ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF HOLLINGER AND THE VENDOR.

EXHIBIT 2.01

UNIMEDIA CLASS A STOCK PURCHASE AGREEMENT

DATED AS OF APRIL 18, 1997

AMONG

XXXXXXXXX INC.,

UNIMEDIA HOLDING COMPANY

AND

XXXXXXXXX INTERNATIONAL INC.

TABLE OF CONTENTS

ARTICLE 1.
SALE AND PURCHASE OF SHARES.

1.1. Purchase Price............................................................................................ 2
1.2. Net Working Capital Adjustment............................................................................ 3
1.3. Purchase Price Allocation................................................................................. 3

ARTICLE 2.
CLOSING; DELIVERY OF SHARES.

2.1. Date and Place............................................................................................ 4
2.2. Delivery of Shares........................................................................................ 4

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE VENDOR.

3.1. Due Incorporation; Authority Concerning this Agreement.................................................... 4
3.2. Capitalization; Title to Shares and Assets; Subsidiaries.................................................. 5
3.3. Newspaper Financial Statements............................................................................ 6
3.4. Indebtedness; Absence of Undisclosed Liabilities.......................................................... 7
3.5. Governmental Filings...................................................................................... 7
3.6. No Violations............................................................................................. 7
3.7. Litigation and Other Proceedings.......................................................................... 8
3.8. Compliance with Laws...................................................................................... 8
3.9. Material Facts Disclosed.................................................................................. 8
3.10. Brokers and Finders....................................................................................... 8
3.11. Securities Act Compliance................................................................................. 9
3.12. Taxes..................................................................................................... 9
3.13. Employment Matters........................................................................................10
3.14. Certain Forecasts.........................................................................................10

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL.

4.1. Due Incorporation of International; Authority Concerning this Agreement...................................11
4.2. Capitalization............................................................................................11
4.3. Governmental Filings......................................................................................12
4.4. No Violations.............................................................................................12
4.5. Brokers and Finders.......................................................................................13
4.6. Private Offering..........................................................................................13

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ARTICLE 5.
COVENANTS OF THE PARTIES.

5.1. Standstill................................................................................................13
5.2. International Stockholders' Approval......................................................................14
5.3. Filings; Other Actions....................................................................................15
5.4. Registration of Certain Securities........................................................................16
5.5. Assumptions of Obligations under SOGIC Agreement..........................................................16
5.6. Non-Competition...........................................................................................16
5.7. Ownership Changes.........................................................................................17

ARTICLE 6.
CONDITIONS TO THE OBLIGATIONS OF INTERNATIONAL.

6.1. Representations and Warranties True.......................................................................18
6.2. Performance by Xxxxxxxxx and the Vendor...................................................................18
6.3. Legal Opinions............................................................................................18
6.4. No Suits or Proceedings Challenging Transaction...........................................................18
6.5. Certain Consents..........................................................................................19
6.6. Income Tax Act............................................................................................19
6.7. RBC Dominion Fairness Opinion.............................................................................19
6.8. Exchange Agreement........................................................................................19
6.9. Other Transaction Documents...............................................................................19

ARTICLE 7.
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX AND THE VENDOR

7.1. Representations and Warranties True.......................................................................20
7.2. Performance by International..............................................................................20
7.3. Legal Opinions............................................................................................21
7.4. No Suits or Proceedings Challenging Transaction...........................................................21
7.5. Certain Consents..........................................................................................21
7.6. Income Tax Act............................................................................................21
7.7. Exchange Agreement........................................................................................21
7.8. RBC Dominion Fairness Opinion.............................................................................21
7.9. Other Transaction Documents...............................................................................22

ARTICLE 8.
TERMINATION.

8.1. Termination by Mutual Consent.............................................................................22
8.2. Termination by either Xxxxxxxxx or International..........................................................22
8.3. Termination by Xxxxxxxxx..................................................................................22

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8.4. Termination by International..............................................................................23
8.5. Special Committee.........................................................................................23
8.6. Effect of Termination and Abandonment.....................................................................23

ARTICLE 9.
INDEMNIFICATION.

9.1. Indemnity.................................................................................................23
9.2. Limitations...............................................................................................23

ARTICLE 10.
MISCELLANEOUS.

10.1. Survival..................................................................................................24
10.2. Certain Expenses..........................................................................................24
10.3. Dollar Amounts............................................................................................24
10.4. Further Assurances........................................................................................24
10.5. Press Releases, Announcements and Communications..........................................................25
10.6. Amendment and Modification................................................................................25
10.7. Waiver of Compliance; Consents............................................................................25
10.8. Notices...................................................................................................25
10.9. Assignment................................................................................................27
10.10. Governing Law and Jurisdiction............................................................................28
10.11. Counterparts..............................................................................................28
10.12. No Third Party Beneficiaries..............................................................................28
10.13. Interpretation............................................................................................28
10.14. Entire Agreement..........................................................................................28

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LIST OF SCHEDULES

Schedule A List of Newspapers and Related Publications
Schedule 1.1.3.1 Form of Certificate of Designations of Series 2 Preferred Stock
Schedule 1.1.3.2 Form of Certificate of Designations of Series C Convertible Preferred Stock
Schedule 3.2.1 Bank Indebtedness of Xxxxxxxxx and Encumbrances Affecting the Shares
Schedule 3.2.2(A) Credit Facilities of the Company and its Subsidiaries
Schedule 3.2.2(B) Permitted Encumbrances
Schedule 3.2.2(C) Registrations to be Discharged
Schedule 3.2.2(D) Encumbrances Relating to Leased Assets and Properties
Schedule 3.2.3 Shares Owned by the Company and its Subsidiaries
Schedule 3.4 Undisclosed Liabilities
Schedule 3.5 Governmental Filings or Consents
Schedule 3.11.3 Form of Stock Certificate Legends
Schedule 3.13 Employment Matters
Schedule 6.3(a) Form of Opinion of Tory Xxxx XxxXxxxxxxx & Xxxxxxxxxx
Schedule 6.3(b) Form of Opinion of Xxxxxxxx Xxxxxxxxxx
Schedule 6.3(c) Form of Opinion of Xxxxxxx XxXxxxxx Stirling Scales
Schedule 6.8 Form of Exchange Agreement
Schedule 7.3 Form of Opinion of Xxxxxxxxxxx & Xxxxxxxx LLP

THE SCHEDULES TO THIS AGREEMENT HAVE NOT BEEN FILED WITH THIS EXHIBIT BUT WILL
BE FILED SUPPLEMENTALLY UPON REQUEST.

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INDEX OF DEFINED TERMS

DEFINED TERMS SECTION IN WHICH DEFINED
------------- ------------------------

Arbitrator Section 1.3
Canadian Newspaper Group Section 3.3
Class A Stock Recitals
Class B Stock Recitals
Cash Purchase Price Section 1.1.1
Class A Common Stock Section 4.2
Class B Common Stock Section 4.2
Closing Section 2.1
Closing Date Section 2.1
Company Recitals
Encumbrances Section 2.2
Exchange Act Section 4.3
Governmental Entity Section 3.5
HCPH Section 1.2.1
HCPH Shares Section 5.7
Xxxxxxxxx Recitals
Interim Period Section 1.1.2.1
International Recitals
International Common Stock Section 4.2
International 1994 Stock Option Plan Section 4.2
International Preferred Stock Section 4.2
International Proposals Section 5.2
Newspaper Financial Statements Section 3.3
Newspaper Intangible Assets Recitals
Newspapers Recitals
Permitted Encumbrances Section 3.2.2
PRIDES Section 4.2
Preliminary Proxy Statement Section 5.3.1
Proceedings Section 3.7
Proxy Statement Section 5.3.1
RBC Dominion Securities Section 4.5
Registration Statements Section 5.4
SEC Section 3.11.2
Securities Act Section 3.11.1
Series 2 Preferred Stock Section 1.1.3.1
Series A Preferred Stock Section 4.2
Series B Preferred Stock Section 4.2

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DEFINED TERMS SECTION IN WHICH DEFINED
------------- ------------------------

Series C Convertible Preferred Stock Section 1.1.3.2
Shares Section 1.1.1
SOGIC Agreement Section 5.5
Special Committee Section 3.14
Total Purchase Price Section 1.1.1
UniMedia Group Recitals
Vendor Recitals

UNIMEDIA CLASS A STOCK PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT, made as of this 18th day of April, 1997, among
XXXXXXXXX INC., a corporation continued under the laws of Canada ("XXXXXXXXX"),
and UNIMEDIA HOLDING COMPANY, a company formed under the laws of Nova Scotia
(the "VENDOR"), and XXXXXXXXX INTERNATIONAL INC., a Delaware corporation
("INTERNATIONAL").

WITNESSETH:

WHEREAS, Xxxxxxxxx has agreed to transfer to International its indirect
interests in the daily newspapers and related publications listed on Schedule A
attached hereto and certain other assets related thereto (collectively, the
"NEWSPAPERS");

WHEREAS, the Vendor is a wholly-owned subsidiary of Xxxxxxxxx;

WHEREAS, prior to the consummation of the sale transaction contemplated
hereby, Xxxxxxxxx intends to reorganize its interests in the Newspapers with the
result that the Vendor will own all of the outstanding shares in the capital of
UniMedia Newspapers Company, a Nova Scotia unlimited liability company (the
"COMPANY"), which will own directly the intangible assets of the Newspapers
(collectively, the "NEWSPAPER INTANGIBLE ASSETS") and all of the outstanding
capital stock of UniMedia Inc., a corporation incorporated under the laws of
Canada which in turn owns all of the outstanding capital stock of UniMedia Group
Inc. ("UNIMEDIA GROUP"), a Quebec company which owns the remaining assets of the
Newspapers;

WHEREAS, the outstanding shares of the Company consists of two classes
of stock, 6600 shares of Class A Stock, without par value (the "CLASS A STOCK")
which entitles the holder thereof to receive dividends payable out of funds or
other property, legally available for the purpose, and attributable to assets or
property of the Company other than UniMedia Inc. shares and to receive upon
liquidation of the Company the remaining property of the Company other than
UniMedia Inc. shares; and 1100 shares of Class B Stock, without par value (the
"CLASS B STOCK");

WHEREAS, Xxxxxxxxx is proposing that the Vendor sell all of the
outstanding shares of the Class A Stock of the Company to International in
exchange for cash and shares of Series 2 Preferred Stock of International;

NOW THEREFORE, in consideration of the premises and the respective
covenants herein contained, the parties, intending to be legally bound, hereby
agree as follows:

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ARTICLE 1.
SALE AND PURCHASE OF SHARES.

1.1. Purchase Price

1.1.1. Upon the terms and subject to the conditions set forth
herein, the Vendor shall sell, transfer and deliver to International at
Closing (as hereinafter defined) all of the issued and outstanding
shares of the Class A Stock of the Company (collectively, the "SHARES")
for a purchase price of Cdn. $169,031,000 (the "TOTAL PURCHASE PRICE"),
subject to adjustment pursuant to section 1.1.2, payable as follows:
(x) as to Cdn. $19,373,000, in cash in immediately available funds in
Canadian dollars (the "CASH PURCHASE PRICE"); and (y) as to Cdn.
$149,658,000, in 149,658 newly issued shares of Series 2 Preferred
Stock.

1.1.2. The Total Purchase Price shall be:

1.1.2.1. increased by an amount equal to the
excess of interest on the Total Purchase Price
calculated from and including January 1, 1997 to
but excluding the Closing Date (the "Interim
Period") at an annual rate equal to 7.75% over
the amount of any interest expense incurred
during the Interim Period by the Company and
its subsidiaries on the indebtedness
outstanding pursuant to the credit facilities
described in Schedule 3.2.2(A);

1.1.2.2. decreased (increased) by an amount equal
to the aggregate net cash receipts (disbursements)
generated by the Newspapers during the Interim
Period in respect of their operations during the
Interim Period which has been appropriated by
Xxxxxxxxx or any of its subsidiaries (other than
the Company and its subsidiaries) including,
without limitation, through the operation of
Xxxxxxxxx'x concentration account, payment of
dividends, return of capital or management fees.

The net increase (decrease) to the Total Purchase Price resulting from
the adjustments set out above shall be paid in Canadian dollars by
International to the Vendor or vice versa, as applicable, within 60
days of the Closing Date. If the parties cannot agree (for these
purposes, International shall not have agreed to any adjustments unless
agreed to by the Special Committee (as defined in section 4.1) and its
financial advisor) on the net amount of such adjustments within such
period the disputed issues shall be resolved by an Arbitrator in the
manner set out in section 1.3.

1.1.3. As used herein:

1.1.3.1. "Series 2 Preferred Stock" means Series 2
Nonvoting Preferred Stock, $.01 par value of
International having the relative rights and
preferences set forth in Schedule 1.1.3.1
attached hereto and which is

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exchangeable into shares of Series C Convertible Preferred Stock
and Class A Common Stock pursuant to and in accordance with the
Exchange Agreement (as defined in Section 4.3);

1.1.3.2. "Series C Convertible Preferred Stock"
means Series C Convertible Preferred Stock, $.01
par value of International having the relative
rights and preferences set forth in Schedule 1.1.3.2
attached hereto.

1.2. NET WORKING CAPITAL ADJUSTMENT

The parties agree that any working capital surplus or deficit of the
Newspapers as at December 31, 1996 shall be for the account of the Vendor to be
settled as follows.

1.2.1. As at December 31, 1996 the Vendor had a working capital
deficiency estimated to be Cdn.$3,827,864 (subject to final review and
revision in connection with the post-closing adjustments) and owed bank
debt of Cdn.$21,360,394. Xxxxxxxxx will loan Cdn.$25,188,258 to the
Company which will provide sufficient funds to enable the Company to
repay its bank debt outstanding on the Closing Date. This loan will be
sold by Xxxxxxxxx to Xxxxxxxxx Canadian Publishing Holdings Inc.
("HCPH") on the Closing Date for the principal amount thereof.

1.2.2. As soon as practicable after the Closing Date the Vendor
shall deliver to International an unaudited statement of the working
capital of the Newspapers as at December 31, 1996 together with any
information in respect of the operations of the Newspapers during the
Interim Period required to calculate the adjustment to the Total
Purchase Price contemplated by section 1.1.2.2.

1.3. PURCHASE PRICE ALLOCATION

The parties agree that the Total Purchase Price will be allocated among
the Newspaper Intangible Assets on the basis of the fair market value of such
assets. If the parties have not agreed to a final allocation of the Total
Purchase Price on or prior to December 31, 1997, any disputed aspects of the
allocation shall be resolved not more than sixty (60) calendar days after such
date by a nationally recognized accounting firm mutually agreed upon by
International and Xxxxxxxxx having no material relationship with either
International or Xxxxxxxxx or their respective affiliates (the "ARBITRATOR").
The resolution of such disputed aspects by the Arbitrator shall in all respects
be final, binding and conclusive on the parties hereto, and the allocation shall
incorporate such resolution. The costs, expenses and fees of the Arbitrator
shall be borne equally by International and the Vendor. International and the
Vendor agree to act in accordance with the allocations contained in or
determined pursuant to this section 1.3 in any and all applicable tax returns or
similar filings.

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ARTICLE 2.
CLOSING; DELIVERY OF SHARES.

2.1. DATE AND PLACE

Subject to the fulfilment or waiver of the respective covenants and
conditions set forth herein, the closing of the transactions contemplated hereby
(the "CLOSING") will take place at the offices of Tory Xxxx XxxXxxxxxxx &
Binnington, Suite 3000, Xxxxx Xxxxx, Xxxxxxx-Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
X0X 0X0, at 10:00 a.m., local time, on the first business day subsequent to the
fulfilment or waiver of all conditions set forth in Articles 6 and 7 hereof, or
at such other time and place as the parties hereto may determine (the date on
which the Closing occurs being hereinafter referred to as the "CLOSING DATE").

2.2. DELIVERY OF SHARES

At the Closing, the Vendor shall deliver stock certificates
representing all of the Shares, accompanied by stock transfer forms duly
executed in blank in respect of the Shares against delivery by International of
the Cash Purchase Price and the Series 2 Preferred Stock to be issued in
accordance with section hereof registered in the name of the Vendor or its
nominee, as the Vendor may direct. The Vendor shall deliver the Shares to
International free and clear of any mortgage, pledge, lien, encumbrance, charge,
security interest, pledge, right of first refusal, option, adverse claim of
ownership or use, or any other encumbrance of any kind or nature whatsoever
(collectively, "ENCUMBRANCES").

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE VENDOR.

Xxxxxxxxx and the Vendor hereby jointly and severally
represent and warrant to International as follows:

3.1. DUE INCORPORATION; AUTHORITY CONCERNING THIS AGREEMENT.

3.1.1. Each of Xxxxxxxxx, UniMedia Inc. and UniMedia Group is a
corporation subsisting under the laws of its jurisdiction of
incorporation. Each of the Vendor and the Company is an unlimited
liability company existing under the laws of Nova Scotia. Each of
Xxxxxxxxx, the Vendor, the Company, UniMedia Inc. and UniMedia Group
has the requisite corporate power and authority to carry on its
business and operations as presently conducted by it and to own, lease
and operate its properties and assets. Xxxxxxxxx and the Vendor each
has the requisite corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance by Xxxxxxxxx and the Vendor of their
respective obligations hereunder, and the consummation by Xxxxxxxxx and
the Vendor of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on

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the part of Xxxxxxxxx and the Vendor. This Agreement has been duly and
validly executed and delivered by Xxxxxxxxx and the Vendor and
(assuming due and valid authorization, execution and delivery by
International) constitutes the legal, valid and binding agreement of
Xxxxxxxxx and the Vendor, enforceable in accordance with its terms.

3.1.2. There has been no order or resolution for the winding up of
any of the Company, UniMedia Inc. or UniMedia Group, and no appointment
of a receiver, administrative receiver or administrator with respect
thereto.

3.2. CAPITALIZATION; TITLE TO SHARES AND ASSETS; SUBSIDIARIES.

3.2.1. The authorized share capital of the Company consists solely
of Class A Shares and Class B Shares, of which 6600 Class A Shares and
1100 Class B Shares are issued and outstanding and held by the Vendor.
The Shares and the Class B Stock constitute the only voting securities
of the Company, and the Shares are validly issued, fully paid and
non-assessable. Except as set forth in Schedule 3.2.1 attached hereto,
the Vendor has good and marketable title to the Shares, free and clear
of any Encumbrances, and has full right and authority to transfer and
deliver the Shares to International as contemplated hereby. Upon
consummation of the transactions contemplated hereby, the Vendor will
have transferred to International good and marketable title to the
Shares, free and clear of all Encumbrances. There are no outstanding or
authorized subscriptions, agreements (other than this Agreement),
options, warrants, calls or other commitments, rights (including
conversion rights) or privileges (whether preemptive or contractual)
pursuant to which the Company is or may become obligated to issue, sell
or transfer any shares of its capital or any debt or other security of
the Company which is convertible or exchangeable into, or evidences the
right to subscribe for, any share capital of the Company. There are no
shareholder agreements, voting trust agreements, rights of first
refusal, options to purchase, or restrictions upon transfer or
alienability of or with respect to the Shares, or any other similar
agreement or understanding otherwise affecting the Shares.

3.2.2. The Company owns, or as of Closing will own, directly or
through wholly-owned subsidiaries, good and marketable title, free and
clear of any Encumbrances, to all of the tangible and intangible assets
of every kind and nature (including intellectual property), used in or
held for use in the business and operations of the Newspapers as
historically conducted by UniMedia Inc. and its subsidiaries, except
for (A) Encumbrances arising under the credit facilities of UniMedia
Inc. and its subsidiaries described on Schedule 3.2.2(A), all of which
will be released and terminated as of the Closing Date; (B)
Encumbrances and leasehold interests in real properties described on
Schedule 3.2.2(B) which will remain in effect as of the Closing
(collectively, the "PERMITTED ENCUMBRANCES");

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(C) Encumbrances in effect as of the Closing Date described on Schedule
3.2.2(C) which will be discharged at the expense of the Vendor as soon
as practicable, but in any event not less than 28 days, after the
Closing Date; and (D) Encumbrances relating to leased assets and
properties described on Schedule 3.2.2(D).

3.2.3. Except as set forth on Schedule 3.2.3 attached hereto, the
Company does not own directly or indirectly through subsidiaries
securities representing or convertible into more than 5% of the
outstanding capital stock of any corporation or more than 5% of the
equity interest in any partnership or other entity. The authorized and
issued share capital and any other outstanding securities of each such
corporation, partnership or other entity are set forth on Schedule
3.2.3. Except as set forth on Schedule 3.2.3, in the case of each such
corporation, partnership or other entity, the securities owned by the
Company constitute all of the issued and outstanding share capital of
such corporation, partnership or other entity, and all the securities
are validly issued, fully paid and non-assessable with no personal
liability attached to the ownership thereof. Except as set forth on
Schedule 3.2.3, the Company has good and marketable title to the
securities of the corporations, partnerships and other entities
reflected on Schedule 3.2.3, free and clear of all Encumbrances. Except
as set forth on Schedule 3.2.3, there are no outstanding or authorized
subscriptions, agreements (other than this Agreement), options,
warrants, calls or other commitments, rights (including conversion
rights) or privileges (whether preemptive or contractual) pursuant to
which any such corporation, partnership or other entity is or may
become obligated to issue, sell or transfer any shares of its capital
or any debt or other security convertible into or evidencing the right
to subscribe for any share capital of any such corporation, partnership
or other entity.

3.3. NEWSPAPER FINANCIAL STATEMENTS.

Xxxxxxxxx and the Vendor have delivered to International an unaudited
balance sheet of the Newspapers and certain other Canadian newspapers and
publications of Xxxxxxxxx and its subsidiaries other than the Company
(collectively, the "CANADIAN NEWSPAPER GROUP") on a combined basis as at
December 31, 1995 and 1996 and unaudited combined statements of earnings,
shareholders' interest and changes in financial position for the respective
periods ended December 31, 1994, 1995 and 1996 (collectively, the "NEWSPAPER
FINANCIAL STATEMENTS"). The Newspaper Financial Statements (i) have been
prepared in accordance with the books and records of Xxxxxxxxx, the Company,
their respective subsidiaries and the Newspapers, (ii) present fairly in all
material respects the financial position of the Canadian Newspaper Group as at
the dates indicated and the results of operations and cash flows of the Canadian
Newspaper Group on a combined basis as of the dates and for the respective
periods indicated, (iii) have been prepared in conformity with generally
accepted accounting principles applicable to Canadian companies and (iv) will be
used as the basis for the financial statements prepared in accordance with
generally accepted accounting principles applicable to U.S. companies to be
included in the Proxy Statement (as defined in section 5.1).

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The Canadian Newspaper Group is comprised of the Newspaper Intangible
Assets, the Newspapers (as defined in the Sterling Purchase Agreement dated the
date hereof made between Xxxxxxxxx and HCPH (the "Sterling Purchase Agreement"))
and the Newspaper Tangible Assets (as defined in the UniMedia Class B Stock
Purchase Agreement dated the date hereof made between the parties hereto (the
"UniMedia B Agreement")).

3.4. INDEBTEDNESS; ABSENCE OF UNDISCLOSED LIABILITIES.

The Company has no outstanding indebtedness for borrowed money,
capitalized leases or any other indebtedness not incurred in the ordinary course
of business (including without limitation any indebtedness of any affiliate or
associated corporation of the Company or of any other person that is guaranteed,
directly or indirectly, by the Company) other than those matters disclosed in
the Newspaper Financial Statements or the notes thereto or as set forth on
Schedule 3.4 attached hereto. Since December 31, 1996, neither the Company nor
any of the Newspapers has incurred any liabilities or obligations of any nature,
whether accrued, contingent or otherwise, which reasonably could be expected to
have, individually or in the aggregate, a material adverse effect on the
business, assets, financial condition or results of operations of the Company or
the Newspapers, taken as a whole.

3.5. GOVERNMENTAL FILINGS.

Except as set forth on Schedule 3.5, no notice, report or other filing
is required to be made by Xxxxxxxxx, the Vendor, the Company, UniMedia Inc.,
UniMedia Group or any of the Newspapers with, nor is any material consent,
registration, approval, permit or authorization required to be obtained by them
from, any governmental or regulatory authority, agency, court, commission or
other similar entity, domestic or foreign ("GOVERNMENTAL ENTITY") in connection
with the execution and delivery of this Agreement by Xxxxxxxxx and the Vendor or
the consummation by them of the transactions contemplated hereby.

3.6. NO VIOLATIONS.

The execution and delivery of this Agreement by Xxxxxxxxx and the
Vendor does not, and the consummation by it of the transactions contemplated
hereby will not, require the consent or approval of any unrelated party or
constitute or result in (i) a breach or violation of, or a default (or an event
which with notice or lapse of time or both would become a default) under,
Xxxxxxxxx'x and the Vendor's Articles or By-laws or the Articles (or other
comparable governing documents) or By-laws of the Company, UniMedia Inc. or
UniMedia Group (ii) a breach or violation of, a default (or an event which with
notice or lapse of time or both would become a default) under, a right to
terminate, amend, cancel, or accelerate, or the creation of a lien, pledge,
security interest or other encumbrance on assets (with or without the giving of
notice or the lapse of time) pursuant to, any provision of any material
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation of Xxxxxxxxx, the Vendor, the Company, UniMedia Inc. or UniMedia
Group or any law, statute, rule, ordinance or regulation or judgment, decree,
order, award, injunction or governmental or non-governmental permit or license
to which Xxxxxxxxx, the Vendor, the Company, UniMedia Inc. or UniMedia Group is
subject or by which any of them or

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their respective properties is bound or affected, except, in the case of clause
(ii) above, (A) such breaches, violations, defaults, terminations, amendments,
cancellations, accelerations, encumbrances or changes that, individually or in
the aggregate, have not had and are not reasonably likely to have a material
adverse effect on the Company and (B) certain provisions of the existing loan
agreements of Xxxxxxxxx and UniMedia Group described in Schedules 3.2.1 and
3.2.2(A) attached hereto.

3.7. LITIGATION AND OTHER PROCEEDINGS.

There is no court, administrative, regulatory or similar proceeding,
arbitration or other dispute settlement procedure, investigation or inquiry by
or before any Governmental Entity or any similar matter or proceeding
(collectively "PROCEEDINGS") against or involving Xxxxxxxxx, the Vendor, the
Company, UniMedia Inc. or UniMedia Group with respect to any of the Newspapers
(whether in progress or threatened), which if determined adversely would be
likely to have a material adverse effect on the Company or the Newspapers; and
there is no judgment, decree, injunction, rule, award or order of any
Governmental Entity outstanding against the Xxxxxxxxx, the Vendor, the Company,
UniMedia Inc. or UniMedia Group with respect to any of the Newspapers.

3.8. COMPLIANCE WITH LAWS.

To Xxxxxxxxx'x and the Vendor's best knowledge, the Company is
conducting the business and operations of the Newspapers directly and indirectly
through subsidiaries in compliance with all statutes, laws, rules, regulations,
ordinances, decrees and orders applicable to them and the Newspapers and the
ownership of their assets, which are in effect as of the date hereof (including,
without limitation, those relating to environmental and health and safety
matters), except for violations which would not be likely to have a material
adverse effect on the Company and its consolidated subsidiaries, taken as a
whole. Neither the Vendor, the Company, UniMedia Inc. nor UniMedia Group has
received any written complaint or written notice from any Governmental Entity
alleging that they or any of the Newspapers has violated any law, ordinance,
regulation or order and, to the Vendor's best knowledge, no such complaint or
notice is threatened, except those violations which would not be likely to have
a material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole.

3.9. MATERIAL FACTS DISCLOSED.

Xxxxxxxxx, its management and the Vendor have disclosed
to International all facts known to them relating to the Newspapers and the
cash flow generated therefrom which could reasonably be expected to be
material to an intending purchaser of the Shares.

3.10. BROKERS AND FINDERS.

Neither Xxxxxxxxx, the Vendor nor any of their respective
officers, directors or employees has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finders' fees in connection with the transactions

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contemplated hereby, except that Xxxxxxxxx has retained Xxxxx Van Essen &
Associates as its financial advisor.

3.11. SECURITIES ACT COMPLIANCE.

3.11.1. The shares of Series 2 Preferred Stock issuable to the
Vendor hereunder and the Series C Convertible Preferred Stock and the
Class A Common Stock issuable upon exchange thereof following the
approval of the International Proposals by the stockholders of
International are being acquired by the Vendor for its own account, not
as a nominee or agent, and not with a view to sale or distribution
within the meaning of the U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT") and the rules and regulations thereunder, and the
Vendor will not distribute such shares in violation of the Securities
Act.

3.11.2. The Vendor (A) acknowledges that as of the Closing Date
the shares of Series 2 Preferred Stock issuable hereunder and the
Series C Convertible Preferred Stock and the Class A Common Stock
issuable upon exchange thereof will not have been registered under the
Securities Act and must be held indefinitely by the Vendor unless they
are subsequently registered under the Securities Act pursuant to
section 5.4 hereof or otherwise or an exemption from registration is
available, (B) is aware that any routine sale of shares of Class A
Common Stock under Rule 144 promulgated by the U.S. Securities and
Exchange Commission ("SEC") under the Securities Act may be made only
in limited amounts and in accordance with the terms and conditions of
the Rule and that in such cases where that Rule is not applicable,
compliance with some other registration exemption will be required, and
(C) is aware that Rule 144 is not presently available for use by the
Vendor for resale of any such shares.

3.11.3. The Vendor acknowledges that the certificates evidencing
the shares of Series 2 Preferred Stock, the Class A Common Stock and
Series C Convertible Preferred Stock issuable to it hereunder will bear
the legends set forth in Schedule 3.11.3 attached hereto.

3.11.4. As the controlling stockholder of International, Xxxxxxxxx
confirms that it has had access to all information about the business
and financial condition of International that it requires in order to
effect the transactions contemplated by this Agreement.

3.12. TAXES

3.12.1. Xxxxxxxxx and the Company (or a predecessor thereof) have
paid or accrued on the Newspaper Financial Statements all foreign,
federal, provincial and local taxes in respect of the Newspapers and
filed or caused to be filed all tax returns on or prior to the Closing
Date required to be filed in respect of the Newspapers and accurately
reported in all material respects all information

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required to be included on such returns in respect of the Newspapers.
Neither Xxxxxxxxx in respect of the Newspapers nor the Company (or any
predecessor thereof) has received written notice of or otherwise has
actual knowledge of an audit or examination currently in progress of
any tax return of the Newspapers. There are no proposed assessments of
taxes asserted in writing against Xxxxxxxxx or the Company (or any
predecessor thereof) in respect of any of the Newspapers or proposed
adjustments asserted in writing to any tax returns filed by Xxxxxxxxx
or the Company (or any predecessor thereof) in respect of any of the
Newspapers. Neither Xxxxxxxxx nor the Company (or any predecessor
thereof) is a party to any material action or proceeding by any
governmental authority for assessment or collection of taxes or
penalties or interest in respect of the Newspapers, nor has any
material claim for such assessment or collection been asserted in
writing against any of them.

3.12.2. The Canadian Newspaper Group qualifies as "Canadian
newspapers or periodicals" as defined in section 19 of the Income Tax
Act (Canada) and, after giving effect to the transactions contemplated
by this Agreement, the UniMedia B Agreement, the Sterling Purchase
Agreement and the Exchange Agreement (as defined in Section 6.8), the
Canadian Newspaper Group will continue to so qualify.

3.13. EMPLOYMENT MATTERS

Schedule 3.13 sets forth the collective bargaining
agreements that expire within seven (7) years of the date hereof with
respect to the Newspapers. Except as referred to in Schedule 3.13, there
is no material work stoppage or other concerted action or material grievance,
strike or dispute existing or threatened against any of the Newspapers. Except
as set out in Schedule 3.13, Xxxxxxxxx, the Company and the Newspapers are in
material compliance with all applicable laws and regulations relating to
employees of the Newspapers, including those related to terms and conditions
of employment, collective bargaining and discrimination.

3.14. CERTAIN FORECASTS

The financial forecasts of the Canadian Newspaper Group that were
provided by Xxxxxxxxx to the special committee of independent directors of the
Board of Directors of International (the "SPECIAL COMMITTEE") (i) were developed
by management of Xxxxxxxxx and its subsidiaries based on information that
management of Xxxxxxxxx and the Company prepared in good faith, (ii) utilize
assumptions which management of Xxxxxxxxx and the Company believe to be
reasonable under the circumstances, (iii) represent the good faith estimate and
judgment of management of Xxxxxxxxx, as of the date of such forecasts, of the
Canadian Newspaper Group's expected future financial performance and (iv) do not
reflect the expected results of any newspaper or publication that is not
included in the Canadian Newspaper Group or omit the expected results of any
newspapers or publication that is included in the Canadian Newspaper Group.

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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL.

International hereby represents and warrants to Xxxxxxxxx and the
Vendor as follows:

4.1. DUE INCORPORATION OF INTERNATIONAL; AUTHORITY CONCERNING THIS
AGREEMENT.

International is a corporation incorporated and existing and in good
standing under the laws of the State of Delaware, and has the requisite
corporate power and authority to carry on its business and operations as
presently conducted by it and to own, lease and operate its properties and
assets. International has the requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. The Special Committee, pursuant
to authority duly delegated to it by the Board of Directors of International,
has approved this Agreement and the Exchange Agreement. The Board of Directors
of International has ratified this Agreement and the Exchange Agreement and
recommended approval by International stockholders of the issuance of Class A
Common Stock and Series C Convertible Preferred Stock in exchange for Series 2
Preferred Stock to be issued pursuant to this Agreement and the Exchange
Agreement, as contemplated by the International Proposals (as defined in section
5.2 hereof). The execution and delivery of this Agreement and the Exchange
Agreement by International, the performance by International of its obligations
hereunder and thereunder and the consummation by International of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of International,
subject to approval of the International Proposals by the stockholders of
International. This Agreement has been duly and validly executed and delivered
by International and (assuming due and valid authorization, execution and
delivery by Xxxxxxxxx and the Vendor,) constitutes the legal, valid and binding
agreement of International and is enforceable in accordance with its terms.

4.2. CAPITALIZATION.

The authorized capital stock of International consists of 250,000,000
shares of Class A Common Stock ("CLASS A COMMON STOCK"), 50,000,000 shares of
Class B Common Stock, $.01 par value ("CLASS B COMMON STOCK"), and 20,000,000
shares of preferred stock, $.01 par value ("INTERNATIONAL PREFERRED STOCK"), of
which 69,565,754 shares of Class A Common Stock, 14,990,000 shares of Class B
Common Stock, and 739,500 shares of Series A Preferred Stock, par value $.01 per
share ("SERIES A PREFERRED STOCK"), and 10,350,000 shares of Series B
Convertible Preferred Stock, par value $.01 per share ("Series B Preferred
Stock") are issued and outstanding. International has also issued 20,700,000
depository shares ("PRIDES") each representing a one-half share of
International's Series B Preferred Stock. The Class A Common Stock and Class B
Common Stock (collectively, the "INTERNATIONAL COMMON STOCK") and Series B
Preferred Stock constitute the only outstanding voting securities of
International. Upon receipt of stockholder approval of the International
Proposals (as defined below), the authorized capital stock will be increased to
420,000,000, of which 120,000,000

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shares of Preferred Stock will be authorized. Options to purchase an aggregate
of 1,281,500 shares of Class A Common Stock have been granted under the
International 1994 Stock Option Plan, as amended (the "INTERNATIONAL 1994 STOCK
OPTION PLAN"), an additional 189,640 shares of Class A Common Stock have been
reserved for issuance under the International 1994 Stock Option Plan, and
5,156,915 shares of Class A Common Stock have been reserved for issuance under
the International 1997 Stock Incentive Plan. International has also reserved for
issuance the requisite shares of Class A Common Stock issuable upon conversion
of shares of Class B Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Convertible Preferred Stock. Except for (i) options granted
under the International 1994 Stock Option Plan and options that may be granted
under the International 1997 Stock Incentive Plan, (ii) outstanding shares of
Series A Preferred Stock, Series B Preferred Stock and Class B Common Stock, all
of which are convertible into shares of Class A Common Stock, and (iii) shares
of Series 1 Preferred Stock and Series 2 Preferred Stock to be issued to
Xxxxxxxxx or the Vendor hereunder, shares of Series C Convertible Preferred
Stock issuable to Xxxxxxxxx or the Vendor on exchange of the Series 2 Preferred
Stock, and shares of Class A Common Stock issuable to Xxxxxxxxx or the Vendor on
exchange or conversion of the Series 1 Preferred Stock, Series 2 Preferred Stock
and Series C Convertible Preferred Stock, all pursuant to this Agreement and the
UniMedia Class B Stock Agreement and the Exchange Agreement, each dated the date
hereof among Xxxxxxxxx, the Vendor and International, there are no outstanding
or authorized subscriptions, agreements, options, warrants, calls or other
commitments, rights (including exchange or conversion rights) or privileges
(whether preemptive or contractual) pursuant to which International is or may
become obligated to issue, sell or transfer any shares of its capital stock or
any debt or other security of International which is convertible or exchangeable
into, or evidences the right to subscribe for, any shares of capital stock of
International.

4.3. GOVERNMENTAL FILINGS.

Except for filings under the Securities Act, the U.S. Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the Securities Act
(Ontario), applicable state securities laws, the General Corporation Law of
Delaware with respect to the Class A Common Stock, the Series 2 Preferred Stock
and the Series C Convertible Preferred Stock to be issued to the Vendor
hereunder, and the New York Stock Exchange, no notice, report or other filing is
required to be made by International with, nor is any material consent,
registration, approval, permit or authorization required to be obtained by
International from, any Governmental Entity in connection with the execution and
delivery of this Agreement, the issuance and delivery of the shares of Series 2
Preferred Stock to the Vendor hereunder, or the consummation by it of the
transactions contemplated hereby.

4.4. NO VIOLATIONS.

Except for the approval of International's stockholders to permit the
issuance of Class A Common Stock and Series C Convertible Preferred Stock upon
exchange of the Series 1 and 2 Preferred Stock pursuant to the Exchange
Agreement (as defined below) and the issuance of Class A Common Stock upon
conversion of the Series C Convertible Preferred Stock, the

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execution and delivery of this Agreement by International does not, and the
consummation by it of any of the transactions contemplated hereby will not,
require the consent or approval of any unrelated party or constitute or result
in (i) a breach or violation of, or a default (or an event which with notice or
lapse of time or both would become a default) under the Restated Certificate of
Incorporation or By-laws of International, (ii) a breach or violation of, a
default (or an event which with notice or lapse of time or both would become a
default) under, a right to terminate, amend, cancel or accelerate, or the
creation of a lien, pledge, security interest or other encumbrance on assets
(with or without the giving of notice or the lapse of time) pursuant to, any
provision of any material agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation of International, or any law, statute, rule,
ordinance or regulation or judgment, decree, order, award, injunction or
governmental or non-governmental permit or license to which International is
subject to or by which International or any property of International is bound
or affected, except, in the case of clause (ii) above, such breaches,
violations, defaults, terminations, amendments, cancellations, accelerations,
encumbrances or changes that, individually or in the aggregate, have not had and
are not reasonably likely to have a material adverse effect on International.

4.5. BROKERS AND FINDERS.

Neither International nor any of its officers, directors or employees
has employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finders' fees in connection with
the transactions contemplated hereby, except that the Special Committee has
retained RBC Dominion Securities Inc. ("RBC DOMINION SECURITIES") as its
financial advisor.

4.6. PRIVATE OFFERING.

Assuming the accuracy of the representations of Xxxxxxxxx and the
Vendor contained in section 3.11 hereof, the offer, issuance and delivery to the
Vendor of the shares of Series 2 Preferred Stock pursuant to this Agreement will
be exempt from registration under the Securities Act.

ARTICLE 5.
COVENANTS OF THE PARTIES.

5.1. STANDSTILL.

Xxxxxxxxx and the Vendor jointly and severally agree that
from the date hereof to the Closing Date or the earlier termination of this
Agreement in accordance with Article 8 hereof, and except as otherwise
consented to in writing by the Chairman of the Special Committee or as
specifically required, permitted or contemplated by this Agreement, they
will:

5.1.1. not sell, lease, assign, transfer or otherwise dispose of
any of the Shares or any interests therein, or create or permit any
Encumbrances affecting the Shares (other than those Encumbrances
referred to on Schedules 3.2.1

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and 3.2.2(A) attached hereto, all of which will be terminated on or
prior to Closing);

5.1.2. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby
the Company would undertake a merger, consolidation, amalgamation, or
sale, lease, transfer, assignment or other disposition of all or any
significant portion of its properties or assets, or otherwise resulting
in a change in control of the Company or any of the Newspapers;

5.1.3. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby the
Company would incur any indebtedness for borrowed money or create any
Encumbrances affecting any of its assets, other than (A) indebtedness
incurred pursuant to the credit facilities described in Schedule
3.2.2(A), (B) Encumbrances arising in the ordinary course of business
which constitute Permitted Encumbrances, (C) intercompany transactions
among Xxxxxxxxx, the Vendor, the Company, UniMedia Inc. and UniMedia
Group consistent with past practices, and (D) indebtedness incurred by
the Company from Xxxxxxxxx in an amount necessary to pay in full
indebtedness outstanding pursuant to the credit facilities described in
Schedule 3.2.2(A), which indebtedness will be sold by Xxxxxxxxx to HCPH
on the Closing Date for the principal amount thereof; or

5.1.4. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby the
Company would (A) alter, amend or repeal any provision of its Articles
or By-laws (or similar governing documents), (B) declare, set aside,
make or pay any dividends (in cash or otherwise) or other distributions
on or with respect to its share capital other than as contemplated
herein or (C) increase or reclassify the number of shares authorized or
issued and outstanding of its share capital or grant any option,
warrant, call, commitment, right or agreement of any character relating
to its share capital or any securities convertible or exchangeable into
its share capital.

5.2. INTERNATIONAL STOCKHOLDERS' APPROVAL.

International shall take, in accordance with the requirements of
applicable law, the New York Stock Exchange and International's Restated
Certificate of Incorporation and By-Laws, all action necessary to convene a
meeting of holders of International Common Stock, Series B Preferred Stock
represented by PRIDES, at which Xxxxxxxxx is entitled to vote, as promptly as
practicable after the Closing Date. At such meeting, International stockholders
will be asked to consider and vote upon the following proposals: (i) to permit
the issuance by International of shares of Class A Common Stock and Series C
Convertible Preferred Stock upon exchange by the Vendor of the Series 2
Preferred Stock in accordance with the Exchange Agreement, (ii) to permit the
issuance by International of shares of Class A Common Stock upon

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conversion of the Series C Convertible Preferred Stock, and (iii) to increase
the authorized capital of International from 20 million shares to 120 million
shares of Preferred Stock (collectively, the "INTERNATIONAL PROPOSALS"), among
other matters at such meeting. At such meeting Xxxxxxxxx agrees to vote or cause
to be voted all shares of Class A Common Stock and Class B Common Stock of
International, held by it or its subsidiaries in favour of the International
Proposals. International shall take all lawful action to solicit such approval
and all lawful action necessary or helpful to secure the affirmative vote of
holders of International Common Stock and Series B Preferred Stock represented
by PRIDES required to approve the foregoing matters.

5.3. FILINGS; OTHER ACTIONS.

5.3.1. As soon as practicable after the Closing, International and
Xxxxxxxxx shall cooperate to prepare and file promptly with the SEC
preliminary proxy solicitation materials (the "PRELIMINARY PROXY
STATEMENT") for the International stockholders meeting, including
obtaining all such information (financial or other) as may be required
under applicable law and rules and regulations of the SEC with respect
to the International stockholders meeting and the International
Proposals. After review by the SEC, International shall mail a
definitive version of such proxy solicitation materials (the "PROXY
STATEMENT") to all stockholders of record of International. The Proxy
Statement shall contain the recommendation of the Board of Directors of
International and the Special Committee that holders of International
Common Stock and of Series B Preferred Stock represented by PRIDES vote
in favour of approval of the International Proposals. Prior to
submitting the Preliminary Proxy Statement and the Proxy Statement and
any such amendment, supplement or revision to the SEC or to
International's stockholders, such Preliminary Proxy Statement, Proxy
Statement and amendment, supplement or revision will be submitted to
Xxxxxxxxx for its review and comment.

5.3.2. Each party hereto shall cooperate with the other party
hereto and use all reasonable efforts to prepare and file promptly all
necessary documentation, to effect all necessary applications, notices,
petitions, filings and other documents, and to obtain as promptly as
practicable all necessary permits, consents, orders, approvals and
authorizations of, or any exemption from, all third parties and
Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement. Each party agrees, to the
extent either deems necessary or appropriate, to request "cold comfort
letters" or similar assurances from KPMG Peat Marwick or other
accounting firms with audit responsibility for financial statements
included in the Proxy Statement regarding the pro forma financial
statements and unaudited financial statements to be included in the
Proxy Statement and such other matters (including without limitation
other securities laws matters affecting Xxxxxxxxx or International, as
the case may be) as may be identified. Each party shall have the right
to review in advance, and to the extent practicable each will consult
with the other on, all the information relating to the other party and
any of their respective subsidiaries and associated companies which

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are to appear in any filing to be made with, or written materials to be
submitted to, any third party or any Governmental Entity in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. Each party hereto agrees that it will consult
with the other party hereto with respect to the obtaining of all
permits, consents, orders, approvals and authorizations of all third
parties and any Governmental Entity necessary or advisable to
consummate the transactions contemplated by this Agreement and each
party will keep the other party hereto apprised of the status of
matters relating to the transactions contemplated hereby and thereby.

5.3.3. Each party shall promptly furnish each other party with
copies of written communications received by such party, or any of its
subsidiaries, affiliates or associates from, or delivered by any of the
foregoing to, any unrelated party or Governmental Entity in respect of
the transactions contemplated, in each case subject to applicable laws
relating to the exchange of information as advised by independent
counsel in writing.

5.4. REGISTRATION OF CERTAIN SECURITIES.

Upon request by Xxxxxxxxx following the Closing, International will use
commercially reasonable efforts to cause the registration under the Securities
Act of the shares of Series C Convertible Preferred Stock and Class A Common
Stock issuable to Xxxxxxxxx or the Vendor on exchange of the Series 2 Preferred
Stock, such registration to be effected by means of filing one or more
Registration Statements with the SEC (the "REGISTRATION STATEMENTS"). All costs
and expenses of such registration incurred on or after the date hereof,
including any additional SEC filing fees, will be borne by International. Such
Registration Statements may, if so requested by Xxxxxxxxx, reflect one or more
pledges of shares of Series C Convertible Preferred Stock and Class A Common
Stock issuable in exchange for the Series 2 Preferred Stock in favour of lenders
to Xxxxxxxxx or the Vendor, subject to receipt by International of customary
assurances to permit sales or distributions of such securities in accordance
with applicable law.

5.5. ASSUMPTIONS OF OBLIGATIONS UNDER SOGIC AGREEMENT.

International is an entity which is directly or
indirectly controlled by Xxxxxxxxx and undertakes to assume all of the
obligations of Xxxxxxxxx under the agreement executed among Xxxxxxxxx,
UniMedia Group and la Societe Generale des Industries Culturelles on August 8,
1988 (the "SOGIC AGREEMENT") as if it were a party to the SOGIC Agreement.

5.6. NON-COMPETITION

5.6.1. Xxxxxxxxx agrees that neither it nor any of its
subsidiaries will, for a period of five (5) years after the Closing
Date, without the prior written consent of International, either
directly or indirectly, undertake or carry on or be engaged or have any
financial interest in any newspaper, shopper or other similar
publication

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carrying advertising, for which the circulation or distribution is
primarily in the communities where the Newspapers are currently
published or within a radius of ten (10) miles of the centre point of
any such community (such geographic area being hereinafter referred to
as the "Restricted Area"); provided, however, that the foregoing
provisions shall not apply to (A) the publication or the future
acquisition of any publication that is circulated to a national market
so long as such newspaper does not publish or distribute any regional,
community, zoned or similar edition in the Restricted Area; (B) the
ownership, directly or indirectly, of less than five percent (5%) of
any class of securities of any publicly-traded company; or (C) for
greater certainty, prohibit the interest that Xxxxxxxxx has in HCPH,
Southam Inc., The Financial Post Company, Saturday Night Magazine
Limited, and their respective subsidiaries and operations.

5.6.2. Xxxxxxxxx acknowledges that in the event of any violation
of the covenants contained in this section 5.6.1 hereof,
International's damages will be difficult to ascertain and
International's remedy at law will be inadequate. Accordingly,
Xxxxxxxxx agrees that, in addition to such remedies as International
may have at law, International shall be entitled to specific
performance of such covenants hereunder and to an injunction to prevent
any continuing violation thereof.

5.6.3. If any of the provisions of or covenants contained in this
section hereof is hereafter construed to be invalid or unenforceable in
any jurisdiction, the same shall not affect the remainder of the
provisions or the enforceability thereof in any other jurisdiction,
which shall be given full effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions
of or covenants contained herein is held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the
parties agree that the court making such determination shall have the
power to reduce the duration or geographical scope of such provision or
covenant and, in its reduced form, said provision or covenant shall be
enforceable; provided, however, that the determination of such court
shall not affect the enforceability of section 5.6.1 in any other
jurisdiction.

5.7. OWNERSHIP CHANGES

Xxxxxxxxx owns, through wholly-owned subsidiaries, 50 Series A
Preferred Shares in the capital of HCPH (the "HCPH SHARES"), representing 50% of
the outstanding voting stock of HCPH. Xxxxxxxxx will not, either directly or
indirectly through its subsidiaries or affiliates, issue, sell, exchange,
assign, transfer, dispose, mortgage, charge, pledge, encumber, grant a security
interest in or otherwise deal with any security of Xxxxxxxxx or any of its
subsidiaries or affiliates, in any manner which is materially prejudicial to the
direct or indirect interests of International in the Canadian Newspaper Group by
reason of changes in ownership that would cause a material adverse impact on the
profitability, ownership or operation of the Canadian

25
- 18 -

Newspaper Group by reason of section 19 of the Income Tax Act (Canada).

ARTICLE 6.
CONDITIONS TO THE OBLIGATIONS OF INTERNATIONAL.

The obligations of International to consummate the transactions
contemplated hereby are subject to the fulfilment of the following conditions,
any one or more of which may be waived by International:

6.1. REPRESENTATIONS AND WARRANTIES TRUE.

At the Closing Date, the representations and warranties of Xxxxxxxxx
and the Vendor contained in this Agreement shall be true and correct in all
material respects and at and as of such date and time as if made on and as of
such date and time, other than any such representations and warranties which are
made as of a specified earlier date, which shall be true and correct in all
material respects at and as of such date; and at and as of the Closing Date
Xxxxxxxxx and the Vendor shall have delivered to International certificates to
such effect signed by an officer of the relevant company acceptable to
International.

6.2. PERFORMANCE BY XXXXXXXXX AND THE VENDOR.

From the date of this Agreement, each of the obligations of Xxxxxxxxx
and the Vendor to be performed by it on or before the Closing Date pursuant to
the terms of this Agreement shall have been duly performed in all material
respects at the Closing Date; and at and as of the Closing Date, Xxxxxxxxx and
the Vendor shall have delivered to International certificates to such effect
signed by an officer of the relevant company acceptable to International.

6.3. LEGAL OPINIONS.

International shall have been furnished with opinions of
Tory Xxxx XxxXxxxxxxx & Xxxxxxxxxx, Xxxxxxxx Xxxxxxxxxx and Xxxxxxx XxXxxxxx
Stirling Scales, each dated as of the Closing Date and substantially in the
forms attached hereto as Schedules 6.3(a), 6.3(b) and 6.3(c), respectively, to
this Agreement.

6.4. NO SUITS OR PROCEEDINGS CHALLENGING TRANSACTION.

There shall be no pending or threatened suits, actions, proceedings,
governmental inquiries or investigations of any kind which seek to enjoin,
prevent or otherwise interfere with the transactions contemplated hereby or
otherwise question the validity or legality of such transactions.

26
- 19 -

6.5. CERTAIN CONSENTS.

Xxxxxxxxx, the Vendor, the Company and International shall have
obtained all consents from unrelated parties and Governmental Entities required
to consummate the transactions contemplated by this Agreement.

6.6. INCOME TAX ACT.

Prior to the Closing Date there shall have been no amendment to the
Income Tax Act (Canada) including Section 19 thereof that would have a material
adverse impact on the profitability, ownership or operation by the Company of
the Newspapers after giving effect to the transactions contemplated hereby and
there shall have been no xxxx read in Parliament that would have such material
adverse impact if enacted into law.

6.7. RBC DOMINION FAIRNESS OPINION.

International shall have obtained from RBC Dominion Securities an
opinion in form satisfactory to the Special Committee to the effect that the
aggregate consideration to be paid for the Canadian Newspaper Group by
International (either directly, or indirectly through HCPH) pursuant to (i) this
Agreement, (ii) the UniMedia B Agreement, (iii) the Sterling Purchase Agreement
and (iv) the Exchange Agreement (including the term sheets attached thereto) is
fair, from a financial point of view, to International and the holders of
International's common stock and Series B Preferred Stock other than Xxxxxxxxx.

6.8. EXCHANGE AGREEMENT.

Xxxxxxxxx, the Vendor and International shall have entered into an
Exchange Agreement (the "Exchange Agreement") as of the Closing Date in
substantially the form attached hereto as Schedule 6.8.

6.9. OTHER TRANSACTION DOCUMENTS.

International shall have received on or prior to the Closing Date:

6.9.1. certificates evidencing the incumbency of the officers of
Xxxxxxxxx and the Vendor executing this Agreement on its behalf and of
their authority to do so;

6.9.2. certified copies of the Articles and By-laws (or similar
governing documents) of the Company;

6.9.3. certificates of status (or the equivalent under the laws of
their respective jurisdictions of incorporation) of recent date for
Xxxxxxxxx, the Vendor and the Company;

27
- 20 -

6.9.4. certified copies of the resolutions of the Board of
Directors of the Vendor authorizing the transactions contemplated
hereunder to take place on the Closing Date;

6.9.5. stock certificates representing all of the Shares
registered in the name of the Vendor together with customary searches
of public records in Nova Scotia reasonably satisfactory to counsel to
International and to its lenders confirming that such interests are
free and clear of any Encumbrances; and

6.9.6. customary documentation reasonably satisfactory to counsel
to International and to its lenders confirming (A) an undertaking from
Xxxxxxxxx'x lenders to release all obligations of the Company and its
subsidiaries with respect to indebtedness of Xxxxxxxxx, the Vendor or
of any other person and the Encumbrances arising under the credit
facilities described in Schedule 3.2.2(A) and (B) that the shares of
the Company and the Newspaper Intangible Assets are free and clear of
any other Encumbrances other than Permitted Encumbrances.

ARTICLE 7.
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX AND THE VENDOR

The obligations of Xxxxxxxxx and the Vendor to consummate the
transactions contemplated hereby are subject to the fulfilment of the
following conditions, any one or more of which may be waived by Xxxxxxxxx:

7.1. REPRESENTATIONS AND WARRANTIES TRUE.

As of the Closing Date, the representations and warranties of
International contained in this Agreement shall be true and correct in all
material respects at and as of such date and time as if made on and as of such
date and time, other than any such representations and warranties which are made
as of a specified earlier date, which shall be true and correct in all material
respects at and as of such specified date; and at and as of the Closing Date
International shall have delivered to Xxxxxxxxx and the Vendor a certificate to
such effect signed by an officer of International acceptable to Xxxxxxxxx and
the Vendor.

7.2. PERFORMANCE BY INTERNATIONAL.

From the date of this Agreement, each of the obligations of
International to be performed on or before the Closing Date pursuant to the
terms of this Agreement shall have been duly performed in all material respects
at the Closing Date and at and as of the Closing Date International shall have
delivered to Xxxxxxxxx and the Vendor a certificate to such effect signed on
behalf of International by an officer of International acceptable to Xxxxxxxxx
and the Vendor.

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7.3. LEGAL OPINIONS.

Xxxxxxxxx and the Vendor shall have been furnished with the opinion
of Xxxxxxxxxxx & Xxxxxxxx LLP dated as of the Closing Date and substantially in
the form attached hereto as Schedule 7.3 to this Agreement.

7.4. NO SUITS OR PROCEEDINGS CHALLENGING TRANSACTION.

7.5. CERTAIN CONSENTS.

7.6. INCOME TAX ACT.

Prior to the Closing Date there shall have been no amendment to the
Income Tax Act (Canada), including Section 19 thereof that would have a material
adverse impact on the profitability, ownership or operation by the Company of
the Newspapers after giving effect to the transactions contemplated hereby and
there shall have been no xxxx read in Parliament that would have such material
adverse impact if enacted into law.

7.7. EXCHANGE AGREEMENT.

Xxxxxxxxx, the Vendor and International shall have entered into the
Exchange Agreement as of the Closing Date.

7.8. RBC DOMINION FAIRNESS OPINION.

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7.9. OTHER TRANSACTION DOCUMENTS.

Xxxxxxxxx and the Vendor shall have received on or prior to the Closing
Date:

7.9.1. certificate evidencing the incumbency of the officers of
International executing this Agreement on its behalf and their
authority to do so;

7.9.2. certified copy of the Restated Certificate of Incorporation
or similar charter documents and By-laws of International including
without limitation the Certificates of Designations creating the Series
2 Preferred Stock;

7.9.3. certificate of good standing of recent date for
International; and

7.9.4. certified copies of the resolutions of the Board of
Directors of International and of the Special Committee authorizing or
recommending the transactions contemplated hereunder to take place on
the Closing Date.

ARTICLE 8.
TERMINATION.

8.1. TERMINATION BY MUTUAL CONSENT.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date by the mutual
consent of Xxxxxxxxx (on behalf of itself and the Vendor) and International by
action of their respective Boards of Directors.

8.2. TERMINATION BY EITHER XXXXXXXXX OR INTERNATIONAL.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by action of the Board of Directors of either Xxxxxxxxx
(acting on behalf of itself and the Vendor) or International if: (i) the Closing
shall not have occurred on or before December 31, 1997; or (ii) a Governmental
Entity of competent jurisdiction shall have issued an order, or taken any other
action, permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such order or other
action shall have become final and not appealable; provided, however, that in
the case of a termination pursuant to clause (i) above, the terminating party
shall not have breached or failed to perform in any material respect its
obligations under this Agreement.

8.3. TERMINATION BY XXXXXXXXX.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date by action of the
Board of Directors of Xxxxxxxxx (acting on behalf of itself and the Vendor) if
there has been a material breach or failure to perform by International of any
covenant or agreement contained in this Agreement which is

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not curable or, if curable, is not cured within five (5) days after written
notice of such breach is given by Xxxxxxxxx to International.

8.4. TERMINATION BY INTERNATIONAL.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned prior to the Closing Date by action of the Board of
Directors of International if there has been a material breach or failure to
perform by Xxxxxxxxx or the Vendor of any covenant or agreement contained in
this Agreement which is not curable or, if curable, is not cured within five (5)
days after written notice of such breach is given by International to Xxxxxxxxx
or the Vendor as the case may be.

8.5. SPECIAL COMMITTEE.

In any event in which International intends to consent to or seek
termination of this Agreement pursuant to this Article 8, such action must be
taken by the Board of Directors of International following receipt of a
favourable recommendation thereof by the Special Committee.

8.6. EFFECT OF TERMINATION AND ABANDONMENT.

In the event of the termination and abandonment of this Agreement,
Xxxxxxxxx, the Vendor and International shall have no obligation or liability to
the others.

ARTICLE 9.
INDEMNIFICATION.

9.1. INDEMNITY

Xxxxxxxxx and the Vendor shall, jointly and severally, indemnify and
save International harmless for and from any loss, damages or deficiencies
suffered by International or by the Company or any subsidiary thereof as a
result of any breach of representation, warranty or covenant on the part of
Xxxxxxxxx or the Vendor contained in this Agreement and all claims, demands,
costs and expenses, including legal fees, in respect of the foregoing.

9.2. LIMITATIONS

The obligations of Xxxxxxxxx and the Vendor to indemnify
International in accordance with the foregoing shall be subject to the
following:

9.2.1. any claim arising as a result of a breach of (i) a
representation or warranty contained in Article 3 or (ii) a covenant
contained in Article 5 shall be made not later than the date on which
pursuant to section 10.1 such representation, warranty or covenant
terminated;

9.2.2. their obligation to indemnify International (except in
respect of any obligations to indemnify arising from section 3.10)
shall only apply if

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indemnification claims, in the aggregate, exceed Cdn.$1,000,000 in
which case they shall be liable therefor only to the extent that such
claims exceed Cdn. $500,000 to a maximum aggregate amount equal to the
Total Purchase Price.

ARTICLE 10.
MISCELLANEOUS.

10.1. SURVIVAL.

Only the agreements and covenants of the parties contained in Articles
5 and 10, and Section 8.6 hereof shall survive the Closing Date without time
limit, except as otherwise specified therein. All representations, warranties
and other agreements and covenants shall be deemed to be conditions of the
transactions contemplated hereby and shall not survive the Closing Date;
provided, however, that the representations and warranties of Xxxxxxxxx and the
Vendor contained in Sections 3.1 and 3.2 hereof and International's
representations and warranties contained in Sections 4.1 and 4.2 hereof shall
survive the Closing Date without time limit; and the representations and
warranties of Xxxxxxxxx and the Vendor contained in Sections 3.3, 3.4, 3.5, 3.6,
3.7, 3.8, 3.9, 3.10, 3.11, 3.12.2, 3.13 and 3.14, International's
representations and warranties contained in Sections 4.3, 4.4, 4.5 and 4.6 shall
survive until the second anniversary of the Closing Date and the representations
and warranties by Xxxxxxxxx and the Vendor made in Section 3.12.1 shall survive
for the applicable statute of limitations.. If the transactions contemplated
hereby shall be abandoned and this Agreement terminated, only the agreements and
covenants of the parties contained in Sections 10.1, 10.2, 10.5, 10.10, 10.12
and 10.14 hereof shall survive such abandonment and termination.

10.2. CERTAIN EXPENSES.

Whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses.

10.3. DOLLAR AMOUNTS.

Except as expressly indicated, all dollar amounts in this Agreement are
stated in and shall be interpreted to be in United States dollars.

10.4. FURTHER ASSURANCES.

International, Xxxxxxxxx and the Vendor shall use its reasonable
commercial efforts to perform and fulfil all conditions and obligations on its
part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out. From
time to time as and when requested by International or its successors or
assigns, the Vendor shall execute and deliver such deeds and other instruments
of transfer and shall take or cause to be taken such further or other actions as
shall be necessary or advisable in order to carry out the purpose and intention
of this Agreement or to vest or perfect in

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International, or to confirm of record or otherwise to International, title to
and possession of all of the Shares. From time to time as and when requested by
Xxxxxxxxx, the Vendor or their successors and assigns, International shall
execute and deliver such further deeds and other instruments and shall take or
cause to be taken such further or other actions as shall be necessary or
advisable in order to carry out the purpose and intention of this Agreement.

10.5. PRESS RELEASES, ANNOUNCEMENTS AND COMMUNICATIONS.

No press release or other public announcements related to this
Agreement or the transactions contemplated hereby will be issued after the date
hereof without the prior approval of Xxxxxxxxx and International, such approval
not to be unreasonably withheld or delayed, except for any public disclosure
that Xxxxxxxxx or International in good faith believes is required by law or by
obligations relating to any securities exchange or market. The parties agree to
use reasonable efforts to consult with each other before taking any action that
would require the issuance of any press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby.

10.6. AMENDMENT AND MODIFICATION.

This Agreement may be amended, modified or supplemented at any time
prior to or after the Closing Date, but only by written agreement that
identifies this Agreement and is signed by all of the parties hereto. Any
amendment, modification or supplement hereto shall be effective as to
International only if in writing signed by the Chairman of the Special Committee
on behalf of International.

10.7. WAIVER OF COMPLIANCE; CONSENTS.

Except as otherwise provided in this Agreement, any failure of any of
the parties to comply with any obligation, representation, warranty, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing. International shall
not waive, nor shall International be deemed to have waived, any obligations of
Xxxxxxxxx or the Vendor hereunder or any other benefits to International arising
under this Agreement unless approved by the Board of Directors of International
following receipt of a favourable recommendation thereof by the Special
Committee.

10.8. NOTICES.

All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been given when received if delivered by
hand, courier or by facsimile transmission to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

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(a) If to Xxxxxxxxx or the Vendor:

Xxxxxxxxx Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0

Attention: Xxxxx X. Xxxxxxxx
Vice-President and General Counsel

Facsimile No.: (000) 000-0000

Copies to:

Tory Xxxx XxxXxxxxxxx & Binnington
Suite 3000, Aetna Tower
P.O. Box 270
Toronto-Dominion Centre
Toronto, Ontario
Canada M5K 1N2

Attention: Xxxx XxXxxxxxxx

Facsimile No.: (000) 000-0000

Xxxxxxxx Xxxxxxxxxx
0000 Xxxx Xxxxxxxx Xxxx. Xxxx
Xxxxx 0000
Montreal, P.Q.
Canada H3B 5E9

Attention: Xxxx Xxxxxxxxxx

Facsimile No.: (000) 000-0000

(b) If to International:

Xxxxxxxxx International Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
X.X.X.

Attention: Xxxxxxx X. Xxxxxx,
Vice President - Law and Finance and Secretary

Facsimile No.: (000) 000-0000

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- 27 -

Copies to:

Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
X.X.X.

Attention: Xxxxx X. Xxxxx

Facsimile No.: (000) 000-0000

Xxxxxxxxx International Inc.
Special Committee
c/o Xxxxxxx X. Xxxxx, Chairman
0 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
X.X.X.

Facsimile No.: (000) 000-0000

Copies to:

Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
X.X.X.

Attention: Xxxxxx X. Block

Facsimile No.: (000) 000-0000

10.9. ASSIGNMENT.

Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned by any party hereto without the prior
written consent of the other parties hereto. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns; provided, however,
that International may assign its rights and interests (but not its obligations)
hereunder to HCPH or another subsidiary of International.

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10.10. GOVERNING LAW AND JURISDICTION.

This Agreement shall be governed by and construed in accordance with
the laws of Ontario. Each party hereto submits to the non-exclusive jurisdiction
of the courts of competent jurisdiction of Ontario in connection with any
dispute arising out of or related to this Agreement.

10.11. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, none of
which need contain the signatures of all parties, each of which shall be deemed
an original, and all of which together shall constitute one and the same
instrument.

10.12. NO THIRD PARTY BENEFICIARIES.

No person who is not a party to this Agreement shall be deemed to be
a beneficiary of any provision of this Agreement, and no such person shall have
any claim, cause of action, right or remedy pursuant to this Agreement.

10.13. INTERPRETATION.

The descriptive headings contained in this Agreement are for
convenience of reference only and shall have no effect on the interpretation or
meaning hereof. The word "Agreement" refers to the body of this Agreement and
all Schedules attached hereto or referred to herein. "Herein," "hereof" and the
like refer to this Agreement as a whole. As used in this Agreement, the singular
shall include the plural, the plural shall include the singular and each gender
shall include all genders.

10.14. ENTIRE AGREEMENT.

This Agreement, including the Schedules attached hereto (and any
other instruments executed and delivered at the Closing), embodies the entire
agreement and understanding of the parties hereto with respect to the transfer
of the Shares to International. The Schedules hereto are an integral part of
this Agreement and are incorporated by reference herein. This Agreement
supersedes all prior discussions, negotiations, agreements and understandings
(both written and oral) between the parties with respect to the transfer of the
Shares to International hereunder.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

XXXXXXXXX INC.

By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
Vice-President and General Counsel

UNIMEDIA HOLDING COMPANY

By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
Vice-President and General Counsel

XXXXXXXXX INTERNATIONAL INC.

By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xxxxxxx X. Xxxxxx
Vice President-Law and Finance and
Secretary

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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF HOLLINGER AND THE VENDOR.

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