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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 2, 1996
HUB GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-27754 36-4007085
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
377 EAST BUTTERFIELD ROAD, SUITE 700
LOMBARD, ILLINOIS 60148
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: 708-271-3600
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 2, 1996, the Registrant completed the acquisition of the domestic
intermodal marketing business of American President Lines - Domestic
Distribution Services ("APL-DDS"), a division of APL Land Transport Services,
Inc. ("APL"), pursuant to the Purchase Agreement dated May 2, 1996. APL is a
wholly-owned subsidiary of American President Companies, Ltd. ("APC"). The
Registrant paid APL $2,000,000 at closing and issued notes totaling $6,000,000,
bearing interest at an annual rate of 6%. The principal will be paid in three
equal annual installments beginning on May 1, 1997. The purchase price is
subject to downward revision based upon the results of an audit of historical
revenue. The Registrant uses APL Stacktrain Services (APL-SS), a division of
APL, as a vendor. APL-SS provides stacktrain services used by the Registrant to
move certain freight for its customers. The description contained herein of the
acquisition of APL-DDS is qualified in its entirety by reference to the Purchase
Agreement, which is attached hereto and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
It is impracticable to provide the financial statements of APL-DDS at this
time. The financial statements of APL-DDS will be filed under cover of Form
8-K/A as soon as practicable, but no later than July 16, 1996.
(b) Pro Forma Financial Information
It is impracticable to provide the pro forma financial information relative
to APL-DDS at this time. The pro forma financial information relative to APL-
DDS will be filed under cover of Form 8-K/A as soon as practicable, but no later
than July 16, 1996.
(c) Exhibits
The Purchase Agreement, dated May 2, 1996, among the Registrant, APC and
APL is attached hereto. Pursuant to Item 601(b)(2) of Regulation S-K, the
Registrant agrees to furnish supplementally any omitted schedule to the Purchase
Agreement.
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 hereunto duly authorized.
HUB GROUP, INC.
Dated: May 17, 1996 /s/ William L. Crowder
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William L. Crowder
Vice President-Finance and
Chief Financial Officer
PURCHASE AGREEMENT
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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:
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.
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"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
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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.
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
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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.
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
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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.
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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.
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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
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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.
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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.
4 *
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.
*Confidential treatment requested
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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:*
*Confidential treatment requested
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(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.
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.
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6.2 By Hub. On or before the Closing Date, APC and Hub shall have
executed and delivered the Stacktrain Commitment Agreement.
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:
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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
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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.
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
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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.
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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.
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 acknowledgement 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
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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.
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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.
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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.
* * * * *
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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-
Stacktrain Services
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