Exhibit 10.5
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of March 18,
1996, is among Hub Group, Inc., a Delaware corporation ("Hub Group"), the
sellers identified on the signature pages hereto (each, a "Seller") and Hub
Group Distribution Services, an Illinois general partnership ("Hub
Distribution"), Hub City Terminals, Inc., a Delaware corporation, and Hub Group
Associates, Inc., an Illinois corporation ("Hub Associates").
WHEREAS, each of the Sellers owns an interest in Hub Distribution; and
WHEREAS, the Sellers desire to sell their respective interests (the
"Interests") in Hub Distribution to Hub Group and Hub Group desires to purchase
such Interests on the terms and subject to the conditions described herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and warranties herein contained, the parties hereto agree
as follows:
1. Purchase By Hub Group. Subject to the terms and conditions herein set forth,
Hub Group agrees to purchase the Interests owned by each Seller in exchange for
the Purchase Consideration. For purposes of this Agreement, the following
definitions shall apply:
(a) "Applicable Seller's Percentage" shall mean the percentage set
forth opposite such Seller's name on Exhibit A attached hereto.
(b) "Class A Common Stock" shall mean the shares of Class A Common
Stock, $0.01 par value per share, of Hub Group.
(c) "Hub Distribution Value" shall mean the product of (i) the 1995
projected consolidated after tax net earnings of Hub Group after giving
effect to the IPO, including projected after tax investment income
generated from working capital raised in connection with the IPO and before
provision for minority interest all as determined in the good faith
judgment of the board of directors of Hub Group times (ii) 0.015 times
(iii) the Price/Earnings Multiple.
(d) "IPO" shall mean the initial public offering of shares of Class A
Common Stock by Hub Group.
(e) "Purchase Consideration" shall mean, with respect to any Seller,
an amount in cash equal to the quotient obtained by dividing (1) the
product of (i) the difference between (A) the product of (x) the Hub
Distribution Value, times (y) 0.6305 times (z) 30%
and (B) the sum of (x) 1.0695% of the estimated costs of the IPO as set
forth in Item 13 of Part II of the registration statement of Hub Group in
connection with the IPO, (y) 1.0695% of the amount of working capital
retained by Hub Group from the proceeds of the IPO as set forth in the
Prospectus and (z) 1.0641% of the aggregate amount received by the
underwriters in connection with the IPO (but not including the commissions
received by the underwriters from the sale of Class A Common Stock by any
selling stockholder of Hub Group and without giving effect to the exercise,
if any, of the underwriters' over-allotment option) times (ii) such
Seller's Applicable Seller's Percentage by (2) 0.6305.
(f) "Per Share IPO Price" shall mean the price per share of Class A
Common Stock of Hub Group as set forth in the Prospectus.
(g) "Price/Earnings Multiple" shall mean the amount determined by
dividing (i) the Per Share IPO Price by (ii) the 1995 projected
consolidated after tax net earnings per share of Hub Group after giving
effect to the IPO, including projected after tax investment income
generated from working capital raised in connection with the IPO and after
giving effect to minority interest all as determined in the good faith
judgment of the board of directors of Hub Group.
(h) "Prospectus" shall mean the prospectus forming a part of Hub
Group's registration statement in connection with the IPO, in the form in
which such prospectus is first filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of 1933, as
amended.
2. Sale by Sellers. Subject to the terms and conditions herein set forth,
each Seller agrees to sell for the consideration set forth above the Seller's
Interest.
3. Closing. The purchase of the Interests shall occur simultaneously with
the closing of the IPO. The closing shall take place at the offices of Xxxxx,
Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
Notwithstanding anything to the contrary contained in this Agreement, the
transactions contemplated hereby shall not close and this Agreement shall
terminate and no party shall have any liability hereunder (other than as
contemplated by Section 13) if the IPO is not consummated.
4. Representations and Warranties of Hub Group. Hub Group hereby
represents and warrants to each Seller as follows:
(a) Due Organization. Hub Group is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, with corporate power to own its properties and to conduct its
business as now conducted.
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(b) Authorization. Hub Group has the requisite power to enter into
this Agreement and to carry out its obligations hereunder. This Agreement
has been duly authorized, executed and delivered by Hub Group and
constitutes a valid and binding agreement, enforceable against Hub Group in
accordance with its terms except to the extent that its enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights generally or by general
equitable principles. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor compliance
with the terms, conditions or provisions of this Agreement will be a
violation of any of the terms, conditions or provisions of Hub Group's
Certificate of Incorporation or bylaws or of any material agreement or
instrument to which it is a party or by which it or its material properties
may be bound, or constitute a default or create a right of termination or
acceleration thereunder.
(c) Consents and Approvals. No consent, authorization or approval
of, filing or registration with, or cooperation from, any governmental
authority or any other person not a party to this Agreement is necessary in
connection with the execution, delivery and performance by Hub Group of
this Agreement and the consummation of the transactions contemplated
hereby, other than such consents, authorizations or approvals of, or
filings or registrations with, or cooperation from, the Securities and
Exchange Commission and state securities commissions in connection with the
IPO.
5. Representations and Warranties of Sellers. Each Seller hereby represents
and warrants to Hub Group as follows:
(a) Due Organization. Seller is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, with corporate power to own its properties and to conduct its
business as now conducted. Seller is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization,
with power to own its properties and to conduct its business as now
conducted.
(b) Authorization. Seller has the requisite power and authority to
enter into this Agreement and to carry out its obligations hereunder. This
Agreement has been duly executed and delivered by Seller and constitutes a
valid and binding agreement of Seller, enforceable against Seller in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles. None of the execution and delivery of this Agreement,
consummation of the transactions contemplated hereby or compliance with the
terms, conditions or provisions of this Agreement, will be a violation of
any of the terms, conditions or provisions of any material agreement or
instrument to which Seller is a party or by which Seller may be bound, or
constitute a default or create a right of termination or acceleration
thereunder.
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(c) Title. Seller has good and marketable title to its Interest
and owns such Interest free and clear of all liens, encumbrances, claims,
security interests and defects. Such Interest was duly and validly issued
and fully paid
(d) Complete Transfer of Interest. The assignments, endorsements,
powers and other instruments of transfer delivered by Seller to Hub Group
will be sufficient to transfer its Interest. Seller has full power and
authority to convey good and marketable title to the Interest, and upon
such transfer, Hub Group will receive good and marketable title thereto,
free and clear of all liens.
6. Conditions to the Obligations of Hub Group. The obligations of Hub Group
under this Agreement are subject to the fulfillment of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties in this Agreement made by Sellers shall be true in all material
respects on the date hereof.
(b) Performance. Each Seller shall have performed and complied in all
material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied with by
Seller.
(c) Injunctions. No preliminary or permanent injunction or other
final order by any United States Federal or state court shall have been
issued which prevents the consummation of the transactions contemplated
hereby.
7. Conditions to the Obligations of Seller. The obligations of Sellers
under this Agreement are subject to the fulfillment of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties in this Agreement made by Hub Group shall be true in all
material respects on the date hereof.
(b) Performance. Hub Group shall have performed and complied in all
material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied with by
it.
(c) Injunctions. No preliminary or permanent injunction or other final
order by any United States Federal or state court shall have been issued
which prevents the consummation of the transactions contemplated hereby.
8. Option. Each Seller hereby grants to Hub Group an option (the "Option")
on the terms and at the times specified herein to purchase the Seller's
remaining Interest in Hub Distribution. At any time on or prior to the third
anniversary of the closing pursuant to Section 3, Hub Group shall have the right
to purchase all (but not less than all) of the Seller's Interest in
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Hub Distribution at the price set forth opposite such Seller's name on Exhibit A
attached hereto. Hub Group may exercise its rights hereunder by giving the
applicable Seller written notice of its intention to exercise the Option prior
to the expiration thereof. The closing of any exercise of the Option shall take
place at the offices of Hub Group within 30 days after the date of the notice of
exercise. Upon the closing of the transactions contemplated by an exercise of
the Option, the applicable Seller shall convey to Hub Group its Interest and Hub
Group shall deliver to such Seller the amount in cash set forth opposite such
Seller's name on Exhibit A attached hereto.
9. Successors and Assigns. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective heirs, personal
representatives, successors, assigns and affiliates, but shall not be assignable
by any party hereto without the prior written consent of the other parties
hereto.
10. Notices. Any notice or other communication provided for herein or given
hereunder to a party hereto shall be in writing and shall be given by delivery,
by telex, telecopier or by mail (registered or certified mail, postage prepaid,
return receipt requested) to the respective parties as follows:
If to Hub Group:
Hub Group, Inc.
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to any Seller, to such Seller's address set forth on Exhibit A hereto.
Such notice may also be sent to such other address with respect to a party as
such party shall notify the other in writing.
11. Waiver. No party may waive any of the terms or conditions of this
Agreement except by a duly signed writing referring to the specific provision to
be waived. Each party hereto hereby consents to the transfer of the Interests
hereunder on behalf of itself and, in the case of Hub Associates, on behalf of
Hub Distribution.
12. Entire Agreement. This Agreement constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral,
among the parties hereto and their affiliates.
13. Expenses. Except as otherwise expressly contemplated herein to the
contrary, regardless of whether the transactions contemplated hereby are
consummated, Hub Group shall
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pay all expenses of the parties hereto incident to preparing for, entering into
and carrying out this Agreement and the consummation of the transactions
contemplated hereby.
14. No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, no provision of this Agreement shall be
deemed to confer upon other third parties any remedy, claim, liability,
reimbursement, cause of action or other right.
15. Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
16. Captions. The Section and Paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
18. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first executed.
HUB GROUP, INC.
By: *
------------------------------
Xxxxx X. Xxxxxx
Vice Chairman
HUB GROUP DISTRIBUTION SERVICES, an
Illinois general partnership
By: HUB GROUP ASSOCIATES, INC.,
its Managing Partner
By: *
------------------------------
Xxxxx X. Xxxxxx
Authorized Officer
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HUB CITY TERMINALS, INC.
HUB GROUP ASSOCIATES, INC.
By: *
-----------------------------
Xxxxx X. Xxxxxx
Authorized Officer
SELLERS:
HUB CITY ALABAMA TERMINALS, INC.
HUB CITY ATLANTA TERMINALS, INC.
HUB CITY BOSTON TERMINALS, INC.
HUB CITY CLEVELAND TERMINALS, INC.
HUB CITY DALLAS TERMINALS, INC.
HUB CITY DETROIT TERMINALS, INC.
HUB CITY FLORIDA TERMINALS, INC.
HUB CITY GOLDEN GATE TERMINALS, INC.
HUB CITY HOUSTON TERMINALS, INC.
HUB CITY INDIANAPOLIS TERMINALS, INC.
HUB CITY KANSAS CITY TERMINALS, INC.
HUB CITY LOS ANGELES TERMINALS, INC.
HUB CITY MID ATLANTIC TERMINALS, INC.
HUB CITY NEW HAVEN TERMINALS, INC.
HUB CITY TERMINALS OF NEW ORLEANS, INC.
HUB CITY NEW YORK STATE TERMINALS, INC.
HUB CITY TERMINALS, INC.,
NEW YORK-NEW JERSEY
HUB CITY NORTH CENTRAL, INC.
HUB CITY OHIO TERMINALS, INC.
HUB CITY PHILADELPHIA TERMINALS, INC.
HUB CITY PITTSBURGH TERMINALS, INC.
HUB CITY PORTLAND TERMINALS, INC.
HUB CITY RIO GRANDE TERMINALS, INC.
HUB CITY TERMINALS INCORPORATED, ST. LOUIS
HUB CITY TENNESSEE TERMINALS, INC.
HUB GROUP PARTNERS, INC.
By: *
-----------------------------
Xxxxx X. Xxxxxx
Authorized Officer
*
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
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EXHIBIT A
APPLICABLE SELLER'S PERCENTAGE
------------------------------
Applicable
Seller's Option
Seller Percentage Price
------ ---------- -------
Hub City Alabama Terminals, Inc.......................... 0.65% $15,640
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Atlanta Terminals, Inc.......................... 2.60 62,561
0000 Xxxxxx Xx.
Xxxx. X - Xxxxx 0
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Boston Terminals, Inc........................... 1.95 46,921
000 Xxxxxxxx Xx. - 0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Cleveland Terminals, Inc........................ 0.65 15,640
0000 Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Dallas Terminals, Inc........................... 0.65 15,640
0000 Xxxx Xxxxx - Xxxxx 000
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Detroit Terminals, Inc.......................... 1.95 46,921
000 X. Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Florida Terminals, Inc.......................... 0.65 15,640
0000 Xxxx Xxx. - Xxxxx 00
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Golden Gate Terminals, Inc...................... 1.95 46,921
A-1
Applicable
Seller's Option
Seller Percentage Price
------ ---------- -------
00 Xxxxxxxxx Xxx
Xxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Houston Terminals, Inc......................... 0.65% $15,640
0000 Xx. Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Indianapolis Terminals, Inc.................... 1.95 46,921
000 X. 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Kansas City Terminals, Inc..................... 1.30 31,280
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Los Angeles Terminals, Inc..................... 1.95 46,921
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Mid Atlantic Terminals, Inc.................... 0.65 15,640
0000 XxXxxxx Xx.
Xxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City New Haven Terminals, Inc....................... 1.95 46,921
0000 Xxxx Xx. - Xxxxx 0
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Facsimile (000) 000-0000
Hub City Terminals of New Orleans, Inc.................. 0.65 15,640
000 Xxxx Xxxxxxxxx Xxx.
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City New York State Terminals, Inc.................. 0.65 15,640
A-2
Applicable
Seller's Option
Seller Percentage Price
------ ---------- -------
000 Xxxxxx Xxxxx Xx.
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Terminals, Inc., New York-New Jersey........... 1.95% $46,921
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-00000
Hub City North Central, Inc............................. 1.95 46,921
0000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Ohio Terminals, Inc............................ 3.25 78,201
0000 X. Xxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Philadelphia Terminals, Inc.................... 0.65 15,640
000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Hub City Pittsburgh Terminals, Inc...................... 1.95 46,921
0000 Xxxxx Xxxxx Xx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Portland Terminals, Inc........................ 1.95 46,921
00000 X.X. Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Rio Grande Terminals, Inc...................... 0.65 15,640
0000 Xxxxxxxxxx - Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Hub City Terminals, Incorporated, St. Louis............. 1.95 46,921
10420 Xxx Xxxxx Xxxxxx Xx.
0xx Xxxxx
X-0
Applicable
Seller's Option
Seller Percentage Price
------ ---------- -------
Xx. Xxxxx, XX 00000
Facsimile: (000) 000-0000
Hub City Tennessee Terminals, Inc.............. 1.95% $46,921
000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Hub Group Partners, Inc........................ 26.00 625,625
0000 Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
A-4
