CNF TRANSPORTATION INC.
$200,000,000
8-7/8% Notes due 2010
UNDERWRITING AGREEMENT
----------------------
March 3, 2000
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
ABN AMRO INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
CNF Transportation Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to J.P. Morgan Securities Inc., Salomon Smith Barney
Inc., ABN AMRO Incorporated and Credit Suisse First Boston Corporation (the
"Underwriters"), an aggregate of $200,000,000 principal amount of its 8-7/8%
Notes due 2010 (the "Securities").
It is understood that substantially contemporaneously with the sale of
the Securities to the Underwriters contemplated hereby, the Company and Bank One
Trust Company, National Association, as Trustee, (the "Trustee") shall enter
into an Indenture in substantially the form of the Form of Indenture for
senior Debt Securities, senior subordinated Debt Securities, subordinated Debt
Securities, junior subordinated Debt Securities and Debt Securities of any other
ranking attached as Exhibit 4(d)(i) to the Registration Statement referred to
below (the "Indenture," which term includes the terms of the Securities which
shall be established pursuant to the Officers' Certificate to be dated March 8,
2000) and an Officers' Certificate in substantially the form heretofore
provided to you by the Company as an exhibit to the Form 8-K to be filed by the
Company on or prior to the Closing Date providing for the issuance of the
Securities.
1. Registration Statement and Prospectus. The Company has prepared
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and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Securities Act"), a registration statement on Form S-3 (the registration number
of which is 333-56667), including a prospectus, relating to, among other things,
certain debt securities of the Company (such debt securities, the "Shelf
Securities"). The Company also has filed with, or proposes to file with, the
Commission pursuant to Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Securities. The registration statement as amended
to the date of this Agreement is hereinafter referred to as the "Base
Registration Statement" and any registration statement filed pursuant to Rule
462(b) under the Securities Act relating to the Securities is herein referred to
as the "Additional Registration Statement," and, together with the Base
Registration Statement, the "Registration Statement." The related prospectus
covering the Shelf Securities in the form first used to confirm sales of the
Securities is hereinafter referred to as the "Basic Prospectus." The Basic
Prospectus as supplemented by the prospectus supplement (the "Prospectus
Supplement") specifically relating to the Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Prospectus."
Any reference in this Agreement to the Registration Statement, the Basic
Prospectus, any preliminary form of Prospectus (a "preliminary prospectus")
previously filed with the Commission pursuant to Rule 424 or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act which were
filed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act") on
or before the date of this Agreement or the date of the Basic Prospectus, such
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend," "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, such
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
2. Agreements to Sell and Purchase. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, on the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Securities set forth
opposite the name of such Underwriter in Schedule I hereto at the purchase price
of 98.726% of the principal amount thereof (the "Purchase Price").
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3. Terms of Public Offering. The Company is advised by you that the
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Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the parties hereto have executed this Agreement,
as in your judgment is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
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payment for the Securities shall be made at 10:00 A.M., New York City time, on
March 8, 2000, or at such other time or such other date as the Underwriters and
the Company may agree upon in writing. The time and date of such payment are
referred to herein as the "Closing Date." As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full Business Days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time, on
the Business Day next preceding the Closing Date. Certificates in definitive
form evidencing the Securities shall be delivered to you or as directed by you
on the Closing Date, with any transfer taxes thereon duly paid by the Company,
for the respective accounts of the several Underwriters, against payment to the
Company of the Purchase Price therefor by wire transfer in immediately available
funds to the account specified by the Company to the Underwriters (no later than
noon the Business Day prior to the Closing Date).
5. Agreements of the Company. The Company agrees with each of you:
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(a) To file the Prospectus, which shall be in a form reasonably
satisfactory to you, with the Commission within the time periods specified
by Rule 424; and to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 5:00 p.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such
quantities as the Underwriters may reasonably request.
(b) During the period referred to in paragraph (e) below, to
advise you promptly and, if requested by you, to confirm such advice in
writing, (i) when any post-effective amendment to the Registration
Statement has been filed or becomes effective after the date of this
Agreement, (ii) when any supplement to the Prospectus or any amended
Prospectus has been filed, (iii) of any request by the Commission for
amend-
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ments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (v) of the happening of any event
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. During the period
referred to in paragraph (e) below, the Company will use its reasonable
best efforts to prevent the issuance of any stop order by the Commission,
and if at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
(c) To furnish to you one signed copy and three conformed copies
of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits thereto and documents
incorporated by reference therein, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits thereto but including the documents incorporated by reference
therein, as you may reasonably request.
(d) During the period specified in paragraph (e) below, not to
file any amendment or supplement to the Registration Statement, whether
before or after the time when it becomes effective, or to make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised and given the opportunity to review, or to which you
shall reasonably object; and to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by you,
and, if applicable, to use its reasonable best efforts to cause the same to
become promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of
counsel for the Under writers a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to
furnish to each Underwriter and dealer as many copies of the Prospectus
(and of any amendment or supplement to the Prospectus) as such Underwriter
or dealer may reasonably request.
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(f) If during the period specified in paragraph (e) above, any
event shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Securities, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Securities for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Securities and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its securityholders
and to the Underwriters as soon as reasonably practicable an earnings
statement covering a period of at least twelve months beginning with the
first fiscal quarter of the Company occurring after the effective date of
the Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder, and to advise you in writing when such statement has been so
made available.
(i) During the period beginning on the date hereof and continuing
to and including the Business Day following the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of or
guaranteed by the Company which are substantially similar to the
Securities.
(j) To use the net proceeds received by the Company from the sale
of the Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(k) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all
costs, expenses, fees and
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taxes incident to the performance of its obligations hereunder (excluding,
without limitation, fees and disbursements of counsel for the Underwriters
other than pursuant to clauses (iv) and (v) below), including without
limiting the generality of the foregoing, all costs and expenses incident
to (i) the preparation, issuance, and delivery of the certificates for the
Securities, including any expenses of the Trustee (ii) the preparation,
printing, filing and distribution under the Securities Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e) above, (iii) the
printing and delivery of the Prospectus and any preliminary prospectus and
all amendments or supplements to it during the period specified in
paragraph (e) above, (iv) the printing (including word processing and
duplication costs) and delivery of this Agreement, the Indenture,
Preliminary and Supplemental Blue Sky Memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection with the offering of the Securities (including in each case any
disbursements of counsel for the Underwriters relating to such printing
and delivery of the Blue Sky Memorandum), (v) the registration or
qualification of the Securities for offer and sale under the securities or
Blue Sky laws of the several states (including in each case the reasonable
fees and disbursements of counsel for the Underwriters relating to such
registration or qualification and memoranda relating thereto), (vi) filings
and clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vii) furnishing such copies of the
Registration Statement, the Prospectus and all amendments and supplements
thereto as may be requested for use in connection with the offering or sale
of the Securities by the Underwriters or by dealers to whom Securities may
be sold, and (viii) the rating of the Securities including, without
limitation, fees payable to rating agencies in connection therewith.
(l) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
6. Representations and Warranties of the Company. The Company
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represents and warrants to each Underwriter that:
(a) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and did not contain an untrue statement of a
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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 that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through J.P. Morgan
Securities Inc. expressly for use therein.
(b) The Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) comply, or will comply, as the case
may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus
and any amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented, if applicable, at the Closing
Date will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the foregoing representations and warranties shall not apply to
(i) that part of the Registration Statement which constitutes the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of any trustee (each a "Form T-1"), and (ii) statements or
omissions in the Registration Statement or the Prospectus or any amendment
or supplement made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through J.P. Morgan
Securities Inc. expressly for use therein.
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will conform
in all material respects to the
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requirements of the Exchange Act, and will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with corporate
power and corporate authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus; and the
Company is duly qualified to transact business as a foreign corporation and
is in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise.
(e) Each of Con-Way Transportation Services, Inc., Emery
Worldwide Airlines, Inc. ("EWA") and Menlo Logistics, Inc. (each
individually, a "Significant Subsidiary" and collectively, the "Significant
Subsidiaries") is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with
corporate power and corporate authority under such laws to own, lease and
operate its properties and conduct its business; and each Significant
Subsidiary is duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, considered as one enterprise. All of
the outstanding shares of capital stock of each Significant Subsidiary have
been duly authorized and validly issued and are fully paid and non-
assessable and are owned by the Company (except for directors' qualifying
shares), free and clear of any pledge, lien, security interest, charge,
claim, equity, encumbrance or adverse interest of any kind (except for
restrictions on transfer arising under federal or state securities or blue
sky laws).
(f) The Indenture has been duly qualified under the Trust
Indenture Act and, at the Closing Date, will have been duly authorized,
executed and delivered by the Company and will be a valid and binding
agreement of the Company, enforceable in accordance with its terms subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or other similar laws relating
or affecting creditors' rights generally or by general equitable principals
and except as rights to indemnification and contribution may be limited by
applicable law or public policy; the Securities have been duly authorized
and, when duly executed, attested and authenti-
8
cated in accordance with the provisions of the Indenture and delivered
against payment therefor in accordance with this Agreement, will be
entitled to the benefits of the Indenture.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Securities and the Indenture conform as to legal matters
in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. The Company had at the date
indicated in the Prospectus a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization." All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.
(i) The Company is not in violation of its charter or by-laws,
and none of the Significant Subsidiaries is in violation of its charter or
by-laws, except for any such violations which, individually and in the
aggregate, would not have a material adverse effect on the Company and its
subsidiaries taken as a whole, and except as otherwise set forth in the
Prospectus, none of the Company or any of the Significant Subsidiaries is
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties is subject,
except for such defaults that would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise. The
execution, delivery and performance by the Company of this Agreement, the
Indenture, and the Securities and the compliance by the Company with all of
its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the Company and do not and
will not result in any violation of the charter or by-laws of the Company
or any Significant Subsidiary, and do not and will not violate or conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any Significant Subsidiary under any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any Significant Subsidiary is a party or by which it is bound or
to which any of their respective properties are subject or any existing
applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Significant Subsidiary or any
of their respective properties (except for such violations, conflicts,
breaches or
9
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise).
(j) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the Securities Act, the Exchange Act, the Trust
Indenture Act and the securities or blue sky laws of the various states and
of foreign jurisdictions) is required for the valid authorization,
issuance, sale and delivery of the Securities, for the execution, delivery
or performance by the Company of this Agreement, the Indenture and the
Securities or for the consummation by the Company of the transactions
contemplated hereby or thereby, except such of the foregoing as will be
obtained prior to the Closing Date.
(k) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting, the Company or
any Significant Subsidiary or any of their respective officers, as
applicable, in their capacity as such, in which there is a reasonable
possibility of an adverse decision that would (A) result in any material
adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, (B) materially and adversely affect the
properties or assets of the Company and its subsidiaries, considered as one
enterprise or (C) adversely affect the consummation of the transactions
contemplated in this Agreement; the aggregate of all pending legal or
governmental proceedings that are not described in the Prospectus to which
the Company or any Significant Subsidiary is a party or which affect any of
their respective properties and in which there is a reasonable possibility
of an adverse decision, including ordinary routine litigation incidental to
the business of, the Company or any Significant Subsidiary, would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise; and there are no contracts or
other documents that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(l) Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company
or any of its subsidiaries for employees or former employees of the Company
and its subsidiaries has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of
10
1986, as amended, ("Code"), except where the failure to comply would not
have a material adverse effect on the Company and its subsidiaries
considered as one enterprise. No prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975 of the Code has occurred with
respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption, except where such prohibited
transaction would not have a material adverse effect on the Company and its
subsidiaries taken as one enterprise. For each such plan which is subject
to the funding rules of Section 412 of the Code or Section 302 of ERISA no
"accumulated funding deficiency" as defined in Section 412 of the Code has
been incurred, whether or not waived, except where the "accumulated funding
deficiency" has been waived by the Internal Revenue Service, and the
deficiency would not have a material effect on the Company and its
subsidiaries considered as one enterprise. The fair market value of the
assets of each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions as of the date of the most recent actuarial valuation of the
plan, except where the failure to have assets with a fair market value in
excess of the present value of accrued benefits would not have a material
effect on the Company and its subsidiaries considered as one enterprise
(including the creation of a material risk of involuntary termination of
the plan by the Pension Benefit Guaranty Corporation or imposition of a
lien on the assets of the Company). There is no reasonable likelihood that
the Company or any of its subsidiaries could incur liability under Title IV
of ERISA or suffer the imposition of one or more liens under ERISA or the
Code with respect to any such plan or other employee benefit plan, except
as otherwise disclosed in or contemplated by the Prospectus and except for
such liability or lien which would not have a material adverse effect on
the Company and its subsidiaries considered as one enterprise. With respect
to any employee benefit plan that is a multiemployer plan as defined in
Section 3(37) of ERISA, or another plan not sponsored by the Company, the
representations in this paragraph (l) are made to the best knowledge and
belief of the Company.
(m) The Company has no knowledge of any actionable violation by
the Company or any of its subsidiaries of any federal, state or local law
relating to employment and employment practices, discrimination in the
hiring, promotion or pay of employees, or any applicable wage or hour laws,
which, individually or in the aggregate, would result in a material adverse
effect on the Company and its subsidiaries, considered as one enterprise.
There is (A) no material unfair labor practice complaint pending or, to the
knowledge of the Company, threatened against the Company before the
National Labor Relations Board or any state or local labor relations board,
nor are any material grievance or arbitration proceedings arising under any
collective bargaining agreement
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pending or, to the knowledge of the Company, threatened against the
Company, (B) no labor strike, dispute, slowdown or stoppage ("Labor
Dispute") in which the Company is involved, nor, to the knowledge of the
Company, is any Labor Dispute imminent, other than routine disciplinary and
grievance matters, and (C) except as disclosed in or contemplated by the
Prospectus, no question concerning union representation within the meaning
of the National Labor Relations Act existing with respect to the employees
of the Company and, to the knowledge of the Company, no union organizing
activities are taking place by employees of the Company or any of its
subsidiaries, which, with respect to any matter specified in clauses (A),
(B) or (C) above, whether considered singly or in the aggregate, would have
a material adverse effect on the Company and its subsidiaries, considered
as one enterprise.
(n) Arthur Andersen LLP, which reported upon the audited
financial statements and related notes included in the Prospectus, is an
independent public accountant with respect to the Company in accordance
with the provisions of the Securities Act and the rules and regulations of
the Commission thereunder.
(o) The financial statements, together with the related notes and
schedules thereto, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) present fairly the consolidated financial position, results of
operations and cash flow of the Company and its subsidiaries on the basis
stated in the Registration Statement and the Prospectus at the respective
dates and for the respective periods to which they apply; such statements
and related notes and schedules thereto have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), in all material respects, present fairly the information
purported to be shown thereby at the respective dates or for the respective
periods to which they apply and, to the extent that such information is set
forth in or has been derived from the financial statements and accounting
books and records of the Company, have been prepared on a basis consistent
with such financial statements and the books and records of the Company.
(p) Since the respective dates as of which information is given
in the Prospectus, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise,
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whether or not arising in the ordinary course of business, (B) any
transaction or agreement entered into by the Company, whether or not
arising in the ordinary course of business, that is material to the Company
and its subsidiaries, considered as one enterprise, (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, except for regular periodic dividends on its capital stock
or on the preferred securities of its subsidiary trust, or (D) any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries, except for the issuance of Common Stock upon the conversion
of the Company's Series B Cumulative Convertible Preferred Stock or upon
conversion of the preferred securities of the Company's subsidiary trust,
the issuance of capital stock, options and other securities under existing
officer, director or employee benefit plans or upon the exercise of options
issued under existing or prior officer, director or employee benefit plans,
the purchase by the Company or any of its subsidiaries of the Company's
common stock in connection with its Thrift and Stock Plan in accordance
with past practice, and except for changes in long-term debt in the
ordinary course of business.
(q) The Company and the Significant Subsidiaries each owns,
possesses or has obtained all governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations necessary to own or
lease, as the case may be, and to operate its properties and to carry on
its business as presently conducted, and the Company has not received any
notice of proceedings relating to revocation or modification of any such
licenses, permits, certificates, consents, orders, approvals or
authorizations, except in each case for such licenses, permits,
certificates, consents, orders, approvals and other authorizations or
revocations or modifications thereof which would not have a material
adverse effect on the Company and its subsidiaries considered as one
enterprise. Each of the Company and the Significant Subsidiaries is in
compliance with all laws and regulations relating to the conduct of its
business as conducted as of the date of the Prospectus, except where the
failure to be in compliance would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
(r) The Company is not and, after giving effect to the offering
and the sale of the Securities, will not be an "investment company" or a
company controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(s) Except as would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, considered as
one enterprise, or otherwise require disclosure in the Registration
Statement, and except as otherwise set forth in or contemplated by the
Prospectus, (i) none of the Company or any of its
13
subsidiaries is in violation of any federal, state or local laws and
regulations relating to pollution or protection of human health or the
environment, including, without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of toxic or
hazardous substances, materials or wastes, or petroleum and petroleum
products ("Materials of Environmental Concern"), or otherwise relating to
the protection of human health and safety, or the use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with, or lack of, any permits or other
environmental authorizations, and (ii) (A) none of the Company or any of
its subsidiaries has received any communication (written or oral), whether
from a governmental authority or otherwise, alleging any such violation or
noncompliance, and there are no circumstances, either past, present or that
are reasonably foreseeable, that could reasonably be expected to lead to
any such violation in the future, (B) there is no pending or, to the
knowledge of the Company, threatened claim, action, investigation or notice
(written or oral) by any person or entity alleging potential liability for
investigatory, cleanup, or governmental response costs, or natural
resources or property damages, or personal injuries, attorney's fees or
penalties relating to (x) the presence, or release into the environment, of
any Materials of Environmental Concern at any location owned or operated by
the Company or any of its subsidiaries now or in the past, or (y)
circumstances forming the basis of any violation or potential violation, of
any Environmental Law (collectively, "Environmental Claims"), and (C) there
are no past or present actions, activities, circumstances, conditions,
events or incidents that could form the basis of any Environmental Claim
against the Company or any of its subsidiaries or against any person or
entity for whose acts or omissions the Company or any of its subsidiaries
is or may reasonably be expected to be liable, either contractually or by
operation of law. In the ordinary course of business, the Company and/or
certain of its subsidiaries, as appropriate, have conducted environmental
investigations of, and have reviewed reasonably available information
regarding, the business, properties and operations of the Company and its
subsidiaries, and of other properties within the vicinity of their
business, properties and operations, as appropriate for the circumstances
of each such property and operation; on the basis of such reviews and
investigations, the Company has reasonably concluded that, except as
disclosed or contemplated by the Prospectus, any costs and liabilities
associated with such matters would not have, singly or in the aggregate, a
material adverse effect on the Company and its subsidiaries, considered as
one enterprise, or otherwise require disclosure in the Registration
Statement.
(t) No person has the right to require the Company to register
any securities for offering and sale under the Securities Act by reason of
the filing of the Registration Statement with the Commission or the issue
and sale of the Securities.
14
(u) The Company and each of the Significant Subsidiaries have
timely filed (or have had timely filed on their behalf) all material Tax
returns required by applicable law to be filed by them prior to the date
hereof (taking into account any properly granted extensions of time to file
any Tax returns), and all such Tax returns are true, complete, and correct
in all material respects. Except as otherwise stated or described in the
Prospectus, the Company and each of the Significant Subsidiaries have paid
(or have had paid on their behalf) all material Taxes (as defined below)
due or claimed to be due from the Company, other than those (i) currently
payable without penalty or interest or (ii) being contested in good faith
and by appropriate proceedings. Other than Tax items relating to proposed
assessments or Audits (as defined below) which have been disclosed to
counsel for the Underwriters or which are set forth or described in the
Prospectus, there are no other Tax items that are currently under
examination by any Tax Authority (as defined below) or, to the best
knowledge of the Company, that could result in a proposed deficiency if
examined by a Tax Authority in respect of which there is a reasonable
possibility of a determination that would be adverse to the Company and
that would have a material adverse effect on the Company and its
subsidiaries considered as one enterprise.
For purposes of this paragraph 6(u):
"Taxes" shall mean all federal, state, local and foreign taxes,
-----
and other assessments of a similar nature, whether imposed directly or
through withholding, including any interest, additions to tax or penalties
applicable thereto.
"Audit" shall mean any audit, assessment of Taxes, other
-----
examination by any tax authority, proceeding or appeal of such proceeding
relating to Taxes.
"Tax Authority" means the Internal Revenue Service and any other
-------------
domestic or foreign governmental authority responsible for the
administration of any Taxes.
(v) None of the Company or any of the Significant Subsidiaries
has taken or will take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities.
(w) Any certificate signed by any officer of the Company and
delivered to you or your counsel on or after the date of this Agreement
shall be deemed a representation and warranty by the Company to you as to
the matters covered thereby.
15
(x) The United States Postal Service ("USPS") Agreement (the
"Priority Mail Contract"), dated April 23, 1997, has been duly authorized,
executed and delivered by EWA and is a valid and binding agreement of EWA
which is in full force and effect.
(y) Immediately after any sale of Securities by the Company
hereunder, the aggregate amount of Securities which have been issued and
sold by the Company hereunder and of any securities of the Company (other
than the Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of securities registered
under the Registration Statement.
(z) The Company meets the requirements for registering an
offering of securities with the Commission on registration statement Form
S-3 pursuant to the standard for that form immediately prior to October 21,
1992.
7. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
(including, without limitation, but subject to paragraph (b) below, the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) and judgments (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any preliminary prospectus, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished in writing to the Company
by or on behalf of any Underwriter through J.P. Morgan Securities Inc. expressly
for use therein; provided, however, that the foregoing indemnity agreement with
-------- -------
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or judgments purchased Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages, liabilities or judgments.
16
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company, such
Underwriter shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
Any Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the Company has
failed within a reasonable time to retain counsel reasonably satisfactory to
such Underwriter or such controlling person or (iii) the named parties to any
such action (including any impleaded parties) include both such Underwriter or
such controlling person and the Company and such Underwriter or such controlling
person shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to one firm of local
counsel) for all such Underwriters and controlling persons, which firm shall be
designated in writing by J.P. Morgan Securities Inc. and that all such fees and
expenses shall be reimbursed as they are incurred). The Company shall not be
liable for any settlement of any such action effected without the written
consent of the Company but if settled with the written consent of the Company,
the Company agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 Business Days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, such
indemnifying party shall not be liable for any settlement effected without its
written consent if such
17
indemnifying party (x) reimburses such indemnified party in accordance with such
request to the extent that the indemnifying party in its judgment considers such
request to be reasonable and (y) provides written notice to the indemnified
party stating that reason it deems the unpaid balance unreasonable, in each case
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, in each
such case to the same extent as the foregoing indemnity from the Company to each
Underwriter but only with reference to information furnished in writing by or on
behalf of such Underwriter through J.P. Morgan Securities Inc. expressly for use
in the Registration Statement, the Prospectus, any preliminary prospectus or any
amendment or supplement thereto. In case any action shall be brought against the
Company, any of its directors, any officer of the Company who signed the
Registration Statement or any person controlling the Company based on the
Registration Statement, the Prospectus or any preliminary prospectus or any
amendment or supplement thereto and in respect of which indemnity may be sought
against any Underwriter, the Underwriter shall have the rights and duties given
to the Company (except that if the Company shall have assumed the defense
thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any officers of the Company who signed the Registration
Statement and any person controlling the Company shall have the rights and
duties given to such Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses,
18
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same respective proportions as the total proceeds from the offering received by
the Company (before deducting expenses but after deducting the total
underwriting discounts and the commissions received by the Underwriters), and
the total underwriting discounts and the commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus, bear to the total price to the public of the Securities. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
---
rata allocation (even if the Underwriters were treated as one entity for such
- ----
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective aggregate principal amount of Securities purchased by each of the
Underwriters hereunder and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
19
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Securities under this Agreement on the
Closing Date are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Underwriters;
(c) Subsequent to the date of this Agreement and prior to the Closing
Date there shall not have been any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the
rating accorded to any of the Company's securities or the securities of CNF
Trust I, a statutory business trust created under the Business Trust Act of the
State of Delaware, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(d) On the Closing Date the Securities shall have a rating of at
least Baa3 from Moody's Investors Service, Inc. and at least BBB from Standard &
Poor's Corporation as evidenced in a writing from such rating agencies or by
other evidence satisfactory to the Underwriters.
(e) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Prospectus, except as otherwise set forth in or
contemplated by the Prospectus, there shall not have been any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the condition, financial or otherwise, or in the earnings, affairs
or business prospects, whether or not arising in the ordinary course of
business, of the Company and its subsidiaries, taken as a whole, from that
described in the Prospectus,
20
(ii) since the date of the latest balance sheet included or incorporated by
reference in the Prospectus there shall not have been any material adverse
change, or any development involving a prospective material adverse change, in
the capital stock or in the long-term debt of the Company from that set forth in
the Prospectus, (iii) the Company shall have no liability or obligation, direct
or contingent, which is material to the Company and its subsidiaries, taken as a
whole, other than those reflected in or contemplated by the Prospectus, (iv)
since the date of the latest balance sheet included or incorporated by reference
in the Prospectus, the Company has not sustained any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and (v) on the Closing Date, you shall have
received a certificate dated the Closing Date, signed on behalf of the Company
by the Chief Executive Officer, Chief Financial Officer, Treasurer, or any Vice
President of the Company, confirming the matters set forth in paragraphs (a),
(b), (c) and (d) of this Section 8 (except that such certification may be made
to the knowledge of the Company with respect to proceedings threatened by the
Commission and such certification need not cover the last clause of paragraph
(b) of Section 8).
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Eberhard G.H. Schmoller, General Counsel for the Company, to the effect that:
(i) the Company and each of the Significant Subsidiaries has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction (other than jurisdictions
outside of the United States of America) of incorporation and has the
corporate power and corporate authority to conduct its business and to own,
lease and operate its properties as described in the Prospectus;
(ii) the Company and each of the Significant Subsidiaries is
duly qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction (other than jurisdictions outside of
the United States of America) in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) except as set forth in the Prospectus, all of the
outstanding shares of capital stock of the Significant Subsidiaries have
been duly authorized and are owned of record by the Company (except for
directors qualifying shares), free and clear, to the knowledge of such
counsel, of any pledge, lien, security interest, charge, claim, equity or
21
encumbrance of any kind (except for restrictions on transfer arising under
federal or state securities or blue sky laws);
(iv) to the knowledge of such counsel, the Company is not in
violation of its charter or by-laws and none of the Significant
Subsidiaries is in violation of its charter or by-laws, except for any such
violations which would not have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(v) the execution, delivery and performance of this Agreement
and the Indenture by the Company, the compliance by the Company with its
obligations hereunder and thereunder, the issuance of the Securities and
the consummation of the transactions contemplated hereby and thereby do
not, to the knowledge of such counsel, require any consent, approval,
authorization, license or other order of any United States federal court
sitting in the State of California, any California state court or any
United States federal or California state regulatory body, administrative
agency or other governmental body under Applicable Laws (as defined below)
(except such as may be required under the Securities Act, the Exchange Act,
the Trust Indenture Act or other securities or Blue Sky laws) and do not
conflict with or constitute a breach of any of the terms or provisions of,
or a violation or a default under, the charter or by-laws of the Company or
any of the Significant Subsidiaries or, to the knowledge of such counsel,
any bond, debenture, note, indenture, mortgage, deed of trust, loan
agreement or any other agreement or other instrument to which the Company
or any of the Significant Subsidiaries is a party or by which the Company
or any of the Significant Subsidiaries or their respective properties are
bound that is material to the Company and its subsidiaries, taken as a
whole, or, to the knowledge of such counsel, violate or conflict with any
United States federal or California state laws or administrative
regulations or any rulings or decrees of any United States federal court
sitting in the State of California or any California state court, in each
case which are applicable to the Company or any of the Significant
Subsidiaries or their respective properties, except in any such case for
such conflicts, breaches, violations or defaults which would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole. Such counsel may state that, for purposes of such opinion, the term
"Applicable Laws" means those state laws of the State of California,
federal laws of the United States of America and portions of the Delaware
General Corporation Law (the "DGCL") which, in such counsel's experience,
are normally applicable to transactions of the type contemplated by this
Agreement (provided that the term "Applicable Laws" shall not include
United States federal or state securities or blue sky laws or the rules and
regulations thereunder, the Trust Indenture Act or the rules and
regulations of the Commission thereunder, the Investment Company Act of
1940, as amended, or the rules and regulations thereunder (collectively,
the "1940 Act"), any antifraud laws or any law,
22
rule or regulation that may have become applicable as a result of any
Underwriter's involvement with the transactions contemplated by this
Agreement or because of any facts specifically pertaining to any
Underwriter), but without such counsel having made any special
investigation concerning the applicability of any other law, rule or
regulation;
(vi) other than as set forth or contemplated in the Prospectus,
to such counsel's knowledge, there are no legal or governmental
investigations, actions, suits or proceedings (other than any legislative
proceedings) pending or threatened against the Company or any of the
Significant Subsidiaries or any of their respective properties or to which
the Company or any of the Significant Subsidiaries is or may be a party or
to which any property of the Company or any of the Significant Subsidiaries
is or may be the subject in which there is a reasonable possibility of a
determination adverse to the Company or any of the Significant Subsidiaries
that would have, individually or in the aggregate, a material adverse
effect on, the Company and its subsidiaries taken as a whole;
(vii) to the knowledge of such counsel, each of the Company and
the Significant Subsidiaries owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all United States
federal and California state governmental authorities necessary to own or
lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except where the failure
to own, possess or obtain any such license, permit, certificate, consent,
order, approval or authorization or to make any such declaration or filing
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole, and to the knowledge of such counsel,
neither the Company nor any of the Significant Subsidiaries has received
any actual notice of any proceeding relating to revocation or modification
of any such license, permit, certificate, consent, order, approval or other
authorization, except as described in or contemplated by the Registration
Statement or the Prospectus and except where the revocation or modification
thereof would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and
(viii) the documents incorporated by reference in the Prospectus
or any further amendments or supplements thereto made by the Company prior
to the Closing Date (other than the financial statements and schedules and
other financial and statistical data included or incorporated by reference
therein or omitted therefrom, and other than the exhibits thereto, as to
which such counsel need express no opinion) when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act.
23
Eberhard G.H. Schmoller shall further state that he or the Company's
legal department under his supervision have participated in conferences with
officers and other representatives of the Company, and representatives of the
independent public accountants for the Company and your representatives and
counsel, at which conferences the contents of the Registration Statement, the
Prospectus and related matters were discussed and although such counsel has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements included or
incorporated by reference in the Registration Statement, the Prospectus or the
documents incorporated or deemed to be incorporated by reference therein and has
made no independent check or verification thereof, no facts have come to such
counsel's attention which have led him to believe that the Registration
Statement (other than (a) financial statements and schedules and other financial
or statistical data included or incorporated by reference in or omitted from (i)
the Registration Statement or (ii) the documents incorporated or deemed to be
incorporated by reference therein and (b) any Form T-1, as to which no statement
need be made) at its effective date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or the Prospectus
(other than financial statements and schedules and other financial or
statistical data included or incorporated by reference in or omitted from (i)
the Prospectus or (ii) the documents incorporated or deemed to be incorporated
by reference therein, as to which no statement need be made), as of the date of
the Prospectus Supplement or the Closing Date, included any untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. Such counsel may further state that such opinion is
limited to matters arising under the federal laws of the United States of
America, the laws of the State of California and the DGCL, and such counsel
expresses no opinion as to the laws of any other jurisdiction or, in the case of
Delaware, any other Delaware laws, or as to the municipal laws or the laws of
any other local agencies or governmental authorities within the State of
California or any matters arising thereunder or relating thereto. Such counsel
may further state that any opinions as to good standing or due qualification of
the Company or any of its subsidiaries are based solely upon good standing and
other similar certificates of public officials. Such counsel may further state
that, insofar as such opinion concerns any bond, debenture, note, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
referred to in clause (v) above or this Agreement, the Indenture, or the
Securities (collectively, "Relevant Agreements"), such counsel has assumed that
such Relevant Agreements are governed by and construed in accordance with the
internal laws of the State of California.
In rendering his opinions above, Mr. Schmoller may rely as to factual
matters on such certificates of the Company's officers, or of governmental
officials as he may deem relevant or necessary for such opinions and as to
matters governed by other than federal or California law or by the DGCL on
opinions of local counsel.
24
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Brown & Wood LLP, counsel for the Company, to the effect that:
(i) the Securities have been duly authorized by all necessary
corporate action on the part of the Company and (assuming the due
authorization, execution and delivery of the Indenture by the Trustee
thereunder), when executed and attested by duly authorized officers of the
Company under its corporate seal, authenticated, issued and delivered, all
in accordance with the provisions of the Indenture, and delivered to and
paid for by the Underwriters as set forth in this Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency reorganization,
moratorium, arrangement, fraudulent conveyance, fraudulent transfer or
other similar laws relating to or affecting creditors' rights generally and
to general equitable principles (regardless of whether considered in a
proceeding in equity or at law), including concepts of commercial
reasonableness, good faith and fair dealing and the possible unavailability
of specific performance or injunctive relief;
(ii) this Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company, and (assuming the due authorization, execution
and delivery of the Indenture by the Trustee) the Indenture is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent
transfer or other similar laws relating to or affecting creditors' rights
generally and to general equitable principles (regardless of whether
considered in a proceeding in equity or at law), including concepts of
commercial reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, and except
that no opinion need be expressed regarding Section 606 of the Indenture
and except as rights to indemnity and contribution may be limited by
applicable law or public policy;
(iv) the Registration Statement has become effective under the
Securities Act (assuming compliance with clause (2) of Rule 462(b) in the
case of any Additional Registration Statement) and, to the best of such
counsel's knowledge, no stop
25
order suspending its effectiveness has been issued and no proceedings for
that purpose are pending before or threatened by the Commission;
(v) the statements under the captions "Description of Debt
Securities" (except for statements under such caption which have been
superseded by statements in the Prospectus Supplement and other than the
statements under the subcaption "-Global Securities") and "Description of
the Notes" (other than the statements under the subcaption "- Book-Entry,
Delivery and Form"), in the Prospectus, insofar as such statements
constitute a summary of certain provisions of the Indenture or the
Securities, accurately summarize such provisions in all material respects;
and
(vi) To such counsel's knowledge, no consent, approval,
authorization or other order of any federal regulatory body, federal
administrative agency or other federal governmental body of the United
States of America or any state regulatory body, state administrative agency
or other state governmental body of the States of California or New York is
legally required under Applicable Laws for the issuance and sale of the
Securities to the Underwriters as contemplated by this Agreement or the
public offering of the Securities contemplated by the Prospectus. Such
counsel may state that, for purposes of such opinion, the term "Applicable
Laws" means those state laws of the State of California and the State of
New York, federal laws of the United States of America and portions of the
DGCL which, in the experience of such counsel, are normally applicable to
transactions of the type contemplated by the Underwriting Agreement
(provided that the term "Applicable Laws" shall not include federal or
state securities or blue sky laws or any rules or regulations thereunder,
the Trust Indenture Act or the rules and regulations of the Commission
thereunder, the 1940 Act or the rules or regulations of the Commission
thereunder, any antifraud laws, any law or regulation relating to
transportation, aviation or similar matters, or any law, rule or regulation
that may have become applicable as a result of any Underwriter's
involvement with the transactions contemplated by this Agreement or because
of any facts specifically pertaining to any Underwriter).
Brown & Wood LLP shall further state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company
and your representatives and counsel, at which conferences the contents of the
Registration Statement, Prospectus and related matters were discussed, and
although such counsel has not independently verified and is not passing upon and
assumes no responsibility for the accuracy, completeness or fairness of the
statements included or incorporated by reference in the Registration Statement,
the Prospectus or the documents incorporated or deemed to be incorporated by
reference therein and has made no independent check or verification thereof (A)
such counsel is of the opinion that the Registration Statement,
26
as amended if applicable (except for financial statements and schedules and
other financial or statistical data included or incorporated by reference
therein or omitted therefrom, the documents incorporated or deemed to be
incorporated by reference therein and the exhibits thereto, including any Form
T-1, as to which no opinion need be expressed) at the time it was declared
effective, complied as to form in all material respects with the applicable
requirements of the Securities Act and (B) no facts have come to such counsel's
attention which have led them to believe that the Registration Statement (other
than financial statements and schedules and other financial or statistical data
included or incorporated by reference in or omitted from the Registration
Statement or the documents incorporated or deemed to be incorporated by
reference therein and the exhibits thereto including any Form T-1, as to which
no statement need be made) at its effective date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or the
Prospectus (other than financial statements and schedules and other financial or
statistical data included or incorporated by reference in or omitted from the
Prospectus or the documents incorporated or deemed to be incorporated by
reference therein, as to which no statement need be made), as of the date of the
Prospectus Supplement or the Closing Date, included any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such counsel may further state that any opinions as to
good standing or due qualification of the Company or any of its subsidiaries are
based solely upon good standing and other similar certificates of public
officials. Such counsel may further state that such opinion is limited to
matters arising under the federal laws of the United States of America, the laws
of the States of California and New York and the DGCL, and such counsel
expresses no opinion as to the laws of any other jurisdiction or, in the case of
Delaware, any other Delaware laws, or as to the municipal laws or the laws of
any other local agencies or governmental authorities within the States of
California and New York or any matters arising thereunder or relating thereto.
In rendering their opinions above, Brown & Wood LLP may rely as to
factual matters on such certificates of the Company's officers or of
governmental officials as they may deem relevant or necessary for such opinions
and as to matters governed by other than federal or California or New York law
or by the DGCL on opinions of local counsel.
(h) The Underwriters shall have received on and as of the Closing
Date an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the
Underwriters, with respect to the due authorization and valid issuance of the
Securities, the Registration Statement, the Prospectus and other related matters
as the Underwriters may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters.
27
In addition, Skadden, Arps, Slate, Meagher and Flom LLP, will make a
statement to the effect that such counsel has participated in conferences with
officers and other representatives of the Company and representatives of the
independent public accountants for the Company, at which conferences the
contents of the Registration Statement, Prospectus and related matters were
discussed, and, although such counsel has not independently verified and is not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, except as
specified, no facts have come to such counsel's attention which lead such
counsel to believe that the Registration Statement (other than any financial
statements or other financial or statistical information therein and that part
of the Registration Statement that constitutes the Form T-1 as to which no
opinion is expressed) at its effective date contained any untrue statement or a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein not misleading, or
that the Prospectus as of its date or the Closing Date (other than any financial
statements or other financial or statistical information therein as to which no
opinion is expressed), contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(i) You shall have received a letter on and as of the date of this
Agreement, in form and substance satisfactory to you, from Arthur Andersen LLP
independent public accountants, with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus, and you shall have received a letter on and as of the Closing Date
in form and substance satisfactory to you, from Arthur Andersen LLP, confirming
the letter delivered on the date of this Agreement.
(j) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company at or prior to the Closing Date.
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Prospectus, any material adverse change or development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, affairs, or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of
business, which
28
would, in your judgment, make it impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or material change in economic conditions, if the effect of such outbreak,
escalation, calamity, crisis or change on the financial markets of the United
States or elsewhere would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (iii)
the suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market System
or limitation on prices for securities on any such exchange or NASDAQ National
Market System, (iv) trading of any securities of the Company shall have been
suspended on any exchange, (v) the declaration of a banking moratorium by
either federal, California or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your judgment has a material adverse effect
on the financial markets in the United States and would, in your judgment, make
it impracticable to market the Securities on the terms and in the manner
contemplated by the Prospectus.
If on the Closing Date, any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased by all Underwriters on such date,
each non-defaulting Underwriter shall be obligated severally, in the proportion
which the aggregate principal amount of Securities set forth opposite its name
in Schedule I bears to the aggregate principal amount of Securities which all
the non-defaulting Underwriters have agreed to purchase, or in such other
proportion as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the aggregate principal
--------
amount of Securities which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such aggregate principal amount of Securities without the
written consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
Company for purchase of such Securities are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any non-
defaulting Underwriter and the Company. In any such case which does not result
in termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other docu-
29
ments or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of any such Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to CNF
Transportation Inc., 3240 Hillview Avenue, Palo Alto, CA 94304, Attention:
General Counsel and (b) if to any Underwriter or to you, to you c/o J.P. Morgan
Securities Inc., 60 Wall Street, New York, New York 10260, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and of the several Underwriters
set forth in or made pursuant to this Agreement shall remain operative and in
full force and effect, and will survive delivery of and payment for the
Securities, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter or by or on behalf of the
Company, the officers or directors of the Company or any controlling person of
the Company, (ii) acceptance of the Securities and payment for them hereunder
and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the several Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of the Company, the Underwriters, any controlling persons
referred to herein, the officers and directors referred to in Section 7 hereof
and their respective successors, assigns, heirs and legal representatives, and
shall be binding upon the Company and the Underwriters and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
30
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
31
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
CNF TRANSPORTATION INC.
By /s/ Chutta Ratnathicam
---------------------------------
Name: Chutta Ratnathicam
Title: Senior Vice President and
Chief Financial Officer
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
ABN AMRO INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
By: J.P. Morgan Securities Inc.
By /s/ Raymond Schmitt
-------------------------------
Name: Raymond Schmitt
Title: Vice President
SCHEDULE I
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Principal Amount of
Underwriters Securities to be Purchased
- ------------ --------------------------
J.P. Morgan Securities Inc............... $ 70,000,000
Salomon Smith Barney Inc................. $ 70,000,000
ABN AMRO Incorporated.................... $ 30,000,000
Credit Suisse First Boston Corporation... $ 30,000,000
============
Total........... $200,000,000