FORM OF
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
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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
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TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT ("Agreement") dated as of
__________ __, 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, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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:
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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.
(c) In addition, each party shall provide to the other all
information (including, without limitation, discount account numbers)
necessary for the other party to (i) make purchases on its own account and
(ii) where applicable, receive the discounts formerly available under the
agreements identified on Exhibit B hereto (except to the extent that (A) the
other party thereto shall object and (B) any such agreement does not permit),
until such time as those agreements expire or are replaced or this Agreement
expires, but in no event later than the third anniversary of the date hereof.
Recipient shall indemnify and hold harmless Provider against all Losses and
Liabilities (as defined in that certain Distribution Agreement by and between
CFI and Recipient (the "Distribution Agreement")) incurred by Provider and
arising from false or misleading information provided by Recipient, such
indemnification to be provided in a like manner to the provision of
indemnification under the Distribution Agreement.
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
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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 may be requested in
writing. With respect to post-Distribution occurrences for which Provider is
to perform Services as set forth in numbers 23, 24, 25, 26, 30 and 37 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.
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 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. 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
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 by
Recipient. Notwithstanding anything to the contrary hereunder, this Section
shall not apply to the agreement of Recipient and Provider's parent company
as provided in Section 3.1(g) of the Distribution Agreement.
(b) The provision of Services by Provider shall include all
costs, including but not limited to, personnel (including fringe benefits and
management fees
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relating thereto), computer hardware, computer time, printers, voice and data
telecommunications equipment, file cabinets, paper files, administrative
records, photocopies, incidental costs 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; PROVIDED, that 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 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). 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, Provider shall so modify the Services (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
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continuing business, and (iii) at Recipient's sole cost and expense subject
to Recipient's approval of Provider's estimate. Recipient shall have
exclusive ownership rights to any software changes or additions it pays for.
(e) Provider shall provide all support and assistance reasonably
requested by Recipient, at an arm's-length, negotiated price, but no more
than a commercially reasonable 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 without interrupting the operations of Provider or its
affiliates, all data and programs proprietary to 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 copies of all material licensed pursuant to
Section 3.1(f) 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
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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, 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
every 6 months (such adjustment to be determined on a basis consistent with
the historical prices for such Services), except that the Service Fees for
the first 12-month period shall be as indicated on Exhibit A and Provider
shall, not less than six months before any proposed increase in Service Fees,
provide Recipient with details of any proposed increase 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.
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: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇. 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 receipt of any invoice.
(b) Notwithstanding any other provision hereof, (i)
Recipient shall reimburse Provider for each
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payroll paid by Provider to the employees of the Recipient for the period
contemplated above, and (ii) Recipient shall provide each such reimbursement
by wire transfer of immediately available funds on the day prior to the
issuance of that payroll to such employees. For purposes of this Agreement,
"payroll" shall mean gross payroll (including all taxes) less deductions from
payroll which are paid directly by the Recipient, as set forth on Schedule
2.2(b).
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.
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(b) Notwithstanding anything to the contrary in this
Agreement, the provisions of Articles 5 and 6 and Sections 1.1(c), 1.4(a),
1.6, 2.1, 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 identified as numbers _____ on
Exhibit A 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
8
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 contin-
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ue 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;
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(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.
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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.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Controller
Fax No.:
with a copy to:
Consolidated Freightways, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Recipient to:
Consolidated Freightways Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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.
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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
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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
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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, its
sole remedy shall be termination of all or a part of the Services without
right to seek actual, compensatory or consequential damages.
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
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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.
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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: _________________________
Name:
Title:
CONSOLIDATED FREIGHTWAYS
CORPORATION
on behalf of itself and its
wholly owned subsidiaries
By: ________________________
Name:
Title:
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