Managed Transportation Master Services Agreement
Last Updated: 01/06/23
This Managed Transportation Master Services Agreement (“MSA”), effective as of the SOW Effective Date (as defined in the applicable SOW), is made between Customer (as defined in the applicable SOW) and Loadsmart, Inc. (“Loadsmart”); (each of Customer and Loadsmart, a “Party,” or in the aggregate, the “Parties”).
WHEREAS, Customer is a distributor of certain products (“Product”) and in connection therewith requires transportation and logistics services for purposes of coordinating transportation for the Products;
WHEREAS, Loadsmart is authorized by the Federal Motor Carrier Safety Administration (“FMCSA”) to operate as a Registered Property Broker pursuant to license issued in Number MC-872918 and arranges transportation and logistics services using various third-party providers;
WHEREAS, Loadsmart agrees to provide to Customer, and Customer agrees to purchase from Loadsmart, transportation logistics services as set forth in this MSA and each statement of work entered into pursuant hereto (the “Services”);
WHEREAS, it is contemplated that the Services will include Loadsmart tendering loads on behalf of Customer to motor carriers selected by Customer pursuant to a Customer provided routing guide or as otherwise directed by Customer (“Customer Contracted Carriers”) and motor carriers selected and contracted by Loadsmart (“Loadsmart Contracted Carriers”);
NOW THEREFORE, in consideration of the above recitals and the various terms and conditions contained herein and other good and valuable consideration the receipt and sufficient of which are hereby acknowledged, the parties agree as follows:
1. Structure of the Agreement.
Loadsmart shall provide to Customer the Services specified in one or more statements of work (“SOW”). Each is an “Incorporated Document.” This MSA, together with all Incorporated Documents, makes up the “Agreement” between the Parties. In the event of a conflict between the terms of this MSA and the terms of any Incorporated Document, the documents shall prevail in the following order, (i) the SOW, then (ii) this MSA shall control.
2. Term and Termination:
The term of this MSA shall begin on the initial SOW Effective Date and shall remain in effect for as long as there is an effective SOW in connection with this MSA. For the avoidance of doubt, this MSA will automatically terminate if there is are no effective SOWs in place.
2.2. Post-Termination Obligations.
Within ten (10) days of expiration or termination of this MSA for any reason, Customer may request return or destruction of all data provided by Customer to Loadsmart for use in connection with providing the Services. Loadsmart shall return all such data to Customer in a format reasonably agreed by the parties or destroy such data, as directed by Customer, within thirty (30) days of such request.
2.3. Termination Assistance.
Upon expiration or termination of this MSA for any reason other than termination by Loadsmart due to Customer’s breach, failure to make payments when due, insolvency or bankruptcy, upon Customer’s request, Loadsmart will continue to provide the Services to Customer for up to ninety (90) days during decommissioning or transition of the Services to Customer or Customer’s agent. Customer shall pay Loadsmart for such Services in accordance with the terms of this MSA. If Customer requests transition assistance services in addition to the Services described in this MSA, the Parties shall negotiate in good faith the scope of such additional services and the applicable fees, and Loadsmart shall only be required to provide such additional transition assistance services to the extent the parties agree in writing with respect thereto. Notwithstanding anything to the contrary herein, Customer shall pay to Loadsmart all outstanding Fees within ten (10) days after the expiration or termination of this MSA.
Notwithstanding anything to the contrary, the following terms and conditions of this MSA shall survive termination or expiration thereof: Sections 2.3 (Post-Termination Obligations), 2.4 (Termination Assistance), 2.5 (Survival), 7 (Confidentiality), 8 (Indemnification), 9 (Warranties and Disclaimers), 10 (Limitation of Liability), 11 (Insurance), 12 (Loadsmart Intellectual Property), 13 (Choice of Law and Venue), and 15 (Miscellaneous).
3. Services and Responsibilities:
3.1. Loadsmart’s Services and Responsibilities.
Loadsmart shall provide the Services to Customer in compliance with all applicable Federal, state and local laws and regulations.
In performing the Services, Loadsmart will only tender Product loads hereunder to carriers included in the Customer provided routing guide or as otherwise directed by Customer, except to the extent tendered to Loadsmart to arrange transportation pursuant to Loadsmart’s User Agreement (https://loadsmart.com/user-agreement/
) incorporated herein by reference.
3.2. Customer’s Responsibilities.
As between Customer and Loadsmart, and except to the extent otherwise agreed in writing by the Parties, Customer is responsible for its own Product procurement, warehousing, order fulfillment, customer service, distributors and supplier management. Customer represents and warrants that all of the Product will comply with all applicable Federal, State and local laws and/or regulations relating to the manufacture, importation, adulteration, contamination, packaging or labeling of such product.
Customer shall retain sole responsibility for (a) vetting Products for compliance to federal, state or local laws (including common law), ordinances, statutes, rules, regulations, (b) executing written transportation agreements with Customer Contracted Carriers; and (c) paying all of Customer’s third party providers, including, without limitation, Customer Contracted Carriers, unless expressly set forth an applicable SOW.
4. Business Reviews, Changes in Operating Parameters or Conditions:
4.1. Business Reviews.
The Parties’ duly authorized representatives (as designated by each Party) shall meet to review the Service performance and discuss Operating Parameters (as defined in Section 4.2) and any other issues between the two Parties relating to this Agreement (“Business Reviews”). Such Business Reviews shall be held, at a minimum, once each calendar quarter. Subject to the foregoing, the Business Reviews will be scheduled at mutually convenient times for the Parties. Based on the Business Reviews, Loadsmart will identify, evaluate, and propose improvement opportunities, including without limitation, new or revised logistics strategies that support and facilitate the achievement of Customer’s overall business objectives.
4.2. Changes in Operating Parameters or Conditions.
Customer acknowledges and agrees that Loadsmart calculates the Fees (as defined herein) based on and in reliance upon certain key assumptions. Such assumptions shall be set forth in the applicable Incorporated Documents as “Operating Parameters.” In the event of a change in any Operating Parameters or a “Changed Condition” (as defined below), Loadsmart may propose an adjustment to the Fees (as defined herein) to respond to the change by providing Customer with thirty (30) days prior written notice thereof, setting forth the basis for such adjustment, which notice shall be given prior to the implementation of the adjustment. If the Parties are unable to agree upon the adjustment within thirty (30) days of Loadsmart’s notice of the adjustment, Loadsmart may terminate this MSA upon ninety (90) days’ written notice. For the avoidance of doubt, both Parties agree to continue their obligations under the Agreement during the ninety (90) day notice period prior to any such termination.
“Changed Condition” means the enactment or dissemination of any new law or regulation or the imposition of a new material condition on the issuance or renewal of any permit, license or approval after the Effective Date hereof that: (a) materially increases Loadsmart’s operating costs to perform the Services or otherwise materially adversely affects the ability of Loadsmart to perform the Services, or (b) materially decreases the Fees (as defined herein) to which Loadsmart would otherwise be entitled under an Incorporated Document.
5. Fees, Charges, Expenses and Taxes.
Loadsmart shall be paid for the Services contemplated by this Agreement as further defined in the applicable SOW. Customer shall pay to Loadsmart all fees, charges and expenses (“Fees”) as invoiced within thirty (30) days of Customer’s receipt of the invoice with no right of set-off. All Fees will be billed and paid in U. S. dollars. Payment shall be made as specified in the invoice.
5.2. Late Payments.
If Customer fails to make a payment of the Fees when due, Customer shall pay to Loadsmart a late payment charge at the rate of one and one-half percent (1.5%) per month or, if lower, the highest rate allowed by applicable law. The late payment charge shall be calculated from the date that the unpaid Fees become due and shall be compounded annually for the period during which any such Fees remain unpaid.
Customer agrees to pay, indemnify and hold Loadsmart and its affiliates harmless from and against all sales, use, personal property, gross receipts, excise, franchise and business taxes (including any penalties, fines or interest thereon) imposed by any federal, state or local government or taxing authority with respect to the Services performed by Loadsmart under this Agreement. Notwithstanding the foregoing, Loadsmart shall be solely responsible for all income taxes arising from its operations however and by whomever imposed.
6. Title to Product.
Title to Product shall remain at all times with Customer and shall not pass to Loadsmart under any circumstances unless otherwise specifically provided in this Agreement.
Each party agrees that all business, technical, financial and other information that it obtains from the other is the confidential property of the disclosing party (“Confidential Information” of the disclosing party). Except as expressly and unambiguously allowed herein, the receiving party will hold in confidence and not use or disclose any Confidential Information of the disclosing party and shall similarly bind its employees in writing. Upon termination of this Agreement or upon request of the disclosing party, the receiving party will return to the disclosing party or destroy (and certify such destruction) all Confidential Information of such disclosing party, all documents and media containing such Confidential Information and any and all copies or extracts thereof. The receiving party shall not be obligated under this Section with respect to information the receiving party can document: (a) is or has become readily publicly available without restriction through no fault of the receiving party or its employees or agents; or (b) is received without restriction from a third party lawfully in possession of such information and lawfully empowered to disclose such information; or (c) was rightfully in the possession of the receiving party without restriction prior to its disclosure by the other party; or (d) was independently developed by employees or consultants of the receiving party without access to such Confidential Information; or (e) is required to be disclosed by law or order of court of competent jurisdiction.
8.1. Loadsmart Indemnification.
Loadsmart shall indemnify, defend and hold Customer and its affiliates, and their directors, employees, officers, and agents harmless from and against any and all fines, penalties or assessments by any government agency and any and all third party liabilities, claims, suits, demands, actions, fines, damages, losses, costs and expenses (including reasonable attorneys’ fees) (collectively, “Claims”) arising from or to the extent caused by (i) any alleged infringement of the copyrights, patent or other intellectual property rights of a third party by any transportation management system provided by Loadsmart to Customer as part of the Services (the “Loadsmart Platform”) or (ii) the violation by Loadsmart of any applicable law or regulation.
In the event of a claim of infringement or misappropriation with respect to the Loadsmart Platform, Loadsmart shall at no cost to Customer either (i) modify or replace the Loadsmart Platform so that it no longer infringes or misappropriates, or (ii) obtain a license for Customer’s continued use of the Loadsmart Platform in accordance with this Agreement. If neither option (i) nor (ii) are available on commercially reasonable terms, Loadsmart may terminate the Agreement upon thirty (30) days’ written notice and refund to Customer any prepaid Fees covering the remainder of the term after the effective date of termination. The foregoing in this Section 9.1 shall be Loadsmart’s sole obligation and Customer’s exclusive remedy with respect to any alleged infringement by Loadsmart of any third party’s intellectual property rights.
8.2. Customer Indemnification.
Customer agrees to indemnify, defend, and hold Loadsmart and its affiliates, and their directors, employees, officers, and agents harmless from and against any Claims, arising out of or to the extent caused by (i) the packaging, distribution, marketing, use or sale of the Products or Customer’s instructions regarding such Products, (ii) the use by Loadsmart of any third party providers selected by Customer to provide services to Customer, including, without limitation, Customer Contracted Carriers, warehouseman, forwarders and customs brokers, or (iii) the violation by Customer of any applicable law or regulation.
8.3. Indemnification Process.
Each Party (the “Indemnitee”) shall provide the other Party (the “Indemnitor”) with prompt written notice of any claim for which indemnification is sought hereunder, provided that that failure to provide such prompt notice shall excuse an Indemnitor’s obligation hereunder only to the extent that the Indemnitor is prejudiced by the delay. The Indemnitee shall: (i) give the Indemnitor sole control of the defense and settlement of the claim (provided that the Indemnitor may not settle any claim unless it unconditionally releases the Indemnitee of all liability), and (ii) provide the Indemnitor all reasonable assistance, at the Indemnitor’s expense.
9. Warranties and Disclaimer.
Each Party represents and warrants to the other that (a) it has the full power and authority to enter into the Agreement and perform all obligations and conditions to be performed by it under the Agreement without any restriction by any other agreement or otherwise; (b) the execution, delivery and performance of the Agreement have been duly authorized by all necessary corporate action of such party; and (c) the Agreement constitutes the legal, valid and binding obligation of such party.
Except as expressly set forth in this Agreement, the Services and the Loadsmart Platform are provided “as is” and Loadsmart makes no representations or warranties. Loadsmart expressly disclaims any implied warranties or conditions of any kind, including, without limitation, any warranty or condition of quality, performance, merchantability, fitness for a particular purpose or noninfringement. Except as specifically set forth in this Agreement, Loadsmart does not warrant, guarantee, or make any representations regarding the use, or the results of the use, of the Services, the Loadsmart Platform or any other materials in terms of correctness, accuracy, reliability, or otherwise.
10. Limitation of Liability.
10.1. Liability Limitations for Loss or Damage to Product.
Except as specifically provided in an applicable SOW, (i) Loadsmart shall have no liability for any loss of, or damage to, or delay of the Products of Customer while in the custody of Customer’s third party providers, including, without limitation, Customer Contracted Carriers, (ii) any insurance or other protection of Customer’s Product shall be procured by Customer and at Customer’s expense and (iii) all claims in connection with acts of a third party provider shall be filed and brought against the third party by Customer. Loadsmart shall reasonably cooperate with Customer in the filing of such claims with third party providers; provided that in no event shall Loadsmart have any responsibility to pay Customer any amounts which a third party provider fails or refuses to pay with respect to any claim. Loadsmart’s aggregate liability to Customer for breach of this Agreement shall not exceed the amount of fees paid by Customer to Loadsmart under this Agreement during the previous twelve (12) month period under the SOW that applies to the Services for which the breach relates.
IN NO EVENT SHALL LOADSMART BE LIABLE FOR LOSS OR DAMAGE TO/AND OR DELAY IN THE DELIVERY OF A SHIPMENT CAUSED BY IT OR ITS AGENTS NEGLIGENCE IN AN AMOUNT IN EXCESS OF USD $100,000 PER OCCURRENCE, AND THE MAXIMUM AGGREGATE LIABILITY OF EACH PARTY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL NOT EXCEED USD $2,000,000. EACH PARTY HERETO WAIVES WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM TO PUNITIVE, EXEMPLARY, MULTIPLIED, INDIRECT, CONSEQUENTIAL OR LOST PROFITS/REVENUES DAMAGES.
During the performance of Services, the Parties shall maintain the following minimum insurance coverage. The Parties shall provide a certificate of insurance evidencing such coverage at the start of work under the Agreement and from time to time, upon request by the other Party, and the Parties shall take adequate steps to ensure that the other Party shall be named as an additional insured on the Comprehensive General Liability Insurance certificate.
- a) Workers’ Compensation insurance in the amount not less than statutory limits.
- b) Employer’s Liability insurance in the amount of not less than $1,000,000.
- c) Comprehensive General Liability insurance covering the Party and its agents and employees (including contractual and product liability coverage) for bodily injury and property damage in the minimum combined single limit amount of $1,000,000 per occurrence, $2,000,000 aggregate, or in such greater amounts as may be required by federal or state authorities.
12. Loadsmart Intellectual Property.
All of Loadsmart’s work product under this Agreement and all concepts, inventions, ideas, patent rights, know-how, data, trademarks, copyrights and other intellectual property rights which are related to, arise out of, or are employed or developed in connection with all Services performed pursuant to the Agreement, including without limitation, the Loadsmart Platform, are and shall remain the exclusive property of, and all ownership rights therein do and shall remain with Loadsmart. Loadsmart shall retain sole and exclusive ownership of all right, title and interest to and in its proprietary information, templates, processes, methodologies, inventions, patents, know-how and standard operating manuals and information contained therein, software and other intellectual property owned by it as of the Effective Date or thereafter and all derivative works thereof developed or used by Loadsmart to provide the Services. Customer acknowledges and agrees that Customer’s rights to use any such Loadsmart intellectual property are non-exclusive and limited to receiving the Services during the applicable term.
13. Choice Of Law And Venue.
All questions concerning the construction, interpretation, validity and enforceability of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, without giving effect to any choice or conflict of law provision or rule that would cause the laws of any other jurisdiction to apply. Any legal action arising under or pursuant to this Agreement shall be brought and maintained only in the state and federal courts located in Cook County, Illinois.
14. Dispute Resolution.
The parties recognize that although they are neither partners nor joint ventures, they are engaged in what is intended to be a long-term mutually beneficial commercial relationship. In an effort to further this relationship, the parties, therefore, agree that they shall use commercially reasonable efforts to resolve, informally and at the appropriate levels of their respective management, any disagreements or disputes that may arise under this Agreement at the earliest occasion in an effort to prevent manageable issues from becoming crises. All such agreements reached by management shall be reduced to writing and signed by duly authorized representatives of the parties.
15.1. Independent Contractor.
It is understood and agreed that the relationship between Customer and Loadsmart is solely that of independent contractor and not as an agent, joint venturer, owner-operator or employee and that no employer/employee relationship exists, or is intended. Neither Party shall hold itself out as an agent of or in a joint venture with the other Party, and neither Party shall have any authority to act on behalf of the other Party.
15.2. Entire Agreement.
The Agreement constitutes the entire agreement between the Parties with respect to the subject matter of the Agreement and supersedes and replaces all prior communications, agreements and understandings of the Parties with respect to the subject matter hereof. The Parties may renegotiate and amend the terms and conditions of the Agreement, but no amendment to the Agreement shall be binding on either Party unless it is reduced to writing and signed by the authorized representatives of both Parties.
15.3. Third Party Beneficiaries.
Except as otherwise expressly provided herein, the execution and delivery of this MSA shall not be deemed to confer any rights upon, nor obligate any of the parties hereto, to any person or entity other than the Parties hereto or other than as expressly provided herein.
15.4. Successors and Assigns.
This Agreement shall be binding upon the successors and assigns of parties hereto. Except in connection with the sale or other disposition of all or a substantial part of its assets and business, neither party shall assign this Agreement or any part thereto, without the prior written consent of the other party, which shall not be unreasonably withheld. Notwithstanding the foregoing, either Party may assign this Agreement to wholly owned subsidiaries or affiliates.
Any headings of the sections or subsection of the Agreement are solely for the convenience of the Parties hereto, are not a Party of the Agreement and shall not be used for the interpretation or determination of the validity of the Agreement or any provision hereof.
15.6. Invalid Provisions.
If any provisions of the Agreement are held to be invalid, the remainder of the Agreement shall remain in full force and effect with the offensive term or condition being stricken to the extent necessary to comply with conflicting law.
No provisions of the Agreement shall be waived by any Party hereto, unless such waiver is written and signed by the authorized representative of the Party against whom such waiver is to be enforced.
15.8. Force Majeure.
Neither Party shall be held responsible for any delay or failure in performance of any part of the Agreement to the extent such delay or failure is due to causes beyond its control and without its fault or negligence, including but not limited to, acts of God, acts of the public enemy, fire, explosion, flood, war, riots, strike, lockouts, pandemics, epidemics cyberattacks, acts or request of any governmental authority or any cause beyond its control, whether or not similar to the foregoing.
All written notices required by or related to the Agreement shall be in writing and sent to the Parties either by email or at the addresses set forth in the applicable SOW, or such other address as a Party may identify to the other Party in writing. Any such notice shall be deemed given when received and shall be sent by (1) registered or certified mail, return receipt requested, posted prepaid, or (2) overnight courier service, or (3) personal delivery (4) read receipt on an email.