Affiliate Partner Program Operating Agreement

THIS IMPROVENET INC. AFFILIATE PROGRAM OPERATING AGREEMENT (the "Agreement") contains the terms and conditions applicable to an individual's or an entity's participation in the ImproveNet Affiliate Program (the "Program") and is made and entered into by and between such individual or entity and IMPROVENET INC. As used in this Agreement, (i) "we," "us," or "our" refers to ImproveNet Inc., (ii) "you" or "your" refers to the Program applicant, (iii) "Participant" refers to any approved program applicant, (iv) "our website" refers to the ImproveNet Inc. website currently located at www.improvenet.com, (v) "your website" refers to the World Wide Web site from which you will link to our website, (vi) "user" refers to a customer of yours that you refer to us, and (vii) "dollars" or "$" shall mean United States dollars.

1. ENROLLMENT

After receiving your email application, we will review your application and your website and notify you of your acceptance or rejection. We reserve the right to reject your application if your website (i) contains material that we, in our sole discretion, deem objectionable, (ii) may create liability for us, or (iii) is not, in our opinion, consistent with the high standards of quality associated with ImproveNet Inc. and the services that we offer our customers (our "Services"). If your application is rejected, you may not participate in the Program. If accepted, you will be responsible for all of your own expenses incurred in connection with your participation in the Program.

2. LINKING TO OUR WEBSITE AND TRACKING

Upon acceptance into the Program, we will provide you with a unique URL (the "Tracking URL") to use on your website in order to permit users to link to our website. We will also provide you with the URL from which you may select the graphic and text link(s) of your choice. We shall track individual users who access our site through the Tracking URL (each a "Referral") by loading a token into each Referral's browser by means of a cookie. We will be unable (and will have no obligation) to track Referrals who refuse the token, whose browsers do not support cookies, whose token is disrupted (such as if the cookie is edited or deleted), or who obtain our Services using a browser that does not use the cookie containing the token. If we receive Referrals for the same user from multiple Participants, the last Participant from whom we receive a Referral will be credited with any Billable Job (as defined in Section 7) attributed to such user. You understand and agree that each cookie and token will automatically expire once the Referral ends the applicable session on our site and, consequently, (i) that no Billable Job made following such expiration will be tracked to you (and we will have no obligation to track such Billable Job) and (ii) that you will not be entitled to receive any Bounty Fees (as described in Section 8) with respect to a Billable Job made following such expiration. Billable Jobs will be tracked to you based upon the Tracking URL that we provide to you. It is your responsibility to ensure that such Tracking URL is used on your website.

3. RESPONSIBILITY FOR YOUR WEBSITE

You are solely responsible for all content and activities relating to your website.

4. CUSTOMER SERVICE

Both parties retain exclusive responsibility for all related customer service issues as they pertain to their individual sites.

5. TRADEMARK LICENSE

You agree to display the ImproveNet logo (the "Logo") on the home page, or other prominent location, of your website, and we hereby grant you a nonexclusive license to use the Logo in such manner and to otherwise display the Logo and the ImproveNet trademark (collectively, the "Marks") on your website. We may terminate the foregoing license if, in our sole discretion, your use of the Marks does not conform to our standards. You agree that title to and ownership of the Marks shall remain with us at all times. You shall use the Marks exactly in the form provided and in conformance with any trademark usage policies that we may establish. You may not form any combination marks with the Marks. You shall not take any action inconsistent with our ownership of or goodwill associated with the Marks. You agree that any benefits and goodwill arising from your use of the Marks shall inure solely to our benefit.

6. PROJECT SUBMISSION PROCESSING

For purposes of this Agreement, a "Project Submission" means the submission by a Referral of both a completed ImproveNet Job Description Form and ImproveNet Contact Information Form. We will process all Project Submissions through our website. Due to privacy concerns and policies, no personal information regarding any customer of ours will be provided to you.

7. SERVICES AND BILLABLE JOBS

ImproveNet provides a Service that matches homeowners with contractors for homeowner projects. For purposes hereof, a "Billable Job" is deemed to occur when the following criteria have been met: (i) all necessary information with respect to the Project Submission has been collected from the applicable Referral, and (ii) an interest request covering the Project Submission has been sent by ImproveNet to an ImproveNet-certified contractor or contractors. Test jobs and other nonqualifying jobs (those falling below ImproveNet's minimum budget threshold or not pertaining to a trade for which ImproveNet provides active matching) will not be subject to a Bounty Fee.

8. BOUNTY FEES

For so long as you are a Participant, we will pay you a Bounty Fee ("Bounty Fee") of $10 (ten dollars) per Billable Job tracked to you, as set forth in Section 2. Bounty Fees shall be paid by us within thirty (30) days following the end of the quarter in which the applicable Billable Job(s) occurred, as described in Section 7. All payments will be in U.S. dollars and drawn on a U.S. bank.

9. AGREEMENT CANCELLATION/TERMINATION

Either party may cancel or terminate this Agreement at any time and for any reason by written notice to the other party. Upon termination, all licenses hereunder shall terminate and you shall cease any and all uses of the Logo and URL. The terms of Sections 11, 12, and 15 shall survive the termination of this Agreement for any reason.

10. AGREEMENT MODIFICATIONS

We may modify any of the terms of this Agreement (including, without limitation, the Bounty Fee amount) by providing written notice and/or posting notice at the following URL: WWW.IMPROVENET.COM/ABOUTUS/AFFILIATES, which URL you agree to visit no less than once per week for so long as you participate in the Program. Your continued participation in the Program after such notice shall be deemed acceptance of the revised terms.

11. WARRANTY DISCLAIMER

WE MAKE NO WARRANTIES OR REPRESENTATIONS OF ANY KIND WITH REGARD TO OUR SERVICES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF FITNESS FOR A PARTICULAR USE OR PURPOSE, NONINFRINGEMENT, OR ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE. WE DO NOT WARRANT THAT OUR WEBSITE OR SERVICES WILL BE ERROR FREE, FUNCTION WITHOUT INTERRUPTION, OR THAT ANY ERRORS WILL BE CORRECTED. If as a matter of law we may not disclaim any warranty, the scope and duration of such warranty shall be the minimum permissible under applicable law.

12. INDEMNIFICATION

We shall indemnify and hold harmless the Participant against all claims, losses, damages, liabilities, costs, and expenses, including reasonable attorneys' fees, that the Participant may incur as a result of any claims relating to (i) the infringement by our Marks or Content of any third party copyright, trademark, trade secret, or other proprietary right, or (ii) use of or access to our website.

13. LIMITATIONS ON LIABILITY

NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, SUCH DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY), EVEN IF SUCH PARTY HAS BEEN ADVISED OF (OR KNOWS OR SHOULD KNOW OF) THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY IN AN AMOUNT GREATER THAN THE AMOUNTS DUE FROM SUCH PARTY TO THE OTHER PARTY UNDER THIS AGREEMENT DURING THE TERM OF THE AGREEMENT. THIS LIMITATION OF EACH PARTY'S LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS FOR CLAIMS OR DAMAGES IN CONNECTION WITH THIS AGREEMENT BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. THE EXISTENCE OF ONE OR MORE CLAIMS WILL NOT ENLARGE THE LIMIT.

14. ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS

By submitting your application, you acknowledge that you have read and reviewed this Agreement in its entirety and agree to all its terms and conditions.

15. NONEXCLUSIVE ARRANGEMENT

This is a nonexclusive arrangement, and nothing in this Agreement will be construed to prevent either party from entering into agreements with third parties (including direct competitors of the other party) that are similar to this Agreement.

16. GENERAL PROVISIONS

16.2 Severability.

If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way.

16.3 Independent Contractors.

The parties are independent contractors, and no agency, partnership, joint venture, or employee-employer relationship is intended or created by this Agreement. You shall make no warranties or representations on behalf of us.

16.4 Notice.

Any notices hereunder shall be given if to us at ImproveNet Inc., 10799 N. 90th Street, Suite #200,Scottsdale, AZ 85260, U.S.A., Attn: Affiliate Program Coordinator, with a copy Attn: Legal Department at the same address, and if to you at the address specified in your application, or at such other address as each party shall specify in writing from time to time in accordance with the procedures set forth in this Section 16.4. Notice shall be deemed given upon personal delivery; if sent by fax or email, upon confirmation of receipt; or if sent by certified or registered mail, postage prepaid, five (5) days after the date of mailing.

16.5 Entire Agreement; Waiver.

This Agreement sets forth the entire and final understanding and agreement of the parties and supersedes any and all oral or written agreements or understandings between the parties as to the subject matter hereof. Except as set forth in Section 10, this Agreement may be changed only by a writing signed by both parties. The waiver of a breach of any provision of this Agreement will not operate or be interpreted as a waiver of any other or subsequent breach.

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