Employment Agreement

Employment Agreement

by Liberty Group Holdings Inc
March 14th, 2000

                              EMPLOYMENT AGREEMENT

        Employment Agreement (this "Agreement") made and entered into as of July
1, 1999,  by and between  Liberty Food Group Ltd., a Delaware  corporation  (the
"Company"),  with offices at 11 52nd Street, Brooklyn, New York 11232, and Barry
Hawk, residing at 638 Willow Road, West Hempstead, New York 11552 ("Executive").

                                    RECITALS:

        WHEREAS,  the Company desires to employ Executive and Executive  desires
to be  employed  by the  Company,  upon  the  terms,  covenants  and  conditions
hereinafter set forth.

                                   AGREEMENT:

        NOW,  THEREFORE,  in  consideration of the mutual promises and covenants
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereby  agree as
follows:

EMPLOYMENT;  TERM.  THE COMPANY  SHALL  EMPLOY  EXECUTIVE  AS  PRESIDENT,  CHIEF
OPERATING OFFICER,  SECRETARY AND HEAD OF CORPORATE DEVELOPMENT,  SUBJECT TO THE
SUPERVISION AND DIRECTION OF THE COMPANY'S CHIEF EXECUTIVE OFFICER AND ITS BOARD
OF  DIRECTORS  (THE  "BOARD"),  FROM THE DATE  HEREOF  UNTIL JUNE 30, 2004 (SUCH
PERIOD,  THE "TERM").  THE TERM SHALL BE  AUTOMATICALLY  EXTENDED FOR ADDITIONAL
PERIODS OF ONE YEAR EACH,  UNLESS  EITHER PARTY GIVES NOTICE TO THE OTHER OF ITS
INTENTION  NOT TO  RENEW  AT  LEAST  60  DAYS  PRIOR  TO THE  EXPIRATION  OF THE
THEN-CURRENT TERM.

                          COMPENSATION; REIMBURSEMENT.

BASE SALARY. FOR SERVICES RENDERED BY EXECUTIVE HEREUNDER, THE COMPANY SHALL PAY
EXECUTIVE A BASE SALARY OF ONE HUNDRED SIXTY  THOUSAND  DOLLARS  ($160,000)  PER
ANNUM, IN EQUAL INSTALLMENTS (THE "BASE SALARY"), IN ACCORDANCE WITH THE PAYROLL
PRACTICES  OF THE  COMPANY IN EFFECT  FROM TIME TO TIME.  THE AMOUNT OF THE BASE
SALARY SHALL BE INCREASED  ANNUALLY BY AN AMOUNT EQUAL TO THE GREATER OF (I) 10%
OF THE THEN CURRENT BASE SALARY AND (II) THE PERCENT  CHANGE THE CONSUMER  PRICE
INDEX FOR ALL URBAN  CONSUMERS  FOR REGION II (NEW YORK AND NORTHERN NEW JERSEY)
FOR THE TWELVE MONTH PERIOD ENDING IN MAY OF EACH YEAR DURING THE TERM.

INCENTIVE BONUS. IN ADDITION TO THE BASE SALARY,  EXECUTIVE SHALL BE ELIGIBLE TO
RECEIVE AN INCENTIVE BONUS  ("INCENTIVE  BONUS") EACH YEAR IN AN AMOUNT NOT LESS
THAN 10% OF THE BASE SALARY (THE "MINIMUM INCENTIVE BONUS"),  NOR MORE THAN 100%
OF THE BASE SALARY, AS DETERMINED BY THE BOARD CONSIDERING THE OPERATING RESULTS
OF THE COMPANY FOR EACH YEAR OF THE TERM; PROVIDED,  THAT IN ORDER TO RECEIVE AT
LEAST THE MINIMUM  INCENTIVE  BONUS, FOR EACH YEAR OF THE TERM THE COMPANY SHALL
HAVE ACHIEVED EITHER (A) PRE-TAX INCOME OF $100,000.00, OR (B) REVENUE GROWTH OF
10% OR MORE,  BASED ON REVENUES FOR THE 12 MONTH PERIOD ENDING EACH JUNE 30. THE
INCENTIVE  BONUS SHALL BE PAID WITHIN 30 DAYS AFTER SUCH OPERATING  RESULTS HAVE
BEEN  DETERMINED BY THE COMPANY'S  ACCOUNTANTS,  BUT IN ANY CASE, NOT LATER THAN
OCTOBER 15 OF EACH YEAR.

ADDITIONAL BENEFITS. (A) IN ADDITION TO THE BASE SALARY AND THE INCENTIVE BONUS,
EXECUTIVE SHALL BE ENTITLED TO ALL OTHER BENEFITS OF EMPLOYMENT  PROVIDED TO THE
OTHER EXECUTIVES OF THE COMPANY OR ITS AFFILIATES,  INCLUDING BUT NOT LIMITED TO
RETIREMENT, HEALTH, DISABILITY, AND LIFE INSURANCE.

FROM JULY 1, 1999  THROUGH JUNE 30,  2000,  EXECUTIVE  SHALL BE ENTITLED TO FOUR
WEEKS PAID  VACATION;  FROM JULY 1, 2000 THROUGH  JUNE 30,  2002,  FIVE WEEKS OF
ANNUAL  PAID  VACATION;  FROM AND AFTER JULY 1, 2002,  SIX WEEKS OF ANNUAL  PAID
VACATION.  IN THE EVENT THAT EXECUTIVE IS ABSENT FROM WORK ON ANY DAY WHICH IS A
JEWISH  HOLIDAY,  SUCH  ABSENCE  SHALL BE  TREATED AS A PAID  HOLIDAY  AND NOT A
VACATION DAY.

REIMBURSEMENT.  EXECUTIVE  SHALL BE REIMBURSED  FOR ALL REASONABLE OUT OF POCKET
BUSINESS EXPENSES FOR BUSINESS TRAVEL AND  ENTERTAINMENT  INCURRED IN CONNECTION
WITH  THE  PERFORMANCE  OF HIS  DUTIES  HEREUNDER  (A) SO LONG AS SUCH  EXPENSES
CONSTITUTE  BUSINESS  DEDUCTIONS  FROM  TAXABLE  INCOME FOR THE  COMPANY AND ARE
EXCLUDABLE  FROM TAXABLE  INCOME TO THE EXECUTIVE  UNDER THE GOVERNING  LAWS AND
REGULATIONS  OF THE  INTERNAL  REVENUE CODE OF 1986,  AS AMENDED  (THE  "CODE");
PROVIDED, THAT EXECUTIVE SHALL NEVERTHELESS BE ENTITLED TO FULL REIMBURSEMENT IN
ANY CASE WHERE THE INTERNAL  REVENUE  SERVICE MAY,  UNDER SECTION  274(N) OF THE
CODE,  DISALLOW  TO THE  COMPANY  DEDUCTION  OF 50% OF MEALS  AND  ENTERTAINMENT
EXPENSES;  AND  (B) TO THE  EXTENT  SUCH  EXPENSES  DO NOT  EXCEED  THE  AMOUNTS
ALLOCABLE  FOR SUCH  EXPENSES IN BUDGETS THAT ARE APPROVED  FROM TIME TO TIME BY
THE  COMPANY.  THE  REIMBURSEMENT  OF  EXECUTIVE'S  BUSINESS  EXPENSES  SHALL BE
MONTHLY,  UPON PRESENTATION TO AND APPROVAL BY THE COMPANY OF VALID RECEIPTS AND
OTHER APPROPRIATE DOCUMENTATION FOR SUCH EXPENSES.

                                     DUTIES.

CORPORATE DEVELOPMENT; ACQUISITIONS. (A) THE EXECUTIVE'S PRIMARY DUTIES SHALL BE
(I) TO ACT AS HEAD OF CORPORATE  DEVELOPMENT  AND (II)  MANAGEMENT OF THE DAY TO
DAY OPERATIONS OF THE COMPANY.  EXECUTIVE WILL BE RESPONSIBLE  FOR  IDENTIFYING,
NEGOTIATING,  AND STRUCTURING  ACQUISITIONS  ON BEHALF OF THE COMPANY,  AND WILL
CONDUCT  THE DUE  DILIGENCE  ON THE  TARGET  COMPANIES  AS WELL AS ENGAGE  OTHER
PROFESSIONALS (I.E. LEGAL, ACCOUNTING, OR ACTUARIAL) TO ASSIST IN SUCH PROCESS.

EXECUTIVE  INTENDS  TO UTILIZE  HIS  NETWORK OF  CONTACTS  WITHIN THE  FINANCIAL
COMMUNITY TO IDENTIFY  SOURCES OF FINANCING FOR THE  CONTEMPLATED  TRANSACTIONS,
AND WILL  FURTHER  WORK WITH  COUNSEL  ON THE  FINANCIAL  AND  STRATEGIC  PUBLIC
RELATIONS, PRESS RELEASES, AND FILINGS FOR THE COMPANY. EXECUTIVE WILL ALSO MEET
WITH WALL  STREET  ANALYSTS  AND  INSTITUTIONS  TO SEEK  RESEARCH  COVERAGE  AND
INVESTMENT INTEREST IN THE COMPANY.

UPON CONSUMMATION OF ANY ACQUISITION,  EXECUTIVE WILL OVERSEE THE INTEGRATION OF
THE ACQUIRED COMPANY INTO THE OPERATIONS OF THE COMPANY.

GENERAL MANAGEMENT. EXECUTIVE'S DUTIES SHALL INCLUDE, BUT NOT BE LIMITED TO, THE
DUTIES DESCRIBED AS FOLLOWS:

EMPLOY, PAY, SUPERVISE AND DISCHARGE ALL EMPLOYEES OF THE COMPANY, AND DETERMINE
ALL  MATTERS  WITH  REGARD TO SUCH  PERSONNEL,  INCLUDING,  WITHOUT  LIMITATION,
COMPENSATION, BONUSES AND FRINGE BENEFITS;

ESTABLISH  PROCEDURES FOR IMPLEMENTING THE POLICIES  ESTABLISHED BY THE COMPANY;
AND

CAUSE THE COMPANY TO BE OPERATED IN COMPLIANCE WITH ALL LEGAL REQUIREMENTS.

ASSIGNMENT OF DUTIES.  EXECUTIVE SHALL HAVE SUCH OTHER DUTIES AS MAY BE ASSIGNED
TO HIM FROM TIME TO TIME BY THE COMPANY'S  CHIEF  EXECUTIVE  OFFICER OR BOARD OF
DIRECTORS,  COMMENSURATE WITH HIS EXPERIENCE AND  RESPONSIBILITIES AS PRESIDENT,
CHIEF OPERATING OFFICER AND SECRETARY.

DEVOTION OF TIME. EXECUTIVE HEREBY AGREES TO DEVOTE HIS FULL TIME, ABILITIES AND
ENERGY TO THE FAITHFUL  PERFORMANCE OF THE DUTIES  ASSIGNED TO HIM OR HER AND TO
THE PROMOTION AND FORWARDING OF THE BUSINESS  AFFAIRS OF THE COMPANY;  PROVIDED,
THAT NOTHING  CONTAINED  HEREIN SHALL PREVENT  EXECUTIVE FROM DEVOTING  BUSINESS
TIME AND ATTENTION TO (A)  CASEXPRESS.COM,  LLC, (B) LIBERTY TRADING LLC AND (C)
KNOLLWOOD CONTAINER LLC.

CONFLICTING ACTIVITIES.

EXECUTIVE SHALL NOT, DURING THE TERM OF THIS AGREEMENT,  BE ENGAGED IN ANY OTHER
BUSINESS  ACTIVITY  WITHOUT THE PRIOR  CONSENT OF THE BOARD OF  DIRECTORS OF THE
COMPANY;  PROVIDED,  HOWEVER,  THAT THIS  RESTRICTION  SHALL NOT BE CONSTRUED AS
PREVENTING  EXECUTIVE FROM INVESTING HIS PERSONAL ASSETS IN PASSIVE  INVESTMENTS
IN  BUSINESS  ENTITIES  WHICH ARE NOT IN  COMPETITION  WITH THE  COMPANY  OR ITS
AFFILIATES,  OR FROM PURSUING  BUSINESS  OPPORTUNITIES AS PERMITTED BY PARAGRAPH
3.5.

EXECUTIVE AGREES TO PROMOTE AND DEVELOP ALL BUSINESS  OPPORTUNITIES THAT COME TO
HIS ATTENTION RELATING TO CURRENT OR ANTICIPATED FUTURE BUSINESS OF THE COMPANY,
IN A MANNER  CONSISTENT  WITH THE BEST  INTERESTS  OF THE  COMPANY  AND WITH HIS
DUTIES UNDER THIS AGREEMENT.  SHOULD EXECUTIVE  DISCOVER A BUSINESS  OPPORTUNITY
THAT DOES NOT  RELATE TO THE  CURRENT  OR  ANTICIPATED  FUTURE  BUSINESS  OF THE
COMPANY, HE SHALL FIRST OFFER SUCH OPPORTUNITY TO THE COMPANY.  SHOULD THE BOARD
OF THE COMPANY NOT EXERCISE ITS RIGHT TO PURSUE THIS BUSINESS OPPORTUNITY WITHIN
A REASONABLE  PERIOD OF TIME, NOT TO EXCEED SIXTY (60) DAYS,  THEN EXECUTIVE MAY
DEVELOP  THE  BUSINESS  OPPORTUNITY  HIMSELF;   PROVIDED,   HOWEVER,  THAT  SUCH
DEVELOPMENT  MAY IN NO WAY  CONFLICT OR  INTERFERE  WITH THE DUTIES OF EXECUTIVE
HEREUNDER.  FURTHER,  EXECUTIVE MAY DEVELOP SUCH BUSINESS  OPPORTUNITIES ONLY ON
HIS OWN  TIME,  AND MAY NOT USE ANY  SERVICE,  PERSONNEL,  EQUIPMENT,  SUPPLIES,
FACILITY,  OR TRADE SECRETS OF THE COMPANY IN SUCH DEVELOPMENT.  AS USED HEREIN,
THE  TERM  "BUSINESS  OPPORTUNITY"  SHALL  NOT  INCLUDE  BUSINESS  OPPORTUNITIES
INVOLVING  INVESTMENT IN PUBLICLY TRADED STOCKS,  BONDS OR OTHER SECURITIES,  OR
OTHER INVESTMENTS OF A PERSONAL NATURE.

        STOCK OF  COMPANY.  DURING  THE TERM,  EXECUTIVE  SHALL BE  ENTITLED  TO
PURCHASE   STOCK  OF  THE  COMPANY  IN  THE  SAME   AMOUNTS  AND  FOR  THE  SAME
CONSIDERATION,  TERMS AND  CONDITIONS  AS  PROVIDED TO OTHER  EXECUTIVES  OF THE
COMPANY.  THE  MANNER  OF  ACQUISITION  OF STOCK  SHALL BE  STRUCTURED  SO AS TO
MINIMIZE ADVERSE TAX CONSEQUENCES TO EXECUTIVE.

              CONFIDENTIALITY OF TRADE SECRETS AND OTHER MATERIALS.

TRADE SECRETS.  OTHER THAN IN THE  PERFORMANCE  OF HIS OR HER DUTIES  HEREUNDER,
EXECUTIVE  AGREES  NOT  TO  DISCLOSE,  EITHER  DURING  THE  TERM  OF  HIS OR HER
EMPLOYMENT  BY THE COMPANY OR AT ANY TIME  THEREAFTER,  TO ANY  PERSON,  FIRM OR
CORPORATION ANY INFORMATION  CONCERNING THE BUSINESS AFFAIRS,  THE TRADE SECRETS
OR THE CUSTOMER LISTS OR SIMILAR INFORMATION OF THE COMPANY.

OWNERSHIP OF TRADE SECRETS;  ASSIGNMENT OF RIGHTS.  EXECUTIVE HEREBY AGREES THAT
ALL KNOW-HOW, DOCUMENTS,  REPORTS, PLANS, PROPOSALS,  MARKETING AND SALES PLANS,
CLIENT LISTS,  CLIENT FILES AND  MATERIALS  MADE BY HIM OR HER OR BY THE COMPANY
ARE THE  PROPERTY OF THE COMPANY AND SHALL NOT BE USED BY HIM IN ANY WAY ADVERSE
TO THE COMPANY'S INTERESTS. EXECUTIVE SHALL NOT DELIVER, REPRODUCE OR IN ANY WAY
ALLOW  SUCH  DOCUMENTS  OR THINGS  TO BE  DELIVERED  OR USED BY ANY THIRD  PARTY
WITHOUT SPECIFIC  DIRECTION OR CONSENT OF THE BOARD OF DIRECTORS OF THE COMPANY.
EXECUTIVE  HEREBY  ASSIGNS TO THE COMPANY ANY RIGHTS WHICH HE OR SHE MAY HAVE IN
ANY SUCH TRADE SECRET OR PROPRIETARY INFORMATION.

INDEMNITY.  THE COMPANY HEREBY  INDEMNIFIES THE EXECUTIVE FROM LIABILITY FOR ANY
PRIOR ACTS OF THE COMPANY,  INCLUDING  BOTH THE  COMMISSION  OR OMISSION OF SAID
ACTION OR DISCLOSURE,  AND THE EXECUTIVE SHALL BE INDEMNIFIED BY THE COMPANY FOR
ANY ACT PERFORMED BY HIM IN GOOD FAITH WITHIN THE SCOPE OF HIS EMPLOYMENT.

                                  TERMINATION.

BASIS FOR TERMINATION.

EXECUTIVE'S  EMPLOYMENT  HEREUNDER  MAY BE  TERMINATED  AT ANY  TIME  BY  MUTUAL
AGREEMENT OF THE PARTIES.

THIS  AGREEMENT  SHALL  AUTOMATICALLY  TERMINATE ON THE LAST DAY OF THE MONTH IN
WHICH   EXECUTIVE  DIES  OR  BECOMES   PERMANENTLY   INCAPACITATED.   "PERMANENT
INCAPACITY"  AS USED HEREIN SHALL MEAN MENTAL OR PHYSICAL  INCAPACITY,  OR BOTH,
REASONABLY  DETERMINED  BY  THE  COMPANY'S  BOARD  OF  DIRECTORS  BASED  UPON  A
CERTIFICATION OF SUCH INCAPACITY BY, IN THE DISCRETION OF THE COMPANY'S BOARD OF
DIRECTORS,  EITHER EXECUTIVE'S  REGULARLY ATTENDING PHYSICIAN OR A DULY LICENSED
PHYSICIAN  SELECTED BY THE  COMPANY'S  BOARD OF DIRECTORS,  RENDERING  EXECUTIVE
UNABLE TO PERFORM  SUBSTANTIALLY  ALL OF HIS OR HER DUTIES  HEREUNDER  AND WHICH
APPEARS  REASONABLY  CERTAIN TO  CONTINUE  FOR AT LEAST SIX  CONSECUTIVE  MONTHS
WITHOUT  SUBSTANTIAL  IMPROVEMENT.  EXECUTIVE  SHALL BE DEEMED  TO HAVE  "BECOME
PERMANENTLY  INCAPACITATED"  ON THE DATE THE  COMPANY'S  BOARD OF DIRECTORS  HAS
DETERMINED  THAT  EXECUTIVE  IS  PERMANENTLY   INCAPACITATED   AND  SO  NOTIFIES
EXECUTIVE.

EXECUTIVE'S  EMPLOYMENT MAY BE TERMINATED BY THE COMPANY "WITH CAUSE," EFFECTIVE
UPON  DELIVERY OF WRITTEN  NOTICE TO  EXECUTIVE  GIVEN AT ANY TIME  (WITHOUT ANY
NECESSITY FOR PRIOR NOTICE) IF ANY OF THE FOLLOWING SHALL OCCUR:

       ANY MATERIAL BREACH OF EXECUTIVE'S OBLIGATIONS IN SECTION
       (6?) ABOVE; OR

       ANY MATERIAL ACTS OR EVENTS WHICH INHIBIT EXECUTIVE FROM FULLY PERFORMING
       HIS OR HER  RESPONSIBILITIES  TO THE COMPANY IN GOOD FAITH, SUCH AS (A) A
       FELONY CRIMINAL  CONVICTION;  (B) ANY OTHER CRIMINAL CONVICTION INVOLVING
       EXECUTIVE'S LACK OF HONESTY OR EXECUTIVE'S  MORAL TURPITUDE;  (C) DRUG OR
       ALCOHOL ABUSE; OR (D) GROSS CARELESSNESS OR GROSS MISCONDUCT.

EXECUTIVE'S EMPLOYMENT MAY BE TERMINATED BY THE COMPANY "WITHOUT CAUSE" (FOR ANY
REASON  OR NO  REASON  AT ALL) AT ANY TIME BY  GIVING  EXECUTIVE  60 DAYS  PRIOR
WRITTEN NOTICE OF TERMINATION,  WHICH TERMINATION SHALL BE EFFECTIVE ON THE 60TH
DAY FOLLOWING  SUCH NOTICE.  IF EXECUTIVE'S  EMPLOYMENT  UNDER THIS AGREEMENT IS
TERMINATED WITHOUT CAUSE, OR IF HIS AGENT IS TERMINATED UPON A CHANGE OF CONTROL
(AS DEFINED  BELOW),  THE  COMPANY  SHALL  IMMEDIATELY  (A) MAKE A LUMP SUM CASH
PAYMENT TO  EXECUTIVE  EQUAL TO THE SUM OF (I)  EXECUTIVE'S  BASE SALARY FOR THE
BALANCE OF THE YEAR IN WHICH TERMINATION  OCCURS, (II) A PRO RATA PORTION OF THE
MINIMUM INCENTIVE BONUS, IF ANY, EARNED FOR THE YEAR IN WHICH TERMINATION OCCURS
PRORATED  TO THE  DATE OF  TERMINATION,  AND  (III)  ANY  UNREIMBURSED  EXPENSES
ACCRUING TO THE DATE OF TERMINATION;  AND (B) MAKE A LUMP SUM CASH PAYMENT EQUAL
TO THE SUM OF EXECUTIVE'S  ANNUAL BASE SALARY FOR ALL ADDITIONAL YEARS REMAINING
IN THE TERM AND THE MINIMUM INCENTIVE BONUS FOR EACH SUCH YEAR. IMMEDIATELY UPON
THE COMPANY'S TERMINATION OF EXECUTIVE UNDER THIS PROVISION,  ALL STOCK OPTIONS,
ENTITLEMENTS,  MATCHING  FUNDS,  AND PROFIT  SHARING  PREVIOUSLY  GRANTED  SHALL
IMMEDIATELY  VEST. A "CHANGE OF CONTROL"  MEANS THAT THE EARLIER TO OCCUR AT ANY
TIME  DURING  THE TERM:  (I) ANY PERSON OR GROUP  ACQUIRES  49.9% OR MORE OF ANY
CLASS OF STOCK OR OTHER EQUITY INTEREST IN THE COMPANY, (II) ANY PERSON OR GROUP
ACQUIRES,  THROUGH PURCHASE,  VOTING AGREEMENT,  TRUST, DEVISE OR OTHERWISE, THE
POWER TO ELECT A MAJORITY OF THE BOARD,  OR OTHERWISE  DIRECT THE MANAGEMENT AND
AFFAIRS OF THE COMPANY, (III) THE COMPANY MERGES,  CONSOLIDATES OR ENTERS INTO A
BUSINESS  COMBINATION WITH ANOTHER ENTITY WHEREBY THE THEN-CURRENT  STOCKHOLDERS
OF THE  COMPANY  OWN IN THE  AGGREGATE  50% OR  LESS OF THE  OUTSTANDING  EQUITY
SECURITIES OF THE SURVIVING ENTITY AS A RESULT OF SUCH TRANSACTION,  OR (IV) THE
COMPANY SELLS ALL OR SUBSTANTIALLY  ALL OF ITS ASSETS (ANY SUCH EVENT IN CLAUSES
(I) THROUGH  (IV) OF THIS  PARAGRAPH,  A "CHANGE IN  CONTROL").  WHILE IT IS NOT
EXPECTED THAT PAYMENTS MADE TO EXECUTIVE  HEREUNDER  WILL BE TREATED AS PAYMENTS
SUBJECT TO ANY EXCISE TAX UNDER CODE  SECTION  4999,  TO THE EXTENT THEY ARE THE
COMPANY  SHALL  PAY  EXECUTIVE  AN AMOUNT  WHICH,  NET OF ANY  APPLICABLE  TAXES
THEREON,  WILL  PROVIDE  EXECUTIVE  WITH  SUFFICIENT  CASH TO PAY ANY EXCISE TAX
PAYABLE BY HIM BY REASON OF ANY PAYMENTS HEREUNDER.

UPON A CHANGE IN CONTROL,  EXECUTIVE WILL HAVE NO FURTHER OBLIGATIONS HEREUNDER,
AND SHALL  IMMEDIATELY  BE  ENTITLED  TO SEEK OTHER  EMPLOYMENT,  PROVIDED  THAT
NOTHING SHALL DIMINISH THE PAYMENTS DUE EXECUTIVE HEREUNDER.

EXECUTIVE MAY TERMINATE HIS  EMPLOYMENT  HEREUNDER BY GIVING THE COMPANY 60 DAYS
PRIOR  WRITTEN  NOTICE,  WHICH  TERMINATION  SHALL BE  EFFECTIVE ON THE 60TH DAY
FOLLOWING SUCH NOTICE.

PAYMENT UPON TERMINATION. UPON TERMINATION UNDER PARAGRAPHS 6.1(A), (B), (C), OR
(F), THE COMPANY  SHALL PAY TO  EXECUTIVE  WITHIN 10 DAYS AFTER  TERMINATION  AN
AMOUNT EQUAL TO THE SUM OF (I)  EXECUTIVE'S  BASE SALARY  ACCRUED TO THE DATE OF
TERMINATION AND (II) UNREIMBURSED EXPENSES ACCRUED TO THE DATE OF TERMINATION.

                                 MISCELLANEOUS.

TRANSFER AND  ASSIGNMENT.  THIS  AGREEMENT IS PERSONAL AS TO EXECUTIVE AND SHALL
NOT BE ASSIGNED OR TRANSFERRED  BY EXECUTIVE.  THIS AGREEMENT MAY BE ASSIGNED BY
THE COMPANY TO ANY ENTITY  WHICH IS A  SUCCESSOR  IN INTEREST OR OPERATOR OF THE
COMPANY'S BUSINESS.

SEVERABILITY.  NOTHING  CONTAINED  HEREIN  SHALL BE  CONSTRUED  TO  REQUIRE  THE
COMMISSION OF ANY ACT CONTRARY TO LAW. SHOULD THERE BE ANY CONFLICT  BETWEEN ANY
PROVISIONS HEREOF AND ANY PRESENT OR FUTURE STATUTE, LAW, ORDINANCE, REGULATION,
OR OTHER  PRONOUNCEMENT  HAVING THE FORCE OF LAW, THE LATTER SHALL PREVAIL,  BUT
THE PROVISION OF THIS AGREEMENT  AFFECTED THEREBY SHALL BE CURTAILED AND LIMITED
ONLY TO THE EXTENT NECESSARY TO BRING IT WITHIN THE REQUIREMENTS OF THE LAW, AND
THE  REMAINING  PROVISIONS  OF THIS  AGREEMENT  SHALL  REMAIN IN FULL  FORCE AND
EFFECT.

GOVERNING LAW.  THIS AGREEMENT IS MADE UNDER AND SHALL BE CONSTRUED
PURSUANT TO THE LAWS OF THE STATE OF DELAWARE.

COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS  AND ALL DOCUMENTS
SO  EXECUTED  SHALL  CONSTITUTE  ONE  AGREEMENT,  BINDING ON ALL OF THE  PARTIES
HERETO, NOTWITHSTANDING THAT ALL OF THE PARTIES DID NOT SIGN THE ORIGINAL OR THE
SAME COUNTERPARTS.

ENTIRE   AGREEMENT.   THIS  AGREEMENT   CONSTITUTES  THE  ENTIRE  AGREEMENT  AND
UNDERSTANDING  OF THE  PARTIES  WITH  RESPECT TO THE SUBJECT  MATTER  HEREOF AND
SUPERSEDES   ALL  PRIOR   ORAL  OR   WRITTEN   AGREEMENTS,   ARRANGEMENTS,   AND
UNDERSTANDINGS  WITH RESPECT THERETO.  NO REPRESENTATION,  PROMISE,  INDUCEMENT,
STATEMENT  OR  INTENTION  HAS BEEN MADE BY ANY PARTY HERETO THAT IS NOT EMBODIED
HEREIN, AND NO PARTY SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION,
PROMISE, INDUCEMENT, OR STATEMENT NOT SO SET FORTH HEREIN.

MODIFICATION. THIS AGREEMENT MAY BE MODIFIED, AMENDED, SUPERSEDED, OR CANCELLED,
AND ANY OF THE  TERMS,  COVENANTS,  REPRESENTATIONS,  WARRANTIES  OR  CONDITIONS
HEREOF  MAY BE WAIVED,  ONLY BY A WRITTEN  INSTRUMENT  EXECUTED  BY THE PARTY OR
PARTIES  TO  BE  BOUND  BY  ANY  SUCH  MODIFICATION,   AMENDMENT,  SUPERSESSION,
CANCELLATION, OR WAIVER.

ATTORNEYS'  FEES AND  COSTS.  IN THE  EVENT OF ANY  DISPUTE  ARISING  OUT OF THE
SUBJECT  MATTER OF THIS  AGREEMENT,  THE  PREVAILING  PARTY  SHALL  RECOVER,  IN
ADDITION TO ANY OTHER  DAMAGES  ASSESSED,  ITS  ATTORNEYS'  FEES AND COURT COSTS
INCURRED IN LITIGATING OR OTHERWISE  SETTLING OR RESOLVING SUCH DISPUTE  WHETHER
OR NOT AN ACTION IS  BROUGHT OR  PROSECUTED  TO  JUDGMENT.  IN  CONSTRUING  THIS
AGREEMENT, NONE OF THE PARTIES HERETO SHALL HAVE ANY TERM OR PROVISION CONSTRUED
AGAINST SUCH PARTY SOLELY BY REASON OF SUCH PARTY HAVING DRAFTED THE SAME.

WAIVER.  THE WAIVER BY EITHER OF THE PARTIES,  EXPRESS OR IMPLIED,  OF ANY RIGHT
UNDER THIS AGREEMENT OR ANY FAILURE TO PERFORM UNDER THIS AGREEMENT BY THE OTHER
PARTY,  SHALL NOT  CONSTITUTE  OR BE DEEMED AS A WAIVER OF ANY OTHER RIGHT UNDER
THIS  AGREEMENT OR OF ANY OTHER FAILURE TO PERFORM  UNDER THIS  AGREEMENT BY THE
OTHER PARTY, WHETHER OF A SIMILAR OR DISSIMILAR NATURE.

HEADINGS.  THE SECTION AND OTHER  HEADINGS  CONTAINED IN THIS  AGREEMENT ARE FOR
REFERENCE  PURPOSES  ONLY  AND  SHALL  NOT IN ANY WAY  AFFECT  THE  MEANING  AND
INTERPRETATION OF THIS AGREEMENT.

NOTICES.  ANY NOTICE UNDER THIS AGREEMENT MUST BE IN WRITING, MAY BE TELECOPIED,
SENT BY EXPRESS 24 HOUR GUARANTEED COURIER, OR HAND DELIVERED,  OR MAY BE SERVED
BY DEPOSITING  THE SAME IN THE UNITED STATES MAIL,  ADDRESSED TO THE PARTY TO BE
NOTIFIED,  POSTAGE  PREPAID AND  REGISTERED OR CERTIFIED  WITH A RETURN  RECEIPT
REQUESTED.  THE  ADDRESSES  OF THE PARTIES FOR THE RECEIPT OF NOTICE SHALL BE AS
FOLLOWS:

       If to the Company:     Liberty Group Holdings, Inc.
                              25 53rd Street
                            Brooklyn, New York 11232







                    [Remainder of Page Intentionally Omitted;
                            Signature Page to Follow]




       If to Executive:       Barry Hawk
                              638 Willow Road
                              West Hempstead, New York 11552

       with a copy in either
       case to :              Herrick, Feinstein LLP
                              2 Park Avenue
                            New York, New York 10016
                             Attention: David Lubin

       Each  notice  given by  registered  or  certified  mail  shall be  deemed
delivered and effective on the date of delivery as shown on the return  receipt,
and each notice delivered in any other manner shall be deemed to be effective as
of the time of actual  delivery  thereof.  Each party may change its address for
notice by giving notice thereof in the manner provided above.

        IN WITNESS  WHEREOF,  the parties  hereto  have  caused this  Employment
Agreement to be executed as of the date first set forth above.



LIBERTY GROUP HOLDINGS, INC.

          /s/
By:    ------------------------
       Name:   Barry Hawk
       Title:  President


          /s/
       -------------------------
       Barry L. Hawk