TORONTO DOMINION (TEXAS), INC.,

as Syndication Agent,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Documentation Agent,

and

VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS PARTY HERETO,
as Lenders

WACHOVIA SECURITIES, INC.,
as Sole Lead Arranger and Book Runner

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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

          This FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 23, 2002 (as amended, supplemented or otherwise modified from time to time, this “Agreement”), is entered into among HOLLINGER INTERNATIONAL PUBLISHING INC., a Delaware corporation (the “Company”), TELEGRAPH GROUP LIMITED, a limited liability company incorporated under the laws of England and Wales (“Telegraph”), FIRST DT HOLDINGS LIMITED, a limited liability company incorporated under the laws of England and Wales (“FDTH”), the undersigned financial institutions and other Persons, together with their respective successors and assigns (collectively the “Lenders” and each a “Lender”), WACHOVIA BANK, N.A. (“Wachovia Bank”), as administrative agent, issuing bank and security trustee for the Lenders, and WACHOVIA SECURITIES, INC. (“Wachovia Securities”), as sole lead arranger and book runner (in such capacity, the “Sole Lead Arranger”), TORONTO DOMINION (TEXAS), INC., as Syndication Agent, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent.

RECITALS

          WHEREAS, the Company, Telegraph, certain other subsidiaries of the Company, Toronto-Dominion (Texas), Inc. as Administrative Agent (in such capacity, as security trustee, or in any similar agency capacity specified in the Existing Credit Agreement (as defined below) and the other loan documents related thereto “Original Administrative Agent”), The Toronto-Dominion Bank as Issuing Bank (in such capacity, the “Original Issuing Bank”) and the Original Lenders (as defined below) entered into that certain Fourth Amended and Restated Credit Agreement dated as of April 30, 1999 (as amended or modified and in effect immediately prior to the Amendment Effective Date, the “Existing Credit Agreement”), whereby certain lenders party thereto (the “Original Lenders”) agreed to make certain credit extensions, including revolving loans, term loans and the issuance of letters of credit;

          WHEREAS, the Company has requested the Lenders to amend and restate the Existing Credit Agreement on the terms and conditions set forth in this Agreement, to set forth, among other things, the terms and conditions under which the Lenders hereafter will make credit extensions to certain of the Borrowers and to re-allocate all credit extensions from the Original Lenders to the Lenders in accordance with the terms hereof; it being the intention of the Borrowers, the Lenders and the Administrative Agent that this Agreement and the Loan Documents executed in connection herewith shall not effect the novation of the obligations of any Borrower under the Existing Credit Agreement but be merely a restatement and, where applicable, an amendment of and substitution for the terms governing such obligations hereafter;

          WHEREAS, the Existing Credit Extensions outstanding immediately prior to the Amendment Effective Date pursuant to the Existing Credit Agreement shall be deemed to be issued and outstanding hereunder for all purposes hereof and of the Loan Documents after giving effect to the Amendment Effective Date and shall thereafter be governed by the terms and conditions of this Agreement; and

          WHEREAS, the Credit Extensions are and shall be secured by the Collateral Documents and are and shall be guaranteed pursuant to the Guaranties (in each case as and to the extent set forth therein);

          NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,

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the Existing Credit Agreement is hereby amended and restated in its entirety to read, and the parties hereto hereby agree, in each case effective as of the Amendment Effective Date, as follows:

          SECTION 1 Definitions.

          When used herein (including in the Preamble and the Recitals) the following terms shall have the following meanings (such definitions to be applicable to both the singular and plural forms of such terms):

          Acquisition means (a) any acquisition or merger by the Company or any Restricted Subsidiary of or with any other Person which owns or operates a Newspaper Business, which acquisition or merger has been approved and recommended in writing by the Board of Directors of the Person to be acquired or, if such Board approval is not required or practicable, which merger or acquisition otherwise has been made and consummated without any hostile or antagonistic measures, which Person shall then become consolidated with the Company or any such Restricted Subsidiary in accordance with GAAP, or (b) any acquisition by the Company or any Restricted Subsidiary of the assets of any Newspaper Business which acquisition has been approved and recommended in writing by the Board of Directors of the business whose assets are being acquired or, if such Board approval is not practicable, which acquisition otherwise has been made and approved without any hostile or antagonistic measures.

          Acquisition Debt means any Debt of the Company or any Restricted Subsidiary to any Person other than the Company or any Restricted Subsidiary (a) at any time or from time to time incurred, created or assumed in connection with any Acquisition or (b) existing at the time any Person (including an Unrestricted Subsidiary) becomes a Restricted Subsidiary but excluding in case of clauses (a) and (b) any Debt of the Borrowers to the Administrative Agent and the Lenders, or any of them, under this Agreement or under any other Loan Document.

          Administrative Agent means Wachovia Bank in its capacity as administrative agent and security trustee for the Lenders hereunder, any sub-agents which Wachovia Bank may appoint from time to time under any Facility and any successor thereto in such capacity.

          Affected Lender means any Lender that has given notice to the Company (which has not been rescinded) of (a) any obligation by an Obligor to pay any amount pursuant to Section 7.6 or 8.1 or (b) the occurrence of any circumstances of the nature described in Section 8.2 or 8.3.

          Affected Loan — see Section 8.3.

          Affiliate means, with respect to any specified Person, (a) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (b) any other Person that owns, directly or indirectly, 10% or more of such Person’s equity ownership or Voting Stock or any officer or director of any such Person or other Person or with respect to any natural Person, any Person having a relationship with such Person by blood, marriage or adoption not more remote than first cousin. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

          Agreement — see the Preamble.

          Alternate Base Rate means, at any time, the greater of (a) the Federal Funds Rate plus 0.50% and (b) the U.S. Base Rate.

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          Alternate Currencies means with (a) respect to Loans, Sterling and Euros, and (b) with respect to Letters of Credit, Sterling or Canadian Dollars.

          Amendment Effective Date — see Section 11.1.

          APHI means American Publishing Holdings Inc., a Delaware corporation.

          Applicable Commitment Fee Rate means 0.500% per annum.

          Applicable Margin means (a) with respect to Revolving Loans and Term A Loans, (i) in the case of Eurocurrency Loans the applicable rate set forth beneath “Eurocurrency Rate” on the Pricing Grid; provided, however, that regardless of the applicable rate set forth beneath “Eurocurrency Rate” on the Pricing Grid, the Applicable Margin at any time prior to the six month anniversary of the Amendment Effective Date will not be less than 3.00% and (ii) in the case of Floating Rate Loans, the applicable rate set forth beneath “Base Rate” on the Pricing Grid, provided, however, that regardless of the applicable rate set forth beneath “Base Rate” on the Pricing Grid, the Applicable Margin at any time prior to the six month anniversary of the Amendment Effective Date will not be less than 2.00%, (b) with respect to Term B Loans, (i) in the case of Eurocurrency Loans, 3.50% and (ii) in the case of Floating Rate Loans, 2.50%, as such rates may be adjusted pursuant to Section 3.1(f) and (c) with respect to Incremental Loans, (i) in the case of Eurocurrency Loans, the applicable rate set forth beneath “Eurocurrency Rate” on the Pricing Grid as amended by the applicable Supplement and (ii) in the case of Floating Rate Loans, the applicable rate set forth beneath “Base Rate” on the Pricing Grid as amended by the applicable Supplement. The Applicable Margin shall change on the third Business Day after the date the Administrative Agent receives a Compliance Certificate pursuant to Section 10.1.3 showing a change in the Total Leverage Ratio.

          Applicable Proceeds Amount means (a) in the case of Net Cash Proceeds of Asset Sales, 100% of such Net Cash Proceeds, (b) in the case of Debt Proceeds, 100% of such Debt Proceeds and (c) in the case of Net Cash Proceeds of Casualty Events, 100% of such Casualty Proceeds.

          Asset Reduction Date — see Section 6.1.2.

          Asset Sale means (a) any sale, lease, transfer or other disposition (including by way of merger or consolidation or Asset Swap) by the Company or any Restricted Subsidiary of any asset (including the sale of the Capital Stock of any Restricted Subsidiary) outside the ordinary course of business to a Person other than the Company or a Restricted Subsidiary Obligor, or (b) any sale or assignment with or without recourse of accounts receivable of the Company or any Restricted Subsidiary to a Person other than the Company or a Restricted Subsidiary Obligor. For purposes of this definition, the term “Asset Sale” shall not include any transfer of property and assets (i) having a market value of less than $1,000,000 (it being understood that if the market value of the properties or assets being transferred exceeds $1,000,000, the entire value and not just the portion in excess of $1,000,000 shall be deemed to have been the subject of an Asset Sale), (ii) which are obsolete (in the case of equipment) to the Company’s and such Restricted Subsidiaries’ businesses, or (iii) which occurred prior to the Amendment Effective Date.

          Asset Swap means the exchange of the assets of any Newspaper Business owned by the Company or any Restricted Subsidiary (“Traded Newspaper Assets”) as an entirety or substantially as an entirety for all or substantially all of the assets of another Newspaper Business (“Traded-For Newspaper Assets”) owned by the Person (or an Affiliate of the Person) to whom such Traded Newspaper Assets shall be transferred in such exchange.

          Assignment Agreement — see Section 15.9.1.

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          Board of Directors means the board of directors or equivalent body of a Person or any duly authorized committee of such board or body.

          Borrower means each of the Company, Telegraph, FDTH and each Incremental Borrower (referred to collectively as the “Borrowers”).

          Business Day means any day on which commercial banks are open for commercial banking business in Charlotte, North Carolina and New York, New York and, in the case of a Business Day which relates to a Eurocurrency Loan, on which dealings in Dollars and Alternate Currencies are carried on in the London interbank market in London, England.

          Canadian Dollar and Cdn$ mean the lawful currency of Canada.

          Capital Expenditures means all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of the Company and its Restricted Subsidiaries, but excluding (a) Investments permitted by Section 10.10 and (b) expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed from Net Cash Proceeds of Casualty Events.

          Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

          Capital Stock of any Person means any and all shares, interests, participations or other equivalents (however designated) of such Person’s equity interests.

          Cash Equivalent Investment means, at any time:

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          Casualty Event means (a) any loss of or damage to assets of the Company or any Restricted Subsidiary due to fire, flood, explosion, earthquake, terrorist activity or other disaster or act of God and (b) the taking of assets of the Company or any Restricted Subsidiary by seizure, compulsory purchase, eminent domain or condemnation. For purposes of this definition, the term “ Casualty Event” shall not include any Casualty Event with respect to property and assets having a market value of less than $1,000,000 (it being understood that if the market value of the properties or assets lost, damaged or taken exceeds $1,000,000, the entire value and not just the portion in excess of $1,000,000 shall be deemed to have been the subject of a Casualty Event).

          Casualty Reduction Date — see Section 6.1.2.

          Change in Control means the occurrence of any of the following after the Amendment Effective Date:

          (a)  there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any successor schedule, form or report) pursuant to the Exchange Act, disclosing that any person (for purposes of this definition, as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision to either of the foregoing), other than any person consisting solely of Lord Black (or his heirs, executors or legal representatives) and his Affiliates, has become the beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of Voting Stock representing 50% or more of the total voting power attached to all Voting Stock of Hollinger Inc. or Hollinger International then outstanding; provided, however, that a person shall not be deemed to be the beneficial owner of, or to own beneficially, (i) any securities tendered pursuant to a tender or exchange offer made by or on behalf of such person or any of such person’s Affiliates until such tendered securities are accepted for purchase or exchange thereunder, or (ii) any securities if such beneficial ownership (A) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation made pursuant to applicable law and (B) is not also then reportable on Schedule 13D (or any successor schedule) under the Exchange Act;

          (b)  there is a report filed or required to be filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as the term “offeror” is defined in Section 89(1) of Securities Act (Ontario) for the purpose of Section 101 of such Securities Act or any successor provision of the foregoing) other than any person consisting solely of Lord Black (or his heirs, executors or legal representatives) and his Affiliates, has acquired beneficial ownership (within the meaning of the Securities Act (Ontario)) of, or the power to exercise control or direction over, or securities convertible into, any voting or equity shares of Hollinger Inc. that together with such offeror’s securities (as the term “offeror’s securities” is defined in Section 89(1) of the Securities Act (Ontario) or any successor provision thereto in relation to the voting or equity shares of Hollinger Inc.) would constitute Voting Stock of Hollinger Inc. representing 50% or more of the total voting power attached to all Voting Stock of Hollinger Inc. then outstanding;

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          (c)  Hollinger International shall cease to own, directly or indirectly, 100% of the Capital Stock of any Borrower, other than the Company Preference Shares;

          (d)  there is consummated a consolidation (involving a business combination) or merger of Hollinger International, (i) in which Hollinger International is not the continuing or surviving corporation or (ii) pursuant to which any Voting Stock of Hollinger International would be reclassified, changed or converted into or exchanged for cash, securities or other property, other than (in each case) a consolidation or merger of Hollinger International in which the holders of the Voting Stock of Hollinger International immediately prior to the consolidation or merger have, directly or indirectly, 50% or more of the Voting Stock of the continuing or surviving corporation immediately after such transaction;

          (e)  Lord Black (or his heirs, executors and legal representatives) and his Affiliates cease to beneficially own and control the voting of, directly or indirectly, Voting Stock of Hollinger International representing a greater percentage of the total voting power attached to the Voting Stock of Hollinger International than the percentage beneficially owned and controlled, directly or indirectly, by any other single shareholder of Hollinger International together with its Affiliates;

          (f)  during any period of 12 consecutive months, a majority of the members of the Board of Directors or other equivalent governing body of Hollinger International or any Borrower shall cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or

          (g)  any “Change in Control” or “Change of Control”, as defined in the documentation for the New High Yield Notes.

          Code means the Internal Revenue Code of 1986, as amended.

          Collateral means, collectively, all of the property and assets that are from time to time subject to the Collateral Documents.

          Collateral Document means each Security Agreement, each Pledge Agreement, each Subsidiary Note, each Subsidiary Security Agreement, and any other document executed from time to time pursuant to which a Lien is granted in favor of the Administrative Agent to secure the obligations of any Borrower under the Loan Documents or the obligations of any Obligor under any Loan Document to which it is party, including any documents executed pursuant to Section 10.18 or 10.27.

          Company — see the Preamble.

          Company Pledge Agreement means the Fourth Amended and Restated Company Pledge Agreement dated as of the Amendment Effective Date among the Company, certain of its Restricted Subsidiaries and the Administrative Agent and each other Pledge Agreement substantially in the form of Exhibit D-2, as such Company Pledge Agreements may be amended, supplemented or otherwise modified from time to time.

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          Company Preference Shares means shares of preferred stock of the Company issued to an Affiliate of the Company, provided that such shares do not constitute Voting Stock.

          Company Security Agreement means the Third Amended and Restated Security Agreement dated as of the Amendment Effective Date among the Company, certain of its U.S. Subsidiaries and the Administrative Agent substantially in the form of Exhibit B-1, as amended, supplemented or otherwise modified from time to time.

          Compliance Certificate — see Section 10.1.3.

          Computation Date means, at any time, the last day of the Computation Period most recently ended.

          Computation Period means, for each Fiscal Quarter, the four consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter.

          Consolidated Net Income (Loss) of the Financial Group means, for any period, the consolidated net income (or loss (and treating loss as a negative number) of the Financial Group for such period as determined in accordance with GAAP, adjusted by excluding, without duplication, to the extent included in calculating such Consolidated Net Income (Loss), (a) all extraordinary gains and losses, (b) the portion of consolidated net income (or loss) of the Financial Group allocable to Investments in unconsolidated Persons (other than Unrestricted Subsidiaries) to the extent that cash dividends or distributions have not actually been received by a member of the Financial Group, (c) the portion of consolidated net income (or loss) of the Financial Group allocable to Unrestricted Subsidiaries (or to payments received therefrom), (d) any gain or loss realized upon the termination of any employee pension benefit plan, (e) aggregate gains and losses (less all fees and expenses relating thereto) in respect of dispositions of assets (including, without limitation, sales of shares of Unrestricted Subsidiaries or unconsolidated Persons and non-cash writeoffs of assets (provided that there are no continuing cash expenses related to such write-offs)) other than in the ordinary course of business, (f) the net income of any Restricted Subsidiary to the extent that the declaration of dividends or similar distributions by such Restricted Subsidiary of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulations applicable to such Restricted Subsidiary or its stockholders, (g) any gain from the collection of proceeds of life insurance policies, (h) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Debt of the Financial Group, (i) aggregate gains or losses relating to foreign currency transactions or translations or (j) redundancy costs relating to the elimination of jobs. In calculating the Consolidated Net Income (Loss) of the Financial Group, the Consolidated Net Income (Loss) of Restricted Subsidiaries that are not Wholly Owned Restricted Subsidiaries will be included only to the extent of the Financial Group’s common equity interest in such Restricted Subsidiaries, as provided in the definition of Operating Cash Flow.

          Contributed Cash Flow means on any date of any assets sold or proposed to be sold (or deemed disposed of) in any Asset Sale, or of any assets consisting of Traded Newspaper Assets or Traded-For Newspaper Assets included or proposed to be included in any Asset Swap, the Operating Cash Flow generated by such assets for the period of four Fiscal Quarters ended on or (if such date shall not be the last day of a Fiscal Quarter) most recently prior to such date.

          Credit Extension means making any Loan, issuing any Letter of Credit or extending the stated expiry date of any existing Letter of Credit, as the case may be.

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          CST Real Estate means the real estate, including land, building and fixtures, located at 401 North Wabash Avenue, Chicago, Illinois, where the Company currently maintains its headquarters, and all improvements thereon.

          CST Real Estate Transactions means the sale or other disposition (other than to an Affiliate), including contribution to a new joint venture entity, of all or any portion of the interest of the Company or a Restricted Subsidiary in the CST Real Estate.

          Debt means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (or other obligations to former owners of acquired businesses), excluding any trade payables and other accrued current liabilities arising in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit issued under letter of credit facilities, acceptance facilities or other similar facilities and in connection with any agreement to purchase, redeem, exchange, convert or otherwise acquire for value any Capital Stock of such Person, or any warrants, rights or options to acquire such Capital Stock, now or hereafter outstanding, (b) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business, (d) all obligations under Hedging Agreements of such Person related to the settlement or termination of those agreements as of the date of determination, (e) all Capital Lease obligations of such Person, (f) all Debt referred to in clauses (a) through (e) above of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien, upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt, (g) all Guarantee Obligations of such Person, (h) all Redeemable Capital Stock and (without duplication) all Preferred Stock of Restricted Subsidiaries other than Redeemable Capital Stock or Preferred Stock held by Restricted Subsidiary Obligors or the Company, valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends, (i) any other obligation, liability or instrument which is treated as indebtedness under GAAP, (j) all Debt of any partnership of which such Person is a general partner, and (k) any amendment, supplement, modification, deferral, renewal, extension, refunding or refinancing of any Debt of the types referred to in clauses (a) through (j) above. For purposes hereof, the “maximum fixed repurchase price” of any Redeemable Capital Stock or Preferred Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Capital Stock or Preferred Stock as if such Redeemable Capital Stock or Preferred Stock were purchased on any date on which Debt shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Redeemable Capital Stock or Preferred Stock, such fair market value to be determined in good faith by the Board of Directors of such Person.

          Debt Proceeds means the aggregate Net Cash Proceeds from the issuance of any Debt by the Company or any Restricted Subsidiary of the Company other than Debt issued pursuant to Sections 10.7(a) through (i), Sections 10.7(k) through (m), and Section 10.7(j); provided, however, that the Net Cash Proceeds from the issuance of any Debt issued pursuant to Section 10.7(j) shall only be excluded from this definition to the extent that such Net Cash Proceeds are concurrently utilized in connection with an Acquisition otherwise permitted hereunder (which Acquisition shall be consummated concurrently with the issuance of such Debt).

          Determination Date — see Section 2.13.

          Dollar and the sign “$” mean lawful money of the United States of America.

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          Dollar Equivalent means, (a) with respect to Dollars or an amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in an Alternate Currency, at any time for the determination thereof, the equivalent amount of Dollars obtained by converting such amount denominated in an Alternate Currency involved in such computation into Dollars at the spot rate as quoted by the Administrative Agent for the purchase of Dollars with such Alternate Currency through the FX Trading Office at approximately 12:00 p.m. (New York City time) two Business Days prior to the date on which such computation is made.

          Dormant Subsidiaries means Restricted Subsidiaries which are inactive or have minimal assets as shown on Schedule 9.8 or certified by the Company to the Administrative Agent.

          DTH means DT Holdings Limited, a limited liability company incorporated under the laws of England and Wales.

          Eligible Assignee means (a) a commercial bank organized under the laws of the United States or any State thereof, and having a combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000; (c) a Person that is engaged in the business of purchasing or investing in bank loans and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, (iii) a Person of which a Lender is a Subsidiary; or (iv) administered or managed by the same investment adviser as a Lender or other Person described in clause (c)(i), (ii) or (iii); and (d) finance companies, mutual funds, pension funds, insurance companies, and other investors or financial institutions (except the Borrower or an Affiliate of the Borrower) engaged in the making of or investing in bank loans, it being understood that this definition shall not be construed to require any assignee of Loans or Revolving Commitments hereunder to be exempt from U.K. Recipient Taxes.

          Employee Benefit Plan means any employee benefit plan, pension plan or welfare plan, other than a “multiemployer plan” as such term is defined in Section 3(37) of ERISA, which is maintained or contributed to for the benefit of the employees of the Company or any of its Subsidiaries which, under applicable law, (a) is required to be funded through a trust or similar funding vehicle or (b) creates or could result in a Lien on any property of the Company or any of its Subsidiaries.

          Environmental Laws means any national, federal, State or local law, statute, ordinance, regulation, rule, order, consent decree, permit, settlement agreement, judicial or administrative decision, injunction or requirement of any governmental authority, including the European Community, which relates to or otherwise imposes liability or standards of conduct concerning discharges, releases or threatened releases of noises, odors or any Regulated Materials into ambient air, ground or surface water or land, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of Regulated Materials, including the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, any so-called “Superfund” or “Superlien” law, the Toxic Substances Control Act, the Environmental Protection Act (Canada), the Transportation of Dangerous Goods Act (Canada), the Hazardous Products Act (Canada), the Environmental Protection Act (Ontario), the Water Resources Act (Ontario), the Gasoline Handling Act (Ontario), any similar law in effect in Israel or the United Kingdom, and any other applicable federal, State, provincial, or local statute, law, ordinance, code, rule, regulation, order, decree or other officially-promulgated and legally binding policy regulating, relating to, or imposing liability or standards of conduct (including permit requirements and emission or effluent restrictions) concerning any Regulated Materials, as now or at any time hereafter in effect applicable to the Company or any of its Restricted Subsidiaries.

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          ERISA means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections.

          ERISA Affiliate means any corporation, trade or business that is, along with the Company or any of its Subsidiaries, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Section 414 of the Code or Section 4001 of ERISA.

          Euro means the single currency of Participating Member States of the European Union.

          Eurocurrency Loan means any Tranche A Loan, Tranche B Loan, Term A Loan, Term B Loan or Incremental Loan which bears interest at a rate determined by reference to the Eurocurrency Rate (Reserve Adjusted).

          Eurocurrency Rate means, with respect to any Eurocurrency Loan for any Interest Period,

          (a) with respect to Eurocurrency Loans denominated in Dollars, the rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time acting reasonably for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the Eurocurrency Rate with respect to such Eurocurrency Loans for such Interest Period shall be the rate of interest (rounded, if necessary, to the next higher 1/16 of 1%) of the rate per annum at which Dollar deposits in immediately available funds are offered by the Administrative Agent’s Lending Office in the relevant interbank market at or about 11:00 a.m. (London time), two Business Days prior to the first day of such Interest Period, in the approximate amount of the relevant Eurocurrency Loan and having a maturity approximately equal to such Interest Period; and

          (b) with respect to Eurocurrency Loans denominated in an Alternate Currency, the rate appearing on Page 3750 (or 3740 in the case of Canadian Dollars) of the Telerate Service (or on any successor or substitute pages of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such pages of such service, as determined by the Administrative Agent from time to time acting reasonably for purposes of providing quotations of interest rates applicable to deposits in such Alternate Currency in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for deposits in such Alternate Currency (as applicable) with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the Eurocurrency Rate with respect to such Eurocurrency Loan for such Interest Period shall be the rate of interest (rounded, if necessary, to the next higher 1/16 of 1%) equal to the rate at which deposits in the relevant Alternate Currency in immediately available funds are offered by the Administrative Agent’s Lending Office in the London interbank market at or about 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period in the approximate amount of the relevant Eurocurrency Loan and having a maturity approximately equal to such Interest Period.

          Eurocurrency Rate (Reserve Adjusted) means, relative to any Loan to be made, continued or maintained as, or converted into, a Eurocurrency Rate Loan, for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) determined pursuant to the following formula:

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          Eurocurrency Reserve Percentage means, with respect to any Eurocurrency Loan denominated in the applicable currency for any Interest Period, a percentage (expressed as a decimal) equal to the daily average during such Interest Period of the percentage in effect on each day of such Interest Period, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) or any similar governmental authority relevant to Alternate Currencies, for determining the aggregate maximum reserve requirements applicable to “Eurocurrency Liabilities” pursuant to Regulation D of the Board of Governors of the Federal Reserve System or any other then applicable regulation of such Board of Governors or other similar governmental authority which prescribes reserve requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D or other relevant reserve requirements applicable to Loans in Alternate Currencies.

          Event of Default means any of the events described in Section 12.1.

          Excess Cash Flow means, as of the last day of any Computation Period, the sum of (a) Operating Cash Flow minus (b) Fixed Charges, in each case with respect to such Computation Period.

          Excess Cash Flow Payment means, with respect to any Fiscal Year, a percentage of Excess Cash Flow for such Fiscal Year determined in accordance with the following table:

          Excess Cash Flow Basket — see Section 10.9(b).

          Exchange Act means the Securities Exchange Act of 1934, as amended.

          Excluded Taxes — see definition of Taxes.

          Existing Credit Agreement — see the Recitals.

          Existing Credit Extensions means the loans and letters of credit outstanding under the Existing Credit Agreement immediately prior to the Amendment Effective Date.

          Facility means each of (a) the Tranche A Commitments and the Tranche A Credit Extensions made thereunder (the “Tranche A Facility”), (b) the Tranche B Commitments and the Tranche B Credit Extensions made thereunder (the “Tranche B Facility”), (c) the Commitments of the Term A Lenders to make Term A Loans and the Term A Loans made thereunder (the “Term A Loan Facility”), (d) the commitments of the Term B Lenders to make Term B Loans and the Term B Loans made thereunder (the “Term B Loan Facility”), and (e) the commitments of the Incremental Lenders under each tranche of Loans established pursuant to Section 3 to make Incremental Loans and the Incremental Loans made thereunder (each tranche an “Incremental Facility”).

          FDTH — see the Preamble.

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          Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 2:00 p.m. (New York City time) for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

          Fee Letter means the Fee Letter dated November 7, 2002 among Wachovia Securities, Wachovia Bank, and the Company, as the same may be amended or otherwise modified from time to time by the parties thereto.

          Financial Group means the Borrowers and their Restricted Subsidiaries.

          Fiscal Quarter means a fiscal quarter of a Fiscal Year.

          Fiscal Year means the fiscal year of the Company and its Restricted Subsidiaries, which period shall be the 12-month period ending on December 31 of each year. References to a Fiscal Year with a number corresponding to any calendar year (e.g., “Fiscal Year 2002”) refer to the Fiscal Year ending on December 31 of such calendar year.

          Fixed Charge Coverage Ratio means, as of the last day of any Computation Period, the ratio of (a) Operating Cash Flow of the Financial Group for such Computation Period to (b) the sum, without duplication, of (i) Fixed Charges of the Financial Group plus (ii) Restricted Payments of the Financial Group, in each case for the same period.

          Fixed Charges means, with respect to any Computation Period, the sum, without duplication, of:

          provided that during the first year following the Amendment Effective Date, Fixed Charges shall be determined as follows:

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          provided, further, however, that in each case, Interest Expense for the first Fiscal Quarter after the Amendment Effective Date for which financial reports are available, but prior to the end of the second Fiscal Quarter for which financial reports are available, shall be calculated for such Fiscal Quarter on an annualized quarterly basis (based on the number of days elapsed in a 90-day Fiscal Quarter) using Interest Expense for the period from the Amendment Effective Date through the end of such Fiscal Quarter, excluding Interest Expense on the 1996 Senior Subordinated Notes and the 1997 Senior Subordinated Notes (to the extent such interest expense is otherwise included in this definition).

          Floating Rate Loan means any Tranche A Loan, Term A Loan, Term B Loan or Incremental Loan which bears interest at or by reference to the Alternate Base Rate.

          FX Trading Office means the foreign exchange trading center of the Administrative Agent located in London, England, or whatever other office the Administrative Agent may from time to time designate acting reasonably.

          GAAP means generally accepted accounting principles in the United States, consistently applied, as in effect from time to time.

          Group — see Section 2.4.

          Guarantee Obligation means any agreement, undertaking or arrangement by which any Person guarantees or endorses (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person’s obligation under any Guarantee Obligation shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed or endorsed thereby.

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          Guaranteed Obligations — see Section 14.1.

          Guaranties means the Hollinger International Guaranty, each U.S. Subsidiary Guaranty, and each U.K. Subsidiary Guaranty.

          Guarantor — see Section 14.1.

          HCNLP means Hollinger Canadian Newspapers, Limited Partnership, a limited partnership established under the laws of the Province of Ontario, and any Subsidiary thereof. HCNLP is a limited partnership formed under the Limited Partnerships Act (Ontario), a limited partner of which is only liable for any of its liabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capital and the limited partner’s pro rata share of any undistributed income.

          Hedging Agreement means any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.

          Hollinger Inc. means Hollinger Inc., a corporation continued under the laws of Canada.

          Hollinger International means Hollinger International Inc., a Delaware corporation.

          Hollinger International Guaranty means the Fourth Amended and Restated Hollinger International Guaranty dated as of the Amendment Effective Date substantially in the form of Exhibit C-1 executed by Hollinger International in favor of the Lenders and the Administrative Agent, as further amended, supplemented or otherwise modified from time to time.

          Hollinger International Pledge Agreement means the Amended and Restated Pledge Agreement dated as of the Amendment Effective Date substantially in the form of Exhibit D-1 between Hollinger International and the Administrative Agent, as amended, supplemented or otherwise modified and supplemented from time to time.

          HUKH means Hollinger UK Holdings Limited, a limited liability company incorporated under the laws of England and Wales.

          including shall not be limiting and means “including without limitation”.

          Incremental Borrower — see Section 3.1.

          Incremental Facility — see Section 3.1.

          Incremental Lender means, at any time, any Lender which has a commitment to make an Incremental Loan under Section 3 or which is owed an Incremental Loan; the initial Incremental Lenders shall be set forth on a Schedule to the applicable Supplement for such Incremental Loans.

          Incremental Loan — see Section 3.

          Incremental Loan Offer — see Section 6.2.5(d).

          Incremental Percentage means, with respect to any tranche of Incremental Loans, relative to any Incremental Lender at any time, the percentage which such Incremental Lender’s then outstanding,

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aggregate principal amount of all Incremental Loans is of the aggregate principal amount of Incremental Loans of all Incremental Lenders of such tranche.

          Incremental Reduction Percentage means the percentage which (a) the sum of the aggregate outstanding principal amount of all Incremental Loans is of (b) the sum of (i) the aggregate outstanding principal amount of all Term A Loans, plus (ii) the aggregate outstanding principal amount of all Term B Loans, plus (iii) the aggregate outstanding principal amount of all Incremental Loans.

          Indemnified Liability — see Section 15.14.

          Indemnified Party — see Section 15.14.

          Individual Outstanding Revolving Amount means, with respect to any Revolving Lender, the sum of (a) the Dollar Equivalent of the aggregate principal amount of such Revolving Lender’s Revolving Loans outstanding on such date, plus (b) the Dollar Equivalent of the aggregate amount of such Revolving Lender’s participation in the Stated Amount of outstanding Letters of Credit.

          Individual Revolving Commitment means, with respect to any Revolving Lender, the amount of such Revolving Lender’s Revolving Percentage times the Total Revolving Commitments, it being understood that each Revolving Lender’s Individual Revolving Commitment shall be the total amount such Revolving Lender is obligated to extend to the Company and Telegraph under the Tranche A Commitments and the Tranche B Commitments, notwithstanding that the Tranche A Commitments and the Tranche B Commitments of such Revolving Lender may exceed its Individual Revolving Commitment. The initial amount of the Individual Revolving Commitment of each Revolving Lender is set forth in Schedule 1.1.

          Intellectual Property means all patents and patent applications, trade and service marks and trade and service mark applications (and all goodwill associated with such applications), all brand and trade names, all copyrights and rights in the nature of copyright, all design rights, all registered designs and applications for registered designs, all trade secrets, know-how and all other intellectual property rights owned by members of the Financial Group throughout the world or the interests of any member of the Financial Group in any of the foregoing, and all rights under any agreements entered into by or for the benefit of any member of the Financial Group relating to the use or exploitation of any such rights.

          Intercompany Debt means all Debt owed by the Company and/or any Restricted Subsidiary to Hollinger Inc., Hollinger International or any other Affiliate other than the Company or any Restricted Subsidiary.

          Interest Coverage Ratio means, as of the last day of any Computation Period, the ratio of (a) Operating Cash Flow for such Computation Period to (b) total Interest Expense for such Computation Period;

provided, that during the first year following the Amendment Effective Date, for the purpose of calculation of the Interest Coverage Ratio during such period, Interest Expense shall be determined as follows:

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          Interest Expense means the net sum of consolidated interest expense, payments with respect to any guaranty of or dividends on Redeemable Capital Stock or Preferred Stock (to the extent actually made during such period), and commitment fees and letter of credit fees of the Company and its Restricted Subsidiaries for such period accrued on Total Funded Debt minus interest income, in each case, of the Borrowers and their Restricted Subsidiaries (except for interest income earned on Trustee Proceeds).

          Interest Period — see Section 5.3.

          Investment means, with respect to any Person, directly or indirectly:

     The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property.

          Israeli Subsidiary means each of JPEH, JPPL and Palestine Post, and any Subsidiaries thereof.

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          Issuing Bank means Wachovia Bank in its capacity as issuer of Letters of Credit.

          JPEH means Jerusalem Post Employees Holding (1983) Ltd., an Israeli corporation.

          JPPL means Jerusalem Post Publications Limited, an Israeli corporation.

          Lender — see the Preamble.

          Lending Office means (a) with respect to any Lender, the office or offices of such Lender which shall be making or maintaining the Tranche A Loans, Tranche B Loans, Term A Loans, Term B Loans or Incremental Loans that are Eurocurrency Loans of such Lender hereunder or such other office or offices at which such Lender determines its Eurocurrency Rate and (b) with respect to the Administrative Agent, the office or offices of the Administrative Agent which shall receive payments or disburse borrowings in Dollars and Alternate Currencies as the Administrative Agent designates to the Lenders and the Company from time to time. A Lending Office may be either a domestic or foreign office.

          Letter of Credit means a standby letter of credit having terms and provisions which are permitted by this Agreement and which otherwise are reasonably satisfactory to the Issuing Bank.

          Letter of Credit Application means a letter of credit application in the form then used by the Issuing Bank for standby letters of credit (with appropriate adjustments to indicate that any letter of credit issued thereunder is to be issued pursuant to, and subject to the terms and conditions of, this Agreement).

          Lien means, when used with respect to any Person, any interest of any other Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

          Loan Documents means this Agreement, the Fee Letter, the Guaranties, the Letter of Credit Applications, the Subordination Agreements and the Collateral Documents.

          Loans means each of the Tranche A Loans, the Tranche B Loans, the Term A Loans, the Term B Loans and the Incremental Loans.

          Local Time means (a) with respect to Dollar Loans, New York City time, (b) with respect to Loans denominated in Sterling, London time and (c) with respect to Loans denominated in Euros, Brussels time.

          Management Fees means any management, consulting, non-competition, advisory or other similar fees or payments, or any interest thereon, or corporate expense reimbursements payable by the Company or any of its Restricted Subsidiaries to Hollinger Inc., Hollinger International or any other Affiliate other than the Company or any Restricted Subsidiary.

          Margin Stock means any “margin stock” as defined in any of Regulations T, U and X of the Board of Governors of the Federal Reserve System.

          Material Adverse Effect means a material adverse effect on (a) the condition (financial or otherwise), operations, business, prospects, properties or assets of (i) the Company and its U.S. Subsidiaries and the Israeli Subsidiaries, taken as a whole, (ii) FDTH and its Restricted Subsidiaries, taken as a whole, or (iii) the Company and the Restricted Subsidiaries, taken as a whole; or (b) the ability of the Company and the Restricted Subsidiary Obligors taken as a whole to timely and fully perform any

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of their payment or other material obligations under this Agreement or any other Loan Document to which they are a party.

          Moody’s means Moody’s Investors Service, Inc. or any successor rating agency.

          Multiemployer Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Company, any of its Subsidiaries, or any ERISA Affiliate, is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

          Negative Trade Differential means with respect to any Asset Swap the amount, if any, by which the Contributed Cash Flow of the Traded Newspaper Assets included in such Asset Swap (as determined in good faith by the Board of Directors of the Company) as of the date of such Asset Swap exceeds the Contributed Cash Flow of the Traded-For Newspaper Assets included in such Asset Swap (as so determined).

          Net Cash Proceeds means (a) with respect to any Asset Sale by any Person, the proceeds thereof in the form of cash or cash equivalents including payments of principal and interest in respect of deferred payment obligations and, with respect to the contribution of the CST Real Estate in connection with the CST Real Estate Transactions, any proceeds in excess of $35,000,000 received from the joint venture entity created in connection therewith when received in the form of, or stock or other assets when disposed of for, cash or cash equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary) net of (i) brokerage commissions and other reasonable fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale, provided, however, that in the event such taxes are not actually paid or any reserve therefor is reduced, the amount of such unpaid taxes or reserve reduction shall be deemed to be Net Cash Proceeds which are received on the date on which it is determined that such taxes will not be paid or such reserve is reduced, (iii) payments made to retire indebtedness where payment of such indebtedness is secured by the assets or properties the subject of such Asset Sale, (iv) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale, and (v) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any such Restricted Subsidiary, as the case may be, after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, (b) with respect to any issuance or sale of Capital Stock or options, warrants or rights to purchase Capital Stock, or debt securities or Capital Stock that have been converted into or exchanged for Capital Stock, the proceeds of such issuance or sale in the form of cash or cash equivalents, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed of for, cash or cash equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any of its Subsidiaries), net of attorneys’ fees, accountants’ fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof, (c) with respect to the issuance of Debt, the proceeds of such issuance net of attorneys’ fees, accountants’ fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such issuance and (d) with respect to any Casualty Event, the amount of insurance proceeds, condemnation awards or other recoveries (other than business interruption insurance) net of attorneys’ fees and other fees and expenses actually incurred in connection with the collection of such payments, in each case as reflected in a certificate from the Company delivered to the Administrative Agent.

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          Net Leverage Ratio means, as of any time, the ratio of (a) the sum of (i) Total Funded Debt as of such time minus (ii) the amount of cash (excluding any cash collateralizing Original Letters of Credit) held by the Borrowers and their Restricted Subsidiaries in excess of $5,000,000 as of such time to (b) Operating Cash Flow for the Computation Period most recently ended.

          New High Yield Notes — see Section 11.1.19.

          New Investments Basket — see Section 10.10(d).

          Newspaper Business means (a) the business of publishing and distributing (including distributing by electronic means) newspapers, magazines and other paid or free publications having national, regional, local or targeted markets, including publications having limited or no news or editorial content such as shoppers or other “total market coverage” publications and similar publications, (b) the ownership and operation of consumer e-commerce vehicles that complement the foregoing and (c) the ownership and operation of Investments permitted under Section 10.10.

          1996 Senior Subordinated Indenture means that certain Indenture dated as of February 1, 1996, as amended by First Supplemental Indenture dated February 27, 1997, and Second Supplemental Indenture dated March 4, 1999 between the Company and State Street Bank & Trust Company, as Trustee, relating to the 1996 Senior Subordinated Notes, as the same may hereafter be amended, amended and restated, supplemented or otherwise modified in accordance with the terms thereof and hereof and in effect.

          1996 Senior Subordinated Notes means the 9 1/4% Senior Subordinated Notes due February 1, 2006 of the Company issued under the 1996 Senior Subordinated Indenture.

          1997 Senior Indenture means that certain Senior Indenture dated as of March 15, 1997, as amended by First Supplemental Indenture dated as of March 4, 1999 and the Second Supplemental Indenture dated March 1, 2002 between the Company and State Street Bank & Trust Company, as Trustee, relating to the 1997 Senior Notes, as the same may hereafter be amended, amended and restated, supplemented or otherwise modified in accordance with the terms thereof and hereof and in effect.

          1997 Senior Notes means the 8 5/8% Senior Notes due March 15, 2005 of the Company issued under the 1997 Senior Indenture.

          1997 Senior Subordinated Indenture means that certain Senior Subordinated Indenture dated March 15, 1997, as amended by First Supplemental Indenture dated as of December 23, 1998 and Second Supplemental Indenture dated as of March 4, 1999 between the Company and State Street Bank & Trust Company, as Trustee, relating to the 1997 Senior Subordinated Notes, as the same may hereafter be amended, amended and restated, supplemented or otherwise modified in accordance with the terms thereof and hereof and in effect.

          1997 Senior Subordinated Notes means the 9 1/4% Senior Subordinated Notes due March 15, 2007 of the Company issued under the 1997 Senior Subordinated Indenture.

          Non-Wholly Owned Restricted Subsidiary means any Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary.

          Notice of Borrowing means a notice substantially in the form of Exhibit G-1 or such other form as may be acceptable to the Administrative Agent.

          Notice of Conversion/Continuation means a notice substantially in the form of Exhibit G-2 or such other form as may be acceptable to the Administrative Agent.

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          Obligations means all obligations of the Borrowers or any other Obligor under this Agreement and any other Loan Document.

          Obligor means each Borrower, Hollinger International and each other Person (other than the Administrative Agent, any Lender or the Issuing Bank) from time to time obligated under any Loan Document.

          Occupational Safety and Health Law means the Occupational Safety and Health Act of 1970 and any other federal, state, local or foreign statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning employee health and/or safety.

          Operating Cash Flow means, for any period, an amount equal to the Consolidated Net Income (Loss) of the Financial Group for such period, plus, to the extent deducted in calculating such Consolidated Net Income, (a) Interest Expense and other financing costs and expenses for such period, (b) depreciation and amortization (including, without limitation, amortized telemarketing center costs) for such period, (c) all taxes, whether or not deferred, in each case, expensed in such period, and (d) other non-cash expenses (other than any non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a pre-paid cash expense that was paid in a prior period) and all extraordinary and non-recurring expenses as determined in accordance with GAAP for such period.

          For purposes of calculating Operating Cash Flow for the four Fiscal Quarters most recently completed prior to any date on which an action is taken that requires a calculation of the Senior Secured Leverage Ratio, the Total Leverage Ratio and/or the Net Leverage Ratio, (a) any Person that is a Restricted Subsidiary on such date (or would become a Restricted Subsidiary in connection with the transaction that requires the determination of such ratio) shall be deemed to have been a Restricted Subsidiary at all times during such period, (b) any Person that is not a Restricted Subsidiary on such date (or would cease to be a Restricted Subsidiary in connection with the transaction that requires the determination of such ratio) shall be deemed not to have been a Restricted Subsidiary at any time during such period, (c) if any Borrower or any Restricted Subsidiary shall have in any manner acquired or disposed of any operating business during or subsequent to such period, such calculation shall be made on a pro forma basis on the assumption that such acquisition or disposition has been completed on the first day of such period and (d) in the case of a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, the determination of the percentage of the Operating Cash Flow of such Restricted Subsidiary that is to be included in the calculation of the Senior Secured Leverage Ratio, the Total Leverage Ratio and the Net Leverage Ratio shall be made on a pro forma basis on the assumption that the percentage of the Company’s common equity interest in such Restricted Subsidiary on the first day of such period was equivalent to its common equity interest on the date of the determination (it being understood, in the case of foregoing clause (c), that if such pro forma calculations have been made in accordance with Regulation S-X under the Exchange Act, such method of calculation (but not necessarily the adjustments) shall be presumed to be acceptable). For the purposes of this definition, the determination of the percentage of the Operating Cash Flow of a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary that is to be included in the calculation of Operating Cash Flow shall be made on a quarter by quarter basis based on the percentage of the Company’s common equity interest in such Restricted Subsidiary on the last day of each quarter during the relevant period (it being understood that, if such pro forma calculations for a quarter shall have been made in accordance with Regulation S-X under the Exchange Act, such method of calculation (but not necessarily the adjustments) shall be presumed to be acceptable).

          Option Tax Indemnity Agreement means the letter agreement dated May 31, 1996 between FDTH and West Ferry relating to tax indemnification in connection with the options proposals made pursuant to the Scheme.

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          Organic Document means, relative to any Person, its certificate of incorporation, its by-laws, its memorandum and articles of association, partnership agreement, operating agreement, share designations or similar organizational documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized shares of Capital Stock.

          Original Administrative Agent — see the Recitals.

          Original Issuing Bank — see the Recitals.

          Original Lenders — see the Recitals.

          Original Letters of Credit mean letters of credit issued by the Original Issuing Bank which are cash collateralized and are not part of the Facilities.

          Outside Payments — see the Section 10.9(b).

          Palestine Post means The Palestine Post Limited, an Israeli corporation.

          Paper Purchase & Management Limited means Paper Purchase & Management Limited, a limited liability company incorporated under the laws of England and Wales.

          Participant — see Section 15.10.

          Participating Member State means any member state of the European Community that adopts or has adopted the Euro as it lawful currency in accordance with legislation of the Community relating to Economic and Monetary Union.

          Payment Date — see Section 6.2.4(d).

          PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

          Pension Plan means (a) a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to title IV of ERISA (other than a Multiemployer Plan), and to which the Company, any Subsidiary, or any ERISA Affiliate may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA and (b) a “pension plan”, as such term is defined in the Pension Benefits Act (Ontario) or under other applicable pension laws, and to which the Company or any Subsidiary or any trade or business of any of them may have any actual, contingent or potential liability at any time during the preceding five years.

          Permitted Payments — see Section 10.9(c).

          Person means any natural person, corporation, partnership, limited liability company, trust, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

          Pledge Agreements means the Hollinger International Pledge Agreement, the Company Pledge Agreement, and each U.S. Pledge Agreement.

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          Preferred Stock means, with respect to any Person, any Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over the Capital Stock of any other class in such Person.

          Prepayment Premium — see Section 6.2.7(b).

          Pricing Grid means the Pricing Grid set forth on Schedule 1.2.

          Printing Joint Ventures means each of West Ferry (unless West Ferry has become a Wholly Owned Restricted Subsidiary), Trafford Park and Paper Purchase & Management Limited.

          Purchase Money Lien — see Section 10.8(d).

          Qualified Hedge Counterparty means any Person which, at the time the applicable Hedging Agreement was entered into, was Wachovia Bank, a Lender or an Affiliate of a Lender.

          Recipient Taxes — see Section 7.6(a).

          Redeemable Capital Stock means any Capital Stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or otherwise, is, or upon the happening of an event or passage of time would be, required to be redeemed prior to the latest Stated Maturity Date or is redeemable at the option of the holder thereof at any time prior to the latest Stated Maturity Date, or is convertible into or exchangeable for debt securities at any time prior to the latest Stated Maturity Date at the option of the holder thereof; provided, however, that Redeemable Capital Stock shall not include any Redeemable Capital Stock of the Company or any of its Restricted Subsidiaries so long as such shares are owned by the Company or a Restricted Subsidiary or by Hollinger International or one of its Affiliates (provided such shares are pledged to the Administrative Agent).

          Regulated Materials means any toxic substance, hazardous substance, hazardous material, hazardous chemical or hazardous waste defined or qualifying as such in (or for the purposes of) any Environmental Law, or any pollutant or contaminant, and shall include, but not be limited to, petroleum, including crude oil or any fraction thereof which is liquid at standard conditions of temperature or pressure (60 degrees Fahrenheit and 14.7 pounds per square inch absolute), any radioactive material, including, but not limited to, any source, special nuclear or by-product material as defined at 42 U.S.C. section 2011 et seq., as amended from time to time, polychlorinated biphenyls and asbestos in friable form or condition.

          Related Fund means, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

          Required Lenders means Lenders having an aggregate Voting Percentage of more than 50%.

          Required Revolving Lenders means Revolving Lenders holding more than 50% of the Revolving Commitments or, if such Revolving Commitments have expired or terminated, more than 50% of the Revolving Loans.

          Restricted Payments — see Section 10.9(a).

          Restricted Subsidiary means each Subsidiary of any Borrower, other than any Subsidiary designated from time to time by the Board of Directors of the applicable Borrower as an “Unrestricted

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Subsidiary” in accordance with Section 10.26 of this Agreement or which is otherwise an “Unrestricted Subsidiary” hereunder.

          Restricted Subsidiary Obligor means any Restricted Subsidiary which is a Borrower or Guarantor.

          Restricted Subsidiary Investments — see Section 10.9(b)(iv).

          Revolving Commitment Termination Date means the earliest of (a) September 30, 2008, and (b) such other date on which the Revolving Commitments shall terminate pursuant to Section 12.

          Revolving Commitments means the Tranche A Commitments and the Tranche B Commitments.

          Revolving Lender means, at any time, any Lender which then has a Revolving Commitment or is owed a Revolving Loan or has a participation in any Letter of Credit.

          Revolving Loan means each of the Tranche A Loans and the Tranche B Loans.

          Revolving Percentage means, relative to any Revolving Lender, the percentage which (a) the amount of such Revolving Lender’s Individual Revolving Commitment is of (b) the aggregate amount of the Total Revolving Commitments of all Revolving Lenders. The initial Revolving Percentage for each Revolving Lender is set forth opposite such Revolving Lender’s name on Schedule 1.1.

          Scheme means the acquisition in August, 1996 by FDTH of the publicly held shares of Telegraph not owned by FDTH or any of its Affiliates which was effected by way of a “Scheme of Arrangement” under Section 425 of the Companies Act of 1985.

          SEC means the Securities and Exchange Commission.

          Secured Obligations means, collectively, (a) the Obligations, and (b) any obligation of a Borrower under any Hedging Agreement with a Qualified Hedge Counterparty.

          Security Agreements means the Company Security Agreement and each U.K. Security Agreement.

          Security Trustee means Wachovia Bank, N.A. in its capacity as security trustee with respect to Loan Documents granting collateral security by the U.K. Obligors.

          Senior Secured Funded Debt means Total Funded Debt which constitutes secured Total Funded Debt (excluding in any event the New High Yield Notes and excluding in any event any other unsecured Total Funded Debt).

          Senior Secured Leverage Ratio means, as of any time, the ratio of (a) Senior Secured Funded Debt as of such time to (b) Operating Cash Flow for the most recently ended Computation Period.

          Sole Lead Arranger means Wachovia Securities.

          Standard & Poor’s means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc. or any successor rating agency.

          State means any state in the United States or the District of Columbia.

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          Stated Amount means, with respect to any Letter of Credit at any date of determination, the maximum aggregate amount available thereunder at any time during the then ensuing term of such Letter of Credit under any and all circumstances, plus the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.

          Stated Maturity Date means (a) in the case of Term A Loans, September 30, 2008, (b) in the case of Term B Loans, September 30, 2009, and (c) in the case of Incremental Loans, the date set forth in the applicable Supplement.

          STDS means Sun Times Distribution Systems, Inc., a Delaware corporation.

          Sterling and £ mean the lawful currency of the United Kingdom of Great Britain and Northern Ireland.

          Subordination Agreements means the Subsidiary Subordination Agreement, and any other subordination agreement which may be executed from time to time by the Company or any Restricted Subsidiary in favor of the Administrative Agent.

          Subsidiary means any Person, a majority of the Voting Stock, membership interests or other equity interests (in the case of Persons other than corporations) of which is at the time owned, directly or indirectly, by the Company and/or its other Subsidiaries. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Company; provided that none of HCNLP, West Ferry, Trafford Park, Paper Purchase & Management Limited, The Newspaper Licensing Agency Limited, Brand Movers Limited, Great West Newspaper Group Ltd., DTY Limited, ECO Log Environmental Risk Information Service Ltd. and Fundata Canada Inc. shall be deemed a Subsidiary of the Company for purposes of this Agreement unless and until such time as the Company directly or indirectly owns 100% of the Voting Stock of such Person.

          Subsidiary Notes means, collectively, any promissory note issued, now or in the future, by any Restricted Subsidiary of the Company in favor of the Company or another Restricted Subsidiary which is a Restricted Subsidiary Obligor each substantially in form and substance satisfactory to the Administrative Agent and any extensions, renewals or amendments of any of the foregoing.

          Subsidiary Security Agreements means, collectively, any security agreement or other security or collateral instrument or documents in form and substance approved by the Administrative Agent issued or given by any Restricted Subsidiary in favor of the Company or another Restricted Subsidiary which is a Restricted Subsidiary Obligor, as the case may be, to secure Debt of such Restricted Subsidiary under a Subsidiary Note.

          Subsidiary Subordination Agreement means the subordination agreement dated as of the Amendment Effective Date among certain Restricted Subsidiaries and the Administrative Agent, substantially in the form of Exhibit F, as amended, supplemented or otherwise modified from time to time.

          Supplement — see Section 3.3.

          Synthetic Lease means a lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, and (b) the lessee will be entitled to various benefits ordinarily available to owners (as opposed to lessees) of like property. Debt under a Synthetic Lease shall be an amount equal to the sum of (i) all rental obligations of such Person as lessee under Synthetic Leases which are attributable to

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principal and (ii) all payment obligations of such Person under Synthetic Leases assuming such Person exercises the option to purchase the leased property at the end of the lease term.

          TAHL means Telegraph Australian Holdings Limited, a company incorporated under the laws of England and Wales and domesticated in the United States.

          Tax Allocation Agreement means a tax allocation agreement substantially in the form of Exhibit G executed by the Company and its Restricted Subsidiaries incorporated in the United States, as amended, modified or supplemented from time to time.

          Tax Indemnity Agreements means, collectively, (a) the DT Holdings Limited Group Relief Agreement dated June 23, 1992 among DTH, FDTH and Telegraph, (b) the Deed of Indemnity dated June 23, 1992 entered into by Hollinger Inc., DTH and FDTH in favor of Telegraph, (c) the Agreement Relating to the Surrender of Advance Corporation Tax dated June 23, 1992 among DTH, FDTH and Telegraph and (d) the Option Tax Indemnity Agreement.

          Taxes and Tax, relative to any Person, means taxes, assessments or other governmental charges, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto imposed upon such Person, its income or any of its properties, franchises or assets (excluding, in the case of payments made to a Lender or the Administrative Agent, the following taxes (all of the following taxes being “Excluded Taxes”): (a) taxes imposed upon or measured by the overall net income of such Lender or the Administrative Agent (including franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of which such Lender or the Administrative Agent, as the case may be, is organized or any political subdivision thereof or by the jurisdiction in which such Lender’s or the Administrative Agent’s Lending Office or principal office is located or any political subdivision thereof, or (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above).

          Telegraph — see the Preamble.

          Term A Lender means, at any time, any Lender which has a commitment to make a Term A Loan under Section 2.1.3 or which is owed a Term A Loan; the initial Term A Lenders are set forth on Schedule 1.1 as those Lenders with an amount set forth across from their name under the heading “Term A Loan”.

          Term A Loans means the Term A Loans made pursuant to Section 2.1.3.

          Term A Percentage means, relative to any Term A Lender at any time, the percentage which such Term A Lender’s then outstanding, aggregate principal amount of all Term A Loans is of the aggregate principal amount of Term A Loans of all Term A Lenders. The initial Term A Percentage for each Term A Lender is set forth opposite such Term A Lender’s name on Schedule 1.1.

          Term A Reduction Percentage means the percentage which (a) the sum of the aggregate outstanding principal amount of Term A Loans is of (b) the sum of (i) the aggregate outstanding principal amount of all Term A Loans plus (ii) the aggregate outstanding principal amount of all Term B Loans plus (iii) the aggregate outstanding principal amount of all Incremental Loans.

          Term B Lender means, at any time, any Lender which has a commitment to make a Term B Loan under Section 2.1.4 or which is owed a Term B Loan; the initial Term B Lenders are set forth on Schedule 1.1 as those Lenders with an amount set forth across from their name under the heading “Term B Loan”.

          Term B Loan Offer — see Section 6.2.4(d).

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          Term B Loans means the Term B Loans made pursuant to Section 2.1.4.

          Term B Percentage means, relative to any Term B Lender at any time, the percentage which such Term B Lender’s then outstanding, aggregate principal amount of all Term B Loans is of the aggregate principal amount of Term B Loans of all Term B Lenders. The initial Term B Percentage for each Term B Lender is set forth opposite such Term B Lender’s name on Schedule 1.1.

          Term B Reduction Percentage means the percentage which (a) the sum of the aggregate outstanding principal amount of Term B Loans is of (b) the sum of (i) the aggregate outstanding principal amount of all Term A Loans plus (ii) the aggregate outstanding principal amount of all Term B Loans plus (iii) the aggregate outstanding principal amount of all Incremental Loans.

          Term Lenders means, collectively, the Term A Lenders and the Term B Lenders.

          Term Loan Reduction Amount means (a) with respect to Term A Loans, an amount equal to the Term A Reduction Percentage of the Applicable Proceeds Amount or Excess Cash Flow Payment, as the case may be, (b) with respect to Term B Loans, an amount equal to the Term B Reduction Percentage of the Applicable Proceeds Amount or Excess Cash Flow Payment, as the case may be and (c) with respect to Incremental Loans, the Incremental Reduction Percentage of the Applicable Proceeds Amount or Excess Cash Flow Payment, as the case may be.

          Term Loans means, collectively, the Term A Loans and the Term B Loans.

          Toronto Dominion means Toronto Dominion (Texas), Inc.

          Total Funded Debt means Debt of the Financial Group pursuant to clauses (a), (b), (d) (to the extent provided for in the last sentence of this definition), (e), (f), (g), (h), (i), (j), and (k) (to the extent it constitutes Debt described in the foregoing clauses) of the definition of Debt including Capital Leases, Synthetic Leases, guarantees, and the outstanding redeemable preference shares of any Restricted Subsidiary held by Persons other than the Company or the Restricted Subsidiaries minus (to the extent otherwise included in the aggregate Debt of the Financial Group) (x) Debt of the Company to Restricted Subsidiaries and Debt of Restricted Subsidiaries to the Company or to other Restricted Subsidiaries and (y) Original Letters of Credit. In the event the amount of net obligations of the Company and its Restricted Subsidiaries, if any, under Hedging Agreements (excluding Hedging Agreements with respect to the Loans) (determined on a mark-to-market basis) exceeds $10,000,000, the amount of such entire net obligations shall be included as Total Funded Debt.

          Total Leverage Ratio means, as of any time, the ratio of (a) Total Funded Debt as of such time to (b) Operating Cash Flow for the most recently ended Computation Period.

          Total Outstanding Revolving Amount means, on any date, the sum of (a) the Dollar Equivalent of the aggregate outstanding principal amount of all Revolving Loans plus (b) the Dollar Equivalent of the Stated Amount of all outstanding Letters of Credits as of such date.

          Total Return Equity Swap means the OTC Single Forward Share Purchase Transaction dated October 1, 1998, the Equity Forward Purchase Transaction dated September 30, 1998, and any other forward share purchase arrangements entered into by Hollinger International, together with any amendments, modifications, or extensions thereof.

          Total Revolving Commitments means $45,000,000, as reduced in accordance with Section 6 hereof.

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          Traded Newspaper Assets — see definition of “Asset Swap.”

          Traded-For Newspaper Assets — see definition of “Asset Swap.”

          Trafford Park means Trafford Park Printers Limited, a limited liability company incorporated under the laws of England and Wales.

          Tranche A Commitment means as to any Revolving Lender the commitment of such Revolving Lender to make Tranche A Loans to and to issue or participate in Tranche A Letters of Credit for the account of the Company pursuant to Section 2.1.1. The initial amount of the Tranche A Commitment of each Revolving Lender is set forth on Schedule 1.1.

          Tranche A Credit Extension means making any Tranche A Loan or issuing or extending the expiry date of any Tranche A Letter of Credit.

          Tranche A Letters of Credit — see Section 2.1.1.

          Tranche A Loans — see Section 2.1.1.

          Tranche A Outstanding Amount means, on any date, the sum of (a) the Dollar Equivalent of the aggregate outstanding principal amount of all Tranche A Loans plus (b) the Dollar Equivalent of the Stated Amount of all outstanding Tranche A Letters of Credit as of such date.

          Tranche B Commitment means as to any Revolving Lender the commitment of such Revolving Lender to make Tranche B Loans to and to issue or participate in Tranche B Letters of Credit for the account of Telegraph pursuant to Section 2.1.2. The initial amount of the Tranche B Commitment of each Revolving Lender is set forth on Schedule 1.1.

          Tranche B Credit Extension means making any Tranche B Loan or issuing or extending the expiry date of any Tranche B Letter of Credit.

          Tranche B Letters of Credit — see Section 2.1.2.

          Tranche B Loans — see Section 2.1.2.

          Tranche B Outstanding Amount means, on any date, the sum of (a) the Dollar Equivalent of the aggregate outstanding principal amount of all Tranche B Loans plus (b) the Dollar Equivalent of the Stated Amount of all outstanding Tranche B Letters of Credit as of such date.

          Treaty Lender — see Section 7.7.

          Trilon Financing means the loan agreement and related documentation dated September 30, 2002 between Hollinger International and Trilon International Inc., as amended or otherwise modified prior to the Amendment Effective Date.

          Trustee Proceeds means (a) the portion of the proceeds of Loans made on the Amendment Effective Date which are deposited by the Administrative Agent with the applicable Trustees on the Amendment Effective Date pursuant to Section 11.1.18, and (b) any other funds deposited with such applicable Trustees, in each case, pending their application as payment of the 1996 Senior Subordinated Notes and the 1997 Senior Subordinated Notes.

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          U.K. Obligor means any of HUKH, DTH, FDTH, Telegraph and each other U.K. Subsidiary which is an Obligor, but shall not include TAHL.

          U.K./Non U.S. Exemption Agreement — see Section 7.6.

          U.K. Security Agreement means any debenture substantially in the form of Exhibit B-2 (with such changes therein as are acceptable to the Administrative Agent) executed pursuant to this Agreement on the Amendment Effective Date (including each U.K. Security Agreement referred to in Section 11.1.7) or which may hereafter be executed from time to time by any Restricted Subsidiary, as such U.K. Security Agreements may be amended, supplemented or otherwise modified from time to time.

          U.K. Subsidiary means each Restricted Subsidiary incorporated under the laws of England and Wales.

          U.K. Subsidiary Guaranty means any guarantee substantially in the form of Exhibit C-3 (with such changes therein as are acceptable to the Administrative Agent) executed pursuant to this Agreement on the Amendment Effective Date (including each U.K. Subsidiary Guaranty dated the Amendment Effective Date referred to in Section 11.1.5) or which may hereafter be executed from time to time by any U.K. Subsidiary, as such U.K. Subsidiary Guarantees may be amended, supplemented, or otherwise modified from time to time.

          U.K./U.S. Exemption Agreement — see Section 7.6.

          Unmatured Event of Default means any event which if it continues uncured will, with lapse of time or notice or lapse of time and notice, constitute an Event of Default.

          Unrestricted Subsidiary means any Subsidiary of any Borrower, which is not a Restricted Subsidiary; provided, however, that a Person may not be designated as an Unrestricted Subsidiary unless (a) the creditors of such Person have no direct or indirect recourse (including recourse with respect to the payment of principal or interest on indebtedness of such Unrestricted Subsidiary) to the Borrowers or a Restricted Subsidiary and (b) a default by such Person on any of its indebtedness will not result in, or permit any holder of indebtedness of the Borrowers or a Restricted Subsidiary to declare, a default on such indebtedness of the Borrowers or a Restricted Subsidiary or cause the payment thereof to be accelerated or payable prior to its stated maturity. Any subsidiary of an Unrestricted Subsidiary, and any subsidiary of any Borrower organized under the laws of Canada or any province or territory thereof, and each of Hollinger Digital Inc. and each of its Subsidiaries shall be an Unrestricted Subsidiary.

          U.S. Base Rate means the rate per annum determined by the Administrative Agent to be the rate of interest announced by Wachovia Bank in Charlotte, North Carolina as its reference rate for the determination of interest rates for loans of varying maturities in Dollars to United States residents of varying degrees of creditworthiness and being quoted at such time by Wachovia Bank in Charlotte, North Carolina as its “prime rate” from time to time, changing when and as said rate changes, it being understood that such rate is not necessarily the lowest rate of interest provided to borrowers by the quoting institution.

          U.S. Exemption Agreement — see Section 7.6.

          U.S. Exemption Representation — see Section 7.6.

          U.S. Pledge Agreement means a pledge agreement substantially in the form of Exhibit D-3 (with such changes therein as are acceptable to the Administrative Agent) executed pursuant to this Agreement on the Amendment Effective Date (including each U.S. Pledge Agreement referred to in Section 11.1.6)

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or which may hereafter be executed from time to time with respect to the Capital Stock of any U.S. Subsidiary, as such U.S. Pledge Agreements may be amended, supplemented or otherwise modified from time to time.

          U.S. Subsidiary means any Restricted Subsidiary organized under the laws of any state in the United States of America or the District of Columbia.

          U.S. Subsidiary Guaranty means the Third Amended and Restated Guaranty dated as of the Amendment Effective Date executed by the U.S. Subsidiaries and TAHL in favor of the Lenders and the Administrative Agent substantially in the form of Exhibit C-2, as amended, supplemented or otherwise modified from time to time.

          Voting Percentage means, relative to any Lender at any time, the percentage which:

is of

     Each Lender’s initial Voting Percentage is set forth opposite such Lender’s name on Schedule 1.1.

          Voting Stock means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

          Wachovia Bank — see the Preamble.

          Wachovia Securities — see the Preamble.

          Welfare Plan means a “welfare plan”, as such term is defined in Section 3(1) of ERISA, other than a “multiemployer plan” as such term is defined in Section 3(37) of ERISA, or any other employee benefit plan or arrangement in respect of which or in connection with which a Lien may arise pertaining to any contribution obligation or other obligation thereunder as a matter of statute or by operation of law, other than a Pension Plan or a “multiemployer plan” as such term is defined in Section 3(37) of ERISA, to which the Company or any Subsidiary or any trade or business of any of them may have any actual, contingent or potential liability at any time during the preceding five years.

          West Ferry means West Ferry Printers Limited, a limited liability company incorporated under the laws of England and Wales.

          Wholly Owned Restricted Subsidiary means a Restricted Subsidiary, all the outstanding Capital Stock (other than directors’ qualifying shares) of which are owned by the Company or another Wholly Owned Restricted Subsidiary.

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          Withdrawal Liability has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

          SECTION 2  Commitments of the Lenders; Types of Loans; Letters of Credit; Borrowing Loan Accounts.

          2.1 Commitments.

          2.1.1 Tranche A Commitment. On and subject to the terms and conditions of this Agreement, (a) each of the Revolving Lenders, severally and for itself alone, agrees to make loans to the Company on a revolving basis (the “Tranche A Loans”) from time to time before the Revolving Commitment Termination Date in such Revolving Lender’s Revolving Percentage of such aggregate amounts as the Company may from time to time request from all Revolving Lenders under the aggregate Tranche A Commitments, provided that (i) the aggregate principal amount of all Tranche A Loans which all Revolving Lenders shall have outstanding at any one time shall not exceed an amount equal to (A) the aggregate amount of the Tranche A Commitments minus (B) the Stated Amount of all outstanding Tranche A Letters of Credit and (ii) the making of such Loans shall be subject to the limitation contained in Section 2.2(c); and (b) the Issuing Bank agrees to issue Letters of Credit at the request of and for the account of the Company (the “Tranche A Letters of Credit”), from time to time before the Revolving Commitment Termination Date and, as more fully set forth in Section 2.7, each Revolving Lender agrees to purchase a participation in each such Tranche A Letter of Credit, provided that (i) the aggregate Stated Amount of all Tranche A Letters of Credit shall not at any time exceed the lesser of (A) the Dollar Equivalent of $25,000,000 or (B) an amount equal to (x) the aggregate amount of the Tranche A Commitments minus (y) the aggregate principal amount of all outstanding Tranche A Loans and (ii) the issuance of such Letters of Credit shall be subject to the limitations contained in Section 2.2(e).

          2.1.2 Tranche B Commitment. On and subject to the terms and conditions of this Agreement, (a) each of the Revolving Lenders, severally and for itself alone, agrees to make loans to Telegraph on a revolving basis (the “Tranche B Loans”) from time to time before the Revolving Commitment Termination Date in such Revolving Lender’s Revolving Percentage of such aggregate amounts as Telegraph may from time to time request from all Revolving Lenders under the aggregate Tranche B Commitments, provided that (i) the aggregate principal amount of all Tranche B Loans which all Revolving Lenders shall have outstanding at any one time shall not exceed an amount equal to (A) the aggregate amount of the Tranche B Commitments minus (B) the Stated Amount of all outstanding Tranche B Letters of Credit and (ii) the making of such Loans shall be subject to the limitations contained in Section 2.2(c); and (b) the Issuing Bank agrees to issue Letters of Credit at the request and for the account of Telegraph (the “Tranche B Letters of Credit”) from time to time before the Revolving Commitment Termination Date and, as more fully set forth in Section 2.7, each Revolving Lender agrees to purchase a participation in each such Tranche B Letter of Credit, provided that (i) the aggregate Stated Amount of all Tranche B Letters of Credit shall not at any time exceed the lesser of (A) the Dollar Equivalent of $25,000,000 or (B) an amount equal to (x) the aggregate amount of all Tranche B Commitments minus (y) the aggregate principal amount of all outstanding Tranche B Loans and (ii) the issuance of such Letters of Credit shall be subject to the limitations contained in Section 2.2(e).

          2.1.3 Term A Loan Commitment. On and subject to the terms and conditions of this Agreement, each of the Term A Lenders, severally and for itself alone, agrees to make, on the Amendment Effective Date, a loan to FDTH equal to its Term A Percentage of the aggregate principal amount of Term A Loans requested by FDTH from all Term A Lenders on such date; provided that the aggregate Term A Loans requested shall not exceed $45,000,000.

          2.1.4 Term B Loan Commitment. On and subject to the terms and conditions of this Agreement, each of the Term B Lenders, severally and for itself alone, agrees to make, on the Amendment Effective Date, a loan to FDTH equal to its Term B Percentage of the aggregate principal

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amount of Term B Loans requested by FDTH from all Term B Lenders on such date; provided that the aggregate Term B Loans requested shall not exceed $220,000,000.

          2.2  Lenders Not Required To Make Credit Extensions. The Borrowers may not request, and no Revolving Lender will be required to make, any Credit Extension if, immediately after giving effect to such Credit Extension, and the application of the proceeds thereof to the extent applied to the repayment of Credit Extensions,

          2.3  Various Types of Loans.  (a)  Revolving Loans may be borrowed in Dollars, or Alternate Currencies. Each Revolving Loan denominated in Dollars shall be either a Floating Rate Loan or a Eurocurrency Loan (each a “type” of Loan), as the Company or Telegraph, as the case may be, shall specify in the related notice of borrowing or conversion pursuant to Section 2.4 or 2.5. Each Revolving Loan denominated in an Alternate Currency shall be a Eurocurrency Loan.

          (b)  Term A Loans and Term B Loans may be borrowed in Dollars. Each Term A Loan and Term B Loan may be divided into types which are either a Floating Rate Loan or a Eurocurrency Loan, as FDTH shall specify in the related notice of borrowing or conversion pursuant to Section 2.4 or 2.5.

          (c)  Incremental Loans may be borrowed in Dollars or Sterling as indicated in the applicable Supplement. Each Incremental Loan denominated in Dollars shall be either a Floating Rate Loan or a Eurocurrency Loan (each a “type” of Loan), as the applicable Borrower shall specify in the related notice of borrowing or conversion pursuant to Section 2.4 or 2.5. Each Incremental Loan denominated in Sterling shall be a Eurocurrency Loan.

          (d)  Floating Rate Loans and Eurocurrency Loans may be outstanding at the same time, provided that (i) not more than 12 different Interest Periods in the aggregate shall be in effect at any one time under the Facilities, (ii) the aggregate principal amount of each Eurocurrency Loan denominated in Dollars shall at the time of each borrowing and conversion be at least $1,000,000 and an integral multiple of $500,000, (iii) the aggregate principal amount of each Eurocurrency Loan denominated in an Alternate Currency shall at all times be at least the Dollar Equivalent of $1,000,000 and an integral multiple of $500,000 and (iv) the aggregate principal amount of each Floating Rate Loan shall at the time of each borrowing be at least the lesser of (A) $1,000,000 and an integral multiple of $500,000 and (B) the remaining amount of the applicable Facility. All borrowings, conversions and repayments of Loans, subject to Section 4, shall be effected so that, within each Facility, each Revolving Lender in the applicable Facility will have a pro rata share (according to its Revolving Percentage) of all types and Groups of Revolving Loans, each Term A Lender will have a pro rata share (according to its Term A Percentage) of all types and Groups of Term A Loans, each Term B Lender will have a pro rata share (according to its Term B Percentage) of all types and Groups of Term B Loans and each Incremental

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Lender will have a pro rata share (according to its Incremental Percentage) of all types and Groups of the applicable tranche of Incremental Loans.

          2.4  Borrowing Procedures. A Borrower shall give telephonic notice (promptly followed by an executed Notice of Borrowing) to the Administrative Agent of its proposed Loan not later than (a) in the case of a Floating Rate Loan, 12:00 p.m. (New York City time) at least one Business Day prior to the proposed date of such borrowing, and (b) in the case of a Eurocurrency Loan, 12:00 p.m. (New York City time) at least three Business Days prior to the proposed date of such borrowing. Eurocurrency Loans having the same Interest Period are sometimes called a “Group.” Each such notice shall be effective upon receipt by the Administrative Agent, shall be irrevocable, and shall specify the date, amount and type of borrowing and, in the case of a Eurocurrency Loan, the applicable currency and initial Interest Period therefor; provided, however, that anything in this Section 2.4 to the contrary notwithstanding, any Loans advanced on the Amendment Effective Date shall be advanced as Floating Rate Loans. Promptly upon receipt of such notice, the Administrative Agent shall advise each Lender thereof. Not later than 12:00 p.m. (New York City time) on the date of a proposed borrowing, each Lender shall provide the Administrative Agent (by fed wire) at the Administrative Agent’s designated Lending Office with immediately available funds in the applicable currency covering such Lender’s applicable percentage of such borrowing and, subject to the satisfaction of the conditions precedent set forth in Section 11 with respect to such borrowing, the Administrative Agent shall pay over the requested amount to the applicable Borrower on the requested borrowing date. Each borrowing shall be on a Business Day. Each borrowing denominated in Dollars shall be in an aggregate amount of at least $1,000,000 and an integral multiple of $500,000 and the aggregate principal amount of each Group of Eurocurrency Loans in an Alternate Currency shall at all times be the Dollar Equivalent of at least $1,000,000 and an integral multiple of $500,000. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to the applicable Borrower (i) with respect to Floating Rate Loans, at the Administrative Agent’s office in New York and (ii) with respect to Eurocurrency Loans at the Administrative Agent’s Lending Office for such currency, in each case by wire transfer to the account the applicable Borrower shall have specified in its borrowing request in compliance with this Agreement.

          2.5  Procedures for Conversion of Type of Loan. Subject to the provisions of Section 2.2, any Borrower may convert all or any part of its outstanding Tranche A Loans, Tranche B Loans, Term A Loans, Term B Loans or Incremental Loans into Loans of a different type by giving telephonic notice (promptly followed by an executed Notice of Continuation/Conversion) to the Administrative Agent not later than 10:00 a.m. (New York City time) (a) in the case of conversion of a Floating Rate Loan into a Eurocurrency Loan in the same currency, at least three Business Days prior to the proposed date of conversion, and (b) in the case of conversion of a Eurocurrency Loan in one currency to a Floating Rate Loan of the same currency on any date other than the last day of the applicable Interest Period, at least two Business Days prior to the proposed date of conversion. Each such notice shall be effective upon receipt by the Administrative Agent, shall be irrevocable, and shall specify the date and amount of such conversion, the Loan to be so converted, the type of Loan to be converted into and, in the case of a conversion into a Eurocurrency Loan, the initial Interest Period therefor. Promptly upon receipt of such notice, the Administrative Agent shall advise each Lender thereof. Subject to Sections 2.11 and 2.12, such Loan shall be so converted on the requested date of conversion. Each conversion shall be on a Business Day. Notwithstanding the foregoing, no Borrower shall be entitled to convert (a) Loans denominated in one currency into Loans in another currency, (b) Eurocurrency Loans denominated in an Alternate Currency into a Floating Rate Loan, (c) Loans under one Facility into Loans under another Facility or (d) during the continuance of any Event of Default, convert Floating Rate Loans into Eurocurrency Loans.

          2.6  Letter of Credit Procedures. The Company or Telegraph, as the case may be, shall give notice to the Issuing Bank of the proposed issuance of each Letter of Credit on a Business Day which is at least three Business Days (or such lesser period as to which the Issuing Bank may agree) prior to the

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proposed date of issuance of such Letter of Credit. Each such notice shall be accompanied by a Letter of Credit Application, duly executed by the Company or Telegraph, as the case may be (and if a Restricted Subsidiary is to be a co-applicant, such Restricted Subsidiary), and in all respects satisfactory to the Issuing Bank, together with such other documentation as the Issuing Bank may reasonably request in support thereof, it being understood that each Letter of Credit Application shall specify, among other things, the date on which the proposed Letter of Credit is to be issued, the amount of the Letter of Credit, the expiration date of such Letter of Credit (which shall not be later than the earlier of (x) one year from the date of issuance and (y) five Business Days prior to the Revolving Commitment Termination Date), the currency in which such Letter of Credit is to be issued and whether such Letter of Credit is to be transferable in whole or in part. Subject to the satisfaction of the conditions precedent set forth in Section 11 with respect to the issuance of such Letter of Credit, the Issuing Bank shall issue such Letter of Credit on the requested issuance date. The Company shall not be entitled to request the issuance of a Letter of Credit for the account of any Unrestricted Subsidiary, any U.K. Obligor or any Restricted Subsidiary which is not a Restricted Subsidiary Obligor and shall only be entitled to request Letters of Credit denominated in Dollars. Telegraph shall not be entitled to request the issuance of a Letter of Credit for the account of any Person other than itself or a U.K. Obligor and shall only be entitled to request Letters of Credit denominated in Sterling.

          2.7 Participations in Letters of Credit. Concurrently with the issuance of each Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred to each other Revolving Lender, and each other Revolving Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such other Revolving Lender’s Revolving Percentage, in such Letter of Credit and the applicable Borrower’s reimbursement obligations with respect thereto. For the purposes of this Agreement, the unparticipated portion of each Letter of Credit shall be deemed to be the Issuing Bank’s “participation” therein. The Issuing Bank hereby agrees, upon request of any Revolving Lender, to deliver to such Revolving Lender a list of all outstanding Letters of Credit, together with such information related thereto as such other Lender may reasonably request.

          2.8 Reimbursement Obligations. Each Borrower hereby unconditionally and irrevocably agrees to reimburse the Issuing Bank for each payment or disbursement made by the Issuing Bank under any Letter of Credit issued at its request whether or not for its account honoring any demand for payment made by the beneficiary thereunder, in each case on the date that such payment or disbursement is made. Any amount not reimbursed on the date of such payment or disbursement shall bear interest from and including the date of such payment or disbursement to but not including the date that the Issuing Bank is reimbursed by the applicable Borrower therefor, payable on demand, at a rate per annum equal to (x) in the case of Letters of Credit denominated in Dollars, the sum of the Alternate Base Rate plus the Applicable Margin from time to time in effect (plus, at any time an Event of Default exists, 2%), and (y) in the case of Letters of Credit denominated in Sterling, the higher of (1) the sum of the Eurocurrency Rate (Reserve Adjusted) plus the Applicable Margin from time to time in effect (plus, at any time an Event of Default exists, 2%) and (2) the sum of the Alternate Base Rate plus the Applicable Margin from time to time in effect (plus, at any time an Event of Default exists, 2%). The Issuing Bank shall notify the applicable Borrower and the Administrative Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided, however, that the failure of the Issuing Bank to so notify the applicable Borrower or the Administrative Agent shall not affect the rights of the Issuing Bank or the Revolving Lenders in any manner whatsoever.

          2.9 Limitation on the Issuing Bank’s Obligations. In determining whether to pay under any Letter of Credit, the Issuing Bank shall have no obligation to the Borrowers or any Revolving Lender other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of

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Credit, if taken or omitted in the absence of gross negligence and willful misconduct, shall not impose upon the Issuing Bank any liability to the Borrowers or any Revolving Lender and shall not reduce or impair any Borrower’s reimbursement obligations set forth in Section 2.8 or the obligations of the Lenders pursuant to Section 2.10.

          2.10 Funding by Lenders to the Issuing Bank. If the Issuing Bank makes any payment or disbursement under any Letter of Credit and the applicable Borrower has not reimbursed the Issuing Bank in full for such payment or disbursement by 10:00 a.m. (New York City time) on the date of such payment or disbursement or if any reimbursement received by the Issuing Bank from the applicable Borrower is or must be returned or rescinded upon or during any bankruptcy, insolvency or reorganization of such Borrower or otherwise, each Revolving Lender shall be obligated to pay to the Issuing Bank, in full or partial payment of the purchase price of its participation in such Letter of Credit, its pro rata share (according to its Revolving Percentage) of such payment or disbursement (but no such payment shall diminish the obligations of any Borrower under Section 2.8), and the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender irrevocably and unconditionally agrees, severally and for itself alone, to so pay to the Administrative Agent in immediately available funds for the Issuing Bank’s account the amount of such Revolving Lender’s Revolving Percentage of such payment or disbursement. If and to the extent any Revolving Lender shall not have made such amount available to the Administrative Agent by 2:00 p.m. (New York City time) on the Business Day on which such Lender receives notice from the Administrative Agent of such payment or disbursement (it being understood that any such notice received after noon, New York City time, on any Business Day shall be deemed to have been received on the next following Business Day), such Revolving Lender agrees to pay interest on such amount to the Administrative Agent for the Issuing Bank’s account forthwith on demand for each day from and including the date such amount was to have been delivered to the Administrative Agent to but excluding the date such amount is paid, at a rate per annum equal to (a) for the first three days after demand, the Federal Funds Rate from time to time in effect and (b) thereafter, the Alternate Base Rate from time to time in effect. Any Revolving Lender’s failure to make available to the Administrative Agent its Revolving Percentage of any such payment or disbursement shall not relieve any other Revolving Lender of its obligation hereunder to make available to the Administrative Agent such other Revolving Lender’s Revolving Percentage of such payment, but no Revolving Lender shall be responsible for the failure of any other Revolving Lender to make available to the Administrative Agent such other Revolving Lender’s Revolving Percentage of any such payment or disbursement.

          2.11 Warranty. Each notice of borrowing and/or of conversion pursuant to Section 2.4 or 2.5 and the delivery of each Letter of Credit Application pursuant to Section 2.6 shall automatically constitute a warranty by the Borrowers to the Administrative Agent and each Lender to the effect that on the date of such requested borrowing or conversion or the issuance of the requested Letter of Credit, as the case may be, (a) the warranties contained in Section 9 (excluding Sections 9.4, 9.6, 9.8 and 9.15 through 9.17) of this Agreement shall be true and correct as of such requested date as though made on the date thereof and (b) no Event of Default or Unmatured Event of Default shall have then occurred and be continuing or would reasonably be expected to result therefrom.

          2.12 Conditions. Notwithstanding any other provision of this Agreement, (a) no Lender shall be obligated to make any Loan, (b) no Lender shall be obligated to convert into or permit the continuation at the end of the applicable Interest Period of any Eurocurrency Loan, and (c) the Issuing Bank shall not be obligated to issue any Letter of Credit if, in any such case, an Event of Default or Unmatured Event of Default exists or would result therefrom.

          2.13 Determination of Dollar Equivalents. The Administrative Agent will determine the Dollar Equivalent with respect to any Credit Extension denominated in an Alternate Currency (a) on the date of any requested Credit Extension or date of any requested continuation of any Credit Extension denominated in an Alternate Currency, (b) as of the last Business Day of each month, and (c) during the

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occurrence and continuation of an Event of Default, such other dates as may be requested by the Required Lenders (but in no event more frequently than once a week) (each such date being a “Determination Date”).

          2.14 Commitments Several. The failure of any Lender to make a requested Loan on any date shall not relieve any other Lender of its obligation to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender.

          2.15 Loan Accounts. Each Lender shall record in its records the date and amount of each Loan made by such Lender, each repayment or conversion thereof and, in the case of each Eurocurrency Loan, the dates on which each Interest Period for such Loan shall begin and end. The aggregate unpaid principal amount so recorded shall be rebuttable presumptive evidence of the principal amount owing and unpaid on such Lender’s Loans. The failure to so record any such amount or information or any error in so recording any such amount or information shall not, however, limit or otherwise affect the obligations of the Borrowers hereunder to repay when due the principal amount of the Loans together with all interest accruing thereon.

          2.16 Requesting Promissory Notes. Each Lender may, upon written request to the Administrative Agent and the applicable Borrower, cause to have prepared by the Administrative Agent and executed by the applicable Borrower, and delivered to such Lender, promissory notes evidencing the Obligations of such Borrower to such Lender.

          SECTION 3 Incremental Facility.

          3.1 Incremental Facility. The Company shall have the right, from time to time, to request additional term loans (each such loan an “Incremental Loan”) pursuant to an incremental facility (the “Incremental Facility”), provided that at the time any tranche of Incremental Loans is issued pursuant to the Incremental Facility, (a) no Unmatured Event of Default or Event of Default shall have occurred and be continuing or result from the issuance of such Incremental Loans, (b) the Company shall have delivered to the Administrative Agent a Compliance Certificate, completed on a pro forma basis, giving effect to the Incremental Loans, (c) the aggregate principal amount of all tranches under the Incremental Facility hereunder shall not exceed $200,000,000, (d) each tranche must be a term loan which is governed by the terms of this Agreement and the other Loan Documents with terms and conditions no more restrictive than those in effect with respect to the then existing Facilities, (e) the Company or a Restricted Subsidiary Obligor which is a U.K. Subsidiary or a U.S. Subsidiary must be the borrower (an “Incremental Borrower”) thereunder, (f) the weighted average life and final maturity of each tranche shall be at least six months longer than the weighted average life and final maturity of the Term B Loans, (g) the applicable interest rates may differ from the then existing Facilities, provided, however, if the Applicable Margin for any tranche of Incremental Loans is more than 25 basis points higher than the Applicable Margin for the Term B Loans, the Applicable Margin for the Term B Loans shall be proportionately adjusted such that the Applicable Margin for any tranche of Incremental Loans is no more than 25 basis points higher than the Applicable Margin for the Term B Loans, and (h) any Incremental Loans shall be issued at a price (including upfront fees and original issue discount, if any) not lower than 99.50% of par.

          3.2 Request for Incremental Facility. The Company shall provide notice to the Administrative Agent of its desire for an Incremental Facility, the proposed Incremental Borrower and amount thereof, and specifying the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). Each Lender shall have the option (in its sole and complete discretion) to subscribe for its proportionate share (or, if agreed to by the Company and the Administrative Agent, more or less than its proportionate share) of such proposed Incremental Facility according to its then-existing Voting Percentage. In the

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event that Lenders do not subscribe for the entire proposed Incremental Facility, one or more Persons meeting the qualifications of an Eligible Assignee may be added as an Incremental Lender, subject to the approval of the Company and the Administrative Agent.

          3.3 Documentation of Incremental Facility. The terms of any tranche of the Incremental Facility shall be set forth in a supplement to this Agreement (a “Supplement”) in form and substance satisfactory to the Administrative Agent, executed by the Administrative Agent, the Company, the applicable Incremental Borrower and the Incremental Lenders with respect to such tranche of the Incremental Facility. The applicable Incremental Borrower shall execute and deliver to the Administrative Agent such assumptions, guarantees, security documents, opinions and other documents as may be reasonably required by the Administrative Agent. The consent of the Lenders who are not Incremental Lenders shall not be necessary to the effectiveness of a Supplement provided that it otherwise complies with the conditions of this Section 3 and such Supplement may make technical changes to this Agreement to provide for such tranche of the Incremental Facility.

          SECTION 4 Interlender Agreements.

          4.1 Allocation of Payments Prior to Acceleration. Prior to the acceleration of the Loans of any Borrower following the occurrence of an Event of Default, all payments by such Borrower of principal of, and interest on, Credit Extensions of such Borrower shall be allocated to the Lenders as follows, after giving effect to any reallocation:

          4.2 Allocation of Payments After Acceleration. (a) Upon acceleration of the Obligations pursuant to Section 12.2, to the extent necessary, each Lender shall be deemed to have purchased for cash

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without recourse or warranty from the other Lenders a participation interest in the Credit Extensions owing to or participated in by each other Lender such that, after giving effect to such purchase, each Lender shall have a participation in each Credit Extension under each Facility made to any Borrower ratably in accordance with its respective Voting Percentage.

          (b)  If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 7.4) with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation.

          (c)  After acceleration of the Obligations pursuant to Section 12.2, all payments of principal of, and interest on, Credit Extensions shall be allocated to the Lenders as follows:

          4.3 Distribution of Collateral Proceeds.  (a)  All cash proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral after an acceleration pursuant to Section 12.2 shall be distributed in whole or in part by the Administrative Agent in the following order of priority:

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During the pendency of any legal proceeding to determine whether any claim of any Person is a “Secured Obligation” hereunder, the Administrative Agent shall segregate any funds allocable to the Person whose claim is the subject of such proceeding and hold such segregated funds until the matter has been resolved by a final, non-appealable order of a court of competent jurisdiction. In the event that funds to be distributed by the Collateral Agent pursuant to clause (ii) or (iii) of this Section 4.3 shall be insufficient to pay in full the Secured Obligations referred to therein, distributions made pursuant to any such clause shall be made pro rata based on the aggregate amount of Secured Obligations held by each Person referred to therein.

          (b)  Until the Administrative Agent shall have distributed cash held by it pursuant hereto, the Administrative Agent may invest such cash in Cash Equivalent Investments and such Cash Equivalent Investments shall be retained by the Administrative Agent as Collateral.

          4.4 No Effect on Obligors. Nothing in this Section 4 shall affect the rights and obligations of the Obligors under the Loan Documents.

          SECTION 5 Interest and Fees.

          5.1 Interest Rates. Each Borrower promises to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such Loan is paid in full, as follows:

provided, however, that at any time an Event of Default has occurred and is continuing, the interest rate applicable to (i) each Floating Rate Loan shall be the sum of (x) the applicable Base Rate plus (y) the Applicable Margin plus (z) 2% and (ii) each Eurocurrency Loan shall be the higher of (x) the sum of (A)

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the Eurocurrency Rate (Reserve Adjusted) plus (B) the Applicable Margin plus (C) 2%, and (y) the sum of (A) the Alternate Base Rate plus (B) the Applicable Margin plus (C) 2%.

          5.2 Interest Payment Dates. Accrued interest on each Floating Rate Loan shall be payable quarterly in arrears on the last Business Day of each Fiscal Quarter and at maturity, commencing with the first of such dates to occur after the date of such Loan. Accrued interest on each Eurocurrency Loan shall be payable on the last day of each Interest Period relating to such Loan and, in the case of Eurocurrency Loans with Interest Periods in excess of three months, on each three-month anniversary of such Eurocurrency Loan and at maturity. After maturity of any Loan, accrued interest on such Loan shall be payable on demand.

          5.3 Interest Periods. Each “Interest Period” for a Eurocurrency Loan shall commence on the date such Eurocurrency Loan is made or converted from a Floating Rate Loan, or (if such Eurocurrency Loan is a continuation of a prior Eurocurrency Loan) on the expiration of the immediately preceding Interest Period for such continued Eurocurrency Loan, and shall end on the date which is one, two, three, or six months thereafter (and nine and twelve month options if available from all of the Lenders participating in such Loan), as the applicable Borrower may specify:

Each Interest Period that begins on the last day of a calendar month (or on a day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Each Interest Period which would otherwise end on a day which is not a Business Day shall end on the immediately succeeding Business Day (unless such immediately succeeding Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the immediately preceding Business Day). No Borrower may select any Interest Period for a Eurocurrency Loan which would end after the Revolving Commitment Termination Date or Stated Maturity Date, as the case may be, or which would cause such Borrower to prepay such Eurocurrency Loans on a date on which scheduled Loan payments for the applicable Facility are due.

          5.4 Setting and Notice of Eurocurrency Rates. The applicable Eurocurrency Rate for each Interest Period shall be determined by the Administrative Agent and notice thereof shall be given by the Administrative Agent promptly to the applicable Borrower and each Lender. Each determination of the applicable Eurocurrency Rate by the Administrative Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Administrative Agent shall, upon written request of any Borrower or any Lender, deliver to such Borrower or such Lender a statement showing the computations used by the Administrative Agent in determining any applicable Eurocurrency Rate hereunder.

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          5.5 Computation of Interest. Interest shall be computed on Eurocurrency Loans for the actual number of days elapsed on the basis of a year of 360 days or, where the practice in the relevant interbank market differs, in accordance with that market practice as determined by the Administrative Agent. Interest shall be computed on Floating Rate Loans for the actual number of days elapsed on the basis of a year of 365 or 366 days, as the case may be. The applicable interest rate for each Floating Rate Loan shall change simultaneously with each change in the Alternate Base Rate.

          5.6 Commitment Fee. The Company shall pay to the Administrative Agent for the account of each Revolving Lender a commitment fee equal to the Applicable Commitment Fee Rate on the daily average of the unused amount of such Revolving Lender’s Individual Revolving Commitment. Such commitment fee shall accrue from the Amendment Effective Date to but excluding the Revolving Commitment Termination Date. Such commitment fee shall be payable in arrears on the last Business Day of each Fiscal Quarter and on the Revolving Commitment Termination Date, in each case for the period then ending for which such commitment fee shall not have been theretofore paid. The commitment fee shall be computed for the actual number of days elapsed on the basis of a year of 365 or 366 days, as the case may be.

          5.7 Letter of Credit Fees. (a)  The Company and Telegraph agree to pay to the Administrative Agent for the account of the Revolving Lenders pro rata according to their respective Revolving Percentages a letter of credit fee for each Letter of Credit requested by such Borrower in an amount per annum of the daily average of the aggregate Stated Amount of such Letter of Credit (excluding any unreimbursed payment or disbursement thereunder) equal to the Applicable Margin for Eurocurrency Loans from time to time.

          (b)  The Company and Telegraph agree to pay to the Issuing Bank a fronting fee in an amount equal to 1/8 of 1% per annum of the daily average of the aggregate Stated Amount of each Letter of Credit requested by such Borrower (excluding any unreimbursed payment or disbursement thereunder).

          (c)  The fees payable pursuant to clauses (a) and (b) above shall be computed for the actual number of days elapsed on the basis of a year of 360 days and shall be payable in arrears on the last Business Day of each Fiscal Quarter and on the Revolving Commitment Termination Date for the period from and including the date of the issuance of the applicable Letter of Credit to but excluding the date such payment is due or, if earlier, the date on which such Letter of Credit expired or was terminated or was fully drawn.

          (d)  In addition, with respect to each Letter of Credit requested by such Borrower, the Company and Telegraph agree to pay to the Issuing Bank such fees and expenses as the Issuing Bank customarily requires in connection with the issuance, amendment, transfer, negotiation, processing and/or administration of letters of credit.

          5.8 Additional Fees. The Company agrees to pay to the Administrative Agent and the Sole Lead Arranger such additional fees at such times and in such amounts as set forth in the Fee Letter.

          SECTION 6 Reduction or Termination of the Commitments; Repayments.

          6.1 Reduction or Termination of the Commitments.

          6.1.1 Voluntary Reduction or Termination of Revolving Commitments. (a) The Company may from time to time prior to the Revolving Commitment Termination Date, on at least three Business Days’ prior written notice received by the Administrative Agent (which shall promptly advise each Revolving Lender thereof), permanently reduce the Total Revolving Commitments to an amount not less

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than the Total Revolving Outstanding Amount. Any reduction in the Total Revolving Commitments shall permanently reduce the Tranche A Commitments and Tranche B Commitments dollar for dollar. Any such reduction shall be in an aggregate amount of $1,000,000 or integral multiples thereof.

          (b)  The Company may at any time on like notice prior to the Revolving Commitment Termination Date terminate all the Revolving Commitments upon payment in full of the Total Revolving Outstanding Amount hereunder and the expiration, cancellation or cash collateralization (on terms satisfactory to the Administrative Agent and the Issuing Bank) of all outstanding Letters of Credit.

          (c)  All reductions of the Tranche A Commitments and Tranche B Commitments shall be pro rata among the Revolving Lenders according to their Revolving Percentages.

          6.1.2 Mandatory Revolving Commitment Reduction. (a) Asset Sales. In the event the Term A Loans, the Term B Loans and the Incremental Loans have been paid in full, on the 270th day after the receipt by the Company or any of its Restricted Subsidiaries of Net Cash Proceeds of any Asset Sales in an aggregate amount greater than $10,000,000 since the Amendment Effective Date (an “Asset Reduction Date”), the Total Revolving Commitments shall, without further action, automatically and permanently be reduced by an amount equal to such Net Cash Proceeds; provided that the foregoing shall not apply if the Company shall have provided the Administrative Agent within such 270-day period with satisfactory evidence that the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds, and in any event such Net Cash Proceeds shall have been reinvested no later than the earlier of (i) the occurrence of an Event of Default and (ii) 360 days after the receipt of such Net Cash Proceeds by the Company or such Restricted Subsidiary in similar assets located (x) in the United Kingdom if the assets disposed of in such Asset Sale were located in the United Kingdom or (y) in the United States, if such assets were not located in the United Kingdom. If such Net Cash Proceeds are not so reinvested after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then the Asset Reduction Date shall be the date which is one Business Day after the earliest of (A) the date on which such commitment expires, (B) the occurrence of an Event of Default or (C) the expiration of such 360-day period.

          (b)  Debt Proceeds. In the event the Term A Loans, Term B Loans and the Incremental Loans have been paid in full, on each date that is one Business Day after the receipt of any Debt Proceeds, the Total Revolving Commitments shall, without further action, automatically and permanently be reduced by an amount equal to such Debt Proceeds.

          (c)  Casualty Events. In the event the Term A Loans, Term B Loans and the Incremental Loans have been paid in full, on the 270th day after the receipt by the Company or any of its Restricted Subsidiaries of Net Cash Proceeds resulting from a Casualty Event (a “Casualty Reduction Date”), the Total Revolving Commitments shall, without further action, automatically and permanently be reduced by an amount equal to the Net Cash Proceeds from such Casualty Event; provided that the foregoing shall not apply if the Company shall have provided the Administrative Agent within such 270-day period with satisfactory evidence that the Company or such Restricted Subsidiary has entered into binding commitments to use such Net Cash Proceeds to restore, repair or replace the affected assets, and in any such event Net Cash Proceeds shall have been used to restore, repair or replace the affected assets no later than the earlier of (i) the occurrence of an Event of Default and (ii) 360 days after the receipt of such Net Cash Proceeds by the Company or such Restricted Subsidiary. If such Net Cash Proceeds are not so reinvested after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof in accordance with the above, then the Casualty Reduction Date shall be the date which is one Business Day after the earliest of (x) the date on which such commitment expires, (y) the occurrence of an Event of Default or (z) the expiration of such 360-day period.

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          (d)  Excess Cash Flow Payments. In the event the Term A Loans, the Term B Loans and the Incremental Loans have been paid in full, on April 15 of each year, commencing on April 15, 2004, the Total Revolving Commitment shall, without further action, automatically and permanently be reduced by an amount equal to the Excess Cash Flow Payment.

          6.1.3 Application of Mandatory Revolving Commitment Reductions to Revolving Facilities. Mandatory commitment reductions shall be applied pro rata on a dollar for dollar basis to each of the Tranche A Commitments and the Tranche B Commitments.

          6.2 Prepayments.

          6.2.1 Mandatory Prepayments due to Revolving Commitment Reductions. If, after giving effect to any reduction of the Revolving Commitments pursuant to Section 6.1, (a) the Total Outstanding Revolving Amount under any Facility exceeds the aggregate amount of the Revolving Commitments for such Facility, the Borrower or Borrowers under such Facility will make an immediate repayment of Credit Extensions in an amount equal to such excess (rounded upward, if necessary, to an integral multiple of $250,000) or (b) the Total Outstanding Revolving Amount exceeds the Total Revolving Commitments, the Company will make an immediate repayment of Credit Extensions in an amount equal to such excess (rounded upward, if necessary, to an integral multiple of $250,000).

          6.2.2 Mandatory Prepayments of Revolving Loans due to Currency Fluctuations. Promptly (and in any event within three Business Days) following receipt of any notice that the Administrative Agent shall have determined on any Determination Date that the Dollar Equivalent of the aggregate amount of all Credit Extensions under any Facility in respect of Revolving Commitments exceeds the Revolving Commitments for such Facility then in effect, the Borrower or Borrowers under such Facility shall make a mandatory prepayment of the outstanding principal amount of the Credit Extensions under such Facility in an amount equal to such excess.

          6.2.3 Term A Loan Payments. (a) Scheduled Payments. (i) FDTH shall, on each of the dates set forth in Schedule 6.2.3, make a payment equal to the percentage of the original aggregate principal amount of the Term A Loans set forth against such date.

          (ii)  On the applicable Stated Maturity Date, FDTH shall repay all outstanding Term A Loans in full.

          (b)  Net Cash Proceeds, Excess Cash Flow Payments. (i) Allocation of Term Loan Reduction Amount. In the event of receipt of Debt Proceeds or Net Cash Proceeds of any Asset Sale or Casualty Event (subject to the limitations set forth below), or if any Excess Cash Flow Payment is due, FDTH shall repay Term A Loans in the applicable Term Loan Reduction Amount. In determining the amount to be offered to each Term A Lender, the Administrative Agent shall determine the Term A Reduction Percentage as of such date.

          (ii)  Debt Proceeds. On the date which is one Business Day after receipt of Debt Proceeds, FDTH shall repay Term A Loans in an amount equal to each Term A Lender’s Term A Percentage of the applicable Term Loan Reduction Amount of such Debt Proceeds allocated to the Term A Loans pursuant to Section 6.2.3(b)(i).

          (iii)  Asset Sales. On each Asset Reduction Date, FDTH shall repay Term A Loans in an amount equal to each Term A Lender’s Term A Percentage of the applicable Term Loan Reduction Amount resulting from such Asset Sale allocated to the Term A Loans pursuant to Section 6.2.3(b)(i); provided that the foregoing shall not apply if the Company shall have provided the Administrative Agent within such 270-day period with satisfactory evidence that the Company or such Restricted Subsidiary, as

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the case may be, has entered into commitments to reinvest such Net Cash Proceeds, and in any event such Net Cash Proceeds shall have been reinvested no later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds, in similar assets located (A) in the United Kingdom, if the assets disposed of in such Asset Sale were located in the United Kingdom or (B) in the United States, if such assets were not located in the United Kingdom. If such Net Cash Proceeds are not so reinvested after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then the payment described above shall be made on the date which is one Business Day after the earliest of (1) the date on which such commitment expires, (2) the occurrence of an Event of Default or (3) the expiration of such 360 day period.

          (iv)  Casualty Proceeds. On each Casualty Reduction Date, FDTH shall repay Term A Loans in an amount equal to each Term A Lender’s Term A Percentage of the applicable Term Loan Reduction Amount of the Net Cash Proceeds relating to such Casualty Event allocated to the Term A Loans pursuant to Section 6.2.3(b)(i); provided, that the foregoing shall not apply if the Company or a Restricted Subsidiary, as the case may be, shall have provided the Administrative Agent within such 270-day period with satisfactory evidence that the Company or a Restricted Subsidiary, as the case may be, has entered into commitments to restore, repair or replace the affected assets, and in any event such Net Cash Proceeds shall have been used to restore, repair or replace the affected assets no later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds. If such Net Cash Proceeds are not so used after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then a payment described above shall be made on the date which is one Business Day after the earliest of (A) the date on which such commitment expires, (B) the occurrence of an Event of Default or (C) the expiration of such 360 day period.

          (c)  Excess Cash Flow. On April 15 of each year, commencing on April 15, 2004, FDTH shall repay Term A Loans in an amount equal to such Term A Lender’s Term A Percentage of the applicable Term Loan Reduction Amount of such Excess Cash Flow Payment allocated to the Term A Loans pursuant to Section 6.2.3(b)(i).

          (d)  Refused Loan Payments. On each date that is one Business Day after a Term B Loan Offer pursuant to Section 6.2.4(d) has expired, FDTH shall repay Term A Loans in an amount equal to such Term A Lender’s Term A Percentage of the offered prepayment which was not accepted by the Term B Lenders. On each date that is one Business Day after an offer to prepay Incremental Loans pursuant to the applicable Supplement has expired, FDTH shall repay Term A Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the offered prepayment which was not accepted by the Incremental Lenders.

          (e)  Application of Payments. All prepayments pursuant to this Section 6.2.3 shall be applied to unpaid scheduled installments of the Term A Loans of such accepting Term A Lender pro rata.

          6.2.4 Term B Loan Payments. (a) Scheduled Payments. (i) FDTH shall, on each of the dates set forth in Schedule 6.2.4, make a payment equal to the percentage of the original aggregate principal amount of the Term B Loans set forth against such date.

          (ii)  On the applicable Stated Maturity Date, FDTH shall repay all outstanding Term B Loans in full.

          (b)  Net Cash Proceeds. (i) Allocation of Term Loan Reduction Amount. In the event of receipt of Debt Proceeds or Net Cash Proceeds of any Asset Sale or Casualty Event (subject to limitations set forth below) or in the event an Excess Cash Flow Payment is due, FDTH shall offer to repay Term B

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Loans in an amount equal to such Term B Lender’s Term B Percentage of the applicable Term Loan Reduction Amount of such Debt Proceeds, Net Cash Proceeds of Asset Sales or Casualty Events or Excess Cash Flow Payment, in each case in accordance with Section 6.2.4(d).

          (ii)  Debt Proceeds. On the date which is one Business Day after receipt of Debt Proceeds, FDTH shall offer to repay Term B Loans in an amount equal to such Term B Lender’s Term B Percentage of the applicable Term Loan Reduction Amount of such Debt Proceeds allocated to Term B Loans pursuant to Section 6.2.4(b)(i), in each case in accordance with Section 6.2.4(d).

          (iii)  Asset Sales. On each Asset Reduction Date, FDTH shall offer to repay Term B Loans in an amount equal to such Term B Lender’s Term B Percentage of the Term Loan Reduction Amount resulting from such Asset Sale allocated to the Term B Loans pursuant to Section 6.2.4(b)(i); provided that the foregoing shall not apply if the Company or a Restricted Subsidiary, as the case may be, shall have provided the Administrative Agent within such 270-day period, with satisfactory evidence that the Company or such Restricted Subsidiary, as the case may be, has entered into commitments to reinvest such Net Cash Proceeds, and in any event such Net Cash Proceeds shall have been reinvested not later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds, in similar assets located (A) in the United Kingdom, if the assets disposed of in such Asset Sale were located in the United Kingdom, or (B) in the United States if such assets were not located in the United Kingdom. If such assets are not so reinvested after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then the offer described above shall be made on the date which is one Business Day after the earliest of (1) the date on which such commitment expires, (2) the occurrence of an Event of Default or (3) the expiration of such 360 day period.

          (iv)  Casualty Proceeds. On each Casualty Reduction Date, FDTH shall offer to repay Term B Loans in an amount equal to such Term B Lender’s Term B Percentage of the Term Loan Reduction Amount of the Net Cash Proceeds relating to such Casualty Event allocated to the Term B Loans pursuant to Section 6.2.4(b)(i); provided that the foregoing shall not apply if the Company or such Restricted Subsidiary, as the case may be, shall have provided the Administrative Agent within such 270-day period, with satisfactory evidence that the Company or a Restricted Subsidiary, as the case may be, has entered into commitments to restore, repair or replace the affected the assets and in any event such Net Cash Proceeds shall have been used to restore the subject assets no later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds. If such Net Cash Proceeds are not so used after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then a payment described above shall be made on the date which is one Business Day after the earliest of (A) the date on which such commitment expires, (B) the occurrence of an Event of Default or (C) the expiration of such 360 day period.

          (c)  Excess Cash Flow Payments. On April 15 of each year, commencing on April 15, 2004, FDTH shall offer to repay Term B Loans in an amount equal to such Term B Lender’s Term B Percentage of the Term Loan Reduction Amount of each Excess Cash Flow Payment allocated to the Term B Loans pursuant to Section 6.2.4(b)(i) in each case in accordance with Section 6.2.4(d). All prepayments pursuant to this Section 6.2.4(c) shall be made without any Prepayment Premium.

          (d)  Term B Loan Offer. Within five days following the receipt of any Debt Proceeds, upon the making of any voluntary prepayment pursuant to Section 6.2.6(d) or (e), on each Asset Reduction Date, on each Casualty Reduction Date and on each date an Excess Cash Flow Payment is due, FDTH shall offer to prepay Term B Loans in an amount equal to the Term Loan Reduction Amount allocable to

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such Debt Proceeds, Net Cash Proceeds of Asset Sales or Casualty Events or Excess Cash Flow Payment pursuant to Section 6.2.4(b)(i) (the “Term B Loan Offer”) in accordance with the following procedure:

          (i)  FDTH shall send the Administrative Agent and each Term B Lender a notice setting forth (x) the event giving rise to the Term B Loan Offer, a calculation of the Term Loan Reduction Amount and the prepayment amount allocable to such Term B Lender’s Term B Loans; (y) that the Term B Lender has the right to require FDTH to repay Term B Loans in an amount equal to the applicable Term Loan Reduction Amount; and (z) the proposed date of repayment (the “Payment Date”) of the Term B Loans (which shall be a Business Day no earlier than 10 Business Days nor later than 20 Business Days from the date such Term B Loan Offer is mailed).

          (ii)  Term B Lenders electing to have Term B Loans repaid will be required to provide notice thereof to FDTH and the Administrative Agent at the address specified in the notice at least three Business Days prior to the Payment Date, such election to be irrevocable. Such election shall set forth the principal amount of Term B Loans which such Term B Lender elects to have repaid.

          (iii)  Each Term B Loan Offer shall expire on the applicable Payment Date.

          (iv)  Notwithstanding the foregoing, in the event that (x) such Term B Loan Offer is accompanied by a Prepayment Premium or (y) the Term A Loans have been repaid in full and FDTH is making a mandatory prepayment in order to comply with any of the financial covenants set forth in Section 10.6 (in which case no Prepayment Premium is required to be paid), the Term B Lenders shall not have the right to refuse any mandatory prepayment set forth in such Term B Loan Offer.

          (v)  On the applicable Payment Date, FDTH shall repay Term B Loans together with any applicable Prepayment Premium or, if applicable, shall repay those Term B Loans as to which an election of repayment has been made in accordance with clause (ii) above.

          (e)  All prepayments shall be applied to the unpaid scheduled installments of the Term B Loans of such accepting Term B Lender pro rata.

          6.2.5 Incremental Loan Payments. (a) Scheduled Payments. Each Incremental Borrower shall make payments of such Incremental Borrower’s Incremental Loans on the dates and in the amounts set forth in the applicable Supplement.

          (b)  Net Cash Proceeds. (i) Allocation of Term Loan Reduction Amount. In the event of receipt of Debt Proceeds or Net Cash Proceeds of any Asset Sale or Casualty Event (subject to limitations set forth below) or in the event an Excess Cash Flow Payment is due, each Incremental Borrower shall offer to repay Incremental Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the applicable Term Loan Reduction Amount of such Debt Proceeds, Net Cash Proceeds of Asset Sales or Casualty Events or Excess Cash Flow Payment, in each case in accordance with Section 6.2.5(d).

          (ii)  Debt Proceeds. On the date which is one Business Day after receipt of Debt Proceeds, each Incremental Borrower shall offer to repay Incremental Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the applicable Term Loan Reduction Amount of such Debt Proceeds allocated to Incremental Loans pursuant to Section 6.2.5(b)(i), in each case in accordance with Section 6.2.5(d).

          (iii)  Asset Sales. On each Asset Reduction Date, each Incremental Borrower shall offer to repay Incremental Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the Term Loan Reduction Amount resulting from such Asset Sale allocated to the Incremental Loans

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pursuant to Section 6.2.5(b)(i); provided that the foregoing shall not apply if the Company or a Restricted Subsidiary, as the case may be, shall have provided the Administrative Agent within such 270-day period, with satisfactory evidence that the Company or such Restricted Subsidiary, as the case may be, has entered into commitments to reinvest such Net Cash Proceeds, and in any event such Net Cash Proceeds shall have been reinvested not later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds, in similar assets located (A) in the United Kingdom, if the assets disposed of in such Asset Sale were located in the United Kingdom, or (B) in the United States if such assets were not located in the United Kingdom. If such assets are not so reinvested after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then the offer described above shall be made on the date which is one Business Day after the earliest of (1) the date on which such commitment expires, (2) the occurrence of an Event of Default or (3) the expiration of such 360 day period.

          (iv)  Casualty Proceeds. On each Casualty Reduction Date, each Incremental Borrower shall offer to repay Incremental Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the Term Loan Reduction Amount of the Net Cash Proceeds relating to such Casualty Event allocated to the Incremental Loans pursuant to Section 6.2.5(b)(i); provided that the foregoing shall not apply if the Company or such Restricted Subsidiary, as the case may be, shall have provided the Administrative Agent within such 270-day period, with satisfactory evidence that the Company or a Restricted Subsidiary, as the case may be, has entered into commitments to restore, repair or replace the affected the assets and in any event such Net Cash Proceeds shall have been used to restore the subject assets no later than the earlier of (x) the occurrence of an Event of Default and (y) 360 days after the receipt of such Net Cash Proceeds. If such Net Cash Proceeds are not so used after the Company or a Restricted Subsidiary has entered into binding commitments to reinvest such Net Cash Proceeds and has provided the Administrative Agent with satisfactory evidence thereof as set forth above, then a payment described above shall be made on the date which is one Business Day after the earliest of (A) the date on which such commitment expires, (B) the occurrence of an Event of Default or (C) the expiration of such 360 day period.

          (c)  Excess Cash Flow Payments. On April 15 of each year, commencing on April 15, 2004, each Incremental Borrower shall offer to repay Incremental Loans in an amount equal to such Incremental Lender’s Incremental Percentage of the Term Loan Reduction Amount of each Excess Cash Flow Payment allocated to the Incremental Loans pursuant to Section 6.2.5(b)(i) in each case in accordance with Section 6.2.5(d). All prepayments pursuant to this Section 6.2.5(c) shall be made without any Prepayment Premium.

          (d)  Incremental Loan Offer. Within five days following the receipt of any Debt Proceeds, upon the making of any voluntary prepayment pursuant to Section 6.2.6(f) or (g), on each Asset Reduction Date, on each Casualty Reduction Date and on each date an Excess Cash Flow Payment is due, each Incremental Borrower shall offer to prepay Incremental Loans in an amount equal to the Term Loan Reduction Amount allocable to such Debt Proceeds, Net Cash Proceeds of Asset Sales or Casualty Events or Excess Cash Flow Payment pursuant to Section 6.2.5(b)(i) (the “Incremental Loan Offer”) in accordance with the following procedure:

          (i)  Each Incremental Borrower shall send the Administrative Agent and each Incremental Lender a notice setting forth (x) the event giving rise to the Incremental Loan Offer, a calculation of the Term Loan Reduction Amount and the prepayment amount allocable to such Incremental Lender’s Incremental Loans; (y) that the Incremental Lender has the right to require such Incremental Borrower to repay Incremental Loans in an amount equal to the applicable Term Loan Reduction Amount; and (z) the proposed date of repayment (the “Payment Date”) of the Incremental Loans (which shall be a Business

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Day no earlier than 10 Business Days nor later than 20 Business Days from the date such Incremental Loan Offer is mailed).

          (ii)  Incremental Lenders electing to have Incremental Loans repaid will be required to provide notice thereof to each Incremental Borrower and the Administrative Agent at the address specified in the notice at least three Business Days prior to the Payment Date, such election to be irrevocable. Such election shall set forth the principal amount of Incremental Loans which such Incremental Lender elects to have repaid.

          (iii)  Each Incremental Loan Offer shall expire on the applicable Payment Date.

          (iv)  Notwithstanding the foregoing, in the event that (x) such Incremental Loan Offer is accompanied by a Prepayment Premium or (y) the Incremental Loans have been repaid in full and such Incremental Borrower is making a mandatory prepayment in order to comply with any of the financial covenants set forth in Section 10.6 (in which case no Prepayment Premium is required to be paid), the Incremental Lenders shall not have the right to refuse any mandatory prepayment set forth in such Incremental Loan Offer.

          (v)  On the applicable Payment Date, each Incremental Borrower shall repay Incremental Loans together with any applicable Prepayment Premium or, if applicable, shall repay those Incremental Loans as to which an election of repayment has been made in accordance with clause (ii) above.

          (e)  All prepayments shall be applied to the unpaid scheduled installments of the Incremental Loans of such accepting Incremental Lender pro rata

          6.2.6 Voluntary Prepayments. (a) A Borrower may from time to time prepay its Revolving Loans in whole or in part, provided that such Borrower shall give the Administrative Agent (which shall promptly advise each Revolving Lender) not less than three Business Days’ prior written notice thereof, specifying the Revolving Loans to be prepaid and the date and amount of prepayment.

          (b)  FDTH may prepay its Term A Loans in whole, provided that FDTH (x) simultaneously prepays its Term B Loans and Incremental Loans in whole and (y) gives the Administrative Agent (which shall promptly advise each Term A Lender, Term B Lender and Incremental Lender) not less than five Business Days’ prior written notice thereof, specifying the date and amount of prepayment.

          (c)  FDTH may from time to time prepay its Term A Loans in part, provided that FDTH (x) makes a simultaneous offer to make a pro rata repayment of Term B Loans and its Incremental Loans and (y) gives the Administrative Agent not less than five Business Days prior written notice thereof, together with a Term B Loan Offer and the appropriate notice for the Incremental Loans, specifying the date and amount of prepayment of the Term A Loans.

          (d)  FDTH may from time to time offer to repay its Term B Loans in part, provided that FDTH (x) simultaneously makes a pro rata prepayment of Term A Loans and offers to make a pro rata repayment of its Incremental Loans and (y) submits a Term B Loan Offer in accordance with Section 6.2.4(d) and the appropriate notice for the Incremental Loans setting forth the date and amount of the prepayment; provided, further that if the Term A Loans have been prepaid in full and FDTH is making a voluntary prepayment in order to comply with any of the financial covenants set forth in Section 10.6, FDTH may from time to time prepay on a pro rata basis (without submitting a Term B Loan Offer and the appropriate notice for the Incremental Loans and without paying a Prepayment Premium) its Term B Loans and Incremental Loans in part by giving five Business Days’ prior written notice thereof to the Administrative Agent (which shall promptly advise each Term B Lender and each Incremental Lender), specifying the date and amount of prepayment, and the Term B Lenders and the Incremental Lenders

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shall not have the right to reject such prepayment of the Term B Loans and Incremental Loans; and provided, further that if such Term B Loan Offer is accompanied by a Prepayment Premium, the Term B Lenders shall not have the right to refuse any voluntary prepayment set forth in such Term B Loan Offer.

          (e)  FDTH may repay its Term B Loans in whole, provided that FDTH (x) simultaneously prepays its outstanding Term A Loans and Incremental Loans in whole, (y) submits the appropriate notice for the Incremental Loans setting forth the date and amount of the prepayment and (z) gives the Administrative Agent (which shall promptly advise each Term A Lender, Term B Lender and Incremental Lender) not less than five Business Days’ prior written notice thereof, specifying the date and amount of prepayment.

          (f)  Any Incremental Borrower may from time to time offer to repay on a pro rata basis its Incremental Loans in part by submitting the appropriate notice for the Incremental Loans setting forth the date and amount of the prepayment (subject to the right of the applicable Incremental Lenders to refuse such prepayment as set forth in the applicable Supplement), provided that (i) if the Term A Loans have been prepaid in full and such Incremental Borrower is making a voluntary prepayment in order to comply with any of the financial covenants set forth in Section 10.6, such Incremental Borrower may from time to time prepay on a pro rata basis (without submitting the appropriate notice for the Incremental Loans) its Incremental Loans in part by giving five Business Days’ prior written notice thereof to the Administrative Agent (which shall promptly advise each Incremental Lender), specifying the date and amount of prepayment, and the Incremental Lenders shall not have the right to reject such prepayment of the Incremental Loans, and (ii) if such notice of prepayment is accompanied by a Prepayment Premium, the applicable Incremental Lenders shall not have the right to refuse any voluntary prepayment set forth in such notice of prepayment.

          (g)  Any Incremental Borrower may repay its Incremental Loans in whole, provided that such Incremental Borrower (x) submits the appropriate notice for the Incremental Loans setting forth the date and amount of the prepayment and (y) gives the Administrative Agent (which shall promptly advise each Term A Lender, Term B Lender and Incremental Lender) not less than five Business Days’ prior written notice thereof, specifying the date and amount of prepayment.

          (h)  Voluntary prepayments of the Term A Loans shall be applied to scheduled installments of the Term A Loans pro rata. Voluntary prepayments of the Term B Loans shall be applied to scheduled installments of the Term B Loans of the Term B Lenders remaining unpaid pro rata. Voluntary prepayments of the Incremental Loans shall be applied as set forth in the applicable Supplement.

          (i)  Each partial prepayment of Loans shall be in a principal amount of at least $1,000,000 and an integral multiple of $500,000 (or, in the case of Loans denominated in Alternate Currencies, the Dollar Equivalent of $1,000,000 and an integral multiple of $500,000).

          6.2.7 All Prepayments. (a) All prepayments of Loans shall be allocated pro rata among the Lenders according to their respective pro rata shares of the prepaid Loans, in accordance with Section 4.2, Section 4.3, Section 6.2.3, Section 6.2.4 or Section 6.2.5 (if applicable) and any prepayment of a Loan shall include accrued interest to the date of prepayment on the principal amount being repaid. Any prepayment of a Eurocurrency Loan on a day other than the last day of an Interest Period therefor shall be subject to Section 8.4.

          (b)  Except as otherwise expressly set forth herein, all prepayments of Term B Loans and Incremental Loans (other than Excess Cash Flow Payments) shall be subject to the following premium (a “Prepayment Premium”):

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          6.2.8 Revolving Commitment Termination Date. On the Revolving Commitment Termination Date, (a) the Company shall repay to the Lenders the aggregate principal amount of all Tranche A Loans outstanding on such date and shall deliver to the Administrative Agent cash collateral in Dollars or Canadian Dollars, as applicable, consisting of Cash Equivalent Investments or other cash collateral acceptable to the Issuing Bank in an amount equal to the Dollar Equivalent of the Stated Amount of all Tranche A Letters of Credit and (b) Telegraph shall repay to the Lenders the aggregate principal amount of all Tranche B Loans outstanding on such date and shall deliver to the Administrative Agent cash collateral in Sterling or Dollars, as applicable, consisting of Cash Equivalent Investments or other cash collateral acceptable to the Issuing Bank in an amount equal to the Stated Amount of all Tranche B Letters of Credit.

          SECTION 7 Making and Proration of Payments; Setoff; Taxes.

          7.1 Making of Payments. (a) All payments of principal or interest on the Credit Extensions, and of all fees, shall be made by the Borrowers in the applicable currency without set-off or counterclaim to the Administrative Agent in immediately available funds at its designated Lending Office not later than 1:00 p.m. (Local Time) on the date due; and funds received after that hour shall be deemed to have been received by the Administrative Agent on the next following Business Day. The Administrative Agent shall promptly remit to each Lender its share of all such payments received in collected funds by the Administrative Agent for the account of such Lender; provided, however, that the Administrative Agent shall only be obligated to pay receipts in Alternate Currencies to accounts in the country of such currencies.

          (b)  All payments under Sections 8.1 and 8.4 shall be made by the Borrowers directly to the Lender or Lenders entitled thereto.

          7.2 Application of Certain Payments. Except as otherwise expressly provided herein, each payment of principal shall be applied to such Credit Extensions as the Borrowers shall direct by notice to be received by the Administrative Agent on or before the date of such payment or, in the absence of such notice, as the Administrative Agent shall determine in its reasonable discretion. Concurrently with each remittance to any Lender of its share of any such payment, the Administrative Agent shall advise such Lender as to the application of such payment.

          7.3 Due Date Extension. If any payment of principal or interest with respect to any of the Credit Extensions, or of any fees, falls due on a day which is not a Business Day, then, except as

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otherwise provided in Section 5.3, such due date shall be extended to the next following Business Day and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.

          7.4 Setoff. Each Borrower agrees that the Administrative Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Borrower agrees that at any time any Event of Default has occurred and is continuing, the Administrative Agent and each Lender may apply to any Obligation of such Borrower hereunder or under any other Loan Document, whether or not then due, any and all balances, credits, deposits, accounts or moneys of such Borrower then or thereafter with the Administrative Agent or such Lender.

          7.5 Proration of Payments. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise) on account of principal of or interest on any Credit Extension (or on account of its participation in any Letter of Credit) in excess of its pro rata share of payments and other recoveries obtained by all Lenders on account of principal of and interest on Credit Extensions (or such participations) then held by them (other than (a) any non-pro rata interest payment resulting from a Credit Extension being an Affected Loan or (b) any payment resulting from replacement of a Lender pursuant to Section 8.7), such Lender shall purchase from the other Lenders such participation in the Credit Extensions (or sub-participations in Letters of Credit) held by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery.

          7.6 Tax Matters. (a) All payments by the Obligors in respect of principal, interest, fees, indemnities and other amounts payable hereunder and under the other Loan Documents shall be made to the recipient thereof without setoff or counterclaim and free and clear of, and without withholding or deduction for or on account of, any present or future Taxes now or hereafter imposed on such recipient or its income, property, assets or franchises (such recipient’s “Recipient Taxes”), except to the extent that such withholding or deduction is required by applicable law. If any such withholding or deduction is required by applicable law, the Borrowers shall take such steps as the relevant Lender shall reasonably request to assist such Lender in recovering such Taxes.

          If any Obligor shall be required under applicable law to withhold or deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any Lender or the Administrative Agent, the applicable Borrower will:

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          (b) In consideration of the Borrowers’ agreements in clause (a) of this Section 7.6,

          (c)  Each Lender hereby represents and warrants (such Lender’s “U.S. Exemption Representation”) to the Company that on the Amendment Effective Date (or, if later, the date it becomes a party to this Agreement) it is entitled to receive payments of principal of, and interest on, Loans made by such Lender without withholding or deduction for or on account of such Lender’s Recipient Taxes imposed by the United States of America.

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          (d) The Borrowers jointly and severally agree to indemnify each Lender and the Administrative Agent for the full amount of taxes and for the full amount of Taxes of any kind imposed or asserted by any jurisdiction on amounts payable in each case under this Section 7.6, imposed on or paid by such Lender or the Administrative Agent, as the case may be, and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. Amounts payable by the Borrowers under the indemnity set forth in this clause (d) shall be paid within 20 Business Days from the date on which the applicable Lender or the Administrative Agent, as the case may be, makes written demand therefor.

          (e) If any Lender in its sole discretion acting in good faith determines that it has finally and irrevocably received a refund in respect of Taxes, to the extent that, pursuant to this Section 7.6, such Lender already has received an additional amount from any Borrower attributable to such Taxes giving rise to the refund, such Lender shall pay over the refund to such Borrower net of all out-of-pocket expenses and without interest (other than interest paid by the relevant governmental authority with respect to the refund); provided, however, that such Borrower shall, upon request of such Lender, repay the refund (plus penalties, interest or other charges imposed by the relevant governmental authority) to such Lender if such Lender is required to repay the refund to the relevant governmental authority. Nothing contained herein shall (i) require such Lender to make its tax returns (or any other information relating to its taxes which it deems confidential) available to such Borrower or any other Person or (ii) interfere with the right of a Lender to manage its tax affairs as such Lender deems appropriate.

          (f)  (i) All consideration or other amounts payable under a Loan Document by any party to any Lender, the Administrative Agent, the Issuing Bank or the Sole Lead Arranger shall be deemed to be exclusive of any VAT (as defined below). If any VAT is chargeable on any supply made by any such Person to any party in connection with a Loan Document, that party shall pay to such Person (in addition to and at the same time as paying the consideration or other amount) an amount equal to the amount of the VAT.

          (g)  All obligations provided for in this Section 7.6 shall survive repayment of the Obligations and any termination of this Agreement.

          SECTION 8 Increased Costs; Special Provisions for Eurocurrency Loans.

          8.1 Increased Costs.  (a)  If, after the Amendment Effective Date, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or any Lending Office of such Lender) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

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and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D of the Board of Governors of the Federal Reserve System, to impose a cost on) such Lender (or any Lending Office of such Lender) of making or maintaining any Eurocurrency Loan, or to reduce the amount of any sum received or receivable by such Lender (or its Lending Office) under this Agreement with respect thereto, then within 10 days after demand by such Lender (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for and a calculation of the amount of such demand, a copy of which shall be furnished to the Administrative Agent), the Borrowers shall pay directly to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or such reduction.

          (b)  If any Lender shall reasonably determine that the adoption or phase-in of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Lending Office) or any Person controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations hereunder (including such Lender’s obligations under the Revolving Commitments) to a level below that which such Lender or such controlling Person could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed by such Lender or such controlling Person to be material, then from time to time, within 10 days after demand by such Lender (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for and a calculation of the amount of such demand, a copy of which shall be furnished to the Administrative Agent), the Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling Person for such reduction.

          8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with respect to any Interest Period:

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then the Administrative Agent shall promptly notify the other parties hereto and, so long as such circumstances shall continue, (i) no Revolving Lender, Incremental Lender or Term A Lender or Term B Lender, as the case may be, shall be under any obligation to make, or convert any Floating Rate Loan into, Eurocurrency Loans in the applicable currency and (ii) on the last day of the current Interest Period for each Eurocurrency Loan in the applicable currency, such Loan shall, unless then repaid in full, automatically convert to a Floating Rate Loan.

          8.3 Changes in Law Rendering Eurocurrency Loans Unlawful. In the event that any change in (including the adoption of any new) applicable laws or regulations, or any change in the interpretation of applicable laws or regulations by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of any Lender cause a substantial question as to whether it is) unlawful for any Lender to make, maintain or fund Eurocurrency Loans, then such Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, (a) such Lender shall have no obligation to make, or convert any Floating Rate Loan into, Eurocurrency Loans (but shall make Floating Rate Loans concurrently with the making of, or conversion into, Eurocurrency Loans by the Lenders which are not so affected, in each case in an amount equal to such Lender’s pro rata share of all Eurocurrency Loans which would be made or converted at such time in the absence of such circumstances) and (b) on the last day of the current Interest Period for each Eurocurrency Loan of such Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), such Eurocurrency Loan shall, unless then repaid in full, automatically convert to a Floating Rate Loan; provided, however, that each Eurocurrency Loan denominated in an Alternate Currency must be repaid and reborrowed as a Floating Rate Loan on such date. Each Floating Rate Loan made by a Lender which, but for the circumstances described in the foregoing sentence, would be a Eurocurrency Loan (an “Affected Loan”) shall remain outstanding for the same period as the Group of Eurocurrency Loans of which such Affected Loan would be a part absent such circumstances.

          8.4 Funding Losses. Each Borrower hereby agrees that upon demand by any Lender (which demand shall be accompanied by a statement setting forth the basis for the calculations of the amount being claimed, a copy of which shall be furnished to the Administrative Agent) such Borrower will indemnify such Lender against any net loss or expense which such Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain any Eurocurrency Loan), as reasonably determined by such Lender, as a result of (a) any payment or prepayment or conversion of any Eurocurrency Loan of such Lender on a date other than the last day of an Interest Period for such Loan (including any conversion

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pursuant to Section 8.3) or (b) any failure of such Borrower to borrow or convert any Loans on a date specified therefor in a notice of borrowing or conversion pursuant to this Agreement. For this purpose, all notices to the Administrative Agent pursuant to this Agreement shall be deemed to be irrevocable.

          8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if it so elects, fulfill its commitment as to any Eurocurrency Loan by causing a foreign branch or Affiliate of such Lender to make such Loan; provided that in such event for the purposes of this Agreement such Loan shall be deemed to have been made by such Lender and the obligation of the Borrowers to repay such Loan shall nevertheless be to such Lender and shall be deemed held by it, to the extent of such Loan, for the account of such branch or Affiliate.

          8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Lender had actually funded and maintained each Eurocurrency Loan during each Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Eurocurrency Rate for such Interest Period.

          8.7 Mitigation of Circumstances; Replacement of Affected Lenders. (a) Each Lender shall promptly notify the Company and the Administrative Agent of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in such Lender’s good faith judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by a Borrower to pay any amount pursuant to Section 7.6 (other than with respect to U.K. Recipient Taxes) or 8.1 and (ii) the occurrence of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any Lender has given notice of any such event described in clause (i) or (ii) above and thereafter such event ceases to exist, such Lender shall promptly so notify the Company and the Administrative Agent). Without limiting the foregoing, each Lender will designate a different funding office if such designation will avoid (or reduce the cost to the Borrowers of) any event described in clause (i) or (ii) of the preceding sentence and such designation will not, in such Lender’s sole judgment, be otherwise disadvantageous to such Lender.

          (b)  At any time any Lender is an Affected Lender, the Company may replace such Affected Lender as a party to this Agreement with one or more other bank(s) or financial institution(s) reasonably satisfactory to the Administrative Agent and, in the case of a Revolving Lender, the Issuing Bank and, upon notice from the Company, such Affected Lender shall assign pursuant to an Assignment Agreement, and without recourse or warranty, its Revolving Commitment, if any, its Loans, its participation in Letters of Credit, if any, and all of its other rights and obligations hereunder to such replacement bank(s) or other financial institution(s) for a purchase price equal to the sum of the principal amount of the Loans so assigned, all accrued and unpaid interest thereon, its ratable share of all accrued and unpaid commitment fees and Letter of Credit fees, any amounts payable under Section 8.4 as a result of such Lender receiving payment of any Eurocurrency Loan prior to the end of an Interest Period therefor and all other obligations owed to such Affected Lender hereunder.

          8.8 Conclusiveness of Statements; Survival of Provisions. Determinations and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be conclusive absent demonstrable error. Lenders may use reasonable averaging and attribution methods in determining compensation under Sections 8.1 and 8.4, and the provisions of such Sections shall survive repayment of the Loans, cancellation or expiration of the Letters of Credit and any termination of this Agreement.

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          SECTION 9 Warranties.

          To induce the Administrative Agent and the Lenders to enter into this Agreement, the Issuing Bank to issue Letters of Credit and the Lenders to make Loans, and purchase participations in Letters of Credit hereunder, each Borrower warrants to the Administrative Agent, the Issuing Bank and the Lenders as follows:

          9.1 Organization, etc. Each Borrower is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation; each Restricted Subsidiary is a corporation duly organized, validly existing and in good standing under the jurisdiction of its incorporation; each Borrower and each Restricted Subsidiary is duly qualified to do business in each jurisdiction where the nature of its business makes such qualification necessary, except where the failure to be so qualified would not have a Material Adverse Effect; and each Borrower and each Restricted Subsidiary has full corporate power and authority to own its property and conduct its business as presently conducted by it.

          9.2 Authorization; No Conflict; Compliance with Laws. The execution and delivery by each Borrower of this Agreement and each other Loan Document to which it is a party, the borrowings hereunder, the execution and delivery by each other Obligor of each Loan Document to which it is a party and the performance by each of the Borrowers and each other Obligor of its obligations under each Loan Document to which it is a party are within the corporate powers of each Borrower and each other Obligor, as applicable, have been duly authorized by all necessary corporate action on the part of each Borrower and each other Obligor (including any necessary shareholder and partner action), have received all necessary governmental approval (if any shall be required), and do not and will not (a) violate any provision of law or any order, decree or judgment of any court or other government agency which is binding on the Borrowers or any Restricted Subsidiary, (b) contravene or conflict with, or result in a breach of, any provision of the Organic Documents of the Borrowers or any Restricted Subsidiary or of any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding on the Company or any Restricted Subsidiary or (c) result in, or require, the creation or imposition of any Lien on any property of the Borrowers or any Restricted Subsidiary (other than pursuant to the Loan Documents). No Borrower or Restricted Subsidiary is in violation of any law, rule, regulation (including, without limitation under the Patriot Act, the Trading with the Enemy Act, the foreign assets control regulations of the United States Treasury Department and Executive order 13224 of September 23, 2001) binding upon it which could have a Material Adverse Effect.

          9.3 Validity and Binding Nature. This Agreement is, and upon the execution and delivery thereof each other Loan Document to which any Borrower is a party will be, the legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms, except that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in equity or at law); and each Loan Document to which any other Obligor is a party will be, upon the execution and delivery thereof by such Obligor, the legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, except that enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in equity or at law).

          9.4 Financial Information. (a) The audited consolidated financial statements of Hollinger International as at December 31, 2001, and the unaudited consolidated financial statements of Hollinger International as at September 30, 2002, copies of which have been delivered to the Lenders, in each case (i) are true and correct in all material respects, (ii) have been prepared in accordance with GAAP

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consistently applied throughout the periods involved (except as disclosed therein) and (iii) present fairly in all material respects the consolidated financial condition of Hollinger International and its Subsidiaries at such dates and the results of their operations for the periods then ended.

          (b)  The forecasted consolidated balance sheet, profits and loss statement and cash flow statement of the Financial Group together with supporting details and statement of underlying assumptions dated November 7, 2002, copies of which have been delivered to each Lender, have been prepared by the Company in light of the past operations of the business of the Financial Group and represent, as of the date of this Agreement, the good faith estimate of the Company and its senior management of the most probable course of the business of the Financial Group after giving effect to such transactions.

          9.5 No Material Adverse Change. Except as disclosed in Schedule 9.5, from December 31, 2001 to the Amendment Effective Date, no event has occurred which, individually or in the aggregate with other events, has had or is reasonably likely to have a Material Adverse Effect.

          9.6 Litigation and Contingent Liabilities. As of the Amendment Effective Date, no litigation (including derivative actions), arbitration proceeding or governmental proceeding is pending or, to the Company’s knowledge, threatened against the Company or any Restricted Subsidiary which, if adversely determined, might have a Material Adverse Effect, except as set forth in Schedule 9.6. Other than any liability incident to such litigation or proceedings, as of the Amendment Effective Date neither the Company, nor any Restricted Subsidiary has any material contingent liabilities not provided for or disclosed in the financial statements referred to in clause (a) of Section 9.4 or listed in Schedule 9.6.

          9.7 Ownership of Properties; Liens. Each of the Company and each Restricted Subsidiary owns good and marketable title to, or a valid leasehold interest in, all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), except to the extent any failure to do so would not reasonably be expected to have a Material Adverse Effect, free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, copyrights and the like) except as permitted pursuant to Section 10.8.

          9.8 Subsidiaries. The Company has no Subsidiaries except those listed in Schedule 9.8 as of the Amendment Effective Date and such Schedule contains a true and complete description of all Dormant Subsidiaries and all Unrestricted Subsidiaries (in each case labeled as such), as well as a true and complete description of the corporate ownership structure of the Financial Group as it will be immediately after the Amendment Effective Date, including details of all minority shareholdings held in any member of the Financial Group, all partnership and joint venture arrangements in which any member of the Financial Group participates and all loans within the Financial Group in excess of $1,000,000.

          9.9 Pension, Welfare and Employee Benefit Plans. Except as disclosed to the Lenders in writing prior to the date of this Agreement, during the twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement or the making of any Credit Extension hereunder, (a) no steps have been taken to terminate any Pension Plan or Welfare Plan which would be reasonably likely to result in the Company or any of its Subsidiaries being required to make a contribution to such Pension Plan or Welfare Plan, or incurring a liability or obligation to such Pension Plan or Welfare Plan, in excess of $2,000,000, (b) no contribution failure has occurred with respect to any Pension Plan or Welfare Plan sufficient to give rise to a Lien under Section 302(f) of ERISA or any other applicable law, and (c) each member of the Financial Group is in compliance with applicable laws and contracts relating to pension schemes (if any) from time to time operated by it or in which it participates and each pension scheme is adequately provided for and funded in accordance with applicable law. No condition exists or event or transaction has occurred with respect to any Pension Plan or Welfare Plan which could result in the

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incurrence by the Company or any of its Subsidiaries of any material liability, fine or penalty under ERISA, the Code or any other applicable law. Except as set forth on Schedule 9.9, the Company and its Restricted Subsidiaries have no contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of subtitle B of title I of ERISA. Each Employee Benefit Plan is in compliance in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Employee Benefit Plan, except for any non-compliance the consequences of which, in the aggregate, would not result in a material obligation to pay money. With respect to any Employee Benefit Plan of a Restricted Subsidiary organized outside the United States, (x) the aggregate of the accumulated benefit obligations under all Employee Benefit Plans does not exceed the current fair market value of the assets held in the trusts or similar funding vehicles for such Employee Benefit Plans, and (y) reasonable reserves have been established in accordance with prudent business practice or where required by ordinary accounting practices in the jurisdiction in which such Employee Benefit Plan is maintained. There are no material actions, suits or claims (other than routine claims for benefits) pending or, to the knowledge of the Company, threatened against it or any of its Subsidiaries with respect to any Employee Benefit Plan. None of the Company, any of its Subsidiaries or any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability exceeding $2,000,000 to any Multiemployer Plan.

          9.10 Investment Company Act. Neither the Company nor any Restricted Subsidiary is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

          9.11 Public Utility Holding Company Act. Neither the Company nor any Restricted Subsidiary is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

          9.12 Regulations U and X. Neither the Company nor any of its Restricted Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

          9.13 Taxes. Each of the Company and each Restricted Subsidiary has filed all income tax and other material tax returns and reports required by law to have been filed by it and has paid all income taxes and other material taxes and governmental charges thereby shown to be owing, except (a) as disclosed on Schedule 9.6 and (b) for any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

          9.14 Solvency, etc. On the Amendment Effective Date (with respect to each of the Borrowers and each Restricted Subsidiary listed on Schedule 9.8 which is a Restricted Subsidiary Obligor), and immediately prior to and after giving effect to each Credit Extension and the use of the proceeds thereof (with respect to the Borrowers only), (a) the assets of each such Person will exceed its liabilities, (b) each such Person will be solvent, will be able to pay its debts as they mature, will own property with fair saleable value greater than the amount required to pay its debts and will have capital sufficient to carry on its business as then constituted, and (c) each such person which is incorporated under the laws of England and Wales or Scotland will not be unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986.

          9.15 Insurance. Set forth on Schedule 9.15 is a complete and accurate summary of the property, casualty and business interruption insurance program carried by the Company and its Restricted Subsidiaries on the date of this Agreement, including the insurer’s(s’) name(s), policy number(s), expiration date(s), amount(s) of coverage, type(s) of coverage, the annual premium(s), exclusions,

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deductibles and self-insured retention and a description in reasonable detail of (a) any retrospective rating plan, fronting arrangement or other self-insurance or risk assumption agreed to by the Company or any Restricted Subsidiary or imposed upon the Company or any Restricted Subsidiary by any such insurer and (b) any self-insurance program that is in effect.

          9.16 Contracts; Labor Matters. Except as disclosed on Schedule 9.16: (a) neither the Company nor any Restricted Subsidiary is a party to any contract or agreement, or is subject to any charge, corporate restriction, judgment, decree or order, which has a Material Adverse Effect; (b) no material labor contract to which the Company or any Restricted Subsidiary is a party or is otherwise subject is scheduled to expire prior to the Revolving Commitment Termination Date; (c) neither the Company nor any Restricted Subsidiary has, within the two-year period preceding the date of this Agreement, taken any action which would have constituted or resulted in a “plant closing” or “mass layoff” within the meaning of the Federal Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable federal, State, local or foreign law or redundancy on a large scale, and the Company has no reasonable expectation that any such action is or will be required at any time prior to the Revolving Commitment Termination Date; and (d) on the Amendment Effective Date there are no strikes or walkouts relating to any labor contracts to which the Company or any Restricted Subsidiary is a party or is otherwise subject.

          9.17 Environmental and Safety and Health Matters. Except as disclosed on Schedule 9.17, the Company and each of its Subsidiaries and each property, operation and facility that the Company or any Subsidiary may own, operate or control (a) complies in all material respects with (i) all applicable Environmental Laws and (ii) all applicable Occupational Safety and Health Laws; (b) is not subject to any judicial or administrative proceeding alleging the violation of any Environmental Law or Occupational Safety and Health Law; (c) has not received any notice (i) that it may be in violation of any Environmental Law or Occupational Safety and Health Law, or (ii) threatening the commencement of any proceeding relating to allegedly unlawful, unsafe or unhealthy conditions or (iii) alleging that it is or may be responsible for any response, cleanup, or corrective action, including any remedial investigation/feasibility study, under any Environmental Law or Occupational Safety and Health Law; (d) has not received any notice that it is the subject of federal or State investigation evaluating whether any investigation, remedial action or other response is needed to respond to (i) a spillage, disposal or release or threatened release into the environment of any Regulated Material, or (ii) any alleged violation of any Occupational Safety and Health Law; (e) has not filed any notice under or relating to any Environmental Law or Occupational Safety and Health Law indicating or reporting (i) any past or present spillage, disposal or release (other than permitted releases) into the environment of, or treatment, storage or disposal of (other than permitted releases), any Regulated Material in excess of quantities requiring notification under any Environmental Law, or (ii) any violation of any Occupational Safety and Health Law and (f) to the best knowledge of the Company has no material contingent liability in connection with (i) any actual or potential spillage, disposal or release into the environment of, or otherwise with respect to, any Regulated Material, whether on any premises owned or occupied by the Company or any Subsidiary or on any other premises or (ii) any unsafe or unhealthful condition. Except as disclosed on Schedule 9.17, there are no Regulated Materials on, in or under any property or facilities, owned, operated or controlled by the Company or any Subsidiary (except Regulated Materials used in the ordinary course of the business of the Company and its Subsidiaries and used, stored, handled, treated and disposed of in all material respects in accordance with all applicable Environmental Laws and Occupational Safety and Health Laws) that, under applicable Environmental Laws or Occupational Safety and Health Laws (x) impose or could reasonably be expected to impose a liability for removal, remediation, or other cleanup or damage to natural resources, in an amount equal to or greater than $500,000; (y) could reasonably be expected to have a Material Adverse Effect; or (z) could reasonably be expected to result in the imposition of a Lien on the property or other assets of the Company or its Subsidiaries.

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          9.18 Information. All written information heretofore or contemporaneously herewith furnished by or on behalf of the Company or any Restricted Subsidiary to the Administrative Agent or any Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby (including without limitation the information contained in the Confidential Information Memorandum dated November, 2002 heretofore distributed to the Lenders) is, and all written information hereafter furnished by or on behalf of the Company or any Restricted Subsidiary to the Administrative Agent or any Lender pursuant hereto or in connection herewith will be, when taken in its entirety with all other written information provided hereunder, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading; provided, however, that no representation is made as to any assumption or projection included in any budget, business plan or other material except that such assumptions or projections represent the reasonable good faith beliefs of the Company. The Company has heretofore furnished to the Administrative Agent true and complete final copies (in each case as in full force and effect) of all the documents relating to New High Yield Notes, the Tax Indemnity Agreements, the Tax Allocation Agreement, the 1996 Senior Subordinated Indenture, the 1997 Senior Subordinated Indenture, the 1997 Senior Indenture, and the Co-Operation Agreement dated June 23, 1992 between Hollinger, Inc. and Telegraph.

          9.19 Permitted Indebtedness, etc. The obligations of the Borrowers under this Agreement and the other Loan Documents constitute “Pari Passu Indebtedness”, “Permitted Indebtedness” and, in the case of Indebtedness of FDTH and Telegraph hereunder, “Permitted Subsidiary Indebtedness” under the New High Yield Notes.

          9.20 Financial Assistance. The granting of the security interests, the giving of the guarantees, and the incurrence of Loans and other Obligations by Telegraph and the other U.K. Obligors as contemplated by the Loan Documents and the implementation and consummation of any of the transactions contemplated herein has not constituted or involved, and will not constitute or involve, any arrangement amounting to unlawful financial assistance for the acquisition of shares within the meaning of Section 151 of the Companies Act 1985.

          9.21 Intellectual Property. The Intellectual Property required in order to conduct the business of each member of the Financial Group (a) is beneficially owned by or licensed to members of the Financial Group free from any licenses to third parties which are materially prejudicial to the use of that Intellectual Property, (b) will not be materially adversely affected by the transactions contemplated by this Agreement and the other Loan Documents, and (c) has not lapsed or been cancelled in any respect which would have a Material Adverse Effect. All steps necessary have been taken to protect and maintain such Intellectual Property, including, without limitation, paying renewal fees where failure to do so would have or be reasonably likely to have a Material Adverse Effect. No member of the Financial Group materially infringes on any intellectual property right of any third party, and where the Intellectual Property required in order to conduct the business of the Financial Group is subject to any right, permission to use, or license granted to or by any member of the Financial Group, such agreement has not been breached in any way or terminated by any party to the extent such breach or termination would have or be reasonably likely to have a Material Adverse Effect.

          SECTION 10 Covenants.

          Until the Stated Maturity Date and thereafter until all obligations of the Borrowers hereunder and under the other Loan Documents are paid in full and all Letters of Credit have been terminated or expired (regardless of whether such Letters of Credit have been cash collateralized), the Company agrees, and each Borrower with respect to itself and its Restricted Subsidiaries agrees that, unless at any time the Required Lenders shall otherwise expressly consent in writing, it will:

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          10.1 Reports, Certificates and Other Information. Furnish to the Administrative Agent (with sufficient copies for each Lender, to be promptly distributed by the Administrative Agent to each Lender) at its office:

          10.1.1 Annual Report. Promptly when available and in any event within 90 days after the close of each Fiscal Year, a copy of the annual report of Hollinger International and its Subsidiaries for such Fiscal Year, including therein consolidated balance sheets of Hollinger International and such Subsidiaries as of the end of such Fiscal Year and consolidated statements of earnings and cash flows of Hollinger International and such Subsidiaries for such Fiscal Year, which report (a) shall be prepared in accordance with GAAP and certified by independent auditors of recognized national standing selected by Hollinger International and reasonably acceptable to the Required Lenders, in an audit report which shall be without qualification as to going concern or scope and (b) shall be accompanied by a written statement from such auditors to the effect that in making the examination necessary for the signing of such audit report they have not become aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or, if they have become aware of any such event, describing it in reasonable detail.

          10.1.2 Quarterly Reports. Promptly when available and in any event within 15 days following the date on which the report on Form 10-Q for Hollinger International is required to be filed with the SEC for the first three Fiscal Quarters of each Fiscal Year, consolidated balance sheets of Hollinger International and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of earnings and consolidated statements of cash flows for such Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Quarter, including a comparison with the corresponding Fiscal Quarter and period of the previous Fiscal Year and prepared in accordance with GAAP, together with a certificate signed by one of the chief executive officer, the chief financial officer, the chief operating officer or the Vice President-Finance of the Company to the effect that such financial statements fairly present in all material respects the financial condition and results of operations of Hollinger International and such Subsidiaries as of the dates and periods indicated, subject to changes resulting from normal year-end adjustments.

          10.1.3 Certificates. Within 5 Business Days of the furnishing of a copy of each annual report pursuant to Section 10.1.1 and contemporaneously with the furnishing of each set of statements pursuant to Section 10.1.2, a duly completed certificate in form and substance acceptable to the Administrative Agent acting reasonably (a “Compliance Certificate”), with appropriate insertions, dated the date of such annual report or such quarterly statements and signed by one of the chief executive officer, the chief financial officer, the Vice President-Finance, the chief operating officer or the controller of the Company, containing a computation of each of the financial ratios and restrictions set forth in Section 10 and to the effect that such officer has not become aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or, if there is any such event, describing it and the steps, if any, being taken to cure it.

          10.1.4 Reports to SEC and to Shareholders. Promptly upon the filing or sending thereof, a copy of (a) any annual, periodic or special report or registration statement (inclusive of exhibits thereto) filed by the Company or any of its Restricted Subsidiaries with the SEC or any securities exchange and (b) any report, proxy statement or similar communication to the public shareholders of the Company or any of its Restricted Subsidiaries, if any.

          10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly (and in any event within one Business Day in the case of clause (a) and within five days in the case of clauses (b) through (i)) after any officer of the Company or any Restricted Subsidiary learns of any of the following, written notice describing the same and the steps being taken by the Company or the Restricted Subsidiary affected thereby with respect thereto: (a) the occurrence of an Event of Default or an Unmatured Event of Default;

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(b) any litigation, arbitration or governmental investigation or proceeding not previously disclosed by the Company to the Lenders which has been instituted or, to the knowledge of the Company, is threatened against the Company or any Restricted Subsidiary or to which any of the properties of any thereof is subject which has had or is reasonably likely to have a Material Adverse Effect; (c) any material adverse development which occurs in any litigation, arbitration or governmental investigation or proceeding previously disclosed on Schedule 9.6 or pursuant to clause (b); (d) the institution of any steps by the Company, any of its Subsidiaries or any other Person to terminate any Pension Plan if as a result of such transaction any Borrower or Restricted Subsidiary could be required to make a contribution to such Pension Plan in excess of $1,000,000, or the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA, or the taking of any action with respect to a Pension Plan which could result in the requirement that the Company furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Company or any Restricted Subsidiary of any material liability, fine or penalty, or any material increase in the contingent liability of the Company or any Restricted Subsidiary with respect to any post-retirement Welfare Plan benefit; (e) the imposition of Withdrawal Liability by any Multiemployer Plan, (f) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan, (g) the amount of liability incurred, or that may be incurred, by the Company, any of its Subsidiaries, or any ERISA Affiliate in connection with any event described in clauses (e) and (f); (h) the occurrence of any other event or circumstance which has had or is reasonably likely to have a Material Adverse Effect; and (i) the occurrence of any Casualty Event, the Net Cash Proceeds of which are expected to be $10,000,000 or more.

          10.1.6 Subsidiaries. (a) Within 15 days following the formation or acquisition of any Restricted Subsidiary, written notice of such formation or acquisition and (b) together with each Compliance Certificate delivered with an annual report pursuant to Section 10.1.1, a written report of any change in the list of the Subsidiaries of the Company or any other Borrower since the end of the previous Fiscal Year (or, in the case of the first such report, since the Amendment Effective Date).

          10.1.7 Management Reports. Promptly upon the request of the Administrative Agent or any Lender, copies of all detailed financial and management reports submitted to the Company or any of its Restricted Subsidiaries by independent auditors in connection with any annual or interim audit made by such auditors of the books of the Company or any Restricted Subsidiary.

          10.1.8 Insurance Information. Not later than 90 days after the end of each Fiscal Year, a complete and accurate summary of the property, business interruption and casualty insurance program of the Company or its Restricted Subsidiaries containing substantially the same information with respect to such insurance program as the information set forth on Schedule 9.15; and promptly upon the occurrence thereof, a written report of any change in the Company’s insurance program which will materially reduce the amount or scope of coverage of any type of insurance.

          10.1.9 Annual Budget. Not later than the earlier of (a) the date the annual report is required to be delivered pursuant to Section 10.1.1 and (b) the date on which preparation of such budget is completed, a copy of the Company’s annual budget for the next succeeding Fiscal Year.

          10.1.10 Other Information. Promptly from time to time, such other information concerning (a) the Company and its Restricted Subsidiaries and (b) transactions between the Company or any Restricted Subsidiary and any other Affiliate as any Lender or the Administrative Agent may reasonably request.

          10.2 Books, Records and Inspections. Keep, and cause each Restricted Subsidiary to keep, proper books and records in which full and correct entries shall be made sufficient to allow the preparation of financial statements in accordance with GAAP; permit, and cause each Restricted Subsidiary to permit, on reasonable notice and at reasonable times and intervals during normal business

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hours any Lender, the Administrative Agent or any representative thereof to (a) visit and inspect the properties of the Company or any of its Restricted Subsidiaries, (b) inspect and make extracts from and copies of their respective books and records, and (c) discuss with their respective principal officers their respective businesses, operations and financial matters. The Company and each of its Restricted Subsidiaries will (i) after the occurrence and during the continuance of any Event of Default and (ii) otherwise with the consent of the Company, which consent shall not be unreasonably withheld, also permit any Lender, the Administrative Agent or any representative thereof to discuss with the Company’s independent auditors their respective businesses, operations and financial matters; provided that the Company is given reasonable prior notice of and an opportunity to attend any meeting between such auditors and any Lender, the Administrative Agent or any representative thereof at which such issues will be discussed. The Company will pay all reasonable out-of-pocket costs and expenses incurred by the Administrative Agent in connection with all visits, discussions, and examinations by the Administrative Agent.

          10.3 Insurance. Maintain, and cause each Restricted Subsidiary to maintain, with reputable, financially sound insurance companies (in all cases rated at least A- by A.M. Best & Co. or the equivalent in the applicable jurisdiction), insurance to such extent and against such hazards and liabilities as is customarily maintained by companies similarly situated (and, in any event, such insurance as may be required by any law or governmental regulation or any court order or decree); and, upon request of the Administrative Agent, furnish to the Administrative Agent a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by the Company and its Restricted Subsidiaries.

          10.4 Compliance with Laws; Maintenance of Property; Payment of Taxes and Liabilities. (a) Comply, and cause each Restricted Subsidiary to comply, in all material respects with all applicable laws, rules, regulations and orders (including, without limitations, under the Patriot Act, the Trading with the Enemy Act, the foreign assets control regulations of the United States Treasury Department and Executive Order 13224 of September 23, 2001) the noncompliance with which would be reasonably likely to have a Material Adverse Effect; (b) maintain or cause to be maintained, and cause each Restricted Subsidiary to maintain or cause to be maintained, in good repair, working order and condition all material properties used in its business, and make, and cause each Restricted Subsidiary to make, all appropriate repairs, renewals and replacements of such properties; (c) pay, and cause each Subsidiary to pay, prior to delinquency, all taxes and other governmental charges against it or any of its property; provided, however, that the foregoing shall not require the Company or any Subsidiary to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto; and (d) not, and not permit any Restricted Subsidiary to, file or consent to the filing of any consolidated income tax return with any Person other than Hollinger International, the Company and its Subsidiaries.

          10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to Section 10.11) cause each Restricted Subsidiary to maintain and preserve, (a) its existence and good standing in the jurisdiction of its incorporation (provided that the Company may dissolve Dormant Subsidiaries) and (b) its qualification and good standing as a foreign corporation in each jurisdiction where the nature of its business makes such qualification necessary (except in those instances in which the failure to be qualified or in good standing would not be reasonably likely to result in a Material Adverse Effect).

          10.6 Financial Covenants.

          10.6.1 Total Leverage Ratio. Not permit the Total Leverage Ratio to exceed the ratio set forth opposite such period under the column heading “Required Ratio” in the table below.

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          10.6.2 Senior Secured Leverage Ratio. Not permit the Senior Secured Leverage Ratio to exceed the ratio set forth opposite such period under the heading “Required Ratio” in the table below.

          10.6.3 Interest Coverage Ratio. Not permit the Interest Coverage Ratio to be less than the ratio set forth opposite the applicable period below as of any Computation Period falling within such period.

          10.6.4 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio to be less than the ratio set forth opposite the applicable period below as of any Computation Period falling within such period.

          10.6.5 Computation of Financial Covenants. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and any Borrower

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or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrowers shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

          10.7 Limitations on Debt. Not, and not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Debt, except:

          (a)  the Obligations;

          (b)  Debt of any Borrower or Restricted Subsidiary Obligors to any other Borrower or other Restricted Subsidiary Obligors; provided that:

          (c)  Hedging Agreements entered into by the Borrowers;

          (d)  Guarantee Obligations in respect of any obligation of the Company or any Restricted Subsidiary permitted under this Agreement (other than clauses (j) and (m));

          (e)  Debt in respect of taxes, assessments or governmental charges to the extent that payment thereof shall not at the time be required to be made in accordance with Section 10.4;

          (f)  Debt outstanding on the Amendment Effective Date and listed on Schedule 10.7 under the heading “Continuing Debt” with a principal amount not exceeding $20,000,000;

          (g)  Debt of Telegraph under guaranties of printing equipment leases for the Printing Joint Ventures not exceeding $65,000,000 in the aggregate at any time outstanding;

          (h)  (A) Debt hereafter incurred by Restricted Subsidiaries in connection with Purchase Money Liens, (B) Acquisition Debt and (C) unsecured Debt not otherwise permitted under this Section 10.7, provided that the aggregate principal amount of all such Debt of the Company and its Restricted Subsidiaries under this clause (h) shall not exceed $25,000,000 at any one time outstanding;

          (i)  Debt of the Company in a principal amount not to exceed $300,000,000 under the New High Yield Notes;

          (j)  unsecured Debt of the Company which has amounts, maturities, amortization, yield, covenants, defaults and other terms acceptable to the Administrative Agent and the Required Lenders;

          (k)  Debt incurred by Telegraph to purchase the shares in West Ferry not owned by Telegraph as of the Amendment Effective Date; provided that the Company has first requested such Debt pursuant

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to the Incremental Facility, if available on terms reasonably agreeable to the Company, provided, further, that if such Debt is not incurred under the Incremental Facility, such Debt shall mature at least six months after the final maturity of the Term B Loans and the holder of such Debt has entered into an inter-creditor agreement reasonably satisfactory to the Administrative Agent;

          (l)  debt of Restricted Subsidiaries which are not Restricted Subsidiary Obligors pursuant to Section 10.10(d);

          (m)  unsecured Intercompany Debt outstanding on the Amendment Effective Date and listed on Schedule 10.7 under the heading “Intercompany Debt”, as well as unsecured Intercompany Debt of the Company to be incurred in the future; provided that all such Debt described herein shall be subordinate to the Secured Obligations pursuant to terms (including, without limitation, as to covenants, defaults and other matters) acceptable to the Administrative Agent, which terms, in any event, shall specify that no payment of principal or interest may be made or scheduled with respect to any such Debt so long as any Secured Obligations remain outstanding or any of the Lenders have any commitment hereunder; and

          (n)  the Original Letters of Credit;

provided, however, that in any event, neither the Company nor any of its Restricted Subsidiaries shall be entitled to create, incur or assume any Debt permitted under this Section 10.7 if at such time an Unmatured Event of Default or Event of Default shall have occurred and be continuing or would result therefrom.

          10.8 Liens. Not, and not permit any Restricted Subsidiary to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

          (a)  Liens for taxes or other governmental charges not at the time delinquent or thereafter payable which arise by operation of law without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in accordance with GAAP (and in the case of the U.K. Subsidiaries, generally accepted accounting principles in the United Kingdom) provided that any such Liens with respect to Canadian taxes do not attach to any property of the Company or its Restricted Subsidiaries;

          (b)  Liens arising in the ordinary course of business constituting (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens incurred in connection with worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA)) or in connection with surety and appeal bonds, bids, performance bonds and similar obligations for sums not overdue or being contested in good faith by appropriate proceedings and not involving any deposits or advances or borrowed money or the deferred purchase price of property or services, and, in each case, for which it maintains adequate reserves, or Liens similar to the Liens described in the foregoing clauses (i) and (ii) and owing in the ordinary course of business;

          (c)  Liens identified on Schedule 10.8;

          (d)  any Lien arising in connection with the acquisition, construction or improvement of tangible personal property by the Company, or a Restricted Subsidiary and attaching only to the property being acquired, constructed or improved, if the Lien and the Debt secured thereby does not exceed 100% of the cost of such acquisition, construction or improvement (subject to the limitations of Section 10.7(h)) (such Lien being a “Purchase Money Lien”);

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          (e)  attachments, judgments and other similar Liens, for sums not exceeding $5,000,000 ($3,000,000 with respect to any single Restricted Subsidiary) (excluding any portion thereof which is covered by insurance so long as the insurer is likely to be able to pay and reasonably acceptable in the judgment of the Administrative Agent) arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and claims secured thereby are being actively contested in good faith and by appropriate proceedings and have been bonded off or for which adequate reserves are maintained;

          (f)  easements, party wall agreements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of the Company and its Restricted Subsidiaries taken as a whole;

          (g)  leases or subleases granted by the Company or any Restricted Subsidiary in the ordinary course of its business;

          (h)  extensions, renewals or replacements of any Lien permitted by the foregoing provisions of this Section 10.8, but only if the principal amount of the Debt secured thereby immediately prior to such extension, renewal or replacement is not increased and such Lien is not extended to any other property;

          (i)  Liens pursuant to the Subsidiary Security Agreements;

          (j)  Liens in favor of the Administrative Agent for the benefit of the Lenders; and

          (k)  Liens securing Debt permitted pursuant to Section 10.7(k), provided that such Liens are limited to the assets of West Ferry purchased or improved with the proceeds of such Debt.

          10.9 Limitation on Restricted Payments. (a) Not, and not permit any Restricted Subsidiary to, directly or indirectly:

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          in each case, made on a pro rata basis consistent with the ownership interests in such Capital Stock to the owners of such Capital Stock, provided that no Unmatured Event of Default or Event of Default shall have occurred and be continuing;

(any of the payments described in paragraphs (i) through (vii) above, other than any such action that is a Permitted Payment (as defined below), collectively, “Restricted Payments”).

          (b) Notwithstanding the foregoing clause (a), provided that no Unmatured Event of Default or Event of Default shall have occurred and be continuing or would reasonably be expected to result from the payment or making thereof, the Company and its Restricted Subsidiaries may make the following distributions and investments (“Outside Payments”):

provided that such Outside Payments shall not exceed in the aggregate an amount equal to the applicable percentage of Excess Cash Flow set forth below (at any time, and as reduced from time to time through utilization, the “Excess Cash Flow Basket”):

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provided, further, however, that (A) Restricted Subsidiary Investments may be made using the New Investments Basket or the Excess Cash Flow Basket; (B) Restricted Subsidiary Investments made using the New Investments Basket shall not reduce the Excess Cash Flow Basket; and (C) all Restricted Subsidiary Investments shall reduce the New Investments Basket prior to reducing the Excess Cash Flow Basket.

For purposes of determining compliance with this Section 10.9(b):

          (i) compliance shall be determined at the time of making of the Outside Payment by determining the Net Leverage Ratio and Excess Cash Flow for the last four Fiscal Quarters for which financial reports are available, and determining aggregate Outside Payments (including the proposed new Outside Payment on a pro forma basis) for the current Fiscal Quarter and the last three Fiscal Quarters for which financial reports are available; and

          (ii)  during the first year following the Amendment Effective Date, compliance shall be determined at the time of making of each Outside Payment by determining the Excess Cash Flow as follows:

in each case aggregate Outside Payments (including the proposed Outside Payment on a pro forma basis) shall be determined on a cumulative basis since the Amendment Effective Date.

          Notwithstanding anything in this Section 10.9 to the contrary, provided that no Unmatured Event of Default or Event of Default shall have occurred and be continuing or would reasonably be expected to result from the payment or making thereof, the Company and its Restricted Subsidiaries may make

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Outside Payments of the type described in Section 10.9(b)(ii) (such Outside Payments being “Special Outside Payments”) in an aggregate amount not to exceed $5,000,000 (as reduced from time to time through utilization or other reductions, the “Special Outside Payments Basket”); provided, however, that (x) the aggregate amount of such Special Outside Payments shall reduce the Excess Cash Flow Basket, (y) any utilization or other reduction of the Excess Cash Flow Basket shall reduce the Special Outside Payments Basket, and (z) the Special Outside Payments Basket shall be permanently reduced to zero at the time at which the sum of (i) the Excess Cash Flow Basket and (ii) the aggregate amount of all Outside Payments made since Amendment Effective Date (other than Special Outside Payments) equals or exceeds $5,000,000.

          (c)  Notwithstanding the foregoing, so long as no Unmatured Event of Default or Event of Default has occurred and is continuing or would result therefrom, the foregoing provisions will not prohibit the following actions (such payments being referred to as “Permitted Payments”):

          10.10  Investments. Not, and not permit any Restricted Subsidiary to, make, incur, assume or suffer to exist any Investment in any other Person, except:

          (a)  Investments existing on the Amendment Effective Date and identified in Schedule 10.10;

          (b)  Cash Equivalent Investments;

          (c)  Investments by the Company in Restricted Subsidiary Obligors (subject to the limitation in Section 10.7(b)) or by any Restricted Subsidiary Obligor in the Company or any other Restricted Subsidiary Obligor, in the form of contributions to capital or loans or advances; provided that, (i) any loans are made in compliance with Section 10.7, and (ii) immediately before and after giving effect to such Investment, no Unmatured Event of Default or Event of Default shall have occurred and be continuing;

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          (d)  Investments by the Company or any Restricted Subsidiary in any Restricted Subsidiary which is not a Restricted Subsidiary Obligor in the form of capital contributions or loans and advances (i) that are existing on the date hereof, or (ii) that, together with all Investments permitted under Section 10.10(k) in cases where the entity in which the Investment is made is not a Restricted Subsidiary Obligor, do not exceed $25,000,000 (such amount, as reduced from time to time, being the “New Investments Basket”) from and after the Amendment Effective Date;

          (e)  loans or advances to officers and employees of the Company or of any Restricted Subsidiary for travel or other ordinary business expenses not in excess of $250,000 in the aggregate at any time;

          (f)  extensions of credit in the nature of accounts receivable or notes receivable arising from the sale of goods and services in the ordinary course of business;

          (g)  shares of stock, obligations or other securities received in settlement of claims arising in the ordinary course of business;

          (h)  Investments (i) by Telegraph to consummate the purchase of the shares in West Ferry not owned by Telegraph on the Amendment Effective Date which, to the extent financed with Debt, shall be consistent with Section 10.7(k) and (ii) constituting Debt of Telegraph under guaranties permitted under Section 10.7 (g);

          (i)  Investments in a new joint venture entity to be created for the purpose of the CST Real Estate Transactions, provided that such Investments shall not exceed the contribution of the CST Real Estate and cash contributions in an aggregate amount of $2,000,000;

          (j)  Investments permitted under Section 10.9(b)(ii); and

          (k)  other Investments (subject to the limitations specified in Section 10.10(d)) by the Company or any Restricted Subsidiary in the Newspaper Business that result in the Company and the Restricted Subsidiaries having, or continuing to have, a majority interest in the applicable entity in which such Investment is made and such entity shall be a Restricted Subsidiary; provided that the Company shall, and shall cause each Restricted Subsidiary to, grant a Lien in favor of the Lenders in each such Investment and to execute such documents, take such action and provide such opinions of counsel as the Administrative Agent deems necessary or advisable to create and perfect such Liens and further provided that immediately before and after giving effect to such Investment, no Unmatured Event of Default or Event of Default shall have occurred and be continuing.

          Notwithstanding any provision in this Section 10.10, neither the Company nor any of its Restricted Subsidiaries shall make any Investments in any Restricted Subsidiaries which are not formed in a jurisdiction which permits such Restricted Subsidiary to provide Guarantees and/or Collateral Documents on not less favorable a basis than that provided by a U.K. Subsidiary unless otherwise agreed to by the Administrative Agent.

          10.11 Mergers, Consolidations, Sales, Acquisitions. Not, and not permit any Restricted Subsidiary to, be a party to any merger, consolidation or Asset Sale, or to purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest in, any other Person, except for

          (a) (i) any such merger or consolidation, sale, transfer, conveyance, lease or assignment of or by any Wholly Owned Restricted Subsidiary into, with or to any other Wholly Owned Restricted Subsidiary, provided such Subsidiaries are incorporated in the same country and are

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Restricted Subsidiary Obligors (or the surviving Subsidiary is a Restricted Subsidiary Obligor) and (ii) any such merger of the Company under Section 15.13;

          (b) any such purchase or other acquisition by the Company or any Wholly Owned Restricted Subsidiary of the assets or stock of any Wholly Owned Restricted Subsidiary;

          (c) Asset Sales and Asset Swaps provided (i) Asset Sales and Asset Swaps are (x) on an arm’s-length basis for fair market value and (y) do not result in any payments (whether in the form of non-competition payments, fees or otherwise) to any Affiliate other than the Company or a Restricted Subsidiary Obligor unless consented to by the Required Lenders, (ii) all action required under Section 10.18, or otherwise necessary to perfect for the benefit of the Administrative Agent security interests and/or charges in all assets obtained in connection with any such Asset Swap, shall have been taken, and (iii) no Event of Default or Unmatured Event of Default has occurred and is continuing or would result therefrom and provided further, no Asset Sale of accounts receivable (except as part of the Newspaper Business being sold) shall be permitted and no Asset Sale or Asset Swap shall be permitted if (x) on a cumulative basis, the sum of (1) the Negative Trade Differential plus (2) the Contributed Cash Flow of all assets proposed to be sold, swapped or otherwise transferred and all assets sold, swapped or otherwise transferred since the Amendment Effective Date, in each case for the Computation Period preceding the date of the Asset Sale or Asset Swap contributed more than 5% of Operating Cash Flow of the Company and its Restricted Subsidiaries, as the case may be, for such period or (y) in the case of Asset Swaps, the applicable Obligor has not complied with the provisions of Section 10.11(d);

          (d) Acquisitions (including Asset Swaps) provided (i) no Event of Default or Unmatured Event of Default has occurred and is continuing or would result therefrom, (ii) the applicable Borrower complies with Sections 6, 10.10(k), 10.18 and 10.27, (iii) the applicable Obligor pledges and assigns to the Lenders all assets, property or business acquired promptly after the date of such Acquisition, and (iv) five Business Days prior to any Acquisition having a purchase price in excess of $25,000,000 or any Asset Swap having an implied purchase price of $75,000,000 or more, the Company shall have provided to the Administrative Agent and the Lenders a certificate pursuant to a form acceptable to the Administrative Agent acting reasonably setting forth (A) a complete description of and financial information (including financial projections) relating to such Acquisition or Asset Swap, (B) the total purchase price of such Acquisition or Asset Swap and the manner of payment thereof, (C) a calculation of the covenants in Section 10.6 before and after giving effect to such Acquisition or Asset Swap, demonstrating compliance with such covenants, and (D) certifying as to the matters in clauses d(i) and (ii); provided, however that Dormant Subsidiaries and other Restricted Subsidiaries which are not Restricted Subsidiary Obligors shall not make any Acquisition or Asset Swap; and

          (e) Investments permitted under Section 10.10 (other than under Section 10.10(k)).

          10.12 Use of Proceeds. Not use or permit any proceeds of any Credit Extension to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock. The Borrowers will use the proceeds of Credit Extensions (together with proceeds of the New High Yield Notes in the case of clauses (b) and (d) below):

          (a) in the case of Letters of Credit, for working capital and general corporate purposes;

          (b) to finance a distribution to Hollinger International on the Amendment Effective Date which shall be used immediately (or so long as no defaults or unmatured defaults arise under any

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indebtedness of Hollinger International as a result of any such delay, as soon as commercially possible) to repay existing indebtedness of Hollinger International (including, without limitation, the Total Return Equity Swap and the Trilon Financing) on terms satisfactory to the Administrative Agent, acting reasonably, and after applying such funds for the payment in full of all such indebtedness (together with any expenses related thereto), for general corporate purposes;

          (c) to make Restricted Payments permitted under Section 10.9;

          (d) to immediately deposit funds to redeem and/or purchase the 1997 Senior Subordinated Notes, and the 1996 Senior Subordinated Notes;

          (e) to fund ongoing Capital Expenditures, working capital and permitted Acquisitions;

          (f) to pay fees and expenses relating to the Facilities and the transactions related thereto; and

          (g) for working capital needs (including interest on Debt) and general corporate purposes of the Company and its Restricted Subsidiaries (subject to any limitations hereunder, including with respect to any availability to the Borrowers).

          10.13 Transactions with Affiliates. Not, and not permit any Restricted Subsidiary to, enter into or cause, suffer or permit to exist any transaction, arrangement or contract with any of its other Affiliates (other than the Company or any other Restricted Subsidiary) which is on terms which are less favorable than are obtainable from any Person which is not one of its Affiliates, other than those expressly permitted hereunder, and those existing on the Amendment Effective Date and set forth on Schedule 10.13. Without limiting the foregoing, the Company will not, and will not permit any Restricted Subsidiary to, pay any management, consulting or similar fee to any Affiliate other than (a) Management Fees to the extent permitted under Section 10.9(b) or (c)(iii), and (b) any such payment from the Company or a Restricted Subsidiary to the Company or another Wholly Owned Restricted Subsidiary.

          10.14 Employee Benefit Plans. Maintain, and cause each Restricted Subsidiary to maintain, each Pension Plan in compliance in all material respects with all applicable requirements of law and regulations.

          10.15 Environmental Covenants.

          10.15.1 Environmental Response Obligation. (a) Comply, and cause each Subsidiary to comply, with any applicable federal, State or provincial judicial or administrative order requiring the performance at any real property owned, operated or leased by the Company or any Subsidiary (or in which such Person has a direct or indirect interest) of activities in response to the release or threatened release of a Regulated Material, except for the period of time that the Company or such Subsidiary is diligently in good faith contesting such order; (b) notify the Administrative Agent within ten days of the receipt of any written claim, demand, proceeding, action or notice of liability by any Person arising out of or relating to the release or threatened release of a Regulated Material which is reasonably likely to give rise to cleanup or remediation liabilities under Environmental Laws; and (c) notify the Administrative Agent within ten days of any release, threat of release, or disposal of Regulated Material reported by the Company or any Subsidiary to any governmental or regulatory authority at any real property owned, operated, or leased by the Company or any Subsidiary which are reasonably likely to give rise to cleanup or remediation liabilities under Environmental Laws.

          10.15.2 Environmental Liabilities. (a) Comply, and cause each Subsidiary to comply, in all material respects with all Environmental Laws the noncompliance with which would be reasonably likely

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to have a Material Adverse Effect; (b) without limiting clause (a), not commence disposal of any Regulated Material into or onto any real property owned, operated or leased by the Company or any Subsidiary in violation of any Environmental Law; and (c) without limiting clause (a), not allow any Lien imposed pursuant to any law, regulation or order relating to Regulated Materials or the disposal thereof to remain on any real property owned, operated or leased by the Company or any Subsidiary.

          10.16 Unconditional Purchase Obligations. Not, and not permit any Restricted Subsidiary to, enter into or be a party to any contract for the purchase of materials, supplies or other property or services, if such contract requires that payment be made by it regardless of whether or not delivery is ever made of such materials, supplies or other property or services.

          10.17 Inconsistent Agreements. Not, and not permit any Restricted Subsidiary to, enter into any agreement containing any provision which would be violated or breached by any borrowing by any Borrower hereunder or by the performance by the Company or any Restricted Subsidiary of any of its obligations hereunder or under any other Loan Document.

          10.18 Further Assurances. Take, and cause each Restricted Subsidiary to take, such actions as the Administrative Agent may reasonably request from time to time (including the execution and delivery of guaranties, security agreements, pledge agreements, stock powers, financing statements and other documents, the filing or recording of any of the foregoing, and the delivery of stock certificates and other collateral with respect to which perfection is obtained by possession) as the Administrative Agent shall reasonably require to give effect to the provisions hereof or of any Loan Document, and to create or perfect any of the security interests contemplated hereunder or thereunder, including, without limitation, to ensure that (a) the obligations of the Company (including its obligations under Section 14) hereunder and under the other Loan Documents are secured by 65% of the issued and outstanding Capital Stock of DTH and Palestine Post, 50% of the issued and outstanding Capital Stock of JPEH, 80% of the issued and outstanding Capital Stock of STDS, 100% of the Capital Stock of all other U.S. Subsidiaries and HUKH and guaranteed by HUKH, TAHL and all U.S. Subsidiaries (other than STDS) (including, promptly upon the acquisition or creation thereof, any U.S. Subsidiary created or acquired after the date hereof), 100% of all Debt owing to Hollinger International or any of its U.S. Subsidiaries, and substantially all assets of each U.S. Subsidiary, (b) the obligations of each U.S. Subsidiary under its Subsidiary Note (other than any Subsidiary Notes from U.S. Subsidiaries which are party to the Company Security Agreement) are secured by substantially all of the assets of such U.S. Subsidiary (other than real property), and (c) the obligations of Telegraph and FDTH hereunder and under the other Loan Documents are (i) secured by (x) (A) all the Collateral described in Section 10.18(a), and (B) 100% of the Capital Stock and Subsidiary Notes of HUKH and the U.K. Subsidiaries (which do not include TAHL and other than UKMAX Limited, Hollinger Telegraph New Media Limited, Telegraph (British) Limited and Electronic Telegraph Limited), and (y) substantially all the assets (other than real property and the capital stock of Trafford Park and Paper Purchase & Management Limited) of HUKH and each of their Restricted Subsidiaries (other than Dormant Subsidiaries, Hollinger Telegraph New Media Limited, Hollinger Telegraph New Media Holdings Limited, Telegraph Publishing Limited, and The Spectator (1828) Limited) and (ii) guaranteed by each other Borrower and such Borrower’s Restricted Subsidiaries (other than Dormant Subsidiaries, Hollinger Telegraph New Media Limited, Hollinger Telegraph New Media Holdings Limited, The Spectator (1828) Limited, Telegraph Publishing Limited, and the Israeli Subsidiaries) subject, in each case, to such exceptions as the Administrative Agent or the Required Lenders may from time to time permit. Notwithstanding the foregoing, the Administrative Agent and the Lenders shall not be entitled to exercise their rights with respect to the capital stock of West Ferry (unless West Ferry has become a Wholly Owned Restricted Subsidiary) until such time as the Obligations have been accelerated in accordance with Section 12.2.

          10.19 Amendments to Certain Documents. Not, and not permit any Restricted Subsidiary to, make or agree to any amendment to or modification of, or waive any of its rights under, any of the terms

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