OPTION AGREEMENT

         This OPTION  AGREEMENT  is entered into as of this 19th day of December
2000  between  NetObjects,  Inc.,  a Delaware  corporation  ("NetObjects"),  and
[***].

         WHEREAS, NetObjects' Enterprise Division has developed a product called
NetObjects Collage;

         WHEREAS, [***] desires to purchase an  option to acquire the assets and
the business of NetObjects' Enterprise Division as a going concern; and

         WHEREAS, [***] desires to acquire  or license the rights to the current
versions of NetObjects Collage and any and all upgrades or modifications made to
NetObjects Collage (together, "Collage").

         NOW,  THEREFORE,  in  consideration  of the foregoing and of the mutual
covenants and agreements  hereinafter set forth, the parties hereto hereby agree
as follows:

                                   Article 1.

                           DEFINITIONS AND REFERENCES

         Terms used herein shall have the respective  meanings  assigned thereto
herein  (such  definitions  to be equally  applicable  to both the  singular and
plural forms of the terms defined).  Unless otherwise specified,  all references
herein to "Articles"  or  "Sections"  are to Articles or Sections of this Option
Agreement.

                                   ARTICLE 2.

                            GRANT OF OPTION & LICENSE

         Section 2.1 Grant of Purchase Option.

         (a)  NetObjects   hereby  grants  to [***]  the  exclusive  right  (the
"Purchase  Option") during the term of the Purchase Option to acquire the assets
and the business of NetObjects'  Enterprise  Division for cash  consideration of
$18 million.  For purposes of this Option  Agreement,  the  Enterprise  Division
means that portion of  NetObjects'  business  which  involves  the  development,
marketing, license, installation, distribution, support, maintenance and sale of
products used for an integrated content management  environment for teams of Web
contributors and developers,  while providing  centralized control over the site
production effort; professional services for the training, support,  maintenance
and  installation  of such  products;  and the personnel  employed by NetObjects
directly  in  the  development,  marketing,  installation,  sales,  maintenance,
support,  integration  and licensing of such products,  and  performance of such
services, and shall include,  without limitation,  the rights to Collage and the
rights to any third party  products  incorporated  therein  that  NetObjects  is
entitled to assign,  sublicense or otherwise  transfer.  The Enterprise Division
also includes the products and services provided by the Enterprise Division, and
the rights to continue  such  products and services  would also be


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

acquired with the Enterprise  Division,  provided that the Purchase  Option will
enable [***]  to obtain a perpetual nonexclusive worldwide, royalty- free, field
of use license,  but not title,  to certain  intellectual  property and software
used by  NetObjects  with the  Enterprise  Division  and with  other  NetObjects
products and services.  Such license would include source code (with  subsequent
modifications by NetObjects) for TeamFusion  Client that could be used  by [***]
only to prepare its own derivative works within the field of use. The Enterprise
Division  products  and  services  include any and all  versions of all software
products  of the  Enterprise  Division,  which  include the  following  software
programs  and  products:  NetObjects  TeamFusion  (other  than the  single  user
version),  NetObjects  Authoring Server and NetObjects  Collage  (including both
source code and object code versions  thereof and any and all prior  releases or
versions  of  all  of  them),  and  related  documentation  (including,  without
limitation,  user and  training  manuals and  technical  documentation)  and any
consulting,  training,  evaluating or similar service provided by the Enterprise
Division. Completion of the purchase shall be subject to the parties' compliance
with the respective corporate laws and charter documents currently applicable to
each party and the  expiration  of  pre-merger  notification  periods under U.S.
federal and U.K. antitrust laws.

         (b) The Purchase  Option  shall  expire on January 5, 2001,  unless the
parties otherwise agree in writing to extend this date.

         Section 2.2 Grant of License.

         (a) As of the date of expiration of the Purchase  Option as provided in
Section 2.1(b), NetObjects hereby grants to [***]  a fully-paid,  non-exclusive,
worldwide right and license to: (1) use, copy, market,  promote,  distribute and
sublicense Collage and any third party products  incorporated  therein in object
code format only to end users and  distributors,  (2) use a reasonable number of
copies of Collage and any third party  products  incorporated  therein in object
code format only for demonstration,  maintenance,  support and training purposes
and authorize  distributors to use a reasonable  number of copies of Collage and
any third party products incorporated therein for such purposes,  (3) translate,
copy, in whole or in part,  and distribute  and authorize  distributors  and end
users  to  translate,  copy,  in  whole  or in  part,  and  distribute  any user
documentation  associated with Collage,  including local language  translations,
for use in connection with this Section 2.2(a), (4) translate, copy, in whole or
in part,  and distribute and to authorize  distributors  to translate,  copy, in
whole or in part, and distribute any sales literature,  including local language
translations,  for Collage,  and (5) use, modify and prepare derivative works of
the source code of Collage solely in accordance  with Section 2.04(b) of Exhibit
A which is hereby incorporated by reference (the "License").

         (b) The parties  intend that the  License  granted in this  Section 2.2
shall be  subject to  additional  terms and  conditions  set forth in a separate
license  agreement (the "License  Agreement") in substantially the form attached
as Exhibit A. Furthermore, the parties agree that the provisions of this Section
2.2 are valid and  enforceable  even if such License  Agreement is not concluded
unless  NetObjects  refunds  the Option and  License  Price and  terminates  the
License  Agreement in accordance with Section 3(b). If NetObjects so refunds the
Price and terminates the License  Agreement,  the provisions of this Section 2.2
terminate,  with the sole exception of the last sentence of 2.2(d) providing for
the


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

continuance of certain licenses granted by [***]  during the term the License is
in effect.

         (c) The parties  agree that the  provisions of Section 1.02 and Section
3.01 of Exhibit A are a part of this Agreement.

         (d) The License granted in this Section 2.2 shall terminate on December
31, 2003,  provided,  however,  that if (i) the parties  enter into a definitive
agreement  for the sale and  purchase of the  Enterprise  Division and close the
transaction  contemplated  therein  by March 1,  2001,  then the  License  shall
terminate  upon  such  closing,  or (ii)  NetObjects  exercises  its  option  to
terminate  under  Section  3(b),  then the License  will  terminate  as provided
therein. Any and all sublicenses to Collage which have been granted by [***] all
continue in accordance with their terms  notwithstanding  any termination of the
License; provided that any such licenses must be object code only and, as to any
sublicensee other than an end user, will expire on or before December 31, 2003.

         Section 2.3 IBM Investment.

         NetObjects  also agrees that in connection  with the exercise by  [***]
of the Purchase  Option,  NetObjects  will  cooperate  with [***]  to obtain the
agreement  of  International  Business  Machines,  Inc.  to take  the  following
actions:

         (a) Purchase up to [***] of [***]  outstanding [***] on the open market
or, if less, [***] million of such [***] following or concurrent with the public
announcement  of the completion of [***] purchase of the Enterprise  Division of
NetObjects as contemplated in Section 2.1 and,  concurrent with  NetObjects' and
[***]  announcement  of their  agreement  for [***]  purchase of the  Enterprise
Division,  IBM will announce its intent to make such  purchase.  As part of such
investment  transaction,  and unless otherwise agreed by IBM and [***],  neither
IBM nor any other  persons  acting in concert  with IBM will  acquire  shares of
[***]  representing  more  than  [***] of the  aggregate  voting  power of [***]
outstanding shares for two years from the date of this Option Agreement.

         (b) Enter into a strategic relationship with [***] , which may include,
but not be limited to co-marketing, sales and public relations activities.

                                    ARTICLE 3

                          PAYMENT FOR OPTION & LICENSE

         In  consideration  for the Purchase  Option and License  granted above,
promptly after this Option  Agreement is signed by both parties [***]  shall pay
to  NetObjects  the sum of Four Million  Dollars  ($4,000,000)  (the "Option and
License  Price")  by wire  transfer  of  immediately  available  funds to a bank
account designated by NetObjects. The Option Price shall be credited as follows:

         (a) In the event the  parties  complete  the  purchase  and sale of the
Enterprise  Division  as  contemplated  under  Section  2.1,  the  amount of the
purchase  price for the  Enterprise  Division shall be reduced by the Option and
License Price already paid.


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

In the event the purchase and sale of the  Enterprise  Division is not completed
by January 31, 2001, for reason other than the fault of NetObjects including its
failure to obtain  shareholder  approval of the transaction,  then [***]  shall,
within 30 days following receipt of NetObjects'  invoice,  reimburse  NetObjects
for the portion of the reasonable  expenses of the Enterprise  Division incurred
by NetObjects after January 31, 2001 and until March 1, 2001; provided, however,
that  [***]   does not  assume  any  liability  to any  third  parties  for such
expenses.

         (b) In the event the parties either are unable to enter into definitive
agreements or are unable to close the transactions contemplated thereby by March
1, 2001, the Option and License Price represents payment in full for the License
granted in Section 2.2 and the License Agreement contemplated therein;  provided
that  NetObjects,  at its  option,  may refund the Option and  License  Price to
[***]  and terminate the License Agreement upon written notice to [***].

                                   Article 4.

                               GENERAL PROVISIONS

         Section 4.1. Notices. All notices,  requests, claims, demands and other
communications  given or made pursuant  hereto shall be in writing (and shall be
deemed to have been duly given or made upon  receipt) by delivery in person,  by
telecopy (with confirmation copy of such telecopied material delivered in person
or by registered or certified mail,  postage prepaid,  return receipt requested)
or by registered or certified mail (postage prepaid,  return receipt  requested)
to the respective  parties at the following  addresses (or at such other address
for a party as shall be  specified  in a notice  given in  accordance  with this
Section).

         If the notice is to [***]:

                                    [***]


         If the notice is to NetObjects:

                                    NetObjects, Inc.
                                    301 Galveston Road
                                    Redwood City, California 94063
                                    Attn:  Chief Executive Officer
                                    Telecopier:  (650) 482-3600

or such other  address and to the  attention  of such other person as such party
may designate by written notice to such other party.

         Section 4.2. Entire Agreement.  This Option Agreement together with the
License  Agreement and Escrow  Agreement  constitute the entire agreement of the
parties


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

hereto  with  respect  to the  subject  matter  hereof and  supersede  all prior
agreements and undertakings,  both written and oral, with respect to the subject
matter hereof.

         Section 4.3. Successors and Assigns.  Neither [***]  nor NetObjects may
assign any of its rights or obligations  hereunder.  This Option Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective successors and assigns.

         Section 4.4.  Third-Party  Beneficiaries.  This Option Agreement is for
the sole benefit of the parties hereto and their  permitted  assigns and nothing
herein  expressed  or implied  shall give or be construed to give to any person,
other than the parties  hereto and such assigns,  any legal or equitable  rights
thereunder.

         Section  4.5.  Amendment;  Waiver.  This  Option  Agreement  may not be
amended or modified  except by an  instrument  in writing duly  executed by each
party  hereto.  Waiver of any term or condition of this Option  Agreement  shall
only be  effective if in a writing  signed by the party to be charged  therewith
and shall not be construed as a waiver of any subsequent breach or waiver of the
same  term or  condition,  or a waiver of any other  term or  condition  of this
Option Agreement.

         Section 4.6. Governing Law. This Option Agreement shall be governed by,
and construed in accordance  with, the laws of the State of Maryland  applicable
to contracts executed and performed in that state.

         Section 4.7. Confidentiality.  Neither [***]  nor NetObjects shall make
any public  disclosure  of this Option  Agreement  unless  required by law. Each
party will  maintain  strict  confidentiality  with respect to all documents and
information furnished by the other party.

         Section 4.8.  Counterparts.  This Option  Agreement  may be executed in
counterparts  and a  party's  delivery  of a copy  of  signature  page  of  this
Agreement by electronic  facsimile will constitute the party's due execution and
delivery of this Agreement.

         IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed as of the date first above written  individually or by their respective
officers thereunto duly authorized.

                                      [***]

                                      By: /s/
                                         ---------------------------------------

                                      Name:
                                           -------------------------------------

                                      Title:
                                            ------------------------------------

                                      NETOBJECTS, INC.

                                      By: /s/ Samir Arora
                                         ---------------------------------------

                                      Name:
                                           -------------------------------------

                                      Title:     CEO
                                            ------------------------------------


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

                                    Exhibit A

                           SOFTWARE LICENSE AGREEMENT

         NetObjects,  Inc.,  a  Delaware  corporation,  having  an office at 301
Galveston  Road,  Redwood  City,   California  94063  ("Licensor"),   and  [***]
("Licensee"), enter into this Agreement on ________, 2000 (the "Effective Date")
pursuant to the terms of the Option  Agreement  dated as of December  19, 2000 (
the "Option Agreement") and hereby agree as follows:

ARTICLE I

1.01     License Grant

         (a)  NetObjects  hereby grants to [***]  a  fully-paid,  non-exclusive,
worldwide right and license to: (1) use, copy, market,  promote,  distribute and
sublicense  the  Business  Products  and any third party  products  incorporated
therein in object  code  format  only to end users and  distributors;  (2) use a
reasonable  number of copies  (as  provided  in  Section  1.02) of the  Business
Products and any third party products incorporated therein in object code format
only for demonstration, maintenance, support and training purposes and authorize
distributors to use a reasonable  number of copies of the Business  Products and
any third party products incorporated therein for such purposes;  (3) translate,
copy, in whole or in part,  and distribute  and authorize  distributors  and end
users  to  translate,  copy,  in  whole  or in  part,  and  distribute  any user
documentation  associated with the Business  Products,  including local language
translations,  for use in connection with this Section  1.01(a),  (4) translate,
copy,  in  whole  or in part,  and  distribute  and  authorize  distributors  to
translate,  copy,  in whole or in part,  and  distribute  any sales  literature,
including local language  translations,  for the Business Products, and (5) use,
modify  and  prepare  derivative  works  of  the  Business  Products  solely  in
accordance with Section 2.04(b) (the "License").

1.02     Royalties and Reports

         (a)  Royalties.  Licensee  shall pay  Licensor a royalty of $15,000 per
copy of the Business  Products made or  distributed by or for Licensee under the
License (the  "Royalty").  Within 30 days after the end of each month,  Licensee
shall  provide  to  Licensor  a written  report  detailing  the number of copies
subject to royalty distributed during such month. After receipt of the foregoing
actual reports,  Licensor will invoice Licensee accordingly.  Licensor's invoice
will  identify  that portion of the Royalty which  represents  reimbursement  to
Licensor  for  royalties  payable by it in respect of third  party  intellectual
property  contained in the Business  Products (the "Third Party  Royalty"),  and
upon request  Licensor will furnish  documentation  of the Third Party  Royalty.
Licensee  shall be credited  with a pre-paid  amount of $4 million to be applied
against the invoiced amounts for Royalty excluding the Third Party Royalty.  Any
portion of the pre-paid amount remaining to Licensee's  credit at the end of the
initial  term  of  this  Agreement,   as  defined  in  Section  2.01,  shall  be
nonrefundable  and will be retained by Licensor.  Licensee will pay the invoiced
amounts for Third Party Royalty within 30 days of invoice.

         (b) Internal Use and Demonstration Copies. Licensee may make ten copies
of the Business  Products and any third party products  incorporated  therein in
object code  format  only,  for


[***] omitted pursuant to a request for confidential treatment.
<PAGE>

Licensee's own internal use,  demonstration,  maintenance,  support and training
purposes and authorize  distributors to use such copies for such purposes,  free
of royalty obligation to Licensor. In addition to the ten copies of the Business
Products that Licensee may make free of royalty obligation to Licensor, Licensee
may make up to 40 additional copies of the Business Products and any third party
products  incorporated  therein,  in object code format only, for Licensee's own
internal  use,  demonstration,  maintenance,  support and training  purposes and
authorize  distributors to use such copies for such purposes, and Licensee shall
be liable to Licensor for Third Party Royalty (but no other  royalty) on such 40
additional copies.

         (c) Records.  Licensee  shall keep (and shall require its  subsidiaries
and  distributors  to keep) accurate and complete books and records  relating to
the  reproduction  and  sublicensing  of the Business  Products.

         (d) Auditing. Licensor shall have the right (and Licensee shall require
subsidiaries who distribute  Business Products to grant the right),  exercisable
no more than once in any calendar year, to have an independent  certified public
accountant  inspect  and audit the  records of the other  party  referred  to in
Section  1.02(c).  Such audit shall be conducted upon reasonable  written notice
during normal  business  hours and at a time and place  mutually  agreed upon by
both parties.  Such independent  certified public accountants shall be permitted
to report to the party  requesting  the audit  only  information  regarding  the
compliance of the audited  party's record keeping with this Section  1.02(c) and
payments that may be owing to the party  requesting the audit. If any such audit
reveals a shortfall  of greater than five (5%)  percent in  unreported  payments
owed but not made,  the party  requesting  the audit shall be  reimbursed by the
other party for the reasonable expense of such audit.

         (e) Taxes. All fees and royalties are exclusive of all taxes, duties or
levies,  however  designated or computed.  Licensee shall be responsible for and
pay all  taxes  based  upon the  transfer,  use,  or  distribution  of  Business
Products, or upon payments by Licensee under this Agreement,  including, but not
limited to, sales,  use, or value-added  taxes,  duties,  withholding  taxes and
other  assessments  now or  hereafter  imposed  on or in  connection  with  this
Agreement or with any  sublicense  granted  hereunder,  exclusive of taxes based
upon Licensor's income,  revenues or gross receipts.  In lieu thereof,  Licensee
may provide to Licensor a tax or other levy exemption certificate  acceptable to
the taxing or other levying authority.

1.03     Nonassignability

         (a)  Licensor  has entered  into this  Agreement  in  contemplation  of
personal  performance by Licensee and it is Licensor's intention that a transfer
of Licensee's  licenses not occur without  Licensor's  express written  consent,
except as provided in Section 1.03(d).

         (b) Neither this Agreement nor any licenses  hereunder,  in whole or in
part,  shall be assignable or transferable by Licensor or Licensee (by operation
of law or otherwise)  without the other party's express written consent,  except
as provided in Section 1.03(d).

         (c) Any purported  assignment or transfer of this Agreement or licenses
hereunder by Licensee without the other party's  necessary consent shall be void
(without affecting any other licenses or rights hereunder).

         (d)  Notwithstanding  (a), (b) and (c) above,  this  Agreement  and any
license grants hereunder shall be assignable or transferable by Licensee without
Licensor's  consent in connection

                                      -2-
<PAGE>

with Licensee's  sale of all or  substantially  all of its business  relating to
distributing the Business Products.

1.04     Publicity

         Nothing  in this  Agreement  shall  be  construed  as  conferring  upon
Licensee  any right to include in  advertising,  packaging  or other  commercial
activities  related to a Business Product,  any reference to Licensor (or any of
its  Subsidiaries),  its trade names,  trademarks or service  marks  (including,
without  limitation,  "NetObjects")  in a manner  which would be likely to cause
confusion or to indicate that such  Business  Product is in any way certified by
Licensor, its Subsidiaries or its controlling  affiliates.

1.05 Compliance With Export Laws

         Licensee  hereby  assures  Licensor  that Licensee will comply with all
applicable U.S. export laws.

                                   ARTICLE II

2.01     Term

         (a) The initial  term of the License  granted in this  Agreement  shall
terminate  on December  31,  2003,  provided,  however,  that if (i) the parties
complete  the sale  and  purchase  of the  Enterprise  Division  and  close  the
transaction  contemplated  under the  Option  Agreement  by March 1,  2001,  the
License shall  terminate  upon such closing,  or (ii)  NetObjects  exercises its
option under Section 3(b) of the Option Agreement, the License will terminate as
provided therein.

         (b) For as long as this  Agreement  remains in  effect,  within 60 days
prior  to the  end of the  initial  term  and 60 days  prior  to the end of each
successive one calendar year term thereafter, Licensee may renew the term of the
license by written  notice to  Licensor  provided  that  Licensee is not then in
default of any obligation of Licensee under this Agreement.

         (c) Licensor may terminate this Agreement and the license granted under
Section 1.01 at any time upon 45 days' written notice to Licensee if Licensee is
in default of any  material  obligation  of Licensee  under this  Agreement  and
Licensee  fails to cure the default  within the 45 days after written  notice of
default is sent by Licensor.

         (d) Any and all  sublicenses  to  Collage  which  have been  granted by
Licensee or its  distributors to their customers  during the term of the License
shall continue in accordance with their terms notwithstanding any termination of
the License.

2.02     No Other Licenses Implied

         No licenses are granted to Licensee with respect to any of the Business
Products   Intellectual   Property   except  as   provided   in  Section   1.01.
Notwithstanding the provisions of Article I, it is hereby expressly acknowledged
and agreed by Licensee that the licenses shall not include,  and Licensor is not
licensing or transferring, nor is Licensee acquiring or accepting from Licensor,
any patents,  licenses,  or rights  applicable  to the  non-Business  portion of
Licensor's   operations,   including,   but  not  limited  to,  any  Proprietary
Information  used in products and  services of Licensor  other than the Business
Products or Business Services.

                                      -3-
<PAGE>

2.03     Non-Solicitation

         Licensee represents to Licensor,  and agrees, that during the 12 months
after  the  Effective  Date  Licensee  will not make  any  offer of  employment,
directly  or   indirectly,   or   otherwise   solicit   other  than  by  general
advertisement,  any  individual  who is employed by Licensor as of the Effective
Date.

2.04     Maintenance and Support

         (a) Licensor will designate a primary  contact and a back-up contact to
provide at no  additional  charge Level 3  maintenance  service to Licensee.  In
particular,   Licensor  will  provide   diagnostic   services  and   resolutions
(workarounds, patches, corrected versions, etc.) in the manner provided to other
distributors.

         (b) At  Licensee's  request,  Licensor  will make  available up to four
qualified  employees or consultants at reasonable  rates for  customization  and
integration  of the Business  Products into  Licensee's  software  products.  If
Licensor is unable or unwilling to provide  these  services in a timely  manner,
then Licensee will have the ability and right to access the escrowed source code
for the purpose of performing these services itself.

                                  ARTICLE III

3.01     Source Code Escrow

         Licensor has escrowed  the source code for the Business  Products  with
Data  Security  International,  Inc.  ("DSI")  or such  escrow  agent that might
replace DSI at a subsequent date.  Licensor will maintain such escrow during the
term of the  Agreement.  Licensor  will list  Licensee as a  beneficiary  of the
source code escrow  pursuant to the terms of the  standard  "Source  Code Escrow
Agreement,"  used by DSI as  revised to conform  to this  Article  III.  For the
purposes of this Amendment:

         (a) the Business  Products  will be deemed  Escrowed  Materials as such
term is used in the Escrow Agreement;


         (b)  Notwithstanding  anything in the Escrow Agreement to the contrary,
when requesting access to or a copy of any Escrowed Material,  Licensee shall in
writing agree and confirm that it will have only the license  rights  granted to
it by the Option Agreement and this Software License  Agreement.  Licensee shall
further in writing agree and confirm that the Escrowed  Material shall be deemed
confidential  Information of Licensor  pursuant to the  Confidential  Disclosure
Agreement  between  Licensor and Licensee as of August 31, 2000, with the actual
date of disclosure of the Escrowed  Materials being deemed the initial and final
disclosure  date of  disclosure  thereunder.

         (c) So long as Licensee is current with its  obligations  at that time,
Licensee  shall be entitled to obtain the source  code,  limited to the Business
Products,  under this  Agreement  if  Licensor  (i) fails to make  available  or
perform  maintenance and support services,  including the services  described in
Section 2.04, for the Business  Products pursuant to the terms of this Agreement
during a period in which  Licensee is entitled to such services and Licensor has
not promptly  cured such failure  despite  Licensee's  demand that Licensor make
available or perform such  services;  (ii) files or is the subject of the filing
of a  petition  by or  against  Licensor  for  relief  under the  United  States

                                      -4-
<PAGE>

Bankruptcy  Code,  makes a general  assignment  for the  benefit  of  creditors,
appoints  or has  appointed  a general  receiver  or trustee in  bankruptcy  for
Licensor's business or property, provided that any such events will not apply if
within  30  days  thereafter  Licensor  or  its  receiver  or  trustee  provides
assurances,  reasonably  satisfactory  to  Licensee,  of  Licensor's  continuing
ability  and  willingness  to  fulfill  all  material   obligations  under  this
Agreement; or (iii) ceases business operations generally,  unless within 30 days
thereafter a capable successor to the Business Products and Services, reasonably
satisfactory to Licensee,  agrees to continue to make available and perform such
maintenance  and  services.  Upon  release of the source code from escrow it may
only be used, executed, and reproduced by Licensee internally for the purpose of
providing support and maintenance of Business  Products,  and for the purpose of
customization  and  integration  of the Business  Products  with the  Licensee's
software  products,  including without  limitation the preparation of derivative
works  consisting of bug fixes and updates,  which  Licensee may  distribute and
sublicense  externally  in object  code  form  only,  and for no other  purpose.
Licensee must continue to pay the Royalty on the Business Products, as specified
in  Section  1.02(a)  and at all  times  during  which it has the  source  code;
provided,  however,  that if Licensee has obtained the source code due to any of
the  contingencies  specified in clauses (ii) and (iii) of this Section 3.01(c),
the Royalty payable under Section 1.02(a) shall be reduced from $15,000 per copy
to $10,000 per copy.

                                   ARTICLE IV

         The provisions of Article 4 of the Option Agreement shall apply mutatis
mutandis to this Agreement.

                                    ARTICLE V

5.01     Trademarks and Trade names.

         (a) Trademark  Rights.  Licensor hereby represents that Licensor is the
owner of all right,  title,  and interest in and to those  trademarks  listed in
Appendix I ("Trademarks") and Licensee agrees that it does not acquire any right
hereunder  to adopt or use the  Trademarks  in any manner  whatsoever  except as
expressly provided in this Agreement.

         (b) Use of  Trademarks.  During  the term of this  Agreement,  Licensor
grants Licensee a nonexclusive,  worldwide, field of use license (revocable only
in  accordance  with this  Agreement)  to use the  Trademarks  to  identify  the
Business  Products  for  Licensee's   marketing   promotion,   distribution  and
sublicensing of the Business Products and Business Services. In carrying out its
licensed  marketing,   promotion,   distribution  and  sublicensing  activities,
Licensee  shall  use the  Trademarks  in the same  manner as  Licensor  uses the
Trademarks.  Any goodwill attaching to a party's  trademarks,  service marks, or
trade names  belongs to such party and this  Agreement  does not grant the other
party any right to use them except as set forth explicitly  herein.  If Licensor
objects to Licensee's  improper use of Licensor's names or trademarks,  Licensee
will take all  reasonable  steps  necessary  to resolve  Licensor's  objections.
Licensee may combine the Trademarks with its own name and current trademarks but
not with any other  names or marks,  and  agrees  that this  Agreement  does not
constitute  any  conveyance  of  any  right,  title  or  interest  in or to  any
Trademarks,  except for the permitted uses provided herein.

         (c)  Infringements.  Licensee  shall use  reasonable  efforts to notify
Licensor of an  infringement  or attempted  infringement  by third  parties of a
Trademark,  and shall  cooperate  with


                                      -5-
<PAGE>

Licensor at Licensor's  expense in taking  action  against such third party with
respect to such infringement.

                              ARTICLE VI. Warranty.

         (a) Warranty on Software.  Licensor warrants that the Business Products
will conform in all material respects to their written documentation at the time
of delivery to Licensee and for a period of 30 days  thereafter.  Licensor makes
no warranty to the end-users of Business  Products,  and any such warranty shall
be made and honored by Licensee  alone.  Licensor also warrants that: (i) it has
the right to enter into this  Agreement and its  performance  of this  Agreement
will not violate  the terms of any  contract,  obligation,  law,  regulation  or
ordinance  to which it is or becomes  subject;  (ii) no claim,  lien,  or action
exists or is threatened  against  Licensor that would  interfere with Licensee's
rights under this  Agreement;  (iii) the Business  Products are safe for any use
consistent  with  and  will  comply  with  the  warranties,  specifications  and
requirements  in this Agreement;  (iv) support  services will be performed using
reasonable care and skill; (v) the Business  Products and support services which
interact in any capacity  with date data are Year 2000 ready such that when used
in accordance with their associated  documentation they are capable of correctly
processing, providing, receiving and displaying date data, as well as exchanging
accurate  date data with all  products  with  which the  Business  Products  and
support  services are intended to be used within and between the  twentieth  and
twenty-first  centuries;  (vi) the Business  Products and support services which
interact in any capacity with monetary data are  euro-ready  such that when used
in accordance with their associated  documentation they are capable of correctly
processing  monetary  data in the  euro  denomination  and  respecting  the euro
currency  formatting  conventions  (including the euro sign); (vii) the Business
Products  will be tested  for,  and do not  contain,  harmful  code;  (viii) the
Business  Products and support services do not infringe any privacy,  publicity,
reputation or intellectual property right of a third party; and (ix) all authors
have agreed not to assert their moral rights  (personal  rights  associated with
authorship  of a work under  applicable  law) in the Business  Products,  to the
extent permitted by law. EXCEPT FOR THE FORGOING REPRESENTATIONS AND WARRANTIES,
NO OTHER WARRANTY OR CONDITION,  EXPRESSED OR IMPLIED,  INCLUDING  WARRANTIES OR
CONDITIONS  RELATED TO FITNESS FOR A PARTICULAR PURPOSE OR  MERCHANTABILITY,  IS
GRANTED TO LICENSEE OR END USERS,  AND ALL SUCH  WARRANTIES  AND  CONDITIONS ARE
EXPRESSLY EXCLUDED.

         (b) Defective  Software.  Should the Business Products fail to meet the
warranty set forth above,  Licensor will, at its sole option,  repair or replace
the  Business  Products  such that they conform to their  Documentation.  In the
event such options are not  commercially  practical,  Licensor  shall return any
Royalty Payment paid for such defective Business Products.

         (c) Remedies. ARTICLES VI and VII CONTAIN THE EXCLUSIVE REPRESENTATION,
WARRANTIES AND ASSOCIATED REMEDIES FOR ANY CLAIM ASSOCIATED WITH THE PERFORMANCE
OF THE BUSINESS PRODUCTS,  REGARDLESS OF WHETHER SUCH CLAIM IS MADE IN CONTRACT,
TORT OR ON OTHER LEGAL THEORY.

                 ARTICLE VII -- Liability and Indemnification.

                                      -6-
<PAGE>

         (a) Limitations on Liability. Each party to this Agreement agrees that,
regardless  of the form of any claim,  SUCH  PARTY'S  SOLE  REMEDY AND THE OTHER
PARTY'S SOLE  OBLIGATION  SHALL BE GOVERNED BY THIS  AGREEMENT,  AND IN NO EVENT
SHALL  EITHER  PARTY'S  LIABILITY  EXCEED THE  GREATER OF $4 MILLION OR THE FEES
ACTUALLY PAID FOR THE BUSINESS PRODUCT(S) THAT GAVE RISE TO THE CLAIM DURING THE
12 MONTH  PERIOD  IMMEDIATELY  PRECEDING  THE  CLAIM,  PROVIDED  THAT THE  ABOVE
LIMITATION SHALL NOT APPLY TO CLAIMS FOR INFRINGEMENT PURSUANT TO SECTION (c) OF
ARTICLE  VII OF THIS  AGREEMENT,  EXCEPT FOR CLAIMS FOR PATENT  INFRINGEMENT  IN
OTHER COUNTRIES  (HEREINAFTER  DEFINED).  EACH PARTY EXPRESSLY AGREES THAT IN NO
EVENT  SHALL THE OTHER  PARTY BE LIABLE  FOR ANY  CONSEQUENTIAL,  INCIDENTAL  OR
SPECIAL  DAMAGES,  WHETHER  UNDER  BREACH  OF  WARRANTY,   BREACH  OF  CONTRACT,
NEGLIGENCE, OR ANY OTHER LEGAL THEORY, WHETHER IN TORT OR CONTRACT, EVEN IF SUCH
OTHER  PARTY HAS BEEN  APPRISED OF THE  LIKELIHOOD  OF SUCH  DAMAGES  OCCURRING,
INCLUDING  WITHOUT  LIMITATION  DAMAGES FROM  INTERRUPTION OF BUSINESS,  LOSS OF
PROFITS OR BUSINESS  OPPORTUNITIES,  LOSS OF USE OF SOFTWARE, LOSS OF DATA, COST
OF RECREATING DATA, COST OF CAPITAL,  COST OF ANY SUBSTITUTE SOFTWARE, OR LOSSES
CAUSED BY DELAY. THE PARTIES ACKNOWLEDGE AND AGREE THAT DAMAGES ARISING DIRECTLY
FROM A THIRD PARTY CLAIM OR SUIT BROUGHT  AGAINST  LICENSEE AS  CONTEMPLATED  BY
SECTION (c) OF ARTICLE VII ARE DEEMED TO BE ACTUAL AND DIRECT DAMAGES.  Licensee
shall not be responsible  for any damages or expenses  resulting from alteration
or unauthorized use of the Business  Products,  or from unintended or unforeseen
results obtained by Licensee resulting from such use.

         (b) Warranty  Exclusions.  Should any law under which this Agreement is
interpreted prohibit exclusion of certain conditions or warranties, the required
conditions or warranties shall be deemed  included.  The liability of each party
for any breach of such term,  condition  or warranty  shall be  limited,  at the
option of such party,  to any one or more of the following,  as applicable:  (i)
replacement of the Business Products with functionally comparable software; (ii)
repair of the  Business  Products to meet the  required  warranty or  condition;
(iii)  payment of the cost of replacing  the  Business  Products or of acquiring
equivalent  software;  (iv) payment of the cost of having the Business  Products
repaired;  or (v) a refund or payment of an amount equal to of the fees paid for
the Business Products giving rise to the claim.

         (c) Intellectual  Property Right  Infringement.  Licensor shall, at its
cost,  defend or, at its sole option,  settle any claim or suit brought  against
Licensee for infringement by any Business Product of any copyright, trademark or
trade secret or any United  States,  Canadian,  Mexican,  Australian,  Japanese,
Chinese,  Indian,  Israeli or European  Community  Country  ("Named  Countries")
patent or subject to the  limitation  of  liability  set forth in Section (a) of
Article  VII,  any patent in countries  outside of the Named  Countries  ("Other
Countries")  provided that Licensee (i) notifies Licensor promptly in writing of
any such claim or suit;  (ii) gives  Licensor  all relevant  information  in its
possession and reasonable  assistance in settling and/or defending the suit; and
(iii) gives Licensor full authority and control of the defense and/or settlement
of any such action, provided that Licensee may participate in the defense at its
expense.  Licensor  shall not be liable for any costs or  expenses  incurred  by
Licensee (i) without  Licensor's  prior  written  authorization  with respect to
legal defense costs and expenses  only;  (ii) for any claim that arises in whole
or in part from the use of non-


                                      -7-
<PAGE>

Business  Products  to the  extent  that  such a claim  is based  solely  on the
combination, operation or use of the Business Products with programs or data not
supplied byLicensor;  or (iii) for any claim based on Licensee's modification of
the  Business  Products to the extent  that such a claim is based  solely on the
combination, operation or use of the Business Products with programs or data not
supplied by Licensor,  if such infringement  would have been avoided but for the
combination,  operation or use of the Business Products with such other programs
or data. If the Business  Products become subject to a claim of infringement for
which Licensor may become liable,  Licensor  shall,  to the extent  commercially
feasible  (i) obtain  for  Licensee  the right to  continue  using the  Business
Products;  or (ii)  replace  or  modify  the  Business  Products  to  make  them
non-infringing,  so long as the replacement or modification meets  substantially
similar specifications; or, (iii) if (i) and (ii) are not commercially feasible,
Licensor may terminate  this  Agreement and refund to Licensee the royalties and
license  fees  paid  under  this  Agreement.   EXCEPT  FOR  THE  INDEMNIFICATION
OBLIGATIONS  PROVIDED IN THIS  AGREEMENT,  LICENSOR  SHALL HAVE NO  LIABILITY TO
LICENSEE OR ITS CUSTOMERS FOR  COPYRIGHT,  PATENT,  TRADEMARK OR TRADE SECRET OR
ANY OTHER CLAIM ASSOCIATED WITH INFRINGEMENT OF A PROPRIETARY RIGHT

LICENSOR:                                    LICENSEE:
NetObjects, Inc.                             [***]

By:                                          By:
    ------------------------------------         -------------------------------

Name:                                        Name:
      ----------------------------------           -----------------------------

Title:                                       Title:
       ---------------------------------            ----------------------------

Date:                                        Date:
      ----------------------------------           -----------------------------





[***] omitted pursuant to a request for confidential treatment.
                                      -8-
<PAGE>


                              DEFINITIONS APPENDIX

         Terms used herein or in the Technology  License Agreement to which this
Definition Appendix is attached shall have the meanings assigned below:

         "Business" means the Enterprise  Division of NetObjects as described in
Section 2.1 of the Option Agreement.

         "Business Products" means NetObjects Collage version 1.5 (consisting of
the  software  products  identified  in Schedule C "Collage  Standard  Licensing
Package" and Schedule D "Collage  Additional  Licensing  Options" to  Licensor's
standard  Collage  Software  License  and  Services  Agreement),  and also means
NetObjects  Collage version 2.0 as of the date of its first commercial  shipment
by  NetObjects,  and any other  versions,  releases,  editions  and  upgrades to
Collage during the term of this Agreement.

         "Business   Products   Intellectual   Property"   means  the   patents,
copyrights,  trademarks  applicable  to the  Business  Products and the Business
Products  Proprietary  Information  that  NetObjects  owns or has the  right  to
license to [***].

         "Business  Products  Proprietary  Information"  means  all  information
(whether or not  protectable by patent,  copyright,  or trade secret rights) not
generally  known  to the  public,  including,  but  not  limited  to,  works  of
authorship,   inventions,   discoveries,   patentable  subject  matter,  product
information  and  development  work-in-process  used  by  the  Business  by  the
Effective  Date which are needed or  desirable  to produce  and market  Business
Products and to provide Business Services.

         "Business  Products  Trademarks"  means those trademarks  identified in
Appendix III.

         "Business  Services"  means any  consulting,  training,  evaluating  or
similar service related to the Business Products.

         "End  User"  means a customer  of  Licensee  whose use of the  Business
Products  in  object   code   format  is  limited  to   internal   use  and  not
redistribution.

         "Subsidiary" of a company means a corporation or other legal entity (i)
the majority of whose shares or other  securities  entitled to vote for election
of directors  (or managing  authority)  is now or hereafter  controlled  by such
company either directly or indirectly,  or (ii) which does not have  outstanding
shares or securities but the majority of whose ownership  interest  representing
the right to manage such  corporation  or other legal entity is now or hereafter
owned and controlled by such company either directly or indirectly, but any such
corporation  or other legal entity  shall be deemed to be a  subsidiary  of such
company only as long as such control or ownership and control exists.


[***] omitted pursuant to a request for confidential treatment.
                                      -9-
<PAGE>


                                   APPENDIX I

                               LICENSED TRADEMARKS

1.       PageDraw
2.       SiteStyles
3.       SiteStructure
4.       AutoSites
5.       Everywhere HTML
6.       "The Web needs you"
7.       NetObjects TeamFusion
8.       NetObjects Fusion
9.       TeamFusion
10.      NetObjects Collage
11.      NetObjects Authoring Server
12.      NetObjects Content Contributor Client
13.      NetObjects ScriptBuilder


                                      -10-