C O N F I D E N T I A L
AMENDED AND RESTATED
RAIL TRANSPORTATION AGREEMENT
between
UNION PACIFIC RAILROAD COMPANY
and
PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN
(f/k/a APL LAND TRANSPORT SERVICES, INC.)
and
AMERICAN PRESIDENT LINES, LTD.
and
APL CO. PTE LTD.
TABLE OF CONTENTS
Section 1. EFFECTIVE DATE, TERM AND RENEWAL ................................................................ 2
Section 2. DEFINITIONS ..................................................................................... 2
Section 3. AUTHORIZED AGENT ................................................................................ 2
Section 4. RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP ............................................... 3
Linehaul Services ........................................................................... 3
Section 5. TERMINAL SERVICES TO BE PROVIDED BY UP .......................................................... 4
A. General Services ........................................................................ 4
B. Loading Containers ...................................................................... 5
C. Other Terminal Services ................................................................. 5
D. Facilities .............................................................................. 6
E. Additional Terminal Services Provided by UP for Stack
Car Trains for Which UP Does Not Receive a Linehaul ..................................... 7
Section 6. UP EQUIPMENT OBLIGATIONS ........................................................................ 9
A. Intermodal Cars Furnished by UP ......................................................... 9
B. Stack Car Supply ........................................................................ 10
C. UP Relief From Obligation ............................................................... 10
D. Equipment Use ........................................................................... 10
E. Maintenance of Equipment ................................................................ 11
1. Responsibility ..................................................................... 11
2. Cost of Repairs for APL Stack Cars ................................................. 11
3. Cost of Repairs for Containers and Chassis ......................................... 11
4. Repairs by Non-Responsible Party .................................................. 12
5. Permission to Enter ................................................................ 12
Section 7. SERVICE COMMITMENTS BY UP ....................................................................... 13
Section 8. APL'S VOLUME COMMITMENT 13
Section 9. CAR COST COMPONENT AND USE OF APL OWNED
STACK CARS .................................................................................. 13
A. APL's Payment for Stack Cars ............................................................ 13
B. UP Use of and Payment for APL Owned or Leased Stack Cars ................................ 15
Section 10. OTHER APL OBLIGATIONS ........................................................................... 16
A. Collection of Charges 16
B. Shipping Orders 16
C. UP Domestic Container Space ............................................................. 16
Section 11. EQUIPMENT STORAGE ............................................................................... 17
A. Parking Spaces at Terminals ............................................................. 17
B. Equipment Storage Charges ............................................................... 17
C. Storage of Stack Cars ................................................................... 17
Section 12. PARTICIPANT AND TPI SHIPMENTS .................................................................... 18
A. UP and Participants To Negotiate All Terms Other Than
Rates and Train Schedules ............................................................... 18
B. Participants' Volume Commitment 19
C. International Shipments for TPI Customers ............................................... 19
Section 13. RATES/ADJUSTMENT TO RATES ....................................................................... 19
Section 14. COMPETITIVE PROPOSALS ........................................................................... 19
Section 15. FORCE MAJEURE ................................................................................... 19
Section 16. ARBITRATION ..................................................................................... 20
A. Panel ................................................................................... 20
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B. Arbitrators' Findings and Rules of Evidence ............................................. 21
C. Arbitrators' Duties ..................................................................... 22
D. Expenses ................................................................................ 22
E. Confidentiality ......................................................................... 22
Section 17. RENEGOTIATION ................................................................................... 22
Section 18. MUTUAL INDEMNITY ................................................................................ 23
Section 19. CLAIMS FOR CARGO LOSS AND DAMAGE ................................................................ 24
A. Domestic Shipments and Third Party Equipment ............................................ 24
B. International Shipments ................................................................. 24
1. Duties of Parties .................................................................. 24
C. Processing of Cargo Claims .............................................................. 25
D. Notification of Damage .................................................................. 26
E. Agreement Only for Benefit of Party ..................................................... 26
F. Condition Precedent ..................................................................... 27
Section 20. HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES .................................................. 27
A. Hazardous Materials ..................................................................... 27
B. Indemnity ............................................................................... 28
C. Duty of Cooperation ..................................................................... 28
Section 21. FEDERAL CONTRACTOR REQUIREMENTS ................................................................. 29
A. Applicable Laws ......................................................................... 29
B. Certification ........................................................................... 30
Section 22. OTHER AGREEMENTS ................................................................................ 30
Section 23. WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL
RULES APPLY ................................................................................. 31
Section 24. ASSIGNMENT ...................................................................................... 31
Section 25. YEAR 2000 COMPLIANCE ............................................................................ 33
Section 26. NOTICES ......................................................................................... 34
Section 27. CONFIDENTIALITY ................................................................................. 35
Section 28. VENUE ........................................................................................... 36
Section 29. APPLICABLE LAW .................................................................................. 36
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C O N F I D E N T I A L
AMENDED AND RESTATED
RAIL TRANSPORTATION AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of
May, 2002, between UNION PACIFIC RAILROAD COMPANY, a Delaware Corporation
("UP"), and PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN (f/k/a APL LAND
TRANSPORT SERVICES, INC.), a Tennessee corporation (hereafter "LTS" or "Pacer"),
and AMERICAN PRESIDENT LINES, LTD., a Delaware corporation (hereafter "APL
International") and APL CO. PTE LTD., a Singapore company (hereafter "APL Co.").
LTS, APL International and APL Co. are sometimes jointly referred to as "APL".
RECITALS
APL International and APL Co. provide ocean common carrier
freight transportation. LTS provides intermodal management services and acts as
agent for APL International, APL Co., Participants and TPI Customers. UP
provides rail transportation services as a common and exempt intermodal carrier.
APL International, APL Co., LTS and UP are parties to that
certain Rail Transportation Agreement dated October 11, 1996 (the "Original
Agreement"), pursuant to which UP provides rail transportation services to APL
for the movement of foreign and domestic cargo in Containers under the terms and
conditions contained therein. The Original Agreement also covers transportation
via the former Southern Pacific Transportation Company and its affiliated
railroads (collectively referred to as "SP") which have been acquired by and are
under common control with UP.
The Original Agreement further provides for (i) carriage of
International Shipments in Containers owned or leased by third
party ocean carriers (hereafter "TPI Shipments") as arranged
by APL; (ii) carriage of Domestic Shipments in Containers
owned or leased by third party ocean carriers as arranged by APL; and (iii)
carriage of auto parts shipments for foreign automobile companies in APL or
other ocean carrier Containers as arranged by APL (hereafter "CKD Shipments").
The term "International Shipments" as used in the Original Agreement (and in
this Agreement) includes shipments moving for the benefit of APL International,
APL Co., TPI Shipments and CKD Shipments.
The Original Agreement also formalized and consolidated
agreements and understandings, which have been reached over the years between
the parties, in anticipation of the transaction involving the recapitalization
of LTS which occurred in May 1999 and resulted in a substantial change in
ownership of LTS.
The parties desire to amend and restate the Original Agreement
to read as set forth in this Agreement in order to give effect to certain
agreements and understandings among them regarding car supply and to make
certain other technical changes and corrections as they have deemed necessary.
AGREEMENT
NOW THEREFORE, the parties agree as follows:
Section 1. EFFECTIVE DATE, TERM AND RENEWAL
The Original Agreement took effect on October 11, 1996, thirty
days after the Control Date, and as amended and restated herein shall continue
to be in effect until October 10, 2011.
Section 2. DEFINITIONS
Capitalized terms used in this Agreement which are not defined
in the Agreement itself will have the meanings set forth in Exhibit A to this
Agreement.
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Section 3. AUTHORIZED AGENT
APL International and APL Co. designate LTS as their
authorized representative for the following purposes under this Agreement,
including but not limited to:
1. Paying transportation charges, as required by this Agreement;
2. Arranging all operational matters connected with APL
International's and APL Co.'s Containers;
3. Giving and receiving all notices under this Agreement; and
4. Performing all other actions and performance required of or
permitted to APL International and APL Co. under this
Agreement.
APL International and APL Co. reserve the right, at their sole
discretion and upon prior notice to UP, to take such direct actions and directly
perform such obligations under this Agreement as they deem necessary or
convenient. It is contemplated by the parties that such direct action and
performance by APL International and APL Co. generally will be limited to cargo
claims, federal contractor compliance, and other administrative matters.
Notwithstanding the foregoing the parties agree that in the
event LTS fails to perform any of the duties and responsibilities for APL
International and APL Co. with respect to this Agreement with UP, APL
International and APL Co. shall perform those duties and responsibilities,
particularly payment of transportation charges as required by this Agreement.
Section 4. RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP
Linehaul Services
UP shall transport loaded Containers carrying International
and Domestic Shipments, empty Containers or empty APL Stack Cars between the
points and at the
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divisions, charges and rates (hereafter "Rates") set forth in Exhibit B, as
adjusted from time to time under the terms of this Agreement.
Section 5. TERMINAL SERVICES TO BE PROVIDED BY UP
A. General Services
The Rates set forth in Exhibit B, as adjusted from time to
time under the provisions of this Agreement, include the following additional
services to be performed by UP or its authorized agents or independent
contractors:
(a) Lifting Equipment onto Intermodal Cars and securing
Equipment onto Intermodal Cars and unsecuring
Equipment and lifting or driving Equipment from
Intermodal Cars except at On-Dock facilities.
(b) Preparing Equipment receipt and interchange
inspection reports evidencing the apparent condition
of the Equipment at times of interchange providing
copies of those reports to APL;
(c) Providing timely notification of Arrival and
Availability of Shipments to APL or Participant as
identified on the ▇▇▇▇ of lading;
(d) Assessing and collecting any Equipment storage
charges against Participants for Domestic Service
shipments held at any UP terminal beyond the free
time as may be provided in UP's Intermodal Rules
except as otherwise provided herein. The Parties
agree that APL shall not be responsible for payment
of storage charges on Participants' shipments;
however, APL shall cooperate with UP to enable UP to
collect storage charges on Participants' shipments.
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(e) Providing APL with a daily inventory report of all
APL owned or leased Stack Cars, Containers and
chassis on hand at UP's Global One facilities. Such
report will be by unit number and will be furnished
once daily by 10:00 AM Chicago time for each calendar
day.
(f) Such other transferring, marshaling and repositioning
of Equipment within rail terminals as may be
necessary or convenient to carry the purposes of this
Agreement into effect.
B. Loading Containers
Except at On-Dock Facilities, UP shall load the Containers
tendered under this Agreement on to Intermodal Cars in a timely manner. UP shall
load Intermodal Cars properly in accordance with any safe operating parameters
given by connecting rail carriers to UP and/or established by UP, the AAR or the
FRA.
When Stack Cars are received from connecting rail carriers at
interchange points, UP shall accept the connecting rail carrier's loading of top
and bottom Containers on each platform as being in accordance with the loading
capabilities of the Stack Cars and normal railroad operating parameters.
C. Other Terminal Services
APL will pay the Rates set forth in Exhibit B for the
following additional terminal services:
(a) Transferring Containers at Global One between
Railcars, including Stack Cars and Standard Railroad
Flatcars. Such service includes the attachment or
detachment of a chassis.
(b) Unloading or loading empty Containers, when directed
by APL, from or to Stack Cars or Flatcars when such
empty Containers are
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received or delivered in interchange from or to
connecting rail carriers at Chicago, Illinois and on
which UP does not receive a linehaul movement.
(c) Lifting Containers when directed by APL, between
chassis; or from the ground to chassis or from
chassis to ground, when directed by APL or required
due to APL's shortage of chassis, and the charge for
such lifting is not covered in the linehaul rates
shown in Exhibit B to this Agreement or in (a) or (b)
above.
D. Facilities
(a) UP agrees to maintain its Chicago, IL area Stack Car
Train terminal facility at a size and capacity such
as will accommodate APL's requirements for Stack Car
Train traffic and terminal services.
(b) UP agrees to provide APL with use of no less than one
set of three ramp tracks and two cranes or lifting
devices during the scheduled loading or unloading of
any APL Stack Car Train of ten (10) or more cars.
(c) UP shall lease to APL for the term of this Agreement
and any extensions thereof 1,800 square feet of
office space at its Global One facility to APL for
APL's use in the administration of its Stack Car
Train operations. The lease shall contain normal and
customary terms and conditions concerning tenant and
landlord obligations and responsibilities, and the
rent required shall not exceed the fair rental value
of the leased premises.
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E. Additional Terminal Services Provided by UP in Chicago, IL for
Stack Car Trains for Which UP Does Not Receive a Linehaul.
In addition to providing terminal service in connection with
APL Stack Car Trains for which UP receives a linehaul movement, UP shall also
provide additional terminal services as defined in this Section 5 for APL Stack
Car Trains which UP does not handle in linehaul service.
(1) Such additional terminal services will not be
provided for Stack Car Trains originating or
terminating in the States of Washington, Oregon or
California for which UP does not receive a linehaul.
(2) Such additional terminal services shall be limited to
apply to a reasonable number of weekly Stack Car
Trains but in no case less than two such Stack Car
Trains per week.
(3) UP shall have no obligations hereunder to provide
Intermodal Cars used in transferring Containers from
such Stack Car Trains for movement beyond the
Chicago, IL area. However, upon notice from APL, UP
will use reasonable efforts to furnish any excess
Intermodal Cars that may be in UP's possession at
Chicago, IL.
(4) Such terminal services shall not include payment by
UP of any other rail carrier's switching charges.
(5) APL shall reimburse UP for any transportation expense
incurred by UP for the movement of traffic which UP
did not handle in linehaul service.
(6) At UP's option, such terminal service will be
provided at either UP's Global One or Global Two
facilities.
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(7) UP shall assess and APL shall pay a per Container fee
as set forth in Exhibit B for such additional
terminal services, provided however, such per
Container fee shall only be assessed when UP does not
receive a linehaul movement. Also UP shall assess and
APL shall pay an additional fee for each Container
transferred between Stack Cars and Flatcars as set
forth in Exhibit B. This charge includes attachment
to or detachment from a chassis. When UP does not
receive a linehaul, such additional terminal services
shall be performed under operating Schedules as
mutually agreed upon by UP, APL and, where necessary,
the connecting rail carrier providing linehaul
transportation service.
Section 6. UP EQUIPMENT OBLIGATIONS
A. Intermodal Cars Furnished by UP
1. At each intermodal terminal where APL tenders volumes to
UP, UP shall furnish APL with a sufficient number of Stack Cars to transport
loaded and empty Containers tendered by APL on any given day for movement under
the applicable Train Schedule, provided that APL shall provide verbal advance
notice of its estimated Stack Car needs to UP as provided in Section 6.A.2.
below.
2. Other than for shipments originating at On-Dock rail
terminals at San ▇▇▇▇▇, CA, Tacoma, WA and Seattle, WA ("On Dock Terminals"),
APL will provide UP with twelve (12) hours verbal advance notice of its
estimated Stack Car needs. For shipments originating at the On Dock Terminals,
APL will provide UP with five (5) days advance verbal notice of its anticipated
Stack Car needs based upon inbound ocean vessel loadings. Further, APL will
provide UP with twenty-four (24) hours advance
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verbal notice of its actual Stack Car needs so as to allow sufficient time for
UP to position the required empty Stack Cars to the On Dock Terminal.
3. The parties recognize that the day-to-day volume of
domestic and international export loaded containers cannot be predicted with
certainty. Further, the parties recognize that the available supply of Stack
Cars for outbound loading at any given rail intermodal terminal and at On Dock
Terminals is also dependent upon timely arrival and unloading of inbound trains.
Considering these factors, the parties also recognize that APL cannot provide UP
with precise advance notice of its daily Stack Car needs. However, APL will use
its best efforts to provide the most accurate advance notice as possible. So
long as APL provides the advance notice as required in sub-paragraph A.2. of
this Section 6, APL's failure to provide the exact number of Stack Cars required
will not relieve UP of its obligation as stated in sub-paragraph A.1. of this
Section 6. To the extent APL's actual daily volume exceeds the estimated volume
provided by APL in its 12 hour advance notice by a factor of 125%, UP will not
be obligated to provide Stack Cars for the volume in excess of 125%.
B. Stack Car Supply
The conditions under which UP will provide Stack Cars to APL
are set forth in Appendix 6.B.
C. UP Relief From Obligation
In the event APL incurs a shortage of chassis at any given UP
intermodal terminal, and such shortage results in a situation where inbound APL
Containers are held on Stack Cars, then UP will be relieved of certain of its
Stack Car supply obligations as described in Appendix 6.B until such time as all
inbound APL Containers are placed on chassis.
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D. Equipment Use
The rules covering the use of a Container while the Container
is in UP's possession or while UP may otherwise be responsible for the Container
shall be governed by the AAR Rules.
E. Maintenance of Equipment
1. Responsibility
Except as otherwise stated in this Agreement, responsibility
for loss, damage, maintenance, and repair of Equipment and Intermodal Cars will
be governed as follows:
(a) Intermodal Cars shall be governed by the
then current Field Manual of the A.A.R. Interchange Rules, sometimes referred to
as the Car Interchange Rules of the Association of American Railroads ("Car
Rules") in effect on the effective date of this Agreement and as may be amended
from time to time, and
(b) Containers and Chassis shall be governed by
the Container Rules.
2. Cost of Repairs for APL Stack Cars
The cost of repairs to APL Stack Cars shall be allocated as
follows:
(a) APL shall pay for or perform owner's
responsibility repairs under the Car Rules.
(b) UP shall pay for or perform those handling
carrier responsibility repairs under the Car Rules that become necessary while
an APL Stack Car is in the possession of UP.
(c) APL shall be responsible for all repairs
while an APL Stack Car is in the possession of a third party, including but
not limited to another rail carrier.
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3. Cost of Repairs for Containers and Chassis
The cost of repairs to Containers and Chassis will be
allocated as follows:
(a) APL shall pay for or perform owner's
responsibility repairs under the Container Rules.
(b) UP shall pay for or perform those handling
carrier responsibility repairs under the Container Rules that become necessary
while a Container or Chassis is in the possession of UP. If after joint
investigation by APL and UP, the responsible party cannot be determined, the
cost of handling carrier responsibility repairs shall be shared equally by APL
and UP.
(c) As between APL and UP, APL shall be
responsible for all repairs while a Container or Chassis is in the possession of
a third party, including but not limited to a motor carrier and other rail
carriers.
4. Repairs By Non-Responsible Party
If either party performs repairs to Containers or Chassis for
which the other party is responsible under this Section, the responsible party
shall pay the performing party as set forth in the Container Rules.
5. Permission To Enter.
Only upon written request by APL, and after execution of a
signed Right of Entry Agreement, UP may permit APL or its contractor to enter
onto UP property at UP origins and UP destinations to bring personnel, material
and equipment onto that property, and to perform repairs to Containers, Chassis,
and Stack Cars on that property. This permission, if granted, shall be in
writing and shall not be unreasonably withheld.
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Section 7. SERVICE COMMITMENTS BY UP
Appendix 7 sets out the standards for UP's service performance
and the remedies if UP fails to meet those standards.
Section 8. APL'S VOLUME COMMITMENT
Appendix 8 sets forth APL's volume commitment to UP and
remedies if APL fails to meet those commitments.
Section 9. CAR COST COMPONENT AND USE OF APL OWNED STACK CARS
A. APL's Payment for Stack Cars.
Other than the domestic 20' and 40' rates applying from
Chicago, IL, Kansas City, MO and St. Louis, MO on the one hand, to Seattle, WA,
Portland, OR, Oakland, CA and Los Angeles, CA, on the other hand, the domestic
rates shown in Exhibit B include a car cost component equal to the average per
diem and mileage paid by UP to TTX and other rail carriers. The car cost
component is derived by the process described in Appendix 9.A.
B. UP Use of and Payment for APL Owned or Leased Stack Cars.
1. For purposes of this Agreement, the terms "APL owned Stack
Cars" and "APL Stack Car" shall mean those cars owned by APL and/or Pacer as
well as those cars leased by APL and/or Pacer bearing marks of "APLX" or "BRAN"
or any other ▇▇▇▇ ▇▇▇▇▇ arranges to be placed on Stack Cars for movement on UP
under this Agreement.
2. UP may use APL owned Stack Cars for the movement of
APL volumes, Pacer volumes or the volumes of other UP customers.
3. Appendix 9.B sets forth the parties' agreement regarding
per diem and mileage rates payable by UP for the use of, and other matters
regarding, the Stack Cars identified in Appendix 9.B.
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Section 10. OTHER APL OBLIGATIONS
A. Collection of Charges
APL shall pay UP the Rates set forth in Exhibit B, adjusted in
accordance with Section 13, as compensation for the transportation services
described in this Agreement. Payment shall be made within thirty (30) days of
receipt of an invoice from UP. However, if APL demonstrates that it received any
UP invoice more than six calendar days after the date of the invoice, the
payment period shall be extended, day for day, by the number of days beyond six
days. If APL does not pay UP within the specified time period at UP's request,
APL shall pay a late charge of 1.5% per month or the maximum rate then
permissible by law, whichever is less.
B. Shipping Orders
APL shall prepare shipping orders which will specify the rail
route of movement for the Containers listed on each shipping order.
C. UP Domestic Container Space
APL agrees to make available to UP's retail subsidiary, Union
Pacific Distribution Services ("UPDS") or its successors, a minimum of 25% of
the available domestic Container space on any given APL Train (hereinafter "25%
Allocation").
In the event UPDS does not fully utilize its 25% Allocation
during any calendar month for a particular traffic corridor, the total number of
Containers tendered by UPDS for Stack Car Train service in that corridor and
direction of movement in the following calendar month shall not exceed 200% of
the average per train tender for the month in which UPDS did not utilize its 25%
Allocation, not to exceed a 10-unit increase per Stack Car Train. For example,
if UPDS's current 25% Allocation for the Stack Car Train moving eastbound from
Oakland, California, is 50 Containers per train, and during a given calendar
month, UPDS tenders an average of 20 Containers per train, then
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UPDS's maximum 25% Allocation for the next month for that train will be 20 x
200% or a total of 10 additional Containers per train, whichever is less. In
this example, UPDS's new 25% Allocation on the eastbound Stack Car Train from
Oakland, California, would be 30 Containers per train.
Section 11. EQUIPMENT STORAGE
A. Parking Spaces at Terminals
UP will provide parking spaces and spaces for empty chassis to APL at UP's
Global One facility pursuant to the terms and conditions specified in
Appendix 11.
B. Equipment Storage Charges
UP will allow APL Equipment to be stored at points set forth
in Exhibit G, subject to the free time and charges set forth in that Exhibit.
C. Storage of Stack Cars
1. At UP's Global One facility, UP shall provide temporary
track space to store Stack Cars as specified in Appendix 11. UP will make
reasonable efforts to accommodate the storage of additional Stack Cars, that is,
Stack Cars above and beyond those Stack Cars specified in Appendix 11. Such
storage may be at Global One or elsewhere on UP controlled property. If UP is
unable to store additional Stack Cars, it will verbally notify APL. Within
twenty-four (24) hours of such notification, APL will verbally notify UP of
APL's desired disposition of these Stack Cars. All APL controlled Stack Cars
will remain in the APL account until delivered off-line.
2. UP shall provide temporary storage of APL Stack Cars
without charge when cargo volumes or other factors do not allow for continued
use of APL Stack Cars. When APL Stack Cars are stored by UP, UP shall be
relieved of paying the per diem charges as set forth in Section 4 of Appendix
9.B from the time the APL Stack Car is placed in storage until it is removed
from storage.
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Section 12. PARTICIPANT AND TPI SHIPMENTS
A. UP and Participants To Negotiate All Terms Other Than Rates
and Train Schedules
UP and APL agree that APL arranges for the transportation of
Participants' Containers with UP, as well as with other rail carriers. UP and
APL acknowledge that the terms and conditions of the transportation by rail
shall be agreed upon by UP and the Participants other than the Rates and Train
Schedules applicable to Participants for movement of their Containers.
Unless otherwise specifically advised in writing by APL, UP
acknowledges that APL has no authority as agent for the Participants to enter
into any agreement with UP exculpating or in any way limiting UP's liability for
cargo loss, damage, delay or misdelivery, if any. UP shall issue bills of lading
either directly or through APL as agent of UP which advises Participants of the
terms and conditions of the rail transportation.
B. Participants' Volume Commitment
UP shall allow any Domestic Shipments tendered by a
Participant under this Agreement to count toward any annual volume commitment
which that Participant has with UP.
C. International Shipments for TPI Customers
Provisions for TPI Customer shipments are set forth in
Appendix 12.C.
Section 13. RATES/ADJUSTMENT TO RATES
Appendix 13 sets forth UP's rates and charges to APL and the
adjustment mechanisms applicable to those rates and charges.
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Section 14. COMPETITIVE PROPOSALS
Appendix 14 sets forth provisions for the adjustment of UP's
rates and charges to APL as a result of specified market conditions and
competitive circumstances.
Section 15. FORCE MAJEURE
In the event that either party is unable to meet its
obligations under this Agreement as a result of Acts of God, war, insurrection,
strikes, high winds, derailments which result in the normal route being
impassable, heat and cold weather speed restrictions, or any like causes beyond
its control, the performance obligations of the party or parties affected by the
force majeure condition shall be suspended to that extent for the duration of
such event; PROVIDED, HOWEVER, that the parties shall make all best faith
efforts to continue to meet their obligations during the duration of the force
majeure condition; and PROVIDED, FURTHER, that the party declaring force majeure
shall notify the other parties in writing when (a) the force majeure commences,
(b) the nature of the force majeure, and (c) when the force majeure condition is
terminated.
The suspension of any obligation owing to force majeure shall
neither cause the term of this Agreement to be extended nor affect any rights
accrued under this Agreement prior to the force majeure condition.
If the parties are unable to agree on whether an operating
condition constitutes a force majeure condition, the matter shall be brought to
the attention of the APL Vice President-Transportation Purchasing and the UP
Vice President-Intermodal within ten (10) days of the occurrence of the disputed
event for resolution by them.
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Section 16. ARBITRATION
A. Panel
If during the term of this Agreement any dispute between the
parties, except concerning loss and damage, should arise regarding the
interpretation, application or enforcement of any of the terms of this
Agreement, and such dispute cannot be resolved by the parties within sixty (60)
days after either of the parties notified the other of its desire to arbitrate
the dispute, then the dispute shall be settled by arbitration in accordance with
the rules then in effect of the American Arbitration Association. For
arbitration, a panel of three arbitrators shall be named, one to be selected by
UP, one to be selected by APL, and one to be selected by the other two
arbitrators. If the two arbitrators previously appointed by UP and APL cannot
agree upon the third arbitrator within fifteen (15) days, then either party may
apply to the presiding judge of any court of competent jurisdiction for
appointment of a neutral third arbitrator. In the alternative, the parties may
agree on a sole arbitrator.
B. Arbitrators' Findings and Rules of Evidence
The finding of the arbitrator shall be binding on the parties,
subject to provisions of the Federal Arbitration Act. No change in the rules of
arbitration which would deprive a party of the right to be represented by
counsel, to present evidence or to cross-examine witnesses presented by the
other party shall be effective in any arbitration proceeding arising out of this
Agreement.
C. Arbitrators' Duties
The arbitrators shall have no power to modify any of the
contract provisions without the parties' consent, and their jurisdiction is
limited accordingly. The decision of the arbitrators shall be rendered within
ninety (90) days after the matter has been submitted.
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D. Expenses
Each of the parties shall be responsible for the expenses
incurred by the arbitrator appointed by said party, and the expenses, fees and
cost of the third arbitrator, or sole arbitrator shall be borne equally between
the parties.
E. Confidentiality
Any terms and conditions of this Agreement as well as any
confidential cost information which must be disclosed by any party during the
course of arbitration shall only be disclosed pursuant to the arbitrators'
execution of a non-disclosure agreement acceptable to all parties.
Section 17. RENEGOTIATION
A. If performance of the terms of this Agreement, as currently written
or as subsequently modified by the parties or by order, law, rule, regulation of
a competent governmental or regulatory authority would have a material adverse
effect on any party due to causes beyond the control of the materially adversely
affected party, then that party may request in writing that any or all terms of
this Agreement be renegotiated; PROVIDED, HOWEVER, that competitive
transportation proposals or offerings shall not be grounds for such
renegotiation. New terms so renegotiated shall become effective at the time a
renegotiated agreement is executed. If, after renegotiation in good faith, the
parties are unable to agree upon new terms within 90 days of the written request
for renegotiation, any party may terminate this Agreement by giving written
notice of termination to all other parties.
B. The mechanism for any party to this Agreement to request
renegotiation of Rates is set forth in Appendix 17.B.
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Section 18. MUTUAL INDEMNITY
Each party to this Agreement shall indemnify and hold the
other party harmless against all liability, loss, damage, and expense, including
attorneys' fees, reasonably incurred by the other party to the extent that such
liability, loss or damage is caused by the negligent or intentional act or by
any default under this Agreement by any employee, agent or subcontractor of the
indemnifying party. More specifically, UP shall be liable to APL for any loss or
damage to APL owned, leased or controlled Equipment or for any injury to any
employee, agent or subcontractor of APL caused by the negligent or intentional
act or failure to act by UP, its agents and subcontractors to the extent
provided by applicable law. If UP is found liable for such loss, damage or
injury, UP shall also be liable for any expenses, including attorneys' fees,
reasonably incurred by APL in resolving such claims.
APL shall be liable to UP for any loss or damage to UP owned,
leased or controlled Equipment or for any injury to any employee, agent or
subcontractor of UP caused by the negligent or intentional act or failure to act
by APL, its agents and subcontractors to the extent provided by applicable law.
If APL is found liable for such loss, damage or injury, APL shall also be liable
for any expenses, including attorneys' fees, incurred by UP in resolving such
claims.
Section 19. CLAIMS FOR CARGO LOSS AND DAMAGE
A. Domestic Shipments and Third Party Equipment
Liability for loss or damage to any Equipment owned by persons
other than the parties to this Agreement shall be governed by the terms and
provisions of UP's Intermodal Rules and the AAR Container Rules.
Claims for loss or damage to Domestic Shipments shall be
handled by UP with the individual Participant, and UP's liability to the
Participant shall be as set forth in
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UP's Intermodal Rules. APL agrees to cooperate with UP in
settling any claims for loss or damage to Domestic Shipments or to Equipment
owned by persons other than the parties to this Agreement.
B. International Shipments
This section shall govern claims arising out of International
Shipments only.
1. Duties of Parties
UP and APL each undertake, with respect to the other,
(a) to cooperate with each other to settle International cargo
and Equipment damage claims, and to do nothing to increase the liability or
exposure of the other party to increased cargo or equipment damage claims.
(b) to accept liability for actual cargo shortage when a seal
is breached while the cargo is in its possession, unless that party can produce
an executed interchange receipt or other documentation showing that the seal was
broken when the cargo was first received by the party;
(c) to accept liability for cargo and Equipment damage when
carrying Equipment is damaged while in its custody or that of its agents, unless
such party can produce duly executed interchange receipt documentation or other
documentation evidencing that the Equipment was damaged when first received by
such party or that cargo damage was caused by other than such party's handling.
APL will provide all pertinent documentation including any communications from
the individual cargo interest relating to the shipment and all APL
correspondence with the individual cargo interest relating to the shipment as
well as any reports or communications made or ordered by APL while the shipment
was in the possession of
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APL, including, but not limited to, bills of lading, dock receipts, trailer
interchange records, and surveys made of the cargo or equipment.
(d) Nothing in this Agreement shall be defined or construed to
make the package or liability limitations of C.O.G.S.A. unavailable to UP.
C. Processing of Cargo Claims
When APL refers a cargo claim either for Domestic or
International Shipments, to UP, UP shall:
(a) acknowledge receipt of the referred claim to APL within 30
days of such receipt; and,
(b) within 120 days after receipt of the completed referred
claim,
(1) pay the claim;
(2) decline to pay the claim and furnish an explanation of
denial together with any supporting documentation for the denial; or
(3) advise APL as to the status of the claim as required by
Part 1005 of Title 49, Code of Federal Regulations. D. Notification of Damage
Whenever substantial cargo or Equipment damage is brought to
the attention of UP's Damage Prevention Services while the cargo or Equipment is
in the possession of UP, UP shall promptly notify APL concerning the extent of
damage as well as the location and availability of the cargo and Equipment for
inspection, APL shall thereafter notify the cargo interest of any damaged cargo
and obtain the instructions of the cargo interests, if any, and furnish advice
of disposition to UP. UP shall not dispose of any cargo and/or Equipment without
APL's written authorization to do so. Whenever substantial damage is brought to
the attention of APL while the cargo is in the
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possession of APL, APL shall promptly notify UP's Damage Prevention Services as
to the nature of the damage and location of the Equipment.
E. Agreement Only for Benefit of Party
Except as otherwise provided herein, this Agreement shall not
be interpreted as intended for the benefit of, or as providing any legal remedy
for, any person not a party hereto.
F. Condition Precedent
As a condition precedent to recovery on claims for loss or
damage, the liability of UP shall be limited to those cargo claims which are
filed with UP by cargo interests, or by APL when the claim rights of cargo
interests have been subrogated to APL, in writing within nine months (9) from
the date that UP has completed performance under the through ▇▇▇▇ of lading for
such shipment; PROVIDED, HOWEVER, that for shipments moving via UP direct or
where UP is solely responsible for said loss or damage, said filing period shall
be extended to twelve (12) months from the date UP has completed performance
under the through ▇▇▇▇ of lading when said claim is filed with UP by cargo
interests directly, and said filing period shall be extended to fourteen (14)
months from the date UP has completed performance under the through ▇▇▇▇ of
lading when said claim is filed with UP by APL on behalf of cargo.
Section 20. HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES
A. Hazardous Materials
In the event that any International or Domestic Shipment
contains hazardous material, APL International or APL shall obtain certification
on the shipping documents received from the consignor that the consignor has
complied with all appropriate federal regulations governing the transportation
of such hazardous materials, including, but not limited to, regulations
concerning loading, blocking, bracing,
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documentation, placarding, commodity mix, and packaging. APL shall furnish UP
(or the origin carrier) with the hazardous materials information prior to
acceptance for transportation by UP. UP reserves the right to refuse to accept
or restrict hazardous materials. UP shall supply APL with a list of prohibited
hazardous materials not later than 30 days prior to UP's refusal to accept such
hazardous materials under this Agreement.
B. Indemnity
APL shall indemnify UP for all losses, damages, liabilities,
fines, civil penalties and expenses (including attorney's fees) suffered by UP
to the extent caused by the omission of full disclosure required by this Section
or by applicable law or regulation.
Containers discovered leaking hazardous materials at any UP
destination terminal shall not be allowed to leave the premises until (a)
responsibility therefor is determined and/or the leak is repaired, or (b) UP
obtains permission from the involved Government authorities to move the
shipment.
C. Duty of Cooperation
The parties recognize that, as to Domestic Shipments, the
primary responsibility for any spill, discharge, or accident resulting from a
failure by the consignor to comply with applicable federal regulations shall be
the responsibility of the Participants; and that, in the event of a spill,
discharge, or accident resulting from the failure of a consignor or one or more
Participants to properly package, block, brace, or load hazardous materials, or
in the event of a claim, lawsuit, judgment, settlement, citation, fine or
penalty arising out of such failure, UP shall assist APL by furnishing all
relevant communications, data, information and reports to APL.
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Section 21. FEDERAL CONTRACTOR REQUIREMENTS
A. Applicable Laws
The parties, each for its own part, shall comply with and give
all representations and further assurances required by any law or regulation
applicable to federal contracts and subcontracts including, without limitation,
the following:
(1) the extent applicable, the Renegotiation Act of 1951, as
amended, (50 U.S.C. App.ss.ss.1211 et seq.,), the ▇▇▇▇▇-▇▇▇▇▇ Public Contracts
Act, as amended (41 U.S.C.ss.ss.35, 45), and the Contract Work Hours and Safety
Standards Act, as amended (40 U.S.C.ss.ss.327,333); (2) to the extent
applicable, Executive Order No. 11246 dated September 24, 1965, as amended,
relating to equal employment opportunity and affirmative action in employment of
persons without regard to race, color, religion, sex or national origin;
Executive Order No. 11701 dated January 24, 1973, relating to affirmative action
in the employment of certain veterans; Executive Order No. 11758 dated January
15, 1974, relating to affirmative action in employment of handicapped
individuals; Executive Order No. 11 625 dated October 13, 1971, relating to the
assistance of minority business enterprises; Executive Order No. 12138 dated May
18, 1979, relating to the assistance of women's business enterprises; the Age
Discrimination Act of 1975; all applicable Regulations of the Secretary of
Labor, including, but not limited to, 41 C.F.R.ss.ss.60-1.4 et seq.; 41
C.F.R.ss.ss.60-250 et seq.; and 41 C.F.R.ss.ss.60-741 et seq.; and all
applicable Federal Procurement Regulations including, but not limited to, 41
C.F.R.ss.ss.1-1.13 et seq.; and,
(3) to the extent applicable, Defense Acquisition
Regulations-104.14, relating to the utilization of small business and minority
business concerns; and 7-104.20, relating to the utilization of labor surplus
area concerns.
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B. Certification
Each party hereby certifies to the other that it does not and
shall not maintain any facilities provided for employees which are unlawfully
segregated, that it does not and shall not permit employees to perform services
at any location under its control or that of its subcontractors where unlawfully
segregated facilities are maintained, and that it shall require its non-exempt
subcontractors to furnish a similar certification to the award of any non-exempt
contract.
Section 22. OTHER AGREEMENTS
This Agreement and the Original Agreement, as amended and
supplemented and in effect through the date of this Agreement (including,
without limitation, the Letter of Understanding dated April 4, 2002, between the
parties), together comprise the entire agreement and understanding between the
parties regarding the subject matter hereof and thereof and supersede all other
existing and prior agreements between the parties with respect to such subject
matter; provided, however, that the termination of any and all existing and
prior agreements shall not release any party from any obligation that may have
accrued under those agreements prior to such termination.
Section 23. WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL RULES APPLY
The provisions relating to the applicability of UP's
Intermodal Rules are set forth in Appendix 23 and Exhibit Z.
Section 24. ASSIGNMENT
Except as expressly allowed by this Section, no party to this
Agreement may assign this Agreement, in whole or in part, or assign any rights
granted by or under this Agreement, or delegate to any person not a party to
this Agreement any of its
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obligations under this Agreement without the prior written consent of the other
party. In the event of an acquisition or merger of UP by another Class I
railroad or by UP of another Class I railroad, APL International, APL Co. and/or
LTS have the right (1) to refuse its agreement to allow UP to assign this
Agreement to the acquiring or merging party(ies) and (2) if UP attempts to
assign this Agreement, to terminate this Agreement upon thirty (30) days written
notice at any time subsequent to the consummation of the transaction between UP
and the other party(ies). Similarly, in the event of a major restructuring of
APL International, APL Co. and/or LTS which (a) would result in a significant
change in the volume of Containers tendered by APL International, APL Co. and/or
LTS to UP or (b) would significantly increase the cost of doing business for UP
or (c) would significantly change UP's operational or administrative efficiency
of doing business with APL International, APL Co. and/or LTS, or (d) would
significantly impact UP's position negatively in the intermodal market; UP has
the right to refuse its agreement to allow APL International, APL Co. and/or LTS
to assign this Agreement. However, if the major restructuring of APL
International, APL Co. and/or LTS does not result in any of the changes
described in (a) through (d) of the immediately preceding sentence, APL
International, APL Co. and/or LTS may assign this Agreement without UP's
consent. In the event that UP's consent is required because a major
restructuring of APL International, APL Co. and/or LTS would result in (a), (b),
(c) , or (d) above, and UP does not grant its consent to the assignment on that
basis, the parties shall engage in renegotiation of the Agreement in an effort
to obtain UP's consent. In the event the parties cannot successfully renegotiate
this Agreement, LTS shall have the right to terminate this Agreement in its
entirety as to all parties. In the event that LTS terminates this Agreement
pursuant to the above sentence, APL International, APL Co. and LTS will
transition their business to a new carrier as soon as possible, but no longer
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than six (6) months after termination of this Agreement. Subject to this
Section, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their permitted successors and assigns.
For purposes of this Section, a major restructuring is defined
as a merger, sale of substantially all assets or other change of control. An
initial public offering of shares of APL International, APL Co. and/or LTS shall
not be considered to result in any of the changes described in (a) through (d)
above; and, therefore, shall not be considered to require UP's consent to
assignment of this Agreement.
Section 25. YEAR 2000 COMPLIANCE
UP and APL each represent and warrant (i) it has audited its
computer hardware and software systems which will be utilized in connection with
this Agreement and (ii) that accurate and current information regarding the Year
2000 Compliance status of such hardware and software systems and the party's
plans to address Year 2000 Compliance problems have been supplied or made
available to the other party. UP and APL each further represent and warrant that
they will cooperate with each other in providing or making available updated
information regarding their Year Compliance program upon reasonable request.
Any costs associated with effectuating Year 2000 Compliance
shall be borne by each party and shall not result in any additional charges to
the other under this Agreement.
When data is exchanged between UP and APL as part of this
Agreement, UP and APL each agree to provide to the other, at no additional cost,
reasonable testing assistance and cooperation in order to verify Year 2000
Compliance. Each party shall designate a Year 2000 Technical Contact person with
sufficient knowledge, experience, and expertise in areas of the Year 2000
problem and the party's systems environment,
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who will be available to facilitate answering questions, coordinate deliverables
for testing Year 2000 compliance and provide other assistance as needed.
For purposes of this Section, "Year 2000 Compliance" means
that each computer hardware and software system or component thereof (including
without limitation hardware, firmware, middleware, custom or commercial
software, internal components or subroutines therein, or databases which perform
any date/time data recognition function, calculation, comparing or sequencing)
will (a) accurately record, process, store and display date and time data
(including but not limited to calculating, comparing and sequencing) on dates
from, into and between different centuries, including the years 1999 and 2000
and including leap year calculations, (b) will respond to two-digit date input
in a way that resolves any ambiguity as to century in a disclosed and defined
manner, (c) will store and provide output of date information in ways that are
unambiguous as to century, and (d) will conform to the foregoing requirements
when interfacing with operating systems and other software, hardware and systems
with which it will interact in performing any obligations under this Agreement.
Section 26. NOTICES
-------
Except as provided otherwise in this Agreement, any and all
notices given by any party under this Agreement shall be in writing and shall be
delivered (postage or other delivery charges prepaid) to the other parties by
USPS Express Mail, UPS, DHL, Federal Express or other established expedited
courier service, telecopy, facsimile or like wire delivery or any other
commercially reasonable and accepted form of delivery, excluding regular U.S.
Postal Service, to the following addressees:
To LTS: Pacer International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Vice President-Transportation Purchasing
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To APL Co./ American President Lines, Ltd.
APL International: APL Co. PTE, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Vice President-Transportation Purchasing
To UP: Union Pacific Railroad Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: Vice President -Intermodal
Any written notice given under this Agreement shall be deemed effective on the
date the notice is received.
Section 27. CONFIDENTIALITY
The parties agree that the commercial terms of this Agreement
and its appendices are confidential and proprietary, and that unauthorized
disclosure could be damaging from a commercial or competitive standpoint under
many circumstances. Therefore, except as otherwise provided in this Agreement
and except to the extent required by law, the contents of this Agreement shall
not be disclosed or released by any party to anyone other than that party's
employees on a "need to know" basis without the written consent of the other
party during the term of this Agreement and for one (1) year thereafter. Any
employee having access to any part of this Agreement or to any information
contained within the Agreement must agree to abide by the terms of this
provision. This includes, without limitation, rate information of any kind,
customer identities, traffic volumes and commodities moving via APL, train
schedules and/or performances, and any other information learned by one party
about the other's business during the course of their dealings thereunder.
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Section 28. VENUE
-----
Any lawsuits filed by either party against the other arising
from any dispute between the parties during the term of this Agreement shall be
brought in the San Francisco, California judicial district, either state or
federal.
Section 29. APPLICABLE LAW
This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California, without reference to the
laws of any other jurisdiction except to the extent governed by the laws, rules
and regulations of the United States.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first written above.
UNION PACIFIC RAILROAD COMPANY Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: President and C.O.O. Secretary
---------------------------------
PACER INTERNATIONAL, INC. Attest:
d/b/a Pacer Stacktrain
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President Secretary
---------------------------------
AMERICAN PRESIDENT LINES, LTD. Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President Secretary
---------------------------------
APL CO. PTE LTD. Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Authorized Signatory Secretary
--------------------------------
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