Broker / Carrier Agreement

BROKER / CARRIER AGREEMENT

     This Broker/Carrier Agreement is being entered into by and between Cowan Logistics, LLC a Maryland limited liability company (hereinafter referred to as “BROKER”, and the undersigned Federally-licensed motor carrier, (hereinafter referred to as “CARRIER” as defined below, on the day set forth below beneath the signatures of the parties.

I.     PARTIES

1. Broker is a “Broker” as that term is defined under 49 U.S.C. § 13102(2) or any regulation, amendment or renumbered law by which the United States or any agency thereof defines a freight broker and any applicable federal or state regulations, statutes, decisional law or administrative law. BROKER will arrange for the freight tendered by a shipper to be transported by CARRIER under the means, manner, method, and terms selected by the shipper or CARRIER, but BROKER is not engaged in the business of and will not act as a “Carrier,” “Motor Carrier,” or “Freight Forwarder,” as those terms are defined under 49 U.S.C. § 13102, and BROKER is not engaged in the business of and will not act as a “Rail Carrier” as that term is defined under 49 U.S.C. § 11706.

2. CARRIER hereby agrees to transport freight identified by BROKER as requiring transportation services.

3. BROKER and CARRIER will sometimes be referred to collectively as “The Parties.”

II.      AGREEMENT

1. Term- The term of this Agreement shall be one (1) year, commencing on the date listed above. If not cancelled by one of The Parties, the Agreement shall automatically renew itself for consecutive one-year terms. The Agreement can be terminated at any time by either of The Parties with thirty (30) days written or electronic notice to the other party, provided all balances are settled, and the termination can be with or without cause.

2. Broker Requirements- BROKER warrants that it is licensed to arrange for the transportation of freight by the Federal Motor Carrier Safety Administration (FMCSA) in Docket Number MC-00044801, but that it does not transport freight, and that it will maintain such authority as required by all applicable federal and state laws and regulations throughout the course of this Agreement. BROKER also warrants that it will maintain a surety bond or trust fund agreement as required by the Federal Motor Carrier Safety Administration in the amount of $75,000.00 or in such amount as may be amended from time to time and furnish CARRIER with proof of same upon request.

3. Broker Obligations- BROKER shall pay CARRIER for services rendered in an amount equal to the rates and charges agreed to as set forth on any load Confirmation(s) that is issued and that supplements and amends this Agreement to the extent its terms conflict with those in this Agreement. This Agreement or the Load Confirmation also governs all assessorial services, which may be required or performed. CARRIER shall not bill for any accessorial or other charge not approved in this Agreement or in any Load Confirmation(s). Rates may be amended orally but must be confirmed in writing within five working days of the modification in order to remain binding between the PARTIES. As a condition precedent to payment, CARRIER must submit proof of delivery with its invoices, and the invoices must reflect that CARRIER delivered the freight to its final destination.

a. BROKER agrees to arrange for the transportation of a shipper’s freight with CARRIER pursuant to the terms of this Agreement, and to comply with all federal, state, and local laws and regulations pertaining to the brokerage services covered by this Agreement.

b. The Parties agree that BROKER’S responsibilities under this Agreement are limited to arranging for the transportation of a shipper’s freight with CARRIER, and not actually performing the transportation services, possessing the freight, or controlling the means or methods of the transportation.

4. Carrier Obligations - CARRIER agrees that the following terms, conditions and agreements shall apply to all services provided by CARRIER to BROKER and BROKER’s customers pursuant to this Agreement:

a. CARRIER agrees that at all times during this Agreement it will act as a “motor carrier,” as that term is defined under 49 U.S.C. § 13102 and any applicable federal or state regulations, statutes, decisional law or administrative law. CARRIER further agrees that at all times during this Agreement it will remain licensed and authorized by the Federal Motor Carrier Safety Administration to provide interstate transportation services or that it provides only intrastate service and complies with all applicable state registration requirements, and agrees that it will maintain insurance or otherwise demonstrate financial responsibility in accordance with all applicable federal and state regulations.

b. CARRIER is solely responsible for the operation of the equipment, actions of the driver, any other persons associated with the operation of the equipment, transportation of freight, securement or any other aspect of actions of a motor carrier as that term is defined by law. CARRIER is solely responsible for the safety and operation of the equipment, and the actions of all drivers and other persons or entities responsible for the transportation of freight. Nothing in this Agreement abrogates the responsibility of the CARRIER to operate safely and in accordance with all law and good accepted best practices of a motor carrier.

c. CARRIER will notify BROKER immediately if its federal Operating Authority is revoked, suspended or rendered inactive for any reason; and/or if it is sold, or if there is a change in control of ownership, and/or any insurance required hereunder is threatened to be or is terminated, cancelled (whether by an insurer or surety provider by CARRIER, or by any person or entity), suspended, or revoked for any reason.

i. CARRIER agrees that at no time during the term of this contract with BROKER, shall it have an “Unsatisfactory” or “Conditional” safety rating as determined by the Federal Motor Carrier Safety Administration (FMCSA), and that it has no knowledge of any threatened or pending interventions by FMCSA; if CARRIER receives an “Unsatisfactory” safety rating, or a rating has changed from “Satisfactory” to “Conditional” or if any future safety rating has otherwise been downgraded by FMCSA, it shall immediately notify BROKER and shall not transport any freight hereunder without BROKER’s prior written consent. The provisions of this paragraph are intended to include safety rating designations, which may replace those above, which are subject to change by FMCSA at any time.

ii. Upon reasonable demand, CARRIER shall provide to BROKER copies of its DOT Operating Authority, Policy of Insurance, including all endorsements, Certificate of Insurance, surety, and financial responsibility.

d. CARRIER agrees that all equipment provided for the transportation of food or food grade products will comply with the requirements of The Sanitary Food Transportation Act, or, to the extent that CARRIER performs services hereunder within, or to or from Canada, the Food and Drug Acts and any/all other applicable statutes and regulations, including, but not limited to the Ontario Food Safety and Quality Act, 2001, or any other jurisdiction's equivalent, and none of the equipment so provided has been or will be used for the transportation of any waste of any kind, garbage, hazardous materials, poisons, pesticides, herbicides, or any other commodity that might adulterate or contaminate food, food products or cosmetics.

e. CARRIER agrees that where a seal is placed on a trailer by consignor, shipper, CARRIER or other party, CARRIER is responsible to maintain the seal intact until removed by an authorized employee of consignee upon delivery. CARRIER is liable for any and all claims, losses, or liabilities arising from or as a result of any unauthorized removal of seal, broken seal, missing seal, tampered seal, or mismatched seal number. CARRIER is solely responsible for ensuring that cargo is maintained according to any requirements stated on the bill of lading or load confirmation. CARRIER must ensure that all personnel transporting or handling freight subject to the Food Safety Modernization Act of 2011 and its implementing regulations (collectively the “Act”), receive training required by the Act. BROKER will transmit to CARRIER, on the Load Confirmation or separately by email, the shipper’s or consignee’s protocols and requirements for transporting food shipments subject to the Act. CARRIER must strictly comply with all such protocols and requirements. CARRIER’S failure to comply with such protocols and requirements will permit the consignor, consignee, or BROKER to declare any freight transported on a shipment on which noncompliance occurred to be rejected and a total loss.

f. CARRIER is in, and shall maintain compliance during the term of this Agreement, with all applicable federal, state and local laws and regulations relating to the provision of its services including, but not limited to:

i. all registration, licensing, and insurance requirements required to perform the services;

ii. security regulations;

iii. loading and securement of freight;

iv. qualification, licensing, hiring, and training of drivers;

v. implementation and maintenance of driver safety including, but not limited to, controlled substances and hours of service;

vi. maintenance and control of the means and method of transportation including, but not limited to, performance of its drivers;

vii. owner/operator leases;

viii. implementation and maintenance of equipment safety;

ix. sanitation, temperature, and contamination requirements for transporting food, perishables, and other products; and

x. the Food Safety Modernization Act (21 U.S.C. § 2201 et seq.) and its implementing regulations; and

xi. transportation of Hazardous Materials, (including the licensing and training of drivers), as defined in 49 C.F.R. §172.800, §173, and §397 et seq. to the extent that any shipments hereunder constitute Hazardous Materials.

g. CARRIER agrees that the terms and conditions of this Agreement shall apply on all shipments it handles for BROKER. Any tariff terms published by CARRIER which are inconsistent with this Agreement shall be ineffective and inapplicable to the shipments tendered under this Agreement.

h. CARRIER agrees that BROKER is the sole party responsible for payment of CARRIER’s charges. Failure of BROKER to collect payment from its customer shall not exonerate BROKER of its obligation to pay CARRIER. BROKER agrees to pay CARRIER's undisputed invoice within 30 days of receipt of the bill of lading or proof of delivery, provided CARRIER is not in default under the terms of this Agreement. If BROKER has not paid CARRIER’s undisputed invoice as agreed, and CARRIER has complied with the terms of this Agreement, CARRIER may seek payment from the Shipper or other party responsible for payment after giving BROKER 10 business days advance written notice, except that CARRIER shall not seek payment from Shipper or any other Party responsible for payment if shipper or such other Party can prove payment to BROKER.

i. To the extent that any shipments subject to this Agreement are transported into, out of, through or within the State of California, CARRIER agrees that CARRIER shall be and remain in compliance with all California Air Resources Board regulations. CARRIER shall be liable to BROKER and shipper for any penalties, or any other liability, imposed on or assumed by BROKER or shipper because of CARRIER’s use of non-compliant equipment.

5. Shipper-Broker Relationship- The Parties agree that BROKER at all times will be acting as an independent contractor, and not an employee, agent, or principal of a shipper.

6. Broker-Carrier Relationship- CARRIER agrees and acknowledges that as the motor carrier transporting a shipper’s freight pursuant to this Agreement, CARRIER is an independent contractor, and not an employee, agent or principal of BROKER. CARRIER further agrees and acknowledges that its employees and agents, including the driver or drivers transporting freight, are not the employees or agents of BROKER, and that BROKER does not control or have the right to control the CARRIER, its employees, agents, drivers, or any person or entity associated with the CARRIER.

CARRIER must give priority to compliance with all laws and regulations and must not interpret any provision of this Agreement or request or communication from any employee or agent of BROKER, shipper, consignor, or BROKER’s customer(s) to authorize or encourage, directly or by implication, CARRIER to deviate from any law or regulation applicable to CARRIER’s operations as a motor carrier. BROKER will not coerce CARRIER, and any directions or instructions given by BROKER to CARRIER for the transportation of the freight shall be for information and convenience only, and CARRIER retains full control of the details of transportation of freight assigned to it under this Agreement. BROKER will not impose fines on CARRIER unless BROKER is instructed to do so by the shipper.

7. No Broker Liability- CARRIER agrees and acknowledges that BROKER will not be liable to a shipper for any act or omission of the CARRIER or any of its “employees” which transport a shipper>’s freight, as the term “employee” is defined under 49 C.F.R. §390.5 or for any of CARRIER’s Agents, Principals, Assigns or Subcontractors.

To the extent permissible under applicable federal and state law, CARRIER shall defend, indemnify and hold BROKER and its shipper customer harmless from any claims, actions or damages, arising out of its performance under this Agreement, including cargo loss and damage, theft, delay (to the extent required of CARRIER in paragraph 9 below), damage to property, and personal injury or death. Neither Party shall be liable to the other for any claims, actions or damages due to the negligence, culpable conduct or intentional act of the other Party, or the shipper. The obligation to defend shall include all costs of defense as they accrue.

8. No Broker Control- The Parties agree that BROKER will not assert any control nor have any right to exercise control over a shipper’s freight, including, but not limited to, taking possession of a shipper’s freight, and BROKER shall not direct or control the routes taken by CARRIER in the transportation of a shipper’s freight.

9. Freight Loss, Damage, or Delay- CARRIER hereby assumes the liability of a motor carrier as provided in §14706 of Title 49 of the United States Code (the Carmack Amendment), and all claims for loss, damage and/or salvage will be handled and processed in accordance with 49 C.F.R. Part 370. Notwithstanding the terms of 49 CFR 370.9, CARRIER shall pay, decline or make settlement offer in writing on all cargo loss or damage claims within 30 days of receipt of claim. Failure of CARRIER to pay, decline or offer settlement within this 30-day period shall be deemed admission by CARRIER of full liability for the amount claimed and a material breach of this Agreement. BROKER shall be permitted to withhold payment which may be due to CARRIER during the pendency of a cargo claim. CARRIER shall pay BROKER, or allow BROKER to withhold payment and deduct from any amount BROKER owes CARRIER, BROKER’s customer’s full actual loss for any such claim. Exclusions in CARRIER’s insurance coverage shall not exonerate CARRIER from this liability. No limitation of CARRIER's liability shall apply, unless CARRIER first obtains the express written consent of BROKER. CARRIER agrees to indemnify BROKER and hold BROKER harmless for any cargo loss or damage or from delay in the delivery of a shipper’s freight and for any damages resulting therefrom.

10. Bills of Lading -

a. For each shipment tendered to CARRIER, CARRIER will provide to the shipper a standard bill of lading that is in accordance with 49 C.F.R. §373, listing the consignor and consignee, the origins and destinations, the number of packages, the description of the freight, and the weight, volume or measurement of the freight. The Parties agree that BROKER will not be a party to the bill of lading.

b. CARRIER acknowledges that BROKER should not be listed on the bill of lading and that if BROKER is listed on the Bill of Lading as the carrier this will occur for the convenience of the shipper only and CARRIER at all times is the actual carrier of goods and BROKER’S role is limited to arranging for transportation. In the event BROKER’S name is listed on the bill of lading, shipping manifest or other similar document as the carrier, CARRIER shall cross-out or otherwise remove BROKER’S name and shall provide CARRIER’S name as well as driver’s name and signature to evidence receipt of Shipper’s goods.

c. CARRIER understands that re-brokering and double brokering are prohibited and CARRIER will not re-broker, assign, subcontract or interline the shipments hereunder without the express written consent of BROKER prior to the shipment being tendered to any other CARRIER. If CARRIER breaches this provision, BROKER shall have the right of paying the monies it owes CARRIER directly to the delivering carrier, in lieu of payment to CARRIER, and BROKER shall thereby be released from any further obligation to pay CARRIER. Upon BROKER’s payment to delivering carrier, CARRIER shall not be released from any liability to BROKER under this Agreement.

d. The Parties agree that the shipment of freight will move under the terms and conditions listed in the bill of lading, except where inconsistent with the terms of this Agreement.

e. CARRIER agrees to list itself on the bill of lading as the party in possession and control of the freight.

f. The terms and conditions of the bill of lading shall not operate to alter or modify the terms of this Agreement between CARRIER and BROKER.

g. CARRIER shall issue a bill of lading in compliance with 49 U.S.C. §80101 et seq., 49 C.F.R. §373.101 (and any amendments thereto), for the property it receives for transportation under this Agreement. Unless otherwise agreed in writing, CARRIER shall become responsible/liable for the freight when it takes/receives possession thereof, and the trailer(s) is loaded, regardless of whether a bill of lading has been issued, and/or delivered to CARRIER, and which responsibility/liability shall continue until delivery of the shipment to the consignee and the consignee signs the bill of lading or delivery receipt. Any terms of the bill of lading (including but not limited to payment terms, released rates or released value) inconsistent with the terms of this Agreement shall be ineffective. Failure to issue a bill of lading or sign a bill of lading acknowledging receipt of the cargo by CARRIER shall not affect the liability of CARRIER. Said Bills of Lading are intended by the Parties to be Bills of Lading, as that term is interpreted under the Carmack Amendment and applicable law and not merely as “delivery receipts”, “freight receipts” or any similar term.

11. No Back-Solicitation -

a. Unless otherwise agreed in writing, CARRIER shall not knowingly solicit freight shipments (or accept shipments) for a period of 12 month(s) following termination of this agreement for any reason, from any shipper, consignor, consignee, or other customer of BROKER, when such shipments of shipper customers were first tendered to CARRIER by BROKER.

b. In the event of breach of this provision, BROKER shall be entitled, for a period of 15 months following delivery of the last shipment transported by CARRIER under this Agreement, to a commission of eighteen percent (18%) of the gross transportation revenue (as evidenced by freight bills) received by CARRIER for the transportation of said freight as liquidated damages. Additionally, BROKER may seek injunctive relief and in the event it is successful, CARRIER shall be liable for all costs and expenses incurred by BROKER, including, but not limited to, reasonable attorney's fees.

12. Assignment/Modifications of Agreement- Neither Party may assign or transfer this Agreement, in whole or in part, without the prior written consent of the other Party, except that BROKER may assign this Agreement and all of its rights and obligations hereunder to a commonly-owned affiliate of BROKER, in which case courtesy notice shall be provided to CARRIER. No other amendment or modification of the terms of this Agreement shall be binding unless in writing and signed by the Parties.

13. Insurance - CARRIER shall furnish BROKER with Certificate(s) of Insurance; financial responsibility or insurance policies providing thirty (30) days advance written notice of cancellation or termination; and unless otherwise agreed, subject to the following minimum limits:

a. commercial general liability (CGL) insurance with contractual liability coverage – $1,000,000;

b. motor carrier liability insurance insuring “any auto” used in CARRIER ’s operations (coverage symbol 61) - $1,000,000 ($5,000,000 if transporting hazardous materials including environmental damages due to release or discharge of hazardous substances; hazmat carriers must have endorsement CA9948, sudden and accidental pollution coverage, and this endorsement must be shown on the Certificate of Insurance provided to BROKER);

c. All Risk Broad Form Motor Truck Cargo Legal Liability Coverage - $100,000. The coverage provided under the policy shall have no exclusions or restrictions of any type that would foreseeably preclude coverage relating to cargo claims including, but not limited to, exclusions of unattended or unattached trailers, unattended or unlocked vehicles, theft, or for any commodities transported under this Agreement, refrigeration breakdown or lack of refrigerator fuel. Furthermore, if the commodity being hauled is refrigerated, refrigeration breakdown coverage will be provided and the CARRIER will honor and abide by the servicing requirements set forth in the insurance policy or endorsement. Furthermore, if the commodity being hauled is on a flatbed or similar open conveyance, that there be no exclusion for wetness, rust, corrosion or moisture; and

d. workers’ compensation with limits required by law.

e. Except for the higher coverage limits which may be specified above, the insurance policies and financial responsibility shall comply with minimum requirements of the Federal Motor Carrier Safety Administration and any other applicable regulatory state agency. Nothing in this Agreement shall be construed to avoid CARRIER’S liability due to any exclusion or deductible of any insurance policy or to limit CARRIER’S liability for contribution and/or indemnification and defense of the BROKER.

f. Coverage must be written with an insurance carrier rated B+ or better as rated by AM Best Company. CARRIER agrees that BROKER shall be an “additional insured” under CARRIER’s general liability and motor carrier liability policies and as a “loss payee” under CARRIER’s Cargo liability policy.

14. Miscellaneous -

a. Non-Exclusive Agreement: CARRIER and BROKER acknowledge and agree that this contract does not bind the respective Parties to exclusive services to each other. Either party may enter into similar agreements with other carriers, brokers, or freight forwarders.

b. Waiver of Provisions:

i. Failure of either Party to enforce a breach of waiver of any provision or term of this Agreement shall not be deemed to constitute a waiver of any subsequent failure or breach, and shall not affect or limit the right of either Party to thereafter enforce such a term or provision.

ii. This Agreement is for specified services pursuant to 49 U.S.C.§14101(b). To the extent that terms and conditions herein are inconsistent with Part (b), Subtitle IV, of Title 49 U.S.C. (ICC Termination Act of 1995), the Parties expressly waive any or all rights and remedies they may have under the Act.

15. Severability- If any portion or provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, The Parties agree that said portion or provision of the Agreement shall be severable, and that the remaining provisions of the Agreement shall continue in full force and effect.

16. Notices- Any and all written or electronic notices required or permitted to be given under this Agreement shall made in writing and delivered to the addresses shown below the signatures of the parties.

17. Force Majeure- In the event that fire, flood, other natural disaster, war, embargo, riot, or civil disobedience prevents the performance of either BROKER or CARRIER’S obligations under this agreement, that party shall not be liable to the other party for such failure to perform.

18. Choice of Law and Venue- All issues concerning the construction, interpretation, validity, and enforceability of this Agreement, and any other dispute arising out of this Agreement, whether in a court of law or in alternative dispute resolution, shall be governed by and construed and enforced in accordance with federal law, and to the extent not pre-empted thereby, the laws of the State of Maryland, including the applicable statutes of limitations under Maryland law, without giving effect to any choice of law provision applying the laws of another jurisdiction.

19. Indemnification- CARRIER will indemnify and hold harmless BROKER and BROKER’s customers and their employees, officers, directors, agents, principals and assigns (the “Indemnified Parties”) from any liability, settlements, judgments, verdicts, attorney fees or expense of any nature whatsoever arising out of any claims, demands or suits against the Indemnified Parties which in any way relate to a claim of liability or culpability for the actions of CARRIER, including negligent or improper hiring or retention of the CARRIER, its employees (statutory or otherwise) agents, principals, officers, directors, assigns or anyone acting by or for CARRIER, for any aspect of the transportation of freight, public liability, personal injury, bodily injury, emotional or mental distress, wrongful death, loss of consortium, cargo liability or any claim or cause of action recognized by any state, municipality, county or any jurisdiction, Administrative Agency, or the Government of the United States. CARRIER agrees to have insurance to cover its indemnification obligations under this section, but CARRIER’s indemnification obligations are not capped by the amount of any available insurance.

20. Entire Agreement- This Agreement, including all appendices and addenda, constitutes the entire agreement intended by and between the Parties and supersedes all prior agreements, representations, warranties, and understandings, whether oral or in writing.

21. Modification of Agreement - This Agreement and Exhibit A et seq. attached may not be amended, except by mutual written agreement, or the procedures set forth above.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the effective date listed below in their respective names by their fully authorized representatives below: