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                                                                    EXHIBIT 10.3


                          PC411 DISTRIBUTION AGREEMENT

         DISTRIBUTION AGREEMENT (the "Agreement"), dated as of July, 1997,
between PC411, Inc. ("PC411"), 9800 La Cienega Blvd. Ste. 411, Inglewood, CA
90301 and Silicom Multimedia Systems, Inc. (the "Distributor")located at 3335
Kifer Road, Santa Clara, CA 95051

         WHEREAS, PC411(R) operates an on-line directory assistance service to
personal computer users (the "Service"), which is accessible through the use of
its PC411 for Windows software (the "Software");

         WHEREAS, the Distributor manufactures and sells computer hardware and
software products such as personal computers ("PCs"), CD-ROM disks ("CRDs") and
other storage mediums ("OSMs", and together with PCs and CRDs sometimes
hereinafter referred to as the "Products"); and

         WHEREAS, PC411 desires to grant to the Distributor a license to
distribute the Software with its Products, subject to the terms and conditions
of this Agreement, so as to make the Service available to end-users thereof (the
"Purchasers").

         NOW, THEREFORE, the parties hereto agree as follows:

1.       LICENSE

1.1      GRANT

         Subject to the terms and conditions of this Agreement, PC411 hereby
grants to the Distributor a royalty-free, non-exclusive and non-transferable
license to distribute by Preloading (as defined herein) and Bundling (as defined
herein) the Software with its Products.

         "Preloading" shall mean installing the Software on the hard drives of
PCs with the serial port, modem type, and modem speed of the PCs correctly
configured in the Software so that the Software can be used by a Purchaser
without any additional software or without the need to load any software from a
3.5" diskette, a CRD or OSM removable from the computer.

         "Bundling" shall mean copying the Software onto either CRDs, 3.5"
diskettes or OSMs with the standard documentation or other software that
accompanies the Distributor's Products.





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1.2      LIMITATIONS

         The Software constitutes licensed, copyrighted material and as such the
Distributor specifically agrees not to modify or alter, copy, reproduce or
publish in whole or in part, sell, rent, sublicense, distribute, or otherwise
transfer or commercially exploit or in any way generate income from the Software
except as specifically contemplated by this Agreement. Title and all ownership
in the Software shall at all times remain with PC411. All copies of the Software
made by the Distributor shall contain the following copyright notice:
"Copyright(C) 1996 PC411, Inc." The Distributor agrees not to export the
Software outside the United States, except as authorized and permitted by the
laws and regulations of the United States. PC411 hereby grants to the
Distributor the right to use the trademark and logo used by PC411 to identify
the Software in connection with the Distributor's marketing of the Software.

2.       TERM AND TERMINATION

         This Agreement is effective for a term of two (2) years from the date
hereof (the "Initial Term") and thereafter shall be extended for three (3) month
periods (the "Renewal Periods") unless terminated at the end of the Initial Term
or any Renewal Period by either party upon ninety (90) days' prior written
notice given to the other party (the Initial Term and any Renewal Periods shall
be referred to as the "Distribution Term"). Upon termination, the Distributor
will return all copies of the Software in its possession and cease and desist
from Preloading and/or Bundling the Software. Either party may terminate this
Agreement due to breach by the other party upon thirty (30) days' written
notice.

3.       DUTIES OF PC411

3.1      DELIVERY OF SOFTWARE

         During the Distribution Term, PC411 shall:

         (1) provide the Distributor with three (3) "gold" copies of the
Software (and any upgrades thereto as soon as any such upgrades are released) on
3.5" diskettes;

         (2) pre-configure the Software for the correct serial port, modem type
and modem speed based upon the Distributor's specifications;

         (3) assist the Distributor in testing the Software on the [Products];
and

         (4) provide the Distributor with descriptions, art work and text and
other material relating to the Service and the Software which may be copied by
the Distributor for use in the Distributor's promotional, marketing and
descriptive material.


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         The Software provided to the Distributor will be identifiable with one
or more serial numbers unique to the Distributor. Notwithstanding anything to
the contrary contained in this Agreement, the Distributor will be responsible
for any and all costs it incurs in connection with Preloading and/or Bundling
the Software with its Products.

3.2      SOFTWARE SUPPORT

         During the Distribution Term and for a period of six (6) months after
termination of this Agreement, PC411 shall:

         (1) if requested by Distributor, provide Distributor with a one-day
training session on the features, installation, use, marketing and support of
the Software (all travel and incidental costs for the training session shall be
paid for by the Distributor);

         (2) provide Distributor's customers with PC411's normal complete
service support of the Software;

         (3) support Distributor by maintaining a telephone number and
technicians to receive calls; and

         (4) support Distributor by receiving bug, error and defect reports from
Distributor and promptly fixing or providing workarounds to such bugs, errors
and defects.

3.3      RECORDS

         During the Distribution Term, PC411 shall maintain complete and
accurate records in accordance with generally accepted methods of accounting for
all transactions which are the subject of this Agreement. At Distributor's
expense and during regular business hours, Distributor or an accounting
organization retained by Distributor may examine such records for purposes of
auditing the amounts due under this Agreement. If Distributor determines that an
additional payment is due, Distributor will issue an invoice for such additional
amount with supporting documentation. If a dispute arises over such additional
amount, both parties agree to work in good faith toward a mutually agreeable
resolution of the dispute. Distributor may perform such audit once per calendar
year and will give PC411 15 days notice of its intention to perform an audit.
All information gained by Distributor or its authorized representative from such
audit shall be deemed confidential and used solely for the purpose of verifying
the amounts due under this Agreement.

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4.       DUTIES OF THE DISTRIBUTOR

4.1      DISTRIBUTION REQUIREMENT

         During the Initial Term of this Agreement, the Distributor shall
distribute by Preloading and/or Bundling an aggregate of 20,000 copies (or such
other amount as the parties may mutually agree upon) of the Software with its
Products, and during any Renewal Period, as many copies of the Software as the
Distributor deems appropriate.

4.2      PROMOTION

         During the Distribution Term, the Distributor will promote the Software
and the Service in its promotional and advertising material and will send copies
of such material to PC411 prior to publication for review by PC411 so that PC411
may suggest corrections or clarifying language.

5.       PAYMENT

5.1      DISTRIBUTION FEE

         During the Distribution Term, PC411 will pay to the Distributor a
distribution fee equal to 10% (the "Distribution Fee") of the $29.95
registration fee (or such other registration fee which may be applicable during
the Distribution Term) (the "Registration Fee") paid by each Purchaser that is
deemed to be a Registered Customer. A Purchaser is deemed to be a Registered
Customer if it (i) has registered with the Service, (ii) has paid the
Registration Fee and (iii) has remained registered with the Service for 90 days
without cancellation.

5.2      PAYMENT PERIOD

         PC411 will commence the payment of the Distribution Fees at such time
as there are 1,000 Registered Customers. PC411 will pay the Distribution Fee
within 30 days of the end of each calendar quarter. Each quarterly payment will
include a written report calculating the number of Registered Customers and the
amounts due under this Agreement. Payment by check and supporting documentation
will be mailed to:

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

6.       CONFIDENTIALITY

         The terms of this Agreement and any non-public, proprietary information
marked as confidential and disclosed by one party to the other constitute
confidential information and neither party will disclose or disseminate any
confidential information without the permission of the other party.
Notwithstanding the foregoing, each party may disclose the existence of this
Agreement and descriptions of each party's products 




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or services in its marketing and advertising efforts except that PC411 is not
granted any right to use the Distributor's trademark or logo without the prior
written consent of the Distributor, which consent shall not be unreasonably
withheld.

7.       LIMITATION ON LIABILITY

         PC411 warrants the media on which the Products is provided to the
Distributor to be free from defects in materials and workmanship. PC411's entire
liability and the Distributor's exclusive remedy with respect to such materials
or workmanship defect will be the replacement of the media.

         PC411 does not warrant that the Service or the Product will meet the
requirements of the Distributor or the Distributor's customers or that it will
operate in an error-free manner. Except as provided herein, PC411 makes no
warranty or representation, either express or implied, with respect to the
Service or the Product, including its quality, performance, merchantability, or
fitness for a particular purpose. In no event will either PC411 or the
Distributor be liable for indirect, special, incidental, punitive, exemplary, or
consequential damages arising out of the use or inability to use the Service or
the Software or the Products, whether based upon contract, negligence, strict
liability, or otherwise, even if advised of the possibility of such damages.
Specifically, neither PC411 nor the Distributor are responsible to each other
for any costs, including but not limited to those incurred as the result of lost
profits or revenue, loss of the use of the Software, loss of data, the cost of
recovering such Software or data, the cost of any substitute program, or for
other similar costs.

8.       WARRANTIES

         PC411 represents and warrants to the Distributor that:

         (a) PC411 is the owner of the Software, or has all sufficient rights to
grant the license granted in this Agreement, and that the Software does not
infringe any patent, copyright, trademark, or other intellectual property or
similar rights;

         (b) PC411 has no obligation or restriction that would interfere or be
inconsistent with or present a conflict of interest concerning its performance
under this Agreement;

         (c) PC411 and the Software comply with all United States laws,
statutes, ordinances, administrative orders, rule or regulations that apply to
the Product; and

         (d) the Software does not contain any encrypted code which is
prohibited by U.S. law for distribution outside the U.S.

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9.       INDEMNIFICATION

         PC411 agrees to indemnify and hold harmless Distributor from and
against any and all damages incurred by Distributor which result from claims by
any third party based on any of the following:

         (a) infringement by the Software of any patent, copyright, trademark,
trade name or other intellectual property or similar rights;

         (b) unlawful or unfair trade practices or competition attributable to
PC411; and

         (c) breach of any of PC411's warranties set forth in Section 8 above.

10.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the State of California, as applied to contracts made and performed
within the State of California, without regard to principles of conflicts of
law. The parties hereto agree to submit to the non-exclusive jurisdiction of the
courts of the State of California in any action or proceeding arising out of or
relating to this Agreement.

11.      COMPLETE AGREEMENT

         This Agreement constitutes the entire understanding between the parties
with respect to the Software and the Service and supersedes all prior or
contemporaneous understandings or agreements, written or oral, regarding such
subject matter. No amendment to or modification of the Agreement will be binding
unless in writing and signed by an officer of PC411 and the Distributor.

12.      NOTICES

         All notices and communications under this Agreement shall be in writing
and shall be deemed to have been duly given or made as of the date of receipt
and shall be delivered or mailed by registered or certified mail (postage
prepaid, return receipt requested), sent by overnight courier or sent by
telecopy, to the parties at the following






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addresses or telecopy numbers (or at such other address or telecopy number for a
party as shall be specified by like notice).

Address of the parties:

PC411, Inc.                                   Silicom Multimedia Systems, Inc.


9800 S. La Cienega Blvd., Suite 411           3335 Kifer Road
Inglewood, CA 90301-4440                      Santa Clara, CA 95051
Attention:  Dean R. Eaker                     Attention:
Telecopy No. ___________________



         IN WITNESS THEREOF, the parties hereto agree to the foregoing as of the
date first written above.

PC411, INC.                                   Silicom Multimedia Systems, Inc.

By:  ________________________                 By:  ___________________________

Name:    Dean R. Eaker                        Name:    _______________________
Title:   President                            
                                              Title:   _______________________











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