GENERAL MOTORS CORPORATION

                              TRANSACTION AGREEMENT


         THIS TRANSACTION AGREEMENT (Transaction Agreement) is made to be
effective as of the 8th day of June, 1998 (Effective Date) by and between
General Motors Corporation, with offices at 100 Renaissance Center, Detroit,
Michigan 48243 and FreeMarkets OnLine, Inc., with offices at 130 Seventh Street,
Suite 500, Pittsburgh, Pennsylvania 15222. General Motors Corporation and
FreeMarkets OnLine, Inc. are referred herein individually as a "Party" and
collectively as the "Parties."

         Terms used in this Transaction Agreement with initial capital letters
are defined in Exhibit A of this Transaction Agreement or herein or in the other
Agreements, as more fully set forth in Section 17.3 herein.

                                   BACKGROUND

         The Parties have entered into the Framework Agreement governing their
overall relationship regarding the provision to Customer by Supplier of Products
and Services. The Parties have also entered into a Software Licensing Agreement
and a Consulting Services Agreement, the terms of which are incorporated into
and made a part of the Framework Agreement. Customer wishes to be provided with,
and Supplier wishes to provide, access to a global online bidding system to be
used by Customer and associated consulting services including training, CBE
management services, technical operations services, call center services and
OnLine Market Making(TM) consulting services. This Transaction Agreement is
intended to address the specific understanding of the parties related to the
Project. The Parties intend that upon full execution of this Transaction
Agreement, the terms hereof shall be incorporated into and made a part of the
Agreements. The terms of this Transaction Agreement are intended to supplement
the Framework Agreement, the Software Licensing Agreement and the Consulting
Services Agreement by defining and clarifying the Parties' rights and
obligations with respect to the licensing by Supplier of Licensed Software to
Customer and the provision by Supplier to Customer of the Services described
therein.

                                  THE AGREEMENT

1.       SCOPE OF PROJECT

         1.1 GENERAL. Subject to the terms and conditions of this Transaction
Agreement, Supplier agrees to supply, and Customer agrees to license, access to
Supplier's online bidding



<PAGE>   2

system and use of Supplier's BidWare(R) Software, and purchase associated
services to be used by Customer's purchasing department in North America to
enable Supplier and Certified Buyers to conduct CBEs among selected Qualified
Bidders for procurement of goods and services for Customer. The services to be
provided by Supplier shall include training of Certified Buyers and Qualified
Bidders, CBE Management services, Technical Operations services, Call Center
services and OnLine Market Making(TM) consulting services. All CBEs will be
conducted at a time mutually agreeable to Customer and Supplier.

2.       SERVICES

         2.1 SERVICES. Beginning on the Effective Date, Supplier will provide
the integrated set of services set forth in this Article 2 to assist Customer in
effectively utilizing the System. These services will provide Buyers with tools
to work with Supplier to conduct CBEs among Qualified Bidders for specific
pieces of business. Fees for the services described in this Article 2 are set
forth in Exhibit D.

         2.2 TRAINING OF BUYERS. At times mutually agreed to by Supplier and
Customer, Supplier will provide training to Buyers designated by Customer
relating to Supplier's proprietary procedures for structuring online bids and
operating the BidWare(R) Software. All Buyer training will be held at Customer's
Sites and will be conducted by [*] Supplier personnel assigned by Supplier. Each
class will last for [*] hours during normal business hours and shall have the
agenda set forth in Exhibit B. Each class will run up to twice a day during
specific periods as mutually agreed to by Customer and Supplier. A maximum total
of [*] Buyers may attend each training class. Buyers who, as determined by
Supplier, are successfully trained will be certified by Supplier as being a
Certified Buyer. Each Certified Buyer will be given a unique user identification
number and password for the use of the BidWare(R) Software and access to the
System. The PartieS agree that only Certified Buyers will be permitted to use
the BidWare(R) Software and access the System. The certification by Supplier of
a Buyer in no way shall be interpreted as a guarantee that the Certified Buyer
is able to operate and understand the CBE process without error. Supplier shall
have no liability for any act or omission of a Buyer.

         2.3 SUPPORT IN VIEWING CBES. Subject to the terms of the license grant
set forth herein, Supplier will provide copies of BidWare(R) Software for
installation on Customer's personal computers for Certified Buyers in North
America, as requested in writing by Customer, at the price set forth in Exhibit
D. Neither Supplier nor Customer will integrate the BidWare(R) Software with
existing Customer computer systems or any other computer system, nor will the
BidWare(R) Software be used on any Customer networks or any other networks under
this Transaction Agreement, except for the network designated by Supplier.
Certified Buyers will be invited to use this software to view the market
activity of the CBEs as well as print out market results and audit reports. Each
Site which is provided with the BidWare(R) Software shall be outfitted by
Customer as set forth in Section 3.2. Customer shall have the option to purchase
a BidWare(R) PC (including CPU, monitor, modem and printer) through Supplier for
each copy of BidWare(R) Software supplied to Customer as set forth on Exhibit D
of this Transaction Agreement, or to purchase its own personal computers to run
the BidWare(R) Software.


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         2.4 SERVICES FOR CBES. Upon the request of a Certified Buyer to use the
System to set up a CBE and Supplier's consent to the same, Supplier will provide
the following services related to such CBE:

                  (A) ASSISTANCE IN STRUCTURING EVENTS. Supplier will provide
CBE Management Services to Certified Buyers to assist the Certified Buyer in
structuring the CBE. "Structuring" shall include lot setting, establishing
bidding parameters and other factors relevant to the CBE. Additionally, if
requested by Customer, Supplier will provide OnLine Market Making(TM) Consulting
to Certified Buyers at a time which is mutually agreeable to the Parties. The
CBE Management Services and the OnLine Market Making(TM) consulting services
outlined in this Section 2.4 will be billed on a variable basis and are not
included in the fixed cost of this Transaction Agreement. A description of the
OnLine Market Making(TM) consulting services and associated costs is attached
hereto as Exhibit D.

                  (B) INTERACTION WITH BIDDERS. Supplier will contact each
Bidder properly identified by Customer which Customer desires to participate in
a particular CBE. Supplier shall attempt to identify the appropriate Bidder
contact, and explain the bidding process to such person. Supplier will provide
the relevant Certified Buyer with reasonable feedback on the status of each
Bidder.

                  (C) DISTRIBUTION OF SOFTWARE TO QUALIFIED BIDDERS. Upon
written notification of the CBE, the names of the Bidders and agreement on the
time line for the CBE, as set forth in Section 3.1, Supplier will attempt to
have Bidder execute the Bidder Agreement and to license Supplier's BidWare(R)
Software to the Bidders. All licenses for the BidWare(R) Software to Bidders
shall be pursuant to the terms and conditions of Supplier's then standard
license provided with each copy of the BidWare(R) Software supplied to Bidders.
A copy of Supplier's current license is attached hereto as Exhibit G. A Bidder
shall be considered a Qualified Bidder upon execution of the Bidder Agreement
and acceptance of the terms of the license agreement. In the event that a Bidder
does not agree to the terms of the Bidder Agreement and/or the terms of the
license agreement, the Bidder shall not be permitted to participate in the CBE.
Upon Bidder's execution of the Bidder Agreement, Supplier shall ship the
BidWare(R) Software and the BidWare Manual to the Bidder, and issue the Bidder a
unique user identification number and password to be used for the CBE, subject
to Bidder's acceptance of the license agreement. Customer shall pay the license
fee for each copy of the BidWare(R) Software licensed to Bidders. Bidders shall
be responsible for providing their own personal computers to run the BidWare(R)
Software and for the installation of such software onto such personal computers.
Bidders shall also be responsible for the connection of such personal computers
to the telecommunication service used for the CBE.

                  (D) TRAINING OF QUALIFIED BIDDERS. Supplier shall use
commercially reasonable efforts to identify the correct contact for each
Qualified Bidder to be trained in the use of the BidWare(R) Software. Customer
agrees to provide reasonable assistance in identifying such person if requested
by Supplier. Supplier will train that contact over the phone using real time
"mock" bidding sessions to ensure that the Qualified Bidder is reasonably
comfortable with the BidWare(R) Software and the System. Supplier does not
guarantee that the Qualified Bidder personnel will be properly trained and
reserves the right to request that a different person be provided by the
Qualified Bidder.


<PAGE>   4

                  (E) CONDUCT OF THE CBE. The Supplier will load all relevant
CBE and technical parameters provided by Customer into the System. During the
term of this Transaction Agreement, Supplier will staff an operations center
located at Supplier's facility in Pittsburgh to handle all CBE related
activities as follows:

                  (a) Maintain a call center for Qualified Bidders to call with
questions before the CBE or with technical problems during the CBE;

                  (b) Conduct procedures for ensuring that Qualified Bidders are
prepared and present on bid-day;

                  (c) Respond in a timely fashion to Qualified Bidder issues
with software or connectivity;

                  (d) Respond to Qualified Bidder problems that might prevent
bidding with a secure "surrogate bidding" system;

                  (e) Close bidding only after a reasonable determination that
no Qualified Bidders experienced difficulties material to the bidding process;

                  (f) Communicate any changes or adjustments to all Qualified
Bidders;

                  (g) Provide reasonable assistance to facilitate resolution of
any issues between Certified Buyers and Qualified Bidders;

                  (h) Establish and maintain a secure virtual private network;

                  (i) Authenticate the identities of all Qualified Bidders and
Certified Buyers involved in each CBE; and

                  (j) Ensure that only authorized Qualified Bidders and
Certified Buyers have access to appropriate CBE information.

3.       CUSTOMER RESPONSIBILITY

         3.1 GENERAL. At least [*] days prior to a CBE, a Certified Buyer shall
inform Supplier of its desire to hold a CBE. Supplier and the Certified Buyers
shall agree on mutually acceptable time and date for the CBE and a time line for
conducting the CBE. The Certified Buyer shall provide Supplier, in writing, all
of the necessary information regarding the parts, materials or services to be
bid on in the CBE and identify the Bidders who will be invited to participate in
the CBE. The Certified Buyer shall also provide the applicable completed RFQ to
each Bidder and Supplier. The Certified Buyer will coordinate with the Supplier
CBE Management Staff to structure the online bid. Customer and all Certified
Buyers who use Supplier must agree to abide by the Rules and Procedures set
forth in the Bidder Agreement. Supplier and/or Supplier senior staff have the
right to de-certify any Certified Buyer who fails to abide by these rules.


<PAGE>   5

         3.2 SITE RESOURCES. Customer will designate a room at each major
location (i.e., North American Operations Headquarters) as the Supplier Room.
This room will contain an external analog phone line and a separate external
phone line for normal telephone usage. In addition, Customer will be responsible
for providing all audiovisual equipment for projecting electronic bids for a
larger audience if Customer desires (i.e., computer projector). During a CBE and
in preparation thereof, Customer shall ensure that appropriate facilities and
personnel are available to facilitate Certified Buyers' use of the System.

         3.3 PERSONNEL. Customer will designate a prime contact responsible for
all Supplier matters. This contact will have the authority to ensure that all
Customer commitments are met and will commit significant time to understanding
the Supplier process and system. Customer will also designate a "Buyer Feedback"
sponsor who will periodically attend Buyer training sessions, gather feedback on
these sessions, and assist the Supplier team in improving the training.

4.       LICENSES

         4.1 LICENSE. In consideration of the fees paid pursuant to this
Transaction Agreement, Supplier hereby grants, and Customer hereby accepts, a
non-exclusive, non-transferable: (i) limited license to have Certified Buyers in
North America access the System solely to conduct CBEs as set forth in this
Transaction Agreement, and (ii) limited license to have Certified Buyers in
North America use the BidWare(R) Software to work with Supplier to conduct CBEs
as set forth in this Transaction Agreement. Customer is not granted any right or
access to the Source Code and shall not, attempt to decompile, disassemble,
reverse engineer or use any other process to gain access to the Source Code.

         4.2 SYSTEM. The functionality provided to Customer by the System is
described in the Documentation provided by Supplier to Customer for the System
and the BidWare(R) Software. In addition, future versions of the System will
include the functionality as set forth in Exhibit E.

         4.3 AUTHORIZED USERS. Except for Certified Buyers, no other employees,
consultants, agents or other individuals of Customer or any other individuals or
entities are permitted to use the BidWare(R) Software or access the System.

         4.4 NUMBER OF USERS. Customer may only use and/or install the
BidWare(R) Software on one personal computer per copy of BidWare(R) Software
distributed by Supplier under this Transaction Agreement. Customer may, however,
make one copy of the BidWare(R) Software for back-up purposes. As the System
will be resident at Supplier's facility in Pittsburgh, Pennsylvania and
maintained and operated by Supplier, Customer may not make any copies of the
System, in whole or in part, for any purpose. During the term of this
Transaction Agreement, Customer agrees that it shall only use the BidWare(R)
Software in accordance with Supplier's specifications and instructions.


<PAGE>   6

5.       DELIVERY AND INSTALLATION

         5.1 BIDWARE(R) PCS. If Customer purchases BidWare(R) PCs from Supplier,
Supplier shall pre-load each BidWare(R) PC ordered from Supplier with one copy
of the BidWare(R) Software. Supplier will pre-test and ship each pre-loaded
BidWare(R) PC to Customer complete with modem, monitor and printer. If requested
by Customer in writing, Supplier will install the BidWare(R) PCs at Customer's
Site. Installation will be provided by Supplier's CBE Management personnel. In
the event that Customer installs the BidWare(R) PCs itself, Supplier will
provide telephone support by Technical Operations personnel. Customer shall be
deemed to have accepted a BidWare(R) PC if Customer does not report a failure of
such BidWare(R) PC during any thirty day period after its delivery. For purposes
of this Section 5.1, a "failure" means a failure caused solely by the BidWare(R)
PC which results in System unavailability.

         5.2 BIDWARE(R) SOFTWARE TO QUALIFIED BUYERS. In the event that Customer
supplies its own personal computers to run the BidWare(R) Software, Customer
shall be responsible for the installation of such software onto such personal
computers. Supplier shall provide telephone support to assist Customer with the
installation of the BidWare(R) Software. All personal computers provided by
Customer to run the BidWare(R) Software must, at a minimum, conform to the
specifications set forth on Exhibit H of this Transaction Agreement. All
personal computers used during a CBE shall be located in a Supplier Room.
Customer shall also be responsible for the connection of such personal computers
to the telecommunication service used for the CBE.

         5.3 BIDWARE(R) SOFTWARE TO BIDDERS. Supplier shall ship one copy of the
BidWare(R) Software to each Qualified Bidder for which Customer purchases a
BidWare(R) Software license pursuant to this Transaction Agreement. Each
Qualified Bidder shall be responsible for supplying their own personal computer
on which to load the BidWare(R) Software. Qualified Bidders shall be responsible
for loading the BidWare(R) Software on such personal computers. Supplier will
provide telephone support by Technical Operations personnel to assist Qualified
Bidders with the installation of the BidWare(R) Software.

6.       FEES AND COSTS

         6.1 FEES. In consideration of the Services and the licenses provided
pursuant to this Transaction Agreement, Customer agrees to pay a fixed fee as
well as certain variable charges, depending on need, as set forth in Exhibit D.
Invoices for the fees of whatever nature, including without limitation, license
fees, BidWare(R) PC fees, training fees, CBE Management fees, OnLine Market
Making consulting fees, Technical Operations fees, Call Center fees and/or
out-of-pocket expenses incurred during a month will be invoiced at the end of
such month. The first invoice will be sent by Supplier to Customer by the last
day of the first month after the Effective Date of this Transaction Agreement.
Monthly charges that have been in effect for less than a full calendar month
shall be prorated on the basis of a thirty (30) day month.

         6.2 CURRENCY. All fees and costs set forth in this Transaction
Agreement are stated in, and shall be paid in, the currency of the United
States.
<PAGE>   7

7.       MODIFICATIONS

         7.1 GENERAL. During the term of this Transaction Agreement, from time
to time, Supplier will modify the BidWare(R) Software and System, including
without limitation, correcting errors in the BidWare(R) Software or System. Such
error corrections or modifications may result in the creation of a new
version(s) of the BidWare(R) Software or System, under the same or one or more
different names (collectively, the Supplier Modifications). Supplier
Modifications shall in all cases be considered new versions of existing
BidWare(R) Software and/or System and not new Products. All rights to the
Supplier Modifications shall belong to Supplier. Exhibit E to this Transaction
Agreement contains a list of modifications currently scheduled by Supplier.

         7.2 AVAILABILITY. During the term of this Transaction Agreement,
Supplier shall [*] supply Customer, and Customer shall accept, Supplier's then
current [*] over [*] not later than [*].

         7.3 WARRANTY. Supplier Modifications to the BidWare(R) Software shall
be considered BidWare(R) Software for purposes of this Transaction Agreement;
provided, however, that all warranty provisions herein shall apply to each
Supplier Modification from the time such modifications are first delivered to
Customer. Supplier shall promptly deliver any Documentation, if any, relating to
the Supplier Modifications.

8.       TERM AND TERMINATION

         8.1 TERM. This Transaction Agreement and the Agreements shall continue
in force for an initial term of twelve (12) months from the Effective Date, and
shall be automatically renewed for one twelve (12) month term thereafter, and,
if still in effect, shall again automatically renew thereafter for a term that
begins on June 8, 2000 and ends on December 31, 2000. The foregoing automatic
renewals shall occur unless Customer provides written notice of its intent not
to renew this Transaction Agreement at least [*] days prior to the renewal date.
In the event that the term automatically renews from June 8, 2000 until December
31, 2000, as set forth above, the [*] fee set forth on Exhibit D shall be
prorated accordingly. This Transaction Agreement and the Agreements may be
extended for additional terms past December 31, 2000 if agreed to in writing by
both Parties, upon terms and conditions mutually agreed to in writing by the
Parties. [*].

         8.2 TERMINATION. This Transaction Agreement and the Agreements may only
be terminated or canceled prior to the expiration of the term upon the terms and
conditions set forth in Sections 19.1(E), 19.3, 19.4 (except for a change in
stock ownership of less than fifty percent (50%) or pursuant to an initial
public offering under the Securities Act of 1933, as amended), 19.5 or 19.6 of
the Framework Agreement.

         8.3 EFFECT OF TERMINATION. Upon the termination or expiration of this
Transaction Agreement, whether under this Article 8 or otherwise, Customer will
discontinue use of the BidWare(R) Software and access to the System, and both
parties shall return or destroy the other Party's Confidential Information as
set forth in Sections 12.9 and 12.10 of the Framework Agreement, as modified by
Sections 11.1, 11.2 and 17.3 of this Transaction Agreement.


<PAGE>   8

9.       OWNERSHIP

         9.1 SUPPLIER INTELLECTUAL PROPERTY. Customer shall have no rights or
interests in Supplier Intellectual Property except as described in this
Transaction Agreement. All right, title and interest in and to Supplier
Intellectual Property shall be and shall remain the sole property of the
Supplier or its third party subcontractors/licensors. Supplier hereby grants to
Customer a non-exclusive, non-transferable, royalty-free license to use the
Supplier Intellectual Property as required to effectuate the purposes of this
Transaction Agreement. Customer is not granted any other right to Supplier
Intellectual Property and shall not copy, modify, create derivative works,
sublicense, transfer, sell or otherwise use or dispose of the Supplier
Intellectual Property. Notwithstanding the above, Customer may make copies of
training materials provided by Supplier solely for the internal use of Customer.

         9.2 DERIVATIVE WORKS. With respect to any Derivative Works developed
under the Agreements or in the provision of the Products or Services, the
allocation of rights in such works will be as follows:

                  (A) All Intellectual Property rights in a Derivative Work
developed by Customer for which the preexisting work is Customer Intellectual
Property, shall be owned by Customer and shall be deemed to be Customer
Intellectual Property.

                  (B) All Intellectual Property rights in a Derivative Work
developed by Supplier, by Supplier in conjunction with Customer when the
preexisting work is Supplier Intellectual Property shall be owned by Supplier
and shall be deemed to be Supplier Intellectual Property.

         9.3 WORK PRODUCT. All Work Product shall be owned by Supplier. Customer
shall retain no rights in any Work Product.

10.      SUPPLIERS WARRANTIES

         10.1 WARRANTIES. Set forth below are certain exceptions to the
covenants, representations and warranties (collectively "Warranties") set forth
in the Framework Agreement and applicable Category Agreements.

                  A. All Warranties shall terminate upon the termination of the
         Transaction Agreement.

                  B. No Warranties are made with respect to Third Party
         Equipment, Software and Services.

                  C. Section 10.11 of the Framework Agreement is modified by
         deleting "necessary conversions."


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                  D. Section 12.15 of the Software Licensing Agreement is
         modified by deleting: "within the same time periods and under the terms
         set forth in Article 11 of this Software Licensing Agreement."

                  E. Section 10.5 of the Framework Agreement and Section 12.16
         of the Software Licensing Agreement are modified by making the illicit
         code/virus warranties only apply to the presence of illicit
         code/viruses on the BidWare(R) Software at the time of delivery by
         Supplier.

         10.2 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES MADE
IN THE AGREEMENTS, AS MODIFIED BY THIS TRANSACTION AGREEMENT, NEITHER PARTY
MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE SUBJECT MATTER OF
THIS TRANSACTION AGREEMENT, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

         10.3 REMEDY. If during the term of this Transaction Agreement, the
BidWare(R) Software fails to meet the Warranties, Supplier shall promptly repair
or replace the non-conforming BidWare(R) Software at no cost to Customer.
Supplier will not provide the foregoing warranty service if the nonconformity is
caused by malfunctions of hardware, non-Supplier software, modification of the
BidWare(R) Software not made by Supplier, by operator error, or by use of the
BidWare(R) Software that is not in accordance with the operating instructions
for the BidWare(R) Software.

11.      CONFIDENTIALITY

         11.1 CONFIDENTIAL INFORMATION OF SUPPLIER. Section 12.2 of the
Framework Agreement shall apply to this Transaction Agreement. However, Customer
agrees that: (i) the BidWare(R) Software, (ii) all training materials and
Documentation which are marked as "Confidential" and provided by Supplier to
Customer, and (iii) all pricing, cost information, business affairs information
and other information related to Supplier's business learned during a bench
marking study; shall be considered Supplier Confidential Information without the
approval of the Customer Project Manager and that Supplier will not generate a
written report describing such material.

         11.2 USE AND RETURN OF SUPPLIER CONFIDENTIAL INFORMATION. Section 12.10
of the Framework Agreement shall apply to this Transaction Agreement. However,
Section 12.10 is modified by deleting: ", to the extent Customer no longer needs
the Supplier Confidential Information to exercise its rights under the
Agreements" from Section 12.10(i), and deleting all of Section 12.10(iii) and
the sentence which follows 12.10(iii).

         11.3 AGREEMENT. Both parties shall have the right to disclose the
existence of this Transaction Agreement but not the terms of this Agreement
unless such disclosure is approved in writing by both parties prior to such
disclosure or such terms are required to be disclosed by governmental
authorities.


<PAGE>   10

12.      LIMITATION OF LIABILITY.

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL OR
PUNITIVE LOSSES, DAMAGES OR EXPENSES (INCLUDING LOSS OF PROFITS, SAVINGS,
PENALTIES, FINES, LATE-PAYMENT CHARGES, INTEREST, COMPETITIVE ADVANTAGE,
GOODWILL, BUSINESS ADVANTAGE, GOODWILL, BUSINESS INTERRUPTION OR INDEMNITY
HEREUNDER), EVEN IF IT HAS BEEN ADVISED OF THE POSSIBLE EXISTENCE THEREOF.

EITHER PARTY'S LIABILITY FOR DAMAGES OF ANY KIND ARISING OUT OF THIS TRANSACTION
AGREEMENT AND THE AGREEMENTS, INCLUDING WITHOUT LIMITATION ANY AMOUNTS DUE
PURSUANT TO ARTICLE 15 OF THE FRAMEWORK AGREEMENT, SHALL BE LIMITED TO $[*].
NOTWITHSTANDING THE LIMITATION OF LIABILITY SET FORTH IN THE PRECEDING SENTENCE,
SUPPLIER'S LIABILITY FOR DAMAGES OF ANY KIND ARISING OUT OF SECTIONS 15.2(A),
AND 15.2(B) OF THE FRAMEWORK AGREEMENT (INFRINGEMENT), AND CUSTOMER'S LIABILITY
FOR DAMAGES OF ANY KIND ARISING OUT OF SECTIONS 15.1(A) AND 15.1(B) OF THE
FRAMEWORK AGREEMENT (INFRINGEMENT), SHALL BE LIMITED TO $[*]. THE FOREGOING
LIMITATIONS ON LIABILITY SHALL NOT APPLY TO FEES WHICH ARE OUTSTANDING UNDER
THIS TRANSACTION AGREEMENT.

13.      CONTRACT ADMINISTRATION

         13.1 DESIGNATION OF CONTRACT AND PROJECT MANAGERS. For purposes of
Article 3 of the Framework Agreement, a Party may assign the same individual to
be the Corporate Contract Manager and Project Manager. The Corporate Contract
Manager/Project Manager for the Parties shall be as follows:

Corporate Contract Manager:

Customer: James Scotti

Supplier: Glen Meakem

Project Manager:

Customer: Duane Bolinger

Supplier: Robert Stevens

         A Party may change its Corporate Contract Manager and/or Project
Manager at any time in their sole discretion and shall provide notice of such
change to the other Party within ten (10) business days of such change.


<PAGE>   11

14.      PERSONNEL

         14.1 GENERAL. Each party shall choose personnel in their sole
discretion to perform their respective services and obligations under this
Transaction Agreement. In the event that a Party is not satisfied with the
performance, actions or inactions of an employee of the other Party, the Party
shall inform the other Party of such dissatisfaction. The other Party shall then
take commercially reasonable action to investigate the performance, inaction or
action of such employee and shall take appropriate measures, if any, as
determined by such other Party.

         14.2 [*]. Supplier agrees that in the event that Customer [*] that
includes [*] required for Customer's performance under this Transaction
Agreement, such [*] may [*] provided that: (i) all [*] by the [*] shall be
provided by [*], (ii) the [*] has [*], and (iii) the [*] is not a competitor of
Supplier in [*].

15.      SUPPLIER SERVICES

         Supplier agrees that for a period lasting from the Effective Date to
the earlier of: (i) June 30, 2000, or (ii) the date this Transaction Agreement
terminates; as long as Customer is not in default under the terms of this
Transaction Agreement, Supplier shall not provide the services provided to
Customer hereunder to the automobile operations of the following
manufacturers:[*].

16.      INSURANCE

         16.1 LIMITS. The minimum limits of liability of insurance which
Supplier must maintain, as set forth in Section 17.1 of the Framework Agreement,
are modified as follows:

         (i)      The limits of liability for the insurance set forth in Section
                  17.1(B) (General Commercial) shall be [*] per occurrence.
         (ii)     The limits of liability for the insurance set forth in Section
                  17.1(C) (Automobile) shall be [*] per occurrence.
         (iii)    The limit for the insurance set forth in Section 17.1(D)
                  (Errors and Omissions) shall be [*] per occurrence.

         16.2 LOSS PAYEES. Supplier is not required to name any other entity,
including without limitation, Customer, as a loss payee under any of Supplier's
insurance policies.

17.      GENERAL

         17.1 INTERNATIONAL USE. As set forth in Exhibit F, Supplier and
Customer may agree to begin a pilot international program upon the execution by
both Parties of a separate mutually agreeable Transaction Agreement relating to
such project.

         17.2 FORCE MAJEURE. The Force Majeure provision set forth in Section
25.3 of the Framework Agreement shall apply to this Transaction Agreement,
provided that the second and third sentences of such section shall not apply to
this Transaction Agreement.

         17.3 ORDER OF PRECEDENCE. This Transaction Agreement incorporates the
terms of the Framework Agreement, the Software Licensing Agreement and the
Consulting Agreement. The Parties agree that any inconsistency, ambiguity or
conflict between or among the terms and


<PAGE>   12

conditions of this Transaction Agreement and the Agreements be resolved
according to the order of precedence set forth in Section 1.3 of the Framework
Agreement. In furtherance of, and not in limitation to the generality of the
preceding, the following provisions shall not apply to this Transaction
Agreement:

         (A) Framework Agreement: Sections 1.2, 1.4, 1.5, 1.6, 1.7, 2.6, 4.1,
4.2, 4.3, 5.2, 5.6(C), 5.8(A)(3), 8.1(A), 8.3, 9.4, 9.8, 10.7 and 10.13, Article
11, Sections 12.13, 12.17, 13.2, 13.3(B) (iii), 13.3(C), 13.4, 13.5, 13.6, 13.7
and 13.9, Article 14, Sections 15.7, 19.1(A) - (D), 19.7, 19.9, 20.3, and
22.6(A) (source code), Article 23, and Section 25.17.

         (B) Software Licensing Agreement: Sections 3.3, 3.4, 3.5, 4.1, 4.3,
5.1, that portion of Section 6.1(A) which states ", from which Customer may make
copies for its use consistent with all limitations of this Software Licensing
Agreement and the applicable Transaction Agreement," Sections 6.2, 7.3, Articles
8 and 9, Sections 10.1(B) (CD-ROMs), 12.4, 12.9, 12.10 and 12.14, and Articles
11, 13 and 14.

         (C) Consulting Services Agreement: Section 3.4.

         In addition, the Parties agree that any inconsistency, ambiguity or
conflict between the definitions attached to this Transaction Agreement in
Exhibit A and any other definitions contained in the Agreements or elsewhere
will be resolved in favor of the definitions attached to this Transaction
Agreement in Exhibit A.

         17.4 ASSIGNMENT. Neither party may assign any of its rights or
obligations hereunder or the Agreements without the prior written consent of the
other party, which consent shall be in the other Party's sole discretion.

         17.5 COMPETITIVE ASSESSMENT. Subsections 5.6(A) and (B) of the
Framework Agreement shall apply to this Transaction Agreement. Notwithstanding
anything to the contrary in the foregoing: (i) Customer shall conduct, or have
conducted on its behalf, no more than one benchmark or competitive assessment
per year period after the initial one-year period, (ii) Supplier shall only be
required to provide such information in such frequency, methodology and detail
which is reasonably required by Customer, and (iii) the bench marking company
performing the benchmark or competitive assessment shall execute a
non-disclosure agreement substantially in the form set forth in Exhibit I prior
to its conduct of such assessment. Changes to the non-disclosure agreement may
only be made with the written consent of Supplier.

         17.6 ENTIRE AGREEMENT. Section 25.14 of the Framework Agreement shall
apply to this Transaction Agreement. Additionally, the Parties agree that
Section 14(c) of the purchase order TCS26983, dated October 31, 1997, and
Section 4 of Attachment 1 thereto, shall be superseded in their entirety by
Sections 4 and 9 of this Transaction Agreement, and that Section 12 of this
Transaction Agreement shall apply to such purchase order, except that the
references therein to Sections 15.2 (A) and (B) of the Framework Agreement shall
be deemed to refer to Sections 14(a) and (b) of such purchase order. The Parties
also agree that such purchase order shall not apply to any goods or services
provided under this Transaction Agreement or any future Transaction Agreement
between the Parties.


<PAGE>   13

         17.7 PUBLICITY. Section 25.15 of the Framework Agreement shall apply to
this Transaction Agreement. Notwithstanding anything to the contrary in the
foregoing, Supplier may use Customer's name as part of a general customer list
used by Supplier in promotional material and business presentations.

         17.8 GOVERNING LAW; VENUE; SERVICE OF PROCESS. This Transaction
Agreement and the Agreements are to be construed according to the laws of
Michigan, without giving effect to the principals of conflicts of laws. Any
action or proceedings by Customer against Supplier shall be brought in the
federal or state courts located in Pittsburgh, Pennsylvania, and any action
brought by Supplier against Customer shall be brought in federal or state courts
in Detroit, Michigan.

         IN WITNESS WHEREOF, this Transaction Agreement has been executed by the
Parties as of the Effective Date.

SUPPLIER                                             CUSTOMER

By: /s/ Glen T. Meakem                      By: /s/ James Scotti
   ----------------------------                -------------------------------


Title: Chief Executive Officer              Title: Commodity Manager
      -------------------------                   ----------------------------



<PAGE>   14


                                    EXHIBIT A

                                   DEFINITIONS

1.       "Bidder" shall mean a supplier of goods and/or services who will
         participate in a CBE to supply such goods and/or services to Customer.

2.       "Bidder Agreement" shall mean the OnLine Bidder Agreement for General
         Motors/FreeMarkets CBE attached hereto as Exhibit C. Such agreement may
         be revised from time-to-time in Supplier's discretion.

3.       "BidServer(R) Software" shall mean the server software used in
         conjunction with online bidding auctions which is proprietary to
         Supplier.

4.       "BidWare(R) Software" shall mean the software used in conjunction with
         online bidding auctions which is proprietary to Supplier. The version
         of BidWare(R), v 2.2 in general use as of the Effective Date supports
         multiple Qualified Bidders bidding in real time, allowing each
         Qualified Bidder to view the anonymous bids of all other Qualified
         Bidders.

5.       "BidWare Manual" shall mean the user manual for the BidWare(R)
         Software.

6.       "BidWare(R) PCs" shall mean the personal computers configured to
         operate the BidWare(R) Software which may be purchased by Customer to
         be placed at various Customer Sites in North America to allow viewing
         of CBEs, printing of results, reports, and printing of audit reports.

7.       "Buyer" shall mean an employee of Customer located in North America
         whose primary function entails the procurement of materials from
         suppliers.

8.       "CBE" shall mean a Competitive Bidding Event using the System as set
         forth in this Transaction Agreement.

9.       "Certified Buyer" shall mean a Buyer who, as determined by Supplier,
         has successfully completed the Buyer training as set forth in Section
         2.2 of this Transaction Agreement.

10.      [*]

11.      "Customer" shall mean General Motors Corporation, Delphi Automotive
         Systems and all 100% owned subsidiaries of General Motors Corporation.

12.      "Documentation" shall mean the published documentation for the System
         and BidWare(R) Software provided by Supplier to Customer.

13.      "Project" shall mean the implementation of the global online bidding
         System provided by Supplier to be used by Buyers in North America.


<PAGE>   15

14.      "Qualified Bidder" shall mean a Bidder chosen by Customer to
         participate in a CBE which has executed Supplier's then standard Bidder
         Agreement.

15.      "RFQ" shall mean a written request for quote which shall contain all
         relevant information required for the CBE including, without
         limitation, detailed specifications of the parts, material(s) or
         services, the quantity requirements and the term of the commitment.

16.      "Site" shall mean, when referring to Customer's facilities, a Customer
         facility located in North America, and when referring to Supplier's
         facilities, shall mean Supplier's facility located in Pittsburgh,
         Pennsylvania.

17.      "Source Code" shall mean the BidWare(R) Software and System (and
         components thereof), expressed in a form suitable for modification by
         humans.

18.      "Supplier" shall mean FreeMarkets OnLine, Inc.

19.      [*]

20.      "Supplier Room" shall mean a room designated by Customer which will
         contain an external analog telephone line and a separate external
         telephone line for normal telephone usage. The Supplier Rooms shall be
         used by Customer for the viewing of CBEs using the BidWare(R) Software.

21.      "Supplier Technical Operations Staff" shall mean personnel who run and
         maintain the System, as well as provide technical support to BidWare(R)
         licensees, Customer and Bidders.

22.      "System" shall mean the Supplier global online bidding system provided
         by Supplier. The System includes BidServer(R) Software installed on
         Supplier's secure hardware in its Pittsburgh offices, and hardware
         located at Supplier's Pittsburgh offices, including T1 lines, routers
         and servers.


<PAGE>   16



                                    EXHIBIT B

                                 TRAINING AGENDA

         ACTIVITY                                             TIME
         --------                                             ----

         1.       Principles of OnLine Market Making(TM)       [*]
                  [*]

         2.       Communicating with Suppliers                 [*]
                  [*]

         3.       Structuring OnLine Competitive               [*]
                  Bidding Events (CBEs)
                  [*]

         4.       Using BidWare(R) for Buyers and the          [*]
                  FreeMarkets(TM) System

         5.       Structuring and executing a mock CBE         [*]

                  TOTAL TIME                                   [*]



<PAGE>   17


                                    EXHIBIT C

                                       [*]


<PAGE>   18





                                    EXHIBIT D


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
FEE ELEMENT             DESCRIPTION                         RATE                     NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                                 <C>                      <C>
System Access License   Unlimited North American use of     [*]                      o        To be used by any Certified
                        the then current System.                                              Buyers in North America using
                                                                                              Qualified Bidders from anywhere
                                                                                              in the world

                                                                                     o        Will be billed at [*]
-------------------------------------------------------------------------------------------------------------------------------
BidWare PCs             PC, modem, monitor, printer at      [*]                      [*]
                        select Customer buying sites,
                        fully configured to run BidWare(R)
                        Software, exclusive of license
                        fee for BidWare(R) Software.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>   19


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
FEE ELEMENT             DESCRIPTION                         RATE                     NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                                 <C>                      <C>
BidWare(R) Software     License for each copy of            [] for each BidWare(R)    Cost covers the following:
License                 BidWare(R) Software for             Software license shall
                        Buyers or Suppliers.                begin when  shipped,      o        Software license
                                                            and shall last for the
                                                            earlier of [*] from       o        Packaging
                                                            date of shipment or
                                                            the termination of        o        Shipping
                                                            this Transaction
                                                            Agreement, regardless     o        Documentation
                                                            of whether such
                                                            software is being used    o        Establishment and maintenance
                                                            by a Buyer or                      of secure user I.D.s
                                                            Qualified Bidder. [*]
                                                            for BidWare(R)Software,
                                                            Customer shall notify
                                                            Supplier in writing
                                                            whether or not
                                                            Customer wishes such
                                                            BidWare(R)Software
                                                            license to be  renewed
                                                            [*]. All license fees
                                                            for BidWare(R)Software
                                                            are invoiced to
                                                            Customer upon initial
                                                            shipment or renewal.
-------------------------------------------------------------------------------------------------------------------------------
Network & Telecom       Global network connection fees      Network access fee -     o        Network fees [*]
charges                 and telecommunications fees         [*]
                        charged by providers                                         o        Telecom will be [*] and may
                                                            Network connect time -            adjust over time
                                                            [*]
                                                                                     o        Providers to be chosen by
                                                            Telecom - estimated [*]           Supplier
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>   20



<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
FEE ELEMENT             DESCRIPTION                         RATE                     NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                                 <C>                      <C>
Direct Labor            OnLine Market Making Consulting     [*]                      o        In-depth consulting to
                                                                                              formulate [*]

                                                                                     CONSULTING TOPICS:

                                                                                     o        Structuring RFQs for [*]

                                                                                     o        [*] competition and ease of
                                                                                              award

                                                                                     o        Application of online markets
                                                                                              to [*]

-------------------------------------------------------------------------------------------------------------------------------
                                                                                     EXAMPLES OF CONSULTING:

                                                                                     o         Presentation to Creativity
                                                                                               Teams: Supplier/Supplier
                                                                                               personnel present the goals
                                                                                               and process of online market
                                                                                               making, answer questions and
                                                                                               help team identify projects
                                                                                               that would benefit from OnLine
                                                                                               Market Making(TM).

                                                                                     o         Assist Certified Buyers in
                                                                                               structuring events: Help
                                                                                               Certified Buyers answer
                                                                                               strategic questions regarding
                                                                                               specific events: elements of
                                                                                               total cost, bidding scenarios,
                                                                                               etc.

                                                                                     o         Communications: Assist Certified
                                                                                               Buyers in communicating with
                                                                                               Qualified Bidders in difficult
                                                                                               or unusual situations.
-------------------------------------------------------------------------------------------------------------------------------
                                                                                     o         Structuring complex or
                                                                                               innovative CBEs:  Help Certified
                                                                                               buyers determine [*].
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>   21

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
FEE ELEMENT             DESCRIPTION                         RATE                     NOTES
-------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                                 <C>                      <C>
                        Training                            [*]                      o         Structured training programs
                                                                                               for groups of Buyers

                                                                                     o         Time spent preparing training
                                                                                               materials


-------------------------------------------------------------------------------------------------------------------------------
                        CBE Management                      [*]                      o         Work with buyers [*]

                                                                                     o         Manage the CBE scheduling with
                                                                                               Qualified Buyers
-------------------------------------------------------------------------------------------------------------------------------
                        Technical Operations                [*]                      o         Manage and maintain the System

                                                                                     o         Troubleshoot Qualified Bidder
                                                                                               connection problems

                                                                                     o         On-site and telephone
                                                                                               installation services and
                                                                                               support for Customer and
                                                                                               Qualified Bidders
-------------------------------------------------------------------------------------------------------------------------------
                        Call Center                         [*]                      o         Train Qualified Bidders and
                                                                                               explain CBE and bidding process

                                                                                     o         Provide first line support to
                                                                                               Certified buyers for basic
                                                                                               BidWare(R) Software and CBE
                                                                                               questions
-------------------------------------------------------------------------------------------------------------------------------
                        All costs set forth above for       As incurred              o         Direct billing for travel to
                        Direct Labor are exclusive of                                          and from Customer locations
                        out-of-pocket expenses, which
                        will be billed separately
                        as incurred pursuant to the
                        terms of this Transaction
                        Agreement.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


All fees incurred related to Products, licenses or Services provided by Supplier
under this Transaction Agreement shall be billed to, and paid by, Customer
pursuant to the standard payment terms set forth in the Agreements as modified
by this Transaction Agreement.

All costs set forth above for Direct Labor, whether to Customer or any other
party will be billed in full day increments for, in each case, an eight hour or
greater day of service dedicated to Customer. During the term of this
Transaction Agreement, Customer agrees [*] for each of the following: (i) a CBE
Management person, (ii) a Technical Operations person, and (iii) a Call Center
person. CBE Management, Technical Operations and Call Center personnel shall be
provided on a 1:1:1 ratio for any given CBE.


<PAGE>   22



                                    EXHIBIT E

                            FUTURE VERSIONS OF SYSTEM

Supplier's plan for future versions of the System includes the following
additional functionality:

ENHANCEMENT                RELEASE DATE                       DESCRIPTION

[*]                        July 1998                          [*]

[*]                        July 1998                          [*]

[*]                        August 1998                        [*]

[*]                        August 1998                        [*]

[*]                        November 1998                      [*]


Customer understands and agrees that such enhancements are not being
specifically developed for Customer, but will be released as general
enhancements to Supplier's System and may be implemented by Supplier in the
services offered to the general public or any other customer. Customer is not
paying for the enhancements set forth above and will have no ownership interest
in them or their Intellectual Property. Access to such enhancements shall be
licensed to Customer as part of the System pursuant to the license set forth in
Article 4 of this Transaction Agreement at no additional charge.


<PAGE>   23



                                    EXHIBIT F

                          INTERNATIONAL IMPLEMENTATION

What follows are preliminary terms for possible expansion of the relationship of
the Parties for conducting international CBEs. The terms set forth herein are
preliminary and are subject to change. If the Parties agree to expand the scope
of their relationship to include international CBEs, the actual terms and
conditions for such relationship shall be set forth in mutually agreeable
additional Transaction Agreement(s).

<TABLE>
<CAPTION>
POSSIBLE          POSSIBLE                                    POSSIBLE
TIMING:           EXPANSION:                                  ACTIVITIES:
--------          ----------                                  -----------
<S>               <C>                                <C>
1998              Begin pilot program in Europe      [*]

                                                     [*]

1999              Begin roll-out for European        o        Agree on a European program
                  implementation
                                                     o        Develop a Supplier European operations center

                  Begin pilot program in             o        Identify further opportunities
                  other region(s)

2000              Roll out into other regions        o        Complete agreements for other regions

                                                     [*]
</TABLE>


DESCRIPTION OF PILOT PROGRAMS IN THE REGIONS

Supplier pilot programs in other regions will be structured similarly to North
American Operations pilot program:

         o        [*]

         o        [*]

         o        [*]




<PAGE>   24



ESTIMATED INCREMENTAL COSTS FOR INTERNATIONAL IMPLEMENTATION:

Item                       Fee Structure
----                       -------------

System Access              [*].  For example, if the potential bid volume in
License Fees               Europe is U.S. $2 BB, the Access Fee will be [*]

Direct Labor               Because the cost of labor [*], Customer and
                           Supplier agree that the direct labor costs [*]. The
                           percentage overhead that Supplier allocates to each
                           position will [*].

Supplier travel During the pilot program, Customer will [*]. Once a longer-term
agreement to other regions is reached, Supplier and Customer will [*]. Customer
will [*].



<PAGE>   25


                                    EXHIBIT G

                      BIDWARE(R) SOFTWARE LICENSE AGREEMENT

READ THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT CAREFULLY BEFORE
SELECTING THE "YES" BUTTON BELOW TO ACCEPT THE TERMS OF THE AGREEMENT. THIS
SOFTWARE IS COPYRIGHTED AND LICENSED (NOT SOLD). BY SELECTING THE "YES" BUTTON,
YOU ARE ACCEPTING AND AGREEING TO THE TERMS OF THIS AGREEMENT. IF YOU ARE NOT
WILLING TO BE BOUND BY THE TERMS OF THIS AGREEMENT, YOU SHOULD SELECT THE "NO"
BUTTON DECLINING THE TERMS, UNINSTALL THE SOFTWARE FROM YOUR PC, PROMPTLY RETURN
THE PACKAGE AND YOU WILL RECEIVE A REFUND OF ANY MONEY IF YOU PAID FOR THE
SOFTWARE. THIS AGREEMENT REPRESENTS THE ENTIRE AGREEMENT CONCERNING THE SOFTWARE
BETWEEN YOU AND FREEMARKETS ONLINE, INC. ("LICENSOR" OR "THE COMPANY"), AND IT
SUPERSEDES ANY PRIOR PROPOSAL, REPRESENTATION, OR UNDERSTANDING BETWEEN THE
PARTIES.

1. GRANT OF LICENSE. Subject to the terms and conditions set forth in this
BidWare(R) Software License Agreement ("License Agreement"), we hereby grant to
you a non-transferrable and non-exclusive license (the "License") to use this
BidWare(R) Software or any of its components (collectively "the Software"). The
License granted herein authorizes use of the Software only by your authorized
users and only in connection with the services to be provided to you by
Licensor, for purposes of this License, your "use" of the Software, means to
load the Software into RAM or to store the Software in a memory storage device
such as a hard drive, CD-ROM other storage device. Under no circumstances shall
you make the Software available, or allow the Software to be made available, on
a network or file server other than the Licensor's BidWare(R) and the Licensor's
Network. Under no circumstances shall you copy the Software, or allow the
Software to be copied, for any purpose other than to produce the single archival
(backup) copy permitted under this License, nor shall you decompile or reverse
engineer the Software, or allow others to decompile, disassemble, or reverse
engineer the Software.

2. USE AND LOCATION.

         2.1 The Software shall not be used to connect with any server, on-line
service, or any other system except as specifically provided by Licensor.

         2.2 BidWare(R) users who have complied with the terms of this License
will be assigned a user ID and password to govern access to the Licensor's
Network and BidWare(R) databases. We reserve the right to change or cancel or
render inoperable any user ID and/or password at any time without prior
notification. You are required at all times to maintain security for your
assigned user IDs and password(s). Discloser of user IDs and passwords to anyone
else is strictly prohibited, and will be grounds for termination of our services
under this License.

         2.3 You understand that we may, from time-to-time, make available
upgrades to modify the performance of the Software. You understand that in order
to utilize the Software in conjunction with the BidWare(R) and the Licensor's
Network, we may require you to perform the necessary tasks, and supply the
necessary computer equipment, to install software upgrades. Your failure to
install upgrades or provide appropriate computer equipment may render the
Software inoperable for its intended purpose.

3.  WARRANTY DISCLAIMER/LIMITATION OF LIABILITY

         THE COMPANY MAKES NO WARRANTIES TO THE LICENSEE, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, RESPECTING THE SOFTWARE, NETWORK, ANY COMPETITIVE
BIDDING EVENT, ANY SUPPLIER, OR THE LICENSEE'S PARTICIPATION IN ANY COMPETITIVE
BIDDING EVENT. THE LICENSEE HEREBY ACKNOWLEDGES AND AGREES THAT THE SOFTWARE AND
THE NETWORK ARE NEW CREATIONS, AND THAT THERE MAY SURFACE FROM TIME-TO-TIME
"BUGS" OR "GLITCHES" THAT MAY AFFECT THE COMPANY'S PERFORMANCE OF ITS
OBLIGATIONS, AND/OR THE RIGHTS AND BENEFITS OF THE LICENSEE, UNDER THIS
AGREEMENT. THE LICENSEE AGREES THAT IT ASSUMES THE RISKS OF SUCH "BUGS" OR
"GLITCHES".


<PAGE>   26

         THE COMPANY'S SOLE OBLIGATION AND LIABILITY UNDER THIS LICENSE SHALL BE
TO REMEDY ANY NON-CONFORMANCE TO THE SOFTWARE OR REPLACE THE SOFTWARE. THE
REMEDY OF THE LICENSEE SET FORTH ABOVE IS EXCLUSIVE AND IN LIEU OF ALL OTHERS.
THE COMPANY'S PARTICIPATION IN THE PREPARATION, EXECUTION, AND FOLLOW-UP OF A
COMPETITIVE BIDDING EVENT NOTWITHSTANDING, THE COMPANY SHALL NOT BE LIABLE FOR
DAMAGES THAT MAY ARISE OUT OF THE LICENSEES'S USE OF OR INABILITY TO USE
SOFTWARE, PARTICIPATION OR INABILITY TO PARTICIPATE IN A COMPETITIVE BIDDING
EVENT OR DAMAGES THAT ARISE FROM BREACH OF PERFORMANCE ON THE PART OF A SUPPLIER
OR THE LICENSEE IN FULFILLING TERMS OF A CONTRACT. THE COMPANY SHALL NOT BE
LIABLE FOR LOSS OF USE, INCOME OR PROFIT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR
OTHER SIMILAR DAMAGES ARISING, DIRECTLY OR INDIRECTLY, OUT OF OR OCCASIONED BY
THE OPERATION, USE, INSTALLATION, REPAIR OR REPLACEMENT OF THE SOFTWARE, ANY
DELAY IN OR NON-OCCURRENCE OF ANY COMPETITIVE BIDDING EVENT AS PLANNED, OR THE
LICENSEE'S OR ANY SUPPLIER'S INABILITY TO PARTICIPATE IN A COMPETITIVE BIDDING
EVENT, WHETHER SUCH DAMAGES ARE BASED ON A CLAIM OF BREACH OF CONTRACT OR
TORTIOUS CONDUCT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER CAUSE
OF ACTION.

4. PROPRIETARY RIGHTS. This License does not convey to you any exclusive
proprietary or other rights in any Software, including, but not limited to, any
patent, copyright, trademark, service mark, trade secret, trade name or other
intellectual property rights, except that you will have the limited rights
expressly set forth in this License. Accordingly, you acknowledge that, except
as expressly provided for in this License, you possess no title or ownership of
any Software or any portion thereof.

5. NON-ASSIGNMENT OF USE OR LICENSE. You may not assign or otherwise transfer,
voluntarily, by operation of law or otherwise, any of your rights under this
License, without, in each instance, our prior written consent, which consent may
be withheld, delayed or conditioned in our sole discretion. Any attempted
assignment or transfer in violation of the terms of this Section 5 shall be null
and void. Any assignment will not relieve you of any of your obligations under
this License.

6. TERMINATION OF LICENSE. The License is effective upon selecting the "YES"
button, which indicates your acceptance of the terms of this License Agreement,
and shall continue until terminated. The License shall terminate immediately
upon completion of or termination of services to be provided by Licensor.
Licensor may terminate this License upon the breach by you of any of the terms
hereof and you may terminate this License by returning the Software and all
copies thereof and extracts therefrom to Licensor. Upon any termination of the
License, for whatever reason, you shall, within ten (10) days after such
termination, return to us the Software, any and all copies thereof, materials
related thereto and derivations therefrom then in your possession or under your
control.

7. U.S. GOVERNMENT RESTRICTED RIGHTS.

         The Software is provided with RESTRICTED RIGHTS. Use, duplication, or
disclosure by the U.S. Government is subject to restrictions as set forth in
subparagraph (c)(1)(ii) of the Rights in Technical Data and Computer Software
clause at DFARS 242.227-7013 or subparagraphs (c)(1) and (2) of the Commercial
Computer Software - Restrict Rights clause at 48 CFR 52.227-19, as applicable.
Contractor/Manufacturer is FreeMarkets OnLine, Inc., 130 Seventh Street, Century
Building, Suite 500, Pittsburgh, Pennsylvania 15222, USA.

8. GENERAL PROVISIONS. This License will be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to its conflicts of laws provisions. In the event that any provision of
this License Agreement is held to be illegal, invalid or unenforceable under
present or future laws by any court of competent jurisdiction, then such
provision will be fully severable and this License Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision were not a
part hereof. BidWare(R) and BidServer(R) are registered trademarks of Licensor.
No right, license or interest to such trademarks are granted hereunder and you
agree that no right, license or interest shall be asserted by you with respect
to such trademarks.


<PAGE>   27


                                    EXHIBIT H

                        PERSONAL COMPUTER SPECIFICATIONS

The personal computers on which the BidWare(R) Software and associated equipment
will be installed shall meet the following minimum specifications:

1.       Pentium 100 personal computer.

2.       Microsoft Windows 95 or Windows NT version 4.0

3.       16 MB RAM

4.       28.8 kbs modem

5.       10 Megabytes of unused hard drive space

6.       HP LaserJet compatible printer.

Personal computers used during a CBE must be connected to the Supplier provided
network outside of Customer's firewall and not connected to any other network.


<PAGE>   28


                                    EXHIBIT I


         This Non-Disclosure Agreement ("Agreement") is entered into between
FREEMARKETS ONLINE, INC. ("Discloser") and


                  ---------------------------------------------

                  ---------------------------------------------

                  ---------------------------------------------

                  ("Recipient")


                                   WITNESSETH:

         In consideration of the covenants and agreements herein contained, and
intending to be legally bound hereby, Discloser and Recipient agree as follows:

1.       DEFINITION

         "CONFIDENTIAL INFORMATION" shall mean confidential or other proprietary
         information that is disclosed by Discloser to Recipient regarding
         Discloser' products and other information, including without
         limitation, consulting or handbook materials, product specifications
         and documentation, pricing and other financial information and other
         confidential business information. Confidential Information shall not
         include information which: (i) is or becomes public knowledge without
         any action by, or involvement of, Recipient; (ii) is disclosed by
         Recipient with the prior written approval of Discloser. Recipient may
         is disclose Confidential Information pursuant to any judicial or
         governmental order to the extent required by such order, provided that
         Recipient gives Discloser sufficient prior notice to contest such
         order.

2.       RESTRICTIONS ON USE

         Recipient agrees that, as a condition to the receipt of Confidential
         Information from Discloser, Recipient shall: (i) not disclose, directly
         or indirectly, to any third party any portion of the Confidential
         Information without the prior written consent of Discloser; (ii) not
         use or exploit the Confidential Information in any way except for
         purpose of conducting benchmarking and/or competitive assessments for
         General Motors Corporation ("GM") pursuant to the agreements entered
         into by Discloser and GM (the "Purpose"); (iii) promptly return or
         destroy, at Discloser's option, all materials and documentation
         regarding the Confidential Information received from Discloser upon
         completion of Recipient's internal review or upon request of Discloser;
         (iv) take all necessary precautions to protect the confidentiality of
         the Confidential Information received hereunder and exercise at least
         the same degree of care in safeguarding the Confidential Information as
         Recipient would with its own confidential information; and, (v)
         promptly advise Discloser in writing upon learning of any unauthorized
         use or disclosure of the Confidential Information.


<PAGE>   29

3.       OWNERSHIP

         3.1      OWNERSHIP. All Confidential Information furnished to Recipient
                  by Discloser shall, unless otherwise specified in writing by
                  Discloser, remain the property of Discloser.

         3.2      NO LICENSE. Except for the Purpose, Discloser does not grant
                  Recipient any license, by implication or otherwise, to use the
                  Confidential Information or any license rights in any
                  copyright or other intellectual property rights owned by
                  Discloser regarding the Confidential Information.

4.       DISCLAIMER

         The Confidential Information is disclosed by Discloser to Recipient
         "AS-IS." Nothing contained in this Agreement or in any Confidential
         Information shall constitute any express or implied warranty of any
         kind, including without limitation any warranty of merchantability,
         fitness for a particular purpose or noninfringement of any patent,
         copyright or other third party intellectual property right.

5.       MISCELLANEOUS

         This Agreement shall survive for the longer of (i) five (5) years from
         the Effective Date of this Agreement, or (ii) five (5) years following
         the termination of all agreements between Discloser and GM. Recipient
         recognizes that breach of this Agreement will cause irrevocable harm to
         Discloser that is inadequately compensable in damages and that
         Discloser is entitled to injunctive relief for such breach. The
         invalidity or unenforceability of any provision of this Agreement shall
         not affect the validity or enforceability of any other provision
         hereof. No provision of this Agreement may be amended or waived without
         a written agreement signed by Discloser and Recipient.

         IN WITNESS WHEREOF Discloser and Recipient have entered into this
Confidentiality Agreement as of the Effective Date set forth below.


----------------------------                -----------------------------
        (Discloser)                                  (Recipient)



By:
   -------------------------                -----------------------------

Name:
     -----------------------

Title:
      ----------------------


Effective Date:
               -------------


<PAGE>   30


                                    EXHIBIT J


                                      [*]

Source: OneCLE Business Contracts.