Document:

Exhibit 10.15
	 
	CASTELLE 
	DISTRIBUTOR AGREEMENT 
	 
	DISTRIBUTOR AGREEMENT  dated as of the 31st day of May between Macnica, Inc. hereafter referred to as “ Distributor”
with its principal office located at Hakusan Hi-tech Park 1-22-2 Hakusan Midori-ku Yokohama Japan
and Castelle, a California corporation having its place of business at 855 Jarvis Drive, Suite 100,
Morgan Hill, California, 95037, hereinafter referred to as “Castelle” . 

	 
	WHEREAS, Distributor desires to purchase from Castelle and Castelle desires to sell to Distributor upon the terms and conditions set forth herein the products listed in the Castelle Price List for Distributors set forth in Appendix A (“Products” and “Price”); 
	 
	NOW THEREFORE, the parties agree as follows: 
	 	 

	1.	APPOINTMENT OF DISTRIBUTOR
	 	 
	 	1.1        Castelle hereby appoints Distributor as an exclusive Distributor of Products. For a period of one (1) year commencing from the date of this Agreement. Castelle hereby appoints Macnica as its exclusive distributor for the sale of the product(s) set forth below in Japan. This exclusivity is contingent upon meeting requirements set forth in Appendix B. 
	 
	 	 	FaxPress Family of FaxServers 
	 

	 	Castelle represents and warrants to Macnica that it has the exclusive right to appoint Macnica as its
exclusive distributor and such appointment and any subsequent sale by Macnica of such Castelle products
will not violate any third party concerning any of the Castelle products or their components. Macnica
acknowledges that Castelle retains ownership and proprietary rights to the Castelle products and
that Castelle retains the right to manufacture, distribute and sell the Castelle products worldwide. 

		 

		1.2 	Castelle reserves the right to negotiate and sell direct on OEM accounts. Castelle reserves the right
to negotiate and sell direct on OEM accounts which Distributor brings to Castelle subject to mutual
compensation discussions with distributor. 

			 
		1.3 	Distributor shall use its best efforts to solicit and to service customers in the Territory so as to
promote the goodwill, name and interest of Castelle and its Products. 

			 

	2.          TERM OF AGREEMENT
	 

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

		 

	3.         DISTRIBUTOR’S RESPONSIBILITIES
	 

	 	The Distributor recognizes that expertise and commitment on its part are necessary for the effective
marketing, promotion and support of the Products. Distributor agrees that it will act as follows:

		 

	 	3.1.	Sales Promotion

	   
	 
	Castelle Distributor Agreement
	1

	

	
Exhibit 10.15

	 	 
	 	Distributor will use its best efforts to develop business and promote the sale and licensing of Products.
Distributor shall maintain a sales organization knowledgeable in the products which actively solicits
the sale of Products. Distributor will support Castelle sales promotion programs when and if such
are made available. Distributor will effectively demonstrate appropriately configured Products from
each product family it purchases for resale. 

		 

	 	3.2	Reports/Rescheduling

		 
	 	Distributor agrees to provide Castelle at Castelle’s request within the first week of each quarter
with a forecast of its projected requirements for each Product, by model, for the next six (6) months.
Such forecast shall not be binding on either Distributor or Castelle. Distributor, agrees, however,
that faulty forecasting by Distributor may affect Castelle’s ability to deliver Product in a
timely manor. 

		 

	4. 	PRICING
	 	 	 
	 	4.1.	Distributor’s Prices 
	 	 
	 	Subject to adjustments described herein, Distributor’s prices for Products shall be as set forth in Appendix A attached hereto. All prices are stated in U.S. dollars, ex-factory: Castelle Inc, Santa Clara, California, U.S.A. 
	 	 
	 	4.2	Price Adjustments
	 	 	 
	 	 	Castelle may change its prices set forth on Appendix A attached hereto at
any time, provided that no such price increase shall be effective until thirty
(60) days after notice by Castelle to Distributor of such change. Price
decreases may be effective immediately on the date of notification by Castelle.
All price adjustments shall apply to Products ordered, but not shipped, after
the effective date of such change. 

	 	 	 
	 	4.3	Product List Price In Distributor’s Territory
	 	 	 
	 	 	Castelle and Distributor
agree that it is in the best interest of both parties that the end user
recommended Retail Prices for the Product’s quoted by the Distributor, or
Distributor’s resellers, in the Territory be competitive to motivate and
promote the purchases by end users of Castelle Products. Distributor shall
exercise its best efforts to quote and promote competitive prices in the
currency of the Territory. 

	 	 	 

	5.	Discontinuance And Cancellation Of Products
	 	 	 
	 	 5.1	If during the term of this Agreement, Castelle discontinues a product,
Castelle agrees to place an order for such discontinued Product (s) during the
notification period for delivery within six (6) months after the end of such
notice period, but Castelle’s acceptance of such orders shall be on an
“as available” basis. Distributor may with ninety (90) days after
receipt of such notice, notify Castelle in writing of Distributor’s
intention to return any or all products in its inventory which have been so
discontinued. Distributor shall receive full credit for all such products so
returned. Any such credit shall be in the amount of the actual net invoice price
paid by Distributor for the discontinued products less any prior credits.

	 	 	 
	 	 5.2	If during this agreement, Castelle discontinues an OEM product, Castelle
agrees to provide distributor with ninety (90) days prior written notice of
product’s discontinuance.

	   
	 
	Castelle Distributor Agreement
	2

	

        

    

	
Exhibit 10.15

	 	 	 
	 	 	Castelle will continue to provide technical support and repair parts for
5 years after the date of discontinuance. 

	 	 	 
	 	5.3	Distributor may, by prior written notice to Castelle, defer and/or cancel
non-OEM product delivery once without penalty, provided such notice is received
by Castelle not less than thirty (30) days prior to the scheduled ship date.
Distributor may assess a fee equal to five percent (5%) of the net invoice price
on all other changes. 

	 	 	 
	 6.	Stock Rotation
	 	 	 
	 	6.1	At the beginning of each calendar quarter during the term of this Agreement Distributor may return one (1) consolidated shipment of Products to Castelle, freight prepaid, for credit against future orders provided Distributor meets the following criteria: (i) The total value of the returned products shall not exceed five percent of the net Product purchases by Distributor during the immediate prior calendar quarter, (ii) All returned products must be in their unopened, original packaging: be in new condition; be on Castelle’s currently available Product Price List; be on the Distributor’s inventory for less than six (6) months; and not have been abused or damaged; (iii) Distributor shall not return any Products for the same identical product model; (iv) At the time of the return, distributor must place an irrevocable Purchase order with Castelle having a net value of not less
than the value of the returned product. (v) Any Products that have been
customized cannot be returned to Castelle. 

	 	 	 
	 	6.2 	Castelle shall, at its sole option, repurchase Distributor’s
inventory which is current, saleable and in Castelle’s original shipping
carton at the same prices which Distributor paid for such products less
aggregate amount of all credits previously issued with respect to such Products.
Castelle shall promptly inspect all products returned by Distributor and shall
advise distributor of any Product which is damaged and not acceptable to
Castelle for repurchase. 

	 	 	 
	7.	PRODUCT ALLOCATION
	 	 
	 	In the event of a shortage of any Product for any reason,
Castelle shall have the right to allocate available Products in such manner as
Castelle chooses. 

	 	 
	8.	SHIPMENT
	 	 
	 	All products delivered pursuant to the terms of this
Agreement shall be suitable packed in Castelle’s standard shipping cartons,
marked for shipment at Distributor ’s address set forth above, and
delivered to Distributor or its carrier F.O.B. Castelle’s manufacturing
plant, at which time title to such Products and risk of loss shall pass to
Distributor. Unless otherwise instructed in writing by Distributor, Castelle
shall select the carrier. All freight, insurance, and other shipping expenses,
as well as any special packing expense, shall be paid by Distributor.
Distributor shall also bear all applicable taxes, duties, and similar charges
that may be assessed against the Products after delivery to the carrier at
Castelle’s plant. 

	 	 
	9.	Payment Terms
	 	 
	 	9.1	Products
	 	 	 
	 	 	Payment by Distributor for all Products hereunder shall be by Telephonic
Transfer (“ TT”) for payment in the United States to Castelle at a bank
approved by Castelle.

	   
	 
	Castelle Distributor Agreement
	3

	

        

    

	
Exhibit 10.15

	 

	 	 	Terms of payment shall be the 20th of each month for orders shipped in
the previous month. 

	 	 	 
	 	9.2	Past Due Accounts
	 	 	 
	 	 	In the event that Distributor’s account is past due, Castelle may,
ipso jure and without notice, charge and Distributor shall pay a finance charge
equal to one and one-half percent (1 1⁄2 %) per month, or the maximum amount
allowed by law, whichever is less upon the unpaid balance. until the date of
payment, provided, however, that no such finance charge shall be assessed on any
invoice disputed in good faith by Distributor and for which Distributor has
notified Castelle by confirmed telefax with in ten (10) days of receipt
of invoice. Distributor shall pay all of Castelle’s costs and expenses
(including reasonable attorney’s fees incurred in enforcing Castelle’s
right under Section 7.) 

	 	 	 
	 	9.3	Taxes and Duties
	 	 	 
	 	 	The prices stated are exclusive of Taxes and Duties. Any Taxes and Duties
related to this Agreement shall be paid by Distributor (other than a tax
measured by Castelle ’s net income) or in lieu thereof. Distributor shall
provide an exemption certificate of acceptable to the local taxing authorities.
All Taxes and Duties shall be billed as a separate item on the invoice.

	 	 	 
	 	9.4	Withholding
	 	 	 
	 	 	In the event that any Government in the Territory shall require the
withholding of any sums, however designated, which may be payable hereunder,
there shall be added to amounts due the amount of such withholding, so that
Castelle shall receive from Distributor the same and equal amount as it would
have received with such withholding. 

	 	 	 
	 	9.5	Currency
	 	 	 
	 	 	All prices and charges under this Agreement are stated and shall be paid
in United States dollars. Distributor agrees to take all necessary actions
required, including registration of this Agreement and appellation for
permission to make payments to Castelle hereunder, with the appropriate
government authorities of Distributor ’s jurisdiction, or such other
institution or official, and to take such other measures as may be necessary to
comply with any government currency controls in effect in Distributor’s
jurisdiction, as soon as reasonably practicable after execution of this
Agreement. 

	 	 	 
	 	9.6	Currency Control
	 	 	 
	 	 	Distributor represents and warrants that no currency control laws
applicable in the Territory will prevent the payment to Castelle of any sums due
under this Agreement.

	 	 	 
	10.	WARRANTY
	 	 	 
	 	 10.1	Standard Limited Warranty
	 	 	 
	 	 	Castelle grants to Distributor Castelle’s standard limited warranty
for the Products, including the limitations set forth in Subsections 10.2 and
10.3 below. The Software and associated hardware will operate substantially in
accordance with specifications (but no warranty of error free or uninterrupted
use is made) for a period of one (1) year from the date of end-user
installation. In addition, hardware components of the Product are warranted to
be free from defect in materials and workmanship for a period of one year from
the date of end-user installation. Any software or associated hardware which
does not meet this warranty may he returned to Castelle for repair, replacement
or refund at 

	   
	 
	Castelle Distributor Agreement
	4

	

        

    

	Exhibit 10.15
	 

	 	Castelle’s option. This warranty is contingent upon proper use of a Product in the application
for which it was in tended and does not cover Products that were modified without Castelle’s
approval or that were subjected to unusual physical or electrical stress. 

		 
	 	In consideration of the time required to ship, test and install the product at the customer site, the
warranty period will be deemed to begin on the earlier of actual installation or ninety (90) days
after product shipment to Distributor. 

		 

	 	10.2	No Other Warranty
			 
			EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, CASTELLE GRANTS NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE PRODUCTS,
THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, OR
OTHERWISE. 

			 
		10.3	Limitation of Liability
			 
			CASTELLE’S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO A REFUND
OF DISTRIBUTOR’S PURCHASE PRICE. IN NO EVENT SHALL CASTELLE BE LIABLE FOR
THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY DISTRIBUTOR OR DISTRIBUTORS
CUSTOMER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR
BREACH OF WARRANTY OR FOR ANY LOSS OF DATA, PROFITS OR USE OF THE PRODUCT. THESE
LIMITATIONS SHALL APPLY DESPITE THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY. 

			 

	11. 	Patent Indemnification
		 

	 	 	Castelle shall defend any claim, suit or proceeding brought against Distributor so far as it is based
on a claim that the use of any products delivered hereunder infringes a U.S. patent or copyright,
provided that Castelle is given prompt written notice of the claim, all necessary information and
assistance and sole authority to defend or settle the claim and Castelle shall pay all damages and
cost awarded against Distributor but shall not be responsible for any cost, expense or compromise
incurred by Distributor without Castelle’s prior written consent. 

		 
	 	 	If any product is in Castelle’s opinion likely to or does become the subject of a claim for patent
infringement, Castelle may at its option and expense procure for Distributor the right to continue
using the product, modify it so that it becomes non-infringing, or grant Distributor a credit for
the purchase price of the product, as depreciated. 

		 

	12.	LIMITATION ON LIABILITY
		 
		In the event of termination by either party in accordance
with any of the provisions of this Agreement, neither party shall be liable to
the other, because of such termination, for compensation, reimbursement of
damages on account of the loss of prospective profits or anticipated sales or an
account of expenditures, inventory, investments, leases or commitment in
connection with the business or goodwill of Castelle or Distributor. Termination
shall not, however, either party of obligations incurred prior to the
termination. 

		 
	13.	LIMITATIONS OF REMEDIES
		 
		The remedies provided herein are Distributor’s sole
and exclusive remedies.

	   
	 
	Castelle Distributor Agreement
	5

	

        

    

	 	Exhibit 10.15
		 
	 	IN NO EVENT WILL THE TOTAL LIABILITY OF CASTELLE HEREUNDER, WHETHER IN
CONTRACT OR TORT (INCLUDING NEGLIGENCE) EXCEED THE TOTAL AMOUNTPAID BY
DISTRIBUTOR FOR THE PARTICULAR PRODUCTS OR SERVICES WHICH ARE THE SUBJECT OF A
SPECIFIC CLAIM. IN NO EVENT WILL CASTELLE BE LIABLE TO DISTRIBUTOR OR ANY THIRD
PARTY INCLUDING, BUT NOT LIMITED TO ANY SUBSEQUENT PURCHASER OR USER OR ANY
SALES REPRESENTATIVE OF ANY DAMAGES INCLUDING ANY LOST PROFITS, LOST SAVINGS OR
OTHER INCIDENTAL, SPECIAL, INDIRECT, COVER OR CONSEQUENTIAL DAMAGES ARISING OUT
OF THE USE OF OR INABILITY TO USE THE PRODUCT EVEN IF CASTELLE OR AN AUTHORIZED
CASTELLE DISTRIBUTOR HAS BEEN APPRISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE
LIMITATION SHALL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY. 

		 

	14. 	SALES SUPPORT MATERIALS
		 
		Castelle will provide Distributor with an initial package
of sales literature. Additional sales promotional literature and marketing
materials will be available at a fee. Distributor will also pay shipping charges
of these materials. 

		 
	15	TERMINATION
	 	 
	 	This Agreement may be terminated ; 
	 	 

		(a) 	by either party in the event that either party ceases to function as a going concern or to conduct
its operations in the normal course of business, or a receiver for it is appointed or applied for,
or a petition under the Federal Bankruptcy Act is filed by or against it, or it makes an assignment
for the benefit or creditors. 

			 
		(b)	by Castelle, if Distributor assigns this Agreement or any of its rights hereunder, the word
“assign” to include, without limiting the generality thereof, a transfer of a majority interest
in Distributor or a sale of substantially all of the assets of the Distributor. 

			 
		(c) 	by either party, upon ninety (90) days written notice if the other party
shall fail in any material respect to perform or observe any of its obligations
hereunder (including the obligations in Section 11 regarding distribution of the
warranty policy of Castelle and the obligations in Section 4 and Appendix B
regarding minimum purchase requirements in the Territory) or fail to pay any
amounts due and such party has failed to cure such default after receipt of
written notice of such default. 

			 
			Upon termination of the Agreement for other than Distributor’s
breach, Castelle shall continue to fill, subject to the terms of Sections 3, 4
and 5 above, all orders accepted by Castelle prior to the date of termination.

			 
			Upon termination of this Agreement, Distributor agrees to remove all
references describing Distributor as a Distributor of Castelle products on
brochures, advertisements and other printed materials, and to cease representing
itself as the same. 

	   
	 
	Castelle Distributor Agreement
	6

	

        

    

	 	 Exhibit 10.15
		 

	16. 	PROPERTY RIGHTS AND CONFIDENTIALITY
		 

	 	16.1	Property Rights
	 	 	 
	 	 	Distributor agrees that Castelle owns all right, title, and interest in
the product lines that include the Products and in all of Castelle’s
patents, trademarks, trade names, inventions, copyrights, know-how and trade
secrets relating to the design, manufacture, operation or service of the
products. 

	 	 	 
	 	16.2 	Trade Mark
	 	 	 
	 	 	Subject to terms and conditions of this agreement, the Distributor shall
use and is hereby authorized to use the same product names and other trademarks
of which Castelle remains ownership as the company uses to market and identify
the product. 

	 	 	 
	 	16.3	Sale Conveys no Right to Manufacture or Copy  

	 	 	 
	 	 	The
Products are offered for sale and are sold by Castelle subject in every case to
the condition that such sale does not convey any license, expressly or by
implication, to manufacture, duplicate or otherwise copy or reproduce any of the
Products, except as permitted in Subsection 12.1 above. Distributor shall take
appropriate steps with its customers, as Castelle may request, to inform them of
and assure compliance with the restrictions contained in this Subsection 17 (b).

	 	 	 
	 	16.4 	Confidentiality
	 	 	 
	 	 	The
Distributor and its employees shall not directly or indirectly, divulge or
reveal to any person any information deemed confidential by Castelle without
Castelle’s prior written consent. For purposes of this Agreement, the term
“confidential information” shall mean information deemed proprietary
to Castelle or not generally known in Castelle’s industry and disclosed by
Castelle to the Distributor, or known to the Distributor as a consequence of
this Agreement or actions taken pursuant hereto. 

	 	 
	17. 	GENERAL
		 

		17.1	This Agreement shall be governed by the laws of the State of California as applied to contracts entered
into and performance within that state by residents thereof. Distributor may not assign any of its
rights under the Agreement without the express written consent of Castelle. All rights and remedies
conferred under the Agreement shall be cumulative and may be exercised singularly or concurrently.
This Agreement constitutes the entire agreement between the parties with respect to the subject mater
hereof and shall supersede all previous writings and communications between the parties. No changes
to these terms be binding unless expressly confirmed in writing by an authorized representative of
Castelle. Failure by either party to enforce any Agreement term shall not be deemed a waiver of future
enforcement of that or any other term. 

			 
		17.2	Distributor agrees to comply with all applicable laws and regulations. Distributor understands that
Castelle is subject to regulation by agencies of the U.S. Government,including the U.S. Department
of Commerce and U.S. Department of Defense, which

	   
	 
	Castelle Distributor Agreement
	7

	

        

    

			prohibit export or diversion of Castelle’s Products to certain
countries. Distributor warrants that it shall not sell any Products in countries
or to users not approved to receive classified or sensitive technical equipment
or data under applicable U.S. laws and regulations, and that it will abide by
such laws and regulations. Distributor shall hold harmless and indemnify
Castelle for any damages resulting to Castelle from a breach of this Section
18.2 by Distributor. 

			 
			 
	18.	SURVIVAL
			 
		Sections 11 (Warranty), 12 (Patent Indemnification), 17
(Property Rights and Confidentiality) and Distributor’s obligations to pay
for Products received will survive termination of this agreement. 

			 
	IN WITNESS TIIEREOF, the parties have executed this
Agreement by their duly authorized representatives.

		
		

	 	 
	CASTELLE	DISTRIBUTOR
	 	 
	By	By
	 	 
	       /s/ Donald L. Rich	         /s/ Haruki Kamiyama
	 	 
	Name (please print)	Name (please print)
	 	 
	       Donald L.Rich	Haruki Kamiyama
	 	 
	Title	Title
	 	 
	       President, Chief Executive Officer	President
	 	 
	Date	Date
	 	 
	          May 31, 2001	          May 22, 2001

	   
	 
	Castelle Distributor Agreement
	8Exhibit 10.16
	 
	AMENDED AND RESTATED INTERNATIONAL DISTRIBUTOR AGREEMENT

	 
	This Amended and Restated International Distribution Agreement (“Agreement”) is made and
  entered this 8th day of July, 2002 (“Effective Date”) by and between Castelle, Inc., a California corporation
  having its principal place of business located at 855 Jarvis Drive, Suite 100,, Morgan Hill, California
  95037, U.S.A. (hereinafter referred to as “Castelle”), and AMS, Ltd., having its principal
  place of business located at Bournemouth, England (hereinafter referred to as “Distributor”).
  Castelle and Distributor are collectively referred to below as the “parties” and individually
  as a “party”. 

	 
	WHEREAS, the parties have previously executed an International Distribution Agreement effective as
  of 24 April 2001 (the “Prior Agreement”); and 

	 
	WHEREAS the parties now wish to modify and expand their relationship, and they have thus set forth
  the terms of their expanded relationship within this Agreement below, with the intent and desire
  that this Agreement shall replace and supercede the Prior Agreement; 

	 
	NOW THEREFORE, the parties agree as follows: 
	 
	1. APPOINTMENT OF DISTRIBUTOR AND TERRITORY 
	 

		1.1	Purpose. The purpose of this Agreement is to appoint a Distributor to promote the sale of Castelle’s
    Products set forth in Exhibit A in the Territory.

	 	 	 
		1.2	 Appointment. Subject to the terms and conditions set forth herein, Castelle hereby appoints Distributor as Castelle’s non-exclusive, authorized distributor for the Products to Customers in the Territory during the term of this Agreement, and Distributor hereby accepts such appointment. “Customers” means both Resellers and End Users in the Territory. “Resellers” means independent companies or persons who have the competence, training and resources to distribute the Products, and who Distributor contracts with for the distribution of the Products to other Resellers or End Users. “End Users” means the ultimate customer that acquires the Products for ordinary business or personal use and not for further distribution or resale. 

	 	 	 
		1.3	Territory.  The Distributor’s Territory shall be as set forth within Exhibit B.
	 	 	 
		1.4	Territorial Responsibility. Distributor will pursue sales policies and procedures appropriate and sufficient to realize maximum sales potential for the Products in the Territory. Distributor will maintain sufficient inventory of the Products to provide competitive delivery schedules to Customers.

	 
	2. TERM OF AGREEMENT
	 

		2.1    	Initial Term. This Agreement shall
become effective on the Effective Date set forth above and shall continue for an initial term of one (1) year (“Initial
Term”) subject to the terms and conditions set forth herein.

			 
		2.2	Effective Date. The Effective Date of this Agreement shall be the date it is signed as accepted by a duly authorized officer of Castelle.

		 	 
		2.3	Renewal of Agreement. This Agreement shall thereafter be renewed for successive periods of one year  (each a “Renewal Term”), unless terminated by either party pursuant to the provisions of Section 15(“Termination”) below, or by notice, in writing, addressed to the other party, no less than 3 months prior to the expiration of the term, and no more than six (6) months prior to the expiration of the Initial term or Renewal Term as the case may be. 

	

Page 1 

	 	Exhibit 10.16
		 

	3. PRICING 
	 

		3.1  	Distributor’s Prices. Subject to adjustments described herein, Distributor’s prices for Products shall be based upon a percentage of the U.S. Suggested List Price attached hereto as Exhibit A. Castelle prices
  to Distributor shall not be greater than Castelle’s prices to any other U.K. Distributor for
  the term of this Agreement. All prices are stated in U.S. dollars, F.O.B. Castelle, Morgan Hill,
  California, U.S.A. 

	 		 

		3.2  	Minimum Purchase Commitment. The Minimum Purchase Commitment, set forth in Exhibit C, shall be the total purchase price, net of taxes, duties, transportation and other charges, which Distributor
  has committed to purchase in each Time Period and under the parameters as set forth and defined in
  Exhibit C of this Agreement. Castelle reserves the right, upon thirty (30) days prior written notice,
  based upon its review and valuation of the market, the Territory and the results achieved, to review
  and adjust the Minimum Purchase Commitment for the Time Period following the current fiscal quarter.
  In the event Distributor fails to meet the Minimum Purchase Commitment for any Time Period and/or
  the total annual commitment, Castelle may, at its sole option and without notice, either (i) upon
  thirty (30) days prior written notice, increase the base price to Distributor or (ii) terminate this
  Agreement. 

			 

		3.3  	Price Adjustments. Castelle may change its prices set forth on Exhibit A attached hereto at any time, provided that no such price increase shall be effective until thirty (30) days after notice by Castelle to Distributor of such change. Price decreases may be effective immediately on the date of notification by Castelle. Price increases will not be applied to Product that does not ship within the thirty (30) day notice period as a result of any delays caused by Castelle. In addition, Castelle reserves the right to adjust Distributor’s prices in the event that Distributor fails to meet the Minimum Purchase Commitments set forth in Exhibit C. All price adjustments shall apply to Products ordered, but not shipped, after the effective date of such change. 

			 
		3.4  	Price Protection. In the event Castelle should lower its Product prices to Distributor, Castelle will grant Distributor a price protection credit to be applied against future orders equal to Distributor’s net unit price difference between the higher and lower price on all new, unsold eligible Products in Distributor’s inventory that Castelle has shipped to Distributor within ninety (90) days before the effective date of the price reduction. 

			 

		3.5           	Product List Price in Distributor’s Territory. Castelle and Distributor agree that it is in both parties best interests that the End User prices for the Products quoted by the Distributor, or offered to or by Distributor’s Resellers, in the Territory be competitive to motivate and promote purchases by end users of Castelle Products. Castelle has provided Distributor with Castelle’s U.S. Suggested List Price for Castelle Products in Exhibit A. Distributor shall exercise its best efforts to quote and promote Castelle’s Suggested List Price in the currency of the Territory for sales to End Users. Distributor shall develop and set the prices to be offered for the Products to its Resellers in the Territory, and shall obtain Castelle’s review of such prices prior to implementation and roll-out. 

			 

	
	4. ORDERS 
			 

		4.1           	Purchase Orders. Distributor shall purchase all Products hereunder by issuing written Purchase Orders to Castelle not less than thirty (30) days prior to Distributor’s requested ship date identifying the Products to be purchased, the quantity, price, total Purchase Order price, shipping instructions, requested ship dates and any other special information. Distributor may place additional interim Purchase Orders at any time and with no notice requirement as the market demand may from time to time require. Castelle will use its commercially reasonable best efforts to comply with Distributor’s Product shipment requirements for any orders submitted with short notice delivery requirements. 

			 

		4.2           	Acceptance of Purchase Orders. Castelle, at its place of business in the U.S.A., or at any other place Castelle may select, may, at Castelle’s option, accept or reject Distributor’s Purchase Order within ten (10) days of Castelle’s receipt thereof. Castelle intends to accept all Purchase Orders that are issued in 

	

Page 2

	 	Exhibit 10.16
	       

	 	conformance with the provisions of this Agreement. Acceptance of Purchase Orders shall be confirmed
  to Distributor by first class mail, telex or confirmed telefax. 

	  	  

		4.3    	Terms of Purchase Orders. Distributor’s Purchase Orders submitted to Castelle from time to time with respect to Products to be purchased hereunder shall be governed by the terms and conditions of this
  Agreement, and notwithstanding the content of Distributor’s Purchase Order, this Agreement shall
  take precedence over such Purchase Orders, and any conflicting, inconsistent, or additional terms
  of Distributor’s Purchase Order shall be null and void, and are hereby waived by Distributor. 

	  	  	  
		4.4    	Order Deferral, Cancellation and Modification. Distributor may, by prior written notice to Castelle, defer and/or cancel delivery of a Purchase
  Order once without penalty, provided such notice is received by Castelle not less than ten (10) business
  days prior to the scheduled ship date for order cancellation and five (5) business days prior to
  the scheduled ship date for order deferrals. Distributor may not cancel or defer orders placed for
  immediate shipment. 

			 
	5. DISTRIBUTOR REPORTS, FORECASTS AND MINIMUM INVENTORY 
			 
		5.1	Reports and Forecasts. Distributor shall submit to Castelle a three (3) month rolling forecast five (5) days before the end of each calendar month. In addition, Distributor shall within five (5) days after the end of each calendar month submit a written and electronic report to Castelle setting forth the previous month’s sales unit volume (“POS” data) and current inventory by Product model. POS data to be reported to Castelle on a monthly basis should include, at a minimum, “Product Number”, “Product Description”, “Serial Number”, “Quantity”, “Order Date”, “Name of Company Sold To”, “Country of Name of Company”, “Reseller/End User”. Service, software upgrades and support contracts should also be included in the POS report to include the above information as appropriate.
Inventory data to be reported to Castelle on a monthly basis should include, at a minimum, “Product Number”, “Product Description”, “Serial Number”, “Quantity”, “Date Received”, “Evaluation or Not”. Failure to provide monthly sales unit volume and current inventory by Product model reports may forfeit the Distributor’s right to claim price protection credit (reference section 3.4). 

	 	 	  
		5.2	Inventory. Distributor shall, at all times, maintain minimum inventory levels of each Castelle Product sold by Distributor, sufficient to satisfy Distributor’s and Customers’ order demands, and shall use its best efforts to always have Castelle inventory on hand. Distributor shall maintain sufficient minimum inventory levels of each Castelle Product to satisfy the demands of the Territory. 

			 
	6. PACKAGING, SHIPMENT, RISK OF LOSS AND ACCEPTANCE OF ORDERS 
			 
		6.1  	Packaging. All Products delivered pursuant to the terms of this Agreement shall be suitably packaged for shipment in Castelle’s standard shipping cartons, marked for shipment to Distributor’s address, and delivered to Distributor or its carrier agent. In the absence of shipping instructions from Distributor, Castelle shall ship via air freight and shall select the carrier. 

	 	 	  
		6.2	Ship Dates. Shipping dates committed by Castelle require prompt receipt of all necessary documents from Distributor. Where existing priorities and schedules prevent strict compliance with requested ship dates, Purchase Orders will be scheduled as close as is practical to the requested ship date. 

	 	 	  
		6.3	Shipment Terms. Shipments from Castelle shall be made Ex Works, Castelle’s manufacturing plant, freight, duties and taxes collect, to distributor’s address set forth on Distributor’s Purchase Orders. In no event shall Castelle have any liability in connection with shipment, nor shall the carrier be deemed to be an agent of Castelle. Castelle shall not be liable for damages or penalty for delay in delivery or for failure to give notice of any delay. 

	 	 	  
		6.4	Title and Risk of Loss. Risk of loss with respect to Products and Software shall pass from Castelle to Distributor upon delivery. Delivery shall be deemed made upon transfer of possession to the initial 

	

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	 	Exhibit 10.16
		 

	 	common carrier or Distributor’s representative at Castelle’s manufacturing plant. Transfer
  of ownership and title to the Products and Software shall pass from Castelle to Distributor only
  after payment in full by Distributor for the Products and Software ordered by Distributor and shipped
  by Castelle. 

		 

		6.5  	Acceptance. Distributor shall inspect all Products promptly upon receipt thereof at the ship-to location and
  may reject any Product that is defective. Any Product not properly rejected by Distributor shall
  be deemed accepted. To reject a Product, Distributor shall notify Castelle of its rejection, by telefax,
  within ten (10) days of receipt of the shipment, and request a Return Material Authorization (“RMA”)
  number. Distributor shall return the rejected Product(s), freight collect, in its original shipping
  carton with the RMA number displayed on the outside of the carton. Castelle may refuse to accept
  any Product that does not bear a valid RMA number on the carton. Rejected Product(s) must be shipped
  to arrive at Castelle no later than 60 days after the issuance of the RMA number; the RMA number
  will no longer be valid after that time. 

			 
	
	7. PAYMENT 
			 
		7.1    	Products. Payment by Distributor for all Products hereunder shall be by Telephone Transfer (“TT”) for payment in the United States to Castelle at a bank approved by Castelle. 

	 	 	  
		7.2    	Distributor Credit and Payment Terms. Distributor shall complete Castelle’s Credit Application and apply for credit. Payment terms shall be net thirty (30) days. In the event that Distributor’s account is past due, Castelle may and without notice, charge and distributor shall pay a finance charge equal to one and one-half percent (11⁄2%) per month, or the maximum amount allowed by law, whichever is less, upon the unpaid balance, until the date of payment, provided, however, that no such finance charge shall be assessed on any invoice disputed in good faith by Distributor and for which Distributor has notified Castelle by confirmed telefax within ten (10) days of receipt of invoice with a detailed explanation of the reason for the dispute. Distributor shall pay all of Castelle’s costs and expenses (including reasonable attorney’s fees)
incurred in enforcing Castelle’s right under this Section 7. 

			 

		7.3  	Taxes and Duties. The prices stated are exclusive of Taxes and Duties. Any Taxes and Duties related to this Agreement shall be paid by distributor (other than a tax measured by Castelle’s net income) or in lieu thereof, Distributor shall provide an exemption certificate acceptable to the local taxing authorities. All Taxes and Duties shall be billed as a separate item on the invoice. 

			 

		7.4  	Withholding. In the event that any Government in the Territory shall require the withholding of any sums, however designated, which may be payable hereunder, there shall be added to amounts due the amount of such withholding, so that Castelle shall receive from Distributor the same and equal amount as it would have received without such withholding. No such withholding as described above shall become due as a result of actions taken by Castelle except as may be otherwise defined herein. 

			 

		7.5  	Currency. All prices and charges under this Agreement are stated and shall be paid in United States dollars. Distributor agrees to take all necessary actions required, including registration of this Agreement and application for permission to make payments to Castelle hereunder, with the appropriate government authorities of Distributor’s jurisdiction, or such other institution or official, and to take such other measures as may be necessary to comply with any government currency controls in effect in Distributor’s jurisdiction, as soon as reasonably practicable after execution of this Agreement. 

		 	 

	8. LIMITED WARRANTY 
		 	 

		8.1	Castelle Warranty. The Distributor shall provide and abide by Castelle’s warranty. Castelle warrants that it has the right and interest in the Products to make the sales and licenses contemplated herein. Castelle warrants the Products against defects in materials and/or workmanship for one (1) year from purchase by the end-user customer or fifteen (15) months from Castelle’s initial shipment to Distributor, whichever is less. This warranty is contingent upon proper use of a Product in the application for which 

	

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	 	Exhibit 10.16
		 

	 	it is intended and is voided if Products are modified without Castelle’s approval or are subjected
  to unusual physical or electrical stress. 

		 

	 	When a defective Product is returned, freight prepaid, validly to Castelle’s factory in Morgan
  Hill, California, U.S.A., during the warranty period, Castelle, at its sole option, shall repair
  or replace the defective Product at no charge. Castelle will furnish repair parts and replacement
  Products on an exchange basis. Such parts and replacement Products may be either reconditioned or
  new. After repair or replacement Castelle will return the Products, freight paid, promptly at its
  expense by a carrier or method of delivery of its choosing. 

		 

		CASTELLE DOES NOT WARRANT THAT THE PRODUCTS OR SPARE PARTS SHALL OPERATE UNINTERRUPTED OR WITHOUT ERROR. THE WARRANTY SHALL BE VOID ON PRODUCTS WHICH HAVE BEEN SUBJECTED TO ABUSE, MISUSE, ACCIDENT, ALTERATION, NEGLECT, UNAUTHORIZED REPAIR OR INSTALLATION. Castelle shall make the final determination as to the existence and cause of any alleged defect. Expendable items (such as lamps and fuses) are not warranted. 

		 

		8.2 	No Other Warranty. EXCEPT FOR THE LIMITED WARRANTY REFERENCED ABOVE, CASTELLE GRANTS NO OTHER WARRANTIES, EXPRESS OR
  IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE PRODUCTS, AND SPECIFICALLY DISCLAIMS ANY IMPLIED
  WARRANTY OF FITNESS FOR ANY PURPOSE, QUALITY, MERCHANTABILITY, OR OTHERWISE. 

	 	 	  
	9. CHANGES, IMPROVEMENTS AND DISCONTINUANCE 
	 	 	  
		9.1 	Changes and Improvements. During the term of this Agreement, Castelle agrees to inform Distributor on a timely basis of changes and improvements in the Products’ performance, serviceability, uses and applications. Castelle reserves the right to make any changes to the Products which it deems appropriate. 

	 	 	  
		9.2 	Discontinued Product. If during the term of this Agreement, Castelle discontinues a Product(s), Castelle agrees to provide Distributor with sixty (60) days prior written notice of Product’s discontinuance. Distributor may place an order for such discontinued Product(s) during the notification period for delivery within six (6) months after the end of such notice period, but Castelle’s acceptance of such orders shall be on an “as available” basis. 

	 	 	  
	10. STOCK ROTATION 
	 	 	  
		10.1	At the beginning of each calendar quarter during the term of this Agreement, Distributor may return one (1) consolidated shipment of Products to Castelle, freight prepaid, for credit against future orders provided Distributor meets the following criteria: (i) the value of the returned Product(s) shall be no greater than the purchase value of the returned Product(s) based on Castelle’s then current Distributor Price List; (ii) all returned Products must be in their unopened, original packaging, be in new condition, be on Castelle’s currently available Product Price List and not have been abused or damaged; (iii) Distributor shall not return any Products for the same identical Product model; (iv) at the time of the return, Distributor must place an irrevocable Purchase Order with Castelle having a net value of not less than the value of the returned Product;
(v) the total value of the returned Product shall not exceed 20% of the value of the previous quarter’s net shipments to the Distributor. Distributor shall request a Return Material Authorization (“RMA”) number for the return of the Product(s). Distributor shall return the Product(s), in its original shipping carton with the RMA number displayed on the outside of the carton. Castelle may refuse to accept any Product that does not bear a valid RMA number on the carton. Product(s) must be shipped to arrive at Castelle no later than 60 days after the issuance of the RMA number; the RMA number will no longer be valid after that time. 

	

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	 	Exhibit 10.16
		 

	11. INTERNET WEB SITE AND PRODUCT DOCUMENTATION 
	 

		11.1	Castelle Web Site. Castelle agrees to provide Distributor with a current copy and future updates of relevant portions
  of its Castelle U.S. web site to be replicated by Distributor in a format appropriate for the U.K.
  market. 

			 

		11.2	Distributor Web Site. Distributor shall review and get approval from Castelle prior to making modifications to the Castelle
  U.S. web site for implementation in the U.K. market. Distributor web site may be listed as castelle.uk.co
  and have links to appropriate Castelle U.S. web pages such the technical support data base, product
  evaluation downloads, email newsletters, lead generation email blast tools, etc. Castelle also agrees
  that Distributor shall have access to the URL www.castelle.com/eu. 

			 

		11.3	Distributor Web Site Statistics and Information. Distributor shall make available to Castelle information from its castelle.uk.co web site including page hits, leads generated and other information that may be deemed relevant. 

			 

		11.4	Product Documentation. Castelle agrees to provide Distributor with a reasonable initial quantity of Castelle’s advertising and promotional materials and technical data related to the Products (“Product Documentation”) at no charge. Distributor may purchase from Castelle any Product Documentation related to Castelle’s Products which it requires to promote such Products. 

			 

		11.5	Localization and Distribution of Product Materials. Distributor shall use its best efforts to localize the Product Documentation for effective use within the various countries of the Territory.

			 

	12. TRAINING, SUPPORT AND SERVICES 
			 
		12.1	Services by Distributor. Distributor shall train
its Customers with respect to the Products sold. The services to be performed under this Agreement (“Services”)
shall be performed only by specially and properly trained personnel of Distributor. Distributor will maintain sufficient
inventory of the Products to provide competitive delivery schedules and satisfactory replacement services for DOA (“Dead-On-Arrival”) products to its Customers. DOA products are those that are on the current price list, and have failed within 30 days of shipment from the Distributor to the Distributor’s customer. 

			 

		12.2	Services by Castelle. Castelle shall provide technical training for a reasonable number of Distributor’s  personnel at no charge. Such personnel shall have the appropriate technical knowledge and English language skills to benefit from such training. In addition, Castelle shall provide periodic sales, service and installation training classes to Distributor at no charge. Sales and service training shall be held at such places and times as Distributor and Castelle shall mutually agree. 

			 

		12.3	Spare Parts. Castelle agrees to provide spare parts for Products sold hereunder for a period of not less han one (1) year from the last date of shipment of such Product to Distributor. Spare parts shall be made available to Distributor at Castelle’s then current price in effect at the time Distributor orders such spare parts. 

			 

		12.4	Support by Castelle. Castelle agrees to provide during the principal period from 06:00 to 17:00 Pacific Standard Time, Monday through Friday, excluding Castelle holidays, secondary technical support assistance to Distributor by telephone, telefax and Internet for problem identification and resolution. 

			 

		12.5	Support in Territory. Distributor shall be responsible for supporting all Products which it distributes to its Customers. Distributor shall maintain support personnel sufficiently knowledgeable with respect to the Products to answer customer inquiries regarding the use and operation of the Products. Distributor shall ensure that all customer questions are initially addressed to and answered by Distributor.

	

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	 	Exhibit 10.16
		 

		12.6	Support Transition and Fees. Distributor shall assume support responsibility for the current Castelle support contract customers
  in the Territory and provide support through the customer’s contract period without additional
  charge. Prior to the expiration of the support contract date Distributor shall renew the support
  agreement and bill, collect and receive all renewal fees. 

			 

		12.7	Support Policy. Distributor shall follow U.S. support policy guidelines and provide similar support to its Customers,
  including its End User, VAR and Alliance Partner Customers. 

			 

		12.8	Reseller Management. Upon the Effective Date of this Agreement, Distributor shall take over the management, Support and
  Services of resellers who are currently purchasing Products directly from Castelle within the Territory,
  whether those resellers are under contract to Castelle or not (“Castelle Resellers”). Instead
  of and in the place of Castelle, Distributor will provide all necessary Services, support, management,
  sales guidance and assistance for Castelle Resellers. Distributor will also be responsible for such
  services and support to current Resellers of Distributor, and Resellers appointed by Distributor
  in the future. Distributor and Castelle will coordinate their efforts to optimize Distributor’s
  ability to accomplish a smooth and orderly transition for Castelle Resellers. Distributor shall report
  to Castelle and otherwise keep Castelle informed with information regarding all Resellers it manages,
  and its progress in effecting the transition of Castelle Resellers. 

			 

	13. TRADEMARKS AND TRADENAMES 
			 

		13.1	License. During the term of this Agreement, Distributor shall have the right to indicate that it is an Authorized Castelle Distributor. Distributor shall also have the right to use Castelle’s Trademarks for the purpose of (i) localizing Product Documentation within the various countries of the Territory, and (ii) advertising and distributing Product Documentation in the sale or marketing of Products in the Territory consistent with Distributor’s requirements hereunder, provided, however, that any Product Documentation created by or for Distributor or its Resellers shall be reviewed and approved by Castelle prior to adoption and use. Nothing herein shall grant to Distributor any right, title or interest in the Trademarks, except as specifically set forth herein. 

			 

		13.2	No Registration. At no time during or after the term of this Agreement shall Distributor attempt or assist others to register any trademarks, slogans, designs or trade names confusingly similar to those of Castelle, or challenge or assist others to challenge Castelle’s Trademarks or registrations thereof. 

			 

		13.3	No Removal. Distributor shall not remove, alter, deface or otherwise obscure any Castelle trademark or trade name appearing on any Product or documentation without the express written permission of Castelle.

			 

		13.4	Approval of Representations. All representations of Castelle Trademarks which Distributor intends to use shall be first submitted to Castelle for approval (which shall not be unreasonably withheld) of design, color and other details or shall be exact copies of those used by Castelle. Distributor shall use all Castelle Trademarks only in accordance with the sales of Castelle Products and consistent with Castelle’s standards for the use of Castelle Trademarks by the Distributor. 

			 

	14. PROMOTION 
			 

		14.1	Distributor Promotion. Distributor agrees to undertake during the term of the Agreement such promotion and advertising campaigns and marketing strategies, including advertising in local trade media, direct mail campaigns, Internet marketing and trade show participation, as are necessary to stimulate and promote the sale of the Products in the Territory. Distributor will make available to Castelle copies of all sales literature, brochures and advertising media relating to the Products. 

			 

		14.2	Distributor Focus. Distributor has been a successful VAR in the territory and understands it needs to focus on expanding the business through strong promotion and support to other resellers, some of whom 

	

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	 	Exhibit 10.16
		 

	 	may be viewed at times as competitors. A cooperative balance needs to be established between “Castelle
  U.K.”, AMS and other Resellers. 

		 

		14.3	Cooperative Promotion Allowance. Subject to Distributor stocking Products at satisfactory levels, fulfilling Minimum Purchase Commitments
  under Section 3.2 hereinabove on a run-rate basis, and otherwise complying with the terms and conditions
  of this Agreement, Castelle agrees to allocate 2% of the previous quarters net sales as a product
  promotion allowance. Distributor shall submit proposed promotion materials and projects to Castelle
  for review prior to any initial release. Upon receipt of reasonable evidence of such promotion expenditures,
  Castelle will credit the amount against Distributor purchases. 

			 

		14.4	Other Market Development Funds. Castelle may, from time to time at its own discretion, provide additional funding, on a split-the-cost basis, for other market development projects. Approval and credit procedures would be the same as for the Cooperative Promotion Allowance. 

			 

	15. TERMINATION 
			 

		15.1	Termination for Insolvency. To the extent permitted by law, Castelle may terminate this Agreement  effective immediately and without liability upon written notice to Distributor if any one of the following events occurs: (i) Distributor files a voluntary petition in bankruptcy or otherwise seeks protection under any law for the protection of debtors; (ii) a proceeding is instituted against Distributor under any provision of any bankruptcy, insolvency or debtor’s relief law which is not dismissed within sixty (60) days; (iii) a court assumes jurisdiction of the assets of Distributor; (iv) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of Distributor; (v) Distributor becomes insolvent is unable to or ceases to pay its debts in the normal course, or suspends business, or (vi) Distributor makes an assignment
of its assets for the benefit of its creditors. 

			 

		15.2	Termination for Cause. If either party fails to perform any material obligation under this Agreement, including, in the case of Distributor, the failure to meet the Minimum Purchase Commitments set forth in Exhibit C, then upon thirty (30) days written notice to the breaching party specifying such default, the non-breaching party may terminate this Agreement, without liability, unless: (i) the breach specified in the notice has been cured within the thirty (30) day period; or (ii) the default is not of an urgent nature in the sole discretion of the nonbreaching party and reasonably requires more than thirty (30) days to correct (and specifically excluding any failure to Minimum Purchase Commitments or pay money), and the defaulting party has, in the reasonable judgment of the nonbreaching party begun substantial corrective action to correct the default within
such thirty (30) day period and diligently pursues such action, in which event, termination shall not be effective unless ninety (90) days has expired from the date of the notice without corrective action being completed and the default remedied. 

			 

		15.3 	Termination for Convenience. Either party may terminate this Agreement for their convenience following the Initial Term by providing the other party with sixty (60) days prior written notice. 

			 

		15.4 	Effect of Termination. 

			 
			(a) Distributor’s Rights and Responsibilities. Upon termination or cancellation of this Agreement Distributor shall have no further right to purchase Products for resale or to represent itself as anAuthorized Castelle Distributor except as specifically permitted in Paragraph 15.4 (b) below. All unshipped orders shall be cancelled by Castelle without liability. Distributor shall, within ten (10) business days after termination, pay all outstanding and unpaid invoices issued by Castelle, less the costs of Products to be returned to Castelle to the extent authorized under Section 15.4 (b) herein below. 

			 

			(b) Inventory. Distributor may, unless notified otherwise in writing on or before the effective date of termination, sell its remaining inventory of the Products after termination of this Agreement. In the event that Distributor should elect not to sell its remaining inventory, Castelle may, at its sole 

	

Page 8

	 	Exhibit 10.16
		 

	 	discretion, repurchase Distributor’s inventory which is fit, merchantable and in Castelle’s
  original shipping carton at Castelle’s then current U.K. Distributor prices, less the aggregate
  amount of all credits previously issued with respect to such Products. Castelle shall promptly inspect
  all Products returned by Distributor and shall advise Distributor of any Product that is damaged
  and not acceptable to Castelle for repurchase. 

		 

	16. LIMITED LIABILITY 
		 

	 	IN NO EVENT SHALL CASTELLE’S TOTAL LIABILITY HEREUNDER EXCEED THE AMOUNT PAID BY DISTRIBUTOR FOR
  PRODUCTS HEREUNDER, AND IN NO EVENT SHALL CASTELLE BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE
  GOODS OR SERVICES BY ANYONE, OR FOR ANY SPECIAL CONSEQUENTIAL, INCIDENTAL OR OTHER DAMAGES, HOWEVER
  CAUSED, WHETHER FOR BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE, AND WHETHER OR NOT CASTELLE HAS
  BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THIS LIMITATIOIN SHALL APPLY NOTWITHSTANDING ANY
  FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. 

		 

	17. INDEMNITY 
		 

		17.1	Indemnity by Castelle. Subject to the restrictions set forth in this Paragraph, Castelle agrees to defend and indemnify Distributor from and against all actions or proceedings brought against Distributor arising
  out of any actual or alleged infringement by the Products of any patent, copyright, trade secret
  or other intellectual property right. 

			 

		17.2	Distributor Obligations. Distributor shall promptly notify Castelle of any claim hereunder upon becoming aware of the same and shall cooperate with and provide all reasonable assistance to Castelle
  upon Castelle’s request and, at Castelle’s expense, in the defense or settlement of such
  claim. Castelle shall have sole authority to defend and/or settle any claim under this Paragraph,
  provided, however, that Distributor may at its own cost, retain separate representation. 

			 

		17.3	Remedy for Infringement. If any Product, or any portion thereof, is finally adjudged to infringe a patent, copyright, trade secret or other intellectual property right, or if in Castelle’s opinion
  is likely to become the subject of such a claim, Castelle shall, at its option, either: (i) procure
  for Distributor the right to continue using the Product(s); or (ii) replace or modify the Products(s)
  so that it becomes non-infringing; or (iii) upon return of all infringing Product(s), refund to Distributor
  the price actually paid by Distributor for the infringing Products; or (iv) substitute for the infringing
  Products(s) other suitable, non-infringing equipment. 

			 

		17.4	Entire Liability. THE FOREGOING PROVISIONS OF THIS SECTION 17 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF CASTELLE AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR WITH RESPECT TO ANY ALLEGED
  INTELLECTUAL PROPERTY RIGHT INFRINGEMENT BY THE PRODUCTS. 

			 
		17.5 	Indemnity by Distributor. Distributor agrees to indemnify, defend and hold harmless Castelle from claims, losses, costs and liabilities arising out of the acts, omissions, Services, and sales of Distributor and its Customers. Castelle will promptly notify the Distributor of any such claims, losses, costs and liabilities, render reasonable assistance as required, and subject to Distributor selecting competent counsel and skillfully protecting Castelle hereunder in Castelle’s sole discretion, Castelle will permit the Distributor to direct the defense or settlement negotiations, and subject to Castelle’s approval of settlement details, to actually settle such claims. 

			 

	18. GENERAL TERMS AND CONDITIONS 

	

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	 	Exhibit 10.16
		 

		18.1	 Notices. All notices and requests required or authorized hereunder shall be given in writing either by personal
  delivery, by registered or certified mail, return receipt requested, or by telefax. Such notice shall
  be deemed to have been given upon such date that it is so personally delivered; the date seven (7)
  days after it is deposited in the mail; or the date the same is sent by telefax, irrespective of
  the date appearing therein. 

			 

		18.2 	Title. Castelle warrants that is owns all right, title and interest in the Products, including any Products hereafter made subject to this Agreement, and in all of Castelle’s patents, trademarks, trade names, inventions, copyrights, know-how and trade secrets relating to the design, manufacture, operation or service of the products. Distributor understands and agrees that the use of any of these proprietary rights is authorized solely for the purposes set forth herein, and shall cease upon termination or expiration of this Agreement. 

			 

		18.3	Confidentiality and Proprietary Information. 

			 

			(a) Confidential relationship. The parties agree and understand that by execution of this Agreement a confidential relationship is created by which either party may have access to confidential information owned or controlled by the other (including, but not limited to, all drawings, blueprints, descriptions, specifications, software, and data) disclosed in any form whether written, oral or on computer readable medium, and such information may contain proprietary details and disclosures (“Confidential Information”). 

			 

			(b) Duty. Each party shall keep and have its agents and employees keep all Confidential Information confidential and shall not copy or disclose the same except as specifically authorized by this Agreement, without the prior written consent of the other. Nothing herein shall limit either party’s use or dissemination of information not derived from the disclosing party or which has been or is subsequently made public by the disclosing party or a third party with the authority to do so. Upon expiration or termination of this Agreement, each party shall return to the other all copies of all Confidential Information, whether printed or otherwise. 

			 

			(c) Reverse engineering. Distributor agrees and covenants that it will not disassemble or reverse engineer any Product or portion thereof. No right or license is granted by this Agreement to Distributor to use Confidential Information or information derived from Confidential Information, for any purpose other than as expressly permitted under this Agreement. 

			 

		18.4	Export. The parties agree and understand that all obligations of Castelle to deliver, and of Distributor to accept, Products hereunder shall be specifically subject to Castelle obtaining the necessary approvals and licenses from the United States Government for export of the same. Castelle agrees to use its best commercially reasonable efforts, and Distributor agrees to cooperate in providing information and assistance requested by Castelle to obtain any such necessary approvals. 

			 

		18.5	Foreign Law Warranties and Obligations.

			 

			(a) Government consent. Distributor represents and warrants that, as of the date of this Agreement, no consent, approval or authorization of, or designation, declaration or filing with, any governmental authority in the Territory, including the E. C. Commission, which has not been made or obtained by Distributor prior to the date hereof, is required in connection with the valid execution, performance and delivery of this Agreement. Alternatively, if any such actions are required, Distributor agrees to use its best efforts to obtain such consent, approval or authorization and agrees to comply with all applicable laws in its performance under this Agreement. 

			 

			(b) Import and export control. Distributor understands and acknowledges that Castelle is subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export or diversion of certain products and technologies to certain countries. Any and all obligations of Castelle to provide technical information, technical assistance, any media in which any of the foregoing is contained, training and related technical data (collectively “Data”) shall be 

	

Page 10

	 	Exhibit 10.16
		 

	 	 	subject in all respects to such United States laws and regulations as shall from time to time govern
  the license and delivery of technology and products abroad subject to the jurisdiction of the United
  States, including the Export Administration Act of 1979, as amended, any successor legislation, and
  the Export Administration Regulations issued by the U.S. Department of Commerce, Bureau of Export
  Administration. Distributor warrants that it will comply in all respects with the export and reexport
  restrictions set forth in the export license (if necessary) for every item shipped from Castelle
  and will otherwise comply with the Export Administration Regulations or other United States laws
  and regulations in effect from time to time. 

			 
			(c) Representations of Distributor. Without in any way limiting the provisions of this Agreement, Distributor agrees that, unless prior written authorization is obtained from the U.S. Department of Commerce, Bureau of Export Administration, it will not resell, export or reexport, either directly or indirectly, any Product, or any portion thereof, to country groups Q,S,W,Y, or Z (as defined in the Export Administration Regulations and which currently consists of Albania, Bulgaria, Cambodia, Cuba, Czechoslovakia, Estonia, Hungary, Laos, Latvia, Libya, Lithuania, Mongolia People’s Republic, North Korea, Poland, Romania, the (former) Union of Soviet Socialist Republics and Vietnam), or Afghanistan or the People’s Republic of China any of the Data (if the direct products are commodities, software, or technical data described on the Control
List with a letter “A” following its Export Control Number). 

			 

		18.6	Independent Contractors. The relationship of Castelle and Distributor established by this Agreement is that of independent contractors, and nothing contained herein shall be construed to (i) give either party the power to direct and control the day-to-day activities of the other; (ii) constitute the parties as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking; or (iii) allow Distributor to create or assume any obligation on behalf of Castelle for any purpose whatsoever. All financial obligations associated with Distributor’s business are the sole responsibility of Distributor. All sales and other agreements between Distributor and its customers are Distributor’s exclusive responsibility and shall have no effect on Distributor’s obligations under this Agreement. Distributor shall be solely
responsible for, and shall indemnify and hold Castelle harmless from all claims, damages or lawsuits (including Castelle’s attorney’s fees) arising out of the acts of Distributor, its employees or its agents. 

			 

		18.7	Force Majeure. Except for the obligation to pay money properly due and owing, either party shall be excused from any delay or failure in performance hereunder caused by reason of any occurrence or contingency beyond its control, including, but not limited to, an act of God, earthquake, labor disputes, riots war, civil insurrection, expropriation, novelty of product manufacture or other unanticipated manufacturing problems, governmental requirements, inability to secure materials on a timely basis, and transportation difficulties. The obligations and rights of the party so excused shall be extended on a day-to-day basis for the time period equal to the period of such excusable delay. In order to obtain a suspension under this Paragraph, the party delayed shall send written notice of the delay and the reason therefore to the other party within seven (7) days
from the time the party delayed knew of the cause of such delay. 

			 

		18.8	Arbitration. With the exception of injunctive relief sought by Castelle, and actions for violations of Section 18.3 (“Confidentiality and Proprietary Information”), Section 18.5 (“Foreign Law Warranties and Obligations”) or disputes otherwise involving Distributor’s use of Castelle’s Intellectual Property Rights, any dispute or claim arising out of, in relation to, or in connection with this Agreement, or the interpretation, making, performance, breach or termination thereof, shall be finally settled by binding arbitration in Santa Clara, California under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) by three arbitrators appointed in accordance with said AAA Rules. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 

			 

		18.9	Governing Law. This contract shall be governed by the law of the state of California and not by any terms of the Convention in Contracts for International Sales of Goods. Arbitrators shall apply California 

	

Page 11

	 	Exhibit 10.16
		 

			law to the merits of any dispute or claim, without reference to rules of conflict of law. Arbitration proceedings shall be governed by the AAA Rules, without reference to state arbitration law. 

			 
		18.10	Survival of Certain Terms. The provisions of Paragraphs 8 [Limited Warranty], 13.2 [No Registration], 17 [Intellectual Property Right Indemnity], and 18 [General Terms and Conditions], shall survive the expiration or termination for any reason of this Agreement. 

			 

		18.11	Waiver. Any waiver of any right or remedy under this Agreement must be in writing and signed by the party to be bound to be effective. No delay or omission in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a waiver of any right or remedy on any future occasion. 

			 

		18.12	Assignment. Any assignment of this Agreement, or any of the rights hereunder, either voluntarily or by operation of law, by Distributor shall be void without the joint, prior written consent of Castelle and Distributor. 

			 
		18.13	Severability. If any provisions or portion thereof of this Agreement is held to be unenforceable or invalid, the remaining provisions and portions thereof shall nevertheless be given full force and effect, and the parties agree to negotiate in good faith, a substitute valid provision which most nearly effects the parties’ intent in entering into this Agreement. 

			 
		18.14	Language. This Agreement shall be construed and interpreted in English, and any translation hereof to a language other than English shall be for convenience only. 

			 

	19. ENTIRE AGREEMENT 
	
		
		 
		This Agreement together with the Exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, taking precedence over and superseding the Prior Agreement entered by the parties as of April 24, 2001, and any other prior or contemporaneous oral or written agreements or understandings. No subsequent alterations, amendments, or additions hereto shall be binding and valid unless reduced to writing and signed by both parties hereto. 

	
     

	 	IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated below:

		

	 	 	 
	 	CASTELLE INCORPORATED	AMS Ltd.
		 	 
	 	By:  /s/ Scott C. McDonald	By:  /s/ Dennis Buller
		 	 
	 	Name: Scott C. McDonald	Name: Dennis Buller
		 	 
		Title: President & CEO	Title: Director 
		 	 
		Date:	Date: 

	

Page 12

	 	Exhibit 10.16
		 

	EXHIBIT A 
	 

	PRODUCTS & PRICES 
	 

	Distributor Price equal to 65% of U.S. Price List MSRP 
	 

	The Products and U.S. Price List and the U.K. Price List are Included in Attachments 1 and 2 to this Exhibit A 

	

Page 13

	 	Exhibit 10.16
		 

	ATTACHMENT 1 TO EXHIBIT A 

  Products and U.S. Price List 
	 

	FaxPress Network Fax Servers 
	 
	FaxPress Small Business Edition (SBE), 2500, 5000, 7000 & 7500 Fax Server  Integrated network fax servers for Windows NT/2000/Terminal Server, NetWare, Linux

	 

	Part Number	Description	MSRP	 
	 	 	
	 
	6629860-1109	Small Business Edition (SBE) Ethernet 8MB memory 1 line 14.4 Kbps	$	1495	 
	 	 	  	 	 
	6629860-1100	FaxPress 2500† Ethernet 8 MB memory • 2 lines 14.4 Kbps 

    New!!Reform for FaxPress Software Included with FP5000/7000/7500	$	2995	 
	  
	6629860-1055	FaxPress 5000† Ethernet • 16MB memory • 4 lines • 14.4 Kbps	$	5995	 
	  
	6629860-1056	FaxPress 5000† Ethernet • 32MB memory • 8 lines • 14.4 Kbps	$	7995	 
	  
	6629860-1136	FaxPress 7000† Ethernet • 10/100Base-T • 32MB memory • 8 lines • Rackmount	$	8495	 
	  
	6629860-1146	FaxPress 7500† Ethernet • 10/100Base-T • 32MB memory • 8L Fax/4L E&M • RM	$	9995	 
	 	 	 	 	 

		† FaxPress 2500, 5000, 7000 and 7500 models come with software version 6.x PRO, and include a
  choice of Exchange Direct, Exchange Connector, or SMTP gateway. The 5000, 7000 and 7500 models
  now also include Reform for FaxPress software. 

		 

	FaxPress PRO†† Software for Small Business Edition (SBE) 
	 

	 	New Features Include: Single Sign On, Archive, ODBC Phone Books, Fax Approval, Multiprotocol, SNMP
  Plus choice of Exchange Direct, Exchange Connector or SMTP Gateway 

		 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1084	 FaxPress v6.x Basic to v6.x PRO with E-Mail Gateway††† 	$	495	 
	 	 	 	 	 

	FaxPress Add-Ons & Upgrades 
	 
	FaxPress Software Upgrades to v6.x PRO††                                                           
	 
	     New Features Include: Single Sign On, Archive, ODBC Phone Books, Fax Approval, Goldmine, Multiprotocol,
  SNMP

	 

	 	NOTE: FaxPress 6.x software upgrades can only be sold to customers having FaxPress models
  1500N, 3500, OfficeConnect, SBE, 2500, 5000, 7000 or 7500. The purchase of a software upgrade does not entitle the buyer/customer to any support on the FaxPress hardware. In cases where the hardware needs to be upgraded
  in order to run the new software (including upgrades necessitated by failures that can occur in the
  flashing of Boot PROM’s or modifying of EEPROM’s), the cost of the hardware upgrade is
  the responsibility of the customer - it is not included in the cost of the software. Customers that
  desire both software and hardware support should investigate Castelle s Extended Support Agreement.
  Please contact your Castelle Sales Representative for details. 

		 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1095	FaxPress v3.7.3 Upgrade to v6.x PRO with E-Mail Gateway†††	$	1990	 
	6629860-1096	FaxPress v4.x Upgrade to v6.x PRO with E-Mail Gateway†††	$	1690	 
	6629860-1097	FaxPress v5.x Upgrade to v6.x PRO with E-Mail Gateway††	$	1490	 
	  
	6629860-1081	FaxPress v3.7.3 Upgrade to v6.x PRO without E-Mail Gateway	$	995	 
	6629860-1082	FaxPress v4.x Upgrade to v6.x PRO without E-Mail Gateway	$	695	 
	6629860-1083	FaxPress v5.x Upgrade to v6.x PRO without E-Mail Gateway	$	495	 

	

	 	Exhibit 10.16
		 

		†† Certain features contained in v6.x PRO are activated with a “key code” that

is based on the serial number of the FaxPress unit that it will be loaded onto. The serial number

will be required when ordering. 

		 
		††† Purchase of this software upgrade includes choice of Exchange Direct, Exchange Connector
  or SMTP gateway. Please indicate your choice when ordering. 

		 

	FaxPress Hardware Upgrades                                                                                  

	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	66298600-878	FaxPress 1500/1500-N 1-line Upgrade Kit	$	6257	 
	  
	66298600-850	FaxPress 3000/3500 2-line Upgrade Kit	$	995	 
	  
	6629860-1049	FaxPress 5000 4-line Upgrade Kit	$	2495	 

	 
	FaxPress Software Add-Ons for 5.x and 6.x                                
                                
	 

	PART NUMBER	DESCRIPTION		 	 
	
	
	 	 	 
	6629860-1006	FaxPress OCR Software (for v5.x or higher)	$	595	 
	  
	6629860.1002	FaxPress cc:Mail 6.x Gateway, Windows Version (for v5.x or higher)	$	995	 
	  
	6629860-1092	FaxPress 6.x Lotus Notes Gateway, Windows NT only†	$	995	 
	  
	6629860-1099	FaxPress 6.x SMTP Gateway (Windows NT only) †	$	995	 
	  
	6629860-1033	FaxPress Exchange Direct Software (for v5.x or higher)†	$	995	 
	  
	6629860-1134	FaxPress Exchange Connector Software (for 6.2 SP1 or higher)†	$	995	 
	  
	6629660-1152	Reform for FaxPress (for 6.2 SP2 or higher) †† (New!)	$	250	 

		 
		†	 	This software is activated with a “key code” that is based on the serial number of the FaxPress unit that it will be loaded onto. The serial number will be required when ordering. For Exchange Direct, please specify your current FaxPress software revision also.

		 

		††   	 	This software is activated with a “key code” that is based on the “seed number” of the Reform Software. After installing Reform, you can find the seed number by clicking “Help” and then the “Register” button in the Form Designer.

		 

	LANpress Network Print Servers
	 
	LANpress MP  - High-performance, multi-protocol external print servers 
	                                    Supports Windows NT, Windows 95, Windows for Workgroups, NetWare 2.x/3.x/4x (NDS), AppleTalk & UNIX 

	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1108	 LANpress Jr. 10/100 Ethernet •10/100Base-T 	$	199	 
	  
	 6629660-1072	 2000 2+1 Ethernet •10/100Base-T •2 parallel + 1 serial 	$	339 	 
	  
	 66298600-955	 LANpress 3P/1 00 Ethernet •10/100Base-T •3 parallel 	$	345	 
	  
	 6629860-1042	 LANpress Jr. MP Ethernet • 10Base-T 	$	149	 
	  
	 6629860-1154	 LANpress 2P Wireless (New!)	$	395	 

	

	

  Page 15

	 	Exhibit 10.16
		 

	OfficeDirect Server Appliances 
	 
	OfficeDirect Storage and Message Servers                                                                 
	 
	Plug-and-forget server appliances that bring internet and inter-office e-mail and fax communications to small and medium-sized companies 

	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1130	OfficeDirect Storage Server	$	995	 
	6629860-1124	OfficeDirect Message Server	$	995	 

	 
	InfoPress Information Delivery Solutions
	 
	-Universal document access and delivery via phone, fax, e-mail and the Web
	 
	InfoPress Fax-On-Demand for Fax Press
	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	117-IP/FaxPress	2 voice and 1 Fax Port Licenses plus ProLine2V, 2 Port Voice Card	$	3289	 
	 	 	 	 	 

	InfoPress Fax-On-Demand Starting Bundles  (includes FaxPress Integration Software) 
	 

	PART NUMBER	DESCRIPTION		 
	
	
	 	 
	117-HSEBundle	InfoPress Fax-On-Demand, 2x1 Hardware/Software Kit w/Email-On-Demand	$	5489	 
	117-HSBundle	InfoPress Fax-On-Demand, 2x1 Hardware/Software Kit	$	4389	 
	117-Sbundle	InfoPress Fax-On-Demand, 2X1 Software	$	3289 	 

	 
	InfoPress Additional Software Licenses                                                                        
	 

	PART NUMBER	DESCRIPTION		 
	
	
	 	 
	117-V	InfoPress Software License, Voice (price per line)	$	1425 	 
	117-F	InfoPress Software License, Fax (price per line)	$	1425	 

	 
	InfoPress Email-On-Demand Enterprise Edition                                                          
	 

	PART NUMBER	DESCRIPTION	 	 
	
	
	 	 
	117-EMOD1	InfoPress Email-On-Demand, Enterprise Edition, single address	$	1095 	 
	117-EMOD25	InfoPress Email-On-Demand, Enterprise Edition, 25 addresses	$	5495	 
	117-EMOD100	InfoPress Email-On-Demand, Enterprise Edition, 100 addresses	$	8245 	 
	117-EMOD100+	InfoPress Email-On-Demand, Enterprise Edition, 100+ addresses	$	10995 	 

	

  Page 16

	 	Exhibit 10.16
		 

	ATTACHMENT 2 TO EXHIBIT A 

	U.K. Price List 
	 

	FaxPress Network Fax Servers 
	 
	FaxPress Small Business Edition (SBE), 2500, 5000, 7000 & 7500 Fax Server Integrated network fax servers for Windows NT/2000/Terminal Server, NetWare, Linux
	 

	Part number	Description	MSRP	 
	 	 	
	 
	6629860-1109	Small Business Edition (SBE) Ethernet 8MB memory 1 line 14.4 Kbps	 	£997	 
	 	 	 	 	 
	6629860-1100	FaxPress 2500† Ethernet 8MB memory • 2 lines 14.4 Kbps

                New!! Reform for FaxPress Software Included with FP5000/7000/7500	 	£1997	 
	 	 	 	 	 
	6629860-1055	FaxPress 5000† Ethernet • 16MB memory • 4 lines • 14.4 Kbps	 	£3997	 
	 	 	 	 	 
	6629860-1056	FaxPress 5000† Ethernet • 32MB memory • 8 lines • 14.4 Kbps	 	£5330	 
	 	 	 	 	 
	6629860-1136	FaxPress 7000† Ethernet • 10/100Base-T • 32MB memory • 8 lines • Rackmount	 	£5663	 
	 	 	 	 	 
	6629860-1146	FaxPress 7500† Ethernet • 10/100Base-T • 32MB memory • 8L Fax/4L E&M • RM	 	£6663	 
	 	 	 	 	 

	 	t   FaxPress 2500, 5000, 7000 and 7500 models come with software version 6.x PRO, and include a choice
of Exchange Direct, Exchange Connector, or SMTP gateway.
		 

	FaxPress PRO†† Software for Small Business Edition (SBE) 
	 
	      New Features Include: Single Sign On, Archive, ODBC Phone Books, Fax Approval, Multiprotocol, SNMP
	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1084	FaxPress v6.x Basic to v6.x PRO with E-Mail Gateway†††	 	£330	 

	FaxPress Add-Ons & Upgrades 
	 
	FaxPress Software Upgrades to v6.x PRO††                                                                                                                         
	     New Features Include: Single Sign On, Archive, ODBC Phone Books, Fax
  Approval, Goldmine, Multiprotocol, SNMP

	 

	 	NOTE: FaxPress 6.x software upgrades can only be sold to customers having FaxPress models 1500N, 3500,
  OfficeConnect, SBE, 2500, 5000, 7000 or 7500. The purchase of a software upgrade does not entitle the buyer/customer to any support on the FaxPress hardware. In cases where the hardware needs to be upgraded
  in order to run the new software (including upgrades necessitated by failures that can occur in the
  flashing of Boot PROM’s or modifying of EEPROM’s), the cost of the hardware upgrade
  is the responsibility of the customer - it is not included in the cost of the software. Customers
  that desire both software and hardware support should investigate Castelle’s Extended Support
  Agreement. Please contact your Castelle Sales 

		 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1095	FaxPress v3.7.3 Upgrade to v6.x PRO with E-Mail Gateway†††	 	£1327 	 
	 	 	 	 	 
	6629860-1096	FaxPress v4.x Upgrade to v6.x PRO with E-Mail Gateway†††	 	£1127	 
	 	 	 	 	 
	6629860-1097	FaxPress v5.x Upgrade to v6.x PRO with E-Mail Gateway†††	 	£993	 
	 	 	 	 	 
	6629860-1081	FaxPress v3.7.3 Upgrade to v6.x PRO without E-Mail Gateway	 	£663	 
	 	 	 	 	 
	6629860-1082	FaxPress v4.x Upgrade to v6.x PRO without E-Mail Gateway	 	£463 	 
	 	 	 	 	 
	6629860-1083	FaxPress v5.x Upgrade to v6.x PRO without E-Mail Gateway	 	£330 	 

	

Page 17

	 	Exhibit 10.16
		 

		†† Certain features contained in v6.x PRO are activated with a “key code” that

is based on the serial number of the FaxPress unit that it will be loaded onto. The serial number

will be required when ordering. 

		 
		††† Purchase of this software upgrade includes choice of Exchange Direct, Exchange Connector
  or SMTP gateway. 

		 

	FaxPress Hardware Upgrades                                                                             
	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	66298600-878	FaxPress 1500/1500-N 1-line Upgrade Kit	 	 £417 	 
	66298600-650	FaxPress 3000/3500 2-line Upgrade Kit	 	 £663 	 
	6629860-1049	FaxPress 5000 4-line Upgrade Kit	 	 £1663 	 
	 	 	 	 	 

	FaxPress Software Add-Ons for 5.x and 6.x  
	 

	PART NUMBER	DESCRIPTION	 	 
	
	
	 	 
	6629860-1006	FaxPress OCR Software (for v5.x or higher)	 	£397 	 
	6629860-1002	FaxPress cc:Mail 6.x Gateway, Windows Version (for v5.x or higher)	 	£663 	 
	6629860-1092	FaxPress 6.x Lotus Notes Gateway, Windows NT only †	 	£663 	 
	6629860-1099	FaxPress 6.x SMTP Gateway (Windows NT only) †	 	£663	 
	6629860-1033	FaxPress Exchange Direct Software (for v5.x or higher) †	 	£663 	 
	6629860-1134	FaxPress Exchange Connector Software (for 6.2 SP1 or higher)† (New!)	 	£663	 
	6629860-1152	Reform for FaxPress (for 6.2 SP2 or higher)†† (New!)	 	£167 	 
	 	 	 	 	 

		†	 	This software is activated with a “key code” that is based on the serial number of the FaxPress unit that it will be loaded onto. The serial number will be required when ordering. For Exchange Direct, please specify your current FaxPress software revision also. 

			 

		 ††	 	This software is activated with a "key code" that is based on the "seed number" of the Reform Software. After installing Reform, you can find the seed number by clicking “Help” and then the “Register” button in the Form Designer. 

			 

	LANpress Network Print Servers 
	 
	LANpress MP  - High-performance, multi-protocol external print servers 
	                                     Supports Windows NT, Windows 95, Windows for Workgroups, NetWare 2.x/3.x/4x (NDS), AppleTalk & UNIX

	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1108	LANpress Jr. 10/100 Ethernet •10/100Base-T (New!)	 	£133	 
	6629860-1072	LANpress 2000 2+1 Ethernet •10/100Base-T •2 parallel + 1 serial (New!)	 	£226	 
	66298600-955	LANpress 3P/100 Ethernet •10/100Base-T •3 parallel	 	£230	 
	6629860-1042	LANpress Jr. MP Ethernet •l0Base-T	 	£99	 
	6629860-1154	LANpress 2P Wireless	 	£263 	 

	

Page 18

	 	Exhibit 10.16
		 

	OfficeDirect Server Appliances 
	 

	OfficeDirect Storage and Message Servers 
	 

	 	Plug-and-forget server appliances that bring internet and inter-office e-mail and fax communications

to small and medium-sized companies 

		 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	6629860-1130	OfficeDirect Storage Server (New!)	 	£663	 
	6629860-1124	OfficeDirect Message Server (New!)	 	£663	 

	 
	        InfoPress Information Delivery Solutions
	 
	-Universal document access and delivery via phone, fax, e-mail and the Web
	 
	 InfoPress Fax-On-Demand for Fax Press 
	 

	PART NUMBER	DESCRIPTION	MSRP	 
	
	
	
	 
	117-IP/FaxPress	2 voice and 1 Fax Port Licenses plus ProLine2V, 2 Port Voice Card	 	£2193	 

	 
	InfoPress Fax-On-Demand Starting Bundles  (includes FaxPress Integration Software) 
	 

	PART NUMBER	DESCRIPTION	 	 
	
	
	 	 
	117-HSEBundle	InfoPress Fax-On-Demand, 2x1 Hardware/Software Kit w/Email-On-Demand	 	£3659	 
	117-HSBundle	InfoPress Fax-On-Demand, 2x1 Hardware/Software Kit 	 	£2926 	 
	117-Sbundle	InfoPress Fax-On-Demand, 2X1 Software	 	£2193	 

	 
	 InfoPress Additional Software Licenses 
	 

	PART NUMBER	DESCRIPTION	 	 
	
	
	 	 
	117-V	InfoPress Software License, Voice (price per line) 	 	£950	 
	117-F	InfoPress Software License, Fax (price per line)	 	£950	 

	 
	 InfoPress Email-On-Demand Enterprise Edition  
	 

	PART NUMBER	DESCRIPTION	 	 
	
	
	 	 
	117-EMOD1	InfoPress Email-On-Demand, Enterprise Edition, single address	 	£730 	 
	117-EMOD25	InfoPress Email-On-Demand, Enterprise Edition, 25 addresses	 	£3663	 
	117-EMOD100	InfoPress Email-On-Demand, Enterprise Edition, 100 addresses	 	£5497 	 
	117-EMOD100+	InfoPress Email-On-Demand, Enterprise Edition, 100+ addresses	 	£7330 	 

	

Page 19 

	 	Exhibit 10.16
		 

	EXHIBIT B 
	 

	Territory 
	 

	Distributor’s Territory shall be the “European Community”, defined for the purpose of
  this Agreement as the countries set forth below. Castelle shall have the right to revise the Territory
  upon thirty (30) days written notice in the event that Distributor fails to meet its Minimum Purchase
  Commitment, or Castelle determines in its solereasonable discretion that Distributor has failed to
  adequately and effectively manage, support and provide Services to Resellers within the Territory. 

	 

	Group 1	Group 2	Group 2 (Cont’d)	 
	
	 
	United Kingdom	Spain	Cyprus	 
	Belgium	Denmark	Greece	 
	Denmark	Finland	Monaco	 
	France	Norway	 	 
	Germany	Portugal	 	 
	Ireland	Hungary	 	 
	Italy	Austria	 	
	Netherlands	Portugal	 	
	Sweden	Liechtenstein	 	 
	Switzerland	Luxembourg	 	

	

Page 20

	 	Exhibit 10.16
		 

	EXHIBIT C 
	 

	Minimum Purchase Commitment 
	 

	Distributor agrees to purchase Products equal to Distributor’s prices at no less than US$200,000
  per calendar quarter (the “Time Period”), to be delivered in the same calendar quarter,
  excluding stock rotation purchases authorized within Section 10 hereinabove. 

	

Page 21

	 	Exhibit 10.16

	 
	
ADDENDUM TO AMENDED AND RESTATED

  INTERNATIONAL DISTRIBUTOR AGREEMENT

	 

	This Addendum to the Amended and Restated International Distributor Agreement (“Agreement”)
  is attached to and made a part of that certain Agreement, dated as of July 8, 2002 , between Castelle,
  a California corporation having its principal place of business located at 855 Jarvis Drive, Suite
  100, Morgan Hill, California 95037, U.S.A. (“Castelle”) and AMS, Ltd., having its principal
  place of business located at Bournemouth, England (“Distributor”). References to the “Agreement” shall mean the Agreement as modified, amended and supplemented by the terms of this Addendum. 

	 

	Castelle and AMS agree to the following changes and additions to the Agreement: 
	 
	Section 18.5  (c) Representations of Distributor  is modified and replaced by the following provisions:

	 
	Without in any way limiting the provisions of this Agreement, Distributor agrees that it will not resell,
  export or re-export, either directly or indirectly, any Product, or any portion thereof, to the embargoed
  destinations unless prior written authorization is obtained from a) the U.S. Department of Commerce
  Bureau of Industry and Security, U.S.A., to destinations as published in their then current Export
  Administration Regulations Part 746, which currently include Cuba, Libya, Iran, Iraq, Rwanda and
  the Federal Republic of Yugoslavia (Serbia and Montenegro, Bosnia-Herzegovina, Croatia, and Slovenia);
  b) the Department of the Treasury, Office of Foreign Assets Control, U.S.A, to destinations as published
  in their then current sanctions program, which currently include Balkans, Burma, Cuba, Iran, Iraq,
  Liberia, Libya, North Korea, Sierra Leone, Sudan, Taliban, Unita, and Yugoslavia; and c) the U.S.
  Department of Commerce Bureau of Industry and Security, U.S.A, to persons as published in their then
  current Denied Persons List, EAR Part 764, Supplement 2, Specially Designated Nationals List, EAR
  Part 764, Supplement 3 and Entity List, EAR Part 744, Supplement 4. 

	 
	Exhibit B Territory. Distributor’s Territory is modified to include Russia. 

	 
	In all other respects, the terms of the original Agreement remain in full effect. However, if there
  is a conflict between this Addendum and the original Agreement, the terms of this Addendum will prevail.

	 

	Castelle	AMS, Ltd.
	 	 
	/s/ Scott C. McDonald	/s/ Dennis Buller
	By: Scott C. McDonald	By: Dennis Buller
	President & CEO	Director
	 	 
	Date:  September 6, 2002	Date: March 9, 2002

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