Exhibit 10.4
MARKETING RIGHTS AND SUPPLY AGREEMENT ("AGREEMENT")
THIS AGREEMENT made this 14, day of Jan, 2000 by and between DOCUPORT,
INC., a Delaware corporation with offices at 00 Xxx Xxxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("DPI") and THOMSON CONSUMER ELECTRONICS, INC., a Delaware
Corporation with offices at 00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
00000 ("Thomson").
RECITALS
WHEREAS, DPI has developed a "portable" multi-functional office machine
capable of functioning as a fax machine, scanner, printer, copier and fax and
data modem;
WHEREAS, DPI holds patents with respect to certain technologies and
components embodied in the "portable" multi functional office machine and has
acquired certain rights in trademarks related to it;
WHEREAS, DPI is interested in granting to Thomson the exclusive right to
market the "portable" multi functional office machine in the United States and
Canada only and supplying Thomson with DPI units on the terms proposed herein;
WHEREAS, the parties have heretofore entered into a Memorandum of
Understanding concerning a proposed marketing and supply agreement; and
WHEREAS, the parties do now desire to enter into a binding Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter contained, the parties hereby agree to enter this Agreement.
All of the above Recitals are deemed to be part of this Agreement as
though set forth at length in the text of this Agreement.
Section 1: Grant and Appointment
1.1 Grant. DPI hereby grants to Thomson the exclusive right to
promote, market and sell the portable "Multi Functional Office
Machine" and any upgrades or replacement models (the "Product")
in the United States and Canada only (the "Territory") for
sales to retailers and other resellers as identified on Exhibit
1.1, attached hereto. This grant shall in no way be construed
to limit DPI marketing and sales rights outside of the
Territory. Thomson may, in addition negotiate the right to
manufacture, and to have manufactured, Product both inside and
outside the United States pursuant to Section 4.1 below.
1.2 Consent. During the term of this Agreement, except as otherwise
provided in Section 1.1, DPI shall not itself, nor shall it
license or authorize any other marketing representative,
distributor, retailer or other person to, promote, market or
sell the Product or any similar product within the Territory
without the express written consent of Thomson.
1.3 Term. Subject in each case to the provisions of Section 12,
this Agreement shall commence on the date set forth above and
shall continue in effect until December 31, 2003 (the "Initial
Term"); thereafter, this Agreement shall be renewable at
Thomson's election, by written notice from Thomson to DPI not
less than one hundred eighty (180)) days prior to the end of
any term of this Agreement, for additional three (3) year
terms, provided that Thomson has met the minimum purchase
requirements set forth in Section 2.5 and has otherwise
complied in all material respects with the terms and provisions
of this Agreement.
Section 2; Rights and Duties of Thomson
2.1 Best Efforts. Thomson shall use commercially reasonable efforts
to promote, market and sell the product in the Territory.
Thomson shall maintain adequate facilities and personnel
necessary to accomplish the purpose of this Agreement, and
shall maintain sufficient inventory and stock of the Product
for anticipated sales, timely delivery and sales
demonstrations.
2.2 Employee and Agents. Thomson shall be solely responsible for
the conduct and representations of any of its employees or
agents in connection with its efforts to promote, market and
sell the Product. Thomson's employees and agents shall have no
claims against DPI for commissions, salary, reimbursement or
for any other claim of any kind whatsoever.
2.3 Modification of Project. Thomson shall not modify the Product
in any function without the express written permission of DPI.
Such permission will not be unreasonably withheld and all such
modifications will be done jointly.
2.4 Records and Information. Thomson shall maintain and furnish to
DPI upon its request on a quarterly basis (i) records relating
to sales of the Product by Thomson in the Territory, which
shall be certified by an officer of Thomson and (ii) any other
information relating to market conditions in the Territory,
technical or marketing problems or opportunities related to the
Product in the Territory and customer complaints, comments and
suggestions.
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2.5 Minimum Purchases. Thomson will use commercially reasonable
efforts to purchase and sell the following quantity of
Products:
From the first day of shipping until the end of calendar year,
8666 units per month 2nd Year - 75,000 units 3rd Year - 100,000
units
Note: 1st year volume is based upon an anticipated production
in the June-July 2000 timeframe.
Should Thomson not meet or exceed these quantities, all
exclusive rights under this Agreement may be terminated by DPI
at its sole discretion.
2.6 Marketing Expenses and Responsibilities. Thomson shall bear all
costs and expenses it incurs in promoting, marketing and
selling the Product in the Territory. This also includes
tooling expense should Thomson wish to manufacture. Thomson
shall be responsible for customer service, warranty repair and
service, customer and retailer returns and all other support
functions of supporting marketing channels in the Territory.
2.7 Compliance with Law. Thomson shall at all times conduct its
efforts hereunder in strict accordance with all applicable
federal, state and local laws and regulations and in accordance
with the highest commercial standards.
Section 3: Rights and Duties of DPI
3.1 Product Supply. Subject to the provisions set forth in Section
4 or elsewhere in this Agreement, DPI shall during the Initial
Term use commercially reasonable efforts to cause its
manufacturer to supply DPI with sufficient quantities of
Products for DPI to meet Thomson's minimum annual requirements
set forth in Section 2.5 and DPI shall deliver Product to
Thomson in accordance with scheduled delivery dates. All
Product shall meet DPI's specifications, attached hereto or as
subsequently agreed upon by the parties.
3.2 Documentation. DPI shall provide Thomson with such assistance
as Thomson may reasonably request in connection with its
preparation of documentation relating to the Product such as,
but not limited to, safety data.
3.3 Technical Information. DPI shall provide all technical
information and repair instructions reasonably necessary to
assist Thomson in promoting, marketing, selling and repairing
the Product.
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3.4 Compliance with Law. DPI shall at all times conduct its efforts
hereunder, and shall ensure that the Product shall be, in
strict accordance with all applicable federal, state and local
laws and regulations and in accordance with the highest
commercial standards.
3.5 Replacement Product. Unless Thomson elects to designate a third
party manufacturer or to manufacture the Product itself under
Section 4.1 below, DPI shall provide to Thomson the
opportunity, upon expiration or termination of this Agreement,
to purchase such quantities of Products from DPI as Thomson
reasonably anticipates may be required to replace defective
Products for a period of seven (7) years after expiration of
this Agreement.
3.6 Thomson Trademarks. DPI shall apply Thomson trademarks and
logos to the Product and packaging in accordance with Thomson
specifications, all as reasonably acceptable to DPI.
3.7 Recalls. If at any time a government agency orders Thomson to
conduct a product safety recall or a field fix program with
respect to the Product, or Thomson undertakes, with DPI's
consent, not to be unreasonably withheld, a product safety
recall or field fix program, Thomson will notify DPI within
thirty (30) days. DPI shall (1) repair or replace defective
Product units or, at Thomson's option, credit Thomson's
account, and (2) reimburse Thomson for Thomson's documented
reasonable and necessary expenses, including labor, materials
and shipping expenses, in conducting such product safety recall
or field fix program.
Section 4: Product Manufacturer.
4.1 Selection of Manufacturer. Until the completion of the initial
term, the Product shall be manufactured by DPI's contract
manufacturer, or by such other third party manufacturer as may
be mutually acceptable to DPI and Thomson. From and after the
completion of the Initial Term, Thomson may in its discretion
designate a third party manufacturer for the Product or may
manufacture the Product on its own behalf. In addition, from
and after the completion of the Initial Term, at the request of
DPI, Thomson shall make the election referred to in the
immediately preceding sentence. In either event DPI shall use
its best efforts to facilitate an efficient transfer of the
manufacturing capability to such third party manufacturer or to
Thomson, as the case may be. The parties shall at that time
negotiate a mutually acceptable nonexclusive license of DPI's
intellectual property rights related to the Products necessary
for Thomson to manufacture or to have manufactured for it the
Products.
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4.2 Product Orders. Thomson shall order Product from time to time
by issuing a firm purchase order not less than ninety (90) days
in advance of the date that Thomson requires delivery of such
Product in accordance with Section 4.3 hereof. DPI shall
utilize the Thomson purchase orders as the basis for issuing
purchase orders to its manufacturer. Thomson shall issue to DPI
its forecast of Product purchases on a rolling six (6) month
basis, but such forecasts shall be estimates only and not
binding purchase commitments.
4.3 Title and Risk of Loss. Title and risk of loss with respect to
the Products shall pass to Thomson when the Products are
delivered to a carrier designated by Thomson.
4.4 Product Specifications. DPI and Thomson shall cooperate in all
reasonable respects with respect to the oversight and
instruction of any third party manufacturer of the Product.
Such third party manufacturer of the Product shall use the DPI
specifications attached hereto as such specifications may be
amended or supplemented from time to time. DPI shall provide
Thomson with the specifications and such other information
relating thereto as Thomson may reasonably request. DPI shall
[ILLEGIBLE] in advance, with Thomson prior to changing the
specifications, and in connection therewith Thomson shall have
the right to request changes to the specifications, with such
changes to be made with DPI's consent, which shall not be
unreasonably withheld.
Section 5: Patents, Trademarks or Trade Names
5.1 Third Party Infringement. DPI will use commercially reasonable
efforts to prevent third parties from marketing and/or selling
in the Territory products incorporating or infringing DPI
patents.
5.2 Trademarks. Product shall bear the "DPI Technologies" logo in a
type size equal to the Federal Communications Commission
listing information set forth on the Products. Thomson shall
have the exclusive right to use the DPI trademark and logo
during the term of this Agreement on the Product and to
advertise and promote the Product, except for DPI's use outside
the Territory. Thomson shall have the right to utilize the
"DPT", trademark in conjunction with other xxxx names owned or
licensed by Thomson except to be extent any such utilization
would violate any agreement under which Thomson licenses any
such brand names. Except as set forth in the preceding
sentences, without the express written consent of DPI, Thomson
may not use any DPI xxxx, trademark or tradenames. Any use of
or reference to any DPI xxxx, trademark or trade name by
Thomson shall inure solely to the benefit of DPI. Thomson shall
not apply for, maintain or acquire any United States or foreign
trademark relating to
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the marketing or sale of the Product without the express
written consent of DPI which may be granted or withheld in
DPI's sole discretion. Thomson shall use commercially
reasonable efforts to inform DPI of any known infringement by
third parties of any DPI xxxx, trademark or trade name used by
Thomson pursuant to this Agreement. Upon the expiration or
termination of this Agreement, Thomson shall immediately cease
all and any use of all DPI marks, trademarks or trade names,
except that Thomson may continue to xxx such marks, trademarks
or trade names solely in connection with the sale of Product in
Thomson's inventory at the time of such cancellation. Nothing
contained herein shall be construed in anyway to permit DPI to
use any of Thomson marks, trademark or trade name.
5.3 Patents. Except as contemplated in Section 4.1 above, nothing
in this Agreement grants to either party any rights or licenses
under the other party's patents.
Section 6: Pricing and Costs.
6.1 Price. DPI shall sell the Product to Thomson and Thomson shall
purchase the Product from DPI, at a price set equal to the net
price charged by DPI's manufacturer to DPI plus $45.00. DPI
shall allow Thomson reasonable access to its records to verify
such net price.
6.2 Costs. Thomson shall pay all transportation and freight costs
for the Products from DPI's third party manufacturer's location
and shall specify a carrier for shipment. If no carrier is
specified, DPI shall make reasonable arrangements at Thomson's
expense for shipment. All costs for insurance, handling,
special packaging or similar charges and all sales, use, excise
and other similar federal, state and local taxes and tariffs
also shall be borne by Thomson.
Section 7: Payment Terms.
7.1 Terms. Thomson shall pay all sales invoices for Products
purchased by Thomson within thirty (30) calendar days from date
of delivery to Thomson (FOB DPI's manufacturer).
Section 8: Incoming Inspection.
8.1 Incoming Inspection. Thomson shall have the right to inspect
Product after delivery and in the event that more than five
percent (5%) of a shipment of Product is defective or
non-confirming, Thomson shall have the right to reject and
return the entire shipment.
Section 9: Warranty and Limitation of Liability.
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9.1 General. DPI warrants that each unit of Product will meet DPI's
specifications and will be free from defects in design,
material and workmanship for a period of one (1) year after
receipt by Thomson in Thomson's warehouse of such units. This
warranty does not extend to Thomson supplied components.
9.2 Failure to Comply with Warranty. Upon failure of any unit of
Product to comply with the above warranty, DPI will, at its
option, promptly repair or replace such unit of, if unable to
repair it, promptly refund in cash to Thomson the amount paid
by Thomson for such unit.
THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EITHER EXPRESSED OR
IMPLIED INCLUDED, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
Section 10: Confidentiality
10.1 Confidentiality. Each of the parties has heretofore and may
from time to time hereinafter disclose confidential information
to the other party. Each party agrees to treat confidentially
all notes, analyses, compilations, studies or other documents,
whether prepared by the other party or others, provided to it
and clearly marked "Confidential" (collectively, the
"Information"). The term "Information" does not include
information which (i) becomes generally available to the public
other than as a result of a disclosure in breach of this
Agreement, (ii) was available to a party on a non-confidential
basis prior to its disclosure by the other party, its
representatives or its agents or (iii) becomes available to a
party on a non-confidential basis from a source other than the
other party, its representatives or its agents, provided that
the source is not (A) bound by a confidentiality agreement
prohibiting disclosure of such information or (B) otherwise
prohibited from transmitting the information by a contractual,
legal or fiduciary obligation.
10.2 Disclosure to Representatives. It is understood that each
party may disclose any of the Information to those of its
representatives (including, without limitation, contract
manufacturers) who require such Information for the purpose of
fulfilling such party's obligations under this Agreement
(provided that such representatives shall be informed of the
confidential nature of the Information and shall execute a
similar confidentiality obligation). Each party agrees that the
Information will be kept confidential by such party and its
representatives and, except with the specific prior written
approval of the other party or as expressly otherwise permitted
by the terms hereof, will not be disclosed by such party or its
representatives. Each party further agrees that it and its
representatives
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will not use any of the Information of the other party, in any
manner that infringes the propriety rights or intellectual
property of the other party or for any reason or purpose other
than to fulfill such party's obligations under this Agreement.
10.3 Protective Order. In the event that a party or any of its
representatives is requested or required (by oral questions,
interrogatories, requests for Information or documents,
subpoena, civil investigative demand or similar process) to
disclose any of the Information, it is agreed that such party
or its representative, as the case may be, will provide the
other party with prompt notice of such requests) so that the
other party may seek an appropriate protective order or other
appropriated remedy and/or waive compliance with the provisions
hereof. In the event that such protective order or other remedy
is not obtained, or that such a waiver is granted hereunder,
the party or its representative may furnish that portion (and
only that portion) of the Information which it is legally
compelled to disclose and will exercise its best efforts to
obtain reliable assurance that confidential treatment will be
accorded any Information so furnished.
10.4 Continuing Obligations. The provisions of this Section 10
shall survive the termination of this Agreement for a period of
five (5) years.
Section 11: Indemnification
DPI shall defend, indemnify and hold harmless Thomson and Thomson's
customers for any loss, damage, expense or liability that may result
by reason of any infringement or claim that the Product infringes
any patent, trademark copyright, or any other proprietary right of
any third party. Thomson shall notify DPI promptly of any claim of
infringement and shall cooperate with DPI in every reasonable way to
facilitate defense of any such claim.
Should any Product furnished to Thomson hereunder or in orders
placed hereunder become the subject of a claim of such infringement,
DPI shall, at its expense, and at Thomson's option, either procure
for Thomson the right to continue using the Product, replace or
modify the same so that it becomes noninfringing, or refund to
Thomson the full purchase price of the infringing items.
Section 12: Termination
This Agreement may be terminated under the following circumstances:
(i) at the election of either party, immediately upon bankruptcy,
insolvency, assignment for benefit of creditors, or
appointment of a receiver for the business or assets of the
other party; or
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(ii) at the election of either party, immediately upon the other
party's failure to cure a material breach of any of the terms
of this Agreement within thirty (30) days after written notice
thereof by; or
(iii) at the election of Thomson in the event that competitor of
Thomson's acquires a financial interest in DPI and as a result
receives access from or through DPI to Thomson Information as
defined in paragraph 10.1 above.
Section 13: Assignment
This Agreement may not be assigned or otherwise transferred by
either party without the express written consent of the other party.
Section 14: Headings Not Controlling
Headings used in this Agreement are for reference purposes only,
shall not be deemed a part of this Agreement and in no way define,
limit, augment, extend or describe the scope, content or intent of
any part or parts of this Agreement.
Section 15: Entire Agreement
The parties agree that this Agreement constitutes the entire
Agreement between the parties pertaining to the subject matter
hereof and supersedes all prior agreements and understandings
pertaining thereto.
Section 16: Severability
If any provision or provisions of this Agreement are declared
invalid, illegal or unenforceable, such declaration shall not affect
or impair the validity, legality and enforceability of the remaining
provisions of this Agreement.
Section 17: Modification of Terms
No modification of this Agreement shall be effective unless it is in
writing and properly executed by both parties.
Section 18: Waiver
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to
exercise any right or remedy upon a breach thereof shall constitute
a waiver of any such breach or of any other covenant, agreement,
term or condition. Any party may, by notice delivered in the manner
provided in this Agreement, but shall be under no obligation to,
waive any of its rights or any conditions to its obligations
hereunder, or any duty, obligation or covenant of any other party.
No waiver shall affect or alter the
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remainder of this Agreement, but each and every other covenant,
agreement, term and condition hereof shall continue in full force
and effect with respect to any other then existing or subsequently
occurring breach.
Section 19: Relationship of the Parties
DPI and Thomson are independent entities engaged in independent
businesses and, except as provided herein, each shall bear all costs
and expenses incurred in the performance of their respective duties
under this Agreement. Nothing in this Agreement is intended to
create a partnership or joint venture between the parties. Neither
DPI nor Thomson nor any agent or employee of either shall be
regarded as an agent or employee of the other, and nothing herein
shall be construed as reserving to any party the right to control
the other. Neither party to this Agreement shall have the right or
authority to make any promise, guarantee, warranty or
representation, or to assume, create or incur any liability or other
obligation of any kind, express or implied, against, or in the name
of, or on behalf of, the other.
Section 20: Force Majeure
Neither party hereto will be liable for any failure to perform any
obligation under this Agreement, or for delay in such performance,
to the extent such failure to perform or delay is caused by
circumstances beyond its reasonable control, including without
limitation fire, storm, flood, earthquake, explosion, accident, war,
acts of a public enemy or rebellion, insurrection, sabotage,
epidemic, quarantine restriction, labor disputes, labor shortages,
transportation embargoes, delays in transportation, shortages of
material, fuels or power, acts of God, acts of any government or any
agency thereof, and judicial action. Any suspension of performance
by reason of this Section 20 will be limited to the period during
which the cause exists.
Section 21: Certain Rights of First Refusal
In the event DPI develops after the date hereof any new product or
further development with respect to the Products or any original
equipment manufacturing application with respect to the Product, DPI
shall, as soon as practicable after the development of a prototype
thereof, notify Thomson of such new product or development
(collectively the "New Product"). Upon the execution of a mutually
satisfactory confidentiality agreement with respect to such New
Product DPI shall provide all appropriate information about such New
Product to Thomson. On or before the nineteth (90th) day after DPI
notifies Thomson of the existence of a New Product, Thomson shall
indicate in writing whether it desire to market such New Product in
the Territory. If Thomson so desires to market the New Product, DPI
and Thomson agree to negotiate in good faith an agreement governing
the terms and conditions under which Thomson
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would have the marketing rights to the New Product (the "New Product
Agreement). The New Product Agreement shall be substantially similar
to this Agreement with such changes as may be necessary to reflect
the specific terms of the agreement, including without limitation
minimum purchases, pricing and costs and other factors particular to
the New Product.
Section 22: Notice
All notices under this Agreement shall be deemed to have been duly
given when delivered, if delivered by hand, or three (3) days after
posting, if sent by registered first class mail, return receipt
requested and postage prepaid, in either case at the following
stated addresses:
DPI:
DocuPort
00 Xxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx, President and CEO
With a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxxx Xxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Thomson:
Thomson Consumer Electronics, Inc.
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Manager - Accessories Business
With a copy to:
Thomson Consumer Electronics, Inc.
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Legal Operation
A party may, by giving three (3) business days written notice to the
other party hereto, designate another address in substitution of the
foregoing address to which such notice shall be given.
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Section 23: Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to choice of law
rules. Venue over any litigation arising under or related to this
Agreement shall exclusively be in the State of New Jersey.
Section 24: Facsimile
The parties agree that any documentation, other than notices under
this Agreement, that must be submitted by one party to the other for
approval, information or review my be transmitted by facsimile
unless specifically requested otherwise by the receiving party.
Section 25: Counterparts
This Agreement shall be executed simultaneously in two (2)
counterparts, each of which shall be deemed an original and each of
which shall constitute the same instrument for purposes of
evidencing this Agreement.
Section 26: Binding on Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, executors, administrators,
successors, legal representatives and permitted assigns.
Section 27: Authorization
Each individual executing this Agreement does hereby represent and
warrant to each other person so signing (and each other entity for
which another person may be signing) that he or she has been duly
authorized to execute this Agreement in the capacity and for the
entity set forth where he or she signs.
This Agreement, including all of the Recitals as though set forth in the
text of the Agreement, constitutes the entire agreement and understanding
between the parties concerning
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the subject matter hereof and supersedes and replaces all prior negotiations,
discussions and agreement proposed or otherwise, whether written or oral,
concerning the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first mentioned above.
DOCUPORT, INC. THOMSON CONSUMER
ELECTRONICS, INC.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
-------------------------------- -------------------------------------
Title: President/CEO Title: MANAGER, PRODUCT DEVELOPMENT
Date: 1/20/2000 Date: 1-14-2000
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Product Specifications
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Exhibit 1.1
Thomson Account Base
All U.S. and Canadian Retailers
Direct Internet Sales
Shopping Network Sales
Distributors
All Military Service Clubs
Warehouse Clubs
Catalog Merchants
Internet Resellers
DocuPort Account Base
All Corporate/Commercial Sales
Local, State and Federal Government Sales
All OEM Personal Computer Direct Sellers, i.e., Dell, Gateway
College and University Book Stores
VARS
Airline Catalog Sales
At Home Resellers, i.e., Amway
