Product Distribution Agreement

EXHIBIT 10.9



*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.



DISTRIBUTION AGREEMENT BETWEEN



TECH DATA CORPORATION AND



TRANCELL SYSTEMS



*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.

DISTRIBUTION AGREEMENT



THIS AGREEMENT, dated as of this _16__ day of _December___________ 19_96_ (the "Effective Date"), is between TECH DATA CORPORATION, a Florida corporation ("Tech Data"), with its principal corporate address at 5350 Tech Data Drive, Clearwater, Florida 34620 and TRANCELL SYSTEMS, a California corporation ("Trancell"), with its principal corporate address at 3180 De La Cruz Blvd., Suite 200, Santa Clara, California 95054.





A. Tech Data desires to purchase certain Products from Trancell from time to time and Trancell desires to sell certain Products to Tech Data in accordance with the terms and provisions set forth in this Agreement.



B. Trancell desires to appoint Tech Data as its non-exclusive distributor to market Products within the territory defined below and Tech Data accepts such appointment on the terms set forth in this Agreement.



NOW, THEREFORE, in consideration of the Recitals, the mutual covenants contained in this Agreement and other good and valuable consideration, Tech Data and Trancell hereby agree as follows:



ARTICLE I. DEFINITIONS, APPOINTMENT AND TERM OF AGREEMENT

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1.1 Definitions. The following definitions shall apply to this Agreement.

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(a) "Customers" of Tech Data shall include dealers, resellers, value

added resellers, mail order resellers and other entities that acquire

the Products from Tech Data.



(b) "DOA" shall mean Product, or any portion thereof, which fails to

operate properly on initial "bum in", boot, or use, as applicable.



(c) "Documentation" shall mean user manuals, training materials,

product descriptions and specifications, brochures, technical manuals,

license agreements, supporting materials and other printed information

relating to the Products, whether distributed in print, electronic, or

video format.



(d) "End Users" shall mean the final retail purchasers or licensees

who have acquired Products for their own use and not for resale,

remarketing or redistribution.



(e) "Non-Saleable Products" shall mean any Product that has been

returned to Tech Data by its Customers that has had the outside shrink

wrapping or other packaging seal broken or any components of the

original package are missing, damaged or modified.





*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.

(f) "Products" shall mean, individually or collectively as

appropriate, hardware, licensed software, Documentation, supplies,

accessories, and other commodities related to any of the foregoing

produced by Trancell.



(g) "Services" means any warranty, maintenance, advertising, marketing

or technical support and any other services performed or to be

performed by Trancell.



(h) "Territory" shall mean worldwide.



1.2 Term of Agreement. The term of this Agreement shall commence on the

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Effective Date and, unless terminated by either party as set forth in this

Agreement, shall remain in full force and effect for a term of one (1)

year, and will be automatically renewed for successive one (1) year terms

unless prior written notification of termination is delivered by one of the

parties in accordance with the notice provision of this Agreement.



1.3 Appointment as Distributor. Trancell hereby grants to Tech Data the non-

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exclusive right to distribute Products during the term of this Agreement

within the Territory. This Agreement does not grant Trancell or Tech Data

an exclusive right to purchase or sell Products and shall not prevent

either party from developing or acquiring other vendors or customers or

competing Products. Tech Data will use commercially reasonable efforts to

promote sales of the Products. Trancell agrees that Tech Data may obtain

Products in accordance with this Agreement for the benefit of subsidiaries

of Tech Data. Wholly owned subsidiaries of Tech Data shall be entitled to

order Products directly from Trancell pursuant to this Agreement.



ARTICLE II. PURCHASE ORDERS

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2.1 Issuance and Acceptance of Purchase Order.

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(a) This Agreement shall not obligate Tech Data to purchase any

Products or services except as specifically set forth in a written

purchase order.



(b) Tech Data may issue to Trancell one or more purchase orders

identifying the Products Tech Data desires to purchase from Trancell.

The terms and provisions of this Agreement shall govern all purchase

orders except that purchase order may include other terms and

provisions which are consistent with the terms and provisions of this

Agreement, or which are mutually agreed to by Tech Data and Trancell.

Purchase orders will be placed by Tech Data by fax or electronically



(c) A purchase order shall be deemed accepted by Trancell unless

Trancell notifies Tech Data in writing within five (5) days after

receiving the purchase order that Trancell does not accept the

purchase order.



*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission. 2.2 Purchase Order Alterations or Cancellations. Prior to shipment of

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Products, Trancell shall accept alterations or cancellation to a purchase

order in order to: (i) change a location for delivery, (ii) modify the

quantity or type of Products to be delivered or (iii) correct typographical

or clerical errors.



2.3 Evaluation or Demonstration Purchase Orders. Trancell shall provide to

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Tech Data a reasonable number of demonstration or evaluation products at no



2.4 Product Shortages. If for any reason Trancell's production is not on

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schedule, Trancell may allocate available inventory to Tech Data and make

shipments based upon a fair and reasonable percentage allocation among

Trancell's customers. Such allocations shall not impact the calculation of

performance rebates.



ARTICLE III. DELIVERY AND

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ACCEPTANCE OF PRODUCTS

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3.1 Acceptance of Products. Tech Data shall, after a reasonable time to

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inspect each shipment, accept Product (the "Acceptance Date") if the

Products and all necessary documentation delivered to Tech Data are in

accordance with the purchase order. Any Products not ordered or not

otherwise in accordance with the purchase order, (e.g. mis-shipments,

overshipments) may be returned to Trancell at Trancell's expense (including

without limitation costs of shipment or storage). Trancell shall refund to

Tech Data within ten (10) business days following notice thereof, all

monies paid in respect to such rejected Products. Tech Data shall not be

required to accept partial shipment unless Tech Data agrees prior to



3.2 Title and Risk of Loss. FOB Trancell Shipping Point title and risk of loss

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or damage to Products shall pass to Tech Data at the time that the Products

are shipped by Trancell (i.e., delivered to Common Carrier).



3.3 Transportation of Products. Trancell shall deliver the Products clearly

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marked on the Product package with serial number, product description and

machine readable bar code (employing UPC or other industry standard bar

code) to Tech Data at the location shown and on the delivery date set forth

in the applicable purchase order or as otherwise agreed upon by the

parties. Charges for transportation of the Products shall be paid by

Trancell. Trancell shall use only those common carriers preapproved by

Tech Data or listed in Tech Data's published routing instructions, unless

prior written approval of Tech Data is received.





ARTICLE IV. RETURNS

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4.1 Inventory Adjustment. Trancell agrees to accept return of overstocked

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Products as determined by Tech Data, of not more than [ * * * ]. Shipments

of Product being returned shall be new, unused and in sealed cartons.

Vendor shall credit Tech Data's account in the amount of the price paid by

Tech Data therefor less any price protection credits but not including any

early payment or prepayment discounts (the "Return



*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.

Credit"). Tech Data will supply Trancell with an offsetting purchase order

of equal or greater value.



4.2 Defective Products/Dead on Arrival (DOA). Tech Data shall have the right

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to return to Trancell for credit any DOA Product that is returned to Tech

Data within sixty (60) days after the initial delivery date to the End User

and any Product that fails to perform in accordance with Trancell's product

warranty, for credit. Trancell shall bear all costs of shipping and risk

of loss of DOA and in-warranty Products to Trancell's location and back to

Tech Data or Tech Data's Customer. If Trancell delivers defective and DOA

Product of more than [* * * ], Trancell shall [* * * ].



4.3 Obsolete or Outdated Product. Tech Data shall have the right to return for

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full credit, without limitation as to the dollar amount, all Products that

become obsolete or Trancell discontinues or are removed from Trancell's

current price list; provided Tech Data returns such Products within ninety

(90) days after Tech Data receives written notice from Trancell that such

Products are obsolete, superseded by a newer version, discontinued or are

removed from Trancell price list.



4.4 Miscellaneous Returns.

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(a) Bad Box. Tech Data shall return for credit Products which have boxes

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that are or become damaged. Tech Data will place an offsetting

purchase order for equal or greater value.



(b) Non-Saleable. Tech Data may return Non-Saleable Product to Trancell

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for credit. Tech Data will request a Return Material Authorization

Number (RMA) for this return. Tech Data will place an offsetting

purchase order for equal or greater value.



ARTICLE V. PAYMENT TO VENDOR

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5.1 Charges, Prices and Fees for Products. Charges, prices, quantities and

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discounts, if any, for Products shall be determined as set forth in

Schedule 5.1, or as otherwise mutually agreed upon by the parties in

writing, and may be confirmed at the time of order. In no event shall

charges exceed Trancell's then current established charges. Tech Data

shall not be bound by any of Trancell's suggested prices.



5.2 Payment. Except as otherwise set forth in this Agreement, any undisputed

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sum due to Trancell pursuant to this Agreement shall be payable as follows:

[* * * ], net forty-five (45) days after the invoice receipt. Trancell

shall invoice Tech Data no earlier than the applicable shipping date for

the Products covered by such invoice. Products which are shipped from

outside the United States, shall not be invoiced to Tech Data prior to the

Products being placed on a common carrier within the United States for

final delivery to Tech Data. The due date for payment shall be extended

during any time the parties have a bona fide dispute concerning such

payment. Notwithstanding anything herein to the contrary, for the initial

order only, payment shall be made by Tech Data upon resale of



*Material has been omitted pursuant to a request for confidential treatment. Such material has been filed separately with the Securities and Exchange Commission.

the Products and Tech Data may return any of the Products delivered under

the initial order for credit.



5.3 Invoices. A "correct" invoice shall contain (i) Trancell's name and

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invoice date, (ii) a reference to the purchase order or other authorizing

document, (iii) separate descriptions, unit prices and quantities of the

Products actually delivered, (iv) credits (if applicable), (v) shipping

charges (if applicable) (vi) name (where applicable), title, phone number

and complete mailing address as to where payment is to be sent, and (vii)

other substantiating documentation or information as may reasonably be

required by Tech Data from time to time.



5.4 Taxes. Tech Data shall be responsible for franchise taxes, sales or use

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taxes or shall provide Trancell with an appropriate exemption certificate.

Trancell shall be responsible for all other taxes, assessments, permits and

fees, however designated which are levied upon this Agreement or the

Products, except for taxes based upon Tech Data's income. No taxes of any

type shall be added to invoices without the prior written approval of Tech



5.5 Fair Pricing and Terms. Trancell represents that the prices charged and

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the terms offered to Tech Data are and will be at least as beneficial to

Tech Data as those charged or offered by Trancell to any of its other

distributors or customers in the channel. If Trancell offers price

discounts, payment discounts, promotional discounts or other special prices

to its other distributors or customers in the channel, Tech Data shall also

be entitled to participate and receive notice of the same no later than

other distributors or customers.



5.6 Price Adjustments:

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(a) Price Increases. Trancell shall have the right to incr ...