EXHIBIT 10.93
DEDICATED SERVICE AGREEMENT
This Dedicated Service Agreement (this "Agreement") is made and
entered into as of April 22, 2002 between GOODY'S FAMILY CLOTHING, INC. and
GOODY'S MS, L.P. (collectively, "Goody's") and LANDAIR TRANSPORT, INC.
("Landair"):
W I T N E S S E T H:
WHEREAS, Goody's, in connection with the operation of its business,
has certain distribution needs and requirements for dedicated motor carriage
transportation and related services and desires to utilize Landair on a
non-exclusive basis to perform such services; and
WHEREAS, Landair, as an independent contractor, desires to furnish
distribution services, including dedicated motor carrier services to Goody's
for the transportation of general commodities and represents that it is a duly
qualified contract motor carrier; and
WHEREAS, Landair desires and agrees to provide the transportation and
related services required by Goody's;
NOW, THEREFORE, in consideration of the premises and the mutual
agreement herein contained, the parties hereto agree as follows:
1. SERVICES: Goody's agrees to tender to Landair property for
transportation by Landair in interstate and/or intrastate commerce within the
areas of the United States indicated on Schedule 1. Under this Agreement,
Landair will dedicate equipment and services as indicated by the attached
Schedules, Exhibits and Addenda, each of which is incorporated by reference
herein and made a part of this Agreement. The terms of this Agreement shall
apply to all shipments tendered by Goody's and transported by Landair. Every
shipment tendered hereunder shall be deemed to be part of a continuous series
of shipments tendered to Landair as a motor contract carrier during the term of
this Agreement and shall be subject only to the terms of this Agreement and to
provisions of all laws.
2. TERM: This Agreement shall remain in effect for an initial
term commencing on April 22, 2002, and ending on June 30, 2004 (the "Initial
Term"). Thereafter this Agreement shall automatically extend for 2 additional
1-year terms on the same terms and conditions, excepting the rates, charges and
provisions of Schedule 3; provided, however, either party may cause this
Agreement to cease any such automatic extension(s) by giving prior written
notice to the other at least 120 days before the end of the Initial Term, or
subsequent extended 1-year term, as applicable. In the event Goody's elects to
terminate this Agreement at the conclusion of the Initial Term or thereafter,
Goody's understands and agrees that the provisions in the last paragraph of
Section 3 hereof shall apply. Nothing in this Section 2 shall be construed as
limiting, abridging or superseding any right of cancellation or termination of
this Agreement as may be provided for elsewhere in this Agreement.
3. DEDICATED SERVICES AND EQUIPMENT: Goody's understands that
based upon its identified needs for the services provided under the terms of
this Agreement, Landair will procure and identify equipment, drivers and other
resources that are required to meet the service requirements under this
Agreement. Landair and Goody's agree that the services provided in
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accordance with this Agreement are designed to meet the distinct needs of
Goody's and some of these distinct needs include, but are not limited to, the
following:
(a) Rates, charges and rules negotiated between parties
and reduced to written form in the Exhibits, Addenda
and Schedules attached hereto and made a part
hereof, which can be changed only by mutual written
consent of the parties;
(b) Landair shall provide Goody's with written notice of
any adjustments to the rates listed in Schedule 3 at
least 145 days prior to the expiration date of the
Initial Term, or extended term, if applicable; and
(c) The services provided in accordance with this
Agreement by Landair will be performed through the
use of dedicated equipment.
In exchange for the provision by Landair of the dedicated handling
equipment set forth on Schedule 2 (the "Dedicated Handling Equipment"), Goody's
agrees that in the event Goody's, upon written notice of non-renewal as
provided in Section 2, terminates this Agreement at the end of the Initial
Term, then Goody's shall, or shall cause its designated vendor to purchase from
Landair all of such Dedicated Handling Equipment for $89,723. Further, Goody's
agrees that in the event Goody's, upon written notice of non-renewal as
provided in Section 2, terminates this Agreement on or before June 30, 2005,
then Goody's or its designated vendor shall purchase from Landair all of such
Dedicated Handling Equipment for $44,862. In the event such termination by
Goody's is due to Landair's breach of this Agreement, or occurs after June 30,
2005, Goody's shall not have any obligation to purchase the Dedicated Handling
Equipment. In the event of the purchase of such Dedicated Handling Equipment,
Landair shall, in exchange for Goody's payment, deliver the Dedicated Handling
Equipment to Goody's with (i) an itemized invoice listing the Dedicated
Handling Equipment; (ii) an unconditional xxxx of sale listing the Dedicated
Handling Equipment and representing that it is free and clear of all liens and
encumbrances and that all taxes are paid; and (iii) a written certificate
acknowledging that the Dedicated Handling Equipment is in useable condition,
normal wear and tear excepted, and assigning all warranties to such Dedicated
Handling Equipment.
4. PAYMENT: As full compensation for the services provided by
Landair pursuant to the terms and conditions of this Agreement, Goody's shall
pay Landair in accordance with the rates, charges and provisions appearing in
Schedule 3 attached hereto. Rates and charges set forth on Schedule 3 will
apply on prepaid shipments. Any and all provisions, rates, rules, charges and
other terms and conditions of said Schedule 3 are to be considered by the
parties as part of this Agreement as of the effective date of this Agreement,
and all subsequent modifications, changes and alterations of such Schedule 3,
as may be negotiated between Goody's and Landair and mutually agreed to by them
must be in writing and shall thereafter become a part of this Agreement.
Landair agrees to invoice Goody's on a weekly basis (with weekly adjustment
invoices, if any, showing diesel fuel rates per the Gulf Coast Region Index and
the mileage for the previous week with documented freight bills in
substantially the form attached hereto as Exhibit A) and Goody's agrees to
issue payment for the services provided under the terms of this Agreement
within 15 days from receipt of Landair's correct invoice.
5. INDEPENDENT CONTRACTOR: Landair shall perform the services
hereunder as an independent contractor and shall have exclusive control and
direction of the persons operating
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the equipment or otherwise engaged in such transportation services. Landair
assumes full responsibility for the acts and omissions of such persons and,
when applicable, shall have exclusive liability for the payment of local, state
and federal payroll taxes or contributions or taxes for unemployment insurance,
workers' compensation, old age pensions or other social security and related
protection with respect to the persons engaged in the performance of such
transportation services and agrees to comply with all applicable rules and
regulations pertaining thereto. Landair, in the performance of its duties and
responsibilities under this Agreement, shall employ in the operation of the
equipment only competent, able and legally licensed personnel, with the costs
and expenses associated with the employment of such persons being the cost and
expense of the Landair; such personnel shall maintain a proper appearance and
uniform.
6. OPERATING EXPENSE AND EQUIPMENT DAMAGE: Landair shall bear
the costs and expenses of the furnishing of all fuel, fuel taxes and
surcharges, oil, tires and other parts, supplies and equipment necessary or
required for the safe operation and maintenance of the equipment, except as
otherwise provided herein. Landair shall bear all expenses, including the
expense of road service and repair, in connection with the use and operation of
the equipment (including, without limitation, insurance premiums and
highway/road use taxes) and shall bear the cost and expense of maintaining the
equipment in good repair, and mechanical condition, except as otherwise
provided herein. Goody's agrees to reimburse Landair for the cost of any
repairs resulting from damage caused by equipment used when loading and/or
unloading, provided that Goody's or its consignee is proven to be responsible
for said damage and is immediately notified of the damage. Landair agrees to
reimburse Goody's for the cost of any repairs resulting from damage caused by
equipment when loading/unloading/delivering, provided that Landair or its
affiliates is proven to be responsible for said damage and is immediately
notified of the damage. Payments by Goody's to Landair or Landair to Goody's
(as applicable) pursuant to the provisions of this Section 6 shall be made
within 60 days following receipt of the other party's invoice and supporting
documentation of the claim.
7. PERFORMANCE: Landair shall transport and carry said goods
without delay caused by anything within Landair's control and to expedite
shipments when necessary under the direction of Goody's in accordance with
Exhibits B and C and Addendum A. Landair shall strictly adhere to Goody's
delivery schedule and shall have replacement drivers available (if necessary)
within 4 hours of any problem with Landair's designated driver. Transportation
of property pursuant to the terms and conditions of this Agreement and Exhibits
B and C and Addendum A hereto, shall include a written receipt, in the form of
a delivery receipt as set forth in Exhibit D hereto, or such other form as
agreed to and signed by the parties, showing the kind and quantity of
commodities received and delivered by Landair. Such receipts shall be evidence
of receipt of such commodities by Landair in good order and condition based on
Goody's' load and count. Landair shall maintain an on-time service rating of
96% as measured on a calendar quarter basis (the "On-Time Service Rating"). The
terms and conditions outlined in this Agreement shall take precedence over all
other terms and conditions including those provisions noted on the xxxx of
lading, either written or inferred. Landair has no right or claim to Goody's
shipments and Landair shall not file a lien on or against any of Goody's
shipments.
8. LICENSES AND PERMITS: Landair shall procure and, during the
term of this Agreement, maintain at its expense, all licenses, certificates and
permits required by any local, state or federal government agency for such
contract transportation services and will comply with all laws and regulations
applicable thereto. Landair shall notify Goody's in writing immediately in the
event of any suspension, cancellation, termination, withdrawal, modification
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or transfer of the motor contract carrier permit. Landair represents and
warrants that it has all the permits and licenses necessary to perform the
services described in this Agreement and that there are no outstanding liens,
claims or penalties relative to such permits or licenses.
9. INSURANCE: Landair, at its expense, shall maintain in force
such insurance to cover equipment furnished, or service performed (including,
without limitation, the service described in Section 21), as is required by the
regulations of all governmental bodies and agencies, but not less than the
following minimum limits. Landair further agrees to furnish Goody's
certificates showing evidence of such insurance coverage on or before the
commencement of the Initial Term and thereafter upon Goody's request. Landair
shall immediately provide Goody's with notice of any significant changes in its
insurance coverages regarding this Agreement. Such policies shall name Goody's
as an additional insured (and as a loss payee regarding the cargo) and shall
contain a waiver of subrogation releasing Goody's from any claims.
Notwithstanding the provisions of this Section 9 to the contrary, Landair shall
list Goody's as an additional insured under its policies of insurance (and as a
loss payee regarding the cargo), but not to the extent that it would preclude
Landair from asserting its rights against Goody's under its policy of insurance
arising from any claims, suits, costs, damages, expenses and liabilities,
including without limitation, reasonable attorneys' fees, arising from personal
injury, death and property damage resulting from the negligence or acts of
Goody's, its agents, servants, employees, invitees or related third parties.
Certificates shall be delivered to a person designated by Goody's at the
address set forth in Section 16 and shall provide 30 days prior written notice
to Goody's before such insurance may be canceled or altered.
Landair confirms that it has and shall maintain employee theft
coverage for up to $250,000 and the cargo liability coverage set forth below.
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COVERAGE MINIMUM LIMITS
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Workers' Compensation Statutory
Employer's Liability $250,000
Commercial Automobile Liability
Owned, Non-Owned & Hired Vehicles:
Bodily Injury $5,000,000 Combined Single Limit
Property Damage Each Accident
Commercial General Liability,
including Contractual Coverage
for this Agreement (including Section 21)
and Contractor's Protective Coverage
Bodily Injury $5,000,000 Combined Single Limit
Property Damage Each Accident
Cargo Liability $1,000,000 Per Vehicle
Landair shall maintain umbrella excess general liability coverage for
losses up to $25,000,000 during the term of this Agreement. Goody's understands
and agrees that it will not be named as an additional insured under the excess
policy.
10. MEASURE OF LOSS: The measurement of the loss, damage or
injury shall be Goody's' cost plus $0.09 per item ("damages") applicable to the
kind and quantity of commodities so lost, damaged or destroyed, including
shortages. Landair's liability for loss of product shall be limited to
$1,000,000 per trailer and, the liability relating to shortages shall be
limited to shortages which are documented and resulting from a broken seal upon
delivery inspection (or other violation of Exhibits B or C of this Agreement)
by Goody's. Shortages shall be timely reported to the other party as set forth
in the Schedules and Exhibits hereto. Landair shall not be responsible for
consequential damages resulting from commodity loss. Goody's shall deduct from
its damages the reasonable salvage value determined by Goody's (or Goody's
underwriter) of any damaged commodity, if applicable. Payments by Landair to
Goody's pursuant to the provisions of this Section 10, there being no remaining
issue of liability, shall be made within 30 days following receipt by Landair
of Goody's' invoice and supporting documentation, including salvage value
documentation, if any, for the claim.
11. CLAIMS PROCESSING: The parties to this Agreement acknowledge
the application and controlling status of provisions of Part 1005 of Title 49,
Code of Federal Regulations, and 49 U.S.C. Section 11707 (c) with regard to
claims and actions for loss or damage to commodities transported pursuant to
the terms and conditions of this Agreement, except to the extent modified by
this Agreement. All claims for recovery by Goody's and/or consignee as provided
herein and as to each shipment, must be filed with Landair at the address
listed in Section 16 within 9 months of the date of delivery or tender of
delivery of such shipment or if not tendered or delivered must be filed within
9 months of the date when delivery or tender of delivery of such shipment
reasonably should have been made.
12. INDEMNIFICATION: Except to the extent proximately and
primarily caused by the acts or omissions of Goody's, Landair shall indemnify
and hold harmless Goody's (including its officers, directors, employees and
related entities) from and against all loss, damage, fines,
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expense, actions and claims for injury to persons (including injury resulting
in death) and damage to property including Goody's' trailers utilized by
Landair where such loss, damage or injury is proximately caused by acts or
omissions of Landair, its agents or employees, and arising out of or in
connection with Landair's discharge of duties and responsibilities as specified
in this Agreement. Subject to the terms of Section 10 of this Agreement,
Landair shall be liable to Goody's for loss, damage or injury occurring to the
commodities while in the possession or under the control of Landair hereunder
or resulting from Landair's performance or failure to perform the services
provided for in this Agreement.
13. LEGAL IMPAIRMENT: In the event the Federal Highway
Administration, or any other federal agency or department, or any state
government, agency or department, shall by regulation, order or statute,
directly or indirectly, require or prescribe the establishment of any rules or
provisions, inconsistent with terms of this Agreement and which creates a
material change in the costs or operations of this Agreement, then, in such
event, Landair shall promptly notify in writing Goody's thereof, and Goody's or
Landair may, without prejudice to any other right or remedy, terminate this
Agreement after giving at least 30 days written notice of such termination.
14. FORCE MAJEURE: Neither Landair nor Goody's shall be liable
one to the other for default in the performance or discharge of any duty or
obligation under this Agreement where prevention or delay in performance is
caused by an Act of God, public enemy, public authority, or events beyond the
reasonable control of Goody's or Landair. The party invoking this force majeure
provision is responsible for all fixed costs associated with this Agreement.
During force majeure by Landair, Goody's will not be subject to any charges
associated with this Agreement and will have the right to use other means and
other motor carriers to transport its goods. In the event that both Goody's and
Landair are rendered unable to perform under the conditions of force majeure at
the same time, all charges, including fixed cost, will be suspended until such
time that the force majeure condition is lifted.
15. DEFAULT: Any failure by either party to perform its
respective obligation(s) under this Agreement for more than thirty (30) days
(for a non-monetary breach excepting On-Time Service Rating) or ten (10) days
(for a monetary breach) after receipt of written notice from the other party
(the "non-defaulting party") describing such breach shall constitute a default.
In such event, the non-defaulting party shall have the right to terminate this
Agreement and to exercise all rights and remedies at law or in equity against
the other party.
If Landair's On-Time Service Rating is less than 90% during any
calendar quarter (a "Critical Quarter Rating Problem"), then Landair shall
diligently commence to improve the On-Time Service Rating to 96% or higher
within thirty (30) days after any such Critical Quarter Rating Problem and if
Landair fails to improve the On-Time Service Rating to 96% or higher within
such thirty (30) day period, then Goody's shall have the right to terminate
this Agreement and to exercise all rights and remedies at law or in equity
against Landair.
If Landair's On-Time Service Rating is 90% or higher and less than 96%
during any calendar quarter (a "Material Quarter Rating Problem"), then Landair
shall diligently commence to improve the On-Time Service Rating to 96% or
higher within sixty (60) days after any such Material Quarter Rating Problem
and if Landair fails to so improve the On-Time Service Rating to 96% or higher
within such sixty (60) day period, then Goody's shall have the right to
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terminate this Agreement and to exercise all rights and remedies at law or in
equity against Landair.
16. NOTICES: Any notice given by either party to the other under
this Agreement shall be considered as having been properly provided upon such
notice being presented by a form of receipted delivery, including but not
limited to certified mail; Federal Express; or UPS.
As to Goody's: As to Landair:
Xxxxx X. Xxxxxxxx - VP and General Counsel Xxxx X. Xxxxx - President
Goody's Family Clothing, Inc. Landair Transport, Inc.
000 Xxxxx'x Xxxx X.X. Xxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Physical Address:
000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
With a copy to:
Xxxxx Xxxxxxx
Goody's Family Clothing, Inc.
000 Xxxxx'x Xxxx
Xxxxxxxxx, XX 00000
With a copy to:
Xxxx Xxxxxx
Goody's Family Clothing, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
17. CONFIDENTIALITY PROVISION: Neither party may disclose the
terms of this Agreement to a third party (excepting the respective external
accountants, auditors and attorneys for each party) without the written consent
of the other party except (i) as required by law or regulations; (ii) when
disclosure is made to its parent, subsidiary or affiliated companies; or (iii)
to facilitate equipment financing or to facilitate the rating and/or auditing
of transportation charges by an authorized agent and such agent agrees to keep
the terms of this Agreement confidential.
18. CONTROLLING LAW: The provisions of 49 U.S.C. Section 11706
(a) and (b) and as may be amended from time to time, shall be a part of this
Agreement as if set forth in full herein and shall be applied to this Agreement
in the same manner and shall have the same force and effect as if said Section
by its terms were applicable to Landair and Goody's. The provisions of this
Section 18 shall survive termination, expiration or cancellation of this
Agreement. This Agreement shall be construed in accordance with the laws of the
State of Tennessee.
19. ENTIRE AGREEMENT: This Agreement, including all Schedules and
Exhibits to this Agreement as identified herein, constitute the entire
agreement of the parties with reference to
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the subject matter hereof, and may not be changed, waived or modified except by
written agreement signed by both parties hereto specifically stating that such
writing is an amendment to this Agreement.
20. ASSIGNMENT: There shall be no assignment or transfer, in
whole or in part, of any right, duty, responsibility or obligation contained in
this Agreement, including the right to receive payments, unless such assignment
or transfer is agreed to by both parties in writing, which consent will not be
unreasonably withheld.
21. WAREHOUSE LOGISTICS, LLC. Goody's consents, understands and
agrees that Landair will enter into an agreement with Warehouse Logistics, LLC
("Warehouse Logistics"), a Tennessee limited liability corporation co-owned by
two principals of Landair's parent company, for the purposes of performing
certain deconsolidation services under this Agreement as set forth on Schedule
3 hereto. Notwithstanding the Warehouse Logistics services to be performed in
accordance with this Agreement or the agreement between Landair and Warehouse
Logistics: (i) Landair shall remain fully and primarily responsible for the
deconsolidation services to be provided under this Agreement to the same extent
as if such deconsolidation services were performed by Landair; and (ii) all of
Landair's obligations, representations and liabilities to Goody's are direct
and unconditional as to all of the deconsolidation services to be performed by
Warehouse Logistics under this Agreement.
22. RIGHT TO AUDIT/INSPECT. As a condition to the agreement
between Landair and Warehouse Logistics described in Section 21, Landair
represents that Goody's has the right at any time to inspect Warehouse
Logistics' warehouse at 310 T. Xxxxx Xxx Drive in Greeneville, Tennessee.
Goody's shall likewise have the right upon 5 days notice, to review and/or
audit Landair's (including Warehouse Logistics) books and records relative to
this Agreement.
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IN WITNESS WHEREOF, Goody's and Landair have executed this Agreement
as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Xxx Xxxxxx
Its: Senior Vice President
LANDAIR TRANSPORT, INC.
By: /s/ Xxxx X. Xxxxx
Its: President
GOODY'S MS, L.P.
By: TREBOR OF TN, INC.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
Its: Vice President
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