Exhibit 10.1
REIMBURSEMENT AND SECURITY AGREEMENT
REIMBURSEMENT AND SECURITY AGREEMENT, dated as of
July 3, 1997 (this "Agreement"), made by CONSOLIDATED
FREIGHTWAYS CORPORATION OF DELAWARE, a Delaware corporation
("Grantor"), in favor of CNF TRANSPORTATION INC., a Delaware
corporation ("CNF"). All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in
the Guarantee (as defined below) or, if any such term is not
defined in the Guarantee, it shall have the meaning ascribed
thereto in the Participation Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, reference is made to that certain
Participation Agreement, dated as of September 30, 1994 (the
"Participation Agreement"), by and among the Grantor and
certain wholly-owned subsidiaries of CNF (such subsidiaries
are referred to collectively as "Con-Way" and, together with
the Grantor, as the "Lessees"), as Lessees, CNF, as
Guarantor and Lessees' Representative, the several Lessors
identified on Schedule I thereto and BA Leasing & Capital
Corporation, a California corporation ("BALCO"), not
individually, but solely as Agent for the Lessors; and
WHEREAS, pursuant to the Participation Agreement,
the Lessees, CNF and BALCO entered into that certain Master
Lease Intended As Security, dated as of September 30, 1994
(the "Lease"); and
WHEREAS, BALCO agreed to purchase certain vehicles
from the Lessees and to concurrently leaseback such vehicles
to the Lessees pursuant to the terms and conditions of the
Participation Agreement and the Lease; and
WHEREAS, CNF executed and delivered a Guarantee,
dated as of September 30, 1994 (the "Guarantee"), in favor
of BALCO to guarantee the performance by the Grantor and Con-
Way of their respective Obligations under the Participation
Agreement, the Lease and the other Operative Agreements
(such Obligations of Grantor are herein referred to as the
"Grantor Leaseback Obligations"); and
WHEREAS, at the time of the execution and delivery
by CNF of the Participation Agreement, the Lease and the
Guarantee, the Grantor was a wholly-owned direct subsidiary
of CNF; and
WHEREAS, on December 2, 1996, CNF distributed to
its stockholders all of the issued and outstanding shares of
capital stock of Consolidated Freightways Corporation, a
newly-formed Delaware corporation ("CFC"), which then owned
all of the issued and outstanding shares of capital stock of
the Grantor (the "Distribution"); and
WHEREAS, pursuant to the Distribution, CNF ceased
to own any equity interest in the Grantor; and
WHEREAS, CNF continues to guarantee, pursuant to
the Guarantee, the performance by the Grantor of the Grantor
Leaseback Obligations and, in connection therewith, the
Grantor has agreed to (a) reimburse CNF for certain amounts
which CNF may become obligated to pay pursuant to the
Guarantee as a result of, in connection with, or arising
from the failure of the Grantor to perform any of the
Grantor Leaseback Obligations and (b) grant CNF collateral
as provided herein to secure the payment by the Grantor of
the Secured Obligations (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises
herein contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged, the Grantor and CNF agree as follows:
1. Reimbursement Obligation. The Grantor hereby agrees
to pay to CNF, upon written demand, all amounts which CNF is
or may become obligated to pay pursuant to the Guarantee
(other than (i) amounts paid in respect of the Lease Balance
or Variable Rent that are solely and exclusively allocable
to Con-Way and (ii) other amounts paid to the extent that
such payments diminish the amounts payable in respect of the
Lease Balance or Variable Rent that are solely and
exclusively allocable to Con-Way), including without
limitation any amounts in respect of the Administrative
Charge (whether or not allocable to the Grantor, to Con-Way
or to both) as a result of, in connection with or arising
from the failure of the Grantor to perform any of the
Grantor Leaseback Obligations (the "Reimbursement Amounts").
Unless paid on the date of such demand, the Reimbursement
Amounts shall accrue interest at the Default Rate from the
date payment is demanded by CNF to and including the date
reimbursement in full is received by CNF.
2. Grant of Security. The Grantor hereby assigns,
grants and pledges to CNF a security interest in all of the
Grantor's right, title and interest in and to the following,
whether now owned or hereafter acquired (the "Collateral"):
a ) all of the Grantor's right, title and interest in
all vehicles listed on Schedule I hereto and any substitu
tions therefor, replacements thereof and additions thereto,
in each case from time to time pursuant to the provisions of
this Agreement (collectively, the "Vehicles");
b ) all certificates of title, certificates of
ownership, manufacturer's certificates of origin or similar
equivalent instruments issued by any applicable Authority
evidencing title, or an interest in title, to any Vehicle
(collectively, a "Certificate of Title");
c ) all contracts necessary to purchase, operate and
maintain the Vehicles, including all warranties;
d ) any rebate, offset or similar rights under a
purchase order, invoice or purchase agreement with any
manufacturer of any Vehicle;
e ) all books, manuals, logs, records, writing, data
bases, information and other property relating to, used or
useful in connection with, evidencing, embodying or
incorporating any of the foregoing;
f ) all proceeds of any and all of the foregoing
Collateral (including, without limitation, proceeds that
constitute property of the types described in any of the
foregoing clauses of this Section 2) and, to the extent not
otherwise included, all payments under insurance (whether or
not CNF is the loss payee thereof) or any indemnity,
warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing
Collateral; and
g ) all amounts on deposit in the Deposit Account (as
hereinafter defined) including, without limitation, all
earnings thereon ("Earnings") and proceeds thereof.
3. Secured Obligations. This Agreement secures the due,
punctual and full payment by the Grantor of all
Reimbursement Amounts, including accrued interest thereon as
provided in Section 1 hereof, and all other obligations of
the Grantor now or hereafter existing under this Agreement,
including without limitation the amounts payable by the
Grantor to CNF pursuant to Section 13(a) hereof and the
amounts required to be deposited by the Grantor into the
Deposit Account pursuant to Section 7 hereof (collectively,
the "Secured Obligations"). Without limiting the generality
of the foregoing, this Agreement secures the payment of all
amounts which constitute part of the Secured Obligations and
would be owed by the Grantor to CNF but for the fact that
they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding
involving the Grantor.
4. Representations and Warranties. The Grantor represents
and warrants as follows:
a ) The chief place of business and chief executive
office of the Grantor is 000 Xxxxxxxx Xxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000.
b ) The Grantor has record title to each Vehicle, and
each Vehicle and all of the other Collateral is free and
clear of any Lien except for the security interest created
by this Agreement and (i) any Lien (including, without
limitation, Liens of landlords, carriers, warehousemen,
mechanics or materialmen) in favor of any Person securing
payment of the price of goods or services provided in the
ordinary course of business for amounts the payment of which
is not overdue or is being contested in good faith by appro
priate proceedings promptly initiated and diligently prose
cuted, so long as such proceedings do not involve any reason
able danger of sale, forfeiture or loss of all or any materi
al part of the Collateral and do not materially adversely
affect any Lien created in favor of CNF hereunder; (ii) any
Lien for current taxes, assessments or other governmental
charges which are not delinquent or the validity of which is
being contested by a Permitted Contest (as hereinafter
defined); (iii) attachments, judgments and other similar
Liens arising in connection with court proceedings, provided
that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being
contested in good faith and by appropriate proceedings; (iv)
any Lien incurred in the ordinary course of business to
secure performance of statutory obligations; (v) any Lien in
favor of BankAmerica Business Credit, Inc., as Agent
("BABC"), under the Loan and Security Agreement, dated as of
November 27, 1996, among BABC, NationsBank of Texas, N.A.,
the lenders party thereto, CFC, Xxxxxx Xxxxx Xxxxxxx Corpora
tion and the Grantor (the "BABC Agreement") in the
Collateral described in Sections 2(c), 2(d) and 2(e) hereof
to the extent that such Collateral applies both to Vehicles
and to vehicles in which BABC has a security interest in
connection with the BABC Agreement and (vi) any Lien in
favor of ABN Amro Bank N.V., as Agent ("ABN Amro"), under
the Security Agreement, dated as of January 23, 1997, made
by the Grantor in favor of ABN Amro (the "ABN Amro Agree
ment") in the Collateral described in Sections 2(c), 2(d)
and 2(e) hereof to the extent that such Collateral applies
both to Vehicles and to vehicles in which ABN Amro has a
security interest in connection with the ABN Amro Agreement
(all such Liens set forth in clauses (i) through (vi) herein
after referred to as "Permitted Liens"). "Permitted
Contest" shall mean actions taken by a Person to contest in
good faith, by appropriate proceedings initiated timely and
diligently prosecuted, the legality, validity or applicabili
ty to the Vehicles or any interest therein of any Person of:
(A) any law, regulation, rule, judgment, order or other
legal provision or judicial or administrative requirements;
(B) any term or condition of, or any revocations or amend
ments of, or other proceeding relating to, any authorization
or other consent, approval or other action by any Authority
or (C) any Lien or Imposition; provided that the initiation
and prosecution of such contest would not: (1) result in, or
materially increase the risk of, the imposition of any xxxxx
nal lability on CNF; (2) materially and adversely affect the
security interests created hereunder or the right, title or
interest of CNF in or to any of the Collateral or (3)
materially and adversely affect the fair market value, utili
ty or remaining useful life of the Vehicles or any interest
therein or the continued economic operation thereof; and
provided further that in any event adequate reserves in
accordance with GAAP are maintained against any adverse
determination of such contest.
c ) No filing, recordation or registration is
necessary or advisable in order to perfect the security
interest of CNF in the Vehicles and other Collateral other
than the filing or recording of financing statements under
Article 9 of the applicable UCC in Alabama, Alaska, Arizona,
Arkansas, Colorado, Connecticut, Indiana, Kansas, Louisiana,
Maryland, Massachusetts, Missouri, Nevada, Oklahoma, South
Carolina, Tennessee, Utah and Virginia (collectively, the
"Title States" and each a "Title State") and California, and
the recordation on the Certificate of Title for each Vehicle
with the applicable governmental authority of the security
interest of CNF in the respective Title State, and upon the
actions described in the foregoing clause the security
interests in the Vehicles and the other Collateral are en
forceable, properly perfected, first-priority Liens, subject
only to Permitted Liens; provided, however, that such
actions may not be effective to perfect such security
interest in certain Collateral described in Section 2(e)
hereof to the extent such items are stored in (but not made
a part of) a Vehicle and located from time to time in
jurisdictions where no such filing has been made or to the
extent that any such Collateral consists of a type of
collateral in which a security interest cannot be perfected
by taking such actions.
d ) Certain Vehicle Matters.
(i) Each Vehicle is properly registered pursuant to
the International Registration Plan as in effect in the
State in which such Vehicle is titled. "State" shall mean
the District of Columbia and any state of the United States
of America.
(ii) Except as set forth on Schedule I hereto, each
Vehicle has a gross weight rating of more than 16,000
pounds, and no Vehicle has been specifically constructed,
built, reconstituted or assembled.
(iii) The Grantor is not in the business of selling
Vehicles and the Vehicles do not constitute "inventory"
under any applicable UCC.
e ) Registration of Vehicles. Each Vehicle is either
(i) used in interstate commerce, titled in one of the Title
States and registered in a State which is a party to the
International Registration Plan or (ii) used in intrastate
commerce, registered in the State in which it is so used and
titled in one of the Title States.
f ) Intellectual Property. To the Grantor's knowledge
or as represented in writing by a vendor of the Vehicles
which writing has been provided to CNF, there are no
patents, patent rights, trademarks, service marks, trade
names, copyrights, licenses or other intellectual property
rights with respect to the Vehicles, or proprietary,
patented or patentable modifications or Parts (as herein
after defined) used in connection with the Vehicles, the
unavailability of which would have a material adverse effect
on the current fair market value of any Vehicle. "Parts"
means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever
nature that may from time to time be incorporated in or
installed in or attached to any Vehicle.
g ) Insurance. All insurance coverage required by
Section 6(f) hereof is in full force and effect and there
are no past due premiums in respect of any such insurance.
5. Further Assurances.
a ) The Grantor agrees that from time to time, at the
expense of the Grantor, the Grantor will promptly execute
and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or
that CNF may reasonably request, in order to perfect and pro
tect any security interest granted or purported to be
granted hereby or to enable CNF to exercise and enforce its
rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the
foregoing, the Grantor will execute and file such financing
or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or
desirable, or as CNF may reasonably request, in order to
perfect and preserve the security interest granted or
purported to be granted hereby, including with respect to
any Replacement Part (as hereinafter defined) and any
Replacement Vehicle (as hereinafter defined).
b ) As soon as practicable, but in no event later than
forty-five (45) days after the date of delivery of this
Agreement to CNF, the Grantor shall record or file, or cause
to be recorded or filed, an appropriate Certificate of Title
in respect of each Vehicle subject to this Agreement on such
date in the appropriate jurisdiction in order to perfect the
security interest therein created hereby. Within fifteen
(15) days after any other Vehicle becomes subject to this
Agreement, the Grantor shall record or file, or cause to be
recorded or filed, an appropriate Certificate of Title in re
spect of each such Vehicle in the appropriate jurisdiction
in order to perfect the security interest therein created
hereby. In each case, the Grantor shall pay all applicable
filing or recording fees and shall deliver to CNF copies of
all such Certificates of Title with the security interest of
CNF reflected thereon.
c ) The Grantor hereby authorizes CNF to file one or
more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral
without the signature of the Grantor where permitted by law,
if the Grantor has failed to sign such instrument within ten
(10) days after request therefor by CNF. A photocopy or
other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall
be sufficient as a financing statement where permitted by
law.
d ) The Grantor will furnish to CNF from time to time
statements and schedules further identifying and describing
the Collateral and such other reports in connection with the
Collateral as CNF may reasonably request, all in reasonable
detail.
e ) The Grantor (i) shall keep its chief place of
business and chief executive office at the location therefor
specified in Section 4(a) hereof and (ii) shall maintain its
records concerning the Collateral at 0000 X.X. Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx 00000 and/or 0000 X.X. 00xx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000, or, in either case, upon thirty (30)
days' prior written notice to CNF, at such other locations
in a jurisdiction where all actions specified in Section
5(a) hereof shall have been taken with respect to the
Collateral.
f ) CNF and its agents and representatives shall have
the right at all reasonable times, upon reasonable notice,
to inspect any Collateral, including without limitation any
Certificate of Title or documentation related to the
Collateral. The Grantor shall maintain in its records, in a
separate file entitled "CNF Guarantee Documentation," (i)
all Certificates of Title, (ii) microfiche containing Vehi
cle registration documents and (iii) executed blank powers
of attorney enabling CNF to re-register the Vehicles.
6. Use and Ownership Covenants. The Grantor shall
observe the following covenants until the Termination Date
(as hereinafter defined):
a ) Restriction on Possession and Use. The Grantor
shall not:
(i) use, operate, maintain or store any Vehicle or any
portion thereof (A) except in accordance with Section 6(b)
hereof or (B) in violation of any applicable insurance
policy or law or regulation of any Authority;
(ii) abandon any Vehicle, other than a Vehicle which
has suffered a Complete Casualty (as hereinafter defined);
(iii) lease or assign any Vehicle or permit the
operation thereof by any Person other than the Grantor,
except for the temporary loan of Vehicles to other carriers
pursuant to interchange agreements in the ordinary course of
business;
(iv) sell, assign or transfer any of its rights in any
Vehicle, or directly or indirectly create, incur or suffer
to exist any Lien on any of its rights in any Vehicle,
except for Permitted Liens;
(v) permit any Vehicle to be titled in any juris
diction other than the jurisdiction in which it is titled on
the date hereof, unless the security interest of CNF is
noted in the Certificate of Title in the new jurisdiction
and the Grantor notifies CNF within three (3) business days
of any retitling in any jurisdiction other than any of the
Title States; or
(vi) use, operate, maintain or store any Vehicle or any
portion thereof outside of the United States, provided,
however, that the Grantor may use, maintain and operate any
Vehicle outside of the United States on trips to and from a
point of embarkation located within the United States.
b ) Maintenance. The Grantor shall, at its expense:
(i) maintain, manage and monitor the Vehicles in
compliance in all material respects with all applicable re
quirements of law, Authority and/or insurance policies;
(ii) maintain each Vehicle (or cause each Vehicle to be
maintained) in as good operating order, repair and condition
as it was on the date such Vehicle became subject to this
Agreement (to the extent that, as of such date, each such
Vehicle was in good operating order, repair and condition),
ordinary wear and tear excepted;
(iii) maintain, manage and monitor the Vehicles in
accordance with the terms of all applicable contracts
(including, without limitation, service contracts and
insurance contracts) in a manner consistent with the
Grantor's customary practices; and
(iv) conduct all scheduled maintenance of the Vehicles
in conformity with the Grantor's maintenance procedures then
in effect for similar equipment owned or leased by the G
rantor, and applicable warranty guidelines.
The Grantor shall in any event maintain the Vehicles
(or cause the Vehicles to be maintained) in at least as
good a condition as comparable equipment owned or
leased by the Grantor or any of its Subsidiaries. The
Grantor will maintain or cause to be maintained, and
shall permit CNF to inspect, any records, logs and
other materials required by any Authority having juris
diction to be maintained or filed in respect of any
Vehicle.
c ) Replacement of Parts.
(i) In the event that any Part which may from time to
time be incorporated or installed in or attached to any
Vehicle becomes at any time worn out, damaged or permanently
rendered unfit for use for any reason whatsoever (other than
as a result of a Complete Casualty), the Grantor, at its own
cost and expense, will promptly replace, or cause to be
replaced, such Part with a replacement Part (a "Replacement
Part") in accordance with the Grantor's customary practices,
but in any event subject to Section 6(b) hereof. In
addition, the Grantor may, at its own cost and expense,
remove in the ordinary course of maintenance, service, re
pair, overhaul or testing, any Part, whether or not worn
out, destroyed, seized, confiscated, damaged beyond repair
or permanently rendered unfit for use; provided that the
Grantor will, at its own cost and expense, replace such Part
with a Replacement Part as promptly as is commercially
reasonable. Each Replacement Part shall be free and clear
of all Liens (other than Permitted Liens) and shall be in as
good operating condition as, and shall have a value and
utility at least equal to, the Part which it replaced, assum
ing such replaced Part and the Vehicle from which it was
taken were in the condition and repair required to be main
tained by the terms of Section 6(b) hereof.
(ii) Any Part at any time removed from any Vehicle
shall remain subject to this Agreement, no matter where
located, until such time as such Part shall be replaced by a
Part which has been incorporated or installed in or attached
to such Vehicle and which meets the requirements for a
Replacement Part specified in Section 6(c)(i) hereof.
Immediately upon any Replacement Part becoming incorporated
or installed in or attached to any such Vehicle as above pro
vided, without further act: (A) the replaced part (the
"Replaced Part") shall be released from the security
interest created by this Agreement and shall no longer be a
part of the Collateral and (B) such Replacement Part shall
become subject to this Agreement, and the security interest
created hereunder, and shall be deemed part of such Vehicle
for all purposes hereof to the same extent as the Parts
incorporated or installed in or attached to such Vehicle on
the date such Vehicle became subject to this Agreement.
(iii) Upon the satisfaction of the conditions
specified in Section 6(c)(ii) hereof, and the Replacement
Part becoming subject to this Agreement and the security
interest created hereunder, CNF shall execute and deliver to
the Grantor such documents as may be reasonably necessary to
release the Replaced Part from the terms and scope of this
Agreement, in such form as may be reasonably requested by
the Grantor, and in such form and substance satisfactory to
CNF, all at the expense of the Grantor.
d ) Alterations, Modifications and Additions. Except
as provided in Sections 6(b) and 6(c) hereof, the Grantor
shall not remove, replace or alter any Vehicle or affix or
replace any accessory, equipment or device on any Vehicle
(such actions shall be hereinafter referred to collectively
as "alteration") if such alteration would materially impair
the originally-intended function or use or materially reduce
the value or useful life of such Vehicle; provided that the
Grantor, at its own expense, will make, or cause to be made,
any alteration to or in respect of any Vehicle that may be
necessary, from time to time, to comply in all material re
spects with any applicable law, governmental rule or regu
lation or any provision of any insurance policy required to
be maintained under Section 6(f) hereof (any Parts being
used to comply with this proviso shall be hereinafter
referred to as "Mandatory Parts"). All Parts affixed to or
installed as a part of any Vehicle, excluding temporary re
placements, shall thereupon become subject to this Agreement
, and the security interest created hereunder, and shall be
deemed part of such Vehicle for all purposes hereof to the
same extent as the Parts incorporated or installed in or at
tached to such Vehicle on the date such Vehicle became
subject to this Agreement. The Grantor shall repair all
damage to any Vehicle resulting from any alteration so as to
restore such Vehicle to the condition in which it existed
prior to such alteration (ordinary wear and tear excepted).
CNF shall have no obligation to pay for or to reimburse the
Grantor for any alteration required or permitted by this Sec
tion 6(d).
e ) Removal of Parts. Provided that no Event of De
fault shall have occurred and be continuing, the Grantor may
remove, at its expense, any Part at any time (such Part, a
"Removable Part") which:
(i) is in addition to, and not in replacement of or
substitution for, (A) any Part originally incorporated or in
stalled in or attached to a Vehicle on the date such Vehicle
became subject to this Agreement or (B) any Part in re
placement of or substitution for any Part originally in
corporated or installed in or attached to a Vehicle on the
date such Vehicle became subject to this Agreement;
(ii) is not a Mandatory Part; and
(iii) can be removed from a Vehicle without causing
damage to such Vehicle or diminishing or impairing the value
or condition which such Vehicle would have had at such time
had such addition not occurred;
provided that: (A) such removal will not materially
impair the value, use or useful life which such Vehicle
would have had at such time had such Part not been af
fixed to or placed on such Vehicle and (B) such Part is
not necessary for the continued normal use of such
Vehicle. The Grantor shall repair all damage to any
Vehicle resulting from the removal of any Removable
Part so as to restore such Vehicle to the condition in
which it existed prior to such removal (ordinary wear
and tear excepted). CNF shall have no obligation to
pay for or to reimburse the Grantor for the removal of
any Removable Part permitted by this Section 6(e).
f ) Insurance.
(i) Required Coverage. At its own expense, the
Grantor will maintain the following insurance coverage with
respect to the Vehicles:
(1) primary automobile and general liability insurance of
not less than $3,000,000 per occurrence, with excess
coverage of not less than $5,000,000 per occurrence and
$95,000,000 in the aggregate, in each case naming CNF as an
additional insured; and
(2) insurance against all risks of loss or physical
damage to the Vehicles in a primary amount of not less than
$250,000 per occurrence and excess "all risk" coverage on
the Vehicles in a blanket amount of not less than
$100,000,000, which insurance shall name CNF as the sole
loss payee.
(ii) Permitted Insurers. So long as an insurer which
is an Affiliate of the Grantor (the "Insurer") shall (A)
maintain its good standing as an insurer, (B) be financially
sound in the reasonable judgment of CNF and (C) be in
compliance with all applicable regulatory requirements, the
Grantor may obtain primary insurance coverage from the
Insurer, with retained liability for physical damage to the
Vehicles and for liability coverage required under Section
6(f)(i)(1) hereof, which retained liability amounts, in both
such cases, shall be in amounts not greater than amounts
customary for similarly situated companies operating compara
ble equipment in the same industry as the Grantor. The
Grantor shall obtain its excess insurance and, if the
Insurer does not meet the criteria set forth in the
preceding sentence or is no longer providing the Grantor's
insurance, its primary insurance, from financially
responsible companies selected by the Grantor which have an
A.M. Best rating of "A" or are otherwise acceptable to CNF.
(iii) Interest of CNF. All insurance required by
this Section 6(f) shall (i) name CNF as an additional
insured party thereunder and loss payee as specified above
(without any representation or warranty by, or obligation
upon, CNF) as its interest may appear, (ii) contain the
agreement by the insurer that any loss thereunder shall be
payable to CNF notwithstanding any action, inaction or
breach of representation or warranty by the Grantor or any
other entity having an interest in any Vehicle (including,
without limitation, CNF), (iii) provide that there shall be
no recourse against CNF for payment of premiums or other
amounts with respect thereto, (iv) provide that the insurer
shall give CNF at least thirty (30) days' prior written
notice of cancellation, lapse or reduction of limits, (v) be
primary with respect to any other insurance carried by or
available to CNF and (vi) provide that the insurer shall
waive any right of subrogation, setoff, counterclaim or
other deduction, whether by attachment or otherwise, against
CNF. The Grantor shall notify CNF promptly of any policy
cancellation, lapse, reduction in policy limits,
modification or amendment.
(iv) Delivery of Insurance Certificates. The Grantor
has heretofore delivered to CNF certificates of insurance
satisfactory to CNF evidencing the existence of all
insurance required to be maintained hereunder and setting
forth the respective coverage, limits of liability, carrier,
policy number and period of coverage. Thereafter, at the
time each of the Grantor's insurance policies is renewed
(but in no event less frequently than once each year), the
Grantor shall deliver to CNF certificates of insurance
evidencing that all insurance required by this Section 6(f)
to be maintained by the Grantor with respect to the Vehicles
is in effect.
7. Casualties and Casualty Proceeds.
a ) Definitions.
(i) "Complete Casualty" means any of the following
events in respect of any Vehicle: (i) the loss of such
Vehicle or the use thereof due to theft, disappearance, de
struction, damage beyond repair or rendition of such Vehicle
permanently unfit for normal use for any reason whatsoever,
(ii) any damage to such Vehicle which results in any
insurance settlement with respect to such Vehicle on the
basis of a total loss, (iii) the permanent condemnation,
confiscation or seizure of, or requisition of title to or
use of, such Vehicle, (iv) as a result of any rule,
regulation, order or other action by any Authority, the use
of such Vehicle in the normal course of business shall have
been prohibited, directly or indirectly, for a period of six
(6) consecutive months, unless the Grantor, prior to the
expiration of such six-month period, shall have undertaken
and shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such
Vehicle by the Grantor or, in any event, if use of such Vehi
cle shall have been prohibited, directly or indirectly, for
a period of twelve (12) consecutive months or (v) the opera
tion or location of such Vehicle, while under requisition
for use by any Authority, in any area excluded from coverage
by any insurance policy then in effect with respect to such
Vehicle required by the terms of Section 6(f) hereof, if the
Grantor shall be unable to obtain indemnity in lieu thereof
from such Authority.
(ii) "Partial Casualty" means any loss, damage, destruc
tion, taking by eminent domain, loss of use or theft of any
portion of a Vehicle which does not constitute a Complete
Casualty.
(iii) "Unqualified Vehicle" means any Vehicle (i)
which has suffered a Complete Casualty, (ii) which, at the
time of determination, has not been replaced by a Replace
ment Vehicle (as hereinafter defined) and (iii) for which,
at the time of determination, no Casualty Deposit (as
hereinafter defined) has been made into the Deposit Account.
(iv) "Default Casualty" means, in respect of any
Vehicle, the breach of any covenant specified in Section 6
hereof, which breach has continued unremedied for a period
of thirty (30) days after the earlier to occur of (i)
written notice thereof by CNF to the Grantor or (ii) Actual
Knowledge thereof by the Grantor.
(v) "Default Vehicle" means any Vehicle in respect of
which there exists a Default Casualty. A Default Vehicle
will cease to be such immediately upon the remedy of each
Default Casualty which may have existed in respect of it.
b ) Partial Casualties. As soon as practicable after
a Partial Casualty to a Vehicle, the Grantor shall repair
and rebuild the affected portions of such Vehicle (or cause
such affected portions to be repaired and rebuilt) to the
condition required to be maintained by Section 6(b) hereof.
c ) Complete Casualties. In the event that a Vehicle
suffers a Complete Casualty at a time when (i) the number of
Vehicles that have become Unqualified Vehicles during the
same calendar year and that remain Unqualified Vehicles at
such time equals or exceeds five percent (5%) of the number
of Vehicles subject to this Agreement on the date hereof
(the "Initial Vehicle Number") or (ii) the number of
Vehicles that have become Unqualified Vehicles since the
date hereof and that remain Unqualified Vehicles at such
time equals or exceeds ten percent (10%) of the Initial
Vehicle Number, the Grantor shall, within thirty (30) days
of the date on which such Complete Casualty occurs, either
(A) replace, in accordance with Section 7(g) hereof, such
Vehicle or (B) make a deposit (a "Casualty Deposit") into
the Deposit Account equal to the value of the proceeds of
any casualty insurance or condemnation proceeds ("Casualty
Proceeds") payable for such Vehicle.
d ) Default Deposits. In the event that a Vehicle
suffers a Complete Casualty or a Default Casualty at a time
when (i) the number of Vehicles that have become Unqualified
Vehicles during the same calendar year plus the number of
Vehicles which are Default Vehicles at such time equals or
exceeds five percent (5%) of the Initial Vehicle Number or
(ii) the number of Vehicles that have become Unqualified
Vehicles since the date hereof equals plus the number of
Vehicles where are Default Vehicles at such time exceeds ten
percent (10%) of the Initial Vehicle Number, the Grantor
shall, within three (3) Business Days of the date on which
such Complete Casualty or Default Casualty occurs, make a
deposit (a "Default Deposit") into the Deposit Account equal
to the value of the Casualty Proceeds payable for such
Vehicle in the event it suffered a Complete Casualty,
provided that if the value of such Casualty Proceeds is not
readily ascertainable, the amount of the Default Deposit
shall be equal to the replacement cost of the Vehicle.
e ) No Duplicative Deposits. Provided that no Event
of Default has occurred and is continuing, in the event that
a Vehicle suffers a Complete Casualty and the Grantor would
be required to make both an election pursuant to Section
7(c) hereof and a Default Deposit pursuant to Section 7(d)
hereof, the Grantor shall make only the Casualty Deposit
required by Section 7(c). In the event that a Vehicle
suffers a Complete Casualty when an Event of Default has
occurred and is continuing, and the Grantor would be
required to make both an election pursuant to Section 7(c)
hereof and a Default Deposit pursuant to Section 7(d)
hereof, the Grantor shall instead make, within three (3)
Business Days of the date on which such Complete Casualty
occurs, only a Casualty Deposit into the Deposit Account
equal to the Casualty Proceeds for such Vehicle.
f ) Permitted Casualties. The Grantor shall not be
required to replace any Vehicle which has suffered a
Complete Casualty or to make any deposit into the Deposit
Account with respect thereto except as provided in this
Section 7.
g ) Replacement Vehicles. In the event that the
Grantor replaces any Vehicle which has suffered a Complete
Casualty, whether required by this Section 7 or not, the
Grantor shall replace such Vehicle with a vehicle (a
"Replacement Vehicle") that is (i) free and clear of all
Liens (other than Permitted Liens) and (ii) in as good of
operating condition as, and has a value and utility at least
equal to, the Vehicle which it replaced, as determined
immediately prior to the Complete Casualty and assuming that
at such time such replaced Vehicle was in the condition and
repair required to be maintained by the terms of Section
6(b) hereof. Each such Replacement Vehicle shall become
subject to this Agreement, and the security interest created
hereunder, and shall be deemed to be a Vehicle and a part of
the Collateral for all purposes hereunder.
h ) Casualty Proceeds During Default. When an Event
of Default has occurred and is continuing, any payment of
Casualty Proceeds, whether made to the Grantor, CNF or
otherwise, in respect of any Partial Casualty or Complete
Casualty shall be promptly deposited into the Deposit
Account and shall constitute a Default Deposit.
i ) Casualty Proceeds -- No Default. So long as no
Event of Default has occurred and is continuing, (i) any
Casualty Proceeds with respect to a Partial Casualty or a
Complete Casualty shall be payable directly to the Grantor
and (ii) in the event that any Casualty Proceeds are paid to
CNF in respect of any Partial Casualty or Complete Casualty,
CNF shall promptly remit such Casualty Proceeds to the
Grantor.
8. The Deposit Account.
a ) CNF shall establish a deposit account as security
for the Grantor's obligations under this Agreement (the "De
posit Account") into which all Casualty Deposits and Default
Deposits shall be deposited. CNF shall maintain exclusive
control of the Deposit Account and the amounts on deposit
therein, including any Earnings. CNF shall apply any funds
held in the Deposit Account to satisfy any Secured
Obligations that become due and payable to CNF and in the
following order: (i) first, funds which constitute
Earnings, (ii) second, funds which constitute Casualty
Deposits and (iii) third, funds which constitute Default
Deposits.
b ) All Casualty Deposits and Earnings, to the extent
not applied to satisfy Secured Obligations pursuant to
Section 8(a) hereof, shall remain in the Deposit Account
until the Termination Date, provided, however, that the
Grantor may elect at any time (except when an Event of
Default has occurred and is continuing) to replace any
Vehicle, in accordance with Section 7(g) hereof, for which a
Casualty Deposit has been made pursuant to Section 7(c)
hereof, and upon such Replacement Vehicle becoming subject
to this Agreement, and the security interest created hereun
der, the Grantor may elect to withdraw the Casualty Deposit
made with respect to the replaced Vehicle (but not the
Earnings with respect thereto). All Default Deposits, to
the extent not applied to satisfy Secured Obligations
pursuant to Section 8(a) hereof, shall remain in the Deposit
Account until there exists no continuing Event of Default,
at which time such funds shall be promptly remitted to the
Grantor.
c ) All funds in the Deposit Account shall be in
vested, as CNF determines in its sole discretion, in one or
more of the following:
(i) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and
backed by the full faith and credit of the United States
maturing not more than one (1) year from the date of
acquisition;
(ii) certificates of deposit, time deposits, Eurodollar
time deposits, bankers' acceptances or deposit accounts
having in each case a remaining term to maturity of not more
than one (1) year, which are either (A) fully insured by the
Federal Deposit Insurance Corporation or (B) issued by any
commercial bank under the laws of any State or any national
banking association that has combined capital and surplus of
not less than $800,000,000 and whose short-term securities
are rated at least A-1 by S&P or P-1 by Moody's;
(iii) commercial paper that is rated at least A-1
by S&P or P-1 by Moody's, issued by a company that is
incorporated under the laws of the United States or of any
State and directly issues its own commercial paper, and has
a remaining term to maturity of not more than one (1) year;
and
(iv) any money market or other investment fund the
investments of which are limited to investments described in
clauses (i), (ii) and (iii) above and which is managed by
(A) a commercial bank that is organized under the laws of
any State or any national banking association and that has
total assets of at least $1,000,000,000 or (B) an investment
bank that is organized under the laws of any State and that
has total assets of at least $1,000,000,000.
9. Release of Liens. Upon the replacement or substitution
of any Vehicle or Part, or the making of a Casualty
Deposit in connection with a Complete Casualty to a Vehicle,
in each case in compliance with the applicable provisions
hereof, such Vehicle or Part shall be released from the
security interest created hereunder.
10. Event of Default. The occurrence of any of the
following shall constitute an "Event of Default" under this
Agreement:
a ) The Grantor shall fail to make payment of any
amount due hereunder, including any payment required to be
made into the Deposit Fund, and such failure shall continue
for three (3) Business Days;
b ) An "Event of Default," as defined in Section 8.1
of the Lease, shall have occurred and be continuing in
respect of the Grantor, as Lessee thereunder;
c ) Any representation or warranty made by on or
behalf of the Grantor hereunder shall at any time prove to
have been incorrect in any material respect when made,
deemed made or reaffirmed, as the case may be; or
d ) The Grantor shall default in the performance or
observation of any term, covenant, condition or agreement to
be performed or observed by it under this Agreement (not
constituting an Event of Default under any of the foregoing
subsections of this Section 10) and such default shall
continue unremedied for a period of thirty (30) days after
the earlier to occur of (i) written notice thereof by CNF to
the Grantor or (ii) Actual Knowledge thereof by the Grantor.
11. Remedies.
a ) If the Grantor shall fail to make payment of any
amount due hereunder, including any payment required to be
made into the Deposit Fund, and such failure shall continue
for three (3) Business Days, then CNF may exercise in
respect of the Collateral, in addition to rights and
remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default
under the Uniform Commercial Code in effect in the State of
California at that time (the "Code") (whether or not the
Code applies to the affected Collateral), and also may (i)
require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of CNF forthwith,
assemble all or part of the Collateral as directed by CNF
and make it available to CNF at a place to be designated by
CNF which is reasonably convenient to both parties, (ii)
without notice except as specified below, sell the Col
lateral or any part thereof in one or more parcels at public
or private sale, at any of CNF's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other
terms as CNF may deem commercially reasonable, including
public sales to CNF or one or more of its designees and
(iii) enter upon the premises where any Vehicle may be and
either remove such Vehicle, with any damage to the im
provements on such premises to be borne by the Grantor (ex
cept to the extent such damage is due to the willful
misconduct or gross negligence of CNF or its representa
tives), or take possession of such Vehicle. The Grantor
agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Grantor of the
time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable
notification. CNF shall not be obligated to make any sale
of Collateral regardless of notice of sale having been
given. CNF may adjourn any public or private sale from time
to time by announcement at the time and place fixed there
for, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. The
Grantor acknowledges that sales for cash or on credit to a
wholesaler, retailer or user of Collateral, at a public or
private sale, are in each case commercially reasonable.
b ) Any cash held by CNF as Collateral and all cash
proceeds received by CNF in respect of any sale of,
collection from, or other realization upon all or any part
of the Collateral may, in the discretion of CNF, be held by
CNF as collateral for, and/or then or at any time thereafter
be applied in whole or in part by CNF against, all or any
part of the Secured Obligations in such order as CNF shall
elect. As soon as practicable after the Termination Date,
any surplus of such cash or cash proceeds held by CNF
remaining after payment in full of all the Secured
Obligations shall be paid over to the Grantor or to whomsoev
er may be lawfully entitled to receive such surplus.
c ) If the Grantor fails to perform any agreement
contained herein, CNF may itself perform, or cause perfor
xxxxx of, such agreement, and the expenses of CNF incurred
in connection therewith shall be payable by the Grantor in
accordance with Section 13(a) hereof.
d ) The Grantor hereby irrevocably appoints CNF as the
Grantor's attorney-in-fact, with full authority in the place
and stead of the Grantor and in the name of the Grantor or
otherwise, from time to time in CNF's discretion, upon the
occurrence and during the continuance of an Event of
Default, to take any action (including any action the
Grantor is entitled to take) and to execute any instrument
which CNF may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(i) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for
money due and to become due under or in connection with the
Collateral;
(ii) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection
with the foregoing clause (i);
(iii) to file any claim or take any action or
institute any proceedings which CNF may deem to be necessary
or advisable for the collection thereof or to enforce
compliance with the terms and conditions of any Collateral;
and
(iv) to perform any affirmative obligations of the
Grantor hereunder.
The Grantor hereby acknowledges, consents and agrees
that the power of attorney granted pursuant to this
Section 11(d) is irrevocable and coupled with an
interest.
e ) Upon the occurrence of any Event of Default, CNF
may proceed directly against the Grantor to secure any
remedy, either equitable or for the payment of moneys due,
without resorting to any right or remedy CNF may have with
respect to the Collateral. The rights and remedies of CNF
hereunder are cumulative and are not exclusive of any rights
or remedies provided by law or in any other contract between
the Grantor and CNF.
12. CNF's Duties. The powers conferred on CNF hereunder
are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually
received by it hereunder, CNF shall have no duty as to any
Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights
pertaining to any Collateral. CNF shall be deemed to have
exercised reasonable care in the custody and preservation of
any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which CNF
accords its own property.
13. Expenses.
a ) The Grantor shall, upon written demand, pay to CNF
the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any
experts and agents, which CNF may incur in connection with:
(i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the
rights of CNF hereunder or (iv) the failure by the Grantor
to perform or observe any of the provisions hereof. Unless
paid on the date of such demand, such amounts shall accrue
interest at the Default Rate from the date payment is
demanded by CNF to and including the date payment in full is
received by CNF.
b ) In the event that the Agent exercises its right to
terminate the Lease pursuant to Section 8.2 thereof as a
result of, in connection with or arising from the failure of
the Grantor to perform the Grantor Leaseback Obligations,
the Grantor shall pay to CNF, upon written demand, an amount
of money equal to the sum of:
(i) the product of (A) $160.07 and (B)
the number of days, if any, between the date
on which the Agent so terminates the Lease
and December 15, 1999; and
(ii) the product of (A) $42.59 and
(B) the number of days between the date
on which the Agent so terminates the
Lease and December 15, 2000.
The factors set forth in clauses (i) and (ii) above are
based upon the following facts which CNF represents and
warrants to be accurate:
(X) the cost of establishing the Lease
was $525,000, consisting of $390,000 in fees
paid to the Agent, $125,000 in legal fees
paid to Xxxxx, Xxxxx & Xxxxx, $6,000 in
appraisal fees and $4,000 in legal fees paid
to Xxxxxxxx & Xxxxxxxx; and
(Y) the initial Lease value of the Group
A Vehicles (i.e., tractors) leased to the
Grantor was $15,926,163.96, the initial Lease
value of the Group A Vehicles leased to Con-
Way was $33,401,756.47 and the initial Lease
value of the Group B Vehicles (i.e.,
trailers) leased to Con-Way was
$10,667,985.00.
c ) The Grantor shall, upon written demand, pay to CNF
the amount of any and all moneys due and payable pursuant to
Section 14 hereof. Unless paid on the date of such demand,
such amounts shall accrue interest at the Default Rate from
the date payment is demanded by CNF to and including the
date payment in full is received by CNF.
14. Indemnification. To the fullest extent permitted by
applicable law, the Grantor waives and releases any claims
now or hereafter existing against CNF on account of, and
shall indemnify, reimburse and hold CNF harmless from, any
and all claims by third parties (including, but not limited
to, claims relating to trademark or patent infringement and
claims based upon negligence, strict liability in tort,
violation of laws, including, without limitation, Environmen
tal Laws, statutes, rules, codes or orders or claims arising
out of any loss or damage to any property or death or injury
to any Person), any losses, damages or obligations owing to
third parties, any penalties, liabilities, demands, suits,
judgments or causes of action, and all legal proceedings
(either administrative or judicial), in each case whether or
not CNF is a party thereto, and any costs or expenses in
connection therewith (including costs incurred in connection
with discovery) or in connection with the enforcement of
this indemnity (including reasonable attorneys' fees and
expenses, and fees and expenses of internal counsel,
incurred by CNF), including, in each case, matters based on
or arising from the negligence of CNF (subject to the
proviso below), which may be imposed on, incurred by or
asserted against CNF by Persons other than the Grantor
(except to the extent arising by or through a claim of a
third party) in any way relating to or arising in any manner
out of:
a ) the registration, purchase, taking or foreclosure
of a security interest in, ownership, delivery, condition,
lease, sublease, assignment, storage, transportation,
possession, use, operation, return or other disposition of
any of the Vehicles, or any defect in any such Vehicle,
arising from the material or any article used therein or
from the design, testing or use thereof, or from any
maintenance, service, repair, overhaul or testing of any
such Vehicle regardless of when such defect shall be
discovered, whether or not such Vehicle is in the possession
of the Grantor and no matter where it is located; or
b ) this Agreement or any document or certificate
delivered in connection therewith, the enforcement hereof or
thereof or the consummation of the transactions contemplated
hereby or thereby;
provided that the Grantor shall not be obligated to indemni
fy CNF for any such claim, loss, damage, liability,
obligation, penalty, demand or suit to the extent the same
results directly from (i) the willful misconduct or gross
negligence of CNF or (ii) a disposition by CNF of any
Vehicle following the purchase of such Vehicle by CNF from
the Grantor in a foreclosure sale or any use or operation of
such Vehicle following such disposition (other than use or
operation by the Grantor or an Affiliate, agent or repre
sentative of the Grantor); provided, however, that nothing
in the preceding proviso shall be deemed to exclude or limit
any claim that CNF may have under this Agreement or appli
cable laws from the Grantor for breach of its representa
tions, warranties or covenants. The obligations of the
Grantor pursuant to this Section 14 (the "CNF Indemnities")
shall survive the termination of this Agreement.
15. Amendments; Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure
by the Grantor herefrom, shall in any event be effective
unless the same shall be in writing and signed by CNF, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which
given.
16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telecopier communication) and mailed, telecopied
or delivered to it as follows:
if to the Grantor, at:
Consolidated Freightways Corporation of Delaware
000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
or if to CNF, at: CNF Transportation Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
or, as to either party, at such other address as shall be
designated by such party in a written notice to the other
party. All such notices and other communications shall,
when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively.
17. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the
Termination Date, (b) be binding upon the Grantor, its
successors and assigns and (c) inure to the benefit of, and
be enforceable by, CNF and its successors, transferees and
assigns. On the Termination Date, the security interest
granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantor. Thereafter, CNF
shall, at the Grantor's expense, execute and deliver to the
Grantor such documents as the Grantor shall reasonably re
quest to evidence such termination. The Termination Date
shall be the later to occur of (i) the date on which the
Secured Obligations (other than the CNF Indemnities and
other than Reimbursement Amounts in respect of Surviving
Indemnities (as hereinafter defined) which are not then due
and payable), if any, have been paid in full and (ii) the
date on which CNF receives a certification from BALCO that
(A) the Grantor Leaseback Obligations (other than Surviving
Indemnities, if any) have been indefeasibly paid in full in
cash and (B) all the agreements of the Grantor under the
Guarantee, the Lease, the Participation Agreement and the
other Operative Documents (other than the agreement to pay
Surviving Indemnities) have been duly performed. Surviving
Indemnity means any Grantor Leaseback Obligation in the
nature of an indemnity or hold harmless by the Grantor in
favor of BALCO or any Lessor arising under or pursuant to
any Operative Document which by its terms survives the
termination of the Operative Documents and the payment of
all Grantor Leaseback Obligations, other than those in the
nature of an indemnity or hold harmless, due thereunder.
18. Governing Law; Terms. This Agreement shall be gov
erned by and construed in accordance with the laws of the
State of California, except to the extent that the validity
or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Collateral
are governed by the laws of a jurisdiction other than the
State of California. Unless otherwise defined herein, terms
used in Division 9 of the Code are used herein as therein
defined.
19. JURY TRIAL. THE GRANTOR AND CNF (BY THEIR ACCEPTANCE
OF THIS AGREEMENT AND THE BENEFITS HEREUNDER) WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, AND AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, the Grantor has caused this
Agreement to be executed and delivered by its officer there
unto duly authorized as of the date first above written.
CONSOLIDATED FREIGHTWAYS
CORPORATION OF DELAWARE
By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
