EXHIBIT 10.35
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TRANSITION SERVICES AGREEMENT
between
CNF SERVICE COMPANY, INC.
and
CONSOLIDATED FREIGHTWAYS CORPORATION
TABLE OF CONTENTS
ARTICLE 1 SERVICES TO BE PROVIDED
Section 1.1 General Description; Provision of
Services; Volume Discounts 2
Section 1.2 Performance Levels 2
Section 1.3 Instructions 3
Section 1.4 Consents; Indemnification; Assets 3
Section 1.5 Systems Availability and Data
Integrity 5
Section 1.6 Systems Users 5
ARTICLE 2 PAYMENT FOR SERVICES
Section 2.1 Costs 6
Section 2.2 Invoices; Payment Procedures 6
Section 2.3 Disputed Fees 7
ARTICLE 3 TERM; TERMINATION OF SERVICES
Section 3.1 Term 7
Section 3.2 Termination of Services 8
ARTICLE 4 COOPERATION
Section 4.1 Cooperation 8
Section 4.2 Provider Administrative
Records 9
Section 4.3 Periodic Review of Services 9
ARTICLE 5 FORCE MAJEURE
Section 5.1 Force Majeure 9
ARTICLE 6 CONFIDENTIALITY
Section 6.1 Confidentiality 10
ARTICLE 7 MISCELLANEOUS
Section 7.1 Notices 12
Section 7.2 Severability 13
Section 7.3 Binding Effect; Assignment 13
Section 7.4 No Third Party Beneficiaries 13
Section 7.5 Interpretation 13
Section 7.6 Jurisdiction and Consent to
Service 13
Section 7.7 Entire Agreement 14
Section 7.8 Governing Law 14
Section 7.9 Counterparts 14
Section 7.10 Relationship of the Parties 14
Section 7.11 Waiver 15
Section 7.12 Sole Remedy; No Damages 15
Section 7.13 Indemnification 15
Exhibit A - Services
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT ("Agreement") dated
as of December 2, 1996, by and between CNF Service Company,
Inc., a corporation organized under the laws of the State of
Delaware (together with its wholly owned subsidiaries,
"Provider"), and Consolidated Freightways Corporation, a
corporation organized under the laws of the State of
Delaware (together with its wholly owned subsidiaries,
"Recipient").
W I T N E S S E T H
WHEREAS, Provider is a wholly owned subsidiary of
Consolidated Freightways, Inc., a Delaware corporation
("CFI");
WHEREAS, pursuant to that certain Distribution
Agreement dated as of the date hereof (the "Distribution
Agreement"), all of the shares of common stock of Recipient
are being distributed (the "Distribution") to the
stockholders of CFI;
WHEREAS, prior to the Distribution, Leland James
Service Corporation, a Delaware corporation ("LJSC")
provided services to Consolidated Freightways Corporation of
Delaware ("CFCD"), the principal operating subsidiary of
Recipient;
WHEREAS, in connection with the Distribution,
certain service capabilities of LJSC are being transferred
to Provider;
WHEREAS, in order for Recipient to operate CFCD
effectively in a transition period following the
consummation of the Distribution, Recipient desires to enter
into certain arrangements with Provider with respect to the
performance of certain transition services;
WHEREAS, Provider is willing to enter into such
transition arrangements on the terms and conditions set
forth herein.
NOW, THEREFORE, the parties hereto agree as
follows:
ARTICLE 1
SERVICES TO BE PROVIDED
Section 1.1 General Description; Provision of
Services; Volume Discounts. (a) The purpose of this
Agreement is to set forth the terms upon which Recipient is
to receive certain services from Provider on an interim
basis after the Distribution on the terms and subject to the
conditions herein (the "Services").
(b) Pursuant to the terms and conditions of
this Agreement, Provider shall provide, and Recipient shall
purchase, the Services as described in Exhibit A hereto;
provided, however, that each of the parties hereto
acknowledges and agrees that Services may be added to, or
deleted from, Exhibit A by mutual consent of the parties at
any time (and the Service Fees (as defined) adjusted
appropriately).
Section 1.2 Performance Levels. In providing the
Services, Provider shall perform according to the
performance levels maintained by LJSC in the past; or,
should any instance arise in which none of such performance
levels applies, Provider shall act to substantially the same
extent, in substantially the same manner and with
substantially the same degree of care and diligence as LJSC
would have acted, prior to the Distribution, if it had
provided such Services to CFCD. Each Service shall be
provided priority no less favorably than in the past,
consistent with past practices and without discrimination
against Recipient.
Section 1.3 Instructions. The parties agree that
the Services provided by Provider shall be essentially
ministerial in nature so that Provider shall, in all matters
requiring the exercise of discretion, follow Recipient's
instructions, which shall be promptly provided to Provider
by Recipient to the extent requested by Provider and which
must be provided in writing if so requested. With respect
to post-Distribution occurrences for which Provider is to
perform Services as set forth in numbers 25, 26, 27, 28, 31
and 32 on Exhibit A, the parties agree that Provider shall
be under no obligation to perform any (or any part of) such
Services without clear, written instructions from Recipient.
Notwithstanding the foregoing, Provider shall not be
required to follow any such instructions that, in Provider's
reasonable judgment, are inconsistent with the proper
performance of its responsibilities, or that require the
exercise of discretion, including without limitation the
making of decisions regarding the hiring or firing of
employees. The parties agree that it is their intent that
Provider not be deemed a fiduciary with respect to plans
subject to the Employee Retirement Income Securities Act of
1974, as amended.
Section 1.4 Consents; Indemnification; Assets.
(a) If the provision of any of the Services by Provider to
Recipient would place CFI, Provider or any other subsidiary
of CFI in violation or breach of any contract or license
(other than software licenses, which are addressed in
Section 3.1(g) of the Distribution Agreement) between any
such entity and any third party, then Recipient and Provider
shall use their respective commercially reasonable efforts,
with all costs thereof to be borne by Recipient to obtain
forthwith any consent required for Provider to provide such
Services to Recipient, and Recipient shall indemnify and
hold harmless Provider against all Losses and Liabilities
relating to any claims arising from any such alleged
violation or breach, such indemnification to be provided in
a like manner to the provision of indemnification under the
Distribution Agreement. If, after the exercise of such
efforts, such consent cannot be obtained, Provider shall use
commercially reasonable efforts to provide Recipient with
functionally equivalent Services with any additional costs
required in providing such Services to be borne by
Recipient. Recipient shall indemnify and hold harmless
Provider against all Losses and Liabilities (including,
without limitation, as relates to software maintenance costs
to the extent not otherwise paid by Recipient as
contemplated by Section 2.1) which arise from or in any way
relate to (i) the use of any software or hardware provided
by Recipient or (ii) the use of any software or hardware in
connection with the performance of the Services hereunder
provided to Recipient, such indemnification to be provided
in a like manner to the provision of indemnification under
the Distribution Agreement. The provisions of this Section
1.4(a) shall not alter the agreement of Recipient and
Provider's parent company as provided in Section 3.1(g) of
the Distribution Agreement.
(b) The Service Fees (as defined) to be paid
by Recipient hereunder shall subsume all costs incurred by
Provider in connection with the performance of its
obligations hereunder and in respect of which separate
payment or indemnification by Recipient is not otherwise
contemplated hereby, including, but not limited to,
personnel (including fringe benefits and management fees
relating thereto), computer hardware, computer time,
printers, voice and data telecommunications equipment, file
cabinets, paper files, administrative records, photocopies,
incidentals and all other assets owned by Provider after the
Distribution which are needed in connection with the
provision of such Services on a routine and non-routine
basis and during peak and non-peak periods; and any such
equipment may be replaced from time to time by Provider with
functionally equivalent or upgraded equipment.
(c) (i) All data, software or other property
or assets owned or created by Recipient (other than the
intellectual property rights which Recipient has
acknowledged to be vested in CFI pursuant to Section 3.1(f)
of the Distribution Agreement) shall remain the sole and
exclusive property and responsibility (including, without
limitation, with respect to maintenance, modification and
upgrade) of Recipient. Provider shall not acquire any
rights in any such data, software or other property or
assets, including any derivative works of Recipient-owned
software or data created by Provider, pursuant to this
Agreement or Provider's performance hereunder.
(ii) All data, software or other
property or assets which are owned by Provider, including
without limitation derivative works thereof and new data or
software created by Provider at Provider's sole expense
pursuant to the provision of Services ("Provider Software")
shall be the sole and exclusive property and responsibility
(including, without limitation, with respect to maintenance,
modification and upgrade) of Provider and any interest of
Recipient therein shall be limited to the Licensed Materials
(as defined in the Distribution Agreement) and the
Additional Licenses (as defined in the Distribution
Agreement), if any. Recipient shall not acquire any other
rights in any such data, software or other property or
assets pursuant to this Agreement or Recipient's performance
hereunder.
(d) If as a result of unanticipated events
or conditions, Recipient reasonably determines that it
requires modification of any of the Services or software
used in connection therewith upon Recipient's request,
Provider shall so modify the Services or software used in
connection therewith upon Recipient's request (i) to the
extent commercially reasonable, (ii) to the extent such
modifications do not adversely affect Provider's ability to
maintain its computer systems in connection with its
continuing business, and (iii) at Recipient's sole cost and
expense subject to Recipient's approval of Provider's
estimate. Moreover, Provider may suggest modification of
software and may, in its sole discretion, offer to share in
the cost thereof if it determines that any such
modifications may be beneficial to Provider. Recipient
shall have exclusive ownership rights to any software
modifications it pays for solely, and shared rights to such
modifications with respect to which, and only to the extent
that, it shares in the payment therefor.
(e) Provider shall provide all support and
assistance reasonably requested by Recipient, at an arm's-
length, negotiated price, in connection with the transfer of
any and all Services from Provider to Recipient or any of
its affiliates or an alternative third-party service
provider selected by Recipient. Specifically, upon the
request of Recipient, during the term of this Agreement,
Provider shall deliver to Recipient (or as directed by
Recipient), at the Recipient's request and with minimal
interruption to the operations of Provider or its
affiliates, all data and programs owned by Recipient or
licensed by Recipient from third party vendors, and all
backup or archival copies thereof (or any part thereof as
specified by Recipient), in hard copy, electronic, magnetic
or any other form which is then in Provider's possession or
control, as requested by Recipient, and (in the event that
this Agreement is terminated) copies of all material
licensed pursuant to Section 3.1(g) of the Distribution
Agreement by Recipient from Provider (with reasonable
instructions for the installation and use thereof).
Section 1.5 Systems Availability and Data
Integrity. Provider shall maintain, consistent with past
practices, operational recovery procedures to insure the
availability of systems and the integrity of data relating
to the Services at all times. In the event of the
unavailability of any such systems or the loss or
destruction of any such data, Provider shall use
commercially reasonable efforts consistent with past
practices to restore such systems and recover or replace
such data as quickly and completely as possible.
Section 1.6 Systems Users. In each case as it
relates to Recipient's employees, consultants, affiliates or
authorized customers during the term of this Agreement the
addition or deletion of authorized users ("Users"),
including persons authorized at the application-level or
system-level, in regard to any computer system, the
modification of computer system authority or access granted
to any person, and the control generally of access to and
use of computer systems, is to be at the direction of
Recipient, and Provider shall permit no changes in such
access or use without prior written notice to and consent
from Recipient. No User will be allowed system authority or
access greater than at the application level without the
prior written consent of Provider. Each party shall
indemnify and hold harmless the other against all
degradations in performance levels caused by users
authorized for system level access on behalf of, or at the
request of, such first party, such indemnification to be
provided in a like manner to the provision of
indemnification under the Distribution Agreement.
ARTICLE 2
PAYMENT FOR SERVICES
Section 2.1 Costs. The prices charged for the
Services shall initially be those set forth in Exhibit A,
which have been negotiated on an arm's-length basis (the
"Service Fees"). The Service Fees shall be adjusted on an
arm's-length basis every 3 months, except that the Service
Fees for the period from the Distribution Date through March
31, 1997 shall be as indicated on Exhibit A and Provider
shall, not less than 3 months before any proposed adjustment
to Service Fees, provide Recipient with details of any
proposed adjustment and justification therefor. The Parties
shall negotiate in good faith to reach an agreement within
30 days. Recipient shall not be charged a fee for any
improvements or upgrades to facilities or equipment without
its prior written consent; provided, however, that Recipient
acknowledges and agrees that its failure to timely provide
any such consent may adversely affect its abilities to
receive Services hereunder, and Provider shall not be liable
for any harm to Recipient resulting therefrom.
Notwithstanding the immediately preceding sentence, all
maintenance fees relating to software used in connection
with the provision of Services hereunder, and a
proportionate share of all consultants' fees relating to the
Year 2000 software conversion project, shall be billed
separately from the Service Fees and shall be paid by
Recipient together therewith.
Section 2.2 Invoices; Payment Procedures. (a)
Not later than 30 days after the end of each calendar month
Provider shall send Recipient an invoice that includes a
detailed breakdown of all Service Fees for such month. All
invoices shall be sent to: Consolidated Freightways
Corporation, attention: Controller, mailing address: 175
Linfield Drive, Menlo Park, CA 94025. All payments of such
invoices shall be made by wire transfer or interbank
transfer in immediately available funds to Provider's
account at such banks as Provider shall designate to
Recipient in writing and shall be made within 15 days after
the date of any invoice.
(b) Recipient shall establish and maintain
an account ("Payroll Account") from which Provider shall be
authorized to draw in order to meet Recipient's gross
payroll obligations, and Recipient shall ensure that such
Payroll Account is sufficiently funded at all times.
Notwithstanding any other provision hereof, (i) Recipient
shall reimburse Provider for each payroll paid by Provider
to the employees of the Recipient for the period
contemplated above, to the extent that Provider elects to
provide funds despite a deficiency in the Payroll Account,
and (ii) Recipient shall provide each such reimbursement by
wire transfer of immediately available funds on the day of
the issuance of that payroll to such employees.
Section 2.3 Disputed Fees. In the event that
Recipient and Provider have a good faith dispute with
respect to the amount of payment for Services actually
rendered (other than with respect to the underlying schedule
of fees for Services generally), Recipient shall withhold
payment only of any unpaid amount in dispute, and shall
deliver to Provider promptly (and within 15 days following
receipt of any invoice from Provider that is the basis of
such dispute) a written statement describing the dispute,
which statement shall provide a reasonably detailed
breakdown of the disputed payment amounts. The parties
agree to use their best efforts to resolve any such dispute
hereunder within 15 days following Provider's receipt of
Recipient's statement describing the dispute. In the event
the parties cannot resolve the dispute within such time
period, each discrepancy or disagreement which cannot be so
resolved shall be submitted to a firm of nationally
recognized independent certified public accountants (agreed
upon by Provider and Recipient), who shall promptly deliver
a report setting forth their calculation of each item that
was the subject of discrepancy or disagreement, which report
shall be final and binding on the parties. The fees and
expenses of such firm shall be borne one-half by Provider
and one-half by Recipient and each party shall bear its own
other expenses in connection therewith.
ARTICLE 3
TERM; TERMINATION OF SERVICES
Section 3.1 Term. (a) The term of this
Agreement shall commence on the date hereof and shall
continue in effect until the close of business on the third
anniversary of the date hereof.
(b) Notwithstanding anything to the contrary
in this Agreement, the provisions of Articles 5 and 6 and
Sections 1.1(c) (solely as relates to indemnification),
1.4(a) (solely as relates to indemnification), 1.6 (solely
as relates to indemnification), 4.2, 7.6, 7.7, 7.8, 7.11,
7.12 and 7.13 shall survive any termination of this
Agreement or the provision of Services hereunder.
Section 3.2 Termination of Services. Recipient
may at any time, upon six months' irrevocable written notice
to Provider, terminate all the Services or any Service (or
any portion thereof) on a Service by Service basis.
Provider may, at any time after the first anniversary of the
date hereof, terminate any or all of the Services on six
months' irrevocable written notice to Recipient; provided,
however, Recipient shall be entitled to continue receiving
the telecommunication and data processing services through
the third anniversary date in its sole discretion. The
provision of all Services pursuant hereto shall in any event
terminate on or prior to the third anniversary of the date
hereof. Upon termination of any Service, all administrative
records (which term is not to be construed to include
Provider Software) relating to that Service as such records
relate solely to Recipient which have not already been
transferred to the sole possession of Recipient shall be so
transferred, it being understood that Provider may retain
copies of such records.
ARTICLE 4
COOPERATION
Section 4.1 Cooperation. Each of the parties
shall cooperate with and provide assistance to the other
consistent with the terms and conditions hereof (including,
without limitation, any limitations relating to software) to
enable (i) the full performance of all obligations
hereunder, (ii) the review and audit of books and
administrative records as they relate to the provision of
Services, and (iii) Recipient, or any of its affiliates or
third party service provider, to assume the performance of
any and all Services upon termination or prior thereto; such
cooperation and assistance to include without limitation
providing the other party, its representatives and its
agents (including, without limitation, its outside auditors)
with reasonable access, during normal business hours and
upon reasonable advance notice, to its employees,
representatives and agents and its books, administrative
records, offices and properties relating to the Services.
Nothing in this section 4.1 shall operate to grant any right
to Recipient of Provider-owned software, data or other
intellectual property.
Section 4.2 Provider Administrative Records.
Provider shall keep administrative records regarding the
provision of Services as LJSC has kept records for itself
regarding such Services prior to the Distribution, and for
each Service shall retain such records for a period of
twelve months following the cessation of Provider's
provision of that Service to Recipient. Recipient, its
agents and representatives shall have reasonable access
during normal business hours and upon reasonable advance
notice to such records (which term is not to be construed to
include Provider Software) from the date hereof through the
end of the period for retaining such records pursuant to
this Section 4.2.
Section 4.3 Periodic Review of Services. From
time to time during the term of this Agreement, but not less
frequently than once each month, the parties shall meet and
discuss the nature, quality, and level of Services covered
by this Agreement, any concerns either party may have in
regard to such matters, and any amendments either party may
wish to make to the Services specified in Exhibit A.
ARTICLE 5
FORCE MAJEURE
Section 5.1 Force Majeure. Each party shall be
relieved of its obligations hereunder if and to the extent
that any of the following events or conditions directly or
indirectly hinder, limit or make impracticable the
performance by that party of any of its obligations
hereunder: Act of God, war, riot, fire, earthquake,
explosion, flood, sabotage, national defense requirement,
strike, lockout, job action, injunction, act or order of a
governmental agency or instrumentality thereof (whether of
fact or law), act of a public enemy, embargo or other
concerted act of workers, telecommunications failures or
electrical failures; provided, that Provider shall continue
to have in place at all times disaster recovery procedures
consistent with past practices of LJSC regarding CFCD to
enable rapid recovery from any such event or condition.
Such procedures may be subject to revision by Provider from
time to time as may be required in the ordinary course of
business, provided, that such revisions do not adversely
affect the levels of protection afforded by such procedures.
Prior to being relieved of any obligations hereunder
Provider shall have used commercially reasonable efforts
(consistent with past practices) to remove or otherwise
address the effects of any such event or condition as soon
as practicable. Recipient shall be liable for all costs
incurred by Provider in connection with any Service that
Provider fails to complete and provide as a result of any
such event or condition.
ARTICLE 6
CONFIDENTIALITY
Section 6.1 Confidentiality. The parties
acknowledge that in connection with the provision of
Services hereunder, each may gain access to confidential and
proprietary information regarding the other's financial and
business affairs (hereinafter "Confidential Information" or
"Information"). Each party hereby agrees to use
commercially reasonable efforts to:
(a) confine its access to and
examination of Confidential Information to the minimum
Information necessary to enable Provider to provide the
Services hereunder and Recipient to operate its business;
(b) limit access to such Information
only to those individuals who reasonably need to receive
such access to enable Provider to provide the Services
hereunder and Recipient to operate its business;
(c) inform such individuals of the
confidential nature of such Information and take all
reasonable steps to secure the compliance of such
individuals with the terms of this Article 6;
(d) use such Information solely to
enable Provider to provide the Services hereunder and
Recipient to operate its business;
(e) keep such Information confidential
and not disclose it to any third party in any manner except
as may be required by law or court order; and
(f) provide the other party with
reasonable access to that party's employees, representatives
and agents and its books and administrative records relating
to the relevant business (including, without limitation, any
and all computer access reports and security access reports)
in order for the other party to monitor compliance with this
Article 6.
Notwithstanding the foregoing, disclosures of
Information may be made to third parties: (i) with the prior
written consent of the party whose Information it is, (ii)
if the Information is in the public domain and has entered
the public domain through no fault of the party seeking to
make such disclosure or its affiliates or representatives,
(iii) if the Information is lawfully acquired by the party
seeking to make such disclosure or its affiliates or
representatives from sources other than the party whose
Information it is or its affiliates or representatives and
none of the party seeking to make such disclosure, its
affiliates or its representatives is aware that such source
was under any obligation (whether contractual, legal or
fiduciary) to the party whose Information it is or any of
its affiliates or representatives to keep such Information
confidential or (iv) to the extent disclosure is compelled
by law or court order. Each party shall be responsible for
any breach of this Article 6 caused by itself or any of its
employees, agents or representatives. Anything contained
herein to the contrary notwithstanding, the parties
acknowledge and agree that irreparable damage would occur in
the event that any provision of this Article 6 was not
performed in accordance with its terms, and that the parties
shall be entitled to specific performance as the sole
remedy.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Notices. All notices, requests,
demands, consents, waivers and other communications required
or permitted to be given under this Agreement (excluding
invoices as described in Section 2.2 above) shall be in
writing and may be given by any of the following methods:
(a) personal delivery; (b) facsimile transmission; (c)
registered or certified mail, postage prepaid, return
receipt requested; or (d) overnight delivery service.
Notices shall be sent to the appropriate party at its
address or facsimile number given below (or at such other
address or facsimile number for such party or other person
as shall be specified by notice given hereunder):
If to Provider to:
CNF Service Company, Inc.
1717 N.W. 21st Avenue
Portland, OR 97209
Attention: Controller
Fax No.:
with a copy to:
Consolidated Freightways, Inc.
3240 Hillview Avenue
Palo Alto, CA 94304
Attention: General Counsel
Fax No.: (415) 494-8372
If to Recipient to:
Consolidated Freightways Corporation
175 Linfield Drive
Menlo Park, CA 94025
Attention: General Counsel
Fax No.:
All such notices, requests, demands, waivers
and communications shall be deemed received upon (i) actual
receipt thereof by the addressee or (ii) actual delivery
thereof to the appropriate address.
Section 7.2 Severability. Should any provision
of this Agreement for any reason be declared invalid or
unenforceable, such declaration shall not affect the
validity or enforceability of any of the other provisions of
this Agreement, which other provisions shall remain in full
force and effect and the application of such invalid or
unenforceable provision to persons or circumstances other
than those as to which it has been held invalid or
unenforceable shall be valid and enforced to the fullest
extent permitted by law.
Section 7.3 Binding Effect; Assignment. This
Agreement and all of the provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, directly or
indirectly, including, without limitation, by operation of
law, by any party hereto without the prior written consent
of the other party hereto; provided, (i) that either of the
parties hereto may without such prior written consent
transfer or assign its rights hereunder to one or more of
its affiliates, but no such transfer arrangement shall
release the transferring party of its obligations hereunder
and (ii) that Provider may subcontract to any party so long
as Provider remains liable for the performance of Services
provided by any such subcontractor.
Section 7.4 No Third Party Beneficiaries. This
Agreement is solely for the benefit of the parties and their
respective successors and permitted assigns, and shall not
be deemed to confer upon or give to any other party any
remedy, claim, liability, reimbursement, cause of action or
other right.
Section 7.5 Interpretation. The section headings
contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and
shall not in any way affect the meaning or interpretation of
this Agreement.
Section 7.6 Jurisdiction and Consent to Service.
In accordance with the laws of the State of Oregon, and
without limiting the jurisdiction or venue of any other
court, the parties (a) agree that any suit, action or
proceeding arising out of or relating to this Agreement
(other than proceedings arising under Section 2.3 above with
respect to the amount of payment for Services) shall be
brought solely in the state or federal courts of Oregon; (b)
consent to the exclusive jurisdiction of each such court in
any suit, action or proceeding relating to or arising out of
this Agreement; (c) waive any objection which any of them
may have to the laying of venue in any such suit, action or
proceeding in any such court; and (d) agree that service of
any court paper may be made in any manner as may be provided
under the applicable laws or court rules governing service
of process in such court.
Section 7.7 Entire Agreement. This Agreement
constitutes the entire agreement among the parties with
respect to the subject matter hereof, and supersedes all
other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter
hereof. Any conflicts between the language herein and the
language used in the Distribution Agreement shall be
resolved in favor of the language used herein.
Section 7.8 Governing Law. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF OREGON (REGARDLESS OF THE LAWS THAT MIGHT
OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED
TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE
AND REMEDIES.
Section 7.9 Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to
be an original, but all of which shall constitute one and
the same agreement.
Section 7.10 Relationship of the Parties.
Provider and Recipient each acknowledge that they are
separate entities, each of which has entered into this
Agreement for independent business reasons. Except as
provided below in this Section 7.10, the relationship of
Provider to Recipient hereunder is that of an independent
contractor and nothing herein shall be deemed or construed
to create a relationship of partnership, employment, agency,
joint venture, or any other relationship. Except as
provided below in this Section 7.10, neither party shall
transact any business in the name of the other party or
obligate or commit the other party in any manner. In
recognition of the fact that some of the Services to be
provided by Provider pursuant to this Agreement will require
that personnel employed by Provider engage in business
dealings with customers, vendors, or others with whom
Recipient does business and that it is to Recipient's
advantage for such business dealings to be conducted on
behalf of and in the name of Recipient, Recipient may
authorize Provider to use any of its names, whenever (a)
necessary or appropriate in providing Services or other
assistance hereunder and (b) Recipient explicitly so
instructs Provider, in writing. Recipient shall indemnify
and hold harmless Provider against all Losses and
Liabilities incurred by Provider and arising from this
Section 7.10, such indemnification to be provided in a like
manner to the provision of indemnification under the
Distribution Agreement.
Section 7.11 Waiver. Any failure by either party
to comply with any obligation, covenant or agreement herein
or to fulfill any condition herein may be waived only by a
written notice from the party entitled to the benefits
thereof. No failure by either party hereto to exercise, and
no delay in exercising, any right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise
of any right hereunder preclude any other or future exercise
of that right or any other right hereunder by that party.
Section 7.12 Sole Remedy; No Damages. If
Recipient becomes dissatisfied with the quality or level of
Services provided hereunder, claims any breach of this
Agreement by Provider or otherwise becomes dissatisfied with
any matter relating hereto or arising herefrom, its sole
remedy shall be termination of all or a part of the Services
without right to seek actual, compensatory or consequential
damages. RECIPIENT HEREBY ACKNOWLEDGES AND AGREES THAT IT
IS HEREBY WAIVING CERTAIN LEGAL RIGHTS AND REMEDIES, AND
THAT THIS WAIVER IS A FUNDAMENTAL ELEMENT OF THE BARGAIN
BETWEEN THE PARTIES HERETO, WITHOUT WHICH PROVIDER WOULD NOT
HAVE ENTERED INTO THIS AGREEMENT. RECIPIENT HEREBY
ACKNOWLEDGES AND AGREES FURTHER THAT, NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, PROVIDER MAY, BUT
SHALL IN NO EVENT BE OBLIGATED TO, ADVANCE FUNDS OR INCUR
COSTS IN CONNECTION WITH ITS PERFORMANCE HEREUNDER.
Section 7.13 Indemnification. Recipient, at its
own expense, shall indemnify, defend and hold Provider, its
subsidiaries and their present or former officers,
directors, shareholders, agents, employees, representatives,
successors-in-interest, parents, affiliates, insurers,
attorneys and assigns (collectively, the "Indemnified
Parties") harmless from and against any claims, judgments,
losses, deficiencies, damages, punitive or exemplary
damages, fines or penalties, liabilities, costs and expenses
(including reasonable attorneys' fees, charges and
disbursements) whether required to be paid to a third party
or otherwise incurred in connection with or arising from any
claim, suit, action or proceeding ("Claim") against the
Indemnified Party to the extent the basis of such Claim is
that: (i) Recipient has failed to pay any amounts owed to
third parties in connection with the Services provided by
Provider under this Agreement; (ii) a third party has been
or may be injured or damaged in any way by any breach of
Recipient of any of its duties, representations or
warranties under this Agreement; (iii) Recipient or any of
its employees, agents, or services acted improperly in
connection with the notification, investigation, adjustment
or settlement of claims and losses arising out of the
Services described in Exhibit A, and (iv) there is any other
liability or obligation arising out of Provider's
administration or operation of the Services or functions
described in Exhibit A, except to the extent that same
arises from the gross negligence or willful misconduct of
Provider. The provision of indemnification under this
Section 7.13 shall be in a like manner to the provision of
indemnification under the Distribution Agreement.
IN WITNESS WHEREOF, the parties have each caused
this Agreement to be executed by its duly authorized
representative as of the day and year first above written.
CNF SERVICE COMPANY, INC.,
on behalf of itself and its
wholly owned subsidiaries
By: /s/D E Moffitt___________
Name: Donald E. Moffitt
Title: President and CEO
CONSOLIDATED FREIGHTWAYS
CORPORATION,
on behalf of itself and its
wholly owned subsidiaries
By: /s/S D Richards__________
Name: Stephen D. Richards
Title: Senior Vice President and
General Counsel