Employment Agreement - ImproveNet Inc. and Ronald B. Cooper


February 16, 1999

Ronald B. Cooper
6029 Canterbury Drive
Agoura Hills, CA  91301

RE:      EMPLOYMENT TERMS

Dear Ron:

         ImproveNet, Inc. (the "Company") is pleased to offer you the 
position of Chief Executive Officer, on the following terms:

         As the CEO, you will perform the duties customarily associated with 
this position, including direct responsibility for the overall profit and 
loss of the Company, managing the Company's growth plans and such duties as 
may be assigned to you by the Company's Board of Directors (the "Board"). 
Your primary office will be the Company's headquarters, located at 1286 
Oddstad Drive, Redwood City, California. In recognition of your personal 
requirement to maintain your primary residence in Agoura Hills, California, 
you may, at your discretion, open a satellite office with reasonable support 
in the Los Angeles area to assist you in meeting your family needs while 
leading the Company. When you commute from the Los Angeles area to Redwood 
City, you will be reimbursed for reasonable, documented: (i) housing expenses 
in the Redwood City area, and (ii) approved travel expenses consistent with 
Company policy. In addition, the Company agrees to reimburse you for 
reasonable, documented business expenses pursuant to Company policy.

         Your compensation will be twenty five thousand dollars ($25,000) per 
month, less payroll deductions and all required withholdings, paid 
semi-monthly. When you begin work at ImproveNet, you will be eligible for a 
bonus for fiscal year 1999, with a target of one hundred thousand dollars 
($100,000) based on goals and objectives to be mutually agreed upon by you 
and the Board within sixty (60) days of your date of employment.

         The Company will loan you on a non-recourse basis up to five hundred 
thousand dollars ($500,000) at the minimum interest rate allowable by law 
pursuant to the terms of a mutually-agreeable promissory note to include the 

following terms:

         1.       After the Company's private placement financing has closed and
                  is in the bank, you may draw on this loan up to a maximum two
                  hundred fifty thousand dollars ($250,000) per quarter.

         2.       The loan will be due and payable on the first day of the month
                  one year after the date the Company's Common Stock is publicly
                  traded, unless your employment with the Company has terminated
                  as described below.


                                     



         3.       If the Company terminates your employment without cause within
                  two (2) years from your date of employment, you agree to repay
                  to the Company a portion of the principal plus accrued
                  interest within ninety (90) days of the termination date, as
                  follows: During the first year of employment, the Company will
                  forgive fifty percent (50%) of the loan balance. At the
                  beginning of the second full year of employment, the Company
                  will forgive seventy-five percent (75%) of the loan balance.
                  After the beginning of the third full year of employment, the
                  Company will forgive one hundred (100%) of the loan balance.

         4.       If you resign or the Company terminates your employment with
                  cause, you must repay the outstanding principal sum plus all
                  accrued interest within ninety (90) days after the termination
                  date. For the purpose of the promissory note, cause means: (i)
                  conviction of any felony or any crime involving moral
                  turpitude or dishonesty; (ii) participation in a fraud or act
                  of dishonesty against the Company; (iii) material breach of
                  the Company's policies; (iv) intentional damage to the
                  Company's property; (v) material breach of the Proprietary
                  Information and Inventions Agreement or other disclosure of
                  nonpublic Company information; or (vi) willful participation
                  in any conduct, either directly or indirectly, that competes
                  with the business of the Company.

         5.       The loan will be secured solely by a pledge of your stock in
                  the Company as may be acquired. In all circumstances, the
                  Company's recourse will be limited to the realizable value of
                  the vested portion of said stock.


         You will be eligible for the following benefits in accordance with 
Company policy: medical, vision, dental, life and AD&D insurance as well as 
vacation, sick leave, and holidays. Details about these benefits will be 
available for your review. To the extent that the medical, vision, dental, 
life and AD&D benefits are not substantially equivalent to the benefits 
provided to you by your previous employer, the Company will take all 
reasonable steps during your first sixty (60) days of employment to provide 
you with such benefits.

         Upon approval by the Board, you will receive a stock option grant 
(the "Option Grant"). The total number of shares of the common stock of the 
Company (the "Common Stock"), which the Option Grant will entitle you to 
purchase, will equal six percent (6%) of the fully diluted shares outstanding 
of the Company immediately after its next financing. The exercise of the 
Option Grant will be determined by the Board, but will not be in excess of 
the fair market value of a share of the Common Stock on the date of the grant 
or on the date of the closing of financing, as the case may be, as determined 
by the Board. One-fourth of the shares covered by the Option Grant will vest 
one year after the date of grant; 1/48th of such shares will vest monthly 
thereafter as long as you remain in service with the Company. To the extent 
permitted by applicable laws, any such stock option grant made pursuant to 
this agreement, will be an incentive stock option. The terms of any such 
stock option grant will be set out in an Incentive Stock Option, similar to 
the one attached as Exhibit B. In addition, any such stock option grant will 
include standard repurchase rights and a right of first refusal as mutually 
agreed upon by the parties. You will have, at your discretion, the right to 
receive up to fifty percent (50%) of your equity (three percent (3%) of the 
total Company shares on a fully diluted basis) in the form of a grant of 
shares to purchase restricted stock of the Company, provided, however, that 
the Company will have a repurchase option with respect to the shares covered 
by such grant of rights (the "Repurchase Option"). The Repurchase Option will 
lapse as follows: one-fourth 


                                     



of the shares will be released from the Repurchase Option on the first 
anniversary of the date of grant; 1/48th of the shares will be released 
monthly thereafter as long as you remain in service with the Company. The 
shares covered by such grant of rights may be subject to additional 
repurchase rights should your service with the Company terminate and to a 
right of first refusal. Specific terms of the grant of rights will be 
finalized within sixty (60) days of your date of employment.

         As an employee of the Company, you will be expected to abide by 
Company rules and regulations, acknowledge in writing that you have read the 
Company's Employee Handbook, and sign the Proprietary Information and 
Inventions Agreement, attached as Exhibit A.

         You may terminate your employment with the Company at any time and 
for any reason whatsoever simply by notifying the Company. Likewise, the 
Company may terminate your employment at any time and for any reason 
whatsoever, with or without cause or advance notice. This at-will employment 
relationship cannot be changed except in writing signed by a Company officer.

         This letter agreement, together with your proprietary information 
and inventions agreement, constitutes the complete and exclusive statement of 
your employment agreement with the Company. The employment terms in this 
letter supersede any other agreements or promises made to you by anyone, 
whether oral or written. This Agreement is entered into without reliance upon 
any promise, warranty or representation, written or oral, other than those 
expressly contained herein, and it supersedes any other such promises, 
warranties, representations or agreements. It may not be amended or modified 
except by a written instrument signed by you and a duly authorized officer of 
the Company. If any provision of this Agreement is determined to be invalid 
or unenforceable, in whole or in part, this determination will not affect any 
other provision of this Agreement. As required by law, this offer is subject 
to satisfactory proof of your right to work in the United States.

         Please sign and date this letter and the attached Proprietary 
Information and Inventions Agreement, and return them to me if you wish to 
accept employment at the Company under the terms described above. If you 
accept our offer, we would like you to start on or before March 22, 1999.

         We look forward to your favorable reply and to a productive and 
enjoyable work relationship.

                                      Very truly yours,

                                      ImproveNet, Inc.


                                      By:    /s/ Robert Stevens
                                         -------------------------------------
                                             Robert Stevens
                                             Chief Executive Officer

Exhibit A - Incentive Stock Option
Exhibit B -- Proprietary Information and Inventions Agreement


                                     



ACKNOWLEDGED AND ACCEPTED:


/s/ Ronald B. Cooper
-----------------------------------
Ronald B. Cooper

DATE: February 19, 1999