Santa Barbara Freight Corp (“SBF” or “Carrier”), as an independent contractor in relation to Shipper, provides transportation services in intrastate and/or interstate commerce; and is duly qualified to operate as a motor common carrier, licensed by the Federal Motor Carrier Safety Administration, as evidenced by license number MC- 761581 (U.S. DOT number 2194435), and, to the extent necessary, by any state agencies having jurisdiction over the carrier services rendered hereunder.

1. Application of Terms and Conditions: These terms and conditions shall apply to motor carrier transportation of commodities within the scope of Carrier’s operating authority to, from and between locations designated by Shipper. This Agreement shall supersede any other agreement or arrangement between the parties relating to the transportation of commodities by Carrier for Shipper.
2. Rates and Charges: As full and complete compensation for the services to be provided hereunder, Shipper will pay Carrier according to the rates and charges set forth in the Schedule of Rates and Charges established by the Carrier from time to time, or those negotiated by Shipper and Carrier on a per-shipment basis and confirmed in writing by both parties. Changes to the rates and charges may be made, provided that such changes are made in writing and mutually agreed to and signed by authorized representatives of both parties.
3. Payment by Shipper to Carrier: Shipper shall compensate Carrier for transportation services performed under these terms and conditions in accordance with the effective schedule of rates and charges within 30 days of receipt by Shipper of Carrier’s invoice. There will be a monthly finance charge of 1.5% on all invoices 30 days overdue. 
4. Collection of Charges, Undercharges and Overcharges: Any claim by Carrier to recover any charges or undercharges for services performed hereunder shall be submitted to Shipper within 180 days of delivery or tender of delivery of the shipment or shipments with respect to which such charges or undercharges are claimed, or within the time prescribed by any applicable state or federal law, whichever is longer; and, provided that such claim has been timely submitted, any action or proceeding by Carrier against Shipper to recover such charges shall be commenced not more than 18 months after delivery or tender of delivery of the applicable shipment or shipments. Unless prohibited by applicable law, the expiration of either of said periods without the submission of a claim or commencement of an action or proceeding shall be a complete and absolute defense and time-bar to any such later-submitted claim or later- filed action or proceeding by Shipper, unless Carrier has expressly agreed in writing to waive such defense and time bar. Any claim by Shipper to   recover overcharges or duplicate payments for services performed hereunder shall be submitted to Carrier within 180 days of Shipper’s receipt of Carrier’s invoice for such charges; and, provided that such claim has been timely submitted, any action or proceeding by Shipper against Carrier to recover such charges shall be commenced not more than 18 months after Shipper’s receipt of Carrier’s applicable invoice.
5. Licenses, Equipment, Rules and Regulations: At all times during the term of this Agreement, Carrier shall, at its own expense:

• Maintain such operating licenses and permits as are required by state or federal authorities with respect to the transportation services   performed hereunder;
• Maintain such insurance coverage as is required pursuant to section 7 below.
• Furnish for use in the performance of the services for Shipper identifiable and roadworthy trailers and tractors which are in good and efficient   condition, both as to operation and appearance;
• Furnish all fuel, oil, tires, supplies, parts, and any other equipment required for the safe, timely and efficient operation and maintenance of such vehicles and equipment;
• Utilize in the operation of such vehicles and equipment fully qualified employees or independent contractors;
• Pay all applicable payroll taxes and costs for unemployment insurance, pensions, workers’ compensation, Social Security, and related obligations with respect to the persons engaged in the performance of such transportation services;
• Provide all permits, licenses, tolls and other expenses required by local, state or federal authorities with respect to such transportation  services;
• Comply with applicable rules and regulations, including, without limitation, those of the United States Department of Transportation, the Federal Motor Page 4 of 11 Motor Carrier Transportation Agreement Carrier Safety Administration, the United States Federal Drug Administration’s Food Safety Modernization Act and related rules, and any state agency having jurisdiction over Carrier’s services; and Maintain a safety rating other than Unsatisfactory or Unfit under the Compliance, Safety, Accountability (CSA) Motor Carrier Safety Measurement System (or other rating equivalent to Unsatisfactory or Unfit, as such System may change; and provide Shipper with written notification within five days of receipt of any Unsatisfactory or Unfit safety rating (or equivalent under a new or revised system).
  
  6. Indemnity: Shipper shall at all times (both during and after the term hereof) defend, indemnify and hold harmless Carrier and its agents and employees against and from any and all claims or actions of every nature or character asserted against Carrier, its agents and/or employees by any person or entity stemming from or arising out services performed by Carrier under this Agreement and/or harm otherwise caused by and resulting from Carrier’s or its employees’ or agents’ negligence or intentional misconduct or violation of applicable laws or regulations, including but not limited to claims or actions for personal injury, death, workers’ compensation, damage to equipment or property (except with respect to cargo loss, damage or delay, Carrier’s responsibility for which is governed by section 9 below) and/or any fines or penalties assessed by a governmental agency or other law enforcement. 
  
  Shipper shall at all  times (both during and after the term hereof) defend, indemnify, and hold harmless Carrier and its employees and agents from and against all claims or actions (including, without limitation, reasonable legal fees) caused by and resulting from the negligence or intentional misconduct of Shipper, its employees, or agents, or Shipper’s or its employees’ or agents’ violation of applicable laws or regulations.
  
  In the event any such claims or actions arise out of harm caused by the joint and concurrent negligence of the parties, or the parties and a third   party, the indemnity obligations for such claims shall be borne by each party in proportion to its degree of fault.
  
  Any indemnified party under this section shall promptly tender the defense of any claim to the indemnifying party and shall provide reasonable  assistance and information as requested by the indemnifying party. 

7. Insurance: Carrier shall, at all times during the term of this Agreement, at its own expense, maintain the following types and minimum amounts of coverage:

• Commercial auto liability insurance in the minimum amount of $1,000,000.00 or in the amount required by law, whichever is greater;
• General liability insurance in the minimum amount of $1,000,000.00 or in an amount required by law, whichever is greater;
• Cargo insurance in the minimum amount of $250,000.00 per occurrence for loss of or damage to property carried on any one motor vehicle, or in an amount required by law, whichever is greater; and
• Workers’ compensation insurance as required by law. 

Carrier shall furnish at Shipper’s request proof of such insurance in the form of current Certificates of Insurance and/or other forms prescribed by applicable state or federal regulations. 

8. Bill of Lading: The terms, conditions, and provisions of any bills of lading used for the transportation of any shipments shall be subject and subordinate to these terms and conditions. 

9. Liability for Freight Loss, Damage or Delay: Carrier’s responsibility for loss of, damage to or delay in delivery of (i.e., delivery other than with reasonable dispatch or, if a date-certain delivery commitment is made by Carrier at Shipper’s request, delivery after such date-certain) any commodities transported hereunder shall be governed by the provisions of 49 U.S.C. § 14706 (known as the Carmack Amendment to the Interstate Commerce Act), that is, Carrier shall be strictly liable to Shipper for loss, damage or delay as defined herein occurring while goods are in the possession or under the control of Carrier, provided that claims for loss, damage or delay are submitted to Carrier in writing within nine (9) months after delivery thereof or, in case of failure to make delivery, within nine (9) months after a reasonable time for delivery has elapsed and that the loss, damage or delay is not excused pursuant to the Force Majeure provisions set forth in Section 10 below. If all or any portion of a shipment is lost or damaged, and Carrier is liable for such loss or damage pursuant to the preceding paragraph, Carrier shall pay the lesser of (a) Shipper’s cost of manufacture or purchase for that portion of the shipment lost or damaged and (b) $200 per case (limitation of liability).

If delivery of a shipment is delayed (as defined above) and Carrier is liable for such delay pursuant to the first paragraph of this section, Carrier shall be liable to Shipper for delay damages, measured by the lesser of (a) the amount of any penalties or other losses incurred by Shipper for late delivery, pursuant to contractual provisions with Shipper customers and (b) $400 (limitation of liability).

Carrier shall promptly handle and endeavor to resolve in good faith any claims which are submitted by Shipper for loss of, damage to or delay in delivery of to any commodities transported pursuant to this Agreement.

Any action at law for loss, damage or delay shall be instituted by the claimant against Carrier no later than two years from the date on which Carrier has given written notice to the claimant that Carrier has declined such claim or any part thereof.

10. Force Majeure: No delay or failure in performance by either party shall constitute default under this Agreement or give rise to any claim for damages if such delay or failure (a) results from any of the following causes (collectively referred to as “Force Majeure”) and (b) could not reasonably have been anticipated by and is beyond the reasonable control of, and without fault or negligence of, the party whose performance is so affected: acts of God; hoods, storms or other unusually severe weather; earthquakes; changes in law; acts of government; acts of the public enemy; war, rebellion, riot, terrorism or civil disturbance; strikes or labor disputes; epidemic, pandemic or other public health emergency; power failures; or fires, explosions, or other such catastrophic events. If either party considers that its performance is affected by Force Majeure, it shall promptly give written notice to the other party, stating pertinent details; and shall do all things reasonably possible to remove the cause, mitigate its effects and, if possible, resume performance.

11. Independent Contractor: In the performance of the transportation services provided hereunder, Carrier shall at all times be an independent contractor in relation to Shipper, exercising exclusive control, supervision, and direction over the manner in which the services are provided, the persons engaged in providing the services and the equipment used in providing such services

12. Carrier’s Services Non-Delegable without Express Consent: Carrier shall perform all services to be provided hereunder and shall not, without the express written consent of Shipper, delegate or assign its duties under this Agreement or broker, interline, interchange, transfer or subcontract any shipment to any carrier or other entity not named in these terms and conditions. If Carrier delegates or assigns its duties under or brokers, interlines, interchanges, transfers or subcontracts any shipment, whether with our without Shipper’s express consent, Carrier (i) shall nevertheless remain responsible to Shipper hereunder, as if Carrier had performed the services itself, for any loss, damage or delay or for any other obligation of Carrier included hereunder; (ii) shall pay all transportation charges for any such service(s); and (iii) shall indemnify and defend Shipper from and against any act or omission of such other carrier or other entity and all claims or causes of action of any kind made by any such other carrier or other entity or any other person or entity in connection with the other carrier’s or other entity’s provision of services. In no event shall Shipper be liable for the payment of any fees or charges related to such services unless expressly included agreed to by Shipper on a per shipment basis and confirmed in writing by Shipper.

13. Confidentiality: Carrier and Shipper shall strictly limit disclosure of information protecting the confidentiality of all proprietary and non-public information exchanged by the parties, including, but not limited to, the names of suppliers, vendors, and customers. Prior to any disclosure by either party of any such information to any person or entity other than corporate parents, subsidiaries or affiliates, auditors or attorneys of the parties,  the disclosing party shall provide the other party with at least ten days’ written notice to enable such party to object to such disclosure. If such an objection is received in writing, no such disclosure shall be made.