SEPARATION AND DISTRIBUTION AGREEMENT

Execution Version

SEPARATION AND DISTRIBUTION AGREEMENT

BELO CORP.

and

Dated as of February 8, 2008

TABLE OF CONTENTS

						Page
ARTICLE I DEFINITIONS							2
		Section 1.01.		Definitions			2
		Section 1.02.		General Interpretive Principles			10
ARTICLE II THE RECAPITALIZATION AND SEPARATION							10
		Section 2.01.		Recapitalization and Other Transactions			10
		Section 2.02.		The Separation and Related Transactions			11
		Section 2.03.		Conditions Precedent to Consummation of the Recapitalization and the Separation			16
ARTICLE III THE DISTRIBUTION							16
		Section 3.01.		Actions Prior to the Distribution			16
		Section 3.02.		The Distribution			18
		Section 3.03.		Conditions to Distribution			19
ARTICLE IV SURVIVAL AND INDEMNIFICATION							21
		Section 4.01.		Survival of Agreements			21
		Section 4.02.		Indemnification by Newspaper Holdco			21
		Section 4.03.		Indemnification by Belo			21
		Section 4.04.		Insurance			22
		Section 4.05.		Procedures for Indemnification of Third-Party Claims			23
		Section 4.06.		Additional Matters			24
		Section 4.07.		Contribution			25
		Section 4.08.		Survival of Indemnities			25
		Section 4.09.		Remedies Cumulative			25
		Section 4.10.		Ancillary Agreements			25
ARTICLE V CERTAIN ADDITIONAL COVENANTS							25
		Section 5.01.		Consents for Business			25
		Section 5.02.		Additional Consents			26
		Section 5.03.		Further Assurances			26
		Section 5.04.		Certain Business Matters			27
		Section 5.05.		Settlement of Certain Insurance Claims.			27
		Section 5.06.		Circulation Litigation			28
ARTICLE VI ACCESS TO INFORMATION							28
		Section 6.01.		Agreement for Exchange of Information			28
		Section 6.02.		Ownership of Information			29
		Section 6.03.		Compensation for Providing Information			30
		Section 6.04.		Record Retention			30
		Section 6.05.		Limitation of Liability			30
		Section 6.06.		Other Agreements Providing for Exchange of Information			30
		Section 6.07.		Production of Witnesses; Records; Cooperation			31

						Page
		Section 6.08.		Confidentiality			32
ARTICLE VII NO REPRESENTATION OR WARRANTY							33
		Section 7.01.		NO REPRESENTATIONS OR WARRANTIES			33
ARTICLE VIII TERMINATION							34
		Section 8.01.		Termination			34
		Section 8.02.		Effect of Termination			34
ARTICLE IX MISCELLANEOUS							34
		Section 9.01.		Complete Agreement; Representations			34
		Section 9.02.		Costs and Expenses			35
		Section 9.03.		Governing Law			35
		Section 9.04.		Notices			35
		Section 9.05.		Amendment, Modification or Waiver			36
		Section 9.06.		No Assignment; Binding Effect; No Third-Party Beneficiaries			36
		Section 9.07.		Counterparts			37
		Section 9.08.		Negotiation			37
		Section 9.09.		Specific Performance			37
		Section 9.10.		Texas Forum			37
		Section 9.11.		Interpretation; Conflict With Ancillary Agreements			38
		Section 9.12.		Severability			38

SEPARATION AND DISTRIBUTION AGREEMENT

     This SEPARATION AND DISTRIBUTION AGREEMENT (this “ Agreement ”), dated as of February 8, 2008, by and between Belo Corp., a Delaware corporation (“ Belo ”), and A. H. Belo Corporation, a Delaware corporation and a wholly owned subsidiary of Belo (“ Newspaper Holdco, ” and, together with Belo, each a “ Party ” and collectively the “ Parties ”).

RECITALS

     WHEREAS, the Board of Directors of Belo has determined that it is in the best interests of Belo and its shareholders to separate the Newspaper Holdco Business (as defined below) and the Belo Business (as defined below) into two separate public companies (the “ Separation ”), on the terms and subject to the conditions set forth in this Agreement, in order to, among other things, (i) create more focused organizations better able to respond to different industry dynamics and therefore better able to tailor strategic initiatives and priorities; (ii) allow the investment community to evaluate Belo and Newspaper Holdco separately relative to the performance of their peers; (iii) allow Newspaper Holdco greater flexibility to create a capital structure and deploy capital more closely aligned with its strategic priorities; and (iv) allow Newspaper Holdco to provide its management and employees incentive compensation more directly linked to its individual financial performance;

     WHEREAS, to further effect the Separation, Newspaper Holdco intends to obtain and retain ownership and possession of all Newspaper Holdco Assets (as defined below) and Belo intends to retain ownership and possession of all Belo Assets (as defined below);

     WHEREAS, except as specifically otherwise set forth herein, to further effect the Separation, Newspaper Holdco intends to remain solely liable for all Newspaper Holdco Liabilities (as defined below) and Belo intends to remain solely liable for all Belo Liabilities (as defined below);

     WHEREAS, Belo intends to distribute to the holders of issued and outstanding shares of (i) Series A common stock, par value $1.67 per share, of Belo (the “ Series A Belo Common Stock ”), and (ii) Series B common stock, par value $1.67 per share, of Belo (the “ Series B Belo Common Stock ” and, together with the Series A Belo Common Stock, the “ Belo Common Stock ”), as of the Record Date (as defined below), by means of a pro rata dividend, 100% of the issued and outstanding shares of (x) Series A common stock, par value $0.01 per share, of Newspaper Holdco (the “ Series A Newspaper Holdco Common Stock ”), including the Preferred Share Purchase Rights attached thereto, and (y) Series B common stock, par value $0.01 per share, of Newspaper Holdco (the “ Series B Newspaper Holdco Common Stock ” and, together with the Series A Newspaper Holdco Common Stock, the “ Newspaper Holdco Common Stock ”), including the Preferred Share Purchase Rights attached thereto, on the basis of .20 shares of Series A Newspaper Holdco Common Stock for every then issued and outstanding share of Series A Belo Common Stock and .20 shares of Series B Newspaper Holdco Common Stock for every then issued and outstanding share of Series B Belo Common Stock (the “ Distribution ”) on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS, the treatment, in connection with the Distribution, of any outstanding Belo stock option or restricted share unit will be as specified in the Employee Matters Agreement (as defined below);

     WHEREAS, it is the intention of the Parties that, for United States federal income tax purposes, the Separation and Distribution and the other transactions contemplated herein shall qualify as transactions that are generally tax-free within the meaning of Sections 355 and 368 (and other related provisions) of the U.S. Internal Revenue Code of 1986, as amended (the “ Code ”);

     WHEREAS, the Board of Directors of Belo has (i) determined that the Separation, the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements (as defined below) have a valid business purpose, are in furtherance of and consistent with its business strategy and are in the best interests of Belo and its shareholders and (ii) approved this Agreement and each of the Ancillary Agreements; and

     WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and the Distribution and certain other agreements that will govern certain matters relating to these transactions and the relationship of Belo and Newspaper Holdco and their respective Subsidiaries following the Distribution.

     NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01. Definitions .  As used in this Agreement, the following terms shall have the meanings set forth below:

     “ Action ” means any claim, demand, action, cause of action, suit, countersuit, arbitration, litigation, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal or authority.

     “ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person; provided , however , that for purposes of this Agreement, no member of either Group shall be deemed to be an Affiliate of any member of the other Group. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

     “ Agreement ” has the meaning assigned to such term in the Preamble hereto.

     “ Ancillary Agreements ” means the Employee Matters Agreement, the Tax Matters Agreements, the Services Agreement and any other agreement to be entered into by and between Belo (or any Subsidiary of Belo) and Newspaper Holdco (or any Subsidiary of Newspaper Holdco) at, prior to or after the Effective Time.

     “ Asset ” means any right, property or asset, whether real, personal or mixed, tangible or intangible, of any kind, nature and description, whether accrued, contingent or otherwise, and wheresoever situated and whether or not carried or reflected, or required to be carried or reflected, on the books of any Person.

     “ Balance Sheet ” has the meaning assigned to such term in the definition of Newspaper Holdco Assets.

     “ Belo ” has the meaning assigned to such term in the Preamble hereto.

     “ Belo Assets ” means all Assets of the Belo Group, other than the Newspaper Holdco Assets.

     “ Belo Business ” means all businesses and operations of the Belo Group, other than the Newspaper Holdco Business.

     “ Belo Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Belo Group ” means Belo and each of its Subsidiaries and Affiliates, and any corporation or entity that may become part of such Group from time to time, other than the Newspaper Holdco Group.

     “ Belo Indemnified Parties ” has the meaning assigned to such term in Section 4.02.

     “ Belo Liabilities ” means the Liabilities of Belo, other than the Newspaper Holdco Liabilities.

     “ Business ” means the Newspaper Holdco Business and/or the Belo Business, as the context requires.

     “ Bylaws ” means the Amended and Restated Bylaws of Newspaper Holdco substantially in the form filed as an exhibit to the Registration Statement, with such changes as may be agreed to by the Parties.

     “ Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of Newspaper Holdco substantially in the form filed as an exhibit to the Registration Statement, with such changes as may be agreed to by the Parties.

     “ Circulation Litigation ” means (i) the consolidated lawsuits filed by purported shareholders of Belo in the United States District Court for the Northern District of Texas against Belo and certain Affiliates and (ii) a shareholder derivative lawsuit filed by a purported individual shareholder of Belo in the 191st District Court of Dallas County, Texas against certain Affiliates of Belo, in each case relating to the circulation overstatement of The Dallas Morning

News announced in 2004 and as more fully described in the first two full paragraphs under “Legal Proceedings” in the Information Statement; provided, however, that the unlawful discrimination lawsuit filed by 18 former employees of The Dallas Morning News against Newspaper Holdco and certain of its Affiliates in the United States District Court for the Northern District of Texas, as more fully described in the fourth full paragraph under “Legal Proceeding” in the Information Statement, is specifically excluded from inclusion as part of the Circulation Litigation and shall be retained solely by Newspaper Holdco as a Newspaper Holdco Liability.

     “ Code ” has the meaning assigned to such term in the Recitals hereto.

     “ Consents ” means any consents, waivers, notices, reports or other filings to be made, including with respect to any contract, or any registrations, licenses, permits, authorizations to be obtained from, or approvals from, or notification requirements to, any third parties, including any third party to a contract and to any Governmental Authority.

     " Copyrights ” has the meaning assigned to such term in the definition of Intellectual Property.

     “ Delayed Transfer Asset and/or Liability ” has the meaning assigned to such term in Section 2.02(b).

     “ Dispute Notice ” has the meaning assigned to such term in Section 9.08.

     “ Distribution ” has the meaning assigned to such term in the Recitals hereto.

     “ Distribution Agent ” means The Bank of New York Mellon.

     “ Distribution Agent Agreement ” has the meaning assigned to such term in Section 3.01(b).

     “ Distribution Date ” means February 8, 2008, which is the date on which the Distribution shall be effected, as determined by the Board of Directors of Belo.

     “ Effective Time ” means 11:59 p.m., Central Time, on the Distribution Date.

     “ Employee Matters Agreement ” means the employee matters agreement to be entered into by and between Belo and Newspaper Holdco, substantially in the form filed as an exhibit to the Registration Statement, with such changes as may be agreed to by the Parties.

     “ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

     “ FIFO Basis ” means, with respect to the payment of Unrelated Claims pursuant to the same Belo insurance policy, the payment in full of each successful claim (regardless of whether Belo or Newspaper Holdco is the claimant) in the order in which such successful claim is approved by the insurance carrier, until the limit of the applicable Belo insurance policy is met, except with respect to the Circulation Litigation, which shall be governed by Section 5.06.

     “ Governmental Authority ” means any federal, state, local, foreign or international court, government, department, commission, board, bureau or agency, or any other regulatory, self-regulatory, administrative or governmental organization or authority, including the NYSE.

     “ Group ” means the Belo Group and/or the Newspaper Holdco Group, as the context requires.

     “ Indemnified Party ” has the meaning assigned to such term in Section 4.03.

     “ Indemnifying Party ” means Newspaper Holdco, for any indemnification obligation arising under Section 4.02, and Belo, for any indemnification obligation arising under Section 4.03.

      “Information” means all information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including non-public financial information, studies, reports, records, books, accountants’ work papers, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other Software, marketing plans, customer data, communications by or to attorneys, memos and other materials prepared by attorneys and accountants or under their direction (including attorney work product), and other technical, financial, legal, employee or business information or data.

     “ Information Statement ” means the information statement of Newspaper Holdco, included as Exhibit 99.1 to the Registration Statement, to be distributed to holders of Belo Common Stock in connection with the Distribution, including any amendments or supplements thereto.

     “ Initial Newspaper Holdco Capital Stock” has the meaning assigned to such term in Section 2.01.

     “ Intellectual Property ” means all intellectual property and other similar proprietary rights in any jurisdiction, whether owned or held for use under license, whether registered or unregistered, including such rights in and to: (i) trademarks, trade dress, service marks, certification marks, logos, and trade names, and the goodwill associated with the foregoing (collectively, “ Trademarks ”); (ii) patents and patent applications, and any and all divisions, continuations, continuations-in-part, reissues, continuing patent applications, reexaminations, and extensions thereof, any counterparts claiming priority therefrom, utility models, patents of importation/confirmation, certificates of invention, certificates of registration, design registrations or patents and like rights (collectively, “ Patents ”); inventions, invention disclosures, discoveries and improvements, whether or not patentable; (iii) writings and other works of authorship (“ Copyrights ”); (iv) trade secrets (including, those trade secrets defined in the Uniform Trade Secrets Act and under corresponding foreign statutory Law and common law), Information, business, technical and know-how information, business processes, non-public information, proprietary information and confidential information and rights to limit the use or disclosure thereof by any Person (collectively, “ Trade Secrets ”); (v) software, including data files, source code, object code, application programming interfaces, databases and other

software-related specifications and documentation (collectively, “ Software ”); (vi) domain names and uniform resource locators; (vii) moral rights; (viii) privacy and publicity rights; (ix) any and all technical information, Software, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, knowledge, invention disclosures or other data, not including works subject to Copyright, Patent or Trademark protection (“ Technology ”); (x) advertising and promotional materials, whether or not copyrightable; and (xi) claims, causes of action and defenses relating to the enforcement of any of the foregoing; in each case, including any registrations of, applications to register, and renewals and extensions of, any of the foregoing with or by any Governmental Authority in any jurisdiction.

     “ Inter-Group Indebtedness ” means any intercompany receivables, payables, accounts, advances, loans, guarantees, commitments and indebtedness for borrowed funds between a member of the Belo Group and a member of the Newspaper Holdco Group; provided , that “Inter-Group Indebtedness” shall not include any contingent Liabilities and accounts payable arising pursuant to the Ancillary Agreements, any agreements with respect to continuing transactions between Belo and Newspaper Holdco and any other agreements entered into in the ordinary course of business at or following the Distribution.

     “ Law ” means any applicable foreign, federal, national, state, provincial or local law (including common law), statute, ordinance, rule, regulation, code or other requirement enacted, promulgated, issued or entered into, or act taken, by a Governmental Authority.

     “ Liabilities ” means all debts, liabilities, obligations, responsibilities, response actions, Losses, damages (whether compensatory, punitive, consequential, treble or other), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, on- or off-balance sheet, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including those arising under or in connection with any Law, or other pronouncements of Governmental Authorities constituting an Action, order or consent decree of any Governmental Authority or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or a Party, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursements and expense of counsel, expert and consulting fees, fees of third party administrators, and costs related thereto or to the investigation or defense thereof.

     “ Loss ” means any claim, demand, complaint, damage, loss, Liability, cost or expense, including fees and expenses of counsel, whether or not arising out of, relating to or in connection with any Action.

     “ Mixed Accounts ” has the meaning assigned to such term in Section 2.02(g)(ii).

     “ Mixed Contract ” has the meaning assigned to such term in Section 2.02(g)(i).

     “ Newspaper Holdco ” has the meaning assigned to such term in the Preamble hereto.

     “ Newspaper Holdco Assets ” means, without duplication:

     (i) all of the outstanding shares of all classes of capital stock of Newspaper Holdco Subsidiaries owned (either of record or beneficially) by Newspaper Holdco, as of the Effective Time;

     (ii) all of the Assets included on the unaudited interim consolidated balance sheet of Newspaper Holdco, including the notes thereto, as of September 30, 2007, as set forth in the Information Statement (the “ Balance Sheet ”), to the extent such Assets would have been included as Assets on a consolidated balance sheet of Newspaper Holdco, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of Assets included on the Balance Sheet;

     (iii) all other Assets that are of a nature or type that would have resulted in such Assets being included as Assets on a consolidated balance sheet of Newspaper Holdco, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of Assets included on the Balance Sheet;

     (iv) the Assets expressly contributed, assigned, transferred, conveyed or delivered to Newspaper Holdco Group pursuant to this Agreement or the Ancillary Agreements;

     (v) the contract rights, licenses, Trade Secrets, know-how, and any other rights and Intellectual Property, and any other rights, claims or properties (including any and all rights as an insured party under any Belo insurance policy), in each case of Newspaper Holdco Group and as of the Effective Time;

     (vi) the assets, operations, personnel and related activities connected with the “Belo Interactive Media” and “Belo Technology” organizations; and

     (vii) all other Assets that are held by Newspaper Holdco Group and that are used or held primarily for use in or necessary to the operation of the Newspaper Holdco Business.

     “ Newspaper Holdco Business ” means the business and operations conducted by the Newspaper Holdco Group from time to time, whether prior to, at or after the Effective Time, including the business and operations conducted by the Newspaper Holdco Group as more fully described in the Information Statement.

     “ Newspaper Holdco Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Newspaper Holdco Group ” means Newspaper Holdco and each of its Subsidiaries and Affiliates, and any corporation or entity that may become part of such Group from time to time, other than the Belo Group.

     “ Newspaper Holdco Indemnified Parties ” has the meaning assigned to such term in Section 4.03.

     “ Newspaper Holdco Liabilities ” means, without duplication:

     (i) all outstanding Liabilities included on the Balance Sheet, to the extent such Liabilities would have been included on a consolidated balance sheet of Newspaper Holdco, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of Liabilities included on the Balance Sheet;

     (ii) all other Liabilities that are of a nature or type that would have resulted in such Liabilities being included as Liabilities on a consolidated balance sheet of Newspaper Holdco, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of Liabilities included on the Balance Sheet;

     (iii) all Liabilities expressly assumed by Newspaper Holdco Group pursuant to this Agreement or the Ancillary Agreements; and

     (iv) all Liabilities to the extent relating to, arising out of or resulting from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, at or after the Effective Time, in each case to the extent such Liabilities relate to, arise out of or result from any Newspaper Holdco Asset or the Newspaper Holdco Business, except for any Liability relating to the Circulation Litigation, which Belo and Newspaper Holdco shall share equally in accordance with the provisions of Section 5.06;

provided, however, that such term shall not include Belo’s 8% Senior Notes Due November 1, 2008, 6-3/4% Senior Notes Due May 30, 2013, 7-3/4% Senior Debentures Due June 1, 2027, 7-1/4% Senior Debentures Due September 15, 2027, or the Amended and Restated Five-Year Competitive Advance and Revolving Credit Facility Agreement with JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc., Banc of America Securities LLC, Bank of America, N.A. and other lenders, all of which shall remain Liabilities of Belo.

     “ NYSE ” means the New York Stock Exchange, Inc.

     “ Parties ” has the meaning assigned to such term in the Preamble hereto.

     " Patents ” has the meaning assigned to such term in the definition of Intellectual Property.

     “ Person ” means any natural person, corporation, general or limited partnership, limited liability company or partnership, joint stock company, joint venture, association, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and any Governmental Authority.

      “Preferred Share Purchase Rights” means the Series A Junior Participating Preferred Stock Purchase Rights entitling the registered holder thereof to purchase from Newspaper Holdco one two-hundredth of a share of Newspaper Holdco Series A Junior Participating Preferred Stock, $.01 par value, at an exercise price of $80 per one two-hundredth of a share, subject to adjustment.

     “ Recapitalization ” has the meaning assigned to such term in Section 2.01(a).

     “ Record Date ” means the close of business on January 25, 2008, which is the date determined by the Board of Directors of Belo as the record date for determining shareholders of Belo entitled to receive shares of Newspaper Holdco Common Stock pursuant to the Distribution.

     “ Registration Statement ” means the Registration Statement on Form 10 of Newspaper Holdco (which includes the Information Statement) relating to the registration under the Exchange Act of Newspaper Holdco Common Stock, including all amendments or supplements thereto.

     “ Related Claims ” means a claim or claims against a Belo insurance policy or reserve made by each of Belo and/or its insured parties, on the one hand, or Newspaper Holdco and/or its insured parties, on the other hand, filed in connection with Losses suffered by each of Belo (and/or its insured parties) and Newspaper Holdco (and/or its insured parties) arising out of the same underlying transactions or events.

     “ SEC ” means the United States Securities and Exchange Commission.

     “ Separation ” has the meaning assigned to such term in the Recitals hereto.

     “ Series A Belo Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Series A Newspaper Holdco Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Series B Belo Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Series B Newspaper Holdco Common Stock ” has the meaning assigned to such term in the Recitals hereto.

     “ Services Agreement ” means the services agreement to be entered into by and between Belo and Newspaper Holdco, substantially in the form filed as an exhibit to the Registration Statement, with such changes as may be agreed to by the Parties.

     “ Shared Director, Officer or Employee ” has the meaning assigned to such term in Section 2.02(h).

      “Software” has the meaning assigned to such term in the definition of Intellectual Property.

     “ SOX ” means the Sarbanes-Oxley Act of 2002, as amended from time to time.

     “ Subsidiary ” means, with respect to any Person, any other Person of which a Person (either alone or through or together with any other Subsidiary of such Person) owns, directly or indirectly, a majority of the stock or other equity interests the holders of which are generally

entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

     “ Tax Matters Agreement ” means the tax matters agreement to be entered into by and between Belo and Newspaper Holdco, substantially in the form filed as an exhibit to the Registration Statement, with such changes as may be agreed to by the Parties.

     “ Third-Party Claim ” has the meaning assigned to such term in Section 4.05(a).

     " Trademarks ” has the meaning assigned to such term in the definition of Intellectual Property.

     " Trade Secrets ” has the meaning assigned to such term in the definition of Intellectual Property.

     “ Unrelated Claims ” means a claim or claims against a Belo insurance policy or reserve made by each of Belo and/or its insured parties, on the one hand, or Newspaper Holdco and/or its insured parties, on the other hand, filed in connection with Losses suffered by each of Belo (and/or its insured parties) and Newspaper Holdco (and/or its insured parties) arising out of unrelated and separate transactions or events.

     Section 1.02. General Interpretive Principles . (a) Words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender, in each case, as the context requires, (b) the words “hereof,” “herein,” “hereunder,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, and references to Article, Section, paragraph, exhibit and schedule are references to the Articles, Sections, paragraphs, exhibits and schedules to this Agreement unless otherwise specified, (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified, and (d) any reference to any federal, state, local or non-U.S. statute or Law shall be deemed to also refer to all rules and regulations promulgated thereunder, unless the context otherwise requires. Unless the context requires otherwise, references in this Agreement to “Belo” shall also be deemed to refer to the applicable member of the Belo Group and to “Newspaper Holdco” shall also be deemed to refer to the applicable member of the Newspaper Holdco Group.

ARTICLE II

THE RECAPITALIZATION AND SEPARATION

     Section 2.01. Recapitalization and Other Transactions . As of the Record Date, the outstanding capital stock of Newspaper Holdco consists of 1,000 shares of common stock (the “ Initial Newspaper Holdco Capital Stock ”), all of which are held by Belo Holdings, Inc. On or prior to the Distribution Date, and subject to satisfaction or waiver of the conditions set forth in Section 2.03, the Initial Newspaper Holdco Capital Stock shall be recapitalized, through a number of transactions among Belo, Belo Holdings, Inc. and Newspaper Holdco (the “ Recapitalization ”), such that the number of shares of Series A Newspaper Holdco Common Stock and Series B Newspaper Holdco Common Stock issued and outstanding immediately prior

to the Effective Time shall be in an amount calculated on the basis of the following: (i) .20 shares of Series A Newspaper Holdco Common Stock, including the Preferred Share Purchase Rights attached thereto, for each share of Series A Belo Common Stock issued and outstanding immediately prior to the Distribution, and (ii) .20 shares of Series B Newspaper Holdco Common Stock, including the Preferred Share Purchase Rights attached thereto, for each share of Series B Belo Common Stock issued and outstanding immediately prior to the Distribution. Immediately prior to the Distribution, such shares of Newspaper Holdco Common Stock, including the Preferred Share Purchase Rights attached thereto, will be owned by Belo and will constitute all of the issued and outstanding capital stock, and Preferred Share Purchase Rights, of Newspaper Holdco.

     Section 2.02. The Separation and Related Transactions . (a) (i) The Parties acknowledge that the Separation, subject to the terms and conditions hereof and of the Ancillary Agreements, will result in (A) Newspaper Holdco directly or indirectly operating the Newspaper Holdco Group and the Newspaper Holdco Business, continuing to own the Newspaper Holdco Assets and retaining and continuing to be liable for the Newspaper Holdco Liabilities and (B) Belo directly or indirectly operating the Belo Group and the Belo Business, continuing to own the Belo Assets and retaining and continuing to be liable for the Belo Liabilities.

     (ii) Pursuant to the Separation, Newspaper Holdco, or a member of the Newspaper Holdco Group, shall remain and be the sole owner, and shall have exclusive right, title and interest in and to, all Newspaper Holdco Assets. Concurrently therewith, Newspaper Holdco shall remain and be solely liable for and shall faithfully perform, fulfill and discharge fully in due course all of the Newspaper Holdco Liabilities in accordance with their respective terms. Pursuant to the Separation, Belo, or a member of the Belo Group, shall remain and be the sole owner, and shall have exclusive right, title and interest in and to, all Belo Assets. Concurrently therewith, Belo shall remain and be solely liable for and shall faithfully perform, fulfill and discharge fully in due course all of the Belo Liabilities in accordance with their respective terms. From and after the Effective Time, Newspaper Holdco or a member of the Newspaper Holdco Group shall be solely responsible for all Newspaper Holdco Liabilities and Belo or a member of the Belo Group shall be solely responsible for all Belo Liabilities, regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to, on or subsequent to the Effective Time, regardless of where or against whom such Liabilities are asserted or determined (including any Liabilities arising out of claims made by Belo’s or Newspaper Holdco’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Belo Group or the Newspaper Holdco Group, as the case may be) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Belo Group or the Newspaper Holdco Group or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates, as the case may be. Notwithstanding anything herein to the contrary, this Section 2.02(a)(ii) shall not apply to any Assets or Liabilities contributed, assigned, transferred, conveyed, delivered and/or assumed under any Ancillary Agreement, which Assets and Liabilities shall be governed by the terms thereof, nor the Circulation Litigation, which shall be governed by Section 5.06.

     (iii) Subject to any Ancillary Agreement and to the extent that prior to the Effective Time, (A) Belo owns or is in possession of any Newspaper Holdco Asset or Newspaper Holdco

owns or is in possession of any Belo Asset or (B) Belo is liable to any third party for any Newspaper Holdco Liability or Newspaper Holdco is liable to any third party for any Belo Liability, Belo and Newspaper Holdco shall, and shall cause the respective members of their Groups to, cooperate and use their respective commercially reasonable efforts to obtain the necessary Consents to, and shall, contribute, assign, transfer, convey and/or deliver any Belo Asset or Newspaper Holdco Asset, as the case may be, and/or assume any Belo Liability or Newspaper Holdco Liability, as the case may be, such that, on or prior to the Effective Time, Newspaper Holdco or a member of the Newspaper Holdco Group owns and is in possession of the Newspaper Holdco Assets and is solely liable for the Newspaper Holdco Liabilities and Belo or a member of the Belo Group owns and is in possession of the Belo Assets and is solely liable for the Belo Liabilities.

     (b) Delayed Transfer of Assets and/or Liabilities . To the extent that any contribution, assignment, transfer, conveyance, delivery or assumption required pursuant to this Section 2.02 shall not have been consummated as of the Effective Time, whether by its terms or by operation of Law (any such Asset and/or Liability, a “ Delayed Transfer Asset and/or Liability ”) and subject to any Ancillary Agreement: (i) Belo and Newspaper Holdco thereafter shall, and shall cause the members of their respective Groups to, use commercially reasonable efforts and cooperate to effect such contribution, assignment, transfer, conveyance, delivery or assumption as promptly following the Effective Time as shall be practicable; (ii) Belo shall thereafter, with respect to any such Newspaper Holdco Asset, use commercially reasonable efforts, with the costs of Belo related thereto to be promptly reimbursed by Newspaper Holdco, to hold such Newspaper Holdco Asset in trust for the use and benefit of Newspaper Holdco and, with respect to any such Newspaper Holdco Liability, retain such Newspaper Holdco Liability for the account of Newspaper Holdco; and (iii) Newspaper Holdco shall thereafter, with respect to any such Belo Asset, use commercially reasonable efforts, with the costs of Newspaper Holdco related thereto to be promptly reimbursed by Belo, to hold such Belo Asset in trust for the use and benefit of Belo and, with respect to any such Belo Liability, to retain such Belo Liability for the account of Belo; in each case in order to place each Party, insofar as is reasonably possible, in the same position as would have existed had such Delayed Transfer Asset and/or Liability been contributed, assigned, transferred, conveyed, delivered or assumed as contemplated hereby (it being understood that neither Belo (with respect to any Newspaper Holdco Asset or Newspaper Holdco Liability) nor Newspaper Holdco (with respect to any Belo Asset or Belo Liability) shall be required to take any action pursuant to this clause that would, or could reasonably be expected to, result in any financial obligation to it or any restriction on its business or operations, except as may be required in any Ancillary Agreement). To the extent that Newspaper Holdco is provided the use or benefit of any Newspaper Holdco Asset or has any Newspaper Holdco Liability held for its account pursuant to this Section 2.02(b), Newspaper Holdco shall perform, for the benefit of Belo and any third Person, the obligations of Belo thereunder or in connection therewith, or as may be directed by Belo and if Newspaper Holdco shall fail to perform to the extent required herein, Newspaper Holdco shall hold Belo harmless and indemnify Belo therefor. To the extent that Belo is provided the use or benefit of any Belo Asset or has any Belo Liability held for its account pursuant to this Section 2.02(b), Belo shall perform, for the benefit of Newspaper Holdco and any third Person, the obligations of Newspaper Holdco thereunder or in connection therewith, or as may be directed by Newspaper Holdco and if Belo shall fail to perform to the extent required herein, Belo shall hold Newspaper Holdco harmless and indemnify Newspaper Holdco therefor. Each Party shall, and/or shall cause members of its Group to, as and when any

such Delayed Transfer Asset and/or Liability becomes contributable, assignable, transferable, conveyable, deliverable or assumable by such Party, effect such contribution, assignment, transfer, conveyance, delivery or assumption, as applicable, as promptly as practicable thereafter.

     (c)  Assignment of Certain Agreements . Subject to the Ancillary Agreements and to Section 2.02(g) hereof and if required under the circumstances, (i) Belo shall assign to Newspaper Holdco (or its Subsidiaries) all of its right, title and interest under the agreements comprising Newspaper Holdco Assets, and (ii) Newspaper Holdco shall assign to Belo (or its Subsidiaries) all of its right, title and interest under the agreements comprising Belo Assets, and each Party shall execute and deliver any and all instruments of substitution and such other instruments or agreements as shall be necessary in connection with the discharge of the other Party from its respective obligations with respect to such agreements; provided, however, that no Party shall be required to assign any contract or any claim, right or benefit arising thereunder or resulting therefrom if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach or other contravention thereof or in any way adversely affect the rights of Belo or Newspaper Holdco thereunder. With respect to any contract or any claim, right or benefit arising thereunder or resulting therefrom, Belo or Newspaper Holdco, as the case may be, will use its commercially reasonable efforts to obtain the Consent of the other parties to any such contract for the assignment thereof to Newspaper Holdco or Belo, as the case may be. If such Consent is not obtained, or if an attempted assignment thereof would be ineffective or would materially adversely affect the rights of Belo or Newspaper Holdco, as the case may be, thereunder so that Newspaper Holdco or Belo, as the case may be, would not in fact receive all such rights, Belo and Newspaper Holdco will cooperate in a mutually agreeable arrangement under which Newspaper Holdco or Belo, as the case may be, would obtain substantially the same economic benefits that would be obtained under an assignment thereof and assume the obligations thereunder in accordance with this Agreement, including subcontracting, sublicensing or subleasing to Newspaper Holdco or Belo, as the case may be, or under which Belo or Newspaper Holdco, as the case may be, would enforce for the benefit of Newspaper Holdco or Belo, as the case may be, with Newspaper Holdco or Belo, as the case may be, assuming Belo’s or Newspaper Holdco’s, as the case may be, obligations, and any and all rights of Belo, or Newspaper Holdco, as the case may be, against a third party thereto.

     (d)  Termination of Certain Agreements . Subject to Section 2.02(e) and if required under the circumstances, all contracts, licenses, agreements, commitments or other arrangements, formal or informal, between any member of the Belo Group, on the one hand, and any member of the Newspaper Holdco Group, on the other hand, in existence on or prior to the Effective Time, shall be automatically settled, cancelled or terminated by the Parties at the Effective Time, except (i) for (A) this Agreement and (B) each Ancillary Agreement (including each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups), (ii) for any contracts, licenses, agreements, commitments or other arrangements to which any Person is a party in addition to either Party or any member of either Group, or (iii) as otherwise agreed to in good faith by the Parties in writing on or after the date hereof. Except as expressly provided in Section 2.02(e), from and after the Effective Time, no member of either Group shall have any rights or obligations under any such settled, cancelled or terminated contract, license, agreement, commitment or arrangement with any member of the other Group.

     (e)  Settlement of Inter-Group Indebtedness . Each of Belo and/or any member of the Belo Group, on the one hand, and Newspaper Holdco and/or any member of the Newspaper Holdco Group, on the other hand, will contribute to the capital of the other Party, as the case may be, all Inter-Group Indebtedness, including any accounts receivable or promissory notes, owned by the contributing Party, or assign the same in lieu of such contribution, on or prior to the Effective Time, except as otherwise agreed to in good faith by the Parties in writing on or after the date hereof.

     (f)  Guarantee Obligations . (i) Except as otherwise may be provided in any Ancillary Agreement, Belo and Newspaper Holdco shall cooperate, and shall cause their respective Groups to cooperate, to terminate, or to cause a member of the Belo Group to be substituted in all respects for any member of the Newspaper Holdco Group in respect of, all obligations of such member of the Newspaper Holdco Group under any Belo Liability for which such member of the Newspaper Holdco Group may be liable, as guarantor, original tenant, primary obligor or otherwise. If such termination or substitution is not effected by the Effective Time, (A) Belo shall indemnify and hold harmless the Newspaper Holdco Indemnified Party for any Liability arising from or relating thereto and (B) without the prior written consent of Newspaper Holdco, from and after the Effective Time, Belo shall not, and shall not permit any member of the Belo Group or any of its Affiliates to, amend, renew or extend the term of, increase its obligations under, or transfer to a third Person, any loan, lease, contract or other obligation for which any member of the Newspaper Holdco Group is or may be liable, unless all obligations of the Newspaper Holdco Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to Newspaper Holdco; provided , that the limitations in clause (B) shall not apply in the event that a member of the Belo Group obtains a letter of credit from a financial institution reasonably acceptable to Newspaper Holdco and for the benefit of any member of the Newspaper Holdco Group with respect to such obligation of the Newspaper Holdco Group.

     (ii) Except as otherwise may be provided in any Ancillary Agreement, Belo and Newspaper Holdco shall cooperate, and shall cause their respective Groups to cooperate, to terminate, or to cause a member of the Newspaper Holdco Group to be substituted in all respects for any member of the Belo Group in respect of, all obligations of such member of the Belo Group under any Newspaper Holdco Liability for which such member of the Belo Group may be liable, as guarantor, original tenant, primary obligor or otherwise. If such termination or substitution is not effected by the Effective Time, (A) Newspaper Holdco shall indemnify and hold harmless the Belo Indemnified Party for any Liability arising from or relating thereto and (B) without the prior written consent of Belo, from and after the Effective Time, Newspaper Holdco shall not, and shall not permit any member of the Newspaper Holdco Group to, amend, renew or extend the term of, increase its obligations under, or transfer to a third Person, any loan, lease, contract or other obligation for which any member of the Belo Group is or may be liable, unless all obligations of the Belo Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to Belo; provided , that the limitations in clause (B) shall not apply in the event that a member of the Newspaper Holdco Group obtains a letter of credit from a financial institution reasonably acceptable to Belo and for the benefit of any member of the Belo Group with respect to such obligation of the Belo Group.

     (g)  Mixed Contracts; Mixed Accounts . (i) Unless the Parties agree in writing otherwise or as otherwise may be provided in any Ancillary Agreement, any agreement to which any member of the Belo Group or the Newspaper Holdco Group is a party prior to the Effective Time that inures to the benefit or burden of both of the Belo Business and the Newspaper Holdco Business (a “ Mixed Contract ”) shall be assigned in part to Newspaper Holdco or one of its Subsidiaries, and/or to Belo or one of its Subsidiaries, as the case may be, if so assignable, prior to or as of the Effective Time, such that each Party or its respective Subsidiaries shall be entitled to the rights and benefits thereof and shall assume the related portion of any obligations thereunder and any Liabilities inuring to their respective Businesses; provided , however , that in no event shall either Party be required to assign any Mixed Contract in its entirety. If any Mixed Contract cannot be so partially assigned, Belo and Newspaper Holdco shall, and shall cause each of their respective Subsidiaries to, take such other reasonable and permissible actions to cause: (A) the Assets associated with that portion of each Mixed Contract that relates to the Newspaper Holdco Business to be enjoyed by Newspaper Holdco or a Newspaper Holdco Subsidiary; (B) the Liabilities associated with that portion of each Mixed Contract that relates to the Newspaper Holdco Business to be borne by Newspaper Holdco or a Newspaper Holdco Subsidiary; (C) the Assets associated with that portion of each Mixed Contract that relates to the Belo Business to be enjoyed by Belo or a Belo Subsidiary; and (D) the Liabilities associated with that portion of each Mixed Contract that relates to the Belo Business to be borne by Belo or a Belo Subsidiary; provided , however , that the arrangements described in clauses (A), (B), (C) and (D) shall terminate on the termination of the applicable Mixed Contract.

     (ii) Except as may otherwise be agreed in writing by the Parties or as otherwise may be provided in any Ancillary Agreement, neither Party shall seek to assign any accounts receivable or accounts payable relating to both the Belo Business and the Newspaper Holdco Business (“ Mixed Accounts ”). Belo and Newspaper Holdco shall, and shall cause each of their respective Subsidiaries to, take such other reasonable and permissible actions to cause: (A) the Assets associated with that portion of each Mixed Account that relates to the Belo Business to be enjoyed solely by Belo or a Belo Subsidiary; (B) the Liabilities associated with that portion of each Mixed Account that relates to the Belo Business to be borne solely by Belo or a Belo Subsidiary; (C) the Assets associated with that portion of each Mixed Account that relates to the Newspaper Holdco Business to be enjoyed solely by Newspaper Holdco or a Newspaper Holdco Subsidiary; and (D) the Liabilities associated with that portion of