Exhibit 10.5
INNOTRAC
CORPORATION
FULFILLMENT SERVICES
AGREEMENT
This Fulfillment Services Agreement
(this “Agreement”) is made this 9th day of July, 2008
(the “Agreement Date”) by and between the following
parties:
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“Innotrac”:
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Innotrac
Corporation, a Georgia corporation
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6655 Sugarloaf
Parkway
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Duluth, Georgia
30097-4916
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Attn: George
Hare, CFO
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Fax::
678.475.4020
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Phone:
678.584.4234
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Email:
ghare@innotrac.com
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and
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“Client”:
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Dynamic
Response Group, inc., a Florida Corporation
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4770 Biscayne
Blvd. Suite 1400
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Miami, Florida
33137
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Attn: Melissa
Rice, CEO
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Fax:
305.576.6997
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Phone:
305.576.6889
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Email:
mkrice@drgemail.corn
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For services (defined below) to
commence on the “Go-Live Date” (as defined herein) and
continue thereafter for three (3) years (the “Initial
Term”), unless terminated earlier as provided hereunder. For
purposes of this Agreement, the Go-Live Date shall be the first
shipment to a bona fide customer in the regular course of business.
The Go-Live Date for the first Product to go live shall be the
“Commencement Date” as used herein.
RECITALS
A. Innotrac is a provider of
fulfillment, customer care and technology services from various
locations in the United States;
B. Client is a manufacturer or
seller of certain goods and products that it intends to market in
geographic areas served by Innotrac; and
C. Client desires to purchase, and
Innotrac desires to furnish, certain of Innotrac’s services
in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE,
in consideration of the mutual
covenants and agreements set forth below, and other good and
valuable consideration, the adequacy and receipt of all such
consideration being hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
Services and
Prices
Section 1.1. Scope of
Services.
On the Agreement Date, Innotrac
agrees to commence preparation to provide to Client the services,
as identified in Exhibit A, mutually agreed to by the parties (the
“Services”) with respect to Client’s products
(the “Products” or “Product”) in a manner
to fulfill the Client’s requirements. Exhibit A
includes pricing and associated fees and shall be incorporated and
made part of this Agreement
Innotrac will promptly advise Client in writing
at any time that Innotrac believes modifications to the Services
are needed to achieve such results, and if such modifications are
material, the parties may agree on a change in the Services in
accordance with this Section 1.1. If Client desires to
purchase services in addition to the Services or add products in
addition to the Products or modify the Services, Client shall
submit a written request for such changes to Innotrac, and Innotrac
will then prepare a document (a “Change Order”)
outlining the scope of additional work and describing the
particular additional services to be purchased by Client and
provided by Innotrac, together with pricing for the additional
services, and time lines for design, development and delivery, as
applicable. If and when the parties execute a mutually agreed upon
Change Order, it will become part of this Agreement and the
additional services and/or products described in therein shall
thereafter be included in the Services and the Products covered by
this Agreement. Unless and until the parties execute the Change
Order, however, Innotrac shall have no duty to furnish the
additional services or handle any additional products (and Client
shall have no obligation to pay for the additional services if
those additional services were not performed).
Section 2.1 Prices
.
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(a)
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Client agrees
to pay for the Services furnished by Innotrac at the rates set
forth in Exhibit A and referred to herein as the
“Prices.” Subject to Section 1.2(b) below with
regard to the amount of a Price increase, Innotrac may increase the
Prices once, twelve (12) months after the Commencement Date,
and thereafter may subsequently increase the Prices annually at the
beginning of each Renewal Term (as defined in Section 6.1
below) by giving prior written notice of such increase in Prices
(an “Adjustment Notice”) to Client at least ninety
(90) calendar days prior to the commencement of the twelve
(12) month period for which such increase in Prices shall be
effective. Annually, Innotrac may not exceed a 5% price
increase.
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(b)
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In addition to
any Price increases pursuant to Section 1.2(a), beginning with
the first 12-month period after the Commencement Date, Innotrac
shall annually increase the Prices by the lesser of (i) three
(3%) percent and, (ii) the increase in CPI-W for each
Adjustment Notice. For purposes of this Agreement,
“CPI-W” shall mean the official Consumer Price Index
for Urban Wage Earners and Clerical Worker, U.S. City Average, All
Items 1982-84 (U.S. Department of Labor).
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(c)
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Notwithstanding
anything to the contrary contained herein, Innotrac may increase
Prices for postage, freight, other shipping services, or telephone
service upon prior written notice to Client. In the event that
Innotrac’s third party vendors increase the rates charged to
Innotrac, Innotrac shall provide notice of such increase to Client
and such increase will be effective at the time the increase is
imposed upon Innotrac. Additionally, if Innotrac allocates the cost
of the service provided by such vendor to multiple customers (e.g.,
the service comprises part of “overhead”), such notice
of increased third party vendor rates shall be accompanied by a
reasonably detailed description of the basis on which Innotrac is
allocating the increased rates among its customers. If the revised
third party vendor prices are unacceptable to Client, Client shall
stipulate to Innotrac, in writing, an alternate third party vendor
source to be used for Client. Innotrac shall use best efforts to
use the services of third party vendors selected by Client. If
Innotrac is unable for any reason whatsoever to engage such third
party vendor, Innotrac shall have the discretion to engage a third
party vendor of its choice. Any increase in costs for the services
in this Section 1.2(c) provided by third party vendors
selected by Client shall be borne by Client.
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ARTICLE II
Innotrac’s Representations
and Responsibilities
Section 2.1. Corporate Power
and Authority.
Innotrac represents that it is a
corporation duly organized and existing under the laws of the State
of Georgia with lawful power and authority to enter into this
Agreement, and is duly qualified and in good standing and is
authorized to do business in each jurisdiction where such
qualification is required. This Agreement has been duly executed,
by an Innotrac corporate officer having full power and authority to
bind Innotrac.
Section 2.2.
Performance .
Innotrac will perform the Services
on a timely basis and in accordance with the terms of this
Agreement, subject to Client’s satisfactory compliance with
all of its precedent obligations hereunder.
Innotrac shall not be responsible
for any loss, damage, cost or expense to Client or to any purchaser
or recipient of Products that result from any delay by Innotrac in
performing or any failure to perform any of its obligations
hereunder if such delay or failure to perform results directly or
indirectly from the failure by Client or its representatives or
suppliers to provide to Innotrac all or any of the following:
(i) sufficient quantities of Product and supplies or related
materials to meet order and shipping demand in a timely manner;
(ii) sufficient quantities of Products of proper quality that
are free of defects; (iii) sufficient quantities of Products
with proper packaging; (iv) timely, complete and accurate
order and shipping information; (iv) adequate time to allow
for changes in procedures, product packaging or changes to Services
requirements; or (vi) timely approvals and
consents.
Section 2.3. Lost
Goods .
If any of Client’s Products
are lost, damaged and/or destroyed as a direct result of
Innotrac’s negligent acts or omissions, beyond one-half of
one percent (0.5%) (the “Shrinkage Allowance”), of the
value of the Products, calculated on an annual basis, based on
Client’s actual cost of such Products, Client agrees that, as
its sole remedy, Innotrac shall reimburse Client for the actual
replacement cost to Client for such excess lost, damaged and/or
destroyed Products above the Shrinkage Allowance, together with the
freight costs to Innotrac’s fulfillment center.
Section 2.4.
Disclaimer .
EXCEPT AS EXPRESSLY SET FORTH IN
THIS ARTICLE II, INNOTRAC MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES OR THE PRODUCTS,
AND ANY AND ALL WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED AND
EXCLUDED. INNOTRAC SHALL NOT BE LIABLE TO CLIENT OR ANY OTHER THIRD
PARTY FOR DAMAGE OR INJURIES ON ACCOUNT OF DEFECTS IN ANY OF THE
PRODUCTS, OR ON ACCOUNT OF DAMAGE OR INJURIES RESULTING IN WHOLE OR
IN PART FROM PRODUCT USE OR MISUSE BY THIRD PARTIES.
Section 2.5. Limitation of
Liability.
INNOTRAC’S LIABILITY FOR
CLAIMS ARISING OUT OF, RESULTING FROM, OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNTS ACTUALLY PAID BY
CLIENT ALLOCABLE TO THE SERVICES INVOLVED IN THE CLAIM FOR THE
THREE (3) MONTHS PRECEDING THE EVENT OR EVENTS FIRST GIVING
RISE TO SUCH CLAIM. IN NO EVENT SHALL INNOTRAC BE LIABLE TO CLIENT
FOR ANY CONTINGENT, INDIRECT, INCIDENTAL, CONSEQUENTIAL,
EXTRA-CONTRACTUAL OR EXEMPLARY OR PUNITIVE DAMAGES, OR FOR DAMAGES
FOR LOST SALES OR PROFITS OR COST OF COVER, REGARDLESS OF WHETHER
INNOTRAC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE
LIMITATIONS ABOVE APPLY TO ALL CAUSES OF ACTION IN THE AGGREGATE,
WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR ANY OTHER
LEGAL THEORY (INCLUDING STRICT LIABILITY). UNDER NO CIRCUMSTANCES
SHALL INNOTRAC BE LIABLE FOR ANY LOSSES INCURRED ATTRIBUTABLE TO
ANY ELECTRONIC DATA TRANSFERS, UNLESS SUCH LOSSES RESULT FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF INNOTRAC.
Section 2.6.
Indemnification .
Innotrac shall indemnify, defend and
hold Client and its divisions, subsidiaries, and affiliates and
their respective officers, directors, employees, agents, successors
and assigns harmless from and against any and all claims,
liability, loss, damage or injury and costs and expenses (including
reasonable attorneys’ fees, costs of any suit, and amounts
paid in settlement of any such claims) (“Claims”)
arising out of, relating to, or in connection with (a) the
breach of any warranty, representation or covenant on the part of
Innotrac hereunder; (b) the performance or nonperformance of
this Agreement by Innotrac, and any negligent acts or omissions
associated therewith; or (c) violations of any patent,
trademark, copyright, trade secret or other intellectual property
rights relating to the Services, or distribution of any of the
Products; or (d) data privacy violations. The foregoing
indemnification shall not apply to any Claims resulting solely from
the gross negligence or willful misconduct of Client.
ARTICLE III
Client’s Representations
and Responsibilities
Section 3.1. Corporate Power
and Authority.
Client represents that it is a
business entity duly organized and existing under the laws of the
State of Florida, with lawful power and authority to enter into
this Agreement. Client is duly qualified and in good standing and
is authorized to do business in each jurisdiction where such
qualification is required. The individual executing this Agreement
on behalf of the Client has full power and authority to bind
Client.
Section 3.2. Payment
Obligations.
Client agrees to pay Innotrac as
follows:
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(a)
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Start-Up
Fee .
Client agrees to pay a one-time
Start-Up Fee as set forth in Exhibit A .
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(b)
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Payment
for Services .
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(i)
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Client agrees
to pay Innotrac for Services provided hereunder in accordance with
the Prices set forth in Exhibit A (subject to increase in
accordance with Section 1.2 above). Innotrac shall send
invoices for Services to Client bi-monthly. Client shall make
payment of all invoices net twenty-five (25) days from the
date of the invoice. If Client does not pay any invoices within
said twenty-five (25) day period, Innotrac may, at its
discretion (1) discontinue providing all or any Services until
payment in full is made, and (2) Client shall pay Innotrac
interest on all unpaid amounts at the rate of 1.5% per month
or the maximum amount allowed by law. In the event Client elects to
use Innotrac’s carrier(s) for freight services, Innotrac
shall send invoices to Client bi-monthly for freight expenses (the
“Freight Invoice”). Client shall make payment of the
Freight Invoice net fourteen (14) days from the date of the
Freight Invoice. If Client does not pay any Freight Invoices within
said fourteen (14) day period, Innotrac may, at its discretion
draw against the Freight Deposit as provided in Section 3.2(d)
herein.
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(ii)
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Upon
termination of this Agreement for any reason, Client shall remain
fully responsible for payment of all outstanding invoices for
Services property and fully rendered, as well as invoices not yet
prepared respecting Services properly and fully furnished prior to
the date of termination.
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(c)
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Expenses . Client shall be solely responsible for payment
of all costs and expenses set forth in Exhibit A which are
incurred by Client in connection with the Services rendered
hereunder, or that Innotrac otherwise properly (and at the written
request of Client) incurs on behalf of Client that are not
specifically set forth in Exhibit A , other than expenses
payable by Innotrac under Section 1.2 above. Such costs and
expenses may include, but are not limited to, freight surcharges
incurred at either the time of shipment or anytime after shipment
billed to Innotrac by freight or common carrier, facsimile charges,
postage, express delivery service used to transmit labels, listings
and reports to Client, taxes, and import duties. Innotrac shall not
bill Client for any costs and expenses not set forth in Exhibit
A unless Client has consented to such charges in
writing.
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(d)
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Freight
Deposit . In
the event Client elects to use Innotrac’s carrier(s) for
freight services, Client shall pay a freight deposit (the
“Freight Deposit”) to Innotrac in an amount as
estimated by Innotrac and determined in accordance with Exhibit A,
as security for Client’s payment obligations with respect to
Freight Invoices hereunder. Innotrac reserves the right to request
an additional Freight Deposit should Client’s freight
expenses exceed the initial Freight Deposit. If Client defaults in
any of its payment obligations with respect to Freight Invoices
hereunder, and such default continues beyond the applicable notice
and cure period, then Innotrac may use all or part of the Freight
Deposit for the payment of any outstanding amounts due to Innotrac
with respect to Freight Invoices. If Innotrac uses such Freight
Deposit as provided herein, then Client shall restore
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the Freight Deposit to its original
amount within fifteen (15) days after written demand from
Innotrac. The Freight Deposit is not a limitation on any of
Innotrac’s rights and remedies hereunder or at law, or
liquidated damages, or an advance payment of expenses. Client shall
not be entitled to any interest on any amounts held by Innotrac as
the Freight Deposit. Following the termination of this Agreement,
Innotrac shall refund to Client any Freight Deposit not used by
Innotrac as provided herein. Innotrac shall not use the Freight
Deposit except in the event Client defaults on its payments as
provided in section 3.2.
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(e)
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Security
Deposit . Solely as security for Client’s payment
obligations under Section 3.2(b) (i) and 3.2(c), Client
shall deposit with Innotrac the sum of $17,500 (the “Security
Deposit”). If Client defaults in payment of any undisputed
amount invoiced for Services, and such default continues beyond the
applicable notice and cure period, then Innotrac may apply all or
part of the Security Deposit toward payment of such outstanding
balance of such invoice for Services. If Innotrac uses such
Security Deposit as provided herein, then Client shall restore the
Security Deposit to its original amount within fifteen
(15) days after written demand from Innotrac. If after six
(6) months of on-time payment history paid as outlined in
Section 3.2(b)(i) and 3.2(c), Innotrac shall reduce the sum of
the deposit to $10,000 (the “Revised Security
Deposit”). The Security Deposit or Revised Security Deposit
is not a limitation on any of Innotrac’s rights and remedies
hereunder or at law, or liquidated damages, or an advance payment
of fees or expenses. Client shall not be entitled to any interest
on any amounts held by Innotrac as the Security Deposit or the
Revised Security Deposit. Following the termination of this
Agreement, Innotrac shall refund to Client the entire amount of the
Security Deposit or Revised Security Deposit not used by Innotrac
as authorized herein. Innotrac shall have no right to use any of
the Security Deposit or Revised Security Deposit except as
expressly provided in this Section 3.2(d).
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(f)
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Invoice
Dispute Resolution . Notwithstanding any provision of this
Section 3.2 to the contrary, if Client disputes in good faith
any amount contained on any invoice and gives Innotrac written
notice within ten (10) days of receipt of invoice specifying
the particular items in dispute and the basis of dispute, Client
shall not be obligated to pay the disputed amount until the dispute
is resolved as follows, but shall pay all undisputed amounts.
Innotrac and Client agree to negotiate in good faith any disputed
amounts within thirty (30) days after Innotrac’s receipt
of Client’s written notice. If within ninety (90) days
following the date of any disputed Invoice Innotrac and the Client
have not resolved the items in dispute, Innotrac and Client shall
submit the matter to binding arbitration in accordance with the
provisions of Article VIII.
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Section 3.3. Product
Supply .
Client shall be solely responsible
for acquiring and delivering to Innotrac an inventory of Products
sufficient in quantity to meet order demand, and all such Products
shall be free of any and all defects. Client shall ship Products to
Innotrac in a timely manner and in quantities sufficient to allow
Innotrac to fill orders as customer and order demand dictates. If a
Product shortage exceeds the time allotted for a Product shipment
to be sent by Innotrac to a Client customer (as such timeframes are
dictated to Innotrac by Client), Client shall be solely responsible
for any and all additional expenses incurred by Innotrac to notify
customers (as may be required by regulations of the Federal Trade
Commission or otherwise required by law). In the event Products are
received late or packaged improperly for shipment to Client’s
customers, Client shall be responsible for all costs and expenses,
at Innotrac’s retail prices, for expediting orders,
repackaging Products or providing workarounds as deemed necessary
by Innotrac.
Client shall notify Innotrac
promptly. In writing, if any Products have been recalled by Client
or any governmental authority or are defective in any manner. Upon
receipt of such notice, Innotrac shall fully and timely cooperate
with Client, at Client’s sole expense, in connection with all
actions necessary related to such recall process. In addition.
Client shall be responsible for any costs or expenses incurred by
Innotrac in connection with any actions necessary to comply with
any government agency demands involving the Products.
Section 3A Forecasts
.
Client will provide Innotrac with
forecasts (“Forecast(s)”) for inbound and outbound
activity (“Activity”) for each thirty (30) day
period during the Term. Client will deliver each such Forecast to
Innotrac fourteen (14) days before the beginning of
the
thirty-day period to which it pertains.
Forecasts will specify Activity on a daily basis or, alternatively,
on a weekly basis to be converted by Innotrac to a daily basis,
subject to Client’s approval. The parties agree to
participate in a weekly telephone conference to discuss the
upcoming week’s anticipated Forecast variance (the
“Forecast Call”). If as a result of the Forecast Call,
the Activity exceeds the Forecast by at least fifteen percent
(15%), then Innotrac, at the written request of Client will use
best efforts to provide Service(s) for the increased Activity. Any
costs resulting from Client’s written request(s), including,
but not limited to, overtime labor charges, incurred by Innotrac to
provide Services for the increased Activity shall be charged to
Client. In the event the Activity falls below the Forecast by at
most fifteen percent (15%), and such trending below Forecast
continues for a period of at least two (2) weeks, then
Innotrac will use best efforts to adjust (by deploying to
non-Client activities) and/or reduce labor costs. If
Innotrac’s best efforts in the preceding sentence fail, then
Client shall be responsible for one half of the fulfillment and
customer service fees as set forth in Exhibit A for a maximum of
two weeks for which Innotrac could not reduce its labor
costs.
Section 3.5 Monthly
Minimum Fee .
Innotrac agrees to waive its
customary monthly minimum fee for Client.
Section 3.6. Tax
Matters .
Client agrees that it is solely
responsible for the payment of any and all taxes of any and all
taxing jurisdictions that may be imposed as a result of the sale,
storage and/or distribution of Products under the terms of this
Agreement Client, prior to or promptly following the execution of
this Agreement, shall provide Innotrac with a schedule setting
forth the jurisdictions in which taxes are payable and the amount
of rate of such taxes. Client further agrees that it will reimburse
Innotrac for or indemnify Innotrac against ad valorem taxes imposed
by any jurisdiction on inventory stored in any of Innotrac’s
facilities, subject to Client’s receipt of sufficient
documentation verifying the imposition of such taxes, and the
amounts paid by Innotrac in connection with same. Innotrac agrees
to promptly notify Client in writing upon receipt of any notice or
invoices from any taxing jurisdiction with respect to such
taxes.
Section 3.7. Title and
Insurance .
The Products are solely the products
of Client. Title to the Products, whether such Products are in
transit or stored in Innotrac’s facilities, shall at all
times remain with Client until sold by Client in the ordinary
course of business. Client agrees that it is solely responsible for
insuring such Products against loss and casualty, however caused,
and Client’s insurance shall be primary to any insurance
carried by Innotrac, if any. Company shall provide copies of such
certificates of coverage to Innotrac within five (5) days of
the Agreement Date. Notwithstanding the foregoing, Innotrac shall
obtain and maintain, at all times during the term of this
agreement, the Required Insurance (as defined below). Innotrac
shall within thirty (30) days after the Agreement Date and
thereafter upon Client’s reasonable request, provide Client
with a certificate of insurance evidencing the Required Insurance;
and (y) cause Client to be named as an additional insured on
the Required Insurance at all times that any Products are in
Innotrac’s possession. As used herein, “Required
Insurance” means policies of insurance from one or more
insurers each having an A.M. Best financial strength rating of
“B+” or better as follows:
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a)
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Comprehensive
General Liability Insurance (including Contractual Liability,
Bodily Injury, Property Damage, and Personal Injury) in the amount
of $1,000,000 single event, $2,000,000 general aggregate; Excess
Umbrella $10,000,000.
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b)
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Employee
dishonesty insurance covering the dishonest and fraudulent acts of
its employees $1,000,000 per event; and
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c)
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Workers’
Compensation insurance complying with the coverage limits and in
all other respects with applicable state workers’
compensation taws covering its employees and/or agents for work
related injuries suffered by such employees and/or
agents.
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Section 3.8.
Indemnification .
Client shall indemnify, defend and
hold Innotrac and its divisions, subsidiaries, and affiliates and
their respective officers, directors, employees, agents, successors
and assigns harmless from and against any and all claims,
liability, loss, damage or injury and costs and expenses (including
reasonable attorneys’ fees, costs of any suit, and amounts
paid in settlement of any such claims) (“Claims”)
arising out of, relating to, or in connection with (a) the
breach of any warranty, representation or covenant on the part of
Client hereunder; (b) the performance or nonperformance of this
Agreement by Client, and any negligent acts or omissions
associated
therewith; (c) the Services or the
Products, including, without limitation, Claims for personal
injury, death, property damage, environmental harm, product
liability, or breach of warranty; (d) violations of any
regulations, laws, ordinances, statues or rules applicable to the
Products or Services, including without limitation FTC or FDA;
(e) unpaid taxes, customs, or transportation charges;
(f) claims related to Innotrac’s providing technical
support assistance to Client’s customers in accordance with
the terms hereof; (g) Innotrac’s authorized use of
Client’s confidential information, Client’s customer
data or Client systems, in Innotrac’s performance of the
Services under this Agreement as provided herein; (h) a claim
of an unfair or deceptive act and practice of Client; or
(i) violations of any patent, trademark, copyright, trade
secret or other intellectual property rights relating to the
Services, the Products or Client’s marketing, labeling, sale
or distribution of any of the Products; or (j) any acts or
omissions by Client relating to the Products which do not comply
with applicable state, federal, provincial or local law;
(k) date privacy violations; or (l) export violations.
The foregoing indemnification shall not apply to any Claims
resulting solely from the gross negligence or willful misconduct of
Innotrac.
Section 3.9. Lien on
Inventory .
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(a)
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Client hereby
agrees and acknowledges that, pursuant to Section 7-209 of the
Georgia Uniform Commercial Code, Innotrac has a
warehouseman’s lien against Client on all of Client’s
goods now or hereafter in the possession of Innotrac, and on the
proceeds thereof, for charges and expenses in relation to, for
charges and expenses in relation to such goods and for expenses
necessary for preservation of such goods or reasonably incurred in
their sale pursuant to law. Client hereby further agrees and
acknowledges that, pursuant to Section 7-209 of the Georgia
Uniform Commercial Code, Innotrac also has a warehouseman’s
lien against Client on all of Client’s goods now or hereafter
in the possession of Innotrac, and on the proceeds thereof, for
charges and expenses in relation to other goods of Client (whenever
such other goods were deposited with Innotrac) and for expenses
necessary for preservation of such other goods or reasonably
incurred in their sale pursuant to law. The Client hereby
acknowledges that this Agreement and each invoice of Innotrac
issued hereunder constitute “warehouse receipts” under
Article 7 of the Georgia Uniform Commercial Code.
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(b)
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In addition to
and not in limitation of the foregoing Section 3.8(a), Client
hereby grants to Innotrac a security interest and lien in all goods
and inventory of Client, and the proceeds thereof, at any time in
the possession of Innotrac to secure any and all obligations or
amounts owing at any time by Client to Innotrac under this
Agreement or under any other contract, or owing under statute or by
operation of law.
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(c)
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If the Client
fails to pay all outstanding amounts due under this Agreement
within thirty (30) days after termination of this Agreement
and demand for final payment by Innotrac, then Innotrac, at its
option, may (but shall not have any obligation to) (i) sell
all or any of the Product in its inventory at public or private
sale and (ii) exercise any and all other rights of a warehouse
or secured party under and in accordance with the Georgia Uniform
Commercial Code. Costs incurred by Innotrac in the sale of Products
under this Section are the responsibility of Client and shall be
deducted from the proceeds of such sale. Sale of Product under this
Section does not relieve Client of its obligation to pay the full
amount of the outstanding balance of any amounts due Innotrac under
this Agreement or any other contract
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Section 3.10. Client
Obligations Precedent to Innotrac Performance .
Innotrac’s performance of its
obligations under this Agreement as set forth in Section 2.2
is contingent upon Client’s satisfactory completion of the
following precedent obligations: (i) provision of Products in
sufficient quantity and quality to meet order and fulfillment
demand, (ii) provision of accurate order data, shipping data,
and other information necessary for Innotrac to provide the
Services and the timely acceptance and approval of all
documentation provided by Innotrac, and (iii) Client’s
compliance with all other material terms and conditions of this
Agreement If Client’s failure to satisfactorily complete any
or all of the aforementioned precedent obligations causes Innotrac
to incur expenses beyond those inherent in providing the Services,
Innotrac shall provide Client with five (5) days prior written
notice detailing Client’s failures and the costs Innotrac
would charge to Client to correct the failures. Upon receipt of
such notice, Client shall either (i) notify Innotrac that it
intends to correct the failures within such five (5) day
period (or such other time period mutually agreed upon by the
parties) or (ii) consent in writing to Innotrac’s
undertaking to correct such failures, in which ca
