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Standard Terms and Conditions for Carrier

Effective 5/12/2009

HORIZON LOGISTICS, LLC d/b/a HRZ LOGISTICS LLC

STANDARD TERMS AND CONDITIONS FOR CARRIER

These Standard Terms and Conditions apply to transportation services provided by a Carrier for Horizon Logistics, LLC d/b/a HRZ Logistics, LLC under a Carrier Rate Confirmation, or when they are otherwise incorporated into a document by express reference.

For these Standard Terms and Conditions, the following definitions apply:

(a) “3PL” means Horizon Logistics, LLC d/b/a HRZ Logistics, LLC, providing third-party logistics services under one of the following FMCSA authorities held by 3PL: broker of property (non-household goods), freight forwarder (non-household goods), or motor carrier (contract carriage / non-household goods); or as a rail intermodal marketing company (“IMC”);

(b) “Carrier” means the Motor Carrier, Freight Forwarder, or IMC identified on the Pricing Document;

(d) “Pricing Document” means the Carrier Rate Confirmation (or other incorporating document) provided by 3PL to Carrier that contains shipment details, pricing, and other information for the shipment.

1. Carrier’s Compensation. (a) 3PL shall pay Carrier the total compensation applicable to the shipment, as set forth in the Pricing Document. (b) Carrier agrees that none of its tariffs, circulars, pricing authorities, and/or similar documents shall apply to transportation and/or services provided in connection with the Pricing Document. (c) 3PL’s payment of additional compensation to Carrier for accessorial or other services (if not already set forth in the Pricing Document) shall be subject to the requirements of Section 8 of these Standard Terms and Conditions.

2. Payment of Compensation. (a) Except as provided in 2(b), below, 3PL shall pay compensation to Carrier within thirty (30) days of its receipt of Carrier’s invoice. Each invoice submitted by Carrier shall be accompanied by the bill of lading or delivery receipt for the shipment covered by the invoice. (b) 3PL may withhold compensation due Carrier (i) on any occasion when a shipment is lost, damaged, misdelivered, or delayed in transit; or (ii) to satisfy any debt owed by Carrier to 3PL. In such case, 3PL shall provide written notice to Carrier of the amount withheld and the reason(s). Such withholding shall not allow or entitle Carrier to seek payment from 3PL’s customers, consignors, consignees, or any other third party, and no interest or late payment fee shall apply. (c) Any claim for overpayment or underpayment shall be presented within thirty (30) days of discovery, provided that neither Party may assert such a claim more than six (6) months after the delivery date of the shipment. The Party making the claim shall substantiate the amount with documentation, and provide relevant shipment details. The Party receiving the claim shall pay, deny, or make a firm compromise offer within forty-five (45) days of receipt. (d) Carrier shall seek payment for transportation and services rendered solely and exclusively from 3PL, and shall not, under any circumstances, present an invoice, bill, demand, or other claim for payment to 3PL’s customers or any consignor or consignee of a shipment, or any third-party payor.

3. Carrier’s Operating Authority. (a) When Carrier provides motor carrier transportation for the shipment, Carrier represents and warrants that (i) it holds current and valid operating authority from the Federal Motor Carrier Safety Administration (“FMCSA”); (ii) that all transportation under, or in connection with the Pricing Document shall be contract carriage under 49 U.S.C. § 14101(b); (iii) that it shall have and maintain its FMCSA operating authority and any other State permits, licenses, registrations, or authorities necessary for its operations or services (including without limitation State weight, oversize load, or routing permits); and (iv) that it shall notify 3PL immediately of any material change in the status of its operating authority, in which case, 3PL shall have the immediate right to terminate the service being provided by Carrier. (b) To the extent that Carrier provides motor carrier transportation in Mexico or Canada, then Carrier shall have and maintain all necessary federal, state, or provincial operating authority, and shall comply with all applicable Mexican or Canadian laws, regulations, and rules.

4. Drivers, Equipment, and Safety. When Carrier provides motor carrier transportation for the shipment, Carrier (a) shall ensure that its drivers are properly trained, 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 3PL.

5. Performance. In accordance with the shipment details and other information contained in the Pricing Document, Carrier shall transport the shipment from the pick-up location to its specified destination with reasonable dispatch. Carrier shall have sufficient information technology capabilities to provide real-time shipment tracking and tracing to 3PL and shall provide status reports upon 3PL’s request.

6. Shipment Instructions. (a) Carrier shall comply with the shipment instructions noted on the Pricing Document. (b) Carrier shall ensure that each trailer or container is properly loaded, sealed (supplying seals if necessary) and secured, and shall note the seal number(s) on the bill of lading or receipt. Carrier is responsible for ensuring that all freight is properly blocked and braced for transportation, unless the shipper accepts such responsibility by tendering to Carrier a pre-loaded and sealed trailer or container. (c) 3PL shall provide advance notice to Carrier in the event that 3PL is aware that a shipment contains hazardous materials under 49 U.S.C. § 5101-5128 and the hazardous materials regulations at 49 C.F.R. § 107 and 171-180.

7. Bills of Lading / Receipts. (a) At pick-up, Carrier shall execute a standard bill of lading or similar receipt (“Receipt”) and shall note the condition and count of the goods. At delivery, Carrier shall obtain the signature of the consignee, or other receiving party on the Receipt, and shall note the condition and count of the goods. On any occasion when Carrier is unable view and count the goods, such as a sealed trailer or drop-trailer, it shall so indicate on the Receipt by writing “Shipper’s load and count” or “SLC” or by making another appropriate notation. (b) The terms and conditions of such Receipt shall not modify, amend, supplement, or supersede the Pricing Document and these Standard Terms and Conditions, or any agreement between 3PL and its customer. (c) Carrier shall submit a copy of the Receipt to 3PL evidencing pick-up and delivery of the shipment. If Carrier fails to maintain and provide the Receipt, Carrier assumes all risk resulting from the failure to prove delivery of the shipment and/or its condition.

8. Accessorial or Other Services. (a) Carrier shall notify 3PL prior to performing any accessorial or other services for the shipment, and shall request 3PL’s advance written authorization for such services. (b) Absent 3PL’s authorization, any additional compensation claimed by Carrier shall be payable at the sole discretion of 3PL. (c) Carrier shall maintain records in sufficient detail to document its accessorial or other services. Carrier shall transmit its record of performing authorized accessorial or other service(s) to 3PL within one (1) business day of the event, so that 3PL may advise its customer and/or take appropriate steps to verify such service(s).

9. 3PL’s Compensation. 3PL shall not be required to disclose to Carrier the amount of its 3PL compensation, and Carrier shall not attempt to ascertain the amount of 3PL’s compensation.

10. Carrier’s Cargo Liability. (a) Carrier shall have sole and exclusive care, custody and control of each shipment tendered by 3PL from the time Carrier picks up the shipment until proper delivery to the consignee, and Carrier shall be responsible for transporting each shipment safely and securely from origin to destination (including scheduled stop-offs, if any) without loss, damage, misdelivery, or delay. Carrier shall be liable to 3PL’s customer for loss, damage, misdelivery, or delay as provided under 49 U.S.C. § 11706 (rail IMC service) or § 14706 (motor carrier or freight forwarder service). (b) Carrier shall indemnify and reimburse 3PL for the full amount owed and/or paid by 3PL to its customer, consignee, or consignor in satisfaction of any claim, judgment, liability, or settlement related to loss, damage, misdelivery, or delay of the shipment, except where such loss, damage, misdelivery, or delay was due solely to: the negligence of 3PL; an act of God or public enemy; or inherent vice of the shipment. Carrier shall bear the burden of proving any of the foregoing exceptions. (c) The time period allowed by Carrier for filing a claim for loss, damage, misdelivery, or delay, or for bringing a lawsuit shall not be less than as set forth at 49 U.S.C. § 11706(e) or 14706(e), as the case may be. (d) Carrier shall immediately notify 3PL of any loss or damage to the goods at the time that Carrier first becomes aware of the loss or damage. Carrier’s notification shall be made by telephone, email, or facsimile, and shall identify the Carrier Rate Confirmation number, the consignor and consignee, and the pick-up and scheduled delivery dates.

11. 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 (i) motor vehicle safety and fitness, (ii) driver operations and qualifications, (iii) equipment, (iv) hazardous materials (dangerous goods), (v) security, and (vi) the environment. (b) When Carrier provides motor carrier transportation, Carrier shall have and maintain a “Satisfactory” USDOT safety rating, and 3PL may immediately terminate this Contract, if Carrier’s rating becomes “Conditional” or “Unsatisfactory”. If Carrier has not undergone a compliance review, and/or has not been issued a USDOT safety rating, then Carrier shall be allowed to provide services with USDOT “Unrated” status. (c) Carrier shall immediately report to 3PL any change in its USDOT safety rating, or any accident, incident, audit, compliance review, or injury related to motor carrier operations. (d) 3PL warrants that it is registered with the FMCSA in Docket Nos. MC-620507 and FF-7830, which authorize it to operate as a motor carrier, broker, and freight forwarder of property, non-household goods. (e) In addition to, and without limitation of any of the requirements set forth herein, Carrier shall comply with Transportation Security Administration (“TSA”) security program instructions issued by 3PL, and any revisions, supplements, or related TSA directives, as may be issued from time to time, if Carrier is engaged by 3PL to provide transportation service in connection with movement of a shipment by a direct air carrier (aboard aircraft).

12. Carrier’s Insurance. (a) At its own expense, Carrier shall have and maintain insurance coverage from a reputable insurance company meeting the following minimum requirements: (i) Cargo loss: $100,000 per shipment; (ii) General liability: $1,000,000 per occurrence; (iii) Automobile liability: $1,000,000 per occurrence; and, (iv) Worker’s compensation: as required by law. (v) On any occasion when 3PL arranges motor carrier transportation for Horizon Lines, LLC or Horizon Lines of Alaska, LLC, and Carrier performs such transportation as requested by 3PL: Equipment Interchange of not less than $25,000 per occurrence covering physical damage to non-owned or leased equipment while in Carrier’s care, custody, or control. (b) Carrier shall ensure that 3PL is named as an additional insured on automobile and general liability insurance policies required hereunder, and Carrier shall provide current certificates of all required insurance to 3PL upon request. Carrier shall immediately advise 3PL of any material change in the status of its insurance coverage, including termination, cancellation, loss of coverage, or change of insurance carrier. (c) Carrier further agrees to procure and maintain any and all insurance required by Federal, State, local, or to the extent applicable, international laws. (d) Carrier’s cargo loss insurance coverage shall not exclude loss, injury, damage, or liability related to loading or unloading operations, vehicle or trailer theft, or specific classes or kinds of goods, and Carrier shall not invoke any such, or similar exclusion in order to avoid any liability, responsibility, or obligation, arising in connection with transportation or services.

13. Carrier’s Indemnification. Carrier shall indemnify, defend, and hold 3PL, its customer, consignor, and consignee harmless from and against any and all loss, harm, injuries (including without limitation death), damages (including without limitation damage to the environment), claims, lawsuits, actions, costs, expenses, penalties, fines, and liabilities arising from, or in connection with any wrongful or negligent act or omission, or willful misconduct of Carrier, its employees, agents, and/or subcontractors under or in relation to the Pricing Document and/or the transportation services provided. Carrier’s obligation under this Section 13 shall not apply to the extent that the loss, harm, injuries, damages, claims, lawsuits, actions, costs, expenses, penalties, fines, and liabilities are proximately caused by 3PL’s negligence or willful misconduct.

14. Independent Contractor. Carrier is an independent contractor and shall exercise exclusive control, supervision, and direction over (a) the manner in which transportation and services are provided; (b) the persons engaged in providing transportation and services; (c) its compliance with laws, regulations, and rules applicable to its operations and services; and, (d) the equipment selected and used to provide transportation and services. The Pricing Document and these Standard Terms and Conditions do not create, nor shall they be deemed to create a partnership, joint venture, agency, or employer-employee relationship between 3PL and Carrier.

15. 3PL or Third-Party Equipment. (a) If 3PL, a corporate affiliate of 3PL, 3PL’s customer, or another person provides equipment to Carrier for use in transporting a shipment tendered hereunder, then Carrier shall be responsible to 3PL, 3PL’s affiliate, 3PL’s customer, or such other person as the case may be, 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 15 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. These Standard Terms and Conditions do 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.

16. Subcontractors. (a) Carrier shall not co-broker or subcontract the shipment to another motor carrier without 3PL’s advance written consent, which may be withheld for any reason. (b) If 3PL, in its sole discretion, authorizes Carrier to co-broker or subcontract a shipment, then in such event Carrier shall remain responsible and liable to 3PL under these Standard Terms and Conditions as though Carrier itself provided the transportation. Carrier’s unauthorized subcontracting or co-brokering of a shipment shall not nullify or void any of Carrier’s duties and obligations. (c) In addition and without limitation, Carrier shall indemnify, defend, and hold 3PL, its customer, consignor, and/or consignee harmless from any claim for payment or compensation asserted by any agent or contractor.

17. Carrier’s Lien. Carrier shall not have or assert a lien for freight charges or any other compensation against (a) the shipment of goods tendered or transported under the Pricing Document, or (b) any equipment provided by 3PL, a corporate affiliate of 3PL, 3PL’s customer, or other person. Carrier irrevocably waives any right to claim or enforce any such lien.

18. Confidentiality. The Parties shall protect the confidentiality of all business, proprietary, and/or non-public information exchanged in connection with any Pricing Document, except as required by law.

19. Third Parties. (a) These Standard Terms and Conditions do not confer any enforceable rights or remedies upon any person other than the Parties; provided that 3PL’s customer shall be considered a third-party beneficiary for purposes of Sections 10(a) and (c) and 15. 3PL’s corporate affiliate shall also be a third-party beneficiary for purposes of Section 15. (b) Carrier shall not assign any right or obligation under these Standard Terms and Conditions, and any purported assignment shall be null and void.

20. Entire Agreement and Merger. The Pricing Document and these Standard Terms and Conditions are the entire agreement between the Parties, and supersede all previous communications, representations, writings, and instruments with respect to the subject matter hereof. These Standard Terms and Conditions shall not be modified or amended except through a written instrument executed and agreed to by a duly authorized representative of each Party. These Standard Terms and Conditions supersede, prevail over, and displace any tariff, circular, pricing document, schedule of rates and charges, or other similar document published or maintained by Carrier.

21. Survival of Obligations. Carrier agrees that its covenants, duties and obligations under Sections 1(b), 2(d), 7, 10, 13, 15 and 16 shall survive completion of the transportation service provided under the Pricing Document, and any other termination or cancellation of the Parties’ relationship.

22. Waiver. The failure of either Party to enforce any right, privilege, or obligation established by these Standard Terms and Conditions on any occasion, or number of occasions, shall not constitute, or be deemed to constitute a waiver or relinquishment of such right, privilege, or obligation. Any waiver or relinquishment shall be accomplished by a written instrument signed by the Parties.

23. Severability. In the event that a provision contained in these Standard Terms and Conditions is found by a court of competent jurisdiction to be unenforceable, then such provision shall be severed herefrom as to the jurisdiction in which it is unenforceable (to the extent of the court’s order or judgment), and these Standard Terms and Conditions shall otherwise survive, continue, and remain in effect.

24. Choice of Law. (a) The Pricing Document and these Standard Terms and Conditions are governed by Texas law without regard to conflict of laws. Any lawsuit brought by one Party against the other shall be prosecuted in the State or Federal courts of Texas and the Parties irrevocably consent to the jurisdiction of such courts. (b) All transportation service provided under, or in relation to this Contract shall be private contract carriage under 49 U.S.C. § 10709 (rail IMC) or § 14101(b) (motor or freight forwarder), as may be applicable, and not common carriage. (c) The Parties expressly waive any and all rights and remedies existing and allowed to be waived under 49 U.S.C. Subtitle IV, Part B, except as otherwise specifically provided in these Standard Terms and Conditions.