Document:

<PAGE>   1

                                                                   Exhibit 10.13

                            INDEMNIFICATION AGREEMENT

         THIS INDEMNIFICATION AGREEMENT (this AGREEMENT) is entered into as of
the 25th day of February, 1999, by and among FairMarket, Inc. a Delaware
corporation (the COMPANY) and each indemnitee (INDEMNITEE) executing this
Agreement.

                                    RECITALS

         A. The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for its directors, officers, employees,
stockholders (as defined in Section 10(g)), controlling persons, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance.

         B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, controlling persons, stockholders (as defined in Section 10(g)),
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely limited.

         C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employees, stockholders (as defined in Section 10(g)), controlling
persons, agents and fiduciaries of the Company may not be willing to serve in
such capacities without additional protection.

         D. The Company (i) desires to attract and retain the involvement of
highly qualified groups, such as Indemnitee, to serve the Company and, in part,
in order to induce each Indemnitee to be involved with the Company and (ii)
wishes to provide for the indemnification and advancing of expenses to each
Indemnitee to the maximum extent permitted by law.

         E. In view of the considerations set forth above, the Company desires
that each Indemnitee be indemnified by the Company as set forth herein.

         NOW THEREFORE, the Company and each Indemnitee hereby agrees as
follows:

         1.       INDEMNIFICATION.

                  (a) INDEMNIFICATION OF EXPENSES. The Company shall indemnify
and hold harmless each Indemnitee (including its respective directors, officers,
general partners, limited partners, members, managing members, employees, agents
and spouses) and each person who controls any of them or who may be liable
within the meaning of Section 15 of the Securities Act of 1933, as amended (the
SECURITIES ACT), or Section 20 of the Securities Exchange Act of 1934, as
amended (the EXCHANGE ACT), to the fullest extent permitted by law if such
Indemnitee was or is or becomes a party to or witness or other participant in,
or is threatened to be made a party to or witness or other participant in, any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that such
Indemnitee believes might lead to the institution of any such action,

                                      -1-

<PAGE>   2

suit, proceeding or alternative dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other (hereinafter a CLAIM) by reason
of (or arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was or may be deemed a director, officer, stockholder (as
defined in Section 10(g)), employee, controlling person, agent or fiduciary of
the Company, or any subsidiary of the Company, or is or was or may be deemed to
be serving at the request of the Company as a director, officer, stockholder (as
defined in Section 10(g)), employee, controlling person, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of such Indemnitee while serving
in such capacity including, without limitation, any and all losses, claims,
damages, expenses and liabilities, joint or several (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit, proceeding or any claim
asserted) under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, which relate directly
or indirectly to the registration, purchase, sale or ownership of any securities
of the Company or to any fiduciary obligation owed with respect thereto or as a
result of any claim (a) made by any stockholder (as defined in Section 10(g)) of
the Company against an Indemnitee and arising out of or related to any round of
financing of the Company (including, but not limited to, claims regarding
non-participation, or non-prorata participation, in such round by such
stockholder (as defined in Section 10(g)), (b) made by a third party against an
Indemnitee based on any misstatement or omission of a material fact by the
Company in violation of any duty of disclosure imposed on the Company by Federal
or state securities or common laws, (c) made by a third party against an
Indemnitee based (in whole or in part) on, or arising in any way out of, or
relating to conduct attributed to the Company or anyone alleged to be acting on
the Company's behalf, or (d) made by a third party against an Indemnitee based
(in whole or in part) on, or arising in any way out of, or relating to (i) the
Indemnitee being an investor in the Company, (ii) the Indemnitee's alleged
participation in the management or direction of the Company, (iii) the
Indemnitee's alleged participation in providing any assistance or advice to the
Company, or (iv) Indemnitee being a person described in Section 15 of Securities
Act or Section 20 of the Exchange Act (hereinafter an individually an
INDEMNIFICATION EVENT and collectively the INDEMNIFICATION EVENTS) against any
and all expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including an appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if, and only if, such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld) of such Claim and any federal, state, local or foreign
taxes imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement (collectively, hereinafter EXPENSES), including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses. Such payment of Expenses shall be made by the
Company as soon as practicable but in any event no later than ten (10) days
after written demand by the Indemnitee therefor is presented to the Company.

                  (b) REVIEWING PARTY. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 1(a) shall be subject to the condition
that it shall not have been finally determined that Indemnitee would not be
permitted to be indemnified under applicable law (initial determination shall be
made by the Reviewing Party as described in Section 10(e)

                                      -2-

<PAGE>   3

hereof in a written opinion, in any case in which the Independent Legal Counsel
referred to in Section 1(e) hereof is involved), and (ii) and each Indemnitee
acknowledges and agrees that the obligation of the Company to make an advance
payment of Expenses to Indemnitee pursuant to Section 2(a) (an EXPENSE ADVANCE)
shall be subject to the condition that, if, when and to the extent that it is so
determined that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
initial determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for any Expense Advance shall
be unsecured and no interest shall be charged thereon. If there has not been a
Change in Control (as defined in Section 10(c) hereof), the Reviewing Party
shall be selected by the Board of Directors, and if there has been such a Change
in Control (other than a Change in Control which has been approved by a majority
of the Company's Board of Directors who were directors immediately prior to such
Change in Control), the Reviewing Party shall be the Independent Legal Counsel
referred to in Section 1(e) hereof. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.

                  (c) CONTRIBUTION. If the indemnification provided for in
Section 1(a) above for any reason is held by a court of competent jurisdiction
to be unavailable to an Indemnitee in respect of any losses, claims, damages,
expenses or liabilities referred to therein, then the Company, in lieu of
indemnifying such Indemnitee thereunder, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, expenses
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Indemnitee, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Indemnitee in connection with the action or inaction which resulted in such
losses, claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. In connection with the registration of the Company's
securities, the relative benefits received by the Company and the Indemnitee
shall be deemed to be in the same respective proportions that the net proceeds
from the offering (before deducting expenses) received by the Company and the
Indemnitee, in each case as set forth in the table on the cover page of the
applicable prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Company and the Indemnitee
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission

                                      -3-

<PAGE>   4

or alleged omission to state a material fact relates to information supplied by
the Company or the Indemnitee and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

The Company and the Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section 1(c) were determined by pro rata or per
capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. In connection with the registration of the Company's securities, in
no event shall Indemnitee be required to contribute any amount under this
Section 1(c) in excess of the lesser of (i) that proportion of the total of such
losses, claims, damages or liabilities indemnified against equal to the
proportion of the total securities sold under such registration statement which
is being sold by such Indemnitee or (ii) the proceeds received by such
Indemnitee from its sale of securities under such registration statement. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not found guilty of such fraudulent misrepresentation.

                  (d) SURVIVAL REGARDLESS OF INVESTIGATION. The indemnification
and contribution provided for in this Section 1 will remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnitee or
any officer, director, general partner, limited partner, member, managing
member, employee, agent or controlling person of the Indemnitee.

                  (e) CHANGE IN CONTROL. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then, with respect to all matters
thereafter arising concerning the rights of Indemnitee to payments of Expenses
under this Agreement or any other agreement or under the Company's Restated
Certificate of Incorporation (the RESTATED CERTIFICATE) or Bylaws as now or
hereafter in effect, Independent Legal Counsel (as defined in Section 10(d)
hereof) shall be selected by the Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent Indemnitee would be permitted to be indemnified under applicable
law. The Company agrees to abide by such opinion and to pay the reasonable fees
of the Independent Legal Counsel referred to above and to fully indemnify such
counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

                  (f) MANDATORY PAYMENT OF EXPENSES. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise, including, without limitation, the dismissal of an
action without prejudice, in the defense of any action, suit, proceeding,
inquiry or investigation referred to in Section 1(a) hereof or in the defense of
any claim, issue or matter therein, each Indemnitee shall be indemnified against
all Expenses incurred by such Indemnitee in connection herewith.

                                      -4-

<PAGE>   5

         2.       EXPENSES; INDEMNIFICATION PROCEDURE.

                  (a) ADVANCEMENT OF EXPENSES. The Company shall advance all
Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid
by the Company to Indemnitee as soon as practicable but in any event no later
than fifteen (15) days after written demand by such Indemnitee therefor to the
Company.

                  (b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall give
the Company notice as soon as practicable of any Claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the Chief Executive Officer of the Company
at the address shown on the signature page of this Agreement (or such other
address as the Company shall designate in writing to Indemnitee).

                  (c) NO PRESUMPTIONS; BURDEN OF PROOF. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of NOLO
CONTENDERE, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

                  (d) NOTICE TO INSURERS. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt written notice of the commencement of such Claim to the insurers in
accordance with the procedures set forth in each of the policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.

                  (e) SELECTION OF COUNSEL. In the event the Company shall be
obligated hereunder to pay the Expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim, with counsel reasonably approved
by the applicable Indemnitee, upon the delivery to such Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to such Indemnitee under this Agreement for any fees
of counsel subsequently incurred by such Indemnitee with respect to the same
Claim; provided that, (i) the Indemnitee shall have the right to employ such
Indemnitee's counsel in

                                      -5-

<PAGE>   6

any such Claim at the Indemnitee's expense; (ii) the Indemnitee shall have the
right to employ his own counsel in connection with any such proceeding, at the
expense of the Company, if such counsel serves in a review, observer, advice and
counseling capacity and does not otherwise materially control or participate in
the defense of such proceeding; and (iii) if (A) the employment of counsel by
the Indemnitee has been previously authorized by the Company, (B) such
Indemnitee shall have reasonably concluded that there is a conflict of interest
between the Company and such Indemnitee in the conduct of any such defense, or
(C) the Company shall not continue to retain such counsel to defend such Claim,
then the fees and expenses of the Indemnitee's counsel shall be at the expense
of the Company.

         3.       ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

                  (a) SCOPE. The Company hereby agrees to indemnify Indemnitee
to the fullest extent permitted by law, even if such indemnification is not
specifically authorized by the other provisions of this Agreement or any other
agreement, the Company's Restated Certificate, the Company's Bylaws or by
statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
stockholder (as defined in Section 10(g)), employee, controlling person, agent
or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits afforded by such change. In the event of
any change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, stockholder (as defined in Section 10(g)), employee, agent or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder except as set forth
in Section 8(a) hereof.

                  (b) NONEXCLUSIVITY. The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be entitled
under the Company's Restated Certificate, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the laws of the State of California or
the State of Delaware, or otherwise. The indemnification provided under this
Agreement shall continue as to each Indemnitee for any action such Indemnitee
took or did not take while serving in an indemnified capacity even though the
Indemnitee may have ceased to serve in such capacity and such indemnification
shall inure to the benefit of each Indemnitee from and after Indemnitee's first
day of service as a director with the Company or affiliation with a director
from and after the date such director commences services as a director with the
Company.

         4. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against any
Indemnitee to the extent such Indemnitee has otherwise actually received payment
(under any insurance policy, Restated Certificate, Bylaws or otherwise) of the
amounts otherwise indemnifiable hereunder.

         5. PARTIAL INDEMNIFICATION. If any Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for any portion of
Expenses incurred in

                                      -6-

<PAGE>   7

connection with any Claim, but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such Expenses to which such Indemnitee is entitled.

         6. MUTUAL ACKNOWLEDGEMENT. The Company and each Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, stockholders (as defined
in Section 10(g)), employees, controlling persons, agents or fiduciaries under
this Agreement or otherwise.

         7. LIABILITY INSURANCE. To the extent the Company maintains liability
insurance applicable to directors, officers, stockholders (as defined in Section
10(g)), employees, control persons, agents or fiduciaries, each Indemnitee shall
be covered by such policies in such a manner as to provide Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company's directors, if such Indemnitee is a director, or of the Company's
officers, if such Indemnitee is not a director of the Company but is an officer,
or of the Company's key employees, controlling persons, agents or fiduciaries,
if such Indemnitee is not an officer or director but is a key employee, agent,
control person, or fiduciary.

         8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

                  (a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to any Indemnitee with respect to Claims initiated or brought
voluntarily by such Indemnitee and not by way of defense, except (i) with
respect to actions or proceedings to establish or enforce a right to
indemnification under this Agreement or any other agreement or insurance policy
or under the Company's Restated Certificate or Bylaws now or hereafter in effect
relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board
of Directors has approved the initiation or bringing of such Claim, or (iii) as
otherwise required under Delaware statute or law, regardless of whether such
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be; or

                  (b) CLAIM UNDER SECTION 16(b). To indemnify any Indemnitee for
expenses and the payment of profits arising from the purchase and sale by such
Indemnitee of securities in violation of Section 16(b) of the Exchange Act or
any similar successor statute; or

                  (c) UNLAWFUL INDEMNIFICATION. To indemnify an Indemnitee if a
final decision by a court having jurisdiction in the matter shall determine that
such indemnification is not lawful.

         9. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against any
Indemnitee, any Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of five (5) years from the date of
accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such five (5) year period; provided, however, that if
any shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall

                                      -7-

<PAGE>   8

govern.

         10.      CONSTRUCTION OF CERTAIN PHRASES.

                  (a) For purposes of this Agreement, references to the COMPANY
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, stockholders
(as defined in Section 10(g)), employees, agents or fiduciaries, so that if
Indemnitee is or was or may be deemed a director, officer, stockholder (as
defined in Section 10(g)), employee, agent, control person, or fiduciary of such
constituent corporation, or is or was or may be deemed to be serving at the
request of such constituent corporation as a director, officer, stockholder (as
defined in Section 10(g)), employee, control person, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, each Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as each Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

                  (b) For purposes of this Agreement, references to OTHER
ENTERPRISES shall include employee benefit plans; references to FINES shall
include any excise taxes assessed on any Indemnitee with respect to an employee
benefit plan; and references to SERVING AT THE REQUEST OF THE COMPANY shall
include any service as a director, officer, stockholder (as defined in Section
10(g)), employee, agent or fiduciary of the Company which imposes duties on, or
involves services by, such director, officer, stockholder (as defined in Section
10(g)), employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if any Indemnitee acted in good faith
and in a manner such Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, such Indemnitee
shall be deemed to have acted in a manner NOT OPPOSED TO THE BEST INTERESTS OF
THE COMPANY as referred to in this Agreement.

                  (c) For purposes of this Agreement a CHANGE IN CONTROL shall
be deemed to have occurred if (i) any PERSON (as such term is used in Section
13(d)(3) and 14(d)(2) of the Exchange Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders (as defined in
Section 10(g)) of the Company in substantially the same proportions as their
ownership of stock of the Company, (A) who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing twenty percent
(20%) or more of the combined voting power of the Company's then outstanding
Voting Securities, increases his beneficial ownership of such securities by five
percent (5%) or more over the percentage so owned by such person, or (B) becomes
the BENEFICIAL OWNER (as defined in Rule 13d-3 under said Exchange Act),
directly or indirectly, of securities of the Company representing more than
thirty percent (30%) of the total voting power represented by the Company's then
outstanding Voting Securities, (ii) during any period of two (2) consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or combination for election by the Company's stockholders (as defined
in Section 10(g)) was approved by a vote of at least two-

                                      -8-

<PAGE>   9

thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders (as defined in Section 10(g)) of the Company approve a
merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least two-thirds (2/3) of the total voting power
represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
(as defined in Section 10(g)) of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of transactions) all or substantially
all of the Company's assets.

                  (d) For purposes of this Agreement, INDEPENDENT LEGAL COUNSEL
shall mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(e) hereof, who shall not have otherwise performed
services for the Company or any Indemnitee within the last three (3) years
(other than with respect to matters concerning the right of any Indemnitee under
this Agreement, or of other indemnitees under similar indemnity agreements).

                  (e) For purposes of this Agreement, a REVIEWING PARTY shall
mean any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification or Independent Legal Counsel.

                  (f) For purposes of this Agreement, VOTING SECURITIES shall
mean any securities of the Company that vote generally in the election of
directors.

                  (g) For purposes of this Agreement, STOCKHOLDER shall include
any holder of any capital stock of the Company and an affiliate thereof. For
purposes of this Agreement, AFFILIATE shall constitute any limited partner,
general partner, or any member or managing member of such general partner.

         11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

         12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, partnership,
spouses, heirs, and personal and legal representatives. The Company shall
require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business and/or assets of the Company, by written agreement in form and
substance satisfactory to each Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and

                                      -9-

<PAGE>   10

to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect with respect
to Claims relating to Indemnifiable Events regardless of whether any Indemnitee
continues to serve as a director, officer, employee, agent, controlling person,
or fiduciary of the Company or of any other enterprise, including subsidiaries
of the Company, at the Company's request.

         13. ATTORNEYS FEES. In the event that any action is instituted by an
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, such Indemnitee shall be entitled to be paid all Expenses incurred by
such Indemnitee with respect to such action, regardless of whether such
Indemnitee is ultimately successful in such action, and shall be entitled to the
advancement of Expenses with respect to such action, unless, as a part of such
action, a court of competent jurisdiction over such action determines that each
of the material assertions made by such Indemnitee as a basis for such action
was not made in good faith or was frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, the Indemnitee shall be entitled
to be paid all Expenses incurred by such Indemnitee in defense of such action
(including costs and expenses incurred with respect to Indemnitee counterclaims
and cross-claims made in such action), and shall be entitled to the advancement
of Expenses with respect to such action.

         14. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by first class mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if deliverable by facsimile transmission, with copy by
first class mail, postage prepaid, and shall be addressed, if to Indemnitee, at
each Indemnitee's address as set forth beneath the Indemnitee's signature to
this Agreement, and, if to the Company, at the address of its principal
corporate offices (attention: Secretary), or at such other address as such party
may designate by ten (10) days' advance written notice to the other parties
hereto.

         15. CONSENT TO JURISDICTION. The Company and each Indemnitee each
hereby irrevocably consent to the jurisdiction and venue of the courts of the
State of California for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be commenced, prosecuted and continued
only in the courts of the State of California.

         16. SEVERABILITY. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the extent manifested by the provision held invalid,

                                      -10-

<PAGE>   11

illegal or unenforceable.

         17. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
California, as applied to contracts between California residents, entered into
and to be performed entirely within the State of California, without regard to
the conflict of laws principles thereof.

         18. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

         19. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by the parties to be bound thereby. Notice of same shall be provided to
all parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.

         20. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving any Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries.

         21. CORPORATE AUTHORITY. The Board of Directors of the Company and its
stockholders in accordance with Delaware law have approved the terms of this
Agreement.

                                      -11-

<PAGE>   12

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

                                                FairMarket, Inc.
                                                a Delaware corporation

                                                    /s/ Scott Randall
                                                --------------------------------
                                                By: Scott Randall

                                                Address: 400 Unicorn Park Drive
                                                         Woburn, MA  01801

                                                   INDEMNITEE:

                                 SIERRA VENTURES VII, L.P.

                                     By: Sierra Ventures Associates VII, L.L.C.
                                         Its: General Partner

                                     By:    /s/ Jeffrey Drazan
                                        --------------------------------------
                                        Managing Member

                                     Address: 3000 Sand Hill Road
                                              Building 4, Suite 210
                                              Menlo Park, CA 94025

                                 SIERRA VENTURES ASSOCIATES VII, L.L.C.

                                     By:    /s/ Jeffrey Drazan
                                        --------------------------------------
                                        Managing Member

                                     Address: 3000 Sand Hill Road
                                              Building 4, Suite 210
                                              Menlo Park, CA 94025

                                      -12-<PAGE>   1
                                                                   EXHIBIT 10.14

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED MATERIALS HAVE BEEN INDICATED WITH
ASTERISKS.

                      MICROSOFT AND FAIRMARKET CONFIDENTIAL

                              MICROSOFT CORPORATION
                      COMPOSITE AUCTION SERVICES AGREEMENT

         This Auction Services Agreement (the "Agreement") is made and entered
into as of this 26th day of July, 1999 (the "Effective Date"), by and between
Microsoft Corporation, a Washington corporation, with a principal place of
business located at One Microsoft Way, Redmond, WA 98052 ("Microsoft") and
FairMarket, Inc., a Delaware corporation, with a principal place of business
located at 400 Unicorn Park Drive, Woburn, MA 01801 ("FairMarket").

                                    RECITALS

         Microsoft operates a number of web sites and wishes to offer users of
such sites access to a Microsoft-branded auction service.

         FairMarket is in the business of designing, developing and hosting web
sites for third parties and wishes to create, host and support private label
auction services for Microsoft, based upon Microsoft specifications and branding
requirements.

         Microsoft wishes to enter into an agreement to have FairMarket develop,
host and support key elements of a private labeled Microsoft auction service
that is accessible on various Microsoft web sites, which sites shall be
determined in Microsoft's sole discretion.

         Now therefore, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
Microsoft and FairMarket agree as follows.

                                    AGREEMENT

1.   DEFINITIONS

          1.1 "ADMINISTRATIVE MODULE" means that online software tool, as more
     fully described in Exhibit A attached hereto and incorporated herein by
     this reference, provided to Microsoft by FairMarket that allows Microsoft
     to access and modify certain portions of the Private Label Auction Sites as
     described in Section 2.8.

          1.2 "ADVERTISING FEES" means any fees charged by Microsoft from the
     sale of banner advertising and tile ad advertising.

          1.3 "AFFILIATES" means those companies for whom FairMarket provides
     private label auction services similar to the Private Label Auction Sites
     as defined herein.

          1.4 "AUCTION CONTENT AREA" means the area on a Private Label Auction
     Site where the main auction and classified advertising listings and
     auctions/classifieds-related merchandising occurs.

          1.5 "AUCTION SERVICES" means commerce services where Buyers set the
     ultimate sales price of the goods or services offered for sale on the
     Private Label Auction Sites, including without limitation, auctions of all
     types (e.g., traditional, Dutch, English, reverse, quick-win) and declining
     price sales formats.

          1.6 "BUYER" means a person purchasing items.

                                       1
<PAGE>   2

          1.7 "CLASSIFIED ADVERTISING SERVICES" means line listing type
     advertising in the auctions/classifieds area of the Private Label Auction
     Sites where Sellers set a fixed sales price for the goods or services
     available for purchase online or offline.

          1.8 "COMMERCIAL RELEASE DATE" means the date on which the first
     Private Label Auction Site becomes commercially available to the general
     public.

          1.9 "END USERS" means all end users of the Private Label Auction
     Sites, including without limitation, Buyers and Sellers.

          1.10 "FAIRMARKET NETWORK" means the network of sites of FairMarket's
     Affiliate customers for whom FairMarket hosts private label auction
     services similar to the Private Label Auction Sites as defined herein.

          1.11 "LISTING FEES" means any fee charged to a Seller for entering its
     listings of products or services on the Private Label Auction Sites.
     Listing fees include basic listing fees for participation as well as fees
     for participation in Merchandising Locations.

          1.12 "MERCHANDISING LOCATIONS" means areas on the Private Label
     Auction Sites where Sellers can merchandise themselves as a featured
     merchant or their product listings. Merchandising Locations will include
     enhanced listings (e.g., bold), Featured Merchants List, Featured Merchant
     Listings, Hot Listings, and navigational area Category Sponsorships.
     Examples of such locations are set forth in the attached Exhibit D.

          1.13 "MICROSOFT MARKS" means those Microsoft trademarks, trade names,
     service marks, and/or logos, including without limitation the MSN Logo,
     which Microsoft elects to use on and in connection with the Private Label
     Auction Sites.

          1.14 "MICROSOFT SITES" means the web sites owned and/or operated by
     Microsoft (including any versions, upgrades, successors and replacements
     thereof), including without limitation, those identified in Section 2.4
     below.

          1.15 "MSN" means Microsoft's general information portal web site
     located at www.msn.com (including any versions, upgrades, successors and
     replacements thereof).

          1.16 "MSN LOGO" means the MSN logo provided to FairMarket for use in
     the Private Label Auction Sites or such additional or replacement logos as
     Microsoft may provide from time to time under this Agreement.

          1.17 "PRIVATE LABEL AUCTION SITES" means those web sites created by
     FairMarket on behalf of Microsoft pursuant to this Agreement where, among
     other things, End Users can buy and sell items through Auction Services and
     Classified Advertising Services.

          1.18 "SELLERS" means persons purchasing listings seeking to sell
     items.

          1.19 "SPECIFICATIONS" means those functional specifications described
     in FairMarket's Community Auction Place Features, version 4.0, as such
     specifications may be improved and updated from time to time. The current
     version of the Specifications is attached hereto as Exhibit A and
     incorporated herein by this reference.

          1.20 "TERM" means the period set forth in Section 12.

          1.21 "TERRITORY" means the geographic area comprising the United
     States, including its possessions and territories, and Canada.

                                       2
<PAGE>   3

          1.22 "TRANSACTION FEES" means any fee charged by Microsoft to Sellers
     or Buyers which become payable to Microsoft upon the consummation of a sale
     of product or service through the Auction Services or the Classified
     Advertising Services.

          1.23 "USER INTERFACE" means the area where the overall site
     navigation, banner advertising and look and feel associated with each
     Private Label Auction Site is displayed.

          1.24 All other initially capitalized terms shall have the meanings
     hereinafter assigned to them.

2.   FAIRMARKET RIGHTS AND OBLIGATIONS

          2.1 DEVELOPMENT AND HOSTING OBLIGATIONS OF FAIRMARKET. FairMarket will
     provide Microsoft with an Administrative Module for each of the Private
     Label Auction Sites through which Microsoft can control the Auction
     Services parameters on each such Private Label Auction Site, including user
     interface, auction categories, listings and email text, as well as have
     access to real-time auction reporting. Each such Administrative Module
     shall be based on and in conformance with the Specifications. At
     Microsoft's election and written request, during the Term FairMarket shall
     provide Microsoft with the Administrative Modules to create and develop an
     unlimited number of versions of the Private Label Auction Sites for
     simultaneous use by Microsoft in connection with the provision of Auction
     Services and Classified Advertising Services to End Users of the Microsoft
     Sites in the Territory. Such versions shall be at no charge to Microsoft
     except as otherwise provided herein. FairMarket shall be responsible for
     all system operation software costs, hardware costs and operation costs
     incurred in connection with the development and operation of the Private
     Label Auction Sites. FairMarket agrees to make reasonable product
     modifications, including without limitation, adding new graphics,
     adding/deleting or modifying links to third-party web sites, and screen
     redesigns, within 14 days of receiving any revised written request from
     Microsoft during the Term.

          2.2 HOSTING AND URLS. FairMarket shall host the Private Label Auction
     Sites on servers owned or controlled by FairMarket, under Universal
     Resource Locator(s) ("URL(s)") to be provided by Microsoft.

          2.3 MODIFICATIONS. Notwithstanding anything contained in Section 2.1,
     FairMarket shall ensure that Microsoft has the ability to independently
     modify and tailor each Private Label Auction Site as described in Sections
     2.5 and 2.8 of this Agreement.

          2.4 PARTICIPATING MICROSOFT SITES. FairMarket acknowledges and agrees
     that the Microsoft Sites named in List #1 below are the most likely
     Microsoft Sites to incorporate Private Label Auction Services developed by
     FairMarket. The parties acknowledge and agree that some of the Microsoft
     Sites named in List #2 will also incorporate Private Label Auction Services
     developed by FairMarket and in some cases the Microsoft Sites named in List
     #1 may not.

                  LIST #1
                  -------
                  MSN.com.
                  Business Channel
                  Computing Central
                  MSN Plaza/Shopping
                  Womens Channel
                  MSN Gaming Zone
                  Sidewalk/Comparenet
                  MSN Entertainment
                  Web Communities
                  MSN Search

                                       3
<PAGE>   4

                  LIST #2
                  -------
                  MSN Sports
                  HotMail
                  WebTV
                  LinkExchange
                  Encarta
                  Expedia
                  Carpoint
                  Microsoft Instant Messenger
                  MSNBC
                  HomeAdvisor
                  MoneyCentral

     2.5     USER INTERFACE; CO-BRANDING. Microsoft will determine the look and
     feel of the User Interfaces for each of the Private Label Auction Sites,
     subject to the condition that each page of the Private Label Auction Sites
     will contain "Member of the FairMarket Network" or similar mutually agreed
     upon FairMarket ingredient branding. Microsoft will utilize the
     Administrative Module to program all HTML code to create the User
     Interface. FairMarket will use best efforts to assist Microsoft in
     developing the User Interfaces for each of the Private Label Auction Sites.
     To the extent that FairMarket's Administrative Module cannot be used to
     create Microsoft's desired look and feel, FairMarket will use commercially
     reasonable efforts to approximate the Microsoft Sites' look and feel as
     closely as possible.

     2.6  CONTENT; REMOVAL.

               (a) FairMarket agrees to make available at no cost to Microsoft,
          and except as otherwise provided in this Agreement, Microsoft agrees
          to display listings and other Merchandising Listings from the
          FairMarket Network in the Auction Content Area.

               (b) FairMarket shall be primarily responsible for removing
          auctions, classified advertising categories or items or listings if
          they do not comply with generally acceptable advertising industry
          standards. Examples of such types of items include, without
          limitation, pornography, drugs, alcohol and racially or politically
          offensive products or ads. In addition, FairMarket will work with
          Microsoft to identify and establish a mutually agreed set of
          additional categories or items that FairMarket will be primarily
          responsible for removing.

               (c) In addition, in Microsoft's sole discretion, Microsoft may
          elect that the Private Label Auction Sites will not contain certain
          types of classified advertising, including without limitation, real
          estate classified ads, automobile classified ads, travel classifieds
          ads, employment classified ads or certain auction categories or
          related auction listings such as computer software, whether such
          listings originated on the Private Label Auction Sites or Affiliate
          sites. In addition to FairMarket's obligation identified in Section
          2.6(b) above, Microsoft shall have the right, but not the obligation,
          to remove auctions or classified advertising categories or items if
          they do not comply with Microsoft standard advertising guidelines, or
          if they are competitive to the Microsoft Sites, e.g., auto auctions
          from Auto-by-Tel. FairMarket shall ensure that the Administrative
          Module provides Microsoft with the ability and all necessary
          functionality to remove objectionable listings from the Private Label
          Auction Sites. Microsoft has the right not to include listings if it
          has reason to believe any such listing might be illegal/fraudulent, or
          if a Seller is a known counterfeiter, and the like.

     2.7       MERCHANDISING LOCATIONS. The Private Label Auction Sites will
          contain merchandising areas within the Auction Content Area where
          Sellers can merchandise their listings. Certain locations have
          currently been defined and are listed below; FairMarket and/or
          Microsoft may develop others during the course of this Agreement. For
          each Merchandising Location, the following will apply.

                                       4
<PAGE>   5

               (A) PRE-IDENTIFIED MERCHANDISING LOCATIONS. The following are
               Merchandising Locations that currently exist and will be included
               as part of the Private Label Auction Sites. (i) Featured Merchant
               Listings: Appear in the main body of each category page, above
               the Current Listings section; (ii) Featured Merchants: Appear in
               the left or right hand menu bar; (iii) Hot Listings: Appear in
               the left or right hand menu bar; (iv) Category Sponsorship:
               Appear above the main body of each category and sub-category
               page, contains a text link or graphic link to a category
               sponsor's detailed listings on the Private Label Auction Site.

               Notwithstanding the forgoing, the location of these
               pre-identified Merchandising Locations on the Private Label
               Auction Sites will be determined solely by Microsoft. Additional
               Merchandising Locations will be added in Microsoft's sole
               discretion.

               (B) DISPLAY OF FAIRMARKET ITEMS IN MERCHANDISING LOCATIONS ON THE
               PRIVATE LABEL AUCTION SITES:

                    -    FairMarket shall receive 25% of the listings inventory
                         in the Featured Merchants List areas.

                    -    FairMarket shall receive 25% of the listings inventory
                         in Featured Merchant Listings areas.

                    -    FairMarket shall receive 25% of the listings inventory
                         in Hot Listings areas.

                    -    FairMarket shall receive 25% of the listings inventory
                         in Category Sponsorship areas.

               Microsoft has the sole right to determine the number of listings
               in the Merchandising Locations. FairMarket's portion of listings
               that FairMarket has the right to display will be calculated based
               on the percentage allocation above, but in no event will be less
               than two listings per Merchandising Location. The order in which
               the items found in Merchandising Locations are displayed will be
               rotated sequentially, so that all featured Merchant Listings or
               Featured Merchants will appear at the top of the list an equal
               number of times. In the case of Featured Merchants and Category
               Sponsorship areas, FairMarket agrees to not display merchants
               that are competitive to Microsoft (e.g, Travelocity, Auto-by-Tel,
               etc.). Microsoft will provide FairMarket with a list of companies
               that will not be displayed in the Merchandising Locations. The
               list of companies will be updated periodically by Microsoft. Only
               Microsoft and FairMarket, and no other FairMarket Affiliate, will
               obtain inventory or have its listings appear in the Private Label
               Auction Site Merchandising Locations.

               (C) BILLING AND COLLECTING. For Microsoft-generated Merchandising
               Listings, FairMarket will be responsible for billing and
               collection of Merchandising Fees, using the same procedures as
               for Listing Fees and Transaction Fees as set forth in Section
               5.1(b). For purposes of this Agreement, fees charged by Microsoft
               for Microsoft-generated Merchandising Listings will be considered
               Listing Fees for purposes of revenue calculations and billing and
               collections. For the purposes of this Agreement,
               Microsoft-generated Category Sponsorships will be treated as
               "Advertising Fees" and shall be treated in accordance with the
               terms of Section 5.2.

         2.8   ADMINISTRATIVE MODULE. FairMarket will provide Microsoft with an
         Administrative Module for each of the Private Label Auction Sites
         through which Microsoft can control the Auction Services parameters,
         including user interface, auction categories, listings and email text,
         as well as have access to real-time auction reporting. The
         Administrative Module will provide Microsoft with the ability in the
         Administrative Module to remove listings from the Private Label Auction
         Sites that are objectionable to Microsoft, e.g., Microsoft competitive
         listings. Microsoft will utilize FairMarket's Administrative Module to
         program all HTML code to manage the Private Label Auction Sites.
         FairMarket will provide best efforts to train and assist Microsoft
         regarding the use of FairMarket's Administrative Module functionality.

                                       5
<PAGE>   6

         2.9 CLASSIFIEDS LISTINGS. FairMarket shall provide Microsoft with all
         necessary tools and assistance to allow Microsoft to input existing
         Microsoft classified ad listings into the Private Label Auctions Sites
         at no cost to Microsoft. Subject to the provisions of Section 4.1, such
         listings will be distributed across the FairMarket Network.

         2.10 IMPLEMENTATION TIMETABLE. Within thirty (30) calendar days
         immediately following the Effective Date, FairMarket will provide
         Microsoft with the tools, training and hosting services that enable
         Microsoft to launch up to ten (10) Private Label Auction Sites.
         Additional Private Label Auction Sites will be developed per a schedule
         mutually agreed upon by Microsoft and FairMarket, but in no event will
         an implementation take longer than thirty (30) days from the date of
         written notification by Microsoft to FairMarket of Microsoft's desire
         to launch a site.

         2.11 PERFORMANCE STANDARDS. FairMarket agrees to meet or exceed MSN
         performance standards, attached as Exhibit C, including system
         availability/down time and average response time. FairMarket agrees to
         provide Microsoft with direct access to network operations support
         personnel on a 24x7 basis.

         2.12 DEDICATED RESOURCES. FairMarket's support of Microsoft shall
         include a minimum assignment of four full-time FairMarket personnel to
         work solely on the design, development, integration and support of
         Auction Services into Microsoft Sites. FairMarket will designate one or
         more dedicated project manager(s), account manager(s), engineer(s), as
         well as identify specific operations and customer personnel to support
         Microsoft.

         2.13 INTEGRATION. FairMarket will make best efforts to enable its
         Auction Services to be tightly integrated into the Microsoft Sites, and
         once developed, Microsoft will use commercially reasonable efforts to
         utilize and promote online such functionality. Such integration will
         include, but not be limited to:

                    (A) INTEGRATION OF REGISTERED MICROSOFT PASSPORT USERS.
                    Microsoft can enable existing registered users to
                    participate in the Private Label Auction Sites without
                    having to reenter their username, password or other relevant
                    information.

                    (B) INTEGRATION INTO CONTEXTUAL LOCATIONS AND SEARCH
                    RESULTS. FairMarket will provide data files of product
                    listing data for integration into Microsoft's search and
                    directory results and other contextual locations throughout
                    the Microsoft Sites.

                    (C) INTEGRATION INTO MICROSOFT'S PERSONALIZATION FEATURES.
                    FairMarket will use best efforts to provide its data in a
                    format for integration into Microsoft's personalization
                    initiatives across the Microsoft Sites.

                    (D) INTEGRATION INTO MICROSOFT MERCHANT TOOLS. FairMarket
                    will use best efforts to work with Microsoft to develop
                    auction and classified advertising related merchant tools
                    that seamlessly integrate with Microsoft merchant tools and
                    support Microsoft advertising sales packages, as well as
                    Microsoft billing, operations and Private Label Auction Site
                    functionality. FairMarket agrees to make functionality
                    available to Microsoft that will enable Microsoft to create
                    and offer to Sellers merchant packages including discounted
                    listing fees and bundled merchandising.

                    (E) INTEGRATION INTO MICROSOFT COMMUNITY BUILDING TOOLS/WEB
                    COMMUNITIES. FairMarket will use best efforts to incorporate
                    Microsoft Community Building Tools (i.e., chat, BBS,
                    calendaring, etc.) on the Private Label Auction Sites.

                    (F) INTEGRATION INTO MICROSOFT INSTANT MESSENGER. FairMarket
                    will use best efforts to incorporate Microsoft Instant
                    Messenger functionality on the Private Label Auction Sites.

                    (G) INTEGRATION INTO MICROSOFT BIZTALK PRODUCT/SERVICES
                    CLASSIFICATION TAXONOMY. FairMarket will use best efforts to
                    adopt Microsoft schema for structure products. For example,
                    if

                                       6
<PAGE>   7

                    for "printers" FairMarket has a number of attributes for
                    searching auctions, and for "printers" Microsoft has a
                    number of attributes for a buyer guide, these attributes
                    should be substantially the same.

                    (H) INTEGRATION INTO MICROSOFT COMMERCE SERVER AND OTHER
                    MICROSOFT COMMERCE SOFTWARE PRODUCTS. FairMarket will use
                    best efforts to work with Microsoft to develop links from
                    the Microsoft Commerce Server to the Private Label Auction
                    Sites for merchants utilizing Microsoft Commerce Server.

                    (I) INTEGRATION INTO THE MSN SEARCH ENGINE. FairMarket will
                    use best efforts to work with Microsoft to program in fifty
                    (50) or one hundred (100) search term result sets. Longer
                    term, more advanced integration may include FairMarket
                    working with Microsoft to automatically query the auction
                    database for search strings and pull back relevant results.

                    (J) INTEGRATION INTO MICROSOFT'S INTERNET EXPLORER.
                    FairMarket will use best efforts to work with Microsoft to
                    find ways to integrate auctions notifications (i.e.,
                    products meeting a user's profile becoming available for
                    sale, latest bid, etc.), auctions functionality and/or
                    auctions content with Microsoft Internet Explorer.

                    (K) INTEGRATION INTO MICROSOFT'S BUSINESS-TO-BUSINESS
                    PORTAL. FairMarket will use best efforts to work with
                    Microsoft to integrate auction service functionality into
                    the Microsoft Business to Business Portal.

                    (L) INTEGRATION INTO MICROSOFT'S MSN MOBILE SERVICE.
                    FairMarket will use best efforts to work with Microsoft to
                    integrate auction service functionality into MSN Mobile
                    service -- e.g., the FairMarket server would send the
                    Microsoft server an HTTP post when a user is out-bid or has
                    won an auction. The post would include the user ID, the
                    auction item name and the new bid price or final price.

         Microsoft will prioritize these integration efforts. No later than ten
         days immediately following the Effective Date, Microsoft and FairMarket
         will mutually agree on a product development schedule to address the
         timing for the efforts identified in this Section 2.13.

         2.14 SITE SCREENING. FairMarket shall be primarily responsible for
         screening and promptly removing problematic listings on the Private
         Label Auction Sites as provided in this Agreement, including without
         limitation, Section 2.6 above.

         2.15 CUSTOMER SERVICE; TECHNICAL SUPPORT. At no charge to Microsoft,
         FairMarket shall be solely responsible for performing email-based
         customer support to End Users of all Private Label Auction Sites on a
         24-hour per day, 7-day per week basis, with a maximum 24-hour response
         time. All customer service will be "Microsoft branded" and will conform
         to the requirements and performance standards attached hereto as
         Exhibit C or as otherwise mutually agreed between the parties.
         FairMarket shall provide all technical support for the Private Label
         Auction Sites and customer and technical support for users of the
         Private Label Auction Sites, according to the technical support and
         maintenance requirements attached hereto as Exhibit B or as otherwise
         mutually agreed in writing between the parties.

         2.16     REPORTING.

                  (a) FairMarket will furnish Microsoft with monthly usage
                  statements showing for each month the number of auction and
                  classified listings by category, the number of auctions
                  closed, traffic to Private Label Auction Sites, the number of
                  page views, dollars per auction/category, and other key usage
                  information as reasonably requested by Microsoft in connection
                  with this Agreement.

                                       7
<PAGE>   8

                    (b) FairMarket will also provide Microsoft with the number,
                    frequency, nature of and FairMarket response to any End User
                    support calls and any other support-related information and
                    documentation as is reasonably requested by Microsoft in
                    connection with this Agreement.

                    (c) FairMarket shall provide Microsoft with access to "real
                    time" online reporting functionality that will allow
                    Microsoft to ascertain user activity occurring at the
                    Private Label Auction Sites including user traffic, listing
                    related activity and transaction-related activity.

                    (d) FairMarket will track and report to Microsoft on
                    revenues in an identified format for each Private Label
                    Auction Site separately, as well as provide an aggregate
                    Microsoft revenue report for the same.

                    (e) Within 180 days immediately following the Effective
                    Date, FairMarket will track and report to Microsoft
                    aggregate cross network usage of the Microsoft provided
                    classified ads.

         2.17 LIMITED PROMOTION OF FAIRMARKET BRANDED AUCTION SITE. Unless
         otherwise mutually agreed, FairMarket shall not promote its own branded
         auction site to the public. FairMarket agrees to promote instead the
         FairMarket Network of sites.

         2.18 FAIRMARKET PROMOTION. Subject to the provisions of Section 3.9
         below, FairMarket shall promote Microsoft's participation as a
         participant in the FairMarket Network in ongoing press materials and in
         marketing materials related to such program; provided that all uses of
         Microsoft Marks in marketing and promotional materials shall require
         the prior review and approval of Microsoft as provided in Section 9.2
         below.

         2.19 PARTICIPATION IN MSN PROMOTIONS. At the request of Microsoft,
         FairMarket shall use commercially reasonable efforts to participate in
         MSN network promotions (in general, one per month) and to create
         banner/tile ads that it will provide to Microsoft to be placed
         throughout the Microsoft Sites to create awareness of the Auction
         Services. For purposes of this Section 2.19, "participating" means
         working with Microsoft to determine campaign themes and responding to
         Microsoft requests on a timely basis.

         2.20 MICROSOFT TECHNOLOGY ADOPTION. As a Microsoft strategic partner,
         FairMarket agrees, at its sole discretion, to use commercially
         reasonable efforts to adopt key Microsoft platform architectures and
         technology (in addition to the Microsoft technologies outlined in
         Section 2.13 above) which are being adopted by other Microsoft
         strategic partners, so long as the benefits to FairMarket are
         substantial or the costs to FairMarket not disproportionate to those it
         would incur in connection with similar technology adoption. Microsoft
         agrees to provide commercially reasonable technical assistance as
         mutually agreed to FairMarket to assist in adoption and implementation
         of such services.

         2.21 SOFTWARE PIRACY SUPPORT MEASURES. FairMarket agrees to work with
         Microsoft to develop comprehensive programs to reduce the sale of
         pirated Microsoft software and other illegal, pirated, counterfeit or
         unauthorized sales of other merchandise on the Private Label Auction
         Sites, and will develop no less comprehensive a program on all of its
         other FairMarket Network sites. Such programs may include requiring
         users to post verifiable information and/or a Microsoft review cycle.

         2.22 ADDITIONAL SERVICES. FairMarket agrees to develop the following
         features, functions or services per the timeline below.

                  (A) INSURANCE/FRAUD PROTECTION SERVICE that insures Buyers and
                  Sellers against Auction Services-related acts of fraud (within
                  60 days of the Effective Date).

                  (B) ESCROW AND CREDIT CARD PROCESSING SERVICE that allows
                  auction sellers to accept credit card payments when selling
                  products or services (within 90 days of the Effective Date).

                                       8
<PAGE>   9

                  (C) BASIC INTERNATIONAL FUNCTIONALITY that provides
                  international time zone support, international currency
                  support and country specific date/time formats (within 120
                  days of the Effective Date).

                  (D) ENHANCED INTERNATIONAL FUNCTIONALITY that provides
                  non-English language support (within 270 days of the Effective
                  Date).

                  (E) EFFECTIVE NOTICE AND TAKEDOWN PROCEDURES across entire
                  network (within 15 days of the Effective Date).

3.       MICROSOFT RIGHTS AND OBLIGATIONS

         3.1 DEVELOPMENT COOPERATION. Microsoft shall provide to FairMarket
         timely and reasonable assistance and cooperation in connection with the
         development and testing of the Private Label Auction Sites.

         3.2 URLS. Microsoft shall, at its sole cost and expense, obtain and
         maintain all rights to the URL(s), or any successor URL(s), at which
         the Private Label Auction Sites are to be located.

         3.3 PROMOTION OF FAIRMARKET'S SERVICE TO MICROSOFT SITES. Microsoft
         shall exercise commercially reasonable efforts to make each Microsoft
         Site aware of FairMarket's Auction Services, promote FairMarket as an
         "incumbent" for purposes of Auction Services, and encourage each
         Microsoft Site to utilize Auction Services from FairMarket. FairMarket
         acknowledges that Microsoft makes no representation that any particular
         number of Microsoft Sites will participate under this Agreement.

         3.4 MICROSOFT AUCTION SERVICE INTEGRATION AND PROMOTION. Microsoft will
         integrate links to the Auction Services area throughout the Microsoft
         Sites. Such integration may include, but not be limited to, links from
         home pages, links from shopping pages, inclusion in emails, links from
         search results pages, links from category pages, and links from other
         contextually relevant pages within the Microsoft Sites to relevant
         areas within the Private Label Auction Sites. Microsoft shall have sole
         control over the promotion of the Private Label Auction Sites, and the
         display and placement of links to the Private Label Auction Sites on
         any and all Microsoft Sites.

         3.5 MICROSOFT EDITORIAL STAFF. Microsoft will use commercially
         reasonable efforts to author editorial and promotional content aimed at
         increasing traffic to the Private Label Auction Sites.

         3.6 MICROSOFT TECHNOLOGY. Microsoft shall make available, as Microsoft
         deems appropriate, Microsoft technology and technical assistance to
         FairMarket at rates proportionate to those made available to other
         similarly situated Microsoft strategic partners.

         3.7 MICROSOFT OFFICE SPACE. Microsoft agrees to make available office
         space for FairMarket dedicated personnel. Such space shall include up
         to three offices on the Microsoft campus, subject to FairMarket's
         compliance with Microsoft's standard terms and conditions for on-site
         vendors.

         3.8 MICROSOFT PROMOTION. Microsoft shall promote Microsoft's
         participation as a member of the FairMarket Network in ongoing press
         materials and in marketing collateral related to such program. In the
         event that FairMarket wishes to promote Microsoft's participation, it
         shall obtain the prior written approval of Microsoft prior to releasing
         any press materials or marketing collateral related to such program.

         3.9      USER TRAFFIC GUARANTEE.

                  (A) MINIMUM ANNUAL VISITS. Microsoft agrees to drive the
                  minimum number of user visits to the Private Label Auction
                  Sites as specified below ("Minimum Annual Visits"). For
                  purposes

                                       9
<PAGE>   10

               of this Section 3.9, a "Visit" to the Auction Content Area is
               defined as a session in a Private Label Auction Site. Visits
               include those instances where the user clicks on a
               Microsoft-placed link, on a Microsoft Site or other site where
               Microsoft has a relationship, and enters the Auction Area hosted
               by FairMarket, and also includes those visits from users who have
               registered for Microsoft auctions who enter the Private Label
               Auction Sites directly by typing in a URL or any other means
               utilized by Microsoft to access the Private Label Auction Sites.
               Microsoft will not deliberately and artificially route traffic to
               the Private Label Auction Sites in an effort to artificially
               increase Visits.

<TABLE>
<CAPTION>
                                    YEAR             MINIMUM ANNUAL VISITS
                                    ----             ---------------------
<S>                                                  <C>
                                    Year 1               72 Million Visits
                                    Year 2              160 Million Visits
                                    Year 3              184 Million Visits
                                    Year 4              203 Million Visits
                                    Year 5              212 Million Visits
</TABLE>

               (B)  PAYMENT CALCULATION.

                    (i) During each year of the Term (a "Year" being defined as
                    the one year period beginning on the Commercial Release Date
                    or anniversary of the Commercial Release Date and running
                    for one year therefrom), if the actual number of Visits for
                    that Year is equal to or greater than the Minimum Annual
                    Visits for such Year, then FairMarket shall pay Microsoft
                    the shortfall, if any, between the Guaranteed Minimum
                    Revenue and Microsoft's share (as specified in Section 5
                    below) of actual revenue attributable to the Private Labeled
                    Auction Sites ("Actual Microsoft Revenue") during such Year.

                    (ii) If the actual number of Visits for a given Year is
                    between 80% and 99.9% of the Minimum Annual Visits for such
                    Year, then FairMarket shall pay Microsoft the greater of its
                    share of Actual Microsoft Revenue during such Year or the
                    pro-rata portion of the Guaranteed Minimum Revenue for such
                    Year. By way of example, if Microsoft delivered 85% of its
                    traffic commitment, FairMarket would be responsible for
                    paying Microsoft 85% of the Guaranteed Minimum Revenue for
                    the applicable Year, if greater than the Actual Microsoft
                    Revenue for that Year.

                    (iii) If the actual number of Visits for a given Year is
                    less than 80% of the Minimum Annual Visits for such Year,
                    then FairMarket shall pay Microsoft its share of Actual
                    Microsoft Revenue during such Year.

               (C) GUARANTEES NOT CUMULATIVE. For purposes of this Section 3.9,
               Minimum Annual Visit guarantees are viewed on a contract Year
               basis and not on a cumulative basis. By way of example, if
               Microsoft did not reach 80% of the Minimum Annual Visit total in
               Year 2 but then exceeded the Minimum Annual Visit total in Year
               3, FairMarket would pay the Guaranteed Minimum Revenue in Year 3
               and would only pay the Actual Microsoft Revenue in Year 2.

         3.10 PRE-EMINENT AUCTION SERVICES PARTNER. Microsoft agrees that
         FairMarket will be the pre-eminent provider of Auction Services for the
         Microsoft Sites. Such Auction Services may include business to
         business, business to consumer, and consumer to consumer services.
         Microsoft Sites that elect to utilize FairMarket's Auction Services
         shall not enter into a relationship with any company to provide
         comparable auction services, private labeled or otherwise, to that of
         FairMarket and will not host content or promote links or advertising to
         any such company, subject to the following exceptions:

               (A) SPECIALIZED AUCTION-RELATED FUNCTIONALITY. Microsoft retains
               the right to work with companies that provide specialized
               auction-related functionality that is not comparable to

                                       10
<PAGE>   11

               functionality provided by FairMarket, including but are not
               limited to, high-end B2B auctions functionality (FreeLoader),
               Group Buying (Mercata), Online Haggling (Nextag.com),
               Non-bidding, Buyer priced purchased (PriceLine), Credit Card
               Transaction Processing Services (BillPoint), Escrow Services
               (iEscrow), Sothebys (authenticated product auctions).

               (B) NON-AUCTION-RELATED ADVERTISING. Microsoft retains the right
               to accept non-auction related advertising from companies that
               offer a portfolio of services including auctions, e.g.,
               Amazon.com. FairMarket acknowledges and agrees that Microsoft may
               sell advertising that may rotate throughout the Microsoft Sites
               (including auctions areas), and the restrictions set forth in
               this Section 3.10 shall not apply to such "Microsoft-wide run of
               site" sales. FairMarket acknowledges and agrees that certain
               Microsoft Sites may have existing auction-related agreements in
               place and that these pre-existing agreements cannot be supplanted
               and shall remain in place until the existing contract expires or
               is terminated.

               (C) QUARTERLY MEETINGS. Microsoft and FairMarket personnel will
               meet on a quarterly or more frequent basis, as mutually agreed,
               to discuss auction-related product development plans for the
               Private Label Auction Sites. In cases where Microsoft wishes to
               provide specialized auction-related functionality that is not
               comparable to that offered by FairMarket, Microsoft will discuss
               its functionality needs with FairMarket to determine if
               comparable functionality will be available from FairMarket within
               the time frame required by Microsoft. If FairMarket subsequently
               develops comparable functionality, Microsoft will evaluate the
               relevant FairMarket product offering and determine which
               provider's functionality best meets Microsoft's needs. In such
               situations Microsoft agrees to consider the fact that FairMarket
               is Microsoft's pre-eminent Auctions Service partner and agrees
               that FairMarket's status will be considered when determining
               which provider's functionality best meets Microsoft needs.

4.       LISTING RIGHTS AND USER INFORMATION

         4.1 LISTINGS. Microsoft has ownership rights to listings placed on the
         Microsoft Sites. Microsoft shall grant FairMarket the necessary rights
         to aggregate and distribute such listings across the FairMarket Network
         in the Territory. Microsoft and FairMarket agree that from time to time
         there may be certain circumstances where Microsoft requires the right
         to retain listings exclusively on MSN. The parties anticipate that over
         80% of Microsoft listings will be available to FairMarket for
         distribution across the FairMarket Network. FairMarket will provide
         Microsoft with the administration tools required to manage listing
         distribution from the Private Label Auction Sites to the FairMarket
         Network.

         4.2 END USER DATA. Microsoft has the exclusive right to collect, store
         and use all personal registration data provided by End Users ("End User
         Data") who register on Microsoft Sites and Private Label Auction Sites.
         FairMarket acknowledges that all End User individual and aggregate
         information acquired through the Private Label Auction Sites shall be
         solely owned by Microsoft. End User Data shall include (when available
         from the Private Label Auction Sites), without limitation: an End
         User's name, email address, and any other information collected which
         personally identifies the End User and aggregated End User information
         such as category related viewership, listings and purchase patterns and
         any other demographic information associated with the Private Label
         Auction Sites. Microsoft agrees that FairMarket shall be able to
         utilize aggregate information for purposes of improving the Private
         Label Auctions Sites, and FairMarket may utilize at its sole discretion
         aggregate data from the Private Label Auction Sites when aggregated
         with data from FairMarket's other customers. FairMarket agrees to
         conform to all applicable Microsoft data privacy standards covering End
         User Data as such may be provided by Microsoft to FairMarket from time
         to time. FairMarket agrees not to share Microsoft-only aggregate data
         with third parties without first obtaining written authorization from
         Microsoft.

         4.3 CONSENT. In addition to the foregoing, any collection, disclosure
         or use of End User Data by FairMarket shall be subject to the End
         Users' consent, and the business practices and End User privacy
         policies of the Microsoft Site from which it is collected. The business
         practices and policies of each such

                                       11
<PAGE>   12

          Microsoft Site presently permits, as their default, FairMarket to
          grant Microsoft the rights required by this Section 4.3, unless the
          End User specifically requests otherwise, and in all cases each party
          shall comply with any applicable laws governing the collection,
          dissemination and use thereof. "Consent" as used in this Agreement
          shall mean the approval of an adult, and in the case of minor
          children, the approval of the child's parent or legal guardian.
          FairMarket and Microsoft shall mutually agree on the Private Label
          Auction Site user interface for the collection of End User Data.
          Microsoft shall have sole discretion to determine the privacy policy
          for the Microsoft Sites and Private Label Auction Sites.

5.       FEES; BILLING; PAYMENTS

          5.1  LISTING AND TRANSACTION FEES.

               (A) AUCTION SERVICES PARTICIPATION FEES. Microsoft shall have
               sole discretion to determine the amount, if any, of Transaction
               Fees, Listing Fees, and Microsoft Advertising Fees to be charged.
               Microsoft will take into consideration input from FairMarket,
               current industry pricing, the competitive environment and
               FairMarket's guaranteed minimum revenue obligations when setting
               pricing. Notwithstanding the foregoing, in no event shall the
               Transaction Fees charged by Microsoft be less than *** percent
               (***%) of the gross revenues of all transactions facilitated on
               the Private Label Auction Sites.

               (B) REVENUE SHARES. FairMarket will pay Microsoft, on a quarterly
               basis, ***% of Gross Revenue generated during the Term by End
               Users of the Private Label Auction Sites ("Achieved Revenue").
               For purposes of this Agreement, "Gross Revenue" shall mean all
               FairMarket collected Auction Service and Classified Advertising
               Service related revenue, less returns or similar credits and
               credit card and other processing costs (which returns and costs
               are not to exceed 2.5% of Gross Revenue). Gross Revenue shall be
               determined as follows: ***% of the Listing Fees charged to
               Sellers for listings placed at the Private Label Auction Sites,
               plus ***% of the Transaction Fees charged to Sellers for listings
               placed at the Private Label Auction Sites, plus ***% of the
               Transaction Fees (utilizing the Private Label Auction Sites'
               Transaction Fee Schedule) for winning bids that occur on the
               Private Label Auction Sites (including those winning bids placed
               on listings that originated at the Private Label Auction Sites
               and those originated elsewhere on the FairMarket Network).

               (C) LISTING AND TRANSACTION FEE-RELATED BILLING AND COLLECTIONS.
               Subject to Section 5.1(b), at no charge to Microsoft, FairMarket
               will be solely responsible for the billing and collection of
               Transaction Fees and Listing Fees. FairMarket will use its best
               efforts to collect all Transaction Fees and Listing Fees,
               provided that FairMarket shall have no obligation to bill any
               Seller or Buyer for Transaction Fees or Listing Fees until the
               aggregate amount of unpaid fees accrued by any such Seller or
               Buyer equals or exceeds ten dollars (US$10.00).

               (D) MONTHLY STATEMENTS. To the extent FairMarket is responsible
               for any billing and collections under this Agreement, FairMarket
               will furnish Microsoft with quarterly statements showing for each
               month in each calendar quarter during the Term the Listing Fees,
               Transaction Fees, Advertising Fees and/or Other Revenue (as
               defined in Section 5.4) a share of which Microsoft is entitled,
               and accompanied by payment to Microsoft of the amount (if any)
               due and owing Microsoft in accordance with such statement and
               this Agreement. Statements and payments will be sent within forty
               five (45) days after the end of each respective calendar quarter,
               provided that statements will be sent regardless of whether any
               amounts are payable. All such statements shall be treated by
               Microsoft as Confidential Information under the NDA.

         5.2 ADVERTISING FEES. Microsoft shall have the exclusive right to sell,
         serve and collect advertising revenue on the Private Label Auction
         Sites. Microsoft will receive ***% of the auction-related advertising
         revenue. Microsoft shall have sole discretion to set its own
         advertising rate card.

*** This information is confidential and has been omitted and filed separately
with the Securities and Exchange Commission, pursuant to a request for
confidential treatment.

                                       12
<PAGE>   13
         5.3 HOSTING FEES. Microsoft agrees to pay FairMarket the total sum of
         *** (US$***) per month in return for hosting services provided by
         FairMarket associated with all Private Label Auction Sites hosted by
         FairMarket under this Agreement. Such payment shall be due, starting on
         the Effective Date and shall be paid by Microsoft pursuant to Section
         5.7 below for so long as FairMarket continues to provide hosting
         services under this Agreement.

         5.4 OTHER REVENUE. All other auction-related service fees collected by
         either party related to participation in the Private Label Auction
         Sites and directly attributable to FairMarket services and
         functionality, including but not limited to End User or merchant
         subscription fees, End User or merchant service fees,
         transaction-enabled classifieds and credit card processing service fees
         (collectively, without limitation, "Other Revenue") will be split ***%
         to Microsoft and ***% to FairMarket unless an alternative revenue share
         is mutually agreed upon in writing. As an example of non-directly
         attributable revenue, if Microsoft decides to work with a third-party
         escrow service other than FairMarket, and FairMarket is not required to
         perform any steps associated with integrating said service other than
         providing reasonable cooperation as necessary and requested by
         Microsoft, Microsoft would not be required to share revenues generated
         by such escrow service with FairMarket.

         5.5 MINIMUM GUARANTEED REVENUE. FairMarket guarantees minimum revenue
         (the "Minimum Guaranteed Revenue) to Microsoft, which Minimum
         Guaranteed Revenue (which shall be calculated by including Microsoft's
         share of the Listing Fees, Transaction Fees, and Advertising Fees as
         set out in Section 5.1(b) and 5.2) is projected to be a minimum of
         Sixty Million Dollars (US$60,000,000) during the Term, as follows:

                           YEAR             MINIMUM GUARANTEED REVENUE
                           ----             --------------------------
                           Year 1                    $ 5 Million
                           Year 2                    $10 Million
                           Year 3                    $10 Million
                           Year 4                    $15 Million
                           Year 5                    $20 Million
                           Total:                    $60 Million

         5.6 SHORTFALL PAYMENT. In the event that the Actual Microsoft Revenue
         accrued to Microsoft in a given Year (as such term is defined in
         Section 3.9) is less than the Minimum Guaranteed Revenue above,
         FairMarket agrees to remit to Microsoft the difference no later than 45
         days following the end of each Year. Minimum guarantees are viewed on
         an annual basis and not on a cumulative basis; for example, any
         shortfall that FairMarket paid to Microsoft for a given Year would not
         be paid back by Microsoft in future Years, even if FairMarket exceeded
         the Minimum Guaranteed Revenue in future Years. The Minimum Guaranteed
         Revenue shall apply only in the event that Microsoft meets or exceeds
         the Minimum Annual Visit guarantees as described in Section 3.9, but in
         any event, FairMarket shall pay no less than the allocable portion of
         Actual Microsoft Revenue for any given Year.

         5.7  PAYMENT TERMS.

               (a) All payments due from FairMarket to Microsoft under this
               Agreement shall be made by wire transfer to such account as
               Microsoft may notify FairMarket from time to time (the "Microsoft
               Account").

*** This information is confidential and has been omitted and filed separately
with the Securities and Exchange Commission, pursuant to a request for
confidential treatment.

                                       13
<PAGE>   14

               FairMarket shall pay Microsoft any such fees due within
               forty-five (45) days following the (i) last day of each calendar
               quarter during the Term, (ii) the last day of each Year during
               the Term, or (iii) the date on which any such payment becomes
               due, as applicable.

               (b) All payments due from Microsoft to FairMarket under this
               Agreement shall be made by wire transfer to such account or to
               such account as FairMarket may notify Microsoft from time to time
               (the "FairMarket Account").

               Microsoft shall pay FairMarket such fees due, if any, within
               forty-five (45) days following the (i) last day of each calendar
               quarter during the Term, (ii) the last day of each Year during
               the Term, or (iii) the date on which any such payment becomes
               due, as applicable.

          5.8  AUDITS

               (A) BY FAIRMARKET. During the Term of this Agreement, Microsoft
               agrees to keep all usual and proper records and books of account
               and all usual and proper entries and other documentation relating
               to all payments to be made by Microsoft to FairMarket hereunder.
               During the Term and for a period of six (6) months following the
               expiration or termination of this Agreement, FairMarket shall
               have the right to cause an audit and/or inspection to be made of
               such records of Microsoft in order to verify statements issued by
               Microsoft and Microsoft's compliance with the terms of this
               Agreement. Any such audit shall be conducted by an independent
               certified public accountant selected by FairMarket (other than on
               a contingent fee basis) and reasonably acceptable to Microsoft.
               Any audit and/or inspection shall be conducted during regular
               business hours at Microsoft's facilities upon at least thirty
               (30) days prior written notice. Such audits shall be made no more
               often than once every twelve (12) months.

               (B) BY MICROSOFT. During the Term of this Agreement, FairMarket
               agrees to keep all usual and proper records and books of account
               and all usual and proper entries and other documentation relating
               to the Gross Revenues, Actual Microsoft Revenues, Minimum
               Guaranteed Revenue, Visits, all other payments to be made by
               FairMarket hereunder, and all user and other reports submitted or
               to be submitted by FairMarket hereunder. During the Term and for
               a period of six (6) months following the expiration or
               termination of this Agreement, Microsoft shall have the right to
               cause an audit and/or inspection to be made of such records of
               FairMarket in order to verify statements issued by FairMarket and
               FairMarket's compliance with the terms of this Agreement. Any
               such audit shall be conducted by an independent certified public
               accountant selected by Microsoft (other than on a contingent fee
               basis) and reasonably acceptable to FairMarket. Any audit and/or
               inspection shall be conducted during regular business hours at
               FairMarket's facilities upon at least thirty (30) days prior
               written notice. Such audits shall be made no more often than once
               every twelve (12) months.

         5.9 COSTS. Except as expressly provided herein, all costs incurred by
         any party in fulfilling any of its obligations under this Agreement
         shall be borne by that party, without reimbursement from the other
         party.

6.       REPRESENTATIONS AND WARRANTIES; LIMITATIONS

         6.1 BOTH PARTIES. Each party hereby represents and warrants as follows:

                                       14
<PAGE>   15

               (a) Such party is duly organized and validly existing under the
               laws of the state of its incorporation and has full corporate
               power and authority to enter into this Agreement and to carry out
               the provisions hereof.

               (b) Such party is duly authorized to execute and deliver this
               Agreement and to perform its obligations hereunder.

               (c) This Agreement is a legal and valid obligation binding upon
               it and enforceable against it in accordance with its terms.

         6.2 MICROSOFT. Microsoft further represents and warrants that all
         materials provided by Microsoft for use on and in connection with the
         Private Label Auction Sites do not and will not infringe the
         intellectual property right of any third party, or otherwise violate
         any third party's personal or proprietary rights.

          6.3 FAIRMARKET. FairMarket further represents and warrants that:

               (a) FairMarket shall use commercially reasonable efforts to
               ensure that the Private Label Auction Sites and all listings,
               content and/or material contained therein provided by FairMarket
               are and at all times will be of a high quality and nature, and
               that the Private Label Auction Sites and all content and/or
               material contained therein provided by FairMarket will be
               accurate and reliable.

               (b) FairMarket will keep the Private Label Auction Sites
               operational in accordance with the Private Label Auction Sites
               Performance Standards set forth in Exhibit C.

               (c) FairMarket shall use commercially reasonable efforts to
               ensure that the Private Label Auction Sites and all listings,
               content and/or material contained therein provided by FairMarket
               are and will be non-defamatory. The Private Label Auction Sites
               and all information and content contained therein provided by
               FairMarket do not and will not infringe the intellectual property
               rights of any third party, or otherwise violate any third party's
               proprietary rights.

               (d) FairMarket owns or controls all rights to the Private Label
               Auction Sites and use of the Private Label Auction Sites by
               Microsoft shall not infringe the intellectual property right of
               any person.

               (e) FairMarket will not use the Microsoft Marks except as
               provided in this Agreement.

               (f) No other person has or will have any right, title or interest
               in or to all or any portion of the Private Label Auction Sites
               and all information and content contained therein which would in
               any way curtail, impair, diminish or derogate from any of the
               rights granted to Microsoft herein, and FairMarket has not
               heretofore done or permitted to be done and will not hereafter do
               or authorize or permit to be done any act or thing which is
               inconsistent with or curtails, impairs, diminishes, or derogates
               from any right herein granted to Microsoft.

               (g) The Private Label Auction Sites and all listings, content
               and/or material contained therein provided by FairMarket are not
               and shall not be during the Term in violation of any statutes or
               regulations including without limitation any statutes or
               regulations relating to auction services.

               (h) All customer technical and/or support services to be provided
               hereunder shall be provided in a professional manner and in
               accordance with all applicable industry standards for such
               services.

               (i) The Private Label Auction Sites will accurately manipulate,
               process, compare, display and calculate date or time data from,
               into and between the twentieth and twenty-first centuries,

                                       15
<PAGE>   16

               including leap years, and shall not be interrupted or adversely
               affected by the manipulation, processing, comparison, display or
               calculation of dates from, into and between the twentieth and
               twenty-first centuries, including leap years.

         6.4 INSURANCE COVERAGE. Effective no later than the Effective Date and
         throughout the Term, FairMarket shall procure and maintain the
         following insurance coverage. Such insurance shall be in a form and
         with insurers reasonably acceptable to Microsoft, and shall comply with
         the following minimum requirements:

               (A) COMMERCIAL GENERAL LIABILITY Insurance of the Occurrence Form
               with policy limits of not less than Five Million Dollars
               (US$5,000,000) combined single limit each occurrence for Bodily
               Injury and Property Damage combined, and Five Million Dollars
               (US$5,000,000) Personal and Advertising Injury Limit; and

               (B) ERRORS & OMISSIONS LIABILITY / PROFESSIONAL LIABILITY
               Insurance with policy limits of not less than Five Million
               Dollars (US$5,000,000) each claim with a deductible of not more
               than Twenty-Five Thousand Dollars (US$25,000.00). Such insurance
               shall include coverage for infringement of proprietary rights of
               any third party, including without limitation copyright and
               trademark infringement as related to FairMarket's performance
               under this Agreement. Throughout the term of the Agreement, the
               Errors & Omissions Liability / Professional Liability Insurance
               retroactive coverage date will be no later than the Effective
               Date of this Agreement. Upon expiration or termination of this
               Agreement, FairMarket will maintain an extended reporting period
               providing that the claims first made and reported to the
               insurance company within one year after the end of this Agreement
               will be deemed to have been made during the policy period.

               (C) EVIDENCE; CANCELLATION. Promptly upon execution of this
               Agreement, FairMarket shall provide to Microsoft proof evidencing
               full compliance with the insurance requirements set forth in this
               Section 6.4. FairMarket shall notify Microsoft in writing at
               least thirty (30) days in advance if FairMarket's insurance
               coverage is to be canceled or materially altered so as to not
               comply with the requirements of this Section.

         6.5 FairMarket shall be solely responsible for the relationships with
         third parties who purchase listings, advertising or other services from
         FairMarket, and all other third parties who purchase advertising or
         listing-related promotions from FairMarket, including, without
         limitation, listing production, ad and promotion production, placement,
         management, billing, collections and accounting.

         6.6 LIMITATION. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 6, ALL
         PRODUCTS OR SERVICES DELIVERED UNDER THE TERMS OF THIS AGREEMENT SHALL
         BE SUBJECT TO THE TERMS OF THE LIMITED WARRANTY STATEMENT, IF ANY,
         SPECIFIED BY THE DELIVERING PARTY FOR THE SPECIFIC PRODUCT OR SERVICE.
         CERTAIN SOFTWARE PRODUCTS MAY BE PROVIDED TO THE OTHER PARTY "AS IS"
         WITHOUT WARRANTY OR CONDITION OF ANY KIND, IF SO DESIGNATED BY THE
         LICENSOR. FOR SUCH PRODUCTS, THE ENTIRE RISK AS TO THE RESULTS AND
         PERFORMANCE OF SUCH SOFTWARE IS ASSUMED BY THE RECEIVING PARTY AND ITS
         CUSTOMERS AND SUBLICENSEES, IF ANY. THE WARRANTIES SET FORTH IN
         SECTIONS 6.1, 6.2, 6.3 AND THIS SECTION 6.6 ARE THE ONLY WARRANTIES
         MADE BY THE PARTIES. EACH PARTY DISCLAIMS ANY AND ALL OTHER WARRANTIES
         OR REPRESENTATION EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
         THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, AND FITNESS FOR A
         PARTICULAR PURPOSE. NO PARTY WARRANTS THAT ACCESS TO OR USE OF THE
         MICROSOFT SITES OR PRIVATE LABEL AUCTION SITES WILL BE UNINTERRUPTED OR
         ERROR-FREE, OR THAT ANY SOFTWARE OR SERVICES WILL MEET ANY PARTICULAR
         CRITERIA OF PERFORMANCE OR QUALITY. WITHOUT LIMITING THE GENERALITY OF
         THE FOREGOING, FAIRMARKET EXPRESSLY ACKNOWLEDGES AND AGREES THAT,
         EXCEPT AS EXPRESSLY PROVIDED HEREIN, MICROSOFT HAS NOT MADE ANY EXPRESS
         OR IMPLIED

                                       16
<PAGE>   17

          REPRESENTATIONS, ASSURANCES AND/OR WARRANTIES REGARDING THE NUMBER OF
          VISITS THAT MAY BE GENERATED UNDER THIS AGREEMENT AND THAT FAIRMARKET
          HAS NOT RELIED ON ANY STATEMENTS BY MICROSOFT OR ANY THIRD PARTIES IN
          RELATION THERETO IN ENTERING INTO THIS AGREEMENT.

7.       MICROSOFT MARKS

The parties agree that the branding of the Private Label Auction Sites shall be
done according to the Specifications as set forth in Exhibit A. Microsoft hereby
grants to FairMarket a worldwide, nonexclusive, non-assignable, nontransferable,
royalty-free, right to use the MSN Logo (and, at Microsoft's discretion, other
Microsoft Marks) solely in conjunction with the Private Label Auction Sites in
the manner described herein or as otherwise specified by Microsoft to FairMarket
from time to time in connection with FairMarket's sales, marketing and
promotional activities of the Private Label Auction Sites. Notwithstanding the
provisions of this Section 7, FairMarket agrees that it shall not pursuant to
this Agreement or otherwise acquire any ownership of Microsoft Marks or of any
Microsoft content provided to FairMarket for inclusion in the Private Label
Auction Sites, and that all use of the Microsoft marks will inure to the benefit
of Microsoft. All rights not expressly granted herein are reserved by Microsoft.

8.       CONFIDENTIALITY

Microsoft and FairMarket agree that the terms of the Microsoft Standard
Reciprocal Non-Disclosure Agreement ("NDA") dated July 26, 1999 shall be deemed
incorporated herein, and further, that all terms and conditions of this
Agreement shall be deemed Confidential Information as defined in such NDA.

9.       NON-EXCLUSIVITY; PRESS RELEASES

         9.1 Except as specifically stated herein, nothing in this Agreement
         will be construed as restricting any party's ability to acquire,
         license, develop, manufacture or distribute for itself, or have others
         acquire, license, develop, manufacture or distribute for itself,
         content, software, news, sites, search services, search results or the
         like, which is the same or similar to that contemplated by this
         Agreement, or to market, promote and distribute same in addition to
         that contemplated by this Agreement.

         9.2 No party will issue any press release or make any public
         announcement(s) relating in any way whatsoever to this Agreement or the
         relationship established by this Agreement without the express prior
         written consent of the other party, which consent shall not be
         unreasonably withheld. However, the parties acknowledge that this
         Agreement, or portions thereof, may be required under applicable law to
         be disclosed, as part of or an exhibit to a party's required public
         disclosure documents. If any party is advised by its legal counsel that
         such disclosure is required, it will notify the other in writing and
         the parties will jointly seek confidential treatment of this Agreement
         to the maximum extent reasonably possible, in documents approved by
         both parties and filed with the applicable governmental or regulatory
         authorities. Notwithstanding the foregoing, the parties will cooperate
         to prepare a mutually agreed press release announcing the relationship,
         but not the financial details, to be released prior to the Commercial
         Release Date.

10.      INDEMNIFICATION

         10.1     OBLIGATION TO INDEMNIFY.

                  (A) BY EITHER PARTY. A party (the "Indemnifying Party") shall,
                  at its expense and the request of any other party (the
                  "Indemnified Party"), defend and pay any damages arising out
                  of or in connection with any third-party claim or action
                  brought against the Indemnified Party, and its successors,
                  affiliates, directors, officers, employees, licensees, agents
                  and independent contractors, to the extent it is based upon a
                  claim that, if true, would constitute a breach of a warranty,
                  representation or covenant of the Indemnifying Party set forth
                  in this Agreement.

                                       17
<PAGE>   18
                  (B) BY FAIRMARKET. Provided that notice has been given as set
                  forth in Section 14, FairMarket shall, at its expense and the
                  request of Microsoft, defend and pay any damages arising out
                  of or in connection with any third party claim or action
                  brought against Microsoft, and its successors, affiliates,
                  directors, officers, employees, licensees, agents and
                  independent contractors, relating to the Private Label Auction
                  Sites and other services to be provided by FairMarket under
                  this Agreement, including without limitation, any claim
                  brought by an End User, Seller or Buyer (except in each case
                  for claims covered by Section 10.1(c)).

                  (C) BY MICROSOFT. Provided that notice has been given as set
                  forth in Section 14, Microsoft shall, at its expense and the
                  request of FairMarket, defend and pay any damages arising out
                  of or in connection with any third party claim or action
                  brought against FairMarket, and its successors, affiliates,
                  directors, officers, employees, licensees, agents and
                  independent contractors, relating to the use of End User
                  information by Microsoft.

         10.2 INDEMNIFICATION PROCESS. If any action shall be brought against
         either party (the "Claimant") in respect to which indemnity may be
         sought from the other party (the "Indemnifying Party") pursuant to the
         provisions of this Section 10, the Claimant shall promptly notify the
         Indemnifying Party in writing, specifying the nature of the action and
         the total monetary amount sought or other such relief as is sought
         therein. The Claimant shall cooperate with the Indemnifying Party at
         the Indemnifying Party's expense in all reasonable respects in
         connection with the defense of any such action. The Indemnifying Party
         may upon written notice to Claimant undertake to conduct all
         proceedings or negotiations in connection therewith, assume the defense
         thereof, and if it so undertakes, it shall also undertake all other
         required steps or proceedings to settle or defend any such action,
         including the employment of counsel, and payment of all expenses.
         Claimant shall have the right to employ separate counsel and
         participate in the defense at its own expense; provided that the
         Indemnifying Party shall control the defense. In the event that the
         parties materially disagree on any aspect of the defense, then the
         Claimant may elect to pursue its own defense and the Indemnifying
         Party's indemnification obligation shall cease. The Indemnifying Party
         shall reimburse Claimant upon demand for any payments made or loss
         suffered by it in connection with an indemnifiable matter at any time
         after the date of written notice of such claim, based upon the judgment
         of any court of competent jurisdiction or pursuant to a bona fide
         compromise or settlement, approved in writing by the Indemnifying Party
         (which approval shall not be unreasonably withheld, delayed or
         conditioned), of claims, demands, or actions, in respect of any damages
         to which the foregoing relates.

         10.3 ADDITIONAL ACTIONS. In addition to the indemnification obligations
         set forth in this Section 10, following notice of a claim that the
         Private Label Auction Sites or any listing, content and/or material
         provided by FairMarket contained therein infringe the intellectual
         property or other right of any third party, FairMarket shall at its
         expense procure the right to continue to use the Private Label Auction
         Sites and all content and/or material contained therein provided by
         FairMarket, or replace or modify the Private Label Auction Sites and/or
         any content and/or material contained therein provided by FairMarket,
         as applicable, to make them non-infringing. If FairMarket elects to
         replace or modify the Private Label Auction Sites and/or any content
         and/or material contained therein, such replacement(s) shall meet
         substantially the quality and content of the materials being replaced.
         If neither of the foregoing options are reasonably available to
         FairMarket and the Private Label Auction Sites cannot reasonably be
         maintained to Microsoft's satisfaction without such content and/or
         material, then Microsoft shall have the right to terminate this
         Agreement; provided, however, that FairMarket's failure to take
         corrective action in accordance with this Section shall nevertheless be
         considered a material breach and Microsoft shall have all rights and
         remedies provided by law or this Agreement.

11.      LIMITATION OF LIABILITIES

NO PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, ARISING OUT OF OR RELATED TO THIS
AGREEMENT INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS

                                       18
<PAGE>   19
INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE, EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION SHALL NOT
APPLY TO ANY PARTY'S (A) ABILITY TO OBTAIN INJUNCTIVE OR OTHER EQUITABLE RELIEF;
(B) OBLIGATIONS UNDER SECTION 8 OR THE NDA; AND (C) INDEMNIFICATION OBLIGATIONS
AS TO THIRD PARTY CLAIMS ASSESSED AGAINST THE INDEMNIFIED PARTY IN CONNECTION
WITH INDEMNIFIED CLAIMS UNDER SECTION 10.

12.      TERM AND TERMINATION

         12.1 TERM. This Agreement will take effect on the Effective Date and
         will continue until the fifth anniversary of the Commercial Release
         Date (the "Fifth Anniversary"). Microsoft shall have the right to
         extend this Agreement after the Fifth Anniversary for an additional
         five-year period (the "Renewal Term"), by providing FairMarket with
         notice in writing of its intent to renew no later than 120 days prior
         to the Fifth Anniversary. In the Renewal Term, if any, Microsoft hereby
         waives FairMarket's minimum revenue guarantees, and FairMarket hereby
         waives Microsoft's user traffic guarantees. Both parties agree to
         evaluate the financial implications of this Agreement prior to the
         beginning of the Renewal Term and adjust the financial terms of the
         renewed agreement if necessary and mutually agreed upon. If the parties
         are unable to mutually agree on any adjustments to the financial terms,
         they shall renew as set forth in this Agreement, except that any
         renewal of this Agreement shall include Most Favored Nation pricing
         from FairMarket to Microsoft and FairMarket agrees that the Microsoft
         revenue share for any Renewal Term shall not be less than fifty percent
         (50%) of FairMarket's Listing, Transaction and other directly
         attributable FairMarket-related Revenue unless otherwise mutually
         agreed in writing by both parties. For purposes of this Section 12.1,
         "Most Favored Nation" pricing means revenue sharing on terms no less
         favorable to Microsoft than those granted by FairMarket to other
         FairMarket Network members for a comparable service.

         12.2 TERMINATION FOR CAUSE. This Agreement may be terminated by either
         party prior to its natural expiration if any of the following events
         occurs:

                  (a) the other party fails to perform or comply with its
                  material obligations under this Agreement or any provision
                  hereof, including failure to pay any amount(s) due hereunder;

                  (b) the other party becomes insolvent or admits in writing its
                  inability to pay its debts as they mature, or makes an
                  assignment for the benefit of creditors; or

                  (c) a petition under any bankruptcy act, receivership statute,
                  or the like, as they now exist, or as they may be amended, is
                  filed by the other party; or if such a petition is filed by
                  any third party, or an application for a receiver of the other
                  party is made by anyone and such petition or application is
                  not resolved favorably to such party within sixty (60) days;
                  or

                  (d) upon the circumstances described in Section 10.3 above (in
                  which case Microsoft shall be the non-defaulting party for
                  purposes of this Section 12); or

                  (e) either party is in material breach of Section 8.

         12.3 EFFECT OF TERMINATION. Termination under Section 12.2(a) above
         shall be effective thirty (30) days after written notice of termination
         given by the non-defaulting party to the defaulting party, unless the
         defaulting party's defaults have been cured within such thirty (30) day
         period, in which case termination shall not occur. Termination under
         Sections 12.2(b), 12.2(c), 12.2(d) and 12.2(e) above shall be effective
         upon written notice, provided, however, that the defaulting party has
         not cured any default within the thirty (30) day cure period. The
         rights and remedies provided in this Section shall not be exclusive and
         are in addition to any other rights and remedies provided at law, in
         equity or under this Agreement. In the event that a non-defaulting
         party in its discretion elects not to terminate this Agreement, such
         election shall not constitute a waiver of any and all claims of that
         party for such default(s). Further, the non-defaulting party

                                       19
<PAGE>   20
         may elect to leave this Agreement in full force and effect and to
         institute legal action against the defaulting party for specific
         performance and/or damages suffered by such party as a result of the
         default(s).

         12.4 TERMINATION WITHOUT CAUSE BY MICROSOFT. Microsoft shall have the
         right to terminate this Agreement without cause at any time during the
         forty-five (45) day period immediately following the Effective Date.
         Such termination shall be effective immediately upon notice by
         Microsoft to FairMarket. In no event shall either party be liable for
         any damages or compensation of any kind related to or arising out of
         Microsoft's exercise of its termination right under this Section 12.4.

         12.5 RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Promptly
         upon termination or expiration of this Agreement:

               (a) Each party shall, at the other party's direction, return or
               certify destruction of Confidential Information of such other
               party.

               (b) FairMarket shall stop making available to End Users or any
               other party the Private Label Auction Sites; provided that, if
               not otherwise prohibited under this Agreement or by law or order
               of a competent authority, the Private Label Auction Sites shall
               remain available as long as is necessary, as reasonably
               determined by Microsoft, to comply with any third party
               obligations.

               (c) FairMarket shall immediately cease and desist from all use of
               the Microsoft Marks.

               (d) Both parties shall cease advertising, marketing and promoting
               the Private Label Auction Sites.

               (e) Both parties shall cease selling and soliciting any
               advertising and listings for the Private Label Auction Sites.

               (f) Within thirty (30) days immediately following termination
               FairMarket shall provide Microsoft a complete report of all End
               User Data in its possession.

               (g) Each party shall provide reasonable assistance to the other
               for such reasonable time and upon such terms and conditions as
               shall be mutually agreed upon in order to assure an orderly
               transition and wind down in such a manner as shall minimize
               disruption to the users. The goal of the parties is to ensure a
               smooth and seamless transition for the user to maintain a high
               level of customer satisfaction.

          12.6 SURVIVAL. Sections 4.2 (with respect to Microsoft's ownership
          rights), 5.1 through 5.7 (with respect to any payments due and owing
          as of the date of termination or expiration), 5.8, 6, 8, 10, 11, 12,
          14 and 15 shall survive termination or expiration of this Agreement.

          12.7 No party shall be liable to the other for damages of any sort
          resulting solely from terminating this Agreement in accordance with
          its terms.

13. INTERNATIONAL WORKSCOPE. Microsoft and FairMarket each agree to explore
expanding the Territory to include international sites (the "International
Sites"). If mutually agreed by both parties, International Sites may be added as
additional sites included in Section 2.4 of this Agreement and such
International Sites shall be covered under the terms of this Agreement, amended
as necessary and mutually agreed in writing.

14. NOTICES. All notices, authorizations, and requests required or desired to be
given or made in connection with this Agreement will be in writing, given by
certified or registered mail (return receipt requested), express air courier
(charges prepaid) or facsimile, and addressed as follows (or to such other
address as the party to receive the notice or request so designates by notice to
the other):

                                       20

<PAGE>   21

Notices to Microsoft:                           Notices to FairMarket:

Microsoft Corporation                           FairMarket, Inc.
One Microsoft Way                               400 Unicorn Park Drive
Redmond, WA  98052-6399                         Woburn, MA  01801
Attn.: Matt Kursch, General Manager, MSN        Attn.:   Scott Randall
Fax:   (425) 936-7329                           Fax:   (781) 935-7976

Copy to: Law & Corporate Affairs                Copy to:  Goodwin Procter & Hoar
Fax:  (425) 936-7329                            Attn: David F. Dietz, P.C.
                                                Fax:  (617)  523-1231

If a notice is given by either party by certified or registered mail, it will be
deemed received by the other party on the third business day following the date
on which it is deposited for mailing. If a notice is given by either party by
air express courier, it will be deemed received by the other party on the next
business day following the date on which it is provided to the air express
courier. If a notice is given by facsimile, it will be deemed received by the
other party upon confirmation of receipt.

15.      GENERAL

         15.1 GOVERNING LAW/JURISDICTION. This Agreement shall be construed in
accordance with the laws of the State of Washington, USA, without regard for its
conflict of laws rules.

         15.2 ATTORNEYS' FEES. In any action or suit to enforce any right or
remedy arising out of or relating to this Agreement or to interpret any
provision of this Agreement, the prevailing party shall be entitled to recover
its reasonable attorneys' fees, costs and other expenses.

         15.3 ENTIRE AGREEMENT/WAIVER. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements or communications. This
Agreement shall not be effective until signed by both parties. This Agreement
shall not be modified except by a written agreement dated subsequent to the date
of this Agreement and signed on behalf of FairMarket and Microsoft by their
respective duly authorized representatives. No waiver of any breach of any
provision of this Agreement shall constitute a waiver of any prior, concurrent
or subsequent breach of the same or any other provisions hereof, and no waiver
shall be effective unless made in writing and signed by an authorized
representative of the waiving party.

         15.4 ASSIGNMENT. Neither party may assign this Agreement, or any
portion thereof (whether by merger, operation of law, sale of assets,
reorganization or otherwise), without the written consent of the other. Any
attempted assignment, sublicense, transfer, encumbrance or other disposal
without such consent shall be void and shall constitute a material default and
breach of this Agreement. Except as otherwise provided, this Agreement shall be
binding upon and inure to the benefit of the parties' successors and lawful
assigns.

         15.5 SEVERABILITY. In the event that any provision of this Agreement
conflicts with governing law or if any provision is held to be null, void or
otherwise ineffective or invalid by a court of competent jurisdiction, (i) such
provision shall 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
shall remain in full force and effect. This Agreement has been negotiated by the
parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.

         15.6 NO JOINT VENTURE. Neither this Agreement, nor any terms and
conditions contained herein, shall be construed as creating a partnership, joint
venture, employer-employee relationship, agency relationship or as granting a
franchise.

                                       21
<PAGE>   22

         15.7 SECTION HEADINGS. The section headings used in this Agreement are
intended for convenience only and shall not be deemed to affect in any manner
the meaning or intent of this Agreement or any provision hereof.

         15.8 FORCE MAJEURE. The parties agree that neither of them shall have
any liability hereunder with respect to any failure of performance due
principally to the elements, acts of God, armed hostilities, failure of
communications, transportation or other critical systems, or other causes beyond
the reasonable control of such party.

     In Witness Whereof, the parties have entered into this Agreement as of the
Effective Date written above.

MICROSOFT CORPORATION                          FAIRMARKET, INC.
("MICROSOFT")                                  ("FAIRMARKET")

By   /s/ Brad Chase                            By   /s/ Scott Randall
   ________________________________               _____________________________

Name   Brad Chase                             Name   Scott Randall
      _____________________________                  __________________________

Title                                         Title     CEO
      _____________________________                   __________________________

Date    7/29/99                                 Date   7/29/99
      _____________________________                  __________________________

                                       22

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"}]]