DELIVERY SERVICES AGREEMENT
DELIVERY SERVICES AGREEMENT (the "Agreement") dated as of July 1, 1997,
between Xxxxxx Distributors, Inc., a New Jersey corporation ("NDI"), and Meadow
Trucking, Inc., a New Jersey corporation ("MTI").
WHEREAS, pursuant to that certain Asset Purchase Agreement by and among
NDI, Drug Guild Distributors, Inc., a New Jersey corporation ("DGD") and Xxxxxx
Health Services, Inc., a New Jersey corporation ("NHSI"), dated as of July 1,
1997 ("Asset Purchase Agreement"), NDI has purchased certain of the assets of
DGD ("Assets"); and
WHEREAS, as a result of the acquisition of the Assets by NDI, and the
anticipated expansion of the business of NDI as a result thereof, NDI may, from
time to time, require additional transportation services to support its
business; and
WHEREAS, MTI is in the business of providing transportation services and
has the capability to provide such transportation services as NDI may, from time
to time, require.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and other good, valuable and sufficient
consideration, the receipt of which is hereby acknowledged, NDI and MTI
(collectively, the "Parties" and, sometimes individually a "Party"), intending
to be legally bound, hereby agree as follows:
1. Term. (a) Unless sooner terminated pursuant to the provisions of this
Section 1, this Agreement shall remain in effect for an initial period of one
year, commencing upon the date hereof ("Initial Year") and shall be
automatically renewed for one additional year thereafter unless either MTI or
NDI provides written notice, not later than thirty (30) days prior to the end of
the Initial Year, to the other party indicating such party's intention that the
Agreement not be renewed for an additional year (the "Term").
(b) Termination for Breach. In the event of a breach by either Party of any
provision of this Agreement, the non-breaching Party shall give written notice
of such breach to the breaching Party, detailing the nature of such breach in
sufficient detail to allow the breaching party to cure, if cure is possible. If
such breach is not cured by the breaching Party within ten (10) days after such
notice of breach, then the non-breaching Party may terminate this Agreement by
giving notice of termination to the breaching Party. Such termination shall be
effective on notice of termination by the non-breaching Party to the breaching
Party.
(b) Termination for Receivership. In the event a case or proceeding is
filed with respect to either Party under the bankruptcy laws of the United
States of America (as now or hereafter in effect) or under any insolvency,
reorganization, receivership, or readjustment of debt statute or law of any
jurisdiction, this Agreement may then be terminated immediately by the other
Party upon notice.
2. Transportation Services. During the Term of this Agreement, MTI shall
provide drivers to make deliveries on behalf of NDI on the delivery routes set
forth on Schedule A attached hereto. NDI may amend Schedule A to add, substitute
or delete delivery routes after 90 days from the date of this Agreement. Such
amendments to Schedule A shall not take effect until 30 days after notice to MTI
and no sooner than the date 120 days from the date of this Agreement. Except
during the term of that certain Truck Lease Agreement between NDI and DGD, of
even date herewith ("DGD/NDI Lease"), during which NDI shall provide delivery
trucks, MTI shall provide the necessary vehicles to be used by such drivers to
perform the services required hereunder.
3. Fees for Transportation Services; Deposit. NDI agrees to pay the
following (collectively, "Fees"):
(a) NDI agrees to pay as a fee for the transportation services, the amounts
set forth on Schedule B attached hereto. Until the fees set forth on Schedule B
can be reviewed by both parties hereto, NDI agrees to reimburse MTI for any
monthly costs which exceed the amount calculated to arrive at the fees set forth
on Schedule B attached hereto. MTI agrees to credit NDI for any amount by which
the amount calculated for the fees on Schedule B exceed MTI's monthly cost. NDI
also agrees to deliver to MTI upon execution of this Agreement a refundable
deposit in the amount of $180,500 to cover two weeks estimated fees in advance.
(b) NDI agrees to pay as a fee for the use of the delivery vehicles a fee
equal to the amount of all charges payable by MTI to DGD, as and when due from
MTI to DGD, under that certain Truck Lease Agreement by and between MTI and DGD,
of even date herewith ("DGD/MTI Lease"). Such fee shall be payable to MTI
commencing at such time as MTI becomes responsible for providing delivery
vehicles under this Agreement and shall continue to be payable thereafter until
the first anniversary of the date hereof whether (i) all, or any, of such
vehicles are required by NDI, or (ii) this Agreement is earlier terminated for
any reason.
4. Invoice; Payment; Deposit. MTI shall invoice NDI for the fees due under
Section 3(a) on 1st and the 15th day of each month. Payment of each such invoice
shall be made immediately upon receipt by NDI of such invoice. A reconciliation
and any adjustments required thereby shall be effected by the parties within
five (5) business days after the invoice date.
5. Independent Contractors. MTI shall be an independent contractor to NDI
with respect to the performance of the services to be performed under Section 2
hereof.
2
Nothing contained in this Agreement shall make MTI, its employees or the
Drivers, employees of NDI.
6. Force Majeure. MTI shall not be liable for its failure to perform
hereunder to the extent that such performance is made impracticable, delayed or
prevented, in whole or in part, due to any acts of God, fires, wars, labor
unrest, laws or orders, whether valid or invalid. If MTI fails to perform
hereunder as a result of any occurrence described in the preceding sentence, MTI
shall (i) give written notice to that effect to NDI within 10 days after such
occurrence together with a statement setting forth reasonably full particulars
concerning such occurrence and (ii) during the period any services required to
be provided under Section 2 hereof cannot be provided as a result of such
occurrence, use reasonable efforts to remedy such occurrence. To the extent
required by any such occurrence, the performance by MTI hereunder shall be
suspended during the continuance of any such occurrence and this Agreement shall
otherwise remain unaffected (except for NDI's obligation to pay the Fees, which
shall also be suspended). If such occurrence is remedied during the time that
any services to be performed under Section 2 hereof affected by such occurrence
are required to be provided under this Agreement, MTI shall promptly notify NDI
and any such suspension shall end.
7. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally (by courier or
otherwise), sent by certified, registered or express mail, postage prepaid and
return receipt requested, or transmitted by facsimile (with a copy of such
notice or other communication and a confirmation of transmission sent by
certified, registered, or express mail, postage prepaid and return receipt
requested no later than the close of business on the next business day following
such transmission) and shall be addressed as follows:
when MTI is to be notified: Meadow Trucking, Inc.
000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx XxXxxx
Facsimile: (000) 000-0000
when NDI is to be notified: Xxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
3
A Party may, by notice given in accordance with this Section 7 to the other
Party, designate another address or person to which notices required or
permitted to be given pursuant to this Agreement shall thereafter be
transmitted. Each notice transmitted in the manner described in this Section 7
shall be deemed to have been given, received and become effective for all
purposes at the time it shall have been (i) delivered to the addressee as
indicated by the return receipt (if transmitted by mail), transmitted to the
addressee (if transmitted by facsimile and subject to delivery of the mailed
copy thereof) or the affidavit of the messenger (if transmitted by personal
delivery), or (ii) presented for delivery to the addressee as so indicated
during normal business hours, if such delivery shall have been refused for any
reason.
8. Entire Agreement. This Agreement (including the schedules attached
hereto) contains the entire agreement and understanding between the Parties with
respect to the subject matter hereof and cancels and supersedes all of the
previous or contemporaneous agreements, representations, warranties and
understandings, whether written or oral, by or between the Parties with respect
to the subject matter hereof.
9. Amendments. No modification or amendment of this Agreement shall be
binding upon a Party unless such modification or amendment is set forth in a
written instrument which is executed and delivered on behalf of each Party by an
officer of, or attorney-in-fact for, such Party.
10. Waivers. No waiver of any provision of this Agreement shall be binding
upon a Party unless such waiver is expressly set forth in a written instrument
which is executed and delivered on behalf of such Party by an officer of, or
attorney-in-fact for, such Party. Such waiver shall be effective only to the
extent specifically set forth in such written instrument. Neither the exercise
nor the delay or failure to exercise any right, power or remedy shall operate as
a waiver of, the right to exercise, or impair, limit or restrict the exercise
by, any Party of any such right, power or remedy any other right, power or
remedy at any time and from time to time thereafter. No waiver of any right,
power or remedy of a Party shall be deemed to be a waiver of any other right,
power or remedy of such Party or shall, except to the extent so waived, impair,
limit or restrict the exercise of such right, power or remedy.
11. Governing law. This Agreement shall be governed and construed in
accordance with the laws of the State of New Jersey, without giving effect to
principles of conflicts of laws. Each Party consents and submits to the
jurisdiction of any state or federal court in the State of New Jersey. Each
Party consents to service of process upon it with respect to any such proceeding
by registered mail, return receipt requested, and by any other means permitted
by applicable laws. Each Party waives any objection that it may now or hereafter
have to the laying of venue of any such proceeding in state or federal court in
the State of New Jersey and any claim that it may now or hereafter have that any
such proceeding in any such court has been brought in an inconvenient forum.
4
12. Arbitration. The Parties acknowledge and agree that the transactions
contemplated herein substantially affect and impact interstate commerce.
Therefore, all disputes or differences between NDI and MTI arising under or
which are related to this Agreement upon which an amicable understanding cannot
be reached within 30 days shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
hereinafter provided, and judgment upon the award entered by the Arbitrators (as
defined below) may be entered in any court having jurisdiction thereof. The
"Arbitrators" shall consist of one neutral arbitrator (or as provided below,
three neutral arbitrators). The Parties agree that the arbitration, if
implemented under this Agreement, shall be held at a site selected by the
Arbitrators. The Parties agree to arbitrate within 90 days following the
transmittal of written demand of either Party to arbitrate any dispute
arbitrable under this Agreement. The Parties will in good faith, within 15 days
following notice of written demand to arbitrate attempt to agree on a single
Arbitrator. If the Parties cannot within 15 days thereafter agree on a single
Arbitrator, each of the Parties shall appoint an Arbitrator, notifying the other
Party of the name and address of such Arbitrator. The Arbitrators appointed by
each Party shall agree upon and appoint a third neutral Arbitrator. If either
Party shall fail to appoint an Arbitrator as herein provided, or should the two
Arbitrators so named fail to select the third Arbitrator within 30 days after
their appointment, then, in either event, the President of the American
Arbitration Association or its successor shall appoint such second and/or third
Arbitrator. A decision of a majority of the Arbitrators shall be final and
binding and there shall be no appeal therefrom. The Arbitrators shall within 45
days after the last hearing enter an award and the award shall be supported by a
written opinion. The fees of the Arbitrators and the direct costs of the
arbitration shall be shared equally by the Parties; all other costs of the
respective Parties including, without limitation, fees and expenses of the
respective Party's attorneys, witnesses and discovery shall be paid by the
respective Party, except to the extent that the Arbitrators otherwise direct
based on the equities of the situation. The arbitration shall be held in New
Jersey, unless otherwise agreed between the Parties.
13. Binding Effect; Assignment; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. Except as otherwise provided
herein, neither NDI nor MTI shall assign any of its rights or delegate any of
its duties hereunder (in whole or in part and by operation of law or otherwise)
without the prior written consent of the other Party hereto. Any other
assignment of rights or delegation of duties under this Agreement by a Party
without the prior written consent of the other Party, if such consent is
required hereby, shall be void. No Person (including, without limitation, any
employee of a Party) shall be, or be deemed to be, a third party beneficiary of
this Agreement.
14. Severability. If any provision of this Agreement shall hereafter be
held to be invalid, unenforceable or illegal, in whole or in part, in any
jurisdiction under any circumstances for any reason, (i) such provision shall be
reformed to the minimum extent necessary to cause such provision to be valid,
enforceable and legal while preserving the intent of the Parties as expressed
in, and the benefits to the Parties provided by, this Agreement or (ii) if such
provision cannot be so reformed, such provision shall be severed
5
from this Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any other
provision of this Agreement.
15. Headings. The headings in this Agreement have been inserted for
convenience of reference only, and shall not be considered a part of this
Agreement and shall not limit, modify or affect in any way the meaning or
interpretation of this Agreement.
16. Counterparts. This Agreement may be executed by the Parties in any
number of counterparts, each of which when so executed and delivered shall
constitute an original instrument, but all such counterparts shall together
constitute one and the same instrument. This Agreement shall become effective
and be deemed to have been executed and delivered by all of the Parties at such
time as counterparts shall have been executed and delivered by both of the
Parties, regardless of whether each of the Parties has executed the same
counterpart.
6
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year first above written.
MEADOW TRUCKING, INC.
By: /s/ Xxxxxxx XxXxxx
-----------------------
Name: Xxxxxxx XxXxxx
Title: President
XXXXXX DISTRIBUTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice-President
SCHEDULE A
(Delivery Routes)
Delivery Route Number
---------------------
1
2
3
4
5
6
7
8
9-34
10
11
12
13
17
18
19
20
21
22
23
24
25
26
28
29
31
32
34
35
36
37
38
40
43
44
48A
48B
49
SCHEDULE B
(Fees for Delivery Services)
The fees for delivery services to be performed under this Agreement shall
be $9,250 per month per delivery route set forth on Schedule A to this
Agreement, payable in accordance with the terms of Section 4 hereof.
