Document:

<PAGE>   1
     * Certain sections omitted and filed separately with the Commission

                                                             EXHIBIT 10.14

                          MARKETING SERVICES AGREEMENT

         This MARKETING SERVICES AGREEMENT (this "AGREEMENT") is entered into as
of the 3rd day of February, 2000 (the "EFFECTIVE DATE") by and between
VarsityBooks.com Inc., a Delaware corporation with offices at 2020 K Street, NW
6th Floor, Washington, D.C. 20006 ("VARSITYBOOKS") and Sallie Mae, Inc. a
Delaware corporation with offices at 11600 Sallie Mae Drive, Reston, V.A. 20193
("SALLIE MAE").

         WHEREAS, Sallie Mae provides educational loan products, educational
enterprise-related products (the "SALLIE MAE PRODUCTS") and operates a Web site
located at the URL http:///www.salliemae.com (the "SALLIE MAE WEB SITE") and
would like to expand its customer base by having access to the users of the
VarsityBooks Web Site (as defined below); and

         WHEREAS, VarsityBooks maintains a Web site located at the URL
http://www.varsitybooks.com (the "VARSITYBOOKS WEB SITE") through which it sells
and distributes college textbooks, general interest books and other products;
and

         WHEREAS, VarsityBooks and Sallie Mae would like to define an
arrangement whereby VarsityBooks will market the Sallie Mae Products to users of
the VarsityBooks Web Site. Specifically, VarsityBooks will provide Sallie Mae
with advertising space on the VarsityBooks Web Site and with other marketing
opportunities. Sallie Mae will pay VarsityBooks a monthly fee throughout the
duration of the Agreement;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

1.       DEFINITIONS

         Capitalized terms used in this Agreement have the meanings given to
         them below or as elsewhere defined in this Agreement. All definitions
         will apply both to their singular or plural forms, as the context may
         require. "DAYS" means calendar days, unless otherwise specified. All
         references to "SECTION" are to Sections of this Agreement, unless
         otherwise specified. "AGREEMENT" collectively means this Agreement and
         all Exhibits hereto (which are hereby incorporated into this
         Agreement), and all valid amendments to this Agreement. Headings are
         intended only for reference purposes.

         (A)      "AFFILIATE" means, with respect to a party to this Agreement,
                  those entities controlled by, controlling, or under common
                  control with such party. For the purposes of this definition,
                  "CONTROL" (and its derivatives) will mean, with respect to
                  such an entity, having the legal, beneficial or equitable
                  ownership, directly or indirectly, of fifty percent (50%) or
                  more of the capital stock (or other ownership interest, if the
                  entity is not a corporation) of such entity ordinarily having
                  voting rights, or otherwise having a right to appoint at least
                  half of the directors (or analogous officers) of such entity.

         (B)      "CONFIDENTIAL INFORMATION" has the meaning given in Section
                  9(A).

         (C)      "CORPORATE TRANSACTION" means (A) any consolidation or merger
                  of the Corporation with or into any other corporation or other
                  entity, other than any

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<PAGE>   2

                  merger or consolidation resulting in the holders of the
                  capital stock of the Corporation entitled to vote for the
                  election of directors holding a majority of the capital stock
                  of the surviving or resulting corporation or other entity
                  entitled to vote for the election of directors, (B) any person
                  or entity (including any affiliates thereof) becoming the
                  holder of a majority of the capital stock of the Corporation
                  entitled to vote for the election of directors, or (C) any
                  sale or other disposition by the Corporation of all or
                  substantially all of its assets or capital stock.

         (D)      "EQUITY OFFERING" means an equity offering resulting in net
                  proceeds to the Corporation in excess of ten million dollars
                  ($10,000,000) which occurs prior to the IPO Date.

         (E)      "INTELLECTUAL PROPERTY RIGHTS" means any and all worldwide
                  rights, title and interest in intellectual property (including
                  without limitation, all patents, patent registrations,
                  copyrights, moral rights, trademarks, trade names, service
                  marks, service names, trade secrets, know-how or other similar
                  rights arising or enforceable under U.S. law, foreign law, or
                  international treaty regime).

         (F)      "IPO DATE" means the date on which the Corporation closes the
                  initial public offering of its Common Stock.

         (G)      "SALLIE MAE CONTENT" means content provided by Sallie Mae to
                  VarsityBooks for use in accordance with this Agreement.

         (H)      "SALLIE MAE SOLUTIONS" means a division of Sallie Mae that
                  provides business processing, technical and software solutions
                  to higher education.

         (I)      "SALLIE MAE MARKS" means the names, trademarks, service marks,
                  trade names, service names, logos, symbols, and other product
                  or service designations currently held by Sallie Mae and all
                  Sallie Mae domain names and hyperlink icons, to the extent set
                  forth in Exhibit B.

         (J)      "SALLIE MAE WEB SITE(S)" means the internet web site(s) owned,
                  managed, or controlled by Sallie Mae and its Affiliates,
                  including, without limitation, all information, materials,
                  features, products, services, advertisements, promotions,
                  links, pointers, technology and software, in any format or
                  medium, made available or embodied therein (except for any
                  VarsityBooks Marks).

         (K)      "TERM" has the meaning given in Section 4(A).

2.       VARSITYBOOKS OBLIGATIONS

         (A)      VarsityBooks will provide Sallie Mae with a Rate Card,
                  attached as Exhibit C (the "Rate Card"), which specifies the
                  cost of marketing services with VarsityBooks.com except that
                  for the first year of this agreement Sallie Mae selects the
                  Sole Sponsorship of the VarsityScholars Vertical at a fixed
                  price of * dollars. In the event Sallie Mae selects
                  the Sole Sponsorship of the VarsityScholars Vertical in year 2
                  of this Agreement, and assuming VarsityBooks continues its
                  VarsityScholars Vertical, the fixed price shall

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                  remain at *. VarsityBooks shall have the right to
                  update prices, available services and any other information
                  reflected on the Rate Card, at its discretion, twice each
                  year. Sallie Mae will order any and all marketing services in
                  accordance with Sections 2(B) and (D) below, and will provide
                  payment for any such services ordered in accordance with
                  Section 5 below.

         (B)      Throughout the term of this Agreement, Sallie Mae will receive
                  a preferred partner discount of * off the price of marketing
                  services presented as part of any VarsityBooks Rate Card. Such
                  discount will not apply to the sponsorship of any
                  VarsityBooks' vertical or the use of the VarsityBooks campus
                  rep program. Notwithstanding the foregoing, Sallie Mae will
                  receive a * discount on any banner ads purchased pursuant to
                  this Agreement.

         (C)      VarsityBooks will provide Sallie Mae the option of
                  participating in various new marketing opportunities as they
                  arise.

         (D)      For the purposes of implementing specific deliverables, Sallie
                  Mae and VarsityBooks will execute mutually agreeable service
                  orders (the "Ad Insertion Orders") that will specify those
                  marketing services which will be executed on Sallie Mae's
                  behalf by VarsityBooks. The Ad Insertion Orders will become
                  attachments to this Agreement and will be executed on the
                  following schedule:

<TABLE>
<CAPTION>

              Ad Insertion Order Date                      Period Covered
              -----------------------                      ---------------
<S>           <C>                                          <C>
              1/31/2000                                    2/1/2000 - 6/31/2000

              6/15/2000                                    7/1/2000 - 12/31/2000

              12/15/2000                                   1/1/2001 - 6/31/2001

              6/15/2001                                    7/1/2001 - 1/31/2002
</TABLE>

3.       LICENSES

         (A)      During the term of this Agreement Sallie Mae grants to
                  VarsityBooks a non-exclusive, worldwide, royalty-free, fully
                  paid-up, non-transferable license to use the Sallie Mae Marks
                  solely as contemplated by this Agreement on, or in developing,
                  supporting and maintaining, the hyperlinks and other
                  promotional media contemplated by this Agreement in the
                  ordinary course of business, including without limitation, as
                  applicable, the rights to use, copy, display, distribute, and
                  create and use derivative works based on the Sallie Mae Marks.
                  Any Sallie Mae Content incorporated into derivative works so
                  created shall be the property of Sallie Mae. Notwithstanding
                  the foregoing, the form of any use of any Sallie Mae Mark
                  which is viewable by the public or any user of the
                  VarsityBooks Web Site must be approved by Sallie Mae in
                  advance either in writing or through the procedures set forth
                  in this Agreement. Any other use of any Sallie Mae Marks is
                  prohibited unless Sallie Mae gives its prior written consent
                  to

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<PAGE>   4

                  each such use. Upon the expiration or termination of this
                  Agreement, VarsityBooks will cease using the Sallie Mae Marks
                  except as Sallie Mae agrees in writing.

         (B)      VarsityBooks will not adopt or use in any manner any name,
                  mark, symbol, logo, icon, design, copyright or company,
                  product or service name or designation not currently in use
                  and which is confusingly similar to any Sallie Mae Marks, or
                  which constitutes a translation thereof, without Sallie Mae's
                  prior written consent. VarsityBooks will not register anywhere
                  in the world, directly or indirectly, any Sallie Mae Marks or
                  any other name, mark, symbol, logo, icon, design, copyright or
                  company, product or service name or designation not currently
                  in use and which is confusingly similar thereto or which
                  constitutes a translation thereof.

         (C)      VarsityBooks agrees that in connection with its use of the
                  Sallie Mae Marks it will display symbols and notices clearly
                  and sufficiently indicating the trademark status and ownership
                  of Sallie Mae's Marks in accordance with applicable trademark
                  law and practice.

         (D)      Each party retains all rights, title and interest in and to
                  its intellectual property except for those licenses and rights
                  expressly granted by this Agreement.

         (E)      VarsityBooks acknowledges that its use of licensed materials
                  in breach of the scope of the grant of license it is receiving
                  under Section 3(A) or 3(B) above, as applicable, or its breach
                  of Section 3(C) or 3(D) above, as applicable, will cause
                  Sallie Mae irreparable injury for which monetary damages will
                  not make Sallie Mae whole. Accordingly, in addition to all
                  other available remedies and notwithstanding Section 14
                  hereof, Sallie Mae will be entitled to equitable or injunctive
                  relief as and where it deems fit in the event of an actual,
                  threatened or attempted breach by VarsityBooks of any such
                  provision.

4.       TERM; TERMINATION

         (A)      The term of this Agreement will commence on February 1, 2000
                  and end two (2) years thereafter (the "TERM"). At the end of
                  the Term, this Agreement may be renewed upon mutual agreement
                  of the parties.

         (B)      In addition to the parties' termination rights set forth
                  elsewhere in this Agreement, Sallie Mae may terminate this
                  Agreement in the event of a Corporate Transaction prior to the
                  earlier of (a) the IPO Date or (b) the closing of an Equity
                  Offering.

         (C)      In addition to the parties' termination rights set forth
                  elsewhere in this Agreement, either party may terminate this
                  Agreement:

                  (1)      at any time during the Term, upon at least thirty
                           (30) days' prior written notice to the other party if
                           such other party materially breaches this Agreement
                           or any of the representations and warranties
                           hereunder and fails to cure such material breach
                           within such thirty (30) days;

                  (2)      immediately upon written notice to the other party,
                           if such other party: (a) ceases to conduct business
                           in the normal course; (b) makes an assignment for the

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<PAGE>   5

                           benefit of creditors; (c) is liquidated or otherwise
                           dissolved; or (d) becomes insolvent, is adjudicated
                           bankrupt, or a receiver, trustee or custodian is
                           appointed for it.

         (D)      Upon the termination or expiration of this Agreement for any
                  reason:

                  (1)      the licenses conferred in Section 3 will cease;

                  (2)      each party will comply with the requirements of
                           Section 9(F);

                  (3)      Sallie Mae will pay all amounts properly due and
                           payable to VarsityBooks pursuant to Section 6(B), up
                           until the effective date of such termination or
                           expiration (prorated on a daily basis); and

                  (4)      neither party will have any further liability or
                           obligation to the other party, except as otherwise
                           expressly provided in this Agreement (including
                           without limitation Section 4(D) below).

         (E)      Any provision of this Agreement that imposes or contemplates
                  continuing obligations on a party will survive the expiration
                  or termination of this Agreement for any reason.

5.       COSTS AND PAYMENT

         (A)      Unless otherwise expressly provided in this Agreement, each
                  party will be responsible for all costs and expenses that it
                  incurs in performing its obligations hereunder.

         (B)      For each Ad Insertion Order executed by Sallie Mae and
                  VarsityBooks, Sallie Mae shall be entitled to order marketing
                  services from VarsityBooks in an amount equal to (A) TWO
                  MILLION DOLLARS ($2,000,000) (the "Aggregate Order Maximum");
                  MINUS (B) any amounts ordered by Sallie Mae on prior Ad
                  Insertion Orders. Once the aggregate amount of all services
                  ordered by Sallie Mae on Ad Insertion Orders reaches the
                  Aggregate Order Maximum, Sallie Mae may not execute any
                  additional Ad Insertion Orders under this Agreement. Pricing
                  of services ordered by Sallie Mae on any Ad Insertion Order
                  will be calculated in accordance with Section 2 above.

         (C)      In consideration for the marketing services and advertising
                  space provided to Sallie Mae and the rights granted hereunder,
                  Sallie Mae will pay VarsityBooks the amounts set forth in
                  Exhibit A.

6.       REPRESENTATIONS AND WARRANTIES

         (A)      Each party represents that it has the full right and authority
                  to enter into and to perform its obligations under this
                  Agreement, and the execution and delivery of this Agreement by
                  it, and the performance of its obligations hereunder, have
                  been duly authorized by all requisite corporate actions on its
                  part, and this Agreement has been duly executed and delivered
                  by it.

         (B)      Each party warrants that:

                  (1)      The execution or implementation of this Agreement by
                           such party, and the

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<PAGE>   6

                           exercise or performance of any rights or obligations
                           hereunder, will not contravene any provision of its
                           organizational documents, or to its knowledge violate
                           or conflict with any agreement or binding obligation
                           to which it is a party.

                  (2)      Except as otherwise expressly authorized by this
                           Agreement, such party will not take any action or
                           make any statement, representation, or warranty
                           regarding the other party, its products or services
                           (including the products and services of third parties
                           which the other party promotes, markets, resells or
                           distributes) which is not previously authorized in
                           writing by the other party.

                  (3)      all obligations owed to third parties with respect to
                           the activities contemplated to be undertaken by
                           either party pursuant to this Agreement are or will
                           be fully satisfied by such party, and the other party
                           will have no obligations with respect thereto;

         The sole and exclusive remedy of the other party, and the sole and
exclusive liability and obligations of the warranting party, for breach of any
of the warranties set forth in Section 6(A) or 6(B) hereof will be as provided
under Section 7(a) or 7(B) below, as applicable. Notwithstanding the foregoing,
both parties shall have the right to seek injunctive relief for any breach under
this Agreement.

         (C)      Each party covenants that:

                  (1)      it will comply with all applicable federal, state and
                           local laws in the performance of its obligations
                           hereunder; and

                  (2)      it will not distribute any unwanted or unsolicited
                           bulk, junk or spam e-mail.

         (D)      VarsityBooks warrants to Sallie Mae that it will not knowingly
                  allow either those pages of the VarsityBooks Web Site which
                  reference Sallie Mae or which display any name or mark of
                  Sallie Mae, or any VarsityBooks Marks used by Sallie Mae, nor
                  the operation, display or use of any of the foregoing as
                  contemplated by this Agreement, nor the content, goods and
                  services offered through the VarsityBooks Web Site to (a)
                  constitute, or contain material that would constitute, libel,
                  defamation or slander; (b) constitute, or contain material
                  that would constitute, an invasion of privacy or a violation
                  of the rights to publicity of any third party; (c) infringe
                  upon the Intellectual Property Rights of any third party; (d)
                  violate any law, statute, ordinance or regulation or promote
                  illegal activities; (e) constitute or contain or promote
                  obscene materials; (f) promote violence; (g) promote
                  discrimination based on race, sex, religion, nationality,
                  disability, sexual orientation, or age; (h) constitute or
                  contain content which is defamatory, trade libelous,
                  unlawfully threatening or unlawfully harassing; (i) sell or
                  otherwise market fraudulent materials; or (j) include "Sallie
                  Mae" or variations or misspellings thereof in their domain
                  names or in metatags or other tools designed to mislead users
                  or search engines.

         (E)      Sallie Mae warrants to VarsityBooks that it will not knowingly
                  allow either the Sallie Mae Web Site (or those pages of the
                  Sallie Mae Web Site(s) which reference VarsityBooks or which
                  display any name or mark of VarsityBooks), nor any Sallie Mae
                  Content or Sallie Mae Marks used by VarsityBooks, nor the
                  operation, display or use of any of the foregoing as
                  contemplated by this Agreement nor the content, goods and
                  services offered through the Sallie Mae Web Site, to: (a)
                  constitute, or contain material

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<PAGE>   7

                  that would constitute, libel, defamation or slander; (b)
                  constitute, or contain material that would constitute, an
                  invasion of privacy or a violation of the rights to publicity
                  of any third party; (c) infringe upon the Intellectual
                  Property Rights of any third party; (d) violate any law,
                  statute, ordinance or regulation or promote illegal
                  activities; (e) constitute or contain or promote obscene
                  materials; (f) promote violence; (g) promote discrimination
                  based on race, sex, religion, nationality, disability, sexual
                  orientation, or age; (h) constitute or contain content which
                  is defamatory, trade libelous, unlawfully threatening or
                  unlawfully harassing; (i) sell or otherwise market fraudulent
                  materials; or (j) include "VarsityBooks" or variations or
                  misspellings thereof in their domain names or in metatags or
                  other tools designed to mislead users or search engines.

         (F)      Notwithstanding the foregoing, neither VarsityBooks nor Sallie
                  Mae shall be liable for the content, goods, and/or services
                  provided by or available through third party Web sites made
                  available by hyperlinks on the Web sites of either
                  VarsityBooks or Sallie Mae.

         (G)      EXCEPT FOR THE WARRANTIES IN THIS SECTION 6, NEITHER PARTY
                  MAKES ANY AND EACH PARTY SPECIFICALLY DISCLAIMS ALL OTHER
                  WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS WITH
                  RESPECT TO THE PROGRAM CONTEMPLATED BY THIS AGREEMENT OR ANY
                  PRODUCTS OR SERVICES SOLD HEREUNDER, INCLUDING, BUT NOT
                  LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
                  FITNESS FOR A PARTICULAR PURPOSE, AND ANY IMPLIED WARRANTIES
                  ARISING FROM STATUTE, COURSE OF DEALING, COURSE OF PERFORMANCE
                  OR USAGE OF TRADE.

         (H)      Neither party to this agreement makes any representation that
                  the operation of its Web site will be uninterrupted or
                  error-free, and neither party will be liable for the
                  consequences of any such interruptions or errors.

7.       INDEMNIFICATION

         (A)      BY SALLIE MAE. Sallie Mae will indemnify, defend and hold
                  harmless VarsityBooks and its affiliates, directors, officers
                  and employees from and against any and all damages, losses,
                  liabilities, expenses, and costs (including, without
                  limitation, reasonable attorneys' fees) resulting or arising
                  from a third party claim alleging facts that would constitute
                  a breach by Sallie Mae of a warranty it is giving under
                  Section 6 above or a breach of an obligation of Sallie Mae
                  under Section 19 below.

         (B)      BY VARSITYBOOKS. VarsityBooks will indemnify, defend and hold
                  harmless Sallie Mae and its affiliates, directors, officers
                  and employees from and against any and all damages, losses,
                  liabilities, expenses, and costs (including, without
                  limitation, reasonable attorneys' fees) resulting or arising
                  from a third party claim alleging facts that would constitute
                  a breach by VarsityBooks of a warranty it is giving under this
                  Section 6 above or a breach of an obligation of VarsityBooks
                  in Section 19 below.

         (C)      In connection with any claim or action described in this
                  section, the Party seeking indemnification (a) will give the
                  Indemnifying Party prompt written notice of the indemnifiable
                  claim, including the basis on which indemnification is being
                  asserted and

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                  copies of all relevant pleadings, demands and other papers
                  relating to the action and in possession of the Indemnified
                  Party (b) will cooperate with the Indemnifying Party (at the
                  Indemnifying Party's expense) in connection with the defense
                  and settlement of the claim, and (c) will permit the
                  Indemnifying Party to control the defense and settlement of
                  the claim including the selection of counsel, provided that
                  the Indemnifying Party may not settle the claim without the
                  Indemnified Party's prior written consent (which will not be
                  unreasonably withheld). Further, the Indemnifying Party will
                  apprise the Indemnified Party of its progress in handling the
                  claim and permit the Indemnified Party to have its own counsel
                  in attendance at all proceedings and substantive negotiations
                  relating to such claim at Indemnified Party's cost and
                  expense.

8.       LIMITATION OF LIABILITY: EXCEPT FOR EACH PARTY'S OBLIGATIONS SET FORTH
         IN SECTION 7, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER
         PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, EXEMPLARY, PUNITIVE,
         CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, INCLUDING WITHOUT
         LIMITATION LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
         DAMAGES. EXCEPT FOR EACH PARTY'S OBLIGATIONS SET FORTH IN SECTION 7,
         EACH PARTY WILL BE LIABLE TO THE OTHER PARTY SOLELY FOR DIRECT MONEY
         DAMAGES. SHOULD SALLIE MAE BECOME ENTITLED TO BRING CLAIM AGAINST
         VARSITYBOOKS UNDER THIS AGREEMENT, VARSITYBOOKS' TOTAL, AGGREGATE
         LIABILITY FOR ALL CLAIMS, REGARDLESS OF THE CAUSE OF ACTION (WHETHER IN
         CONTRACT, TORT OR OTHERWISE), AT ANY TIME WILL NOT EXCEED AN AMOUNT
         EQUAL TO: (A) THE $2 MILLION AMOUNT PAYABLE BY SALLIE MAE TO
         VARSITYBOOKS UNDER THIS AGREEMENT AS OF THE DATE OF THE INSTANT CLAIM;
         MINUS (B) THE TOTAL AMOUNT OF DAMAGES PAID BY VARSITYBOOKS TO SALLIE
         MAE FOR ALL PREVIOUS CLAIMS OF SALLIE MAE UNDER THIS AGREEMENT,
         EXCEPTING ANY AMOUNTS PAID BY VARSITYBOOKS PURSUANT TO SECTION 7.

9.       "CONFIDENTIAL INFORMATION" means all information relating to the
         Agreement, or received by a party (the "RECEIVING PARTY") from the
         other party (the "FURNISHING PARTY") in the course of performing under
         the Agreement, which is or should reasonably be understood to be
         confidential or proprietary to the Furnishing Party (including
         confidential information disclosed by the Furnishing Party which
         relates to or is owned by its licensors, suppliers, partners,
         contractors and agents), in whatever form (whether tangible,
         intangible, electronic, oral or otherwise), including without
         limitation the terms of this Agreement, technical processes and
         formulas, source codes, product designs, sales, cost and other
         unpublished financial information, customer information, product and
         business plans, projections and marketing data.

         (A)      The Receiving Party acknowledges and agrees that any and all
                  Confidential Information received by it under this Agreement
                  hereunder is of a confidential, proprietary and/or trade
                  secret nature to the Furnishing Party (or its licensors,
                  suppliers, partners, contractors and agents) and that the
                  Furnishing Party (or its licensors, suppliers, partners,
                  contractors and agents) owns all Intellectual Property Rights
                  in such Confidential Information.

                                       8
<PAGE>   9

         (B)      The Receiving Party: (1) will protect Confidential Information
                  received hereunder from unauthorized use and disclosure with
                  at least the same degree of care that it utilizes with respect
                  to its own similar proprietary information, but in no event
                  less than a reasonable standard of care and use same solely
                  and exclusively in connection with the implementation or
                  enforcement of this Agreement; (2) except as contemplated by
                  this Agreement, may not directly or indirectly disclose,
                  publish, copy, duplicate onto, convey through, or store on any
                  medium such Confidential Information without the Furnishing
                  Party's prior written consent; and (3) will ensure that all
                  copyright, trademark and other proprietary notices affixed to
                  or displayed on such Confidential Information will not be
                  removed or modified and will be reproduced on any copies
                  thereof. The Receiving Party will promptly inform the
                  Furnishing Party of any actual or suspected breach of this
                  Section 9 by it (including its contractors and agents) upon
                  becoming aware of such actual or suspected breach.

         (C)      The confidentiality provisions of this Section 9 will not
                  apply to any information that the Receiving Party can show:
                  (1) is or subsequently becomes publicly available without
                  breach of any obligation owed to the Furnishing Party; (2) was
                  known to the Receiving Party prior to the Furnishing Party's
                  disclosure of such information to the Receiving Party; (3)
                  became known to the Receiving Party from a source other than
                  the Furnishing Party, and without breach of an obligation of
                  confidentiality owed to the Furnishing Party; (4) is
                  independently developed by the Receiving Party without
                  reference to the Furnishing Party's Confidential Information;
                  or (5) is used by the Receiving Party in order to enforce any
                  of its rights, claims or defenses under, or as otherwise
                  contemplated in, this Agreement.

         (D)      Nothing in this Agreement will be deemed to prevent the
                  Receiving Party from disclosing any Confidential Information
                  received hereunder pursuant to any applicable law, regulation
                  or court order, including, without limitation, the Securities
                  Act of 1933 and the Securities Exchange Act of 1934, provided
                  that such disclosure will be limited to the minimum acceptable
                  level of disclosure and that such Receiving Party will
                  immediately notify the Furnishing Party of the imminent
                  disclosure and minimize or prevent such disclosure to the
                  maximum extent allowed under applicable law, regulation or
                  court order.

         (E)      Immediately upon the earlier of the Furnishing Party's request
                  or the termination or expiration of this Agreement for any
                  reason, the Receiving Party will: (1) stop using all
                  Confidential Information of the other party then in its
                  possession not under a valid license; (2) erase or destroy all
                  such Confidential Information residing in any computer memory
                  or data storage apparatus; and (3) destroy or return to the
                  Furnishing Party (in the Furnishing Party's discretion) all
                  such Confidential Information in tangible form.

         (F)      The Receiving Party acknowledges that its breach of this
                  Section 9 will cause the Furnishing Party (or its licensors)
                  irreparable injury for which monetary damages will not make
                  the other party whole. Accordingly, in addition to all other
                  available remedies and notwithstanding Sections 8 or 14
                  hereof, the Furnishing Party (or its licensors) will be
                  entitled to equitable or injunctive relief as and where it
                  deems fit in the event of an actual, attempted or threatened
                  breach of any obligation of the Receiving Party (including its
                  contractors and agents) under this Section 9.

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<PAGE>   10

         (G)      The obligations of confidentiality and limitation of use,
                  disclosure, and access set forth herein shall survive the
                  termination of this Agreement for a period of five years from
                  the date of such termination.

10.      PUBLICITY

         The parties will issue mutually agreeable joint news releases from time
to time as the parties deem appropriate.

11.      NOTICE

         (A)      Any notice or other communication required or permitted to be
                  made or given by either party pursuant to this Agreement will
                  be in writing, and will be deemed to have been duly given: (i)
                  three (3) business days after the date of mailing if sent by
                  certified U.S. mail, postage prepaid, with return receipt
                  requested; (ii) when transmitted if sent by facsimile,
                  provided a confirmation of transmission is produced by the
                  sending machine and a copy of such facsimile is promptly sent
                  by another means specified in this section; or (iii) when
                  delivered if delivered personally or sent by express courier
                  service. All notices will be sent to the other party at its
                  address as set forth below or at such other address as such
                  party will have specified in writing:

<TABLE>
<CAPTION>

                  In the case of VarsityBooks:                In the case of Sallie Mae:

<S>                                                           <C>
                  VARSITYBOOKS                                SALLIE MAE, INC.
                  2020 K Street, N.W.                         11600 Sallie Mae Drive
                  6th Floor                                   Reston, VA 20193
                  Washington, D.C. 20006
                  Attn:  Richard Hozik, SVP/CFO               Attn:    Robert W. Jackson, VP
                  Phone: 202-667-3400                         Phone:   703-810-6018
                  Fax: 202.332.5498                           Fax:     703-810-6128

                  With a copy to:                             With a copy to:

                  Shaw Pittman                                Sallie Mae, Inc.
                  1676 International Drive                    11600 Sallie Mae Drive
                  McLean, VA  22102                           Reston, VA 20193
                  Attn: Andrew M. Tucker                      Attn:  Robert S. Lavet, VP and Deputy
                  Phone: 703-790-7900                         General Counsel
                  Fax:     703-790-7901                       Phone:  703-810-5016
                                                              Fax:      703-810-3023
</TABLE>

12.      WAIVER

         No failure or delay by either party in exercising any right, power or
         remedy will operate as a waiver of such right, power or remedy, and no
         waiver will be effective unless it is in writing and signed by the
         waiving party. If either party waives any right, power or remedy, such
         waiver will

                                       10

<PAGE>   11
         not waive any successive or other right, power or remedy the party may
         have under this Agreement.

13.      SEVERABILITY

         If any part of this Agreement is determined to be illegal, invalid,
         unenforceable, or otherwise contrary to law by an arbitrator under
         Section 15 or a court of competent jurisdiction, the remainder of the
         Agreement will remain in full force and effect, and the parties will
         substitute an enforceable provision that, to the maximum extent
         possible in accordance with applicable law, preserves the original
         intentions and economic positions of the parties.

14.      GOVERNING LAW; DISPUTE RESOLUTION

         This Agreement will for all purposes be governed, interpreted,
         construed, and enforced solely and exclusively in accordance with the
         laws of the State of Delaware except for any provisions of Delaware law
         which would require or permit the application of the substantive law of
         another jurisdiction.

         In discussions and activities relating to this Agreement, VarsityBooks
         and Sallie Mae will cooperate in good faith to accomplish the
         objectives specified in this Agreement. If any dispute arises relating
         to either Party's rights or obligations under this Agreement,
         VarsityBooks and Sallie Mae will use good faith efforts to resolve the
         matter in accordance with this Section 14

         Within ten (10) business days following the written request of either
         Party (which will describe the nature of the dispute and other relevant
         information), the Parties' managers who are responsible for the
         VarsityBooks/Sallie Mae relationship will meet to resolve the dispute
         at a mutually convenient time and place. If the relationship managers
         are unable to resolve the dispute within two (2) business days
         following their initial meeting, they will refer the matter to the
         Parties' divisional executives who are responsible for the
         administration of this Agreement; along with a written statement (or
         statements) describing the nature of the dispute and other relevant
         information.

         Within five (5) business days following the referral of the matter to
         the Parties' divisional executives, the divisional executives will meet
         to resolve the dispute at a mutually convenient time and place.
         Additional representatives of the parties may be present at the
         meeting. All negotiations pursuant to this Section will be confidential
         and treated as compromise and settlement negotiations for purposes of
         the Federal Rules of Evidence and State Rules of Evidence. Any
         resolution reached under this Section will be reduced to writing and
         signed by the Parties. During a dispute resolution conducted under this
         Section, the Parties will diligently perform all obligations hereunder
         that are not directly related to the dispute. If the divisional
         executives are unable to resolve the dispute within ten (10) business
         days following their initial meeting, the controversy or claim will be
         resolved through binding arbitration (excepting disputes relating to
         issues of proprietary rights, including, but not limited to
         intellectual property and confidentiality) conducted in accordance with
         the commercial arbitration rules of the American Arbitration
         Association then in effect, except to the extent that such rules are
         inconsistent with the provisions set forth herein. If VarsityBooks
         initiates arbitration, the arbitration proceedings will be held in
         Fairfax County, Virginia and if Sallie Mae initiates arbitration, the
         arbitration proceedings will be held in the District of Columbia. The
         arbitration

                                       11
<PAGE>   12

         will be held in the District of Columbia. The arbitration will be held
         before a single arbitrator. The Federal Rules of Evidence will apply in
         toto. In no event will the arbitrator have the authority to make any
         award that provides for punitive or exemplary damages. Any decision
         rendered by the arbitrator will be binding, final and conclusive upon
         both parties, and a judgment thereon may be entered in, and enforced
         by, any court having jurisdiction over the party against which an award
         is entered or the location of such party's assets and the parties
         hereby irrevocably waive any objections to the jurisdiction of such
         court based on any ground, including without limitation, improper venue
         or forum nor conveniens. The prevailing party in any claim action,
         arbitration or other proceeding arising under or in connection with the
         implementation of enforcement of this Agreement will be entitled to
         recover from the other party all attorneys' fees incurred in connection
         therewith.

         Nothing in this section shall be deemed to prohibit or restrict either
         party from seeking injunctive relief or other interim or provisional
         relief pending resolution of the dispute through such voluntary dispute
         resolution procedures set forth herein.

15.      ENTIRE AGREEMENT; MODIFICATION

         This Agreement (including any and all exhibits attached hereto)
         constitutes the sole, final and entire agreement of the parties and
         supersedes and terminates all previous agreements, oral or written,
         between the parties with respect to the subject matter hereof. All
         amendments or modifications to this Agreement must be in writing and
         signed by an officer of each party.

16.      ASSIGNMENT

         Neither party may assign, delegate or otherwise transfer this Agreement
         or any rights or obligations arising under or in connection with this
         Agreement without the prior written consent of the other party, which
         consent will not be unreasonably withheld or delayed; provided,
         however, that consent shall not be required (i) in connection with any
         assignment by Sallie Mae to an Affiliate, or (ii) in connection with
         any assignment by VarsityBooks to either CollegeOps LLC, a Delaware
         limited liability company or to CollegeImpact Inc., a Delaware
         corporation, both wholly-owned subsidiaries of VarsityBooks. Unless
         otherwise provided in a writing signed by VarsityBooks and Sallie Mae,
         any such assignment to CollegeOps LLC or CollegeImpact Inc. shall not
         relieve VarsityBooks of any of its obligations hereunder. This
         Agreement will be binding upon the parties' respective successors and
         permitted assigns.

17.      CUMULATIVE REMEDIES

         Each party's remedies set forth in this Agreement will be cumulative
         and not exclusive and will be available in addition to all other
         remedies available by law or equity, except as otherwise expressly
         provided in this Agreement.

18.      FORCE MAJEURE

         Neither party will be deemed in default of this Agreement to the extent
         that performance of its obligations, or attempts to cure any breach,
         are delayed or prevented by reason of any act of God or other force
         majeure; provided that, such party immediately gives the other party
         written notice thereof and undertakes commercially reasonable efforts
         to circumvent the cause of the delay or minimize the extent of the
         delay. In any such event, the time for performance or cure will be

                                       12
<PAGE>   13
         extended for a period equal to the duration of the delay, not to exceed
         four (4) weeks. If the notifying party does not resume performance of
         such obligations or cure such breach before the end of such four (4)
         week period, the other party will be entitled to terminate this
         Agreement immediately without any obligation or liability to the
         delayed party for doing so.

19.      COMPLIANCE WITH LAWS

         (a)      In implementing this Agreement, each party will comply with
                  all applicable laws and regulations and maintain in good
                  standing all required registrations, licenses and other
                  authorizations.

         (b)      SEC Filings. In connection with any registration of its
                  securities under the Securities Act of 1933, as amended, or
                  any public disclosure under the Securities Exchange Act of
                  1934, as amended, VarsityBooks shall (i) make timely written
                  objection to the public disclosure of information contained in
                  the Agreement that references Sallie Mae's * (the
                  "Sallie Mae Confidential Information") by following applicable
                  procedures, (ii) follow the procedures contained in 17 C.F.R.
                  Sec. 230.406, with respect to the Sallie Mae Confidential
                  Information, (iii) provide Sallie Mae with an advance copy of
                  and reasonable opportunity, which at a minimum shall be one
                  day, to review and comment on VarsityBooks's confidential
                  treatment request and provide a copy of the relevant portion
                  of any response received from the SEC regarding such request.

20.      INDEPENDENT CONTRACTORS.

         The Parties to this Agreement are independent contractors. Neither
         Party is an agent, representative or employee of the other Party.
         Neither Party will have any right, power or authority to enter into any
         agreement for or on behalf of, or incur any obligation or liability of,
         or to otherwise bind, the other Party. This Agreement will not be
         interpreted or construed to create an association agency, joint venture
         or partnership between the Parties or to impose any liability
         attributable to such a relationship upon either party.

21.      HEADINGS.

         The captions and headings used in this Agreement are inserted for
         convenience only and will not affect the meaning or interpretation of
         this Agreement.

22.      COUNTERPARTS.

         This Agreement may be executed in counterparts, each of which will be
         deemed an original and all of which together will constitute one and
         the same instrument.

                                       13
<PAGE>   14

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

SALLIE MAE, INC.                            VARSITYBOOKS.COM INC.

/s/ SALLIE MAE, INC.                        /s/ VARSITYBOOKS.COM INC.
-------------------------------             -----------------------------------
Signature                                   Signature

-------------------------------             -----------------------------------
Name                                        Name

-------------------------------             -----------------------------------
Title                                       Title

-------------------------------             -----------------------------------
Date                                        Date

                                       14
<PAGE>   15

                                    EXHIBIT A

                                     PAYMENT

         Sallie Mae agrees to pay to VarsityBooks an aggregate fee equal to TWO
MILLION DOLLARS AND NO CENTS ($2,000,000.00), payable in twenty four (24)
monthly installments of EIGHTY THREE THOUSAND THREE HUNDRED AND THIRTY THREE
DOLLARS AND THIRTY THREE CENTS ($83,333.33) beginning on February 29, 2000.
Payments must be made no later than 10 days after the last business day of each
month. Late payments will bear interest at the rate of one-and-one-half percent
(1.5%) per month or the highest monthly rate permitted by applicable law,
whichever is lower. VarsityBooks will also be entitled to recover its reasonable
collection costs, including attorneys' charges.

                                   Exhibit A-1
<PAGE>   16

                                    EXHIBIT B

                                SALLIE MAE MARKS

1.       U.S. FEDERALLY REGISTERED TRADEMARKS AND SERVICE MARKS

                See page B-2 below.

2.       COMMON LAW TRADEMARKS AND SERVICE MARKS - U.S. APPLICATIONS PENDING

                NONE

3.       COMMON LAW TRADEMARKS AND SERVICE MARKS

                NONE

4.       OTHER SALLIE MAE CONTENT TO BE PROVIDED BY SALLIE MAE

                NONE

                                  Exhibit B-1
<PAGE>   17
                      [EDUCATION LEADS US. SALLIEMAE LOGO]

                                  Exhibit B-2
<PAGE>   18

                                    EXHIBIT C

                                    RATE CARD
                      (IN EFFECT JANUARY THROUGH JUNE 2000)

<TABLE>
<CAPTION>

PRODUCT                        COST                         SALLIE MAE              Rate with
                                                            DISCOUNT                Discount
                                                                                    Applied
------------------------------ ---------------------------- ----------------------- -------------------------
<S>                            <C>                          <C>                     <C>
SOLE SPONSORSHIP OF            SEE EXHIBIT D                SEE EXHIBIT D           SEE EXHIBIT D
VARSITYSCHOLARS VERTICAL (1
YEAR).  *SEE EXHIBIT D FOR
DETAILS.
------------------------------ ---------------------------- ----------------------- -------------------------
Online banner ads              *                             *                       *
------------------------------ ---------------------------- ----------------------- -------------------------
Fixed Position on              *                             *                       *
Confirmation and Landing
Pages (thru June)
------------------------------ ---------------------------- ----------------------- -------------------------
Copy in e-mail confirmation    *                             *                       *
----------------------------- ---------------------------- ----------------------- -------------------------
Copy in e-mail                 *                             *                       *
acknowledgement
------------------------------ ---------------------------- ----------------------- -------------------------
Premier Sponsorship of         *                             *                       *
VarsityVentures (1 year)
------------------------------ ---------------------------- ----------------------- -------------------------
Newsletter sponsorship         *                             *                       *
------------------------------ ---------------------------- ----------------------- -------------------------
Partnership Newsletter         *                             *                       *
sponsorship
------------------------------ ---------------------------- ----------------------- -------------------------
Rep Newsletter sponsorship     *                             *                       *
------------------------------ ---------------------------- ----------------------- -------------------------
Campus Survival Kit            *                             *                       *
------------------------------ ---------------------------- ----------------------- -------------------------
Campus Goodie Bag              *                             *                       *
------------------------------ ---------------------------- ----------------------- -------------------------
Premier Sponsorship of         *                                                     *
Collegeimpact.com Site (thru
June)
------------------------------ ---------------------------- ----------------------- -------------------------
Sponsorship of Rep             *                              --                      *
Conference (per conference)
------------------------------ ---------------------------- ----------------------- -------------------------
Campus Rep Program             *                              --                      *
------------------------------ ---------------------------- ----------------------- -------------------------
</TABLE>

                                  Exhibit C-1
<PAGE>   19

                                    EXHIBIT D

                   SOLE SPONSORSHIP OF VARSITYSCHOLARS PROGRAM

     Term:        February 1, 2000 - January 31, 2001

     Cost:        $1 Million

     Deliverables:

     Sole Sponsorship: Sallie Mae will be the sole sponsor of the
     VarsityScholars Program under which VarsityBooks.com will provide
     approximately $475,000 in merit-based scholarships to high school seniors,
     college and graduate students over the course of the year. Sallie Mae will
     receive premier branding on Program materials including the VarsityScholars
     section of the VarsityBooks.com web site, promotional materials describing
     and marketing the Program and in the Program's press releases and events as
     described below:

               o    Fixed image on VARSITYBOOKS homepage

               o    Fixed position on the Scholarships landing page: an HTML
                    Sallie Mae image that will link to the Sallie Mae branded
                    splash page (described below). This image will highlight
                    Sallie Mae's sponsorship of the Program. (see mock-up
                    attached)

               o    Fixed position on 1st Page of VarsityScholars section: a
                    permanent html Sallie Mae image that will link to the Sallie
                    Mae branded splash page. This image will highlight Sallie
                    Mae's sponsorship of the Program (see mock-up attached).

               o    Fixed, above fold banner on all subsequent VarsityScholars
                    pages: permanent image and text highlighting relevant
                    message about Sallie Mae which will be featured in
                    top-of-the-page banner space on all pages of the
                    VarsityScholars section (see mock-up attached).

               o    Sallie Mae branded splash page developed by VARSITYBOOKS: an
                    html page developed by VarsityBooks.com for Sallie Mae which
                    will feature mutually-agreed upon content highlighting
                    Sallie Mae's sponsorship of the Program and other relevant
                    Sallie Mae content. The splash page may be updated at
                    regular intervals on a mutually-agreed upon schedule.

               o    Sponsorship of e-mail introducing program to entire
                    VARSITYBOOKS database: Sallie Mae will receive prominent
                    branding and mention in the e-mail to be sent to the entire
                    VarsityBooks.com database of high school and college
                    students (circulation: 200,000+ students) introducing the
                    Program and inviting applications.

               o    Sponsorship of e-mail thank you notes for each scholarship
                    application: Sallie Mae will receive prominent branding and
                    mention in the e-mail "thank you" sent to every person who
                    submits an application to the Program.

               o    Sponsorship and SM content/links in 6 e-mail newsletters to
                    entire VARSITYBOOKS database: Sallie Mae will provide
                    content for 6 VarsityBooks.com e-mail newsletters, one of
                    which will promote the Sallie Mae*, in which Sallie Mae may

                                      D-1
<PAGE>   20
                    highlight its sponsorship of the Program and other relevant
                    "pay for college" content (circulation: 200,000+ students).
                    Such content will be provided by Sallie Mae and approved by
                    VarsityBooks, such approval not to be unreasonably withheld.

               o    Presence in all VarsityScholars press releases/events and
                    estimated $2 million+ of promotional activities/events
                    surrounding the Program: Sallie Mae will receive branding
                    and mention in all press releases regarding the Program.
                    VarsityBooks.com intends to issue monthly releases heralding
                    the winners of the scholarships and will use its internal
                    and outside PR resources to promote and place the releases.
                    VarsityBooks.com will also engage in additional
                    publicity-generating activities which may include press
                    conferences and other PR events to highlight the winners of
                    the scholarships and the Program; Sallie Mae will receive
                    branding and mention in all such events. In addition, Sallie
                    Mae will receive placement in the estimated $2 million
                    dollars worth of promotional activities VarsityBooks.com
                    intends to undertake to market the Program over the year
                    possibly including: advertising in over 1500 college
                    newspapers, advertising in other national media outlets and
                    promotional materials sent to U.S. high schools.

                                      D-2<PAGE>   1
* Certain sections omitted and filed separately with the Commission.

                                                              EXHIBIT 10.15

                           PRODUCT PROMOTION AGREEMENT

     This PRODUCT PROMOTION AGREEMENT (this "AGREEMENT") is entered into as of
the 3rd day of February, 2000 (the "EFFECTIVE DATE") by and between
VARSITYBOOKS.COM INC., a Delaware corporation with offices at 2020 K Street, NW
6th Floor, Washington, D.C. 20006 ("VARSITYBOOKS") and SALLIE MAE, INC. a
Delaware corporation with offices at 11600 Sallie Mae Drive, Reston, V.A. 20193
("SALLIE MAE").

     WHEREAS, Sallie Mae provides educational loan products, educational
enterprise-related products (the "SALLIE MAE PRODUCTS") and operates a Web site
located at the URL http:///www.salliemae.com (the "SALLIE MAE WEB SITE") that
contains within it, among other things, an internet mall that is presently under
development (the "SALLIE MAE MALL") and would like to expand its exposure by
having access to the users of the VarsityBooks Web Site (as defined below); and

     WHEREAS, VarsityBooks maintains a Web site located at the URL
http://www.varsitybooks.com (the "VARSITYBOOKS WEB SITE") through which it sells
and distributes college textbooks, general interest books, entertainment
products and other products (the "VARSITYBOOKS PRODUCTS") and would like to
expand its customer base by having access to the existing customers of Sallie
Mae and users of the Sallie Mae Web Site; and

     WHEREAS, VarsityBooks and Sallie Mae would like to define an arrangement
whereby Sallie Mae will market the VarsityBooks Products to existing Sallie Mae
customers and other users of the Sallie Mae Web Site and will create customers
for VarsityBooks.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

1.   DEFINITIONS

     Capitalized terms used in this Agreement shall have the meaning set forth
     below or elsewhere herein. All definitions will apply both to their
     singular or plural forms, as the context may require. "DAYS" means calendar
     days, unless otherwise specified. All references to "SECTION" are to
     Sections of this Agreement, unless otherwise specified. "AGREEMENT"
     collectively means this Agreement and any and all exhibits hereto (which
     are hereby incorporated into this Agreement), and all valid amendments to
     this Agreement. Headings are intended only for reference purposes.

     (A)  "AFFILIATE" means, with respect to a party to this Agreement, those
          entities controlled by, controlling, or under common control with such
          party. For the purposes of this definition, "CONTROL" (and its
          derivatives) will mean, with respect to such an entity, having the
          legal, beneficial or equitable ownership, directly or indirectly, of
          fifty percent (50%) or more of the capital stock (or other ownership
          interest, if the entity is not a corporation) of such entity
          ordinarily having voting rights, or otherwise having a right to
          appoint at least half of the directors (or analogous officers) of such
          entity.

<PAGE>   2
     (B)  "COLLEGE TARGETED RETAILER" means any entity whose efforts in
           marketing retail products are primarily directed towards college
           students, including, without limitation, those entities listed on
           Exhibit E hereto, as such exhibit may be amended from time to time,
           with the consent of Sallie Mae which consent shall not be
           unreasonably withheld, delayed or conditioned. In the event a College
           Targeted Retailer, other than VarsityBooks and those College Targeted
           Retailers which are listed on Exhibit E hereto, as may be amended,
           presents an opportunity to Sallie Mae with respect to a retail
           product that VarsityBooks does not offer (the "NEW PRODUCT"), Sallie
           Mae will provide VarsityBooks with written notice (the "INITIAL
           NOTICE") stating its desire to enter into an agreement with such
           College Targeted Retailer specifying the New Product. Upon receipt of
           the Initial Notice from Sallie Mae, VarsityBooks shall have sixty
           days (60) days to provide Sallie Mae with written notice (the
           "RESPONSE") indicating that it intends to work in good faith to
           provide such New Product. Upon delivery of the Response, VarsityBooks
           shall have sixty days (60) days to work in good faith to enter into a
           term sheet with a provider of the New Product which will set forth
           terms under which VarsityBooks will become a provider of the New
           Product. Failure by VarsityBooks to deliver notice within sixty (60)
           days of receipt of the Initial Notice or to enter into a term sheet
           to enable VarsityBooks to provide the New Products within sixty (60)
           days of its delivery of the Response shall free Sallie Mae to enter
           into a product promotion or joint marketing agreement with such
           College Targeted Retailer only to the extent such agreement covers
           the New Product which was the subject of the Initial Notice.

     (C)  "CORPORATE TRANSACTION" means (A) any consolidation or merger of the
          Corporation with or into any other corporation or other entity, other
          than any merger or consolidation resulting in the holders of the
          capital stock of the Corporation entitled to vote for the election of
          directors holding a majority of the capital stock of the surviving or
          resulting corporation or other entity entitled to vote for the
          election of directors, (B) any person or entity (including any
          affiliates thereof) becoming the holder of a majority of the capital
          stock of the Corporation entitled to vote for the election of
          directors, or (C) any sale or other disposition by the Corporation of
          all or substantially all of its assets or capital stock.

     (D)  "EQUITY OFFERING" means an equity offering resulting in net proceeds
          to the Corporation in excess of ten million dollars ($10,000,000)
          which occurs prior to the IPO Date.

     (E)  "INTELLECTUAL PROPERTY RIGHTS" means any and all worldwide rights,
          title and interest in intellectual property (including without
          limitation, all patents, patent registrations, copyrights, moral
          rights, trademarks, trade names, service marks, service names, trade
          secrets, know-how or other similar rights arising or enforceable under
          U.S. law, foreign law, or international treaty regime).

     (F)  "IPO DATE" means the date on which the Corporation closes the initial
          public offering of its Common Stock.

     (G)  "LAUREATE LOAN PRODUCT" means Sallie Mae's internet-based student loan
          information management and delivery system.

                                       2
<PAGE>   3

     (H)  "PARTNERSHIP PROGRAM" means the program pursuant to which VarsityBooks
          enters into agreements to market and sell the VarsityBooks Products to
          students at the Partnership Schools.

     (I)  "PARTNERSHIP SCHOOLS" means secondary schools, distance learning
          schools, community colleges, two-four year colleges and other
          institutions which have entered into memoranda of understanding with
          VarsityBooks pursuant to which VarsityBooks becomes the exclusive
          online retailer of new textbooks for such schools.

     (J)  "REFERRAL FEE" has the meaning set forth in the chart on Exhibit A.

     (K)  "SALLIE MAE CONTENT" means the Sallie Mae Marks and the sounds,
          pictures, text, graphics, templates, copyrightable materials and any
          other items or information set forth in Exhibit C that are owned or
          licensed by Sallie Mae and provided by Sallie Mae to VarsityBooks for
          use in accordance with this Agreement.

     (L)  "SALLIE MAE MARKS" means the names, trademarks, service marks, trade
          names, service names, logos, symbols, and other product or service
          designations set forth in Exhibit C and all Sallie Mae domain names
          and hyperlink icons, including without limitation, the domain name(s)
          and hyperlink icon(s) used to locate the Sallie Mae Web Site.

     (M)  "SALLIE MAE SOLUTIONS" means a division of Sallie Mae that provides
          business processing, technical and software solutions to higher
          education.

     (N)  "SALLIE MAE TOP TIER TITLES" means a list of financial aid,
          scholarship, career service, and other titles, as selected by Sallie
          Mae, which will appear on the Sallie Mae Web Site and which
          VarsityBooks will use its best efforts to have stocked by Baker &
          Taylor.

     (O)  "SALLIE MAE WEB SITE(S)" means the internet web site(s) owned,
          managed, or controlled by Sallie Mae and its Affiliates, including,
          without limitation, all information, materials, features, products,
          services, advertisements, promotions, links, pointers, technology and
          software, in any format or medium, made available or embodied therein
          (except for any VarsityBooks Marks).

     (P)  "SPLASH PAGE" means the first co-branded page to which all users
          arrive when linking from a VarsityBooks hyperlink on any Sallie Mae
          e-mail or on the Sallie Mae Web Site or Sallie Mae Mall site,
          provided, however that users linking from the Sallie Mae Top Tier
          Title list will link to mutually agreeable pages on the VarsityBooks
          Web Site.

     (Q)  "TERM" has the meaning given in Section 5(A).

     (R)  "VARSITYBOOKS MARKS" means the names, trademarks, service marks, trade
          names, service names, logos, symbols, and other product or service
          designations set forth in Exhibit D and all VarsityBooks domain names
          and hyperlink icons.

     (S)  *

                                       3
<PAGE>   4
2.   SALLIE MAE OBLIGATIONS

     (A)  Access to Sallie Mae Customer Base

          (1)  Hyperlinks.

               (i)   Sallie Mae will create and maintain hyperlinks from
                     mutually agreeable locations on the Sallie Mae Web Site(s),
                     including without limitation, the Sallie Mae Mall and the
                     Sallie Mae Top Tier Titles, directly to mutually agreeable
                     locations on the VarsityBooks Web Site, using the icon(s)
                     and textual links provided by VarsityBooks.

               (ii)  Sallie Mae will create and maintain a hyperlink to the
                     Splash Page on the Sallie Mae Web Site.

               (iii) Sallie Mae will work with VarsityBooks to determine
                     mutually agreeable strategically important locations for
                     the hyperlinks, provided, however, that Sallie Mae will
                     retain sole control over the ultimate location of any
                     hyperlinks to VarsityBooks which will be placed on its Web
                     site.

               (iv)  VarsityBooks will provide Sallie Mae with guidelines and
                     graphical artwork (including, without limitation, the
                     VarsityBooks Marks, banners, logos buttons and designs) to
                     use in linking to the VarsityBooks Web Site. Approved
                     guidelines and artwork are available online in the
                     Affiliate member area of the VarsityBooks Web Site, and are
                     subject to change from time to time by VarsityBooks. Sallie
                     Mae agrees to use the artwork only in accordance with
                     VarsityBooks' then-current artwork usage and trademark
                     usage guidelines provided in advance to Sallie Mae. The
                     VarsityBooks artwork and trademark usage guidelines as of
                     the date hereof are attached hereto as Exhibit F.

          (2)  Sallie Mae will, in good faith, promote the VarsityBooks products
               to its existing customers (its "CUSTOMER BASE") by including
               mutually agreed upon VarsityBooks literature, inserts,
               promotions, offers, and other marketing material (the "MARKETING
               MATERIAL") and by creating and including a mutually agreed upon
               coded coupon which VarsityBooks will make available to Sallie Mae
               in electronic or physical form, for the VarsityBooks Products
               (the "COUPON") in mailings sent to its Customer Base, provided,
               however, that VarsityBooks shall have sole discretion over the
               value of any and all Coupons created.

          (3)  Notwithstanding the foregoing, Sallie Mae shall have sole control
               over the mailings and emails sent to its customers, including but
               not limited to, the

                                       4
<PAGE>   5

          determination of which of its customers will receive such
          communications and the names and addresses of the recipients.

     (B)  Use of Sallie Mae Sales Force

          (1)  Sallie Mae will make available to VarsityBooks its sales leaders,
               as determined solely by Sallie Mae (the "Leaders"), for training
               on the VarsityBooks Partnership Program so that such Leaders can
               in turn train Sallie Mae's sales force, including without
               limitation those sales representatives responsible for selling
               Sallie Mae's K-12, Sallie Mae Higher Education and Sallie Mae
               Solutions Programs (the "SALLIE MAE SALES FORCE"). This training
               shall take place on a mutually agreeable schedule, but, in any
               event, not later than February 20, 2000 and for not less than
               four hours. In the event Sallie Mae hires additional Leaders
               after February 20, 2000, VarsityBooks agrees to arrange a
               mutually agreeable schedule to train the new Leaders.

          (2)  Sallie Mae will arrange to provide VarsityBooks with face-to-face
               or telephonic meetings ("QUALITY REFERRALS") with Key
               Decisionmakers (as defined below) at Target Institutions (as
               defined below) which Key Decisionmakers have expressed a good
               faith interest in becoming members of the VarsityBooks
               Partnership Program. As used in this Agreement, the term Key
               Decisionmakers shall mean the business officer, chief financial
               officer, key influencer or decision maker of a Target Institution
               who has the authority to contractually bind the Target
               Institution or can directly influence such decision, and the term
               Target Institutions shall mean those institutions listed on
               Exhibit G hereto and any other institutions approved in
               writing by VarsityBooks. Sallie Mae and VarsityBooks shall
               jointly develop a reporting mechanism to track Quality Referrals,
               and such mechanism shall be subject to the audit provisions set
               forth in Section 3(B)(4) below.

3.   VARSITYBOOKS OBLIGATIONS

     (A)  Co-branded Page.

          (1)  VarsityBooks will host and maintain, at its expense, a co-branded
               Splash Page for the exclusive use of Sallie Mae users. The Splash
               Page shall be the initial destination of Sallie Mae users linking
               to the VarsityBooks Web Site from Authorized Links (as defined
               below) on the Sallie Mae Web Site.

          (2)  VarsityBooks will work in good faith with Sallie Mae on the
               content of the Splash Page but will retain sole control of such
               contents and of the value of the Coupon.

     (B)  Tracking, Referral Fees and Audit Rights.

                                       5
<PAGE>   6

          (1)  To permit accurate tracking, reporting, and Referral Fee accrual,
               VarsityBooks or its agent will provide Sallie Mae with authorized
               "tagged" link formats to be used in all links between the Sallie
               Mae Web Site and the VarsityBooks Web Site. Sallie Mae will
               ensure that each of the links between the Sallie Mae Web Site and
               the VarsityBooks Web Site properly utilizes such link formats.
               Links to the VarsityBooks Web Site placed on the Sallie Mae Web
               Site pursuant to this Agreement which properly utilize such
               authorized link formats are referred to as "AUTHORIZED LINKS."

          (2)  VarsityBooks will provide Sallie Mae with a password and with the
               ability to enter a password-protected VarsityBooks Web Site to
               access sales activity generated by Authorized Links from the
               Sallie Mae Web Site or e-mail to Sallie Mae existing and
               prospective customers.

          (3)  If a product that generated a Referral Fee is returned by the
               customer, VarsityBooks will deduct the corresponding Referral Fee
               from the next Referral Fee payment it is scheduled to make to
               Sallie Mae. If there is no subsequent payment, VarsityBooks will
               send Sallie Mae an invoice for the returned referral fee, and
               Sallie Mae will pay any and all such invoiced return referral
               fees within ten (10) days of the receipt of such invoice.

          (4)  VarsityBooks will maintain accurate records with respect to
               payments due under this Agreement and methodology used to
               calculate payment due, including tracking of Quality Referrals.
               Sallie Mae may, upon no less than thirty (30) days prior written
               notice to VarsityBooks, cause an independent Certified Public
               Accountant, mutually agreeable to both parties, to inspect all
               relevant records of VarsityBooks upon which the calculation of
               such payments are based during VarsityBooks' normal business
               hours. The fees charged by such Certified Public Accountant in
               connection with the inspection will be paid by Sallie Mae, unless
               the payments made to Sallie Mae are determined to have been less
               than ninety-five percent (95%) of the payments actually owed to
               Sallie Mae, in which case VarsityBooks will be responsible for
               the payment of the reasonable fees for such inspection. In
               addition, VarsityBooks shall immediately remit payment to Sallie
               Mae for the full amount of any disclosed shortfalls. The audit
               rights set forth herein shall continue for one (1) year following
               the termination of this Agreement for any reason. No such audit
               may occur more than once a year during the term of this
               Agreement.

          (5)  Sallie Mae will earn Referral Fees (as set forth on Exhibit A)
               with respect to VarsityBooks Products ordered by users who access
               the VarsityBooks Web Site directly through Authorized Links or
               who enter the appropriate Coupon code at check-out ("QUALIFYING
               PRODUCTS"). For a sale of a Qualifying Product to be eligible to
               earn a Referral Fee, the customer must

                                       6
<PAGE>   7

               (i) follow an Authorized Link from the Sallie Mae Web Site or an
               e-mail received from Sallie Mae to the VarsityBooks Web Site or
               must enter the appropriate Coupon code at check out, (ii) select
               and purchase the Qualifying Product using the VarsityBooks
               automated ordering system, (iii) accept delivery of the
               Qualifying Product at the shipping destination, and (iv) remit to
               VarsityBooks full payment for the Qualifying Product order by
               cash, check money order, debit card, electronic payment or credit
               card in readily available U.S. funds. In no event shall
               VarsityBooks be liable to Sallie Mae with respect to any failure
               by Sallie Mae users to use Authorized Links, or the failure of
               its users to enter the appropriate Coupon code, regardless of the
               extent to which such failure may result in any reduction of
               amounts that would otherwise be paid to Sallie Mae pursuant to
               this Agreement

          (6)  VarsityBooks will process Qualifying Product orders and will be
               solely responsible for all aspects of order processing and
               fulfillment and customer service. VarsityBooks will track sales
               made to customers who purchase Qualifying Products, and will make
               available to Sallie Mae reports summarizing this sales activity.
               The form, content, and frequency of the reports may vary from
               time to time, subject to legal limits on the gathering and
               sharing of customer information, as mutually agreed by both
               parties to this Agreement.

          (7)  VarsityBooks will pay any and all Referral Fees earned by Sallie
               Mae in accordance with the schedule set forth on Exhibit A.

(C)       Identification as an Affiliate.

          VarsityBooks will make available to Sallie Mae a graphic image that
          identifies the Sallie Mae Web Site as an Affiliate (the "Affiliate
          Designation") and hereby authorizes Sallie Mae to display the
          Affiliate Designation or the phrase "VarsityBooks.com Affiliate" on
          the Sallie Mae Web Site or in correspondence to its Customer Base or
          to prospective Sallie Mae customers. VarsityBooks shall retain the
          right to modify the Affiliate Designation at any time, provided,
          however, that VarsityBooks must provide Sallie Mae with written notice
          of such modification. Upon receipt of such notice, Sallie Mae will
          immediately modify its use of the Affiliate Designation to incorporate
          the revisions.

(D)       Marketing and Sales Collateral

          VarsityBooks will, at its sole expense, make available to the Sallie
          Mae Sales Force an adequate supply of marketing and sales collateral
          to be used in marketing VarsityBooks products and programs.

(E)       Sallie Mae Top Tier Titles

          VarsityBooks will work in good faith with Sallie Mae and Baker &
     Taylor, Inc. to stock and feature on the VarsityBooks Web Site the Sallie
     Mae Top Tier Titles.

                                       7
<PAGE>   8

4.   MUTUAL OBLIGATIONS

     (A)  Technical Integration of VarsityBooks Web Site.

          Sallie Mae and VarsityBooks will work in good faith to explore
          opportunities for integrating the VarsityBooks Web Site with Sallie
          Mae Solutions Products.

     (B)  Integration and Co-branding.

          (1)  Sallie Mae and VarsityBooks will work together in good faith to
               develop co-branded pages (the "INTEGRATED SCHOLARSHIP PAGES")
               within the VarsityBooks Web Site, and specifically, within those
               pages on the VarsityBooks Web Site which are dedicated to the
               VarsityBooks scholarship and financial aid programs (the
               "VARSITYBOOKS SCHOLARSHIP VERTICAL"), which integrate the Sallie
               Mae CASHE and the * module.

          (2)  LINKS. As part of the Integrated Scholarship Pages, the parties
               agree that they will provide one or more links to and from the
               VarsityBooks Web Site and the Sallie Mae CASHE and * module.
               Among the links to be provided hereunder, Sallie Mae will
               provide, without limitation, a link or links to the Sallie Mae
               CASHE Scholarship Profile Form and the Sallie Mae * Paying,
               Deciding and Financing tabs.

          (3)  PROMOTION.

               (i)   For all content hosted and served by Sallie Mae in the *
                     module, Sallie Mae shall prominently display the Varsity
                     Books Marks. Such marks shall contain navigation features
                     linking site users back to the VarsityBooks Web Site.

               (ii)  All links and content on the VarsityBooks Web Site related
                     to the * module and Sallie Mae CASHE web site shall
                     prominently display the Sallie Mae Marks.

               (iii) Each party must approve or reject any promotional
                     activities or materials that reference the other party's
                     Mark or other similar information.

          (4)  SCHOLARSHIP INCLUSION. The two parties will work in good faith to
               include VarsityBooks sponsored scholarships in the Sallie Mae
               CASHE database.

          (5)  EDITORIAL RIGHTS AND HOSTING. Sallie Mae will provide content for
               the Integrated Scholarship Pages, and Sallie Mae and VarsityBooks
               will have joint creative, artistic and editorial responsibility
               for the Integrated

                                       8
<PAGE>   9

                    Scholarship Pages. VarsityBooks will host and maintain the
                    Integrated Scholarship Pages at its own expense.

               (6)  REPORTING. VarsityBooks shall provide Sallie Mae with
                    monthly reports, on the tenth business day of each month,
                    which include (a) the number of unique VarsityBooks users
                    that accessed the VarsityBooks home page, (b) the number
                    unique VarsityBooks users that access the VarsityBooks
                    Scholarship Vertical.

               (7)  LAUNCH DATE. Provided the parties reach an agreement on the
                    Integrated Scholarship Pages, the Integrated Scholarship
                    Pages will be created on such date as may be mutually agreed
                    upon by the parties, but in no event later than July 1,
                    2000.

               (8)  USER DATA. User data compiled and collected through the
                    CASHE system on the Integrated Scholarship Pages will be
                    co-owned by both parties provided that neither party will
                    sell, share or transfer any such data to any third party.
                    The parties will work in good faith to create a system to
                    compile, collect and track the usage of such user data.

     5.   LICENSES

          (A)  During the term of this Agreement VarsityBooks grants to Sallie
               Mae a non-exclusive, worldwide, royalty-free, fully paid-up,
               non-transferable license to use the VarsityBooks Marks and the
               Affiliate Designation solely as contemplated by this Agreement
               on, or in developing, supporting and maintaining, the Sallie Mae
               Web Site, and specifically without limitation, the Laureate Loan,
               Exeter Product and Solutions Networks, in the ordinary course of
               business, including without limitation, as applicable, the rights
               to use, copy, display, distribute, and create and use derivative
               works based on the VarsityBooks Marks. Except with the written
               authorization of VarsityBooks, VarsityBooks Marks shall not be
               displayed on any web site other than the Sallie Mae Web Site. Any
               VarsityBooks content incorporated into derivative works so
               created shall be the property of VarsityBooks. Sallie Mae's
               exercise of this license with respect to the VarsityBooks Marks
               is subject to VarsityBooks' Trademark Guidelines located on the
               legal page of the VarsityBooks Web Site and attached hereto as
               Exhibit F. Notwithstanding the foregoing,the form of any use of
               any VarsityBooks Mark which is viewable by the public or any user
               of the Sallie Mae Web Site must be approved by VarsityBooks in
               advance either in writing or through the procedures set forth in
               this Agreement. Any other use of any VarsityBooks Marks is
               prohibited unless VarsityBooks gives its prior written consent to
               each such use. Upon the expiration or termination of this
               Agreement, Sallie Mae will cease using the VarsityBooks Marks
               except as VarsityBooks agrees in writing.

          (B)  During the term of this Agreement, Sallie Mae grants to
               VarsityBooks a non-exclusive, worldwide, royalty-free, fully
               paid-up, non-transferable license to use the Sallie Mae Marks
               solely as contemplated by this Agreement on, or in developing,
               supporting and maintaining, the VarsityBooks Web Site, and
               specifically without limitation, the Integrated Scholarship
               Pages, in the ordinary course of business, including without

                                       9
<PAGE>   10

               limitation, as applicable, the rights to use, copy, display,
               distribute, and create and use derivative works based on the
               Sallie Mae Marks. Except with the written authorization of Sallie
               Mae, Sallie Mae Marks shall not be displayed on any web site
               other than the VarsityBooks Web Site. Any Sallie Mae content
               incorporated into derivative works so created shall be the
               property of Sallie Mae. VarsityBooks' exercise of this license
               with respect to the Sallie Mae Marks is subject to Sallie Mae's
               Trademark Guidelines attached hereto as Exhibit H.
               Notwithstanding the foregoing, the form of any use of any Sallie
               Mae Mark which is viewable by the public or any user of the
               VarsityBooks Web Site must be approved by Sallie Mae in advance
               either in writing or through the procedures set forth in this
               Agreement. Any other use of any Sallie Mae Marks is prohibited
               unless Sallie Mae gives its prior written consent to each such
               use. Upon the expiration or termination of this Agreement,
               Sallie Mae will cease using the VarsityBooks Marks except as
               VarsityBooks agrees in writing.

     (C)       Each party agrees that in connection with each party's use of the
               other party's Marks it will display symbols and notices clearly
               and sufficiently indicating the trademark status and ownership of
               the other party's Marks in accordance with applicable trademark
               law and practice.

     (D)       VarsityBooks will not adopt or use in any manner any name, mark,
               symbol, logo, icon, design, copyright or company, product or
               service name or designation not currently in use and which is
               confusingly similar to any Sallie Mae Marks, or which constitutes
               a translation thereof, without Sallie Mae's prior written
               consent. VarsityBooks will not register anywhere in the world,
               directly or indirectly, any Sallie Mae Marks or any other name,
               mark, symbol, logo, icon, design, copyright or company, product
               or service name or designation not currently in use and which is
               confusingly similar thereto or which constitutes a translation
               thereof.

     (E)       Sallie Mae will not adopt or use in any manner any name, mark,
               symbol, logo, icon, design, copyright or company, product or
               service name or designation not currently in use and which is
               confusingly similar to any VarsityBooks Marks, or which
               constitutes a translation thereof, without VarsityBooks' prior
               written consent. Sallie Mae will not register anywhere in the
               world, directly or indirectly, any VarsityBooks Marks or any
               other name, mark, symbol, logo, icon, design, copyright or
               company, product or service name or designation not currently in
               use and which is confusingly similar thereto or which constitutes
               a translation thereof.

     (F)       Each party retains all rights, title and interest in and to its
               intellectual property except for those licenses and rights
               expressly granted by this Agreement.

     (G)       Each party acknowledges that its use of licensed materials in
               breach of the scope of the grant of license it is receiving under
               Section 5(A) or 5(B) above, as applicable, or its breach of
               Section 5(C) or 5(D) above, as applicable, will cause the other
               party irreparable injury for which monetary damages will not make
               the other party whole. Accordingly, in addition to all other
               available remedies and notwithstanding Section 16, the other
               party will be entitled to equitable or injunctive relief as and
               where it deems fit in the event of an actual, threatened or
               attempted breach by the first party of any such provision.

                                       10
<PAGE>   11

     (H)       Nothing in this Agreement shall be deemed to require (i)
               VarsityBooks or any of its Affiliates to offer or sell Sallie Mae
               Products directly or on behalf of any other person or engage in
               any other activity which would require licensing not currently
               possessed by VarsityBooks or such Affiliate, or (ii) Sallie Mae
               or any of its Affiliates to offer or sell VarsityBooks Products
               directly or on behalf of any other person or engage in any other
               activity which would require licensing not currently possessed by
               Sallie Mae or such Affiliate.

6.   TERM; TERMINATION

     (A)       The term of this Agreement will begin on the Effective Date and
               end two (2) years thereafter (the "Term"). Thereafter, this
               Agreement may be renewed upon mutual agreement of the parties.

     (B)       In addition to the parties' termination rights set forth
               elsewhere in this Agreement, either party may terminate this
               Agreement in the event of a Corporate Transaction prior to the
               earlier of (a) the IPO Date; or (b) an Equity Offering. Should
               either party terminate this Agreement pursuant to this clause
               6(B), all of the Sallie Mae Warrants granted hereunder will
               immediately cancel.

     (C)       In addition to the parties' termination rights set forth
               elsewhere in this Agreement, either party may terminate this
               Agreement:

               (1)  at any time during the Term, upon at least thirty (30) days'
                    prior written notice to the other party if such other party
                    materially breaches this Agreement or any of the
                    representations and warranties hereunder and fails to cure
                    such material breach within such thirty (30) days;

               (2)  immediately upon written notice to the other party, if such
                    other party: (a) ceases to conduct business in the normal
                    course; (b) makes an assignment for the benefit of
                    creditors; (c) is liquidated or otherwise dissolved; or (d)
                    becomes insolvent, is adjudicated bankrupt, or a receiver,
                    trustee or custodian is appointed for it.

     (D)       Upon the termination or expiration of this Agreement for any
               reason:

               (1)  each party will immediately cease holding itself out as
                    having any commercial relationship with the other party and
                    the licenses conferred in Section 4 will cease;

               (2)  each party will comply with the requirements of Section
                    15(F);

               (3)  VarsityBooks will pay all amounts properly due and payable
                    to Sallie Mae pursuant to Section 7(B) and 7(C), up until
                    the effective date of such termination or expiration
                    (prorated on a daily basis) provided, that Sallie Mae is
                    only eligible to earn Referral Fees on sales of Qualifying
                    Products occurring during the term, and Referral Fees earned
                    through the date of termination will remain payable only if
                    the related orders are not canceled

                                       11
<PAGE>   12

                    or returned, and payments based on performance due under the
                    schedule of Performance Obligations will be pro-rated
                    through the date of termination; and

               (4)  neither party will have any further liability or obligation
                    to the other party, except as otherwise expressly provided
                    in this Agreement (including without limitation Section 6(D)
                    below).

          (E)  Any provision of this Agreement that imposes or contemplates
               continuing obligations on a party will survive the expiration or
               termination of this Agreement for any reason.

7.        COSTS AND PAYMENT

          (A)  Unless otherwise expressly provided in this Agreement, each party
               will be responsible for all costs and expenses that it incurs in
               performing its obligations hereunder.

          (B)  VarsityBooks will pay Sallie Mae certain Referral Fees as set
               forth on Exhibit A hereto.

          (C)  In addition, should Sallie Mae meet the performance obligations
               set forth on Exhibit A (the "PERFORMANCE OBLIGATIONS")
               VarsityBooks will provide Sallie Mae with Warrants to purchase
               shares of its Common Stock, par value $0.0001, in the form set
               forth on Exhibit B (the "SALLIE MAE Warrants")in such amounts as
               set forth on Exhibit A in the column astride the respective
               Performance Obligation.

8.        REPRESENTATIONS AND WARRANTIES

          (A)  Each party represents that it has the full right and authority to
               enter into and to perform its obligations under this Agreement,
               and the execution and delivery of this Agreement by it, and the
               performance of its obligations hereunder, have been duly
               authorized by all requisite corporate actions on its part, and
               this Agreement has been duly executed and delivered by it.

          (B)  Each party warrants that:

               (1)  The execution or implementation of this Agreement by such
                    party, and the exercise or performance of any rights or
                    obligations hereunder, will not contravene any provision of
                    its organizational documents, or to its knowledge violate or
                    conflict with any agreement or binding obligation to which
                    it is a party.

               (2)  Except as otherwise expressly authorized by this Agreement,
                    such party will not take any action or make any statement,
                    representation, or warranty regarding the other party, its
                    products or services (including the products and services of
                    third parties which the other party promotes, markets,
                    resells or distributes) which is not previously authorized
                    in writing by the other party.

                                       12
<PAGE>   13

               (3)  all obligations owed to third parties with respect to the
                    activities contemplated to be undertaken by either party
                    pursuant to this Agreement are or will be fully satisfied by
                    such party, and the other party will have no obligations
                    with respect thereto;

               The sole and exclusive remedy of the other party, and the sole
               and exclusive liability and obligations of the warranting party,
               for breach of any of the warranties set forth in Section 8(A) or
               8(B) hereof will be as provided under Section 7(a) or 7(B) below,
               as applicable. Notwithstanding the foregoing, both parties shall
               have the right to seek injunctive relief for any breach under
               this Agreement.

     (C)

            Each party covenants that:

               (1)  it will comply with all applicable federal, state and local
                    laws in the performance of its obligations hereunder; and

               (2)  it will not distribute any unwanted or unsolicited bulk,
                    junk or spam e-mail in connection with this Agreement.

     (D)       VarsityBooks warrants to Sallie Mae that it will not knowingly
               allow either those pages of the VarsityBooks Web Site which
               reference Sallie Mae or which display any name or mark of Sallie
               Mae, or any VarsityBooks Marks used by Sallie Mae, nor the
               operation, display or use of any of the foregoing as contemplated
               by this Agreement, nor the content, goods and services offered
               through the VarsityBooks Web Site to (a) constitute, or contain
               material that would constitute, libel, defamation or slander; (b)
               constitute, or contain material that would constitute, an
               invasion of privacy or a violation of the rights to publicity of
               any third party; (c) infringe upon the Intellectual Property
               Rights of any third party; (d) violate any law, statute,
               ordinance or regulation or promote illegal activities; (e)
               constitute or contain or promote obscene materials; (f) promote
               violence; (g) promote discrimination based on race, sex,
               religion, nationality, disability, sexual orientation, or age;
               (h) constitute or contain content which is defamatory, trade
               libelous, unlawfully threatening or unlawfully harassing; (i)
               sell or otherwise market fraudulent materials; or (j) include
               "Sallie Mae" or variations or misspellings thereof in their
               domain names or in metatags or other tools designed to mislead
               users or search engines.

     (E)       Sallie Mae warrants to VarsityBooks that it will not knowingly
               allow either the Sallie Mae Web Site (or those pages of the
               Sallie Mae Web Site(s) which reference VarsityBooks or which
               display any name or mark of VarsityBooks), nor any Sallie Mae
               Content or Sallie Mae Marks used by VarsityBooks, nor the
               operation, display or use of any of the foregoing as contemplated
               by this Agreement nor the content, goods and services offered
               through the Sallie Mae Web Site, to: (a) constitute, or contain
               material that would constitute, libel, defamation or slander; (b)
               constitute, or contain material that would constitute, an
               invasion of privacy or a violation of the rights to publicity of
               any third party; (c) infringe upon the Intellectual Property
               Rights of any third party; (d) violate any law, statute,
               ordinance or regulation or promote illegal activities; (e)
               constitute or contain or promote obscene materials; (f) promote
               violence; (g) promote discrimination based on race, sex,
               religion, nationality, disability, sexual orientation, or

                                       13
<PAGE>   14

               age; (h) constitute or contain content which is defamatory, trade
               libelous, unlawfully threatening or unlawfully harassing; (i)
               sell or otherwise market fraudulent materials; or (j) include
               "VarsityBooks" or variations or misspellings thereof in their
               domain names or in metatags or other tools designed to mislead
               users or search engines

     (F)       Notwithstanding the foregoing, neither VarsityBooks nor Sallie
               Mae shall be liable for the content, goods, and/or services
               provided by or available through third party Web sites made
               available by hyperlinks on the Web sites of either VarsityBooks
               or Sallie Mae.

     (G)       EXCEPT FOR THE WARRANTIES IN THIS SECTION 8, NEITHER PARTY MAKES
               ANY AND EACH PARTY SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES,
               EXPRESS OR IMPLIED, OR REPRESENTATIONS WITH RESPECT TO THE
               PROGRAM CONTEMPLATED BY THIS AGREEMENT OR ANY PRODUCTS OR
               SERVICES SOLD HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
               IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
               PARTICULAR PURPOSE, AND ANY IMPLIED WARRANTIES ARISING FROM
               STATUTE, COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF
               TRADE.

     (H)       Neither party to this agreement makes any representation that the
               operation of its Web site will be uninterrupted or error-free,
               and neither party will be liable for the consequences of any such
               interruptions or errors.

9.       CUSTOMER POLICIES AND PRODUCT PRICING

         Customers who buy products through this Program will be deemed to be
         the joint customers of VarsityBooks and Sallie Mae. Notwithstanding the
         forgoing, Sallie Mae understands and agrees that all VarsityBooks
         rules, policies, and operating procedures concerning customer orders,
         customer service, and product sales will apply to those customers.
         VarsityBooks may change its policies and operating procedures at any
         time. VarsityBooks will use commercially reasonable efforts to present
         accurate information, but it cannot guarantee the availability or price
         of any particular product.

10.      WEB SITE RESPONSIBILITY

     (A)       Sallie Mae will be solely responsible for the development,
               operation, maintenance, and content of the Sallie Mae Web Site
               and for all materials that appear on the Sallie Mae Web Site
               including, without limitation, ensuring that the materials posted
               on the Sallie Mae Web Site are accurate and do not defame or
               violate or infringe upon the rights of any third party
               (including, for example, copyrights, trademarks, privacy, or
               other personal or proprietary rights). Sallie Mae agrees to
               indemnify and hold VarsityBooks harmless from all claims,
               damages, and expenses (including, without limitation, attorneys'
               fees) relating to the development, operation, maintenance, and
               contents of the Sallie Mae Web Site.

     (B)       VarsityBooks will be solely responsible for the development,
               operation, maintenance, and content of the VarsityBooks Web Site
               and for all materials that appear on the VarsityBooks Web Site
               including, without limitation, ensuring that the materials posted

                                       14
<PAGE>   15

               on the VarsityBooks Web Site are accurate and do not defame or
               violate or infringe upon the rights of any third party
               (including, for example, copyrights, trademarks, privacy, or
               other personal or proprietary rights). VarsityBooks agrees to
               indemnify and hold Sallie Mae harmless from all claims, damages,
               and expenses (including, without limitation, attorneys' fees)
               relating to the development, operation, maintenance, and contents
               of the VarsityBooks Web Site.

     11.  EXCLUSIVITY

          Subject to the terms and conditions set forth above and for the term
          of this Agreement or any renewal thereof, Sallie Mae agrees to make
          VarsityBooks the exclusive College Targeted Retailer on the Sallie Mae
          Web Site. In consideration for the exclusivity rights granted by
          Sallie Mae, VarsityBooks agrees that it will not (i) offer any
          arrangement on terms substantially similar to those agreed to herein
          to, or (ii) accept third-party content or functionality for the
          VarsityBooks Scholarship Vertical from, any Sallie Mae Competitors, as
          such term is hereafter defined. "Sallie Mae Competitors" means a
          lending institution or its affiliate which derives substantially all
          of its revenues from the education loan business, including but not
          limited to originating, funding, guaranteeing, buying, selling,
          servicing, or securitizing education loans; and/or outsourcing
          services to educational institutions which services may include
          without limitation (1) advising on paying for/saving for primary,
          secondary, vocational, or post-secondary education; (2) financial aid
          services; and/or (3) federal and private student loan fulfillment (the
          "EDUCATION LOAN BUSINESS") and the entities listed on Exhibit I hereto
          as such exhibit may be amended from time to time with VarsityBooks'
          consent, which consent shall not be unreasonably withheld, delayed or
          conditioned.

     12. INDEMNIFICATION

          (A)  BY VARSITY BOOKS. VarsityBooks will indemnify, defend and hold
               harmless Sallie Mae and its affiliates, directors, officers and
               employees from and against any and all damages, losses,
               liabilities, expenses, and costs (including, without limitation,
               reasonable attorneys' fees) resulting or arising from a third
               party claim alleging facts that would constitute a breach by
               VarsityBooks of a warranty it is giving under Section 8 hereof or
               a breach of an obligation of VarsityBooks under Section 25 below.
               In the event the use or display of any VarsityBooks Marks by
               Sallie Mae becomes or may be enjoined because it infringes a
               third party's Intellectual Property Rights, VarsityBooks will, at
               its sole expense: (1) obtain for Sallie Mae the right to continue
               using, displaying or operating the infringing materials; or (2)
               replace or modify the infringing materials while still complying
               with the requirements of this Agreement. If neither of the
               foregoing can be reasonably accomplished, Sallie Mae will be
               entitled to terminate this Agreement immediately without any
               liability or obligation to VarsityBooks for doing so, if such
               injunction materially reduces the value of VarsityBooks'
               performance under this Agreement.

          (B)  BY SALLIE MAE. Sallie Mae will indemnify, defend and hold
               harmless VarsityBooks and its affiliates, directors, officers and
               employees from and against any and all damages, losses,
               liabilities, expenses, and costs (including, without limitation,
               reasonable attorneys' fees) resulting or arising from a third
               party claim alleging facts that would constitute a breach by
               Sallie Mae of a warranty it is giving under Section 8 hereof or a

                                       15
<PAGE>   16

               breach of an obligation of Sallie Mae in Section 25 below. In the
               event the use or operation of the Sallie Mae Web Site(s) or the
               use or display of any Sallie Mae Marks by VarsityBooks becomes or
               may be enjoined because it infringes a third party's Intellectual
               Property Rights, Sallie Mae will, at its sole expense: (1) obtain
               for VarsityBooks the right to continue using, displaying or
               operating the infringing materials; or (2) replace or modify the
               infringing materials while still complying with the requirements
               of this Agreement. If neither of the foregoing can be reasonably
               accomplished, VarsityBooks will be entitled to terminate this
               Agreement immediately without any liability or obligation to
               Sallie Mae for doing so, if such injunction materially reduces
               the value of Sallie Mae's performance under this Agreement.

          (C)  In connection with any claim or action described in this section,
               the party seeking indemnification (a) will give the indemnifying
               Party prompt written notice of the indemnifiable claim, including
               the basis on which indemnification is being asserted and copies
               of all relevant pleadings, demands and other papers relating to
               the action and in possession of the Indemnified Party (b) will
               cooperate with Indemnifying Party (at the Indemnifying Party's
               expense) in connection with the defense and settlement of the
               claim and (c) will permit the Indemnifying Party to control the
               defense and settlement of the claim including the selection of
               counsel, provided that the Indemnifying Party may not settle the
               claim without the Indemnified Party's prior written consent
               (which will not be unreasonably withheld). Further, the
               Indemnifying Party will apprise the Indemnified Party of its
               progress in handling the claim and permit Indemnified Party to
               have its own counsel in attendance at all proceedings and
               substantive negotiations relating to such claim at Indemnified
               Party's cost and expense.

13.       LIMITATION OF LIABILITY

          EXCEPT FOR EACH PARTY'S OBLIGATIONS SET FORTH IN SECTION 12, IN NO
          EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD
          PARTY FOR ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL, INDIRECT OR
          INCIDENTAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST PROFITS, EVEN IF
          ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

14.       CONFIDENTIAL INFORMATION

          (A) "CONFIDENTIAL INFORMATION" means all information relating to the
               Agreement, or received by a party (the "RECEIVING PARTY") from
               the other party (the "FURNISHING PARTY") in the course of
               performing under the Agreement, which is or should reasonably be
               understood to be confidential or proprietary to the Furnishing
               Party (including confidential information disclosed by the
               Furnishing Party which relates to or is owned by its licensors,
               suppliers, partners, contractors and agents), in whatever form
               (whether tangible, intangible, electronic, oral or otherwise),
               including without limitation the terms of this Agreement,
               technical processes and formulas, source codes, product designs,
               sales, cost and other unpublished financial information, customer
               information, product and business plans, projections, marketing
               data, trade secrets; specifications; programs; instructions;
               object code; Intellectual Property Rights; technical know-how;
               methods and

                                       16
<PAGE>   17

               procedures for operation; benchmark test results; information
               about employees; marketing strategies; services; customer names;
               business or technical plans and proposals (in any form). In
               addition, until such time as Sallie Mae has publicly announced
               its * , the * shall be included in the definition of Confidential
               Information. For purposes of this Agreement, "INTELLECTUAL
               PROPERTY RIGHTS" or "Intellectual Property" means all forms of
               intellectual property rights and protections, including, without
               limitation, all right, title and interest in and to all patents
               (including all filed, pending or potential applications for
               letters patent), copyrights, trade secrets, trademarks, trade
               names, service marks, symbols, and any other intellectual
               property rights under common law, state law or federal law.

          (B)  The Receiving Party acknowledges and agrees that any and all
               Confidential Information received by it under this Agreement
               hereunder is of a confidential, proprietary and/or trade secret
               nature to the Furnishing Party (or its licensors, suppliers,
               partners, contractors and agents) and that the Furnishing Party
               (or its licensors, suppliers, partners, contractors and agents)
               owns all Intellectual Property Rights in such Confidential
               Information.

          (C)  The Receiving Party: (1) will protect Confidential Information
               received hereunder from unauthorized use and disclosure with at
               least the same degree of care that it utilizes with respect to
               its own similar proprietary information, but in no event less
               than a reasonable standard of care and use same solely and
               exclusively in connection with the implementation or enforcement
               of this Agreement; (2) except as contemplated by this Agreement,
               may not directly or indirectly disclose, publish, copy, duplicate
               onto, convey through, or store on any medium such Confidential
               Information without the Furnishing Party's prior written consent;
               and (3) will ensure that all copyright, trademark and other
               proprietary notices affixed to or displayed on such Confidential
               Information will not be removed or modified and will be
               reproduced on any copies thereof. The Receiving Party will
               promptly inform the Furnishing Party of any actual or suspected
               breach of this Section 14 by it (including its contractors and
               agents) upon becoming aware of such actual or suspected breach.

          (D)  The confidentiality provisions of this Section 14 will not apply
               to any information that the Receiving Party can show: (1) is or
               subsequently becomes publicly available without breach of any
               obligation owed to the Furnishing Party; (2) was known to the
               Receiving Party prior to the Furnishing Party's disclosure of
               such information to the Receiving Party; (3) became known to the
               Receiving Party from a source other than the Furnishing Party,
               and without breach of an obligation of confidentiality owed to
               the Furnishing Party; (4) is independently developed by the
               Receiving Party without reference to the Furnishing Party's
               Confidential Information; or (5) is used by the Receiving Party
               in order to enforce any of its rights, claims or defenses under,
               or as otherwise contemplated in, this Agreement.

          (E)  Nothing in this Agreement will be deemed to prevent the Receiving
               Party from disclosing any Confidential Information received
               hereunder pursuant to any applicable law, regulation or court
               order, including, without limitation, the Securities Act of 1933
               and the Securities Exchange Act of 1934, provided that such
               disclosure will be limited to the minimum acceptable level of
               disclosure and that such Receiving Party will immediately notify
               the Furnishing Party of the imminent disclosure and minimize or

                                       17
<PAGE>   18

               prevent such disclosure to the maximum extent allowed under
               applicable law, regulation or court order.

          (F)  Each party receiving confidential information under this
               Agreement shall maintain the information in confidence in
               accordance with the terms of the Agreement for a period of five
               (5) years from the date of receipt of the information.
               Immediately upon the earlier of the Furnishing Party's request or
               the termination or expiration of this Agreement for any reason,
               the Receiving Party will: (1) stop using all Confidential
               Information of the other party then in its possession not under a
               valid license; (2) erase or destroy all such Confidential
               Information residing in any computer memory or data storage
               apparatus; and (3) destroy or return to the Furnishing Party (in
               the Furnishing Party's discretion) all such Confidential
               Information in tangible form.

          (G)  The Receiving Party acknowledges that its breach of this Section
               14 will cause the Furnishing Party (or its licensors) irreparable
               injury for which monetary damages will not make the other party
               whole. Accordingly, in addition to all other available remedies
               and notwithstanding Section 13 ,the Furnishing Party (or its
               licensors) will be entitled to equitable or injunctive relief as
               and where it deems fit in the event of an actual, attempted or
               threatened breach of any obligation of the Receiving Party
               (including its contractors and agents) under this Section 14.

          (H)  The obligations of confidentiality and limitation of use,
               disclosure, and access set forth herein shall survive the
               termination or expiration of this Agreement for a period of five
               years from the date of such termination or expiration.

15.       PUBLICITY

          (A)  The parties will issue mutually agreeable joint news releases
               from time to time as the parties deem appropriate, including, at
               a minimum, upon the execution of this Agreement.

16.      NOTICE

          (A)  Any notice or other communication required or permitted to be
               made or given by either party pursuant to this Agreement will be
               in writing, and will be deemed to have been duly given: (i) three
               (3) business days after the date of mailing if sent by certified
               U.S. mail, postage prepaid, with return receipt requested; (ii)
               when transmitted if sent by facsimile, provided a confirmation of
               transmission is produced by the sending machine and a copy of
               such facsimile is promptly sent by another means specified in
               this section; or (iii) when delivered if delivered personally or
               sent by express courier service. All notices will be sent to the
               other party at its address as set forth below or at such other
               address as such party will have specified in writing:

               In the case of VarsityBooks:         In the case of Sallie Mae:

                  VARSITYBOOKS                      SALLIE MAE, INC.
                  2020 K Street, N.W.               11600 Sallie Mae Drive
                  6th Floor                         Reston, VA  20193

                                       18
<PAGE>   19

                  Washington, D.C. 20006           Attn:  Robert W. Jackson, VP
                  Attn:  Rich Hozik, SVP/CFO       Phone:  703-810-6018
                  Phone:  202-667-3400             Fax:  703-810-6128
                  Fax:  202.332.5498

                  With a copy to:                  With a copy to:

                  Shaw Pittman                     Sallie Mae, Inc.
                  1676 International Drive         11600 Sallie Mae Drive
                  McLean, VA  22102                Reston, VA  20193
                  Attn:  Andrew M. Tucker, Esq.    Attn:  Robert S. Lavet,
                  Phone:  703-790-7900             VP and Deputy General Counsel
                  Fax:  703-790-7901               Phone:  703-810-5016
                                                   Fax:  703-810-3023

17.       INDEPENDENT CONTRACTOR

          This Agreement will not create an agency, joint venture, partnership,
          franchise, sales representative, employment, or other similar
          relationship between the parties, it being understood that the
          parties' relationship will only be that of independent contractors and
          that each party will be solely responsible and liable for its own
          actions or omissions. Neither party to this Agreement will have the
          authority to make or accept any offers or representations on behalf of
          the other. Neither party will make any statement, on its Web site or
          otherwise, which could reasonably be understood to contradict this
          Section 17.

18.       WAIVER

          No failure or delay by either party in exercising any right, power or
          remedy will operate as a waiver of such right, power or remedy, and no
          waiver will be effective unless it is in writing and signed by the
          waiving party. If either party waives any right, power or remedy, such
          waiver will not waive any successive or other right, power or remedy
          the party may have under this Agreement.

19.       SEVERABILITY

          If any part of this Agreement is determined to be illegal, invalid,
          unenforceable, or otherwise contrary to law by an arbitrator under
          Section 20 or a court of competent jurisdiction, the remainder of the
          Agreement will remain in full force and effect, and the parties will
          substitute an enforceable provision that, to the maximum extent
          possible in accordance with applicable law, preserves the original
          intentions and economic positions of the parties.

                                       19
<PAGE>   20

20.       GOVERNING LAW; DISPUTE RESOLUTION

          This Agreement will for all purposes be governed, interpreted,
          construed, and enforced solely and exclusively in accordance with the
          laws of the State of Delaware except for any provisions of Delaware
          law which would require or permit the application of the substantive
          law of another jurisdiction.

          In discussions and activities relating to this Agreement, VarsityBooks
          and Sallie Mae will cooperate in good faith to accomplish the
          objectives specified in this Agreement. If any dispute arises relating
          to either Party's rights or obligations under this Agreement,
          VarsityBooks and Sallie Mae will use good faith efforts to resolve the
          matter in accordance with this Section 20

          Within ten (10) business days following the written request of either
          Party (which will describe the nature of the dispute and other
          relevant information), the Parties' managers who are responsible for
          the VarsityBooks/Sallie Mae relationship will meet to resolve the
          dispute at a mutually convenient time and place. If the relationship
          managers are unable to resolve the dispute within two (2) business
          days following their initial meeting, they will refer the matter to
          the Parties' divisional executives who are responsible for the
          administration of this Agreement; along with a written statement (or
          statements) describing the nature of the dispute and other relevant
          information.

          Within five (5) business days following the referral of the matter to
          the Parties' divisional executives, the divisional executives will
          meet to resolve the dispute at a mutually convenient time and place.
          Additional representatives of the parties may be present at the
          meeting. All negotiations pursuant to this Section will be
          confidential and treated as compromise and settlement negotiations for
          purposes of the Federal Rules of Evidence and State Rules of Evidence.
          Any resolution reached under this Section will be reduced to writing
          and signed by the Parties. During a dispute resolution conducted under
          this Section, the Parties will diligently perform all obligations
          hereunder that are not directly related to the dispute. If the
          divisional executives are unable to resolve the dispute within ten
          (10) business days following their initial meeting, the controversy or
          claim will be resolved through binding arbitration (excepting disputes
          relating to issues of proprietary rights, including, but not limited
          to intellectual property and confidentiality) conducted in accordance
          with the commercial arbitration rules of the American Arbitration
          Association then in effect, except to the extent that such rules are
          inconsistent with the provisions set forth herein. If VarsityBooks
          initiates arbitration, the arbitration proceedings will be held in
          Fairfax County, Virginia and if Sallie Mae initiates arbitration, the
          arbitration proceedings will be held in the District of Columbia. The
          arbitration will be held before a single arbitrator. The Federal Rules
          of Evidence will apply in toto. In no event will the arbitrator have
          the authority to make any award that provides for punitive or
          exemplary damages. Any decision rendered by the arbitrator will be
          binding, final and conclusive upon both parties, and a judgment
          thereon may be entered in, and enforced by, any court having
          jurisdiction over the party against which an award is entered or the
          location of such party's assets and the parties hereby irrevocably
          waive any objections to the jurisdiction of such court based on any
          ground, including without limitation, improper

                                       20
<PAGE>   21

          venue or forum nor conveniens. The prevailing party in any claim
          action, arbitration or other proceeding arising under or in connection
          with the implementation of enforcement of this Agreement will be
          entitled to recover from the other party all attorneys' fees incurred
          in connection therewith.

          Nothing in this section shall be deemed to prohibit or restrict either
          party from seeking injunctive relief or other interim or provisional
          relief pending resolution of the dispute through such voluntary
          dispute resolution procedures set forth herein.

21.       ENTIRE AGREEMENT; MODIFICATION

          This Agreement (including any and all exhibits attached hereto)
          constitutes the sole, final and entire agreement of the parties and
          supersedes and terminates all previous agreements, oral or written,
          between the parties with respect to the subject matter hereof. All
          amendments or modifications to this Agreement must be in writing and
          signed by an officer of each party.

22.       ASSIGNMENT

          Neither party may assign, delegate or otherwise transfer this
          Agreement or any rights or obligations arising under or in connection
          with this Agreement without the prior written consent of the other
          party, which consent will not be unreasonably withheld or delayed;
          provided, however, that consent shall not be required (i) in
          connection with any assignment by Sallie Mae to an Affiliate, or (ii)
          in connection with any assignment by VarsityBooks to either CollegeOps
          LLC, a Delaware limited liability company or to CollegeImpact Inc., a
          Delaware corporation, both wholly-owned subsidiaries of VarsityBooks.
          Unless otherwise provided in a writing signed by VarsityBooks and
          Sallie Mae, any such assignment to CollegeOps LLC or CollegeImpact
          Inc. shall not relieve VarsityBooks of any of its obligations
          hereunder. This Agreement will be binding upon the parties' respective
          successors and permitted assigns.

23.       CUMULATIVE REMEDIES

          Each party's remedies set forth in this Agreement will be cumulative
          and not exclusive and will be available in addition to all other
          remedies available by law or equity, except as otherwise expressly
          provided in this Agreement.

24.       FORCE MAJEURE

          Neither party will be deemed in default of this Agreement to the
          extent that performance of its obligations, or attempts to cure any
          breach, are delayed or prevented by reason of any act of God or other
          force majeure; provided that, such party immediately gives the other
          party written notice thereof and undertakes commercially reasonable
          efforts to circumvent the cause of the delay or minimize the extent of
          the delay. In any such event,

                                       21
<PAGE>   22

          the time for performance or cure will be extended for a period equal
          to the duration of the delay, not to exceed four (4) weeks. If the
          notifying party does not resume performance of such obligations or
          cure such breach before the end of such four (4) week period, the
          other party will be entitled to terminate this Agreement immediately
          without any obligation or liability to the delayed party for doing so.

25.       COMPLIANCE WITH LAWS.

          (a)  In implementing this Agreement, each party will comply with all
               applicable laws and regulations and maintain in good standing all
               required registrations, licenses and other authorizations.
          (b)  SEC Filings. In connection with any registration of its
               securities under the Securities Act of 1933, as amended, or any
               public disclosure under the Securities Exchange Act of 1934, as
               amended, VarsityBooks shall (i) make timely written objection to
               the public disclosure of information contained in the Agreement
               that references Sallie Mae's * (the "Sallie Mae Confidential
               Information") by following applicable procedures, (ii) follow the
               procedures contained in 17 C.F.R. Sec. 230.406, with respect to
               the Sallie Mae Confidential Information, (iii) provide Sallie Mae
               with an advance copy of and reasonable opportunity, which at a
               minimum shall be one day, to review and comment on VarsityBooks'
               confidential treatment request and provide a copy of the relevant
               portion of any response received from the SEC regarding such
               request.

26.       HEADINGS.

          The captions and headings used in this Agreement are inserted for
          convenience only and will not affect the meaning or interpretation of
          this Agreement.

27.       COUNTERPARTS.

          This Agreement may be executed in counterparts, each of which will be
          deemed an original and all of which together will constitute one and
          the same instrument.

                                       22
<PAGE>   23

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

SALLIE MAE, INC.                            VARSITYBOOKS.COM INC.

/s/ SALLIE MAE, INC.                        /s/ VARSITYBOOKS.COM INC.
---------------------------                 -----------------------------------
Signature                                   Signature

---------------------------                 -----------------------------------
Name                                        Name

---------------------------                 -----------------------------------
Title                                       Title

---------------------------                 -----------------------------------
Date                                        Date

                                       23
<PAGE>   24

                                    EXHIBIT A

          REFERRAL FEES, PAYMENT SCHEDULE AND PERFORMANCE OBLIGATIONS
          -----------------------------------------------------------

1.        Referral Fees

               (a) Calculation of Fee

               Sallie Mae will earn Referral Fees based on Net Revenues
          according to the Referral Fee schedule below. "NET REVENUES" are
          revenues derived by VarsityBooks from the sale of Qualifying Products,
          excluding costs for shipping, handling, special promotions,
          gift-wrapping, service charges, credit card processing fees, returned
          goods, sales taxes and bad debt.

               i.   Sallie Mae will receive a Referral fee of  * of Net Revenues
                    from the sale of Qualifying Products in any term year in
                    which Net Revenues are less than or equal to*

               ii.  In the event that during any term year Net Revenues from the
                    sale of Qualifying Products exceeds * the fee will be
                    increased to * of Net Revenues from the sale of Qualifying
                    Products.

               iii. In the event that during any term year Net Revenues from the
                    sale of Qualifying Products exceeds * the fee will be
                    increased to * of Net Revenues from the sale of Qualifying
                    Products.

               iv.  Referral Fees shall be based on a percentage of annual Net
                    Revenues but will be paid on a quarterly basis. At each
                    scheduled payment date (listed in 1(b) below), the
                    percentage of Referral Fees paid will be based on the amount
                    of Net Revenues generated as of that date. To the extent
                    that any amounts paid to Sallie Mae by VarsityBooks during
                    such term year were calculated and paid based on a lower fee
                    than Sallie Mae is ultimately entitled to receive based on
                    its Net Revenues at term year end, VarsityBooks will pay
                    Sallie Mae any excess over the previously paid amounts due
                    as a result of the above-described increases. Such excess
                    amount shall be paid within thirty (30) days following the
                    end of such term year.

                                  Exhibit A-1

<PAGE>   25

               (b)  Schedule of Payment

                    Based on the schedule below, VarsityBooks will send to
               Sallie Mae the total Referral Fees due to Sallie Mae (based upon
               sales of Qualifying Products according to the formula set forth
               in paragraph 1(a) above) in the form of a commission check for
               the applicable Referral Fees (less any taxes required to be
               withheld under applicable law) as well as a statement of relevant
               activity on the VarsityBooks Web Site. Such commission checks
               will be sent quarterly within thirty days after each of the
               following dates:

                  March 31

                  June 30

                  September 30

                  December 31

2.        PERFORMANCE OBLIGATIONS AND APPLICABLE PAYMENTS

          In addition to Referral Fees, VarsityBooks may compensate Sallie Mae
          with Warrants to purchase up to an aggregate of 616,863 shares of
          common stock of VarsityBooks, par value $0.0001 (the "WARRANT
          SHARES"). The Warrant Shares will be earned by Sallie Mae in
          accordance with the terms of the Warrants attached hereto as Exhibit
          B.

                                  Exhibit A-2
<PAGE>   26

                                    EXHIBIT B

                                FORM OF WARRANTS
                               ------------------

                                  Exhibit B-1
<PAGE>   27
                                                                    CONFIDENTIAL

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

                              VARSITYBOOKS.COM INC.

                           STOCK SUBSCRIPTION WARRANT

                                                                February 3, 2000

         1.       GENERAL.

                  (a) THIS CERTIFIES that, for value received, SALLIE MAE, INC.
("Sallie Mae"), or assigns, is entitled to subscribe for and purchase from
VARSITYBOOKS.COM INC., a Delaware corporation (the "Corporation"), at any time
or from time to time commencing as set forth in Section 1(b) and ending on the
seventh (7th) anniversary of the date hereof (the "Exercise Period"), on the
terms and subject to the provisions hereinafter set forth, up to 352,493 shares
(subject to adjustment as provided herein) (the "Warrant Shares") of fully paid
and non-assessable shares of Common Stock, $0.0001 par value, of the Corporation
(the "Common Stock") as shall be determined in accordance with the provisions of
Section 1(b) hereof, at a price per share (the "Warrant Price") equal to the per
share initial public offering price of the IPO (as hereinafter defined);
provided that if a Corporate Transaction (as defined below) occurs prior to the
IPO Date and prior to any Equity Offering (as defined below), the Warrant Price
shall be equal to the Fully-Diluted Per Share Valuation established in the
Corporate Transaction (as defined below). The Corporation represents, warrants
and covenants that, as of the date hereof, the maximum Warrant Shares issuable
hereunder shall constitute two percent (2%) of the number of shares of voting
capital stock of the Corporation that will be outstanding immediately prior to
the closing of the IPO (as hereinafter defined) after giving effect to the
exercise, exchange or conversion of all outstanding securities, rights, options,
warrants (including this Warrant), calls, commitments or agreements of any
nature or character (whether debt or equity) that are, directly or indirectly,
exercisable or exchangeable for, or convertible into or otherwise represent the
right to purchase or otherwise receive, directly or indirectly, any such capital
stock or other arrangement to acquire at any time or under any circumstance,
voting capital stock of the Corporation or any such other securities and
assuming that all stock options and/or shares

                                  Exhibit B-2
<PAGE>   28
                                                                    CONFIDENTIAL

of capital stock reserved for grant or issuance to officers, directors,
employees and consultants under all agreements, plans or arrangements
theretofore approved by the Board of Directors of the Corporation have been so
granted or issued (as the case may be) (collectively, the "Fully-Diluted
Shares"). In the event that the number of Warrant Shares listed above does not
constitute two percent (2%) of the Fully-Diluted Shares existing immediately
prior to the closing of the IPO, the number of Warrant Shares initially issuable
hereunder (the "Initial Number") shall be adjusted accordingly to cause the
Initial Number to constitute two percent (2%) of the Fully-Diluted Shares
existing immediately prior to the closing of the IPO. As used in this Agreement,
the term "IPO Date" shall mean the date on which the Corporation closes the
initial public offering of its Common Stock (the "IPO"). In the event the
Corporation consummates an equity offering resulting in net proceeds to the
Corporation in excess of ten million dollars ($10,000,000) prior to the IPO Date
(the "EQUITY OFFERING"), the exercise price shall be equal to the lesser of
$10.00 per share or the per share value of the Common Stock in the Equity
Offering. In the event of a Corporate Transaction prior to the earlier of (a)
the IPO Date or (b) the closing of an Equity Offering, in lieu of exercising
this Warrant, Sallie Mae may cancel this Warrant by providing written notice of
its intent to do so to the Corporation (the "RIGHT TO CANCEL").

This Warrant is being issued pursuant to a Product Promotion Agreement dated as
of the date hereof (the "Agreement"), between the Corporation and Sallie Mae,
Inc. All terms used but not defined herein shall have the meanings set forth in
the Agreement.

                  (b) This Warrant shall become exercisable as to that number of
Warrant Shares, and at such times, as are determined in accordance with Exhibit
A attached hereto; provided, however, that this Warrant shall become exercisable
as to all unvested Warrant Shares immediately upon the occurrence of a
Stipulated Event, unless Sallie Mae elects to exercise its Right to Cancel this
Warrant in accordance with Section 1(a) above. As used herein, the term
"Stipulated Event" shall mean (a) a Corporate Transaction (as hereinafter
defined) or (b) a termination of the Agreement that results from a material
breach by the Corporation of the Agreement. "Corporate Transaction" means (A)
any consolidation or merger of the Corporation with or into any other
corporation or other entity, other than any merger or consolidation resulting in
the holders of the capital stock of the Corporation entitled to vote for the
election of directors holding a majority of the capital stock of the surviving
or resulting corporation or other entity entitled to vote for the election of
directors, (B) any person or entity (including any affiliates thereof) becoming
the holder of a majority of the capital stock of the Corporation entitled to
vote for the election of directors, or (C) any sale or other disposition by the
Corporation of all or substantially all of its assets or capital stock.
"FULLY-DILUTED PER SHARE VALUATION ESTABLISHED IN A CORPORATE TRANSACTION" means
the value ascribed to the Corporation in the Corporate Transaction divided by
the number of Fully-Diluted shares.

         2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part, at any time or from time to
time during the Exercise Period, by the surrender of this Warrant (properly
endorsed) at the office of the Corporation at 2020 K St., NW, 6th Floor,
Washington, DC 20006, or at

                                  Exhibit B-3
<PAGE>   29
                                                                    CONFIDENTIAL

such other agency or office of the Corporation in the United States of America
as it may designate by notice in writing to the holder hereof at the address of
such holder appearing on the books of the Corporation, and by payment (either in
cash, by check or wire transfer, by cancellation of indebtedness and/or in
shares of capital stock of the Corporation valued at Fair Market Value (as
hereinafter defined) on the date of such exercise) to the Corporation of the
Warrant Price for each Warrant Share being purchased. In the event of the
exercise of the rights represented by this Warrant, a certificate or
certificates for the Warrant Shares so purchased, registered in the name of the
holder, and if this Warrant shall not have been exercised for all of the Warrant
Shares, a new Warrant, registered in the name of the holder hereof, of like
tenor to this Warrant, shall be delivered to the holder hereof within a
reasonable time, not exceeding six business days, after the rights represented
by this Warrant shall have been so exercised. The person in whose name any
certificate for Warrant Shares is issued upon exercise of this Warrant shall for
all purposes be deemed to have become the holder of record of such shares on the
date on which the Warrant was surrendered and payment of the Warrant Price and
any applicable taxes was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Corporation are closed, such person shall
be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

         3.       EXCHANGE OF WARRANT.

                  (a) In addition to, and independent of, the rights of the
holder of this Warrant set forth in Section 2 hereof, the holder hereof may at
any time or from time to time elect to receive, without the payment by the
holder of any additional consideration, that number of Warrant Shares determined
as hereinafter provided in this Section 3 by the surrender of this Warrant or
any portion hereof to the Corporation, accompanied by an executed Notice of
Exchange in substantially the form thereof attached hereto (the "Net Issue
Election"). Thereupon, the Corporation shall issue to the holder hereof such
number of fully paid and nonassessable Warrant Shares as is computed using the
following formula:

                                   X = Y (A-B)
                                   -----------
                                       A

where X =         the number of Warrant Shares to be issued to the holder
                  pursuant to this Section 3.

        Y =       the number of Warrant Shares covered by this Warrant in repect
                  of which the Net Issue Election is made pursuant to this
                  Section 3.

        A =       the Fair Market Value (as hereinafter defined) of one Warrant
                  Share determined at the time the Net Issue Election is made
                  pursuant to this Section 3 (the "Determination Date").

        B =       the Warrant Price in effect under this Warrant at the
                  Determination Date.

                                  Exhibit B-4
<PAGE>   30
                                                                    CONFIDENTIAL

        All references in this Warrant to an "exercise" of the Warrant shall
include an exchange pursuant to this Section 3.

                  (b) For purposes of the above calculation, "Fair Market Value"
of one Warrant Share as of the Determination Date shall mean:

                           (i) if the Common Stock of the Corporation is not
         then traded on a national securities exchange, the average of the
         closing prices quoted on the National Association of Securities
         Dealers, Inc. Automated Quotation National Market System, if
         applicable, or the average of the last bid and asked prices of the
         Common Stock quoted in the over-the-counter-market or (B) if the Common
         Stock is then traded on a national securities exchange, the average of
         the high and low prices of the Common Stock listed on the principal
         national securities exchange on which the Common Stock is so traded, in
         each case for the twenty (20) trading days immediately preceding the
         Determination Date or, if such date is not a business day on which
         shares are traded, the next immediately preceding trading day;

                           (ii) in the event of a Warrant Exchange in connection
         with a Corporate Transaction, the value per share of Common Stock
         received or receivable by each holder thereof (assuming for purposes of
         this determination, in the case of a sale of assets, the Corporation is
         liquidated immediately following such sale and the consideration paid
         to the Corporation is immediately distributed to its stockholders); and

                           (iii) in all other circumstances, the fair market
         value per share of Common Stock shall be the value thereof, as agreed
         upon by the Corporation and the holder of this Warrant, provided,
         however, that if the Corporation and the holder cannot agree on such
         value, such value shall be determined by an independent investment
         banking or valuation firm experienced in valuing businesses such as the
         Corporation and jointly selected in good faith by the Corporation and
         the holder. Fees and expenses of the valuation firm shall be paid for
         by the Corporation.

The closing of any Warrant Exchange shall take place at the offices of the
Corporation on the date specified in the Notice of Exchange (the "Exchange
Date"), which shall be not less than three and not more than 30 days after the
delivery of such Notice. At such closing, the Corporation shall issue and
deliver to the holder or its designee a certificate or certificates for the
Warrant Shares to be issued upon such Warrant Exchange, registered in the name
of the holder or such designee, and if such Warrant Exchange shall not have been
for all Warrant Shares, a new Warrant, registered in the name of the holder, of
like tenor to this Warrant for the number of shares still subject to this
Warrant following such Warrant Exchange.

                                  Exhibit B-5
<PAGE>   31
                                                                    CONFIDENTIAL

         4.       ADJUSTMENT OF WARRANT PRICE.

                  (a) The Warrant Price shall be subject to adjustment from time
to time as follows:

                           (i) If the Corporation shall at any time or from time
         to time during the Exercise Period, issue any shares of Common Stock
         (or be deemed to have issued any shares of Common Stock as provided
         herein), other than Excluded Securities (as defined in Section 4(a)(
         v)) without consideration or for a consideration per share less than
         the Fair Market Value (determined in accordance with the formula set
         forth in Section 3) of a share of Common Stock in effect immediately
         prior to the issuance of Common Stock, the Warrant Price in effect
         immediately prior to such issuance shall forthwith be lowered to a
         price equal to the quotient obtained by dividing: (x) an amount equal
         to the sum of (1) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately prior to such
         issuance multiplied by the Warrant Price in effect immediately prior to
         such issuance, plus (2) the consideration received by the Corporation
         upon such issuance, by (y) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately after the issuance
         or deemed issuance of such Common Stock.

                           (ii) For the purposes of any adjustment of the
         Warrant Price pursuant to Section 4(a)(i), the following provisions
         shall be applicable:

                                    (A)     In the case of the issuance of
         Common Stock for cash, the consideration received by the Corporation
         from such issuance shall be deemed to be the amount of cash paid
         therefor before deducting therefrom any discounts, commissions or other
         expenses allowed, paid or incurred by the Corporation for any
         underwriting or otherwise in connection with the issuance and sale
         thereof.

                                    (B) In the case of the issuance of Common
         Stock for a consideration in whole or in part other than cash, the
         consideration other than cash shall be deemed to be the fair market
         value thereof as determined in good faith by the Board of Directors of
         the Corporation, irrespective of any accounting treatment.

                                    (C) In the case of the issuance of Common
         Stock without consideration, the consideration shall be deemed to be
         $0.01 per share.

                                    (D) In the case of the issuance of (x)
         options to purchase or rights to subscribe for Common Stock, (y)
         securities by their terms convertible into or exchangeable for Common
         Stock or (z) options to purchase rights to subscribe for such
         convertible or exchangeable securities:

                                  Exhibit B-6
<PAGE>   32
                                                                    CONFIDENTIAL

                                            (1)      the aggregate maximum
                  number of shares of Common Stock deliverable upon exercise of
                  such options to purchase or rights to subscribe for Common
                  Stock shall be deemed to have been issued at the time such
                  options or rights were issued and for a consideration equal to
                  the consideration (determined in the manner provided in
                  subdivisions (A), (B) and (C) above), if any, received by the
                  Corporation upon the issuance of such options or rights plus
                  the minimum purchase price provided in such options or rights
                  for the Common Stock covered thereby;

                                            (2)      the aggregate maximum
                  number of shares of Common Stock deliverable upon conversion
                  of or in exchange for any such convertible or exchangeable
                  securities or upon the exercise of options to purchase or
                  rights to subscribe for such convertible or exchangeable
                  securities and subsequent conversion or exchange thereof shall
                  be deemed to have been issued at the time such securities were
                  issued or such options or rights were issued and for a
                  consideration equal to the consideration received by the
                  Corporation for any such securities and related options or
                  rights (excluding any cash received on account of accrued
                  interest or accrued dividends), plus the additional
                  consideration, if any, to be received by the Corporation upon
                  the conversion or exchange of such securities or the exercise
                  of any related options or rights (the consideration in each
                  case to be determined in the manner provided in subdivisions
                  (A), (B) and (C) above);

                                            (3)      on any change in the
                  number of shares or exercise price of Common Stock deliverable
                  upon exercise of any such options or rights or conversions of
                  or exchanges for such securities, other than a change
                  resulting from the antidilution provisions thereof, the
                  applicable Warrant Price shall forthwith be readjusted to such
                  Warrant Price as would have resulted had the adjustment made
                  upon the issuance of such options, rights or securities not
                  converted prior to such change (or options or rights related
                  to such securities not converted prior to such change) been
                  made upon the basis of such change; provided, however, that
                  such readjustment shall not result in a Warrant Price that is
                  greater than the original Warrant Price; and

                                            (4)      on the expiration of all
                  such options or rights, the termination of all such rights to
                  convert or exchange or the expiration of all options or rights
                  related to such convertible or exchangeable securities in each
                  case having been issued by the Corporation for the same
                  consideration (as determined pursuant to subdivision (A), (B)
                  and (C) above), the applicable Warrant Price shall forthwith
                  be readjusted to such Warrant Price as would have resulted had
                  the adjustment made upon the issuance of such options, rights,
                  securities or options or rights related to such securities not
                  been made; provided, however, that such readjustment shall not
                  result in a Warrant Price that is greater that the original
                  Warrant Price.

                                  Exhibit B-7
<PAGE>   33
                                                                    CONFIDENTIAL

                           (iii) If, at any time during the Exercise Period, the
     number of shares of Common Stock outstanding is increased by a stock
     dividend payable in shares of Common Stock or by a subdivision or split-up
     of shares of Common Stock, then, following the record date fixed for the
     determination of holders of Common Stock entitled to receive such stock
     dividend, subdivision or split-up, the Warrant Price shall be appropriately
     decreased and the number of shares of Common Stock issuable upon exercise
     of this Warrant shall be appropriately increased, in each case in
     proportion to such increase in outstanding shares.

                           (iv) If, at any time during the Exercise Period, the
     number of shares of Common Stock outstanding is decreased by a combination
     of the outstanding shares of Common Stock, then, following the record date
     for such combination, the Warrant Price shall be appropriately increased
     and the number of shares of Common Stock issuable upon exercise of this
     Warrant shall be appropriately decreased, in each case, in proportion to
     such decrease in outstanding shares.

                           (v) For purposes of Section 4(a), the term "Excluded
     Securities" shall mean (A) shares of Common Stock (subject to equitable
     adjustment for stock splits, dividends, combinations and like occurrences)
     issued to officers, employees or directors of Corporation, pursuant to any
     agreement, plan or arrangement approved by the Board of Directors of the
     Corporation, or options to purchase or rights to subscribe for such Common
     Stock, or securities by their terms convertible into or exchangeable for
     such Common Stock, or options to purchase or rights to subscribe for such
     convertible or exchangeable securities pursuant to such agreement, plan or
     arrangement; (B) shares of Common Stock issued as a stock dividend or upon
     any stock split or other subdivision or combination of shares of Common
     Stock; (C) securities issued pursuant to the acquisition of another
     corporation or other entity by the Corporation by merger or purchase of
     stock or purchase of all or substantially all of such other corporation's
     or other entity's assets whereby the Corporation owns not less than a
     majority of the voting power of such other corporation or other entity
     following such acquisition or purchase; or (D) securities issued in an
     underwritten public offering approved by the Board of Directors.

                           (vi) All calculations under this Section 4 shall be
     made to the nearest one tenth (1/10) of a cent or to the nearest one tenth
     (1/10) of a share, as the case may be.

     (b) Whenever the Warrant Price shall be adjusted as provided in this
         Section 4 the Corporation shall forthwith file, at the office of the
         Corporation or any transfer agent designated by the Corporation for the
         Common Stock, a statement, signed by its chief financial officer,
         showing in detail the facts requiring such adjustment and the adjusted
         Warrant Price. The Corporation shall also cause a copy of such
         statement to be sent by first-class certified mail, return receipt
         requested, postage prepaid, to each holder of a Warrant at his or its
         address appearing on the Corporation's records. Where appropriate, such
         copy may be

                                  Exhibit B-8
<PAGE>   34
                                                                    CONFIDENTIAL

         given in advance and may be included as part of a notice
         required to be mailed under the provisions set forth immediately below.

     (c) In case the Corporation shall make or issue, or shall fix a record date
         for the determination of eligible holders entitled to receive, a
         dividend or other distribution with respect to the Common Stock (or any
         shares of stock or other securities at the time issuable upon exercise
         of the Warrant) payable in assets (excluding cash dividends paid or
         payable solely out of retained earnings but including shares of any
         subsidiary), then, in each such case, the holder of this Warrant on
         exercise hereof at any time after the consummation, effective date or
         record date of such dividend or other distribution, shall receive, in
         addition to the Warrant Shares (or such other stock or securities)
         issuable on such exercise prior to such date, and without the payment
         of additional consideration therefor, the securities or such other
         assets of the Corporation to which such holder would have been entitled
         upon such date if such holder had exercised this Warrant on the date
         hereof and had thereafter, during the period from the date hereof to
         and including the date of such exercise, retained such shares and/or
         all other additional stock available by it as aforesaid during such
         period giving effect to all adjustments called for by this Section 4.

     (d) In the event the Corporation shall propose to take any action of the
         types described in Section 4(a)(iii) or (iv) or Section 11, the
         Corporation shall give notice to each holder of a Warrant in the manner
         set forth herein, which notice shall specify the record date, if any,
         with respect to any such action and the date on which such action is to
         take place. Such notice shall also set forth such facts with respect
         thereto as shall be reasonably necessary to indicate the effect of such
         action (to the extent such effect may be known at the date of such
         notice) on the Warrant Price then in effect and the number, kind or
         class of shares or other securities or property which shall be
         delivered or purchasable upon the occurrence of such action or
         deliverable upon exercise of this Warrant. In the case of any action
         which would require the fixing of a record date, such notice shall be
         given at least 10 days prior to the date so fixed, and in case of all
         other action, such notice shall be given at least 20 days prior to the
         taking of such proposed action. Failure to give such notice, or any
         defect therein, shall not affect the legality or validity of any such
         action.

         5. ADJUSTMENT OF WARRANT SHARES. Upon each adjustment of the Warrant
Price as provided in Section 4, the holder hereof shall thereafter be entitled
to subscribe for and purchase, at the Warrant Price resulting from such
adjustment, the number of Warrant Shares equal to the product of (i) the number
of Warrant Shares existing prior to such adjustment and (ii) the quotient
obtained by dividing (A) the Warrant Price existing prior to such adjustment by
(B) the new Warrant Price resulting from such adjustment. No fractional shares
of Common Stock shall be issued as a result of any such adjustment, and any
fractional shares resulting from the computations pursuant to this paragraph
shall be eliminated without consideration.

                                  Exhibit B-9
<PAGE>   35
                                                                    CONFIDENTIAL

         6. COVENANTS AS TO COMMON STOCK. The Corporation covenants and agrees
that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant, will, upon issuance, be validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof. The Corporation further covenants and agrees
that the Corporation will from time to time take all such action as may be
requisite to assure that the stated or par value per share of Common Stock is at
all times equal to or less than the then effective Warrant Price per share of
Common Stock issuable upon exercise of this Warrant. The Corporation further
covenants and agrees that the Corporation will at all times have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this Warrant. The
Corporation further covenants and agrees that if any shares of capital stock to
be reserved for the purpose of the issuance of shares of Common Stock upon the
exercise of this Warrant require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Corporation will in good
faith and expeditiously as possible endeavor to secure such registration or
approval, as the case may be. If and so long as the Common Stock issuable upon
the exercise of the rights represented by this Warrant is listed on any national
securities exchange, the Corporation will, if permitted by the rules of such
exchange, list and keep listed on such exchange, upon official notice of
issuance, all shares of such capital stock.

         7. NO SHAREHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Corporation.

         8. RESTRICTIONS ON TRANSFER. The holder of this Warrant acknowledges
that neither this Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") and the holder of this
Warrant agrees that no sale, transfer, assignment, hypothecation or other
disposition of this Warrant or the Warrant Shares shall be made in the absence
of (a) current registration statement under the Securities Act as to this
Warrant or the Warrant Shares and the registration or qualification of this
Warrant or the Warrant Shares under any applicable state securities laws then in
effect or (ii) an opinion of counsel reasonably satisfactory to the Corporation
to the effect that such registration or qualification is not required. Each
certificate or other instrument for Warrant Shares issued upon exercise of this
Warrant shall, if required under the Securities Act or the rules promulgated
thereunder, be imprinted with a legend substantially to the foregoing effect.

         9. INVESTOR RIGHTS AGREEMENT. Anything contained herein to the contrary
notwithstanding, the Warrant Shares shall be entitled to all rights and benefits
accorded thereto in that certain Fourth Amended and Restated Investors' Rights
Agreement, dated as of February 3, 2000, by and among the Corporation and the
Investors (as defined therein) .

         10. TRANSFER OF WARRANT; AMENDMENT. Subject to the restriction set
forth in Section 8, this Warrant and all rights hereunder are transferable, in
whole, or in part, at the agency or office of the Corporation referred to in
Section 2, by the holder hereof in

                                  Exhibit B-10
<PAGE>   36
                                                                    CONFIDENTIAL

person or by duly authorized attorney, upon surrender of this Warrant properly
endorsed. Each taker and holder of this Warrant, by taking or holding the same,
consents and agrees that this Warrant, when endorsed, in blank, shall be deemed
negotiable, and, when so endorsed the holder hereof may be treated by the
Corporation and all other persons dealing with this Warrant as the absolute
owner hereof for any purposes and as the person entitled to exercise the rights
represented by this Warrant, or to the transfer hereof on the books of the
Corporation, any notice to the contrary notwithstanding; but until each transfer
on such books, the Corporation may treat the registered holder hereof as the
owner hereof for all purposes.

         11. REORGANIZATIONS, ETC. In case, at any time during the Exercise
Period, of any capital reorganization, of any reclassification of the stock of
the Corporation (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a consolidation
or merger in which the Corporation is the continuing operation and which does
not result in any change in the Common Stock) or of the sale of all or
substantially all the properties and assets of the Corporation as an entirety to
any other corporation, this Warrant shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which such holder
would have been entitled if he had held the Common Stock issuable upon the
exercise hereof immediately prior to such reorganization, reclassification,
consolidation, merger or sale. In any such reorganization or other action or
transaction described above, appropriate provision shall be made with respect to
the rights and interests of the holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Warrant Price and of the number of shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Corporation will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation or entity (if other than the Corporation) resulting from
such transaction or the corporation or entity purchasing such assets shall
assume by written instrument, executed and mailed or delivered to the registered
holder hereof at the last address of such holder appearing on the books of the
Corporation, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.

         12. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Corporation, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.

                                  Exhibit B-11
<PAGE>   37
                                                                    CONFIDENTIAL

         13. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

         14. NOTICES. All notices, advises and communications to be given or
otherwise made to any party to this Agreement shall be deemed to be sufficient
if contained in a written instrument delivered in person or by telecopier or
duly sent by first class registered or certified mail, return receipt requested,
postage prepaid, or by overnight courier, or by electronic mail, with a copy
thereof to be sent by mail (as aforesaid) within 24 hours of such electronic
mail, addressed to such party at the address set forth below or at such other
address as may hereafter be designated in writing by the addressee to the
addresser listing all parties:

                  If to the Corporation, to:

                      VarsityBooks.com Inc.
                      2020 K St., NW
                      6th Floor
                      Washington, DC 20006
                      Attention:  Richard Hozik
                      Telecopier:  202-332-5498
                      Electronic mail:  rich@varsitybooks.com

                      With a copy to:

                      Shaw Pittman
                      1676 International Drive
                      McLean, Virginia 22102-4835
                      Attention: Andrew M. Tucker
                      Telecopier:  703-790-7901
                      Electronic mail: andy.tucker@shawpittman.com

              and

                  If to Sallie Mae as follows:

                      Sallie Mae, Inc.
                      11600 Sallie Mae Drive
                      Reston, V.A. 20193
                      Attention:  General Counsel
                      Telecopier:
                      Electronic mail:

Or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or

                                  Exhibit B-12
<PAGE>   38
                                                                    CONFIDENTIAL

communication shall be deemed to have been delivered and received (i) in the
case of personal delivery or delivery by telecopier, on the date of such
delivery, (ii) in the case of nationally-recognized overnight courier, on the
next business day after the date when sent and (ii) in the case of mailing, on
the third business day following that on which the piece of mail containing such
communication is posted. As used in this Section 14, "business day" shall mean
any day other than a day on which banking institutions in the District of
Columbia are legally closed for business.

         15. BINDING EFFECT ON SUCCESSORS; SURVIVAL. This Warrant shall be
binding upon any corporation succeeding the Corporation by merger, consolidation
or acquisition of all or substantially all of the Corporation's assets. All of
the obligations of the Corporation relating to the Common Stock issuable upon
the exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Corporation shall inure to
the benefit of the successors and assigns of Sallie Mae.

         16. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.

         17. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Corporation shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then Fair Market Value of one Warrant Share.

                                      * * *

                                  Exhibit B-13
<PAGE>   39
                                                                    CONFIDENTIAL

         IN WITNESS WHEREOF, the undersigned have caused this Warrant and
Warrant Agreement to be executed by their duly authorized officers on the date
first above written.

                                           VARSITYBOOKS.COM INC.

                                           By: /s/ Eric J. Kuhn
                                               --------------------------------
                                               Name:  Eric J. Kuhn
                                               Title:    Chief Executive Officer

ATTEST: ___________________________
             SECRETARY

                                           SALLIE MAE, INC.

                                           By: /s/ SALLIE MAE, INC.
                                               --------------------------------
                                               Name:
                                               Title:

                                  Exhibit B-14
<PAGE>   40
                                                                    CONFIDENTIAL

                              FORM OF SUBSCRIPTION

                     [To be signed upon exercise of Warrant]

                  The undersigned, the holder of the Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _________ shares of Common Stock, par value $0.0001, of
Varsitybooks.com Inc., and herewith makes payment of $_________ therefor, and
requests that the certificates for such shares be issued on _____________ in the
name of and delivered to, ____________, whose address is
_________________________________________________.

Dated:_____________
                                   ---------------------------------
                                   (Signature)

                                   ---------------------------------
                                    (Address)

                                  Exhibit B-15
<PAGE>   41
                                                                    CONFIDENTIAL

                               NOTICE OF EXCHANGE

                        (To be executed by the holder in
                         order to exchange the Warrant.)

                  The undersigned hereby irrevocably elects to exchange this
Warrant into __________ shares (the foregoing number constituting the number of
Warrant Shares to be issued pursuant to Section 3 of this Warrant) of Common
Stock, par value $0.0001, of Varsitybooks.com Inc., minus any shares to be
deducted from the foregoing number in accordance with the terms of this Warrant,
according to the conditions thereof. The undersigned desires to consummate such
exchange on ________________ and requests that the certificates be issued in the
name of delivered to _____________ whose address is __________________.

Dated:

                                 _____________________________
                                 Name of Holder:

                                 By:__________________________

                                  Exhibit B-16
<PAGE>   42
                               FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Warrant]

                  For value received, the undersigned hereby sells, assigns and
transfers unto ______________ the right represented by the Warrant to purchase
_______ shares of Common Stock, par value $0.0001, of Varsitybooks.com Inc., to
which the Warrant relates, and appoints [Name of Attorney] to transfer such
right on the books of [ISSUER], with full power of substitution in the premises.

Dated:_____________

                                    ----------------------------
                                   (Signature)

Signed in the presence of:

------------------------------

                                  Exhibit B-17
<PAGE>   43
                                                                    CONFIDENTIAL

                                    EXHIBIT A

                         NUMBER OF SHARES FOR WHICH THE
                          WARRANT SHALL BE EXERCISABLE:

All of the Warrant Shares shall be fully vested as of the date of execution of
the Product Promotion Agreement between the Corporation and Sallie Mae.
Notwithstanding the foregoing, should Sallie Mae elect to exercise its Right to
Cancel in accordance with Section 1(a) hereof, all of the Warrant Shares shall
immediately divest and be cancelled.

                                  Exhibit B-18
<PAGE>   44
                                                                    CONFIDENTIAL

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

                              VARSITYBOOKS.COM INC.

                           STOCK SUBSCRIPTION WARRANT

                                                                February 3, 2000

         1.       GENERAL.

                  (a) THIS CERTIFIES that, for value received, SALLIE MAE, INC.
("Sallie Mae"), or assigns, is entitled to subscribe for and purchase from
VARSITYBOOKS.COM INC., a Delaware corporation (the "Corporation"), at any time
or from time to time commencing as set forth in Section 1(b) and ending on the
seventh (7th) anniversary of the date hereof (the "Exercise Period"), on the
terms and subject to the provisions hereinafter set forth, up to 132,185 shares
(subject to adjustment as provided herein) (the "Warrant Shares") of fully paid
and non-assessable shares of Common Stock, $0.0001 par value, of the Corporation
(the "Common Stock") as shall be determined in accordance with the provisions of
Section 1(b) hereof, at a price per share (the "Warrant Price") equal to the per
share initial public offering price of the IPO (as hereinafter defined);
provided that if a Corporate Transaction (as defined below) occurs prior to the
IPO Date and prior to an Equity Offering (as defined below), the Warrant Price
shall be equal to the Fully-Diluted Per Share Valuation established in the
Corporate Transaction (as defined below). The Corporation represents, warrants
and covenants that, as of the date hereof, the maximum Warrant Shares issuable
hereunder shall constitute three quarters of one percent (.75%) of the number of
shares of voting capital stock of the Corporation that will be outstanding
immediately prior to the closing of the IPO (as hereinafter defined) after
giving effect to the exercise, exchange or conversion of all outstanding
securities, rights, options, warrants (including this Warrant), calls,
commitments or agreements of any nature or character (whether debt or equity)
that are, directly or indirectly, exercisable or exchangeable for, or
convertible into or otherwise represent the right to purchase or otherwise
receive, directly or indirectly, any such capital stock or other arrangement to
acquire at any time or under any circumstance, voting capital stock of the
Corporation or any such other securities and assuming that all

                                  Exhibit B-19
<PAGE>   45
                                                                    CONFIDENTIAL

stock options and/or shares of capital stock reserved for grant or issuance to
officers, directors, employees and consultants under all agreements, plans or
arrangements theretofore approved by the Board of Directors of the Corporation
have been so granted or issued (as the case may be) (collectively, the
"Fully-Diluted Shares"). In the event that the number of Warrant Shares listed
above does not constitute three quarters of one percent (.75%) of the
Fully-Diluted Shares existing immediately prior to the closing of the IPO, the
number of Warrant Shares initially issuable hereunder (the "Initial Number")
shall be adjusted accordingly to cause the Initial Number to constitute three
quarters of one percent (.75%) of the Fully-Diluted Shares existing immediately
prior to the closing of the IPO. As used in this Agreement, the term "IPO Date"
shall mean the date on which the Corporation closes the initial public offering
of its Common Stock (the "IPO"). In the event the Corporation consummates an
equity offering resulting in net proceeds to the Corporation in excess of ten
million dollars ($10,000,000) prior to the IPO Date (the "EQUITY OFFERING"), the
exercise price shall be equal to the lesser of $10.00 per share or the per share
value of the Common Stock in the Equity Offering. In the event of a Corporate
Transaction prior to the earlier of (a) the IPO Date or (b) the closing of an
Equity Offering, in lieu of exercising this Warrant, Sallie Mae may cancel this
Warrant by providing written notice of its intent to do so to the Corporation
(the "RIGHT TO CANCEL").

         This Warrant is being issued pursuant to a Product Promotion Agreement
dated as of the date hereof (the "Agreement"), between the Corporation and
Sallie Mae, Inc. All terms used but not defined herein shall have the meanings
set forth in the Agreement.

                  (b) This Warrant shall become exercisable as to that number of
Warrant Shares, and at such times, as are determined in accordance with Exhibit
A attached hereto; provided, however, that this Warrant shall become exercisable
as to all unvested Warrant Shares immediately upon the occurrence of a
Stipulated Event, unless Sallie Mae elects to exercise its Right to Cancel this
Warrant in accordance with Section 1(a) above. As used herein, the term
"Stipulated Event" shall mean (a) a Corporate Transaction (as hereinafter
defined) or (b) a termination of the Agreement that results from a material
breach by the Corporation of the Agreement. "Corporate Transaction" means (A)
any consolidation or merger of the Corporation with or into any other
corporation or other entity, other than any merger or consolidation resulting in
the holders of the capital stock of the Corporation entitled to vote for the
election of directors holding a majority of the capital stock of the surviving
or resulting corporation or other entity entitled to vote for the election of
directors, (B) any person or entity (including any affiliates thereof) becoming
the holder of a majority of the capital stock of the Corporation entitled to
vote for the election of directors, or (C) any sale or other disposition by the
Corporation of all or substantially all of its assets or capital stock.
"FULLY-DILUTED PER SHARE VALUATION ESTABLISHED IN A CORPORATE TRANSACTION" means
the value ascribed to the Corporation in the Corporate Transaction divided by
the number of Fully-Diluted shares.

         2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part, at any time or from time to
time during the Exercise Period, by the surrender of this Warrant (properly
endorsed) at the

                                  Exhibit B-20
<PAGE>   46
office of the Corporation at 2020 K St., NW, 6th Floor, Washington, DC 20006, or
at such other agency or office of the Corporation in the United States of
America as it may designate by notice in writing to the holder hereof at the
address of such holder appearing on the books of the Corporation, and by payment
(either in cash, by check or wire transfer, by cancellation of indebtedness
and/or in shares of capital stock of the Corporation valued at Fair Market Value
(as hereinafter defined) on the date of such exercise) to the Corporation of the
Warrant Price for each Warrant Share being purchased. In the event of the
exercise of the rights represented by this Warrant, a certificate or
certificates for the Warrant Shares so purchased, registered in the name of the
holder, and if this Warrant shall not have been exercised for all of the Warrant
Shares, a new Warrant, registered in the name of the holder hereof, of like
tenor to this Warrant, shall be delivered to the holder hereof within a
reasonable time, not exceeding six business days, after the rights represented
by this Warrant shall have been so exercised. The person in whose name any
certificate for Warrant Shares is issued upon exercise of this Warrant shall for
all purposes be deemed to have become the holder of record of such shares on the
date on which the Warrant was surrendered and payment of the Warrant Price and
any applicable taxes was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Corporation are closed, such person shall
be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

         3.       EXCHANGE OF WARRANT.

                  (a) In addition to, and independent of, the rights of the
holder of this Warrant set forth in Section 2 hereof, the holder hereof may at
any time or from time to time elect to receive, without the payment by the
holder of any additional consideration, that number of Warrant Shares determined
as hereinafter provided in this Section 3 by the surrender of this Warrant or
any portion hereof to the Corporation, accompanied by an executed Notice of
Exchange in substantially the form thereof attached hereto (the "Net Issue
Election"). Thereupon, the Corporation shall issue to the holder hereof such
number of fully paid and nonassessable Warrant Shares as is computed using the
following formula:

                                   X = Y (A-B)
                                       ------
                                          A

where  X  =   the number of Warrant Shares to be issued to the holder pursuant
              to this Section 3.

       Y  =   the number of Warrant Shares covered by this Warrant in respect of
              which the Net Issue Election is made pursuant to this Section 3.

       A  =   the Fair Market Value (as hereinafter defined) of one Warrant
              Share determined at the time the Net Issue Election is made
              pursuant to this Section 3 (the "Determination Date").

                                  Exhibit B-21
<PAGE>   47
                                                                    CONFIDENTIAL

        B =       the Warrant Price in effect under this Warrant at the
                  Determination Date.

         All references in this Warrant to an "exercise" of the Warrant shall
include an exchange pursuant to this Section 3.

                  (b) For purposes of the above calculation, "Fair Market Value"
of one Warrant Share as of the Determination Date shall mean:

                           (i) if the Common Stock of the Corporation is not
         then traded on a national securities exchange, the average of the
         closing prices quoted on the National Association of Securities
         Dealers, Inc. Automated Quotation National Market System, if
         applicable, or the average of the last bid and asked prices of the
         Common Stock quoted in the over-the-counter-market or (B) if the Common
         Stock is then traded on a national securities exchange, the average of
         the high and low prices of the Common Stock listed on the principal
         national securities exchange on which the Common Stock is so traded, in
         each case for the twenty (20) trading days immediately preceding the
         Determination Date or, if such date is not a business day on which
         shares are traded, the next immediately preceding trading day;

                           (ii) in the event of a Warrant Exchange in connection
         with a Corporate Transaction, the value per share of Common Stock
         received or receivable by each holder thereof (assuming for purposes of
         this determination, in the case of a sale of assets, the Corporation is
         liquidated immediately following such sale and the consideration paid
         to the Corporation is immediately distributed to its stockholders); and

                           (iii) in all other circumstances, the fair market
         value per share of Common Stock shall be the value thereof, as agreed
         upon by the Corporation and the holder of this Warrant, provided,
         however, that if the Corporation and the holder cannot agree on such
         value, such value shall be determined by an independent investment
         banking or valuation firm experienced in valuing businesses such as the
         Corporation and jointly selected in good faith by the Corporation and
         the holder. Fees and expenses of the valuation firm shall be paid for
         by the Corporation.

The closing of any Warrant Exchange shall take place at the offices of the
Corporation on the date specified in the Notice of Exchange (the "Exchange
Date"), which shall be not less than three and not more than 30 days after the
delivery of such Notice. At such closing, the Corporation shall issue and
deliver to the holder or its designee a certificate or certificates for the
Warrant Shares to be issued upon such Warrant Exchange, registered in the name
of the holder or such designee, and if such Warrant Exchange shall not have been
for all Warrant Shares, a new Warrant, registered in the name of the holder, of
like tenor to this Warrant for the number of shares still subject to this
Warrant following such Warrant Exchange.

                                  Exhibit B-22
<PAGE>   48
                                                                    CONFIDENTIAL
         4.       ADJUSTMENT OF WARRANT PRICE.

                  (a) The Warrant Price shall be subject to adjustment from time
to time as follows:

                           (i) If the Corporation shall at any time or from time
         to time during the Exercise Period, issue any shares of Common Stock
         (or be deemed to have issued any shares of Common Stock as provided
         herein), other than Excluded Securities (as defined in Section 4(a)(
         v)) without consideration or for a consideration per share less than
         the Fair Market Value (determined in accordance with the formula set
         forth in Section 3) of a share of Common Stock in effect immediately
         prior to the issuance of Common Stock, the Warrant Price in effect
         immediately prior to such issuance shall forthwith be lowered to a
         price equal to the quotient obtained by dividing: (x) an amount equal
         to the sum of (1) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately prior to such
         issuance multiplied by the Warrant Price in effect immediately prior to
         such issuance, plus (2) the consideration received by the Corporation
         upon such issuance, by (y) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately after the issuance
         or deemed issuance of such Common Stock.

                           (ii) For the purposes of any adjustment of the
         Warrant Price pursuant to Section 4(a)(i), the following provisions
         shall be applicable:

                                    (A) In the case of the issuance of
         Common Stock for cash, the consideration received by the Corporation
         from such issuance shall be deemed to be the amount of cash paid
         therefor before deducting therefrom any discounts, commissions or other
         expenses allowed, paid or incurred by the Corporation for any
         underwriting or otherwise in connection with the issuance and sale
         thereof.

                                    (B) In the case of the issuance of Common
         Stock for a consideration in whole or in part other than cash, the
         consideration other than cash shall be deemed to be the fair market
         value thereof as determined in good faith by the Board of Directors of
         the Corporation, irrespective of any accounting treatment.

                                    (C) In the case of the issuance of Common
         Stock without consideration, the consideration shall be deemed to be
         $0.01 per share.

                                    (D) In the case of the issuance of (x)
         options to purchase or rights to subscribe for Common Stock, (y)
         securities by their terms convertible into or exchangeable for Common
         Stock or (z) options to purchase rights to subscribe for such
         convertible or exchangeable securities:

                                  Exhibit B-23
<PAGE>   49
                                                                    CONFIDENTIAL

                                            (1)      the aggregate maximum
                  number of shares of Common Stock deliverable upon exercise of
                  such options to purchase or rights to subscribe for Common
                  Stock shall be deemed to have been issued at the time such
                  options or rights were issued and for a consideration equal to
                  the consideration (determined in the manner provided in
                  subdivisions (A), (B) and (C) above), if any, received by the
                  Corporation upon the issuance of such options or rights plus
                  the minimum purchase price provided in such options or rights
                  for the Common Stock covered thereby;

                                            (2)      the aggregate maximum
                  number of shares of Common Stock deliverable upon conversion
                  of or in exchange for any such convertible or exchangeable
                  securities or upon the exercise of options to purchase or
                  rights to subscribe for such convertible or exchangeable
                  securities and subsequent conversion or exchange thereof shall
                  be deemed to have been issued at the time such securities were
                  issued or such options or rights were issued and for a
                  consideration equal to the consideration received by the
                  Corporation for any such securities and related options or
                  rights (excluding any cash received on account of accrued
                  interest or accrued dividends), plus the additional
                  consideration, if any, to be received by the Corporation upon
                  the conversion or exchange of such securities or the exercise
                  of any related options or rights (the consideration in each
                  case to be determined in the manner provided in subdivisions
                  (A), (B) and (C) above);

                                            (3)      on any change in the number
                  of shares or exercise price of Common Stock deliverable upon
                  exercise of any such options or rights or conversions of or
                  exchanges for such securities, other than a change resulting
                  from the antidilution provisions thereof, the applicable
                  Warrant Price shall forthwith be readjusted to such Warrant
                  Price as would have resulted had the adjustment made upon the
                  issuance of such options, rights or securities not converted
                  prior to such change (or options or rights related to such
                  securities not converted prior to such change) been made upon
                  the basis of such change; provided, however, that such
                  readjustment shall not result in a Warrant Price that is
                  greater than the original Warrant Price; and

                                            (4)      on the expiration of all
                  such options or rights, the termination of all such rights to
                  convert or exchange or the expiration of all options or rights
                  related to such convertible or exchangeable securities in each
                  case having been issued by the Corporation for the same
                  consideration (as determined pursuant to subdivision (A), (B)
                  and (C) above), the applicable Warrant Price shall forthwith
                  be readjusted to such Warrant Price as would have resulted had
                  the adjustment made upon the issuance of such options, rights,
                  securities or options or rights related to such securities not
                  been made; provided, however, that such readjustment shall not
                  result in a Warrant Price that is greater that the original
                  Warrant Price.

                                  Exhibit B-24
<PAGE>   50
                                                                    CONFIDENTIAL

                           (iii) If, at any time during the Exercise Period, the
     number of shares of Common Stock outstanding is increased by a stock
     dividend payable in shares of Common Stock or by a subdivision or split-up
     of shares of Common Stock, then, following the record date fixed for the
     determination of holders of Common Stock entitled to receive such stock
     dividend, subdivision or split-up, the Warrant Price shall be appropriately
     decreased and the number of shares of Common Stock issuable upon exercise
     of this Warrant shall be appropriately increased, in each case in
     proportion to such increase in outstanding shares.

                           (iv) If, at any time during the Exercise Period, the
     number of shares of Common Stock outstanding is decreased by a combination
     of the outstanding shares of Common Stock, then, following the record date
     for such combination, the Warrant Price shall be appropriately increased
     and the number of shares of Common Stock issuable upon exercise of this
     Warrant shall be appropriately decreased, in each case, in proportion to
     such decrease in outstanding shares.

                           (v) For purposes of Section 4(a), the term "Excluded
     Securities" shall mean (A) shares of Common Stock (subject to equitable
     adjustment for stock splits, dividends, combinations and like occurrences)
     issued to officers, employees or directors of Corporation, pursuant to any
     agreement, plan or arrangement approved by the Board of Directors of the
     Corporation, or options to purchase or rights to subscribe for such Common
     Stock, or securities by their terms convertible into or exchangeable for
     such Common Stock, or options to purchase or rights to subscribe for such
     convertible or exchangeable securities pursuant to such agreement, plan or
     arrangement; (B) shares of Common Stock issued as a stock dividend or upon
     any stock split or other subdivision or combination of shares of Common
     Stock; (C) securities issued pursuant to the acquisition of another
     corporation or other entity by the Corporation by merger or purchase of
     stock or purchase of all or substantially all of such other corporation's
     or other entity's assets whereby the Corporation owns not less than a
     majority of the voting power of such other corporation or other entity
     following such acquisition or purchase; or (D) securities issued in an
     underwritten public offering approved by the Board of Directors.

                           (vi) All calculations under this Section 4 shall be
     made to the nearest one tenth (1/10) of a cent or to the nearest one tenth
     (1/10) of a share, as the case may be.

                  (b) Whenever the Warrant Price shall be adjusted as provided
in this Section 4 the Corporation shall forthwith file, at the office of the
Corporation or any transfer agent designated by the Corporation for the Common
Stock, a statement, signed by its chief financial officer, showing in detail the
facts requiring such adjustment and the adjusted Warrant Price. The Corporation
shall also cause a copy of such statement to be sent by first-class certified
mail, return receipt requested, postage prepaid, to each holder of a Warrant at
his or its address appearing on the Corporation's records. Where

                                  Exhibit B-25
<PAGE>   51
                                                                    CONFIDENTIAL

appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions set forth immediately below.

                  (c) In case the Corporation shall make or issue, or shall fix
a record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in assets (excluding cash dividends paid or payable solely out of
retained earnings but including shares of any subsidiary), then, in each such
case, the holder of this Warrant on exercise hereof at any time after the
consummation, effective date or record date of such dividend or other
distribution, shall receive, in addition to the Warrant Shares (or such other
stock or securities) issuable on such exercise prior to such date, and without
the payment of additional consideration therefor, the securities or such other
assets of the Corporation to which such holder would have been entitled upon
such date if such holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period giving effect to all adjustments called
for by this Section 4.

                  (d) In the event the Corporation shall propose to take any
action of the types described in Section 4(a)(iii) or (iv) or Section 11, the
Corporation shall give notice to each holder of a Warrant in the manner set
forth herein, which notice shall specify the record date, if any, with respect
to any such action and the date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Warrant Price then in
effect and the number, kind or class of shares or other securities or property
which shall be delivered or purchasable upon the occurrence of such action or
deliverable upon exercise of this Warrant. In the case of any action which would
require the fixing of a record date, such notice shall be given at least 10 days
prior to the date so fixed, and in case of all other action, such notice shall
be given at least 20 days prior to the taking of such proposed action. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of any such action.

         5. ADJUSTMENT OF WARRANT SHARES. Upon each adjustment of the Warrant
Price as provided in Section 4, the holder hereof shall thereafter be entitled
to subscribe for and purchase, at the Warrant Price resulting from such
adjustment, the number of Warrant Shares equal to the product of (i) the number
of Warrant Shares existing prior to such adjustment and (ii) the quotient
obtained by dividing (A) the Warrant Price existing prior to such adjustment by
(B) the new Warrant Price resulting from such adjustment. No fractional shares
of Common Stock shall be issued as a result of any such adjustment, and any
fractional shares resulting from the computations pursuant to this paragraph
shall be eliminated without consideration.

         6. COVENANTS AS TO COMMON STOCK. The Corporation covenants and agrees
that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant, will, upon issuance, be validly issued,
fully paid and non-

                                  Exhibit B-26
<PAGE>   52
                                                                    CONFIDENTIAL

assessable and free from all taxes, liens and charges with respect to the
issuance thereof. The Corporation further covenants and agrees that the
Corporation will from time to time take all such action as may be requisite to
assure that the stated or par value per share of Common Stock is at all times
equal to or less than the then effective Warrant Price per share of Common Stock
issuable upon exercise of this Warrant. The Corporation further covenants and
agrees that the Corporation will at all times have authorized and reserved, free
from preemptive rights, a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant. The Corporation
further covenants and agrees that if any shares of capital stock to be reserved
for the purpose of the issuance of shares of Common Stock upon the exercise of
this Warrant require registration with or approval of any governmental authority
under any Federal or state law before such shares may be validly issued or
delivered upon exercise, then the Corporation will in good faith and
expeditiously as possible endeavor to secure such registration or approval, as
the case may be. If and so long as the Common Stock issuable upon the exercise
of the rights represented by this Warrant is listed on any national securities
exchange, the Corporation will, if permitted by the rules of such exchange, list
and keep listed on such exchange, upon official notice of issuance, all shares
of such capital stock.

         7. NO SHAREHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Corporation.

         8. RESTRICTIONS ON TRANSFER. The holder of this Warrant acknowledges
that neither this Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") and the holder of this
Warrant agrees that no sale, transfer, assignment, hypothecation or other
disposition of this Warrant or the Warrant Shares shall be made in the absence
of (a) current registration statement under the Securities Act as to this
Warrant or the Warrant Shares and the registration or qualification of this
Warrant or the Warrant Shares under any applicable state securities laws is then
in effect or (ii) an opinion of counsel reasonably satisfactory to the
Corporation to the effect that such registration or qualification is not
required. Each certificate or other instrument for Warrant Shares issued upon
exercise of this Warrant shall, if required under the Securities Act or the
rules promulgated thereunder, be imprinted with a legend substantially to the
foregoing effect.

         9. INVESTOR RIGHTS AGREEMENT. Anything contained herein to the contrary
notwithstanding, the Warrant Shares shall be entitled to all rights and benefits
accorded thereto in that certain Fourth Amended and Restated Investors' Rights
Agreement, dated as of February 3, 2000, by and among the Corporation and the
Investors (as defined therein).

         10. TRANSFER OF WARRANT; AMENDMENT. Subject to the restriction set
forth in Section 8, this Warrant and all rights hereunder are transferable, in
whole, or in part, at the agency or office of the Corporation referred to in
Section 2, by the holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed, in blank, shall be deemed negotiable, and, when so

                                  Exhibit B-27
<PAGE>   53
                                                                    CONFIDENTIAL

endorsed the holder hereof may be treated by the Corporation and all other
persons dealing with this Warrant as the absolute owner hereof for any purposes
and as the person entitled to exercise the rights represented by this Warrant,
or to the transfer hereof on the books of the Corporation, any notice to the
contrary notwithstanding; but until each transfer on such books, the Corporation
may treat the registered holder hereof as the owner hereof for all purposes.

         11. REORGANIZATIONS, ETC. In case, at any time during the Exercise
Period, of any capital reorganization, of any reclassification of the stock of
the Corporation (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a consolidation
or merger in which the Corporation is the continuing operation and which does
not result in any change in the Common Stock) or of the sale of all or
substantially all the properties and assets of the Corporation as an entirety to
any other corporation, this Warrant shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which such holder
would have been entitled if he had held the Common Stock issuable upon the
exercise hereof immediately prior to such reorganization, reclassification,
consolidation, merger or sale. In any such reorganization or other action or
transaction described above, appropriate provision shall be made with respect to
the rights and interests of the holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Warrant Price and of the number of shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Corporation will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation or entity (if other than the Corporation) resulting from
such transaction or the corporation or entity purchasing such assets shall
assume by written instrument, executed and mailed or delivered to the registered
holder hereof at the last address of such holder appearing on the books of the
Corporation, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.

         12. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Corporation, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.

                                  Exhibit B-28
<PAGE>   54
                                                                    CONFIDENTIAL

         13. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

         14. NOTICES. All notices, advises and communications to be given or
otherwise made to any party to this Agreement shall be deemed to be sufficient
if contained in a written instrument delivered in person or by telecopier or
duly sent by first class registered or certified mail, return receipt requested,
postage prepaid, or by overnight courier, or by electronic mail, with a copy
thereof to be sent by mail (as aforesaid) within 24 hours of such electronic
mail, addressed to such party at the address set forth below or at such other
address as may hereafter be designated in writing by the addressee to the
addresser listing all parties:

                  If to the Corporation, to:

                      VarsityBooks.com Inc.
                      2020 K St., NW
                      6th Floor
                      Washington, DC 20006
                      Attention:  Richard Hozik
                      Telecopier:  202-332-5498
                      Electronic mail:  rich@varsitybooks.com

                      With a copy to:

                      Shaw Pittman
                      1676 International Drive
                      McLean, Virginia 22102-4835
                      Attention: Andrew M. Tucker
                      Telecopier:  703-790-7901
                      Electronic mail: andy.tucker@shawpittman.com

              and

                  If to Sallie Mae as follows:

                      Sallie Mae, Inc.
                      11600 Sallie Mae Drive
                      Reston, V.A. 20193
                      Attention:  General Counsel
                      Telecopier:
                      Electronic mail:

Or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or

                                  Exhibit B-29
<PAGE>   55
                                                                    CONFIDENTIAL

communication shall be deemed to have been delivered and received
(i) in the case of personal delivery or delivery by telecopier, on the date of
such deliver, (ii) in the case of nationally-recognized overnight courier, on
the next business day after the date when sent and (ii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted. As used in this Section 14, "business day" shall
mean any day other than a day on which banking institutions in the District of
Columbia are legally closed for business.

         15. BINDING EFFECT ON SUCCESSORS; SURVIVAL. This Warrant shall be
binding upon any corporation succeeding the Corporation by merger, consolidation
or acquisition of all or substantially all of the Corporation's assets. All of
the obligations of the Corporation relating to the Common Stock issuable upon
the exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Corporation shall inure to
the benefit of the successors and assigns of Sallie Mae.

         16. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.

         17. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Corporation shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then Fair Market Value of one Warrant Share.

                                      * * *

                                  Exhibit B-30
<PAGE>   56
                                                                    CONFIDENTIAL

         IN WITNESS WHEREOF, the undersigned have caused this Warrant and
Warrant Agreement to be executed by their duly authorized officers on the date
first above written.

                                           VARSITYBOOKS.COM INC.

                                           By: /s/ VARSITYBOOKS.COM INC.
                                               ---------------------------------
                                               Name:  Eric J. Kuhn
                                               Title:    Chief Executive Officer

ATTEST: ___________________________
             SECRETARY

                                           SALLIE MAE, INC.

                                           By: /s/ SALLIE MAE, INC.
                                               ---------------------------------
                                               Name:
                                               Title:

                                  Exhibit B-31
<PAGE>   57
                                                                    CONFIDENTIAL

                              FORM OF SUBSCRIPTION

                     [To be signed upon exercise of Warrant]

                  The undersigned, the holder of the Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _________ shares of Common Stock, par value $0.0001, of
VarsityBooks.com Inc., and herewith makes payment of $_________ therefor, and
requests that the certificates for such shares be issued on _____________ in the
name of and delivered to, ___________, whose address is
_________________________________________________.

Dated:_____________
                                   ---------------------------------
                                   (Signature)

                                   ---------------------------------
                                    (Address)

                                  Exhibit B-32
<PAGE>   58
                                                                    CONFIDENTIAL

                               NOTICE OF EXCHANGE

                        (To be executed by the holder in
                         order to exchange the Warrant.)

                  The undersigned hereby irrevocably elects to exchange this
Warrant into __________ shares (the foregoing number constituting the number of
Warrant Shares to be issued pursuant to Section 3 of this Warrant) of Common
Stock, par value $0.0001, of Varsitybooks.com Inc., minus any shares to be
deducted from the foregoing number in accordance with the terms of this Warrant,
according to the conditions thereof. The undersigned desires to consummate such
exchange on ________________. and requests that the certificates be issued in
the name of delivered to _____________ whose address is __________________.

Dated:

                                 _____________________________
                                 Name of Holder:

                                 By:__________________________

                                  Exhibit B-33
<PAGE>   59

                               FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Warrant]

                  For value received, the undersigned hereby sells, assigns and
transfers unto _________ the right represented by the Warrant to purchase
_______ shares of Common Stock, par value $0.0001, of Varsitybooks.com Inc., to
which the Warrant relates, and appoints [Name of Attorney] to transfer such
right on the books of [ISSUER], with full power of substitution in the premises.

Dated:_____________

                                   ______________________________
                                   (Signature)

Signed in the presence of:
______________________________

                                  Exhibit B-34

<PAGE>   60

                                                                    Confidential

                                    EXHIBIT A

                         NUMBER OF SHARES FOR WHICH THE
                          WARRANT SHALL BE EXERCISABLE:

Up to a maximum 132,185 Warrant Shares (subject to adjustment in accordance with
the terms of this Warrant) shall vest as follows:

Number of Warrant Shares      Vesting

(A)33,047                     Shall vest and become exercisable upon the
                              production of * Out-of-School Sallie Mae
                              Customer Transactions for the Corporation on or
                              before January 31, 2001; provided, however, that
                              if the * threshold is not met as of January
                              31, 2001, no Warrant Shares shall vest pursuant to
                              this Exhibit A, Section (A).

(B)33,047                     Shall vest and become exercisable upon the
                              production of * In-School Sallie Mae Customer
                              Transactions for the Corporation on or before
                              January 31, 2001; provided, however, that if the
                              * threshold is not attained as of January 31,
                              2001, no Warrant Shares shall vest pursuant to
                              this Exhibit A, Section (B).

(C)66,093                     Shall vest and become exercisable if Sallie Mae
                              does not meet the performance requirements set
                              forth in Exhibit A, Section (A) by January 31,
                              2001, and it produces * Out-of-School Sallie
                              Mae Customer Transactions for the Corporation on
                              or before March 31, 2002; provided, however, that
                              if Sallie Mae does not achieve the *
                              threshold, a number of Warrant Shares shall vest
                              equal to the total number of Out-of-School
                              Customer Transactions provided by Sallie Mae
                              divided by * multiplied by the number of
                              Warrant Shares that may vest pursuant to this
                              Exhibit A, Section (C).

(D)66,092                     Shall vest and become exercisable if Sallie Mae
                              does not meet the performance requirements set
                              forth in Exhibit A, Section (B) by January 31,
                              2001, and it produces * In-School Sallie Mae
                              Customer Transactions for the Corporation on or
                              before March 31, 2002; provided, however, that if
                              Sallie Mae does not achieve the *

                                  Exhibit B-35
<PAGE>   61
                                                                    Confidential

                        threshold by March 31, 2002, a number of Warrant Shares
                        shall vest equal to the total number of In-School
                        Customer Transactions provided by Sallie Mae divided by
                        * multiplied by the number of Warrant Shares that
                        may vest pursuant to this Exhibit A, Section (D).

Notwithstanding the preceding chart, should Sallie Mae elect to exercise its
Right to Cancel in accordance with Section 1(a) hereof, all of the Warrant
Shares shall immediately divest and be cancelled.

                                  Exhibit B-36
<PAGE>   62
                                                                    Confidential

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

                              VARSITYBOOKS.COM INC.

                           STOCK SUBSCRIPTION WARRANT

                                                                February 3, 2000

         1.       GENERAL.

                  (a) THIS CERTIFIES that, for value received, SALLIE MAE, INC.
("Sallie Mae"), or assigns, is entitled to subscribe for and purchase from
VARSITYBOOKS.COM INC., a Delaware corporation (the "Corporation"), at any time
or from time to time commencing as set forth in Section 1(b) and ending on the
seventh (7th) anniversary of the date hereof (the "Exercise Period"), on the
terms and subject to the provisions hereinafter set forth, up to 132,185 shares
(subject to adjustment as provided herein) (the "Warrant Shares") of fully paid
and non-assessable shares of Common Stock, $0.0001 par value, of the Corporation
(the "Common Stock") as shall be determined in accordance with the provisions of
Section 1(b) hereof, at a price per share (the "Warrant Price") equal to the per
share initial public offering price of the IPO (as hereinafter defined);
provided that if a Corporate Transaction (as defined below) occurs prior to the
IPO Date and prior to an Equity Offering (as defined below), the Warrant Price
shall be equal to the Fully-Diluted Per Share Valuation established in the
Corporate Transaction (as defined below). The Corporation represents, warrants
and covenants that, as of the date hereof, the maximum Warrant Shares issuable
hereunder shall constitute three quarters of one percent (.75%) of the number of
shares of voting capital stock of the Corporation that will be outstanding
immediately prior to the closing of the IPO (as hereinafter defined) after
giving effect to the exercise, exchange or conversion of all outstanding
securities, rights, options, warrants (including this Warrant), calls,
commitments or agreements of any nature or character (whether debt or equity)
that are, directly or indirectly, exercisable or exchangeable for, or
convertible into or otherwise represent the right to purchase or otherwise
receive, directly or indirectly, any such capital stock or other arrangement to
acquire at any time or under any circumstance, voting capital stock of the
Corporation or any such other securities and assuming that all

                                  Exhibit B-37
<PAGE>   63
                                                                    Confidential

stock options and/or shares of capital stock reserved for grant or issuance to
officers, directors, employees and consultants under all agreements, plans or
arrangements theretofore approved by the Board of Directors of the Corporation
have been so granted or issued (as the case may be) (collectively, the
"Fully-Diluted Shares"). In the event that the number of Warrant Shares listed
above does not constitute three quarters of one percent (.75%) of the
Fully-Diluted Shares existing immediately prior to the closing of the IPO, the
number of Warrant Shares initially issuable hereunder (the "Initial Number")
shall be adjusted accordingly to cause the Initial Number to constitute three
quarters of one percent (.75%) of the Fully-Diluted Shares existing immediately
prior to the closing of the IPO. As used in this Agreement, the term "IPO Date"
shall mean the date on which the Corporation closes the initial public offering
of its Common Stock (the "IPO"). In the event the Corporation consummates an
equity offering resulting in net proceeds to the Corporation in excess of ten
million dollars ($10,000,000) prior to the IPO Date (the "EQUITY OFFERING"), the
exercise price shall be equal to the lesser of $10.00 per share or the per share
value of the Common Stock in the Equity Offering. In the event of a Corporate
Transaction prior to the earlier of (a) the IPO Date or (b) the closing of an
Equity Offering, in lieu of exercising this Warrant, Sallie Mae may cancel this
Warrant by providing written notice of its intent to do so to the Corporation
(the "RIGHT TO CANCEL").

         This Warrant is being issued pursuant to a Product Promotion Agreement
dated as of the date hereof (the "Agreement"), between the Corporation and
Sallie Mae, Inc. All terms used but not defined herein shall have the meanings
set forth in the Agreement.

                  (b) This Warrant shall become exercisable as to that number of
Warrant Shares, and at such times, as are determined in accordance with Exhibit
A attached hereto; provided, however, that this Warrant shall become exercisable
as to all unvested Warrant Shares immediately upon the occurrence of a
Stipulated Event, unless Sallie Mae elects to exercise its Right to Cancel this
Warrant in accordance with Section 1(a) above. As used herein, the term
"Stipulated Event" shall mean (a) a Corporate Transaction (as hereinafter
defined) or (b) a termination of the Agreement that results from a material
breach by the Corporation of the Agreement. "Corporate Transaction" means (A)
any consolidation or merger of the Corporation with or into any other
corporation or other entity, other than any merger or consolidation resulting in
the holders of the capital stock of the Corporation entitled to vote for the
election of directors holding a majority of the capital stock of the surviving
or resulting corporation or other entity entitled to vote for the election of
directors, (B) any person or entity (including any affiliates thereof) becoming
the holder of a majority of the capital stock of the Corporation entitled to
vote for the election of directors, or (C) any sale or other disposition by the
Corporation of all or substantially all of its assets or capital stock.
"FULLY-DILUTED PER SHARE VALUATION ESTABLISHED IN A CORPORATE TRANSACTION" means
the value ascribed to the Corporation in the Corporate Transaction divided by
the number of Fully-Diluted shares.

         2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part, at any time or from time to
time during the Exercise Period, by the surrender of this Warrant (properly
endorsed) at the

                                  Exhibit B-38
<PAGE>   64
                                                                    Confidential

office of the Corporation at 2020 K St., NW, 6th Floor, Washington, DC 20006, or
at such other agency or office of the Corporation in the United States of
America as it may designate by notice in writing to the holder hereof at the
address of such holder appearing on the books of the Corporation, and by payment
(either in cash, by check or wire transfer, by cancellation of indebtedness
and/or in shares of capital stock of the Corporation valued at Fair Market Value
(as hereinafter defined) on the date of such exercise) to the Corporation of the
Warrant Price for each Warrant Share being purchased. In the event of the
exercise of the rights represented by this Warrant, a certificate or
certificates for the Warrant Shares so purchased, registered in the name of the
holder, and if this Warrant shall not have been exercised for all of the Warrant
Shares, a new Warrant, registered in the name of the holder hereof, of like
tenor to this Warrant, shall be delivered to the holder hereof within a
reasonable time, not exceeding six business days, after the rights represented
by this Warrant shall have been so exercised. The person in whose name any
certificate for Warrant Shares is issued upon exercise of this Warrant shall for
all purposes be deemed to have become the holder of record of such shares on the
date on which the Warrant was surrendered and payment of the Warrant Price and
any applicable taxes was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Corporation are closed, such person shall
be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

         3.       EXCHANGE OF WARRANT.

                  (a) In addition to, and independent of, the rights of the
holder of this Warrant set forth in Section 2 hereof, the holder hereof may at
any time or from time to time elect to receive, without the payment by the
holder of any additional consideration, that number of Warrant Shares determined
as hereinafter provided in this Section 3 by the surrender of this Warrant or
any portion hereof to the Corporation, accompanied by an executed Notice of
Exchange in substantially the form thereof attached hereto (the "Net Issue
Election"). Thereupon, the Corporation shall issue to the holder hereof such
number of fully paid and nonassessable Warrant Shares as is computed using the
following formula:

                                   X = Y (A-B)
                                   -----------
                                        A

where X =                     the number of Warrant Shares to be issued to
                              the holder pursuant to this Section 3.

      Y=                      the number of Warrant Shares covered by this
                              Warrant in respect of which the Net Issue Election
                              is made pursuant to this Section 3.

      A=                      the Fair Market Value (as hereinafter defined)
                              of one Warrant Share determined at the time the
                              Net Issue Election is made pursuant to this
                              Section 3 (the "Determination Date").

                                  Exhibit B-39
<PAGE>   65
                                                                    Confidential

      B=                      the Warrant Price in effect under this Warrant
                              at the Determination Date.

         All references in this Warrant to an "exercise" of the Warrant shall
include an exchange pursuant to this Section 3.

                  (b) For purposes of the above calculation, "Fair Market Value"
of one Warrant Share as of the Determination Date shall mean:

                           (i) if the Common Stock of the Corporation is not
         then traded on a national securities exchange, the average of the
         closing prices quoted on the National Association of Securities
         Dealers, Inc. Automated Quotation National Market System, if
         applicable, or the average of the last bid and asked prices of the
         Common Stock quoted in the over-the-counter-market or (B) if the Common
         Stock is then traded on a national securities exchange, the average of
         the high and low prices of the Common Stock listed on the principal
         national securities exchange on which the Common Stock is so traded, in
         each case for the twenty (20) trading days immediately preceding the
         Determination Date or, if such date is not a business day on which
         shares are traded, the next immediately preceding trading day;

                           (ii) in the event of a Warrant Exchange in connection
         with a Corporate Transaction, the value per share of Common Stock
         received or receivable by each holder thereof (assuming for purposes of
         this determination, in the case of a sale of assets, the Corporation is
         liquidated immediately following such sale and the consideration paid
         to the Corporation is immediately distributed to its stockholders); and

                           (iii) in all other circumstances, the fair market
         value per share of Common Stock shall be the value thereof, as agreed
         upon by the Corporation and the holder of this Warrant, provided,
         however, that if the Corporation and the holder cannot agree on such
         value, such value shall be determined by an independent investment
         banking or valuation firm experienced in valuing businesses such as the
         Corporation and jointly selected in good faith by the Corporation and
         the holder. Fees and expenses of the valuation firm shall be paid for
         by the Corporation.

The closing of any Warrant Exchange shall take place at the offices of the
Corporation on the date specified in the Notice of Exchange (the "Exchange
Date"), which shall be not less than three and not more than 30 days after the
delivery of such Notice. At such closing, the Corporation shall issue and
deliver to the holder or its designee a certificate or certificates for the
Warrant Shares to be issued upon such Warrant Exchange, registered in the name
of the holder or such designee, and if such Warrant Exchange shall not have been
for all Warrant Shares, a new Warrant, registered in the name of the holder, of
like tenor to this Warrant for the number of shares still subject to this
Warrant following such Warrant Exchange.

                                  Exhibit B-40
<PAGE>   66
                                                                    Confidential

         4.       ADJUSTMENT OF WARRANT PRICE.

                  (a) The Warrant Price shall be subject to adjustment from time
to time as follows:

                           (i) If the Corporation shall at any time or from time
         to time during the Exercise Period, issue any shares of Common Stock
         (or be deemed to have issued any shares of Common Stock as provided
         herein), other than Excluded Securities (as defined in Section 4(a)
         (v)) without consideration or for a consideration per share less than
         the Fair Market Value (determined in accordance with the formula set
         forth in Section 3) of a share of Common Stock in effect immediately
         prior to the issuance of Common Stock, the Warrant Price in effect
         immediately prior to such issuance shall forthwith be lowered to a
         price equal to the quotient obtained by dividing: (x) an amount equal
         to the sum of (1) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately prior to such
         issuance multiplied by the Warrant Price in effect immediately prior to
         such issuance, plus (2) the consideration received by the Corporation
         upon such issuance, by (y) the total number of shares of Common Stock
         outstanding (including any shares of Common Stock deemed to have been
         issued pursuant to Section 4(a)(ii)(D)) immediately after the issuance
         or deemed issuance of such Common Stock.

                           (ii) For the purposes of any adjustment of the
         Warrant Price pursuant to Section 4(a)(i), the following provisions
         shall be applicable:

                                (A) In the case of the issuance of Common Stock
         for cash, the consideration received by the Corporation from such
         issuance shall be deemed to be the amount of cash paid therefor before
         deducting therefrom any discounts, commissions or other expenses
         allowed, paid or incurred by the Corporation for any underwriting or
         otherwise in connection with the issuance and sale thereof.

                                (B) In the case of the issuance of Common Stock
         for a consideration in whole or in part other than cash, the
         consideration other than cash shall be deemed to be the fair market
         value thereof as determined in good faith by the Board of Directors of
         the Corporation, irrespective of any accounting treatment.

                                (C) In the case of the issuance of Common Stock
         without consideration, the consideration shall be deemed to be $0.01
         per share.

                                (D) In the case of the issuance of (x) options
         to purchase or rights to subscribe for Common Stock, (y) securities by
         their terms convertible into or exchangeable for Common Stock or (z)
         options to purchase rights to subscribe for such convertible or
         exchangeable securities:

                                  Exhibit B-41

<PAGE>   67
                                                                    Confidential

                                (1) the aggregate maximum number of shares of
         Common Stock deliverable upon exercise of such options to purchase or
         rights to subscribe for Common Stock shall be deemed to have been
         issued at the time such options or rights were issued and for a
         consideration equal to the consideration (determined in the manner
         provided in subdivisions (A), (B) and (C) above), if any, received by
         the Corporation upon the issuance of such options or rights plus the
         minimum purchase price provided in such options or rights for the
         Common Stock covered thereby;

                                (2) the aggregate maximum number of shares of
         Common Stock deliverable upon conversion of or in exchange for any such
         convertible or exchangeable securities or upon the exercise of options
         to purchase or rights to subscribe for such convertible or exchangeable
         securities and subsequent conversion or exchange thereof shall be
         deemed to have been issued at the time such securities were issued or
         such options or rights were issued and for a consideration equal to the
         consideration received by the Corporation for any such securities and
         related options or rights (excluding any cash received on account of
         accrued interest or accrued dividends), plus the additional
         consideration, if any, to be received by the Corporation upon the
         conversion or exchange of such securities or the exercise of any
         related options or rights (the consideration in each case to be
         determined in the manner provided in subdivisions (A), (B) and (C)
         above);

                                (3) on any change in the number of shares or
         exercise price of Common Stock deliverable upon exercise of any such
         options or rights or conversions of or exchanges for such securities,
         other than a change resulting from the antidilution provisions thereof,
         the applicable Warrant Price shall forthwith be readjusted to such
         Warrant Price as would have resulted had the adjustment made upon the
         issuance of such options, rights or securities not converted prior to
         such change (or options or rights related to such securities not
         converted prior to such change) been made upon the basis of such
         change; provided, however, that such readjustment shall not result in a
         Warrant Price that is greater than the original Warrant Price; and

                                (4) on the expiration of all such options or
         rights, the termination of all such rights to convert or exchange or
         the expiration of all options or rights related to such convertible or
         exchangeable securities in each case having been issued by the
         Corporation for the same consideration (as determined pursuant to
         subdivision (A), (B) and (C) above), the applicable Warrant Price shall
         forthwith be readjusted to such Warrant Price as would have resulted
         had the adjustment made upon the issuance of such options, rights,
         securities or options or rights related to such securities not been
         made; provided, however, that such readjustment shall not result in a
         Warrant Price that is greater that the original Warrant Price.

                                  Exhibit B-42

<PAGE>   68
                                  Confidential

                           (iii) If, at any time during the Exercise Period, the
                  number of shares of Common Stock outstanding is increased by a
                  stock dividend payable in shares of Common Stock or by a
                  subdivision or split-up of shares of Common Stock, then,
                  following the record date fixed for the determination of
                  holders of Common Stock entitled to receive such stock
                  dividend, subdivision or split-up, the Warrant Price shall be
                  appropriately decreased and the number of shares of Common
                  Stock issuable upon exercise of this Warrant shall be
                  appropriately increased, in each case in proportion to such
                  increase in outstanding shares.

                           (iv) If, at any time during the Exercise Period, the
                  number of shares of Common Stock outstanding is decreased by a
                  combination of the outstanding shares of Common Stock, then,
                  following the record date for such combination, the Warrant
                  Price shall be appropriately increased and the number of
                  shares of Common Stock issuable upon exercise of this Warrant
                  shall be appropriately decreased, in each case, in proportion
                  to such decrease in outstanding shares.

                           (v) For purposes of Section 4(a), the term "Excluded
                  Securities" shall mean (A) shares of Common Stock (subject to
                  equitable adjustment for stock splits, dividends, combinations
                  and like occurrences) issued to officers, employees or
                  directors of Corporation, pursuant to any agreement, plan or
                  arrangement approved by the Board of Directors of the
                  Corporation, or options to purchase or rights to subscribe for
                  such Common Stock, or securities by their terms convertible
                  into or exchangeable for such Common Stock, or options to
                  purchase or rights to subscribe for such convertible or
                  exchangeable securities pursuant to such agreement, plan or
                  arrangement; (B) shares of Common Stock issued as a stock
                  dividend or upon any stock split or other subdivision or
                  combination of shares of Common Stock; (C) securities issued
                  pursuant to the acquisition of another corporation or other
                  entity by the Corporation by merger or purchase of stock or
                  purchase of all or substantially all of such other
                  corporation's or other entity's assets whereby the Corporation
                  owns not less than a majority of the voting power of such
                  other corporation or other entity following such acquisition
                  or purchase; or (D) securities issued in an underwritten
                  public offering approved by the Board of Directors.

                           (vi) All calculations under this Section 4 shall be
                  made to the nearest one tenth (1/10) of a cent or to the
                  nearest one tenth (1/10) of a share, as the case may be.

                                (b) Whenever the Warrant Price shall be adjusted
         as provided in this Section 4 the Corporation shall forthwith file, at
         the office of the Corporation or any transfer agent designated by the
         Corporation for the Common Stock, a statement, signed by its chief
         financial officer, showing in detail the facts requiring such
         adjustment and the adjusted Warrant Price. The Corporation shall also
         cause a copy of such statement to be sent by first-class certified
         mail, return receipt requested, postage prepaid, to each holder of a
         Warrant at his or its address appearing on the Corporation's records.
         Where

                                  Exhibit B-43
<PAGE>   69

appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions set forth immediately below.

                  (c) In case the Corporation shall make or issue, or shall fix
a record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in assets (excluding cash dividends paid or payable solely out of
retained earnings but including shares of any subsidiary), then, in each such
case, the holder of this Warrant on exercise hereof at any time after the
consummation, effective date or record date of such dividend or other
distribution, shall receive, in addition to the Warrant Shares (or such other
stock or securities) issuable on such exercise prior to such date, and without
the payment of additional consideration therefor, the securities or such other
assets of the Corporation to which such holder would have been entitled upon
such date if such holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period giving effect to all adjustments called
for by this Section 4.

                  (d) In the event the Corporation shall propose to take any
action of the types described in Section 4(a)(iii) or (iv) or Section 11, the
Corporation shall give notice to each holder of a Warrant in the manner set
forth herein, which notice shall specify the record date, if any, with respect
to any such action and the date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Warrant Price then in
effect and the number, kind or class of shares or other securities or property
which shall be delivered or purchasable upon the occurrence of such action or
deliverable upon exercise of this Warrant. In the case of any action which would
require the fixing of a record date, such notice shall be given at least 10 days
prior to the date so fixed, and in case of all other action, such notice shall
be given at least 20 days prior to the taking of such proposed action. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of any such action.

         5. ADJUSTMENT OF WARRANT SHARES. Upon each adjustment of the Warrant
Price as provided in Section 4, the holder hereof shall thereafter be entitled
to subscribe for and purchase, at the Warrant Price resulting from such
adjustment, the number of Warrant Shares equal to the product of (i) the number
of Warrant Shares existing prior to such adjustment and (ii) the quotient
obtained by dividing (A) the Warrant Price existing prior to such adjustment by
(B) the new Warrant Price resulting from such adjustment. No fractional shares
of Common Stock shall be issued as a result of any such adjustment, and any
fractional shares resulting from the computations pursuant to this paragraph
shall be eliminated without consideration.

         6. COVENANTS AS TO COMMON STOCK. The Corporation covenants and agrees
that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant, will, upon issuance, be validly issued,
fully paid and non-

                                  Exhibit B-44
<PAGE>   70
                                                                    CONFIDENTIAL

assessable and free from all taxes, liens and charges with respect to the
issuance thereof. The Corporation further covenants and agrees that the
Corporation will from time to time take all such action as may be requisite to
assure that the stated or par value per share of Common Stock is at all times
equal to or less than the then effective Warrant Price per share of Common Stock
issuable upon exercise of this Warrant. The Corporation further covenants and
agrees that the Corporation will at all times have authorized and reserved, free
from preemptive rights, a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant. The Corporation
further covenants and agrees that if any shares of capital stock to be reserved
for the purpose of the issuance of shares of Common Stock upon the exercise of
this Warrant require registration with or approval of any governmental authority
under any Federal or state law before such shares may be validly issued or
delivered upon exercise, then the Corporation will in good faith and
expeditiously as possible endeavor to secure such registration or approval, as
the case may be. If and so long as the Common Stock issuable upon the exercise
of the rights represented by this Warrant is listed on any national securities
exchange, the Corporation will, if permitted by the rules of such exchange, list
and keep listed on such exchange, upon official notice of issuance, all shares
of such capital stock.

         7. NO SHAREHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Corporation.

         8. RESTRICTIONS ON TRANSFER. The holder of this Warrant acknowledges
that neither this Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") and the holder of this
Warrant agrees that no sale, transfer, assignment, hypothecation or other
disposition of this Warrant or the Warrant Shares shall be made in the absence
of (a) current registration statement under the Securities Act as to this
Warrant or the Warrant Shares and the registration or qualification of this
Warrant or the Warrant Shares under any applicable state securities laws is then
in effect or (ii) an opinion of counsel reasonably satisfactory to the
Corporation to the effect that such registration or qualification is not
required. Each certificate or other instrument for Warrant Shares issued upon
exercise of this Warrant shall, if required under the Securities Act or the
rules promulgated thereunder, be imprinted with a legend substantially to the
foregoing effect.

         9. INVESTOR RIGHTS AGREEMENT. Anything contained herein to the contrary
notwithstanding, the Warrant Shares shall be entitled to all rights and benefits
accorded thereto in that certain Fourth Amended and Restated Investors' Rights
Agreement, dated as ofFebruary 3, 2000, by and among the Corporation and the
Investors (as defined therein) .

         10. TRANSFER OF WARRANT; AMENDMENT. Subject to the restriction set
forth in Section 8, this Warrant and all rights hereunder are transferable, in
whole, or in part, at the agency or office of the Corporation referred to in
Section 2, by the holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant properly endorsed. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed, in blank, shall be deemed negotiable, and, when so

--------------------------------------------------------------------------------
                                  Exhibit B-45
<PAGE>   71
                                                                    CONFIDENTIAL

endorsed the holder hereof may be treated by the Corporation and all other
persons dealing with this Warrant as the absolute owner hereof for any purposes
and as the person entitled to exercise the rights represented by this Warrant,
or to the transfer hereof on the books of the Corporation, any notice to the
contrary notwithstanding; but until each transfer on such books, the Corporation
may treat the registered holder hereof as the owner hereof for all purposes.

         11. REORGANIZATIONS, ETC. In case, at any time during the Exercise
Period, of any capital reorganization, of any reclassification of the stock of
the Corporation (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a consolidation
or merger in which the Corporation is the continuing operation and which does
not result in any change in the Common Stock) or of the sale of all or
substantially all the properties and assets of the Corporation as an entirety to
any other corporation, this Warrant shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which such holder
would have been entitled if he had held the Common Stock issuable upon the
exercise hereof immediately prior to such reorganization, reclassification,
consolidation, merger or sale. In any such reorganization or other action or
transaction described above, appropriate provision shall be made with respect to
the rights and interests of the holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Warrant Price and of the number of shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Corporation will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation or entity (if other than the Corporation) resulting from
such transaction or the corporation or entity purchasing such assets shall
assume by written instrument, executed and mailed or delivered to the registered
holder hereof at the last address of such holder appearing on the books of the
Corporation, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.

         12. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Corporation, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.

--------------------------------------------------------------------------------
                                  Exhibit B-46
<PAGE>   72
                                                                    CONFIDENTIAL

         13. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

         14. NOTICES. All notices, advises and communications to be given or
otherwise made to any party to this Agreement shall be deemed to be sufficient
if contained in a written instrument delivered in person or by telecopier or
duly sent by first class registered or certified mail, return receipt requested,
postage prepaid, or by overnight courier, or by electronic mail, with a copy
thereof to be sent by mail (as aforesaid) within 24 hours of such electronic
mail, addressed to such party at the address set forth below or at such other
address as may hereafter be designated in writing by the addressee to the
addresser listing all parties:

                  If to the Corporation, to:

                      VarsityBooks.com Inc.
                      2020 K St., NW
                      6th Floor
                      Washington, DC 20006
                      Attention:  Richard Hozik
                      Telecopier:  202-332-5498
                      Electronic mail:  rich@varsitybooks.com

                      With a copy to:

                      Shaw Pittman
                      1676 International Drive
                      McLean, Virginia 22102-4835
                      Attention: Andrew M. Tucker
                      Telecopier:  703-790-7901
                      Electronic mail: andy.tucker@shawpittman.com

              and

                  If to Sallie Mae as follows:

                      Sallie Mae, Inc.
                      11600 Sallie Mae Drive
                      Reston, V.A. 20193
                      Attention:  General Counsel
                      Telecopier:
                      Electronic mail:

Or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or

--------------------------------------------------------------------------------
                                  Exhibit B-47
<PAGE>   73
                                                                    CONFIDENTIAL

communication shall be deemed to have been delivered and received (i) in the
case of personal delivery or delivery by telecopier, on the date of such
deliver, (ii) in the case of nationally-recognized overnight courier, on the
next business day after the date when sent and (ii) in the case of mailing, on
the third business day following that on which the piece of mail containing such
communication is posted. As used in this Section 14, "business day" shall mean
any day other than a day on which banking institutions in the District of
Columbia are legally closed for business.

         15. BINDING EFFECT ON SUCCESSORS; SURVIVAL. This Warrant shall be
binding upon any corporation succeeding the Corporation by merger, consolidation
or acquisition of all or substantially all of the Corporation's assets. All of
the obligations of the Corporation relating to the Common Stock issuable upon
the exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Corporation shall inure to
the benefit of the successors and assigns of Sallie Mae.

         16. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.

         17. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Corporation shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then Fair Market Value of one Warrant Share.

                                      * * *

--------------------------------------------------------------------------------
                                  Exhibit B-48
<PAGE>   74
                                                                    CONFIDENTIAL

         IN WITNESS WHEREOF, the undersigned have caused this Warrant and
Warrant Agreement to be executed by their duly authorized officers on the date
first above written.

                                      VARSITYBOOKS.COM INC.

                                      By: /s/ Eric J. Kuhn
                                          ------------------------------------
                                            Name:  Eric J. Kuhn
                                            Title: Chief Executive Officer

ATTEST: ___________________________
        SECRETARY

                                      SALLIE MAE, INC.

                                      By: /s/ SALLIE MAE, INC.
                                          ------------------------------------
                                            Name:
                                            Title:

--------------------------------------------------------------------------------
                                  Exhibit B-49
<PAGE>   75
                                                                    CONFIDENTIAL

                              FORM OF SUBSCRIPTION

                     [To be signed upon exercise of Warrant]

                  The undersigned, the holder of the Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _________ shares of Common Stock, par value $0.0001, of
VarsityBooks.com Inc., and herewith makes payment of $_________ therefor, and
requests that the certificates for such shares be issued on _____________ in the
name of and delivered to, ____________, whose address is
_________________________________________________.

Dated:_____________
                                   _________________________________
                                   (Signature)

                                   _________________________________
                                   (Address)

--------------------------------------------------------------------------------
                                  Exhibit B-50
<PAGE>   76
                                                                    CONFIDENTIAL

                               NOTICE OF EXCHANGE

                        (To be executed by the holder in
                         order to exchange the Warrant.)

                  The undersigned hereby irrevocably elects to exchange this
Warrant into __________ shares (the foregoing number constituting the number of
Warrant Shares to be issued pursuant to Section 3 of this Warrant) of Common
Stock, par value $0.0001, of Varsitybooks.com Inc., minus any shares to be
deducted from the foregoing number in accordance with the terms of this Warrant,
according to the conditions thereof. The undersigned desires to consummate such
exchange on ________________ and requests that the certificates be issued in the
name of delivered to _____________ whose address is __________________.

Dated:

                                   _________________________________
                                   Name of Holder:

                                   By:__________________________

--------------------------------------------------------------------------------
                                  Exhibit B-51
<PAGE>   77
                                                                    CONFIDENTIAL

                               FORM OF ASSIGNMENT

                  [To be signed only upon transfer of Warrant]

                  For value received, the undersigned hereby sells, assigns and
transfers unto _________ the right represented by the Warrant to purchase
_______ shares of Common Stock, par value $0.0001, of Varsitybooks.com Inc., to
which the Warrant relates, and appoints [Name of Attorney] to transfer such
right on the books of [ISSUER], with full power of substitution in the premises.

Dated:_____________

                                   ____________________________
                                   (Signature)

Signed in the presence of:

____________________________

--------------------------------------------------------------------------------
                                  Exhibit B-52
<PAGE>   78
                                                                    CONFIDENTIAL

                                    EXHIBIT A

                         NUMBER OF SHARES FOR WHICH THE
                          WARRANT SHALL BE EXERCISABLE:

Up to a maximum 132,185 Warrant Shares (subject to adjustment in accordance with
the terms of this Warrant) shall vest as follows:

<TABLE>
<CAPTION>
Number of Warrant Shares      Vesting
------------------------      --------------------------------------------------

<S>                           <C>
(A) 66,093                    Shall vest and become exercisable if Sallie Mae
                              makes * Quality Referrals consisting of (i) at
                              least * Preparatory Schools, (ii) at least *
                              Traditional 4-year Colleges, (iii) at most *
                              Career Centers or Community Colleges and (iv) at
                              most * Distance Learning Schools, on or before
                              April 1, 2000.

(B) 132,185                   Shall vest and become exercisable if Sallie Mae
                              has not achieved the performance requirements set
                              forth in Exhibit A, Section (A) herein and makes
                              * Quality Referrals for (i) at least *
                              Preparatory Schools, (ii) at least * Traditional
                              4-year Colleges, (iii) at most * Career Centers
                              or Community Colleges and (iv) at most * Distance
                              Learning Schools, on or before December 31,
                              2000. However, if Sallie Mae does not achieve the
                              foregoing requirements on or before December 31,
                              2000, a number of Warrant Shares shall vest equal
                              to the total number of Quality Referrals made by
                              Sallie Mae divided by *, provided that in
                              determining the number of Quality Referrals only
                              the first * Distance Learning Schools and *
                              Career Centers or Community Colleges should be
                              included.
</TABLE>

Notwithstanding the preceding chart, should Sallie Mae elect to exercise its
Right to Cancel in accordance with Section 1(a) hereof, all of the Warrant
Shares shall immediately divest and be cancelled.

--------------------------------------------------------------------------------
                                  Exhibit B-53
<PAGE>   79

                                    EXHIBIT C

                          SALLIE MAE CONTENT AND MARKS
                         ------------------------------

1.       U.S. FEDERALLY REGISTERED TRADEMARKS AND SERVICE MARKS

                See page C-2 below.

2.       COMMON LAW TRADEMARKS AND SERVICE MARKS - U.S. APPLICATIONS PENDING

                NONE

3.       COMMON LAW TRADEMARKS AND SERVICE MARKS

                NONE

4.       OTHER SALLIE MAE CONTENT TO BE PROVIDED BY SALLIE MAE

                NONE

                                  Exhibit C-1
<PAGE>   80
                      [EDUCATION LEADS US. SALLIEMAE LOGO]

                                  Exhibit C-2
<PAGE>   81

                                    EXHIBIT D

                         VARSITYBOOKS CONTENT AND MARKS
                        --------------------------------

1.       U.S. FEDERALLY REGISTERED TRADEMARKS AND SERVICE MARKS

         (a)  The stylized "V" in the VarsityBooks logo.

2.       COMMON LAW TRADEMARKS AND SERVICE MARKS - U.S. APPLICATIONS PENDING

         (a)  VarsityBooks has submitted an application for a trademark on
"VarsityBooks.com."  The application is currently pending.

3.       COMMON LAW TRADEMARKS AND SERVICE MARKS

         None.

4.       OTHER VARSITYBOOKS CONTENT TO BE PROVIDED BY VARSITYBOOKS

         None.

                                   Exhibit D-1
<PAGE>   82

                                    EXHIBIT E

                      DESIGNATED COLLEGE TARGETED RETAILERS
                      --------------------------------------

                                 *

VarsityBooks reserves the right to amend this list at any time subject to the
consent of Sallie Mae (such consent not to be unreasonably withheld, delayed or
conditioned).

* * shall not be deemed to be a College Targeted Retailer for the
limited purpose of the provision of content to the * Initiative.

                                   Exhibit E-1

<PAGE>   83

                                    EXHIBIT F

                     VARSITYBOOKS TRADEMARK USAGE GUIDELINES
                     ---------------------------------------

These guidelines apply to your use of VarsityBooks.com (R) (the "Trademark") in
materials which have been approved in advance by VarsityBooks.com, Inc.

1.You may use the Trademark solely for the purpose authorized by
VarsityBooks.com, Inc.

2.You may not alter the Trademark in any manner. For example, you may not change
the proportion, color, or font of the Trademark.

3.You may not display the Trademark in any manner that implies sponsorship,
endorsement by VarsityBooks.com, Inc. outside of your involvement in the
affiliate program.

4.You may not use the Trademark to disparage VarsityBooks.com, its products or
services, or in a manner which, in VarsityBooks.com, Inc.'s reasonable
judgement, may diminish or otherwise damage VarsityBooks.com, Inc.'s goodwill in
the Trademark.

5.The Trademark must appear by itself, with reasonable spacing (at least the
height of the Trademark) between each side of the Trademark and other graphic or
textual elements.

6.You must use the (R) symbol adjacent to the Trademark.

7.You must include the following statement in your materials that include the
Trademark: VarsityBooks.com is the registered trademark of VarsityBooks.com,
Inc.

8.You acknowledge that all rights to the Trademark are the exclusive property of
VarsityBooks.com, Inc., and all goodwill generated through your use of the
Trademark will inure to the benefit of VarsityBooks.com, Inc.

VarsityBooks.com, Inc. reserves the right in its sole discretion to modify these
guidelines at any time. VarsityBooks.com, inc. reserves the right to take action
against any use that does not conform to these guidelines.

                                  Exhibit F-1
<PAGE>   84

                                    EXHIBIT G

                               TARGET INSTITUTIONS
                              ---------------------

                           TO BE MUTUALLY AGREED UPON

                                   Exhibit G-1

<PAGE>   85

                                    EXHIBIT H

                      SALLIE MAE TRADEMARK USAGE GUIDELINES
                      --------------------------------------

These guidelines apply to your use of SALLIE MAE(R) EDUCATION LEADS US(SM) (the
"Trademark") in materials that have been approved in advance by Sallie Mae.

1.  You may use the Trademark solely for the purpose authorized by Sallie Mae.

2.  You may not alter the Trademark in any manner. For example, you may not
change the proportion, color, or font of the Trademark.

3.  You may not display the Trademark in any manner that implies sponsorship,
endorsement by Sallie Mae outside of your involvement in the program
contemplated by this Agreement.

4.  You may not use the Trademark to disparage Sallie Mae, its products or
services, or in a manner which, in Sallie Mae's reasonable judgement, may
diminish or otherwise damage Sallie Mae's goodwill in the Trademark.

5.  The Trademark must appear by itself, with reasonable spacing (at least the
height of the Trademark) between each side of the Trademark and other graphic or
textual elements.

6.  You must use the (R) symbol adjacent to EDUCATION LEADS US, and the (SM)
symbol adjacent to SALLIE MAE.

7.  You must include the following statement in your materials that include the
Trademark: SALLIE MAE is a registered service mark of the Student Loan Marketing
Association, and EDUCATION LEADS US is a service mark of Sallie Mae, Inc.

8.  You acknowledge that all rights to the Trademark are the exclusive property
of Sallie Mae, Inc. and/or the Student Loan Marketing Association (collectively
"Sallie Mae") and all goodwill generated through your use of the Trademark will
inure to the benefit of Sallie Mae. Sallie Mae reserves the right in its sole
discretion to modify these guidelines at any time. Sallie Mae reserves the right
to take action against any use that does not conform to these guidelines.

9.  You understand that any advertisement or promotional materials which use
the Sallie Mae name or Trademark shall prominently display the following
disclaimer: SLM HOLDING CORPORATION AND ITS SUBSIDIARIES, OTHER THAN THE STUDENT
LOAN MARKETING ASSOCIATION, ARE NOT SPONSORED BY OR AGENCIES OF THE UNITED
STATES.

                                   Exhibit H-1

<PAGE>   86

                            EXHIBIT I

                     SALLIE MAE COMPETITORS
                     ----------------------
                     *

* Only to the extent the entity, or any divisions or subsidiary of the entity is
engaged in the Education Loan Business.

Sallie Mae reserves the right to amend this list at any time subject to the
consent of VarsityBooks (such consent not to be unreasonably withheld, delayed
or conditioned).

                                      I-1

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