January 10, 2001
Jill Glashow Padwa
25 Margrave Avenue
Providence, Rhode Island 02906

Dear Jill:

This is to confirm  that (1) you have  resigned as Executive  Vice  President of
Netgateway  effective as of December 31, 2000, (2) that Netgateway accepted your
resignation effective as of such date, (3) that Netgateway has agreed to provide
a favorable  reference  for you should you so request,  and (4) that you release
Netgateway  from  all of its  obligations  to you and all  claims  you may  have
against it,  including  under the  Employment  Agreement  between  yourself  and
Netgateway  dated as of December  15, 1999 once your final  payment is received.
All of the above is subject to the receipt of the $25,100  (less normal  payroll
tax  deductions).  This agreement shall not affect any of your rights under your
stock options that shall remain in effect in accordance with their terms.

I will  have the cash to you no later  than  eight  weeks  from the date of this
letter,  however it may be  substantially  sooner if I'm  successful at securing
financing this month.

Finally, you agree that within 10 days of payment of the $25,100 you will return
all equipment of the Company in your  possession,  including  your laptop.  That
would be greatly appreciated.

Each of us  represents to the other that they are not aware of any claim against
any other party in this  agreement,  other than the claims that are  released by
this agreement.  Each of us waives any and all rights and benefits  conferred by
the  provisions of Section 1542 of the Civil Code of the State of California and
any  similar  law of any  state  or  territory  of the  United  States  or other
jurisdiction. This section provides as follows:

                   "A  general  release  does not  extend  to  claims  which the
                   creditor  does not know or  suspect  to exist in his favor at
                   the time of executing the release, which if known by him must
                   have materially affected his settlement with the debtor."

Each of us  understands  and  acknowledges  that even if they should  eventually
suffer additional damages arising out of the matters herein released,  they will
not be able to make any  claims  for those  damages,  except  for breach of this
agreement.



<PAGE>




Netgateway, Inc.

                                            Accepted and Agreed:
                                            Date:_______________________________

By:_________________________________
Donald Danks
Chief Executive Officer
                                             ___________________________________
                                             Jill Padwa





Source: OneCLE Business Contracts.