EMPLOYMENT AGREEMENT, dated as of January 1, 1999 (the "Agreement"),
          between Netgateway, Inc., a corporation organized under the laws of
          the State of Nevada (the "Company"), Netgateway, a corporation
          organized under the laws of the State of Nevada and a wholly owned
          subsidiary of the Company (the "Employer") and David Bassett-Parkins
          (the "Executive").
--------------------------------------------------------------------------------

          The Company and the Employer desires to retain the Executive to supply
services to the Company and the Employer, and the Executive desires to provide
the services to the Company and the Employer, on the terms and subject to the
conditions set forth in this Agreement.

          In consideration of (i) the Executive's agreement to supply the
services under this Agreement and (ii) the mutual agreements set forth below,
the sufficiency of which is hereby acknowledged, the Company, the Employer and
the Executive agree as follows:

          1.    SERVICES; TERM.

          (a)   The Employer hereby employs the Executive, and the Executive
hereby agrees to be employed by the Employer, as Chief Operating Officer of the
Employer, and the Executive will use his best efforts to perform services for
the Employer in accordance with directions given to Executive from time to time
by the Board of Directors of the Company (the "Board").

          (b)   The Executive shall participate in the operation of the business
of the Employer (the "Business"), and assume and perform all duties and
responsibilities consistent with his title and position (the "Services") as from
time to time requested by the Employer.

          (c)   The Executive shall be employed for the period commencing on
the date of this Agreement (the "Effective Date") and ending on December 31,
2001, unless sooner terminated pursuant to the provisions of this Agreement
(such period being referred to as the "Employment Period"); provided, however,
that on the second anniversary of the Effective Date (and on each succeeding
anniversary of the Effective Date during the Employment Period), the Employment
Period shall automatically be extended by an additional year (unless the
Company, the Employer or Executive shall give the other at least 120 days'
notice to the contrary).

          2.    PERFORMANCE BY EXECUTIVE. During the Employment Period, the
Executive shall devote all of his business time, attention, knowledge and skills
to, and use his best efforts to perform, the Services and shall promote the
interests of the Employer in carrying out the Services. Other than the
restrictions contained in Sections 5 and 6 of this Agreement, nothing herein
shall be deemed to preclude the Executive from

<PAGE>

continuing to serve on the board of directors of any business corporation or any
charitable organization on which he now serves or, subject to the prior approval
of the Board, from accepting appointment to additional boards of directors,
provided that such activities do not materially interfere with the performance
of Executive's duties hereunder.

          3.    COMPENSATION AND BENEFITS. During the Employment Period:

          (a)   BASE COMPENSATION. As compensation for the Services, the Company
shall pay Executive an annual base salary at the rate of $175,000 per year or
such higher amount as the Company's Compensation Committee (the "Committee") may
from time to time determine (the "Base Salary"), payable in accordance with the
Employer's payroll practices. The Base Salary shall be increased (but not
decreased) for cost of living adjustments, and subject to discretionary
increase, as determined by an annual review by the Committee on or prior to each
anniversary of the Effective Date.

          (b)   PERFORMANCE BONUS On or about July 31, 1999, Executive shall be
entitled to receive from the Company a performance bonus in the amount of
$50,000. In addition, Executive shall be entitled to receive a performance bonus
in the amount of $25,000 in respect of the fiscal quarter of the Company
starting July 1, 1999 and ending September 30, 1999 if the Company meets or
exceeds the financial projections set forth as Exhibit A to this Agreement (the
"Projections") for such fiscal quarter. Executive shall also be entitled to
receive a performance bonus in the amount of $25,000 in respect of the fiscal
quarter of the Company starting October 1, 1999 and ending December 31, 1999 if
the Company meets or exceeds the Projections for such fiscal quarter. For each
succeeding calendar years during the Employment Period commencing on January
1,2000, Executive shall be entitled to participate in any annual bonus plan of
the Company or the Employer and to receive an annual performance bonus from the
Company or the Employer in accordance with the terms thereof.

          (c)   STOCK OPTIONS. The Executive will be granted a number of options
pursuant to the Employer's 1998 Stock Option Plan (the "Options") to purchase
640,000 shares of the common stock, par value $.01 per share, of the Company, on
terms and conditions to be embodied in separate agreements between the Employer
and the Executive.

          (d)   BENEFIT PLANS. The Executive shall be entitled to receive
benefits from the Employer consistent with those in effect for the Employer's
senior executives, as those benefits are revised from time to time by the Board
of Directors of the Employer. Except as specifically provided in this Section 3,
nothing contained herein is intended to require the Employer to maintain any
existing benefits or create any new benefits.

          (e)   VACATIONS AND HOLIDAYS. The Executive shall be entitled to
vacation and paid holidays in accordance with the Employer's policy.

<PAGE>

          (f)   LIFE INSURANCE. With respect to each policy year or partial
policy year that this Agreement is in effect, the Company or the Employer shall
pay to or on behalf of Executive an amount sufficient to cover the cost of
premium payments on a split-dollar life insurance policy or policies (the
"Policy") providing a death benefit in the aggregate amount of $1,000,000 to be
acquired and owned by Executive, and such amounts shall be used to pay such
premiums. The Policy shall be in a form and shall provide for premium payments
in an amount reasonably acceptable to the Company and to Employer. The Executive
shall provide for the collateral assignment to the Company or to the Employer of
a portion of any cash surrender value or death benefits, as the case may be,
payable under the Policy in an amount sufficient to reimburse the Company or the
Employer, as the case may be, without interest, for the aggregate value of such
premium payments. In addition, Executive shall have the right to purchase up to
the maximum amount of group term life insurance available through any plan or
program adopted from time to time by the Company or the Employer for the benefit
of its executive employees.

          4.    TERMINATION.

          (a)   DEATH OR DISABILITY. If the Executive dies during the Employment
Period, the Employment Period shall terminate as of the date of the Executive's
death. If the Executive becomes unable to perform the Services for 180
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Executive, or, in case the Employer and the Executive cannot agree upon
a physician within 15 days, then by a physician selected by physicians
designated by each of the Employer and the Executive. The Executive's failure to
submit to any physical examination by such physician after such physician has
given reasonable notice of the time and place of such examination shall be
conclusive evidence of the Executive's inability to perform his duties
hereunder.

          (b)   CAUSE. The Company or the Employer, at its option, may terminate
the Employment Period and all of the obligations of the Company and the Employer
under this Agreement for Cause. The Employer shall have "Cause" to terminate the
Executive's employment hereunder in the event of (i) the Executive's conviction
of, or plea of guilty or NOLO CONTENDERE to a felony, (ii) the Executive's gross
negligence in the performance of the Services, which is not corrected within 15
business days after written notice, (iii) the Executive's knowingly dishonest
act, or knowing bad faith or willful misconduct in the performance of the
Services to the material detriment of the Company, which is not corrected within
15 business days after written notice, or (iv) the Executive's other material
breach of his obligations under this Agreement, which is not corrected within a
reasonable period of time (determined in light of the cure appropriate to such
material breach, but in no event less than 15 business days) after written
notice.

<PAGE>

          (c)   WITHOUT CAUSE. The Company or the Employer, at its option, may
terminate the Employment Period without Cause at any time upon 30 days advance
written notice.

          (d)   TERMINATION BY EXECUTIVE FOR GOOD REASON. The Executive may
terminate this Agreement upon 60 days' prior written notice to the Employer
for Good Reason (as defined below) if the basis for such Good Reason is not
cured within a reasonable period of time (determined in light of the cure
appropriate to the basis of such Good Reason, but in no event less than 15
business days) after the Employer receives written notice specifying the
basis of such Good Reason. "Good Reason" shall mean (i) the failure of the
Employer to pay any undisputed amount due under this Agreement or a
substantial diminution in benefits provided under this Agreement, (ii) a
substantial diminution in status, position and responsibilities of the
Executive, (iii) the Employer requiring the Executive to be based at any
office or location that requires a relocation or commute greater than 50
miles from the office or location to which the Executive is currently
assigned or (iv) the Employer's other material breach of his obligations
under this Agreement.

          (e)   WITHOUT GOOD REASON. The Executive, at his option, may terminate
the Employment Period without Good Reason at any time upon 30 days advance
written notice.

          (f)   PAYMENTS IN THE EVENT OF TERMINATION. Upon the termination of
the Employment Period for death, disability, by the Executive without Good
Reason, or by the Employer for Cause, the Employer shall pay to the Executive,
or his estate, as the case may be, the Base Salary and Performance Bonus earned
to the date of death or termination for disability or Cause, as the case may be.
In addition, all vested and unexercised Options shall remain exercisable by the
Executive for a period of 365 days. Upon the termination of the Employment
Period by the Employer without Cause or by the Executive for Good Reason, the
Employer shall pay to the Executive (A) the Base Salary and Performance Bonus
earned to the date of such termination, and (B) an additional amount in a lump
sum in cash equal to the Base Salary at the time of termination for a period
beginning on the date of such termination, and ending on the date that the
Employment Period would have ended pursuant to this Agreement had there been no
termination of Executive's employment, provided that in no event shall such
period be less than twelve months. In addition, all vested and unexercised
Options shall become and remain exercisable by the Executive until the
expiration date of the Options pursuant to the Option Agreement.

          (g)   TERMINATION FOLLOWING A CHANGE IN CONTROL. If, within the two
year period following a Change in Control (as defined below), (X) Executive's
employment is terminated by the Company or by the Employer for any reason other
than Executive's death or disability or for Cause, or (Y) Executive terminates
his employment for Good Reason, (i) the Company or the Employer shall pay
Executive as severance a lump sum amount equal to (A) three times the sum of (1)
Executive's then Base Salary plus (2) Executive's highest annual Performance
Bonus in the three year period immediately preceding such Change in Control and
(B) the present value of all other

<PAGE>

benefits otherwise payable through the then remaining Employment Period under
Sections 3(d) and 3(f) of this Agreement, and (ii) all outstanding equity
incentive awards shall immediately vest, and Executive shall be entitled to
receive a lump sum amount equal to the "spread" on any then outstanding stock
options or similar awards held by Executive in exchange for the surrender and
cancellation of such awards. A Change in Control shall be deemed to have
occurred if any of the following conditions shall have been satisfied: (i) any
"person" as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (other than the Company;
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company; or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership at such time of stock of the Company), is or becomes after the
Effective Date the "beneficial owner" (as defined in Rules 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company (not
included in the securities beneficially owned by such person any securities
acquired directly from the Company) representing 35% or more of the combined
voting power of the Company's then outstanding securities, (ii) during any
period of two consecutive years (not including any period prior to the Effective
Date), individuals who at the beginning of such period constitute the Board of
Directors, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described within this definition of Change in Control) whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the Board of Directors then still
in office who either were members of the Board of Directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof, (iii)
the stockholders of the Company approve a merger or consolidation of the Company
with any other entity and, in connection with such merger or consolidation,
individuals who constitute the Board of Directors immediately prior to the time
any agreement to effect such merger or consolidation is entered into fail for
any reason to constitute at least a majority of the board of directors of the
surviving corporation following the consummation of such merger or
consolidation, or (iv) the stockholders of the Company approve (a) a plan of
complete liquidation of the Company or (b) an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.

          (h)   EXCISE TAX GROSS UP. In the event any of the payments hereunder
shall become subject to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any similar or
successor provision of federal, state or local law, the Company or the Employer
shall pay to Executive such additional amounts as may be necessary to offset
fully the tax effects of such excise tax or taxes, in accordance with the
procedures set forth in Exhibit B hereto.

          (i)   TERMINATION OF OBLIGATIONS. In the event of termination of the
Employment Period in accordance with this Section 4, all obligations of the
Employer and the Executive under this Agreement shall terminate, except for any
amounts payable by the Employer as specifically set forth in Sections 4(f) 4(g)
and 4(h) of this Agreement;

<PAGE>

PROVIDED, however, that notwithstanding anything to the contrary in this
Agreement, the provisions of Section 5 and Section 6 shall survive such
termination in accordance with their respective terms, and the relevant
provisions of Section 7 shall survive such termination indefinitely. In the
event of termination of the Employment Period in accordance with this Section 4,
the Executive agrees to cooperate with the Employer in order to ensure an
orderly transfer of the Executive's duties and responsibilities.

          5.    CONFIDENTIALITY; NON-DISCLOSURE.

          (a)   Except as provided in this Section 5(a), the Executive shall not
disclose any confidential or proprietary information of the Company and the
Employer or of their affiliates or subsidiaries to any person, firm,
corporation, association or other entity (other than the Company, the Employer,
their subsidiaries, officers or executives, attorneys, accountants, bank
lenders, agents, advisors or representatives thereof) for any reason or purpose
whatsoever (other than in the normal course of business on a need-to-know basis
after the Company or the Employer has received assurances that the confidential
or proprietary information shall be kept confidential), nor shall the Executive
make use of any such confidential or proprietary information for his own
purposes or for the benefit of any person, firm, corporation or other entity,
except the Company and the Employer. As used in this Section 5(a), the term
"confidential or proprietary information" means all information which is or
becomes known to the Executive and relates to matters such as trade secrets,
research and development activities, new or prospective lines of business
(including analysis and market research relating to potential expansion of the
business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,
potential business combinations, services procedures, pricing information and
private processes as they may exist from time to time; PROVIDED that the term
"confidential or proprietary information" shall not include information that is
or become generally available to the public (other than as a result of a
disclosure in violation of this Agreement by the Executive or by a person who
received such information from the Executive in violation of this Agreement).

          (b)   If the Executive is requested or (in the opinion of his counsel)
required by law or judicial order to disclose any confidential or proprietary
information, the Executive shall provide the Company or the Employer with prompt
notice of any such request or requirement so that the Company or the Employer
may seek an appropriate protective order or waiver of the Executive's compliance
with the provisions of this Section 5(a). The Executive will not oppose any
reasonable action by, and will cooperate with, the Employer to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the confidential or proprietary information. If,
failing the entry of a protective order or the receipt of a waiver hereunder, he
is, in the opinion of his counsel, compelled by law to disclose a portion of the
confidential or proprietary information, the Executive may disclose to the
relevant tribunal without liability hereunder only that portion of the
confidential or proprietary information which counsel advises the Executive he
is legally required to

<PAGE>

disclose, and each of the parties hereto agrees to exercise such party's best
efforts to obtain assurance that confidential treatment will be accorded such
confidential or proprietary information. During the Employment Period, and for
matters arising from events or circumstances occurring during the Employment
Period, the Company and the Employer will provide for the defense of matters
arising under this provision.

          6.    NON-SOLICITATION. The Executive agrees that he shall not, during
and for the period commencing on the Effective Date and ending on the date that
is one year after the termination of the Employment Period, for any reason
whatsoever, either individually or as an officer, director, stockholder,
partner, agent or principal of another business firm, induce any executive of
the Company, the Employer or any of their affiliates or subsidiaries to
terminate such person's employment with the Company, the Employer or such
affiliate or subsidiary or hire any executive of the Company, the Employer or
any of their affiliates to work with any business affiliated with the Executive,
provided, that the provisions of this Section 6 shall not apply in the event
that the Company or the Employer materially breaches its obligations under this
Agreement.

          7.    GENERAL PROVISIONS

          (a)   ENFORCEABILITY. It is the desire and intent of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, although the
Executive, the Company and the Employer consider the restrictions contained in
this Agreement to be reasonable for the purpose of preserving the Employer's
goodwill and proprietary right, if any particular provision of this Agreement
shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. It
is expressly understood and agreed that although the Company, the Employer and
the Executive consider the restrictions contained in Section 6 to be reasonable,
if a final determination is made by a court of competent jurisdiction that the
time or territory or any other restriction contained in this Agreement is
unenforceable against the Executive, the provisions of this Agreement shall be
deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable.

          (b)   REMEDIES. The parties acknowledge that the Company's and the
Employer's damages at law would be an inadequate remedy for the breach by the
Executive of any provision of Section 5 or Section 6, and agree in the event of
such breach that the Company or the Employer may obtain temporary and permanent
injunctive relief restraining the Executive from such breach, and, to the extent
permissible under the applicable statutes and rules of procedure, a temporary
injunction may be granted immediately upon the commencement of any such suit.
Nothing contained herein shall be construed as prohibiting the Company or the
Employer from pursuing any other

<PAGE>

remedies available at law or equity for such breach or threatened breach of
Section 5 or Section 6 of this Agreement.

          (c)   WITHHOLDING. The Employer shall withhold such amounts from any
compensation or other benefits referred to herein as payable to the Executive on
account of payroll and other taxes as may be required by applicable law or
regulation of any governmental authority.

          (d)   ASSIGNMENT; BENEFIT. This Agreement is personal in its nature
and the parties hereto shall not, without the written consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder;
PROVIDED that the provisions hereof shall inure to the benefit of, and be
binding upon, each successor of the Company and the Employer, whether by merger,
consolidation, transfer of all or substantially all of its assets, or otherwise.

          (e)   INDEMNITY. The Company and the Employer hereby agrees to
indemnify and hold the Executive harmless consistent with the Employer's policy
against any and all liabilities, expenses (including attorney's fees and costs),
claims, judgements, fines, and amounts paid in settlement actually and
reasonably incurred in connection with any proceeding arising out of the
Executive's employment with the Employer (whether civil, criminal,
administrative or investigative, other than proceedings by or in the right of
the Company or the Employer), if with respect to the actions at issue in the
proceeding the Executive acted in good faith and in a manner Executive
reasonably believed to be in, or not opposed to, the best interests of the
Company and the Employer, and (with respect to any criminal action) Executive
had no reason to believe Executive's conduct was unlawful. Said indemnification
arrangement shall (i) survive the termination of this Agreement, (ii) apply to
any and all qualifying acts of the Executive which have taken place during any
period in which he was employed by the Employer, irrespective of the date of
this Agreement or the term hereof, including, but not limited to, any and all
qualifying acts as an officer and/or director of any affiliate while the
Executive is employed by the Employer and (iii) be subject to any limitations
imposed from time to time under applicable law.

          (f)   NOTICES. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by facsimile (with
confirmation of receipt), addressed as follows:

          If to the Employer:

                         NetGateway
                         300 Oceangate
                         Long Beach, CA 90802
                         Attention:  Secretary

<PAGE>

                         Facsimile:  562-308-0021

          With a copy to

                         NetGateway, Inc.
                         300 Oceangate
                         Long Beach, CA 90802
                         Attention:  General Counsel
                         Facsimile:  562-308-0021

          If to the Executive:

                         David Bassett-Parkins
                         11494 Orchila Street
                         Glendale, California 91201
                         Facsimile:  562-308-0021

          With a copy to

                         Brock Silverstein LLC
                         One Citicorp Center, 56th Floor
                         New York, New York 10022
                         Attention:  Cynthia D. Mann, Esq.
                         Facsimile:  212-371-5500

or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.

          (g)   DISPUTE RESOLUTION; ATTORNEY'S FEES. The Company, the Employer
and the Executive agree that any dispute arising as to the parties' rights and
obligations hereunder shall be resolved by binding arbitration before a private
judge to be determined by mutually agreeable means. In such event, each of the
Company, the Employer and the Executive shall have the right to full discovery.
The Executive shall have the right, in addition to any other relief granted by
such arbitrator, to attorneys' fees in the event that a claim brought by the
Executive is decided in the Executive's favor (with the amount of such fees
being limited to those expended defending the claim or claims decided in favor
of the Executive). Any judgment by such arbitrator may be entered into any court
with jurisdiction over the dispute.

          (h)   ACKNOWLEDGEMENT. Executive acknowledges that he has been advised
by Employer to seek the advice of independent counsel prior to reaching
agreement with Employer or any of the terms of this Agreement.

          (i)   AMENDMENTS AND WAIVERS. No modification, amendment or

<PAGE>

waiver, of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.

          (j)   DESCRIPTIVE HEADINGS; CERTAIN INTERPRETATIONS. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.

          (k)   COUNTERPARTS; ENTIRE AGREEMENT. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement and the Option Agreement contain the
entire agreement among the parties with respect to the transactions contemplated
by this Agreement and the Option Agreement and supersede all prior agreements or
understandings among the parties with respect to the Executive's employment by
the Employer.

          (l)   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.

          (m)   CONSENT TO JURISDICTION. EACH OF THE COMPANY, THE EMPLOYER AND
THE EXECUTIVE HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT LOCATED IN LOS ANGELES COUNTY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND THE EXECUTIVE AGREES NOT
TO COMMENCE ANY LEGAL PROCEEDING RELATING THERETO EXCEPT IN SUCH COURT. EACH OF
THE COMPANY, THE EMPLOYER AND THE EXECUTIVE IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.


<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.

                                     NETGATEWAY, INC.


                                     By:
                                        -------------------------------
                                        Name:
                                        Title:



                                     ----------------------------------
                                            David Bassett-Parkins


<PAGE>

                                                                       EXHIBIT B

                                GROSS-UP PAYMENT

          In the event that any payment received by Executive or paid by the
Company or the Employer on behalf of Executive under this Agreement or under any
other plan, arrangement or agreement with the Company, the Employer or any
person whose actions result in a Change in Control (provided that the Company
and the Employer approve of the arrangement pursuant to which the payment by
such person is made to Executive) or any person affiliated with the Company or
the Employer or such person (collectively, the "Total Payments") will be subject
to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code, the
Company or the Employer shall pay to Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained or to be retained by
Executive, after deduction of any Excise Tax on the Total Payments and on any
Federal, state and local income, excise and/or other taxes upon the Gross-Up
Payment provided for hereunder, shall be equal to the Total Payments.

          For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) the Total
Payments shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors and reasonably acceptable to Executive, the Total Payments (in whole or
in part) do not constitute parachute payments, including by reason of Section
280G(b)(4)(A) of the Code, or such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered, within
the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and (ii) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Section 280G(d)(3) and (4) of the Code.

          For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay Federal income and other taxes at the highest
applicable marginal rate of taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income and other taxes at the highest
applicable marginal rate of taxation in the state and locality of Executive's
residence on the date the Gross-Up Payment is to be made, net of the maximum
reduction in Federal income taxes which could be obtained from deduction of such
state and local taxes and any other taxes. In the event that the Excise Tax is
subsequently determined to be less than the amount originally taken into account
hereunder, Executive shall repay to the Company or to the Employer, as the case
may be, at the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the Excise Tax and
Federal, state and local income and other taxes imposed on the Gross-Up Payment
being repaid by Executive to the extent that such repayment results in an actual
reduction in Excise Tax and/or a Federal, state or local income tax deduction)
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code (provided, however, that if all or any portion of the
amount of any repayment made to Executive by any governmental entity shall be
made at a higher rate of interest than that provided under Section 1274(b)(2)(B)
of the Code (the "Higher Interest Rate Amount"), Executive shall also repay to
the Company or to the Employer, as the case may be, interest on the Higher
Interest Rate Amount at a rate equal to the excess of such higher rate of

<PAGE>

interest over the rate provided under Section 1274(b)(2)(B) of the Code). In the
event that the Excise Tax is determined to exceed the amount originally taken
into account hereunder (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company or the Employer, as the case may be, shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties or additions to
tax payable by Executive with respect to such excess) at the time that the
amount of such excess is finally determined. The parties agree that such excess
will be considered to have been finally determined at the conclusion of Internal
Revenue Service administrative appellate proceedings, unless the parties
mutually agree to pay or settle such amount earlier, or agree to pursue an
appeal further. Each of Executive, the Company and the Employer shall reasonably
cooperate with each other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Excise Tax with
respect to the Total Payments. In the event of an audit or other administrative
or judicial proceeding relating to or arising from the issue of potential
liability for the Excise Tax, the Company shall pay all attorneys' and
accountants' fees and other costs reasonably incurred by the Executive in
connection with the audit or other proceeding to the extent such fees and costs
relate to such liability, provided, that in the case of judicial or
administrative proceedings, the Company consents to the pursuit of such
proceedings.

          The Gross-Up Payment payable pursuant hereto shall be payable (or, as
applicable, withheld), in whole or in part as applicable, on the earlier of (i)
the date the Company or the Employer is required to withhold the Excise Tax
pursuant to Section 4999 of the Code, or (ii) the date the Executive is required
to pay the Excise Tax.

          Executive shall notify the Company and the Employer of any audit or
review by the Internal Revenue Service of Executive's Federal income tax return
for the year in which a payment under this Agreement is made within ten days of
Executive's receipt of such audit or review. In addition, Executive shall also
notify the Company and the Employer of the final resolution of such audit or
review within then days of such resolution.


Source: OneCLE Business Contracts.