Document:

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                                                                   EXHIBIT 10.12

                             MICROSOFT CORPORATION
                             SPONSORSHIP AGREEMENT

This Sponsorship Agreement ("AGREEMENT") in entered into by and between
Microsoft Corporation, a Washington corporation ("MICROSOFT"), and garage.com,
a California Corporation ("GC") to be effective as of January 19, 1999
("EFFECTIVE DATE").

                                    RECITALS

GC is an Internet based business that facilitates business relationships
between technology entrepreneurs and potential technology investors. One of the
primary methods by which GC offers its services is through its web site,
currently located at http://www.garage.com ("GC WEB SITE"). Pursuant to the
terms of this Agreement, GC desires to engage Microsoft as a founding sponsor
of GC and the GC Web Site and offer the corresponding promotional consideration
to Microsoft as described below. In consideration thereof, Microsoft is willing
to provide GC the financial and promotional consideration described more fully
below.

Now, therefore, in consideration of the covenants and conditions set forth
below, the adequacy of which is hereby acknowledged, the parties agree as
follows:

                                   AGREEMENT

1.    TERM AND TERMINATION

      1.1.  Term. This Agreement shall commence as the Effective Date and shall
            expire on December 31, 2001, unless earlier terminated as provided
            in this Section 1.

      1.2.  Termination for Convenience. Within forty five (45) days of January
            1, 2000 or January 1, 2001, Microsoft may terminate this Agreement
            without cause upon written notice to GC.

      1.3.  Termination By Either Party For Cause. Either party may suspend
            performance and/or terminate this Agreement immediately upon
            written notice at any time if the other party is in material breach
            of this Agreement and fails to cure that breach within thirty (30)
            days after written notice thereof.

MICROSOFT CONFIDENTIAL                                                    Page 1
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2.  SPONSORSHIP PAYMENTS

    2.1 During the term of this Agreement, Microsoft shall make sponsorship
        payments to GC as follows:

<TABLE>
<CAPTION>
                      PAYMENT                  DATE
                      -------                  ----
                         <S>         <C>
                         *           Thirty (30) days after the
                                           Effective Date

                         *                 July 15, 1999

                         *               January 15, 2000

                         *                 July 15, 2000

                         *               January 15, 2001

                         *                 July 15, 2001
</TABLE>

    2.2 GC shall submit invoices to Microsoft as payments become due hereunder.
        Microsoft shall pay all invoices properly submitted pursuant to this
        Section 2 within thirty (30) days after Microsoft's receipt of the same.

3.  MICROSOFT AS FOUNDING SPONSOR

    GC will promote and allow microsoft to participate in all GC-sponsored
    events in a manner no less favorable than GC promotes and/or allows any
    other Founding Sponsor (defined below) to participate in such events. For
    the purposes of this Agreement, "FOUNDING SPONSORS" means the following
    original founding sponsors of the GC Web Site: PricewaterhouseCoopers,
    Silicon Valley Bank, ABD Insurance, Venture Law Group, Heidrick & Struggles,
    Credit Suisee First Boston, and Advanced Technology Ventures. If such events
    require fees to be paid, Microsoft shall be required to pay such fees if it
    desires the promotion and participation opportunity offered by the event,
    provided that the fees charged to Microsoft shall be no greater than the
    fees charged to any other Founding Sponsor for the same level of
    sponsorship. If Microsoft desires to become a premium, major, or lead
    sponsor of any event that senior sponsorship level may have greater fees
    associated with it, provided that such fees shall be no greater than the
    fees charged to any other Founding Sponsor for the same level of
    sponsorship. The parties agree to discuss opportunities for Microsoft to pay
    such fees "in kind" as the parties agree is appropriate.

MICROSOFT CONFIDENTIAL                                                  Page 2

* Portions of this exhibit have been omitted pursuant to a request for
  confidential treatment, and have been filed separately with the SEC.
<PAGE>   3
4.   SOFTWARE DEVELOPERS FORUM

     4.1  On the GC Web Site, GC shall develop a "Software Developers Forum" or
          "Developers Forum" ("DEVELOPERS FORUM") substantially similar to the
          "Accounting, Tax and Consulting", "Commercial Banking", "Insurance",
          "Law", "Venture Capital", and "Soapbox" forums currently present on
          the GC Web Site. GC shall develop the Developers Forum in such a
          manner so that, like these other forums, the Developers Forum shall
          contain short articles, questions and answers, mailing lists supplied
          by the applicable Founding Sponsor, as well as the same functionality
          allowing the Founding Sponsor to interact and respond with visitors to
          the Developers Forum. GC shall consider in good faith any input from
          Microsoft on the structure and design of the Developers Forum.

     4.2  During the term of this Agreement, GC shall promote Microsoft as the
          Founding Sponsor for the Developers Forum in a manner no less
          favorable than GC promotes the Founding Sponsors of the other forums
          on the GC Web Site. Such promotion shall include, without limitation,
          (i) the attribution of Microsoft as the Founding Sponsor for the forum
          wherever sponsors of the forums are mentioned; (ii) the display of a
          Microsoft-supplied logo on the entry page of the GC Web Site for the
          forums (within 20 business days of the Effective Date located at
          http://www.garage.com/forums); (iii) the inclusion in the Developers
          Forum of Microsoft-supplied articles and content relating to software
          development and business relationships with Microsoft; (iv) allowing
          Microsoft to receive and respond to questions submitted by visitors to
          the Developers Forum through the functionality by the GC Web Site; and
          (v) including hyperlinks within the GC Web Site to
          Microsoft-designated URLs in a manner similar to the hyperlinks to
          other Founding Sponsors of GC Web Site forums.

     4.3  GC shall be entitled to designate other secondary sponsors of the
          Developers Forum, provided that no other sponsor shall be promoted or
          entitled to benefits equal to or more favorable than those provided to
          Microsoft as the Founding Sponsor. Any secondary sponsors may also
          provide similar content in the Developers Forum.

5.   ADDITIONAL EVENT

     Microsoft and GC agree that representatives of Microsoft's Silicon Valley,
     or Boston, after it is established, Developer Centers and GC shall discuss
     in good faith the possibility of jointly sponsoring an additional
     entrepreneur software conference to be held within twelve (12) months of
     the Effective Date. The parties' roles, rights, and responsibilities for
     the additional conference shall be as agreed by the parties.
     Notwithstanding anything to the contrary, neither party shall have any
     obligations

MICROSOFT CONFIDENTIAL                                                    Page 3
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     with regard to this additional conference (other than the obligation to
     discuss the possibility of such an additional conference) unless and until
     the parties agree in writing upon their specific roles, rights, and
     responsibilities for the conference.

6.   GC PRESENCE AT MICROSOFT DEVELOPER CENTERS

     At GC's request, Microsoft shall allow GC to promote its services at
     Microsoft's existing developer centers in Silicon Valley, the developer
     center in Boston after it is established, and other mutually agreed upon
     Microsoft developer centers. Such promotion may consist of (i) on site
     signage that indicates the parties' relationship and/or Microsoft's
     sponsorship of GC; (ii) the display of copies of GC-supplied promotional
     and collateral materials; and (iii) reasonable mentions in Microsoft's
     marketing and communications materials sent out by the applicable developer
     center when such materials mention their other major alliance partners. The
     size, placement, and content of all such promotion, however, shall be
     mutually agreed upon by the parties.

7.   DEVELOPER CENTER SLOTS/MSDN MEMBERSHIPS

     7.1  Microsoft shall provide GC with a schedule of selected classes, labs,
          workshops, and briefings offered by Microsoft's Developer Centers. At
          GC's request, Microsoft shall reserve a single space for a GC-selected
          entrepreneur company at each of these events.

     7.2  During the first year of this Agreement, Microsoft will provide up to
          ten (10) GC-selected companies with complementary, one-year
          memberships to Microsoft's MSDN Universal Program, subject to the
          standard terms and conditions for participation in this program. In
          future years of this Agreement, Microsoft shall provide additional
          complementary, one-year memberships to Microsoft's MSDN Universal
          Program to GC-selected companies provided (i) the parties agree upon a
          specific number of complementary memberships to be offered, (ii) the
          parties agree upon a value for each of the complementary memberships
          provided by Microsoft, and (iii) Microsoft's payment obligations
          hereunder to GC during such year is reduced by the total value of all
          of the complementary memberships provided by Microsoft during such
          year (i.e., the agreed upon quantity multiplied by the agreed upon
          value).

8.   GUY KAWASAKI ADVISOR

     Guy Kawasaki of GC shall act as an advisor to Microsoft's Silicon Valley
     Developer Center. As an advisor he shall (i) attend quarterly meetings for
     the group of advisors for Microsoft's Silicon Valley Developer Center
     except that if such meetings conflict

MICROSOFT CONFIDENTIAL                                                   Page 4
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     with his previously scheduled travel plans, GC shall send another GC
     executive, reasonably acceptable to Microsoft and (ii) provide information
     and advice from time-to-time as reasonably requested by Microsoft's Silicon
     Valley Developer Center.

9.   WEB LINKS

     As agreed by the parties, Microsoft and GC shall endeavor to include
     mutually acceptable hyperlinks between the GC Web Site and web sides for
     Microsoft's Developer Centers. In addition, all logos supplied for display
     on the parties' web sites shall, at the supplying party's request, contain
     a hyperlink to a web site designated by the supplying party.

10.  MSDN FEATURE ARTICLE

     Microsoft shall include a GC-supplied feature article or description of GC
     and/or GC's services at least five (5) days per year on or linked to the
     home page of Microsoft's Developer Network web site (currently located at
     http://msdn.microsoft.com). The content for the article shall be mutually
     agreed upon by the parties, but shall generally be consistent with other
     feature articles contained within Microsoft's Developer Network web site.
     Once near the beginning of the article or description, the full GC URL will
     be shown and hyperlinked to that URL.

11.  LOGOS

     As each party deems appropriate, each party shall supply the other with
     logos to be displayed on the other party's web site, subject to the
     provisions of Section 9 and any usage guidelines or terms and conditions
     provided in connection with the logos.

12.  PRESS RELEASES

     The parties anticipate releasing one or more press releases, separately or
     jointly relating to the collaboration described in this Agreement. Each
     party agrees to obtain the other's prior written approval of any press
     releases relating to the collaboration described in this Agreement, with
     such approval not to be unreasonably withheld or delayed. Notwithstanding
     the foregoing, each party shall be allowed to identify Microsoft as a
     founding sponsor of GC without obtaining the other side's permission.

13.  COMMUNICATIONS AND BRIEFINGS

     Periodically, Microsoft representatives shall provide GC executives with a
     presentation on Microsoft-selected selected issues relating to then-current
     Microsoft technical and business plans. GC recognizes, however, that
     Microsoft shall select the

MICROSOFT CONFIDENTIAL                                                    Page 5
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     information to be described in these briefings and that such information
     will not cover all of Microsoft's technical and business plans.

14.  SPEAKERS

     As mutually agreed by the parties, (i) GC shall provide Guy Kawasaki to
     speak at selected Microsoft events and (ii) Microsoft shall provide
     Microsoft-selected Microsoft executives to speak at selected GC events.

15.  LIAISONS

     Microsoft and GC shall each designate representatives to act as liaisons
     to facilitate the exchange of information and referrals of start up
     businesses to each other as the parties individually deem appropriate. For
     example, the liaisons may facilitate introductions between appropriate
     Microsoft product and/or business development groups and premier start up
     companies that are members of GC. Notwithstanding anything to the
     contrary, neither party shall be required exchange specific information
     or referrals hereunder; rather, the intent of this Section is to create a
     mechanism to facilitate the exchange of information and referrals in the
     event that the parties determine, in their sole discretion, that such
     exchange and referrals are appropriate. In addition the Microsoft liaison
     shall, upon request, provide information to GC and selected GC represented
     developers on available developer support resources offered by Microsoft.

16.  CONFIDENTIALITY

     16.1  As used in this Section 16, "CONFIDENTIAL INFORMATION" means
           nonpublic information that a party designates as being confidential
           or which, under the circumstances surrounding disclosure, ought to
           be treated as confidential. "Confidential Information" includes,
           without limitation, the terms and conditions of this Agreement,
           information relating to released or unreleased software or hardware
           products, the marketing or promotion of any product, business
           policies or practices, the pricing, payment and other provisions of
           the Agreement between the parties, and information received from
           others that either party is obligated to treat as confidential.
           "Confidential Information" shall not include information that: (i)
           is or becomes generally known or available by publication,
           commercial use or otherwise through no fault of the receiving party;
           (ii) is known and has been reduced to tangible form by the receiving
           party at the time of disclosure and is not subject to restriction;
           (iii) is independently developed or learned by the receiving party;
           (iv) is lawfully obtained from a third party that has the right to
           make such disclosure; or (v) is

MICROSOFT CONFIDENTIAL                                                    Page 6
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             made generally available by the disclosing party without
             restriction on disclosure.

     16.2.   Each party shall use its best efforts to protect the other's
             Confidential Information from unauthorized dissemination and shall
             use, at a minimum, the same degree of care that such party uses to
             protect its own like information. Neither party will use the
             other's Confidential Information for purposes other than those
             necessary to directly further the purposes of this Agreement.
             Neither party will disclose to third parties the other's
             Confidential Information without the prior written consent of the
             other party. Except as expressly provided in this Agreement, no
             ownership or license rights are granted in any Confidential
             Information.

     16.3.   The parties' obligations of confidentiality under this Agreement
             shall not be construed to limit either party's right to
             independently develop or acquire products without use of the other
             party's Confidential Information. Further, either party shall be
             free to use for any purpose the residuals resulting from access to
             or work with such Confidential Information, provided that such
             party shall maintain the confidentiality of the Confidential
             Information as provided herein. The term "residuals" means
             information in non-tangible form, which may be retained by persons
             who have had access to the Confidential Information, including
             ideas, concepts, know-how or techniques contained therein. Neither
             party shall have any obligation to limit or restrict the assignment
             of such persons or to pay royalties for any work resulting from the
             use of residuals. However, the foregoing shall not be deemed to
             grant to either party a license under the other party's copyrights
             or patents.

17.  GENERAL

     17.1.   Notices. All notices and requests in connection with this Agreement
             shall be deemed given as of the day they are received either by
             messenger, delivery service, or in the United States of America
             mails, postage prepaid, certified or registered, return receipt
             requested, or transmitted by facsimile with machine-generated
             confirmation of transmission and addressed as follows:

MICROSOFT CONFIDENTIAL                                                    Page 7
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<TABLE>
<S>                                             <C>
                To GC:                          To Microsoft:

                Garage.com                      Microsoft Corporation - Larry Cohen
                420 Florence Avenue, Suite 300  One Microsoft Way
                Palo Alto, CA 94301             Redmond, WA 98052-6399
                Attn: Bill Joos                 Attn: TERRY HANOLD
                Phone: (650) 470-0950           Phone: (425) 936-9072
                Fax:   (650) 470-0940           Fax:   (425) 936-7329

                                                Copy to: Law & Corporate Affairs
                                                Fax:     (425) 936-7409
</TABLE>

                or to such other address as a party may designate pursuant to
                this notice provision.

        17.2.   No Partnership. GC and Microsoft are independent contracting
                parties. Nothing in this Agreement shall be construed as
                creating an employer-employee relationship, a partnership, or a
                joint venture between the parties.

        17.3.   Governing Law. This Agreement shall be construed and
                controlled by the laws of the State of Washington, and GC
                consents to exclusive jurisdiction and venue in the federal
                courts sitting in King County, Washington, unless no federal
                subject matter jurisdiction exists, in which case GC consents
                to exclusive jurisdiction and venue in the Superior Court of
                King County, Washington. GC waives all defenses of lack of
                personal jurisdiction and forum non conveniens. Process may be
                served on either party in the manner authorized by applicable
                law or court.

        17.4.   Assignment. This Agreement shall be binding upon and inure to
                the benefit of each party's respective successors and lawful
                assigns; provided, however, that GC may not assign (by
                operation or law or otherwise) this Agreement, in whole or in
                part, without the prior written approval of Microsoft. For
                purposes of the foregoing, an assignment shall be deemed to
                include, without limitation, a merger of GC with another party,
                whether or not GC is the surviving entity, or the acquisition
                of direct or indirect control of management through one or a
                series of transactions. Any attempted assignment by GC in
                violation of this Section shall be void and shall entitle
                Microsoft to terminate this Agreement immediately upon written
                notice to GC.

        17.5.   NO CONSEQUENTIAL DAMAGES. TO THE MAXIMUM EXTENT PERMITTED BY
                APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
                ANY SPECIAL, INCIDENTAL, INDIRECT, OR

MICROSOFT CONFIDENTIAL                                                    Page 8
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       CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, DAMAGES
       FOR LOSS OF PROFITS OR OTHER INFORMATION, FOR FAILURE TO MEET ANY DUTY
       INCLUDING OF GOOD FAITH OR OF REASONABLE CARE, FOR NEGLIGENCE, AND FOR
       ANY OTHER PECUNIARY OR OTHER LOSS WHATSOEVER) ARISING OUT OF OR IN
       CONNECTION WITH THIS AGREEMENT, EVEN IN THE EVENT OF THE FAULT, TORT
       (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT OR BREACH
       OF WARRANTY OF EITHER PARTY TO THIS AGREEMENT, AND EVEN IF SUCH PARTY
       HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

17.6   Construction. If for any reason a court of competent jurisdiction finds
       any provision of this Agreement, or portion thereof, to be
       unenforceable, that provision of the Agreement will be enforced to the
       maximum extent permissible so as to effect the intent of the parties,
       and the remainder of this Agreement will continue in full force and
       effect. Failure by either party to enforce any provision of this
       Agreement will not be deemed a waiver of future enforcement of that or
       any other provision. 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.

17.7   Entire Agreement. This Agreement does not constitute an offer by
       Microsoft and it shall not be effective until signed by both parties.
       This Agreement constitutes the entire agreement between the parties with
       respect to the subject matter hereof and merges all prior and
       contemporaneous communications. It shall not be modified except by a
       written agreement dated subsequent to the date of this Agreement and
       signed on behalf of GC and Microsoft by their respective authorized
       representatives.

MICROSOFT CONFIDENTIAL                                                    Page 9

<PAGE>   10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

MICROSOFT CORPORATION                        GARAGE.COM

/s/ LARRY COHEN                              /s/ BILL JOOS
-------------------------------              -------------------------------
By                                           By

Larry Cohen                                  Bill Joos
-------------------------------              -------------------------------
Name (print)                                 Name (print)

GM Silicon Valley DRG                        VP
-------------------------------              -------------------------------
Title                                        Title

MICROSOFT CONFIDENTIAL                                                   Page 10<PAGE>   1
                                                                   EXHIBIT 10.27

                          [REGENT PACIFIC LETTERHEAD]

February 9, 2000

Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
Verity, Inc.
894 Ross Drive
Sunnyvale, CA 94089

RE:  THIRD AMENDMENT TO RETAINER AGREEMENT BETWEEN REGENT PACIFIC MANAGEMENT
     CORPORATION AND VERITY, INC.

This Third Amendment to Retainer Agreement sets forth certain amendments to the
Retainer Agreement between Regent Pacific Management Corporation, a California
corporation ("Regent Pacific"), and Verity, Inc., a Delaware corporation, and
its wholly-owned and controlled subsidiaries (collectively, "Verity") dated July
31, 1997, as amended on April 13, 1998, and March 12, 1999 (the "Original
Retainer Agreement", "First Amendment" and "Second Amendment", respectively).
Except for the amendments expressly contained herein, the Original Retainer
Agreement and First Amendment and Second Amendment shall remain in full force
and effect.

1.   The paragraph of the Original Retainer Agreement as amended by the First
     Amendment and Second Amendment entitled "Fees" is hereby amended in its
     entirety as follows:

          "FEES: We have agreed to provide the work product included in this
          agreement for a period of forty-nine (49) months, including services
          covering a non-cancelable period beginning on July 31, 1997 and ending
          on February 28, 2001 (the "Non-Cancelable Period"). This service shall
          be $50,000 per week, payable in four (4) week increments, each to be
          paid in advance of each Regent Pacific standard four-week billing
          period. It is agreed and understood between us that the payments of
          such cash fees are to be made immediately preceding the start of each
          four-week billing period, and that failure to pay such periodic
          payments when due shall constitute a breach of this agreement by
          Verity. It is further understood that Regent Pacific's fees are to be
          paid in advance of the work to be performed, and that the initial
          payment is to be paid on or before July 31, 1997. It is further agreed
          that such cash payments are earned in full upon receipt by Regent
          Pacific, by virtue of our accepting this agreement and the
          responsibilities it entails, and are nonrefundable."

2.   The paragraph of the Original Retainer Agreement as amended by the First
Amendment and Second Amendment entitled "Term of Agreement" is hereby amended in
its entirety as follows:

          "TERM OF AGREEMENT: The term of this agreement shall be for forty-nine
          (49) months, unless earlier terminated in accordance with this
          paragraph. Regent Pacific hereby commits the availability of its
          resources to Verity under this
<PAGE>   2
      agreement for the full forty-nine (49) month term of the engagement, or
      for the full term of the agreement, if such term is extended by Verity as
      provided in this paragraph. Verity may discharge Regent Pacific at any
      time after the Non-Cancelable Period provided that Verity has delivered a
      60-day written notice of intent to cancel this agreement. Verity may, at
      its option, extend the term of this agreement for an additional twenty-six
      (26) week period beyond the forty-nine (49) month period by providing
      written notice to Regent Pacific at any time on or before February 28,
      2001. If Verity elects to exercise its option to extend the term of this
      agreement for such twenty-six (26) week period, the Non-Cancelable Period
      also shall be extended automatically through August 31, 2001. Regent
      Pacific may withdraw from this assignment at any time with Verity's
      consent or for good cause without Verity's consent. Good cause also
      includes Verity's breach of this agreement (including Verity's failure to
      pay any invoice within five working days of presentation), or any fact or
      circumstance that would render our continuing participation in the
      assignment unethical or unlawful."

Very truly yours,

REGENT PACIFIC MANAGEMENT CORPORATION

By: /s/ GARY J. SBONA
    -------------------------------------
    Gary J. Sbona
    Chairman and Chief Executive Officer

THE FOREGOING IS HEREBY APPROVED AND AGREED TO:

Dated February 9, 2000

VERITY, INC.

(Signifies full agreement with all terms and conditions)

By: /s/ CHARLES P. WAITE, JR.
    -------------------------------------
    Charles P. Waite, Jr.
    Director, on Behalf of the Board of Directors

By: /s/ STEVEN M. KRAUSZ
    ------------------------------------
    Steven M. Krausz
    Director, on Behalf of the Board of Directors

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