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Hub Group

hubg · NASDAQ Industrials
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Ticker hubg
Exchange NASDAQ
Sector Industrials
Industry Integrated Freight & Logistics
Employees 1001-5000
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FY1996 Annual Report · Hub Group
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 ===============================================================================                      SECURITIES AND EXCHANGE COMMISSION                             Washington, D.C. 20549                                   FORM 10-K(Mark One)    [X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities         Exchange Act of 1934                  For the fiscal year ended December 31, 1996                                      OR    [ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities         Exchange Act of 1934                          Commission File No. 0-27754                               __________________                                HUB GROUP, INC.             (Exact name of registrant as specified in its charter)                                    Delaware                              36-4007085      (State or other jurisdiction of                (I.R.S. Employer       incorporation of organization)               Identification No.)                      377 E. Butterfield Road, Suite 700                            Lombard, Illinois 60148             (Address and zip code of principal executive offices)                                (630) 271-3600             (Registrant's telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act: NoneSecurities registered pursuant to Section 12(g) of the Act:                      Class A Common Stock, $.01 par value                                (Title of Class)Indicate by check mark whether the Registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes  X   No                                         ---     ---Indicate by check mark if disclosure of delinquent filers pursuant to Item 405of Regulation S-K is not contained herein, and will not be contained, to thebest of Registrant's knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K. [X]The aggregate market value of the Registrant's voting stock held by non-affiliates on March 6, 1997, based upon the last reported sale price on thatdate on the Nasdaq National Market of $27 3/4 per share, was $145,314,262.On March 17, 1997, the Registrant had 5,262,750 outstanding shares of Class Acommon stock, par value $.01 per share, and 662,296 outstanding shares of ClassB common stock, par value $.01 per share.                      Documents Incorporated by Reference                                        The Registrant's definitive Proxy Statement for the Annual Meeting ofStockholders to be held on May 14, 1997, (the "Proxy Statement") is incorporatedby reference in Part III of this Form 10-K to the extent stated herein. Exceptwith respect to information specifically incorporated by reference in this Form10-K, the Proxy Statement is not deemed to be filed as a part hereof.================================================================================                                     PART IItem 1. BUSINESSGeneral          Hub Group, Inc. ("Hub Group" or the "Company") is a Delawarecorporation which was incorporated on March 8, 1995.  Since its founding as anintermodal marketing company ("IMC") in 1971, the Company has become a fullservice transportation provider.  As the largest IMC in the United States, HubGroup, acting as agent, arranges for the movement of its customers' freight incontainers and trailers over long distances.  In addition, Hub Group arrangesfor the transportation of freight by truck where intermodal transportation isnot available or economical and performs comprehensive logistics services.          The Company operates through an extensive nationwide network of 34offices or "Hubs."  Each Hub is strategically located in a market that has asignificant concentration of shipping customers and one or more railheads.  EachHub functions essentially as a stand alone business managed locally by anexecutive, known as a "Principal," with significant transportationexperienceand, with the exception of Hub Chicago (defined below), Hub Tennessee(defined below), Hub North Central (defined below) and Hub City New Orleans,L.P., an equity ownership interest in that Hub. Local management is responsiblefor operations, customer service and regional marketing, while corporatemanagement is responsible for group strategic planning and administration,financial services, relationships with the railroads, management of theCompany's logistics services business and management information systemssupport. Hub Group also maintains a National Accounts sales force to providecentralized marketing of the Company's services to large and geographicallydiversified shippers.          On March 18, 1996, Hub Group purchased Hub City Terminals, Inc. ("HubChicago") in a stock-for-stock acquisition.  Concurrent with the acquisition ofHub Chicago, Hub Group completed the initial public offering of 4,261,250 sharesof its Class A common stock (the "Class A Common Stock"), with net proceeds toHub Group of $52.9 million.  Simultaneously with the initial public offering,Hub Group, through its new wholly owned subsidiary, Hub Chicago, acquired withcash the general partnership interests in 26 operating partnerships, each withone or more offices.  In addition, Hub Group directly acquired with cash acontrolling interest in the Hub Group Distribution Services partnership ("HubDistribution") which performs certain  specialized logistics functions (each ofthe 26 operating partnerships and Hub Distribution are a "Hub Partnership" andcollectively are the "Hub Partnerships").  With the exception of HubDistribution, the Company has the continuing option, exercisable any time afterthe Principal currently associated with a Hub Partnership ceases to be anemployee, to purchase the limited partnership interest in that Hub Partnership.The decision as to whether or when to exercise an option to acquire the limitedpartnership interest in a Hub Partnership will be made by the independentmembers of the Company's Board of Directors. Unless the context otherwiserequires, references to "Hub Group" or the "Company" include Hub Chicago, theHub Partnerships and their respective subsidiaries.          In addition to the acquisitions made in connection with the initialpublic offering, the Company made the following strategic investments in 1996.In April 1996, the Company's newly formed joint venture with Norton LillyInternational Inc. ("Norton Lilly"), a large steamship agent, began operations.The joint venture facilitates international shipments of freight originating inor destined for the United States. The North American intermodal freightmovements arranged by the joint venture are handled by the Hub network.  NortonLilly is responsible for arranging steamship passage and local transportation inforeign countries.  On May  2, 1996, the Company acquired the domesticintermodal marketing business of American President Lines Domestic DistributionServices ("APLDDS") from American President Companies, Ltd. ("APC").  As aresult of the APLDDS acquisition, the Company acquired the right to serviceAPLDDS customers, but did not assume any assets or liabilities associated withthat business.  The Company hired 36 experienced intermodal personnel from theAPLDDS organization. On August 1, 1996, the Company purchased the remaining 70%minority interest in one of the Hub Partnerships, Hub City Tennessee, L.P. ("HubTennessee"). On December 12, 1996, the Company purchased the remaining 70%                                       1  minority interest in another Hub Partnership, Hub City North Central, L.P. ("HubNorth Central").Services Provided          The Company's transportation services can be broadly placed into thefollowing categories:          Intermodal  As part of its intermodal services, the Company contractswith railroads to provide transportation over the long-haul portion of theshipment and, when not providing the services itself, contracts with drayagecompanies for local pickup and delivery. The Company also negotiates rail anddrayage rates, electronically tracks shipments in transit, consolidates billingand handles claims for freight loss or damage on behalf of its customers. TheCompany uses its Hub network, connected through its proprietary advancedintermodal management ("AIM") system, to access containers and trailers owned byleasing companies, railroads and steamship lines. Because each Hub not onlyhandles its own outbound shipments but also handles inbound shipments from otherHubs, each Hub is able to track trailers and containers entering its servicearea and use that equipment to fulfill its customers' outbound shippingrequirements. This effectively allows the Company to "capture" containers andtrailers and keep them within the Hub network without having to make a capitalinvestment in transportation equipment.          The Company's ability to deliver its intermodal customers' freight ontime depends on the quality and service provided by the drayage companies withwhich it does business.  Due to the size of these drayage companies and theirlimited access to capital for expansion, the Company's future growth will dependin part on its ability to identify additional local drayage capacity to servicethe Company's customers.  In some locations, drayage service is limited orcustomers require an enhanced level of service which cannot be competitivelyaccommodated by a third-party provider. In these locations, the Company hasbegun to supplement third party drayage operations with company-owned tractorsto service portions of the Company's intermodal business.  See Item 7Management's Discussion and Analysis - Liquidity and Capital Resources.          Brokerage  The Company arranges for the transportation of freight bytruck, providing customers another option for their transportation needs. Thisis accomplished by matching customers' needs with carriers' capacity to providethe best service and price combination. The Company has contracts with asubstantial base of carriers allowing it to meet the varied needs of itscustomers. The Company negotiates rates, tracks shipments in transit,consolidates billing and handles claims for freight loss and damage on behalf ofits customers. The Company's brokerage operation also provides customers withspecialized programs. Through the Dedicated Trucking program, certain carriersagree to move freight for Hub's customers on a continuous basis. Thisarrangement allows Hub to gain control of the trucking equipment to effectivelymeet its customer's needs without owning the equipment. Through the ManagedCarrier program, Hub assumes the responsibility for all truckloads thecustomer's core carriers cannot handle. This program is tailored to eachcustomer, and provides the customer with increased control and improved servicedue to Hub's resources and expertise.          Logistics  The Company has expanded its service capabilities ascustomers increasingly outsource their logistics needs.  Logistics functionscurrently offered include comprehensive transportation management, arranging fordelivery to multiple locations at the shipment's destination, third partywarehousing and other customized logistics services, as well as other non-traditional logistics services such as installation of point of sale merchandisedisplays.          The Company operates its comprehensive transportation managementbusiness from its corporate headquarters in Lombard, Illinois.  From thiscentral location, the Company's Hub Logistics division provides completetransportation services, essentially replacing the customer's transportationdepartment.  Once the Company is hired as a single source logistics provider,Hub Logistics negotiates with intermodal, railcar, truckload and less-than-truckload carriers to move the customer's product through the supply chain andthen dispatches the move for the customer.  Using its advanced transportationmanagement software, Hub Logistics consolidates orders into full truckloadshipments, chooses a shipping route, electronically tenders loads to carriersand reports the move to the customer.                                       2 Hub Network          Over the past 25 years, Hub Group has grown from a single office withtwo employees into a network of 32 Hubs in the United States, one Hub in Canadaand one Hub in Mexico. Hub Group also has several satellite sales offices. Indeveloping this network, the Company has carefully selected each location toensure coverage in areas with significant concentrations of shipping customersand one or more railheads. Hub Group currently has Hubs in the following cities:           Atlanta       Grand Rapids    Milwaukee        Rochester          Baltimore     Houston         Minneapolis      St. Louis          Birmingham    Indianapolis    New Haven        Salt Lake City          Boston        Jacksonville    New Orleans      San Antonio          Chicago(3)    Kansas City     New York City    San Francisco          Cleveland     Los Angeles     Philadelphia     Seattle          Dallas        Memphis         Pittsburgh       Toledo          Detroit       Mexico City     Portland         TorontoThe entire Hub network is interactively connected through the Company's AIMsystem. This enables Hub Group to move freight into and out of every major cityin the United States and most locations in Canada and Mexico.          Each Hub manages the freight originating in or destined for itsservice area. In a typical intermodal transaction, the customer contacts thelocal Hub to obtain shipping schedules and a price quote for a particularfreight movement. The local Hub obtains the necessary intermodal equipment,arranges for it to be delivered to the customer by a drayage company and, afterthe freight is loaded, arranges for the transportation of the container ortrailer to the rail ramp.  Information is entered into the AIM system by thelocal Hub, which monitors the shipment to ensure that it will arrive asscheduled. This information is simultaneously transmitted through the AIM systemto the Hub closest to the point of delivery, which arranges for and confirmsdelivery by a drayage company.  This arrangement among the Hubs is transparentto the customer and allows the customer to maintain its relationship solely withthe originating Hub.          The Company provides brokerage services to its customers in a similarmanner.  In a typical brokerage transaction, the customer contacts the local Hubto obtain transit information and a price quote for a particular freightmovement. The customer then provides appropriate shipping information to thelocal Hub. The local Hub makes the delivery appointment and arranges with theappropriate carrier to pick up the freight. Once it receives confirmation thatthe freight has been picked up, the local Hub monitors the movement of thefreight until it reaches its destination and the delivery has been confirmed. Ifthe carrier notifies Hub Group that after delivering the load it will needadditional freight, the Hub located nearest the destination is notifiedelectronically of the carrier's availability. The ability of Hub to providereloads for carriers reduces the risk that the carrier will return empty.Marketing and Customers          The Company believes that fostering long-term customer relationshipsis critical to the Company's success. Through these long-term relationships, theCompany is able to better understand its customer's needs and to tailortransportation services for a specific customer, regardless of the customer'ssize or volume. The Company has created a database of current and prospectivecustomers, profiling each customer's shipping patterns, which the Companyperiodically updates. This database allows the Company to target its marketingto meet each customer's specific requirements.                                       3           The Company currently has full time marketing representatives at eachHub with primary responsibility for servicing local and regional accounts. Thesesales representatives work from the 34 Hubs and the Company's satellite salesoffices. This network provides a local marketing contact for small and mediumshippers in most major metropolitan areas within the United States.          In 1985, the Company organized National Accounts to service the needsof the nation's largest shippers. The Company recognized that although largeshippers originate freight from multiple locations throughout the country, theirlogistics function is usually centralized. The Company essentially mirrored thisstructure by servicing national accounts from a central location and parcelingout the servicing of individual freight shipments to the appropriate Hub.  Theare currently 16 National Accounts sales representatives who report to theCompany's Executive Vice President of National Accounts. The National Accountssales representatives regularly call on the nation's largest shippers to developbusiness relationships and to expand the Company's participation in servicingtheir transportation needs. When a business opportunity is identified by aNational Accounts sales representative, the Company's market development andpricing personnel and the local Hubs work together to provide a transportationsolution tailored to the customer's needs. Local Hubs provide transportationservices to National Accounts customers. After the plan is implemented, NationalAccounts' personnel maintain regular contact with the shipper to ensure customersatisfaction and to refine the process as necessary.          This unique combination of local and regional marketing has produced alarge, diverse customer base. The Company services customers in a wide varietyof industries, including consumer products, printing, paper, retail, chemicalsand electronics.Management Information System          A primary component of the Company's business strategy is thecontinued improvement of its AIM system and other technology to ensure that theCompany will remain a leader among transportation providers in informationprocessing for intermodal transportation. The AIM system consists of a networkof IBM AS/400 computers located at the Hubs and linked to a host computer at theCompany's headquarters. Hub Group uses IBM's Global Network as the nucleus forlinking its computers and databases. This configuration provides a real timeenvironment for transmitting data among the Hubs and the Company's headquartersusing electronic data interchange ("EDI"), electronic mail and other protocols.It also allows Hub to communicate electronically with each railroad, certaindrayage companies and those customers with EDI capabilities.          The Company's proprietary AIM system is the primary mechanism used bythe Hubs to process customer transportation requests, schedule and trackshipments, prepare customer billing, establish account profiles and retaincritical information for analysis. The AIM system provides mainframe-to-mainframe connectivity with each of the major rail carriers, enabling theCompany to electronically schedule and track shipments in a real timeenvironment. In addition, the AIM system's EDI features offer customers with EDIcapability a completely paperless process, including load tendering, shipmentdispatch, shipment tracking, customer billing and remittance processing. TheCompany aggressively pursues opportunities to establish EDI interfaces with itscustomers and carriers.Relationship with Railroads          A key element of the Company's business strategy is to strengthen itsclose working relationship with each of the major intermodal railroads in theUnited States. The Company views its relationship with the railroads as apartnership. Due to the Company's size and relative importance, many railroadshave dedicated support personnel to focus on the Company's day-to-day servicerequirements. On a semi-annual basis, senior executives of the Company and eachof the railroads meet to discuss major strategic issues concerning intermodaltransportation. Several of the Company's executive officers, including both theCompany's Chairman and President, are former railroad employees, which makesthem well-suited to understand the railroads' service capabilities.                                       4            The Company has contracts with each of the following railroads:          Atchison, Topeka & Santa Fe       Illinois Central          Burlington Northern               Kansas City Southern          Canadian Pacific                  Norfolk Southern          Conrail                           Southern Pacific          CSX                               Union Pacific           These contracts govern the transportation services and payment termspursuant to which the Company's intermodal shipments are handled by therailroads. The contracts have staggered renewal terms with the earliestexpiration at the end of June 1997.  While there can be no assurances that thesecontracts will be renewed, the Company has in the past successfully negotiatedextensions of the contracts with the railroads. Transportation rates are marketdriven and are typically negotiated between the Company and the railroads on acustomer specific basis. Consistent with industry practice, many of the ratesnegotiated by the Company are special commodity quotations ("SCQs"), whichprovide discounts from published price lists based on competitive market factorsand are designed by the railroads to attract new business or to retain existingbusiness. SCQ rates are generally issued for the account of a single IMC. SCQrates apply to specific customers in specified shipping lanes for a specificperiod of time, usually six to 12 months.Relationship with Drayage Companies          In 1990, the Company instituted its "Quality Drayage Program," whichconsists of agreements and rules that govern the framework pursuant to which thedrayage companies perform services for the Company. Participants in the programcommit to provide high quality service, clean and safe equipment, maintain acertain on-time performance level and follow specified procedures designed tominimize freight loss and damage.  Whenever possible, the Company uses theservices of drayage companies that participate in its Quality Drayage Program.However, during periods of high demand for drayage services or at the request ofa customer, the Company will use the services of other drayage companies.  Thelocal Hubs negotiate drayage rates for transportation between specific originand destination points. These rates generally are valid, with minor exceptionsfor fuel surcharge increases, for a period of one year.Relationship with Truckload Carriers          The Company's brokerage operation has a large and growing number ofactive carriers in its database which it uses to transport freight.  The localHubs deal daily with these carriers on an operational level.  Hub HighwayServices handles the administrative and regulatory aspects of the carrierrelationship.  Hub views its relationships with its carriers as important sincethese relationships determine pricing, load coverage and overall service.Risk Management and Insurance          The Company requires all drayage companies participating in theQuality Drayage Program to carry at least $1.0 million in general liabilityinsurance and $1.0 million in cargo insurance. Railroads, which are selfinsured, provide limited common carrier liability protection, generally up to$250,000 per shipment, although higher coverage is available on a load-by-loadbasis. To cover freight damage when a carrier's liability cannot be establishedor a carrier's insurance is insufficient to cover freight loss or damage, theCompany carries its own $1.5 million cargo insurance and $2.0 million generalliability insurance. The Company also carries a companion $10.0 million umbrellapolicy on its general liability insurance.                                       5 Government Regulation          Hub Highway Services, a partnership controlled by the Company, islicensed by the Department of Transportation ("DOT") as a broker in arrangingfor the transportation of general commodities by motor vehicle. To the extentthat the Hubs perform truck brokerage services, they do so under the licensegranted to Hub Highway Services. The DOT prescribes qualifications for acting inthis capacity, including certain surety bonding requirements. While the DOTrequires a $10,000 surety bond to maintain this license, the Company hasvoluntarily posted a $100,000 surety bond. To date, compliance with theseregulations has not had a material adverse effect on the Company's results ofoperations or financial condition. However, the transportation industry issubject to legislative or regulatory changes that can affect the economics ofthe industry by requiring changes in operating practices or influencing thedemand for, and cost of providing, transportation services.Competition          The transportation services industry is highly competitive. TheCompany competes against other IMCs, as well as logistics companies, third partybrokers and railroads that market their own intermodal services. In addition,there is an emerging trend for larger truckload carriers to enter intoagreements with railroads to market intermodal services nationwide. Competitionis based primarily on freight rates, quality of service, reliability, transittime and scope of operations. Several transportation service companies andtruckload carriers, and all of the major railroads, have substantially greaterfinancial and other resources than the Company.General          Employees  As of February 28, 1997, the Company had approximately1,050 employees. The Company is not a party to any collective bargainingagreement and considers its relationship with its employees to be satisfactory.          Other  No material portion of the Company's operations is subject torenegotiation of profits or termination of contracts at the election of thefederal government.  The Company has not spent a material amount on companysponsored research and development activities or on customer sponsored researchactivities.  None of the Company's patents and trademarks is believed to bematerial to the Company.  The Company's business is seasonal to the extent thatcertain customer groups, such as retail, are seasonal.Item 2.  PROPERTIES          The Company directly, or indirectly through the Hub Partnerships,operates 40 offices throughout the United States and in Canada and Mexico,including the Company's headquarters in Lombard, Illinois, its National Accountsoffice in Stamford, Connecticut, four National Accounts sales offices, HubLogistics offices in Lombard and Stamford and Hub Distribution's office. Theoffice buildings used by the Hubs located in Milwaukee, Toledo, Detroit andKansas City are owned, and the remainder are leased. The office building inKansas City is subject to a mortgage. Most office leases have initial terms ofmore than one year, and many include options to renew. While some of theCompany's leases are month-to-month and others expire in the near term, theCompany does not believe that it will have difficulty in renewing them or infinding alternative office space. The Company believes that its offices areadequate for the purposes for which they are currently used.Item 3.  LEGAL PROCEEDINGS          The Company is a party to routine litigation incident to its business,primarily claims for freight lost or damaged in transit or improperly shipped.Most of the lawsuits to which the Company is party are covered by                                       6 insurance and are being defended by the Company's insurance carriers. Managementdoes not believe that the litigation to which it is currently a party, ifdetermined adversely to the Company, would individually or in the aggregate havea materially adverse effect on the Company's financial position or results ofoperations. See Item 1 Business - Risk Management and Insurance.Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS          There were no matters submitted to a vote of the Company's securityholders during the fourth quarter of 1996.Executive Officers of the Registrant          In reliance on General Instruction G to Form 10-K, information onexecutive officers of the Registrant is included in this Part I. The table setsforth certain information as of March 20, 1997 with respect to each person whois an executive officer of the Company.           Name               Age                        Position- ----------------------      ---  ----------------------------------------------------                                            Phillip C. Yeager      69   Chairman of the Board of Directors     David P. Yeager        44   Vice Chairman of the Board of Directors and Chief                                 Executive Officer     Thomas L. Hardin       51   President, Chief Operating Officer and Director     William L. Crowder     54   Vice President--Finance, Chief Financial Officer                                 and Treasurer     Daniel F. Hardman      48   President--Chicago Region     Mark A. Yeager         32   Vice President, Secretary and General Counsel     John T. Donnell        57   Executive Vice President--Marketing     Robert L. Maro         44   Vice President--Information Services     Robert J. Jensen       42   President--Hub Group Operations Management          Phillip C. Yeager, the Company's founder, has been Chairman of theBoard since October 1985. From April 1971 to October 1985, Mr. Yeager served asPresident of Hub Chicago. Mr. Yeager became involved in intermodaltransportation in 1959, five years after the introduction of intermodaltransportation in the United States, as an employee of the Pennsylvania andPennsylvania Central Railroads. He spent 19 years with the Pennsylvania andPennsylvania Central Railroads, 12 of which involved intermodal transportation.In 1991, Mr. Yeager was named the Man of the Year by the IntermodalTransportation Association. In 1995, he received the Salzburg PractitionersAward from Syracuse University in recognition of his lifetime achievements inthe transportation industry. In October 1996, Mr. Yeager was inducted into theChicago Area Entrepreneurship Hall of Fame sponsored by the University ofIllinois at Chicago. In March 1997, he received the Presidential Medal fromDowling College for his achievements in transportation services. Mr. Yeagergraduated from the University of Cincinnati in 1951 with a Bachelor of Artsdegree in Economics. Mr. Yeager is the father of David P. Yeager and Mark A.Yeager and the father-in-law of Robert J. Jensen.                                       7           David P. Yeager has served as the Company's Vice Chairman of the Boardsince January 1992 and as Chief Executive Officer of the Company since March1995. From October 1985 through December 1991, Mr. Yeager was President of HubChicago. From 1983 to October 1985, he served as Vice President, Marketing ofHub Chicago. Mr. Yeager founded the St. Louis Hub in 1980 and served as itsPresident from 1980 to 1983. Mr. Yeager founded the Pittsburgh Hub in 1975 andserved as its President from 1975 to 1977. Mr. Yeager received a Masters inBusiness Administration degree from the University of Chicago in 1987 and aBachelor of Arts degree from the University of Dayton in 1975. Mr. Yeager is theson of Phillip C. Yeager, the brother of Mark A. Yeager and the brother-in-lawof Robert J. Jensen.          Thomas L. Hardin has served as the Company's President since October1985 and has served as Chief Operating Officer and a director of the Companysince March 1995. From January 1980 to September 1985, Mr. Hardin was VicePresident-Operations and from June 1972 to December 1979, he was General Managerof the Company. Prior to joining the Company, Mr. Hardin worked for the MissouriPacific Railroad where he held various marketing and pricing positions. During1996, Mr. Hardin was Chairman of the Intermodal Association of North America.          William L. Crowder has been the Company's Vice President of Financeand Chief Financial Officer since April 1994 and Treasurer since July 1996. FromJanuary 1990 through December 1993, Mr. Crowder was Vice President of Financeand Treasurer of Sears Logistics Services, Inc., a transportation, distributionand home delivery subsidiary of Sears Roebuck & Company. Mr. Crowder worked atSears Roebuck & Company from 1966 through 1989 in various senior financialmanagement positions. Mr. Crowder received a Bachelors of BusinessAdministration degree from Georgia State University in 1966.           Daniel F. Hardman has been the President--Chicago Region sinceFebruary 1996. Mr. Hardman has been employed by the Hub Group since 1982,serving as President of Hub Chicago from December 1992 to February 1996, VicePresident of Hub Chicago from January 1987 to December 1992, General Manager ofSales of Hub Chicago from August 1985 to January 1987, President of HubCharlotte from June 1984 to August 1985 and Regional Sales Manager of HubChicago from December 1982 to June 1984. Mr. Hardman is a former Director of theIntermodal Transportation Association and is presently a member of the ChicagoTraffic Club and the Chicago Intermodal Transportation Association. Mr. Hardmanis a 1991 graduate of the Certificate Program in Business Administration fromthe University of Illinois.         Mark A. Yeager has been the Company's Vice President, Secretary andGeneral Counsel since March 1995. From May 1992 to March 1995, Mr. Yeager servedas the Company's Vice President--Quality. Prior to joining the Company in 1992,Mr. Yeager was an associate at the law firm of Grippo & Elden from January 1991through May 1992 and an associate at the law firm of Sidley & Austin from May1989 through January 1991. Mr. Yeager received a Juris Doctor degree fromGeorgetown University in 1989 and a Bachelor of Arts degree from IndianaUniversity in 1986. Mr. Yeager is the son of Phillip C. Yeager, the brother ofDavid P. Yeager and the brother-in-law of Robert J. Jensen.           John T. Donnell has been Executive Vice President of Marketing sinceOctober 1993. From October 1985 through October 1993, Mr. Donnell served as VicePresident of National Accounts. Prior to joining the Company in 1985, Mr.Donnell worked for Transamerica Leasing as Vice President of Marketing where hewas responsible for marketing 40,000 intermodal trailers to the railroads andthe intermodal marketing industry. Mr. Donnell received a Master of BusinessAdministration degree from Northwestern University in 1981 and a Bachelor ofScience degree in Marketing from Northeast Louisiana University in 1961.         Robert L. Maro has been Vice President of Information Services sinceNovember 1991. From January 1978 through November 1991, Mr. Maro worked asDirector of Operations for Zink & Katich, an information technology consultingfirm that provided consulting services to the Company. Mr. Maro received aBachelor of Science degree in Mathematics from Chicago State University in 1974.                                       8           Robert J. Jensen has been President of Hub Group Operations Managementsince July 1991. He served as President of Hub St. Louis from July 1985 throughJuly 1991 and as General Manager of Hub St. Louis from October 1980 through July1985. Mr. Jensen received a Bachelor of Science degree in Finance from theUniversity of Illinois in 1977. Mr. Jensen is the son-in-law of Phillip C.Yeager and the brother-in-law of both David P. Yeager and Mark A. Yeager.                                    PART IIItem 5.  MARKETS FOR REGISTRANTS COMMON EQUITY AND RELATED SHAREHOLDER MATTERS          The Class A Common Stock of the Company trades on the Nasdaq NationalMarket tier of The Nasdaq Stock Market ("Nasdaq") under the symbol "HUBG." TheClass A Common Stock was first traded on Nasdaq on March 13, 1996, concurrentwith the underwritten initial public offering of the Company's Class A CommonStock at an initial price to the public of $14.00 per share (the "Offering").Prior to the Offering, there was no established public trading market for theClass A Common Stock. Set forth below are the high and low prices for shares ofthe Class A Common Stock of the Company in 1996 from March 13, 1996, the date ofthe Offering, through the end of the first quarter of 1996 and for each fullquarterly period thereafter in 1996.                                              1996                                           --------                                        High      Low                                        ----      ---                                                      First Quarter (From March 13, 1996)    $19       $14Second Quarter                         24 1/4    17 5/8Third Quarter                          22 5/8    16Fourth Quarter                         27 1/2    21 1/4           On March 24, 1997, there were approximately 41 stockholders ofrecord of the Class A Common Stock and, in addition, there were an estimated3,325 beneficial owners of the Class A Common Stock whose shares were held bybrokers and other fiduciary institutions. On March 24, 1997, there were nineholders of record of the Company's Class B common stock (the "Class B CommonStock" together with the Class A Common Stock, the "Common Stock").          The Company was incorporated in 1995 and has never paid cash dividendson either the Class A Common Stock or the Class B Common Stock. The declarationand payment of dividends by the Company are subject to the discretion of theBoard of Directors. Any determination as to the payment of dividends will dependupon the results of operations, capital requirements and financial condition ofthe Company, and such other factors as the Board of Directors may deem relevant.Accordingly, there can be no assurance that the Board of Directors will declareor pay dividends on the shares of Common Stock in the future. The certificate ofincorporation of the Company requires that any cash dividends must be paidequally on each outstanding share of Class A Common Stock and Class B CommonStock.                                       9 Item 6.  SELECTED FINANCIAL DATA                            Selected Financial Data                     (in thousands except per share data)                                                                      Years Ended December 31,                                                        ----------------------------------------------------                                                         1992       1993       1994       1995       1996(1)                                                        ----------------------------------------------------                                                                                                                 Statement of Operations Data:                                          Revenue                                                 $64,446    $73,123    $86,876    $81,408    $754,243Purchased transportation                                 59,360     67,985     80,588     75,142     662,679                                                        ----------------------------------------------------Net revenue                                               5,086      5,138      6,288      6,266      91,564Costs and expenses                                        3,007      3,295      3,940      3,699      63,639                                                        ----------------------------------------------------Operating income                                          2,079      1,843      2,348      2,567      27,925Other income (expense)                                       96         96         58         71        (221)                                                        ----------------------------------------------------Income before minority interest and taxes                 2,175      1,939      2,406      2,638      27,704Minority interest                                            --         --         --         --      16,366                                                        ----------------------------------------------------Income before taxes                                       2,175      1,939      2,406      2,638      11,338Income taxes                                                 29         32         37         39       4,294                                                        ----------------------------------------------------Net income (as reported)                                  2,146      1,907      2,369      2,599       7,044                                                        ----------------------------------------------------Pro forma provision for additional income taxes(2)          841        744        925      1,016         241                                                        ----------------------------------------------------Pro forma net income                                    $ 1,305    $ 1,163    $ 1,444    $ 1,583    $  6,803                                                        ----------------------------------------------------Pro forma earnings per share                            $  0.79    $  0.70    $  0.87    $  0.95    $   1.35                                                        ----------------------------------------------------Pro forma weighted average shares outstanding             1,662      1,662      1,662      1,662       5,058                                                        ----------------------------------------------------                                                                         As of December 31,                                                        ----------------------------------------------------                                                         1992       1993       1994       1995       1996(1)                                                         ----------------------------------------------------Balance Sheet Data:                                                                                                     Working capital                                         $   110    $  1,125   $ 1,457    $   804    $ 15,877  Total assets                                              7,239       9,511    10,360      9,083     201,225  Long-term debt, excluding current portion                    --          --        --         --      28,714  Stockholders' equity                                        576       1,553     1,769      1,165      46,124     (1)  On March 18, 1996, Hub Group, Inc. purchased Hub City Terminals, Inc. ("HubChicago") in a stock-for-stock acquisition through the issuance of 1,000,000shares of the Company's Class A common stock and 662,296 shares of the Company'sClass B common stock. Hub Chicago has been accounted for similar to the poolingof interests method of accounting and has been included in all periods presentedon a historical cost basis. Concurrent with the acquisition of Hub Chicago, theCompany completed the initial public offering of 4,261,250 shares of its Class Acommon stock, with net proceeds to the Company of approximately $52,945,000.Coincident with the initial public offering, a selling stockholder sold1,000,000 shares of the Company's Class A common stock through a secondaryoffering. The Company did not receive any net proceeds from the sale of theshares by the selling stockholder. Concurrent with the initial public offering,the Company acquired with cash a controlling interest in each of 27 operatingpartnerships. On May 2, 1996, the Company acquired the rights to service thecustomers of American President Lines Domestic Distribution Services. See theNotes to the Company's Consolidated Financial Statements.(2)  Prior to March 18, 1996, the Company was an S corporation and not subjectto Federal corporate income taxes. On March 18, 1996, the Company changed itsstatus from an S corporation to a C corporation. The statement of operationsdata reflects a pro forma provision for income taxes as if the Company weresubject to Federal and state corporate income taxes for all period presented.The pro forma provision reflects a combined Federal and state tax rate of 40%.See the Notes to the Company's Consolidated Financial Statements.                                      10   Item 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL            CONDITION AND RESULTS OF OPERATIONSCAPITAL STRUCTURE       Hub Group, Inc. was incorporated on March 8, 1995.  On March 18, 1996,Hub Group, Inc. purchased Hub City Terminals, Inc. ("Hub Chicago") in a stock-for stock acquisition through the issuance of 1,000,000 shares of Class A commonstock and 662,296 shares of Class B common stock.  Hub Chicago has beenaccounted for similar to the pooling of interests method of accounting and hasbeen included in all periods presented on a historical cost basis.       Concurrent with the acquisition of Hub Chicago in March 1996, Hub Group,Inc. completed the initial public offering of 4,261,250 shares of its Class Acommon stock.  Coincident with the initial public offering, a sellingstockholder sold 1,000,000 shares of Hub Group, Inc.'s Class A common stockthrough a secondary offering.BUSINESS COMBINATIONS       Concurrent with the initial public offering, Hub Group, Inc., togetherwith its wholly owned subsidiary, Hub Chicago, acquired a controlling interestin each of 27 operating partnerships (collectively referred to as "HubPartnerships").  Prior to March 18, 1996, Hub Chicago and Hub Partnerships wereunder common control and formed a network that collectively worked withcustomers and vendors.  On May 2, 1996, Hub Group, Inc. purchased the rights toservice the customers of American President Lines Domestic Distribution Services("APLDDS"), a division of APL Land Transport Services, Inc, from its parentAmerican President Companies, Ltd.       The revenue of the acquired businesses is many multiples of the revenueof Hub Chicago.  As a result, consolidated revenue and operating expense for HubGroup, Inc. and its subsidiaries (the "Company") increased dramatically in theperiods subsequent to March 17, 1996.       As a result of the APLDDS acquisition, the Company acquired the right toservice APLDDS customers, but did not assume any assets or liabilitiesassociated with that business.  Furthermore, the Company hired only 36 of themore than 200 employees in the APLDDS organization.  The APLDDS business wasabsorbed directly into the operations of Hub Chicago and Hub Partnerships andmanagement believes the associated incremental operating costs are significantlyless than the historical operating costs experienced by APLDDS.  Management doesnot track the incremental purchased transportation and operating costsattributable to the acquired APLDDS business.  Consequently, discussion ofresults of operations excluding acquisitions is limited to comparisons ofrevenue.  Discussion of pro forma financial data reflects results of operationsas if Hub Group, Inc. had acquired Hub Partnerships and APLDDS as of January 1,1995.RESULTS OF OPERATIONSYear Ended December 31, 1996, Compared to Year Ended December 31, 1995Revenue       Revenue totaled $754.2 million for 1996, representing an increase of826.5% over 1995.  Without the acquisitions, Company revenues totaled $85.2million for 1996 for an increase of 4.7% over 1995.  The minor increase inrevenue without acquisitions is attributed principally to Hub Chicago's loss ofa portion of a significant customer's business.  This consumer productsmanufacturer moved the production of one of its major products to a facilitywhich is now being served by one of the operating partnerships that comprise HubPartnerships.       Pro forma revenue increased 5.3% to $938.9 million from $891.8 million in1995.  The 1995 pro forma revenue was impacted significantly by the addition ofthe revenue reported by APLDDS.  The business acquired from APLDDS on May 2,1996, had been experiencing significant decline during 1995 and the firstquarter of 1996.  This decline had a negative influence on the pro forma revenuegrowth rate.  Despite the declining trend, management believes the Company hassuccessfully transitioned and retained greater than 90% of the APLDDS businessthat existed on May 2, 1996.                                       11        Excluding the revenue relating to APLDDS prior to the acquisition on May2, 1996, Hub Chicago and Hub Partnerships, on a combined basis assuming HubChicago had acquired Hub Partnerships on January 1, 1995, experienced a revenueincrease of 25.7% to $893.2 million in 1996 from $710.8 million in 1995.  Thispercentage increase is primarily attributable to strong growth in truckloadbrokerage and logistics as well as the acquisition of the APLDDS business.Intermodal revenues, excluding APLDDS from all periods, increased moderately ona percentage basis.Net Revenue       Net revenue as a percentage of revenue increased to 12.1% for 1996compared to 7.7% in 1995.  This increase is primarily a reflection of the highernet revenue as a percentage of revenue that is experienced by Hub Partnershipsas compared to Hub Chicago.  Hub Chicago has a larger proportion of highvolume/low margin accounts than does Hub Partnerships.       Pro forma net revenue as a percentage of revenue increased to 11.9% in1996 from 11.3% in 1995.  On a pro forma basis, net revenue as a percentage ofrevenue for the APLDDS business was 7.3% and 4.1% for 1995 and the periodJanuary 1, 1996 through May 1, 1996, respectively.  Management believes that thenet revenue percentage on the transitioned APLDDS business has improved modestlyover the APLDDS 1995 pro forma net revenue percentage.  The lower pro formapercentages experienced by APLDDS causes the current year percentages to comparefavorably to the prior year percentages.  This favorable pro forma comparison ispartially offset by the lower net revenue percentage experienced by the additionof new logistics customers in late 1995 and early 1996.Salaries and Benefits       Salaries and benefits increased to $43.9 million in 1996 from $2.5million in 1995.  Pro forma salaries and benefits increased to $55.9 million in1996 from $50.4 million in 1995.  APLDDS was a division of APL Land TransportServices, Inc. ("APL") and consequently received much of its support servicesfrom APL.  In return for these services, APLDDS was assessed a management fee.This arrangement had the effect of deflating salaries and benefits whileinflating selling, general and administrative expenses. As a result, salariesand benefits reported by APLDDS in servicing their customers were lower as apercentage of revenue than traditionally experienced by the Company.  For 1995and the period January 1, 1996 through May 1, 1996, salaries and benefits as apercentage of revenue for APLDDS were 3.8% and 4.8%, respectively.  Pro formasalaries and benefits as a percentage of revenue increased to 6.0% for 1996 from5.7% in 1995, which is partially attributed to the historical cost structure ofAPLDDS.  The Company's investment in additional personnel in 1996 alsocontributed to this increase.  These additional personnel were hired to handleadditional truckload brokerage and logistics business, to expand the local andnational sales forces and to provide the financial and administrative servicesrequired for continued growth.Selling, General and Administrative       Selling, general and administrative expenses increased to $17.1 millionin 1996 from $1.2 million in 1995.  Pro forma selling, general andadministrative expenses decreased to $23.2 million in 1996 from $29.8 million in1995.  As a percentage of revenue these pro forma expenses were 2.5% in 1996 and3.3% for 1995.  As explained in "Salaries and Benefits," APLDDS received much ofits support services through a management fee arrangement with APL.  This causedthe APLDDS historical selling, general and administrative expenses to be asignificantly greater percentage of revenue than the percentage traditionallyexperienced by the Company.  For 1995 and the period January 1, 1996, throughMay 1, 1996, selling, general and administrative expenses as a percentage ofrevenue for APLDDS were 7.3% and 6.0%, respectively.Depreciation and Amortization       Depreciation and amortization expense increased to $2.6 million in 1996from a negligible amount in 1995.  Pro forma depreciation and amortizationincreased to $3.3 million in 1996 from $3.1 million in 1995.  As a percentage ofrevenue, pro forma depreciation and amortization increased to 0.4% in 1996 from0.3% in 1995.                                       12 Other Income (Expense)       Interest expense was $1.0 million in 1996 and zero in 1995.  All of theinterest expensed in 1996 was incurred subsequent to March 17, 1996.  Pro formainterest expense increased to $1.3 million in 1996 from $1.2 million in 1995.       There are three primary components of interest expense.  First, theCompany assumed or issued $13.2 million of five-year balloon notes inconjunction with the acquisition of Hub Partnerships in March 1996.  These notesbear interest at an annual rate of 5.45%.  Interest expense on these notes beganto decline in the third quarter of 1996 as discretionary payments were made.Second, in conjunction with the acquisition of APLDDS in May 1996, the Companyissued notes for $6.0 million bearing interest at an annual rate of 6%.  Therewere no payments made on these notes in 1996.  Third, the Company has borrowedto purchase tractors as it continues its strategy of starting small drayageoperations to service portions of its own business in those areas where it isneeded to enhance customer service (see "Liquidity and Capital Resources"). Theannual rate of interest on these loans is determined at the time each tractor ispurchased at a rate equal to 3% over the two-year Treasury note rate.       Interest income was $0.8 million in 1996 and $0.1 million in 1995.  Proforma interest income was $0.8 million in 1996 and $0.7 million in 1995.Minority Interest       Minority interest was $16.4 million in 1996 and zero in 1995.  On a proforma basis, minority interest was $17.4 million in 1996 and $11.7 million in1995.  Management estimates that 20% of the acquired APLDDS business has accruedto Hub Chicago. To calculate a pro forma minority interest factor, it wasestimated that the minority interest will accrue its 70% ownership in HubPartnerships which operates 80% of the APLDDS business.  As such, minorityinterest as a percentage of income before minority interest and provision forincome taxes of 56% was applied to pro forma income before minority interest forAPLDDS for 1995 and the period January 1, 1996, through May 1, 1996.       On a pro forma basis, minority interest as a percentage of income beforeminority interest and provision for income taxes was 61.0% for 1996 and 69.2%for 1995.  The higher minority interest percentage in 1995 was the result of thesignificant loss reported by APLDDS combined with a lower pro forma minorityinterest factor that was applied to that loss as compared to the factor appliedto the rest of the Company's income.       The Company owns 100% of Hub Chicago.  The Company acquired 30% of 26operating partnerships and approximately 21% of another operating partnership(collectively Hub Partnerships).  On August 1, 1996, the Company purchased theremaining 70% of Hub City Tennessee, L.P. ("Hub Tennessee").  On December 12,1996, the Company purchased the remaining 70% minority interest in Hub CityNorth Central, L.P. ("Hub North Central").Income Taxes       Income taxes were $4.3 million in 1996 and negligible in 1995.  Otherthan an insignificant provision for Illinois replacement tax, the Company had noprovision for income taxes prior to March 18, 1996, as the Company was afederally non-taxable subchapter S corporation.  The Company is providing forincome taxes at an effective rate of 40% for all income subsequent to March 17,1996.Pro Forma Provision For Additional Income Taxes       Additional pro forma income taxes were $0.2 million in 1996 and $1.0million in 1995.  Additional pro forma provision for income taxes are shown toprovide an assumed effective federal and state income tax rate of 40% of incomebefore taxes for periods prior to March 18, 1996.Pro Forma Net Income       Pro forma net income (pro forma only regarding income taxes) increased to$6.8 million in 1996 from $1.6 million in 1995.  Pro forma net income (pro formato provide for income taxes and for the acquisitions of                                        13 Hub Partnerships and APLDDS) increased to $6.7 million in 1996 from $3.1 millionin 1995. The increase in pro forma net income, which gives effect to theCompany's acquisitions, is 113.3% when comparing 1996 to 1995. This largeincrease was significantly influenced by the losses incurred by APLDDS beforebeing acquired by the Company.Pro Forma Earnings Per Share       Pro forma earnings per share (pro forma only to provide for income taxes)increased to $1.35 in 1996 from $0.95 in 1995.  Pro forma earnings per share(pro forma to provide for income taxes and for the Company's acquisitions)increased to $1.15 in 1996 from $0.59 in 1995.  The increase in pro formaearnings per share, which gives effect to the Company's acquisitions, is 94.9%.This large increase was significantly influenced by the losses incurred byAPLDDS before being acquired by the Company.Year Ended December 31, 1995, Compared to Year Ended December 31, 1994Revenue       Revenue decreased 6.3% to $81.4 million in 1995 from $86.9 million in1994.  Approximately 45% of the decrease resulted from a significant customermoving it headquarters and distribution facility out of Hub Chicago's territoryand into the territory of one of the partnerships that comprise Hub Partnershipsat the end of the fourth quarter of 1994.  A slowdown in the economy in 1995reduced shipments by the Company's customers.  However, Hub Chicago had beenincreasingly successful in passing along to the customer, where appropriate,additional trailer storage and detention charges, many of which were formerlynot billed by the Company, thus offsetting to some extent the effects of theeconomic slowdown.Net Revenue       Net revenue as a percentage of revenue increased to 7.7% in 1995 comparedto 7.2% in 1994.  In 1995, the Company was able to negotiate reduced freightcharges with vendors due to the weakened demand for freight transportation.Management also believes that net revenue as a percentage of revenue in 1995increased as a result of the continued improvement in the Hubs' ability tocontrol equipment through the network the Company shares with Hub Partnerships.The Company had also been successful in reducing trailer storage and detentioncharges that it previously absorbed.Salaries and Benefits       Salaries and benefits decreased $0.1 million but increased slightly apercentage of revenues to 3.0% of revenues in 1995 compared to 2.9% of revenuesin 1994.  This increase in salaries and benefits as a percentage of revenue wasa result of a decrease in revenue.  Staffing levels, which increased in thethird and fourth quarters of 1994 to accommodate volume growth and servicelevels required by customers, decreased during 1995 in response to reducedrevenue levels.Selling, General and Administrative       Selling, general and administrative expenses remained constant at 1.5% ofrevenues in 1994 and 1995.Depreciation and Amortization       Depreciation and amortization expense was negligible in 1994 and 1995.Other Income (Expense)       Interest income was negligible in 1994 and 1995.Income Taxes       Income taxes were negligible in 1994 and 1995.                                       14 Pro Forma Provision For Additional Income Taxes       Additional pro forma income taxes were $1.0 million in 1995 and $0.9million in 1994.  Additional pro forma provision for income taxes are shown toprovide an assumed effective federal and state income tax rate of 40% of incomebefore taxes.Pro Forma Net Income       Pro forma net income (pro forma only regarding income taxes) increased to$1.6 million in 1995 from $1.4 million in 1994.LIQUIDITY AND CAPITAL RESOURCES       During 1996, the Company had several significant transactions thataffected liquidity.  These transactions were the initial public offering of theCompany's Class A common stock and the subsequent acquisition of a controllinginterest in Hub Partnerships, the APLDDS acquisition and the purchase of theremaining 70% minority interest in Hub Tennessee and Hub North Central.  Theseitems represented a cash inflow of $52.9 million and cash outflows of $35.5million, $2.0 million, $2.5 million and zero, respectively.  Related to theacquisitions and purchases, the Company assumed long-term debt, includingcurrent portions, of $35.9 million, approximately $12.5 million of which arefive-year balloon notes due in March of 2001, bearing interest at an annual rateof 5.45%.  Approximately $6.0 million bears interest at 6% and is due in threeequal annual installments beginning May 1997.  Approximately $15.0 million isdue on January 1, 1998, and bears interest at an annual rate of 7%.  Immediatelyprior to the initial public offering and Hub Partnership acquisition, HubChicago issued five-year balloon notes, due in March 2001, to its shareholdersfor approximately $0.7 million, bearing interest at an annual rate of 5.45%.  Anadditional $1.7 million of miscellaneous debt was assumed in connection with theacquisition of Hub Partnerships.  The acquisitions resulted in the recognitionof a $12.8 million deferred tax asset, which will offset cash payments for taxesratably over the next 15 years.  The resulting $42.8 million of goodwill fromthe acquisitions and the minority interest purchases represents a tax deductibleexpense to be recognized over the next 15 years.       Capital expenditures are principally made to enhance or expand theCompany's information systems and network capabilities and, most recently, toacquire a number of tractors to support Company-owned drayage operations.  Partof the Company's strategy is to supplement third party drayage operations withCompany-owned tractors to service portions of the Company's intermodal businessin those locations where drayage service is limited or where customers requirean enhanced level of service which cannot be competitively accommodated by athird-party provider.       As of December 31, 1996, the Company owned 83 tractors as part ofCompany-owned drayage operations for the operating companies located inMissouri, Michigan, New Jersey, Georgia, Kansas and Illinois.  The Company-owneddrayage operation in Missouri has been functioning since 1994.  The Michiganoperation started in the second quarter of 1996, the New Jersey and Illinoisoperations started in the third quarter of 1996 and the Georgia and Kansasoperations started in the fourth quarter of 1996.  Of the 83 tractors inoperation at December 31, 1996, 62 were acquired in 1996 at a cost ofapproximately $65,000 each.  Ten of these tractors were purchased with cash andthe remainder were financed at a rate of 3% over the two-year Treasury note rateafter an initial down payment of 10%.       The Company maintains a bank line of credit for $5.0 million.  Theinterest rate is set at the bank's discretion at a rate less than or equal tothe bank's prime rate.  At December 31, 1996, the rate was 7.75%.  As ofDecember 31, 1996, the unused and available portion of this credit line was $5.0million.  Although there are no assurances, management believes it can obtain anadditional line of credit, if necessary.OUTLOOK, RISKS AND UNCERTAINTIES       This "Outlook, Risks and Uncertainties" section contains statementsregarding expectations, hopes, beliefs, intentions or strategies regarding thefuture which are forward looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995 and involve risks and uncertaintiesdescribed below that could cause actual results to differ materially from thoseprojected.  The Company assumes no liability to update any such forward                                        15 looking statements. In addition to those mentioned elsewhere in this section,such risks and uncertainties include the impact of competitive pressures in themarketplace, the degree and rate of market growth in the markets served by theCompany, changes in industry-wide capacity, further consolidation of railcarriers, changes in governmental regulation, changes in the cost of servicesfrom vendors and fluctuations in interest rates.Revenue       Management estimates that in 1997 revenue growth will decline fromcurrent levels.  This estimate is based on management's opinion that thedramatic growth in the truckload brokerage and logistics businesses experiencedin 1996 provides too large of a revenue base to sustain the same growth rate in1997.  Furthermore, management cannot predict an acquisition similar to APLDDSin 1997.Net Revenue       Historically, the Company contracted for all its drayage needs with 100%of the attendant costs being classified as purchased transportation.  As theCompany sets up its own drayage operations, the salaries and benefits for non-driver employees as well as general and administrative expenses are classifiedbelow the net revenue line as operating expenses.  Assuming that the Companyfulfills its drayage needs at or below the previously contracted cost, theclassification of a portion of the cost below net revenue will cause net revenueas a percentage of revenue related to the Company's drayage operations toincrease.  Management expects fluctuations in the net revenue percentage fromquarter-to-quarter caused by changes in business mix, changes in highwaybrokerage margins, changes in logistics business margins, changes in trailer andcontainer capacity, changes in vendor pricing, changes in intermodal industrygrowth and changes in accounting estimates.  Some of the Company's rail vendorshave increased rates in the first quarter of 1997.  The Company may not be ableto pass some or all of these rate increases along to its customers.Salaries and Benefits       It is anticipated that salaries and benefits as a percentage of revenuecould fluctuate from quarter-to-quarter as there are timing differences betweenrevenue increases and changes in levels of staffing.  Factors that could affectthe percentage from staying in the recent historical range are revenue growthrates significantly higher or lower than forecasted, a management decision toinvest in additional personnel to stimulate new or existing businesses orchanges in customer requirements that result in a higher cost of labor per move.Depreciation and Amortization       Management estimates that as a percentage of revenue, depreciation andamortization will remain at current levels or increase in the future.  Factorsthat could cause an increase in the percentage are increased leaseholdimprovement amortization as operating companies transition to larger facilities,increased software amortization on planned implementation of new packages in thetruckload brokerage and logistics businesses and increased goodwill amortizationthat would arise if the Company exercised any of its options to purchase theremaining minority interest in any of its operating partnerships.Other Income (Expense)       Interest expense in 1997 will increase significantly due to the issuance,on December 12, 1996, of a note for approximately $15.0 in connection with thepurchase of the remaining 70% minority interest in Hub North Central.  Interestexpense related to tractor purchases will continue to increase as the Companycontinues expansion into Company-owned drayage operations.  Management estimatesinterest expense as it relates to the balloon notes assumed or issued inconnection with the acquisition of Hub Partnerships will continue to decline ona quarterly basis as the various operating partnerships continue to makediscretionary principal payments.  Interest expense related to the notes issuedin conjunction with the acquisition of APLDDS will decline from current levelsin May of 1997, 1998 and 1999, coincident with the required principal paymentterms.       Management estimates that interest income will likely decrease fromcurrent levels.  Factors that could cause such a decrease are the possible useof cash to (i) make payments on the balloon notes, (ii) make payments on                                        16 the APLDDS notes, (iii) make payments on the note issued to acquire theremaining interest in Hub North Central, (iv) make down payments on tractors,(v) fund working capital needs for those operating companies starting their ownCompany-owned drayage operations, (vi) fund the purchase of the remainingminority interest in any of its operating partnerships and (vii) increase theCompany's capital investment in an international joint venture.Minority Interest       Factors that could have a material impact and result in minority interestpercentages of income before minority interest to be outside the historicalrange are (i) the exercise of any of the Company's options to purchase theremaining minority interest in any of its operating companies and (ii)disproportionate changes in the profitability of businesses between those whichare owned 100% by the Company and those which are owned less than 100% by theCompany.  The purchase of the remaining minority interest in Hub North Central,assuming all other factors affecting minority interest are equal, should causeminority interest as a percentage of income before minority interest to decline.Net Income       Management expects that net income growth rates after May 1997 will besignificantly less than the pro forma net income growth rates experienced sinceMay 1996.  The Company acquired APLDDS in May 1996 and management cannot predicta similar acquisition in 1997.Earnings Per Share       Management expects that earnings per share growth rates after May 1997will be significantly less than the pro forma net income growth ratesexperienced since May 1996.  The Company acquired APLDDS in May 1996 andmanagement cannot predict a similar acquisition in 1997.Liquidity and Capital Resources       The Company expects to continue to pay down, as a prepayment, the balloonnotes from time to time as cash availability permits.  The Company expects tomeet all other liabilities as they become due.       Management is considering additional sites for Company-owned tractors,and it is anticipated that Company-owned drayage operations, in total, willrequire the acquisition of approximately 110 tractors in 1997.  The Company maypurchase up to 20 of these tractors with cash with the remainder being financed.Management estimates that each start-up of a Company-owned drayage operationrequires working capital of $0.3 million to $0.4 million above and beyond thecost of acquiring the tractors.  Management estimates that an additional threeto five locations may start Company-owned drayage operations by the end of 1997.Management intends to carefully evaluate existing and new drayage operationsbefore committing additional capital resources.       The Company has the continuing option, exercisable any time after thePresident currently associated with an operating partnership ceases to be anemployee, to purchase the remaining interest in that partnership.  The futureexercise of such options could result in the need for significant funds.  Thosefunds may come from existing cash, third-party debt, other financing or anycombination thereof.       The Company believes that existing cash, cash provided by operations andcash available under a line of credit and its other financing commitment will besufficient to meet the Company's short-term working capital and capitalexpenditure needs.  The Company is currently negotiating a $15.0 million line ofcredit.  Although no assurances can be made, it is anticipated that this line ofcredit will become effective in 1997.  The Company believes that theaforementioned items are sufficient to meet its anticipated long-term workingcapital, capital expenditure and debt repayment needs through at least the year2001.                                       17Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                         INDEX TO FINANCIAL STATEMENTS                       AND FINANCIAL STATEMENT SCHEDULESReport of Independent Accountants                                             19Consolidated Balance Sheets--December 31, 1996 and December 31, 1995          20Consolidated Statements of Operations--Years ended December 31, 1996,   December 31, 1995 and December 31, 1994                                     21Consolidated Statements of Stockholders' Equity--Years ended   December 31, 1996, December 31, 1995 and December 31, 1994                  22Consolidated Statements of Cash Flows--Years ended December 31, 1996,   December 31, 1995 and December 31, 1994                                     23Notes to Consolidated Financial Statements                                    24                                      18                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTSTo the Stockholders of Hub Group, Inc.:          We have audited the accompanying consolidated balance sheets of HubGroup, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1995and 1996 and the related consolidated statements of operations, stockholders'equity and cash flows for each of the three years in the period ended December31, 1996. These financial statements and schedule referred to below are theresponsibility of the Company's management. Our responsibility is to express anopinion on these financial statements and schedule based on our audits.          We conducted our audits in accordance with generally accepted auditingstandards.  Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement.  An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.  An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.          In our opinion, the consolidated financial statements referred toabove present fairly, in all material respects, the financial position of HubGroup, Inc. and subsidiaries as of December 31, 1995 and 1996, and the resultsof its operations and cash flows for each of the three years in the period endedDecember 31, 1996, in conformity with generally accepted accounting principles.          Our audit was made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The schedule on page S-1 is presented forpurposes of complying with the Securities and Exchange Commission's rules and isnot part of the basic financial statements. This schedule has been subjected tothe auditing procedures applied in the audit of the basic financial statementsand, in our opinion, fairly states in all material respects the financial datarequired to be set forth therein in relation to the financial statements takenas a whole.                              ARTHUR ANDERSEN LLPChicago, IllinoisFebruary 6, 1997                                       19                                  HUB GROUP, INC.                          CONSOLIDATED BALANCE SHEETS                                (in thousands)                                                                              December 31,                                                             --------------------------------                                                                 1995                1996                                                             -----------          -----------                                                                                                                                    ASSETS CURRENT ASSETS:  Cash and cash equivalents                                   $        2          $    13,893  Accounts receivable, net   Trade                                                           6,197              114,125   Affiliate                                                       2,376                    -  Prepaid expenses and other current assets                          147                3,532                                                              ----------          -----------   TOTAL CURRENT ASSETS                                            8,722              131,550 PROPERTY AND EQUIPMENT, net                                         137               14,058 GOODWILL, net                                                         -               42,255 DEFERRED TAXES                                                        -               11,357 OTHER ASSETS                                                        224                2,005                                                              ----------          -----------   TOTAL ASSETS                                               $    9,083          $   201,225                                                              ==========          ===========LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:  Accounts payable   Trade                                                      $    5,620          $    94,884   Affiliate                                                       1,774                    -   Other                                                              89                8,144  Accrued expenses                                                                       Payroll                                                           286                4,988   Other                                                             149                3,186  Deferred taxes                                                       -                1,307  Current portion of long-term debt                                    -                3,164                                                              ----------          -----------    TOTAL CURRENT LIABILITIES                                      7,918              115,673 LONG-TERM DEBT, EXCLUDING CURRENT PORTION                             -               28,714 CONTINGENCIES AND COMMITMENTS MINORITY INTEREST                                                     -               10,714 STOCKHOLDERS' EQUITY:                                                               Preferred stock                                                      -                    -  Common stock                                                        26                   59  Additional paid-in capital                                          18               55,083  Purchase price in excess of predecessor basis                        -              (25,764)  Tax benefit of purchase price in excess of    predecessor basis                                                   -               10,306  Retained earnings                                                1,121                6,440                                                              ----------          -----------   TOTAL STOCKHOLDERS' EQUITY                                      1,165               46,124                                                              ----------          -----------    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $    9,083          $   201,225                                                              ==========          ===========The accompanying notes to consolidated financial statements are an integral partof these balance sheets.                                      20                                HUB GROUP, INC.                     CONSOLIDATED STATEMENTS OF OPERATIONS                   (in thousands, except per share amounts)                                                                Years Ended December 31,                                                 ------------------------------------------------------                                                    1994                1995                 1996                                                 ----------          -----------         --------------                                                                                                                       REVENUE: Trade                                            $  74,991          $    66,696         $      750,784 Affiliate                                           11,885               14,712                  3,459                                                 ----------          -----------         --------------  Total revenue                                      86,876               81,408                754,243PURCHASED TRANSPORTATION                             80,588               75,142                662,679                                                 ----------          -----------         --------------  Net revenue                                         6,288                6,266                 91,564COSTS AND EXPENSES: Salaries and benefits                                2,556                2,457                 43,913 Selling, general and administrative                  1,345                1,196                 17,147 Depreciation and amortization                           39                   46                  2,579                                                 ----------          -----------         --------------  Total costs and expenses                            3,940                3,699                 63,639     Operating income                                 2,348                2,567                 27,925                                                 ----------          -----------         --------------OTHER INCOME (EXPENSE): Interest expense                                        -                    -                    (996) Interest income                                         58                   71                    786 Other, net                                              -                    -                     (11)                                                 ----------          -----------         --------------  Total other income (expense)                           58                   71                   (221)INCOME BEFORE MINORITY INTEREST AND PROVISION FOR INCOME TAXES                           2,406                2,638                 27,704                                                 ----------          -----------         --------------MINORITY INTEREST                                        -                    -                  16,366                                                 ----------          -----------         --------------INCOME BEFORE PROVISION FOR INCOME TAXES              2,406                2,638                 11,338PROVISION FOR INCOME TAXES                               37                   39                  4,294                                                 ----------          -----------         --------------NET INCOME                                        $   2,369           $    2,599          $       7,044                                                  =========           ==========          =============PRO FORMA PROVISION FOR ADDITIONAL INCOME         TAXES                                                  925                1,016                    241                                                   ----------          -----------         -------------- PRO FORMA NET INCOME                              $   1,444           $    1,583          $       6,803                                                  =========           ==========          =============PRO FORMA EARNINGS PER SHARE                      $    0.87           $     0.95          $        1.35                                                  =========           ==========          =============PRO FORMA WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                   1,662                1,662                  5,058                                                  =========           ==========          =============The accompanying notes to consolidated financial statements are an integral partof these statements.                                      21                                HUB GROUP, INC.                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                  For the three years ended December 31, 1996                         (in thousands, except shares)                                                                                    Tax Benefit                                                                      Purchase      of Purchase                                                                      Price in         Price                                      Common Stock        Additional     Excess of     in Excess of                    Total                                   -------------------     Paid-in      Predecessor    Predecessor     Retained    Stockholders'                                 Shares      Amount     Capital         Basis           Basis       Earnings       Equity                                   ---------    ------    ----------    -----------    ------------    --------    -------------                                                                                                                           Balance at January 1, 1994            200     $ 25      $    17       $    -          $   -         $ 1,512       $  1,554   Net income                           -        -            -              -              -           2,369          2,369   Distributions to stockholders        -        -            -              -              -          (2,154)        (2,154)                                 ---------     ----      -------       --------        -------       -------       --------  Balance at December 31, 1994          200       25           17            -              -           1,727          1,769   Net income                           -        -            -              -              -           2,599          2,599   Distributions to stockholders        -        -            -              -              -          (3,205)        (3,205)  Issuance of common stock             100        1            1            -              -             -                2                                  ---------     ----      -------       --------        -------       -------       --------  Balance at December 31, 1995          300       26           18            -              -           1,121          1,165   Net income                           -        -            -              -              -           7,044          7,044   Distributions to stockholders        -        (25)         (17)           -              -          (1,725)        (1,767)  Issuance of common stock                                                                                                     in acquisition                1,662,296      -            -              -              -             -              -     Retirement of shares acquired       (200)     -            -              -              -             -              -     Sale of common stock in                                                                                                      initial public offering, net  4,261,250       59       55,083            -              -             -           55,142   Acquisition of general                                                                                                       partnership interests               -        -            -          (25,764)        10,306           -          (15,458)  Purchase of common stock            (100)      (1)          (1)           -              -             -               (2)                                 ---------     ----      -------       --------        -------       -------       --------  Balance at December 31, 1996    5,923,546     $ 59      $55,083       $(25,764)       $10,306       $ 6,440       $ 46,124                                  =========     ====      =======       ========        =======       =======       ========              The accompanying notes to consolidated financial statements                   are an integral part of these statements.                                      22                                HUB GROUP, INC.                     CONSOLIDATED STATEMENTS OF CASH FLOWS                                (in thousands)                                                                                    Years Ended December 31,                                                                            -----------------------------------                                                                              1994          1995         1996                                                                            --------      --------     --------                                                                                                              Cash flows from operating activities:  Net income                                                                 $ 2,369      $ 2,599     $  7,044  Adjustments to reconcile net income to net cash provided by operating    activities:      Depreciation and amortization                                               39           46        2,786      Deferred taxes                                                               -            -        2,722      Minority interest                                                            -            -       16,366      Loss(gain) on sale of assets                                                 3            -          (59)      Changes in working capital, net of effects of purchase transactions:       Accounts receivable, net                                                 (141)        (757)     (29,976)       Prepaid expenses and other current assets                                 (21)          14       (1,801)       Accounts payable                                                          626         (629)      20,851       Accrued expenses                                                            7          (44)       2,549       Other assets                                                              133           48       (1,153)                                                                             -------      -------     --------        Net cash provided by operations                                        3,015        1,277       19,329                                                                             -------      -------     --------Cash flows from investing activities:  Cash used in acquisitions, net                                                   -            -      (37,459)  Purchase of minority interest                                                    -            -       (2,513)  Purchases of property and equipment, net                                       (31)         (98)      (6,815)                                                                             -------      -------     --------        Net cash used in investing activities                                    (31)         (98)     (46,787)                                                                             -------      -------     --------Cash flows from financing activities:  Proceeds from sale of common stock in initial public offering, net               -            -       52,945  Proceeds from sale of common stock                                               -            2            -  Purchase of common stock                                                         -            -           (2)  Distributions to stockholders                                               (2,154)      (3,205)      (1,104)  Distributions to minority interest                                               -            -       (5,814)  Payments on long-term debt                                                       -            -       (7,271)  Proceeds from issuance of long-term debt                                         -            -        2,595                                                                             -------      -------     --------        Net cash provided by (used in) financing activities                   (2,154)      (3,203)      41,349                                                                             -------      -------     --------Net increase (decrease) in cash                                                  830       (2,024)      13,891Cash, beginning of period                                                      1,196        2,026            2                                                                             -------      -------     --------Cash, end of period                                                          $ 2,026      $     2     $ 13,893                                                                             =======      =======     ========Supplemental disclosures of cash flow information  Cash paid for:    Interest                                                                 $     -      $     -     $    117    Income taxes                                                                  32           41        2,344  Non-cash investing and financing activities:    Note payable issued for purchase of minority interest                    $     -      $     -     $ 14,970    Notes payable issued as distributions to stockholders                          -            -          663The accompanying notes to consolidated financial statements are an integral partof these statements.                                      23                                 HUB GROUP, INC.                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1.  Description of Business and Summary of Significant Accounting         PoliciesBusiness: Hub Group, Inc. and its subsidiaries (the "Company") provideintermodal transportation services utilizing third party arrangements withrailroads and drayage companies. The Company also arranges for transportation offreight by truck and performs logistics services.Principles of Consolidation: The consolidated financial statements include theaccounts of Hub Group, Inc. and all entities in which the Company has more thana 50% equity ownership or otherwise exercises unilateral control. Allsignificant intercompany balances and transactions have been eliminated.Cash and cash equivalents: The Company considers as cash equivalents all highlyliquid instruments with an original maturity of three months or less. Checksoutstanding, net, of approximately $474,000 and $1,548,000 at December 31, 1995and 1996, respectively, are included in accounts payable.Receivables: The Company's reserve for uncollectible accounts receivable wasapproximately $125,000 and $1,355,000 at December 31, 1995, and 1996,respectively.Property and Equipment: Property and equipment are stated at cost. Depreciationof property and equipment is computed using the straight-line and variousaccelerated methods at rates adequate to depreciate the cost of applicableassets over their expected useful lives: buildings and improvements 15 to 40years; leasehold improvements the shorter of useful life or lease term; computerequipment and software 3 to 5 years; furniture and equipment 3 to 10 years; andtransportation equipment and automobiles 3 to 12 years. Direct costs related tointernally developed software projects are capitalized and amortized over theexpected useful life on a straight-line basis not to exceed five years,commencing when the asset is placed into service. Maintenance and repairs arecharged to operations as incurred and major improvements are capitalized. Thecost of assets retired or otherwise disposed of and the accumulated depreciationthereon are removed from the accounts with any gain or loss realized upon saleor disposal charged or credited to operations.Goodwill:  Goodwill is amortized on the straight-line method over 40 years.  Onan ongoing basis, the Company estimates the future undiscounted cash flowsbefore interest of the operating units to which goodwill relates in order toevaluate impairment.  If impairment exists, the carrying amount of the goodwillis reduced by the estimated shortfall of cash flows.  Goodwill amortizationexpense was $0, $0 and approximately $525,000 for the years ended December 31,1994, 1995, and 1996, respectively.Concentration of Credit Risk: The Company's financial instruments that areexposed to concentrations of credit risk consist primarily of cash and cashequivalents and trade accounts receivable. The Company places its cash andtemporary investments with high quality financial institutions. At times, suchinvestments may be in excess of the FDIC insurance limit. Temporary investmentsare valued at the lower of cost or market and at the balance sheet datesapproximate fair market value. The Company primarily serves customers locatedthroughout the United States with no significant concentration in any oneregion. One customer in the food industry accounted for approximately 28% and30% of revenue in 1994 and 1995, respectively. The same customer accounted forless than 10% of revenue in 1996. Another customer in the consumer householdproducts industry accounted for 11.2% of revenue in 1995. This customeraccounted for less than 10% of revenue in 1994 and 1996. The Company reviews acustomer's credit history before extending credit. In addition, the Companyroutinely assesses the financial strength of its customers and, as aconsequence, believes that its trade accounts receivable risk is limited.Revenue Recognition:  Revenue represents sales of services to customers.Revenue is recognized based on relative transit time.                                       24 Income Taxes: Prior to March 18, 1996, the Company had elected to be taxed as anS corporation under the Internal Revenue Code. The income of an S corporation istaxable to its stockholders rather than the Company itself. Income tax expenseincurred prior to March 18, 1996, represents Illinois replacement tax. On March18, 1996, the Company became a taxable C corporation. The pro forma provisionfor additional income taxes was calculated assuming the Company was operating asa taxable C corporation since January 1, 1994. The Company accounts for certainincome and expense items differently for financial reporting and income taxpurposes. Deferred tax assets and liabilities are determined based on thedifference between the financial statement and tax bases of assets andliabilities applying enacted statutory tax rates in effect for the year in whichthe differences are expected to reverse.Earnings Per Share: Earnings per share are based on the average quarterlyweighted average number of Class A and Class B shares of common stockoutstanding, adjusted for the assumed conversion of dilutive stock options. Incomputing the per share effect of assumed conversion, funds which would havebeen received from the exercise of options, including tax benefits assumed to berealized, are considered to have been used to purchase shares at current marketprices, and the resulting net additional shares are included in the calculationof weighted average shares outstanding.Distributions: During the period prior to March 18, 1996, the Company operatedas an S corporation and made periodic distributions of income to itsstockholders which are reflected in the accompanying statements of stockholders'equity.Use of Estimates: The preparation of financial statements in conformity withgenerally accepted accounting principles requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenue and expense during the reportingperiod. Actual results could differ from those estimates.Reclassifications: Certain items previously reported have been reclassified toconform with the 1996 presentation.NOTE 2.  Capital Structure          On March 8, 1995, Hub Group, Inc. was incorporated and issued 100shares of Class A common stock to the sole incorporator. On March 18, 1996, HubGroup, Inc. purchased Hub City Terminals, Inc. ("Hub Chicago") in a stock-for-stock acquisition through the issuance of 1,000,000 shares of the Company'sClass A common stock and 662,296 shares of the Company's Class B common stock.Hub Chicago has been accounted for similar to the pooling of interests method ofaccounting and has been included in all periods presented on a historical costbasis.          Concurrent with the acquisition of Hub Chicago in March 1996, theCompany completed the initial public offering of 4,261,250 shares of its Class Acommon stock, with net proceeds to the Company of approximately $52,945,000.Coincident with the initial public offering, a selling stockholder sold1,000,000 shares of the Company's Class A common stock through a secondaryoffering. The Company did not receive any net proceeds from the sale of theshares by the selling stockholder.          Concurrent with the initial public offering, Hub Group, Inc., togetherwith its new wholly owned subsidiary, Hub Chicago, acquired with cash acontrolling interest in each of 27 operating partnerships (collectively referredto as "Hub Partnerships"). The combined financial statements of HubPartnerships, the predecessor to the majority of the business of the Company,are included under Item 14 of the Company's Form 10-K, filed with the Securitiesand Exchange Commission.                                       25 NOTE 3.  Business Combinations          On March 18, 1996, the Company acquired a controlling interest in HubPartnerships for a total purchase price of approximately $43,309,000 in cash.The purchase price of these acquisitions was allocated to the assets acquiredand liabilities assumed based on the fair value at the date of acquisition usingthe purchase method of accounting.          The portion of the difference between fair value and historical costof individual assets acquired and liabilities assumed attributable to interestsacquired by the Company from non-control group stockholders was recorded at fairmarket value. This resulted in goodwill of approximately $17,207,000. Theremaining portion of the difference between fair value and historical costattributable to interests acquired from control group stockholders,approximately $25,764,000, has been charged to equity as purchase price inexcess of predecessor basis.          In connection with the purchase of the controlling interest in HubPartnerships, approximately $10,306,000 has been recorded as a deferred taxbenefit utilizing an assumed effective tax rate of 40% representing the taxeffect of the purchase price in excess of predecessor basis, with thecorresponding credit recorded as an increase to equity.          On May 2, 1996, the Company purchased the rights to service thecustomers of American President Lines Domestic Distribution Services, a divisionof APL Land Transport Services, Inc., for approximately $8,000,000. The$8,000,000 was financed with $2,000,000 in cash and $6,000,000 in notes. Thenotes bear interest at an annual rate of 6% with three equal annual principalpayments due beginning May 2, 1997. The acquisition was recorded using thepurchase method of accounting resulting in goodwill of approximately $8,090,000.          Results of operations from acquisitions recorded under the purchasemethod of accounting are included in the Company's financial statements fromtheir respective dates of acquisition. The purchase price allocations presentedare preliminary.          The following summarizes the effects of businesses acquired andaccounted for as purchases in 1996 as if they had been acquired as of January 1,1995:                                                (Unaudited)                                          Years Ended December 31,                                        -------------------------                                             1995         1996                                        -------------------------                                                                                                                (000's)Revenue as reported                     $       81,408  $  754,243Revenue of purchased business for period prior to acquisitions,  net of eliminations                          810,343     184,660                                        --------------  ----------Pro forma revenue                       $      891,751  $  938,903                                        --------------  ----------Net income as reported                  $        2,599  $    7,044Net income (loss) of purchased                      businesses for period prior to acquisitions                                      920        (260) Adjustment for goodwill amortization              (383)        (96)                                        --------------  ----------Pro forma net income                    $        3,136  $    6,688                                        --------------  ----------Earnings per share as reported          $         0.95  $     1.35Effect of purchased businesses prior to         acquisitions                                    (0.36)      (0.20)                                           --------------  ----------Pro forma earnings per share            $         0.59  $     1.15                                        --------------  ----------                                       26Business acquisitions which involved the use of cash were accounted for asfollows:                                                                                         Year Ended                                                                                       December 31,                                                                                          1996                                                                                   -----------------                                                                                        (000's)                                                                                        Accounts receivable                                                                $          75,576Prepaid expenses and other current assets                                                      1,584Property and equipment                                                                         9,308Goodwill                                                                                      25,297Deferred tax benefit, net                                                                     10,575Other assets                                                                                     628Accounts payable                                                                             (74,694)Accrued expenses                                                                              (5,190)Long-term debt                                                                               (20,921)Minority interest                                                                               (162)Purchase price in excess of predecessor basis                                                 25,764Tax benefit of purchase price in excess of predecessor basis                                 (10,306)                                                                                   -----------------Cash used in acquisitions, net                                                     $          37,459                                                                                   -----------------NOTE 4.  Purchase of Minority Interest          On August 1, 1996, the Company purchased the remaining 70% minorityinterest in Hub City Tennessee, L.P. for approximately $2,513,000 in cash.  OnDecember 12, 1996, the Company purchased the remaining 70% minority interest inHub City North Central, L.P. in exchange for a note for approximately$14,970,000, bearing interest at an annual rate of 7%.  The entire purchaseprice of each acquisition was recorded as goodwill.  See Note 11.NOTE 5.  Property and EquipmentProperty and equipment consist of the following:                                                                                           December 31,                                                                                --------------------------------                                                                                     1995             1996                                                                               --------------------------------                                                                                            (000's)                                                                                                                                                                                      Land                                                                           $        -       $            92 Building and improvements                                                               -                   841Leasehold improvements                                                                  17                  629Computer equipment and software                                                        478                7,258Furniture and equipment                                                                221                3,419Transportation equipment and automobiles                                                29                4,541                                                                               --------------------------------                                                                                       745               16,780Less:  Accumulated depreciation and amortization                                      (608)              (2,722)                                                                               ---------------------------------  PROPERTY AND EQUIPMENT, net                                                  $       137      $        14,058                                                                               --------------------------------                                       27                                                                 NOTE 6. Income Taxes          The following is a reconciliation of the Company's effective taxrate to the federal statutory tax rate:                                                              Year Ended                                                             December 31,                                                                 1996                                                      ------------------------                                                           U.S. federal statutory rate                                              34.0%State taxes, net of federal benefit                                       6.0Income earned as non-taxable Subchapter S corporation prior to March 18, 1996                                                          (2.1)                                                      ------------------------Net effective rate                                                       37.9%                                                      ------------------------            The following is a summary of the Company's provision for income taxes:                                                                 Year Ended                                                             December 31,                                                                 1996                                                      ------------------------                                                               (000's)                                                             Current  Federal                                                            $  1,336  State and local                                                         236                                                      ------------------------                                                                        1,572                                                      ------------------------ Deferred  Federal                                                               2,314  State and local                                                         408                                                      ------------------------                                                                        2,722                                                      -----------------------     Total provision                                                 $  4,294                                              -----------------------             The following is a summary of the Company's deferred tax assets and liabilities:                                                                December 31,                                                                 1996                                                      ------------------------                                                               (000's)                                                             Reserve for uncollectible accounts receivable                        $    152Accrued compensation                                                      206                                                      ------------------------  Current deferred tax asset                                              358Income tax basis in excess of financial basis of   goodwill                                                             11,845                                                      -----------------------    Total deferred tax asset                                         $ 12,203                                                      ----------------------- Prepaids                                                             $    (43)Receivables                                                            (1,622)                                                      ------------------------  Current deferred tax liability                                       (1,665)    Property and equipment                                                   (293)Goodwill                                                                 (195)                                                      ------------------------  Long-term deferred tax liability                                       (488)                                                      ------------------------    Total deferred tax liability                                     $ (2,153)                                                       ------------------------                                        28 NOTE 7.   Long-Term Debt and Financing Arrangements           Fair value approximates book value at the balance sheet dates.                                                                              December 31,                                                                       -------------------------                                                                         1995              1996                                                                       --------          -------                                                                                 (000's)                                                                                               Installment notes payable due through 2000, monthly installments ranging from $325 - $16,898, including interest, ranging from 7.9% to 12%, collateralized by certain equipment                                                     $      -          $ 2,976Unsecured balloon notes, interest compounded annually at 5.45%, interest and principal due March, 2001 (see Note 11)               -            7,533Mortgage note payable due in 1998 with monthly installments of $2,381, including interest at 8.5%, collateralized by certain property                                                                     -              206Notes payable due in three equal annual principal payments of $2,000,000 beginning on May 2, 1997, interest is due at the time the principal is paid at 6% compounded annually                         -            6,000Note payable due January 1, 1998, with interest at an annual rate of 7% (see Note 11)                                                     -           14,970Capital lease obligations, collateralized by certain equipment                -              193                                                                        -------           ------Total long-term debt                                                          -           31,878Less current portion                                                          -           (3,164)                                                                        -------           ------                                                                       $      -          $28,714                                                                        -------           ------          Aggregate principal payments, in thousands, due subsequent to December31, 1996, are as follows:                                                                             1997          $ 3,164                             1998           18,141                             1999            2,772                             2000              268                             2001            7,533                                            ------                                           $31,878                                            ------          On March 18, 1996, the Company assumed a line of credit for $5,000,000which was unused at December 31, 1996. At December 31, 1996, the interest ratewas 7.75%. The interest rate is set at the bank's discretion at a rate less thanor equal to the bank's prime rate. Borrowings are secured by certain assets. Theline of credit has no expiration date. In October 1996, the Company authorizedthe issuance of a standby letter of credit for $1,000,000, which has noexpiration date.NOTE 8.   Rental Expense and Lease Commitments          Minimum annual rental commitments, in thousands, at December 31, 1996,under noncancellable operating leases, principally for real estate andequipment, are payable as follows:                                                                               1997          $2,251                              1998           1,878                              1999           1,389                              2000             999                              2001             732                              2002             383                                             -----                                            $7,632                                             -----                                      29           Total rental expense was approximately $100,000, $121,000 and$1,896,000 for 1994, 1995 and 1996, respectively. Many of the leases containrenewal options and escalation clauses which require payments of additional rentto the extent of increases in the related operating costs.NOTE 9.   Stock-Based Compensation Plan          Concurrent with the initial public offering the Company adopted aLong-Term Incentive Plan (the "1996 Incentive Plan"). The number of shares ofClass A Common Stock reserved for issuance under the 1996 Incentive Plan was450,000. Under the 1996 Incentive Plan, stock options, and stock appreciationrights, restricted stock and performance units may be granted for the purpose ofattracting and motivating key employees and non-employee directors of theCompany. Concurrent with the adoption of the Incentive Plan the Company granted326,500 options to key employees and 36,000 options to non-employee directors.All options granted have an exercise price of $14.00 per share, the initialpublic offering price. The options granted to key employees vest ratably over afive-year period and expire 10 years after the date they were granted. Theoptions granted to the non-employee directors vest ratably over a three-yearperiod and expire 10 years after the date of grant. As of December 31, 1996,none of the options granted have vested. The Company canceled 5,000 optionsduring 1996. There were 92,500 shares available to be granted as of December 31,1996.          The Company currently utilizes Accounting Principles Board Opinion No.25 in its accounting for stock options. In October, 1995, the FinancialAccounting Standards Board issued Statement of Financial Accounting StandardsNo. 123 ("Statement 123"), "Accounting for Stock-based Compensation." Theaccounting method as provided in the pronouncement is not required to beadopted; however, it is encouraged. The Company is not adopting the accountingprovisions of Statement 123. Had the Company accounted for its stock options inaccordance with Statement 123, pro forma net income and pro forma earnings pershare would have been approximately $6,599,000 and $1.30 for the year endedDecember 31, 1996. The pro forma disclosure is not likely to be indicative ofpro forma results which may be expected in future years because of the fact thatoptions vest over several years, pro forma compensation expense is recognized asthe options vest and additional awards may also be granted.          For purposes of determining the pro forma effect of these options, thefair value of each option is estimated on the date of grant based on the Black-Scholes option pricing model assuming no dividend yield, a risk free interestrate of 6.5%, a volatility factor of 25.0% and an expected life of 6.0 years.The weighted average fair value of options granted under the Company's 1996Incentive Plan for the year ended December 31, 1996, was $5.54. NOTE 10.  Profit-Sharing Plan          The Company has numerous profit-sharing plans and trusts under section401(k) of the Internal Revenue Code. Generally, for every dollar the employeecontributes, the Company will contribute an additional $.20 up to $100. Inaddition, the Company may make a profit sharing contribution at its discretion.Historically, the Company has contributed an amount equal to 3% of eachparticipant's compensation up to a maximum of $4,500. The Company'scontributions to the Plan were approximately $57,000, $50,000 and $704,000 for1994, 1995 and 1996, respectively.NOTE 11.  Related Party Transactions          In connection with the acquisition of a controlling interest in eachof the Hub Partnerships, the Company paid cash to the Class B Common Stock("Class B") stockholders, some of whom are officers of the Company, as well asofficers of the Company who are not Class B stockholders totaling approximately$16,571,000. The Company, related to this acquisition, also assumed balloonnotes that are payable, in part, to the above related parties totalingapproximately $4,758,000. Approximately 33% of the balloon notes payable atDecember 31, 1996, is due to the related parties. The Class B stockholders havevoting control over the Company. The same related parties described above alsocontinue to receive                                      30 approximately 33% of minority interest distributions of income from the Company.Furthermore, these parties received cash and notes from the Company totalingapproximately $6,062,000 when it acquired the remaining minority interest in HubCity Tennessee, L.P. and Hub City North Central, L.P.          The Company provided transportation services to Hub Partnerships priorto acquiring Hub Partnerships on March 18, 1996.  Revenue from Hub Partnershipswas $11,885,000, $14,712,000 and $3,459,000 for 1994, 1995 and the periodJanuary 1, through March 17, 1996, respectively.  Net fees were approximately$307,000, $440,000 and $104,000 for the same periods, respectively.          Hub Partnerships provided transportation services to the Company priorto being acquired, which resulted in costs of $13,535,000, $21,720,000 and$3,880,000 for 1994, 1995 and the period January 1, through March 17, 1996,respectively.          The Company paid assessment fees based primarily on volume and salescommission expenses to Hub Partnerships prior to acquiring Hub Partnerships.These charges totaled approximately $657,000, $670,000 and $112,000 for 1994,1995 and the period January 1, through March 17, 1996, respectively.          The Company leased a building from a shareholder.  Monthly payments in1995 were $9,178 and extended through November 1996.  The Company no longerleased the building from a shareholder beginning in December 1996.NOTE 12.  Legal Matters          In the ordinary course of conducting its business, the Company becomesinvolved in various lawsuits related to its business.  The Company does notbelieve that the ultimate resolution of these matters will be material to itsbusiness, financial position or results of operations.NOTE 13.  Equity                                                            December 31, 1995                                                      --------------------------                                                                    Issued and                                                       Authorized   Outstanding                                                      ------------ -------------                                                                          Preferred stock, $.01 par value                         2,000,000        -Common stock, no par value                                    200      200Class A common stock, $.01 par value                   12,337,700      100Class B common stock, $.01 par value                      662,300        -                                                          December 31, 1996                                                      --------------------------                                                                    Issued and                                                       Authorized   Outstanding                                                      ------------ -------------Preferred stock, $.01 par value                         2,000,000        -Class A common stock, $.01 par value                   12,337,700    5,261,250Class B common stock, $.01 par value                      662,300      662,296 NOTE 14.  Selected Quarterly Financial Data (Unaudited)     The following table sets forth selected quarterly financial data for eachof the quarters in 1995 and 1996 (in thousands, except per share amounts):                                                                   Quarters                                                -----------------------------------------                                                 First      Second     Third     Fourth                                                -----------------------------------------                                                                                          Year Ended December 31, 1995:Revenue                                         $18,934    $ 20,735   $ 20,590   $ 21,149Net revenue                                       1,564       1,488      1,542      1,672Operating income                                    610         588        667        702Net income                                          634         599        668        698Pro forma net income                                386         365        407        425Pro forma earnings per share                    $  0.23    $   0.22   $   0.24   $   0.26                                                                 Quarters                                                -----------------------------------------                                                 First      Second     Third     Fourth                                                -----------------------------------------Year Ended December 31, 1996:Revenue                                         $48,797    $209,236   $238,584   $257,626Net revenue                                       5,385      25,124     28,707     32,348Operating income                                  1,755       6,843      8,951     10,376Net income                                          883       1,662      2,105      2,394Pro forma net income                                642       1,662      2,105      2,394Pro forma earnings per share                    $  0.29    $   0.28   $   0.35   $   0.40                                        31 Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         FINANCIAL DISCLOSURE         None.                                    PART IIIItem 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT     The sections entitled "Election of Directors" and "Ownership of the CapitalStock of the Company"  appearing in the Registrant's proxy statement for theannual meeting of stockholders to be held on May 14, 1997, sets forth certaininformation with respect to the directors of the Registrant and Section 16compliance and is incorporated herein by reference.  Certain information withrespect to persons who are or may be deemed to be executive officers of theRegistrant is set forth under the caption "Executive Officers of the Registrant"in Part I of this report.Item 11.     EXECUTIVE COMPENSATION     The section entitled "Compensation of Directors and Executive Officers"appearing in the Registrant's proxy statement for the annual meeting ofstockholders to be held on May 14, 1997, sets forth certain information withrespect to the compensation of management of the Registrant and is incorporatedherein by reference.Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     The section entitled "Ownership of the Capital Stock of the Company"appearing in the Registrant's proxy statement for the annual meeting ofstockholders to be held on May 14, 1997, sets forth certain information withrespect to the ownership of the Registrant's Common Stock and is incorporatedherein by reference.Item 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS     The section entitled "Certain Transactions" appearing in the Registrant'sproxy statement for the annual meeting of stockholders to be held on May 14,1997, sets forth certain information with respect to certain businessrelationships and transactions between the Registrant and its directors andofficers and its incorporated herein by reference.                                    PART IVItem 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON FORM 8-K  (a)(1)  Financial Statements          The following consolidated financial statements of the Registrant areincluded under Item 8 of this Form 10-K:          Report of Independent Accountants          Consolidated Balance Sheets - December 31, 1996 and December 31, 1995                                       32           Consolidated Statements of Operations - Years ended December 31, 1996,          December 31, 1995 and December 31, 1994          Consolidated Statements of Stockholders' Equity - Years ended December          31, 1996, December 31, 1995 and December 31, 1994          Consolidated Statements of Cash Flows - Years ended December 31, 1996,          December 31, 1995 and December 31, 1994          Notes to Consolidated Financial Statements  (a) (2) Financial Statement Schedules          The remaining financial statements and statement schedule for whichprovision is made in Regulation S-X are set forth in the Index immediatelypreceding such financial statements and statement schedule and are incorporatedherein by reference.(a) (3)  Exhibits          The exhibits included as part of this Form 10-K are set forth in theExhibit Index immediately preceding such Exhibits and are incorporated herein byreference.  (b)  Reports on Form 8-K          Registrant filed a Report on Form 8-K dated December 12, 1996reporting under Item 5 the purchase of the remaining 70% minority interest inHub City North Central, L.P. in exchange for a note of approximately $15.0million due January 1, 1998, which bears interest at an annual rate of 7%. Nofinancial statements were filed in connection with this Report.                                       33                                    SIGNATURES     Pursuant to the requirements of Section 13 or 15(d) of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized.Date: March 26, 1997                HUB GROUP, INC.                                    By /s/ David P. Yeager                                       -------------------                                       David P. Yeager                                       Chief Executive Officer and Vice Chairman     Pursuant to the requirements of the Securities Exchange Act of 1934, thisreport has been signed below by the following persons in the capacities and onthe dates indicated:                                                   Title                               Date                                                                                      /s/ Phillip C.  Yeager        Chairman and Director                             March 26, 1997- -------------------------    Phillip C. Yeager/s/ David P. Yeager           Vice Chairman, Chief Executive Officer and        March 26, 1997- -------------------------     Director    David P. Yeager/s/ William L. Crowder        Vice President-Finance and Chief Financial        March 26, 1997- -------------------------     Officer (Principal Financial and Accounting    William L. Crowder        Officer)/s/ Thomas L. Hardin          President, Chief Operating Officer and            March 26, 1997- -------------------------     Director    Thomas L. Hardin/s/ Charles R. Reaves         Director                                          March 26, 1997- -------------------------    Charles R. Reaves/s/ Martin P. Slark           Director                                          March 26, 1997- -------------------------    Martin P. Slark/s/ Gary D. Eppen             Director                                          March 26, 1997- -------------------------    Gary D. Eppen                                       34                          INDEX TO FINANCIAL STATEMENTS                       AND FINANCIAL STATEMENT SCHEDULE  Hub Partnerships- ----------------                                                                                                   Report of Independent Accountants                                                             F-2Combined Balance Sheet - December 31, 1995                                                    F-3Combined Statements of Operations - Years ended December 31, 1994  and December 31, 1995 and the period January 1 through March 17, 1996                       F-4Combined Statements of Stockholders' Equity - Years ended December 31, 1994  and December 31, 1995 and the period January 1 through March 17, 1996                       F-5Combined Statements of Cash Flows - Years ended December 31, 1994 and  December 31, 1995 and the period January 1 through March 17, 1996                           F-6Notes to Combined Financial Statements                                                        F-7Hub Group, Inc. - ---------------Schedule II - Valuation and Qualifying Accounts                                               S-1                                      F-1                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTSTo the Stockholders of Hub Partnerships:          We have audited the accompanying combined balance sheet of HubPartnerships as of December 31, 1995 and the related combined statements ofoperations, stockholders' equity and cash flows for each of the two years in theperiod ended December 31, 1995 and the period January 1, 1996 through March 17,1996.  These financial statements are the responsibility of the Company'smanagement.  Our responsibility is to express an opinion on these financialstatements based on our audits.          We conducted our audits in accordance with generally accepted auditingstandards.  Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement.  An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.  An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.          In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Hub Partnerships asof December 31, 1995 and the results of their operations and their cash flowsfor each of the two years in the period ended December 31, 1995 and the periodJanuary 1, 1996 through March 17, 1996, in conformity with generally acceptedaccounting principles.                                       ARTHUR ANDERSEN LLPChicago, IllinoisFebruary 6, 1997                                      F-2                               HUB PARTNERSHIPS                            COMBINED BALANCE SHEET                                (in thousands)                                                                   December 31,                                                                 ------------                                                                     1995                                                                 ------------                                                                      ASSETS CURRENT ASSETS:   Cash and cash equivalents                                         $10,949   Accounts receivable, net     Trade                                                            74,406     Affiliate                                                         1,774   Prepaid expenses and other current assets                           2,473                                                                     -------     TOTAL CURRENT ASSETS                                             89,602 PROPERTY AND EQUIPMENT, net                                           8,993 OTHER ASSETS                                                            367                                                                     -------     TOTAL ASSETS                                                    $98,962                                                                     =======LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:   Accounts payable     Trade                                                           $64,212     Affiliate                                                         2,376     Other                                                             3,323   Accrued expenses     Payroll                                                           4,125     Other                                                             1,115   Current portion of long-term debt                                     681                                                                     -------       TOTAL CURRENT LIABILITIES                                      75,832 LONG-TERM DEBT, EXCLUDING CURRENT PORTION                             1,007 CONTINGENCIES AND COMMITMENTS MANDATORILY REDEEMABLE COMMON STOCK                                  10,386 STOCKHOLDERS' EQUITY:   Common stock                                                        1,943   Additional paid-in capital                                            629   Treasury stock                                                        (32)   Retained earnings                                                   9,197                                                                     -------     TOTAL STOCKHOLDERS' EQUITY                                       11,737                                                                     -------       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $98,962                                                                     =======The accompanying notes to combined financial statements are an integral part of                               this balance sheet.                                      F-3                               HUB PARTNERSHIPS                       COMBINED STATEMENTS OF OPERATIONS                                (in thousands)                                                  Years Ended December 31,             January 1,                                              ---------------------------------         through                                                  1994                 1995          March 17, 1996                                               -----------         ------------      --------------                                                                                            REVENUE: Trade                                           $611,694            $644,124           $142,413 Affiliate                                         14,192              22,390              3,992                                                 --------            --------           --------   Total revenue                                  625,886             666,514            146,405PURCHASED TRANSPORTATION                          558,263             584,840            128,405                                                 --------            --------           -------- Net revenue                                       67,623              81,674             18,000COSTS AND EXPENSES: Salaries and benefits                             33,751              41,049              9,807 Selling, general and administrative               12,875              16,052              3,393 Depreciation and amortization                      1,755               2,453                553                                                 --------            --------           --------   Total costs and expenses                        48,381              59,554             13,753   Operating income                                19,242              22,120              4,247                                                 --------            --------           --------OTHER INCOME (EXPENSE): Interest expense                                    (258)               (147)               (56) Interest income                                      709                 623                120 Other, net                                           320                 462                 95                                                 --------            --------           --------   Total other income (expense)                       771                 938                159INCOME BEFORE INCOME TAXES                         20,013              23,058              4,406INCOME TAXES                                          310                 290                126                                                 --------            --------           --------NET INCOME                                       $ 19,703            $ 22,768           $  4,280                                                 ========            ========           ========The accompanying notes to combined financial statements are an integral part of                                these statements.                                      F-4                               HUB PARTNERSHIPS                  COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY                 For the two years ended December 31, 1995 and                       January 1, 1996 to March 17, 1996                         (in thousands, except shares)                                                  Common Stock      Additional                         Total                                              --------------------   Paid-in    Treasury  Retained  Stockholders'                                                Shares    Amount     Capital     Stock    Earnings     Equity                                              ---------  ---------  ---------  ---------  --------  -------------                                                                                                              Balance at January 1, 1994                     102,217    $ 1,893     $ 509       $(42)   $ 10,437    $  12,797 Net income                                          -          -         -          -      19,703       19,703 Distributions to stockholders                       -          -         -          -     (15,085)     (15,085) Stock issued                                    4,633         25         -         14           -           39 Stock purchased                                (1,100)         -         -         (4)          -           (4) Retained earnings allocable to                                                                               -   mandatorily redeemable stock                      -          -         -          -      (1,724)      (1,724)                                               -------    -------     -----       ----   ---------    ---------Balance at December 31, 1994                   105,750      1,918       509        (32)     13,331       15,726 Net income                                          -          -         -          -      22,768       22,768 Distributions to stockholders                       -          -         -          -     (24,122)     (24,122) Stock issued                                       50         25       120          -           -          145 Retained earnings allocable to   mandatorily redeemable stock                      -          -         -          -      (2,780)      (2,780)                                               -------    -------     -----       ----   ---------      -------Balance at December 31, 1995                   105,800      1,943       629        (32)      9,197       11,737 Net income                                          -          -         -          -       4,280        4,280 Distributions to stockholders                       -     (1,730)     (629)        32     (13,477)     (15,804)                                               -------    -------     -----       ----   ---------    ---------Balance at March 17, 1996                      105,800    $   213     $   -       $  -   $       -     $    213                                               =======    =======     =====       ====   =========    =========The accompanying notes to combined financial statements are an integral part of                               these statements.                                      F-5                                                                  HUB PARTNERSHIPS                                                 COMBINED STATEMENTS OF CASH FLOWS                                                          (in thousands)                                                                                                                                                                                           Years Ended December 31,                   January 1,                                                                   ---------------------------------                through                                                                       1994                 1995                 March 17, 1996                                                                   ------------          -----------            ---------------                                                                                                                        Cash flows from operating activities:  Net income                                                       $     19,703          $    22,768            $         4,280  Adjustments to reconcile net income to net cash    provided by operating activities:      Depreciation and amortization                                       1,755                2,453                        553      Loss (gain) on sale of assets                                          58                  (92)                         3      Changes in working capital:       Accounts receivable, net                                         (16,447)              (2,822)                       604       Prepaid expenses and other current assets                         (1,122)                (780)                       889       Accounts payable                                                  13,088                1,794                      4,783       Accrued expenses                                                   1,789                  508                       (140)       Other assets                                                         198                  (58)                      (407)                                                                   ------------          -----------            ---------------        Net cash provided by operations                                  19,022               23,771                     10,565                                                                   ------------          -----------            ---------------Cash flows from investing activities:  Purchases of property and equipment, net                               (3,688)              (4,485)                      (775)                                                                   ------------          -----------            ---------------Cash flows from financing activities:  Proceeds from sale of common stock                                        39                   145                        -  Distributions to stockholders                                        (15,085)              (24,122)                   (13,014)   Purchase and retirement of common stock                                   (4)                  -                          -  Payments on long-term debt                                              (511)                 (927)                      (361)   Proceeds from issuance of long-term debt                                 371                 1,762                        418                                                                   ------------          -----------            ---------------        Net cash used in financing activities                          (15,190)              (23,142)                   (12,957)                                                                    ------------          -----------            ---------------Net increase (decrease) in cash                                            144                (3,856)                    (3,167)Cash, beginning of period                                               14,661                14,805                     10,949                                                                   ------------          -----------            ---------------Cash, end of period                                                $    14,805           $    10,949            $         7,782                                                                   ===========           ===========            ===============Supplemental disclosures of cash flow information:  Cash paid for:   Interest                                                        $        75           $       116            $            56   Income taxes                                                            335                   262                        130  Non-cash financing activity:    Notes payable issued as distributions to stockholders          $       -             $       -              $        13,176                 The accompanying notes to combined financial statements are an integral part of these statements.                                      F-6                                HUB PARTNERSHIPS                    NOTES TO COMBINED FINANCIAL STATEMENTSNOTE 1. Description of Business and Summary of Significant Accounting PoliciesBusiness:  The Company (defined below) provides intermodal transportationservices utilizing third party arrangements with railroads and drayagecompanies. The Company also arranges for transportation of freight by truck andperforms logistics services.Principles of Combinations:  These combined financial statements include thefinancial statements of 26 S corporations and one partnership which aresubstantially all under common ownership control (collectively referred to asthe "Company" or "Hub Partnerships"). The financial statements of HubPartnerships are presented herein to reflect the financial condition and resultsof operations of Hub Partnerships as of and for the periods in which HubPartnerships was the predecessor to the business acquired by Hub Group, Inc., asrequired pursuant to the rules and regulations of the Securities and ExchangeCommission. All significant intercompany transactions and balances have beeneliminated.Cash and Cash Equivalents:  The Company considers as cash equivalents all highlyliquid investments with an original maturity of three months or less.Receivables:  The Company has recorded a reserve for uncollectible accountsreceivable of approximately $898,000 at December 31, 1995.Property and Equipment:  Property and equipment are stated at cost. Depreciationof property and equipment is computed using the straight-line and variousaccelerated methods at rates adequate to depreciate the cost of applicableassets over their expected useful lives: buildings and improvements 15 to 40years; leasehold improvements the shorter of useful life or lease term;furniture and equipment 3 to 10 years; and transportation equipment 3 to 12years. Maintenance and repairs are charged to operations as incurred and majorimprovements are capitalized. The cost of assets retired or otherwise disposedof and the accumulated depreciation thereon are removed from the accounts withany gain or loss realized upon sale or disposal charged or credited tooperations.Concentration of Credit Risk:  The Company's financial instruments that areexposed to concentrations of credit risk consist primarily of cash and cashequivalents and trade accounts receivable. The Company places its cash andtemporary investments with high quality financial institutions. At times, suchinvestments may be in excess of the FDIC insurance limit. Temporary investmentsare valued at the lower of cost or market and at the balance sheet date,approximates fair market value. The Company primarily serves customers locatedthroughout the United States with no significant concentration in any oneregion. The Company reviews a customer's credit history before extending credit.In addition, the Company routinely assesses the financial strength of itscustomers and, as a consequence, believes that its trade accounts receivablerisk is limited.Revenue Recognition:  Revenue represents sales of services to customers.Revenue is recognized based on relative transit time.Income Taxes:  The majority of the entities included in Hub Partnerships haveelected to be taxed as S Corporations. By this election, income of an SCorporation is taxable to the stockholders rather than the Company itself.Income tax expense primarily represents applicable state income taxes of thosestates that do not recognize Subchapter S Corporations or states which imposetaxes on S Corporation income.Distributions:  The Company makes periodic distributions of income which arereflected in the accompanying statements of stockholders' equity.                                      F-7 Use of Estimates:  The preparation of financial statements in conformity withgenerally accepted accounting principles requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenue and expense during the reportingperiod. Actual results could differ from those estimates. Reclassifications:  Certain items previously reported have been reclassified toconform with the 1996 presentation.NOTE 2.  Property and EquipmentProperty and equipment consist of the following:                                                     December 31,                                                        1995                                                     ------------                                                       (000's)                                                          Land                                                 $        92Building and improvements                                  1,376Leasehold improvements                                       674Furniture and equipment                                   11,980Transportation equipment                                   2,353                                                     -----------                                                          16,475Less:  Accumulated depreciation and                   amortization                                             (7,482)                                                     -----------    PROPERTY AND EQUIPMENT, net                      $     8,993                                                     ----------- NOTE 3.  Long-Term Debt and Financing Arrangements      Fair value approximates book value at the balance sheet date.                                                       December 31,                                                        1995                                                     ------------                                                        (000's)                                                           Line of credit loans due May 1996 and October 1996,  interest payable monthly, ranging from 1% interest payable monthly, ranging from 1% above the bank's prime lending rate to prime plus  2%, secured by certain property and  equipment,  chattel paper, and intangibles                      $       125Installment notes payable through the                 year 1999, monthly installments ranging from                          $263-$10,929, including interest, ranging from  2.9% to 12%, collateralized by certain property           1,159Mortgage note payable due in 1998 with                monthly installments of $2,381, including interest,  at 8.5% collateralized by certain receivables,          certain  property and personally guaranteed by a  stockholder                                                 217Note payable to Hub Group, Inc., due on               demand, with interest payable quarterly at prime  plus 1%                                                     100Capital lease obligations, collateralized by certain  equipment                                                    87                                                      -----------      Total long-term debt                                  1,688     Less current maturities                                (681)                                                     ------------                                                     $     1,007                                                     ------------                                      F-8           Aggregate principal payments, in thousands, due subsequent to December          31, 1995, are as follows:                                                                           1996                                                                 $       6811997                                                                         4061998                                                                         5001999                                                                         101                                                                     -----------                                                                     $     1,688                                                                     -----------     The Company had unused aggregate lines of credit of approximately$5,975,000 at December 31, 1995 with expiration dates beginning in January 1996.$5,000,000 has no expiration date. Interest rates range from prime less 3/4% toprime plus 2%. Borrowings are secured by certain assets.NOTE 4.  Rental Expense and Lease Commitments     Minimum annual rental commitments, in thousands, at December 31, 1995,under noncancellable operating leases, principally for real estate andequipment, are payable as follows:                                                                           1996                                                                 $     2,1981997                                                                       1,5571998                                                                         9661999                                                                         7162000                                                                         6242001 & thereafter                                                            853                                                                     -----------Total minimum lease payments                                         $     6,914                                                                     -----------          Total rental expense was approximately $1,629,000, $2,190,000 and$423,000 for 1994, 1995 and the period January 1, through March 17, 1996,respectively. Many of the leases contain renewal options and escalation clauseswhich require payments of additional rent to the extent of increases in therelated operating costs.NOTE 5.  Legal Matters     In the ordinary course of conducting its business, the Company becomesinvolved in various lawsuits related to its business. The Company does notbelieve that the ultimate resolution of these matters will be material to itsbusiness, financial position or results of operations.NOTE 6.  Profit-Sharing Plan     The Company has numerous profit-sharing plans and trusts under section401(k) of the Internal Revenue Code. Generally, for every dollar the employeecontributes the Company will contribute an additional $.20 up to $100. Inaddition, the Company may make a profit sharing contribution at its discretion.Historically, the Company has contributed an amount equal to 3% of eachparticipant's compensation up to a maximum of $4,500. The Company'scontributions to the Plan were approximately $562,000, $713,000 and $287,000 for1994, 1995 and the period January 1, through March 17, 1996, respectively. NOTE 7.  Related Party Transactions     The Company provides transportation services to Hub Group, Inc. Revenuefrom Hub Group, Inc. was $13,535,000, $21,720,000 and $3,880,000 for 1994, 1995and the period January 1, through March 17, 1996, respectively. Net fees earnedwere $670,000, $734,000 and $116,000 for the same periods, respectively.                                      F-9           Hub Group, Inc. provides transportation services to the Company, whichresulted in costs of $11,885,000, $14,712,000 and $3,459,000 for 1994, 1995 andthe period January 1 through March 17, 1996, respectively.          The Company charges assessment fees based primarily on volume andsales commission expense to Hub Group, Inc. Revenue for such fees wereapproximately $657,000, $670,000 and $112,000 for 1994, 1995 and the periodJanuary 1 through March 17, 1996, respectively.          During 1994, the Company leased four facilities from stockholders.During 1995 and the period January 1, through March 17, 1996, the Company leasedtwo facilities from stockholders. Rental expense relating to these agreementswas approximately $193,000, $147,000 and $39,000 for 1994, 1995 and the periodJanuary 1 through March 17, 1996, respectively. The terms of the leases extendthrough 2000.NOTE 8.  Stockholder Agreements     The majority of the entities included in Hub Partnerships have agreementswith certain of their stockholders which set forth rights of the stockholdersand the corporation. Generally, the agreements require that any stockholderwishing to sell his shares must first offer the shares for sale to thecorporation and then to the other stockholders, before offering them to a thirdparty. Generally the agreements state that upon death, disability, or retirementof a stockholder, the stockholder is required to offer to sell all of the sharesowned by the stockholder to the corporation. Certain agreements stipulate thecorporation is required to purchase these shares. Under the majority of theagreements, selling price approximates book value, and under two agreements theselling price approximates fair market value. Generally the agreements alsostate that, in the event that a stockholder is terminated, the stockholder isrequired to offer to sell his shares to the corporation. Certain agreementsstipulate the corporation is required to purchase the stockholder's shares.Redemption amounts relating to agreements with mandatory redemption features areincluded in Mandatorily Redeemable Common Stock in the accompanying balancesheet. Payments for shares generally is made over a five-year period.Additionally, these agreements generally contain non-compete clauses whichpreclude a stockholder, while employed by the corporation, from managing,operating, or controlling a business either similar or dissimilar to thebusiness carried on by the corporation. The clause also states that followingemployment by the corporation, a stockholder may not be employed by or performservices for any competitor for a period of up to two years. These agreementscontinue with respect to the S Corporations' limited partnership interests inthe operating partnerships of Hub Group, Inc.NOTE 9.  Special Distribution     Immediately prior to March 18, 1996, the Company distributed substantiallyall of its equity, including retained earnings through March 17, 1996, to itsshareholders in the form of cash and notes. The notes are five-year balloonnotes bearing interest at an annual rate of 5.45%. Interest is compoundedannually with all principal and interest due in March 2001.                                     F-10 NOTE 10.  Stock          The following tables outline the shares of common stock andmandatorily redeemable stock authorized, issued, outstanding and in treasury.                                                                     December 31,Common Stock                                                            1995- -----------------------------------------------                     ------------                                                                          Authorized                                                               156,500Issued                                                                    89,000Outstanding                                                               84,733Treasury Stock                                                             4,267                                                                        December 31,Mandatorily Redeemable Stock                                            1995- ------------------------------------------------                    ------------                                                                          Authorized                                                                33,967Issued                                                                    21,067Outstanding                                                               21,067Treasury Stock                                                                 -                                       F-11                                                                                                   SCHEDULE II                                               HUB GROUP, INC.                                      VALUATION AND QUALIFYING ACCOUNTS                                                                                        Balance at    Charged to                                                     Beginning      Costs &                      Balance at                                                     of Year       Expenses       Deduction      End of Year                                                    -------------  ------------  -------------  ---------------  Year Ended December 31:                                                                                  Allowance for uncollectible accounts receivable    1996                                           $  125,000     $  768,000    $ (488,000)    $  405,000    1995                                              110,000         15,000           -          125,000    1994                                                  -          110,000           -          110,000                                      S-1                                INDEX TO EXHIBITS                                                                                              Sequentially                                                                                              NumberedNumber                              Exhibit                                                     Page- ------                              -------                                                 ------------                                                                                                                     2.1    Purchase Agreement among the Registrant, American President Companies,        Ltd. and APL Land Transport Services, Inc. (incorporated by reference to        the Registrants report on Form 8-K dated May 2, 1996 and filed May 17,        1996, File No. 0-27754)...................................................... 2.2    Purchase and Sale Agreement among Hub Holdings, Inc. and Hub City North        Central, Inc................................................................. 3.1    Amended Certificate of Incorporation of the Registrant (incorporated by        reference to Exhibit 3.1 and 3.3 to the Registrant's registration        statement on Form S-1, File No. 33-9021)..................................... 3.2    By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to        the Registrant's registration statement on Form S-1, File No. 33-9021)....... 10.1   Form of Amended and Restated Limited Partnership Agreement................... 10.2   Amended and Restated Limited Partnership Agreement of Hub City Canada,        L.P.......................................................................... 10.3   Form of Non-Competition Agreement............................................ 10.4   Purchase and Sale Agreement between the Registrant and the Stockholders        of Hub City Terminals, Inc. (incorporated by reference to Exhibit 10.3        to the Registrant's registration statement on Form S-1, File No.        33-90210).................................................................... 10.5   Hub Group Distribution Services Purchase and Sale Agreement.................. 10.6   Management Agreement......................................................... 10.7   Stockholders' Agreement...................................................... 11.1   Statement re computation of per share earnings............................... 21     Subsidiaries of the Registrant............................................... 23.1   Consent of Arthur Andersen LLP............................................... 27     Financial Data Schedule......................................................                                                                      EXHIBIT 2.2                          PURCHASE AND SALE AGREEMENT     THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of November21, 1996, is between Hub Holdings, Inc., a Delaware corporation ("HubHoldings"), and Hub City North Central, Inc., a Wisconsin corporation("Seller").     WHEREAS, Seller is the sole limited partner of Hub City North Central,L.P., a Delaware limited partnership (the "Partnership"), and Hub Group, Inc. isthe sole shareholder of the sole general partner of the Partnership; and     WHEREAS, Seller desires to sell to Hub Holdings all of Seller's limitedpartnership interest (the "Interest") in the Partnership and Hub Holdingsdesires to purchase such Interest on the terms and subject to the conditionsdescribed herein.     NOW, THEREFORE, in consideration of the premises and of the mutualcovenants, agreements and warranties herein contained, the parties hereto agreeas follows:     1.   Purchase and Sale.  Subject to the terms and conditions herein setforth, Hub Holdings agrees to purchase from Seller, and Seller agrees to sell toHub Holdings, the Interest owned by Seller in exchange for $14,969,576, to bepaid in the form of the promissory note attached hereto as Exhibit A (the"Note").     2.   Closing.  The purchase of the Interest shall occur as soon aspracticable after the approval of this Agreement as contemplated by Section 7hereof. The closing shall take place at the offices of Mayer, Brown & Platt, 190South LaSalle Street, Chicago, Illinois 60603. At the closing, Hub Holdingsshall deliver to Seller a duly executed original of the Note, and Seller shalldeliver to Hub Holdings such instruments of transfer as Hub Holdings shallreasonably request.     3.   Representations and Warranties of Hub Holdings.  Hub Holdings herebyrepresents and warrants to Seller as follows:          (a)  Due Organization.  Hub Holdings 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.          (b)  Authorization.  Hub Holdings has the requisite power to enter     into this Agreement and to carry out its obligations hereunder. This     Agreement has been, and the Note will be, duly authorized, executed and     delivered by Hub Holdings and constitutes a valid and binding agreement,     enforceable against Hub Holdings 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 Holdings'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 Holdings of     this Agreement and the consummation of the transactions contemplated     hereby.     4.   Representations and Warranties of Seller. Seller hereby represents and     warrants to Hub Holdings 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.          (b)  Authorization.  Seller has the requisite power and authority to     enter into this Agreement and, subject to receiving the Required     Shareholder Approval (as defined below), 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.          (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     Holdings will be sufficient to transfer its Interest. Subject to receiving     the Required Shareholder Approval, Seller has full power and authority to     convey good and marketable title to the Interest, and upon such                                      -2-      transfer, Hub Holdings will receive good and marketable title thereto, free     and clear of all liens.     5.   Conditions to the Obligations of Hub Holdings.  The obligations of HubHoldings under this Agreement are subject to the fulfillment of each of thefollowing conditions:          (a) Representations and Warranties.  The representations and     warranties in this Agreement made by Seller shall be true in all material     respects on the date hereof.          (b) Performance.  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.          (d) Required Shareholder Approval.  Seller shall have received the     Required Shareholder Approval.          (e) Material Adverse Affect.  There shall not have occurred any event     or development that, in the sole and absolute judgment of Hub Holdings,     would materially and adversely affect the value of the transactions     contemplated hereby to Hub Holdings or its sole shareholder.     6.   Conditions to the Obligations of Seller.  The obligations of Sellerunder this Agreement are subject to the fulfillment of each of the followingconditions:          (a) Representations and Warranties.  The representations and     warranties in this Agreement made by Hub Holdings shall be true in all     material respects on the date hereof.          (b) Performance.  Hub Holdings 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.          (d) Required Shareholder Approval.  Seller shall have received the     Required Shareholder Approval.                                      -3-      7.   Required Shareholder Approval.  Seller shall promptly take such actionas may be required by its governing instruments and applicable law to seek toobtain the requisite approval of its shareholders of this Agreement and thetransactions contemplated hereby (the "Required Shareholder Approval"). Sellershall use its best efforts to receive the Required Shareholder Approval and theboard of directors shall recommend to the shareholders of Seller the approval ofthis Agreement and the transactions contemplated hereby.     8.   Successors and Assigns.  This Agreement shall be binding upon, andinure to the benefit of, the parties hereto and their respective heirs, personalrepresentatives, successors, assigns and affiliates, but shall not be assignableby any party hereto without the prior written consent of the other partieshereto.     9.   Notices.  Any notice or other communication provided for herein orgiven hereunder to a party hereto shall be in writing and shall be given bydelivery, by telex, telecopier or by mail (registered or certified mail, postageprepaid, return receipt requested) to the respective parties as follows:     If to Hub Holdings:          Hub Holdings, Inc.          377 East Butterfield Road          Suite 700          Lombard, IL  60148          Attention:  David P. Yeager          Facsimile:  (708) 964-6475     If to Seller:          Hub City North Central, Inc.          9242 W. National Avenue          Milwaukee, WI  53227          Facsimile:  (414) 545-7424     10.  Waiver.  No party may waive any of the terms or conditions of thisAgreement except by a duly signed writing referring to the specific provision tobe waived.     11.  Entire Agreement.  This Agreement constitutes the entire agreement,and supersedes all other prior agreements and understandings, both written andoral, among the parties hereto and their affiliates with respect to the mattersset forth herein.     12.  Expenses.  Except as otherwise expressly contemplated herein to thecontrary, regardless of whether the transactions contemplated hereby areconsummated, each party shall                                      -4- bear its own expenses incident to preparing for, entering into and carrying outthis Agreement and the consummation of the transactions contemplated hereby.     13.  No Third Party Beneficiaries.  This Agreement is solely for thebenefit of the parties hereto and, no provision of this Agreement shall bedeemed to confer upon other third parties any remedy, claim, liability,reimbursement, cause of action or other right.     14.  Severability.  If any provision of this Agreement shall be heldinvalid, illegal or unenforceable, the validity, legality or enforceability ofthe other provisions hereof shall not be affected thereby, and there shall bedeemed substituted for the provision at issue a valid, legal and enforceableprovision as similar as possible to the provision at issue.     15.  Captions.  The Section and Paragraph captions herein are forconvenience of reference only, do not constitute part of this Agreement andshall not be deemed to limit or otherwise affect any of the provisions hereof.     16.  Counterparts.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original but all of which shallconstitute one and the same instrument.     17.  Governing Law.  This Agreement shall be governed by, and construed andenforced in accordance with, the laws of the State of Delaware.     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted and delivered as of the day and year first executed.                                 HUB HOLDINGS, INC.                                 By:  /s/ David P. Yeager                                      -------------------                                      David P. Yeager                                      Authorized Officer                                 HUB CITY NORTH CENTRAL, INC.                                 By:  /s/ David P. Yeager                                      -------------------                                      David P. Yeager                                      Authorized Officer                                      -5-                                    EXHIBIT A                            Form of Promissory NoteDecember 12, 1996                                                  US$14,969,576     For value received, the undersigned, Hub Holdings, Inc., a Delawarecorporation or its assigns (herein the "PAYOR"), promises to pay to the order ofHub City North Central, Inc., FOURTEEN MILLION, NINE HUNDRED SIXTY-NINE THOUSANDFIVE HUNDRED SEVENTY-SIX DOLLARS (US$14,969,576), plus interest on the unpaidprincipal amount hereof outstanding from time to time at the applicable Rate ofInterest (as defined below), at such times and on such terms as described below.     1.  Repayment of Principal.  The aggregate principal amount of thisPromissory Note shall be payable in whole on January 1, 1998, such date beingreferred to as the Final Maturity Date.     2.  Payment of Interest.  Interest will be payable at maturity, whether byoptional prepayment or on the Final Maturity Date.  All interest will becalculated for the actual number of days elapsed on the basis of a 365-day year.     3.  Rate of Interest.  The Rate of Interest shall be seven percent (7%).In the event of any default in the payment of interest or principal hereunder,the Rate of Interest shall be nine percent (9%) for such period that the PAYORshall be in default.     4.  Optional Prepayment.  The PAYOR, at its option, may prepay thisPromissory Note, together with all accrued interest on the principal balanceprepaid, in whole or in part at any time prior to the Final Maturity Date.     In addition to, and not in limitation of, the foregoing, the undersignedfurther agrees, subject only to any limitation imposed by applicable law, to payall expenses, including reasonable attorneys' fees and expenses, incurred by theholder of this Promissory Note in seeking to collect any amounts payablehereunder which are not paid when due.     All parties hereto, whether as makers, endorsers, or otherwise, severallywaive presentment for payment, protest, and notice of dishonor. Recourse underthis Promissory Note shall be limited solely to the assets of the PAYOR.     This Promissory Note may not be changed or modified orally.     THIS PROMISSORY NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OFDELAWARE.     IN WITNESS WHEREOF, the undersigned has executed this Promissory Note as ofthe date first above written.                                       HUB HOLDINGS, INC.                                       By:                                          -----------------------------------                                          Name:   David P. Yeager                                          Title:  Authorized Officer                                      A-1                                    GUARANTY     The undersigned hereby absolutely and unconditionally guarantees the dueand punctual payment and performance under the foregoing Promissory Note fromHub Holdings, Inc. in favor of Hub City North Central, Inc. in the originalprincipal amount of $14,969,576.                                       HUB GROUP, INC.                                       By:                                          ----------------------------------                                          David P. Yeager                                          Vice Chairman                                     A-2                                                                     EXHIBIT 10.1              FORM OF AMENDED AND RESTATED PARTNERSHIP AGREEMENT FOR                            HUB CITY ALABAMA, L.P.                            HUB CITY ATLANTA, L.P.                             HUB CITY BOSTON, L.P.                           HUB CITY CLEVELAND, L.P.                             HUB CITY DALLAS, L.P.                            HUB CITY DETROIT, L.P.                            HUB CITY FLORIDA, L.P.                          HUB CITY GOLDEN GATE, L.P.                            HUB CITY HOUSTON, L.P.                          HUB CITY INDIANAPOLIS, L.P.                          HUB CITY KANSAS CITY, L.P.                          HUB CITY LOS ANGELES, L.P.                          HUB CITY MID-ATLANTIC, L.P.                           HUB CITY NEW HAVEN, L.P.                          HUB CITY NEW ORLEANS, L.P.                         HUB CITY NEW YORK STATE, L.P.                      HUB CITY NEW YORK-NEW JERSEY, L.P.                         HUB CITY NORTH CENTRAL, L.P.                              HUB CITY OHIO, L.P.                          HUB CITY PHILADELPHIA, L.P.                           HUB CITY PITTSBURGH, L.P.                            HUB CITY PORTLAND, L.P.                           HUB CITY RIO GRANDE, L.P.                           HUB CITY ST. LOUIS, L.P.                           HUB CITY TENNESSEE, L.P.                               AMENDED AND RESTATED                        AGREEMENT OF LIMITED PARTNERSHIP                                       OF                             HUB CITY ALABAMA, L.P.                                    TABLE OF CONTENTS                                   ARTICLE I                                   DEFINED TERMS......................1  "Act".............................................................. 1  "Adjusted Capital Account"......................................... 2  "Adjusted Capital Account Deficit"................................. 2  "Adjusted Property"................................................ 2  "Affiliate"........................................................ 2  "Agreed Value"..................................................... 2  "Agreement"........................................................ 2  "Available Cash"................................................... 2  "Average Net After-Tax Profit"..................................... 3  "Book-Tax Disparities"............................................. 3  "Business Day"..................................................... 4  "Capital Account".................................................. 4  "Capital Contribution"............................................. 4  "Carrying Value"................................................... 4  "Certificate"...................................................... 4  "Code"............................................................. 4  "Common Stock"..................................................... 4  "Contributed Property"............................................. 4  "Depreciation"..................................................... 4  "Discount Rate".................................................... 5  "Event of Dissolution"............................................. 5  "Formation General Partner"........................................ 5  "Formation Limited Partner"........................................ 5  "General Partner".................................................. 5  "General Partnership Interest"..................................... 5  "IRS".............................................................. 5  "Incapacity"....................................................... 5  "Indemnitee"....................................................... 6  "Limited Partner".................................................. 6  "Limited Partnership Interest"..................................... 6  "Liquidator"....................................................... 6  "Net After-Tax Profit"............................................. 6  "Net Income"....................................................... 6  "Net Loss"......................................................... 6  "Non-Competition Agreement"........................................ 6  "Nonrecourse Built-in Gain"........................................ 6  "Nonrecourse Deductions"........................................... 7  "Nonrecourse Liability"............................................ 7                                        i   "Original Agreement"............................................. 7  "Partner"........................................................ 7  "Partner Minimum Gain"........................................... 7  "Partner Nonrecourse Debt"....................................... 7  "Partner Nonrecourse Deductions"................................. 7  "Partnership".................................................... 7  "Partnership Interest"........................................... 7  "Partnership Minimum Gain"....................................... 7  "Partnership Year"............................................... 7  "Percentage Interest"............................................ 7  "Person"......................................................... 8  "Price/Earnings Multiple"........................................ 8  "Purchase Amount"................................................ 8  "Purchase Notice"................................................ 8  "Purchase Right"................................................. 8  "Recapture Income"............................................... 8  "Regulations".................................................... 8  "Residual Gain" or "Residual Loss"............................... 8  "704(c) Value"................................................... 8  "Subsidiary"..................................................... 9  "Substituted Limited Partner".................................... 9  "Unrealized Gain"................................................ 9  "Unrealized Loss"................................................ 9  "Value".......................................................... 9                            ARTICLE II                      ORGANIZATIONAL MATTERS....................... 10  Section 2.1        Continuation; Application of Act.............. 10  Section 2.2        Name.......................................... 10  Section 2.3        Registered Office and Agent; Principal Office. 10  Section 2.4        Term.......................................... 11                                 ARTICLE III                                   PURPOSE......................... 11  Section 3.1        Purpose and Business.......................... 11  Section 3.2        Powers........................................ 12                                   ARTICLE IVCAPITAL CONTRIBUTIONS; ISSUANCE OF INTERESTS; CAPITAL ACCOUNTS..... 11  Section 4.1        Capital Contributions of the Partners......... 11  Section 4.2        Capital Accounts of the Partners.............. 12                                   ARTICLE V                                        ii                                                                                                                     DISTRIBUTIONS.............................. 15Section 5.1    Requirement and Characterization of Distributions............ 15Section 5.2    Amounts Withheld............................................. 15Section 5.3    Distributions Upon Liquidation............................... 15                                   ARTICLE VI                                 ALLOCATIONS................................ 15Section 6.1    Allocations For Capital Account Purposes..................... 15Section 6.2    Special Allocation Rules..................................... 16Section 6.3    Allocations for Tax Purposes................................. 18                                  ARTICLE VII            MANAGEMENT AND OPERATIONS OF BUSINESS........................... 19Section 7.1    Management................................................... 19Section 7.2    Certificate of Limited Partnership........................... 22Section 7.3    Restrictions on General Partner's Authority.................. 22Section 7.4    Responsibility for Expenses.................................. 22Section 7.5    Outside Activities of the General Partner.................... 23Section 7.6    Contracts with Affiliates.................................... 23Section 7.7    Indemnification.............................................. 24Section 7.8    Liability of the General Partner............................. 26Section 7.9    Other Matters Concerning the General Partner................. 27Section 7.10   Title to Partnership Assets.................................. 27Section 7.11   Reliance by Third Parties.................................... 27                                  ARTICLE VIII            RIGHTS AND OBLIGATIONS OF LIMITED PARTNER....................... 28Section 8.1    Limitation of Liability...................................... 28Section 8.2    Management of Business....................................... 28Section 8.3    Outside Activities of Limited Partner........................ 28Section 8.4    Priority Among Partners...................................... 29Section 8.5    Rights of Limited Partner Relating to the Partnership........ 29Section 8.6    Purchase Right............................................... 30                                   ARTICLE IX            BOOKS, RECORDS, ACCOUNTING AND REPORTS.......................... 31Section 9.1    Records and Accounting....................................... 31Section 9.2    Fiscal Year.................................................. 31Section 9.3    Reports...................................................... 31                                   ARTICLE X            TAX MATTERS..................................................... 31Section 10.1    Preparation of Tax Returns.................................. 31                                      iii                                                                                  Section 10.2    Tax Elections..............................................  32Section 10.3    Tax Matters Partner........................................  32Section 10.4    Organizational Expenses....................................  33Section 10.5    Withholding................................................  33                                      iv                                  ARTICLE XI                                                                                                          TRANSFERS AND WITHDRAWALS........................  34Section 11.1   Transfer....................................................  34Section 11.2   Transfer of General Partner's Partnership Interest..........  34Section 11.3   Limited Partner's Rights to Transfer........................  35Section 11.4   General Provisions..........................................  36                                  ARTICLE XII                            ADMISSION OF PARTNERS..........................  36Section 12.1   Admission of Successor General Partner......................  36Section 12.2   Admission of Additional Limited Partners....................  36Section 12.3   Amendment of Agreement and Certificate......................  37                                 ARTICLE XIII                          DISSOLUTION AND LIQUIDATION......................  37Section 13.1   Dissolution.................................................  37Section 13.2   Right to Continue the Partnership Business..................  38Section 13.3   Winding Up..................................................  38Section 13.4   Compliance with Timing Requirements of Regulations;               Allowance for Contingent or Unforeseen Liabilities               or Obligations..............................................  39Section 13.5   Deemed Distribution and Recontribution......................  40Section 13.6   Rights of Limited Partner...................................  40Section 13.7   Notice of Dissolution.......................................  41Section 13.8   Cancellation of Certificate of Limited Partnership..........  41Section 13.9   Reasonable Time for Winding-Up..............................  41                                  ARTICLE XIV               AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS................  41Section 14.1   Amendments..................................................  41                                  ARTICLE XV                              GENERAL PROVISIONS...........................  42Section 15.1   Addresses and Notice........................................  42Section 15.2   Titles and Captions.........................................  42Section 15.3   Pronouns and Plurals........................................  42Section 15.4   Further Action..............................................  42Section 15.5   Binding Effect..............................................  43Section 15.6   Waiver of Partition.........................................  43Section 15.7   Entire Agreement............................................  43Section 15.8   Securities Law Provisions...................................  43Section 15.9   Remedies Not Exclusive......................................  43Section 15.10  Time........................................................  43Section 15.11  Creditors...................................................  43                                       vSection 15.12 Waiver............................................... 43Section 15.13 Execution Counterparts............................... 43Section 15.14 Applicable Law....................................... 43Section 15.15 Invalidity of Provisions............................. 44                                         ARTICLE XVI                       POWER OF ATTORNEY........................... 44Section 16.1  Power of Attorney.................................... 44                                       vi              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP                                       OF                             HUB CITY ALABAMA, L.P.          THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated asof March 18, 1996, of Hub City Alabama, L.P. (the "Partnership") is entered intoby and among Hub City Terminals, Inc. (the "General Partner"), a Delawarecorporation, as the General Partner and Hub City Alabama Terminals, Inc., anAlabama corporation (the "Limited Partner"), as the Limited Partner.          WHEREAS, pursuant to the Original Agreement, the Formation GeneralPartner, the Limited Partner and the Formation Limited Partner formed thePartnership;          WHEREAS, the Formation General Partner, the Limited Partner and theFormation Limited Partner desire to admit the General Partner as the generalpartner of the Partnership;          WHEREAS, the Formation General Partner desires to sell its generalpartnership interest in the Partnership to the General Partner and, uponconsummation of such sale, to withdraw as general partner of the Partnership;          WHEREAS, the Formation Limited Partner desires to withdraw as alimited partner of the Partnership; and          WHEREAS, the General Partner and the Limited Partner, being all of thePartners of the Partnership, desire to continue the Partnership as a limitedpartnership under the Act, and are entering into this Agreement to amend andrestate the Original Agreement to reflect and confirm the foregoing admissionand withdrawals, and to amend, restate and supersede in its entirety theOriginal Agreement, as hereinafter set forth;          NOW, THEREFORE, in consideration of the premises, the mutual promisesand agreements herein made, and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the General Partnerand the Limited Partner, intending to be legally bound, have agreed and dohereby agree as follows:                                   ARTICLE I                                 DEFINED TERMS          The following definitions shall be for all purposes, unless otherwiseclearly indicated to the contrary, applied to the terms used in this Agreement.          "Act" means the Delaware Revised Uniform Limited Partnership Act, asit may be amended from time to time, and any successor to such statute.                                       1           "Adjusted Capital Account" means the Capital Account maintained foreach Partner as of the end of each Partnership Year (a) increased by any amountswhich such Partner is obligated to restore pursuant to any provision of thisAgreement or is deemed to be obligated to restore pursuant to the penultimatesentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (b)decreased by the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). Theforegoing definition of Adjusted Capital Account is intended to comply with theprovisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpretedconsistently therewith.          "Adjusted Capital Account Deficit" means, with respect to any Partner,the deficit balance, if any, in such Partner's Adjusted Capital Account as ofthe end of the relevant Partnership Year.          "Adjusted Property" means any property the Carrying Value of which hasbeen adjusted pursuant to Section 4.2 hereof. Once an Adjusted Property isdeemed distributed by, and recontributed to, the Partnership for Federal incometax purposes upon a termination thereof pursuant to Section 708 of the Code,such property shall thereafter constitute a Contributed Property until theCarrying Value of such property is further adjusted pursuant to Section 4.2hereof.          "Affiliate" means, with respect to any Person, (a) any Person directlyor indirectly controlling, controlled by or under common control with suchPerson, (b) any Person owning or controlling 10 percent or more of theoutstanding voting interests of such Person, (c) any Person of which such Personowns or controls 10 percent or more of the voting interests, or (d) any officer,director, general partner or trustee of such Person or any Person referred to inclauses (a), (b) and (c) above.          "Agreed Value" means (a) in the case of any Contributed Property setforth in Exhibit B and as of the time of its contribution to the Partnership,the Agreed Value of such property as set forth in Exhibit B; (b) in the case ofany Contributed Property not set forth in Exhibit B and as of the time of itscontribution to the Partnership, the 704(c) Value of such property or otherconsideration, reduced by any liabilities either assumed by the Partnership uponsuch contribution or to which such property is subject when contributed, and (c)in the case of any property distributed to a Partner by the Partnership, thePartnership's Carrying Value of such property at the time such property isdistributed, reduced by any indebtedness either assumed by such Partner uponsuch distribution or to which such property is subject at the time ofdistribution as determined under Section 752 of the Code and the Regulationsthereunder.          "Agreement" means this Amended and Restated Agreement of LimitedPartnership, as it may be amended, supplemented or restated from time to time.          "Available Cash" means with respect to any period for which suchcalculation is being made:                                       2           (a) all cash revenues and funds received by the Partnership fromwhatever source (excluding the proceeds of any Capital Contribution to thePartnership pursuant to Section 4.1 hereof) plus the amount of any reduction(including, without limitation, a reduction resulting because the GeneralPartner determines such amounts are no longer necessary) in reserves of thePartnership, which reserves are referred to in clause (b)(iv) below;          (b) less the sum of the following (except to the extent made with theproceeds of any Capital Contribution):              (i)   all interest, principal and other debt payments made duringsuch period by the Partnership,              (ii)  all cash expenditures (including capital expenditures) madeby the Partnership,              (iii) investments in any entity (including loans made thereto) tothe extent that such investments are not otherwise described in clauses (b)(i)or (ii), and              (iv)  the amount of any increase in reserves established duringsuch period which the General Partner determines are necessary or appropriate inits sole and absolute discretion.          Notwithstanding the foregoing, Available Cash shall not include anycash received or reductions in reserves, or take into account any disbursementsmade or reserves established, after commencement of the dissolution andliquidation of the Partnership.          "Average Net After-Tax Profit" means the average annual Net After-TaxProfit of the Partnership for the most recently completed twelve fiscal quarterperiod. If the Partnership has been existence for less than twelve completefiscal quarters, Average Net After-Tax Profit shall be calculated using the netafter-tax profit of the Limited Partner (determined on a basis consistent withthat used for determining Net After-Tax Profit for the Partnership) for suchcompleted fiscal quarters, or portions thereof of the Partnership and of theLimited Partner as are necessary to include twelve completed fiscal quarters inthe foregoing calculation.          "Book-Tax Disparities" means, with respect to any item of ContributedProperty or Adjusted Property, as of the date of any determination, thedifference between the Carrying Value of such Contributed Property or AdjustedProperty and the adjusted basis thereof for Federal income tax purposes as ofsuch date. A Partner's share of the Partnership's Book-Tax Disparities in all ofits Contributed Property and Adjusted Property will be reflected by thedifference between such Partner's Capital Account balance as maintained pursuantto Section                                       3 4.2 and the hypothetical balance of such Partner's Capital Account computed asif it had been maintained strictly in accordance with Federal income taxaccounting principles.          "Business Day" means any day except a Saturday, Sunday or other day onwhich commercial banks in Chicago, Illinois are authorized or required by law toclose.          "Capital Account" means the Capital Account maintained for a Partnerpursuant to Section 4.2 hereof.          "Capital Contribution" means, with respect to any Partner, any cash,cash equivalents or the Agreed Value of Contributed Property which such Partnercontributes or is deemed to contribute to the Partnership pursuant to Section4.1 hereof.          "Carrying Value" means (a) with respect to a Contributed Property orAdjusted Property, the 704(c) Value of such property reduced (but not belowzero) by all Depreciation with respect to such Property charged to the Partners'Capital Accounts and (b) with respect to any other Partnership property, theadjusted basis of such property for Federal income tax purposes, all as of thetime of determination. The Carrying Value of any property shall be adjusted fromtime to time in accordance with Section 4.2 hereof, and to reflect changes,additions or other adjustments to the Carrying Value for dispositions andacquisitions of Partnership properties, as deemed appropriate by the GeneralPartner.          "Certificate" means the Certificate of Limited Partnership relating tothe Partnership filed in the office of the Secretary of State of the State ofDelaware, as amended from time to time in accordance with the terms hereof andthe Act.          "Code" means the Internal Revenue Code of 1986, as amended. Anyreference herein to a specific section or sections of the Code shall be deemedto include a reference to any corresponding provision of future law.          "Common Stock" means the shares of Class A Common Stock, $.01 parvalue per share, of Hub Group, Inc., a Delaware corporation and the solestockholder of the General Partner.          "Contributed Property" means each property or other asset (butexcluding cash), in such form as may be permitted by the Act contributed ordeemed contributed to the Partnership (including for this purpose any propertyor other asset deemed contributed to the Partnership on termination andreconstitution thereof pursuant to Section 708 of the Code). Once the CarryingValue of a Contributed Property is adjusted pursuant to Section 4.2 hereof, suchproperty shall no longer constitute a Contributed Property for purposes ofSection 4.2 hereof, but shall be deemed an Adjusted Property for such purposes.                                       4           "Depreciation" means for each fiscal year, an amount equal to theFederal income tax depreciation, amortization, or other cost recovery deductionallowable with respect to an asset for such year, except that if the CarryingValue of an asset differs from its adjusted basis for Federal income taxpurposes at the beginning of such year or other period, Depreciation shall be anamount which bears the same ratio to such beginning Carrying Value as theFederal income tax depreciation, amortization, or other cost recovery deductionfor such year bears to such beginning adjusted tax basis; provided, however,that if the Federal income tax depreciation, amortization, or other costrecovery deduction for such year is zero, Depreciation shall be determined withreference to such beginning Carrying Value using any reasonable method selectedby the General Partner.          "Discount Rate" shall mean, for any given Price/Earnings Multiple, theDiscount Rate set forth on Exhibit C opposite such Price/Earnings Multiple.          "Event of Dissolution" has the meaning set forth in Section 13.1.          "Formation General Partner" means Hub City Alabama Terminals, Inc. inits capacity as general partner under the Original Agreement.          "Formation Limited Partner" means David P. Yeager.          "General Partner" means Hub City Terminals, Inc., a Delawarecorporation, or its successors as a general partner of the Partnership.          "General Partnership Interest" means a Partnership Interest held by aGeneral Partner that is a general partnership interest.          "IRS" means the Internal Revenue Service, which administers theinternal revenue laws of the United States.          "Incapacity" or "Incapacitated" means, (a) as to any corporation whichis a Partner, the filing of a certificate of dissolution, or its equivalent, forthe corporation or the revocation of its charter, (b) as to any partnershipwhich is a Partner, the dissolution and commencement of winding up of thepartnership or (c) as to any Partner, the bankruptcy of such Partner. Forpurposes of this definition, bankruptcy of a Partner shall be deemed to haveoccurred when (i) the Partner commences a voluntary proceeding seekingliquidation, reorganization or other relief under any bankruptcy, insolvency orother similar law now or hereafter in effect, (ii) the Partner is adjudged asbankrupt or insolvent, or a final and nonappealable order for relief under anybankruptcy, insolvency or similar law now or hereafter in effect has beenentered against the Partner, (iii) the Partner executes and delivers a generalassignment for the benefit of the Partner's creditors, (iv) the Partner files ananswer or other pleading admitting or failing to contest the materialallegations of a petition filed against the Partner in any proceeding of thenature described in clause (ii) above, (v) the Partner seeks, consents to oracquiesces in the                                       5 appointment of a trustee, receiver or liquidator for the Partner or for all orany substantial part of the Partner's properties, (vi) any proceeding seekingliquidation, reorganization or other relief under any bankruptcy, insolvency orother similar law now or hereafter in effect has not been dismissed within 120days after the commencement thereof, (vii) the appointment without the Partner'sconsent or acquiescence of a trustee, receiver or liquidator has not beenvacated or stayed within 90 days of such appointment, or (viii) an appointmentreferred to in clause (vii) is not vacated within 90 days after the expirationof any such stay.          "Indemnitee" means (a) any Person made a party to a proceeding byreason of his status as (i) the General Partner or (ii) an officer of thePartnership or a director or officer of the General Partner, and (b) such otherPersons (including Affiliates of the General Partner or the Partnership) as theGeneral Partner may designate from time to time, in its sole and absolutediscretion.          "Limited Partner" means Hub City Alabama Terminals, Inc., an Alabamacorporation, or its successors, as a Limited Partner in the Partnership.          "Limited Partnership Interest" means a Partnership Interest of aLimited Partner in the Partnership representing a fractional part of thePartnership Interests of all Partners.          "Liquidator" has the meaning set forth in Section 13.3.          "Net After-Tax Profit" means, with respect to each fiscal quarter ofthe Partnership, Net Income, after provision for income taxes as if thePartnership were a taxable corporation under subchapter C of the Code and beforeadjustments for extraordinary items for each quarter.          "Net Income" means for any taxable period, the excess, if any, of thePartnership's items of income and gain for such taxable period over thePartnership's items of loss and deduction for such taxable period. The itemsincluded in the calculation of Net Income shall be determined in accordance withSection 4.2. Once an item of income, gain, loss or deduction that has beenincluded in the initial computation of Net Income is subjected to the specialallocation rules in Sections 6.2 and 6.3, Net Income or the resulting Net Loss,whichever the case may be, shall be recomputed without regard to such item.          "Net Loss" means for any taxable period, the excess, if any, of thePartnership's items of loss and deduction for such taxable period over thePartnership's items of income and gain for such taxable period. The itemsincluded in the calculation of Net Loss shall be determined in accordance withSection 4.2. Once an item of income, gain, loss or deduction that has beenincluded in the initial computation of Net Loss is subjected to the specialallocation rules in Sections 6.2 and 6.3, Net Loss or the resulting Net Income,whichever the case may be, shall be recomputed without regard to such item.                                       6           "Non-Competition Agreement" means that certain Non-CompetitionAgreement dated as of the date hereof between the Partnership and the Principal.          "Nonrecourse Built-in Gain" means, with respect to any ContributedProperties or Adjusted Properties that are subject to a mortgage or negativepledge securing a Nonrecourse Liability, the amount of any taxable gain thatwould be allocated to the Partners pursuant to Section 6.3(b) if such propertieswere disposed of in a taxable transaction in full satisfaction of suchliabilities and for no other consideration.          "Nonrecourse Deductions" has the meaning set forth in RegulationsSection 1.704-2(b)(1), and the amount of Nonrecourse Deductions for aPartnership Year shall be determined in accordance with the rules of RegulationsSection 1.704-2(c).          "Nonrecourse Liability" has the meaning set forth in RegulationsSection 1.752-1(a)(2).          "Original Agreement" means that certain Agreement of LimitedPartnership, dated as of February 12, 1996, between the Formation GeneralPartner, the Limited Partner and the Formation Limited Partner.          "Partner" means a General Partner or a Limited Partner, and "Partners"means the General Partner and the Limited Partner.          "Partner Minimum Gain" means an amount, with respect to each PartnerNonrecourse Debt, equal to the Partnership Minimum Gain that would result ifsuch Partner Nonrecourse Debt were treated as a Nonrecourse Liability,determined in accordance with Regulations Section 1.704-2(i)(3).          "Partner Nonrecourse Debt" has the meaning set forth in RegulationsSection 1.704-2(b)(4).          "Partner Nonrecourse Deductions" has the meaning set forth inRegulations Section 1.704-2(i)(2), and the amount of Partner NonrecourseDeductions with respect to a Partner Nonrecourse Debt for a Partnership Yearshall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).          "Partnership" means the limited partnership formed under the Act andcontinued pursuant to this Agreement, and any successor thereto.          "Partnership Interest" means an ownership interest in the Partnershiprepresenting a Capital Contribution by either Partner and includes any and allbenefits to which the holder of such a Partnership Interest may be entitled asprovided in this Agreement, together with all obligations of such Person tocomply with the terms and provisions of this Agreement.                                       7           "Partnership Minimum Gain" has the meaning set forth in RegulationsSection 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well asany net increase or decrease in Partnership Minimum Gain, for a Partnership Yearshall be determined in accordance with the rules of Regulations Section 1.704-2(d).          "Partnership Year" means the fiscal year of the Partnership, whichshall be the calendar year.          "Percentage Interest" means, as to a Partner, its interest in thePartnership as specified in Exhibit A attached hereto, as such Exhibit may beamended from time to time.          "Person" means an individual or a corporation, partnership, trust,unincorporated organization, association or other entity.          "Price/Earnings Multiple" means the average of (i) the quotientobtained by dividing (A) the Value by (B) the aggregate net income per share ofCommon Stock for the four-quarter period immediately preceding the date ofcalculation, and (ii) the aggregate projected price/earnings ratio per share ofCommon Stock as reported by First Call for the four-quarter period immediatelyfollowing the date of calculation.          "Principal" means John H. Beck, an employee of the Partnership.          "Purchase Amount" means an amount determined by multiplying (i) theproduct of (a) the Price/Earnings Multiple times (b) the Average Net After-TaxProfit by (ii) one (1) minus the Discount Rate.          "Purchase Notice" has the meaning set forth in Section 8.6(b).          "Purchase Right" has the meaning set forth in Section 8.6(a).          "Recapture Income" means any gain recognized by the Partnership(computed without regard to any adjustment required by Section 734 or Section743 of the Code) upon the disposition of any property or asset of thePartnership, which gain is characterized as ordinary income because itrepresents the recapture of deductions previously taken with respect to suchproperty or asset.          "Regulations" means the Income Tax Regulations promulgated under theCode, as such regulations may be amended from time to time (includingcorresponding provisions of succeeding regulations).          "Residual Gain" or "Residual Loss" means any item of gain or loss, asthe case may be, of the Partnership recognized for Federal income tax purposesresulting from a sale, exchange or other disposition of Contributed Property orAdjusted Property, to the extent such                                       8 item of gain or loss is not allocated pursuant to Section 6.3(b)(1)(i) or6.3(b)(2)(i) to eliminate Book-Tax Disparities.          "704(c) Value" of any Contributed Property means the value of suchproperty as set forth in Exhibit B, or if no value is set forth in Exhibit B,the fair market value of such property or other consideration at the time ofcontribution as determined by the General Partner using such reasonable methodof valuation as it may adopt; provided, however, that the 704(c) Value of anyproperty deemed contributed to the Partnership for Federal income tax purposesupon termination and reconstitution thereof pursuant to Section 708 of the Codeshall be determined in accordance with Section 4.2 hereof. Subject to Section4.2 hereof, the General Partner shall use such method as it deems reasonable andappropriate to allocate the aggregate of the 704(c) Value of ContributedProperties among each separate property on a basis proportional to its fairmarket value.          "Subsidiary" means, with respect to any Person, any corporation orother entity of which a majority of (a) the voting power of the voting equitysecurities or (b) the outstanding equity interests is owned, directly orindirectly, by such Person.          "Substituted Limited Partner" means a Person who is admitted as aLimited Partner to the Partnership pursuant to Section 11.3.          "Unrealized Gain" attributable to any item of Partnership propertymeans, as of any date of determination, the excess, if any, of (a) the fairmarket value of such property (as determined under Section 4.2 hereof) as ofsuch date, over (b) the Carrying Value of such property (prior to any adjustmentto be made pursuant to Section 4.2 hereof) as of such date.          "Unrealized Loss" attributable to any item of Partnership propertymeans, as of any date of determination, the excess, if any, of (a) the CarryingValue of such property (prior to any adjustment to be made pursuant to Section4.2 hereof) as of such date, over (b) the fair market value of such property (asdetermined under Section 4.2 hereof) as of such date.          "Value" means, with respect to a share of Common Stock, the average ofthe daily market price for the thirty (30) consecutive trading days immediatelypreceding the date of determination. The market price for each such trading dayshall be: (a) if the shares of Common Stock are listed or admitted to trading onany securities exchange or the NASDAQ-National Market System, the closing price,regular way, on such day, or if no such sale takes place on such day, theaverage of the closing bid and asked prices on such day, (b) if the shares ofCommon Stock are not listed or admitted to trading on any securities exchange orthe NASDAQ-National Market System, the last reported sale price on such day or,if no sale takes place on such day, the average of the closing bid and askedprices on such day, as reported by a reliable quotation source designated by theGeneral Partner, or (c) if the shares of Common Stock are not listed or admittedto trading on any securities exchange or the NASDAQ-National Market System andno such last reported sale price or closing bid and asked prices                                       9 are available, the average of the reported high bid and low asked prices on suchday, as reported by a reliable quotation source designated by the GeneralPartner, or if there shall be no bid and asked prices on such day, the averageof the high bid and low asked prices, as so reported, on the most recent day(not more than 30 days prior to the date in question) for which prices have beenso reported; provided, that if there are no bid and asked prices reported duringthe 30 days prior to the date in question, the Value of the shares of CommonStock shall be determined by the board of directors of the sole stockholder ofthe General Partner acting in good faith on the basis of such quotations andother information as it considers, in its reasonable judgment, appropriate.                                   ARTICLE II                            ORGANIZATIONAL MATTERSSection 2.1 Continuation; Application of Act.            ---------------------------------          (a) Continuation of Partnership. The General Partner and the LimitedPartner do hereby continue the Partnership as a limited partnership according toall of the terms and provisions of this Agreement and otherwise in accordancewith the Act. The General Partner is the sole general partner and the LimitedPartner is the sole limited partner of the Partnership. All Partnership profits,losses and distributive shares of tax items accruing prior to the effectivenessof this Agreement shall be allocated in accordance with, and the respectiverights and obligations of partners with respect to the period prior to theeffectiveness of this Agreement shall be governed by, the Original Agreement.The Formation General Partner hereby withdraws from the Partnership. TheFormation Limited Partner hereby withdraws from the Partnership in exchange fora return of his original capital contribution.          (b) Application of Act. The Partnership is a limited partnershipsubject to the provisions of the Act and the terms and conditions set forth inthis Agreement. Except as expressly provided herein to the contrary, the rightsand obligations of the Partners and the administration and termination of thePartnership shall be governed by the Act. No Partner has any interest in anyPartnership property, and the Partnership Interest of each Partner shall bepersonal property for all purposes.          Section 2.2 Name. The name of the Partnership is Hub City Alabama,L.P. The Partnership's business may be conducted under any other name or namesdeemed advisable by the General Partner, including the name of the GeneralPartner or any Affiliate thereof. The words "Limited Partnership," "L.P.,""Ltd." or similar words or letters shall be included in the Partnership's namewhere necessary for the purposes of complying with the laws of any jurisdictionthat so requires. The General Partner in its sole and absolute discretion maychange the name of the Partnership at any time and from time to time and shallnotify the Limited Partner of such change in the next regular communication tothe Limited Partner.                                      10           Section 2.3 Registered Office and Agent; Principal Office. The addressof the registered office of the Partnership in the State of Delaware is locatedat 1209 Orange Street, Wilmington, County of New Castle, and the registeredagent for service of process on the Partnership in the State of Delaware at suchregistered office is The Corporation Trust Company. The principal office of thePartnership is located at Hub Group, Inc., 377 East Butterfield Road, Suite 700,Lombard, Illinois 60148, or such other place as the General Partner may fromtime to time designate by notice to the Limited Partner. The Partnership maymaintain offices at such other place or places within or outside the State ofIllinois as the General Partner deems advisable.          Section 2.4 Term. The term of the Partnership shall commence on thedate hereof, and shall continue until December 31, 2096, unless it is dissolvedsooner pursuant to the provisions of Article XIII or as otherwise provided bylaw.                                  ARTICLE III                                    PURPOSE          Section 3.1 Purpose and Business. The purpose and nature of thebusiness to be conducted by the Partnership is (a) to conduct any business thatmay be lawfully conducted by a limited partnership organized pursuant to theAct, (b) to enter into any partnership, joint venture or other similararrangement to engage in any of the foregoing or the ownership of interests inany entity engaged in any of the foregoing and (c) to do anything necessary orincidental to the foregoing.          Section 3.2 Powers. The Partnership is empowered to do any and allacts and things necessary, appropriate, proper, advisable, incidental to orconvenient for the furtherance and accomplishment of the purposes and businessdescribed herein and for the protection and benefit of the Partnership; providedthat the Partnership shall not take, or refrain from taking, any action which,in the judgment of the General Partner, in its sole and absolute discretion,could violate any law or regulation of any governmental body or agency havingjurisdiction over the General Partner or its securities, unless such action (orinaction) shall have been specifically consented to by the General Partner inwriting.                                  ARTICLE IV                 CAPITAL CONTRIBUTIONS; ISSUANCE OF INTERESTS;                               CAPITAL ACCOUNTS          Section 4.1  Capital Contributions of the Partners.                       -------------------------------------                  (a) Initial Capital Contributions. The General Partner shallsucceed to the capital contribution of the Formation General Partner. At thetime of the execution of this Agreement, the Partners shall make, shall havemade or shall be deemed to have                                       11 made the Capital Contributions set forth in Exhibit A to this Agreement. ThePartners shall have a Percentage Interest in the Partnership as set forth inExhibit A.          (b) Additional Capital Contributions. No Partner shall be assessed or,except as provided for in Section 13.4(b) below, and except for any such amountswhich a Limited Partner may be obligated to repay under Section 10.5, berequired to contribute additional funds or other property to the Partnership.Any additional funds or other property required by the Partnership, asdetermined by the General Partner in its sole discretion, may, at the option ofthe General Partner and without an obligation to do so (except as provided forin Section 13.4(b) below), be loaned by the General Partner to the Partnershipon such terms as the General Partner deems appropriate.          (c) Return of Capital Contributions. Except as otherwise expresslyprovided herein, the Capital Contribution of the Limited Partner will bereturned to that Partner only in the manner and to the extent provided inArticle V and Article XIII hereof, and no Partner may withdraw from thePartnership or otherwise have any right to demand or receive the return of itsCapital Contribution to the Partnership (as such), except as specificallyprovided herein. Under circumstances requiring a return of any CapitalContribution, no Partner shall have the right to receive property other thancash, except as specifically provided herein. No Partner shall be entitled tointerest on any Capital Contribution or Capital Account notwithstanding anydisproportion therein as between the Partners. Except as specifically providedherein, the General Partner shall not be liable for the return of any portion ofthe Capital Contribution of the Limited Partner, and the return of such CapitalContributions shall be made solely from Partnership assets.           (d) Liability of Limited Partner. The Limited Partner shall have nofurther personal liability to contribute money to, or in respect of, theliabilities or the obligations of the Partnership, nor shall the Limited Partnerbe personally liable for any obligations of the Partnership, except as otherwiseprovided in this Article IV or in the Act. The Limited Partner shall not berequired to make any contributions to the capital of the Partnership other thanits initial Capital Contribution.Section 4.2  Capital Accounts of the Partners.             --------------------------------        (a) General. The Partnership shall maintain for each Partner a separateCapital Account in accordance with the rules of Regulations Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (a) the amount of allCapital Contributions made by such Partner to the Partnership pursuant to thisAgreement and (b) all items of Partnership income and gain (including income andgain exempt from tax) computed in accordance with Section 4.2(b) hereof andallocated to such Partner pursuant to Sections 6.1 and 6.2 of this Agreement,and decreased by (i) the amount of cash or Agreed Value of all actual and deemeddistributions of cash or property made to such                                      12      Partner pursuant to this Agreement and (ii) all items of Partnership     deduction and loss computed in accordance with Section 4.2(b) hereof and     allocated to such Partner pursuant to Sections 6.1 and 6.2 of this     Agreement.          (b) Income, Gains, Deductions and Losses. For purposes of computing     the amount of any item of income, gain, loss or deduction to be reflected     in the Partners' Capital Accounts, unless otherwise specified in this     Agreement, the determination, recognition and classification of any such     item shall be the same as its determination, recognition and classification     for Federal income tax purposes determined in accordance with Section     703(a) of the Code (for this purpose all items of income, gain, loss or     deduction required to be stated separately pursuant to Section 703(a)(1) of     the Code shall be included in taxable income or loss), with the following     adjustments:               (1) Except as otherwise provided in Regulations Section 1.704-          1(b)(2)(iv)(m), the computation of all items of income, gain, loss and          deduction shall be made without regard to any election under Section          754 of the Code which may be made by the Partnership; provided that          the amounts of any adjustments to the adjusted bases of the assets of          the Partnership made pursuant to Section 734 of the Code as a result          of the distribution of property by the Partnership to a Partner (to          the extent that such adjustments have not previously been reflected in          the Partners' Capital Accounts) shall be reflected in the Capital          Accounts of the Partners in the manner and subject to the limitations          prescribed in Regulations Section 1.704-1(b)(2)(iv)(m).               (2) The computation of all items of income, gain, loss and          deduction shall be made without regard to the fact that items          described in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not          includable in gross income or are neither currently deductible nor          capitalized for Federal income tax purposes.               (3) Any income, gain or loss attributable to the taxable          disposition of any Partnership property shall be determined as if the          adjusted basis of such property as of such date of disposition were          equal in amount to the Partnership's Carrying Value with respect to          such property as of such date.               (4) In lieu of the depreciation, amortization, and other cash          recovery deductions taken into account in computing such taxable          income or loss, there shall be taken into account Depreciation for          such fiscal year.               (5) In the event the Carrying Value of any Partnership Asset is          adjusted pursuant to Section 4.2(d) hereof, the amount of any such          adjustment shall be taken into account as gain or loss from the          disposition of such asset.                                      13                (6) Any items specially allocated under Section 6.3 hereof shall          not be taken into account.          (c) Transfers of Partnership Interests. A transferee of Partnership     Interests shall succeed to a pro rata portion of the Capital Account of the     transferor; provided, however, that, if the transfer causes a termination     of the Partnership under Section 708(b)(1)(B) of the Code, the     Partnership's properties shall be deemed to have been distributed in     liquidation of the Partnership to the Partners (including the transferee of     Partnership Interests) and recontributed by such Partners in reconstitution     of the Partnership. In such event, the Carrying Values of the Partnership     properties shall be adjusted immediately prior to such deemed distribution     pursuant to Section 4.2(d)(2) hereof. The Capital Accounts of such     reconstituted Partnership shall be maintained in accordance with the     principles of this Section 4.2.          (d)  Unrealized Gains and Losses.               ---------------------------                (1) Consistent with the provisions of Regulations Section 1.704-          1(b)(2)(iv)(f), and as provided in Section 4.2(d)(2), the Carrying          Values of all Partnership assets shall be adjusted upward or downward          to reflect any Unrealized Gain or Unrealized Loss attributable to such          Partnership property, as of the times of the adjustments provided in          Section 4.2(d)(2) hereof, as if such Unrealized Gain or Unrealized          Loss had been recognized on an actual sale of each such property and          allocated pursuant to Section 6.1 of the Agreement.               (2) Such adjustments shall be made as of the following times: (i)          immediately prior to the acquisition of an additional interest in the          Partnership by any new or existing Partner in exchange for more than a          de minimis Capital Contribution; (ii) immediately prior to the          distribution by the Partnership to a Partner of more than a de minimis          amount of Property as consideration for an interest in the          Partnership; and (iii) immediately prior to the liquidation of the          Partnership or the General Partner's interest in the Partnership          within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g);          provided, however, that adjustments pursuant to clauses (a) and (b)          above shall be made only if the General Partner reasonably determines          that such adjustments are necessary or appropriate to reflect the          relative economic interests of the Partners in the Partnership.               (3) In accordance with Regulations Section 1.704-1(b)(2)(iv)(e)          the Carrying Values of Partnership assets distributed in kind shall be          adjusted upward or downward to reflect any Unrealized Gain or          Unrealized Loss attributable to such Partnership property, as of the          time any such asset is distributed.                                      14                (4) In determining such Unrealized Gain or Unrealized Loss the          aggregate cash amount and fair market value of all Partnership assets          (including cash or cash equivalents) shall be determined by the          General Partner using such reasonable method of valuation as it may          adopt, or in the case of a liquidating distribution pursuant to          Article XIII of this Agreement, be determined and allocated by the          Liquidator using such reasonable methods of valuation as it may adopt.          The General Partner, or the Liquidator, as the case may be, shall          allocate such aggregate value among the assets of the Partnership (in          such manner as it determines in its sole and absolute discretion to          arrive at a fair market value for individual properties).          (e) Modification by General Partner. The provisions of this Agreement     relating to the maintenance of Capital Accounts are intended to comply with     Regulations Section 1.704-1(b), and shall be interpreted and applied in a     manner consistent with such Regulations. In the event the General Partner     shall determine that it is prudent to modify the manner in which the     Capital Accounts, or any debits or credits thereto (including, without     limitation, debits or credits relating to liabilities which are secured by     contributed or distributed property or which are assumed by the     Partnership, the General Partner or the Limited Partner) are computed in     order to comply with such Regulations, the General Partner may make such     modification; provided that it will not have a material effect on the     amounts distributable to any Person pursuant to Article XIII of this     Agreement upon the liquidation of the Partnership. The General Partner also     shall (a) make any adjustments that are necessary or appropriate to     maintain equality between the Capital Accounts of the Partners and the     amount of Partnership capital reflected on the Partnership's balance sheet,     as computed for book purposes, in accordance with Regulations Section      1.704-1(b)(2)(iv)(q), and (b) make any appropriate modifications in the     event unanticipated events might otherwise cause this Agreement not to     comply with Regulations Section 1.704-1(b).                                   ARTICLE V                                 DISTRIBUTIONS     Section 5.1 Requirement and Characterization of Distributions. The GeneralPartner shall distribute within 90 days after the end of each calendar quarteran amount equal to 100% of Available Cash during such quarter to the Partners inproportion to their respective Percentage Interests.     Section 5.2 Amounts Withheld. All amounts withheld pursuant to the Code orany provisions of any state or local tax law and Section 10.5 hereof withrespect to any allocation, payment or distribution to any Partners shall betreated as amounts distributed to such Partners pursuant to Section 5.1 for allpurposes under this Agreement.                                      15      Section 5.3 Distributions Upon Liquidation. Proceeds from any sale or otherdisposition of all or substantially all of the assets of the Partnership or arelated series of transactions that, taken together, results in the sale orother disposition of all or substantially all of the assets of the Partnershipshall be distributed to the Partners in accordance with Section 13.3.                                   ARTICLE VI                                  ALLOCATIONS     Section 6.1 Allocations For Capital Account Purposes. For purposes ofmaintaining the Capital Accounts and in determining the rights of the Partnersamong themselves, the Partnership's items of income, gain, loss and deduction(computed in accordance with Section 4.2 hereof) shall be allocated among thePartners for each taxable year (or portion thereof) as provided herein below.          (a) Net Income. After giving effect to the special allocations set     forth in Section 6.2 below, Net Income shall be allocated (i) first, to the     General Partner to the extent that, on a cumulative basis, Net Losses     previously allocated to the General Partner pursuant to the last sentence     of Section 6.1(b) exceed Net Income previously allocated to the General     Partner pursuant to this clause (a) of Section 6.1(a), and (ii) thereafter,     Net Income shall be allocated in proportion to the respective Percentage     Interests of the Partners.          (b) Net Losses. After giving effect to the special allocations set     forth in Section 6.2 below, Net Losses shall be allocated in proportion to     the respective Percentage Interests of the Partners; provided that Net     Losses shall not be allocated to the Limited Partner pursuant to this     Section 6.1(b) to the extent that such allocation would cause the Limited     Partner to have an Adjusted Capital Account Deficit at the end of such     taxable year (or increase any existing Adjusted Capital Account Deficit).     All Net Losses in excess of the limitations set forth in the preceding     sentence of this Section 6.1(b) shall be allocated to the General Partner.          (c) Nonrecourse Liabilities. For purposes of Regulations Section      1.752-3(a), the Partners agree that Nonrecourse Liabilities of the     Partnership in excess of the sum of (i) the amount of Partnership Minimum     Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be     allocated among the Partners in proportion to their respective Percentage     Interests.          (d) Gains. Any gain allocated to the Partners upon the sale or other     taxable disposition of any Partnership asset shall to the extent possible,     after taking into account other required allocations of gain pursuant to     Section 6.2 below, be characterized as Recapture Income in the same     proportions and to the same extent as                                      16      such Partners have been allocated any deductions directly or indirectly     giving rise to the treatment of such gains as Recapture Income.     Section 6.2 Special Allocation Rules. Notwithstanding any other provisionof this Agreement, the following special allocations shall be made in thefollowing order:          (a) Minimum Gain Chargeback. Notwithstanding any other provisions of     Article VI, if there is a net decrease in Partnership Minimum Gain during     any Partnership Year, each Partner shall be specially allocated items of     Partnership income and gain for such year (and, if necessary, subsequent     years) in an amount equal to such Partner's share of the net decrease in     Partnership Minimum Gain, as determined under Regulations Section 1.704-     2(g). Allocations pursuant to the previous sentence shall be made in     proportion to the respective amounts required to be allocated to each     Partner pursuant thereto. The items to be so allocated shall be determined     in accordance with Regulations Section 1.704-2(f)(6). This Section 6.2(a)     is intended to comply with the minimum gain chargeback requirements in     Regulations Section 1.704-2(f) and for purposes of this Section 6.2(a)     only, each Partner's Adjusted Capital Account Deficit shall be determined     prior to any other allocations pursuant to Section 6.1 of this Agreement     with respect to such fiscal year and without regard to any decrease in     Partner Minimum Gain during such fiscal year.          (b) Partner Minimum Gain Chargeback. Notwithstanding any other     provision of Article VI (except Section 6.2(a) hereof), if there is a net     decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt     during any Partnership fiscal year, each Partner who has a share of the     Partner Minimum Gain attributable to such Partner Nonrecourse Debt,     determined in accordance with Regulations Section 1.704-2(i)(5), shall be     specially allocated items of Partnership income and gain for such year     (and, if necessary, subsequent years) in an amount equal to such Partner's     share of the net decrease in Partner Minimum Gain attributable to such     Partner Nonrecourse Debt, determined in accordance with Regulations Section     1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made     in proportion to the respective amounts required to be allocated to each     Partner pursuant thereto. The items to be so allocated shall be determined     in accordance with Regulations Section 1.704-2(i)(4). This Section 6.2(b)     is intended to comply with the minimum gain chargeback requirement in such     Section of the Regulations and shall be interpreted consistently therewith.     Solely for purposes of this Section 6.2(b), each Partner's Adjusted Capital     Account Deficit shall be determined prior to any other allocations pursuant     to Article VI of this Agreement with respect to such fiscal year, other     than allocations pursuant to Section 6.2(a) hereof.          (c) Qualified Income Offset. In the event any Partner unexpectedly     receives any adjustments, allocations or distributions described in     Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or     1.704-1(b)(2)(ii)(d)(6), and after giving                                      17      effect to the allocations required under Sections 6.2(a) and 6.2(b) hereof,     such Partner has an Adjusted Capital Account Deficit, items of Partnership     income and gain shall be specially allocated to such Partner in an amount     and manner sufficient to eliminate, to the extent required by the     Regulations, its Adjusted Capital Account Deficit created by such     adjustments, allocations or distributions as quickly as possible.          (d) Nonrecourse Deductions. Nonrecourse Deductions for any taxable     period shall be allocated in proportion to the respective Percentage     Interests of the Partners. If the General Partner determines in its good     faith discretion that the Partnership's Nonrecourse Deductions must be     allocated in a different ratio to satisfy the safe harbor requirements of     the Regulations promulgated under Section 704(b) of the Code, the General     Partner is authorized, upon notice to the Limited Partner, to revise the     prescribed ratio to the numerically closest ratio which does satisfy such     requirements.          (e) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions     for any fiscal year shall be specially allocated to the Partner who bears     the economic risk of loss with respect to the Partner Nonrecourse Debt to     which such Partner Nonrecourse Deductions are attributable in accordance     with Regulations Section 1.704-2(i)(2).          (f) Code Section 754 Adjustments. To the extent an adjustment to the     adjusted tax basis of any Partnership asset pursuant to Section 734(b) or     743(b) of the Code is required, pursuant to Regulations Section 1.704-     1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,     the amount of such adjustment to the Capital Accounts shall be treated as     an item of gain (if the adjustment increases the basis of the asset) or     loss (if the adjustment decreases such basis), and such item of gain or     loss shall be specially allocated to the Partners in a manner consistent     with the manner in which their Capital Accounts are required to be adjusted     pursuant to such Section of the Regulations.     Section 6.3 Allocations for Tax Purposes.                 ----------------------------           (a) General. Except as otherwise provided in this Section 6.3, for     Federal income tax purposes, each item of income, gain, loss and deduction     shall be allocated among the Partners in the same manner as its correlative     item of "book" income, gain, loss or deduction is allocated pursuant to     Sections 6.1 and 6.2 of this Agreement.          (b) To Eliminate Book-Tax Disparities. In an attempt to eliminate      Book-Tax Disparities attributable to a Contributed Property or Adjusted     Property, items of income, gain, loss, and deduction shall be allocated for     Federal income tax purposes among the Partners as follows:                                      18                (1) (i) In the case of a Contributed Property, such items          attributable thereto shall be allocated among the Partners consistent          with the principles of Section 704(c) of the Code that takes into          account the variation between the 704(c) Value of such property and          its adjusted basis at the time of contribution, and (ii) any item of          Residual Gain or Residual Loss attributable to a Contributed Property          shall be allocated among the Partners in the same manner as its          correlative item of "book" gain or loss is allocated pursuant to          Sections 6.1 and 6.2 of this Agreement.               (2) (i) In the case of an Adjusted Property, such items shall (A)          first, be allocated among the Partners in a manner consistent with the          principles of Section 704(c) of the Code to take into account the          Unrealized Gain or Unrealized Loss attributable to such property and          the allocations thereof pursuant to Section 4.2 and (B) second, in the          event such property was originally a Contributed Property, be          allocated among the Partners in a manner consistent with Section          6.3(b)(1)(i), and (ii) any item of Residual Gain or Residual Loss          attributable to an Adjusted Property shall be allocated among the          Partners in the same manner as its correlative item of "book" gain or          loss is allocated pursuant to Sections 6.1 and 6.2 of this Agreement.               (3) All other items of income, gain, loss and deduction shall be          allocated among the Partners in the same manner as their correlative          item of "book" gain or loss is allocated pursuant to Sections 6.1 and          6.2 of this Agreement.          (c) Power of General Partner to Elect Method. To the extent Treasury     Regulations promulgated pursuant to Section 704(c) of the Code permit a     partnership to utilize alternative methods to eliminate the disparities     between the agreed value of property and its adjusted basis, the General     Partner shall have the authority to elect the method to be used by the     Partnership and such election shall be binding on all Partners.                                  ARTICLE VII                     MANAGEMENT AND OPERATIONS OF BUSINESS     Section 7.1  Management.                  ----------           (a) Powers of General Partner. Except as otherwise expressly provided     in this Agreement, all management powers over the business and affairs of     the Partnership are exclusively vested in the General Partner, and the     Limited Partner shall have no right to participate in or exercise control     or management power over the business and affairs of the Partnership.     Notwithstanding anything to the contrary in this Agreement, the General     Partner may not be removed by the Limited Partner with or without cause. In     addition to the powers now or hereafter granted a general partner of a     limited                                      19      partnership under applicable law or which are granted to the General     Partner under any other provision of this Agreement, the General Partner,     subject to Section 7.3 hereof, shall have full power and authority to do     all things deemed necessary or desirable by it to conduct the business of     the Partnership, to exercise all powers set forth in Section 3.2 hereof and     to effectuate the purposes set forth in Section 3.1 hereof, including,     without limitation:               (1) the making of any expenditures, the lending or borrowing of          money, the assumption or guarantee of, or other contracting for,          indebtedness and other liabilities, the issuance of evidences of          indebtedness (including the securing of same by mortgage, deed of          trust or other lien or encumbrance on the Partnership's assets) and          the incurring of any obligations it deems necessary for the conduct of          the activities of the Partnership;               (2) the making of tax, regulatory and other filings, or rendering          of periodic or other reports to governmental or other agencies having          jurisdiction over the business or assets of the Partnership;               (3) the acquisition, disposition, sale, conveyance, mortgage,          pledge, encumbrance, hypothecation, contribution or exchange of any          assets of the Partnership or the merger or other combination of the          Partnership with or into another entity on such terms as the General          Partner deems proper;               (4) the use of the assets of the Partnership (including, without          limitation, cash on hand) for any purpose consistent with the terms of          this Agreement and on any terms it sees fit, including, without          limitation, the financing of the conduct of the operations of the          General Partner, the Partnership or any of the Partnership's          Subsidiaries, the lending of funds to other Persons (including the          Partnership's Subsidiaries) and the repayment of obligations of the          Partnership and its Subsidiaries and any other Person in which it has          an equity investment and the making of capital contributions to its          Subsidiaries, the holding of any real, personal and mixed property of          the Partnership in the name of the Partnership or in the name of a          nominee or trustee (subject to Section 7.10), the creation, by grant          or otherwise, of easements or servitudes, and the performance of any          and all acts necessary or appropriate to the operation of the          Partnership assets including, but not limited to, applications for          rezoning, objections to rezoning, constructing, altering, improving,          repairing, renovating, rehabilitating, razing, demolishing or          condemning any improvements or property of the Partnership;               (5) the negotiation, execution, and performance of any contracts,          conveyances or other instruments (including with Affiliates of the          Partnership to the extent provided in Section 7.6) that the General          Partner considers useful or                                      20           necessary to the conduct of the Partnership's operations or the          implementation of the General Partner's powers under this Agreement;               (6) the opening and closing of bank accounts, the investment of          Partnership funds in securities, certificates of deposit and other          instruments, and the distribution of Partnership cash or other          Partnership assets in accordance with this Agreement;               (7) the selection and dismissal of employees of the Partnership          or the General Partner (including, without limitation, employees          having titles such as "president," "vice president," "secretary" and          "treasurer"), and the engagement and dismissal of agents, outside          attorneys, accountants, engineers, appraisers, consultants,          contractors and other professionals on behalf of the General Partner          or the Partnership and the determination of their compensation and          other terms of employment or hiring;               (8) the maintenance of such insurance for the benefit of the          Partnership and the Partners as it deems necessary or appropriate;               (9) the formation of, or acquisition of an interest in, and the          contribution of property to, any further limited or general          partnerships, joint ventures or other relationships that it deems          desirable (including, without limitation, the acquisition of interests          in, and the contribution of property to, its Subsidiaries and any          other Person in which it has an equity investment from time to time);               (10) the control of any matters affecting the rights and          obligations of the Partnership, including the conduct of litigation          and the incurring of legal expense and the settlement of claims and          litigation, and the indemnification of any Person against liabilities          and contingencies to the extent permitted by law;               (11) the undertaking of any action in connection with the          Partnership's direct or indirect investment in its Subsidiaries or any          other Person (including, without limitation, the contribution or loan          of funds by the Partnership to such Persons);               (12) the determination of the fair market value of any          Partnership property distributed in kind using such reasonable method          of valuation as it may adopt; and               (13) the execution, acknowledgement and delivery of any and all          documents and instruments to effectuate any or all of the foregoing.                                      21           (b) No Approval Required for Above Powers. The Limited Partner agrees      that the General Partner is authorized to execute, deliver and perform the      above-mentioned agreements and transactions on behalf of the Partnership      without any further act, approval or vote of the Partners, notwithstanding      any other provision of this Agreement, the Act or any applicable law, rule      or regulation. The execution, delivery or performance by the General      Partner or the Partnership of any agreement authorized or permitted under      this Agreement shall not constitute a breach by the General Partner of any      duty that the General Partner may owe the Partnership or the Limited      Partner or any other Persons under this Agreement or of any duty stated or      implied by law or equity.          (c) Insurance. At all times from and after the date hereof, the     General Partner may cause the Partnership to obtain and maintain casualty,     liability and other insurance on the properties of the Partnership and     liability insurance for the Indemnitees hereunder.          (d) Working Capital Reserves. At all times from and after the date     hereof, the General Partner may cause the Partnership to establish and     maintain working capital reserves for the Partnership in such amounts as     the General Partner, in its sole and absolute discretion, deems appropriate     and reasonable from time to time.          (e) No Obligation to Consider Tax Consequences to Limited Partner. In     exercising its authority under this Agreement, the General Partner may, but     shall be under no obligation to, take into account the tax consequences to     any Partner of any action taken by it. The General Partner and the     Partnership shall not have liability to the Limited Partner under any     circumstances as a result of an income tax liability incurred by the     Limited Partner as a result of an action (or inaction) by the General     Partner pursuant to its authority under this Agreement.     Section 7.2 Certificate of Limited Partnership. To the extent that suchaction is determined by the General Partner to be reasonable and necessary orappropriate, the General Partner shall file amendments to and restatements ofthe Certificate and do all the things to maintain the Partnership as a limitedpartnership (or a partnership in which the limited partners have limitedliability) under the laws of the State of Delaware and each other jurisdictionin which the Partnership may elect to do business or own property. Subject tothe terms of Section 8.5(a)(4) hereof, the General Partner shall not berequired, before or after filing, to deliver or mail a copy of the Certificate,as it may be amended or restated from time to time, to the Limited Partner. TheGeneral Partner shall use all reasonable efforts to cause to be filed such othercertificates or documents as may be reasonable and necessary or appropriate forthe formation, continuation, qualification and operation of a limitedpartnership (or a partnership in which the Limited Partner have limitedliability) in the State of Delaware and any other jurisdiction in which thePartnership may elect to do business or own property.                                      22      Section 7.3 Restrictions on General Partner's Authority. The GeneralPartner may not, without the written consent of the Limited Partner, take anyaction in contravention of this Agreement, including, without limitation:          (a) take any action that would make it impossible to carry on the     ordinary business of the Partnership, except as otherwise provided in this     Agreement;          (b) possess Partnership property, or assign any rights in specific     Partnership property, for other than a Partnership purpose except as     otherwise provided in this Agreement;          (c) admit a Person as a Partner, except as otherwise provided in this     Agreement; or          (d) perform any act that would subject the Limited Partner to     liability as a general partner in any jurisdiction or any other liability     except as provided herein or under the Act.     Section 7.4 Responsibility for Expenses.                 ---------------------------           (a) No Compensation. Except as provided in this Section 7.4 and     elsewhere in this Agreement (including the provisions of Articles V and VI     regarding distributions, payments and allocations to which it may be     entitled), the General Partner shall not be compensated for its services as     general partner of the Partnership.          (b) Responsibility for Ownership and Operation Expenses. The     Partnership shall be responsible for and shall pay all expenses relating to     the Partnership's ownership of its assets, and the operation of, or for the     benefit of, the Partnership, and the General Partner shall be reimbursed on     a monthly basis, or such other basis as the General Partner may determine     in its sole and absolute discretion, for all expenses it incurs relating to     the Partnership's ownership of its assets and the operation of, or for the     benefit of, the Partnership; provided that the amount of any such     reimbursement shall be reduced by any interest earned by the General     Partner with respect to bank accounts or other instruments held by it as     permitted in Section 7.5(a). Such reimbursements shall be in addition to     any reimbursement to the General Partner as a result of indemnification     pursuant to Section 7.7 hereof.     Section  7.5  Outside Activities of the General Partner.                   -----------------------------------------           (a) The General Partner shall not be required to act hereunder as its     sole and exclusive business activity, and the General Partner may have     other business interests and engage in other activities in addition to     those relating to the Partnership, including businesses and activities     which are or may be competitive with the Partnership.                                      23      Neither the Partnership nor the Limited Partner shall have any right by     virtue of this Agreement or the partnership relationship created hereby in     or to any such other ventures or activities or to the income or proceeds     derived therefrom, and the pursuit of such ventures, even if competitive     with the business of the Partnership, shall not be deemed wrongful or     improper. The General Partner and any of its Affiliates, shall not be     obligated to present any particular investment or business opportunity to     the Partnership even if such opportunity is of a character which, if     presented to the Partnership, could be taken by the Partnership, and the     General Partner and each of its Affiliates shall have the right to take for     his or its own account or for any other Person, or to recommend to others,     any such particular investment or business opportunity.          (b) The General Partner may, on behalf of the Partnership, employ or     otherwise acquire services or financing from any Partner or any entity in     which any Partner has an interest (fiduciary or otherwise) and pay from the     Partnership assets reasonable compensation therefor or interest thereon and     may acquire from or sell to any Partner or any entity in which any Partner     has an interest (fiduciary or otherwise) real or personal property or     interests therein and may acquire or sell real or personal property or     interests therein in connection with the acquisition or sale of which any     Partner or any entity in which any Partner has an interest (fiduciary or     otherwise) earns a commission or fee.          (c) The General Partner may commingle Partnership funds with funds of     its own or those of any other entity (either by joint venture or otherwise)     for Partnership purposes; provided that in connection with such funds the     General Partner shall keep adequate records to reflect the Partnership's     proportional interest therein.     Section 7.6  Contracts with Affiliates.                   -------------------------           (a) Loans. The Partnership may lend or contribute to its Subsidiaries     or other Persons in which it has an equity investment, and such Persons may     borrow funds from the Partnership, on terms and conditions established in     the sole and absolute discretion of the General Partner. The foregoing     authority shall not create any right or benefit in favor of any Subsidiary     or any other Person.          (b) Transfers of Assets. Except as provided in Section 7.5, the     Partnership may transfer assets to joint ventures, other partnerships,     corporations or other business entities in which it is or thereby becomes a     participant upon such terms and subject to such conditions consistent with     this Agreement and applicable law.          (c) Contracts With General Partner. Except as expressly permitted by     this Agreement, neither the General Partner nor any of its Affiliates shall     sell, transfer or convey any property to, or purchase any property from,     the Partnership, directly or indirectly, except pursuant to transactions     that are on terms that are fair and reasonable                                      24      and no less favorable to the Partnership than would be obtained from an     unaffiliated third party in connection therewith.          (d) Employee Benefit Plans. The General Partner, in its sole and     absolute discretion and without the approval of the Limited Partner, may     propose and adopt on behalf of the Partnership employee benefit plans     funded by the Partnership for the benefit of employees of the General     Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate     of any of them in respect of services performed, directly or indirectly,     for the benefit of the Partnership, the General Partner, or any of the     Partnership's Subsidiaries.     Section 7.7  Indemnification.                  ---------------           (a) General. The Partnership shall indemnify an Indemnitee from and     against any and all losses, claims, damages, liabilities, joint or several,     expenses (including legal fees and expenses), judgments, fines,     settlements, and other amounts arising from any and all claims, demands,     actions, suits or proceedings, civil, criminal, administrative or     investigative, that relate to the operations of the Partnership as set     forth in this Agreement in which any Indemnitee may be involved, or is     threatened to be involved, as a party or otherwise, unless it is     established that: (i) the act or omission of the Indemnitee was material to     the matter giving rise to the proceeding and either was committed in bad     faith or was the result of active and deliberate dishonesty; (ii) the     Indemnitee actually received an improper personal benefit in money,     property or services; or (iii) in the case of any criminal proceeding, the     Indemnitee had reasonable cause to believe that the act or omission was     unlawful. The termination of any proceeding by judgment, order or     settlement does not create a presumption that the Indemnitee did not meet     the requisite standard of conduct set forth in this Section 7.7(a). The     termination of any proceeding by conviction or upon a plea of nolo     contendere or its equivalent, or an entry of an order of probation prior to     judgment, creates a rebuttable presumption that the Indemnitee acted in a     manner contrary to that specified in this Section 7.7(a). Any     indemnification pursuant to this Section 7.7 shall be made only out of the     assets of the Partnership.          (b) In Advance of Final Disposition. Reasonable expenses incurred by     an Indemnitee who is a party to a proceeding may be paid or reimbursed by     the Partnership in advance of the final disposition of the proceeding upon     receipt by the Partnership of (a) a written affirmation by the Indemnitee     of the Indemnitee's good faith belief that the standard of conduct     necessary for indemnification by the Partnership as authorized in this     Section 7.7 has been met, and (b) a written undertaking by or on behalf of     the Indemnitee to repay the amount if it shall ultimately be determined     that the standard of conduct has not been met.                                      25           (c) Other Than by This Section. The indemnification provided by this     Section 7.7 shall be in addition to any other rights to which an Indemnitee     or any other Person may be entitled under any agreement, pursuant to any     vote of the Partners, as a matter of law or otherwise, and shall continue     as to an Indemnitee who has ceased to serve in such capacity.          (d) Insurance. The Partnership may purchase and maintain insurance, on     behalf of the Indemnitees and such other Persons as the General Partner     shall determine, against any liability that may be asserted against or     expenses that may be incurred by such Person in connection with the     Partnership's activities, regardless of whether the Partnership would have     the power to indemnify such Person against such liability under the     provisions of this Agreement.          (e) Employee Benefit Plans. For purposes of this Section 7.7, the     Partnership shall be deemed to have requested an Indemnitee to serve as     fiduciary of an employee benefit plan whenever the performance by it of its     duties to the Partnership also imposes duties on, or otherwise involves     services by, it to the plan or participants or beneficiaries of the plan;     excise taxes assessed on an Indemnitee with respect to an employee benefit     plan pursuant to applicable law shall constitute fines within the meaning     of Section 7.7(a); and actions taken or omitted by the Indemnitee with     respect to an employee benefit plan in the performance of its duties for a     purpose reasonably believed by it to be in the interest of the participants     and beneficiaries of the plan shall be deemed to be for a purpose which is     not opposed to the best interests of the Partnership.          (f) No Personal Liability for Limited Partner. In no event may an     Indemnitee subject the Limited Partner to personal liability by reason of     the indemnification provisions set forth in this Agreement.          (g) Interested Transactions.  An Indemnitee shall not be denied     indemnification in whole or in part under this Section 7.7 because the     Indemnitee had an interest in the transaction with respect to which the     indemnification applies if the transaction was otherwise permitted by the     terms of this Agreement.          (h) Binding Effect.  The provisions of this Section 7.7 are for the     benefit of the Indemnitees, their heirs, successors, assigns and     administrators and shall not be deemed to create any rights for the benefit     of any other Persons.     Section 7.8 Liability of the General Partner.                 --------------------------------           (a) General. Notwithstanding anything to the contrary set forth in     this Agreement, the General Partner shall not be liable for monetary     damages to the Partnership or any Partners for losses sustained or     liabilities incurred as a result of                                      26      errors in judgment or of any act or omission, unless (i) the General     Partner actually received an improper benefit in money, property or     services (in which case, such liability shall be for the amount of the     benefit in money, property or services actually received), or (ii) the     General Partner's action or failure to act was the result of active and     deliberate dishonesty and was material to the cause of action being     adjudicated.          (b) No Obligation to Consider Interests of Limited Partner. The     Limited Partner expressly acknowledges that the General Partner is acting     on behalf of the Partnership and the sole stockholder of the General     Partner collectively, that the General Partner is under no obligation to     consider the separate interests of the Limited Partner (including, without     limitation, the tax consequences to the Limited Partner) in deciding     whether to cause the Partnership to take (or decline to take) any actions     which the General Partner has undertaken in good faith on behalf of the     Partnership, and that the General Partner shall not be liable for monetary     damages for losses sustained, liabilities incurred, or benefits not derived     by the Limited Partner in connection with such decisions, unless (i) the     General Partner actually received an improper benefit in money, property or     services (in which case, such liability shall be for the amount of the     benefit in money, property or services actually received), or (ii) the     General Partner's action or failure to act was the result of active and     deliberate dishonesty and was material to the cause of action being     adjudicated.          (c) Acts of Agents. Subject to its obligations and duties as General     Partner set forth in Section 7.1(a) hereof, the General Partner may     exercise any of the powers granted to it by this Agreement and perform any     of the duties imposed upon it hereunder either directly or by or through     its agents. The General Partner shall not be responsible for any misconduct     or negligence on the part of any such agent appointed by it in good faith.          (d) Effect of Amendment. Any amendment, modification or repeal of this     Section 7.8 or any provision hereof shall be prospective only and shall not     in any way affect the limitations on the General Partner's liability to the     Partnership and the Limited Partner under this Section 7.8 as in effect     immediately prior to such amendment, modification or repeal with respect to     claims arising from or relating to matters occurring, in whole or in part,     prior to such amendment, modification or repeal, regardless of when such     claims may arise or be asserted.     Section 7.9 Other Matters Concerning the General Partner.                 --------------------------------------------           (a) Reliance on Documents. The General Partner may rely and shall be     protected in acting or refraining from acting upon any resolution,     certificate, statement, instrument, opinion, report, notice, request,     consent, order, bond, debenture, or other paper or document believed by it     to be genuine and to have been signed or presented by the proper party or     parties.                                      27           (b) Reliance on Consultants and Advisors. The General Partner may     consult with legal counsel, accountants, appraisers, management     consultants, investment bankers and other consultants and advisors selected     by it, and any act taken or omitted to be taken in reliance upon the     opinion of such Persons as to matters which such General Partner reasonably     believes to be within such Person's professional or expert competence shall     be conclusively presumed to have been done or omitted in good faith and in     accordance with such opinion.          (c) Action Through Officers and Attorneys. The General Partner shall     have the right, in respect of any of its powers or obligations hereunder,     to act through any of its duly authorized officers and a duly appointed     attorney or attorneys-in-fact. Each such attorney shall, to the extent     provided by the General Partner in the power of attorney, have full power     and authority to do and perform all and every act and duty which is     permitted or required to be done by the General Partner hereunder.     Section 7.10 Title to Partnership Assets. Title to Partnership assets,whether real, personal or mixed and whether tangible or intangible, shall bedeemed to be owned by the Partnership as an entity, and no Partner, individuallyor collectively, shall have any ownership interest in such Partnership assets orany portion thereof. Title to any or all of the Partnership assets may be heldin the name of the Partnership, the General Partner or one or more nominees, asthe General Partner may determine, including Affiliates of the General Partner.The General Partner hereby declares and warrants that any Partnership assets forwhich legal title is held in the name of the General Partner or any nominee orAffiliate of the General Partner shall be held by the General Partner for theuse and benefit of the Partnership in accordance with the provisions of thisAgreement; provided, however, that the General Partner shall use its bestefforts to cause beneficial and record title to such assets to be vested in thePartnership as soon as reasonably practicable. All Partnership assets shall berecorded as the property of the Partnership in its books and records,irrespective of the name in which legal title to such Partnership assets isheld.     Section 7.11 Reliance by Third Parties. Notwithstanding anything to thecontrary in this Agreement, any Person dealing with the Partnership shall beentitled to assume that the General Partner has full power and authority toencumber, sell or otherwise use in any manner any and all assets of thePartnership and to enter into any contracts on behalf of the Partnership, andsuch Person shall be entitled to deal with the General Partner as if it were thePartnership's sole party in interest, both legally and beneficially. The LimitedPartner hereby waives any and all defenses or other remedies which may beavailable against the Limited Partner to contest, negate or disaffirm any actionof the General Partner in connection with any such dealing. In no event shallany Person dealing with the General Partner or its representatives be obligatedto ascertain that the terms of this Agreement have been complied with or toinquire into the necessity or expedience of any act or action of the GeneralPartner or its representatives. Each and every certificate, document or otherinstrument executed on behalf of the Partnership by the General Partner or itsrepresentatives shall be conclusive                                      28 evidence in favor of any and every Person relying thereon or claiming thereunderthat (a) at the time of the execution and delivery of such certificate, documentor instrument, this Agreement was in full force and effect, (b) the Personexecuting and delivering such certificate, document or instrument was dulyauthorized and empowered to do so for and on behalf of the Partnership and (c)such certificate, document or instrument was duly executed and delivered inaccordance with the terms and provisions of this Agreement and is binding uponthe Partnership.                                 ARTICLE VIII                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNER     Section 8.1 Limitation of Liability. The Limited Partner shall have noliability under this Agreement except as expressly provided in this Agreement,including Section 10.5 hereof, or under the Act.     Section 8.2 Management of Business. The Limited Partner shall not take partin the operation, management or control (within the meaning of the Act) of thePartnership's business, transact any business in the Partnership's name nor havethe power to sign documents for or otherwise bind the Partnership. Thetransaction of any such business by the General Partner, any of its Affiliatesor any officer, director, employee, partner, agent of the General Partner, thePartnership or any of their Affiliates, in their capacity as such, shall notaffect, impair or eliminate the limitations on the liability of the LimitedPartner under this Agreement.     Section 8.3  Outside Activities of Limited Partner.                  -------------------------------------           (a)  General. Subject to Section 8.3(b) and any agreements entered     into by the Limited Partner or its Affiliates with the Partnership     (including, without limitation, the Non-Competition Agreement), the General     Partner or their respective Affiliates, the Partnership or a Subsidiary,     the following rights shall govern outside activities of the Limited     Partner: (i) the Limited Partner and any officer, director, employee,     agent, trustee, Affiliate or stockholder of any Limited Partner shall be     entitled to and may have business interests and engage in business     activities in addition to those relating to the Partnership, including     business interests and activities in direct competition with the     Partnership; (ii) neither the Partnership nor any Partners shall have any     rights by virtue of this Agreement in any business ventures of the Limited     Partner; (iii) neither the Limited Partner nor any other Person shall have     any rights by virtue of this Agreement or the partnership relationship     established hereby in any business ventures of any other Person, other than     the General Partner, and such Person shall have no obligation pursuant to     this Agreement to offer any interest in any such business ventures to the     Partnership, the Limited Partner or any such other Person, even if such     opportunity is of a character which, if presented to the Partnership, the     Limited Partner or such other Person, could be taken by such Person; (iv)     the fact that the Limited Partner may                                      29      encounter opportunities to purchase, otherwise acquire, lease, sell or     otherwise dispose of real or personal property and may take advantage of     such opportunities itself or introduce such opportunities to entities in     which it has or has not any interest, shall not subject such Partner to     liability to the Partnership or any of the other Partners on account of the     lost opportunity; and (v) except as otherwise specifically provided herein,     nothing contained in this Agreement shall be deemed to prohibit the Limited     Partner or any of its Affiliates from dealing, or otherwise engaging in     business, with Persons transacting business with the Partnership or from     providing services relating to the purchase, sale, rental, management or     operation of real or personal property (including real estate brokerage     services) and receiving compensation therefor, from any Persons who have     transacted business with the Partnership or other third parties.          (b) Limitation. Notwithstanding Section 8.3(a), other than through its     ownership interest in the Partnership and Hub Group Distribution Services,     the Limited Partner shall not directly or indirectly engage in the     ownership, management or operation of any Person who competes, directly or     indirectly, with the Partnership or the General Partner. Nothing in this     Section 8.3(b) shall prohibit the Limited Partner from owning up to 1% of     the outstanding securities of any Person who directly or indirectly     competes with the Company.     Section 8.4 Priority Among Partners. No Partner (Limited or General) shallhave priority over any other Partner (Limited or General) either as to thereturn of Capital Contributions or, except to the extent provided by Sections6.2 or 6.3 hereof, or otherwise expressly provided in this Agreement, as toprofits, losses or distributions.     Section 8.5  Rights of Limited Partner Relating to the Partnership.                  -----------------------------------------------------           (a) Copies of Business Records. In addition to other rights provided     by this Agreement or by the Act, and except as limited by Section 8.5(b)     hereof, the Limited Partner shall have the right, for a purpose reasonably     related to the Limited Partner's interest as a limited partner in the     Partnership, upon written demand with a statement of the purpose of such     demand and at the Limited Partner's own expense:                (1) to obtain a copy of the most recent annual and quarterly          reports filed with the Securities and Exchange Commission by the sole          stockholder of the General Partner pursuant to the Securities Exchange          Act of 1934, as amended;                (2) to obtain a copy of the Partnership's Federal, state and          local income tax returns for each Partnership Year;                (3) to obtain a current list of the name and last known          business, residence or mailing address of each Partner;                                      30                (4) to obtain a copy of this Agreement and the Certificate and          all amendments thereto, together with executed copies of all powers of          attorney pursuant to which this Agreement, the Certificate and all          amendments thereto have been executed; and               (5) to obtain true and full information regarding the amount of          cash and a description and statement of any other property or services          contributed by each Partner and which each Partner has agreed to          contribute in the future, and the date on which each became a partner.          (b) Confidential Information. Notwithstanding any other provision of     this Section 8.5, the General Partner may keep confidential from the     Limited Partner, for such period of time as the General Partner determines     in its sole and absolute discretion to be reasonable, any Partnership     information that (i) the General Partner believes to be in the nature of     trade secrets or other information the disclosure of which the General     Partner in good faith believes is not in the best interests of the     Partnership or (ii) the Partnership is required by law or by agreements     with unaffiliated third parties to keep confidential.     Section 8.6 Purchase Right.                 --------------           (a) From and after the date that the Principal is no longer employed     by the Partnership for any reason, the General Partner shall have the right     (the "Purchase Right") to purchase (but not the obligation), from the     Limited Partner all (but not less than all) of the Limited Partner's     Limited Partnership Interest in exchange for the Purchase Amount. For     purposes of this Section 8.6, the Purchase Amount shall be calculated as of     the last date of employment of the Principal by the Partnership. Prior to     any exercise of the Purchase Right, the disinterested members of the board     of directors of the sole stockholder of the General Partner shall have     approved, by a majority vote thereof, the exercise of the Purchase Right by     the General Partner.          (b) The General Partner shall exercise the Purchase Right (if at all)     by delivering a notice (the "Purchase Notice") to the Limited Partner at     the address of the Limited Partner as reflected in the records of the     Partnership. Such notice shall state that the General Partner is exercising     the Purchase Right, shall state that the disinterested members of the board     of directors of the sole stockholder of the General Partner have, by a     majority vote thereof, approved the exercise of the Purchase Right by the     General Partner, shall set forth the Purchase Amount (and the calculation     thereof) and such other matters as the General Partner deems appropriate.     On the thirtieth day following the Purchase Notice, the General Partner     shall deliver to the Limited Partner a certified or cashier's check for the     Purchase Amount (together with an amount representing any distributions     accrued but unpaid prior to the date of the Purchase Notice). The Limited     Partner agrees to execute such documents as the                                       31      General Partner may reasonably request in connection with the exercise of     the Purchase Right.                                  ARTICLE IX                    BOOKS, RECORDS, ACCOUNTING AND REPORTS     Section 9.1 Records and Accounting. The General Partner shall keep or causeto be kept at the principal office of the Partnership appropriate books andrecords with respect to the Partnership's business, including, withoutlimitation, all books and records necessary to provide to the Limited Partnerany information, lists and copies of documents required to be provided pursuantto Section 9.3 hereof. Any records maintained by or on behalf of the Partnershipin the regular course of its business may be kept on, or be in the form of,punch cards, magnetic tape, photographs, micrographics or any other informationstorage device; provided that the records so maintained are convertible intoclearly legible written form within a reasonable period of time. The books ofthe Partnership shall be maintained for financial purposes on an accrual basisin accordance with generally accepted accounting principles and for taxreporting purposes on the accrual basis.     Section 9.2 Fiscal Year. The fiscal year of the Partnership shall be thecalendar year.     Section 9.3 Reports.                 -------          (a) Annual Reports. As soon as practicable, but in no event later     than 120 days after the close of each Partnership Year, the General Partner     shall cause to be mailed to the Limited Partner as of the close of the     Partnership Year, an annual report containing unaudited financial     statements of the Partnership presented in accordance with generally     accepted accounting principles.          (b) Quarterly Reports. As soon as practicable, but in no event later     than 60 days after the close of each calendar quarter (except the last     calendar quarter of each year), the General Partner shall cause to be     mailed to the Limited Partner as of the last day of the calendar quarter, a     report containing unaudited financial statements of the Partnership, and     such other information as may be required by applicable law or regulation,     or as the General Partner determines to be appropriate.                                   ARTICLE X                                  TAX MATTERS     Section 10.1 Preparation of Tax Returns. The General Partner shallarrange for the preparation and timely filing of all returns of Partnershipincome, gains, deductions, losses and other items required of the Partnershipfor Federal and state income tax purposes and shall use all reasonable effortsto furnish, within 90 days of the close of each taxable year, the tax                                      32 information reasonably required by the General Partner and the Limited Partnerfor Federal and state income tax reporting purposes.     Section 10.2 Tax Elections. Except as otherwise provided herein, theGeneral Partner shall, in its sole and absolute discretion, determine whether tomake any available election pursuant to the Code; provided, however, that theGeneral Partner shall make the election under Section 754 of the Code inaccordance with applicable regulations thereunder. The General Partner shallhave the right to seek to revoke any such election (including, withoutlimitation, the election under Section 754 of the Code) upon the GeneralPartner's determination in its sole and absolute discretion that such revocationis in the best interests of the Partners.     Section 10.3 Tax Matters Partner.                  -------------------           (a) General. The General Partner shall be the "tax matters partner"     of the Partnership for Federal income tax purposes. Pursuant to Section     6223(c) of the Code, upon receipt of notice from the IRS of the beginning     of an administrative proceeding with respect to the Partnership, the tax     matters partner shall furnish the IRS with the name, address and profit     interest of the Limited Partner; provided, however, that such information     is provided to the Partnership by the Limited Partner. The Limited Partner     shall provide such information to the Partnership as the General Partner     shall reasonably request.          (b) Powers.  The tax matters partner is authorized, but not required:               (1) to enter into any settlement with the IRS with respect to any          administrative or judicial proceedings for the adjustment of          Partnership items required to be taken into account by a Partner for          income tax purposes (such administrative proceedings being referred to          as a "tax audit" and such judicial proceedings being referred to as          "judicial review"), and in the settlement agreement the tax matters          partner may expressly state that such agreement shall bind all          Partners, except that such settlement agreement shall not bind any          Partner (a) who (within the time prescribed pursuant to the Code and          Regulations) files a statement with the IRS providing that the tax          matters partner shall not have the authority to enter into a          settlement agreement on behalf of such Partner or (b) who is a "notice          partner" (as defined in Section 6231 of the Code) or a member of a          "notice group" (as defined in Section 6223(b)(2) of the Code);               (2) in the event that a notice of a final administrative          adjustment at the Partnership level of any item required to be taken          into account by a partner for tax purposes (a "final adjustment") is          mailed or otherwise given to the tax matters partner, to seek judicial          review of such final adjustment, including the                                      33           filing of a petition for readjustment with the Tax Court or the United          States Claims Court, or the filing of a complaint for refund with the          District Court of the United States for the district in which the          Partnership's principal place of business is located;               (3) to intervene in any action brought by any other Partner for          judicial review of a final adjustment;               (4) to file a request for an administrative adjustment with the          IRS at any time and, if any part of such request is not allowed by the          IRS, to file an appropriate pleading (petition, complaint or other          document) for judicial review with respect to such request;               (5) to enter into an agreement with the IRS to extend the period          for assessing any tax which is attributable to any item required to be          taken into account by a Partner for tax purposes, or an item affected          by such item; and               (6) to take any other action on behalf of the Partners of the          Partnership in connection with any tax audit or judicial review          proceeding to the extent permitted by applicable law or regulations.          The taking of any action and the incurring of any expense by the tax     matters partner in connection with any such proceeding, except to the     extent required by law, is a matter in the sole and absolute discretion of     the tax matters partner, and the provisions relating to indemnification of     the General Partner set forth in Section 7.7 of this Agreement shall be     fully applicable to the tax matters partner in its capacity as such.          (c) Reimbursement. The tax matters partner shall receive no     compensation for its services. All third-party costs and expenses incurred     by the tax matters partner in performing its duties as such (including     legal and accounting fees) shall be borne by the Partnership. Nothing     herein shall be construed to restrict the Partnership from engaging an     accounting firm and a law firm to assist the tax matters partner in     discharging his duties hereunder, so long as the compensation paid by the     Partnership for such services is reasonable.     Section 10.4 Organizational Expenses. The Partnership shall elect to deductexpenses, if any, incurred by it in organizing the Partnership ratably over a 60month period as provided in Section 709 of the Code.     Section 10.5 Withholding. The Limited Partner hereby authorizes thePartnership to withhold from, or pay on behalf of, or with respect to, theLimited Partner any amount of Federal, state, local, or foreign taxes that theGeneral Partner determines that the Partnership                                      34 is required to withhold or pay with respect to any amount distributable orallocable to the Limited Partner pursuant to this Agreement, including, withoutlimitation, any taxes required to be withheld or paid by the Partnershippursuant to Section 1441, 1442, 1445 or 1446 of the Code. Any amount paid onbehalf of or with respect to the Limited Partner shall constitute a loan by thePartnership to the Limited Partner, which loan shall be repaid by the LimitedPartner within 15 days after notice from the General Partner that such paymentmust be made unless (a) the Partnership withholds such payment from adistribution which would otherwise be made to the Limited Partner or (b) theGeneral Partner determines, in its sole and absolute discretion, that suchpayment may be satisfied out of the available funds of the Partnership whichwould, but for such payment, be distributed to the Limited Partner. Any amountswithheld pursuant to the foregoing clauses (a) or (b) shall be treated as havingbeen distributed to the Limited Partner. The Limited Partner herebyunconditionally and irrevocably grants to the Partnership a security interest inthe Limited Partner's Partnership Interest to secure the Limited Partner'sobligation to pay to the Partnership any amounts required to be paid pursuant tothis Section 10.5. In the event that the Limited Partner fails to pay anyamounts owed to the Partnership pursuant to this Section 10.5 when due, theGeneral Partner may, in its sole and absolute discretion, elect to make thepayment to the Partnership on behalf of the defaulting Limited Partner, and insuch event shall be deemed to have loaned such amount to the defaulting LimitedPartner and shall succeed to all rights and remedies of the Partnership asagainst the defaulting Limited Partner (including, without limitation, the rightto receive distributions). Any amounts payable by the Limited Partner hereundershall bear interest at the base rate on corporate loans at large United Statesmoney center commercial banks, as published from time to time in the Wall StreetJournal, plus four percentage points (but not higher than the maximum lawfulrate) from the date such amount is due (i.e., 15 days after demand) until suchamount is paid in full. The Limited Partner shall take such actions as thePartnership or the General Partner shall request in order to perfect or enforcethe security interest created hereunder.                                  ARTICLE XI                           TRANSFERS AND WITHDRAWALS     Section 11.1 Transfer.                  --------           (a) Definition. The term "transfer," when used in this Article XI     with respect to a Partnership Interest, shall be deemed to refer to a     transaction by which Partner purports to assign its Partnership Interest to     another Person and includes a sale, assignment, gift, bequest, pledge,     encumbrance, hypothecation, mortgage, exchange or any other disposition by     law or otherwise. The term "transfer" when used in this Article XI does not     include any acquisition of Partnership Interests from a Limited Partner by     the General Partner pursuant to Section 8.6 hereof.          (b) Requirements. No Partnership Interest shall be transferred, in     whole or in part, except in accordance with the terms and conditions set     forth in this Article XI.                                      35      Any transfer or purported transfer of a Partnership Interest not made in     accordance with this Article XI shall be null and void.     Section 11.2  Transfer of General Partner's Partnership Interest.                   --------------------------------------------------           (a) General. The General Partner may not transfer any of its General     Partnership Interest or withdraw as General Partner except in connection     with a transaction described in Section 11.2(b).          (b) Transfer in Connection With Reclassification, Recapitalization, or     Business Combination Involving General Partner. The General Partner shall     not engage in any merger, consolidation or other combination with or into     another Person or sale of all or substantially all of its assets, or any     reclassification, or recapitalization or change of its outstanding common     stock (other than a change in par value, or from par value to no par value,     or as a result of a subdivision or combination of its common stock), unless     under the terms of such transaction, the Limited Partner will not be deemed     to have engaged in a sale or exchange for Federal income tax purposes of     its Partnership Interest.     Section 11.3  Limited Partner's Rights to Transfer.                   ------------------------------------           (a) General. Subject to the provisions of Section 8.6, the Limited     Partner may not transfer all or any portion of its Partnership Interest, or     any of the Limited Partner's rights as a Limited Partner, without the prior     written consent of the General Partner, which consent may be given or     withheld by the General Partner in its sole and absolute discretion. The     General Partner's failure or refusal to permit a transfer of the Limited     Partner's Partnership Interest shall not give rise to any cause of action     against the Partnership or the General Partner. The General Partner may     condition its consent to any such transfer on such matters as it deems     appropriate, including without limitation, amendments to this Agreement. In     order to effect such transfer upon consent of the General Partner, the     Limited Partner must deliver to the General Partner a duly executed copy of     the instrument making such transfer and such instrument must evidence the     written acceptance by the assignee of all of the terms and conditions of     this Agreement and represent that such assignment was made in accordance     with all applicable laws and regulations.          (b) Incapacitated Limited Partners. If a Limited Partner is subject to     Incapacity, the executor, administrator, trustee, committee, guardian,     conservator or receiver of such Limited Partner's estate shall have all the     rights of a Limited Partner, but not more rights than those enjoyed by the     Limited Partner for the purpose of settling or managing the estate and such     power as the Incapacitated Limited Partner possessed to transfer all or any     part of his or its interest in the Partnership. The                                      36      Incapacity of a Limited Partner, in and of itself, shall not dissolve or     terminate the Partnership.          (c) Rights and Duties of Substituted Limited Partners. A transferee     who has been admitted as a Substituted Limited Partner in accordance with     this Article XI shall have all the rights and powers and be subject to all     the restrictions and liabilities of the Limited Partner under this     Agreement.          (d) Amendment of Exhibit A. Upon the admission of a Substituted     Limited Partner, the General Partner shall amend Exhibit A to reflect the     name, address, Partnership Interests, and Percentage Interest of such     Substituted Limited Partner and to eliminate or adjust, if necessary, the     name, address and interest of the predecessor of such Substituted Limited     Partner.     Section 11.4  General Provisions.                   ------------------           (a) Withdrawal or Transfer of Limited Partner. The Limited Partner may     not withdraw from the Partnership other than as a result of a permitted     transfer of all of the Limited Partner's Partnership Interests in     accordance with this Article XI or pursuant to the provisions of Section     8.6 hereof. If the Limited Partner shall transfer all of its Partnership     Interests in a transfer permitted pursuant to this Article XI or pursuant     to the provisions of Section 8.6 hereof shall cease to be a Limited     Partner.          (b) Timing of Transfers. Transfers pursuant to this Article XI may     only be made on the first day of a fiscal quarter of the Partnership,     unless the General Partner otherwise agrees.          (c) Allocation When Transfer Occurs. If any Partnership Interest is     transferred during any quarterly segment of the Partnership's fiscal year     in compliance with the provisions of this Article XI or pursuant to the     provisions of Section 8.6 hereof, Net Income, Net Losses, each item thereof     and all other items attributable to such interest for such fiscal year     shall be divided and allocated between the transferor Partner and the     transferee Partner by taking into account their varying interests during     the fiscal year in accordance with Section 706(d) of the Code, based on the     portion of the year for which the transferor Partner and the transferee     Partner were Partners. Solely for purposes of making such allocations, each     of such items for the calendar month in which the transfer or redemption     occurs shall be allocated to the Person who is a Partner as of midnight on     the last day of said month. All distributions of Available Cash with     respect to which the record date is before the date of such transfer or     redemption shall be made to the transferor Partner, and all distributions     of Available Cash with record dates thereafter shall be made to the     transferee Partner.                                      37                                   ARTICLE XII                             ADMISSION OF PARTNERS     Section 12.1 Admission of Successor General Partner. A successor to all ofthe General Partner's General Partnership Interest pursuant to Section 11.2hereof who is proposed to be admitted as a successor General Partner shall beadmitted to the Partnership as the General Partner, effective upon suchtransfer. Any such transferee shall carry on the business of the Partnershipwithout dissolution. In each case, the admission shall be subject to thesuccessor General Partner executing and delivering to the Partnership anacceptance of all of the terms and conditions of this Agreement and such otherdocuments or instruments as may be required to effect the admission.     Section 12.2 Admission of Additional Limited Partners. No additionalLimited Partners shall be admitted to the Partnership without the consent of allof the Partners.     Section 12.3 Amendment of Agreement and Certificate. For the admission tothe Partnership of any Partner, the General Partner shall take all stepsnecessary and appropriate under the Act to amend the records of the Partnershipand, if necessary, to prepare as soon as practical an amendment of thisAgreement (including an amendment of Exhibit A) and, if required by law, shallprepare and file an amendment to the Certificate and may for this purposeexercise the power of attorney granted pursuant to Article XVI hereof.                                 ARTICLE XIII                          DISSOLUTION AND LIQUIDATION     Section 13.1 Dissolution. The Partnership shall not be dissolved by theadmission of Substituted Limited Partners or additional Limited Partners or bythe admission of a successor General Partner in accordance with the terms ofthis Agreement. Subject to Section 13.2, the Partnership shall dissolve, and itsaffairs shall be wound up, upon the first to occur of any of the following("Events of Dissolution"):          (a) Expiration of Term--the expiration of its term as provided in     Section 2.5 hereof;               (b) Withdrawal of General Partner--an event of withdrawal of the     General Partner, as defined in the Act, unless, within 90 days after the     withdrawal, all the remaining Partners agree in writing to continue the     business of the Partnership and to the appointment, effective as of the     date of withdrawal, of a substitute General Partner;          (c) Dissolution Prior to 2097--from and after the date of this     Agreement through December 31, 2096, an election to dissolve the     Partnership made by the General Partner, in its sole and absolute     discretion;                                      38           (d) Judicial Dissolution Decree--entry of a decree of judicial     dissolution of the Partnership pursuant to the provisions of the Act;          (e) Sale of Partnership's Assets--the sale of all or substantially all     of the assets and properties of the Partnership;          (f) Merger--the merger or other combination of the Partnership with or     into another entity;          (g) Vote--a vote of all of the Partners;          (h) Bankruptcy or Insolvency of General Partner--the General Partner              (1) makes an assignment for the benefit of creditors;              (2) files a voluntary petition in bankruptcy;              (3) is adjudged a bankrupt or insolvent, or has entered against it          an order for relief in any bankruptcy or insolvency proceeding;               (4) files a petition or answer seeking for itself any          reorganization, arrangement, composition, readjustment, liquidation,          dissolution or similar relief under any statute, law or regulation;              (5) files an answer or other pleading admitting or failing to          contest the material allegations of a petition filed against it in any          proceeding of this nature; or              (6) seeks, consents to or acquiesces in the appointment of a          trustee, receiver or liquidator of the General Partner or of all or          any substantial part of its properties; or          (i) Readjustment, etc. One hundred and twenty (120) days after the      commencement of any proceeding against the General Partner seeking      reorganization, arrangement, composition, readjustment, liquidation,      dissolution or similar relief under any statute, law or regulation, the      proceeding has not been dismissed, or if within 90 days after the      appointment without the General Partner's consent or acquiescence of a      trustee, receiver or liquidator of the General Partner or of all or any      substantial part of its properties, the appointment is not vacated or      stayed, or within 90 days after the expiration of any such stay, the      appointment is not vacated.      Section 13.2 Right to Continue the Partnership Business. In the event ofthe dissolution of the Partnership for any reason, the Limited Partner shallhave the option to form                                      39 a new partnership for the purpose of continuing the Partnership business.Unless the Limited Partner so elects within 90 days after the occurrence of anEvent of Dissolution, the Partnership shall be liquidated and shall immediatelycommence to wind up its affairs as provided in Section 13.3.     Section 13.3  Winding Up.                   ----------           (a) General.  Upon the occurrence of an Event of Dissolution and     subject to Section 13.2, the Partnership shall continue solely for the     purposes of winding up its affairs in an orderly manner, liquidating its     assets, and satisfying the claims of its creditors and Partners. No Partner     shall take any action that is inconsistent with, or not necessary to or     appropriate for, the winding up of the Partnership's business and affairs.     The General Partner (or, in the event there is no remaining General     Partner, any Person elected by the Limited Partner (the "Liquidator"))     shall be responsible for overseeing the winding up and dissolution of the     Partnership and shall take full account of the Partnership's liabilities     and property and the Partnership property shall be liquidated as promptly     as is consistent with obtaining the fair value thereof, and the proceeds     therefrom shall be applied and distributed in the following order:               (1) First, to the payment and discharge of all of the          Partnership's debts and liabilities to creditors other than the          Partners;               (2) Second, to the payment and discharge of all of the          Partnership's debts and liabilities to the Partners, pro rata in          accordance with amounts owed to each such Partner; and               (3) The balance, if any, to the General Partner and Limited          Partner in accordance with their respective Capital Accounts, after          giving effect to all contributions, distributions, and allocations for          all periods.          The General Partner shall not receive any additional compensation for     any services performed pursuant to this Article XIII.          (b) Where Immediate Sale of Partnership's Assets Impractical.     Notwithstanding the provisions of Section 13.3(a) hereof which require     liquidation of the assets of the Partnership, but subject to the order of     priorities set forth therein, if prior to or upon dissolution of the     Partnership the Liquidator determines that an immediate sale of part or all     of the Partnership's assets would be impractical or would cause undue loss     to the Partners, the Liquidator may, in its sole and absolute discretion,     defer for a reasonable time the liquidation of any assets except those     necessary to satisfy liabilities of the Partnership (including to those     Partners as creditors) or, with the consent of all Partners, distribute to     the Partners, in lieu of cash, as tenants in common and in accordance with     the provisions of Section 13.3(a) hereof,                                       40      undivided interests in the Partnership assets as the Liquidator deems not     suitable for liquidation. Any such distributions in kind shall be made only     if, in the good faith judgment of the Liquidator, such distributions in     kind are in the best interest of the Partners, and shall be subject to such     conditions relating to the disposition and management of such properties as     the Liquidator deems reasonable and equitable and to any agreements     governing the operation of such properties at such time. The Liquidator     shall determine the fair market value of any property distributed in kind     using such reasonable method of valuation as it may adopt.     Section 13.4  Compliance with Timing Requirements of Regulations; Allowance                   for Contingent or Unforeseen Liabilities or Obligations.          (a) Liquidation. Notwithstanding anything to the contrary in this     Agreement, in the event the Partnership is "liquidated" within the meaning     of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made     pursuant to this Article XIII to the General Partner and the Limited     Partner if it has a positive Capital Account in compliance with Regulations     Section 1.704-1(b)(2)(ii)(b)(2) (including any timing requirements     therein). In the discretion of the General Partner, a pro rata portion of     the distributions that would otherwise be made to the General Partner and     the Limited Partner pursuant to this Article XIII may be: (a) distributed     to a liquidating trust established for the benefit of the General Partner     and Limited Partner for the purposes of liquidating Partnership assets,     collecting amounts owed to the Partnership, and paying any contingent or     unforeseen liabilities or obligations of the Partnership or of the General     Partner arising out of or in connection with the Partnership. (The assets     of any such trust shall be distributed to the General Partner and Limited     Partner from time to time, in the reasonable discretion of the General     Partner, in the same proportions as the amount distributed to such trust by     the Partnership would otherwise have been distributed to the General     Partner and Limited Partner pursuant to this Agreement); or (b) withheld to     provide a reasonable reserve for Partnership liabilities (contingent or     otherwise) and to reflect the unrealized portion of any installment     obligations owed to the Partnership, provided that such withheld amounts     shall be distributed to the General Partner and Limited Partner as soon as     practicable.          (b) Deficit Balance of General Partner. Notwithstanding anything to     the contrary in this Agreement, (i) if the General Partner has a deficit     balance in its Capital Account following the liquidation (within the     meaning of Regulations Section 1.704-1(b)(2)(ii)(g)) of its interest in the     Partnership, as determined after taking into account all Capital Account     adjustments for the Partnership taxable year during which such liquidation     occurs (other than any adjustment for a capital contribution of the General     Partner made pursuant to this sentence), the General Partner shall make a     capital contribution to the Partnership in an amount equal to such deficit     balance by the end of the Partnership taxable year during which such     liquidation occurs (or, if later, within                                      41      90 days after date of such liquidation); and (ii) such capital contribution     made pursuant to clause (i) of this Section 13.4(b) shall be distributed or     utilized as provided in Section 13.4 or 13.5.     Section 13.5 Deemed Distribution and Recontribution. Notwithstanding anyother provision of this Article XIII (but subject to Section 13.4(b)), in theevent the Partnership is liquidated within the meaning of Regulations Section1.704-1(b)(2)(ii)(g) but no Event of Dissolution has occurred, the Partnership'sproperty shall not be liquidated, the Partnership's liabilities shall not bepaid or discharged, and the Partnership's affairs shall not be wound up.Instead, the Partnership shall be deemed to have distributed the Property inkind to the General Partner and Limited Partner who shall be deemed to haveassumed and taken such property subject to all Partnership liabilities, all inaccordance with their respective Capital Accounts. Immediately thereafter, theGeneral Partner and Limited Partner shall be deemed to have recontributed thePartnership property in kind to the Partnership, which shall be deemed to haveassumed and taken such property subject to all such liabilities.     Section 13.6 Rights of Limited Partner. Except as specifically provided inthis Agreement, the Limited Partner shall look solely to the assets of thePartnership for the return of its Capital Contribution and shall have no rightor power to demand or receive property other than cash from the Partnership.Except as specifically provided in this Agreement, no Partner shall havepriority over any other Partner as to the return of its Capital Contributions,distributions, or allocations.     Section 13.7 Notice of Dissolution. In the event an Event of Dissolution oran event occurs that would, but for provisions of Section 13.1 or Section 13.2,result in a dissolution of the Partnership, the General Partner shall, within 30days thereafter, provide written notice thereof to each of the Partners and toall other parties with whom the Partnership regularly conducts business (asdetermined in the discretion of the General Partner) and shall publish noticethereof in a newspaper of general circulation in each place in which thePartnership regularly conducts business (as determined in the discretion of theGeneral Partner).           Section 13.8 Cancellation of Certificate of Limited Partnership. Upon thecompletion of the liquidation of the Partnership as provided in Section 13.3hereof, the Partnership shall be terminated and the Certificate and allqualifications of the Partnership as a foreign limited partnership injurisdictions other than the State of Delaware shall be canceled and such otheractions as may be necessary to terminate the Partnership shall be taken.     Section 13.9 Reasonable Time for Winding-Up. A reasonable time shall beallowed for the orderly winding-up of the business and affairs of thePartnership and the liquidation of its assets pursuant to Section 13.3 hereof,in order to minimize any losses otherwise attendant upon such winding-up, andthe provisions of this Agreement shall remain in effect between the Partnersduring the period of liquidation.                                      42                                   ARTICLE XIV                  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS     Section 14.1  Amendments.                   ----------           (a) General. Subject to Section 14.1(b), this Agreement may only be     amended by a written agreement signed by each of the Partners.          (b) General Partner's Power to Amend. Notwithstanding Section 14.1(a),     the General Partner shall have the power, without the consent of the     Limited Partner, to amend this Agreement as may be required to facilitate     or implement any of the following purposes:               (1) to add to the obligations of the General Partner or surrender          any right or power granted to the General Partner or any Affiliate of          the General Partner for the benefit of the Limited Partner;               (2) to reflect the admission, substitution, termination, or          withdrawal of Partners in accordance with this Agreement;               (3) to reflect a change that is of an inconsequential nature and          does not adversely affect the Limited Partner in any material respect,          or to cure any ambiguity, correct or supplement any provision in this          Agreement not inconsistent with law or with other provisions, or make          other changes with respect to matters arising under this Agreement          that will not be inconsistent with law or with the provisions of this          Agreement; and               (4) to satisfy any requirements, conditions, or guidelines          contained in any order, directive, opinion, ruling or regulation of a          Federal or state agency or contained in Federal or state law.          The General Partner will provide notice to the Limited Partner when     any action under this Section 14.1(b) is taken.                                  ARTICLE XV                              GENERAL PROVISIONS     Section 15.1 Addresses and Notice. All notices and demands under thisAgreement shall be in writing, and may be either delivered personally (whichshall include deliveries by courier), by telefax, telex or other wiretransmission (with request for assurance of receipt in a manner appropriate withrespect to communications of that type, provided that a confirmation copy isconcurrently sent by a nationally recognized express courier for overnightdelivery) or mailed, postage prepaid, by certified or registered mail, returnreceipt requested, directed to                                      43 the parties at their respective addresses set forth on Exhibit A attachedhereto, as it may be amended from time to time, and, if to the Partnership, suchnotices and demands sent in the aforesaid manner must be delivered at itsprincipal place of business set forth above. Unless delivered personally or bytelefax, telex or other wire transmission as above (which shall be effective onthe date of such delivery or transmission), any notice shall be deemed to havebeen made three (3) days following the date so mailed. Any party hereto maydesignate a different address to which notices and demands shall thereafter bedirected by written notice given in the same manner and directed to thePartnership at its office hereinabove set forth.     Section 15.2 Titles and Captions. All article or section titles or captionsin this Agreement are for convenience only. They shall not be deemed part ofthis Agreement and in no way define, limit, extend or describe the scope orintent of any provisions hereof. Except as specifically provided otherwise,references to "Articles" and "Sections" are to Articles and Sections of thisAgreement.     Section 15.3 Pronouns and Plurals. Whenever the context may require, anypronoun used in this Agreement shall include the corresponding masculine,feminine or neuter forms, and the singular form of nouns, pronouns and verbsshall include the plural and vice versa.     Section 15.4 Further Action. The parties shall execute and deliver alldocuments, provide all information and take or refrain from taking action as maybe necessary or appropriate to achieve the purposes of this Agreement.     Section 15.5 Binding Effect. This Agreement shall be binding upon and inureto the benefit of the parties hereto and their heirs, executors, administrators,successors, legal representatives and permitted assigns.     Section 15.6 Waiver of Partition. The Partners hereby agree that thePartnership properties are not and will not be suitable for partition.Accordingly, each of the Partners hereby irrevocably waives any and all rights(if any) that it may have to maintain any action for partition of any of thePartnership properties.     Section 15.7 Entire Agreement. This Agreement constitutes the entireagreement among the parties with respect to the matters contained herein; itsupersedes any prior agreements or understandings among them and it may not bemodified or amended in any manner other than pursuant to Article XIV.     Section 15.8 Securities Law Provisions. The Partnership Interests have notbeen registered under the Federal or state securities laws of any state and,therefore, may not be resold unless appropriate Federal and state securitieslaws, as well as the provisions of Article XI hereof, have been complied with.                                      44      Section 15.9 Remedies Not Exclusive. Any remedies herein contained forbreaches of obligations hereunder shall not be deemed to be exclusive and shallnot impair the right of any party to exercise any other right or remedy, whetherfor damages, injunction or otherwise.     Section 15.10 Time. Time is of the essence of this Agreement.     Section 15.11 Creditors. None of the provisions of this Agreement shall befor the benefit of, or shall be enforceable by, any creditor of the Partnership.     Section 15.12 Waiver. No failure by any party to insist upon the strictperformance of any covenant, duty, agreement or condition of this Agreement orto exercise any right or remedy consequent upon a breach thereof shallconstitute waiver of any such breach or any other covenant, duty, agreement orcondition.     Section 15.13 Execution Counterparts. This Agreement may be executed incounterparts, all of which together shall constitute one agreement binding onall the parties hereto, notwithstanding that all such parties are notsignatories to the original or the same counterpart. Each party shall becomebound by this Agreement immediately upon affixing its signature hereto.     Section 15.14 Applicable Law. This Agreement shall be construed inaccordance with and governed by the laws of the State of Delaware, withoutregard to the principles of conflicts of law.     Section 15.15 Invalidity of Provisions. If any provision of this Agreementis or becomes invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions contained herein shallnot be affected thereby.                                  ARTICLE XVI                               POWER OF ATTORNEY     Section 16.1  Power of Attorney.                   -----------------           (a) Scope. The Limited Partner constitutes and appoints the General     Partner, any Liquidator, and authorized officers and attorneys-in-fact of     each, and each of those acting singly, in each case with full power of     substitution, as its true and lawful agent and attorney-in-fact, with full     power and authority in its name, place and stead to:               (1) execute, swear to, acknowledge, deliver, file and record in          the appropriate public offices (a) all certificates, documents and          other instruments (including, without limitation, this Agreement and          the Certificate and all amendments or restatements thereof) that the          General Partner or the Liquidator                                       45           deems appropriate or necessary to form, qualify or continue the          existence or qualification of the Partnership as a limited partnership          (or a partnership in which the limited partners have limited          liability) in the State of Delaware and in all other jurisdictions in          which the Partnership may conduct business or own property; (b) all          instruments that the General Partner deems appropriate or necessary to          reflect any amendment, change, modification or restatement of this          Agreement in accordance with its terms; (c) all conveyances and other          instruments or documents that the General Partner deems appropriate or          necessary to reflect the dissolution and liquidation of the          Partnership pursuant to the terms of this Agreement, including,          without limitation, a certificate of cancellation; (d) all instruments          relating to the admission, withdrawal, removal or substitution of any          Partner pursuant to, or other events described in, Article XI, XII or          XIII hereof or the Capital Contribution of any Partner; and (e) all          certificates, documents and other instruments relating to the          determination of the rights, preferences and privileges of Partnership          Interests; and               (2) execute, swear to, acknowledge and file all ballots,          consents, approvals, waivers, certificates and other instruments          appropriate or necessary, in the sole and absolute discretion of the          General Partner, to make, evidence, give, confirm or ratify any vote,          consent, approval, agreement or other action which is made or given by          the Partners hereunder or is consistent with the terms of this          Agreement or appropriate or necessary, in the sole discretion of the          General Partner, to effectuate the terms or intent of this Agreement.          Nothing contained herein shall be construed as authorizing the General     Partner to amend this Agreement except in accordance with Article XIV     hereof or as may be otherwise expressly provided for in this Agreement.          (b) Irrevocability. The foregoing power of attorney is hereby declared     to be irrevocable and a power coupled with an interest, in recognition of     the fact that each of the Partners will be relying upon the power of the     General Partner to act as contemplated by this Agreement in any filing or     other action by it on behalf of the Partnership, and it shall survive and     not be affected by the subsequent Incapacity of the Limited Partner and the     transfer of all or any portion of the Limited Partner's Partnership     Interests and shall extend to the Limited Partner's heirs, successors,     assigns and personal representatives. The Limited Partner hereby agrees to     be bound by any representation made by the General Partner, acting in good     faith pursuant to such power of attorney; and the Limited Partner hereby     waives any and all defenses which may be available to contest, negate or     disaffirm the action of the General Partner, taken in good faith under such     power of attorney. The Limited Partner shall execute and deliver to the     General Partner or the Liquidator, within 15 days after receipt of the     General Partner's request therefor, such further designation, powers of     attorney and                                      46      other instruments as the General Partner or the Liquidator, as the     case may be, deems necessary to effectuate this Agreement and the     purposes of the Partnership.                           *     *     *     *     *                                      47      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe date first written above.                                 GENERAL PARTNER:                                 Hub City Terminals, Inc.                                 By:  *                                      -----------------------------------                                      David P. Yeager                                      Vice Chairman                                 LIMITED PARTNER:                                 Hub City Alabama Terminals, Inc.                                 By:  *                                      -----------------------------------                                      David P. Yeager                                      Authorized Officer                                 FORMATION GENERAL PARTNER:                                 Hub City Alabama Terminals, Inc.                                 By:  *                                      -----------------------------------                                      David P. Yeager                                      Authorized Officer                                 FORMATION LIMITED PARTNER:                                 *                                 -----------------------------------                                 David P. Yeager                                    *                                 By:   /s/ David P. Yeager                                     ------------------------                                     David P. Yeager                                       48                                    EXHIBIT A                  PARTNERSHIP INTERESTS; PERCENTAGE INTERESTS  Name and Address of        Percentage Interest     Capital Contribution* Partner- -------------------------------------------------------------------------                                                              General Partner- -----------------------------------------------------------------------Hub City Terminals, Inc.             30%                $294,969.941035 Havens CourtDowners Grove, IL 60515- -----------------------------------------------------------------------Limited Partner- -----------------------------------------------------------------------Hub City Alabama                     70%                $688,263.10Terminals, Inc.2100 Riverchase CenterSuite 110Birmingham, AL 35244- ------------------------------------------------------------------------ -----------------------------------------------------------------------*The General Partner has succeeded to the Capital Account and CapitalContribution of the Formation General Partner pursuant to the terms of thatcertain Purchase and Sale Agreement dated as of even date herewith, between theFormation General Partner and the Limited Partner.                                      A-1                                    EXHIBIT B                          AGREED VALUE; 704(C) VALUE                                      B-1                                    EXHIBIT C                                 DISCOUNT RATE                                Price/Earnings   Discount                              Multiple        Rate                           --------------   --------                                                                                1                 3%                             2                 5%                             3                 7%                             4                 8%                             5                11%                             6                12%                             7                14%                             8                15%                             9                16%                             10               18%                             11               20%                             12               21%                             13               23%                             14               24%                             15               25%                             16               26%                             17               28%                             18               29%                             19               29%                             20               31%                             21               32%                             22               33%                             23               34%                             24               35%                                       C-1                                 Price/Earnings   Discount                             Multiple         Rate                           --------------   --------                                                                                25               36%                             26               37%                             27               37%                             28               39%                             29               39%                             40               40%                                      C-2                                                                    EXHIBIT 10.2================================================================================                             AMENDED AND RESTATED                       AGREEMENT OF LIMITED PARTNERSHIP                                      OF                             HUB CITY CANADA, L.P.================================================================================                                TABLE OF CONTENTS                                                                                                                    ARTICLE I                                 DEFINED TERMS.............................    1"Act"......................................................................    1"Adjusted Capital Account".................................................    2"Adjusted Capital Account Deficit".........................................    2"Adjusted Property"........................................................    2"Affiliate"................................................................    2"Agreed Value".............................................................    2"Agreement"................................................................    2"Available Cash"...........................................................    2"Average Net After-Tax Profit".............................................    3"Book-Tax Disparities".....................................................    3"Business Day".............................................................    4"Capital Account"..........................................................    4"Capital Contribution".....................................................    4"Carrying Value"...........................................................    4"Certificate"..............................................................    4"Code".....................................................................    4"Common Stock".............................................................    4"Contributed Property".....................................................    4"Depreciation".............................................................    4"Discount Rate"............................................................    5"Event of Dissolution".....................................................    5"Formation General Partners"...............................................    5"Formation Limited Partner"................................................    5"General Partner"..........................................................    5"General Partnership Interest".............................................    5"IRS"......................................................................    5"Incapacity"...............................................................    5"Indemnitee"...............................................................    6"Limited Partner"..........................................................    6"Limited Partnership Interest".............................................    6"Liquidator"...............................................................    6"Net After-Tax Profit".....................................................    6"Net Income"...............................................................    6"Net Loss".................................................................    6"Non-Competition Agreement"................................................    6"Nonrecourse Built-in Gain"................................................    6"Nonrecourse Deductions"...................................................    7"Nonrecourse Liability"....................................................    7                                       i                                                                                 "Original Agreement".......................................................    7"Partner"..................................................................    7"Partner Minimum Gain".....................................................    7"Partner Nonrecourse Debt".................................................    7"Partner Nonrecourse Deductions"...........................................    7"Partnership"..............................................................    7"Partnership Interest".....................................................    7"Partnership Minimum Gain".................................................    7"Partnership Year".........................................................    8"Percentage Interest"......................................................    8"Person"...................................................................    8"Price/Earnings Multiple"..................................................    8"Purchase Amount"..........................................................    8"Purchase Notice"..........................................................    8"Purchase Right"...........................................................    8"Recapture Income".........................................................    8"Regulations"..............................................................    8"Residual Gain" or "Residual Loss".........................................    8"704(c) Value".............................................................    8"Sharing Percentage".......................................................    9"Subsidiary"...............................................................    9"Substituted Limited Partner"..............................................    9"Unrealized Gain"..........................................................    9"Unrealized Loss"..........................................................    9"Value"....................................................................    9                                  ARTICLE II                            ORGANIZATIONAL MATTERS.........................   10Section 2.1     Continuation; Application of Act...........................   10Section 2.2     Name.......................................................   10Section 2.3     Registered Office and Agent; Principal Office..............   10Section 2.4     Term.......................................................   11                                  ARTICLE III                                    PURPOSE................................   11Section 3.1     Purpose and Business.......................................   11Section 3.2     Powers.....................................................   11                                  ARTICLE IV        CAPITAL CONTRIBUTIONS; ISSUANCE OF INTERESTS; CAPITAL ACCOUNTS.....   11Section 4.1     Capital Contributions of the Partners......................   11Section 4.2     Capital Accounts of the Partners...........................   12                                      ii                                                                                                                    ARTICLE V                                 DISTRIBUTIONS.............................   15Section 5.1     Requirement and Characterization of Distributions..........   15Section 5.2     Amounts Withheld...........................................   15Section 5.3     Distributions Upon Liquidation.............................   15                                  ARTICLE VI                                  ALLOCATIONS..............................   15Section 6.1     Allocations For Capital Account Purposes...................   15Section 6.2     Special Allocation Rules...................................   16Section 6.3     Allocations for Tax Purposes...............................   18                                  ARTICLE VII                     MANAGEMENT AND OPERATIONS OF BUSINESS.................   19Section 7.1     Management.................................................   19Section 7.2     Certificate of Limited Partnership.........................   22Section 7.3     Restrictions on General Partner's Authority................   22Section 7.4     Responsibility for Expenses................................   22Section 7.5     Outside Activities of the General Partner..................   23Section 7.6     Contracts with Affiliates..................................   24Section 7.7     Indemnification............................................   24Section 7.8     Liability of the General Partner...........................   26Section 7.9     Other Matters Concerning the General Partner...............   27Section 7.10    Title to Partnership Assets................................   27Section 7.11    Reliance by Third Parties..................................   28                                 ARTICLE VIII                  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS...............   28Section 8.1     Limitation of Liability....................................   28Section 8.2     Management of Business.....................................   28Section 8.3     Outside Activities of Limited Partner......................   28Section 8.4     Priority Among Partners....................................   29Section 8.5     Rights of Limited Partners Relating to the Partnership.....   29Section 8.6     Purchase Right.............................................   30                                  ARTICLE IX                    BOOKS, RECORDS, ACCOUNTING AND REPORTS.................   31Section 9.1     Records and Accounting.....................................   31Section 9.2     Fiscal Year................................................   31Section 9.3     Reports....................................................   31                                   ARTICLE X                                  TAX MATTERS..............................   32                                      iii                                                                                 Section 10.1    Preparation of Tax Returns.................................   32Section 10.2    Tax Elections..............................................   32Section 10.3    Tax Matters Partner........................................   32Section 10.4    Organizational Expenses....................................   33Section 10.5    Withholding................................................   33                                      iv                                                                                                                   ARTICLE XI                           TRANSFERS AND WITHDRAWALS.......................   34Section 11.1    Transfer...................................................   34Section 11.2    Transfer of General Partner's Partnership Interest.........   35Section 11.3    Limited Partners' Rights to Transfer.......................   35Section 11.4    General Provisions.........................................   36                                  ARTICLE XII                             ADMISSION OF PARTNERS.........................   36Section 12.1    Admission of Successor General Partner.....................   36Section 12.2    Admission of Additional Limited Partners...................   37Section 12.3    Amendment of Agreement and Certificate.....................   37                                 ARTICLE XIII                          DISSOLUTION AND LIQUIDATION......................   37Section 13.1    Dissolution................................................   37Section 13.2    Right to Continue the Partnership Business.................   38Section 13.3    Winding Up.................................................   39Section 13.4    Compliance with Timing Requirements of Regulations;                Allowance for Contingent or Unforeseen Liabilities                or Obligations.............................................   40Section 13.5    Deemed Distribution and Recontribution.....................   40Section 13.6    Rights of Limited Partners.................................   41Section 13.7    Notice of Dissolution......................................   41Section 13.8    Cancellation of Certificate of Limited Partnership.........   41Section 13.9    Reasonable Time for Winding-Up.............................   41                                  ARTICLE XIV                 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS..............   41Section 14.1    Amendments             41                                  ARTICLE XV                              GENERAL PROVISIONS...........................   42Section 15.1    Addresses and Notice.......................................   42Section 15.2    Titles and Captions........................................   43Section 15.3    Pronouns and Plurals.......................................   43Section 15.4    Further Action.............................................   43Section 15.5    Binding Effect.............................................   43Section 15.6    Waiver of Partition........................................   43Section 15.7    Entire Agreement...........................................   43Section 15.8    Securities Law Provisions..................................   43Section 15.9    Remedies Not Exclusive.....................................   43Section 15.10   Time.......................................................   43Section 15.11   Creditors..................................................   43                                       v                                                                                 Section 15.12   Waiver.....................................................   44Section 15.13   Execution Counterparts.....................................   44Section 15.14   Applicable Law.............................................   44Section 15.15   Invalidity of Provisions...................................   44                                  ARTICLE XVI                               POWER OF ATTORNEY...........................   44Section 16.1    Power of Attorney..........................................   44                                      vi              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP                                       OF                             HUB CITY CANADA, L.P.     THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as ofMarch 18, 1996, of Hub City Canada, L.P. (the "Partnership") is entered into byand among Hub City Terminals, Inc. (the "General Partner"), a Delawarecorporation, as the General Partner and the persons identified on the signaturepages hereof as the Limited Partners (the "Limited Partners").     WHEREAS, pursuant to the Original Agreement, the Formation GeneralPartners, the Limited Partners and the Formation Limited Partner formed thePartnership;     WHEREAS, the Formation General Partners, the Limited Partners and theFormation Limited Partner desire to admit the General Partner as the generalpartner of the Partnership;     WHEREAS, the Formation General Partners desire to sell their generalpartnership interests in the Partnership to the General Partner and, uponconsummation of such sale, to withdraw as general partners of the Partnership;     WHEREAS, the Formation Limited Partner desires to withdraw as a limitedpartner of the Partnership; and     WHEREAS, the General Partner and the Limited Partners, being all of thePartners of the Partnership, desire to continue the Partnership as a limitedpartnership under the Act, and are entering into this Agreement to amend andrestate the Original Agreement to reflect and confirm the foregoing admissionand withdrawals, and to amend, restate and supersede in its entirety theOriginal Agreement, as hereinafter set forth;     NOW, THEREFORE, in consideration of the premises, the mutual promises andagreements herein made, and other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, the General Partner and theLimited Partners, intending to be legally bound, have agreed and do hereby agreeas follows:                                   ARTICLE I                                 DEFINED TERMS     The following definitions shall be for all purposes, unless otherwiseclearly indicated to the contrary, applied to the terms used in this Agreement.     "Act" means the Delaware Revised Uniform Limited Partnership Act, as it maybe amended from time to time, and any successor to such statute.                                       1      "Adjusted Capital Account" means the Capital Account maintained for each Partner as of the end of each Partnership Year (a) increased by any amounts which such Partner is obligated to restore pursuant to any provision ofthis Agreement or is deemed to be obligated to restore pursuant to thepenultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5)and (b) decreased by the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).The foregoing definition of Adjusted Capital Account is intended to comply withthe provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall beinterpreted consistently therewith.     "Adjusted Capital Account Deficit" means, with respect to any Partner, thedeficit balance, if any, in such Partner's Adjusted Capital Account as of theend of the relevant Partnership Year.     "Adjusted Property" means any property the Carrying Value of which has beenadjusted pursuant to Section 4.2 hereof. Once an Adjusted Property is deemeddistributed by, and recontributed to, the Partnership for Federal income taxpurposes upon a termination thereof pursuant to Section 708 of the Code, suchproperty shall thereafter constitute a Contributed Property until the CarryingValue of such property is further adjusted pursuant to Section 4.2 hereof.     "Affiliate" means, with respect to any Person, (a) any Person directly orindirectly controlling, controlled by or under common control with such Person,(b) any Person owning or controlling 10 percent or more of the outstandingvoting interests of such Person, (c) any Person of which such Person owns orcontrols 10 percent or more of the voting interests, or (d) any officer,director, general partner or trustee of such Person or any Person referred to inclauses (a), (b) and (c) above.     "Agreed Value" means (a) in the case of any Contributed Property set forthin Exhibit B and as of the time of its contribution to the Partnership, theAgreed Value of such property as set forth in Exhibit B; (b) in the case of anyContributed Property not set forth in Exhibit B and as of the time of itscontribution to the Partnership, the 704(c) Value of such property or otherconsideration, reduced by any liabilities either assumed by the Partnership uponsuch contribution or to which such property is subject when contributed, and (c)in the case of any property distributed to a Partner by the Partnership, thePartnership's Carrying Value of such property at the time such property isdistributed, reduced by any indebtedness either assumed by such Partner uponsuch distribution or to which such property is subject at the time ofdistribution as determined under Section 752 of the Code and the Regulationsthereunder.     "Agreement" means this Amended and Restated Agreement of LimitedPartnership, as it may be amended, supplemented or restated from time to time.     "Available Cash" means with respect to any period for which suchcalculation is being made:                                       2           (a) all cash revenues and funds received by the Partnership from     whatever source (excluding the proceeds of any Capital Contribution to the     Partnership pursuant to Section 4.1 hereof) plus the amount of any     reduction (including, without limitation, a reduction resulting because the     General Partner determines such amounts are no longer necessary) in     reserves of the Partnership, which reserves are referred to in clause     (b)(iv) below;          (b) less the sum of the following (except to the extent made with the     proceeds of any Capital Contribution):               (i) all interest, principal and other debt payments made during          such period by the Partnership,               (ii) all cash expenditures (including capital expenditures) made          by the Partnership,               (iii) investments in any entity (including loans made thereto) to          the extent that such investments are not otherwise described in          clauses (b)(i) or (ii), and               (iv) the amount of any increase in reserves established during          such period which the General Partner determines are necessary or          appropriate in its sole and absolute discretion.     Notwithstanding the foregoing, Available Cash shall not include any cashreceived or reductions in reserves, or take into account any disbursements madeor reserves established, after commencement of the dissolution and liquidationof the Partnership.     "Average Net After-Tax Profit" means the average annual Net After-TaxProfit of the Partnership for the most recently completed twelve fiscal quarterperiod. If the Partnership has been existence for less than twelve completefiscal quarters, Average Net After-Tax Profit shall be calculated using the netafter-tax profit of Hub Group Canada, L.L.C. or its predecessors (determined ona basis consistent with that used for determining Net After-Tax Profit for thePartnership) for such completed fiscal quarters, or portions thereof of thePartnership and of Hub Group Canada, L.L.C. or its predecessors as are necessaryto include twelve completed fiscal quarters in the foregoing calculation.     "Book-Tax Disparities" means, with respect to any item of ContributedProperty or Adjusted Property, as of the date of any determination, thedifference between the Carrying Value of such Contributed Property or AdjustedProperty and the adjusted basis thereof for Federal income tax purposes as ofsuch date. A Partner's share of the Partnership's Book-Tax Disparities in all ofits Contributed Property and Adjusted Property will be reflected by thedifference between such Partner's Capital Account balance as maintained pursuantto Section 4.2 and the                                       3 hypothetical balance of such Partner's Capital Account computed as if it hadbeen maintained strictly in accordance with Federal income tax accountingprinciples.     "Business Day" means any day except a Saturday, Sunday or other day onwhich commercial banks in Chicago, Illinois are authorized or required by law toclose.    "Capital Account" means the Capital Account maintained for a Partnerpursuant to Section 4.2 hereof.     "Capital Contribution" means, with respect to any Partner, any cash, cashequivalents or the Agreed Value of Contributed Property which such Partnercontributes or is deemed to contribute to the Partnership pursuant to Section4.1 hereof.     "Carrying Value" means (a) with respect to a Contributed Property orAdjusted Property, the 704(c) Value of such property reduced (but not belowzero) by all Depreciation with respect to such Property charged to the Partners'Capital Accounts and (b) with respect to any other Partnership property, theadjusted basis of such property for Federal income tax purposes, all as of thetime of determination. The Carrying Value of any property shall be adjusted fromtime to time in accordance with Section 4.2 hereof, and to reflect changes,additions or other adjustments to the Carrying Value for dispositions andacquisitions of Partnership properties, as deemed appropriate by the GeneralPartner.     "Certificate" means the Certificate of Limited Partnership relating to thePartnership filed in the office of the Secretary of State of the State ofDelaware, as amended from time to time in accordance with the terms hereof andthe Act.     "Code" means the Internal Revenue Code of 1986, as amended. Any referenceherein to a specific section or sections of the Code shall be deemed to includea reference to any corresponding provision of future law.     "Common Stock" means the shares of Class A Common Stock, $.01 par value pershare, of Hub Group, Inc., a Delaware corporation and the sole stockholder ofthe General Partner.     "Contributed Property" means each property or other asset (but excludingcash), in such form as may be permitted by the Act contributed or deemedcontributed to the Partnership (including for this purpose any property or otherasset deemed contributed to the Partnership on termination and reconstitutionthereof pursuant to Section 708 of the Code). Once the Carrying Value of aContributed Property is adjusted pursuant to Section 4.2 hereof, such propertyshall no longer constitute a Contributed Property for purposes of Section 4.2hereof, but shall be deemed an Adjusted Property for such purposes.     "Depreciation" means for each fiscal year, an amount equal to the Federalincome tax depreciation, amortization, or other cost recovery deductionallowable with respect to an asset for                                       4 such year, except that if the Carrying Value of an asset differs from itsadjusted basis for Federal income tax purposes at the beginning of such year orother period, Depreciation shall be an amount which bears the same ratio to suchbeginning Carrying Value as the Federal income tax depreciation, amortization,or other cost recovery deduction for such year bears to such beginning adjustedtax basis; provided, however, that if the Federal income tax depreciation,amortization, or other cost recovery deduction for such year is zero,Depreciation shall be determined with reference to such beginning Carrying Valueusing any reasonable method selected by the General Partner.     "Discount Rate" shall mean, for any given Price/Earnings Multiple, theDiscount Rate set forth on Exhibit C opposite such Price/Earnings Multiple.     "Event of Dissolution" has the meaning set forth in Section 13.1.     "Formation General Partners" means Hub Canadian Investors, Inc. and O'NeillInc. in their capacities as general partners under the Original Agreement.     "Formation Limited Partner" means David P. Yeager.     "General Partner" means Hub City Terminals, Inc., a Delaware corporation,or its successors as a general partner of the Partnership.     "General Partnership Interest" means a Partnership Interest held by aGeneral Partner that is a general partnership interest.     "IRS" means the Internal Revenue Service, which administers the internalrevenue laws of the United States.     "Incapacity" or "Incapacitated" means, (a) as to any corporation which is aPartner, the filing of a certificate of dissolution, or its equivalent, for thecorporation or the revocation of its charter, (b) as to any partnership which isa Partner, the dissolution and commencement of winding up of the partnership or(c) as to any Partner, the bankruptcy of such Partner. For purposes of thisdefinition, bankruptcy of a Partner shall be deemed to have occurred when (i)the Partner commences a voluntary proceeding seeking liquidation, reorganizationor other relief under any bankruptcy, insolvency or other similar law now orhereafter in effect, (ii) the Partner is adjudged as bankrupt or insolvent, or afinal and nonappealable order for relief under any bankruptcy, insolvency orsimilar law now or hereafter in effect has been entered against the Partner,(iii) the Partner executes and delivers a general assignment for the benefit ofthe Partner's creditors, (iv) the Partner files an answer or other pleadingadmitting or failing to contest the material allegations of a petition filedagainst the Partner in any proceeding of the nature described in clause (ii)above, (v) the Partner seeks, consents to or acquiesces in the appointment of atrustee, receiver or liquidator for the Partner or for all or any substantialpart of the Partner's properties, (vi) any proceeding seeking liquidation,reorganization or other relief under any                                       5 bankruptcy, insolvency or other similar law now or hereafter in effect has notbeen dismissed within 120 days after the commencement thereof, (vii) theappointment without the Partner's consent or acquiescence of a trustee, receiveror liquidator has not been vacated or stayed within 90 days of such appointment,or (viii) an appointment referred to in clause (vii) is not vacated within 90days after the expiration of any such stay.     "Indemnitee" means (a) any Person made a party to a proceeding by reason ofhis status as (i) the General Partner or (ii) an officer of the Partnership or adirector or officer of the General Partner, and (b) such other Persons(including Affiliates of the General Partner or the Partnership) as the GeneralPartner may designate from time to time, in its sole and absolute discretion.     "Limited Partner" means any Person named as a Limited Partner in Exhibit Aattached hereto, as such Exhibit may be amended from time to time, in suchPerson's capacity as a Limited Partner in the Partnership.     "Limited Partnership Interest" means a Partnership Interest of a LimitedPartner in the Partnership representing a fractional part of the PartnershipInterests of all Partners.     "Liquidator" has the meaning set forth in Section 13.3.     "Net After-Tax Profit" means, with respect to each fiscal quarter of thePartnership, Net Income, after provision for income taxes as if the Partnershipwere a taxable corporation under subchapter C of the Code and before adjustmentsfor extraordinary items for each quarter.     "Net Income" means for any taxable period, the excess, if any, of thePartnership's items of income and gain for such taxable period over thePartnership's items of loss and deduction for such taxable period. The itemsincluded in the calculation of Net Income shall be determined in accordance withSection 4.2. Once an item of income, gain, loss or deduction that has beenincluded in the initial computation of Net Income is subjected to the specialallocation rules in Sections 6.2 and 6.3, Net Income or the resulting Net Loss,whichever the case may be, shall be recomputed without regard to such item.     "Net Loss" means for any taxable period, the excess, if any, of thePartnership's items of loss and deduction for such taxable period over thePartnership's items of income and gain for such taxable period. The itemsincluded in the calculation of Net Loss shall be determined in accordance withSection 4.2. Once an item of income, gain, loss or deduction that has beenincluded in the initial computation of Net Loss is subjected to the specialallocation rules in Sections 6.2 and 6.3, Net Loss or the resulting Net Income,whichever the case may be, shall be recomputed without regard to such item.     "Non-Competition Agreement" means that certain Non-Competition Agreementdated as of the date hereof between the Partnership and the Principal.                                       6      "Nonrecourse Built-in Gain" means, with respect to any ContributedProperties or Adjusted Properties that are subject to a mortgage or negativepledge securing a Nonrecourse Liability, the amount of any taxable gain thatwould be allocated to the Partners pursuant to Section 6.3(b) if such propertieswere disposed of in a taxable transaction in full satisfaction of suchliabilities and for no other consideration.     "Nonrecourse Deductions" has the meaning set forth in Regulations Section1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Yearshall be determined in accordance with the rules of Regulations Section 1.704-2(c).     "Nonrecourse Liability" has the meaning set forth in RegulationsSection 1.752-1(a)(2).     "Original Agreement" means that certain Agreement of Limited Partnership,dated as of February 12, 1996, between the Formation General Partners, theLimited Partners and the Formation Limited Partner.     "Partner" means a General Partner or a Limited Partner, and "Partners"means the General Partner and the Limited Partners.     "Partner Minimum Gain" means an amount, with respect to each PartnerNonrecourse Debt, equal to the Partnership Minimum Gain that would result ifsuch Partner Nonrecourse Debt were treated as a Nonrecourse Liability,determined in accordance with Regulations Section 1.704-2(i)(3).     "Partner Nonrecourse Debt" has the meaning set forth in RegulationsSection 1.704-2(b)(4).     "Partner Nonrecourse Deductions" has the meaning set forth inRegulations Section 1.704-2(i)(2), and the amount of Partner NonrecourseDeductions with respect to a Partner Nonrecourse Debt for a Partnership Yearshall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).     "Partnership" means the limited partnership formed under the Act andcontinued pursuant to this Agreement, and any successor thereto.     "Partnership Interest" means an ownership interest in the Partnershiprepresenting a Capital Contribution by a Partner and includes any and allbenefits to which the holder of such a Partnership Interest may be entitled asprovided in this Agreement, together with all obligations of such Person tocomply with the terms and provisions of this Agreement.     "Partnership Minimum Gain" has the meaning set forth in RegulationsSection 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well asany net increase or decrease                                       7 in Partnership Minimum Gain, for a Partnership Year shall be determined inaccordance with the rules of Regulations Section 1.704-2(d).     "Partnership Year" means the fiscal year of the Partnership, which shall bethe calendar year.     "Percentage Interest" means, as to a Partner, its interest in thePartnership as specified in Exhibit A attached hereto, as such Exhibit may beamended from time to time.     "Person" means an individual or a corporation, partnership, trust,unincorporated organization, association or other entity.     "Price/Earnings Multiple" means the average of (i) the quotient obtained bydividing (A) the Value by (B) the aggregate net income per share of Common Stockfor the four-quarter period immediately preceding the date of calculation, and(ii) the aggregate projected price/earnings ratio per share of Common Stock asreported by First Call for the four-quarter period immediately following thedate of calculation.     "Principal" means Steven R. Gove, an employee of the Partnership.     "Purchase Amount" means an amount determined by multiplying (i) the productof (a) the Price/Earnings Multiple times (b) the Average Net After-Tax Profit by(ii) one (1) minus the Discount Rate.     "Purchase Notice" has the meaning set forth in Section 8.6(b).     "Purchase Right" has the meaning set forth in Section 8.6(a).     "Recapture Income" means any gain recognized by the Partnership(computed without regard to any adjustment required by Section 734 or Section743 of the Code) upon the disposition of any property or asset of thePartnership, which gain is characterized as ordinary income because itrepresents the recapture of deductions previously taken with respect to suchproperty or asset.     "Regulations" means the Income Tax Regulations promulgated under the Code,as such regulations may be amended from time to time (including correspondingprovisions of succeeding regulations).     "Residual Gain" or "Residual Loss" means any item of gain or loss, as thecase may be, of the Partnership recognized for Federal income tax purposesresulting from a sale, exchange or other disposition of Contributed Property orAdjusted Property, to the extent such item of gain or loss is not allocatedpursuant to Section 6.3(b)(1)(i) or 6.3(b)(2)(i) to eliminate Book-TaxDisparities.                                       8      "704(c) Value" of any Contributed Property means the value of such propertyas set forth in Exhibit B, or if no value is set forth in Exhibit B, the fairmarket value of such property or other consideration at the time of contributionas determined by the General Partner using such reasonable method of valuationas it may adopt; provided, however, that the 704(c) Value of any property deemedcontributed to the Partnership for Federal income tax purposes upon terminationand reconstitution thereof pursuant to Section 708 of the Code shall bedetermined in accordance with Section 4.2 hereof. Subject to Section 4.2 hereof,the General Partner shall use such method as it deems reasonable and appropriateto allocate the aggregate of the 704(c) Value of Contributed Properties amongeach separate property on a basis proportional to its fair market value.     "Sharing Percentage" means, with respect to any Partner, the percentage setforth opposite such Partner's name on Exhibit A hereto.     "Subsidiary" means, with respect to any Person, any corporation or otherentity of which a majority of (a) the voting power of the voting equitysecurities or (b) the outstanding equity interests is owned, directly orindirectly, by such Person.     "Substituted Limited Partner" means a Person who is admitted as a LimitedPartner to the Partnership pursuant to Section 11.3.     "Unrealized Gain" attributable to any item of Partnership property means,as of any date of determination, the excess, if any, of (a) the fair marketvalue of such property (as determined under Section 4.2 hereof) as of such date,over (b) the Carrying Value of such property (prior to any adjustment to be madepursuant to Section 4.2 hereof) as of such date.     "Unrealized Loss" attributable to any item of Partnership property means,as of any date of determination, the excess, if any, of (a) the Carrying Valueof such property (prior to any adjustment to be made pursuant to Section 4.2hereof) as of such date, over (b) the fair market value of such property (asdetermined under Section 4.2 hereof) as of such date.     "Value" means, with respect to a share of Common Stock, the average of thedaily market price for the thirty (30) consecutive trading days immediatelypreceding the date of determination. The market price for each such trading dayshall be: (a) if the shares of Common Stock are listed or admitted to trading onany securities exchange or the NASDAQ-National Market System, the closing price,regular way, on such day, or if no such sale takes place on such day, theaverage of the closing bid and asked prices on such day, (b) if the shares ofCommon Stock are not listed or admitted to trading on any securities exchange orthe NASDAQ-National Market System, the last reported sale price on such day or,if no sale takes place on such day, the average of the closing bid and askedprices on such day, as reported by a reliable quotation source designated by theGeneral Partner, or (c) if the shares of Common Stock are not listed or admittedto trading on any securities exchange or the NASDAQ-National Market System andno such last reported sale price or closing bid and asked prices are available,the average of the reported high bid and low asked prices on such day, asreported by a reliable quotation source designated by the General                                       9 Partner, or if there shall be no bid and asked prices on such day, the averageof the high bid and low asked prices, as so reported, on the most recent day(not more than 30 days prior to the date in question) for which prices have beenso reported; provided, that if there are no bid and asked prices reported duringthe 30 days prior to the date in question, the Value of the shares of CommonStock shall be determined by the board of directors of the sole stockholder ofthe General Partner acting in good faith on the basis of such quotations andother information as it considers, in its reasonable judgment, appropriate.                                   ARTICLE II                             ORGANIZATIONAL MATTERS     Section 2.1  Continuation; Application of Act.                  --------------------------------           (a) Continuation of Partnership. The General Partner and the Limited     Partners do hereby continue the Partnership as a limited partnership     according to all of the terms and provisions of this Agreement and     otherwise in accordance with the Act. The General Partner is the sole     general partner and the Limited Partners are the sole limited partners of     the Partnership. All Partnership profits, losses and distributive shares of     tax items accruing prior to the effectiveness of this Agreement shall be     allocated in accordance with, and the respective rights and obligations of     partners with respect to the period prior to the effectiveness of this     Agreement shall be governed by, the Original Agreement. The Formation     General Partners hereby withdraw from the Partnership. The Formation     Limited Partner hereby withdraws from the Partnership in exchange for a     return of his original capital contribution.          (b) Application of Act. The Partnership is a limited partnership     subject to the provisions of the Act and the terms and conditions set forth     in this Agreement. Except as expressly provided herein to the contrary, the     rights and obligations of the Partners and the administration and     termination of the Partnership shall be governed by the Act. No Partner has     any interest in any Partnership property, and the Partnership Interest of     each Partner shall be personal property for all purposes.     Section 2.2 Name. The name of the Partnership is Hub City Canada, L.P. ThePartnership's business may be conducted under any other name or names deemedadvisable by the General Partner, including the name of the General Partner orany Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." orsimilar words or letters shall be included in the Partnership's name wherenecessary for the purposes of complying with the laws of any jurisdiction thatso requires. The General Partner in its sole and absolute discretion may changethe name of the Partnership at any time and from time to time and shall notifythe Limited Partners of such change in the next regular communication to theLimited Partners.                                       10      Section 2.3 Registered Office and Agent; Principal Office. The address ofthe registered office of the Partnership in the State of Delaware is located at1209 Orange Street, Wilmington, County of New Castle, and the registered agentfor service of process on the Partnership in the State of Delaware at suchregistered office is The Corporation Trust Company. The principal office of thePartnership is located at Hub Group, Inc., 377 East Butterfield Road, Suite 700,Lombard, Illinois 60148, or such other place as the General Partner may fromtime to time designate by notice to the Limited Partners. The Partnership maymaintain offices at such other place or places within or outside the State ofIllinois as the General Partner deems advisable.     Section 2.4 Term. The term of the Partnership shall commence on the datehereof, and shall continue until December 31, 2096, unless it is dissolvedsooner pursuant to the provisions of Article XIII or as otherwise provided bylaw.                                  ARTICLE III                                    PURPOSE     Section 3.1 Purpose and Business. The purpose and nature of the business tobe conducted by the Partnership is (a) to conduct any business that may belawfully conducted by a limited partnership organized pursuant to the Act, (b)to enter into any partnership, joint venture or other similar arrangement toengage in any of the foregoing or the ownership of interests in any entityengaged in any of the foregoing and (c) to do anything necessary or incidentalto the foregoing.     Section 3.2 Powers. The Partnership is empowered to do any and all acts andthings necessary, appropriate, proper, advisable, incidental to or convenientfor the furtherance and accomplishment of the purposes and business describedherein and for the protection and benefit of the Partnership; provided that thePartnership shall not take, or refrain from taking, any action which, in thejudgment of the General Partner, in its sole and absolute discretion, couldviolate any law or regulation of any governmental body or agency havingjurisdiction over the General Partner or its securities, unless such action (orinaction) shall have been specifically consented to by the General Partner inwriting.                                  ARTICLE IV                 CAPITAL CONTRIBUTIONS; ISSUANCE OF INTERESTS;                               CAPITAL ACCOUNTS     Section 4.1  Capital Contributions of the Partners.                  -------------------------------------           (a) Initial Capital Contributions. The General Partner shall succeed     to the capital contribution of the Formation General Partners. At the time     of the execution of this Agreement, the Partners shall make, shall have     made or shall be deemed to have made the Capital Contributions set forth in     Exhibit A to this Agreement. The Partners shall have a Percentage Interest     in the Partnership as set forth in Exhibit A.                                       11           (b) Additional Capital Contributions. No Partner shall be assessed or,     except as provided for in Section 13.4(b) below, and except for any such     amounts which a Limited Partner may be obligated to repay under Section     10.5, be required to contribute additional funds or other property to the     Partnership. Any additional funds or other property required by the     Partnership, as determined by the General Partner in its sole discretion,     may, at the option of the General Partner and without an obligation to do     so (except as provided for in Section 13.4(b) below), be loaned by the     General Partner to the Partnership on such terms as the General Partner     deems appropriate.          (c) Return of Capital Contributions. Except as otherwise expressly     provided herein, the Capital Contribution of a Limited Partner will be     returned to that Partner only in the manner and to the extent provided in     Article V and Article XIII hereof, and no Partner may withdraw from the     Partnership or otherwise have any right to demand or receive the return of     its Capital Contribution to the Partnership (as such), except as     specifically provided herein. Under circumstances requiring a return of any     Capital Contribution, no Partner shall have the right to receive property     other than cash, except as specifically provided herein. No Partner shall     be entitled to interest on any Capital Contribution or Capital Account     notwithstanding any disproportion therein as between the Partners. Except     as specifically provided herein, the General Partner shall not be liable     for the return of any portion of the Capital Contribution of the Limited     Partners, and the return of such Capital Contributions shall be made solely     from Partnership assets.          (d) Liability of Limited Partners. The Limited Partners shall have no     further personal liability to contribute money to, or in respect of, the     liabilities or the obligations of the Partnership, nor shall the Limited     Partners be personally liable for any obligations of the Partnership,     except as otherwise provided in this Article IV or in the Act. The Limited     Partners shall not be required to make any contributions to the capital of     the Partnership other than their initial Capital Contribution.     Section 4.2  Capital Accounts of the Partners.                  --------------------------------           (a) General. The Partnership shall maintain for each Partner a     separate Capital Account in accordance with the rules of Regulations     Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (a)     the amount of all Capital Contributions made by such Partner to the     Partnership pursuant to this Agreement and (b) all items of Partnership     income and gain (including income and gain exempt from tax) computed in     accordance with Section 4.2(b) hereof and allocated to such Partner     pursuant to Sections 6.1 and 6.2 of this Agreement, and decreased by (i)     the amount of cash or Agreed Value of all actual and deemed distributions     of cash or property made to such Partner pursuant to this Agreement and     (ii) all items of Partnership deduction and loss computed in accordance     with Section 4.2(b) hereof and allocated to such Partner pursuant to     Sections 6.1 and 6.2 of this Agreement.                                      12           (b) Income, Gains, Deductions and Losses. For purposes of computing     the amount of any item of income, gain, loss or deduction to be reflected     in the Partners' Capital Accounts, unless otherwise specified in this     Agreement, the determination, recognition and classification of any such     item shall be the same as its determination, recognition and classification     for Federal income tax purposes determined in accordance with Section     703(a) of the Code (for this purpose all items of income, gain, loss or     deduction required to be stated separately pursuant to Section 703(a)(1) of     the Code shall be included in taxable income or loss), with the following     adjustments:               (1) Except as otherwise provided in Regulations Section 1.704-          1(b)(2)(iv)(m), the computation of all items of income, gain, loss and          deduction shall be made without regard to any election under Section          754 of the Code which may be made by the Partnership; provided that          the amounts of any adjustments to the adjusted bases of the assets of          the Partnership made pursuant to Section 734 of the Code as a result          of the distribution of property by the Partnership to a Partner (to          the extent that such adjustments have not previously been reflected in          the Partners' Capital Accounts) shall be reflected in the Capital          Accounts of the Partners in the manner and subject to the limitations          prescribed in Regulations Section 1.704-1(b)(2)(iv)(m).               (2) The computation of all items of income, gain, loss and          deduction shall be made without regard to the fact that items          described in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not          includable in gross income or are neither currently deductible nor          capitalized for Federal income tax purposes.               (3) Any income, gain or loss attributable to the taxable          disposition of any Partnership property shall be determined as if the          adjusted basis of such property as of such date of disposition were          equal in amount to the Partnership's Carrying Value with respect to          such property as of such date.               (4) In lieu of the depreciation, amortization, and other cash          recovery deductions taken into account in computing such taxable          income or loss, there shall be taken into account Depreciation for          such fiscal year.               (5) In the event the Carrying Value of any Partnership Asset is          adjusted pursuant to Section 4.2(d) hereof, the amount of any such          adjustment shall be taken into account as gain or loss from the          disposition of such asset.               (6) Any items specially allocated under Section 6.3 hereof shall          not be taken into account.                                   (c) Transfers of Partnership Interests. A transferee of Partnership     Interests shall succeed to a pro rata portion of the Capital Account of the     transferor; provided,                                      13 however, that, if the transfer causes a termination of the Partnership underSection 708(b)(1)(B) of the Code, the Partnership's properties shall be deemedto have been distributed in liquidation of the Partnership to the Partners(including the transferee of Partnership Interests) and recontributed by suchPartners in reconstitution of the Partnership.  In such event, the CarryingValues of the Partnership properties shall be adjusted immediately prior to suchdeemed distribution pursuant to Section 4.2(d)(2) hereof. The Capital Accountsof such reconstituted Partnership shall be maintained in accordance with theprinciples of this Section 4.2.          (d)  Unrealized Gains and Losses.               ---------------------------                (1) Consistent with the provisions of Regulations Section 1.704-          1(b)(2)(iv)(f), and as provided in Section 4.2(d)(2), the Carrying          Values of all Partnership assets shall be adjusted upward or downward          to reflect any Unrealized Gain or Unrealized Loss attributable to such          Partnership property, as of the times of the adjustments provided in          Section 4.2(d)(2) hereof, as if such Unrealized Gain or Unrealized          Loss had been recognized on an actual sale of each such property and          allocated pursuant to Section 6.1 of the Agreement.               (2) Such adjustments shall be made as of the following times: (i)          immediately prior to the acquisition of an additional interest in the          Partnership by any new or existing Partner in exchange for more than a          de minimis Capital Contribution; (ii) immediately prior to the          distribution by the Partnership to a Partner of more than a de minimis          amount of Property as consideration for an interest in the          Partnership; and (iii) immediately prior to the liquidation of the          Partnership or the General Partner's interest in the Partnership          within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g);          provided, however, that adjustments pursuant to clauses (a) and (b)          above shall be made only if the General Partner reasonably determines          that such adjustments are necessary or appropriate to reflect the          relative economic interests of the Partners in the Partnership.               (3) In accordance with Regulations Section 1.704-1(b)(2)(iv)(e)          the Carrying Values of Partnership assets distributed in kind shall be          adjusted upward or downward to reflect any Unrealized Gain or          Unrealized Loss attributable to such Partnership property, as of the          time any such asset is distributed.               (4) In determining such Unrealized Gain or Unrealized Loss the          aggregate cash amount and fair market value of all Partnership assets          (including cash or cash equivalents) shall be determined by the          General Partner using such reasonable method of valuation as it may          adopt, or in the case of a liquidating distribution pursuant to          Article XIII of this Agreement, be determined and allocated by the          Liquidator using such reasonable methods of valuation as it may adopt.          The General Partner, or the Liquidator, as the case may be, shall          allocate                                       14           such aggregate value among the assets of the Partnership (in such          manner as it determines in its sole and absolute discretion to arrive          at a fair market value for individual properties).          (e) Modification by General Partner. The provisions of this Agreement     relating to the maintenance of Capital Accounts are intended to comply with     Regulations Section 1.704-1(b), and shall be interpreted and applied in a     manner consistent with such Regulations. In the event the General Partner     shall determine that it is prudent to modify the manner in which the     Capital Accounts, or any debits or credits thereto (including, without     limitation, debits or credits relating to liabilities which are secured by     contributed or distributed property or which are assumed by the     Partnership, the General Partner or any Limited Partner) are computed in     order to comply with such Regulations, the General Partner may make such     modification; provided that it will not have a material effect on the     amounts distributable to any Person pursuant to Article XIII of this     Agreement upon the liquidation of the Partnership. The General Partner also     shall (a) make any adjustments that are necessary or appropriate to     maintain equality between the Capital Accounts of the Partners and the     amount of Partnership capital reflected on the Partnership's balance sheet,     as computed for book purposes, in accordance with Regulations Section      1.704-1(b)(2)(iv)(q), and (b) make any appropriate modifications in the     event unanticipated events might otherwise cause this Agreement not to     comply with Regulations Section 1.704-1(b).                                   ARTICLE V                                 DISTRIBUTIONS     Section 5.1 Requirement and Characterization of Distributions. The GeneralPartner shall distribute within 90 days after the end of each calendar quarteran amount equal to 100% of Available Cash during such quarter to the Partners inproportion to their respective Sharing Percentages.     Section 5.2 Amounts Withheld. All amounts withheld pursuant to the Code orany provisions of any state or local tax law and Section 10.5 hereof withrespect to any allocation, payment or distribution to any Partners shall betreated as amounts distributed to such Partners pursuant to Section 5.1 for allpurposes under this Agreement.     Section 5.3 Distributions Upon Liquidation. Proceeds from any sale or otherdisposition of all or substantially all of the assets of the Partnership or arelated series of transactions that, taken together, results in the sale orother disposition of all or substantially all of the assets of the Partnershipshall be distributed to the Partners in accordance with Section 13.3.                                      15                                   ARTICLE VI                                  ALLOCATIONS     Section 6.1 Allocations For Capital Account Purposes. For purposes ofmaintaining the Capital Accounts and in determining the rights of the Partnersamong themselves, the Partnership's items of income, gain, loss and deduction(computed in accordance with Section 4.2 hereof) shall be allocated among thePartners for each taxable year (or portion thereof) as provided herein below.          (a) Net Income. After giving effect to the special allocations set     forth in Section 6.2 below, Net Income shall be allocated (i) first, to the     General Partner to the extent that, on a cumulative basis, Net Losses     previously allocated to the General Partner pursuant to the last sentence     of Section 6.1(b) exceed Net Income previously allocated to the General     Partner pursuant to this clause (a) of Section 6.1(a), and (ii) thereafter,     Net Income shall be allocated in proportion to the respective Sharing     Percentages of the Partners.          (b) Net Losses. After giving effect to the special allocations set     forth in Section 6.2 below, Net Losses shall be allocated in proportion to     the respective Percentage Interests of the Partners; provided that Net     Losses shall not be allocated to the Limited Partners pursuant to this     Section 6.1(b) to the extent that such allocation would cause the Limited     Partners to have an Adjusted Capital Account Deficit at the end of such     taxable year (or increase any existing Adjusted Capital Account Deficit).     All Net Losses in excess of the limitations set forth in the preceding     sentence of this Section 6.1(b) shall be allocated to the General Partner.          (c) Nonrecourse Liabilities. For purposes of Regulations Section      1.752-3(a), the Partners agree that Nonrecourse Liabilities of the     Partnership in excess of the sum of (i) the amount of Partnership Minimum     Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be     allocated among the Partners in proportion to their respective Percentage     Interests.          (d) Gains. Any gain allocated to the Partners upon the sale or other     taxable disposition of any Partnership asset shall to the extent possible,     after taking into account other required allocations of gain pursuant to     Section 6.2 below, be characterized as Recapture Income in the same     proportions and to the same extent as such Partners have been allocated any     deductions directly or indirectly giving rise to the treatment of such     gains as Recapture Income.     Section 6.2 Special Allocation Rules. Notwithstanding any other provisionof this Agreement, the following special allocations shall be made in thefollowing order:                                      16           (a) Minimum Gain Chargeback. Notwithstanding any other provisions of     Article VI, if there is a net decrease in Partnership Minimum Gain during     any Partnership Year, each Partner shall be specially allocated items of     Partnership income and gain for such year (and, if necessary, subsequent     years) in an amount equal to such Partner's share of the net decrease in     Partnership Minimum Gain, as determined under Regulations Section 1.704-     2(g). Allocations pursuant to the previous sentence shall be made in     proportion to the respective amounts required to be allocated to each     Partner pursuant thereto. The items to be so allocated shall be determined     in accordance with Regulations Section 1.704-2(f)(6). This Section 6.2(a)     is intended to comply with the minimum gain chargeback requirements in     Regulations Section 1.704-2(f) and for purposes of this Section 6.2(a)     only, each Partner's Adjusted Capital Account Deficit shall be determined     prior to any other allocations pursuant to Section 6.1 of this Agreement     with respect to such fiscal year and without regard to any decrease in     Partner Minimum Gain during such fiscal year.          (b) Partner Minimum Gain Chargeback. Notwithstanding any other     provision of Article VI (except Section 6.2(a) hereof), if there is a net     decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt     during any Partnership fiscal year, each Partner who has a share of the     Partner Minimum Gain attributable to such Partner Nonrecourse Debt,     determined in accordance with Regulations Section 1.704-2(i)(5), shall be     specially allocated items of Partnership income and gain for such year     (and, if necessary, subsequent years) in an amount equal to such Partner's     share of the net decrease in Partner Minimum Gain attributable to such     Partner Nonrecourse Debt, determined in accordance with Regulations Section     1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made     in proportion to the respective amounts required to be allocated to each     Partner pursuant thereto. The items to be so allocated shall be determined     in accordance with Regulations Section 1.704-2(i)(4). This Section 6.2(b)     is intended to comply with the minimum gain chargeback requirement in such     Section of the Regulations and shall be interpreted consistently therewith.     Solely for purposes of this Section 6.2(b), each Partner's Adjusted Capital     Account Deficit shall be determined prior to any other allocations pursuant     to Article VI of this Agreement with respect to such fiscal year, other     than allocations pursuant to Section 6.2(a) hereof.          (c) Qualified Income Offset. In the event any Partner unexpectedly     receives any adjustments, allocations or distributions described in     Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or     1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations     required under Sections 6.2(a) and 6.2(b) hereof, such Partner has an     Adjusted Capital Account Deficit, items of Partnership income and gain     shall be specially allocated to such Partner in an amount and manner     sufficient to eliminate, to the extent required by the Regulations, its     Adjusted Capital Account Deficit created by such adjustments, allocations     or distributions as quickly as possible.          (d) Nonrecourse Deductions. Nonrecourse Deductions for any taxable     period shall be allocated in proportion to the respective Percentage     Interests of the Partners. If                                      17      the General Partner determines in its good faith discretion that the     Partnership's Nonrecourse Deductions must be allocated in a different ratio     to satisfy the safe harbor requirements of the Regulations promulgated     under Section 704(b) of the Code, the General Partner is authorized, upon     notice to the Limited Partners, to revise the prescribed ratio to the     numerically closest ratio which does satisfy such requirements.          (e) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions     for any fiscal year shall be specially allocated to the Partner who bears     the economic risk of loss with respect to the Partner Nonrecourse Debt to     which such Partner Nonrecourse Deductions are attributable in accordance     with Regulations Section 1.704-2(i)(2).          (f) Code Section 754 Adjustments. To the extent an adjustment to the     adjusted tax basis of any Partnership asset pursuant to Section 734(b) or     743(b) of the Code is required, pursuant to Regulations Section 1.704-     1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,     the amount of such adjustment to the Capital Accounts shall be treated as     an item of gain (if the adjustment increases the basis of the asset) or     loss (if the adjustment decreases such basis), and such item of gain or     loss shall be specially allocated to the Partners in a manner consistent     with the manner in which their Capital Accounts are required to be adjusted     pursuant to such Section of the Regulations.     Section 6.3  Allocations for Tax Purposes.                  ----------------------------           (a) General. Except as otherwise provided in this Section 6.3, for     Federal income tax purposes, each item of income, gain, loss and deduction     shall be allocated among the Partners in the same manner as its correlative     item of "book" income, gain, loss or deduction is allocated pursuant to     Sections 6.1 and 6.2 of this Agreement.          (b) To Eliminate Book-Tax Disparities. In an attempt to eliminate      Book-Tax Disparities attributable to a Contributed Property or Adjusted     Property, items of income, gain, loss, and deduction shall be allocated for     Federal income tax purposes among the Partners as follows:               (1) (i) In the case of a Contributed Property, such items          attributable thereto shall be allocated among the Partners consistent          with the principles of Section 704(c) of the Code that takes into          account the variation between the 704(c) Value of such property and          its adjusted basis at the time of contribution, and (ii) any item of          Residual Gain or Residual Loss attributable to a Contributed Property          shall be allocated among the Partners in the same manner as its          correlative item of "book" gain or loss is allocated pursuant to          Sections 6.1 and 6.2 of this Agreement.               (2) (i) In the case of an Adjusted Property, such items shall (A)          first, be allocated among the Partners in a manner consistent with the          principles of                                      18           Section 704(c) of the Code to take into account the Unrealized Gain or          Unrealized Loss attributable to such property and the allocations          thereof pursuant to Section 4.2 and (B) second, in the event such          property was originally a Contributed Property, be allocated among the          Partners in a manner consistent with Section 6.3(b)(1)(i), and (ii)          any item of Residual Gain or Residual Loss attributable to an Adjusted          Property shall be allocated among the Partners in the same manner as          its correlative item of "book" gain or loss is allocated pursuant to          Sections 6.1 and 6.2 of this Agreement.               (3) All other items of income, gain, loss and deduction shall be          allocated among the Partners in the same manner as their correlative          item of "book" gain or loss is allocated pursuant to Sections 6.1 and          6.2 of this Agreement.          (c) Power of General Partner to Elect Method. To the extent Treasury     Regulations promulgated pursuant to Section 704(c) of the Code permit a     partnership to utilize alternative methods to eliminate the disparities     between the agreed value of property and its adjusted basis, the General     Partner shall have the authority to elect the method to be used by the     Partnership and such election shall be binding on all Partners.                                  ARTICLE VII                     MANAGEMENT AND OPERATIONS OF BUSINESS     Section 7.1  Management.                  ----------           (a) Powers of General Partner. Except as otherwise expressly provided     in this Agreement, all management powers over the business and affairs of     the Partnership are exclusively vested in the General Partner, and the     Limited Partners shall have no right to participate in or exercise control     or management power over the business and affairs of the Partnership.     Notwithstanding anything to the contrary in this Agreement, the General     Partner may not be removed by the Limited Partners with or without cause.     In addition to the powers now or hereafter granted a general partner of a     limited partnership under applicable law or which are granted to the     General Partner under any other provision of this Agreement, the General     Partner, subject to Section 7.3 hereof, shall have full power and authority     to do all things deemed necessary or desirable by it to conduct the     business of the Partnership, to exercise all powers set forth in Section     3.2 hereof and to effectuate the purposes set forth in Section 3.1 hereof,     including, without limitation:               (1) the making of any expenditures, the lending or borrowing of          money, the assumption or guarantee of, or other contracting for,          indebtedness and other liabilities, the issuance of evidences of          indebtedness (including the securing of same by mortgage, deed of          trust or other lien or encumbrance on the Partnership's                                      19           assets) and the incurring of any obligations it deems necessary for          the conduct of the activities of the Partnership;               (2) the making of tax, regulatory and other filings, or rendering          of periodic or other reports to governmental or other agencies having          jurisdiction over the business or assets of the Partnership;               (3) the acquisition, disposition, sale, conveyance, mortgage,          pledge, encumbrance, hypothecation, contribution or exchange of any          assets of the Partnership or the merger or other combination of the          Partnership with or into another entity on such terms as the General          Partner deems proper;               (4) the use of the assets of the Partnership (including, without          limitation, cash on hand) for any purpose consistent with the terms of          this Agreement and on any terms it sees fit, including, without          limitation, the financing of the conduct of the operations of the          General Partner, the Partnership or any of the Partnership's          Subsidiaries, the lending of funds to other Persons (including the          Partnership's Subsidiaries) and the repayment of obligations of the          Partnership and its Subsidiaries and any other Person in which it has          an equity investment and the making of capital contributions to its          Subsidiaries, the holding of any real, personal and mixed property of          the Partnership in the name of the Partnership or in the name of a          nominee or trustee (subject to Section 7.10), the creation, by grant          or otherwise, of easements or servitudes, and the performance of any          and all acts necessary or appropriate to the operation of the          Partnership assets including, but not limited to, applications for          rezoning, objections to rezoning, constructing, altering, improving,          repairing, renovating, rehabilitating, razing, demolishing or          condemning any improvements or property of the Partnership;               (5) the negotiation, execution, and performance of any contracts,          conveyances or other instruments (including with Affiliates of the          Partnership to the extent provided in Section 7.6) that the General          Partner considers useful or necessary to the conduct of the          Partnership's operations or the implementation of the General          Partner's powers under this Agreement;               (6) the opening and closing of bank accounts, the investment of          Partnership funds in securities, certificates of deposit and other          instruments, and the distribution of Partnership cash or other          Partnership assets in accordance with this Agreement;               (7) the selection and dismissal of employees of the Partnership          or the General Partner (including, without limitation, employees          having titles such as "president," "vice president," "secretary" and          "treasurer"), and the engagement and dismissal of agents, outside          attorneys, accountants, engineers, appraisers,                                      20           consultants, contractors and other professionals on behalf of the          General Partner or the Partnership and the determination of their          compensation and other terms of employment or hiring;               (8) the maintenance of such insurance for the benefit of the          Partnership and the Partners as it deems necessary or appropriate;               (9) the formation of, or acquisition of an interest in, and the          contribution of property to, any further limited or general          partnerships, joint ventures or other relationships that it deems          desirable (including, without limitation, the acquisition of interests          in, and the contribution of property to, its Subsidiaries and any          other Person in which it has an equity investment from time to time);               (10) the control of any matters affecting the rights and          obligations of the Partnership, including the conduct of litigation          and the incurring of legal expense and the settlement of claims and          litigation, and the indemnification of any Person against liabilities          and contingencies to the extent permitted by law;               (11) the undertaking of any action in connection with the          Partnership's direct or indirect investment in its Subsidiaries or any          other Person (including, without limitation, the contribution or loan          of funds by the Partnership to such Persons);               (12) the determination of the fair market value of any          Partnership property distributed in kind using such reasonable method          of valuation as it may adopt; and               (13) the execution, acknowledgement and delivery of any and all          documents and instruments to effectuate any or all of the foregoing.          (b) No Approval Required for Above Powers.  The Limited Partners agree     that the General Partner is authorized to execute, deliver and perform the     above-mentioned agreements and transactions on behalf of the Partnership     without any further act, approval or vote of the Partners, notwithstanding     any other provision of this Agreement, the Act or any applicable law, rule     or regulation. The execution, delivery or performance by the General     Partner or the Partnership of any agreement authorized or permitted under     this Agreement shall not constitute a breach by the General Partner of any     duty that the General Partner may owe the Partnership or the Limited     Partners or any other Persons under this Agreement or of any duty stated or     implied by law or equity.                                      21           (c) Insurance.  At all times from and after the date hereof, the     General Partner may cause the Partnership to obtain and maintain casualty,     liability and other insurance on the properties of the Partnership and     liability insurance for the Indemnitees hereunder.          (d) Working Capital Reserves.  At all times from and after the date     hereof, the General Partner may cause the Partnership to establish and     maintain working capital reserves for the Partnership in such amounts as     the General Partner, in its sole and absolute discretion, deems appropriate     and reasonable from time to time.          (e) No Obligation to Consider Tax Consequences to Limited Partners. In     exercising its authority under this Agreement, the General Partner may, but     shall be under no obligation to, take into account the tax consequences to     any Partner of any action taken by it. The General Partner and the     Partnership shall not have liability to the Limited Partners under any     circumstances as a result of an income tax liability incurred by the     Limited Partners as a result of an action (or inaction) by the General     Partner pursuant to its authority under this Agreement.     Section 7.2  Certificate of Limited Partnership.  To the extent that suchaction is determined by the General Partner to be reasonable and necessary orappropriate, the General Partner shall file amendments to and restatements ofthe Certificate and do all the things to maintain the Partnership as a limitedpartnership (or a partnership in which the limited partners have limitedliability) under the laws of the State of Delaware and each other jurisdictionin which the Partnership may elect to do business or own property. Subject tothe terms of Section 8.5(a)(4) hereof, the General Partner shall not berequired, before or after filing, to deliver or mail a copy of the Certificate,as it may be amended or restated from time to time, to the Limited Partners. TheGeneral Partner shall use all reasonable efforts to cause to be filed such othercertificates or documents as may be reasonable and necessary or appropriate forthe formation, continuation, qualification and operation of a limitedpartnership (or a partnership in which the Limited Partners have limitedliability) in the State of Delaware and any other jurisdiction in which thePartnership may elect to do business or own property. Section      7.3  Restrictions on General Partner's Authority.  The General Partner maynot, without the written consent of the Limited Partners, take any action incontravention of this Agreement, including, without limitation:          (a) take any action that would make it impossible to carry on the      ordinary business of the Partnership, except as otherwise provided in this      Agreement;          (b) possess Partnership property, or assign any rights in specific     Partnership property, for other than a Partnership purpose except as     otherwise provided in this Agreement;                                      22           (c)  admit a Person as a Partner, except as otherwise provided in this     Agreement; or          (d)  perform any act that would subject the Limited Partners to     liability as a general partner in any jurisdiction or any other liability     except as provided herein or under the Act.     Section 7.4  Responsibility for Expenses.          (a)  No Compensation. Except as provided in this Section 7.4 and     elsewhere in this Agreement (including the provisions of Articles V and VI     regarding distributions, payments and allocations to which it may be     entitled), the General Partner shall not be compensated for its services as     general partner of the Partnership.          (b)  Responsibility for Ownership and Operation Expenses. The     Partnership shall be responsible for and shall pay all expenses relating to     the Partnership's ownership of its assets, and the operation of, or for the     benefit of, the Partnership, and the General Partner shall be reimbursed on     a monthly basis, or such other basis as the General Partner may determine     in its sole and absolute discretion, for all expenses it incurs relating to     the Partnership's ownership of its assets and the operation of, or for the     benefit of, the Partnership; provided that the amount of any such     reimbursement shall be reduced by any interest earned by the General     Partner with respect to bank accounts or other instruments held by it as     permitted in Section 7.5(a). Such reimbursements shall be in addition to     any reimbursement to the General Partner as a result of indemnification     pursuant to Section 7.7 hereof.     Section 7.5  Outside Activities of the General Partner.          (a)  The General Partner shall not be required to act hereunder as its     sole and exclusive business activity, and the General Partner may have     other business interests and engage in other activities in addition to     those relating to the Partnership, including businesses and activities     which are or may be competitive with the Partnership. Neither the     Partnership nor the Limited Partners shall have any right by virtue of this     Agreement or the partnership relationship created hereby in or to any such     other ventures or activities or to the income or proceeds derived     therefrom, and the pursuit of such ventures, even if competitive with the     business of the Partnership, shall not be deemed wrongful or improper. The     General Partner and any of its Affiliates, shall not be obligated to     present any particular investment or business opportunity to the     Partnership even if such opportunity is of a character which, if presented     to the Partnership, could be taken by the Partnership, and the General     Partner and each of its Affiliates shall have the right to take for his or     its own account or for any other Person, or to recommend to others, any     such particular investment or business opportunity.                                      23           (b)  The General Partner may, on behalf of the Partnership, employ or     otherwise acquire services or financing from any Partner or any entity in     which any Partner has an interest (fiduciary or otherwise) and pay from the     Partnership assets reasonable compensation therefor or interest thereon and     may acquire from or sell to any Partner or any entity in which any Partner     has an interest (fiduciary or otherwise) real or personal property or     interests therein and may acquire or sell real or personal property or     interests therein in connection with the acquisition or sale of which any     Partner or any entity in which any Partner has an interest (fiduciary or     otherwise) earns a commission or fee.          (c)  The General Partner may commingle Partnership funds with funds of     its own or those of any other entity (either by joint venture or otherwise)     for Partnership purposes; provided that in connection with such funds the     General Partner shall keep adequate records to reflect the Partnership's     proportional interest therein.     Section 7.6  Contracts with Affiliates.          (a)  Loans. The Partnership may lend or contribute to its Subsidiaries     or other Persons in which it has an equity investment, and such Persons may     borrow funds from the Partnership, on terms and conditions established in     the sole and absolute discretion of the General Partner. The foregoing     authority shall not create any right or benefit in favor of any Subsidiary     or any other Person.          (b)  Transfers of Assets. Except as provided in Section 7.5, the     Partnership may transfer assets to joint ventures, other partnerships,     corporations or other business entities in which it is or thereby becomes a     participant upon such terms and subject to such conditions consistent with     this Agreement and applicable law.          (c)  Contracts With General Partner. Except as expressly permitted by     this Agreement, neither the General Partner nor any of its Affiliates shall     sell, transfer or convey any property to, or purchase any property from,     the Partnership, directly or indirectly, except pursuant to transactions     that are on terms that are fair and reasonable and no less favorable to the     Partnership than would be obtained from an unaffiliated third party in     connection therewith.          (d)  Employee Benefit Plans. The General Partner, in its sole and     absolute discretion and without the approval of the Limited Partners, may     propose and adopt on behalf of the Partnership employee benefit plans     funded by the Partnership for the benefit of employees of the General     Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate     of any of them in respect of services performed, directly or indirectly,     for the benefit of the Partnership, the General Partner, or any of the     Partnership's Subsidiaries.      Section 7.7  Indemnification.                                      24           (a)  General. The Partnership shall indemnify an Indemnitee from and     against any and all losses, claims, damages, liabilities, joint or several,     expenses (including legal fees and expenses), judgments, fines,     settlements, and other amounts arising from any and all claims, demands,     actions, suits or proceedings, civil, criminal, administrative or     investigative, that relate to the operations of the Partnership as set     forth in this Agreement in which any Indemnitee may be involved, or is     threatened to be involved, as a party or otherwise, unless it is     established that: (i) the act or omission of the Indemnitee was material to     the matter giving rise to the proceeding and either was committed in bad     faith or was the result of active and deliberate dishonesty; (ii) the     Indemnitee actually received an improper personal benefit in money,     property or services; or (iii) in the case of any criminal proceeding, the     Indemnitee had reasonable cause to believe that the act or omission was     unlawful. The termination of any proceeding by judgment, order or     settlement does not create a presumption that the Indemnitee did not meet     the requisite standard of conduct set forth in this Section 7.7(a). The     termination of any proceeding by conviction or upon a plea of nolo     contendere or its equivalent, or an entry of an order of probation prior to     judgment, creates a rebuttable presumption that the Indemnitee acted in a     manner contrary to that specified in this Section 7.7(a). Any     indemnification pursuant to this Section 7.7 shall be made only out of the     assets of the Partnership.          (b)  In Advance of Final Disposition. Reasonable expenses incurred by     an Indemnitee who is a party to a proceeding may be paid or reimbursed by     the Partnership in advance of the final disposition of the proceeding upon     receipt by the Partnership of (a) a written affirmation by the Indemnitee     of the Indemnitee's good faith belief that the standard of conduct     necessary for indemnification by the Partnership as authorized in this     Section 7.7 has been met, and (b) a written undertaking by or on behalf of     the Indemnitee to repay the amount if it shall ultimately be determined     that the standard of conduct has not been met.          (c)  Other Than by This Section. The indemnification provided by this     Section 7.7 shall be in addition to any other rights to which an Indemnitee     or any other Person may be entitled under any agreement, pursuant to any     vote of the Partners, as a matter of law or otherwise, and shall continue     as to an Indemnitee who has ceased to serve in such capacity.          (d)  Insurance. The Partnership may purchase and maintain insurance,     on behalf of the Indemnitees and such other Persons as the General Partner     shall determine, against any liability that may be asserted against or     expenses that may be incurred by such Person in connection with the     Partnership's activities, regardless of whether the Partnership would have     the power to indemnify such Person against such liability under the     provisions of this Agreement.          (e)  Employee Benefit Plans. For purposes of this Section 7.7, the     Partnership shall be deemed to have requested an Indemnitee to serve as     fiduciary of an employee                                      25      benefit plan whenever the performance by it of its duties to the     Partnership also imposes duties on, or otherwise involves services by, it     to the plan or participants or beneficiaries of the plan; excise taxes     assessed on an Indemnitee with respect to an employee benefit plan pursuant     to applicable law shall constitute fines within the meaning of Section     7.7(a); and actions taken or omitted by the Indemnitee with respect to an     employee benefit plan in the performance of its duties for a purpose     reasonably believed by it to be in the interest of the participants and     beneficiaries of the plan shall be deemed to be for a purpose which is not     opposed to the best interests of the Partnership.          (f)  No Personal Liability for Limited Partners. In no event may an     Indemnitee subject the Limited Partners to personal liability by reason of     the indemnification provisions set forth in this Agreement.          (g)  Interested Transactions. An Indemnitee shall not be denied     indemnification in whole or in part under this Section 7.7 because the     Indemnitee had an interest in the transaction with respect to which the     indemnification applies if the transaction was otherwise permitted by the     terms of this Agreement.          (h)  Binding Effect. The provisions of this Section 7.7 are for the     benefit of the Indemnitees, their heirs, successors, assigns and     administrators and shall not be deemed to create any rights for the benefit     of any other Persons.     Section 7.8  Liability of the General Partner.          (a)  General. Notwithstanding anything to the contrary set forth in     this Agreement, the General Partner shall not be liable for monetary     damages to the Partnership or any Partners for losses sustained or     liabilities incurred as a result of errors in judgment or of any act or     omission, unless (i) the General Partner actually received an improper     benefit in money, property or services (in which case, such liability shall     be for the amount of the benefit in money, property or services actually     received), or (ii) the General Partner's action or failure to act was the     result of active and deliberate dishonesty and was material to the cause of     action being adjudicated.          (b)  No Obligation to Consider Interests of Limited Partners. The     Limited Partners expressly acknowledge that the General Partner is acting     on behalf of the Partnership and the sole stockholder of the General     Partner collectively, that the General Partner is under no obligation to     consider the separate interests of the Limited Partners (including, without     limitation, the tax consequences to the Limited Partners) in deciding     whether to cause the Partnership to take (or decline to take) any actions     which the General Partner has undertaken in good faith on behalf of the     Partnership, and that the General Partner shall not be liable for monetary     damages for losses sustained, liabilities incurred, or benefits not derived     by the Limited Partners in connection with such decisions, unless (i) the     General Partner actually received an improper benefit in money, property or                                      26      services (in which case, such liability shall be for the amount of the     benefit in money, property or services actually received), or (ii) the     General Partner's action or failure to act was the result of active and     deliberate dishonesty and was material to the cause of action being     adjudicated.          (c) Acts of Agents. Subject to its obligations and duties as General     Partner set forth in Section 7.1(a) hereof, the General Partner may     exercise any of the powers granted to it by this Agreement and perform any     of the duties imposed upon it hereunder either directly or by or through     its agents. The General Partner shall not be responsible for any misconduct     or negligence on the part of any such agent appointed by it in good faith.          (d) Effect of Amendment. Any amendment, modification or repeal of his     Section 7.8 or any provision hereof shall be prospective only and shall not     in any way affect the limitations on the General Partner's liability to the     Partnership and the Limited Partners under this Section 7.8 as in effect     immediately prior to such amendment, modification or repeal with respect to     claims arising from or relating to matters occurring, in whole or in part,     prior to such amendment, modification or repeal, regardless of when such     claims may arise or be asserted.     Section 7.9  Other Matters Concerning the General Partner.                   -------------------------------------------           (a) Reliance on Documents. The General Partner may rely and shall be     protected in acting or refraining from acting upon any resolution,     certificate, statement, instrument, opinion, report, notice, request,     consent, order, bond, debenture, or other paper or document believed by it     to be genuine and to have been signed or presented by the proper party or     parties.          (b) Reliance on Consultants and Advisors. The General Partner may     consult with legal counsel, accountants, appraisers, management     consultants, investment bankers and other consultants and advisors selected     by it, and any act taken or omitted to be taken in reliance upon the     opinion of such Persons as to matters which such General Partner reasonably     believes to be within such Person's professional or expert competence shall     be conclusively presumed to have been done or omitted in good faith and in     accordance with such opinion.          (c) Action Through Officers and Attorneys. The General Partner shall     have the right, in respect of any of its powers or obligations hereunder,     to act through any of its duly authorized officers and a duly appointed     attorney or attorneys-in-fact. Each such attorney shall, to the extent     provided by the General Partner in the power of attorney, have full power     and authority to do and perform all and every act and duty which is     permitted or required to be done by the General Partner hereunder.                                      27      Section 7.10 Title to Partnership Assets. Title to Partnership assets,whether real, personal or mixed and whether tangible or intangible, shall bedeemed to be owned by the Partnership as an entity, and no Partner, individuallyor collectively, shall have any ownership interest in such Partnership assets orany portion thereof. Title to any or all of the Partnership assets may be heldin the name of the Partnership, the General Partner or one or more nominees, asthe General Partner may determine, including Affiliates of the General Partner.The General Partner hereby declares and warrants that any Partnership assets forwhich legal title is held in the name of the General Partner or any nominee orAffiliate of the General Partner shall be held by the General Partner for theuse and benefit of the Partnership in accordance with the provisions of thisAgreement; provided, however, that the General Partner shall use its bestefforts to cause beneficial and record title to such assets to be vested in thePartnership as soon as reasonably practicable. All Partnership assets shall berecorded as the property of the Partnership in its books and records,irrespective of the name in which legal title to such Partnership assets isheld.     Section 7.11 Reliance by Third Parties. Notwithstanding anything to thecontrary in this Agreement, any Person dealing with the Partnership shall beentitled to assume that the General Partner has full power and authority toencumber, sell or otherwise use in any manner any and all assets of thePartnership and to enter into any contracts on behalf of the Partnership, andsuch Person shall be entitled to deal with the General Partner as if it were thePartnership's sole party in interest, both legally and beneficially. The LimitedPartners hereby waive any and all defenses or other remedies which may beavailable against the Limited Partners to contest, negate or disaffirm anyaction of the General Partner in connection with any such dealing. In no eventshall any Person dealing with the General Partner or its representatives beobligated to ascertain that the terms of this Agreement have been complied withor to inquire into the necessity or expedience of any act or action of theGeneral Partner or its representatives. Each and every certificate, document orother instrument executed on behalf of the Partnership by the General Partner orits representatives shall be conclusive evidence in favor of any and everyPerson relying thereon or claiming thereunder that (a) at the time of theexecution and delivery of such certificate, document or instrument, thisAgreement was in full force and effect, (b) the Person executing and deliveringsuch certificate, document or instrument was duly authorized and empowered to doso for and on behalf of the Partnership and (c) such certificate, document orinstrument was duly executed and delivered in accordance with the terms andprovisions of this Agreement and is binding upon the Partnership.                                 ARTICLE VIII                  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS     Section 8.1 Limitation of Liability. The Limited Partners shall have noliability under this Agreement except as expressly provided in this Agreement,including Section 10.5 hereof, or under the Act.                                      28      Section 8.2 Management of Business. The Limited Partners shall not takepart in the operation, management or control (within the meaning of the Act) ofthe Partnership's business, transact any business in the Partnership's name norhave the power to sign documents for or otherwise bind the Partnership. Thetransaction of any such business by the General Partner, any of its Affiliatesor any officer, director, employee, partner, agent of the General Partner, thePartnership or any of their Affiliates, in their capacity as such, shall notaffect, impair or eliminate the limitations on the liability of the LimitedPartners under this Agreement.     Section 8.3  Outside Activities of Limited Partners.                  --------------------------------------          (a) General. Subject to Section 8.3(b) and any agreements entered into     by the Limited Partners or their Affiliates with the Partnership     (including, without limitation, the Non-Competition Agreement), the General     Partner or their respective Affiliates, the Partnership or a Subsidiary,     the following rights shall govern outside activities of the Limited     Partners: (i) the Limited Partners and any officer, director, employee,     agent, trustee, Affiliate or stockholder of any Limited Partner shall be     entitled to and may have business interests and engage in business     activities in addition to those relating to the Partnership, including     business interests and activities in direct competition with the     Partnership; (ii) neither the Partnership nor any Partners shall have any     rights by virtue of this Agreement in any business ventures of the Limited     Partners; (iii) neither the Limited Partners nor any other Person shall     have any rights by virtue of this Agreement or the partnership relationship     established hereby in any business ventures of any other Person, other than     the General Partner, and such Person shall have no obligation pursuant to     this Agreement to offer any interest in any such business ventures to the     Partnership, the Limited Partners or any such other Person, even if such     opportunity is of a character which, if presented to the Partnership, the     Limited Partners or such other Person, could be taken by such Person; (iv)     the fact that the Limited Partners may encounter opportunities to purchase,     otherwise acquire, lease, sell or otherwise dispose of real or personal     property and may take advantage of such opportunities itself or introduce     such opportunities to entities in which it has or has not any interest,     shall not subject such Partner to liability to the Partnership or any of     the other Partners on account of the lost opportunity; and (v) except as     otherwise specifically provided herein, nothing contained in this Agreement     shall be deemed to prohibit the Limited Partners or any of their Affiliates     from dealing, or otherwise engaging in business, with Persons transacting     business with the Partnership or from providing services relating to the     purchase, sale, rental, management or operation of real or personal     property (including real estate brokerage services) and receiving     compensation therefor, from any Persons who have transacted business with     the Partnership or other third parties.          (b) Limitation. Notwithstanding Section 8.3(a), no Limited Partner     shall directly or indirectly engage in the ownership, management or     operation of any Person who competes, directly or indirectly, with the     Partnership or the General Partner. Nothing in this Section 8.3(b) shall     prohibit a Limited Partner from owning up to 1% of the                                      29      outstanding securities of any Person who directly or indirectly competes     with the Company.     Section 8.4  Priority Among Partners. No Partner (Limited or General) shallhave priority over any other Partner (Limited or General) either as to thereturn of Capital Contributions or, except to the extent provided by Sections6.2 or 6.3 hereof, or otherwise expressly provided in this Agreement, as toprofits, losses or distributions.     Section 8.5  Rights of Limited Partners Relating to the Partnership.          (a)  Copies of Business Records. In addition to other rights provided     by this Agreement or by the Act, and except as limited by Section 8.5(b)     hereof, a Limited Partner shall have the right, for a purpose reasonably     related to the Limited Partner's interest as a limited partner in the     Partnership, upon written demand with a statement of the purpose of such     demand and at the Limited Partner's own expense:               (1)  to obtain a copy of the most recent annual and quarterly          reports filed with the Securities and Exchange Commission by the sole          stockholder of the General Partner pursuant to the Securities Exchange          Act of 1934, as amended;               (2)  to obtain a copy of the Partnership's Federal, state and          local income tax returns for each Partnership Year;               (3)  to obtain a current list of the name and last known          business, residence or mailing address of each Partner;               (4)  to obtain a copy of this Agreement and the Certificate and          all amendments thereto, together with executed copies of all powers of          attorney pursuant to which this Agreement, the Certificate and all          amendments thereto have been executed; and               (5)  to obtain true and full information regarding the amount of          cash and a description and statement of any other property or services          contributed by each Partner and which each Partner has agreed to          contribute in the future, and the date on which each became a partner.          (b)  Confidential Information. Notwithstanding any other provision of     this Section 8.5, the General Partner may keep confidential from the     Limited Partners, for such period of time as the General Partner determines     in its sole and absolute discretion to be reasonable, any Partnership     information that (i) the General Partner believes to be in the nature of     trade secrets or other information the disclosure of which the General     Partner in good faith believes is not in the best interests of the     Partnership or (ii) the Partnership is required by law or by agreements     with unaffiliated third parties to keep confidential.                                      30      Section 8.6  Purchase Right.          (a)  From and after the date that the Principal is no longer employed     by the Partnership for any reason, the General Partner shall have the right     (the "Purchase Right") to purchase (but not the obligation), from the     Limited Partners all (but not less than all) of the Limited Partners'     Limited Partnership Interests in exchange for the Purchase Amount. For     purposes of this Section 8.6, the Purchase Amount shall be calculated as of     the last date of employment of the Principal by the Partnership. Prior to     any exercise of the Purchase Right, the disinterested members of the board     of directors of the sole stockholder of the General Partner shall have     approved, by a majority vote thereof, the exercise of the Purchase Right by     the General Partner.          (b)  The General Partner shall exercise the Purchase Right (if at all)     by delivering a notice (the "Purchase Notice") to the Limited Partners at     the address of the Limited Partner as reflected in the records of the     Partnership. Such notice shall state that the General Partner is exercising     the Purchase Right, shall state that the disinterested members of the board     of directors of the sole stockholder of the General Partner have, by a     majority vote thereof, approved the exercise of the Purchase Right by the     General Partner, shall set forth the Purchase Amount (and the calculation     thereof) and such other matters as the General Partner deems appropriate.     On the thirtieth day following the Purchase Notice, the General Partner     shall deliver to the Limited Partners a certified or cashier's check for     the Purchase Amount (together with an amount representing any distributions     accrued but unpaid prior to the date of the Purchase Notice). The Limited     Partners agree to execute such documents as the General Partner may     reasonably request in connection with the exercise of the Purchase Right.                                  ARTICLE IX                    BOOKS, RECORDS, ACCOUNTING AND REPORTS     Section 9.1  Records and Accounting. The General Partner shall keep orcause to be kept at the principal office of the Partnership appropriate booksand records with respect to the Partnership's business, including, withoutlimitation, all books and records necessary to provide to the Limited Partnersany information, lists and copies of documents required to be provided pursuantto Section 9.3 hereof. Any records maintained by or on behalf of the Partnershipin the regular course of its business may be kept on, or be in the form of,punch cards, magnetic tape, photographs, micrographics or any other informationstorage device; provided that the records so maintained are convertible intoclearly legible written form within a reasonable period of time. The books ofthe Partnership shall be maintained for financial purposes on an accrual basisin accordance with generally accepted accounting principles and for taxreporting purposes on the accrual basis.     Section 9.2  Fiscal Year. The fiscal year of the Partnership shall be thecalendar year.                                      31      Section 9.3  Reports.          (a)  Annual Reports. As soon as practicable, but in no event later     than 120 days after the close of each Partnership Year, the General Partner     shall cause to be mailed to the Limited Partners as of the close of the     Partnership Year, an annual report containing unaudited financial     statements of the Partnership presented in accordance with generally     accepted accounting principles.          (b)  Quarterly Reports. As soon as practicable, but in no event later     than 60 days after the close of each calendar quarter (except the last     calendar quarter of each year), the General Partner shall cause to be     mailed to the Limited Partners as of the last day of the calendar quarter,     a report containing unaudited financial statements of the Partnership, and     such other information as may be required by applicable law or regulation,     or as the General Partner determines to be appropriate.                                   ARTICLE X                                  TAX MATTERS     Section 10.1 Preparation of Tax Returns. The General Partner shall arrangefor the preparation and timely filing of all returns of Partnership income,gains, deductions, losses and other items required of the Partnership forFederal and state income tax purposes and shall use all reasonable efforts tofurnish, within 90 days of the close of each taxable year, the tax informationreasonably required by the General Partner and the Limited Partners for Federaland state income tax reporting purposes.     Section 10.2 Tax Elections. Except as otherwise provided herein, theGeneral Partner shall, in its sole and absolute discretion, determine whether tomake any available election pursuant to the Code; provided, however, that theGeneral Partner shall make the election under Section 754 of the Code inaccordance with applicable regulations thereunder. The General Partner shallhave the right to seek to revoke any such election (including, withoutlimitation, the election under Section 754 of the Code) upon the GeneralPartner's determination in its sole and absolute discretion that such revocationis in the best interests of the Partners.     Section 10.3  Tax Matters Partner.          (a)  General. The General Partner shall be the "tax matters partner"     of the Partnership for Federal income tax purposes. Pursuant to Section     6223(c) of the Code, upon receipt of notice from the IRS of the beginning     of an administrative proceeding with respect to the Partnership, the tax     matters partner shall furnish the IRS with the name, address and profit     interest of the Limited Partners; provided, however, that such information     is provided to the Partnership by the Limited Partners. The Limited     Partners shall provide such information to the Partnership as the General     Partner shall reasonably request.                                      32      (b)  Powers. The tax matters partner is authorized, but not required:          (1)  to enter into any settlement with the IRS with respect to any     administrative or judicial proceedings for the adjustment of Partnership     items required to be taken into account by a Partner for income tax     purposes (such administrative proceedings being referred to as a "tax     audit" and such judicial proceedings being referred to as "judicial     review"), and in the settlement agreement the tax matters partner may     expressly state that such agreement shall bind all Partners, except that     such settlement agreement shall not bind any Partner (a) who (within the     time prescribed pursuant to the Code and Regulations) files a statement     with the IRS providing that the tax matters partner shall not have the     authority to enter into a settlement agreement on behalf of such Partner or     (b) who is a "notice partner" (as defined in Section 6231 of the Code) or a     member of a "notice group" (as defined in Section 6223(b)(2) of the Code);          (2)  in the event that a notice of a final administrative adjustment     at the Partnership level of any item required to be taken into account by a     partner for tax purposes (a "final adjustment") is mailed or otherwise     given to the tax matters partner, to seek judicial review of such final     adjustment, including the filing of a petition for readjustment with the     Tax Court or the United States Claims Court, or the filing of a complaint     for refund with the District Court of the United States for the district in     which the Partnership's principal place of business is located;          (3)  to intervene in any action brought by any other Partner for     judicial review of a final adjustment;          (4)  to file a request for an administrative adjustment with the IRS     at any time and, if any part of such request is not allowed by the IRS, to     file an appropriate pleading (petition, complaint or other document) for     judicial review with respect to such request;          (5)  to enter into an agreement with the IRS to extend the period for     assessing any tax which is attributable to any item required to be taken     into account by a Partner for tax purposes, or an item affected by such     item; and          (6)  to take any other action on behalf of the Partners of the     Partnership in connection with any tax audit or judicial review proceeding     to the extent permitted by applicable law or regulations.     The taking of any action and the incurring of any expense by the taxmatters partner in connection with any such proceeding, except to theextent required by law, is a matter in the sole and absolute discretion ofthe tax matters partner, and the provisions                                      33      relating to indemnification of the General Partner set forth in Section 7.7     of this Agreement shall be fully applicable to the tax matters partner in     its capacity as such.          (c) Reimbursement.  The tax matters partner shall receive no     compensation for its services. All third-party costs and expenses incurred     by the tax matters partner in performing its duties as such (including     legal and accounting fees) shall be borne by the Partnership. Nothing     herein shall be construed to restrict the Partnership from engaging an     accounting firm and a law firm to assist the tax matters partner in     discharging his duties hereunder, so long as the compensation paid by the     Partnership for such services is reasonable.     Section 10.4  Organizational Expenses.  The Partnership shall elect todeduct expenses, if any, incurred by it in organizing the Partnership ratablyover a 60 month period as provided in Section 709 of the Code.     Section 10.5  Withholding.  The Limited Partners hereby authorize thePartnership to withhold from, or pay on behalf of, or with respect to, theLimited Partners any amount of Federal, state, local, or foreign taxes that theGeneral Partner determines that the Partnership is required to withhold or paywith respect to any amount distributable or allocable to the Limited Partnerspursuant to this Agreement, including, without limitation, any taxes required tobe withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445 or1446 of the Code. Any amount paid on behalf of or with respect to the LimitedPartners shall constitute a loan by the Partnership to the Limited Partners,which loan shall be repaid by the Limited Partners within 15 days after noticefrom the General Partner that such payment must be made unless (a) thePartnership withholds such payment from a distribution which would otherwise bemade to the Limited Partners or (b) the General Partner determines, in its soleand absolute discretion, that such payment may be satisfied out of the availablefunds of the Partnership which would, but for such payment, be distributed tothe Limited Partners. Any amounts withheld pursuant to the foregoing clauses (a)or (b) shall be treated as having been distributed to the Limited Partners. Eachof the Limited Partners hereby unconditionally and irrevocably grant to thePartnership a security interest in the Limited Partner's Partnership Interest tosecure the Limited Partner's obligation to pay to the Partnership any amountsrequired to be paid pursuant to this Section 10.5. In the event that a LimitedPartner fails to pay any amounts owed to the Partnership pursuant to thisSection 10.5 when due, the General Partner may, in its sole and absolutediscretion, elect to make the payment to the Partnership on behalf of thedefaulting Limited Partner, and in such event shall be deemed to have loanedsuch amount to the defaulting Limited Partner and shall succeed to all rightsand remedies of the Partnership as against the defaulting Limited Partner(including, without limitation, the right to receive distributions). Any amountspayable by the Limited Partner hereunder shall bear interest at the base rate oncorporate loans at large United States money center commercial banks, aspublished from time to time in the Wall Street Journal, plus four percentagepoints (but not higher than the maximum lawful rate) from the date such amountis due (i.e., 15 days after demand) until such amount is paid in full. TheLimited Partner shall                                      34 take such actions as the Partnership or the General Partner shall request inorder to perfect or enforce the security interest created hereunder.                                  ARTICLE XI                           TRANSFERS AND WITHDRAWALS     Section 11.1  Transfer.                   --------           (a) Definition.  The term "transfer," when used in this Article XI     with respect to a Partnership Interest, shall be deemed to refer to a     transaction by which Partner purports to assign its Partnership Interest to     another Person and includes a sale, assignment, gift, bequest, pledge,     encumbrance, hypothecation, mortgage, exchange or any other disposition by     law or otherwise. The term "transfer" when used in this Article XI does not     include any acquisition of Partnership Interests from a Limited Partner by     the General Partner pursuant to Section 8.6 hereof.          (b) Requirements.  No Partnership Interest shall be transferred, in     whole or in part, except in accordance with the terms and conditions set     forth in this Article XI. Any transfer or purported transfer of a     Partnership Interest not made in accordance with this Article XI shall be     null and void.     Section 11.2  Transfer of General Partner's Partnership Interest.                   --------------------------------------------------           (a) General.  The General Partner may not transfer any of its General     Partnership Interest or withdraw as General Partner except in connection     with a transaction described in Section 11.2(b).          (b) Transfer in Connection With Reclassification, Recapitalization, or     Business Combination Involving General Partner. The General Partner shall     not engage in any merger, consolidation or other combination with or into     another Person or sale of all or substantially all of its assets, or any     reclassification, or recapitalization or change of its outstanding common     stock (other than a change in par value, or from par value to no par value,     or as a result of a subdivision or combination of its common stock), unless     under the terms of such transaction, the Limited Partners will not be     deemed to have engaged in a sale or exchange for Federal income tax     purposes of its Partnership Interest.     Section 11.3  Limited Partners' Rights to Transfer.                   ------------------------------------           (a) General.  Subject to the provisions of Section 8.6, a Limited     Partner may not transfer all or any portion of its Partnership Interest, or     any of the Limited Partner's rights as a Limited Partner, without the prior     written consent of the General Partner, which consent may be given or     withheld by the General Partner in its sole and absolute discretion. The     General Partner's failure or refusal to permit a transfer of a Limited                                      35      Partner's Partnership Interest shall not give rise to any cause of action     against the Partnership or the General Partner. The General Partner may     condition its consent to any such transfer on such matters as it deems     appropriate, including without limitation, amendments to this Agreement. In     order to effect such transfer upon consent of the General Partner, a     Limited Partner must deliver to the General Partner a duly executed copy of     the instrument making such transfer and such instrument must evidence the     written acceptance by the assignee of all of the terms and conditions of     this Agreement and represent that such assignment was made in accordance     with all applicable laws and regulations.          (b) Incapacitated Limited Partners.  If a Limited Partner is subject     to Incapacity, the executor, administrator, trustee, committee, guardian,     conservator or receiver of such Limited Partner's estate shall have all the     rights of a Limited Partner, but not more rights than those enjoyed by the     Limited Partner for the purpose of settling or managing the estate and such     power as the Incapacitated Limited Partner possessed to transfer all or any     part of his or its interest in the Partnership. The Incapacity of a Limited     Partner, in and of itself, shall not dissolve or terminate the Partnership.          (c) Rights and Duties of Substituted Limited Partners.  A transferee     who has been admitted as a Substituted Limited Partner in accordance with     this Article XI shall have all the rights and powers and be subject to all     the restrictions and liabilities of the Limited Partner under this     Agreement.          (d) Amendment of Exhibit A.  Upon the admission of a Substituted     Limited Partner, the General Partner shall amend Exhibit A to reflect the     name, address, Partnership Interests, Sharing Percentage and Percentage     Interest of such Substituted Limited Partner and to eliminate or adjust, if     necessary, the name, address and interest of the predecessor of such     Substituted Limited Partner.     Section 11.4  General Provisions.                   ------------------           (a) Withdrawal or Transfer of Limited Partner.  A Limited Partner may     not withdraw from the Partnership other than as a result of a permitted     transfer of all of the Limited Partner's Partnership Interests in     accordance with this Article XI or pursuant to the provisions of Section     8.6 hereof. If a Limited Partner shall transfer all of its Partnership     Interests in a transfer permitted pursuant to this Article XI or pursuant     to the provisions of Section 8.6 hereof shall cease to be a Limited     Partner.          (b) Timing of Transfers.  Transfers pursuant to this Article XI may     only be made on the first day of a fiscal quarter of the Partnership,     unless the General Partner otherwise agrees.                                      36           (c) Allocation When Transfer Occurs.  If any Partnership Interest is     transferred during any quarterly segment of the Partnership's fiscal year     in compliance with the provisions of this Article XI or pursuant to the     provisions of Section 8.6 hereof, Net Income, Net Losses, each item thereof     and all other items attributable to such interest for such fiscal year     shall be divided and allocated between the transferor Partner and the     transferee Partner by taking into account their varying interests during     the fiscal year in accordance with Section 706(d) of the Code, based on the     portion of the year for which the transferor Partner and the transferee     Partner were Partners. Solely for purposes of making such allocations, each     of such items for the calendar month in which the transfer or redemption     occurs shall be allocated to the Person who is a Partner as of midnight on     the last day of said month. All distributions of Available Cash with     respect to which the record date is before the date of such transfer or     redemption shall be made to the transferor Partner, and all distributions     of Available Cash with record dates thereafter shall be made to the     transferee Partner.                                  ARTICLE XII                             ADMISSION OF PARTNERS     Section 12.1  Admission of Successor General Partner.  A successor toall of the General Partner's General Partnership Interest pursuant to Section11.2 hereof who is proposed to be admitted as a successor General Partner shallbe admitted to the Partnership as the General Partner, effective upon suchtransfer. Any such transferee shall carry on the business of the Partnershipwithout dissolution. In each case, the admission shall be subject to thesuccessor General Partner executing and delivering to the Partnership anacceptance of all of the terms and conditions of this Agreement and such otherdocuments or instruments as may be required to effect the admission.     Section 12.2  Admission of Additional Limited Partners.  No additionalLimited Partners shall be admitted to the Partnership without the consent of allof the Partners.     Section 12.3  Amendment of Agreement and Certificate.  For the admission tothe Partnership of any Partner, the General Partner shall take all stepsnecessary and appropriate under the Act to amend the records of the Partnershipand, if necessary, to prepare as soon as practical an amendment of thisAgreement (including an amendment of Exhibit A) and, if required by law, shallprepare and file an amendment to the Certificate and may for this purposeexercise the power of attorney granted pursuant to Article XVI hereof.                                      37                                   ARTICLE XIII                          DISSOLUTION AND LIQUIDATION     Section 13.1  Dissolution.  The Partnership shall not be dissolved by theadmission of Substituted Limited Partners or additional Limited Partners or bythe admission of a successor General Partner in accordance with the terms ofthis Agreement. Subject to Section 13.2, the Partnership shall dissolve, and itsaffairs shall be wound up, upon the first to occur of any of the following("Events of Dissolution"):          (a) Expiration of Term--the expiration of its term as provided in     Section 2.5 hereof;          (b)  Withdrawal of General Partner--an event of withdrawal of the     General Partner, as defined in the Act, unless, within 90 days after the     withdrawal, all the remaining Partners agree in writing to continue the     business of the Partnership and to the appointment, effective as of the     date of withdrawal, of a substitute General Partner;          (c)  Dissolution Prior to 2097--from and after the date of this     Agreement through December 31, 2096, an election to dissolve the     Partnership made by the General Partner, in its sole and absolute     discretion;          (d)  Judicial Dissolution Decree--entry of a decree of judicial     dissolution of the Partnership pursuant to the provisions of the Act;          (e)  Sale of Partnership's Assets--the sale of all or substantially     all of the assets and properties of the Partnership;          (f)  Merger--the merger or other combination of the Partnership with     or into another entity;          (g)  Vote--a vote of all of the Partners;          (h)  Bankruptcy or Insolvency of General Partner--the General Partner               (1) makes an assignment for the benefit of creditors;               (2) files a voluntary petition in bankruptcy;               (3) is adjudged a bankrupt or insolvent, or has entered against          it an order for relief in any bankruptcy or insolvency proceeding;                                       38                (4) files a petition or answer seeking for itself any          reorganization, arrangement, composition, readjustment, liquidation,          dissolution or similar relief under any statute, law or regulation;               (5) files an answer or other pleading admitting or failing to          contest the material allegations of a petition filed against it in any          proceeding of this nature; or               (6) seeks, consents to or acquiesces in the appointment of a          trustee, receiver or liquidator of the General Partner or of all or          any substantial part of its properties; or          (i) Readjustment, etc. One hundred and twenty (120) days after the     commencement of any proceeding against the General Partner seeking     reorganization, arrangement, composition, readjustment, liquidation,     dissolution or similar relief under any statute, law or regulation, the     proceeding has not been dismissed, or if within 90 days after the     appointment without the General Partner's consent or acquiescence of a     trustee, receiver or liquidator of the General Partner or of all or any     substantial part of its properties, the appointment is not vacated or     stayed, or within 90 days after the expiration of any such stay, the     appointment is not vacated.     Section 13.2  Right to Continue the Partnership Business. In the event ofthe dissolution of the Partnership for any reason, the Limited Partners shallhave the option to form a new partnership for the purpose of continuing thePartnership business. Unless the Limited Partners so elect within 90 days afterthe occurrence of an Event of Dissolution, the Partnership shall be liquidatedand shall immediately commence to wind up its affairs as provided in Section13.3.     Section 13.3  Winding Up.          (a) General. Upon the occurrence of an Event of Dissolution and     subject to Section 13.2, the Partnership shall continue solely for the     purposes of winding up its affairs in an orderly manner, liquidating its     assets, and satisfying the claims of its creditors and Partners. No Partner     shall take any action that is inconsistent with, or not necessary to or     appropriate for, the winding up of the Partnership's business and affairs.     The General Partner (or, in the event there is no remaining General     Partner, any Person elected by the Limited Partners (the "Liquidator"))     shall be responsible for overseeing the winding up and dissolution of the     Partnership and shall take full account of the Partnership's liabilities     and property and the Partnership property shall be liquidated as promptly     as is consistent with obtaining the fair value thereof, and the proceeds     therefrom shall be applied and distributed in the following order:               (1) First, to the payment and discharge of all of the          Partnership's debts and liabilities to creditors other than the          Partners;                                       39                (2) Second, to the payment and discharge of all of the          Partnership's debts and liabilities to the Partners, pro rata in          accordance with amounts owed to each such Partner; and               (3) The balance, if any, to the General Partner and Limited          Partners in accordance with their respective Capital Accounts, after          giving effect to all contributions, distributions, and allocations for          all periods.          The General Partner shall not receive any additional compensation for     any services performed pursuant to this Article XIII.          (b) Where Immediate Sale of Partnership's Assets Impractical.     Notwithstanding the provisions of Section 13.3(a) hereof which require     liquidation of the assets of the Partnership, but subject to the order of     priorities set forth therein, if prior to or upon dissolution of the     Partnership the Liquidator determines that an immediate sale of part or all     of the Partnership's assets would be impractical or would cause undue loss     to the Partners, the Liquidator may, in its sole and absolute discretion,     defer for a reasonable time the liquidation of any assets except those     necessary to satisfy liabilities of the Partnership (including to those     Partners as creditors) or, with the consent of all Partners, distribute to     the Partners, in lieu of cash, as tenants in common and in accordance with     the provisions of Section 13.3(a) hereof, undivided interests in the     Partnership assets as the Liquidator deems not suitable for liquidation.     Any such distributions in kind shall be made only if, in the good faith     judgment of the Liquidator, such distributions in kind are in the best     interest of the Partners, and shall be subject to such conditions relating     to the disposition and management of such properties as the Liquidator     deems reasonable and equitable and to any agreements governing the     operation of such properties at such time. The Liquidator shall determine     the fair market value of any property distributed in kind using such     reasonable method of valuation as it may adopt.     Section 13.4  Compliance with Timing Requirements of Regulations; Allowance                   for Contingent or Unforeseen Liabilities or Obligations.          (a) Liquidation. Notwithstanding anything to the contrary in this     Agreement, in the event the Partnership is "liquidated" within the meaning     of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made     pursuant to this Article XIII to the General Partner and the Limited     Partners if they have a positive Capital Account in compliance with     Regulations Section 1.704-1(b)(2)(ii)(b)(2) (including any timing     requirements therein). In the discretion of the General Partner, a pro rata     portion of the distributions that would otherwise be made to the General     Partner and the Limited Partners pursuant to this Article XIII may be: (a)     distributed to a liquidating trust established for the benefit of the     General Partner and Limited Partners for the purposes of liquidating     Partnership assets, collecting amounts owed to the Partnership, and paying     any contingent or unforeseen liabilities or obligations of the Partnership     or of the General Partner arising out                                       40      of or in connection with the Partnership. (The assets of any such trust     shall be distributed to the General Partner and Limited Partners from time     to time, in the reasonable discretion of the General Partner, in the same     proportions as the amount distributed to such trust by the Partnership     would otherwise have been distributed to the General Partner and Limited     Partners pursuant to this Agreement); or (b) withheld to provide a     reasonable reserve for Partnership liabilities (contingent or otherwise)     and to reflect the unrealized portion of any installment obligations owed     to the Partnership, provided that such withheld amounts shall be     distributed to the General Partner and Limited Partners as soon as     practicable.          (b) Deficit Balance of General Partner. Notwithstanding anything to     the contrary in this Agreement, (i) if the General Partner has a deficit     balance in its Capital Account following the liquidation (within the     meaning of Regulations Section 1.704-1(b)(2)(ii)(g)) of its interest in the     Partnership, as determined after taking into account all Capital Account     adjustments for the Partnership taxable year during which such liquidation     occurs (other than any adjustment for a capital contribution of the General     Partner made pursuant to this sentence), the General Partner shall make a     capital contribution to the Partnership in an amount equal to such deficit     balance by the end of the Partnership taxable year during which such     liquidation occurs (or, if later, within 90 days after date of such     liquidation); and (ii) such capital contribution made pursuant to clause     (i) of this Section 13.4(b) shall be distributed or utilized as provided in     Section 13.4 or 13.5.     Section 13.5  Deemed Distribution and Recontribution. Notwithstanding anyother provision of this Article XIII (but subject to Section 13.4(b)), in theevent the Partnership is liquidated within the meaning of Regulations Section1.704-1(b)(2)(ii)(g) but no Event of Dissolution has occurred, the Partnership'sproperty shall not be liquidated, the Partnership's liabilities shall not bepaid or discharged, and the Partnership's affairs shall not be wound up.Instead, the Partnership shall be deemed to have distributed the Property inkind to the General Partner and Limited Partners who shall be deemed to haveassumed and taken such property subject to all Partnership liabilities, all inaccordance with their respective Capital Accounts. Immediately thereafter, theGeneral Partner and Limited Partners shall be deemed to have recontributed thePartnership property in kind to the Partnership, which shall be deemed to haveassumed and taken such property subject to all such liabilities.     Section 13.6  Rights of Limited Partners.  Except as specifically providedin this Agreement, the Limited Partners shall look solely to the assets of thePartnership for the return of its Capital Contribution and shall have no rightor power to demand or receive property other than cash from the Partnership.Except as specifically provided in this Agreement, no Partner shall havepriority over any other Partner as to the return of its Capital Contributions,distributions, or allocations.     Section 13.7  Notice of Dissolution.  In the event an Event of Dissolutionor an event occurs that would, but for provisions of Section 13.1 or Section13.2, result in a dissolution of the Partnership, the General Partner shall,within 30 days thereafter, provide written notice                                       41 thereof to each of the Partners and to all other parties with whom thePartnership regularly conducts business (as determined in the discretion of theGeneral Partner) and shall publish notice thereof in a newspaper of generalcirculation in each place in which the Partnership regularly conducts business(as determined in the discretion of the General Partner).     Section 13.8  Cancellation of Certificate of Limited Partnership.  Upon thecompletion of the liquidation of the Partnership as provided in Section 13.3hereof, the Partnership shall be terminated and the Certificate and allqualifications of the Partnership as a foreign limited partnership injurisdictions other than the State of Delaware shall be canceled and such otheractions as may be necessary to terminate the Partnership shall be taken.     Section 13.9  Reasonable Time for Winding-Up.  A reasonable time shall beallowed for the orderly winding-up of the business and affairs of thePartnership and the liquidation of its assets pursuant to Section 13.3 hereof,in order to minimize any losses otherwise attendant upon such winding-up, andthe provisions of this Agreement shall remain in effect between the Partnersduring the period of liquidation.                                  ARTICLE XIV                  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS     Section 14.1  Amendments.               (a) General.  Subject to Section 14.1(b), this Agreement may only be     amended by a written agreement signed by each of the Partners.          (b) General Partner's Power to Amend. Notwithstanding Section 14.1(a),     the General Partner shall have the power, without the consent of the     Limited Partners, to amend this Agreement as may be required to facilitate     or implement any of the following purposes:               (1) to add to the obligations of the General Partner or surrender          any right or power granted to the General Partner or any Affiliate of          the General Partner for the benefit of the Limited Partners;               (2) to reflect the admission, substitution, termination, or          withdrawal of Partners in accordance with this Agreement;               (3) to reflect a change that is of an inconsequential nature and          does not adversely affect the Limited Partners in any material          respect, or to cure any ambiguity, correct or supplement any provision          in this Agreement not inconsistent with law or with other provisions,          or make other changes with respect to matters arising under this          Agreement that will not be inconsistent with law or with the          provisions of this Agreement; and                                       42                (4) to satisfy any requirements, conditions, or guidelines          contained in any order, directive, opinion, ruling or regulation of a          Federal or state agency or contained in Federal or state law.          The General Partner will provide notice to the Limited Partners when     any action under this Section 14.1(b) is taken.                                   ARTICLE XV                               GENERAL PROVISIONS     Section 15.1  Addresses and Notice. All notices and demands under thisAgreement shall be in writing, and may be either delivered personally (whichshall include deliveries by courier), by telefax, telex or other wiretransmission (with request for assurance of receipt in a manner appropriate withrespect to communications of that type, provided that a confirmation copy isconcurrently sent by a nationally recognized express courier for overnightdelivery) or mailed, postage prepaid, by certified or registered mail, returnreceipt requested, directed to the parties at their respective addresses setforth on Exhibit A attached hereto, as it may be amended from time to time, and,if to the Partnership, such notices and demands sent in the aforesaid mannermust be delivered at its principal place of business set forth above. Unlessdelivered personally or by telefax, telex or other wire transmission as above(which shall be effective on the date of such delivery or transmission), anynotice shall be deemed to have been made three (3) days following the date somailed. Any party hereto may designate a different address to which notices anddemands shall thereafter be directed by written notice given in the same mannerand directed to the Partnership at its office hereinabove set forth.     Section 15.2  Titles and Captions. All article or section titles orcaptions in this Agreement are for convenience only. They shall not be deemedpart of this Agreement and in no way define, limit, extend or describe the scopeor intent of any provisions hereof. Except as specifically provided otherwise,references to "Articles" and "Sections" are to Articles and Sections of thisAgreement.     Section 15.3  Pronouns and Plurals. Whenever the context may require, anypronoun used in this Agreement shall include the corresponding masculine,feminine or neuter forms, and the singular form of nouns, pronouns and verbsshall include the plural and vice versa.     Section 15.4  Further Action. The parties shall execute and deliver alldocuments, provide all information and take or refrain from taking action as maybe necessary or appropriate to achieve the purposes of this Agreement.     Section 15.5  Binding Effect. This Agreement shall be binding upon andinure to the benefit of the parties hereto and their heirs, executors,administrators, successors, legal representatives and permitted assigns.                                       43      Section 15.6  Waiver of Partition.  The Partners hereby agree that thePartnership properties are not and will not be suitable for partition.Accordingly, each of the Partners hereby irrevocably waives any and all rights(if any) that it may have to maintain any action for partition of any of thePartnership properties.     Section 15.7  Entire Agreement.  This Agreement constitutes the entireagreement among the parties with respect to the matters contained herein; itsupersedes any prior agreements or understandings among them and it may not bemodified or amended in any manner other than pursuant to Article XIV.     Section 15.8  Securities Law Provisions.  The Partnership Interests havenot been registered under the Federal or state securities laws of any state and,therefore, may not be resold unless appropriate Federal and state securitieslaws, as well as the provisions of Article XI hereof, have been complied with.     Section 15.9  Remedies Not Exclusive.  Any remedies herein contained forbreaches of obligations hereunder shall not be deemed to be exclusive and shallnot impair the right of any party to exercise any other right or remedy, whetherfor damages, injunction or otherwise.     Section 15.10  Time.  Time is of the essence of this Agreement.     Section 15.11  Creditors.  None of the provisions of this Agreement shallbe for the benefit of, or shall be enforceable by, any creditor of thePartnership.     Section 15.12  Waiver.  No failure by any party to insist upon the strictperformance of any covenant, duty, agreement or condition of this Agreement orto exercise any right or remedy consequent upon a breach thereof shallconstitute waiver of any such breach or any other covenant, duty, agreement orcondition.     Section 15.13  Execution Counterparts.  This Agreement may be executed incounterparts, all of which together shall constitute one agreement binding onall the parties hereto, notwithstanding that all such parties are notsignatories to the original or the same counterpart. Each party shall becomebound by this Agreement immediately upon affixing its signature hereto.     Section 15.14  Applicable Law.  This Agreement shall be construed inaccordance with and governed by the laws of the State of Delaware, withoutregard to the principles of conflicts of law.     Section 15.15  Invalidity of Provisions.  If any provision of thisAgreement is or becomes invalid, illegal or unenforceable in any respect, thevalidity, legality and enforceability of the remaining provisions containedherein shall not be affected thereby.                                       44                                  ARTICLE XVI                               POWER OF ATTORNEY     Section 16.1  Power of Attorney.               (a) Scope.  Each of the Limited Partners constitutes and appoints the     General Partner, any Liquidator, and authorized officers and attorneys-in-     fact of each, and each of those acting singly, in each case with full power     of substitution, as its true and lawful agent and attorney-in-fact, with     full power and authority in its name, place and stead to:               (1) execute, swear to, acknowledge, deliver, file and record in          the appropriate public offices (a) all certificates, documents and          other instruments (including, without limitation, this Agreement and          the Certificate and all amendments or restatements thereof) that the          General Partner or the Liquidator deems appropriate or necessary to          form, qualify or continue the existence or qualification of the          Partnership as a limited partnership (or a partnership in which the          limited partners have limited liability) in the State of Delaware and          in all other jurisdictions in which the Partnership may conduct          business or own property; (b) all instruments that the General Partner          deems appropriate or necessary to reflect any amendment, change,          modification or restatement of this Agreement in accordance with its          terms; (c) all conveyances and other instruments or documents that the          General Partner deems appropriate or necessary to reflect the          dissolution and liquidation of the Partnership pursuant to the terms          of this Agreement, including, without limitation, a certificate of          cancellation; (d) all instruments relating to the admission,          withdrawal, removal or substitution of any Partner pursuant to, or          other events described in, Article XI, XII or XIII hereof or the          Capital Contribution of any Partner; and (e) all certificates,          documents and other instruments relating to the determination of the          rights, preferences and privileges of Partnership Interests; and               (2) execute, swear to, acknowledge and file all ballots,          consents, approvals, waivers, certificates and other instruments          appropriate or necessary, in the sole and absolute discretion of the          General Partner, to make, evidence, give, confirm or ratify any vote,          consent, approval, agreement or other action which is made or given by          the Partners hereunder or is consistent with the terms of this          Agreement or appropriate or necessary, in the sole discretion of the          General Partner, to effectuate the terms or intent of this Agreement.          Nothing contained herein shall be construed as authorizing the General     Partner to amend this Agreement except in accordance with Article XIV     hereof or as may be otherwise expressly provided for in this Agreement.                                      45           (b) Irrevocability. The foregoing power of attorney is hereby declared     to be irrevocable and a power coupled with an interest, in recognition of     the fact that each of the Partners will be relying upon the power of the     General Partner to act as contemplated by this Agreement in any filing or     other action by it on behalf of the Partnership, and it shall survive and     not be affected by the subsequent Incapacity of the Limited Partner and the     transfer of all or any portion of the Limited Partner's Partnership     Interests and shall extend to the Limited Partner's heirs, successors,     assigns and personal representatives. Each Limited Partner hereby agrees to     be bound by any representation made by the General Partner, acting in good     faith pursuant to such power of attorney; and each Limited Partner hereby     waives any and all defenses which may be available to contest, negate or     disaffirm the action of the General Partner, taken in good faith under such     power of attorney. Each Limited Partner shall execute and deliver to the     General Partner or the Liquidator, within 15 days after receipt of the     General Partner's request therefor, such further designation, powers of     attorney and other instruments as the General Partner or the Liquidator, as     the case may be, deems necessary to effectuate this Agreement and the     purposes of the Partnership.                           *     *     *     *     *                                       46      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe date first written above.                                 GENERAL PARTNER:                                 Hub City Terminals, Inc.                                 By:  *                                      ------------------------------                                      David P. Yeager                                      Vice Chairman                                 LIMITED PARTNERS:                                 Hub Canadian Investors, Inc.                                 By:  *                                      ------------------------------                                      David P. Yeager                                      Authorized Officer                                 O'NEILL INC.                                 By:  /s/ Thomas O'Neill                                      ------------------------------                                      Thomas O'Neill                                      President                                 FORMATION GENERAL PARTNERS:                                 Hub Canadian Investors, Inc.                                 By:  *                                      ------------------------------                                      David P. Yeager                                      Authorized Officer                                 O'NEILL INC.                                 By:  /s/ Thomas O'Neill                                      ------------------------------                                      Thomas O'Neill                                       47                                  President                                 FORMATION LIMITED PARTNER:                                 *                                 -----------------------------------                                 David P. Yeager                                 *                                 By:  /s/ David P. Yeager                                      -----------------------------                                      David P. Yeager                                       48                                    EXHIBIT A                  PARTNERSHIP INTERESTS; PERCENTAGE INTERESTS          Name and Address            Percentage     Sharing        Capital             of Partner                Interest    Percentage   Contribution/1/          ----------------            ----------   ----------   ---------------                                                                       General Partner- ---------------Hub City Terminals, Inc.1035 Havens CourtDowners Grove, IL  60515............    30.0%        30.00%       $122,904.15Limited Partners- ----------------Hub Canadian Investors, Inc.800 North Crooks Road, Suite 101Clawson, Michigan  48017-1311.......    52.5%        47.25%       $215,082.23O'Neill Inc.2916 South Sheridan Way, Suite 201Oakville, Ontario  L6J 7J8 Canada...    17.5%        22.75%       $ 71,694.08- ----------------/1/     The General Partner has succeeded to the Capital Account and Capital        Contributions of the Formation General Partners pursuant to the terms of        that certain Purchase and Sale Agreement dated as of even date herewith,        between the Formation General Partner and the Limited Partner.                                      A-1                                    EXHIBIT B                           AGREED VALUE; 704(C) VALUEAgreed Value:     Receivables, prepaid expenses and other current     assets, property and equipment, investments and     other assets, intangibles including goodwill .................. $409,680.46704(c) Value:     Agreed Value plus liabilities assumed in     connection with the Contribution Agreement     among the Formation General Partners, the Limited     Partners and the Formation Limited Partners.................... $__________                                      B-1                                    EXHIBIT C                                 DISCOUNT RATE                   Price/Earnings               Discount                      Multiple                    Rate                   --------------               --------                          1                        3%                          2                        5%                          3                        7%                          4                        8%                          5                       11%                          6                       12%                          7                       14%                          8                       15%                          9                       16%                         10                       18%                         11                       20%                         12                       21%                         13                       23%                         14                       24%                         15                       25%                         16                       26%                         17                       28%                         18                       29%                         19                       29%                         20                       31%                         21                       32%                         22                       33%                         23                       34%                         24                       35%                                      C-1                                                                     EXHIBIT 10.3                       FORM OF NON-COMPETITION AGREEMENT                         FOR EACH OF THE PRINCIPALS OF:                            HUB CITY TERMINALS, INC.                             HUB CITY ALABAMA, L.P.                             HUB CITY ATLANTA, L.P.                             HUB CITY BOSTON, L.P.                             HUB CITY CANADA, L.P.                            HUB CITY CLEVELAND, L.P.                             HUB CITY DALLAS, L.P.                             HUB CITY DETROIT, L.P.                             HUB CITY FLORIDA, L.P.                           HUB CITY GOLDEN GATE, L.P.                             HUB CITY HOUSTON, L.P.                          HUB CITY INDIANAPOLIS, L.P.                           HUB CITY KANSAS CITY, L.P.                           HUB CITY LOS ANGELES, L.P.                          HUB CITY MID-ATLANTIC, L.P.                            HUB CITY NEW HAVEN, L.P.                           HUB CITY NEW ORLEANS, L.P.                         HUB CITY NEW YORK STATE, L.P.                      HUB CITY NEW YORK-NEW JERSEY, L.P.                          HUB CITY NORTH CENTRAL, L.P.                              HUB CITY OHIO, L.P.                          HUB CITY PHILADELPHIA, L.P.                           HUB CITY PITTSBURGH, L.P.                            HUB CITY PORTLAND, L.P.                           HUB CITY RIO GRANDE, L.P.                            HUB CITY ST. LOUIS, L.P.                            HUB CITY TENNESSEE, L.P.                            NON-COMPETITION AGREEMENT                           -------------------------     THIS NON-COMPETITION AGREEMENT (this "Agreement") is entered into as ofthis 18th day of March, 1996 by and among Daniel F. Hardman, an individual (the"Employee"), and Hub City Terminals, Inc., a Delaware corporation (the "HubChicago").     WHEREAS, Hub Chicago has become a wholly owned subsidiary of Hub Group,Inc., a Delaware corporation ("Hub Group") in connection with the restructuringcompleted simultaneously with the initial public offering of Class A CommonStock by Hub Group;     WHEREAS, in connection with such transaction, the Employee will remain anemployee of Hub Chicago;     WHEREAS, the Employee and the Employee's Affiliates will continue to engagein certain businesses after the date hereof; and     WHEREAS, as a condition to the consummation of the transactions describedabove, the parties hereto desire to enter into certain agreements restrictingthe activities of the Employee and the Employee's Affiliates.     NOW, THEREFORE, in consideration of the foregoing and other good andvaluable consideration, the receipt and sufficiency of which hereby areacknowledged, the parties hereto agree as follows: Section 1.  Definitions.  In addition to the terms defined elsewhere in thisAgreement, capitalized terms used herein shall have the meanings set forthbelow:     "Affiliate" with regard to the Employee, means a Person that is controlledby the Employee.  For purposes of this definition, "control" when used withrespect to any Person means the power to direct the management and policies ofsuch Person, whether through the ownership of voting securities, by contract orotherwise.  The term "Affiliates" and "Affiliated" shall have correlativemeanings.  Hub Chicago and its Subsidiaries shall not be deemed to be Affiliatesof the Employee for purposes of this Agreement.     "Intermodal Transport Business" means the utilization of roads, highwaysand/or the railroad system to arrange for the transportation of goods intrailers and/or containers on behalf of third parties from the point of originto their final destination.                                      -2-      "Partnerships" means each partnership in which Hub Chicago holds a generalpartnership interest.     "Person" means an individual, corporation, proprietorship, firm,partnership, limited partnership, trust, association or other entity.     "Restricted Area" means any state or other jurisdiction in which HubChicago currently transacts any business such that it is required to obtain acertificate of authority or to be licensed to transact business in such state orjurisdiction and each state or other jurisdiction in which Hub Chicago shall,immediately preceding the date on which the Employee is no longer employed byHub Chicago or the sole stockholder of Hub Chicago, transact any business suchthat it is required to obtain a certificate of authority or to be licensed totransact business in such state or jurisdiction.  Notwithstanding the foregoing,the Restricted Area shall not include those areas in which Hub Chicago isrequired to obtain a certificate of authority or to be licensed to transactbusiness solely because Hub Chicago is the general partner of any Partnership.     "Subsidiaries" means any entity, at least 50% of the equity of which isowned by Hub Chicago and shall include the Partnerships.     Section 2.  Agreement not to Compete.  During the term beginning on thedate hereof and continuing until one (1) year after the Employee is no longer anemployee of Hub Chicago, the Employee shall not, and will cause the Employee'sAffiliates to not, anywhere within the Restricted Area, directly or indirectly,engage in the ownership, management or operation of the Intermodal TransportBusiness on behalf of any Person other than Hub Chicago or the sole stockholderof Hub Chicago.  In addition, during the term described in the precedingsentence, the Employee shall be obligated to present to Hub Chicago allopportunities to acquire any interest in the Intermodal Transport Business,which opportunities the Employee or the Employee's Affiliates would be entitledto pursue on their own behalf but for the terms of this Agreement.     Section 3.  Limitations on Non-Competition.  Notwithstanding anything tothe contrary contained in this Agreement, the Employee and the Employee'sAffiliates may:     (a) be an owner, directly or indirectly, of securities of any class of HubChicago or any of its affiliates or Subsidiaries;     (b) be an owner of up to 1% of the outstanding stock of any class ofsecurities of a Person (public or private) primarily engaged in the IntermodalTransport Business, so long as (i) the Employee and any of the Employee'sAffiliates have no active participation (except to the extent permitted byclause (c) below) in the business                                      -3-      of such Person and (ii) the Employee and any of the Employee's Affiliates     do not in the aggregate own more than 5% of such Person; and          (c)  be an owner of the outstanding stock of any class of securities     of a Person (public or private) primarily engaged in the business of     providing transportation or logistic services; provided, that such Person     does not directly compete with the Partnerships, Hub Chicago or the sole     stockholder of Hub Chicago within the Restricted Area.     Section 4.  Restriction on Purchase of Securities.  The Employee agreesthat the Employee will not acquire, directly or indirectly, beneficial ownershipof the shares of capital stock of Hub Group, during the period beginning on thedate of this Agreement and expiring 180 days thereafter.     Section 5.     Confidential Information.          (a)  The Employee acknowledges that, by virtue of the Employee's     employment by Hub Chicago, the Employee will be granted otherwise     prohibited access to confidential and proprietary data of Hub Chicago, the     Partnerships and the sole stockholder of Hub Chicago, which information is     not known either to competitors of the Partnerships, Hub Chicago or the     sole stockholder of Hub Chicago, or otherwise. This information (herein,     the "Confidential Information") includes, but is not limited to: (i)     specialized strategies, practices and procedures for obtaining and     maintaining clients; (ii) computer systems, software programs and related     enhancements of the Partnerships, Hub Chicago and the sole stockholder of     Hub Chicago or of the clients of the foregoing; (iv) policies, practices     and procedures relating to pricing of services, including agreements with     the providers of transportation and the related fee schedules; (v) ongoing     service agreements information relating to the identity of clients of the     Partnerships, Hub Chicago and the sole stockholder of Hub Chicago; (vi) key     contacts at such clients; (vii) specifics concerning the nature and extent     of services previously or currently being provided to or planned for such     clients; and (viii) any other essential information concerning such     clients' particularized needs. The Employee agrees that, beginning on the     date hereof and continuing until two (2) years after the Employee is no     longer an employee of Hub Chicago, the Employee will not, without the prior     written consent of the Hub Chicago, divulge any Confidential Information or     make use of it for the Employee's own purposes or the purposes of another.          (b)  The foregoing restrictions shall not prohibit the Employee from     divulging Confidential Information to the extent required by the lawful     order of a court or agency of competent jurisdiction; provided, however, to     the extent that any such court or agency seeks to compel the Employee to     divulge any Confidential Information,                                      -4-      the Employee shall promptly inform Hub Chicago and shall take such     reasonable steps to prevent disclosure of such Confidential Information     until Hub Chicago has been informed of such requested disclosure and Hub     Chicago has had an opportunity to respond to such court or agency.     Section 6.  Reasonable and Necessary Restrictions.  The Employeeacknowledges that the restrictions, prohibitions and other provisions hereof arereasonable, fair and equitable in scope, terms and duration, are necessary toprotect the legitimate business interests of Hub Chicago, and are a materialinducement to Hub Chicago to enter into the transactions contemplated in therecitals hereto.     Section 7.  Specific Performance.  The Employee acknowledges that theobligations undertaken by the Employee pursuant to this Agreement are unique andthat Hub Chicago will not have an adequate remedy at law if the Employee shallfail to perform any of the Employee's obligations hereunder, and the Employeetherefore confirms that Hub Chicago's right to specific performance of the termsof this Agreement is essential to protect the rights and interests of HubChicago.  Accordingly, in addition to any other remedies that Hub Chicago mayhave at law or in equity, Hub Chicago shall have the right to have allobligations, covenants, agreements and other provisions of this Agreementspecifically performed by the Employee, and Hub Chicago shall have the right toobtain preliminary and permanent injunctive relief to secure specificperformance and to prevent a breach or contemplated breach of this Agreement bythe Employee, and the Employee submits to the jurisdiction of the courts in theState of Illinois for this purpose.     Section 8.  Operations of Affiliates.  The Employee agrees that theEmployee will refrain from authorizing any Affiliate to perform any activitiesthat would be prohibited by the terms of this Agreement if they were performedby the Employee directly.     Section 9.     Miscellaneous Provisions.     9.1  Interpretation.  The parties hereto acknowledge that the fundamentalpolicies of this Agreement are to protect Hub Chicago's interest in the businessand assets acquired by it on the date hereof and to eliminate potentialconflicts of interest that may exist as a result of actions taken or proposed tobe taken by the Employee after the date hereof, and this Agreement shall beconstrued and enforced in a manner consistent with and in furtherance of thesepolicies.     9.2  Binding Effect.  Subject to any provisions hereof restrictingassignment, all covenants and agreements in this Agreement by or on behalf ofany of the parties hereto shall bind and inure to the benefit of theirrespective successors, assigns, heirs, and personal representatives.                                      -5-      9.3  Assignment.  None of the parties hereto may assign any of its rightsunder this Agreement, or attempt to have any other entity or individual assumeany of its obligations hereunder, except that Hub Chicago may assign any of itsrights, interests and obligations under this Agreement to any entitycontrolling, controlled by or under common control with Hub Chicago.     9.4  Severability.  If fulfillment of any provision of this Agreement, atthe time such fulfillment shall be due, shall transcend the limit of validityprescribed by law, then the obligation to be fulfilled shall be reduced to thelimit of such validity; and if any clause or provision contained in thisAgreement operates or would operate to invalidate this Agreement, in whole or inpart, then such clause or provision only shall be held ineffective, as thoughnot herein contained, and the remainder of this Agreement shall remain operativeand in full force and effect. The parties shall negotiate in good faith areplacement clause or provision as consistent with the ineffective clause orprovision as is practicable under law.     9.5  Governing Law.  This Agreement, the rights and obligations of theparties hereto, and any claims or disputes relating thereto shall be governed byand construed in accordance with the laws of the State of Illinois, withoutregard to choice-of-law rules thereof.     9.6  Amendment.  Except as otherwise expressly provided in this Agreement,no amendment, modification or discharge of this Agreement shall be valid orbinding unless set forth in writing and duly executed by each of the partieshereto.     9.7  Waiver.  Any waiver by any party or consent by any party to anyvariation from any provision of this Agreement shall be valid only if in writingand only in the specific instance in which it is given, and such waiver orconsent shall not be construed as a waiver of any other provision or as aconsent with respect to any similar instance or circumstance.     9.8  Headings.  Section and subsection headings contained in this Agreementare inserted for convenience of reference only, shall not be deemed to be a partof this Agreement for any purpose, and shall not in any way define or affect themeaning, construction or scope of any of the provisions hereof.     9.9  No Presumption Against Drafter. Each of the parties hereto havejointly participated in the negotiation and drafting of this Agreement. In theevent of an ambiguity or a question of intent or interpretation arises, thisAgreement shall be construed as if drafted jointly by each of the parties heretoand no presumptions or burdens of proof shall arise favoring any party by virtueof the authorship of any of the provisions of this Agreement.     9.10 Execution in Counterparts.  This Agreement may be executed in two ormore counterparts, none of which need contain the signatures of each of theparties hereto and each of which shall be deemed an original.                                      -6-                            *     *     *     *     *                                      -7-      IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, orcaused this Agreement to be duly executed on its behalf, as of the date firstset forth above.                     HUB CITY TERMINALS, INC.                         By:   /s/ David P. Yeager                               --------------------                               Name: David P. Yeager                               Title:  Chief Executive Officer                     EMPLOYEE:                               /s/ Daniel F. Hardman                               ----------------------                               Daniel F. HardmanAttest:/s/ William L. Crowder- -----------------------William L. Crowder                                      -8-                                                                    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"), thesellers identified on the signature pages hereto (each, a "Seller") and HubGroup Distribution Services, an Illinois general partnership ("HubDistribution"), Hub City Terminals, Inc., a Delaware corporation, and Hub GroupAssociates, 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 purchasesuch Interests on the terms and subject to the conditions described herein.     NOW, THEREFORE, in consideration of the premises and of the mutualcovenants, agreements and warranties herein contained, the parties hereto agreeas 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 forthe Purchase Consideration. For purposes of this Agreement, the followingdefinitions 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'sInterest.     3.  Closing. The purchase of the Interests shall occur simultaneously withthe closing of the IPO. The closing shall take place at the offices of Mayer,Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603.Notwithstanding anything to the contrary contained in this Agreement, thetransactions contemplated hereby shall not close and this Agreement shallterminate and no party shall have any liability hereunder (other than ascontemplated by Section 13) if the IPO is not consummated.     4.  Representations and Warranties of Hub Group. Hub Group herebyrepresents 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.                                      -2-           (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.                                      -3-           (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 Groupunder this Agreement are subject to the fulfillment of each of the followingconditions:          (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 Sellersunder this Agreement are subject to the fulfillment of each of the followingconditions:          (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'sremaining Interest in Hub Distribution. At any time on or prior to the thirdanniversary of the closing pursuant to Section 3, Hub Group shall have the rightto purchase all (but not less than all) of the Seller's Interest in                                      -4- Hub Distribution at the price set forth opposite such Seller's name on Exhibit Aattached hereto. Hub Group may exercise its rights hereunder by giving theapplicable Seller written notice of its intention to exercise the Option priorto the expiration thereof. The closing of any exercise of the Option shall takeplace at the offices of Hub Group within 30 days after the date of the notice ofexercise. Upon the closing of the transactions contemplated by an exercise ofthe Option, the applicable Seller shall convey to Hub Group its Interest and HubGroup shall deliver to such Seller the amount in cash set forth opposite suchSeller's name on Exhibit A attached hereto.     9. Successors and Assigns. This Agreement shall be binding upon, and inureto the benefit of, the parties hereto and their respective heirs, personalrepresentatives, successors, assigns and affiliates, but shall not be assignableby any party hereto without the prior written consent of the other partieshereto.     10. Notices. Any notice or other communication provided for herein or givenhereunder 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.     377 East Butterfield Road     Suite 700     Lombard, IL  60148     Attention:  David P. Yeager     Facsimile:  (708) 964-6475     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 assuch party shall notify the other in writing.     11. Waiver. No party may waive any of the terms or conditions of thisAgreement except by a duly signed writing referring to the specific provision tobe waived. Each party hereto hereby consents to the transfer of the Interestshereunder on behalf of itself and, in the case of Hub Associates, on behalf ofHub Distribution.     12.  Entire Agreement. This Agreement constitutes the entire agreement, andsupersedes 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 thecontrary, regardless of whether the transactions contemplated hereby areconsummated, Hub Group shall                                      -5- pay all expenses of the parties hereto incident to preparing for, entering intoand carrying out this Agreement and the consummation of the transactionscontemplated hereby.     14.  No Third Party Beneficiaries.  This Agreement is solely for thebenefit 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 heldinvalid, illegal or unenforceable, the validity, legality or enforceability ofthe other provisions hereof shall not be affected thereby, and there shall bedeemed substituted for the provision at issue a valid, legal and enforceableprovision as similar as possible to the provision at issue.     16.  Captions.  The Section and Paragraph captions herein are forconvenience of reference only, do not constitute part of this Agreement andshall not be deemed to limit or otherwise affect any of the provisions hereof.     17.  Counterparts.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original but all of which shallconstitute one and the same instrument.     18.  Governing Law.  This Agreement shall be governed by, and construed andenforced in accordance with, the laws of the State of Delaware.     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted and delivered as of the day and year first executed.                                HUB GROUP, INC.                                By:      *                                   ------------------------------                                   David P. Yeager                                   Vice Chairman                                HUB GROUP DISTRIBUTION SERVICES, an                                 Illinois general partnership                                By:  HUB GROUP ASSOCIATES, INC.,                                     its Managing Partner                                By:      *                                   ------------------------------                                   David P. Yeager                                   Authorized Officer                                      -6-                                       HUB CITY TERMINALS, INC.                                      HUB GROUP ASSOCIATES, INC.                                              By:             *                                         -----------------------------                                              David P. Yeager                                         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:             *                                         -----------------------------                                         David P. Yeager                                         Authorized Officer                           *                By: /s/ David P. Yeager                    --------------------------                    David P. Yeager                                      -7-                                    EXHIBIT A                        APPLICABLE SELLER'S PERCENTAGE                        ------------------------------                                                          Applicable                                                          Seller's        OptionSeller                                                   Percentage       Price- ------                                                   ----------      -------                                                                                Hub City Alabama Terminals, Inc..........................   0.65%        $15,640 2100 Riverchase Center Suite 110 Birmingham, AL  35244 Facsimile:  (205) 988-3650Hub City Atlanta Terminals, Inc..........................   2.60          62,561 3700 Market St. Bldg. E - Suite 2 Clarkson, GA  30021 Facsimile:  (404) 294-0464Hub City Boston Terminals, Inc...........................   1.95          46,921 225 Turnpike Rd. - 3rd Floor Southboro, MA  01772 Facsimile:  (508) 460-0952Hub City Cleveland Terminals, Inc........................   0.65          15,640 7000 Fitzwater Rd. Suite 201 Brecksville, OH  44141 Facsimile:  (216) 526-2672Hub City Dallas Terminals, Inc...........................   0.65          15,640 1700 Alma Drive - Suite 550 Plano, TX  75075 Facsimile:  (214) 422-5876Hub City Detroit Terminals, Inc..........................   1.95          46,921 800 N. Crooks Clawson, MI  48017 Facsimile:  (810) 280-6425Hub City Florida Terminals, Inc..........................   0.65          15,640 2105 Park Ave. - Suite 17 Orange Park, FL  32073 Facsimile:  (904) 264-8588Hub City Golden Gate Terminals, Inc......................   1.95          46,921                                       A-1                                                          Applicable                                                          Seller's        OptionSeller                                                   Percentage       Price- ------                                                   ----------      -------                                                                                 31 Panoramic Way Walnut Creek, CA  94595 Facsimile:  (510) 930-0299Hub City Houston Terminals, Inc.........................    0.65%        $15,640 1770 St. James Place                                               Suite 602                                                          Houston, TX  77056                                                 Facsimile:  (713) 622-7775                                        Hub City Indianapolis Terminals, Inc....................    1.95          46,921 921 E. 86th Avenue                                                 Suite 100                                                          Indianapolis, IN  46240                                            Facsimile:  (317) 475-7335                                        Hub City Kansas City Terminals, Inc.....................    1.30          31,280 9250 Glenwood Street                                               Overland Park, KS  66212                                           Facsimile:  (913) 381-6334                                        Hub City Los Angeles Terminals, Inc.....................    1.95          46,921 1698 Greenbriar Land                                               Suite 224                                                          Brea, CA  92621                                                    Facsimile:  (714) 671-0854                                        Hub City Mid Atlantic Terminals, Inc....................    0.65          15,640 8600 LaSalle Rd.                                                   Oxford Bldg., Suite 633                                            Towson, MD  21286                                                  Facsimile:  (410) 583-5310                                        Hub City New Haven Terminals, Inc.......................    1.95          46,921 1171 Main St. - Suite 8                                            P.O. Box 1085                                                      Branford, CT  06405                                                Facsimile  (203) 481-8328                                         Hub City Terminals of New Orleans, Inc..................    0.65          15,640 285 West Esplanade Ave.                                            Suite 406                                                          Kenner, LA  70065                                                  Facsimile:  (504) 469-4922                                        Hub City New York State Terminals, Inc..................    0.65          15,640                                      A-2                                                          Applicable                                                          Seller's        OptionSeller                                                   Percentage       Price- ------                                                   ----------      -------                                                                                150 Allens Creek Rd. Rochester, NY  14618 Facsimile:  (716) 271-1465Hub City Terminals, Inc., New York-New Jersey...........    1.95%        $46,921 115 Grande Avenue                                                  Englewood, NJ  07631-3521                                          Facsimile:  (201) 816-01343                                       Hub City North Central, Inc.............................    1.95          46,921 9242 W. National Ave.                                              Milwaukee, WI  53227                                               Facsimile:  (414) 545-7424                                        Hub City Ohio Terminals, Inc............................    3.25          78,201 7015 W. Spring Meadows Drive                                       Suite 201                                                          Holland, OH  43258                                                 Facsimile:  (419) 867-4110                                        Hub City Philadelphia Terminals, Inc....................    0.65          15,640 407 W. Lincoln Highway                                             Suite 100                                                          Exton, PA  19341-2521                                              Facsimile:  (610) 524-6405                                        Hub City Pittsburgh Terminals, Inc......................    1.95          46,921 2550 Boyce Plaza Rd.                                               Suite 200                                                          Pittsburgh, PA  15241                                              Facsimile:  (412) 257-4224                                        Hub City Portland Terminals, Inc........................    1.95          46,921 10550 S.W. Allen Blvd.                                             Suite 211                                                          Beaverton, OR  97005                                               Facsimile:  (503) 626-4002                                        Hub City Rio Grande Terminals, Inc......................    0.65          15,640 8209 Roughrider - Suite 200                                        San Antonio, TX 78239-2420                                         Facsimile:  (210) 656-1257                                        Hub City Terminals, Incorporated, St. Louis.............    1.95          46,921 10420 Old Olive Street Rd. 3rd Floor                                      A-3                                                          Applicable                                                          Seller's        OptionSeller                                                   Percentage       Price- ------                                                   ----------      -------                                                                                   St. Louis, MO  63141 Facsimile:  (314) 993-1317Hub City Tennessee Terminals, Inc..............             1.95%        $46,921 751 Walnut Knoll Lane Memphis, TN  38018 Facsimile:  (901) 758-0099Hub Group Partners, Inc........................             26.00        625,625 1035 Havens Court Downers Grove, IL  60515 Facsimile:  (708) 971-2421                                      A-4                                                                       EXHIBIT 10.6                              MANAGEMENT AGREEMENT          THIS MANAGEMENT AGREEMENT (this "Agreement"), dated as of March 18,1996, is among Hub Group, Inc., a Delaware corporation ("Hub Group"), Hub CityTerminals, Inc., a Delaware corporation ("Hub Chicago") and the parties listedon the signature pages hereto.          WHEREAS, concurrently with the execution of this Agreement, Hub Group,through its wholly owned subsidiary Hub Chicago, is entering into a Purchase andSale Agreement ("Purchase and Sale Agreement") pursuant to which Hub Chicagowill purchase the general partnership interest in the limited partnershipsidentified on the signature pages hereto (each a "Hub Partnership");          WHEREAS, concurrently with the execution of this Agreement, HubChicago is entering into an Amended and Restated Agreement of LimitedPartnership ("Limited Partnership Agreement") pursuant to which Hub Chicago willact as general partner for each Hub Partnership;          WHEREAS, concurrently with the execution of this Agreement, Hub Groupis consummating an initial public offering of its shares of Class A Common Stock(the "IPO"); and          WHEREAS, Hub Group, Hub Chicago and each of the Hub Partnershipsdesire to enter into this Agreement delineating certain fundamental businesspractices which govern the relationship between each Hub Partnership, HubChicago and Hub Group after the IPO; and          WHEREAS, the members of the Board of Directors of Hub Group who arenot employees of Hub Group, Hub Chicago or any of the Hub Partnerships and whoare not descendants or immediate family members of Phillip C. Yeager (the"Independent Directors") have adopted policies governing the relationshipbetween each Hub Partnership, Hub Chicago and Hub Group; and          WHEREAS, Hub Group, Hub Chicago and each of the Hub Partnerships wishto set forth these policies in this Agreement.          NOW, THEREFORE, in consideration of the foregoing and other good andvaluable consideration, the receipt and sufficiency of which hereby areacknowledged, the parties hereto agree as follows:  A.  Operating Procedures.     1.  Territorial Boundaries.  Previously defined territorial marketingboundaries set up for each Hub Partnership and Hub Chicago will remain in effectafter the IPO. These boundaries may only be amended from time to time by theIndependent Directors.     2.  Administrative Services.  Each Hub Partnership and other operatingentities will be charged for administrative services provided by Hub Group,including, but not limited to, administrative, customer service, nationalaccounts sales and international sales. Rates and formulas will be used toassess commissions and fees to each Hub Partnership and other entities forprovided services. The Executive Committee of the Board of Directors of HubGroup may adjust the rates or formulas from time to time to eliminate anyexcess/deficit.     It is expected that total costs for Hub Group administrative services willbe offset with credits from fees and commissions. Any excess or deficitremaining at the end of each quarter will be charged or distributed, as the casemay be, to the Hub Partnerships or other operating entities.     3.  New Business Ventures.  Hub Group and Hub Chicago will have the rightof first refusal as to all new business ventures. For purposes of clarification,and without limitation, examples of new business ventures include air freight,overseas operations and ocean transportation. A new business venture cannot beoffered to the Hub Partnerships until Hub Group and Hub Chicago have bothindicated by board resolution or other writing that neither Hub Group nor HubChicago, respectively, desire to pursue this new business venture. The HubPartnerships will be used for vendor services to new business ventures subjectto cost and service capabilities.     4.  Capital Investments.  An annual rate equal to the corporate base rateas most recently announced by The First National Bank of Chicago at Chicago,Illinois plus 1% will be assessed to the Hub Partnerships for capitalinvestments made by Hub Group or Hub Chicago on behalf of the Hub Partnerships.This assessment will be in addition to the monthly depreciation recorded for thecapital expenditures. This assessment will be based on the undepreciated balanceof the aforementioned capital investments.     5.  Employee Compensation.  With respect to any compensation based on theequity of Hub Group that is paid by Hub Group to an employee of (or otherservice-provider to) the Hub Partnership, the Hub Partnership shall reimburseHub Group for the cost of such compensation, based on the fair market value ofthe equity as of the date the compensation is includible in the income of theemployee or other                                      -2-      service-provider (or, if not includible in the income of the employee or     other service-provider, based on the fair market value of the equity at the     time the compensation is no longer subject to restriction).     B. Modification, Termination and Amendment. This agreement may be changed,terminated or amended only by a majority of the Independent Directors.     C. Annual Review. In connection with the annual audit of the financialstatements of Hub Group and Hub Chicago, the independent public accountants forHub Group and Hub Chicago will determine compliance with the terms of thisAgreement.     D. Governing Law. This Agreement shall be governed by, and construed andenforced in accordance with, the laws of the State of Delaware.     E. Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of which shallconstitute one and the same instrument.     F. Severability. If any provision of this Agreement shall be held invalid,illegal or unenforceable, the validity, legality or enforceability of the otherprovisions hereof shall not be affected thereby, and there shall be deemedsubstituted for the provision at issue a valid, legal and enforceable provisionas similar as possible to the provision at issue.     G. No Third Party Beneficiaries. This Agreement is solely for the benefitof the parties hereto and no provision of this Agreement shall be deemed toconfer upon other third parties any remedy, claim, liability, reimbursement,cause of action or other right.      H. Waiver. No party may waive any of the terms or conditions of thisAgreement except by a duly signed writing referring to the specified provisionto be waived.                                      -3-      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:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY TERMINALS, INC.                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY ALABAMA PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY ATLANTA PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                      -4-                                 HUB CITY BOSTON PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     -------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY CANADA PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY CLEVELAND PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY DALLAS PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                      -5-                                 HUB CITY DETROIT PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY FLORIDA PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY GOLDEN GATE PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY HOUSTON PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                      -6-                                 HUB CITY INDIANAPOLIS PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY KANSAS CITY PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY LOS ANGELES PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY MID ATLANTIC PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                      -7-                                    Title: Chief Executive Officer                                HUB CITY NEW HAVEN PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY NEW ORLEANS PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY NEW YORK STATE PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY NEW YORK - NEW JERSEY PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                      -8-                                 By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                                                                                                HUB CITY NORTH CENTRAL PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                                                                                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                                                                                                HUB CITY OHIO PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                                                                                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY PHILADELPHIA PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                                                                                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                                                                                                HUB CITY PITTSBURGH PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                      -9-                                 By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY PORTLAND PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY RIO GRANDE PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                HUB CITY ST. LOUIS PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                By:  *                                     ------------------------------------------                                     Name: David P. Yeager                                     Title: Chief Executive Officer                                     -10-                                 HUB CITY TENNESSEE PARTNERS, L.P.                                By:  HUB CITY TERMINALS, INC., GENERAL PARTNER                                     By:  *                                          -------------------------------------                                          Name: David P. Yeager                                          Title: Chief Executive Officer                               *By:     /s/ David P. Yeager                                        ---------------------------------------                                        Name: David P. Yeager                                     -11-                                                                    EXHIBIT 10.7                            STOCKHOLDERS' AGREEMENT     THIS AGREEMENT is made as of March 18, 1996, by and among Phillip C.Yeager, David P. Yeager, the Laura C. Yeager 1994 GST Trust, the Matthew D.Yeager 1994 GST Trust, the Phillip D. Yeager 1994 GST Trust, Mark A. Yeager, theAlexander B. Yeager 1994 GST Trust, the Samantha N. Yeager 1994 GST Trust, andDebra A. Jensen (each, a "Stockholder" and collectively, the "Stockholders").                             W I T N E S S E T H:                                   WHEREAS, the Stockholders are the holders of all of the outstanding sharesof Class B Common Stock, $0.01 par value per share (the "Class B Stock"), of HubGroup, Inc., a Delaware corporation (the "Company"); and     WHEREAS, the Stockholders wish to record, among other matters, theirunderstanding regarding the voting of the Class B Stock and their respectiverights to transfer shares of Class B Stock.     NOW, THEREFORE, in consideration of the foregoing and the mutual covenantsand agreements herein contained, the parties agree as follows:                                   ARTICLE I                                  DEFINITIONS                                            Section 1.1  Definitions.  In addition to the terms defined elsewherein this Agreement, the following terms shall have the following meanings for thepurposes of this Agreement:          "Company" shall have the meaning ascribed thereto in the preamble.          "Class A Stock" shall mean the shares of Class A Common Stock, $0.01par value per share, of the Company.          "Class B Stock" shall have the meaning ascribed thereto in thepreamble, together with (i) any shares of Class B Stock that subsequently may beissued or issuable with respect to the Class B Stock as a result of a stocksplit or dividend or any sale, transfer, assignment or other transactioninvolving the Class B Stock by the Company, (ii) any securities into which theClass B Stock may thereafter be changed as a result of merger, consolidation,recapitalization or otherwise (other than securities issued upon conversion ofClass B Stock pursuant to the terms thereof) and (iii) any shares of Class BStock acquired pursuant to this Agreement.      "Offer" shall have the meaning ascribed thereto in Section 2.2(a).          "Offered Interest" shall have the meaning ascribed thereto in Section2.2(a).      "Offerees" shall have the meaning ascribed thereto in Section 2.2(a).      "Offering Stockholder" shall have the meaning ascribed thereto in Section2.2(a).      "Permitted Transferee" shall mean Phillip C. Yeager, the descendants(whether natural or adopted) of Phillip C. Yeager, the spouse of Phillip C.Yeager or any descendant (whether natural or adopted) of Phillip C. Yeager, anyestate of any of the foregoing, any trust for the primary benefit of any one ormore of the foregoing and any Person, all of the outstanding equity securitiesof which are owned by any one or more of the foregoing.      "Person" shall mean any individual, corporation, proprietorship, firm,partnership, limited partnership, trust, association or other entity.     "Stockholder" or "Stockholders" shall have the meanings ascribedthereto in the preamble, together with any Person who becomes subject to thisAgreement pursuant to Article II hereof.     "Transfer" shall mean any transaction by which a Stockholder purportsto assign its shares of Class B Stock to another Person and shall include asale, assignment, bequest, pledge, encumbrance, hypothecation, mortgage,exchange or other disposition by of law or otherwise. For purposes of thisAgreement, the term "Transfer" shall include a conversion of shares of Class BStock into shares of Class A Stock of the Company pursuant to the Company'sCertificate of Incorporation.                                   ARTICLE II                            RESTRICTIONS ON TRANSFER     Section 2.1  No Transfer of Class B Stock Except in Compliance withAgreement.  No Stockholder shall Transfer its shares of Class B Stock, except incompliance with the provisions of this Article II.     Section 2.2  Transfers Pursuant to a Right of First Refusal.          (a) If a Stockholder (the "Offering Stockholder") desires to Transferall or any portion of its shares of Class B Stock (all or such portion ishereinafter referred to as the "Offered Interest") to any Person who is not aPermitted Transferee, the Offering Stockholder shall first deliver to each otherStockholder (the "Offerees"), a written notice setting forth an offer to sellthe Offered Interest, pro rata to each Offeree in accordance with its percentageownership of Class B Common Stock, for a specified cash dollar                                       2 amount per share (which price, in the event of a conversion of Class B Stockpursuant to the Company's Certificate of Incorporation or any other Transfer forwhich a price is not specified, shall be the closing sale price of the shares ofClass A Stock on the Nasdaq Stock Market on the date of the notice) and onspecified terms and conditions (the "Offer").  For a period of 30 days afterreceipt by the Offeree of an Offer, the Offeree shall have a first right topurchase its pro rata portion of the Offered Interest.  To exercise its rightshereunder, an Offeree must deliver to the Offering Stockholder a written noticesetting forth the number of shares of Class B Stock such Offeree desires topurchase and, if such Offeree desires to purchase more than its pro rata portionof the Offered Interest, a statement of the maximum additional amount of theOffered Interest such Offeree would purchase if the other Offerees elect not topurchase their pro rata share.  In the event that any Offeree shall havedeclined to exercise its right to purchase a portion of the Offered Interest andthe other Offerees shall have timely exercised their rights to purchase,indicating in their written notices a desire to purchase a total percentage inexcess of 100% of the Offered Interest, such Offerees shall be allocated sharesof the Offered Interest pro rata in accordance with their percentage ownershipof shares of Class B Stock.          (b) In the event that any Offerees shall have timely elected topurchase all or a portion of the Offered Interest in accordance with Section2.2(a), the Offering Stockholder shall sell the Offered Interest to suchOfferees at the cash price and upon the terms and conditions set forth in theOffer, and the parties shall otherwise consummate said transaction no later than45 days after the delivery of the Offer to the Offerees.          (c) To the extent that the Offerees have not elected to purchase allof the Offered Interest, the Offering Stockholder may, within 90 days after theexpiration of the Offerees' right to purchase referred to in Section 2.2(a),Transfer the Offered Interest to a Person other than a Permitted Transferee;provided, however, that such Transfer shall be effected at a price no less thanthe price specified in the Offer and on other terms and conditions no morefavorable to the transferees than those contained in the Offer.  After theexpiration of such 90-day period, any proposed Transfer of all or any portion ofthe shares of Class B Stock held by the Offering Stockholder shall once again besubject to the provisions of this Section 2.2.          Section 2.3  Transfers to Permitted Transferees.  A Stockholder mayTransfer its shares of Class B Stock to a Permitted Transferee who is not aparty to this Agreement if and only if such Permitted Transferee (or theguardian or other legal representative) has agreed in writing to be bound by allof the terms and conditions of this Agreement.                                       3                                  ARTICLE III                                VOTING AGREEMENT          Section 3.1  Voting Agreement.  Each Stockholder hereby agrees to voteall of its shares of Class B Stock or to cause all of its shares of Class BStock to be voted as directed by a majority in interest of the outstandingshares of Class B Stock.          Section 3.2  Stockholder Vote.  For purposes of effecting theagreement set forth in Section 3.1, the Stockholders shall, within 5 days afterreceipt by the Stockholders of a notice from the Company calling for a meetingand vote of its stockholders upon any matter, vote (in accordance with theirpercentage ownership of shares of Class B Stock) to determine how theStockholders shall vote their shares of Class B Stock pursuant to Section 3.1.The vote required by this Section 3.2 shall take place at the Company'sprincipal executive offices and Stockholders may participate in such vote inperson (which may include presence by telephone conference call) or by proxy.Any shares of Class B Stock not represented at such meeting shall be deemed tohave voted against the matter presented by the Company for stockholder action.          Section 3.3  Action by Written Consent.  In the event that anyStockholder desires that the Stockholders take any action by written consent,the Stockholder proposing such action shall deliver to the other Stockholders awritten notice setting forth the matter proposed to be acted upon by theStockholders and setting forth the date, time and place of the meeting ofStockholders to consider and act upon the proposal (which meeting shall takeplace within 5 days after receipt by the Stockholders of such notice).  At suchmeeting, the Stockholders shall vote (in accordance with their percentageownership of shares of Class B Stock) to determine how the Stockholders shallvote their shares of Class B Stock pursuant to Section 3.1 for purposes oftaking the proposed action.  Stockholders may participate in the vote requiredby this Section 3.3 in person (which may include presence by telephoneconference call) or by proxy.  Any shares of Class B Stock not represented atsuch meeting shall be deemed to have voted against the matter presented by theproposing Stockholder.                                   ARTICLE IV                                 MISCELLANEOUS          Section 4.1  Notices.  Any notice, request, instruction or otherdocument to be given hereunder by a party hereto shall be in writing and shallbe deemed to have been given, (a) when received if delivered in person or bycourier or a courier service, (b) on the date of transmission if sent byfacsimile or other wire transmission, or (c) three days after being deposited inthe U.S. mail, certified or registered mail, postage prepaid, in each caseaddressed as set forth on the signature pages hereto or to such other address asa party hereto may designate for itself by notice given as herein provided.Whenever this Agreement requires notice to be given, or requires an action to betaken, as of a certain date, such notice or action shall be deemed to have beentimely                                       4 given or taken if such notice is given or such action is taken prior to the datecalled for by the other provisions of this Agreement.          Section 4.2  Binding Effect. This Agreement shall be binding upon andinure to the benefit of each of the parties hereto and their respective heirs,legal representatives, executors, successors and permitted assigns.          Section 4.3  Captions. The captions in this Agreement are forconvenience of reference only and shall not be deemed to alter or affect anyprovision hereof or interpretation hereof.          Section 4.4  Counterparts. This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.          Section 4.5  Applicable Law. This Agreement shall be governed by andconstrued in accordance with the internal laws of the State of Delaware withoutgiving effect to the principles of conflicts of law thereof.          Section 4.6  Assignment. Neither this Agreement nor any right orobligation hereunder is assignable in whole or in part, whether by operation oflaw or otherwise, by any party hereto except (i) with the prior written consentof each of the other parties and (ii) assignments made pursuant to, and inaccordance with, the other terms of this Agreement in connection with Transfersof shares of Class B Stock made in accordance with the terms of this Agreement.          Section 4.7  Waivers. The failure of any party hereto at any time ortimes to require performance of any provision hereof will in no way affect itsright at a later time to require the performance of that provision. No waiver byany party of any condition or of any breach of any term or condition containedin this Agreement will be effective unless in writing. No waiver in any one ormore instances will be deemed to be a further or continuing waiver of anycondition or breach in any other instance or waiver of any other condition orbreach.          Section 4.8  Specific Performance. The parties acknowledge thatmonetary damages will be insufficient for a breach of many of the provisions ofthis Agreement. Therefore, each party agrees that, upon a breach of anyprovision of this Agreement, the nondefaulting party(ies) may sue for and obtainan injunction or specific performance of such provision in any appropriatecourt.          Section 4.9 Entire Understanding. This Agreement sets forth the entireagreement and understanding of the parties hereto and supersedes any and allprior agreements, arrangements and understandings among the parties regardingthe subject matter hereof.                                       5           Section 4.10  Severability. If any provision of this Agreement shallbe held invalid, illegal or unenforceable, the validity, legality orenforceability of the other provisions hereof shall not be affected thereby, andthere shall be deemed substituted for the provision at issue a valid, legal andenforceable provision as similar as possible to the provision at issue.          Section 4.11  Amendments. This Agreement may be amended only by written agreement signed by all of the parties hereto.          Section 4.12  Termination of Agreement. This Agreement shall terminateupon an agreement to terminate this Agreement by the written consent of theStockholders holding two-thirds of the Class B Stock, or, as to any Stockholder,when such Stockholder ceases to be a Stockholder due to the Transfer of all ofsuch Stockholder's shares of Class B Stock in accordance with this Agreement.                                       6      IN WITNESS WHEREOF, the parties hereto have caused this Agreement tobe executed and delivered effective as of the date first above written.                         /s/ Phillip C. Yeager                         ---------------------                         Phillip C. Yeager                         c/o Hub Group, Inc.                         377 E. Butterfield Rd., Suite 700                         Lombard, IL  60148                         /s/ David P. Yeager                         -------------------                         David P. Yeager                         c/o Hub Group, Inc.                         377 E. Butterfield Rd., Suite 700                         Lombard, IL  60148                         Laura C. Yeager 1994 GST Trust                         By:  /s/ David P. Yeager                              -------------------                              David P. Yeager                              Trustee                              c/o Hub Group, Inc.                              377 E. Butterfield Rd., Suite 700                              Lombard, IL  60148                         Matthew D. Yeager 1994 GST Trust                         By:  /s/ David P. Yeager                              -------------------                              David P. Yeager                              Trustee                              c/o Hub Group, Inc.                              377 E. Butterfield Rd., Suite 700                              Lombard, IL  60148                                       7                          Phillip D. Yeager 1994 GST Trust                         By:  /s/ David P. Yeager                              ---------------------                              David P. Yeager                              Trustee                              c/o Hub Group, Inc.                              377 E. Butterfield Rd., Suite 700                              Lombard, IL  60148                         /s/ Mark A. Yeager                         ------------------                         Mark A. Yeager                         c/o Hub Group, Inc.                         377 E. Butterfield Rd., Suite 700                         Lombard, IL  60148                         Alexander B. Yeager 1994 GST Trust                         By:  /s/ Mark A. Yeager                              ------------------                              Mark A. Yeager                              Trustee                              c/o Hub Group, Inc.                              377 E. Butterfield Rd., Suite 700                              Lombard, IL  60148                         Samantha N. Yeager 1994 GST Trust                         By:  /s/ Mark A. Yeager                              ------------------                              Mark A. Yeager                              Trustee                              c/o Hub Group, Inc.                              377 E. Butterfield Rd., Suite 700                              Lombard, IL  60148                         /s/ Debra A. Jensen                         -------------------                         Debra A. Jensen                         c/o Hub Group, Inc.                         377 E. Butterfield Rd., Suite 700                         Lombard, IL  60148                                       8                                                                    EXHIBIT 11.1                       STATEMENT RE:  EARNINGS PER SHARE                   (In thousands, except per share amounts)                                                      1995      1995      1996                                                    --------  --------  --------                                                                                Pro forma weighted average shares outstanding          1,662     1,662     5,000Net effect of non-qualified stock options based on  the treasury stock method using the average  market price                                           -         -          58                                                    --------  --------  --------Pro forma weighted average shares and share  equivalents outstanding                              1,662     1,662     5,058                                                    ========  ========  ========Pro forma net income                                $  1,444  $  1,583  $  6,803                                                    ========  ========  ========Pro forma earnings per share                        $   0.87  $   0.95  $   1.35                                                    ========  ========  ========                                                                      Exhibit 21                         Subsidiaries of Hub Group, Inc. SUBSIDIARIES                                                JURISDICTION OF                                                      INCORPORATION/ORGANIZATION                                                           Hub City Terminals, Inc.                                        Delaware                                                   Hub City Alabama, L.P.                                          Delaware                                                   Hub City Atlanta, L.P.                                          Delaware                                                   Hub City Boston, L.P.                                           Delaware                                                   Hub City Canada, L.P.                                           Delaware                                                   Hub City Cleveland, L.P.                                        Delaware                                                   Hub City Dallas, L.P.                                           Delaware                                                   Hub City Detroit, L.P.                                          Delaware                                                   Hub City Florida, L.P.                                          Delaware                                                   Hub City Golden Gate, L.P.                                      Delaware                                                   Hub City Houston, L.P.                                          Delaware                                                   Hub City Indianapolis, L.P.                                     Delaware                                                   Hub City Kansas City, L.P.                                      Delaware                                                   Hub City Los Angeles, L.P.                                      Delaware                                                   Hub City Mid Atlantic, L.P.                                     Delaware                                                   Hub City New Haven, L.P.                                        Delaware                                                   Hub City New Orleans, L.P.                                      Delaware                                                   Hub City New York State, L.P.                                   Delaware                                                   Hub City New York-New Jersey, L.P.                              Delaware                                                   Hub City North Central, L.P.                                    Delaware                                                   Hub City Ohio, L.P.                                             Delaware                                                   Hub City Philadelphia, L.P.                                     Delaware                                                   Hub City Pittsburgh, L.P.                                       Delaware                                                   Hub City Portland, L.P.                                         Delaware                                                   Hub City Rio Grande, L.P.                                       Delaware                                                   Hub City St. Louis, L.P.                                        Delaware                                                   Hub City Tennessee, L.P.                                        Delaware                                                   Hub Group Associates, Inc.                                      Illinois                                                   Hub Highway Services                                            Illinois                                                   Hub Group Distribution Services                                 Illinois                                                                      Hub Holdings, Inc.                                               Delaware                                                    Q.S. of Illinois, Inc.                                           Illinois                                                Quality Services L.L.C.                                          Missouri                                                Quality Services of Kansas, L.L.C.                                Kansas                                                Quality Services of New Jersey, L.L.C.                          New Jersey                                                Quality Services of Michigan L.L.C.                              Michigan                                                Q.S. of Georgia, L.L.C.                                           Georgia                                                                    Exhibit 23.1                    Consent of Independent Public Accountants                   -----------------------------------------                             As independent public accountants, we hereby consent to theincorporation of our reports dated February 6, 1997 for Hub Partnerships and HubGroup, Inc. included in this Form 10-K, into Hub Group, Inc.'s previously filedRegistration Statement File No. 333-6327 on Form S-8.                                   ARTHUR ANDERSEN  LLPChicago, IllinoisMarch 25, 1997           
 5 This schedule contains summary financial information extracted fromConsolidated Statements of Operations and Consolidated Balance Sheets and isqualified in its entirety by reference to such financial statements.                                                               YEAR                         DEC-31-1996                              DEC-31-1996                                         13,893                                         0                                 115,480                                    1,355                                         0                               131,550                                                16,780                                                  2,722                                    201,225                               115,673                                                0                                             59                               0                                          0                                      46,065                         201,225                                                      0                                        754,243                                                         0                                          662,679                                         63,639                                         915                                      996                                       11,338                                           4,294                                  27,925                                            0                                       0                                                 0                                      6,803                                     1.35                                        0