Contract
EXHIBIT
10.12
INNOTRAC
CORPORATION
This
Service Agreement (this “Agreement”) is made this 7th day of October, 2005 (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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0000
Xxxxxxxxx Xxxxxxx
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Xxxxxx,
Xxxxxxx 00000-0000
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Attn:Xxxxxxx
Xxxxxx
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Fax:000-000-0000
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Phone:000-000-0000
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Email:xxxxxxx@xxxxxxxx.xxx
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and | |
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“Client”:
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000
00xx
Xxxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxxxxx 00000
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Attn:
Xxxxx
Xxxxxxx
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Fax:
000-000-0000
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Phone:
000-000-0000
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Email:
xxxxx@xxxxxxxx.xxx
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for
Services (defined below) for a duration of three (3) years from the date
of the
first shipment to a bona fide customer in the regular course of business
(the
“Go Live” date). These first three years will be known as the “Initial
Term.”
RECITALS
A. Innotrac
is a provider of fulfillment, customer care and technology services from
various
locations in the United States;
B. 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:
Page
1
Article
I
Services
and Prices
Section
1.1. Scope
of Services.
Commencing
on the Agreement Date, Innotrac agrees to provide to Client those services
commercially reasonable and necessary to fulfill the client’s requirements (the
“Services”) more fully described in Exhibits
A & B.
Innotrac promises to work with due diligence commencing on the Agreement
Date to
complete a document (a “Statement of Work”) outlining the scope of work and
describing the particular additional services to be purchased by Client and
provided by Innotrac, together with final information on pricing, and time
lines
for design, development and delivery, as applicable, and will be added as
Exhibit A to the Agreement upon signature by both Client and Innotrac.
By
signing this Agreement, Client agrees to pay for the Services furnished by
Innotrac at the rates set forth in Exhibit B. Client promises to provide
Innotrac with information and assistance as required to complete
the
Statement of Work. When the parties execute the Statement of Work,
and it
has been identified to this Agreement, it shall become part of this Agreement,
and subject to the terms hereof, and the additional services and/or products
described in the Statement of Work shall thereafter be included in the Services
as
defined in
this
Agreement.
Section
1.2. Prices.
(a)
Client agrees to pay for the fulfillment Services furnished by Innotrac at
the
rates set forth in the Exhibit B. with Services described in Exhibit A. Subject
to Sections 1.2(b) and 1.2(c) below with regard to the amount of a Price
increase, Innotrac will not increase the Prices the first twelve (12) months
after the Go Live date. Innotrac may not increase the Prices more than once
every twelve (12) months. Innotrac will provide Client with written notice
of
such increase in Prices (an “Adjustment Notice”) 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. Any new service and/or change to services
described in Exhibits A and B will be priced and agreed to by both parties
and
pricing for the new service will be effective at the time that any necessary
addendums to Exhibits A and B are executed by both parties.
(b)
Innotrac shall not increase the Prices by more than the lesser of (i) five
percent (5%) or, (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).
(c)
Notwithstanding anything to the contrary contained herein, Innotrac may increase
Prices for postage, freight, shipping services, or telephone service upon
prior
written notice Client. In the event that Innotrac’s third party vendors increase
Prices to Innotrac, notice of such price increase will be provided to Client
immediately following notice given to Innotrac and will be effective at the
time
the increase is imposed upon Innotrac. Such increases will be limited to
increases provided to Innotrac by third-party vendors and providers. Innotrac
will provide Client with written documentation of such increases. Such increases
will be passed on to Client at cost, which may include administrative fees
from
such third-party vendors. Innotrac shall provide prior written notice to
Client
of such third party vendor increases. 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. Additionally,
in the
event Innotrac receives any price decrease from a third party vendor providing
postage, freight, other shipping services, or telephone service, for Client’s
account, Innotrac shall pass the amount of such decrease to Client.
Page
2
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. This Agreement shall not be binding on Innotrac unless it is executed
by an Innotrac corporate officer having full power and authority to bind
Innotrac.
Section
2.2. Performance.
Innotrac
will perform the Services in accordance with the terms of this Agreement,
subject to Client’s compliance with all of its precedent obligations hereunder.
If Innotrac causes an error in the course of its performance of the Services,
then Innotrac will correct such error at its expense, not to exceed the
aggregate amount of the fulfillment fee that Innotrac charged for the
deficiently performed Service plus freight. This limitation applies to all
errors in the aggregate. Notwithstanding the foregoing, 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 obligation 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 to meet order and shipping demand in
a
timely manner; (ii) Products of proper quality that are free of defects;
(iii)
Products with proper packaging; (iv) timely, complete and accurate order
and
shipping information; (v) sufficient time to allow for changes in procedure,
product packaging or changes to Services requirements; (vi) timely approvals
and
consents.
Section
2.3. Lost
Goods.
If
any of
Client’s Products are lost, damaged and/or destroyed as a result of Innotrac’s
negligent acts or omissions, beyond .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. Inventory accuracy is
calculated based on number of units in stock at the beginning of the year,
additions for receipts, subtraction for shipments and any cycle count or
reconciliation adjustments, then compared to actual number of units in stock
at
the time of the physical count.
Page
3
Section
2.4. Disclaimer.
EXCEPT
AS
EXPRESSLY SET FORTH IN THIS ARTICLE 2, INNOTRAC MAKES NO REPRESENTATIONS
OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO SERVICES OR THE PRODUCTS,
AND
ANY AND ALL WARRANTIES 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.
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).
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 Nevada, 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
Obligation.
Client
agrees to pay Innotrac as follows:
Page
4
(a) Payment
for Services
(i) Client
agrees to pay Innotrac for Services provided hereunder in accordance with
the
Prices set forth In the Statement of Work (subject to revision in accordance
with Section 1.2 above). Innotrac shall prepare invoices to Client on the
first
and fifteenth day of each month to be sent within five (5) business days.
Client
shall make payment of the undisputed portion of each invoice within thirty
(30)
calendar days of the date of the invoice. If Client does not pay any undisputed
portion of an invoice within said 30 day period, (1) Innotrac may, upon 30
calendar days’ written notice, discontinue providing all or any Services until
payment of the undisputed portion of the invoice is made in full, and (2)
Client
shall pay Innotrac interest on all unpaid undisputed portions at the rate
of
1.5% per month or the maximum amount allowed by law.
(ii) Notwithstanding
anything to the contrary contained herein, upon termination of this Agreement
for any reason, Client shall remain fully responsible for payment of all
outstanding invoices, including any disputed amounts, as well as invoices
not
yet prepared respecting Services furnished prior to the date of
termination.
(iii) In
the
event of a dispute over any invoice, Client shall pay the undisputed portion
of
the invoice and notify Innotrac in writing within twenty (20) calendar days
of
receipt of invoice and provide back-up material to support dispute. Client
shall
use commercial reasonability in reviewing and disputing charges. The parties
shall attempt to resolve such dispute through good faith negotiations within
a
timely manner, without prejudice to any of their rights or remedies under
this
Agreement or applicable law.
(iv) If
at any
time Client has an outstanding balance in excess of twenty-thousand dollars
($20,000.00), Innotrac may, with seven days written notice, immediately
discontinue providing all or any Services until payment of the excess balance
is
made in full.
(b) Expenses.
Client
shall be solely responsible for payment of all costs and expenses set forth
in
Exhibit B or that Innotrac otherwise incurs on behalf of Client that are
not
specifically set forth in Exhibit B, other than expenses payable by Innotrac
under Sections 2.2 and 2.3 above. Such costs and expenses may include, but
are
not limited to, facsimile charges, postage, express delivery service used
to
transmit labels, listings and reports to Client, taxes, and import duties.
Such
costs and expenses will reflect reasonable and customary rates. Where possible,
Innotrac shall obtain Client’s written approval in advance for such costs and
expenses.
Page
5
(c) Freight
Deposit.
Client
shall pay a freight deposit (the “Freight Deposit”) to Innotrac in an amount
equal to the freight expenses for one month, as estimated by the Forecast
(defined in Section 3.4) provided by Client and the average outbound freight
cost per shipment, as security for Client’s payment obligations 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 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 outstanding amounts to Innotrac. If Innotrac
uses such Freight Deposit as provided herein, then Client shall restore 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.
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 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 thirty
(30)
days, 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 by law) regarding delayed orders.
Should any Federal Trade Commission notifications be required, they must
be
approved by Client prior to distribution. Client must review and approve
the
notification in a timely manner to meet any legally-imposed deadlines. 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 if any Products have been recalled by Client or any governmental
authority or are defective in any manner.
Section
3.4. Forecasts.
Client
will provide Innotrac with forecasts (“Forecasts”) for inbound and outbound
activity (“Activity”) for each ninety (90) day period during the Term. Client
will deliver each such forecast to Innotrac thirty (30) days before the
beginning of the 90-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 approval
Both
parties agree to participate in a weekly phone conference to discuss the
upcoming week’s anticipated Forecast variance (the “Forecast Call”). During the
Forecast Call or a reasonable time after the Forecast Call, Client may request
that Innotrac utilize all those labor resources necessary, including overtime,
to accommodate volumes above the Forecast and Innotrac will make best efforts
to
accommodate such a request. Should a downturn in volume be anticipated, Innotrac
will make all reasonable efforts to adjust and/or downsize labor and staffing
levels. . Innotrac makes no guarantees for service levels but does agree
to make
all reasonable and best efforts to provide adequate service levels based
upon
information provided by Client.
Page
6
Section
3.5. 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
on
inventory stored in any of Innotrac’s facilities.
Section
3.6. 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, at its own expense, for insuring
the Products against loss and casualty however caused during the performance
of
the Service(s) under this Agreement, and Client’s insurance shall be primary to
any insurance carried by Innotrac, if any. Client shall furnish to Innotrac
Certificates of Coverage evidencing sufficient coverage no later than five
(5)
days prior to Innotrac’s initial receipt of Product. Client will also provide
Innotrac with proof of workers’ compensation insurance annually.
Section
3.7. 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; or (f) 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. The foregoing indemnification shall
not
apply to any Claims resulting solely from the gross negligence or willful
misconduct of Innotrac.
Page
7
Section
3.8. Client
Inventory and Payment..
(a) Client
hereby agrees to and acknowledges Innotrac’s rights under the Georgia Uniform
Commercial Code, including Section 7-209. Client hereby further agrees and
acknowledges that, pursuant to Section 7-209 of the Georgia Uniform Commercial
Code, Innotrac also has a right to 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.
(b) If
the
Client fails to pay all outstanding amounts due under this Agreement within
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) exercise any and all rights of a warehouse 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.
Section
3.9. Client
Obligations Precedent to Innotrac Performance.
Innotrac’s
performance of its obligations under this Agreement is contingent upon Client’s
satisfactory completion of its precedent obligations that include provision
of
Products in sufficient quantity and quality to meet order and fulfillment
demand, 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 Client’s compliance with
all other terms and conditions of this Agreement. Innotrac will confirm Client’s
satisfactory completion of it obligations either in writing as set forth
in
Article VI or by e-mail communication. 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, Client
shall
be liable for Innotrac’s hourly rates as set forth in the Special Projects
section of Exhibit B for fulfillment and call center activities and in the
Custom Programming section of Exhibit B for information technology activities,
whichever shall apply.
Article
IV
Publicity
Neither
party shall advertise, disclose or otherwise publicize the terms of this
Agreement or the Services without prior written consent of the other party,
provided that the parties may, however, disclose the fact that they have
entered
into a business agreement with one another after the execution of the Statement
of Work and its incorporation into this Agreement.
Page
8
Article
V
Term
and
Termination
Section
5.1. Term
of Agreement.
The
term
of this Agreement shall commence on the Agreement Date and shall continue
until
the expiration of the Initial Term. Thereafter, this Agreement shall be
automatically renewed for additional twelve (12) month periods (each such
period
being a “Renewal Term”) unless one party delivers written notice of non-renewal
to the other party at least one hundred twenty (120) days before the last
day of
the initial term or Renewal Term then in effect.
Both
Client and Innotrac reserve the right to cancel this Agreement, and will
provide
the other Party with ninety (90) days written notice, should either Party
determine, in its sole discretion, that there is a significant change in
business that materially alters the Party’s ability to perform under the terms
of the Agreement.
Section
5.2. Default.
The
occurrence of any of the following events shall constitute an “Event of Default”
unless waived by the non-breaching party:
(a) the
failure of a party to observe or perform any of its material obligations
in this
Agreement or any of its obligations under the Confidentiality Agreement,
including, but not limited to Client’s obligations of payment; or
(b) any
material representation made by a party in this Agreement shall prove to
have
been untrue in any respect when made.
Section
5.3 Remedies.
Upon
the
occurrence of an Event of Default, the non-breaching party shall provide
written
notice to the breaching party of, and outlining the extent of, the Event
of
Default and providing (i) ten (10) days right of cure if the Event of Default
is
the nonpayment of monies; and (ii) thirty (30) days right of cure if the
Event
of Default is for reasons other than the nonpayment of monies (provided,
however, said thirty (30) day cure period shall be extended at the discretion
of
the non-breaching party by an additional thirty (30) days if the breaching
party
has implemented efforts to cure the non-monetary breach in the initial thirty
(30) day cure period and is diligently pursuing such cure in good faith).
Should
the Event of Default in the notice not be cured within the applicable cure
period, then, in addition to all other rights and remedies at law or equity
or
otherwise, the non-breaching party may terminate this Agreement without any
further obligation or liability whatsoever, except for Client’s obligations of
full payment for Services provided as of the date of termination and the
costs
of shipping Product inventory to another location. Notwithstanding anything
to
the contrary contained herein, this Agreement may be terminated by either
party
effective upon ten (10) business days prior written notice to the other party
in
the event that the party so notified becomes the subject of any proceeding
under
any law relating to bankruptcy, insolvency, reorganization or relief of debtors
or becomes or is declared insolvent.
Page
9
Section
5.4. Return
of Product Following Termination.
Upon
termination of this Agreement and payment in full of all outstanding amounts
due
and payable to Innotrac hereunder (plus payment by Client in advance of all
shipping costs), Innotrac shall, subject to its lien and other rights hereunder
and at law, return all remaining Product to Client at Client’s expense, and
shall provide Client an accounting of the remaining Product inventory. Until
payment in full of all amounts due to Innotrac under this Agreement are received
(plus payment by Client in advance of all shipping costs), Client agrees
that
Innotrac may retain the inventory of Products and that such inventory shall
be
subject to the lien of Innotrac pursuant to Section 3.8 above.
Article
VI
Notices
Unless
otherwise stated in this Agreement, all notices, consents, requests, and
waivers
required or permitted under this Agreement shall be given in writing, delivered
personally or by Federal Express or facsimile (receipt confirmed), to the
addresses and facsimile numbers set forth on the first page of this Agreement,
with copy to the office of the General Counsel of Innotrac Corporation. Notices
shall be deemed given upon receipt.
Article
VII
Arbitration
The
parties hereto will attempt in good faith to resolve any dispute, controversy
or
claim (“Dispute”) arising out of or relating to this Agreement promptly by
negotiations first between the parties and then between senior executives
of the
Parties. In the event that such negotiations are unsuccessful, Disputes shall
be
settled by binding arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
procedure shall be governed by the United States Arbitration Act, 9 U.S.C.
§§
1-16, and the award rendered by the arbitrator (s) shall be final and binding
on
the parties and may be entered in any court having jurisdiction thereof.
Such
arbitration shall be held in a location agreed upon by the parties or, if
no
location can be agreed upon, in a location selected by the arbitrator(s).
Any
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The non-prevailing party shall pay all
costs
of the proceedings, including the fees and expenses of the arbitrator and
the
reasonable attorneys’ fees and expenses of the prevailing party, unless the
arbitrator(s) determine(s) that there is not a prevailing party, in which
event
each party shall bear its own costs and to share equally the fees and expenses
of the arbitrator(s). The foregoing dispute resolution procedures, however,
do
not apply to Disputes arising under or relating to the confidentiality and
non-recruitment provisions in Article III above or the Confidentiality Agreement
attached hereto and incorporated herein as Exhibit C, which may be brought
in
any court of competent jurisdiction.
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10
Article
VIII
Miscellaneous
Provisions
Section
8.1. Governing
Law.
This
Agreement shall be governed and interpreted in accordance with the laws of
the
State of Georgia (without regard to the choice of law principles
thereof).
Section
8.2. Force
Majeure.
Neither
party shall be liable to the other for any loss, injury, delay or damage
whatsoever suffered or incurred by the other party due to causes beyond such
party’s reasonable control, including but not limited to, acts of God, strikes
or other labor disturbances, war, sabotage, casualty, embargo, flood, explosion,
act of terrorism and responses thereto, and any other cause or causes, whether
similar or dissimilar to those herein specified, which cannot be controlled
by
such party (each hereinafter called a “Condition”). If any Condition occurs,
this Agreement shall be suspended for the duration of the Condition as to
the
affected Services, and the party affected by the delay may during such
suspension buy or sell elsewhere services comparable to those to be obtained
under this Agreement, and performance of this Agreement shall resume once
the
Condition ceases. Regardless of the occurrence of a Condition, neither party
shall be relieved of the obligation to make payments to the other on account
of
Services provided, or for pricing adjustments pertaining to Services furnished,
prior to the event constituting the Condition.
Section
8.3. Compliance
with Laws.
Client
and Innotrac shall comply with all federal, state and local laws and regulations
applicable to the performance of their respective obligations under this
Agreement.
Section
8.4. Severability.
If
any
provision of this Agreement is inconsistent or contrary to any applicable
law,
rule or regulation, then such provisions shall be deemed to be modified to
the
extent required to comply with such law, rule or regulation and as so modified,
such provision and this Agreement shall continue in full force and
effect.
Section
8.5. No
Waiver.
The
failure to enforce at any time any of the provisions of this Agreement or
to
require at any time performance by any party of any of the provisions of
this
Agreement shall in no way be construed to be a waiver of such provisions
or to
affect the validity of this Agreement, or any part hereof, or the right of
any
party thereafter to enforce each and every such provision in accordance with
the
terms of this Agreement. Each payment provision of this Agreement shall survive
the termination of this Agreement for any reason.
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11
Section
8.6. Limitation
on Assignment; Binding Effect.
This
Agreement shall not be binding on either Party unless it is executed by a
corporate officer having full power and authority to bind the Party. This
Agreement may not be assigned by either Party (by contract or by operation
of
law) without the prior written consent of the other Party; provided, however,
no
consent shall be required for the merger, consolidation, or other business
reorganization of any party with an entity affiliated with, controlling,
controlled by or under common control with the assigning Party, provided
that
the proposed assignee is not a competitor or an affiliate of a competitor
of the
non-assigning party and so long as the obligations hereunder are assumed
by the
reorganized entity. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective permitted assigns and
successors.
Section
8.7. Entire
Agreement.
All
exhibits referenced in this Agreement and attached hereto are incorporated
herein by this reference. This Agreement and the Confidentiality Agreement
completely set forth the agreements between the parties and fully supersede
all
prior agreements, both written and oral, between the parties with respect
to the
matters set forth herein and in the Confidentiality Agreement. No terms of
any
purchase order, confirmation, invoice, or other document from a party (even
though receipted for or executed on behalf of the other party) that are in
addition to or inconsistent with the terms of this Agreement shall be effective
with respect to the provision of Services hereunder absent the express written
acceptance (other than on such document) signed by an authorized representative
of such other party.
Section
8.8. Amendments.
This
Agreement may only be amended or modified by written instrument expressly
referencing this Agreement and executed by both parties.
Section
8.9. Nature
of Relationship.
Innotrac
and Client, in the performance of their obligations hereunder, are acting
as
independent contractors. No agency, partnership, joint venture or other
employer-employee relationship, express or implied, is intended or created.
Client and Innotrac are not, by reason of this Agreement, granted any right
or
authority to assume or create any obligation or responsibility, express or
implied, on behalf of or in the name of the other party, or to bind the other
party in any manner. All persons furnished by Innotrac shall be employees
or
agents of Innotrac and shall not be deemed to be employees of Client for
any
purpose whatsoever. Innotrac shall furnish, employ, and have exclusive control
of all persons to be engaged in performing Services under this Agreement
and
shall prescribe and control the means and methods of performing such
Services.
Page
12
Section
8.10. Solicitation
of Employees
Both
parties agree, during the term of this Agreement and for a period of one
(1)
year after termination, not to solicit, recruit, or hire, either directly
or
indirectly, any employees of the other party who are directly involved in
the
Service(s) covered by this Agreement without prior written approval from
the
other party.
Section
8.11 Confidentiality
As
a
condition to Innotrac assuming any obligations hereunder, the parties have
executed or shall execute simultaneously with this Agreement, Innotrac’s
standard form of Confidentiality Agreement attached hereto and incorporated
herein as Exhibit C.
Section
8.12. Attorneys’
Fees.
In
the
event of any proceeding or action between Innotrac and Client arising under
or
in connection with this Agreement, the prevailing party shall be entitled
to
recover its legal costs and expenses, including reasonable attorneys’ fees, and
reasonable attorneys’ fees incurred in collection or enforcement of any judgment
or award in favor of the prevailing party.
Section
8.13. No
Grant of Rights.
Each
party shall have and retain exclusive ownership of all intellectual property
owned by it and nothing contained in this Agreement will be deemed to grant,
either expressly or impliedly, any rights, licenses or interests in or to
any
intellectual property of the other party.
Section
8.14. Counterparts.
This
Agreement may be executed in one or more counterparts for the convenience
of the
parties, all of which together shall constitute one and the same
instrument.
Section
8.15 Survival
Any
provision of this Agreement which contemplates performance or observance
subsequent to any termination of this Agreement shall survive termination,
including without limitation, Articles II, III, V, VII, VIII and all Exhibits
hereof.
Section
8.16. Headings.
The
headings contained in this Agreement are for reference only and shall not
affect
the interpretation of this Agreement.
Page
13
IN
WITNESS THEREOF, this Service Agreement is executed by the parties as of
the
date first set forth above.
|
INNOTRAC
CORPORATION
|
||||
|
By:
|
/s/
Xxxxx Xxxxxxx
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
CEO
|
Title:
|
Chief
Marketing Officer
|
|
Page
14
EXHIBIT
B
PRICING
PROPOSAL
SUMMARY
Innotrac
is pleased to furnish pricing to AeroGrow International. The following
assumptions apply:
Innotrac
will begin implementation the second half of October with a launch date for
the
test group only of November 2005.
All
pricing is based upon the program assumptions and characteristics provided
to
Innotrac by AeroGrow International.
Program
Assumptions:
Number
of
SKUs
Dimensions
and weights
Expected
shipment volume
Shipment
options: we will offer both standard and expedited shippingSpecial storage
and
handling requirements
Basic
requirements:
AG
order
number
Recipient
name and address
SKU(s)
and quantities
Shipping
priority (shipping priority rules will be set by AG in advance)
Pull
one
or two seed kits per the customer order, on a FIFO basis
Make
the
Piggy Back Seed kit box and ship the seed kit(s) with the base product. The
Kitchen Garden box and Piggy Back Seed box will be strapped together for
shipment or combined into one outer box, which ever is the most cost effective.
Scan
the
barcode lot numbers and item numbers of each shipment package at shipment
time
and associate them with the order number. Each package will have a) one label
with 2 bar codes (lot number and SKU number) for the Kitchen Garden, and
b) one
or two labels for included seed kits, each label containing a lot number
and a
SKU number.
AG
order
number
Scanned
SKU number(s)
Scanned
lot number(s)
Date
shipped
Shipped-via
Tracking
number, if applicable
(We
may
also ask for confirmation of the ship-to name and address)
No
data
or order history is required to convert. This is a new program.
The
project will first launch their product via DRTV in November of 2005.
Program
Partners: Must be a provider already integrated with Innotrac.
Telemarketer
- __________
Credit
Card Processor - ___________
Media
-
_____________
Fulfillment
and customer care will be provided from Innotrac’s Reno, Nevada
facility.
Client
will provide Innotrac will expected media spend two weeks in
advance.
Page
15
The
Service Level Goals herein shall be effective between the parties commencing
90
days after go live. All service levels will be measured over a two week
period.
Innotrac’s
obligation to meet Service Level Goals is dependent upon Client’s actual volumes
being within allowances as defined in Section 3.4 Forecasts of the Agreement.
Service
levels may also be dictated by carrier holidays and/or pick-up and delivery
schedules.
Business
Day is defined as Monday through Friday excluding the day in which the following
Holiday’s are recognized. Christmas, New Years Day, Memorial Day, Independence
Day, Labor Day and Thanksgiving.
| · |
All
complete error free orders will be shipped within two business
days of
receipt.
|
| · |
All
returns will be processed within two business days of
receipt.
|
| · |
All
inbound product will be processed within one business day of
receipt.
|
| · |
A
4
week freight deposit is required if using Innotrac carrier
accounts.
|
The
below
pricing proposal is not final and/or complete until such time that all business
rules, actual product and program requirements are confirmed between Innotrac
and AeroGrow International.
| START-UP FEE | |||
|
Start-up
Fee- Standard
|
$2,500
*
|
||
|
*
this includes standard Innotrac systems offering. Enhancements
will be
done in a phased approach to be agreed upon by AeroGrow
and
Innotrac.
|
|||
|
Shopping
Cart
|
TBD
|
||
| MONTHLY MINIMUM (BEGINNING THREE MONTHS AFTER GO LIVE) | |||
|
Monthly
Minimum
|
$2,500
|
||
| ORDER PROCESSING | |||
|
Electronic
Order Receipt
|
$.08/order
|
||
|
Order
Processing Fee
|
$.08/order
|
||
|
Continuity
Order Release
|
$.08/order
|
||
|
Credit
Card Processing
|
$.07/touchpoint
|
||
|
·
|
Touchpoint
is a authorization attempt, debit attempt, etc.
|
||
|
Mail/Fax
Orders Entry in CRMS
|
$1.25/order
|
||
|
Check
Deposit
|
$.35
/check
|
||
|
Auto
email Notification (shipment &order confirmation)
|
$.05
/email
|
||
|
Order
Cancellation
|
$.19/order
|
||
| FULFILLMENT FEES | |||
|
Product
Receipts
|
$25.00
per labor hour
|
||
|
Base
AeroGrow Order*
|
$1.05/shipment
of 1
|
||
|
First
Additional Seed Kit *
|
$.18/unit
|
||
|
·
|
*(Including
making box and combining with base order)
|
||
|
Second
and Beyond Seed Kit inserted into Same Box
|
$.18/unit
|
||
|
Continuity
Seed Kit
|
$.85/shipment
of 1
|
||
|
Package
Inserts- Generic
|
$.05
/insert
|
||
|
Returns
|
$1.35/returned
unit*
|
||
|
·
|
*Processing
of returns and appropriate disposition of product –
Product
refurbishment and all other re-stocking services will be
performed on an
hourly basis
|
||
Page
16
|
Fulfillment
Center Project Work
|
$25.00/labor
hour
|
||
|
·
|
Projects
charged at this rate include inspection of returned product
for
functionality, re-boxing / refurbishing of returned product,
preparation
of returned product to be sent to manufacturer or trash
disposal, client
requested physical inventory counts or other client requested
projects
|
||
|
Pallet
Storage
|
$8.00/pallet/month
|
||
|
Bin
Storage
|
$2.45/bin/month
|
||
|
Climate
Controlled for Seed Kits
|
TBD
|
||
|
Packaging
Materials and Supplies
|
Cost
plus 10%
|
||
|
·
|
Includes
items such as boxes, bags, dunnage, pack slips,
etc.
|
||
|
Retail
Distribution- Work Orders
|
$25.00/labor
hour
|
||
|
New
SKU Set-Up
|
$3.50/SKU
|
||
| CUSTOMER SERVICE | |||
|
Per
Minute Fee (talk time)
|
$.69
/minute
|
||
|
Call
Disposition
|
$.69/minute
|
||
|
·
|
(if
client requests posting to customer record after the call
ends)
|
||
|
Toll
Charge
|
$.03
/minute
|
||
|
·
|
Includes
toll charge and T-1 usage fee’s
|
||
|
Outbound
Calls
|
$28.00/labor
hour
|
||
|
·
|
Includes
labor, toll charge and T-1 usage fee’s
|
||
|
Form
Letters (includes postage)
|
$.74
/ letter
|
||
|
Customer
Service Support
|
$25.00
/labor hour
|
||
|
·
|
Includes
chargebacks, email, customer service white mail, customer
call backs,
customer service correspondence, etc.
|
||
|
Agent
Training
|
$22.00
/labor hour
|
||
|
·
|
Includes
initial and ongoing training on products
|
||
|
Curriculum
Development
|
$55.00
/labor hour
|
||
| INFORMATION TECHNOLOGY / ORDER PROCESSING | |||
|
On-Line
Reporting (3 concurrent users)
|
waived
|
||
|
Reporting
|
$85
/ labor hour
|
||
|
Information
Technology Projects (client requested projects)
|
$125
/labor hour
|
||
| MISCELLANEOUS | |||
|
Client
Services / Account Management
|
See
Below
|
||
|
·
|
Fulfillment
pricing includes 4 hours per week of account management
|
||
|
Additional
hourly support
|
$39.00
/labor hour
|
||
|
Travel
and Out of Pocket Expense
|
At
Cost
|
||
|
Special
Projects
|
$25.00/labor
hour
|
||
|
Overtime
|
$37.50/labor
hour
|
||
| POSTAGE/FREIGHT | |||
|
PO
Box Rental
|
At
Published Rates
|
||
|
USPS
First Class Postage
|
At
Published Rates
|
||
|
Freight
(if Innotrac Shipping Account)
|
4
Week Deposit
|
||
| OTHER PRICING& ASSUMPTIONS | |||
|
Services
not specifically addressed above can be quoted upon
request.
|
|||
| MISCELLANEOUS | |||
|
Travel
& Out of Pocket Expense
|
At
Cost
|
||
Page
17
