SATELLITE LOGISTICS GROUP, INC.
STANDARD TERMS AND CONDITIONS FOR CARRIERS
Effective 03/20/2012
These Standard Terms and Conditions (“Terms”) apply to transportation services (“Services”) provided by a motor carrier (“Carrier”) for Satellite Logistics Group, Inc. (“Broker”) under a Rate Confirmation, a Load Tender, or when the Terms are otherwise incorporated into a contract or other document by express reference.
1. DEFINITIONS
In addition to the terms defined under “Preliminary Matters” above, the following terms shall have the indicated meanings whenever this Agreement uses them in any grammatical form (unless the context clearly indicates a different meaning):
References to this “Agreement” include the Preliminary Matters above (items 1 through 3), the text of these Terms and Conditions (Articles 1 through 26), the signature blocks immediately following Article 26, the list of Appendices immediately following the signature blocks, and each listed Appendix that is populated with data or text, all as amended from time to time in accordance with Article 16 hereof.
"Broker Proprietary Information" is understood to mean business information and data made available by Broker in written, machine readable, graphic or sample form, including, without limitation, tariffs, price lists, vendor lists, customer lists, product descriptions, flow charts (and other business process descriptions), shipping forms, software (including related applications), and performance specifications; provided that all tangible expressions of such information are clearly and conspicuously labeled "BROKER PROPRIETARY INFORMATION" or with another equivalent legend. Broker Proprietary Information is also understood to include information and data disclosed orally, visually or electronically, provided that it is identified at the time of disclosure as proprietary, and provided further that any subsequent written summary or other tangible expression of such information bears the type of label or legend described in the previous sentence.
A “Business Day” is any calendar day other than a Saturday, a Sunday or a United States Federal holiday.
“Consent” means a Party’s advance consent, in written or electronic form, to an act or omission proposed by the other Party.
“Customer-Specific Addenda” are consecutively numbered addenda to Exhibit 4 setting forth rates, charges, terms and conditions applicable only to Services by Carrier for specific Shippers.
A “Designated Contact” for a Party is an individual authorized on the signature page(s) of this Agreement to act for such Party in executing this Agreement, in receiving Notices, or in executing any amendments to this Agreement. A “Designated Pricing Contact” for a Party is an individual authorized to execute amendments relating only to Exhibit 4 on behalf of that Party.
A “Distributor” is a Shipper engaged in selling, shipping and/or other distribution activities with respect to alcoholic beverages whether as a wholesaler, retailer or both.
A “Shipper” is any party tendering or causing freight to be tendered for transportation in commerce. This includes one or more customers of Broker, Broker-managed or controlled shipping facilities, and/or Distributor(s).
“FMCSA” means the Federal Motor Carrier Safety Administration within the United States Department of Transportation, or any predecessor or successor agency to the Federal Motor Carrier Safety Administration.
A “Load Tender” is a consecutively numbered offer of a shipment or series of shipments to Carrier by Broker in either an electronic or a paper-based format describing shipment characteristics, requirements, terms and price, which upon receipt Carrier will either accept or reject.
“Notice” means written or electronic notification by one Party to the other concerning an event. Particular provisions of this Agreement may require Notice either before an event (“Prior Notice”) or afterward (“Subsequent Notice”). Unless otherwise specified, the required notice period is either a minimum of one Business Day before an event in the case of Prior Notice, or a maximum of one Business Day after the event in the case of Subsequent Notice.
A “Rate Confirmation” is an electronic or paper-based acceptance by Carrier of a Load Tender, which refers to that Load Tender by number and incorporates agreement to the rate, total charges and terms associated with the shipment(s) offered in the Load Tender.
“Uniform Receipt” means a written or electronic receipt issued by Carrier, in lieu of a bill of lading, for any shipment tendered to it within the scope of the Services.
2. LEGAL STATUS OF PARTIES AND SERVICES
2.1 Carrier’s Operating Authority. Carrier represents and warrants that it is currently and validly registered and in good standing with FMCSA as a motor carrier of property in interstate and foreign commerce pursuant to 49 U.S.C. § 13902. A copy of Carrier’s FMCSA registration is attached to this Agreement as Exhibit 2.1-A. If any operations within Canada or Mexico or any U.S. intrastate operations are contemplated as part of the Services under Section 3.1 below, Carrier represents and warrants that it holds all authorities necessary for such Services. Copies of such authorities, if any, are attached to this Agreement as Exhibit 2.1-B. Carrier shall give Subsequent Notice to Broker concerning any change in its FMCSA registration, or in other authorities used in the Services, no later than two (2) Business Days after the effective date of the change.
2.2 Compliance with Laws. (a) Carrier shall comply with all laws, regulations, and rules applicable to its operations and its performance of transportation and services, including without limitation those pertaining to security, the environment, and CTPAT Supply Chain Security Best Practices as published by U.S. Customs and Border Protection. In addition, Carrier will be subject to the terms cited in Broker’s Supply Chain Security Best Practices available on Broker’s website at the following Internet address http://www.slg.com/admin/SLGSecurityBestPractices.htm.
2.3 Carrier’s Regulatory Compliance and Safety Rating. Carrier also represents and warrants that its current FMCSA safety rating, if one has been assigned to it, is not less than “Satisfactory” nor below a level equivalent to “Satisfactory” under any future revision of safety rating methodology adopted by FMCSA through a formal rulemaking docket. Proof of such safety rating, if assigned, is reproduced as Exhibit 2.2 to this Agreement. If Carrier has not been assigned a safety rating by FMCSA, then Carrier shall be allowed to perform Services with “Unrated” status from FMCSA. Carrier shall give Subsequent Notice to Broker concerning any FMCSA compliance review of its operations, any assignment of an FMCSA safety rating, or any change in its existing FMCSA safety rating, no later than two (2) Business Days after the completion of the compliance review or the effective date of the rating action. If Broker receives any derogatory information about Carrier’s safety performance from any credible source (including but not limited to data entered by FMCSA in Carrier’s on-line SAFER profile showing that Carrier’s vehicle or driver out-of-service percentages are above national norms), Broker reserves the right, on reasonable notice and terms, to request and review Carrier’s driver and vehicle safety records, insurance loss runs, and other information on its safety management program.
2.4 Drivers, Equipment, and Safety. Carrier (a) shall ensure that its drivers are properly licensed, qualified, and competent to operate the motor vehicles used to transport the shipment, and to provide related services; (b) shall provide equipment (tractors, trailers, straight trucks, chassis, containers, etc.) that is at all times (i) clean; (ii) in good operating condition and repair; (iii) in compliance with all applicable Federal and State laws and regulations; and (iv) suitable and properly configured to safely load, transport, and unload each shipment tendered by Broker.
2.5 Broker’s Authority. Broker represents and warrants that it is duly registered with FMCSA as a property transportation broker pursuant to 49 U.S.C. § 13904. A copy of Broker’s FMCSA registration is attached to this Agreement as Exhibit 2.3. Broker shall give Subsequent Notice to Carrier concerning any change in its FMCSA registration no later than two (2) Business Days after the effective date of the change.
2.6 Legal Status of Services. In carrying out this Agreement, the Parties contemplate that Broker ordinarily will act as a property transportation broker within the meaning of 49 U.S.C. § 13904 and Carrier ordinarily will act as a motor carrier of property within the meaning of 49 U.S.C. § 13902 (or as a warehouse if permitted under Article 8). If either Party proposes to perform Services in some other capacity (such as performance by Broker as a motor carrier or surface freight forwarder, or performance by Carrier as a broker or surface freight forwarder), that Party shall give Prior Notice to the other Party and obtain the other Party’s Consent. Such performance in an alternate role by a Party (with or without the required Notice and Consent) shall not change the Parties’ responsibilities or liabilities to each other under this Agreement.
2.7 Contract Carriage. Except in the case of Services for which no FMCSA authority is required, all Services by Carrier as a motor carrier of property in United States interstate or foreign commerce shall be rendered as contract carriage within the meaning of 49 U.S.C. §§ 13102(4)(B) and 14101(b). In connection with contract carriage Services, Broker and Carrier hereby expressly waive all provisions of Subtitle IV, Part B of Title 49, United States Code, that are in conflict with express provisions of this Agreement. The Parties do not, however, waive the provisions of that subtitle relating to registration, insurance, or safety fitness.
3. SCOPE OF SERVICES
3.1. Territories and Commodities. The geographic and commodity scope of the Services shall be as set forth, and amended from time to time, in Exhibit 3.1 attached to this Agreement. Under no circumstances, however, shall Carrier render Services beyond the scope of its FMCSA registration or of its other authorities (as either may be amended from time to time) unless the Services are exempt from legal requirements for such registration or authority.
3.2 Responsibility of Carrier; Restrictions on Subcontracting. Carrier shall render all Services in a competent and professional manner, and in accordance with all applicable laws and regulations of the jurisdiction(s) within which the Services are rendered. Carrier shall not subcontract any Services to third parties without giving Prior Notice to Broker and obtaining Broker’s Consent. Any such subcontracting, with or without Prior Notice and Consent, shall not affect Carrier’s responsibilities or liabilities to Broker under this Agreement. As between Broker and Carrier, all costs of rendering the Services (including compensation of subcontractors as well as payment of all taxes or other governmental assessments imposed on Carrier) shall be borne solely and exclusively by Carrier.
3.3 Non-Exclusivity of Services. Neither Party intends to give the other Party any exclusive rights or privileges under this Agreement. Broker, on behalf of any or all Shippers, is free to arrange shipments with other motor carriers or transportation service providers. Subject to the prohibitions on back-solicitation in Section 22.3, Carrier is free to enter into contract carriage agreements with other property transportation brokers or other transportation intermediaries, regardless of whether such other brokers or intermediaries represent some or all of the same Shippers represented by Broker here.
3.4 Third-Party Equipment. (a) If an equipment provider provides equipment to Carrier for use in transporting a shipment tendered hereunder, then Carrier shall be responsible to the respective equipment provider for any damage to, or destruction of such equipment, except (i) ordinary wear and tear, and (ii) as caused by the equipment provider. (b) This Section shall not supersede the Uniform Intermodal Interchange and Facilities Access Agreement or any other equipment interchange agreement, including without limitation any addenda thereto (“Interchange Agreement"), on any occasion when such Interchange Agreement would govern Carrier's rights, duties, and obligations with respect to the use of equipment. This Contract does not affect the Parties’ respective rights, duties, and obligations under any Interchange Agreement, including without limitation any obligation of Carrier to pay user fees or charges for equipment.
4. RATES, CHARGES, TERMS AND CONDITIONS FOR SERVICES
4.1 Rates and Charges. Carrier shall be entitled to the rates and charges set forth in Exhibit 4 as its sole and exclusive compensation for rendering the Services (including any Services subcontracted to third parties or performed in a capacity other than as a motor carrier, with or without the Notice and Consent required under Sections 3.2 and 2.4, respectively). Any rates or charges intended to apply only to particular Shippers shall be separately set forth in Customer-Specific Addenda to Exhibit 4. No shipment tendered by Broker to Carrier within the geographic and commodity scope of Exhibit 3.1 shall be subject to rates or charges set forth in any tariff or rate schedule maintained by Carrier, unless those rates and charges are specifically set forth in Exhibit 4. Rates and charges set forth in Exhibit 4 on the effective date of this Agreement shall not be changed (or modified in Customer-Specific Addenda) except by following the amendment procedures set forth in Article 16. If Broker requests Carrier to perform Services for which no mutually acceptable rates exist in Exhibit 4, the Services may be performed under a rate agreed upon orally, provided that the rate is confirmed (with required Consents from both Parties) in an appropriate amendment or addendum to Exhibit 4 within 48 hours after commencement of such Services. Customer-Specific Addenda or other provisions in Exhibit 4 may be in the form of Load Tenders accepted by means of Rate Confirmations.
4.2 Invoicing and Payment. Invoicing procedures (which may include electronic invoicing), payment due dates and any late payment penalties shall be as specifically set forth in Exhibit 4. Except as otherwise provided in Customer-Specific Addenda with respect to particular Shippers or in Section 12.4, the Parties agree as follows:
(a) it shall be Carrier’s responsibility to invoice Broker for the freight charges owing to Carrier.
(b) it shall be Broker’s responsibility to exercise due diligence with regard to the creditworthiness of Shippers, to invoice Shippers for Carrier’s freight charges and for Broker’s commissions or other fees, and to take necessary measures to collect such invoices.
(c) it shall be Broker’s responsibility to remit freight charges owed to Carrier within the time periods set forth in Exhibit 4, regardless of any late payment or non-payment to Broker by Shippers.
(d) Carrier will look solely to Broker for payment of those freight charges.
(e) Carrier will have no responsibility for collection or payment of Broker’s commissions or other fees.
4.3 Other Business Rules. Exhibit 4 also may set forth miscellaneous terms, conditions and business rules for specific Services, including (without limitation) such matters as mileage computations; fuel, insurance, congestion and security surcharges; tracking and tracing procedures; loading and unloading rules; equipment detention charges; reconsignments, and stops in transit.
4.4 Pricing Disputes. If Carrier alleges underpayment of applicable freight rates and charges by Broker, or if Broker alleges overcharges, overcollection or receipt of duplicate payments by Carrier, Notice of such claims must be given by the aggrieved Party to the other Party within one hundred eighty (180) days after delivery or the first attempted delivery of the involved shipment(s) by Carrier. The Party receiving any such claim shall process it in accordance with the provisions codified at 49 C.F.R. Part 378 as of the Effective Date of this Agreement. Any civil action or arbitration proceeding with respect to such a claim shall be filed within eighteen (18) months after delivery or the first attempted delivery of the involved shipment(s) by Carrier.
5. FREIGHT DOCUMENTATION; CARGO SECURITY
5.1 Uniform Receipt. Carrier shall issue a Uniform Receipt for all shipments tendered by Broker or a Shipper within the scope of the Services. The Uniform Receipt shall take the form set forth in Exhibit 5, shall specify the Contract Number first written above, shall be non-negotiable, and shall not under any circumstances be sealed or treated as a document under seal. Except as otherwise permitted by Customer-Specific Addenda to Exhibit 4 or by Section 12.4, the Uniform Receipt shall show Broker only as the bill-to party for freight charges, shall not show Broker as the shipper, consignee or motor carrier, and shall not show any entity other than Carrier as the motor carrier issuing the Uniform Receipt.
5.2 Non-Conforming Documents. If a bill of lading or receipt not conforming to Exhibit 5 is inadvertently issued for any shipment within the scope of the Services, the non-conforming instrument shall function solely as a receipt for the shipment, and any terms and conditions stated in that instrument (including those on the front or back of an instrument in paper form) shall be null and void.
5.3 No “Through” Bills. Except by mutual Consent of the Parties with respect to a particular shipment or defined series of shipments, Carrier shall not issue or become a party to any “through” bill of lading for performance of Services jointly with another transportation entity.
5.4 Seal Integrity. In the case of shipments from a Shipper, Broker shall cause the Shipper to provide a unique sequentially serialized transportation seal for placement on the rear trailer door upon completion of loading. Once affixed by the Shipper, Carrier shall validate the placement of the seal by notating the unique serialized seal number on the Uniform Receipt for the shipment. The intent of this process is to establish a chain of custody mitigating pilferage while the shipment is in the care, custody and control of the Carrier.
(a) Should the Shipper fail to provide a unique sequentially serialized transportation door seal as provided above, the Carrier shall provide such a seal, affix it to the rear trailer door upon loading, then notate the unique serial number on the Uniform Receipt, and then obtain signature confirmation on said Uniform Receipt by both the Shipper and the Carrier.
(b) If a shipment from a Shipper involves one or more stops in transit, a new unique and sequentially serialized seal shall be utilized and recorded on the Uniform Receipt for each segment of the movement. The following applies at the first intermediate stop and at each of the subsequent intermediate stops, if any. Prior to the commencement of loading and/or unloading at any intermediate stop, the Carrier shall remove the seal affixed at origin (or at the prior intermediate stop, if any) in the presence of the consignor or consignee at the current stop. The Carrier shall request such consignor or consignee to confirm in writing that (i) the seal was intact upon arrival and (ii) the seal number is the one applied at the prior stop, by making appropriate notations on the Uniform Receipt. Subsequently, upon completion of loading and/or unloading at the current stop, the Carrier shall validate placement by the consignor or consignee of a new seal with a unique serialized number for the next segment of the movement (or shall provide such seal if the consignor or consignee fails to do so), notating the new number on the Uniform Receipt.
6. INSURANCE; BROKER BOND
Broker shall at all times maintain a surety bond on file with FMCSA in the form and for the amount required by that agency’s regulations. Carrier shall maintain the following coverages with reputable insurance companies:
6.1 workers’ compensation coverage on all Carrier employees as required under applicable state or foreign law,
6.2 general liability insurance written in an occurrence form, with per-occurrence liability limits of not less than $1,000,000,
6.3 commercial automobile liability insurance written in an occurrence form, and including an “any auto” or “scheduled and hired autos” endorsement, with per-occurrence liability limits of not less than $1,000,000 (or such greater amount as may be required by United States federal law for any of the commodities being transported within the scope of the Services), and
6.4 cargo liability insurance written in an occurrence form, with coverage in the amount of $100,000 per occurrence.
Carrier shall maintain automobile liability insurance certificates on file with FMCSA in accordance with that agency’s requirements. Carrier shall furnish Broker with certificates from the insurers evidencing its required general, automobile and cargo liability coverages and providing for not less than thirty (30) days’ advance written notice of cancellation or non-renewal of coverage, and shall cause the insurers to name Broker as an additional insured on such general and automobile coverages for the sole purpose of receiving such 30-day advance written notices of cancellation or non-renewal.
7. CARGO LIABILITY
7.1 Extent and Limitations of Liability. Except as otherwise specifically provided in applicable portions of Exhibit 4, Carrier shall be directly liable to Shipper for the full actual value of any goods lost or damaged while in Carrier’s possession or control as a motor carrier in connection with the Services. Such liability shall apply irrespective of any released rates published by Carrier in its tariffs or contained in its standard bills of lading. In addition, Carrier shall cancel and waive all freight charges (including refund of any prepaid freight charges) on a shipment that it loses or damages in whole or in part. Broker assumes no liability for loss of or damage to the transported property.
7.2 Filing and Handling of Claims. Claims for loss of or damage to cargo within the scope of the Services shall be handled directly between Carrier and the involved Shipper(s) (or the Shipper’s assignee). Carrier shall process the claims in accordance with 49 C.F.R. Part 370 as in effect on the Effective Date of this Agreement. Claims must be filed, and any litigation on such claims must be commenced, within the minimum time frames (9 months and two years, respectively) as further specified in 49 U.S.C. § 14706(e) as in effect on such Effective Date.
8. DELIVERY ISSUES; WAREHOUSE LIABILITY
If the consignee of a shipment within the scope of the Services refuses to take delivery, or if Carrier is unable to deliver the shipment because of the fault or mistake of Broker, a Shipper or the consignee, or if Broker or Shipper instructs Carrier to stop and hold the cargo in transit, then Carrier’s liability for the cargo shall convert to that of a warehouse on the Business Day following the date of such refused delivery, other delivery problem, or stop-in-transit order. In such circumstances, the following shall then occur:
8.1 Ordinary Care. Carrier shall exercise ordinary care to keep the cargo in a safe or suitable place or to store it properly.
8.2 On-Hand Notice. Carrier shall furnish Broker and Shipper with an on-hand notice as soon as possible after the occurrence of any of the foregoing delivery or stoppage problems (unless the stoppage is at the instruction of Broker or Shipper).
8.3 Public Storage. If disposition instructions are not received from Broker or the Shipper within 48 hours after delivery of the on-hand notice, Carrier shall place the cargo in an appropriately licensed public warehouse, if available.
8.4 Public Sale. If such instructions are not received within twenty (20) days after delivery of the on-hand notice, Carrier may offer the cargo for public sale.
8.5 Perishables. As an exception to Sections 8.3 and 8.4, Carrier may dispose of perishable cargo at a time and in a manner it deems appropriate, provided that Prior Notice has been given to Broker and Shipper.
8.6 Warehousing/Sale/Disposition Costs. Storage and other costs incurred by Carrier in the capacity of a warehouse, or in the execution of timely disposition instructions from Broker or Carrier, shall be borne by Carrier if occasioned by its fault or mistake. In all other circumstances, Carrier shall bill Broker for such costs and the responsibility for payment of same shall be allocated between Broker and the involved Shipper according to the terms of their agreement.
8.7 Allocation of Proceeds. If proceeds from any sale or disposition of cargo under this Article 8 exceed the costs of such sale or disposition (including related storage costs) that are not to be borne by Carrier under Section 8.6, Carrier shall remit the balance to Broker.
9. SALVAGE
Salvage of damaged cargo within the scope of the Services shall be handled as follows:
9.1 Authority to Determine Disposition. Broker or Shipper shall have the right reasonably to determine whether to repair, repackage, salvage or scrap damaged cargo.
9.2 Salvage Procedures. If salvage is elected, Broker shall have ten (10) Business Days following the delivery date either to instruct Carrier to return the cargo to Broker or Shipper for that purpose, or to direct that salvage be undertaken by Carrier. Any proceeds of salvage by Broker, Shipper or Carrier (less any salvage or return transportation expenses reasonably incurred) shall be applied against any liability of Carrier for damage to the cargo.
9.3 Removal of Marks. Shipper or Broker may condition salvage upon the removal of all identifying marks or labels from the cargo, or upon having the cargo permanently marked with a notation such as “damaged”.
9.4 Return Transportation. If Carrier is utilized for any return transportation of damaged cargo, Broker shall pay Carrier only such return transportation charges as may be specified in Exhibit 4 or in an amendment thereto negotiated between the Parties and adopted in accordance with Article 16.
10. INDEMNIFICATION; NO CONSEQUENTIAL DAMAGES
10.1 Hold Harmless. Except as otherwise specifically provided in Article 7 with regard to cargo loss and damage liability, Broker and Carrier shall indemnify each other (including their respective employees and agents) and hold each other harmless from and against all claims, liabilities, losses, damages, fines, penalties, payments, costs and expenses (including reasonable legal fees) to the extent proximately caused by or resulting from the negligence or intentional acts of the indemnifying Party, including its employees or agents, in connection with the performance of this Agreement or the Services. The previous sentence, however, shall not apply to the extent that such claims, liabilities, losses, damages, fines, penalties, payments, costs or expenses are proximately caused by or result from the negligence or intentional acts of the indemnified Party, including its employees or agents.
10.2 Consequential Damages Excluded. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES (SUCH AS, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF MARKET, LOSS OF CUSTOMER GOODWILL, ASSEMBLY LINE SHUTDOWNS, OR PUNITIVE OR EXEMPLARY DAMAGES), REGARDLESS OF WHETHER SUCH PARTY RECEIVED PRIOR NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, AND REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES SOUNDS IN CONTRACT, TORT, BREACH OF WARRANTY, CONSUMER FRAUD, OR OTHERWISE.
11. FORCE MAJEURE; LEGAL RESTRAINT
If either Broker or Carrier is prevented from or delayed in performing any of its obligations under this Agreement by reason of statutes, regulations or orders of a governmental entity (including actions taken by a court or by law enforcement officials), or because of war, terrorism, acts of God, labor disturbances, civil unrest, or any cause beyond the reasonable control of such Party, it shall not be liable to the other Party for damages by reason of any delay or suspension of performance resulting from such legal restraints or force majeure. The Party invoking this Article 11, however, shall furnish the other Party with Subsequent Notice of same no more than two Business Days after the onset of the conditions delaying or preventing performance, and shall use its best commercially reasonable efforts to mitigate or work around such conditions.
12. RELATIONSHIP OF PARTIES
12.1 In General. The relationship of Carrier to Broker is that of an independent contractor. By this Agreement the Parties do not intend to provide for division of profits between Carrier, Broker and/or any Shipper, nor to clothe Broker and/or any Shipper with joint control over Carrier’s performance of the Services, nor otherwise to create a de facto or de jure joint venture, joint enterprise or partnership between Carrier, Broker and/or any Shipper. Under no circumstances shall employees or agents of Carrier be deemed employees or agents of Broker or Shipper, nor shall Broker or Shipper be liable for any wages, fees, payroll taxes, assessments or other expenses relating to employees or agents of Carrier.
12.2 Broker, Carrier and Shippers. By tendering shipments to Carrier for particular shipments pursuant to this Agreement, Broker represents and warrants that it has conducted due diligence with regard to the creditworthiness of such Shippers, and that it vouches for same. Broker acknowledges that its relationship to all Shippers is that of an agent for disclosed, partially disclosed or undisclosed principals, that Broker has been authorized by all Shippers to tender shipments to Carrier on their behalf, and that Carrier consequently has the legal right to consider Shippers as being bound by the terms and conditions of this Agreement with regard to payment of Carrier’s freight charges. Carrier in turn acknowledges that Shippers at all times shall be considered third party beneficiaries of Carrier’s obligations to Broker under this Agreement.
12.3 Waiver of Certain Remedies in Absence of Events of Default. Notwithstanding Broker’s legal status as agent for all Shippers, and Shippers’ status as disclosed, partially disclosed or undisclosed principals in relation to Broker, Carrier agrees to waive its legal right to treat Shippers as bound by this Agreement unless and until Broker (i) fails to maintain its FMCSA registration and bond as required by law, (ii) declares its inability to pay its debts as they become due, (iii) makes a general assignment in favor of creditors, or (iv) changes its address without Prior Notice to Carrier as required under Article 15. As part of such waiver, Carrier agrees to invoice only Broker for its freight charges, to refrain from seeking recourse against any Shipper for unpaid freight charges, to refrain from asserting any trust fund theory with respect to any monies collected by Broker from Shippers, and to refrain from asserting its carrier or warehouse lien against the goods of any Shipper, except when Broker specifically authorizes such direct invoicing, recourse, or assertion of a lien in the case of a particular Shipper or Shippers.
12.4 Remedies upon Event of Default. Upon the occurrence of any event specified in clauses (i) through (iv) of Section 12.3, and upon Prior Notice by Carrier to Broker concerning Carrier’s intent to proceed under this Section 12.4, Carrier at its option may begin invoicing Shippers directly for freight charges incurred after such event, may seek recourse against Shippers for unpaid freight charges incurred prior to such event, may assert any and all trust fund remedies that may be available in the circumstances against funds held by Broker, and/or may begin asserting its carrier and/or warehouse liens (as the case may be) to secure unpaid freight and/or storage charges to the fullest extent permitted by law.
13. DISPUTE RESOLUTION
Having entered into this Agreement in good faith, the Parties agree that the following shall occur if a dispute arises with regard to its application or interpretation:
13.1 Meet and Confer; Mediation. Either Party may give Prior Notice to the other regarding the existence of a dispute. Within the thirty (30) days following the date of the Notice, representatives of the Parties with full settlement authority shall meet and confer at least once in an effort to resolve the dispute among themselves. If such efforts fail, the Parties shall give good faith consideration to engaging an experienced mediator upon such terms and such cost allocation as may be mutually agreeable to the Parties.
13.2 Arbitration at Parties’ Option. If a dispute is not resolved voluntarily, the Parties shall give good faith consideration to submitting the matter for final and binding arbitration under the Commercial Rules of the American Arbitration Association (“AAA”) before a single arbitrator with appropriate subject matter expertise. Such arbitration shall take place at a mutually agreed location or, failing agreement on a location, then at the AAA offices most nearly equidistant between the respective headquarters locations of the Parties. The award of the arbitrator may be enforced in any court of competent jurisdiction.
13.3 Civil Actions; No Jury Trial. If arbitration is not agreed to, or if the dispute involves a remedy not available in arbitration (such as injunctive or other equitable relief), a civil action may be brought in a Federal or State court in the State of domicile of either Party, in which event the following shall apply:
(a) THE PARTIES IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY.
(b) The Party being sued reserves the right to raise all available issues as to Federal versus State jurisdiction, venue, and convenience of the forum.
(c) Service by certified mail to the Parties’ respective notice addresses as per Article 15 of this Agreement shall constitute valid and binding service of process.
13.4 Cargo Claims and Pricing Disputes. If a dispute involves a cargo claim or the pricing of Services, the provisions of this Article 13 are subject to any inconsistent provisions of Sections 7.2 or 4.4, respectively.
14. GOVERNING LAW
Except to the extent that Federal preemption applies by reason of 49 U.S.C. § 14501(c) or other law, this Agreement shall be interpreted in accordance with the laws of the State of Texas, disregarding any choice-of-law principle under which that State would look to the laws of another jurisdiction.
15. NOTICES
Any Notice required or permitted under this Agreement shall be deemed sufficient if sent by prepaid first-class mail, by a nationally recognized overnight courier, or by facsimile transmission, if such Notice is sent to the address or fax number of, and marked to the attention of, a Designated Contact for the addressee Party. Notices shall be considered to have been received by the addressee Party on the third Business Day after mailing, on the first Business Day after deposit with an overnight courier, or on the day a facsimile is transmitted if the sending machine produces written confirmation of a successful transmission. Each Party may change its Designated Contact(s), or update the contact information for such individuals, by Prior Notice to the other Party in accordance with this Article 15, and without formal amendment of this Agreement under Article 16.
16. ENTIRE AGREEMENT; AMENDMENTS
16.1 In General. This Agreement represents the entire agreement and understanding of the Parties with regard to its subject matter. No prior understandings or agreements of the Parties, whether written or oral, nor any documents not specifically incorporated into this Agreement, nor any course of conduct of the Parties before or after the Effective Date of this Agreement, shall have the effect of modifying the Parties’ rights and obligations under this Agreement in any way. Except as provided in Article 15 with regard to changes of Notice information, or in Section 16.2 with regard to amending Exhibit 4, no amendment to this Agreement shall be valid unless it is set forth in writing, is marked with a unique amendment number, specifies the articles, sections and/or exhibits being amended, specifies an effective date for the amendments, and is signed by Designated Contacts of both Parties.
16.2 Amendments to Exhibit 4 (Pricing). In addition to the Designated Contacts specified on the signature page(s) of this Agreement, each Party at its option may facilitate day-to-day adjustments of pricing and business rules by listing Designated Pricing Contacts who are empowered to sign amendments relating only to Exhibit 4. Such Designated Pricing Contacts, if any, shall be listed in an Exhibit 16.2-A (for Broker) and/or an Exhibit 16.2-B (for Carrier). Adopted amendments to Exhibit 4 shall be consecutively numbered in a separate series from Customer Specific Addenda and from other amendments to this Agreement. In all other respects, amendments to Exhibit 4 shall conform fully to Section 16.1 above. In order to keep the pricing provisions of this Agreement from becoming unwieldy, the Parties may agree on restated or consolidated versions of Exhibit 4 from time to time, which shall become effective on being executed by a Designated Pricing Contact for each Party.
17. SEVERABILITY
To the extent that any provision of this Agreement may be held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall become ineffective as to all matters within the jurisdiction of that court. The court’s holding, however, shall not be treated as affecting the validity or enforceability of any other provision of this Agreement, nor as affecting the validity or enforceability of any part of this Agreement in other jurisdictions.
18. TIME IS OF ESSENCE
The Parties agree that time shall be of the essence with respect to the performance of their respective obligations under this Agreement.
19. WAIVER
Neither the failure of a Party to exercise any right, power or privilege under this Agreement, nor its delay in any such exercise, shall operate as a waiver of that right, power or privilege. No such waiver shall be binding on either Party unless it is in writing and signed by a Designated Contact of the Party against which the waiver is asserted. No such waiver on one occasion shall preclude subsequent full enforcement of a Party’s rights, powers and privileges under this Agreement at law or in equity.
20. SUCCESSORS AND ASSIGNS
This Agreement shall be binding on, and shall inure to the benefit of, both Parties as well as their respective successors and permitted assigns. Assignment of this Agreement by either Party requires Prior Notice to and Consent by the other Party. Neither Party shall unreasonably withhold Consent for an assignment by the other Party to an affiliate of the assigning Party, provided that the affiliate first agrees in writing to comply with all terms and conditions of this Agreement.
21. USE OF SERVICE MARKS, COPYRIGHTS, PATENTS OR OTHER INTELLECTUAL PROPERTY
Except to the extent that use of the Parties’ respective names or trade names is necessary or appropriate for purposes of preparing Uniform Receipts, invoices or other shipping documentation, or for tracking and tracing purposes, neither Party may use the other Party’s name, logo(s), service mark(s), trade name(s), copyrights, patents or other intellectual property, except by advance written permission of such other Party or pursuant to any licensing terms that may be set forth in Exhibit 21 to this Agreement.
22. CONFIDENTIALITY; NO BACK-SOLICITATION
22.1 Use of Broker Proprietary Information. Any Broker Proprietary Information furnished or disclosed to Carrier shall be:
(a) used solely for the purpose of providing a quotation and/or designing and performing Services for Broker, and
(b) held in confidence for a period of two (2) years from the date of disclosure.
Such information shall not, without prior written consent of Broker, be used in connection with the performance of Services for any customer of Carrier other than Broker or for any other purpose unrelated to the quotation and/or supply of Services to Broker. Moreover, dissemination of Broker Proprietary Information within Carrier’s organization shall be restricted to those employees or agents who are involved in quoting on or supplying Services to Broker and have been informed of the pertinent provisions of this Agreement.
22.2 Exceptions to Confidentiality. Notwithstanding the above-stated obligations of restricted use and confidentiality with respect to Broker Proprietary Information, Carrier will not be liable for disclosure or use of such part of the information which Carrier can establish by substantial evidence:
(a) was in its possession or known to it prior to receipt from Broker;
(b) is or has become known to the public through disclosure in a printed publication or otherwise (without breach of any of Carrier's obligations hereunder);
(c) was acquired by Carrier from a third party which generated such information independently of Broker Proprietary Information;
(d) was necessarily disclosed by its use or embodiment in performance of services in commerce by Broker; or
(e) was independently developed by Carrier, provided that the person or persons developing same have not had access to the Broker Proprietary Information or have rightfully obtained the information from a source other than Broker.
22.3 Prohibition of Back-Solicitation; Liquidated Damages. Notwithstanding any other provision of this Agreement, Carrier agrees not to solicit traffic directly from any shipper, consignor, consignee or other customer of Broker (“Back-solicitation”) within two (2) years after either of the following two events (or, if both occur, after the later of the two events):
(a) The availability of such traffic first becomes known to Carrier through the provision of Broker Proprietary Information to Carrier in connection with the performance of Services by Carrier under this Agreement; or
(b) Such traffic is first tendered to Carrier by Broker or by an authorized employee, agent or other representative of Broker.
Because the Parties recognize that calculation of monetary damages to Broker resulting from such Back-solicitation would be difficult or impossible, it is agreed that Carrier shall pay Broker ten (10) percent of all revenues on traffic tendered to Carrier by the solicited entity during a period beginning with the date of Carrier’s first contact with that entity in the nature of Back-solicitation and ending twelve (12) months after the most recent date of such a contact. Such payment shall be in the nature of liquidated damages rather than a penalty.
23. TERM OF AGREEMENT
This Agreement shall remain in full force and effect for a one-year period following the Effective Date, and thereafter shall be renewed automatically on a year-to-year basis, unless and until terminated as set forth in the next sentence. Either Party has the right to terminate this Agreement at any time, with or without cause, by providing Prior Notice to the other Party at least thirty (30) calendar days in advance of the proposed termination date (unless a shorter notice period is specified in particular circumstances by particular provisions of this Agreement as amended from time to time). If any shipment within the scope of the Services remains in transit on the effective date of a termination of this Agreement, both Parties’ rights and duties under this Agreement shall remain in effect with respect to such shipment until it is delivered and all related invoices and claims are satisfied.
24. COUNTERPARTS
This Agreement may be executed in one or more counterparts, any and all of which shall constitute one and the same instrument.
25. CAPTIONS
The captions and headings set forth in this Agreement are for convenience only. They shall not be considered a part of this Agreement, nor shall they affect in any way the meaning of its terms and conditions.
26. SURVIVAL
The provisions of Sections 7, 10, 12 through 15, 19, and 21 through 23 shall survive termination of this Agreement.
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