Brightcube Inc – ‘10SB12G/A’ on 2/17/00 – EX-10.33

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Amendment to Registration of Securities of a Small-Business Issuer   —   Form 10-SB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10SB12G/A   Amendment to Registration of Securities of a           5     23K 
                          Small-Business Issuer                                  
 2: EX-10.13    Material Contract                                      1      3K 
 3: EX-10.15    Material Contract                                      1      3K 
 4: EX-10.33    Material Contract                                     25     96K 

EX-10.33   —   Material Contract
Exhibit Table of Contents

EX-10.33
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HEWLETT  PACKARD                                                                
CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 

 CONSULTING SERVICES AGREEMENT BETWEEN
 HEWLETT-PACKARD COMPANY
 AND
 PHOTOLOFT.COM

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

TABLE  OF  CONTENTS                                                             

SECTIONS  OF  THE  AGREEMENT                                                    

1.     Definitions                                                              

2.     HP  Obligations                                                          

3.     Customer  obligations                                                    

4.     Price  and  Payment                                                      

5.     Change  Orders                                                           

6.     Acceptance                                                               

7.     Warranties                                                               

8.     Licenses                                                                 

9.     Intellectual  Property  Rights                                           

10.    Intellectual  Property  Indemnity                                        

11.    Confidential  Information                                                

12.    Remedies  and  Liabilities                                               

13.    Term  and  Termination                                                   

14.    General                                                                  

EXHIBITS  TO  THE  AGREEMENT                                                    

A.     Statement  of  Work                                                      

B.     Chan  a  Order  Procedures                                               

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HEWLETT                                                                         
PACKARD                                                                         

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

This Consulting Services Agreement ("Agreement") is made between HEWLETT-PACKARD
COMPANY,  a  California  Corporation  ("HP")  and  Photoloft.Com,  a  California
corporation  ("Customer"),  as  of  October  22,  1998  ("Effective  Date").    

The  purpose  of this Agreement is to set forth the mutually agreeable terms and
conditions  under  which  HP  will  perform  Consulting  Services  and  provide 
Deliverables  to  Customer  according  to  one  or  more  Statements  of  Work. 

1.     DEFINITIONS                                                              

a)     "CONSULTING  SERVICES"  (sometimes  referred to as "Work") refers to such
activities  as  analysis,  design,  planning,  development,  consulting,        
implementation,  education,  training  and  project management as described in a
Statement  f Work.  Consulting Services may also include other types of services
describe  more  specifically  in  a  Statement  of  Work.                       

b)     "DELIVERABLES"  means  the  tangible  results  of the Consulting Services
provided  by  HP  to  Customer  as  described in a on Statement of Work.  Unless
otherwise  agreed,  the  term  Deliverable.  does  not  include custom hardware.

c)     "SOFTWARE"  means  one  or  more  programs  (including  any  associated  
documentation) capable of operating on a controller, processor or other hardware
device  .                                                                       

a)     "STATEMENT  OF  WORK"  means  a document attached to this Agreement which
describes  a specific project, engagement or assignment ("Project") for which HP
will  provide  Consulting Services to Customer.  More than one Statement of Work
may  be  attached  to  this  Agreement  from  time  to  time.                   

2.     HP  OBLIGATIONS                                                          

a)     HP  will  use  reasonable  commercial  efforts  to perform the Consulting
Services  and  provide  the  Deliverables  specifically described in ore or more
Statements  of  Work  in  accordance  with  the  terms  and  conditions  of this
Agreement.  Customer  and  HP  will  sign  a separate Statement of Work for each
Project  that exceeds $10,000, which will be incorporated by reference into this
Agreement  upon  execution  by the parties.  Each Statement of Work will: (i) be
made  in  writing  in  the  form  attached  an  Exhibit  A,  (ii) reference this
Agreement,  (iii) be numbered consecutively n a chronological basis, and (iv) be
executed by authorized representatives of Custom r no HP.  Individual Statements
of  Work  should  address  at  least  the  following  areas:                    

1.     Project  description                                                     

2.     Price,  payment  and  delivery  schedules                                

3.     Scope  of  Consulting  Services                                          

4.     Acceptance  criteria                                                     

S.     Nature  of  Deliverables                                                 

6.     Project  cost  coordination                                              

b)          For  all Projects under a value f $10,000, Customer's purchase order
referencing  this Agreement                                  will constitute the
applicable  Statement  of  Work  upon  acceptance  by  HP.                      

c)     Unless otherwise agreed, Consulting Service will be performed during HP's
normal  business  hour.                                                         

d)     HP  will use reasonable commercial efforts to provide the Deliverable and
perform  the  Consulting  Service.  in  accordance  with  the  delivery schedule
specified  in  each  Statement  of  Work.                                       

e)     HE'  may  select  qualified  and  reputable  subcontractors  to  perform 
Consulting  Services  and/or  provide  Deliverable.                             

f)     HP  will  appoint  a  representative  to  supervise  and  coordinate HP's
performance  of  Consulting  Services.  HP  may change its representative at any
time  upon  written  notice.                                                    

a)     Unless otherwise agreed in a Statement of Work, HP in not responsible for
providing  support  for  any  Deliverables.                                     

3.     CUSTOMEROBLIGATIONS                                                      

Customer  will comply with the general obligations specified below together with
any  specific Customer obligations described in a Statement of Work, in a timely
manner.                                                                         

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

b)     Customer  acknowledges  that  HP's  ability  to  deliver  the  Consulting
Services  is  dependent  upon Customer's full and timely cooperation with HP, as
well  as  the  accuracy  and  completeness  of any information and data Customer
provides  to  HP.  Therefore,  Customer  will:                                  

1.     Provide  HP  with  access  to,  and  use  of,  all  information,  data,  
documentation,  computer  time,  facilities,  working  space and office services
deemed  necessary  by  HP.                                                      

2.     Appoint a representative who will provide professional and prompt liaison
with  HP,  have  the  necessary  expertise  and authority to commit Customer, be
available  at  all  times  when  HP's  personnel  are at the Customer's site (or
designate  an  alternate  with  the  same  level  of  authority  in the event of
unavailability  caused  by illness or other valid reasons), and meet with the HP
representative  at  regular  intervals  to  be agreed upon t review progress and
resolve  any  issues  relating  to  the  Consultinq  Services  or  Deliverables.

c)     Customer  will  be  responsible for maintaining an external procedure for
reconstruction  of  lost or altered files, data or programs to the extent deemed
necessary  by  Customer,  and  for  actually  reconstructing any such materials.

d)     Customer will be liable for any delays to the delivery schedule specified
in  each  Statement  of  Work  caused  by  Customer or resulting from Customer's
failure  to  fulfill  any  of  its  obligations.  HP may charge Customer for any
additional  charges or losses incurred by HP as a result of such delays, and may
adjust  the  affected  delivery  schedule  accordingly.                         

a)     Customer will be responsible at all times for the supervision, management
and  control of the Deliverables and any results obtained from the Deliverables,
including  without  limitation  all  responsibility  for  maintenance  of proper
machine  configuration,  audit  controls, operating methods, error detection and
recovery  procedures,  back-up  plans,  security, insurance, maintenance and all
that  activities  necessary  to  enable  Customer  to  use  the  Deliverables.  

f)     Except  as  expressly  provided  in  this  Agreement,  Customer  has sale
responsibility  to  ensure  that  its information technology environment is Year
2000  compliant.  HP is not providing Year 2000 services (for example, Year 2000
assessment,  conversion or testing) under this Agreement.  Customer acknowledges
that  HP  will  not be responsible for failure to perform Consulting Services or
supply  Deliverable.  under  this  Agreement,  if  such  failure  is the result,
directly  or  indirectly, of the inability of any products to correctly process,
provide  or  receive  date data (i.e., representations for month, day and year),
and to properly exchange data with the Deliverables by HP ,under this Agreement.

4.     PRICE  AND  PAYMENT                                                      

a)     Prices  for  Consulting  Services and Deliverables a will be specified in
each  Statement  of work.  Prices quoted in each Statement of Work are valid for
30  days.  Prices  include  all materials and labor expenses, but do net include
sales,  use,  service, value added or like taxes, or customs duties.  Such taxes
and  duties,  when  applicable,  will  be  added  to  HP's  invoices.           

b)     HP  will issue invoices in accordance with the payment schedule specified
in  each  Statement  of  Work.  Charges  for  travel  expenses  may  be invoiced
separately.  Customer  will  pay  all  invoices  within 30 days from the date of
invoice.  HP may change credit terms upon reasonable notice at any time when, in
HP's  opinion,  Customer's  financial condition, previous payment record, or the
nature  of  Customer's  relationship  with  HP  so  warrants.                   

c)     Should  any  sum  due  to HP remain unpaid after 60 days from the date of
invoice,  HP  may  terminate  this  Agreement  pursuant  t  Section  13.b.2  and
discontinue  performance  under  any  other  agreement  with  Customer.         

5.     CHANGE  ORDERS                                                           

a)     "Change  Order"  means  an  agreed  upon  change  or  modification to the
Deliverables, Consulting Services or that material aspect of a Statement of Work
that  complies  with  the  requirements  of  Exhibit B. Requests by Customer and
recommendations  by HP for Change Orders are subject to the procedures set forth
in  Exhibit  B, and will be made in writing in the form attached to Exhibit B as
Attachment  B-1.                                                                

b)     All  Change  Orders must be mutually agreed by the parties.  Pending such
agreement,  HP  will continue to perform and be paid as if such Change Order had
not  been  requested  or  recommended,  provided  that if either party process a
Change  Older  which,  in  HP's  judgment,  represents  a material change in the
Consulting Services or Deliverables ad such Change Order remains outstanding for
30  days  or  is  rejected  by Customer, HP will have the right to terminate the
affected  Statement  of  Work  pursuant  to  Section  13.b.2  below.            

6.     ACCEPTANCE                                                               

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
exhibit  TM02                                                                   

a  )     HP  will provide notice to Customer when the Deliverables are ready for
acceptance.                        Acceptance  of  Deliverables  will occur upon
the  earlier  of:  a)  the  date  HP demonstrates to Customer, by the successful
completion of acceptance tests or otherwise, that the Deliverables substantially
conform  to  the  acceptance  criteria  specified in the applicable Statement of
Work; or b) the date that Customer uses any substantial part of the Deliverables
for  any  purpose  other  than  performing  acceptance  tests.  Acceptance  of  
Consulting  Services  will  occur  upon  HP's  performance  of  such  Consulting
Services,                                                                       

b)  In  the  event  that  any  Deliverable fails to conform substantially to the
acceptance  criteria specified in the applicable Statement of Work, HP will have
a  reasonable  time  to  remedy such substantial non-conformance, following HP's
receipt  of  written  notice  from  Customer specifying in reasonable detail the
nature  of  Such  non-conformance.  In the event that HP is unable to remedy the
non-conformance:  a) Customer may accept the Deliverable without warranty, on an
"AS  IS"  basis,  subject  to  a reasonable price adjustment; or b) Customer may
return  the Deliverable to HP and receive a refund of amounts paid to HP for the
Deliverable.                                                                    

c)     Acceptance  will  not  be  delayed for any minor non-conformance with the
requirements  specified in any Statement of Work.  Following acceptance, HP will
use  reasonable  commercial  efforts  to  correct any minor non-conformance that
appears  during  acceptance  testing.                                           

d)     If  acceptance  testing  is delayed for reasons attributable to Customer,
acceptance  will  be deemed to occur on the 10th day after notice by HP that the
Deliverable  in  ready  for  acceptance  testing.                               

7.     WARRANTIES                                                               

     a)  HP  will  perform  Consulting  Services  in  accordance  with generally
recognized  commercial      practices  and  standards.  HP  will  re-perform any
Consulting  Services  not  performed  in accordance with the foregoing warranty,
provided  that  HP  receives  notice  from  Customer  within  30 days after such
Consulting  Services  were  performed.                                          

b)     HP  warrants  that  Deliverables  will  substantially  conform  to  the  
acceptance  criteria  specified in the applicable Statement of Work for a period
of  90  days  from  the  date  of  acceptance.                                  

c)     HP  does  not  warrant  that  the  operation  of  Deliverables  will  be 
uninterrupted  or  error  conform  to  any  reliability or performance standards
beyond  those  specified in the applicable acceptance criteria. HP also does not
warrant  that  Deliverables  will be compatible with future HP products those of
other  vendors.                                                                 

d)     If  HP  receives  notice  during  the  warranty period of any substantial
non-conformance  with  the  acceptance  criteria  that  materially  impairs  the
functioning  of  a  Deliverable,  HP  will,  at  its option, either correct such
non-conformance  or  provide  a  work-around  which  substantially  remedies the
non-conformance.                                                                

e)     If  HP  is  unable  within a reasonable time to comply with the foregoing
--                                                                
obligations,  HP  will  refund  a  reasonable portion of the price stated in the
Statement  of  Work  upon  or  prompt  return of the affected Deliverable to HP,
and/or  delivery  to HP of proof of the destruction of the affected Deliverable.

f)     The  warranties provided in this Section 7 will not apply in the event of
deemed  acceptance  under  Section  6.a(b)  or  6.d  above,  or  to  defects  or
non-conformance  resulting  from:                                               

1.  Unauthorized,  improper or inadequate maintenance or calibration by Customer
or  any        third  party.                                                    

2.     Software,  hardware,  interfacing,  or  supplies  not  supplied  by  HP. 

3.     Unauthorized  modification  of  Deliverables  or  any  portion  thereof. 

4.     Improper  use  or  operation  of  Deliverable  or  any portion thereof or
Customer's  failure  to  comply with the applicable environmental specification.

5.     Improper  site  preparation  or  maintenance  by Customer or a third     
party.                                                                          

g)     THE ABOVE WARRANTIES ARE EXCLUSIVE AND NO OTHER WARRANTY, WHETHER WRITTEN
OR  ORAL,  IS  EXPRESSED  OR  IMPLIED.  HP  SPECIFICALLY  DISCLAIMS  THE IMPLIED
WARRANTIES  OF  MERCHTABILITY  AND  FITNESS  FOR  A  PARTICULAR  PURPOSE.       

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HEWLETT  PACKARD                                                                
CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 

Exhibit  TM02                                                                   

8.  LICENSES                                                                    
a)     Unless  otherwise  agreed  in  writing,  when HP supplies Customer with a
Deliverable that in whole or in part consists of Software (sometimes referral to
in Sections 8 and 9 as a "Software Deliverable"), such Software Deliverable will
be  supplied  in  object  code  form  only.                                     

b)     Upon  Customer  acceptance  of  a  Deliverable  and  receipt by HP of the
associated  payment  in  full,  HP  grants  Customer a non-exclusive, perpetual,
non-transferable  license to use such Deliverable for its own internal purposes.
Customer's  license  confers  no  title  or  ownership in the Deliverable and no
rights  in  any  associated  Software  Deliverable  source code, and will not be
construed as a sale of any rights in the Deliverable or the media on which it is
recorded  or  printed.                                                          

c)     Unless  otherwise  authorized  by  HP,  Customer  may only make copies of
Deliverables  for archival purposes, or when copying is an essential step in the
authorized  use  of  a Software Deliverable on a backup controller, processor or
other  hardware  device.                                                        

d)     Customer  will  label  each  copy  of Deliverables made under Section 8.c
above  with  the  copyright  notice  that  appears  on  the  original.          

e)     Customer  will  not market, sublicense or otherwise provide the original,
any copy or partial copy, or any derivative of a Deliverable to any third party.

f)     Customer's  license  does  not  include the right to updates, upgrades or
other  enhancements  to  a  Deliverable.                                        

g)     Customer  will  not  disassemble  or  decompile  any Software Deliverable
without  HP's  prior  written  consent.  Where  Customer  has other rights under
statute, Customer will provide HP with reasonably detailed information regarding
any  intended  disassembly  or  decompilation.  Customer  will  not  decrypt any
Software  Deliverable  unless  necessary  for legitimate use of the Deliverable.

h)     HP  may  terminate Customer's license in any Deliverables upon notice for
failure to comply with the terms of this Agreement.  TR the event of termination
of  Customer's  license,  Customer  will immediately destroy or return to HP the
affected Deliverable and all partial or complete copies, or provide satisfactory
evidence  of  in  their  destruction  to  HP.                                   

i)     Customer  grants  HP  a non-exclusive, worldwide, royalty-free license to
use,  copy, make derivative works of, distribute, display, perform, and transmit
Customer's  pre-existing copyrighted works or other intellectual property rights
to  the extent necessary for HP to perform its obligations under this Agreement.

9.     INTELLECTUAL  PROPERTY  RIGHTS                                           

a)     All  copyrights  aid other intellectual property rights existing prior to
the  Effective  Date will belong to the party that owned such rights immediately
prior  to  the  Effective  Date.                                                

b)     Neither  party  will  gain  by  virtue  of  this  Agreement any rights of
ownership  of  copyrights,  patents,  trade  secrets,  trademarks  or  any other
intellectual  property  rights  owned  by  the  other.                          

c)     HP  will own all copyrights, patents, trade secrets, trademarks and other
intellectual  property  rights, title and interest in or pertaining to all Works
(including  computer programs, Deliverables and Software Deliverables) developed
by  HP  for  purposes  of  this  Agreement.                                     

10.     INTELLECTUALPROPERTYINDEMNITY                                           

HP  will  defend  or  settle any claim against Customer regarding the Consulting
Services  and  Deliverables, to the effect that HP knowingly infringed a patent,
utility  model,  industrial  design,  copyright,  trade  secret,  mask  work  or
trademark  in  the  country where, such Deliverables are used or such Consulting
Services  are  provided.                                                        

b)     The  indemnities  provided  in  Section  10.1  above  will apply provided
Customer  promptly  notifies HP in writing of the claim, and Customer cooperates
with  HP  in  and  grants  HP  sole  control  of  the  defense  or  settlement  

c)     For  infringement  claims  covered  by  this  Section  10,  HP  will  pay
infringement  claim defense costs, settlement amounts and court-awarded damages.
If  such  a  claim  regarding  a  Deliverable  appears  likely, HP my modify the
Deliverable,  procure any necessary license or replace it. If HP determines that
none  of  these  alternatives is reasonably available, HP will refund Customer's
purchase price upon return of the Deliverable if within one year of delivery, or
Customer's  net  book  value  thereafter.                                       

d)     HP  has  no  obligation  for  any  claim  of  infringement  arising from:

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 

Exhibit  TM02                                                                   

1.     HP-s  compliance  with  or  use  of  Customer's  information, technology,
designs,  specifications  or instructions, including those incorporated into dry
Statement  of  Work.                                                            

2.     Modification  of  a  Deliverable  by  Customer  or  a  third  party.     

3.     Use  of  a  Deliverable  in  a  way not indicated in a Statement of Work.

4.     Use  of  a  Deliverable  with  products  not  supplied  by  HP.          

a)     This  Section  10 states HP's entire liability for claims of intellectual
property  infringement.                                                         

11.     CONFIDENTIAL  INFORMATION                                               

HP  and  Customer  agree  that  all  information  exchanged  between them is not
confidential  unless  they  have entered into a separate confidential disclosure
agreement                                                                       

12.     REMEDIES  AND  LIABILITIES                                              

a)     The  remedies  in  this  Agreement  are  Customer's  sole  and  exclusive
remedies.                                                                       

b)     To  the  extent  HP IS held legally liable to Customer, HP's liability is
limited  to:                                                                    
1.     Payments  described  in Sections 6, 7, and 10 above, this Section 12, and
Section  13.d  below.                                                           

2.     Damages  for  bodily  injury.                                            

3.     Direct  damages  to  tangible  property up to a limit of U.S. $1,000,000.

c)     Notwithstanding  Section  12.b  above,  in  no  event  will  HP  or  its 
affiliates,  subcontractors  and  suppliers  be liable for any of the following:

1.     Actual  loss  or  direct damage that is not listed in Section 12.b above.

2.     Damages  for  loss  of  data,  or  Software  restoration.                

3.     Damages  relating  to  Customer's  procurement  of substitute products or
services  (i.e.,  "cost  of  cover").                                           

4.     Incidental, special or consequential damages, including downtime costs or
lost  profits  but excluding damages for bodily injury and payments described in
Section  10.c  above.                                                           

d)     The  Deliverables are not specifically designed, manufactured or intended
for  sale  as  parts,  components  or assemblies for the planning, construction,
maintenance, or direct operation of a nuclear facility.  Customer will be solely
liable  if any Deliverables purchased or licensed by Customer are used for these
applications.  Customer  will  indemnify  and  hold  HP  harmless from all loss,
damage,  expense  or  liability  in  connection  with  such  use.               

13.     TERM  AND  TERMINATION                                                  

a)     This  Agreement  will commence on the Effective Date and will continue in
force  until  termination  according to the terms of this Agreement.  Individual
Statements  of  Work  will  be effective upon execution by both parties and will
continue  in  force  until  both  parties  have  fulfilled all of their, Project
obligations,  or  until  the  earlier  termination  of  such  Statement  of Work
according  to  the  terms  of  this  Agreement.                                 

b)     This  Agreement  or  an  individual  Statement  of Work may be terminated
immediately  upon  notice  in                                                   
writing:                                                                        

1.     By  either  party  if the other party is in material breach of any of its
obligations  hereunder and fails to remedy such breach within 30 days of receipt
of  a  written  notice  by  the other party which specifies the material breach.

2.     By  HP, in the absence of mutual agreement regarding a Change Order which
represents  a material change under Section 5,b, or if Customer fails to pay any
sum  due under this Agreement within the 60 day time period specified in Section
4.c.                                                                            

3.     By  either  party  if  the  other  party  has a receiver appointed, or an
assignee  for  the  benefit  of  creditors, or in the event of any insolvency or
inability  to  pay debts as they become due by the other party, except as may be
prohibited  by  applicable  bankruptcy  law                                     

c)     Either  party  may terminate this Agreement for convenience  upon 30 days
prior written notice to the other party.  Any termination of this Agreement will
not  relieve  either  party  of  its  obligations                               

HEWLETT  PACKARD                                                                

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CONSULTING  SERVICES  AGREEMFNT  (Deliverables)                                 
E3NbitTM02                                                                      

under  any  Statement  of  Work  in  effect  on  the date of termination of this
Agreement,  unless  otherwise  mutually  agreed  to  in  writing.               

d)     Upon  termination of any  Statement of Work, Customer will pay HP for all
Work  performed  and  charges  and  expenses  incurred  by  HP up to the date of
termination,  and  Customer will receive all work in progress for which Customer
has  paid.  Should  the  sum  of  such  amounts be less than any advance payment
received  by  HP,  HP will refund the difference within 30 days of receipt of an
invoice  from  Customer.                                                        

a)     Sections  4, 7, 8, 9, 10 and 12 above, and Section 14 below, will survive
termination  of  this  Agreement.                                               

14.  GENERAL                                                                    

a)  STANDARD  PRODUCTS.  This  Agreement does not cover standard HP hardware and
software products sold or      licensed to Customer.  Any such transactions will
be  governed by the terms of Customer's HP purchase agreement or, in the absence
of  a  signed  purchase  agreement,  HP's  Terms  add  Conditions  of           
Sale  and  Service  (Exhibit  E16).                                             

b)  HEALTH  AND  SAFETY.  HP  and  any  of  its subcontractors will, when at the
Customer's  site,  conduct                                                      
their  activities  so  that  their equipment, working conditions and methods are
safe  and  without risk to health for their own and Customer's employees as well
as  for  any  that  user.  other  Customer's  site.                             

c)     NON-RESTRICTIIVE  RELATIONSHIP.  HP  may  provide  the  same  or  similar
Consulting  Services  and  Deliverables  to  other  customer                    

d)     NO  PUBLICITY.  Neither  party  will  publicize  or disclose to any third
party  without the consent of the other party, either the price or other terms f
this  Agreement  or the fact of its existence. a aid execution, except as may be
necessary  to  comply  with  other  obligations  stated  in  this  Agreement.   

e)     NO  JOINT VENTURE.  N thing contained in this Agreement will be construed
as  creating a joint venture, partnership or employment relationship between the
parties  hereto,  nor  will  either  party have the right, power or authority to
create  any  obligation  or  only,  express  or  implied on behalf of the other.

f)     NO  ASSIGNMENT.  Except  will respect to HP's rights regarding the use of
subcontractors,  neither  party  may assign any rights or obligations under this
Agreement to any Statement of Work without the prior written consent of the that
party.                                                                          

g)     EXPORT  ADMINISTRATION  REGULATIONS.  If Customer exports any Deliverable
outside  the country in which the Deliverable is delivered to Customer, Customer
assumes  responsibility  for  complying with applicable laws and regulations and
for  obtaining  required  export  and  import authorizations.  Customer will not
export  or  re-export  any  technical  data  in  violation  of  U.S.  Export    
Administration  regulations  or  other  applicable  export  regulations.        

h)     FORCE  MAJEURE.  Neither  party  will be liable for performance delays or
for  non-performance  due  to  causes  beyond  its  reasonable  control.        

i)     NOTICES.  All  notices  required under or regarding this Agreement or any
individual  Statement  of  Work  will be in writing and will be considered given
upon  personal delivery of a written notice to the HP representative or Customer
representative  designated  in  the  Statement  of  Work, or within five days of
mailing,  postage  prepaid  and  appropriately  addressed.                      

j)     WAIER.  Neither  party's failure to exercise any of its rights under this
Agreement  will  constitute or be deemed a waiver or forfeiture of those rights.

k)     SERABILITY.  If  any  term  or  provision of this Agreement is held to be
illegal  or  unenforceable,  the  validity or enforceability of the remainder of
this  Agreement  will  not  be  affected.                                       

1)     EXHIBITS.  The  fo1lowing  documents are attached hereto as exhibits, the
terms  of  which  are  incorporated  by  reference  in  their  entirety:        

A  Statement  of  Work  (and  all  subsequently  executed  Statements  of  Work)

B  change  Order  Procedures                                                    

m)     PRECEDENCE.  In  the  event  of  conflict  between the provision. of this
Agreement  and any attached exhibit or Statement of Work, the provisions of this
Agreement  will  to  the  extent  of  such  conflict  take  precedence.         

n)     ENTIRE AGREEMENT. This  Agreement and its exhibits and Statements of Work
constitute  the entire agreement between HP and Customer and supersede any prior
or  contemporaneous  communications,                                            

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

representations  or  agreements  between  the  parties, whether oral or written,
regarding  the  subject  matter  of  this  Agreement.  Customer's  additional or
different terms and conditions will not apply.  The terms and conditions of this
Agreement  may  not  be  changed  except by an amendment signed by an authorized
representative  of  each  party.                                                

o)  APPLICABLE  LAW.  This  Agreement  is  made  under  and will be construed in
accordance  with  the  law  of                                                  
   California  without  giving  effect  to  that  state's  choice  of law rules.

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

AGREED  TO:                            AGREED  TO:          

          HP  _____________________              Customer  _____________________

s.  Srinivas  Sukumar                  s.  Jack  Marshall   
---------------------                  ------------------   

    Authorized Representative              Authorized Representative
Signature                              Signature            

Name:     Srinivas  Sukumar                      Name:  Jack  Marshall          

Title:    Hewlett  Packard                       Title:  CEO- PhotoLoft.com     
ITIO  Genera  Manager                                       

Address:  1100  Wolf  Road                       Address:  300  Orchard City Dr.
Cupertino,  CA  95014,  USA            Suite 142            
                                      Campbell,  CA  95008

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

 EXHIBIT A

STATEMENT OF WORK FORM

Hewlett-Packard Company                   

Imaging Solution Project Services         

Statement of Work                         

with                              
Photoloft Company                         

for the                           
Image  Print  Solution            

Date of Issue:  October  21,1998  

Revision:  1.0                    

Engagement  I.D.:  IT101289       

 Prepared  by:  JP  Wollersheim,  HP
Internet Imaging Project Lead,    
408/447-2016                      

Copyright October, 1998           
  Hewlett-Packard Company- Unpublished
Work  - ALL  RIGHTS  RESERVED     

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                                                                [Download Table]

Table of Contents                                            
                                                             
1. BACKGROUND. . . . . . . . . . . . . . . . . . . . . .   4 

1.1    INTRODUCTION. . . . . . . . . . . . . . . . . . .   4 

2        SCOPE OF WORK . . . . . . . . . . . . . . . . .   5 

2.1   SCOPE DEFINITION . . . . . . . . . . . . . . . . .   5 
2.2    GENERAL EXCEPTIONS. . . . . . . . . . . . . . . .  10 
2.3    OTHER CONTRACTUAL OBLIGATIONS FROM HP & PHOTOLOFT  10 

3.  PHOTOLOFI'COMPANY OBLIGATIONS. . . . . . . . . . . .  11 

4.  LIMITATIONS AND ASSUMPTIONS. . . . . . . . . . . . .  12 

5.  OTHER CONSIDERATIONS . . . . . . . . . . . . . . . .  12 

5.1    CHANGE PROCESS. . . . . . . . . . . . . . . . . .  12 
5.2    ESCALATION PROCESS. . . . . . . . . . . . . . . .  13 

6. SCHEDULE. . . . . . . . . . . . . . . . . . . . . . .  13 

7. ORDER AND PAYMENT INFORMATION . . . . . . . . . . . .  14 

7.1    PRICING . . . . . . . . . . . . . . . . . . . . .  14 
7.2     PAYMENT SCHEDULE . . . . . . . . . . . . . . . .  14 

8. AUTHORIZATION . . . . . . . . . . . . . . . . . . . .  16 

8.1     ENTIRE AGREEMENT . . . . . . . . . . . . . . . .  16 
8.2     SIGNATURE. . . . . . . . . . . . . . . . . . . .  16 

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Proprietary Notice                                                    

     Restriction  on Use and  Disclosure of Proposal and  Quotation  Information
Data                                                                  

     The  information   contained  in  this  Statement  of  Work  or  Exhibit  A
     constitutes  a  trade  secret  and/or  information  that is  commercial  or
     financial  and  confidential  or  privileged.  It is furnished to Photoloft
     Company in confidence with the understanding  that it will not, without the
     prior written permission of Hewlett-Packard, be used or disclosed for other
     than evaluation purposes; provided, however that in the event a contract is
     awarded on the basis of this Exhibit A,  Photoloft  Company  shall have the
     right to use and disclose this  information  to the extent  provided in the
     contract.  This restriction does not limit Photoloft Company's right to use
     or disclose  this  information  if obtained  from  another  source  without
     restriction.  Hewlett-Packard  represents only the HP products and services
     as set forth herein, and makes no representations,  warranties,  guarantees
or commitments for any third-party products or services.              

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1.   BACKGROUND                                                                 

1.1  INTRODUCTION                                                     

     This  document is the Statement of Work (SOW) for  Hewlett-Packard,  acting
     through ft's  Internet  Imaging  Operation  (HP ITIO) to Photoloft  Company
     located in Campbell, California for the Image Print Solution. It represents
     Hewlett-Packard's   solution  based  upon  HP's  current  understanding  of
Photoloft Company's needs.                                            

     HP's  overall  intention  is  to  provide  a two  phased  approach  to  the
     Photoloft.com  website  implementation,  however this  proposal  covers toe
     obligations  of phase 1. Phase 2 is included for reference  and  discussion
purposes only.                                                        

Phase I                                                               

HP & Photoloft will perform the following activity                    

-    Internet Imaging server integration into Photoloft.com           

     -    Photorealistic  print solution for  Photoloft.com to allow their users
          to print  off any  combination  of 3x5,  4x6 or 8xl0  images  from the
internet.                                                   

     -    Integration  points and development  guidelines for the  photoloft.com
side of the print solution                                  

-    Documentation on the print solution                              

     -    Joint  Press  release  stating  the joint  project  - HP will  provide
          content  for HP's press  release,  Photoloft  will  provide  their own
content.                                                    

     -    Image.hp.com    will   maintain   a   link   to   the    photoloft.com
          website.Photoloft.com will maintain a link to the image.hp.com website

     -    HP and Photoloft  will  participate in relevant joint trade shows in a
cost sharing fashion                                        

     -    HP ITIO will provide  introductions  to other divisions  within HP who
          value the types of services  Photoloft brings to bear. These divisions
          include HP Corporate  Programs (for ID 4 Life),  printer divisions and
complementary products divisions.                           

     -    Photoloft  will  provide  to  Hewlett   Packard  ITIO  $25K  worth  of
advertising.                                                

     -    In exchange for an HP2000C Photo Resolution  Printer to be provided by
          Hewlett Packard at no charge, Photoloft will place the HP OpenPix Logo
(Ignited by) with a link to image.hp.com/photoloft          

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Phase 2                                                               

     Continue to help  Photoloft  implement a lower  cost,  interactive  imaging
     process which will simplify the database image storage mechanism, and offer
     the additional  functionality of image  interactivity (zoom and pan) on the
internet.                                                             

     Under  non-disclosure,  HP ITIO will  provide to  Photoloft  an overview of
     where we are taking the  internet  imaging  group of  products  and how the
     partnership  with HP ITIO will  potentially  increase  Photoloft's  revenue
potential.                                                            

2.   SCOPE OF WORK                                                              

2.1  SCOPE DEFINITION                                                 

     The Scope of Work defines all activities to be delivered by Hewlett-Packard
     for Photoloft  Company's  Image Print  Solution.  This section defines what
     Hewlett-Packard  will do and what Photoloft Company receives as a result of
the activities.                                                       

     Each activity  included below is further  defined and described  below with
the following components:                                             

     Activity  Name - identifies  the services  activity by number and name Task
     Description - defines the activity and the resulting deliverable Acceptance
     Criteria  -  acceptance  criteria  for the  deliverable  Photoloft  Company
     Obligations - describes any Photoloft  Company  responsibilities  and/or HP
assumptions unique to an activity                                     

WORK BREAKDOWN STRUCTURE                                              

     The figure below  illustrates  the  organization of the tasks for the first
     phase of the Image Print  Solution.  This Work  Breakdown  Structure  (WBS)
     diagram for this phase  defines and  organizes  all work  activities  to be
performed.                                                            

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         Week#   1      2     3      4
Detailed  Project  Plan               *                                         

DISCOVERY                             *                                         
Kickoff                                                                         

DEVELOP                                                                         
Track  Progress-Weekly                       *     *      *                     
Functional  Specification                    *                                  

DOCUMENT                                                                        
Print  Client  Documentation                              *                     

DELIVER                                                   *                     
Test  &  Acceptance  Complete                             *                     

Project Timeline for Phase I of the Image Print Solution              

          HP's  OpenPix  Image  Print  Solution  is an  engagement  to  create a
          customized  helper  application  for  Photoloft's  users to be able to
          print off hire solution  images from their  website-www.photoloft.com.
          HP will design and implement the custom application. Photoloft Company
          will benefit from the  application  by having a tool to allow users to
          print  off  photographic  quality  images  from  the  internet  either
singular or in batch mode.                                  

          The  objective of this 4 calendar  week  engagement is to have Hewlett
          Packard  provide  a helper  application  as well as offer  development
          guidelines  as to how to  design  the  Photoloft  website  in order to
          effectively  implement the helper application.  The engagement will be
generally executed as follows:                              

          HP will plan, schedule,  and resource the OpenPix Image Print Solution
          phase  of the  engagement.  The HP  team  will  conduct  the  solution
implementation in four phases                               

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2.1.1 DISCOVERY                                                       

     SUMMARY:  The  purpose  of this  task is to create  the plan to define  the
     administrative  and  management  controls to be  employed  during the Image
     Print  Solution  activities.  The  intended  use of the Project  Plan is to
     organize,  document  and  maintain  all  engagement  planning  and  process
     information  related  to  project  management,  quality  assurance,  change
management, configuration management, and system engineering.         

     The HP development  team will analyze the project  objectives and goals and
     recommend new processes in order for Photoloft to  effectively  utilize the
new features of HP OpenF'ix and the Print solution.                   

     HP will spend  eight (8) hours over two (2) days at  Photoloft  in order to
     effectively  understand the current processes.  HP will spend the remaining
     days developing the detailed  implementation plan that will be delivered to
Photoloft the following week.                                         

     ACCEPTANCE  CRITERIA - This task will result in delivery of a Project  Plan
     document  estimated at 10 pages. HP will submit the plan  electronically in
     MS Word format and Photoloft  will sign the  acceptance  criteria sheet for
the plan.                                                             

          INTRODUCTION.  This  section  will  include  a  summarization  of  the
purpose, scope and content of the Project Plan.             

          PURPOSE AND  DESCRIPTION  OF THE SOLUTION.  This section will describe
          the  purpose,  scope,  and  major  functions  of  the  solution.  This
          description will provide a contextual background for understanding the
          objectives for the management  planning  information  presented in the
Project Plan.                                               

          CHANGE  MANAGEMENT PLAN. This section will describe the activities and
          plans for change  management  to be performed by HP. The plan includes
          change management process,  configuration  control activities,  change
 identification, change control, and change status accounting.

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          DEFINITION OF CURRENT PROCESSES AND SYSTEMS.  This section will define
          the current  processes in use at Photoloft for their internet  website
      design and creation as it relates to hire solution image printing.

          DEFINITION OF INTEGRATION  POINTS FOR THE IMAGE PRINT  SOLUTION.  This
          section will include all of the  detailed  information  for all of the
          integration  points  between  the  current  internet  web  site  image
          printing  processes and tools and the new methods and tools created by
Hewlett Packard.                                            

          SYSTEM TEST PLAN. This section of the document will detail a Test Plan
          to provide  the  scenarios  defining  the formal  tests,  inspections,
          analysis,  demonstrations,  and  verifications as appropriate to prove
          compliance with the system functional and operational  requirements in
          the to-be-developed HP design documentation. The Test Plan will define
          the test  methodology  and  strategies to be  implemented  in the Test
          Procedures.  All resources necessary to complete the system acceptance
          testing will be identified including the test location, test equipment
          and data to be supplied by  Photoloft  Company,  as well as all HP and
Photoloft Company personnel and skills required.            

          FUNCTIONAL  SPECIFICATION  - The purpose of this  section is to design
          the  customized  Photoloft  Company  Image Print  Solution  functional
          capabilities.  The HP design will  address the areas of hi  resolution
          image  printing  from the  Photoloft  internet  website  using  the HP
Developed helper application.                               

     PHOTOLOFT  COMPANY  OBLIGATIONS - Photoloft Company will be responsible for
     reviewing and approving the contents of the initial  release version of the
Project Plan.                                                         

2.1.2 DEVELOPMENT                                                     

     SUMMARY: The purpose of this task is to develop the helper application that
  will allow the users of the photoloft website to print off hi resolution

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     images from the internet.  HP will make  recommendations  for any necessary
     changes to the practices for them to best support the Image Print Solution.
This development will include, but is not limited to                  

     -    Client Side Photo Realistic Image Printing  Helper  Application  which
          will use the  Photoloft  image  server to deliver any  combination  of
          single copies or multiple  pages of 3"x5",  4"x6" or8"xl0" image pages
printed off on an 8.5" x 11 " sheet of paper.               

     -    Help  integrating the helper  application  into the Photoloft  current
bundle                                                      

     -    Assistance in integrating the application  into  Photoloft.com  at the
appropriate integration points                              

     -    Content  for  website  on how  to  capture  images  and  print  images
appropriately.                                              

ACCEPTANCE CRITERIA: Use of the print helper application.             

     PHOTOLOFT  COMPANY  OBLIGATIONS - Photoloft  Company must provide access to
     all documentation  regarding  currently  existing  processes and practices.
     Photoloft Company IT and web personnel must participate in the planning and
     process  specification  development  including  all  work  shops,  planning
     meetings and documentation  development  activities to be identified in the
     Project  Plan.  Photoloft  Company shall be  responsible  for reviewing and
approving the contents of this.                                       

2.1.3 DOCUMENTATION                                                   

     SUMMARY:  HP will fully document the Photoloft OpenPix Image Print Solution
     and  all  of  the  associated   processes  and  integration   points.  This
     documentation  is  intended to be used  during the  training  period of the
system, as well as its day to day use.                                

2.1.4 DELIVERY                                                        

     SUMMARY:  HP  will  help  Photoloft  personal  install  and  integrate  the
     Photoloft  OpenPix Image Print Solution into the current  infrastructure at
     the  appropriate  integration  points as  defined in the  discovery  phase.
     Testing of the photo realistic  printing  application  will be conducted at
     that time based on the test plan  outlined  in the  discovery  phase of the
project.                                                              

     Work on this  engagement will be performed in Hewlett Packard in Cupertino,
     CA as  well  as at  Photoloft  Company  in  Campbell,  CA.  Hewlett-Packard
provides this proposal on a budgetary price basis.                    

     Photoloft  Company is assuming the role of Prime  Contractor  for the Image
     Print  Solution.  Hewlett-Packard  will  interact  with any  third  parties
     involved  in the  engagement  for the  purpose of  identifying  HP's roles,
     integrating  HP, other  subcontractor  and  Photoloft  Company  tasks,  and
     tracking  progress.  HP is not the prime  contractor on this engagement and
will not be responsible for the deliverables of any third parties.    

2.2 GENERAL EXCEPTIONS                                                

     The  following  exceptions  further  represent   Hewlett-Packard's  current
     understanding  of the engagement and further defines the engagement  scope.
     For the purpose of this section, exceptions are defined as items previously
     documented or discussed as  engagement  requirements  that  Hewlett-Packard
does not consider part of the engagement scope.                       

     -    Performing  daily image management and image  manipulation  activities
        other than those in the testing and delivery phases of this document

-    Installing and configuring the Operating System(s)               

     -    Developing  any  portion of the user  interface  on the  Photoloft.com
website                                                     

     -    Developing  the  integration  points on the server side (while Hewlett
          Packard  will   recommend  how  the   integration   points  should  be
       implemented, HP recommends that Photoloft perform this development)

2.3  OTHER CONTRACTUAL OBLIGATIONS FROM HP & PHOTOLOFT                

     Alongside  the  technical  nature of the project,  there are  marketing and
     other opportunities that HP and Photoloft.  The following list is a summary
     of the other  activities  that HP and Photoloft  have  committed to execute
over the next six (6) month period                                    

     -    Joint  Press  release  stating  the joint  project  - HP will  provide
          content  for HP's press  release,  Photoloft  will  provide  their own
content.                                                    

     -    Image.hp.com  will  maintain  a  link  to the  photoloft.com  website.
   Photoloft.com will maintain a link to the image.hp.com website.

     -    HP and Photoloft  will  participate in relevant joint trade shows in a
cost sharing fashion.                                       

     -    HP ITIO will provide  introductions  to other divisions  within HP who
          value the types of services  Photoloft brings to bear. These divisions
          include HP Corporate  Programs (for ID 4 Life),  printer divisions and
complementary products divisions.                           

     -    Photoloft  will  provide  to  Hewlett   Packard  ITIO  $25K  worth  of
advertising.                                                

3.   PHOTOLOFT COMPANY OBLIGATIONS                                              

     An individual with  centralized  responsibility  for all Photoloft  Company
     aspects of this  consulting  engagement  must be assigned.  This individual
     must have the  authority to make all decisions  relative to the  consulting
     engagement  and to either assign  resources or negotiate the  assignment of
     resources  within  Photoloft  Company.  In  addition,  this  individual  or
     designee  must be  available  for  deliverable  acceptance  and approval in
     accordance with the consulting  engagement schedule.  The Photoloft Company
     Project Lead will verify compliance of each deliverable with the Acceptance
     Criteria  defined for each  deliverable in the Statement of Work section of
     this  document and shall then  indicate  agreement  with the  compliance by
     signature  either on a signature page to be part of the deliverable or on a
separate document to be provided by HP.                               

     Photoloft Company will assign a team of executives, managers and individual
     contributors  to work with the HP team  throughout  the  engagement.  It is
     expected that this team will require  participation  from Photoloft Company
     design, implementation,  support, and maintenance organizations.  Personnel
     skills  required  will  be  in  the  general  areas  of  support,   network
     management,  systems management,  business applications,  purchasing,  help
     desk, end users,  and site  representatives.  This team will be responsible
     for complying with agreed-to meeting times(both starting and duration), and
     with providing the requested information on a timely basis for the duration
of the engagement.                                                    

     Photoloft Company must provide a suitable work area space with desk, chair,
     and at least one  telephone,  which must be on an analog line  suitable for
     modem  digital  data  transmission,  for  use  by the HP  team  to  conduct
     engagement  business while working onsite at Photoloft  Company.  Photoloft
     Company must also  provide the onsite  project team with access to copiers,
fax, and simple clerical support.                                     

4.   LIMITATIONS AND ASSUMPTIONS                                                

     An engagement  start date of October 12, 1998 has been assumed for resource
     scheduling and pricing. Photoloft is advised to offer Hewlett Packard seven
     (7)  days  notice  in  advance  of  October  12 to  allow  for  appropriate
     scheduling.  Changes to this start date will effect the availability of key
engagement resources and, therefore, the engagement duration and price

     HP services  will  normally be performed  during  normal  business  working
     hours, Monday through Friday, 8:00 am to 5:00 p.m.,  excluding HP holidays.
     Some engagement  services may require some work to be performed  outside of
     these  standard  work hours.  This  off-hours  work will be  addressed  and
  handled on a case-by-case basis with the Photoloft Company Project Lead.

     All deliverable documentation created for this engagement will be available
     in both hard copy and  electronic  format.  The  electronic  format will be
     MSWord.  The engagement  planning  software used for this  engagement is MS
     Project.  If  Photoloft  Company  requests  the  use  of an  additional  or
     different  software  tool  not  known  to  the  engagement  personnel,  the
     Photoloft  Company  will be  responsible  for the  costs of  acquiring  the
     necessary  software  and training  courses  and/or time  necessary  for the
engagement personnel to learn the tool.                               

5.   OTHER CONSIDERATIONS                                                       

5.1  CHANGE PROCESS                                                   

     This  engagement has defined  deliverables as detailed in the Scope of Work
     section of this document.  If requirements arise that are outside the scope
     of this SOW, a change order will be submitted  and  processed in accordance
     with the "Change  Orders" section of the terms and conditions to which this
Statement of Work is an Exhibit.                                      

     Either  the HP team or  Photoloft  Company  can  initiate  a change  to the
     engagement.  The change will be  evaluated  and  technical  and  engagement
     issues will be identified.  The cost,  scope, and schedule impact,  if any,
     will be analyzed  and  documented.  The change will then be  processed  for
decision and closure or implementation.                               

     In the event HP and Photoloft  Company do not reach agreement on the change
     order, the scope of work of this engagement remain as it is defined in this
document.                                                             

5.2  ESCALATION PROCESS                                               

     HP takes a proactive  approach to project  management to plan and structure
     the work at high quality levels. At times, however, there are circumstances
     (engagement  issues) that were not anticipated or prevented and can, if not
     addressed,  affect the success of the  engagement.  Typically an engagement
     issue is a  circumstance  that  needs HP or  Photoloft  Company  management
     (outside  of the  engagement)  awareness  or  focus on a  problem  that has
lingered longer than allowable.                                       

     The timely  resolution of issues is critical to maintaining  control of the
     engagement and achieving the engagement  schedule and costs. The purpose of
     the  escalation  process is to ensure that issues and problems are properly
     managed  and  resolved in a timely and  efficient  manner.  The  escalation
     process  provides a mechanistic  means to alert higher levels of management
attention to those issues not being resolved.                         

     Either the HP team or  Photoloft  Company  can  initiate  or raise an issue
     related to the  engagement.  The issue will be raised to the  Project  Lead
     and,  if  not  resolved  in  a   predetermined   period,   the  issue  will
     automatically  be  raised to the  engagement  manager.  The  issue  will be
     resolved  under the  guidance of the  engagement  manager,  or if still not
     resolved in a predetermined  period, the issue will automatically be raised
     to the  delivery  manager.  For the  purposes  of defining  the  escalation
     process,  "resolved" as used here can mean that the issue is being attended
to but not necessarily completed.                                     

6.   SCHEDULE                                                                   

     The preliminary engagement schedule for the Image Print Solution engagement
     is  based on an  estimated  start  date of  October  12,  1998.  The  final
     engagement  schedule will be provided  following  engagement  start. The HP
     services are currently  scheduled to start on or about October  12,1998 and
     to continue  for a 4 calendar  week period  ending on or about  November 9,
     1998. This start date assumes receipt of a purchase order seven (7) days in
advance of the start of the engagement.                               

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7.   ORDER AND PAYMENT INFORMATION                                              

7.1  PRICING                                                          

     The Image Print  Solution  services  defined in this  Statement of Work are
     proposed to Photoloft Company on a budgetary price basis. Photoloft Company
will be invoiced on a milestone basis.                                

     This engagement is proposed to Photoloft Company for a firm, fixed price of
$ 75,000.                                                             

  This Statement of Work is valid for thirty (30) days from date of issue.

7.2  PAYMENT SCHEDULE                                                 

   HP will invoice Photoloft Company in accordance with the following table.

                                                                [Download Table]

ENGAGEMENT                                                                 
ID # ITIO1289                                                              
-------------                                                              
PRODUCT NO.         DESCRIPTION          PRICE             INVOICE         
-------------  ---------------------  -----------  ------------------------
                                                                           
                                                   $28,625 upon            
                                                   completion of           
                                                   deliverables, and       
               Photoloft-Image                     remaining outstanding   
               Print Solution                      balance 6 months after  
B75122A        Implementation         $    57,250  signed contract.        
-------------  ---------------------  -----------  ------------------------
                                                   Included for 6 months   
                                                   in above cost.          
               Image Print                         Subsequent support to   
               Solution Support       $7,500/year  be purchased annually.  
               ---------------------  -----------  ------------------------
               HP OpenPix                                                  
               Image Igniter          $ 4,995/cpu  Included in above cost  
               ---------------------  -----------  ------------------------
                                                   Photoloft will generate 
                                                   a single page contract  
                                                   which is valid          
                                                   for $25K in             
                                                   advertising (at         
                                                   Photoloft's current     
                                                   pricing as of           
               Photoloft Advertising               October 27, 1999        
               ---------------------               ------------------------

Please  send  your  purchase  order  to:                              
Hewlett-Packard  CompanyCupertino,  CA  MS  42UO                      
11000  Wolfe  Road                                                    
Cupertino,  California                                                

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8.   AUTHORIZATION                                                              

8.1  ENTIRE AGREEMENT                                                 

     This  Statement of Work and the  attached  Consulting  Services  Agreement,
     including any exhibits and  appendices,  constitutes  the entire  agreement
     between  HP  and   Photoloft   Company,   and   supersedes   any   previous
     communications,  representations or agreements between the parties, whether
     oral or written,  regarding  transactions  hereunder.  Photoloft  Company's
     additional or different terms and conditions will not apply. This Statement
     of Work will be governed by the terms and conditions to which this document
is an exhibit.                                                        

8.2  SIGNATURE                                                        

     Signature below indicates Photoloft Company's acceptance of this consulting
     services Statement of Work.  Hewlett-Packard  will require a valid purchase
     order  reflecting  this Statement of Work to begin work as well as to issue
invoices in accordance with the Payment Schedule in section 7.2.      

Hewlett-Packard  Company                                      

PhotoIoft  Company                                                              

By:                                                            By:        

Name:                                                          Name:      

Title:                                                         Title:     

Date:                                                          Date:      

     Please sign two copies of this document and return to Hewlett-Packard  with
     your purchase order.  Hewlett-Packard will sign and return one copy to your
attention.                                                            

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

 EXHIBIT B

 CHANGE ORDER PROCEDURES

The  following  procedures  will  be  observed  for  all  Change  Orders:       

1.     Either  party may request a Change Order but all Change Orders must be in
writing  and  prepared  by HP. HP may charge a reasonable fee for investigating,
preparing  or  initiating  a  Change  Order  at  Customer's  request.           

2.     Change  Order  requests  will  be  processed  as  a  on  as is reasonably
possible.                                                                       

3.     All  Change  Orders will be in the form attached hereto as Attachment B-1
to  Exhibit B, and will be signed by the appointed representative for each party
(or  individuals specified in writing as substitute during periods of illness or
absence).                                                                       

4.     Change  Orders  will  include  the  following:                           

a)     A  description  of any additional work to be performed and/or any changes
to  the  performance  required  of  either  party.                              

b)     A  statement  of  the  impact  of  the  work or changes on the Consulting
Services,  the  Deliverables,  the  acceptance  tests  or  criteria,  or  other 
requirements  of  the  Agreement.                                               

c)  The  estimated  timetable to complete the work specified in the Change Order
and  the  impact,  if  any,  on  the  delivery  schedule,  pricing and payments.

d)     Specific  individuals  with  management or coordination responsibilities.

a)     The  documentation  to  be  modified  or  supplied  as  part or the work.

f)     Any  additional  acceptance  test  procedures  for  such  work.          

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

 EXHIBIT B

 TO CONSULTING SERVICES ADDENDUM

ATTACHMENT B-1

 CHANGE ORDER FORM

1.     Describe  services  or  changes  requested  (attach  additional  pages if
necessary).                                                                     

REQUESTED  BY  CUSTOMER:                         REQUESTED  BY:       

Customer:  ________________                      HP:  ______________  

     ___________________________                      __________________________
   Authorized  Representative Signature             Representative Signature

     Name: _________________                          Name: ____________________

     Title:  _______________                          Title:  __________________

     Date:  ________________                          Date:  ___________________

2.  Modifications,  clarifications  or supplements to description of services or
changes  requested  in  paragraph  1  above,  if any (attach additional pages if
necessary):                                                                     

3.  Assignment  of necessary HP personnel and resources (attach additional pages
if     necessary):                                                              

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HEWLETT  PACKARD                                                                

CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 
Exhibit  TM02                                                                   

4.     Impact  on  price,  delivery  schedule,  payment  schedule, Deliverables,
Consulting  Services  and  ancceptance  test  procedures  and  criteria  (attach
additional  pages  if  nece5sary):                                              

a.  Price                                                                       

b.  Delivery  Schedule  and  Payment  Schedule                                  

c.  Deliverables                                                                

d.  Consulting  Services                                                        

a.  Acceptance  Test  Procedures  and  Criteria                                 

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HEWLETT  PACKARD                                                                
CONSULTING  SERVICES  AGREEMENT  (Deliverables)                                 

Fxhibit  TM02                                                                   

Change  Order  Approved  and  Accepted                                          

Customer:  ______________________          HP:  ______________________________  

_________________________________          ___________________________________  
Authorized  Representative  Signature      Authorized  Representative  Signature

Name:      _________________________       Name:  ____________________________  

Title:     _________________________       Title:  ___________________________  

Date:      _________________________       Date:  ____________________________  

Change  Order  Rejected                                                         

Customer:  ___________________________       HP:______________________________  

   __________________________________      _________________________________
     Authorized Representative Signature     Authorized Representative Signature

  Name:  ____________________             Name:  _________________________

  Title: ____________________             Title:  ________________________

  Date:  ____________________             Date:  _________________________

Hewlett  Packard                                                                

Confidential  Disclosure  Agreement                                             

Effective  Date:  2-24-99                                                       
-------                                     

In  order  to  protect certain confidential information, Hewlett-Packard Company
and  its  corporate  affiliates  ("HP"), and the "Participant" identified below,
agree  that:                                                                    

1.   Disclosing   Party:   The   party   disclosing   confidential   information
     ("Discloser")  is ________  (NOTE:  Fill in "HP",  "Participant",  or "both
parties".)                                                            

2.   Primary   Represenative:   Each  party's  representative  for  coordinating
disclosure or receipt of confidential information is:                 

HP:  Srinivas  Sukumar                                                          
-------------------                                                       

Participant:_____________                                                       

3.   Description  of  Confidential  Information:  The  confidential  information
disclosed under this Agreement is described as:                       

HP:_____________________________                                                

Participant:__________________________________                                  
(note:  be  specific,  for example, individually list materials provided. Attach
additional  sheets  if  needed.)                                                

4.   Use  of  Confidential   Information:   The  party  receiving   confidential
     information  ("Recipient")  shall make use of the confidential  information
     only  for the  following  purpose  (e.g.,  "evaluation  and  testing  for a
make/buy decision on project xyz."):                                  

HP:_____________________________                                                

Participant:__________________________________                                  

5.   Confidentiality  Period:  This  Agreement  and  Recipient's  duty  to  hold
     confidential         information        in        confidence         expire
     on:_______________________________  (Note: this is the period of protection
of confidential information.)                                         

6.   Disclosure Period: This Agreement pertains to confidential information that
     is      disclosed       between      the      Effective       Date      and
     ____________________________________ (note: this is the period during which
confidential information is going to be disclosed.)                   

7.   Standard  of Care:  Recipient  shall  protect  the  disclosed  confidential
     information by using the same degree of care, but no less than a reasonable
     degree  of  care  to  prevent  the  unauthorized  use,  dissemination,   or
     publication  of the  confidential  information as Recipient uses to protect
its own confidential information of a like nature.                    

8.   Markings:   Recipient's  obligations  shall  only  extend  to  confidential
     information  that is  described in  paragraph  3, and that:  (a)  comprises
     specific materials  individually  listed in parragraph 3; or, (b) is marked
     as confidential at the time of disclosure; or, (c) is unmarked (e.g. orally
     disclosed) but treated as  confidential  at the time of disclosure,  and is
     designated as  confidential  in a written  memorandum  sent to  Recipient's
     primary  representative  within thirty days of disclosure,  summarizing the
confidential information sufficiently for identification.             

9.   Exclusions:  This  Agreement  imposes no  obligation  upon  Recipient  with
     respect to  information  that:  (a) was in  Recipient's  possession  before
     receipt  of  Discloser;  (b) is or  becomes a matter  of  public  knowledge
     through no fault of Recipient; (c) is rightfully received by Recipient from
     a third  party  without  a duty of  confidentiality;  (d) is  disclosed  by
     Discloser to a third party without a duty of  confidentiality  on the third
     party; (e) is independently developed by Recipient;  (f) is disclosed under
     operation of law; or (g) is disclosed by Recipient with  Discloser's  prior
written approval.                                                     

10.  Warranty:  Each  Discloser  warrants  that it has  the  right  to make  the
     disclosures  under this Agreement.  NO OTHER  WARRANTIES ARE MADE BY EITHER
     PARTY UNDER THIS AGREEMENT.  ANY INFORMATION EXCHANGED UNDER THIS AGREEMENT
IS PROVIDED "AS IS".                                                  

11.  Rights:  Neither party acquires any intellectual property rights under this
     Agreement except the limited rights necessary to carry out the purposes set
     forth in paragraph 4. This  Agreement  shall not restrict  reassignment  of
Recipient's employees.                                                

Miscellaneous                                                                   

12.  This  Agreement  imposes no obligation  on either party to purchase,  sell,
     license,  transfer  or  otherwise  dispose of any  technology,  services or
products.                                                             

13.  Both parties shall adhere to all  applicable  laws,  regulations  and rules
     relating to the export of technical  data, and shall not export or reexport
     any technical  data, any products  received from  Discloser,  or the direct
     product of such  technical  data to any  proscribed  country listed in such
applicable laws, regulations and rules unless properly authorized.    

14.  This Agreement does not create any agency or partnership relationship.     

15.  All additions or  modifications  to this  Agreement must be made in writing
and must be signed by both parties.                                   

16.  This Agreement is made under, and shall not be construed  according to, the
laws of the State of California, USA.                                 

Hewlett-Packard  Company                                                        
_____________________                                                           
(entity  Name)                                                                  
_____________________                                                           
(address)                                                                       
By___________________                                                           
(functional  manager's  signature)                                              
_____________________                                                           
(name)                                                                          
_____________________                                                           
(title)                                                                         

Participant                                                                     
Photoloft.com                                                                   
300  Orchard  City  Drive  Ste.  142                                            
By  s.  Jack  Marshall                                                          
------------------                                                      
Jack  Marshall                                                                  
President                                                                       

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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		11/9/98		19
		10/22/98		3
		10/12/98		19
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