MANAGEMENT SERVICES AGREEMENT



         This MANAGEMENT SERVICES AGREEMENT (the "Agreement"), dated as of April

18, 2000, is made by and between LIBERTY GROUP OPERATING, INC., a Delaware

corporation (the "Company"), on the one hand, and LEONARD GREEN & PARTNERS, L.P.

("LGP"), on the other.



         WHEREAS, the Company and LGP are parties to that certain Management

Services Agreement, dated as of January 27, 1998 (the "Original Management

Services Agreement"), pursuant to which LGP provides to the Company certain

management, consulting and financial planing services on an ongoing basis and

certain financial advisory and investment banking services in connection with

major financial transactions that may be undertaken from time to time in the

future; and



         WHEREAS, the Company and LGP desire to amend and restate the Original

Management Services Agreement in its entirety as set forth herein.



         NOW, THEREFORE, in consideration of the foregoing and the mutual

agreements contained herein, the parties hereto hereby agree as follows:



1.       Retention:



         1.1 General Services. Subject to the terms and conditions hereof, LGP

will provide management, consulting and financial planning services to the

Company on an ongoing basis in connection with the operation and growth of the

Company and its subsidiaries during the term of this Agreement (the "General

Services").



         1.2 Major Transaction Services. Subject to the terms and conditions

hereof, LGP will provide financial advisory and investment banking services to

the Company in connection with major financial transactions that may be

undertaken from time to time in the future. ("Major Transaction Services" and,

together with the General Services, the "Services").



2.       Compensation.



         2.1 General Services Fee. In consideration of the General Services, the

Company shall pay LGP an aggregate annual fee of $1,480,000. Such fee shall be

payable in equal monthly installments, in advance, on the first day of each

month commencing on May 1, 2000.



         2.2 Major Transaction Services Fee. In consideration of Major

Transaction Services provided by LGP from time to time, the Company shall pay

LGP reasonable and customary fees for services of like kind, taking into

consideration all relevant factors, including but not limited to, the complexity

of the subject transaction, the time devoted to providing such services and the

value of LGP's investment banking expertise and relationships within the

business and financial community. The amount of such fees shall be (a) approved

in accordance with the procedures set forth in the Company's charter documents

or financing agreements, or, if no such procedures are





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set forth therein, (b) either (i) approved by a majority of the Board of

Directors of the Company or (ii) fair to the Company from a financial point of

view in the opinion of an independent nationally recognized investment banking

firm.



         2.3 Expenses. In addition to the fees to be paid to LGP under Section

2.1 and 2.2 hereof, the Company shall pay to, or on behalf of, LGP, monthly as

billed, all reasonable out-of- pocket expenses incurred by LGP in connection

with the Services rendered hereunder. Such expenses shall include, among other

things, fees and disbursements of counsel, travel expenses, word processing

charges, messenger and duplicating services, facsimile and other customary

expenditures.



3.       Term.



         3.1 Termination. This Agreement shall terminate on January 27, 2010.

Notwithstanding the foregoing, this Agreement may be terminated at any time by

LGP by written notice to the Company.



         3.2 Survival of Certain Obligations. Notwithstanding any other

provision hereof, the Company's obligation to pay amounts due with respect to

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