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                                                                   EXHIBIT 10.2


                                  CONFIDENTIAL

                               SEVERANCE AGREEMENT


         This SEVERANCE AGREEMENT is executed by U. S. Interactive, Inc.
(hereinafter referred to as "USI") and Stephen T. Zarrilli (hereinafter referred
to as "Zarrilli").

                                   WITNESSETH:

                  WHEREAS, pursuant to the terms of a certain Employment
Agreement, dated July __, 1999, between Zarrilli and USI, Zarrilli became, and
is currently an employee and a director and Chief Executive Officer and
President of USI and an officer and director of USI's subsidiaries and
affiliated companies (sometimes, collectively referred to herein as , the
"Companies"); and

                  WHEREAS, Zarrilli has agreed to resign from his employment
with USI, and from his offices of Chief Executive Officer and President and as a
director of USI and as an officer and director of each of the Companies and USI
and each of the Companies have agreed to accept Zarrilli's resignations; and

                  WHEREAS, the parties have agreed that the aforesaid Employment
Agreement shall automatically terminate and be of no further force or effect
upon execution of this Severance Agreement.

                  NOW THEREFORE, in consideration of the obligations of the
parties hereto, and other consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

                  1. Resignation. USI and Zarrilli hereby agree that as of this
date, Zarrilli is no longer employed by USI and that Zarrilli does hereby resign
as of this date from all officer positions and director positions of each of the
Companies. Zarrilli agrees to execute any documents necessary to effectuate such
resignations. Zarrilli further agrees to provide reasonable assistance in the
transition of his duties.

                  2. Severance Compensation: USI shall pay to Zarrilli the sum
of Four Hundred Twelve Thousand Five Hundred Dollars ($412,500). This sum will
be paid in equal periodic payments throughout the next eighteen (18) months, in
accordance with USI's normal payroll disbursements, or at such earlier times at
the discretion of USI. These payments are to be made irrespective of any other
employment Zarrilli may obtain. USI will make state and federal tax deductions,
social security deductions, and all other appropriate deductions from these
severance payments and any other payments hereunder. If Zarrilli breaches any
material obligation set forth in this document or in the agreements referred to
in Section 6, and if such breach is curable and is not cured within ten (10)
days after Zarrilli receives notice of such breach, all payments set forth in
this section and the benefits and insurance coverages set forth in Section 5
will immediately terminate. In addition, USI shall reimburse Zarrilli for his
legal costs and expenses in connection with the negotiation and execution of
this Severance Agreement up to $2,000.00. In addition, USI shall pay for
outplacement service fees on behalf of Zarrilli, not to exceed $10,000.00, and
USI shall pay to Zarrilli up to $1,000 for business use of home phone service.

                  3. Vacation Compensation: USI and Zarrilli agree that Zarrilli
has one month of accrued, unused vacation for which he will be paid $22,917,
subject to appropriate withholding. Such amount is being paid upon execution of
this Agreement.

                  4. Stock Options: Zarrilli may exercise his currently vested
options for shares of USI stock during the period of 60 days immediately after
the date hereof. All options for shares not vested as of this date are deemed to
be vested immediately upon execution by Zarrilli and USI of this Agreement and
are exercisable for a period of 60 days immediately after the date hereof. All
of the aforesaid options may hereinafter be referred to as the "Vested Options".
Except as modified by this Section 4, Zarrilli must exercise the Vested Options
in accordance with the option plans under which they were granted. USI and
Zarrilli acknowledge that as of the date hereof Zarrilli has those options set
forth on Exhibit "A".

                  5. Insurance and Other Benefits: USI will continue at USI's
sole expense all benefits to which he is entitled as of this date, including the
existing coverage of Zarrilli and his family (to the extent applicable) for
health, life, disability and dental care, for a period of eighteen (18) months
after the date hereof. Thereafter, Zarrilli will be eligible to continue his
coverage in accordance with COBRA and applicable law. Such eighteen (18) month
anniversary shall be deemed to be the commencement date for COBRA entitlement.
USI will provide Zarrilli information regarding his eligibility for such
benefits and his obligations pursuant to applicable law including, without
limitation, COBRA. Zarrilli understands and agrees that following the eighteen
(18) month period, he will be solely responsible for making any applicable
premium payments. USI shall reimburse Zarrilli for auto expenses in the amount
of $ 650.00 per month, in accordance with the reimbursement practices of USI for
a period of eighteen (18) months following the date hereof.
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                  6. Existing Agreement. Zarrilli does hereby reaffirm his
obligations under and agrees that he remains bound by and subject to the
Employee Non-Disclosure, Assignment of Developments, Non-Solicitation and
Non-Competition Agreement (the "NDA") executed by him and USI on June 28, 1996;
and that notwithstanding anything to the contrary in the NDA, Zarrilli agrees to
be bound by such obligations for a period of eighteen (18) months following the
date hereof, provided, however, the parties hereby agree that Section 3(i) and
3(iii) are hereby deleted and Zarrilli shall no longer be obligated to comply
with such sections. For purposes hereof, the NDA shall be deemed incorporated
herein by reference and made a part hereof.. USI acknowledges that it has
obtained all necessary consents in connection with this Agreement required to be
obtained by USI.

                  7. Release. Except for the obligations of USI set forth in
this Agreement, Zarrilli does hereby remise, release and forever discharge USI,
and each of USI's past and present divisions, subsidiaries, parents,
predecessors, and, in a corporate capacity and as an individual, each of USI's
past and present directors, officers, shareholders, agents and employees (except
with respect to the obligations of USI under this Agreement, the applicable
option plans and option agreements, the Employee Non-Disclosure, Assignment of
Developments, Non-Solicitation and Non-Competition Agreement executed by
Zarrilli on June 28, 1996, as amended hereby; and USI does hereby remise,
release and forever discharge Zarrilli (except with respect to the obligations
of Zarrilli under: this Agreement, the applicable option plans and option
agreements, the Employee Non-Disclosure, Assignment of Developments,
Non-Solicitation and Non-Competition Agreement executed by Zarrilli on June 28,
1996, as amended hereby, from any and all manner of actions, causes of action,
suits, debts, accounts, contracts, agreements, controversies, which Zarrilli (in
the case of USI) and USI (in the case of Zarrilli) ever had, now has, or
hereafter can, shall or may have for, upon or by reason of any act, transaction,
practice, conduct, matter, cause or thing of any kind whatsoever that arose or
occurred prior to the date hereof, whether or not now known, including but not
limited to any action, cause of action, suit, debt, account, contract,
agreement, controversy, judgment, damage, claim, liability and demand of any
nature whatsoever, arising out of, relating to or based upon, in whole or in
part:

                           (a) Zarrilli's employment with USI and any
compensation arrangements related thereto, including vacation, sick time, and
any options (excluding the Vested Options) granted or to be granted to Zarrilli
by USI;

                           (b) Any act, transaction, practice or conduct arising
or occurring prior to the date hereof, which is actionable, or claimed to be
actionable, under any statutory or common law of the United States or any state
thereof;

                           (c) Any effect which existed or occurred, or
presently exists, or may in the future exist or occur, as a result of any act,
transaction, practice or conduct that occurred prior to the date hereof;

                           (d) All claims arising from or during Zarrilli's
employment by USI or as a result of the termination of Zarrilli's employment,
and all claims arising under federal, state or local laws or regulations
prohibiting employment discrimination based upon age, race, sex, religion,
handicap, disability, national origin or any other protected characteristic,
including, but not limited to, any and all claims arising under the laws of the
Commonwealth of Pennsylvania and the laws of the State of Delaware, the Age
Discrimination in Employment Act, the Fair Labor Standards Act, Title VII of the
Civil Rights Act of 1964, The Civil Rights Act of 1991, the Employee Retirement
Income Security Act ("ERISA"), and/or claims growing out of any legal
restrictions, expressed or implied, on USI's right to control or terminate the
employment of its employees; and

                           (e) Any other act, transaction, practice or conduct
whatever that occurred prior to the date hereof, whether or not Zarrilli or USI
presently has knowledge of the acts, transactions, practices, conduct or other
matters covered herein (all of the foregoing, hereinafter "Claims").
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         Exclusions. Notwithstanding the foregoing, nothing in this Severance
Agreement shall operate, or shall be construed or interpreted, as a release,
acquittal, discharge or waiver of any of the following, and none of the
following shall be included in the claims that are the subject of the release
contained in this Severance Agreement:

                           a. Such rights of Zarrilli which are unconditionally
vested in him as of the date hereof under the terms of the employee welfare
benefit plans of USI (medical, dental and disability insurance plans, life
insurance, and 401(k) plan), Zarrilli hereby acknowledging that all such rights
shall be provided only in accordance with, and subject to, the terms and
provisions of the relevant plans as in effect from time to time which are
applicable to Zarrilli.

                           b. The right of Zarrilli and his dependents to the
continuation of health care coverage for eighteen (18) months as specified in
Section 5 hereof, and subject to, applicable law, including, without limitation,
COBRA, of which Zarrilli understands he will be notified after the date hereof.
Zarrilli hereby acknowledges that such rights are subject to Zarrilli's timely
exercise and that all payments subsequent to such eighteen (18) month severance
period for any such continued health care coverage will be paid by him.

                           c. Zarrilli's right to reimbursement of business
expenses incurred through the date hereof, in accordance with and subject to the
normal reimbursement procedures of USI, provided that in order for a request to
be eligible for reimbursement it must be submitted on or before forty-five (45)
days after the date hereof.

                           d. Any right which Zarrilli now has or may have to
claim indemnity (including advancement of expenses) for liabilities in
connection with his activities as a director, officer or employee of USI or any
of the Companies pursuant to the terms of any applicable statute, under any
insurance policy, or pursuant to the certificate of incorporation or bylaws of
USI.
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                           e. Zarrilli hereby confirms that: (i) his execution
of the release contained in this Severance Agreement is a material inducement to
USI for entering into this Severance Agreement and making the payments at the
time called for herein; (ii) Zarrilli has had the opportunity to consult, and
has in fact consulted with legal counsel, concerning this Severance Agreement;
(iii) no statements, representations or promises have been made to Zarrilli, or
relied upon by Zarrilli, in executing this Severance Agreement.

                  8. Covenants Not to Sue. Except for the obligations of USI set
forth in this Agreement, Zarrilli covenants and agrees not to commence or
prosecute any action or proceeding against USI or any of USI's past or present
divisions, subsidiaries, parents, predecessors, or, in a corporate capacity or
as an individual, any of USI's past or present directors, officers,
shareholders, agents, or employees, or to assert against USI or any of USI's
past or present divisions, subsidiaries, parents, predecessors, or, in a
corporate capacity or as an individual, any of USI's past or present directors,
officers, shareholders, agents or employees in any action or proceeding any
matter whether or not now known, based upon any act, transaction, practice or
conduct of USI or any of USI's past or present divisions, subsidiaries, parents,
predecessors, or, in a corporate capacity or as an individual, any of USI's past
or present directors, officers, shareholders, agents or employees, that occurred
prior to the date hereof. Except for the obligations of Zarrilli set forth in
this Agreement or the agreement set forth in Section 6, USI covenants and agrees
not to commence or prosecute any action or proceeding against Zarrilli in a
corporate capacity or as an individual, or to assert against Zarrilli in a
corporate capacity or as an individual in any action or proceeding any matter
whether or not now known, based upon any act, transaction, practice or conduct
of Zarrilli in a corporate capacity or as an individual, that occurred prior to
the date hereof.

                  9. References. If inquiries are made to USI from prospective
employers of Zarrilli or from any other person or entity, the inquiries (whether
written or oral) will be referred to Mr. Shay or another executive mutually
agreed upon by Zarrilli and USI, and Mr. Shay or the other executive will
provide only the information contained on Exhibit B attached hereto. If
authorized by Zarrilli in writing in advance, USI also will provide a
prospective employer any other information mutually agreed upon by Zarrilli and
USI.

                  10. Non-Disparagement: Zarrilli agrees that he will not
disparage or defame USI and/or its current or former directors, officers,
shareholders, and employees, and USI agrees not to, and shall cause its
directors, officers and employees not to, disparage or defame Zarrilli.

                  11. Return of USI Property: Zarrilli agrees that as of the
execution of this Severance Agreement, he has returned to USI any and all USI
property currently in his possession, including, but not limited to, any USI
keys, access cards, credit cards, computer equipment, computer tapes and
diskettes, documents, manuals, client information, and any other information in
either printed or electronic formats which he obtained as a result of or in
connection with his employment by USI, with the exception of the items of
personal property and computer equipment specified on Exhibit C attached hereto,
which shall be Zarrilli's property.

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                  12. Special Provisions:  USI agrees to grant Zarrilli the
following:


     o        After screening by Mr. Shay, during the three (3) month period
              after the date hereof, USI's emails and voicemails for Zarrilli
              not related to USI will be directed to accounts which Zarrilli
              provides to USI.

     o        USI shall provide Zarrilli a reasonable period of time to remove
              his personal belongings located in his office.

     o        USI shall provide to Zarrilli reasonable administrative services
              for a period not to exceed 3 months.

     o        For a period of up to one year, after review, USI shall forward to
              Zarrilli all non-USI-related mail.

                  13. Confidentiality: The parties hereto agree that it is the
intent of the parties to maintain the complete confidentiality of this Severance
Agreement and the negotiations leading to this Severance Agreement. Therefore,
the parties agree that they will not publicize, and will take all prudent steps
to ensure the confidentiality of this Severance Agreement. The only comment the
parties will make about Zarrilli's resignation from USI is detailed in Exhibit
B, that he resigned voluntarily, and that all matters relating to his employment
with USI have been resolved to the mutual satisfaction of the parties.
Notwithstanding the terms of this Section, Zarrilli will be entitled to disclose
the terms of this Severance Agreement as may be required by law, and to his
lawyers, tax advisors, accountants, and immediate family on the condition that
those to whom such disclosure is made also will be bound by the terms of this
Section, and USI shall be permitted to disclose the terms of this Severance
Agreement as required by law, rule or regulation. USI shall issue a press
release promptly following the execution of this Agreement in the form of
Exhibit B.

                  14. No Admission of Fault: Zarrilli and USI agree that their
willingness to enter into this Severance Agreement does not constitute, and is
not to be construed as, any admission of liability or fault on the part of
Zarrilli or USI.

                  15. Jurisdiction. Any action, suit or proceeding arising out
of or relating to this Agreement or any other agreement executed in connection
herewith shall be litigated exclusively in the Courts of the Commonwealth of
Pennsylvania. Each of the parties hereto hereby irrevocably and unconditionally
(A) submits to the jurisdiction of the Pennsylvania Courts, (B) waives, and
agrees not to plead or to make, any objection to the venue of any proceeding in
the Pennsylvania Courts, (C) waives, and agrees not to plead or to make, any
claim that any proceeding brought in the Pennsylvania Courts has been brought in
an improper or otherwise inconvenient forum, (D) waives, and agrees not to plead
or to make, any claim that the Pennsylvania Courts lack personal jurisdiction
over him or it, (E) waives their rights to remove any proceeding to the federal
courts except where such courts are vested with sole and exclusive jurisdiction
by statute, and (F) understands and agrees that they shall not seek a jury trial
or punitive damages in any proceeding based upon or arising out of or otherwise
related to this Agreement or any other agreement executed in connection herewith
or the breach, termination or validity thereof, and waives any and all rights to
any such jury trial or to seek punitive damages. Each party is required to
continue to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to this Agreement, unless
to do so would be impossible or impracticable under the circumstances.

                  16. Injunctive Relief ; Acceleration of Payments

                           (a) Each party agrees that any breach of their
respective obligations under this Agreement will cause irreparable harm to the
other party and that in the event of such a breach the other party shall have,
in addition to any and all remedies at law, the right to an injunction, specific
performance or other equitable relief.

                           (b) In the event it is determined by a court of
competent jurisdiction that USI has

<PAGE>

breached its obligations to make the required severance payments hereunder, USI
shall immediately pay to Zarrilli (i) the amount of such payments and all
remaining payments, (ii) the benefits and insurance premiums for coverages
required to be provided by USI but not provided, (iii) interest at a rate of ten
percent (10%) per annum from the original due date on amounts not paid to
Zarrilli, and (iv) all reasonable attorney's fees and costs incurred by Zarrilli
in obtaining such a determination.

                  17. No Waiver. No failure or delay on the part of any party to
this Agreement in exercising any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

                  18. Termination of Employment Agreement. The parties agree
that the Employment Agreement between USI and Zarrilli is deemed terminated and
of no further force or effect upon the full execution of this Severance
Agreement.

                  19. Notices. Except as expressly set forth in this Agreement,
all notices, requests, demands and other communications provided for hereunder
shall be in writing and mailed or delivered to the applicable party at the
addresses specified below:

         If to Zarrilli: at the following address, or at such other address as
shall be designated by Zarrilli in a written notice to USI complying as to
delivery with the terms of this Agreement:



                                    Stephen T. Zarrilli
                                    314 Jefferson Drive
                                    Malvern, PA 19355


        With a copy to:             James D. Rosener, Esquire
                                    Pepper Hamilton L.L.P.
                                    1235 Westlakes Drive
                                    Suite 400
                                    Berwyn, PA  19312-2041


         If to USI: at the following address, or at such other address as shall
be designated by USI in a written notice to Zarrilli complying as to delivery
with the terms of this Agreement:

                                    U.S. Interactive, Inc.
                                    2012 Renaissance Boulevard
                                    King of Prussia, PA  19406
                                    Phone: (610)  313-9700
                                    Fax: (610) 382-8908
                                    Attn:  Chief Executive Officer

         All notices, requests, demands and other communications must be by
express overnight courier service, or registered or certified mail return
receipt requested, and shall be considered to be delivered three (3) days after
dispatch.

                  20. No Transfer of Claim. Zarrilli represents and warrants
that he has not sold, assigned, transferred, conveyed or otherwise disposed of
any claim, demand or cause of action relating to any matter covered by this
Agreement.

                  21. Successors and Assigns. This Agreement shall inure to the
benefit of USI and its predecessors, successors and assigns and shall be binding
upon Zarrilli and his heirs, executors, and administrators. Zarrilli shall not
have the right to assign any of his rights hereunder or any interest herein nor
delegate any of his duties hereunder.

                  22. Entire Agreement. This Agreement, and the other agreements
executed and delivered herewith, constitute the entire agreement between the
parties and supersede any prior understandings or agreements concerning the
subject matter hereof.

                  24. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to choice of laws principles.

                  25. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

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                  IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have executed this Agreement under seal on the day and
year set forth below.



WITNESS:

_______________________________         By:      /s/ Stephen T. Zarrilli
                                                 ------------------------------
                                                  Stephen T. Zarrilli

                                        Date: September 8, 2000
                                             ----------------------------------



                                        U.S. INTERACTIVE, INC.

                                        By:       /s/  Eric Pulier
                                                  -----------------------------
                                                 Eric Pulier

                                        Title:   Chairman
                                                 ------------------------------

                                        Date: September 8, 2000
                                             ----------------------------------