Reseller Agreement - Proxima Corp. and Miami Computer Supply Inc.
This is an Agreement ("Agreement") between Proxima Corporation ("Proxima"), a
Delaware corporation having its principal place of business at 9440 Carroll Park
Drive, San Diego, California 92121-2298, and Miami Computer Supply Inc.
("Buyer"), a Ohio corporation. This Agreement sets forth the general terms and
conditions between Proxima and Buyer for the purchase of products ("Product" or
"Products"). Terms and conditions specific to Buyer's classification are
delineated in Exhibit A. Applicable Products, pricing and discounts are
delineated in Exhibit B.
1. Term of Agreement. This Agreement is effective May 29, 1996, for a period of
one (1) year ("Term"), and shall renew for successive one (1) year Terms unless
either party provides notice to the other of an intent not to renew the
Agreement within thirty (30) days of expiration of a Term.
2. Appointment. Proxima grants to Buyer, and Buyer accepts, the non-exclusive
right to resell all Products offered during the Term of this Agreement. Proxima
reserves the right to appoint other resellers or to make direct sales to anyone
at any time without notice or liability.
(A) During the Term of this Agreement, Proxima agrees:
(1) To support the Products and efforts by Buyer to sell the Products.
Support may include, but is not limited to, sales leads generated through
Proxima's marketing activities.
(2) To provide, at the request and at no cost to Buyer, standard
advertising materials and reasonable training to Buyer's employees in the sale
and use of the Products.
(3) To notify Buyer of any new Products to be made available under this
(4) To use reasonable efforts to maintain sufficient Product inventory to
fill Buyer's orders as required. In the event a Product shortage occurs, Proxima
will allocate any available Product to Buyer in proportion to Buyer's percentage
of all like Buyer's purchases for that Product during the previous sixty (60)
(5) To provide Buyer with a monthly account statement listing all
outstanding invoices, payments made and credits issued since the date of the
(6) To provide Buyer a quarterly accounting of Sales Goal achievement,
rebate credits issued and Marketing Development Funds (MDF) accrued and
(B) During the Term of this Agreement, Buyer agrees:
(1) To list the Products in its catalogs and make the Products available to
(2) To advertise, promote and use Buyer's best efforts to sell the
(3) To make Buyer's facilities available and assist Proxima in providing
Product training and support.
(4) To provide Product technical assistance to its customers as it is
reasonably able to do so, and refer all other unresolved technical matters
directly to Proxima.
(5) To develop and implement an acceptable business and marketing plan for
the promotion and sale of the Products. Buyer and Proxima will review the plan,
as required, but no less than every six (6) months.
(6) To provide current financial information to Proxima every six (6)
(7) Not to submit orders for less than $150.00.
(8) To conduct its business in a way to maintain the highest quality
professionalism in all dealings with its customers. Buyer is responsible for
customer satisfaction and agrees to participate in customer satisfaction
programs developed by Proxima.
(9) To ensure that Buyer's compensation/incentive plans for its employees
who market Proxima Products are fair to Proxima in relation to Buyer's plans for
any competitive products Buyer markets.
(10) To furnish sales receipts to your customers upon delivery of products
specifying customer's name and address, machine model, and date of sale.
4. Price. Prices to Buyer are determined solely by Proxima and may be revised at
any time upon written notice to Buyer. The Product pricing established in
Exhibit B is exclusive of state and local use, sales and property taxes and
duties. Buyer is responsible for all taxes and duties incurred as a result of
the purchase of Products. All applicable taxes will be included on Buyer's
invoice unless Buyer provides Proxima with a valid reseller exemption
certificate for the applicable taxing jurisdiction. Buyer is free to establish
its own resale prices.
Proxima agrees to provide the same pricing and discounts to Buyer as to other
Resellers who buy the same Products in substantially the same amounts under
substantially similar terms and conditions, and who compete with Buyer.
5. Price Increase. Proxima will provide Buyer with a written notice thirty (30)
days prior to any price increase. Buyer may order any quantity of Product during
the notification period at the lower price, however, all Product on order or
ordered during the notification period which is scheduled for delivery more than
forty-five (45) days from the date of notification will be invoiced at the
6. Price Decrease. Price reductions will be applied to all Product on order, in
transit or purchased in the previous thirty (30) days and remaining in Buyer's
inventory on the effective date of the price decrease. Proxima will promptly
issue an account credit for the difference between the invoiced price and the
decreased price for units in inventory, or in transit. On order units will be
invoiced at the decreased price. Proxima reserves the right to physically verify
7. Product Revisions. Proxima reserves the right to modify, add or eliminate
Products which are available under this Agreement at any time on written notice
8. Delivery. Delivery occurs F.O.B. Proxima's warehouse in San Diego,
California, USA, and Buyer receives title upon delivery. In the absence of
carrier selection and shipment instructions from the Buyer, Proxima will make
all carrier selections. Buyer is responsible for all costs and expenses related
to Product delivery including, but not limited to, freight, taxes, duties,
insurance, and risk of loss.
Orders placed and scheduled for shipment at a net purchase price of $35,000 or
more, and shipped to the Buyer's location within the contiguous forty-eight
United States, will be shipped prepaid. In addition to normal freight charges, a
$50.00 special handling surcharge will be applied to each drop shipment location
other than the Buyer's normal address. Multiple drop shipment locations on one
order will receive a corresponding number of special handling surcharges.
9. Credit. Proxima may establish a line of credit (under the terms and
conditions of Proxima's Credit Application) which Buyer agrees not to exceed.
This line of credit may be changed or canceled at Proxima's sole discretion if
Buyer's financial condition changes during the Term of this Agreement or if
Buyer fails to comply with the payment terms herein.
10. Payment. Payment terms are cash in advance, or with approved credit, two
percent (2%) fifteen (15) days or next sixty (60) days from the date of invoice.
If Buyer does not comply with Proxima's payment terms, Proxima may declare Buyer
in default, terminate this Agreement at its option and pursue any or all of the
following remedies: (1) collect interest at the lower of the rate of one and
one-half percent (1-1/2%) per month or the maximum
interest under applicable law on all invoices older than thirty (30) days; (2)
declare all unpaid balances, including interest, immediately due and deny any
further credit; (3) repossess Products not paid for in full and remaining in the
possession of Buyer; (4) cancel any unshipped orders; or (5) any other remedies
available at law or in equity.
Proxima reserves a purchase money security interest in Products, and Buyer
grants Proxima a purchase money security interest in Buyer's proceeds from the
sale of, and account receivable for, Products until Proxima receives the amounts
due. Buyer agrees to sign an appropriate document (for example, a "UCC-1") to
permit Proxima to perfect its security interest.
11. Product Returns. All Products returns authorized below require a Proxima
issued Return Merchandise Authorization (RMA) number. Where applicable, upon
receipt of the Products at Proxima's warehouse, an account credit will be issued
for the full purchase price less any previously applied discounts or credits.
(A) Stock Balancing. Buyer may return current Product remaining in its inventory
at the end of each calendar quarter provided that: (i) Products are unused and
in the original, unopened packaging; (ii) Buyer pays all transportation charges
and bears risk of loss until Products are received at Proxima's warehouse; and
(iii) the total returns do not exceed fifteen percent (15%) of the previous
(B) Product Discontinuation. Within thirty (30) days after receipt of
notification of a Product discontinuation, Buyer may return all such unused
Product remaining in Buyer's inventory in their original, unopened packaging.
Discontinued Products are to be shipped F.O.B. Buyer's warehouse, freight
collect via the carrier of Proxima's choice.
(C) Defective Product. Buyer may return any Product found to be defective upon
delivery for full account credit provided the return is made within sixty (60)
days after original shipment. Warranty returns are to be shipped F.O.B. Buyer's
warehouse, freight collect via the carrier of Proxima's choice.
12. Rebate. Buyer may earn Rebate credits to its account based upon achievement
of Quarterly Sales Goals as described in Exhibit A.
13. Market Development Funds (MDF). In accordance with the Exhibit A, Buyer may
reclaim certain marketing and promotional expenditures relating to Proxima
Products provided that Buyer submits the advertisement or promotion to Proxima
for review and approval, and receives such approval in writing prior to its
initial release. Then, upon submittal of invoice copies for actual expenses
incurred, Buyer's account will be credited in the amounts and in the manner
specified in Exhibit A.
14. Special Promotions. Proxima may from time to time offer Buyer special
promotional pricing and/or Products. Promotional pricing is not considered a
price decrease. Buyer will comply with any specific terms and conditions
associated with the promotion.
15. Warranty. Proxima warrants that the Products will be free from defects in
material and workmanship, and will perform in accordance with their
specifications for a period of one (1) year from the date of purchase by the end
user customer, as evidenced by a sales receipt or invoice showing the date of
purchase. During the warranty period, Proxima, at its sole option, will repair
or replace defective parts or units at no charge.
Proxima will not be responsible for repair of damage resulting from: (1)
abnormal conditions such as accidents, fire or water; (2) negligent use or
misuse of the Products; (3) maintenance repairs, modifications or alterations
performed by any person other than an employee of Proxima; or (4) any cause
other than ordinary use.
16. Limitation of Liability. THE FOREGOING EXPRESS WRITTEN MANUFACTURER'S
WARRANTIES AND REMEDIES ARE EXCLUSIVE AND ARE IN LIEU OF ANY OTHER WARRANTIES OR
REMEDIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. PROXIMA SHALL IN NO EVENT
BE LIABLE TO BUYER, OR ANY THIRD PARTY, FOR ANY CONSEQUENTIAL, INDIRECT OR
INCIDENTAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF
BUSINESS OPPORTUNITY, LOSS OF GOODWILL, AND/OR INTERFERENCE WITH BUSINESS
RELATIONSHIPS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. PROXIMA SHALL
IN NO EVENT BE LIABLE FOR ANY DAMAGE TO OR FAILURE OF OTHER EQUIPMENT TO WHICH
THE PRODUCTS ARE CONNECTED. IN THE EVENT PROXIMA IS FOUND LIABLE FOR ANY DAMAGES
RELATING IN ANY WAY TO THIS AGREEMENT, PROXIMA'S MAXIMUM LIABILITY SHALL NOT
EXCEED THE GREATER OF $50,000 OR THE PRICE CHARGED TO BUYER FOR THE PRODUCT THAT
IS THE SUBJECT OF THE CLAIM.
17. Indemnification. If any third party claims that a Product infringes its
issued United States patent, Proxima will indemnify and hold Buyer harmless
against any damages, judgments, or settlements (including costs and reasonable
attorneys' fees) resulting from the claim, provided that Buyer promptly notifies
Proxima in writing of the claim, permits Proxima to take over the defense and
reasonably cooperates with Proxima in said defense. Proxima has the right to
select counsel and may settle the matter. If such a claim is made or appears
likely to be made relating to a Product in Buyer's inventory, Buyer agrees to
permit Proxima, at its option to: (1) substitute a comparable non-infringing
Product; (2) modify the Product to make it non-infringing; (3) obtain a right
for continued use or sale of the Product (all at Proxima's expense), or (4) if
the above are not reasonably available, buy back all such Products remaining in
their original unopened packaging at the original purchase price. If such
Products have been used, but are still in Buyer's possession, Proxima will buy
back all such Products at the original purchase price less depreciation. This
indemnification does not apply to claims resulting from modification of the
Products or claims resulting from combination of the Products with any other
devices. This provision sets forth Proxima's entire obligation to Buyer
regarding any claim of infringement.
In addition to any damages Buyer may be liable for under law and the terms of
this Agreement, Buyer will indemnify Proxima for claims by others made against
Proxima (particularly regarding statements, representations, or warranties not
authorized by Proxima) arising out of this Agreement or as a result of Buyer's
relations with anyone else.
18. Assignment. Proxima may assign its rights under this Agreement. Buyer may
not assign any rights or delegate any obligations under this Agreement, or
appoint any other agent to represent Buyer or to market the Products, without
Proxima's prior written consent. Any attempt to do so without prior written
consent is void.
Buyer agrees to provide Proxima with prompt written notice (unless otherwise
precluded by law) of any change, or anticipated change, in Buyer's financial
condition or business structure (for example, a material change in equity
ownership or management, or closing or relocation of a primary business
location). Such change or failure to give notice may result in termination of
19. Enforcement of Provisions. The failure on any occasion by either party to
enforce any provision of this Agreement will not prevent enforcement of that
provision on any other occasion.
20. Relationship of the Parties. Buyer is an independent contractor and has no
right or authority to bind Proxima or to assume or to create any obligation or
responsibility, express or implied on behalf of Proxima. Nothing in this
Agreement shall be construed as creating a partnership of the relationship of
principal and agent between Buyer and Proxima.
21. Termination of Agreement. Either party may terminate this Agreement without
cause or liability by giving ninety (90) days written notice to the other party.
Buyer agrees that Proxima's only obligation in the event it terminates this
Agreement is to provide the notice called for in this provision and Proxima is
not liable for any claims or losses if Proxima does so.
Except as otherwise provided, either party may terminate this Agreement without
liability in the event that the other party is in default of any obligation or
responsibility under this Agreement and such default continues unresolved for a
period of thirty (30) days after written notice or recurs at any time following
written notice and cure. Any default under this Agreement or Proxima's Credit
Application shall be deemed a default under both agreements.
This Agreement shall automatically terminate without notice in the event that
either party ceases conducting business in the normal course, becomes insolvent,
makes a general assignment for the benefit of creditors, suffers or permits the
appointment of a receiver for its business or assets, or avails itself of or
becomes subject to any proceeding under the Federal Bankruptcy Act or any other
federal or state statute relating to insolvency.
Upon termination or expiration of the Term, Buyer must immediately pay Proxima
all amounts due. Buyer may return any Product remaining in inventory under the
provisions of Section 11 of the Agreement. Proxima may offset any amounts due
Buyer, if any, against amounts due to
Proxima. Any terms of this Agreement which by their nature extend beyond
termination/expiration, remain in effect until fulfilled.
22. Force Majeure. Neither party will be liable to the other for delay in
performing any obligations under this Agreement, except the obligation to make
payments, due to circumstances beyond its reasonable control, including, but not
limited to, revolutions, insurrections, riots, wars, acts of enemies, national
emergency, strikes, floods, embargoes, inability to secure materials or
transportation, and acts of God or governmental authorities.
23. Notices. Any required or permitted notice will be deemed to have been given
when received in writing at the address of the party being given notice.
24. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California excluding its choice of law
25. Judicial Interpretation. Any provisions in this Agreement which are found to
be prohibited by law shall be ineffective to the extent of such prohibition
without invalidating the remaining provisions.
26. Causes of Action. Both parties will act in good faith to resolve disputes.
Neither party will bring legal action more than two years after the cause of
action arose. Any legal action will only be commenced in the State of
California, County of San Diego and Buyer hereby consents to personal
jurisdiction in said forum.
27. Compliance with Laws and Regulations. Both parties will comply with
applicable federal, state, and local laws, rules, regulations and executive
orders. Buyer will be responsible for obtaining all permits, licenses, or
certificates required by any regulatory body for the use or resale of the
28. Modifications. All modifications of this Agreement must be in writing and
signed by an authorized representative of each party.
29. Complete Agreement. This Agreement and its Exhibits contain the complete and
exclusive agreement between the parties and supersede all other prior or
contemporaneous written or oral communications between the parties relating to
the subject matter hereof.
The terms and conditions of each party's purchase orders, invoices,
acknowledgements/confirmations or similar documentation shall apply to any order
and any such terms and conditions shall be deemed objected to without need of
9440 Carroll Park Drive
San Diego, CA 92121-2298
A. MINIMUM DOLLAR VOLUMES
To qualify as a Proxima reseller, Buyer agrees to purchase a minimum of $500,000
in Proxima Products, net of discounts and credit during the Term of this
Reseller has the opportunity to earn rebates based on achievement of quarterly
net purchase goals outlined below:
QUARTERLY NET PURCHASE GOAL REBATE
$200,000 - 299,000 0.5
$300,000 - 399,999 1.0
$400,000 - 499,999 1.5
In the month following the end of each calendar quarter, Proxima will calculate
Buyer's rebate credit due for the quarter just ended. Proxima will promptly
issue a credit to Buyer's account. For purposes of calculating rebates, each
quarter is independent and no purchase dollars shall be cumulative one quarter
to the next. Orders containing discounts above those offered in Exhibit B will
not qualify for rebate credit.
C. MARKET DEVELOPMENT FUND (MDF)
Buyer may reclaim expenses incurred for certain marketing activities such as
advertising, promotions, trade shows, direct mail and other marketing needs
through the use of MDF credits. Buyer may also at its sole discretion, use MDF
credits to purchase marketing programs that may be developed by Proxima from
time to time and made available to the Buyer. MDF up to a maximum of $10,000 is
available as follows:
1. MDF credits are accumulated for Buyer based upon Buyer's net shipments
multiplied by a factor of two (2%) percent.
2. All MDF credits are held by Proxima until the sooner of (i) a claim,
approved by Proxima, is processed, or (ii) termination/expiration of the
Agreement in which event unused credits will be forfeited by Buyer. In the event
the Agreement is renewed for another Term, unused credits from the prior Term do
not carry over.
3. Buyer may request Proxima to apply MDF credits to Buyer's account
A. The request is within sixty (60) days of the event;
B. Buyer contributes fifty (50%) percent of event cost; and
C. Buyer has submitted a request and received, in writing, from
Proxima, notification that the event meets Proxima qualifications
for MDF, prior to the event date; and
D. Buyer has submitted final invoice copies as proof of event, and
other information as requested by Proxima Marketing after the
4. Orders containing discounts above those offered in Exhibit B will not be
included in calculating Buyer's MDF credits.
5. In the following month, Proxima will calculate and apply buyer's MDF
credits and notify Buyer of remaining MDF availability.
6. Proxima reserves that absolute right to determine the suitability and/or
eligibility of any expenditure for reimbursement in accordance with Proxima
Marketing Department Guidelines and Section 13 of the Agreement.
7. Proxima reserves the right to change the requirements for or discontinue
the availability of MDF upon thirty (30) days written notice.
D. DEMONSTRATION HARDWARE
From time to time, Proxima may offer the Buyer demonstration equipment under
special program terms. If Buyer takes advantage of Proxima's demonstration
program terms, Buyer must retain possession of the demonstration equipment for
at least six (6) months after it has made payment to Proxima for the equipment.
Failure to do so is cause of termination of this Agreement.