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                                                                    EXHIBIT 10.3
 
                  TAX INDEMNIFICATION AND ALLOCATION AGREEMENT
                                  (AS AMENDED)
 
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                                                                    EXHIBIT 10.3

                 TAX INDEMNIFICATION AND ALLOCATION AGREEMENT
                                 (AS AMENDED)
                                        
     TAX INDEMNIFICATION AND ALLOCATION AGREEMENT dated as of December 7, 1998
by and between Creative Computers, Inc., a Delaware corporation ("CCI") and
uBid, Inc., a Delaware corporation ("uBid").

                                    RECITALS
                                        
     A.  CCI is the common parent of an affiliated group of corporations (the
"CCI Group") within the meaning of Section 1504(a) of the Internal Revenue Code
of 1986, as amended (the "Code").  The CCI Group includes uBid.  The members of
the CCI Group have heretofore joined in filing consolidated Federal income tax
returns.

     B.  CCI expects (i) to cause uBid to make an initial public offering of its
Common Stock, par value $.001 per share (the "Offering"), and (ii) no earlier
than 180 days following consummation of the Offering, pursuant to a Separation
and Distribution Agreement, dated as of December 7, 1998, (the "Distribution
Agreement") to distribute all of the stock of uBid then held by the CCI Group
pro rata to the CCI stockholders in a transaction intended to qualify as a tax-
free distribution under Code (S)355 (the "Distribution").

     C.  At the close of the business day on which the Distribution occurs (the
"Distribution Date"), the taxable year of uBid shall close for U.S. federal
income tax purposes and uBid shall cease to be a member of the CCI Group.

     D.  The parties hereto wish to provide for the payment of Income Taxes (as
defined herein) and entitlement to refunds thereof, allocate responsibility and
provide for cooperation in connection with the filing of returns in respect of
Income Taxes, and provide for certain other matters relating to Income Taxes;

     NOW, THEREFORE, in consideration of the agreements herein contained and
intending to be legally bound hereby, CCI and uBid hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS
                                        
     Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to them in the Distribution Agreement.  For
purposes of this Agreement, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined).

     1.1    "Action" shall mean any action, claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental, regulatory
or other administrative agency or commission or any arbitration tribunal.

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     1.2    "Actual Tax Payment" shall have the meaning set forth in Section 3.3
hereof.

     1.3    "Actually Realized" or "Actually Realizes" shall mean, for purposes
of determining the timing of the incurrence of any Income Tax Liability or the
realization of a Refund (or any related Income Tax Detriment or Benefit) by a
Person in respect of any payment, transaction, occurrence or event, the time at
which the amount of Income Taxes paid by such Person is increased above or
reduced below the amount of Income Taxes that such Person would have been
required to pay but for such payment, transaction, occurrence or event.

     1.4    "Aggregate Spin-Off Tax Liabilities" means the sum of the Spin-Off
Tax Liabilities with respect to each Taxing Jurisdiction.

     1.5    "Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions located in the State of New York are
authorized or obligated by law or executive order to close.

     1.6    "Carryback" shall mean the carryback of a Tax Attribute (including,
without limitation, a net operating loss, a net capital loss or a tax credit) by
uBid from a Post-Distribution Taxable Period to a CCI Consolidated Return
Period.

     1.7    "Code" shall have the meaning set forth in Recital A.

     1.8    "CCI Consolidated Group" shall mean CCI and the other members of the
affiliated group of corporations (within the meaning of Section 1504(a) of the
Code without regard to the exclusions in Section 1504(a)(1) through (8)) of
which CCI is the common parent.

     1.9    "CCI Consolidated Federal Return" shall mean any consolidated
federal Income Tax Return or amendment thereof of the CCI Consolidated Group for
any CCI Consolidated Return Period.

     1.10   "CCI Consolidated Return Period" shall mean a taxable period that
ends within the Effective Period for which a consolidated, combined or unitary
(as applicable) federal, state, local or foreign Income Tax Return is filed or
required to be filed by the CCI Consolidated Group.

     1.11   "CCI Consolidated Tax Liability" means, with respect to any CCI
Consolidated Return Period, the consolidated, combined or unitary Income Tax
Liability of the CCI Consolidated Group.

     1.12   "CCI Group" shall mean, solely for purposes of this Agreement, CCI
and each of the other members of the CCI Consolidated Group other than uBid.

     1.13   "CCI State, Local and Foreign Returns" shall mean any combined,
consolidated or unitary state, local or foreign Income Tax Returns or amendment
thereof which are required to be filed by CCI or a member of the CCI
Consolidated Group.

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     1.14   "Deemed Tax Payment" shall have the meaning set forth in Section 3.3
hereof.

     1.15   "Distribution" shall have the meaning set forth in Recital B.

     1.16   "Distribution Agreement" shall have the meaning set forth in Recital
B.

     1.17   "Effective Period" shall include all taxable periods that begin or
end on or after the date of the Offering, provided that uBid is included in the
CCI Consolidated Group for a portion of such taxable period.

     1.18   "Equity Securities" shall mean any stock or other equity securities
treated as stock for tax purposes, or options, warrants, rights, convertible
debt, or any other instrument or security that affords any Person the right,
whether conditional or otherwise, to acquire stock.

     1.19   "Fifty-Percent or Greater Interest" shall have the meaning ascribed
to such term for purposes of Code (S)(S) 355(d) and (e).

     1.20   "Final Determination" shall mean the final resolution of liability
for any Income Tax, which resolution may be for a specific issue or adjustment
or for a taxable period, (i) by Internal Revenue Service Form 870 or 870-AD (or
any successor forms thereto), on the date of acceptance by or on behalf of the
taxpayer, or by a comparable form under the laws of a state, local, or foreign
taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall
not constitute a Final Determination to the extent that it reserves (whether by
its terms or by operation of law) the right of the taxpayer to file a claim for
Refund or the right of the Taxing Jurisdiction to assert a further deficiency in
respect of such issue or adjustment or for such taxable period (as the case may
be); (ii) by a decision, judgment, decree, or other order by a court of
competent jurisdiction, which has become final and unappealable; (iii) by a
closing agreement or accepted offer in compromise under Sections 7121 or 7122 of
the Code, or a comparable agreement under the laws of a state, local, or foreign
taxing jurisdiction; (iv) by any allowance of a Refund or credit in respect of
an overpayment of Income Tax, but only after the expiration of all periods
during which such Refund may be recovered (including by way of offset) by the
jurisdiction imposing such Income Tax; or (v) by any other final disposition,
including by reason of the expiration of the applicable statute of limitations
or by mutual agreement of the parties.

     1.21   "Income Tax" (a) shall mean (i) any foreign or any United States
federal, state or local tax, charge, fee, impost, levy or other assessment that
is based upon, measured by, or calculated with respect to (1) net income or
profits (including, but not limited to, any capital gains, gross receipts, or
minimum tax, and any tax on items of tax preference, but not including sales,
use, value added, real property gains, real or personal property, transfer or
similar taxes), or (2) multiple bases (including, but not limited to, corporate
franchise, doing business or occupation taxes), if one or more of the bases upon
which such tax may be based, by which it may be measured, or with respect to
which it may be calculated is described in clause (a)(i)(1) of this definition,
together with (B) any 

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interest and any penalties, fines, additions to tax or additional amounts
imposed by any Taxing Jurisdiction with respect thereto and (b) shall include
any transferee liability in respect of an amount described in clause (a) of this
definition.

     1.22   "Income Tax Benefit" shall mean, in respect of a Person or group of
Persons for any taxable period, the excess of (A) the hypothetical Income Tax
Liability of such Person or group of Persons for such taxable period, calculated
as if carryover of a Tax Attribute had not occurred but with all other facts
unchanged, over (B) the actual Income Tax Liability of such Person or group of
Persons for such taxable period, calculated taking into account the carryover of
such Tax Attribute (and treating a Refund as a negative Income Tax Liability,
and taking into account credits (if any), for purposes of such calculation).

     1.23   "Income Tax Detriment" shall mean, in respect of any Person or group
of Persons for any taxable period, the excess of (A) the actual Income Tax
Liability of such Person or group of Persons for such taxable period, calculated
taking into account the carryover of a Tax Attribute, as the case may be, over
(B) the hypothetical Income Tax Liability of such Person or group of Persons for
such taxable period, calculated as if the carryover of a Tax Attribute had not
occurred but with all other facts unchanged (and treating a Refund as a negative
Income Tax Liability, and taking into account credits (if any), for purposes of
such calculation).

     1.24   "Income Tax Liabilities" shall mean all liabilities for Income
Taxes.

     1.25   "Income Tax Return" shall mean any return, report, filing,
statement, questionnaire, declaration or other document required to be filed
with a Taxing Jurisdiction in respect of Income Taxes.

     1.26   "Indemnified Party" shall mean any Person seeking indemnification
pursuant to the provisions of this Agreement.

     1.27   "Indemnifying Party" shall mean any party hereto from which any
Indemnified Party is seeking indemnification pursuant to the provisions of this
Agreement.

     1.28   "Internal Spin" shall mean the distribution of the uBid Common Stock
by CCI Computers, Inc., a California corporation, to CCI.

     1.29   "Losses" shall mean any and all losses, liabilities, claims,
damages, obligations, payments, costs and expenses, matured or unmatured,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known
or unknown (including, without limitation, the costs and expenses of any and all
Actions, threatened Actions, demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such Actions or threatened Actions).

     1.30   "Notice Date" with respect to Subsequent Tax Legislation or
Regulation (as defined below) shall mean the earliest of (i) the date such
legislation or materially 

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identical legislation is introduced as a bill in the United States House of
Representatives or the United States Senate, (ii) the date any amendment to any
bill incorporating such legislation is approved by the Congressional committee
having jurisdiction or by the United States House of Representatives or the
United States Senate, (iii) the date any written proposal incorporating such
legislation is transmitted by the President of the United States to Congress,
(iv) the date any written proposal either by the Chairman of the United States
House of Representatives Ways and Means Committee or any successor thereto or
the Chairman of the United States Senate Finance Committee incorporating such
legislation is published in the Bureau of National Affairs' "Daily Tax Report,"
or any successor publication or (v) the date such regulation is published in the
Federal Register as proposed, temporary, or final Treasury Regulations.

     1.31   "Overpayment Rate" shall mean the annual rate of interest described
in Code (S)6621(a)(1) (or similar provision of state, local, or foreign Income
Tax law, as applicable), as determined from time to time.

     1.32   "Person" shall mean and include any individual, partnership, joint
venture, limited liability company, corporation, association, joint stock
company, trust, unincorporated organization or similar entity or a governmental
authority or any department or agency or other unit thereof.

     1.33   "Post-Distribution Taxable Period" shall mean a taxable period that,
to the extent it relates to uBid, begins after the Distribution Date. 

     1.34   "Pre-Distribution Taxable Period" shall mean a taxable period that,
to the extent it relates to uBid, ends on or before the Distribution Date.

     1.35   "Preexisting Tax Benefit" shall have the meaning set forth in
Section 2.5.

     1.36   "Proceeding" shall mean any audit or other examination, judicial or
administrative proceeding relating to liability for, or Refunds or adjustments
with respect to, Income Taxes.

     1.37   "PWC Opinion" shall mean the opinion letter dated August 5, 1998,
of PricewaterhouseCoopers LLP to the Board of Directors and Stockholders of CCI.

     1.38   "Qualified Tax Counsel" shall mean independent tax counsel of
recognized national standing that is acceptable to CCI.

     1.39   "Refund" shall mean any refund of Income Taxes, including any
reduction in Income Tax Liabilities by means of a credit, offset or otherwise.

     1.40   "Restriction Period" shall mean the period beginning on the date
hereof and ending on the three-year anniversary of the Distribution Date.

     1.41   "Spin-Off Tax Liabilities," with respect to any Taxing Jurisdiction,
as defined below, shall mean the sum of (i) the product of (x) the additional
corporate-level gain or income recognized with respect to the failure of the
Initial Spin or the 

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Distribution to qualify for Tax-Free Status, as defined below, under the income
tax law of such Taxing Jurisdiction pursuant to any settlement, Final
Determination, judgment, assessment, proposed adjustment or otherwise and (y)
the Taxing Jurisdiction's highest marginal tax rate applicable to the taxable
income of corporations on income of the character subject to tax and indemnified
against under Article III, (ii) interest on such amount calculated pursuant to
such Taxing Jurisdiction's laws regarding interest on tax liabilities at the
highest Underpayment Rate, as defined below, for corporations in such Taxing
Jurisdiction from the date such additional gain or income was recognized until
full payment with respect thereto is made pursuant to Article III hereof, and
(iii) any penalties actually paid to such Taxing Jurisdiction that would not
have been paid but for the failure of the Distribution to qualify for Tax-Free
Status in such Taxing Jurisdiction.

     1.42   "Subsequent Tax Legislation or Regulation" shall mean any bill
introduced in the United States House of Representatives or the United States
Senate that amends the Code, or any amendment to any such bill; any written
proposal to amend the Code that is officially recommended by the President of
the United States; any written proposal to amend the Code that is made available
to the general public either by the Chairman of the United States House of
Representatives Ways and Means Committee or any successor thereto, the Chairman
of the United States Senate Finance Committee or any successor thereto, or the
temporary or final Treasury Regulation; provided, however, that no such bill,
amendment, proposal, or regulation shall constitute Subsequent Tax Legislation
or Regulation unless the Notice Date of such bill, amendment, proposal or
regulation is subsequent to the date of this Agreement.

     1.43   "Tax Attribute" shall mean a consolidated net operating loss, a
consolidated net capital loss, a consolidated unused investment credit, a
consolidated unused foreign tax credit, or a consolidated excess charitable
contribution (as such terms are used in Treasury Regulations (S)(S)1.1502-79 and
1.1502-79A), or a U.S. federal minimum tax credit or U.S. federal general
business credit (but not tax basis or earnings and profits) that arises in a 
Pre-Distribution Taxable Period (including the taxable period in which the
Distribution Date occurs) and can be carried to a taxable period ending after
the Distribution Date.

     1.44   "Tax-Free Status" shall mean the qualification of the Initial Spin
and the Distribution (i) as transactions described in Code 355(a)(1), (ii) as
transactions in which the stock distributed thereby is qualified property for
purposes of Code (S)355(c)(2), and (iii) as transactions in which the CCI Group
recognizes no income or gain other than intercompany items or excess loss
accounts taken into account pursuant to the Treasury Regulations promulgated
pursuant to Code (S)1502.

     1.45   "Tax Opinion" means an unqualified opinion of Qualified Tax Counsel
on which CCI may rely, in form and substance reasonably acceptable to CCI (and
in determining whether an opinion is reasonably acceptable, CCI may consider,
among other factors, the appropriateness of any underlying assumptions and
management's representations if used as a basis for the opinion) to the effect
that a transaction will not disqualify the Initial Spin or the Distribution from
Tax-Free Status, assuming that the 

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Initial Spin and the Distribution would have qualified for Tax-Free Status if
such transaction did not occur.

     1.46   "Tax-Related Losses" shall mean: (i) the Aggregate Spin-Off Tax
Liabilities, (ii) all accounting, legal and other professional fees, and court
costs incurred in connection with any settlement, Final Determination, judgment
or other determination with respect to such Aggregate Spin-Off Tax Liabilities,
and (iii) all costs, expenses and damages associated with stockholder litigation
or controversies and any amount paid by CCI or uBid in respect of the liability
of stockholders, whether paid to stockholders or to the IRS or any other Taxing
Jurisdiction payable by CCI or uBid or their respective Affiliates, in each
case, resulting from the absence of Tax-Free Status for the Internal Spin or the
Distribution.

     1.47   "Taxing Jurisdiction" shall mean the United States and every other
government or governmental unit having jurisdiction to tax CCI, uBid or any of
their respective Affiliates.

     1.48   "uBid Business" shall mean the Auction Sales Business currently
conducted by uBid described in the PWC Opinion.

     1.49   "Underpayment Rate" shall mean the annual rate of interest described
in Section 6621(c) of the Code for large corporate underpayments of Income Tax
(or similar provision of state, local, or foreign Income Tax law, as
applicable), as determined from time to time.

                                  ARTICLE II
             PREPARATION AND FILING OF TAX RETURNS; PAYMENT OF TAX
                                        
     2.1    CCI Consolidated Federal Returns.

            (a)  General.  For any CCI Consolidated Return Period, CCI shall
have sole and exclusive responsibility for the preparation and filing of all CCI
Consolidated Federal Returns and amendments thereto with the IRS. Such returns
shall include all income, gains, losses, deductions and credits of uBid.

            (b)  Cooperation.  uBid shall furnish CCI, at least sixty (60) days
before the due date (including extensions) of any such CCI Consolidated Federal
Return, with its completed section of such CCI Consolidated Federal Return,
prepared in accordance with this Agreement, in accordance with instructions from
CCI and in a manner consistent with prior returns, if any, provided that such
actions are not inconsistent with this Agreement. uBid will also furnish CCI
work papers and other such information and documentation as is reasonable
requested by CCI with respect to uBid.

     2.2    CCI State, Local and Foreign Returns.

            (a)  General.  For any CCI Consolidated Return Period, CCI shall
have sole and exclusive responsibility for the preparation and filing of all CCI
State, Local and Foreign Returns.

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            (b)  Cooperation.  CCI will timely advise uBid of the inclusion of
uBid in any CCI State, Local and Foreign Returns and the jurisdictions in which
such returns will be filed. uBid ill evidence its agreement to be included in
such return on the appropriate form(s) and will take such other actions as may
be appropriate, in the opinion of CCI, to carry out the purposes and intent of
this Section 2.2, provided that such actions are not inconsistent with this
Agreement. uBid shall furnish CCI, at least sixty (60) days before the due date
(including extensions) of any such CCI State, Local and Foreign Returns, with
its completed section of such CCI State, Local and Foreign Returns, prepared in
accordance with this Agreement, in accordance with instructions from CCI and in
a manner consistent with prior returns, if any, provided that such actions are
not inconsistent with this Agreement. uBid will also furnish CCI work papers and
other such information and documentation as is reasonable requested by CCI with
respect to uBid.

     2.3    CCI Tax Liability.

            (a)  CCI Consolidated Federal Return Liability. Except to the extent
otherwise provided herein, for each CCI Consolidated Return Period, CCI shall be
liable for and indemnify uBid against all Taxes due in respect of all CCI
Consolidated Federal Returns, subject to reimbursement from uBid as contemplated
by Section 2.6 of this Agreement.

            (b)  CCI State, Local and Foreign Return Liability. Except to the
extent otherwise provided herein, for each CCI Consolidated Return Period, CCI
shall be liable for and indemnify uBid against all Taxes due in respect of all
CCI State, Local and Foreign Returns, subject to reimbursement from uBid as
contemplated by Section 2.6 of this Agreement.

     2.4    uBid Separate Tax Return Amount.
 
            (a)  General.  For any taxable period ending during the Effective
Period of this Agreement, the term "uBid Separate Tax Return Amount" shall mean
the aggregate amount, whether a negative or positive, of (i) the uBid Separate
Federal Amount and (ii) the uBid Separate State, Local and Foreign Amount, each
as adjusted pursuant to the terms of this Agreement.

            (b)  Computation of uBid Separate Federal Amount. For each CCI
Consolidated Return Period that ends during the Effective Period of this
Agreement, uBid shall compute the uBid Separate Federal Amount for the portion
of such periods in which uBid is a Member of the CCI Affiliated Group. "uBid
Separate Federal Amount" means, with respect to each CCI Consolidated Return
Period, the federal Tax liability that would be payable by uBid to the IRS (in
which case such amount will be positive), or the federal Tax refund that would
be payable by the IRS to uBid (in which case such amount will be negative) if
uBid had filed a separate federal income tax return for the CCI Consolidated
Return Period. In the event that uBid has a net operating loss, tax credit or
other favorable Tax attribute (a "Tax Attribute") for federal Tax purposes for a
particular CCI Consolidated Return Period that would eliminate the federal Tax
liability of uBid for such taxable period but would not yield a federal Tax
refund for uBid on a separate 

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federal income tax return basis, the uBid Separate Federal Amount shall be zero
for such taxable period, and such federal Tax Attribute shall be recoverable, if
at all, by uBid in a subsequent CCI Consolidated Return Period on such separate
return basis, as herein provided. In computing the uBid Separate Federal Amount,
uBid shall follow the Tax elections and other Tax positions adopted or
prescribed by CCI and shall take into account the adjustments and modifications
set forth in Section 2.5 of this Agreement.

            (c)  Computation of uBid Separate State, Local and Foreign Amount.
For each CCI Consolidated Return Period that ends on or after the first day of
the Effective Period of this Agreement, uBid shall compute the uBid Separate
State, Local and Foreign Amount for the portion of such periods in which uBid is
a Member of the CCI Affiliated Group. "uBid Separate State, Local and Foreign
Amount" means, with respect to each CCI Consolidated Return Period, the state,
local and foreign Tax liability that would be payable by uBid to the applicable
taxing authorities (in which case such amount will be positive), or the state,
local and foreign Tax refund that would be payable by the applicable taxing
authorities to uBid (in which case such amount will be negative) if uBid had
filed a separate state, local and foreign income or franchise tax return for the
CCI Consolidated Return Period. In the event that uBid would have a net
operating loss, tax credit or other favorable Tax attribute (a "Tax Attribute")
for state, local or foreign Tax purposes for a particular CCI Consolidated
Return Period that would eliminate the state, local or foreign Tax liability of
uBid for such taxable period but would not yield a state, local or foreign Tax
refund for uBid on a separate federal income tax return basis, the uBid Separate
State, Local and Foreign Amount shall be zero for such taxable period, and such
state, local or foreign Tax Attribute shall be recoverable, if at all, by uBid
in a subsequent CCI Consolidated Return Period on such separate return basis, as
herein provided. In computing the uBid Separate State, Local and Foreign Amount,
uBid shall follow the Tax elections and other Tax positions adopted or
prescribed by CCI and shall take into account the adjustments and modifications
set forth in Section 2.5 of this Agreement.

     2.5    Adjustments.  In computing the uBid Separate Federal Amount (and to
the extent appropriate, the uBid Separate State, Local and Foreign Amount), uBid
shall take into account the following adjustments and modifications:

            (a)  The uBid Separate Federal Amount shall be computed as if uBid
came into existence in a Code (S)351 transaction on the date of the Offering,
and unless otherwise provided, uBid shall be deemed not to have existed prior to
such date. uBid shall not be entitled to any Tax Benefits of either the CCI
Affiliated Group or uBid that existed prior to the date of the Offering (a
"Preexisting Tax Benefit").

            (b)  Dividends from any Member of the CCI Affiliated Group shall be
eliminated.

            (c)  Items of income, gain, loss or deduction arising from a
transaction described in Treasury Regulation (S)1.1552-1(a)(2)(ii) shall be
taken into account by uBid in the same manner and in the same taxable years as
such items are actually taken into account on the CCI Consolidated Federal
Return.

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            (d)  Carryforwards and carrybacks of any Tax Benefits shall be
calculated as though CCI were the IRS and uBid filed a separate return.

            (e)  Characterization of items of income, expense, gain or loss that
are determined on a consolidated or combined basis in the calculation of CCI
Consolidated Federal Return Liability and CCI State, Local and Foreign
Liability, such as characterizations under Code (S)1231, shall retain their
characterization for purposes of determining the uBid Separate Federal Amount
and the uBid Separate State, Local and Foreign Amount.

            (f)  All ordinary income and capital gains shall be deemed to be
subject to Tax at the highest applicable Tax rate applicable to taxable ordinary
income of corporations.

            (g)  Estimated Tax payments made pursuant to Section 2.6(c) of this
Agreement shall not be included in the computation of the uBid Separate Tax
Return Amount.

            (h)  Other adjustments reasonably specified by CCI shall be made.

     2.6    Payment of uBid Separate Tax Return Amount.

            (a)  Payment from uBid to CCI. For any CCI Consolidated Return
Period covered by this Agreement, if the uBid Separate Tax Return Amount is a
positive amount, uBid shall pay such amount to CCI on or before the due date
(without extensions) of the CCI Consolidated Federal Returns for the appropriate
CCI Consolidated Return Period. Such payment shall be reduced by the estimated
Tax payments made by uBid for such taxable period pursuant to Section 2.6(c) of
this Agreement. For administrative or other reasons, CCI may direct or allow the
above payment to be made after the prescribed date. If all relevant information
necessary to determine the amount of the payment is not available by the due
date, the payment shall be based on estimates, and adjustments shall be made
when sufficient information is available or as soon as practicable after the CCI
Consolidated Federal Return for the appropriate CCI Consolidated Return Period
is filed.

            (b)  Payment from CCI to uBid. For any CCI Consolidated Return
Period covered by this Agreement, if the uBid Separate Tax Return Amount is a
negative amount CCI shall pay to uBid the amount that would have been allowed as
a net Tax refund to uBid on or before the due date (without extensions) of the
CCI Consolidated Federal Returns for the appropriate CCI Consolidated Return
Period. Such payment shall be increased by the estimated Tax payments made by
uBid Subgroup for such taxable period pursuant to Section 2.6(c) of this
Agreement. For administrative or other reasons, CCI may decide to make the above
payment after the prescribed date. If all relevant information necessary to
determine the amount of the payment is not available by the due date, the
payment shall be based on estimates, and adjustments shall be made when
sufficient information is available or as soon as practicable after the CCI
Consolidated Federal Return for the appropriate CCI Consolidated Return Period
is filed.

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         (c)  Estimated Tax Payments.

                 (i)   uBid shall pay to CCI quarterly installments of estimated
Tax. The amount of such payments for the first, second, third and fourth
installments shall cumulatively equal 25 percent, 50 percent, 75 percent and 100
percent, respectively, of the estimated full-year uBid Separate Tax Return
Amount (including the minimum tax and environmental tax). Settlement for such
payment shall be made on or before, or as soon as practicable after, the due
date of the applicable estimated Tax payment to be paid by CCI.

                 (ii)  uBid Subgroup shall pay to CCI any and all interest and
penalties imposed on the CCI Affiliated Group as a result of the underpayment of
estimated Tax attributable to the uBid Subgroup. For purposes of this Section
2.6(c)(ii), the Chief Financial Officer of CCI shall determine to which Member
or Members of the CCI Affiliated Group the underpayment is attributable. Such
determination of the Chief Financial Officer shall be final. A payment of such
interest and penalties shall not be considered a payment of estimated Tax.

     2.7    Adjustments to CCI Consolidated Tax Liability.

            (a)  General.  If any adjustment in the CCI Consolidated Tax
Liability is made as a result of an audit by a Taxing Authority, the granting of
a claim for refund, a final decision by a court, the carryback or carryforward
of a loss, deduction or credit or any other similar circumstance, the Tax refund
or Tax liability resulting therefrom, including any interest and penalties (an
"Adjustment"), shall be allocated between the CCI Affiliated Group and uBid in
accordance with the principles of this Agreement as if such adjustments had been
taken into account in the year to which they relate.

            (b)  Adjustment Resulting in Basis Increase to uBid.  If any
Adjustment results in an increase in the adjusted basis of any asset transferred
by CCI to uBid, uBid shall pay to CCI the amount of any Tax benefit resulting to
it by virtue of such basis increase to CCI as and when such Tax benefit is
realized. The preceding sentence shall survive the expiration of the Effective
Period of this Agreement.

                                  ARTICLE III
                        INDEMNIFICATION FOR INCOME TAXES
                                        
     3.1    Indemnification by CCI. Except as otherwise provided in this Article
III, CCI shall indemnify and hold uBid, its Representatives and Affiliates
harmless from and against (i) all Spin-Off Tax Liabilities incurred by any
member of the CCI Group, (ii) without duplication, all Income Tax Liabilities
that any member of the CCI Group is liable for, or required to reimburse uBid
for, pursuant to Article II hereof, and (iii) all Income Taxes incurred by uBid
by reason of the breach by CCI of any of its covenants hereunder and, in each
case, any related costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses).

                                       11
<PAGE>
 
     3.2    Indemnification by uBid. From and after the Distribution Date, uBid
shall indemnify and hold each member of the CCI Group and each of their
respective Representatives and Affiliates harmless from and against (i) all
Income Tax Liabilities that uBid is required to pay, or reimburse CCI for, under
Article II hereof and (ii) all Income Taxes, Spin-Off Tax Liabilities or other
Tax-Related Losses incurred by any member of the CCI Group by reason of the
breach by uBid of any of its covenants hereunder, and, in each case, any related
costs and expenses(including, without limitation, reasonable attorneys' fees and
expenses).

     3.3    Time of Payment. To the extent an indemnification obligation relates
to Spin-Off Tax Liabilities, the Indemnifying Party shall make payment pursuant
to such indemnification obligation no later than (i) five Business Days prior to
the date the Indemnified Party makes a payment of taxes, interest, or penalties
with respect to a proposed adjustment of taxes or an assessment of tax
deficiency asserted or made by any Taxing Jurisdiction that is premised in whole
or part on Spin-Off Tax Liabilities, including a payment made in settlement of
an asserted tax deficiency (each, an "Actual Tax Payment"), or (ii) five
Business Days after the date the Indemnified Party gives written notice to the
Indemnifying Party that the Indemnified Party has notified any Taxing
Jurisdiction, or gives the Indemnifying Party written notice or an
acknowledgment by any Taxing Jurisdiction, that such proposed adjustment of
taxes or tax deficiency would not result in a net payment by the Indemnified
Party because of the carryover, carryback or carryforward of net operating
losses or credits, the crediting of previously paid taxes, the utilization of
deductions or credits not claimed on the Indemnified Party's tax returns as
originally filed, the exclusion of income reported on such returns, or the
utilization of any other tax attributes that offset the asserted taxes (each, a
"Deemed Tax Payment"). The amount payable pursuant to the preceding sentence
shall be the Tax-Related Loss implied by such Actual Tax Payments and Deemed Tax
Payments.

     3.4    Subsequent Tax Legislation or Regulation. To the extent Tax-Related
Losses would not have arisen but for Subsequent Tax Legislation or Regulation,
such Losses shall be borne equally by CCI and uBid. The party making actual
payment of such Losses shall be indemnified by the other party to the extent of
the other party's allocated share of such Losses.

     3.5    Effect of Ruling, Determination or Opinion. CCI shall be indemnified
and held harmless pursuant to this Article 3 without regard to the fact that (i)
CCI or uBid may have received a ruling from the Internal Revenue Service, (ii)
CCI may have made a determination pursuant to Section 5.7, or (iii) uBid may
have obtained a Tax Opinion pursuant to Section 5.7.

                                  ARTICLE IV
             REPRESENTATIONS SPECIFIC TO DISTRIBUTION TAX MATTERS
                                        
     4.1    PWC Opinion.  uBid hereby represents and warrants that (i) it has
examined the PWC Opinion (including, without limitation, the representations
referred to therein to the extent that they relate to the plans, proposals,
intentions, and policies of 

                                       12
<PAGE>
 
uBid or the uBid Business) and (ii) to the extent descriptive of uBid or the
uBid Business, the facts presented and the representations made therein are true
and correct, except to the extent that any such facts or representations:

            (a)  are about the CCI Group (except for facts about the uBid
Business);

            (b)  describe or characterize the purposes of CCI management for the
Distribution; or

            (c)  set forth legal conclusions.

     4.2    No Plan or Intention.

            (a)  uBid hereby represents and warrants that it has no plan or
intention of taking any action, or failing or omitting to take any action, that
would (i) cause the Distribution not to have Tax-Free Status or (ii) cause any
representation or factual statement made in this Agreement or in the PWC Opinion
to be untrue in a manner that would have an adverse effect on the Tax-Free
Status of the Distribution.

            (b)  uBid hereby represents and warrants that the Distribution is
not part of a plan (or series of related transactions) pursuant to which a
Person will acquire stock representing a Fifty-Percent or Greater Interest in
uBid or any successor to uBid.

                                   ARTICLE V
                COVENANTS SPECIFIC TO DISTRIBUTION TAX MATTERS
                                        
     5.1    No Action. uBid shall not take any action, nor fail or omit to take
any action, that would (i) cause the Distribution not to have Tax-Free Status or
(ii) cause any representation or factual statement made in this Agreement or the
PWC Opinion to be untrue in a manner that would have an adverse effect on the
Tax-Free Status of the Distribution.

     5.2    Active Conduct of Business. Until the first day after the
Restriction Period, uBid shall continue the active conduct of the uBid Business.
uBid shall not liquidate, dispose of, or otherwise discontinue the conduct of
any material portion of the uBid Business. uBid shall continue the active
conduct of the uBid Business primarily through officers and employees of uBid
(and not through independent contractors). For purposes of this Section 5.2,
asset retirements and discontinuations of product lines with respect to the uBid
Business in the ordinary course of business shall not be treated as a
disposition of a portion of the uBid Business.

     5.3    Sale of Equity Securities. Until the first day after the Restriction
Period, uBid shall not sell or otherwise issue to any Person, or redeem or
otherwise acquire from any Person, any Equity Securities of uBid; provided,
however, that (i) the adoption by uBid of a rights plan shall not constitute a
sale or issuance of Equity Securities; (ii) uBid may repurchase Equity
Securities to the extent that such repurchases meet the requirements of section
4.05(1)(b) of Revenue Procedure 96-30, and (iii) uBid may issue Equity
Securities of uBid (including issuances as compensation for services or pursuant

                                       13
<PAGE>
 
to the exercise of compensatory stock options) that do not exceed in the
aggregate a [40%] or greater interest in the Equity Securities of uBid over the
period from and including the date of the Offering to the second anniversary of
the Distribution Date and [45%] of the Equity Securities of uBid over the period
from the date of the Offering to the end of the Restriction Period. For purposes
of the preceding sentence (A) Equity Securities sold by shareholders of uBid
pursuant to a uBid registration statement shall be considered to be Equity
Securities issued by uBid, and (B) aggregate percentages shall be determined
after taking into account the Equity Securities to be issued.

     5.4    Solicitation of Sale. Until the first day after the Restriction
Period, uBid shall not (i) solicit any Person to make a tender offer for, or
otherwise acquire or sell, the Equity Securities of uBid, (ii) participate in or
support any unsolicited tender offer for, or other acquisition, issuance or
disposition of, the Equity Securities of uBid or (iii) approve or otherwise
permit any proposed business combination or any transaction which, in the case
of (i), (ii) or (iii), individually or in the aggregate, together with the
transactions contemplated by this Agreement, the Distribution Agreement, any
Other Agreements or the PWC Opinion, results in one or more Persons acquiring
(other than in acquisitions not taken into account for purposes of Code
(S)355(e)) directly or indirectly stock representing a Fifty-Percent or Greater
Interest in uBid. In addition, uBid shall not at any time, whether before or
subsequent to the expiration of the Restriction Period, engage in any action
described in clauses (i), (ii) or (iii) of the preceding sentence if it is
pursuant to an arrangement negotiated (in whole or in part) prior to the
Distribution, even if at the time of the Distribution it is subject to various
conditions, nor shall any member take any action, or fail or omit to take any
action, that would cause Code (S)(S) 355(d) or (e) to apply to the Distribution.

     5.5    Sale of Assets. Until the first day after the Restriction Period,
uBid Group shall not sell, transfer, or otherwise dispose of or agree to dispose
of assets (including, for such purpose, any shares of capital stock of a
subsidiary) that, in the aggregate, constitute more than 60 percent of the gross
assets of uBid, nor shall uBid sell, transfer, or otherwise dispose of or agree
to dispose of assets (including, for such purpose, any shares of capital stock
of a subsidiary) that, in the aggregate, constitute more than 60 percent of the
consolidated gross assets of uBid. The foregoing sentence shall not apply to
sales, transfers, or dispositions of assets in the ordinary course of business.
The percentages of gross assets or consolidated gross assets of uBid sold,
transferred, or otherwise disposed of, shall be based on the fair market value
of the gross assets of uBid as of the Distribution Date. Sales, transfers or
other dispositions by uBid or any of its subsidiaries to uBid or any of its
subsidiaries are not subject to this Section 5.5 to the extent not inconsistent
with the Tax-Free Status of the Distribution.

     5.6    Dissolution, Liquidation and Merger. Until the first day after the
Restriction Period, uBid shall not voluntarily dissolve or liquidate. Until the
first day after the Restriction Period, uBid shall not merge, consolidate or
reorganize unless Persons owning uBid stock immediately prior to the merger,
consolidation or other reorganization will own, directly or indirectly, a Fifty-
Percent or Greater Interest in the surviving corporation. For purposes of
calculating the Fifty-Percent or Greater Interest, the interest of such Persons
shall be taken into account only to the extent that the

                                       14
<PAGE>
 
percentage of stock owned directly or indirectly in the surviving corporation by
each person owning stock in uBid immediately before the transaction does not
decrease. In addition, uBid stock acquired before the merger, consolidation or
other reorganization by any Person shall not be counted if the acquisition was
pursuant to a plan (or series of related transactions) in anticipation of the
merger, consolidation or reorganization. Nothing in this Section 5.6 shall
preclude uBid from acquiring another corporation, limited liability company,
limited partnership, general partnership or joint venture solely for cash or
other consideration that is not an Equity Security of uBid. Reorganizations of
uBid with its subsidiaries, and liquidations of uBid subsidiaries are not
subject to this Section 5.6 to the extent not inconsistent with the Tax-Free
Status of the Distribution.

     5.7    Waiver. Any of the provisions of Section 5.2, 5.3, 5.4, 5.5 or 5.6
shall be waived with respect to any particular transaction or transactions if
(i) CCI or uBid has obtained a ruling from the IRS, in form and substance
reasonably satisfactory to CCI, to the effect that such proposed transaction
will not adversely affect the Tax-Free Status of the Distribution, (ii) CCI has
determined, in its sole and absolute discretion that it could not reasonably be
expected that such proposed transaction would have an adverse effect on the Tax-
Free Status of the Distribution, or (iii) with respect to a transaction
occurring at least two years after the Distribution Date, uBid obtains a Tax
Opinion (at its own expense), in form and substance reasonably satisfactory to
CCI, with respect to such proposed transaction. Waiver with respect to one
transaction or group of transactions shall not constitute a waiver with respect
to any other transaction.

     5.8    Enforcement. The parties hereto acknowledge that irreparable harm
would occur in the event that any of the provisions of this Article V were not
performed in accordance with their specific terms or were otherwise breached.
The parties hereto agree that, in order to preserve the Tax-Free Status of the
Distribution, injunctive relief is appropriate to prevent any violation of the
foregoing covenants, provided, however, that injunctive relief shall not be the
exclusive legal or equitable remedy for any such violation.


                                  ARTICLE VI
                COOPERATION RELATED TO DISTRIBUTION TAX MATTERS
                                        
     6.1    Ruling Requests. Until the first day after the Restriction Period,
uBid shall furnish CCI with a copy of any ruling request that uBid may file with
the IRS or any other Taxing Jurisdiction and any opinion received that relates
to or otherwise reasonably could be expected to have any effect on the Tax-Free
Status of the Distribution.

     6.2    Determinations. uBid shall cooperate with CCI in connection with (i)
any determination pursuant to subsection 5.7(ii) above or (ii) any request by
CCI for a ruling. Such cooperation shall include, without limitation, providing
any information and representations reasonably requested by CCI or its counsel
to enable CCI or its counsel to make any such determination or to obtain and
maintain any ruling with respect to the Distribution. From and after the date of
the filing of any such request until the first day after the four-year
anniversary of the date that CCI makes the correlative determination 

                                       15
<PAGE>
 
or receives the correlative ruling, uBid shall not take (nor shall it refrain
from taking) any action that would have caused a representation given by uBid in
connection with any such determination or CCI's request for a ruling to have
been untrue as of the relevant representation date, had uBid intended to take
(or refrain from taking) such action on the relevant representation date.

     6.3    Tax Opinion. CCI shall cooperate with uBid in connection with any
request by uBid for a Tax Opinion.

     6.4    Notice of Actions. Until the first day after the Restriction Period,
uBid will provide adequate notice to CCI of action described in Sections 5.2
through 5.6 above, without regard to the exceptions thereto, within a period of
time sufficient to enable CCI (i) to make the determination referred to in
Section 5.7(ii), (ii) to prepare and seek any ruling in connection with such
proposed transaction, or (iii) to seek injunctive relief pursuant to Section 5.8
hereof in a court of competent jurisdiction. Each such notice shall set forth
the terms and conditions of the proposed transaction, including, without
limitation, the nature of any related action proposed to betaken by the board of
directors of uBid, the approximate number of shares of uBid stock (if any)
proposed to be sold by uBid or otherwise issued by uBid, the approximate value
of uBid assets (or assets of any of the uBid subsidiaries) proposed to be
transferred, and the proposed timetable for such transaction, all with
sufficient particularity to enable CCI to make such determination, prepare and
seek such ruling, or seek such injunctive relief. Promptly, but in any event
within 30 Business Days, after CCI receives such written notice from uBid, CCI
shall notify uBid in writing of such determination or of CCI's intent to seek a
ruling and the proposed date for the initial submission thereof, which date
shall not be more than 60 Business Days after CCI so notifies uBid of its intent
to seek such ruling, provided that such 30-day period or 60-day period, as the
case maybe, shall be appropriately extended for any period of noncompliance by
uBid with this Section 6.4.

                                  ARTICLE VII
                              INCOME TAX CONTESTS
                                        
     7.1    Notification. uBid shall promptly upon receipt of notice thereof,
notify CCI in writing of any communication with respect to any pending or
threatened Proceeding in connection with an Income Tax Liability (or an issue
related thereto) for which CCI may be responsible pursuant to this Agreement.
uBid shall include with such notification a true, correct and complete copy of
any written communication, and an accurate and complete written summary of any
oral communication, so received uBid. The failure of uBid timely to forward such
notification in accordance with the immediately preceding sentence shall not
relieve CCI of its obligation to pay such Income Tax Liability or indemnify uBid
therefor, except and to the extent that the failure timely to forward such
notification actually prejudices the ability of CCI to contest such Income Tax
Liability or increases the amount of such Income Tax Liability.

                                       16
<PAGE>
 
     7.2    CCI Consolidated Return Periods. CCI (or such member of the CCI
Consolidated Group as CCI shall designate) shall have the sole right to
represent the interests of uBid in any Proceeding relating to CCI Consolidated
Return Periods and to employ counsel of its choice at its expense; provided,
however, that any expenses relating to items for which uBid is responsible
pursuant to Section 2 in connection with such a Proceeding shall be borne by
uBid; provided, further, however, that uBid shall be entitled to designate
counsel with respect to any such Proceeding with respect to an Income Tax Return
that includes solely uBid and relates solely to items for which uBid is
responsible hereunder.

     7.3    Power of Attorney. uBid shall execute and deliver to CCI (or such
member of the CCI Group as CCI shall designate) any power of attorney or other
document requested by CCI (or such designee) in connection with any Proceeding
described in Section 7.2 hereof.

                                 ARTICLE VIII
                   APPORTIONMENT OF TAX ATTRIBUTES; REFUNDS
                                        
     8.1    Apportionment of Tax Attributes.

            (a)  If the CCI Consolidated Group has a Tax Attribute, the portion,
if any, of such Tax Attribute that shall be apportioned to uBid and treated as a
carryover to the first Post-Distribution Taxable Period of uBid shall be
determined in accordance with Treasury Regulation (S)(S)1.1502-79 and 1.1502-
79A; provided, however, that the portion, if any, of any consolidated unused
foreign tax credit which shall be apportioned to uBid or such member shall be
determined separately with respect to each of the items of income listed in
Section 904(d) of the Code.

            (b)  No consolidated U.S. federal income Tax Attribute of the CCI
Consolidated Group, other than those described in Section 8.1(a) hereof, and no
consolidated, combined or unitary state, local, or foreign income Tax Attribute
arising in respect of a CCI State, Local and Foreign Return, shall be
apportioned to uBid, except as CCI (or such member of the CCI Group as CCI shall
designate) determines is otherwise required under the provisions of applicable
law.

            (c)  CCI (or its designee) shall determine the portion, if any, of
any Tax Attribute which must (absent a Final Determination to the contrary) be
apportioned to uBid in accordance with this Section 8.1 and applicable law, and
the amount of tax basis and earnings and profits to be apportioned to uBid in
accordance with applicable law, and shall provide written notice of the
calculation thereof to uBid as soon as practicable after the information
necessary to make such calculation becomes available to CCI.

            (d)  uBid shall prepare, or cause to be prepared, and file, or cause
to be filed, all Income Tax Returns for which it is responsible under this
Agreement, so as to take into account, to the extent permitted by applicable
law, any Tax Attribute (and the 

                                       17
<PAGE>
 
amount of tax basis and earnings and profits) apportioned to uBid as calculated
pursuant to Section 8.1(c) hereof. Until such time as any such Tax Attribute has
been utilized by uBid (or would have been so utilized had uBid complied with the
requirements of the previous sentence), uBid shall, in connection with each
Income Tax Return filed by it, provide CCI with a statement, signed by uBid's
chief financial officer and certified by uBid's independent accounting firm,
setting forth in reasonable detail a calculation of the extent to which any such
Tax Attribute was utilized on such Income Tax Return (or would have been so
utilized had uBid complied with the requirements of the previous sentence).

            (e)  Except to the extent otherwise consented to by CCI or
prohibited by applicable law, uBid shall elect to relinquish, waive or otherwise
forego all Carrybacks. In the event that uBid is prohibited by applicable law to
relinquish, waive or otherwise forego a Carryback (or CCI consents thereto), (i)
CCI shall cooperate with uBid, at uBid's expense, in seeking from the
appropriate Taxing Jurisdiction such Refund as reasonably would result from such
Carryback, and (ii) uBid shall be entitled to any Income Tax Benefit Actually
Realized by a member of the CCI Group (including any interest thereon received
from such Taxing Jurisdiction), to the extent that such Refund is directly
attributable to such Carryback, within 10 days after such Refund is Actually
Realized; provided, however, that uBid shall indemnify and hold the members of
the CCI Group harmless from and against any and all collateral tax consequences
resulting from or caused by any such Carryback, including (but not limited to)
the loss or postponement of benefit from the use of tax attributes generated by
a member of the CCI Group or an Affiliate thereof and (x) that expire
unutilized, but would have been utilized but for such Carryback, or (y) the use
of which is postponed to a later taxable period than the taxable period in which
such tax attributes otherwise would have been utilized but for such Carryback.
If there is a Final Determination that results in any change to or adjustment of

                                       18
<PAGE>
 
an Income Tax Benefit Actually Realized by a member of the CCI Group that is
directly attributable to a Carryback, then CCI (or its designee) shall make a
payment to uBid, or uBid shall make a payment to CCI (or its designee), as may
be necessary to adjust the payments between uBid and CCI (or its designee) to
reflect the payments that would have been made under this Section 8.1(e) had the
adjusted amount of such Income Tax Benefit been taken into account in computing
the payments due under this Section 8.1(e).

            8.2  Refunds. Except to the extent provided in Section 8.1(e)
hereof, CCI shall be entitled to all Refunds (and any interest thereon received
from the applicable Taxing Jurisdiction) in respect of Income Taxes for all CCI
Consolidated Return Periods. Except to the extent provided in Section 8.1(e),
uBid shall be entitled to all Refunds (and any interest thereon received from
the applicable Taxing Jurisdiction) in respect of Income Taxes paid by uBid for
all Post-Distribution Taxable Periods. A party receiving a Refund to which
another party is entitled pursuant to this Section 8.2 shall pay the amount to
which such other party is entitled within ten days after such Refund is Actually
Realized. CCI shall be permitted to file, and uBid shall fully cooperate with
CCI in connection with, any claim for Refund in respect of an Income Tax for
which any member of the CCI Group is responsible pursuant to Section 2 hereof.

                                  ARTICLE IX
                    COOPERATION AND EXCHANGE OF INFORMATION

            9.1  Cooperation. uBid, on behalf of itself and each of its
Affiliates, agrees to provide CCI (or its designee) with such cooperation or
information as CCI (or its designee) reasonably shall request in connection with
the determination of any other calculations described in this Agreement, the
preparation or filing of any Income Tax Return or claim for Refund, or the
conduct of any Proceeding. Such cooperation and information shall include,
without limitation, upon reasonable notice (i) promptly forwarding copies of
appropriate notices and forms or other communications (including, without
limitation, information document requests, revenue agent's reports and similar
reports, notices of proposed adjustments and notices of deficiency)received from
or sent to any Taxing Jurisdiction or any other administrative, judicial or
governmental authority, (ii) providing copies of all relevant Income Tax
Returns, together with accompanying schedules and related workpapers, documents
relating to rulings or other determinations by taxing authorities, and such
other records concerning the ownership and tax basis of property, or other
relevant information that uBid or its Affiliates may possess, (iii) the
provision of such additional information and explanations of documents and
information provided under this Agreement (including statements, certificates
and schedules delivered by either party) as shall be reasonably requested by CCI
(or its designee), (iv) the execution of any document that may be necessary or
reasonably helpful in connection with the filing of an Income Tax Return, a
claim for a Refund, or in connection with any Proceeding, including such
waivers, consents or powers of attorney as may be necessary for CCI to exercise
its rights under this Agreement, and (v) the use of uBid's reasonable efforts to
obtain any documentation from a governmental authority or a third party that may
be necessary or reasonably helpful in connection with any of the foregoing. It
is expressly the intention of the parties to this Agreement to take all actions
that shall be necessary to establish CCI as the sole agent for Income Tax
purposes with respect to all

                                       19
<PAGE>
 
CCI Consolidated Federal Returns and CCI State, Local and Foreign Returns. Upon
reasonable notice, uBid shall make its, or shall cause its Affiliates to make
their, employees and facilities available on a mutually convenient basis to
provide explanation of any documents or information provided hereunder. Any
information obtained under this Section 9.1 shall be kept confidential, except
as otherwise reasonably may be necessary in connection with the filing of Income
Tax Returns or claims for Refund or in conducting any Proceeding.
Notwithstanding any other provision of this Agreement, neither uBid, nor any of
its Affiliates nor any other Person shall have any right to receive or obtain
any information relating to Income Taxes of CCI or any of its Affiliates other
than information relating solely to uBid.

            9.2  Retention of Records. uBid agrees to retain all Income Tax
Returns, related schedules and workpapers, and all material records and other
documents as required under Code (S)6001 of the Code and the regulations
promulgated thereunder (and any similar provision of state, local, or foreign
Income Tax law) existing on the date hereof or created in respect of (i) any
taxable period that ends on or before or includes the Distribution Date or (ii)
any taxable period that may be subject to a claim hereunder, until the later of
(x)the expiration of the statute of limitations (including extensions) for the
taxable periods to which such Income Tax Returns and other documents relate and
(y) the Final Determination of any payments that may be required in respect of
such taxable periods under this Agreement. From and after the end of the period
described in the preceding sentence of this Section 9.2, if uBid wishes to
dispose of any such records and documents, then uBid shall provide written
notice thereof to CCI and shall provide CCI the opportunity to take possession
of any such records and documents within 90 days after such notice is delivered;
provided, however, that if CCI does not, within such 90-day period, confirm its
intention to take possession of such records and documents, uBid may destroy or
otherwise dispose of such records and documents.

            9.3  Inadequate Remedy. uBid hereby acknowledges and agrees that (a)
its failure to comply with the provisions of this Article 9 may result in
substantial harm to CCI, including the inability to determine or appropriately
substantiate an Income Tax Liability (or a position in respect thereof) for
which the CCI Consolidated Group (or a member thereof) would be responsible
under this Agreement or appropriately defend against an adjustment thereto by a
taxing authority, and (a) the remedies available to the CCI Consolidated Group
for the breach by uBid of its obligations hereunder shall include (without
limitation) the indemnification by uBid of the CCI Consolidated Group for any
Income Tax Liabilities incurred or any Income Tax benefit lost or postponed by
reason of such breach and the forfeiture by uBid of any related rights to
indemnification by CCI. In addition, if uBid fails to provide any cooperation or
information requested pursuant to this Agreement (x) within the specified time
or (y) in the absence of such specified time, within a reasonable period (as
determined in good faith by the party requesting such information), then,
without limiting any other remedy available to any member of the CCI
Consolidated Group for breach of uBid's obligations under this Agreement, CCI
shall have the right to engage a nationally recognized accounting firm of its
choice to gather such information. uBid agrees to permit any such nationally
recognized accounting firm full access to all appropriate records or other
information in the

                                       20
<PAGE>
 
possession uBid during normal business hours, and promptly to reimburse or pay
directly all costs and expenses in connection with the engagement of such
accountants.

                                   ARTICLE X
                                   PAYMENTS

            10.1  Method of Payment. All payments required by this Agreement
shall be made by (a) wire transfer to the appropriate bank account as may from
time to time be designated by the parties for such purpose; provided that, on
the date of such wire transfer, notice of the transfer is given to the recipient
thereof in accordance with Section 12.1 hereof, or (ii) any other method agreed
to by the parties. All payments due under this Agreement shall be deemed to be
paid when available funds are actually received by the payee.

            10.2  Interest. Any payment required by this Agreement that is not
made on or before the date required hereunder shall bear interest, from and
after such date through the date of payment, at the Underpayment Rate.

            10.3  Characterization of Payments. For all tax purposes, the
parties hereto agree to treat, and to cause their respective Affiliates to
treat, (i) any payment required by this Agreement, as either a contribution by
CCI to uBid or a distribution by uBid to CCI, as the case may be, occurring
immediately prior to the Distribution and (ii) any payment of interest or non-
federal Income Taxes by or to a Taxing Jurisdiction, as taxable or deductible,
as the case may be, to the party entitled under this Agreement to retain such
payment or required under this Agreement to make such payment, in either case
except as otherwise mandated by applicable law; provided that in the event it is
determined as a result of a Final Determination that any such treatment is not
permissible, the payment in question shall be adjusted to place the parties in
the same after-tax position they would have enjoyed absent such Final
Determination.

                                  ARTICLE XI
                            RESOLUTION OF DISPUTES

            11.1  Distribution Agreement. Except as specifically modified by
this Article XI, the provisions of Article VIII of the Distribution Agreement
shall apply to any dispute arising in connection with this Agreement; provided,
however, that no provision in this Article XI or such Article VIII shall be
construed to extend the time periods set forth in this Agreement during which
any party may make a payment, deliver a notice, provide information, grant or
withhold approval or consent or take any other action.

            11.2  Arbitrator. CCI shall select the arbitrator, who shall be an
attorney or accountant who is generally recognized in the tax community as a
qualified and competent tax practitioner with experience in the tax area
involved in the issue or issues to be resolved.

            11.3  Settlement Proposals. In connection with such arbitration,
each party shall present an overall settlement proposal to the arbitrator that
shall encompass all 

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<PAGE>
 
issues to be resolved, and the two proposals shall set the outer limits of the
range within which the arbitrator may make a determination as to the appropriate
settlement result.

            11.4  Costs. All costs of the arbitration process shall be borne by
the party determined by the arbitrator to have lost the arbitration; provided,
however, (i) in the event the arbitrator makes a determination that reflects a
50-50 settlement, CCI and uBid shall share equally the costs of the arbitration,
and (ii) in the event the arbitrator makes a determination that reflects a
divided settlement, the arbitrator shall determine the proportion in which the
parties shall share the costs of arbitration.

                                  ARTICLE XII
                                 MISCELLANEOUS

            12.1  Notices. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given upon (a) a transmitter's confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard overnight
courier the following Business Day or if delivered by hand the following
Business Day), or (b) confirmed delivery of a standard overnight courier or
delivered by hand, to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice):

If to CCI, to:      Creative Computers, Inc.
                    2555 West 190th Street
                    Torrance, California  90504
                    Attention:  Chief Financial Officer

If to uBid, to:     uBid, Inc.
                    2525 Busse Highway
                    Elk Grove Village, Illinois  60007
                    Attention:  Chief Financial Officer

Such names and addresses may be changed by notice given in accordance with this
Section 12.1.

            12.2  Designation of Affiliate. CCI may assign any of its rights or
obligations under this Agreement to any member of the CCI Group as it shall
designate; provided, however, that no such assignment shall relieve CCI of any
obligation to make a payment hereunder to uBid to the extent such designee fails
to make such payment.

            12.3  Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein, and supersedes and cancels all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter.

            12.4  Amendment. This Agreement may be amended, modified or
supplemented only by a written agreement signed by both of the parties hereto.

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<PAGE>
 
            12.5  Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
reference to choice of law principles, including matters of construction,
validity and performance.

            12.6  Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same original.

            12.7  Titles and Headings. Titles and headings to sections herein
are included for convenience of reference only and are not intended to be a
part, or to affect the meaning or interpretation, of this Agreement.

            12.8  Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.

            12.9  Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner.

            IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the day and year first written above.

                              CREATIVE COMPUTERS, INC.


                              By:       /s/ THEODORE R. SANDERS
                                 -----------------------------------------
                                 Name:  Theodore R. Sanders
                                 Title:  Chief Financial Officer
  

                              UBID, INC.


                              By:       /s/ THOMAS E. WERNER
                                 -----------------------------------------
                                 Name:  Thomas E. Werner
                                 Title:  Chief Financial Officer

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