----

----

----

| Clause     |                                       | Page      No.  |
|------------|--------------------------------------------|----------------|
|       |                                       |           |
| 1.         | INTERPRETATION                             |   1       |
|       |                                       |           |
| 2.         | APPOINTMENT AND TERM                       |   2       |
|       |                                       |           |
| 3.         | OBLIGATIONS DURING      EMPLOYMENT         |   3       |
|       |                                       |           |
| 4.         | INTERESTS IN OTHER      BUSINESSES         |   4       |
|       |                                       |           |
| 5.         | HOURS OF WORK                              |   5       |
|       |                                       |           |
| 6.         | REMUNERATION AND    BENEFITS               |   5       |
|       |                                       |           |
| 7.         | EXPENSES                                   |   6       |
|       |                                       |           |
| 8.         | HOLIDAYS                                   |   6       |
|       |                                       |           |
| 9.         | SICKNESS AND INJURY                        |   7       |
|       |                                       |           |
| 10.        | CONFIDENTIALITY                            |   7       |
|       |                                       |           |
| 11.        | RECORDS                                    |   8       |
|       |                                       |           |
| 12.        | INTELLECTUAL PROPERTY                      |   9       |
|       |                                       |           |
| 13.        | PROTECTIVE COVENANTS                       |   10      |
|       |                                       |           |
| 14.        | TERMINATION                                |   12      |
|       |                                       |           |
| 15.        | CORPORATE CHANGE                           |   14      |
|       |                                       |           |
| 16.        | DISCIPLINARY AND GRIEVANCE      PROCEDURES |   14      |
|       |                                       |           |
| 17.        | USE OF ELECTRONIC      COMMUNICATIONS      |   15      |
|       |                                       |           |
| 18.        | DATA PROTECTION                            |   15      |
|       |                                       |           |
| 19.        | NOTICES                                    |   16      |
|       |                                       |           |
| 20.        | FORMER SERVICE    AGREEMENTS               |   16      |
|       |                                       |           |
| 21.        | POWER OF ATTORNEY                          |   16 |
|       |                                       |           |
| 22.        | MISCELLANEOUS                              |   17 |
|       |                                       |           |
| 23.        | GOVERNING LAW AND      JURISDICTION        |   17      |
|       |                                       |           |
| SCHEDULE 1 | BONUS                                      |   18      |
|       |                                       |           |
| SCHEDULE 2 | CONFIDENTIAL    INFORMATION                |  19       |

----

| 1.   | IDEAL HARDWARE LIMITED      registered in England (Company No. 03969946) whose registered      office is at Fountain Court, Cox Lane, Chessington, Surrey KT9 1S1 ("the      Company"); and |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | GRAEME WATT of21      Dalebury Road, Wandsworth Common, London SW17 7HQ ("the      Executive"). |
|----------------|-------------------------------------------------------------------------------------------------|

| 1.   | INTERPRETATION |
|----------------|----------------|

| 1.1   | In      this Agreement the following words and expressions shall have the      following meanings unless the context otherwise  requires:- |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.2   | Any      reference in this Agreement to the employment of the Executive is a      reference to the Executive's employment by the Company under this      Agreement. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.3   | The      headings in this Agreement (and any descriptive notes in brackets      following references to statutes or to other documents) and any front or      back sheet or cover and any index hereto are for convenience only and      shall not affect the construction or interpretation of this      Agreement. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.4   | Any      reference in this Agreement to a person shall (unless the context      otherwise requires) include a reference to a natural person and a body      corporate and to any unincorporated body of persons including any firm,      association, partnership, trust, society or  charity. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.5   | Any      reference in this Agreement to any "party" or to the "parties" are to the      parties to this Agreement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------|

| 1.6   | Save      as herein expressly otherwise provided, expressions and words which are      defined in the Companies Act 1985 shall have the same meanings in this      Agreement. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.7   | This      Agreement shall be binding upon and enure for the benefit of the parties'      respective successors in title andassigns. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------|

| 1.8   | No      right of any party to agree any amendment, variation, waiver, or      settlement, under or arising from or in respect of this Agreement, or to      terminate this Agreement, shall be subject to the consent of any person      who has rights under this Agreement by virtue of the Contracts (Rights of      Third Parties) Act 1999. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | APPOINTMENT ANDTERM |
|----------------|---------------------|

| 2.1   | The      term of the employment shall commence on 13 April 2004 (the "Commencement      Date") and, subject to Clause 14, shall continue until terminated by the      Company or the Executive giving to the other not less than twelve months'      notice in writing (the "Term"). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2   | The      Executive shall provide his services as President of Europe for Bell      Microproducts or in such other capacity as the Company may from time to      time reasonably require. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2.3   | The      Executive's employment will begin on the Commencement Date, and the      Executive's period of continuous employment for statutory purposes shall      be deemed to have commenced on the samedate. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | OBLIGATIONS DURING      EMPLOYMENT |
|----------------|------------------------------------|

| 3.1   | The      Executive shall during the Term (unless prevented by sickness or      injury): |
|-----------------|-----------------------------------------------------------------------------------------|

| 3.1.1   | devote      the whole of his time, attention, skill and ingenuity during working hours      (as described in Clause 5) to his duties under this    Agreement; |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.2   | faithfully      and using his best endeavours carry out all work consistent with his      position which may be required of him;and |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.3   | faithfully      and diligently perform such duties and exercise such powers consistent      with his position as may from time to time be assigned to or vested in him      by the Board; |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.4   | comply      with all reasonable and lawful requests made by the  Board; |
|-------------------|-------------------------------------------------------------------------|

| 3.1.5   | use      his best endeavours to promote and protect and extend the business,      regulation, welfare and the interests of the Company and the      Group; |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.6   | comply      with all the Company's rules, regulations, policies and procedures from      time to time in force; |
|-------------------|-----------------------------------------------------------------------------------------------------------------|

| 3.1.7   | give      to the Board or such persons as it shall nominate at all times promptly      (in writing if so requested) all such information and explanations as are      known to the Executive regarding the affairs of the Company and the Group      as the Board may require; |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.8   | report      to the Board any matters of concern that come to the Executive's      attention, it being the duty of the Executive to report any acts of      misconduct, dishonesty, breach of Company rules or breach of any of the      rules of any relevant regulatory bodies committed, contemplated or      discussed by any other member of staff or other third party. The Company      shall keep confidential whatever is reported save as required by law or a      court or authority of competentjurisdiction; |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.9   | work      from the Company's premises in Chessington, Surrey or such other location      in the United Kingdom as the Company shall  require; |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1.10   | travel      on Company or Associated Company business in the United Kingdom or      overseas as the Company or Associated Company may from time to time      require or as may be necessary for the fulfilment of his role as President      for Europe. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2   | The      Company reserves the right to suspend all or any of the Executive's duties      and powers on such terms as it considers expedient (including a term that      the Executive shall not attend at the Company's or any Associated      Company's premises and/or that the Executive shall not contact or have      dealings with any customer, client, supplier or employee of the Company or      any Associated Company) or to require the Executive to carry out the      duties of another position either in addition to or instead of his duties      as President for Europe of BellMicroproducts. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3.3   | The      Company shall be under no obligation to assign any duties to the Executive      and shall be entitled to exclude him from its premises. The Executive      shall remain bound by his obligations of good faith, fidelity and loyalty      to the Company during such suspension, and shall continue to receive his      full salary and benefits. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4   | The      Company reserves the right to assign its rights and obligations under this      Agreement to any Associated Company and thereafter any reference to the      Company in this Agreement shall be a reference to any such Associated      Company. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | INTERESTS IN OTHER      BUSINESSES |
|----------------|------------------------------------|

| 4.1   | During      the Term the Executive shall not (unless the Board shall in its absolute      discretion so consent in writing) carryon or be concerned, engaged or      interested in or assume responsibilities or duties for, whether directly      or indirectly in relation to, any person whether corporate or not (other      than any of the businesses of the Group) save that notwithstanding this      Clause the Executive may: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1.1   | be      interested as a holder directly or through nominees for investment      purposes only in any securities in any person which are for the time being      admitted to trading on a recognised stock exchange provided that none of      the holdings of such securities in which the Executive shall be so      interested shall at any time exceed three per cent in aggregate of the      nominal value of the securities concerned for the time being in issue;      and |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1.2   | to      the extent that and only for so long as the Board shall in its absolute      discretion so consent in writing, be concerned or take an interest in or      assume responsibilities or duties in any person, provided always      that: |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1.2.1   | the      business or activity of such person does not conflict nor compete with and      is not likely to conflict or compete with any business of the Company or      any Associated Company; and |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1.2.2   | the      Executive's concern and interest in and responsibilities and duties      towards such person do not and are unlikely to interfere with the proper      performance of the Executive's duties under this  Agreement. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2   | Subject      to any regulations issued by the Company, the Executive shall not be      entitled to receive or obtain directly or indirectly any inducement,      discount, rebate or  commission in respect of any sale or      purchase of goods effected or other business transacted (whether or not by      him) by or on behalf of the Company or any Associated Company and if he      (or any firm or company in which he is interested) shall obtain any such      discount, rebate or commission he shall account to the Company or the      relevant Associated Company for the amount received by him (or a due      proportion of the amount received by such -company or firm having regard      to the extent of his interesttherein). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.   | HOURS OF WORK |
|----------------|---------------|

| 6.   | REMUNERATION AND  BENEFITS |
|----------------|----------------------------|

| 6.1   | The      Company shall pay the Executive during the Term a salary at the rate of      £285,000 per year (inclusive of any director's fees payable by the Company      or any Associated Company) less deductions for tax and National Insurance      Contributions (Base Salary) which shall accrue from day to day and shall      be payable by twelve equal monthly  instalments in arrears, on      or about the last working day of each calendar month by credit transfer      direct to the Executive's bankaccount. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.2   | The      Executive's salary may be reviewed from time to time at the absolute      discretion of the Board. |
|-----------------|-------------------------------------------------------------------------------------------------------------|

| 6.3   | The      Executive agrees and hereby authorises the Company to deduct from any      wages (as defined in Part II of the Employment Rights Act 1996) due to the      Executive any sums due from the Executive to the Company or any Associated      Company. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.4   | The      Company shall pay the Executive a car allowance of £6,000 per year,      payable by equal monthly instalments on or about the last working day of      each month, provided the Executive shall remain eligible to drive in the      UK.  In addition, the Company will pay the Executive a mileage      rate of £0.24 per mile incurred in the proper performance of his duties as      part of the Executive's expenses (Clause7). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.5   | The      Company shall provide the Executive with a lap top computer and GSM mobile      telephone that the Parties deem is appropriate. conditional upon the      Executive complying with his obligations at Clause 17 below, his taking      good care of the equipment and returning the equipment to the Company's      Head Office in the United Kingdom immediately on the termination of his      employment. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.6   | The      Executive is entitled to a discretionary bonus in accordance with the      scheme set out in Schedule 1 attached to this Agreement, which shall be      payable at the Company's absolutediscretion. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.7   | The      Company shall pay by way of 12 monthly instalments £12,000 per annum into      the Executive's personal pension plan (the "Pension Payment") provided      that the personal pension plan is approved or provisionally approved by      the Inland Revenue; alternatively the Executive may elect to direct some      or all of the Pension Payment for the payment of other insurances or      memberships. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 6.8   | The      Executive shall be eligible to join the Company's private medical      insurance scheme, subject to the rules of the scheme from time to time in      force, or Executive may chose to continue his current medical insurance      scheme in which case the Company will contribute up to £2,018.00 per year      towards the premium cost. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.9   | The      Executive may chose to continue his participation in his current life      insurance scheme in which case the Company will contribute up to £3,052.00      per year, including tax gross up, toward the premium  cost. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.10   | The      Executive may chose to continue his participation in his current income      protection scheme in which case the Company will contribute up to      £18,210.00 per year, including tax gross up, toward the premium      cost. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | EXPENSES |
|----------------|----------|

| 8.   | HOLIDAYS |
|----------------|----------|

| 8.1   | The      Executive shall, in addition to public and bank holidays, be entitled to      25 working days paid holiday in each calendar year or such proportionate      number of days as shall correspond to the actual period that the Executive      may have worked for the Company during the calendar year, to be taken at      such times as shall have been approved by the  Board. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.2   | The      Company's holiday year runs from 1 January to 31  December. |
|-----------------|----------------------------------------------------------------------|

| 8.3   | The      Executive shall not be entitled to carry forward any annual holiday      entitlement untaken by him for any reason during the calendar year in      which it accrued without the prior written consent of the      Board. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.4   | Upon      the termination of the Executive's employment the Executive's entitlement      to accrued holiday pay shall be calculated on a pro rata basis in respect      of each completed month of service in the calendar year in which his      employment terminates provided thatwhere:- |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.4.1   | the      Executive shall have taken more holiday than his accrued entitlement the      Company is hereby authorised (for the purposes of Part II of the      Employment Rights Act 1996) to make an appropriate deduction from the      Executive's final salary payment (and so that to the extent that any sums      due to the Executive from the Company are insufficient to cover the      excess, the Executive shall pay the balance immediately upon request);      and |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.4.2   | the      Executive's employment is terminated summarily for cause he shall not be      entitled to receive any pay in lieu of accrued holiday in excess of his      statutory entitlement as at the termination  date. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 8.5   | The      Executive shall take any outstanding holiday entitlement during any period      of notice, and should the Executive fail to do so, the Executive shall      then lose any entitlement to holiday pay in  lieu. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.6   | The      Company shall be entitled to withhold any entitlement to holiday pay in      lieu if the Executive fails to give the Company proper notice of      termination or if the Executive leaves before such notice has expired. In      such a case the Executive's holiday pay in lieu shall be reduced by the      number of days notice not worked. In any case where the Company agrees to      waive the requirement for the Executive to work out his notice, this      sub-clause shall not apply. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.   | SICKNESS ANDINJURY |
|----------------|--------------------|

| 9.1   | If      at any time during the Term the Executive is absent from work due to      sicknessor injury he shall promptly forward to the Company, if required,      evidence of such sickness or injury in a form satisfactory to the      Board. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.2   | Provided      that the Executive complies with sub-clause 9.1, the Company will pay the      Executive his Base Salary together with his benefits under the terms of      the Agreement (inclusive of any statutory sick pay) for the first forty      days in aggregate of absence in any period of fifty two weeks but shall      not be required to pay the Executive any salary and/or other remuneration      or benefits for any further periods of such absence in any period of fifty      two weeks, although the Company may do so in its sole discretion (it being      agreed and understood that any exercise of this discretion by the Company      does not give the Executive any right, entitlement or legitimate      expectation for the future). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.3   | If      any incapacity is caused by any alleged action or wrong of a third party      and the Executive decides to claim damages in respect thereof~ the      Executive shall use all reasonable endeavours to recover damages for loss      of earnings over the period for which salary has been paid or shall be      paid to the Executive by the Company under this Clause and shall account      to the Company for any such damages recovered (less any costs borne by the      Executive in achieving such recovery) in an amount not exceeding the      actual salary paid or payable by the Company under this Clause in respect      of such period. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.4   | At      such time as the Company may reasonably request and at the expense of the      Company the Executive agrees to undergo a medical and/or psychological      examination by a doctor or doctors of the Company's choice and permit      unconditional disclosure of the results of such medical examination to the      Company pursuant to the Access to Medical Reports Act 1988, including      copies of any documents referred to in any such reports. The Company shall      keep the results of such medical examination confidential save insofar as      it is necessary to disclose the results for the purpose of obtaining or      maintaining any policy of insurance required by the Company or save as      required by law. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     10.   | CONFIDENTIALITY |
|-----------------------------------------|-----------------|

| 10.1   | The      Executive shall not (other than in the proper performance of his duties or      with the prior written consent of the Company or unless ordered by a court      or other authority of competent jurisdiction) at any time either during      the Term or afterwards disclose or communicate to any person or use for      his own benefit or the benefit of any person other than the Company or any      Associated Company or through any failure to exercise all due care and      diligence cause, enable, authorise, assist or permit any unauthorised use      or disclosure of any Confidential Information, or attempt or purport to do      any of the foregoing. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.2   | All      Records embodying or relating to any Intellectual Property or Confidential      Information shall be and remain the exclusive property of the Company or      the relevant Associated Company. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | The      provisions of this Clause 10 shall not apply to any Confidential      Information which:- |
|------------------|----------------------------------------------------------------------------------------------------|

| 10.3.1   | is      in or enters the public domain other than by breach of this Agreement by      the  Executive; or is obtained from any third party who is      lawfully authorised to disclose such  information. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4   | The      Executive shall at all times both during the Term and afterwards use best      endeavours to prevent the unauthorised use, publication or disclosure of      any Confidential Information and shall inform the Company of any actual,      suspected or threatened use, publication or disclosure of any Confidential      Information in contravention of this Agreement as soon as the same becomes      known to the Executive and shall unconditionally render such assistance to      restrain such farther use or disclosure as the Company may      request. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.   | RECORDS |
|-----------------|---------|

| 11.1   | During      the Term the Executive shall not (otherwise than for the exclusive benefit      of the Company or any Associated Company and on the basis that it is the      intention of the parties hereto that the Records and any copies or      reproductions thereof shall be and remain the exclusive property of the      Company or the relevant AssociatedCompany):- |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.1.1   | make,      copy or reproduce in any form any Records in whole or in    part; |
|--------------------|------------------------------------------------------------------------------|

| 11.1.2   | use      or permit any Records to be used by or for the benefit of any other      person; |
|--------------------|-------------------------------------------------------------------------------------------|

| 11.1.3   | or      attempt or purport to do any of the foregoing or cause, enable, permit,      authorize or assist any other person to do any of the      foregoing. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.2   | During      the Term the Executive shall observe and comply with all security measures      introduced by or on behalf of the Company or any Associated Company from      time to time to safeguard and protect the Records from theft or      unauthorised access by any person or from loss or damage caused by      computer bugs or viruses or otherwisehowsoever. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.3   | The      Executive shall at any time during the Term on request by the Company and      in any event immediately upon termination of this Agreement howsoever      caused, at the Company'sdiscretion:- |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 11.3.1   | deliver      up to the Company or any AssociatedCompany; |
|--------------------|----------------------------------------------------------|

| 11.3.2   | and/or      destroy, erase or delete from any data storage medium, including without      limitation, from any computer hard disk or drive and any floppy disk in      the Executive's possession, power, custody or  control |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.   | INTELLECTUAL  PROPERTY |
|-----------------|------------------------|

| 12.1   | The      Executive shall immediately notify the Company in writing of the general      nature of any discovery, invention, idea, development, secret process or      improvement in procedure made or discovered by him during the Term      (irrespective of whether it was so made or discovered during normal      working hours or using the facilities of the Company or any Associated      Company and irrespective of whether or not the Executive considers that by      virtue of Section 39 Patents Act 1977 or any similar provision of      applicable law not capable of exclusion rights thereto fail to vest in the      Company or any Associated Company) and which in any way relates or may be      related to any product, service, work, method or process of the Company or      any Associated Company or to any Confidential Information      ("Invention"). |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.2   | As      between the Company or any Associated Company on the one hand and the      Executive on the other hand the entitlement to any Invention shall be      determined in accordance with the provisions of the Patents Act      1977. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.3   | The      Executive shall promptly provide to the Company or any Associated Company      full written disclosure of any Invention and if and whenever required by      the Company or any Associated Company so to do (whether or not during the      Term) shall at the expense of the Company or any Associated Company but      without additional payment to the Executive (except to the extent provided      in Section 40 Patents Act 1977 or any similar provisions of applicable      law) apply or join with the Company or any Associated Company or any other      persons in applying for letters patent or other equivalent protection      (except only to the extent that by virtue of Section 39 Patents Act 1977      or any similar provision of applicable law not capable of exclusion such      rights fail to vest in the Company or any Associated Company) in the      United Kingdom and in any other part of the world for such Invention and      unconditionally do such things and execute such documents as the Company      or any Associated Company may reasonably  request. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.4   | It      is agreed that (subject only to sub-clause 12.2) the Company or any      Associated Company shall be solely and exclusively entitled to the entire      and unencumbered Intellectual Property in all works, processes, methods,      Inventions and/or products (including without limitation any computer      software) made by the Executive during the Tenn and which are connected      with or relate in any way to the business of the Company or any Associated      Company whether or not so made in the course of the Executive's employment      under this Agreement and the |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.4.1   | Executive:-      undertakes at the expense of the Company or any Associated Company (but      without additional payment to the Executive except to the extent provided      in Section 40 of the Patents Act 1977 or any similar provisions of      applicable law) immediately and unconditionally to execute all documents      and do all things as the Company or any Associated Company shall require      for the purpose of confirming to and assuring in the name of the Company      or any Associated Company such Intellectual  Property; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 12.4.2   | undertakes      immediately to inform the Company or any Associated Company of the      creation or coming into existence of anything to which this Clause      applies; and waives all moral rights in or to anything to which this      Clause applies in favour of the Company or any Associated Company and for      the avoidance of doubt such waiver shall extend to the licensees and      successors in title of the Company or any Associated    Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.5   | The      Executive shall at all times during the Term with the Company and      afterwards inform the Company of any actual, suspected or threatened      infringement of any Intellectual Property as soon as the same becomes      known to the Executive and shall at the cost and expense of the Company      unconditionally render such assistance to restrain such further      infringement as the Company mayrequest. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.6   | All      rights and obligations under this Clause in respect of any Intellectual      Property made or discovered by the Executive during the Term shall      continue in full force and effect after the termination of the Executive's      employment and shall be binding upon his personal      representatives. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.   | PROTECTIVE  COVENANTS |
|-----------------|-----------------------|

| 13.1   | In      relation to the restrictions set out in this  clause: |
|------------------|---------------------------------------------------------------|

| 13.1.1   | "Business" means any      businesses of the Company and any Associated Company at the Termination      Date and with which the Executive was involved to a material degree in the      twelve months immediately preceding the Termination  Date; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1.2   | "Customer" means any      person, who at any time in the period of twelve months immediately      preceding the Termination Date, was a customer, client, agent or      distributor of or who had regular dealings with the Company or any      Associated Company and with whom or which the Executive had material      contact during the Term; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1.3   | "Employee" means any      person who, at the Termination Date, was employed or engaged by the      Company or an Associated Company: |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

----

| 13.1.2.1   | at      a senior or key level and who was a person with whom he had material      contact during the period of twelve months prior to the Termination Date;      or |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1.2.2   | in      a position which reported directly to the Executive either at the      Termination Date or at any time in the twelve months immediately preceding      that date; |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1.4   | "Supplier" means any      person who was a supplier of the Company or any Associated Company at any      time in the period of twelve months immediately preceding the Termination      Date and with which the Executive had material contact during the      Term; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1.5   | "Termination Date" means      the date of termination of the Executive's  employment. |
|--------------------|---------------------------------------------------------------------------------------|

| 13.2   | The      Executive will not, for a period of twelve months after the Termination      Date, canvass, approach or solicit or cause to be canvassed, approached or      solicited for orders (in respect of any services provided or goods sold by      any Business) or seek to entice away from the Company or any Associated      Company any business or trade of a Customer with the intention of      supplying goods or services to that Customer so as to compete or seek to      compete with any Business. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.3   | The      Executive will not, for a period of twelve months after the Termination      Date, supply goods, or services to, or otherwise have business dealings      with, any Customer in the course of any business or entity which is, or      seeks to be, in competition with anyBusiness. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.4   | The      Executive will not for a period of twelve months after the Termination      Date, for himself or on behalf of any business or entity which is in      competition with any Business, employ or offer employment to an Employee,      or in any way try to entice an Employee away from the Company or any      Associated Company. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.5   | The      Executive will not, for a period of twelve months after the Termination      Date, be engaged in or concerned in any capacity in any business or entity      which is or seeks to be in competition with any  Business. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.6   | The      Executive will not, for a period of twelve months after the Termination      Date contact or interfere or have dealings with any    Supplier. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.7   | Nothing      in this Clause shall prevent the Executive from being engaged in or by, or      participating in, any business or entity to the extent that any of his      activities for such business or entity shall relate solely to matters of a      type with which the Executive was not materially concerned in the twelve      months immediately preceding the Termination  Date. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 13.8   | The      restrictions set out in this Clause apply whether the Executive is acting      for his own benefit or on behalf of any person and whether he acts      directly or indirectly. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.9   | The      Executive agrees that in the event of receiving from any person an offer      of employment either during the Term or during the continuance in force of      any of the restrictions set out above he shall forthwith provide to such      person making such offer of employment, a full and accurate copy of this      Clause. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.10   | Any      period spent by the Executive, either on "Garden Leave" in accordance with      sub-clause 14.2 below or serving out notice in accordance with sub-clause      2.1, shall be deducted from the period of restriction referred to in      sub-clauses 13.1 to 13.8 above. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.   | TERMINATION |
|-----------------|-------------|

| 14.1   | The      Company shall be entitled, during the period of any notice given pursuant      to this Clause and without limiting the Company's right to suspend any of      the Executive's duties and powers under clause 3.3, to require the      Executive to cease to attend at the premises of the Company or any      Associated Company or to undertake any work during all or any part of the      period of notice. During such period or periods the Executive shall      nevertheless remain available to perform any such duties and/or to      exercise any such powers, authorities and discretions (if any) if and when      called upon to do so by the Company and remain bound (subject to this      sub-clause) by the remaining provisions of this Agreement which shall      continue to remain in fall force and effect. The Executive shall not be      entitled to any payment in damages or be entitled to make bring or base      any claim or counterclaim whatsoever upon or as a result of the exercise      by the Company of its rights under this sub-clause. The Executive shall      continue to receive his salary and other benefits (if any) should the      Company exercise its rights under this subclause.  The      Executive, in tum, shall remain bound by his obligations of good faith,      fidelity and loyalty to the Company such that the Executive shall not      compete against the Company, solicit customers or clients of the Company      to transfer their business to the Executive or any third party, or      otherwise make any secret profit, or solicit members of staff to leave the      Company's employment, or breach his obligations not to reveal to any third      party Confidential Information. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.2   | The      Company may at its absolute discretion elect to terminate the employment      of the Executive with immediate effect by paying the Executive's Base      Salary only in lieu of notice (excluding any benefits or emolument      referable to the employment of the Executive under this Agreement).      Furthermore, the Company may in its absolute discretion pay the payment in      lieu of notice in equal monthly instalments in arrears on the dates on      which the Executive's salary and benefits as would usuaily have been paid      and if the Company elects to make such payment by instalments, the      Executive's entitlement shall cease immediately on the date on which the      Executive accepts an offer of alternative employment or engagement and the      Executive shall as soon as reasonably practicable notify the Company in      writing of any such acceptance. For the avoidance of doubt, the right of      the Company to make a payment in lieu of notice, whether as a lump sum or      by way of instalments does not give rise to any right of the Executive to      receive such a payment or payments. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 14.3   | The      employment of the Executive may be terminated by the Company with      immediate effect without payment in lieu of notice if the      Executive:- |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.1   | commits      any serious breach or non observance of any of his duties hereunder or      otherwise as an Executive of the Company or any Associated Company;      or |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.2   | commits,      (after warning) any persistent or continued breach or non-observance of      any of his duties hereunder or otherwise as an Executive of the Company or      any Associated Company; or |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.3   | is      guilty of any negligence, gross misconduct or dishonesty in connection      with or affecting the business or affairs of the Company or any Associated      Company for which the Executive is required to perform duties; or      i |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.4   | s      guilty of conduct which in the reasonable opinion of the Board brings or      is likely to bring the Executive, the Company or any Associated Company      into disrepute; or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.5   | is      convicted of an arrestable offence other than a road traffic offence for      which a non-custodial penalty is imposed;or |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| 14.3.6   | becomes      bankrupt or makes any arrangement or composition with his creditors      generally or has an interim order made against him pursuant to section 252      of the Insolvency Act 1986; or |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.7   | causes      any agreement entered into by the Company or any Associated Company      relating to the provision of the Executive's services to be terminated      without notice by any other party to such agreement;  or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.8   | in      the reasonable opinion of the Company becomes incapable by reason of      mental disorder of discharging his duties;or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| 14.3.9   | is      or becomes prohibited by an applicable law or regulation from being a      director of the Company or Associated Company or from performing any of      his duties, is removed from office pursuant to the Company's articles of      association (unless the removal is caused by sickness or injury other than      mental disorder) or (except at the request of the Company) the Executive      resigns as a director; or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3.10   | or      in any other circumstances where the Company may legally terminate the      directorship of the Executive; |
|---------------------|--------------------------------------------------------------------------------------------------------------------|

| 14.3.11   | is      guilty of any breach or non observance of any code of conduct, rule or      regulation referred to in Clause 3.1.6 or fails or ceases to be registered      with or authorised by (where such registration or authorisation is, in the      opinion of the Board, required for the performance of his duties) any      regulatory body in the United Kingdom or  elsewhere. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.4   | The      employment of the Executive shall terminate automatically and without      prior notice upon the Executive attaining the age of 60., unless extended      by the Parties. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.5   | Upon      termination of the Executive's employment for whatever    reason: |
|------------------|-----------------------------------------------------------------------------|

----

| 14.5.1   | the      Executive shall not take away, conceal or destroy but shall immediately      deliver up to the Company all Records and Confidential Information in      accordance with Clause 11.3; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.5.2   | the      Executive shall not at any time thereafter make any untrue or misleading      oral or written statement concerning the business or affairs of the      Company or any Associated Company nor represent himself nor permit himself      to be held out as being in any way connected with or interested in the      business or affairs of the Company or any Associated Company (except as a      former employee for the purpose of communications with prospective      employers or complying with any applicable statutory requirements);      and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.5.3   | the      Executive shall immediately repay all outstanding debts or loans due to      the Company or any Associated Company and the Company is hereby authorised      to deduct from any wages (as defined in Part II of the Employment Rights      Act 1996) of the Executive a sum equal to any such debts or loans together      with any interest thereon as appropriate;and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.5.4   | the      Executive shall upon request by the Company immediately resign from his      office as a director of the Company and from all other offices and      appointments held by the Executive in or on behalf of the Company or any      Associated Company in each case without compensation for loss of      office. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.6   | Any      rights or obligations of the Executive, the Company or any Associated      Company under this Agreement which are expressed to continue or are      capable of continuing after the date of termination of his employment      shall continue in full force and effect notwithstanding the termination of      the Executive's employment. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15.   | CORPORATECHANGE |
|-----------------|-----------------|

| 15.1   | Save      as otherwise provided for in the Bell Microproducts Inc Management      Retention Agreement, if the employment of the Executive is terminated by      reason of the liquidation of the Company for the purpose of reconstruction      or amalgamation or as part of any arrangement for the amalgamation or      reconstruction of the Company not involving liquidation and the Executive      is offered employment with any concern or undertaking resulting from this      reconstruction or amalgamation on terms and conditions which taken as a      whole are not less favourable than the terms of this Agreement (and which      protect the Executive's continuity of employment) and the Executive      unreasonably refuses such an offer then the Executive shall have no claim      against the Company in respect of such  termination. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.   | DISCIPLINARY AND GRIEVANCE      PROCEDURES |
|-----------------|--------------------------------------------|

| 16.1   | There      is no formal disciplinary procedure applicable to the Executive's      employment, although the Company shall adopt any statutory disciplinary      procedure in force. The Executive shall be expected to maintain the      highest standards of integrity andbehaviour. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 16.2   | The      Company shall be entitled, in order to investigate any complaint made      against the Executive, to suspend the Executive on full pay for so long as      may be necessary to carry out a proper investigation and hold a      disciplinary hearing. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.3   | If      the Executive is not satisfied with any disciplinary decision taken in      relation to him, he may apply in writing (within five working days of the      decision being notified to him) to the President of Bell Microproducts Inc      whose decision shall be final. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.4   | If      the Executive has any grievance in relation to his employment he may raise      it in writing with the President of Bell Microproducts Inc whose decision      shall be final. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.5   | For      the avoidance of doubt the disciplinary rules and procedures, grievance      and appeal procedures adopted by the Company or notified to the Executive      will not form part of the Executive's contract, except as may be required      by law. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 17.   | USE OF ELECTRONIC      COMMUNICATIONS |
|-----------------|---------------------------------------|

| 17.1   | The      Executive shall have access to the Company's email, internet and telephone      systems, mobile telephone and other forms of electronic communication for      the better performance of his duties provided that the Executive shall not      send any emails of a defamatory or abusive nature or which constitute      sexual, racial or any other form of harassment and he shall be prohibited      from downloading any sexually explicit, pornographic or other offensive      material and the Executive indemnifies the Company during and after the      Term against all liability arising from the Executive's breach of this      sub-clause. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 17.2   | The      Company reserves the right to monitor all electronic communications sent      and received by the Executive and to monitor the Executive's internet      access, including, as appropriate, the right to open attachments to      business and if appropriate other emails and any files or other material      downloaded from the internet during and outside office hours and whether      for personal or company use. This Clause is without prejudice to the      Executive's obligations under Clause 18 (Data  Protection). |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 18.   | DATAPROTECTION |
|-----------------|----------------|

| 18.1   | For      the purposes of complying with the Data Protection Act 1998 the Executive      agrees to provide the Company or any Associated Company with any personal      data and sensitive personal data relating to him that either may request      and he further consents to the holding and processing (in manual,      electronic or any other form) of such data by the Company and/or any      Associated Company and/or any agent or third party nominated by the      Company and bound by a duty of confidentiality, for the purpose      of: |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 18.1.1   | employee      related administration; |
|--------------------|---------------------------------------|

| 18.1.2   | processing      his file and management of itsbusiness; |
|--------------------|---------------------------------------------------------|

----

| 18.1.3   | compliance      with applicable procedures, laws and  regulations; |
|--------------------|--------------------------------------------------------------------|

| 18.1.4   | providing      data to extemal suppliers for the provision and administration of his      remuneration and any benefitsand/or |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| 18.1.5   | to      evaluate the efficiency of the Company's and any Associated Companies'      business systems. |
|--------------------|-------------------------------------------------------------------------------------------------------|

| 19.   | NOTICES |
|-----------------|---------|

| 19.1   | Notices      to be given to either party under this Agreement shall be given in writing      by hand or by post addressed, in the case of the Company, to its      registered office for the time being marked for the attention of the Chief      Executive or, in the case of the Executive, to his last known      address. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 19.2   | Any      such notice sent by post shall be deemed (in the absence of evidence of      earlier receipt) to have been received 2 days after posting (6 days if      sent by air mail) and in proving the time such notice was sent it shall be      sufficient to show that the envelope containing it was properly addressed,      stamped and posted and any such notice delivered personally shall be      deemed to have been given at the time of such  delivery. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 20.   | FORMER SERVICE  AGREEMENTS |
|-----------------|----------------------------|

| 20.1   | This      Agreement supersedes all previous agreements and arrangements whether      written, oral or implied (if any) relating to the employment of the      Executive (such agreements and arrangements (if any) shall be deemed to      have been terminated by mutual consent as and with effect from the      commencement of the Term) and this Agreement sets out the entire agreement      of the parties in relation to the Executive's  employment. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.   | POWER OFATTORNEY |
|-----------------|------------------|

| 21.1   | The      Executive hereby irrevocably and by way of security grants to the Company      (with power for the Company to grant a separate power to any Associated      Company on behalf of the Executive) power of attorney on behalf of the      Executive to sign all such documents, execute all such deeds and do or      refrain from doing all such things as the Company exercising the power or      such concurrent power may in its entire unfettered discretion consider      appropriate convenient or necessary in any part of the world for the      purposes of fulfilling the Executive's obligations under this Agreement.      The Executive shall grant such separate powers of attorney in such form or      forms as the Company (or the relevant Associated Company) may reasonably      require for such purposes, and the power granted by this Clause shall      empower the attorney to grant such further powers in the name and on      behalf of the Executive. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.2   | Notwithstanding      the foregoing and merely as a matter between the Company (or the relevant      Associated Company) and the Executive, the powers granted by the Executive      under this Clause shall not be used except with the consent of the      Executive or following the failure of the Executive to sign or execute the      relevant document or to do or refrain from doing the relevant act      forthwith upon request made to the Executive in writing, and no -party      dealing with the power of attorney shall be concerned as to whether the      procedure of this Clause shall have been  followed. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 22.   | MISCELLANEOUS |
|-----------------|---------------|

| 22.1   | The      Executive acknowledges that any breach by him of any of the terms of      Clauses 10, 12 and 13 of this Agreement may inflict irreparable damage to      the Confidential Information and/or Intellectual Property referred to in      those Clauses and entitle the Company or an Associated Company to an      injunction as well as to damages, costs and other  relief. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 22.2   | The      failure to exercise or delay in exercising a right or remedy under this      Agreement shall not constitute a waiver or right or remedy or a waiver of      any other rights or remedies and no single or partial exercise of any      right or remedy under this Agreement shall prevent any further exercise of      the right or remedy or the exercise of any other right or      remedy. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 22.3   | In the event of any      Clause or sub-clause or parts thereof contained in this Agreement being      held invalid or unenforceable by any judicial, arbitral, regulatory or      other authority of competent jurisdiction all other Clauses or subclauses      or parts thereof contained in this Agreement shall remain in full force      and effect to the fullest extent permitted by law and (subject as      aforesaid) shall not be affectedthereby. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 23.   | GOVERNING LAW AND      JURISDICTION |
|-----------------|-------------------------------------|

| SIGNED as a DEED by         | )      |   |
|-----------------------------|--------|--------|
| IDEAL      HARDWARE LIMITED | )      |   |
| acting      by:-            | )      |   |
|                        |   |   |
| /s/      James E. Illson    |   |   |
| Director                    |   |   |
|                        |   |   |
| /s/      W. Donald Bell     |   |   |
| Director      Secretary     |   |   |

| SIGNED as a DEED by the      said | )      |                                  |
|-----------------------------------|--------|---------------------------------------|
| GRAEME      WATT                  | )      | /s/      Graeme Watt                  |
| acting      by:-                  |   |                                  |
|                              |   |                                  |
| Witness      signature            |   | /s/      Daniel Howard                |
|                              |   |                                  |
| Witness      Name:                |   | Daniel      Howard                    |
| Witness      Address:             |   | 16      Bedford Street London WC2 9HF |
| Witness      Occupation           |   | Trainee      Solicitor                |

----

SCHEDULE 1

| 1.   | In      addition to the remuneration payable to the Executive pursuant to Clause      6.1, the Executive shall be eligible to receive a bonus under the Bell      Microproducts Inc. Management Incentive Plan ("MIP Bonus") for the      Company's fmancial year, namely the relevant 12 month fmancial period from      January to December (the "BonusYear"). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The      Executive's amount of MIP Bonus (if any) in any Bonus Year will be subject      to the financial performance of Bell Microproducts, Europe and      accomplishment of the Executive's individual objectives as determined by      the Board and notified to the Executive from time to time ("MIP      Targets"). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | If      the Executive achieves 100% of the agreed MIP Targets, the Executive shall      receive a MIP Bonus of £142,500 in that Bonus Year. At the discretion of      the Bell Microproducts, Inc. board of directors, Executive may be paid up      to 200% of his MIP Bonus for performance that is above the MIP      Targets. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | For      each of the first three quarters ofthe year, Executive will be eligible to      be paid a portion of his MIP Bonus to a maximum of to 25% of his annual      MIP Bonus, based on performance against his quarterly MIP Targets, with      the first three quarterly MIP Bonus payments being an advance of the full      year's MIP Bonus.  Each quarter's MIP Bonus shall be paid to the      Executive following the quarterly financial audit and close of the      relevant quarter and approval of the Bell Microproducts Inc board of      directors. The full year's MIP Bonus will be determined at the end of the      Bonus Year, and after the financial audit and close of the relevant Bonus      Year and approval of the Bell Microproducts Inc board of      directors. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | During      the first year of the Executive's employment, the Executive shall receive      a MIP Bonus pro-rated from the Commencement Date to 31 December 2004. In      addition, during the period to 31 December 2004 the Executive will receive      the following minimum guaranteed MIP Bonus  payments: |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| for      the period 1 April 2004 to 30 June 2004       |   | £ | 35,625 |   |
|--------------------------------------------------------|--------|--------|--------|--------|
| for      the period 1 July 2004 to 30 September 2004   |   | £ | 17,813 |   |
| for      the period 1 October 2004 to 31 December 2004 |   | £ | 17,813 |   |

| 6.   | In      the event that the Executive's employment with the Company terminates,      either by the Executive electing to terminate his employment (other than      for constructive dismissal) or by the Company in accordance with      sub-clause 14.3, then the Executive shall forfeit and waive any      entitlement to the right to claim any part of the MIP Bonus Year's MIP      Bonus not paid. In all other situations, subject to the terms of the Bell      Microproducts Inc. Management Incentive Plan, the Executive shall be      entitled to a MIP Bonus in respect of the quarter his employment      terminates pro-rated in the up to the date of termination of the      Executive's employment. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

SCHEDULE 2

| 1.   | all      trade secrets of the Company or Associated  Company; |
|----------------|---------------------------------------------------------------|

| 2.   | any      and all information relating to prices, discounts, mark-ups, marketing,      future business strategy, tenders and any price-sensitive information of      the Company or any AssociatedCompany; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | any      and all customer lists, supplier lists, details of contracts with or      requirements of customers and suppliers, and any details relating to      information on the Company or any Associated Company's      database; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | any      and all details about the Company or any Associated Company's products,      publications, processes, technologies, inventions, analysis or      research; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | any      and all information relating to any computer software (both source code      and object code) and other Intellectual Property of the Company or any      Associated Company; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | any      and all technical data, know-how, information or operations manuals of the      Company or any Associated Company;and/or |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| 7.   | any      and all information in respect of which the Company or any Associated      Company is bound by an express or implied obligation of confidence to any      third party. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|