EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT (the "Agreement") is being made as of this 26th
day of March,  2002 between  iPARTY  CORP.,  a Delaware  corporation  having its
principal offices at 1457 VFW Parkway,  West Roxbury,  Massachusetts  02132 (the
"Company"),  and SAL  PERISANO,  an  individual  residing  at 288 Huron  Avenue,
Cambridge, Massachusetts 02138 ("Perisano").

                                   WITNESSETH:

                  WHEREAS,  the Company  desires to employ Perisano and Perisano
desires to be employed by the Company as its Chief  Executive  Officer  upon the
terms and conditions contained herein.

                  NOW,  THEREFORE,  in  consideration of the mutual premises and
agreements  contained  herein,  and intending to be legally  bound  hereby,  the
parties hereto agree as follows:

                  1.    Nature of Employment;  Term of  Employment.  The Company
                        ------------------------------------------
hereby  employs  Perisano and Perisano  agrees to serve the Company as its Chief
Executive  Officer upon the terms and conditions  contained  herein,  for a term
commencing  as of March 31, 2002 and  continuing  until the close of business on
March 30, 2004 (unless  terminated sooner pursuant to the provisions hereof, the
"Employment  Term").  So long as  Perisano  is Chief  Executive  Officer  of the
Company, he shall be nominated to serve as a Director of the Company.

                  2.    Duties and  Powers as  Employee.  During the  Employment
                        -------------------------------
Term,  Perisano shall be employed by the Company as its Chief Executive Officer.
Perisano agrees to devote  substantially  all his full working time,  energy and
efforts  to the  business  of the  Company.  As Chief  Executive  Officer of the
Company,  Perisano shall be in charge of all business  operations of the Company
including but not limited to directing and supervising all day-to-day operations
of the Company, and managing and supervising its employees.  All employees shall
report to Perisano.  Perisano shall be based in West Roxbury,  Massachusetts and
shall be available to travel as the needs of the Company require.

                  3.    Compensation.
                        ------------

                        (a)     As  compensation  for  his  services  hereunder,
during the  Employment  Term,  the Company shall pay Perisano a base salary (the
"Base Salary"),  payable in equal semi-monthly  installments in arrears,  at the
annual rate of Two Hundred  Fifty  Thousand  Dollars  ($250,000).  Additionally,
Perisano  shall be entitled  to  participate  in the present or future  employee
benefit plans of the Company provided that he meets the eligibility requirements
therefor.

                        (b)     In addition to the Base Salary provided  herein,
Perisano  may be  entitled  to receive an annual  performance  bonus  payment as
determined in the sole discretion of the Compensation  Committee of the Board of
Directors of the Company. Without limiting the generality of the foregoing, such

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performance bonus may be paid in stock, stock options, restrictive stock or cash
or any combination of the foregoing.

                  4.    Expenses;  Vacations.  Perisano  shall  be  entitled  to
                        --------------------
reimbursement for reasonable travel and other out-of-pocket expenses necessarily
incurred  in the  performance  of his  duties  hereunder,  upon  submission  and
approval of written  procedures  of the Company.  Perisano  shall be entitled to
vacation time in accordance with the regular procedures of the Company governing
senior executive officers as determined from time to time by the Company's Board
of  Directors.  Perisano also shall be eligible to  participate  in all medical,
health and  disability  benefit  programs  provided to senior  executives of the
Company.

                  5.    Representations  and  Warranties  of Employee.  Perisano
                        ---------------------------------------------
represents and warrants to the Company that (a) Perisano is under no contractual
or other  restriction or obligation which is inconsistent  with the execution of
this Agreement,  the performance of his duties hereunder, or the other rights of
the  Company  hereunder;  and (b)  Perisano  is  under  no  physical  or  mental
disability that would hinder his performance of duties under this Agreement.

                  6.    Representations  and  Warranties  of  the  Company.  The
                        --------------------------------------------------
Company  represents  and warrants to Perisano  that (i) pursuant to the Delaware
General Corporation Law, the Company's Certificate of Incorporation provides for
indemnification  of officers  and  directors  of the Company and that so long as
Perisano serves as Chief Executive Officer of the Company it will not be amended
to limit such  indemnification  without Perisano's written consent, and (ii) the
Company maintains an officers and directors  liability insurance policy and will
maintain such a policy for so long as Perisano serves as Chief Executive Officer
of the Company.

                  7.    Non-Competition.  Perisano  agrees  that he will not (a)
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during the period he is employed by the Company engage in, or otherwise directly
or  indirectly  be  employed  by, or act as a  consultant  or lender to, or be a
director,  officer,  employee,  owner or  partner  of,  any  other  business  or
organization that is or shall then be competing with the Company,  and (b) for a
period of one year after he ceases to be  employed by the  Company,  directly or
indirectly compete with or be engaged in the same business as the Company, or be
employed  by, or act as  consultant  or lender  to, or be a  director,  officer,
employee,  owner or partner of, any business or organization  which, at the time
of such  cessation,  competes  with or is  engaged in the same  business  as the
Company,  except that in each case the  provisions of this Section 7 will not be
deemed breached  merely because  Perisano owns not more than five percent (5.0%)
of the  outstanding  common  stock  of a  corporation,  if,  at the  time of its
acquisition by Perisano, such stock is listed on a national securities exchange,
is reported on NASDAQ, or is regularly traded in the over-the-counter  market by
a member of a national securities exchange.

                  8.    Confidential  Information.  All confidential information
                        -------------------------
which Perisano may now possess,  may obtain during the  Employment  Term, or may
create prior to the end of the period he is employed by the Company, relating to
the business of the Company or of any customer or supplier of the Company  shall
not be  published,  disclosed,  or made  accessible  by him to any other person,
firm, or corporation  during the Employment Term or any time thereafter  without
the prior  written  consent of the Company.  Perisano  shall return all tangible
evidence of such  confidential  information  to the  Company  prior to or at the
termination of his employment.

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                  9.    Termination.
                        ------------

                        (a)     Notwithstanding anything herein contained, if on
or after the date hereof and prior to the end of the Employment  Term,  Perisano
is  terminated  "For Cause" (as defined  below) then the Company  shall have the
right to give notice of  termination  of Perisano's  services  hereunder as of a
date to be specified in such notice,  and this Agreement  shall terminate on the
date so  specified.  Termination  "For Cause" shall mean  Perisano  shall (i) be
convicted of a felony  crime,  (ii) commit any act or omit to take any action in
bad faith and to the  detriment  of the  Company,  (iii)  intentionally  fail to
follow  any  commercially  reasonable  and  lawful  direction  of the  Board  of
Directors and continue to fail to follow such direction within three (3) days of
written  notification  of same, (iv) commit an act of fraud against the Company,
or (v) breach any term of this  Agreement and fail to correct such breach within
ten (10) days after written notice of commission thereof.

                        (b)     In the event that  Perisano  shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge his
duties  hereunder,  with reasonable  accommodation,  for a period of six months,
then this  Agreement  shall  terminate  upon thirty (30) days' written notice to
Perisano,  and no further compensation shall be payable to Perisano,  except for
any  accrued and unpaid Base  Salary and bonus,  if any, as  contemplated  under
Section 3, and any accrued and unpaid expenses as  contemplated  under Section 4
and as may otherwise be provided under any disability insurance policy, if any.

                        (c)     In the event that Perisano  shall die, then this
Agreement  shall  terminate  on the date of  Perisano's  death,  and no  further
compensation  shall be payable to  Perisano,  except for any  accrued and unpaid
Base Salary and bonus, if any, as  contemplated  under Section 3 and any accrued
and unpaid  expenses as  contemplated  under  Section 4 and as may  otherwise be
provided under any insurance policy or similar instrument.

                        (d)     In the event that this  Agreement is  terminated
"For Cause" pursuant to Section 8(a), then Perisano shall be entitled to receive
only the Base Salary to the date on which termination shall take effect.

                        (e)     In  the  event  that  the   Company   terminates
Perisano for any reason other than as provided  under Section 9(a),  (b), (c) or
(d), then this Agreement  shall  terminate upon thirty (30) days' written notice
to Perisano  and the  Company  shall be  obligated  to pay to Perisano an amount
equal to any unpaid  expenses as  contemplated  under Sections 4 and a severance
payment equal to twelve (12) months salary at the Base Salary, payable in twelve
(12) equal monthly installments; in addition, for such twelve (12) month period,
Perisano  shall be entitled to  continue  to receive  his then  current  medical
benefits.  If this Agreement is not renewed at the end of the  Employment  Term,
such  non-renewal  shall not be deemed a termination of this  Agreement  without
cause.

                        (f)     Nothing  contained  in this  Section  9 shall be
deemed to limit any other  right the Company  may have to  terminate  Perisano's
employment hereunder upon any ground permitted by law.

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                        (g)     In the event  that  Perisano  desires  to resign
voluntarily  as Chief  Executive  Officer,  Perisano  covenants  to provide  the
Company with not less than thirty (30) days written notice of any such voluntary
resignation; and further, Perisano covenants to cooperate in good faith in order
to  facilitate a smooth  transfer of authority  during the period from notice of
resignation  to the date of  termination.  In the event that this  Agreement  is
terminated  by Perisano  pursuant to this Section 9(g),  then Perisano  shall be
entitled  to  receive an amount  payable in a lump sum within ten (10)  business
days  following  the date of  termination,  equal to the sum of any  accrued and
unpaid  Base  Salary and bonus,  if any,  as  contemplated  by Section 3 and any
accrued and unpaid expenses as contemplated by Section 4.

                        (h)     Notwithstanding anything herein to the contrary,
Perisano may, upon thirty (30) days written notice, terminate this Agreement for
"Good  Reason".  "Good Reason" shall mean any material  breach by the Company of
its  obligations  hereunder  which are not cured within ten (10) days  following
receipt of written notice from Perisano detailing such breach. The parties agree
that a material  breach shall  include,  but not be limited to, (x) any material
reduction  in  Perisano's   duties,   authority,   reporting   relationships  or
responsibilities  (whether or not  accompanied by a title  change),  and (y) the
relocation of the principal  executive offices of the Company a distance of more
than 35 miles from its current location without Perisano's consent. In the event
Perisano  terminates  this Agreement  pursuant to this Section 9(h), the Company
shall be obligated to pay to Perisano an amount equal to any unpaid  expenses as
contemplated under Section 4 and a severance payment equal to twelve (12) months
salary at the Base Salary, payable in twelve (12) equal monthly installments; in
addition,  for such  twelve  (12) month  period,  Perisano  shall be entitled to
continue to receive his then current medical benefits.

                  10.   Merger, Etc. In the event of a future disposition of the
                        -----------
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, sale of stock, or otherwise, then the Company may
elect to assign this Agreement and all of its rights and  obligations  hereunder
to the acquiring or surviving entity.

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

                  12.   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 a written instrument duly executed by each party.

                  13.   Notices.  Any notice or other communication  required or
                        -------
permitted  to be given  hereunder  shall be in  writing  and  shall be mailed by
certified mail,  return receipt  requested,  or delivered against receipt to the
party to whom it is to be given at the  address  of such  party set forth in the
preamble  to this  Agreement  (or to such other  address as the party shall have
furnished in writing in accordance  with the  provisions of this Section 13). In
the case of a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Akin, Gump, Strauss, Hauer & Feld, LLP,
590 Madison Avenue, New York, New York 10022, Attn. Robert S. Matlin.  Notice to

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the estate of Perisano  shall be sufficient if addressed to Perisano as provided
in this Section 13. Any notice or other  communication  given by certified  mail
shall be deemed given at the time of certification thereof,  except for a notice
changing a party's  address  which shall be deemed  given at the time of receipt
thereof.

                  14.   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. Any waiver must be in writing.

                  15.   Binding Effect.  Perisano's rights and obligations under
                        --------------
this Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to encumbrance or the claims of Perisano's  creditors,  and
any attempt to do any of the  foregoing  shall be void.  The  provisions of this
Agreement  shall be binding  upon and inure to the benefit of  Perisano  and his
heirs and personal  representatives,  and shall be binding upon and inure to the
benefit of the Company and its  successors  and those who are its assigns  under
Section 10.

                  16.   Termination   of   Prior   Agreement.   This   Agreement
                        ------------------------------------
terminates  and  supercedes  any and all  prior  agreements  and  understandings
between the parties with respect to employment  with or compensation of Perisano
by the Company.

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

                  18.   Counterparts;  Governing  Law.  This  Agreement  may  be
                        -----------------------------
executed  in any  number  of  counterparts,  each of which  shall be  deemed  an
original,  but  all  of  which  together  shall  constitute  one  and  the  same
instrument.  It shall be governed by, and construed in accordance with, the laws
of the State of New York,  without  giving  effect  to the rules  governing  the
conflicts of laws.


                            [signature page follows]




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<PAGE>



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

                                               iPARTY CORP.


                                               By:      /s/ Daniel I. DeWolf
                                                        ------------------------
                                                        Name: Daniel I. DeWolf
                                                        Title:   Secretary




                                               /s/  Sal Perisano
                                               ---------------------------------
                                               Sal Perisano



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