EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  dated as of the 1st day of October 2000 by and
between  NETWOLVES  CORPORATION,   a  New  York  corporation   (hereinafter  the
"Company")  and Walter R.  Groteke,  an  individual  residing  at 12113  Alameda
Avenue, Clearwater, FL 33759 (hereinafter called "Groteke").

                              W I T N E S S E T H:

     WHEREAS,  the Company  desires to enter into an Employment  Agreement  with
Groteke; and

     WHEREAS,  Groteke  desires to enter into an Employment  Agreement  with the
Company;

     NOW, THEREFORE, it is agreed as follows:

     1. Prior Agreements  Superseded.  This Agreement supersedes any employment,
consulting or other  agreements,  oral or written,  entered into between Groteke
and the Company  prior to the date of this  Agreement  except for stock  options
previously granted to Groteke,  which stock options shall continue in full force
and effect.

     2.  Employment.  The Company  hereby  agrees to employ  Groteke and Groteke
hereby agrees to serve as  Vice-President-Sales of the Company with commensurate
responsibilities  and to  perform  such  services  as  dictated  by the Board of
Directors.  Groteke's  employment  hereunder  shall be on a full-time  basis and
Groteke shall not engage in any other  business,  except with the prior approval
of the  Board of  Directors  of the  Company.  Groteke  shall  serve in  similar
capacities  of such of the  subsidiary  corporations  of the  Company  as may be
selected   by  the  Board  of   Directors   without   additional   compensation.
Notwithstanding  the  foregoing,  it is  understood  that the  duties of Groteke
during the performance of employment shall not be inconsistent with his position
and title as Vice-President-Sales of the Company.

     3.  Term.  Subject  to  earlier  termination  on the terms  and  conditions
hereinafter  provided,  the  term  of this  Employment  Agreement  shall  end on
September 30, 2003,  provided that this  agreement  shall extend for  additional
one-year  periods unless Groteke  receives  written notice from the Company each
year on or before July 1 of said year that the Company will be  terminating  the
agreement.  In no event,  however,  shall this agreement extend beyond September
30, 2005.

     4. Compensation. For all services rendered by Groteke under this Agreement,
compensation shall be paid to Groteke as follows:

     (a) Groteke  shall be paid at the annual  rate of One Hundred  Seventy-Five
Thousand ($175,000) Dollars.

     (b)  During  the  period  of  employment   Groteke  shall  be  eligible  to
participate in the Company's stock option and stock purchase plans to the extent
determined  in the  discretion  of the  Board of  Directors  of the  Company  or
committee thereof.

     (c) Groteke shall be entitled to participate in any short-term or long-term
incentive plan which the Company has in existence or which may be adopted.

     (d) During the period of employment, Groteke shall be furnished with office
space and secretarial service and facilities  commensurate with his position and
adequate for the performance of his duties.

<PAGE>

     (e) Groteke shall be entitled to fully  participate in all benefit programs
available to  executive  employees  of the Company  throughout  the term of this
Agreement.

     (f) Groteke shall be entitled to four (4) weeks of vacation and sick leaves
consistent with current practice of the Company.

     5. Expenses.  Groteke shall be reimbursed for all  out-of-pocket  expenses,
including medical expenses, reasonably incurred by him in the performance of his
duties hereunder.  Expense reports,  with receipts and  justifications,  must be
submitted to the Chairman of the Board for approval.

     6. Severance Benefits.  Groteke shall be entitled to the severance benefits
provided for in  subsection  (c) hereof in the event of the  termination  of his
employment  by  the  Company  without  cause  or in  the  event  of a  voluntary
termination  of  employment by Groteke for good reason.  In such event,  Groteke
shall  have no duty to  mitigate  damages  hereunder.  Groteke  and the  Company
acknowledge that the foregoing provisions of this paragraph 6 are reasonable and
are  based  upon the  facts  and  circumstances  of the  parties  at the time of
entering into this Agreement,  and with this  Agreement,  and with due regard to
future expectations.

     (a)  The term "cause" shall mean:

          (i) Groteke's willful and continued  failure to substantially  perform
     his duties under this Agreement (other than any such failure resulting from
     his  incapacity  due to  physical  or  mental  illness)  after  demand  for
     substantial  performance  is  delivered  to Groteke by the  Chairman of the
     Board of the Company which specifically  identifies the manner in which the
     Board believes Groteke has not substantially performed his duties.

          (ii)  Groteke's  failure  to  refuse  to  follow  directions  from the
     Company's Board of Directors  provided that (a) Groteke is provided written
     notice of such  directions  and a reasonable  period in which to comply and
     (b) Groteke's  compliance  with any such direction  would not be illegal or
     unlawful.

          (iii)Any  act or fraud,  embezzlement  or theft  committed  by Groteke
     whether  or not in  connection  with his  duties  or in the  course  of his
     employment  which  substantially  impairs his ability to perform his duties
     hereunder.

          (iv) Any willful disclosure by Groteke of confidential  information or
     trade secrets of the Company or its affiliates.

          For purposes of this paragraph,  no act or failure to act on Groteke's
     part shall be considered  "willful"  unless done, or omitted to be done, by
     Groteke not in good faith and without  reasonable belief that his action or
     omission  was in the best  interest  of the  Company.  Notwithstanding  the
     foregoing,  Groteke shall not be deemed to have been  terminated  for cause
     unless and until there shall have been  delivered to him a copy of a notice
     of  termination  from  the  Chairman  of the  Board  of the  Company  after
     reasonable  notice to  Groteke  and an  opportunity  for  Groteke  with his
     counsel to be heard before the Board of  Directors  of the Company  finding
     that in the good  faith  opinion  of such Board of  Directors  Groteke  was
     guilty of the  conduct  set  forth in  clauses  (i),  (ii) or (iii) of this
     paragraph and specifying the particulars thereof in detail.

     (b) For these purposes,  Groteke shall have "good reason" to terminate this
Agreement if:

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<PAGE>


          (i)   the   Company    removes    Groteke   from   the   position   of
     Vice-President-Sales at any time during the term of this Agreement;

          (ii) Groteke's place of employment is moved beyond a fifty-mile radius
     from the Company's current facility in Tampa, Florida as a direct result of
     an event described in Section 14(a) or (b) hereof.

     (c) The severance  benefits  under this section in the event of termination
without  cause or by Groteke for "good  reason",  shall consist of the continued
payment to  Groteke  for the  remaining  term of this  Agreement,  of the annual
salary  provided  in  Section  4(a)  hereof  plus the  immediate  vesting of all
outstanding options.

     7.  Death.  In the  event  of  Groteke's  death  during  the  term  of this
Agreement,  Groteke's legal  representative shall be entitled to receive his per
annum base salary as provided in  paragraph  4(a) of this  Agreement to the last
day of the calendar  quarter  following the calendar  quarter in which Groteke's
death shall have occurred and  thereafter to receive  one-half (1/2) of the base
salary  provided  in  paragraph  4(a) of this  Agreement  for the balance of the
period covered by this Employment Agreement.

     8. Non-Competition.

     (a) Groteke agrees that,  during the term of this  Agreement,  he will not,
without the prior  written  approval of the Board of  Directors  of the Company,
directly or indirectly,  through any other  individual or entity,  (a) become an
officer or employee of, or render any services [including  consulting  services]
to, any  competitor  of the  Company,  (b) solicit,  raid,  entice or induce any
customer of the Company to cease  purchasing  goods or services from the Company
or to become a customer of any  competitor of the Company,  and Groteke will not
approach any  customer for any such purpose or authorize  the taking of any such
actions by any other  individual  or entity,  or (c)  solicit,  raid,  entice or
induce any  employee of the  Company,  and Groteke  will not  approach  any such
employee for any such purpose or authorize  the taking of any such action by any
other individual or entity. However, nothing contained in this paragraph 8 shall
be construed as  preventing  Groteke from  investing  his assets in such form or
manner as will not require  him to become an officer or  employee  of, or render
any services (including consulting services) to, any competitor of the Company.

     (b) During the term hereof and at all times  thereafter,  Groteke shall not
disclose to any  person,  firm or  corporation  other than the Company any trade
secrets, trade information,  techniques or other confidential information of the
business of the Company, its methods of doing business or information concerning
its customers learned or acquired by Groteke during Groteke's  relationship with
the Company and shall not engage in any unfair trade  practices  with respect to
the Company.

          9.   Enforcement.

     (a) The  necessity  for  protection  of the  Company  and its  subsidiaries
against  Groteke's  competition,  as  well  as the  nature  and  scope  of  such
protection,  has been carefully considered by the parties hereto in light of the
uniqueness of Groteke's  talent and his importance to the Company.  Accordingly,
Groteke agrees that, in addition to any other relief to which the Company may be
entitled,  the Company  shall be entitled to seek and obtain  injunctive  relief
(without the  requirement  of any bond) for the purpose of  restraining  Groteke
from any actual or threatened  breach of the covenants  contained in paragraph 8
of this Agreement.

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<PAGE>


     (b) If for any  reason  a court  determines  that  the  restrictions  under
paragraph 8 of this Agreement are not reasonable or that consideration  therefor
in adequate,  the parties  expressly  agree and covenant that such  restrictions
shall be interpreted,  modified or rewritten by such court to include as much of
the duration and scope identified in paragraph 8 as will render the restrictions
valid and enforceable.

     10.  Notices.  Any notice to be given to the  Company or Groteke  hereunder
shall be deemed given if delivered personally,  telefaxed or mailed by certified
or registered mail, postage prepaid,  to the other party hereto at the following
addresses:

     To the Company:                    NetWolves Corporation
                                        One Corporate Drive
                                        Suite 103
                                        Bohemia, New York 11716

     Copy to:                           David H. Lieberman, Esq.
                                        Blau, Kramer, Wactlar & Lieberman, P.C.
                                        100 Jericho Quadrangle
                                        Suite 225
                                        Jericho, NY  11753

     To Groteke:                        Walter R. Groteke
                                        12113 Alameda Avenue
                                        Clearwater, FL 33759

     Either party may change the address to which notice may be given  hereunder
by giving notice to the other party as provided herein.

     11.  Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the Company,  its successors and assigns,  and upon Groteke,
his heirs, executors, administrators and legal representatives.

     12. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties except as specifically otherwise indicated herein.

     13. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.

     14. In the event (a) the  Company has been  consolidated  or merged into or
with any other  corporation  or all or  substantially  all of the  assets of the
Company  have been sold to another  corporation,  with or without the consent of
Employee,  in his sole  discretion;  or (b) the  Company  undergoes  a Change of
Control, as hereinafter defined below, without prior Board approval; then

Employee is entitled to the following settlement benefits:

          (i)  a lump-sum  payment  for the greater of (A) twelve (12) months of
               the annual  salary  provided  in section  4(a)  hereof or (B) the
               balance  of   compensation   for  the  term  of  this  Employment
               Agreement; and

          (ii) any and all stock  options and  warrants  held by Employee  shall
               become immediately vested and exercisable; if

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<PAGE>

                    (A)  Employee   voluntarily  and  unilaterally  resigns  his
                         position  with the  Company  within 60 days of an event
                         described in Section 14(a) or (b) hereof, or

                    (B)  Employee is given notice of  termination  directly as a
                         result of such  Change in Control  within  twelve  (12)
                         months of an event  described  in Section  14(a) or (b)
                         hereof, or

                    (C)  Employee's  place  of  employment  is  moved  beyond  a
                         fifty-mile radius,  from its current facility in Tampa,
                         Florida  as a direct  result of an event  described  in
                         this Section.

     A  "Change  of  Control"  of the  Company,  or in any  person  directly  or
indirectly controlling the Company, shall mean:

     (i) a change of control  as such term is  presently  defined in  Regulation
240.12b-2 under the Securities Exchange Act of 1934 (the "Exchange Act");

     (ii) if during the Term of employment any "person" (as such term is used in
Section  13(d) and 14(d) of the  Exchange  Act)  other  than the  Company or any
person who on the date of this Employment  Agreement is a director or officer of
the Company,  becomes the  "beneficial  owner" (as defined in Rule 13(d)03 under
the  Exchange  Act),  directly  or  indirectly,  of  securities  of the  Company
representing  30%  of  the  voting  power  of  the  Company's  then  outstanding
securities; or

     (iii) if during the Term of employment the individuals who at the beginning
of such  period  constitute  the Board  cease for any reason  other than  death,
disability or retirement to constitute at least a majority thereof."

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


                                       NETWOLVES CORPORATION

                                       By: /s/ Walter M. Groteke
                                            Walter M. Groteke
                                            Chairman of the Board


                                           /s/ Walter R. Groteke
                                           Walter R.  Groteke
                                             Employee


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