10.42




                              EMPLOYMENT AGREEMENT


               EMPLOYMENT AGREEMENT made as of January 1, 2003 by and between
VFINANCE, INC., a Delaware corporation (the "Company"), and John S. Matthews
("Employee") domiciled at 74 Millspring Road, Manhasset, New York 11030.

                                   WITNESSETH:
               WHEREAS, Employee wishes to be employed by the Company with the
duties and responsibilities as hereinafter described, and the Company desires to
assure itself of the availability of Employee's services in such capacity.

               NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and Employee hereby agree as follows:

1. EMPLOYMENT. The Company hereby agrees to employ Employee, and Employee hereby
agrees to serve the  Company,  upon the terms  and  conditions  hereinafter  set
forth.

2. TERM. The employment of Employee by the Company pursuant to this Agreement
shall be for an eighteen month (18) period commencing on the date hereof and
shall automatically be extended for additional one year periods on the eighteen
(18) month anniversary date of this Agreement (July 1, 2004) and each annual
anniversary date thereafter (July 1 of each year beginning in 2005) unless the
Company or the Employee has provided notice of non-renewal ninety (90) days
prior an anniversary date (the "Term"). For example, in the event the Company
has provided notice of non-renewal 90 days prior to July 1, 2004, there will be
only ninety (90) days remaining in the Term; in the event neither the Employee
nor the Company provided such notice ninety (90) days prior to July 1, 2004,
then the Term shall be extended to July 1, 2005 so that on July 1, 2004, the
total Term is one (1) year.

3. DUTIES. Employee shall, serve as, and have all power and authority inherent
in the offices of President, vFinance Investments, Inc., Retail Brokerage
Division reporting to the CEO and Chairman of vFinance Investments, Inc.
("Management"). The Employee shall be responsible for those areas in the conduct
of the business reasonably assigned to him consistent with responsibility for
the over-all growth and profitability of the retail brokerage operations of the
Company including trading to the extent it impacts upon the retail brokerage
operation and including retail investment banking operations. Employee shall
devote on a full time basis his business time and efforts to the business of the
Company; provided, however, that it is understood and agreed that, while
Employee may devote time to other business matters in which he has an interest
and may be an officer or director of other companies (including JSM Capital
Holding, Corp.) that have no conflicts of interest with the Company, in the
event of a conflict, Employee's first and primary responsibility shall be to the
full time performance of his duties for the Company. The Company understands
that Employee has also executed an Independent Contractor Agreement with the
Company, and the Company understands and agrees that Employee will also be
performing services as an Independent Contractor. The Company agrees that the
performance of such services as an Independent Contractor shall not be deemed a
conflict of interest hereunder provided that the Employee continues to
diligently perform his duties hereunder. Employee agrees that in the performance
of his duties hereunder, the employee in the routine conduct of his duties will
be performed at either the JSM Capital Holding, Corp. ("JSM") offices in New
York, New York or the Company's office located in Boca Raton, Florida. The
Employee shall be reimbursed for reasonable travel, lodging, and meal expenses
for work and travel to Boca Raton, Florida. The Company recognizes that from
time to time the employee in his reasonable judgment may perform services
required of him hereunder, off-site by means of telephone, facsimile, electronic
mail or other appropriate means.

<PAGE>

4.  COMPENSATION  AND  OTHER  PROVISIONS.  Employee  shall  be  entitled  to the
compensation and benefits hereinafter described in subparagraphs (a) through (e)
(such compensation and benefits being hereinafter  referred to as ("Compensation
Benefits").

      (a) BASE SALARY. The Company shall pay to Employee a base salary of
      $125,000 per annum for the first year of this Agreement ("Base Salary").
      The Base Salary and Employee's other compensation will be reviewed at
      least annually and may be increased (but not decreased) from time to time
      as Management may determine.

      (b) PARTICIPATION IN BENEFIT PLANS. During the Term, Employee shall be
      eligible to participate in all employee benefit plans and arrangements now
      in effect or which may hereafter be established, including, without
      limitation, all life, group insurance and medical care plans and all
      disability, retirement and other employee benefit plans of the Company.
      Additionally, Employee shall be added as an insured to any director and
      officer insurance policy that the Company hereafter procures.

      (c) OTHER PROVISIONS. Employee shall be entitled to four (4) weeks paid
      vacation per annum. Employee shall be reimbursed for all reasonable
      expenses incurred by him in the performance of his duties, including, but
      not limited to, cellular telephone, entertainment, travel and other
      expenses deemed reasonably necessary by his direct superiors.

      (d) DISCRETIONARY BONUSES. Employee shall be entitled to receive annual
      and/or interim cash bonuses and/or other bonuses when and in such amounts
      as may be determined by Management in its sole and reasonable discretion
      based upon Employee's performance, the Company's performance and/or other
      factors; provided, that, Management shall meet at least annually to review
      Employee's bonus entitlements.

      (e) INCENTIVE  COMPENSATION.  Employee  shall receive  quarterly
      incentive  compensation  payments as more fully  described on
      Schedule A attached hereto.

      (f) STOCK OPTIONS. On even date herewith, the Company and Employee shall
      enter into the Stock Option Agreement attached hereto as Exhibit B
      pursuant to which the Company shall grant to Employee certain options to
      purchase common stock of the Company upon such terms and conditions set
      forth therein.


<PAGE>


5. SEVERANCE AND CHANGE OF CONTROL PROVISIONS. Upon the occurrence of a
Triggering Event (as hereinafter defined), Employee shall be entitled to the
immediate receipt of Severance Payments and Benefits (as hereinafter defined)
from the Company in accordance with the terms hereinafter set forth.

(a) TRIGGERING  EVENT.  The  occurrence of any of the following  events shall be
defined as a "Triggering Event" for purposes hereof:

                  (1) The Company's termination of Employee's employment (other
                  than for Cause (as hereinafter defined)) at any time prior to
                  the expiration of the Term or within ninety days (90)
                  following a Change of Control (as hereinafter defined);

                  (2) The voluntary resignation of Employee for any reason
                  whatsoever within ninety (90) days following a Change of
                  Control;

                  (3) The voluntary resignation of Employee for "good reason, "
                  which for purposes hereof, shall be on written notice to the
                  Company and shall include, without limitation, (i) a demotion,
                  (ii) a reduction in salary, benefits, bonuses, incentives or
                  perquisites, or (iii) the relocation of Employee outside of
                  New York City, New York, (iv) the breach of the Independent
                  Contractor Agreement described in paragraph 12 by the Company;
                  or (v) the breach of the Branch Agreement (as defined herein
                  below) by the Company; or

                 (4) The death or Disability of the Employee(as defined herein).

(b) CHANGE OF CONTROL.  For  purposes  of this  Agreement,  the term  "Change of
Control" shall mean the occurrence of any of the following events:

                  (1)  Forty  percent (40%) or more of the Company's  voting
                       stock shall be acquired by any person (other than
                       Employee),  entity or affiliated group;

                  (2)  An unapproved  change to the majority  control of the
                       Company's  Board of Directors or a change in the majority
                       of the senior management of the Company;

                  (3)  Any merger, consolidation or business combination (i.e. a
                       Transaction) where more than fifty percent (50%) of the
                       Company's voting stock or more than fifty percent (50%)
                       of the merged and or consolidated business entity (if the
                       Company is not the surviving entity) shall be, as the
                       result of the Transaction, acquired by any person (other
                       than Employee), entity or affiliated group;

                 (4)   The sale of all or substantially all of the Company's
                       assets.

<PAGE>

(c) SEVERANCE  PAYMENTS AND BENEFITS.  For purposes of this Agreement,  the term
"Severance Payments and Benefits" shall mean:

                 (1)   Employee shall be entitled to a payment equal to the
                       Employee's highest annual Base Salary received by
                       Employee in respect of any year within the three (3) year
                       period preceding the Triggering Event plus all bonuses
                       and incentives which Employee is entitled to on the date
                       the Triggering Event occurred (with respect to all such
                       bonus amounts that would have accrued for fiscal quarters
                       occurring prior to the Triggering Event); such amount to
                       be paid to Employee over a period of twelve months in 12
                       equal and consecutive monthly payments.
                 (2)   All stock options, warrants, other stock appreciation
                       rights and other similar securities shall become
                       immediately and fully vested and all conditions
                       applicable to all contingently issued warrants, stock
                       options, appreciation rights and other similar securities
                       shall be deemed waived by the Company;
                 (3)   All benefits applicable to Employee and his family
                       members as described in Sections 5(a) and (b) of the
                       Agreement shall continue for a period of one (1) year
                       following the Triggering Event or through the expiration
                       of the Term (as if the Triggering Event had not
                       occurred), whichever is later;
                 (4)   In the event that Severance Payments and Benefits are
                       deemed to be "excess parachute payments" as defined under
                       Section 280G of the Internal Revenue Code, then the
                       Company shall pay to Employee an additional lump sum cash
                       payment as shall be necessary to provide Employee with
                       the same "after-tax" compensation and benefits as if no
                       such excise tax had been imposed.
                 (5)   The Company shall be required to pay any and all
                       attorneys' fees and costs that Employee may incur in
                       connection with the enforcement of his rights under this
                       Agreement or any dispute or settlement in connection a
                       court of law determines that the Employee is the
                       prevailing party. If the Employee seeks enforcement of
                       his rights under this Agreement and a court of law
                       determines that the Employee is not the prevailing
                       party, then the Employee shall pay the Company any and
                       all attorneys' fees and costs that the Company may incur
                       in connection therewith;

                 (6)   Severance Payments and Benefits will not be subject to
                       mitigation in any respect.

(d) STOCK OPTIONS,  WARRANTS AND STOCK APPRECIATION RIGHTS.  Notwithstanding the
foregoing,  all stock options,  warrants,  stock  appreciation  rights and other
similar  securities  shall  immediately  vest upon the occurrence of a Change of
Control  and at such  time all  conditions  applicable  to  contingently  issued
options,  warrants,  stock  appreciation  rights and other  securities  shall be
deemed waived by the Company.

<PAGE>

6. TERMINATION.  Employee's  employment hereunder shall terminate as a result of
any of the following events:

(a)      Employee's death;

(b)           Employee shall be unable to perform his duties hereunder by reason
              of illness, accident or other physical or mental disability for a
              continuous period of at least nine months or an aggregate of
              twelve months during any continuous eighteen month period
              ("Disability");

(c)           Voluntary termination by Employee (other than in respect of a
              Triggering Event) provided that employee provides the Company one
              ninety (90) day advance written notice of termination; or

(d)           For Cause, where "Cause" shall mean: (i) final non-appealable
              adjudication of Employee of a felony; (ii) consent, order or
              decree from the Securities and Exchange Commission or the NASD
              barring employing from the securities business; (iii) the
              determination of the Board (after written notice has been given to
              the Employee with a thirty day cure period) that Employee has
              engaged in material intentional misconduct; (iv) the gross neglect
              of his duties (which has not been cured within the applicable cure
              period), which has a continuing material adverse effect on the
              business of the Company; (v) the breach of the Independent
              Contractor Agreement described in paragraph 12 by the Employee; or
              (vi) the breach of the Branch Agreement by JSM Capital Holding
              Corp or Employee.

(e)           The occurrence of a Triggering Event as set forth in Paragraph 5
              (a) above.
              Any termination pursuant to subparagraph (b), (c) (d) or (e) of
              this Section shall be communicated by a written notice ("Notice of
              Termination"), such notice to set forth with specificity the
              grounds for termination if the result of "Cause". Employee's
              employment under this Agreement shall be deemed to have terminated
              as follows: (i) if Employee's employment is terminated pursuant to
              subparagraph (a) above, on the date of his death; (ii) if
              Employee's employment is terminated pursuant to subparagraph (b)
              (d) or (e) above, on the date on which Notice of Termination is
              given; and (iii) if Employee's employment is terminated pursuant
              to subparagraph (c) above, ninety (90) days after the date on
              which a Notice of Termination is given. The date on which
              termination is deemed to have occurred pursuant to this paragraph
              is hereinafter referred to as the "Date of Termination".

7. PAYMENTS ON TERMINATION. In the event that Employee's employment is
terminated pursuant to Section 6 above, the Company shall pay to Employee his
full Base Salary through the Date of Termination together with all incentive
compensation, benefits and other compensation, if any, due and owing as of that
date, plus any Severance and Benefit Payments to which Employee may be entitled
hereunder pursuant to Section 5(c) above.

<PAGE>


8. BOARD OF DIRECTORS. The Company shall cause Employee to be appointed as an
observer to the Board of Directors of the Company during the Term. Employee
shall be given notice of all Board meetings as if he were a director. The Board
reserves the right at its sole discretion to exclude Employee from attending any
meetings or participating in any conversations where the purpose of which is to
discuss the Employee's performance pursuant under this Agreement.


9. LIFE INSURANCE. If requested by the Company, Employee shall submit to such
physical examinations and otherwise take such actions and execute and deliver
such documents as may be reasonably necessary to enable the Company to obtain
life insurance on the life of Employee for the benefit of the Company.

10.  REPRESENTATIONS  AND  WARRANTIES.  Employee  represents and warrants to the
Company that he is under no contractual or other  restriction or obligation that
would  prevent the  performance  of his duties  hereunder or interfere  with the
rights of the Company hereunder.

11. DISCLOSURE AND PROTECTION OF CONFIDENTIAL INFORMATION.
(a)           For purposes of this Agreement  "Confidential  Information" means
              knowledge, information and material which is proprietary to the
              Company,  of which Employee may obtain  knowledge or access
              through or as a result of his employment by the Company (including
              information conceived, originated, discovered or developed in
              whole or in part by Employee).  Confidential  Information
              includes,  but is not limited to, (i)  technical  knowledge,
              information  and material  such as trade secrets, processes,
              formulas, data, know-how, improvements, inventions, computer
              programs,  drawings,  patents, and experimental and development
              work techniques, and (ii) marketing and other  information,  such
              as supplier lists,  customer or client  lists,  marketing  and
              business  plans,  business or technical  needs of customers,
              consultants,  licensees  or  suppliers  and their  methods  of
              doing business,  arrangements  with  customers,  consultants,
              licensees or suppliers, manuals and personnel  records or data.
              Confidential  Information also includes any information described
              above which the Company obtains from another party and which the
              Company treats as proprietary or designates as  confidential,
              whether or not owned or developed by the Company.  Notwithstanding
              the  foregoing,  any information  which is or becomes  available
              to the general public otherwise than by breach of this Section 11
              shall not constitute  Confidential  Information for purposes of
              this Agreement.

(b)           During the term of this Agreement and thereafter, Employee agrees
              to hold in confidence all Confidential Information and not to use
              such information for Employee's own benefit or to reveal, report,
              publish, disclose or transfer, directly or indirectly, any
              Confidential Information to any person or entity, or to utilize
              any Confidential Information for any purpose, except in the course
              of Employee's work for the Company.

(c)           Employee will abide by any and all security rules and regulations,
              whether formal or informal, that may from time to time be imposed
              by the Company for the protection of Confidential Information, and
              will inform the Company of any defects in, or improvements that
              could be made to, such rules and regulations.
<PAGE>

(d)           Employee will notify the Company in writing immediately upon
              receipt of any subpoena, notice to produce, or other compulsory
              order or process of any court of law or government agency if such
              document requires or may require disclosure or other transfer of
              Confidential Information.

(e)           Upon termination of employment, Employee will deliver to the
              Company any and all records and tangible property that contain
              Confidential Information that are in his possession or under his
              control.

12. COVENANT NOT TO COMPETE.

(a)           In consideration  for the Company entering into this Agreement and
              except as provided below, Employee covenants and agrees that
              during the Term and for a one (1) year period thereafter, Employee
              will not, without the express prior written consent of the
              Company, directly or indirectly, compete with the business of the
              Company anywhere within the United States of America. Employee
              will undertake no activities  that  may  lead  Employee  to
              compete  with  or to  acquire  rival, conflicting  or
              antagonistic  interests to those of the Company with respect to
              the  business of the Company,  whether  alone,  as a partner,  or
              as an officer, director, employee, independent contractor,
              consultant or shareholder holding 5% or more of the  outstanding
              voting  stock  of any  other  corporation,  or as a trustee,
              fiduciary  or other  representative of any other person or entity.
              Anything  herein to the  contrary  notwithstanding  and  except as
              provided  in Sections 12 (e), (f) and (g) below, the Company
              acknowledges and agrees that the  Employee has executed an
              Independent  Contractor  Agreement" ("IC Agreement") as
              an "Independent  Contractor" with the Company  effective as of
              December 19, 2002 and nothing  herein  contained  shall operate to
              restrict  the  Employee  from conducting the business of the
              Independent  Contractor (either as an independent
              contractor of the Company,  as an independent  contractor of
              another company, or as an independent  broker-dealer)  during,  or
              following the termination of this Agreement, or the IC Agreement,
              for any reason whatsoever,  in the tri-state New York City
              metropolitan  area and  Florida  or in any  other  state in which
              the Independent Contractor is doing business, or in the future
              does business,  under the IC Agreement as such  agreement may be
              amended or  supplemented  or replaced from time to time.  Except
              as provided in Sections 12 (e), (f) and (g) below, to the extent
              that the operation of the Independent  Contractor  whether or not
              the IC  Agreement  has  been  terminated,  should  at any  time be
              deemed  to be in competition or conflict with the  operations of
              the Company,  the Company hereby waives any such conflicts and any
              such competitive  activity shall not be deemed a violation of this
              Agreement.

<PAGE>

(b)           Except as provided in Sections  12 (e),  (f) and (g) of this
              Agreement,  during the Term and for a period of three (3) years
              after termination of employment,  Employee will not, directly or
              indirectly,  solicit or induce any other employee of the
              Company or any parent or affiliate to leave his or her
              employment,  or solicit or induce any  consultant or  independent
              contractor  to sever  that  person's  relationship  with the
              Company  or to  become an  employee  or  consultant  to any
              independent contractor or brokerage that the Employee is employed
              by or has an ownership interest in. Provided,  however,
              that in the event any provision of this  subparagraph  shall be in
              conflict with the provisions of the IC Agreement,  the
              provisions  of the IC Agreement  shall  prevail.  Furthermore,
              except as provided in Sections 12 (e), (f) and (g) below,
              upon  termination of this  Agreement and  termination of the IC
              Agreement,  nothing herein  contained  shall prohibit the
              Employee from  soliciting any other  employee or independent
              contractor who was employed or located at any branch office
              under the supervision of the Employee as an Independent
              Contractor, or JSM, pursuant to the IC Agreement.

(c)           If any court shall determine that the duration or geographical
              limit of any covenant contained in this Section 12 is
              unenforceable, it is the intention of the parties that covenant
              shall not thereby be terminated but shall be deemed amended to the
              extent required to render it valid and enforceable, such amendment
              to apply only in the jurisdiction of the court that has made such
              adjudication.

(d)           Employee acknowledges and agrees that the covenants contained in
              Sections 11 and 12 hereof are of the essence in this Agreement,
              that each of such covenants is reasonable and necessary to protect
              and preserve the interests, properties, and business of the
              Company, and that irreparable loss and damage will be suffered by
              the Company should Employee breach any of such covenants. Employee
              further represents and acknowledges that he shall not be precluded
              from gainful engagement in a satisfactory fashion by the
              enforcement of these provisions.

(e)           In the event there is a Change in Control and the Company
              exercises the purchase option ("Purchase Option") described
              Section 6 (c) to the Branch Agreement and Amendment to IC
              Agreement dated on even date herewith by and among the Company,
              Employee and JSM ("Branch Agreement"), the Employee and the
              Company agree as follows:

    (i) The Employee shall waive the right to receive any Severance and Benefits
        payments described herein;
    (ii) Section 12 (a) of this Agreement shall not be applicable to the
         Employee;
    (iii)Section 12 (b) of this Agreement shall be applicable to the Employee
         with respect to JSM, Independent Contractor and the Company except with
         respect to Ms. Andrea Boccafola and Mr. Brian Hageman.

(f)           In the event there is a Change in Control where the Company does
              not exercise the Purchase Option under the Branch Agreement and
              the Employee elects to receive Severance and Benefits payments
              described herein, then the Company and the Employee agree as
              follows:

<PAGE>

    (i)  The term of the IC  Agreement  shall not  terminate  due to a Change in
         Control as  provided  in Section 10 (c) of the Branch Agreement;
    (ii) Section 12 (a) of this Agreement shall be applicable
         for a term ending one (1) year from the later of the
         date this Agreement terminates or the date the IC
         Agreement terminates. Employee shall be permitted to
         own and operate JSM as the Independent Contractor.
   (iii) Section 12 (b) of this  Agreement  shall be  applicable  except with
         respect JSM  employees  or  employees of the  Independent Contractor.

(g)           In the event there is a Change in Control where the Company does
              not exercise the Purchase Option under the Branch Agreement and
              the Employee waives his right to receive Severance and Benefits
              payments described herein, then the Company and the Employee agree
              as follows:

   (i)   The term of the IC Agreement  shall not  terminated due to a Change in
         Control and as provided in Section 10 (c) of the Branch Agreement;
  (ii)   Section 12 (a) of this Agreement shall not be
         applicable and there shall be no prohibition
         whatsoever on Employee owning or operating JSM, as an
         independent contractor, as a broker dealer or
         otherwise.
  (iii)  Section 12 (b) of this  Agreement  shall be  applicable  except with
         respect JSM  employees  or  employees of the  Independent Contractor.

(h)           Anything herein to the contrary notwithstanding, in the event the
              employment of the Employee should be terminated under any
              circumstance that would constitute a Triggering Event under
              Subsections 5(a)(1) or 5(a)(3) of this Agreement and the Employee
              waives his right to receive Severance and Benefit payments
              described herein, the provisions of this Section 12 (a) shall not
              apply and Section 12 (b) shall only restrict Employee from
              soliciting employees of the Company.

         Any  reference in this Section 12 of the Agreement to an "employee of
              the Independent Contractor" shall be deemed to include anyone who
              is under the supervision and control of the Independent Contractor
              pursuant to the IC Agreement.

13. AVAILABILITY OF INJUNCTIVE RELIEF. Employee acknowledges and agrees that any
breach by him of the provisions of Sections 11 or 12 hereof will cause the
Company irreparable injury and damage for which it cannot be adequately
compensated in damages. Employee therefore expressly agrees that the Company,
subject to the provisions of Section 20 hereof providing for arbitration, shall
be entitled to seek injunctive and/or other equitable relief, on a temporary or
permanent basis to prevent any anticipatory or continuing breach of this
Agreement or any part hereof, and is secured as enforcement. Nothing herein
shall be construed as a waiver by the Company of any right it may have or
hereafter acquired to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of it.

<PAGE>

14.  SURVIVAL.  The  covenants,   agreements,   representations  and  warranties
contained  in or  made  pursuant  to this  Agreement  shall  survive  Employee's
termination  of  employment,  irrespective  of any  investigation  made by or on
behalf of any party.

15. MODIFICATION. This Agreement sets forth the entire understanding of the
parties With respect to the subject matter hereof, supersedes all existing
agreements between them concerning such subject matter, and may be modified only
by written instrument duly executed by each party.

16. NOTICES. Any notice required or permitted hereunder shall be deemed validly
given if delivered by hand, verified overnight delivery, or by first class,
certified mail to the following addresses (or to such other address as the
addressee shall notify in writing to the other party):

If to the Company:          vFinance Investments, Inc.
                            3010 N. Military Trail, Suite 300
                            Boca Raton, Florida 33431
                            Attention: CEO



If to Employee:             John S. Matthews
                            JSM Capital Holding Corp.
                            595 Madison Ave.
                            New York, N. Y. 10022

17. WAIVER. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. All waivers must be in writing.

18. BINDING EFFECT. The Company's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, and any attempt to do any
of the foregoing shall be void. The provisions of this Agreement shall be
binding upon the Employee and his heirs and personal representatives, and shall
be binding upon and inure to the benefit of the Company, its successors and
assigns.

19.  HEADINGS.  The headings in this  Agreement  are solely for  convenience  of
reference and shall be given no effect in the construction or  interpretation of
this Agreement.

<PAGE>

20. GOVERNING LAW - ARBITRATION. This Agreement is to be performed in the State
of Florida, and the validity, construction and enforcement of, and the remedies
under, this Agreement shall be governed in accordance with the laws of the State
of Florida, without giving effect to any choice of laws principles. Any
controversy, claim or counterclaim arising out of or in connection with this
Agreement, whether in contract, in tort or asserting rights created by Federal
or state statues or otherwise, shall be governed by the Code of Arbitration
Procedure of the NASD. Arbitration shall be conducted in New York City in
accordance with the Rules of the NASD, and judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
arbitrators may grant any remedy or relief that they deem just and equitable
including, but not limited to, specific performance of a contract. Each party
irrevocably consents to subject matter and personal jurisdiction before the
NASD. The parties covenant that under no conditions will any of them file any
action at law against any other party or bring any claim in any forum other than
before the NASD; provided, however, that all parties hereto consent to the
jurisdiction of any court of competent jurisdiction to obtain any preliminary
relief, such as a restraining order, injunction, or any other immediate relief
sought, pending the determination of the arbitration proceeding.

     21.  ENTIRE  AGREEMENT.  This  writing  constitutes  the binding and entire
agreement of the parties  superseding and  extinguishing all prior agreements or
understandings  regarding the subject matter hereof,  and may not be modified or
amended without a written document executed by the parties hereto.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first hereinabove written.

EMPLOYER:
                                       vFinance, Inc.

                                    By:
                                       -----------------------------------------
                                       Leonard J. Sokolow, CEO & President

                                    EMPLOYEE:

                                    By:
                                        ----------------------------------------
                                       John S. Matthews



<PAGE>




                                   Schedule A
                             Incentive Compensation

     In the capacity of President, Retail Brokerage Division (i.e., "Division"),
     Employee will be entitled receive annual incentive compensation ("Bonus")
     equal to 30% of the "Net Income" and "Net Securities" of the Division once
     Net Income exceeds $125,000. If Employee's salary of $125,000 (or a portion
     of it) is already deducted at arriving at Net Income, such amount shall be
     added back for purposes of this calculation.

     "Net Income" is defined as revenues less all direct and variable expenses
     of the Division per the Company's standard financial reporting policy and
     procedures which includes but is not limited to budgeted (fixed annually)
     divisional and corporate overhead. For purposes of this calculation:

      1. The Company and Employee must agree on the allocated  budgeted
         divisional  and fixed  overhead  which gets fixed on an annual
         basis;

      2. In no event shall corporate overhead exceed 10% of revenues of the
         Division; and

      3. Bonuses of the executive officers of the Company shall be excluded from
         corporate overhead.

     "Net Securities" shall be defined as "Gross Securities (Stock, Warrants, or
     Options) received by the Company in a transaction less options due to
     finders, employees of the Division or allocable to the other divisions of
     the Company pursuant to the Incentive Compensation Grid.

     Incentive compensation based on Net Income will be estimated and paid
     quarterly based upon year to date financial results projected for the
     Company's fiscal year. The maximum amount that the employee will be paid in
     any quarter will be 70% of the annual projected incentive compensation. The
     final Bonus payment will be payable within thirty days of the filing the
     Company's Form 10-K with the Securities and Exchange Commission.



<PAGE>

                                   Schedule B

                             STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT is entered into as of January 1, 2003 by and between
John S. Matthews  ("Optionee") and vFinance,  Inc., a Delaware  corporation (the
"Corporation").


                              W I T N E S S E T H:

WHEREAS, Optionee and the Corporation have concurrently herewith entered into a
certain Employment Agreement (the "Employment Agreement"); and

WHEREAS, the Corporation desires to grant to Optionee the option to acquire
shares of common stock, $.01 par value, of the Corporation (the "Common Stock")
upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
set forth herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, Optionee and the Corporation hereby agree as follows:

1. (a) GRANT OF THE OPTIONS. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to Optionee the right to purchase
(individually referred to as the "Option" or collectively referred to as the
"Options") from the Corporation Five Hundred Thousand (500,000) shares of the
Common Stock (the "Option Shares"), subject to the following vesting schedule,
at the purchase price equal to $0.20 per share for a five (5) year period
commencing on the date hereof:

     (i)   125,000 Option Shares shall vest immediately upon the date hereof;

     (ii)  125,000 Option Shares shall vest one (1) year from the date hereof;

     (iii) 125,000 Option Shares shall vest two (2) years from the date hereof;

     (iv)  125,000 Option Shares shall vest three (3) years from the date hereof

2. RIGHTS OF OPTIONEE. Optionee by virtue of holding the Options to purchase the
Option Shares shall not have any rights to any dividends to be distributed by
the Corporation to the shareholders or any other rights of a shareholder in the
Corporation with respect to any of the Option Shares until Optionee exercises
the Option to purchase the Option Shares pursuant to Section 5 of this
Agreement.

3. TRANSFERABILITY OF THE OPTIONS. The Options may not be assigned, transferred,
or otherwise disposed of, or pledged or hypothecated or in any way be subject to
execution, attachment or other process. Any assignment, transfer, pledge,
hypothecation or other disposition of the Options attempted contrary to the
provisions of this Agreement or any levy, execution, attachment or other process
attempted upon the Options will be null and void and without effect.

<PAGE>

4.  EXERCISE OF THE OPTIONS.  The Option to purchase the Option  Shares shall be
exercisable upon the terms and conditions hereinafter set forth:

Subject to the terms and conditions of this Agreement, the Option to purchase
the Option Shares shall be exercisable by Optionee upon delivery of notice to
the Corporation (the "Exercise Notice") in accordance with the procedure
prescribed in this Section 4. The Exercise Notice shall state that Optionee has
elected to exercise the Option or any portion thereof. The Option may be
exercised by the Optionee, in whole or in part, by the delivery of the Exercise
Notice to the office of the Corporation, and by payment to the Corporation of
the Purchase Price in cash or by wire transfer, for each share being purchased.
Upon the exercise of the Option, a certificate or certificates for the shares of
Common Stock so purchased, registered in the name of the holder, shall be
promptly delivered to the holder hereof within a reasonable time. The person in
whose name any certificate for shares of Common Stock is issued upon exercise of
the Option shall for all purposes be deemed to have become the holder of record
of such shares on the date on which the Exercise Notice was delivered and
payment of the Purchase Price was made, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

5. ACCELERATED VESTING AND EXERCISE PERIOD.

(a) DEATH OR DISABILITY. In the event of Optionee's death or Disability while
employed with the Corporation prior to Optionee's vesting or exercise of all of
the Options, then all of the Options shall become immediately vested and
exercisable. For purposes hereof, "Disability" shall mean Optionee's failure to
perform his employment duties with the Company for a continuous three month
period, or an aggregate of four months during any six month period, as a result
of ANY illness or accident, as verified by at least two U.S. licensed medical
doctors reasonably acceptable to the Company.

(b) CESSATION OF EMPLOYMENT. Notwithstanding anything to the contrary contained
herein, in the event that Optionee ceases to be employed by the Corporation for
any reason other than Optionee's death, Disability, the occurrence of a
Triggering Event or termination by the Company without cause (as defined within
the Employment Agreement) (the date of Optionee's cessation of employment shall
be referred to as the "Cessation Date"), then all non-vested Options shall
expire and be forfeited on the Cessation Date. In the event that the Company
terminates Optionee's employment without cause, or upon a Triggering Event, then
all non-vested Options shall immediately vest as of the Cessation Date.

(c) CHANGE OF  CONTROL.  In the event of a "Change of Control" as defined in the
Employment Agreement, then all non-vested Options shall immediately vest.

<PAGE>

6. RESERVATION OF SHARES. The Corporation covenants and agrees that at all times
that this Stock Option Agreement shall be in effect it shall have authorized,
and reserved, Common Stock of the Corporation sufficient for the exercise of the
Options and the purchase of Common Stock by Optionee.

7. SUBSTITUTION OF THIS AGREEMENT UPON ADOPTION OF QUALIFIED STOCK OPTION PLAN.
It is possible that the Corporation will, within twelve (12) months from the
date of this Agreement, adopt a Qualified Stock Option Plan for members of its
senior executive management, including Optionee. In the event of such adoption,
the Corporation agrees upon written request from Optionee to amend this
Agreement so as to cancel all unvested option rights set forth herein, PROVIDED,
HOWEVER that the same economic terms (including numbers of share options,
vesting periods and price) remain the same with respect to Optionee, and are
granted to Optionee, pursuant to the terms of the adopted Qualified Stock Option
Plan. All rights existing as to vested Stock Options as set forth herein shall
remain in effect notwithstanding the adoption of a Qualified Stock Option Plan.

8. INVESTMENT. Optionee acknowledges that the Option Shares are not being
offered pursuant to a registration statement under the Securities Act of 1933,
as amended (the "Act"), or any other securities laws. Optionee acknowledges that
the Option Shares are being acquired for Optionee's own account for investment
purposes only and not with a view to, or for sale in connection with, any public
distribution thereof and will not sell, or offer to sell or otherwise dispose,
of any interest in the Option Shares acquired by Optionee in violation of the
Act. Optionee has had substantial experience in business and financial matters
and in making investments of the type contemplated by this Agreement, is capable
of evaluating the merits and risks of the purchase of the Option Shares and is
able to bear the economic risks of such investment.

9. REGISTRATION RIGHTS AND LIQUIDITY. Although there can be no assurance that
the Option Shares will be registered under the Act, that an exemption from such
registration will be available, or that there will be a market for the Option
Shares in the future, the Corporation agrees to use its best efforts to enable
and facilitate Optionee's sale or disposition of the Option Shares in compliance
with the Act at the earliest date reasonably practicable. Furthermore, Optionee
is hereby granted piggy back registration rights as described in "Exhibit A"
attached hereto and incorporated herein.

10. ADJUSTMENTS. In the event of a stock dividend, stock split, share
combination, recapitalization, merger, consolidation or reorganization of or by
the Corporation, the number or class of shares purchasable (and purchase price
per share) upon exercise of the Option immediately prior thereto shall be
adjusted so that Optionee shall be entitled to receive the kind and number of
shares or other securities which Optionee would have owned or have been entitled
to receive after the happening of any of the events described above, had the
Option been exercised immediately prior to the happening of any of such events
or any record date with respect thereto. Any adjustment made pursuant to this
Section shall become effective immediately after the effective date of such
events retroactive to the record date, if any, for such events.

11. NOTICES. Any notice required or permitted hereunder shall be deemed validly
given if delivered by hand, verified overnight delivery, or by first class,
certified mail to the following address of Optionee (or to such other address as
Optionee may notify in writing to Corporation):

<PAGE>

           If to Optionee:             John S. Matthews
                                       74 Millspring Road,
                                       Manhasset, New York 11030

           If to the Company:          vFinance, Inc.
                                       3010 N. Military Trail, Suite 300
                                       Boca Raton, Florida 33431
                                       Attention: President

12.  BENEFITS OF AGREEMENT.  This Agreement shall inure to the benefit and shall
be binding upon the  successors,  heirs,  legal  representatives  and  permitted
assigns of the parties hereto.

13. SEVERABILITY. In the event that any one or more provisions of this Agreement
shall be deemed to be illegal or unenforceable such illegality or
unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.

14. GOVERNING LAW; VENUE. This Agreement will be covered and construed under the
laws of the State of Florida, without giving effect to rules governing conflicts
of law, with proper venue with respect to all disputes related to this Agreement
being Broward County, Florida.

15.   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  (2)  or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together shall constitute one and the same instrument.

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

                                         THE CORPORATION:

                                         VFINANCE, INC., a Delaware corporation


                                         By:
                                             -----------------------------------

                                        Title:
                                             -----------------------------------

                                        OPTIONEE:
                                             -----------------------------------
                                                John S. Matthews




<PAGE>



                                   EXHIBIT "A"

                               REGISTRATION RIGHTS

Capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Option to which this Exhibit A is attached.

(a) PIGGY-BACK REGISTRATION RIGHTS. If at any time commencing after January 1,
2004 until the expiration of the Option (the "Registration Period"),
vFinance.com, Inc. (the "Company") proposes to register any of securities under
the Securities Act (other than registration of a stock option, stock purchase or
compensation or incentive plan or of stock issued or issuable pursuant to any
such plan, or dividend investment plan, a registration of stock proposed to be
issued in exchange for securities or assets of, or in connection with the merger
or consolidation with, another person or entity , or a registration of stock
proposed to be issued in exchange for securities of such other person or
entity), the Company shall give prompt written notice thereof to the Holder and,
upon the written request made within ten (10) days after the Holder and, upon
receipt of such notice, the Company shall use its best efforts to effect as part
of such registration the registration under the Securities Act of that number of
the Option shares ("Option Shares") which the Holder requests the Company to
register, provided that if the registration relates to a firm commitment,
underwritten public offering, the managing underwriter of the Company's public
offering, if any, shall be of the opinion that the inclusion in such
registration of such number of Option Shares will not interfere with the
successful marketing of all of the Company's securities being registered. If the
managing underwriter, if any, reasonably requests the Holder to reduce in whole
or in part the number of Option Shares sought or be registered by the Holder,
the Holder shall comply with the request of the managing underwriter. In any
underwritten offering, the Holder shall sell the Option Shares registered as
part of such underwritten offering to the underwriters of such offering on the
same terms and conditions as apply to the Company. In connection with any
registration pursuant to this Section (a), the Holder shall provide the Company
with such information regarding the Holder and the distribution of the Option
Shares as the Company and the managing underwriter shall reasonably request for
use in the registration statement relating to such offering. The Company shall
pay all costs and expenses of the Holder. The Company shall not be obliged to
effect registration under the Securities Act pursuant to this Section (a) on
more than one occasion; PROVIDED, HOWEVER, that this limitation shall not apply
if the number of shares requested to be registered by the Holder shall have been
reduced pursuant to the second sentence of this Section (a) unless and until the
occurrence of an occasion on which the shares requested by the Holder to be
registered have not been so reduced.

(b) GENERAL CONDITIONS.  In connection with each registration  effected pursuant
to Section (a), the Company and the Holder agree as follows:

<PAGE>

(i) INDEMNIFICATION OF HOLDER. The Company shall indemnify and hold harmless the
Holder against any and all losses, claims, damages, or liabilities to which the
Holder may become subject under the Securities Act, or any other statute or
common law, including any amount paid in settlement of any litigation, commenced
or threatened, if such settlement is effected with the written consent of the
Company, and to reimburse them for any legal or other expenses incurred by them
in connection with investigating any claims and defending any action insofar as
any such losses, claim, damages, liabilities or actions arise out of or are
based upon 1) any untrue statement or alleged untrue statement of a material
fact, contained in the registration statement relating to the sale of the Option
Shares, or any post-effective amendment thereof, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, 2) any untrue statement
or alleged untrue statement of a material fact, contained in a preliminary
prospectus, if used prior to the effective date of such registration statement,
or contained in the prospectus (as amended or supplemented, if the Company shall
have filed with the SEC any amendment thereof or supplement thereto), if used
within the period during which the Company is required to keep the registration
statement to which the prospectus relates current pursuant to the terms hereof,
or the omission or alleged omission to state therein (if so used) the material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The indemnification
agreement contained in this agreement, however, shall not: 1) apply to such
losses, claims, damages, liabilities, or actions arising out of, or based upon,
any such untrue statement or alleged omission, if such statement or omission was
in reliance upon and in conformity with the information furnished in writing to
the Company by the Holder for use in the registration statement or any
preliminary prospectus or prospectus contained in the registration statement or
any amendment thereof or supplement thereto, or 2) inure to the benefit of any
underwriter from whom the person asserting any such losses, claims, damages,
expenses or liabilities purchased the securities which are the subject thereof
(or to the benefit of any person controlling such underwriter), if such
underwriter failed to send or give a copy of the prospectus to such person at or
prior to the written confirmation of the sale of such securities to such person.

(ii) INDEMNIFICATION OF THE COMPANY. The Holder and each underwriter of the
Option Shares to be registered (such party and such underwriters being referred
to severally in this subparagraph as the "Indemnifying Party") shall agree, in
the same manner and to the same extent as set forth in the preceding paragraph,
to indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, its
directors and those officers of the Company who shall have signed such
registration statement, with respect to any statement in or omission from such
registration statement or any post-effective amendment thereof or any
preliminary prospectus (as amended or supplemented, if amended or supplemented
as aforesaid) contained in such registration statement, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Indemnifying Party for use in such
registration statement or any preliminary prospectus or prospectus contained in
such registration statement or any amendment thereof or supplement thereto.

(iii) NOTICE OF INDEMNIFIABLE ACTION. Each indemnified party will, promptly
after the receipt of notice of the commencement of any action against such
indemnified party in respect of which indemnity may be sought from a party
hereto on account of an indemnity agreement contained in this Section, notify
the indemnifying party in writing of the commencement thereof. The omission of
any indemnified party so to notify an indemnifying party of any such action
shall relieve the indemnifying party from any liability in respect of such
action which it may have to such indemnified party on account of the indemnity
agreement contained in this Section, but shall not relieve the indemnifying
party from any other liability which it may have to such indemnified party.

<PAGE>

(iv) TERMINATION OF OBLIGATION. The Company shall not be required to file a
registration statement or to keep a registration statement effective if the
Option Shares could be publicly sold without registration under the Securities
Act.