NEWS COMMUNICATIONS INC
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>




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                                                                   EXHIBIT 10.3



                             SUBSCRIPTION AGREEMENT

                     NEWS COMMUNICATIONS, INC. COMMON STOCK

News Communications, Inc.
2 Park Avenue, Suite 1405
New York, NY 10016

Attn: Chairman

         1. Application. (a) The undersigned (the "Purchaser"), intending to be
legally bound, hereby agrees to purchase an aggregate of 250,000 shares (the
"Shares") of the common stock (the "Common Stock") of News Communications, Inc.
(the "Company"), at a purchase price of $1.00 per Share. Payment of the purchase
price for the Shares shall be made by wire transfer of immediately available
funds concurrently with the purchase of 750,000 shares of the Company's Common
Stock by James Finkelstein ("Finkelstein") pursuant to a Subscription Agreement
between Finkelstein and the Company (the "Finkelstein Agreement").

         (b) In order to induce Finkelstein to enter into the Finkelstein
Agreement and certain other agreements executed in connection with the
Finkelstein Agreement, the Purchaser agrees to surrender the Shares to the
Company immediately upon receipt thereof, it being acknowledged and agreed that
the Shares are being surrendered in consideration of the covenants set forth in
the Finkelstein Agreement which provide for the 250,000 additional shares of
Common Stock being issued to Finkelstein pursuant to Section 1(b) of the
Finkelstein Agreement (or securities issued in respect thereof) be delivered to
the Purchaser upon the occurrence of the events described therein.

         (c) The Shares shall bear the following legends:

         THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
         SECURITIES ACT OF ANY STATE. THEY ARE BEING OFFERED PURSUANT TO AN
         EXEMPTION FROM REGISTRATION UNDER SECTION 4(2) OF THE SECURITIES ACT.
         THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THE
         SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE
         SECURITIES LAWS, OR SUCH SALES AND TRANSFERS ARE MADE PURSUANT TO
         AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
         AGREEMENT TO SURRENDER ALL OF SUCH SHARES ON THE 2ND ANNIVERSARY OF THE
         ISSUANCE THEREOF UPON THE OCCURRENCE OF CERTAIN EVENTS. ANY TRANSFEREE
         OF SUCH








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         SHARES SHALL BE SUBJECT TO THE OBLIGATION TO SURRENDER THE SECURITIES
         REPRESENTED HEREBY UPON THE OCCURRENCE OF SUCH EVENTS.

         2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as follows:

                  (a) The Purchaser, in making the decision to enter into this
         Agreement and to commit to purchase the Shares, has relied upon
         independent investigations made by him and his representatives, if any.
         No oral representations have been made or oral information furnished to
         the Purchaser in connection with the commitment to purchase of the
         Shares; and the Purchaser and/or his advisors have had a reasonable
         opportunity to ask questions of and receive answers from the Company
         concerning the Shares.

                  (b) The Purchaser has been or will be supplied with or has and
         will have sufficient access to all information, including financial
         statements and other financial information of the Company, and has been
         afforded with an opportunity to ask questions of and receive answers
         concerning information to which a reasonable investor would attach
         significance in making investment decisions, so that as a reasonable
         investor the Purchaser has been able to make the Purchaser's decision
         to commit to purchase the Shares.

                  (c) The Purchaser is able and will be able to bear the
         substantial economic risks of an investment in the Shares for an
         indefinite period of time, has no need for liquidity in such
         investment, has made and will have made commitments to investments that
         are not readily marketable which are reasonable in relation to the
         Purchaser's net worth and, at the present time, could afford a complete
         loss of such investment.

                  (d) The Purchaser has such knowledge and experience in
         financial, tax and business matters so as to enable him to utilize the
         information made available to him in connection with the commitment to
         purchase and the purchase of the Shares to evaluate the merits and
         risks of an investment in the Shares and to make an informed investment
         decision with respect thereto.

                  (e) The Purchaser acknowledges that the purchase of the Shares
         involves a high degree of risk and further acknowledges that he can
         bear the economic risk of the purchase of the Shares, including the
         total loss of his investment. The Purchaser is not relying on the
         Company with respect to the tax and other economic considerations of an
         investment in the Shares, and the Purchaser has relied on the advice
         of, or has consulted with, only his own advisor(s).

                  (g) The Purchaser has and will have full right and power to
         perform pursuant to this Subscription Agreement and make an investment
         in the Company and is authorized and otherwise duly qualified to
         purchase and hold the Shares and to enter into this Subscription
         Agreement.






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                  (h) The Purchaser will be purchasing the Shares for his own
         account, for investment and not with a view to resale or distribution
         except in compliance with the Securities Act.

                  (i) The Purchaser understands that the Shares are being
         offered and sold in reliance on an exemption from the registration
         requirements of federal and state securities laws under Section 4(2) of
         the Securities Act and that the Company is relying upon the truth and
         accuracy of the representations, warranties, agreements,
         acknowledgments and understandings of the Purchaser set forth herein in
         order to determine the applicability of such exemptions and the
         suitability of the Purchaser to acquire the Shares. The
         representations, warranties and agreements contained herein are true
         and correct as of the date hereof and may be relied upon by the
         Company, and the Purchaser will notify the Company immediately of any
         adverse change in any such representations and warranties which may
         occur prior to the acceptance of the subscription and will promptly
         send the Company written confirmation thereof. The representations,
         warranties and agreements of the Purchaser contained herein shall
         survive the execution and delivery of this Subscription Agreement and
         the purchase of the Shares.

                  (j) The Purchaser further represents and warrants that he is
         an "accredited investor" within the meaning of Regulation D under the
         Securities Act.

         3. Representations and Warranties of the Company. The Company
represents and warrants to the Purchaser as follows:.

                  (a) The Company is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Nevada and
         is duly qualified to do business and in good standing in the State of
         New York. The Company has all requisite power and authority and has all
         necessary approvals, licenses, permits and authorization to own its
         properties and to carry on its business as now conducted. The Company
         has all requisite power and authority to execute and deliver this
         Agreement and to perform its obligations hereunder.

                  (b) The Company's authorized capital stock consists of:

                           (i) 100,000,000 shares of Common Stock, of which
                  8,470,536 are issued and outstanding and 158,333 shares are
                  held in treasury;

                           (ii) 500,000 shares of Preferred Stock, of which:

                                    (A) 14 shares designated 8% Convertible
                           Preferred Stock are issued and outstanding, which
                           shares are convertible into 2,222 shares of Common
                           Stock and 2,222 warrants to purchase Common Stock at
                           an exercise price of $6.00 per share;

                                    (B) 21 shares designated 10% Convertible
                           Preferred Stock are issued and outstanding, which
                           shares are convertible into 12,600 shares of Common
                           Stock; and




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                                    (C) 197,500 shares designated $10
                           Convertible Preferred Stock are issued and
                           outstanding, which shares are convertible into
                           825,432 shares of Common Stock after giving effect to
                           the issuance of the Shares, the issuance of the
                           Warrants to James Finkelstein to purchase 3,000,000
                           shares, the purchase of 250,000 shares by D.H. Blair
                           Investment Banking Corp. and the issuance of
                           1,150,000 shares issued upon conversion of an
                           aggregate of $1,150,000 principal amount of notes on
                           the date hereof.

                  (c) The Company currently has four Stock Option Plans. 200,000
         shares of the Company's Common Stock have been reserved for issuance
         upon exercise of options granted under the Company's 1999 Stock Option
         Plan, 122,222 shares of the Company's Common Stock have been reserved
         for issuance upon exercise of options granted under the Company's 1987
         Stock Option Plan, 500,000 shares of the Company's Common Stock have
         been reserved for issuance upon exercise of options granted under the
         Company's Discretionary Directors and Officers Stock Option Plan and
         166,667 shares of the Company's Common Stock have been reserved for
         issuance upon exercise of options granted under the Company's
         Non-discretionary Directors Stock Option Plan. As of the date hereof,
         options to purchase a total of 1,010,661 shares of the Company's Common
         Stock have been granted.

                  (d) 266,667 shares of the Company's Common Stock have been
         reserved for issuance upon the exercise of the Warrants issued to the
         holders of the $10.00 Convertible Preferred Stock, 32,223 shares of the
         Company's Common Stock have been reserved for issuance upon the
         exercise of the Warrants issued to the holders of the 8% Convertible
         Preferred Stock, 200,000 shares of the Company's Common Stock have been
         reserved for issuance upon the exercise of the Warrants issued to D.H.
         Blair Investment Banking Corp. and 100,000 shares of the Company's
         Common Stock have been reserved for issuance upon the exercise of the
         Warrant issued to WLR Recovery Fund L.P.

                  (e) 1,000,000 shares of the Company's Common Stock have been
         reserved for issuance upon the conversion of an 8% Convertible Note
         issued to Rosalind Davidowitz and 350,000 shares of the Company's
         Common Stock have been reserved for issuance upon the conversion of the
         8% Convertible Notes issued to D.H. Blair Investment Banking Corp. An
         additional indeterminate number of shares have been reserved for
         issuance in satisfaction of the payment of accrued interest on the
         Company's 8% Convertible Notes.

                  (f) Up to 1,000,000 shares of the Company's Common Stock have
         been reserved for issuance upon either (i) the conversion of the
         outstanding principal amount under a Revolving Note issued to D.H.
         Blair Investment Banking Corp. or (ii) if not converted by the maturity
         date, the issuance of warrants to purchase the Company's Common Stock
         in an amount equal to the maximum advances thereunder at any one time.
         An additional indeterminate number of shares have been reserved for
         issuance in satisfaction of the payment of accrued interest on the
         Revolving Note.





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                  (g) All the outstanding shares of capital stock of the Company
         have been duly and validly issued and are fully paid and
         non-assessable. Upon issuance, sale and delivery as contemplated by
         this Agreement, the Shares will be duly authorized, validly issued,
         fully paid and non-assessable shares.

                  (h) The shares of the Company's Common Stock issuable upon
         exercise of the Options, Warrants and Convertible Notes have been duly
         authorized and reserved for issuance by all necessary corporate action
         on the part of the Company. The shares of Common Stock issuable upon
         exercise of the Warrants, have been duly and/or validly reserved for
         issuance and, when issued and paid for in accordance with the terms of
         the Warrants, will be validly issued, fully paid and nonassessable.

                  (i) Except as provided above and in Schedule A attached
         hereto, no subscription, warrant, option, convertible security or other
         right (contingent or otherwise) to purchase or acquire any shares of
         capital stock of the Company is authorized or outstanding, (ii) the
         Company has no obligation (contingent or otherwise) to issue any
         subscription, warrant, option, convertible security or other such right
         or to issue or distribute to holders of any shares of its capital stock
         any evidences of indebtedness or assets of the Company, and (iii) the
         Company has no obligation (contingent or otherwise) to purchase, redeem
         or otherwise acquire any shares of its capital stock or any interest
         therein or to pay any dividend or make any other distribution in
         respect thereof.

                  (j) The Company has authorized the execution, delivery, and
         performance of this Agreement and each of the transactions and
         agreements contemplated hereby. No other corporate action (including
         stockholder approval) is necessary to authorize such execution,
         delivery and performance of this Agreement, and upon such execution and
         delivery this Agreement shall constitute the valid and binding
         obligation of the Company, enforceable against the Company in
         accordance with its terms, except that such enforcement may be subject
         to bankruptcy, insolvency, reorganization, moratorium or other similar
         laws now or hereafter in effect relating to creditors' rights and
         general principles of equity. The Company has authorized the issuance
         and delivery of the Shares in accordance with this Agreement.

         4. Registration Rights.

                  (a) Agreement to Register. At any time from the date of
         purchase of the Shares until the fifth anniversary of the date hereof,
         at the request of the Purchaser (the "Registration Request"), the
         Company shall prepare and use its best efforts to file with the
         Securities and Exchange Commission (the "SEC") within 60 days of the
         Registration Request a registration statement covering the resale of
         the Shares (each, a "Registration Statement"), shall use its best
         efforts to cause such Registration Statement to become effective as
         soon as possible thereafter and to do all other things necessary to
         cause such Registration Statement to be declared effective by the SEC
         (including, without limitation, the execution of an undertaking to file
         post-effective amendments, appropriate qualification under applicable
         blue sky and other state securities laws in such jurisdictions as the
         Purchaser may reasonably request, and appropriate compliance with
         applicable regulations issued under the Securities Act) and as would
         permit or facilitate




                                      -5-





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         the sale and distribution of all or such portion of such Shares. The
         Purchaser shall have the right to make such Registration Request on one
         occasion.

                  (b) If the Purchaser desires to distribute the Shares by means
         of an underwriting, he shall make a Registration Request and so advise
         the Company and shall select an underwriter reasonably acceptable to
         the Company. At such time, the Company and the Purchaser shall enter
         into an underwriting agreement in customary form with the underwriter
         selected for such underwriting by the Company. The Company shall not be
         required to effect more than two underwritten offerings of Shares. The
         Company shall pay all expenses, other than underwriters' discounts and
         commissions and fees and disbursements of experts and counsel retained
         by the Purchaser, relating to an underwriting of the Shares covered by
         the first request, and the Purchaser shall pay all reasonable
         registration expenses arising from the second such underwriting.

                  (c) If, at any time during the five-year period following the
         date hereof, the Company proposes to file with the SEC a Registration
         Statement with respect to any class of securities (other than pursuant
         to a registration statement on Forms S-4 or S-8 or any successor form)
         under the Securities Act, the Company shall notify the Purchaser at
         least twenty (20) days prior to the filing of the Registration
         Statement and will offer to include all or any portion of the Shares in
         the Registration Statement. At the written request of the Purchaser,
         delivered to the Company within ten (10) days after the date of the
         Company's notice, the Purchaser shall state the number of Shares that
         he wishes to sell under the proposed Registration Statement.

                  (d) If the Registration Statement is filed with respect to an
         underwritten offering, the Company and the Purchaser shall enter into
         an underwriting agreement in customary form with the underwriter
         selected for such underwriting by the Company. The Company shall pay
         all expenses, other than underwriters' discounts and commissions and
         fees and disbursements of experts and counsel retained by the
         Purchaser, relating to an underwriting of the Shares.

                  (e) The Purchaser, if reasonably requested by the Company or
         by the underwriter with respect to any public offering, shall agree not
         to sell, make any short sale of, loan, grant any options for the
         purchase of, or otherwise dispose of any of the Shares (other than
         those included in the Registration Statement) without the prior written
         consent of the Company or such underwriters, as the case may be, for
         such period of time (not to exceed one hundred eighty (180) days), from
         the effective date of such Registration Statement, or the commencement
         of the offering, as applicable, as may be requested by the
         underwriters, provided that all other holders of the class of
         securities being registered pursuant to the Registration Statement
         shall make the same agreements as those made by the Purchaser under
         this Section 4(e).

                  (f) The Purchaser shall promptly provide the Company with such
         non-confidential and non-proprietary information as it shall reasonably
         request and that is available to the Purchaser in order to prepare the
         Registration Statement.



                                      -6-






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                  (g) All reasonable and necessary expenses in connection with
         the preparation of the Registration Statement, including, without
         limitation, any and all legal, accounting and filing fees, but not
         including fees and disbursements of experts and counsel retained by the
         Purchaser or underwriting discounts and commissions to be paid by the
         Purchaser, shall be borne by the Company.

                  (h) The Company shall use its best efforts to cause the
         Registration Statement to become effective, permitting the sale of the
         Shares in accordance with the intended method or methods of
         distribution thereof, and pursuant thereto, the Company shall as
         expeditiously as possible:

                           (i) prepare and file with the SEC a Registration
                  Statement relating on any appropriate form under the
                  Securities Act, which form shall be available for the sale of
                  the Shares in accordance with the intended method or methods
                  of distribution thereof and use its best efforts to cause such
                  Registration Statement to become effective and keep such
                  Registration Statement effective in accordance with Section
                  4(h)(ii) below;

                           (ii) prepare and file with the SEC such amendments
                  and post-effective amendments to the Registration Statement as
                  may be necessary to keep the Registration effective until all
                  such Shares are sold; cause the prospectus to be supplemented
                  by any required prospectus supplement, and as so supplemented
                  to be filed pursuant to Rule 424 under the Securities Act; and
                  comply with the provisions of the Securities Act with respect
                  to the disposition of all securities covered by such
                  Registration Statement during the applicable period in
                  accordance with the intended method or methods of distribution
                  by the sellers thereof as set forth in such Registration
                  Statement or supplement to the prospectus; provided, however,
                  that the Company may, from time to time, request that the
                  Purchaser immediately discontinue the disposition of the
                  Shares if the Company determines, in the good faith exercise
                  of its reasonable business judgment, that the offering and
                  disposition of the Shares could materially interfere with bona
                  fide financing, acquisition or other material business plans
                  of the Company or would require disclosure of non-public
                  information, the premature disclosure of which could
                  materially and adversely affect the Company (it being
                  acknowledged that the Company is not required to disclose in
                  such request any such transaction, plan or non-public
                  information), so long as the Company promptly after the
                  disclosure of such transaction, plan or non-public information
                  complies with this Section 4(h)(ii);

                           (iii) notify the Purchaser and the underwriter, if
                  any, promptly, and (if requested by any such person) confirm
                  such advice in writing, (A) when the prospectus or any
                  prospectus supplement or post-effective amendment has been
                  filed, and, with respect to the Registration Statement or any
                  post-effective amendment thereto, when the same has become
                  effective, (B) of any request by the SEC for amendments or
                  supplements to the Registration Statement or the prospectus or
                  for additional information, (C) of the issuance by the SEC of
                  any stop order suspending the effectiveness of the
                  Registration Statement or the





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                  initiation of any proceedings for that purpose, (D) of the
                  receipt by the Company of any notification with respect to the
                  suspension of the qualification of the Shares for sale in any
                  jurisdiction or the initiation of any proceedings for such
                  purpose and (E) subject to the proviso below, of the happening
                  of any event as a result of which the prospectus included in
                  such Registration Statement, as then in effect, includes an
                  untrue statement of a material fact or omits to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein not misleading in light of the
                  circumstances then existing and, subject to Section 4(g)(ii)
                  above, at the request of any such person, prepare and furnish
                  to such person a reasonable number of copies of a supplement
                  to or an amendment of such prospectus as may be necessary so
                  that, as thereafter delivered to the Purchaser of such shares,
                  such prospectus shall not include an untrue statement of a
                  material fact or omit to state a material fact required to be
                  stated therein or necessary to make the statements therein not
                  misleading in light of the circumstances then existing;
                  provided, however, the Company need not disclose the event if
                  it otherwise has not disclosed such event to the public;

                           (iv) if requested by the underwriter or the
                  Purchaser, promptly incorporate in a prospectus supplement or
                  post-effective amendment such information as the underwriter
                  and the Purchaser agree should be included therein relating to
                  the plan of distribution with respect to such Shares,
                  including, without limitation, the purchase price being paid
                  therefor by such underwriters and with respect to any other
                  terms of the underwritten offering of the Shares to be sold in
                  such offering; and make all required filings of such
                  prospectus supplements or post-effective amendments as soon as
                  notified of the matters to be incorporated in such prospectus
                  supplements or post-effective amendments;

                           (v) deliver to the Purchaser and the underwriters, if
                  any, without charge, as many copies of the prospectus
                  (including each preliminary prospectus) in conformity with the
                  requirement of the Securities Act and any amendments or
                  supplements thereto as such persons may reasonably request and
                  such other documents as they may reasonably request to
                  facilitate the prior sale or other disposition of the Shares;

                           (vi) prior to any public offering of Shares, register
                  or qualify or cooperate with the Purchaser, or the
                  underwriters, if any, in connection with the registration or
                  qualification of such Shares for offer and sale under the
                  securities or blue sky laws of such jurisdictions as the
                  Purchaser or underwriters, if any, reasonably requests in
                  writing and do any and all other acts or things necessary or
                  advisable to enable the disposition in such jurisdictions of
                  the Shares covered by the Registration Statement; provided,
                  however, that the Company shall not be required to qualify to
                  do business in any jurisdiction where it is not then so
                  qualified or to take any action that would subject it to
                  general service of process in any such jurisdiction where it
                  is not then so subject or would subject the Company to any tax
                  in any such jurisdiction where it is not then so subject; and






                                      -8-





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                           (vii) with a view to making available the benefits of
                  certain rules and regulations of the SEC which may at any time
                  permit the sale of Shares to the public without registration,
                  during such time as a public market exists for its equity
                  securities, the Company agrees to:

                                    (A) make and keep public information
                           available, as those terms are understood and defined
                           in Rule 144 under the Securities Act, at all times
                           after the effective date of the first registration
                           under the Securities Act filed by the Company for an
                           offering of its equity securities to the general
                           public;

                                    (B) use its best efforts to file with the
                           SEC in a timely manner all reports and other
                           documents required of the Company under the
                           Securities Act and the Securities Exchange Act of
                           1934, as amended (the "Exchange Act") (at any time
                           after it has become subject to such reporting
                           requirements); and

                                    (C) furnish to the Purchaser forthwith upon
                           request a written statement by the Company as to the
                           Company's compliance with the reporting requirements
                           of said Rule 144, and of the Securities Act and the
                           Exchange Act, a copy of the most recent annual or
                           quarterly report of the Company and such other
                           reports and documents of the Company as the Purchaser
                           may reasonably request in availing itself of any rule
                           or regulation of the SEC allowing a holder to sell
                           any such securities without registration.

                  (i) Notwithstanding the provisions of this Section 4 to the
         contrary, the Company:

                           (i) may require the Purchaser to furnish to the
                  Company such information regarding the distribution of such
                  securities as the Company may from time to time reasonably
                  request in writing, and the Company may limit such
                  registration rights to situations where a proposed
                  distribution of Shares is to be effected forthwith upon the
                  effectiveness of the Registration Statement; and

                           (ii) may require the Purchaser to covenant that he
                  has not taken, and will not take, directly or indirectly, any
                  action designed, or which might reasonably be expected, to
                  cause or result in, under the Exchange Act or otherwise, or
                  which has caused or resulted in, stabilization or manipulation
                  of the price of any security of the Company to facilitate the
                  sale or resale of the Shares.

                  (j) The Purchaser agrees by acquisition of such Shares that,
         upon receipt of the request referred to in the proviso of Section
         4(h)(ii) or of any notice from the Company of the happening of any
         event of the kind described in Section 4(h)(iii) hereof (other than as
         provided in Section 4(h)(iii)(A) hereof), the Purchaser shall forthwith
         discontinue disposition of Shares until he is advised in writing by the
         Company that the use of the prospectus may be resumed, and has received
         copies of any additional





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         or supplemental documents or filings that are incorporated by reference
         in the prospectus, and, if so directed by the Company, the Purchaser
         shall deliver to the Company (at the Company's expense) all copies
         other than permanent file copies then in the Purchaser's possession, of
         the prospectus covering such Shares current prior to the time of
         receipt of such notice.

         5. Indemnification.

         (a) The Company agrees to indemnify and hold harmless the Purchaser
against any losses, claims, damages, liabilities or expenses, joint or several,
to which the Purchaser may become subject, under the Securities Act, the
Exchange Act, or other federal or state statutory law or regulations, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, any preliminary prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them not misleading, (ii) in whole or in part, any
inaccuracy in the representations and warranties of the Company contained
herein, or (iii) any failure of the Company to perform its obligations hereunder
or under law; and will reimburse the Purchaser for any legal and other expenses
as such expenses are reasonably incurred by the Purchaser in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Statement, any preliminary prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with information furnished
to the Company by each of the Purchaser expressly for the inclusion in any
Registration Statement or any preliminary prospectus. This indemnity agreement
will be in addition to any liability that the Company may otherwise have. The
Company will not, without the prior written consent of the Purchaser, settle or
compromise or consent to the entry of any judgment in any pending or threatened
action or claim or related cause of action or portion of such cause of action in
respect of which indemnification may be sought hereunder (whether or not the
Purchaser is a party to such action or claim), unless such settlement,
compromise or consent includes an unconditional release of the Purchaser from
all liability arising out of such action or claim (or related cause of action or
portion thereof).

         (b) The Purchaser agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who sign any Registration Statement,
and each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses to
which the Company, or any such director, officer, or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or




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at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Purchaser), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon (i) any untrue or
alleged untrue statement of any material fact contained any Registration
Statement, any preliminary prospectus, or any amendment or supplement thereto,
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Registration Statement, any preliminary prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished to the Company by the Purchaser expressly for the use in any
Registration Statement or any preliminary prospectus; and will reimburse the
Company, or any such director, officer, or controlling person for any legal and
other expense reasonably incurred by the Company, or any such director, officer,
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. As to the Purchaser, in no event shall any indemnity under this
subsection (b) exceed the net proceeds from sale of the number of Shares sold by
the Purchaser. This indemnity agreement will be in addition to any liability
which the Purchaser may otherwise have.

         (c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability that it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 5 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified parties
which are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 5 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for





                                      -11-





<PAGE>

the expenses of more than one separate counsel, approved by the Purchaser in the
case of paragraph (a), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.

         (d) If the indemnification provided for in this Section 5 is required
but is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party under subsections (a), (b) or (c) in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to herein (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company and the Purchaser from
any other persons, such as persons who control the Company within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company who also may be liable for contribution) (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Purchaser from the offering of the Shares or any public offering
of the Shares, as the case may be or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Purchaser in connection
with the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Purchaser, on the
other, shall be deemed to be in the same proportion as the total net proceeds
from the sale of the Shares (before deducting expenses) received by the Company
bear to the total compensation received by the Purchaser hereunder. The relative
fault of the Company and the Purchaser shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact or the
inaccurate or the alleged inaccurate representation and/or warranty relates to
information supplied by the Company or the Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in subsection (c) of
this Section 5, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in subsection (c) of this Section 5 with respect to notice
of commencement of any actions shall apply if a claim for contribution is to be
made under this subsection (d); provided, however, that no additional notice
shall be required with respect to any action for which notice has been given
under subsection (c) for purposes of indemnification. The Company and the
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 5 were determined solely by pro rata allocation or by any other
method of allocation that does not take account of





                                      -12-






<PAGE>

the equitable considerations referred to in this Section 5. Notwithstanding the
provisions of this Section 5, the Purchaser shall not be required to contribute
any amount in excess of the amount of compensation received by each of them. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

         6. Miscellaneous.

         (a) This Agreement shall survive the death or disability of the
Purchaser and shall be binding upon the Purchaser's heirs, executors,
administrators, successors and permitted assigns.

         (b) This Agreement and the documents referred to herein constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and together supersede all prior discussions or agreements in respect
thereof.

         (c) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute a
single document.

         (d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Any dispute arising out of or in
connection with this Agreement shall be settled by arbitration in accordance
with the rules of the American Arbitration Association then in effect. The
location of any hearing shall be New York, New York.



                                      -13-






<PAGE>




         IN WITNESS WHEREOF, the Purchaser has executed this Agreement this 8th
day of May, 2001.

                                   D.H. BLAIR INVESTMENT BANKING CORP.



                                   By:     /s/ J. Morton Davis
                                      -----------------------------------------
                                   Name:       J. Morton Davis
                                   Title:



ACCEPTED AND AGREED TO:

NEWS COMMUNICATIONS, INC.


By:     /s/  Paul Mastronardi
   -----------------------------
Name:        Paul Mastornardi
Title        VP-CFO





                                      -14-






<PAGE>


                                   Schedule A

1. Pursuant to that certain Letter Agreement dated December 11, 2000 by and
between the Company and Steven A. Farbman, the Company has agreed to purchase
from Mr. Farbman 150,000 shares of the Company's common stock for an aggregate
purchase price of $300,000.

2. The Company has an obligation to pay to each holder of its 10% Convertible
Preferred Stock on September 19th of each year dividends in the amount of $500
per share. The Company has the option to pay such dividends in cash or in shares
of the Company's common stock.

3. The Company made a verbal commitment to grant to its Controller Options to
purchase 10,000 shares of its common stock.




                                      -15-



</TEXT>
</DOCUMENT>
