EXHIBIT 10.34
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DISTRIBUTION AGREEMENT
between
CONSOLIDATED FREIGHTWAYS, INC.
and
CONSOLIDATED FREIGHTWAYS CORPORATION
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.1 General 1
ARTICLE II THE DISTRIBUTION
2.1 Cooperation Prior to the Distribution 5
2.2 Conditions to Distribution 5
2.3 The Distribution 6
2.4 Sale of Fractional Shares 6
2.5 Odd-Lot Program 7
ARTICLE III TRANSACTIONS RELATING TO THE DISTRIBUTION
3.1 The Reorganization 7
3.2 Company Board 13
3.3 Company Charter and Bylaws 13
3.4 Other Agreements 13
3.5 Operation in the Ordinary Course of
Business 13
3.6 Insurance 14
3.7 Collections and Payments after the
Distribution Date 14
3.8 Certain Post-Distribution Transactions 14
ARTICLE IV INDEMNIFICATION
4.1 Indemnification by CFI 15
4.2 Indemnification by the Company 15
4.3 Limitations on Indemnification
Obligations 16
4.4 Procedures for Indemnification 17
4.5 Releases 19
4.6 Environmental Liabilities 20
ARTICLE V ACCESS TO INFORMATION; SERVICES
5.1 Access to Information 20
5.2 Production of Witnesses 21
5.3 Provision of Services 21
5.4 Reimbursement 21
5.5 Retention of Records 22
5.6 Confidentiality 22
5.7 Provision of Corporate Records 23
5.8 Privileged Matters 23
ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 Financial Statements 24
6.2 Form 10 and Information Statement 24
6.3 Marks 24
ARTICLE VII SHARED CLAIMS
7.1 Acknowledgment. 25
7.2 Notification. 25
7.3 Cooperation. 25
7.4 Liability. 26
7.5 Non-Shared Liabilities. 26
ARTICLE VIII MISCELLANEOUS
8.1 Complete Agreement; Construction 26
8.2 Expenses 26
8.3 Governing Law 27
8.4 Notices 27
8.5 Amendments and Waivers 27
8.6 Counterparts 28
8.7 Successors and Assigns 28
8.8 Termination 28
8.9 No Third-Party Beneficiaries 28
8.10 Titles and Headings 28
8.11 Legal Enforceability 28
8.12 Further Assurances 29
8.13 No Solicitation of Employees 29
8.14 Dispute Resolution 30
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (the "Agreement") is
made as of this 25th of November, 1996 by and between
CONSOLIDATED FREIGHTWAYS, INC., a Delaware corporation
("CFI"), and CONSOLIDATED FREIGHTWAYS CORPORATION, a
Delaware corporation (the "Company").
RECITALS
WHEREAS, CFI is the holder of all of the issued
and outstanding shares of common stock, $.01 par value per
share, of the Company (the "Company Common Stock");
WHEREAS, the Board of Directors of CFI (the "CFI
Board") has determined that it is advisable to distribute
(the "Distribution") all of the shares of Company Common
Stock to the holders of the common stock, $.01 par value per
share, of CFI (the "CFI Common Stock");
WHEREAS, CFI and the Company have determined that
it is necessary and desirable to set forth the principal
corporate transactions required to effect the Distribution
and certain other agreements that will govern certain
matters relating to the Distribution and the relationships
thereafter between CFI and the Company;
NOW, THEREFORE, in consideration of the mutual
promises hereinafter set forth and other good and valuable
consideration, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 General. As used in this Agreement, the
following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and
plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any
governmental or other regulatory or administrative agency or
commission or any arbitration tribunal.
ADR Agreement: the Alternative Dispute Resolution
Agreement to be entered into by CFI and the Company as of
the Distribution Date, the form of which is attached hereto
as Annex 1.
Affiliate: as defined in Rule 12b-2 under the
Exchange Act.
CFI Group: At any time following the
Distribution, CFI and all entities which are Affiliates of
CFI at such time.
Code: the Internal Revenue Code of 1986, as
amended.
Commission: the Securities and Exchange
Commission.
Company Group: at any time following the
Distribution, the Company and all entities which are
Affiliates of the Company at such time.
Distribution Agent: The Bank of New York.
Distribution Date: the date as determined by the
CFI Board or a committee thereof on which the Distribution
takes place by delivery of the shares of Company Common
Stock to the Distribution Agent.
Distribution Ratio: the ratio of CFI Common Stock
to Company Common Stock to be distributed in the
Distribution.
Employee Benefit Matters Agreement: the Employee
Benefit Matters Agreement to be entered into by CFI and the
Company as of the Distribution Date, the form of which is
attached hereto as Annex 2.
Environmental Liabilities: means any Liabilities
arising from, under or relating to any environmental, health
or safety law, rule, regulation, Action, threatened Action,
order or consent decree.
Exchange Act: the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.
Form 10: the registration statement on Form 10
filed by the Company with the Commission to effect the
registration of the Company Common Stock under the Exchange
Act.
Information Statement: the Information Statement
on Form 14C filed by the Company with the Commission and
included in the Form 10 at the time of its effectiveness.
Insurance Proceeds: those monies (i) received by
an insured from an insurance carrier on an insurance claim
or (ii) paid by an insurance carrier on behalf of an insured
on an insurance claim, in either case net of any applicable
deductibles, retentions, or costs paid by such insured, but
such term does not refer to proceeds received from an
insurer on an employee benefits group insurance policy.
IRS: the Internal Revenue Service.
Liabilities: any and all debts, liabilities,
obligations, absolute or contingent, asserted or unasserted,
matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, direct or indirect, whenever
arising, including all costs and expenses relating thereto,
and including, without limitation, those debts, liabilities
and obligations arising under any law, rule, regulation,
Action, threatened Action, order or consent decree of any
governmental entity or any award of any arbitrator of any
kind, and those arising under any contract, commitment or
undertaking including those arising under this Agreement.
LJSC: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation, a
Delaware Corporation.
Losses: any and all debts, losses, Liabilities,
claims, damages, obligations, payments or costs and
expenses, absolute or contingent, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or
unknown, direct or indirect (including, without limitation,
the costs and expenses of any and all Actions, threatened
Actions, demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and
all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such
Actions or threatened Actions).
Other Agreements: the ADR Agreement, the Employee
Benefit Matters Agreement, the Reimbursement Agreement, the
Services Agreement, the Tax Sharing Agreement and the
Maintenance, License and Easement Agreement to be entered
into by CFCD (as defined) and CF Properties (as defined) as
of the Distribution Date, the form of which is attached
hereto as Annex 8.
Record Date: the close of business on the date to
be determined by the CFI Board or a committee thereof as the
record date for the determination of stockholders of record
of CFI entitled to receive the Distribution.
Reimbursement Agreement: the Reimbursement and
Indemnification Agreement to be entered into between CFI and
Consolidated Freightways Corporation of Delaware ("CFCD") as
of October 1, 1996, the form of which is attached hereto as
Annex 3.
Securities Act: the Securities Act of 1933, as
amended.
Services Agreement: the Transition Services
Agreement to be entered into by CNF Service Company, Inc.
and the Company as of the Distribution Date, the form of
which is attached hereto as Annex 4.
Subsidiaries: the term "Subsidiaries" as used
herein with respect to any entity shall, unless otherwise
indicated, be deemed to refer to both direct and indirect
subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement
to be entered into by CFI and the Company as of the
Distribution Date, the form of which is attached hereto as
Annex 5.
ARTICLE II
THE DISTRIBUTION
2.1 Cooperation Prior to the Distribution. Prior
to the Distribution:
(a) CFI and the Company shall prepare, and
the Company shall file with the Commission, the Form 10.
CFI and the Company shall prepare, and CFI shall mail,
promptly after the effectiveness of the Form 10, to the
holders of CFI Common Stock, the Information Statement,
which shall set forth appropriate disclosure concerning the
Company, the Distribution and other matters. The Company
shall use reasonable efforts to cause the Form 10 to become
effective under the Exchange Act.
(b) CFI and the Company shall cooperate in
preparing, filing with the Commission and causing to become
effective any registration statements or amendments thereto
that are appropriate to reflect the establishment of or
amendments to any employee benefit and other plans
contemplated by the Employee Benefit Matters Agreement.
(c) The Company shall prepare, file and
pursue an application to permit listing of the Company
Common Stock on the Nasdaq National Market (and/or such
other exchange as the Company deems appropriate), under the
symbol "CFWY" (or such other symbol as the Company deems
appropriate).
2.2 Conditions to Distribution. The CFI Board
shall in its discretion establish the Record Date and the
Distribution Date and all appropriate procedures in
connection with the Distribution. The Distribution shall be
subject to satisfaction of each of the following conditions,
among other things: (i) the consummation of certain
internal corporate reorganizations; (ii) the successful
renegotiation of certain CFI credit facilities and debt
instruments, including the execution of certain consents,
waivers and amendments thereto by lenders, and the
maintenance of CFI's investment grade debt ratings; (iii)
the establishment of a separate credit facility for CFCD;
(iv) the receipt of certain third-party consents relating to
certain contracts, licenses and other agreements; (v) the
receipt of rulings from the IRS or an opinion of special tax
counsel to CFI to the effect that, among other things, the
Distribution will generally qualify as a tax-free
distribution under Section 355 of the Internal Revenue Code
of 1986, as amended; (vi) the receipt of a letter from the
staff of the Commission confirming that it will take no
action with respect to certain matters relating to the
Distribution; (vii) the Form 10 having become effective and
no stop order being in effect; (viii) there not being in
effect any statute, rule, regulation or order of any court,
governmental or regulatory body that prohibits or makes
illegal the transactions contemplated by the Distribution;
(ix) approval for listing of the Company Common Stock on the
Nasdaq National Market; and (x) declaration of the special
dividend by the CFI Board. The CFI Board reserves the right
in its discretion, other than with respect to those set
forth in clauses (i), (v), (vi), (vii) and (x), to waive the
satisfaction of any condition to the Distribution; provided,
however, that the CFI Board may abandon, defer or modify the
Distribution and the related transactions at any time prior
to the Distribution Date.
2.3 The Distribution. On the Distribution Date,
subject to the conditions set forth in this Agreement, CFI
shall deliver to the Distribution Agent a certificate or
certificates representing the number of then outstanding
shares of Company Common Stock to be distributed in the
Distribution, endorsed in blank, and shall instruct the
Distribution Agent to distribute to each holder of record of
CFI Common Stock on the Record Date a certificate or
certificates representing one share of Company Common Stock
for every two shares of CFI Common Stock so held. The
Company agrees to provide all certificates for shares of
Company Common Stock that the Distribution Agent shall
require in order to effect the Distribution.
2.4 Sale of Fractional Shares. The Distribution
Agent shall not distribute any fractional shares of Company
Common Stock ("Fractional Shares") to any holder of CFI
Common Stock. The Distribution Agent shall be instructed to
aggregate all such Fractional Shares and sell them in an
orderly manner after the Distribution Date in the open
market at then-prevailing prices and, after completion of
all such sales, distribute a pro rata portion of the
proceeds from such sales to each holder of CFI Common Stock
who would otherwise have received a Fractional Share. CFI
will bear the cost of brokerage commissions incurred in
connection with such sales.
2.5 Odd-Lot Program. In connection with the
Distribution, the Company shall offer to holders of CFI
Common Stock who would otherwise receive fewer than 100
shares of Company Common Stock in the Distribution a program
by which such holders may instruct the Distribution Agent to
sell such shares of Company Common Stock on their behalf.
The Company shall cause such program to be conducted in
accordance with the terms and conditions described in the
Information Statement.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
3.1 The Reorganization.
(a) Prior to the Distribution Date, CFI
shall take all steps necessary to establish CFCD as a wholly
owned subsidiary of the Company.
(b) Prior to the Distribution Date, CFI
shall take all steps necessary to establish LJSC as a wholly
owned subsidiary of the Company; provided, however, that
immediately prior to the Distribution or simultaneously
therewith, the LJSC administrative service departments
identified on Schedule 3.1(b) shall be transferred to CNF
Service Company, Inc., a wholly owned subsidiary of CFI.
(c) Prior to the Distribution Date, CFI
shall take all steps necessary to merge Vantage Parts into
CFI.
(d) Prior to the Distribution Date, CFI
shall take all steps necessary to establish Milne &
▇▇▇▇▇▇▇▇▇ as a wholly owned, indirect subsidiary of CFCD.
(e) Prior to the Distribution Date, CFI
shall take all steps necessary to effect the transfer of all
real property owned by CFCD and/or LJSC and set forth on
Schedule 3.1(e) to CF Properties, Inc., a wholly owned
subsidiary of CFI ("CF Properties"), and to effect the
transfer of CFI's ▇▇▇▇▇▇▇ terminal and land under CFI's
Santa Fe Springs and Hayward Terminals to CFCD. In
consideration of such transfers, the Company hereby agrees
to continue to use Con-Way rail services until January 1,
1997.
(f) The Company acknowledges that any and
all rights in the software programs (including without
limitation all source and object code and all documentation
therefor, and all versions thereof) developed by, or on
behalf of, the Company, CFI or its Affiliates prior to the
Distribution Date, and all other intellectual property
rights, including without limitation all copyrights, patent
rights, know-how and trade secret rights, and including,
without limitation, the right to ▇▇▇ for any past, present
or future infringement of any of the foregoing, are vested
in CFI. The Company will execute and deliver any
instruments or take such other actions as CFI may reasonably
request in order to confirm such assignment and to otherwise
effectuate the purposes and terms of this Agreement.
(g) CFI hereby grants to the Company,
effective as of the termination of the Services Agreement, a
royalty-free, worldwide, perpetual and non-transferable,
license without right of sublicense, (except as to
subsidiaries who agree in writing to be bound by the terms
of this license), to use and create derivative works of the
software programs (including without limitation all source
and object code and documentation therefor) owned by CFI
which pertain to the Company's administrative and business
functions and activities, in the form they exist as of the
termination of the Services Agreement, which the Company
uses in its business as of the Distribution Date as set
forth on Schedule 3.1(g) hereto (collectively, the "Licensed
Materials"). CFI shall take such steps necessary to provide
to the Company, at CFI's expense, and with minimal
interruption of the operations of CFI and its Affiliates,
copies of the Licensed Materials, together with copies of
any related third-party licenses (subject to the proviso set
forth in the immediately following sentence), and reasonable
instruction as to their installation and use. In addition,
CFI shall, as soon as practicable after the Distribution
Date, make reasonable efforts to obtain on behalf of the
Company, at CFI's expense with respect to initial purchase,
acquisition and original installation fees only, all
consents or separate licenses for third-party software which
the Company uses in its business as of the Distribution
Date, or which are incorporated into the Licensed Materials,
or which are necessary for the Company to have the right to
use the Licensed Materials to the extent contemplated herein
and be able to receive the services contemplated under the
Services Agreement, and such third-party licenses shall be
at least as broad in scope and term as were similar licenses
for CFI prior to the Distribution Date; provided, however,
that if CFI determines that the terms upon which any such
license may be obtained are commercially unreasonable, CFI
shall have the right to obtain a license for reasonably
comparable software in full satisfaction of the above-
mentioned obligation. Where use of third-party software is
limited to a specified number of users or similarly
restricted, an equitable division shall be made as set forth
on Schedule 3.1(g). Each of CFI and the Company further
acknowledges and agrees that:
(i) The use of the Licensed Materials is to
be limited to the internal business use of the Company, or
its Affiliates and their authorized customers who in the
ordinary course of business with the Company request access
to the Licensed Materials in connection with products or
services otherwise provided by the Company.
(ii) The Company's, its Affiliates' and
authorized customers' right to use the Licensed Materials
which require a third-party license is conditioned upon the
Company's, its Affiliates and authorized customers observing
the applicable terms and conditions in any third party
licenses relating to the Licensed Materials and as to
Affiliates and authorized customers the obtaining of any
necessary consents or separate licenses from such third
party vendors. CFI shall make reasonable efforts to obtain
all consents or separate licenses from third party licensors
necessary for the Company to have the right to use the
Licensed Materials to the extent contemplated herein and be
able to receive the services contemplated under the Services
Agreement.
(iii) The Company shall assume all
Liabilities relating to the Company's use, and use by any of
the Company's Affiliates or authorized customers, of the
Licensed Materials after the Distribution Date (including,
without limitation, as relates to maintenance costs) and
shall indemnify and hold harmless CFI against all
Liabilities and expenses (including reasonable attorneys'
fees and costs of litigation) which CFI may incur, which
arise out of the use of the Licensed Materials by the
Company, its Affiliates or authorized customers after the
Distribution Date.
(iv) CFI shall assume all Liabilities
relating to the Company's use of software requiring a third-
party license where CFI has taken a license from such third
party and (A) a license for the Company is available at a
commercially reasonable cost but CFI has failed to provide
the Company with the applicable third-party license to the
extent required by this Agreement, or (B) in the event that
CFI is not able to obtain such a license at a commercially
reasonable cost, CFI has failed to provide the Company with
reasonably comparable software and shall indemnify and hold
harmless the Company against all Losses, Liabilities and
expenses (including reasonable attorneys' fees and cost of
litigation) which the Company may incur, which arise out of
claims by owners of the third party software arising out of
such failure of CFI to obtain such third-party licenses for
the Company. The Company shall assume all Liabilities
relating to the use of third- party software obtained on its
behalf by CFI including, without limitation, as relates to
maintenance costs.
(v) The Licensed Materials constitute
confidential information and shall remain the property of
CFI, subject to the license granted herein. The Company
agrees to hold the same in confidence and not to disclose or
distribute the same unless such information subsequently
becomes publicly available through no fault of the Company.
(vi) CFI shall assume all Liabilities
relating to CFI's use, and use by CFI's Affiliates or
authorized customers, of the Licensed Materials and any
materials not licensed to the Company, and shall indemnify
and hold harmless the Company against all Losses,
Liabilities and expenses (including reasonable attorneys'
fees and cost of litigation) which the Company may incur,
which arise out of the use of the Licensed Materials or any
of the materials not licensed to the Company by CFI, its
Affiliates or authorized customers.
(vii) The Company may request additional
worldwide, perpetual and non-transferable licenses from CFI
which are not currently used by it in its business. CFI may
grant such licenses in its sole discretion. The licenses
requested and granted as of the date hereof are listed in
Schedule 3.1(g) as "Additional Licenses." The Company shall
pay the costs of copying such software and purchasing any
required third party licenses related thereto. The Company
shall assume all Liabilities relating to the Company's use
thereof (including, without limitation, as relates to
maintenance costs) and shall indemnify and hold harmless CFI
against all Liabilities and expenses whatsoever (including
reasonable attorneys' fees and costs of litigation) which
CFI may incur, which arise out of, or are in any way related
to the use of such software by the Company, its Affiliates
or authorized customers.
(viii) The Company shall pay its
proportional share of the development costs of the Licensed
Materials identified in Schedule 3.1(g) as "Under
Development" as incurred after the Distribution Date. Any
cost of "cloning" a second copy, if any, shall be part of
the development costs. The Company shall not, however, pay
a proportional share of the development costs where such
Licensed Materials are used in connection with the provision
of services to the Company under the Services Agreement, to
the extent that the Company has already paid such
proportional share in accordance with the Services
Agreement.
(ix) Because of the extensive number of
software programs used by the parties, the parties expect
that some programs may inadvertently be omitted from, or
included on, Schedule 3.1(g). In such event, the parties
shall determine in good faith whether such programs should
be added or deleted as Licensed Materials and related third-
party software used by the Company as of the date hereof,
"Additional Licenses" or "Under Development"; provided,
however, that the parties acknowledge that the programs
listed on Schedule X have been intentionally omitted from
Schedule 3.1(g).
(h) CFI hereby grants to the Company and its
Subsidiaries a limited, non-exclusive, non-transferable,
royalty-free worldwide right and license, without right of
sublicense (except to subsidiaries who agree in writing to
be bound by the terms of this license) to use the
trademarks, trade names and service marks set forth on
Schedule 3.1(h)(i) (collectively, the "Marks") for the nine-
month period beginning on the Distribution Date. On or
prior to the Distribution Date, CFI and the Company shall
enter into a Trademark License Agreement, substantially in
the form included on Schedule 3.1(h)(ii) in order to effect
the license from CFI to the Company (and its Subsidiaries)
of the marks (the "Additional Marks") set forth on Schedule
3.1(h)(ii). The Company agrees to comply and to cause its
Subsidiaries to comply with reasonable quality standards set
by CFI, and subject to CFI's reasonable rights of inspection
as to compliance with such quality standards, as relates to
the use of the Marks and the Additional Marks, and CFI
acknowledges that the Company and its Subsidiaries currently
meet all such standards. On or prior to the Distribution
Date, CFI shall assign to the Company, pursuant to a
Trademark Assignment in the form included on Schedule
3.1(h)(i) (X) the Marks, effective as of the end of the nine-
month period commencing on the Distribution Date, (Y) the
trademarks, trade names and service marks relating to "CF
Air" and "CF Air Freight" (and as stylized), effective as of
the third anniversary of the Distribution Date. On or prior
to the Distribution Date, CFI shall assign to the Company,
pursuant to the Copyright Assignment and the Patent
Assignment in the forms included on Schedule 3.1(h)(iii),
the patents and copyrights set forth on Schedule
3.1(h)(iii), effective as of the Distribution Date.
(i) Company shall indemnify and hold CFI,
and its subsidiaries, Affiliates, officers, directors and
subsidiaries, harmless from and against any and all
Liabilities arising out of the Company's activities under
the Marks and the Additional Marks.
(j) Prior to the Distribution Date, CFI and
the Company shall take all steps necessary to increase the
outstanding shares of Company Common Stock so that,
immediately prior to the Distribution, CFI will hold a
number of shares of Company Common Stock sufficient to
enable it to complete the Distribution based on the
Distribution Ratio.
3.2 Company Board. CFI and the Company shall
take all steps necessary to elect as directors of the
Company, on or prior to the Distribution Date, the persons
named in the Form 10 to constitute the board of directors of
the Company on the Distribution Date.
3.3 Company Charter and Bylaws. On or prior to
the Distribution Date, (a) CFI shall approve and cause the
Amended and Restated Certificate of Incorporation of the
Company substantially in the form of Annex 6 hereto to be
filed with the Secretary of State of Delaware and to be in
effect on the Distribution Date and (b) CFI shall adopt the
Amended and Restated Bylaws of the Company substantially in
the form of Annex 7 hereto to be in effect on the
Distribution Date.
3.4 Other Agreements. On or prior to the
Distribution Date, CFI and the Company shall enter into,
and/or (where applicable) shall cause their respective
Subsidiaries to enter into, the Other Agreements and any
other agreements necessary or appropriate in connection with
the transactions contemplated hereby and thereby. In the
event of a conflict between the terms of this agreement and
the terms of any of the Other Agreements or any such other
agreements, (including without limitation Section 5.04 of
the Tax Sharing Agreement) the terms of such Other Agreement
or other agreement shall govern.
3.5 Operation in the Ordinary Course of Business.
Prior to the Distribution Date, the Company shall, and shall
cause each of its Subsidiaries to, conduct its business and
operations in the ordinary course of business, consistent
with past practice, and shall, and shall cause each of its
Subsidiaries to, continue to ship products, pay accounts
payable and invoices, deposit and accept payments, and make
capital expenditures in the ordinary course of business, all
consistent with past practice. The Company shall not, and
shall cause each of its Subsidiaries not to, undertake any
arrangement with the intent to delay receipt of any funds by
the Company or its Subsidiaries until on or after the
Distribution Date or to accelerate any payment to be made by
the Company or its Subsidiaries prior to the Distribution
Date, except in each case in the ordinary course of business
consistent with past practice.
3.6 Insurance. The Company and each other member
of the Company Group does hereby release CFI and each other
member of the CFI Group from all Liabilities arising from or
in connection with the insurance policies described on
Schedule 3.6(b), excluding occurrences which commenced on or
prior to October 1, 1996, except the policies covering
underground storage tank liability, which shall be released
as of the Distribution Date. The Company and each other
member of the Company Group does hereby acknowledge that
these policies are cancelled or terminated as to CFCD and
its Subsidiaries as of October 1, 1996, except to the extent
of claims referred to in the preceding sentence. The
Company and each other member of the Company Group expressly
waives any and all rights under section 1542 of the Civil
Code of California, which provides as follows:
"A General Release does not extend to claims which
the creditor does not know or suspect to exist in his favor
at the time of executing the Release, which if known by him
must have materially affected his settlement with the
debtor."
3.7 Collections and Payments after the
Distribution Date. Except as may be explicitly provided in
this Agreement and the Other Agreements, any cash receipts
arising out of or relating to the assets, Liabilities or
operations of the Company or its past or present
Subsidiaries received on or after the Distribution Date
shall be retained by the Company and such Subsidiaries and
any Liabilities or obligations, other than any Liabilities
or obligations relating to LJSC and arising on or prior to
the Distribution Date, arising out of, relating to or
asserted on the basis of the assets, Liabilities or
operations of the Company or its past or present
Subsidiaries due and unpaid on and after the Distribution
Date or incurred on and after the Distribution Date shall be
payable by the Company and such Subsidiaries. The Company
and CFI shall settle all payments received from account
debtors of either of them to the effect that amounts
properly owing to the Company are received by the Company
and amounts properly owing to CFI are received by CFI, with
such settlements to occur by wire transfer (a) daily, for
the three-month period beginning on the Distribution Date
and (b) weekly, thereafter.
3.8 Certain Post-Distribution Transactions. The
Company. (i) The Company shall, and shall cause each of its
Subsidiaries to, comply with each representation and
statement made, or to be made, to the IRS in connection with
the IRS private letter ruling issued to CFI on September 23,
1996 (the "Ruling") or any other ruling to be obtained by
the Company and CFI acting together from any taxing
authority with respect to any transaction contemplated by
this Agreement; and (ii) until the third anniversary of the
Distribution Date, neither the Company nor any of its
Subsidiaries shall (A) make a material disposition, by means
of a sale or exchange of assets or capital stock, a
distribution to stockholders or otherwise, of its assets,
(B) repurchase or issue any Company capital stock (other
than stock issued pursuant to employee plans), or (C) cease
the active conduct of its businesses independently, with its
own employees and without material change, unless, in each
of cases (A), (B) and (C), in the opinion of counsel to the
Company, which opinion shall be reasonably satisfactory to
CFI, or pursuant to a supplemental IRS private letter ruling
reasonably satisfactory to CFI, such act or omission would
not adversely affect the tax consequences of the
Distribution to CFI or the stockholders of CFI, as set forth
in the Ruling or any other ruling issued by any taxing
authority; and the Company has no present intention to take
any such actions.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification by CFI. Except as otherwise
provided by any of the Other Agreements or as contemplated
by Section 4.5 or Article VII hereof, effective as of the
Distribution Date, CFI and each other member of the CFI
Group agree to indemnify, defend and hold harmless the
Company, each other member of the Company Group, and their
present or former officers, directors, shareholders, agents,
employees, representatives, successors-in-interest, parents,
Affiliates, insurers, attorneys and assigns (the "Company
Indemnitees") from and against any and all Losses of the
Company Indemnitees arising out of or related in any manner
to any item set forth on Schedule 4.1.
4.2 Indemnification by the Company. Except as
otherwise provided by any of the Other Agreements or as
contemplated by Section 4.5 or Article VII hereof, effective
as of the Distribution Date, the Company and each other
member of the Company Group agree to indemnify, defend and
hold harmless CFI, each other member of the CFI Group, and
their present or former officers, directors, shareholders,
agents, employees, representatives, successors-in-interest,
parents, Affiliates, insurers, attorneys and assigns (the
"CFI Indemnitees") from and against any and all Losses of
the CFI Indemnitees arising out of or related in any manner
to any item set forth on Schedule 4.2.
4.3 Limitations on Indemnification Obligations.
The amount that either CFI or the Company (an "Indemnifying
Party") is or may be required to pay to an indemnified party
("Indemnitee") pursuant to Section 4.1 or 4.2, or any other
Section of this Agreement providing for indemnification,
shall be reduced by any Insurance Proceeds or other amounts
actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have
received the payment required by this Agreement from an
Indemnifying Party in respect of any Loss and shall
subsequently actually receive Insurance Proceeds or other
amounts in respect of such Loss, then such Indemnitee shall
pay to such Indemnifying Party a sum equal to the amount of
such Insurance Proceeds or other amounts actually received
(up to but not in excess of the amount of any indemnity
payment made hereunder). No insurer or other third party
shall: (a) be relieved of the responsibility to pay any
claims which it would otherwise be obligated to pay in the
absence of the foregoing indemnification provisions; (b)
solely by virtue of the indemnification provisions hereof,
have any subrogation rights with respect to any claims which
it would otherwise be obligated to pay; or (c) be entitled
to a benefit it would not be entitled to receive in the
absence of the foregoing indemnification provisions. Any
Indemnifying Party shall succeed to the rights of any
Indemnitee with respect to any matter contemplated by this
Section 4.3.
4.4 Procedures for Indemnification. (a)(i) If
an Indemnitee shall receive notice or otherwise learn of the
assertion of any claim or commencement of any proceeding
(including any governmental investigation) by a person who
is not a party to this Agreement (or any Affiliate of either
party) (a "Third-Party Claim") with respect to which an
Indemnifying Party may be obligated to provide
indemnification pursuant to this Agreement, such Indemnitee
shall give such Indemnifying Party written notice thereof
promptly after becoming aware of such Third-Party Claim
setting forth the particulars as to such claim or proceeding
in reasonable detail; provided that the failure of any
Indemnitee to give notice as provided in this Section 4.4(a)
shall not relieve the related Indemnifying Party of its
obligations under this Article IV, unless such Indemnifying
Party is actually prejudiced by such failure to give notice
and then only to the extent of such actual prejudice.
(ii) An Indemnifying Party may, to the extent
it wishes within thirty days of receipt of notice of a Third
Party claim and at its cost and expense, elect to defend or
to seek to settle or compromise any Third-Party Claim;
provided that the Indemnitee may participate in such
settlement or defense through its chosen counsel at its sole
cost and expense. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a
Third-Party Claim, such Indemnifying Party shall not be
liable to such Indemnitee under this Article IV for any
legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such
Indemnitee in connection with the defense thereof; provided
that if the defendants in any such Third-Party Claim include
both the Indemnifying Party and one or more Indemnitees and
in any Indemnitee's reasonable judgment a conflict of
interest between one or more of such Indemnitees and such
Indemnifying Party exists in respect of such claim, such
Indemnitees shall have the right to employ separate counsel
to represent such Indemnitees and in that event the
reasonable fees and expenses of such separate counsel (but
not more than one separate counsel reasonably satisfactory
to the Indemnifying Party) shall be paid by such
Indemnifying Party; provided further if and to the extent
that there is a conflict of defenses or positions among the
Indemnitees, the Indemnitees shall have the right to retain
such number of additional separate counsel, reasonably
satisfactory to the Indemnifying Party, as is reasonably
necessary to avoid such conflicts, and the Indemnifying
Party shall be responsible for the reasonable fees and
expenses of such additional separate counsel; provided
further that the Indemnitee may participate in the
settlement or defense of a Third-Party Claim through counsel
chosen by such Indemnitee if the fees and expenses of such
counsel shall be borne by such Indemnitee. If an
Indemnifying Party elects not to assume responsibility for
defending a Third-Party Claim, such Indemnitee may defend or
seek to compromise or settle such Third-Party Claim but
shall not thereby waive any right to indemnity therefor
pursuant to this Agreement. Notwithstanding the foregoing,
the Indemnifying Party shall not be liable for any
settlement of any Third-Party Claim effected without its
written consent. The Indemnifying Party shall not, except
with the consent of the Indemnitee, (i) enter into any such
settlement that does not include as an unconditional term
thereof the giving by the person or persons asserting such
Third-Party Claim to all Indemnitees an unconditional
release from all Liability with respect to such Third-Party
Claim, or (ii) consent to entry of any judgment.
(b) Any claim on account of a Loss that does
not result from a Third-Party Claim shall be asserted by
written notice given by the Indemnitee to the Indemnifying
Party. Such Indemnifying Party shall have a period of
thirty (30) days after the receipt of such notice within
which to respond thereto. If such Indemnifying Party does
not respond within such thirty-day period, such Indemnifying
Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party
does not respond within such thirty-day period or rejects
such claim in whole or in part, such Indemnitee shall be
free to pursue such remedies as may be available to such
party under this Agreement or under applicable law (except
as provided in the ADR Agreement).
(c) In addition to any adjustments required
pursuant to Section 4.3, if the amount of any Loss shall, at
any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise,
the amount of such reduction that has been received by the
Indemnitee, less any expenses properly incurred in
connection therewith, shall promptly be repaid by the
Indemnitee to the Indemnifying Party.
(d) In the event of payment by an
Indemnifying Party to any Indemnitee in connection with any
Third-Party Claim, such Indemnifying Party shall have all
rights of subrogation and shall stand in the place of such
Indemnitee as to any events or circumstances in respect of
which such Indemnitee may have any right or claim relating
to such Third-Party Claim or against any other person. Such
Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or
claim.
(e) Notwithstanding anything to the contrary
herein or in the Other Agreements, the foregoing
indemnification provisions and procedures shall apply to any
other indemnification agreements herein or in the Other
Agreements.
4.5 Releases.
(a) Subject to Article VII and effective on
the Distribution Date, the Company and each other member of
the Company Group releases and forever discharges CFI, each
other member of the CFI Group, and their present or former
officers, directors, shareholders, agents, employees,
representatives, successors-in-interest, parents,
Affiliates, insurers, attorneys and assigns of and from any
and all Liabilities (other than those for which
indemnification is available under (i) this Article IV or
(ii) any Other Agreement (subject to the provisions of
Section 4.3)).
(b) Subject to Article VII and effective on
the Distribution Date, CFI and each other member of the CFI
Group releases and forever discharges the Company, each
other member of the Company Group and their present or
former officers, directors, shareholders, agents, employees,
representatives, successors-in-interest, parents,
Affiliates, insurers, attorneys and assigns of and from any
and all Liabilities (other than those for which
indemnification is available under this Article IV and any
Other Agreement (subject to the provisions of Section 4.3)).
(c) The Company and each other member of the
Company Group, and CFI and each other member of the CFI
Group, expressly waive any and all rights under section 1542
of the Civil Code of California, which provides as follows:
"A General Release does not extend to claims which
the creditor does not know or suspect to exist in his favor
at the time of executing the Release, which if known by him
must have materially affected his settlement with the
debtor."
4.6 Environmental Liabilities. Notwithstanding
anything contained herein or in any Other Agreement to the
contrary, neither party shall have any obligation to
indemnify the other party with respect to any Environmental
Liabilities.
ARTICLE V
ACCESS TO INFORMATION; SERVICES
5.1 Access to Information. From and after the
Distribution Date, CFI shall, and shall cause its
Subsidiaries to, afford to the Company and its authorized
accountants, counsel and other designated representatives
(collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to the
person or firms possessing information) and duplicating
rights during normal business hours to all administrative
records, books, contracts and instruments, and all Company-
owned computer software and computer data and other Company-
owned data and information (collectively, but excluding all
software not owned by the Company, "Information") within
CFI's or any such Subsidiary's possession or control
relating to the Company or any Company Subsidiary and to any
property owned by CFI that was leased or operated by the
Company or any Company Subsidiary, insofar as such access is
reasonably required by the Company or any Company
Subsidiary. Similarly, the Company shall, and shall cause
its Subsidiaries to, afford to CFI and its Representatives
reasonable access (including using reasonable efforts to
give access to persons or firms possessing Information) and
duplicating rights during normal business hours to
Information within the Company's or any such Subsidiary's
possession or control relating to CFI or any CFI Subsidiary
or relating to the Company prior to the Distribution Date
and to any property owned by the Company that was leased or
operated by CFI or any CFI Subsidiary (other than the
Company and its Subsidiaries), insofar as such access is
reasonably required by CFI or any CFI Subsidiary.
Information may be requested under this Article V for,
without limitation, audit, accounting, claim, litigation and
tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
5.2 Production of Witnesses. After the
Distribution Date, each of CFI and the Company shall, and
shall cause its respective Subsidiaries to, use reasonable
efforts to make available to the other party and its
Subsidiaries, upon written request, its directors, officers,
employees and agents as witnesses to the extent that any
such person may reasonably be required in connection with
any legal, administrative or other proceedings in which the
requesting party may from time to time be involved.
5.3 Provision of Services. In addition to any
services contemplated to be provided following the
Distribution Date by any Other Agreement, each party, upon
written request, shall make available to the other party,
during normal business hours and in a manner that will not
interfere unreasonably with such party's business, its
financial, tax, accounting, legal, employee benefits and
similar staff services (collectively, "Services") whenever
and to the extent that they may be reasonably required in
connection with the preparation of tax returns, audits,
claims, litigation or administration of employee benefit
plans, and otherwise to assist in effecting an orderly
transition following the Distribution.
5.4 Reimbursement. Except to the extent
otherwise provided in any Other Agreement, each party
providing Information, witnesses or Services under Section
5.1, 5.2 or 5.3 to the other party shall be entitled to
receive from the recipient, upon the presentation of
invoices therefor, payment for all out-of-pocket costs and
expenses as may be reasonably incurred in providing such
Information, witnesses or Services. For purposes of this
Section 5.4, salaries and other compensation payable to
employees of either party shall be deemed to be an out-of-
pocket cost or expense reimbursable hereunder.
5.5 Retention of Records. Except as otherwise
required by law or agreed to in writing, each of CFI and the
Company shall retain, and shall cause its respective
Subsidiaries to retain following the Distribution Date, all
significant information ("Information") relating to the
business of the other and the other's subsidiaries, for a
period (a "Retention Period") consistent with the document
retention policies in effect at CFI and the Company,
respectively. In addition, such Information shall not be
destroyed or otherwise disposed of if during such period a
party shall request in writing that any of the Information
be retained for additional specific and reasonable periods
of time at the expense of the party so requesting. After
the applicable Retention Period, any party may destroy or
otherwise dispose of any Information at any time, provided
that, prior to such destruction or disposal, (a) such party
shall provide no less than ninety (90) days' prior written
notice to the other party, identifying the Information
proposed to be destroyed or disposed of, and (b) if the
recipient of such notice shall request in writing prior to
the scheduled date for such destruction or disposal that any
of the Information proposed to be destroyed or disposed of
be delivered to such requesting party, the party proposing
the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the
expense of the requesting party.
5.6 Confidentiality. CFI and each other member
of the CFI Group on the one hand, and the Company and each
other member of the Company Group on the other hand, shall
use commercially reasonable efforts to hold, and cause their
Representatives to hold, in strict confidence, all
Information concerning the other in their possession or
furnished by the other or the other's Representatives
pursuant to this Agreement or any of the Other Agreements
(except to the extent that such Information is (a) in the
public domain through no fault of such party or (b) later
lawfully acquired on a non-confidential basis from other
sources which are not subject to any confidentiality
litigation with the subject party by such party or
subsequently developed by such party), and neither party
shall release or disclose such Information to any other
person, except to its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, and on
terms and conditions substantially the same as the terms and
conditions on which such party releases its own Information,
unless compelled to disclose by judicial or administrative
process or, as advised by its counsel, by other requirements
of law.
5.7 Provision of Corporate Records.
(a) Except as may otherwise be provided in
any Other Agreement, CFI shall arrange as soon as
practicable following the Distribution Date, to the extent
not previously delivered, for the transportation (at the
Company's cost) to the Company of the Company's, books and
records in its possession, except to the extent such items
are already in the possession of the Company. Such books
and records shall be the property of the Company, but shall
be available to CFI for review and duplication until CFI
shall notify the Company in writing that such records are no
longer of use to CFI.
(b) Except as otherwise provided in any
Other Agreement, the Company shall arrange as soon as
practicable following the Distribution Date, to the extent
not previously delivered, for the transportation (at CFI's
cost) to CFI of CFI's and its Subsidiaries' books and
records in its possession, except to the extent such items
are already in the possession of CFI or a Subsidiary of CFI.
Such books and records shall be the property of CFI, but
shall be available to the Company for review and duplication
until the Company shall notify CFI in writing that such
records are no longer of use to the Company.
5.8 Privileged Matters. The Company and CFI
recognize that legal and other professional services that
have been and will be provided prior to the Distribution
Date have been and will be rendered for the benefit of both
CFI and the Company and that both CFI and the Company should
be deemed to be the client for the purposes of asserting all
privileges related thereto. No party may waive any
privilege which could be asserted under any applicable law,
and in connection with which the other party has a material
interest, without the consent of the other party, except to
the extent reasonably required in connection with any
litigation with third parties.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Company and each other member of the Company
Group make the following representations and warranties to,
and covenants with, CFI, for its benefit and for the benefit
of each other member of the CFI Group, each and all of which
shall survive the execution and delivery of this Agreement
and the Distribution Date.
6.1 Financial Statements. The consolidated
balance sheets of the Company and its Subsidiaries and the
consolidated statements of earnings and consolidated
statement of cash flows for the Company and its
Subsidiaries, each in the form included in the Information
Statement, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated
financial position of the Company and its Subsidiaries as of
the dates indicated therein and the results of operations
and cash flows for the periods indicated therein.
6.2 Form 10 and Information Statement. The Form
10 and the Information Statement each do not misstate any
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, there shall be
excluded therefrom any information provided by CFI to the
extent that such information relates solely to CFI and not
to the Company ("CFI Information").
6.3 Marks. None of CFI's existing trademarks,
trade names and service marks that are not also Marks or
Additional Marks ("CFI marks" as set forth in Schedule 6.3)
infringe in any manner any of the Marks or Additional Marks
or otherwise interfere with the Company's expected use of
the Marks or Additional Marks, and none of the Company nor
any other member of the Company Group shall, at any time,
bring or join in any suit, claim or other proceeding or
action adverse to CFI or any other member of the CFI Group
relating to the use of the CFI marks.
ARTICLE VII
SHARED CLAIMS
7.1 Acknowledgment. Each party acknowledges
that, from and after the Distribution Date, there may be
claims and proceedings against such party and its
Subsidiaries (other than workers' compensation claims which
pertain to any persons who remain employed by LJSC on the
day after the Distribution Date ("Excluded Claims") which
shall remain the sole responsibility of LJSC) that relate
(in whole or in part) to activities alleged to have
transpired prior to the Distribution Date and with respect
to which it would be fair and appropriate to apportion
Liability therefor between the parties ("Shared Claims").
7.2 Notification. If any party shall receive
notice or otherwise learn of the assertion of any claim or
the commencement of any proceeding which such party believes
may constitute a Shared Claim (including, without
limitation, any such claim or proceeding that names or
identifies the other party or any of its Subsidiaries as a
responsible party), such party shall (i) immediately assume
the defense thereof and shall in all respects respond
thereto in a timely manner and (ii) promptly provide written
notice thereof to the other party, setting forth the
particulars as to such claim or proceeding in reasonable
detail; provided that the failure of such party to give such
notice shall not relieve the other party of any obligation
to accept Liability unless it is actually prejudiced by such
failure and then only to the extent of such actual
prejudice.
7.3 Cooperation. The parties shall cooperate
with each other in the defense or settlement of Shared
Claims to the effect that (i) subject to the provisions of
Section 7.2, the party bearing the greater Liability shall
be responsible for the control and administration of any
Shared Claim and (ii) the other party shall cooperate with
such party with respect to such control and administration.
7.4 Liability. The parties shall seek to
apportion Liability between them with respect to any Shared
Claim, and in so doing shall take cognizance of all relevant
factors, including but not limited to, the time and duration
of any alleged activity giving rise thereto. If the parties
are unable to agree on an apportionment of Liability within
thirty days of receipt of notification as provided in
Section 7.2, they shall submit the matter for resolution as
provided in the ADR Agreement.
7.5 Non-Shared Liabilities. Anything to the
contrary contained in this Article VII notwithstanding,
claims or proceedings arising out of or relating to LJSC,
its employees and operations on or prior to the Distribution
Date (other than Excluded Claims) shall be allocated as
described below. The Company shall assume and indemnify CFI
against all Losses and Liabilities arising out of or related
to personnel matters that are caused by employees who are
employed by LJSC immediately following the Distribution
Date. CFI shall assume and indemnify the Company against
all other Losses and Liabilities arising out of or related
to LJSC on or prior to the Distribution Date, including all
other personnel matters. If employees of both the Company
and CFI cause any such Losses or Liabilities relating to
LJSC, then they shall be Shared Claims and dealt with as
provided in this Article VII.
ARTICLE VIII
MISCELLANEOUS
8.1 Complete Agreement; Construction. This
Agreement and the Other Agreements, including any schedules
and exhibits hereto or thereto, shall constitute the entire
agreement between the parties with respect to the subject
matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject
matter.
8.2 Expenses. Except as otherwise set forth in
this Agreement and the Other Agreements, (i) CFI will pay
all out-of-pocket costs and expenses that are necessary to
effect the Distribution and incurred prior to the
Distribution and (ii) each party shall bear its costs and
expenses arising after the Distribution in connection with
the Distribution; provided, however, CFI shall pay the
reasonable moving and relocation costs of separating
employees of CFI and CFC in Portland into two buildings,
including design and architectural fees, phone and data
connections infrastructure and labor associated with the
move, excluding any other capital improvements, except that
CFI shall pay for the costs of wheelchair ramp access, ADA
required upgrades and lobby expansion.
8.3 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of California without regard to the principles of
conflicts of laws thereof.
8.4 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in
writing and shall be delivered by hand, mailed by registered
or certified mail (return receipt requested), or sent by
cable, telegram, telecopy (confirmed by regular, first-class
mail), to the parties at the following addresses (or at such
other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such
notice is received:
if to CFI:
Consolidated Freightways, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
if to the Company:
Consolidated Freightways Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
8.5 Amendments and Waivers. This Agreement may
not be altered or amended, nor may rights hereunder be
waived, except by an instrument in writing executed by the
party or parties to be charged with such amendment or
waiver. No waiver of any term, provision or condition of or
failure to exercise or delay in exercising any rights or
remedies under this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition,
right or remedy or as a waiver of any other term, provision
or condition of this Agreement.
8.6 Counterparts. This Agreement may be executed
in one or more counterparts each of which shall be deemed an
original instrument, but all of which together shall
constitute but one and the same Agreement.
8.7 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure
to the benefit of the parties and their respective
successors and permitted assigns.
8.8 Termination. This Agreement may be
terminated and the Distribution abandoned at any time prior
to the Distribution Date by and in the sole discretion of
the CFI Board without the approval of the Company or the
shareholders of CFI. In the event of such termination, no
party shall have any Liability of any kind to any other
party on account of such termination except that expenses
incurred in connection with the transactions contemplated
hereby shall be paid as provided in Section 8.2.
8.9 No Third-Party Beneficiaries. Except for the
provisions of Article IV relating to Indemnitees, this
Agreement is solely for the benefit of the parties hereto
and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of the CFI
Group or the Company Group) any remedy, claim,
reimbursement, cause of action or other right other than
those existing without reference to this Agreement.
8.10 Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of
reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.11 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision
in any other jurisdiction. Without prejudice to any rights
or remedies otherwise available to any party hereto, each
party hereto acknowledges that damages would be an
inadequate remedy for any breach of the provisions of this
Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
8.12 Further Assurances. In addition to the
actions specifically provided for elsewhere in this
Agreement, each of the parties hereto will use its
reasonable efforts to (i) execute and deliver such further
documents and take such other actions as any other party may
reasonably request in order to effectuate the purposes of
this Agreement and to carry out the terms hereof, and (ii)
take, or cause to be taken, all actions, and to do, or cause
to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements
or otherwise to consummate and make effective the
transactions contemplated by this Agreement, including,
without limitation, using its reasonable efforts to obtain
any consents and approvals and make any filings and
applications necessary or desirable in order to consummate
the transactions contemplated by this Agreement. The
parties hereto further agree to cooperate with respect to
the facilities in Portland, Oregon to be used by the parties
or their respective Subsidiaries in accordance with the
Services Agreement to the effect of minimizing any
disruptions that a party (or its Subsidiaries) may
experience as a result of the technical and logistical
interdependencies of such facilities.
8.13 No Solicitation of Employees. For a period
of three years after the Distribution Date, neither CFI nor
the Company, nor any of their Subsidiaries, will directly
solicit the employment of any employee of the other company,
or any of its Subsidiaries, without the prior written
consent of such other company; provided, however, that if
the Company shall cease to receive services provided by CNF
Service Company, Inc. pursuant to the Services Agreement
after the Distribution Date, it may solicit employees
(employed either at the time of notification by the Company
of the termination of services, or in the preceding six
months) from the groups that had been providing such
services.
8.14 Dispute Resolution. Any dispute between the
parties concerning the performance of this Agreement shall
be resolved in accordance with the provisions of the ADR
Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the day and year first
above written.
CONSOLIDATED FREIGHTWAYS, INC.
By:/S/ ▇ ▇ ▇▇▇▇▇▇▇
Its: President and CEO
CONSOLIDATED FREIGHTWAYS CORPORATION
By:/s/S D ▇▇▇▇▇▇▇▇
Its: Senior Vice President and
General Counsel
Acknowledged and Agreed by
the following entities with
respect to the indicated
Sections of this Agreement:
▇▇▇▇▇ AIR FREIGHT CORPORATION
(with respect to Sections 4.1, 4.5 and 5.6)
By:/s/W F McDonald__________
Its: Vice President
CON-WAY TRANSPORTATION SERVICES, INC.
(with respect to Sections 4.1, 4.5 and 5.6)
By:/s/ R R Magnan___________
Its: Vice President
MENLO LOGISTICS, INC.
(with respect to Sections 4.1, 4.5 and 5.6)
By:/s/▇▇▇▇ Williford________
Its: President
CONSOLIDATED FREIGHTWAYS CORPORATION
OF DELAWARE
(with respect to Sections 3.6, 4.2, 4.5,
5.6, 6.1, 6.2 and 6.3)
By:/s/S D Richards__________
Its: Vice President and General Counsel
CANADIAN FREIGHTWAYS LIMITED
(with respect to Sections 3.6, 4.2, 4.5,
5.6, 6.1, 6.2 and 6.3)
By:/s/K A Johnson___________
Its: Secretary and Treasurer