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-1- 2.12 Form: Web Linking Referral Fee Agreement This Agreement, dated as of __________ ("Effective Date"), is made between Lots-a- games.com, Inc., ("Lots-a-games.com"), a Delaware corporation engaged in the online marketing and selling of computer games, and Jane's Software Corporation ("Premium Associate"), a California company engaged in developing, marketing and selling software products. In consideration of the mutual promises contained in this Agreement, Lots-a- games.com and Premium Associate hereby agree as follows: 1. Links to Lots-a-games.com; Promotional Placements 1.1 Premium Associate may use any combination of the following types of links in connection with marketing games on its Web site at http://www.janes-software.com. 1.1.1 Game Lists Premium Associate will select one or more specific Games to list on its Web site. As used in this agreement, the term "Game" means any item offered for sale in the Lots-a-games.com online catalog (the "Catalog"). For each selected Game, Premium Associate will display on its Web site the Game's title, a short description, review, or other reference. Premium Associate will be solely responsible for the content, style, and placement of these references. Premium Associate will use a special link, provided by Lots-a-games.com, from each Game reference on its Web site to the corresponding Game detail page in the Catalog. -2- Each link will connect directly to a single item in the Catalog. Premium Associate may add, change or delete Games (and related links) from its Web site at any time. Those Games that are individually listed and linked as described above shall hereinafter be referred to as "Individually Linked Games." 1.1.2 Search Feature Lots-a-games.com will provide Premium Associate with technical specifications describing, how to include a Lots-a-games.com search box on its Web site. The search box will permit site visitors to navigate directly to a page on the Lots-a-games.com Web site (the "Catalog") that contains the results of their search queries. 1.1.3 Links to Subject Browse Categories Lots-a-games.com will provide Premium Associate with recommendations and graphical artwork to use in linking to Lots-a-games.com subject browse categories (e.g., movie tie-ins, guides and reviews, etc.) where contextually reasonable. 1.1.4 Links to Lots-a-games.com Homepage Lots-a-games.com will provide Premium Associate with recommendations and graphical artwork to use in linking to the Lots-a-games.com Homepage where contextually reasonable. 2. Premium Associate Responsibilities Premium Associate will be solely responsible for the development, operation, and maintenance of its Web site and for all materials that -3- appear therein, including, without limitation: (a) the technical operation of its Web site and all related equipment; (b) creating and posting Game descriptions on its Web site and linking those description to the Catalog; (c) the accuracy and appropriateness of materials posted on or incorporated into its Web site (including among other things, all Game-related materials); (d) ensuring that materials posted on or incorporated into its Web site do not violate or infringe upon the rights of any third party (including, without limitation, copyrights, trademarks, trade secrets, privacy or other personal or proprietary rights); and (e) ensuring that materials posted on or incorporated into the Web site are not libelous or illegal. 3. Order Processing Lots-a-games.com will be responsible for all aspects of processing and fulfilling Game orders placed by customers who follow special links from the Premium Associate Web site to Catalog entries; provided, however, that Lots- a-games.com reserves the right to reject orders that do not comply with any requirements that Lots-a-games.com periodically may establish. Lots-a-games.com will be responsible for preparing order forms, processing payments, cancellations, and returns and handling customer service. Lots-a-games.com will track sales made to customers who purchase Games using special links from the Premium Associate's Web site to the Catalog and will send Premium Associate response summarizing this sales activity. To permit accurate tracking, reporting, and fee accrual, Premium Associate will be responsible for ensuring that -4- the special links between its Web site and the Lots-a-games.com site are properly formatted. 4. Fees 4.1 Referral Fees 4.1.1 Lots-a-games.com will pay Premium Associate referral fees ("Referral Fees") based on a percentage of the Sales Price of Qualifying Games purchased from Lots-a- games.com. The term "Sales Price" as used herein means the sale price listed in the Catalog under the "Our Price" heading at the time of the order and excludes shipping, handling, gift-wrapping, taxes and other miscellaneous charges. The term "Qualifying Games" as used herein shall mean all in-print Games listed in the Catalog at the time of order that are purchased by users of the Premium Associate Web site as a direct result of following a hypertext link from the Premium Associate Web site to the Lots-a-games.com site, provided that the customer accepts delivery of the Game and remits full payment to Lots-a-games.com, and provided further that once a user reenters the Lots-a-games.com site other than through a direct hyperlink from the Premium Associate Web site (e.g., through a link from another site, a bookmark or by manually entering the URL), any Games purchased thereafter shall not be considered "Qualifying Games." Notwithstanding anything herein to the contrary, Games listed in the Catalog or in search results as "out of print" are not "Qualifying Games" and are not eligible for any Referral Fees. -5- 4.1.2 The amount of the Referral Fees earned shall be ____% of all Qualifying Games. 4.1.3 The Referral Fees shall be paid on a quarterly basis within thirty (30) days following the end of each calendar quarter. If any Game for which a Referral Fee has been paid is returned to Lots-a-games.com, the Referral Fee paid for such Game shall be deducted from the Referral Fees payable for the quarter in which the Game was returned. If there are not sufficient Referral Fees generated in such quarter to cover the deduction, Premium Associate will be billed for the difference. 4.1.4 The Referral Fees for Qualifying Games shall be increased to ____% of the fees set forth above for any Qualifying Games ordered and shipped prior to __________, 2000. 5. Reporting and Fee Schedule 5.1 Lots-a-games.com will send Premium Associate a monthly report, within 5 days following the end of each calendar month, showing in reasonable detail the calculation of all Referral Fees earned under this Agreement during the previous month. Lots-a-games.com shall keep for three years proper records and games relating to its activities hereunder. In the event that Premium Associate believes in good faith that the amounts paid to Premium Associate are not accurate, then Premium Associate may request in writing that Lots-a- games.com verify the accuracy of its records and calculations relating to the amounts payable hereunder, provided that such request shall not be made more often than once each year. Upon such request, Lots-a-games.com will -6- recalculate the amount of the contested fees and deliver a written certificate stating the correct amount payable under the Agreement, signed by an executive of Lots-a-games.com, together with any payment shortfall. 6. Exclusivity 6.1 During the term of this Agreement, Premium Associate will not permit another entity, other than Lots-a-games.com, to sell or distribute Games on or in connection with the Premium Associate Web site. Further, Premium Associate will not establish any direct hypertext links between its Web site and a Lots-a-games.com Competitor (as defined below), nor permit or provide any other links, advertisements or promotions by or to any Competitor. The term "Competitor" as used herein means (a) any of the entities listed in Exhibit B, or (b) any individual, corporation, corporate division, World Wide Lots-a-games.com or other online site or any other entity or service that either derives more than ten percent (10%) of its annual gross revenues from the sale of Games or is primarily known as a seller of Games. 7. Policies and Pricing 7.1 Customers who buy Games through this program will be deemed customers of Lots-a- games.com. Accordingly, all Lots-a-games.com policies and operating procedures concerning customer orders, customer service and Game sales will apply to those customers. Lots-a- games.com may change its policies and operating procedures at any time. For example, Lots-a- games.com will determine the prices to be charged for Games sold in the Catalog in -7- accordance with Lots-a-games.com's own pricing policies. Game prices and availability may vary from time to time. Because price changes may affect Games that Premium Associate has listed on its Web site, Premium Associate may not include price information in its Game descriptions. Lots-a-games.com uses commercially reasonable efforts to present accurate information, but it cannot guarantee the availability or price of any particular Game. 8. Intellectual Property Rights 8.1 Subject to the license granted to Premium Associate under Section 8.2, Lots-a-games.com reserves all of its right, title and interest in its intellectual property rights (.e.g., patents, copyrights, trade secrets, trademarks and other intellectual property rights). Subject to the license granted to Lots-a- games.com under Section 8.3, Premium Associate reserves all of its right, title and interest in its intellectual property rights. 8.2 Lots-a-games.com hereby grants to Premium Associate, during the term of this Agreement, a non-exclusive, non-transferable, royalty-free license to establish hyperlinks between the Premium Associate Services and the Lots-a- games.com sites and to use the Lots-a-games.com trade names, logos, trademarks and service marks that may from time to time be supplied by Lots-a-games.com (the "Lots-a-games.com Marks") on the Premium Associate Web site as is reasonably necessary to establish and promote such hyperlinks and otherwise to perform its obligations under this Agreement; provided, however, that any promotional materials or -8- usage"s containing any of the Lots-a-games.com Marks will be subject to Lots-a-games.com's prior written approval. 8.3 Premium Associate hereby grants to Lots-a- games.com, during the term of this Agreement, a non-exclusive, non-transferable, royalty-free license to establish hyperlinks between the Lots-a-games.com site and the Premium Associate Web site and to use the Premium Associate's trade names, logos, trademarks and service marks (the "Premium Associate Marks") as is reasonably necessary to establish and promote such hyperlinks and to otherwise perform its obligations under this Agreement; provided, however, that any promotional materials or usages containing any of the Premium Associate Marks will be subject to Premium Associate's prior written approval. 8.4 Neither party will modify, alter or obfuscate the other party's Marks or use the other party's Marks in a manner that disparages the other party or its products or services, or portrays the other party or its products or services in a false, competitively adverse or poor light. Each party will comply with the other party's instructions as to the form of use of the other party's Marks and will avoid any action that diminishes the value of such Marks. Either party's unauthorized use of the other's Marks is strictly prohibited. Upon termination of this Agreement and upon written request, the party in receipt of the requesting party's intellectual or proprietary property and/or information pursuant to this Agreement shall return such information to the requesting party. -9- 9. Confidentiality 9.1 Except as expressly set forth herein, Premium Associate and Lots-a-games.com shall maintain in confidence the terms of this Agreement. It is expected that, pursuant to discussions to date and to this Agreement, the parties may disclose to one another certain information, as defined herein, which is considered by the disclosing party to be proprietary or confidential information (the "Confidential Information"). Confidential Information is defined as any information, communication or data, in any form, including, but not limited to, oral, written, graphic or electromagnetic forms, models or samples, which the disclosing party identifies as confidential or which is of such a nature that the receiving party should reasonably understand that the disclosing party desires to protect such information, communication or data against unrestricted disclosure or use, including, without limitation, site traffic and performance data, business information, financial data and marketing data. All Confidential Information shall remain the sole property of the disclosing party and its confidentiality shall be maintained and protected by the receiving party with the same degree of care as the receiving party uses for its own confidential and proprietary information. The receiving party shall not use the Confidential Information of the other party except as necessary to fulfill its obligations under this Agreement, nor shall it disclose such Confidential Information to any third party without the prior written consent of the disclosing party. The restrictions on the use or disclosure of any Confidential Information -10- shall not apply to any Confidential Information: (i) after it has become generally available to the public without breach of this Agreement by the receiving party; (ii) that is rightfully in the receiving party's possession prior to disclosure to it by the disclosing party; (iii) that is independently developed by the receiving party; (iv) that is rightfully received by the receiving party from a third party without a duty of confidentiality; or (v) that is disclosed under operation of law. 10. Disclaimers and Limitation of Liability 10.1 Each party (a) acknowledges that the operation of the Lots-a-games.com site and the Premium Associate Web site will not be uninterrupted or error-free and may be subject to temporary shutdowns due to causes beyond the operating party's reasonable control, and (b) subject to the specific terms of this Agreement, retains sole right and control over the programming, content and conduct of transactions over its respective site or service. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) ITS WEB SITE OR ANY OF THE PRODUCTS OR SERVICES IT PROVIDES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (B) THE AMOUNT OF SALES OR REFERRAL FEES THAT MAY BE GENERATED DURING THE TERM; AND (C) ANY ECONOMIC OR OTHER BENEFIT THAT THE OTHER PARTY MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT. 10.2 NEITHER LOTS-A-GAMES.COM NOR PREMIUM ASSOCIATE WILL BE LIABLE TO THE OTHER FOR ANY -11- INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOST DATA) ARISING OUT OF THIS AGREEMENT. EACH PARTY'S ENTIRE LIABILITY ARISING FROM THIS AGREEMENT (EXCEPT FOR LIABILITIES ARISING UNDER SECTION 12 OR RESULTING FROM THE PARTY'S WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED THE AMOUNTS TO BE PAID BY LOTS-AGAMES.COM UNDER THIS AGREEMENT. 11. Term and Termination 11.1 The term of this Agreement will begin on the Effective Date and will continue for a period of twelve (12) months from the Commencement Date unless earlier terminated, renewed or extended in accordance with the terms of this Agreement. The term "Commencement Date," as used herein, means the date Premium Associate first provides all components of the links described in Section 1. The Commencement Date for this Agreement shall be __________, 2000. 11.2 Either party may terminate this Agreement on thirty (30) days written notice in the event the other party materially breaches this Agreement and fails to cure such material breach within such 30-day notice period. 11.3 This Agreement will renew automatically for successive six-month periods unless either party gives written notice to the other party of its intent not to renew no less than thirty (30) days prior to the end of the previous term. -12- 11.4 Sections 2, 7, 8, 9, 10, 11, 12 and 13 (together with all other provisions that reasonably may be interpreted as surviving termination or expiration of this Agreement) will survive the termination or expiration of this Agreement. 12. Indemnification 12.1 Lots-a-games.com will defend and indemnify Premium Associate and its affiliates (and their respective employees, directors and representatives) against any claim or action brought by a third party, to the extent relating to (a) the operation or content of the Lots-a-games.com site, (b) any breach of its obligations under this Agreement, or (c) the violation of third-party intellectual property rights by any materials provided by Lots-a- games.com for display on the Premium Associate Web site. Subject to Premium Associate's compliance with the procedures described in Section 12.3, Lots-a-games.com will pay any award against Premium Associate or its affiliates (or their respective employees, directors or representatives) and any costs and attorneys' fees reasonably incurred by Premium Associate and its affiliates resulting from any such claim or action. 12.2 Premium Associate will defend and indemnify Lots-a-games.com and its affiliates (and their respective employees, directors and representatives) against any claim or action brought by a third party, to the extent relating to (a) the operation or content of the Premium Associate Services, (b) any breach of its obligations under this Agreement, or (c) the violation of third-party intellectual -13- property rights by any materials provided by Premium Associate for display on the Lots-a- games.com site. Subject to Lots-a-games.com's compliance with the procedures described in Section 12.3, Premium Associate will pay any award against Lots-a-games.com or its affiliates (or their respective employees, directors or representatives) and any costs and attorneys' fees reasonably incurred by Lots-a- games.com and its affiliates resulting from any such claim or action. 12.3 In connection with any claim or action described in this Section, the party seeking indemnification (a) will give the indemnifying party prompt written notice of the claim, (b) will cooperate with the indemnifying party (at the indemnifying party's expense) in connection with the defense and settlement of the claim, and (c) will permit the indemnifying party to control the defense and settlement of the claim, provided that the indemnifying party may not settle the claim without the indemnified party's prior written consent (which will not be unreasonably withheld). Further, the indemnified party (at its cost) may participate in the defense and settlement of the claim. 13. General Provisions 13.1 The parties are entering this Agreement as independent contractors, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between them. Neither party will represent itself to be an employee or agent of the other or enter into any agreement on the other's behalf of or in the other's name. -14- 13.2 In its performance of this Agreement, each party will comply with all applicable laws, regulations, orders and other requirements, now or hereafter in effect, of governmental authorities having jurisdiction. Without limiting the generality of the foregoing, each party will pay, collect and remit such taxes as may be imposed with respect to any compensation, royalties or transactions under this Agreement. Except as expressly provided herein, each party will be responsible for all costs and expenses incurred by it in connection with the negotiation, execution and performance of this Agreement. 13.3 Neither Lots-a-games.com nor Premium Associate will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such party's reasonable control and that such party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected party will give prompt written notice to the other party and will use commercially reasonable efforts to minimize the impact of the event. 13.4 Any notice or other communication under this Agreement given by any party to any other party will be in writing and will be deemed properly given when sent to the intended recipient by registered letter, receipted commercial courier, or electronically receipted facsimile transmission (acknowledged in like manner by the intended recipient) at its address and to the attention of the individual -15- specified below its signature at the end of this Agreement. Any party may from time to time change such address or individual by giving the other party notice of such change in accordance with this Section 13.4. 13.5 Neither Lots-a-games.com nor Premium Associate may assign this Agreement, in whole or in part, without the other party's prior written consent (which consent will not be unreasonably withheld), except to (a) any corporation resulting from any merger, consolidation or other reorganization involving the assigning party, (b) any of its affiliates, or (c) any individual or entity to which the assigning party may transfer substantially all of its assets; provided that the assignee agrees in writing to be bound by all the terms and conditions of this Agreement. Subject to the foregoing, this Agreement will be binding on and enforceable by the parties and their respective successors and permitted assigns. 13.6 The failure of either party to enforce any provision of this Agreement will not constitute a waiver of the party's rights to subsequently enforce the provision. The remedies specified in this Agreement are in addition to any other remedies that may be available at law or in equity. If any provision of this Agreement shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Agreement shall not be affected and shall remain in full force and effect. 13.7 This Agreement (a) represents the entire agreement between the parties with respect to the subject matter hereof and supersedes any -16- previous or contemporaneous oral or written agreements regarding such subject matter, (b) may be amended or modified only by a written instrument signed by a duly authorized agent of each party, and (c) will be interpreted, construed and enforced in all respects in accordance with the laws of the State of Washington, without reference to its choice of law rules. Any action relating to this Agreement must be brought in state or federal courts located in _________, and the parties irrevocable consent to the jurisdiction of such courts. IN WITNESS WHEREOF, the parties hereto, have caused this Agreement to be duly executed as of the day and year first above written. Jane's Software Corporation Lots-a- games.com, Inc. By:________________________ By:______________________ Title:_____________________ Title:___________________ Signed:____________________ Signed:__________________ Date:______________________ Date:____________________