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Sample Business Contracts

Remote Merchant Integration Program Agreement - Yahoo! Inc. and ARTISTdirect Inc.

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           YAHOO! REMOTE MERCHANT INTEGRATION (RMI) PROGRAM AGREEMENT

THIS RMI AGREEMENT (the " RMI Agreement") is made as of this 24th day of
December, 1999 (the "Effective Date") between YAHOO! INC. ("Yahoo!"), a Delaware
corporation, and ARTISTdirect, Inc. ("Merchant"), a Delaware corporation. In
consideration of the mutual promises contained herein, the parties agree as
follows:

1.  MERCHANT PRODUCT INFORMATION. Merchant will provide to Yahoo!, or will
    permit Yahoo! to download, information relating to Merchant products in
    accordance with Yahoo!'s technical and formatting specifications. Such
    information will include without limitation a Merchant identifier, product
    name, product description, product price, URL for the Web page on the
    Merchant Network (as defined below) that features the product, URL for the
    Web page on the Merchant Network that contains the product image and, if
    applicable, any warranty notices or disclaimers, product availability,
    return information, sizes, colors, SKU numbers, Web pages and graphic files,
    including but not limited to graphical brand features of Merchant
    (collectively referred to as "Merchant Product Information"). Merchant
    agrees to update all Merchant Product Information in accordance with
    Yahoo!'s technical and formatting specifications and in a timely manner that
    is mutually agreed upon by the parties. If Merchant provides Merchant
    Product Information to Yahoo! on or about the Effective Date of this RMI
    Agreement, Yahoo! will host Merchant Product Information on Yahoo! servers
    and include Merchant Product Information in Yahoo!'s U.S. based on-line
    shopping property (referred to as "Yahoo! Shopping" or the "Service") within
    forty-five (45) days after the Effective Date of this RMI Agreement. If
    Merchant does not provide Merchant Product Information to Yahoo! on or about
    the Effective Date of this RMI Agreement, the parties will use commercially
    reasonable efforts to include Merchant Production Information in Yahoo!
    Shopping as soon as possible, but no sooner than forty-five (45) days after
    the Effective Date of this RMI Agreement. Yahoo! is solely responsible for
    the design, layout, posting and maintenance of Yahoo! Shopping.

2.  MERCHANT PAGES. Merchant will permit Yahoo! to download and display, via a
    "Proxy Server" or other means, Web pages from the Web sites that comprise
    the network operated by or for Merchant (the "Merchant Network"), currently
    located at http://www.artistdirect.com. The parties will use commercially
    reasonable efforts to isolate and include in the Service only those Web
    sites on the Merchant Network that sell products on-line, including but not
    limited to the Web site currently located at
    http://www.ubl.com/fp.asp?layout=front_page and any Web site that sells
    products on-line relating to a particular recording artist (e.g.,
    www.beckdirect.com). Web pages from the Merchant Network, as displayed by
    Yahoo! in accordance with this RMI Agreement, are referred to as "Merchant
    Pages." Within forty-five (45) days after the Effective Date of this RMI
    Agreement, Yahoo! will host Merchant Pages on Yahoo! servers and include
    Merchant Pages in Yahoo! Shopping.

3.  RESPONSIBILITIES AND RIGHTS WITH RESPECT TO MERCHANT PRODUCT INFORMATION AND
    MERCHANT PAGES. In the event that Yahoo! becomes aware of a potential
    violation of law or a conflict with Yahoo!'s advertising guidelines arising
    from any hypertext links or third party advertising included in the Merchant
    Pages, Yahoo! will notify Merchant and may request that Merchant remove or
    replace such hypertext links or third party advertising on Merchant Pages.
    If the parties cannot resolve the matter within three (3) business days of
    Yahoo!'s notice to Merchant, Yahoo! reserves the right to remove or disable
    such hypertext links or third party advertising on Merchant Pages. The
    foregoing only applies to Merchant Pages and does not affect operation of


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    or any material on the Merchant Network.

4.  CUSTOMER ORDER INFORMATION.

    (a)  ORDER PLACEMENT AND FULFILLMENT. Users of Yahoo! Shopping may search
         for and navigate to Merchant Product Information and Merchant Pages via
         Yahoo! Shopping pages designed and hosted by Yahoo!. Users of Yahoo!
         Shopping will order items to be purchased from Merchant via Merchant
         Pages. Check-out for orders also will be conducted on Merchant Pages
         (the "Check-out Pages"). Information relating to the purchase of
         Merchant products via the Service, including product name, product
         quantity, amount paid, user's proper name, shipping address, billing
         address, email address and credit card information ("Customer Order
         Information") will be transmitted to Merchant. Merchant will notify
         each user via email within twenty-four (24) hours after Merchant
         receives the Customer Order Information whether the order can or cannot
         be fulfilled. Merchant will be solely responsible for all products
         offered by Merchant on Yahoo! Shopping and all activities related to
         such products, including without limitation billing, shipping and
         fulfillment of goods, returns and customer service and for any acts or
         omissions that occur in connection with such product offerings. During
         the Term (as defined below), if Merchant intends to modify the
         Check-out Pages or otherwise redesign the Merchant Network, Merchant
         will provide Yahoo! with (i) at least three (3) business days written
         notice prior to implementing such modification or redesign, unless such
         modification or redesign is necessary to avoid liability for third
         party claims, and (ii) reasonable technical assistance, as Yahoo! may
         reasonably request, to ensure that the Service will be uninterrupted.
         Merchant acknowledges that Merchant's failure to provide Yahoo! with at
         least three (3) business days notice prior to implementing such
         modification or redesign may adversely affect operation of Merchant
         Pages, including but not limited to Check-out Pages, and users' ability
         to search for and navigate to Merchant Production Information and
         Merchant Pages.

    (b)  PRIVACY AND CONSUMER PROTECTION. Merchant agrees to implement adequate
         security protections to ensure the privacy of Customer Order
         Information. Merchant further agrees (i) to post a privacy policy on
         the Merchant Network that, at a minimum, discloses any and all uses of
         personal information collected from users by Merchant, including but
         not limited to any uses of personal information collected during a
         transaction that is cancelled or otherwise not completed by the user;
         (ii) to place a prominent notice on any Check-out Pages on which
         Merchant collects personal information from users that such information
         is being collected; (iii) to provide a hypertext link on all Check-out
         Pages to Merchant's privacy policy; and (iv) to use Customer Order
         Information only as expressly permitted by Merchant's privacy policy.
         If a user requests, or if Yahoo! conveys such request on behalf of the
         user, that Merchant remove personal information relating to any user
         from Merchant's database and other records, Merchant agrees to remove
         such information promptly from its database or other records.

5.  INFORMATION MAINTAINED BY YAHOO! AND RELEVANT TO THE TRANSACTION. In the
    event that a registered Yahoo! user places an order for a Merchant product
    via the Service, Yahoo! already may maintain information about the user in
    Yahoo!'s proprietary databases that is relevant to the transaction,
    including but not limited to that user's proper name, shipping address,
    billing address, email address and credit card information. Merchant
    acknowledges that Yahoo! may give registered Yahoo! users the option to have
    certain input fields on Check-out Pages that


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    request Customer Order Information "populated" with applicable information
    about that registered Yahoo! user from Yahoo!'s proprietary databases. For
    clarity, the parties understand that such "population" by Yahoo! will not
    affect Merchant's ownership of Customer Order Information, as set forth in
    Section 7(c), and will not transfer, impair or otherwise limit Yahoo!'s
    rights in the "populated" information.

6.  REGISTRATION OF UNREGISTERED YAHOO! USERS WHO PURCHASE FROM MERCHANT VIA THE
    SERVICE. Merchant agrees that users who are not registered with Yahoo! may
    be given the opportunity to register with Yahoo! before completing a
    discrete transaction with Merchant via the Service; provided, however, that
    (a) such opportunity to register may be presented during the check-out
    process for the underlying transaction only to the extent that Yahoo! places
    a hypertext link to its registration page in the Yahoo! branded toolbar on
    Merchant Pages, unless otherwise mutually agreed upon by the parties, and
    (b) there will be no obligation to register. The Yahoo! branded toolbar will
    be substantially similar in form to the example set forth in Exhibit 1 and
    will include other hypertext links that provide access to additional
    features of the Service only.

7.  MERCHANT LICENSES TO YAHOO!.

    (a)  MERCHANT PRODUCT INFORMATION. Subject to the limitations set forth in
         this Section 7(a), Merchant hereby grants to Yahoo! a worldwide,
         non-transferable, non-sublicensable, non-exclusive license to use,
         display, modify, make derivative works from, reproduce and distribute
         Merchant Product Information and any portions thereof and any
         derivative works therefrom during the Term solely for the purpose of
         providing features of the Service, including without limitation the
         right to incorporate Merchant Product Information into a database and
         the right to display in any manner the results of search queries and
         comparisons conducted by users of the Service. Yahoo! may modify and
         create derivative works from Merchant Product Information only to the
         extent reasonably necessary to fit the format of the Service or to
         provide features of the Service. Merchant also grants to Yahoo! (i) the
         right to maintain such Merchant Product Information on Yahoo! servers
         during the Term; (ii) the right to authorize the downloading and
         printing of Merchant Product Information, or any portion thereof, by
         users; and (iii) subject to Merchant's prior approval, which will not
         be unreasonably withheld, the right to use Merchant Product Information
         for purposes of promoting Merchant products, Yahoo! Shopping or Yahoo!
         generally.

    (b)  MERCHANT PAGES. Subject to the limitations set forth in this Section
         7(b), Merchant grants to Yahoo! a worldwide, non-transferable,
         non-sublicensable, non-exclusive license to use, display, modify,
         reproduce and distribute Merchant Pages during the Term solely for the
         purpose of responding to particular queries by users of the Service.
         Notwithstanding the foregoing, Yahoo! may modify Merchant Pages only
         pursuant to Section 3 above and to the extent necessary to format
         Merchant Pages for the Service or to provide features of the Service by
         placing a Yahoo! branded toolbar on Merchant Pages in a manner
         substantially similar to the example set forth in Exhibit 1; provided,
         however, that no modification will affect the substance or accuracy of
         the underlying content on Merchant Pages. Merchant also grants to
         Yahoo! (i) the right to designate and display a Yahoo! URL for all
         Merchant Pages and (ii) subject to Merchant's prior approval, the right
         to redirect certain hypertext links on Merchant Pages to certain pages
         of the Service.

    (c)  CUSTOMER ORDER INFORMATION. Merchant owns Customer Order Information
         and grants to


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         Yahoo! a perpetual, worldwide, sublicensable, non-exclusive license to
         use Customer Order Information in aggregate form, such that Customer
         Order Information is not individually attributable to Merchant or to
         individual users as customers of Merchant specifically, for research,
         marketing or other promotional purposes. Yahoo!'s use of Customer Order
         Information under this Section 7(c) will comply with the privacy
         principles of TRUSTe, currently located at
         http://www.truste.org/webpublishers/pub_principles.html.

8.  YAHOO! LICENSES TO MERCHANT. Yahoo! may provide Merchant with access to
    certain software owned by Yahoo! (the "Software") in order to, among other
    things, facilitate the transmission of Customer Order Information to
    Merchant. In the event that Yahoo! provides Merchant with access to
    Software, the terms that govern such access to, and use of, said Software
    will be mutually agreed upon by the parties.

9.  CONFIDENTIALITY. Each party acknowledges that Confidential Information may
    be disclosed to the other party during the Term of this RMI Agreement.
    "Confidential Information" means any confidential, proprietary or trade
    secret information relating to this RMI Agreement or disclosed by one party
    to the other party during the Term of this RMI Agreement, including but not
    limited to material terms of this RMI Agreement, information about users
    (e.g. Customer Order Information), guidelines and specifications, technical
    processes, source codes, product designs, sales, cost and other unpublished
    financial information, product and business plans, projections and marketing
    data that is not (a) generally known to the public; (b) disclosed in public
    materials or otherwise in the public domain through no fault of the
    receiving party; (c) lawfully known to or independently developed by the
    receiving party prior to disclosure by the disclosing party; (d) lawfully
    obtained from a third party; or (e) required or reasonably advised to be
    disclosed by law. Except as otherwise expressly provided in this RMI
    Agreement, each party agrees that (i) it will treat all Confidential
    Information of the other party with the same degree of care as it accords to
    its own Confidential Information and (ii) it will disclose Confidential
    Information of the other party only to those of its agents or employees who
    need to know such Confidential Information and who have agreed previously,
    either as a condition of employment or in order to obtain the Confidential
    Information, to be bound by terms substantially similar to those of this
    Section 10. Merchant acknowledges and agrees that Yahoo! may access
    information related to Merchant on Yahoo! servers during the Term as
    necessary to identify or resolve technical problems or respond to complaints
    about the Service.

10. PAYMENTS TO YAHOO!. Merchant will pay to Yahoo! one percent (1%) of Revenue
    received by Merchant. "Revenue" means the total net retail amount of sales,
    excluding shipping, handling, taxes, credit card processing fees,
    fulfillment fees charged by third party suppliers (which will not exceed
    $3.00 per item without Yahoo!'s prior written consent, which will not be
    unreasonably withheld), refunds and rebates paid, and any chargebacks for
    returned or canceled products, from all purchases of Merchant products that
    are conducted on the Service. Merchant will pay such Revenue share amounts
    quarterly within fifteen (15) days of the end of each quarter and will
    accompany each payment with a written report certified by an officer of
    Merchant that includes (a) the total retail dollar amount of sales made via
    the Service and (b) the calculation of Revenue share due to Yahoo!. Merchant
    will maintain complete and accurate records in accordance with generally
    accepted methods of accounting for all such transactions and will allow
    Yahoo!, at its own expense, to direct an independent certified public
    accounting firm to inspect and audit such records during normal business
    hours with written notice to Merchant. Such audits will not be




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    required more often than one (1) time per twelve (12) month period, except
    that Yahoo! may audit Merchant within three (3) months of any audit in which
    a discrepancy of ten percent (10%) or greater is discovered. If such a
    discrepancy is discovered, Merchant will pay the amount of the error to
    Yahoo! within ten (10) days of such error's discovery. Yahoo! will pay the
    cost of any audit conducted in accordance with this Section 10, except that
    Merchant will pay such audit's cost, as long as such cost is computed on an
    hourly and not contingent basis, if a discrepancy of ten percent (10%) or
    greater was discovered in the immediately preceding audit. All fees are
    payable in U.S. dollars. Late payments will bear interest at the rate of one
    percent (1%) per month (or the highest rate permitted by law, if less). In
    the event of any failure by Merchant to make payment, Merchant will be
    responsible for all reasonable expenses (including attorneys' fees) incurred
    by Yahoo! in collecting such amounts.

11. TERM, TERMINATION AND MODIFICATION. This RMI Agreement will become effective
    as of the Effective Date and will, unless sooner terminated as provided
    herein or as otherwise agreed, remain effective for at least twenty-four
    (24) months from the date on which Merchant Pages become publicly available
    via the Service and continue on a month to month basis thereafter until
    terminated by either party with no less than thirty (30) days written notice
    (the "Term"). No amendment to any provision of this RMI Agreement will be
    effective unless in writing and signed by both parties. Upon termination,
    Yahoo! will delete from its servers any and all information related to
    Merchant, including but not limited to Merchant Product Information, but
    excluding Customer Order Information retained in accordance with Section
    7(c). Sections 4(b), 7(c), 9, 10 (to the extent that Yahoo! is owed fees
    that arose during the Term and to the extent that Yahoo!'s audit right will
    survive for one year after termination), 11 and 13 through 15 will survive
    termination or expiration of this RMI Agreement.

12. REPRESENTATIONS AND WARRANTIES.

    (a)  BY MERCHANT. Merchant represents and warrants that it (i) has full
         power and authority under all relevant laws and regulations to offer,
         sell and distribute the products offered by it, including but not
         limited to holding all necessary licenses from all necessary
         jurisdictions to engage in the advertising and sale of such products,
         and (ii) will not engage in any activities: (A) that constitute or
         encourage a violation of any applicable law or regulation, including
         but not limited to the sale of illegal goods or the violation of export
         control or obscenity laws and (B) that are in any way connected with
         the transmission of the unsolicited distribution of email or with any
         unethical marketing practices.

    (b)  BY YAHOO!. Yahoo! represents and warrants that it (i) has full power
         and authority under all relevant laws and regulations to offer the
         Service and (ii) will not engage in any activities that are in any way
         connected with the transmission of the unsolicited distribution of
         email or with any unethical marketing practices.

13. INDEMNITY.

    (a)  BY MERCHANT. Merchant, at its own expense, will indemnify, defend and
         hold harmless Yahoo! and its employees, representatives, agents and
         affiliates against any claim, demand,



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         action or other proceeding brought by any third party against Yahoo! to
         the extent that such claim, demand, action or other proceeding is based
         on, or arises out of, (i) any products offered, distributed or sold by
         Merchant in connection with the Service; (ii) any mistake, error or
         omission made by Merchant, including but not limited to data corruption
         and/or wrongful disclosure of Customer Order Information; or (iii) any
         infringement of the United States copyright, trademark or other
         proprietary right of a third party established under United States law
         that results from Merchant's use of any content, trademarks, service
         marks, trade names, copyrighted or patented material, or other
         intellectual property used by Merchant; provided, however, that in any
         such case: (A) Yahoo! provides Merchant with prompt written notice of
         any such claim; (B) Yahoo! permits Merchant to assume and control the
         defense of such action or proceeding upon Merchant's written notice to
         Yahoo! of its intention to indemnify; and (C) upon Merchant's written
         request, and at no expense to Yahoo!, Yahoo! will provide Merchant with
         all available information and assistance reasonably necessary for
         Merchant to defend such claim. Merchant will not enter into any
         settlement or compromise of any such claim, which settlement or
         compromise would result in any liability to Yahoo!, without Yahoo!'s
         prior written consent, which will not be unreasonably withheld.
         Merchant will pay any and all costs, damages and expenses, including
         but not limited to reasonable attorneys' fees and costs awarded against
         or otherwise incurred by Yahoo! in connection with or arising from any
         such claim, demand, action or other proceeding. It is understood and
         agreed that Yahoo! will not be required to edit or review for accuracy
         or appropriateness any content provided by Merchant.

    (b)  BY YAHOO!. Yahoo!, at its own expense, will indemnify, defend and hold
         harmless Merchant and its employees, representatives, agents and
         affiliates against any claim, demand, action or other proceeding
         brought by any third party against Merchant to the extent that such
         claim, demand, action or other proceeding is based on, or arises out
         of, (i) any corruption of Merchant Product Information by Yahoo! that
         prevents the successful completion of any transaction between Merchant
         and a potential customer of Merchant; (ii) any wrongful disclosure of
         Customer Order Information by Yahoo!; or (iii) any infringement of the
         United States copyright, trademark or other proprietary right of a
         third party established under United States law that results from
         Yahoo!'s use of Yahoo! trademarks, service marks, logos or other
         distinctive Yahoo! brand features; provided, however, that in any such
         case: (A) Merchant provides Yahoo! with prompt written notice of any
         such claim; (B) Merchant permits Yahoo! to assume and control the
         defense of such action or proceeding upon Yahoo!'s written notice to
         Merchant of its intention to indemnify; and (C) upon Yahoo!'s written
         request, and at no expense to Merchant, Merchant will provide Yahoo!
         with all available information and assistance reasonably necessary for
         Yahoo! to defend such claim. Yahoo! will not enter into any settlement
         or compromise of any such claim, which settlement or compromise would
         result in any liability to Merchant, without Merchant's prior written
         consent, which will not be unreasonably withheld. Yahoo! will pay any
         and all costs, damages and expenses, including but not limited to
         reasonable attorneys' fees and costs awarded against or otherwise
         incurred by Merchant in connection with or arising from any such claim,
         demand, action or other proceeding.

14. DISCLAIMER OF WARRANTIES AND LIMITATIONS OF LIABILITY AND DAMAGES. THE
    SERVICE IS PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS WITHOUT
    WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,


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    INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
    PARTICULAR PURPOSE. NEITHER THIS RMI AGREEMENT NOR ANY DOCUMENTATION
    FURNISHED UNDER IT IS INTENDED TO EXPRESS OR IMPLY ANY WARRANTY THAT THE
    SERVICES WILL BE UNINTERRUPTED, TIMELY OR ERROR-FREE.

    EXCEPT FOR OBLIGATIONS UNDER SECTION 13, NEITHER PARTY NOR ITS PARENTS,
    SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND
    AGENTS WILL BE LIABLE, UNDER ANY CIRCUMSTANCES OR LEGAL THEORIES WHATSOEVER,
    FOR ANY LOSS OF BUSINESS, PROFITS OR GOODWILL, LOSS OF USE OR DATA,
    INTERRUPTION OF BUSINESS OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
    CONSEQUENTIAL DAMAGES OF ANY CHARACTER, EVEN IF THAT PARTY IS AWARE OF THE
    RISK OF SUCH DAMAGES. IN ADDITION, AND EXCEPT FOR OBLIGATIONS UNDER SECTION
    13, NEITHER PARTY WILL BE LIABLE UNDER ANY CIRCUMSTANCES OR LEGAL THEORIES
    FOR ANY DAMAGES THAT RESULT IN ANY WAY FROM MERCHANT'S USE OR INABILITY TO
    USE THE SERVICE, OR THAT RESULT FROM ERRORS, DEFECTS, OMISSIONS, DELAYS IN
    OPERATION OR TRANSMISSION, OR ANY OTHER FAILURE OF PERFORMANCE OF THE
    SERVICE.

15. MISCELLANEOUS. Any and all press releases and other public announcements
    relating to this RMI Agreement and/or the underlying transactions between
    Yahoo! and Merchant and the method and timing of such announcements must be
    approved in advance by the parties in writing. Any notice or communication
    will be (a) in writing; (b) sent by overnight or certified mail return
    receipt requested; and (c) deemed delivered to the party to whom such
    communication is directed, if by overnight mail, on the date delivered or,
    if by certified mail, two (2) days following the date sent. If to Yahoo!,
    such notices will be addressed to 3420 Central Expressway, Santa Clara, CA
    95051. If to Merchant, such notices will be addressed to 17835 Ventura
    Boulevard, Suite 310, Encino CA 91316, Attention Chief Operating Officer,
    with a copy to Lenard & Gonzalez LLP, 1900 Avenue of the Stars, 25th Floor,
    Los Angeles, CA 90067, Attention: Allen D. Lenard, Esq. The section headings
    in this RMI Agreement are for convenience only and may not be relied upon to
    construe or otherwise interpret this RMI Agreement. This RMI Agreement
    constitutes the final, complete and exclusive statement of the agreement
    between the parties with respect to its subject matter and supersede all
    previous proposals. This RMI Agreement and the relationship between Merchant
    and Yahoo! will be governed by the laws of the state of California without
    regard to its conflict of law provisions. If any provision of this RMI
    Agreement is found invalid or unenforceable, that provision will be enforced
    to the maximum extent permissible, and the other provisions of this RMI
    Agreement will remain in full force. Neither party's failure to exercise or
    enforce any right or provision of this RMI Agreement will constitute a
    waiver of such right or provision. Both parties agree that, regardless of
    any statute or law to the contrary, any claim or cause of action arising out
    of or related to use of the Service or this RMI Agreement must be filed
    within two (2) years after such claim or cause of action arose, or be
    forever barred.


                            [SIGNATURE PAGE FOLLOWS]


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IN WITNESS WHEREOF, the parties have caused this RMI Agreement to be executed by
their duly authorized representatives as of the date first written above.

        YAHOO! INC.

By: /s/ ANIL SINGH                      By: /s/ KEITH YOKOMOTO
    -----------------------------           -----------------------------
Title: Senior Vice President            Title: President and COO
       --------------------------              --------------------------
Address: 3420 Central Expressway        Address:
         ------------------------                ------------------------
         Santa Clara, CA 95051
         ------------------------                ------------------------
Telecopy:                               Telecopy:
          -----------------------                 -----------------------
E-mail:                                 E-mail:
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