EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 5th day of May, 1999 ("Effective  Date"),  by and between  ModaCAD,  Inc., a
California corporation ("Employer"), and Lee Freedman, an individual resident in
California ("Executive").

                                    RECITALS

     A.  Employer  is a  corporation  engaged  in  the  business  of  designing,
developing,  marketing  and  distributing  computer  software  products and is a
developer  and  provider  of  technologies  and digital  content for  electronic
merchandising on the Internet.

     B. Executive is employed by Employer as its Chief  Financial  Officer (CFO)
and Financial Vice President (Financial V.P.).

     C. Employee and  Executive now desire to enter into this  Agreement for the
purpose of providing  for the  continued  employment of Executive by Employer on
the terms and conditions set forth herein.

     NOW,  THEREFORE,  in  consideration  of the above  recitals  and the mutual
promises and covenants set forth herein,  and for other valuable  consideration,
the adequacy and receipt of which are hereby  acknowledged,  the parties  hereby
agree as follows:

     1. Employment; Employment Term

          1.1 Employer agrees to employ  Executive,  and Executive  agrees to be
     employed by Employer,  as Employer's CFO and Financial V.P. until such time
     as a new replacement  CFO is hired by the Company and thereafter  Executive
     is to be employed as its Executive Vice President (Exec.  V.P.), for a term
     commencing on the  Effective  Date and  continuing  for a term of three (3)
     years,  unless  earlier  terminated  in accordance  with the  provisions of
     Section 4 hereof (the "Employment  Term").  Executive's  primary duties and
     responsibilities as CFO and Financial V.P. hereunder shall be to manage and
     administer  the financial  matters of the Company,  and as Exec.  V.P to be
     responsible for contract  management,  negotiation and administration,  all
     subject  to the  supervision  and  direction  of  Employer's  Chairman  and
     Co-Chief  Executive  Officer and President and Co-Chief  Executive  Officer
     (collectively the Co-CEOs).  Executive agrees to perform such duties and to
     satisfy such responsibilities throughout the Employment Term.

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          1.2 The  services  to be  rendered  by  Executive  hereunder  shall be
     furnished  at such places as Employer  deems  appropriate,  but in no event
     will Executive be required to relocate his principal  residence outside Los
     Angeles,  California,  or to spend  more than  thirty  (30) days in any one
     calendar  year  outside  of Los  Angeles,  California,  in order to perform
     Executive's duties under this Agreement.

     2. Compensation

          2.1  Employer  agrees  to pay  Executive  a salary  at the rate of One
     Hundred  Twenty  Five  Thousand  Dollars  ($125,000)  per year,  payable in
     accordance with Employer's  regular salary payroll policies and procedures.
     In addition, upon execution and delivery of this Agreement,

          2.2 Employer  shall pay to Executive an annual  performance  bonus for
     each  calendar  year of the  Employment  Term in  which  Employer  achieves
     "aggregate  gross  revenues"  equal to or greater  than the minimum  target
     amount for such calendar  year set forth on Exhibit "A" hereto,  the amount
     of which bonus shall be equal to the dollar  amount set forth  opposite the
     relevant target amount of aggregate gross revenues which Employer  achieves
     for such calendar year. For this purpose,  "aggregate gross revenues" shall
     include all revenues of Employer and any company controlling, controlled by
     or under common  control with  Employer  for the  relevant  calendar  year.
     Executive's  bonus  shall be due and  payable to  Executive  not later than
     thirty (30) days  following  the release of  Employer's  audited  financial
     statements for the year concerned.

          2.3 It is recognized that during the Employment Term Executive will be
     required to incur  ordinary and necessary  business  promotion  expenses in
     connection  with the  performance  of his  duties  and  Executive  shall be
     entitled to  reimbursement  for such expenses in accordance with Employer's
     general  reimbursement  policies and procedures as may be established  from
     time to time by Employer's Co-CEOs.  Such reimbursement shall be subject to
     authorization by the Co-CEOs.

          2.4 It is  recognized  that the  services to be performed by Executive
     will require the use of a suitable  automobile  and  Employer  shall pay to
     Executive  monthly  on the first  business  day of each  month  during  the
     Employment Term an automobile expenses reimbursement allowance in an amount
     of Four Hundred Dollars ($400).

          2.5 It is recognized that during the Employment Term Executive will be
     required to incur  continuing  expenses to stay abreast of  developments in
     the  areas  of  Executive's  expertise.  Executive  shall  be  entitled  to
     reimbursement  for such expenses to the extent  incurred in accordance with
     Employer's  policies  upon  presentation  of vouchers or other  evidence of
     those  expenditures in a form in accordance  with  Employer's  policies and
     procedures as may be established from time to time by Employer's Co-CEOs.

          2.6 Executive shall be entitled to reimbursement for expenses incurred
     in  connection  with his home office as may be required in order to perform
     his duties under this Agreement,  to the extent such expenses are permitted
     in  accordance  with  the  Employer's  policies  and  procedures  as may be
     established from time to time by Employer's  Co-CEOs.  Such expenses shall
     be  reimbursed  upon  presentation  of vouchers or other  evidence of those

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     expenditures  in  a  form  in  accordance  with  Employer's   policies  and
     procedures as may be established  from time to time by Employer's  Co-CEOs.
     Without  limitation  of  the  immediately   preceding  sentence,   Employer
     acknowledges that it is a requirement of Executive's  duties that Executive
     have a separate  telephone line at his home office and the expense incurred
     by Executive in connection with the  installation  and use of such separate
     telephone facilities shall be reimbursed to Executive when and as incurred.

          2.7  During the  Employment  Term and  continuing  for the life of the
     Executive  thereafter,  without regard to whether  Executive is employed by
     Employer  during  any  part  of  such  period,  Executive  and  Executive's
     dependents  shall be entitled to  participate  in any and all of Employer's
     group medical,  dental,  medical  reimbursement  and life insurance benefit
     programs,  the  benefits  set forth in  Paragraph 3, and other such benefit
     programs as may be made available to Employer's executives generally,  upon
     the same terms and  conditions as such programs are made available to other
     senior executive executives of Employer;  provided, however, that if at any
     time during  such  period of time  Employer  does not offer  Executive  and
     Executive's  dependents  full coverage  under a  comprehensive  medical and
     dental  reimbursement plan, Employer shall promptly reimburse Executive for
     all costs and expenses of Executive's own medical and dental  reimbursement
     plan for Executive and Executive's dependents; and provided,  further, that
     Employer  shall have no  obligation  under this Section 2.7  following  any
     termination of Executive pursuant to Section 4.2.

          2.8  Executive  shall be  entitled to three (3) full weeks of vacation
     during each calendar year of the Employment Term,  commencing with calendar
     year 1999.  Executive agrees that without the express prior written consent
     of Employer such vacation  periods shall not be  accumulated,  but shall be
     taken during each  calendar  year or  forfeited,  and  Executive  agrees to
     schedule  and  take  such  vacation  at  a  time  or  times  which  do  not
     unreasonably impair Employer's operations.

          2.9.1  Executive  shall be entitled  to  incentive  stock  options and
     bonuses under Employer's 1995 Stock Option Plan as amended _____1998, which
     are granted to other  executives  based on  performance  or other  criteria
     established from time to time by Employer.

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          Employment of Executive with Employer  shall  terminate for any reason
     other  than  as  described  in  clause  (a) or  other  than  for  a  reason
     constituting "just cause" pursuant to Section 4.2, or if there is a "Change
     in Control"  (as defined  below),  the  exercisability  of the Option shall
     accelerate so that it becomes  immediately  exercisable,  as of the date of
     termination  or Change in Control,  as to all of the shares  covered by the
     Option and shall thereafter remain  exercisable for a period of 90 days, in
     the case of such a  termination  (except  that the 90 day  period  shall be
     extended to 12 months if Executive shall die during such 90 day period) or,
     in the case of a Change in Control, for a period of five (5) years; and (c)
     for customary antidilution protections.

          2.9.2 As used herein,  the term "Change in Control" shall be deemed to
     have occurred (a) on the date Employer first has actual  knowledge that any
     person  (as such term in  Sections  13(d) and  14(d)(2)  of the  Securities
     Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) who is not such
     beneficial  owner on the Date of Grant has become the beneficial  owner (as
     defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
     securities  of Employer  representing  40% or more of the  combined  voting
     power  of  Employer's  then  outstanding  securities  or (b) on a date  the
     stockholders of Employer  approve (i) a merger of Employer with or into any
     other corporation in which Employer is not the surviving  corporation or in
     which  Employer  survives as a subsidiary  of another  corporation,  (ii) a
     consolidation  of Employer with any other  corporation or (iii) the sale or
     disposition of all or substantially  all of Employer's  assets or a plan of
     complete liquidation.

          2.9.3 In  addition  to any ISO's  granted  to  Executive  pursuant  to
     Section  2.9.1,  Employer  shall grant such number of  additional  options,
     exercisable  for five  (5)  years at a per  share  price  equal to the fair
     market value of a share of Employer's Common Stock on the date of grant, to
     purchase shares of Employer's  Common Stock as the  Compensation  Committee
     shall determine is appropriate  from time to time. To the extent  permitted
     under Section 422(d) of the Internal Revenue Code of 1986, as amended, such
     additional  options shall be "incentive  stock  options" and, to the extent
     not so permitted, such options will be "nonstatutory stock options".

          2.9 Executive shall be entitled to participate in any  profit-sharing,
     pension, stock option, stock ownership,  insurance or other plans, benefits
     or policies  available  generally  to  Executives  of Employer on terms and
     conditions not less advantageous than those applicable to such Executives.

          2.10  Executive  shall be entitled  during the  Employment  Term,  and
     thereafter  in  regard  to any  claim or  assertion  relating  to  actions,
     circumstances  or events  occurring  during  the  Employment  Term,  to the
     benefit of the indemnification  provisions  contained in Employer's Bylaws,
     as they may be  amended  from  time to time,  to the  extent  permitted  by
     applicable   law;   provided,    however,   that,    notwithstanding   such
     indemnification  provisions,  Executive shall not be required to serve as a
     director of Employer  during any period of time in which  Executive  is not
     covered  by a policy of  directors'  and  officers'  errors  and  omissions
     insurance  policy,  having  coverage  in an  amount  and  scope  reasonably
     satisfactory to Executive.

     3. Sick Leave and Disability.

          3.1 During the Employment  Term, in the event that Executive shall, by
     reason of  illness or other  physical  or mental  disability,  be unable to
     perform his duties  herein for a period of up to one hundred  eighty  (180)

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     consecutive  days,  said  disability  shall be deemed for  purposes of this
     Agreement  to be  temporary  and  Executive  shall  continue to receive all
     compensation payable pursuant to Section 2.

          3.2 During the Employment  Term, in the event that Executive shall, by
     reason of  illness or other  physical  or mental  disability,  be unable to
     perform  his  duties  hereunder  for more  than One  Hundred  Eighty  (180)
     consecutive  days,  said  disability  shall be deemed for  purposes of this
     Agreement to be permanent,  and this Agreement shall  thereupon  terminate,
     and,  subject to the provisions of Section 3.3 hereof,  Employer shall have
     no further obligations whatever to Executive, except pursuant to the Option
     and to make the  severance  payments  provided in Sections  4.3.1 and 4.3.2
     hereof,  which  payments shall be paid to Executive  immediately  upon such
     termination.  It is understood that, except as provided in Sections 3.1 and
     3.3 hereof,  Executive shall not be entitled to receive compensation during
     any period of disability.

          3.3 In the event of  Executive's  permanent  disability as provided in
     Sections  3.2  hereof,  if  Employer  does not then  have an  Employer-paid
     disability  insurance plan providing for Executive to receive  payments for
     as long as Executive  remains  permanently  disabled in amounts equal to at
     least seventy percent (70%) of Executive's  salary paid as provided in this
     Agreement, Employer shall make disability payments monthly to Executive for
     so long as  Executive  remains  permanently  disabled in an amount equal to
     seventy  percent  (70%) of  Executive's  salary  paid as  provided  in this
     Agreement.

     4. Termination of Agreement.

          4.1.1 Employer,  acting only through a resolution adopted by its Board
     of Directors,  may terminate Executive's employment under this Agreement at
     Employer's  election by sending a six month  written  notice to  Executive,
     notifying Executive that effective at the end of such six-month period this
     Agreement and the Employment Term shall be terminated.  Upon the expiration
     of such  six-month  period,  Employer's  employment  of  Executive  and the
     Employment  Term shall  cease and be at an end and  Employer  shall have no
     further  obligations  whatever to Executive,  except pursuant to the Option
     and to continue to provide  Executive the benefits set forth in Section 2.7
     and to make the  severance  payments  provided in Sections  4.3.1 and 4.3.2
     hereof,  the  performance  of which shall be an absolute  condition  to the
     effectiveness  of any  termination  by Employer of  Executive's  employment
     pursuant to this Section 4.1.1.

          4.1.2  Executive may terminate his employment  with Employer by giving
     thirty (30) days  written  notice of  termination  to  Employer's  Board of
     Directors,  and this Agreement and the Employment  Term shall be terminated
     effective at the close of business on said thirtieth (30th) day. Thereupon,
     the  Employment  Term shall cease at the expiration of such thirty (30) day
     period,  Executive shall have no further  obligations  whatever to Employer
     and  Executive  shall  not be  entitled  to be paid the  severance  payment
     provided  in Section  4.3 hereof,  however  Executive  shall be entitled to
     continue to receive the lifetime benefits set forth in Section 2.7 hereof.

          4.2  Notwithstanding  any  provision  set forth in Section 4.1 hereof,
     Executive's   employment   may  be  terminated  at  any  time  by  Employer
     immediately and without any requirement of advance notice,  and without any
     obligation to pay any severance  payment,  for just cause.  For purposes of
     this Agreement,  "just cause" means: (i) the continued use of non-medically
     prescribed  narcotic drugs by Executive which renders him unable to fulfill
     his duties under this Agreement; and (ii) the commission by Executive of an
     act of fraud or embezzlement against Employer or Executive's  conviction of
     a felony involving moral turpitude.

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          4.3.1 If Employer should terminate this Agreement for any reason other
     than for a reason  constituting  just cause pursuant to Section 4.2 hereof,
     Employer  shall pay to  Executive  (and the vesting of any Options  granted
     shall  accelerate in accordance  with Section  2.9.1(b)),  on the effective
     date of such  termination,  a severance  payment in an amount  equal to the
     greater of: (i) Two Hundred  Thousand  Dollars  ($200,000.00);  or (ii) the
     cumulative  balance of Executive's  salary which would have been payable to
     Executive  during the remainder of the full three (3)-year  Employment Term
     pursuant to Section 2.1 of this Agreement if Employer had not so terminated
     this Agreement.  Further,  upon the occurrence of a Change in Control which
     does  not  result  in  this  Employment  Agreement,   and  all  rights  and
     obligations  hereunder,  being  fully  assumed  by, as the case may be, the
     surviving  corporation,  the successor to Employer or the transferee of all
     or substantially all of the Company's assets,  such Change in Control shall
     be deemed a  termination  entitling  Executive  to  receive  the  severance
     payments  set forth in the  immediately  preceding  sentence and in Section
     4.3.2. In partial consideration of such payment and continuing for a period
     of Two and One-Half years (913 days)  thereafter  (the "Advisory  Period"),
     Executive  shall,  to the extent that his  physical  and mental  conditions
     permit,  be  available  to  consult  with and advise  Employer's  officers,
     directors  and  other  representatives  in  regard  to  matters  concerning
     Employer's business. Notwithstanding any other provision of this Agreement,
     if Executive's  physical or mental  condition  prevents him from fulfilling
     his consulting or advisory  duties,  he shall still be paid such severance
     payment.  Executive  and Employer  agree that it is impossible to determine
     with any reasonable accuracy the amount of prospective damages to Executive
     from  Employer's  termination  other than for just cause of this Agreement;
     and,  in  consideration  thereof,  Executive  and  Employer  agree that the
     severance payment provided above is reasonable, and is not a penalty, based
     upon facts and  circumstances  of the parties at the time of entering  into
     this  Agreement,  and with due regard to Executive's  future  expectations.
     Notwithstanding  the  foregoing,  if Executive  should cease his employment
     hereunder  voluntarily for any reason, or if Employer should terminate this
     Agreement  for  just  cause,  all  compensation  and  benefits  payable  to
     Executive (including those provided in Section 2.7) shall thereupon without
     any further writing or act cease, lapse and be unconditionally terminated.

          4.3.2 If any  payments  made to  Executive  under  this  Agreement  or
     otherwise (the "Payments") are subject to the excise tax imposed by Section
     4999 of the Code (the "Excise  Tax"),  then Employer shall pay Executive an
     additional  amount  ("Gross  Up")  such  that the net  amount  retained  by
     Executive after deduction of any Excise Tax on the Payments and any Federal
     and State income  taxes and Excise Tax upon the Payments  shall be equal to
     the  Payments.  For  purposes  of  determining  the amount of the Gross Up,
     Executive  shall be deemed to pay Federal,  State and local income taxes at
     the highest  marginal  rate of taxation in the  calendar  year in which the
     Payment is to be made.  State and local  income  taxes shall be  determined
     based  upon  the  state  and  locality  of  your  domicile  on the  date on
     termination is effective.  The  determination of whether such Excise Tax is
     payable  and the  amount  thereof  shall be based  upon the  opinion of tax
     counsel  selected by Employer and acceptable to Executive.  If such opinion
     is not finally accepted by the IRS upon audit, then appropriate adjustments
     shall be computed  (without  interest but with Gross Up, if  applicable) by
     such  tax  counsel  based  upon  the  final  amount  of the  Excise  Tax so
     determined.  The amount shall be paid by the appropriate  party in one lump
     cash sum within 30 days of such computation.

          4.4  On  the  event  of  Executive's  death  at any  time  during  the
     Employment  Term,  this Agreement and the Employment  Term shall  thereupon

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     terminate,  and Employer shall be obligated to pay Executive's  estate only
     that portion of  Executive's  salary which had accrued  through the date of
     his death,  plus a death benefit  bonus,  in an amount equal to six months'
     salary of Executive, provided, that, if Executive should die after Employer
     shall  have  given  notice  pursuant  to Section  4.1.1 of  termination  of
     Executive's  employment  other  than  for  just  cause,  but  prior  to the
     expiration  of the  six-month  notice  period  required  by  that  Section,
     Employer shall nonetheless pay to Executive's  estate the severance payment
     provided in Section 4.3 hereof.

          4.5 Any demotion of  Executive  from the position set forth in Section
     1.1 of this Agreement, or any material diminishment of the responsibilities
     regularly  exercised  by an  Executive  holding  that job  title,  shall be
     conclusively  presumed for  purposes of this  Agreement,  unless  Executive
     otherwise   agrees  in  advance  in  writing,   to  constitute   Employer's
     termination  without  just  cause  of  Executive's  employment  under  this
     Agreement.  Such  presumptive  termination  shall entitle  Executive to the
     severance payment provided in Section 4.3 hereof and accelerated vesting of
     the Option as provided in Section 2.9.1(b), without limitation of any other
     right or remedy of Executive  under this Agreement or applicable law. It is
     agreed that the changes in duty from Chief  Financial  Officer to Executive
     Vice President,  and, if applicable,  any resumption  thereafter of some or
     all of the duties of Chief Financial  Officer,  would not be deemed to be a
     demotion or material diminishment of responsibilities.

          5.  Executive's  Agreement  Not to Compete  With,  and to Protect  the
     Proprietary Assets of Employer.

          5.1  During the  Employment  Term,  Executive  shall not  directly  or
     indirectly  engage,  be involved,  or have any financial  interest,  in any
     proprietorship,  partnership,  company or other  business  which engages in
     competition  with Employer in any line of business in which  Employer is or
     may be from  time to time  engaged  during  such  period  of time,  whether
     Executive does so as a partner, officer, director, Executive, consultant or
     holder of any beneficial interest in any such business or activity.  During
     and after the Employment  Term,  Executive  shall not divert nor attempt to
     divert from  Employer any business of any kind in which  Employer is or may
     be engaged.  Furthermore,  Executive  shall not induce or attempt to induce
     any person who is an Executive of Employer to leave the employ of Employer.

          5.2 Employer  acknowledges that in the performance of his duties as an
     Executive  of  Employer  he may  have  access  to  Employer's  existing  or
     potential  trade  secrets,  including,  but not  limited  to, any  formula,
     discovery,  idea or concept,  pattern,  device,  compilation of information
     used in Employer's business, designs, plan, proposal, software (both object
     code and source code) and software  documentation,  flow charts,  diagrams,
     models, data and data bases,  marketing and research and development plans,
     pricing plans and price lists,  financial  data and  projections  of sales,
     expenses, etc., and other confidential  information,  which allows Employer
     to obtain an advantage over others, including competitors,  who do not know

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     or use such trade  secrets  (cumulatively,  "Trade  Secrets");  inventions,
     including but not limited to, any new machines, manufacturing or production
     devices, methods, processes, uses, apparatuses, developments, improvements,
     composition of matter,  design,  or configuration of any kind,  discovered,
     conceived,  developed,  made,  or  produced,  or any  improvements  to them
     (cumulatively,  "Inventions");  and other confidential  market information,
     including,  but not  limited to,  customer,  marketing,  sales,  financial,
     administrative,  production,  processing, operational and other proprietary
     information  used  in  Employer's  business  (cumulatively,   "Confidential
     Information")   which  are   confidential   and  proprietary  to  Employer.
     Accordingly,  during and after the Employment Term, Executive shall keep in
     confidence  at  all  times  and  not  disclose  to  any  person,   firm  or
     corporation,  and not make any use of,  except as expressly  authorized  by
     Employer, any Trade Secrets,  Inventions or Confidential  Information which
     are made  available to Executive and  identified as  proprietary  or which,
     from the circumstances involved, Executive should recognize as proprietary.
     Executive   further   agrees  that  all  Trade   Secrets,   Inventions  and
     Confidential  Information  shall remain the exclusive  property of Employer
     and shall not be removed from Employer's  premises under any  circumstances
     whatever, except as expressly authorized by Employer.

          5.3  If  Executive  at  any  time  should  have  any  question   about
     Executive's use or disclosure of Trade Secrets,  Inventions or Confidential
     Information or whether any ideas, procedures,  information,  documentation,
     materials or representations are Trade Secrets,  Inventions or Confidential
     Information,  Executive shall promptly discuss the question with Employer's
     Management, whose determination shall be binding on Executive.

          5.4 Executive  further  agrees not to disclose to Employer,  or induce
     Employer to use, any Trade Secrets,  Inventions or Confidential Information
     belonging to a third party.

     6.   Executive's  Agreement that All Inventions  Developed in the Course of
          Employment Are the Property of Employer.

          6.1 As part of Executive's employment  responsibilities,  Executive is
     being  hired to invent  and  develop  further  ideas,  products,  financial
     policies and procedures relating to Employer's business, including, without
     limitation, new products and systems. Accordingly, Executive shall:

               (i)  Disclose  promptly,  in writing,  to such person and in such
          manner as Employer may from time to time  designate,  all  inventions,
          made or conceived by Executive,  either solely or jointly with others,
          during  the  Employment  Term  relating  to  Employer's   business  or
          Employer's actual or anticipated research and development or resulting
          from any work which Executive  performed for Employer.  Executive also
          agrees to assign and convey to Employer  upon  request,  the  complete
          right, title and interest in and to all such inventions, improvements,
          and developments. Executive understands that Employer does not require
          disclosure or an assignment of any rights in an invention for which no
          equipment,   supplies,   facility,   Trade   Secrets,   Inventions  or
          Confidential  Information of Employer was used, or which was developed
          entirely on Executive's own time, and (a) which does not relate to the
          business of Employer or to Employer's  actual or anticipated  research
          or  development,  or (b) which  does not  result  from any work  which
          Executive performed for Employer.

               (ii) Upon request made during the Employment  Term or thereafter,
          to do all lawful acts, including the execution of papers and giving of
          testimony, that may be necessary or helpful in obtaining,  sustaining,
          or reissuing  patents of the United States and foreign counties on all
          Trade  Secrets and  Inventions,  and for  perfecting  and  maintaining
          Employer's title thereto;  and to otherwise cooperate with Employer in
          any  controversy  or legal  proceedings  relating to any  invention or
          patents thereon.

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               (iii)  Cooperate  generally  with Employer in any  controversy or
          legal  proceedings   relating  to  said  inventions,   improvement  or
          developments,   or  to  patent  applications  or  patents  thereon  or
          copyrights thereof.

          6.2 For purposes of this Agreement, an invention related to Employer's
     business is deemed to have been made during the Employment Term, if, during
     such period,  the invention was conceived or actually  reduced to practice.
     Any patent applications filed by Executive during the Employment Term shall
     be presumed to relate to an invention made during the Employment  Term, and
     Employer shall be entitled to all right,  title and interest in and to each
     such  invention,  unless a  preponderance  of the  evidence  shows that the
     invention  was not made during such period or was  unrelated to  Employer's
     business.

          6.3 A complete  description of all  inventions,  discoveries and other
     rights,  properties  and assets  actually made or owned by  Executive,  and
     potentially  related to Employer's  business,  before  entering  Employer's
     employ and being  retained  by  Executive  as his  property is set forth in
     Exhibit 1 hereto, which is incorporated by this reference in full into this
     Agreement.

          6.4  Executive   acknowledges   and  agrees  that  his  covenants  and
     undertakings  contained in this Section 6 relate to matters  which are of a
     special,  unique and extraordinary  character,  which gives them a peculiar
     value  impossible  of  replacement  by  Employer  and for the loss of which
     Employer  cannot  be  reasonably  or  adequately  compensated  by  monetary
     damages.  Accordingly,  any breach by Executive of the  provisions  of this
     Section 6 would cause Employer irreparable injury and damages and Executive
     therefore  expressly  agrees that Employer  shall be entitled to injunctive
     and other  equitable  relief to prevent a breach or a continuing  breach of
     any of the  provisions of this Section 6, and to secure the  enforcement of
     any of these provisions, in addition to any other legal or equitable remedy
     that may be  available  to  Employer.  Further,  Executive  agrees that the
     provisions of this Section 6 shall survive any  termination  of Executive's
     employment by Employer, and that those provisions shall not be construed to
     limit any of  Executive's  obligations  and duties to Employer which may be
     provided by law.

     7. Miscellaneous.

          7.1 All notices  hereunder  to the parties  hereto shall be in writing
     and sent by certified or registered mail, return receipt requested, postage
     prepaid,  or by telegram or telex,  addressed to the respective  parties at
     the following addresses:

           EMPLOYER:                 ModaCAD, Inc.
                                     3861 Sepulveda Boulevard
                                     Culver City, CA  90230
                                     Attention:  The Board of Directors

           Executive:                Mr. Lee Freedman
                                     11823 Bellagio Road
                                     Los Angeles, CA 90049

     Any party may, by written notice  complying with the  requirements  of this
     Section, specify another or different person or address for the purpose of

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<PAGE>

     notification hereunder. Such notices shall be deemed to have been given and
     received on the next day  following  the sending of such  telegram or telex
     and, if mailed, on the fifth business day following such mailing.

          7.2 This  Agreement  contains  the  entire and only  agreement  of the
     parties  hereto  respecting  the matters  herein set forth,  supersedes all
     prior agreements  (including,  without limitation,  the Existing Employment
     Agreement,  provided, however, that any salary, bonus, expense allowance or
     reimbursement,  or other  compensation  or  benefit  accrued  but unpaid to
     Executive as of the Effective  Date shall  continue to be owing and payable
     by the  Employer  to  Executive  and  any  incentive  stock  options  which
     Executive  is  entitled  to under  the  provisions  of  Section  2.9 of the
     Existing  Employee  Agreement  shall  be  granted  at the  first  Board  of
     Directors  meeting  following  release  of  Employer's   audited  financial
     statement for 1997) and understandings between the parties hereto regarding
     the  matters  hereby  contemplated,  and may not be changed  or  terminated
     orally, nor shall any change, termination or attempted waiver of any of the
     provisions  contained in this  Agreement  by binding  unless in writing and
     signed by the party  against  whom the same is sought to be  enforced,  nor
     shall this Section itself be waived verbally. This Agreement may be amended
     only by a written  instrument  duly executed by or on behalf of the parties
     hereto.

          7.3 This Agreement and all of its  provisions,  rights and obligations
     shall be binding upon and shall inure to the benefit of the parties  hereto
     and their  respective  successors.  This  Agreement  may be assigned by the
     Employer to any person, firm or cooperation which shall become the owner of
     substantially  all of the assets of the Employer or which shall  succeed to
     the business of the Employer;  provided,  however, that in the event of any
     such  assignment  Employer  shall obtain an  instrument in writing from the
     assignee  in which  such  assignee  assumes  the  obligations  of  Employer
     hereunder and Employer shall deliver an executed copy thereof to Executive,
     whereupon  Employer shall be released of all further liability to Executive
     hereunder.

          7.4 This Agreement is made and intended to be performed principally in
     the State of  California  and shall take effect  under,  be  construed  and
     enforced  according to, and the rights and obligations of the parties shall
     be governed in all respects by, the laws of the State of California. Should
     any  action be brought  to  interpret  or  enforce  the terms  hereof,  the
     prevailing party shall be awarded costs and reasonable attorneys' fees.

          7.5 The headings of the Sections of this  Agreement have been inserted
     for  convenience  of  reference  only,  and  shall  in no  way  affect  the
     interpretation of any of the terms or conditions of this Agreement.

          7.6 If any provision or part thereof of this  Agreement for any reason
     shall be held by an official body to be invalid or unenforceable, the valid
     and  enforceable  provisions or parts of this Agreement  shall  nonetheless
     continue to be given effect and bind Employer and Executive.

                                       10
<PAGE>


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


                                        MODACAD, INC.,
                                        a California corporation



/s/  LEE FREEDMAN                       By: /s/  MAURIZIO VECCHIONE
-------------------------                  -------------------------------
    Lee Freedman,                                Maurizio Vecchione,
    "Executive"                                  President and COO
                                                 "Employer"
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