ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") dated as of August
12, 1997 (the "Effective Date"), is entered into by and between Jevic
Transportation, Inc. ("Jevic") and Jevic Transportation Systems, Inc. ("JTS"),
an affiliate of Jevic.
WITNESSETH:
1. Services.
a. JTS hereby employs Jevic to perform the following administrative
services ("Services") in accordance with the terms and conditions set forth
in this Agreement. Jevic will, upon request, provide services to JTS
relating to employee payroll, records and benefits administration, benefits
planning and design, records management, insurance, certain treasury
operations, cash administration and other services. Upon request of JTS,
Jevic may also from time to time perform such other services, which, in the
opinion of Jevic and JTS, are proper and advisable in assisting JTS to
administer its business affairs and operations.
b. As an aid in providing the Services, Jevic will undertake the
following activities:
(1) representatives of Jevic will at JTS's request periodically
visit JTS's offices to review issues that may arise in the areas
specified in paragraph 2(a); and
(2) Jevic will, upon request, review and prepare written comments
for JTS on documents made available to Jevic by JTS with respect to
the areas specified in paragraph 2(a).
2. Term. The initial term of this Agreement will extend for a period of one
(1) year from the Effective Date. After expiration of Initial Term, Agreement
shall extend automatically for successive one (1) year terms unless JTS provides
to Jevic written notice of its intentions not to exercise automatic renewal
granted herein ninety (90) days prior to commencement of the next one (1) year
term.
3. Payment To Jevic.
a. JTS will pay Jevic as a monthly fee an amount equal to the actual
cost incurred by Jevic in providing the Services hereunder. Any federal,
state or local excise taxes or sales taxes imposed on the provision of
Services shall be billed to JTS under paragraph 5(c) below.
b. JTS will reimburse Jevic for all reasonable business and travel
expenses and any other unanticipated or extraordinary out-of-pocket
expenses incurred by Jevic in the performance of its obligations hereunder.
c. Any fees or expenses payable pursuant to this Agreement shall be
payable by JTS monthly by the fifteenth day following Jevic's presentation
to JTS of a written invoice of charges. Upon JTS's request, Jevic will
provide any further documentation required in support of such invoice.
Delinquent payment of any invoice provided hereunder shall be subject to a
finance charge in the amount of 1.25% per month as calculated beginning
sixty (60) days from the date of the invoice. Notice of any disputed
charges must be received by Jevic from JTS within sixty (60) days from the
date of the invoice in question. Credit for any disputed charges, approved
after review of notice received, will be applied in the invoice for the
calendar month immediately following the calendar month in which such
approval was granted. Nothing herein shall be construed to grant JTS any
right of set-off against Jevic or relieve JTS of its responsibility to pay
in full all charges as shown on each invoice.
4. Performance of Services. JTS will retain and exercise exclusive
direction and control over the management and properties of its business. Jevic
will have no authority to exercise any such direction or control. Jevic will
direct all correspondence, reports, and written communications solely to JTS.
Jevic will use its best efforts to provide the Services to JTS, and, in so
doing, to exercise the same degree of diligence and care it exercises in the
conduct of its own business. Jevic will not subcontract any of its obligations
hereunder or enter into any contract on behalf of JTS without the prior written
approval of JTS. Jevic shall not be liable to JTS for any claims, liabilities,
damages or other losses (including attorneys' fees) arising out of the
performance of any Services hereunder.
5. Audit.
a. JTS shall have the annual right to conduct an audit of Jevic's
books and records relating to the Services hereunder, by JTS's internal or
external auditors.
b. If JTS has a reasonable basis for suspecting that Jevic is in
breach of the Agreement, JTS shall have the right to perform an audit of
Jevic, separate and independent, from the right to audit as set forth in
paragraph 5(a), in order to determine if such a breach exists.
c. If, as a result of the audits performed pursuant to this Section 5,
JTS believes Jevic has breached the Agreement, Jevic shall have sixty (60)
days to perform an audit of its own and remedy any breach.
6. Independent Contractor. Jevic will act as an independent contractor in
the performance of its obligations under this Agreement. Jevic will retain
control of the manner and method of performance of its obligations under this
Agreement, and JTS will have the right of supervision merely as to the results
of the performance of the Services. Jevic will be responsible for payment of all
taxes, except federal, state and local excise or sales taxes on the Services,
arising out of Jevic's activities in accordance with this Agreement, including
by way of illustration but not limitation, federal and state income tax, social
security tax, unemployment insurance tax, and any other tax or business license
fee as required.
7. Non-Disclosure and Ownership.
a. Jevic agrees that all information obtained by Jevic as a result of
its performance of its obligations under this Agreement which concerns the
personal, financial, organizational, managerial, operational or other
affairs and resources of JTS will be treated confidentially by Jevic will
not be revealed to any other person, firm or organization except as
disclosure may be required by law or where the information has been
previously placed in the public domain other than by Jevic. This clause
will survive the termination of this Agreement.
b. Jevic agrees that all files, computer programs, tapes, records,
materials, data, papers, reports, and other information relating to JTS
which Jevic obtains as a result of its performance of its obligations under
this Agreement are vested in and owned by JTS as its exclusive property.
Jevic will return to JTS all such property owned by JTS and which is in
Jevic's possession upon termination of this Agreement or at any earlier
time immediately upon JTS's request. This clause will survive the
termination of this Agreement.
8. Hold Harmless. In providing the Services, Jevic shall not be liable to
JTS for and JTS shall hold Jevic harmless from any and all claims, losses,
liabilities, costs or expenses, including reasonable attorneys' fees and
interest and penalties arising from the performance of any Services hereunder
except to the extent that Jevic has made an error or omission which resulted
from the gross negligence or willful and wanton misconduct of Jevic's employees.
In no event shall Jevic be liable for any consequential damages, including lost
profits, loss of use of facilities or injury to the goodwill of JTS.
9. Notices. Any notices or other written communication to be given or
served hereunder will be deemed duly served if delivered personally or mailed by
registered mail, postage prepaid, and addressed as set forth below; provided,
however, that nothing contained herein shall be construed so as to limit the
ability of the parties to mutually agree for provision of notice in some other
manner or form.
If to JTS:
Jevic Transportation Services, Inc.
600 Creek Road
P.O. Box 5157
Delanco, NJ 08075
Attention: President
If to Jevic:
Jevic Transportation, Inc.
600 Creek Road
P.O. Box 5157
Delanco, NJ 08075
Attention: Vice President and Chief Financial Officer
or at such other address as the parties may subsequently designate to the other
by notice served as herein provided.
10. Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns.
Neither JTS nor Jevic may assign any of its rights or responsibilities hereunder
to any person without the prior written consent of the other.
11. Entire Agreement. The parties agree that this Agreement sets forth
their entire agreement, and there are no promises or understandings other than
those expressly stated herein.
12. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New Jersey.
13. Captions. Captions used in this Agreement are not part of this
Agreement, and are for the convenience of reference only, and do not affect the
meaning or construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JEVIC TRANSPORTATION, INC.
By: /s/ Paul J. Karvois
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Name: Paul J. Karvois
Title: President
JEVIC TRANSPORTATION SERVICES, INC.
By: /s/ Harry J. Muhlschlegel
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Name: Harry J. Muhlschlegel
Title: President