Document:

EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT, made and entered as of this 1ST day of JULY,
1999 ("Effective Date"), by and between V-ONE Corporation, a Delaware
corporation with its principal executive offices at 20250 Century Blvd, Suite
300, Germantown, Maryland 20874 ("Company") , and DAVID D. DAWSON, an individual
residing at 119A RECORD STREET FREDERICK, MD 21701 "Employee");

      WHEREAS, the Company wishes to assure itself of the future services of
Employee for the Company, and Employee is willing to serve in the employ of the
Company upon the terms and conditions set forth in this agreement, on a
full-time basis; and

      WHEREAS, the Company and Employee desire to set forth the amounts payable
and benefits to be provided by the Company to Employee in the event of a
termination of Employee's employment with the Company under the circumstances
set forth herein, including after the happening of a Change in Control (as
defined herein); and

      WHEREAS, the Company wishes to secure Executive's noninterference upon the
terms and conditions set forth in this Agreement;

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

      1. EMPLOYMENT. The Company agrees to continue Employee in its employ, and
Employee agrees to remain in the employ of the Company, for the period stated in
Section 3 hereof and upon the other terms and conditions herein provided.

      2. POSITION AND RESPONSIBILITIES.

      The Company employs Employee, and Employee agrees to serve, as PRESIDENT
AND CHIEF EXECUTIVE OFFICER of the Company reporting to the Chief Executive
officer, on the conditions hereinafter set forth. Employee agrees to perform
such services consistent with her position as PRESIDENT AND CHIEF EXECUTIVE
OFFICER as shall from time to time be assigned to her by the Company's Board of
Directors ("Board") or by an executive designated by the Board.

      3.    TERM AND DUTIES.

      (a) TERM. The term of this employment agreement shall commence on NOVEMBER
21, 1997 and terminate on NOVEMBER 21, 1999, subject to automatic renewal for
successive one-year terms unless either party shall have notified the other in
writing not less than 90 days prior to the then current expiration date of this
Agreement of such party's determination not to renew this Agreement.

      (b) The Company shall have the right, on written notice to you,

            (i) to terminate your employment immediately at any time for Just
Cause, as defined in Paragraph 6e.

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            (ii) to terminate your employment at any time on or after NOVEMBER
21, 1997, or to not renew the Agreement at any time, without cause provided the
Company shall be obligated in either case to pay to you severance pay as
specified in Paragraph 7.

      (c) DUTIES. During the period of her employment hereunder by the Company
and except for illness, reasonable vacation periods having an aggregate duration
of not less than that provided pursuant to the Company's practices in effect on
the Effective Date, and reasonable leaves of absence, Employee shall devote her
business time, attention, skill, and efforts as may be reasonably necessary to
the faithful performance of her duties hereunder except as defined in Annex A to
this agreement.

      (d) HEADQUARTERS LOCATION. The Company agrees to maintain Employee's
offices within Montgomery County in the State of Maryland ("Base Employment
Area").

      4. COMPENSATION, STOCK OPTIONS, REIMBURSEMENT OF EXPENSES, AND RELOCATION.

      (a) COMPENSATION. The Company shall pay to you for the services to be
rendered hereunder a base salary at an annual rate of $200,000, subject to
increase, in accordance with the policies of the Company from time to time,
payable in installments in accordance with Company policy, but in no event less
frequently than monthly.

      (i) The Compensation Committee of the Board of Directors will review the
base salary from time to time, no less frequently than annually, and may in its
sole discretion adjust the base salary upward but not downward, to reflect
performance, appropriate industry guideline data and other factors.

            (ii) If certain performance goals reasonably established from time
to time by the Company are met, you will be entitled to a cash performance bonus
of 40% of base salary, with respect to each fiscal year. The amount of such
bonus percentage may be increased but not decreased by the Company. Performance
in excess of 100% of plan objectives will be rewarded at an incrementally higher
percentage. Metrics will also be reasonably established to measure and
compensate appropriately for performance below the plan goals.

      (b) STOCK OPTIONS. You shall also be entitled to all rights and benefits
for which you shall be eligible under deferred bonus, pension, group insurance,
profit-sharing or other Company benefits which may be in force from time to time
and provided for the Company's executives generally.

You have been granted warrants to purchase 300,000 shares and options to
purchase 500,000 shares of V-ONE Corporation Common Stock. The purchase price
per share is $3.125. The option vests over four years at a rate of one-fourth
per year on each of November 21st 1998, 1999, 2000 and 2001. In the event that
the Company should terminate you without cause, then the option for the year in
which such termination occurs shall fully vest and shall be exercisable within
90 days. All unvested options will also immediately vest in full upon the
declaration of an "Change in Control" as set forth in Paragraph 2.06 of the
V-ONE 1996 Incentive Stock Plan.

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The options granted will be ISO's as defined by the Internal Revenue Code to the
maximum extent possible. Options above that limit will issued as non-qualified
stock options

      Unvested warrants/options will expire in the event your employment is
terminated voluntarily by you, or in the event your employment is terminated by
the Company for cause.

      (c) REIMBURSEMENT OF EXPENSES. The Company shall pay or reimburse
Employee, in accordance with such polices and procedures as the Board may
establish from time to time, for all reasonable travel and other expenses
incurred by Employee in the performance of her obligations under this Agreement.

      The Company shall pay for your direct relocation expenses, including the
reasonable and customary cost of moving your household goods and reasonable and
customary closing costs for the sale of your present home and the purchase of a
new home, such as real estate brokers' commissions, together with an additional
amount of cash sufficient to pay any personal income taxes payable as a result
of the Company's payment of your direct relocation expenses. In the interim, the
Company will also provide you a furnished apartment, or suitable living
quarters, in the general vicinity of the Company's corporate headquarters. The
total amount of moving and living expenses associated with your relocation will
be limited to $60,000.

      (d) MEMBER OF THE BOARD OF DIRECTORS. Subject to confirmation by the
present Board of Directors, in accordance with the Charter and Bylaws of the
Company, you will be elected as a director to fill a term expiring at the annual
meeting of shareholders in the year 2000; provided, however that in the event
your employment as CEO should terminate for any reason, you hereby irrevocably
agree to resign as a director effective upon such termination.

      Subject to the provisions of the Company's charter and bylaws, one
directorship (in addition to your own) shall be reserved for election of a
person nominated by you and approved by a majority of the directors, and one
other director agreed upon by you and James F. Chen will be formed to make
recommendations for replacement of members of the Board of Directors during the
first twelve months of your tenure.

      Notwithstanding the foregoing, however, it is understood and agreed that
no action concerning the composition of the Board of Directors shall be taken
except in strict conformity with the charter and bylaws of the Company. It is
further understood that the charter presently provides a vote of at least 67% of
the outstanding shares of the capital stock of the Company entitled to vote
generally in the elections of directors cast at a meeting called for that
purpose.

      5. PARTICIPATION IN BENEFIT PLANS. The payments provided for in this
Agreement, except where specifically provided otherwise, are in addition to any
other benefits to which Employee may be, or may become, entitled under any of
the Company's group hospitalization, health, dental, care, and/or sick-leave
plans; life, other insurance and/or death benefit plans; travel and/or accident
insurance plans; deferred compensation plans; capital accumulation programs;
restricted income and/or stock purchase plans; stock option plans; retirement
income and/or pension plans; supplemental pension plans; excess benefit plans;
short- and long-term disability programs; and other present and future group
employee benefit plans and programs for which Company executives are or shall

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become eligible. Employee shall be eligible to receive, during the period of her
employment under this Agreement and during any subsequent period for which he
shall be entitled to receive payments from the Company under Section 6, all of
the foregoing benefits and emoluments for which employees are eligible under
every such plan and program to the extent permissible under the general terms
and provisions of such plans and programs and in accordance with the provisions
thereof. Nothing contained in this Agreement shall prevent the Board from
amending or otherwise altering any such plan, program, or arrangement as long as
such amendment or alteration equitably affects all the Company's employees of
the level of vice president or above.

      6. TERMINATION OF EMPLOYMENT. Subject to the payments contemplated by
Section 7 Employee's employment under this Agreement may be terminated by the
Company or Employee as follows:

      (a) DISABILITY.

            (i) If Employee fails to perform her duties under this Agreement on
account of Disability (as hereinafter defined), the Company may give notice to
Employee to terminate this Agreement on a date not less than thirty (30) days
thereafter ("Notice Period") and, if Employee has not resumed full performance
of her duties under this Agreement within such Notice Period, then Employee's
employment under this Agreement will terminate on the date provided in the
notice ("Disability Termination Date").

            (ii) As used in this Agreement, the term "Disability" shall mean the
complete inability of Employee to perform her duties under this Agreement by
reason of her total and permanent disability, as determined by an independent
physician selected with the approval of the Board and Employee. The
determination of total and permanent disability will not be made until after all
leave of absence time specified in the Federal Family and Medical Leave Act
("FMLA") has been exhausted.

      (b) DEATH. If Employee dies while employed under this Agreement, her
employment under this Agreement will terminate as of the date of her death
("Date of Death"). Within thirty (30) days after the Date of Death, the Company
shall pay amounts due under this Agreement to the Employee's legal
representative.

      (c) TERMINATION BY EMPLOYEE OR COMPANY. In the event that

            (i) the Company terminates Employee's employment for any reason
other than for "just cause", "material breach" (as hereinafter defined); or

            (ii) Employee terminates her employment with the Company because of
the Company's material breach of this Agreement, or

            (iii) Employee's Base Salary, as in effect on the Effective Date or
as the same may be increased from time to time, is reduced, or there is a
reduction in Employee's authority, perquisites, position, title or
responsibilities; or

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            (iv) The Company's principal executive offices are relocated to a
location outside the Base Employment Area or the Company requires Employee to be
based anywhere other than the Company's principal executive offices or such
other location that is mutually agreed upon between Company and Employee (except
for required travel on the Company's business); or

            (v) The Company undergoes a Change in Control, then:

The Company will pay severance compensation as defined in Paragraph 7 and all
options granted to employee and not yet vested, will vest immediately upon
termination.

No termination of employment pursuant to this Section 6(c) shall operate to
prohibit Employee from negotiating and entering into a new employment contract
with the Company or such entity as survives the Change in Control.

      (d) RETIREMENT. Employee shall be entitled to terminate her employment
with the Company on, or at any date after, a date on which he is at least
sixty-five (65) years old. Any date on which Employee elects to retire shall be
referred to as the "Retirement Termination Date." The Company shall pay to
Employee her Base Salary and Bonus Salary as then in effect that has accrued to
the last day of the month in which the Retirement Termination Date occurs. A11
vested stock options will be exercisable for their originally defined time
period, typically 10 years from date of issue, after retirement.

      (e) TERMINATION BY THE COMPANY FOR JUST CAUSE.

            (i) The Company may terminate Employee's employment for "just cause"
at any time by giving written notice thereof to Employee. (Except as provided
below, the date of such notice is the "Just Cause Termination Date" unless
otherwise provided in the notice). Within thirty (30) days after the Just Cause
Termination Date, the Company shall pay to Employee her Base Salary as then in
effect that has accrued to the Just Cause Termination Date. For the purposes of
this subparagraph, "just cause" shall mean any of the following: (I) Employee's
conviction of any crime or criminal offense involving the unlawful theft or
conversion of substantial monies or other property or any other felony (other
than a criminal offense arising solely under a statutory provision imposing
criminal liability on the Employee on a PER SE basis due to the offices held by
the Employee); or (ii) Employee's conviction of fraud or embezzlement.

            (ii) Notwithstanding the foregoing, Employee shall not be deemed to
have been terminated for just cause pursuant to this Section 6(e) unless and
until he shall have received a copy of a resolution duly adopted by the
affirmative vote of a majority of the Board, at a meeting held for that purpose,
declaring that in the good faith opinion of the Board one or more of the
conditions set forth in clause (i) of this Section 6(e) has occurred and
specifying the particulars thereof, or

      (f) MATERIAL BREACH. shall mean any of the following: (i) Employee's
breach of any of her fiduciary duties to the Company or its stockholders or
making of a willful misrepresentation or omission which breach,
misrepresentation or omission would reasonably by expected to materially

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adversely affect the business, properties, assets, condition (financial or
other) or prospects of the Company; (ii) Employee's willful, continual and
material neglect or failure to discharge her duties, responsibilities or
obligations prescribed by Sections 1, 2 and 3 (other than arising solely due to
physical or mental disability);

      (iii) Employee's habitual drunkenness or substance abuse which materially
interferes with Sections 1, 2 and 3; (iv) Employee's willful, continual and
material breach of any non-competition or confidentiality agreement with the
Company, including without limitation, those set forth in Sections 10 and 11 of
the Agreement; and (v) Employee's gross neglect of her duties and
responsibilities, as determined by the Company's Board of Directors; in each
case, after the Company or the Board of Directors; has provided Employee with 30
days' written notice of such circumstances and the possibility of a Material
Breach, and Employee fails to cure such circumstances and Material Breach with
those 30 days.

      (g) RESIGNATION BY EMPLOYEE. Employee can resign at any time, giving 60
days notice, terminating her employment under this Agreement ("Effective
Resignation Date" ). All Base Salary and Bonus Salary earned through the
Effective Resignation Date including notice period, will be paid to Employee.
All vested stock options will be exercisable for a period of 90 days following
the effective resignation date.

      7. SEVERANCE. If Severance Compensation is triggered under conditions
specified in Paragraph 6, the compensation will include the following.

      (a) the Company shall pay Employee (or her estate or representative)
within ten (10) days following the date her employment with the company is so
terminated ("Employee Termination Date") as severance pay a lump sum payment
equal to the sum of (A) the aggregate amount of the future Base Salary payments
Employee would have received if he continued in the employ of the Company until
twelve (12) months following the Employee Termination Date and (B) Employee's
projected bonus for the twelve months in which the Employee Termination Date
occurs, which shall be computed assuming that Employee had remained in the
Company's employ for the next twelve months and that all performance goals or
other performance measures have been met at the then current level for the time
period. The payment required by clause (A) shall be calculated at the highest
rate of Base Salary paid to Employee at any time under this Agreement with such
payments discounted to present value at a discount rate equal to one percent
(1%) above the per annum one-year Treasury Bill rate, as published in the
Eastern Edition of the Wall Street Journal, on the Employee Termination Date (or
the next preceding date on which such rate is published), applied to each such
future payment from the time it would have become payable to the date Employee
receives payment.

      (b) All vested stock options as specified in Paragraph 4b, including the
options that would vest as part of the termination, would be exercisable within
90 days of such termination, or, if allowable under the Company's stock option
plan, Employee may elect to exchange incentive stock options to non-qualified
stock options and extend the allowable period to exercise such non-qualified
stock options to five years.

<PAGE>

      8. CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence, after the Effective Date, of any of the
following events, directly or indirectly or in one or more series of
transactions:

            (i) A consolidation or merger of the Company with any third party
(which includes a single person or entity or a group of persons or entities
acting in concert) not wholly owned directly or indirectly by the Company (a
"Third Party"), unless the Company is the entity surviving such merger or
consolidation;

            (ii) A transfer of all or substantially all of the assets of the
Company to a Third Party or a complete liquidation or dissolution of the
Company;

            (iii) A Third Party, directly or indirectly, through one or more
subsidiaries or transactions or acting in concert with one or more persons or
entities;

                  (A) acquires beneficial ownership of more than 50% of the
classes of stock of the Company entitled to vote generally in the election of
directors of the Company ("Voting Stock");

                  (B) acquires irrevocable proxies representing more than 50% of
the Voting Stock;

                  (C) acquires any combination of beneficial ownership of Voting
Stock and irrevocable proxies representing more than 50% of the Voting Stock;

                  (D) acquires the ability to directly or indirectly exercise a
controlling influence over the management or policies of the Company;

            (iv) A determination is made by the Securities and Exchange
Commission ("SEC") or any similar agency having regulatory control over the
Company that a change in control, as defined in the securities laws or
regulations then applicable to the Company, has occurred.

Notwithstanding any provision contained herein, a Change in Control shall not
include any of the above described events if they are the result of a Third
Party's inadvertently acquiring beneficial ownership or irrevocable proxies or a
combination of both for 50% or more the Voting Stock, and the Third Party as
promptly as practicable thereafter divests itself of beneficial ownership or
irrevocable proxies for a sufficient number of shares so that the Third Party no
longer has beneficial ownership or irrevocable proxies or a combination of both
for 50% or more of the Voting Stock.

      9. EXCISE TAX.

      (a) EXCESS PARACHUTE PAYMENT. Notwithstanding anything to the contrary in
this Agreement, if tax counsel selected by the Company and acceptable to
Employee determines that any portion of any payment by the Company to Employee
under this Agreement or otherwise would constitute an "excess parachute
payment," then the payments to be made to Employee by the Company shall be

<PAGE>

reduced such that the value of the aggregate payments that Employee is entitled
to receive under this Agreement and any other agreement, plan or program of the
Company shall be one dollar ($1.00) less than the maximum amount of payments
that Employee may receive without becoming subject to the tax imposed by Section
4999 of the Code; PROVIDED, HOWEVER, that the foregoing limitation shall not
apply in the event that such tax counsel determines that the benefits to
Employee on an after-tax basis (i.e., after federal, state, and local income and
excise taxes) if such limitation is not applied would exceed the after-tax
benefits to Employee if such limitation is applied.

      (b) THE COMPANY NOT RESPONSIBLE FOR EXCISE TAX. If the Internal Revenue
Service assesses an excise tax against Employee pursuant to Sections 280G and
4999 of the Code, the Company shall be under no obligation to Employee with
respect to the amount of (i) the excise tax or (ii) any additional federal
income tax due from and payable by Employee as the result of her receipt of any
payment hereunder or otherwise.

      10. COVENANT NOT TO COMPETE. Employee covenants and agrees that, in
consideration of the amounts to be paid Employee hereunder and other good and
valuable consideration, for a period of six (6) months beyond the Effective
Resignation Date, Retirement Termination Date or the Just Cause Termination Date
(each a "Termination Date"), Employee shall not be employed as an executive
officer of, control, manage, or otherwise participate in the management of the
business of a "significant competitor" of the Company. The term "significant
competitor" shall mean any Company or division of a Company that, on the date of
its employment of Employee, derives more than 50% of its gross revenues from
network security products and/or services, or a Company that owns or controls a
majority of the voting securities of any such Company. The Company and Employee
agree that the terms and conditions of this Section 9 shall survive the
termination of this Agreement following the Termination Date.

      11. CONFIDENTIAL INFORMATION.

      (a) Employee shall not, directly or indirectly, during the term of her
employment hereunder and at any time after a termination of her employment for
any reason, to the detriment of the Company, knowingly divulge, disclose,
disseminate, publish, reveal or otherwise communicate to any unauthorized person
any Confidential Information relating to the Company, the Company's subsidiaries
or affiliates, or to any of the businesses operated by any of them.

      (b) Employee confirms that Confidential Information constitutes the
exclusive property of the Company and the Company's subsidiaries and affiliates.
Upon a termination of her employment hereunder, Employee will promptly return to
the Company all Materials (whether prepared by Employee or others) containing,
constituting, embodying or illustrating Confidential Information, and all other
property of the Company or of the Company's subsidiaries and affiliates then in
her possession or custody.

      (c) As used in this Section 10 the following terms shall have the
following meanings:

            (i) the term "Confidential Information" means information disclosed
to Employee or known to Employee as a consequence of or through her employment
by the Company and not generally known in the Company's industry. Such

<PAGE>

information includes, but is not limited to, information relating to the
Company's products, research, development, accounting, finances, marketing,
merchandising and selling, and specifically includes future business plans,
client lists, lists of current and prospective employees and consultants,
potential acquisition candidates, and training and operating methods and
techniques. The term "Confidential Information" does not include information
that (A) at the time it was received by Employee was generally available to the
public; (B) prior to its use by Employee, becomes generally available to the
public through no act or failure of Employee; or (C) is received by Employee
from a person who is not a party to this Agreement and who is not under an
obligation of confidence with respect to such information.

            (ii) "Materials" includes, but is not limited to, books, notebooks,
documents, records, photographs, films, video tapes, audio tape recordings,
computer disks, diskettes or other electronic or optical storage media, software
and support materials, and similar or other materials.

      (d) Employee shall not otherwise knowingly act or conduct himself (i) to
the material detriment of the Company or the Company's subsidiaries or
affiliates, or (ii) in a manner that is inimical or contrary to the interests
thereof.

      (e) The Company and Employee agree that the provisions of this Section 10
shall survive the termination of this Agreement for any reason whatsoever.

      12. GENERAL PROVISIONS.

      (a) ENTIRE AGREEMENT. This Agreement, together with the employment
agreement existing between the parties immediately prior to the Effective Date,
if any, (as amended herein), contains the entire understanding between the
parties hereto with respect to the employment of Employee.

      (b) CONSOLIDATION, MERGER, OR SALE OF ASSETS. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation or
corporations; PROVIDED, HOWEVER, that such consolidation, merger or transfer
shall not affect Employee's rights under Section 6(c) hereof. Upon such a
consolidation, merger, or transfer of assets and assumption, the term "the
Company", as used herein, shall mean such other corporation or corporations, and
this Agreement shall continue in full force and effect and such other
corporation or corporations shall be liable for all payments to Employee under
the Agreement.

      (c) NO DUTY TO MITIGATE. Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall any amounts received from other employment or otherwise
by Employee offset in any manner the obligations of the Company hereunder.

      (d) NONASSIGNABILITY. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof is assignable by
Employee, her beneficiaries, or legal representatives without the Company's
prior written consent; PROVIDED, HOWEVER, that nothing in this Section 12 (d)

<PAGE>

shall preclude (i) Employee from designating a beneficiary to receive any
benefit payable hereunder upon her death or disability, or (ii) the executors,
administrators, or other legal representatives of Employee or her estate from
assigning any rights hereunder to the person or persons entitled thereto.

      (e) NO ATTACHMENT. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or the
execution, attachment, levy, or similar process or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any such action shall be
null, void and of no effect.

      (f) NOTICES. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by certified mail, return
receipt requested, first-class postage prepaid, to the parties to this Agreement
at the following addresses:

            (i) if to the Company at:
                  V-ONE CORPORATION
                  20250 Century Boulevard
                  Suite 300
                  Germantown, Maryland 20874

                  and

            (ii) if to Employee at the address set forth at the end of this
                 Agreement

or to such other address as either party to this Agreement shall have last
designated by notice to the other party. All such notices and communications
shall be deemed to have been received on the earlier of the date of receipt or
the third business day after the date of mailing thereof.

      (h) BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended or shall be construed to give any person, other than the parties to
this Agreement or their respective successors or permitted assigns, any legal or
equitable right, remedy, or claim under or in respect of any agreement or any
provision contained herein.

      (i) DISPUTE RESOLUTION. Subject to (iv) below, any controversy or claim
arising out of or relating to this Agreement or the breach thereof shall be
settled by arbitration in accordance with the then existing Commercial
Arbitration Rules of the American Arbitration Association ("AAA"). A request for
arbitration shall be filed in the AAA office closest to the Company and the
arbitration shall be conducted in Montgomery County, Maryland.

            (ii) The parties irrevocably consent to the jurisdiction of the
Federal and state courts located in the State of Maryland for any purpose
relating to this agreement.

<PAGE>

            (iii) The arbitrator(s) may, in the course of the proceedings,
order any provisional remedy or conservatory measure (including, without
limitation, attachment, preliminary injunction, or the deposit of specified
security) that the arbitrator(s) consider to be necessary, just, and equitable.
The failure of a party to comply with such an interim order may, after due
notice and opportunity to cure such noncompliance, be treated by the
arbitrator(s) as a default, and some or all of the claims or defenses of the
defaulting party may be stricken and partial or final award entered against such
party, or the arbitrator(s) may impose such lesser sanctions as may be deemed
appropriate.  A request for interim or provisional relief by a party to a court
shall not be deemed incompatible with the agreement to arbitrate or a waiver of
that agreement.

            (iv) The parties acknowledge that any remedy at law for breach of
this Agreement may be inadequate, and that, in the event of a breach of Sections
9 and 10 by Employee, any remedy at law would be inadequate in that any such
breach would cause irreparable competitive harm to the Company. Consequently, in
addition to any other relief that may be available, either party may seek
temporary and permanent injunctive relief, including, without limitation,
specific performance, without the necessity of the prevailing party proving
actual damages and without regard to the adequacy of any remedy at law.

            (v) In the event Employee is the prevailing party in any arbitration
or court proceeding, then Employee shall be entitled to reimbursement by the
Company for all reasonable legal and other professional fees and expenses
incurred by Employee in such proceeding or in enforcing any award, including
reasonable attorneys' fees.

      (j) AMENDMENT. This Agreement may be terminated, amended, modified, or
supplemented only by a written instrument executed by Employee and the Company.

      (k) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Maryland, regardless of the law that
might be applied under principles of conflict of laws; PROVIDED, HOWEVER, that
any arbitration under Section 11(i) hereof shall be conducted in accordance with
the United States Arbitration Act as then in force.

      (1) SECTION AND OTHER HEADINGS. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.

      (m) WITHHOLDING OF TAXES. The Company may withhold from amounts required
to be paid to Employee hereunder any applicable federal, state, local, and other
taxes with respect thereto; PROVIDED, HOWEVER, that the Company shall promptly
pay over the amounts so withheld to the appropriate taxing bodies and provide to
executive appropriate statements on forms proscribed for such purposes on the
amounts so withheld.

      (n) SEVERABILITY. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall, to the full
extent consistent with law, continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provisions not held so invalid, and the rest of such

<PAGE>

provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.

      (o) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and Employee has signed this Agreement, all as of the Effective Date.

ATTEST:                             V-ONE CORPORATION

                                    By /s/ Margaret E. Grayson
                                       --------------------------

(Corporate Seal)

WITNESS:                            Employee:  David D. Dawson

 /s/ Lisa M. Albrecht                /s/ David D. Dawson
------------------------            -----------------------------

<PAGE>

                                                                         ANNEX A

Except as stated herein or with the prior written consent of the Company's Board
of Directors, you will not during the term of this Agreement undertake or engage
in any other employment, occupation or business enterprise other than ones in
which you are a passive investor.

Except as permitted by Section 5.3, you will not acquire, assume or participate
in, directly or indirectly, any position, investment or interest adverse or
antagonistic to the Company, its business or prospects, financial or otherwise,
or take any action toward or looking toward any of the foregoing.

During the term of your employment by the Company except on behalf of the
Company or its subsidiaries, you will not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or otherwise become or be interested in any other person,
Corporation, firm, partnership or other entity whatsoever which manufactures,
markets, sells, distributes or provides consulting services concerning products
or services which copete with those of the Company or any of its subsidiaries.
However, nothing in this Section shall preclude you from holding less than ten
percent of the outstanding capital sotkc of any corporation required to file
periodic reports with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, the securities of
which are listed on any Securities exchange, quoted on the National Association
of Securities Dealers Automated Quotation System or traded in the over-the
counter market. During the term of your employment with the Company you will
also not directly or indirectly intentionally solicit, endeavor to entice away
from the Company, or any of its subsidiaries, or otherwise interfere with the
relationship of the Company, or any of its subsidiaries (including but not
limited to, any person who is employed by or otherwise engaged to perform
services for the independent sales representatives or organizations), or any
person or entity who is, or was within the ten most recent 12-month period, a
customer or client of the Company, or any of its subsidiaries, whether for your
own account or for the account of any other person, corporation, firm,
partnership or other entity whatsoever.

You represent and warrant that your employment by the Company will not conflict
with and will not be constrained by any prior employment or consulting agreement
or relationship, you represent and warrant that you do not possess confidential
information arising out of prior employment which, in your best judgment, could
be utilized in connection with your employment by the Company in the absence of
the following paragraph.

If, in spite of the second sentence of the previous paragraph, you should find
that confidential information belonging to any former employer might be usable
in connection with the Company's business, you will not intentionally disclose
to the Company or use on behalf of the Company any confidential information
belonging to any other former employers; but during your employment by the
Company you will use in the performance of your duties all information which is
generally known and used by persons with training and experience comparable to
your own and all information which is common knowledge in the industry or
otherwise legally in the public domain.AMENDMENT NO. 1 TO REVOLVING LOAN AGREEMENT

         This Amendment No. 1 to Revolving Loan Agreement (this "Amendment") is
entered into with reference to the Revolving Loan Agreement dated as of March 2,
1999 (the "Loan Agreement") among Wild Oats Markets, Inc. ("Borrower"), the
Lenders party thereto, and Wells Fargo Bank, National Association, as
Administrative Agent. Capitalized terms used but not defined herein are used
with the meanings set forth for those terms in the Loan Agreement.

         Borrower and the Administrative Agent, acting with the consent of all
of the Lenders pursuant to Section 11.2 of the Loan Agreement, agree as follows:

         1.       Section 1.1.  Section 1.1 of the Loan Agreement is amended by
revising the definitions of "Line A Commitment" and "Line B Commitment" to read
as follows:

                           "Line A Commitment" means, subject to Sections 2.5
                           and 2.6, $90,000,000. The respective Pro Rata Shares
                           of the Lenders with respect to the Line A Commitment
                           are set forth in Schedule 1.1.

                           "Line B Commitment" means, subject to Sections 2.5
                           and 2.6, $30,000,000. The respective Pro Rata Shares
                           of the Lenders with respect to the Line B Commitment
                           are set forth in Schedule 1.1.

         2.       Section 1.1.  Section 1.1 of the Loan Agreement is further
amended by adding the following new definition at the appropriate alphabetical
place:

                           "Reserve Amount" means, as of any date of
                           determination, the amount (if any) by which
                           Indebtedness permitted by Section 6.9(d)(iii) on that
                           date exceeds $5,000,000.

         3.       Schedule 1.1.  Schedule 1.1 to the Loan Agreement is amended
as set forth in Schedule 1.1 attached to this Amendment.

         4.       Section 2.1.  Section 2.1(a) of the Loan Agreement is amended
by striking the first sentence thereof and substituting therefor the following:

                           Subject to the terms and conditions set forth in this
                           Agreement, at any time and from time to time from the
                           Closing Date through the Line A Maturity Date, each
                           Lender shall, pro rata according to that Lender's Pro
                           Rata Share of the then applicable Line A Commitment,
                           make Advances to Borrower under the Line A Commitment
                           in such amounts as Borrower may request that do not
                           result in the sum of (i) the aggregate principal
                           amount outstanding under the Line A Notes plus (ii)
                           the Aggregate Effective Amount of all outstanding
                           Letters of Credit plus (iii) the Swing Line
                           Outstandings plus (iv) the Reserve Amount to exceed
                           the Line A Commitment.

         5.       Section 3.1.  Section 3.1(d) of the Loan Agreement is amended
by striking clause (i) thereof and substituting therefor the following:

                           (i)      The amount, if any, by which the sum of (A)
                                    the principal Indebtedness evidenced by the
                                    Line A Notes plus (B) the Aggregate
                                    Effective Amount of all outstanding Letters
                                    of Credit plus (C) the Swing Line
                                    Outstandings plus (D) the Reserve Amount at
                                    any time exceeds the then applicable Line A
                                    Commitment (including the Line A Commitment
                                    as reduced pursuant to Section 2.5) shall be
                                    payable immediately.

         6.       Section 6.9.  Section 6.9 of the Loan Agreement is amended by
striking Subsection (d) thereof and substituting therefor the following:

                                    (d) Indebtedness of an Acquired Company (i)
                                    that is the subject of an Acquisition made
                                    on or before July 1, 1999 which is secured
                                    solely by a Lien permitted by Section
                                    6.8(e), (ii) that is the subject of an
                                    Acquisition made after July 1, 1999 which is
                                    owed to a Person that is not the seller of
                                    the Acquired Company, or an Affiliate of
                                    such seller, that is secured solely by a
                                    Lien permitted by Section 6.8(e) and (iii)
                                    that is the subject of an Acquisition made
                                    after July 1, 1999 which is owed to the
                                    seller of the Acquired Company, or an
                                    Affiliate of such seller, that is secured
                                    solely by a Lien permitted by Section
                                    6.8(e); provided that the aggregate
                                    principal Indebtedness permitted by this
                                    clause (iii) shall not at any time exceed
                                    $10,000,000.

         7.       Section 8.2.  Section 8.2 of the Loan Agreement is amended by
striking the same in its entirety any substituting therefor the following:

                                    "[Intentionally Deleted"]

         8.       Conditions Precedent.  The effectiveness of this Amendment
shall be conditioned upon:

                  (a)               The receipt by the Administrative Agent of
                                    an amendment fee of $40,000 for the account
                                    of the Lenders according to their Pro Rata
                                    Share, which the Administrative Agent shall
                                    promptly disburse to the Lenders; and

                  (b)               The receipt by the Administrative Agent of
                                    all of the fol-lowing, each properly
                                    executed by an authorized officer of each
                                    party thereto and dated as of the date
                                    hereof:

                                    (i) Counterparts of this Amendment executed
                  by all parties hereto;

                                    (ii)Written consent of all of the Lenders as
                  required under Section 11.2 of the Loan Agreement in the form
                  of Exhibit A to this Amendment;

                                    (iii)Written consent of the Subsidiary
                  Guarantors in the form of Exhibit B to this Amendment;

                                    (iv)Replacement Line A Notes and Line B
               Notes for each Lender in the new amount of its Pro Rata Share of
               the Line A Commitment and Line B Commitment, respectively,
               (against delivery by such Lenders of the existing Line A Notes
               and Line B Notes);

                                    (v)A copy of the resolution of the Board of
               Directors of Borrower authorizing the increases in the Line A
               Commitment and Line B Commitment, certified by a Senior Officer;
               and

                                    (vi)the written opinion of Freya R. Brier,
               Esq. with respect to the due corporate authorization by Borrower
               of the increase in the Line A Commitment and Line B Commitment
               and confirming such aspects of the Opinion of Counsel as the
               Administrative Agent reasonably requests, in form and substance
               acceptable to the Administrative Agent.

         9.       Representation and Warranty.  Borrower represents and warrants
that no Default or Event of Default has occurred and remains continuing.

         10.      Confirmation.  In all other respects, the terms of the Loan
Agreement and the other Loan Documents are hereby confirmed.

         IN WITNESS WHEREOF, Borrower and the Administrative Agent have executed
this Amendment as of July ___, 1999 by their duly authorized representatives.

WILD OATS MARKETS, INC.

By:By _________________________________
       Mary Beth Lewis
          Chief Financial Officer

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent

By  _________________________________
Tracey Hanson
Vice President

                             Exhibit A to Amendment

                                CONSENT OF LENDER

Reference is hereby made to that certain Revolving Loan Agreement dated as of
March 2, 1999 (the "Loan Agreement") among Wild Oats Markets, Inc. ("Borrower"),
the Lenders party thereto and Wells Fargo Bank, National Association, as
Administrative Agent. Capitalized terms used but not defined herein are used
with the meanings set forth for those terms in the Loan Agreement.

         The undersigned Lender hereby consents to the execution and delivery of
Amendment No. 1 to Revolving Loan Agreement by the Administrative Agent on its
behalf, substantially in the form of the most recent draft presented to the
undersigned Lender.

         Date: July ___, 1999

-------------------------------------
[Name of Institution]

By ___________________________________

--------------------------------------
       [Printed Name and Title]

                             Exhibit B to Amendment

                        CONSENT OF SUBSIDIARY GUARANTORS

Reference is hereby made to that certain Revolving Loan Agreement dated as of
March 2, 1999 among Wild Oats Markets, Inc. ("Borrower"), the Lenders party
thereto, and Wells Fargo Bank, National Association, as Administrative Agent
(the "Loan Agreement").

         Each of the undersigned Subsidiary Guarantors hereby consents to
Amendment No. 1 to the Loan Agreement in the form executed by Borrower and
confirms that the Subsidiary Guaranty to which it is a party remain in full
force and effect.

Dated: July ___, 1999

<PAGE>

"Guarantors"

WILD OATS MARKETS CANADA, INC.

By:___________________________

--------------------------------
      [Printed name and title]

ALFALFA'S CANADA, INC.

By:_____________________________

--------------------------------
      [Printed name and title]

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