Document:

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                * The confidential portion has been so omitted
                        and filed with the Commission.

                                                                   EXHIBIT 10.12

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                                  CONFIDENTIAL
                         INTERACTIVE MARKETING AGREEMENT

        This Interactive Marketing Agreement (the "Agreement"), dated as of
December 22 1999 (the "Effective Date"), is between ICQ, Inc. ("ICQ"), a
Delaware corporation, with offices at 22000 AOL Way, Dulles, Virginia 20166, and
Varsitybooks.com Inc. ("Marketing Partner" or "MP"), a Delaware corporation,
with offices at 2020 K Street, N.W. 6th Floor Washington, D.C. 20006. ICQ and MP
may be referred to individually as a "Party" and collectively as the "Parties."

                                  INTRODUCTION

        ICQ and MP each desires to enter into an interactive marketing
relationship whereby ICQ will promote and distribute an interactive site
referred to (and further defined) herein as the Affiliated MP Site and services
related thereto. This relationship is further described below and is subject to
the terms and conditions set forth in this Agreement. Defined terms used but not
defined in the body of the Agreement will be as defined on Exhibit B attached
hereto.

                                      TERMS

1.      PROMOTION, DISTRIBUTION AND MARKETING.

        1.1.   ICQ PROMOTION OF MP AREAS. ICQ will provide MP with the
               Promotions described herein in the areas specified in Exhibit A.
               Subject to MP's reasonable approval, ICQ will have the right to
               fulfill its promotional commitments with respect to any of the
               foregoing by providing MP comparable promotional placements in
               appropriate alternative areas of the ICQ Network so long as such
               alternative areas have demographic and audience reach comparable
               to the ICQ Service . In addition, if ICQ is unable to deliver any
               particular Promotion, ICQ will work with MP to provide MP, as its
               sole remedy, a comparable promotional placement. ICQ reserves the
               right to redesign or modify the organization, structure, Look and
               Feel navigation and other elements of any part of the ICQ Network
               at any time, including without limitation, by adding or deleting
               channels, subchannels and/or screens and/or making fundamental
               changes to the look and feel, navigation or other elements of the
               ICQ Service. In the event such modifications materially and
               adversely affect any specific Promotion, ICQ will work with MP to
               provide MP, as its sole remedy, a comparable promotional
               placement. Except to the extent expressly described herein
               (including but not limited to in Exhibit A), the exact form,
               placement, integration and nature of such Promotions shall be
               determined by ICQ in it's reasonable editorial discretion. As
               used throughout this Agreement, the phrases "comparable
               promotional placements" or "comparable promotions" shall mean
               placements which are of comparable overall value, to be
               determined based on a variety of factors, including size,
               quality, type (e.g., integrated or banner), location (i.e., page
               or screen and the subject matter thereof), demographically
               targeted relevance, and audience reach (taking into account the
               targeted nature of the placement). The Parties agree that
               comparable placements for integrated promotional placements shall
               be other integrated placements.

        1.2.   IMPRESSIONS COMMITMENT. During the Term, ICQ shall deliver *
               Impressions to MP through the Promotions, as described on Exhibit
               A (the "Impressions Commitment"). With respect to the Impressions
               targets specified on Exhibit A, ICQ will not be obligated to
               provide in excess of any Impressions target amounts in any year.
               In the event ICQ provides an excess of any annual Impressions
               target amounts in any year, the Impressions target for the
               subsequent year will be reduced by the amount of such windfall.
               Any shortfall in Impressions at the end of a year will not be
               deemed a breach of the Agreement by ICQ; instead such shortfall
               will be added to the Impressions target for the subsequent year.
               In the event there is (or will be in ICQ's reasonable judgment) a
               shortfall in Impressions as of the end of the Initial Term (a
               "Final Shortfall"), ICQ will

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               provide MP, with advertising placements through "run of service"
               advertising on the ICQ Network which have a total value, based on
               the advertising rate applicable to this Agreement, equal to the
               value of the Final Shortfall (determined by multiplying the
               percentage of Impressions that were not delivered by the
               guaranteed payment attributable for such promotions provided for
               below).

        1.3.   INTEGRATED PROMOTIONAL PLACEMENTS. In addition to the Impressions
               described above, MP shall receive integrated Promotions within
               the ICQ Service, as more fully described on Exhibit A attached
               hereto (the "Integrated Placements"). Except to the extent
               expressly described herein, such integration into the ICQ Service
               shall be subject to standard ICQ policies on partner integration.
               Except to the extent expressly described herein, the exact form,
               placement, integration and nature of such Promotions shall be
               determined by ICQ in it's reasonable editorial discretion.

        1.4.   CONTENT OF PROMOTIONS WITHIN THE ICQ NETWORK. Promotions for MP
               will link only to the MP Areas and will promote only the MP
               Services described on Exhibit D attached hereto (and shall not
               promote any third party or any Interactive Service). The specific
               MP Content to be contained within the Promotions (including,
               without limitation, text within the advertising banners and
               contextual promotions residing within the ICQ Network (the "Promo
               Content")) will be determined by MP, subject to ICQ's technical
               limitations, the terms of this Agreement and ICQ's
               then-applicable policies relating to advertising and promotions
               (and, in the case of the Integrated Placements, subject also to
               the terms of Sections 1.3 and 2.1). MP will submit in advance to
               ICQ for its review semiannually an online marketing plan with
               respect to the Integrated Placements. The Parties will meet in
               person or by telephone at least monthly to review operations and
               performance hereunder, including a review of the Promo Content to
               mutually agree if there are improvements that can be made to
               enhance performance. MP will consistently update the Promo
               Content on a regular basis. Except to the extent expressly
               described herein, the specific form, placement, duration and
               nature of the Promotions will be as determined by ICQ in its
               reasonable editorial discretion (consistent with the editorial
               composition of the applicable screens).

        1.5    MP PROMOTION OF MP AREAS AND ICQ. MP will provide ICQ with the
               promotions provided for on Exhibit C attached hereto. MP will not
               implement or authorize any promotion similar in any respect
               (including, without limitation, in scope, purpose, amount,
               prominence or regularity) to the promotion required or provided
               pursuant to Exhibit C for any other Interactive Service.

2.      MP AREAS.

        2.1    AFFILIATED MP SITE; CONTENT OF MP AREAS. MP will create a
               customized, cobranded version of MP's primary Interactive Site to
               be linked to the ICQ Network for the purpose of marketing and
               promoting the sale of Products (the "Affiliated MP Site"). Except
               as mutually agreed in writing by the Parties or as otherwise set
               forth in this Agreement, the only products or services offered on
               the Affiliated MP Sites or included within the Promo Content
               (collectively the "MP Areas") will be the MP Products described
               on Exhibit D. In addition, the Affiliated MP Sites shall comply
               with the ICQ cobranding requirements set forth on Exhibit D. The
               MP Areas will not in any respect, (i) except as expressly
               permitted under this Agreement, promote, advertise, market or
               distribute the products, services or content of any other
               Interactive Service, or (ii) otherwise provide promotions,
               advertisements, products or services which violate ICQ's
               then-standard advertising or other policies, any third party
               copyright, trademark, US patent, or any other third party right,
               including without limitation, any music performance or related
               music right, or any law, rule or regulation.

        2.2    PRODUCTION WORK. Except as agreed to in writing by the Parties
               pursuant to the "Production Work" section of the Standard Online
               Commerce Terms & Conditions

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               attached hereto as Exhibit F, MP will be responsible for all
               production work and maintenance associated with the MP Areas,
               including all related costs and expenses. ICQ will be responsible
               for all operations and other support necessary to display the
               Promo Content and otherwise meet its obligations under this
               Agreement at no additional charge to MP.

        2.3    HOSTING; COMMUNICATIONS. As described more fully in Exhibit E, MP
               will be responsible for all communications, hosting and
               connectivity costs and expenses associated with the Affiliated MP
               Sites. MP will bear responsibility for the implementation,
               management and cost of the Affiliated MP Site. MP will utilize a
               dedicated high speed connection to maintain transport of
               information to and from the MP data center and ICQ's designated
               data center.

        2.4    TECHNOLOGY. MP will take commercially reasonable steps necessary
               to conform its promotion and sale of Services through the MP
               Areas to the then-existing technologies identified by ICQ (with
               reasonable advance notice to MP) which are optimized for the ICQ
               Service. ICQ will be entitled to require reasonable changes to
               the Content (including, without limitation, the features or
               functionality) within any linked pages of the MP Areas to the
               extent such Content will, in ICQ's good faith judgment, adversely
               affect any operational aspect of the ICQ Network. ICQ reserves
               the right to review and test the MP Areas from time to time to
               determine whether the site is compatible with ICQ's
               then-available ICQ client and host software and the ICQ Network.

        2.5    SERVICE OFFERING. MP will include in the MP Areas substantially
               similar Services and other Content (including, without
               limitation, any features, offers, contests, functionality or
               technology) that are then made available by or on behalf of MP
               through any Additional MP Channel, except to the extent any such
               Services or other Content are (i) subject to exclusive,
               proprietary or other preferential obligations in favor of third
               parties and such obligations cannot be reasonably duplicated for
               ICQ or for which generally comparable benefits for ICQ Users
               cannot be provided for ICQ, or (ii) are otherwise prohibited from
               inclusion in the MP Areas pursuant to this Agreement; provided,
               however, that (i) such inclusion will not be required where it is
               commercially or technically impractical to either Party (i.e.,
               inclusion would cause either Party to incur substantial
               incremental costs or cause a breach of another agreement); and
               (ii) the specific changes in scope, nature and/or offerings
               required by such inclusion will be subject to the terms of this
               Agreement.

        2.6    PRICING AND TERMS. The prices, terms and conditions for Services
               in the MP Areas shall be (i) no less favorable in any respect
               than the prices, terms and conditions for the Services or
               substantially similar Services offered by or on behalf of MP
               through any Additional MP Channel (other than non-permanent
               special offers offered through Additional MP Channels other than
               www.varsitybooks.com, that cannot be reasonably duplicated for
               ICQ Users) and (ii) in the aggregate generally competitive with
               similarly situated Section 3.5 Entities in the same market space.

        2.7    EXCLUSIVE OFFERS/USER BENEFITS. MP will (a) provide through the
               MP Areas special promotions that are generally comparable to
               promotions made available by or on behalf of MP through any
               Additional MP Channel to the extent MP's agreements with third
               parties permit it to do so; and (b) provide through the MP Areas
               on a regular basis special promotions or other unique programming
               and services exclusively available to ICQ Users (collectively,
               the "Special Promotions"). Through such Special Promotions, MP
               will be eligible for promotions in addition to the Promotions
               described on Exhibit A. In the event that MP conducts a promotion
               with another Interactive Service, MP will make available to ICQ
               Users a Special Promotion providing a similar discount or benefit
               to ICQ Users. MP will provide ICQ with reasonable prior notice of
               Special Promotions so that ICQ can market the availability of
               such Special Promotions in the manner ICQ deems appropriate in
               its editorial discretion.

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        2.8    OPERATING SUPPORT AND STANDARDS. ICQ will provide MP with the
               operational support described on Exhibit E. The MP Areas shall
               comply at all times with the standards and specifications set
               forth in Exhibit E. To the extent site standards are not
               established in Exhibit E with respect to any aspect or portion of
               the MP Areas (or the Services or other Content contained
               therein), MP will provide such aspect or portion at a level of
               accuracy, quality, completeness, and timeliness which meets or
               exceeds prevailing standards in the college textbook industry. In
               the event MP fails to comply with the requirements of Exhibit E
               attached hereto, (a) ICQ will have the right, as its sole remedy,
               to decrease the Promotions it provides to MP until such time as
               MP corrects its non-compliance (and in such event, ICQ will be
               relieved of the proportionate amount of any promotional
               commitment and/or cease any such integrated placements made to MP
               by ICQ hereunder corresponding to such decrease in promotion).
               Notwithstanding the foregoing, ICQ shall have the right to
               terminate this Agreement in the event that the Affiliated MP Site
               is non-operational for fourteen (14) days (counted in the
               aggregate) during any six (6) month period.

        2.9    TRAFFIC FLOW. It is the Parties' mutual intention to work
               together and take reasonable efforts to keep ICQ Network traffic
               either within the MP Areas or channeled back into the ICQ
               Network. The Parties will work together on implementing mutually
               acceptable links from the MP Areas back to the ICQ Network.

3       ICQ EXCLUSIVITY OBLIGATIONS.

        3.1    During the term specified in Section 3.6 below, MP will be the
               Exclusive College-Targeted Commerce Partner on the ICQ Service
               and ICQ.com.

        3.2    During the term specified in Section 3.6 below, MP will be the
               exclusive promoter, advertiser, marketer and distributor of
               college textbooks expressly promoted on the ICQ Service and
               ICQ.com.

        3.3    During the term specified in Section 3.6 below, ICQ may enter
               into arrangements with an entity except any of the Section 3.5
               Entities * on the ICQ Service and ICQ.com, provided that no such
               third party may (during such term) * .

        3.4    During the term specified in Section 3.6 below, MP will be ICQ's
               exclusive college marketing channel. Under this provision, MP
               will be the exclusive promoter, advertiser, marketer and
               distributor of the ICQ Service and ICQ.com (other than ICQ
               itself) on U.S. college campuses; provided, however, that this
               provision shall not apply * .

        3.5    The "Section 3.5 Entities" are: * .

        3.6    The exclusivity obligations set forth in Sections 3.1, 3.2, 3.3
               and 3.4 (subject to Section C of Exhibit C) above will commence
               upon the Effective Date and continue until December 31, 2000.

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        3.7    "Exclusive College-Targeted Commerce Partner" shall mean solely
               that, except otherwise expressly permitted hereunder, ICQ will
               not enter into any promotion, advertising, marketing or
               distribution arrangement with any Section 3.5 Entity on the ICQ
               Service or ICQ.com.

        3.8    The foregoing shall not preclude ICQ from (a) enabling
               ICQ Users to access any website whatsoever, including websites
               competitive with MP and/or covered by the foregoing exclusivity
               through standard web access, personalization features or similar
               means; (b) promoting a party through the ICQ service which
               markets multiple products or services so long as the promotions
               appearing on the ICQ Service for such party do not (x) promote
               any of the products or services specified in Section 1 of Exhibit
               D specifically to college students or (y) are not for textbooks.
               Further (and without limiting any actions which may be taken by
               ICQ without violation of MP's rights hereunder), no provision of
               this Agreement will limit ICQ's ability (on or off the ICQ
               Network) to (i) undertake activities or perform duties pursuant
               to existing arrangements as of the Effective Date with third
               parties (or pursuant to any agreements to which ICQ becomes a
               party subsequent to the Effective Date as a result of Change of
               Control, assignment, merger, acquisition or other similar
               transaction to the extent necessary for ICQ to perform its
               obligations under such agreements and provided that this clause
               (i) will not limit from the rights of MP under this Agreement),
               (ii) create editorial commentary relating to any third party
               marketer of products or services covered by Sections 3.1 or 3.2
               above, or (iii) post or allow ICQ Users to post Content,
               messages, contextual links or editorial commentary relating to
               any third party marketer of the Exclusive Service, to the extent
               created by such ICQ User and not by ICQ.

4       PAYMENTS.

        4.1    GUARANTEED PAYMENTS. MP will pay ICQ a non-refundable guaranteed
               payment of Nine Million Dollars ($9,000,000) (the "Guaranteed
               Payment Amount") as follows:

                  (i)       *               shall be paid on  *
                                  ;

                   (ii)      *               shall be paid on  *
                                  ;
                   (iii)     *               shall be paid on  *
                                  ;
                   (iv)      *               shall be paid on  *
                                  ;
                   (v)       *               shall be paid on  *
                                  ;
                   (vi)      *               shall be paid on  *
                                  ;
                   (vii)     *               shall be paid on  *
                                  ;
                   (viii)    *               shall be paid on  *
                                  ;
                   (ix)      *               shall be paid on  *
                                  ;

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                    (x)      *               shall be paid on  *
                                   ;
                    (xi)     *                shall be paid on  *
                                   ;
                    (xii)    *                shall be paid on  *
                                   ;
                    (xiii)   *                shall be paid on  *
                                   ;

4.2  LATE PAYMENTS; WIRED PAYMENTS. All amounts owed hereunder not
               paid when due and payable will bear interest from five days after
               the date such amounts are due and payable at the prime rate in
               effect at such time as published in the Wall Street Journal. All
               payments required hereunder will be paid in immediately
               available, non-refundable U.S. funds wired to the "America
               Online" account, Account Number    *    at the Chase Manhattan
               Bank, 1 Chase Manhattan Plaza, New York, NY 10081
               (ABA:021000021) (with the following notation in the reference
               field: "For credit to ICQ, Inc").

4.3  TAXES. MP will collect and pay and indemnify and hold ICQ harmless from
               any sales, use, excise, telecommunication or similar tax
               including any penalties and interest, as well as any costs
               associated with the collection or withholding thereof, including
               attorney's fees which arises out of any transaction between MP
               and customers. ICQ will collect and pay and indemnify and hold MP
               harmless from any sales, use, excise, internet access,
               telecommunication or any other similar tax or fee solely to the
               extent arising out of ICQ's operation of the ICQ Network,
               including any penalties and interest, as well as any costs
               associated with the collection or withholding thereof, including
               attorney's fees which arises in connection with actions taken, or
               transactions engaged in, by ICQ other than those taxes that
               directly relate to any transaction between MP and its customers.

4.4  REPORTS.

               4.4.1  Sales Reports. MP will provide ICQ in an automated manner
                      with a monthly report in a mutually agreeable format,
                      detailing the following activity in such period (and any
                      other information mutually agreed upon by the Parties or
                      reasonably required for measuring revenue activity by MP
                      through the Affiliated MP Site): (i) summary information
                      for sales generated through the Affiliated MP Site (i.e.,
                      total aggregate transaction revenues); (ii) revenue by
                      category of promotion and product for such sales, and
                      (iii) purchaser name and screenname for such sales
                      (collectively, "Sales Reports"). ICQ will be entitled to
                      use the Sales Reports in its business operations, subject
                      to the terms of this Agreement; provided, however, that
                      ICQ agrees that (a) such Sales Reports will contain
                      Confidential Information and such information shall only
                      be disclosed in aggregate reports which do not identify or
                      segregate information provided by MP, and (b) ICQ will not
                      use the information contained in such Sales Reports to
                      target advertisements, promotions or any other
                      communications of any party to MP's customers .

               4.4.2  Usage Reports. ICQ shall provide MP with standard monthly
                      usage information related to the Promotions (e.g., a
                      schedule of the Impressions delivered by ICQ at such time)
                      which are similar in substance and form to the reports
                      provided by ICQ to other interactive marketing partners
                      similar to MP. The information shall be

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                      subject to third-party audit in accordance with ICQ's
                      routine business practice and ICQ shall provide MP with a
                      summary of all results of such audits upon request.

               4.4.3  Fraudulent Transactions. To the extent permitted by
                      applicable laws, MP will provide ICQ with a report of any
                      fraudulent order made through the Affiliated MP Site,
                      including, if practicable, the date, screenname or email
                      address and amount associated with such order, promptly
                      following MP obtaining knowledge that the order is, in
                      fact, fraudulent.

5       TERM; RENEWAL; TERMINATION.

           5.1 Term. Unless earlier terminated as set forth herein, the initial
               term of this Agreement will be three (3) years from the Effective
               Date (the "Term").

           5.2 Continued Links. Upon expiration of the Term, ICQ may, at its
                  discretion, continue to promote one or more "pointers" or
                  links from the ICQ Network to the homepage of MP and continue
                  to use MP's trade names, trade marks and service marks in
                  connection therewith (collectively, a "Continued Link"). So
                  long as ICQ maintains a Continued Link, (a) MP shall pay ICQ*
                  percent of gross revenue generated by ICQ Users, and (b)
                  Sections 4.3 and 4.4, along with the terms of Sections 7 and
                  8 of Exhibit F and the terms of Exhibit G hereto shall
                  continue to apply with respect to the Continued Link and any
                  transactions arising therefrom. Notwithstanding the
                  foregoing, in the event that ICQ materially and adversely
                  changes the nature of the ICQ Service after the Term, MP may,
                  upon written notice to ICQ, require that ICQ discontinue the
                  Continued Link.

           5.3 Termination for Breach. Except as expressly provided elsewhere
                  in this Agreement, either Party may terminate this Agreement
                  at any time in the event of a material breach of the Agreement
                  by the other Party which remains uncured after thirty (30)
                  days written notice thereof to the other Party (or such
                  shorter period as may be specified elsewhere in this
                  Agreement); provided that the cure period with respect to any
                  scheduled payment will be fifteen (15) days from the date for
                  such payment provided for herein, regardless of when notice is
                  given to MP.

           5.4 Termination for Bankruptcy/Insolvency. Either Party may
                  terminate this Agreement immediately following written notice
                  to the other Party if the other Party (i) ceases to do
                  business in the normal course, (ii) becomes or is declared
                  insolvent or bankrupt, (iii) is the subject of any proceeding
                  related to its liquidation or insolvency (whether voluntary or
                  involuntary) which is not dismissed within ninety (90)
                  calendar days or (iv) makes an assignment for the benefit of
                  creditors.

           5.5 Termination on Change of Control. In the event of (i) prior to
                  MP's initial public offering of its common stock (the "IPO"),
                  any Change of Control of MP, (ii) after the IPO, any Change of
                  Control of MP, if such Change of Control results in any
                  Interactive Service, or other entity reasonably competitive to
                  AOL or ICQ, obtaining a controlling interest in MP,or (ii) a
                  Change of Control of ICQ or AOL, ICQ may terminate this
                  Agreement by providing thirty (30) days prior written notice
                  of such intent to terminate. In the event of a termination of
                  this Agreement pursuant to Section 5.5(iii), ICQ shall pay MP
                  a pro-rata refund of the Guaranteed Payment.

6       MANAGEMENT COMMITTEE/ARBITRATION.

           6.1 Management Committee. The Parties meet to promptly resolve any
                  claim, dispute, claim, controversy or disagreement (each a
                  "Dispute") between the Parties or any of their respective
                  subsidiaries, affiliates, successors and assigns under or
                  related to this Agreement or any document executed pursuant to
                  this Agreement or any of the transactions contemplated hereby
                  within ten (10) days of written notice from one to the

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               other of the Dispute. If the Parties cannot resolve the Dispute
               within such time frame, the Dispute will be deemed to be
               immediately submitted to the Management Committee (as defined
               below) for resolution. For ten (10) days following such
               submission of the Dispute to the Management Committee, the
               Management Committee will have the exclusive right to resolve
               such Dispute. If the Management Committee is unable to amicably
               resolve the Dispute during the ten-day period, then the dispute
               will be referred for the resolution mechanisms described below.
               "Management Committee" will mean a committee made up of a senior
               executive from each of the Parties for the purpose of resolving
               Disputes under this Section 6 and generally overseeing the
               relationship between the Parties contemplated by this Agreement.
               Neither Party will seek, nor will be entitled to seek, binding
               outside resolution of the Dispute unless and until the Parties
               have been unable amicably to resolve the Dispute as set forth in
               this Section 6 and then, only in compliance with the procedures
               set forth in this Section 6.

        6.2 Arbitration. Except for Disputes relating to issues of
               proprietary rights, including but not limited to intellectual
               property and confidentiality, any Dispute not resolved by
               amicable resolution as set forth in Section 6.1 will be finally
               settled by arbitration. Such arbitration will be conducted by the
               American Arbitration Association ("AAA") in Washington, D.C. and
               will be initiated and conducted in accordance with the Commercial
               Arbitration Rules ("Commercial Rules") of the AAA, as such rules
               will be in effect on the date of delivery of a demand for
               arbitration ("Demand"), except to the extent that such rules are
               inconsistent with the provisions set forth herein.

        6.3 Selection of Arbitrators. The arbitration panel will consist
               of three (3) arbitrators. Each Party will name an arbitrator
               within ten (10) days after the delivery of the Demand. The two
               (2) arbitrators named by the Parties may have prior relationships
               with the naming Party, which in a judicial setting would be
               considered a conflict of interest. The third arbitrator, selected
               by the first two, should be a neutral participant, with no prior
               working relationship with either Party. If the two arbitrators
               are unable to select a third arbitrator within ten (10) days, a
               third neutral arbitrator will be appointed by the AAA. If a
               vacancy in the arbitration panel occurs after the hearings have
               commenced, the remaining arbitrator or arbitrators may not
               continue with the hearing and determination of the controversy,
               unless the Parties agree otherwise.

        6.4 Governing Law. The Federal Arbitration Act, 9 U.S.C. Secs.
               1-16, and not state law, will govern the arbitrability of all
               Disputes. The Federal Rules of Evidence will apply in toto. The
               arbitrators may enter a default decision against any Party who
               fails to participate in the arbitration proceedings.

        6.5 Arbitration Awards. The arbitrators will have the authority
               to award compensatory damages only. The award rendered by the
               arbitrators will be final, binding and non-appealable, and
               judgment upon such award may be entered by any court of competent
               jurisdiction. The Parties agree that the existence, conduct and
               content of any arbitration will be kept confidential and no Party
               will disclose to any person any information about such
               arbitration, except as may be required by law or by any
               governmental authority or for financial reporting purposes in
               each Party's financial statements.

        6.6 Fees. Each Party will pay the fees of its own attorneys,
               expenses of witnesses and all other expenses and costs in
               connection with the presentation of such Party's case
               (collectively, "Attorneys' Fees").

        6.7 Non Arbitratable Disputes. Any Dispute that is not subject to
               final resolution by the Management Committee or to arbitration
               under this Section 6 or by law (collectively, "Non-Arbitration
               Claims") will be brought in a court of competent jurisdiction in
               the Commonwealth of Virginia. Each Party irrevocably consents to
               the exclusive jurisdiction of the courts of the Commonwealth of
               Virginia and the federal courts situated in the

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               Commonwealth of Virginia, over any and all Non-Arbitration Claims
               and any and all actions to enforce such claims or to recover
               damages or other relief in connection with such claims.

        6.8 Injunctive Relief. Either party will have the right to apply
               at any time to a judicial authority for injunctive or other
               interim or provisional relief, and will not by doing so be deemed
               to have breached its agreement to arbitrate or to have affected
               the powers reserved to the arbitrators.

7   COMPLIANCE WITH LAWS. Nothing herein shall be deemed to require either party
    to violate any rule, law or regulation, including, without limitation, the
    Securities Act of 1933 or the Securities Exchange Act of 1934. In the event
    that a Party can demonstrate to the reasonable satisfaction of the other
    Party that a provision herein would require it to violate any such rule, law
    or regulation, then the Parties shall restate such provision so as to comply
    with the applicable laws and regulations at issue, while maintaining, to the
    maximum extent possible, the original effect of such provision (consistent
    with the applicable legal and regulatory requirements).

8   PRESS RELEASES. Each Party will submit to the other Party, for its prior
    written approval, which will not be unreasonably withheld or delayed, any
    press release or any other public statement ("Press Release") regarding the
    transactions contemplated hereunder; provided, however, that, following the
    initial public announcement of the business relationship between the Parties
    in accordance with the foregoing, either Party's subsequent factual
    reference to the existence of a business relationship between the Parties
    will not require the approval of the other Party. Notwithstanding the
    foregoing, either Party may issue Press Releases and other disclosures as
    required by law without the consent of the other Party and in such event,
    the disclosing Party will provide at least five (5) business days prior
    written notice of such disclosure. Because it would be difficult to
    precisely ascertain the extent of the injury caused to the non-breaching
    party, in the event of a material breach of this Section 8 that results in a
    material and adverse effect on the non-breaching party, the non-breaching
    party may elect to either (a) terminate this Agreement immediately upon
    notice to the other Party (without the other Party having any cure period),
    or (b) as liquidated damages, elect to modify the Impression Commitment
    hereunder by fifteen percent (15%) (either an increase in Impressions if AOL
    has materially breached the Agreement or a decrease in Impressions if MP has
    materially breached the Agreement). The Parties agree that the liquidated
    damages set forth are a reasonable approximation of the injury that would be
    suffered by the non-breaching Party.

9   WARRANTS. In connection with the obligations of the Parties hereunder, and
    subject to the provisions hereof, ICQ's obligations under this Agreement
    shall be contingent upon MP's delivery within one day of the Effective Date
    of (i) a Stock Subscription Warrant in the form of Exhibit H attached hereto
    (the "Warrant Agreement") and (ii) an Investor Rights Agreement in a form
    reasonably acceptable to ICQ.

10  EXHIBITS. All Exhibits attached hereto are each hereby made a part of this
    Agreement.

                       [the next page is a signature page]

                                       9
<PAGE>   10

                                                                  EXECUTION COPY

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

ICQ, INC.                                     VARSITYBOOKS.COM INC.

By:    /s/ ICQ, INC.                          By:    /s/ VARSITYBOOKS.COM INC.
    ----------------------------------            -----------------------------
Name                                          Name:
Title:                                        Title:

                                       10
<PAGE>   11
                                   EXHIBIT A
                              PLACEMENT/PROMOTION

By March 1, 2000, ICQ and MP will complete a detailed Program Plan ("the Plan")
for the integration of MP into the ICQ Service and on ICQ.com which will detail
the schedule for the accomplishment of the Specifics which follow below. ICQ
will make available appropriate IT, marketing and operations personnel to work
on the Plan. MP will have the option to send relevant personnel to ICQ's Tel
Aviv offices to work on the development and implementation of the Plan. ICQ
will work in good faith with MP to maximize the placement of VarsityBooks.com
banner promotions and Integrated Placements on ICQ.com and within the ICQ
Service.

SPECIFICS:  Subject to Sections 1.1 and 1.3 above, ICQ will:

-     Provide premier placement. Integrated Placements within the ICQ Client
      will be * including, but not limited to, (i) *, (ii) * (i.e., to the
      extent retailers are named MP will always be named (except in the case of
      rotational placements, in which case MP shall be included within all such
      rotations), and * (i.e., relating to a material offering of the
      Affiliated MP Site) *, and (iii) *. The Integrated Placements described
      in this paragraph will appear on the ICQ Service on or about *.
      Notwithstanding any provision hereof to the contrary, at all times during
      the Term, * (i) in the case of fixed placements, * and (ii) in the case of
      rotational placements, *.

-     Provide premier placement in college or student-oriented sections,
      pages, or the like on ICQ.com. ICQ will work in good-faith to place MP
      Promotions within all college or student-oriented sections, pages or the
      like on ICQ.com. Such Placements will begin by January 14, 2000;
      provided that MP is in compliance with the terms of this Agreement.

-     Provided that MP has constructed an ICQ/MP co-branded college bookstore,
      ICQ will provide an anchor tenant (or equivalent) placement for such
      ICQ/MP co-branded college bookstore (featuring such MP Products as the
      Parties shall mutually agree), in the appropriate channels on ICQ.com
      which will be no more than two clicks away from the home page. This
      feature will not count toward the Impressions Commitment due under
      Section 1.2. So long as MP has provided ICQ with all necessary materials
      to construct such area, the bookstore will be operational by a mutually
      agreeable date.

-     Provide Impressions on the ICQ Service and ICQ.com (except to the extent
      permitted otherwise under Section 1.1 of the Agreement) and within
      relevant ICQ Portal Channels.

-     Include Impressions in targeted ICQ search results that are relevant to
      MP (served based on search terms).

-     Provide Impressions in targeted co-browsing - served based on URL terms.

-     Provide Impressions in targeted web directory areas - served to
      areas/topics relevant to MP.

-     Provided that MP has delivered to ICQ such content and information
      reasonably requested by ICQ, develop an MP service "skin". This is a
      MP-purposed "look and feel" on a customized version of the ICQ Service
      and includes: an MP button on top of contact list; MP branding on
      messages created; and MP branding on ticker. The MP "skin" will be
      available by download from MP and from ICQ.com. This feature and its use
      by ICQ users will not count toward the Impressions Commitment due under
      Section 1.2. This feature will be available on or about June 15, 2000
      (the "Scheduled Skin Delivery Date"). Notwithstanding the foregoing, if
      the "skin" is not delivered by the Scheduled Skin Delivery Date, ICQ
      shall extend the Term by a number of days equal to the difference
      between the Scheduled Skin Delivery Date and the actual date on which
      such "skin" is delivered; provided, however, that in no event shall the
      Term be extended for more than six (6) months pursuant this provision
      and provided, further, that no extension of the Term shall increase the
      number of Impressions to be delivered pursuant to the Carriage Plan
      below. In the event that the "skin" is not delivered prior to January
      15, 2001, MP shall have the right to terminate this Agreement upon
      written notice to MP and receive a pro-rata refund of the Guaranteed
      Payment and no further Warrant Shares (as defined in the Warrant
      Agreement) shall vest after the date of such termination.

-     Enable MP to send system-wide messages to ICQ active users and to all
      users with the MP skin. This feature will be available on or about June
      15, 2000.

-     ICQ will make best efforts to include MP in all "opt-in" opportunities
      ICQ makes available to its users on the ICQ Service and ICQ.com. In
      particular, if ICQ makes "opt-in" available in the registration process,
      MP will be included in the first version of the Service that makes this
      possible. Contact information (name, ICQ or email address and other
      relevant information) collected through this process will be provided to
      MP in a mutually-agreed format. This feature and its use by ICQ users
      will not count toward the Impressions Commitment due under Section 1.2.

-     Serve at least 65% of the Impressions 'above the fold'.

-     Permit MP to vary the number of promotions and location according to
      time of year.

-     As ICQ develops and releases plug-in sdk's for use by its Ad Partners,
      MP will have access to those SDK's to develop its own plug-ins for
      distribution on ICQ at no additional cost.
<PAGE>   12

CARRIAGE PLAN (banner ads)

            Year 1            Year 2            Year 3
Endemic     *                 *                 *

Broad Reach *                 *                 *

*Endemic promotions include banner ads that are placed in or near relevant
portal channels, search results, co-browsing ads and web directory areas.

Placements on the Service and Integrated Placements do not impact the
impressions total due under Section 1.2.

<PAGE>   13

                                   EXHIBIT B
                                  DEFINITIONS

The following definitions will apply to this Agreement:

ADDITIONAL MP CHANNEL. Any other distribution channel (e.g., an Interactive
Service other than ICQ) through which MP makes available an offering comparable
in nature to the MP Areas.

AFFILIATED MP SITE.  "Affiliated MP Site" shall have the meaning set forth in
Section 2.1.

ALERTS. Any communication from MP directed at an ICQ User (whether by e-mail,
instant message, or otherwise) as a result of such ICQ User's expressly
requested opt-in to receive such communication, requested via an ICQ controlled
registration process, which such registration process (i) clearly and
prominently notifies all registrants of the nature and frequency of the
communications that will or may be received as a result thereof, and (ii)
requires such registrant to expressly reconfirm such election to receive such
communications, and which such communications each offer a clear and prominent
opportunity for such ICQ User to subsequently opt-out at any time.

                        (1)   AOL. "AOL" shall mean America Online, Inc., a
                              Delaware corporation.

CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets
of a party or (b) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1933, as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors.

CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the
course of the Agreement, which is or should be reasonably understood to be
confidential or proprietary to the disclosing Party, including, but not limited
to, the material terms of this Agreement, information about ICQ Members
(including without limitation their ICQ number or other unique identifying
data), ICQ Users, and MP customers, technical processes and formulas, source
codes, product designs, sales, cost and other unpublished financial
information, product and business plans, projections, and marketing data.
"Confidential Information" will not include information (a) already lawfully
and non-confidentially known to or independently developed without use or
access to such information by the receiving Party, (b) disclosed in published
materials, (c) generally known to the public (through no breach of the
confidentiality obligations of this Agreement), or (d) lawfully and
non-confidentially obtained from any third party.

CONTENT. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data,
Services, advertisements, promotions, links, pointers and software, including
any modifications, upgrades, updates, enhancements and related documentation.

ICQ INTERACTIVE SITE.  Any Interactive Site which is managed, maintained, owned
or controlled by ICQ or its agents.

<PAGE>   14

ICQ LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with Interactive Sites within the ICQ Service or ICQ.com.

ICQ MEMBERS. Any authorized user of the ICQ Service, including any sub-accounts
using the ICQ Service under an authorized master account.

ICQ NETWORK. (i) The ICQ Service, (ii) ICQ.com (iii) any ICQ Interactive Site;
and (iv) any other product or service owned, operated, distributed or authorized
to be distributed by or through ICQ or its affiliates worldwide (and including
without limitation the ICQ Service, ICQ.com, and the rest of the ICQ Network).
It is understood and agreed that the exclusivity rights of MP relate only to the
ICQ Service and ICQ.com and not generally to the ICQ Network.

ICQ SERVICE. The standard English language version of the ICQ brand
communications and messaging service, specifically excluding (a) ICQ.com or any
other ICQ Interactive Site, (b) "ICQ It!" or any other independent product,
service or property which may be offered by, through or with the ICQ brand
service, (c) any programming or Content area offered by or through the ICQ brand
service over which ICQ does not exercise complete operational control
(including, without limitation, Content areas controlled by other parties,
whether or not co-branded with ICQ, and ICQ user-created Content areas), (d) any
yellow pages, white pages, classifieds or other search, directory or review
services or Content offered by or through the ICQ brand service, (e) any
property, feature, product or service which ICQ or its affiliates may acquire
subsequent to the effective date hereof and (f) any other version of an ICQ
service which is materially different from the standard ICQ brand service, by
virtue of its branding, distribution, functionality, Content or services,
including, without limitation, any co-branded version of the service or any
version distributed through any broadband distribution platform or through any
platform or device other than a desktop personal computer.

ICQ USER. Any user of the ICQ Service, ICQ.com or the ICQ Network.

ICQ.COM. ICQ's primary Internet-based Interactive Site marketed under the
"ICQ.com" brand, specifically excluding (a) the ICQ Service, (b) "ICQ It!" or
any other independent product or service offered by or through such site or any
other ICQ Interactive Site, (c) any programming or Content area offered by or
through such site over which AOL does not exercise complete operational control
(including, without limitation, Content areas controlled by other parties,
whether or not co-branded with ICQ, and ICQ user-created Content areas), (d) any
yellow pages, white pages, classifieds or other search, directory or review
services or Content offered by or through such site or any other ICQ Interactive
Site, (e) any property, feature, product or service which ICQ or its affiliates
may acquire subsequent to the Effective Date and (f) any other version of an ICQ
Interactive Site which is materially different from ICQ's primary Internet-based
Interactive Site marketed under the "ICQ.com" brand, by virtue of its branding,
distribution, functionality, Content and services, including, without
limitation, any co-branded versions and any version distributed through any
broadband distribution platform or through any platform or device other than a
desktop personal computer.

IMPRESSION. User exposure to the applicable Promotion, as such exposure may be
reasonably determined and measured by ICQ in accordance with its standard
methodologies and protocols (including without limitation standard
impressions).

IMPRESSIONS COMMITMENTS.  As defined in Section 1.2 hereof.

INTEGRATED PLACEMENTS.  As defined in Section 1.3 hereof.

INTERACTIVE SERVICE. An entity offering one or more of the following: (i)
online or Internet connectivity services (e.g., an Internet service provider);
(ii) an interactive site or service featuring a broad selection of aggregated
third party interactive content (or navigation thereto) (e.g., an online
service or search and directory service) and/or marketing a broad selection of
products and/or services across numerous interactive commerce

<PAGE>   15

categories (e.g., an online mall or other leading online commerce site); (iii)
a persistent desktop client; or (iv) communications software capable of serving
as the principal means through which a user creates, sends and receives
electronic mail or real time or "instant" online messages (whether by
telephone, computer or other means), including without limitation greeting
cards.

INTERACTIVE SITE. Any interactive site or area, including, by way of example
and without limitation, (i) an MP or ICQ site on the World Wide Web portion of
the Internet or (ii) a channel or area delivered through a "push" product such
as the Pointcast Network or interactive environment such as Microsoft's Active
Desktop or interactive television service such as WebTV.

LICENSED CONTENT. All Content offered through the MP Areas pursuant to this
Agreement or otherwise provided by MP or its agents in connection herewith
(e.g., offline or online promotional Content, Promotions, "slideshows", etc.),
including in each case, any modifications, upgrades, updates, enhancements, and
related documentation.

MP AREAS. The Affiliated MP Site and any portions of the Integrated Placements
which are managed, maintained, owned or controlled predominately by MP or its
agents (rather than by ICQ).

MP INTERACTIVE SITE. Any Interactive Site (other than the MP Areas) which is
managed, maintained, owned or controlled by MP or its agents.

MP PROGRAMMING. The (a) MP Areas and all Content thereon (including, without
      limitation, Content within the stock ticker or any other Integrated
      Placements, and any message boards, chat and other ICQ Member-supplied
      content areas contained therein, if and to the extent permitted herein)
      and (b) Licensed Content.

PROMOTIONS. Any of the promotions described herein (including without
limitation (a) (i) the standard Impressions described in Section 1.2, and (ii)
any Integrated Placements as described in Section 1.3 (in each case, as more
fully described on Exhibit A and including without limitation any advertising
banners, buttons, contextual promotions, searches or other promotions residing
within the ICQ Network, which may link to the MP Areas); (b) any Alerts or
other permitted communications as set forth herein; and (c) any comparable
promotions provided herein.

SERVICE. Any product, good or service which MP (or others acting on its behalf
or as distributors) offers, sells, provides, distributes or licenses to ICQ
Members directly or indirectly through (i) the MP Areas (including through any
Interactive Site linked thereto), (ii) any other electronic means directed at
ICQ Members (e.g., e-mail offers), or (iii) an "offline" means (e.g., toll-free
number) for receiving orders related to specific offers within the MP Areas
requiring purchasers to reference a specific promotional identifier or tracking
code.

<PAGE>   16

                                   EXHIBIT C

                               MP CROSS-PROMOTION

A. "Try ICQ" Button. Within each MP Interactive Site (including without
   limitation during any MP customer registration process), MP shall include a
   prominent "Try ICQ" feature (at least 90 x 30 pixels or 70 x 70 pixels in
   size) (the "ICQ Promo") through which users can obtain promotional
   information about ICQ products or services mutually designated by both
   Parties and download the then-current version of MP purposed client software
   for such products or services. ICQ will provide the creative content to be
   used in the ICQ Promo (including designation of links from such content to
   other content pages), subject to the reasonable approval of MP. MP shall
   post (or update, as the case may be) the creative content supplied by ICQ
   within the spaces for the ICQ Promo within ten business days of its receipt
   of such content from ICQ. Without limiting any other reporting obligations
   of the Parties contained herein, MP shall provide ICQ with monthly written
   reports specifying the number of impressions to the pages containing the ICQ
   Promo during the prior month so long as it is technically feasible to do so.
   In the event that ICQ elects to serve the ICQ Promo to the MP Interactive
   Site from an ad server controlled by ICQ or its agent, MP shall take all
   reasonable operational steps necessary to facilitate such ad serving
   arrangement including, without limitation, inserting HTML code designated by
   ICQ on the pages of the MP Interactive Site on which the ICQ Promo will
   appear.

B. For the purposes of this Section B, the following definitions will apply:

   "Tier 1 Communications Tools" means communications tools for e-mail, instant
   messaging, and Internet search functionality.

   "Tier 2 Communication Tools" means communications tools for yellow pages,
   chat, calendaring, homesteading, and message board functionality.

   MP will use commercially reasonable efforts to incorporate communication
   tools provided by ICQ into the Affiliated MP Site to the extent MP elects to
   offer corresponding communications functionality to users of the Affiliated
   MP Site.

   MP will not use any Instant Messaging tool other than one provided by ICQ.
   With respect to the other Tier 1 Communications Tools, if MP elects to use
   in the Affiliated MP Site a communications tool from a third party because
   it is not commercially reasonable to implement a communication tool provided
   by ICQ, then MP will not brand, or permit the provider of the tool to brand,
   the service offered using the tool with the provider's brand, nor will MP
   provide a link from the Affiliated MP Site to an Interactive Site of the
   provider in connection with the service offered using the tool. With respect
   to Tier 2 Communications Tools, if MP elects to use a communications tool
   from a third party in the Affiliated MP Site because it is not commercially
   reasonable to use a communications tool provided by ICQ, MP may co-brand the
   service offered using the tool with the brand of the provider (provided that
   the provider is not an Interactive Service with the exception of any entity
   solely described by subsection (iv) of the definition of Interactive
   Service) but will not link from the Affiliated MP Site to Interactive Sites
   of the provider in connection with the service offered using the tool.

      B.    C.    On-Campus Marketing Cross-Promotion

II.   DELIVERABLES

      By March 1, 2000, VarsityBooks.com ("VB.C") and ICQ will have completed a
      marketing and promotional campaign for ICQ/VB.C for the Year 2000 that
      will include at least:

      -     1,000,000 co-branded impressions

<PAGE>   17

      - At least 300,000 Promotional e-mails to VB.C customer base
      - Permanent fixed position on VB.C

   - At least 4,000 Promotional e-mails to VB.C affiliates
   - At least 80,000 Inserts in VB.C boxes(1)
   - Use of VB.C Campus Rep Network

        The Campus Reps will perform the following marketing activities (or
        some comparable marketing activity) on behalf of ICQ/VB.C:

-       Postering
-       Fliering
   -    Chalking
   -    Class Announcements
   -    Announcements to clubs, sports teams, fraternities/sororities and other
        campus groups
   -    Distribution of premiums (premiums to be provided by ICQ at ICQ's
        expense)

III.EXPENSES

         VB.C will responsible for all costs associated with the impressions
         (except for creative to be provided by ICQ); promotional e-mails to
         customers and affiliates; the permanent fixed position on VB.C; and
         inserts in VB.C boxes (except for cost of actual insert).

         ICQ will make appropriate personnel available to help lead training
         calls for the Campus Rep Network and to perform any other necessary
         tasks to ensure the timely and successful roll-out of this campaign.

IV.TERMINATION

         On June 1, 2000, the Parties will evaluate performance under the
         co-marketing plan as described above (the "Plan") for a period of up
         to seven (7) days. In the event that ICQ believes in good-faith that
         the Plan (and/or the performance of the Plan) has not been reasonably
         satisfactory to the marketing goals of ICQ, ICQ shall provide MP with
         written notice of such. The Parties shall meet within seven (7) days
         of such notice to discuss in good-faith an appropriate course of
         action, and, in the event that the Parties are unable to mututally
         agree on such appropriate course of action, ICQ may, prior to July 1,
         2000, upon written notice to VB.C, terminate VB.C's exclusivity as its
         exclusive college marketing channel. Such a termination election will
         have no effect on any of ICQ's other obligations under the exclusivity
         provision or any other provisions of this Agreement.

D. Communications Promos. In * of any online or offline promotions by MP or
     over which MP exercises at least partial editorial control, when promoting
     solely the communications aspects of MP (each, a "Communications Promo"),
     MP will include specific references or mentions (verbally where possible)
     of the ICQ Service (e.g., a reference to the availability of the ICQ
     Service through the MP Areas or vice versa) during the period in which MP
     is ICQ's exclusive college marketing channel . For purposes of this
     paragraph, an "offline promotion" shall include without limitation, MP's
     television, radio, print and "out of home" (e.g., buses and billboards)
     advertisements and in editorial

----------------------------
(1) Inserts will be delivered as products are ordered.

<PAGE>   18

     content in any publications, programs, features or other forms of media
     over which MP exercises at least partial editorial control.

<PAGE>   19

                                   EXHIBIT D

                   DESCRIPTION OF SERVICES AND OTHER CONTENT

1. Products and Services Which MP May Promote on the Affiliated MP Site.

      MP may promote and offer any of the following products or services on the
Affiliated MP Site: *

      On the homepage of the Affiliated MP Site, MP will only be able to
promote the categories of products or services identified as "Restricted" in
Section 2 (i) so long as the amount of Content on the homepage of the Affiliate
MP Site relating to such products or services is not significant relative to
the Unlimited Products or Services on the homepage, or (ii) is highlighted only
through the use of a tab or navigational icon which directs the user to another
page on the Affiliated MP Site or any MP Interactive Site.

2. Products and Services Which MP May Promote in the Promo Content.

      MP may promote and offer only the Unlimited and Qualified Products or
Services identified below through the Promo Content for the duration specified
below. For the purposes of this Section 2:

      "Unlimited Products or Services" means the following products or services
can be promoted or offered for the term of this Agreement: *

      "Qualified Products or Services" means the following products or services
can be promoted or offered for the term of this Agreement until, and except to
the extent which, ICQ executes an agreement with a third party for the
exclusive promotion of any such product or service with another party on the
ICQ Service or ICQ.com: *. ICQ will provide MP with reasonable advance written
notice of any such arrangement with a third party.

"Restricted Products or Services" means the following products or services
cannot be promoted or offered during the term of this Agreement: *.

3. CO-BRANDING REQUIREMENTS. The co-branded Affiliated MP Site shall be
operational by March 15, 2000 and MP shall display on each page of such site
headers and footers each of 600x30 pixel size consisting of creative content
provided by ICQ (subject to MP's approval, not to be unreasonably withheld,
conditioned or delayed).and containing both ICQ and MP branding and links to
the ICQ Network. The Parties agree that the home page of the Affiliated MP Site
shall reside on a joint URL structured in a manner to provide MP with user and
unique visitor credit (i.e., www.icq.varsitybooks.com). Internal pages within
the Affiliated MP Site shall reside on a joint URL structured in a manner to
provide

<PAGE>   20

ICQ with credit for time spent on the Affiliated MP Site (i.e.,
www.varsitybooks.icq.com), unless such URL structuring would not be technically
feasible.

<PAGE>   21

                                   EXHIBIT E
                              OPERATING STANDARDS

1. Affiliated MP Site Infrastructure. Within a reasonable time after the
   execution of this Agreement, ICQ will provide MP with the technical
   requirements needed by MP to integrate the ICQ software referred to in this
   Agreement into the Affiliated MP Site. MP will be responsible for all
   communications, hosting and connectivity costs and expenses associated with
   the Affiliated MP Site. MP will provide all hardware, software,
   telecommunications lines and other infrastructure necessary to meet traffic
   demands on the Affiliated MP Site from the ICQ Network. MP will design and
   implement its connectivity to the Internet such that (i) no single component
   failure will have a materially adverse impact on ICQ Users seeking to reach
   the Affiliated MP Site from the ICQ Network and (ii) no single line will run
   at more than 70% average utilization for a 5-minute peak in a daily period.

2. Optimization; Speed. MP will use commercially reasonable efforts to see
   that: (a) the functionality and features within the Affiliated MP Site are
   compatible with the client software then in use by ICQ Users; and (b) the
   Affiliated MP Site is designed and populated in a manner that minimizes
   delays when ICQ Users attempt to access such site. At a minimum, MP will
   ensure that the Affiliated MP Site's data transfers initiate within fewer
   than fifteen (15) seconds on average; except where such inability is due to
   problems with the ICQ Network. MP will permit ICQ to conduct reasonable
   performance and load testing of the Affiliated MP Site (in person or through
   remote communications).

3. Technical Problems. MP agrees to use commercially reasonable efforts to
   address material technical problems (over which MP exercises control)
   affecting use by ICQ Users of the Affiliated MP Site (an "MP Technical
   Problem") promptly following notice thereof.

4. Monitoring. MP will monitor the performance and availability of the
   Affiliated MP Site on a Continuous basis. MP will provide ICQ with contact
   information (including e-mail, phone, pager and fax information, as
   applicable, for both during and after business hours) for MP's principal
   business and technical representatives, for use in cases when issues or
   problems arise with respect to the Affiliated MP Site.

5. Security. MP will utilize Internet standard encryption technologies (e.g.,
   Secure Socket Layer - SSL) to provide a secure environment for conducting
   transactions and/or transferring private member information (e.g. credit
   card numbers, banking/financial information, and member address information)
   to and from the Affiliated MP Site. MP will provide ICQ with periodic
   reviews of the Affiliated MP Site in order to allow ICQ to evaluate the
   security risks of such site. MP will promptly remedy any security risks or
   breaches of security as may be identified by ICQ's Operations Security team
   and verified by MP.

6.  Technical Performance.

   i. MP will design the Affiliated MP Site to support the most recent two (2)
   Windows version of the Microsoft Internet Explorer browser (currently,
   versions 3.0 and 4.0) as well as any browser that represents more than two
   percent (2%) of aggregate Affiliated MP Sites' traffic. In addition, ICQ and
   MP shall work together with the goal of preventing any caching by ICQ's
   proxy servers (where applicable, including preventing caching of any banner
   advertisements served by MP). To the extent the Affiliated MP Site do not
   support older ICQ browsers, MP shall have the option of (A) using MP's ad
   serving technology and the information contained in
   "http://"webmaster.info.ICQ.com", to restrict an ICQ User's access to
   incompatible features on the Affiliated MP Site and serve a mutually agreed
   upon promotional message to such users, or (B) add alternative features
   which may be chosen by a user depending on the type of operating system
   and/or browser a user employs.

   ii. To the extent MP creates customized pages on the Affiliated MP Site for
   ICQ Users or restricts access to advertising by ICQ Users, MP will configure
   the server from which it serves the site to examine the HTTP User-Agent
   field in order to identify the "ICQ Member-Agents" listed at:
   "http://webmaster. Info.ICQ.com."

   iii. MP will periodically review the technical information made available by
    ICQ at http://webmaster.info.ICQ.com.

   iv. MP will design its site to support HTTP 1.0 or later protocol as defined
   in RFC 1945 (available at "http://ds.internic.net/rfc/rfc1945.text").

   v. Prior to releasing material, new functionality or features through the
   Affiliated MP Site ("New Functionality"), MP will use commercially
   reasonable efforts to test the New Functionality to confirm its
   compatibility with ICQ Service client software. With respect to any major
   implementation of significant new technology, MP will provide ICQ with
   written notice of the new technology so that ICQ can perform tests of the
   new technology to confirm its compatibility with the ICQ Service client
   software.

   vi. ICQ may notify MP of any problems with respect to New Functionality or
   new technology on the Affiliated MP Site, and MP will work in good faith to
   resolve such problems. ICQ will be entitled to request reasonable changes to
   the Content (including, without limitation, the features or functionality)
   within any pages of the Affiliated MP Site linked to from the ICQ Network to
   the extent such Content will materially and adversely affect any operational
   aspect of the ICQ Network. If MP is unable to adequately resolve such
   problems, MP shall have the option of (A) using MP's ad serving technology
   to restrict an ICQ User's access to such Content and serve a mutually agreed
   upon promotional message to such users, or (B) add alternative features
   which may be chosen by a user depending on the type of operating system a
   user employs. If MP does not restrict access to such Content or add
   applicable alternative features,

<PAGE>   22

   ICQ shall have the right to terminate the link to such Content from the ICQ
   Network.

7. ICQ Internet Services Partner Support. ICQ will provide MP with access to
the highest level of online resources, standards and guidelines documentation,
technical phone support, monitoring and after-hours assistance that ICQ makes
generally available to ICQ's web-based partners. ICQ support will not, in any
case, be involved with Content creation on behalf of MP or support for any
technologies, databases, software or other applications which are not supported
by ICQ or are related to any MP area other than the Affiliated MP Site. Support
to be provided by ICQ is contingent on MP providing to ICQ demo account
information (where applicable), a detailed description of the Affiliated MP
Site's software, hardware and network architecture and access to the Affiliated
MP Site for purposes of such reasonable performance and load testing. ICQ will
use commercially reasonable efforts to respond to MP's requests for technical
support within three (3) business day of the making of the request by MP. In
addition, ICQ will provide MP with timely access to appropriate technical
resources to allow MP to integrate the ICQ software to be provided by ICQ under
this Agreement into the Affiliated MP Site.

<PAGE>   23

                                   EXHIBIT F

                  STANDARD ONLINE COMMERCE TERMS & CONDITIONS

<PAGE>   24
1.    ICQ Network Distribution. MP will not authorize or permit any third party
      to distribute or promote the Services or any MP Interactive Site through
      the ICQ Network absent ICQ's prior written approval, which approval will
      not be unreasonably withheld. The Promotions and any other promotions or
      advertisements purchased from or provided by ICQ will link only to the MP
      Areas, will be used by MP solely for its own benefit and will not be
      resold, traded, exchanged, bartered, brokered or otherwise offered to any
      third party.

2.    Provision of Other Content.  In the event that MP includes any Content
      within the MP Areas that violates ICQ's then-standard Terms of Service
      (including without limitation, the terms of the ICQ End User License
      Agreement, and the ICQ Privacy Policy) (the "Terms of Service"), the
      terms of this Agreement, then ICQ will notify MP in writing of its
      objection and, MP will take commercially reasonable steps to block access
      by ICQ Users to such Content using MP's then-available technology or take
      such other remedial action which cures the violation.  In the event that
      MP cannot, through its commercially reasonable efforts, block access by
      ICQ Users to the Content in question, then MP will provide ICQ prompt
      written notice of such fact.  ICQ may then, at its option, restrict
      access from the ICQ Network to the Content in question using technology
      available to ICQ.  MP will cooperate with ICQ's reasonable requests to
      the extent ICQ elects to implement any such access restrictions.

3.    Contests. Any contest, sweepstakes or similar promotion conducted or
      promoted through the MP Areas (a "Contest") shall comply with all
      applicable federal, state and local laws and regulations.

4.    Navigation. In cases where an ICQ User performs a search for MP through
      any search or navigational tool or mechanism that is accessible or
      available through the ICQ Network (e.g., Promotions, search terms, or any
      other promotions or navigational tools), ICQ shall have the right to
      direct such ICQ User to the MP Areas, or any other MP Interactive Site
      determined by ICQ in its reasonable discretion.

5.    Disclaimers. Upon ICQ's request, MP agrees to include within the MP Areas
      a product disclaimer (the specific form and substance to be mutually
      agreed upon by the Parties) indicating that transactions are solely
      between MP and ICQ Users purchasing Services from MP.

6.    ICQ Look and Feel.  MP acknowledges and agrees that ICQ will own all
      right, title and interest in and to the elements of graphics, design,
      organization, presentation, layout, user interface, navigation and
      stylistic convention (including the digital implementations thereof)
      which are generally associated with online areas contained within the ICQ
      Network, subject to MP's (or its licensors') ownership rights in any
      non-ICQ trademarks or copyrighted material within the MP Areas.  ICQ
      acknowledges that MP retains all right, title and interest in and to the
      elements of graphics, design, organization, presentation, layout, user
      interface, navigation and stylistic convention (including the digital
      implementations thereof) which are generally associated with the MP Areas
      and the MP Interactive Service, subject to any third-party trademarks and
      copyrighted material contained therein.

7.    Management of the MP Areas.  MP will manage, review, delete, edit,
      create, update and otherwise manage all Content available on or through
      the MP Areas, in a timely and professional manner and in accordance with
      the terms of this Agreement.  MP will use commercially reasonable efforts
      to cause the MP Areas to be current, accurate and well-organized at all
      times.  MP agrees that the Services and other Licensed Content : (i) will
      not infringe on or violate any copyright, trademark, U.S. patent or any
      other third party right, including without limitation, any music
      performance or other music-related rights; and (ii) will not violate any
      applicable law or regulation of the United State or any other country or
      jurisdiction. Additionally, MP represents and warrants that it owns or
      has all rights to any Licensed Content required to perform under this
      Agreement. MP also warrants that a reasonable basis exists for all
      Service performance or comparison claims expressly made by MP and
      appearing in the MP Areas.  Except as provided herein, MP shall not in
      any manner, including, without limitation in any Promotion, the Licensed
      Content or promotional materials state or imply that ICQ recommends or
      endorses MP or MP's Services (e.g., no statements that MP is an
      "official" or "preferred" provider of products or services for ICQ)
      without the prior authorization of ICQ.  ICQ will have no obligations
      with respect to the Services available on or through the MP Areas,
      including, but not limited to, any duty to review or monitor any such
      Services.

8.    Management of ICQ Network.  ICQ will manage, review, delete, edit,
      create, update and otherwise manage all Content available on or through
      the ICQ Network, in a timely and professional manner and in accordance
      with the terms of this Agreement. ICQ will use commercially reasonable
      efforts to see that the ICQ Network remains current, accurate and
      well-organized at all times.  ICQ agrees that the ICQ Service and ICQ.com
      and any Content available on them: (i) will not infringe on or violate
      any third-party copyright, trademark, U.S. patent which exists on the
      effective date of this agreement, or any other third party right,
      including without limitation, any music performance or other
      music-related rights; (ii) will not violate ICQ's then-applicable Terms
      of Service or any other standard, written ICQ policy or license; and
      (iii) will not violate any applicable law or regulation of the United
      State or any other country or jurisdiction, including those relating to
      contests, sweepstakes or similar promotions.  ICQ also warrants that a
      reasonable basis exists for all ICQ Service performance or comparison
<PAGE>   25

      claims expressly made by ICQ and appearing through the ICQ Network.
      Except as provided herein, ICQ shall not in any manner state or imply
      that MP recommends or endorses ICQ or the ICQ Network (e.g., no
      statements that ICQ is an  "official" or "preferred" provider of products
      or services for MP) without the prior authorization of MP.  MP will have
      no obligations with respect to the ICQ Services available on or through
      the ICQ Network other than the MP Areas, including, but not limited to,
      any duty to review or monitor any such ICQ Services.

9.    Duty to Inform. MP will promptly inform ICQ of any information related to
      the MP Areas which could reasonably lead to a claim, demand, or liability
      of or against ICQ and/or its affiliates by any third party. ICQ will
      promptly inform MP of any information related to the ICQ Network which
      could reasonably lead to a claim, demand, or liability of or against MP
      and/or its affiliates by any third party.

10.   Customer Service.  It is the sole responsibility of MP to provide
      customer service to persons or entities purchasing Services through the
      ICQ Network ("Customers"). MP will bear full responsibility for all
      customer service, including without limitation, order processing,
      billing, fulfillment, shipment, collection and other customer service
      associated with any Services offered, sold or licensed through the MP
      Areas, and ICQ will have no obligations whatsoever with respect thereto.
      MP will receive all emails from Customers via a computer available to
      MP's customer service staff and generally respond to such emails within
      three (3) days from receipt.  MP will receive all orders electronically
      and generally process all orders within three (3) days from receipt,
      provided Services ordered are not advance order items.  MP will use
      commercially reasonable efforts to receive, process, fulfill and deliver
      all orders of Services on a timely and professional basis.  MP will offer
      ICQ Users who purchase Services through such MP Areas a money back
      satisfaction guarantee, to the same extent offered by MP generally  MP
      will bear all responsibility for compliance with federal, state and local
      laws in the event that Services are out of stock or are no longer
      available at the time an order is received.  MP will also comply with the
      requirements of any federal, state or local consumer protection or
      disclosure law.  Payment for Services will be collected by MP directly
      from customers.

11.   Production Work.  In the event that MP requests ICQ's production
      assistance for activities outside the scope of ICQ's obligations under
      this Agreement in connection with (i) ongoing programming and maintenance
      related to the MP Areas, (ii) a redesign of or addition to the MP Areas
      (e.g., a change to an existing screen format or construction of a new
      custom form), (iii) production to modify work performed by a third party
      provider or (iv) any other type of production work, MP will work with ICQ
      to develop a detailed production plan for the requested production
      assistance (the "Production Plan").  Following receipt of the final
      Production Plan, ICQ will notify MP of (i) ICQ's availability to perform
      the requested production work, (ii) the proposed fee or fee structure for
      the requested production and maintenance work and (iii) the estimated
      development schedule for such work.  ICQ will make commercially
      reasonable efforts to respond to MP promptly and to undertake in good
      faith the production assistance requested by MP.  To the extent the
      Parties reach agreement regarding implementation of the agreed-upon
      Production Plan after good faith negotiations, such agreement will be
      reflected in a separate work order signed by the Parties.  To the extent
      MP elects to retain a third party provider to perform any such production
      work, work produced by such third party provider must generally conform
      to ICQ's standards & practices (and any standard ICQ "styleguide").  The
      specific production resources which ICQ allocates to any production work
      to be performed on behalf of MP will be as determined by the Parties in
      the work order.  With respect to any routine production, maintenance or
      related services which are necessary for ICQ to perform in order to
      support the proper functioning and integration of the MP Areas ("Routine
      Services"), MP will pay the then-standard fees charged by ICQ for such
      Routine Services provided that ICQ notifies MP in advance of incurring
      these charges (providing MP an explanation of the basis for them) and
      obtains MP's prior approval for them.

12.   Bookmarking. To the extent ICQ allows ICQ Users to "bookmark" the URL or
      other locator for the MP Areas, such bookmarks will be subject to ICQ's
      control at all times. Upon the termination of this Agreement, MP's rights
      to any Keyword Search Terms and bookmarking will terminate.

13.   Merchant Certification Program.  MP will be provided the opportunity to
      participate in any generally applicable "Certified Merchant" program
      operated by ICQ or its authorized agents or contractors.  Such program
      may require merchant participants on an ongoing basis to meet certain
      reasonable, generally applicable standards relating to provision of
      electronic commerce through the ICQ Network (including, as a minimum, use
      of 40-bit SSL encryption and if requested by ICQ, 128-bit encryption) and
      may also require the payment of certain reasonable certification fees to
      the applicable entity operating the program.  Each Certified Merchant in
      good standing will be entitled to place on its affiliated Interactive
      Site an ICQ designed and approved button promoting the merchant's status
      as an ICQ Certified Merchant.

14.   Message Boards; Chat Rooms and Comparable Vehicles.  Any Content
      submitted by MP or its agents within message boards, chat rooms or any
      comparable vehicles will be subject to the license grant relating to
      submissions to "public areas" set forth in the ICQ Terms of Service.  MP

<PAGE>   26

      acknowledges that it has no rights or interest in ICQ Member submissions
      to message boards within the ICQ Network.  MP will refrain from editing,
      deleting or altering, without ICQ's prior approval (which shall not be
      unreasonably withheld or delayed), any opinion expressed or submission
      made by an ICQ Member within MP Programming except in cases where MP  has
      a good faith belief that the Content in question violates an applicable
      law, regulation, third party right or the applicable ICQ Terms of
      Service.

<PAGE>   27

                                   EXHIBIT G
                       STANDARD LEGAL TERMS & CONDITIONS

1.    Promotional Materials/Press Releases. Each Party will submit to the other
      Party, for its prior written approval, which will not be unreasonably
      withheld or delayed, any marketing, advertising, or other promotional
      materials, excluding Press Releases, related to the MP Areas and/or
      referencing the other Party and/or its trade names, trademarks, and
      service marks (the "Promotional Materials"); provided, however, that
      either Party's use of screen shots of the MP Areas for promotional
      purposes will not require the approval of the other Party so long as
      America Online(R) is clearly identified as the source of such screen
      shots; and provided further, however, that, following the initial public
      announcement of the business relationship between the Parties in
      accordance with the approval and other requirements contained herein,
      either Party's subsequent factual reference to the existence of a
      business relationship between the Parties in Promotional Materials, will
      not require the approval of the other Party. Each Party will solicit and
      reasonably consider the views of the other Party in designing and
      implementing such Promotional Materials. Once approved, the Promotional
      Materials may be used by a Party and its affiliates for the purpose of
      promoting the MP Areas and the content contained therein and reused for
      such purpose until such approval is withdrawn with reasonable prior
      notice. In the event such approval is withdrawn, existing inventories of
      Promotional Materials may be depleted.

2.    License. MP hereby grants ICQ a non-exclusive worldwide license to
      market, license, distribute, reproduce, display, perform, translate,
      transmit, and promote the Licensed Content (or any portion thereof)
      through such areas or features of the ICQ Network as required for ICQ to
      perform under this Agreement. MP acknowledges and agrees that the
      foregoing license permits ICQ to distribute portions of the Licensed
      Content in synchronism or timed relation with visual displays prepared by
      MP or ICQ (e.g., as part of an ICQ "slideshow"). In addition, ICQ Users
      will have the right to access and use the MP Areas.

3.    Trademark License. In designing and implementing the promotional
      materials and subject to the other provisions contained herein, MP will
      be entitled to use such trade names, trademarks, and service marks of ICQ
      as designated by ICQ and ICQ; and its affiliates will be entitled to use
      such trade names, trademarks, and service marks of MP as designated by MP
      (collectively, together with the ICQ marks listed above, the "Marks");
      provided that each Party: (i) does not create a unitary composite mark
      involving a Mark of the other Party without the prior written approval of
      such other Party; and (ii) displays 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.

4.    Ownership of Trademarks. Each Party acknowledges the ownership right of
      the other Party in the Marks of the other Party and agrees that all use
      of the other Party's Marks will inure to the benefit, and be on behalf,
      of the other Party. Each Party acknowledges that its utilization of the
      other Party's Marks will not create in it, nor will it represent it has,
      any right, title, or interest in or to such Marks other than the licenses
      expressly granted herein. Each Party agrees not to do anything contesting
      or impairing the trademark rights of the other Party.

5.    Quality Standards. Each Party agrees to supply the other Party, upon
      request, with a reasonable number of samples of any promotional materials
      publicly disseminated by such Party which utilize the other Party's
      Marks. Each Party will comply with all applicable laws, regulations, and
      customs and obtain any required government approvals pertaining to use of
      the other Party's marks.

6.    Infringement Proceedings. Each Party agrees to promptly notify the other
      Party of any unauthorized use of the other Party's Marks of which it has
      actual knowledge. Each Party will have the sole right and discretion to
      bring proceedings alleging infringement of its Marks or unfair
      competition related thereto; provided, however, that each Party agrees to
      provide the other Party with its reasonable cooperation and assistance
      with respect to any such infringement proceedings.

7.    Representations and Warranties. Each Party represents and warrants to the
      other Party that: (i) such Party has the full corporate right, power and
      authority to enter into this Agreement and to perform the acts required
      of it hereunder; (ii) the execution of this Agreement by such Party, and
      the performance by such Party of its obligations and duties hereunder, do
      not and will not violate any agreement to which such Party is a party or
      by which it is otherwise bound; (iii) when executed and delivered by such
      Party, this Agreement will constitute the legal, valid and binding
      obligation of such Party, enforceable against such Party in accordance
      with its terms; and (iv) such Party acknowledges that the other Party
      makes no representations, warranties or agreements related to the subject
      matter hereof that are not expressly provided for in this Agreement
      (including its Exhibits). MP hereby represents and warrants that, except
      where failure to possess would not materially affect its ability to
      perform hereunder, it possesses all authorizations, approvals, consents,
      licenses, permits, certificates or other rights and permissions necessary
      to sell the Services. ICQ represents and warrants that, except where
      failure to possess would not materially affect its ability to perform
      hereunder, it possesses all authorizations, approvals, consents,
      licenses, permits, certificates or other rights and permissions necessary
      to offer and operate the ICQ Network.

8.    Confidentiality. Each Party acknowledges that Confidential Information
      may be disclosed to the other Party during the course of this Agreement.
      Each Party agrees that it will take reasonable steps, at least
      substantially equivalent to the steps it takes to protect its own
      proprietary information, during the term of this Agreement, and for a
      period of three years following expiration or termination of this

<PAGE>   28

      Agreement, to prevent the duplication or disclosure of Confidential
      Information of the other Party, other than by or to its employees or
      agents who must have access to such Confidential Information to perform
      such Party's obligations hereunder, who will each agree to comply with
      this section. Notwithstanding the foregoing, either Party may issue a
      press release or other disclosure containing Confidential Information
      without the consent of the other Party, to the extent such disclosure is
      required by law, rule, regulation or government or court order, provided
      that such Party shall first make every reasonable effort to avoid the
      disclosure. In such event, the disclosing Party will provide at least
      five (5) business days prior written notice of such proposed disclosure
      to the other Party. Further, in the event such disclosure is required of
      either Party under the laws, rules or regulations of the Securities and
      Exchange Commission or any other applicable governing body, such Party
      will (i) redact mutually agreed-upon portions of this Agreement to the
      fullest extent permitted under applicable laws, rules and regulations and
      (ii) submit a request to such governing body that such portions and other
      provisions of this Agreement receive confidential treatment under the
      laws, rules and regulations of the Securities and Exchange Commission or
      otherwise be held in the strictest confidence to the fullest extent
      permitted under the laws, rules or regulations of any other applicable
      governing body.

9.    Limitation of Liability; Disclaimer; Indemnification.

      9.1   LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO
            THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
            EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
            POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
            THE SALE OF SERVICES, THE USE OR INABILITY TO USE THE ICQ NETWORK,
            THE ICQ SERVICE, ICQ.COM OR THE MP AREAS, OR ARISING FROM ANY OTHER
            PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF
            REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY,
            "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN LIABLE
            TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED
            BY A THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO
            SECTION 9.3. EXCEPT AS PROVIDED IN SECTION 9.3, (I) LIABILITY
            ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT, OBJECTIVELY
            MEASURABLE DAMAGES, AND (II) THE MAXIMUM LIABILITY OF ONE PARTY TO
            THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION WITH THIS
            AGREEMENT WILL NOT EXCEED THE AGGREGATE PAYMENTS MADE UNDER THIS
            AGREEMENT; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE FOR THE
            AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY
            PURSUANT TO THE AGREEMENT.

      9.2   NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
            AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY
            SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS
            OR IMPLIED, REGARDING THE ICQ NETWORK, THE ICQ SERVICE, ICQ.COM,
            THE SERVICES OR THE MP AREAS, INCLUDING ANY IMPLIED WARRANTY OF
            MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED
            WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
            WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ICQ SPECIFICALLY
            DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF THE MP AREAS.

      9.3   Indemnity. Either Party will defend, indemnify, save and hold
            harmless the other Party and the officers, directors, agents,
            affiliates, distributors, franchisees and employees of the other
            Party from any and all third party claims, demands, liabilities,
            costs or expenses, including reasonable attorneys' fees
            ("Liabilities"), resulting from the indemnifying Party's breach of
            its warranty under Section 7 or 8 of Exhibit F, as applicable.

      9.4   Claims. If a Party entitled to indemnification hereunder (the
            "Indemnified Party") becomes aware of any matter it believes is
            indemnifiable hereunder involving any claim, action, suit,
            investigation, arbitration or other proceeding against the
            Indemnified Party by any third party (each an "Action"), the
            Indemnified Party will give the other Party (the "Indemnifying
            Party") prompt written notice of such Action. Such notice will (i)
            provide the basis on which indemnification is being asserted and
            (ii) be accompanied by copies of all relevant pleadings, demands,
            and other papers related to the Action and in the possession of the
            Indemnified Party. The Indemnifying Party will have a period of ten
            (10) business days after delivery of such notice to respond. If the
            Indemnifying Party elects to defend the Action or does not respond
            within the requisite ten (10) business day period, the Indemnifying
            Party will be obligated to defend the Action, at its own expense,
            using counsel of its choosing. The Indemnified Party will
            cooperate, at the expense of the Indemnifying Party, with the
            Indemnifying Party and its counsel in the defense and the
            Indemnified Party will have the right to participate fully, at its
            own expense, in the defense of such Action. If the Indemnifying
            Party responds within the required ten (10) business day period and
            elects not to defend such Action, the Indemnified Party will be
            free, without prejudice to any of the Indemnified Party's rights
            hereunder, to compromise or defend (and control the defense of)
            such Action. In such case, the Indemnifying Party will cooperate,
            at its own expense, with the Indemnified Party and its counsel in
            the defense against such Action and the Indemnifying Party will
            have the right to participate fully, at its own expense, in the
            defense of such Action. Any compromise or settlement of an Action
            will require the prior written consent of both Parties hereunder,
            such consent not to be unreasonably withheld or delayed.
<PAGE>   29
      9.5   Acknowledgment. ICQ and MP each acknowledges that the provisions of
            this Agreement were negotiated to reflect an informed, voluntary
            allocation between them of all risks (both known and unknown)
            associated with the transactions contemplated hereunder. The
            limitations and disclaimers related to warranties and liability
            contained in this Agreement are intended to limit the circumstances
            and extent of liability. The provisions of this Section 9 will be
            enforceable independent of and severable from any other enforceable
            or unenforceable provision of this Agreement.

10.   Solicitation of ICQ Users. During the term of the Agreement and for a two
      year period thereafter, MP will not use the ICQ Network (including,
      without limitation, the e-mail network contained therein) to solicit ICQ
      Users on behalf of another Interactive Service. More generally, MP will
      not send unsolicited, commercial e-mail (i.e., "spam") or other online
      communications through or into ICQ's products or services, absent a Prior
      Business Relationship. For purposes of this Agreement, a "Prior Business
      Relationship" will mean that the ICQ User to whom commercial e-mail or
      other online communication is being sent has voluntarily either (i)
      engaged in a transaction with MP or (ii) provided information to MP
      through a contest, registration, or other communication, which included
      clear notice to the ICQ User that the information provided could result
      in commercial e-mail or other online communication being sent to that ICQ
      User by MP or its agents. Any commercial e-mail communications to ICQ
      Users which are otherwise permitted hereunder, will (a) include a
      prominent and easy means to "opt-out" of receiving any future commercial
      e-mail or other online communications from MP, and (b) shall also be
      subject to ICQ's then-standard restrictions on distribution of bulk
      e-mail (e.g., related to the time and manner in which such e-mail can be
      distributed through or into the ICQ product or service in question).

11.   ICQ User Communications. To the extent that MP is permitted to
      communicate with ICQ Users under Section 10 of this Exhibit G, in any
      such communications to ICQ Users on or off the MP Areas (including,
      without limitation, e-mail solicitations), MP will not encourage ICQ
      Users to take any action inconsistent with the scope and purpose of this
      Agreement, including without limitation, the following actions: (i) using
      an Interactive Site other than the MP Areas for the purchase of Services,
      or (ii) bookmarking of Interactive Sites. Additionally, with respect to
      such ICQ User communications, in the event that MP encourages an ICQ User
      to purchase products through such communications, MP shall ensure that
      (a) the ICQ Network is promoted as the primary means through which the
      ICQ User can access the MP Areas and (b) any link to the MP Areas will
      link to a page which indicates to the ICQ User that such user is in a
      site which is affiliated with the ICQ Network.

12.   Collection and Use of User Information. The collection, use and
      disclosure by MP of information obtained from ICQ Users under this
      Agreement ("User Information") shall comply with (i) all applicable laws
      and regulations and (ii) ICQ's standard privacy policies, available on
      the Interactive Site ICQ.com (or, in the case of the MP Areas, MP's
      standard privacy policies so long as such policies are prominently
      published on the site and provide adequate notice, disclosure and choice
      to users regarding MP's collection, use and disclosure of user
      information). MP will not disclose User Information collected hereunder
      to any third party in a manner that identifies ICQ Users as end users of
      an ICQ product or service or use Member Information collected under this
      Agreement to market another Interactive Service.

13.   Statements through ICQ Network. Neither Party shall make, publish, or
      otherwise communicate through the ICQ Network or the MP Areas any
      deleterious remarks concerning the other Party or its affiliates,
      directors, officers, employees, or agents (including, without limitation,
      the other Party's business projects, business capabilities, performance
      of duties and services, or financial position) which remarks are based on
      the relationship established by this Agreement or information exchanged
      hereunder.

14.   Excuse. Neither Party will be liable for, or be considered in breach of
      or default under this Agreement on account of, any delay or failure to
      perform as required by this Agreement as a result of any causes or
      conditions which are beyond such Party's reasonable control and which
      such Party is unable to overcome by the exercise of reasonable diligence.

15.   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.

16.   Notice. Any notice, approval, request, authorization, direction or other
      communication under this Agreement will be given in writing and will be
      deemed to have been delivered and given for all purposes (i) on the
      delivery date if delivered by electronic mail on the ICQ Network (to the
      e-mail address "AOLNotice@aol.com" in the case of ICQ) or by confirmed
      facsimile; (ii) on the delivery date if delivered personally to the Party
      to whom the same is directed; (iii) one business day after deposit with a
      commercial overnight carrier, with written verification of receipt; or
      (iv) five (5) business days after the mailing date, whether or not
      actually received, if sent by U.S. mail, return receipt requested,
      postage and charges prepaid, or any other means of rapid mail delivery
      for which a receipt is available. In the case of ICQ, such notice will be
<PAGE>   30
      provided to both the President for Business Affairs (fax no.
      703-265-1206) and the Deputy General Counsel (fax no. 703-265-1105), each
      at the address of ICQ set forth in the first paragraph of this Agreement.
      In the case of MP, except as otherwise specified herein, the notice
      address will be the address for MP set forth in the first paragraph of
      this Agreement, with the other relevant notice information, including the
      recipient for notice and, as applicable, such recipient's fax number or
      ICQ e-mail address, to be as reasonably identified to ICQ by MP.

17.   No Waiver. The failure of either Party to insist upon or enforce strict
      performance by the other Party of any provision of this Agreement or to
      exercise any right under this Agreement will not be construed as a waiver
      or relinquishment to any extent of such Party's right to assert or rely
      upon any such provision or right in that or any other instance; rather,
      the same will be and remain in full force and effect.

18.   Return of Information. Upon the expiration or termination of this
      Agreement, each Party will, upon the written request of the other Party,
      return or destroy (at the option of the Party receiving the request) all
      confidential information, documents, manuals and other materials
      specified the other Party.

19.   Survival. Sections 4.1, 4.2, 4.3, 5.2 and 6 of the body of the Agreement,
      Sections 7 and 8 of Exhibit F and Sections 8 through 29 of this Exhibit,
      will survive the completion, expiration, termination or cancellation of
      this Agreement.

20.   Entire Agreement. This Agreement sets forth the entire agreement and
      supersedes any and all prior agreements of the Parties with respect to
      the transactions set forth herein. Neither Party will be bound by, and
      each Party specifically objects to, any term, condition or other
      provision which is different from or in addition to the provisions of
      this Agreement (whether or not it would materially alter this Agreement)
      and which is proffered by the other Party in any correspondence or other
      document, unless the Party to be bound thereby specifically agrees to
      such provision in writing.

21.   Amendment. No change, amendment or modification of any provision of this
      Agreement will be valid unless set forth in a written instrument signed
      by the Party subject to enforcement of such amendment signed by an
      executive of at least the same standing to the executive who signed the
      Agreement.

22.   Further Assurances. Each Party will take such action (including, but not
      limited to, the execution, acknowledgment and delivery of documents) as
      may reasonably be requested by any other Party for the implementation or
      continuing performance of this Agreement.

23.   Assignment. MP will not assign this Agreement or any right, interest or
      benefit under this Agreement without the prior written consent of ICQ,
      which consent shall not be unreasonably withheld or delayed.. ICQ shall
      not assign this Agreement to any Section 3.5 Entity without the prior
      written consent of MP, which consent shall not be unreasonably withheld
      or delayed. Subject to the foregoing, this Agreement will be fully
      binding upon, inure to the benefit of and be enforceable by the Parties
      hereto and their respective successors and assigns.

24.   Construction; Severability. In the event that any provision of this
      Agreement conflicts with the law under which this Agreement is to be
      construed or if any such provision is held invalid by a court with
      jurisdiction over the Parties to this Agreement, (i) such provision will
      be deemed to be restated to reflect as nearly as possible the original
      intentions of the Parties in accordance with applicable law, and (ii) the
      remaining terms, provisions, covenants and restrictions of this Agreement
      will remain in full force and effect.

25.   Remedies. Except where otherwise specified, the rights and remedies
      granted to a Party under this Agreement are cumulative and in addition
      to, and not in lieu of, any other rights or remedies which the Party may
      possess at law or in equity; provided that, in connection with any
      dispute hereunder, MP will be not entitled to offset any amounts that it
      claims to be due and payable from ICQ against amounts otherwise payable
      by MP to ICQ.

26.   Applicable Law. Except as otherwise expressly provided herein, this
      Agreement will be interpreted, construed and enforced in all respects in
      accordance with the laws of the Commonwealth of Virginia except for its
      conflicts of laws principles.

27.   Export Controls. Both Parties will adhere to all applicable laws,
      regulations and rules relating to the export of technical data and will
      not export or re-export any technical data, any products received from
      the other Party or the direct product of such technical data to any
      proscribed country listed in such applicable laws, regulations and rules
      unless properly authorized.

28.   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.

29.   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 document
<PAGE>   31

                                    EXHIBIT H

WARRANT AGREEMENT

<PAGE>   32
                                                                    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

                                                December 22, 1999

      1.    GENERAL.

            (a) THIS CERTIFIES that, for value received, AMERICA ONLINE, INC.
("AOL"), 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 463,246 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 the Stipulated Event (as defined below) occurs prior
to the IPO Date, 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 percent
(3%) of the number of shares of voting capital stock of the Corporation
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 of capital stock reserved for grant or issuance to officers,

                                       1

<PAGE>   33

                                                                    CONFIDENTIAL

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 percent (3%) 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 percent (3%) 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").

      This Warrant is being issued pursuant to an Interactive Marketing
Agreement dated as of the date hereof (the "Agreement"), between the
Corporation and ICQ, 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. 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.

      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 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, 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 ten days, after the rights represented by this
Warrant shall have been so exercised. The person in whose name any

                                       2

<PAGE>   34

                                                                    CONFIDENTIAL

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").

      B =   the Warrant Price in effect under this Warrant at the time the Net
            Issue Election is made pursuant to this Section 3.

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

            (i)   (A) 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

                                       3

<PAGE>   35

                                                                    CONFIDENTIAL

      (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 as determined by a nationally recognized independent
      investment banking firm jointly selected by the Corporation and the
      holder of this Warrant or, if such selection cannot be made within five
      business days after delivery of the Notice of Exchange referred to above,
      by a nationally recognized independent investment banking firm selected
      by the American Arbitration Association then obtaining.

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 five 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.

      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

                                       4

<PAGE>   36

                                                                    CONFIDENTIAL

      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 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 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:

                        (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

                                       5

<PAGE>   37

                                                                    CONFIDENTIAL

            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.

                  (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

                                       6

<PAGE>   38

                                                                    CONFIDENTIAL

   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 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 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

                                       7

<PAGE>   39

                                                                    CONFIDENTIAL

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-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.

                                       8

<PAGE>   40

                                                                    CONFIDENTIAL

      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 Third Amended and Restated
Investors' Rights Agreement, dated as of December 22, 1999, 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 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.

                                       9

<PAGE>   41

                                                                    CONFIDENTIAL

      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.

      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, advices 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

                                       10

<PAGE>   42

                                                                    CONFIDENTIAL

            If to AOL as follows:

               America Online, Inc.
               22000 AOL Way
               Dulles, Virginia  20166
               Attention:  General Counsel
               Telecopier: (703) 265-2208
               Electronic mail:  PTCapp@aol.com

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 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
Commonwealth of Virginia 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 AOL.

      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.

                                     * * *

                                       11

<PAGE>   43

                                                                    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

                                    AMERICA ONLINE, INC.

                                    By:  /s/ AMERICA ONLINE, INC.
                                        ----------------------------------------
                                          Name:
                                          Title:

                                       12

<PAGE>   44

                                                                    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 _________ of Varsitybooks.com Inc.,
and herewith makes payment of $_________ therefor, and requests that the
certificates for such shares be issued in the name of and delivered to,
_________________________________, whose address is
_________________________________________________.

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

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

                                       13

<PAGE>   45

                                                                    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 ________ 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
________________.

Dated:

                                    -----------------------------
                                    Name of Holder:

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

                                       14

<PAGE>   46

                                                                    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 _________ 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:

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

                                       15

<PAGE>   47
      ADDENDUM NUMBER 1 TO VARSITYBOOKS.COM INC. STOCK SUBSCRIPTION WARRANT

       This Addendum (this "Addendum") to that certain VarsityBooks.com Inc.
Stock Subscription Warrant (the "Warrant") dated December 22, 1999, by and
between America Online, Inc. ("AOL"), and VarsityBooks.com Inc. (the
"Corporation") is made as of December 22, 1999, by and between AOL and the
Corporation. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Warrant.

       For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties desire to amend certain provisions of the
Warrant as follows:

       Exhibit A of the Warrant shall be amended and restated in its entirety
to read as set forth on Exhibit A attached hereto.

       In witness whereof the Parties have executed this Addendum as of the
date written hereinabove.

AMERICA ONLINE, INC.

BY:
   ---------------------------------
TITLE:
      ------------------------------

VARSITYBOOKS.COM INC.

BY:
   ---------------------------------
TITLE:
      ------------------------------

                                      16
<PAGE>   48
                                    EXHIBIT A

                         NUMBER OF SHARES FOR WHICH THE
                          WARRANT SHALL BE EXERCISABLE:

Up to a maximum 463,246 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) 154,414                                  Fully vested as of the date hereof.
---------------------------------------------------------------------------------------------------
(B) *                                        Shall vest and become exercisable upon the
                                             attainment between the Effective Date and March 31,
                                             2000 of * "click-thrus" of the Promotions;
                                             provided, however, that if the * threshold is
                                             not attained prior to March 31, 2000, no Warrant
                                             Shares shall vest pursuant to this Exhibit A,
                                             Section (B) and these Warrant Shares shall not vest
                                             in subsequent periods.
---------------------------------------------------------------------------------------------------
(C) *                                        Shall vest and become exercisable upon the
                                             attainment between April 1, 2000 and June 30, 2000
                                             of * "click-thrus" of the Promotions;
                                             provided, however, that if the * threshold is
                                             not attained between April 1, 2000 and June 30,
                                             2000, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (C) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(D) *                                        Shall vest and become exercisable upon the
                                             attainment between July 1, 2000 and September 30,
                                             2000 of * "click-thrus" of the Promotions;
                                             provided, however, that if the * threshold is
                                             not attained between July 1, 2000 and September 30,
                                             2000, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (D) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(E) *                                        Shall vest and become exercisable upon the
                                             attainment between October 1, 2000 and December 31,
                                             2000 of * "click-thrus" of the Promotions;
                                             provided, however, that if the * threshold is
                                             not attained between October 1, 2000 and December
                                             31, 2000, no Warrant Shares shall vest pursuant to
                                             this Exhibit A, Section (E) and these Warrant Shares
                                             shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(F) *                                        Shall vest and become exercisable upon the
                                             attainment between the January 1, 2001 and March 31,
                                             2001 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between January 1, 2001 and March 31,
                                             2000, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (F) and these Warrant Shares
                                             shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(G) *                                        Shall vest and become exercisable upon the
                                             attainment between April 1, 2001 and June 30, 2001
                                             of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between April 1, 2001 and June 30,
                                             2001, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (G) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(H) *                                        Shall vest and become exercisable upon the
                                             attainment between July 1, 2001 and September 30,
                                             2001 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between July 1, 2001 and September 30,
                                             2001, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (H) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(I) *                                        Shall vest and become exercisable upon the
                                             attainment between October 1, 2001 and December 31,
                                             2001 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between October 1, 2001 and December
                                             31, 2001, no Warrant Shares shall vest pursuant to
                                             this Exhibit A, Section (I) and these Warrant Shares
                                             shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(J) *                                        Shall vest and become exercisable upon the
                                             attainment between the January 1, 2002 and March 31,
                                             2002 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between January 1, 2002 and March 31,
                                             2002, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (J) and these Warrant Shares
                                             shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(K) *                                        Shall vest and become exercisable upon the
                                             attainment between April 1, 2002 and June 30, 2002
                                             of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between April 1, 2002 and June 30,
                                             2002, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (K) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(L) *                                        Shall vest and become exercisable upon the
                                             attainment between July 1, 2002 and September 30,
                                             2002 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between July 1, 2002 and September 30,
                                             2002, no Warrant Shares shall vest pursuant to this
                                             Exhibit A, Section (L) and these Warrant Shares shall
                                             not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
(M) *                                        Shall vest and become exercisable upon the
                                             attainment between October 1, 2002 and December 22,
                                             2002 of ** "click-thrus" of the Promotions;
                                             provided, however, that if the ** threshold is
                                             not attained between October 1, 2002 and December
                                             31, 2002, no Warrant Shares shall vest pursuant to
                                             this Exhibit A, Section (M) and these Warrant Shares
                                             shall not vest in subsequent periods.
---------------------------------------------------------------------------------------------------
</TABLE>

* Notwithstanding any provision of this Exhibit A to the contrary, in event
that ICQ shall fail to deliver the * required to be delivered under the
Agreement prior to January 15, 2001, (i) the "click-thru" thresholds required
under each of Sections (F), (G), (H) and (I) of this Exhibit A shall be
increased from * and (ii) the "click-thru" thresholds required under each of
Sections (J), (K), (L) and (M) of this Exhibit A shall be increased from *

                                      17<PAGE>   1
                                                                   EXHIBIT 10.10

                               CENTEX CORPORATION

                   AMENDED AND RESTATED 1987 STOCK OPTION PLAN

1.       PURPOSE

         The purpose of this Plan is to assist Centex Corporation, a Nevada
corporation, in attracting and retaining as officers and key employees of the
Company and its Affiliates, and as non-employee directors of the Company,
individuals of training, experience and ability and to furnish additional
incentive to such individuals by encouraging them to become owners of Shares of
the Company's capital stock, by granting to such individuals Incentive Options,
Nonqualified Options, Restricted Stock, or any combination of the foregoing.

2.       DEFINITIONS

         Unless the context otherwise requires, the following words as used
herein shall have the following meanings:

         "Act" -- The Securities Exchange Act of 1934, as amended.

         "Affiliates" -- Any corporation or other entity which is a direct or
         indirect parent or subsidiary (including, without limitation,
         partnerships and limited liability companies) of the Company.

         "Agreement" -- The written agreement between the Company and the
         Optionee evidencing the Option granted by the Company and the
         understanding of the parties with respect thereto.

         "Board" -- The Board of Directors of the Company as the same may be
         constituted from time to time.

         "Code" -- The Internal Revenue Code of 1986, as amended from time to
         time.

         "Committee" -- The Committee provided for in Section 3 of this Plan, as
         such Committee may be constituted from time to time.

         "Company"-- Centex Corporation, a Nevada corporation.

         "Fair Market Value" -- If a Share is traded on one or more established
         market or exchanges, the mean of the opening and closing price of the
         Share in the primary market or exchange on which the Share is traded,
         and if the Share is not so traded or the Share does not trade on the
         relevant date, the value determined in good faith by the Board. For
         purposes of valuing Shares to be made subject to Incentive Options, the
         Fair Market Value of stock shall be determined without regard to any
         restriction other than one which, by its terms, will never lapse.

         "Incentive Option" -- Stock Options that are intended to satisfy the
         requirements of Section 422 of the Code and Section 16 of this Plan.

         "Non-employee Director" -- An individual who satisfies the requirements
         of Rule 16b-3 promulgated under the Act.

                                       1
<PAGE>   2

         "Nonqualified Options" -- Stock Options which do not satisfy the
         requirements of Section 422 of the Code.

         "Option" -- An option to purchase one or more Shares of the Company
         granted under and pursuant to the Plan. Such Option may be either an
         Incentive Option or a Nonqualified Option.

         "Optionee" -- An individual who has been granted an Option under this
         Plan and who has executed a written option Agreement with the Company.

         "Plan"-- This Centex Corporation 1987 Stock Option Plan.

         "Permitted Transferees" -- (i) members of the Optionee's immediate
         family, (ii) one or more trusts for the benefit of such members of the
         Optionee's immediate family, (iii) partnerships in which such immediate
         family members are the only partners and (iv) limited liability
         companies in which such immediate family members are the only members.

         "Restricted Stock" -- Shares issued pursuant to Section 19 of the Plan.

         "Senior Management" -- Members of the senior management group of the
         Company and its Affiliates, such senior managers to be identified by
         the Chairman and Vice Chairman of the Board of the Company.

         "Share" -- A share of the Company's present twenty-five cents ($0.25)
         par value common stock and any share or shares of capital stock or
         other securities of the Company hereafter issued or issuable upon, in
         respect of or in substitution or in exchange for each present share.
         Such Shares may be unissued or reacquired Shares, as the Board, in its
         sole and absolute discretion, shall from time to time determine.

3.       ADMINISTRATION

         The Plan shall be administered by a committee (the "Committee")
comprised of two or more Non-employee Directors appointed by the Board from time
to time. The Committee shall (a) select the eligible employees or directors who
are to receive Options or awards of Restricted Stock under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of Options or awards of Restricted Stock, (c) interpret the Plan, and
(d) make all other determinations necessary or advisable for the administration
of the Plan. The Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. The Committee's determinations under the Plan
shall be final and binding on all persons.

4.       SHARES SUBJECT TO PLAN

         (a) A maximum of 7,065,139 Shares shall be subject to grants of Options
and awards of Restricted Stock under the Plan; provided that such maximum shall
be increased or decreased as provided below in Section 12.

         (b) At any time and from time to time after the Plan takes effect, the
Committee, pursuant to the provisions herein set forth, may grant Options and
award Restricted Stock until the maximum number of Shares shall be exhausted or
the Plan shall be sooner terminated; provided, however, that no Option shall be
granted and no Restricted Stock shall be awarded after May 19, 2001.

                                       2
<PAGE>   3

         (c) Should any Option expire or be cancelled without being fully
exercised, or should any Restricted Stock previously awarded be reacquired by
the Company, the number of Shares with respect to which such Option shall not
have been exercised prior to its expiration or cancellation and the number of
Shares of such Restricted Stock so reacquired may again be optioned or awarded
pursuant to the provisions hereof.

         (d) Any Shares withheld pursuant to subsection 18(c) shall not be
available after such withholding for being optioned or awarded pursuant to the
provisions hereof.

5.       ELIGIBILITY

         Eligibility for the receipt of the grant of Options under the Plan
shall be confined to (a) a limited number of persons who are employed by the
Company, or one or more of its Affiliates and who are officers of or who, in the
opinion of the Committee, hold other key positions in or for the Company or one
or more of its Affiliates and (b) directors of the Company, including directors
who are not employees of the Company or its Affiliates; provided that only
employees of the Company or its Affiliates shall be eligible for the grant of
Incentive Options. In addition, an individual who becomes a director of the
Company, but who is not at the time he becomes a director also an employee of
the Company, shall not be eligible for a grant of Options or an award of
Restricted Stock, and shall not be eligible for the grant of an option, stock
allocation, or stock appreciation right under any other plan of the Company or
its affiliates (within the meaning of Rule 12b-2 promulgated under the Act)
until the Board expressly declares such person eligible by resolution. In no
event may an Option be granted to an individual who is not an employee of the
Company or an Affiliate or a director of the Company.

6.       GRANTING OF OPTIONS

         (a) From time to time while the Plan is in effect, the Committee may in
its absolute discretion, select from among the persons eligible to receive a
grant of Options under the Plan (including persons who have already received
such grants of Options) such one or more of them as in the opinion of the
Committee should be granted Options. The Committee shall thereupon, likewise in
its absolute discretion, determine the number of Shares to be allotted for
option to each person so selected; provided, however, that the total number of
Shares subject to Options granted to any one person, including directors of the
Company, when aggregated with the number of Shares of Restricted Stock awarded
to such person, shall not exceed 706,513 Shares.

         (b) Each person so selected shall be offered an Option to purchase the
number of Shares so allotted to him, upon such terms and conditions, consistent
with the provisions of the Plan, as the Committee may specify. Each such person
shall have a reasonable period of time, to be fixed by the Committee, within
which to accept or reject the proffered Option. Failure to accept within the
period so fixed may be treated as a rejection.

         (c) Each person who accepts an Option offered to him shall enter into
an Agreement with the Company, in such form as the Committee may prescribe,
setting forth the terms and conditions of the Option, whereupon such person
shall become a participant in the Plan. In the event an individual is granted
both one or more Incentive Options and one or more Nonqualified Options, such
grants shall be evidenced by separate Agreements, one each for the Incentive
Option grants and one each for the Nonqualified Options grants. The date which
the Committee specifies to be the grant date of an Option to an individual shall
constitute the date on which the Option covered by such Agreement is granted. In
no event, however, shall an Optionee gain any rights in addition to those
specified by the Committee in its grant, regardless of the time that may pass
between the grant of the Option and the actual signing of the Agreement by the
Company and the Optionee.

                                       3
<PAGE>   4

7.       OPTION PRICE

         The option price for each Share covered by each Incentive Option shall
not be less than the greater of (a) the par value of each such Share or (b) the
Fair Market Value of the Share at the time such Option is granted, except as
provided hereinafter. The option price for each Share covered by each
Nonqualified Option shall not be less than the greater of (a) the par value of
each such Share or (b) 85% of the Fair Market Value of the Share at the time the
Option is granted; provided, however, that the number of Shares covered by
Nonqualified Options granted under this Plan that have an option price less than
the Fair Market Value of a Share at the time the respective Option is granted
shall not exceed 10% of the total number of Shares authorized to be issued under
this Plan. If the Company or an Affiliate agrees to substitute a new Option
under the Plan for an old Option, or to assume an old Option, by reason of a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization, or liquidation (any of such events being referred to herein as a
"Corporate Transaction"), the option price of the Shares covered by each such
new Option or assumed Option may be other than the Fair Market Value of the
stock at the time the Option is granted as determined by reference to a formula,
established at the time of the Corporate Transaction, which will give effect to
such substitution or assumption; provided, however, in no event shall --

         (a) the excess of the aggregate Fair Market Value of the Share subject
to the Option immediately after the substitution or assumption over the
aggregate option price of such Shares be more than the excess of the aggregate
Fair Market Value of all Shares subject to the Option immediately prior to the
substitution or assumption over the aggregate option price of such Shares

         (b) in the case of an Incentive Option, the new Option or the
assumption of the old Option give the Optionee additional benefits which he
would not have under the old Option; or

         (c) the ratio of the option price to the Fair Market Value of the stock
subject to the Option immediately after the substitution or assumption be more
favorable to the Optionee than the ratio of the option price to the Fair Market
Value of the stock subject to the old Option immediately prior such substitution
or assumption, on a Share by Share basis.

         Notwithstanding the above, the provisions of this Section 7 with
respect to the Option price in the event of a Corporate Transaction shall, in
case of an Incentive Option, be subject to the requirements of Section 424(a) of
the Code and the Treasury regulations and revenue rulings promulgated
thereunder. In the case of an Incentive Option, in the event of a conflict
between the terms of this Section 7 and the above cited statute, regulations,
and rulings, or in the event of an omission in this Section 7 of a provision
required by said laws, the latter shall control in all respects and are hereby
incorporated herein by reference as if set out at length.

8.       OPTION PERIOD

         (a) Each Option shall run for such period of time as the Committee may
specify, but in no event for longer than ten (10) years from the date when the
Option is granted, including the period of time provided in subsections (i) and
(ii) of this subsection (a); and subject to such limits, and the further
condition that, unless designated otherwise by the Committee, no Incentive
Option shall become exercisable prior to one year from the date of its grant,

             (i) Except as provided below in this subsection (i), all rights to
         exercise an Option shall terminate within three months after the date
         the Optionee ceases to be an employee of at least one of the employers
         in the group of employers consisting of the Company and its Affiliates,
         or after the date the Optionee ceases to be a director of the Company,
         whichever may occur later, for any reason other than

                                       4
<PAGE>   5

         death, except that, (x) in the case of a Nonqualified Option which is
         held by an Optionee who is, on the date of cessation referred to in
         this clause, an officer or director of the Company (within the
         meanings thereof under Section 16b) of the Act), all rights to
         exercise such Option shall terminate within seven months after the
         date the Optionee ceases to be an employee of at least one of the
         employers in the group of employers consisting of the Company and its
         Affiliates, or, if later, after the date the Optionee ceases to be a
         director of the Company, for any reason other than death; and, except
         that, (y) the Committee, in its discretion, may provide in new Option
         grants or amend outstanding Options to provide an extended period of
         time during which an Optionee can exercise a Nonqualified Option to
         the maximum permissible period for which such Optionee's Option would
         have been exercisable in the absence of the Optionee's ceasing to be
         an employee of the Company and its Affiliates or ceasing to be a
         director of the Company; and, except that (z) in case the employment
         of the Optionee is terminated for cause, the Option shall thereafter
         be null and void for all purposes.

             (ii) If the Optionee ceases to be employed by at least one of the
         employers in the group of employers consisting of the Company and its
         Affiliates, or ceases to be a director of the Company, whichever may
         occur later, by reason of his death, all rights to exercise such Option
         shall terminate fifteen (15) months thereafter.

             (iii) If an Option is granted with a term shorter than ten (10)
         years, the Committee may extend the term of the Option, but for not
         more than ten (10) years from the date when the Option was originally
         granted.

9.       OPTIONS NOT TRANSFERABLE

         No Option or interest therein shall be transferable by the person to
whom it is granted otherwise than by will or by the applicable laws of descent
and distribution. Notwithstanding the foregoing, the Committee may, in its sole
discretion, provide in the Agreement relating to the grant of an Option that the
Optionee may transfer such Option, without consideration, to members of the
Optionee's immediate family or to one or more trusts for the benefit of such
immediate family members or partnerships in which such immediate family members
are the only partners. For purposes of this Section 9, "immediate family" shall
mean the Optionee's spouse, parents, children (including adopted children) and
grandchildren.

         Further, notwithstanding the foregoing, the Committee may, in its sole
discretion, provide in each of those Agreements relating to the grant of an
Option whose term will expire in 2000, 2001, 2003, 2004, 2005, 2006 or 2007 that
a Director or Senior Management Optionee may transfer such Option to one or more
Permitted Transferees with or without consideration to the Optionee provided
that the following conditions are satisfied with respect to such transfer: (i)
such transfer is made pursuant to the program that the Company has created to
facilitate the reduction of its stock option overhang and is accomplished on or
before March 5, 2000; (ii) the Permitted Transferee exercises the Option not
more than 30 days following such transfer; (iii) all fees and expenses charged
by accounting firms, law firms and all other third party consultants in
connection with such transfer are paid by the Optionee, and such fees and
expenses are not otherwise paid or reimbursed by the Company or any of its
Affiliates; (iv) the Permitted Transferee agrees to be bound by all of the terms
of the Agreement, except that once transferred by the Optionee to such Permitted
Transferee, the Option may not be subsequently transferred except back to the
Optionee; (v) if the consideration tendered by the Permitted Transferee for the
Option is a term obligation, the principal amount under such term obligation
will be due in full no later than the fifth anniversary of the Option's
expiration date; and (vi) the Permitted Transferee agrees to inform the
Company's Stock Plan Administrator upon (a) the sale or other transfer of the
shares underlying the Option and (b) any other event or action taken by the
Permitted Transferee with respect to the Option, the shares underlying the
Option or the consideration for the Option, where such event or action will give
rise to a recognizable event for the Company.

                                       5
<PAGE>   6

10.      EXERCISE OF OPTIONS

         (a) During the lifetime of an Optionee only he or his guardian or legal
representative or transferee may exercise an Option granted to him. In the event
of his death, any then exercisable portion of his Option may, within fifteen
(15) months thereafter, or earlier date of termination of the Option, be
exercised in whole or in part by any person empowered to do so under the
deceased Optionee's will or under the applicable laws of descent and
distribution.

         (b) At any time, and from time to time, during the period when any
Option, or a portion thereof, is exercisable, such Option, or portion thereof,
may be exercised in whole or in part; provided, however, that the Committee may
require any Option which is partially exercised to be so exercised with respect
to at least a stated minimum number of Shares.

         (c) Each exercise of an Option or portion or part thereof shall be
evidenced by a notice in writing to the Company accompanied by payment in full
of the option price of the Shares then being purchased. Payment in full shall
mean payment of the full amount due, either in cash, by certified check or
cashier's check or, with the consent of the Committee, with Shares owned by the
Optionee, including an actual or deemed multiple series of exchanges of such
Shares.

         (d) No Shares shall be issued until full payment therefor has been
made, and an Optionee shall have none of the rights of a stockholder until
Shares are issued to him.

         (e) Nothing herein or in any Agreement executed or Option granted
hereunder shall require the Company to issue any Shares upon exercise of an
Option if such issuance would, in the opinion of counsel for the Company,
constitute a violation of the Securities Act of 1933, as amended, or any similar
or superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. Upon the exercise of an Option or portion or part
thereof, the Optionee shall give to the Company satisfactory evidence that he is
acquiring such Shares for the purpose of investment only and not with a view to
their distribution; provided, however, if or to the extent that the Shares
subject to the Option shall be included in a registration statement filed by the
Company, or one of its Affiliates, such investment representation shall be
abrogated.

11.      DELIVERY OF STOCK CERTIFICATES

         As promptly as may be practicable after an Option, or a portion or part
thereof, has been exercised as hereinabove provided, the Company shall make
delivery of one or more certificates for the appropriate number of Shares. In
the event that an Optionee exercises both an Incentive Option, or a portion
thereof, and a Nonqualified Option, or a portion thereof, separate stock
certificates shall be issued, one for the Shares subject to the Incentive Option
and one for the Shares subject to the Nonqualified Option.

12.      CHANGES IN COMPANY'S SHARES AND CERTAIN CORPORATE TRANSACTIONS

         (a) If at any time while the Plan is in effect there shall be an
increase or decrease in the number of issued and outstanding Shares of the
Company effected without receipt of consideration therefor by the Company,
through the declaration of a stock dividend or through any recapitalization or
merger or otherwise in which the Company is the surviving corporation, resulting
in a stock split-up, combination or exchange of Shares of the Company, then and
in each such event:

             (i) An appropriate adjustment shall be made in the maximum number
         of Shares then subject to being optioned or awarded as Restricted Stock
         under the Plan, to the end that the same proportion of

                                       6
<PAGE>   7

         the Company's issued and outstanding Shares shall continue to be
         subject to being so optioned and awarded;

             (ii) Appropriate adjustment shall be made in the number of Shares
         and the option price per Share thereof then subject to purchase
         pursuant to each Option previously granted, to the end that the same
         proportion of the Company's issued and outstanding Shares in each such
         instance shall remain subject to purchase at the same aggregate option
         price: and

             (iii) In the case of Incentive Options, any such adjustments shall
         in all respects satisfy the requirements of Section 424(a) of the Code
         and the Treasury regulations and revenue rulings promulgated
         thereunder.

         Except as is otherwise expressly provided herein, the issue by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or option price of Shares then subject to
outstanding Options granted under the Plan. Furthermore, the presence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities or preferred or
preference stock which would rank above the Shares subject to outstanding
Options granted under the Plan; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the assets
or business of the Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.

         (b) Notwithstanding anything to the contrary above, a dissolution or
liquidation of the Company, a merger (other than a merger effecting a
reincorporation of the Company in another state) or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the stockholders of the parent of
the Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the stockholders of the Company
and their proportionate interests therein immediately prior to the transaction),
a transaction in which another corporation becomes the owner of 50% or more of
the total combined voting power of all classes of stock of the Company, or a
change in control (as specified below), shall cause every Option then
outstanding to become exercisable in full, subject to the limitation on the
aggregate Fair Market Value of Shares that may become first exercisable during
any calendar year set forth in Section 16, immediately prior to such
dissolution, liquidation, merger, consolidation, transaction, or change in
control, to the extent not theretofore exercised, without regard to the
determination as to the periods and installments of exercisability contained in
the Agreements if (and only if) such Options have not at that time expired or
been terminated. For purposes of this paragraph, a change in control shall be
deemed to have taken place if: (i) a third person, including a "group" as
defined in Section 13(d)(3) of the Act, becomes the beneficial owner of Shares
of the Company having 50% or more of the total number of votes that may be cast
for the election of directors of the Company; or (ii) as a result of, or in
connection with, a contested election for directors, the persons who were
directors of the Company immediately before such election shall cease to
constitute a majority of the Board. Notwithstanding the foregoing provisions of
this paragraph, in the event of any such dissolution, merger, consolidation,
transaction, or change in control, the Board may completely satisfy all
obligations of the Company and its Affiliates with respect to any Option
outstanding on the date of such event by delivering to the Optionee cash in an
amount equal to the difference between the aggregate exercise price for Shares
under the Option and the Fair Market Value of such Shares on the date of such
event, such payment to be made within a reasonable time after such event.

                                       7
<PAGE>   8

13.      EFFECTIVE DATE

         The Plan shall be effective on May 20, 1987, the date of its adoption
by the Board, but shall be submitted to the stockholders of the Company for
ratification at the next regular or special meeting thereof to be held within
twelve (12) months after the Board shall have adopted the Plan. If at such a
meeting of the stockholders of the Company a quorum is present, the Plan shall
be presented for ratification, and unless at such a meeting the Plan is ratified
by the affirmative vote of a majority of the outstanding $0.25 par value common
stock of the Company, then and in such event, the Plan and all Options granted
under the Plan and all awards of Restricted Stock under the Plan shall become
null and void and of no further force or effect.

14.      AMENDMENT, SUSPENSION OR TERMINATION

         (a) Subject to the other terms and condition of this Plan and the
limitations set forth in subsection 14(b) below, the Board may at any time
amend, suspend or terminate the Plan; provided, however, that after the
stockholders have ratified the Plan, the Board may not, without approval of the
stockholders of the Company, amend the Plan so as to:

             (i) Increase the maximum number of Shares subject thereto, as
         specified above in Sections 4(a) and 12; or

             (ii) Increase the proportionate number of Shares which may be
         purchased pursuant to Option by any one person or awarded as Restricted
         Stock to any one person, as specified above in Section 6(a) or below in
         Section 19(a).

         (b) Neither the Board nor the Committee may amend the Plan or any
Agreement to reduce the option price of an outstanding Option or modify, impair
or cancel any existing Option without the consent of the holder thereof.

15.      REQUIREMENTS OF LAW

         Notwithstanding anything contained herein to the contrary, the Company
shall not be required to sell or issue Shares under any Option if the issuance
thereof would constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority or any
national securities exchange; and as a condition of any sale or issuance of
Shares under Option the Company may require such agreements or undertakings, if
any, as the Company may deem necessary or advisable to assure compliance with
any such law or regulation.

16.      INCENTIVE STOCK OPTIONS

         The Committee, in its discretion, may designate any Option granted
under the Plan as an Incentive Option intended to qualify under Section 422 of
the Code. Any provision of the Plan to the contrary notwithstanding, (i) no
Incentive Option shall be granted to any person who, at the time such Incentive
Option is granted, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or any Affiliate
unless the purchase price under such Incentive Option is at least 110 percent of
the Fair Market Value of the Shares subject to an Incentive Option at the date
of its grant and such Incentive Option is not exercisable after the expiration
of five years from the date of its grant, and (ii) the aggregate Fair Market
Value of the Shares subject to such Incentive Option and the aggregate Fair
Market Value of the shares of stock of any Affiliate (or a predecessor of the
Company or an Affiliate) subject to any other incentive stock option (within the
meaning of

                                       8
<PAGE>   9

Section 422 of the Code) of the Company and its Affiliates (or a predecessor
corporation of any such corporation), that may become first exercisable in any
calendar year, shall not (with respect to any Optionee) exceed $100,000,
determined as of the date the Incentive Option is granted. For purposes of this
Section 16, "predecessor corporation" means a corporation that was a party to a
transaction described in Section 424(a) of the Code (or which would be so
described if a substitution or assumption under such section had been effected)
with the Company, or a corporation which, at the time the new incentive stock
option (within the meaning of Section 422 of the Code) is granted, is an
Affiliate of the Company or a predecessor corporation of any such corporations.

17.      MODIFICATION OF OPTIONS

         Subject to the terms and conditions of and within the limitations of
the Plan, the Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the surrender of Options outstanding hereunder (to the
extent not theretofore exercised) and authorize the granting of new Options
hereunder in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing provisions of this Section 17, no modification of
an Option granted hereunder shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted hereunder
to such Optionee under the Plan, except as may be necessary, with respect to
Incentive Options, to satisfy the requirements of Section 422 of the Code.

18.      AGREEMENT PROVISIONS

         (a) Each Agreement shall contain such provisions (including, without
limitation, restrictions or the removal of restrictions upon the exercise of the
Option and the transfer of shares thereby acquired) as the Committee shall deem
advisable. Each Agreement shall identify the Option evidenced thereby as an
Incentive Option or Nonqualified Option, as the case may be. Incentive Options
and Nonqualified Options may not both be covered by a single Agreement. Each
such Agreement relating to Incentive Options granted hereunder shall contain
such limitations and restrictions upon the exercise of the Incentive Option as
shall be necessary for the Incentive Option to which such Agreement related to
constitute an incentive stock option, as defined in Section 422 of the Code.

         (b) The Plan shall be annexed to each Agreement and each Agreement
shall recite that it is subject to the Plan and that the Plan shall govern where
there is any inconsistency between the Plan and the Agreement.

         (c) Each Agreement shall contain an agreement and covenant by the
Optionee, in such form as the Committee may require in its discretion, that he
consents to and will take whatever affirmative actions are required, in the
opinion of the Board or Committee, to enable the Company or appropriate
Affiliate to satisfy its Federal income tax and FICA withholding obligations. An
Agreement may contain such provisions as the Committee deems appropriate to
enable the Company or its Affiliates to satisfy such withholding obligations,
including provisions permitting the Company, on exercise of an Option, to
withhold Shares otherwise issuable to the Optionee exercising the Option to
satisfy the applicable withholding obligations.

         (d) Each Agreement relating to an Incentive Option shall contain a
covenant by the Optionee immediately to notify the Company in writing of any
disqualifying disposition (within the meaning of section 421(b) of the Code) of
an Incentive Option.

19.      RESTRICTED STOCK

         (a) Shares of Restricted Stock may be awarded by the Committee to such
individuals as are eligible for grants of Options, as the Committee may
determine at any time and from time to time before the termination

                                       9
<PAGE>   10

of the Plan. The total number of Shares of Restricted Stock awarded to any one
person, including directors of the Company, when aggregated with the number of
Shares subject to Options in favor of such person, shall not exceed shall not
exceed 706,513 Shares.

         (b) A Share of Restricted Stock is a Share that does not irrevocably
vest in the holder or that may not be sold, exchanged, pledged, transferred,
assigned or otherwise encumbered or disposed of until the terms and conditions
set by the Committee at the time of the award of the Restricted Stock have been
satisfied. A Share of Restricted Stock shall be subject to a minimum three-year
vesting period and shall contain such other restrictions, terms and conditions
as the Committee may establish, which may include, without limitation, the
rendition of services to the Company or its Affiliates for a specified time or
the achievement of specific goals. The Committee may, when it deems it
appropriate, require the recipient of an award of Restricted Stock to enter into
an agreement with the Company evidencing the understanding of the parties with
respect to such award.

         If an individual receives Shares of Restricted Stock, whether or not
escrowed as provided below, the individual shall be the record owner of such
Shares and shall have all the rights of a stockholder with respect to such
Shares (unless the escrow agreement, if any, specifically provides otherwise),
including the right to vote and the right to receive dividends or other
distributions made or paid with respect to such Shares. Any certificate or
certificates representing Shares of Restricted Stock shall bear a legend similar
to the following:

                  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
         PURSUANT TO THE TERMS OF THE CENTEX CORPORATION 1987 STOCK OPTION PLAN
         AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE
         ENCUMBERED IN ANY MANNER EXCEPT AS SET FORTH IN THE TERMS OF SUCH AWARD
         DATED        , 19 .

         In order to enforce the restrictions, terms and conditions that may be
applicable to an individual's Shares of Restricted Stock, the Committee may
require the individual, upon the receipt of a certificate or certificates
representing such Shares, or at any time thereafter, to deposit such certificate
or certificates, together with stock powers and other instruments of transfer,
appropriately endorsed in blank, with the Company or an escrow agent designated
by the Company under an escrow agreement in such form as shall be determined by
the Committee.

         After the satisfaction of the terms and conditions set by the Committee
at the time of an award of Restricted Stock to an individual, which award is not
subject to a non-lapse feature, a new certificate, without the legend set forth
above, for the number of Shares that are no longer subject to such restrictions,
terms and conditions shall be delivered to the individual.

         If an individual to whom Restricted Stock has been awarded dies after
satisfaction of the terms and conditions for the payment of all or a portion of
the award but prior to the actual payment of all or such portion thereof, such
payment shall be made to the individual's beneficiary or beneficiaries at the
time and in the same manner that such payment would have been made to the
individual.

         The Committee may cancel all or any portion of any outstanding
restrictions prior to the expiration of such restrictions with respect to any or
all of the Shares of Restricted Stock awarded to an individual hereunder only
upon the individual's death, disability or retirement on or after the earlier of
(i) age 65 or (ii) such time as the sum of the individual's age and years of
service equals 70, provided such individual is at least 55. With respect to the
occurrence of any event specified in the last paragraph of Section 12, the
restrictions, if any, applicable to any outstanding Shares awarded as Restricted
Stock shall lapse immediately prior to the occurrence of the event.

         (c) Subject to the provisions of subsection 19(b) above, if an
individual to whom Restricted Stock has been awarded ceases to be employed by at
least one of the employers in the group of employers consisting of

                                       10
<PAGE>   11

the Company and its Affiliates, or ceases to be a director of the Company,
whichever may occur later, for any reason prior to the satisfaction of any terms
and conditions of an award, any Restricted Stock remaining subject to
restrictions shall thereupon be forfeited by the individual and transferred to,
and reacquired by, the Company or an Affiliate at no cost to the Company or the
Affiliate. In such event, the individual, or in the event of his death, his
personal representative, shall forthwith deliver to the Secretary of the Company
the certificates for the Shares of Restricted Stock remaining subject to such
restrictions, accompanied by such instruments of transfer, if any, as may
reasonably be required by the Secretary of the Company.

         (d) In case of any consolidation or merger of another corporation into
the Company in which the Company is the surviving corporation and in which there
is a reclassification or change (including a change to the right to receive cash
or other property) of the Shares (other than a change in par value, or from par
value to no par value, or as a result of a subdivision or combination, but
including any change in such shares into two or more classes or series of
shares), the Committee may provide that payment of Restricted Stock shall take
the form of the kind and amount of shares of stock and other securities
(including those of any new direct or indirect parent of the Company), property,
cash or any combination thereof receivable upon such reclassification, change,
consolidation or merger.

20.      GENERAL

         (a) The proceeds received by the Company from the sale of Shares
pursuant to Options shall be used for general corporate purposes.

         (b) Nothing contained in the Plan, or in any Agreement, shall confer
upon any Optionee or recipient of Restricted Stock the right to continue in the
employ of the Company or any Affiliate, or interfere in any way with the rights
of the Company or any Affiliate to terminate his employment at any time.

         (c) Neither the members of the Board nor any member of the Committee
shall be liable for any act, omission, or determination taken or made in good
faith with respect to the Plan or any Option or Restricted Stock granted under
it; and the members of the Board and the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including counsel fees) arising therefrom to the full extent
permitted by law and under any directors and officers liability or similar
insurance coverage that may be in effect from time to time.

         (d) As partial consideration for the granting of each Option or award
of Restricted Stock hereunder, the Optionee or recipient shall agree with the
Company that he will keep confidential all information and knowledge which he
has relating to the manner and amount of his participation in the Plan;
provided, however, that such information may be disclosed as required by law or
given in confidence to the individual's spouse, tax or financial advisors, or to
a financial institution to the extent that such information is necessary to
secure a loan. In the event any breach of this promise comes to the attention of
the Committee, it shall take into consideration such breach, in determining
whether to grant any future Option or award any future Restricted Stock to such
individual, as a factor militating against the advisability of granting any such
future Option or awarding any such future Restricted Stock to such individual.

         (e) Participation in the Plan shall not preclude an individual from
eligibility in any other stock option plan of the Company or any Affiliate or
any old age benefit, insurance, pension, profit sharing, retirement, bonus, or
other extra compensation plans which the Company or any Affiliate has adopted,
or may, at any time, adopt for the benefit of its employees or directors.

                                       11
<PAGE>   12

         (f) Any payment of cash or any issuance or transfer of Shares to the
Optionee, or to his legal representative, heir, legatee, or distributee, in
accordance with the provisions hereof, shall, to the extent thereof, be in full
satisfaction of all claims of such persons hereunder. The Board or Committee may
require any Optionee, legal representative, heir, legatee, or distributee, as a
condition precedent to such payment, to execute a release and receipt therefor
in such form as it shall determine.

         (g) Neither the Committee nor the Board nor the Company guarantees the
Shares from loss or depreciation.

         (h) All expenses incident to the administration, termination, or
protection of the Plan, including, but not limited to, legal and accounting
fees, shall be paid by the Company or its Affiliates.

         (i) Records of the Company and its Affiliates regarding an individual's
period of employment, termination of employment and the reason therefor, leaves
of absence, re-employment, tenure as a director and other matters shall be
conclusive for all purposes hereunder, unless determined by the Board or
Committee to be incorrect.

         (j) The Company and its Affiliates shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished, all of the
information or documentation which is necessary or required by the Board or
Committee to perform its duties and functions under the Plan.

         (k) The Company assumes no obligation or responsibility to an Optionee
or recipient of Restricted Stock or his personal representatives, heirs,
legatees, or distributees for any act of, or failure to act on the part of, the
Board or Committee.

         (l) Any action required of the Company shall be by resolution of its
Board or by a person authorized to act by resolution of the Board. Any action
required of the Committee shall be by resolution of the Committee or by a person
authorized to act by resolution of the Committee.

         (m) If any provision of this Plan or any Agreement is held to be
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Plan or the Agreement, as the case may be, but
such provision shall be fully severable and the Plan or the Agreement, as the
case may be, shall be construed and enforced as if the illegal or invalid
provision had never been included herein or therein.

         (n) Whenever any notice is required or permitted hereunder, such notice
must be in writing and personally delivered or sent by mail. Any notice required
or permitted to be delivered hereunder shall be deemed to be delivered on the
date on which it is personally delivered, or, whether actually received or not,
on the third business day after it is deposited in the United States mail,
certified or registered, postage prepaid, addressed to the person who is to
receive it at the address which such person has theretofore specified by written
notice delivered in accordance herewith. The Company, an Optionee or a recipient
of Restricted Stock may change, at any time and from time to time, by written
notice to the other, the address which it or he had theretofore specified for
receiving notices. Until changed in accordance herewith, the Company and each
Optionee and recipient of Restricted Stock shall specify as its and his address
for receiving notices the address set forth in the Agreement pertaining to the
shares of Stock to which such notice relates.

         (o) Any person entitled to notice hereunder may waive such notice.

                                       12
<PAGE>   13

         (p) The Plan shall be binding upon the Optionee or recipient of
Restricted Stock, his heirs, legatees, and legal representatives, upon the
Company, its successors, and assigns, and upon the Board and Committee, and
their successors.

         (q) The titles and headings of Sections and paragraphs are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

         (r) All questions arising with respect to the provisions of the Plan
shall be determined by application of the laws of the State of Nevada except to
the extent Nevada law is preempted by federal law. The obligation of the Company
to sell and deliver Shares hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Shares.

         (s) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Plan dictates, the plural shall be
read as the singular and the singular as the plural.

21.      WITHHOLDING TAXES

         Federal, state, or local law may require the withholding of taxes
applicable to gains resulting from the exercise of Nonqualified Options granted
hereunder. Unless otherwise prohibited by the Committee, each participant may
satisfy any such withholding tax obligation by electing (i) to tender a cash
payment to the Company, (ii) to authorize the Company to withhold from the
shares of stock of the Company otherwise issuable to the participant as a result
of the exercise of the Nonqualified Option a number of shares having a fair
market value, as of the date the withholding tax obligation arises, equal to the
withholding obligations, or, at the election of the participant, up to the
maximum of taxes due (the "Share Withholding Alternative"), (iii) to deliver to
the Company previously acquired shares of common stock of the Company having a
fair market value, as of the date the withholding tax obligation arises, equal
to the amount to be withheld, or at the election of the participant, up to the
maximum of taxes due, or (iv) any combination of the foregoing, provided the
combination permits the payment of all withholding taxes attributable to the
exercise of the Nonqualified Option. A Participant's election to pay the
withholding tax obligation must be made in writing delivered to the Company
before the time of exercise, or simultaneously with the exercise, of such
Participant's Nonqualified Option. A valid and binding written election of the
Share Withholding Alternative shall be irrevocable. A participant's failure to
elect a withholding alternative prior to the time such election is required to
be made shall be deemed to be an election to pay the withholding tax by
tendering a cash payment to the Company. For purposes of this Section 21, the
fair market value of the shares used to pay withholding taxes is the mean
between the highest and lowest price quoted on the New York Stock Exchange for
one share of common stock of the Company on the Tax Date. Also, as used in this
Section 21, "Tax Date" shall mean the date on which a withholding tax obligation
arises in connection with an exercise of a nonqualified stock option, which date
shall be presumed to be the date of exercise, unless shares subject to a
substantial risk of forfeiture (as defined in section 83(c)(1) or (c)(3) of the
Code) are issuable on exercise of the option and the participant does not make a
timely election under section 83(b) of the Code with respect thereto, in which
case the Tax Date for such shares is the date on which the substantial risk of
forfeiture lapses. Fractional shares remaining after payment of the withholding
taxes shall be paid to the participant in cash.

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]