____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 2, 1996
AMERICAN PRESIDENT COMPANIES, LTD.
(Exact name of registrant as specified in its charter)
Delaware 1-8544 94-2911022
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1111 Broadway, Oakland, California 94607
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (510) 272-8000
____________________________________________________________________________
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AMERICAN PRESIDENT COMPANIES, LTD. AND SUBSIDIARIES
Item 2. Acquisition or Disposition of Assets
American President Companies, Ltd. (the "company"), APL
Land Transport Services, Inc. ("APLLTS"), a wholly owned
subsidiary of the company, and Hub Group, Inc. (OHubO) entered
into an agreement dated as of May 2, 1996 to sell to Hub the
rights to service certain domestic intermodal customers of
APLLTS for approximately $8 million in cash and notes. The
purchase price is subject to downward adjustment based upon the
results of a financial audit being performed by the companyOs
independent public accountants. Subject to such adjustment, if
any, the company will realize a pretax gain of approximately $7
million. In addition, APLLTS and Hub entered into a 10-year
agreement whereby APLLTS will provide stacktrain services to
Hub. Revenues related to the servicing rights sold to Hub
represented approximately 6% of the company's consolidated
revenues in 1995.
Item 7. Financial Statements and Exhibits
(b) (1)Pending the results of the audit referred to in Item 2
above, the company has not yet determined whether the
servicing rights sold to Hub constitute a "business"
that is "significant" with respect to the company within
the meaning of Instruction 4 to Item 2 of Form 8K and
Rule 11-01 of Regulation S-X. Pro forma financial
information, if required, will be filed by amendment to
this Form 8-K as soon as practicable, but not later than
60 days after the date of this report.
(c) Exhibits
Exhibit No. Description of Document
____________________________________________________________________________
2.1 Purchase Agreement as of May 2, 1996, by and among Hub
Group, Inc., American President Companies, Ltd. and APL
Land Transport Services, Inc.*
* Application to be filed with the Securities and Exchange
Commission, pursuant to Exchange Act Rule 24b-2, for
confidential treatment of certain portions of this
exhibit.
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN PRESIDENT COMPANIES, LTD.
Dated: May 17, 1996 By /s/ Timothy J. Windle
Timothy J. Windle
Assistant Secretary
* Application to be filed with the Securities and
Exchange Commission, pursuant to Exchange Act Rule 24b-
2, for confidential treatment of certain portions of
this exhibit.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of this 2nd day of May, 1996, by and among
Hub Group, Inc., a Delaware corporation ("Hub"), American
President Companies, Ltd., a Delaware corporation ("APC"),
and APL Land Transport Services, Inc., a Tennessee
corporation and a wholly-owned subsidiary of APC ("APL").
WHEREAS, Hub and APC have entered into a Letter
Agreement dated April 16, 1996 (the "Letter Agreement")
providing for, among other things, the sale by APC and the
purchase by Hub of certain customer accounts;
NOW THEREFORE, in consideration of the foregoing and of
the mutual agreements set forth herein and in the Letter
Agreement and the Stacktrain Commitment Agreement (as
defined herein), and intending to be legally bound hereby,
the parties agree as follows:
Section 1 Definitions.
"Affiliate" shall mean, with respect to any specified
person, any other person which, directly or indirectly,
controls, is under common control with, or is controlled by,
such specified person.
"APL-DDS" shall mean American President Lines Domestic
Distribution Services, a division of APL.
"APL-SS" shall mean APL Stacktrain Services, a division
of APL.
"Acquired Accounts" shall mean the customers of APL-DDS
listed on Schedule A to this Agreement, which includes the
Retained Business.
"Best Efforts" shall mean the efforts that a
commercially prudent person (whether an individual,
corporation, partnership or other entity) desirous of
achieving a result as expeditiously as possible would use in
similar circumstances.
"Closing" shall mean the consummation of the
transactions contemplated hereby on the Closing Date.
"Closing Date" shall mean the date hereof.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Event of Default" shall have the meaning set forth in
Section 7.1.
"Financial Statements" shall have the meaning set forth
in Section 5.1.
"Letter Agreement" shall have the meaning set forth in
the Recitals.
"Note" shall have the meaning set forth in Section
2.4.2.
"Retained Business" shall mean the customers of APL-DDS
listed on Attachment A to the Stacktrain Commitment
Agreement.
"Revenue Deficiency" shall mean the amount (if any) by
which the revenue of APL-DDS for the 1995 fiscal year as
shown on the Financial Statements is less than the revenue
of APL-DDS for its 1995 fiscal year as shown on the
financial statements delivered or made available to Hub in
connection with Hub's evaluation of the transactions
contemplated by this Agreement and the Stacktrain Commitment
Agreement. If the Revenue Deficiency is less than 2 percent
of the revenue of APL-DDS for the 1995 fiscal year, then the
Revenue Deficiency shall be deemed to be zero.
"Revenue Deficiency Adjustment" shall mean the product
of (i) $8,000,000 multiplied by (ii) the quotient of (x) the
Revenue Deficiency divided by (y) the revenue of APL-DDS for
its 1995 fiscal year as shown on the financial statements
delivered or made available to Hub in connection with Hub's
evaluation of the transactions contemplated by this
Agreement and the Stacktrain Commitment Agreement.
"SEC" shall mean the Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Stacktrain Commitment Agreement shall mean the
Transportation Agreement, dated April 1, 1991, between APL
and Hub, as amended by Amendment A to Transportation
Agreement dated May 1, 1996 and Second Amendment to
Transportation Agreement dated May 2, 1996.
"Triparty Agreements" shall mean those agreements
between APL-DDS, APL-SS and their customers.
Section 2 Sale and Purchase.
2.1 Purchase of the Acquired Accounts. Subject to the
terms and conditions of this Agreement and the Stacktrain
Commitment Agreement, APC hereby sells, assigns, conveys,
transfers and delivers to Hub all of its rights with respect
to the Acquired Accounts and Hub hereby agrees to purchase,
acquire and take assignment and delivery of all of APC's
rights with respect to the Acquired Accounts.
2.2 Non-Assumption by Hub. Notwithstanding anything
contained in this Agreement to the contrary, APC and APL
acknowledge and agree that other than the Triparty
Agreements, Hub is not assuming any assets, liabilities or
obligations of APC, APL or any of their respective
Affiliates, including, without limitation, any contracts or
contractual obligations, fixed assets, accounts payable,
accounts receivable, overhead costs or employees relating to
the Acquired Accounts.
2.3 Assignments. APC agrees that, within 10 days from
the date hereof, it will deliver to Hub all contracts and
other documents related to the Triparty Agreements.
2.4 Purchase Price. In consideration for the sale of
the Acquired Accounts and the agreements of APC contained
herein and in the Stacktrain Commitment Agreement, Hub shall
deliver to APC at the Closing the following:
2.4.1 A check in the amount of $2,000,000; and
2.4.2 Three promissory notes issued by Hub in the
form of Schedule B hereto and as described below (each,
a "Note"), each in a principal amount equal to
$2,000,000. Interest and principal on the first Note
shall be due and payable 12 months from the Closing
Date, interest and principal on the second Note shall
be due and payable 24 months from the Closing Date and
interest and principal on the third Note shall be due
and payable 36 months from the Closing Date. Hub may
pre-pay any of the Notes at any time without penalty.
The Notes shall bear interest at an annual rate of 6%
(based on a year consisting of 365 days, compounded
annually), which interest shall accrue from the Closing
Date. Upon the preparation of the Financial
Statements, the principal amount of each Note shall be
reduced by 1/3 of the Revenue Deficiency Adjustment, if
any, and the interest accruing on each Note shall be
recalculated from the Closing Date based upon such
adjusted principal amount. The Notes shall be restated
at such time to reflect any such reduction.
2.5 Closing. The Closing shall take place at the
offices of Hub Group, Inc., 377 East Butterfield Road, Suite
700, Lombard, Illinois, 60148, at 5:00 p.m. local time on
the date hereof, or as soon thereafter as practicable
following the delivery of the documents required pursuant to
Sections 6.1 and 6.2 or such other time as may be agreed
upon by Hub and APC.
Section 3 Representations and Warranties.
3.1 Representations and Warranties by APC and APL.
Each of APC and APL represents and warrants to Hub, as of
the date of this Agreement and as of the Closing Date (as if
such representations and warranties were made on the Closing
Date), as follows:
3.1.1 Due Incorporation. Each of APC and APL
is a corporation duly organized, validly existing and
in good standing under the laws of the States of
Delaware and Tennessee, respectively, and each has the
corporate power and authority to perform its
obligations under this Agreement and the Stacktrain
Commitment Agreement.
3.1.2 Due Authorization. Each of APC and APL
has full power and authority to enter into this
Agreement and to consummate the transactions
contemplated hereby and perform the agreements
contained herein and APL has full power and authority
to enter into the Stacktrain Commitment Agreement and
to consummate the transactions contemplated thereby and
perform the agreements contained therein. All
necessary corporate action has been taken by each of
APC and APL to approve and authorize the execution,
delivery and performance by APC and APL, respectively,
of this Agreement and no other actions or proceedings
on the part of APC and APL, respectively, are necessary
to authorize this Agreement, the consummation of the
transactions contemplated hereby and the performance of
the agreements contained herein. All necessary
corporate action has been taken by APL to approve and
authorize the execution, delivery and performance by
APL of the Stacktrain Commitment Agreement and no other
actions or proceedings on the part of APL are necessary
to authorize the Stacktrain Commitment Agreement, the
consummation of the transactions contemplated thereby
and the performance of the agreements contained
therein. Each of APC and APL has duly and validly
executed and delivered this Agreement and such
agreement constitutes a legal, valid and binding
obligation of APC and APL, respectively, enforceable in
accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws
in effect which affect the enforcement of creditors'
rights generally and by equitable limitations on the
availability of specific remedies. APL has duly and
validly executed and delivered the Stacktrain
Commitment Agreement and such agreement constitutes a
legal, valid and binding obligation of APL, enforceable
in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws
in effect which affect the enforcement of creditors'
rights generally and by equitable limitations on the
availability of specific remedies.
3.1.3 Consents; No Violation. The execution,
delivery and performance by each of APC and APL of this
Agreement and by APL of the Stacktrain Commitment
Agreement will not (a) violate any law, regulation or
order of any governmental authority applicable to APC
or APL, (b) require any filing or registration by APC
or APL with, or consent or approval with respect to APC
or APL of, any governmental authority or third party,
(c) violate or conflict with the Certificate of
Incorporation or By-laws of APC or APL, or (d) violate
or constitute a default under any material agreement or
contract applicable to APC or APL.
3.1.4 Contracts. There are no contracts
related to the Acquired Accounts under which Hub will
be bound or restricted after the Closing Date.
Schedule A hereto indicates the complete list of all
Triparty Agreements.
3.1.5 Accuracy of Information Supplied.
(a) Except with respect to any Revenue
Deficiency, if any, all documents and other
written information, including without limitation,
all financial information and data, delivered or
made available to Hub in connection with Hub's
evaluation of the transactions contemplated by
this Agreement and the Stacktrain Commitment
Agreement are true, accurate and complete in all
material respects and are not missing any
amendments, modifications, correspondence or other
related papers which would be material to Hub's
understanding thereof in any respect. No such
documents and other written information contain
any untrue statement of any material fact or omit
to state any material fact necessary to make the
statements made not false or misleading in any
material respect.
(b) Schedule A hereto sets forth a list that
is true, accurate and complete in all material
respects of all customers (except for those 26
customers being retained by APL-DDS) for whom APL-
DDS performs domestic distribution services and
sets forth a list that is true and accurate in all
material respects of the volume tendered by each
such customer to APL-DDS during the 1995 fiscal
year.
(c) Attachment B to the Letter Agreement set
forth, as of April 16, 1996, a true, accurate and
complete listing of current APL-DDS employees,
which listing includes at least the following
information: (i) name of employee; (ii) current
position; (iii) current location; (iv) period of
employment; (v) current salary and other
compensation; (vi) a statement indicating whether
the employee will not be offered a position with
another APC business unit; (vii) a statement
indicating whether, to the best of APC's
knowledge, without inquiry, the employee has
accepted or indicated an interest in accepting
employment with another (non-Hub affiliated)
company.
3.1.6 Covenants. As of the Closing Date, each
of APC and APL has performed or complied with all
agreements and covenants required by this Agreement to
be performed or complied with by it on or before the
Closing Date.
3.1.7 Proceedings. To the best knowledge of
each of APC and APL, no action or proceeding has been
instituted or threatened, no law has been adopted or
promulgated, and no court order has been entered, which
would enjoin, restrain or prohibit, or might materially
adversely affect the performance by APC or APL of their
respective obligations under, this Agreement or the
Stacktrain Commitment Agreement or the complete
consummation of the transactions as contemplated by
this Agreement and the Stacktrain Commitment Agreement.
3.1.8 No Assumption of Liabilities, Etc. by
Hub. The execution and delivery by Hub of this
Agreement and the Stacktrain Commitment Agreement and
the performance by Hub of its obligations hereunder and
thereunder do not and will not cause Hub to assume or
become obligated under any debt, claim, obligation or
other liability, including, without limitation, any
contractual obligation, of APC or APL or any of their
respective Affiliates to the extent related to the
Acquired Accounts.
3.1.9 Brokers. APC is solely responsible for
the fees and expenses of J.P. Morgan & Co. in
connection with the transactions contemplated hereby.
Hub does not have any liability or will otherwise
suffer or incur any loss as a result of or in
connection with any brokerage or finder's fee or other
commission of any person retained by APC or APL in
connection with any of the transactions contemplated by
this Agreement.
3.2 Representations and Warranties by Hub. Hub
represents and warrants to APC, as of the date of this
Agreement and as of the Closing Date (as if such
representations and warranties were made on the Closing
Date), as follows:
3.2.1 Due Incorporation. Hub is a corporation
duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the
corporate power and authority to perform its
obligations under this Agreement and the Stacktrain
Commitment Agreement.
3.2.2 Due Authorization. Hub has full power
and authority to enter into this Agreement and the
Stacktrain Commitment Agreement and to consummate the
transactions contemplated hereby and thereby and
perform the agreements contained herein and therein.
All necessary corporate action has been taken by Hub to
approve and authorize the execution, delivery and
performance by Hub of this Agreement and the Stacktrain
Commitment Agreement and no other actions or
proceedings on the part of Hub are necessary to
authorize this Agreement and the Stacktrain Commitment
Agreement, the consummation of the transactions
contemplated hereby and thereby and the performance of
the agreements contained herein and therein. Hub has
duly and validly executed and delivered each of this
Agreement and the Stacktrain Commitment Agreement and
each such agreement constitutes a legal, valid and
binding obligation of Hub enforceable in accordance
with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect
which affect the enforcement of creditors' rights
generally and by equitable limitations on the
availability of specific remedies.
3.2.3 Consents; No Violation. The execution,
delivery and performance by Hub of this Agreement and
the Stacktrain Commitment Agreement will not (a)
violate any law, regulation or order of any
governmental authority applicable to Hub, (b) require
any filing or registration by Hub with, or consent or
approval with respect to Hub of, any governmental
authority or third party, (c) violate or conflict with
the Certificate of Incorporation or By-laws of Hub, or
(d) violate or constitute a default under any material
agreement or contract applicable to Hub.
3.2.4 Covenants. As of the Closing Date, Hub
has performed or complied with all agreements and
covenants required by this Agreement to be performed or
complied with by it on or before the Closing Date.
3.2.5 Proceedings. To the best knowledge of
Hub, no action or proceeding has been instituted or
threatened, no law has been adopted or promulgated, and
no court order has been entered, which would enjoin,
restrain or prohibit, or might materially adversely
affect the performance by Hub of its obligations under,
this Agreement or the Stacktrain Commitment Agreement
or the complete consummation of the transactions as
contemplated by this Agreement and the Stacktrain
Commitment Agreement.
3.2.6 Brokers. Neither APC nor APL has any
liability or will otherwise suffer or incur any loss as
a result of or in connection with any brokerage or
finder's fee or other commission of any person retained
by Hub in connection with any of the transactions
contemplated by this Agreement.
Section 4 *
Section 5 Covenants.
5.1 Financial Statements. APC agrees to supply to
Hub within 60 days from the date hereof the following
financial statements prepared by Arthur Andersen LLP: (i)
audited statements of income, changes in stockholders'
equity and cash flows of APL-DDS for fiscal 1993, 1994 and
1995; (ii) audited balance sheets of APL-DDS for fiscal 1994
and 1995; (iii) unaudited quarterly statements of income,
changes in stockholders' equity and cash flows of APL-DDS
for each of the first three quarters of fiscal 1995 and for
the first quarter of fiscal 1996; (iv) an unaudited balance
sheet of APL-DDS for the first quarter of fiscal 1996; (v)
all necessary footnotes for the foregoing (each of the
foregoing collectively, the "Financial Statements"); and
(vi) any required audit opinions and consents of Arthur
Andersen LLP, in each case in compliance with the Rules and
Regulations of the SEC. Hub and APC each agree to pay 50%
of the cost and expense associated with the preparation by
Arthur Andersen LLP of the Financial Statements; provided,
however, that in the event such costs and expenses exceed
$150,000, Hub shall only be obligated to pay $75,000 of such
costs and expenses and APC shall be obligated to pay the
balance. APC and APL each agree to reasonably cooperate
with Hub in the preparation of pro forma financial
statements of Hub which incorporate the acquisition of the
Acquired Accounts as required under the Securities Act or
the Exchange Act or the Rules and Regulations promulgated by
the SEC thereunder
5.2 Transition.
5.2.1 Transition of the Acquired Accounts.
For a period of 90 days after the date of this
Agreement, APC agrees to use its Best Efforts to assist
Hub in retaining the existing business of the Acquired
Accounts, developing new business with the Acquired
Accounts and recapturing lost business with respect to
the Acquired Accounts, *. In furtherance of these
efforts and in effecting an orderly transition of the
Acquired Accounts from APC to Hub:
(i) Each of APC and Hub shall appoint three
senior executives to serve on an Executive Council (the
"Executive Council"). The Executive Council will
appoint a transition team. The Executive Council or
its designees will, at the reasonable request of Hub,
participate in interviews and collaborate on articles
or other publications to publicize the advantageous
manner in which the purchase by Hub of the Acquired
Accounts will benefit such Acquired Accounts, APC, Hub,
and their respective employees. At the reasonable
request of Hub, the Executive Council or its designees
shall schedule and participate in meetings with any of
the Acquired Accounts to outline for such Acquired
Accounts the advantageous manner in which the purchase
by Hub of the Acquired Accounts will benefit such
Acquired Accounts.
(ii) APC shall cause representatives from APL-SS
to work with the Executive Council or its designees to
jointly develop a presentation outlining the
advantageous manner in which the purchase by Hub of the
Acquired Accounts will benefit such Acquired Accounts.
This presentation shall be used in joint calls by APL-
SS sales and marketing personnel with Hub personnel.
(iii) APC shall provide guidance to Hub with
respect to establishing valid customer requirements.
As part of such guidance, APC shall provide to Hub
customer information on: *.
(iv) APC shall devote significant resources
toward data retrieval and interpretation to insure that
Hub has adequate information for customer placement,
marketing, sales and facilitation of an orderly
transition.
(v) To the extent practically available, APC
shall provide customer volume information to Hub for
the years 1993, 1994 and 1995 and for the first quarter
of 1996.
5.3 Transition Period for Servicing Acquired Accounts
by APC. As of the date hereof and in the sole discretion of
Hub, Hub shall begin to assimilate the Acquired Accounts
into the Hub organization; provided, however, that for a
period of 90 days from the date hereof, APC will, at its
sole expense, continue to provide sufficient resources to
service the Acquired Accounts which have not yet been
assimilated in a manner which will maximize retention and,
in no event, offer service less than previously provided to
such Acquired Accounts by APC.
5.4 Human Resources. APC agrees to use its Best
Efforts to give Hub unlimited access to any APL-DDS
employees to whom APC has not offered employment in other
business units of APC and to assist Hub in discussing
employment opportunities at Hub with such employees. APC
further agrees to provide sufficient resources to assist
Hub's Human Resource function in the interview process of
such prospective employees and to assist Hub in the
transition of such employees (if hired by Hub) to Hub. APC
shall not take any action reasonably likely to discourage
such prospective employees from accepting employment with
Hub.
5.5 Assignment of Triparty Agreements. Each of APC
and APL agree to use their Best Efforts to effect the
assignment of the Triparty Agreements to Hub.
Section 6 Closing Deliveries.
6.1 By APC. On or before the Closing Date, APC and
Hub shall have executed and delivered the Stacktrain
Commitment Agreement.
6.2 By Hub. On or before the Closing Date, APC and
Hub shall have executed and delivered the Stacktrain
Commitment Agreement.
Section 7 Events of Default; Remedies; Arbitration.
7.1 Events of Default. Any one or more of the
following events shall be events of default hereunder (each,
an "Event of Default"), and each such Event of Default shall
be deemed to exist and continue so long as it shall not have
been cured:
(i) the failure of Hub to timely pay the
principal or interest due under any Note within five
(5) business days after written notice of such
nonpayment shall have been received by Hub from either
APC or APL;
(ii) a material breach by Hub of any of its
covenants or obligations under this Agreement, which
material breach shall not have been cured by Hub within
30 days after written notice of such material breach
shall have been received by Hub from either APC or APL;
(iii) a material breach by either of APC or APL
of any of their respective covenants or obligations
under this Agreement, which material breach shall not
have been cured by APC or APL, as the case may be,
within 30 days after written notice of such material
breach shall have been received by APC or APL, as the
case may be, from Hub; or
(iv) Hub becomes insolvent or generally fails to
pay, or admits in writing its inability to pay its
debts as they become due; Hub applies for a trustee,
receiver or other custodian for it or a substantial
part of its property; a trustee, receiver or other
custodian is appointed for Hub or for a substantial
part of its property; or any bankruptcy,
reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or
any dissolution or liquidation proceeding, is commenced
in respect of Hub.
7.2 Remedies. If any Event of Default shall have
occurred and be continuing after the parties have attempted
to resolve any dispute with respect thereto in the manner
set forth in Section 7.3, the following remedies shall be
available:
7.2.1 With respect to an Event of Default
described in Section 7.1(i), so long as no Event of
Default described in Section 7.1(iii) shall have
occurred and be continuing, the entire unpaid principal
amount on the Notes together with any unpaid and
accrued interest thereon shall become due and payable
at the option of APC.
7.2.2 With respect to an Event of Default
described in Section 7.1(iv), the entire unpaid
principal amount the Notes together with any unpaid and
accrued interest thereon shall become immediately due
and payable.
7.2.3 With respect to an Event of Default
described in Section 7.1(i) or Section 7.1(ii), so long
as no Event of Default described in Section 7.1(iii)
shall have occurred and be continuing, APC and APL may
terminate this Agreement.
7.2.4 With respect to an Event of Default
described in Section 7.1(iii), so long as no Event of
Default described in Section 7.1(i) or Section 7.1(ii)
shall have occurred and be continuing, Hub may
terminate this Agreement.
7.2.5 No remedy set forth in this Section 7.2
is intended to be exclusive and each and every remedy
shall be cumulative and in addition to any other rights
or remedies now or hereafter existing under applicable
law or otherwise.
7.3 Arbitration. The parties agree that any disputes
arising among them concerning the meaning of this Agreement,
their respective rights and obligations hereunder or any
breaches or Events of Default hereunder, with the sole
exception of an action by APC or APL for nonpayment on any
of the Notes, shall, at the request of any of the parties be
submitted to binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.
Disputes shall be decided by a panel of three arbitrators
with knowledge and experience in the transportation
industry, although the parties may agree to use only one
mutually acceptable arbitrator. In selecting an arbitration
panel, Hub shall select one arbitrator, APC and APL shall
select one arbitrator and the two arbitrators so selected
shall select the third arbitrator. Any dispute shall be (i)
heard by the arbitrators within 60 days of their selection;
(ii) decided within 30 days after all evidence and legal
arguments have been presented to the arbitrators; (iii)
decided pursuant to Illinois and federal law; and (iv)
convened at a mutually agreeable location in Illinois,
unless the parties agree to convene it elsewhere. The sole
right of the arbitrator(s) shall be to enforce or interpret
the terms of this Agreement and not to expand the rights or
obligations of the parties beyond the express terms thereof.
The written decision of the arbitrator shall be final and
binding on the parties in all cases. Judgment on any binding
award, if it is not paid within 30 days, may be entered into
any court having jurisdiction over the matter. The
prevailing party in any dispute shall be entitled to recover
from the non-prevailing party reasonable attorneys',
accountants' and expert witness fees, plus reasonable
discovery, travel, court/arbitration and other out-of-pocket
expenses incurred in connection with the arbitration.
Section 8 Indemnification.
8.1 Indemnification by APC. APC agrees to indemnify
Hub against, and agrees to hold Hub harmless from, any and
all losses (including any judgments, damages, fines,
penalties, costs or expenses (including reasonable
attorneys' fees)) actually sustained by Hub as a result of
any material breach of or any material inaccuracy in any
representation or warranty or covenant made by APC pursuant
to this Agreement.
8.2 Indemnification by Hub. Hub agrees to indemnify
APC against, and agrees to hold APC harmless from, any and
all losses (including any judgments, damages, fines,
penalties, costs or expenses (including reasonable
attorneys' fees)) actually sustained by APC as a result of
any material breach of or any material inaccuracy in any
representation or warranty or covenant made by Hub pursuant
to this Agreement.
8.3 Notice of Claims; Assumption of Defense;. The
indemnified party shall give prompt notice to the
indemnifying party, in accordance with the terms of Section
9.3, of the assertion of any claim, or the commencement of
any suit, action or proceeding by any party in respect of
which indemnity may be sought hereunder, specifying with
reasonable particularity the basis therefor and to give the
indemnifying party such information with respect thereto as
the indemnifying party may reasonably request (but the
giving of such notice shall not be a condition precedent to
indemnification hereunder, except to the extent the
indemnifying party has been prejudiced by the failure of the
indemnified party to give such notice). The indemnifying
party may, at its own expense with counsel chosen by it, (i)
participate in and (ii) without acknowledging that the
indemnified party is entitled to indemnification pursuant to
Section 8.1 or Section 8.2 for losses arising out of such
claim, suit, action or proceeding, at any time during the
course of any such claim, suit, action or proceeding, assume
the defense thereof; provided that (x) the indemnifying
party's counsel is reasonably satisfactory to the
indemnified party, and (y) the indemnifying party shall
thereafter consult with the indemnified party upon the
indemnified party's reasonable request for such consultation
from time to time with respect to such claim, suit, action
or proceeding. If the indemnifying party assumes such
defense, the indemnified party shall have the right (but not
the duty) to participate in the defense thereof and to
employ counsel, at its own expense, separate from the
counsel employed by the indemnifying party. Whether or not
the indemnifying party chooses to defend or prosecute any
such claim, suit, action or proceeding, all of the parties
hereto shall cooperate in the defense or prosecution
thereof.
8.4 Settlement or Compromise;. Neither party shall
enter into any settlement or compromise of any claim, suit,
action or proceeding of the kind referred to in Section 8.3
without the consent of the other party, except that (i) the
indemnifying party may enter into such settlement or
compromise if the indemnifying party shall have (x)
delivered to the indemnified party written confirmation that
such claim, suit, action or proceeding is one in which the
indemnifying party is obligated to indemnify the indemnified
party if liability in such claim, suit, action or proceeding
is proven and (y) obtained a complete and unconditional
release of the indemnified party, and (ii) the indemnified
party may enter into such settlement or compromise if the
indemnifying party shall have given the indemnifying party
at least thirty (30) days' notice of any proposed settlement
or compromise of any claim, suit, action or proceeding it is
defending and the indemnifying party does not assume the
defense of such claim, suit, action or proceeding during
such thirty (30) days. Any settlement or compromise made or
caused to be made by the indemnified party, or the
indemnifying party, as the case may be, of any such claim,
suit, action or proceeding shall also be binding upon the
indemnifying party or the indemnified party, as the case may
be, in the same manner as if a final judgment or decree had
been entered by a court of competent jurisdiction in the
amount of such settlement or compromise.
8.5 Claim Period. Any right to indemnification
hereunder for a breach of or inaccuracy in any
representation or warranty shall continue for 1 year from
the Closing Date, unless prior to such time any claim or
claims with respect thereto has or have been made pursuant
to this Section 8, in which case the expiration of
indemnification obligation with respect to such claim(s)
will be deferred until such claims(s) is finally resolved.
Section 9 Miscellaneous.
9.1 Expenses. Except as provided herein, each party
hereto shall bear its own expenses with respect to the
transactions contemplated herein.
9.2 Amendment. This Agreement may be amended,
modified or supplemented but only in writing signed by each
of the parties hereto expressly referencing this Agreement
and the parties' intent that this Agreement be so amended,
modified or supplemented.
9.3 Notices. Any notice, request, instruction or
other document to be given hereunder by a party hereto shall
be in writing and shall be deemed to have been given, (i)
when received if given in person or by overnight courier,
(ii) on the date of acknowledgment of receipt if sent by
telex, facsimile or other wire transmission or (iii) ten
days after being deposited in the U.S. mail, certified or
registered mail, postage prepaid:
If to Hub, addressed as follows:
Hub Group, Inc.
377 Butterfield Road, Suite 700
Lombard, Illinois 60148
Attention: President
Facsimile: (708) 964-6475
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: John R. Sagan
Facsimile: (312) 701-7711
If to APC, addressed as follows:
American President Companies, Ltd.
1111 Broadway
Oakland, California 94607
Attention: Bill Villalon
Facsimile: (510) 272-8932
with a copy to:
Ann Hasse
Vice President and General Counsel of APL
1111 Broadway
Oakland, California 94607
Facsimile: (510) 272-8932
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
9.4 Waivers. The failure of a party hereto at any
time or times to require performance of any provision hereof
or to exercise any right, power or remedy accruing to such
party hereunder shall in no manner affect its right at a
later time to enforce or exercise the same. No waiver by a
party of any condition or of any breach of any term,
covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or
warranty.
9.5 Press Releases. Each of the parties to this
Agreement hereby agrees with each other that for a period of
six months after the date of this Agreement, except as
required by applicable law, no press release or similar
public announcement or communication with the media will be
made or caused to be made concerning the execution or
performance of this Agreement or the transactions
contemplated hereunder unless specifically approved in
advance by each of the parties hereto.
9.6 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute but one
and the same instrument.
9.7 Interpretation;. The headings herein are for
convenience of reference only, do not constitute a part of
this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof. The use of the masculine,
feminine or neuter gender herein shall not limit any
provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean
"including, without limitation" or "include, without
limitation," respectively. No prior drafts of this
Agreement and no words or phrases from any such prior drafts
shall be admissible into evidence in any proceeding
involving this Agreement. Time is of the essence of each
and every covenant, agreement and obligation in this
Agreement.
9.8 Applicable Law;. This Agreement shall be governed
by and construed and enforced in accordance with the
internal laws of the State of Illinois without giving effect
to the principles of conflicts of law thereof.
9.9 Consent to Jurisdiction. Each of the parties
hereto hereby submits to the exclusive jurisdiction of the
State courts of the State of Illinois located in the City of
Chicago and the Federal courts of the United States of
America located in the Northern District of Illinois in
respect of the transactions contemplated by this Agreement,
and hereby waives, and agrees not to assert, as a defense in
any action, suit or proceeding for the transactions
contemplated by this Agreement, that it is not subject
thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that this
Agreement may not be enforced in or by said courts or that
its property is exempt or immune from execution, that the
suit, action or proceeding is brought in an inconvenient
forum, or that the venue of the suit, action or proceeding
is improper.
9.10 Binding Agreement;. This Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. No party may
assign its rights or obligations under this Agreement
without the prior written consent of the other parties.
9.11 No Third Party Beneficiaries;. This Agreement is
solely for the benefit of the parties hereto and their
respective Affiliates and no provision of this Agreement
shall be deemed to confer upon third parties any remedy,
claim, liability, reimbursement, cause of action or other
right.
9.12 Further Assurances;. Each party shall cooperate
with the other, and execute and deliver, or cause to be
executed and delivered, all such other instruments,
including instruments of conveyance, assignment and
transfer, and take all such other actions as such party may
reasonably be requested to take by the other party hereto
from time to time, consistent with the terms of this
Agreement, in order to effectuate the provisions and
purposes of this Agreement and the transactions contemplated
hereby.
9.13 Entire Understanding;. This Agreement and the
Stacktrain Commitment Agreement set forth the entire
agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and
understandings among the parties.
9.14 Severability;. If any term or other provision of
this Agreement is invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party.
Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties
as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest
extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first
above written.
HUB GROUP, INC.
By: /s/ Phillip C. Yeager
Name: Phillip C. Yeager
Title:Chairman
AMERICAN PRESIDENT COMPANIES, LTD.
By: /s/ Michael Diaz
Name: Michael Diaz
Title: Executive Vice President
APL LAND TRANSPORT SERVICES, INC.
By: /s/ W. K. Villalon
Name: W. K. Villalon
Title: Vice President - APL
Stacktrain Services
