<PAGE>

THIS WARRANT AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR
UNDER ANY STATE SECURITIES LAW AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD,
ASSIGNED, HYPOTHECATED, OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
COMPANY OR COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE PLEDGED,
SOLD, ASSIGNED, HYPOTHECATED, OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.

THE TRANSFER OF THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF
ARE RESTRICTED AS DESCRIBED HEREIN.


                                  iPARTY CORP.

           Warrant for the purchase of 550,000 shares of Common Stock,
                            $.001 par value per share




         THIS CERTIFIES that for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Margaritaville Holdings, LLC,
a Delaware limited liability company, (the "Holder"), is entitled to subscribe
for and purchase from iParty Corp, a Delaware corporation (the "Company"), upon
the terms and conditions set forth herein, and pursuant to the vesting schedule
set forth in Section 3 below, and expiring at 5:00 p.m. New York City time on
December 21, 2004 (the "Exercise Period"), up to 550,000 shares of the Company's
Common Stock, $.001 par value per share ("the Common Stock"), at a price (the
"Exercise Price") per share equal to $2.875. As used herein, the term "this
Warrant" shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of the exercise or transfer of this Warrant in
whole or in part. As used herein, the term "Holder" shall include any transferee
to whom this Warrant has been transferred in accordance with the terms hereof.

         The number of shares of Common Stock issuable upon exercise of this
Warrant (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth.

         1. Subject to the provisions hereof, vested portions of this Warrant
may be exercised during the Exercise Period, as to the whole or any lesser
number of whole Warrant Shares, by

<PAGE>

transmission by telecopy, or other reasonable delivery, of the Election to
Exercise, followed within three (3) business days by the surrender of this
Warrant (with the Election to Exercise attached hereto duly executed) to the
Company at its office at 41 East 11th Street, 11th Floor, New York, New York
10003, or at such other place as is designated in writing by the Company,
together with a certified or bank cashier's check payable to the order of the
Company in an amount equal to the product of the Exercise Price and the number
of Warrant Shares for which this Warrant is being exercised (the "Aggregate
Exercise Price").

         2. Upon each exercise of the Holder's rights to purchase Warrant
Shares, the Holder shall be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise, notwithstanding that the transfer books of
the Company shall then be closed or certificates representing such Warrant
Shares shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Warrant and receipt by the Company
of this Warrant, the Election to Exercise and the Aggregate Exercise Price, the
Company shall issue and deliver to the Holder a certificate or certificates for
the Warrant Shares issuable upon such exercise, registered in the name of the
Holder or its designee. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the right of the Holder to purchase the balance
of the Warrant Shares (or portions thereof) subject to purchase hereunder.

         3. (a) Subject to the termination provisions of Section 3(b) hereof,
the Warrant shall vest and be exercisable (during the Exercise Period) as
follows: (i) the Warrant shall vest as to 100,000 Warrant Shares on the date
hereof (December 21, 1999); (ii) the Warrant shall vest as to an additional
150,000 Warrant Shares on December 21, 2000; (iii) the Warrant shall vest as to
an additional 150,000 Warrant Shares on December 21, 2001; and (iv) the Warrant
shall vest as to the final 150,000 Warrant Shares on December 21, 2002. Vesting
of the Warrant shall immediately accelerate upon the giving of notice by the
Company to the Holder that the Company has entered into a merger, stock purchase
or acquisition agreement pursuant to which the Company shall either no longer
exist, become a wholly-owned subsidiary of another company, or sell all or
substantially all of the assets of the Company, or the stockholders of the
Company sell all of their securities in the Company. If the Company fails to
give such notice, then the Warrant Shares shall vest as if the Company had
provided the required notice. The Company shall give notice of such events at
least ten days prior to the closing of the transactions listed above. If such
transaction does not close and the Holder has not exercised the Warrant, then
the vesting schedule shall again be applied as if the notice was never sent.

                  (b) Notwithstanding anything to the contrary contained herein,
in the event that the Co-Promotion Agreement, of even date herewith, by and
among the Company and the Holder is terminated other than for breach by the
Company, then all Warrant Shares which have not vested as of such termination
date shall immediately terminate and expire.

         4. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant on the Warrant Register as the owner in
fact thereof for all purposes and shall not be bound to recognize

                                       2
<PAGE>

any equitable or other claim to or interest in such Warrant on the part of any
other person, and shall not be liable for any registration of transfer of
Warrants which are registered or to be registered in the name of a fiduciary or
the nominee of a fiduciary unless made with the actual knowledge of the general
counsel of the Company that a fiduciary or nominee is committing a breach of
trust in requesting such registration of transfer. In all cases of transfer by
an attorney, executor, administrator, guardian, or other legal representative,
duly authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Warrant or Warrants to
the person entitled thereto. This Warrant may be exchanged, at the option of the
Holder thereof, for another Warrant, or other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares (or portions thereof), upon surrender
to the Company or its duly authorized agent. Notwithstanding anything contained
herein to the contrary, the Company shall have no obligation to cause Warrants
to be transferred on its books to any person if, in the reasonable opinion of
counsel to the Company, such transfer does not comply with the provisions of the
Act and the rules and regulations thereunder.

         5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
the Warrants, such number of shares of Common Stock as shall, from time to time,
be sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the Company of the full
Exercise Price therefor, shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.

         6. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:

                  (a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock, in each case, in shares
of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect at the time of the record date for such dividend or distribution
or of the effective date of such subdivision, combination or reclassification
shall be adjusted so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the number of
shares of Common Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such action. Such adjustment shall be made successively
whenever any event listed above shall occur.

                  (b) Upon each adjustment of the Exercise Price pursuant to the
provisions of this Section 6, the number of Warrant Shares issuable upon the
exercise at the adjusted Exercise Price of each Warrant shall be adjusted to the
nearest number of whole shares of Common Stock by multiplying a number equal to
the Exercise Price in effect immediately prior to such

                                       3
<PAGE>

adjustment by the number of Warrant Shares issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

                  (c) For the purpose of this Warrant, the term "Common Stock"
shall mean (i) the class of stock designated as Common Stock in the Articles of
Incorporation of the Company as amended as of the date hereof, or (ii) any other
class of stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.

                  (d) In case of any consolidation of the Company with, or
merger of the Company into, another corporation (other than a consolidation or
merger which does not result in any reclassification or change of the
outstanding Common Stock), the corporation formed by such consolidation or
merger shall execute and deliver to the Holder a supplemental warrant agreement
providing that the Holder of this Warrant shall have the right thereafter (until
the expiration of such Warrant) to receive, upon exercise of such Warrant, the
kind and amount of shares of stock and other securities and property receivable
upon such consolidation or merger by a holder of the number of shares of Common
Stock for which such Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the adjustments
provided in this Section 7. The above provision of this subsection shall
similarly apply to successive consolidations or mergers.

                  (e) No adjustment in the number of Warrant Shares shall be
required if such adjustment is less than one share; provided, however, that any
adjustments which by reason of this Section 6 are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 6 shall be made to the nearest one-thousandth of
a share.

                  (f) In any case in which this Section 6 shall require that an
adjustment in the number of Warrant Shares be made effective as of a record date
for a specified event, the Company may elect to defer, until the occurrence of
such event, issuing to the Holder, if the Holder exercised this Warrant after
the record date, the Warrant Shares, if any, issuable upon such exercise over
and above the Warrant Shares, if any, issuable upon such exercise prior to such
adjustment; provided, however, that the Company shall deliver to the Holder a
due bill or other appropriate instrument evidencing the Holder's right to
receive such additional Warrant Shares upon the occurrence of the event
requiring such adjustment.

                  (g) Whenever there shall be an adjustment as provided in this
Section 6, the Company shall promptly cause written notice thereof to be sent by
certified mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares issuable upon
the exercise of this Warrant if such Warrant were exercisable on the date of
such notice, and setting forth a brief statement of the facts requiring such
adjustment and the computation thereof, which officer's certificate shall be
conclusive evidence of the correctness of any such adjustment absent manifest
error.

                                       4
<PAGE>

         7. In case at any time following the date hereof the Company shall
propose:

                  (a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution (other
than regularly scheduled cash dividends which are not in a greater amount per
share than the most recent such cash dividend) to all holders of Common Stock;
or

                  (b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities; or

                  (c) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation or merger; or

                  (d) to effect any liquidation, dissolution, or winding-up of
the Company,

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 5
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, or (ii) the date on which
any such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, liquidation, dissolution, or winding-up is expected to
become effective, and the date as of which it is expected that holders of record
of shares of Common Stock shall be entitled to exchange their shares for
securities or other property, if any, deliverable upon such reclassification,
change of outstanding shares, consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up.

         8. The issuance of any shares or other securities upon the exercise of
this Warrant, and the delivery of certificates or other instruments representing
such shares or other securities, shall be made without charge to the Holder for
any tax or other charge in respect of such issuance, other than applicable
transfer taxes. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
any certificate in a name other than that of the Holder and the Company shall
not be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

         9. Unless registered, the Warrant Shares issued upon exercise of the
Warrants shall be subject to a stop transfer order and the certificate or
certificates evidencing such Warrant Shares shall bear the following legend:


                                       5
<PAGE>

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN NOT REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE
         OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER SUCH ACT, OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. SUCH
         SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN A
         WARRANT, DATED DECEMBER 21, 1999, A COPY OF WHICH IS ON FILE WITH THE
         SECRETARY OF THE COMPANY."

         10. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses and, if reasonably requested, an indemnity reasonably
acceptable to the Company, the Company shall execute and deliver to the Holder
thereof a new Warrant of like date, tenor, and denomination.

         11. The Holder of any Warrant shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.

         12. This Warrant shall be construed in accordance with the laws of the
State of New York applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.

         13. The Company represents and warrants to the Holder that:

                  (a) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Delaware and has the corporate
power to conduct the business which it conducts and proposes to conduct. The
Company is duly qualified to do business as a foreign corporation in each
jurisdiction in which the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the Company's business.

                  (b) This Warrant is a valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency, and the relief of debtors and
other laws of general application affecting enforcement of creditors' rights
generally, rules of law governing specific performance, injunctive relief or
other equitable remedies, and limitations of public policy. The execution,
delivery and performance by the Company of this Warrant and compliance herewith
and therewith will not result in any violation of and will not conflict with, or
result in a breach of any of the terms of, or constitute a default under the
Company's Articles of Incorporation or Bylaws, or any material provision of any
material mortgage, indenture, agreement, instrument, judgment, decree, order,
law, rule or regulation or other restriction to which the Company is a party or
by which it is bound, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company. This
Warrant has been duly and validly


                                       6
<PAGE>

authorized and when issued and paid for in accordance with the terms hereof,
will be duly and validly issued and fully paid and non assessable. Upon proper
exercise of the Warrant, the shares of Common Stock will be duly and validly
issued and fully paid and non assessable.

         14. The Company shall register all of the Warrant Shares in a
Registration Statement that the Company shall be filing within the next four
months from the date hereof and shall maintain the effectiveness of such
Registration Statement for a period of at least two years or file an additional
registration statement at the request of the Holder. In addition, the Company
hereby grants Holder incidental registration rights beginning one year after the
date hereof with respect to all registrations filed by the Company for the six
year period following the date hereof, except for registration statements filed
on forms S-4, S-8 or any comparable or successor forms. In addition, the right
to register shares of the Holder shall be limited by the good faith
determination of the managing underwriter for such offering whether such shares
can be included in such offering. If it is determined that such shares cannot be
included then priority shall first be given to securities being registered on
behalf of the Company, next to the securities of entities making a demand, and
then to the shares of the Holder pro rata with other entities having incidental
registration rights based upon the number of shares being offered for
registration. The Company shall pay the expenses for the preparation of the
registration statements with the Holder responsible for any selling commission
or discount.


Dated: December 21, 1999

                                            iPARTY CORP.


                                            By: /s/ Sal Perisano
                                                ------------------
                                                Name: Sal Perisano
                                                Title: CEO


                                       7
<PAGE>


                               FORM OF ASSIGNMENT


(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

                  FOR VALUE RECEIVED, ________________________________________
hereby sells, assigns, and transfers unto __________________ a Warrant to
purchase __________ shares of Common Stock, $.001 par value per share, of iParty
Corp. (the "Company"), together with all right, title, and interest therein, and
does hereby irrevocably constitute and appoint ___________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.

Dated:
       -----------------------------


                                     Signature
                                               ---------------------------------


Signature Guaranteed:



                                     NOTICE


                  The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.



<PAGE>

To:    iParty Corp.
       41 East 11th Street, 11th Floor
       New York, New York 10003

                              ELECTION TO EXERCISE


                  The undersigned hereby exercises his or its rights to purchase
       _______ Warrant Shares covered by the within Warrant and tenders payment
       herewith [in the amount of $_________] [in the amount of __________
       Warrant Shares] in accordance with the terms thereof, certifies that he
       owns this Warrant free and clear of any and all claims, liens and/or
       encumbrances and requests that certificates for such securities be issued
       in the name of, and delivered to:






                    (Print Name, Address and Social Security
                          or Tax Identification Number)

       and, if such number of Warrant Shares shall not be all the Warrant Shares
       covered by the within Warrant, that a new Warrant for the balance of the
       Warrant Shares covered by the within Warrant be registered in the name
       of, and delivered to, the undersigned at the address stated below.


       Dated:                             Name:
              -------------------              ---------------------------------
                                                          (Print)

       Address:
                ----------------------------------------------------------------

                                        (Signature)