Document:

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         EMPLOYMENT AGREEMENT, dated as of December 15, 1999 (the "Agreement"),
         between and among Netgateway, Inc., a corporation organized under the
         laws of the State of Delaware (the "Company"), Netgateway, a
         corporation organized under the laws of the State of Nevada and a
         wholly owned subsidiary of the Company (the "Employer"), and Jill
         Glashow Padwa (the "Executive").
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         The Company and the Employer desires to retain the Executive to supply
services to the Company and the Employer, and the Executive desires to provide
the services to the Company and the Employer, on the terms and subject to the
conditions set forth in this Agreement.

         In consideration of (i) the Executive's agreement to supply the
services under this Agreement and (ii) the mutual agreements set forth below,
the adequacy and sufficiency of which is hereby acknowledged, the Company, the
Employer and the Executive agree as follows:

         1. Services; Term.

            (a) The Employer hereby employs the Executive, and the Executive
hereby agrees to be employed by the Employer, as Executive Vice President, Sales
and Marketing, and the Executive will use her best efforts to perform services
for the Employer in accordance with directions given to Executive from time to
time by the Board of Directors of the Company (the "Board"). The Executive is
being retained by the Employer, among other things, to: (a) develop and
implement a marketing strategy; (b) develop and implement a distribution
strategy; (c) manage relationships with industry consultants; (d) manage all
sales efforts, including but not limited to, sales personnel, budgets,
operations, forecasting, channel development and the sales process; and (e)
develop and manage all marketing communications for internal and external
audiences.

            (b) The Executive shall participate in the operation of the business
of the Employer (the "Business"), and assume and perform all duties and
responsibilities consistent with her title and position (the "Services") as from
time to time requested by the Employer.

            (c) The Executive shall be employed for the period commencing on the
date of this Agreement (the "Effective Date") and ending on December 15, 2001,
unless sooner terminated pursuant to the provisions of this Agreement (such
period being referred to as the "Employment Period"); provided, however, that on
the second anniversary of the Effective Date, the Employment Period shall
automatically be extended by an additional year, unless the Company, the
Employer or the Executive shall give the other party(ies) at least 90 days'
notice of its intent not to extend the term of this Agreement for an additional
year.

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         2. Performance by Executive. During the Employment Period, the
Executive shall devote all of her business time, attention, knowledge and skills
to, and use her best efforts to perform, the Services and shall promote the
interests of the Employer in carrying out the Services. Other than the
restrictions contained in Sections 5 and 6 of this Agreement, nothing herein
shall be deemed to preclude the Executive from continuing to serve on the board
of directors of any business corporation or any charitable organization on which
she now serves or, subject to the prior approval of the Board, from accepting
appointment to additional boards of directors, provided that such activities do
not materially interfere with the performance of Executive's duties hereunder
and such activities are undertaken in compliance with the Company's Code of
Business Conduct.

         3. Compensation and Benefits. During the Employment Period:

            (a) Base Compensation. As compensation for the Services, the Company
shall pay Executive an annual base salary at the rate of $180,000 per year or
such higher amount as the Company's Compensation Committee (the "Committee") may
from time to time determine (the "Base Salary"), payable in accordance with the
Employer's payroll practices. The Base Salary shall be increased by no less than
$25,000 annually during the term of this Agreement, and subject to any
additional discretionary increase, as determined by an annual review by the
Committee on or prior to each anniversary of the Effective Date. The Employer
shall reimburse the Executive for all reasonable expenses incurred by her during
the term of this Agreement in accordance with the Employer's stated expense
reimbursement policy.

            (b) Cash Bonus. (i) The Executive shall be entitled to a sign-on
bonus in the amount of $20,000 (less any applicable payroll and related taxes),
which shall be payable within the first payroll period after Executive has been
employed by the Company.

                (ii) For each calendar year during the Employment Period
commencing on January 1, 2000, Executive shall be entitled to participate in any
annual bonus plan of the Company or the Employer and to receive an annual
performance bonus from the Company or the Employer in accordance with the terms
thereof.

            (c) Stock Options. (i) The Executive will be granted options
pursuant to the Company's 1998 Executive Stock Option Plan (the "Options") to
purchase up to 100,000 shares of the common stock, par value $.01 per share, of
the Company, on terms and conditions to be embodied in a separate option
agreement between the Employer and the Executive (the "Option Agreement"), which
is annexed hereto as Exhibit A.

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                (ii) The Executive shall be entitled to additional option grants
as follows: (x) options to purchase 20,000 shares of the common stock of the
Company for each fiscal quarter during the term of this Agreement that the
Executive meets her sales quota goals (the "Sales Goals"), which Sales Goals
shall be mutually agreed upon by the parties hereto; and (y) options to purchase
20,000 shares of common stock of the Company for each year during the term of
this Agreement in which the Executive shall meet the Sales Goals for the entire
year. Options granted pursuant to this Section 3(c)(ii) shall vest monthly over
a two year period from the date of grant. The exercise price of the options
granted pursuant to this Section 3(c)(ii) shall be fixed at a purchase price
equal to the lower of: (i) the fair market value of such shares as of the close
of business on the date on which such options are granted; or (ii) the closing
price of such shares as of the date on which the Compensation Committee approves
the grant of such options. All option grants made pursuant to this Section
3(c)(ii) shall be governed by separate option agreement to be dated as of the
date of such grant.

            (d) Benefit Plans. The Executive shall be entitled to receive
benefits from the Employer consistent with those in effect for the Employer's
senior executives, as those benefits are revised from time to time by the Board
of Directors of the Employer. Except as specifically provided in this Section 3,
nothing contained herein is intended to require the Employer to maintain any
existing benefits or create any new benefits.

            (e) Vacations and Holidays. The Executive shall be entitled to
vacation and paid holidays in accordance with the Employer's stated policy. In
any case, the Executive shall immediately vest in all holiday and vacation time
as of the Effective Date.

            (f) Insurance and Related Benefits. Health insurance, disability
insurance, life insurance and other related benefits (collectively, "Insurance
Benefits") made available by the Company to other executives of the Company
shall be made available to the Executive. Upon termination of the Executive,
regardless of the reason for termination, Insurance Benefits shall be continued
for Executive at the expense of the Company for a period of no less than six
months and for such additional period as may be required by applicable law at
the expense of the Executive.

         4. Termination.

            (a) Death or Disability. If the Executive dies during the Employment
Period, the Employment Period shall terminate as of the date of the Executive's
death. If the Executive becomes unable to perform the Services for 180
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Executive, or, if the Employer and the Executive cannot agree upon a
physician within 15 days, then by a physician selected by physicians designated
by each of the Employer and the Executive. The Executive's failure to submit to

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any physical examination by such physician after such physician has given
reasonable notice of the time and place of such examination shall be conclusive
evidence of the Executive's inability to perform her duties hereunder.

            (b) Cause. The Company or the Employer, at its option, may terminate
the Employment Period and all of the obligations of the Company and the Employer
under this Agreement for Cause. The Employer shall have "Cause" to terminate the
Executive's employment hereunder in the event of (i) the Executive's conviction
of, or plea of guilty or nolo contendere to a felony, (ii) the Executive's gross
negligence in the performance of the Services, which is not corrected within 15
business days after written notice, (iii) the Executive's knowingly dishonest
act, or knowing bad faith or wilful misconduct in the performance of the
Services to the material detriment of the Company, which is not corrected within
15 business days after written notice or (iv) the Executive's other material
breach of her obligations under this Agreement, which is not corrected within a
reasonable period of time (determined in light of the cure appropriate to such
material breach, but in no event less than 15 business days) after written
notice.

            (c) Without Cause. The Company or the Employer, at its option, may
terminate the Employment Period without Cause at any time upon 30 days advance
written notice.

            (d) Termination by Executive for Good Reason. The Executive may
terminate this Agreement upon 60 days' prior written notice to the Employer for
Good Reason (as defined below) if the basis for such Good Reason is not cured
within a reasonable period of time (determined in light of the cure appropriate
to the basis of such Good Reason, but in no event less than 15 business days)
after the Employer receives written notice specifying the basis of such Good
Reason. "Good Reason" shall mean (i) the failure of the Employer to pay any
undisputed amount due under this Agreement or a substantial diminution in
benefits provided under this Agreement, (ii) a substantial diminution in status,
position and responsibilities of the Executive, (iii) the Employer requiring the
Executive to be based at any office or location that requires a relocation or
commute greater than 50 miles from the office or location to which the Executive
is currently assigned or (iv) the Employer's other material breach of its
obligations under this Agreement.

            (e) Without Good Reason. The Executive, at her option, may terminate
the Employment Period without Good Reason at any time upon 30 days advance
written notice.

            (f) Payments in the Event of Termination. Upon the termination of
the Employment Period for death, disability, by the Executive without Good
Reason, or by the Employer for Cause, the Employer shall pay to the Executive,
or her estate, as the case may be, the Base Salary and Performance Bonus earned
to the date of death or termination for disability or Cause, as the case may be.
In addition, all vested and unexercised Options shall remain exercisable by the
Executive for a period of 365 days. Upon the termination of the Employment

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Period by the Employer without Cause or by the Executive for Good Reason, the
Employer shall pay to the Executive (A) the Base Salary and Performance Bonus
earned to the date of such termination, and (B) an additional amount in a lump
sum in cash equal to the Base Salary at the time of termination for a period
beginning on the date of such termination, and ending on the date that the
Employment Period would have ended pursuant to this Agreement had there been no
termination of Executive's employment; provided, however, that such period shall
be calculated without taking into account any extensions as provided in Section
1.c; and provided, further, that in no event shall such period be less than
twelve months. In addition, all vested and unexercised Options shall become and
remain exercisable by the Executive until the expiration date of the Options
pursuant to the Option Agreement.

            (g) Termination following a Change in Control. If, within the two
year period following a Change in Control (as defined below), (X) Executive's
employment is terminated by the Company or by the Employer for any reason other
than Executive's death or disability or for Cause, or (Y) Executive terminates
her employment for Good Reason, (i) the Company or the Employer shall pay
Executive as severance a lump sum amount equal to (A) two times the sum of (1)
Executive's then Base Salary plus (2) Executive's highest annual Performance
Bonus in the three year period immediately preceding such Change in Control and
(B) the present value of all other benefits otherwise payable through the then
remaining Employment Period under Sections 3(d) and 3(f) of this Agreement, and
(ii) all outstanding equity incentive awards shall immediately vest, and
Executive shall be entitled to receive a lump sum amount equal to the "spread"
on any then outstanding stock options or similar awards held by Executive in
exchange for the surrender and cancellation of such awards. "Spread" shall be
determined by the difference between the option price and the closing price of
the Company's stock on the day the Executive elects to surrender or cancel such
options. A Change in Control shall be deemed to have occurred if any of the
following conditions shall have been satisfied: (i) any "person" as such term is
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company; any trustee or other
fiduciary holding securities under an employee benefit plan of the Company; or
any company owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership at such time of stock of
the Company), is or becomes after the Effective Date the "beneficial owner" (as
defined in Rules 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not included in the securities beneficially owned by
such person any securities acquired directly from the Company) representing 35%
or more of the combined voting power of the Company's then outstanding
securities, (ii) during any period of two consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board of Directors, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described within this definition of Change in
Control) whose election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
Board of Directors then still in office who either were members of the Board of
Directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least

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a majority thereof, (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity and, in connection with such
merger or consolidation, individuals who constitute the Board of Directors
immediately prior to the time any agreement to effect such merger or
consolidation is entered into fail for any reason to constitute at least a
majority of the board of directors of the surviving corporation following the
consummation of such merger or consolidation, or (iv) the stockholders of the
Company approve (a) a plan of complete liquidation of the Company or (b) an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets.

            (h) Excise Tax Gross Up. In the event any of the payments hereunder
shall become subject to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any similar or
successor provision of federal, state or local law, the Company or the Employer
shall pay to Executive such additional amounts as may be necessary to offset
fully the tax effects of such excise tax or taxes, in accordance with the
procedures set forth in Exhibit B hereto.

            (i) Termination of Obligations. In the event of termination of the
Employment Period in accordance with this Section 4, all obligations of the
Employer and the Executive under this Agreement shall terminate, except for any
amounts payable by the Employer as specifically set forth in Sections 4(f), 4(g)
and 4(h) of this Agreement; provided, however, that notwithstanding anything to
the contrary in this Agreement, the provisions of Section 5 and Section 6 shall
survive such termination in accordance with their respective terms, and the
relevant provisions of Section 7 shall survive such termination indefinitely. In
the event of termination of the Employment Period in accordance with this
Section 4, the Executive agrees to cooperate with the Employer in order to
ensure an orderly transfer of the Executive's duties and responsibilities.

         5. Confidentiality; Non-Disclosure.

            (a) Except as provided in this Section 5(a), the Executive shall not
disclose any confidential or proprietary information of the Company and the
Employer or of their affiliates or subsidiaries to any person, firm,
corporation, association or other entity (other than the Company, the Employer,
their subsidiaries, officers or executives, attorneys, accountants, bank
lenders, agents, advisors or representatives thereof) for any reason or purpose
whatsoever (other than in the normal course of business on a need-to-know basis
after the Company or the Employer has received assurances that the confidential
or proprietary information shall be kept confidential), nor shall the Executive
make use of any such confidential or proprietary information for her own
purposes or for the benefit of any person, firm, corporation or other entity,
except the Company and the Employer. As used in this Section 5(a), the term
"confidential or proprietary information" means all information which is or
becomes known to the Executive and relates to matters such as trade secrets,
research and development activities, new or prospective lines of business
(including analysis and market research relating to potential expansion of the
business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,

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potential business combinations, services procedures, pricing information and
private processes as they may exist from time to time; provided that the term
"confidential or proprietary information" shall not include information that is
or become generally available to the public (other than as a result of a
disclosure in violation of this Agreement by the Executive or by a person who
received such information from the Executive in violation of this Agreement).

            (b) If the Executive is requested or (in the opinion of her counsel)
required by law or judicial order to disclose any confidential or proprietary
information, the Executive shall provide the Company or the Employer with prompt
notice of any such request or requirement so that the Company or the Employer
may seek an appropriate protective order or waiver of the Executive's compliance
with the provisions of Section 5(a). The Executive will not oppose any
reasonable action by, and will cooperate with, the Employer to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the confidential or proprietary information. If,
failing the entry of a protective order or the receipt of a waiver hereunder,
she is, in the opinion of her counsel, compelled by law to disclose a portion of
the confidential or proprietary information, the Executive may disclose to the
relevant tribunal without liability hereunder only that portion of the
confidential or proprietary information which counsel advises the Executive she
is legally required to disclose, and each of the parties hereto agrees to
exercise such party's best efforts to obtain assurance that confidential
treatment will be accorded such confidential or proprietary information. During
the Employment Period, and for matters arising from events or circumstances
occurring during the Employment Period, the Company and the Employer will
provide for the defense of matters arising under this provision.

         6. Non-Solicitation. The Executive agrees that she will not, during and
for the period commencing on the Effective Date and ending on the date that is
one year after the termination of the Employment Period, for any reason
whatsoever, either individually or as an officer, director, stockholder,
partner, agent or principal of another business firm, induce any executive or
employee of the Company, the Employer or any of their affiliates or subsidiaries
to terminate such person's employment with the Company, the Employer or such
affiliate or subsidiary or hire any executive or employee of the Company, the
Employer or any of their affiliates to work with any business affiliated with
the Executive; provided, however, that the provisions of this Section 6 shall
not apply in the event that the Company or the Employer materially breaches its
obligations under this Agreement.

         7. General Provisions

            (a) Enforceability. It is the desire and intent of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, although the
Executive, the Company and the Employer consider the restrictions contained in
this Agreement to be reasonable for the purpose of preserving the Employer's
goodwill and proprietary right, if any particular provision of this Agreement

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shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. It
is expressly understood and agreed that although the Company, the Employer and
the Executive consider the restrictions contained in Section 6 to be reasonable,
if a final determination is made by a court of competent jurisdiction that the
time or territory or any other restriction contained in this Agreement is
unenforceable against the Executive, the provisions of this Agreement shall be
deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable.

            (b) Remedies. The parties acknowledge that the Company's and the
Employer's damages at law would be an inadequate remedy for the breach by the
Executive of any provision of Section 5 or Section 6, and agree in the event of
such breach that the Company or the Employer may obtain temporary and permanent
injunctive relief restraining the Executive from such breach and, to the extent
permissible under the applicable statutes and rules of procedure, a temporary
injunction may be granted immediately upon the commencement of any such suit.
Nothing contained herein shall be construed as prohibiting the Company or the
Employer from pursuing any other remedies available at law or equity for such
breach or threatened breach of Section 5 or Section 6 of this Agreement.

            (c) Withholding. The Employer shall withhold such amounts from any
compensation or other benefits referred to herein as payable to the Executive on
account of payroll and other taxes as may be required by applicable law or
regulation of any governmental authority.

            (d) Assignment; Benefit. This Agreement is personal in its nature
and the parties hereto shall not, without the written consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder;
provided that the provisions hereof shall inure to the benefit of, and be
binding upon, each successor of the Company and the Employer, whether by merger,
consolidation, transfer of all or substantially all of its assets, or otherwise.

            (e) Indemnity. The Company and the Employer hereby agree to
indemnify and hold the Executive harmless consistent with the Company's and the
Employer's policy against any and all liabilities, expenses (including
reasonable attorneys' fees and costs), claims, judgements, fines, and amounts
paid in settlement actually and reasonably incurred in connection with any
proceeding arising out of the Executive's employment with the Employer (whether
civil, criminal, administrative or investigative, other than proceedings by or
in the right of the Company or the Employer), if, with respect to the actions at
issue in the proceeding, the Executive acted in good faith and in a manner
Executive reasonably believed to be in, or not opposed to, the best interests of
the Company and the Employer, and (with respect to any criminal action)
Executive had no reason to believe Executive's conduct was unlawful. Said

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indemnification arrangement shall (i) survive the termination of this Agreement,
(ii) apply to any and all qualifying acts of the Executive which have taken
place during any period in which she was employed by the Employer, irrespective
of the date of this Agreement or the term hereof, including, but not limited to,
any and all qualifying acts as an officer and/or director of any affiliate while
the Executive is employed by the Employer and (iii) be subject to any
limitations imposed from time to time under applicable law.

            (f) Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by facsimile (with
confirmation of receipt), addressed as follows:

            If to the Employer:

                Netgateway
                300 Oceangate, Suite 500
                Long Beach, CA 90802
                Attention:  General Counsel
                Facsimile:  562-308-0021

            With a copy to

                Netgateway, Inc.
                300 Oceangate, Suite 500
                Long Beach, CA 90802
                Attention:  General Counsel
                Facsimile:  562-308-0021

            If to the Executive:

                Jill Glashow Padwa
                25 Margrave Avenue
                Providence, RI 02906
                Telephone: 401-454-8888
                Facsimile:  401-454-3533

or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.

            (g) Dispute Resolution; Attorneys' Fees. The Company, the Employer
and the Executive agree that any dispute arising as to the parties' rights and
obligations hereunder shall be resolved by binding arbitration before a private
judge to be determined by mutually agreeable means. In such event, each of the
Company, the Employer and the Executive shall have the right to full discovery.

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The Executive shall have the right, in addition to any other relief granted by
such arbitrator, to reasonable attorneys' fees in the event that a claim brought
by the Executive is decided in the Executive's favor (with the amount of such
fees being limited to those expended defending or in connection with the claim
or claims decided in favor of the Executive). Any judgment by such arbitrator
may be entered into any court with jurisdiction over the dispute.

            (h) Acknowledgement. Executive acknowledges that she has been
advised by Employer to seek the advice of independent counsel prior to reaching
agreement with Employer on any of the terms of this Agreement.

            (i) Amendments and Waivers. No modification, amendment or waiver of
any provision of, or consent required by, this Agreement, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by the
parties hereto. Such modification, amendment, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.

            (j) Descriptive Headings; Certain Interpretations. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.

            (k) Counterparts; Entire Agreement. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement and the Option Agreement contain the
entire agreement among the parties with respect to the transactions contemplated
by this Agreement and the Option Agreement and supersede all prior agreements or
understandings among the parties with respect to the Executive's employment by
the Employer.

            (l) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.

            (m) CONSENT TO JURISDICTION. EACH OF THE COMPANY, THE EMPLOYER AND
THE EXECUTIVE HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT LOCATED IN LOS ANGELES COUNTY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND THE EXECUTIVE AGREES NOT
TO COMMENCE ANY LEGAL PROCEEDING RELATING THERETO EXCEPT IN SUCH COURT. EACH OF
THE COMPANY, THE EMPLOYER AND THE EXECUTIVE IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE

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LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

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

                                            NETGATEWAY, INC.

                                            By:_________________________________
                                                Name:
                                                Title:

                                            NETGATEWAY

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                            ____________________________________
                                                     Jill Glashow Padwa

                                       11<PAGE>

                           ASSET ACQUISITION AGREEMENT

                                     BETWEEN

                        CASTLE EXPLORATION COMPANY, INC.

                        DEERLICK CREEK PARTNERS, I, L.P.

                                       AND

                              DEVEN RESOURCES, Inc.

                        EFFECTIVE AS OF SEPTEMBER 1, 1999

<PAGE>

         THIS AGREEMENT, dated October ___ 1999, but effective as of September
1, 1999 ("Effective Date"), by and among Deerlick Creek Partners, I, L.P. a
Delaware limited partnership ("DCP"), Deven Resources, Inc., a Pennsylvania
corporation ("DRI"), whose collective address is Suite 615, 983 Old Eagle School
Road, Wayne, Pennsylvania, 19087 (DCP and DRI are sometimes collectively
referred to as the "Seller"), and CASTLE EXPLORATION COMPANY, INC., a Delaware
corporation, whose address is 531 Plymouth Road, Suite 525, Plymouth Meeting,
Pennsylvania 19462 (the "Buyer").

                                   WITNESSETH

         WHEREAS, the DRI owns an undivided interest in certain occluded coalbed
methane leases, Wells Pipelines, Oil and Gas Contracts, desalination ponds and
the equipment used thereon and appurtenant thereto all of which are located in
Tuscaloosa County, Alabama ("Assets"); and

         WHEREAS, DRI is the managing general partner of DCP; and

         WHEREAS, DCP owns a net profits interest in the Assets; and

         WHEREAS, the Seller desires to sell and convey and Buyer desires to
purchase and acquire the Assets, effective as of the Effective Date; and

         WHEREAS, the assets are subject to a "Right of First Refusal" in favor
of DeGas, an Alabama partnership, successor in interest to DeGas, Inc, an
Alabama corporation ("DeGas"), under that certain agreement dated as of August
20, 1982 by and among DeGas and TRW, Inc. predecessor in interest to Seller
("TRW Agreement").

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:

<PAGE>

                             ARTICLE I - DEFINITIONS

      1. The following terms shall have the meanings ascribed to them below when
used in this Agreement:

         1.1. "Agreement", shall mean this Asset Acquisition Agreement.

         1.2. "Assignment" or "Assignments" shall mean those Assignments and
Bills of Sale in substantially in the form of Exhibit "A". The Assignments
shall contain special warranty deed language, conveying the Assets without
warranty, either expressed or implied, except those claiming by, through or
under the Seller, but not otherwise, with full substitution and subrogation all
as more particularly set forth in the Agreement, with all Equipment conveyed "AS
IS" and "WHERE IS" WITHOUT WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR
MERCHANTABILITY.

         1.3. "Closing", shall mean the consummation of the transactions
contemplated by this Agreement.

         1.4. "Closing Date", shall mean the earlier of (i) sixty (60) days
after the submittal of the Agreement to DeGas under Paragraph 16 of the TRW
Agreement or (ii) receipt of DeGas's waiver of its Right of First Refusal, but
in no event shall the Closing Date be later than December 31, 1999.

         1.5. "Effective Date", shall mean 7:01 a.m. local time, September 1,
1999 where the Oil and Gas Properties are located.

         1.6. "Encumbrance", shall mean any mortgage, lien, security interest,
pledge, charge, encumbrance, claim, limitation, irregularity, burden,
hypothecation or defect.

         1.7. "Environmental Condition", shall mean any existing condition of
the soil, subsurface, surface waters, ground waters, atmosphere or other

                                      -2-

<PAGE>

environmental medium, whether or not yet discovered, which could reasonably be
expected to result in any damage, loss, cost, expense, claim, demand,
investigation, lien or liability relating to the Assets under any Environmental
Statute.

         1.8. "Environmental Statute", shall mean the Resource Conservation and
Recovery Act of 1976, as amended prior to the Closing Date, the Clean Air Act,
as amended prior to the Closing Date, the Clean Water Act, as amended prior to
the Closing Date, and the Comprehensive Environmental Response, Compensation and
Liability Act, as amended prior to the Closing Date, and all federal, state, and
other governmental regulations, orders, interpretations or rulings issued
thereunder prior to the Closing Date, and other Legal Requirements relating to
air or water quality, hazardous or solid wastes, hazardous substances or any
other environmental matters.

         1.9. "Execution Date", shall mean October 22, 1999.

         1.10. "Existing Burdens", shall mean Lease Burdens and Permitted
Encumbrances of record as of the Effective Date or of which Buyer has received
written notice as of the Execution Date.

         1.11. "Final Settlement Statement", shall mean that Final Settlement
Statement as provided for in Paragraph 9.8.

         1.12. "Lease Operating Expenses", shall mean any and all costs and
expenses properly charged by the operator of the Assets pursuant to the
applicable operating agreement governing operations on such Assets, to include,
by way of example and not limitation, those charges and costs permitted under
Articles II and III of the COPAS accounting procedure attached to such operating
agreements as an exhibit.

                                      -3-

<PAGE>

         1.13. "Legal Requirements", shall mean any law, statute., ordinance,
decree, requirement, order, judgment, rule or regulation including by way of
example and not limitation the terms of any license, permit, certificate, or
abandonment approval promulgated prior to, or at the time of the Closing Date,
by any governmental authority to include, without limitation, any bonding
requirements of Buyer or other regulatory approval governing the transfer of
operations to Buyer.

         1.14. "Oil and Gas Contracts", shall mean any contracts that affect or
relate to the Oil and Gas Properties or the Production covered thereby including
amendments thereto. "Oil and Gas Contracts" includes, by way of example and not
limitation, area of mutual interest agreements, acreage contribution agreements,
advance payment agreements, bottom hole agreements, division orders, drilling
contracts, dry hole agreements, exploration agreements, farm-in and farm-out
agreements, Gas Balancing Agreements (including claims to recover natural gas
or money under Gas Balancing Agreements for Seller's under production before the
Effective Date), natural gas and oil sales, exchange, treating and processing
contracts, operating agreements, net profits agreements, participation
agreements, storage agreements, support agreements, transfer orders,
transportation agreements, water rights agreements, and salt water disposal
agreements.

         1.15. "Ordinary Course of Business", shall mean the ordinary course of
business and conduct of operations consistent with past custom and practice,
and shall include, without limitation, operations of a kind and nature conducted
in a manner consistent with those of a reasonably prudent operator in the same
or similar circumstances.

                                      -4-

<PAGE>

         1.16. "Permitted Encumbrances", shall mean those Encumbrances as may
exist on the Oil and Gas Properties from time to time in the Ordinary Course of
Business, to include, by way of example and not limitation: liens for Taxes not
yet due and payable, or if due and payable, are being contested in good faith in
the Ordinary Course of Business, inchoate, statutory or operators liens securing
obligations for labor, services, materials and supplies furnished to the Oil and
Gas Properties, but only if such liens are not delinquent and will be discharged
in the Ordinary Course of Business; Encumbrances that arise under Oil and Gas
Contracts of a type and nature customary in the oil and gas industry to secure
the payment of amounts that are not yet delinquent or, if delinquent, are being
contested in good faith in the Ordinary Course of Business; Encumbrances that
arise as a result of unit or communization agreements, Oil and Gas Contracts,
orders and laws. Provided, however, that any Encumbrances placed on the Assets
as a direct result of: (i) an action or inaction taken by Seller based upon the
recommendation of Buyer; or (ii) Buyer's having taken an action which was not
authorized by Seller and which was beyond Buyer's authorized scope of its
management services, shall be deemed a Permitted Encumbrance.

         1.17. "Person", shall mean an individual, group, partnership,
corporation, trust, Limited Liability Company or other entity.

         1.18. "Pipeline", shall mean the gas gathering system located on the
Oil and Gas Properties as well as Seller's interest in the desalination ponds
located on the Oil and Gas Properties.

         1.19. "Production", shall mean all hydrocarbons produced, saved and
sold from the Assets.

                                      -5-

<PAGE>

         1.20. "Taxes", shall mean all ad valorem, severance, and other taxes or
fees levied upon or measured by Production, personal property taxes, real
property taxes, and any and all other taxes or fees of whatever type or kind
assessed or which are attributable to the ownership of the Assets.

         1.21. "Wells", shall mean Seller's interest in those wells set forth on
Schedule 1.21 hereto.

                  ARTICLE II - PURCHASE AND SALE OF THE ASSETS

         2.1. Transfer. Subject to the term of this Agreement, Seller hereby
agrees to sell, transfer, convey and deliver unto the Buyer, and Buyer hereby
agrees to purchase, acquire and accept, all of the Seller's right, title and
interest in and to the Assets, effective as of the Effective Date.

         2.2. Closing. At the closing, subject to the provisions of Article
VII., the Buyer will deliver to Seller the Purchase Price in accordance with
Article III below, on the Closing Date.

         2.3. Assignments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties contained herein, at
Closing, Seller shall convey, transfer, assign and deliver all of the Seller's
right, title and interest in and to the Assets (by executing and delivering one
or more counterparts of the Assignment, together with a description of the
respective Assets attached thereto) to Buyer. The Assignment shall provide for a
Special Warranty of title to the Assets by, through and under the Seller, but
not otherwise.

                                      -6-

<PAGE>

                          ARTICLE III - PURCHASE PRICE

      3. Price. The purchase  price for the Assets (the  "Purchase  Price")
shall be One Million Four Hundred Twenty Four Thousand Two Hundred Ninety Eight
Dollars and forty nine cents ($1,424,298.49).

         3.1.  Manner of Payment. At the Closing, subject to the provisions of
Article VII below, the Buyer will wire transfer to Seller's account the Purchase
Price, less:

               3.1.1. any and all amounts due and owing Pennsylvania Castle
Energy Corporation ("PACEC") by Seller for Lease Operating Expenses prior to the
Effective Date as well as royalty burdens attributable to Production prior to
the Effective Date and which were actually paid by PACEC on behalf of Sellers
for which PACEC has not been repaid as of the Closing Date; and

               3.1.2. an amount equal to the Seller's portion, of the settlement
with Sonat under that contract dated September 4, 1982 estimated to be Eighty
Eight Thousand Dollars ($88,000). The amount withheld for the Seller's Sonat
settlement will be placed in escrow with Seller's counsel and shall be governed
by the terms of an escrow agreement to be entered into between Seller and PACEC.

         3.2.  Allocation of Revenues and Assumption of Liabilities. Subject to
 the terms and provisions hereof, as of the Effective Date:

               3.2.1. Buyer purchases., acquires and assumes the liabilities and
obligations pertaining to the Assets which accrue on and after the Effective
Date (to include by way of example and not limitation, all obligations: (i)
associated with any Environmental Condition; (ii) under the leases which
constitute a portion of the Oil and Gas Properties; (iii) under the Oil and Gas
Contracts; and (iv) other Legal Requirements), as evidenced by the execution of
this Agreement and the execution and

                                      -7-

<PAGE>

acceptance of each Assignment, but excluding however: (x) liabilities and
obligations of Seller pertaining to the Assets, either incurred or accruing
prior to the Effective Date; or, (y) liabilities or obligations arising from a
breach of any the obligations of Seller under this Agreement.

               3.2.2. Seller shall retain and bear the liabilities and
obligations pertaining to Seller's actions pertaining to the Assets, (to
include, by way of example and not limitation: (i) costs of any other contract
or document to which Seller is a party, as of the Effective Date; or (ii)
payments to any third party, to include the Sonat contract through September 4,
1999, other than a lease burden, delay rental or shut in royalty payment) and
arising and/or incurred prior to the Effective Date (whether or not actually
invoiced or billed prior to or subsequent to the Effective Date), excluding
however: (x) liabilities specifically assumed by the Buyer under this Agreement;
and (y) liabilities arising from a breach of any of Buyer's obligations under
this Agreement. It is expressly agreed and understood that the settlement
obligation under the Sonat contract shall be deemed to be a pre-Effective Date
obligation of the Seller.

               3.2.3. Seller shall receive all proceeds of Production
actually sold and delivered before the Effective Date., and Buyer shall receive
all proceeds of Production as of and after the Effective Date.

               3.2.4. Seller shall receive all revenues and benefits
attributable to the Assets relating to the period prior to the Effective Date
and Buyer shall receive all revenues and benefits attributable to the Assets
relating to the period commencing as of the Effective Date.

               3.2.5. Taxes assessed against the Assets shall be pro rated at
the Closing Date as of the Effective Date.

                                      -8-

<PAGE>

               ARTICLE IV - DRI'S REPRESENTATIONS AND WARRANTIES

      4. DRI represents and warrants to Buyer as of the Execution Date and as of
the Closing Date, as follows:

         4.1. Organization. DRI is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and in each jurisdiction where it is required for the conduct of its business.

         4.2. Authority. DRI has all requisite power and authority to carry on
its business as presently conducted, to enter into this Agreement to sell the
assets on the terms described in this Agreement, and to perform its obligations
under this Agreement. Upon the receipt of DeGas's waiver of its Right of First
Refusal or expiration of the period in which DeGas has the right to exercise its
Right of First Refusal, the consummation of the transaction contemplated by this
Agreement will not violate, nor be in conflict with, any provisions of its
Certificate of Incorporation or other governing document of DRI., or any
material agreement or instrument to which DRI is a party or by which DRI or any
of the Assets is bound, or any judgment, decree, order, statute, rule or
regulation applicable to Seller or any of the Assets.

         4.3. Binding Obligation. This Agreement has been duly executed and
delivered on behalf of DRI. All documents and instruments required hereunder to
be executed and delivered to Buyer shall have been duly executed and delivered.
This Agreement does, and such document and instrument will, constitute legal,
binding obligations of the Seller in accordance with their terms.

         4.4. No Breach of Statute, Decree or Contract. The execution, delivery
and performance of this Agreement by DRI does not and will not, after receipt
of DeGas's waiver of its Right of First Refusal or expiration of the period in
which DeGas

                                      -9-

<PAGE>

has the right to exercise its Right of First Refusal, breach any Legal
Requirement, at the Closing conflict with or result in a breach of or default
under any agreement or any order, writ, injunction, decree, contract, agreement
or instrument to which DRI is a party or by which the Assets are or may be
bound, will not result in the creation or imposition of any lien, charge or
encumbrance of any nature upon any of the Assets, and will not give to others
any interest or rights in, or with respect to any of the Assets, except for
Permitted Exceptions.

         4.5. No Litigation or Adverse Events. To the best of DRI's knowledge
there is no suit, claim or action, or legal, administrative, arbitration or
other proceeding, or governmental investigation, pending or, to DRI's knowledge,
threatened, by or against DRI or the Assets, and no event or condition of any
character, to DRI's knowledge, pertaining to DRI or Assets, that could prevent
the consummation of the transactions contemplated by this Agreement.

         4.6. Permitted Encumbrances. To the best of DRI's knowledge, DRI has
not created any Permitted Encumbrances.

         4.7. Taxes. DRI is not aware of any unpaid taxes relating to the
Assets.

         4.8. Title. To the best of Seller's knowledge, the Assignments will
convey to Buyer, subject to Existing Burdens, Seller's right, title and
interests to the Assets. Other than the Existing Burdens, Seller has not created
any liens, claims or Encumbrances affecting the Assets. Seller shall provide a
Special Warranty of title to the assets to Buyer by, through and under Seller,
but not otherwise, with full power of substitution and subrogation.

EXCEPT FOR THE SPECIAL WARRANTIES OF TITLE GIVEN BY SELLER IN THE ASSIGNMENTS,
SELLER DISCLAIMS ANY WARRANTIES EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR

                                      -10-

<PAGE>

FITNESS FOR A PARTICULAR PURPOSE (INCLUDING WARRANTIES WITH RESPECT TO THE
PRESENCE OF ENVIRONMENTAL CONDITIONS OR NATURALLY OCCURRING RADIOACTIVE MATERIAL
AFFECTING SUCH PERSONAL PROPERTY) OF ANY PROPERTY REAL, PERSONAL OR MIXED OR
EQUIPMENT (INCLUDING PIPELINE EQUIPMENT) CONVEYED TO AND ACQUIRED BY BUYER,
WITH ALL SUCH REAL AND PERSONAL PROPERTY AND EQUIPMENT BEING TRANSFERRED,
ASSIGNED, SOLD, PURCHASED, ACCEPTED AND ACQUIRED "AS IS" AND "WHERE IS,'
WITHOUT REPRESENTATION AS TO FITNESS FOR A PARTICULAR PURPOSE.

         4.9.  Status of Leases.

               4.9.1. Working Interests. DRI's Working Interests in the Oil and
Gas Properties is represented on Schedule 1.21.

               4.9.2. Net Revenue Interests. DRI's Net Revenue Interests in the
Oil and Gas Properties is represented on Schedule 1.21.

         4.10. Necessary Action. DRI shall take or cause to be taken all
such actions, as would a prudent businessman under the same or similar
circumstances, as may be necessary and advisable to consummate and make
effective the sale of the Assets contemplated by this Agreement and to assure
that DRI will not be under any material corporate, legal or contractual
restriction that would prohibit or delay the timely consummation of such
transactions; provided, however, that DRI shall not be required to (i) file suit
or assume any additional liabilities in performing its obligations hereunder,
(ii) to perform any title curative, or (iii) take any action prior to the
receipt of DeGas's waiver of its preferential right to purchase.

         4.11. Environmental Claims. To the best of Seller's knowledge there is
Environmental Condition in, on or under any of the Assets. Buyer is the
operator

                                      -11-

<PAGE>

of the Assets and is aware of their condition by virtue of its operation and
inspection of the Assets.

                ARTICLE V - DCP'S REPRESENTATION AND WARRANTIES

      5. DCP represents and warrants to Buyer as of the Execution Date and the
Closing Date as follows:

         5.1.  Organization. DCP is a partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and in
each jurisdiction where it is required for the conduct of its business.

         5.2. Authority. DCP has all requisite power and authority to carry on
its business as presently conducted, to enter into this Agreement to sell the
assets on the terms described in this Agreement, and to perform its obligations
under this Agreement. Upon the receipt of DeGas's waiver of its Right of First
Refusal or expiration of the period in which DeGas has the right to exercise its
Right of First Refusal, the consummation of the transaction contemplated by this
Agreement will not violate, nor be in conflict with., any provisions of its
Partnership Agreement or other governing document of DCP, or any material
agreement or instrument to which DCP is a party or by which DCP or any of the
Assets is bound, or any judgment, decree, order, statute, rule or regulation
applicable to Seller or any of the Assets. DRI as the sole general partner of
DCP is authorized to represent DCP in this Asset Acquisition Agreement.

         5.3. Binding Obligation. This Agreement has been duly executed and
delivered on behalf of DCP. All documents and instruments required hereunder to
be executed and delivered to Buyer shall have been duly executed and delivered.

                                      -12-

<PAGE>

This Agreement does, and such document and instrument will, constitute legal,
binding obligations of the Seller in accordance with their terms.

         5.4. No Breach of Statute. Decree or Contract. The execution, delivery
and performance of this Agreement by DCP does not and will not, after receipt of
DeGas's waiver of its Right of First Refusal or expiration of the period in
which DeGas has the right to exercise its Right of First Refusal, breach any
Legal Requirement, at the Closing conflict with or result in a breach of or
default under any agreement or any order, writ, injunction, decree, contract,
agreement or instrument to which DCP is a party or by which the Assets are or
may be bound, will not result in the creation or imposition of any lien, charge
or encumbrance of any nature upon any of the Assets, and will not give to others
any interest or rights in, or with respect to any of the Assets, except for
Permitted Exceptions.

         5.5. No Litigation or Adverse Events. To the best of DCP'S knowledge
there is no suit, claim or action, or legal, administrative, arbitration or
other proceeding, or governmental investigation, pending or, to DCP's
knowledge, threatened, by or against DCP or the Assets, and no event or
condition of any character, to DCP's knowledge, pertaining to DCP or Assets,
that could prevent the consummation of the transactions contemplated by this
Agreement.

         5.6. Taxes. DCP is not aware of any unpaid taxes relating to the
Assets.

         5.7. Title. To the best of Seller's knowledge, the Assignments will
convey to Buyer, subject to Existing Burdens, all of DCP's right, title and
interest to the Assets without reservations. Other than the Existing Burdens,
Seller has not created any liens, claims or Encumbrances affecting the Assets
Seller shall provide a

                                      -13-

<PAGE>

Special Warranty of title to the Assets to Buyer by, through and under Seller,
but not otherwise, with full power of substitution and subrogation.

EXCEPT FOR THE SPECIAL WARRANTIES OF TITLE GIVEN BY SELLER IN THE ASSIGNMENTS,
SELLER DISCLAIMS ANY WARRANTIES EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
(INCLUDING WARRANTIES WITH RESPECT TO THE PRESENCE OF ENVIRONMENTAL CONDITIONS
OR NATURALLY OCCURRING RADIOACTIVE MATERIAL AFFECTING SUCH PERSONAL PROPERTY) OF
ANY PROPERTY REAL, PERSONAL OR MIXED OR EQUIPMENT (INCLUDING PIPELINE
EQUIPMENT) CONVEYED TO AND ACQUIRED BY BUYER, WITH ALL SUCH REAL AND PERSONAL
PROPERTY AND EQUIPMENT BEING TRANSFERRED, ASSIGNED, SOLD, PURCHASED, ACCEPTED
AND ACQUIRED "AS IS" AND "WHERE IS" WITHOUT REPRESENTATION AS TO FITNESS FOR A
PARTICULAR PURPOSE.

         5.8.  Necessary Action. DCP shall take or cause to be taken all such
actions, as would a prudent businessman under the same or similar circumstances,
as may be necessary and advisable to consummate and make effective the sale of
the Assets contemplated by this Agreement and to assure that DCP will not be
under any material corporate, legal or contractual restriction that would
prohibit or delay the timely consummation of such transactions; provided,
however, that DCP shall not be required to (i) file suit or assume any
additional liabilities in performing its obligations hereunder, (ii) to perform
any title curative, or (iii) take any action prior to the receipt of DeGas's
waiver of its preferential right to purchase.

         5.9.  Permitted Encumbrances. To the best of DCP's knowledge, DCP has
not created any Permitted Encumbrances.

                                      -14-

<PAGE>

         5.10. Net Profits Interest. DCP's net profits interest in the Oil and
Gas Properties is represented on Schedule 1.21.

            ARTICLE VI - THE BUYER'S REPRESENTATIONS AND WARRANTIES

      6. The Buyer represents and warrants to Seller as of the Execution Date
and the Closing Date, as follows:

         6.1. Corporate. The Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the Commonwealth of
Pennsylvania. The Buyer has duly authorized the execution, delivery and
performance of this Agreement by all necessary corporate action, and the same is
a binding obligation of the Buyer, enforceable in accordance with its terms.

         6.2. No Breach of Statute or Contract. The execution, delivery and
performance of this Agreement will not breach any statute or regulation of any
governmental authority, and will not at the Closing conflict with or result in
a breach of or default under any of the terms, conditions, or provisions of the
Buyer's Certificate of Incorporation or by-laws or any order, writ, injunction,
decree, agreement or instrument to which the Buyer is a party or by which it is
or may be bound.

         6.3. Environmental Inspection. Buyer acknowledges that it has had ample
opportunity to inspect the Assets, has actually inspected the Assets and is
aware of their condition and status. In entering into this Agreement, Buyer is
relying exclusively on: (i) its own inspection, due diligence and knowledge of
the Assets; and (ii) that Phase I Environmental Site Assessment dated August 5,
1999 prepared by Highland Technical Services, Inc. and not on any statement or
representation of Seller with respect thereto. As of and subsequent to the
Effective Date, Buyer shall be fully and solely liable for any Environmental
Condition occurring after the Effective Date or

                                      -15-

<PAGE>

environmental claim arising therefrom in respect of the Assets. Buyer
acknowledges that its affiliate PACEC has been the operator of the Assets since
October 1990.

         6.4. Knowledgeable Buyer. Buyer is a knowledgeable purchaser, owner and
operator of oil and gas properties, is familiar with the Assets, has the
ability to evaluate (and in fact has evaluated) the Assets for purchase.

         6.5. Conduct of Due Diligence. Buyer acknowledges that it has been
afforded the opportunity to and has conducted sufficient independent due
diligence concerning the Assets to be purchased. Buyer is acquiring the Assets
based solely on its knowledge of the Assets as operator and the owner of an
undivided working interest in the Assets and its own independent due diligence,
and not based upon any representation, statement or inducement of Seller, or
either of them.

          ARTICLE VII - CONDITIONS TO THE BUYER'S OBLIGATIONS TO CLOSE

      7. The Buyer's obligation to close shall be subject to the satisfaction of
the following conditions prior to or at the Closing, unless waived by the Buyer.

         7.1. Compliance With Agreement. The Seller, and each of them, shall
have performed and complied in all respects with all his obligations under this
Agreement which are to be performed or complied with by it prior to or at the
Closing.

         7.2. Litigation. No litigation or other proceeding shall have been
commenced or threatened against the Buyer or the Seller, which in the sole
opinion of the Buyer would materially and adversely affect its ownership, or the
value, of the Assets.

         7.3. DeGas Waiver. Either Seller shall have received from DeGas a
waiver of DeGas's preferential right to purchase the Assets, or DeGas's sixty
(60) day period in which to evoke its Right to First Refusal shall have expired.

                                      -16-

<PAGE>

         ARTICLE VIII - CONDITIONS TO THE SELLER'S OBLIGATION TO CLOSE

      8. The Seller's obligation to close shall be subject to the satisfaction
of the following conditions prior to or at the Closing, unless waived by the
Seller:

         8.1. Compliance With Agreement. The Buyer shall have performed and
complied in all material respects with all its obligations under this Agreement
which are to be performed or complied with by it prior to or at the Closing.

         8.2. DeGas Waiver. Either Seller shall have received from DeGas a
waiver of DeGas's preferential right to purchase the Assets, or DeGas's sixty
(60) day period in which to evoke its Right to First Refusal shall have expired.

                ARTICLE IX - CLOSING; TERMINATION; POST CLOSING

      9. Closing.

         9.1. Place. The Closing shall take place at such location as mutually
agreed upon by the Buyer and the Seller. Closing may be by facsimile transaction
or in Escrow.

         9.2. Termination. At any time before the Closing, this Agreement may be
terminated: (i) by mutual consent of the parties; (ii) by either the Buyer or
the Seller if there has been a material misrepresentation, material breach of
warranty or material breach of covenant by the other; (iii) by the Buyer if any
condition set forth in Article VII shall not be satisfied at the Closing; or
(iv) by the Seller if any condition set forth in Article VIII shall not be
satisfied at the Closing.

         9.3. Transfer of Assets. Seller will, subject to the provisions of this
Agreement: (i) execute and deliver to Buyer an Assignment satisfying the
requirements

                                      -17-

<PAGE>

of Paragraph 2.3; and (ii) transfer to Buyer all of Seller's right, title and
interest in and to any funds received by Seller after the Effective Date.

         9.4. Taxes. All Taxes shall be pro-rated between Seller and Buyer as of
the Effective Date. Seller shall be charged for all such Taxes based on
ownership of the Assets prior to the Effective Date. Buyer shall be charged for
all such Taxes based on ownership of the Assets from and after the Effective
Date. Buyer shall pay all documentary, filing and recording fees for the
Assignments required in connection with the transaction contemplated by this
Agreement.

         9.5. Purchase Price Allocation. Seller and Buyer recognize that
reporting requirements of Sec. 1060(b) of the Internal Revenue Code, and the
regulations promulgated thereunder, may apply to the transaction contemplated by
this Agreement. If so, Seller and Buyer agree that the Purchase Price shall be
allocated among the assets as mutually agreed by Seller and Buyer to comply with
and satisfy the requirements of Sec. 1060(b) and applicable regulation. Seller
and Buyer agree that no Asset shall be allocated a negative value. The allocated
value of the Assets is set forth on Schedule 9.5.

         9.6. Payment. Buyer shall pay to Seller the Purchase Price pursuant to
Article III.

         9.7. Accounts Receivable and Accounts Payable. All unpaid accounts
receivable and unpaid accounts payable as of the Closing Date shall be handled
in accordance with Paragraphs 3.1 and 3.2 above.

         9.8. Final Settlement Statement. Within sixty (60) days after the
Closing, or as soon as practical thereafter, Buyer shall prepare, in accordance
with this Agreement, the Final Settlement Statement, setting forth any

                                      -18-

<PAGE>

appropriate adjustments or payments not finally determined as of the Closing
Date. Buyer shall submit the Final Settlement Statement to Seller and shall
afford Seller access to Buyer's records pertaining to the computation of the
Final Settlement Statement. Seller shall deliver to Buyer a written report
containing any changes, which Seller proposed, be made to the Final Settlement
Statement. The parties shall employ that degree of effort as would prudent
business persons engaged in on going business relationships to reach agreement
as to the amounts due pursuant to such Final Settlement statement no later than
thirty (30) days after the submission of the Final Settlement Statement to
Seller. The date upon which such agreement is reached shall be called the
"Settlement Date".

               9.8.1. On the Settlement Date, should one party be obligated to
the other by reason of the Final Settlement Statement, the indebted party shall
pay to the other party, in immediately available funds, those monies determined
to be due under the Final Settlement Statement. Until paid, all past due amounts
under this Paragraph 9.8 shall bear interest at the rate of prime plus two
percent, to more, as established by PNC Bank, Pittsburgh, Pennsylvania
(computed based on a 360 day year).

                          ARTICLE X - INDEMNIFICATION

         10.1. Indemnification of the Buyer. DRI and DCP shall indemnify and
hold the Buyer harmless against., and reimburse the Buyer on demand for., all
actual damage, loss, cost or expense (including reasonable attorneys' fees
incurred in defending or settling any claim for such damage, loss, cost or
expense) incurred by the Buyer resulting from any breach of DRI's and DCP's
representations, warranties or covenants in this Agreement, including, but not
by way of limitation, claims arising

                                      -19-

<PAGE>

out of DRI's management of DCP and the distribution of proceeds here from
between DRI and the limited partners of DCP.

         10.2. Indemnification of the Seller. The Buyer shall indemnify and hold
DRI and DCP harmless against, and reimburse DRI and DCP on demand for, all
actual damage, loss, cost or expense (including reasonable attorneys' fees
incurred in defending or settling any claim for such damage, loss, cost or
expense) incurred by the Seller resulting from any breach of the Buyer's
representations, warranties or covenants in this Agreement.

                           ARTICLE XI - MISCELLANEOUS

         11.1. Notices. Any notice, request demand, statement or other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person, or if telegraphed, or
by courier, or mailed by certified mail, return receipt requested, when actually
received, and may be given as follows:

               If to Seller:

               Deven Resources, Inc.
               983 Old Eagle School Road, Suite 615
               Wayne, Pennsylvania 19087

               Attention:  Gary J. Novinskie

               with copies to:

               Ehmann, Van Denbergh & Trainor, PC
               Two Penn Center Plaza, Suite 725
               Philadelphia, Pennsylvania 19102-1707

               Attention:  C. Warren Trainor, Esquire

                                      -20-

<PAGE>

               If to Buyer:

               Castle Exploration Company, Inc.
               531 Plymouth Road, Suite 525
               Plymouth Meeting, Pennsylvania 19402

               Attention:  Richard E. Staedtler

               with copies to:

               Castle Exploration Company, Inc.
               5623 North Western
               Oklahoma City, OK 73118

               Attention:  William C. Liedtke, III, Esq.

Or to such other address as such party may designate by ten (10) days advance
written notice to the other party.

         11.2.  Exclusiveness. This Agreement embodies all of the
representations, warranties and agreements of the parties hereto with respect to
the subject matter hereof, and all prior understandings, representations and
warranties (whether oral or written) with respect to such matters are
superseded. This Agreement may not be amended, modified, waived, discharged or
terminated except by an instrument in writing signed by the party or an
executive officer of a corporate party against whom enforcement of the change,
waiver, discharge or termination is sought.

         11.3.  Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provisions were omitted.

         11.4.  Successors. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.

                                      -21-
<PAGE>

         11.5.  Assignment. This Agreement may not be assigned without the prior
written consent of the other party.

         11.6.  Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.

         11.7.  Neither Party Drafter. The parties hereto agree that this
Agreement is the product of negotiation between the parties that counsel during
its negotiations has represented each and that neither party shall be deemed the
drafter hereof.

         11.8.  Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to conflicts of laws provisions without giving effect to
conflict of laws provisions.

         11.9.  Paragraph Headings. The paragraph headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect any
provision hereof.

         11.10. Costs. Each party agrees to bear its legal, accounting and other
fees incurred in the negotiation of the transaction contemplated hereby, the
conduct of its due diligence and the preparation of the documents addressed
herein.

         11.11. Survival of Provisions. The representations and warranties and
covenants of Seller and Buyer set forth in this Agreement and in any instrument
delivered in connection herewith shall survive the Closing, provided that
neither Seller or Buyer nor any successor to Seller or Buyer may bring any
action or present a claim for a breach of such representations and warranties
unless written notice of such

                                      -22-

<PAGE>

claim with reasonable particulars of the claim has been delivered to Seller or
Buyer within one (1) year after the Closing Date.

         11.12. Exhibits. The Exhibits and Schedules attached hereto, together
with all documents incorporated by reference therein, form an integral part of
this Agreement and are hereby incorporated into this Agreement wherever
reference is made to them to the same extent as if they were set out in full at
the point at which such reference is made.

                                      -23-

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date but effective as of the Effective Date.

Attest:                                CASTLE EXPLORATION COMPANY, INC.

/s/ Susan Pyle                         /s/ Joseph L. Castle II
--------------------------------       -----------------------------------------
    Secretary                          By: Joseph L. Castle II
                                           -------------------------------------
                                       Its:CEO
                                           -------------------------------------

Attest:                                DEVEN RESOURCES, INC.

/s/ Gary J. Novinskie                  By: /s/ David F. Lincoln
--------------------------------           -------------------------------------
    Secretary                                  David F. Lincoln, President

Attest:                                DEERLICK CREEK PARTNERS, I, L.P.
                                       By Deven Resources, Inc.,
                                       Managing General Partner

/s/ Gary J. Novinskie                  By: /s/ David F. Lincoln
--------------------------------           -------------------------------------
    Secretary                                  David F. Lincoln, President

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