PREDICTIVE SYSTEMS INC
EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>b321356_ex10-4.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>

                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT


         This Employment Agreement (the "Agreement"), made and entered into this
11th day of November, 2002, by and between Predictive Systems, Inc., a Delaware
corporation with principal offices located at 19 West 44th Street, New York, NY
10036 (the "Company"), and Gary Papilsky (the "Executive").

                                   WITNESSETH

         WHEREAS, the Company has a need for the Executive's personal services
in an executive capacity; and

         WHEREAS, the Executive possesses the necessary strategic, financial,
planning, operational and managerial skills necessary to fulfill those needs;
and

         WHEREAS, the Executive and the Company desire to enter into a formal
Employment Agreement to fully recognize the contributions of Executive to the
Company and to assure continuous harmonious performance of the affairs of the
Company.

         NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions, and conditions contained herein, the parties agree as follows:

1.       Position.

         (a) The Company hereby agrees to employ the Executive to serve in the
role of Executive Vice President and General Counsel of the Company, subject to
the limitation set forth herein. The Executive accepts such employment upon the
terms and conditions set forth herein, and further agrees to perform to the best
of his/her abilities the duties generally associated with his/her position, as
well as such other duties commensurate with his/her position as Executive Vice
President and General Counsel as may be reasonably assigned by the Company. The
Executive shall, at all times during the Term, report directly to either the CEO
or an executive who reports directly to the CEO. The Executive shall perform
his/her duties diligently and faithfully and shall devote his/her full business
time and attention to such duties , provided however, that nothing herein shall
preclude the Executive from (i) serving on the boards of directors of a
reasonable number of other corporations with the prior written approval of the
CEO (which approval shall not be unreasonably withheld), (ii) serving on the
boards of a reasonable number of trade associations and/or charitable
organizations, (iii) engaging in charitable activities and community affairs and
(iv) managing his/her personal investments and affairs, provided that such
activities do not conflict or interfere with the effective discharge of his/her
duties and responsibilities under this Agreement, or otherwise violate any of
the terms of this Agreement.

2.       Term of Employment and Renewal.

         The term of Executive's employment under this Agreement will commence
on the date of this Agreement (the "Effective Date"). Subject to the provisions
of Section 10 of this Agreement, the term of Executive's employment hereunder
shall be for an initial term of three (3) years from the Effective Date (the
"Initial Term"). The Initial Term of this Agreement shall be automatically
extended for successive one (1) year periods (each a "Renewal Period") unless
the Company or the Executive gives written notice to the other at least six (6)
months prior to the expiration of the Initial Term, or a Renewal Period, of such
party's election not to extend this Agreement. References herein to the "Term"
shall mean the Initial Term as it may be so extended by one or more Renewal
Periods. The last day of the Term is the "Expiration Date."


<PAGE>

3.       Compensation and Benefits.

         (a) Salary. Commencing on the Effective Date, the Company agrees to pay
the Executive a base salary at an annual rate of one hundred sixty six thousand
two hundred fifty Dollars ($166,250) for through the first calendar year of the
Term, payable in such installments as is the policy of the Company (the
"Salary"), but no less frequently than monthly. Thereafter, the Board shall
determine appropriate increases to Executive's Salary on an annual basis, but in
no event shall diminish the amount of Executive's Salary below the initial rate,
or below the increased rates.

         (b) Bonus. The Executive shall be eligible to receive annual bonuses
(the "Annual Bonus") at the sole discretion of the Company in an amount of up to
60% of the Salary. The Company, in its sole discretion, may pay an additional
bonus (a "Stretch Bonus") in the event of extraordinary performance by the
Executive and the Company. Such Annual Bonus and Stretch Bonus, if any, shall be
paid out no later than sixty (60) days after the end of each calendar year.

         (c) Benefits. The Executive shall be entitled to participate in all
employee benefit plans which the Company provides or may establish from time to
time for the benefit of its employees, including, without limitation, group
life, medical, surgical, dental and other health insurance, short and long-term
disability, deferred compensation, profit-sharing and similar plans. Nothing
herein shall obligate the Company to provide any particular employee benefit to
its employees during the Term. The Executive shall also be entitled to paid
vacation of twenty (20) days per year, in accordance with the Company's vacation
policy.

         (d) Other Long-Term Incentives. The Executive shall be eligible to
participate in any ongoing long-term incentive programs of the Company subject
to the terms and conditions of such programs.

         (e) Perquisites. The Executive shall be entitled to perquisites on the
same basis as provided to other senior-level executives of the Company from time
to time.

         (f) Expenses. The Company shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred by him/her during the Term
in performing services hereunder, provided that the Executive properly accounts
for such expenses in accordance with the Company's policies.

4.       Confidentiality, Disclosure of Information.

         (a) The Executive recognizes and acknowledges that the Executive has
had and will have access to Confidential Information (as defined below) relating
to the business or interests of the Company or of persons with whom the Company
may have business relationships. Except as permitted herein, the Executive will
not during the Term, or at any time thereafter, use, disclose or permit to be
known by any other person or entity, any Confidential Information of the Company
(except as required by applicable law or in connection with the performance of
the Executive's duties and responsibilities hereunder). The term "Confidential
Information" means information relating to the Company's business affairs,
proprietary technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, employment agreements (other than this
Agreement), personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists, commercial
arrangements, or any other information relating to the Company's business that
is not generally known to the public or to actual or potential competitors of
the Company (other than through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly available,
other than pursuant to a breach of this Section 4 by the Executive, regardless
of whether the Executive continues to be employed by the Company.

                                       2
<PAGE>

         (b) It is further agreed and understood by and between the parties to
this Agreement that all "Company Materials," which include, but are not limited
to, computers, computer software, computer disks, tapes, printouts, source, HTML
and other code, flowcharts, schematics, designs, graphics, drawings,
photographs, charts, graphs, notebooks, customer lists, sound recordings, other
tangible or intangible manifestation of content, and all other documents whether
printed, typewritten, handwritten, electronic, or stored on computer disks,
tapes, hard drives, or any other tangible medium, as well as samples,
prototypes, models, products and the like, shall be the exclusive property of
the Company and, upon termination of Executive's employment with the Company,
and/or upon the request of the Company, all Company Materials, including copies
thereof, as well as all other Company property then in the Executive's
possession or control, shall be returned to and left with the Company.

5.       Inventions Discovered by Executive.

         The Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable or copyrightable (collectively,
"Inventions"), conceived or first reduced to practice by the Executive, either
alone or jointly with others, while performing services hereunder (or, if based
on any Confidential Information, at any time during or after the Term), (a)
which pertain to any line of business activity of the Company, whether then
conducted or then being actively planned by the Company, with which the
Executive was or is involved, (b) which is developed using time, material or
facilities of the Company, whether or not during working hours or on the Company
premises, or (c) which directly relates to any of the Executive's work during
the Term, whether or not during normal working hours. The Executive hereby
assigns to the Company all of the Executive's right, title and interest in and
to any such Inventions. During and after the Term, the Executive shall execute
any documents necessary to perfect the assignment of such Inventions to the
Company and to enable the Company to apply for, obtain and enforce patents,
trademarks and copyrights in any and all countries on such Inventions,
including, without limitation, the execution of any instruments and the giving
of evidence and testimony, without further compensation beyond the Executive's
agreed compensation during the course of the Executive's employment. Without
limiting the foregoing, the Executive further acknowledges that all original
works of authorship by the Executive, whether created alone or jointly with
others, related to the Executive's employment with the Company and which are
protectable by copyright, are "works made for hire" within the meaning of the
United States Copyright Act, 17 U.S.C. ss. 101, as amended, and the copyright of
which shall be owned solely, completely and exclusively by the Company. If any
Invention is considered to be work not included in the categories of work
covered by the United States Copyright Act, 17 U.S.C. ss. 101, as amended, such
work is hereby assigned or transferred completely and exclusively to the
Company. The Executive hereby irrevocably designates counsel to the Company as
the Executive's agent and attorney-in-fact to do all lawful acts necessary to
apply for and obtain patents and copyrights and to enforce the Company's rights
under this Section. This Section 5 shall survive the termination of this
Agreement. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be
known as or referred to as "moral rights" (collectively "Moral Rights"). To the
extent such Moral Rights cannot be assigned under applicable law and to the
extent the following is allowed by the laws in the various countries where Moral
Rights exist, the Executive hereby waives such Moral Rights and consents to any
action of the Company that would violate such Moral Rights in the absence of
such consent. The Executive agrees to confirm any such waivers and consents from
time to time as requested by the Company.

                                       3
<PAGE>

6.       Non-Competition and Non-Solicitation.

         The Executive acknowledges that the Company has invested substantial
time, money and resources in the development and retention of its Inventions,
Confidential Information (including trade secrets), customers, accounts and
business partners, and further acknowledges that during the course of the
Executive's employment with the Company the Executive has had and will have
access to the Company's Inventions and Confidential Information (including trade
secrets), and will be introduced to existing and prospective customers, accounts
and business partners of the Company. The Executive acknowledges and agrees that
any and all "goodwill" associated with any existing or prospective customer,
account or business partner belongs exclusively to the Company, including, but
not limited to, any goodwill created as a result of direct or indirect contacts
or relationships between the Executive and any existing or prospective
customers, accounts or business partners. Additionally, the parties acknowledge
and agree that Executive possesses skills that are special, unique or
extraordinary and that the value of the Company depends upon his/her use of such
skills on its behalf.

         In recognition of this, the Executive covenants and agrees that:

         (a) During the Term, and for a period of six (6) months thereafter, the
Executive may not, without the prior written consent of the Board, (whether as
an employee, agent, servant, owner, partner, consultant, independent contractor,
representative, stockholder or in any other capacity whatsoever) participate in
any business that offers products or services competitive in any way to those
offered by the Company or that were under active development by the Company
during the Term, provided that nothing herein shall prohibit the Executive from
(i) owning securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount which
shall not exceed 3% of the outstanding shares of an such corporation or (ii)
after termination of his/her employment (x) participating in the business of a
separately managed and operated division, subsidiary or affiliate of a
Competitor, provided that such division, subsidiary or affiliate does not offer
Competitive Services and the Executive has no business communications with
employees of any division, subsidiary or affiliate of the Competitor that offers
Competitive Services regarding the business of the competitive division,
subsidiary or affiliate or (y) becoming affiliated with an entity that is not a
Competitor but that is subsequently acquired by or merged with a Competitor,
provided that, following such acquisition or merger, s/he is participating in
the business of a separately managed and operated division, subsidiary or
affiliate of the Competitor that does not offer Competitive Services and s/he
has no business communications with employees of any division, subsidiary or
affiliate of the Competitor that offers Competitive Services regarding the
business of the competitive division, subsidiary or affiliate.

                                       4
<PAGE>

         (b) During the Term, and for a period of one (1) year thereafter, the
Executive may not entice, solicit or encourage any Company employee to leave the
employ of the Company or any independent contractor to sever its engagement with
the Company, absent prior written consent to do so from the Company.

         (c) During the Term, and for a period of one (1) year thereafter, the
Executive may not, directly or indirectly, entice, solicit or encourage any
customer, prospective customer, vendor, strategic partner or business associate
of the Company to cease doing business with the Company, reduce its relationship
with the Company or refrain from establishing or expanding a relationship with
the Company.

7.       Non-Disparagement.

         (a) The Executive hereby agrees that during the Term, and at all times
thereafter, the Executive will not intentionally make any public statement that
is disparaging about the Company or any of its officers or directors, including,
but not limited to, any public statement that disparages the products, services,
finances, financial condition, capabilities or other aspect of the business of
the Company.

         (b) The Company hereby agrees that during the Term, and at all times
thereafter, its officers and directors will not intentionally make any public
statement that is disparaging about the Executive, including, but not limited
to, any statement that disparages the services, capabilities, performance or any
other aspect of the Executive's relationship with the Company.

         (c) This Section 7 shall not prevent any person or entity subject to it
from responding publicly to incorrect or disparaging public statements made in
violation of this Section 7 to the extent reasonably necessary to correct or
refute such public statements or from making truthful statements when necessary
to enforce this Agreement or required by applicable law, by a court of law or an
arbitrator, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with jurisdiction to do so.

8.       Provisions Necessary and Reasonable.

         (a) The Executive agrees that (i) the provisions of Sections 4, 5, 6
and 7 of this Agreement are necessary and reasonable to protect the Company's
Confidential Information, Inventions, and goodwill; (ii) the specific temporal,
geographic and substantive provisions set forth in Section 6 of this Agreement
are reasonable and necessary to protect the Company's business interests in part
because the Company's business is international in scope; and (iii) in the event
of any breach of any of the covenants set forth herein, the Company would suffer
substantial irreparable harm and would not have an adequate remedy at law for
such breach. In recognition of the foregoing, the Executive agrees that in the
event of a breach or threatened breach of any of these covenants, in addition to
such other remedies as the Company may have at law, without posting any bond or
security, the Company shall be entitled to seek and obtain equitable relief, in
the form of specific performance, and/or temporary, preliminary or permanent
injunctive relief, or any other equitable remedy which then may be available.
The seeking of such injunction or order shall not affect the Company's right to
seek and obtain damages or other equitable relief on account of any such actual
or threatened breach.

                                       5
<PAGE>

         (b) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof,
or any part thereof, are hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect without regard to the invalid portions.

         (c) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof,
or any part thereof, are held to be unenforceable by a court of competent
jurisdiction because of the temporal or geographic scope of such provision or
the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or geographic area
of such provision and, in its reduced form, such provision shall be enforceable.

9.       Representations Regarding Prior Work and Legal Obligations.

         (a) The Executive represents that the Executive has no agreement or
other legal obligation with any prior employer, or any other person or entity,
that restricts the Executive's ability to accept employment with, or to perform
any function for, the Company.

         (b) The Executive has been advised by the Company that at no time
should the Executive divulge to or use for the benefit of the Company any trade
secret or confidential or proprietary information of any previous employer. The
Executive expressly acknowledges that the Executive has not to the best of
his/her knowledge divulged or used any such information for the benefit of the
Company.

         (c) The Executive acknowledges that the Executive has not and will not
knowingly misappropriate any Invention that the Executive played any part in
creating while working for any former employer.

         (d) The Executive acknowledges that the Company is basing important
business decisions on these representations, and affirms that all of the
statements included herein are true to the best of his/her knowledge.

10.      Termination and Severance.

         Notwithstanding the provisions of Section 2 of this Agreement, the
Executive's employment hereunder may terminate under the following
circumstances:

                                       6
<PAGE>

         (a) Termination by the Company for Cause. The Company may terminate
this Agreement for Cause at any time, upon written notice to the Executive
setting forth in reasonable detail the nature of such Cause. For purposes of
this Agreement, Cause is defined as (i) the Executive's willful and material
breach of the terms of this Agreement; (ii) the Executive's commission of any
felony or any crime involving moral turpitude; (iii) gross negligence or willful
misconduct by the Executive in connection with his/her position hereunder; or
(iv) the Executive's willful refusal to perform his/her duties hereunder. Upon
the termination for Cause of Executive's employment, the Company shall have no
further obligation or liability to the Executive other than for salary earned
under this Agreement prior to the date of termination, and any accrued but
unused vacation.

         (b) Termination by the Company Without Cause. The Executive's
employment hereunder may be terminated without Cause by the Company upon written
notice to the Executive, provided, however, that if the Company terminates the
Executive's employment without Cause, or the Executive terminates his/her
employment for Good Reason, as defined below, the Executive shall be entitled
to: (i) Salary through the date of termination; (ii) a lump sum payment equal to
Salary for a period of 6 months, at the annualized rate in effect on the date of
termination; (iii) the Executive shall be permitted to exercise all of
Executive's vested stock options up to two (2) years after the effective date of
the termination; (iv) continuation of health coverage for the Executive and any
eligible dependents covered as of the effective date of the termination,
pursuant to COBRA, at the Company's expense for a period of 6 months; and (v) in
the event of termination occurring in the months of July through December of any
given calendar year, the pro rata amount of the Annual Bonus for that year. As a
condition of receiving severance benefits pursuant to this Section 10(b), the
Executive shall execute and deliver to the Company prior to his/her receipt of
such benefits a general release substantially in the form attached hereto as
Exhibit A.

         (c) Termination by the Executive. The Executive may terminate his/her
employment hereunder upon two (2) weeks written notice to the Company. In the
event of termination by the Executive pursuant to this subsection 10(c), the
Company may elect to pay the Executive during the notice period (or for any
remaining portion of that period) the Salary and benefits at the rate of
compensation the Executive was receiving immediately before such notice of
termination was tendered in lieu of actual notice. The Executive may also
terminate his/her employment hereunder for "Good Reason," within thirty (30)
days of the occurrence of any of the following events (i) a material breach of
this Agreement by the Company; (ii) a change in the Executive's reporting
relationship so that s/he no longer reports directly to either the CEO or an
executive who reports directly to the CEO; (iii) a relocation of the Executive's
worksite to a location 25 miles or more from its current location; or (iv) the
failure of the Company to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Company within a reasonable period after a merger, consolidation,
sale or similar transaction. The Executive shall give the Company twenty (20)
days' written notice and opportunity to cure prior to any termination for Good
Reason.

         (d) Death. In the event of the Executive's death during the Term of
this Agreement, the Executive's employment hereunder shall immediately and
automatically terminate, and the Company shall have no further obligation or
duty to the Executive or his/her estate or beneficiaries other than for the
Salary earned under this Agreement to the date of termination and any payments
or benefits due under Company policies or benefit plans.


                                       7
<PAGE>

         (e) Disability. The Company may terminate the Executive's employment
hereunder, upon written notice to the Executive, in the event that the Executive
becomes disabled during the Term through any condition of either a physical or
psychological nature and, as a result, is, with or without reasonable
accommodation, unable to perform the essential functions of the services
contemplated hereunder for (a) a period of ninety (90) consecutive days, or (b)
for shorter periods aggregating one hundred twenty (120) days during any twelve
(12) month period during the Term. Any such termination shall become effective
upon mailing or hand delivery of notice that the Company has elected its right
to terminate under this subsection 10(e), and the Company shall have no further
obligation or duty to the Executive other than for salary earned under this
Agreement prior to the date of termination and any payments or benefits due
under Company policies or benefit plans.

         (f) Effect of Non-Renewal. In the event that the Company gives notice
of its election not to extend the Term of the Agreement for a Renewal Period
pursuant to Section 2 above, the Company shall continue to pay the Executive
full compensation as defined in Section 3 of this Agreement from the date the
Executive receives such notice through the Expiration Date. The Executive shall
not be entitled to any additional compensation other than any payments or
benefits due under Company policies or benefit plans.

         (g) Change of Control. In the event a Change in Control or Hostile
Takeover, as defined in the Company's 1999 Stock Incentive Plan (collectively a
"Change of Control"), occurs, fifty percent (50%) of any unvested stock options
granted to the Executive shall accelerate and vest in full immediately prior to
the Change of Control, provided the Executive remains employed by the Company on
the date of such Change of Control. If (i) the Executive is terminated other
than for Cause, Disability or death, or (ii) s/he terminates her/his employment
for Good Reason, within 60 days prior to the announcement of a Change of Control
or within twelve (12) months from the effective date of the Change of Control,
(x) all unvested stock options granted to the Executive shall accelerate and
vest in full, and (y) Executive shall receive a lump sum payment equal to Salary
for a period of 3 months, at the annualized rate in effect on the date of
termination. Such payments shall be in addition to any payment owed pursuant to
paragraph (b) of this Section 10.

11.      Choice of Law.

         The Executive acknowledges that a substantial portion of the Company's
business is based out of and directed from the State of New York. The Executive
also acknowledges that during the course of the Executive's employment with the
Company the Executive will have substantial contacts with New York.

         The validity, interpretation and performance of this Agreement shall be
governed by, and construed in accordance with, the internal law of New York,
without giving effect to conflict of law principles. Both parties agree that the
exclusive venue for any action, demand, claim or counterclaim relating to the
terms and provisions of Sections 4, 5, 6 and 7 of this Agreement, or to their
breach, shall be in the state or federal courts located in the State and County
of New York and that such courts shall have personal jurisdiction over the
parties to this Agreement.


                                       8
<PAGE>

12.      Miscellaneous.

         (a) Assignment. The Executive acknowledges and agrees that the rights
and obligations of the Company under this Agreement may be assigned by the
Company to any successors in interest. The Executive further acknowledges and
agrees that this Agreement is personal to the Executive and that the Executive
may not assign any rights or obligations hereunder.

         (b) Withholding. All salary and bonus payments required to be made by
the Company to the Executive under this Agreement shall be subject to
withholding taxes, social security and other payroll deductions in accordance
with the Company's policies applicable to employees of the Company at the
Executive's level.

         (c) Entire Agreement. This Agreement sets forth the entire agreement
between the parties and supersedes any prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.

         (d) Amendments. Any attempted modification of this Agreement will not
be effective unless signed by an officer of the Company and the Executive.

(e) Waiver of Breach. The Executive understands that a breach of any provision
of this Agreement may only be waived by an officer of the Company. The waiver by
the Company of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.

         (f) Severability. If any provision of this Agreement should, for any
reason, be held invalid or unenforceable in any respect by a court of competent
jurisdiction, then the remainder of this Agreement, and the application of such
provision in circumstances other than those as to which it is so declared
invalid or unenforceable, shall not be affected thereby, and each such provision
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

         (g) Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered by private messenger, private overnight mail service, or facsimile as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):

                  If to the Company:

                  Predictive Systems, Inc.
                  19 West 44th Street
                  New York, New York 10036
                  Fax number:  212.898.1331
                  Attn:  General Counsel


                                       9
<PAGE>

                  If to Executive:

                  To such home address as the Executive shall provide to the
Company

         (h) Survival. The Executive and the Company agree that certain
provisions of this Agreement shall survive the expiration or termination of this
Agreement and the termination of the Executive's employment with the Company.
Such provisions shall be limited to those within this Agreement which, by their
express and implied terms, obligate either party to perform beyond the
termination of the Executive's employment or termination of this Agreement.

         (i) Disclosure and Confidentiality. The Executive agrees to provide,
and agrees that the Company similarly may provide in its discretion, a copy of
the covenants contained in this Agreement to any business or enterprise which
the Company may directly or indirectly own, manage, operate, finance, join,
control or in which the Company participates in the ownership, management,
operation, financing or control, or with which the Company may be connected or
may become connected as an officer, director, executive, partner, principal,
agent, representative, consultant or otherwise. The Executive also agrees that
the Company may disclose a copy of this Agreement if legally required to do so,
and in connection with a partnering transaction or financing, assuming that an
appropriate confidentiality agreement is in place. The Executive further agrees
not to disclose the existence or terms of this Agreement to any person other
than the Executive's immediate family and legal, financial or accounting
professional.

         (j) Arbitration of Disputes. Any controversy or claim arising out of
this Agreement or any aspect of the Executive's relationship with the Company
including the cessation thereof (other than disputes with respect to alleged
violations of the covenants contained in Sections 4, 5, 6 or 7 hereof, and the
Company's pursuit of the remedies described in Section 8 hereof in connection
therewith) shall be resolved by arbitration in accordance with the then existing
Employment Dispute Resolution Rules of the American Arbitration Association, in
New York, New York, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. The Company shall pay the filing fees and
arbitrator's fees and parties shall split equally the costs of arbitration,
except that each party shall pay its own attorneys' fees. The parties agree that
the award of the arbitrator shall be final and binding.

         (k) Rights of Other Individuals. This Agreement confers rights solely
on the Executive and the Company. This Agreement is not a benefit plan and
confers no rights on any individual or entity other than the undersigned.

         (l) Headings. The parties acknowledge that the headings in this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction of this Agreement.

         (m) Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
the Executive may qualify by the express terms of such benefit, bonus, incentive
or other plan or program, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any other written agreements with
the Company or any of its affiliated companies which are signed by an authorized
officer of the Company.

                                       10
<PAGE>

         (n) No Mitigation; No Offset. In the event of any termination of
his/her employment hereunder, the Executive shall be under no obligation to seek
other employment nor shall any amounts due him/her pursuant to Section 10(b) be
offset by any other compensation received by the Executive.

         (o) Advice of Counsel. The Executive and the Company hereby acknowledge
that each party has had adequate opportunity to review this Agreement, to obtain
the advice of counsel with respect to this Agreement, and to reflect upon and
consider the terms and conditions of this Agreement. The parties further
acknowledge that each party fully understands the terms of this Agreement and
has voluntarily executed this Agreement.



                                       11
<PAGE>




IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
day and year set forth below.

EXECUTIVE                                      PREDICTIVE SYSTEMS, INC.


   /s/ Gary Papilsky                           By:      /s/ Andrew Zimmerman
----------------------------                         --------------------------
GARY PAPILSKY                                  Title:   CEO
                                                     --------------------------


                                       12
<PAGE>




                                    EXHIBIT A

                              SEPARATION AGREEMENT
                               AND GENERAL RELEASE

         This Separation Agreement and General Release ("Agreement") is made and
entered into this ____ day of _____, _____, by and between [COMPANY NAME]
(hereinafter the "Company" or "Employer") and [EMPLOYEE NAME] ("Employee")
(hereinafter collectively referred to as the "Parties"), and is made and entered
into with reference to the following facts.

                                    RECITALS

         WHEREAS, Employee was hired by the Company on or about ________, as a
____________; and

         WHEREAS, the Company and Employee have agreed to terminate their
employment relationship effective ______, ____; and

         WHEREAS, the Parties each desire to resolve any potential disputes
which exist or may exist arising out of Employee's employment with the Company
and/or the termination thereof.

         NOW THEREFORE, in consideration of the covenants and promises contained
herein, the Parties hereto agree as follows:

                                    AGREEMENT

         1. Agreement By the Company. In exchange for Employee's agreement to be
bound by the terms of this entire Agreement, including but not limited to the
Release of Claims in paragraph 3, the Company agrees to provide Employee with a
lump-sum payment in the amount of __________ dollars ($________), less statutory
deductions and withholdings, which amount represents _____ (_)
weeks'/months'/years' salary at Employee's rate of pay as of the Termination
Date, to be paid within ten (10) days of the Company's receipt of this
Agreement, fully executed by Employee.

         Employee acknowledges that, absent this Agreement, s/he has no legal,
contractual or other entitlement to the consideration set forth in this
paragraph and that the amount set forth in this paragraph constitute valid and
sufficient consideration for Employee's release of claims and other obligations
set forth herein.

         2. Release of Claims. Employee hereby expressly waives, releases,
acquits and forever discharges the Company and its divisions, subsidiaries,
affiliates, parents, related entities, partners, officers, directors,
shareholders, investors, executives, managers, employees, agents, attorneys,
representatives, successors and assigns (hereinafter collectively referred to as
"Releasees"), from any and all claims, demands, and causes of action which
Employee has or claims to have, whether known or unknown, of whatever nature,
which exist or may exist on Employee's behalf from the beginning of time up to
and including the date of this Agreement. As used in this paragraph, "claims,"
"demands," and "causes of action" include, but are not limited to, claims based
on contract, whether express or implied, fraud, stock fraud, defamation,
wrongful termination, estoppel, equity, tort, retaliation, intellectual
property, personal injury, spoliation of evidence, emotional distress, public
policy, wage and hour law, statute or common law, claims for severance pay,
claims related to stock options and/or fringe benefits, claims for attorneys'
fees, vacation pay, debts, accounts, compensatory damages, punitive or exemplary
damages, liquidated damages, and any and all claims arising under any federal,
state, or local statute, law, or ordinance prohibiting discrimination on account
of race, color, sex, age, religion, sexual orientation, disability or national
origin, including but not limited to, the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964 as amended, the Americans with
Disabilities Act, the Family and Medical Leave Act or the Employee Retirement
Income Security Act.


<PAGE>

         3. Acceptance of Agreement/Revocation. This Agreement was received by
Employee on ______, ____. Employee may accept this Agreement by returning a
signed original to the Company. This Agreement shall be withdrawn if not
accepted in the above manner on or before _______.

         4. Confidentiality. Employee understands and agrees that this
Agreement, and the matters discussed in negotiating its terms, are entirely
confidential. It is therefore expressly understood and agreed that Employee will
not reveal, discuss, publish or in any way communicate any of the terms, amount
or fact of this Agreement to any person, organization or other entity, with the
exception of his/her immediate family members and professional representatives,
unless required by subpoena or court order. Employee further agrees that s/he
will not, at any time in the future, make any statements to any third parties
that disparage any of the Releasees personally or professionally.

         5. [New York] Law Applies. This Agreement, in all respects, shall be
interpreted, enforced and governed by and under the laws of the State of [New
York]. Any and all actions relating to this Agreement shall be filed and
maintained in the federal and/or state courts located in the State [and County
of New York], and the parties consent to the jurisdiction of such courts. In any
action arising out of this Agreement, or involving claims barred by this
Agreement, the prevailing party shall be entitled to recover all costs of suit,
including reasonable attorneys' fees.

         6. Voluntary Agreement. EMPLOYEE UNDERSTANDS AND AGREES THAT S/HE MAY
BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT, AND REPRESENTS
THAT S/HE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, WITH A FULL
UNDERSTANDING OF AND IN AGREEMENT WITH ALL OF ITS TERMS.

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the dates provided below.


DATED:  _____________________, ____         [COMPANY NAME]



                                            By:  __________________________

                                            Its: __________________________

DATED:  _____________________, ____         [EMPLOYEE NAME]


                                            ____________________________



</TEXT>
</DOCUMENT>
