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                              MARKETING AGREEMENT

MARKETING AGREEMENT ("Agreement") as of June 1, 1999 (the "Effective Date")
between Magazineoutlet.com, a division of NewSub Magazine Services LLC,
(collectively "MO"), located at 5 High Ridge Park, Stamford, CT 06905, and
Freeshop.com, Inc. ("FreeShop.com"), a Washington corporation, located at 95
South Jackson Street, Suite 300, Seattle, Washington 98104 ("FreeShop.com").
FreeShop.com wishes to offer subscriptions to consumer magazines on its web site
located at www.freeshop.com, and replacement and successor addresses thereto
(the "FreeShop.com Site") and forward orders for said magazines to MO, as well
as to test the viability of additional marketing programs.

1.      MAGAZINE OFFERINGS.

        1.1.    Presentation Materials. MO shall provide FreeShop.com with MO
                logo and graphics, logos of consumer brands offered by MO,
                consumer magazine cover graphics, banners, offer copy, offer
                elements and other copy, all of which may be updated in the
                reasonable discretion of MO from time-to-time (collectively, the
                "Presentation Materials"), for promotion of the consumer title
                magazine subscription offers on the FreeShop.com Site. MO will
                transmit updated Presentation Materials in a mutually agreed
                format to FreeShop.com via email or FTP from time to time, and
                will promptly notify FreeShop.com upon transmission.

        1.2.    Magazine Offers. Using the Presentation Materials, FreeShop.com
                will market and offer to FreeShop.com Site visitors
                ("Offer(s)"), in accordance with the terms and conditions of the
                Agreement, the magazine subscriptions authorized for promotion
                on FreeShop.com by MO's best efforts, which are available
                through MO's own web site at www.magazineoutlet.com as updated
                from time to time hereafter with the consent of MO which will
                not be unreasonably withheld, conditioned or denied (the
                "Magazines"). FreeShop.com has the right in their sole
                discretion to refuse advertising or to request removal of
                advertising from the FreeShop.com site for any reason.
                FreeShop.com'sonline marketing and distribution partners, and
                their respective agents have the right in their sole discretion
                to refuse advertising or to request removal of advertising for
                specific Magazines from their site respectively for any reason.
                FreeShop.com distribution partners and their respective agents
                may not alter, modify or change the offers or promotion of those
                offers in any way and FreeShop.com is solely responsible for
                enforcing this.

2.      OFFER PLACEMENT.

        2.1.    MO Store. Subject to the approval of MO not to be unreasonably
                withheld, conditioned or denied, FreeShop.com shall design,
                build, host and operate at its sole expense a premium, branded
                section of the FreeShop.com Site to be known as the Freeshop.com
                magazine store, which store shall be devoted entirely to
                offering and selling the Magazines and shall feature e-commerce
                functionality and features ("Magazine Store"), which shall be a
                part of, and subject to the same conditions as, the FreeShop.com
                Site.


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        2.2.    Magazine Offer Links. FreeShop.com shall place a link to the
                Magazine Store on the front screen of the FreeShop.com Site, in
                a conspicuous location that is visible to customary users upon
                initial receipt of the page without any scrolling or navigation.
                FreeShop.com will also promote the Magazine Store and the
                Magazines individually in email promotions and other areas of
                the FreeShop.com Site as appropriate in FreeShop.com's
                discretion, as well as through FreeShop.com affiliated sites.

        2.3.    Site Coordination. MO and FreeShop.com shall jointly coordinate
                all elements of the placement of Presentation Materials on the
                FreeShop.com Site.

        2.4.    Changes. FreeShop.com agrees to use best efforts to execute any
                and all reasonable changes in the Presentation Materials within
                five (5) business days of receipt of the same. Upon notice by
                MO, FreeShop.com shall promptly remove any Magazines or other
                materials on pages that contain content judged by MO in its sole
                reasonable discretion to be objectionable or in other ways
                offensive in a manner that would negatively affect MO.

3.      RIGHTS GRANTED.

        3.1.    License to MO Marks. Subject to all the terms and conditions of
                this Agreement, MO grants FreeShop.com the non-exclusive,
                non-transferable, non-sublicensable, revocable right to use the
                Presentation Materials during the term of the FreeShop.com
                Agreement for the sole purpose of generating Magazine
                subscription sales through the FreeShop.com Site. In addition to
                other rights and remedies herein, MO reserves all of its rights,
                and those of the other respective rights owners, in the
                Presentation Materials, and FreeShop.com claims no rights
                whatsoever in the Presentation Materials. All good will
                attributed to the MO logo(s), tradenames(s) and trademarks ("MO
                Marks") will inure to the benefit of MO exclusively.

4.      ORDER PROCESSING, FULFILLMENT AND SUPPORT.

        4.1.    FreeShop.com-Customer Agreements.

                4.1.1.  MO may provide FreeShop.com with a copy of certain terms
                        and conditions binding upon customers to which the sale
                        or ordering of Consumer Magazines are subject ("Product
                        Agreement"), and FreeShop.com will provide a link on the
                        offer page for each Magazine for customers to review and
                        understand said terms and conditions before ordering
                        said Magazines. MO may change any provision of a Product
                        Agreement from time to time on thirty (30) days notice
                        to FreeShop.com, and shall have prior approval over how
                        the Product Agreement is presented to the consumer.
                        FreeShop.com will notify customers in the Product
                        Agreement that MO will send emails for the purpose of
                        managing their subscription(s). The customer will be
                        provided with the ability to opt out of any such
                        notices. MO may contact customers via email up to three
                        (3) times per year to manage existing subscriber
                        relationships. All such email messages will include a
                        link to FreeShop.com.


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                4.1.2.  FreeShop.com shall place a toll-free telephone number
                        and e-mail address to be provided by MO on the Magazine
                        Store in conjunction with all orders, to enable
                        customers to contact MO directly for customer service
                        and to cancel Magazine subscriptions.

        4.2.    Order Information.

                4.2.1.  FreeShop.com will deliver to MO on a weekly basis via
                        secure electronic transmission in a file format
                        reasonably agreed to by MO and FreeShop.com all Magazine
                        subscription orders received by FreeShop.com including
                        the following information received by FreeShop.com for
                        each and every Lead: (i) full first and last names and
                        complete mailing address(es) for both billing and
                        shipping, one or more [***] (unless the customer has
                        opted out) (ii) one or more telephone number(s), (iii)
                        the quantity and titles of Magazine subscriptions, and
                        the corresponding Magazine code/source code supplied by
                        MO, (iv) the order date and any price information
                        associated with the order, and (v) complete, valid
                        credit card information guaranteeing payment of the
                        subscription fee in full, including credit card number,
                        expiration date and name of credit card holder (Visa,
                        MasterCard, American Express and Discover Card only)
                        (collectively, ("Leads"). FreeShop.com will be solely
                        responsible for collecting and transmitting to MO in
                        accordance with the terms and conditions of the
                        Agreement all Leads.

        4.3     Cancellations. MO will process cancellations of subscriptions in
                accordance with the MO cancellation policy as provided to
                FreeShop.com for inclusion in the FreeShop.com Site, as modified
                by MO from time-to-time. FreeShop.com shall promptly transmit to
                MO all cancellation information or requests for MO to respond to
                and/or process, upon receipt of the same and in accordance with
                the terms of the Agreement. MO shall determine, in its sole
                discretion, the validity of cancellations, and shall be solely
                responsible for the refund of any subscription fees.

        4.4     Records. FreeShop.com shall maintain records of each customer
                order of a Magazine, including Consumer Order Information, for a
                period of at least two (2) years from the date of each such
                order.

        4.5     Order Fulfillment. MO shall be solely responsible for
                fulfillment of orders and all expenses directly associated
                therewith.

        4.6     Marketing Tests. When available during the Term of this
                Agreement, FreeShop.com agrees to test in a format and on terms
                to be mutually agreed in good faith by the parties, the
                marketing of trade magazines ("FreeBizMag"), a credit card
                security program (the "MO Credit Card Program"), and an internet
                customer service system (the "MO Internet Service System") for
                renewals and change of address to be offered by MO. Each of
                these programs shall be implemented on the FreeShop.com site in
                a timely fashion. Each program shall be implemented for a
                reasonable testing period such that both parties will have
                sufficient means to evaluate


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                the success of the tests. Following thorough evaluation, the
                parties will jointly develop and execute an appropriate
                implementation plan.

        4.6.1   FreeBizMag: For the purposes of the test, FreeShop.com will
                promote free business magazines on the FreeShop.com site. MO
                will pay FreeShop.com $1 for each lead generated from the free
                business magazine program. MO shall retain all right, title and
                interest in and to FreeBizMag. FreeShop.com acknowledges that it
                does not and shall have no right, title, or interest whatsoever
                in or to FreeBizMag. Furthermore, FreeShop.com acknowledges that
                it shall provide its cooperation in supporting FreeBizMag as
                reasonably requested by MO.

        4.6.2   MO Credit Card Program: For the purposes of the test,
                FreeShop.com will promote a comprehensive credit card security
                system, which will enable consumers to sign up for credit card
                protection and insurance for purchases on the FreeShop.com Site.
                MO shall retain all right, title and interest in and to the MO
                Credit Card Program. FreeShop.com acknowledges that it does not
                and shall have no right, title, or interest whatsoever in or to
                the MO Credit Card Program. Furthermore, FreeShop.com
                acknowledges that it shall provide its cooperation in supporting
                the MO Credit Card Program as reasonably requested by MO.

        4.6.3   MO Internet Service System: For the purposes of the test,
                FreeShop will promote a magazine customer service program
                including change of address renewals and other services relating
                to magazine subscriptions. MO shall retain all right, title and
                interest in and the MO Internet Service System. FreeShop.com
                acknowledges that it does not and shall have no right, title, or
                interest whatsoever in or to the MO Internet Service System.
                Furthermore, FreeShop.com acknowledges that it shall provide its
                cooperation in supporting the MO Internet Service System as
                reasonably requested by MO.



5.      CUSTOMER RESPONSIBILITY.

FreeShop.com agrees that customers who purchase Magazines through the Magazine
Store will be deemed to be customers of MO as well as FreeShop.com, for all
purposes, including without limitation information management and direct
marketing, subject to the MO rules, policies and operating procedures concerning
customer orders, and customer service in connection therewith and subject to the
terms of the Product Agreement presented to customers.

6.      MAGAZINE COMMISSIONS AND PAYMENTS.

        6.1     Payments. MO shall pay FreeShop.com [***] ($***) per each Lead
                ("Commissions"),within forty-five (45) days following receipt of
                invoice


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                from FreeShop.com. Commission payments will be less any orders
                that could not be processed by MO due to invalid, missing, or
                untimely Lead information. If discrepancies are found following
                commission payment, they will be deducted from the next monthly
                payment.

        6.2     Reports. FreeShop.com shall deliver to MO weekly reports via
                email representing estimated Leads received for Magazines
                through the FreeShop.com Site.

        6.3     Renegotiate. MO and FreeShop.com agree to use their best efforts
                to renegotiate a lower Commission rate if after six (6) months
                from the Effective Date: (a) there are fewer than ten thousand
                (10,000) Leads per month for three (3) or more consecutive
                months, or (b) the rate of cancellation of Magazine
                subscriptions placed through the FreeShop.com Site is greater
                than twenty-five percent (25%).

        6.4     Exclusivity. During the term of this Agreement, FreeShop.com
                will not place offers through or on the FreeShop.com Site for
                magazines from any company other than MO, nor shall it offer
                such services itself, directly or indirectly, nor shall
                FreeShop.com allow any magazine advertisements, promotions or
                content from any company other than MO or links to any websites
                which are primarily in the business of magazine subscription
                services to appear on the FreeShop.com Site, other than MO. If
                FreeShop.com links to a site which promotes magazines as an
                ancillary business, that portion of the site must not be
                available from the FreeShop.com site or MO must have approval
                over any such relationships where magazines are offered.
                Notwithstanding the foregoing sentence, FreeShop.com may solely
                continue to offer the six (6) magazines set forth in Exhibit A
                hereto ("FreeShop.com Magazines"), which it represents are being
                actively offered on and sold through the FreeShop.com Site as of
                the Effective Date, in a consistent manner and in conjunction
                with the existing publisher(s) only; it being understood and
                agreed that the FreeShop.com Magazines will not be advertised or
                sold in the Magazine Store.

7.      PROMOTIONAL MAGAZINES.

        7.1.    Value. During the term of the Agreement, FreeShop.com shall
                accrue credit with MO, cumulatively on a monthly basis ("Accrued
                Promotional Credit") for points which can be redeemed for annual
                various magazine subscriptions of [***] dollars ($[***]) in
                value based on the prices offered to customers in the Magazine
                Store ("Promotional Magazines") up to a total aggregate value of
                [***] ($[***]) dollars. The Promotional Magazines shall be made
                available to FreeShop.com throughout the term and MO and
                FreeShop.com will reasonably coordinate on the redemption
                process for such Accrued Promotional Credit. MO shall notify
                FreeShop.com as the Promotional Magazines become available up to
                the then current amount of the Accrued Promotional Credit.

        7.2.    Continuous Service Customers. Subject only to the foregoing
                subsection 7.1, Promotional Magazines shall be subject to all
                terms and conditions of the


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                Agreement, including without limitation Customer Responsibility,
                MO Magazine Policies and Conditions and MO's Continuous
                ServiceSM subscription model for which the customer will be
                billed in the ninth month of the annual Promotional Subscription
                and yearly thereafter unless and until a subscription is
                canceled.

8.      TERM AND TERMINATION

        8.1     Term. The term of this Agreement shall commence on the Effective
                date and continue for a period of two (2) years ("Initial
                Term"), and shall be automatically renewed thereafter for
                subsequent one (1) year periods (collectively, "term").

        8.2     Termination. Either party shall have the right to terminate this
                Agreement:

                8.1.1   if the other party commits a material breach and fails
                        to cure such breach within thirty (30) days following
                        written notice describing such breach;

                8.1.2   upon ninety (90) days written notice; and

                8.1.3   immediately by written notice upon the insolvency, or
                        the voluntary or involuntary bankruptcy, of the other
                        party, or if the other party makes an assignment for the
                        benefit of creditors, or has a receiver or trustee
                        appointed.

        8.2     Actions upon Termination. Upon termination or expiration of this
                Agreement for any reason whatsoever, FreeShop.com's rights
                hereunder to market, promote, offer or otherwise act pursuant to
                this Agreement shall immediately cease, and FreeShop.com shall
                immediately and completely cease any such activity. Within five
                (5) days after such termination or expiration FreeShop.com shall
                return to MO all Presentation Materials and other materials
                provided to FreeShop.com under this Agreement, and all copies
                thereof, or upon request by MO destroy the same, and certify in
                writing that the foregoing and all copies thereof have either
                been so returned to MO or destroyed at the end of the
                termination. Upon termination, FreeShop.com shall only be
                entitled to Commissions earned.



9.      REPRESENTATIONS, WARRANTIES AND COVENANTS

        9.1.    By MO. MO represents, warrants and covenants:

                9.1.1.  the Magazine subscription rates offered through the
                        Magazine Store for paid new subscriptions shall be
                        equivalent to the best prices that MO makes available
                        through third-parties or MO's own web site to the
                        general public on the Internet;

                9.1.2.  MO shall offer customers under the Agreement the
                        incentive of two (2) months free at the commencement of
                        new Magazine subscriptions; and


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                9.1.3.  the Presentation Materials do not infringe the rights of
                        any third party, and are not libelous or otherwise
                        illegal.

                9.1.4.  SUBJECT TO THE FOREGOING SUBSECTIONS 9.1.1 - 9.1.3, MO
                        MAKES NO REPRESENTATIONS OR WARRANTIES TO ANY PERSON OR
                        ENTITY WITH RESPECT TO ANY SERVICES PERFORMED OR ANY
                        INFORMATION, CONTENT OR OTHER MATERIALS PROVIDED OR MADE
                        AVAILABLE BY IT HEREUNDER, AND DISCLAIMS ALL IMPLIED
                        WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF
                        MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
                        IMPLIED WARRANTIES ARISING OUT OF A COURSE OF
                        PERFORMANCE, DEALING OR TRADE USAGE. MO DOES NOT
                        REPRESENT THAT THE OPERATION OF ITS SERVICES WILL BE
                        UNINTERRUPTED OR ERROR-FREE, AND IT WILL NOT BE LIABLE
                        FOR THE CONSEQUENCES OF SUCH INTERRUPTIONS, ERRORS OR
                        NON-FULFILLMENT OF ORDERS.

        9.2.    By FreeShop.com. FreeShop.com represents, warrants and
                covenants:

                9.2.1.  it is solely responsible for the development, operation,
                        and maintenance of the FreeShop.com Site and all
                        portions thereof. FreeShop.com agrees to use best
                        efforts to accurately display and maintain the
                        Presentation Materials, including offer terms, in good
                        working order, and not to alter or modify them in any
                        way without obtaining the prior written consent of MO.
                        Under no circumstance shall FreeShop.com vary the
                        authorized subscription prices by implicitly or
                        expressly offering discounts, premiums or any other
                        incentives specifically related to the Magazine Store.
                        FreeShop.com agrees to use best efforts to make any
                        imperative changes to Presentation Materials, such as
                        changes to price, within two (2) business days if
                        reasonably possible;

                9.2.2.  any and all content and materials, other than the
                        Presentation Materials, which are posted on the
                        FreeShop.com Site, do not violate or infringe upon the
                        rights of any third party, and are not libelous or
                        otherwise illegal;

                9.2.3.  FreeShop.com shall maintain the Magazine Store with a
                        level of support no less favorable than the support it
                        provides to the other parts of the FreeShop.com Site;
                        and

                9.2.4.  it shall use best efforts at all times to maximize sales
                        of Magazines through the Magazine Store.

                9.2.5.  SUBJECT TO THE FOREGOING SUBSECTIONS 9.2.1 - 9.2.4,
                        FREESHOP.COM MAKES NO REPRESENTATIONS OR WARRANTIES TO
                        ANY PERSON OR ENTITY WITH RESPECT TO ANY SERVICES
                        PERFORMED OR ANY INFORMATION, CONTENT OR OTHER MATERIALS
                        PROVIDED OR MADE


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                        AVAILABLE BY IT HEREUNDER, AND DISCLAIMS ALL IMPLIED
                        WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF
                        MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
                        IMPLIED WARRANTIES ARISING OUT OF A COURSE OF
                        PERFORMANCE, DEALING OR TRADE USAGE. FREESHOP.COM DOES
                        NOT REPRESENT THAT THE OPERATION OF ITS SERVICES WILL BE
                        UNINTERRUPTED OR ERROR-FREE, AND IT WILL NOT BE LIABLE
                        FOR THE CONSEQUENCES OF SUCH INTERRUPTIONS, ERRORS OR
                        NON-FULFILLMENT OF ORDERS.

10.     MO POLICIES AND CONDITIONS.

        10.1.   Selection of Titles. MO may change its selection of magazine
                titles, and their subscription prices, at any time, without
                prior notice, in its sole discretion, and FreeShop.com agrees to
                promptly adopt such modifications upon notice. MO does not
                guarantee specific prices, or the availability of any product.

        10.2.   MO shall be exclusively responsible for all processing,
                fulfillment and customer service related to Magazine orders. At
                MO's sole discretion, it may reject any Magazine subscription
                orders that do not comply with its requirements.

        10.3.   Territory. MO shall fulfill Magazine subscription orders through
                the FreeShop.com Site within the U.S. and its military bases
                only.

11.     INDEMNIFICATION.

Each party (the "Indemnitor") shall indemnify and hold harmless the other (the
"Indemnitee") against and from all claims, liabilities, suits, damages, costs,
including without limitation, reasonable attorney's fees, disbursements and
court costs that Indemnitee may suffer, incur or be subjected to by reason of
any legal action, arbitration or other claim by a third party arising out of or
as a result of a breach of any of Indemnitor's representations, warranties, or
agreements hereunder; provided that (a) the Indemnitor is promptly notified in
writing of such claim or suit, (b) the Indemnitor shall have the sole control of
any defense and/or settlement thereof, (c) the Indemnitee furnishes to the
Indemnitor, on request, information available to the Indemnitee for such
defense, and (d) the Indemnitee reasonably cooperates in any defense and/or
settlement thereof as long as the Indemnitor pays all of the Indemnitee's
reasonable out of pocket expenses and attorneys' fees. The Indemnitee shall not
admit any such claim without prior consent of the Indemnitor and the Indemnitor
shall not enter into any settlement or compromise, which would require the
Indemnitee to make any payment or bear any obligation other than those set forth
herein without the Indemnitee's prior written consent.

12.     LIMITATIONS OF LIABILITY.


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EACH PARTY'S SOLE REMEDY AGAINST THE OTHER FOR LOSS OR DAMAGE ARISING OUT OF THE
PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT SHALL BE PROVEN DIRECT,
ACTUAL DAMAGES. NEITHER PARTY WILL BE LIABLE OR OBLIGATED UNDER ANY SECTION OF
THIS AGREEMENT OR UNDER CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY INDIRECT, INCIDENTAL, RELIANCE, SPECIAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS OR COST OF PROCUREMENT OF SUBSTITUTE GOODS
OR SERVICES ARISING OUT OF ITS PERFORMANCE OR NON-PERFORMANCE UNDER THIS
AGREEMENT, WHETHER OR NOT SUCH PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

13. CONFIDENTIALITY.

Each party (the "Receiving Party") agrees that all proprietary information
concerning the other (the "Disclosing Party"), including without limitation
business and financial data, vendor lists, pricing and sales information, and
the terms of this Agreement, shall remain strictly confidential and shall not be
disclosed to third parties, with the sole exception of the Receiving Party's
accountants and attorneys on a confidential basis, or pursuant to valid legal
process, of which the Receiving Party shall provide immediate notice to the
Disclosing Party and cooperation in any attempt by the Disclosing Party to
oppose said process. Confidential information shall not include information (a)
which was lawfully in possession of Receiving Party prior to disclosure of such
information by Disclosing Party, (b) which was, or at any time becomes,
available in the public domain other than through a violation of this Agreement,
(c) which is documented by Receiving Party as having been developed by Receiving
Party independently or (d) which is furnished to Receiving Party or its
representatives by a third party not under an obligation of confidentiality to
Disclosing Party.


14.     RELATIONSHIP.

Each party may identify the other as an "affiliate" in disclosing the nature of
services that are the subject matter of the Agreement. Under no circumstances
shall this Agreement, nor either party's activities under it, create any agency,
franchise, joint venture, partnership, sales representative or employment
relationship between FreeShop.com and MO, and neither party has any authority to
make or accept any offers on behalf of the other without prior written consent.
The parties will coordinate in the preparation and distribution of a mutually
agreed press release publicly announcing this relationship. In addition, MO
grants FreeShop.com the right to use MO's name and trademarks in promotional
materials which MO shall approve prior to their release. This right shall
continue until all promotional materials existing on the date of any termination
of this Agreement have been distributed or otherwise utilized.

15.     FORCE MAJEURE.

Neither party shall be liable for nonperformance or delay in performance (other
than of obligations regarding confidentiality) caused by any event reasonably
beyond the control of such party including, but not limited to wars,
hostilities, revolutions, riots, civil


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commotion, national emergency, strikes, lock-outs, unavailability of supplies,
epidemics, fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance, or other act
or order of any court, government or governmental agency.

16.     ASSIGNMENT.

Either party may assign this Agreement, and its rights, licenses and obligations
hereunder, subject to the prior written approval of the other which shall not be
unreasonably withheld, solely to any affiliate or other acquiror of all or of
substantially all of its equity securities, assets or business relating to the
subject matter of this Agreement, or pursuant to any internal re-organization.
Any attempted assignment in violation of this Section will be void and without
effect. The issuance of or trading in any securities which are registered under
the Securities Act of 1933, as amended, or in conjunction with any transaction
which is registered under the Securities and Exchange Act of 1934, as amended,
shall not be deemed to violate the provisions of this Section. Subject to the
foregoing, this Agreement will benefit and bind the parties' successors and
assigns.

17.     SURVIVAL.

The following shall survive any expiration or termination of this Agreement: (a)
sections (and subsections thereof) numbers 3, 4, 5, 6, 7, 8.2, 10, 11, 12, 13,
14, 15, 17, 18, 19, 20, 21, 22, 23 and 24; (b) any accrued payment obligations;
(c) except as otherwise expressly provided herein, any right of action for
breach of this Agreement prior to termination, and (d) MO's rights, and
obligations to customers, relating to existing Magazine subscriptions and
fulfillment services.

18.     SEVERABLE.

In the event that any of the provisions of this Agreement shall be held by a
court or other tribunal of competent jurisdiction to be unenforceable, such
provisions shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.

19.     WAIVER.

The failure to enforce any provision of the Agreement will not be a waiver of
the right to subsequent enforcement of the provision or any other provision of
the Agreement.

20.     NOTICE.

Any notice or other correspondence required or permitted to be given pursuant to
this Agreement shall be in writing and shall be deemed to have been given (a)
immediately if served personally, (b) immediately if sent to a designated FAX
number (with confirmation of receipt), and simultaneously via first-class mail,
postage pre-paid and addressed to the persons set forth below, (c) three (3)
business days after if sent by certified or registered mail return receipt
requested, and addressed to the persons set forth


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below, (d) on the next business day if sent via internationally recognized
carrier such as FedEx or U.P.S. and addressed to the persons set forth below.

    If to Magazineoutlet.com:

    Marti Schiff
    President

    With a copy to:
    Lisa B. Dubrow
    VP, General Counsel

    If to FreeShop.com:

    Tim Choate
    President & CEO


    With a copy to:
    John Wade
    CFO


21.     HEADINGS.

Headings and captions are for convenience only and are not to be used in the
interpretation of this Agreement.

22.     CHOICE OF LAW, DISPUTE RESOLUTION AND JURISDICTION.

        22.1.   Choice of Law. This Agreement shall be construed and enforced in
                accordance with the laws of the State of New York, without
                giving effect to the principles of conflicts of law.

        22.2.   ADR Procedures. In the event of any controversy or claim arising
                out of this Agreement raised by either party, the party raising
                the dispute will promptly notify the other party in writing of
                the nature of the dispute and the factual background. Within the
                fifteen (15) calendar day period following such notice, the
                parties will initiate an attempt in good faith to reach a
                reasonable solution to the dispute, including escalation to the
                vice-president of each company responsible for the subject
                matter of the dispute. If the dispute cannot be amicably
                resolved within thirty (30) calendar days of written
                notification, then either party may seek to resolve said dispute
                by arbitration before a single arbitrator in accordance with the
                commercial arbitration rules of the American Arbitration
                Association, and judgement upon the award rendered by the
                arbitrator may be entered in any court having jurisdiction
                thereof. The place of arbitration shall be at a neutral site to
                be reasonably determined by both parties. Each party shall
                provide to the arbitrator, no later than fifteen (15) calendar
                days following the date of the arbitrator's appointment, a
                statement, including all supporting documents or other evidence
                on which such party relies as to why it


[***] Confidential portion omitted pursuant to a confidential treatment request
submitted pursuant to Rule 406 under the Securities Act of 1933, as amended.


<PAGE>   12
                believes that the dispute should be resolved in its favor, and
                all such materials and any other materials provided to the
                arbitrator by either party shall simultaneously be provided by
                such party to the other party. Within twenty (20) calendar days
                after the submission of such statements by all parties, the
                arbitrator shall hold a hearing with respect to the dispute. At
                such hearing, the arbitrator may, in his or her sole discretion,
                allow the parties to call and cross-examine witnesses, make any
                additional arguments or submit any additional materials to
                support the position taken in their respective statements. The
                arbitrator shall enter an award within fifteen (15) calendar
                days following the hearing provided for herein. Nothing shall
                preclude either party from making an application to the
                arbitrator, for good cause, to expedite the proceedings, nor
                restrict the arbitrator from granting such an application. In
                addition to such other relief as the arbitrator may award, the
                arbitrator shall be vested with jurisdiction and shall award to
                the prevailing party its reasonable attorney's fees and
                expenses, and all other costs associated with the arbitration.
                The award rendered by the arbitrator shall be final, and
                judgement may be entered upon it in accordance with applicable
                law in any court having jurisdiction thereof.

23.     COMPLETE AGREEMENT.

This Agreement (including the attached exhibits) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior discussions, documents, agreements and prior course of
dealing, and shall not be effective until signed by both parties.

24.     COUNTERPARTS.

This Agreement may be executed in two counterparts, each of which shall be an
original; but such counterparts shall together constitute one and the same
instrument.


AGREED, this 13th day of                    AGREED, this 12th day of
August, 1999.                               August, 1999.

FREESHOP.COM, INC.                          NEWSUB MAGAZINE SERVICES LLC


By:   /s/ John A. Wade                      By:   /s/ Marti Schiff
   -------------------------------             -------------------------------

Title: Secretary, Vice President,           Title: V.P. on Online Businesses
Finance and Chief Financial Officer


[***] Confidential portion omitted pursuant to a confidential treatment request
submitted pursuant to Rule 406 under the Securities Act of 1933, as amended.