Document:

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May 15, 2000

Mr. Joe Arciniega

RE:  OFFER OF AMENDED TERMS OF EMPLOYMENT

Dear Joe:

As an inducement to your continuing to remain employed by ShopNow.com Inc. on
a terminable-at-will basis, the board of directors and I are pleased to offer
you the following amended and improved terms of employment in your capacity
as ShopNow's President and Chief Operating Officer.

You will continue to report directly to ShopNow's Chairman and CEO (Dwayne
Walker). Your annual salary will continue to be a minimum of $250,000 and will
be paid twice per month on the 15th and the last day of the month. You will also
be eligible for management bonuses, which may or may not be allocated by
ShopNow's CEO and board of directors.

All options previously granted to you will remain in effect. You will receive
additional option grants as follows:

1.  You will be granted an option to purchase 500,000 shares on May 23,
    2000 at an exercise price equal to the average closing price of the
    five consecutive trading days ending on May 22, 2000. The option will
    vest in eight equal quarterly increments over a two year period
    beginning on the date the option is granted.

If a Change in Control occurs while you remain employed by ShopNow, or if your
employment is terminated by ShopNow in connection with or in anticipation of a
Change in Control, all options described above shall be granted to you (if not
previously granted) and vest immediately before the consummation of the Change
in Control. "Change in Control" is defined as: (a) the merger, consolidation,
share exchange or similar transaction between ShopNow and another person or
entity, other than a merger in which both (i) ShopNow is the surviving
corporation and (ii) the equity in ShopNow immediately before the consummation
of the merger represents at least 51% of the aggregate voting power of the
surviving corporation's voting securities, or (b) the sale or transfer (in one
transaction or a series of transactions) of all or substantially all of
ShopNow's assets to another person or entity, whether assisted or unassisted,
voluntary or involuntary.

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Joe Arciniega
Page 2

If you become entitled to accelerated vesting of stock options as a result of a
Change in Control, and if the value of that vesting acceleration constitutes a
"parachute payment" under Section 280G of the Internal Revenue Code of 1986 (the
"Code"), as amended, or any successor statute then in effect (the "Parachute
Payment"), then ShopNow shall make a payment to you (the "Gross-Up Payment")
equal to the amount necessary so that the net amount that you retain from the
acceleration of vesting, after subtracting the parachute excise tax imposed by
Section 4999 of the Code, as amended, or any successor statute then in effect
(the "Excise Tax"), and after also subtracting all federal, state and local
income tax, FICA tax and Excise Tax on the Gross-Up Payment, shall be equal to
the net amount you would have retained if no Excise Tax had been imposed and no
Gross-Up Payment had been made. The Gross-Up Payment shall be calculated and
paid to you as soon as reasonably practical after you reasonably determine, and
notify ShopNow, that you have incurred an Excise Tax liability. In calculating
the amount of the Gross-Up Payment it shall be conclusively presumed that you
are paying federal income taxes at the highest marginal personal income tax
rate, and that you are paying state and local income taxes (if any apply) at the
highest marginal rate(s) in the locality of your residence as of the date the
Excise Tax is incurred, net of the maximum reduction in federal income taxes
that could be obtained from deducting those state and local taxes.

The number of options described above will be adjusted to account for any stock
split, stock dividend or similar transaction.

Any dispute regarding any of these stock options that cannot be resolved by
agreement shall be decided by the trier of fact (judge or jury) and any
provision in any stock option grant agreement, stock option plan or otherwise
that grants discretion to the Company or any other party to interpret the terms
of these options or to determine disputes regarding these options shall be
disregarded. All of these stock options shall have a life of 10 years from date
of grant. In the event your employment by ShopNow ends, and regardless of the
reason it ends, you will have at least 12 months after your employment ends to
exercise any and all of these stock options that have vested, notwithstanding
the contrary terms of any stock option grant agreement, stock option plan or
other writing.

If ShopNow terminates Mr. Arciniega, breaches this agreement (and fails to
correct breach within 30 days of notice), or causes Mr. Arciniega to resign by
materially reducing his compensation, changing his job title without his
consent, materially reducing his job responsibilities or stature, or requiring
that he relocate outside the greater Seattle area, ShopNow shall continue to pay
Mr. Arciniega's salary for 12 months from termination and continue to provide
all benefits for 12 months, and all unvested options granted to Mr. Arciniega
shall immediately vest.

If Mr. Arciniega resigns from ShopNow on or before December 31, 2000, ShopNow
shall pay Mr. Arciniega three months of salary, plus continue all benefits for
three months. If Mr. Arciniega resigns from ShopNow after December 31, 2000,
ShopNow shall pay Mr. Arciniega 12 months of salary, plus continue all benefits
for 12 months.

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Joe Arciniega
Page 3

ShopNow will pay the out-of-pocket legal fees Mr. Arciniega incurred in
connection with the drafting and negotiation of these amended terms of
employment.

Mr. Arciniega will participate in the benefits we offer generally to our
employees. You will receive four weeks of vacation per year. You will only be
allowed to take up to two weeks of vacation in any six-month period.

By signing this letter, you acknowledge that you are not relying on any promises
that are not set out in this letter in deciding to continue your employment with
us. Further, you reaffirm your Employee Intellectual Property Agreement
(Confidentiality, Invention Assignment, Non-Raiding and Non-Competition), which
you signed upon commencing employment with ShopNow.

We wish to emphasize again the importance we place on the proper treatment of
any confidential information with which you may have come into contact in the
past. We offered you this job based on your skills and abilities and not your
possession of any trade secret, confidential or proprietary information. We
require that you not obtain, keep, use for our benefit or disclose to us any
confidential, proprietary or trade secret information that belongs to others,
unless the party who has the rights to the information expressly consents in
writing in advance. Also, by signing below you again affirm, except as disclosed
to ShopNow previously, that you are not a party to any agreements, such as
non-competition agreements, that would limit your ability to perform your duties
for ShopNow.

The employment opportunity that we offer is of indefinite duration and will
continue as long as both you and ShopNow consider it of mutual benefit. Either
you or ShopNow is free to terminate the employment relationship at any time,
with or without cause. Any statements to the contrary are not authorized and may
not be relied upon. No one except ShopNow's President and CEO has authority to
bind the parties to an agreement that conflicts with our policy of employment at
will, and any such agreement must be in writing and signed by ShopNow's
President and CEO.

[Balance of page intentionally left blank]

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Joe Arciniega
Page 4

Please indicate your acceptance of these amended terms of employment by signing
and returning to me one of the two copies of this letter.

Sincerely,

/s/ Dwayne Walker

Dwayne Walker
Chairman and CEO

ACCEPTED:

/s/ Joe Arciniega
---------------------------------
Mr. Joe Arciniega

Dated: May 15, 2000
      ---------------------------

<PAGE>

                        AMENDMENT TO EMPLOYMENT AGREEMENT

The letter agreement (the "Agreement") dated May 15, 2000 between Network
Commerce Inc. (formerly ShopNow.com Inc.) and Joe Arciniega is hereby amended as
follows:

1.  The exercise price on the option grant shall be equal to the closing
    sales price of the Company's common stock on Friday, May 26,2000.

All other terms or conditions of the Agreement are unchanged by this
Amendment.

NETWORK COMMERCE INC.               Joe Arciniega

By /s/ Dwayne Walker                /s/ Joe Arciniega<PAGE>

May 15, 2000

Mr. Alan Koslow

RE:  OFFER OF AMENDED TERMS OF EMPLOYMENT

Dear Alan:

As an inducement to your continuing to remain employed by ShopNow.com Inc. on a
terminable-at-will basis, the board of directors and I are pleased to offer you
the following amended and improved terms of employment in your capacity as
ShopNow's Chief Financial Officer, General Counsel and Secretary.

You will continue to report directly to ShopNow's Chairman and CEO (Dwayne
Walker). Your gross annual salary will continue to be a minimum of $200,000 and
will be paid twice per month on the 15th and the last day of the month. You will
also be eligible for management bonuses, which may or may not be allocated by
ShopNow's CEO and board of directors.

All options previously granted to you will remain in effect. You will receive
additional option grants as follows:

1. You will be granted an option to purchase 500,000 shares on May 23,
   2000 at an exercise price equal to the lower of (1) the closing sales
   price on May 2, 2000 (date of Board meeting that authorized this
   agreement) or (2) fair market value of the stock on May 23, 2000. The
   option will vest in eight equal quarterly increments over a two year
   period beginning on the date the option is granted, but on any
   scheduled vesting date shares actually will vest only if you remain a
   ShopNow employee on that date. In addition, shares may vest sooner in
   accordance with the other terms of this letter.

If you remain employed by ShopNow through March 31, 2001, you will be paid a
special one-time bonus in the gross amount of $100,000, subject to the
following. If the arithmetic average of the closing prices of ShopNow shares for
the month of March 2001 is $10.00 or more, you will not be paid the bonus. The
$10.00 threshold price will be adjusted for stock splits or dividends.

If you remain employed by ShopNow through June 30, 2001, you will be paid a
special one-time bonus in the gross amount of $100,000, subject to the
following. If the arithmetic average of the

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Alan Koslow
Page 2

closing prices of ShopNow shares for the month of June 2001 is $12.00 or
more, you will not be paid the bonus. The $12.00 threshold price will be
adjusted for stock splits or dividends.

If a Change in Control occurs while you remain employed by ShopNow, all options
described above shall be granted to you (if not previously granted) and vest
immediately before the consummation of the Change in Control. "Change in
Control" is defined as: (a) the merger, consolidation, share exchange or similar
transaction between ShopNow and another person or entity, other than a merger in
which both (i) ShopNow is the surviving corporation and (ii) the equity in
ShopNow immediately before the consummation of the merger represents at least
51% of the aggregate voting power of the surviving corporation's voting
securities, or (b) the sale or transfer (in one transaction or a series of
transactions) of all or substantially all of ShopNow's assets to another person
or entity, whether assisted or unassisted, voluntary or involuntary.

If you become entitled to accelerated vesting of stock options as a result of a
Change in Control, and if the value of that vesting acceleration constitutes a
"parachute payment" under Section 280G of the Internal Revenue Code of 1986 (the
"Code"), as amended, or any successor statute then in effect (the "Parachute
Payment"), then ShopNow shall make a payment to you (the "Gross-Up Payment")
equal to the amount necessary so that the net amount that you retain from the
acceleration of vesting, after subtracting the parachute excise tax imposed by
Section 4999 of the Code, as amended, or any successor statute then in effect
(the "Excise Tax"), and after also subtracting all federal, state and local
income tax, FICA tax and Excise Tax on the Gross-Up Payment, shall be equal to
the net amount you would have retained if no Excise Tax had been imposed and no
Gross-Up Payment had been made; provided, however that in no event will the
Company be required to pay you more than $1,000,000 pursuant to this paragraph.
The Gross-Up Payment shall be calculated and paid to you as soon as reasonably
practical after you reasonably determine, and notify ShopNow, that you have
incurred an Excise Tax liability. In calculating the amount of the Gross-Up
Payment it shall be conclusively presumed that you are paying federal income
taxes at the highest marginal personal income tax rate, and that you are paying
state and local income taxes (if any apply) at the highest marginal rate(s) in
the locality of your residence as of the date the Excise Tax is incurred, net of
the maximum reduction in federal income taxes that could be obtained from
deducting those state and local taxes. The determination of your excise tax
liability and the amount, if any, required to be paid under this paragraph will
be made in writing by the Company's independent auditors.

The number of options described above will be adjusted to account for any stock
split, stock dividend or similar transaction.

All of these stock options shall have a maximum life of 10 years from date of
grant. In the event your employment by ShopNow ends, and regardless of the
reason it ends, you will have 12 months after your employment ends to exercise
any and all of your stock options that have vested (or if earlier, until the
maximum 10 year expiration date), notwithstanding the contrary terms of any
stock option grant agreement, stock option plan or other writing.

If ShopNow terminates Mr. Koslow (for a reason other than Cause, disability or
death), breaches this agreement (and fails to correct breach within 30 days of
notice), or causes Mr. Koslow to resign by materially reducing his compensation,
changing his job title without his consent,

<PAGE>

Alan Koslow
Page 3

materially reducing his job responsibilities or stature, or requiring that he
relocate outside the greater Seattle area, ShopNow shall continue to pay Mr.
Koslow's salary for 12 months from termination and continue to provide all
benefits for 12 months, and all unvested options granted to Mr. Koslow shall
immediately vest. Cause means intentional misconduct that has a material
adverse effect on ShopNow. Misconduct by you will be considered Cause only if
you have received written notice from the ShopNow Board of the misconduct and
you have not cured the misconduct within 15 days of your receipt of the
notice.

If Mr. Koslow resigns from ShopNow ShopNow shall pay Mr. Koslow three months of
salary, plus continue all benefits for three months.

ShopNow will pay the out-of-pocket legal fees Mr. Koslow incurred in connection
with the drafting and negotiation of these amended terms of employment, up to a
maximum of $7,500.

Mr. Koslow will participate in the benefits we offer generally to our employees.
You will receive four weeks of vacation per year. You will only be allowed to
take up to two weeks of vacation in any six-month period.

By signing this letter, you acknowledge that you are not relying on any promises
that are not set out in this letter in deciding to continue your employment with
us. Further, you reaffirm your Employee Intellectual Property Agreement
(Confidentiality, Invention Assignment, Non-Raiding and Non-Competition), which
you signed upon commencing employment with ShopNow.

We wish to emphasize again the importance we place on the proper treatment of
any confidential information with which you may have come into contact in the
past. We offered you this job based on your skills and abilities and not your
possession of any trade secret, confidential or proprietary information. We
require that you not obtain, keep, use for our benefit or disclose to us any
confidential, proprietary or trade secret information that belongs to others,
unless the party who has the rights to the information expressly consents in
writing in advance. Also, by signing below you again affirm, except as disclosed
to ShopNow previously, that you are not a party to any agreements, such as
non-competition agreements, that would limit your ability to perform your duties
for ShopNow.

The employment opportunity that we offer is of indefinite duration and will
continue as long as both you and ShopNow consider it of mutual benefit. Either
you or ShopNow is free to terminate the employment relationship at any time,
with or without cause. Any statements to the contrary are not authorized and may
not be relied upon. No one except ShopNow's President and CEO has authority to
bind the parties to an agreement that conflicts with our policy of employment at
will, and any such agreement must be in writing and signed by ShopNow's
President and CEO.

[Balance of page intentionally left blank]

<PAGE>

Alan Koslow
Page 4

Please indicate your acceptance of these amended terms of employment by signing
and returning to me one of the two copies of this letter.

Sincerely,

/s/ Dwayne Walker

Dwayne Walker
Chairman and CEO

ACCEPTED:

/s/ Alan Koslow
----------------------------------
Mr. Alan Koslow

Dated:    May 15, 2000
      ----------------------------

<PAGE>

                        AMENDMENT TO EMPLOYMENT AGREEMENT

The letter agreement (the "Agreement") dated May 15, 2000 between Network
Commerce Inc. (formerly ShopNow.com Inc.) and Alan Koslow is hereby amended as
follows:

1.  The exercise price on the option grant shall be equal to the closing
    sales price of the Company's common stock on Friday, May 26, 2000.

2.  The last paragraph on page 1 of the Agreement is deleted in its
    entirety. This paragraph begins as follows:

         "If you remain employed by ShopNow through June 30, 2001,
         you will be paid a special one-time bonus..."

3.  The following paragraph is added to the Agreement and replaces the
    paragraph deleted above:

         "If you remain employed by Network Commerce Inc. through
         January 31, 2001, you will be paid a special one-time
         guaranteed bonus in the gross amount of a minimum of
         $75,000."

         All other terms or conditions of the Agreement are
         unchanged by this Amendment.

         NETWORK COMMERCE INC.          Alan Koslow

         By /s/ Dwayne Walker           /s/ Alan Koslow

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