Document:

May 5, 1998
President & CEO LVL Interactive
480 Cowper Palo Alto, CA 94301

Dear Steve:

This will serve as a memo of understanding between Oracle Corporation and LVL.
We are enthusiastic about the market opportunity that exists for the combination
of talents and resources offered by our firms. Through our discussions over the
past weeks we believe we have defined the market opportunity, roles of each firm
in the pursuit of these opportunities and the framework of an agreement that
would govern our working relationship. It is understood that this document does
not constitute a formal agreement. Rather it is intended to communicate the
basic understanding that has been achieved to date. If a formal contract is
required we intend to negotiate in good faith over a target number of 45 days to
solidify such a formal agreement. It is also understood that we will begin
working together immediately in the pursuit of these target opportunities as
defined below.

MARKET OPPORTUNITY

High profile companies with very strong brand recognition represent a unique
opportunity for Oracle and LVL. They will all eventually have a world class
website which will allow them to sell products over the Internet. Websites that
are effective in the marketing and business processes (handling transactions,
scalability and manageability) are the exception, not the rule. Consumer
marketing companies need the technical software expertise and the web-savvy
marketing expertise of a firm like LVL to help design, develop, implement and
manage a world class electronic marketing site.

Our intention is to target 3 to 10 such companies together, including all facets
of the sales cycle from prospecting to closure, and then jointly win the
opportunity to build their next generation electronic sales and marketing
website. If successful, Oracle and LVL will each win significant contracts for
the development and management of the sites. It is expected that Oracle will be
the subcontractor to LVL, given the nature of the agreement that LVL intends to
pursue with the account. Regardless of Oracle's role as prime or subcontractor,
it is anticipated that the sites will require significant software and services.
The exact software, services and pricing for these sites will be negotiated on a
case by case basis through the normal Oracle sales and consulting practices,
either directly with LVL or with the end customer if appropriate.

<PAGE>

ROLES

LVL intends to win the rights to develop and own the site for each target
account. In this case, Oracle is a subcontractor and LVL purchases the software
and services from Oracle to build the site. Oracle will contract with LVL, to
provide the software and services as needed for the project per Oracle's
standard and customary rates.

Additionally, Oracle and LVL will jointly invest the pre-sales and upfront
marketing resources needed to win the opportunities.

FRAMEWORK OF A PROPOSED AGREEMENT

Oracle has three primary interests in the target opportunities

1.       We want to sell software and services to our current competitive market
         rates.
2.       We want to co-brand the sites "On Oracle" technology and have the
         rights to reference them in Oracle marketing efforts to establish our
         Firm as the premier provider for the electronic commerce market.
3.       We want to lean from the experience so we can develop a scaleable model
         for profitably pursuing and winning this business in the future.

In order to accomplish these three objectives we would like to formalize an
agreement that defines all necessary specific obligations for both parties. The
target is 45 days to decline and complete the agreement.

Specifically with regard to objective number 3, we are each proposing that
Oracle pay LVL the sum of $25,000 for at least three and no more than ten of
such opportunities. Oracle will devote pre-sales resources to develop and win
the opportunities. LVL will use the money to do the same.

It is proposed that Oracle will receive the following benefit from $25,000 per
initial opportunity.

1.       Co-branding the sites "On Oracle" or some other appropriate mark that
         indicates that Oracle provided the technology and services to help
         develop the site.
2.       A 2 - 3 page report on each of the 3 - 10 cases indicating all the
         requirements of the project, what it took to win the job, get the job
         done, et.

Both of these benefits will be spelled out in more specific terms in the final
contract that governs our working relationship. Until that final agreement is
reached, Oracle and LVL will work on a case by case basis to pursue the
opportunities together. It is anticipated that the first opportunity to work
together is upon us in less that the six weeks we think it will take to get a
contract done, we are inclined to work on a "letter agreement" basis for each
project. It is incumbent upon LVL to draft a simple letter stating the
deliverables for the $25K fee for each opportunity until an agreement is made
final.

We are very enthusiastic about the opportunity. Thanks for working on it with us
so far.

Regards,

/S/ Michael Keddington
---------------------------
Michael Keddington
Vice President of marketing
Application Server DivisionLVL

                    Philips Mobile Computing Group CyberStore
                          PRELIMINARY LETTER OF Intent

                  This Preliminary Letter of Intent between LVL Communications,
          Inc. ("LVL") and Philips Mobile Computing Group ("PMCG") summarizes
          their MUTUAL interest in forming a joint venture and/or creating a
          licensing agreement to develop and operate a retail website under the
          PMCG name dedicated to selling PMCG and compatible products to
          consumers over the Internet. This Letter of Intent is strictly
          preliminary and is intended primarily to establish a basis for future
          definitive discussions. This Preliminary Letter of Intent is
          non-binding on either party.

          BUSINESS PURPOSE: To develop and operate an Internet website
          ("CyberStore") dedicated to exclusively selling PMCG and compatible
          products to retail customers for profit.

          ENTERPRISE STRUCTURE: A U.S. corporation or limited liability
          company (the "CyberStore Enterprise") funded through equity and debt
          supplied by LVL or its investors. LVL will be the operating partner
          responsible for CyberStore development, operation and expansion with
          sole responsibility for financing Website development and operating
          losses (initial budgeted capital: $2 million). PMCG will make
          available the full PMCG branded product line to the CyberStore
          Enterprise and will be responsible for product inventory and order
          fulfillment. After repayment of initial start-up costs, PMCG will
          receive payments based upon Enterprise revenue or profits on terms to
          be negotiated.

          CONTRIBUTION/ROLE BY PARTY:
          LVL:             Development capital ($1 million budgeted)
                           Operating expenses ($1 million budgeted)
                           Facilities and personnel
                           Marketing and management services
                           Web-oriented advertising and promotion
                           Sales order entry and customer service
                           Customer billing and collection
                           Account and financial reporting

          PMCG:            Pull PMCG-branded product line
                           Product inventory
                           Order fulfillment
                           Customer technical support
                           Warranty and repair services
                           Non-Web advertising and promotion

                                                                          Page 1

<PAGE>

ENTERPRISE TERMS:

          EXCLUSIVITY: Although other retail websites may sell PMCG products as
          part of a broader product offering, PMCG agrees to naming the
          CyberStore Enterprise as the exclusive website for the full line of
          PMCG-branded products under the PMCG name.

          PRICING: The CyberStore Enterprise shall be permitted to PRICE PMCG
          products at the best retail price offered to consumers by other PMCG
          dealers ("street price") or the best retail price for PMCG products
          offered by another website, whichever is lower.

          PURCHASING: The CyberStore Enterprise shall be able to purchase any
          PMCG branded product at the best price available to any PMCG customer
          with similar terms and conditions.

          SERVICES: The CyberStore Enterprise shall be responsible for
          marketing, merchandising, customer contact, billing and collection,
          and other sales activities. PMCG shall be responsible for order
          fulfillment, technical support ,warranty and repair, and similar
          functions. To the extent that PMCG IS unable to perform necessary
          functions, the CyberStore Enterprise shall provide FOR THE performance
          of these functions and deduct their cost from Enterprise payments to
          PMCG.

          ADVERTISING: PMCG agrees to prominently feature the CyberStore
          Enterprise name and web address in PMCG-brand advertising. THE
          CYBERSTORE ENTERPRISE will create and place at its own expense
          Web-oriented advertising compatible with PMCG advertising programs.
          Both parties agree to cooperate on joint advertising programs and
          promotions.

          REPURCHASE: After three years, PMCC may purchase LVL's ownership in
          the CyberStore Enterprise on the anniversary of the date of the full
          Agreement for cash at a price determined by third-party appraisal.
          Upon acquisition of LVL's ownership interest, PMCG will have sole
          responsibility for operation of the Enterprise.

          SCHEDULE: Upon negotiation and execution of a definitive agreement,
          LVL will provide initial funding to the Enterprise and begin
          development of the CyberStore website with the intention of commencing
          retail sales within 6 months.

AUTHORIZATION TO PROCEED WITH A FEASIBILITY STUDY: By signing this Letter OF
Intent, PMCG authorizes LVL Communications to begin a Feasibility Study AT LVL'S
EXPENSE to analyze PMCG's current infrastructure and business processes AS A
BASIS FOR FORMING a CyberStore Enterprise dedicated to PMCG products. The intent
of this study is to create a business case for managing and maintaining PMCG's
online commerce in an outsource model. This study does not obligate PMCG to move
forward on the formation of a CyberStore Enterprise, but is intended to provide
a framework for future discussions.

                                                                          page 2

<PAGE>

PARTNERSHIP WITH ORACLE
Oracle has entered into a tentative agreement with LVL to provide services and
products required to implement the technical back-end development of these
CyberStores. Oracle has agreed to partner with LVL in developing the initial
Feasibility Study required as the first part of building an on-line retail
presence.

This Preliminary Letter of Intent is only an expression of mutual intent in
negotiating a Definitive Agreement regarding the formation of the CyberStore
Enterprise along the lines described above. Neither party is obligated to move
forward in this proposed relationship; all terms and conditions are subject to
modification AND may change substantially in the Definitive Agreement (if any).

LVL Communications:                             Philips Mobile Computing Group

/S/ Calbert Lai   4/28/98                       /S/ Robert Brown     4/28/98
Calbert Lai                                     Robert Brown
Chairman & CEO                                  Director of Marketing

                                                                          Page 3

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