NETGATEWAY, INC.
                              STOCK GRANT AGREEMENT


     Stock  Grant  Agreement  (the  "Agreement"),  dated as of this  19th day of
October,  1999, between Netgateway,  Inc., a Nevada corporation (the "Company"),
and Keith D. Freadhoff (the "Grantee").

     The Grantee is a senior executive of the Company.

     Prior to the date hereof,  the Grantee held  compensation  and  performance
options to purchase up to an aggregate of 676,000  shares of common stock of the
Company  (the  "Options").  By  separate  Letter  Agreement  dated of even  date
herewith, the Grantee has agreed to terminate the Options.

     In exchange for terminating the Options,  the  Compensation  Committee (the
"Committee")  of the Board of Directors  has  determined  that it is in the best
interests of the Company to issue to the Grantee  restricted common stock of the
Company as compensation  for the services that the Grantee has rendered and will
continue to render to the Company, on the terms and conditions set forth herein.

     In consideration of the premises and the mutual agreements set forth below,
the parties hereto agree as follows:

     1. Grant of Stock.  Pursuant to the terms and  conditions set forth herein,
the Company hereby grants and issues to the Grantee (the "Grant") as of the date
hereof (the "Grant Date), up to an aggregate of 400,000 shares (the "Shares") of
the common stock,  par value $.01 per share, of the Company (the "Common Stock")
as hereinafter provided.

     2. Nontransferability.  Until the Shares hereunder shall vest in accordance
with Section 3 hereof,  the Shares and any other rights granted  hereunder shall
not be transferable or assignable by the Grantee (whether by operation of law or
otherwise)  except by will or the laws of descent and  distribution  or, if then
permitted under Rule 16b-3,  pursuant to a qualified domestic relations order as
defined under the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder.

     3.  Vesting of Shares.  Subject to the other  terms set forth  herein,  the
Shares will vest in the Grantee in full on March 31, 2000.

     4. Taxes.  The Company or any  Subsidiary  or  Affiliate is  authorized  to
withhold from any  distribution of Shares amounts of withholding and other taxes
due in connection  with any  transaction  involving the Grant,  and to take such
other action as the Committee  may deem  advisable to enable the Company or such
Subsidiary or Affiliate and the Grantee to satisfy  obligations  for the payment
of withholding  taxes and other tax  obligations  relating to the Grant, if any.
This  authority  shall include  authority to withhold or receive Shares or other
property and to make cash  payments in respect  thereof in  satisfaction  of the
Grantee's tax obligations.

     5.  Termination  of  Employment,  etc.  Upon  termination  of the Grantee's
employment for any reason, including the breach by the Grantee of the Employment
Agreement among the Grantee, the Company and Netgateway, a corporation organized
under the laws of the  State of  Nevada  and a wholly  owned  Subsidiary  of the
Company,  dated as of January 1, 1999 (the "Employment  Agreement"),  any Shares
not already  vested in  accordance  with  Section 3 hereof,  shall be subject to
immediate forfeiture in all respects and Grantee shall have no right or claim to
any such unvested Shares.

     6.  Adjustments.  In the event that the Committee shall  determine,  in its
sole discretion, that any dividend or other distribution (whether in the form of
cash, shares of Common Stock or other property), recapitalization,  stock split,
reverse split, any reorganization, merger, consolidation, spin-off, combination,
repurchase,  share exchange,  license  arrangement,  strategic alliance or other
similar  corporate  transaction  or  event  affects  the  Shares  such  that  an
adjustment is  appropriate  to prevent  dilution or enlargement of the rights of
the Grantee, then the Committee shall make such equitable changes or adjustments
as it deems  necessary  or  appropriate  to any or all of the number and kind of
Shares which may thereafter be issued in connection herewith.

     7. No  Rights  as  Stockholder.  The  Grantee  shall  have no  rights  as a
stockholder with respect to any Shares subject to the Grant prior to the date on
which such Shares shall vest in accordance with Section 3 hereof.


<PAGE>

     8. Representations of the Company.

     a. Organization and Standing.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.

     b.  Corporate  Power.  The Company has all  necessary  corporate  power and
authority to execute,  deliver and perform this  Agreement and the  transactions
contemplated  hereby,  and has all  requisite  corporate  power and authority to
issue  the  Shares  hereunder  and to carry  out the  transactions  contemplated
hereby.

     c.  Shares.  Upon  issuance,  the Shares will be duly  authorized,  validly
issued,  fully paid and nonassessable,  and issued in accordance with applicable
laws.

     9. Representations of the Grantee.

     a. Authority. The Grantee has duly executed and delivered this Agreement to
the Company,  and its  obligations  hereunder  are the legal,  valid and binding
obligations of the Grantee and are enforceable in accordance with their terms

     b.  Restriction  on  Transfer;  Risk  of  Forfeiture.  The  Grantee  hereby
acknowledges  and agrees  that the  Shares  have not been  registered  under the
Securities Act of 1933, as amended (the "Act"), or qualified with the securities
regulatory  agency of any state and may not be resold or  otherwise  disposed of
unless  registered  under the Act or qualified  with the  securities  regulatory
agency of any state which has  jurisdiction  over any such transfer or unless an
exemption from such registration or qualification is available. The Grantee will
transfer the Shares only in accordance  with the applicable  requirements of all
federal  and  state   securities  laws.  The  Grantee   acknowledges   that  the
certificate(s) evidencing the Shares will bear a legend regarding restriction on
transfer.  The  Grantee  further  acknowledges  that the Shares are subject to a
substantial risk of forfeiture as set forth in Section 5 hereof.

     c. Investment. The Grantee is receiving the Shares for its own account, for
investment  purposes only, and not for the account of any other person,  and not
with a view to,  or for  offer or sale in  connection  with,  any  distribution,
assignment or resale to others or to fractionalization in whole or in part.

     10.  No  Rights  to  Continued  Employment.  Nothing  in the  Grant or this
Agreement  shall  confer upon the Grantee the right to continue in service or be
entitled to any  remuneration  or benefits not set forth in this Agreement or to
interfere with or limit in any way the right of the Company or any Subsidiary or
Affiliate to terminate the Grantee's service as an officer of the Company or any
Subsidiary or Affiliate.

     11. Compliance with Legal and Exchange Requirements. The granting, issuance
and delivery of the Shares pursuant to the terms of this Agreement and the other
obligations of the Company hereunder shall be subject to all applicable  federal
and state laws, rules and  regulations,  and to such approvals by any regulatory
or governmental agency as may be required.  The Company, in its discretion,  may
postpone the issuance or delivery of Shares  hereunder until  completion of such
stock exchange  listing or registration or qualification of such Shares or other
required  action under any state,  federal or foreign law, rule or regulation as
the Company may consider  appropriate,  and may require the Grantee to make such
representations  and furnish such information as it may consider  appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules and regulations.

     12. Change in Control  Provisions.  In the event of a Change in Control (as
defined in the  Employment  Agreement),  the Shares shall  become fully  vested,
whether or not  theretofore  vested as forth herein,  as more fully described in
Section 4(g) of the Employment Agreement.

     13. Notices. All notices or any other communications  hereunder shall be in
writing and delivered personally or by registered or certified mail or overnight
courier, addressed, if to the Company, to Netgateway,  Inc., 300 Oceangate, Long
Beach,  California 90802;  Attention:  Secretary,  and if to the Grantee, at the
address set forth on the signature  page hereof,  subject to the right of either
party to designate at any time hereafter in writing some other address.

     14.  Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of California without giving effect to the
conflict of laws principles thereof.

     15.  No  Assignment.  Neither  this  Agreement  nor  any of the  rights  or
obligations  of the  Grantee  hereunder  may be  transferred  or assigned by the
Grantee except as set forth in paragraph 2 hereof.


                                       2
<PAGE>

     16. Benefits. This Agreement shall be binding upon and inure to the benefit
of the parties  hereto.  This  Agreement  is for the sole benefit of the parties
hereto and not for the benefit of any other party.

     17. Severability. If any provision of this Agreement shall be determined to
be illegal and unenforceable by any court of law, the remaining provisions shall
be severable and enforceable in accordance with their terms.

     18.  Amendments.  No modification,  amendment or waiver or any provision of
this  Agreement  shall be  effective  unless it is in writing  and signed by the
parties hereto.

     19. Counterparts.  This Agreement may be executed in counterparts,  each of
which shall constitute one and the same instrument.



                                       3
<PAGE>

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed  by  the  Chief  Executive  Officer,  and  Grantee  has  executed  this
Agreement, both as of the day and year first above written.

                                        NETGATEWAY, INC.


                                        By: /s/ Roy W. Camblin, III
                                            --------------------------
                                            Roy W. Camblin, III
                                            Chief Executive Officer

/s/ Keith D. Freadhoff
-----------------------------
Keith D. Freadhoff

                                       4
<PAGE>