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Indemnification and Insurance Matters Agreement - Adaptec Inc. and Roxio Inc.

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INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

BETWEEN

ADAPTEC, INC.

AND

ROXIO, INC.


                                November ___, 2000


<PAGE>

                                TABLE OF CONTENTS




                                                                            PAGE
                                                                            ----


ARTICLE I. MUTUAL RELEASES; INDEMNIFICATION....................................1

      Section 1.1.        Release of Pre-Closing Claims........................1
      Section 1.2.        Indemnification by Roxio.............................2
      Section 1.3.        Indemnification by Adaptec...........................3
      Section 1.4.        Indemnification With Respect to Environmental 
                            Actions and Conditions.............................3
      Section 1.5.        Reductions for Insurance Proceeds and 
                            Other Recoveries...................................4
      Section 1.6.        Procedures for Defense, Settlement and
                            Indemnification of Third Party Claims..............4
      Section 1.7.        Additional Matters...................................5
      Section 1.8.        Survival of Indemnities..............................6
      Section 1.9.        Other Agreements Evidencing Indemnification 
                            Obligations........................................6

ARTICLE II. INSURANCE MATTERS..................................................6

      Section 2.1.        Roxio Insurance Coverage After the Separation Date...6
      Section 2.2.        Cooperation and Agreement Not to Release Carriers....6
      Section 2.3.        Procedures With Respect to Insured Roxio
                            Liabilities........................................7
      Section 2.4.        Cooperation..........................................7
      Section 2.5.        No Assignment or Waiver..............................7
      Section 2.6.        No Liability.........................................7
      Section 2.7.        Further Agreements...................................7
      Section 2.8.        Matters Governed by Employee Matters Agreement.......8

ARTICLE III. DISPUTE RESOLUTION................................................8

      Section 3.1.        Negotiation..........................................8
      Section 3.2.        Proceedings..........................................8
      Section 3.3.        Continuity of Service and Performance................9

ARTICLE IV. MISCELLANEOUS......................................................9

      Section 4.1.        Entire Agreement.....................................9
      Section 4.2.        Governing Law........................................9
      Section 4.3.        Notices..............................................9
      Section 4.4.        Counterparts........................................10
      Section 4.5.        Binding Effect; Assignment..........................10
      Section 4.6.        Severability........................................10
      Section 4.7.        Waiver of Breach....................................11
      Section 4.8.        Amendment and Execution.............................11
      Section 4.9.        Authority...........................................11
      Section 4.10.       Descriptive Headings................................11
      Section 4.11.       Gender and Number...................................11
      Section 4.12.       Additional Assurances...............................11
      Section 4.13.       Force Majeure.......................................11

                                      -i-

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                        TABLE OF CONTENTS (CONTINUED)

ARTICLE V. DEFINITIONS........................................................12

      Section 5.1.        Adaptec Business....................................12
      Section 5.2.        Adaptec Facilities..................................12
      Section 5.3.        Adaptec Group.......................................12
      Section 5.4.        Adaptec Indemnitees.................................12
      Section 5.5.        Action..............................................12
      Section 5.6.        Assets..............................................12
      Section 5.7.        Assignment Agreement................................12
      Section 5.8.        Employee Matters Agreement..........................12
      Section 5.9.        Environmental Actions...............................12
      Section 5.10.       Environmental Conditions............................12
      Section 5.11.       Environmental Laws..................................13
      Section 5.12.       Hazardous Materials.................................13
      Section 5.13.       Indemnifying Party..................................13
      Section 5.14.       Indemnitee..........................................13
      Section 5.15.       Insurance Policies..................................13
      Section 5.16.       Insurance Proceeds..................................13
      Section 5.17.       Insured Roxio Liability.............................13
      Section 5.18.       IPO Date............................................13
      Section 5.19.       IPO Liabilities.....................................13
      Section 5.20.       IPO Registration Statement..........................13
      Section 5.21.       Liabilities.........................................14
      Section 5.22.       Person..............................................14
      Section 5.23.       Pre-Separation Third Party Site Liabilities.........14
      Section 5.24.       Release.............................................14
      Section 5.25.       Roxio Business......................................14
      Section 5.26.       Roxio Contracts.....................................14
      Section 5.27.       Roxio Facilities....................................14
      Section 5.28.       Roxio Group.........................................14
      Section 5.29.       Roxio Indemnitees...................................14
      Section 5.30.       Roxio Liabilities...................................14
      Section 5.31.       Separation..........................................14
      Section 5.32.       Separation Agreement................................15
      Section 5.33.       Separation Date.....................................15
      Section 5.34.       Subsidiary..........................................15
      Section 5.35.       Tax Sharing Agreement...............................15
      Section 5.36.       Taxes...............................................15
      Section 5.37.       Third Party Claim...................................15




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                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

         This Indemnification and Insurance Matters Agreement (this "AGREEMENT")
is entered into on November ___, 2000 between Adaptec, Inc., a Delaware
corporation ("ADAPTEC"), and Roxio, Inc., a Delaware corporation ("ROXIO").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in ARTICLE V below. Adaptec and Roxio are
sometimes referred to herein individually as a "party" or collectively as the
"parties."

                                    RECITALS

         WHEREAS, Adaptec and its Subsidiaries have transferred or will transfer
to Roxio and its Subsidiaries effective as of the Separation Date, substantially
all of the assets of the Roxio Business in accordance with the Separation
Agreement.

         WHEREAS, the parties desire to set forth certain agreements regarding
indemnification and insurance.

         NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:

                                   ARTICLE I.

                        MUTUAL RELEASES; INDEMNIFICATION

         SECTION 1.1.      RELEASE OF PRE-CLOSING CLAIMS      .

         (a)      ROXIO RELEASE. Except as provided in SECTION 1.1(C) to this
Agreement, effective as of the Separation Date, Roxio does hereby, for itself
and as agent for each member of the Roxio Group, remise, release and forever
discharge the Adaptec Indemnitees from any and all Liabilities whatsoever,
whether at law or in equity (including any right of contribution), whether
arising under any contract or agreement, by operation of law or otherwise,
existing or arising from any acts or events occurring or failing to occur or
alleged to have occurred or to have failed to occur or any conditions existing
or alleged to have existed on or before the Separation Date, including in
connection with the transactions and all other activities to implement any of
the Separation, the IPO and the Distribution.

         (b)      ADAPTEC RELEASE. Except as provided in SECTION 1.1(c) to this
Agreement, effective as of the Separation Date, Adaptec does hereby, for itself
and as agent for each member of the Adaptec Group, remise, release and forever
discharge the Roxio Indemnitees from any and all Liabilities whatsoever, whether
at law or in equity (including any right of contribution), whether arising under
any contract or agreement, by operation of law or otherwise, existing or arising
from any acts or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed on or before the Separation Date, including in connection with the
transactions and all other activities to implement any of the Separation, the
IPO and the Distribution.

<PAGE>

         (c)      NO IMPAIRMENT. Nothing contained in SECTION 1.1(a) or (b)
shall impair any right of any Person to enforce the Separation Agreement or any
other Ancillary Agreement (including this Agreement), in each case in accordance
with its terms.

         (d)      NO ACTIONS AS TO RELEASED CLAIMS. Roxio agrees, for itself and
as agent for each member of the Roxio Group, not to make any claim or demand, or
commence any Action asserting any claim or demand, including any claim of
contribution or any indemnification, against Adaptec or any member of the
Adaptec Group, or any other Person released pursuant to SECTION 1.1(a), with
respect to any Liabilities released pursuant to SECTION 1.1(a). Adaptec agrees,
for itself and as agent for each member of the Adaptec Group, not to make any
claim or demand, or commence any Action asserting any claim or demand, including
any claim of contribution or any indemnification, against Roxio or any member of
the Roxio Group, or any other Person released pursuant to SECTION 1.1(b), with
respect to any Liabilities released pursuant to SECTION 1.1(b).

         (e)      FURTHER INSTRUMENTS. At any time, at the request of any other
party, each party shall cause each member of its respective Group to execute and
deliver releases reflecting the provisions hereof.

         SECTION 1.2.      INDEMNIFICATION BY ROXIO. Subject to SECTIONS 1.4
and 1.5 or as otherwise provided in this Agreement, Roxio shall, for itself and
as agent for each member of the Roxio Group, indemnify, defend (or, where
applicable, pay the defense costs for) and hold harmless the Adaptec Indemnitees
from and against any and all Liabilities that any third party seeks to impose
upon the Adaptec Indemnitees, or which are imposed upon the Adaptec Indemnitees,
and that (without duplication)

                  (i)      primarily relate to, arise out of or result from the
Roxio Business prior to the Separation Date other than any Liability which
arises out of or results from the intentional and willful misconduct of an
employee of the Adaptec Group other than an employee who becomes an employee of
the Roxio Group;

or that relate to, arise out of or result from any of the following items:

                  (ii)     the Roxio Business after the Separation Date;

                  (iii)    any Roxio Liability or any Roxio Contract other
than any Liability which arises out of or results from the intentional and
willful misconduct of an employee of the Adaptec Group prior to the
Separation Date, other than an employee who becomes an employee of the Roxio
Group;

                  (iv)     any breach by Roxio or any member of the Roxio Group
of the Separation Agreement or any of the Ancillary Agreements (including this
Agreement); and

                  (v)      any IPO Liabilities.

This SECTION 1.2 shall not apply to:

                  (i)      any Liability created under federal or state
securities laws arising from or related to statements made by Adaptec in filings
with the United States Securities and Exchange


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<PAGE>

Commission prior to the Separation Date or press releases issued by Adaptec
addressing the Roxio Business prior to the Separation Date; or

                  (ii)     any Liability indemnified under SECTION 1.4.

         SECTION 1.3.      INDEMNIFICATION BY ADAPTEC. Except as otherwise
provided in this Agreement, Adaptec shall, for itself and as agent for each
member of the Adaptec Group, indemnify, defend (or, where applicable, pay the
defense costs for) and hold harmless the Roxio Indemnitees from and against any
and all Liabilities that any third party seeks to impose upon the Roxio
Indemnitees, or which are imposed upon the Roxio Indemnitees, and that (without
duplication)

                  (i)      relate to, arise out of or result from the Roxio
Business prior to the Separation Date to the extent that such items are not the
responsibility of Roxio as an Indemnifying Party pursuant to SECTION 1.2(i)-(iv)
above;

or that relate to, arise out of or result from any of the following items:

                  (ii)     the Adaptec Business or any Liability of the Adaptec
Group other than the Roxio Liabilities;

                  (iii)    any breach by Adaptec or any member of the Adaptec
Group of the Separation Agreement or any of the Ancillary Agreements (including
this Agreement).

This SECTION 1.3 shall not apply to any Liability indemnified under SECTION 1.4.

         SECTION 1.4.      INDEMNIFICATION WITH RESPECT TO ENVIRONMENTAL
ACTIONS AND CONDITIONS.

         (a)      INDEMNIFICATION BY ROXIO. Roxio shall, for itself and as agent
for each member of the Roxio Group, indemnify, defend and hold harmless the
Adaptec Indemnitees from and against any and all Environmental Actions relating
to, arising out of or resulting from Environmental Conditions (i) arising out of
operations occurring on and after the Separation Date at any of the Roxio
Facilities, or (ii) on any of the Roxio Facilities arising from an event causing
contamination that first occurs on or after the Separation Date (including any
Release of Hazardous Materials occurring after the Separation Date that migrates
to any of the Roxio Facilities), except to the extent that such Environmental
Conditions arise out of the operations of the Adaptec Group on and after the
Separation Date.

         (b)      INDEMNIFICATION BY ADAPTEC. Adaptec shall, for itself and as
agent for each member of the Adaptec Group, indemnify, defend and hold harmless
the Roxio Indemnitees from and against any and all Environmental Actions
relating to, arising out of or resulting from any of the following items:

                  (i)      Environmental Conditions (x) existing on, under,
about or in the vicinity of any of the Roxio Facilities prior to the Separation
Date, or (y) arising out of operations occurring on or before the Separation
Date at any of the Roxio Facilities;


                                      -3-
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                  (ii)     Except as arising out of the operations of the Roxio
Group on and after the Separation Date, Environmental Conditions on, under,
about or arising out of operations occurring at any time, whether before or
after the Separation Date, at any of the Adaptec Facilities; and

                  (iii)    Pre-Separation Third Party Site Liabilities.

         (c)      AGREEMENT REGARDING PAYMENTS TO INDEMNITEE. In the event an
Indemnifying Party makes any payment to or on behalf of an Indemnitee with
respect to an Environmental Action for which the Indemnifying Party is obligated
to indemnify under this SECTION 1.4, and the Indemnitee subsequently receives
any payment from a third party on account of the same financial obligation
covered by the payment made by the Indemnifying Party for that Environmental
Action or otherwise diminishes the financial obligation, the Indemnitee will
promptly pay the Indemnifying Party the amount by which the payment made by the
Indemnifying Party, exceeds the actual cost of the financial obligation.

         SECTION 1.5.      REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER
RECOVERIES. The indemnification provided in SECTIONS 1.2, 1.3 and 1.4 shall not
apply to amounts recovered by an Indemnitee from any third party and/or
insurance policy by or on behalf of such Indemnitee in respect of the related
loss. Notwithstanding any other provisions of this Agreement, it is the
intention of the parties that no insurer or any other third party shall be (i)
entitled to a benefit it would not be entitled to receive in the absence of the
foregoing indemnification provisions, or (ii) relieved of the responsibility to
pay any claims for which it is obligated. If an Indemnitee has received the
payment required by this Agreement from an Indemnifying Party in respect of any
indemnifiable loss and later receives Insurance Proceeds or other amounts in
respect of such indemnifiable loss, then such Indemnitee shall hold such
Insurance Proceeds or other amounts in trust for the benefit of the Indemnifying
Party (or Indemnifying Parties) and shall pay to the Indemnifying Party, as
promptly as practicable after receipt, a sum equal to the amount of such
Insurance Proceeds or other amounts received, up to the aggregate amount of any
payments received from the Indemnifying Party pursuant to this Agreement in
respect of such indemnifiable loss (or, if there is more than one Indemnifying
Party, the Indemnitee shall pay each Indemnifying Party, its proportionate share
(based on payments received from the Indemnifying Parties) of such Insurance
Proceeds).

         SECTION 1.6.      PROCEDURES FOR DEFENSE, SETTLEMENT AND
INDEMNIFICATION OF THIRD PARTY CLAIMS.

         (a)      NOTICE OF CLAIMS. If a Adaptec Indemnitee or a Roxio
Indemnitee (as applicable) (an "Indemnitee") shall receive notice or otherwise
learn of the assertion by a Person (including any Governmental Authority) who is
not a member of the Adaptec Group or the Roxio Group of any claim or of the
commencement by any such Person of any Action (collectively, a "THIRD PARTY
CLAIM") with respect to which a party (an "INDEMNIFYING PARTY") may be obligated
to provide indemnification to such Indemnitee pursuant to SECTION 1.2, 1.3 or
1.4, or any other section of the Separation Agreement or any Ancillary Agreement
(including this Agreement), Adaptec and Roxio (as applicable) will ensure that
such Indemnitee shall give such Indemnifying Party written notice thereof within
30 days after becoming aware of such Third Party Claim. Any such notice shall
describe the Third Party Claim in reasonable detail. Notwithstanding the
foregoing, the delay or


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failure of any Indemnitee or other Person to give notice as provided in this
SECTION 1.6(a) shall not relieve the related Indemnifying Party of its
obligations under this ARTICLE I, except to the extent that such Indemnifying
Party is actually and substantially prejudiced by such delay or failure to give
notice.

         (b)      DEFENSE BY INDEMNIFYING PARTY. Except as otherwise
inconsistent with the provisions of any applicable Insurance Policy, an
Indemnifying Party will manage the defense of and may settle or compromise any
Third Party Claim. Within 30 days after the receipt of notice from an Indemnitee
in accordance with Section 1.6(a) (or sooner, if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the Indemnitee that the
Indemnifying Party will assume responsibility for managing the defense of such
Third Party Claim, which notice shall specify any reservations or exceptions.

         (c)      DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to
assume responsibility for managing the defense of a Third Party Claim, or fails
to notify an Indemnitee that it will assume responsibility as provided in
SECTION 1.6(a), such Indemnitee may manage the defense of such Third Party
Claim; PROVIDED, HOWEVER, that the Indemnifying Party shall reimburse all such
costs and expenses in the event it is ultimately determined that the
Indemnifying Party is obligated to indemnify the Indemnitee with respect to such
Third Party Claim.

         (d)      NO SETTLEMENT BY INDEMNITEE WITHOUT CONSENT. Unless the
Indemnifying Party has failed to manage the defense of the Third Party Claim in
accordance with the terms of this Agreement, no Indemnitee may settle or
compromise any Third Party Claim without the consent of the Indemnifying Party.

         (e)      NO CONSENT TO CERTAIN JUDGMENTS OR SETTLEMENTS WITHOUT
CONSENT. Notwithstanding any provision of this SECTION 1.6, no party shall
consent to entry of any judgment or enter into any settlement of a Third Party
Claim without the consent of the other party (such consent not to be
unreasonably withheld) if the effect of such judgment or settlement is to (A)
permit any injunction, declaratory judgment, other order or other nonmonetary
relief to be entered, directly or indirectly, against the other party or (B)
affect the other party in a material fashion due to the allocation of
Liabilities and related indemnities set forth in the Separation Agreement, this
Agreement or any other Ancillary Agreement.

         SECTION 1.7.         ADDITIONAL MATTERS.

         (a)      COOPERATION IN DEFENSE AND SETTLEMENT. With respect to any
Third Party Claim that implicates both Roxio and Adaptec in a material fashion
due to the allocation of Liabilities, responsibilities for management of defense
and related indemnities set forth in the Separation Agreement, this Agreement or
any of the Ancillary Agreements, the parties agree to cooperate fully and
maintain a joint defense (in a manner that will preserve the attorney-client
privilege with respect thereto) so as to minimize such Liabilities and defense
costs associated therewith. The party that is not responsible for managing the
defense of such Third Party Claims shall, upon reasonable request, be consulted
with respect to significant matters relating thereto and may, if necessary or
helpful, associate counsel to assist in the defense of such claims.


                                      -5-
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         (b)      SUBROGATION. In the event of payment by or on behalf of any
Indemnifying Party to or on behalf of any Indemnitee in connection with any
Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon whether
the Indemnifying Party has paid all or only part of the Indemnitee's Liability,
as to any events or circumstances in respect of which such Indemnitee may have
any right, defense or claim relating to such Third Party Claim against any
claimant or plaintiff asserting such Third Party Claim or against any other
person. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim.

         (c)      NOT APPLICABLE TO TAXES.  This Agreement shall not apply to
Taxes (which are covered by the Tax Sharing Agreement).

         SECTION 1.8.      SURVIVAL OF INDEMNITIES. Subject to SECTION 4.5, the
rights and obligations of the members of the Adaptec Group and the Roxio Group
under this ARTICLE I shall survive the sale or other transfer by any party of
any Assets or businesses or the assignment by it of any Liabilities or the sale
by any member of the Adaptec Group or the Roxio Group of the capital stock or
other equity interests of any Subsidiary to any Person.

         SECTION 1.9.      OTHER AGREEMENTS EVIDENCING INDEMNIFICATION
OBLIGATIONS. Adaptec hereby agrees to execute, for the benefit of any Roxio
Indemnitee, such documents as may be reasonably requested by such Roxio
Indemnitee, evidencing Adaptec's agreement that the indemnification obligations
of Adaptec set forth in this Agreement inure to the benefit of and are
enforceable by such Roxio Indemnitee. Roxio hereby agrees to execute, for the
benefit of any Adaptec Indemnitee, such documents as may be reasonably requested
by such Adaptec Indemnitee, evidencing Roxio's agreement that the
indemnification obligations of Roxio set forth in this Agreement inure to the
benefit of and are enforceable by such Adaptec Indemnitee.

                                   ARTICLE II.

                                INSURANCE MATTERS

         SECTION 2.1.      ROXIO INSURANCE COVERAGE AFTER THE SEPARATION DATE.
From and after the Separation Date, Roxio shall be responsible for obtaining and
maintaining insurance programs for its risk of loss and such insurance
arrangements shall be separate and apart from Adaptec's insurance programs.
Notwithstanding the foregoing, Adaptec, upon the request of Roxio, shall use all
commercially reasonable efforts to assist Roxio in the transition to its own
separate insurance programs from and after the Separation Date, and shall
provide Roxio with any information that is in the possession of Adaptec and is
reasonably available and necessary to either obtain insurance coverages for
Roxio or to assist Roxio in preventing unintended self-insurance, in whatever
form.

         SECTION 2.2.      COOPERATION AND AGREEMENT NOT TO RELEASE CARRIERS.
Each of Adaptec and Roxio will share such information as is reasonably necessary
in order to permit the other to manage and conduct its insurance matters in an
orderly fashion. Each of Adaptec and Roxio, at the request of the other, shall
cooperate with and use commercially reasonable efforts to assist the other in
recoveries for claims made under any insurance policy for the benefit of any
insured party, and


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<PAGE>

neither Adaptec nor Roxio, nor any of their Subsidiaries, shall take any action
which would intentionally jeopardize or otherwise interfere with either party's
ability to collect any proceeds payable pursuant to any insurance policy. Except
as otherwise contemplated by the Separation Agreement, this Agreement or any
Ancillary Agreement, after the Separation Date, neither Adaptec nor Roxio shall
(and shall ensure that no member of their respective Groups shall), without the
consent of the other, provide any insurance carrier with a release, or amend,
modify or waive any rights under any such policy or agreement, if such release,
amendment, modification or waiver would adversely affect any rights or potential
rights of any member of the other Group thereunder. However, nothing in this
SECTION 2.2 shall (A) preclude any member of any Group from presenting any claim
or from exhausting any policy limit, (B) require any member of any Group to pay
any premium or other amount or to incur any Liability, or (C) require any member
of any Group to renew, extend or continue any policy in force.

         SECTION 2.3.      PROCEDURES WITH RESPECT TO INSURED ROXIO LIABILITIES.

         (a)      REIMBURSEMENT. Adaptec shall seek Roxio's approval, which
approval shall not be unreasonably withheld, to incur attorneys fees, costs, or
any other amounts to pursue insurance recoveries from Insurance Policies for
insured Roxio Liabilities. Roxio will reimburse Adaptec for all such amounts
incurred to pursue insurance recoveries from Insurance Policies for Insured
Roxio Liabilities.

         (b)      MANAGEMENT OF CLAIMS. Except as otherwise inconsistent with
the provisions of any applicable Insurance Policy, the defense of claims, suits
or actions giving rise to potential or actual Insured Roxio Liabilities will be
managed (in conjunction with Adaptec's insurers, as appropriate) by the party
that would have had responsibility for managing such claims, suits or actions
had such Insured Roxio Liabilities been Roxio Liabilities.

         SECTION 2.4.      COOPERATION. Adaptec and Roxio will cooperate with
each other in all respects, and they shall execute any additional documents
which are reasonably necessary, to effectuate the provisions of this ARTICLE II.

         SECTION 2.5.      NO ASSIGNMENT OR WAIVER. This Agreement shall not
be considered as an attempted assignment of any policy of insurance or as a
contract of insurance and shall not be construed to waive any right or remedy of
any member of the Adaptec Group or the Roxio Group in respect of any Insurance
Policy or any other contract or policy of insurance.

         SECTION 2.6.      NO LIABILITY. Roxio does hereby, for itself and as
agent for each other member of the Roxio Group, agree that no member of the
Adaptec Group or any Adaptec Indemnitee shall have any Liability whatsoever as a
result of the insurance policies and practices of Adaptec and its Subsidiaries
as in effect at any time prior to the Separation Date, including as a result of
the level or scope of any such insurance, the creditworthiness of any insurance
carrier, the terms and conditions of any policy, the adequacy or timeliness of
any notice to any insurance carrier with respect to any claim or potential claim
or otherwise.

         SECTION 2.7.      FURTHER AGREEMENTS. The Parties acknowledge that
they intend to allocate financial obligations without violating any laws
regarding insurance, self-insurance or other financial


                                      -7-
<PAGE>

responsibility. If it is determined that any action undertake pursuant to the
Separation Agreement, this Agreement or any Ancillary Agreement is violative of
any insurance, self-insurance or related financial responsibility law or
regulation, the parties agree to work together to do whatever is necessary to
comply with such law or regulation while trying to accomplish, as much as
possible, the allocation of financial obligations as intended in the Separation
Agreement, this Agreement and any Ancillary Agreement.

         SECTION 2.8.      MATTERS GOVERNED BY EMPLOYEE MATTERS AGREEMENT. This
ARTICLE II shall not apply to any insurance policies that are the subject of the
Employee Matters Agreement.

                                  ARTICLE III.

                               DISPUTE RESOLUTION

         Resolution of any and all Disputes arising from or in connection with
this Agreement shall be exclusively governed by and settled in accordance with
the provisions of this ARTICLE III.

         SECTION 3.1.       NEGOTIATION. The parties shall make a good faith
attempt to resolve any Dispute arising out of or relating to this Agreement
through informal negotiation between appropriate representatives from each of
Adaptec and Roxio. If at any time either party feels that such negotiations are
not leading to a resolution of the Dispute, such party may send a notice to the
other party describing the Dispute and requesting a meeting of the senior
executives from each party. Within ten (10) business days after such notice is
given, each party shall select appropriate senior executives (e.g., director or
V.P. level) of each party who shall have the authority to resolve the matter and
shall meet to attempt in good faith to negotiate a resolution of the Dispute
prior to pursuing other available remedies. During the course of negotiations
under this SECTION 3.1, all reasonable requests made by one party to the other
for information, including requests for copies of relevant documents, will be
honored. The specific format for such negotiations will be left to the
discretion of the designated negotiating senior executives but may include the
preparation of agreed upon statements of fact or written statements of position
furnished to the other party. In the event that any Dispute arising out of or
related to this Agreement is not settled by the parties within thirty days after
the first meeting of the negotiating senior executives, either party may
commence litigation with respect to the Dispute. However, except as provided
below in SECTION 3.2, neither party shall commence litigation against the other
party to resolve the Dispute (i) until the parties try in good faith to settle
the Dispute by negotiation for at least thirty (30) days after the first meeting
of the negotiating senior executives or (ii) until forty (40) days after notice
of a Dispute is given by either party to the other party, whichever occurs
first.

         SECTION 3.2.       PROCEEDINGS. Any Dispute regarding the following
is not required to be negotiated prior to seeking relief from a court of
competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right; or
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to a party. However, the parties shall make a good faith
effort to negotiate such Dispute, according to SECTION 3.1, while such court
action is pending.


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         SECTION 3.3.      CONTINUITY OF SERVICE AND PERFORMANCE. Unless
otherwise agreed in writing, the parties will continue to provide service and
honor all other commitments under this Agreement and each Ancillary Agreement
during the course of dispute resolution pursuant to the provisions of this
ARTICLE III with respect to all matters not subject to such dispute, controversy
or claim.

                                   ARTICLE IV.

                                  MISCELLANEOUS

         SECTION 4.1.      ENTIRE AGREEMENT. This Agreement, the Master
Separation Agreement, the other Ancillary Agreements and the Exhibits and
Schedules referenced or attached hereto and thereto, constitute the entire
agreement between the parties with respect to the subject matter hereof and
shall supersede all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter hereof.

         SECTION 4.2.      GOVERNING LAW. This Agreement shall be construed in
accordance with and all Disputes hereunder shall be governed by the laws of the
State of California, excluding its conflict of law rules and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior Court
of Santa Clara County and/or the United States District Court for the Northern
District of California, San Jose Division, shall have jurisdiction and venue
over all Disputes between the parties that are permitted to be brought in a
court of law pursuant to SECTION 3.2.

         SECTION 4.3.      NOTICES. Any notice, demand, offer, request or
other communication required or permitted to be given by either party pursuant
to the terms of this Agreement shall be in writing and shall be deemed
effectively given the earlier of (i) when received, (ii) when delivered
personally, (iii) one (1) Business Day after being delivered by facsimile (with
receipt of appropriate confirmation), (iv) one (1) Business Day after being
deposited with a nationally recognized overnight courier service or (v) four (4)
days after being deposited in the U.S. mail, First Class with postage prepaid,
and addressed to the attention of:

         IF TO ADAPTEC, INC.:

                  Adaptec, Inc.
                  691 S. Milpitas Blvd.
                  Milpitas, CA 95035
                  Attention:  Vice President and General Counsel
                  Facsimile No.:  (408) 957-7137

         with a copy to:

                  Wilson Sonsini Goodrich & Rosati, Professional Corporation
                  650 Page Mill Road
                  Palo Alto, CA 94304-1050
                  Attention:  Henry P. Massey, Jr.
                  Facsimile No.:  650-493-6811


                                      -9-
<PAGE>

         IF TO ROXIO, INC.:

                  Roxio, Inc.
                  461 South Milpitas Blvd.
                  Milpitas, CA 95035
                  Attention:  [             ]
                  Facsimile No.:  [                 ]

         with a copy to:

                  Gray Cary Ware & Freidenrich LLP
                  400 Capitol Mall, Suite 2400
                  Sacramento, CA 95814
                  Attention:  Kevin A. Coyle
Facsimile No.:  916-930-3201

Adaptec and Roxio may substitute a different address or facsimile number, from
time to time, if such substitute is provided to the intended notice recipient in
writing by notice given in the manner provided in this SECTION 4.3.

         SECTION 4.4.      COUNTERPARTS. This Agreement, including the other
documents referred to herein, may be executed in counterparts via facsimile or
otherwise, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

         SECTION 4.5.      BINDING EFFECT; ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives and successors, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. This
Agreement may be enforced separately by each member of the Adaptec Group and
each member of the Roxio Group. Except as herein specifically provided to the
contrary, neither party may assign this Agreement or any rights or obligations
hereunder, without the prior written consent of the other party, and any such
assignment shall be void; provided, however, either party (or its permitted
successive assignees or transferees hereunder) may assign or transfer this
Agreement as a whole without consent to an entity that succeeds to all or
substantially all of the business or assets of such party to which this
Agreement relates.

         SECTION 4.6.       SEVERABILITY. The parties hereto have negotiated and
prepared the terms of this Agreement in good faith with the intent that each and
every one of the terms, covenants and conditions herein be binding upon and
inure to the benefit of the respective parties. Accordingly, if any one or more
of the terms, provisions, promises, covenants or conditions of this Agreement or
the application thereof to any person or circumstance shall be adjudged to any
extent invalid, unenforceable, void or voidable for any reason whatsoever by a
court of competent jurisdiction, such provision shall be as narrowly construed
as possible, and each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other persons
or circumstances shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law. To the extent this Agreement
is in violation of applicable law, then


                                      -10-
<PAGE>

the parties agree to negotiate in good faith to amend the Agreement, to the
extent possible consistent with its purposes, to conform to law.

         SECTION 4.7.      WAIVER OF BREACH. The waiver by either party
hereto of a breach or violation of any provision of this Agreement shall not
operate as, or be construed to constitute, a waiver of any subsequent breach of
the same or another provision hereof.

         SECTION 4.8.      AMENDMENT AND EXECUTION. This Agreement and
amendments hereto shall be in writing and executed in multiple copies via
facsimile or otherwise on behalf of Adaptec and Roxio by their respective duly
authorized officers and representatives. Each multiple copy shall be deemed an
original, but all multiple copies together shall constitute one and the same
instrument.

         SECTION 4.9.      AUTHORITY. Each of the parties hereto represents
to the other that (a) it has the corporate or other requisite power and
authority to execute, deliver and perform this Agreement, (b) the execution,
delivery and performance of this Agreement by it have been duly authorized by
all necessary corporate or other actions, (c) it has duly and validly executed
and delivered this Agreement, and (d) this Agreement is a legal, valid and
binding obligation, enforceable against it in accordance with its terms subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and general equity
principles.

         SECTION 4.10      DESCRIPTIVE HEADINGS. The headings contained in
this Agreement and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement
to an Article or a Section, such reference shall be to an Article or Section
of this Agreement unless otherwise indicated.

         SECTION 4.11      GENDER AND NUMBER. Whenever the context of this
Agreement requires, the gender of all words herein shall include the masculine,
feminine and neuter, and the number of all words herein shall include the
singular and plural.

         SECTION 4.12      ADDITIONAL ASSURANCES. Except as may be specifically
provided herein to the contrary, the provisions of this Agreement shall be
self-operative and shall not require further agreement by the parties; provided,
however, at the request of either party, the other party shall execute such
additional instruments and take such additional acts as are reasonable, and as
the requesting party may reasonably deem necessary, to effectuate this
Agreement.

         SECTION 4.13      FORCE MAJEURE. Neither party shall be liable or
deemed to be in default for any delay or failure in performance under this
Agreement or other interruption of service deemed to result, directly or
indirectly, from acts of God, civil or military authority, acts of public enemy,
war, accidents, explosions, earthquakes, floods, failure of transportation,
strikes or other work interruptions by either party's employees, or any other
similar cause beyond the reasonable control of either party unless such delay or
failure in performance is expressly addressed elsewhere in this Agreement.


                                      -11-
<PAGE>

                                   ARTICLE V.

                                   DEFINITIONS

         SECTION 5.1.       ADAPTEC BUSINESS. "ADAPTEC BUSINESS" has the
meaning set forth in Section 7.1 of the Separation Agreement.

         SECTION 5.2.       ADAPTEC FACILITIES. "ADAPTEC FACILITIES" means all
of the real property and improvements thereon owned or occupied at any time on
or before the Separation Date by any member of the Adaptec Group, whether for
the Adaptec Business or the Roxio Business, excluding the Roxio Facilities.

         SECTION 5.3.       ADAPTEC GROUP. "ADAPTEC GROUP" means Adaptec, each
Subsidiary of Adaptec (other than any member of the Roxio Group) immediately
after the Separation Date and each Person that becomes a Subsidiary of Adaptec
after the Separation Date.

         SECTION 5.4.       ADAPTEC INDEMNITEES. "ADAPTEC INDEMNITEES" means
Adaptec, each member of the Adaptec Group and each of their respective
directors, officers and employees.

         SECTION 5.5.       ACTION. "ACTION" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international governmental authority or any
arbitration or mediation tribunal.

         SECTION 5.6.       ASSETS. "ASSETS" has the meaning set forth in
Section 5.4 of the Assignment Agreement.

         SECTION 5.7.       ASSIGNMENT AGREEMENT. "ASSIGNMENT AGREEMENT" means
the General Assignment and Assumption Agreement attached as Exhibit C to the
Separation Agreement.

         SECTION 5.8.       EMPLOYEE MATTERS AGREEMENT. "EMPLOYEE MATTERS
AGREEMENT" means the Employee Matters Agreement attached as Exhibit E to the
Separation Agreement.

         SECTION 5.9.       ENVIRONMENTAL ACTIONS. "ENVIRONMENTAL ACTIONS"
means any notice, claim, act, cause of action, order, decree or investigation by
any third party (including, without limitation, any Governmental Authority)
alleging potential liability (including potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
damage to flora or fauna caused by Environmental Conditions, real property
damages, personal injuries or penalties) arising out of, based on or resulting
from the Release of or exposure of any individual to any Hazardous Materials.

         SECTION 5.10.      ENVIRONMENTAL CONDITIONS. "ENVIRONMENTAL CONDITIONS"
means the presence in the environment, including the soil, groundwater, surface
water or ambient air, of any Hazardous Material at a level which exceeds any
applicable standard or threshold under any Environmental Law or otherwise
requires investigation or remediation (including, without limitation,
investigation, study, health or risk assessment, monitoring, removal, treatment
or transport) under any applicable Environmental Laws.


                                      -12-
<PAGE>

         SECTION 5.11.      ENVIRONMENTAL LAWS. "ENVIRONMENTAL LAWS" means all
laws and regulations of any Governmental Authority with jurisdiction that relate
to the protection of the environment (including ambient air, surface water,
ground water, land surface or subsurface strata) including laws and regulations
relating to the Release of Hazardous Materials, or otherwise relating to the
treatment, storage, disposal, transport or handling of Hazardous Materials, or
to the exposure of any individual to a Release of Hazardous Materials.

         SECTION 5.12.      HAZARDOUS MATERIALS. "HAZARDOUS MATERIALS" means
chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and
biological materials, hazardous substances, petroleum and petroleum products or
any fraction thereof.

         SECTION 5.13.      INDEMNIFYING PARTY. "INDEMNIFYING PARTY" has the
meaning set forth in Section 1.6(a) hereof.

         SECTION 5.14.      INDEMNITEE. "INDEMNITEE" has the meaning set forth
in Section 1.6(a) hereof.

         SECTION 5.15.      INSURANCE POLICIES. "INSURANCE POLICIES" means
insurance policies pursuant to which a Person makes a true risk transfer to an
insurer.

         SECTION 5.16.      INSURANCE PROCEEDS. "INSURANCE PROCEEDS" means
those monies:

         (a)      received by an insured from an insurance carrier; or

         (b)      paid by an insurance carrier on behalf of the insured;

from Insurance Policies.

         SECTION 5.17.      INSURED ROXIO LIABILITY. "Insured Roxio Liability"
means any Roxio Liability to the extent that (i) it is covered under the terms
of Adaptec's Insurance Policies in effect prior to the Separation Date, and (ii)
Roxio is not a named insured under, or otherwise entitled to the benefits of,
such Insurance Policies.

         SECTION 5.18.      IPO DATE. "IPO DATE" means the date on which Roxio
effects its initial public offering of common stock. Scheduled to occur on or
before December 15, 2000.

         SECTION 5.19.      IPO LIABILITIES. "IPO LIABILITIES" means any
Liabilities relating to, arising out of or resulting from any untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, with respect to all information contained in
the IPO Registration Statement or any preliminary, final or supplemental
prospectus forming a part of a IPO Registration Statement.

         SECTION 5.20.      IPO REGISTRATION STATEMENT. "IPO REGISTRATION
STATEMENT" means the registration statement on Form S-1 pursuant to the
Securities Act to be filed with the SEC registering the shares of common stock
of Roxio to be issued in the IPO, together with all amendments thereto.


                                      -13-
<PAGE>

         SECTION 5.21.      LIABILITIES. "LIABILITIES" has the meaning set forth
in Section 5.24 of the Assignment Agreement.

         SECTION 5.22.      PERSON. "PERSON" means an individual, a partnership,
a corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

         SECTION 5.23.      PRE-SEPARATION THIRD PARTY SITE LIABILITIES.
"PRE-SEPARATION THIRD PARTY SITE LIABILITIES" means any and all Environmental
Actions arising out of Hazardous Materials found on, under or about any landfill
any waste, storage, transfer or recycling site and resulting from or arising out
of Hazardous Materials stored, treated, recycled disposed or otherwise handled
at such site prior to the Separation Date (whether for the operation of the
Roxio Business or for the operation of any past or presently (as of the date
hereof) existing Adaptec Business as operated on or before the Separation Date).

         SECTION 5.24.      RELEASE. "RELEASE" means any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, groundwater, wetlands, land or subsurface strata.

         SECTION 5.25.      ROXIO BUSINESS. "ROXIO BUSINESS" means the business
and operations of Roxio, as described in the IPO Registration Statement and
except as otherwise expressly provided herein, any terminated, divested or
discontinued businesses or operations that at the time of termination,
divestiture or discontinuation primarily related to the Roxio Business as then
conducted.

         SECTION 5.26.      ROXIO CONTRACTS. "ROXIO CONTRACTS" has the meaning
set forth in SECTION 5.35 of the Assignment Agreement.

         SECTION 5.27.      ROXIO FACILITIES. "ROXIO FACILITIES" means all of
those facilities to be transferred to Roxio on the Separation Date as set forth
on Schedule 1 to the Real Estate Matters Agreement.

         SECTION 5.28.      ROXIO GROUP. "ROXIO GROUP" has the meaning set forth
in Section 7.30 of the Separation Agreement.

         SECTION 5.29.      ROXIO INDEMNITEES. "ROXIO INDEMNITEES" means Roxio,
each member of the Roxio Group and each of their respective directors, officers
and employees.

         SECTION 5.30.      ROXIO LIABILITIES. "ROXIO LIABILITIES" has the
meaning set forth in Section 1.3 of the Assignment Agreement.

         SECTION 5.31.      SEPARATION. "SEPARATION" has the meaning set forth
in the Recitals of the Separation Agreement.


                                      -14-
<PAGE>

         SECTION 5.32.      SEPARATION AGREEMENT. "SEPARATION AGREEMENT"
means the Master Separation and Distribution Agreement dated as of September
__, 2000, of which this is an Exhibit thereto.

         SECTION 5.33.      SEPARATION DATE. "SEPARATION DATE" has the meaning
set forth in Section 7.32 of the Separation Agreement.

         SECTION 5.34.      SUBSIDIARY. "SUBSIDIARY" has the meaning set forth
in Section 7.33 of the Separation Agreement.

         SECTION 5.35.      TAX SHARING AGREEMENT. "TAX SHARING AGREEMENT" means
the Tax Sharing Agreement, attached as EXHIBIT F to the Separation Agreement.

         SECTION 5.36.      TAXES. "TAXES" has the meaning set forth in the
Tax Sharing Agreement.

         SECTION 5.37.      THIRD PARTY CLAIM. "THIRD PARTY CLAIM" has the
meaning set forth in Section 1.6(a) of this Agreement.

                         [SIGNATURES ON FOLLOWING PAGE]


                                      -15-
<PAGE>

         IN WITNESS WHEREOF, each of the parties has caused this Indemnification
and Insurance Matters Agreement to be executed on its behalf by its officers
thereunto duly authorized on the day and year first above written.

ADAPTEC, INC.                              ROXIO, INC.

By:                                        By:
   ----------------------------------         ----------------------------------
Name:                                      Name:
      -------------------------------           --------------------------------
Title:                                     Title:
       ------------------------------            -------------------------------