Document:

EXHIBIT 10.32

E M P L O Y M E N T  A G R E E M E N T

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 2nd day of August, 1999, by and between NeoMedia Technologies, Inc., a
Delaware corporation with offices at 2201 Second Street, Suite 600, Fort Myers,
Florida (the "Company") and William F. Goins III (hereinafter referred to as the
"Executive").

         WHEREAS, the Company desires to enter into an agreement for the
employment of Executive by the Company to be assured of the continued services
of Executive and Executive desires to enter into employment by the Company on
the terms and subject to the conditions provided herein.

         NOW, THEREFORE, in consideration of the premises and of the terms,
covenants and conditions hereinafter contained, the parties hereto agree as
follows:

1.       EMPLOYMENT, DUTIES AND AUTHORITY.

         1.1 Duties and Responsibilities. The Company hereby employs Executive
and Executive hereby accepts employment by the Company as President and Chief
Operating Officer, on the terms and subject to the covenants and conditions
herein contained and in accordance with all Company policy and procedures, which
may vary from time to time at the discretion of the Company. The Executive shall
have such duties, responsibilities and authority commensurate with his executive
position and as the by-laws of the Company provide and as the Board of Directors
of the Company shall, from time to time, prescribe. During the term of
Executive's employment hereunder, Executive shall devote his full time to the
performance of his duties and responsibilities hereunder and will perform such
duties and responsibilities faithfully and with reasonable care for the welfare
of the Company. Executive shall provide services to the Company principally at
Company corporate headquarters. During the term of his employment hereunder,
Executive shall not perform any services, whether or not for compensation, for
any person, firm, partnership, corporation or other entity of any kind or nature
whatsoever, other than the Company, without the express written consent of the
President of the Company; provided, however, notwithstanding the foregoing
provisions to the contrary, Executive may volunteer his services to charitable,
religious and not-for-profit organizations and may write articles and books
provided that such activities do not prevent Executive from performing his
services hereunder and the entities to which he provides such services or the
other activities in which he engages are not in competition with the Company.

2.       COMPENSATION.

         2.1 Base Salary. The Company shall pay to Executive during the Initial
Term (as hereinafter defined) of employment hereunder, and each renewal term, a
salary of one hundred eighty thousand ($180,000) dollars per annum ("Base
Salary"). The Base Salary shall be subject to review from time to time, whereby
the Executive shall be eligible for salary increases at the discretion of the
Compensation Committee of the Company Board of Directors. The Base Salary, less
all amounts which the Company is required to withhold from such payments for
applicable federal, state or local laws or regulation, shall be paid by the
Company to the Executive in accordance with the Company's policies and
procedures.

         2.2 Sign-on Bonus. In consideration of Executive's employment during
the Initial Term, Company shall pay to Executive a cash sign-on bonus of
twenty-five thousand ($25,000) dollars (the "Sign-on Bonus"). The Sign-on Bonus
shall be paid with the Executive's first Base Salary paycheck, less all amounts
which the Company is required to withhold from such payments for applicable
federal, state or local laws or regulation.

         2.3 Stock Options. In further consideration of Executive's employment,
Company grants to Executive stock options, from the 1998 Stock Option Plan, for
100,000 shares of the Company's common stock (the "Stock Options"), subject to
approval by the Stock Option Committee of the Company's Board of Directors. Such
options shall have an exercise price equal to the closing NASDAQ price for such
stock on Executive's first date of employment, and shall vest in accordance with
the Company's standard vesting schedule of twenty percent immediately upon
grant, and

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an additional twenty percent upon each of the four successive annual
anniversaries of such grant. The Stock Options shall be subject to the terms and
conditions of the Stock Option Agreement and the 1998 Stock Option Plan.
Executive shall be eligible for additional stock option grants, anticipated to
be 100,000 additional Stock Options annually, at the discretion of the
Compensation Committee and the Stock Option Committee of the Board of Directors,
subject to the terms and conditions stated herein.

         2.4 Incentive Plan. Executive shall participate in, and be deemed an
eligible employee of, the Company's Annual Incentive Plan for Management in
accordance with the provisions of such plan. During the calendar year 1999,
Executive shall be eligible for a performance bonus of 75% of Base Salary if the
Company achieves 100% of its financial plan. Such bonus shall become payable at
a reduced percentage rate if Company achieves 85% of its sales goal and 60% of
its profitability goal. The 1999 bonus will be prorated based on the performance
and length of employment of Executive during the calendar year 1999, and subject
to all provisions of the Company's Plan.

         2.5 Payment During Absences. If Executive shall be absent from work on
account of personal injuries or sickness, he shall, subject to the provisions of
Section 5.1(b), continue to receive the payments of Base Salary provided for in
paragraph 2.1 hereof; provided, however, that any such payment may, at the
Company's sole option, be reduced by the amount which the Executive may receive,
for the period covered by any such payments, disability payments (i) pursuant to
any disability insurance which the Company, in its sole discretion, may
maintain, or (ii) under any governmental program for disability compensation.

3.       BENEFITS; EXPENSE REIMBURSEMENT.

         Executive shall be entitled to those benefits described in this Section
3, and shall not be entitled to any other benefits of any kind or nature
whatsoever.

         3.1 Benefits. Executive shall receive all other benefits of employment
available to other employees of the Company generally, including, without
limitation, vacation time off, other time off, participation in any medical,
dental or other group health plans or accident benefits, life insurance
benefits, pension or profit-sharing plans, as shall be instituted by the
Company, in its sole discretion. Set forth on Exhibit A hereto is a summary of
the current benefits full time employees of the Company are entitled to receive.
Any or all of such benefits may be modified or discontinued at any time or from
time to time by the Company in its sole discretion (provided that such
modification or discontinuance is applicable to all of the Company's full time
employees) and the Company shall not have any obligation of any kind or nature
whatsoever to provide Executive with any benefit in place of such modified or
discontinued benefit (a substituted benefit), unless such substituted benefit is
provided to all full time employees of the Company.

         3.2  Relocation Benefits. Executive shall be reimbursed for actual
relocation expenses incurred in relocating his household from Illinois to
Sarasota, Florida. Relocation expenses shall be paid in accordance with the
Company's Relocation Policy, but shall not exceed the sum of twenty-five
thousand ($25,000) dollars ("Relocation Benefits"). Executive shall be afforded
Relocation Benefits only once, unless the corporate headquarters of the Company
shall be relocated at least eighty (80) miles from its present location.

         3.3  Automobile Lease. Executive shall be eligible to participate in
Company's Executive Automobile Leasing Program, and will be provided a vehicle
in accordance with, and subject to, the terms of the Company's Executive
Automobile Leasing policy. In accordance with applicable tax laws, the value of
personal use of the company vehicle shall be reported as taxable income to the
Executive.

         3.4 Expense Reimbursement. During the term hereof, the Company shall
reimburse Executive for all reasonable and necessary business related expenses
incurred by Executive in the performance of his duties hereunder, including
without limitation, travel, meals, lodging, office supplies or equipment subject
to such limitations, restrictions, reporting standards and policies and
procedures that the Company may from time to time establish. Executive shall
provide to the Company promptly after incurring any such expenses a detailed
report thereof and such documentation

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as the Company shall from time to time require and as shall be sufficient to
support the deductibility of all such expenses by the Company for federal income
tax purposes.

4.       TERM.

         The employment of Executive hereunder shall be for a term commencing on
August 1, 1999 and expiring on July 31, 2000 (the "Initial Term"). Upon the
expiration of the Initial Term or any renewal term of Executive's employment
hereunder, the term of such employment automatically shall be renewed for an
additional term of one year unless Executive or the Company shall give notice of
the termination of Executive's employment and this Agreement by written notice
to the other no less than 60 days prior to the date of expiration of the Initial
Term or any renewal term.

5.       TERMINATION BY COMPANY.

         5.1 Right To Terminate Prior To Expiration of Term. Notwithstanding any
other provision herein contained to the contrary, the Company shall be entitled
to terminate this Agreement and the employment of Executive prior to the
expiration of the Initial Term or any renewal term: (a) for any reason (other
than an event of default by the Executive) upon written notice to Executive; (b)
immediately upon the occurrence of an event of default by Executive, as provided
herein; or (c) upon Death or Disability of Executive, as defined herein.

         5.2      Event of Default by Executive. For purposes of Section 5.1,
an event of default with respect to Executive shall include:

         (a) any failure by Executive to perform his duties and responsibilities
hereunder in a faithful and diligent manner or with reasonable care and, if such
failure can be cured, the failure by Executive to cure such failure within five
days after written notice thereof shall have been given to Executive by the
Company;

         (b) violation of Company policy, as prescribed from time to time by
Company, and if such violation can be cured, the failure by Executive to cure
such violation within five days after written notice thereof shall have been
given to Executive by the Company;

         (c)      embezzlement or conversion by Executive of any funds of the
Company or any customer of the Company;

         (d)      destruction or conversion by Executive of any property of the
Company, without the Company's consent;

         (e)      Executive's conviction of a felony;

         (f)      Executive's adjudication as an incompetent;

         (g)      Executive's habitual intoxication;

         (h)      Executive's drug addiction;

         (i)      Conduct unbefitting an executive of Company which, in the
discretion of the Board of Directors of the Company, casts the Company in a
shameful light;

         (j)      The commission by Executive of an act resulting in injury to
the business, property or reputation of the Company;

         (k)      The commission of an act by Executive in the performance of
his duties hereunder which amounts to negligence;

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         (l)      The refusal by Executive to perform, or substantial neglect
of, the duties assigned to Executive;

         (m)      Any violation of any statutory or common law duty of loyalty
to the Company; or

         (n)      Executive's breach of paragraphs 7, 8, 9 or 10 hereof.

         5.3  Disability. For purposes of this Agreement, the term Disability
means any physical or mental condition of Executive which, as determined by the
Company in its sole discretion, is expected to continue indefinitely and which
renders Executive incapable of performing any substantial portion of the
services contemplated hereunder. The mere effort by Executive to carry on the
duties of his employment shall not be sufficient if it is determined by the
Company, in its sole discretion, that Executive is not making a substantial
full-time contribution to the Company or Executive's actions as a whole are
detrimental to the Company.

         5.4    Effect Of Termination.

         5.4.1  Termination Without Cause. In the event of termination of this
Agreement and Executive's employment pursuant to Paragraph 5.1(a) hereof, all
rights and obligations of the Company and Executive hereunder shall terminate on
the date of such termination, subject to the following:

         (a) Executive shall be entitled to receive (subject to a right of
setoff or counterclaim by the Company) all Base Salary and benefits which shall
have accrued prior to the date of such termination. Notwithstanding anything to
the contrary, the obligation of the Company for the payment of Base Salary or
benefits for the remainder of the then-current Term shall terminate as of the
date of such termination;

         (b) Executive shall be entitled to receive severance pay in an amount
equal to Executive's actual Base Salary for the six (6) months immediately
preceding such termination (the "Severance Pay"). In the event Executive shall
not have been employed by Company for six months preceding such termination,
Executive shall nevertheless receive Severance Pay, calculated as Executive's
actual Base Salary for the number of actual months thus employed, plus an
additional sum of one-twelfth (1/12th) the Base Salary stated in Section 2.1 for
each additional month which when added to actual months thus employed shall
equal a total of six (6) months. Severance Pay shall be payable, at the
Company's option, in a lump sum distribution or in accordance with the Company's
regular pay cycle, and in either case shall be subject to withholding for
applicable federal, state or local laws or regulations; and

         (c) All rights of the Company or Executive which shall have accrued
hereunder prior to the date of such termination and all provisions of this
Agreement which are to survive termination of employment of Executive hereunder,
including those arising under Section 7, 8, 9 and 10 shall survive such
termination, and the Company and Executive shall continue to be bound by such
provisions in accordance with their terms. Notwithstanding anything to the
contrary, for the purposes of this section, the right to receive Base Salary or
other compensation for the remainder of the then-current Term of this Agreement
shall not survive.

         5.4.2  Termination For Cause. In the event of termination of this
Agreement and Executive's employment pursuant to Paragraph 5.1(b) hereof, all
rights and obligations of the Company and Executive hereunder shall terminate on
the date of such termination, subject to the following:

         (a)  Executive shall be entitled to receive (subject to a right of
setoff or counterclaim by the Company) all Base Salary and benefits which shall
have accrued prior to the date of such termination. Notwithstanding anything to
the contrary, the obligation of the Company for the payment of Base Salary or
benefits for the remainder of the then-current Term shall terminate as of the
date of such termination;

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         (b) In the event such termination shall occur prior to expiration of
the Initial Term, Company shall be entitled to recover, by set off or by any
other legal means, a pro rata share of the Sign-on Bonus and Relocation Benefits
paid to Executive, in an amount proportionate to the remainder of the Initial
Term rendered unfulfilled by reason of such termination; and

         (c) All rights of the Company or Executive which shall have accrued
hereunder prior to the date of such termination and all provisions of this
Agreement which are to survive termination of employment of Executive hereunder,
including those arising under Section 7, 8, 9 and 10 shall survive such
termination, and the Company and Executive shall continue to be bound by such
provisions in accordance with their terms. Notwithstanding anything to the
contrary, for the purposes of this section, the right to receive Base Salary or
other compensation for the remainder of the then-current Term of this Agreement
shall not survive.

         5.5 Death of Executive. This Agreement and all rights and obligations
of the parties hereunder shall terminate immediately upon the death of Executive
except that the Company shall pay to the heirs, legatees or personal
representative of Executive all compensation or benefits hereunder accrued but
not paid to the date of Executive's death.

         5.6  Right to Set Off. The Company shall have the right to offset
against any payment due Executive under this Agreement such amount as shall
compensate the Company, or its affiliates, for any losses, injury or other
damage sustained as a result of any act or omission to act of Executive
regardless of whether such conduct gave rise to such termination. In the event
that any such loss, injury or other damage cannot be ascertained with certainty
within fourteen days after the termination of Executive's employment, the
Company shall escrow all payments due Executive which are being set-off pursuant
to the provisions of this subsection in an interest-bearing account until the
amount of loss, injury or other damage can be ascertained, at which time any
amount in excess of such estimated loss, injury, or other damage will be paid,
with interest thereon as earned in such interest-bearing account, to Executive;
provided, however, payment of any such amount to Executive shall not, in any
manner or way whatsoever, release Executive from liability to the Company for
any amount of such loss, injury, or damage sustained by the Company as a result
of Executive's acts or omissions to act, regardless of such payments.

6.       TERMINATION BY EXECUTIVE.

         6.1 Executive's Right to Terminate. In addition to Executive's right to
terminate set forth in Section 4, Executive shall be entitled to terminate his
employment with the Company under this Agreement for any reason (other than upon
an event of default by the Company) upon (a) sixty (60) days prior written
notice to Company, or (b) immediately upon the occurrence of an event of default
by the Company.

6.2      Event of Default By Company.

         6.2.1 For purposes of this Section 6, an event of default with respect
to the Company shall mean:

         (a) Any failure by the Company to perform its obligations to Executive
under this Agreement and (if such failure can be cured) the failure by the
Company to cure such failure within thirty (30) days after written notice
thereof shall have been given to the Company by Executive;

         (b)  Company's filing a petition for relief under any chapter of Title
a11 of the United States Code or a petition to take advantage of any insolvency
laws of the United States of America or any state thereof;

         (c)  Company's making an assignment for the benefit of its creditors;

         (d)  Company's consent to the appointment of a receiver of itself or of
the whole or any substantial part of its property; or

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         (e) Company's filing a petition or answer seeking  reorganization under
the Federal Bankruptcy Laws or any other applicable law or statute of the United
States of America or any state thereof.

         6.2.2  For the  purposes  of this  Section  6, an event of  default  by
Company shall not occur merely if:

         (a) the Company should sell any or all of its assets, business units or
lines of business;

         (b)  the Company should acquire new assets, business units or lines of
business;

         (c)  the number of subordinates reporting to Executive shall increase
or decrease; or

         (d) Executive is asked to assume reasonable additional or different job
responsibilities not inconsistent with his expertise or job title.

6.3      Effect Of Termination.

         6.3.1  Termination Without Cause. In the event of termination of the
Agreement by Executive in accordance with the provisions of Section 6.1(a)
hereof, all rights and obligations of the Company and Executive hereunder shall
terminate on the date of such termination, subject to the following:

         (a) Executive shall be entitled to receive all Base Salary and benefits
which shall have accrued prior to the date of such termination. Notwithstanding
anything to the contrary, the obligation of the Company for the payment of Base
Salary or benefits for the remainder of the then-current Term shall terminate as
of the date of such termination;

         (b) In the event such termination shall occur prior to expiration of
the Initial Term, Company shall be entitled to recover, by set off or by any
other legal means, a pro rata share of the Sign-on Bonus and Relocation Benefits
paid to Executive, in an amount proportionate to the remainder of the Initial
Term rendered unfulfilled by reason of such termination; and

         (c) All rights of the Company or Executive which shall have accrued
hereunder prior to the date of such termination and all provisions of this
Agreement which are to survive termination of employment of Executive hereunder,
including those arising under Section 7, 8, 9 and 10 shall survive such
termination, and the Company and Executive shall continue to be bound by such
provisions in accordance with their terms. Notwithstanding anything to the
contrary, for the purposes of this section, the right to receive Base Salary or
other compensation for the remainder of the then-current Term of this Agreement
shall not survive.

         6.3.2  Termination For Cause. In the event of termination of the
Agreement by Executive in accordance with the provisions of Section 6.1(b)
hereof, all rights and obligations of the Company and Executive hereunder shall
terminate on the date of such termination, subject to the following:

         (a) Executive shall be entitled to receive all Base Salary and benefits
which shall have accrued prior to the date of such termination. Notwithstanding
anything to the contrary, the obligation of the Company for the payment of Base
Salary or benefits for the remainder of the then-current Term shall terminate as
of the date of such termination;

         (b) Executive shall be entitled to receive severance pay in an amount
equal to Executive's actual Base Salary for the six (6) months immediately
preceding such termination (the "Severance Pay"). In the event Executive shall
not have been employed by Company for six months preceding such termination,
Executive shall nevertheless receive Severance Pay, calculated as Executive's
actual Base Salary for the number of actual months thus employed, plus an
additional sum of one-twelfth (1/12th) the Base Salary stated in Section 2.1 for
each additional month which when added to actual months thus employed shall
equal a total of six (6) months. Severance Pay shall be payable, at the
Company's option, in a lump sum distribution or in accordance with the Company's
regular pay cycle, and in either case shall be subject to withholding for
applicable federal, state or local laws or regulations.

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         (c) All rights of the Company or Executive which shall have accrued
hereunder prior to the date of such termination and all provisions of this
Agreement which are to survive termination of employment of Executive hereunder,
including those arising under Section 7, 8, 9 and 10 shall survive such
termination, and the Company and Executive shall continue to be bound by such
provisions in accordance with their terms. Notwithstanding anything to the
contrary, for the purposes of this section, the right to receive Base Salary or
other compensation for the remainder of the then-current Term of this Agreement
shall not survive.

7.       NON-COMPETITION AND NON-SOLICITATION.

         7.1  Non-Competition and Non-Solicitation. Executive agrees that, so
long as he is employed by Company pursuant to this Agreement, and for a period
of twelve (12) months following expiration of the term or termination of this
Agreement, other than termination by Executive upon the occurrence of an event
of default by the Company, he will not, directly or indirectly, as a sole
proprietor, member of a partnership, stockholder, investor, officer or director
of a corporation, or as an employee, agent, associate, consultant or material
creditor of any person, partnership, corporation, joint venture, trust, business
trust, association, firm, business organization or other entity of any kind or
nature (hereinafter collectively referred to as "Entity") other than the
Company or in any other capacity do any of the following:

         (a) Executive will not, in any manner or way whatsoever, own, manage,
operate, finance, join, control, participate in the ownership, management,
operation or be connected with, in any manner or way whatsoever, perform
services for or otherwise carry on a business anywhere in the world where
NeoMedia does business or is negotiating to do business at the time of
termination which performs any of the services provided at any time by, or which
utilizes or sells any of the products, software or tools developed, sold or
owned at any time by, the Company or engages in business similar to the business
of the Company at any time during the term of this Agreement;

         (b) Executive will not, directly or indirectly, induce or attempt to
persuade any employee of Company to terminate such employment relationship in
order to enter into any relationship with such person or to enter into any such
relationship on behalf of any Entity whether or not such Entity is in
competition with Company or any of its affiliates;

         (c) Executive will not, directly or indirectly, solicit any business
related to the business conducted by Company from any clients, agencies of
clients, customers, or agencies of clients or customers of Company; and

         (d) Executive will not, directly or indirectly, perform services of any
kind or nature for any Entity which engages in or conducts any business that
competes with the business of the Company.

         For the purposes of this Agreement, the words "directly or indirectly"
as used in Section 7.1 herein shall include, but not be limited to, (i) acting
as an agent, officer, director, representative, consultant, independent
contractor, or employee of any Entity or enterprise, and (ii) participating in
any such competing Entity or enterprise as an owner, partner, limited partner,
member, joint venturer, material creditor or stockholder (except as a
stockholder holding less than five percent (5%) interest in a corporation whose
shares are traded on a national securities exchange or in the over-the-counter
market unless Executive controls such corporation, either alone or with others).

         7.2      Acknowledgment.

         (a) Executive acknowledges that the restrictions set forth in Section 7
hereof are reasonable in scope and essential to the preservation of the
Company's business and proprietary properties and interests, and that the
enforcement thereof will not in any manner preclude Executive, in the event of
Executive's termination of employment with the Company, from becoming gainfully
employed in such manner and to such extent as to provide a standard of living
for himself, the members of his family and those dependent upon him of at least
to the sort and fashion to which he and they have become accustomed and may
expect. Executive acknowledges that his expertise is of a special, unique,
unusual, extraordinary and intellectual character, which gives said expertise a
peculiar value, and that a breach by Executive of the provisions of this Section
7 cannot reasonably or adequately be compensated in damages in an action at law;
and such a breach of any of these provisions will cause the Company irreparable
injury and damage. Executive further

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acknowledges that he possesses unique skills, knowledge and abilities and that
competition by him, in violation of the provisions of this Section 7 would be
extremely detrimental to the Company. Accordingly, without limiting the right of
the Company to pursue any and all legal and equitable rights available to it for
violation of the covenants of this Section 7, the Company shall be entitled, in
addition to any other remedies it may have under this Agreement or otherwise, to
preliminary and permanent injunctive and other equitable relief, without the
necessity of posting any bond, to prevent a breach or to curtail any breach or
threatened breach of this Section 7 both while this Agreement is in force and
thereafter with respect to obligations continuing after the expiration or
termination of this Agreement; provided, however, notwithstanding any provision
herein contained to the contrary, no specification herein of a specific legal or
equitable remedy shall be construed as a waiver or prohibition against the
pursuing of other legal or equitable remedies.

         (b) Executive acknowledges that: (i) the provisions of this Section 7
are a material inducement to the Company to enter this Agreement; and (ii) if
the provisions of this Section 7 were not included in this Agreement, the
Company would not have entered this Agreement. It is the intent and
understanding of each party that if, in any action before any court or agency
legally empowered to enforce this covenant, any term, restriction, covenant or
promise is found to be unreasonable and for that reason unenforceable, then such
term, restrictions, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such a court or agency.

8.       CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY.

         8.1.  Confidential Information. "Confidential Information" means
information disclosed by the Company to Executive, or developed or obtained by
Executive during his employment by the Company, provided that such information
is not generally known in the business and industry in which the Company is or
may subsequently become engaged, relating to or concerning the business,
projects, techniques or methods of the Company, whether relating to financial
data, marketing, merchandising, selling or otherwise. Without limitation,
Confidential Information shall include all know-how, technical and financial
information, ideas, concepts and processes relating to the business of the
Company, whether now existing or hereafter developed, and all prices, customer
names and customer lists.

         8.2   Intellectual Property. The term "Intellectual Property" shall
mean all trade secrets, inventions, designs, developments, ideas, devices,
methods and processes (whether or not patented or patentable, reduced to
practice or included in the Confidential Information) and all patents and patent
applications related thereto, all copyrights, copyrightable works and mark works
(whether or not included in the Confidential Information) and all registrations
and applications for registration related thereto, all Confidential Information,
and all other proprietary rights contributed to, or conceived or created by,
Executive (whether alone or jointly with others) at any time during Executive's
employment by the Company that: (i) relate to the business or to the actual or
anticipated research or development of the Company; (ii) result from any work
that Executive performs for the Company; or (iii) are created using the
equipment, supplies or facilities of the Company or any Confidential
Information.

         8.3 Ownership. Executive shall promptly disclose to the Company all
Intellectual Property made or conceived by him alone or jointly with others,
from the date of this Agreement until Executive's employment with the Company is
terminated and within the two year period immediately following such
termination, relevant or pertinent, in any way, whether directly or indirectly,
to the business of the Company or resulting from or suggested by any work which
he may have done for the Company. Executive shall, at all times during his
employment with the Company, assist the Company in every proper way (entirely at
the Company's expense) to obtain and develop for the Company's benefit patents
on such Intellectual Property, whether or not patented; and shall do all such
acts and execute, acknowledge and deliver all such instruments as may be
necessary or desirable in the opinion of the Company to vest in the Company the
entire interest in such Intellectual Property.

         All Intellectual Property is, shall be and shall remain the exclusive
property of the Company. Executive assigns to the Company all right, title and
interest in and to the Intellectual Property; provided, however, that, when
applicable, Company shall own the copyrights in all copyrightable works included
in the Intellectual Property pursuant to the work-made-for-hire doctrine (rather
than by assignment), as such term is defined in the United States Code, Title
17, entitled "Copyrights". All Intellectual Property shall be owned by the
Company irrespective of any copyright notices or confidentiality legends to the
contrary which may have been placed on such works by Executive or by others.
Executive

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shall ensure that all copyright notices and confidentiality legends on all work
product authored by Executive shall conform to the Company's practices and shall
specify the Company as the owner for the work.

         8.4 Keep Records. Executive shall keep and maintain adequate and
current written records of all Intellectual Property in the form of notes,
sketches, drawings, computer files, reports or other documents relating thereto.
Such records shall be and shall remain the exclusive property of the Company and
shall be available to the Company at all times during Executive's employment and
shall be turned over to Company at the conclusion of such employment. Executive
shall keep all original documents and computer files at the office and the
password to Executive's computer shall at all times be known by the Company's
director of Human Resources.

         8.5 Further Assurances. During the period of Executive's employment by
the Company and at all times thereafter, Executive shall promptly execute any
and all declarations, assignments, applications and other instruments which the
Company shall deem necessary to apply for and obtain patents and copyright
registrations in any country or otherwise to protect the Company's interests in
the Intellectual Property.

9.       NON-DISCLOSURE AND NON-USE.

         9.1 Non-Disclosure. Executive acknowledges and agrees that Executive
may have access and contribute to information and materials of a highly
sensitive nature (including Confidential Information and Intellectual Property)
and that a purpose of this Agreement is to protect the legitimate business
interests of the Company therein. Executive agrees that, during the period of
Executive's employment by the Company and at all times thereafter, unless
Executive first secures the written consent of the Company, Executive shall not
use for Executive or anyone else, and shall not disclose to others, any
Confidential Information, except to the extent such use or disclosure is
required in the performance of Executive's assigned duties for the Company or by
law or court order. Executive further agrees to use Executive's best efforts and
utmost diligence to safeguard the Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft.

         9.2 Required  Disclosures. In the event that Executive is required by
law or court order to disclose any Confidential Information, Executive: (i)
shall notify the Company in writing as soon as possible, but in no event later
than twenty (20) business days prior to any such disclosure except as required
by court of law; (ii) shall cooperate with the Company to preserve the
confidentiality of such Confidential Information consistent with applicable law;
and (iii) shall use Executive's best efforts to limit any such disclosure to the
minimum disclosure necessary to comply with such law or court order.

10.      WRITINGS AND WORKING PAPERS.

         Executive covenants and agrees that any and all originals and copies of
all records, books, textbooks, letters, pamphlets, drafts, memoranda or other
writings of any kind written by him for or on behalf of the Company or in the
performance of Executive's duties hereunder, Confidential Information referred
to in Section 8 hereof, Intellectual property, all notes, records, including but
not limited to financial statements, calculations, letters, papers, records,
computer hardware, computer disks, computer print-outs, customer lists, customer
account records, documents, instruments, designs, programs, brochures, sales
literature, policy and procedures manuals, however such information might be
obtained or recorded (including electronic data storage systems), or any copies
thereof, or any information or instruments derived therefrom, and drawings or
any similar information of any type or description received by Executive or made
or kept by him of work performed in connection with his employment by the
Company and all computers, software and data and materials maintained in a
medium other than paper shall be and are the sole and exclusive property of the
Company and the Company shall be entitled to any and all copyrights thereon or
other rights relating thereto. Executive agrees to return to the Corporation
such information immediately upon termination of employment regardless of the
reason for termination and regardless of which party terminates, and to execute
any and all documents or papers of any kind or nature which the Company or its
successors, assigns or nominees deem necessary or appropriate to acquire,
enhance, protect, perfect, assign, sell or transfer its rights under this
Agreement. Executive also agrees that upon request he will place all such notes,
records, drawings and other items specified herein in the Company's possession
and will not take with him without the written consent of a duly authorized
officer of the Company any notes, records,

                                      E-11
<PAGE>

drawings, blueprints or other reproductions relating or pertaining to or
connected with his employment of the business, books, textbooks, pamphlets,
documents work or investigations of the Company. The obligations of this Section
shall survive the term of employment hereunder or the termination or expiration
of the Initial Term or any renewal term hereof.

11.      INJUNCTIVE RELIEF.

         Without limiting the right of the Company to pursue all other legal and
equitable rights available to them for violation of the covenants set forth in
Sections, 8, 9 and 10, it is agreed that such other remedies cannot fully
compensate the Company for such a violation and that the Company shall be
entitled to injunctive relief to prevent violation or continuing violation
hereof without the necessity of posting any bond; provided, however,
notwithstanding any provision herein contained to the contrary, no specification
in this Agreement of a specific legal or equitable remedy shall be construed as
a waiver or prohibition against the pursuing of other legal or equitable
remedies. It is the intent and understanding of each party that if, in any
action before any court or agency legally empowered to enforce this covenant,
any term, restriction, covenant or promise is found to be unreasonable and for
that reason unenforceable, then such term, restriction, covenant or promise
shall be deemed modified to the extent necessary to make it enforceable by such
a court or agency.

12.      GENERAL.

         12.1  Assignment. The rights and duties hereunder of Executive shall
not be assignable, without the express written consent of the Company. The
Company can assign this Agreement to any successor. This Agreement shall be
binding upon any successor to Company.

         12.2  Binding Effect. This Agreement shall be binding  upon the
parties hereto and their respective successors in interest, heirs and personal
representatives and, to the extent permitted herein, their assigns.

         12.3  Severability. If any provision of this Agreement or any part
hereof or application hereof to any person or circumstance shall be finally
determined by a court of competent jurisdiction to be invalid or unenforceable
to any extent, the remainder of this Agreement, or the remainder of such
provision or the application of such provision to persons or circumstances other
than those as to which it has been held invalid or unenforceable, shall not be
affected thereby and each provision of this Agreement shall remain in full force
and effect to the fullest extent permitted by law. The parties also agree that,
if any portion of this Agreement, or any part hereof or application hereof, to
any person or circumstance shall be finally determined by a court of competent
jurisdiction to be invalid or unenforceable to any extent, any court may so
modify the objectionable provision so as to make it valid, reasonable and
enforceable.

         12.4  Survival. Except as otherwise explicitly set forth herein,
Sections 5, 6 7, 8, 9, 10, 11, 12 and 13 shall survive any expiration or
termination of this Agreement.

         12.5 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally, (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, and (c) the next business day after delivery to a private courier
service, when delivered to a private courier service providing documented
overnight service, in each case addressed as follows:

    If to the Company:        NeoMedia Technologies, Inc.
                                   2201 Second Street, Suite 600
                                   Fort Myers, FL 33901
                                   Attention: Chairman of the Board

    If to Executive:          William F. Goins, III
                                   7670 Solimar Circle
                                   Boca Raton, FL 33433

                                      E-12
<PAGE>

         12.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior written or oral negotiations, representations, agreements,
commitments, contracts or understandings with respect thereto and no
modification, alteration or amendment to this Agreement may be made or shall be
effective unless the same shall be in writing and signed by both of the parties
hereto.

         12.7  Waivers. No failure by either party to exercise any of such
party's rights hereunder or to insist upon strict compliance with respect to any
obligation hereunder, and no custom or practice of the parties at variance with
the terms hereof, shall constitute a waiver by either party to demand exact
compliance with the terms hereof. Waiver by either party of any particular
default by the other party shall not affect or impair such party's rights in
respect to any subsequent default of the same or a different nature, nor shall
any delay or omission of either party to exercise any rights arising from any
default by the other party affect or impair such party's rights as to such
default or any subsequent default.

         12.8  Governing Law; Jurisdiction. For purposes of construction,
interpretation and enforcement, this Agreement shall be deemed to have been
entered into under the laws of the State of Florida, without regard to its
conflicts of laws rules or principles, and its validity, effect, performance,
interpretation, construction and enforcement shall be governed by and be subject
to the laws of the State of Florida.

         12.9 Jurisdiction and Venue. Any and all suits for any and every breach
of this Agreement shall only be instituted and maintained in any court of
competent jurisdiction in the State of Florida and the parties hereto consent to
the jurisdiction and venue in such court. The parties hereby waive the right to
bring any action in any other jurisdiction. Executive waives any claim Executive
may have that (a) Executive is not personally subject to the jurisdiction of any
state or federal court located in the State of Florida, (b) Executive is immune
from any legal process (whether through service or notice, attachment prior to
judgment, attachment made in execution of judgment, execution or otherwise) with
respect to Executive or Executive's property, (c) any such suit, action or
proceeding is brought in an inconvenient forum, (d) the venue of any such suit,
action or proceeding is improper, or (e) the provision of this section may not
be enforced in or by such court.

         In any such action or proceeding, to the fullest extent permitted by
applicable law, each of the parties hereby absolutely and irrevocably waives
personal service of any summons, complaint, declaration or other process and
hereby absolutely and irrevocably agrees that the service thereof may be made by
certified or registered mail directed to such party at its address set forth
herein.

         12.10  Assistance in Pending or Threatened Actions. Both before and
after termination of employment, Executive shall provide the Company (without
additional compensation) with assistance in any proceeding or threatened
proceeding in which the Company, or any affiliate, is or may be a party;
provided, however, that Executive shall only be required to give assistance with
respect to matters of which he has knowledge or experience.

         12.11 Execution and Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same agreement, and shall be
binding when one or more counterparts have been signed by, and delivered to,
each of the parties.

         12.12 Headings. Descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not, in any manner or way
whatsoever, affect the meaning or construction of any provision of this
Agreement.

         12.13 Certain Terminology. Except where the context otherwise requires,
references to "this Section" or words of similar import shall be deemed to refer
to the entire section and not a particular subsection and references to
"hereunder", "herein", "hereof" or words of similar import shall be deemed to
refer to the entire Agreement and not the particular section or subsection.

         12.14 Waiver of Construction Rule. Executive acknowledges and
represents that Executive has read and understands the provisions of this
Agreement, and has had the opportunity to consult with his legal advisor with
respect

                                      E-13
<PAGE>

to this Agreement and the provisions hereof. Accordingly, the rule of
construction that an ambiguous provision shall be construed against the party
drafting such provision shall not apply to this Agreement and the provisions
hereof.

13.      ACKNOWLEDGMENT.

         Executive acknowledges and agrees that Executive has fully read and
understands this Agreement, has had the opportunity to discuss this Agreement
with Executive's attorney, has had any questions regarding its effect or the
meaning of its terms answered to Executive's satisfaction, and, intending to be
legally bound hereby, has freely and voluntarily executed this Agreement.

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

NEOMEDIA TECHNOLOGIES, INC.                  Executive:

By:____________________________              _______________________________
Charles W. Fritz                             William F. Goins, III
Chairman of the Board
and Chief Executive Officer

                                      E-14
<PAGE>

                                    EXHIBIT A
                           NEOMEDIA STANDARD BENEFITS

HEALTH INSURANCE & PRESCRIPTION DRUG CARD
This P.P.O. plan will be effective on the first of the month following thirty
days of employment. The cost is $14.00 per pay period for single coverage and up
to $28.00 per pay period for family coverage. In network services are not
subject to a deductible. Pre-existing conditions are covered! Office visits are
$15 if you go to a panel provider. Prescriptions are $5.00 for generics.
Excellent well child care addendum.

DENTAL INSURANCE
There is no cost for this benefit. Single or Family coverage. Effective on the
same day as the health insurance. Benefit has numerous parts and the benefit
increases with continued dental visits.

SHORT TERM & LONG TERM DISABILITY INSURANCE
There is no cost for this benefit. Effective on the same day as the health
insurance. STD is 60% of salary or $500 per week max. Coverage up to 13 weeks.
LTD continues for up to $10,000 per month to age 65.

LIFE INSURANCE
There is no cost for this benefit. Effective on the same day as the health
insurance. Coverage is two times your annual base pay for life and four times
your base pay for accidental death and dismemberment.

LONG TERM CARE INSURANCE
There is no cost for this benefit for individual coverage. Effective on the same
day as the health insurance. You may be able to enroll your spouse, parents, or
grandparents in this benefit by paying their premium yourself. Coverage for
nursing home and/or home health care services.

401K PLAN
Effective on date of hire. You may contribute up to 25% of your income up to
$10,000 into a tax deferred investment plan. Contribution is 100% vested.

PAY PERIODS
Pay days are twenty-four (24) times per year. On the 15th of each month (pay for
the 1st through 15th) and on the last day of the month (pay for the 16th through
the last day of the month).

VACATION TIME OFF
New employees earn 3.333 hours per pay period. This increases to 5.000 hours per
pay after 3 years service and 6.666 hours per pay after 5 full years of service.

OTHER TIME OFF
Employees earn 3.333 hours per pay for sickness/illness, 24.000 hours per year
personal time off, and eight (8) holidays per year. There is no carry over and
this is a calendar year basis.

TUITION REIMBURSEMENT
Full time employees may receive up to $2,200/yr in reimbursement for tuition,
books and registration fees.

FLEXIBLE SPENDING ACCOUNTS
Employees may have pre tax income deferred for medical or dependent care
expenses.

EMPLOYEE ACTIVITIES

NeoMedia sponsors several activities for you and your family including company
picnics, weekend getaways, and professional sports outings.

                                      E-15<PAGE>

                                                                 EXHIBIT 10.3(B)

                                AMENDMENT NO. 1
                                     TO THE
                  TAX INDEMNIFICATION AND ALLOCATION AGREEMENT

          This AMENDMENT NO. 1 TO THE TAX INDEMNIFICATION AND ALLOCATION
AGREEMENT (the "Amendment"), dated as of February 9, 2000, by and between
Creative Computers, Inc., a Delaware corporation ("CCI"), uBid, Inc., a Delaware
corporation ("uBid"), and CMGI, Inc., a Delaware corporation ("CMGI").

                                    RECITALS

          A.  CCI and uBid have heretofore entered into the TAX INDEMNIFICATION
AND ALLOCATION AGREEMENT dated as of December 7, 1998 (the "Indemnification
Agreement").

          B.  Contemporaneously herewith, uBid, CMGI and Setec, Inc., a Delaware
corporation and a wholly-owned subsidiary of CMGI, will enter into an Agreement
and Plan of Merger and Reorganization pursuant to which Setec, Inc. will merge
into and with uBid, with uBid the surviving corporation (the "Merger").  As a
result of the Merger, uBid will become a wholly-owned subsidiary of CMGI.

          C.  uBid and CMGI desire to amend the Indemnification Agreement to
provide certain additional rights to uBid and CCI is willing to agree to such
amendment in consideration of the agreements contained herein.

          NOW, THEREFORE, in consideration of the agreements herein contained
and intending to be legally bound hereby, CCI, uBid and CMGI agree as follows:

          A.  Sections 7.2 and 7.3 of the Indemnification Agreement are deleted
and Section 7.1 of the Indemnification Agreement is amended to read as follows:

          7.1  Contest Rights
               --------------

               (a) Notice.  Whenever a party hereto (the "Notified Party")
                   ------
becomes aware of any Proceeding in connection with an Income Tax Liability (or
an issue related thereto) that could result in a redetermination or other
adjustment which could increase its liability or the liability of any member of
the CCI Group or uBid (a "Tax Item") (such Person, hereinafter an "Indemnitee")
for any Tax for which another party hereto (hereinafter the "Indemnitor") is or
may be liable under this Agreement (hereinafter an "Indemnity Issue"), the
Notified Party shall promptly give notice to each other party hereto of such
Indemnity Issue. The failure of any Notified Party to give such notice

                                       1
<PAGE>

shall not relieve the Indemnitor of its obligations under this Agreement except
to the extent such Indemnitor is actually prejudiced by such failure to give
notice.

          (b) General Control Rights.  Subject to the other provisions of this
              -----------------------
Section 7.1, with respect to any Proceeding in respect of an Income Tax Return
relating, in whole or in part, to an Indemnity Issue, the party who has
responsibility for filing such Income Tax Return (the "Responsible Party") shall
have the right to decide as between the parties hereto how such Proceeding is to
be dealt with and finally resolved with the appropriate taxing authority and
shall control all related Proceedings; provided, however, that if the
                                       --------  -------
Responsible Party is not the Indemnitor, the Responsible Party shall:

              (i) promptly deliver to the Indemnitor complete copies of all
written notices, requests, or other information received from any taxing
authority or judicial or similar body that relate to any Indemnity Issue;

              (ii) not provide any documents or other information to any taxing
authority or judicial or similar body that relate to the Indemnity Issue without
the Indemnitor's prior review;

              (iii) not submit any written response or other written work in
respect of any Indemnity Issue to any taxing authority or judicial or similar
body without allowing the Indemnitor to review and revise such written response
or other written work to the extent it relates to any Indemnity Issue (with any
disagreement as to the ultimate language used in any such written response or
other written work to be resolved by the Responsible Party);

              (iv) permit the Indemnitor and its representatives, at the
Indemnitor's sole expense, to participate fully in all conferences, meetings,
proceedings or judicial appearances with or before any taxing authority or
judicial or similar body (whether in person or by telephone) the subject matter
of which is or includes the Indemnity Issue;

              (v) consult in good faith with the Indemnitor with respect to all
aspects of any action or position to be taken by the Responsible Party that
relates to any Indemnity Issue and take the Indemnitor's interests into account;

              (vi) not adopt any position in any Proceeding that unfairly
compromises an Indemnity Issue so as to gain any advantage with respect to any
non-Indemnity Issue which is the subject of the same or any related Proceeding;

              (vii) if the Proceeding relates solely to one or more Indemnity
Issues, permit the Indemnitor to control such Proceeding in all respects; and

              (viii) except in the circumstances described below, not make any
settlement offer to any taxing authority, discuss any settlement offer made by
any taxing

                                       2
<PAGE>

authority, or accept any settlement offer made by any taxing authority, in each
case with respect to any Proceeding that is related, in whole or in part, to any
Indemnity Issue.

          (c) Settlements.  With respect to any settlement offer that relates,
              ------------
in whole or in part, to any Indemnity Issue, the following rules shall apply if
the Responsible Party is not the Indemnitor:

              (i) no settlement offer shall be made by the Responsible Party to
any taxing authority except in writing and in such case the amount offered with
respect to any Indemnity Issue shall be determined solely by the Indemnitor (as
indicated in a written notice to the Responsible Party);

              (ii) in the case of any settlement offer from a taxing authority
that is not in response to a written settlement offer by the Responsible Party,
the Responsible Party shall, if requested by the Indemnitor, make a written
settlement offer (i.e., a counter offer) to the taxing authority in accordance
                  ----
with paragraph (c)(i); and

              (iii) in the case of any settlement offer from a taxing authority
(other than a settlement offer described in paragraph (c)(ii)):

                    (A) the Responsible Party may make a written settlement
offer (i.e., a counter offer) to the taxing authority in accordance with
paragraph (c)(i);

                    (B) the Responsible Party may choose not to accept the
settlement offer from the taxing authority and instead choose to litigate the
issues reflected in such settlement offer, in which case the Responsible Party
shall litigate the Indemnity Issue, which litigation shall be conducted subject
to the rules of subsection (b) of this Section 7.1;

                    (C) the Responsible Party may notify the Indemnitor of the
Responsible Party's proposal that such settlement offer be accepted and entered
into and request the Indemnitor's consent to doing so and, upon (x) the written
consent to such settlement offer by the Indemnitor, (y) a failure of the
Indemnitor to respond to such proposal by the Responsible Party within thirty
days after receipt by the Indemnitor of such notice from the Responsible Party,
or (z) a failure of the Indemnitor to withhold its consent to such settlement
offer in accordance with subparagraph (D) below, the Responsible Party may
accept and enter into such settlement offer; or

                    (D) the Indemnitor may withhold its consent to a settlement
offer of which the Responsible Party has notified the Indemnitor in accordance
with subparagraph (C) above if the Indemnitor (x) notifies the Responsible Party
in writing within such 30-day period that the Indemnitor does not consent to the
proposed settlement, and (y) provides the Responsible Party with an opinion from
tax counsel selected by the Indemnitor and reasonably satisfactory to the
Responsible Party to the effect that there is a reasonable possibility that the
Responsible Party will prevail on the merits with respect to one or more
Indemnity Issues with an aggregate value of not less

                                       3
<PAGE>

than the lesser of $1 million or 25% of the amount at issue with respect to the
Indemnitor in a tribunal with jurisdiction to adjudicate the Indemnity Issues;

                    (E) if the Indemnitor provides the Responsible Party with
written notification withholding consent in accordance with subparagraph (D)
above, then:

                        (1) the Indemnitor shall fully indemnify and hold
harmless the Responsible Party from and against any and all liabilities (other
than liability for payments to the Indemnitor hereunder) for Taxes and other
costs and expenses (including, without limitation, additional attorneys' and
accountants' fees) over and above the payments that the Responsible Party would
have been liable for if the Responsible Party had entered into the proposed
settlement; and

                        (2) the Responsible Party shall select one of the
following alternatives:

                            (a) the Responsible party shall enter into a closing
agreement or other final resolution with the relevant taxing authority with
respect to all issues in accordance with the proposed settlement other than
Indemnity Issues (if doing so would not preclude litigation or other judicial
proceedings with respect to the Indemnity Issues), provided that (i) such
                                                   --------
closing agreement or other final resolution specifically provides that it does
not apply to the Indemnity Issues, and (ii) the Responsible Party agrees to give
the Indemnitor and its representatives control over the relevant Proceedings,
and the Responsible Party further agrees (y) to take such actions requested by
Indemnitor or its representatives to continue to contest (or, if permitted by
applicable law, to permit the Indemnitor to contest) the Indemnity Issues
(through administrative proceedings or litigation, which proceedings or
litigation shall be conducted pursuant to the provisions of this Section 7.1
using counsel selected by the Indemnitor to the fullest extent possible), and
(z) to permit the Indemnitor, if successful, to obtain the full monetary benefit
of a successful contest;

                            (b) the Responsible Party shall settle all issues
with the relevant taxing authority in accordance with the proposed settlement,
in which case each of the Responsible Party and the Indemnitor shall, with
respect to its share thereof, pay any additional liability for Taxes as provided
for in such proposed settlement, provided that (i) such settlement shall
                                 --------
specifically provide that it shall not preclude a refund claim from being filed
with respect to the Indemnity Issues and (ii) the Responsible Party agrees to
give the Indemnitor and its representatives control over the relevant
Proceedings, and agrees (y) to take such actions requested by the Indemnitor to
continue to contest (or, if permitted by applicable law, to permit the
Indemnitor to contest) the Indemnity Issues (through administrative proceedings
or litigation, which proceedings or litigation shall be conducted pursuant to
the provisions of this Section 7.1, using counsel selected by the Indemnitor to
the fullest extent possible) and (z) to permit the Indemnitor, if successful, to
obtain the full monetary benefit of such claim for refund; or

                                       4
<PAGE>

                            (c) the Responsible Party shall pay to the
Indemnitor, deposit with the taxing authority, or deposit in escrow any
additional liability for Income Taxes, interest and penalties as provided for in
such settlement to the extent that such liability relates to issues other than
Indemnity Issues, and the Responsible Party agrees to give the Indemnitor and
its representatives control over the relevant Proceedings, and further agrees
(y) to take such actions requested by the Indemnitor or its representatives to
continue to contest (or, if permitted by applicable law, to permit the
Indemnitor to contest) any Indemnity and non-Indemnity Issues (through
administrative proceedings or litigation, which proceedings or litigation shall
be conducted pursuant to the provisions of this Section 7.1, using counsel
selected by the Indemnitor to the fullest extent possible) and (z) to permit the
Indemnitor, if successful, to obtain the full monetary benefit of a successful
contest.

          (d) Payments to Stop Interest.  An Indemnitor may, at its election,
              --------------------------
pay to or deposit with the relevant taxing authority an amount of additional
Income Tax for which the Indemnitor would be liable hereunder if such payment or
deposit would have the effect of stopping the accrual of interest with respect
to such Income Tax liability.  The Indemnitor shall have no further
responsibility hereunder for interest with respect to any amount so deposited or
paid for so long as such deposit or payment stops the accrual of interest;
provided, however, that any such payment or deposit does not affect any right of
--------  -------
the Responsible Party or any other liability of the Indemnitor hereunder.  The
Responsible Party shall pay to the Indemnitor the amount of any Income Tax
received by (or credited to the account of) the Indemnitee as a result of a
determination that such payment or deposit resulted in an overpayment of Income
Tax with respect to the Indemnity Issues.

          (e) Termination.  Notwithstanding the foregoing provisions of this
              -----------
Section 7.1, the Indemnitee in its sole discretion by written notice to the
Indemnitor and the Responsible Party may refrain from contesting (through
administrative or judicial proceedings) any Indemnity Issue or may settle and
instruct the Responsible Party to settle any Indemnitee Issue with the relevant
Taxing authority without the consent of the Indemnitor, in which event each of
the Responsible Party and the Indemnitee shall be deemed to have unconditionally
waived its rights to indemnity with respect to such Indemnity Issue (and other
Indemnity Issues which are related to the Indemnity Issue which the Responsible
Party or Indemnitee refrained from contesting or settled pursuant to this
subsection (e)).  In such event, the Responsible Party shall, within ten days
after the Indemnitee has decided to refrain from or settle such contest,
reimburse the Indemnitor for all amounts previously advanced, deposited or paid
to the Responsible Party, Indemnitee or any taxing authority (or deposited
pursuant to the provisions of subsection (d) of this Section 4.02) with respect
to such Indemnity Issue (and other Indemnity Issues which are related to the
Indemnity Issue which the Responsible Party or Indemnitee has refrained from
contesting or settled pursuant to this subsection (e)), other than third-party
expenses incurred by the Responsible Party or Indemnitee in contesting the
Indemnity Issue, together with interest at the rate for underpayment of Income
Tax determined pursuant to Section 6621(a)(2) of the Code in effect from time to
time, from the date of payment to the date of reimbursement.

                                       5
<PAGE>

     B.  Section 5.3 through Section 5.6 of the Indemnification Agreement are
deleted.

     C.  Section 5.9 is added to the Indemnification Agreement to read as
follows:

     5.9  Section 355(e) Notice. Promptly after the effective time of the
          ---------------------
Merger, CCI shall file with the appropriate Internal Revenue Service Center a
notice under Section 355(e)(4)(E) of the Code substantially in the form of
Exhibit A to Amendment No. 1 to this Agreement.

     D.  Section 6.5 is added to the Indemnification Agreement to read as
follows:

     6.5  CCI Cooperation.
          ---------------

          (a) In the event of a Proceeding in connection with an Income Tax
Liability that could result in a redetermination or other adjustment which could
result in liability to uBid under this Agreement (a "uBid Tax Item"), CCI shall
cooperate with uBid in its defense of such liability.  Such cooperation shall
include, without limitation, upon reasonable notice: (i) promptly forwarding
copies of appropriate notices and forms or other communications (including,
without limitation, information document requests, revenue agent's reports and
similar reports, notices of proposed adjustments and notices of deficiency)
relating to a uBid Tax Item received from or sent to any Taxing Jurisdiction or
any other administrative, judicial or governmental authority, (ii) providing
copies of all relevant portions of Income Tax Returns relating to a uBid Tax
Item, together with relevant accompanying schedules and related workpapers,
document relating to rulings or other determinations by taxing authorities, and
such other records concerning the ownership and tax basis of property, or other
relevant information CCI or its Affiliates may possess with respect to a uBid
Tax Item, (iii) the provision of such additional information and explanations of
documents and information provided under this Agreement (including statements,
certificates and schedules delivered by either party) as shall be reasonably
requested by uBid or its designee, (iv) the execution of any document in form
reasonably acceptable to CCI that may be necessary or reasonably helpful in
connection with an Proceeding, including such waivers, consents or powers of
attorney as may be necessary for uBid to exercise its rights under Section 7.1
of this Agreement, and (v) the use of CCI's reasonable efforts to obtain any
documentation, affidavits or testimony from a governmental authority, a third
party or CCI's current of former shareholders, directors and employees that may
be necessary or reasonably helpful in connection with any of the foregoing.

          (b) Upon reasonable notice, CCI shall make its, or shall cause its
Affiliates to make their, employees and facilities available on a mutually
convenient basis, at uBid's expense, to provide explanation of any documents or
information provided pursuant to this Section 6.5.  Any information obtained by
uBid or its designee

                                       6
<PAGE>

under this Section 6.5 shall be kept confidential, except as otherwise
reasonably may be necessary in conducting any Proceeding.

          (c) CCI agrees to retain all Income Tax Returns, related schedules and
workpapers, and all material records and other documents required under Code
(S)6001 and the regulations promulgated thereunder (and any similar provision of
state, local, or foreign Income Tax law) existing on the effective date of
Amendment No. 1 to this Agreement, until the later of (x) the expiration of the
statute of limitations (including extensions) for the taxable periods to which
such Income Tax Returns and other documents relate and (y) the Final
Determination of any payments that may be required in respect of such taxable
periods under this Agreement.

          (d) In the event CCI fails to comply in all material respects with the
provisions of this Section 6.5 and, uBid shall have the right to engage a
nationally recognized accounting firm of its choice to gather such information
from CCI.  CCI agrees to permit such nationally recognized accounting firm full
access to all appropriate records or other information in the possession of CCI,
during CCI's normal business hours, and to promptly reimburse or pay directly
all costs and expenses in connection with the engagement of such accountants.
In addition, if CCI's failure to comply in all material respects with this
Section 6.5 cannot be remedied by the procedures described in the immediately
preceding sentence, and, as a result of such failure, uBid's ability to defend
against any uBid Tax Item is materially adversely affected, then CCI's right to
indemnification with respect to such uBid Tax Item, pursuant to Section 3.2
hereof, shall be forfeited.

     E.  Section 11.2 of the Indemnification Agreement is amended to read as
follows:

     11.2  Arbitrator.  The arbitrator shall be selected as provided in Article
           ----------
VIII of the Distribution Agreement, provided that the arbitrator shall be an
attorney or accountant who is generally recognized in the tax community as a
qualified and competent tax practitioner with experience in the tax area
involved in the issue or issues to be resolved.

     F.  Section 12.10 is added to the Indemnification Agreement to read as
follows:

     12.10.  Guarantee.  CMGI, as a primary obligor, unconditionally and
             ---------
irrevocably guarantees to CCI the due and punctual performance by uBid and any
assign of uBid of all of the obligations of uBid and any assign of uBid under
this Agreement (collectively, the "Obligations"), including Obligations arising
out of actions occurring on or prior to the effective date of Amendment No. 1 to
this Agreement.  If uBid or any assign of uBid fails to satisfy any such
Obligations in the manner and in the time so required, CMGI shall satisfy such
Obligations upon demand by CCI.  CMGI's guarantee shall be a continuing
guarantee and is irrevocable and unconditional and shall remain in full force
and effect until all Obligations hereunder are satisfied.  CCI shall have no
obligation to pursue any remedy or take any action against or in respect of uBid
or any assign of uBid prior to enforcing their rights under this Agreement
directly against CMGI.  In its

                                       7
<PAGE>

capacity as a guarantor, CMGI expressly waives all benefit or advantage of any
law wherever enacted or any defenses which may be available to it which may
affect the performance of its obligations pursuant to this Section 12.10;
provided, however, that the foregoing shall not be construed as a limitation on
--------  -------
CMGI's right to assert any defense, claim or counterclaim available to uBid
under this Agreement or to it as subrogee to uBid's obligations hereunder.

     G.  No Breach

     CCI acknowledges and agrees that neither the negotiation of the Merger
nor the consummation thereof constitutes a breach of uBid's obligations under
Article V of the Indemnification Agreement.  uBid and CMGI acknowledge and agree
that the provisions of this Paragraph G do not constitute a waiver by CCI of any
rights pursuant to Section 3.2 of the Indemnification Agreement or Section 12.10
of the Indemnification Agreement (as added by Paragraph F of this Agreement).

     H.  This Agreement shall be effective as of the Effective Date of the
Merger; provided, however, that this Agreement shall be void and of no effect if
        --------  -------
the effective time of the Merger does not occur on or before August 31, 2000.

     IN WITNESS WHEREOF, CCI, uBid and CMGI have caused this Amendment to be
signed by their respective officers, thereunto duly authorized as of the date
first written above.

                                 Creative Computers, Inc.

                                 By:   /s/ Theodore Sanders
                                     ----------------------------------
                                 Title:  Chief Financial Officer

                                 uBid, Inc.

                                 By:   /s/ Gregory K. Jones
                                     ----------------------------------
                                 Title:  Chief Executive Officer

                                 CMGI, Inc.

                                 By:     /s/ Andrew J. Hajducky III
                                     ----------------------------------
                                 Title:  Executive Vice President,
                                         Chief Financial Officer and
                                         Treasurer

                                       8
<PAGE>

                                   EXHIBIT A

                          SECTION 355(e)(4)(E) NOTICE

[To be filed with
the IRS Service Center
where CCI files its federal
income tax return, or such
other place as the IRS may
designate]

                     Re:  Creative Computers, Inc. , EIN ______________
                          Protective Section 355(e)(4)(E) Notice

          On June 7, 1999, Creative Computers, Inc. ("CCI") distributed to its
shareholders all of the outstanding stock held by CCI in uBid, Inc., EIN
___________ ("uBid") in a transaction to which IRC (S)355 applies (the
"Distribution").

          On ________, 2000, pursuant to an Agreement and Plan of Merger and
Reorganization by and among CMGI, Inc., Setec, Inc. and uBid dated as of
February ______, 2000, Setec, Inc, a wholly-owned subsidiary of CMGI, Inc.,
merged into and with uBid, with uBid surviving (the "Merger").  In the Merger,
shareholders of uBid exchanged their uBid shares for shares of CMGI, Inc., and
uBid became a wholly-owned subsidiary of CMGI, Inc.

          CCI believes, based upon an opinion of its tax advisors, that the
Distribution is not a distribution to which Section 355(e) applies because the
Distribution and the Merger are not part of a plan (or series of related
transactions) described in Section 355(e)(2)(A)(ii).  In order to commence the
statute of limitations with respect to the Distribution in the event the
Internal Revenue Service takes a contrary position, CCI provides this notice.

                                       [Signature]

                                       9

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