<PAGE>
 
                                 EXHIBIT 10.45

                             EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of February 16, 1999 (this "Agreement"), by
and between 7/TH/ LEVEL, INC., a Delaware corporation (the "Company"), and
STEPHEN GOTT ("Executive").

                                 RECITALS
                                 --------

     WHEREAS, the Company is simultaneously entering into an Agreement and Plan
of Merger, by and among the Company, 7/th/ Level Merger Corporation, Street
Technologies, Inc. ("Street") and the stockholders of Street named therein (the
"Merger Agreement") pursuant to which the Company and Street shall merge (the
"Merger");

     WHEREAS, Executive is the majority stockholder of Street and the current
Chief Executive Officer of Street; and

     WHEREAS, the Company desires to employ Executive as Chief Executive Officer
of the Company on the terms and conditions hereinafter set forth and Executive
desires to accept such employment.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:

     1.   Employment.
          ---------- 

          1.1    Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Term (as defined in Section 2) as
Chief Executive Officer of the Company.  Executive shall report to the Board of
Directors of the Company (the "Board").  As Chief Executive Officer of the
Company, Executive shall perform such duties and responsibilities as are
customarily performed by the chief executive officer of a company the size and
nature of the Company, and such other managerial duties and responsibilities
with the Company which are appropriate for his position at the Company as, from
time to time, may be assigned to him by the Board.

          1.2    Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as Chief Executive Officer of the Company
and agrees to devote his full working time and efforts to the performance of
services, duties and responsibilities in connection therewith (other than during
periods of illness, disability or vacation). Nothing in this Agreement shall
preclude Executive, so long as, in the reasonable determination of the Board,
such activities do not materially interfere with his duties and responsibilities
hereunder, from
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engaging in charitable and community affairs, from managing any passive
investment made by him in real estate or other property (provided that no such
investment may exceed 2% of the equity securities of any entity, without the
prior approval of the Board), or from serving, subject to the prior approval of
the Board, as a member of boards of directors or as a trustee of any other
company, association or entity.

          1.3    So long as the Executive shall serve as Chief Executive Officer
of the Company, the Company shall cause Executive to be a member of the Board.
 
     2.   Term of Employment.  The term of this Agreement (the "Term") shall be
          ------------------                                                   
for a  period commencing on the date hereof and continuing through the second
anniversary of the date hereof; subject to earlier termination in accordance
with the terms and conditions contained in Section 7 hereof.

     3.   Place of Employment.  During the Term, Executive shall perform his
          -------------------                                               
services at the principal place of business of the Company which will be located
in 925 Westchester Avenue, White Plains, New York 10604.  Executive shall be
furnished with office facilities and services suitable to his position and
suitable for the performance of his duties.  Executive acknowledges and agrees
that in connection with his employment, however, he may be required to travel on
behalf of the Company.

     4.   Compensation.
          ------------ 

          4.1  Salary.  During the Term, the Company shall pay Executive a base
               ------                                                          
salary ("Base Salary") at the rate of Two Hundred Thousand  Dollars ($200,000)
per annum (pro rated for the balance of fiscal 1999 ending December 31, 1999,
and for any partial year during the Term).  The Base Salary shall be payable in
accordance with the ordinary payroll practices of the Company for its executive
officers but in no event less frequently than semi-monthly.  The Base Salary
shall be reviewed annually by the Board on or before the last day of each fiscal
year, and may be increased in the sole discretion of the Board taking into
account corporate and individual performance, any increase in Executive's
responsibilities on account of acquisitions by, or the general growth of, the
Company and general business conditions.

          4.2  Performance Bonus.  Executive shall be entitled to receive an
               -----------------                                            
annual performance bonus (each, a "Performance Bonus") of not less than $50,000
for the fiscal year in which such bonus is earned.  Subject to the immediately
preceding sentence, the amount of any such Performance Bonus shall be determined
by the Board, in its sole discretion, and shall be based on such quantitative
and qualitative initiatives as identified by the Board upon consultation with
Executive and upon approval of the budget for the respective fiscal year.  Any
such Performance Bonus shall be paid to Executive within 120 days of the end of
the fiscal year to which it relates.

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          4.3  Stock Options.  (a) As an inducement to Executive to enter into
               -------------                                                  
this Agreement, the Company has on the date hereof (the "Grant Date") granted to
Executive options (the "Options") to purchase 1,000,000 shares of common stock,
par value $.01 per share, of the Company ("Common Stock") exercisable at a price
equal to $3.25 per share of Common Stock. Pursuant to the terms of the grant,
vesting of such Options shall occur as follows:

        333,000 Options shall vest on the first anniversary of the Grant Date;
        333,000 Options shall vest on the second anniversary of the Grant Date;
        334,000 Options shall vest on the third anniversary of the Grant Date.

          (b) If Executive's employment is terminated by the Company without
Cause (as hereinafter defined) or if Executive terminates his employment with
the Company for Good Reason (as hereinafter defined), all Options shall fully
and immediately vest.

          (c) If Executive terminates his employment with the Company other than
for Good Reason or if Executive's employment is terminated by the Company for
Cause (i) prior to the first anniversary of the Grant Date, then 333,000 Options
shall vest on such date of termination; (ii) after the first anniversary but
prior to the second anniversary of the Grant Date, then 333,000 Options shall
vest on such date of termination (in addition to the 333,000 Options which
vested on the first anniversary of the Grant Date); (iii) after the second
anniversary but prior to the third anniversary of the Grant Date, 334,000
Options shall vest on such date of termination (in addition to the 333,000
Options which vested on each of the first and second anniversary of the Grant
Date).

     5.   Employee Benefits.
          ----------------- 

          5.1  Employee Benefit Programs, Plans and Practices.  The Company
               ----------------------------------------------              
shall provide Executive during the Term, with coverage under all employee
benefit programs, plans and practices which the Company makes available from
time to time to its senior executives, with at least the same opportunity to
participate as the other senior executives of the Company including, without
limitation, retirement, pension, profit sharing, medical, dental,
hospitalization, life insurance, short and long term disability, accidental
death and dismemberment and travel accident coverage.

          5.2  Vacation and Fringe Benefits.
               ---------------------------- 

               (a)  Executive shall be entitled to four (4) weeks paid vacation
in each year (pro rated as necessary for partial calendar years during the
Term).  Executive may take his allotted vacation days at such times as are
mutually convenient for the Company and Executive, consistent with the Company's
vacation policy in effect from time to time with respect to its executive
officers.

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               (b)  Executive shall be entitled to the perquisites and fringe
benefits normally made available to other senior executives of the Company,
commensurate with his position with the Company.

          5.3  Expenses.  Executive is authorized to incur reasonable expenses
               --------                                                       
in carrying out his duties and responsibilities under this Agreement, (in
accordance with the policies and procedures established from time to time by the
Company) including, without limitation, entertainment and travel expenses (and
the cost of living while away from home on business or at the request of, and in
the service of the Company), and similar items related to such duties and
responsibilities.  The Company will reimburse Executive in full for all such
out-of-pocket expenses upon presentation by Executive from time to time of a
proper account of such expenditures in accordance with the policies and
procedures established by the Board and applicable to executive officers of the
Company.

          5.4  Indemnification.  Executive shall be entitled, at all times
               ---------------                                            
(including after the termination of this Agreement for any reason), to the
benefit of the maximum indemnification and advancement of expenses available
from time to time under the Company's Restated Certificate of Incorporation and
By-laws, and if not set forth therein, to the maximum extent available under the
laws of the Company's state of incorporation.

     6.   Key-Person Insurance.  Executive agrees that the Company may at any
          --------------------                                               
time and from time to time, and for the Company's own benefit, apply for and
take out term life, health, accident, and/or other insurance covering Executive
("Key-Person Insurance") in an amount to be determined in the sole discretion of
the Board in consultation with Executive.  The Company shall own all rights in
any such Key-Person Insurance policies and proceeds thereof and Executive shall
not have any right, title or interest therein; except that if Executive is no
longer employed by the Company (other than as a result of his death or
Disability (as herein defined)) then the Company shall terminate such Key-Person
Insurance policies or, at the option of Executive, arrange for such Key-Person
Insurance policies to be assigned to Executive; provided, however, that said
policies permit such assignment and Executive is solely responsible for the
payment of any premiums after such assignment.  Executive agrees to assist the
Company at the Company's expense in obtaining any such Key-Person Insurance by,
among other things, submitting to the customary examinations and correctly
preparing, signing and delivering such applications and other documents as may
be required by insurers.

     7.   Termination of Employment.
          ------------------------- 

          7.1  Good Reason.  Executive shall be entitled to terminate his
               -----------                                               
employment for "Good Reason."  For purposes of this Agreement, "Good Reason"
shall mean (without Executive's express prior written consent as a shareholder,
director or otherwise) (i) failure by the Company to pay any compensation when
due hereunder, (ii) any significant reduction by the Company of Executive's
authorities, powers, functions, duties or responsibilities in managing the

                                       4
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Company's business or the assignment of duties to Executive by the Board
inconsistent with Executive's position (except in connection with termination of
Executive's employment for Cause (as defined in section 7.4), as a result of
Disability (as defined in Section 7.2), as a result of Executive's death or by
Executive other than for Good Reason) or (iii) any material breach by the
Company of any other material provision of this Agreement.  If Executive desires
to terminate his employment with the Company for Good Reason, he shall first
give written notice of the facts and circumstances providing Good Reason to the
Company, and shall allow the Company no less than twenty (20) days to remedy,
cure or rectify the situation giving rise to Good Reason.

          7.2  Disability.  If Executive shall fail during the Term, because of
               ----------                                                      
illness, physical or mental disability or other incapacity, for a period of 90
consecutive days or any 120 days in any 365 consecutive days, to render the
services provided for by this Agreement or be adjudged an incompetent
("Disability"); provided that the date on which the Disability will be deemed to
occur shall be such 90th day or the date on which Executive is adjudged an
incompetent, as the case may be, the Company may terminate Executive's
employment on not less than two (2) weeks written notice thereof, setting forth
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under this Section 7.2.

          7.3  Death.  Executive's employment hereunder will terminate
               -----                                                  
automatically if he should die.


          7.4  Termination for Cause.  The Company shall have the right to
               ---------------------                                      
terminate the employment of Executive with or without Cause (as hereinafter
defined).  The term "Cause," as used herein, shall mean (i) Executive's
continuing, repeated and willful refusal and failure (other than during periods
of illness, disability or vacation) to perform his duties hereunder or under any
lawful directive of the Board (consistent with the terms of this Agreement),
(ii) Executive's willful misconduct or gross neglect in the performance of his
duties hereunder, (iii) the willful material breach of this Agreement by
Executive, (iv) the conviction, plea of guilty or nolo contendre of Executive in
respect of any felony, other than motor vehicle offenses, or for any misdemeanor
constituting theft or embezzlement from the Company; provided that an indictment
of Executive in such matters shall cause the Company to suspend Executive with
pay until such matters are, to the Company's satisfaction, clarified or
finalized , (v) other fraudulent action against the Company or (vi) any
violation by Executive, or conduct by Executive that poses a substantial threat
of causing the Company to violate, any statute, law, ordinance or regulation
promulgated or enforced by any entity with jurisdiction over the Company or
Executive, concerning employment discrimination or other employment-related
wrongs.  For purposes of this Section 7.4, no act, or failure to act, on
Executive's part, will be considered "willful" unless done or omitted to be done
by him not in good faith or without a reasonable belief that his action or
omission was in furtherance of and in the best interests of the Company's
business.  Termination by the Company for Cause may be effected by written
notice of the Company to Executive; provided, however, that if the Company
determines to terminate the Executive's employment pursuant to clause (i) or
(iii) hereof, the Company shall give the Executive written

                                       5
<PAGE>
 
notice of the facts and circumstances providing Cause and shall allow Executive
no less than twenty (20) days in the case of a proposed termination pursuant to
clause (i) or (iii) above to remedy, cure or rectify the situation giving rise
to Cause.

          7.5  Termination upon a Change of Control.  In the event of a Change
               ------------------------------------                           
of Control, Executive shall become immediately and fully vested in all Options
held by Executive.   For purposes of this Agreement, a "Change of Control" shall
mean that (i) any "person" (as such term is defined within the meaning of Rule
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934 Act")),
other than any person who as of the date hereof beneficially owns (as defined in
Rule 13(d)(3) of the 1934 Act) directly or indirectly 5% or more of the
Company's outstanding Common Stock or as of the date hereof is on, or has
designated a member of, the Board, becomes a beneficial owner directly or
indirectly of securities of the Company representing in excess of fifty percent
(50%) of the Company's then outstanding securities having the right to vote for
the election of directors, (ii) the Company shall have consummated the sale of
all or substantially all of the assets of the Company, or (iii) the following
individuals cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on the date hereof, constitute the
Board and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a vote of
at least two-thirds (_) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended.

     8.   Compensation Upon Termination.
          ----------------------------- 

          8.1  Constructive Termination; Termination by the Company without
               ------------------------------------------------------------
Cause; Termination by Executive for Good Reason.  (i) If Executive terminates
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his employment pursuant to Section 7.1, or (ii) if Executive's employment is
terminated by the Company without Cause, or (iii) if the Company determines not
to extend the Term of this Agreement for a one year period, Executive shall be
entitled to (A) receive Executive's Base Salary, Performance Bonus and benefits
as set forth in Section 5 to which Executive is entitled up to and including the
effective date of Executive's termination of employment hereunder, (B) receive
Executive's Base Salary and minimum Performance Bonus as set forth in Section
4.2 paid consistent with the Company's payroll practices for one (1) year and
(C) become immediately and fully vested in all Options held by Executive.
Executive also shall be entitled to receive, during the period he is being paid
Base Salary under this Agreement, the benefits provided under Section 5.1;
except to the extent that such continued participation is not permitted under
the plan, program or practice or would cause the plan, program or practice to
cease to be qualified under any applicable law or regulation.  Notwithstanding
the foregoing, nothing herein shall cause the Company to maintain Executive's
status as an employee of the Company after termination.

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<PAGE>
 
          8.2  Termination by Executive other than for Good Reason; Termination
               ----------------------------------------------------------------
by the Company for Cause.  If Executive's employment is terminated by the
------------------------                                                 
Company for Cause or by Executive other than pursuant to Section 7.1, Executive
shall be entitled to (i) receive Executive's Base Salary, Performance Bonus and
benefits as set forth in Section 5 to which Executive is entitled up to and
including the effective date of Executive's termination of employment hereunder
and (ii) accelerated vesting of Options as described in Section 4.3.  After such
termination of employment, the obligations of the Company under this Agreement
to make any further payments, or to provide any benefits specified herein, to
Executive shall thereupon cease and terminate.

          8.3  No Substitution.  Nothing contained in Section 8.1 shall be
               ---------------                                            
construed to represent a substitution for compensation already paid to or earned
by Executive.  In addition, Executive shall be entitled to receive all amounts
in respect of the period prior to the date of termination otherwise payable
herein (without double counting), including such payments provided for in
Sections 4 and 5.

     9.   Nondisclosure; Non-Competition and Non-Solicitation.
          --------------------------------------------------- 

          9.1  Nondisclosure.  Executive shall not during the Term and
               -------------                                          
thereafter, without the prior written consent of the Company, divulge, disclose
or make accessible to any other person, firm, partnership, corporation or other
entity any Confidential Information (as herein defined) pertaining to the
business of the Company, except (i) while employed by the Company, in the
business of and for the benefit of the Company or (ii) when required to do so by
a court of competent jurisdiction, by any governmental agency having supervisory
authority over the business of the Company, or by any administrative body or
legislative body (including a committee thereof) with purported or apparent
jurisdiction to order Executive to divulge, disclose or make accessible such
information.  For purposes of this Agreement, "Confidential Information" shall
mean non-public information concerning the Company's financial data, strategic
business plans, product development (or other proprietary product data),
customer information, discoveries, practices, processes, methods, marketing
plans and other material non-public, proprietary and confidential information of
the Company, that, in any case, is not otherwise generally available to the
public.  In the event Executive's employment is terminated hereunder, he shall
immediately return to the Company all Confidential Information in his possession
other than information which Executive is entitled to receive in his capacity as
a shareholder of the Company.  "Confidential Information" shall not include
information which becomes available to Executive on a non-confidential basis
from a source other than the Company or was available to Executive on a non-
confidential basis prior to its disclosure to Executive by the Company.

          9.2  Prohibition on Competition.  During the period of his employment
               --------------------------                                      
with the Company (other than on behalf of the Company) and for twenty four (24)
months after the date of termination of his employment with the Company (the
"Non-Competition Period"), Executive agrees that, without the prior written
consent of the Company: (i) he will not, directly

                                       7
<PAGE>
 
or indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee, or in any other capacity
(and wether or not for compensation) carry on, be engaged in or employed by or
be a consultant to or have any financial interest in, any business which is in
competition with the business of the Company (as defined in Section 9.3).

          9.3  Non-Solicitation of Employees.  During the Non-Competition
               -----------------------------                             
Period, Executive will not:

               (a)   solicit or request any employee of or consultant to the
          Company or its affiliates to (a) leave the employ or cease consulting
          for the Company or its affiliates or (b) join the employ of or begin
          consulting for any individual or entity that is in competition with
          the business of the Company;

               (b)   solicit or request or suggest or otherwise abet any
          individual or entity that is in competition with the business of the
          Company to employ any employee of or consultant to the Company or its
          affiliates; or

               (c)   employ, assist in employing or otherwise associate with any
          employee, officer or agent of or consultant to the Company or its
          affiliates in any business or venture which is in competition with the
          business of the Company.

          9.4  Non-Solicitation of Customers.  During the Non-Competition
               -----------------------------                             
Period, Executive will not, directly or indirectly, through brokers or
otherwise, solicit or attempt to solicit, or sell services or attempt to sell
services which are in competition with the business of the Company to any
Customer; for purposes hereof, "Customer" shall mean (A) all customers of the
Company (i) during the term of this Agreement, (ii) as of the date hereof and
(iii) within the two (2) year period preceding the date hereof and (B) all
potential customers of the Company who are being actively solicited by the
Company at the time of the termination of Executive's employment.

          9.5  For purposes of this Section 9, a person or entity which is "in
competition with the business of the Company" shall mean an entity engaged in
the business of animation preparation and production software as presently
conducted or proposed to be conducted and any other business actually engaged in
during the term hereof, directly or indirectly, by the Company or its
subsidiaries including, but not limited to, community enrichment technology
solutions and web based education and training.  Nothing in this Section 9 shall
be construed so as to preclude Executive from (i) investing in any publicly held
company provided Executive's beneficial ownership of any class of such company's
securities does not exceed 2% of the outstanding securities of such class, (ii)
owning memberships, or other similar rights or interests therein, of any United
States or foreign securities, commodities, options or similar exchange, board of
trade, contract market or terminal association (collectively "Exchanges") and
exercising the rights and privileges attendant to such ownership for his own
personal account or for the account of any spouse, child, parent or sibling or
any trust created for the benefit of Executive or any of the

                                       8
<PAGE>
 
foregoing or for the account of any entity wholly owned by Executive or any of
the foregoing relatives or trusts or (iii) trading or dealing on any Exchanges
for Executive's own personal account or for the account of any relative or any
trust created for the benefit of any relative of Executive.

          9.6  Executive and the Company agree that the covenants of non-
competition and non-solicitation are reasonable covenants under the
circumstances, and further agree that if in the opinion of any court of
competent jurisdiction such covenants are not reasonable in any respect, such
court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear not
reasonable and to enforce the remainder of these covenants as so amended.
Executive agrees that any breach of the covenants contained herein would
irreparably injure the Company.  Accordingly, Executive hereby agrees that, in
such event, the Company shall be entitled, without the necessity of proving
damages or posting a bond or security, and notwithstanding any election by the
Company to claim damages, to obtain a temporary and/or permanent injunction to
restrain any such breach or threatened breach or to obtain specific performance
of any such provisions, all without prejudice to any and all other remedies
which the Company may have at law or in equity.

     10.  Mitigation of Damages.  Executive shall not be required to mitigate
          ---------------------                                              
damages or the amount of any payment provided for under this Agreement by
seeking other employment (which may include self-employment) or otherwise, and,
after his termination of employment hereunder, any payments made by the Company
hereunder shall not be reduced by any amount Executive receives from any other
such employment.

     11.  Lock-up Agreement.  Executive agrees not to sell, make any short sale
          -----------------                                                    
of, pledge, grant any option for the purchase of or otherwise dispose of any
shares of Common Stock without the prior written consent of the Company until
the first anniversary of the date hereof.  Notwithstanding the foregoing,
Executive shall be permitted to sell (i) such number of shares of Common Stock
as set forth in the Merger Agreement in Section 6.04(a) thereof, (ii) 1,000,000
shares of Common Stock pursuant to a private placement in accordance with
applicable securities laws; provided that the buyer of such shares shall have
one demand to cause the Company to file a registration statement registering the
offer and sale of such shares within 150 days of the closing of the private
placement and maintain its effectiveness for 90 days, (iii) a number of shares
agreed to be included by the managing underwriter in an underwritten public
offering.

     12.  Registration Rights.
          ------------------- 

          (a) After the first anniversary of the date hereof, Executive (i) may
make two (2) separate demands on the Company for the registration of the offer
and sale of his shares of Common Stock and (ii) shall have four (4)
opportunities to request that his shares of Common Stock be included on a
registration statement proposed to be filed under the Securities Act of

                                       9
<PAGE>
 
1933, as amended, with respect to an offering by the Company for its own account
or for the account of any of its respective security holders.

                                       10
<PAGE>
 
          (b) Notwithstanding anything else herein contained to the contrary, if
Executive is terminated by the Company without Cause or if Executive terminates
his employment for Good Reason, then the Company shall, as soon as practicable,
file a registration statement covering the offer and sale of all of Executive's
Common Stock owned on such date of termination and shall maintain its
effectiveness for 180 days.

          (c) The parties hereto agree to negotiate in good faith and execute a
registration rights agreement setting forth the details of the provisions of
Sections 11 and 12 hereof in accordance with the terms and conditions typically
included in similar registration rights agreements including, but not limited
to, underwriter's "cut-backs" and Company "blackouts".

     13.  Notices.  Any notice, request, demand or other communication required
          -------                                                              
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand, electronic transmission (with a copy following by
hand or by overnight courier), by registered or certified mail, postage prepaid,
return receipt requested or by overnight courier addressed to the other party.
All notices shall be addressed as follows, or to such other address or addresses
as may be substituted by notice in writing:

          To the Company:

               7/th/ Level, Inc.
               1201 Richardson Drive, Suite 277
               Richardson, Texas 75080
               Attention: Chairman of the Board
               Fax No.: (972) 498-0111

          with a copy to:

               Swidler Berlin Shereff Friedman, LLP
               919 Third Avenue
               New York, New York 10022
               Attention: Gerald Adler, Esq.
               Fax No.: (212) 758-9526
          To Executive:

               Stephen Gott
               c/o Street Technologies, Inc.
               925 Westchester Avenue
               White Plains, New York 10604

                                       11
<PAGE>
 
with a copy to:

               Proskauer Rose LLP
               1585 Broadway
               New York, New York 10036-8299
               Attention: Stephen W. Rubin, Esq.
               Fax No.: (212) 969-2900

Communications delivered by hand or by overnight courier shall be deemed
received on the date of delivery; communications sent by electronic means shall
be deemed received one (1) business day after the sending thereof, and
communications sent by registered or certified mail shall be deemed received
three (3) business days after the sending thereof.

     14.  Separability; Legal Fees.  If any provision of this Agreement shall be
          ------------------------                                              
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.  Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement.

     15.  Assignment.  This contract shall be binding upon and inure to the
          -----------                                                      
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company.  Neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company,
except that the Company may assign this Agreement to any successor (whether by
merger, acquisition of stock, purchase or otherwise) to all or substantially all
of the assets or business of the Company, if such successor expressly agrees in
writing to assume the obligations of the Company hereunder.

     16.  Amendment; Waiver.  This Agreement may only be amended by written
          -----------------                                                
agreement signed by the parties hereto.  A waiver by the Company or Executive of
a breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the other party.

     17.  Beneficiaries; References.  Executive shall be entitled to select (and
          -------------------------                                             
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof.  In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.

                                       12
<PAGE>
 
     18.  Survivorship.  The respective rights and obligations of the parties
          ------------                                                       
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.  The
provisions of this Section 18 are in addition to the survivorship provisions of
any other section of this Agreement.

     19.  Governing Law.  This Agreement shall be construed, interpreted and
          -------------                                                     
governed in accordance with the laws of the State of New York, without reference
to rules relating to conflicts of law.

     20.  Entire Agreement.  This Agreement and the Merger Agreement contain the
          ----------------                                                      
entire understanding between Executive and the Company and supersede in all
respects any prior or other agreement or understanding between the Company and
Executive as to the matters set forth herein and therein. Except for the
obligations specifically set forth herein and therein, the Company does not owe
any obligations to Executive and Executive does not owe any obligations to the
Company with respect to the matters set forth herein and therein.

     21.  Withholding.  The Company shall withhold from any payments due to
          -----------                                                      
Executive hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.

     22.  Headings.  The section headings contained in this Agreement are for
          --------
the convenience of reference only and shall not affect the construction of any
provision of this Agreement.

     23.  Counterparts.  This Agreement may be executed in two or more
          ------------                                                
counterparts, each of which will be deemed an original but all of which together
this shall constitute one and the same instrument.

                 [Remainder of page intentionally left blank.]

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<PAGE>
 
        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first above written.

                              7TH LEVEL, INC.


                              By:  /s/ DONALD SCHUPAK
                                  ----------------------------    
                                   Donald Schupak
                                   Chairman of the Board


                              EXECUTIVE


                                   /s/ STEPHEN GOTT
                                  ----------------------------    
                                   Stephen Gott

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