Advertising Agreement - Egghead Inc. and GeoCities


                             ADVERTISING AGREEMENT
                                        

     This Advertising Agreement (this "Agreement"), dated as of December 15,
1997, is made by and between Egghead, Inc., a Washington corporation ("SDE");
and GeoCities, a California corporation ("GeoCities"). SDE and GeoCities
sometimes are referred to collectively as the "Parties" and individually as a
"Party". In consideration of the mutual promises contained in this Agreement,
SDE and GeoCities hereby agree as follows:

SECTION 1.   DEFINITIONS

     The following terms (and all declensions thereof) are used in this
Agreement with the respective meanings set forth below:

     1.1     "ABOVE-THE-FOLD" means situated within the portion of a page that
is designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically through the page.

     1.2     "AFFILIATE" means, with respect to either Party, any individual or
entity that, by virtue of a majority ownership interest, directly controls, is
controlled by or is under common control with that Party.

     1.3     "SDE SITE" means, collectively, all points of presence and/or
services maintained by SDE or its Affiliates on the Internet or on any other
public data network.

     1.4     "GEOCITIES SITE" means, collectively, and subject to the
limitations set forth in the following sentences of this Section 1.4, all points
of presence and/or services maintained by GeoCities on the Internet as www.
geocities.com or on any other public data network; provided, however, that
"GeoCities Site" does not include any Homesteader Page or GeoShop Page with
revenues annually of Two Hundred Fifty Thousand Dollars ($250,000) or less. To
the extent that GeoCities enters into agreements with third parties relating to
the joint development and/or hosting of co-branded or outsourced personal home
page communities, such co-branded and outsourced communities shall not
constitute part of the "GeoCities Site," unless GeoCities determines, in its
sole discretion, that the inclusion of any such co-branded or outsourced
communities does not in any way conflict with or violate any such agreement with
a third party, or any agreements or other arrangements that such third party may
have with any other party. If GeoCities makes such a determination, it shall
notify SDE of such determination, and the co-branded or outsourced community in
question shall thereupon become part of the "GeoCities Site."

     1.5     "GEOCITIES BASIC COMMERCE PLATFORM" means the collection of links,
advertisements and promotional placements associated with the GeoCities' Site.

     1.6     "VIEWER" means any user of the GeoCities Site who executes a link
and is connected to the SDE Site.

 
     1.7     "COMMENCEMENT DATE" means the date GeoCities first provides SDE
with all links, advertisements and other promotional placements required under
Stage IA described in the attached Exhibit B to this Agreement.

     1.8     "COMPETITOR" means (a) any of the entities listed on Exhibit C, or
(b) any individual, corporation, corporate division, retail site, World Wide Web
site or other entity that either derives more than [***] of its annual gross
revenues from the retail sale of computer hardware or software, or is primarily
known as a retailer of computer hardware or software. For purposes of this
Section 1.8, any commercial homepage participating in GeoCities' GeoShops
program and any company who manufactures and also engages in direct selling of
computer hardware or software programs shall not be construed to be a
Competitor. For purposes of this Agreement, the term computer hardware and
software shall be construed to include computer peripherals and accessories.

     1.9     "HOMESTEADER PAGE" means any personal homepage, or commercial
homepage participating in GeoCities' GeoShop program (other than a GeoCities
Affiliate) which resides in a "member neighborhood" on the GeoCities Site.

     1.10    "SESSION" means each instance in which a user accesses the SDE Site
via a hypertext link embedded in any link, advertisement or other promotional
placement provided by GeoCities under this Agreement, and then views one or more
consecutive SDE Site pages. A Session terminates when the user exits the SDE
Site by any means.

     1.11    "QUALIFYING GROSS MARGIN REVENUES" means, with respect to any
monthly period, the aggregate gross revenues resulting from Sessions less (a)
any direct costs of goods sold, and less (b) any shipping costs associated with
the sale, and less (c) any credit card service charges associated with the sale
and less (d) any sales taxes associated with the sale, and less (e) any Gross
Margin Revenues which are attributable to returned products which have
previously been included in Gross Margin Revenues.

     1.12    "EXCLUSIVE AREAS" means the GeoCities neighborhood homepages and
the GeoCities neighborhood topic pages.

SECTION 2.   LINKAGE

     2.1     The graphic or other visual cue depicted on the attached Exhibit A,
which may include names, trademarks, servicemarks, designmarks, symbols and/or
other indicia of origin (the "SDE Icon") shall be included among the GeoCities
Basic Commerce Platform hyperlink icons during the Term. When clicked upon by a
Viewer, the SDE Icon will link the Viewer with the SDE Site. GeoCities shall
create and maintain the link between the SDE Icon and the SDE Site. SDE shall
furnish GeoCities with full color representations of the SDE Icon at least ten
(10) business days prior to the Deployment Date for GeoCities' use under this
Agreement. GeoCities agrees that it will display the SDE Icon in a manner agreed
to by the Parties and commensurate with its display of other vendor hyperlink
icons within the GeoCities Basic Commerce Platform. If SDE subsequently modifies
the SDE Icon, it shall furnish a


[***] Confidential treatment requested for redacted portion.

 
representation of same to GeoCities which GeoCities shall substitute for the
prior version within twenty (20) business days after receipt.

     2.2     The graphic or other visual cue depicted on the attached Exhibit A,
which may include names, trademarks, servicemarks, designmarks, symbols and/or
other indicia of origin as agreed to by the Parties, (the "Return Icon") shall
be displayed by SDE on each page of the SDE Site viewed by a Viewer during the
Term in the position within the page layout as shown on Exhibit A. When clicked
upon by a Viewer, the Return Icon will link the Viewer with the GeoCities Basic
Commerce Platform which was the point of departure prior to linkage with the SDE
Site. SDE shall create the link between the Return Icon and the GeoCities Basic
Commerce Platform. GeoCities shall furnish SDE with full color representations
of the Return Icon at least ten (10) business days prior to the Deployment Date
for SDE use under this Agreement. If GeoCities subsequently modifies the Return
Icon, it shall furnish a representation of same to SDE which SDE shall
substitute for the prior version within twenty (20) business days after receipt.
The Return Icon shall be visible at the SDE Site only to Viewers who link to the
SDE Site via the GeoCities Basic Commerce Platform and to no other visitors at
the SDE Site.

     2.3     SDE shall ensure that the version of the SDE Site viewed by Viewers
who link to the SDE Site through the GeoCities Basic Commerce Platform shall be
substantially similar to the SDE Site viewed by non-Viewers except for SDE co-
branded sites with other companies, the Return Icon and as elsewhere provided
for in this Agreement.

SECTION 3.   PROMOTIONAL PLACEMENTS

     See Exhibit B.

SECTION 4.   PARTICIPATION IN STRATEGIC PROGRAMS

     See Exhibit B.

SECTION 5.   COMPENSATION

     5.1     As full consideration for GeoCities' performance under this
Agreement (including, without limitation, GeoCities' provision of all links,
advertisements and promotions specified in Sections 2, 3 and 4), SDE will pay
GeoCities the fixed placement fees and variable incentive payments specified in
this Section 5, and under certain circumstances, a Site Production Fee, as
described in Section 11.5.

     5.2     During the initial term of this Agreement, SDE will pay GeoCities a
fixed placement fee of [***] Dollars ($[***]) on the Commencement Date and at
the beginning of each [***] that occurs subsequent to the Commencement Date
until the initial term ends in association with Section 11.1 hereof.


[***] Confidential treatment requested for redacted portion.


     5.3     During the term of this Agreement (including any renewal term),
for each [***] that occurs subsequent to the Commencement Date, SDE will pay
GeoCities the applicable percentage(s) of Qualifying Gross Margin Revenues set
forth opposite from the range of Qualifying Gross Margin Revenues occurring in
the first column.

                                                            QUALIFYING GROSS
              QUALIFYING GROSS MARGIN REVENUES              MARGIN REVENUE 
                           [***]                            SHARE PERCENTAGE

                           [***]                                  [***]  










     For example, if Qualifying Gross Margin Revenues equals $[***] in a given
[***], then GeoCities' share of the Qualifying Gross Margin Revenues earned as a
result of this Section 5.3 would be computed as follows:

                           [***]                  [***]       [***]

                           [***]                  [***]       [***]

                           [***]                  [***]       [***]
         
          Total share earned by GeoCities         [***]       [***]


                                                    


[***]  Confidential treatment requested for redacted portion.


 
     5.4     SDE will make payments under this Section 5 on a [***] basis, in
arrears within thirty (30) days following the end of each [***] occurring
subsequent to the Commencement Date.

     5.5     SDE organizes their accounting periods around 4 week and 5 week
periods that approximate monthly reporting periods. SDE will provide GeoCities
with a schedule of the [***] periods, which shall be used for purposes of
determining [***] reporting periods for this Agreement.

     5.6     SDE will deliver, together with each payment made pursuant to
Section 5.4, a written report signed by an authorized representative of SDE that
describes (in reasonable detail) SDE's calculation of the payment amount.

     5.7     GeoCities shall have the right, no more frequently than once during
each term, at its expense, upon thirty (30) days advance written notice to SDE
and during SDE's normal business hours, to inspect and audit the books and
records of SDE, by an independent certified public account, for the limited
purpose of verifying any payments due to GeoCities under this Agreement. In the
event any shortfall in payment to GeoCities is found which exceeds ten percent
(10%) of the total due GeoCities for the reporting period audited, then SDE
shall promptly pay GeoCities the shortfall amount and reimburse GeoCities for
all reasonable costs of the audit. The audit shall be limited to verification of
over-payment or under-payment by SDE. In the event of SDE over-payment,
GeoCities shall promptly remit any over-payment of fees to SDE.

SECTION 6.   IMPLEMENTATION

     6.1     GeoCities and SDE acknowledge that time is of the essence in the
design, development and commencement of the links, advertisements and
promotional placements specified in this Agreement. Accordingly, the Parties
will devote all commercially reasonable efforts to launch each link,
advertisement and promotional placement as soon as reasonably possible, in
accordance with a written development plan to be negotiated by the Parties in
good faith.

     6.2     GeoCities, in cooperation with SDE, will test the links,
advertisements and promotional placements required under this Agreement prior to
the time that they "go live" on the GeoCities Site (e.g., prior to the time that
they are implemented and enabled on a production version of the GeoCities Site).

     6.3     GeoCities will not cause any link, advertisement or promotional
placement under this Agreement to go live on the GeoCities Site prior to the
applicable date agreed by the Parties. Further, at SDE's discretion, traffic
from promotional links and advertising placements will be enabled in stages;
provided, however, that such staging will not delay the Commencement Date.


[***] Confidential treatment requested for redacted portion.

 
SECTION 7.   TRAFFIC DATA

     7.1     On a monthly basis, GeoCities will provide SDE with mutually agreed
data, in a form acceptable to SDE, concerning search and browsing behavior on
the GeoCities Site, to the extent such behavior reasonably could relate to the
online promotion or sale of computer hardware and software, or other products
that SDE may sell from time to time. SDE will hold such data in confidence and
will use it only in accordance with reasonable guidelines to be agreed by the
Parties.

     7.2     SDE will use its best efforts to provide GeoCities with an online
report, produced on a daily basis, of orders for SDE's products submitted by
GeoCities' users. Such report is to be used by GeoCities to actively track
performance of various promotional tools that it has in service. GeoCities will
hold such data in confidence and will use it only in accordance with reasonable
guidelines to be agreed by the Parties. Notwithstanding anything to the contrary
contained in this Section, SDE will not be required to deliver to GeoCities any
data in violation of its then-existing policies regarding the protection of
actual sales information.

SECTION 8.   EXCLUSIVITY AND MEDIA GUARANTEE

     8.1     [***]
     
     8.2     GeoCities shall be allowed to sell limited quantities of computer
hardware or software through its GeoStore, though the GeoStore shall not offer
more than a combination of twenty five (25) separate computer hardware or
software products at any point in time. GeoCities has an existing agreement with
the Internet Shopping Network, also doing business as First Auction, which
grants them the right to sell computer hardware and software within the
GeoCities Marketplace until the expiration of the agreement on [***]. The
Internet Shopping Network shall continue to be allowed to sell computer hardware
and software within the GeoCities Marketplace until the expiration of the
aforementioned agreement, which agreement shall not be renewed by GeoCities.

     8.3     To preserve the benefits provided to SDE under this Agreement, in
the event that GeoCities enters into any merger, acquisition, transfer of
control, sale of substantial assets or similar transaction with any Competitor,
SDE may have the right to terminate this Agreement upon thirty (30) days'
notice.

     8.4     As a result of the deployment of SDE's promotion on the GeoCities
website as described in Exhibit B of this Agreement, GeoCities will provide a
guaranteed number of impressions of at least [***].


[***] Confidential treatment requested for redacted portion.

 
SECTION 9.   INDEMNIFICATION

     9.1     SDE shall at all times indemnify and hold harmless GeoCities,
including any director, officer, employee, agent or representative thereof (the
"Indemnified Parties") from and against any and all claims, suits, losses,
damages, costs, expenses and liabilities of whatsoever nature or kind
(including, but not limited to, attorneys' fees, litigation and court costs,
amounts paid in settlement, amounts paid to discharge judgment(s)) directly or
indirectly resulting from, arising out of, or related to (a) the operation of
the SDE Site, or (b) the violation of third-party intellectual property rights
by any editorial content or other materials provided by SDE for display on the
GeoCities Site. Subject to GeoCities' compliance with the procedures described
in Section 9.3, SDE will pay any award against GeoCities or its Affiliates (or
their respective employees, directors or representatives) and any costs and
attorneys' fees reasonably incurred by GeoCities and its Affiliates resulting
from any such claim or action.

     9.2     GeoCities shall at all times indemnify and hold harmless SDE,
including any director, officer, employee, agent or representative thereof (the
"Indemnified Parties") from and against any and all claims, suits, losses,
damages, costs, expenses and liabilities of whatsoever nature or kind
(including, but not limited to, attorneys' fees, litigation and court costs,
amounts paid in settlement, amounts paid to discharge judgment(s)) directly or
indirectly resulting from, arising out of, or related to (a) the operation of
the GeoCities Site, or (b) the violation of any third-party intellectual
property rights by any editorial content or other materials provided by
GeoCities for display on the SDE Site. Subject to SDE's compliance with the
procedures described in Section 9.3, GeoCities will pay any award against SDE or
its Affiliates (or their respective employees, directors or representatives) and
any costs and attorneys' fees reasonably incurred by SDE and its Affiliates
resulting from any such claim or action.

     9.3     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.

SECTION 10.  INTELLECTUAL PROPERTY RIGHTS

     10.1    Subject to the limited license granted to GeoCities under Section
10.2, SDE 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 limited license granted to SDE
under Section 10.3, GeoCities reserves all of its right, title and interest in
its intellectual property rights. Neither Party grants any license to the other
except as specifically set forth in this Section 10.



 
     10.2    SDE hereby grants to GeoCities, during the term of this Agreement,
a non-exclusive, non-transferable license to use SDE's trade names, trademarks,
service names and similar proprietary marks as is reasonably necessary to
perform its obligations under this Agreement; provided, however, that any
promotional materials containing SDE's proprietary marks will be subject to
SDE's prior written approval.

     10.3    GeoCities hereby grants to SDE, during the term of this Agreement,
a non-exclusive, non-transferable license to use GeoCities' trade names,
trademarks, service names and similar proprietary marks as is reasonably
necessary to perform its obligations under this Agreement; provided, however,
that any promotional materials containing GeoCities' proprietary marks will be
subject to GeoCities' prior written approval.

     10.4    Neither GeoCities nor SDE will use the other Party's proprietary
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 of GeoCities and SDE will comply with
the other Party's requests as to the use of the other Party's proprietary marks
and will avoid any action that diminishes the value of such marks. Either
Party's unauthorized use of the other's proprietary marks is strictly
prohibited.

SECTION 11.  TERM AND TERMINATION

     11.1    The term of this Agreement will begin on the date of this Agreement
and will end [***] following the Commencement Date.

     11.2    Within [***] prior to expiration of the term of this Agreement,
GeoCities will provide to SDE written notification of the terms and conditions
under which GeoCities will renew this Agreement with SDE. GeoCities shall at
that time grant to SDE the exclusive option to accept the aforementioned terms
and conditions within [***] of receipt of GeoCities' written notice
communicating such terms and conditions to SDE and thereby renew this Agreement
at its expiration under such new terms and conditions.

     11.3    Either GeoCities or SDE may terminate this Agreement if the other
party (a) materially breaches this Agreement and does not cure the breach within
thirty (30) days following its receipt of written notice from the non-breaching
party, or (b) ceases to carry on the portion of its business that relates to
this Agreement.  In the event that SDE terminates this Agreement pursuant to the
terms of this Section 11.3, SDE's obligation to make any other payments under
this Agreement will be eliminated.

     11.4    Sections 9, 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.

     11.5    At any time [***] or more after the Commencement Date, SDE shall
have the right to terminate this Agreement prior to its expiration upon
providing GeoCities with thirty (30) days prior written notice. In the event
that SDE elects to terminate this Agreement prior to its expiration, SDE will
pay a Site Production Fee as set forth below and after payment of such Site
Production Fee, SDE's obligation to make any other payments under this Agreement


[***] Confidential treatment requested for redacted portion.

 
     will be eliminated:

             CUMULATIVE FIXED PLACEMENT
              FEES PAID PRIOR TO OR AT
               TIME OF TERMINATION                SITE PRODUCTION FEE PAYABLE

                     [***]                                   [***]
                     [***]                                   [***]
                     [***]                                   [***]
                     [***]                                   [***]

SECTION 12.  DISCLAIMERS, LIMITATIONS AND RESERVATIONS

     12.1    EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, GEOCITIES DOES
NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE
GEOCITIES SITE, GEOCITIES' SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT
LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, GEOCITIES
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT
OF SALES REVENUE THAT SDE MAY RECEIVE DURING THE TERM, AND (B) ANY ECONOMIC OR
OTHER BENEFIT THAT SDE MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.

     12.2    EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SDE DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THE SDE
SITE, SDE'S SERVICES OR ANY PORTION THEREOF, INCLUDING (WITHOUT LIMITATION)
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SDE SPECIFICALLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES REVENUES THAT MAY
OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT GEOCITIES
MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT.

     12.3    NEITHER SDE NOR GEOCITIES WILL BE LIABLE TO THE OTHER FOR
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 9 OR RESULTING FROM THE
PARTY'S WILLFUL MISCONDUCT), WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED THE
AMOUNTS TO BE PAID BY SDE UNDER SECTION 5.


[***] Confidential treatment requested for redacted portion.

 
     12.4    SDE will remain solely responsible for the operation of the SDE
Site, and GeoCities will remain solely responsible for the operation of the
GeoCities Site. Each Party (a) acknowledges that the SDE Site and the GeoCities
Site 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.

SECTION 13.  MISCELLANEOUS

     13.1    The Parties are entering this Agreement as independent contractors,
and this Agreement will not be construed to create a partnership, joint venture,
franchise 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.

     13.2    Each party agrees that the Confidential Information of the other
party will be held in confidence to the same extent and the same manner as each
party protects its own Confidential Information, but each party agrees that in
no event will less than reasonable care be used. Each party shall, however, be
permitted to disclose relevant aspects of such Confidential Information to its
officers, employees and consultants on a need-to-know basis, provided that they
have undertaken to protect the Confidential Information to the same extent as
required under this Agreement. Each party agrees to use all reasonable steps to
ensure that the other party's Confidential Information received under this
Agreement is not disclosed in violation of this paragraph. "Confidential
Information" means the terms of this Agreement, except as otherwise specifically
provided in the Agreement; each party's trade secrets, including but not limited
to, financial information, processes, formulas, specifications, programs,
instructions, source code, technical know-how, methods and procedures for
operation, benchmark test results, information about employees, customers,
marketing strategies, services, business or technical plans and proposals, in
any form; and any other information relating to either party that is not
generally known to the public at large.

     Confidential Information shall not include information that (1) is or
becomes generally known or available to the public at large through no negligent
act or omission of either party; (2) can be demonstrated to have been available
lawfully to either party prior to the disclosure or had thereafter been
furnished to either party without restrictions to disclosure or use; or (3) can
be demonstrated to be independently developed by the recipient of Confidential
Information without use of such Confidential Information and such independent
development is proven on the basis of either party's records related to such
development.

     13.3    Following the execution of this Agreement, SDE and GeoCities will
prepare and distribute a joint press release (or coordinated press releases)
announcing the transaction. The contents and timing of the release (or releases)
shall be as mutually agreed by the Parties. Neither Party will issue any further
press releases or make any other disclosures regarding this Agreement or its
terms without the other Party's prior written consent.

     13.4    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 upon it 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.

     13.5     Neither SDE nor GeoCities 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 and all fixed placement fees shall
be suspended until such events are cured.

     13.6     Notices deliverable under this Agreement shall be given in
writing, addressed to the parties set forth below and shall be deemed to have
been given either one (1) day after being given to an express overnight carrier
with a reliable system for tracking delivery; or when sent by a confirmed
facsimile with another copy sent by any other means specified in this paragraph;
or three (3) business days after having been mailed postage prepaid by United
States registered or certified mail:
 
              FOR NOTICES TO SDE:             FOR NOTICES TO GEOCITIES:

Name:         Jeffrey M. Swan                 James A. Rea

Title:        Executive Vice President        V.P. - Business Development
 
Address:      489 North 8/th/ Street          1918 Main Street, 3/rd/ Floor

City:         Hood River, Oregon  97031       Santa Monica, CA 90405-1030

Facsimile:    (541) 386-5384                  (310) 664-6520

     13.7     If any litigation is commenced to enforce any provision of this
Agreement or to seek a declaration of rights of the parties hereunder or as a
result of any breach of any provision of this Agreement, the prevailing party
will be entitled to recover from the non-prevailing party all of its costs and
expenses incurred in connection with such litigation, including without
limitation reasonable attorneys' fees.

     13.8     Neither SDE nor GeoCities may assign this Agreement, in whole or
in part, without the other Party's prior written consent (which will not be
withheld unreasonably), 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.

 
     13.9    If any provision of this Agreement is declared null, void or
otherwise unenforceable, such provision will be deemed to have been severed from
this Agreement to the minimal extent if necessary, which Agreement will
otherwise be and remain in full force and effect to its remaining provisions.

     13.10   This Agreement (a) represents the entire agreement between the
parties with respect to the subject matter hereof and supersedes any 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 California,
without reference to its choice of law rules. If any provision of this Agreement
is held to be invalid, such invalidity will not effect the remaining provisions.

     The parties have executed this Agreement on the date first written above.


                                     EGGHEAD, INC.

                                     By: /s/George Orban
                                         ---------------------------------
                                         George Orban
                                     Its:Chief Executive Officer


                                     489 North 8/th/ Street
                                     Hood River, Oregon  97031
                                     Facsimile:  (541)386-5384
                                     Attention:     Jeffrey M. Swan          
                                                    Executive Vice President

                                     With copies to:
                                    
                                     12403 Northeast Marx Street
                                     Portland, Oregan 97230
                                     Facsimile:  (503) 408-7359
                                     Attention:     Jeffrey M. Swan
                                                    Executive Vice President

                                     GEOCITIES

                                     By: /s/James A. Rea
                                         ---------------------------------
                                         James A. Rea
                                     Its:Vice President - Business Development

                                     1918 Main Street, 3/rd/ Floor
                                     Santa Monica, California  90405
                                     Facsimile:  (310) 664-6520

 
                                   EXHIBIT A

                                    LINKAGE
                                        



SDE Icon



Return Icon

                                      A-1

 
                                   EXHIBIT B

                STAGED DEPLOYMENT OF SDE PROMOTION ON GEOCITIES
                                        
                                   STAGE IA
                           Target Start Date 11/1/97


1) Fixed Media Placement

     [***] exposures/month (buttons/banners)
     Plus E-Mail collection from member registration page
     This may be modified upon the mutual agreement of the parties

2) Experimentation with Popups and/or Interstitials

3) Placement on GeoCities Homepage

     Logo placement, aggregated with other strategic partners situated on main
     homepage.

4) Placement on GeoCities Neighborhood Homepage

     Logo placement, aggregated with other strategic partners situated on each
     neighborhood homepage

5) Placement on GeoCities Neighborhood Topic Pages

     Logo placement, aggregated with other strategic partners on each
     neighborhood topic page

Specific targeted product placement either on each neighborhood topic page or on
a topic product page associated with each neighborhood topic page.


                                   STAGE IB
                           Target Start Date 12/1/97


1) Placement on GeoCities Marketplace

Above the fold placement, more prominent in size than non-strategic marketplace
vendors.


[***] Confidential treatment requested for redacted portion.

                                      B-1

 
                                   STAGE II
                           Target Start Date 1/1/98


1) Implement Computer Guides Program

     Incentive program for GeoCities homesteaders to host for computer related
     chat and discussion board sessions on their personal homepages

2) Integrate with GeoCities Chat Programs

     Vendor's Chat - include all computer related chat sessions in directory of
     active chat sessions and experiment with placing direct buy buttons on
     computer related member hosted chat pages.

     Products Within/Under Chat - deliver targeted product offers (fishing
     software offers to fishing chat participants) to chat users.

                                      B-2

 
                                   STAGE III
                            Target Start Date 2/1/98


     Stage III involves an ongoing process of experimenting with new concepts
and implementing those concepts which appear to provide successful results. Some
of the areas we intend to explore are:

     Product Offers on Search Result Pages

     Product Offers on Interest Pages

     Product Offers within Instant Messaging

     Customized GeoGuides

     Buyer's Clubs

     First Time Buyer's Specials

     Special Limited Time Offer Discounts

     Greeting Card/Gift Certificate Combinations

     GeoCities Site Values (available only to GeoCities Visitors)

                                      B-3
                                        

 
                                   EXHIBIT C

            COMPETITORS IN COMPUTER HARDWARE AND SOFTWARE CATEGORY
                                        



[***]




The following companies shall be construed as Competitors only when their
advertising creative materials to be run by GeoCities directly address the
Computer Hardware and Software category.



[***]



[***] Confidential treatment requested for redacted portion.

                                      C-1