Hardware Distribution Agreement-bell Microproducts

BELL MICROPRODUCTS, INC.
HARDWARE DISTRIBUTION AGREEMENT


This Agreement, made this 10 day of October, 1996, is by and between Bell Microproducts, Inc. ("Distributor"), a California Corporation having its principal place of business at 1941 Ringwood Avenue, San Jose 95131-1721, and Sage Inc. ("Vendor"), a California Corporation having its principal place of business at 4633 Ironsides Drive, Suite 420, Santa Clara, California, 95054.


RECITALS


Vendor manufactures, produces and/or supplies computer products and desires to grant to Distributor the right to sell and distribute the products, as hereinafter defined, upon the terms and conditions set forth below.


Distributor is engaged in the sale and distribution of computer products and desires to have the right to sell and distribute Vendor's products and upon said terms and conditions.


In consideration of the mutual covenants and agreements set forth below, the parties hereto agree as follows:


1. RECITALS


The recitals stated above are incorporated herein by reference.


2. GRANT OF DISTRIBUTION RIGHTS


2.1 Vendor hereby grants to Distributor, and Distributor accepts, the
non-exclusive right to distribute in the geographic regions
("Territory") and to customers ("Customers") as defined in Exhibit A,
attached hereto, all computer products ("Product" or "Products")
listed on Exhibit B, attached hereto and made a part hereof, as
amended from time to time by mutual written agreement.


2.2 Vendor agrees to make available and to sell to Distributor such
Product as Distributor shall order from Vendor at the prices and
subject to the terms set forth in this Agreement. Vendor reserves the
right at any time to change, modify or discontinue any Product, model,
type or design furnished hereunder. In addition, Vendor reserves the
right to change its published Distributors' Price for any Product at
any time.


2.3 Vendor may appoint other distributors to distribute its Products. 2 3. TERM


The term of this Agreement shall be for a period of one (1) year, beginning
on the date first above written. Thereafter, the Agreement shall be renewed
for successive terms of one (1) year without further notice unless
terminated sooner as provided under the provisions of the Agreement.


4. OBLIGATIONS OF VENDOR


4.1 Vendor shall use its best efforts to ship Product promptly after
receipt of Distributor's Purchase Order for Product, unless otherwise
directed by Distributor.


4.2 At the time of initial order and from time to time thereafter, Vendor
shall provide at no charge reasonable amounts of sales literature,
which amounts shall be solely determined by Vendor.


4.3 For each Product shipment to Distributor, Vendor shall issue to
Distributor an invoice showing Distributor's Purchase Order number and
Product part number, description, price and any discount. At
Distributor's request, Vendor shall provide Distributor with a current
statement of account, listing all invoices outstanding and any
payments made and credits given since the date of the previous
statement, if any.


5. OBLIGATIONS OF DISTRIBUTOR


5.1 Distributor must submit written Purchase Orders (which may be
transmitted via facsimile) for all Products purchased under this
Agreement. Purchase Orders must specify Product model numbers,
quantity ordered, shipping destinations, shipping dates and preferred
carrier (if any). All such Purchase Orders are subject to the terms
and conditions set forth in this Agreement and in the attached Exhibit
C. Any terms or conditions which add to or differ from the terms and
conditions of this Agreement shall be invalid. Distributor agrees,
subject to Vendor's ability to supply Product(s), that Distributor
will carry a sufficient inventory of Product(s) to provide immediate
"off-the-shelf" delivery to Distributor's Customers, and that, upon
request, Distributor will make available to Vendor its current Product
inventory status.


5.2 Distributor will handle all Product returns from its Customers and
batch them for return to Vendor at regular intervals.


5.3 Distributor agrees to consistently use best efforts to market, sell,
promote and otherwise encourage the purchase of Products by Customers.
Distributor shall factually present Products in terms of function and
performance, and conduct its business in a manner reflecting favorably
upon Vendor's valuable good will and reputation. Distributor further
agrees to display, demonstrate and market Products prominently and
favorably in comparison with other competitive products.


5.4 Distributor will maintain sufficient facilities, personnel and
demonstration units of Products so as to be able to effective
demonstrate Products. Vendor agrees to provide technical assistance on
an ongoing basis to its Customers. Distributor will make its
facilities available for Product training and support, with the
assistance of Vendor.


5.5 Distributor agrees to provide to Vendor sell-through data, including
customer name, address, and Product type for each Product within
fifteen (15) days of the end of each month.


2 3 6. PRICE AND TERMS


6.1 The net price (excluding taxes, duties, freight charges and insurance)
for Products sold by Vendor to Distributor shall be Vendor's
Distributors' Price appearing in effect on the date Vendor receives
Distributor's Purchase Order. Vendor may change the Distributor's
Price of any or all of its Products with thirty (30) days written
notice.


6.2 In the event that Vendor increases its published Distributors' Price
for any Product which Distributor is authorized to resell, only
Purchase Orders previously accepted by Vendor will be invoiced at the
lower price. All new Purchase Orders will be subject to the price
increase.


6.3 In the event that Vendor decreases its published Distributors' Price
for any Product which Distributor is authorized to resell, Vendor will
apply "Price Protection" to any Purchase Order in process, and to any
Product which is in Distributor's inventory at the time of the price
decrease, with the following restrictions:


(i) Products in inventory must have been purchased directly from
Vendor. Vendor reserves the right to verify Price Protection
claims and audit inventory at Distributor's sites;


(ii) Only Product(s) with invoices issued within the previous one
hundred eighty (180) days will be protected;


(iii) Distributor must present a written request for credit within
thirty (30) days of the price decrease, including the serial
numbers of Product(s) affected; and


(iv) Once Price Protection is approved by Vendor, Distributor must
submit a Purchase Order for Product(s) with a dollar value equal
to or greater than the price protection credit total.


7. SHIPPING


Vendor shall ship Product only pursuant to Distributor Purchase Orders
received by Vendor. Product shall be shipped F.O.B. Vendor's warehouse,
with risk of loss or damage as set forth in Standard Terms and Conditions,
Exhibit C, Section 9, attached hereto. Further, Vendor's standard shipping
and handling charges, as set forth in Standard Terms and Conditions,
Exhibit C, Section 9, attached hereto and amended from time to time, shall
apply to all Purchase Orders.


8. CANCELLATIONS


Distributor may, without charge, cancel any Products on order, provided
that Vendor receives written confirmation of such cancellation at least
two (2) days prior to the original scheduled shipment date.


9. PROMOTIONAL ACTIVITIES


9.1 Distributor may advertise and promote Product ("Promotional
Activities") in a commercially reasonable manner and may use Vendor's
trademarks, service marks and trade name in connection therewith;
provided that Distributor shall submit the advertisement or promotion
to Vendor for review and approval prior to the occurrence of the
promotion, which approval shall not be unreasonably withheld or
delayed. Vendor retains all rights, title and interest in its trade
mark, and all use by Distributor of such trademarks inures to
Vendor's benefit.


3 4
9.2 Vendor agrees to cooperate with Distributor in Promotional Activities
and hereby grants Distributor a Cooperative Promotion Allowance
("CPA"). Vendor shall accrue the CPA at a rate of two percent (2.0%)
of invoice amounts for Product purchased from Vendor and paid by
Distributor, excluding shipping, handling, taxes and the like, and
adjusted for credits.


9.3 Distributor shall use the CPA for Promotional Activities such as, but
not limited to, seminars, print advertising and direct mail, which
prominently and positively feature Products. Upon receipt of
reasonable evidence of such expenditures, Vendor will debit the full
amount of qualifying expenditures from the CPA accrued to date by
Distributor, and Vendor will credit the same amount against Vendor's
account.


9.4 CPA credits must be used within twelve (12) months of accrual or be
lost by Distributor.


10. STOCK ROTATION


Distributor may return Products which Distributor has previously taken
delivery of subject to the following conditions:


10.1 Stock rotation may occur in the months of March, June, September and
December.


10.2 Product must have been purchased directly from Vendor and must be in
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