European Distribution Agreement

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.



DISTRIBUTION AGREEMENT



This Agreement (the "Agreement") is made on the 30th day of April 1998.





INGRAM EUROPEAN COORDINATION CENTER N.V./S.A. whose registered office is situated at Leuvensesteenweg 11, B-1932 Zaventem, B elgium, on behalf of its Ingram Micro affiliate companies in Europe (including but not limited to those companies listed on the attached schedule 1) "Ingram") and



DRAGON SYSTEMS INC of 320 Nevada Street, Newton, MA 02160, USA ("Vendor").



IT IS AGREED:



T he terms and conditions of the distribution agreement between Ingram Micro Inc. and Vendor dated 15th December 1997 ("Distribution Agreement"), attached hereto as Exhibit A and made a part hereof by reference, are hereby agreed to and accepted by Ingram a nd Vendor (as amended by the terms of this document) to govern any distribution relationship in Europe between Ingram and Vendor and the terms of sale and purchase of Products between Ingram and Vendor.



Amendments to the Distribution Agreement



Clause 4: deliveries will be FOB Ingram's designated European warehouse. This shall be one location designated by Ingram. All other terms of clause 4 of the Distribution Agreement remain unchanged.



Additional Clauses



The following provisions will be deemed to be added.



This Agreement shall be construed and enforced in accordance with the laws of the State of California, except that body of law concerning conflicts of law. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this agreement.





[STRIKE-THROUGH TEXT] Vendor warrants, in addition to any other warranties, that the Products will comply with all health and safety regulations applying at the date of supply in the place where the Products are to be used by the end-user.



The provisions of the attached Schedu le 2 shall apply in addition to the other terms and conditions of this Agreement in respect of all Products supplied by Vendor for the purposes of retail sale and/or which are supplied by IM for the purposes of retail sale to its customers.



In the event of the Distribution Agreement containing provisions which are in breach of European Union Law, it is expressly agreed that such provisions will be void and non applicable.



All product must be packaged and include sufficient components (or advice thereon) as to make them suitable for retail sale.



INGRAM EUROPEAN COORDINATION CENTER N.V./S.A. DRAGON SYSTEMS INC.





By: Karel Everaet By: Janet M. Baker

-------------------------------- ----------------------------- Name: Karel EVERAET Name: Janet M. Baker

-------------------------------- ----------------------------- Title: MANAGING DIRECTOR Title: President

-------------------------------- ----------------------------- Date: N30538 Date: 30 April 1998

-------------------------------- -----------------------------







SCHEDULE 1



AUSTRIA: Ingram Micro Computer Ges.m.b.H Concorde Business Park CS 2320 Schwechat Tel: +43 1706 17 77 10 Fax: +43 1706 17 77 18 Reg. No. 131945m VAT No. ATU 38585401



BELGIUM: Ingram Micro NV Leuvensesteenweg 11 1932 Sint-Stevens-Woluwe Tel: +32 27 22 95 11 Fax: +32 27 25 15 11 Reg. No. HRB 456.077.106 VAT No. BE 425.077.655



DENMARK: Ingram Micro A/S Slobemarken 15 2970 Hereholm Tel: +45 45 16 55 00 Fax: +45 42 76 55 80 Reg. No. 110598 VAT No. DK 70562618



FINLAND: Ingram Micro OY Sinimlentle 10B 02631 Espoo Tel: +35 89 50 27 41 Fax: +35 89 50 27 499 Reg. No. 565-016 VAT No. 0690814/0



FRANCE: Ingram Micro S.A.R.L. Carrefour de l'Europe 59812 Lesquin Cedex (Lille) Tel: +33 3 20 88 58 00 Fax: +33 3 20 88 58 88 Reg. No. R.C. LILLE 928127 VAT No. FR 50 344658117



GERMANY: Ingram Micro Deutschland GmbH Hans-Pinsel-Strasse 9B 85540 Haar (Munchen) Tel: +49 89 46 18-0 Fax: +49 89 46 18 1190 Reg. No. HRB Munchen 115953 VAT No. DE 812261350



ITALY: Ingram Micro SpA Via Prima Maggio 2/4 20068 Peschlera Borromeo (Milano) Tel: +39 255 351 Fax: +39 255-38401 Reg. No. 1367714 VAT No. IT 10297220153



THE NETHERLANDS: Ingram Micro BV Mississippidreef 87 3506 CE Ultrecht Tel: +31 30 285 1801 Fax: +31 30 262 1330 Reg. No. 85572 VAT No. NL 8047.55.486.BO1



NORWAY: Ingram Micro AS Brobeldnvelen 80 0583 Oslo Tel: +47 23 05 0000 Fax: +47 23 05 0001 Reg. No. 963054432 VAT No. NO 963054432



SPAIN: Ingram Micro SA C/Sant Farran 52-68 Pol. Ind. Almeda 08940 Cornella de Llobragat (Barcelona) Tel: +34 3 474 90 90 Fax: +34 3 377 34 50 Reg. No. A-75/076395 VAT No. ESA78076395



SWEDEN: Ingram Micro AB Kronborgsgrand 1 15487 Kista Tel: +46 8 477 15 00 Fax: +45 8 703 93 48 Reg. No. 556254/8452 VAT No. SE 556254845201



SWITZERLAND: Ingram Micro AG Hardlinstrasse 15 8957 Spreltenbach Tel: +41 56 4197 929 Fax: +41 56 4197 977 Reg. No. CH 400.3.017.0363 VAT no. CH 393154



UNITED KINGDOM: Ingram Micro (UK) Ltd Garamond Drive Wymbush Milton Keynes MK8 8DF Buckinghamshire, UK Tel: +44 1908 260 422 Fax: +44 1908 265 526 Reg. No. 1609968 VAT No. GB 440.3552.80





Confidential Materials omitted and filed separately

with the Securities and Exchange Commission. Asterisks

denote omissions.



SCHEDULE 2



RETAIL PRODUCTS





1. Defective Products



Vendor agrees to accept back for credit any Product returned to Ingram as defective by Ingram's retail customers which has been returned to the retail customer within [**] of the date of sale to the end user.





2. Pass through MDF



Vendor agrees to make a Marketing Development Fund available for Ingram and Ingram's retail customers





3. Promotional opportunities



Vendor will from time to time subscribe to Ingram's promotion opportunities.





4. Merchandising services



Vendor will from time to time subscribe to Ingram's store Merchandising providing in-store focus.





5. Product Requirements



5.1 PRODUCT CHANGES; All version changes for any product must be

notified in writing to Ingram as soon as reasonably practical

with details of Ingram's cost price and any RRP (or similar)

and in any event, at least 30 days before release date.



5.2 NEW PRODUCTS; Vendor must inform Ingram as soon as reasonably

possible of all new product releases and supply to Ingram

sufficient samples free of charge, as Ingram need to supply to

its retail customers for advertising purposes or evaluation.

Vendor will also supply bar code information, product

dimensions (both outer case and contents) and key selling



5.3 BAR CODES All product must bear EAN-13/UPC bar code number and

code readable on an external facing of the packaging of each

product, any change of code must be notified in writing to

Ingram 14 days prior to the date of any change.



5.4. SHRINK WRAPPING If required by a particular retail customer of

Ingram's products must be shrink-wrapped.



5.5 SECURITY TAGGING All Products must be security tagged to a

standard agreed between Ingram, Vendor and its retail



5.6 CERTIFICATE RATINGS All age restricted Products must display

the appropriate symbol on the Product and advice given to

Ingram's Buyer in this respect



6. Dummy Boxes



Reasonable quantities of dummy boxes will be supplied to Ingram from time to time as Ingram requests.





7. Specifications





EXHIBIT A





DISTRIBUTION AGREEMENT



THIS DISTRIBUTION AGREEMENT ("Agreement"), is entered into this 15th day of December, 1997, by and between INGRAM MICRO INC. ("Ingram"), a Delaware corporation, having its principal place of business at 1600 E. St. Andrew Place, Santa Ana, Calif o rnia 92705, and DRAGON SYSTEMS INC. ("Vendor"), a Delaware corporation, having its principal place of business at 320 Nevada Street, Newton, Massachusetts 02160. The parties desire to and hereby do enter into a distributor/supplier relationship, the gover ning terms and mutual promises of which are set out in this Agreement. This Agreement, upon the full execution hereof, shall supersede in its entirety the mutual Start-up Agreement dated July 14, 1997.



1. DISTRIBUTION RIGHTS



1.1 Territory Ven dor grants to Ingram, including its affiliates for resale, and Ingram accepts, the non-exclusive right to distribute in North America all computer products produced and/or offered by Vendor ("Product") during the term of this Agreement. Ingram shall have the right to purchase, sell and ship to any reseller within the territory or to Ingram's affiliate, or at Vendor's option Ingram's affiliate may purchase direct from Vendor.



1.2 Product Vendor agrees to make available and to sell to Ingram such Produ ct as Ingram shall order from Vendor at the prices and subject to the terms set forth in this Agreement. Ingram shall not be required to purchase any minimum amount or quantity of the Product.



2. TERM AND TERMINATION



2.1 Term The initial term of this Agreement is one (1) year. Thereafter the Agreement will automatically renew for successive one (1) year terms, unless it is earlier terminated.



2.2 Termination



(a) Either party may terminate this Agreement, with or without cause, by giving thirty (30) days written notice to the other party.



(b) Either party may immediately terminate this Agreement with written notice if the other party:



(i) materially breaches any term of this Agreement and such breach continues for thirty (30) business days after written notification thereof; or



(ii) ceases to conduct business in the normal course, becomes insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or avails itself of or becomes subject to any proceeding under any Bankruptcy Act or any other federal or state statute relating to insolvency or the protection of rights of creditors; or



(iii) attempts to assign or otherwise transfer its rights hereunder unless both have agreed in writing to such assignment or transfer.



3. INGRAM OBLIGATIONS



3.1 Product Availability Ingram will list Product in its catalog(s) as appropriate and endeavor to make such Product available to customers.



3.2 Advertising Ingram will advertise and/or promote Product in a commercially reasonable manner and will transmit as reasonably necessary Product information and promotional materials to its customers.



3.3 Support Ingram will make its facilities reasonably available for Vendor and will assist in Product training and support. Ingram will provide reasonable, general Product technical assistance to its customers, and will direct all other technical issues directly to Vendor.



3.4 Administration



(a) Upon request, Ingram will furnish Vendor with a valid tax exemption certificate.



(b) Ingram will provide Vendor standard sales-out and inventory reports via its electronic Bulletin Board System.



(c) Ingram may handle its customers' Product returns by batching them for return to Vendor at regular intervals.



4. VENDOR OBLIGATIONS



4.1 Shipping/Export



(a) Vendor shall ship Product pursuant to Ingram purchase order(s) ("P.O."). Product shall be shipped F.O.B. Ingram's designated warehouse with risk of loss or damage to pass to Ingram upon delivery to the warehouse specified in Ingram's P.O.



(b) Ingram requires concurrent with the execution of th ...