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EXHIBIT 10.5
TRAVELCENTERS OF AMERICA
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FREIGHTLINER EXPRESS OPERATING AGREEMENT
This Freightliner Express Operating Agreement ("THIS AGREEMENT") is
effective as of the 21st day of July, 1999, by and among Freightliner
Corporation, a Delaware corporation ("FREIGHTLINER"), TA Operating Corporation,
dba TravelCenters of America, a Delaware corporation ("TA OPERATING"), and TA
Franchise Systems, Inc., a Delaware corporation ("TA FRANCHISE"). TA Operating
and TA Franchise (collectively, "TA OPERATIONS") are both wholly-owned
subsidiaries of TravelCenters of America, Inc., a Delaware corporation (THE
"PARENT CORPORATION").
A. Freightliner produces, distributes and markets a full range of
commercial vehicles, including heavy and medium-duty trucks.
B. TA Operations operates or franchises the operations of three
distinct types of travel centers with repair facilities known as "shops" (the
"TRAVELCENTERS LOCATIONS"): (i) sites owned or leased by TA Operating or an
affiliate and operated by TA Operating ("COCOS"), of which there are currently
110; (ii) sites owned or leased by an affiliate and leased to independent
lessee-franchises that operate such sites, of which there are currently 29; and
(iii) sites owned or leased and operated by independent franchisees that operate
on such sites, of which there are currently 9 (collectively, with the sites
described in the foregoing clause (ii), the "FRANCHISE LOCATIONS").
C. The TravelCenters Locations are operated under the "TravelCenters of
America" and "TA" trademarks (or, in the case of certain locations now operated
under other names, will be brought under such trademarks) and are truck-stop
facilities offering a broad range of fuel and nonfuel products, services and
amenities to trucking fleets, professional truck drivers and other motorists,
including truck maintenance and repair services and products, full service and
fast food dining, travel and convenience stores, telecommunications services and
various hospitality and rest-related amenities.
D. Freightliner and TA Operations desires to increase the potential to
service Freightliner Vehicles (as hereinafter defined) through the designation
and operation of TravelCenters Locations that are COCOs as Freightliner Express
Locations ("FE LOCATIONS") in accordance with the terms and conditions of this
Agreement.
E. Freightliner also desires to increase its market share of the parts
aftermarket and wishes to enter into certain arrangements intended to encourage
marketing of Freightliner-Sourced Parts.
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In consideration of the foregoing and the mutual agreements herein
contained, the parties hereto agree as follows:
1. DEFINITIONS.
As used herein, the following terms will have the following meanings at
any time the matter has relevance:
1.1 "ALLIANCE" is a division of Freightliner.
1.2 "CLAIM" or "CLAIMS" shall mean all actions, proceedings, claims or
demands of any kind or nature whatsoever.
1.3 "FE SERVICE MENU" shall mean the Freightliner Express Service Menu
adopted from time to time by mutual agreement of Freightliner and TA Operations
specifying the warranty and repair services to be provided by FE Locations to
Freightliner Vehicles, which the parties intend will be limited to services that
generally can be performed in 1.5 hours or less or are otherwise agreed to be
within the scope of the Services. The initial FE Service Menu is attached as
EXHIBIT 1.3.
1.4 "FREIGHTLINER PRODUCTS" shall mean Freightliner Vehicles and
Freightliner-Sourced Parts.
1.5 "FREIGHTLINER-APPROVED PARTS" shall mean the proprietary parts (as
indicated by proprietary numbering in Freightliner's parts catalogs) and vendor
parts offered for sale by Freightliner or its Alliance division, including
Freightliner or Alliance branded parts either manufactured by or on behalf of
Freightliner or otherwise specifically licensed or approved by Freightliner for
use in servicing Freightliner Vehicles.
1.6 "FREIGHTLINER-SOURCED PARTS" shall mean Freightliner-Approved Parts
purchased from Freightliner or its Alliance division.
1.7 "FREIGHTLINER VEHICLES" shall mean the trucks and chassis sold by
Freightliner or listed for sale by Freightliner in the Freightliner Truck Data
Books that bear the "Freightliner" name and utilize Freightliner-Approved Parts.
1.8 "FREIGHTLINER WARRANTY POLICIES" shall mean Freightliner's warranty
policies under the Freightliner Warranty Manual and related publications.
1.9 "INDEMNIFIED PARTY" shall have the meaning given to such term in
Section 4.4.
1.10 "LOSSES" shall mean any suit, claim, demand, damage, liability,
cost or expense, including reasonable attorneys' fees and expenses, judgment or
settlement.
1.11 "OTHER INDEMNIFIED PARTIES" shall mean the affiliates, officers,
directors, employees, members, stockholders, agents and representatives of the
primary Indemnified Party.
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1.12 "SERVICES" shall mean the warranty and repair services
contemplated to be performed by FE Locations in accordance with this Agreement
and the FE Service Menu.
1.13 "STOCKHOLDERS' AGREEMENT" shall mean that certain Institutional
Stockholders' Agreement dated on or about the date hereof among certain
shareholders of the Parent Corporation.
2. OPERATIONS AND RESPONSIBILITIES OF FE LOCATIONS.
2.1 GENERAL. Each FE Location will serve as a point of purchase for
Services and Freightliner-Approved Parts in accordance with the FE Service Menu
and will act as an authorized limited parts and service dealer of Freightliner
for the purpose of performing Services for Freightliner Vehicles and customers
and selling Freightliner-Approved Parts. The FE Locations will operate under
such name or names identifying the FE Locations with Freightliner as
Freightliner may propose from time to time, each of which names shall be
reasonably acceptable to and be approved by TA Operations. Notwithstanding any
provision of this Agreement apparently to the contrary, all reasonable
out-of-pocket expense necessary to any name change initiated by Freightliner
after implementation of the name or names originally used to designate the FE
Locations shall be at the sole expense of Freightliner. Designation as an FE
Location shall entitle the FE Location to conduct the operations contemplated
under this Agreement at and from the current location of the FE Location and to
display and utilize Freightliner trademarks and service marks in compliance with
the limited license granted by Freightliner for such purpose. This Agreement is
intended to apply to the COCOs. TA Operating will operate each COCO that is an
FE Location and each other COCO that is engaged in any transactions with
Freightliner contemplated by this Agreement in the manner contemplated by this
Agreement and applicable to such COCO. Freightliner and TA Operations may from
time to time enter into separate agreements with respect to any Franchise
Locations that are designated by Freightliner and TA Operations as FE Locations.
2.2 LIMITATIONS; REFERRALS TO FREIGHTLINER AND SELECTRUCKS. FE
Locations shall not have the right to engage either currently or in the future
in the sale of new or used Freightliner Vehicles. However, FE Locations may from
time to time at the election of the FE Location display new and used
Freightliner trucks as well as other Freightliner merchandise and shall refer
potential purchasers of Freightliner Vehicles to nearby Freightliner dealerships
or SelecTrucks locations.
2.3 OPERATIONS; SCOPE OF SERVICES; REFERRALS. FE Locations shall
conduct the operations contemplated under this Agreement on a 24-hour day basis.
Consistent with TA Operations' past practice or as additionally may be required
to meet the requirements of the FE Service Menu, TA Operations shall employ
qualified and adequately trained technicians and other service personnel, parts
personnel and administrative staff for purposes of conducting such operations.
FE Locations will provide local road service as well as shop-based services
consistent with FE Service Menu. FE Locations will be included in the referral
lists maintained by Freightliner's Customer Assistance Center ("CAC") and
referrals will be made by the CAC to FE Locations in accordance with the CAC's
applicable policies. Each FE Location generally
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will be expected to refer warranty and repair services requiring on average in
excess of 1.5 hours or otherwise outside of the agreed scope of the Services
under the FE Service Menu to the nearest Freightliner dealership or, if a
Freightliner dealership is not reasonably convenient, another appropriate
service provider determined by the FE Location (which may consult with the CAC
as to suggested referrals). Freightliner will actively encourage its dealers to
make referrals to FE Locations for services within the FE Services Menu to the
extent convenient for the customer and where the dealer can not perform services
within a reasonable time.
2.4 WARRANTY SERVICES AND CLAIMS; REPLENISHMENT POLICY. FE Locations
may perform warranty services on Freightliner Products that are within the
Services under FE Service Menu. All such warranty services shall be performed in
accordance with and will be governed by Freightliner's Warranty Policies,
including the making, settlement and payment of claims. TA Operations will
administer Freightliner warranty claims on behalf of the FE Locations and
warranty payments will be made to TA Operations. Freightliner will process
warranty claims by TA Operations in accordance with Freightliner's standard
practices applicable to warranty claims by dealers. In making payments to
Freightliner, TA Operations shall not deduct any credits for warranty claims or
other amounts owed by Freightliner to TA Operations unless TA Operations shall
have given written notice to Freightliner applying for such and, in the case of
warranty claims, Freightliner has confirmed that such claims have been approved
by Freightliner. In connection with the performance of any Freightliner warranty
services, each FE Location will be required to use Freightliner-Approved Parts
and, with respect to each such part used in performing any Freightliner warranty
services, will be required to purchase identical Freightliner-Sourced Parts in
at least the same number as the number of such part used for warranty services.
Such replenishment policy shall be applied by Freightliner on an aggregate basis
with respect to TA Operations.
2.5 INSPECTION, RECALLS AND CAMPAIGNS. If approved in advance by
Freightliner and TA Operations, FE Locations may perform inspections or repairs
on Freightliner Products in connection with inspections, recalls or campaigns.
Such inspections and/or repairs shall be made in accordance with any related
Freightliner service bulletins, field modification bulletins, recall or other
campaign notices furnished to FE Locations as well as the Freightliner Service
Manual. FE Locations shall to the extent reasonably possible assist Freightliner
in notifying FE Location customers requiring such inspections or repairs of the
need or desirability of any such inspections or repairs using information
obtained through Freightliner's Service Advisor and ServicePro systems.
2.6 WORKMANSHIP; TOOLS AND EQUIPMENT; SERVICE MANUALS. FE Locations
shall perform all service work in a good and workmanlike manner in accordance
with all applicable laws and regulations in order to maintain the confidence of
the public in Freightliner, FE Locations and Freightliner Products. FE Locations
shall have and maintain in good working order on their premises the service
equipment and special tools and service manuals Freightliner and TA Operations
mutually agree from time to time are required to perform Services. The initial
agreed-upon list of service equipment, special tools and service manuals is
attached as EXHIBIT 2.6. FE Locations shall follow all service instructions
contained in the Freightliner Service Manuals, systems or other notices or
bulletins issued by Freightliner to FE Locations. Freightliner will from time to
time provide service and technical advice through periodic visits
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from field service personnel and provision of service publications to assist FE
Locations in satisfactorily performing Services on Freightliner Vehicles.
2.7 FREIGHTLINER-APPROVED PARTS. Each FE Location shall maintain the
inventories of Freightliner-Approved Parts agreed upon from time to time by
Freightliner and TA Operations to be necessary to provide Services and shall
employ personnel familiar with such parts to manage sales of such parts. The
initial list of required Freightliner-Approved Parts is attached as EXHIBIT 2.7.
Freightliner customers have the right to expect that any part that an FE
Location sells, installs or uses in the repair or servicing of any Freightliner
Vehicle meets the high quality standards of Freightliner-Approved Parts. FE
Locations therefore will not sell, use or install on Freightliner Vehicles any
parts that are not Freightliner-Approved Parts and are not equal in quality and
design to Freightliner-Approved Parts. FE Locations also will not sell or offer
to sell as Freightliner-Approved Parts any parts that are not in fact
Freightliner-Approved Parts.
2.8 PRICE AND OTHER TERMS OF SALE OF FREIGHTLINER-SOURCED PARTS. The
price and terms of sale for Freightliner-Sourced Parts shall be as set forth in
this Section 2.8 and in EXHIBIT 2.8 attached hereto or as otherwise agreed in
writing by Freightliner and TA Operations (TA Operations being hereinafter
referred to in this Section 2.8 as "Purchaser" and Freightliner-Sourced Parts
being hereinafter referred to in this Section 2.8 as "parts"):
(a) Purchaser may return obsolete or other returnable parts in
accordance with applicable return policies under the Alliance Policies and
Procedures. Orders for parts may be cancelled by Purchaser prior to shipment
subject to applicable handling and cancellation charges.
(b) Freightliner shall have the right to change the design or
specifications of any parts ordered by Purchaser at any time with no obligation
to make such changes in similar parts previously delivered to Purchaser. In
addition, Freightliner shall have the right, subsequent to the receipt of any
order, to make design changes and substitution of materials which, in
Freightliner's opinion, are necessary to improve the part. Purchaser shall
accept any such changed part in full settlement of Freightliner's obligations
under any order submitted by Purchaser.
(c) All parts purchased by Purchaser from Freightliner shall
be sold to Purchaser freight prepaid for stock orders and freight collect for
non-stock or expedited orders, place of manufacture or other point of shipment,
if applicable. Freightliner will attempt, whenever practical, to follow
Purchaser's request with respect to routing and mode of transportation but
reserves the final decision as to the carriers and routes selected. Parts will
be invoiced on the date they are shipped. Title to parts shall pass to Purchaser
on delivery to Purchaser. The risk of loss or damage, latent or otherwise, shall
pass to Purchaser upon delivery to Purchaser. Purchaser shall cooperate fully
with Freightliner in the inspection of parts received and in the submission of
claims to carriers for any shipping damage that may have occurred.
(d) All parts shipped directly to Purchaser from Freightliner vendors are
sold to Purchaser Ex-Works the vendor's dock. Risk of loss or damage, latent or
otherwise, shall pass
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to Purchaser upon delivery of the parts by the vendor to the carrier where
freight is contracted for by Purchaser or upon delivery to Purchaser if freight
is contracted for by the vendor.
(e) All parts returned by Purchaser to Freightliner (or to a
Freightliner authorized vendor) shall be shipped freight and insurance prepaid
Freightliner's dock (or vendor dock). At the time of receipt, parts must be
undamaged and packaged in original boxes, if practical. Claims for loss or
damage shall be filed by Purchaser directly with the carrier or other agent.
(f) Delivery dates are approximate and are based upon receipt
of all necessary information from Purchaser. Normal delivery can generally be
expected within 48 hours after the day of shipment from the facing Alliance
Parts Distribution Center.
(g) Freightliner shall not be responsible for failure to
accept Purchaser's order, for any delay in acceptance of such orders or any
failure or delay in delivering parts, if such failure or delay is due in whole
or in part to any change in Freightliner's production schedule as to which it
shall have notified Purchaser; or to any labor difficulties; or to any labor,
material, transportation or utility shortage or curtailment; or to government
regulations; or to discontinuance by Freightliner of the manufacture or sale of
any parts; or where such failure or delay is due to any cause beyond the control
or without the fault or negligence of Freightliner; or where performance by
Freightliner would be commercially impractical. In any event, any liability on
the part of Freightliner for any failure or delay in delivery of parts shall be
limited to the repayment to Purchaser of any part of the purchase price thereof
which Purchaser may have paid to Freightliner.
(h) Purchaser shall include as a part of its sale of parts to
customers Purchaser's express written warranty in the identical terms,
limitations and disclaimers as extended by Freightliner to Purchaser with
respect to the sale of such part to Purchaser. Any warranty extended by
Purchaser to customers in terms, limitations and disclaimers other than those of
the express written warranty furnished to Purchaser by Freightliner shall be the
sole responsibility of Purchaser, and Purchaser shall defend, indemnify and save
Freightliner harmless from any suit, claim, demand, damage, liability, cost or
expense, including reasonable attorneys' fees and expenses, final judgments and
settlements, arising out of or resulting from the extension by Purchaser of any
materially different warranty than the warranty extended by Freightliner to
Purchaser or from the failure of Purchaser to include in Purchaser's agreement
with its customers limitations and disclaimers substantially similar to the
limitations and disclaimers set forth in the Freightliner Warranty Policies.
2.9 LIMITATIONS RELATING TO FREIGHTLINER-SOURCED PARTS; FREIGHTLINER
WARRANTIES. FE Locations shall encourage and attempt to increase the sale of
Freightliner-Sourced Parts but, without the prior approval of Freightliner,
shall not establish satellite parts stores or engage in the active wholesaling
of Freightliner-Sourced Parts (including bulk sales, active discounting, parts
deliveries to fleets, telemarketing and sales for resale). Any part sold by an
FE Location in connection with the provision of Services to a Freightliner
Vehicle where such part is not provided under a Freightliner vehicle warranty
will be covered by Freightliner's standard warranty on parts only if such part
is a Freightliner-Sourced Part, as documented in a manner
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acceptable to Freightliner on or in connection with the invoice supplied to the
customer by the FE Location. The invoice supplied to a customer by an FE
Location in connection with parts sales will indicate in writing in a
conspicuous manner that any parts not indicated to be covered by Freightliner's
standard parts warranty instead are covered by TA Operations' warranties to
ensure that the customer is advised that any parts that are not
Freightliner-Sourced Parts are not included in any warranties furnished by
Freightliner. Parts used by an FE Location in performing warranty services on
Freightliner Vehicles in accordance with Freightliner Warranty Policies will be
covered by the vehicle warranty for the balance of the vehicle warranty period
provided that such parts are Freightliner-Approved Parts.
2.10 TAXES. Freightliner's prices do not include federal excise tax and
do not include other excise, sales, use or similar tax or any other tax
applicable to the sale, delivery or use of Freightliner-Sourced Parts. Purchases
of Freightliner-Sourced Parts by FE Locations are presumed to be for the
purposes of resale. FE Locations shall therefore furnish to Freightliner such
certificates or other evidence that may be required by Freightliner to establish
or maintain the exemption of such purchase from state or local sales or use
taxes or any such similar taxes. If any FE Location purchases any
Freightliner-Sourced Part and uses or employs such Freightliner-Sourced Part in
a manner that requires the payment of sales, use or similar taxes with respect
to such part or its use, FE Location shall pay any such taxes directly to the
appropriate governmental authorities or, if any such taxes are paid by
Freightliner in its sole discretion, reimburse Freightliner therefor, and shall
defend, indemnify and save harmless Freightliner from and against such taxes and
all claims, demands, liability, cost or expense, including reasonable attorneys'
fees and expenses, final judgments and settlements with respect thereto.
2.11 PROMOTIONAL ACTIVITIES. FE Locations shall use customer service
promotional literature supplied by Freightliner to TA Operations and approved by
TA Operations (any such material to be supplied by Freightliner on the same
cost-sharing basis as similar material is provided to Freightliner's dealers) to
advertise and promote the sale and use of Freightliner-Sourced Parts for the
servicing of Freightliner Vehicles and similar vehicles manufactured by other
companies. FE Locations shall participate in local, regional and national FE
Location advertising and promotional programs approved by Freightliner and TA
Operations. FE Locations shall not engage in service or other promotions
relating to Freightliner Products without the advance approval of Freightliner
and TA Operations.
2.12 TRAINING. Freightliner shall at its expense make available to TA
Operations parts, service and technology training programs offered by
Freightliner to its dealers that are consistent with the FE Service Menu and, in
connection with such programs, make basic program materials available without
charge on the same basis as Freightliner generally makes the same or
substantially identical materials available to its dealers or their personnel
without charge. In addition to such training programs as TA Operations may
separately develop and provide at its expense for the FE Locations, Freightliner
and TA Operations may jointly develop customized training programs for the FE
Locations on such cost-sharing basis between Freightliner and TA Operations as
is agreed upon by Freightliner and TA Operations. Personnel of the FE Locations
shall, at FE Location expense for food, lodging, travel and program
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materials, participate in the various parts, service and technology training
programs made available to the FE Locations.
2.13 PRODUCT MODIFICATION. FE Locations shall not modify or alter any
Freightliner Product unless the relevant FE Location either obtains
Freightliner's prior written approval of such modification or alteration or
notifies the customer in writing, prior to or at the time of such modification
or alteration, that it is being made without Freightliner's approval and will
not be covered by any warranty of Freightliner. In no event shall any FE
Location remove, alter or modify any equipment or accessories required on any
Freightliner Vehicle by law or regulation. For purposes of this Section, the
terms "modify" and "alter" and "modification" and "alteration" shall mean any
departures from manufacturer specifications and shall not mean repairs or
replacements in accordance with manufacturer specifications. Each FE Location
shall defend, indemnify and save Freightliner harmless from any suit, claim,
demand, damage, liability, cost or expense, including reasonable attorneys' fees
and expenses, final judgments and settlements, arising out of or resulting from
such modification or alteration of a Freightliner Product by such FE Location
without Freightliner's prior written approval.
2.14 CUSTOMER COMPLAINTS. Customer complaints and claims with respect
to warranty Services shall be handled in accordance with the applicable
procedures under the Freightliner Warranty Policies. Each FE Location shall
receive, investigate and attempt to remedy customer complaints and claims with
respect to non-warranty Services by owners or users of Freightliner Products in
a manner intended to secure and maintain the goodwill of the customer and the
public toward Freightliner, the FE Locations and Freightliner Products. An FE
Location shall be free to resolve any such complaints or claims provided that it
absorbs all associated cost or expense. In any such case, Freightliner shall
have no obligation to reimburse the FE Location or to absorb any such expense
unless otherwise agreed by Freightliner in writing. All complaints and claims
received by an FE Location that cannot be readily remedied by the FE Location
shall be promptly reported in detail to Freightliner, together with the name and
address of the owner or user and the serial number or other identification of
the Freightliner Product involved.
2.15 LICENSES. FE Locations shall obtain any licenses required for the
conduct of the business contemplated by this Agreement.
2.16 CONDITION OF INDIVIDUAL FE LOCATIONS; INSPECTION BY FREIGHTLINER.
The premises of each FE Location shall be maintained in a manner that meets TA
Operations' internal quality requirements as in effect from time to time
(including those reflected in its Quality Service checklist) and the general
criteria for FE Locations mutually agreed upon by Freightliner and TA Operations
from time to time. Freightliner may conduct such review and inspection of FE
Locations as it determines to be necessary or desirable from time to time. TA
Operations will respond promptly to any and all reasonable concerns of
Freightliner with respect to the operations of any FE Location.
2.17 TERMINATION OF INDIVIDUAL FE LOCATIONS. In the event that an FE
Location fails to conform in all material respects with the criteria for
designation as an FE Location (other than any such criteria expressly waived by
agreement of Freightliner and TA Operations in
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connection with its designation as an FE Location) or engages in a pattern of
conduct that is fraudulent or that in the reasonable judgment of Freightliner is
otherwise materially and substantially injurious to the goodwill of
Freightliner, Freightliner may, after consultation with TA Operations, agreement
by Freightliner and TA Operations on a mutually acceptable cure and reasonable
cure period, and failure by the FE Location to achieve the agreed-upon cure
within such period, terminate the status of such TravelCenters Location as an FE
Location by notice to TA Operations and the FE Location. Upon any such
termination, the FE Location will promptly take all steps necessary to cease
operation as an FE Location.
2.18 EFFECT OF TERMINATION OF AGREEMENT. Upon any termination of this
Agreement and resulting termination of each FE Location, all outstanding
indebtedness or other payment obligations under this Agreement or any related
agreement of any FE Location to Freightliner, including payments for
Freightliner-Sourced Parts, or of Freightliner to or in respect of any FE
Location, including any warranty receivables, shall become immediately due and
payable without regard to any contrary term of any such indebtedness or other
payment obligation. In addition, Freightliner will at the request of an FE
Location repurchase from the FE Location any new and unused Freightliner-Sourced
Parts that are then in inventory and in the original, undamaged packages, are
then listed for sale in the Freightliner Parts Price Lists, as then current
(except discontinued or replaced parts and accessories) and are not within the
Freightliner-Sourced Parts that have been purchased by or on behalf of any FE
Location in replenishment of Freightliner-Approved Parts used in warranty
services. The purchase price for each such part shall be the price at which the
FE Locations would be permitted to buy such part from Alliance pursuant to
Section 2.8, as shown in the then-current and applicable Freightliner Parts
Price List, less handling charges equal to the handling charges for annual parts
return as then in effect and published in the Alliance Policies and Procedures,
except that handling changes shall not apply in the case of any purchases
pursuant to this Section 2.18 following a termination of this Agreement by
reason of a breach by Freightliner. Within 30 days following the effective date
of a termination of this Agreement, each FE Location that wishes to have
Freightliner purchase any eligible Freightliner-Sourced Parts shall supply
Freightliner with a list of and proper identification of all such parts and such
other information as Freightliner may reasonably require. Within 30 days from
the receipt of such list and information, Freightliner will furnish the FE
Location with written notice of all such listed parts as Freightliner has
determined it is required to purchase together with the price to be paid
therefor and transfer instructions. Within 30 days after receipt of such
instructions, each FE Location shall ship such parts as specified in such
instructions. Until shipment, each FE Location shall retain possession of such
parts at its risk and provide Freightliner with an opportunity to inspect. The
FE Location shall take such action and shall execute and deliver such
instruments as may be reasonably necessary to convey to Freightliner good
marketable title to all parts purchased by Freightliner, to comply with the
requirements of any applicable state law relating to bulk sales or transfers and
to satisfy and discharge any liens or encumbrances on such parts prior to
delivery thereof to Freightliner.
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3. DESIGNATION AND DEVELOPMENT OF FE LOCATIONS, ETC.
3.1 DESIGNATION. Freightliner and TA Operations will jointly designate
specific TravelCenters Locations as FE Locations pursuant to criteria mutually
agreed upon by Freightliner and TA Operations from time to time. These criteria
will include city and highway location, status of ongoing construction projects
and facility considerations. Any TravelCenters Location that does not have
service facilities or is barred under applicable law from operating as an FE
Location will not be designated or operated as an FE Location.
3.2 TRAVELCENTERS LOCATIONS NOT DESIGNATED AS FE LOCATIONS. Any
TravelCenters Location that is not jointly designated as an FE Location by
Freightliner and TA Operations will not be permitted to perform warranty
services for Freightliner Vehicles or to purchase proprietary
Freightliner-Sourced Parts. A TravelCenters Location that does not satisfy the
criteria for designation as an FE Location or that for any other reason agreed
upon by Freightliner and TA Operations is not designated as an FE Location by
Freightliner and TA Operations may nevertheless be permitted to purchase
non-proprietary Freightliner-Sourced Parts with the approval of Freightliner.
3.3 ROLL-OUT SCHEDULE. Freightliner and TA Operations intend that
eventually most, if not all, TravelCenters Locations that meet the criteria for
designation as FE Locations agreed upon by Freightliner and TA Operations under
Section 3.1 (including any such new locations acquired or developed after the
date of this Agreement and any Franchise Locations) will operate as FE
Locations. Freightliner and TA Operations will jointly agree upon a roll-out
schedule based on the designation criteria. Freightliner and TA Operations will
use reasonable efforts to cause at least one-third of the COCOs with service
facilities to be operating as FE Locations within six months after the date of
this Agreement and to cause all COCOs with service facilities to be operating as
FE Locations within 18 months after the date of this Agreement, subject to such
modifications to such projected schedule as jointly may be agreed upon by
Freightliner and TA Operations from time to time or be dictated by circumstances
beyond the control of Freightliner and TA Operations.
3.4 TEST LOCATIONS. To test and develop a methodology for converting
TravelCenters Locations into FE Locations, Freightliner and TA Operations will
as promptly as possible in accordance with the projected schedule attached as
EXHIBIT 3.4 establish and roll-out the test locations listed on EXHIBIT 3.4.
3.5 SITING OF FUTURE TRAVELCENTERS LOCATIONS; OTHER INFORMATION. TA
Operations shall confer with Freightliner concerning the service needs of
Freightliner's customers and Freightliner's capacity objectives and the related
capacity considerations with respect to the siting of new TravelCenters
Locations prior to making any final determination on the siting of any
TravelCenters Locations proposed to be developed by or on behalf of TA
Operations or commitment to the acquisition of any truck-stops or similar
businesses proposed to be acquired by or on behalf of TA Operations; provided
that, in the case of any such acquisition, the foregoing requirement shall apply
only during the period Freightliner is a shareholder in the Parent Corporation
or any successor thereto and a Freightliner nominee is serving on the Board of
Directors of the Parent Corporation. During any period Freightliner no longer
has a nominee
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serving on the Board of Directors of the Parent Corporation, TA Operations shall
be obligated to confer with Freightliner in advance of any such determination
with respect to a proposed acquisition only if and to the extent
agreed by the other party or parties to the acquisition. TA Operations shall use
reasonable efforts to obtain the agreement of such other party or parties.
Subject to giving Freightliner the opportunity in accordance with the foregoing
to provide its input from time to time as to siting, TA Operations shall be free
to locate at whatever sites it may choose and make whatever acquisitions it may
choose. In addition, during the term of this Agreement TA Operations shall use
reasonable efforts to provide advance notice (given in a timely manner under the
applicable circumstances) to Freightliner of any proposed permanent closure or
disposition of any FE Location or any other fact, circumstance or development
that senior management of TA Operations anticipates could reasonably be expected
to have a significant impact on a substantial number of FE Locations with
respect to the FE Location program contemplated by this Agreement.
3.6 TECHNOLOGY. Freightliner and TA Operations will mutually agree on
the scope of all technology investments necessary to cause TA Operations'
information systems to be integrated with all applicable Freightliner systems
(including parts, service and warranty systems) to enable TA Operations and FE
Locations to utilize, either directly at each FE Location or indirectly through
TA Operations, the programs and information of Freightliner necessary or
desirable to the operation of FE Locations. TA Operations shall bear the expense
of all necessary investment in software, hardware and other information systems
and equipment agreed upon by Freightliner and TA Operations from time to time
and of all related fees and expenses for consulting, installation, operation and
maintenance. The initial agreed-upon technology requirements are listed on
EXHIBIT 3.6. Freightliner will consult with TA Operations concerning
alternatives and cost-saving strategies, including centralizing ordering and
other functions. Freightliner will provide TA Operations and the FE Locations
with access to the technology, training and operating information made available
to Freightliner's dealer network (i.e., internet and extranet) to the extent
consistent with the scope of Services to be provided by the FE Locations.
3.7 SERVICE CRITERIA; TRAINING PROGRAMS. Freightliner and TA Operations
will jointly develop service criteria intended to provide enhanced service for
Freightliner customers at FE Locations. TA Operations will use reasonable
efforts to cause FE Locations to achieve the goal of an average, during core
business hours of 6 am to 7 pm at each location, of a pre-service wait time for
Freightliner customers of 45 minutes or less. Freightliner will make available
appropriate training programs to personnel of TA Operating and FE Locations and
work with TA Operations on the development of joint training programs for FE
Location personnel.
3.8 PROMOTIONAL ACTIVITIES. Freightliner shall provide marketing
programs and assistance promoting the FE Locations to aid the retail parts and
service sales effort by Freightliner and TA Operations through the FE Locations
and thereby promote the sale of Freightliner Products. Freightliner and TA
Operations will develop joint advertising programs (any such advertising to be
in accordance with Freightliner's and TA Operations' respective advertising
policies) and joint marketing programs agreed upon by Freightliner and TA
Operations from time to time, including such joint advertising or marketing
programs to support the TravelCenters network as Freightliner and TA Operations
may determine to be mutually
11
beneficial and agree upon from time to time. Any joint advertising or marketing
programs shall be funded in the manner agreed upon by the participants with
respect to such specific program. TA Operations will require participation in
joint advertising or marketing programs by the relevant FE Locations and
Freightliner will actively encourage its dealers to promote the FE Locations
through service referrals and promotional and informational displays and
activities at dealer locations. TA Operations shall consult with Freightliner
and obtain Freightliner's advance approval with respect to any service or other
promotions relating to Freightliner Products that TA Operations proposes to
undertake and shall cause each FE Location to do the same with respect to any
such promotion that the FE Location proposes to undertake. Freightliner shall
consult with TA Operations and obtain TA Operations' advance approval with
respect to any service or other promotions specifically relating to FE
Locations.
3.9 REFERRALS. FE Locations will be the second referral after
Freightliner dealerships under the referral policies and lists of the CAC to the
extent consistent in any case with the needs of the specific customer.
Freightliner and TA Operations will develop processes for referrals by FE
Locations to nearby Freightliner dealerships and SelecTrucks locations both for
service and for purchases of Freightliner Products.
3.10 ACCOUNTING RECORDS AND REPORTS; BENCHMARKS. TA Operations shall
maintain accounting and other records that at all times accurately reflect the
operations of the FE Locations to enable TA Operations to prepare the reports
that are required by this Agreement or are reasonably requested hereunder by
Freightliner from time to time. TA Operations shall permit examination of its
accounts and records relating to the FE Locations, including warranty audits
and other review, to be made by Freightliner at any reasonable time upon at
least five days' prior notice. Freightliner will, to the extent practical and
not inconsistent with Freightliner's safeguarding of Freightliner's own
proprietary information, use reasonable efforts to provide to TA Operations such
information from Freightliner's systems and programs as may be relevant to
evaluating the performance of the FE Locations under this Agreement and the
establishment of benchmarks for mutually agreed-upon goals. Freightliner and TA
Operations will jointly develop mutually agreed-upon methodologies for tracking,
evaluating and recording the performance of the FE Locations.
3.11 LIMITED LICENSE TO FREIGHTLINER TRADEMARKS. Freightliner hereby
grants TA Operations and each FE Location the non-exclusive right to use
Freightliner's trademarks and service marks in connection with all FE Location
operations. Any such use shall be in accordance with this Agreement and such
other reasonable requirements as Freightliner may from time to time in writing
expressly impose on the use of the trademarks. TA Operations and each FE
Location shall not use Freightliner's trademarks or service marks in a manner
that could jeopardize Freightliner's ownership or use thereof. TA Operations
and each FE Location shall discontinue the use of any such mark or the manner in
which used if and when requested to do so by Freightliner. Upon any termination
of this Agreement, TA Operations and each FE Location shall immediately
discontinue all use of Freightliner's trademarks and service marks not permitted
by law or under any separate arrangements with Freightliner and, except to the
extent permitted by law or under any such separate arrangement with
Freightliner, shall not thereafter use any similar mark. All actions necessary
to discontinue such use shall be at the expense of TA Operations, except in the
case of any termination of this Agreement caused by Freightliner's
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breach of this Agreement, in which case all reasonable out-of-pocket expense
incurred in connection with such discontinuation shall be borne by Freightliner.
3.12 SIGNAGE. FE Locations shall be identifiable to the public by
signage of one or more sizes and types mutually acceptable to Freightliner and
TA Operations. Freightliner and TA Operations will mutually agree upon the
selection and placement of signage, both exterior and interior, with appropriate
prominence and customer visibility in a manner consistent with Freightliner
signage guidelines and all applicable local ordinances. TA Operations will make
all arrangements for permitting and installation of jointly agreed-upon signage
and will be responsible for signage maintenance and related expense. The costs
of purchase and installation of jointly agreed-upon signage at the FE Locations
shall be borne as provided on EXHIBIT 3.12. In the event of the termination of
any TravelCenters Location as an FE Location, TA Operations will cause the
prompt removal of all signage identifying the location as an FE Location. The
costs of any such removal shall be borne in the manner contemplated by Section
3.11.
3.13 SIMILAR PROGRAMS WITH OTHERS. During the term of this Agreement,
(a) TA Operations will not participate in a similar service or warranty program
with any Freightliner Competitor (as defined in the Stockholders' Agreement) and
(b) Freightliner will not (i) participate in a similar service or warranty
program with any TA Truck-Stop Competitor (as hereinafter defined) or (ii)
permit any distributor of products of Freightliner or Freightliner's
subsidiaries to operate any satellite location at any truck stop location under
the name or names chosen for the FE Locations pursuant to Section 2.1. For
purposes of this Section 3.13, the term "TA Truck-Stop Competitor" shall mean
Petro, Flying J, AMBEST, PTP, Sapp Bros., Giant, All American, Rip Griffin (who
is also a Freightliner dealer), Bosselman's, Dixie Trucker's Home,
Texaco/Equilon, Pilot, Love's, Speedway (Emro), Little America, Total, Mapco,
Coastal, Fuel Mart and any other chain or network of national or regional "truck
stops" as such term is generally understood in the trucking industry, including
any affiliates or successors to any of the foregoing. However, during the term
of this Agreement, Freightliner intends to continue to pursue and develop
service capacity alternatives and solutions, and TA Operations acknowledges
that, except as otherwise provided in this Section 3.13, Freightliner may engage
in service or warranty programs with others, including distributors of products
of Freightliner and its subsidiaries, affiliates of Freightliner and unrelated
third parties. In addition, during the term of this Agreement Freightliner may
pursue a separate strategy with respect to its Sterling trucks or any other
separate product line (except that the name restriction set forth in Section
3.13(b)(ii) shall nevertheless apply). In the case of Sterling or any separate
product line of Class 8 vehicles, Freightliner will first consult with TA
Operations in good faith concerning the possible expansion of the service and
parts arrangements under this Agreement to include Sterling or such separate
product line of Class 8 vehicles. In connection with such consultation,
Freightliner will explore with TA Operations all applicable factors and
considerations, including capacity and expansion possibilities and constraints,
marketing strategy and separate branding, and will endeavor to develop with TA
Operations a mutually agreeable proposal for participation by TA Operations. Any
such expansion with TA Operations will be subject to mutual agreement by
Freightliner and TA Operations on all relevant terms and conditions.
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4. INDEMNIFICATION.
4.1 INDEMNIFICATION BY TA OPERATIONS. Upon the written request of
Freightliner, TA Operations shall defend, indemnify and hold Freightliner
harmless from and against any Losses that may be asserted, commenced or arise by
reason of or out of any actual or alleged negligence, error, omission or act of
TA Operations (including through any COCO), including (a) any negligent or
improper, or alleged negligent or improper, repair or servicing of any
Freightliner Product, including any servicing not undertaken in accordance with
the Freightliner Service Manual, but excluding any actual or alleged negligence,
error, omission or act of TA Operations to the extent it arises out of erroneous
instructions or procedures specified in the Freightliner Service Manual, (b) any
modification or alteration (as defined in Section 2.13) of any Freightliner
Product unless TA Operations has obtained Freightliner's prior written approval
of such modification or alteration, (c) any breach or alleged breach of any
agreement between TA Operations and any other party, including any warranty,
express or implied, extended to customers by TA Operations on terms other than
those published by Freightliner as Freightliner's express warranty, and (d) any
misleading statement or representation, whether in advertising (other than
advertising in accordance with materials furnished by Freightliner) or
otherwise. If TA Operations fails in any such case to undertake the defense
against any such Losses, Freightliner may conduct, but shall not be required to
conduct, such defense, and TA Operations shall be liable to Freightliner for any
and all Losses incurred in connection with such defense, together with any and
all Losses arising out of the related claim or claims.
4.2 INDEMNIFICATION BY FREIGHTLINER. Upon the written request of TA
Operations, Freightliner shall defend, indemnify and hold TA Operations harmless
from and against any Losses that may be asserted, commenced or arise by reason
of or out of any actual or alleged negligence, error, omission or act of
Freightliner, including (a) any actual or alleged defects in material, design,
assembly or manufacture of any Freightliner-Sourced Part sold to TA Operations
or any FE Location by Freightliner but only if (i) such defects existed at the
time of manufacture or sale of such Freightliner-Sourced Part by Freightliner
and (ii) TA Operations or the relevant FE Location included in the contract of
sale with the user or customer of the Freightliner-Sourced Part the
then-applicable Freightliner warranty without any modification of such warranty
as it is published by Freightliner, (b) any breach or alleged breach of any
agreement between Freightliner and any other party, including any warranty,
express or implied, extended to customers by Freightliner, (c) any misleading
statement or representation, whether in advertising (other than advertising in
accordance with materials furnished by TA Operations) or otherwise, and (d) any
erroneous instructions or procedures specified in the Freightliner Service
Manual. If Freightliner fails in any such case to undertake the defense against
any such Losses, TA Operations may conduct, but shall not be required to
conduct, such defense, and Freightliner shall be liable to TA Operations for any
and all Losses incurred in connection with such defense, together with any and
all Losses arising out of the related claim or claims.
4.3 CLAIMS AGAINST MULTIPLE PARTIES. Whenever a complaint or suit
alleges liability on the part of both TA Operations and Freightliner on the
bases set forth in Sections 4.1 and 4.2, respectively, each shall be responsible
for its own defense, including costs and attorneys' fees, unless one party
offers to undertake the total defense and the other party agrees thereto in
writing. Any such responsibility on the part of a party for its own defense
pursuant to this
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Section, or pursuant to any other circumstances not within the scope of this
Section, shall in no way affect any legal rights which either party may have
against the other to indemnification or contribution.
4.4 PROCEDURE FOR THIRD PARTY CLAIMS. In order for a party (the
"Indemnified Party") to be entitled to any indemnification provided for under
this Agreement in respect of, arising out of or involving a Claim made by any
person (other than either party or their respective affiliates) against the
Indemnified Party (a "Third Party Claim"), such Indemnified Party must notify
the indemnifying party in writing of the Third Party Claim within a reasonable
time after receipt by such Indemnified Party of written notice of the Third
Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent that the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the Indemnified Party failed to give such
notice). Thereafter, the Indemnified Party shall deliver to the indemnifying
party, within a reasonable time after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim. If a Third Party Claim is
made against an Indemnified Party, the indemnifying party shall be entitled to
participate in the defense thereof and, if it so chooses, to assume the defense
thereof with counsel selected by the indemnifying party; provided such counsel
is not reasonably objected to by the Indemnified Party. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, the indemnifying
party shall not be liable to the Indemnified Party for any legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the indemnifying party elects to assume the defense of a Third Party
Claim, the Indemnified Party shall (a) cooperate in all reasonable respects with
the indemnifying party in connection with such defense, (b) not admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the indemnifying party's prior written consent and (c) agree to
any settlement, compromise or discharge of a Third Party Claim which the
indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim. If the indemnifying party assumes the
defense of any Third Party Claim, the Indemnified Party shall be entitled to
participate in (but not control) such defense with its own counsel at its own
expense. If the indemnifying party does not assume the defense of any such Third
Party Claim, the Indemnified Party may defend the same in such manner as it may
deem appropriate, including settling such claim or litigation and the
indemnifying party shall promptly reimburse the Indemnified Party for all Losses
imposed thereon or reasonably incurred thereby in connection with such Third
Party Claim upon request.
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5. LIMITATION OF LIABILITY AND REMEDY.
FREIGHTLINER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY PARTS, EXCEPT SUCH WRITTEN WARRANTY OR WARRANTIES AS MAY BE SET FORTH IN THE
FREIGHTLINER WARRANTY POLICIES IN EFFECT AT THE TIME FREIGHTLINER ACCEPTS A
PURCHASE ORDER HEREUNDER. SUCH WRITTEN WARRANTY IS EXCLUSIVE AND IS IN LIEU OF
ALL OTHER WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NO
CONSEQUENTIAL DAMAGES, PUNITIVE OR EXEMPLARY DAMAGES, INCIDENTAL DAMAGES OR
OTHER INDIRECT OR SPECIAL DAMAGE OR LOSS, INCLUDING LOSS OF PROFITS, LOSS OF
GOODWILL, LOSS OF BUSINESS OPPORTUNITY, LOSS OF USE OF PLANT OR EQUIPMENT OR
LOSS OF EXECUTIVE AND EMPLOYEE TIME, WILL BE RECOVERABLE BY FREIGHTLINER, TA
OPERATIONS OR ANY FE LOCATION FOR BREACH OF THIS AGREEMENT OR ANY PART OF THIS
AGREEMENT OR FOR ANY CLAIM RELATED TO FREIGHTLINER-SOURCED PARTS OR OTHER
FREIGHTLINER PRODUCTS OR THIS AGREEMENT, WHETHER SUCH DUTY OR OBLIGATION BE
CONTRACTUAL IN NATURE, STATUTORY OR OTHERWISE.
Except insofar as such liabilities and remedies are excluded or limited
or modified in this Section or elsewhere in this Agreement, TA Operations and
all FE Locations and Freightliner shall have the remedies available to them with
respect to the sale and purchase of any Freightliner-Sourced Part and shall
undertake the liabilities and duties provided in the Uniform Commercial Code as
enacted into law and as validly in force in the State of Oregon on the date of
such sale and purchase.
6. TERM OF AGREEMENT.
6.1 TERM. This Agreement shall have an initial term of five years and
thereafter shall be terminable upon six months' advance notice given by either
party to the other. This Agreement shall also be terminable by either party in
accordance with Section 6.2 or by Freightliner in accordance with Section
8.4(c). Except as otherwise provided in Section 6.2 or Section 8.4(c), any
notice of termination may be given no earlier than the date six months prior to
the expiration date of the initial term and the effective date of termination
shall be the date six months' after the date of the giving of such notice. Until
an effective notice of termination is given by either party and the effective
date of termination is reached, this Agreement shall continue in full force and
effect.
6.2 TERMINATION UPON MATERIAL UNCURED BREACH. Notwithstanding any
provision of Section 6.1 apparently to the contrary, either party may terminate
this Agreement upon a material uncured breach of this Agreement by the other by
written notice of termination delivered by the nonbreaching party to the
breaching party not less than 90 days prior to the effective date of termination
specified in such notice. Except as hereinafter provided, any such notice of
termination shall be effective only if, no later than the giving of such notice
of
16
termination, the nonbreaching party shall also have given the breaching party
notice of the breach and an opportunity to cure within a reasonable cure period
of not less than 90 days. Notwithstanding the foregoing, however, this Agreement
shall instead be terminable upon 10 days' advance notice given by the
nonbreaching party if the breaching party defaults in payment (in which case the
10-day period shall serve as the cure period) or becomes subject to insolvency,
receivership or bankruptcy proceedings or makes an assignment for the benefit of
creditors.
6.3 RIGHTS AND OBLIGATIONS UPON TERMINATION. Termination of this
Agreement shall not operate as a cancellation of any indebtedness or other
payment obligation between Freightliner, on the one hand, and TA Operations or
any FE Location, on the other, but shall cause an acceleration of the payment
obligations owed by each to the other under this Agreement. In such event, each
party may treat all amounts then or thereafter owing to it by the other party or
parties hereto to be immediately due and payable (subject only to credits
required by law) and may exercise such lawful rights and remedies as it may have
against the other party or parties. Within 15 days after the effective date of
the termination of this Agreement, each party shall return to the other party
(or, in the case of TA Operations, shall cause each FE Location to return to
Freightliner), all materials supplied to the returning party by the other party,
including all manuals, microfiche, price lists, training programs, customer
lists and unused forms (other than any tools purchased from Freightliner or
Freightliner-Sourced Parts that have been purchased and are in inventory).
7. ARBITRATION.
7.1 HANDLING AND FILING OF CLAIMS; TIME LIMITS. Any claim, controversy,
protest or dispute (whether for damages, stay of action or otherwise) relating
to or arising from this Agreement or the relationship of TA Operations and
Freightliner, including any claim based on any local, state or federal statute,
any claim of breach of this Agreement or any claim related to the termination of
the Agreement, shall be settled by arbitration, subject to the procedures set
forth in this Section. To initiate a claim TA Operations or Freightliner must
file a written request for arbitration no later than 90 days following any
notice of termination of this Agreement if the claim relates to or arises out of
the termination of the Agreement or, in the case of any other claim, within 180
days after the date the party making the claim first becomes aware of the claim.
A written request to arbitrate, together with the appropriate filing fee, shall
be filed with the office of the American Arbitration Association in Chicago,
Illinois (the "FACILITATOR"), which shall then become the site of the
arbitration proceedings, unless otherwise agreed between the parties. Any
arbitration request shall state clearly and completely the nature of the claim
and its basis, the amount involved, if any, and the remedies sought.
7.2 EXCLUSIVE REMEDY. Arbitration shall be the sole and exclusive
remedy under this Agreement, and the decision and award of the arbitrator shall
be final and binding on both parties.
7.3 PROCEDURES. The arbitration will be conducted in accordance with
the rules and the procedures of the Facilitator then in effect, except as
modified by mutual agreement of the parties, and in compliance with the United
States Arbitration Act (9 U.S.C. Section 1, et seq.).
17
7.4 CHOICE OF ARBITRATOR. The arbitration shall be heard by a single
arbitrator mutually agreeable to the parties selected from a panel of
arbitrators. If the parties fail to reach agreement within 15 days of any
request to arbitrate, an arbitrator having appropriate qualifications in the
judgment of the Facilitator shall be named by the Facilitator from such panel in
accordance with its normal procedure.
7.5 ARBITRATOR'S AWARD. In no event may punitive damages be awarded in
any arbitration conducted pursuant to this Agreement. The decision and award of
the arbitrator shall be conclusive as to all matters covered thereby in all
other proceedings between the parties, their successors or assigns, and judgment
upon the award may be entered in any court of competent jurisdiction.
7.6 PAYMENT OF FEES. The parties agree to compensate the arbitrator
commensurate with the professional standing of the arbitrator and in accordance
with the procedures of the Facilitator. The compensation of the arbitrator, the
administrative fees and charges of the Facilitator and the other expenses of the
arbitration shall be borne equally by the parties, provided that in all cases
each party shall pay the fees and disbursements of its own legal counsel.
7.7 TIME PERIOD. Unless the parties specifically agree to the contrary,
the arbitration hearing shall be concluded not more than 180 days after the date
of a written request to arbitrate.
8. GENERAL PROVISIONS.
8.1 PARTIES NOT AGENTS OF EACH OTHER. Each party is an independent
contractor and the conduct of its business is within its discretion subject to
performance of its obligations under this Agreement. This Agreement does not
create an agency relationship between any of the parties hereto or on the part
of any FE Location, and nothing herein contained shall be construed or
interpreted to grant any authority to any party or any FE Location to commit or
bind another party hereto in any manner to any other person.
8.2 RIGHT OF SET-OFF. Subject to Section 2.4 with respect to warranty
claims and such specific terms of sale as may be agreed upon between the
parties, each party shall have the right to offset against any amounts then owed
by it under this Agreement such amounts, if any, as are then owed to it under
this Agreement by another party to this Agreement. Each party to any such offset
shall maintain records sufficient to establish the amount and timing of any such
offset.
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8.3 NOTICES. Any notice given by TA Operations to Freightliner or by
Freightliner to TA Operations under this Agreement shall be in writing and be
directed to the recipient party at the following address or to such other person
or address as an officer of the recipient party may have specified by notice
given in accordance with this Section:
If to Freightliner, to: Freightliner Corporation
4747 North Channel Avenue
Portland, OR 97217
PO Box 3849
Portland, OR 97208-3849
Telecopy No.: (503) 735-5999
Attention: James T. Hubler
with a copy to: Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204-1268
Telecopy No.: (503) 220-2480
Attention: Margaret B. Kushner
If to TA Operations, to: TA Operating Corporation
TA Franchise Systems, Inc.
c/o TravelCenters of America, Inc.
24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145-5634
Telecopy No.: (440) 808-3301
Attention: Edwin P. Kuhn, President and
C.E.O.
Michael Hinderliter, Senior
Vice President
Steven Lee, Vice President
and General Counsel
Couriered notices shall be deemed delivered when delivered as addressed.
Telecommunicated notices shall be deemed delivered when receipt is either
confirmed by confirming transmission equipment or acknowledged by the addressee
or its office. Personal delivery shall be effective when accomplished. Mailed
notice shall be deemed delivered 5 days after being deposited in the United
States Mail as certified or registered mail, postage prepaid, in an envelope
properly addressed to the person to whom notice is required to be directed in
accordance with this Agreement.
8.4 ASSIGNMENT. This Agreement and the rights and obligations hereunder
may not be assigned, delegated, sold, transferred or encumbered in whole or in
part by Freightliner or TA Operations without the prior written approval of the
other party. The foregoing prohibition on assignment without prior written
approval shall not apply, however, to any direct or indirect assignment of this
Agreement (including by merger) by TA Operations in connection with a Change of
Control (as defined in the Stockholders' Agreement); provided that, in the case
of any Change of Control that triggers the right of first refusal provided for
under Section 5 of the Stockholders' Agreement, (a) Freightliner shall have
first been given the opportunity in accordance with said Section 5 to exercise
its right of first refusal, (b) there shall have been no
19
effective exercise by Freightliner of such right of first refusal and (c)
Freightliner shall not have elected, by notice delivered to TA Operations prior
to the expiration of Freightliner's right of first refusal under said Section 5,
to terminate this Agreement (which termination shall be effective only in the
event a Change of Control transaction is consummated) effective as of the date
of the Change of Control.
8.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. The
parties anticipate that, over time, the terms and conditions applicable to FE
Locations will evolve and change as contemplated by this Agreement or as agreed
upon from time to time by the parties, and the parties will from time to time
amend this Agreement accordingly. However, any understanding, amendment,
modification, alteration or waiver not expressly set forth or provided for in
this Agreement shall not be valid or binding on the parties with respect to the
subject matter of this Agreement unless, in each instance, such understanding,
amendment, modification, alteration or waiver is expressed in a written
instrument executed by the duly authorized officers of Freightliner and TA
Operations, such instrument specifically refers to this Agreement and such
instrument specifically states an intent to amend, alter or modify this
Agreement. The following documents and any other material issued by Freightliner
in substitution for or in addition to the documents identified below shall be
deemed to be incorporated herein except as otherwise expressly provided herein
or as otherwise agreed to in writing by the parties from time to time and shall
be deemed to be amended for purposes of this Agreement when an amendment has
been duly executed on behalf of Freightliner and furnished to TA Operations in
the same manner required for notices from Freightliner to TA Operations: (a)
Freightliner Parts Price Lists; (b) Freightliner Warranty Policies; (c) Alliance
Policies and Procedures; and (d) Freightliner Service Manuals.
8.6 EACH PARTY TO BEAR OWN EXPENSES. Freightliner and TA Operations
will each bear its own expenses in connection with the preparation and
negotiation of this Agreement and all other documents effecting the transactions
contemplated by this Agreement.
8.7 WAIVER. The failure of either of Freightliner or TA Operations to
enforce, at any time or for any period of time, any provision of this Agreement
shall not be construed as a waiver of such provision or of the right of
Freightliner or TA Operations thereafter to enforce each and every such
provision.
8.8 GOVERNING LAW. This Agreement has been made in and shall be
construed and interpreted according to the substantive laws of the State of
Oregon without regard to choice of law rules.
8.9 SEVERABILITY. Any provision of this Agreement that in any way
contravenes any law of any relevant jurisdiction shall be deemed not to be a
part of this Agreement in such jurisdiction and shall not, because of such
contravention, be deemed to in any way invalidate this Agreement or any other
part thereof.
8.10 COMPLIANCE WITH LOCAL LAW. If the valid law of any jurisdiction
is applicable to the performance of any obligation or the exercise of any right
under this Agreement, the
20
obligation shall be exercised in accordance with such law to the extent, and
only to the extent, that such law shall make mandatory the performance of such
obligation or the exercise of such right other than in accordance with the
provisions of this Agreement. All the provisions of this Agreement shall be
construed in light of this Section.
8.11 TITLES. Designations and titles of the Articles and Sections
contained in this Agreement are for convenience only and in no way control,
alter or modify the meaning of the language used.
8.12 CONFIDENTIAL INFORMATION. Each party agrees that (a) all
information indicated as confidential and communicated to it by the other party,
including, in the case of communications by TA Operations, by any FE Location
(hereafter "Confidential Information"), shall be received in confidence and
shall be used and copied only for purposes of and in accordance with this
Agreement and (b) no such Confidential Information shall be disclosed to any
third party by the recipient or its employees or representatives without the
prior written consent of the party owning such Confidential Information, EXCEPT
as may be necessary by reason of legal, accounting or regulatory requirements
beyond the reasonable control of the recipient. Confidential Information shall
not include any information disclosed by one party to the other party hereunder
or developed hereunder that: (a) is publicly available at the time of disclosure
or development, or becomes publicly available after disclosure or development,
through no fault of the receiving party; (b) was developed by agents or
employees of the receiving or non-owning party independently of, and without
knowledge of or reliance on, the disclosed information; (c) is obtained by the
receiving or non-owning party outside of the performance of work hereunder
without any violation of the rights of the other party; or (d) was rightfully in
the receiving or non-owning party's possession prior to the time of disclosure,
if such Confidential Information was not obtained in confidence. Each party
shall take no less than such precautions as it takes with respect to its own
confidential and trade secret information, whether by instruction, agreement or
otherwise, to ensure the confidentiality of Confidential Information received
from the other. At a minimum, each party shall take reasonable steps to advise
its affiliates, employees and representatives of the confidential nature of the
Confidential Information and ensure that they abide by the restrictions in this
Section 8.12 on its use, reproduction and disclosure. The provisions of this
Section 8.12 shall survive termination of this Agreement for any reason. The
parties acknowledge that the violation of this Section 8.12 shall cause
irreparable injury for which there will be no adequate remedy at law and that
each party shall be entitled to preliminary and other injunctive relief against
any such violation, which injunctive relief shall be in addition to, and not in
lieu of, any other remedies or rights the party may have at law or in equity.
8.13 INTERPRETATION. All terms defined in the singular have the same
meanings when used in the plural and vice versa. The words "including,"
"includes" and "include" as used herein shall be deemed to be followed by the
words "without limitation" or "but not limited to" or words of similar import.
Unless the context otherwise requires, (a) any reference to an Article or
Section is a reference to an Article or Section of this Agreement, (b) the terms
"hereof," "herein," "hereto," "hereunder," and "herewith" and "this Agreement"
refer to this Agreement as a whole, (c) reference to any law or regulation is to
that law as amended or modified from time to time or to any corresponding
provisions of any succeeding law or regulation, (d) reference to an
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agreement or instrument is a reference to that agreement or instrument as
originally executed, and as modified, amended, supplemented and restated from
time to time, and to all exhibits and/or schedules thereto, and (e) accounting
terms have the meanings given to them by generally accepted accounting
principles.
IN WITNESS WHEREOF, FREIGHTLINER AND TA OPERATIONS HAVE EXECUTED THIS
FREIGHTLINER EXPRESS OPERATING AGREEMENT EFFECTIVE AS OF THE DAY AND YEAR FIRST
ABOVE WRITTEN.
FREIGHTLINER CORPORATION
BY /s/ JAMES L. HEBE
---------------------------------------------
TITLE: PRESIDENT
TA OPERATING CORPORATION,
DBA TRAVELCENTERS OF AMERICA
BY /s/ EDWIN P. KUHN
---------------------------------------------
TITLE: PRESIDENT & CHIEF EXECUTIVE OFFICER
TA FRANCHISE SYSTEMS, INC.
BY /s/ EDWIN P. KUHN
---------------------------------------------
TITLE: PRESIDENT & CHIEF EXECUTIVE OFFICER
22
<Page>
The Exhibits to the Freightliner Express Operating Agreement have
been omitted and will be supplementally furnished to the Securities and
Exchange Commission upon request.