INTEL CONFIDENTIAL

                         SOURCE CODE LICENSE AGREEMENT

                INTEL MICROPROCESSOR ARCHITECTURE OPTIMIZATIONS

     This Source Code License Agreement ("Agreement") effective on October 29,
1998 ("Effective Date") is entered into by and between Intel Corporation
("Intel") with offices at 2200 Mission College Blvd., Santa Clara, CA 95052, a
Delaware corporation; and Andrea Electronics Corporation ("Licensor'), with
offices at 45 Melville Park Rd., Melville, NY 11747, a New York corporation.

RECITALS:

     Licensor wishes to grant Intel, and Intel desires to receive certain
Materials, specifically identified in Exhibit "A" for the purposes of evaluating
and assisting Licensor with its optimization and/or portation of the Materials
to the Intel microprocessor architecture.

     Now, therefore, the parties agree to the following terms and conditions
which shall govern all disclosure/transfer of the Materials provided hereunder.

1.       DEFINITIONS

1.1       "Materials" means the software, in source and binary code formats, and
          related documentation identified on Exhibit "A". Materials also
          includes modifications and enhancements to the Materials supplied by
          Licensor and accepted by Intel.

1.2       "Modifications" means the modifications to the Materials developed by
          Intel and provided to Licensor.

2.       LICENSE GRANT

2.1      LIMITED COPYRIGHT LICENSE:

         (a)      Licensor grants to Intel a nonexclusive, nontransferable,
                  worldwide, royalty-free license under Licensor's copyrights to
                  reproduce and modify the Materials internally, only for the
                  purposes of porting and/or optimizing the Materials to the
                  Intel microprocessor architecture.

         (b)      Licensor grants to Intel a nonexclusive, nontransferable,
                  worldwide, royalty-free license under Licensor's copyrights to
                  reproduce the Materials in binary form for the purposes of
                  demonstrating the Materials to third parties.

         (c)      Intel  grants to  Licensor a  nonexclusive,  nontransferable,
                  worldwide,  royalty-free,  perpetual  license  under  Intel's
                  copyrights to reproduce,  modify, perform,  display, license,
                  sublicense,  distribute, and prepare derivative works of the:
                  (1) Modifications in source code form, only when incorporated
                  into Licensor's products and only for the purposes of porting
                  and/or    optimizing   the   Modifications   to   the   Intel
                  microprocessor architecture;  and (2) Modifications in binary
                  code form only when  incorporated  into  Licensor's  products
                  that are hosted for and targeted to the Intel  microprocessor
                  architecture.

2.2      LICENSE RESTRICTIONS:

         (a)      Intel may not: assign, sublicense, lease, or in any other way
                  transfer or disclose Materials to any third party or reproduce
                  or distribute any part of the Materials except as provided in
                  this Agreement.

         (b)      Licensor may not: assign, sublicense, !ease, or in any other
                  way transfer or disclose Modifications to any third party or
                  reproduce or distribute any part of the Modifications except
                  as provided in this Agreement.

2.3       Except as expressly granted in this Section 2, no license or right is
          granted to either party under this Agreement directly or by
          implication, estoppel or otherwise.

3.        ADDITIONAL CONDITIONS

3.1       The Materials and all copies thereof are and will remain Licensor's
          property. Such ownership shall not extend to pre-existing works or
          inventions of Intel. Intel will not remove any copyright, proprietary
          information notices, or other notices appearing on Materials.

3.2       Intel retains all right, title and interest in the Modifications,
          excluding Licensor's Materials.

3.3       Licensor shall be solely responsible to Licensor's own customers for
          any update or support obligation or other liability which may arise
          from the distribution of products which incorporate the Modifications,
          including liability arising from product infringement or product
          warranty.

3.4       Licensor shall not make any statements to the effect or which imply
          that Licensor's products are "certified" by Intel or that its
          performance is guaranteed by Intel.

3.5       Licensor shall not use Intel's name, logos, or trademarks to market
          products without Intel's written permission.

3.6       This Agreement does not preclude Intel from evaluating and/or
          marketing similar products, nor shall it be construed as an obligation
          of any party to market or distribute the Materials or any derivatives
          thereof.

3.7       Neither Party shall disassemble, reverse-engineer, or decompile any
          software not provided as source code under this Agreement.

3.8       Intel shall not disclose any part of the Materials other than to those
          Intel employees and contractors who (i) have a need to know, and (ii)
          who have signed agreements with Intel obligating them not to disclose
          any of the Materials except to Intel employees and contractors who
          have signed similar agreements.

3.9       Intel may not make commercial use of the Materials, and upon
          completion of the evaluation, optimization and/or portation effort,
          Intel shall return the Materials to Licensor or destroy the original
          and all copies of the Materials and certify to Licensor in writing
          that they have been destroyed. Intel may retain the Materials in
          binary form subject to the license grants in paragraph 2.1 (b) above.

4.        PROTECTION AND CONFIDENTIALITY

4.1       Each party shall maintain in confidence and not disclose to any third
          party for a period of [Confidential Treatment Requested] after receipt
          thereof any documents, and other trade secret information received
          from the other which has been marked "CONFIDENTIAL" (or, if disclosed
          in intangible form, is identified at the time of disclosure as
          confidential and is summarized in writing within [Confidential
          Treatment Requested] of initial disclosure) ("Confidential
          Information"). A party shall have no obligation of confidentiality
          with respect to Confidential Information which is: (a) rightfully in
          the public domain other than by a breach of this Agreement of a duty
          to the disclosing party; (b) rightfully received from a third party
          without any obligation of confidentiality; (c) rightfully known to the
          receiving party without any limitation on use or disclosure prior to
          its receipt from the disclosing party; (d) independently developed by
          employees of the receiving party; or (e) generally made available to
          third parties by the disclosing party without restriction on
          disclosure.

4.2       Intel shall be free, at any time, to use the Residual Information
          retained by those of its employees who have had access to the
          tangible form of the Materials or Confidential Information received
          from Licensor, for any purpose, including the use of such Residual
          Information in the development, manufacture, marketing and
          maintenance of Intel's products and services. "Residual Information"
          shall mean that information in non-tangible form (subject only to the
          patent, copyright, and maskwork rights of Licensor and the obligation
          not to disclose such information during the period of
          confidentiality) which may be retained by Intel's employees who have
          had access to the Materials or Confidential Information.

4.3       Neither party may disclose the terms of this Agreement or use the
          other party's name in any publications, advertisements, or other
          announcements without the other party's prior written consent.

4.4       Licensor will not suggest or imply that Licensor has any affiliation
          with Intel or that Intel supports, endorses or recommends the
          Materials.

5.        NO WARRANTY

5.1       INTEL MAKES NO WARRANTY OF ANY KIND REGARDING THE MODIFICATIONS MADE
          BY INTEL TO THE MATERIALS. THE MODIFICATIONS ARE PROVIDED TO LICENSOR
          ON AN "AS IS" BASIS AND INTEL IS NOT OBLIGATED TO PROVIDE ANY
          SUPPORT, ASSISTANCE, INSTALLATION, TRAINING OR OTHER SERVICES. INTEL
          IS NOT OBLIGATED TO PROVIDE MODIFICATIONS OR ANY UPDATES,
          ENHANCEMENTS OR EXTENSIONS. INTEL SPECIFICALLY DISCLAIMS ANY IMPLIED
          WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A
          PARTICULAR PURPOSE.

5.2       Licensor warrants it has sufficient rights to enter into this
          Agreement.

6.        LIMITATION OF LIABILITY

6.1       NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL
          OR CONSEQUENTIAL DAMAGE OF ANY KIND, EVEN IF ADVISED OF THE
          POSSIBILITY OF SUCH DAMAGES.

7.        TERM AND TERMINATION

7.1       The initial term of this Agreement shall be for a period of two (2)
          years beginning on the Effective Date, and may be extended by mutual
          written agreement of the parties.

7.2       Either party may terminate this Agreement and the licenses granted
          herein at any time for any reason with [Confidential Treatment
          Requested] prior written notice to the other party.

7.3       If this Agreement is terminated for any reason, Intel will, within
          [Confidential Treatment Requested] following termination, either
          return to Licensor or destroy the original and all copies of the
          Materials and certify to Licensor in writing that they have been
          destroyed.

7.4       Sections [Confidential Treatment Requested] shall survive termination
          of this Agreement.

8.        GENERAL

8.1       Any claim arising under or relating to this Agreement, shall be
          governed by the internal substantive laws of the State of Delaware,
          without regard to principles of conflict of laws. Each party hereby
          agrees to jurisdiction and venue in the courts of the State of
          Delaware or federal courts located in Delaware for all disputes and
          litigation arising under or relating to this Agreement. This
          provision is meant to comply with 6 Del. C. Section 2708(a).

8.2       Licensor and Intel are independent parties. Nothing in this Agreement
          shall be construed to make the parties partners or joint ventures or
          to make either party liable for the obligations, acts, omissions or
          activities of the other party.

8.3       This is the entire agreement between Licensor and Intel relating to
          this subject matter, and supersedes all prior and contemporaneous
          agreements and negotiations with respect to these matters. No
          amendments will be effective unless in a writing signed by both
          parties.

8.4       Neither party may assign this Agreement or any part of it without the
          other party's prior written consent.

9.        EXHIBITS

         The following Exhibits are included as part of this Agreement:

         Exhibit "A" - Contacts and Description of Materials.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates indicated by their respective signatures.

INTEL CORPORATION                             LICENSOR

_________________________                    [Confidential Treatment Requested]
Signature                                     Signature

_________________________                    [Confidential Treatment Requested]
Name                                          Name

_________________________                    [Confidential Treatment Requested]
Title                                         Title

_________________________                    __10/29/98_______________________
Date                                          Date

<PAGE>

                                   EXHIBIT A

                     CONTACTS AND DESCRIPTION OF MATERIALS

LICENSOR'S TECHNICAL CONTACT:

Name:             [Confidential Treatment Requested]

Telephone:        [Confidential Treatment Requested]

LICENSOR'S MATERIALS:

Name                     Description

[Confidential Treatment Requested]

     PERSON AT INTEL RESPONSIBLE FOR MONITORING THE USE AND LOCATION OF THE
MATERIALS:

Name:__________________________________

Title:_________________________________

Telephone:_____________________________