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<SEC-DOCUMENT>0000006207-08-000007.txt : 20080205
<SEC-HEADER>0000006207-08-000007.hdr.sgml : 20080205
<ACCEPTANCE-DATETIME>20080205145800
ACCESSION NUMBER:		0000006207-08-000007
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080201
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080205
DATE AS OF CHANGE:		20080205

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMREP CORP.
		CENTRAL INDEX KEY:			0000006207
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE [6500]
		IRS NUMBER:				590936128
		STATE OF INCORPORATION:			OK
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04702
		FILM NUMBER:		08575663

	BUSINESS ADDRESS:	
		STREET 1:		300 ALEXANDER PARK
		STREET 2:		SUITE 204
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08540
		BUSINESS PHONE:		(609) 716-8200

	MAIL ADDRESS:	
		STREET 1:		300 ALEXANDER PARK
		STREET 2:		SUITE 204
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08540

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMREP CORP
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN REALTY & PETROLEUM CORP
		DATE OF NAME CHANGE:	19671019
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>axr8k020108.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported):       February 1, 2008
                                                   -----------------------------

                               AMREP CORPORATION
- --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)

Oklahoma                          1-4702                  59-0936128
- --------------------------------------------------------------------------------
(State or Other Jurisdiction      (Commission File        (IRS Employer
of Incorporation)                 Number)                 Identification Number)

300 Alexander Park, Suite 204, Princeton, New Jersey              08540
- --------------------------------------------------------------------------------
      (Address of Principal Executive Offices)                     (Zip Code)

Registrant's telephone number, including area code:  (609) 716-8200
                                                     ---------------------------

                                 Not Applicable
- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the Registrant under any of the
following provisions (see General Instruction A.2. below):

[  ] Written communications  pursuant to Rule 425 under the Securities Act (17
     CFR 230.425)

[  ] Soliciting  material  pursuant to Rule 14a-12 under the Exchange Act (17
     CFR 240.14a-12)

[  ] Pre-commencement  communications  pursuant  to Rule  14d-2(b)  under the
     Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement  communications  pursuant  to Rule  13e-4(c)  under the
     Exchange Act (17 CFR 240.13e-4(c))


<PAGE>

Item 1.01. Entry into a Material Definitive Agreement.

     As reported in Item 2.03 of this Current  Report,  on February 1, 2008, the
Registrant's subsidiaries comprising its Kable Media Services group entered into
a First  Modification to Loan Documents dated as of January 18, 2008 (the "First
Modification"),  to the Second Amended and Restated Loan and Security  Agreement
dated as of January 16, 2007 (the  "Existing  Credit  Agreement"),  with LaSalle
Bank  National  Association.  A copy of the First  Modification  is  included as
Exhibit 10.1 to this Current Report on Form 8-K, and such Exhibit as well as the
description  of the First  Modification  included  in Item 2.03 of this  Current
Report are incorporated into this Item 1.01 by reference.

Item 2.03. Creation of a Direct  Financial  Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.

     On January 16, 2007,  the  Registrant's  subsidiaries  comprising its Kable
Media  Services  group  entered  into  the  Existing  Credit   Agreement.   This
transaction  was reported by the  Registrant  in its Current  Report on Form 8-K
filed January 19, 2007 to which reference is made for a description of the terms
of the Existing Credit Agreement.

     On February 1, 2008, the parties entered into the First Modification.

     The First  Modification  modifies the Existing Credit Agreement and related
loan  documents,  among other things,  by (a)  increasing the amount that may be
borrowed  for  capital  expenditures  from $1.5  million  to $4.5  million,  (b)
according  to the  borrowers  the  right to  reborrow  the  amounts  of  capital
expenditure loans that have been repaid,  (c) permitting the borrowers to select
as the interest rate for any capital  expenditure loan (i) a floating rate equal
to reserve  adjusted  LIBOR,  or (ii) a fixed rate based on the lender's cost of
funds,  plus,  in either case, a margin  established  quarterly of from 1.5 % to
2.5%  depending  on the  borrowers'  funded  debt to  EBITDA  ratio,  or (iii) a
floating  rate equal to the  lender's  prime rate,  and (d) adds Kable  Products
Services,  Inc., a recently  organized member of the Kable Media Services group,
as a borrower.

     A copy of the  First  Modification  is  included  as  Exhibit  10.1 to this
Current Report on Form 8-K, and such Exhibit is incorporated into this Item 2.03
by reference and any description of the First  Modification in this Item 2.03 is
qualified by such reference.

Item 9.01. Financial Statements and Exhibits.

 (c)  Exhibits.

      Exhibit 10.1. First Modification to Loan Documents dated as of January 18,
                    2008,  modifying  the Second  Amended and Restated  Loan and
                    Security  Agreement dated as of January 16, 2007 among Kable
                    News Company, Inc., Kable Distribution Services, Inc., Kable
                    News Export,  Ltd.,  Kable News  International,  Inc., Kable
                    Fulfillment  Services,  Inc., Kable Fulfillment  Services of
                    Ohio, Inc., Palm Coast Data Holdco, Inc. and Palm Coast Data
                    LLC, and LaSalle Bank National  Association and related loan
                    documents.


                                      -2-
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                                   AMREP CORPORATION
                                                   -----------------
                                                     (Registrant)

                                                   By:  /s/Peter M Pizza
                                                        ------------------------
                                                        Peter M. Pizza
                                                        Vice President and
                                                        Chief Financial Officer

Date:  February 5, 2008
       ----------------


                                  EXHIBIT INDEX

       Exhibit
          No.                                   Description
       --------                                 -----------

         10.1       First Modification to Loan Documents dated as of January 18,
                    2008,   modifying  Second  Amended  and  Restated  Loan  and
                    Security  Agreement dated as of January 16, 2007 among Kable
                    News Company, Inc., Kable Distribution Services, Inc., Kable
                    News Export,  Ltd.,  Kable News  International,  Inc., Kable
                    Fulfillment  Services,  Inc., Kable Fulfillment  Services of
                    Ohio, Inc., Palm Coast Data Holdco, Inc. and Palm Coast Data
                    LLC, and LaSalle Bank National  Association and related loan
                    documents.


                                      -3-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>axr8k020108exh10.txt
<TEXT>
                                                                    Exhibit 10.1

                      FIRST MODIFICATION TO LOAN DOCUMENTS

     THIS FIRST MODIFICATION TO LOAN DOCUMENTS (this "Modification") is made and
entered  into  effective  as of  January  18,  2008,  by and among  KABLE  MEDIA
SERVICES,  INC., a Delaware  corporation ("KMS"),  KABLE NEWS COMPANY,  INC., an
Illinois  corporation  ("KNC"),  KABLE DISTRIBUTION  SERVICES,  INC., a Delaware
corporation ("KDS"),  KABLE NEWS EXPORT, LTD., a Delaware corporation  ("KEXP"),
KABLE  NEWS  INTERNATIONAL,   INC.,  a  Delaware  corporation  ("KINT"),   KABLE
FULFILLMENT  SERVICES,  INC., a Delaware corporation ("KFS"),  KABLE FULFILLMENT
SERVICES OF OHIO, INC., a Delaware corporation ("KFSO"), PALM COAST DATA HOLDCO,
INC., a Delaware  corporation  ("PCD"),  PALM COAST DATA LLC a Delaware  limited
liability  company ("PCD LLC"),  and KABLE PRODUCTS  SERVICES,  INC., a Delaware
corporation  ("KPS")(collectively,  the "Borrowers"),  and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, whose address is 135 South La Salle
Street, Chicago, Illinois 60603 (the "Lender").


                              W I T N E S S E T H:

     A.  Lender and KMS,  KNC,  KDS,  KEXP,  KINT,  KFS,  KFSO,  PCD and PCD LLC
(collectively,  the  "Initial  Borrowers")  heretofore  have been parties to the
following agreements, documents and instruments: (a) Second Amended and Restated
Loan and Security Agreement dated as of January 16, 2007 (the "Loan Agreement");
(b)  Facility A Revolving  Note dated as of January  16,  2007 in the  principal
amount of up to Thirty Five  Million and 00/100  Dollars  ($35,000,000)  made by
Initial Borrowers in favor of Lender ("Facility A Revolving Note"); (c) Facility
B Term  Note  dated as of  January  16,  2007 in the  principal  amount of Three
Million  Thirty Six Thousand  and 00/100  Dollars  ($3,036,000)  made by Initial
Borrowers in favor of Lender ("Facility B Term Note"); (d) Facility C CapEx Note
dated as of January 16, 2007 in the principal amount of One Million Five Hundred
Thousand and 00/100 Dollars  ($1,500,000)  made by Initial Borrowers in favor of
Lender  ("Facility C CapEx  Note");  (e)  Facility D Revolving  Note dated as of
January 16, 2007 in the principal amount of up to Ten Million and 00/100 Dollars
($10,000,000)  made by  Initial  Borrowers  in  favor  of  Lender  ("Facility  D
Revolving  Note",  together with the Facility A Revolving Note,  Facility B Term
Note, Facility C CapEx Note and with all modifications, supplements, amendments,
restatements or extensions thereto or thereof,  being referred to, collectively,
as the "Notes");  and (f) the balance of the other Loan Documents (as defined in
the  Loan  Agreement),   documents  and  instruments   delivered  in  connection
therewith.

     B. Borrowers and Lender are agreeable to modify the Loan  Agreement,  Notes
and other Loan  Documents  to, among other  things,  (i) increase the Facility C
CapEx Loan  Commitment to  $4,500,000,  (ii) add KPS as an additional  Borrower,
(iii)  modify  the  structure  of the  Facility  C Loan to permit  Borrowers  to
reborrow  amounts repaid under the Facility C Loans,  (iv) modify the Facility C
Interest  Rate  options,  and (v) to modify the Loan  Documents  to reflect  all


<PAGE>
amendments, modifications,  extensions, renewals, restatements, substitutions or
replacements  thereof  through  the  date  hereof  pursuant  to  the  terms  and
conditions hereinafter set forth.

     C. On October 31,  2007,  Lender made a Facility C Loan to Borrowers in the
principal  amount of One Million  Five  Hundred  Thousand  Dollars  ($1,500,000)
("Initial  Facility C Draw").  The Facility C Interest  Rate  applicable to this
Initial  Facility C Draw shall be the  Facility  C Fixed  Rate  effective  as of
February 1, 2008.

     NOW THEREFORE, in consideration of the premises and other good and valuable
consideration,  the  receipt  and  adequacy  of which are  hereby  acknowledged,
Borrowers and Lender hereby agree as follows:

     1.  DEFINITIONS.   Capitalized  words  and  phrases  used  herein  without
         -----------
definition shall have the respective meanings ascribed to such words and phrases
in the Loan Agreement.

     2.  AMENDMENTS TO THE LOAN AGREEMENT
         --------------------------------

     2.1 Definitions.
         ------------

     (a) Substituted Definitions. The following definitions contained in Section
         -----------------------                                         -------
1.1 of the Loan Agreement are hereby amended and restated as follows:
- ---

          "Cost of Funds Rate"  shall mean a fixed rate of  interest  based upon
           ------------------
     the  then-current  cost of funds index  published  by Lender for the period
     most nearly  equaling the period of time between the  selection of the Cost
     of Funds Rate and the applicable Maturity Date for such Loan.

          "Eligible  Costs"  shall mean with  respect to a Facility C Loan,  one
           ---------------
     hundred  percent (100%) of the  Lender-approved  invoices  (which shall not
     include  transportation  or  installation  costs) for  Collateral  up to an
     amount not to exceed the balance of the Facility C Loan Commitment.

          "Facility C CapEx  Note"  shall mean a  revolving  note in the form of
           ----------------------
     Exhibit  D hereto in the  amount  of the  Facility  C Loan  Commitment  and
     ----------
     maturing on the Facility C Maturity  Date,  duly  executed by the Borrowers
     and payable to the order of the Lender,  together with any and all renewal,
     extension,  modification or replacement notes executed by the Borrowers and
     delivered to the Lender and given in substitution therefor.

          "Facility C Loan  Commitment"  shall mean Four  Million  Five  Hundred
           ---------------------------
     Thousand and 00/100 Dollars ($4,500,000.00),  as such amount may be reduced
     pursuant to Section 2.3 hereof.
                 -----------

          "Facility C Interest Rate" shall mean the  Borrowers'  option of (i) a
           ------------------------
     floating rate equal to the Prime Rate plus the  Applicable  Margin,  (ii) a
                                           ----
     floating rate equal to the LIBOR Rate plus the Applicable Margin, (iii) the
                                           ----
     Locked LIBOR Rate or (iv) the Facility C Fixed Rate.


                                      -2-
<PAGE>

     (b)  New  Definitions.   The  following   definitions   shall  be  inserted
          ----------------
alphabetically in Section 1.1 of the Loan Agreement:
                  -----------

          "Facility  C Fixed  Loan"  shall mean a  Facility  C Loan which  bears
           -----------------------
     interest at the Facility C Fixed Rate.

          "Facility C Fixed Rate" shall mean,  for each Facility C Fixed Loan, a
           ---------------------
     rate of interest equal to the Cost of Funds Rate plus the Applicable Margin
                                                      ----
     for a LIBOR Loan in each case  determined  as of the date of funding of the
     applicable Facility C Loan.

          "Locked  LIBOR Loan" shall mean a Loan bearing  interest at the Locked
           ------------------
     LIBOR  Rate made  pursuant  to  Section  2.1(b) in the case of a Facility A
     Loan, Section 2.3(b) in the case of a Facility C Loan and Section 2.4(b) in
     the case of a Facility D Loan.

          "Locked LIBOR Rate" shall mean,  for each Locked LIBOR Loan, a rate of
           -----------------
     interest  equal to 30 day LIBOR as in effect on the first  Business  Day of
     the then current month plus the  Applicable  Margin for a LIBOR Loan,  such
                            ----
     rate shall apply to all Locked LIBOR Loans  outstanding  at any time during
     such  calendar  month.  The  Locked  LIBOR Rate shall be reset on the first
     Business Day of each  succeeding  month while any Locked LIBOR Loan remains
     outstanding.

     (c) All references in the Loan Agreement and other Loan Documents to "Fixed
LIBOR Loan" are hereby  replaced with "Locked LIBOR Loan" and all  references to
"Fixed LIBOR Rate" are hereby replaced with "Locked LIBOR Rate".

     (d) Deleted  Definitions.  The following  definitions in Section 1.1 of the
         --------------------                                 -----------
Loan Agreement are hereby deleted in their entirety:  Fixed LIBOR Loan and Fixed
LIBOR Rate.

     2.2  Amended  and  Restated  Facility  C  Loans.  Section  2.3 of the  Loan
          ------------------------------------------   ------------
Agreement,  captioned "Facility C Loans," is hereby amended and restated to read
in its entirety as follows:

          (a) Facility C Loan  Commitment.  Provided that an Event of Default or
              ---------------------------
     any event  which with  notice,  lapse of time or both would  constitute  an
     Event of  Default  does not then  exist,  the  Lender  shall  extend to the
     Borrowers  the  Facility  C  Loan  Commitment.  Subject  to the  terms  and
     conditions  of  this  Agreement,  from  the  date  hereof  through  but not
     including May 1, 2010,  the Lender shall from time to time make advances to
     the Borrowers  hereunder in an aggregate amount not to exceed the lesser of
     (i) the  Facility  C Loan  Commitment  and (ii)  the  Eligible  Costs.  The
     aggregate  amount available under Facility C hereunder shall not exceed the
     Facility C Loan  Commitment.  Each advance under Facility C hereunder shall
     be called a "Facility C Loan." The  Facility C Loans shall be  evidenced by

                                      -3-
<PAGE>
     the Facility C CapEx Note in the amount of the Facility C Loan  Commitment.
     No  advance  under  Facility  C may have a  maturity  date  later  than the
     Facility C Maturity  Date.  Facility C Loans may be repaid and,  subject to
     the terms and  conditions  hereof  borrowed again up to, but not including,
     the  Facility C Maturity  Date  unless the  Facility C Loans are  otherwise
     accelerated, terminated or extended as provided in this Agreement.

          (b)    Facility   C   Loan    Interest   and    Principal    Payments.
                 -----------------------------------------------

               (i) The  Borrowers  shall pay  interest  on the unpaid  principal
          balance of Facility C Loans at the applicable Facility C Interest Rate
          selected  pursuant to Section  2.3(e) as follows:  (A) for  Facility C
          Loans that bear  interest  at either the Prime Rate or the  Facility C
          Fixed Rate,  monthly in arrears  beginning on the last Business Day of
          the first full calendar  month after such Facility C Loan was made and
          continuing on the last Business Day of each calendar month  thereafter
          until all  amounts due  thereunder  have been paid in full and (B) for
          Facility C Loans that bear  interest  at the LIBOR  Rate,  on the last
          Business Day of each LIBOR Interest Period  (provided,  however,  that
          for LIBOR Interest Periods of six months,  accrued interest shall also
          be paid on the date which is three  months  from the first day of such
          LIBOR  Interest  Period),  commencing  on the first such date to occur
          after such  Facility C Loan was made and  continuing on each such date
          to occur thereafter, on the date of any principal repayment of a LIBOR
          Loan and on the Facility C Maturity Date.

               (ii) The Borrowers shall have the option for each Facility C Loan
          to designate  the timing for the  principal  repayments  for each such
          advance.  The Borrowers may designate principal payments as either (A)
          commencing on the last  Business Day of the first full calendar  month
          after each  Facility C Loan was  initially  funded  (the  "Facility  C
          Funding  Date")  and  continuing  on the  last  Business  Day of  each
          calendar  month  thereafter or (B) commencing on the last Business Day
          of the calendar  quarter of the Facility C Funding Date and continuing
          on the last Business Day of each calendar quarter thereafter,  in each
          case,  such payments to continue  through and including the Facility C
          Maturity Date and in an equal amount  necessary to amortize fully such
          Facility  C Loan  over a period  of not  more  than  forty-eight  (48)
          months.  The  Borrowers  shall pay the  outstanding  principal  of and
          interest on each  Facility C CapEx Note not later than on the Facility
          C Maturity Date.  Borrowers  shall notify Lender whether option (A) or
          (B) applies on the Facility C Funding Date of each Facility C Loan.

               (iii) The  Borrowers  may from time to time prepay the Facility C
          Loans, in whole or in part, without any prepayment penalty whatsoever,
          provided  that any  prepayment of the entire  principal  balance shall
          include accrued  interest on such Facility C Loans to the date of such
          prepayment.


                                      -4-
<PAGE>

          (c) Timing of Loans and Advances.  Requests by the Borrowers for loans
              ----------------------------
     or advances under the Facility C Loan  Commitment  shall be made in writing
     at least two (2)  Business  Days  prior to each  proposed  advance on forms
     reasonably  acceptable to the Lender, but, at the Lender's sole discretion,
     the Lender may make an advance to the  Borrowers  upon the oral  request of
     the Borrowers,  subject to confirmation  by the Borrowers in writing.  Each
     such  request  shall be in the  minimum  amount  of  $100,000  and  $50,000
     increments  in excess  thereof  and shall be  accompanied  or  preceded  by
     invoices and certificates  setting forth, in form and substance  reasonably
     satisfactory  to the Lender,  the amount of  Eligible  Costs upon which the
     requested  loan or advance is to be based.  Not more than two (2)  Business
     Days after the Lender's  receipt of such  request for  advance,  the Lender
     shall  provide the  Borrowers  with notice of the amount of Eligible  Costs
     approved  by the  Lender for such  advance.  As a  condition  to the Lender
     making an advance with respect to a Facility C Loan,  the  Borrowers  shall
     deliver to the Lender the applicable  invoices and  certificates  described
     above relating thereto.  The Borrowers consent to the Lender filing further
     Uniform  Commercial Code financing  statements  attaching such invoices and
     certificates.

          (d) One Loan or Advance.  All  Facility C Loans shall  constitute  one
              -------------------
     obligation secured by the Lender's Lien in the Borrowers' Collateral and by
     all other Liens now or hereafter granted by the Borrowers to the Lender.

          (e) Applicable  Rate. The Borrowers agree to pay interest on the daily
              ----------------
     balance of each Facility C Loan. The Borrowers  shall make an interest rate
     election  at the time of its  request  for an  advance of a Facility C Loan
     selecting  one of the  following  four  interest rate modes to apply to the
     Facility C Loan for the period commencing on the date of the funding of the
     Facility C Loan through the  Facility C Maturity  Date or such earlier date
     on which the  Facility C Loan is prepaid  in full in  accordance  with this
     Agreement:

               (i)  a variable interest rate equal to the Prime Rate;
               (ii) the LIBOR Rate;
               (iii) the Locked LIBOR Rate; or
               (iv) the Facility C Fixed Rate

     The  foregoing  notwithstanding,   after  the  occurrence  and  during  the
     continuance of an Event of Default under this Agreement, the rate per annum
     on such Facility C Loan shall be equal to the Default Rate.

          (f)  Computation  of Interest.  In computing  interest on a Facility C
               ------------------------
     Loan, (i) the date of funding of such Facility C Loan shall be included and
     (ii)  the date of  payment  of such  Facility  C Loan  shall  be  excluded;


                                      -5-
<PAGE>

     provided that if a Facility C Loan is repaid on the same day on which it is
     made, one day's interest shall be paid on such Facility C Loan.

     2.3 Amendment to the First  Sentence of Section 5.1. The first  sentence of
         -----------------------------------------------
Section 5.1 of the Loan Agreement,  captioned "Borrowing  Procedures," is hereby
- -----------
amended and restated to read in its entirety as follows:

          Each  Facility A Loan or  Facility D Loan may be  advanced  as a Prime
     Loan, a Locked  LIBOR Loan or a LIBOR Loan and each  Facility C Loan may be
     advanced as a Prime Loan, a Locked LIBOR Loan, a LIBOR Loan or a Facility C
     Fixed Loan, provided, however, that at any time, the Borrowers may identify
                 --------  -------
     no more than five (5) Facility A Loans,  five (5) Facility C Loans and five
     (5) Facility D Loans which may be LIBOR Loans and  Borrowers  may have only
     one (1)  Locked  LIBOR Loan  Facility A Loan and one (1) Locked  LIBOR Loan
     Facility D Loan at any one time


     3. ADDITION OF A NEW BORROWER TO THE LOAN DOCUMENTS.
        ------------------------------------------------

     3.1 Addition of KPS as a Party.  From and after the date of this Amendment,
         --------------------------
the Borrowers,  including KPS,  hereby agree that from and after the date hereof
KPS is a party to, and bound by, the Loan  Agreement and the balance of the Loan
Documents,  as amended hereby. All references in the Loan Documents to Borrowers
shall  hereafter mean and include KPS. KPS as a "Borrower",  agrees and confirms
that as a result of becoming a party to, and bound by, the Loan  Agreement  that
KPS has granted to Lender a security  interest in and lien on all the Collateral
(as defined in Section 1.1 of the Loan Agreement) of KPS.
               -----------


     4. REPRESENTATIONS AND WARRANTIES.
        ------------------------------

     4.1  Organization.  Each  Borrower is a  corporation  or limited  liability
          ------------
company  duly  organized,  existing and in good  standing  under the laws of the
jurisdiction  of its  organization  with full and adequate power to carry on and
conduct its business as presently  conducted.  Each Borrower is duly licensed or
qualified  in all foreign  jurisdictions  wherein  the nature of its  activities
require such qualification or licensing, except for such jurisdictions where the
failure  to  so  qualify  would  not  have  a  Material   Adverse  Effect.   The
organizational documents, resolutions and incumbency certificates of the Initial
Borrowers  delivered in connection  with the closing of the Loan  Agreement have
not been changed or amended since the date of such closing. The exact legal name
of each  Borrower  is as set forth in the  preamble  of this  Modification,  and
except as set forth on Schedule 7.1 to the Loan Agreement, as of the date hereof
the  Borrowers  do not  conduct,  nor have they  during  the last five (5) years
conducted,  business under any other name or trade name.  Each Borrower will not
change its name, its  organizational  identification  number, if it has one, its
type of organization, its jurisdiction of organization or other legal structure,
except as amended by the revised  Exhibit A, copies of which are attached hereto
                                  ---------
and made a part hereof.


                                      -6-
<PAGE>

     4.2 Authorization.  The Borrowers have  full right,  power and authority to
         -------------
enter into this  Modification,  to borrow  monies under the Loan  Agreement,  as
amended  hereby,  and to perform their  obligations  under the Loan Agreement as
amended hereby.

     4.3 No Conflicts.  The execution and delivery of this  Modification and the
         ------------
performance by each Borrower of its  obligations  under the Loan  Agreement,  as
amended  hereby,  do not and will not violate or contravene any provision of law
in  any  material  respect  or of any of  the  organizational  documents  of the
Borrowers.

     4.4 Validity and Binding Effect. The Loan Agreement,  as amended hereby, is
         ---------------------------
a legal, valid and binding obligation of each Borrower, enforceable against each
Borrower in accordance with its terms,  except as enforceability  may be limited
by bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.

     4.5 Compliance with Loan Agreement.  The  representation and warranties set
         ------------------------------
forth in  Section 7 of the Loan  Agreement,  as  amended  hereby,  including  as
amended  by the  revised  Schedules  7.1,  7.19 and  7.23,  copies  of which are
attached  hereto  and made a part  hereof,  are true and  correct  with the same
effect  as if such  representations  and  warranties  had been  made on the date
hereof, with the exception that all references to the financial statements shall
mean the financial  statements most recently  delivered to Lender and except for
such  changes  as are  specifically  permitted  under  the  Loan  Agreement.  In
addition,  as of the date hereof,  each Initial  Borrower has complied  with and
each Borrower is in  compliance  with all of the covenants set forth in the Loan
Agreement, as amended hereby,  including, but not limited to, those set forth in
Section 8,  Section 9  (including  as amended by the revised  Schedule  9.3) and
Section 10 thereof.

     4.6 No Event of  Default.  As of the date  hereof,  no Event of  Default or
         --------------------
Unmatured  Event of Default  exists under Section 11 of the Loan  Agreement,  as
amended hereby.

     4.7 Release and Waiver.  As of the date hereof,  no Borrower  possesses (or
         ------------------
has knowledge of) any claims, defenses,  offsets or counterclaims against Lender
(or  its  officers,  directors,  members,  shareholders,  employees  or  agents)
relating to this  Modification or the Loan Documents.  In the event there exists
on the date of this  Agreement,  any facts  that  would  give rise to any claim,
defense,  offset or  counterclaim  against or with respect to the enforcement of
this Modification or the Loan Documents,  each Borrower hereby  unconditionally,
irrevocably,  and  unequivocally  waives  and  fully  releases  Lender  (and its
officers,  directors,  shareholders,  employees  or agents)  of any such  claim,
defense,  offset or  counterclaim  to the same extent as if such claims were the
subject of a lawsuit  adjudicated  to  conclusion  and  dismissed  therein  with
prejudice.

     4.8 Omnibus  Amendment.  Each of the Loan Documents shall be deemed amended
         ------------------
to  give  effect  to the  provisions  of  this  Modification  without  need  for
referencing each of the Loan Documents by name.  Without limiting the generality
of  the  foregoing,  Borrowers  and  Lender  acknowledge  that  the  term  "Loan
Documents" shall mean all of the Loan Documents as modified by this Modification


                                      -7-
<PAGE>

(and any notes,  amendments  and agreements  delivered in connection  herewith).
Additionally,  as used in the other Loan Documents,  the term "Documents" and/or
"Loan Documents" shall now be deemed to include this  Modification and any other
documents, instruments or agreements executed in connection herewith.

     5. CONDITIONS PRECEDENT. This Modification shall become effective as of the
        --------------------
date above first written after receipt by Lender of the following:

     5.1 Modification. This Modification executed by each Borrower and Lender.
         ------------

     5.2 Resolutions.  A certified copy of resolutions of the Board of Directors
         -----------
and/or  shareholders,  or members  and/or  mangers  of, as  applicable,  of each
Borrower   authorizing   the  execution,   delivery  and   performance  of  this
Modification and the Loan Documents.

     5.3 Other Documents. Such other documents, certificates, resolutions and/or
         ---------------
opinions of counsel as Lender may request.

     6. GENERAL.
        -------
     6.1 Governing Law;  Severability.  This Modification  shall be construed in
         ----------------------------
accordance  with and governed by the laws of Illinois.  Wherever  possible  each
provision of the Loan  Agreement and this  Modification  shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of the Loan Agreement and this Modification  shall be prohibited by or
invalid under such law, such  provision  shall be  ineffective  to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision  or  the  remaining   provisions  of  the  Loan   Agreement  and  this
Modification.

     6.2 Successors and Assigns.  This  Modification  shall be binding upon each
         ----------------------
Borrower and Lender and their respective successors and assigns, and shall inure
to the benefit of such  Borrower  and Lender and the  successors  and assigns of
Lender.

     6.3 References  to Loan  Agreement.  This  Modification   amends  the  Loan
         ------------------------------
Agreement, as in effect on the date hereof. Each reference in the Loan Agreement
to "this Agreement",  "hereunder",  "hereof",  or words of like import, and each
reference  to the  Loan  Agreement  in any  and  all  instruments  or  documents
delivered  in  connection  therewith,  shall  be  deemed  to  refer  to the Loan
Agreement, as amended hereby.

     6.4 Expenses. Borrowers shall pay all costs and expenses in connection with
         --------
the  preparation  of  this   Modification  and  other  related  loan  documents,
including,  without limitation,  reasonable  attorneys' fees and time charges of
attorneys who may be employees of Lender.  Borrowers shall pay any and all stamp
and other taxes,  UCC search  fees,  filing fees and other costs and expenses in
connection  with the execution and delivery of this  Modification  and the other
instruments and documents to be delivered  hereunder,  and agrees to save Lender
harmless from and against any and all  liabilities  with respect to or resulting
from any delay in paying or omission to pay such costs and expenses.

                                      -8-
<PAGE>

     6.5 Counterparts.  This  Modification  may  be  executed  in any  number of
         ------------
counterparts, all of which shall constitute one and the same agreement.

     6.6 Jury Waiver.  BORROWERS AND LENDER IRREVOCABLY WAIVE ANY RIGHT TO TRIAL
         -----------
BY JURY IN ANY ACTION OR  PROCEEDING:  (a) TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR IN CONNECTION WITH THIS MODIFICATION OR ANY AMENDMENT,  INSTRUMENT,  DOCUMENT
OR AGREEMENT  DELIVERED  OR WHICH MAY IN THE FUTURE BE  DELIVERED IN  CONNECTION
HEREWITH; OR (b) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THIS  MODIFICATION  OR ANY SUCH  AMENDMENT,  INSTRUMENT,  DOCUMENT OR
AGREEMENT,  AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

                            [SIGNATURE PAGE FOLLOWS]





                                      -9-
<PAGE>

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

BORRROWERS:
<TABLE>
<S>                                                          <C>

KABLE MEDIA SERVICES, INC.,                                  KABLE NEWS COMPANY, INC.,
a Delaware corporation                                       an Illinois corporation

By:         /s/ Bruce Obendorf                               By:         /s/ Bruce Obendorf
         ---------------------------------                            ------------------------------
         Bruce Obendorf,                                              Bruce Obendorf,
         Vice President and Treasurer                                 Senior Vice President
                                                                      and Director of Finance

KABLE NEWS EXPORT, LTD.,                                     KABLE NEWS INTERNATIONAL, INC.,
a Delaware corporation                                       a Delaware corporation

By:         /s/ Bruce Obendorf                               By:         /s/ Bruce Obendorf
         ---------------------------------                            ------------------------------
         Bruce Obendorf,                                              Bruce Obendorf,
         Vice President and Secretary                                 Treasurer

KABLE FULFILLMENT SERVICES, INC., a Delaware corporation     KABLE FULFILLMENT SERVICES OF OHIO, INC., a Delaware
                                                             corporation

By:         /s/ Bruce Obendorf                               By:         /s/ Bruce Obendorf
         ---------------------------------                            ------------------------------
         Bruce Obendorf,                                              Bruce Obendorf,
         Vice President and Treasurer                                 Vice President and Treasurer

KABLE DISTRIBUTION SERVICES, INC., a Delaware corporation    PALM COAST DATA LLC, a Delaware limited liability
                                                             company

By:         /s/ Bruce Obendorf                               By:         /s/ John Meneough
         ---------------------------------                            ------------------------------
         Bruce Obendorf,                                              John Meneough, President,
         Senior Vice President                                        Chief Operating Officer and Secretary

PALM COAST DATA HOLDCO, INC.,                                KABLE PRODUCTS SERVICES, INC.,
a Delaware corporation                                       a Delaware corporation

By:         /s/ John Meneough                                By:         /s/ Bruce Obendorf
         ---------------------------------                            ------------------------------
         John Meneough,                                               Bruce Obendorf,
         President, Chief Operating Officer and Secretary             Executive Vice President of Finance and Treasurer

</TABLE>



                                      -10-
<PAGE>

LENDER:

LASALLE BANK NATIONAL ASSOCIATION,
a national banking association


By:         /s/ Kent N. Kohlbacher
         ---------------------------------
         Kent N. Kohlbacher, First Vice President





                                     -11-
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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