<PAGE>

                                                                EXHIBIT 10.36

                       ENVIRONMENTAL INDEMNITY AGREEMENT


                  THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT") is
made as of December 14, 1999, by The Faxon Company, Inc., a Delaware corporation
having an address at 15 Southwest Park, Westwood, Massachusetts 02090 ("Faxon"),
McGregor Subscription Service, Inc., an Illinois corporation ("McGregor"), The
Turner Subscription Agency, Incorporated ("Turner"), RoweCom, Inc., a
Massachusetts_corporation ("RoweCom"), and Dawson, Inc., a Delaware corporation
("Dawson"; together with Faxon, McGregor, Turner and RoweCom, are collectively
the "INDEMNITOR"), in favor of American National Bank and Trust Company of
Chicago, a national banking association having an address at 120 S. LaSalle
Street, 8th Floor, Chicago, Illinois 60603 (the "LENDER"). All capitalized terms
not defined herein shall have the same meanings set forth in the Mortgage (as
hereinafter defined).

                        W I T N E S S E T H:

                  WHEREAS, pursuant to that certain Loan and Security Agreement
dated as of the date hereof, as amended, renewed or restated from time to time
(collectively the "Loan Agreement"), Lender is making one or more loans to
Faxon, McGregor and Turner (collectively the "Borrower"), in the aggregate
principal amount of Thirty-Five Million and no/100 Dollars ($35,000,000.00) (as
such loan may be amended, renewed or restated from time to time, the "LOAN");

                  WHEREAS, the Loan is guarantied by (i) RoweCom pursuant to
that certain RoweCom Corporate Guaranty dated as of the date hereof executed and
delivered by RoweCom to Lender, and (ii) Dawson pursuant to that certain Dawson
Corporate Guaranty dated as of the date hereof executed and delivered by Dawson
to Lender (collectively the "Guaranties");

                  WHEREAS, each Borrower is a wholly-owned subsidiary of Dawson,
which is a wholly-owned subsidiary of RoweCom; and

                  WHEREAS, the Loan is secured by that certain Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing dated the
date hereof, given by Faxon to Lender (the "MORTGAGE"), encumbering that certain
real property situated in the County of Norfolk, Commonwealth of Massachusetts
as is more particularly described on EXHIBIT A attached hereto, and all
Improvements thereon (said real property and Improvements are hereinafter
sometimes collectively referred to as the "PROPERTY"); and

                  WHEREAS, as a condition precedent to Lender providing the Loan
to Borrower, Indemnitor agreed to execute and deliver this Agreement to Lender.

         NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Indemnitor hereby covenants and agrees for the benefit of Lender,
as follows:

<PAGE>


1. INDEMNITY. Each Indemnitor, jointly and severally, assumes liability for,
and agrees to pay, protect, defend (at trial and appellate levels and with
attorneys, consultants and experts acceptable to Lender), and save Lender
harmless from and against, and indemnify Lender from and against any and all
liens, damages (including, without limitation, punitive or exemplary
damages), losses, liabilities (including, without limitation, strict
liability), obligations, settlement payments, penalties, fines, assessments,
citations, directives, claims, litigation, demands, defenses, judgments,
suits, proceedings, costs, disbursements and expenses of any kind or of any
nature whatsoever (including, without limitation, reasonable attorneys',
consultants' and experts' fees and disbursements actually incurred in
investigating, defending, settling or prosecuting any claim, litigation or
proceeding or enforcing any term of this Agreement) (collectively "COSTS")
which may at any time be imposed upon, incurred by or asserted or awarded
against Lender, Indemnitor or the Property, and arising directly or
indirectly from or out of, whether now, hereafter or heretofore occurring:
(i) any violation or alleged violation of, or liability or alleged liability
under, any local, state or federal law, rule or regulation or common law duty
pertaining to human health, natural resources or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Section.9601 et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section.6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section.1251 et seq.), the
Clean Air Act (42 U.S.C. Section.7401 et seq.), the Emergency Planning and
Community-Right-to-Know Act (42 U.S.C. Section.11001 et seq.), the Endangered
Species Act (16 U.S.C. Section.1531 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section.2601 et seq.), the Occupational Safety and Health Act
(29 U.S.C. Section.651 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Section.1801 et seq.), and those relating to paint containing more
than .05% lead by dry weight ("LEAD BASED PAINT") and the regulations
promulgated pursuant to said laws, all as amended from time to time
(collectively, "ENVIRONMENTAL LAWS"), relating to or affecting the Property,
whether or not caused by or within the control of Indemnitor; (ii) the
presence, release or threat of release of or exposure to any hazardous, toxic
or harmful substances, wastes, materials, pollutants or contaminants
(including, without limitation, asbestos or asbestos-containing materials,
polychlorinated biphenyls, petroleum or petroleum products or byproducts,
flammable explosives, radioactive materials, Lead Based Paint, infectious
substances or raw materials which include hazardous constituents) or any
other substances or materials which are included under or regulated by
Environmental Laws (collectively, "HAZARDOUS SUBSTANCES"), on, in, under or
affecting all or any portion of the Property or any surrounding areas,
regardless of whether or not caused by or within the control of Indemnitor;
(iii) any transport, treatment, recycling, storage, disposal or arrangement
therefor of Hazardous Substances whether on the Property, originating from
the Property, or otherwise associated with the Indemnitor or any operations
conducted on the Property at any time; (iv) the breach of any representation
or warranty contained in the Mortgage; (v) the enforcement of this Agreement,
or (vi) any environmental investigation, assessment, audit or review
conducted in connection with the Property or the operations conducted at any
time thereon, including, without limitation, the cost of assessment,
investigation, containment, removal and/or remediation of any and all
Hazardous Substances from all or any portion of the Property or any
surrounding areas, the cost of any actions taken in response to the presence,
release or threat of release of any Hazardous Substances on, in, under or
affecting any portion of the Property or any surrounding areas to prevent or
minimize such release or threat of release so that it does not migrate or
otherwise cause or threaten

                                      -2-
<PAGE>

danger to present or future public health,  safety,  welfare or the environment,
and costs incurred to comply with  Environmental  Laws in connection with all or
any  portion of the  Property  or any  surrounding  areas.  Notwithstanding  the
foregoing,  Borrower shall not be responsible for Costs which (i) are the direct
result of Lender's gross negligence or willful misconduct,  or (ii) arise solely
from an act, occurrence or condition which initially commenced or was introduced
to the Property after the Bank takes possession thereof.

         2. INDEMNIFICATION PROCEDURES. (a) If any action shall be brought
against Lender based upon any of the matters for which Lender is indemnified
hereunder, Lender shall notify Indemnitor in writing and Indemnitor shall
promptly assume the defense thereof, including, without limitation, the
employment of counsel acceptable to Lender and the negotiation of any
settlement; PROVIDED, HOWEVER, that any failure of Lender to notify Indemnitor
of such matter shall not impair or reduce the obligations of Indemnitor. Lender
shall have the right, at Indemnitor's expense, to employ separate counsel in any
action and to participate in the defense thereof. If Indemnitor shall fail to
defend Lender against any claim, loss or liability for which Lender is
indemnified, Lender may, at its sole option and election, defend or settle such
claim, loss or liability. The liability of Indemnitor to Lender hereunder shall
be conclusively established by such settlement, provided such settlement is made
in good faith, the amount of such liability includes both the settlement
consideration and all of the costs and expenses incurred by Lender in effecting
such settlement. Lender's good faith in any such settlement shall be
conclusively established if the settlement is made on the advice of independent
legal counsel for Lender.

                  (b) Except in cases where Lender is grossly negligent or
engaged in willful misconduct, Indemnitor shall not, without the prior written
consent of Lender: (i) settle or compromise any action, suit, proceeding or
claim (each, an "ACTION") or consent to the entry of any judgment that does not
include as an unconditional term thereof the delivery by the claimant or
plaintiff to Lender of a full and complete written release of Lender (in form,
scope and substance satisfactory to Lender in its sole discretion) from all
liability in respect of such Action and a dismissal with prejudice of such
Action, or (ii) settle or compromise any Action in any manner that may adversely
affect Lender (including, without limitation, Lender's reputation) or obligate
Lender to pay any sum or perform any obligation as determined by Lender in its
sole discretion.

                  (c) All Costs shall be immediately reimbursable to Lender when
and as incurred and without any requirement of waiting for the ultimate outcome
of any Action, and Indemnitor shall pay to Lender any and all Costs within ten
(10) days after written notice from Lender itemizing the amounts thereof
incurred to the date of such notice. In addition to any other remedy available
for the failure of Indemnitor to periodically pay such Costs, such Costs, if not
paid within said ten day period, shall bear interest at the Default Rate and
such Costs and interest shall be secured by the Mortgage and by the other Loan
Documents.

         3. REINSTATEMENT OF OBLIGATIONS. If at any time all or any part of any
payment made by Indemnitor or received by Lender from Indemnitor under or with
respect to this Agreement is or must be rescinded or returned for any reason
whatsoever (including, but not limited to, the


                                      -3-
<PAGE>

insolvency, bankruptcy or reorganization of Indemnitor), then the obligations of
Indemnitor  hereunder shall, to the extent of the payment rescinded or returned,
be deemed to have continued in existence,  notwithstanding such previous payment
made by  Indemnitor,  or receipt of payment by Lender,  and the  obligations  of
Indemnitor  hereunder  shall continue to be effective or be  reinstated,  as the
case  may be,  as to such  payment,  all as  though  such  previous  payment  by
Indemnitor had never been made.

         4. WAIVERS BY INDEMNITOR. To the extent permitted by law, Indemnitor
hereby waives and agrees not to assert or take advantage of (a) any right to
require Lender to proceed against any other person or to proceed against or
exhaust any security held by Lender at any time or to pursue any other remedy
in Lender's power or under any other agreement before proceeding against
Indemnitor hereunder; (b) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of Lender to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other
person or persons; (c) demand, presentment for payment, notice of nonpayment,
protest, notice of protest and all other notices of any kind, or the lack of
any thereof, including, without limitation, notice of the existence, creation
or incurring of any new or additional indebtedness or obligation or of any
action or nonaction on the part of Lender, any endorser or creditor of either
Indemnitor or any other person whomsoever under this or any other instrument
in connection with any obligation or evidence of indebtedness held by Lender;
(d) any defense based upon an election of remedies by Lender; (e) any right
or claim of right to cause a marshaling of the assets of either Indemnitor or
Borrower; (f) any principle or provision of law, statutory or otherwise,
which is or might be in conflict with the terms and provisions of this
Agreement; (g) any duty on the part of Lender to disclose to Indemnitor any
facts Lender may know about the Property, regardless of whether Lender has
reason to believe that any such facts materially increase the risk beyond
that which Indemnitor intends to assume or has reason to believe that such
facts are unknown to Indemnitor or has a reasonable opportunity to
communicate such facts to Indemnitor, it being understood and agreed that
Indemnitor is fully responsible for being and keeping informed of the
condition of the Property and of any and all circumstances bearing on the
risk that liability may be incurred by Indemnitor; (h) any lack of notice of
disposition or of manner of disposition of any collateral for the Loan; (i)
any invalidity, irregularity or unenforceability, in whole or in part, of any
of the Loan Documents; (j) any lack of commercial reasonableness in dealing
with the collateral for the Loan; (k) any deficiencies in the collateral for
the Loan or any deficiency in the ability of Lender to collect or to obtain
performance from any persons or entities now or hereafter liable for the
payment and performance of any obligation hereby guaranteed; (l) any
assertion or claim that the automatic stay provided by 11 U.S.C. Section.362
or any other stay provided under any other debtor relief law of any
jurisdiction whatsoever, now or hereafter in effect, shall operate to stay or
inhibit the ability of Lender to enforce any of its rights which Lender may
have against Indemnitor, or the collateral for the Loan; (m) any
modifications of the Loan Documents or any obligation of Borrower relating to
the Loan by operation of law or by action of any court, whether pursuant to
Title 11 of the United States Code, as amended, or any other debtor relief
law of any jurisdiction whatsoever, now or hereafter in effect, or otherwise;
and (n) any action, occurrence, event or matter consented to by Indemnitor
under SECTION 5(G) or any other provision hereof, or otherwise.

                                      -4-
<PAGE>


                  5. GENERAL PROVISIONS. (a) RIGHT TO INDEMNIFICATION NOT
AFFECTED BY KNOWLEDGE. Lender's right to defense, indemnification, payment of
Costs or other remedies based on this Agreement shall not be diminished or
affected in any way by any investigation conducted by Lender or other knowledge
acquired (or capable of being acquired) in any way by Lender at any time.

                  (b) SURVIVAL. This Agreement shall be deemed to be continuing
in nature and shall remain in full force and effect and shall survive the
payment of the indebtedness evidenced and secured by the Loan Documents and the
exercise of any remedy by Lender under the Mortgage or any of the other Loan
Documents, even if, as a part of such remedy, the Loan is paid or satisfied in
full.

                  (c) NO SUBROGATION; NO RECOURSE AGAINST LENDER.
Notwithstanding the satisfaction by Indemnitor of any liability hereunder,
Indemnitor shall not have any right of subrogation, contribution, reimbursement
or indemnity whatsoever or any right of recourse to or with respect to the
assets or property of Borrower. In connection with the foregoing, Indemnitor
expressly waives any and all rights of subrogation to Lender against Borrower,
and Indemnitor hereby waives any rights to enforce any remedy which Lender may
have against Borrower and any right to participate in any collateral for the
Loan. In addition to and without in any way limiting the foregoing, Indemnitor
hereby subordinates any and all indebtedness of Borrower now or hereafter owed
to Indemnitor to all indebtedness of Borrower to Lender, and agrees with Lender
that Indemnitor shall not demand or accept any payment of indebtedness or
interest from Borrower, shall not claim any offset or other reduction of
Indemnitor's obligations hereunder because of any such indebtedness and shall
not take any action to obtain any of the collateral securing the Loan. Further,
Indemnitor shall not have any right of recourse against Lender by reason of any
action Lender may take or omit to take under the provisions of this Agreement or
under the provisions of any of the Loan Documents.

                  (d) RESERVATION OF RIGHTS. Nothing contained in this Agreement
shall prevent or in any way diminish or interfere with any rights or remedies,
including, without limitation, the right to contribution or cost recovery, which
Lender may have against Indemnitor or any other party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (codified at
Title 42 U.S.C. ss.9601 eT Seq.), as it may be amended from time to time, or any
other applicable federal, state or local laws, all such rights being hereby
expressly reserved.

                  (e) RIGHTS CUMULATIVE; PAYMENTS. Lender's rights under this
Agreement shall be in addition to all rights of Lender under the Note, the
Mortgage and the other Loan Documents. FURTHER, PAYMENTS MADE BY INDEMNITOR
UNDER THIS AGREEMENT SHALL NOT REDUCE IN ANY RESPECT BORROWER'S OR INDEMNITOR'S
OBLIGATIONS AND LIABILITIES UNDER THE NOTE, THE MORTGAGE, THE GUARANTY OR THE
OTHER LOAN DOCUMENTS EXCEPT WITH RESPECT TO, AND TO THE EXTENT OF, BORROWER'S
OBLIGATION AND LIABILITY FOR THE PAYMENT MADE BY INDEMNITOR.


                                      -5-
<PAGE>


                  (f) NO LIMITATION ON LIABILITY. Indemnitor hereby consents and
agrees that Lender may at any time and from time to time without further consent
from Indemnitor do any of the following events, and the liability of Indemnitor
under this Agreement shall be unconditional and absolute and shall in no way be
impaired or limited by any of the following events, whether occurring with or
without notice to Indemnitor or with or without consideration: (i) any
extensions of time for performance required by any of the Loan Documents or
extension or renewal of the Note; (ii) any sale, assignment or foreclosure of
the Note, the Mortgage or any of the other Loan Documents or any sale or
transfer of the Property; (iii) any change in the ownership of Borrower,
including, without limitation, the withdrawal or removal of Indemnitor from any
current or future position of ownership, management or control of Borrower; (iv)
the accuracy or inaccuracy of the representations and warranties made by
Indemnitor herein or in the Mortgage or by Borrower in any of the Loan
Documents; (v) the release of Borrower or of any other person or entity from
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents by operation of law, Lender's
voluntary act or otherwise; (vi) the release or substitution in whole or in part
of any security for the Loan; (vii) Lender's failure to record the Mortgage or
to file any financing statement (or Lender's improper recording or filing
thereof) or to otherwise perfect, protect, secure or insure any lien or security
interest given as security for the Loan; (viii) the modification of the terms of
any one or more of the Loan Documents; or (ix) the taking or failure to take any
action of any type whatsoever. No such action which Lender shall take or fail to
take in connection with the Loan Documents or any collateral for the Loan, nor
any course of dealing with Borrower or any other person, shall limit, impair or
release Indemnitor's obligations hereunder, affect this Agreement in any way or
afford Indemnitor any recourse against Lender. Nothing contained in this Section
shall be construed to require Lender to take or refrain from taking any action
referred to herein.

                  (g) NOTICE. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly given by delivery
of the same in the manner and to the address or facsimile number set forth in
the Loan Agreement for Lender and Borrower and in the Guaranties for RoweCom and
Dawson, or at such other address or facsimile number as may be designated by
such party as herein provided. All notices, demands and requests shall be
effective as set forth in the Loan Agreement and the Guaranties. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given as herein required shall be deemed to be receipt of
the notice, demand or request sent.

                  (h) SUCCESSIVE ACTIONS. A separate right of action hereunder
shall arise each time Lender acquires knowledge of any matter indemnified by
Indemnitor under this Agreement. Separate and successive actions may be brought
hereunder to enforce any of the provisions hereof at any time and from time to
time. No action hereunder shall preclude any subsequent action, and Indemnitor
hereby waives and covenants not to assert any defense in the nature of splitting
of causes of action or merger of judgments.


                                      -6-
<PAGE>


                  (i) WAIVER BY INDEMNITOR. Borrower and Indemnitor covenant and
agree that upon the commencement of a voluntary or involuntary bankruptcy
proceeding by or against Borrower, neither Borrower nor Indemnitor shall seek a
supplemental stay or otherwise seek, pursuant to 11 U.S.C. ss.105 or any other
provision of Title 11 United States Code, as amended, or any other debtor relief
law (whether statutory, common law, case law, or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable, to
stay, interdict, condition, reduce or inhibit the ability of Lender to enforce
any rights of Lender against Indemnitor by virtue of this Agreement or
otherwise.

                  (j) SPECIFIC NOTICE. IT IS EXPRESSLY AGREED AND UNDERSTOOD
THAT THIS AGREEMENT INCLUDES INDEMNIFICATION PROVISIONS WHICH, IN CERTAIN
CIRCUMSTANCES, COULD INCLUDE AN INDEMNIFICATION BY INDEMNITOR OF LENDER FROM
CLAIMS OR LOSSES ARISING AS A RESULT OF LENDER'S OWN NEGLIGENCE.

                  (k) MISCELLANEOUS. (i) Any amendments or modifications hereto,
in order to be effective, shall be in writing and executed by the parties
hereto. A determination that any provision of this Agreement is unenforceable or
invalid shall not affect the enforceability or validity of any other provision,
and any determination that the application of any provision of this Agreement to
any person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other
persons or circumstances.

                  (ii) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO ITS
CONFLICTS OF LAWS RULES.

                  (iii) This Agreement shall bind the Indemnitor and the its
personal representatives, successors and assigns and shall inure to the benefit
of Lender, its officers, directors, shareholders, agents and employees of Lender
and their respective heirs, personal representatives, successors and assigns.
Notwithstanding the foregoing, Indemnitor shall not assign any of its rights or
obligations under this Agreement without the prior written consent of Lender,
which consent may be withheld by Lender in its sole discretion.

                  (iv) The failure of any party hereto to enforce any right or
remedy hereunder, or to promptly enforce any such right or remedy, shall not
constitute a waiver thereof nor give rise to any estoppel against such party nor
excuse any of the parties hereto from their respective obligations hereunder.
Any waiver of such right or remedy must be in writing and signed by the party to
be bound.

                  (v) This Agreement is subject to enforcement at law or in
equity, including actions for damages or specific performance.


                                      -7-
<PAGE>


                  (vi) Time is of the essence hereof.

                  (vii) The term "business day" as used herein shall mean a
weekday, Monday through Friday, except a legal holiday or a day on which banking
institutions in [Chicago, Illinois] are authorized by law to be closed.

                  (viii) The captions and headings of the sections and
paragraphs of this Agreement are for convenience of reference only and shall not
be construed in interpreting the provisions hereof.

                  (ix) In the event it is necessary for Lender to retain the
services of an attorney or any other consultants in order to enforce this
Agreement, or any portion thereof, Indemnitor agrees to pay to Lender any and
all costs and expenses, including, without limitation, reasonable attorney's
fees, incurred by Lender as a result thereof and such costs, fees and expenses
shall be included in Costs.

                  (x) This Agreement may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument, for the same effect as if all parties hereto had signed the
same signature page.

                  (xi) All references to Indemnitor shall mean Faxon, McGregor,
Turner, RoweCom and Dawson, both individually and collectively, and jointly and
severally, and all representations, warranties, duties, covenants, agreements
and obligations of Indemnitor shall be the individual and collective
representations, warranties, duties, covenants, agreements and obligations of
each of Faxon, McGregor, Turner, RoweCom and Dawson.

                  (xii) All references to Borrower shall mean Faxon, McGregor
and Turner, both individually and collectively, and jointly and severally.


                                      -8-
<PAGE>


         IN WITNESS WHEREOF, Indemnitor has executed this Agreement as of the
day and year first written above.


                                         THE FAXON COMPANY, INC.

                                         By:
                                           -------------------------------------
                                           Name:
                                               ---------------------------------
                                           Title:
                                                 -------------------------------



                                          MCGREGOR SUBSCRIPTION COMPANY


                                          By:
                                            ------------------------------------
                                            Name:
                                                --------------------------------
                                            Title:
                                                 -------------------------------



                                          THE TURNER SUBSCRIPTION AGENCY,
                                          INCORPORATED

                                          By:
                                             -----------------------------------
                                             Name:
                                                 -------------------------------
                                             Title:
                                                  ------------------------------



                                          DAWSON, INC.

                                          By:
                                             -----------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------



                                          ROWECOM, INC.

                                          By:
                                             -----------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                  ------------------------------


                                      -9-