<PAGE>


                               SERVICES AGREEMENT

         Services Agreement, dated July 26, 2000 between SkyAuction.com, Inc.
("Sky") and Magical Holidays, Inc. ("Magical").

         WHEREAS, Magical desires to provide to Sky and Sky desires to receive
from Magical certain services, as described below.

         NOW THEREFORE, the parties have agreed to enter into this Agreement on
the following terms.

1.       The Services. During the term of this Agreement, Magical shall provide
         Sky the following services (collectively, the "Services"):


         a.       Upon Sky's request, Magical shall provide ticketing
                  fulfillment services for travel inventory sold by Sky
                  including, without limitation, printing tickets, record
                  keeping, electronic file maintenance, file access, data
                  storage, security features, report writing functionality and
                  communications with Sky's customers and inventory suppliers
                  (the "Fulfillment Services") for tickets sold and specifically
                  identified by Sky.

         b.       Magical shall: (i) conduct a day-to-day transaction review of
                  Sky's records of fulfilled transactions (the "Transaction
                  Review"); (ii) identify, analyze and report results with
                  respect to the adequacy and accuracy of its records; and (iii)
                  consult Sky with respect to the establishment, development,
                  management and implementation of an automated Transaction
                  Review system for Sky's records ((i), (ii) and (iii)
                  collectively, the "Transaction Review Services").

         c.       Magical shall: (i) allow Sky to use a reasonable amount of
                  resources maintained or held by Magical, including, without
                  limitation, office supplies and equipment, secretarial and
                  clerical services, telephone and data systems, etc.; and (ii)
                  make available to Sky volume discounts with suppliers
                  including credit card processing fees, and use of its credit
                  cards with higher limits than those currently available to Sky
                  (collectively, the "Additional Services").

         d.       Magical shall, at the request of Sky and in consideration for
                  fair market value (based on other offers for such room), make
                  available to Sky, for all periods other than periods
                  identified by Magical to Sky on two weeks advance notice, room
                  33B at Antigua Village, Dickinson Bay, Antigua, British West
                  Indies for the purposes of being auctioned on Sky's website.

         e.       To the extent reasonably requested by Sky consistent with
                  Magical's needs, Magical shall allow Sky to use a portion of
                  the office premises that Magical rents from third parties.

         All Services shall be provided according to the reasonable instructions
of Sky officers.

2.       Compensation. In consideration for the Services, and in addition to
         any other amounts specified in Section 1 above, Sky shall pay Magical
         as follows:

         a.       For each ticket for which Fulfillment Services are provided by
                  Magical, Sky shall pay Magical (i) a fulfillment fee, the
                  amount of which shall be: $20 for the period commencing on the
                  date hereof and ending on May 31, 2001, $25 for the period
                  commencing June 1, 2001 through May 31, 2002, and an amount
                  which shall be negotiated between the parties for any further
                  period (the "Fulfillment Fee"); and (ii) a $5

<PAGE>

                  additional services fee (in connection with the provision of
                  additional services) (the "Additional Services Fee").

         b.       Sky shall pay Magical $50,000 per quarter in consideration for
                  the Transaction Review Services (the "Transaction Review
                  Services Fee").


         c.       Sky shall pay its pro-rata portion (based on the average
                  square footage used by each party for each payment period) of
                  any rent paid with respect to office space which Magical
                  enables it to use.

3.       Right of First Refusal.  Magical shall grant Sky a right of first
         refusal to purchase any inventory to which it has access. For any such
         inventory sold by Sky it shall pay Magical: (i) the direct cost to
         Magical of such inventory; plus (ii) the Fulfillment Fee and the
         Additional Services Fee, if applicable.

4.       Non-Exclusive. This Agreement shall be a non-exclusive arrangement
         between the parties hereto and, subject to the provisions herein, will
         not limit the ability of Sky to purchase or Magical to sell, inventory
         or any other services from or to any third party.

5.       Non-Compete. For as long as this Agreement is in effect and for a
         period of two years thereafter, Magical shall not compete with Sky in
         the business of marketing and selling excess travel inventory utilizing
         an auction process through the Internet.

6.       Representations. Each party hereby warrants, represents and covenants
         to the other that: (i) it is a duly organized corporation, validly
         existing and in good standing in the state of its incorporation; (ii)
         it has the full authority to execute, deliver and perform this
         Agreement; (iii) this Agreement has been duly approved by the
         necessary corporate organs of such party, was duly executed by such
         party, and shall be enforceable against it in accordance with its
         terms; and (iv) the execution of this Agreement by such party does not
         contradict such party's Certificate of Incorporation, By-laws and any
         contract or other instrument to which such party is a party or is
         otherwise subject. In addition, Magical hereby warrants, represents
         and covenants to Sky that the provision of the Services and all other
         obligations of Magical under this Agreement comply with all applicable
         laws and regulations and Magical has all licenses and approvals
         necessary in order to provide the Services and fulfill its obligations
         as described herein.

7.       Term of Certain Services. Sky shall use its reasonable commercial
         efforts to effect, within 180 days of the date hereof, a transition of
         the knowledge and expertise and to implement systems, which shall
         enable it to provide itself with the Transaction Review Services and
         Administrative Services. Upon the completion of such transition and
         implementation and the provision of written notification to such
         effect by Sky to Magical, Magical shall cease providing the
         Transaction Review Services and the Additional Services and Sky shall
         cease paying Magical the Transaction Review Services Fee and the
         Additional Services Fee. At such time, the parties shall renegotiate
         the amount of the Fulfillment Fee.

8.       Term; Termination. This Agreement shall be in effect for a period of
         three years from the date first noted above and unless notice is given
         as provided below shall be automatically renewed for one year periods
         thereafter. Notwithstanding the above: (i) Sky may terminate this
         Agreement at any time, immediately upon providing written notice to
         Magical; and (ii) Magical may terminate this Agreement at any time,
         upon providing Sky 180 days prior written notice.

9.       No Partnership.  Magical shall act as a contractor of Sky and nothing
         in this Agreement shall be construed to create a partnership, agency
         or similar relationship between the parties or otherwise to permit
         Magical, in any way, to undertake any obligation or to bind or make
         any commitment on behalf of Sky.


<PAGE>


10.      Records. Magical shall create and maintain records concerning or
         related to any Services provided to Magical for no less than twelve
         months after such were provided. In addition, Magical shall not dispose
         of any such records without the prior written consent of Sky. Magical
         shall keep confidential and shall not disclose to any person, at any
         time, whether or not this Agreement is then in effect, any such records
         and any and all other information it receives from Sky in connection
         with this Agreement.

11.      Miscellaneous.  This Agreement: shall supersede any other agreements
         and contracts (written or oral) between the parties with respect to
         the subject matter hereof; be binding upon the parties and their
         respective successors and assigns; may be amended by the parties only
         by a written document signed by both parties hereto; shall be
         construed for all purposes in accordance with the laws of the State of
         New York; any and all disputes, disagreements and controversies with
         respect to this Agreement shall first be mediated by the parties
         hereto and, in the event such mediation is unsuccessful, thereafter
         resolved by binding arbitration by a single arbitrator, in New York,
         New York, pursuant to the Commercial Arbitration Rules of the American
         Arbitration Association; and neither party may assign this Agreement
         or any rights herein, or delegate any obligations hereunder, without
         the other party's prior written consent.


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth herein.

         SKYAUCTION.COM, INC.

         By: /s/Salvatore Esposito
            ---------------------------
         Name: Salvatore Esposito
         Title: Chief Operating Officer

         MAGICAL HOLIDAYS, INC.

         By: /s/ Gail Hering
            ---------------------------
         Name: Gail Hering
         Title: Chief Executive Officer