Document:

SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT OF 1933,  AND HAVE BEEN ACQUIRED FOR  INVESTMENT  AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION  THEREOF.  NO SUCH SALE
OR  DISPOSITION  MAY BE EFFECTED  WITHOUT AN  EFFECTIVE  REGISTRATION  STATEMENT
RELATED  THERETO OR AN OPINION OF COUNSEL  ACCEPTABLE  TO THE COMPANY  THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

                           CONVERTIBLE PROMISSORY NOTE

$2,000,000.00                                                  December 22, 1999
                                                             Seattle, Washington

         For  value  received,  Ubarter.com,  Inc.,  a Nevada  corporation  (the
"Company"),  promises to pay to ShopNow.com Inc., a Washington  corporation (the
"Holder"),  the principal sum of Two Million Dollars  ($2,000,000.00).  Interest
shall accrue from the date of this Note on the unpaid principal amount at a rate
equal to eight and one-half percent (8.5%) per annum, simple interest.  Interest
will be computed on the basis of a 360-day year of twelve  30-day  months.  This
Note is subject to the following terms and conditions.

1. Maturity. Subject to Section 2, principal and all accrued and unpaid interest
under this Note shall be due and  payable  upon demand by the Holder at any time
after June 22, 2000 (the "Maturity Date").  Notwithstanding  the foregoing,  the
entire unpaid  principal sum of this Note,  together with all accrued and unpaid
interest thereon,  shall become  immediately due and payable in the event of any
Event of Default (as defined below).

2.       Conversion.

(a)  Termination of LOI. The entire  principal  amount of and accrued and unpaid
interest  on this Note  shall  automatically  be  converted  into fully paid and
nonassessable  shares of the Company's  common stock  ("Common  Stock") upon the
earlier to occur of (1) the termination of the binding  provisions (the "Binding
Provisions")  of that certain Letter of Intent,  dated December 20, 1999,  among
Holder, the Company,  Steven M. White and New Horizons LP (the "LOI"), by Holder
pursuant  to  Paragraph  J(ii) of the LOI,  (2) the  termination  of the Binding
Provisions  by the Company  pursuant to  Paragraphs  J(iii) of the LOI,  (3) the
acceptance by the Company of a proposal to effect an Alternative Transaction (as
defined in the LOI), (4) the failure of the transaction  contemplated in the LOI
to be consummated  on or before the date  designated for the Closing (as defined
in the LOI) for any reason other than the Company's closing conditions not being
satisfied  on or prior to such date due to any  omission or  affirmative  act of
Holder,  (5) the termination of the Binding Provisions by the Company and Holder
pursuant  to  Paragraph  J(i) of the LOI,  (6) the  termination  of the  Binding
Provisions  by  the  Company  pursuant  to  Paragraph  J(ii)  of  the  LOI,  (7)
termination of the Binding  Provisions by Holder pursuant to Paragraphs  J(iii),
J(iv) or J(v) of the LOI, or (8) the failure of the Company's closing conditions
to the  transaction  proposed in the LOI to be satisfied on or prior to the date
designated for the Closing due to any omission or affirmative act of Holder. (b)

<PAGE>

(b)           Number of Shares Issued upon Termination by the Company. Upon the
conversion of this Note due to the occurrence of an event represented by clauses
(1), (2),(3) or (4) of Section 2(a) above, the number of shares of Common  Stock
to be issued upon such conversion shall be equal to the quotient  obtained by
dividing (x) the entire principal amount of this Note plus accrued and unpaid
interest by (y) $2.15 (the "Company Termination  Conversion Price"),  rounded to
the nearest whole share.

(c)          Number of Shares Issued upon  Termination by Holder.  Upon the
conversion of this Note due to the occurrence of an event represented by clauses
(5), (6), (7) or (8) of Section 2(a) above, the number of shares of Common Stock
to be issued upon such conversion shall be equal to the quotient obtained by
dividing (x) the entire  principal  amount of this Note plus  accrued and unpaid
interest by (y) $3.58 (the "Holder Termination Conversion Price"),  rounded to
the nearest whole share.

(d)      Warrant Coverage.

     (i) In the event of a conversion of this Note pursuant to clauses (1), (2),
(3) or (4) of Section 2(a) above, the Company shall issue to Holder a warrant to
purchase a number of shares of Common  Stock  equal to the  quotient of (A) 125%
times the entire  principal amount of this Note plus accrued and unpaid interest
divided by (B) the Company Termination Conversion Price. Such warrant shall have
a term of 7  years  and an  exercise  price  equal  to the  Company  Termination
Conversion  Price,  rounded to the nearest  whole share.  The form of warrant is
attached as Appendix A hereto.

     (ii) In the event of a  conversion  of this Note  pursuant to clauses  (5),
(6),  (7) or (8) of Section  2(a)  above,  the  Company  shall issue to Holder a
warrant to purchase a number of shares of Common  Stock equal to the quotient of
(i) 50% times the entire  principal  amount of this Note plus accrued and unpaid
interest divided by (ii) the Holder Termination  Conversion Price. Such warrants
shall  have a term  of 7  years  and  an  exercise  price  equal  to the  Holder
Termination  Conversion  Price,  rounded to the nearest whole share. The form of
warrant is attached as Appendix A hereto.

(e)          Mechanics and Effect of  Conversion.  No fractional  shares of the
Company's capital  stock  will be issued  upon  conversion  of this  Note.  In
lieu of any fractional  share to which the Holder would  otherwise be entitled,
the Company will pay to the  Holder in cash the  amount  of the  unconverted
principal  and interest  balance  of this Note that  would  otherwise  be
converted  into such fractional  share.  Upon conversion of this Note pursuant
to this Section 2, the Holder shall surrender this Note, duly endorsed, at the
principal offices of the Company or any transfer agent of the Company. At its
expense,  the Company will, as soon as  practicable  thereafter,  issue and
deliver to such Holder,  at such principal office, a certificate or certificates
for the number of fully paid and nonassessable  shares of Common Stock to which
such Holder is entitled upon such conversion, together with any other securities
and property to which the Holder is entitled upon such conversion under the
terms of this Note, including a check payable to the Holder for any cash amounts
payable as described  herein.  Upon conversion  of this Note,  the Company will
be forever  released from all of its obligations and  liabilities  under this
Note with regard to that portion of the principal amount and accrued interest
being converted

<PAGE>

including without limitation the obligation to pay such portion of the principal
amount and accrued interest.

3. Payment.  All payments  shall be made in lawful money of the United States of
America at such place as the Holder  hereof may from time to time  designate  in
writing to the Company.  Payment shall be credited first to the accrued interest
then due and payable and the remainder applied to principal.  Prepayment of this
Note may not be made prior to the Maturity Date,  unless agreed to in writing by
the Holder.

4. Transfer; Successors and Assigns. The terms and conditions of this Note shall
inure to the  benefit  of and be  binding  upon the  respective  successors  and
assigns of the parties.  Notwithstanding  the foregoing,  (i) the Holder may not
assign,  pledge,  or  otherwise  transfer  this Note  without the prior  written
consent of the Company,  except for transfers to affiliates and (ii) the Company
may not  assign,  pledge,  or  otherwise  transfer  this Note  without the prior
written consent of the Holder. Subject to the preceding sentence,  this Note may
be  transferred  only upon  surrender of the original Note for  registration  of
transfer, duly endorsed, or accompanied by a duly executed written instrument of
transfer in form satisfactory to the Holder.  Thereupon, a new note for the same
principal  amount and interest will be issued to, and registered in the name of,
the transferee. Interest and principal are payable only to the registered holder
of this Note.

5. Governing Law. This Note and all acts and  transactions  pursuant  hereto and
the rights and  obligations of the parties  hereto shall be governed,  construed
and interpreted in accordance with the laws of the State of Washington,  without
giving effect to principles of conflicts of law.

6.  Notices.  Any notice  required or permitted by this Note shall be in writing
and shall be deemed sufficient upon delivery,  when delivered personally or by a
nationally-recognized  delivery  service  (such as Federal  Express or UPS),  or
forty-eight  (48) hours after being  deposited in the U.S. mail, as certified or
registered mail, with postage prepaid,  addressed to the party to be notified at
such party's address as set forth below or as  subsequently  modified by written
notice.

7.  Amendments and Waivers.  Any term of this Note may be amended or waived only
with the written consent of the Company and the Holder.  Any amendment or waiver
effected in  accordance  with this  Section 7 shall be binding upon the Company,
the Holder and each transferee of the Note.

8.  Shareholders,  Officers  and  Directors  Not  Liable.  In no event shall any
shareholder, officer or director of the Company be liable for any amounts due or
payable pursuant to this Note.

9.  Notice  and   Presentment.   The  Company  hereby  waives  demand,   notice,
presentment, protest and notice of dishonor.

10.  Severability.  If one or  more  provisions  of  this  Note  are  held to be
unenforceable  under  applicable law, such provision shall be excluded from this
Note, and the balance of this 11.

<PAGE>

Note shall be  interpreted  as if such  provision  were so excluded and shall be
enforceable in accordance with its terms.

12. Attorneys' Fees. The Company and all endorsers of this Note agree to pay the
Holder's  reasonable  expenses and costs in collecting  and enforcing this Note,
including reasonable attorneys' fees.

13. Holder as Owner. The Company may deem and treat the holder of record of this
Note as the  absolute  owner for all  purposes  regardless  of any notice to the
contrary.

14. Events of Default.  If any of the events  specified in this Section 13 shall
occur (an "Event of Default"), the Holder may, so long as such condition exists,
declare the outstanding  principal and accrued but unpaid  interest  immediately
due and payable by notice in writing to the Company:

     (a) The  institution  of  proceedings  by the Company to be  adjudicated as
bankrupt or  insolvent,  the filing of a petition  or answer or consent  seeking
reorganization  or  release  under  the  federal  Bankruptcy  Act,  or any other
applicable  federal or state law, the  appointment of a receiver,  liquidator or
trustee, an assignment for the benefit of creditors,  or the taking of corporate
action by the Company in furtherance of any such action;

     (b) If,  within 60 days after the  commencement  of an action  against  the
Company  (and  service  of  process  on the  Company)  seeking  any  bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar relief under any
present or future  statute,  law or regulation,  such action shall not have been
resolved  in  favor of the  Company  or all  orders  or  proceedings  thereunder
affecting the operations or the business of the Company  stayed,  or if the stay
of any such order or proceeding  shall thereafter be set aside, or if, within 60
days after the appointment without the consent or acquiescence of the Company of
any trustee,  receiver or liquidator of the Company,  such appointment shall not
have been vacated;

     (c) Failure to pay the principal of and interest on this Note when due;

     (d) The adoption of any plan of  liquidation,  dissolution or winding up of
the Company, or the involuntary occurrence thereof; or

     (e)  Material  breach by the Company of any  provision  of this Note (other
than the payment obligations  described in clause (c) above),  where such breach
is not cured within ten (10) days after the Company  receives  written notice of
the same from the Holder.

14. Covenants of the Company.  For so long as any principal remains  outstanding
under the Note,  the Company shall not,  without first  obtaining the consent of
Holder:

     (a) issue equity  securities or options,  warrants,  rights or  convertible
securities;  other  than for  customary  grants of  options  to new hires not to
exceed in the aggregate 50,000

<PAGE>

     (b) amend the Company's  Articles of  Incorporation or Bylaws in any manner
adverse to Holder;

     (c) lease,  sell, license or otherwise transfer all or substantially all of
its assets;

     (d) create or assume any indebtedness for borrowed money that is pari passu
or senior in right of payment to the obligations under the Note;

     (e) pay any  dividends or other  distributions  on the capital stock of the
Company,  or  repurchase  or redeem any Common  Stock,  other than  pursuant  to
vesting or repurchase  provisions under equity incentive programs  maintained by
the Company;

     (f) grant any unusual or extraordinary bonuses,  benefits or other forms of
direct or indirect compensation to any employee, officer, director or consultant
if the direct or indirect result of such action would be likely to result in (i)
the insolvency or bankruptcy of the Company or (ii) an Event of Default;

     (g) directly or indirectly make any payments on existing indebtedness other
than  regularly  scheduled  installments  of principal and interest nor make any
payment on any  existing  indebtedness  which  would  violate  the terms of such
indebtedness or any agreement related thereto; or

     (h) cause the net loss on the  Company's  income  statement  to increase by
more than $500,000 in any individual month.

15. Company Representations and Warranties.  The Company represents and warrants
that:

     (a) It is a corporation  duly  incorporated,  validly  existing and in good
standing  under the laws of the state of Nevada.  The Company has all  requisite
corporate  power and authority to carry on its business as presently  conducted,
and to carry out the transactions contemplated in this Note. The Company is duly
qualified to transact business and is in good standing as a foreign  corporation
in each  jurisdiction  in which the  failure  to be so  qualified  would  have a
material  adverse  effect  on  the  Company's  financial  condition,   business,
operations  or property.

     (b) The execution, delivery and performance by the Company of this Note has
been duly  authorized by all  requisite  action of the Company and its directors
and shareholders. This Note has been duly executed and delivered by the Company,
and this  Note  constitutes  a valid  and  binding  obligation  of the  Company,
enforceable against the Company in accordance with its terms.

     (c) No  consent,  approval,  order or  authorization  of, or  registration,
qualification,  designation,  declaration  or filing with,  any federal,  state,
local  or  provincial  governmental  authority  on the  part of the  Company  is
required in connection with the consummation of the transactions contemplated by
this Note,  except for filings  pursuant to the federal  securities  laws and to
applicable state Blue Sky laws.

<PAGE>

     (d) The Company is not in default (i) under its  Articles of  Incorporation
or its Bylaws;  (ii) under any material  contract,  agreement or  instrument  to
which the  Company is a party or by which it or any of its  property is bound or
affected, including without limitation any material indenture,  mortgage, lease,
license or purchase or sales  order,  other than any  default  arising  from the
failure to the Company to register the shares of the  Company's  common stock in
accordance  with  section 1.9 of that certain  Share  Purchase  Agreement  dated
February 28, 1999, among the registrant,  Barter Business  Exchange Inc. and Bob
Bagga;  or (iii) with respect to any order,  writ,  injunction  or decree of any
court  or of  any  federal,  state,  municipal  or  other  domestic  or  foreign
governmental department,  commission,  board, bureau, agency or instrumentality.
To the knowledge of the Company,  there presently  exists no material default by
any party  other than the  Company to any of the  foregoing,  and no  condition,
event or act which  constitutes,  or which after  notice,  lapse of time or both
would constitute, a material default by the Company or any other party under any
of the foregoing.

                            [Signature page follows]

<PAGE>

                                     COMPANY:

                                     Ubarter.com, Inc.

                                     By:    /s/ Steven White

                                     Name:     Steven White
                                                 (print)
                                     Title:  CEO

                                     Address:  21400 International Blvd, #207
                                               Seattle, WA  98198
                                               (206) 872-9290

AGREED AND ACCEPTED:

ShopNow.com Inc.

By: ______________________________________

Name:_____________________________________
                  (print)
Title:____________________________________

Address:  411 First Avenue S., Suite 200N
          Seattle, WA  98104

          [Signature Page to Convertible Subordinated Promissory Note]SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED  UNDER
         THE  SECURITIES  ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
         NOT WITH A VIEW TO, OR IN  CONNECTION  WITH,  THE SALE OR  DISTRIBUTION
         THEREOF.  NO SUCH  SALE  OR  DISPOSITION  MAY BE  EFFECTED  WITHOUT  AN
         EFFECTIVE  REGISTRATION  STATEMENT  RELATED  THERETO  OR AN  OPINION OF
         COUNSEL  ACCEPTABLE  TO  THE  COMPANY  THAT  SUCH  REGISTRATION  IS NOT
         REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

                                UBARTER.COM, INC.

                             STOCK PURCHASE WARRANT

Date: _______________________

         This certifies that ShopNow.com Inc. or its assigns (the "Holder"), for
value  received,  is entitled  to  purchase  from  Ubarter.com,  Inc.,  a Nevada
corporation (the "Company"),  a number of fully paid and nonassessable shares of
the Company's  common stock (the "Common Stock") equal to the Warrant Amount (as
defined  below)  divided by the Stock  Purchase  Price (as defined  below) (such
number of shares,  the "Warrant  Shares").  For purposes of the  foregoing,  the
following definitions apply:

                  (A) The "Warrant  Amount"  shall be [one  hundred  twenty five
         percent  (125%)][fifty  percent  (50%)]  of the  outstanding  principal
         balance of and any  accrued  but  unpaid  interest  under that  certain
         Convertible  Promissory Note, dated as of December 22, 1999,  issued to
         Holder by the Company (the "Note").

                  (C) The "Stock Purchase Price" shall be [$2.15][$3.58].

                  (D) The "Fully  Diluted  Number"  shall mean at any given time
         the total  number of shares  of  Common  Stock  outstanding  on a fully
         diluted basis,  which calculation  assumes (x) the exercise of all then
         outstanding rights, warrants or options, vested or unvested, to acquire
         the Company's  common stock,  regardless of restrictions on exercise or
         conversion  and (y) the conversion of all then  outstanding  securities
         (including,   without  limitation,   any  preferred  stock)  and  notes
         convertible at any time into the Company's common stock (other than the
         Note).

         This  Warrant may be  exercised  at any time or from time to time up to
and  including  the  earliest to occur of (i) 5:00 p.m.  Pacific  time on [seven
years from issuance] or (ii) the consummation of a firm commitment  underwritten
public offering pursuant to a registration statement under the Securities Act of
1933, as amended (the "Expiration  Date"),  upon surrender to the Company at its
principal  office (or at such other location as the Company may advise Holder in
writing)  of this  Warrant  properly  endorsed  with  the  Form of  Subscription
attached  hereto duly filled in and signed and upon  payment in cash or by check
of the aggregate Stock Purchase Price for the number of Warrant Shares for which
this Warrant is being  exercised  determined in accordance  with the  provisions
hereof. The Stock Purchase Price and the number of Warrant Shares are subject to
adjustment as provided in Section 4 below.

<PAGE>

         This Warrant is subject to the following terms and conditions:

         1. Exercise; Issuance of Certificates; Payment for Shares. This Warrant
is exercisable at the option of the Holder of record hereof, at any time or from
time to time,  up to the  Expiration  Date  for all and any part of the  Warrant
Shares (but not for a fraction of a share).  The Company agrees that the Warrant
Shares  purchased under this Warrant shall be and are deemed to be issued to the
Holder  hereof as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been  surrendered and payment made for
such shares. Certificates for the Warrant Shares so purchased, together with any
other  securities  or property to which the Holder  hereof is entitled upon such
exercise,  shall  be  delivered  to the  Holder  hereof  by the  Company  at the
Company's expense within a reasonable time after the rights  represented by this
Warrant  have  been so  exercised.  In case of a  purchase  of less than all the
Warrant Shares,  the Company shall cancel this Warrant and execute and deliver a
new Warrant or  Warrants  of like tenor for the  balance of the  Warrant  Shares
purchasable  under the  Warrant  surrendered  upon such  purchase  to the Holder
hereof within a reasonable time, not exceeding  fifteen (15) days after the date
of  such  surrender.  Each  stock  certificate  so  delivered  shall  be in such
denominations  as may be requested by the Holder  hereof and shall be registered
in the name of such  Holder or such  other name as shall be  designated  by such
Holder.

         2.       Conversion of Warrant.

                  2.1 Right to Convert.  In addition  to, and without  limiting,
the other rights of the Holder  hereunder,  the Holder shall have the right (the
"Conversion  Right") to convert  this  Warrant or any part hereof  into  Warrant
Shares at any time and from time to time during the term hereof.  Upon  exercise
of the  Conversion  Right,  the Company  shall  deliver to the  Holder,  without
payment  by the  Holder  of any  Stock  Purchase  Price  or any  cash  or  other
consideration,  that  number of  Warrant  Shares  computed  using the  following
formula:

                  x = y (a-b)
                           a

Where:            x =      the number of Warrant Shares to be issued to the
                           Holder

                  y =      the number of Warrant Shares purchasable pursuant to
                           this Warrant

                  a =      the Fair Market Value of one Warrant Share as of the
                           Conversion Date

                  b =      the Stock Purchase Price

                  2.2 Method of Exercise.  The Conversion Right may be exercised
by the Holder by the  surrender of this Warrant to the Company,  together with a
written  notice  specifying  that the Holder  intends to exercise the Conversion
Right and  indicating  the number of Warrant Shares to be acquired upon exercise
of the Conversion  Right.  Such conversion shall be effective upon the Company's
receipt of this Warrant,  together with the conversion  notice, or on such later
date as is specified in the conversion  notice (the  "Conversion  Date") and, at
the Holder's election,  may be made contingent upon the closing of the Company's
initial public offering of any securities  pursuant to a registration  statement
under the Securities Act of 1933, as amended (the  "Securities  Act");  provided
that the foregoing shall not create any obligation on the

<PAGE>

part of the Company to undertake any public offering of securities. Certificates
for the Warrant  Shares so acquired  shall be delivered  to the Holder  within a
reasonable  time, not exceeding  fifteen (15) days after the Conversion Date. If
applicable,  the Company shall, upon surrender of this Warrant for cancellation,
deliver a new  Warrant  evidencing  the  rights of the  Holder to  purchase  the
balance of the Warrant Shares which Holder is entitled to purchase hereunder.

                  2.3 Fair  Market  Value.  "Fair  Market  Value"  of a share of
Warrant  Shares as of a particular  date means:  (i) if traded on an exchange or
quoted on The Nasdaq  National  Market,  then the prior  trading  day's  closing
price,  (ii) if  conversion  is  effective  as of the  closing of the  Company's
initial public offering of any securities  pursuant to a registration  statement
under the Securities Act, the "price to public" specified for such shares in the
final   prospectus  for  such  public   offering,   (iii)  if  actively   traded
over-the-counter,  then the average of the  most-recently  reported  bid and ask
prices and (iv) otherwise, the price as determined in good faith by the Board of
Directors of the Company.

         3.  Reservation  of Shares.  The Company  covenants and agrees that the
Company  will use its best  efforts  to cause a  sufficient  number of shares of
authorized  but unissued  Common Stock to be authorized  when and as required to
provide  for the  exercise  or  conversion  of the  rights  represented  by this
Warrant.  The Company  will  further take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable securities law or regulation.

         4.  Adjustment of Stock Purchase Price and Number of Shares.  The Stock
Purchase  Price and the  number  of  shares  purchasable  upon the  exercise  or
conversion of this Warrant shall be subject to adjustment from time to time upon
the  occurrence  of  certain  events  described  in this  Section  4.  Upon each
adjustment  of the  Stock  Purchase  Price,  the  Holder of this  Warrant  shall
thereafter be entitled to purchase,  at the Stock Purchase Price  resulting from
such adjustment, the number of shares obtained by multiplying the Stock Purchase
Price in effect  immediately  prior to such  adjustment  by the number of shares
purchasable  pursuant hereto immediately prior to such adjustment,  and dividing
the product thereof by the Stock Purchase Price resulting from such adjustment.

                  4.1  Subdivision or Combination of Stock.  In case the Company
shall at any time subdivide any of its outstanding  shares of the same class and
series as the Warrant Shares into a greater number of shares, the Stock Purchase
Price in effect  immediately prior to such subdivision shall be  proportionately
reduced,  and conversely,  in case any outstanding  shares of the same class and
series as the Warrant  Shares shall be combined into a smaller number of shares,
the Stock Purchase Price in effect  immediately  prior to such combination shall
be proportionately increased.

                  4.2 Dividends,  Reclassification.  If at any time or from time
to time any  holders of  securities  of the same class and series as the Warrant
Shares  shall have  received  or become  entitled to  receive,  without  payment
thereof,

                           (A)      any shares of the  Company's  Preferred
Stock,  Common  Stock or any shares of stock  or  other  securities  which  are
at any  time  directly  or  indirectly convertible  into or  exchangeable  for
Common  Stock  (collectively,  "Company Stock"), or any rights or options to

<PAGE>

subscribe  for,  purchase or  otherwise  acquire any of the  foregoing by way of
dividend or other distribution;

                           (B) any  cash  paid or  payable  otherwise  than as a
regular periodic cash dividend at a rate which is substantially  consistent with
past practice (or, in the case of an initial dividend,  at a rate which is
substantially  consistent with industry practice); or

                           (C) any  shares  of the  Company's  Preferred  Stock,
Common  Stock or other or  additional  stock  or other  securities  or  property
(including cash) by way of spinoff, split-up,  reclassification,  combination of
shares or similar corporate rearrangement;  (other than shares of the same class
and series as the Warrant Shares issued as a stock split, adjustments in respect
of which shall be covered by the terms of Section 4.1 above),

                           then and in each such case,  the Holder hereof shall,
upon the exercise or  conversion  of this  Warrant,  be entitled to receive,  in
addition to the number of shares of such capital stock receivable thereupon, and
without payment of any additional consideration thereof, the amount of stock and
other  securities  and  property  (including  cash in the cases  referred  to in
clauses  (B) and (C)  above)  which such  Holder  would hold on the date of such
exercise or  conversion  had he or it been the Holder of record of such  capital
stock as of the date on which holders of such capital  stock  received or became
entitled to receive  such  shares  and/or all other  additional  stock and other
securities and property.

                  4.3  Conversion  or  Redemption.  Should all of the  Company's
capital  stock of the same  class and  series as the  Warrant  Shares  be, or if
outstanding would be, at any time prior to the expiration of this Warrant or any
portion thereof,  redeemed or converted into shares of Company Stock,  then this
Warrant shall immediately  become  exercisable or convertible for that number of
shares of Common  Stock  equal to the number of shares of the Common  Stock that
would have been  received  if this  Warrant had been  exercised  in full and the
capital stock received thereupon had been simultaneously  converted  immediately
prior to such event, and the Stock Purchase Price shall be immediately  adjusted
to equal the quotient  obtained by dividing  (x) the  aggregate  Stock  Purchase
Price of the maximum  number of shares of capital  stock for which this  Warrant
was  exercisable  or  convertible   immediately  prior  to  such  conversion  or
redemption,  by (y) the number of shares of Common  Stock for which this Warrant
is exercisable or convertible immediately after such conversion or redemption.

                  4.4 Antidilution.  In case the Company shall at any time prior
to the expiration of this Warrant,  issue any shares of Common Stock (other than
(i) shares issued as a stock  dividend or stock split as provided in Section 4.2
or (ii) options to purchase  equity  securities  of the Company  pursuant to the
Company's stock incentive plans) for a consideration per share that is less than
the Stock  Purchase  Price,  then on the date of such  issue the Stock  Purchase
Price shall be reduced to a price  (calculated to the nearest cent) equal to the
quotient  of (a)  the sum of (i) the per  share  consideration  received  by the
Company  in such  issue  plus  (ii) the  product  of the  Fully  Diluted  Number
immediately  prior to the issuance times the Stock Purchase Price divided by (b)
the Fully Diluted Number immediately after the issuance.

                  In the case of the  issuance  of options to purchase or rights
to subscribe for Common Stock,  securities  by their terms  convertible  into or
exchangeable for Common Stock, or options to purchase or rights to subscribe for
such convertible or exchangeable securities, other

<PAGE>

 than  options to purchase  equity  securities  of the  Company  pursuant to the
Company's stock incentive plans, the following provisions shall apply:

                  (i) 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 for a consideration  equal to the  consideration  received by
the  Company  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, but no further adjustment to the Stock Purchase Price shall be made for
the actual  issuance of Common Stock upon the exercise of such options or rights
in accordance with their terms;

                  (ii) 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  for a
consideration  equal to the  consideration  received by the Company for any such
securities and related options or rights, plus the additional consideration,  if
any,  to be  received by the  Company  upon the  conversion  or exchange of such
securities  or the  exercise  of any related  options or rights,  but no further
adjustment to the Stock Purchase Price shall be made for the actual  issuance of
Common Stock upon the  conversion  or exchange of such  securities in accordance
with their terms;

                  (iii) if such options,  rights or convertible or  exchangeable
securities by their terms  provide,  with the passage of time or otherwise,  for
any increase in the  consideration  payable to the  Company,  or decrease in the
number of shares of Common Stock  issuable,  upon the  exercise,  conversion  or
exchange  thereof,  the Stock  Purchase  Price  computed upon the original issue
thereof, and any subsequent adjustments based thereon, shall, upon such increase
or decrease  becoming  effective,  be  recomputed  to reflect  such  increase or
decrease  with  respect to such  options,  rights  and  securities  not  already
exercised,  converted or exchanged  prior to such increase or decrease  becoming
effective,  but no further  adjustment to the Stock Purchase Price shall be made
for the actual issuance of Common Stock upon the exercise of any such options or
rights or the conversion or exchange of such securities in accordance with their
terms;

                  (iv) upon the  expiration  of any such options or rights,  the
termination  of any such rights to convert or exchange or the  expiration of any
options or rights related to such  convertible or exchangeable  securities,  the
Stock  Purchase  Price shall promptly be readjusted to such Stock Purchase Price
as would have been obtained had the adjustment  which was made upon the issuance
of such  options,  rights or  securities  or options  or rights  related to such
securities been made upon the basis of the issuance of only the number of shares
of Common  Stock  actually  issued upon the  exercise of such options or rights,
upon the  conversion or exchange of such  securities or upon the exercise of the
options or rights related to such securities.

                  4.5 Calculation of  Consideration.  In the case of an issue of
additional  shares of Common Stock for cash, the  consideration  received by the
Company shall be deemed to be the net cash proceeds received for such shares. In
the  case  of an  issue  of  additional  shares  of  Common  Stock  for  noncash
consideration, the Company's Board of Directors shall determine the

<PAGE>

value of such consideration and such  determination,  unless shown by the Holder
to have been made other than in good faith, shall be conclusive.

                  4.6      Other Notices.  If at any time:

                           (A)   the Company  shall  declare any cash dividend
upon its shares of the same class and series as the Warrant Shares;

                           (B)   the Company  shall  declare any dividend upon
its shares of the same class and series as the Warrant  Shares  payable in stock
or make any special dividend or other  distribution to the holders of its shares
of the same class and series as the Warrant Shares;

                           (C)  there  shall be any  capital  reorganization  or
reclassification  of the capital  stock of the  Company,  or any merger in which
shareholders  of the  Company  prior to such  merger  hold  less than 50% of the
voting  power of the  capital  stock of the  surviving  corporation  after  such
merger,  or the sale of all or substantially  all of the Company's  assets, or a
transaction,  whether  effected in a single  transaction  or a series of related
transactions,  in which 50% or more of the voting power of the capital  stock of
the Company is transferred (an "Acquisition");

                           (D)  there  shall  be  a  voluntary  or   involuntary
dissolution, liquidation or winding-up of the Company; or

                           (E) the  Company  shall  take or  propose to take any
other  action,  notice of which is  actually  provided  to or is  required to be
provided,  pursuant  to any written  agreement,  to holders of its shares of the
same class and series as the Warrant Shares,

         then,  in any one or more of said  cases,  the Company  shall give,  by
first class mail,  postage  prepaid,  addressed to the Holder of this Warrant at
the address of such Holder as shown of the books of the Company, (i) at least 20
days prior  written  notice of the date on which the books of the Company  shall
close or a record shall be taken for such  dividends or  distribution  rights or
for  determining  rights  to  vote  in  respect  of  any  such   reorganization,
reclassification,  Acquisition, dissolution, liquidation or winding-up, and (ii)
in  the  case  of  any  such  reorganization,   reclassification,   Acquisition,
dissolution, liquidation or winding-up, at least 20 days prior written notice of
the date when the same shall take place. Any notice given in accordance with the
foregoing  clause  (i) shall  also  specify,  in the case of any such  dividend,
distribution or subscription  rights, the date on which the holders of shares of
the same class and series as the Warrant Shares shall be entitled  thereto.  Any
notice given in accordance with the foregoing clause (ii) shall also specify the
date on which the  holders of shares of the same class and series as the Warrant
Shares  shall be  entitled  to  exchange  their  stock for  securities  or other
property deliverable upon such reorganization, reclassification,  consolidation,
merger, sale, Acquisition,  dissolution,  liquidation or winding-up, as the case
may be.

         5. Issue Tax.  The issuance of  certificates  for shares of the Warrant
Shares shall be made  without  charge to the Holder of the Warrant for any issue
tax in  respect  thereof;  provided,  however,  that the  Company  shall  not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
then Holder of the Warrant being transferred.

<PAGE>

         6. No Voting or  Dividend  Rights;  Limitation  of  Liability.  Nothing
contained in this  Warrant  shall be  construed  as  conferring  upon the Holder
hereof the right to vote or to consent or to receive  notice as a shareholder in
respect of meetings of shareholders for the election of directors of the Company
or any other matters or any rights  whatsoever as a shareholder  of the Company.
No dividends or interest  shall be payable or accrued in respect of this Warrant
or the interest  represented hereby or the shares  purchasable  hereunder until,
and  only to the  extent  that,  this  Warrant  shall  have  been  exercised  or
converted.

         7. Unregistered Security. Each holder of this Warrant acknowledges that
this  Warrant  and the  Warrant  Shares  have  not  been  registered  under  the
Securities  Act,  and agrees not to sell,  pledge,  distribute,  offer for sale,
transfer or otherwise  dispose of this Warrant,  any Warrant  Shares issued upon
its exercise in the absence of (i) an effective registration statement under the
Securities  Act as to this Warrant or such Warrant  Shares and  registration  or
qualification  of this  Warrant  or such  Warrant  Shares  under any  applicable
federal or state  securities law then in effect,  or (ii) an opinion of counsel,
satisfactory to the Company,  that such  registration and  qualification are not
required.  Each  certificate or other  instrument for Warrant Shares issued upon
the exercise of this Warrant shall bear a legend  substantially to the foregoing
effect.

         8. Transferability. Subject to the provisions of Section 7 hereof, this
Warrant  and all rights  hereunder  are not  transferable,  in whole or in part,
except for transfers to affiliates upon surrender of the Warrant with a properly
executed assignment (in the form attached hereto) at the principal office of the
Company.

         9.  Modification and Waiver.  This Warrant and any provision hereof may
be  amended,  waived or  modified  upon  written  consent of the Company and the
Holder.

         10.  Notices.  Any  notice,  request  or  other  document  required  or
permitted to be given or delivered to the Holder  hereof or the Company shall be
delivered or shall be sent by certified or registered mail, postage prepaid,  to
each such  Holder at its  address as shown on the books of the Company or to the
Company at its principal executive offices.

         11.  Descriptive  Headings.  The  descriptive  headings  of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.

         12.  Governing  Law.  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  Washington,  without  giving  effect  to the  conflict  of  laws
principles thereof.

         13. Lost Warrants or Stock  Certificates.  The Company  represents  and
warrants  to  the  Holder  hereof  that  upon  receipt  of  evidence  reasonably
satisfactory to the Company of the loss,  theft,  destruction,  or mutilation of
any Warrant or stock  certificate  and,  in the case of any such loss,  theft or
destruction,  upon  receipt  of an  indemnity  reasonably  satisfactory  to  the
Company,  or in the case of any such mutilation upon surrender and  cancellation
of such Warrant or stock  certificate,  the Company at its expense will make and
deliver a new Warrant or stock certificate,  of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.

<PAGE>

         14.  Fractional  Shares.  No  fractional  shares  shall be issued  upon
exercise of this Warrant.  The Company 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 effective Stock Purchase Price.

                                                 [Signature Page Follows.]

<PAGE>

         IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant
to be duly executed by its duly  authorized  officers,  effective as of the date
written above.

COMPANY:                                          Ubarter.com, Inc.

                                      By:  /s/ Steven White

                                      Name:    Steven White

                                      Title:   CEO

HOLDER:                               ShopNow.com Inc.

                                     By: _______________________________________

                                     Name: ____________________________________

                                     Title: ___________________________________

<PAGE>

                              FORM OF SUBSCRIPTION
                  (To be signed only upon exercise of Warrant)

To:_______________________________

         The undersigned,  the Holder of the within Warrant,  hereby irrevocably
elects to exercise the purchase  right  represented  by such Warrant for, and to
purchase thereunder, _____________ ____________________________  (_____________)
shares of ____________ Stock of Ubarter.com,  Inc. and herewith makes payment of
____________________  Dollars  ($__________)  thereof,  and  requests  that  the
certificates  for  such  shares  by  issued  in the name of,  and  delivered  to
________________________________, whose address is

                                                            .

         The undersigned  represents that it is acquiring such  ________________
Stock for its own account for  investment  and not with a view to or for sale in
connection with any distribution  thereof (subject,  however, to any requirement
of law that the disposition thereof shall at all times by within its control).

         DATED: ___________________

                             __________________________________________________
                             (Signature must conform in all respects to name of
                             Holder as specified on the face of the Warrant)

                             __________________________________________________

                             __________________________________________________
                            (Address)

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned,  the Holder of the within Warrant,
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within  Warrant,  with  respect to the number of shares of  ________________
Stock covered thereby set forth herein below, unto:

<TABLE>
     <S>                                          <C>                                          <C>

Name of Assignee                               Address                                      No. of Shares

</TABLE>

                                                     DATED: ___________________

                              __________________________________________________
                             (Signature must conform in all respects to name of
                              Holder as specified on the face of the Warrant)

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