercise rights with respect thereto, and (b) Buyer shall execute and deliver to Lee such further instruments and certificates of assumption, novation and release as Lee may reasonably request in order to effectively make Buyer responsible for all Assumed Liabilities and release Lee therefrom to the fullest extent permitted under applicable Law. The parties hereby waive compliance with the provisions of any applicable bulk sales Law of any jurisdiction in connection with the transactions contemplated hereby and no representation, warranty or covenant contained in this Agreement shall be deemed to have been breached as a result of such non-compliance.

2.5 Nontransferable Business Contracts . To the extent that transfer or assignment hereunder by Lee to Buyer of any agreement, contract, binding understanding, instrument or legally binding commitment or understanding (a "Contract") included in the Acquired Assets (an "Assumed Contract") is not permitted or is not permitted without the consent of another Person,

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this Agreement shall not be deemed to constitute an undertaking to assign the same if such consent is not given or if such an undertaking otherwise would constitute a breach thereof or cause a loss of benefits thereunder. Lee shall use reasonable efforts to obtain any and all such third party consents under all Assumed Contracts; provided, however, that Lee shall not be required to pay or incur any cost or expense (excluding reasonable internal staff time and reasonable expenses for postage, stationery, telephone calls and similar costs) to obtain any third party consent. If any such third party consent is not obtained before the Closing, Lee shall, for a period of one (1) year after the Closing without obligation of Lee to pay or incur any cost or expense related thereto (excluding reasonable internal staff time and reasonable expenses for postage, stationery, telephone calls and similar costs), use reasonable efforts to: (a) obtain such consent, (b) cooperate with Buyer in any reasonable arrangement designed to provide Buyer the benefits of the applicable Assumed Contract and (c) enforce any rights of Lee under or with respect to the applicable Assumed Contract against all other Persons (including termination thereof in accordance with the terms thereof upon the election of Buyer). In addition, if any such third party consent is not obtained before the Closing, Buyer shall perform the obligations of Lee under such Assumed Contract to the extent that such obligation would have been an Assumed Liability but for the fact that such consent has not been so obtained.

2.6 Closing . The purchase and sale (the "Closing") provided for in this Agreement, except to the extent that Buyer and Lee agree on another time and place, will take place at the offices of Lane & Waterman LLP, 220 N. Main Street, Suite 600, Davenport, IA 52801, at 10:00 a.m. (local time), on October 2, 2006 or not later than two (2) Business Days following the satisfaction and fulfillment or, if permissible pursuant to the terms hereof, waiver of the conditions contained in Article 7 (with a pre-Closing to be held on September 29, 2006 at a time and place mutually agreeable to the parties).

2.7 Closing Obligations . At the Closing:

• (a) Lee Enterprises and Lee Procurement, as applicable, will deliver to Buyer duly executed copies of:

  • • (i) a bill of sale for the Acquired Assets substantially in the form attached hereto as Exhibit A (the "Bill of Sale");

      (ii) an instrument of assignment and assumption substantially in the form attached hereto as Exhibit B (the "Assignment and Assumption Agreement");

      (iii) certificates pursuant to clauses (a) and (b) of Section 7.2 ;

      (iv) instruments of assignment to Buyer of all registrations and applications for Intellectual Property and other intangibles included in the Acquired Assets and reasonably requested by Buyer; provided, however, Lee Procurement’s assignment of the Nickel Ads’ trademark and service mark shall be in the form attached hereto as Exhibit C ; and further provided, Lee Procurement shall assign to Buyer, its successors, assigns and other legal representatives, its rights in each business associated with Hispanos Unidos and Home Buyer’s

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• • • Guide in the current distribution territory of each such publication, but in no other territory, and the goodwill associated with such business, together with the sole and exclusive right to use each of such mark in the current distribution territory in connection with such business and the assignment shall otherwise be in the form set forth in Exhibit C as applicable;

      (v) instruments of assignment to Buyer of all rights of Lee Enterprises and Lee Procurement to the domain names and website addresses included in the Acquired Assets and reasonably requested by Buyer;

      (vi) a certificate of Lee Enterprises and Lee Procurement that each is not a foreign Person subject to withholding under Section 1445 of the IRC;

      (vii) a Transition Services Agreement substantially in the form attached hereto as Exhibit D (the "Transition Services Agreement");

      (viii) instrument of assignment of all of the rights of Lee Enterprises solely with respect to the Business under all confidentiality agreements executed by all other potential buyers as they relate to the Acquired Assets without warranty as to enforceability and without the obligation to obtain such potential buyers’ consent to the assignment thereof;

      (ix) UCC-2s, good standing certificates, and all other instruments or documents as Buyer, its counsel, or its banks may reasonably request to affect the conveyance and assignment of the Acquired Assets as contemplated hereby free and clear of all Liens;

      (x) instrument of assignment of all of the rights of Lee Enterprises solely with respect to the unexpired restrictive covenants involving George L. Griffin, Sr. under the Asset Purchase Agreement referred to in Section 3.15 of the Lee Disclosure Schedules without warranty as to enforceability and without obligation to obtain the consent of George L. Griffin, Sr. to such assignment;

      (xi) an instrument of assignment of all of the rights of Lee pursuant to the Phase I Environmental Site Assessment, Lee Northwest Publishing, Airway Heights, Washington dated November 15, 2001, prepared by Landau Associates, Inc., without warranty as to enforceability and without obligation to obtain the consent of Landau Associates, Inc. and a reliance letter issued by Landau in favor of Buyer and its lender and counsel; and

      (xii) such other good and sufficient instruments of conveyance, transfer, and assignment as shall be effective to vest in Buyer good and marketable title in and to the Acquired Assets, free and clear of all mortgages, liens, restrictions, encumbrances, claims, and obligations, of any nature whatsoever, except as permitted in this Agreement, in form and substance, and executed and delivered in a manner, reasonably satisfactory to Buyer.

  (b) Buyer will deliver to Lee:

  • • (i) the sum of $ 18,500,000 by wire transfer in immediately available funds to the account specified by Lee;

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• • • (ii) duly executed copies of the certificates pursuant to clauses (a) and (b) of Section 7.3 ;

      (iii) a duly executed counterpart of the Bill of Sale;

      (iv) a duly executed counterpart of the Assignment and Assumption Agreement and such documentation necessary related to the assignment and assumption of the contracts set forth in Sections 2.2(b)(i) and (iv) hereof;

      (v) a duly executed counterpart of the Transition Services Agreement; and

      (vi) duly executed counterparts of all other instruments and certificates of assumption, novation and release as Lee may reasonably request in order to effectively make Buyer responsible for all Assumed Liabilities and release Lee Enterprises or Lee Procurement, as applicable, therefrom to the fullest extent permitted under applicable Law.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF LEE

Except as disclosed in the disclosure schedules delivered by Lee to Buyer immediately prior to the execution of this Agreement (it being agreed that any information set forth in one section of such disclosure schedules shall be deemed to apply to each other section thereof to which its relevance is reasonably apparent) (the "Lee Disclosure Schedules"), Lee represents and warrants to Buyer as follows:

3.1 Organization; Qualification; Authority . Each of Lee Enterprises and Lee Procurement is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Each of Lee Enterprises and Lee Procurement has the corporate power and authority to carry on the Business and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where qualification as a foreign corporation is required to carry on the Business, except where the failure to be so organized, validly existing, qualified or in good standing, or to have such power or authority, would not have, individually or in the aggregate, a Business Material Adverse Effect. As used in this Agreement, any reference to any facts, circumstances, events or changes having a "Business Material Adverse Effect" means such facts, circumstances, events or changes that are, or would reasonably be expected to become, materially adverse to the business, financial condition or continuing operations of the Business taken as a whole, but shall not include facts, circumstances, events or changes (a) generally affecting the newspaper or classified publications industry in the United States or the economy or the financial or securities markets in the United States or elsewhere in the world, including regulatory and political conditions or developments (including any outbreak or escalation of hostilities or acts of war or terrorism) or (b) resulting

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from (i) the announcement or the existence of, or compliance with, this Agreement or the transactions contemplated hereby, including the effect of the announcement of, or the existence of the plan to sell, the Business; or (ii) any litigation arising from allegations of a violation of applicable Law relating to this Agreement or the transactions contemplated hereby; or (iii) changes in applicable Law, GAAP or accounting standards.

3.2 Corporate Authority Relative to this Agreement; No Violation .

• (a) Each of Lee Enterprises and Lee Procurement has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to be executed and delivered by such corporation and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Agreements to be executed and delivered by each of Lee Enterprises and Lee Procurement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the Boards of Directors of such corporations, and no other corporate proceedings on the part of each of Lee Enterprises and Lee Procurement are necessary to authorize the consummation of the transactions contemplated hereby and thereby. This Agreement has been, and the Ancillary Agreements to be executed and delivered by each of Lee Enterprises and Lee Procurement will, as of the Closing, have been, duly and validly executed and delivered by each of Lee Enterprises and Lee Procurement, and (assuming this Agreement constitutes, and as of the Closing the Ancillary Agreements to be executed and delivered by Buyer will constitute the valid and binding agreement of Buyer) this Agreement constitutes, and as of the Closing, the Ancillary Agreements to be executed and delivered by each of Lee Enterprises and Lee Procurement will constitute, the valid and binding agreements of such corporation, enforceable against each of Lee Enterprises and Lee Procurement in accordance with their terms.

  (b) Other than in connection with or in compliance with (i) the Delaware General Corporation Law and Iowa Business Corporation Act; and (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and other federal and state competition Laws (collectively, the "Lee Approvals"), no authorization, consent or approval of, or filing with, any Governmental Entity or other Person is necessary under applicable Law for the consummation by each of Lee Enterprises or Lee Procurement of the transactions contemplated by this Agreement and the Ancillary Agreements to which such corporation is a party, except for such authorizations, consents, approvals or filings that, if not obtained or made, would not have, individually or in the aggregate, a Business Material Adverse Effect or materially impair or delay the consummation of the transactions contemplated hereby or thereby.

  (c) The execution and delivery by each of Lee Enterprises and Lee Procurement of this Agreement and the Ancillary Agreements to be executed and delivered by such corporation do not, and, except as described in Section 3.2(b) , the consummation of the transactions contemplated hereby and thereby and compliance with the provisions hereof and thereof will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit

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• agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon (x) Lee or (y) to the Knowledge of Lee, the Business or the Acquired Assets or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (each, a "Lien"), other than any such Lien (A) for Taxes or governmental assessments, charges or claims of payment not yet due, being contested in good faith and for which adequate accruals or reserves have been established on the Business Balance Sheet, (B) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar lien arising in the ordinary course of business, (C) which is disclosed on the Business Balance Sheet or securing liabilities reflected on such balance sheet or (D) which was incurred in the ordinary course of business since the date of the Business Balance Sheet and is immaterial in amount and is disclosed on the Statement of Working Capital as provided in Section 2.3(b)(ii) (each of the foregoing, a "Permitted Lien"), upon any of the properties or Assets included in the Acquired Assets; (ii) conflict with or result in any violation of any provision of the articles or certificate of incorporation or by-laws or other equivalent organizational document, in each case as amended, of Lee Enterprises and Lee Procurement; or (iii) conflict with or violate in any material respect any applicable Laws.

3.3 Business Financial Statements . Section 3.3 of the Lee Disclosure Schedules contains (i) the unaudited balance sheet of the Business as at September 30, 2005; and (ii) the unaudited balance sheet of the Business as at June 30, 2006 (the June 30, 2006 balance sheet is referred to as the "Business Balance Sheet"), and the related unaudited statements of income for the twelve-month period ended September 30, 2005 and nine-month period ended June 30, 2006 (collectively, the "Business Financial Statements"). Except as disclosed in Section 3.3 of the Lee Disclosure Schedules, the Business Financial Statements have been prepared from the books and records of the Business and fairly present in all material respects the financial position of the Business as at September 30, 2005 and June 30, 2006 and the results of operations for the twelve months ended September 30, 2005, and the nine months ended June 30, 2006 in accordance with GAAP consistently applied, except that the Business Financial Statements are summary in nature, do not include an accrual for vacation and leave of absence time, and do not include the notes and related disclosures required by GAAP. Any interim financial statement shall be prepared substantially in a manner consistent with the Business Financial Statements.

The accounts receivable of the Business have arisen from bona fide transactions in the ordinary course of business. Subject to Lee Enterprises’ allowance for doubtful accounts policy listed in Section 3.3 of the Lee Disclosure Schedules, all such receivables as of the date hereof are currently due, and not subject to any express performance obligations by the Seller prior to collection. Said accounts receivable, to the Knowledge of Seller, are subject to no defenses, counterclaims or rights of setoffs.

3.4 No Undisclosed Liabilities . Except as disclosed in Section 3.4 of the Lee Disclosure Schedules or except (a) as reflected, reserved against or otherwise disclosed in the Business Balance Sheet (or the notes thereto), (b) for liabilities permitted by or incurred pursuant to this Agreement, (c) for liabilities and obligations incurred in the ordinary course of business since June 30, 2006 and disclosed in the Statement of Working Capital as provided in Section 2.3(b)(ii)

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and (d) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, as of the date hereof, Lee has no liabilities or obligations arising out of or relating to the operation of the Business, and there are no liabilities or obligations of the Business, of any nature, in each case, whether or not accrued, contingent or otherwise, that would be required by GAAP to be reflected on the Business Balance Sheet (or in the notes thereto), other than those which would not have, individually or in the aggregate, a Business Material Adverse Effect.

3.5 Compliance with Law; Permits.

• (a) With respect to the Business, Lee is in compliance with and is not in default under or in violation of any applicable federal, state, local or foreign constitution, law, statute, ordinance, rule, regulation, judgment, order, injunction, decree or agency requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (collectively, "Laws" and each, a "Law"), except where such non-compliance, default or violation would not have, individually or in the aggregate, a Business Material Adverse Effect (provided that Lee has disclosed on the Disclosure Schedules any such non-compliance, default or violation of which it has Knowledge irrespective of whether it has had or may reasonably be expected to have a Business Material Adverse Effect).

  (b) With respect to the Business, Lee is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for each entity to own, lease and operate its properties and Assets and to carry on the Business as it is now being conducted (the "Lee Permits"), except where the failure to have any of Lee Permits would not have, individually or in the aggregate, a Business Material Adverse Effect (provided Lee has disclosed on the Disclosure Schedules any such failure to have such Lee Permits of which it has Knowledge irrespective of whether it has had or may reasonably be expected to have a Business Material Adverse Effect). To the Knowledge of Lee, all Lee Permits are in full force and effect.

3.6 Environmental Laws and Regulations .

• (a) Except as identified in any Phase I Environmental Site Assessment identified in Section 3.6 of the Lee Disclosure Schedules, or as would not, individually or in the aggregate, have a Business Material Adverse Effect, (i) Lee has conducted the Business in material compliance with all applicable Environmental Laws; (ii) to the Knowledge of Lee, no Hazardous Substance is present in, on, under or about any of the properties used in connection with the operation of the Business in amounts exceeding the levels permitted by applicable Environmental Laws and for which Lee or Buyer would reasonably be expected to be liable for investigation and remediation; (iii) Lee has not received any notices, demand letters or requests for information from any Governmental Entity indicating that Lee may be in violation of, or liable under, any Environmental Law relating to the operation of the Business; (iv) no Hazardous Substance has been disposed of, released or transported by Lee in violation of any applicable Environmental Law, or in a manner giving rise to any liability under Environmental Law, from

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• any of the properties used in connection with the operation of the Business during the time such properties were owned, rented, or leased by Lee; and (v) none of the properties that are used in connection with the operation of the Business and currently owned, rented, or leased by Lee are subject to any liabilities of Lee relating to any suit, settlement, court order, administrative order, regulatory requirement, judgment or written claim asserted or arising under any Environmental Law. It is agreed and understood that this Section 3.6 contains Lee’s entire representation and warranty relating to environmental matters, and no other representation or warranty contained in this Agreement shall be construed to include any representation or warranty regarding environmental matters.

  (b) As used herein, "Environmental Law" means any Law relating to (x) the protection, preservation or restoration of the environment (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), (y) worker safety from environmental hazards and Hazardous Substances or (z) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances, in each case as in effect at the date hereof.

  (c) As used herein, "Hazardous Substance" means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Entity or any Environmental Law, including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls or toxic mold.

3.7 Employee Benefit Plans .

• (a) Section 3.7(a) of the Lee Disclosure Schedules lists all material benefit plans provided to the Business Employees (each a "Benefit Plan" and collectively, the "Benefit Plans"). Lee’s current employees who provide services primarily with respect to the Business are each a "Business Employee" and collectively, the "Business Employees".

  (b) Other than as disclosed on Section 3.7(a) of the Lee Disclosure Schedules, Lee has no commitment to establish any new Benefit Plan (except to the extent required by Law or to conform any such Benefit Plan to the requirements of any applicable Law, or as required by this Agreement) or to modify any Benefit Plan for the benefit of the Business Employees.

  (c) Each Benefit Plan has been maintained and administered in compliance with its terms and with applicable Law, including ERISA and the IRC to the extent applicable thereto, except for such non-compliance which would not have, individually or in the aggregate, a Business Material Adverse Effect, and Lee has no Knowledge of any material non-compliance and has received no notice from any governmental agency with respect to same.

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• (d) Any Benefit Plan intended to be qualified under Section 401(a) of the IRC and each trust intended to qualify under Section 501(a) of the IRC:

  • • (i) has either applied for, prior to the expiration of the requisite period under applicable Treasury Regulations or IRS pronouncements, or obtained a favorable determination, notification, advisory and/or opinion letter, as applicable, as to its qualified status from the IRS or still has a remaining period of time under applicable Treasury Regulations or IRS pronouncements in which to apply for such letter and to make any amendments necessary to obtain a favorable determination;

      (ii) incorporates or has been amended to incorporate all provisions required to comply with the Tax Reform Act of 1986 and subsequent legislation; and

      (iii) has had no event, condition or circumstance that has adversely affected or is likely to adversely affect such qualified status; and

      (iv) is not a Multi-employer Plan or Defined Benefit Pension Plan within the meaning of the IRC or ERISA.

  (e) All contributions to the Lee Enterprises Retirement Account Plan or the Lee Enterprises Supplementary Benefit Plan that will have been required to be made with respect to periods and/or benefits accrued and/or amounts withheld prior to the Closing Date under such plans will have been made prior to the Closing or will be made or accrued promptly after the Closing Date and any accruals or amounts withheld and not paid will be included in the Statement of Working Capital as provided in Section 2.3(b)(ii).

3.8 Absence of Certain Changes or Events . Since June 30, 2006, except as otherwise contemplated, required or permitted by this Agreement or as described in Section 3.8 of the Lee Disclosure Schedules, the Business has been conducted, in all material respects, in the ordinary course of business consistent with past practice and there has not been (i) any event, development or state of circumstances that has had, individually or in the aggregate, a Business Material Adverse Effect; (ii) any material change in accounting methods, principles or practices with respect to the Business; (iii) any agreement by Lee, with respect to the Business, to acquire, any business or corporation, partnership, association or other business organization or division thereof; or (vii) any sale, lease, license or other disposition of any material properties or Assets of the Business or any material properties or Assets included in the Acquired Assets, other than in the ordinary course of business.

3.9 Investigations; Litigation . As of the date hereof, (a) there is no investigation or review pending or, to the Knowledge of Lee, threatened by any Governmental Entity with respect to the Business and (b) except as described in Sect