Sample Business Contracts

Preliminary Letter of Intent - LVL Communications Inc. and Philips Mobile Computing Group

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                    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.

          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

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          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

          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

          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.

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.

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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

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

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