Sample Business Contracts

Severance Agreement - Netgateway Inc. and Keith Freadhoff

                                                     January 10, 2001
Keith Freadhoff
219 Celebration Blvd.
Celebration, Fl 34747

Dear Keith:

This is to confirm  that (1) you have  resigned  as  Director,  Chairman,  Chief
Executive of  Netgateway  effective as of January 5, 2001,  (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  1998 once you have  received the
consideration  set forth below.  All of the above is subject to: (i) the receipt
of  approximately  $38,000 in  consulting  fees (ii)  reimbursement  of business
related expenses for which you submit proper documentation.  Consultant fees and
expenses will be paid at a rate of $5,000 every two weeks commencing February 5,
2001 until fully paid.  (iv)  Continuation of health  insurance  benefits on the
same terms as they currently exist for 6 months,  (v) the granting of a one-half
interest in a license to the code base of the ICC for use as a tool kit on terms
to be  negotiated  between  the  parties,  (vi)  a  one-half  interest  in a Sun
enterprise  server,  and (vii) stock options  and/or stock in  Netgateway,  Inc.
granted as of January 5, 2001,  the amount and strike price to be  determined as
follows:  50 percent of the amount of stock and/or options awarded or granted to
Donald Danks  ("DD")  during 2001 at the same strike price as granted to DD, and
25 percent of any stock  and/or  options  granted to DD  thereafter  at the same
strike  price.  Such  options  shall be  granted  under the  current  Netgateway
Executive Plan, shall be cashless and exercisable for ten years. All other terms
shall be the same as those granted to DD.

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


Netgateway, Inc.
                                               Accepted and Agreed:
Donald Danks
Chief Executive Officer
                                               Keith O. Freadhoff