Document:

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                              AMENDED AND RESTATED

                                   INTERMODAL

                       TRANSPORTATION AGREEMENT NO. 11111

                               DATED MAY 13, 2002

                                     BETWEEN

                              CSX INTERMODAL, INC.,

                           PACER INTERNATIONAL, INC.,

                             d/b/a PACER STACKTRAIN

                   (f/k/a APL LAND TRANSPORT SERVICES, INC.,)

                                   APL LIMITED

                                       AND

                                APL CO. PTE LTD.

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                                TABLE OF CONTENTS

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1.    INTERPRETATION..............................................................................................1

2.    RECITALS....................................................................................................2

3.    TERM........................................................................................................2

4.    CSXI'S SERVICES.............................................................................................2

5.    APL'S/LTS' RESPONSIBILITIES.................................................................................5

6.    SOUTH KEARNY TERMINAL.......................................................................................7

7.    RAIL RATES AND OTHER CHARGES................................................................................7

8.    RATE ADJUSTMENTS............................................................................................9

9.    COMPETITIVE PROPOSALS.......................................................................................9

10.      SERVICE LEVEL COMMITMENT.................................................................................9

11.      PAYMENT OF PRICES AND CHARGES............................................................................9

12.      COMMUNICATIONS..........................................................................................10

13.      USE OF CSXI'S FACILITIES; COMPLIANCE WITH LAWS..........................................................11

14.      LIABILITY AND CLAIMS PROCEDURES.........................................................................12

15.      INDEMNIFICATION.........................................................................................13

16.      FORCE MAJEURE...........................................................................................13

17.      CONFIDENTIALITY.........................................................................................14

18.      FEDERAL CONTRACTOR REQUIREMENTS.........................................................................14

19.      DEFAULT.................................................................................................15

20.      INDEPENDENT CONTRACTOR..................................................................................16

21.      ASSIGNMENT..............................................................................................16

22.      DISPUTE RESOLUTION......................................................................................17

23.      AUDIT...................................................................................................19

24.      GENERAL.................................................................................................20
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                                  APPENDIX LIST
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APPENDIX             1.1   DEFINITIONS............................................................................1
APPENDIX             4.1   RAIL SERVICES AND LINEHAUL RATES.......................................................8
APPENDIX             4.3   TERMINAL AND CONTAINER YARD SERVICES...................................................9
APPENDIX             4.4   COOPERATIVE EFFORTS TO MINIMIZE COSTS.................................................11
APPENDIX             4.5   NS EXCLUSIVE POINT SERVICE............................................................12
APPENDIX             4.8   TRAIN SCHEDULES AND ROUTING...........................................................13
APPENDIX             4.9   CSXI'S RIGHT TO MODIFY................................................................14
APPENDIX             4.11   APPLICABILITY OF DIRECTORY NO. 1.....................................................15
APPENDIX             4.13   OTHER TYPES OF TRAFFIC...............................................................16
APPENDIX             5.2   VOLUME COMMITMENT.....................................................................17
APPENDIX             5.8   NOTIFICATION TO CUSTOMERS OF DIRECTORY NO. 1..........................................19
APPENDIX             6   SOUTH KEARNY TERMINAL...................................................................20
APPENDIX             7.2   NONAPPLICABILITY OF RATES FOR CERTAIN SHIPPERS........................................23
APPENDIX             7.3   NO CO-LOADING.........................................................................24
APPENDIX             7.5   FAK CARGO ONLY........................................................................25
APPENDIX             7.6   CONVENTIONAL/STACK CAR RATES..........................................................26
APPENDIX             7.10   EFFECTIVE DATE OF NORTHEAST RATES....................................................27
APPENDIX             8   RATE ADJUSTMENTS........................................................................28
APPENDIX             9   COMPETITIVE PROPOSALS...................................................................33
APPENDIX             10   SERVICE LEVEL COMMITMENT...............................................................44
APPENDIX             14.1   CSXI'S LIABILITY FOR CARGO...........................................................48
APPENDIX             14.3   CLAIMS BY SHIPPING CUSTOMERS.........................................................49
APPENDIX             17.4   INTERNAL DISCIPLINE..................................................................51
APPENDIX             21.1.3   TRANSFERS OR ASSIGNMENTS TO RAILROAD...............................................52
APPENDIX             23.1.2   MATTERS SUBJECT TO CSXI'S AUDIT....................................................53
APPENDIX             23.2.2   MATTERS SUBJECT TO APL/LTS AUDIT...................................................54
APPENDIX             23.3   AUDITS UNDER APPENDIX 9..............................................................55
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                                  EXHIBIT LIST

EXHIBIT 1.1.30             EASTERN STATES
EXHIBIT 1.1.31             EASTERN ZONES AND WESTERN ZONES
EXHIBIT 1.1.37             EXISTING LESS-THAN-TRUCKLOAD CUSTOMERS
EXHIBIT 1.1.38             EXISTING TPI CUSTOMERS
EXHIBIT 1.1.62             PREMIUM O/D PAIRS
EXHIBIT 4.1.1              LINEHAUL RATES FOR APL `S MOVEMENTS IN PACIFIC
                           TRADES
EXHIBIT 4.1.2              LINEHAUL RATES FOR LTS' MOVEMENTS OF APL OR LTS
                           CONTAINERS IN TRANSCONTINENTAL DOMESTIC SERVICE
EXHIBIT 4.1.3              LINEHAUL RATES FOR EXISTING TPI CUSTOMERS
EXHIBIT 4.1.4              LINEHAUL RATES FOR TEMPERATURE CONTROLLED CONTAINERS
EXHIBIT 4.1.5              LINEHAUL RATES FOR EMPTY CONTAINERS MOVING
                           WITHIN THE EASTERN STATES WITH A PRIOR AND
                           SUBSEQUENT TRANSCONTINENTAL MOVEMENT
EXHIBIT 4.3                TERMINAL SERVICES AND RATES
EXHIBIT 4.4                DEDICATED TRAINS
EXHIBIT 4.11               EXCEPTIONS TO DIRECTORY NO. 1
EXHIBIT 6.1                KEARNY TERMINAL
EXHIBIT 6.9                INVENTORY OF LIFT AND YARD EQUIPMENT
EXHIBIT 9.2                METHODOLOGY DESCRIPTION
EXHIBIT 9.3                EXAMPLE OF COMPETITIVE PROPOSAL CALCULATION FOR
                           TRANSCONTINENTAL DOMESTIC CONTAINERS
EXHIBIT 9.3.2              COST FACTORS
EXHIBIT 14.2.1             DEPRECIATION FORMULA

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                              AMENDED AND RESTATED

                  INTERMODAL TRANSPORTATION AGREEMENT NO. 11111

                  THIS AMENDED AND RESTATED INTERMODAL TRANSPORTATION AGREEMENT
NO. 11111 ("Agreement"), dated as of May 13, 2002, and effective as of the
Effective Date (as defined in Section 3.4 of this Agreement), is between CSX
INTERMODAL, INC. ("CSXI"), a Delaware corporation, whose address is 301 West Bay
Street, Jacksonville, Florida 32202, PACER INTERNATIONAL, INC., d/b/a PACER
STACKTRAIN (f/k/a APL LAND TRANSPORT SERVICES, INC.), a Tennessee corporation,
whose address is 2300 Clayton Road, Concord, California 94520 ("LTS"), and APL
LIMITED, a Delaware corporation, whose address is 1111 Broadway, Oakland,
California 94607, and APL CO. PTE LTD., a Singapore corporation, whose address
is 456 Alexandra Road, 06-00, NOL Building, Singapore 9962 (collectively,
"APL").

                                R E C I T A L S:

                  APL and LTS wish to purchase and CSXI wishes to arrange for or
provide certain transportation and related services. CSXI, APL and LTS wish to
enter into this Agreement to amend and restate the existing agreement between
them (the "Original Agreement") in order to give effect to the agreement and
understanding among the parties with respect to the provision of terminal
services and rates, to make certain technical changes and corrections, and to
set forth the terms and conditions pursuant to which APL and LTS agree to
purchase and CSXI agrees to arrange for or provide such services.

                               A G R E E M E N T:

                  For and in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties agree as
follows:

1.   INTERPRETATION

     1.1  Definitions. Defined terms are set forth in Appendix 1.1.

     1.2 Other Terms. Other capitalized terms shall have the meaning given them
in the text of this Agreement.

     1.3 Headings. The section headings contained in this Agreement are for
reference and convenience only and shall not enter into the interpretation of
this Agreement. References to Articles shall mean articles of this Agreement
unless otherwise stated. References to Sections shall mean sections of this
Agreement, including sections in an Appendix, unless otherwise stated.
References to Sections in an Appendix shall mean sections of that Appendix
unless otherwise stated. References to Paragraphs in an Exhibit shall mean
paragraphs in that Exhibit unless otherwise stated.

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     1.4 Plural; Singular Usage. All terms used in the plural shall include the
singular; and all terms used in the singular shall include the plural.

2.   RECITALS

     The above recitals are true and correct and are incorporated herein by this
     reference.

3.   TERM

     3.1 Commencement. This Agreement shall become effective on and as of the
date first written in the first paragraph of this Agreement. The Original
Agreement became effective as follows:

          3.1.1 Southeastern Traffic. As to the southeast traffic, January 1,
     2000.

          3.1.2 Northeastern Traffic. As to the Conrail northeast traffic, the
     date one hundred eighty one (181) days after the Closing Date.

          3.1.3 Kearny Terminal. As to the obligations with respect to
     integration of the Terminal in South Kearny, New Jersey set forth in
     Article 6, upon the signing of the Original Agreement.

     3.2 Termination. This Agreement will terminate at 11:59 p.m. on December
31, 2014, subject to Section 3.5 of this Agreement.

     3.3 Early Commencement. APL/LTS may jointly commence the Agreement as to
their southeast traffic prior to January 1, 2000 by providing CSXI with no less
than sixty (60) days prior notice of such election.

     3.4 Effective Date. The date that the Original Agreement became effective
with respect to each area of traffic or responsibility shall be the "Effective
Date" with respect to that area.

     3.5 Renewal. This Agreement will automatically renew for two successive
five (5) year periods, unless terminated by CSXI, APL or LTS upon no less than
one hundred eighty (180) days notice prior to the expiration of the original or
first renewal term.

4.   CSXI'S SERVICES

     4.1 Rail Services and Linehaul Rates. Upon the Effective Date and during
the term of this Agreement, CSXI will arrange for rail transportation linehaul
services for the movements described in Appendix 4.1 and at the rates set forth
in the Rate Exhibits, in each case as the same shall have been and shall be
adjusted in accordance with the terms and provisions of this Agreement.

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     4.2 Services Included in Linehaul Charges. CSXI shall provide the following
services as part of the linehaul movement between CSXI origin or destination and
CSXI interchange, and such services are included in the linehaul charges
provided in the Rate Exhibits:

          4.2.1 Lifts. CSXI will perform, when necessary, one lift of Equipment
     onto an Intermodal Car and secure Equipment thereto and unsecure Equipment
     and perform one lift of Equipment from an Intermodal Car.

          4.2.2 Placement on Chassis. CSXI will place Containers on APL or LTS
     Chassis when timely supplied by APL or LTS. If there are sufficient Chassis
     in a Chassis pool at the Terminal to which APL and LTS have access, such
     Chassis shall be considered to be timely supplied.

          4.2.3 EIRs and Interchange Inspections. CSXI will prepare Equipment
     receipt and interchange inspection reports evidencing the apparent
     condition of the Equipment at times of interchange to motor carriers.

          4.2.4 Notifications. CSXI will provide notification of arrival and
     availability of shipments to APL/LTS in accordance with Section 4.6 of this
     Agreement.

          4.2.5 CY Inventories. Upon request of APL/LTS, CSXI will provide daily
     CY inventory reports verifying the number of APL or LTS Containers and
     Chassis at each CSXI-served rail CY. In addition, CSXI shall perform a
     physical yard check once a week and shall provide a report to APL/LTS by
     yard and equipment number. This report will be given to appropriate offices
     of APL/LTS as specified in writing from time to time.

          4.2.6 Physical Possession. CSXI will exercise reasonable efforts to
     give physical possession of Chassis and Containers only to authorized
     individuals. APL/LTS will provide CSXI's Director of Intermodal Operations
     with a complete list of all authorized entities prior to the Effective
     Date. Thereafter APL/LTS shall give CSXI at least five (5) days notice of
     any change in the identity of authorized entities.

          4.2.7 Outgate and Ingate Notification. CSXI will provide notification
     of ingate and outgate times for each Container and Chassis by EDI or other
     mutually agreeable means.

          4.2.8 Storage Charges. CSXI will assess and collect any Equipment
     storage charges due at any Terminal beyond the applicable free time. CSXI
     will directly assess storage charges for loaded shipments in Domestic
     Service or for TPI Customers against the customer or its agent, including
     but not limited to LTS if LTS is the notify party or is providing or
     arranging for destination motor carrier service. Other provisions regarding
     storage charges are set forth in Exhibits 4.3 and 6.1. CSXI may elect to
     bill the responsible party or collect such charges at the time of outgate.
     CSXI will calculate free time and assess storage charges against parties
     other than APL or LTS in accordance with Directory No. 1. Any storage
     charges so collected will be for CSXI's account.

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     4.3 Terminal and Container Yard Services. Terminal and CY services shall be
provided on the terms and conditions set forth in Appendix 4.3.

     4.4 Dedicated Trains.

          4.4.1 Request and Scheduling of Dedicated Trains. Upon no less than
     twenty-four (24) hours verbal notice by APL/LTS to CSXI's Operations
     Center, CSXI will arrange for locomotives and a crew to operate a Dedicated
     Train for APL/LTS between the points and at the charges set forth in
     Exhibit 4.4. If APL/LTS requests that a Dedicated Train be operated under a
     mutually agreed upon pre-arranged and ongoing schedule, then CSXI will
     operate the Dedicated Train under that schedule. If APL/LTS requests
     movement of a non-scheduled Dedicated Train, such train will depart the
     origin terminal at the time agreed upon between APL/LTS and CSXI. Such
     agreement will be made at the time the non-scheduled Dedicated Train is
     requested by APL/LTS. Further, such train will be operated from origin to
     destination under a transit schedule no greater than the maximum number of
     hours shown in Exhibit 4.4.

          4.4.2 Dedicated Train Pricing. Pricing for Dedicated Trains is set
     forth in Exhibit 4.4.

          4.4.3 Cancellation of a Dedicated Train. APL will have the option to
     cancel a Dedicated Train on no less than seven (7) hours' notice to CSXI
     before the scheduled departure.

          4.4.4 Cooperative Efforts to Minimize Costs. Provisions regarding the
     parties' efforts to minimize costs are set forth in Appendix 4.4.

     4.5 NS Exclusive Point Service. Terms and conditions regarding CSXI's
service for rail points exclusively served by NS are set forth in Appendix 4.5.

     4.6 Notification and Reporting. CSXI will notify the notify party specified
in the shipping documents of the arrival of a Container and its availability for
pickup. If no notify party is specified on the shipping documents, CSXI will
notify the appropriate offices of APL/LTS as specified in writing from time to
time. CSXI will supply to APL/LTS via direct computer access (or until such
access is available, via electronic mail or facsimile transmission) a network
status report or an update on changes thereto containing the following items:
(a) train symbol and date, (b) number of APL/LTS Equipment on each train, (c)
billed destination of Equipment on each train, (d) current location, on-time vs.
schedule and delay amount and explanation and ETA train destination and (e)
bad-ordered cars and a recovery plan (by telephone) and new ETA for the car at
destination (by telephone). CSXI will supply to APL/LTS weekly service bulletins
and proactive maintenance of way advisories and current organization charts and
contact lists periodically when changed. To the extent that it is not presently
available, CSXI will work with APL/LTS to develop efficient and effective
computer systems to provide APL/LTS with direct electronic access to this
operational data.

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     4.7 Loading Containers. CSXI shall use commercially reasonable efforts to
load the Containers tendered under this Agreement onto Intermodal Cars in a
timely fashion and to load Intermodal Cars properly in accordance with any safe
operating procedures given by connecting rail carriers to CSXI or established by
CSXI or any regulatory agency. At Terminals where stack Intermodal Car
capability exists, CSXI will give preference to loading APL/LTS Containers on
stack Intermodal Cars in lieu of standard flat Intermodal Cars.

     4.8 Train Schedules and Routing. Provisions for train schedules and routing
are set forth in Appendix 4.8.

     4.9 CSXI's Right to Modify. CSXI may modify, add or delete Terminal
services, hours of operation, Terminals or other facilities and change the
services it offers to customers from time to time. CSXI will notify APL/LTS of
any such modifications, additions or deletions at least sixty (60) days in
advance (unless law, regulation or overriding commercial circumstances require a
shorter notice period) and on a continuing basis through communications between
the CSXI Customer Service Center and appropriate offices of APL/LTS, semi-annual
service improvement meetings and APL/LTS and CSXI service design group
discussions. The consequences of a failure to agree on subsequent changes to
CSXI's services related to Terminals are set forth in Appendix 4.9.

     4.10 No Obligation To Provide Temperature Protection Services. CSXI does
not provide protective services for refrigerated Containers, and the rates set
forth in the Rate Exhibits do not include such protective services.

     4.11 Applicability of Directory No. 1. The provisions relating to the
applicability of Directory No. 1 to APL/LTS are set forth in Appendix 4.11.

     4.12 Applicability of Standard Practice and Industry Rules. All services
provided by CSXI to APL and LTS will also be subject to CSXI's standard hours of
operation and AAR rules, unless modified in this Agreement.

     4.13 Other Types of Traffic. Movements not covered in the Rate Exhibits
will be handled as set forth in Appendix 4.13.

     5. APL'S/LTS' RESPONSIBILITIES

     5.1 Payments. APL and LTS shall pay all sums owed to CSXI pursuant to this
Agreement in a timely manner and as set forth in Article 11.

     5.2 Volume Commitment. Appendix 5.2 sets forth APL's/LTS' volume
commitments to CSXI and the remedies if APL or LTS fails to meet those
commitments.

     5.3 Condition of Equipment. All Equipment tendered by APL or LTS to CSXI or
its underlying carriers for movement hereunder will be in good working order
without defects and shall comply with all applicable AAR and governmental
standards. All Containers tendered by APL or LTS to CSXI or its underlying
carriers for movement hereunder will be suitable to be stacked (on top and
bottom) for transportation on stack Intermodal Cars.

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     5.4 Draymen. APL and LTS will, with respect to trucking activities
involving a Terminal, engage or cause to be engaged only draymen with which both
APL/LTS and CSXI have a motor carrier interchange agreement or a Uniform
Intermodal Interchange Agreement.

     5.5 Tendering of Chassis. APL and LTS will provide a sufficient number of
APL or LTS Chassis of the proper dimensions to accommodate the volumes of APL or
LTS Containers at each Terminal. CSXI will store up to the number of APL and LTS
Chassis set forth in the applicable Terminal exhibits at no charge to APL or
LTS. To the extent that APL and LTS provide Slider Chassis, CSXI will make or
arrange for adjustment of the size of Slider Chassis as required to accommodate
APL/LTS daily Container volumes. If sufficient numbers of APL and LTS Chassis of
the proper dimensions are not available upon train arrival, CSXI may, in order
to expedite the unloading of trains, use other available Chassis and provide
secondary lifts as necessary at the rates set forth in Directory No. 1;
provided, however, an APL or LTS Container will not be allowed to exit the
Terminal when loaded on other than an APL/LTS Chassis. To the extent that CSXI
must transfer an APL or LTS Container from a non-APL/LTS Chassis, CSXI will
assess and APL/LTS will pay an extra lift fee as set forth in Exhibit 4.3 or
6.1, whichever is applicable to that Terminal. CSXI may use APL or LTS Chassis
to handle the Containers of other CSXI customers or for CSXI Containers;
provided, however, that if in APL's/LTS' opinion CSXI abuses this right, APL/LTS
may revoke this right. CSXI will not allow bare APL or LTS Chassis or APL or LTS
Chassis with a non-APL/LTS Container to leave a Terminal without the specific
authorization of APL or LTS. If CSXI should allow bare APL or LTS Chassis or an
APL or LTS Chassis with a non-APL/LTS Container to leave a Terminal without
authorization, CSXI will use commercially reasonable efforts to return the
Chassis to APL's or LTS' possession, will pay reasonable Chassis rental charges
therefor and will be responsible for any loss or damage to that Chassis in
accordance with Section 14.2 of this Agreement. If APL or LTS receives any
Chassis rental charges, reimbursement of loss or damage to Chassis or other
amounts from the party to whom the Chassis was interchanged and CSXI has also
been required to pay these amounts to APL or LTS under the foregoing sentence,
APL or LTS will pay the amounts remitted by the other party to CSXI.

     5.6 Customs Services.

          5.6.1 Movement under APL's, LTS' or TPI Customer's Bond. All in-bond
     shipments under this Agreement shall move under APL's, LTS' or the Existing
     TPI Customer's U.S. Customs custodial bond, unless otherwise mutually
     agreed in writing.

          5.6.2 Allocation of Responsibility. The following sets forth the
     respective responsibilities and liabilities of APL/LTS and CSXI with
     respect to in-bond shipments.

               (a) APL and LTS' Responsibility. APL and LTS shall be liable for,
          and shall defend and indemnify CSXI, its Affiliates and their
          respective officers, directors, employees, and agents against, any
          Losses imposed by the U.S. Customs Service or the Internal Revenue
          Service related to their Containers moving in-bond unless otherwise
          provided in Section 5.6.2(b) of this Agreement.

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               (b) CSXI's Responsibility. CSXI will, upon confirmation of
          Customs clearance, interchange a Container to APL's/LTS' motor carrier
          or its agents or employees in accordance with the relevant interchange
          agreement during the Terminal's normal business hours. CSXI shall be
          responsible for any duties or fines arising from Customs violations
          actually and directly caused by CSXI during the period in-bond
          Containers are in its or its agent's possession and control. CSXI
          agrees not to open any APL or LTS in-bond Containers without U.S.
          Customs Service supervision and approval, except in a force majeure
          condition or other emergency, such as a leaking Container, or with APL
          or LTS' permission.

     5.7 Compliance with Directory No. 1. APL and LTS will comply with all
requirements of Directory No. 1 with respect to shipments under this Agreement,
unless those requirements conflict with or are excluded or modified by the terms
of this Agreement.

     5.8 Notification to Customers of Directory No. 1. APL and LTS shall inform
its customers that the provisions of Directory No. 1 apply to their shipments
using CSXI's transportation services and they must comply with provisions of
Directory No. 1 as more specifically set forth in Appendix 5.8.

     5.9 Prior Notice. To facilitate loading of trains at each Terminal, APL and
LTS will make a good faith effort to provide CSXI's Terminal Manager with
twenty-four (24) hours advance notice of the expected number of pieces of
Equipment to be received by CSXI at each Terminal.

     5.10 Point of Contact. CSXI shall not be required to provide notices to,
interact with or obtain the agreement of APL and LTS acting as separate entities
under this Agreement with respect to any daily operational matters. CSXI shall
be required to provide notices to, interact with or obtain the agreement of APL
and LTS acting as separate entities under this Agreement with respect to any
changes in this Agreement, including but not limited to the Rate Exhibits,
Exhibit 4.3 and Directory No. 1 and if APL pays CSXI directly, with respect to
charges billed under Article 11. Accordingly, APL and LTS shall appoint a single
joint point of contact for each functional area to represent both APL and LTS in
working on a daily basis with CSXI and CSXT under this Agreement.

     5.11 Routing. With respect to Container movements subject to the volume
commitments under Section 5.2 of this Agreement, APL and LTS shall route their
Containers in Transcontinental International or Domestic Service through
Gateways served by CSXI.

     6. SOUTH KEARNY TERMINAL

     Appendix 6 sets forth the parties' mutual obligations and responsibilities
regarding rail terminal operations at south Kearny, N.J.

     7. RAIL RATES AND OTHER CHARGES

     7.1 Linehaul Rates. Linehaul rates made available under this Agreement are
set forth in the Rate Exhibits, Directories Nos. 3 and 8 and by SPQ. To the
extent that the rates in

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Directories Nos. 3 or 8 applicable to a type and size of Container between any
O/D Pair are lower than the applicable rate in the Rate Exhibits, then the lower
Directory rate shall apply.

     7.2 Nonapplicability of Rates. Provisions regarding the inapplicability of
APL's/LTS' linehaul rates are set forth in Appendix 7.2.

     7.3 No Co-Loading. APL/LTS shall not use the linehaul rates provided under
this Agreement for movements of empty or loaded Containers owned or leased by
certain other parties as set forth in Appendix 7.3.

     7.4 Combination of Prices. The rates set forth in Rate Exhibits may not be
combined to construct a lower price where a through price for an O/D Pair is set
forth in a Rate Exhibit.

     7.5 FAK Cargo Only. The rates set forth in the Rate Exhibits apply only to
cargo which is accepted under freight, all kinds ("FAK") pricing as defined in
Directory No. 1; provided, however, that the rates in the Rate Exhibits shall
apply to certain other freight as specified in Appendix 7.5. If APL or LTS wish
to transport non-FAK cargo (other than that cargo specified in Appendix 7.5) in
movements otherwise covered under a Rate Exhibit, APL or LTS may request an SPQ.

     7.6 Conventional/Stack Car Rates. Separate rates are set forth in the Rate
Exhibits for Containers moving in stack Intermodal Car service and Containers
moving TOFC in conventional service and shall apply depending on whether the
shipments are moved in stack or conventional service. CSXI acknowledges that
prior to the Effective Date, APL and LTS moved a certain percentage of its
Containers in the Southeast in stack service and the remaining percentage in
conventional service. The future application of rates as between stack service
and conventional service is set forth in Appendix 7.6.

     7.7 Changes in Container Sizes. If ISO standard dimensions for Containers
or the sizes and types of other Containers are otherwise changed, CSXI will
propose linehaul rates for Containers with such new dimensions. Such rates will
take effect upon the mutual agreement of the parties.

     7.8 Addition of New O/D Pairs. If from time to time CSXI adds O/D Pairs to
the Core Network as a result of corporate transactions or otherwise, CSXI will
propose linehaul charges for these new O/D Pairs. Such rates will take effect
upon the mutual agreement of the parties. CSXI and APL/LTS shall also agree as
to which Eastern Zone the new origin or destination shall be allocated.

     7.9 Rates for Moves Not Covered by Rate Exhibit. Movement of Containers
covered by this Agreement for which no rate is provided under a Rate Exhibit may
be moved at the rates set forth in Directory Nos. 3 or 8 or pursuant to an SPQ.

     7.10 Northeast Rates. Provisions regarding the effective date of linehaul
rates for Northeastern traffic are set forth in Appendix 7.10.

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8. RATE ADJUSTMENTS

     Appendix 8 sets forth the adjustment mechanisms applicable to CSXI's
linehaul rates and charges.

9. COMPETITIVE PROPOSALS

     Appendix 9 sets forth provisions for the adjustment of CSXI's rates and
charges to APL as a result of specified market conditions and competitive
circumstances.

10. SERVICE LEVEL COMMITMENT

     Appendix 10 sets forth the standards for CSXI's service performance and the
remedies if CSXI fails to meet those standards.

11. PAYMENT OF PRICES AND CHARGES

     11.1 Payment of Charges Owed to CSXI. CSXI will provide APL/LTS with a
detailed statement of linehaul and other charges for transportation, terminal
and other services rendered by CSXI and any other sums owed CSXI pursuant to
this Agreement, via EDI transmission or, if EDI transmission is not available,
by facsimile transmission or overnight courier. Each statement will bear a
unique number. APL/LTS must notify CSXI of any disputed charges listed on the
statement and provide documentary evidence to support its dispute of any charges
by 12:00 noon (EST) no later than twenty five (25) calendar days from the date
the statement is received. No response within this period will constitute
APL's/LTS' acknowledgment that the statement is accurate. The parties will work
together to resolve any disputed charges. If the parties are unable to resolve
disputed charges, either party may invoke the dispute resolution procedures in
Article 22. APL and LTS will pay amounts owed for undisputed charges (including
the undisputed portion of disputed charges) by electronic funds transfer within
twenty-five (25) days from the date the statement is received. APL and LTS will
pay disputed charges that have been resolved within fifteen (15) days of the
date of resolution. APL, LTS and CSXI will develop procedures for promptly
acknowledging receipt of CSXI's statement bill.

     11.2 Payment of Charges Assessed by APL/LTS. APL/LTS will provide CSXI with
a statement for any charges properly assessed against CSXI. The statement will
be delivered via EDI transmission or, if EDI transmission is not available, by
facsimile transmission or overnight courier to the address set forth in Section
24.3 of this Agreement. The parties will work together to resolve any disputed
charges. If the parties are unable to resolve the disputed charges, either party
may invoke the dispute resolution procedures in Article 22. CSXI will pay
undisputed charges (including the undisputed portion of disputed charges) by
electronic funds transfer within twenty-five (25) days from the date of the
statement is received. CSXI will pay disputed charges that have been resolved
within fifteen (15) days of the date of resolution. CSXI, APL and LTS will
develop procedures for promptly acknowledging receipt of APL's or LTS'
statement.

     11.3 No Offset. Each party shall pay all transportation and other charges
due under this Agreement and shall not offset such charges in any circumstances
against amounts alleged to

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be due as a result of prior billing error, unsettled loss or damage claims,
unpaid items, or other dispute with the other party.

     11.4 Late Fee. Any payment that is not received when due will be subject to
a late payment charge equal to a rate of one and one-half percent (1 1/2%) per
month (or the maximum rate permitted by law if less than 1 1/2% per month). No
late fee will accrue on disputed charges unless it is determined under the
dispute resolution procedures that the disputing party had no reasonable basis
for the dispute or was not acting in good faith in connection with the dispute.

12. COMMUNICATIONS

     12.1 Shipping Order. Prior to gate arrival of APL and LTS Containers for
gate interchange to CSXI, APL/LTS shall provide CSXI with a single final
shipping order by EDI in the format specified by CSXI and including the data
required under Directory No. 1 except as such data requirements are modified in
Exhibit 4.11. APL and LTS acknowledges that it is CSXI's policy that no APL or
LTS Containers will be accepted for gate interchange onto a Terminal unless a
shipping order in accordance with Directory No. 1, as modified in Exhibit 4.11,
has been provided for the Container prior to ingate or appropriate documentation
physically accompanies the Container. For a reasonable transition period, CSXI
will work with APL/LTS to facilitate APL's/LTS' compliance with this policy.
Thereafter, APL and LTS shall comply and cause its draymen to comply with this
policy. CSXI will handle exceptions to the policy requested by APL/LTS on a
case-by-case basis. The format specified by CSXI for shipping or destination
transmission may be changed from time to time to conform to then current ANSI or
other standards for electronic information exchange. CSXI will provide APL/LTS
with six (6) months prior notice of any change in its EDI format, and APL/LTS
will transmit data in such revised format no later than six (6) months after
such notice.

     12.2 APL'S/LTS' Responsibility for Data. APL and LTS will be responsible
for correctly transmitting shipping order and other electronic data to CSXI.

     12.3 Information on Cargo Not Eligible for FAK pricing. If the subject
cargo cannot be shipped under FAK pricing, the transmission (or any written
documentation provided at the Terminal gate if permitted by CSXI) must include
all relevant information regarding such shipment, including, but not limited to,
in the case of hazardous material as defined by the Hazardous Material
Regulations of the Department of Transportation, all descriptive elements
required by 49 Code of Federal Regulations, part 172, Subpart C, and in the case
of cargo requiring refrigeration services a description of the specific
commodity (i.e., frozen fish, tomatoes) being transported.

     12.4 Shipping Order Changes. Diversion or re-consignment of a shipment will
only be permitted prior to loading of the Container onto the train at the origin
Terminal. Diversion or re-consignment must be arranged and have been approved by
CSXI in advance. If the number of diversion and re-consignments requested by APL
or LTS become burdensome to CSXI, CSXI reserves the right to charge a processing
fee of $10.00 per diversion or re-consignment. This fee will be in addition to
any diversion or re-consignment charges assessed by a rail carrier, charges for
the shipment as originally tendered and any charges quoted at the time of
request. Diversion

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or re-consignment requests must be confirmed by APL/ LTS via EDI transmission or
in writing. CSXI agrees to attempt to make the diversion requested in those
situations where the request is timely received and a confirmed agreement of
diversion is entered into in time for shipping orders to be issued to the proper
party for the diversion, but CSXI will not guarantee nor be responsible if the
relevant carrier cannot or does not effectuate or complete the diversion.

     12.5 Voids of Shipping Order. Requests to void a shipping order will not be
accepted after the loading of the Container onto the train at the origin
Terminal.

     12.6 Transportation Incidents and Exceptions. CSXI shall use reasonable
efforts to notify APL/LTS as soon as reasonably possible of all major incidents
affecting the movement of APL's/LTS' shipments. Incidents shall include, but are
not limited to, set-outs, bad-order cars, derailments and reroutes and any
matter considered by CSXI to constitute a force majeure condition as described
in Article 16.

     12.7 Day-to-Day Management. CSXI will arrange for APL/LTS to have suitable
and direct lines of communications with both CSXI's Director of Intermodal Train
Operations and appropriate CSXT operational personnel.

13. USE OF CSXI'S FACILITIES; COMPLIANCE WITH LAWS

     13.1 Subcontractor's Access to CSXI Facilities. In order to efficiently and
safely operate the Terminals and its other facilities, CSXI must, among other
precautions, limit access by APL and LTS and other parties to its facilities.
Accordingly, neither officers, employees or agents of APL or LTS nor any APL or
LTS Subcontractor shall have access to the Terminals or other facilities of CSXI
or CSXT without the prior written consent of the relevant CSXI Terminal General
Manager or the supervisors of the Terminal General Managers, which consent shall
not be unreasonably withheld. CSXI will inform APL/LTS from time to time of
those officers authorized to grant such access to Terminals. If CSXI does permit
an APL or LTS officer, employee or agent or a Subcontractor to have access to a
Terminal or other premises, CSXI reserves the right thereafter to exclude such
persons from the Terminals and other facilities and to require APL and LTS
officers, employees and agents and each Subcontractor to execute a separate
access agreement with CSXI as a condition to their access.

     13.2 Compliance with Laws and Rules. APL, LTS and CSXI shall comply, and
APL and LTS shall cause Subcontractors to comply, at all times, with (a) all
applicable laws, rules, regulations, policies, procedures, and ordinances,
whether state, federal, municipal or other, (b) all of CSXI's operating rules,
policies and procedures, including without limitation safety inspection,
training and operations guidelines, accident reporting rules, and Terminal and
yard guidelines and requests; (c) applicable AAR rules and procedures; and (d)
any other laws, regulations, ordinances or standards relating to railroad, safe
container, trucking or other transportation operations, environmental
protection, clean air and water, workers' compensation, industrial accidents,
employer liability, safety and health.

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14. LIABILITY AND CLAIMS PROCEDURES

     14.1 CSXI's Liability for Cargo. CSXI's liability for loss, damage,
destruction or delay to cargo shall be governed by the terms of Directory No. 1
and Appendix 14.1.

     14.2 CSXI's Liability for Equipment.

          14.2.1 Determination of CSXI's Equipment Liability. Responsibility for
     loss, damage, maintenance and repair of Equipment shall be governed by the
     Container Rules. The cost of repairs to Equipment will be allocated as set
     forth in this Section. APL will pay for or perform the owner's
     responsibility repairs under the Container Rules. CSXI will pay for or
     perform those handling carrier responsibility repairs under the Container
     Rules that become necessary while Equipment is in the possession of CSXI.
     If after joint investigations by APL/LTS and CSXI, the responsible party
     cannot be determined, APL/LTS and CSXI shall share the cost of handling
     carrier responsibility repairs equally. As between APL/LTS and CSXI and
     except as provided in Section 5.5 of this Agreement, APL and LTS shall be
     responsible for all repairs while Equipment is in the possession of a third
     party, including but not limited to a motor carrier and other rail
     carriers. If either party performs repairs to Equipment for which the other
     party is responsible under this Section, the responsible party shall pay
     the performing party as set forth in the Container Rules. If APL or LTS
     Equipment in CSXI's possession is lost, stolen, destroyed or becomes a
     constructive total loss, CSXI will promptly notify APL or LTS. Within
     thirty (30) days after the Equipment's depreciated value is calculated,
     CSXI will promptly pay APL or LTS the depreciated value of the Equipment,
     less salvage value if the Equipment is returned to APL of LTS. For purposes
     of this Section, depreciation will be calculated according to the formula
     in Exhibit 14.2.1. Equipment will be considered a constructive total loss
     if the estimated repair cost of the Equipment exceeds its depreciated
     value, less salvage. If Equipment in CSXI's possession becomes a
     constructive total loss, CSXI will provide APL or LTS with a list of major
     items of damage to the Equipment within fifteen (15) days after the
     Equipment's depreciated value is calculated. APL or LTS will advise CSXI of
     its desired disposition of the Equipment within ten (10) days after receipt
     of the list. If APL or LTS requests return of its Equipment and if in the
     sole judgment of CSXI return of the Equipment is practicable, APL or LTS
     will pay CSXI transportation and other charges (including conditioning and
     loading) applicable to the return. If APL or LTS does not desire the return
     of the Equipment or if CSXI determines that return is not practicable, APL
     or LTS will provide CSXI with title to the Equipment prior to CSXI's
     payment to APL of the depreciated value of the Equipment.

          14.2.2 CSXI's Payment of Repairs. If CSXI is responsible for repairs
     to a Container under Section 14.2.1 of this Agreement, it will pay the
     vendor providing the repairs directly. If CSXI does not have a direct
     billing relationship with the repair vendor and APL/LTS arranges the
     repairs, CSXI will pay APL/LTS, as applicable, the amount billed to it by
     its repair vendor for such repairs as evidenced by the vendor's invoice.
     Payments by CSXI to APL/LTS will be subject to the procedures set forth in
     Section 11.2 of this Agreement.

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          14.3 Submission of Claims. The procedures for submitting claims to
     CSXI are set forth in Appendix 14.3.

          14.4 Carmack Liability. CSXI has declined to purchase Carmack
     Amendment liability coverage from its rail carriers. If APL, LTS or its
     shipping customers wish to purchase Carmack Amendment liability coverage,
     APL, LTS and its shipping customers must obtain such coverage through an
     SPQ.

          14.5 General Disclaimer of Certain Damages. NO PARTY SHALL BE LIABLE
     TO ANY OTHER PARTY TO THIS AGREEMENT FOR ANY INDIRECT, SPECIAL,
     CONSEQUENTIAL OR PUNITIVE DAMAGES EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN
     OR EXCEPT WHERE A PARTY TO THIS AGREEMENT IS REQUIRED TO PAY SUCH DAMAGES
     TO A THIRD PARTY AND TO THE EXTENT THAT PARTY IS ENTITLED TO FULL OR
     PARTIAL INDEMNITY FROM ANOTHER PARTY UNDER THIS AGREEMENT.

15. INDEMNIFICATION

     15.1 Indemnification by APL and LTS. Subject to the terms, conditions and
limitations of liability set forth in this Agreement, APL and LTS shall defend,
indemnify and hold harmless CSXI, its Affiliates and the respective officers,
directors, employees, and agents of each from and against Losses associated with
(a) damage to property or injury or death of any persons to the extent resulting
from or arising out of APL's or LTS' or their Subcontractors' or their
officers', directors', employees', or agents' negligence or willful misconduct,
(b) damage to property and injury or death to persons to the extent resulting
from or arising out of APL's or LTS' breach of this Agreement; or (c) claims by
any person or entity other than APL or LTS related to loss, damage, destruction
or delay to cargo or Equipment in excess of the limitations in, or other than as
permitted by Directory No. 1 as it applies to APL/LTS hereunder if APL or LTS
failed to comply with Appendix 5.8. If, however, APL or LTS demonstrates that it
has complied with Appendix 5.8, it shall have no obligation to indemnify CSXI
under Section 15.1(c).

     15.2 Indemnification by CSXI. Subject to the terms, conditions and
limitations of liability set forth in this Agreement (including Directory No.
1), CSXI shall defend, indemnify and hold harmless APL and LTS and their
officers, directors, employees, and agents from all Losses associated with (a)
damage to property or injury or death of any persons to the extent resulting
from or arising out of CSXI's or its Subcontractors' or their officers',
directors', employees', or agents' negligence or willful misconduct or (b)
damage to property and injury or death to persons to the extent resulting from
or arising out of its breach of this Agreement.

16. FORCE MAJEURE

     A party shall be excused from fulfilling its contractual obligations
hereunder if it is prevented or delayed in such performance by force majeure
conditions beyond such party's reasonable control including, but not limited to,
fire or explosions; lockouts; strikes; labor shortages or disturbances; acts of
God, including, but not limited to, floods, hurricanes, tornadoes, earthquakes,
unusually severe weather, and natural disasters; war; insurrection;

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derailment that causes the normal route of movement to be impassable or other
casualty; acts of the public enemy; acts of governmental authority; embargo;
quarantine; and acts or omissions of third parties. The party claiming force
majeure will, within five (5) business days from the date of disability, notify
the other when it learns of the existence of a force majeure condition and will
similarly notify the other within a period of two (2) business days when the
force majeure condition has ended. The party claiming force majeure shall take
all commercially reasonable efforts to continue to perform its obligations to
the extent practicable and to recommence performing all obligations as soon as
possible after the force majeure condition has ended.

17. CONFIDENTIALITY

     17.1 Confidentiality Obligations. Each party agrees to hold in confidence
any Confidential Information of the disclosing party acquired during the term of
this Agreement, not to disclose the Confidential Information to any third
parties, to restrict disclosure to those employees, partners, shareholders or
Subcontractors with a need to know and bind such employees, partners,
shareholders or Subcontractors to these confidentiality restrictions, and not to
use the Confidential Information for any purpose except as contemplated by this
Agreement. Either party may disclose Confidential Information to the extent
required by a governmental agency, under a court order or as otherwise required
by law, provided that the party subject to the legal requirements has notified
the other party of such governmental or court action prior to disclosing the
Confidential Information.

     17.2 Exclusion of Certain Information. This Article 17 will not prohibit or
limit a party's use of information (a) previously known to it and not subject to
any confidentiality restrictions, (b) independently developed by it, (c)
acquired by it from a third party which is not, to such party's knowledge, under
an obligation not to disclose such Confidential Information, or (d) which is or
becomes publicly available through no breach by such party of these
confidentiality obligations.

     17.3 Right to Equitable Relief. Each party acknowledges the value of the
Confidential Information to the other party and the inadequacy of money or
damages in the event of breach or threatened breach and agrees that the other
shall be entitled to obtain an injunction against a breach of these
confidentiality obligations from any court of competent jurisdiction immediately
upon request, without being required to post a bond or prove that damages are
inadequate.

     17.4 Internal Discipline. Appendix 17.4 sets forth internal procedures to
preserve the confidentiality of APL's/LTS' rates.

18. FEDERAL CONTRACTOR REQUIREMENTS

     18.1 Compliance with Federal Contractor Requirements. To the extent
applicable, APL/LTS and CSXI will comply with and give all representations and
assurances required by any law or regulation applicable to federal contracts and
subcontracts including but not limited to the following:

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          18.1.1 Renegotiation and Contract Work Hours and Safety Standards Act.
     To the extent applicable, the Renegotiation Act of 1951, as amended (50
     U.S.C.ss.ss.35, 45), and the Contract Work Hours and Safety Standards Acts,
     as amended (40 U.S.C.ss.ss.327,333).

          18.1.2 Certain Executive Orders. To the extent applicable, Executive
     Order No. 11246, dated September 14, 1965, as amended, concerning equal
     employment opportunity and affirmative action in employment of persons
     without regard to race, religion, sex, or national origin; Executive Order
     No. 11701, dated January 24, 1973, concerning affirmative action in
     employment of certain veterans; Executive Order No. 11758, dated January
     15, 1974, concerning affirmative action in employment of handicapped
     individuals; Executive Order No. 11625, dated October 13, 1971, concerning
     assistance to minority business enterprises; Executive Order No. 12138,
     dated May 18, 1979, concerning assistance to women's business enterprises;
     the Age Discrimination Act of 1975; all applicable regulations of the
     Secretary of Labor, including but not limited to 41 C.F.R.ss. 60-1.4 et
     seq., 41 C.F.R.ss. 60-250 et seq., and 41 C.F.R.ss.60-741 et seq., and all
     applicable Federal Procurement Regulations, including but not limited to 41
     C.F.R.ss.1-1.13 et seq.; and

          18.1.3 Defense Acquisition Regulations. To the extent applicable,
     Defense Acquisition Regulations 7-104.14, concerning use of small business
     and minority business concerns, and 7.104.20, concerning use of labor
     surplus area concerns.

     18.2 No Segregated Facilities. To the extent applicable and required, APL,
LTS and CSXI each hereby certify to the other that it does not and will not
maintain any facilities for employees that are unlawfully segregated or permit
employees to perform services at any location under its control or that of its
subcontractors where unlawfully segregated facilities are maintained and that it
will require its nonexempt subcontractors to furnish a similar certification
prior to the award of any nonexempt subcontract.

19. DEFAULT

     19.1 Events of Default. The following shall be deemed an Event of Default:
(a) APL's or LTS' failure to make timely payments under this Agreement unless
such failure is cured within five (5) days of the date of CSXI's notice of such
failure or (b) any other material breach of the terms and conditions of this
Agreement which has or is likely to have a material adverse effect on the
nondefaulting part(ies) if such breach is not cured within sixty (60) days of
the date of the non-defaulting party's notice of such breach.

     19.2 Remedies Upon an Event of Default. In addition to any other remedies
under this Agreement, at law or in equity, the nondefaulting part(ies) may, upon
any Event of Default by the defaulting party, terminate this Agreement as to the
defaulting party upon written notice of such termination or suspend performance,
in whole or in part, of this Agreement with respect to the defaulting party
until such Event of Default is cured. All rights and remedies which may have
accrued prior to any termination upon an Event of Default shall survive
termination of this Agreement.

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     19.3 Obligations During Notice Period. Each party shall continue to perform
its respective responsibilities hereunder through the effective date of
termination.

     19.4 Obligations Upon Termination. Upon termination of this Agreement for
any reason, each party shall complete their performance and fulfill all
obligations which accrued prior to the date of termination, including but not
limited to APL's and LTS' obligation to pay all accrued charges and CSXI's
obligation to provide transportation for all Containers previously tendered and
to return to the defaulting party, at an interchange point or other location or
locations mutually agreed upon, all Containers and Chassis owned or provided by
the defaulting party. If solely as a result of a default by one party, a
nondefaulting party terminates this Agreement as to the defaulting party
pursuant to Section 19.2 of this Agreement the transportation of Containers and
Chassis owned or provided by the defaulting party to an interchange point or
other location or locations mutually agreed upon will be at the sole cost and
expense of the defaulting party.

     19.5 Transition Cooperation. Upon the failure of the parties to agree upon
renewal of this Agreement or upon giving by a party of notice of intent to
terminate this Agreement, pursuant to Section 19.2 of this Agreement, the
parties will use good faith efforts to establish a reasonable schedule and
reasonable procedures for cessation of transportation and related Terminal and
other activities with respect to the party being terminated that will endeavor
to minimize the disruption to the extent reasonably possible to the parties and
their customers. The terms of this Agreement will govern transportation and
related Terminal services and other activities during this transition.

20. INDEPENDENT CONTRACTOR

         APL/LTS agree that CSXI will be an independent contractor and not an
agent of them. This Agreement does not grant APL or LTS authority to enter into
any contracts or obligations on behalf of CSXI or otherwise bind CSXI, and
neither APL nor LTS shall hold itself out as having such authority. This
Agreement shall not be construed to grant CSXI authority to enter into any
contracts or obligations on behalf of APL or LTS or otherwise bind APL or LTS,
and CSXI shall not hold itself out as having such authority.

21. ASSIGNMENT

21.1 Assignment by APL or LTS.

          21.1.1 No Assignment without CSXI Approval. Except as provided for
     herein, neither APL nor LTS, as the case may be, may assign this Agreement
     without the prior written approval of CSXI.

          21.1.2 Effect of Certain Transactions. For purposes of this Article
     21, a merger, sale of all or substantially all business and assets, a
     reorganization, a consolidation or other change in control of a party
     hereto shall not constitute an assignment of this Agreement by that party
     so long as such successor-in-interest or surviving entity retains or
     succeeds to ownership and control of all or substantially all

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     of the business and assets ofAPL or LTS, as applicable, and is and shall be
     bound by the terms of, and shall assume all obligations of such party
     under, this Agreement.

          21.1.3 Transfers or Assignments To Railroad. Section 21.1.2 of this
     Agreement notwithstanding, the prior written approval of CSXI shall be
     required with respect to a merger, sale of all or substantially all
     business and assets, a reorganization, a consolidation or other change in
     control of APL or LTS if the successor-in-interest or surviving entity is a
     railroad or an Affiliate thereof. If CSXI withholds such approval, APL or
     LTS, as applicable, may elect to proceed with such transaction with a
     railroad or an Affiliate thereof, and upon consummation of such
     transaction, this Agreement shall terminate as to such party. If CSXI
     grants its approval in certain circumstances as set forth in Appendix
     21.1.3, Section 9.3 of Appendix 9 and Exhibits 9.3 and 9.3.2 shall be void.

     21.2 Assignment by CSXI. CSXI may not assign this Agreement without the
prior written approval of each of APL and LTS, except to an Affiliate (other
than Sea-Land Service, Inc. or its successor or any other ocean carrier
Affiliate) of CSXI.

     21.3 Binding Effect. To the extent not prohibited hereunder, the covenants,
terms, provisions and conditions of this Agreement shall apply to, bind and
inure to the benefit of the respective permitted successors and assigns of APL,
LTS and CSXI.

22. DISPUTE RESOLUTION

     22.1 Disputes Subject To Procedures. All disputes, whether sounding in
contract, tort or otherwise, arising out of or relating to this Agreement,
including but not limited to the arbitrability of a party's claim or dispute or
the breach of this provision, default under or breach of any provision in this
Agreement, termination of this Agreement, all claims for indemnification,
payments for services, liability for cargo loss or damage, and liability for
personal injuries shall be resolved pursuant to the provisions of this Article
22 exclusively.

     22.2 Internal Review. The parties intend to expeditiously and amicably
resolve any and all disputes that may arise between them. Within fifteen (15)
days after receipt by either party of written notice from the other party of the
existence of a dispute, the party receiving the notice shall deliver to the
other party a written response. The foregoing notice and response shall describe
the nature and circumstances of the dispute, state the party's position with
respect to the dispute and summarize the evidence and arguments supporting the
position. The managers participating in the dispute shall arrange to meet, in
person or by teleconference, at a mutually agreeable time and location as soon
as practicable and shall diligently attempt to resolve the dispute over the next
fifteen (15) days following receipt of the response. If the parties'
participating managers are not able to resolve the dispute within this fifteen
(15) day period, either party may submit the dispute to CSXI's Executive Vice
President of Marketing and Sales and APL's/LTS' Vice President-Transportation
Purchasing or such other senior executives as may be mutually agreed upon by the
parties from time to time. The submission shall be accompanied by the original
notice of dispute and response thereto and any additional evidence and arguments
that may be relevant. The designated executives shall then arrange to meet, in

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person or by teleconference, at a mutually agreeable time and location as soon
as practicable and shall diligently attempt to resolve the dispute over the next
fifteen (15) days following submission of the dispute to them. If such
executives do not agree upon a decision within fifteen (15) days after
submission of the dispute to them, or such longer time as they may agree upon,
then either party may, by providing a notice of arbitration to the other party,
submit the dispute to arbitration in accordance with the following provisions.

     22.3 Arbitration Procedures. All disputes described in Section 22.1 of this
Agreement which are not resolved under Section 22.2 of this Agreement shall be
submitted for final resolution pursuant to the Commercial Arbitration Rules of
the American Arbitration Association then in effect, and the parties hereby
consent to the entry of judgment by any court of competent jurisdiction with
respect to the decision of the arbitrator(s). The provisions of this Agreement
shall control if they conflict with the Commercial Arbitration Rules. The U.S.
Arbitration Act, 9 U.S.C. Sections 1-16, to the exclusion of any provisions of
state law inconsistent therewith or which would produce a different result,
shall govern the arbitrability of all claims. The arbitration shall be before an
arbitrator selected in accordance with the Commercial Arbitration Rules. Any
decision of the arbitrator shall be rendered within thirty (30) days after the
completion of the presentation of evidence and witnesses. The arbitrator shall
have the authority to award costs, such as pre-award interest, post\award
interest, expert fees and attorneys fees as deemed equitable considering the
circumstances, the outcome of the arbitration and the conduct of the parties,
but shall not have the authority to award indirect, special, consequential or
punitive damages or to issue equitable relief.

     22.4 Discovery and Rules. The arbitrator shall permit and facilitate such
discovery as he or she shall determine is appropriate under the circumstances
taking into account the needs of the parties, the relevance of the requested
discovery to the matter in controversy, and the desirability of making discovery
expeditious and cost-effective. The rules of arbitration may not deprive a party
of the right to be represented by counsel, to present evidence, or to
cross-examine witnesses presented by another party.

     22.5 Allocation of Expenses. Subject to the arbitrator's power to award
costs, each party shall be responsible for the expenses, fees and costs of the
arbitrator.

     22.6 Location for Arbitration. Any non-telephonic arbitration shall be held
in Atlanta, Georgia.

     22.7 Judicial Proceeding. The parties agree that the only circumstances in
which the parties may initiate judicial proceedings under this Agreement are to
obtain injunctive relief under Section 17.3 of this Agreement or to enforce this
Article 22. In any judicial proceeding to enforce this Article 22, the only
issues to be determined will be the existence of an agreement to arbitrate and
the failure of a party to comply with such agreement, and those issues will be
determined summarily by the court without a jury.

     22.8 Conduct of Operations. Pending resolution of any dispute brought in
good faith, each party will continue to perform its obligations under this
Agreement, including, but not

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limited to, the payment of all amounts due to the other party that are not
in dispute, provided that the other party also continues to perform its
obligations under this Agreement.

     22.9 Confidentiality of Arbitration. All aspects of the arbitration,
including but not limited to all documents, testimony, information or other
things produced, inspected or otherwise made available in connection with the
arbitration, shall be treated as Confidential Information. Neither the parties
nor the arbitrators may disclose the existence, content or results of the
arbitration, except as necessary to comply with applicable law or regulatory
requirements. Before making any disclosure required by law, a party shall give
written notice to all other parties and shall allow such parties a reasonable
opportunity to protect their interests. In no event shall such disclosure to
comply with legal or regulatory requirements be deemed to waive the confidential
nature of the disclosed information.

23. AUDIT

     23.1 CSXI's Right to Audit.

          23.1.1 Timing of CSXI's Audit. CSXI shall have the right to audit APL
     and LTS as described in this Section from time to time upon thirty (30)
     days written notice to the applicable party, but no more frequently than
     once per six month period; provided however, that CSXI may conduct a
     follow-up audit within three (3) months of completion of any audit that
     reveals any material irregularities or noncompliance in the obligations
     being audited. CSXI's right to audit will remain in effect for twelve
     months after any termination or expiration of this Agreement. APL/LTS shall
     have the right to approve the auditor, which approval may not be
     unreasonably withheld or delayed.

          23.1.2 Matters Subject to CSXI's Audit. CSXI shall have the right, at
     its own cost and expense, to cause an independent auditor to audit APL's
     and LTS' books and records to confirm compliance with the items set forth
     in Appendix 23.1.2.

          23.1.3 Conduct of Audit. Any such audit shall be conducted at CSXI's
     expense during normal business hours at APL or LTS' offices and at times
     which do not unreasonably interfere with their business operations. The
     independent auditor shall protect the Confidential Information of APL and
     LTS and such auditor will execute confidentiality agreements in forms
     reasonably acceptable to CSXI and APL/LTS.

          23.1.4 Maintenance of Books and Records. APL and LTS shall maintain
     all necessary books and records containing information needed to
     effectively perform an audit for a period of three (3) years (or such
     longer period as may be required by law) from the date of the event
     reflected in such books or records and shall provide the auditor with
     reasonable access to such books and records.

          23.1.5 Expenses; Subject to Arbitration. If an audit determines that,
     as a result of misinformation provided by APL or LTS, or LTS' other failure
     to comply with this Agreement, CSXI undercharged APL or LTS by five percent
     (5%) or more with respect to any audited matter, APL and LTS will reimburse
     CSXI for the reasonable out-of-pocket

                                      -19-

                                                                    Confidential

<PAGE>

     expense of such audit. If APL or LTS disagrees with the report of any
     audit, the matter will be submitted to arbitration pursuant to Article 22.

     23.2 APL's/LTS' Right to Audit.

          23.2.1 Timing of APL's/LTS' Audit. APL/LTS shall have the right to
     audit CSXI as described in this Section from time to time upon thirty (30)
     days written notice to CSXI, but no more frequently than once per six month
     period; provided however that APL/LTS may conduct a follow-up audit within
     three (3) months of completion of any audit that reveals any material
     irregularities or noncompliance in the obligations being audited. This
     APL/LTS right to audit will remain in effect for twelve months after any
     termination of this Agreement. CSXI shall have the right to approve the
     auditor, which approval may not be unreasonably withheld or delayed.

          23.2.2 Matters Subject to APL and LTS Audit. APL/LTS shall have the
     right, at its own cost and expense, to cause an independent auditor to
     perform an audit of CSXI's books and records solely for the purposes of
     verifying the matters set forth in Appendix 23.2.2.

          23.2.3 Conduct of Audit. Any such audit shall be conducted, at
     APL's/LTS' expense, during normal business hours at CSXI's offices and at
     times which do not unreasonably interfere with its business operations. The
     independent auditor shall protect the Confidential Information of CSXI, and
     such auditor will execute confidentiality agreements in forms reasonably
     acceptable to CSXI and APL/LTS.

          23.2.4 Maintenance of Books and Records. CSXI shall maintain all
     necessary books and records containing information needed to effectively
     perform an audit for a period of three (3) years (or such longer period as
     may be required by law) from the date of the event reflected in such books
     or records and shall provide the auditor with reasonable access to such
     books and records.

          23.2.5 Expenses; Subject to Arbitration. If an audit determines that,
     as a result of misinformation provided by CSXI, CSXI's failure to properly
     apply the methodologies under Article 9 or other failure to comply with
     this Agreement, CSXI overcharged APL or LTS by five percent (5%) or more
     with respect to any audited matter, CSXI shall reimburse APL or LTS, as
     applicable, for the expense of such audit.

     23.3 Audits Under Appendix 9. Provisions for payment of audit costs under
Appendix 9 are set forth in Appendix 23.3.

24. GENERAL

     24.1 Additional Documents. Subject to the terms and conditions of this
Agreement, each party will use reasonable efforts to do, or cause to be done,
all actions and things necessary or advisable to consummate the transactions
contemplated by this Agreement.

                                      -20-

                                                                    Confidential

<PAGE>

     24.2 Modification. This Agreement constitutes the entire agreement between
the parties with respect to the transportation under this Agreement and
supersedes all previous oral or written understandings, agreements and
commitments as to the subject matter hereof. This Agreement, other than Exhibits
which may be modified by one party as set forth herein, may not be modified,
changed or altered except by written agreement signed by authorized
representatives of the parties.

     24.3 Notices. Except as otherwise provided in this Agreement, any notice,
request, demand or approval to be given hereunder shall be in writing and shall
be considered delivered three (3) days after deposit with United States mail,
postage prepaid, certified or registered mail, return receipt requested, or one
day after deposit with UPS or other nationally recognized overnight courier
service, postage prepaid or upon hand delivery, as follows:

           If to CSXI:  CSX Intermodal, Inc.
                        301 West Bay Street, 27th Floor
                        Jacksonville, Florida  32202-4434
                        Attn: Executive Vice President of Marketing and Sales

           If to APL:   APL Limited/APL Co. Pte Ltd.
                        1111 Broadway
                        Oakland, CA  94607
                        Attn:  Law Department

           If to LTS:   Pacer International, Inc.
                          d/b/a Pacer Stacktrain
                        2300 Clayton Road
                        Concord, California 94520
                        Attn: Vice President Transportation Purchasing

Any party may change the person to be notified or its address by written notice
to the other.

     24.4 Waiver. If a party delays or fails to enforce any term or condition of
this Agreement, it will not be considered a waiver of enforcement or further
enforcement of that or any other term or condition. If a party consents or
approves of any act by the other party, it will not be considered to waive or
render unnecessary consent to or approval of any subsequent similar act.

     24.5 Severability. Each and every clause of this Agreement shall be
severable from each other. In the event that any particular clause herein shall
be held invalid and null and void in any judicial proceeding, such finding shall
have no effect on the remaining clauses.

     24.6 Applicable Law. This Agreement is subject to, and shall be construed
and enforced in accordance with, the laws of the State of Florida (excluding the
principles thereof governing conflicts or choice of law).

                                      -21-

                                                                    Confidential

<PAGE>

     24.7 Jurisdiction and Venue. Subject to the parties' agreement to
arbitrate, each party (a) agrees that any suit, action or other legal proceeding
arising out of or relating to this Agreement may be brought in any court of
competent jurisdiction in the City of Jacksonville or in the United States
District Court for the Middle District of Florida, (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding, and (c)
waives any objection which it may have to the laying of venue of any such suit
or proceeding in any of such courts.

     24.8 Survival. The provisions of Articles 11, 13, 14, 15, 17, 22 and 23,
and the Exhibits and Appendices referenced in such Articles, and Sections 19.4,
19.5, 24.6, 24.7 and 24.8 of this Agreement and any other provision that by its
terms or meaning is intended to survive, shall survive any termination of this
Agreement.

     24.9 Benefit of Parties. Nothing in this Agreement shall be construed to
give any person or entity other than CSXI, APL and LTS, and their respective
successors and permitted assigns, any legal or equitable right, remedy or claim
under this Agreement.

     24.10 Time is of Essence. Time is of the essence in the performance of each
party's obligations under this Agreement.

     24.11 Interpretation. The parties acknowledge that the terms and conditions
of this Agreement are the result of their cooperative effort and, as such, no
provision shall be more strictly construed against a party on the basis that
such party was responsible for drafting such provision.

     24.12 Joint and Several Liability. APL and LTS each agree that it shall be
jointly and severally liable for all APL or LTS obligations hereunder.

     24.13 Cumulative Remedies. All rights and remedies conferred under this
Agreement or by any other instrument or law shall be cumulative and may be
exercised singularly or concurrently.

     24.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                      -22-

                                                                    Confidential

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers the day and year first above written.

                           CSX INTERMODAL, INC.

                           By: /s/  Clarence W. Gooden
                              --------------------------------------------------

                           Print Name: Clarence W. Gooden
                                      ------------------------------------------

                           Title: President
                                 -----------------------------------------------

                           PACER INTERNATIONAL, INC.,
                                 d/b/a PACER STACKTRAIN

                           By: /s/  Larry Yarberry
                              --------------------------------------------------

                           Print Name: Larry Yarberry
                                      ------------------------------------------

                           Title: Executive Vice President
                                 -----------------------------------------------

                           APL LIMITED

                           By: /s/  Timothy J. Windel
                              --------------------------------------------------

                           Print Name: Timothy J. Windel
                                      ------------------------------------------

                           Title: Vice President
                                 -----------------------------------------------

                           APL CO. PTE LTD.

                           By: /s/  Timothy J. Windel
                              --------------------------------------------------

                           Print Name: Timothy J. Windel
                                      ------------------------------------------

                           Title: Vice President
                                 -----------------------------------------------

                                                                    Confidential<PAGE>

                             C O N F I D E N T I A L

                              AMENDED AND RESTATED

                          RAIL TRANSPORTATION AGREEMENT
                                     between

                         UNION PACIFIC RAILROAD COMPANY
                                       and

                PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN
                    (f/k/a APL LAND TRANSPORT SERVICES, INC.)
                                       and
                         AMERICAN PRESIDENT LINES, LTD.
                                       and
                                APL CO. PTE LTD.

<PAGE>

                                                  TABLE OF CONTENTS
<TABLE>
<S>                                                                                                               <C>
Section 1.    EFFECTIVE DATE, TERM AND RENEWAL ................................................................   2
Section 2.    DEFINITIONS .....................................................................................   2
Section 3.    AUTHORIZED AGENT ................................................................................   2
Section 4.    RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP ...............................................   3
                  Linehaul Services ...........................................................................   3
Section 5.    TERMINAL SERVICES TO BE PROVIDED BY UP ..........................................................   4
                  A.  General Services ........................................................................   4
                  B.  Loading Containers ......................................................................   5
                  C.  Other Terminal Services .................................................................   5
                  D.  Facilities ..............................................................................   6
                  E.  Additional Terminal Services Provided by UP for Stack
                      Car Trains for Which UP Does Not Receive a Linehaul .....................................   7
Section 6.    UP EQUIPMENT OBLIGATIONS ........................................................................   9
                  A.  Intermodal Cars Furnished by UP .........................................................   9
                  B.  Stack Car Supply ........................................................................  10
                  C.  UP Relief From Obligation ...............................................................  10
                  D.  Equipment Use ...........................................................................  10
                  E.  Maintenance of Equipment ................................................................  11
                      1.   Responsibility .....................................................................  11
                      2.   Cost of Repairs for APL Stack Cars .................................................  11
                      3.   Cost of Repairs for Containers and Chassis .........................................  11
                      4.   Repairs by Non-Responsible  Party ..................................................  12
                      5.   Permission to Enter ................................................................  12
Section 7.    SERVICE COMMITMENTS BY UP .......................................................................  13
Section 8.    APL'S VOLUME COMMITMENT                13
Section 9.    CAR COST COMPONENT AND USE OF APL OWNED
                  STACK CARS ..................................................................................  13
                  A.  APL's Payment for Stack Cars ............................................................  13
                  B.  UP Use of and Payment for APL Owned or Leased Stack Cars ................................  15
Section 10.   OTHER APL OBLIGATIONS ...........................................................................  16
                  A.  Collection of Charges        16
                  B.  Shipping Orders              16
                  C.  UP Domestic Container Space .............................................................  16
Section 11.   EQUIPMENT STORAGE ...............................................................................  17
                  A.  Parking Spaces at Terminals .............................................................  17
                  B.  Equipment Storage Charges ...............................................................  17
                  C.  Storage of Stack Cars ...................................................................  17
Section 12.  PARTICIPANT AND TPI SHIPMENTS ....................................................................  18
                  A.  UP and Participants To Negotiate All Terms Other Than
                      Rates and Train Schedules ...............................................................  18
                  B.  Participants' Volume Commitment                19
                  C.  International Shipments for TPI Customers ...............................................  19
Section 13.   RATES/ADJUSTMENT TO RATES .......................................................................  19
Section 14.   COMPETITIVE PROPOSALS ...........................................................................  19
Section 15.   FORCE MAJEURE ...................................................................................  19
Section 16.   ARBITRATION .....................................................................................  20
                  A.  Panel ...................................................................................  20
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<S>                                                                                                              <C>
                  B.  Arbitrators' Findings and Rules of Evidence .............................................  21
                  C.  Arbitrators' Duties .....................................................................  22
                  D.  Expenses ................................................................................  22
                  E.  Confidentiality .........................................................................  22
Section 17.   RENEGOTIATION ...................................................................................  22
Section 18.   MUTUAL INDEMNITY ................................................................................  23
Section 19.   CLAIMS FOR CARGO LOSS AND DAMAGE ................................................................  24
                  A.  Domestic Shipments and Third Party Equipment ............................................  24
                  B.  International Shipments .................................................................  24
                      1.   Duties of Parties ..................................................................  24
                  C.  Processing of Cargo Claims ..............................................................  25
                  D.  Notification of Damage ..................................................................  26
                  E.  Agreement Only for Benefit of Party .....................................................  26
                  F.  Condition Precedent .....................................................................  27
Section 20.   HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES ..................................................  27
                  A.  Hazardous Materials .....................................................................  27
                  B.  Indemnity ...............................................................................  28
                  C.  Duty of Cooperation .....................................................................  28
Section 21.   FEDERAL CONTRACTOR REQUIREMENTS .................................................................  29
                  A.  Applicable Laws .........................................................................  29
                  B.  Certification ...........................................................................  30
Section 22.   OTHER AGREEMENTS ................................................................................  30
Section 23.   WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL
                  RULES APPLY .................................................................................  31
Section 24.   ASSIGNMENT ......................................................................................  31
Section 25.   YEAR 2000 COMPLIANCE ............................................................................  33
Section 26.   NOTICES .........................................................................................  34
Section 27.   CONFIDENTIALITY .................................................................................  35
Section 28.   VENUE ...........................................................................................  36
Section 29.   APPLICABLE LAW ..................................................................................  36
</TABLE>

                                      -ii-

<PAGE>

                             C O N F I D E N T I A L
                              AMENDED AND RESTATED
                          RAIL TRANSPORTATION AGREEMENT

                  THIS AGREEMENT is made and entered into as of the ____ day of
May, 2002, between UNION PACIFIC RAILROAD COMPANY, a Delaware Corporation
("UP"), and PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN (f/k/a APL LAND
TRANSPORT SERVICES, INC.), a Tennessee corporation (hereafter "LTS" or "Pacer"),
and AMERICAN PRESIDENT LINES, LTD., a Delaware corporation (hereafter "APL
International") and APL CO. PTE LTD., a Singapore company (hereafter "APL Co.").
LTS, APL International and APL Co. are sometimes jointly referred to as "APL".
RECITALS

                  APL International and APL Co. provide ocean common carrier
freight transportation. LTS provides intermodal management services and acts as
agent for APL International, APL Co., Participants and TPI Customers. UP
provides rail transportation services as a common and exempt intermodal carrier.

                  APL International, APL Co., LTS and UP are parties to that
certain Rail Transportation Agreement dated October 11, 1996 (the "Original
Agreement"), pursuant to which UP provides rail transportation services to APL
for the movement of foreign and domestic cargo in Containers under the terms and
conditions contained therein. The Original Agreement also covers transportation
via the former Southern Pacific Transportation Company and its affiliated
railroads (collectively referred to as "SP") which have been acquired by and are
under common control with UP.

         The      Original Agreement further provides for (i) carriage of
                  International Shipments in Containers owned or leased by third
                  party ocean carriers (hereafter "TPI Shipments") as arranged
                  by APL; (ii) carriage of Domestic Shipments in Containers

<PAGE>

owned or leased by third party ocean carriers as arranged by APL; and (iii)
carriage of auto parts shipments for foreign automobile companies in APL or
other ocean carrier Containers as arranged by APL (hereafter "CKD Shipments").
The term "International Shipments" as used in the Original Agreement (and in
this Agreement) includes shipments moving for the benefit of APL International,
APL Co., TPI Shipments and CKD Shipments.

                  The Original Agreement also formalized and consolidated
agreements and understandings, which have been reached over the years between
the parties, in anticipation of the transaction involving the recapitalization
of LTS which occurred in May 1999 and resulted in a substantial change in
ownership of LTS.

                  The parties desire to amend and restate the Original Agreement
to read as set forth in this Agreement in order to give effect to certain
agreements and understandings among them regarding car supply and to make
certain other technical changes and corrections as they have deemed necessary.

                                    AGREEMENT

                  NOW THEREFORE, the parties agree as follows:

Section 1.        EFFECTIVE DATE, TERM AND RENEWAL

                  The Original Agreement took effect on October 11, 1996, thirty
days after the Control Date, and as amended and restated herein shall continue
to be in effect until October 10, 2011.

Section 2.        DEFINITIONS

                  Capitalized terms used in this Agreement which are not defined
in the Agreement itself will have the meanings set forth in Exhibit A to this
Agreement.

                                      -2-

<PAGE>

Section 3.        AUTHORIZED AGENT

                  APL International and APL Co. designate LTS as their
authorized representative for the following purposes under this Agreement,
including but not limited to:

         1.       Paying transportation charges, as required by this Agreement;
         2.       Arranging all operational matters connected with APL
                  International's and APL Co.'s Containers;
         3.       Giving and receiving all notices under this Agreement; and
         4.       Performing all other actions and performance required of or
                  permitted to APL International and APL Co. under this
                  Agreement.

                  APL International and APL Co. reserve the right, at their sole
discretion and upon prior notice to UP, to take such direct actions and directly
perform such obligations under this Agreement as they deem necessary or
convenient. It is contemplated by the parties that such direct action and
performance by APL International and APL Co. generally will be limited to cargo
claims, federal contractor compliance, and other administrative matters.

                  Notwithstanding the foregoing the parties agree that in the
event LTS fails to perform any of the duties and responsibilities for APL
International and APL Co. with respect to this Agreement with UP, APL
International and APL Co. shall perform those duties and responsibilities,
particularly payment of transportation charges as required by this Agreement.

Section 4.        RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP

                  Linehaul Services

                  UP shall transport loaded Containers carrying International
and Domestic Shipments, empty Containers or empty APL Stack Cars between the
points and at the

                                      -3-

<PAGE>

divisions, charges and rates (hereafter "Rates") set forth in Exhibit B, as
adjusted from time to time under the terms of this Agreement.

Section 5.        TERMINAL SERVICES TO BE PROVIDED BY UP

         A.       General Services

                  The Rates set forth in Exhibit B, as adjusted from time to
time under the provisions of this Agreement, include the following additional
services to be performed by UP or its authorized agents or independent
contractors:

                  (a)      Lifting Equipment onto Intermodal Cars and securing
                           Equipment onto Intermodal Cars and unsecuring
                           Equipment and lifting or driving Equipment from
                           Intermodal Cars except at On-Dock facilities.

                  (b)      Preparing Equipment receipt and interchange
                           inspection reports evidencing the apparent condition
                           of the Equipment at times of interchange providing
                           copies of those reports to APL;

                  (c)      Providing timely notification of Arrival and
                           Availability of Shipments to APL or Participant as
                           identified on the bill of lading;

                  (d)      Assessing and collecting any Equipment storage
                           charges against Participants for Domestic Service
                           shipments held at any UP terminal beyond the free
                           time as may be provided in UP's Intermodal Rules
                           except as otherwise provided herein. The Parties
                           agree that APL shall not be responsible for payment
                           of storage charges on Participants' shipments;
                           however, APL shall cooperate with UP to enable UP to
                           collect storage charges on Participants' shipments.

                                      -4-

<PAGE>

                  (e)      Providing APL with a daily inventory report of all
                           APL owned or leased Stack Cars, Containers and
                           chassis on hand at UP's Global One facilities. Such
                           report will be by unit number and will be furnished
                           once daily by 10:00 AM Chicago time for each calendar
                           day.

                  (f)      Such other transferring, marshaling and repositioning
                           of Equipment within rail terminals as may be
                           necessary or convenient to carry the purposes of this
                           Agreement into effect.

         B.       Loading Containers

                  Except at On-Dock Facilities, UP shall load the Containers
tendered under this Agreement on to Intermodal Cars in a timely manner. UP shall
load Intermodal Cars properly in accordance with any safe operating parameters
given by connecting rail carriers to UP and/or established by UP, the AAR or the
FRA.

                  When Stack Cars are received from connecting rail carriers at
interchange points, UP shall accept the connecting rail carrier's loading of top
and bottom Containers on each platform as being in accordance with the loading
capabilities of the Stack Cars and normal railroad operating parameters.

         C.       Other Terminal Services

                  APL will pay the Rates set forth in Exhibit B for the
following additional terminal services:

                  (a)      Transferring Containers at Global One between
                           Railcars, including Stack Cars and Standard Railroad
                           Flatcars. Such service includes the attachment or
                           detachment of a chassis.

                  (b)      Unloading or loading empty Containers, when directed
                           by APL, from or to Stack Cars or Flatcars when such
                           empty Containers are

                                      -5-

<PAGE>

                           received or delivered in interchange from or to
                           connecting rail carriers at Chicago, Illinois and on
                           which UP does not receive a linehaul movement.

                  (c)      Lifting Containers when directed by APL, between
                           chassis; or from the ground to chassis or from
                           chassis to ground, when directed by APL or required
                           due to APL's shortage of chassis, and the charge for
                           such lifting is not covered in the linehaul rates
                           shown in Exhibit B to this Agreement or in (a) or (b)
                           above.

         D.       Facilities

                  (a)      UP agrees to maintain its Chicago, IL area Stack Car
                           Train terminal facility at a size and capacity such
                           as will accommodate APL's requirements for Stack Car
                           Train traffic and terminal services.

                  (b)      UP agrees to provide APL with use of no less than one
                           set of three ramp tracks and two cranes or lifting
                           devices during the scheduled loading or unloading of
                           any APL Stack Car Train of ten (10) or more cars.

                  (c)      UP shall lease to APL for the term of this Agreement
                           and any extensions thereof 1,800 square feet of
                           office space at its Global One facility to APL for
                           APL's use in the administration of its Stack Car
                           Train operations. The lease shall contain normal and
                           customary terms and conditions concerning tenant and
                           landlord obligations and responsibilities, and the
                           rent required shall not exceed the fair rental value
                           of the leased premises.

                                      -6-

<PAGE>

         E.       Additional Terminal Services Provided by UP in Chicago, IL for
                  Stack Car Trains for Which UP Does Not Receive a Linehaul.

                  In addition to providing terminal service in connection with
APL Stack Car Trains for which UP receives a linehaul movement, UP shall also
provide additional terminal services as defined in this Section 5 for APL Stack
Car Trains which UP does not handle in linehaul service.

                  (1)      Such additional terminal services will not be
                           provided for Stack Car Trains originating or
                           terminating in the States of Washington, Oregon or
                           California for which UP does not receive a linehaul.

                  (2)      Such additional terminal services shall be limited to
                           apply to a reasonable number of weekly Stack Car
                           Trains but in no case less than two such Stack Car
                           Trains per week.

                  (3)      UP shall have no obligations hereunder to provide
                           Intermodal Cars used in transferring Containers from
                           such Stack Car Trains for movement beyond the
                           Chicago, IL area. However, upon notice from APL, UP
                           will use reasonable efforts to furnish any excess
                           Intermodal Cars that may be in UP's possession at
                           Chicago, IL.

                  (4)      Such terminal services shall not include payment by
                           UP of any other rail carrier's switching charges.

                  (5)      APL shall reimburse UP for any transportation expense
                           incurred by UP for the movement of traffic which UP
                           did not handle in linehaul service.

                  (6)      At UP's option, such terminal service will be
                           provided at either UP's Global One or Global Two
                           facilities.

                                      -7-

<PAGE>

                  (7)      UP shall assess and APL shall pay a per Container fee
                           as set forth in Exhibit B for such additional
                           terminal services, provided however, such per
                           Container fee shall only be assessed when UP does not
                           receive a linehaul movement. Also UP shall assess and
                           APL shall pay an additional fee for each Container
                           transferred between Stack Cars and Flatcars as set
                           forth in Exhibit B. This charge includes attachment
                           to or detachment from a chassis. When UP does not
                           receive a linehaul, such additional terminal services
                           shall be performed under operating Schedules as
                           mutually agreed upon by UP, APL and, where necessary,
                           the connecting rail carrier providing linehaul
                           transportation service.

Section 6.        UP EQUIPMENT OBLIGATIONS

         A.       Intermodal Cars Furnished by UP

                  1. At each intermodal terminal where APL tenders volumes to
UP, UP shall furnish APL with a sufficient number of Stack Cars to transport
loaded and empty Containers tendered by APL on any given day for movement under
the applicable Train Schedule, provided that APL shall provide verbal advance
notice of its estimated Stack Car needs to UP as provided in Section 6.A.2.
below.

                  2. Other than for shipments originating at On-Dock rail
terminals at San Pedro, CA, Tacoma, WA and Seattle, WA ("On Dock Terminals"),
APL will provide UP with twelve (12) hours verbal advance notice of its
estimated Stack Car needs. For shipments originating at the On Dock Terminals,
APL will provide UP with five (5) days advance verbal notice of its anticipated
Stack Car needs based upon inbound ocean vessel loadings. Further, APL will
provide UP with twenty-four (24) hours advance

                                      -8-

<PAGE>

verbal notice of its actual Stack Car needs so as to allow sufficient time for
UP to position the required empty Stack Cars to the On Dock Terminal.

                  3. The parties recognize that the day-to-day volume of
domestic and international export loaded containers cannot be predicted with
certainty. Further, the parties recognize that the available supply of Stack
Cars for outbound loading at any given rail intermodal terminal and at On Dock
Terminals is also dependent upon timely arrival and unloading of inbound trains.
Considering these factors, the parties also recognize that APL cannot provide UP
with precise advance notice of its daily Stack Car needs. However, APL will use
its best efforts to provide the most accurate advance notice as possible. So
long as APL provides the advance notice as required in sub-paragraph A.2. of
this Section 6, APL's failure to provide the exact number of Stack Cars required
will not relieve UP of its obligation as stated in sub-paragraph A.1. of this
Section 6. To the extent APL's actual daily volume exceeds the estimated volume
provided by APL in its 12 hour advance notice by a factor of 125%, UP will not
be obligated to provide Stack Cars for the volume in excess of 125%.

         B.       Stack Car Supply

                  The conditions under which UP will provide Stack Cars to APL
are set forth in Appendix 6.B.

         C.       UP Relief From Obligation

                  In the event APL incurs a shortage of chassis at any given UP
intermodal terminal, and such shortage results in a situation where inbound APL
Containers are held on Stack Cars, then UP will be relieved of certain of its
Stack Car supply obligations as described in Appendix 6.B until such time as all
inbound APL Containers are placed on chassis.

                                      -9-

<PAGE>

         D.       Equipment Use

                  The rules covering the use of a Container while the Container
is in UP's possession or while UP may otherwise be responsible for the Container
shall be governed by the AAR Rules.

         E.       Maintenance of Equipment

                  1.       Responsibility

                  Except as otherwise stated in this Agreement, responsibility
for loss, damage, maintenance, and repair of Equipment and Intermodal Cars will
be governed as follows:

                           (a)      Intermodal  Cars shall be  governed  by the
then current Field Manual of the A.A.R. Interchange Rules, sometimes referred to
as the Car Interchange Rules of the Association of American Railroads ("Car
Rules") in effect on the effective date of this Agreement and as may be amended
from time to time, and

                           (b)      Containers and Chassis shall be governed by
the Container Rules.

                  2.       Cost of Repairs for APL Stack Cars

                  The cost of repairs to APL Stack Cars shall be allocated as
follows:

                           (a)      APL shall pay for or perform owner's
responsibility repairs under the Car Rules.

                           (b)      UP shall pay for or perform those handling
carrier  responsibility repairs under the Car Rules that become necessary while
an APL Stack Car is in the possession of UP.

                           (c)      APL shall be responsible for all repairs
 while an APL Stack Car is in the  possession of a third party, including but
not limited to another rail carrier.

                                      -10-

<PAGE>

                  3.       Cost of Repairs for Containers and Chassis
                  The cost of repairs to Containers and Chassis will be
allocated as follows:

                           (a)      APL shall pay for or perform owner's
responsibility repairs under the Container Rules.

                           (b)      UP shall pay for or perform  those  handling
carrier responsibility repairs under the Container Rules that become necessary
while a Container or Chassis is in the possession of UP. If after joint
investigation by APL and UP, the responsible party cannot be determined, the
cost of handling carrier responsibility repairs shall be shared equally by APL
and UP.

                           (c)      As between APL and UP, APL shall be
responsible for all repairs while a Container or Chassis is in the possession of
a third party, including but not limited to a motor carrier and other rail
carriers.

                  4.       Repairs By Non-Responsible Party

                  If either party performs repairs to Containers or Chassis for
which the other party is responsible under this Section, the responsible party
shall pay the performing party as set forth in the Container Rules.

                  5.       Permission To Enter.

                  Only upon written request by APL, and after execution of a
signed Right of Entry Agreement, UP may permit APL or its contractor to enter
onto UP property at UP origins and UP destinations to bring personnel, material
and equipment onto that property, and to perform repairs to Containers, Chassis,
and Stack Cars on that property. This permission, if granted, shall be in
writing and shall not be unreasonably withheld.

                                      -11-

<PAGE>

Section 7.        SERVICE COMMITMENTS BY UP

                  Appendix 7 sets out the standards for UP's service performance
and the remedies if UP fails to meet those standards.

Section 8.        APL'S VOLUME COMMITMENT

                  Appendix 8 sets forth APL's volume commitment to UP and
remedies if APL fails to meet those commitments.

Section 9.        CAR COST COMPONENT AND USE OF APL OWNED STACK CARS

         A.       APL's Payment for Stack Cars.
                  Other than the domestic 20' and 40' rates applying from
Chicago, IL, Kansas City, MO and St. Louis, MO on the one hand, to Seattle, WA,
Portland, OR, Oakland, CA and Los Angeles, CA, on the other hand, the domestic
rates shown in Exhibit B include a car cost component equal to the average per
diem and mileage paid by UP to TTX and other rail carriers. The car cost
component is derived by the process described in Appendix 9.A.

         B.       UP Use of and Payment for APL Owned or Leased Stack Cars.

                  1. For purposes of this Agreement, the terms "APL owned Stack
Cars" and "APL Stack Car" shall mean those cars owned by APL and/or Pacer as
well as those cars leased by APL and/or Pacer bearing marks of "APLX" or "BRAN"
or any other mark Pacer arranges to be placed on Stack Cars for movement on UP
under this Agreement.

                  2.       UP may use APL owned Stack Cars for the  movement of
APL volumes,  Pacer  volumes or the volumes of other UP customers.

                  3. Appendix 9.B sets forth the parties' agreement regarding
per diem and mileage rates payable by UP for the use of, and other matters
regarding, the Stack Cars identified in Appendix 9.B.

                                      -12-

<PAGE>

Section 10.       OTHER APL OBLIGATIONS

         A.       Collection of Charges

                  APL shall pay UP the Rates set forth in Exhibit B, adjusted in
accordance with Section 13, as compensation for the transportation services
described in this Agreement. Payment shall be made within thirty (30) days of
receipt of an invoice from UP. However, if APL demonstrates that it received any
UP invoice more than six calendar days after the date of the invoice, the
payment period shall be extended, day for day, by the number of days beyond six
days. If APL does not pay UP within the specified time period at UP's request,
APL shall pay a late charge of 1.5% per month or the maximum rate then
permissible by law, whichever is less.

         B.       Shipping Orders

                  APL shall prepare shipping orders which will specify the rail
route of movement for the Containers listed on each shipping order.

         C.       UP Domestic Container Space

                  APL agrees to make available to UP's retail subsidiary, Union
Pacific Distribution Services ("UPDS") or its successors, a minimum of 25% of
the available domestic Container space on any given APL Train (hereinafter "25%
Allocation").

                  In the event UPDS does not fully utilize its 25% Allocation
during any calendar month for a particular traffic corridor, the total number of
Containers tendered by UPDS for Stack Car Train service in that corridor and
direction of movement in the following calendar month shall not exceed 200% of
the average per train tender for the month in which UPDS did not utilize its 25%
Allocation, not to exceed a 10-unit increase per Stack Car Train. For example,
if UPDS's current 25% Allocation for the Stack Car Train moving eastbound from
Oakland, California, is 50 Containers per train, and during a given calendar
month, UPDS tenders an average of 20 Containers per train, then

                                      -13-

<PAGE>

UPDS's maximum 25% Allocation for the next month for that train will be 20 x
200% or a total of 10 additional Containers per train, whichever is less. In
this example, UPDS's new 25% Allocation on the eastbound Stack Car Train from
Oakland, California, would be 30 Containers per train.

Section 11.       EQUIPMENT STORAGE

         A.       Parking Spaces at Terminals

UP will provide parking spaces and spaces for empty chassis to APL at UP's
Global One facility pursuant to the terms and conditions specified in
Appendix 11.

         B.       Equipment Storage Charges

                  UP will allow APL Equipment to be stored at points set forth
in Exhibit G, subject to the free time and charges set forth in that Exhibit.

         C.       Storage of Stack Cars

                  1. At UP's Global One facility, UP shall provide temporary
track space to store Stack Cars as specified in Appendix 11. UP will make
reasonable efforts to accommodate the storage of additional Stack Cars, that is,
Stack Cars above and beyond those Stack Cars specified in Appendix 11. Such
storage may be at Global One or elsewhere on UP controlled property. If UP is
unable to store additional Stack Cars, it will verbally notify APL. Within
twenty-four (24) hours of such notification, APL will verbally notify UP of
APL's desired disposition of these Stack Cars. All APL controlled Stack Cars
will remain in the APL account until delivered off-line.

                  2. UP shall provide temporary storage of APL Stack Cars
without charge when cargo volumes or other factors do not allow for continued
use of APL Stack Cars. When APL Stack Cars are stored by UP, UP shall be
relieved of paying the per diem charges as set forth in Section 4 of Appendix
9.B from the time the APL Stack Car is placed in storage until it is removed
from storage.

                                      -14-

<PAGE>

Section 12.  PARTICIPANT AND TPI SHIPMENTS

         A.       UP and Participants To Negotiate All Terms Other Than Rates
                  and Train Schedules

                  UP and APL agree that APL arranges for the transportation of
Participants' Containers with UP, as well as with other rail carriers. UP and
APL acknowledge that the terms and conditions of the transportation by rail
shall be agreed upon by UP and the Participants other than the Rates and Train
Schedules applicable to Participants for movement of their Containers.

                  Unless otherwise specifically advised in writing by APL, UP
acknowledges that APL has no authority as agent for the Participants to enter
into any agreement with UP exculpating or in any way limiting UP's liability for
cargo loss, damage, delay or misdelivery, if any. UP shall issue bills of lading
either directly or through APL as agent of UP which advises Participants of the
terms and conditions of the rail transportation.

         B.       Participants' Volume Commitment

                  UP shall allow any Domestic Shipments tendered by a
Participant under this Agreement to count toward any annual volume commitment
which that Participant has with UP.

         C.       International Shipments for TPI Customers

                  Provisions for TPI Customer shipments are set forth in
Appendix 12.C.

Section 13.       RATES/ADJUSTMENT TO RATES

                  Appendix  13 sets forth UP's rates and charges to APL and the
adjustment mechanisms applicable to those rates and charges.

                                      -15-

<PAGE>

Section 14.       COMPETITIVE PROPOSALS

                  Appendix 14 sets forth provisions for the adjustment of UP's
rates and charges to APL as a result of specified market conditions and
competitive circumstances.

Section 15.       FORCE MAJEURE

                  In the event that either party is unable to meet its
obligations under this Agreement as a result of Acts of God, war, insurrection,
strikes, high winds, derailments which result in the normal route being
impassable, heat and cold weather speed restrictions, or any like causes beyond
its control, the performance obligations of the party or parties affected by the
force majeure condition shall be suspended to that extent for the duration of
such event; PROVIDED, HOWEVER, that the parties shall make all best faith
efforts to continue to meet their obligations during the duration of the force
majeure condition; and PROVIDED, FURTHER, that the party declaring force majeure
shall notify the other parties in writing when (a) the force majeure commences,
(b) the nature of the force majeure, and (c) when the force majeure condition is
terminated.

                  The suspension of any obligation owing to force majeure shall
neither cause the term of this Agreement to be extended nor affect any rights
accrued under this Agreement prior to the force majeure condition.

                  If the parties are unable to agree on whether an operating
condition constitutes a force majeure condition, the matter shall be brought to
the attention of the APL Vice President-Transportation Purchasing and the UP
Vice President-Intermodal within ten (10) days of the occurrence of the disputed
event for resolution by them.

                                      -16-

<PAGE>

Section 16.       ARBITRATION

         A.       Panel

                  If during the term of this Agreement any dispute between the
parties, except concerning loss and damage, should arise regarding the
interpretation, application or enforcement of any of the terms of this
Agreement, and such dispute cannot be resolved by the parties within sixty (60)
days after either of the parties notified the other of its desire to arbitrate
the dispute, then the dispute shall be settled by arbitration in accordance with
the rules then in effect of the American Arbitration Association. For
arbitration, a panel of three arbitrators shall be named, one to be selected by
UP, one to be selected by APL, and one to be selected by the other two
arbitrators. If the two arbitrators previously appointed by UP and APL cannot
agree upon the third arbitrator within fifteen (15) days, then either party may
apply to the presiding judge of any court of competent jurisdiction for
appointment of a neutral third arbitrator. In the alternative, the parties may
agree on a sole arbitrator.

         B.       Arbitrators' Findings and Rules of Evidence

                  The finding of the arbitrator shall be binding on the parties,
subject to provisions of the Federal Arbitration Act. No change in the rules of
arbitration which would deprive a party of the right to be represented by
counsel, to present evidence or to cross-examine witnesses presented by the
other party shall be effective in any arbitration proceeding arising out of this
Agreement.

         C.       Arbitrators' Duties

                  The arbitrators shall have no power to modify any of the
contract provisions without the parties' consent, and their jurisdiction is
limited accordingly. The decision of the arbitrators shall be rendered within
ninety (90) days after the matter has been submitted.

                                      -17-

<PAGE>

         D.        Expenses

                  Each of the parties shall be responsible for the expenses
incurred by the arbitrator appointed by said party, and the expenses, fees and
cost of the third arbitrator, or sole arbitrator shall be borne equally between
the parties.

         E.       Confidentiality

                  Any terms and conditions of this Agreement as well as any
confidential cost information which must be disclosed by any party during the
course of arbitration shall only be disclosed pursuant to the arbitrators'
execution of a non-disclosure agreement acceptable to all parties.

Section 17.       RENEGOTIATION

         A. If performance of the terms of this Agreement, as currently written
or as subsequently modified by the parties or by order, law, rule, regulation of
a competent governmental or regulatory authority would have a material adverse
effect on any party due to causes beyond the control of the materially adversely
affected party, then that party may request in writing that any or all terms of
this Agreement be renegotiated; PROVIDED, HOWEVER, that competitive
transportation proposals or offerings shall not be grounds for such
renegotiation. New terms so renegotiated shall become effective at the time a
renegotiated agreement is executed. If, after renegotiation in good faith, the
parties are unable to agree upon new terms within 90 days of the written request
for renegotiation, any party may terminate this Agreement by giving written
notice of termination to all other parties.

         B.       The mechanism for any party to this Agreement to request
renegotiation of Rates is set forth in Appendix 17.B.

                                      -18-

<PAGE>

Section 18.       MUTUAL INDEMNITY

                  Each party to this Agreement shall indemnify and hold the
other party harmless against all liability, loss, damage, and expense, including
attorneys' fees, reasonably incurred by the other party to the extent that such
liability, loss or damage is caused by the negligent or intentional act or by
any default under this Agreement by any employee, agent or subcontractor of the
indemnifying party. More specifically, UP shall be liable to APL for any loss or
damage to APL owned, leased or controlled Equipment or for any injury to any
employee, agent or subcontractor of APL caused by the negligent or intentional
act or failure to act by UP, its agents and subcontractors to the extent
provided by applicable law. If UP is found liable for such loss, damage or
injury, UP shall also be liable for any expenses, including attorneys' fees,
reasonably incurred by APL in resolving such claims.

                  APL shall be liable to UP for any loss or damage to UP owned,
leased or controlled Equipment or for any injury to any employee, agent or
subcontractor of UP caused by the negligent or intentional act or failure to act
by APL, its agents and subcontractors to the extent provided by applicable law.
If APL is found liable for such loss, damage or injury, APL shall also be liable
for any expenses, including attorneys' fees, incurred by UP in resolving such
claims.

Section 19.    CLAIMS FOR CARGO LOSS AND DAMAGE

         A.    Domestic Shipments and Third Party Equipment

                  Liability for loss or damage to any Equipment owned by persons
other than the parties to this Agreement shall be governed by the terms and
provisions of UP's Intermodal Rules and the AAR Container Rules.

                  Claims for loss or damage to Domestic Shipments shall be
handled by UP with the individual Participant, and UP's liability to the
Participant shall be as set forth in

                                       -19-

<PAGE>

                  UP's Intermodal Rules. APL agrees to cooperate with UP in
settling any claims for loss or damage to Domestic Shipments or to Equipment
owned by persons other than the parties to this Agreement.

         B.       International Shipments

                  This section shall govern claims arising out of International
Shipments only.

                  1. Duties of Parties

                  UP and APL each undertake, with respect to the other,

                  (a) to cooperate with each other to settle International cargo
and Equipment damage claims, and to do nothing to increase the liability or
exposure of the other party to increased cargo or equipment damage claims.

                  (b) to accept liability for actual cargo shortage when a seal
is breached while the cargo is in its possession, unless that party can produce
an executed interchange receipt or other documentation showing that the seal was
broken when the cargo was first received by the party;

                  (c) to accept liability for cargo and Equipment damage when
carrying Equipment is damaged while in its custody or that of its agents, unless
such party can produce duly executed interchange receipt documentation or other
documentation evidencing that the Equipment was damaged when first received by
such party or that cargo damage was caused by other than such party's handling.
APL will provide all pertinent documentation including any communications from
the individual cargo interest relating to the shipment and all APL
correspondence with the individual cargo interest relating to the shipment as
well as any reports or communications made or ordered by APL while the shipment
was in the possession of

                                       -20-

<PAGE>

APL, including, but not limited to, bills of lading, dock receipts, trailer
interchange records, and surveys made of the cargo or equipment.

                  (d) Nothing in this Agreement shall be defined or construed to
make the package or liability limitations of C.O.G.S.A. unavailable to UP.

C. Processing of Cargo Claims

                  When APL refers a cargo claim either for Domestic or
International Shipments, to UP, UP shall:

                  (a) acknowledge receipt of the referred claim to APL within 30
days of such receipt; and,

                  (b) within 120 days after receipt of the completed referred
claim,

                  (1) pay the claim;

                  (2) decline to pay the claim and furnish an explanation of
denial together with any supporting documentation for the denial; or

                  (3) advise APL as to the status of the claim as required by
Part 1005 of Title 49, Code of Federal Regulations. D. Notification of Damage

                  Whenever substantial cargo or Equipment damage is brought to
the attention of UP's Damage Prevention Services while the cargo or Equipment is
in the possession of UP, UP shall promptly notify APL concerning the extent of
damage as well as the location and availability of the cargo and Equipment for
inspection, APL shall thereafter notify the cargo interest of any damaged cargo
and obtain the instructions of the cargo interests, if any, and furnish advice
of disposition to UP. UP shall not dispose of any cargo and/or Equipment without
APL's written authorization to do so. Whenever substantial damage is brought to
the attention of APL while the cargo is in the

                                       -21-

<PAGE>

possession of APL, APL shall promptly notify UP's Damage Prevention Services as
to the nature of the damage and location of the Equipment.

                  E. Agreement Only for Benefit of Party

                  Except as otherwise provided herein, this Agreement shall not
be interpreted as intended for the benefit of, or as providing any legal remedy
for, any person not a party hereto.

                  F. Condition Precedent

                  As a condition precedent to recovery on claims for loss or
damage, the liability of UP shall be limited to those cargo claims which are
filed with UP by cargo interests, or by APL when the claim rights of cargo
interests have been subrogated to APL, in writing within nine months (9) from
the date that UP has completed performance under the through bill of lading for
such shipment; PROVIDED, HOWEVER, that for shipments moving via UP direct or
where UP is solely responsible for said loss or damage, said filing period shall
be extended to twelve (12) months from the date UP has completed performance
under the through bill of lading when said claim is filed with UP by cargo
interests directly, and said filing period shall be extended to fourteen (14)
months from the date UP has completed performance under the through bill of
lading when said claim is filed with UP by APL on behalf of cargo.

Section 20. HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES

         A.       Hazardous Materials

                  In the event that any International or Domestic Shipment
contains hazardous material, APL International or APL shall obtain certification
on the shipping documents received from the consignor that the consignor has
complied with all appropriate federal regulations governing the transportation
of such hazardous materials, including, but not limited to, regulations
concerning loading, blocking, bracing,

                                       -22-

<PAGE>

documentation, placarding, commodity mix, and packaging. APL shall furnish UP
(or the origin carrier) with the hazardous materials information prior to
acceptance for transportation by UP. UP reserves the right to refuse to accept
or restrict hazardous materials. UP shall supply APL with a list of prohibited
hazardous materials not later than 30 days prior to UP's refusal to accept such
hazardous materials under this Agreement.

                  B. Indemnity

                  APL shall indemnify UP for all losses, damages, liabilities,
fines, civil penalties and expenses (including attorney's fees) suffered by UP
to the extent caused by the omission of full disclosure required by this Section
or by applicable law or regulation.

                  Containers discovered leaking hazardous materials at any UP
destination terminal shall not be allowed to leave the premises until (a)
responsibility therefor is determined and/or the leak is repaired, or (b) UP
obtains permission from the involved Government authorities to move the
shipment.

                  C. Duty of Cooperation

                  The parties recognize that, as to Domestic Shipments, the
primary responsibility for any spill, discharge, or accident resulting from a
failure by the consignor to comply with applicable federal regulations shall be
the responsibility of the Participants; and that, in the event of a spill,
discharge, or accident resulting from the failure of a consignor or one or more
Participants to properly package, block, brace, or load hazardous materials, or
in the event of a claim, lawsuit, judgment, settlement, citation, fine or
penalty arising out of such failure, UP shall assist APL by furnishing all
relevant communications, data, information and reports to APL.

                                       -23-

<PAGE>

Section 21.       FEDERAL CONTRACTOR REQUIREMENTS

                  A. Applicable Laws

                  The parties, each for its own part, shall comply with and give
all representations and further assurances required by any law or regulation
applicable to federal contracts and subcontracts including, without limitation,
the following:

                  (1) the extent applicable, the Renegotiation Act of 1951, as
amended, (50 U.S.C. App.ss.ss.1211 et seq.,), the Walsh-Healy Public Contracts
Act, as amended (41 U.S.C.ss.ss.35, 45), and the Contract Work Hours and Safety
Standards Act, as amended (40 U.S.C.ss.ss.327,333); (2) to the extent
applicable, Executive Order No. 11246 dated September 24, 1965, as amended,
relating to equal employment opportunity and affirmative action in employment of
persons without regard to race, color, religion, sex or national origin;
Executive Order No. 11701 dated January 24, 1973, relating to affirmative action
in the employment of certain veterans; Executive Order No. 11758 dated January
15, 1974, relating to affirmative action in employment of handicapped
individuals; Executive Order No. 11 625 dated October 13, 1971, relating to the
assistance of minority business enterprises; Executive Order No. 12138 dated May
18, 1979, relating to the assistance of women's business enterprises; the Age
Discrimination Act of 1975; all applicable Regulations of the Secretary of
Labor, including, but not limited to, 41 C.F.R.ss.ss.60-1.4 et seq.; 41
C.F.R.ss.ss.60-250 et seq.; and 41 C.F.R.ss.ss.60-741 et seq.; and all
applicable Federal Procurement Regulations including, but not limited to, 41
C.F.R.ss.ss.1-1.13 et seq.; and,

                  (3) to the extent applicable, Defense Acquisition
Regulations-104.14, relating to the utilization of small business and minority
business concerns; and 7-104.20, relating to the utilization of labor surplus
area concerns.

                                       -24-

<PAGE>

                  B. Certification

                  Each party hereby certifies to the other that it does not and
shall not maintain any facilities provided for employees which are unlawfully
segregated, that it does not and shall not permit employees to perform services
at any location under its control or that of its subcontractors where unlawfully
segregated facilities are maintained, and that it shall require its non-exempt
subcontractors to furnish a similar certification to the award of any non-exempt
contract.

Section 22.       OTHER AGREEMENTS

                  This Agreement and the Original Agreement, as amended and
supplemented and in effect through the date of this Agreement (including,
without limitation, the Letter of Understanding dated April 4, 2002, between the
parties), together comprise the entire agreement and understanding between the
parties regarding the subject matter hereof and thereof and supersede all other
existing and prior agreements between the parties with respect to such subject
matter; provided, however, that the termination of any and all existing and
prior agreements shall not release any party from any obligation that may have
accrued under those agreements prior to such termination.

Section 23.       WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL RULES APPLY

                  The provisions relating to the applicability of UP's
Intermodal Rules are set forth in Appendix 23 and Exhibit Z.

Section 24.       ASSIGNMENT

                  Except as expressly allowed by this Section, no party to this
Agreement may assign this Agreement, in whole or in part, or assign any rights
granted by or under this Agreement, or delegate to any person not a party to
this Agreement any of its

                                       -25-

<PAGE>

obligations under this Agreement without the prior written consent of the other
party. In the event of an acquisition or merger of UP by another Class I
railroad or by UP of another Class I railroad, APL International, APL Co. and/or
LTS have the right (1) to refuse its agreement to allow UP to assign this
Agreement to the acquiring or merging party(ies) and (2) if UP attempts to
assign this Agreement, to terminate this Agreement upon thirty (30) days written
notice at any time subsequent to the consummation of the transaction between UP
and the other party(ies). Similarly, in the event of a major restructuring of
APL International, APL Co. and/or LTS which (a) would result in a significant
change in the volume of Containers tendered by APL International, APL Co. and/or
LTS to UP or (b) would significantly increase the cost of doing business for UP
or (c) would significantly change UP's operational or administrative efficiency
of doing business with APL International, APL Co. and/or LTS, or (d) would
significantly impact UP's position negatively in the intermodal market; UP has
the right to refuse its agreement to allow APL International, APL Co. and/or LTS
to assign this Agreement. However, if the major restructuring of APL
International, APL Co. and/or LTS does not result in any of the changes
described in (a) through (d) of the immediately preceding sentence, APL
International, APL Co. and/or LTS may assign this Agreement without UP's
consent. In the event that UP's consent is required because a major
restructuring of APL International, APL Co. and/or LTS would result in (a), (b),
(c) , or (d) above, and UP does not grant its consent to the assignment on that
basis, the parties shall engage in renegotiation of the Agreement in an effort
to obtain UP's consent. In the event the parties cannot successfully renegotiate
this Agreement, LTS shall have the right to terminate this Agreement in its
entirety as to all parties. In the event that LTS terminates this Agreement
pursuant to the above sentence, APL International, APL Co. and LTS will
transition their business to a new carrier as soon as possible, but no longer

                                       -26-

<PAGE>

than six (6) months after termination of this Agreement. Subject to this
Section, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their permitted successors and assigns.

                  For purposes of this Section, a major restructuring is defined
as a merger, sale of substantially all assets or other change of control. An
initial public offering of shares of APL International, APL Co. and/or LTS shall
not be considered to result in any of the changes described in (a) through (d)
above; and, therefore, shall not be considered to require UP's consent to
assignment of this Agreement.

Section 25.       YEAR 2000 COMPLIANCE

                  UP and APL each represent and warrant (i) it has audited its
computer hardware and software systems which will be utilized in connection with
this Agreement and (ii) that accurate and current information regarding the Year
2000 Compliance status of such hardware and software systems and the party's
plans to address Year 2000 Compliance problems have been supplied or made
available to the other party. UP and APL each further represent and warrant that
they will cooperate with each other in providing or making available updated
information regarding their Year Compliance program upon reasonable request.

                  Any costs associated with effectuating Year 2000 Compliance
shall be borne by each party and shall not result in any additional charges to
the other under this Agreement.

                  When data is exchanged between UP and APL as part of this
Agreement, UP and APL each agree to provide to the other, at no additional cost,
reasonable testing assistance and cooperation in order to verify Year 2000
Compliance. Each party shall designate a Year 2000 Technical Contact person with
sufficient knowledge, experience, and expertise in areas of the Year 2000
problem and the party's systems environment,

                                       -27-

<PAGE>

who will be available to facilitate answering questions, coordinate deliverables
for testing Year 2000 compliance and provide other assistance as needed.

                  For purposes of this Section, "Year 2000 Compliance" means
that each computer hardware and software system or component thereof (including
without limitation hardware, firmware, middleware, custom or commercial
software, internal components or subroutines therein, or databases which perform
any date/time data recognition function, calculation, comparing or sequencing)
will (a) accurately record, process, store and display date and time data
(including but not limited to calculating, comparing and sequencing) on dates
from, into and between different centuries, including the years 1999 and 2000
and including leap year calculations, (b) will respond to two-digit date input
in a way that resolves any ambiguity as to century in a disclosed and defined
manner, (c) will store and provide output of date information in ways that are
unambiguous as to century, and (d) will conform to the foregoing requirements
when interfacing with operating systems and other software, hardware and systems
with which it will interact in performing any obligations under this Agreement.

Section 26.       NOTICES
                  -------

                  Except as provided otherwise in this Agreement, any and all
notices given by any party under this Agreement shall be in writing and shall be
delivered (postage or other delivery charges prepaid) to the other parties by
USPS Express Mail, UPS, DHL, Federal Express or other established expedited
courier service, telecopy, facsimile or like wire delivery or any other
commercially reasonable and accepted form of delivery, excluding regular U.S.
Postal Service, to the following addressees:

         To LTS:         Pacer International, Inc.
                         2300 Clayton Road, Suite 1200
                         Concord, California 94520
                         ATTN: Vice President-Transportation Purchasing

                                       -28-

<PAGE>

           To APL Co./            American President Lines, Ltd.
           APL International:     APL Co. PTE, Ltd.
                                  1111 Broadway
                                  Oakland, California 94607
                                  ATTN: Vice President-Transportation Purchasing

           To UP:                 Union Pacific Railroad Company
                                  1416 Dodge Street
                                  Omaha, NE 68179
                                  ATTN:  Vice President -Intermodal

Any written notice given under this Agreement shall be deemed effective on the
date the notice is received.

Section 27.       CONFIDENTIALITY

                  The parties agree that the commercial terms of this Agreement
and its appendices are confidential and proprietary, and that unauthorized
disclosure could be damaging from a commercial or competitive standpoint under
many circumstances. Therefore, except as otherwise provided in this Agreement
and except to the extent required by law, the contents of this Agreement shall
not be disclosed or released by any party to anyone other than that party's
employees on a "need to know" basis without the written consent of the other
party during the term of this Agreement and for one (1) year thereafter. Any
employee having access to any part of this Agreement or to any information
contained within the Agreement must agree to abide by the terms of this
provision. This includes, without limitation, rate information of any kind,
customer identities, traffic volumes and commodities moving via APL, train
schedules and/or performances, and any other information learned by one party
about the other's business during the course of their dealings thereunder.

                                       -29-

<PAGE>

Section 28.       VENUE
                  -----

                  Any lawsuits filed by either party against the other arising
from any dispute between the parties during the term of this Agreement shall be
brought in the San Francisco, California judicial district, either state or
federal.

Section 29.       APPLICABLE LAW

                  This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California, without reference to the
laws of any other jurisdiction except to the extent governed by the laws, rules
and regulations of the United States.

                                       -30-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first written above.

UNION PACIFIC RAILROAD COMPANY              Attest:

By: /s/ Ivan Evans
   ------------------------------------
Title: President and C.O.O.                                       Secretary
      ---------------------------------

PACER INTERNATIONAL, INC.                            Attest:
         d/b/a Pacer Stacktrain

By: /s/ Larry Yarberry
   ------------------------------------
Title: Executive Vice President                                   Secretary
      ---------------------------------

AMERICAN PRESIDENT LINES, LTD.                       Attest:

By: /s/ Timothy J. Windell
   ------------------------------------
Title: Vice President                                               Secretary
      ---------------------------------

APL CO. PTE LTD.                                              Attest:

By: /s/ Timothy J. Windell
   -----------------------------------
Title: Authorized Signatory                                           Secretary
      --------------------------------

                                       -31-

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