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Sample Business Contracts

Distribution Agreement - Red Hat Software Inc. and Fred Kasper & Associates Iinc.

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                     RED HAT PRODUCT DISTRIBUTION AGREEMENT



         This is an agreement related to the distribution of certain products of
Red Hat Software, Inc. Red Hat Software, Inc., a Delaware corporation ("Red
Hat") and FRANK KASPER & ASSOCIATES, INC., a Minnesota corporation
("Distributor"), enter into this Agreement as of the last date following the
signatures below.

1.       DEFINITIONS.

         A. "Customers" of Distributor shall include dealers, resellers, value
added resellers, direct resellers and other entities that acquire the Products
from Distributor.

         B. "DOA" shall mean Product, or any portion thereof, which fails to
operate properly on initial installation, boot, or use, as applicable.

         C. "Documentation" shall mean user manuals, training materials, Product
descriptions and specifications, brochures, technical manuals, license
agreements, supporting materials and other printed information relating to the
Products and included with the Products, whether distributed in print,
electronic, or video format.

         D. "Effective Date" shall mean the date on which this Agreement is
signed and dated by a duly authorized representative of each party.

         E. "End Users" shall mean the final purchasers or licensees who have
acquired Products for their own use and not for resale, remarketing or
redistribution.

         F. "Non-Saleable Products" shall mean any Product that has been
returned to Distributor by its Customers that has had the outside shrink
wrapping or other packaging seal broken; any components of the original package
are missing, damaged or modified; or is otherwise not fit for resale.

         G. "Products" shall mean, individually or collectively, the software
licenses, electronic products, the sealed software packages comprised of the
computer programs encoded on media together with manuals, materials and other
contents of the packages associated therewith of Red Hat.

         H. "Return Credit" shall mean a credit to Distributor in an amount
equal to the price paid by Distributor for Products less any price protection
credits but not including any early payment, prepayment or other discounts.

         I. "Services" means any warranty, maintenance, advertising, marketing
or technical support and any other services performed or to be performed by Red
Hat.

         J. "Territory" shall mean worldwide.


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                                      -2-

2.       APPOINTMENT AS DISTRIBUTOR.

         Red Hat hereby grants to Distributor, and Distributor accepts, the
non-exclusive, non-transferable right and license to distribute Products during
the term of this Agreement within the Territory, together with any updates or
enhancements to the Products and any new releases related to the Products. This
license includes the right to order, possess and distribute the Products to
Customers and to provide the Products to Customers for use on demonstration
units. Red Hat and Distributor acknowledge and agree that the license to use the
Product is solely between Red Hat and the End User and is governed by the terms
of the Red Hat's standard end user license agreement enclosed with the Product.
Distributor will use commercially reasonable efforts to promote distribution of
the Products.

3.       PURCHASE ORDERS.

         A. Distributor shall issue to Red Hat one or more purchase orders
identifying the Products Distributor desires to purchase from Red Hat. The terms
and conditions of this Agreement shall govern all purchase orders, except that
purchase orders may include other terms and conditions which are consistent with
the terms and conditions of this Agreement, and which are mutually agreed to in
writing by Distributor and Red Hat. Purchase orders will be placed by
Distributor by fax or electronically transferred.

         B. If for any reason Red Hat's production is not on schedule, Red Hat
agrees to use its best efforts to allocate inventory to Distributor and make
shipments in proportion to Distributor's percentage of all Red Hat's orders
during the previous [CONFIDENTIAL TREATMENT REQUESTED]** days.

4.       ACCEPTANCE OF PRODUCT, SHIPPING

         A. Distributor shall, after a reasonable time to inspect each shipment,
such time not to exceed ten days, accept Products (the "Acceptance Date") if the
Products and all necessary Documentation delivered to Distributor are in
accordance with the purchase order. Products shall be shipped FOB origin. Title
and risk of loss or damage to Products shall pass to Distributor at the time the
Products are delivered by Red Hat to common carrier for shipping to Distributor.
Red Hat shall ship Products to Distributor's warehouses anywhere in the world as
specified by Distributor. Distributor shall pay the reasonable costs and
expenses of shipping Products to Distributor.

         B. Red Hat and Distributor agree that no title or ownership of the
proprietary rights to any software code is transferred by virtue of this
Agreement notwithstanding the use of terms such as "purchase", "sale" or the
like within this Agreement. Red Hat and third parties retain all ownership
rights and title to any and all software code within the Products.



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**[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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                                      -3-

5.       RETURNS.

         A. Red Hat agrees to accept return of overstocked Products returned by
Distributor, provided that the quantity of Products returned by Distributor does
not exceed [CONFIDENTIAL TREATMENT REQUESTED]** of the Products purchased by
Distributor during the previous [CONFIDENTIAL TREATMENT REQUESTED]**. Shipments
of Products being returned shall be new, unused and in sealed cartons. Red Hat
shall credit Distributor's account in the amount of the Return Credit.
Distributor shall bear all costs of shipping and risk of loss of those Products
returned under this Section to Red Hat's location.

         B. Distributor shall have the right to return to Red Hat for Return
Credit any DOA Product or any Product that is returned to Distributor within
thirty (30) days after the initial delivery date to the End User and that fails
to perform in accordance with Red Hat's Product warranty. Red Hat shall bear all
costs of shipping and risk of loss of DOA and in-warranty Products to Red Hat's
location and back to Distributor or Distributor's Customer.

         C. Distributor shall have the right to return for Return Credit,
[CONFIDENTIAL TREATMENT REQUESTED]** all Products that are damaged in transit,
become obsolete or Red Hat discontinues, updates, revises or are removed from
Red Hat's current price list; provided that Distributor uses it best efforts to
return all such Products within [CONFIDENTIAL TREATMENT REQUESTED]** after
Distributor receives written notice from Red Hat that such Products are
obsolete, superseded by a newer version, discontinued or are removed from Red
Hat's price list. Red Hat shall bear all reasonable costs of shipping and risk
of loss of obsolete or outdated Products to Red Hat's location.

         D. Distributor shall have the right to return to Red Hat for Return
Credit Non-Saleable Products. Distributor shall bear all costs of shipping and
risk of loss of Non-Saleable Products to Red Hat's location.

         E. As a condition precedent to returning Products, Distributor shall
request and Red Hat shall issue a Return Material Authorization Number (RMA)
within 15 days of the Distributor's request. Red Hat shall have no obligation to
accept returns in the absence of a valid RMA.

         F. This Section 5 does not apply to any Products purchased by
Distributor prior to April 28, 1999. A good faith effort will be used by
Distributor to return products purchased before April 28, 1999 by Distributor in
accordance with the terms of this Section 5.

6.       PRODUCT PRICES.

         A. Charges, prices, quantities and discounts and shipping costs, if
any, for Products shall be determined as set forth in Exhibit A of this
Agreement, or as otherwise mutually agreed upon by the parties in writing. Such
charges, prices, quantities, discounts and shipping costs shall not be higher
than those charged to other same class of customers buying in like quantities.


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AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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                                      -4-

If Red Hat offers a lower price, including but not limited to, sales price,
volume discount, extended terms, advertising, freight cost, or back haul
allowance to any other like customer of the same class, then Red Hat shall
immediately offer that lower price to Distributor, and shall apply such lower
price to Distributor, and shall apply such lower price to Distributor's
orders not yet shipped. Distributor shall be entitled to participate in and
receive credit to reflect the difference in price for all affected inventory
in Distributor's or its resellers inventory on the date of the price decrease.

         B. Red Hat shall have the right to increase prices from time to
time, upon written notice to Distributor not less than
[CONFIDENTIAL TREATMENT REQUESTED]** days prior to the effective date of such
increase. All orders placed prior to the effective date of the increase, for
shipment prior to the effective date, shall be invoiced by Red Hat at the
lower price.

         C. Red Hat shall have the right to decrease prices from time to time,
upon written notice to Distributor. Red Hat shall grant to Distributor, its
parent, affiliates and subsidiaries and Distributor's Customers a price credit
for the full amount of any Red Hat price decrease on all Products on order, in
transit and in their inventory on the effective date of such price decrease.
Distributor and its Customers shall, after receiving written notice of the
effective date of the price decrease, provide a list of all Products for which
they claim a credit.

7.       PAYMENT.

         A. Except as otherwise set forth in this Agreement, any undisputed sum
due to Red Hat pursuant to this Agreement shall be payable net [CONFIDENTIAL
TREATMENT REQUESTED]** after the Acceptance Date. Red Hat shall invoice
Distributor no earlier than the applicable shipping date for the Products
covered by such invoice. Any payments more than [CONFIDENTIAL TREATMENT
REQUESTED]** past due shall be subject to a late fee of [CONFIDENTIAL TREATMENT
REQUESTED]** percent per month, or the maximum allowable by law, whichever is
less.

         B. Distributor shall be responsible for franchise taxes, sales or use
taxes, and all other taxes, or shall provide Red Hat with an appropriate
exemption certificate.

8.       ADVERTISING.

         A. Red Hat offers a [CONFIDENTIAL TREATMENT REQUESTED]** advertising
program and may offer additional advertising credits, or other promotional
programs or incentives to Distributor as it offers to its other distributors
or customers. Distributor shall have the right, at Distributor's option, to
participate in such programs.

         B. Red Hat shall provide at no charge to Distributor and the Customers
of Distributor, reasonable marketing, support, and advertising materials in
reasonable quantities in connection with the resale of Products as are currently
offered or that may be offered by Red Hat. Red Hat shall bear no costs or
expenses incurred by Distributor related to Distributor's marketing of Products
unless such expenses are approved in advance in writing by Red Hat.

         C. Upon request of Distributor, Red Hat shall consider providing
Customized Products for specific customers of Distributor.

9.       WARRANTIES/INDEMNIFICATION

         A. Subject to the provisions of Section 10., Limitation on Liability,
Red Hat shall defend, hold harmless, and indemnify, including reasonable
attorney's fees, Distributor from and against


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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.



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                                      -5-

                  I. any claim that any of the Products infringes upon any
         intellectual property interest of any third party; and

                  II. any claim that any of the Products is not year 2000
         compliant, meaning that it is unable to correctly process and exchange
         date data with respect to the change from the twentieth to the
         twenty-first century.

                  III. any claim arising out of any negligent action or
         inaction, or willful misconduct by Red Hat relating to Red Hat's
         responsibilities under this Agreement.

         The indemnification obligations set forth in this Section 9.A shall
apply only provided that Distributor provides Red Hat with prompt written notice
of each such claim, and provided that Red Hat shall have complete control of the
defense of such claim and Distributor's reasonable cooperation in its defense.

         B. EU WARRANTY. Vendor warrants and represents for Products distributed
to the European Union ("EU") that , that to the best of its knowledge, the
Products will be accepted under all EU directives, regulations and the EU
country's legislation.

         C. MADE IN AMERICA CERTIFICATION. Vendor by the execution of this
Agreement certifies that it will not label any of its products as being "Made in
America," "Made in U.S.A.," or with similar wording, unless all components or
elements of such Product are in fact made in the United States of America.
Vendor further agrees to defend, indemnify and hold harmless from and against
any and all claims, demands, liabilities, penalties, damages, judgments or
expenses (including attorney's fees and court costs) arising out of or resulting
in any way from Product that does not conform to the Certification.

         D. Distributor shall defend, hold harmless, and indemnify, including
reasonable attorney's fees, Red Hat from and against any claim arising out of
any action or inaction by Distributor with respect to the subject matter of this
Agreement, other than as set forth in Section 9.A., B or C. including but not
limited to liabilities that may result, in whole or in part, from Distributor's
negligence or willful misconduct in the distribution of the Products pursuant to
this Agreement, or for representations or warranties made by Distributor related
to the Products in excess of the warranties of Red Hat, provided that Red Hat
provides notice to Distributor of any all such claims and provides reasonable
assistance to Distributor in the defense of such claims at Distributor's
expense.

10.      LIMITATION ON LIABILITY

         A. EACH PARTY'S AGGREGATE LIABILITY FOR DAMAGES CLAIMED UNDER THIS
AGREEMENT SHALL BE LIMITED TO [CONFIDENTIAL TREATMENT REQUESTED]** TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL RED HAT BE
LIABLE TO DISTRIBUTOR OR TO ANY THIRD PARTY FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, PUNITIVE DAMAGES, OR ANY DAMAGES
RESULTING FROM LOSS OF DATA, USE OR PROFITS, OR LOSS OF

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**[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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                                      -6-

CONTRACTS OR BUSINESS OPPORTUNITY, ARISING OUT OF THIS AGREEMENT OR THE USE OF
OR INABILITY TO USE THE SOFTWARE, DOCUMENTATION OR RED HAT PRODUCT OR ARISING
OUT OF RED HAT'S PERFORMANCE OR NON-PERFORMANCE HEREUNDER, WHETHER OR NOT
REASONABLY FORESEEABLE AND EVEN IF RED HAT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, ARISING UNDER STATUTE OR OTHERWISE.

         B. Nothing in this Section shall restrict either party's liability for
death, personal injury, or other damage not capable of limitation under
applicable law.

11.      DISTRIBUTOR REPORTS.

         Distributor shall provide to Red Hat monthly sales out reports related
to Distributor's sale of Products, which shall include the following
information: month and year sales activity occurred, internal product number
(assigned by Distributor), written description, Customer name, state and
zip-code of Customers location, unit cost (distributor's cost at quantity 1),
quantity and extended cost (cost times quantity). Distributor shall provide such
reports no later than [CONFIDENTIAL TREATMENT REQUESTED]** after the end of each
month.

12.      TRADEMARK USAGE.

         A. Red Hat grants to Distributor, and Distributor accepts, a
non-exclusive, non-transferable right and license to use and display the
trademarks of Red Hat associated with the Products (the "Marks"), solely in
conjunction with Distributors efforts to market the Products, subject to and in
accordance with policies and Guidelines established by Red Hat, in its sole
discretion, from time to time. Red Hat's current trademark usage guidelines are
attached hereto as Exhibit B and made a part hereof.

         B. Distributor shall not use any of the Marks, in whole or in part, in
its company, corporate, domain or trade name.

         C. Distributor shall not alter, cover, modify, delete, obfuscate or
remove any Mark or trademark designator contained in or appearing on or in the
Products or in advertising or promotional material prepared or furnished to
Distributor by Red Hat. Distributor shall not use any Red Hat trade name,
trademark or service mark in any manner other than as expressly authorized in
this Agreement or as otherwise agreed to in writing by Red Hat. Without limiting
the foregoing, Distributor shall not affix any Mark or other Red Hat designation
to any product or service, or use the same, other than on or in connection with
the Red Hat Product. All Red Hat trademarks shall remain in their exact form,
and shall not be translated into any other language by Distributor.


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                                      -7-

         D. Distributor shall not indicate, state or imply that it has, or hold
itself out as having a corporate affiliation with Red Hat or any relationship
with Red Hat other than that set forth in this Agreement. In particular, but
without limitation, Distributor shall not create a web site or adopt a domain
name suggesting in any way that Distributor is a subsidiary or corporate
affiliate of Red Hat.

         E. Distributor acknowledges that the Marks are the exclusive property
of Red Hat, and that it will not assert any claim of ownership to the Marks, or
to the goodwill or reputation thereof, by virtue of Distributor's use of the
Marks, or otherwise. All use of the Marks by Distributor under this Agreement
shall inure solely to the benefit of Red Hat. Distributor will not take any
action in derogation of any of the rights of Red Hat in the Marks.

         F. Distributor shall not adopt or seek to register Red Hat's trademarks
(including, without limitation, the Marks) or any trademark, trade name, service
mark or domain name with any agency or administrative body anywhere in the world
which is confusingly similar to a Red Hat trademark or any translation thereof,
in any jurisdiction. Distributor further agrees that if it shall have obtained,
or if it obtains in the future, in any jurisdiction, any right, title or
interest in any mark, symbol, phrase or domain name which shall be identical to,
similar to or likely to be confused with any Mark, or any translation thereof,
then Distributor shall have acted or shall act as an agent and for the benefit
of Red Hat for the limited purpose of obtaining and assigning such registration
(and all right, title and interest in and to such mark, symbol, phrase or domain
name) to Red Hat. Distributor further agrees to execute any and all instruments
deemed by Red Hat to be necessary to transfer such registrations or such right,
title or interest to Red Hat. Distributor shall not challenge, or assist others
in challenging, the validity or ownership of any Marks.

         G. If Distributor becomes aware of any infringement, actual or
suspected, or any other unauthorized use of the Marks, it shall promptly give
notice to Red Hat in writing specifying the particulars of the unauthorized use.
Red Hat, at its sole discretion, shall take whatever action it deems advisable
in connection with the unauthorized use. Red Hat shall notify Distributor of
whatever action is taken, or if none is taken. If Red Hat decides to take action
of any kind against the unauthorized use, Red Hat shall have sole control of the
conduct of any such action. Red Hat shall bear the entire cost and expense
associated with the conduct of any such action, and any recovery or compensation
that may be awarded as a result of such action, including but not limited to any
settlement that may be reached, shall belong to Red Hat. Distributor, if
requested by Red Hat, shall cooperate fully with Red Hat, at Red Hat's expense,
in the conduct of any such action. Such cooperation shall not entitle
Distributor to any claim for recovery or compensation in respect thereof, and
all such recovery or compensation shall belong solely to Red Hat.

13.      CONFIDENTIALITY.

         Each party acknowledges that in the course of performance of its
obligations pursuant to this Agreement, it may obtain certain information
specifically marked as confidential or proprietary. Each party hereby agrees
that all such information communicated to it by the other



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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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                                      -8-

party, its parent, affiliates, subsidiaries, or Customers, whether before or
after the Effective Date, shall be and was received in strict confidence, shall
be used only for purposes of this Agreement, and shall not be disclosed without
the prior written consent of the other party, except as may be necessary by
reason of legal, accounting or regulatory requirements beyond either party's
reasonable control. The provisions of this Section shall survive termination or
expiration of this Agreement for any reason for a period of two (2) years after
said termination or expiration.

14.      EXPORT RESTRICTIONS.

         Distributor shall comply with all applicable laws, regulations and
legal requirements, including applicable United States export laws, regulations,
and legal requirements. Distributor acknowledges that the laws and regulations
of the United States may restrict the export and re-export of certain
commodities and technical data, including software, of United States origin.
Distributor agrees that it will not re-export the Software or any other
technical data received from Red Hat, or the direct product thereof, except as
permitted by the laws and regulations of the United States and the laws and
regulations of the jurisdiction in which Distributor obtained the Software or
other technical data. Red Hat agrees it will inform Distributor which Product is
not legally exportable, or clearly label such Product.

15.      TERM AND TERMINATION.

         A. The initial term of this Agreement shall be one year from the
Effective Date. Any renewal of this Agreement must be in a writing, signed by
both parties in order to be effective. Either party may terminate this
Agreement, with or without cause, upon giving the other party thirty (30) days
prior written notice. In the event that either party materially or repeatedly
defaults in the performance of any of its duties or obligations set forth in
this Agreement, and such default is not substantially cured within thirty (30)
days after written notice is given to the defaulting party specifying the
default, then the party not in default may, by giving written notice thereof to
the defaulting party, terminate this Agreement or the applicable purchase order
relating to such default as of the date specified in such notice of termination.

         B. Either party may immediately terminate this Agreement and any
purchase orders by giving written notice to the other party in the event of (i)
the liquidation or insolvency of the other party, (ii) the appointment of a
receiver or similar officer for the other party, (iii) an assignment by the
other party for the benefit of all or substantially all of its creditors, (iv)
entry by the other party into an agreement for the composition, extension, or
readjustment of all or substantially all of its obligations, or (v) the filing
of a petition in bankruptcy by or against a party under any bankruptcy or
debtors' law for its relief or reorganization which is not dismissed within
ninety (90) days.

         C. Termination or expiration of this Agreement shall not affect Red
Hat's right to be paid for undisputed invoices for Products already shipped and
accepted by Distributor or Distributor's rights to any credits or payments owed
or accrued to the date of termination or expiration. Distributor's rights to
credits upon termination or expiration shall include credits


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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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                                      -9-

against which Distributor would, but for termination or expiration, be required
under this Agreement to apply to future purchases.

         D. Upon termination or expiration of this Agreement, Distributor shall
discontinue holding itself out as a distributor of the Products.

         E. Upon the effective date of termination or expiration of this
Agreement for any reason, Red Hat agrees to repurchase, at Distributor's
costs, all Products in Distributor's inventory and Products which are
returned to Distributor by its Customers. Distributor agrees to use its best
efforts to return Products received from its customers within sixty (60) days
following the effective date of termination or expiration.

16.      MISCELLANEOUS.

         A. This Agreement (including the Attachments and Schedules) constitutes
the complete and exclusive understanding and agreement of the parties, and
supersedes all prior representations, warranties, agreements, negotiations,
discussions and communications, written or oral, between Distributor and Red
Hat, relating to the subject matter hereof. This Agreement may not be modified
or amended except in a writing executed by the duly authorized representatives
of the parties.

         B. Any notice under this Agreement shall be in English, in writing, and
shall be deemed to be given upon receipt. Notices to Red Hat shall be delivered
to Counsel, Red Hat Software, Inc., 2600 Meridian Parkway, Durham, NC 27713.
Notices to Distributor shall be delivered to Frank Kasper, Frank Kasper &
Associates, Inc. at 7351 Washington Avenue, South Edina, Minnesota 55439.

         C. Sections 5, 6, 7, 9, 10, 13, 15 and 16 shall survive the expiration
or termination of this Agreement.

         D. This Agreement shall be governed by and construed in accordance with
the laws of the state of the party against whom suit is commenced, without
regard to conflict of laws principles. The sole jurisdiction and venue for
actions arising out of the subject matter of this Agreement shall be the state
and federal courts of such state of the party against whom suit is commenced and
each of the parties to this Agreement hereby irrevocably submits to the personal
jurisdiction of such courts.

         E. Neither party shall be liable for its failure to perform any of its
obligations hereunder, including, but not limited to, delivery obligations,
during any period in which such failure of performance is caused by an act of
God; act of any federal, state, or local governmental authority; fire or flood;
strike or labor unrest; degradation of telecommunications service; degradation
of computer services not under the direct control of such party; or unusually
severe weather conditions. Delays in delivery due to events beyond either
party's reasonable control shall automatically extend the delivery and payment
date for a period equal to the duration of such events.


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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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                                      -10-

         F. The parties acknowledge that the United Nations Convention on
Contracts for the International Sale of Goods is specifically excluded from
application to this Agreement.

         G. If for any reason a court of competent jurisdiction finds any
provision of this Agreement, or portion thereof, to be unenforceable, that
provision of the Agreement shall be enforced to the maximum extent permissible
so as to effect the intent of the parties, and the remainder of this Agreement
shall continue in full force and effect.

         H. Headings in this Agreement are used for convenience of reference
only and shall not affect the interpretation of the provisions of this
Agreement.

         I. Failure or delay on the part of either party to exercise any right,
remedy, power or privilege hereunder will not operate as a waiver. In order to
be effective, a waiver must be in writing and signed by the party granting such
waiver.

         J. No provision of this Agreement is to be interpreted for or against
either party on the grounds that one party or the other, or their legal counsel,
drafted such provision.

         K. In the event that either party is merged with or consolidated into
another entity, or in the event that substantially all of the assets of either
party are sold or otherwise transferred to any other entity, the provisions of
this Agreement will be binding upon, and inure to the benefit of, such other
entity.

         L. Nothing in this Agreement shall be construed to make the parties
partners, joint venturers, representatives, or agents of each other, nor shall
either party so hold itself out.

         To show their assent, the duly authorized representatives of the
parties have signed this Agreement.

                                           RED HAT SOFTWARE, INC. ("Red Hat")

                                           /s/ Teresa Spangler
                                           ---------------------------------
                                           Signature

                                           Teresa Spangler
                                           ---------------------------------
                                           Name

                                           Business Unit Leader
                                           ---------------------------------
                                           Title

                                           April 30, 1999
                                           ---------------------------------
                                           Date


                                           FRANK KASPER & ASSOCIATES, INC,

                                           /s/ Frank Kasper
                                           ---------------------------------


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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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                                      -11-

                                           Signature

                                           Frank Kasper
                                           ---------------------------------
                                           Name

                                           President
                                           ---------------------------------
                                           Title

                                           April 30, 1999
                                           ---------------------------------
                                           Date


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RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>

                                                                Exhibit

RED HAT SOFTWARE, INC.
DISTRIBUTOR PRICE LIST
EFFECTIVE APRIL 26, 1999

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<CAPTION>
                                                                                         CLASS A      CLASS B     CLASS C
<S>                                <C>                                <C>              <C>          <C>          <C>
                                   Average Monthly Volume*                             [CONFIDENTIAL TREATMENT REQUESTED]**

<CAPTION>

PRODUCT CODE                                  DESCRIPTION                   UPC          CLASS A      CLASS B     CLASS C
<S>                                <C>                                <C>              <C>          <C>          <C>
RH6000                             Official Red Hat Linux 6.0/Intel   638347-50052-7       **           **          **
ARH6000                            Official Red Hat Linux 6.0/Alpha   638347-50055-8       **           **          **
SRH6000                            Official Red Hat Linux 6.0/SPARC   638347-50056-5       **           **          **
RH6300                             Red Hat Linux 6.0 EXTRA            638347-50067-1       **           **          **
PT2000                             PowerTools for Red Hat Linux 6.0   638347-50066-4       **           **          **
                                   Red Hat Linux 6.0 E-Commerce
WB2100                              Server                            June 28, 1999
EX1000                             Extreme Linux                      638347-99999-4       **           **          **
B2005                              Maximum RPM                        752063-11054-6       **           **          **

                                   System Builder Edition Red Hat
SBE6005                             Linux 6.0 (5-pack)                63847-50072-5        **           **          **
ESP1000                            10 Incident Support Pack           638347-50035-0       **           **          **
ESP2500                            25 Incident Support Pack           638347-50036-7       **           **          **
ESP3000G                           Gold Annual Support Subscription   638347-50037-4       **           **          **
                                   Platinum Annual Support
ESP3000P                            Subscription                      638347-50038-1       **           **          **
</TABLE>

*Average Monthly Volume defined as sales of Red Hat products to distributor's
customers


-------------
**[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>


RED HAT SOFTWARE, INC.
DISTRIBUTOR PRICE LIST
EFFECTIVE APRIL 26, 1999

<TABLE>
<CAPTION>
FOR CANADIAN RETAILERS/ RESELLERS ONLY
FOR SALE WITHIN CANADA                                                                   CLASS A      CLASS B     CLASS C
<S>                                <C>                                <C>              <C>          <C>          <C>
                                   Average Monthly Volume*                              [CONFIDENTIAL TREATMENT REQUESTED]**

<CAPTION>

PRODUCT CODE                                  DESCRIPTION                   UPC          CLASS A      CLASS B     CLASS C
<S>                                <C>                                <C>              <C>          <C>          <C>
CARH6000                           Official Red Hat Linux 6.0/Intel   638347-50079-4        **           **          **
CAARH6000                          Official Red Hat Linux 6.0/Alpha                         **           **          **
CASRH6000                          Official Red Hat Linux 6.0/SPARC                         **           **          **
CARH6300                           Red Hat Linux 6.0 EXTRA                                  **           **          **
CAPT2000                           PowerTools for Red Hat Linux 6.0                         **           **          **
                                   Red hat Linux 6.0 E-Commerce
CAWB2100                            Server
EX1000*                            Extreme Linux                      638347-99999-4        **           **          **
B2005*                             Maximum RPM                        752063-11054-6        **           **          **

CASBE6005                         System Builder Edition Red Hat
                                    Linux 6.0 (5-pack)
CAESP1000                         10 Incident Support Pack
CAESP2500                         25 Incident Support Pack
ESP3000G*                         Gold Annual Support Subscription   638347-50037-4         **           **          **
ESP3000P*                         Platinum Annual Support
                                    Subscription                     638347-50038-1         **           **          **
</TABLE>

* Canadian pricing does not apply to EX1000, B2005, ESP3000G, and ESP3000P.

-------------
**[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>

RED HAT SOFTWARE, INC.
DISTRIBUTOR PRICE LIST
EFFECTIVE APRIL 26, 1999
FOR COLLEGE/UNIVERSITY RETAILERS ONLY

<TABLE>
<CAPTION>

PRODUCT CODE                  DESCRIPTION                      UPC          CLASS A
<S>                <C>                                    <C>               <C>
EDRH6000           Official Red Hat Linux 6.0/Intel       638347-50080-0      **
EDARH6000          Official Red Hat Linux 6.0/Alpha                           **
EDSRH6000          Official Red Hat Linux 6.0/SPARC                           **
EDRH6300           Red Hat Linux 6.0 EXTRA                                    **
EDPT2000           PowerTools for Red Hat Linux 6.0                           **
EDWB2100           Red Hat Linux 6.0 E-Commerce Server                        **
</TABLE>

Incident Support Packages and Support Subscriptions available.
Please call for prices.

-------------
**[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.