Exhibit 10.32 Exhibit 10.32 SERVICES AGREEMENT THIS SERVICES AGREEMENT by and between Portola Packaging, Inc., a Delaware corporation ("Portola"), and Sand Hill Systems, Inc., a Delaware corporation ("Sand Hill"), is dated as of the1st day of July,...

Exhibit 10.32



Exhibit 10.32

SERVICES AGREEMENT


        THIS SERVICES AGREEMENT by and between Portola Packaging, Inc., a
Delaware corporation ("Portola"), and Sand Hill Systems, Inc., a Delaware
corporation ("Sand Hill"), is dated as of the1st day of July, 1999.

                             R E C I T A L S

        A. Sand Hill is a wholly-owned subsidiary of Portola.

        B. Portola  is providing and intends to continue to provide
certain services defined in Section 2 below (the "Services") in respect
of personnel, facilities and equipment to Sand Hill.

        C. Sand Hill wishes to receive these Services.

        D. The parties have previously agreed to have Sand Hill make
payment for the Services in the form of an unsecured Promissory Note.

        NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

                             A G R E E M E N T

         1. Term.   Portola shall provide Services to Sand Hill until the
date that the Services heretofore rendered and to be rendered have an
aggregate value of Three Million Five Hundred Thousand ($3,500,000).
This Agreement shall terminate, and Portola shall no longer be obligated
to provide Services, on the earlier of that date or March 31, 2000  (the
"Termination Date").  All Services heretofore or hereafter rendered shall
be valued by Portola in its sole discretion, provided such valuations
shall not be unreasonable under the circumstances.

         2. Services Provided.   The Services, as this term is used in this
Agreement have consisted and shall consist of the following as well as of
other services as the parties may agree in the future:

                2.1     Fully serviced office space at Portola's facilities
located at 850, 860 and 000 Xxxxxxxxx Xxxxx xx Xxx Xxxx, Xxxxxxxxxx, to
the extent available and not otherwise used by Portola for other
purposes.

                2.2     Administration services provided by senior executives of
Portola including, without limitation, Xxxx X. Xxxxx, Xxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxx, Xxxxxx Xxxx and Xxxx Xxxxxxxxx.

                2.3     General and administrative services such as the
following:

                    (i)    Preparation of periodic payroll, payroll tax
                           filings, W-2 preparation and all other services
                           relating to the handling of Sand Hill's payroll.
                    (ii)   General ledger processing and financial statement
                           reconciliation, including preparation of monthly
                           financial statements and other month-end,
                           quarter-end and year-end actions associated with
                           closing the books of Sand Hill for those periods.
                   (iii)   External audit assistance and data compilation.
                    (iv)   Budget analysis.
                     (v)   Services relating to human
                           resources matters, such as administering employee
                           health and workers' compensation claims (for both
                           those employees continuing to be employed by
                           Portola and those employed directly by Sand
                           Hill).
                     (vi)  Services in connection with
                           insurance matters, such as casualty, liability
                           and product liability claims, both for and
                           against Sand Hill.
                    (vii)  Miscellaneous matters such as
                           accounts payable processing, check preparation,
                           disbursements, travel and other expense advances
                           processing and control, cash deposit, handling
                           and application, bank liaison, management of
                           short term investments of cash, fixed asset
                           reporting and control, external audit assistance
                           and data compilation, compliance with
                           governmental reporting requirements, training,
                           safety and security and corporate communications.
                           In order that Portola may provide the accounting
                           services specified above, Sand Hill shall provide
                           Portola with all necessary backup documentation
                           on a monthly basis by not later than the fifth
                           day of each next succeeding month.

                2.4  Provision of full-time employees as set forth on Exhibit
"A" hereto (the "Sand Hill  Employees") and other employees as the
parties may later agree.

                2.5  Use of the computers, office furniture and other
equipment as set forth on Exhibit "B" hereto (the "Sand Hill Equipment").

                2.6  Access to Portola's telephone network.

                2.7  Access to Portola's internal e-mail system.

                2.8  Occasional use of Portola's other facilities and
equipment as reasonably necessary to execute Sand Hill's business plan.

                2.9  Legal services.

                2.10 Portola shall perform its obligations under this
Agreement in an efficient, professional and competent manner.  Portola
represents that it currently has and during the term of this Agreement
will continue to employ competent personnel who are capable of
performing, and willing and sufficient in number to perform, its
obligations hereunder.

        3 Payment.  The parties having agreed from the inception of
Portola's providing of Services that payment therefor shall be by
promissory note, Sand Hill hereby delivers to Portola its Promissory Note
substantially in the form of Exhibit "C" hereto, and Portola hereby
accepts said Note in payment for all Services.

        4. Miscellaneous.

                4.1  Governing Laws.  IT IS THE INTENTION OF THE PARTIES
HERETO THAT THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, U.S.A.
(IRRESPECTIVE OF ITS CHOICE OF LAW PRINCIPLES) SHALL GOVERN THE VALIDITY
OF THIS AGREEMENT, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION
AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO.  THE
PARTIES HEREBY EXCLUDE THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS FROM THIS AGREEMENT.

                4.2  Arbitration.  The parties agree that all disputes arising
under this Agreement shall be finally settled under the Commercial Rules
of Arbitration of the American Arbitration Association by a single
arbitrator appointed in accordance with said rules.  The award of any
such arbitrator may be entered and enforced in any court of competent
jurisdiction, including without limitation, the Federal District Court
for the Northern District of California or the Superior Court for the
County of Santa Clara, California.

                4.3  Other Provisions.  This Agreement is binding upon and
inures to the benefit of the successors and assigns of the parties
hereto.  This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof.  This
Agreement may only be amended or observance of any terms of this
Agreement may be waived only by a writing signed by the party to be bound
thereby.  Should suit or arbitration be brought to enforce or interpret
any part of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees to be fixed by the court or
arbitrator.  Nothing contained in this Agreement shall be deemed or
construed as creating a joint venture or a partnership between the
parties hereto.  Neither party shall have any power or authority to bind
or commit the other.

                4.4  Notices.  Whenever either party hereto desires or is
required to give any notice, demand or request with respect to this
Agreement, each such communication shall be in writing and shall be given
or made by telecopy, telegraph, cable, mail or other delivery and
telecopied, telegraphed, cabled, mailed or delivered to the intended
recipient at the addresses specified below:

If to Portola:                   Portola Packaging, Inc.
                                 000 Xxxxxxxxx Xxxxx
                                 Xxx Xxxx, Xxxxxxxxxx 00000
                                 Telecopy: (000) 000-0000
                                 Attn:  President


with a copy to :                 Xxxxxxxxxxxx X. Xxxxxx, Esq.
                                 Vice President and General Counsel of Portola
                                 000 Xxxx Xxxxxx, 00xx xxxxx
                                 Xxx Xxxxxxxxx, XX 00000
                                 Telecopy: (000) 000-0000


If to Sand Hill:                 Sand Hill Systems, Inc.
                                 0000 Xxxx Xxxx Xxxx, Xxxxx 000
                                 Xxxxx Xxxx, XX 00000
                                 Telecopy: (000) 000-0000


with a copty to:                 Xxxxxxx Xxxxxxxxx, Esq.
                                 Xxxxxxxxx Xxxxx Morosoli & Maser LLP
                                 000 Xxxx Xxxx Xxxx, 0xx Xxxxx
                                 Xxxx Xxxx, XX 00000
                                 Telecopy: (000) 000-0000

        Except as may be otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted
by telecopier with verified receipt by the receiving telecopier, when
delivered to the telegraph or cable office, when personally delivered,
two (2) days after being delivered to an air courier (e.g. DHL, or
Federal Express) upon proof of delivery, or, in the case of a mailed
notice, four (4) days after being deposited certified or registered mail,
postage prepaid.  Either party may change its address for such
communications by giving notice thereof to the other party in conformance
with this section.

        IN WITNESS WHEREOF, the parties hereto have made and entered into
this Agreement as of the day and year first below written.

PORTOLA PACKAGING, INC.


By:     /s/ Xxxxx Xxxxxx
        -------------------
        Xxxxx Xxxxxx,
        Chief Financial Officer

SAND HILL SYSTEMS, INC.


By:     /s/ Xxxx X. Xxxxx
        --------------------
        Xxxx X. Xxxxx, President and
        Chief Executive Officer