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EXHIBIT 10.58
TRANSPORTATION MANAGEMENT SERVICES AGREEMENT
BETWEEN
UPS LOGISTICS GROUP, INC.
AND
TRACTOR SUPPLY COMPANY
This Transportation Management Services Agreement (the "Agreement") is made and
entered into as of the 10th day of May 2001 (the "Effective Date"), by and
between Tractor Supply Company, whose address is 320 Plus Park Blvd., Nashville,
Tennessee 37217 ("Customer"), and UPS Logistics Group, Inc., whose address is
990 Hammond Drive, Suite 400, Atlanta, Georgia 30328 ("Logistics Group").
WHEREAS, Customer requires transportation management of its goods,
commodities or products (the "Goods"); and
WHEREAS, Logistics Group has the capability to provide transportation
management services (the "Services") of Customer's Goods; and
NOW, THEREFORE in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
1. TERM AND TERMINATION:
1.1 Term. The term of this Agreement shall commence on the
Effective Date hereof, and shall continue thereafter in full
force and effect for a period of thirty-six (36) months.
Customer shall have the option of extending the initial term
for a period of one year, provided, however, that Customer
shall give Logistics Group written notice of such extension at
least ninety (90) days prior to the expiration of the initial
term; and, further provided that the parties mutually agree in
writing, at least sixty (60) days prior to the expiration of
the initial term, to all rates and charges with respect to the
extended term.
1.2 Termination. Either party may terminate this Agreement on one
hundred eighty (180) days prior written notice, subject to the
remainder of this Section 1.
1.3 Early Termination Obligations
1.3.1 If Customer terminates Exhibit B for any reason other
than a default by Logistics Group, or if Logistics
Group terminates Exhibit B for reason of default by
Customer, any time after the Effective Date, Customer
agrees to the early termination provisions set forth
in Section 3.0 of Exhibit B.
1.3.2 If Customer terminates Exhibit C for any reason other
than a default by Logistics Group, or if Logistics
Group terminates Exhibit C for reason of default by
Customer, any time after the Effective Date, Customer
shall be liable for the early termination costs set
forth in Section 3.0 of Exhibit C.
2.0 GOODS AND SERVICES:
2.1 Description of Goods. Exhibit A hereto describes the Goods for
which Logistics Group shall cause transportation management
services to be provided pursuant to this Agreement.
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2.2 Services to Be Performed.
2.2.1 Logistics Group, by and through its affiliate,
Worldwide Dedicated Services, Inc., agrees to provide
dedicated transportation services ("Dedicated
Services") as more fully set out in Exhibit B hereto.
2.2.2 Logistics Group agrees to provide transportation
management services ("Management Services") as more
fully set out in Exhibit C hereto.
3.0 RATES AND CHARGES:
3.1 The rates and charges for the Dedicated Services are set forth
in Exhibit B hereto.
3.2 The rates and charges for Management Services are set forth in
Exhibit C hereto.
4.0 JOINT LOGISTICS COMMITTEE; RATE REVIEW:
4.1 Joint Logistics Committee. Logistics Group and Customer shall
jointly establish a committee ("the Joint Logistics
Committee") to review the operation of this Agreement and the
provision of the Services in an effort to facilitate the
performance of each party's obligations hereunder. The Joint
Logistics Committee shall comprise an equal number of
representatives from Logistics Group and from Customer (but no
more than two each) with such representatives to be nominated
by the relevant party from time to time to the other party in
writing. In addition, other representatives that the parties
may reasonably request shall be entitled to attend and
participate in meetings of the Joint Logistics Committee. The
initial representatives of Logistics Group to the Logistics
Committee shall be the General Manager of Transportation
Management and General Manager of Dedicated Services, and the
initial representatives of Customer to the Logistics Committee
shall be the Director of Transportation and the Vice President
of Logistics.
4.2 Meetings of the Joint Logistics Committee. The Joint Logistics
Committee shall meet within three (3) months of the Effective
Date, and thereafter shall meet no less than once every three
(3) months in person or by telephone conference call
throughout the duration of this Agreement (other than where
the parties agree that such a periodic meeting is not
necessary) and at such other times as either party may
reasonably request.
4.3 Changes in Operating Parameters. Customer and Logistics Group
acknowledge and agree that Logistics Group has calculated the
Rates and Charges set forth in Exhibits B and C based on and
in reliance of certain key assumptions ("Assumptions" or
"Operating Parameters") supplied to Logistics Group by
Customer, which Operating Parameters are set forth in such
Exhibits. In the event of a change in any Operating Parameter,
either party may propose such rate adjustment as it deems
reasonably necessary to respond to the Operating Parameter
change. The Joint Logistics Committee shall consider the
proposed rate adjustment and each party agrees to provide all
information reasonably requested by any member of the Joint
Logistics Committee to assist the requesting member therefor.
In the event that the Joint Logistics Committee is unable to
unanimously agree on the amount of an appropriate rate
adjustment (or that no such adjustment should be made) within
thirty (30) days following the date of their first meeting
with respect to such proposed rate adjustment, any member of
the Joint Logistics Committee may submit the matter to
arbitration in accordance with Section 18 hereof.
4.4 Changed Conditions. Customer and Logistics Group acknowledge
that certain "Changed Conditions," could alter the Operating
Parameters on which the Schedule of Rates and Charges is
based. As used herein, a Changed Condition means the enactment
or promulgation of any new law, regulation or statute, the
repeal or judicial annulment of an existing law, regulation or
statute, or the imposition of new material conditions or the
removal of existing material conditions on the issuance or
renewal of any official permit, license or approval after the
Effective Date hereof,
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which (a) results in the imposition or removal of requirements
affecting the ability of Logistics Group to perform the
Service under this Agreement, (b) are substantially more or
less burdensome on Logistics Group than the requirements as of
the Effective date hereof, and (c) result in a substantial
decrease or increase in the Rates and Charges to which
Logistics Group would otherwise be entitled hereunder. If any
Changed Condition occurs after the Effective Date hereof,
either party shall have the right to propose such rate
adjustment as it deems reasonably necessary to preserve for
such party its intended benefits under this Agreement. Such a
review will occur at least once on or before the yearly
anniversary date of the term of this Agreement. The Joint
Logistics Committee shall consider the proposed rate
adjustment, and each party agrees to provide all information
reasonably requested by any member of the Joint Logistics
Committee to assist the requesting member therefor. In the
event that the Joint Logistics Committee is unable to
unanimously agree on the amount of an appropriate rate
adjustment (or that no such adjustment should be made) within
thirty (30) days following the date of their first meeting
with respect to such proposed rate adjustment, any member of
the Joint Logistics Committee may submit the matter to
arbitration in accordance with Section 18 hereof.
4.5 Cost of Living Increases. Notwithstanding any other provision
in this Section 4, Customer understands that the cost for all
labor, including but not limited to managers, supervisors,
clerk and drivers, may be subject to an annual cost of living
adjustment not to exceed four and one-half percent (4.5%),
which increase will be mutually agreed to by Joint Logistics
Committee.
5. BILLING AND PAYMENT:
5.1 Logistics Group shall bill Customer for all Fixed, Variable
and Miscellaneous Charges, as indicated in Exhibit B and
Exhibit C attached hereto at the end of each week in which the
charges were incurred.
5.2 Logistics Group shall provide weekly consolidated billings to
Customer for all carrier charges incurred that week.
5.3 Customer agrees to pay the invoices as submitted and approved
within fifteen (15) days from date of invoice. Any dispute as
to the amount of the invoices shall be promptly resolved by
the parties. Claims for loss or damage to Goods shall not be
deducted from invoices, and shall be handled in accordance
with the provisions of Sections 18 and 20 hereof.
5.4 If Customer fails to make timely payment of the charges as set
in invoices reviewed and approved for payment by Customer
within the grace period specified in Section 19 hereof, then,
in addition to any other right that Logistics Group may have,
Customer shall pay to Logistics Group a late payment charge at
the rate of one percent per month or, the highest rate allowed
by applicable law, on the amount outstanding and unpaid from
time to time, whichever is lower. The late payment charge
shall be calculated from the date that the unpaid charges
become due as outlined above and shall be compounded monthly
for the period during which any such charges remain unpaid.
6. INSURANCE:
6.1 Logistics Group shall maintain at all times during the life of
this Agreement insurance as provided below and shall name
Customer as an additional insured to the extent of indemnity
provided herein under its liability policies as follows:
6.1.1 Commercial general liability insurance including
premises/operations, broad form property damage,
independent contractors, and contractual liability
covering Logistics Group's obligations hereunder for
bodily injury and property damage, with a combined
single limit of not less than $1,000,000 each
occurrence.
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6.1.2 Workers' compensation insurance in statutory amounts
covering Logistics Group and its employees, and
employer's liability insurance in an amount not less
than $300,000 per accident/disease.
6.1.3 Motor cargo insurance for $100,000 to cover loss or
damage to Goods caused by Logistics Group's
negligence.
6.2 All insurance required above shall be carried with insurance
companies licensed to do business in the state(s) where
operations are maintained. Logistics Group shall deliver to
Customer, upon Customer's request, certificates of insurance
as evidence of the required coverages. All policies shall
provide that such coverages under these policies shall not be
canceled or materially changed without at least thirty (30)
days prior written notice delivered to Customer.
7.0 INDEMNIFICATION:
7.1 Claim Notices.
7.1.1 Any Party entitled to seek indemnification pursuant
to this Agreement (the "Indemnitee") must provide
written notice (the "Claim Notice") to the Party
obligated to provide indemnification (the
"Indemnitor") with respect to any claim, suit or
proceeding initiated against the Indemnitee by a
party other than the Indemnitor ("Third Party
Claim").
7.1.2 All Claim Notices must be delivered promptly, but
in no event more than thirty days (the "Notice
Period") following (i) the receipt of actual notice
of the Third party Claim by any officer, director
or manager of Indemnitee, or (ii) the occurrence of
any event that any officer, director or manager of
Indemnitee believes or should reasonably believe
could give rise to a Third Party Claim.
7.1.3 The failure of Indemnitee to notify Indemnitor
within the Notice Period shall not relieve
Indemnitor of any liability with respect to the
Third Party Claim, except to the extent the
Indemnitor demonstrates that the defense of the
Third Party Claim is materially prejudiced by such
failure.
7.1.4 The Claim Notice should state in reasonable detail
the facts giving rise to the Third Party Claim and
Indemnitee's intention to seek indemnification for
the Third Party Claim. If the Indemnitee wishes to
control the defense of the Third Party Claim, this
should also be stated in the Claim Notice.
7.2 Defense of a Third Party Claim.
7.2.1 Upon receipt of a Claim Notice, the Indemnitor may
elect to assume the defense of the Third Party
Claim at Indemnitor's expense with counsel
reasonably satisfactory to the Indemnitee. The
Indemnitor shall promptly notify the Indemnitee in
writing whether it has elected to assume such
defense, and each party agrees to cooperate with
the party assuming the defense of the Third Party
Claim (including, without limitation, allowing and
directing its employees to serve as witnesses and
otherwise rendering such assistance as the
defending party may reasonably request) in such
defense and related negotiations (including
settlement negotiations).
7.2.2 If the Indemnitor elects to control the defense of a
Third Party Claim, the Indemnitee shall have the
right to employ separate counsel in any action or
claim and to participate in its defense. The fees and
expenses of counsel employed by Indemnitee shall be
at the expense of Indemnitee; provided, however, that
if counsel to the Indemnitor
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determines that it is unable to represent the
interests of both the Indemnitor and the Indemnitee,
the Indemnitee may employ separate counsel at the
Indemnitor's expense.
7.2.3 If Indemnitor assumes the defense of a Third Party
Claim no compromise or settlement may be effected by
the Indemnitor without the Indemnitee's consent
unless (i) there is no finding or admission of any
violation of law or any violation of the rights of
any person by Indemnitee, (ii) there is no effect on
any other claim that may be made by or against
Indemnitee, (iii) the sole relief provided is
monetary damages that are paid in full by Indemnitor,
and (iv) the compromise or settlement contains, as an
unconditional term thereof, the giving by the
claimant or the plaintiff of the Indemnitee a release
from all liability in respect of such Third Party
Claim. The Indemnitee shall have no liability with
respect to any compromise or settlement thereof
effected without its consent.
7.2.4 If the Indemnitor does not notify the Indemnitee
within fifteen (15) days after receipt of the Claim
Notice that Indemnitor elects to undertake the
defense of a Third Party Claim, the Indemnitee shall
have the right to defend the claim, at the expense of
Indemnitor, with counsel of Indemnitee's choosing.
7.2.5 No settlement of a Third Party Claim defended by
Indemnitee pursuant to this Section 7 shall be made
without the prior written consent of Indemnitor,
which consent shall not be unreasonably withheld.
Failure of Indemnitor to reject a settlement within
ten (10) days of receipt thereof shall be deemed an
acceptance of such settlement.
7.3 Other Claims.
7.3.1 If an Indemnitee has a claim against an Indemnitor
that does not involve a Third Party Claim, the
Indemnitee shall notify the Indemnitor with
reasonable promptness of its claim, specifying the
nature of and specific basis for such claim and the
estimated amount of such claim.
7.3.2 If Indemnitor elects to satisfy the claim, the
Indemnitor shall remit payment for the amount of the
claim to the Indemnitee upon receipt of an invoice
therefor.
7.3.3 If the Indemnitor elects to dispute either the basis
of the claim or the amount of the claim, Indemnitor
shall promptly provide written notice to Indemnitee
setting forth the specific basis for the dispute. In
the event of a dispute, the Indemnitor and Indemnitee
shall proceed in good faith to negotiate a resolution
of such dispute, and if not resolved through good
faith negotiation, the dispute shall be resolved in
accordance with the dispute resolution provisions set
forth in Section 18 hereof.
8. LIABILITY:
8.1 In no event shall Logistics Group, its employees, agents,
subcontractors, or affiliates be liable for any loss of or
damage to Goods arising out or caused, directly or indirectly,
by an event of Force Majeure or the packing, packaging,
loading and/or unloading of the Goods by Customer, or any
other circumstance or cause that could not be prevented by its
respective reasonable care determined in accordance with
applicable law.
8.2 For shipments of Goods not transported by Logistics Group's
affiliated company, WDS, the carrier of the Goods shall have
the risk of any loss of or damage to the Goods managed
pursuant to this Agreement while the Goods are in such
carrier's care, custody, or control on such terms and
conditions as may be agreed to in writing between Logistics
Group and the carrier. Such terms and conditions shall not be
materially less advantageous to the Customer than those set
forth in this Agreement.
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8.3 For shipments transported by WDS, Logistics Group shall only
be liable to Customer for the actual loss, damage, or injury
to the Goods occurring while the Goods are in the possession
or under the control of WDS and resulting from WDS's negligent
acts or omissions, except to the extent that any loss or
damage to the Goods is caused by the acts or omissions of
Customer or its consignees and their employees, which loss or
damage will be measured by Customer's replacement cost for the
Goods, without markup.
8.4 Logistics Group's maximum liability hereunder to Customer
shall not exceed $100,000 per occurrence for truckload (TL) or
WDS shipments, or exceed the declared or released value for
less than truckload (LTL) or parcel shipments, and Customer
agrees to waive the right of subrogation on behalf of its
insurers for any amount above foregoing limits, no matter how
caused.
8.5 For claims not caused by Logistics Group's negligence,
Logistics Group agrees to file claims on behalf of Customer
with the carriers engaged under this Agreement, as further
described in Exhibit C hereto. Claims will be limited to the
values which Customer has authorized Logistics Group to
declare for its shipments. In no event shall Logistics Group
have any responsibility to pay any amounts which a carrier
fails or refuses to pay with respect to any carrier claim.
8.6 Neither party shall be liable to the other party for any
indirect, special, punitive or consequential damages.
9. DESIGNATED CONTACT:
9.1 Customer and Logistics Group shall furnish to each other in
writing the name, address, office phone number, home phone
number, email address, and special access code numbers, if
any, of each employee, agent or representative of Customer or
Logistics Group who is authorized to instruct Customer or
Logistics Group with respect to the Services to be performed
pursuant to this Agreement. Such information shall be
continuously updated in writing to both parties.
9.2 Logistics Group is entitled to rely on any instructions,
without regard to the medium in which it is received by
Logistics Group, which it reasonably believes have been
authorized by Customer in performing the Services hereunder,
including but not limited to the disposition of Goods.
10.0 RIGHT OF INSPECTION: Logistics Group reserves the right to open and
inspect any carton or articles constituting Goods tendered to it for
transportation management pursuant to this Agreement. Logistics Group
further reserves the right to refuse transportation of any shipment
pursuant to this Agreement which it reasonably believes is damaged or
could cause damage to the shipment, other merchandise or the carrier's
equipment, or which is improperly or insecurely packed or wrapped.
11.0 GOVERNING STATE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee.
12.0 FORCE MAJEURE. If and to the extent that either party may be precluded
by acts of God, authority of laws, strikes, casualties, or failure in
electrical power, heat, light, air conditioning, or communications
equipment, or other causes beyond its reasonable control from
performance hereunder (a "Force Majeure Event"), such performance shall
be excused or delayed to the extent that it is necessitated by such
Force Majeure Event. Upon the occurrence of such a Force Majeure Event,
the party seeking to rely on this provision shall promptly give written
notice to the other party of the nature and consequences of the Force
Majeure Event. A party may terminate this Agreement if a Force Majeure
Event affecting the performance of the other party has continued
unremedied for more than ninety (90) days; provided that such
termination shall not be deemed a termination following a default for
purposes of the early termination provisions
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referred to in Section 1.3 hereof.
13.0 REPRESENTATIONS AND WARRANTIES.
13.1 Each party represents and warrants to the other party as
follows: (a) the party is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
organization; (b) the party has full power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder; (c) this Agreement constitutes the
valid and legally binding obligation of the party, enforceable
in accordance with its terms and conditions; (d) neither the
execution and delivery of this Agreement, nor the performance
hereof shall (i) violate any provision of the charter, bylaws,
or other governing document of the party; or (ii) conflict
with, result in a breach of, or constitute a default under any
other agreement or arrangement or any law, regulation, order
or decree by which the party is bound; and (e) the party is
not obligated to pay any brokers' or finders' fee to any
person in connection with the negotiation and/or execution of
this Agreement.
13.2 THE WARRANTIES OF THE PARTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT ARE THE SOLE WARRANTIES MADE BY THE PARTIES AND ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, OR
STATUTORY, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE. IN
ANY JURISDICTION WHICH DOES NOT ALLOW THE EXCLUSION OR
LIMITATION OF IMPLIED WARRANTIES, NO IMPLIED WARRANTIES SHALL
EXTEND BEYOND THE TERM OF THIS AGREEMENT, TO THE MAXIMUM
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION.
14.0 NON-WAIVER; SEVERABILITY. The parties agree that a waiver of any right
under this Agreement by either party on any occasion will not in any
way constitute a waiver of such right or any other right in any
agreement on any subsequent occasion. The parties further agree that in
the event any provision of this Agreement is determined to be invalid,
such invalidity will not affect the validity of the remaining portions
of this Agreement, and further agree to substitute the invalid
provision with a provision which most closely approximates the intent
and economic effect of the invalid provision. Acceptance by Logistics
Group of the amounts (or lesser amounts) payable hereunder shall not be
deemed a waiver of any default hereunder.
15.0 USE IN ADVERTISING.
15.1 Both parties agree that neither party's corporate name or
logo, or the name or logo of any of its affiliated companies,
shall be disclosed or advertised in any manner without prior
written mutual consent. Notwithstanding the foregoing,
Customer hereby grants to Logistics Group continuing
permission to disclose Customer's name as a reference to any
current or prospective customers of Logistics Group.
15.2 During the term of this Agreement, Customer hereby grants to
Logistics Group the limited, nonexclusive, nonassignable, and
personal right and license to use Customer's name and logo and
any proprietary information provided to Logistics Group
hereunder, in accordance with the specific requirements of
this Agreement, the Customer's written instructions or to the
extent otherwise reasonably necessary or appropriate to
perform the Services hereunder.
16.0 CONFIDENTIALITY.
16.1 Confidential Information. For purposes of this Section,
"Confidential Information" means any information, other than
Trade Secrets (as defined in Section 16.2), that the
disclosing Party or any Affiliate thereof designates as
confidential, is treated by the disclosing Party as
confidential or proprietary, or is subject to efforts by the
disclosing Party or its Affiliates, which are reasonable under
the circumstances to maintain its secrecy including, without
limitation, the contents of this Agreement, the business
processes or customers of the disclosing Party or its
Affiliates and any and all additional confidential information
of the disclosing Party that the receiving Party
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becomes aware as a result of the receiving Party's access to
the disclosing Party's facilities or business operations. The
term Confidential Information shall include (i) any notices
given under this Agreement and not only written information
but information transferred orally, visually, electronically
or by any other means, and (ii) all information that has been
disclosed to either Party by a third party that the receiving
Party is obligated to treat as confidential or secret.
16.2 Trade Secrets. For purposes of this Section, "Trade Secrets"
means information, without regard to form, including, but not
limited to, technical or non-technical data, a formula, a
pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial
plans, product plans, or a list of actual or potential
customers or suppliers which is not commonly known by or
available to the public and which information (a) derives
economic value, actual or potential, from not being generally
known to, and not being readily ascertained by proper means
by, other persons who can obtain economic value from its
disclosure or use, and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
16.3 Exclusions. For the avoidance of doubt, Confidential
Information and Trade Secrets (collectively, "Protected
Information") shall not include:
16.3.1 Information that is in the public domain at the date
of this Agreement;
16.3.2 Information that subsequently comes into the public
domain, otherwise than as a result of a breach of
this Agreement, but only after it has come into the
public domain;
16.3.3 Information which the receiving Party obtains from a
third party who, to the knowledge of the receiving
Party, is not under any confidentiality obligation to
the disclosing Party respecting such information;
16.3.4 Information which the receiving Party at the time of
disclosure already has in its possession and which is
not subject to any obligation of secrecy on its part
to the other Party; or
16.3.5 Information which the receiving Party can show to
have been independently developed by employees of the
receiving Party who had no access to the information
disclosed by the disclosing Party.
16.4 Obligation of Confidentiality. In order to protect the
Protected Information received by it relating to the other
Party (or their respective Affiliates ) each Party must (i)
exercise at a minimum the same care it would exercise to
protect its own information (ii) only use the Protected
Information for the purposes contemplated by this Agreement,
and (iii) not use, disclose, reproduce, distribute, or
otherwise disseminate such Protected Information, to any
person other than in the case of Logistics Group, any third
parties engaged by Logistics Group to provide Services or a
portion of the Services, with such disclosure being limited to
the extent required for such Parties to provide such Services,
except with the prior written approval of the other Party. Any
and all reproductions of Protected Information must
prominently contain a confidentiality legend.
16.5 Compelled Disclosure. The obligations contained in this
Section 16 shall not apply to any Protected Information, where
either Party, or any person to whom it has transmitted
Protected Information, becomes legally required to disclose
any of the Protected Information received but the legally
compelled Party shall provide the other Party with prompt
written notice of that requirement so that the other Party may
seek a protective order or other appropriate remedy but shall
not be obligated to delay disclosure. The Party legally
required to disclose Protected Information, shall only
disclose that portion of the Protected Information which, in
the written opinion of its legal counsel, is required to
disclose.
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16.6 Disclosure to Representatives. Each Party also agrees that it
shall only disclose the Protected Information to its officers,
directors, employees, agents and/or independent contractors
("Representatives") on a need-to-know basis and, in the case
of independent contractors or other third parties, only after
such third parties have agreed to be bound by obligations of
confidentiality substantially similar to those set forth in
this Section 16.
16.7 Other Limited Disclosure. If a Party wishes to disclose
Protected Information to a bona fide prospective purchaser of
its business, or any part of its business which supplies or
receives Services, it may disclose relevant Protected
Information to the financing sources and/or the professional
advisers of such prospective purchaser provided that, prior to
any such disclosure, the potential purchaser, as well as its
financing sources and professional advisors, agree to be bound
by obligations of confidentiality substantially similar to
those set forth in this Section 16 with such disclosures to be
made only on a need-to-know basis for purposes of evaluating
the transaction.
16.8 Rights and Remedies.
16.8.1 If either Party should breach or threaten to breach
any of the provisions of this Section 16, the
non-breaching Party, in addition to any other
remedies it may have at law or in equity, will be
entitled to a restraining order, injunction, or other
similar remedy in order to specifically enforce the
provisions of this Section 16. Each Party
specifically acknowledges that money damages alone
would be an inadequate remedy for the injuries and
damage that would be suffered and incurred by the
non-breaching Party as a result of a breach of any of
the provisions of this Section 16. In the event that
either Party should seek an injunction hereunder, the
other Party hereby waives any requirement for the
submission of proof of the economic value of any
Protected Information or the posting of a bond or any
other security. In the event of a dispute between the
Parties with respect to a breach of Section 16, the
non-prevailing Party shall pay all costs and
expenses, including, but not limited to, reasonable
attorneys' fees, associated with resolving the
dispute.
16.8.2 The receiving Party shall notify the disclosing Party
immediately upon discovery of any unauthorized use or
disclosure of Protected Information, or any other
breach of Section 16 by the receiving Party or any
Representative of the receiving Party, and will
cooperate with the disclosing Party in every
reasonable way to help the disclosing Party regain
possession of its Protected Information and prevent
its further unauthorized use or disclosure. The
receiving Party shall be responsible for the acts of
any Representative that are in violation of this
Section 16.
16.9 Use of Residual Information. Notwithstanding anything herein
to the contrary, either Party may disclose, publish,
disseminate, and use Residual Information (as defined below)
learned from the other Party without limitation or restriction
of any type; provided, however, that neither Party shall
disclose, publish, or disseminate (i) the source of Residual
Information, (ii) any financial, statistical or personnel
data, or (iii) the business plans of the other Party. Neither
Party shall have an obligation to limit or restrict the
assignment of their Representatives who have had access to the
other Parties Protected Information or to pay royalties for
any work resulting from the use of Residual Information.
However, the foregoing shall not be deemed to grant to either
Party a license under the other parties intellectual property.
For purposes of this Section, "Residual Information" means
Protected Information in intangible form, including ideas,
concepts, know-how and techniques, retained in the memory of
Representatives of the receiving Party who have had access to
such information in accordance with the terms of this
Agreement.
16.10 No Grant of Rights. All Protected Information is and shall
remain property of the disclosing Party. By disclosing
Protected Information to the receiving Party, the disclosing
Party does not grant any express or implied rights or license
to the receiving Party to or under any patents, patent
applications, inventions, copyrights, trademarks, trade secret
information, or other intellectual
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property rights heretofore or hereafter possessed by the
disclosing Party.
16.11 No Warranties. NO WARRANTIES ARE MADE BY EITHER PARTY WITH
RESPECT TO THE PROTECTED INFORMATION. ALL PROTECTED
INFORMATION DISCLOSED HEREUNDER IS PROVIDED "AS IS." THE
DISCLOSING PARTY ACCEPTS NO RESPONSIBILITY FOR ANY EXPENSES,
LOSSES OR ACTIONS INCURRED OR UNDERTAKEN BY THE RECEIVING
PARTY AS A RESULT OF ITS USE OF SUCH CONFIDENTIAL INFORMATION.
16.12 Post-Termination Obligations. Following the termination of the
Agreement, the receiving Party must, within ten (10) business
days following receipt of a written request from the
disclosing Party, deliver to the Disclosing Party all tangible
materials containing or embodying the Disclosing Party's
Protected Information or, at the disclosing Party's option,
certify that all such materials in the receiving Party's
possession have been destroyed.
16.13 Survival of Confidentiality Restrictions. The covenants of
confidentiality set forth in this Section 16 will (i) apply
after the Effective Date to all Protected Information
disclosed to the receiving Party before and after the
Effective Date, and (ii) continue and must be maintained from
the Effective Date through the termination of the Agreement
and (a) with respect to Trade Secrets, at any and all times
after the termination of the Agreement during which such Trade
Secrets retains their status as a "trade secret" under
applicable law; and (b) with respect to Confidential
Information, for the shorter of a period equal to three (3)
years after termination of the Agreement, or until such
Confidential Information no longer qualifies as confidential
under applicable law.
17.0 INDEPENDENT CONTRACTOR. Logistics Group shall act as an independent
contractor under this Agreement. It shall perform its obligations under
this Agreement using its own employees or agents. It shall decide on
the manner and means of accomplishing those obligations and shall
direct, control and supervise its employees. It shall comply with all
payroll tax, withholding, social security, unemployment and related
employer obligations applicable to it. Logistics Group shall not hold
itself out as an agent of or in a joint venture with Customer, and
Logistics Group shall have no authority to act on behalf of Customer
except to the extent necessary to accomplish its obligations under this
Agreement.
18.0 DISPUTE RESOLUTION.
18.1 The parties shall use reasonable efforts to resolve any
dispute, claim, or question relating to this Agreement or the
breach thereof. To this effect, the parties shall consult and
negotiate with each other in good faith and, recognizing their
mutual interests, attempt to reach a fair and equitable
resolution satisfactory to both parties.
18.2 If one party gives written notice to the other of any such
dispute relating to this Agreement or the breach hereof, then
the Project or Operations Managers from each party shall meet
no later than five (5) days after the date of such notice is
given and shall negotiate in good faith and use their best
efforts to reach, within ten (10) days after date of
commencement of such meeting, a mutually agreeable resolution
of the dispute or breach pursuant to the terms and conditions
of this Agreement.
18.3 If such meetings do not resolve the dispute or breach to the
satisfaction of both parties within the initial 10-day period
provided above, then the dispute shall be referred to the
Joint Logistics Committee at its next meeting. The Joint
Logistics Committee shall meet at least once in person (or its
members shall all at least make themselves reasonably
available for such a meeting) within ten (10) days after the
expiration of such initial 10-day period or as otherwise
mutually agreed, and shall negotiate in good faith and use
their best efforts to resolve the dispute or breach.
18.4 Except for claims resulting from alleged breaches of the
confidentiality obligations hereunder or the infringement of
patents or trademarks, any controversy or claim arising out of
or relating to
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this Agreement, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration
Association, at a mutually agreed upon location, in accordance
with its then applicable commercial arbitration rules or as
otherwise mutually agreed. Both parties shall be bound by the
arbitration decision, and judgment on such decision may be
entered in any federal or state court of competent
jurisdiction.
19.0 DEFAULT. If either party shall fail to perform the obligations imposed
upon it by this Agreement, the other party shall give the defaulting
party written notice, stating specifically the cause for which the
notice of default is given. If, within a period of thirty (30) days
after such notice with respect to non-monetary obligations and fifteen
(15) days after such notice with respect to monetary obligations, the
defaulting party does not with diligence remove and remedy the default,
then the party not in default may terminate this Agreement immediately
by written notice. During any period when a default has occurred and is
continuing, the non-defaulting party may, but shall not be obligated
to, take such steps as it reasonably deems necessary to mitigate the
damages caused by such default. The right of termination by the
non-defaulting party shall be in addition to all of its other rights
and remedies available at law and in equity.
20.0 NOTICE OF LOSS OR DAMAGE TO GOODS.
20.1 Customer must give Logistics Group written notice of a claim
for any loss or damage to Goods. Such claim must be made
within thirty (30) days after Customer is given written notice
by Logistics Group that loss or damage to the Goods has
occurred or Customer otherwise becomes aware that Goods have
been damaged, whichever is sooner, setting out a description
of the Goods, Customer's replacement costs, and any other
information that Logistics Group may reasonably request.
20.2 Logistics Group will pay, decline, or make a firm compromise
settlement offer in writing to Customer within thirty (30)
days after receipt of the claim.
20.3 Logistics Group shall be entitled to request, and if so
requested, Customer shall give to Logistics Group, proof of
the cost of the Goods that are the subject of any claim.
21.0 TAXES. Customer agrees to pay and indemnify and hold Logistics Group
harmless from and against all sales, personal property, gross receipts,
excise, franchise, and business taxes imposed by any foreign, federal,
state or local government or taxing authority with respect to the
services performed by Logistics Group under this Agreement, except to
the extent of any taxes based on the net income of Logistics Group
arising out of any transaction under this Agreement. Tax liability
shall include penalties, fines or interest thereon unless such
penalties, fines or interest are incurred as a result of Logistics
Group's failure to properly and timely comply with any tax or other
similar law applicable to Logistics Group through no fault of Customer.
This Section 22 does not apply to fuel taxes and third structure taxes
for which Logistics Group is responsible in accordance with Exhibit B,
Dedicated Services.
22.0 ASSIGNMENT.
22.1 The rights and obligations of the parties under this Agreement
may not be transferred or assigned to a third party or heirs
by either party without the prior written consent of the other
party. However, Logistics Group may transfer all or part of
its rights and/or obligations under this Agreement to one or
more of it affiliates upon prior written notice to Customer,
and such transfer will become effective immediately, unless
legitimate written objections are made by Customer within five
(5) business days of notification.
22.2 Any subcontracting of the Services by Logistics Group shall
not be deemed as an assignment.
23.0 NOTICES. Any notice required or permitted to be given hereunder shall,
except where specifically provided otherwise, be given in writing to
the person listed below by personal delivery, UPS Next Day Air(R) or
other reputable overnight courier service, or UPS(R) Document
Exchange(SM) service, such as UPS
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Online(R) Courier(SM) or a successor service ("UPS(R) Document
Exchange(SM)"). The date of such notice shall be deemed as follows: the
date upon which such notice is so personally delivered; if by UPS Next
Day Air(R) or other courier service, the date of receipt at the
designated address; or if by UPS(R) Document Exchange(SM), the date of
delivery, irrespective of the date appearing thereon:
To Logistics Group:
Susan L. Sullivan
Contracts Manager
990 Hammond Drive, Suite 400
Atlanta, GA 30328
Phone: 770/206-4208
Fax: 770/206-4444
Email: slsullivan@upslogistics.com
To Customer:
William B. Orellana
Director, Corporate Transportation
Tractor Supply Company
320 Plus Park Blvd.
Nashville, Tennessee 37217
Phone: 615/366-4617
Fax: 615/324-4101
Email: borellana@tractorsupply.com
24.0 SOLICITATION OF PERSONNEL. During the term of this Agreement and for a
period of two (2) years after the expiration or termination thereof,
neither party to this Agreement (including the affiliates, successors
and assigns of each party) shall Actively Solicit the employment of any
employee of the other party, which employee was engaged in the
performance of this Agreement. For purposes of this Agreement,
"Actively Solicit" means to initially call or to initiate contact in
any other manner with an employee of the other party for the purpose of
inducing such employee to leave his or her present position, but such
term shall not include as wrongful any contact with, interview or
hiring of those employees who (a) have answered standard
advertisements, (b) have already resigned their positions without
inducement by the other party, or (c) initiate the contact with the
other party regarding employment with that party.
25.0 HAZARDOUS SUBSTANCES.
25.1 For purposes of this agreement, "Hazardous Substances" shall
mean any hazardous substance, material, pollutant,
contaminant, petroleum, used oil or used antifreeze, or any
fraction thereof which may be incidentally contained in the
Goods, as such terms are defined under applicable federal,
state, or local statutes, regulations, or ordinances.
25.2 Logistics Group reserves the right to refuse Hazardous
Substances for transportation if, in its reasonable
determination, it cannot safely transport such Hazardous
Substances in accordance with all applicable federal and state
laws and regulations. If Logistics Group accepts for
transportation Hazardous Substances, including but not limited
to hazardous materials as defined by the U.S. DOT, such
Hazardous Substances must be accompanied by a full written
declaration of their nature and contents, and be properly and
safely packed as directed by Customer in accordance with all
federal and state laws and regulations. Customer warrants that
the Hazardous Substances will be fit and safe to be carried in
the condition in which they are tendered for transportation.
25.3 Logistics Group reserves the right to take whatever action it
reasonably deems necessary, at Customer's expense, in the
absence of prior written notice from Customer, if it
reasonably suspects that any of Customer's Hazardous
Substances may become a danger to any other goods handled by
Logistics Group or freight in transit, or to be moved in
transit, or may become a danger to
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Logistics Group's equipment, property, its employees, servants
or agents. Logistics Group agrees that it will use all
reasonable efforts to notify Customer's designated hazardous
materials compliance officer before taking any such action and
to coordinate its actions with all reasonable directions and
requests of such officer.
25.4 Customer does not expect, and this Agreement does not
contemplate, that Logistics Group will arrange for the pick-up
or transportation of any hazardous waste as defined in the
Resource Conservation and Recovery Act ("RCRA") or any other
federal, state or local laws or regulations governing the
transportation of hazardous waste.
25.5 All title, risk of loss, and other incidents of ownership to
the Hazardous Substances, in relation to the services
performed in accordance with this Agreement, shall at all
times be vested in Customer.
25.6 Customer assumes full responsibility for and shall indemnify,
defend, and hold harmless Logistics Group, its carriers, and
the directors, officers, employees and agents, and all persons
acting on behalf of each of those companies, from and against
any and all losses, claims, obligations, liens, encumbrances,
liabilities, penalties, causes of action, damages, costs,
attorney fees, and expenses ("Losses") in connection with
Logistics Group's handling of Hazardous Substances in
accordance with this Agreement, including, without limitation,
injury, disease or death of persons and/or damage to or
destruction of any property or contamination of or adverse
effect on humans, animals, aquatic life, or the environment,
including (a) any contamination, damage or destruction to
Logistics Group's facilities, caused by or connected with any
Hazardous Substances generated from the Goods; (b) any act or
omission of Customer relative to the management of said
Hazardous Substances; and (c) any breach by Customer of any of
the terms and provisions of this Section; provided, however,
that the foregoing obligation of Customer shall not apply to
the extent such Losses are due to or arise from the negligent
act(s) or omission(s) to act or intentional misconduct of
Logistics Group, its carriers, including but not limited to
United Parcel Service, Inc., and the directors, officers,
employees and agents and all persons acting on behalf of those
companies ("Logistics Group Affiliates").
26.0 INTELLECTUAL PROPERTY RIGHTS.
26.1 Logistics Systems. Logistics Group may deem it necessary, in
the course of performing the Services, to use certain
information systems, such as, but not limited to, Logistics
Group's proprietary software and computer systems (such
information systems being the "Logistics Systems"). For the
duration of this Agreement Logistics Group hereby grants to
the Customer non-exclusive, royalty free, worldwide license to
use the Logistics Systems. Customer agrees it will not sell,
copy in whole or in part, except for an archival copy or
copies made in the course of automatic backups, modify,
reverse engineer, decompile or dissemble the Logistics
Systems. Customer shall restrict access by Customer's
employees and agents to the Logistics Systems such that only
those employees and agents who are authorized by Logistics
Group to use the Logistics Systems are granted access thereto.
Logistics Systems are owned by Logistics Group or its
suppliers who shall at all times retain all rights, title and
interest therein. Upon the effective date of termination of
this Agreement, Customer's license to use the Logistics
Systems shall automatically terminate unless such license is
expressly extended by Logistics Group. Customer shall certify
in writing to Logistics Group that no other copies of the
Logistics Systems, or any portion thereof, remain in
Customer's possession.
26.2 Intellectual Property Rights of Logistics Group. Nothing in
this Agreement shall be construed as granting to Customer any
rights to the Logistics Systems except the license rights
granted in Section 26.1 above or otherwise pursuant to this
Agreement.
26.3 Work Product.
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26.3.1 Logistics Group acknowledges and agrees that work
product that Logistics Group creates as a result of
this Agreement or in performing the Services under
this Agreement to the extent such work product is
specifically commissioned and paid for by Customer or
otherwise incorporates Customer's Protected
Information (the "Customer Work Product") shall be
"work made for hire" within the meaning of the United
States Copyright Act and as such shall be and remain
the exclusive property of Customer. Without limiting
the foregoing, to the maximum extent permitted by
applicable law, all data, information and reports
(and all rights therein and thereto, including
copyrights), whether produced by or as a result of
the performance of Logistics Group of its
obligations, to the extent they contain information
provided by Customer to Logistics Group regarding
Customer's (i) purchase, transportation, handling,
storage, sale or other disposition of Goods, (ii)
management practices and policies, or (iii) financial
position or results, shall be the exclusive property
of Customer. Upon termination of this Agreement for
any reason, Logistics Group agrees to turn over all
Customer Work Product then in its possession or
control to Customer.
26.3.2 Customer acknowledges and agrees that Logistics Group
shall own all other work product that Logistics Group
creates as a result of this Agreement or in
performing the Services under this Agreement. Without
limiting the foregoing, to the maximum extent
permitted by applicable law, the Logistics Systems,
and all specifications, programs, source code, object
code, algorithms, documentation, diagrams and flow
charts and any other tangible or intangible machine
readable or human readable materials of any type
whatsoever (and all rights therein and thereto,
including copyrights), whether produced by or as a
result of the performance of Logistics Group of its
obligations, which are incorporated in or related to
the Logistics Systems, or development thereof, shall
be the exclusive property of Logistics Group,
excluding only the Customer Work Product. As of the
moment of creation of such Logistics Systems, or any
phase of the development thereof, Logistics Group
shall have the sole right, title and interest of any
kind, nature or description in and to such Logistics
Systems, including copyrights. Except for the license
right granted in Section 27.1, no rights of any kind
to the Logistics Systems, including but not limited
to use, license or ownership rights, are conveyed to
Customer by Logistics Group. Customer shall not copy,
sell, publish, disclose, display, reverse engineer,
use for its own purposes or make available to any
third party any of content of the Logistics Systems
in whatever form or reproduction, without the prior
written consent of Logistics Group.
26.4 Individual Property. All other data, specifications, computer
programs, documentation and other materials that are (i)
developed or provided by either Party, (ii) not described in
Sections 26.1, 26.2, or 26.3 above and (iii) utilized in
performing this Agreement ("Individual Property") shall be and
remain the property of the developing or providing Party and
may not be sold, transferred, disseminated, or conveyed by the
other Party to any other entity or used other than in the
performance of this Agreement (or any resulting agreement)
without the express written permission of the
developing/providing Party. Unless otherwise agreed between
the Parties, all such Individual Property shall be returned to
the developing/providing Party by the other Party promptly
upon termination of this Agreement, or as soon thereafter as
practicable.
26.5 This Section shall survive termination or expiration of this
Agreement.
27.0 CURRENCY FLUCTUATION.
27.1 Logistics Group will bill all service fees ("Service Fees")
under this Agreement in U.S. dollars.
27.2 The currency exchange rate ("Billing Exchange Rate") will be
determined by reference to The Wall Street Journal on the last
business day of each month. Logistics Group will apply the
Billing
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Exchange Rate to the foreign currency fee schedule to
determine the U.S. Dollar invoice amounts of the Service Fees.
Logistics Group will be responsible for administering and
reviewing the currency conversion with Customer having the
right to review all conversions. Logistics Group will include
on each invoice the Billing Exchange Rate used to determine
the conversion.
28.0 LICENSES. Except as may be otherwise provided in this Agreement,
Logistics Group, at its sole cost and expense, shall procure and
maintain all licenses and permits and pay all taxes, including receipts
taxes, required by any local, state, or federal authorities associated
with the Services performed hereunder.
29.0 SHARED SAVINGS PROGRAM: Logistics Group agrees to guarantee to Customer
certain transportation cost savings, as more fully set out in Exhibit B
(Section 6.0) and Exhibit D. In consideration of these guarantees,
Customer agrees to participate in the Shared Savings Program as more
fully set out in Exhibit E.
30.0 ENTIRE AGREEMENT AND AMENDMENTS. This Agreement and any attachment
hereto set forth the full and complete understanding of the parties
with respect to the matters herein, and each supersedes any and all
agreements and representations between the parties made or dated prior
to the Effective Date. This Agreement can only be modified or amended
in writing and signed by each of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives as of the Effective Date.
UPS LOGISTICS GROUP, INC. TRACTOR SUPPLY COMPANY
By: /s/ James P. Thompson By: /s/ Larry Goldberg
--------------------------------------- ------------------------------
Name: James P. Thompson Name: Larry Goldberg
------------------------------------- ---------------------------
Title: Sr. VP & COO Transportation Services Title: Vice President-Logistics
------------------------------------ ---------------------------
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EXHIBIT A
DESCRIPTION OF GOODS
The Goods to be tendered under this Agreement include the following:
Animal and pet products, lawn and garden products, light truck and towing
equipment, general maintenance products and work ware including clothing and
boots.
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EXHIBIT B
TO TRANSPORTATION MANAGEMENT AGREEMENT
*******
DEDICATED SERVICES
1.0 SHIPMENTS
1.1 Subject to the terms and conditions contained in this Exhibit
and the applicable Schedules, Customer agrees to tender to
Logistics Group such Goods as Customer in its sole discretion
may determine for transportation by Logistics Group to points
identified in the applicable Schedules, and Logistics Group
agrees to accept and deliver the Goods promptly and
efficiently at Customer's direction in accordance with the
rates and charges set forth in the applicable Schedules.
Customer shall designate the point of origin and destination
for each shipment and shall stipulate the point or points
where stop-offs, if any, shall be made for partial unloading.
Such designation shall be shown on Customer's bill of lading
to be provided to Logistics Group.
1.2 Each shipment shall be evidenced by a receipt in the form
specified by Customer, signed by both Logistics Group and the
consignee, or as otherwise directed by Customer. The receipt
shall specify the kind and quantity of Goods that Logistics
Group received and delivered at each loading and unloading
point.
2.0 EQUIPMENT
2.1 Logistics Group agrees to provide and keep available during
the term of this Exhibit those vehicles specified in the
applicable Schedule for the transportation of the Goods.
Execution of a Schedule hereto shall constitute Customer's
authorization to Logistics Group to acquire and/or transfer
for use under the applicable Schedule the vehicles listed
therein. Such vehicles shall be collectively referred to in
this Exhibit as the "Equipment." Customer agrees to compensate
Logistics Group for providing and keeping the Equipment
available solely and exclusively for the movement of the Goods
during the term of this Exhibit and pursuant to the applicable
Schedule.
2.2 Should any of the Equipment not be available due to breakdown
or preventive maintenance servicing, Logistics Group will
provide suitable substitute equipment (within four hours after
notification) at no additional cost to Customer.
2.3 Logistics Group shall, during the term of this Exhibit,
maintain the Equipment in good repair, mechanical condition
and appearance, and furnish all tires and other parts required
for the safe and efficient operation and maintenance of the
Equipment. Logistics Group shall pay all expenses, including
the expense of road service and repair, in connection with the
use and operation of the Equipment, unless otherwise specified
in a Schedule.
2.4 Should Logistics Group and Customer determine that Customer
requires Equipment in addition to that set forth in any
Schedule ("Extra Equipment") for Logistics Group's performance
of Services, the Extra Equipment charges shall be as set forth
in an amended Schedule agreed to by Logistics Group and
Customer.
2.5 Customer acknowledges that Logistics Group may make deliveries
on Customer's behalf to locations that are unattended by the
consignee, or which otherwise will not have authorized persons
available to sign the delivery document for the Goods at time
of delivery. Logistics Group shall only be liable for the loss
or damage to any Goods once the Goods have been delivered to
any location as directed by Customer if such loss is the
direct result of Logistics Group's negligence or willful
misconduct.
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2.6 Logistics Group shall follow Customer's reasonable directives
with respect to the appearance of the Equipment, including,
without limitation, by displaying Customer's name and logo on
the Equipment in such manner as Customer may from time to time
reasonably request.
3.0 EARLY TERMINATION. If Customer terminates this Exhibit for any reason
other than a default by Logistics Group, or if Logistics Group
terminates this Exhibit for reason of a default by Customer, any time
after the Effective Date, Customer will be responsible to Logistics
Group for the unexpired portion of the cost of any permits, bonds,
taxes, and unusable licenses associated with the Equipment identified
on Schedule "A", and the cost for removal of any customized lettering
or identification marking from the Equipment. Customer shall have the
option to purchase the Equipment at the actual book value ("Book
Value") established by the lessor or title holder of the Equipment (the
"Lessor"). If Customer does not exercise this option, Logistics Group
agrees to use all reasonable commercial efforts to redeploy the
Equipment in its business. If Logistics group is unable to redeploy the
Equipment, Customer agrees to pay Logistics Group for any "loss" on the
Equipment. For purposes of this Agreement, any such "loss" shall be
equal to the difference in the actual amount received for the sale of
the Equipment by the Lessor and the Book Value of the Equipment, as
determined by the Lessor, at the time the Equipment is sold to a third
party.
4.0 OPERATING PARAMETERS. The following Operating Parameters shall apply to
all Schedules hereto, unless otherwise provided in a Schedule.
4.1 Logistics Group to Provide:
4.1.1 Drivers who meet all legal and regulatory
requirements
4.1.2 All fuel, tractor maintenance, and road services
4.1.4 Benefits, workers' compensation, holiday, vacation
pay and payroll taxes for Logistics Group employees
4.1.5 Cost for third-structure and out-of-balance fuel tax
4.1.6 One full-time National Account Manager (who will be
employed for Dedicated and Transportation Management
Services)
4.1.7 Load securing equipment such as load restraints
4.2 CUSTOMER TO PROVIDE:
4.2.1 Trailers and trailer maintenance
4.2.2 Loading of trailers for outbound
4.2.3 Location to store trailers when not in use
4.2.4 Required documentation for pick-up, transport, and
delivery
4.2.5 Tolls, scale fees and lumper fees (subject to
Customer's prior approval)
4.2.6 Material handling equipment necessary for loading and
unloading at crossdock facilities and Customer's
retail locations
4.2.7 Customer will provide electronic order entry
as necessary
4.2.8 Utilities and maintenance for Customer's
facility
4.2.9 On-site office space for Logistics Group
employees
4.3 OPERATIONAL ASSUMPTIONS
4.3.1 Loads are multiple stops
4.3.2 Freight is palletized and loose
4.3.3 Each stop is allotted a one-hour period
4.3.4 The data provided by Customer was accurate and
representative of its transportation needs at the
time of issuance.
4.3.5 Drivers will operate within the legal limits as
prescribed by state and federal agencies
4.3.7 Driver and tractor will be available to Customer as
follows:
- Truck is available to dispatch 24 hours a
day Sunday through Saturday
- System to operate 52 weeks per year
- Delivery windows are 24 hours per day Sunday
through Saturday
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- Drivers will be responsible for unloading
trailers at Customer's retail stores in the
usual and customary manner
- Tractors rates based on a three-year term
5.0 SUPPLEMENTAL CHARGES: In addition to the rates and charges set forth in
the Schedules, Logistics Group shall, and Customer agrees to pay, the
following supplemental charges, when applicable:
5.1 Fuel is included and pegged at ****** per gallon. Any increase
or decrease in fuel charges (including all applicable taxes)
will be billed or credited to Customer. Fuel will be
reconciled on a monthly basis.
5.2 Additional tractors: ****** per tractor for each day in use
5.3 Additional trailers: ****** per day for each trailer obtained
by Logistics Group
5.4 Additional drivers or clerks: ****** per day per driver or
clerk, plus applicable charges as stated in the variable
charges section of the Schedules attached hereto, subject to
Logistics Group availability; if not available, to a mutually
acceptable amount agreed to by the parties.
5.5 Permits, licenses, and heavy vehicle use, excise, and personal
property taxes which exceed ****** in any given year: billed
at cost
6.0 EMPTY MILES GUARANTEE
6.1 Definitions
6.1.1 Empty Miles are defined as the miles on dedicated
routes where no Goods are in transit other than
routes that are dedicated to feed deliveries or to
miles associated with feed pick-ups or as directed by
Customer.
6.1.2 Loaded Miles are defined as any miles on Logistics
Group dedicated routes when the truck is loaded with
third-party backhauls, store product, return to
vendor ("RTV"), or store transfers. RTV trips will be
considered Loaded Miles for both the scheduled day
for a store and for any unscheduled RTV that is
requested by Customer or a third party approved by
Customer.
6.2 Guarantee
6.2.1 Logistics Group will guarantee that Customer's annual
Empty Miles will be ****** percent (******) or less
of Customer's total system miles, excluding routes
that are dedicated to feed deliveries and miles
associated with feed pick-ups as directed by
Customer. Logistics Group will waive ****** per mile
(one half of the average variable cost per mile) for
all eligible miles above the ****** guarantee;
provided, however, that Logistics Group will only be
liable for actual Empty Miles as defined in this
Section.
6.2.2 Logistics Group will conduct a quarterly review of
the Empty Miles with Customer and shall reconcile
Empty Miles, for purposes of the Empty Guarantee
described in Section 6.2.1, on the annual anniversary
date of this Agreement.
6.3 Assumptions for Empty Mile Guarantee
6.3.1 Customer will provide to Logistics Group store
delivery volumes by noon one day prior to shipping
date.
6.3.2 Customer will comply with routes provided by
Logistics Group, unless otherwise agreed to in
writing by the parties including but not limited to
hot loads or trips requested to be delivered or
picked up by Customer.
* Subject to a confidential treatment request of Tractor Supply Company
dated August 13, 2001.
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6.3.3 Shipments must be available for dispatch by earliest
preferred dispatch time of all stores on a route.
6.3.4 Trips requested by Customer to be delivered by
Equipment other than recommended by Logistics Group,
or which are outside the parameters of the Operating
Assumptions, will not be included the calculation of
Empty Miles.
6.3.5
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SCHEDULE 1
SYSTEM ASSUMPTION/CHARGES
OMAHA, NEBRASKA
[This Schedule 1 supercedes Schedule A
Schedule of Charges dated November 13, 2000.]
1.0 ASSUMPTIONS
1.1 LOGISTICS GROUP TO PROVIDE
1.1.1 ****** tandem axle conventional sleeper tractors
equipped with HighwayMaster(R) computers
1.1.2 ****** full-time drivers meeting Logistics Group
qualifications
1.1.3 ****** full-time manager, ****** full-time
dispatcher, and ****** full-time clerk to be based at
Customer's facility
1.1.4 One routing software package and software training
1.1.5 Daily dispatch and routing instructions and schedules
1.1.6 Tools of the trade to allow Logistics Group to
perform normal and customary business as mutually
agreed upon.
1.2 OPERATIONAL ASSUMPTIONS
1.2.1 Outbound loads will be truckload ("TL") and Less than
truckload ("LTL")
1.2.2 Drivers will operate in single and team operation
1.2.3 Driver and tractor will be available to Customer as
follows:
- Truck is available to dispatch 24 hours per
day Sunday through Saturday
- System to operate 52 weeks per year
- Delivery windows are 24 hours per day Sunday
through Saturday
- Drivers will be responsible for unloading
trailers at Customer's retail stores
- Tractors rates based on a three-year term
2.0 SCHEDULE OF CHARGES
2.1 FIXED CHARGES (MANAGEMENT, EQUIPMENT, MAINTENANCE, AND
IS-RELATED COSTS): ****** per week.
2.2 VARIABLE CHARGES
2.2.1 OVER THE ROAD (TRIPS IN EXCESS OF ***** ROUND TRIP
MILES)
- Single mileage charge based on PC Miler
Practical: ***** per mile, plus ***** per
stop (includes labor, equipment,
maintenance, and fuel expenses).
- Team Mileage charge based on PC Miler
Practical: ***** per mile, plus ***** per
team stop (includes labor, equipment,
maintenance, and fuel expense).
2.2.2 LOCAL (TRIPS OF LESS THAN 150 ROUND TRIP MILES) -
OMAHA LOCAL
- ***** per mile, plus ***** per hour for
drivers.
- Overtime Charge after 40 hours per driver
per week will be charged at ***** per hour
for drivers.
2.2.3 LOCAL (TRIPS OF LESS THAN 150 ROUND TRIP MILES)
- ***** per mile, plus ***** per hour for
drivers.
- Overtime Charge after 40 hours per driver
per week will be charged at ***** per hour
for drivers.
2.2.4 HOURLY CHARGE
- The fixed charge includes one clerk and 40
hours of labor. If the permanent clerk works
in excess of 40 hours, the rate will be
****** per hour.
- Extra clerks shall be charged at ****** per
hour straight time and ****** per hour
overtime in excess of 40 hours.
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 21
22
2.2.5 SUPPLEMENTAL CHARGES
- Detention (after two hours free time at each delivery and
three hours at each vendor): ****** per each 15 minutes or
****** per hour. Driver will notify dispatcher after one hour
for assistance (when practical).
- Fuel is included and pegged at ****** per gallon.
* Subject to a confidential treatment request of Tractor Supply Company
dated August 13, 2001.
Page 22
23
SCHEDULE 1
EQUIPMENT
TRACTOR SUPPLY COMPANY - OMAHA, NE
EQUIPMENT TO BE DETERMINED AND MUTUALLY AGREED TO IN WRITING.
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 1 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 1 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: /s/ Larry Goldberg By: /s/ James P. Thompson
---------------------------- --------------------------------------
Title: Vice President-Logistics Title: Sr. VP & COO Transportation Services
------------------------- -------------------------------------
Date: May 9, 2001 Date: May 14, 2001
-------------------------- --------------------------------------
Page 23
24
SCHEDULE 1
EQUIPMENT
TRACTOR SUPPLY COMPANY - OMAHA, NE
- ----------------------------------------------------------------------------------------------------------------------
Equipment Date in Contract Year & Model & Original Monthly
Number Service Term Make Type Value Depreciation
- ----------------------------------------------------------------------------------------------------------------------
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 1 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 1 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: By:
-------------------------------- ------------------------------
Name: Name:
-------------------------------- ----------------------------
Title: Title:
-------------------------------- ---------------------------
Date: Date:
-------------------------------- ---------------------------
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 24
25
SCHEDULE 2
SYSTEM ASSUMPTION/CHARGES
PENDLETON, INDIANA
[This Schedule supercedes Appendix A Schedule of Charges dated April 1, 2000.]
1.0 ASSUMPTIONS
1.1 LOGISTICS GROUP TO PROVIDE
1.1.1 ****** tandem axle conventional sleeper tractors
equipped with HighwayMaster(R) computers
1.1.2 ****** full-time drivers meeting Logistics Group
qualifications
1.1.3 ****** full-time manager. ****** full-time
dispatcher, ****** full-time yard switchers, and
****** full-time clerks based at Customer's facility
1.1.4 One routing software package and software training
1.1.5 Daily dispatch and routing instructions and schedules
1.1.6 Tools of the trade to allow Logistics Group to
perform normal and customary business as mutually
agreed upon.
1.2 OPERATIONAL ASSUMPTIONS
1.2.1 Outbound loads will be truckload ("TL") and Less than
truckload ("LTL")
1.2.2 Drivers will operate in single and team operation
1.2.3 Driver and tractor will be available to Customer as
follows:
- Truck is available to dispatch 24 hours per day
Sunday through Saturday
- System to operate 52 weeks per year
- Delivery windows are 24 hours per day Sunday through
Saturday
- Drivers will be responsible for unloading trailers at
Customer's retail stores
- Tractors rates based on a three-year term
2.0 SCHEDULE OF CHARGES
2.1 FIXED CHARGES (MANAGEMENT, EQUIPMENT, MAINTENANCE, AND IS-RELATED
COSTS): ****** per week.
2.2 VARIABLE CHARGE
2.2.1 OVER THE ROAD (TRIPS IN EXCESS OF 150 ROUND TRIP MILES)
- Single mileage charge based on PC Miler Practical:
****** per mile, plus ****** per stop (includes
labor, equipment, maintenance, and fuel expenses).
- Team Mileage charge based on PC Miler Practical:
****** per mile, plus ****** per team stop (includes
labor, equipment, maintenance, and fuel expenses).
- ****** per Purina Stop (includes labor, equipment,
maintenance, and fuel expenses).
2.2.2 LOCAL (TRIPS OF LESS THAN 150 ROUND TRIP MILES)
- ****** per mile, plus ****** per hour for drivers.
- Overtime Charge after 40 hours per driver per week
will be charged at ****** per hour for drivers.
2.2.3 HOURLY CHARGES
- The fixed charge includes two clerks and eighty (80)
hours of labor. If the permanent clerks work in
excess of 80 hours, the rate will be ****** per hour.
Extra clerks shall be charged at ****** per hour
straight time and ****** per hour overtime in excess
of 40 hours.
- The fixed charge includes two switchers and 80 hours
of labor. If the permanent switchers work in excess
of 80 hours, the rate will be ****** per hour. Extra
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 25
26
switchers shall be charged at ****** per hour
straight time and ****** per hour overtime in excess
of 40 hours.
2.2.4 SUPPLEMENTAL CHARGES
- Detention will occur after two hours free
time at each delivery and three hours at
each vendor, and will be charged at ******
per each 15 minutes. Driver will notify
dispatcher after one hour for assistance
(when practical).
- Fuel is included at ****** per gallon.
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 26
27
SCHEDULE 2
EQUIPMENT
TRACTOR SUPPLY COMPANY - PENDLETON, IN
Equipment to be determined and mutually agreed to in writing.
================================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 2 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 2 is dispatched.
================================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: /s/ Larry Goldberg By: /s/ James P. Thompson
--------------------------------- -------------------------------
Title: Vice President-Logistics Title: Sr. VP & COO
------------------------------ Transportation Services
----------------------------
Date: May 9, 2001 Date: May 14, 2001
------------------------------- -----------------------------
Page 27
28
SCHEDULE 2
EQUIPMENT
TRACTOR SUPPLY COMPANY - PENDLETON, IN
- -------------- --------- ---------- ------------------------- ------------------------------ ------------- -------------
Equipment Date in Contract Year & Model & Original Monthly
Number Service Term Make Type Value Depreciation
- -------------- --------- ---------- ------------------------- ------------------------------ ------------- -------------
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 2 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 2 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------ ----------------------------
Date: Date:
------------------------------- -----------------------------
* Subject to a confidential treatment request of Tractor Supply Company
dated August 13, 2001.
Page 28
29
SCHEDULE 3
SYSTEM ASSUMPTION/CHARGES
Rural Hall, North Carolina
[This Schedule supercedes Appendix A Schedule of Charges dated
November 6, 2000.]
1. ASSUMPTIONS
1.0 LOGISTICS GROUP TO PROVIDE
1.1.1 ****** tandem axle conventional sleeper equipped with
HighwayMaster(R) computers
1.1.2 ****** full-time drivers meeting Logistics Group
qualifications
1.1.3 ****** full-time manager and ****** full-time clerk
based at Customer's facility
1.1.4 One routing software package
1.1.5 Daily dispatch and routing instructions and schedules
1.1.6 Tools of the trade to allow Logistics Group to
perform normal and customary business as mutually
agreed upon.
1.2 OPERATIONAL ASSUMPTIONS
1.2.1 Outbound loads will be truckload ("TL") and Less than
truckload ("LTL")
1.2.2 Drivers will operate in single operation
1.2.3 Driver and tractor will be available to Customer as
follows:
- Truck is available to dispatch 24 hours per
day Sunday through Saturday
- System to operate 52 weeks per year
- Delivery windows are 24 hours per day Sunday
through Saturday
- Drivers will be responsible for unloading
trailers at Customer's retail stores
- Tractors rates based on a three-year term
2.0 SCHEDULE OF CHARGES
2.1 FIXED CHARGES (MANAGEMENT, EQUIPMENT, MAINTENANCE, AND
IS-RELATED COSTS): ****** per week.
2.2 VARIABLE CHARGES
2.2.1 OVER THE ROAD (TRIPS IN EXCESS OF 150 ROUND TRIP
MILES)
- Single mileage charge based on PC Miler
Practical: ****** per mile, plus ****** per
stop (includes labor, equipment,
maintenance, and fuel expenses).
2.2.2 LOCAL (TRIPS OF LESS THAN 150 ROUND TRIP MILES)
- ****** per mile, plus ****** per hour for
drivers.
- Overtime Charge after 40 hours per driver
per week will be charged at ****** per hour
for drivers.
2.2.3 HOURLY CHARGE
- The fixed charge includes one clerk and 40
hours of labor. If the permanent clerk works
in excess of 40 hours, the rate will be
****** per hour. Extra clerks shall be
charged at ****** per hour straight time and
****** per hour overtime in excess of 40
hours.
2.2.4 SUPPLEMENTAL CHARGES
- Detention will occur after two hours free
time at each delivery and three hours at
each vendor, and will be charged at ******
per each 15 minutes, or ****** per hour.
Driver will notify dispatcher after one hour
for assistance (when practical).
- Fuel is included at ****** per gallon.
* Subject to a confidential treatment request of Tractor Supply Company
dated August 13, 2001.
Page 29
30
SCHEDULE 3
EQUIPMENT
TRACTOR SUPPLY COMPANY - RURAL HALL, NC
Equipment to be determined and mutually agreed to in writing.
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 3 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 3 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: /s/ Larry Goldberg By: /s/ James P. Thompson
----------------------------- ---------------------------------------
Title: Vice President-Logistics Title: Sr. VP & COO Transportation Services
-------------------------- ------------------------------------
Date: May 9, 2001 Date: May 14, 2001
--------------------------- -------------------------------------
Page 30
31
SCHEDULE 3
EQUIPMENT
TRACTOR SUPPLY COMPANY - RURAL HALL, NC
- ---------------------------------------------------------------------------------------------------------------------------
Equipment Date in Contract Year & Model & Original Monthly
Number Service Term Make Type Value Depreciation
- ---------------------------------------------------------------------------------------------------------------------------
<s>
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 3 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 3 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: By:
----------------------------------- --------------------------------
Name: Name:
--------------------------------- ------------------------------
Title: Title:
-------------------------------- -----------------------------
Date: Date:
--------------------------------- ------------------------------
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 31
32
SCHEDULE 4
SYSTEM ASSUMPTION/CHARGES
WACO, TEXAS
This Schedule supercedes Appendix A Schedule of Charges dated November 13,
2000.
1.0 ASSUMPTIONS
1.1 LOGISTICS GROUP TO PROVIDE
1.1.1 ****** tandem axle conventional sleeper tractors
equipped with HighwayMaster(R) computers
1.1.2 ****** full-time drivers meeting Logistics Group
qualifications
1.1.3 ****** full-time manager, ****** full-time yard
switcher, and ****** full-time clerk based at
Customer's facility
1.1.4 One routing software package and software training
1.1.5 Daily dispatch and routing instructions and
schedules
1.1.6 Tools of the trade to allow Logistics Group to
perform normal and customary business as mutually
agreed upon.
1.2 OPERATIONAL ASSUMPTIONS
1.2.1 Outbound loads will be truckload ("TL") and Less
than truckload ("LTL")
1.2.2 Drivers will operate in single operation
1.2.3 Driver and tractor will be available to Customer as
follows:
- Truck is available to dispatch 24 hours per
day Sunday through Saturday
- System to operate 52 weeks per year
- Delivery windows are 24 hours per day
Sunday through Saturday
- Drivers will be responsible for unloading
trailers at Customer's retail stores
- Tractors rates based on a three-year term
2.0 SCHEDULE OF CHARGES
2.1 FIXED CHARGES (MANAGEMENT, EQUIPMENT, MAINTENANCE, AND
IS-RELATED COSTS): ****** per week.
2.2 VARIABLE CHARGE
2.2.1 OVER THE ROAD (TRIPS IN EXCESS OF 150 ROUND TRIP
MILES)
- Single mileage charge based on PC Miler
Practical: ****** per mile, plus ****** per
stop (includes labor, equipment,
maintenance, and fuel expenses).
2.2.2 LOCAL (TRIPS OF LESS THAN 150 ROUND TRIP MILES)
- ****** per mile, plus ****** per hour for
drivers.
- Overtime Charge after forty (40) hours per
driver per week will be charged at ******
per hour for drivers.
2.2.3 HOURLY CHARGE
- The fixed charge includes one clerk and 40
hours of labor. If the permanent clerk
works in excess of 40 hours, the rate will
be ****** per hour. Extra clerks shall be
charged at ****** per hour straight time
and ****** per hour overtime in excess of
forty (40) hours.
- The fixed charge includes one switcher and
(40) forty hours of labor. When the
permanent switcher works in excess of forty
(40) hours, the rate will be ****** per
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 32
33
hour. Extra switchers shall be charged at
****** per hour straight time and ******
per hour overtime in excess of forty (40)
hours.
2.2.4 SUPPLEMENTAL CHARGES
- Detention will occur after two hours free
time at each delivery and three hours at
each vendor, and will be charged at ******
per each 15 minutes, or ****** per hour.
Driver will notify dispatcher after one
hour for assistance (when practical).
- Fuel is included at ****** per gallon.
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 33
34
SCHEDULE 4
EQUIPMENT
TRACTOR SUPPLY COMPANY - WACO, TX
Equipment to be determined and mutually agreed to in writing.
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 4 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 4 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: /s/ Larry Goldberg By: /s/ James P. Thompson
---------------------------- ----------------------------------------
Title: Vice President-Logistics Title: Sr. VP & COO Transportation Services
------------------------- -------------------------------------
Date: May 9, 2001 Date: May 14, 2001
-------------------------- --------------------------------------
Page 34
35
SCHEDULE 4
EQUIPMENT
TRACTOR SUPPLY COMPANY - WACO, TX
- ---------------------------------------------------------------------------------------------------------------------------
Equipment Date in Contract Year & Model & Original Monthly
Number Service Term Make Type Value Depreciation
- ---------------------------------------------------------------------------------------------------------------------------
<s>
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
36 1998 Freightliner FLC12064ST TAC 70" Rsd Roof ****** ******
Century
===============================================================================
This Schedule shall commence on the date the first Equipment listed on this
Schedule 4 is placed into service and shall continue thereafter for a period of
36 months from the date the last equipment on this Schedule 4 is dispatched.
===============================================================================
TRACTOR SUPPLY COMPANY UPS LOGISTICS GROUP, INC.
By: By:
----------------------------------- --------------------------------
Name: Name:
--------------------------------- ------------------------------
Title: Title:
-------------------------------- -----------------------------
Date: Date:
--------------------------------- ------------------------------
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 35
36
EXHIBIT C
TO TRANSPORTATION MANAGEMENT AGREEMENT
*******
TRANSPORTATION MANAGEMENT SERVICES
1.0 Duties of Logistics Group
1.1 Carrier Network. Logistics Group shall develop and make
available to Customer a network of carriers for less than
truckload (LTL), truckload (TL), and such other carriers as
are necessary to move Customer's Goods in accordance with the
requirements of this Agreement. In the event Customer
requires LTL and TL carriers for lanes not included in
Logistics Group's network as of the Effective Date of this
Agreement, Logistics Group will supplement its network
("Additional Lanes") as follows:
1.1.1 Additional Lanes for TL shipments: Logistics Group
will obtain bid rates from no less than five core
(network) carriers, and will select the carrier(s)
that, in Logistics Group's discretion, best meet
Customer's transportation and financial
requirements.
1.1.2 Additional Lanes for LTL shipments: Logistics Group
will use the discount rate provided by the carrier
in use by Logistics Group operating for Customer in
the same region of the country as the respective
Additional Lane and which best meets Customer's
operational and financial requirements.
1.2 Management Reports. Logistics Group shall provide to Customer
within seven business days after the end of each month, or as
otherwise mutually agreed to in writing, transportation
management reports, in a mutually agreed upon format,
summarizing to the reasonable satisfaction of Customer, the
activities, costs, and Services performed hereunder during
that month.
1.3 Declared Values. Logistics Group will ship all Goods with
carriers at a declared value equal to Customer's replacement
cost without markup.
1.4 Carrier Payment. Logistics Group will provide to Customer a
weekly invoice with consolidated billing for all carriers.
1.4 Carrier Claims. Logistics Group will act on behalf of
Customer in the filing and processing of carrier claims
subject to the remainder of this Section.
1.4.1 Logistics Group will file, track and receive payment
of all claims, and will instruct the carriers to pay
the claim in the name of Customer.
1.4.2 Logistics Group shall send all claim checks on a
weekly basis by UPS Next Day Air(R) for receipt by
Customer on each Monday.
1.4.3 Logistics Group agrees to be vigilant in managing
claims but will not litigate an unpaid claim on
behalf of Customer unless Customer agrees to pay all
Logistics Group's costs associated with the
litigation at cost; Costs may include but are not
limited to outside attorney's fees. Otherwise,
Customer shall be responsible for litigating unpaid
claims.
1.7 Governing publications. This Exhibit is subject to the terms,
rules and regulations of the following publications, as
applicable, unless otherwise specifically described herein:
- National Motor Freight Classification ("NMFC") - 100
W series or reissues thereof
- U.S. Postal Service Zip Code Directory
- P.C. Miler Distances in effect at date of shipment
Page 36
37
2.0 RATES AND CHARGES:
2.1 Fixed Charges: ****** per week, which includes:
2.1.1 Nashville Transportation Management Staff: ******
per week (for one Traffic Manager, and four
Logistics Operations Specialists)
2.1.2 Implementation and Licensing Fees amortized over
three-year term: ****** per week.
2.2 Variable Charges:
2.2.1 Optimization Fee: ****** per shipment for each
shipment received from Customer, which is processed
through the Optimizer (the module within the TMS
that determines the most cost-effective and
efficient transportation service)
2.2.2 Freight pay and audit fees (applied to all
shipments):
- Invoice received electronically: ****** per
invoice
- Invoice received manually: ****** per
invoice
2.2.3 Additional Clerical: ****** per hour per clerk, and
****** per hour for overtime hours (hours over 40
hours per week), plus ****** per day. Additional
Clerical can be obtained upon prior approval of
Customer.
2.2.4 Systems Integration: billed as incurred, but not to
exceed ****** based on the Operating Parameters.
2.2.5 Carrier Charges (including assessorials and
surcharges): at cost (with no markup)
2.2.6 Freight Pay / Audit Surcharge: ****** for each
carrier invoice received from carriers that are not
included in the Logistics Group core carrier program
and without prior written approval from Logistics
Group.
2.2.7 Carrier claims processing: administrative cost plus
****** (when processed by Logistics Group staff not
based in Nashville TN).
3.0 EARLY TERMINATION COSTS
If Customer terminates this Exhibit for any reason other than a
default by Logistics Group, or if Logistics Group terminates this
Exhibit for reason of default by Customer, the Fixed Charges for the
remaining months of the unexpired term of the Agreement, as set forth
below:
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
Page 37
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4.0 OPERATING PARAMETERS
4.1. Customer will receive staffing on all business days that the
Customer's Store Support Center is open. Customer currently
recognizes the following 6 paid holidays:
Memorial Day Christmas Day
Independence Day Labor Day
New Year's Day Thanksgiving
4.2 Customer will provide office space for Logistics Group
Transportation Management staff in Nashville TN.
4.3 Normal operating hours for Nashville will be from 7:00 A.M.
to 6:00 P.M. Central Time Monday through Friday; after hour
and emergency coverage available as necessary.
4.4 Freight audit and payment of all carrier invoices will be
processed at the Logistics Group operations center located in
Atlanta GA.
4.5 Customer bills of lading will reference 3rd party bill to
address as UPS Logistics Group.
4.6 Logistics Group will instruct all carriers to submit freight
invoices to Logistics Group's Atlanta GA location.
4.7 Systems Integration:
4.7.1 The existing T1 lines in place between Customer and
Logistics Group, as of the Effective Date of this
Agreement, will be used for the Services consistent
with the requirements set forth herein. Any
additional T1 lines required by Customer shall be at
Customer's sole cost.
4.7.2 Logistics Group will implement its proprietary
Transportation Management System ("TMS") in
connection with the Services.
4.7.3 Customer's SAP(R) system will provide the necessary
information in a flat file or EDI format that will
allow input into the TMS. Logistics Group must
receive and validate flat file before implementation
can begin.
4.7.4 Batch transmissions from Customer to Logistics Group
systems will take place once per day.
4.7.5 The TMS will not be updating Customer's SAP(R)
system.
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
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4.8 Customer will contact the onsite Logistics Group staff in
Nashville for all customer service and track and trace
requests.
4.9* Customer's product is seasonal, with peak shipping in the
spring months.
4.10 Customer will notify its existing carriers of termination of
services, prior to the implementation of Services hereunder.
4.11* LTL shipment volume: ****** of all shipments and ****** of
total weight
4.12* TL shipment volume: ****** of all shipments and ****** of
total weight.
- - Denotes Operating Parameters that are subject to change pending
completion of the 2001 Analysis (as defined hereinafter).
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
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EXHIBIT D
TRANSPORTATION MANAGEMENT AGREEMENT
********
TRANSPORTATION MANAGEMENT GUARANTEE
1.0 Guaranteed Savings
1.1 The Transportation Management Guaranteed Savings ("Guaranteed
Savings") is defined as the amount of savings and/or revenue
that Logistics Group represents it will provide to Customer,
based on the following factors:
1.1.1 Logistics Group Carrier Rate savings
1.1.2 Outsourced transportation Optimization savings
1.1.3 Third-Party backhaul revenue (from Dedicated
Services)
1.2 Undefined terms in this Exhibit D shall have their respective
meaning as defined elsewhere in this Agreement, including but
not limited to Exhibit E.
2.0 Determination of Guaranteed Savings Amount:
2.1 Monthly shipment and tonnage distribution for 2000 (based on
a "Shipton" factor, which is the number of shipments in each
month multiplied by the number of tons shipped in each
month). Year 2000 will be used as the baseline for all
Guaranteed Savings and Shared Savings calculations for the
duration of this Agreement.
------------------ ------------------------ -------------------------
MONTH SHIPTONS % OF ANNUAL TOTAL
------------------ ------------------------ -------------------------
January ****** ******
------------------ ------------------------ -------------------------
February ****** ******
------------------ ------------------------ -------------------------
March ****** ******
------------------ ------------------------ -------------------------
April ****** ******
------------------ ------------------------ -------------------------
May ****** ******
------------------ ------------------------ -------------------------
June ****** ******
------------------ ------------------------ -------------------------
July ****** ******
------------------ ------------------------ -------------------------
August ****** ******
------------------ ------------------------ -------------------------
September ****** ******
------------------ ------------------------ -------------------------
October ****** ******
------------------ ------------------------ -------------------------
November ****** ******
------------------ ------------------------ -------------------------
December ****** ******
------------------ ------------------------ -------------------------
TOTAL ****** ******
------------------ ------------------------ -------------------------
Table 1
Note (1): Table 1 indicates that ****** of the annual volume
occurred in months July-December; therefore,
assuming that TMS is fully operational on or before
July 1, 2000, the Guaranteed Savings for 2001 would
be ****** x ****** = ******.
Note (2): Table 1 is based on data provided to Logistics
Group by Customer as of February 22, 2001, and does
not include all December 2000 shipments. Data in
Table 1 will be updated at such time that Customer
has provided to Logistics Group the complete
shipment data for December 2000, and this Table 1
will be amended accordingly.
2.2 Based on the Shipton information above, the annual
transportation costs that Customer represents to Logistics
Group it incurred prior to this Agreement, and the costs that
Logistics Group projects Customer will incur for the Services
hereunder, Logistics Group guarantees Customer an annual
savings of ******, subject to the remainder of this Exhibit
D.
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
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3.0 Adjustments in the Guaranteed Savings
3.1 If the number of annual Shiptons declines when compared to
the 2000 Total shown in Table 1, Logistics Group will
quantify and make any adjustments to the Guaranteed Savings
based upon a mutually agreed percentage.
3.2 If at any time the then-current Carrier Rate Savings falls
below the Carrier Rate Savings contained in the 2001
Analysis, then any one of the following conditions shall
apply:
3.2.1 If the decrease in the Carrier Rates Savings is the
result of reasons beyond the control of the
Logistics Group, the Carrier Rate Savings in the
2001 Analysis will apply, and Logistics Group will
adjust the Guarantee accordingly.
For illustration purposes only:
Assume that the Carrier Rate Savings of the
2001 Analysis provides a **** percent ******
savings when compared to Customer Rates,
and that during any given period the actual
savings provided by Logistics Group Rates
is ***** percent ******, with a monetary
difference of ******. If this reduction in
savings is the result of factors beyond the
control of the Logistics Group, Logistics
Group will reduce the Guaranteed Savings by
******.
Examples of occurrences that could necessitate the
Guaranteed Savings adjustment in the above
illustration include but are not limited to:
3.2.1.1 An significant increase in the average
class of Customer's LTL shipments above the
****** average that Customer has
represented;
3.2.1.2 A significant change in the percent of TL
versus LTL shipments that are presented to
Logistics Group by Customer; and/or
3.2.1.3 The volume in a given lane is reduced or
transferred to another lane in which the
overall potential savings are reduced.
3.2.2 If any decrease in the Carrier Rate Savings is due
solely to factors within the control of Logistics
Group, the Guarantee will not be modified.
3.2.3 Logistics Group will provide to Customer a quarterly
written report of the Carrier Rate Savings trends
including the reasons for changes, if any, in the
Carrier Rate Savings.
3.3 For Excluded and Non-Compliant Shipments, Logistics Group
will adjust the Guaranteed Savings by multiplying the Overall
Savings percentage by the cost of the Excluded and
Non-Compliant Shipment, as shown in Table 2 below.
For illustration purposes only
------------------------------- ---------------
Cost of ******
Excluded/Non-Compliant
Shipments
------------------------------- ---------------
Actual Annual Savings Based ******
on Compliant Shipments
------------------------------- ---------------
Adjustment to Guaranteed ******
Savings
------------------------------- ---------------
Table 2
Note: Actual Annual Savings based on Compliant Shipments
shall be calculated at the end of each calendar
year. In the event that Excluded and Non-Compliant
shipments are experienced in a any given year, this
amount, calculated for the respective year, will be
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
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used in the above calculation. For example, the
Actual Savings based on compliant shipments for 2002
will be used to adjust the 2002 Savings Guarantee
for the cost of Excluded and Non-Compliant Shipments
in that same year.
3.4 If changes in Customer's and/or its vendors' shipping and
receiving hours result in a reduction of Logistics Group's
ability to provide overall savings to Customer, Logistics
Group will quantify this impact for Customer and have the
right, but not the obligation, to adjust the Guaranteed
Savings accordingly.
3.5 The Guaranteed Savings will not include any costs associated
with fuel surcharges. These costs will be removed from the
baseline and the Actual Expense prior to any calculations
under this Section 3.
3.6 In the event Logistics Group determines that a change in any
Operating Parameter set forth in Exhibit C (Section 4)
negatively impacts the overall savings opportunity, Logistics
Group will quantify this impact for Customer and will have
the right to request that the Joint Logistics Committee
adjust the Guaranteed Savings accordingly.
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EXHIBIT E
TRANSPORTATION MANAGEMENT AGREEMENT
********
SHARED SAVINGS PROGRAM
1.0 Definitions
1.1 Actual Expense: The transportation costs billed under this
Agreement.
1.2 Additional Lanes: For purposes of calculating projected
Shared Savings, Customer Rates for Additional Lanes will be
the same percentage higher than the Logistics Group Rates for
existing lanes for the respective mode (e.g., TL, LTL).
By way of example, if Logistics Group Rates for TL
shipments are on average five percent lower than
Customer Rates for TL shipments, Logistics Group
Rates for TL Additional Lanes will be five percent
lower than Customer Rates.
1.3 Baseline Expense: The transportation costs that Customer
would have incurred based on Customer's Rates without
Optimization.
1.3.1 To enable Logistics Group to determine the Baseline
Expense, Customer agrees to provide to Logistics
Group its Customer Rates within thirty (30) days
from the Effective Date of this Agreement.
1.3.2 Logistics Group will develop a Customer-specific
rate tariff containing Customer Rates to be used in
determining the cost Customer would have incurred
without the benefit of Logistics Group Rates.
1.3.3 Logistics Group will, on behalf of Customer, obtain
updated rates from core carriers annually for the
duration of this Agreement. In the event that these
updated rates result in an overall increase in rates
when compared to existing core carrier rates,
Logistics Group will, with the consent of the Joint
Logistics Committee, increase the Baseline expense
by the same percentage for the purpose of Shared
Savings calculations.
1.4 Carrier Rate Savings: The difference, stated either as a
percentage or a monetary amount, in Logistics Group Rates and
Customer Rates. For purposes of this definition, Logistics
Group's Rates are lower than Customer Rates, unless otherwise
stated herein.
1.5 Customer Rates: The carrier rates that Customer has in place
prior to the Effective Date.
1.6 Excluded Shipments: Those shipments that result in costs
above Logistics Group Rates due to reasons beyond the control
of Logistics Group, including but not limited to emergency
shipments (e.g., express, expedited, air) or extended transit
service outside the agreed upon Assumptions, shipments
affected by Force Majeure events, and special transportation
service requests by Customer.
1.7 Logistics Group Rates: The carrier rates that Logistics Group
provides to Customer.
1.8 Non-Compliant Shipments: Shipments that result in lost
potential savings and / or higher transportation costs, that
(a) the customer does not make available to Logistics Group
at least 48 hours prior to the required ship date and for
which Logistics Group is not able to fully optimize and/or
obtain the lower cost carrier; or (b) Shipments where
Customer or Customer's vendors ship
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via carriers not included in the Logistics Group core carrier
program without prior written approval from Logistics Group.
Any incumbent carriers of Customer that Customer and
Logistics Group mutually agree in writing to continue using
will be considered part of the core carrier program.
1.9 Optimization: The process by which Logistics Group provides
the most cost-effective and efficient transportation service
to Customer, which includes but is not limited to the use of
Logistics Group Rates, shipment consolidation and multi-stop
TL.
1.10 Overall Savings: Carrier Rate Saving plus Optimization
savings.
1.11 Realized Savings: The amount equal to the Actual Expense less
Baseline Expense.
1.12 Shared Savings Pool: Realized savings minus the Savings
Guarantee.
1.13 2001 Analysis: The modeling analysis that Logistics Group
will perform subject to Customer providing the required data
including but not limited to cube information. (As of the
Effective Date of this Agreement, Logistics Group was not in
receipt of all data necessary to complete the 2001 Analysis.
Upon completion of the 2001 Analysis, Logistics Group will
provide a written copy of same to Customer, and the parties
will amend this Agreement accordingly.)
2.0 Administration of the SSP
2.1 Logistics Group will provide a quarterly report to Customer,
which will set forth the Realized Savings for all
transportation managed by Logistics Group for that quarter.
If applicable, Customer agrees to make any required Shared
Savings payments within thirty (30) days from date of
Logistics Group's first quarterly report which demonstrates
that Logistics Group has achieved the full annual Guaranteed
Savings for the then current year and thereafter within
thirty (30) days after each subsequent quarterly report
during such year. All disputes regarding Logistic Group's
computation of the Realized Savings initially shall be
submitted to the Joint Logistics Committee and, if the Joint
Logistics Committee is unable to resolve the issue, shall be
subject to the dispute resolution provisions of Section 18 of
the Agreement.
2.2 The parties agree that Customer shall be entitled to ******
percent (******) of the Shared Savings Pool, and Logistics
Group shall be entitled to ****** percent (******) of the
Shared Savings Pool. See Table 3 for an example of the SSP
calculation.
For illustration purposes only:
---------------------------------- --------------
Realized ******
Savings:
Less Guaranteed Savings: ******
Shared Savings Pool: ******
Customer share (******): ******
Logistics Group share (****): ******
---------------------------------- --------------
Table 3
* Subject to a confidential treatment request of Tractor Supply Company dated
August 13, 2001.
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