Exhibit  10.2







                    PARTICIPATION AGREEMENT


                 Dated as of September 30, 1994


                       Entered Into Among


       CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE,
                 CON-WAY CENTRAL EXPRESS, INC.,
                   CON-WAY INTERMODAL, INC.,
                CON-WAY SOUTHERN EXPRESS, INC.,
                CON-WAY SOUTHWEST EXPRESS, INC.,
            CON-WAY TRANSPORTATION SERVICES, INC.,
                 CON-WAY WESTERN EXPRESS, INC.,
                          as Lessees,


          CONSOLIDATED FREIGHTWAYS, INC., as Guarantor
                 and as Lessees' Representative


               BA LEASING & CAPITAL CORPORATION,
             not individually, except as expressly
                 set forth herein, but as Agent


                              and

                     The Lessors Listed on
                       Schedule I Hereto
                       TABLE OF CONTENTS

                                                             Page

ARTICLE I

DEFINITIONS                                                     1

ARTICLE II

                 PURCHASE AND LEASE OF VEHICLES                 2
                   Section 2.1  Fundings; Payment of
                   Purchase Price                               2
                   Section 2.2  Application of Funds; Sale
                   and Lease of Vehicles                        3
                   Section 2.3  Time and Place of Delivery
                   Dates                                        4
                   Section 2.4  Postponement of Delivery
                   Date                                         4
                   Section 2.5  Non-Utilization Fee             5

ARTICLE III
              CONDITIONS TO DELIVERY DATE CLOSINGS              5
                   Section 3.1  Delivery Date Notice;
                   Invoices                                     5
                   Section 3.2  Appraisal                       6
                   Section 3.3  Participation Agreement         7
                   Section 3.4  Lease                           7
                   Section 3.5  Lease Supplements               7
                   Section 3.6  Guarantee                       8
                   Section 3.7  Financing Statements            8
                   Section 3.8  Certificates of Title           8
                   Section 3.9  Transaction Costs; Fees         8
                   Section 3.10  Opinions of Counsel            8
                   Section 3.11  Corporate Status and
                   Proceedings                                  9
                   Section 3.12  Consents and Approvals         9
                   Section 3.13  Payment of Impositions         9
                   Section 3.14  Search Reports                 9
                   Section 3.15  Collateral Agency              9
                   Section 3.16  Insurance                     10
                   Section 3.17  Proceedings Satisfactory,
                   Etc.                                        10
                   Section 3.18  Absence of Material Adverse
                   Effect                                      10
                   Section 3.19  Representations and
                   Warranties True; Absence of Defaults        10

ARTICLE IV
                       GENERAL PROVISIONS                      10
                   Section 4.1  Nature of Transaction          10
                   Section 4.2  Waiver                         11
                   Section 4.3  Replacements                   11
                   Section 4.4  Nature of Lessees'
                   Obligations                                 11
                   Section 4.5  Guarantor as Lessees'
                   Representative                              12

ARTICLE V
                 REPRESENTATIONS AND WARRANTIES                13
                   Section 5.1  Representations and
                   Warranties of Lessees and Guarantor         13
                   Section 5.2  Representations and
                   Warranties of Lessors                       19
                   Section 5.3  Representations and
                   Warranties of Agent                         19

ARTICLE VI
                           COVENANTS                           21
                   Section 6.1  Covenants of Lessees           21
                   Section 6.2  Covenants of Guarantor         25
                   Section 6.3  Covenants of Agent and
                   Lessors                                     29

ARTICLE VII
                      GENERAL INDEMNITIES                      29
                   Section 7.1  Indemnity                      29
                   Section 7.2  Excessive Use Indemnity        31
                   Section 7.3  Increased Capital Costs        31
                   Section 7.4  LIBO Rate Unlawful             31
                   Section 7.5  Funding Losses                 32
                   Section 7.6  Actions of Affected Lessors    32

ARTICLE VIII
                     GENERAL TAX INDEMNITY                     33
                   Section 8.1  General Tax Indemnity          33
                   Section 8.2  Contest                        33
                   Section 8.3  Gross Up                       35
                   Section 8.4  Tax Returns                    35
                   Section 8.5  Withholding Tax Exemption      36

ARTICLE IX
                             AGENT                             37
                   Section 9.1  Appointment of Agent; Powers
                   and Authorization to Take Certain Actions   37
                   Section 9.2  Reliance                       38
                   Section 9.3  Action Upon Instructions
                   Generally                                   39
                   Section 9.4  Indemnification                39
                   Section 9.5  Independent Credit
                   Investigation                               40
                   Section 9.6  Refusal to Act                 40
                   Section 9.7  Resignation or Removal of
                   Agent; Appointment of Successor             41
                   Section 9.8  Separate Agent                 41
                   Section 9.9  Termination of Agency          42
                   Section 9.10  Compensation of Agency        42
                   Section 9.11  Limitations                   42

ARTICLE X
               AMENDMENTS TO OPERATIVE AGREEMENTS              43
                   Section 10.1  Amendments to Operative
                   Agreements With Consent of Lessors          43
                   Section 10.2  Amendments to Operative
                   Agreements Affecting Agent                  44

ARTICLE XI
                         MISCELLANEOUS                         44
                   Section 11.1  Survival of Covenants         44
                   Section 11.2  APPLICABLE LAW                44
                   Section 11.3  Distribution and
                   Application of Rents and Other Payments.    44
                   Section 11.4  Notices                       45
                   Section 11.5  Transaction Costs; Other
                   Expenses                                    45
                   Section 11.6  Counterparts                  46
                   Section 11.7  Severability                  46
                   Section 11.8  Successors and Assigns        46
                   Section 11.9  JURY TRIAL                    48
                   Section 11.10 Captions; Table of Contents   48
                   Section 11.11  FINAL AGREEMENT              48
                   Section 11.12  No Third-Party
                   Beneficiaries                               49
                   Section 11.13  Further Assurances           49
                   Section 11.14  Reproduction of Documents    49
                   Section 11.15  Consideration for Consents
                   to Waivers and Amendments                   49
                   Section 11.16  Submission to Jurisdiction   50

                 LIST OF SCHEDULES AND EXHIBITS


Schedule I        - Commitments of Lessors; Payment
                      Instructions
Schedule II       - Description of Vehicles
     Part A       -   Group A Vehicles
     Part B       -   Group B Vehicles


Schedule X        - Definitions

Exhibit A         - Form of Lease
     Schedule I   - Description of Vehicles
     Exhibit A    - Form of Group A Lease Supplement
     Exhibit B    - Form of Group B Lease Supplement
Exhibit B         - Form of Delivery Date Notice
     Schedule I   - Vehicle List and Purchase Price
Exhibit C         - Form of Lessee's and Guarantor's
                      Opinion of Counsel
Exhibit D         - Form of Officer's Certificate
Exhibit E         - Form Guarantee
Exhibit F         - Form of Investor's Letter
Exhibit G         - Form of Assumption Agreement
Exhibit H         - Form of Collateral Agency Agreement




                    PARTICIPATION AGREEMENT


     This PARTICIPATION AGREEMENT, dated as of September 30, 1994
(this "Participation Agreement"), is entered into among:  (a) Con-
Way  Central  Express,  Inc.,  a  Delaware  corporation,  Con-Way
Intermodal,  Inc.,  a  Delaware  corporation,  Con-Way   Southern
Express, Inc., a Delaware corporation, Con-Way Southwest Express,
Inc.,  a  Delaware corporation, Con-Way Transportation  Services,
Inc.,  a  Delaware corporation, Con-Way Western Express, Inc.,  a
Delaware corporation, and Consolidated Freightways Corporation of
Delaware,  a  Delaware corporation ("CFCD"), as Lessees  (each  a
"Lessee" and collectively, the "Lessees"; the Lessees other  than
CFCD  are sometimes referred to herein as the "Con-Way Lessees"),
(b)  Consolidated Freightways, Inc., a Delaware  corporation,  as
Guarantor  ("Guarantor"  or  "Lessees'  Representative",  as  the
context  may  require), (c) BA Leasing & Capital  Corporation,  a
California corporation, not in its individual capacity, except as
otherwise expressly provided herein, but solely as Agent for  the
Lessors  (the  "Agent"), and (d) the several  Lessors  listed  on
Schedule  I  hereto  (together with  their  respective  permitted
successors,   assigns  and  transferees,  each  a  "Lessor"   and
collectively the "Lessors").

      WHEREAS,  on each Delivery Date, Lessees will  transfer  to
Agent,  for  the  benefit of Lessors, and  Agent,  on  behalf  of
Lessors,  will purchase and receive from Lessees, an interest  in
certain of the Vehicles described on Schedule II hereto;

      AND  WHEREAS,  upon the transfer of the  Vehicles  on  each
Delivery  Date,  Agent,  on behalf of Lessors,  will  lease  such
Vehicles  to  Lessees and Lessees will lease such  Vehicles  from
Agent,  for the benefit of Lessors, pursuant to the terms of  the
Lease  substantially in the form of Exhibit A hereto and  one  or
more Lease Supplements, each such Lease Supplement being, in  the
case of Group A Vehicles, substantially in the form of Exhibit  A
to the Lease, and, in the case of Group B Vehicles, substantially
in the form of Exhibit B to the Lease;

      NOW  THEREFORE,  in consideration of the mutual  terms  and
conditions herein contained, the parties hereto agree as follows:


AI                                 DEFINITIONS

      Capitalized  terms used but not defined  herein  (including
those  used  in the foregoing recitals) shall have  the  meanings
specified  in  Schedule  X hereto unless  the  context  otherwise
requires,  which Schedule X shall for all purposes  constitute  a
part of this Participation Agreement.


AII                             PURCHASE AND LEASE OF VEHICLES

S1     Fundings; Payment of Purchase Price.

           (a)   Subject to the terms and conditions  hereinafter
     set  forth,  and  in  reliance on  the  representations  and
     warranties  contained herein or made pursuant  hereto,  upon
     receipt  of  each  Delivery Date Notice, each  Lessor  shall
     transfer  to Agent on the specified Delivery Date an  amount
     equal to the product of the aggregate Purchase Price of  the
     Vehicles  specified in such Delivery Date Notice, multiplied
     by  such  Lessor's Commitment Percentage (each such transfer
     being referred to herein as a "Funding").  In no event shall
     any   Lessor  be  required  to  provide  funds  under   this
     Participation  Agreement  in an aggregate  amount  exceeding
     such Lessor's Commitment.

           (b)  Remittances pursuant to this Section 2.1 shall be
     made in immediately available federal funds by wire transfer
     to  the  account of Agent set forth below (or  as  otherwise
     specified by Agent to each Lessor from time to time not less
     than  three Business Days prior to the date of the requested
     Funding)  and must be received by Agent by 11:00  a.m.,  San
     Francisco time on the applicable Delivery Date:

           (c)   If  the  Agent  determines that  any  Lessor  (a
     "Defaulting Lessor") will not make available the amount (the
     "Defaulted  Amount") which would constitute  its  Commitment
     Percentage  of  the  total Purchase Price  of  the  Vehicles
     specified  in  a Delivery Date Notice, Agent shall  promptly
     notify  each other Lessor (each, a "Non-Defaulting  Lessor")
     and specify the additional amounts required to be funded  by
     each Non-Defaulting Lessor.  Each Non-Defaulting Lessor,  as
     soon as practical after receipt of notice but not before the
     Delivery  Date, shall transfer to the Agent, in  immediately
     available funds, its pro rata share of the Defaulted Amount,
     determined  in  the same proportion that such Non-Defaulting
     Lessor's  Commitment bears to the aggregate  Commitments  of
     all  Non-Defaulting  Lessors;  provided  that  such  amount,
     together  with  all  amounts  previously  funded   by   each
     Non-Defaulting  Lessor, shall not exceed the  Non-Defaulting
     Lessor's  Commitment.   If the Defaulted  Amount  cannot  be
     fully  funded by the Non-Defaulting Lessors, Agent shall  so
     notify   the   Non-Defaulting  Lessors  and  give   to   all
     Non-Defaulting  Lessors the opportunity  to  increase  their
     respective  Commitments by notice in writing to  the  Agent;
     provided   that  should  the  aggregate  proposed  increased
     Commitments by one or more Non-Defaulting Lessors exceed the
     Defaulted  Amount, Agent shall increase the  Commitments  of
     the participating Non-Defaulting Lessors on a pro-rata basis
     in  accordance  with the respective amounts  by  which  such
     Non-Defaulting Lessors have offered to participate, it being
     understood  that  in  no event shall  the  aggregate  amount
     funded  by  any  Lessor exceed the amount of  such  Lessor's
     Commitment,  after  giving effect to any  increase  in  such
     Commitment pursuant to this sentence.

           In the event of any funding of all or a portion of the
     Defaulted   Amount  by  the  Non-Defaulting   Lessors,   the
     following  rules  shall  apply  notwithstanding  any   other
     provision in any Operative Agreement:

                     (i)     The  Commitment  of  the  Defaulting
                Lessor  shall be decreased in an amount equal  to
                the  total  aggregate increase in the Commitments
                of  the  Non-Defaulting Lessors pursuant to  this
                Section 2.1(c);

                    (ii)   A Defaulting Lessor shall be obligated
                to   fund  any  deliveries  occurring  after  its
                default   based   upon  its  revised   Commitment
                Percentage;

                    (iii) A Defaulting Lessor shall not have  the
                right  to  fund its Defaulted Amount without  the
                written  consent  of the Agent and  the  Lessees'
                Representative and then only to the  extent  such
                Defaulted  Amount  has not  been  funded  by  the
                Non-Defaulting Lessors;

                     (iv)    If  and  to  the  extent  that   the
                Defaulted   Amount   is   not   funded   by   the
                Non-Defaulting   Lessors,   Agent   may    delete
                Vehicles  from the Delivery Date Notice  so  that
                the   total   Purchase  Price  of  the   Vehicles
                specified in the Delivery Date Notice equals  the
                aggregate  revised  Fundings  for  the   Delivery
                Date; and

                    (v)    The  Defaulting Lessor  shall  not  be
                responsible   for   any   consequential   damages
                suffered   by  any  Lessee  or  any  of  Lessee's
                Affiliates  as  a  result of its  failure  to  so
                fund.

S2     Application of Funds; Sale and Lease of Vehicles.  On each
Delivery  Date, upon (a) receipt by Agent of all  amounts  to  be
paid by the Lessors pursuant to Section 2.1, and (b) satisfaction
or  waiver  of  each of the conditions set forth in Article  III,
(i)  Agent  shall  purchase, for the benefit of the  Lessors,  an
interest in the Vehicles to be acquired on such Delivery Date, as
specified in the relevant Delivery Date Notice delivered pursuant
to  Section 3.1, (ii) in consideration therefor, Agent, on behalf
of  the Lessors, shall pay, from the funds made available by  the
Lessors pursuant to Section 2.1, an amount equal to the aggregate
Purchase Price of the interest in the Vehicles being so sold  and
purchased in immediately available federal funds remitted by wire
transfer  to  the  account specified by Lessees in  the  relevant
Delivery  Date Notice, and (iii) Agent, on behalf of the Lessors,
shall  lease  to Lessees the Vehicles so purchased by  Agent  and
Lessees  shall  accept  delivery of and  lease  from  Agent  such
Vehicles  pursuant  to  the Lease.  Each  Lessor  shall  hold  an
undivided  interest  in  the  Vehicles  equal  to  such  Lessor's
Investment Percentage.

S3      Time  and  Place of Delivery Dates.  Each  Delivery  Date
Closing  shall take place on the Delivery Date set forth  in  the
relevant  Delivery  Date  Notice, commencing  at  9:00  a.m.  Los
Angeles  time,  at Mayer, Brown & Platt, 350 South Grand  Avenue,
Suite  2500,  Los  Angeles,  California  90071,  subject  to  the
following:

                     (i)   no  more than four Fundings  and  four
          Delivery Dates may occur;

                     (ii)   each  Funding and each Delivery  Date
          shall  occur  on  a Business Day on or after  the  date
          hereof  and not later than December 15, 1994, it  being
          understood  that  there  may be  a  Funding  without  a
          Delivery  Date  Closing if Lessees have  postponed  the
          Delivery Date pursuant to Section 2.4, so long as  such
          Delivery Date occurs not later than December 15, 1994;

                      (iii)   each  Funding  shall  provide   for
          financing  of  Vehicles  having an  aggregate  Purchase
          Price  which equals or exceeds, except in the  case  of
          the final Funding, $10,000,000;

                     (iv)  in no event shall the aggregate amount
          funded to CFCD exceed $17,000,000; and

                     (v)   in no event shall the aggregate amount
          advanced by the Lessors exceed the Total Commitment.

S4      Postponement  of Delivery Date.  In the  event  that  the
Lessors shall make the Funding requested pursuant to any Delivery
Date Notice and the relevant Delivery Date Closing shall not have
occurred  on  the  date specified in such Delivery  Date  Notice,
Lessees  shall pay to Agent, for the benefit of Lessors, interest
on the amount funded by each Lessor at the Assumed Interest Rate,
less  any interest earned by investing such funded amounts, which
interest  shall  be  for  the ratable  benefit  of  the  Lessors;
provided  that this provision shall not be construed  to  require
Agent  to  invest such funds in interest-bearing accounts.   Such
interest  shall be due and payable by Lessees upon the occurrence
of  such  Delivery Date and such payment shall be  an  additional
condition  precedent  to  such Delivery Date  Closing;  provided,
however,  that  no  additional  Delivery  Date  Notice  shall  be
required to be given if a Delivery Date Closing is postponed  and
thereafter  consummated;  and provided,  further,  that  if  such
Delivery  Date Closing shall not have occurred by  the  first  to
occur  of (a) the fifth (5th) Business Day following the  Funding
in  respect  thereof  and (b) December 15, 1994,  then  all  such
interest  shall be due and payable on such date, and Agent  shall
refund to each Lessor all amounts funded by such Lessor, plus any
other amounts due under Section 7.5.

S5      Non-Utilization Fee.  On the Lease Commencement Date,  in
the event that the outstanding Lease Balance is less than 95%  of
the  Total  Commitment (after giving effect to any Delivery  Date
Closing  that may have occurred on such date), Lessees shall  pay
to  Agent, for the benefit of the Lessors, a non-utilitzation fee
equal  to the amount accrued on the unfunded portion of the Total
Commitment  from  the  Initial Delivery Date  through  the  Lease
Commencement Date at the rate of .25% per annum.


AIII                              CONDITIONS  TO  DELIVERY   DATE
CLOSINGS

      The  obligation  of each Lessor and Agent  to  perform  its
obligations on any Delivery Date, and of each Lessor to make  its
Funding,  shall be subject to the fulfillment to the satisfaction
of  (including, with respect to writings, such writings being  in
form  and  substance reasonably satisfactory to the addressee  or
beneficiary  thereof),  or  the  waiver  in  writing   by,   such
Participant of the conditions precedent set forth in this Article
III on or prior to such Delivery Date (except that the obligation
of  any  party hereto shall not be subject to the performance  or
compliance of such party or of any of such party's Affiliates).

S1      Delivery  Date  Notice;  Invoices.   Lessees  shall  have
delivered to Agent and each Lessor, not later than 1:00 p.m.  San
Francisco  time not earlier than the tenth (10th) and  not  later
than  the third (3rd) Business Day prior to the proposed Delivery
Date  (or, solely with respect to the Initial Delivery Date,  not
later  than the second (2nd) Business Day prior to such  Delivery
Date),   an   irrevocable  notice  (a  "Delivery  Date   Notice")
substantially  in  the  form of Exhibit  B,  specifying  (i)  the
proposed  Delivery  Date,  (ii) a description  (including  model,
make,  serial  number and registration) of  each  Vehicle  to  be
purchased on such Delivery Date and a representation and warranty
that  as of the date the relevant Lessee takes possession of each
such  Vehicle  and  at all times thereafter,  such  Vehicle  will
either be (a) used in interstate commerce, titled in a State with
respect  to  which Agent and Lessors have received an opinion  in
the  form  of Exhibit C-1 and registered in a State  which  is  a
party  to  the  International Registration Plan or  (b)  used  in
intrastate commerce, registered in the State in which  it  is  so
used  and  titled  in  a State with respect to  which  Agent  and
Lessors  have  received an opinion in the form  of  Exhibit  C-1,
(iii) the respective Purchase Prices of such Vehicles, (iv) as to
each such Vehicle, which Lessee is to be the Lessee thereof,  and
(v)  wire  transfer instructions for the disbursement  of  funds.
Concurrently   with   each   Delivery   Date   Notice,   Lessees'
Representative shall deliver to Agent true and correct copies  of
the  manufacturer's or dealer's invoice for each  Vehicle  to  be
delivered  on such Delivery Date, which invoices shall set  forth
the Invoice Cost of each such Vehicle.

S2      Appraisal.  At least 2 Business Days prior to the Initial
Delivery  Date,  Agent  and each Lessor shall  have  received  an
Appraisal to their reasonable satisfaction opining:

          (a) that the Appraised Value of the Group A Vehicles is
     reasonably expected to be as follows:

         Date                                               Value

    Sum of Fair Market Value of Group A
    Vehicles on the Initial Delivery Date             $48,808,580
    End of Base Period                                $36,165,234
    End of First Renewal Term                         $31,605,500
    End of Second Renewal Term                        $27,467,805
    End of Third Renewal Term                         $22,338,641
    End of Fourth Renewal Term                        $17,152,771;

          (b) that the Appraised Value of the Group B Vehicles is
     reasonably expected to be as follows:

         Date                                          Value

    Sum of Fair Market Value of Group B
    Vehicles on the Initial Delivery Date             $11,554,425
    End of Base Period                                 $8,839,136
    End of First Renewal Term                          $8,054,221
    End of Second Renewal Term                         $6,743,908
    End of Third Renewal Term                          $5,628,095
    End of Fourth Renewal Term                         $4,464,958
    End of Fifth Renewal Term                          $3,383,159;

           (c)   that the remaining economic useful life of  each
     Group A Vehicle is not less than ten (10) years;

           (d)   that the remaining economic useful life of  each
     Group B Vehicle is not less than twelve (12) years; and

           (e)  that the values set forth in clauses (a) and  (b)
     above assume an increase for inflation of 2% per annum,  and
     that such inflation assumption is reasonable.

S3      Participation  Agreement.  On or  prior  to  the  Initial
Delivery  Date,  each of the Participants shall have  received  a
fully executed counterpart of this Participation Agreement.

S4      Lease.   On or prior to the Initial Delivery  Date,  each
Participant  shall have received a fully executed counterpart  of
the  Lease; provided, however, only Agent shall receive the Lease
marked "Counterpart No. 1 - Agent's Original Copy".
S5      Lease  Supplements.  On each Delivery Date,  each  Lessee
accepting Vehicles for lease on such Delivery Date shall  execute
and   deliver  to  Agent  and  each  Lessor  one  or  more  Lease
Supplements  in  form  and substance reasonably  satisfactory  to
Lessors  and substantially in the form of Exhibit A to the  Lease
in  the case of Group A Vehicles or substantially in the form  of
Exhibit  B to the Lease in the case of Group B Vehicles  (each  a
"Lease  Supplement"); provided, however, only Agent shall receive
the Lease Supplement marked "Counterpart No. 1 - Agent's Original
Copy".  Each Lease Supplement to be executed and delivered  by  a
Lessee on each Delivery Date shall set forth:

           (a)   in Schedule I thereto, a description of and  the
     Purchase Price for the Vehicles; and

           (b)   in  Schedule II thereto, the Interim  Rent,  the
     Applicable   Percentage   Amounts,   a   schedule   of   the
     installments  of  Fixed  Rent, the  Payment  Dates  therefor
     payable during the Base Period and during each Renewal Term,
     the  Supplement Balance of such Lease Supplement as  of  the
     Delivery  Date therefor and as of each Payment Date  in  the
     Base  Term and each Renewal Term, assuming in each case that
     all installments of Fixed Rent due and payable thereunder to
     and including such Payment Date have been paid.

Each  Lease Supplement shall provide for level payments of  Fixed
Rent  during the Base Term and the first two Renewal Terms.   The
payments  of Fixed Rent under each Lease Supplement shall  be  in
amounts such that, at the end of the second Renewal Term and each
Renewal  Term  thereafter, the Supplement Balance of  such  Lease
Supplement shall be equal to the Appraised Value at such date  of
the  Vehicles subject to such Lease Supplement.  Schedules I  and
II  to each Lease Supplement shall be prepared by Agent, and  the
items  set  forth by Agent in such Schedules shall be  conclusive
and binding upon each Lessee for all purposes hereunder.

S6      Guarantee.   On  or prior to the Initial  Delivery  Date,
Guarantor shall have duly executed and delivered the Guarantee to
Agent and each Lessor.

S7      Financing Statements.  On or prior to each Delivery Date,
Agent  shall  have  received from each Lessee duly  executed  UCC
financing statements identifying each Lessee as debtor and  Agent
as  secured  party for the benefit of the Lessors, and describing
the Lease as a secured transaction, and such financing statements
shall  have  been  filed in (a) each jurisdiction  in  which  any
Lessee  has  its  principal office and (b) each  jurisdiction  in
which any Vehicle being delivered on such Delivery Date is to  be
titled.

S8     Certificates of Title.  On or prior to each Delivery Date,
Agent  and  each  Lessor  shall have  received  a  duly  executed
Officer's  Certificate  from Lessees' Representative,  certifying
that  (a) Lessees have submitted to each applicable motor vehicle
Authority  the  Certificate  of Title  for  each  Vehicle  to  be
delivered  on  such Delivery Date, together with (i) applications
duly  completed  by  each Lessee requesting that  such  Authority
record  the interests of Agent and Lessors as lienholder on  each
such Certificate of Title and (ii) payment of all applicable fees
and  charges and (b) as so submitted, such Certificates of  Title
do  not evidence title, or any interest in or Lien against title,
in  any such Vehicle in any Person other than the Lessee of  such
Vehicle.

S9      Transaction  Costs; Fees.  On or prior to  each  Delivery
Date,  Lessees shall have paid to Agent, for the benefit of Agent
and   the  Lessors,  any  Transaction  Costs  invoiced  and   not
previously paid.  Such payment shall be made by wire transfer  of
immediately available funds to the account specified for Agent at
Schedule  I.   On or prior to the Initial Delivery Date,  Lessees
shall  have  paid  to  BA Leasing & Capital Corporation  (in  its
individual  capacity, "BALCAP") the arrangement fee provided  for
in  that  certain letter agreement dated August 30, 1994, between
Guarantor and BALCAP.

S10     Opinions of Counsel.  On or prior to the Initial Delivery
Date,  each Lessor and Agent shall have received the opinions  of
(a)  Morrison  &  Foerster, as counsel to Lessees and  Guarantor,
substantially to the effect of the matters set forth in Exhibit C-
1,   and   (b)   general  counsel  to  Lessees   and   Guarantor,
substantially to the effect of the matters set forth in Exhibit C-
2.   By  their execution hereof, Lessees and Guarantor  expressly
instruct Morrison & Foerster and such general counsel to  execute
and  deliver  such  opinions to Agent and the  Lessors.   To  the
extent that any Vehicle to be  delivered on any Delivery Date  is
titled  in  a  jurisdiction with respect to which Agent  and  the
Lessors  have not previously received a satisfactory  opinion  or
memorandum  of  counsel establishing to their  satisfaction  that
title  to  such  Vehicle may be held in the name  of  the  Lessee
thereof,  with the interest of Agent, as lienholder on behalf  of
the Lessors, noted on the Certificate of Title (and that the Lien
of  Agent is thereby perfected), then Lessees shall cause such an
opinion or memorandum satisfactory to the Lessors to be delivered
to Agent and each Lessor on or prior to such Delivery Date.

S11     Corporate  Status and Proceedings.  On or  prior  to  the
Initial Delivery Date, Agent shall have received:

           (a)  certificates of existence and good standing  with
     respect to each Lessee and Guarantor from the Secretaries of
     State of the States of their incorporation, dated no earlier
     than the 15th day prior to the Initial Delivery Date; and

           (b)  with  respect to Guarantor and  each  Lessee,  an
     Officer's   Certificate  substantially  in   the   form   of
     Exhibit D, dated the Initial Delivery Date, with respect  to
     such Person's governing documents, resolutions and incumbent
     officers,  representations  and warranties  and  absence  of
     defaults.

S12     Consents  and  Approvals.  On or  prior  to  the  Initial
Delivery   Date,   all   necessary   consents,   approvals    and
authorizations  of, and declarations, registrations  and  filings
with,   Authorities  and  nongovernmental  Persons  required   to
consummate  the transactions contemplated by this  Agreement  and
the  other Operative Agreements shall have been obtained or  made
by  each  Lessee  and Guarantor and shall be in  full  force  and
effect.

S13     Payment  of  Impositions.   All  Impositions  other  than
Charges  payable on or prior to each Delivery Date in  connection
with  the execution, delivery, recording or filing of any of  the
Operative Agreements, in connection with the filing of any of the
financing statements, any applications regarding certificates  of
title   and   any  other  documents,  in  connection   with   the
consummation of any other transactions contemplated hereby or  by
any  of  the other Operative Agreements, shall have been paid  in
full by Lessees.

S14     Search Reports.  Prior to each Delivery Date, Agent shall
have  received  reports acceptable to Agent and  counsel  to  the
Lessors  as  to  each Lessee by the office of the Secretaries  of
State  and the appropriate county filing or recording offices  of
each  jurisdiction  contemplated by Section 3.7,  each  dated  as
close to the relevant Delivery Date as practicable, in respect of
a  search  of the applicable UCC files and any indices  of  Liens
maintained by such offices (including, if applicable, indices  of
judgment, revenue and tax liens).

S15     Collateral  Agency.  On or prior to the  second  Delivery
Date,  Agent,  each Lessor, each Lessee, Lessees'  Representative
and  the  Collateral Agent shall have executed and delivered  the
Collateral Agency Agreement, as provided in Section 6.1(f)(ii).

S16     Insurance.   On  or prior to the Initial  Delivery  Date,
Agent shall have received (and each Lessor shall have received  a
copy  of)  a  current  certificate to the effect  that  insurance
complying  with  Section 7.1 of the Lease is in  full  force  and
effect, and there shall be no past due premiums in respect of any
such insurance.

S17     Proceedings Satisfactory, Etc.  All proceedings taken  in
connection  with  such Delivery Date and all  documents  relating
thereto shall be reasonably satisfactory to each Participant  and
its  counsel,  and  each Participant and its counsel  shall  have
received  copies  of  such documents as such Participant  or  its
counsel  may reasonably request in connection therewith,  all  in
form  and  substance reasonably satisfactory to such  Participant
and its counsel.

S18     Absence of Material Adverse Effect.  Since June 30, 1994,
no Material Adverse Effect shall have occurred.

S19     Representations and Warranties True; Absence of Defaults.
Each  of the representations and warranties made by or on  behalf
of each Lessee and Guarantor under the Operative Agreements shall
be true on and as of each Delivery Date, and no Incipient Default
or  Event of Default shall have occurred and be continuing on and
as of each Delivery Date.


AIV                                GENERAL PROVISIONS

S1       Nature  of  Transaction.   It  is  the  intent  of   the
Participants  that:   (a)  the  transaction  contemplated  hereby
constitutes an operating lease from Agent and Lessors to  Lessees
for  purposes  of  each  Lessee's financial  reporting,  (b)  the
transaction  contemplated  hereby  preserves  ownership  in   the
Vehicles to Lessees for purposes of Federal and state income tax,
bankruptcy  and  UCC purposes, (c) the Lease  grants  a  security
interest  in the Vehicles and the other Collateral to  Agent  for
the benefit of Agent and the Lessors, and (d) the obligations  of
Lessees  to pay Fixed Rent and Variable Rent shall be treated  as
payments  of principal and interest, respectively.  Nevertheless,
each  Lessee  and  Guarantor acknowledge and agree  that  neither
Agent  nor  any Lessor has made any representations or warranties
concerning  the tax, accounting or legal characteristics  of  the
Operative  Agreements  and  that each Lessee  and  Guarantor  has
obtained  and  relied upon such tax, accounting and legal  advice
concerning  the  Operative Agreements as they  deem  appropriate.
Except  as  specifically provided for herein  or  in  the  Lease,
Agent,  for the benefit of the Lessors, shall retain an  interest
in the Vehicles, free and clear of all Liens other than Permitted
Liens,  as  security  for the obligations of  Lessees  under  the
Operative Agreements.  Lessees shall not have any right, title or
interest  in the Vehicles except as expressly set forth  in  this
Agreement or in the Lease.  Without limiting the foregoing,  each
Lessee shall be permitted to be named as the record owner of each
Vehicle leased by such Lessee on the Certificate of Title and the
registration issued for such Vehicle by each applicable Authority
so  long  as Agent is listed on the same Certificate of Title  as
having  a  security interest in the Vehicle or Lessee  has  taken
such  other steps as may be necessary to perfect Agent's security
interest, on behalf of the Lessors, in such Vehicle.  Other  than
Agent,  who  will  hold  a security interest  on  behalf  of  the
Lessors,  and  the  Lessors, no Person  shall  be  named  on  the
Certificate of Title of any Vehicle as having a security interest
in such Vehicle.

S2     Waiver.  As a material inducement to Agent and each Lessor
to  engage  in  the  transactions contemplated by  the  Operative
Agreements, Lessee hereby unconditionally and irrevocably  waives
any  and  all benefits under California Civil Code Sections  2819
and 2822.

S3      Replacements.   Lessors  hereby  agree  that  they  shall
instruct  Agent to release a Part or Vehicle from the  Lease  and
evidence  such  release  by  the  execution  and  delivery  of  a
termination  statement  release,  a  release  of  Lien  from  the
applicable Certificate of Title and such other documents  as  may
be  required  to  release the replaced Part or Vehicle  from  the
Lease  and  which are in form and substance satisfactory  to  the
Required  Lessors subject to the satisfaction of  the  conditions
set  forth in the Lease with respect to the release of such  Part
or Vehicle.

S4      Nature  of  Lessees' Obligations.  Each  of  the  Con-Way
Lessees hereby covenants and agrees that their obligations  under
this Agreement, the Lease, the Lease Supplements and each of  the
other  Operative Agreements to which any of them is a party shall
be  joint and several, and that Agent and each Lessor may look to
any   one  or  more  of  the  Con-Way  Lessees  for  payment  and
performance of such obligations, except that each Con-Way  Lessee
shall  be  primarily liable with respect to each Lease Supplement
to  which  it is a party and secondarily liable with  respect  to
each  Lease  Supplement to which any other Con-Way  Lessee  is  a
party.   Each Con-Way Lessee hereby irrevocably waives any  claim
or other rights which it may now or hereafter acquire against any
other   Con-Way  Lessee  arising  from  the  existence,  payment,
performance  or enforcement of such Con-Way Lessee's  obligations
under   the   Operative  Agreements,  including  any   right   of
subrogation, reimbursement, exoneration, or indemnification,  any
right to participate in any claim or remedy of any Lessor against
any  Con-Way  Lessee  or any property or assets  of  any  Con-Way
Lessee,  whether  or not such claim, remedy or  right  arises  in
equity,  or under contract, statute or common law, including  the
right  to  take or receive from any Con-Way Lessee,  directly  or
indirectly,  in cash or other property or by set-off  or  in  any
manner,  payment or security on account of such  claim  or  other
rights.   If  any amount shall be paid to any Con-Way  Lessee  in
violation of the preceding sentence and the obligations  owed  to
the  Lessors under the Operative Agreements shall not  have  been
indefeasibly  paid in cash, such amount shall be deemed  to  have
been paid to such Con-Way Lessee for the benefit of, and held  in
trust  for, the Lessors, and shall forthwith be paid to Agent  to
be  credited  and applied pursuant to the terms of the  Operative
Agreements.   Each  Con-Way  Lessee  acknowledges  that  it  will
receive   direct  and  indirect  benefits  from   the   financing
arrangements contemplated by this Agreement and that  the  waiver
set forth in this paragraph is knowingly made in contemplation of
such   benefits.    Each   Con-Way  Lessee   hereby   absolutely,
unconditionally and irrevocably waives and agrees not  to  assert
or  take  advantage  of any defense based  upon  an  election  of
remedies  by  Agent or any Lessor.  In any action  or  proceeding
involving  any  state  corporate law, or  any  state  or  federal
bankruptcy, insolvency, reorganization or any other law affecting
the rights of creditors generally, if the obligations of any Con-
Way Lessee under the Operative Agreements would otherwise be held
or   determined   to  be  void,  invalid  or  unenforceable,   or
subordinated to the claims of any other creditors, on account  of
the amount of its liability under the Operative Agreements, then,
notwithstanding any other provision hereof to the  contrary,  the
amount  of  such liability shall, without any further  action  by
such Con-Way Lessee or any other Person, be automatically limited
and  reduced to the highest amount which is valid and enforceable
and  not  subordinated  to  the  claims  of  other  creditors  as
determined in such action or proceeding.  No Con-Way Lessee shall
be  liable  for (nor shall any Collateral pledged by any  Con-Way
Lessee  secure) the payment or performance of the obligations  of
CFCD under the Operative Agreements, and CFCD shall not be liable
for (nor shall any Collateral pledged by CFCD secure) the payment
or performance of the obligations of any Con-Way Lessee under the
Operative  Agreements.  Each undertaking, covenant and  agreement
made  by  the Lessees collectively under any Operative  Agreement
shall be subject to this Section 4.4.


S5      Guarantor as Lessees' Representative.  Each Lessee hereby
appoints    Guarantor    as    its   representative    ("Lessees'
Representative")  for  receipt of any payment,  notice  or  other
communication directed to Lessees, or any Lessee, pursuant to any
of  the  Operative Agreements, and for the taking of  any  action
(including the making of any representations and covenants) which
a  Lessee  is required or permitted to undertake or make pursuant
to  the  Operative Agreements.  Each Lessor and Agent may  regard
any  notice  or  other communication pursuant  to  any  Operative
Agreement (including a Delivery Date Notice) from Guarantor as  a
notice  or communication from the Lessees.  Without limiting  the
foregoing,  Agent  shall make all payments of Purchase  Price  on
each  Delivery  Date  to  Guarantor,  for  the  benefit  of   the
applicable  Lessee  or  Lessees,  to  an  account  specified   by
Guarantor  in  the  applicable Delivery  Date  Notice,  and  such
payment  to Guarantor shall constitute payment to such Lessee  or
Lessees   for   all  purposes  under  the  Operative  Agreements.
Guarantor  hereby  accepts such appointment and  agrees  that  it
shall  not  resign  from  its duties as  Lessees'  Representative
without the written consent of the Required Lessors.  Each Lessee
hereby   covenants  and  agrees  that  each  representation   and
warranty, covenant, agreement and undertaking made in its name or
on  its behalf by Lessees' Representative shall be deemed for all
purposes  to have been made by such Lessee and shall  be  binding
upon and enforceable against such Lessee to the same extent as if
the same had been made directly by such Lessee.


AV                                 REPRESENTATIONS AND WARRANTIES

S1      Representations and Warranties of Lessees and  Guarantor.
As  of each Delivery Date, each Lessee and Guarantor jointly  and
severally  make the representations and warranties set  forth  in
this Section 5.1 to Agent and each Lessor.

           (a)   Title.  Each Lessee has record title to each  of
     the   Vehicles  listed  opposite  such  Lessee's   name   on
     Schedule  I to the applicable Delivery Date Notice  (or  has
     beneficial  title  to such Vehicle with record  title  being
     subject only to the issuance in the ordinary course  of  the
     original Certificate of Title, for which an application  has
     already been submitted to the appropriate titling Authority)
     and each of the Vehicles and all of the other Collateral  is
     free from all Liens except for Permitted Liens.

           (b)   Perfection  of Security Interests.   No  filing,
     recordation  or  registration is necessary or  advisable  in
     order  to  perfect the security interest of Agent,  for  the
     benefit of the Lessors, in the Vehicles and other Collateral
     referred to in the foregoing subsection (a), other than  (i)
     the  filing  or  recording  of  financing  statements  under
     Article  9  of  the  applicable  UCC  in  the  jurisdictions
     contemplated  by  Section 3.7, and the  recordation  on  the
     Certificate  of  Title  for each  Vehicle  of  the  security
     interest of Agent, on behalf of the Lessors or (ii)  in  the
     case  of  any Sublease, the delivery to Agent of the chattel
     paper  original  of  such Sublease,  and  upon  the  actions
     described  in  the  foregoing  clauses  (i)  and  (ii),  the
     security  interests in the Vehicles and the other Collateral
     are  enforceable, properly perfected, first-priority  Liens,
     subject  only  to Permitted Liens; provided,  however,  that
     such  actions may not be effective to perfect such  security
     interest  in  certain Intellectual Property Collateral  that
     can  only  be  perfected by filing with  the  United  States
     Patent  and Trademark Office and certain items described  in
     clause  (e) of the definition of "Collateral" to the  extent
     such  items are stored in (but not made a part of) a Vehicle
     and located from time to time in jurisdictions where no such
     filing  has  been made or to the extent that any  such  item
     consists  of  a  type  of collateral  in  which  a  security
     interest cannot be perfected by taking such actions.

           (c)  Appraisal Data.  The information provided by each
     Lessee and Guarantor to the Appraiser and forming the  basis
     for  the conclusions set forth in the Appraisal, taken as  a
     whole, was true and correct in all material respects and did
     not  omit  any information necessary to make the information
     provided not materially misleading.

           (d)   Corporate  Existence.  Each of the  Lessees  and
     Guarantor  is  a  corporation  duly  incorporated,   validly
     existing and in good standing under the laws of the State of
     Delaware, and each such Person is duly qualified or licensed
     and in good standing as a foreign corporation authorized  to
     do  business in each state where, because of the  nature  of
     its   activities   or  properties,  such  qualification   or
     licensing  is required, except for such jurisdictions  where
     the failure to be so qualified or licensed would not have  a
     Material Adverse Effect.

           (e)   Corporate  Authority.  Each of the  Lessees  and
     Guarantor has all requisite corporate power and authority to
     execute,  deliver,  and  perform its respective  obligations
     under each Operative Agreement to which it is a party.

           (f)   Authorization; Non-Contravention.  The execution
     and  delivery  by  each  of Lessees  and  Guarantor  of  the
     Operative  Agreements  to which  it  is  a  party,  and  the
     performance   by   each  such  Person  of   its   respective
     obligations under such Operative Agreements, have been  duly
     authorized by all necessary corporate action (including  any
     necessary  stockholder action) on its part, and do  not  and
     will  not:   (i) violate any provision of any law,  rule  or
     regulation presently in effect having applicability  to  any
     Lessee or Guarantor or of any order, writ, judgment, decree,
     determination   or   award  presently   in   effect   having
     applicability to any Lessee or Guarantor, which violation or
     violations  would have, individually or in the aggregate,  a
     Material Adverse Effect; (ii) violate any provision  of  the
     charter  or bylaws of any Lessee or Guarantor; (iii)  result
     in  a breach of or constitute a default under any indenture,
     loan  or  credit  agreement,  or  any  other  agreement   or
     instrument to which any Lessee or Guarantor is a party or by
     which any of such Persons or their respective properties may
     be  bound or affected, which breaches or default would have,
     individually or in the aggregate, a Material Adverse Effect;
     or (iv) result in, or require, the creation or imposition of
     any  Lien of any nature upon or with respect to any  of  the
     properties now owned or hereafter acquired by any Lessee  or
     Guarantor (other than the security interest contemplated  by
     the  Lease);  and  none of the Lessees or  Guarantor  is  in
     default  under or in violation of its respective charter  or
     bylaws.

           (g)  Binding Effect.  Each of the Operative Agreements
     to  which any Lessee or Guarantor is a party constitutes the
     legal,   valid  and  binding  obligation  of  such   Person,
     enforceable  against  such Person, in  accordance  with  its
     terms,  except as enforcement may be limited by  bankruptcy,
     insolvency, reorganization, moratorium or other similar laws
     affecting the enforcement of creditors' rights generally and
     by general principles of equity.

            (h)   Absence  of  Litigation,  etc.   There  is   no
     litigation   (including,   without  limitation,   derivative
     actions),  arbitration or governmental  proceedings  pending
     or,  to the knowledge of Guarantor or any Lessee, threatened
     against  Guarantor  or  any  Lessee  in  which  there  is  a
     reasonable  possibility  of an adverse  decision  which,  if
     adversely determined, would have a Material Adverse Effect.

            (i)    Consents,  etc.   No  authorization,  consent,
     approval, license or formal exemption from, nor any  filing,
     declaration or registration with, any Authority,  including,
     without  limitation, the Securities and Exchange Commission,
     or  with any securities exchange, is or will be required  in
     connection with the execution and delivery by any Lessee  or
     Guarantor  of  the Operative Agreements to  which  they  are
     party,  the performance by any Lessee or Guarantor of  their
     respective  obligations under such Operative  Agreements  or
     the ownership, operation and maintenance of the Vehicles  as
     contemplated   by  the  Operative  Agreements,   except   as
     described in Section 5.1(b).

           (j)   Location  of  Offices.  The principal  place  of
     business and chief executive office (as such term is used in
     Article  9 of the UCC) of each Con-Way Lessee is located  at
     2882  Sand  Hill  Road,  Suite 210, Menlo  Park,  California
     94025,  and  of CFCD is located at 175 Linfield Road,  Menlo
     Park, California 94025.

            (k)   ERISA.   Relying  upon  the  accuracy  of   the
     representations in Section 5.2(a) hereof, the execution  and
     delivery   of  the  Operative  Agreements  by  Lessees   and
     Guarantor will not involve any prohibited transaction within
     the meaning of ERISA or Section 4975 of the Internal Revenue
     Code of 1986, as amended.

           (l)   Taxes.  Each Lessee and Guarantor has  filed  or
     caused  to be filed all United States Federal and all  other
     material tax returns that are required to be filed  by  each
     such  Person,  and has paid or caused to be paid  all  taxes
     shown  to  be  due  and payable on such returns  or  on  any
     assessment received by any Lessee or Guarantor to the extent
     that  such taxes have become due and payable except  to  the
     extent  that  taxes due, but unpaid, are being contested  in
     good faith by such Lessee or Guarantor by appropriate action
     or  proceeding and, to the extent (if any) that  such  taxes
     are  not  due and payable, has established or caused  to  be
     established  reserves  that are  adequate  for  the  payment
     thereof in accordance with GAAP.

            (m)    Compliance  with  Laws.   The  Vehicles,   the
     properties from which they are operated and serviced and the
     current  operation thereof and thereon do  not  violate  any
     laws, rules, regulations, or orders of any Authorities  that
     are  applicable thereto, including, without limitation,  any
     thereof  relating  to  matters of  occupational  safety  and
     health  or  Environmental Laws, or  motor  vehicles  or  the
     titling  or registration thereof, except for such violations
     as  would  not  have, individually or in  the  aggregate,  a
     Material Adverse Effect.

           (n)   Disclosure.   Taken as  a  whole,  neither  this
     Participation Agreement, nor any offering materials, nor the
     other Operative Agreements to which each Lessee or Guarantor
     is   or  will  be  a  party  nor  the  other  documents  and
     certificates   furnished  pursuant  to  this   Participation
     Agreement  to Agent, or the Lessors in connection  with  the
     transactions  contemplated by this Participation  Agreement,
     contains any untrue statement of a material fact or omits to
     state  a  material  fact necessary  in  order  to  make  the
     statements contained herein and therein, in the light of the
     circumstances under which they were made, not misleading.

           (o)  Impositions.  No sales, use, excise, transfer  or
     other  tax, fee or imposition shall result from the titling,
     registration  or  delivery of a Vehicle  on  or  before  any
     Delivery  Date, except such taxes, fees or impositions  that
     have  been  paid  in  full  on or prior  to  the  applicable
     Delivery  Date, except with respect to sales and  use  taxes
     owing  in  connection with a transfer which  shall  be  paid
     monthly or quarterly as due and payable.

          (p)  Certain Vehicle Matters.

                    (i) Each Vehicle accepted by the Lessors on a
          Delivery  Date  which  is  to  be  used  in  interstate
          commerce  will be properly registered pursuant  to  the
          International  Registration Plan as in  effect  in  the
          state  in which such Vehicle is titled on such Delivery
          Date.

                     (ii)  Each Vehicle has a gross weight rating
          of  more  than 16,000 pounds, and none of the  Vehicles
          has  been specially constructed, rebuilt, reconstituted
          or assembled.

                    (iii) No Lessee is in the business of selling
          vehicles and the Vehicles do not constitute "inventory"
          under any applicable UCC.

                     (iv) Each Vehicle is manufactured within the
          United States of America.

                    (v) In connection with the submission of each
          application to have the Lien of Agent, for the  benefit
          of  the  Lessors, listed on each Certificate of  Title,
          the applicable Lessee has submitted sufficient evidence
          of  ownership of the applicable Vehicle to the relevant
          motor vehicle titling Authority.

           (q)   Registration of Vehicles Used in  Intrastate  or
     Interstate  Commerce.  Each Vehicle accepted by the  Lessors
     on a Delivery Date will be, when the applicable Lessee takes
     possession  thereof and at all times thereafter, either  (i)
     used  in interstate commerce, titled in a State with respect
     to  which Agent and Lessors have received an opinion in  the
     form  of  Exhibit C-1 and registered in a State which  is  a
     party to the International Registration Plan or (ii) used in
     intrastate commerce, registered in the State in which it  is
     so  used  and titled in a State with respect to which  Agent
     and  Lessors have received an opinion in the form of Exhibit
     C-1.

          (r)  Holding Company.  Neither any Lessee nor Guarantor
     is   subject  to  regulation  as  a  "holding  company,"  an
     "affiliate"   of  a  "holding  company",  or  a  "subsidiary
     company" of a "holding company," within the meaning  of  the
     Public Utility Holding Company Act of 1935, as amended.

           (s)   Investment Company Act.  Neither any Lessee  nor
     Guarantor   is   an  "investment  company"  or   a   company
     "controlled" by an "investment company" within  the  meaning
     of the Investment Company Act of 1940, as amended.

           (t)   Intellectual Property.  There  are  no  patents,
     patent  rights,  trademarks,  service  marks,  trade  names,
     copyrights,  licenses or other intellectual property  rights
     with  respect to the Vehicles, or proprietary,  patented  or
     patentable  modifications or Parts used in  connection  with
     the  Vehicles,  the  unavailability of which  would  have  a
     material adverse effect on the current Fair Market Value  of
     the Vehicles.

           (u)       Subjection to Regulation.  Neither Agent nor
     any  Lessor  will,  solely by reason of  entering  into  the
     Operative Agreements or the consummation and performance  of
     the  transactions contemplated thereby (other than upon  the
     exercise  of  remedies under the Lease) (i) be  required  to
     qualify  to  do  business in any jurisdiction,  (ii)  become
     subject  to ongoing regulation by any Authority as a company
     engaged in the business of any Lessee in any jurisdiction or
     (iii)  to  the best knowledge of each Lessee and  Guarantor,
     become  subject  to  any  other ongoing  regulation  of  its
     operations   by  any  Authority  (other  than   any   taxing
     Authority).

          (v)  Use of Proceeds.  The use of the proceeds from the
     transaction  contemplated by the Operative  Agreements  will
     not  violate or result in any violation of Section 7 of  the
     Securities  Exchange  Act  of  1934,  as  amended,  or   any
     regulations  issued  pursuant  thereto,  including,  without
     limitation,  Regulations G, T, U  and  X  of  the  Board  of
     Governors of the Federal Reserve System.

           (w)   Absence  of Defaults.  No Incipient  Default  or
     Event  of Default has occurred and is continuing, and  since
     June 30, 1994 there has occurred no Material Adverse Effect.

           (x)   Absence  of Casualty.  No Casualty has  occurred
     with  respect  to  the  Vehicles  being  delivered  on  such
     Delivery Date.

          (y)  Solvency.  The transfer of Vehicles made by Lessee
     on  the  relevant Delivery Date will not render  any  Lessee
     insolvent,  nor  will  it be made in  contemplation  of  any
     Lessee's  insolvency; the value of the assets and properties
     of  each  Lessee at fair valuation and at their then present
     fair  salable  value is and, after such transfers,  will  be
     greater  than  such  Lessee's total  liabilities,  including
     contingent  liabilities, as they become  due;  the  property
     remaining  in the hands of each Lessee after such  transfers
     was  not  and  will not be an unreasonably small  amount  of
     capital.

           (z)   Insurance.  All insurance coverages required  by
     Section  7.1 of the Lease are in full force and  effect  and
     there  are  no  past  due premiums in respect  of  any  such
     insurance.

           (aa)   SEC Reports.  At least three (3) Business  Days
     prior  to  the Initial Delivery Date, Guarantor  shall  have
     delivered  to  Agent and Lessors copies of its  most  recent
     Annual  Report on Form 10-K and its 2 most recent  Quarterly
     Reports  on  Form  10-Q,  in each case  as  filed  with  the
     Securities   and   Exchange  Commission;  the   consolidated
     financial  statements set forth in such  Reports  have  been
     prepared  in  accordance with GAAP, applied on a  consistent
     basis  throughout the periods covered thereby and on a basis
     consistent   with  prior  periods;  and  such   consolidated
     financial   statements  fairly  present   the   consolidated
     financial   condition  of  Guarantor  and  its  consolidated
     subsidiaries at such dates and the consolidated  results  of
     their operations for such periods.

            (bb)   Private  Offering.   Neither  any  Lessee  nor
     Guarantor,  nor anyone acting on behalf of either  of  them,
     has  taken  or will take any action which will  subject  the
     issue and sale of any interest being acquired by the Lessors
     under  the  Operative  Agreements  to  the  requirements  of
     Section  5  of  the Securities Act of 1933, as amended  (the
     "Securities  Act"), and, assuming the truth and accuracy  of
     the   representations  set  forth  in  Section  5.2(b),  the
     issuance,  sale  and  delivery of such interests  under  the
     circumstances contemplated by this Agreement do not  require
     the  registration of such interests under the Securities Act
     or  the  qualification  of any of the  Operative  Agreements
     under the Trust Indenture Act of 1939, as amended.

           (cc)   Brokers, etc.  Neither any Lessee nor Guarantor
     has  engaged  or  authorized any broker, finder,  investment
     banker  or other third party to act on its behalf,  directly
     or indirectly, as a broker, finder, investment banker, agent
     or  in any other like capacity in connection with any of the
     Operative   Agreements  or  the  transactions   contemplated
     thereby,   other   than  BALCAP.   Each  Lessee   shall   be
     responsible for, and shall indemnify, defend and  hold  each
     Lessor  harmless  from  and  against  any  and  all  claims,
     liabilities or demands by any Person for broker's, finder's,
     investment  banker's or agent's fees, commissions  or  other
     entitlements with respect the Operative Agreements  and  the
     transactions  contemplated thereby  (except  to  the  extent
     arising  from a breach of Section 5.2(c) or Section  5.3(f),
     or from any claim made by BALCAP).

S2      Representations and Warranties of Lessors.  Each  of  the
Lessors  hereby represents and warrants severally but not jointly
to the other Participants as set forth in this Section 5.2.

          (a)  ERISA.  Such Lessor is not and will not be funding
     any  of  its Commitment or performing any of its obligations
     under  the  Operative  Agreements  with  the  assets  of  an
     "employee  benefit  plan" (as defined  in  Section  3(3)  of
     ERISA) which is subject to Title I of ERISA, or a "plan" (as
     defined in Section 4975(e)(1) of the Code.

           (b)   Investment.  The interest being acquired by such
     Lessor under the Operative Agreements is being acquired  for
     its  own  account,  without  any view  to  the  distribution
     thereof  or any interest therein, provided that such  Lessor
     shall be entitled to assign, transfer or convey its interest
     in accordance with Section 11.8.

           (c)   Brokers,  etc.  Such Lessor has not  engaged  or
     authorized  any broker, finder, investment banker  or  other
     third party to act on its behalf, directly or indirectly, as
     a  broker, finder, investment banker, agent or in any  other
     like  capacity  in  connection with  any  of  the  Operative
     Agreements  or the transactions contemplated thereby,  other
     than BALCAP.

S3      Representations and Warranties of Agent.   BA  Leasing  &
Capital   Corporation,   in  its  individual   capacity,   hereby
represents and warrants to the other Participants as set forth in
this Section 5.3.

            (a)    Organization  and  Authority.   Agent   is   a
     corporation  duly  organized and validly  existing  in  good
     standing  under the laws of California and has the corporate
     power   and   authority  to  enter  into  and  perform   its
     obligations under the Operative Agreements.

           (b)   Authorization;  Binding Effect.   The  Operative
     Agreements to which Agent is or will be a party have been or
     will  be, on the date required to be delivered hereby,  duly
     authorized,  executed  and  delivered  by  Agent,  and  this
     Participation   Agreement  is,  and  such  other   Operative
     Agreements are, or, when so executed and delivered by  Agent
     will  be,  valid,  legal and binding  agreements  of  Agent,
     enforceable   against   Agent  in  accordance   with   their
     respective  terms, except as enforcement may be  limited  by
     bankruptcy, insolvency, reorganization, moratorium or  other
     similar laws affecting the enforcement of creditors'  rights
     generally and by general principles of equity.

           (c)   Non-Contravention.  Neither  the  execution  and
     delivery by Agent of the Operative Agreements to which it is
     or  will  be a party, either in its individual capacity,  as
     Agent, or both, nor compliance with the terms and provisions
     thereof, conflicts with, results in a breach of, constitutes
     a  default  under (with or without the giving of  notice  or
     lapse  of  time  or  both), or violates any  of  the  terms,
     conditions   or   provisions  of:   (i)  the   articles   of
     incorporation or by-laws of Agent; (ii) any bond, debenture,
     note,   mortgage,  indenture,  agreement,  lease  or   other
     instrument   to  which  Agent,  either  in  its   individual
     capacity, as Agent, or both, is now a party or by  which  it
     or  its  property,  either  in its individual  capacity,  as
     Agent,  or  both, is bound or affected, where such conflict,
     breach,  default or violation would be reasonably likely  to
     materially and adversely affect the ability of Agent, either
     in its individual capacity, as Agent or both, to perform its
     obligations under any Operative Agreement to which it is  or
     will  be  a  party,  either in its individual  capacity,  as
     Agent,  or  both; or (iii) any of the terms,  conditions  or
     provisions  of any law, rule, regulation, order,  injunction
     or   decree  of  any  Authority  applicable  to  it  in  its
     individual capacity, as Agent, or both, where such conflict,
     breach,  default or violation would be reasonably likely  to
     materially and adversely affect the ability of Agent, either
     in its individual capacity, as Agent or both, to perform its
     obligations under any Operative Agreement to which it is  or
     will be a party.

            (d)   Absence  of  Litigation,  etc.   There  is   no
     litigation   (including,   without  limitation,   derivative
     actions),  arbitration or governmental  proceedings  pending
     or,  to  the best knowledge of Agent, threatened against  it
     which would be reasonably likely to adversely affect Agent's
     ability  to  perform  its obligations  under  the  Operative
     Agreements to which it is party.

            (e)    Consents,  etc.   No  authorization,  consent,
     approval, license or formal exemption from, nor any  filing,
     declaration or registration with, any Authority, is or  will
     be required in connection with the execution and delivery by
     Agent  of  the Operative Agreements to which it is party  or
     the  performance  by  Agent of its  obligations  under  such
     Operative Agreements.

          (f)  Brokers, etc.  Agent has not engaged or authorized
     any  broker, finder, investment banker or other third  party
     (other  than  Bank  of America, National Trust  and  Savings
     Association)  to act on its behalf, directly or  indirectly,
     as  a  broker, finder, investment banker, agent  or  in  any
     other  like capacity in connection with any of the Operative
     Agreements or the transactions contemplated thereby.


AVI                                COVENANTS

S1      Covenants of Lessees.  Each of the Lessees,  jointly  and
severally,  covenants and agrees with the Lessors and Agent  that
during  the  Lease Term, and, if Lessees have not  purchased  the
Vehicles  pursuant  to  the Lease, for 90 days  thereafter,  each
Lessee shall comply with each of the following provisions of this
Section 6.1.

      (a)   Corporate Existence, etc.  Subject to Section  6.1(c)
and  any  merger permitted thereby pursuant to which  any  Lessee
ceases to exist (in which case this subsection (a) shall apply to
the  surviving corporation of such merger), each Lessee shall  do
or  cause to be done all things necessary to preserve and keep in
full  force and effect its corporate existence, rights and powers
and  franchises  and  its  power and  authority  to  perform  its
obligations  under  the Operative Agreements, including,  without
limitation,  any  necessary qualification  or  licensing  in  any
foreign jurisdiction, except where the failure to be so qualified
would not have a Material Adverse Effect.

      (b)   Compliance With Laws.  Each Lessee shall comply  with
all  applicable statutes, regulations, franchises, and orders of,
and  all  applicable restrictions imposed by, any  Authority,  in
respect of the conduct of its business and the ownership  of  its
properties  (including, without limitation, applicable  statutes,
rules,   ordinances,   regulations   and   orders   relating   to
Environmental  Laws), except for such instances of non-compliance
which  would  not  have,  individually or  in  the  aggregate,  a
Material Adverse Effect.  Without limiting the foregoing, Lessees
shall at all times be responsible for, and shall comply with, all
provisions  of  any  Authority with respect to  the  titling  and
registration of Vehicles.

     (c)  Mergers, Consolidations, Dispositions.  No Lessee shall
consolidate  with  or  merge into any other  Person,  or  convey,
transfer or lease all or substantially all of its assets  to  any
other Person (other than another Lessee), unless:

           (i)  subject  to compliance with Section  6.2(c),  the
     Person  resulting from such consolidation or merger, or  the
     Person which acquires all or substantially all of a Lessee's
     assets  (the  "Surviving  Corporation"),  is  a  corporation
     organized under the laws of the United States of America  or
     any  State  thereof which is a Subsidiary of Guarantor,  and
     executes and delivers to Agent and each Lessor an Assumption
     Agreement  substantially in the form of  Exhibit  G  hereto,
     pursuant to which the Surviving Corporation shall succeed to
     and  assume all of the obligations of the Lessee with  which
     it  is  so  merged or whose assets it so acquires under  the
     Operative  Agreements  and for all  purposes  thereafter  be
     deemed to be such Lessee thereunder;

            (ii)   Guarantor  shall  execute  the  aforementioned
     Assumption Agreement in reaffirmation of the Guarantee;

           (iii)  at  the time of, and immediately  after  giving
     effect  to, such transaction, there shall exist no Incipient
     Default or Event of Default;

            (iv)   promptly   upon  the  consummation   of   such
     transaction,  such  Surviving Corporation  shall  cause  the
     Certificate  of  Title  for  each  Vehicle  acquired  by  it
     pursuant  to  such  transaction to  be  reissued  with  such
     Surviving Corporation listed as the holder of title to  each
     such  Vehicle  (unless it has provided  to  Agent  and  each
     Lessor,  prior  to the consummation of such transaction,  an
     opinion  of  counsel acceptable to Agent to the effect  that
     such  re-titling is not required under applicable law), with
     the interests of Agent and Lessors as lienholders duly noted
     thereon,  and  such Surviving Person shall comply  with  the
     provisions   of  Sections  6.1(f)  and  (g)  in   connection
     therewith,   for  such  purposes  treating   the   date   of
     consummation of such transaction as a "Delivery Date"; and

          (v) promptly upon the consummation of such transaction,
     each  Lessor  and Agent shall have received  an  opinion  of
     counsel  to  such Surviving Corporation and  Guarantor  with
     respect  to the validity of such transaction and as  to  the
     enforceability  of the Assumption Agreement  and  the  other
     Operative Agreements against such Surviving Corporation  and
     as to the continued enforceability of the Guarantee.

      (d)   Liens.  No Lessee shall incur or suffer to exist  any
Lien  on  any  of  the  Collateral other  than  Permitted  Liens.
Without limiting the foregoing, no Lessee shall assign or  pledge
any  of  its  rights under any Sublease to any Person other  than
Agent.

      (e)  Change of Name or Location.  Each Lessee shall furnish
to Agent notice on or before the 30th day prior to any relocation
of  its chief executive office or principal place of business, or
change of its name.

     (f)  Perfection and Maintenance of Security Interest.

          (i)  Lessees, at their expense, shall cause, as soon as
          possible, but in any event no later than the  10th  day
          after   any   request,   financing   statements    (and
          continuation statements with respect thereto)  and  all
          other  documents necessary or reasonably  requested  by
          Agent   in   connection  with  the  establishment   and
          perfection  of the interest of Agent in the Collateral,
          to  be  recorded or filed at the locations contemplated
          by  Section  3.7,  and  in such  manner,  and,  at  its
          expense,  shall take, or shall cause to be  taken,  all
          such  other  action as may be necessary  or  reasonably
          requested by Agent or the Required Lessors in order  to
          establish,  preserve, protect and perfect  the  rights,
          titles  and  interests  of  Agent,  on  behalf  of  the
          Lessors, to the Collateral.

          (ii)  Within  15  days following the  Initial  Delivery
          Date,  and  in  any  event on or prior  to  the  second
          Delivery  Date,  Agent, Lessors, Lessees  and  Lessees'
          Representative  shall have entered  into  a  Collateral
          Agency   Agreement  with  a  Collateral  Agent,   which
          Collateral  Agency Agreement shall be substantially  in
          the  form  of Exhibit H with only such changes  as  the
          Required Lessors may approve, but in no event involving
          a diminution of the duties of the Collateral Agent from
          those set forth in Exhibit H.

          (iii)       All  Certificates  of  Title  relating   to
          Vehicles  delivered on the Initial Delivery Date  shall
          indicate the address of Agent set forth in Section 11.4
          as  the  address  of the lienholder  thereon,  and  all
          Certificates  of  Title relating to Vehicles  delivered
          following  the  consummation of the  Collateral  Agency
          Agreement  shall indicate the address of the Collateral
          Agent  set forth in the Collateral Agency Agreement  as
          the address of the lienholder thereon.

          (iv)  Lessees  shall, no later than  seventy-five  (75)
          days  following each Delivery Date, have  delivered  to
          the   Collateral  Agent  for  inspection  and   custody
          pursuant   to  the  Collateral  Agency  Agreement   the
          originals of all Certificates of Title to the  Vehicles
          purchased on such Delivery Date of which CFCD  or  Con-
          Way Intermodal, Inc. is Lessee, showing CFCD or Con-Way
          Intermodal,  Inc.,  as the case may  be,  as  owner  of
          record,  naming  Agent, on behalf of the  Lessors  (and
          Lessors  to  the extent permitted under applicable  law
          and  procedure  to be so named), on the  face  of  such
          Certificates  of  Title  as having  a  perfected  first
          security  interest in such Vehicles, and reflecting  no
          other Liens.

          (v)  With respect to Certificates of Title for Vehicles
          other  than  those  described in the  foregoing  clause
          (iv),  Lessees'  Representative shall,  no  later  than
          seventy-five  (75) days following each  Delivery  Date,
          have  delivered to Agent and each Lessor  an  Officer's
          Certificate  certifying that each such  Certificate  of
          Title  is in the possession of Lessees' Representative,
          shows a Lessee as owner of record, and names Agent,  on
          behalf  of  the  Lessors  (and Lessors  to  the  extent
          permitted under applicable law and procedure to  be  so
          named),  on the face of such Certificates of  Title  as
          having  a  perfected first security  interest  in  such
          Vehicles,   and   reflecting  no  other   Liens.    All
          Certificates   of   Title   so   held    by    Lessees'
          Representative  shall be available  for  inspection  by
          Agent   during  normal  business  hours,  and  Lessees'
          Representative   shall  deliver  possession   of   such
          Certificates of Title to Agent immediately upon Agent's
          request  therefor.  Not later than January 2, 1995  (or
          in  the event the Mergers are consummated, upon receipt
          of  the  Certificates  of  Title  from  the  applicable
          titling  Authority but in no event later than the  75th
          day following the consummation of the Mergers), Lessees
          shall  deliver each Certificate of Title  described  in
          this clause (v) to the Collateral Agent for custody and
          inspection  pursuant  to the terms  of  the  Collateral
          Agency  Agreement,  which Certificate  of  Title  shall
          reflect  the  interests  of the applicable  Lessee  and
          Agent  (or Agent and the Lessors) as described  in  the
          first sentence of this clause (v)).

          (vi)  Notwithstanding the foregoing,  if  naming  Agent
          (and,  if permitted as aforesaid, Lessors) as a secured
          party  on such Certificate or Certificates of Title  as
          hereinabove contemplated is not adequate to perfect the
          first  priority  security interest of  Agent,  for  the
          benefit of the Lessors, then Lessees shall, within  the
          applicable  time  period specified  above,  deliver  to
          Agent,  in  addition  to the original  Certificates  of
          Title,   all   such  other  documents  or  filings   as
          reasonably required by Agent or the Required Lessors to
          ensure  that  Agent, on behalf of the  Lessors,  has  a
          perfected  first  priority security  interest  in  such
          Vehicles.

      Without  limiting  the foregoing, in  the  event  that  any
application  for registration of such Lien on the Certificate  of
Title  to  any  Vehicle  shall  be  rejected  by  the  applicable
Authority,  Lessees  shall  make  such  corrections  as  may   be
necessary  in  order that such registration shall be re-submitted
to  the  applicable  Authority not more than  fifteen  (15)  days
following  the initial rejection thereof, and duly completed  not
more   than   sixty  (60)  days  following  such   re-submission.
Following  delivery  of any Certificate of  Title  to  Collateral
Agent  pursuant to this Section 6.1(f), or following  receipt  by
Lessees'   Representative  of  any  Certificate   of   Title   as
contemplated  by  clause  (v)  hereof,  no  Lessee  nor  Lessees'
Representative  shall,  without the  prior  written  approval  of
Agent,  change the State of title or the Certificate of Title  of
any Vehicle, apply for an additional Certificate of Title for any
Vehicle, or otherwise modify such Certificate of Title (except in
connection  with  the Mergers, with respect to which  Lessees  or
Lessees'  Representative  shall comply  with  all  of  the  other
provisions  of clause (v) and of Section 6.1(c)).   The  Required
Lessors shall instruct Agent to grant such written approval  upon
Lessees'  satisfaction of the provisions of this  Section  6.1(f)
with  respect to the perfection of Agent's security interest,  on
behalf  of  the  Lessors,  in such Vehicle  (or  any  Replacement
Vehicle) and upon receipt by Agent and each Lessor of an  opinion
of  counsel substantially to the effect of the matters set  forth
in  Exhibit  C-1 with respect to the jurisdiction in  which  such
Vehicle  is to be titled or registered (to the extent that  Agent
and  Lessors  have  not previously received such  an  opinion  of
counsel   with  respect  to  such  jurisdiction).   The  security
interest  of  Agent, on behalf of the Lessors, on any Certificate
of  Title  shall  not be removed therefrom, nor shall  any  other
security interest be noted thereon, unless and until such Vehicle
is  to  be  released  from  the Lien  created  by  the  Lease  in
accordance  with  the  applicable  provisions  of  the  Operative
Agreements.  No Lessee shall, without the prior written  approval
of  Agent,  register any Vehicle in any manner that would  render
Section 5.1(q) untrue with respect to such Vehicle as of any date
of determination.

      It  is  expressly understood that to the  extent  that  any
Certificate  of  Title  is in the possession  of  any  Lessee  or
Lessees'  Representative, such possession shall be  strictly  for
the  benefit  of Agent and the Lessors and solely  in  accordance
with the provisions of the Operative Agreements.

      (g)   Mandatory  Purchase Following a  Delivery  Date.   If
Lessees  shall upon the expiration of the applicable time  period
set  forth  in  Section  6.1(f) fail  to  deliver  the  Officer's
Certificate  described in Section 6.1(f)(v) with respect  to  any
Vehicle  or fail to deliver to the Collateral Agent the  original
Certificate  of Title for any Vehicle, evidencing no other  Liens
other  than  that of Agent, for the benefit of the Lessors,  then
Lessees  shall,  on  the Payment Date immediately  following  the
expiration of such time period, purchase each of the Vehicles for
which Lessees have failed to satisfy any such requirement and pay
to Agent, for the benefit of the Lessors, on such Payment Date  a
portion  of  the Lease Balance equal to the Casualty  Amount  for
each  such Vehicle, plus the applicable Administrative Charge  on
such portion of the Lease Balance.  Upon Lessors' receipt of  the
payments  described in the preceding sentence and all  Rent  then
due   and  payable  under  the  Lease  and  each  of  the   Lease
Supplements, Agent shall transfer its interest in such Vehicle or
Vehicles  to  the Lessee of each such Vehicle in accordance  with
the   last   two  sentences  of  Section  12.1  of   the   Lease.
Notwithstanding the foregoing, if the amount of the Lease Balance
repaid   from   the  Initial  Delivery  Date  to  any   date   of
determination  pursuant  to  this Section  6.1(g)  and  the  last
sentence  of  Article X of the Lease exceeds  $4,000,000  in  the
aggregate,   Lessee  shall  be  required  to  repay  the   entire
outstanding   Lease   Balance,  together  with   the   applicable
Administrative Charge and all accrued but unpaid Variable Rent to
the date of such repayment.

     (h)  Collateral Agency.  Lessees and Lessees' Representative
shall  comply  with  all  of  the terms  and  provisions  of  the
Collateral Agency Agreement.

      (i)   Additional Information.  Promptly upon receipt  of  a
written  request from Agent or any Lessor, Lessees shall  deliver
to  such requesting party such other data and information as from
time to time may be reasonably requested.

      (j)   Reports  to Lessors.  Each Lessee shall, concurrently
with  any notice, delivery or other communication required to  be
delivered to Agent pursuant to any Operative Agreement, deliver a
copy  of  such  notice, delivery or other communication  to  each
Lessor at such Lessor's current address.

S2      Covenants of Guarantor.  Guarantor covenants  and  agrees
with  Agent  and each of the Lessors that during the  Lease  Term
and,  if Lessees have not purchased the Vehicles pursuant to  the
Lease,  for 90 days thereafter, that Guarantor shall comply  with
the following provisions of this Section 6.2.

      (a)   Corporate Existence, etc.  Subject to Section  6.2(b)
and  any  merger  permitted thereby pursuant to  which  Guarantor
ceases to exist (in which case this subsection (a) shall apply to
the  surviving corporation of such merger), Guarantor shall,  and
(subject  to Section 6.1(c)) shall cause each Lessee to,  at  all
times maintain its corporate existence, and Guarantor shall do or
cause  to  be done all things necessary to preserve and  keep  in
full  force and effect its and Lessee's full corporate power  and
authority  to  perform  their respective obligations  under  each
Operative Agreement to which each of them is or will be a party.

     (b)  Mergers, Consolidations, Dispositions.  Guarantor shall
not,  and shall not permit any of its Subsidiaries to (except  as
permitted by Section 6.1(c)), consolidate with or merge into  any
other  Person,  or convey, transfer or lease all or substantially
all of its assets to any other Person, unless:

          (i) the Person resulting from any such consolidation or
     merger  to  which Guarantor is a party, or the Person  which
     acquires all or substantially all of Guarantor's assets,  is
     a  corporation organized under the laws of the United States
     of  America or any State thereof, and executes and  delivers
     an  agreement  in form and substance satisfactory  to  Agent
     containing  an  assumption by such Person  of  the  due  and
     punctual  performance  and  observation  of  each  covenant,
     condition  and agreement of Guarantor under this  Agreement,
     the Guarantee and each of the other Operative Agreements  to
     which Guarantor is a party; and

           (ii)  at  the  time of, and immediately  after  giving
     effect  to, such transaction, there shall exist no Incipient
     Default or Event of Default.

      (c)  Ownership of Lessees; Compliance.  Guarantor shall  at
all  times  be the sole record and beneficial owner, directly  or
indirectly, of at least 80% of the issued and outstanding  shares
of  capital  stock  (on a fully diluted basis)  of  each  Lessee.
Guarantor shall not permit any Liens to exist on any such capital
stock, or, except as permitted by Section 6.1(c), any liquidation
or  dissolution of any Lessee.  Guarantor shall cause each Lessee
to  comply  with the covenants of the Lessees set  forth  in  the
Operative Agreements.

      (d)   Revolving Credit Facility.  Guarantor  shall  at  all
times comply, and shall cause each of its Subsidiaries to comply,
with  the  Financial Covenants set forth in the Revolving  Credit
Facility  (giving  effect  to  any  applicable  grace  and   cure
periods),  and in determining compliance with such covenants  for
purposes  of this Agreement at any time following the termination
of  such  facility,  any  action that would  require  consent  or
approval  thereunder  shall require the consent  or  approval  of
Agent at the direction of the Required Lessors.

       (e)    ERISA  Events.   Promptly  upon  any  Lessee's   or
Guarantor's  becoming aware of the occurrence of  any  matter  or
matters referred to in the following clauses (i), (ii) and  (iii)
involving  liability that may reasonably be expected  to  exceed,
individually  or  in the aggregate, $30,000,000, Guarantor  shall
notify  Agent  and each of the Lessors in writing specifying  the
nature  thereof, what action Guarantor or the Related  Person  is
taking or proposes to take with respect thereto, and, when known,
any  action  taken by the Internal Revenue Service  with  respect
thereto:  (i)  a "Reportable Event" as such term  is  defined  in
Section  4043 of ERISA, (ii) an "Accumulated Funding  Deficiency"
as  such  term  is defined in Section 302 of ERISA,  or  (iii)  a
"Prohibited Transaction", as such term is defined in 4975 of  the
Code or described in Section 406 of ERISA, in connection with any
Pension Plan (or any trust created thereunder).

      (f)   Notice of Defaults.  Promptly upon, but in  no  event
later than five (5) days after any Lessee or Guarantor shall have
obtained  Actual Knowledge thereof, Guarantor shall notify  Agent
and  each  Lessor  in writing of the existence  of  an  Incipient
Default, Event of Default, or any other matter which has resulted
in  or  could  reasonably be expected to have a Material  Adverse
Effect,  which notice shall describe the nature of such Incipient
Default,  Event  of Default or other matter and  the  action  any
Lessee or Guarantor is taking with respect thereto.

      (g)  Notice of Proceedings.  Promptly upon any Lessee's  or
Guarantor's  becoming  aware  of  (i)  any  proposed  or  pending
investigation  of  Guarantor,  any  Lessee,  or  any   of   their
Subsidiaries  by any Authority, (ii) any court or  administrative
proceeding involving any Person described in the foregoing clause
(i),  or  (iii)  any notice, claim or demand from  any  Authority
which alleges that any such Person is in violation of any law  or
has  failed  to  comply  with any order issued  pursuant  to  any
Federal,  state  or  local statute regulating its  operation  and
business, which in any such case involves (A) one or more  claims
involving an aggregate amount of $30,000,000 or more with respect
to   Guarantor   and   the  Lessees  taken   as   a   whole,   or
(B)  individually or in the aggregate, the reasonable expectation
of  a  Material Adverse Effect, Guarantor shall notify Agent  and
each  of  the  Lessors specifying its nature and the  action  any
Lessee or Guarantor is taking with respect thereto.

     (h)  Periodic Reporting.  Guarantor shall deliver to Agent:

          (i)  promptly following such delivery or filing (but in
     no  event more than 45 days following the end of each fiscal
     quarter  in the case of Quarterly Reports and no  more  than
     120  days following the end of each fiscal year in the  case
     of  Annual Reports), a copy of each Quarterly Report on Form
     10-Q  or  any Annual Report on Form 10-K in either  case  as
     filed  with  the Securities and Exchange Commission  or  any
     successor  agency,  and  a  copy  of  any  other  report  or
     statement  required  by  any applicable  law,  authority  or
     regulatory body to be delivered to Guarantor's stockholders,
     any  regular  or periodic report and any Current  Report  on
     Form 8-K filed by Guarantor with any securities exchange  or
     with the Securities and Exchange Commission or any successor
     agency,  provided that if at any time Guarantor shall  cease
     to  be  subject  to  Section 13 or 15(d) of  the  Securities
     Exchange  Act  of 1934 this provision shall be  modified  to
     require the delivery of quarterly and annual balance  sheets
     and financial statements of Guarantor (which, in the case of
     annual  balance  sheets and financial statements,  shall  be
     audited)  comparable to those included in the aforementioned
     Annual Reports and Quarterly Reports;

           (ii)  concurrently with each delivery pursuant to  the
     foregoing paragraph (i), but in any event not later than the
     45th  day after the end of each quarterly accounting  period
     in  each  fiscal year of Guarantor, an Officer's Certificate
     of  Guarantor  stating that such officer  has  reviewed  the
     activities  of Lessees and Guarantor during such period  and
     that,  to the best of such officer's knowledge, during  such
     period  Lessees and Guarantor have performed  and  fulfilled
     each  and every covenant, obligation and condition contained
     in  the Operative Agreements, no Incipient Default, Event of
     Default  or  Casualty  exists under  any  of  the  Operative
     Agreements, or if such condition shall exist, specifying the
     nature and status thereof; and

           (iii)   if (A) Guarantor shall cease to be subject  to
     Section 13 or 15(d) of the Securities Exchange Act of  1934,
     and  (B)  Agent or any Lessor at the time outstanding  shall
     request  that Guarantor deliver to Agent, or to such Lessor,
     information  with  respect  to  Guarantor  that  meets   the
     requirements  of  Rule 144A(d)(4)(i) of  such  Act  (or  any
     successor  provision),  then:  (x)  promptly  following  the
     receipt  by  Guarantor  of  that  request,  Guarantor  shall
     deliver  such information to Agent, or to such  Lessor,  and
     (y) such information shall, at the time of such delivery, be
     as  of  a date so as to be entitled to the presumption  that
     such  information is "reasonably current" within the meaning
     of  Rule  144A(d)(4)(ii)  of  such  Act  (or  any  successor
     provision.

           In  addition to the foregoing, Guarantor shall deliver
     to  Agent  and  each  Lessor, together  with  each  delivery
     pursuant  to  the  foregoing  clause  (i),  a  copy  of  any
     compliance certificate required to be delivered pursuant  to
     the  Revolving Credit Facility with respect to any Financial
     Covenant,   accompanied  by  an  Officer's  Certificate   of
     Guarantor authorizing Agent and each Lessor to rely on  such
     compliance certificate.  Guarantor shall provide Agent  with
     a  current  copy  of the Revolving Credit  Agreement  as  in
     effect   from   time  to  time,  including  all  amendments,
     modifications   and   supplements   thereto   and    waivers
     thereunder.

      (i)   Additional Information.  Promptly upon receipt  of  a
written request from Agent or any Lessor, Guarantor shall deliver
to  such requesting party such other data and information as from
time to time may be reasonably requested.

     (j)  Reports to Lessors.  Guarantor shall, concurrently with
any notice, delivery or other communication to Agent pursuant  to
any  Operative Agreement, deliver a copy of such notice, delivery
or  other  communication to each Lessor at such Lessor's  current
address.

S3      Covenants of Agent and Lessors.  Agent, in its individual
capacity, and each of the Lessors, covenants and agrees with each
of  the  other  parties  that:   (a)  it  will  not  directly  or
indirectly  create, incur, assume or suffer to exist  any  Lessor
Liens  arising  by, through or under it on the Collateral,  other
than  Permitted Lessor Liens; (b) it will, at its  own  cost  and
expense, promptly take such action in its individual capacity  as
may be necessary to discharge fully such Lessor Liens created  by
it  on the Collateral, other than Permitted Lessor Liens; and (c)
it  will not, except in compliance with the Operative Agreements,
sell,  transfer or otherwise dispose of all or any  part  of  the
Vehicles or the other Collateral.


AVII                               GENERAL INDEMNITIES

S1      Indemnity.  Whether or not the transactions  contemplated
hereby  are  consummated,  to  the fullest  extent  permitted  by
applicable  law,  Lessees and Guarantor  waive  and  release  any
claims  now or hereafter existing against Indemnitees on  account
of, and shall jointly and severally indemnify, reimburse and hold
the  Indemnitees harmless (subject to Section 8.3) from, any  and
all  claims  by  third parties (including, but  not  limited  to,
claims  relating to trademark or patent infringement  and  claims
based  upon  negligence, strict liability in tort,  violation  of
laws,   including,   without  limitation,   Environmental   Laws,
statutes,  rules, codes or orders or claims arising  out  of  any
loss or damage to any property or death or injury to any Person),
any  losses,  damages or obligations owing to third parties,  any
penalties,  liabilities, demands, suits, judgments or  causes  of
action,  and  all  legal  proceedings (either  administrative  or
judicial), in each case whether or not the Indemnitee is a  party
thereto,  and  any  costs  or expenses  in  connection  therewith
(including  costs  incurred in connection with discovery)  or  in
connection  with  the  enforcement of this  indemnity  (including
reasonable attorneys' fees and expenses, and fees and expenses of
internal  counsel,  incurred by the Indemnitees),  including,  in
each  case,  matters based on or arising from the  negligence  of
Indemnitees (subject to the proviso below), which may be  imposed
on,  incurred by or asserted against the Indemnitees  by  Persons
other than Lessees and Guarantor (except to the extent arising by
or  through a claim of a third party) in any way relating  to  or
arising in any manner out of:

           (a)  the registration, purchase, taking or foreclosure
     of  a  security interest in, ownership, delivery, condition,
     lease,   sublease,   assignment,  storage,   transportation,
     possession,  use, operation, return or other disposition  of
     any  of  the  Vehicles, or any defect in any  such  Vehicle,
     arising  from  the material or any article used  therein  or
     from  the  design,  testing  or use  thereof,  or  from  any
     maintenance,  service,  repair,  overhaul  or   testing   of
     any  such  Vehicle  regardless of  when  such  defect  shall
     be  discovered,  whether  or not  such  Vehicle  is  in  the
     possession of any Lessee or Guarantor and no matter where it
     is located; or

           (b)  this Participation Agreement, any other Operative
     Agreement  or  any  document  or  certificate  delivered  in
     connection  therewith, the enforcement hereof or thereof  or
     the consummation of the transactions contemplated hereby  or
     thereby;

provided  that  Lessees and Guarantor shall not be  obligated  to
indemnify  an  Indemnitee  for  any  such  claim,  loss,  damage,
liability, obligation, penalty, demand or suit to the extent  the
same results directly from

          (c)  the willful misconduct or gross negligence of such
     Indemnitee;

           (d)  the incorrectness in any material respect of  any
     representation  or warranty made by such Indemnitee  in  the
     Operative Agreements;

           (e)   the  creation  or existence  of  a  Lessor  Lien
     attributable to such Indemnitee;

           (f)   a  disposition by such Indemnitee of any Vehicle
     following  the  purchase of such Vehicle by such  Indemnitee
     from Agent in a foreclosure sale or any use or operation  of
     such  Vehicle following such disposition (other than use  or
     operation by any Lessee or Sublessee or an Affiliate,  agent
     or representative of any Lessee); or

           (g)   any Impositions described in Section 8.1  except
     any  amount  necessary under this Section 7.1  to  hold  the
     Indemnitee  harmless  (subject  to  Section  8.3)  from  all
     Impositions  required  to be paid by  such  Indemnitee  with
     respect  to  the receipt or accrual of such indemnity  under
     the laws of any Authority in the United States;

provided, however, that nothing in the preceding proviso shall be
deemed to exclude or limit any claim that any Indemnitee may have
under any Operative Agreement or applicable laws from Lessees  or
Guarantor  for  breach  of their representations,  warranties  or
covenants.

S2      Excessive Use Indemnity.  In the event that at the end of
the Lease Term:  (a) Lessees elect the Sale Option; and (b) after
paying  to  Agent any amounts due under Section  11.1(c)  of  the
Lease, Proceeds and the Sale Recourse Amount, Agent does not have
sufficient  funds  to  reduce the Lease  Balance  to  zero,  then
Lessees  shall  promptly pay over to Agent the  shortfall  unless
Lessees deliver a report from the Appraiser in form and substance
satisfactory to the Required Lessors which establishes  that  the
decline in value in each Vehicle which was sold pursuant  to  the
Sale  Option  from that amount anticipated for such date  in  the
Appraiser's report delivered with respect to such Vehicle on  the
applicable  Delivery  Date  was not  due  to  extraordinary  use,
failure  to  maintain or replace, failure to use, workmanship  or
method of installation or removal or any other cause or condition
within  the  power  of  Lessees to control  or  effect  (each  an
"Excessive Use").

S3      Increased  Capital  Costs.  If  any  change  in,  or  the
introduction,     adoption,    effectiveness,     interpretation,
reinterpretation   or  phase-in  of,  any  law   or   regulation,
directive, guideline, decision or request (whether or not  having
the  force of law) of any court, central bank regulator or  other
Authority ("Change in Law") affects or would affect the amount of
capital  required  or  expected to be maintained  by  any  Lessor
directly or by its parent company (including, without limitation,
any  reserve requirements specified under regulations issued from
time  to  time  by the Board of Governors of the Federal  Reserve
System and then applicable to assets or liabilities consisting of
and including "Eurocurrency Liabilities" as defined in Regulation
D  of such Board of Governors) and such Lessor determines (in its
sole  and absolute discretion) that the rate of return on  it  or
its parent's capital as a consequence of the Funding made by such
Lessor  hereunder  to  pay its share of  the  Purchase  Price  is
reduced  to  a level below that which such Lessor or  its  parent
could   have  achieved  but  for  the  occurrence  of  any   such
circumstances, then, in any such case, upon written  notification
from  time  to  time  by such Lessor to Lessees'  Representative,
Lessees shall, within five (5) Business Days following receipt of
the  statement referred to in the next sentence, pay directly  to
such Lessor additional amounts sufficient to compensate Lessor or
its  parent  for  such reduction in rate of  return  (subject  to
Section  8.3).  A statement of a Lessor as to any such additional
amount  or  amounts (including calculations thereof in reasonable
detail)  shall, in the absence of manifest error,  be  conclusive
and  binding on Lessees.  In determining such amount, each Lessor
shall use any method of averaging or attribution that it (in  its
reasonable  discretion)  shall deem applicable.   Notwithstanding
the  foregoing, any demand by a Lessor pursuant to  this  Section
7.3  shall  be made in writing within 120 days after such  Lessor
receives actual notice or obtains actual knowledge of the  matter
giving  rise to such demand.  In the event such Lessor  fails  to
make  such demand within such 120 day period, Lessees shall  have
no obligation to pay any portion of the demanded payment accruing
prior to the 120th day preceding such demand.

S4     LIBO Rate Unlawful.  If any Lessor shall determine in good
faith (which determination shall, upon notice thereof to Lessees'
Representative,  be  conclusive and binding  on  Lessee)  that  a
Change  in  Law makes it unlawful, or the central bank  or  other
Authority asserts that it is unlawful, for such Lessor  to  make,
continue  or  maintain any amount of such Lessor's Funding  on  a
LIBO Rate basis, the obligations of such Lessor to make, continue
or  maintain  any  such Funding shall, upon  such  determination,
forthwith  be  suspended until such Lessor shall notify  Lessees'
Representative that the circumstances causing such suspension  no
longer  exist,  and all Variable Rent allocable to  such  Lessor,
commencing  with the Rent Period in which such notice  is  given,
shall  automatically be determined on a Base Rate basis beginning
on  the  next  immediately succeeding Payment Date  with  respect
thereto or sooner, if required by such law or assertion.

S5     Funding Losses.  Lessees agree to reimburse any Lessor for
any  loss  or  expense incurred (including any  loss  or  expense
incurred by reason of the liquidation or reemployment of deposits
or  other  funds  acquired by such Lessor to  make,  continue  or
maintain any portion of its Outstanding Investment as a LIBO Rate
financing)  as  a  result of (i) the failure of  the  transaction
contemplated by Article I of the Lease to occur on or before  the
Delivery  Date specified in the Delivery Date Notice or (ii)  any
payment of all or any portion of the Lease Balance for any reason
on  a  date  other  than a Payment Date.  Lessor  shall  promptly
notify  Lessees' Representative in writing of the amount  of  any
claim under this Section 7.5, the reason or reasons therefor  and
the  additional amount required fully to compensate  such  Lessor
for  such  loss  or  expense.  Such written notice  (which  shall
include  calculations in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on Lessees.
S6      Actions  of  Affected Lessors.   Each  Lessor  shall  use
reasonable  efforts (including reasonable efforts to  change  the
booking  office  for this transaction) to avoid or  minimize  any
amounts which might otherwise be payable pursuant to Section 7.3;
provided, however, that such efforts shall not be deemed by  such
Lessor, in its sole discretion, to be disadvantageous to it.   In
the  event that such reasonable efforts are insufficient to avoid
or  minimize  such  amounts that might  be  payable  pursuant  to
Section  7.3, then such Lessor (the "Affected Lessor") shall  use
its  reasonable efforts to transfer to any other Lessor  approved
by  Lessees' Representative (which itself is not then an Affected
Lessor)  its rights and obligations hereunder; provided, however,
that  such transfer shall not be deemed by such Affected  Lessor,
in  its sole discretion, to be disadvantageous to it (other  than
the  economic  disadvantage of ceasing to be a Lessor).   In  the
event  that  the  Affected  Lessor is  unable,  or  otherwise  is
unwilling,  so  to transfer its rights and obligations,  Lessees'
Representative  may designate an alternate financial  institution
to   purchase   the  Affected  Lessor's  rights  and  obligations
hereunder,  at the amount of such Lessor's Outstanding Investment
plus  accrued Variable Rent, indemnities, and other amounts owing
to such Lessor and, subject to the provisions of Sections 7.5 and
11.8,   the  Affected  Lessor  shall  transfer  its  rights   and
obligations  to  such  alternate financial institution  and  such
alternate financial institution shall become a Lessor hereunder.


AVIII                              GENERAL TAX INDEMNITY

S1     General Tax Indemnity.  Lessees and Guarantor agree to pay
or   reimburse  Indemnitees  for,  and  to  indemnify  and   hold
Indemnitees  harmless  from,  all  Impositions  arising  at,   or
relating  to,  any  time prior to or during the  Base  Period  or
Renewal Terms, or upon any termination of the Lease or prior  to,
or  upon  the  return of, the Vehicles to Agent,  and  levied  or
imposed  upon Indemnitees directly or otherwise, by any  Federal,
state  or  local  government or taxing authority  in  the  United
States  or  by  any  foreign country or foreign or  international
taxing authority upon or with respect to: (a) the Vehicles or any
other Collateral; (b) the exportation, importation, registration,
purchase,   ownership,  delivery,  condition,  lease,   sublease,
assignment, storage, transportation, possession, use,  operation,
maintenance,  repair, return, sale (including  to  Agent  or  any
Lessee  pursuant to the Operative Agreements), transfer of  title
or  other  disposition  thereof; (c) the  rentals,  receipts,  or
earnings  arising from any of the Vehicles; or (d) the  Lease  or
any payment made thereunder; provided that this Section 8.1 shall
not  apply to:  (i) Impositions which are based upon or  measured
by  the  Indemnitee's  net  income, or  which  are  expressly  in
substitution  for,  or  relieve  Indemnitee  from,   any   actual
Imposition  based  upon or measured by Indemnitee's  net  income;
(ii) Impositions characterized under local law as franchise,  net
worth,  or shareholder's capital (excluding, however, any  value-
added,   license,   property   or   similar   Impositions);   and
(iii)  Impositions based upon the voluntary transfer,  assignment
or  disposition by Agent or any Lessor of any interest in any  of
the  Vehicles (other than a transfer pursuant to the exercise  of
remedies  under the Operative Agreements, transfers  pursuant  to
the exercise of the Sale Option or Fixed Price Purchase Option, a
transfer  to  Lessees  or  otherwise  pursuant  to  the   Lease).
Notwithstanding  the foregoing provisions of  this  Section  8.1,
Lessees  shall pay or reimburse, and indemnify and hold harmless,
any Lessor which is not incorporated under the laws of the United
States,  or  a  state  thereof,  and  which  has  complied   with
Section  8.5,  from any deduction or withholding  of  any  United
States Federal income tax.

S2     Contest.  Lessees shall pay on or before the time or times
prescribed   by  law  any  Impositions  (except  any  Impositions
excluded  by Section 8.1); provided, however, that Lessees  shall
be  under no obligation to pay any such Imposition so long as the
payment  of  such  Imposition  is  not  delinquent  or  is  being
contested by a Permitted Contest.  If any claim or claims  is  or
are  made against any Indemnitee solely for any Imposition  which
is  subject  to  indemnification  as  provided  in  Section  8.1,
Indemnitee  shall as soon as practicable, but in  no  event  more
than  20  days  after  receipt of formal written  notice  of  the
Imposition or proposed Imposition, notify Lessees' Representative
and  if, in the reasonable opinion of Lessees' Representative and
(in  the  case of any Imposition which may reasonably be expected
to  exceed  $100,000 in the aggregate) tax counsel acceptable  to
the  Indemnitee, there exists a reasonable basis to contest  such
Imposition  (and if the provisos of the definition of  "Permitted
Contest"  continues to be satisfied and so long as  no  Event  of
Default  exists),  Lessees at their expense may,  to  the  extent
permitted  by  applicable  law,  contest  such  Imposition,   and
subsequently  may  appeal  any  adverse  determination,  in   the
appropriate administrative and legal forums; provided that in all
other circumstances, upon notice from Lessees' Representative  to
such  Indemnitee that there exists a reasonable basis to  contest
any such Imposition (as supported by an opinion of tax counsel to
Lessees reasonably acceptable to the Indemnitee), the Indemnitee,
at  Lessees' expense, shall contest any such Imposition.  Lessees
shall  pay  all expenses incurred by the Indemnitee in contesting
any   such   Imposition  (including,  without   limitation,   all
reasonable  attorneys'  and  accountants'  fees,  including   the
allocated  costs  of  internal  counsel),  upon  demand  by   the
Indemnitee.  Lessees shall have the right to participate  in  the
conduct  of any proceedings controlled by the Indemnitee  to  the
extent  that such participation by such Person does not interfere
with  the Indemnitee's control of such contest and Lessees  shall
in  all  events  be kept informed, to the extent practicable,  of
material   developments  relative  to  such   proceedings.    The
Indemnitee shall have the right to participate in the conduct  of
any proceedings controlled by Lessees and the Indemnitee shall in
all  events  be  kept  informed, to the  extent  practicable,  of
material   developments  relative  to  such   proceedings.    The
Indemnitees agree that a contested claim for which Lessees  would
be required to make a reimbursement payment hereunder will not be
settled  or  compromised without Lessees' Representative's  prior
written  consent  (which  consent shall neither  be  unreasonably
delayed  nor  withheld  other than in  good  faith),  unless  the
provisos  of  the  definition of "Permitted  Contest"  would  not
continue to be satisfied.  Indemnitee shall endeavor to settle or
compromise  any such contested claim in accordance  with  written
instructions  received  from  Lessees'  Representative,  provided
that:  (x) Lessees on or before the date the Indemnitee execute a
settlement  or  compromise pays the contested Imposition  to  the
extent  agreed  upon or makes an indemnification payment  to  the
Indemnitee in an amount acceptable to the Indemnitee; and (y) the
settlement  or compromise does not, in the reasonable opinion  of
the  Indemnitee  materially adversely affect the  right  of  such
Lessor  to receive Rent or the Lease Balance or any other payment
pursuant to the Operative Agreements, or involve a material  risk
of  sale,  forfeiture  or  loss of any of  the  Vehicles  or  any
interest therein or any matter described in the provisos  to  the
definition  of "Permitted Contest".  The failure of an Indemnitee
to  timely contest a claim against it for any Imposition which is
subject to indemnification under Section 8.1 and for which it has
an obligation to Lessees to contest under this Section 8.2 in the
manner  required by applicable law or regulations where  Lessees'
Representative has timely requested that such Indemnitee  contest
such  claim  shall relieve Lessees of their obligations  to  such
Indemnitee  under Section 8.1 with respect to such claim  to  the
extent  such failure results in the loss of an effective contest.
If  applicable law requires the payment of a contested Imposition
as  a  condition  to, or regardless of, its being contested,  and
Lessees  choose  to  contest such Imposition  or  to  direct  the
Indemnitee  to  contest such Imposition in accordance  with  this
Section, then Lessees shall provide the Indemnitee with the funds
to  pay  such Imposition, such provision of funds to be deemed  a
non-interest  bearing  loan by Lessees to the  Indemnitee  to  be
repaid  by any recovery of such Imposition from such contest  and
any  remaining  unpaid amount not recovered  to  offset  Lessees'
obligation  to indemnify the Indemnitee for such Imposition.   In
the  event  that  the  Indemnitee  receives  a  refund  (or  like
adjustment) in respect of any Imposition for which the Indemnitee
has  been reimbursed by Lessees, the Indemnitee shall immediately
remit  the amount of such refund (or like adjustment) to Lessees'
Representative,  net of all costs and expenses incurred  by  such
Indemnitee.

S3      Gross  Up.  If an Indemnitee shall not be entitled  to  a
corresponding and equal deduction with respect to any payment  or
Imposition  which Lessees are required to pay or reimburse  under
Article  VII,  Section 8.1 or Section 8.2 (each such  payment  or
reimbursement under Article VII, Section 8.1 or Section  8.2,  an
"original payment") and which original payment constitutes income
to  such Indemnitee, then Lessees shall pay to such Indemnitee on
demand  the  amount of such original payment on a gross-up  basis
such  that,  after subtracting all Impositions  imposed  on  such
Indemnitee  with  respect  to such original  payment  by  Lessees
(including any Impositions otherwise excluded by Section 8.1  and
assuming  for  this purpose that such Indemnitee was  subject  to
taxation at the applicable Federal, state or local marginal rates
used  to  compute such Indemnitee's tax return for  the  year  in
which  such income is taxable), such payments shall be  equal  to
the  original  payment  to  be  received  (net  of  any  credits,
deductions  or  other tax benefits then actually recognized  that
arise  from  the  payment  by  such  Indemnitee  of  any  amount,
including taxes, for which the payment to be received is made).

S4      Tax  Returns.  Except as otherwise provided in the  third
sentence below, Lessees shall prepare and file (whether or not it
is  a  legal  obligation of an Indemnitee)  all  tax  returns  or
reports  that  may  be required with respect to  any  Impositions
assessed,  charged  or  imposed on the  Vehicles  or  the  Lease,
including, but not limited to sales and use taxes, property taxes
(ad  valorem and real property) and any other tax or charge based
upon  the ownership, leasing, subleasing, rental, sale, purchase,
possession, use, operation, delivery, return or other disposition
of  any  of  the  Vehicles or upon the rentals  or  the  receipts
therefrom (excluding, however, any tax based upon the net  income
of  an  Indemnitee  or  any tax which is in substitution  for  or
relief of a tax imposed upon or measured by the net income of  an
Indemnitee).   Lessees  may  notify  in  writing  all  applicable
Authorities having jurisdiction with respect to personal property
taxes  that  one  of  the  Lessees is the appropriate  party  for
receiving notices of (or copies of, if such Authority is required
by  law  to  notify  Agent) assessment, appeal and  payment  with
respect to the Vehicles.  If an Indemnitee is obligated by law to
file any such reports or returns, then Lessees shall, at least 10
days  before the same are due, prepare the same and forward  them
to  the Indemnitee, as appropriate, with detailed instructions as
to  how  to  comply  with  all  applicable  filing  requirements,
together  with  funds  in  the amount  of  any  payment  required
pursuant   thereto.    Indemnitee  shall  forward   to   Lessees'
Representative  at its address listed in Section 11.4  copies  of
all  assessment and valuation notices it receives within 10  days
of  receipt;  provided that Indemnitee's failure to deliver  such
notices  on  a  timely  basis shall not relieve  Lessees  of  any
obligations hereunder.  The Participants agree that neither  they
nor  any  corporation controlled by them, or under common control
with  them,  directly or indirectly will at  any  time  take  any
action  or fail to take any action with respect to the filing  of
any  income  tax return, including an amended income tax  return,
inconsistent  with  the  intention of the  parties  expressed  in
Section 4.1.

S5     Withholding Tax Exemption.  (a) At least five (5) Business
Days  prior  to  the  first date on which  any  Rent  is  payable
hereunder or under any other Operative Agreement for the  account
of  any  Lessor  not incorporated under the laws  of  the  United
States  or a state thereof, such Lessor agrees that it will  have
delivered to Lessees' Representative and Agent two duly completed
copies  of  United States Internal Revenue Service Form  1001  or
4224,  certifying in either case that such Lessor is entitled  to
receive  payments  under this Agreement and the  other  Operative
Agreements without deduction or withholding of any United  States
Federal income taxes.  Each Lessor which so delivers a Form  1001
or  4224 further undertakes to deliver to Lessees' Representative
and  Agent  two  additional copies of such form (or  a  successor
form)  on  or  before the date that such form expires (currently,
three  successive calendar years for Form 1001 and  one  calendar
year  for  Form 4224) or becomes obsolete or after the occurrence
of  any  event  requiring a change in the most  recent  forms  so
delivered  by  it, and such amendments thereto or  extensions  or
renewals  thereof  as  may be reasonably  requested  by  Lessees'
Representative or Agent, in each case certifying that such Lessor
is  entitled  to  receive payments under this Agreement  and  the
other  Operative Agreements without deduction or  withholding  of
any  United States Federal income taxes, unless prior to the date
on which any such delivery would otherwise be required any change
in  treaty, law or regulation or in the interpretation thereof by
the  applicable  taxing  Authority occurring  after  such  Lessor
became   a   Lessor  hereunder  has  rendered  all   such   forms
inapplicable  or  has prevented such Lessor from duly  completing
and  delivering any such form with respect to it and such  Lessor
advises  Lessees' Representative and Agent that, as a  result  of
such change in treaty, law,  regulation or interpretation, it  is
not  capable  of  receiving payments without any  withholding  of
United States Federal income tax.

      (a) At least five (5) Business Days prior to the first date
on  which  any  Rent  is payable hereunder  or  under  any  other
Operative  Agreement for the account of any Lessor who  does  not
have  a  street address in the State of California , such  Lessor
agrees that it will have delivered to Lessees' Representative and
Agent  two duly completed copies of California Form 587  or  590,
certifying in either case that such Lessor is entitled to receive
payments  under this Agreement and the other Operative Agreements
without deduction or withholding of any California income  taxes.
Each  Lessor  which  so  delivers  a  Form  587  or  590  further
undertakes  to deliver to Lessees' Representative and  Agent  two
additional copies of such form (or a successor form) on or before
the  date that such form expires or becomes obsolete or after the
occurrence  of  any event requiring a change in the  most  recent
forms  so  delivered  by it (including, without  limitation,  any
change  in residency or address), and such amendments thereto  or
extensions or renewals thereof as may be reasonably requested  by
Lessees'  Representative or Agent, in each case  certifying  that
such  Lessor is entitled to receive payments under this Agreement
and   the   other  Operative  Agreements  without  deduction   or
withholding of any California income taxes, unless prior  to  the
date  on which any such delivery would otherwise be required  any
change  in  treaty,  law or regulation or in  the  interpretation
thereof  by the applicable taxing Authority occurring after  such
Lessor  became  a Lessor hereunder has rendered  all  such  forms
inapplicable  or  has prevented such Lessor from duly  completing
and  delivering any such form with respect to it and such  Lessor
advises  Lessees' Representative and Agent that, as a  result  of
such  change in treaty, law, regulation or interpretation, it  is
not  capable  of  receiving payments without any  withholding  of
California income tax.


AIX                                AGENT

S1      Appointment  of Agent; Powers and Authorization  to  Take
Certain Actions.

          (a)  Each Lessor irrevocably appoints and authorizes BA
     Leasing & Capital Corporation to act as its agent hereunder,
     with  such powers as are specifically delegated to Agent  by
     the  terms  hereof, together with such other powers  as  are
     reasonably  incidental thereto.  Each Lessor authorizes  and
     directs  Agent to, and Agent agrees for the benefit  of  the
     Lessors,  that, on the Initial Delivery Date it will  accept
     the documents described in Article III of this Participation
     Agreement.    Agent  accepts  the  agency   hereby   created
     applicable  to  it  and agrees to receive all  payments  and
     proceeds  pursuant to the Operative Agreements and  disburse
     such  payments or proceeds in accordance with the  Operative
     Agreements.   Agent shall have no duties or responsibilities
     except  those  expressly set forth in  the  Lease  and  this
     Participation Agreement.  Agent shall not be responsible  to
     any  Lessor  (or to any other Person) (i) for any  recitals,
     statements,  representations  or  warranties  of  any  party
     contained in the Lease, this Participation Agreement, or  in
     any  certificate or other document referred to  or  provided
     for  in,  or  received by any of them under,  the  Operative
     Agreements,  other than the representations  and  warranties
     made  by  Agent  in  Section 5.3, or  (ii)  for  the  value,
     validity,  effectiveness,  genuineness,  enforceability   or
     sufficiency of the Collateral or the title thereto  (subject
     to Agent's obligations under Section 6.3) or of the Lease or
     any  other  document referred to or provided for therein  or
     (iii)  for any failure by any Lessee, Guarantor, any  Lessor
     or  any other third party (other than Agent) to perform  any
     of its obligations under any Operative Agreement.  Agent may
     employ  agents, trustees or attorneys-in-fact, may vest  any
     of  them  with  any property, title, right or  power  deemed
     necessary for the purposes of such appointment and shall not
     be  responsible for the negligence or misconduct of  any  of
     them selected by it with reasonable care.  Neither Agent nor
     any of its directors, officers, employees or agents shall be
     liable or responsible for any action taken or omitted to  be
     taken  by  it or them hereunder, or in connection  herewith,
     except  for  its  or their own gross negligence  or  willful
     misconduct.

           (b)   Agent  shall not have any duty or obligation  to
     manage,  control, use, operate, store, lease, sell,  dispose
     of  or otherwise deal with any Vehicle, any other Collateral
     or  the  Lease, or to otherwise take or refrain from  taking
     any action under, or in connection with, this Agreement, the
     Lease  or  any related document to which Agent is  a  party,
     except  as  expressly provided by the terms hereof,  and  no
     implied  duties of any kind shall be read into any Operative
     Agreement against Agent.  The permissive right of  Agent  to
     take  actions  enumerated in this Agreement  and  the  Lease
     shall  never  be  construed  as  a  duty,  unless  Agent  is
     instructed  or directed to exercise, perform or enforce  one
     or  more rights by the Required Lessors (provided that Agent
     has received indemnification reasonably satisfactory to it).
     Subject  to  Section  9.1(c)  below,  no  provision  of  the
     Operative Agreements shall require Agent to expend  or  risk
     its own funds or otherwise incur any financial liability  in
     the   performance  of  any  of  its  obligations  under  the
     Operative  Agreements,  or in the exercise  of  any  of  its
     rights  or  powers thereunder.  It is understood and  agreed
     that the duties of Agent are ministerial in nature.

           (c)  Except as specifically provided herein, Agent  is
     acting hereunder solely as agent and, except as specifically
     provided  herein, is not responsible to any party hereto  in
     its  individual capacity, except with respect to  any  claim
     arising  from Agent's gross negligence or willful misconduct
     or  any  breach of a representation or covenant made in  its
     individual capacity.

           (d)  Agent may accept deposits from, lend money to and
     otherwise deal with Lessees or any of their Affiliates  with
     the  same  rights as it would have if it were not the  named
     Agent hereunder.

S2      Reliance.  Agent may rely upon, and shall not be bound or
obligated  to  make any investigation into the facts  or  matters
stated   in,  any  certificate,  notice  or  other  communication
(including  any  communication  by  telephone,  telecopy,  telex,
telegram  or  cable) reasonably believed by it to be genuine  and
correct and to have been made, signed or sent by or on behalf  of
the  proper Person or Persons, and upon advice and statements  of
legal counsel, independent accountants and other experts selected
by Agent with due care (including any expert selected by Agent to
aid  Agent  in any calculations required in connection  with  its
duties under the Operative Agreements).

S3      Action Upon Instructions Generally.  Subject to  Sections
9.4  and  9.6, upon written instructions of the Required Lessors,
Agent  shall,  on  behalf of the Lessors,  give  such  notice  or
direction, exercise such right, remedy or power hereunder  or  in
respect of any Vehicle, and give such consent or enter into  such
amendment to any document to which it is a party as Agent as  may
be  specified in such instructions.  Agent shall deliver to  each
Lessor a copy of each notice, report and certificate received  by
Agent pursuant to the Operative Agreements.  Agent shall have  no
obligation to investigate or determine whether there has been  an
Event  of  Default or an Incipient Default.  Agent shall  not  be
deemed  to  have notice or knowledge of an Event  of  Default  or
Incipient  Default  unless  a Responsible  Officer  of  Agent  is
notified  in  writing  of  such Event  of  Default  or  Incipient
Default,  provided  that  Agent shall  be  deemed  to  have  been
notified in writing of any failure of Lessees to pay Rent in  the
amounts  and at the times set forth in Article III of the  Lease.
If Agent receives notice of an Event of Default, Agent shall give
prompt  notice  thereof,  at Lessees' expense,  to  each  Lessor.
Subject  to Sections 9.4 and 9.6 and Article X, Agent shall  take
action  or refrain from taking action with respect to such  Event
of Default as directed by the Required Lessors or, in the case of
a  Payment  Default,  as directed by any Lessor;  provided  that,
unless  and  until  Agent  receives such  directions,  Agent  may
refrain  from  taking any action, or may act in  its  discretion,
with  respect to such Event of Default or Payment Default.  Prior
to  the  date the Lease Balance shall have become due and payable
by  acceleration  pursuant to Section 8.2 of the Lease,  Required
Lessors  may deliver written instructions to Agent to waive,  and
Agent shall waive pursuant thereto, any Event of Default and  its
consequences;    provided  that  in  the   absence   of   written
instructions  from  all  Lessors,  Agent  shall  not  waive   any
(i)  Payment  Default or (ii) covenant or provision which,  under
Section  10.1, cannot be modified or amended without the  consent
of  all Lessors.  As to any matters not expressly provided for by
this  Agreement, Agent shall in all cases be fully  protected  in
acting,  or  in  refraining from acting, hereunder in  accordance
with  instructions  signed  by  the  Required  Lessors  and  such
instructions  of  the Required Lessors and any  action  taken  or
failure to act pursuant thereto shall be binding on each Lessor.

S4      Indemnification.  Each Lessor shall  reimburse  and  hold
Agent  harmless,  ratably  in  accordance  with  its  Outstanding
Investment  at  the time the indemnification is  required  to  be
given,  (but only to the extent that any such indemnified amounts
have  not in fact been paid to Agent by, or on behalf of, Lessees
in  accordance with Section 7.1) from any and all claims, losses,
damages,  obligations,  penalties, liabilities,  demands,  suits,
judgments,  or  causes of action, and all legal proceedings,  and
any   reasonable  costs  or  expenses  in  connection  therewith,
including  allocated  charges, costs  and  expenses  of  internal
counsel  of  Agent and all other reasonable attorneys'  fees  and
expenses incurred by Agent, in any way relating to or arising  in
any  manner  out of (i) any Operative Agreement, the  enforcement
hereof  or  thereof  or  the  consummation  of  the  transactions
contemplated  thereby,  or (ii) instructions  from  the  Required
Lessors  (including, without limitation, the costs  and  expenses
that  Lessees  are obligated to and does not pay  hereunder,  but
excluding  normal administrative costs and expenses  incident  to
the  performance  by Agent of its agency duties  hereunder  other
than  materially  increased  administrative  costs  and  expenses
incurred  as a result of an Event of Default), provided  that  no
Lessor  shall  be liable for any of the foregoing to  the  extent
they arise from (a) the gross negligence or willful misconduct of
Agent,  (b)  the inaccuracy of any representation or warranty  or
breach  of  any  covenant  given  by  Agent  in  Section  5.3  or
Section  6.3 hereof or in the Lease, (c) in the case  of  Agent's
handling of funds, the failure to act with the same care as Agent
uses  in  handling its own funds or (d) any taxes, fees or  other
charges  payable  by  Agent based on or  measured  by  any  fees,
commissions or compensation received by it for acting as Agent in
connection  with the transactions contemplated by  the  Operative
Agreements.

S5     Independent Credit Investigation.  Each Lessor by entering
into this Agreement agrees that it has, independently and without
reliance on Agent or any other Lessor and based on such documents
and information as it has deemed appropriate, made its own credit
analysis  of  Lessees and its own decision  to  enter  into  this
Agreement and each of the other Operative Agreements to which  it
is  a  party and that it will, independently and without reliance
upon  Agent or any other Lessor, and based on such documents  and
information as it shall deem appropriate at the time, continue to
make  its own analysis and decisions in taking action under  this
Agreement  and  any related documents to which  it  is  a  party.
Agent  shall not be required to keep itself informed  as  to  the
performance  or  observance  by Lessees  of  any  other  document
referred to (directly or indirectly) or provided for herein or to
inspect  the properties or books of Lessees.  Except for  notices
or  statements  which Agent is expressly required to  give  under
this  Agreement and for notices, reports and other documents  and
information  expressly required to be furnished  to  Agent  alone
(and  not  also  to each Lessor, it being understood  that  Agent
shall  forward copies of same to each Lessor) hereunder or  under
any  other Operative Agreement, Agent shall not have any duty  or
responsibility to provide any Lessor with copies  of  notices  or
with  any  credit  or other information concerning  the  affairs,
financial  condition  or  business of  Lessees  (or  any  of  its
affiliates) that may come into the possession of Agent or any  of
its Affiliates.

S6      Refusal to Act.  Except for notices and actions expressly
required of Agent hereunder and except for the performance of its
covenants  in  Section 6.3, Agent shall in  all  cases  be  fully
justified  in  failing  or  refusing to  act  unless  (a)  it  is
indemnified to its reasonable satisfaction by the Lessors against
any  and  all  liability  and reasonable  expense  which  may  be
incurred by it by reason of taking or continuing to take any such
action  (provided that such indemnity shall not  be  required  to
extend  to liability or expense arising from any matter described
in  clauses  (a) through (d) of Section 9.4, it being  understood
that no action taken by Agent in accordance with the instructions
of  the  Required Lessors shall be deemed to constitute any  such
matter)  and (b) it is reasonably satisfied that such  action  is
not contrary to any Operative Agreement or to any applicable law.

S7     Resignation or Removal of Agent; Appointment of Successor.
Subject to the appointment and acceptance of a successor Agent as
provided  below,  Agent may resign at any time by  giving  notice
thereof to each Lessor and Lessees or may be removed at any  time
by  written  notice  from the Required Lessors.   Upon  any  such
resignation or removal, the Required Lessors at the time  of  the
resignation or removal shall have the right (with the reasonable,
prompt  approval of Lessees' Representative unless  an  Event  of
Default  shall be continuing) to appoint a successor Agent  which
shall  be  a financial institution having a combined capital  and
surplus  of  not less than $75,000,000.  If, within  30  calendar
days  after  the retiring Agent's giving of notice of resignation
or  receipt of a written notice of removal, a successor Agent  is
not  so appointed and does not accept such appointment, then  the
retiring  or  removed  Agent may appoint a  successor  Agent  and
transfer  to  such successor Agent all rights and obligations  of
the  retiring Agent.  Such successor Agent shall be  a  financial
institution having combined capital and surplus of not less  than
$75,000,000.   Upon  the acceptance of any appointment  as  Agent
hereunder  by  a  successor  Agent, such  successor  Agent  shall
thereupon  succeed  to  and become vested with  all  the  rights,
powers,  privileges and duties of the retiring or  removed  Agent
and the retiring or removed Agent shall be discharged from duties
and  obligations as Agent thereafter arising hereunder and  under
any  related document.  If the retiring Agent does not appoint  a
successor,  any Lessor shall be entitled to apply to a  court  of
competent  jurisdiction for such appointment, and such court  may
thereupon appoint a successor to act until such time, if any,  as
a successor shall have been appointed as above provided.

S8      Separate  Agent.  The Required Lessors may, and  if  they
fail  to do so at any time when they are so required, Agent  may,
for  the  purpose  of  meeting  any  legal  requirements  of  any
jurisdiction in which any Vehicle or Collateral may  be  located,
appoint one or more individuals or corporations either to act  as
co-agent jointly with Agent or to act as separate agent of all or
any part of the Vehicles or Collateral or the Lease, and vest  in
such individuals or corporations, in such capacity, such title to
the  Vehicles or Collateral or the Lease or any part thereof, and
such  rights  or  duties  as  Agent  may  consider  necessary  or
desirable.  Agent shall not be required to qualify to do business
in  any  jurisdiction  where it is not now so  qualified.   Agent
shall  execute,  acknowledge and deliver all such instruments  as
may be required by any such co-agent or separate agent more fully
confirming  such  title, rights or duties  to  such  co-agent  or
separate  agent.   Upon  the  acceptance  in  writing   of   such
appointment by any such co-agent or separate agent, it, she or he
shall  be vested with such interest in the Vehicles or Collateral
and  the  Lease  or any part thereof, and with  such  rights  and
duties,  not  inconsistent with the provisions of  the  Operative
Agreements,   as  shall  be  specified  in  the   instrument   of
appointment,  jointly  with Agent (except insofar  as  local  law
makes it necessary for any such co-agent or separate agent to act
alone),  subject  to all terms of the Operative Agreements.   Any
co-agent  or  separate agent, to the fullest extent permitted  by
legal requirements of the relevant jurisdiction, at any time,  by
an   instrument   in   writing,  shall   constitute   Agent   its
attorney-in-fact and agent, with full power and authority  to  do
all  acts and things and to exercise all discretion on its behalf
and  in  its name.  If any co-agent or separate agent shall  die,
become incapable of acting, resign or be removed, the interest in
the  Vehicles  or  Collateral and the Lease and  all  rights  and
duties  of  such  co-agent or separate agent  shall,  so  far  as
permitted by law, vest in and be exercised by Agent, without  the
appointment of a successor to such co-agent or separate agent.

S9      Termination of Agency.  The agency created  hereby  shall
terminate  upon the final disposition by Agent of all  Collateral
at any time subject hereto and the final distribution by Agent of
all monies or other property or proceeds received pursuant to the
Lease  in  accordance with its terms, provided that at such  time
Lessees shall have complied fully with all the terms hereof.

S10     Compensation  of  Agency.  Lessees shall  pay  Agent  its
reasonable  fees,  costs  and expenses  for  the  performance  of
Agent's  obligations hereunder, in accordance with the  terms  of
the Fee Letter.

S11    Limitations.  It is expressly understood and agreed by and
among  the  parties  hereto that, except  as  otherwise  provided
herein   or  in  the  other  Operative  Agreements:    (a)   this
Participation  Agreement  and the other Operative  Agreements  to
which  Agent  is  a  party are executed  by  Agent,  not  in  its
individual  capacity (except with respect to the  representations
and  covenants of Agent in Sections 5.3 and 6.3), but  solely  as
Agent under the Operative Agreements in the exercise of the power
and  authority conferred and vested in it as such Agent; (b) each
and  all  of the undertakings and agreements herein made  on  the
part  of  Agent are each and every one of them made and  intended
not  as personal undertakings and agreements by Agent, or for the
purpose  or  with the intention of binding Agent personally,  but
are  made  and  intended  for the purpose  of  binding  only  the
Collateral unless expressly provided otherwise; (c) actions to be
taken  by  Agent pursuant to its obligations under the  Operative
Agreements may, in certain circumstances, be taken by Agent  only
upon specific authority of the Lessors; (d) nothing contained  in
the  Operative  Agreements  shall be construed  as  creating  any
liability   on   Agent,  individually  or  personally,   or   any
incorporator  or  any past, present or future subscriber  to  the
capital  stock of, or stockholder, officer or director,  employee
or  agent  of, Agent to perform any covenants either  express  or
implied  contained  herein, all such  liability,  if  any,  being
expressly  waived by the other parties hereto and by  any  Person
claiming  by,  through or under them; and (e) so  far  as  Agent,
individually  or  personally,  is concerned,  the  other  parties
hereto  and  any Person claiming by, through or under them  shall
look  solely  to  the Collateral and Lessees (and  Guarantor,  if
appropriate) for the performance of any obligation under  any  of
the  instruments  referred  to herein;  provided,  however,  that
nothing in this Section 9.11 shall be construed to limit in scope
or  substance the general corporate liability of Agent in respect
of   its   gross  negligence  or  willful  misconduct  or   those
representations,  warranties  and  covenants  of  Agent  in   its
individual  capacity  set forth herein or in  any  of  the  other
agreements contemplated hereby.


AX                                    AMENDMENTS   TO   OPERATIVE
AGREEMENTS

S1       Amendments  to  Operative  Agreements  With  Consent  of
Lessors.   This  Participation Agreement and each  of  the  other
Operative  Agreements  shall be changed,  waived,  discharged  or
terminated with respect to each Lessee, Guarantor and each Lessor
upon   the  ratification  in  writing  of  such  change,  waiver,
discharge  or  termination by Lessee, Guarantor and the  Required
Lessors,  in  which  case  such  change,  waiver,  discharge   or
termination shall be effective as to each Lessor, each Lessee and
Guarantor;   provided  no  such  change,  waiver,  discharge   or
termination  shall,  without  the written  ratification  of  each
Lessor:

           (i)  modify any of the provisions of this Section 10.1
     or  Article  III,  change the definitions  of  "Commitment",
     "Commitment  Percentage",  "Total Commitment"  or  "Required
     Lessors"  or  modify or waive any provision of an  Operative
     Agreement requiring action by the foregoing, or release  any
     Collateral (except as otherwise specifically provided in any
     Operative Agreement);

           (ii)   modify, amend, waive or supplement any  of  the
     provisions  of Articles III, VII, VIII (except as  otherwise
     expressly provided in Section 9.3 hereof), X or XI, Sections
     13.09 or 13.10 of the Lease or Section 11.3 hereof, provided
     that  the  Required Lessors may waive an  Event  of  Default
     other than a Payment Default;

           (iii)   reduce, modify, amend or waive any indemnities
     in  favor  of any Participant, whether pursuant to  Articles
     VII or VIII or otherwise (except that any Person may consent
     to  any reduction, modification, amendment or waiver of  any
     indemnity payable to it);

           (iv)  modify, postpone, reduce or forgive, in whole or
     in  part,  any payment of Rent (other than pursuant  to  the
     terms  of  any Operative Agreement), Lease Balance, Purchase
     Option   Exercise   Amount,  Recourse   Deficiency   Amount,
     Applicable  Percentage  Amount,  interest  or,  subject   to
     clause (iii) above, any other amount payable under the Lease
     or  Participation  Agreement, or modify  the  definition  or
     method  of  calculation of any payment of Rent  (other  than
     pursuant  to  the  terms of any Operative Agreement),  Lease
     Balance,   Purchase   Option   Exercise   Amount,   Recourse
     Deficiency  Amount, Applicable Percentage  Amount  or  other
     amount payable hereunder;

           (v)   consent to any assignment of the Lease releasing
     any  Lessee from its obligations in respect of the  payments
     due  pursuant  to the Operative Agreements or  changing  the
     absolute and unconditional character of such obligations, or
     any  similar assignment of the Guarantee similarly releasing
     Guarantor, or any other release of Guarantor; or

          (vi)  permit the creation of any Lien on the Collateral
     or  any part thereof except as contemplated in the Operative
     Agreements,  or  deprive any Lessor of the  benefit  of  the
     security interest in the Collateral granted by Lessees.

S2       Amendments  to  Operative  Agreements  Affecting  Agent.
Without  the  prior written consent of Agent,  no  amendment  of,
supplement  to,  or  waiver  or modification  of,  any  Operative
Agreement shall adversely affect Agent's rights or immunities  or
modify  or  increase  the  duties or obligations  of  Agent  with
respect to any Operative Agreement.


AXI                                MISCELLANEOUS

S1      Survival  of  Covenants.  All claims  pertaining  to  the
representations,  warranties, covenants  or  indemnities  of  the
Participants  shall survive the termination of the Lease  to  the
extent  such  claims arose out of events occurring or  conditions
existing  prior  to any such termination.  Without  limiting  the
foregoing, the provisions of Article VII and Article VIII  hereof
shall survive the termination of the Lease.

S2      APPLICABLE  LAW.  THIS PARTICIPATION AGREEMENT  SHALL  BE
GOVERNED  BY AND CONSTRUED UNDER THE LAWS OF CALIFORNIA   WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF.

S3      Distribution and Application of Rents and Other Payments.
Except as otherwise specifically provided for in the Lease or  in
Articles  VII and VIII hereof, all amounts of money  received  or
realized  by  Agent  pursuant  to  the  Lease  which  are  to  be
distributed to the Lessors (after payment of accrued  but  unpaid
fees  and expenses and indemnification payments payable to  Agent
in  its capacity as Agent that remain unpaid for 30 days or more)
shall be distributed to each Lessor pro rata, in accordance  with
each  Lessor's  Outstanding Investment and without preference  or
priority of any Lessor over another; provided, however,  that  in
the  case  such moneys are insufficient to pay in full the  whole
amount  due, owing and unpaid, then application shall be made  in
the  manner set forth in Section 8.4 of the Lease.  All  payments
to  the  Lessors shall be made in accordance with Section 3.2  of
the Lease.

S4      Notices.   All notices, demands, declarations,  consents,
directions,   approvals,   instructions,   requests   and   other
communications required or permitted by the terms hereof shall be
in  writing  and  shall be deemed to have been  duly  given  when
delivered   personally,  by  facsimile  (and   confirmed,   which
confirmation may be mechanical), nationally recognized  overnight
courier  or otherwise actually received or 5 Business Days  after
being  deposited  in  the United States mail  certified,  postage
prepaid, addressed as follows:

     If to any Lessee:

          c/o Consolidated Freightways, Inc.
          3240 Hillview Avenue
          Palo Alto, California  94304
          Attn: Treasurer
          Fax: 415-856-1685


     If to Guarantor:

          Consolidated Freightways, Inc.
          3240 Hillview Avenue
          Palo Alto, California 94304
          Attn: Treasurer
          Fax: 415-856-1685

     If to Agent:

          BA Leasing & Capital Corporation
          Four Embarcadero Center, 12th Floor
          San Francisco, CA  94111
          Attn: Contract Administration
          Fax: 415-765-7373

      If  to the Lessors, to their respective addresses set forth
on Schedule I hereto or at such other place as any such party may
designate by notice given in accordance with this Section 11.4.

S5      Transaction Costs; Other Expenses.  Lessees shall pay all
Transaction  Costs  whether or not the transactions  contemplated
hereby close.  In addition, Lessees shall pay or reimburse  Agent
and  the  Lessors for all other out-of-pocket costs and  expenses
(including   allocated  fees  of  internal  counsel)   reasonably
incurred in connection with:  (a) entering into, or the giving or
(in  the case of any amendments, supplements, waivers or consents
proposed  by  Lessees or Guarantor) withholding  of,  any  future
amendments, supplements, waivers or consents with respect to  the
Operative  Agreements  (including without  limitation  any  legal
services  rendered in connection with or arising  under  Sections
6.1  and 6.2 hereof), it being understood that Lessees shall only
be  required  to pay for one firm of legal counsel to  Agent  and
Lessors  in  respect of any transaction under  this  clause  (a);
(b)  any  Casualty  or  termination of the  Lease  or  any  other
Operative Agreement; (c) the negotiation and documentation of any
restructuring  or "workout," whether or not consummated,  of  any
Operative  Agreement;  (d)  the  enforcement  of  the  rights  or
remedies  under the Operative Agreements; (e) further  assurances
requested  pursuant  to  Section  11.13  hereof  or  any  similar
provision  in  other Operative Agreements; (f)  any  transfer  by
Agent  or  a  Lessor of any interest in the Operative  Agreements
during  the  continuance  of an Event of  Default;  and  (g)  the
ongoing fees and expenses of Agent under the Operative Agreements
in accordance with the Fee Letter.

S6       Counterparts.   This  Participation  Agreement  may   be
executed  in any number of counterparts and by different  parties
hereto   on  separate  counterparts,  each  executed  counterpart
constituting an original but all together one agreement.

S7      Severability.  Whenever possible, each provision of  this
Participation Agreement shall be interpreted in such manner as to
be effective and valid under applicable law; but if any provision
of this Participation Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to  the
extent  of  such prohibition or invalidity, without  invalidating
the  remainder  of such provision or the remaining provisions  of
this Participation Agreement.

S8      Successors  and  Assigns; Transfers.  This  Participation
Agreement  shall  be binding upon the parties  hereto  and  their
respective successors and assigns, and shall inure to the benefit
of  the  parties  hereto  and  their  respective  successors  and
permitted  assigns.  None of Lessees or Guarantor may assign  any
of  their  respective rights and obligations under any  Operative
Agreement   except  as  expressly  provided  in   the   Operative
Agreements.

      No  Lessor  shall  assign,  convey  or  otherwise  transfer
(including pursuant to a participation) all or any portion of its
right,  title  or interest in, to or under any of  the  Operative
Agreements,  any  Collateral and its interest  in  the  Vehicles,
except  that  without  the  prior written  consent  of  Agent  or
Lessees'  Representative  (x) any bank or  similar  financial  or
commercial  lending institution may pledge its  interest  in  the
ordinary  course of its business without the consent of  Lessees'
Representative  or  Agent, provided,  that  no  transfer  upon  a
foreclosure pursuant to such a pledge may occur unless the  other
provisions of this Section are complied with, (y) any Lessor  may
transfer all or any portion of its interest to any other existing
Lessor  and (z) any Lessor may transfer any or all of such right,
title and interest upon the satisfaction of each of the following
conditions:

           (a)   Required Notice and Effective Date.  Any  Lessor
     desiring  to  effect  a transfer of its  interest  hereunder
     shall give written notice of each such proposed transfer  to
     Lessees'  Representative and Agent at least  ten  (10)  days
     prior  to such proposed transfer, setting forth the name  of
     such  proposed transferee, the percentage or interest to  be
     retained by such Lessor, if any, and the date on which  such
     transfer  is  proposed to become effective.  All  reasonable
     out-of-pocket costs incurred by Agent in connection with any
     such  disposition by a Lessor under this Section 11.8  shall
     be borne by such Lessor, unless  such transfer is being made
     pursuant  to Section 7.6, in which case such costs shall  be
     borne  by  Lessees.  In the event of a transfer  under  this
     Section  11.8,  any expenses incurred by the  transferee  in
     connection  with its review of the Operative Agreements  and
     its  investigation of the transactions contemplated  thereby
     shall be borne by such transferee or the relevant Lessor, as
     they  may  determine, but shall not be considered costs  and
     expenses  which  Lessees are obligated to pay  or  reimburse
     under  Section  11.5,  unless such transfer  is  being  made
     pursuant to Section 7.6.

            (b)    Assumption  of  Obligations.   Any  transferee
     pursuant  to  this  Section 11.8  shall  have  executed  and
     delivered to Agent a letter substantially in the form of the
     Investor's  Letter  attached  hereto  as  Exhibit   F,   and
     thereupon  the obligations of the transferring Lessor  under
     the  Operative Agreements shall be proportionately  released
     and  reduced to the extent of such transfer.  Upon any  such
     transfer  as above provided, the transferee shall be  deemed
     to  be bound by all obligations (whether or not yet accrued)
     under,  and  to  have  become  a  party  to,  all  Operative
     Agreements  to  which its transferor was a party,  shall  be
     deemed  the  pertinent  "Lessor" for  all  purposes  of  the
     Operative  Agreements and shall be deemed to have made  that
     portion  of  the  payments  pursuant  to  the  Participation
     Agreement previously made or deemed to have been made by the
     transferor  represented by the interest being conveyed;  and
     each  reference herein and in the other Operative Agreements
     to  the  pertinent  "Lessor" shall thereafter  be  deemed  a
     reference to the transferee, to the extent of such transfer,
     for  all  purposes.   Upon any such  transfer,  Agent  shall
     deliver to each Lessor and Lessees a new Schedule I to  this
     Participation  Agreement, revised to  reflect  the  relevant
     information for such new Lessor and the Commitment  of  such
     new  Lessor  (and the revised Commitment of  the  transferor
     Lessor   if  it  shall  not  have  transferred  its   entire
     interest).

           (c)   Employee Benefit Plans.  No Lessor may make  any
     such  assignment, conveyance or transfer to or in connection
     with  any  arrangement or understanding in any way involving
     any employee benefit plan (or its related trust), as defined
     in  Section  3(3) of ERISA, or with the assets of  any  such
     plan   (or  its  related  trust),  as  defined  in   Section
     4975(e)(1) of the Code (other than a governmental  plan,  as
     defined  in Section 3(32) of ERISA), with respect  to  which
     any  Lessee or such Lessor or any of their Affiliates  is  a
     party  in  interest  within  the  meaning  of  ERISA  or   a
     "disqualified person" within the meaning of the Code.

          (d)  Amount of Commitment.  No Lessor may make any such
     assignment,  conveyance or transfer  if,  as  a  consequence
     thereof, the transferor (if such Lessor retains any part  of
     its   Commitment)  or  transferee  Lessor  would   have   an
     Outstanding  Investment  of  less  than  15%  of  the  Lease
     Balance.

           (e)   Representations and Warranties.  Notwithstanding
     anything  to  the contrary set forth above,  no  Lessor  may
     assign,  convey  or  transfer its interest  to  any  Person,
     unless such Person shall have delivered to Agent and Lessees
     a certificate confirming the accuracy of the representations
     and warranties set forth in Section 5.2 with respect to such
     Person  (other  than  as  such  representation  or  warranty
     relates   to   the  execution  and  delivery  of   Operative
     Agreements).

           (f)  Financial Condition.  Any transferee pursuant  to
     this  Section  11.8 shall be a financial institution  having
     combined capital and surplus of at least $75,000,000.

      Each  transferee of a Lessor pursuant to this Section  11.8
shall  be entitled to the benefits of Sections 7.3, 7.4 and  7.5;
provided that no such transferee shall be entitled to receive any
greater  amount  pursuant to such Sections  than  the  transferor
Lessor  would  have been entitled to receive in  respect  of  the
amount of the Commitment transferred by such transferor Lessor to
such transferee if such transfer had not occurred.

S9     JURY TRIAL.  EACH LESSEE AND GUARANTOR WAIVES ANY RIGHT TO
A  TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY  RIGHTS  UNDER  THIS  PARTICIPATION AGREEMENT  OR  ANY  OTHER
OPERATIVE AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT,  DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS PARTICIPATION AGREEMENT  OR  ANY
OPERATIVE  AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND  NOT BEFORE A JURY.

S10     Captions;  Table of Contents.  Section captions  and  the
table of contents used in this Participation Agreement (including
the exhibits and schedules) are for convenience of reference only
and  shall  not  affect  the construction of  this  Participation
Agreement.

S11     FINAL AGREEMENT.  THIS PARTICIPATION AGREEMENT,  TOGETHER
WITH  THE OTHER OPERATIVE AGREEMENTS, REPRESENT THE ENTIRE  FINAL
AGREEMENT  BETWEEN THE PARTIES WITH RESPECT TO  THE  TRANSACTIONS
CONTEMPLATED HEREBY AND IN THE OTHER OPERATIVE AGREEMENTS.   THIS
PARTICIPATION   AGREEMENT   CANNOT  BE  MODIFIED,   SUPPLEMENTED,
AMENDED,   RESCINDED  OR  CONTRADICTED  BY  EVIDENCE  OF   PRIOR,
CONTEMPORANEOUS  OR SUBSEQUENT ORAL AGREEMENTS  OF  THE  PARTIES,
EXCEPT  BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

S12      No   Third-Party   Beneficiaries.    Nothing   in   this
Participation  Agreement or the other Operative Agreements  shall
be deemed to create any right in any Person not a party hereto or
thereto  (other  than  the permitted successors  and  assigns  of
Lessors, Agent, Lessees and Guarantor), and such agreements shall
not  be construed in any respect to be a contract in whole or  in
part for the benefit of any third party except as aforesaid.

S13     Further  Assurances.  Each Lessee, at its  expense,  will
promptly and duly execute and deliver all such documents and take
such  further action as may be necessary or appropriate in  order
to  effect  the intent or purpose of this Participation Agreement
and  the  other Operative Agreements and to establish and protect
the  rights  and remedies created or intended to  be  created  in
favor  of  the Lessors and Agent for the benefit of the  Lessors,
including,  without limitation, if requested by Required  Lessors
at  the  expense  of  Lessees, the recording  or  filing  of  any
Operative Agreement or any other document in accordance with  the
laws of the appropriate jurisdictions.

S14     Reproduction of Documents.  This Participation Agreement,
all  documents constituting Schedules or Exhibits hereto, and all
documents  relating hereto received by a party hereto, including,
without limitation:  (a) consents, waivers and modifications that
may  hereafter be executed; (b) the Certificates of Title and all
other  documents received by the Lessors or Agent  in  connection
with  the  receipt  and/or  acquisition  of  the  Vehicles;   and
(c)  financial  statements, certificates, and  other  information
previously or hereafter furnished to Agent or any Lessor  may  be
reproduced  by  the party receiving the same by any photographic,
photostatic,  microfilm,  micro-card, miniature  photographic  or
other  similar  process.   Each of the  Participants  agrees  and
stipulates  that,  to  the  extent permitted  by  law,  any  such
reproduction  shall  be admissible in evidence  as  the  original
itself  in any judicial or administrative proceeding (whether  or
not  the  original  is  in  existence and  whether  or  not  such
reproduction  was  made by such party in the  regular  course  of
business)  and  that,  to  the  extent  permitted  by  law,   any
enlargement,   facsimile,  or  further   reproduction   of   such
reproduction shall likewise be admissible in evidence.

S15     Consideration  for  Consents to Waivers  and  Amendments.
Each  Lessee  and  Guarantor hereby jointly and severally  agrees
that  it  will  not,  and  that it will not  permit  any  of  its
Affiliates to, offer or give any consideration or benefit of  any
kind  whatsoever  to any Lessor in connection with,  in  exchange
for,  or as an inducement to, such Lessor's consent to any waiver
in  respect  of, any modification or amendment of, any supplement
to,  or  any  other  consent  or approval  under,  any  Operative
Agreement unless such consideration or benefit is offered ratably
to all Lessors.

S16     Submission  to Jurisdiction.  Any suit by  Agent  or  any
Lessor  to  enforce  any  claim  arising  out  of  the  Operative
Agreements  may be brought in any state or Federal court  located
in  San Francisco, California having subject matter jurisdiction,
and  with  respect  to  any such claim, each  Participant  hereby
irrevocably:  (a) submits to the jurisdiction of such courts; and
(b)  consents  to the service of process out of  said  courts  by
mailing  a copy thereof, by registered mail, postage prepaid,  to
Lessees  or Guarantor at their respective addresses specified  in
this  Participation Agreement, and agrees that such  service,  to
the  fullest  extent permitted by law:  (i) shall  be  deemed  in
every  respect effective service of process upon it in  any  such
suit,  action or proceeding; and (ii) shall be taken and held  to
be valid personal service upon and personal delivery to it.  Each
Lessee  and  Guarantor irrevocably waives, to the fullest  extent
permitted by law:  (A) any claim, or any objection, that  it  now
or  hereafter may have, that venue is not proper with respect  to
any  such  suit,  action or proceeding brought in  such  a  court
located   in   San   Francisco,  California  including,   without
limitation,  any claim that any such suit, action  or  proceeding
brought in such court has been brought in an inconvenient  forum;
and (B) any claim that any Lessee or Guarantor is not subject  to
personal jurisdiction or service of process in such forum.   Each
Lessee  and Guarantor agrees that any suit to enforce  any  claim
arising  out of the Operative Agreements or any course of conduct
or dealing of Agent or any Lessor shall be brought and maintained
exclusively  in  any  state  or  Federal  court  located  in  San
Francisco,  California.   Nothing in  this  Section  11.16  shall
affect  the right of Agent or any Lessor to bring any  action  or
proceeding  against any Lessee or Guarantor  or  any  Vehicle  or
other  Collateral in the courts of any other jurisdiction.   Each
Lessee  and Guarantor agrees that a final judgment in any  action
or  proceeding  in  a state or Federal court  within  the  United
States  may be enforced in any other jurisdiction by suit on  the
judgment or in any other manner provided by law.


         [Remainder of page intentionally left blank.]
      IN  WITNESS  WHEREOF, the parties hereto have  caused  this
Participation Agreement to be executed and delivered  as  of  the
date first above written.

CON-WAY CENTRAL EXPRESS,        CON-WAY WESTERN EXPRESS,
INC., as Lessee                 INC.,as Lessee


By /s/Kevin C. Schick           By /s/Kevin C. Schick
Name Printed: Kevin C. Schick   Name Printed: Kevin C. Schick
Title:Treasurer                 Title: Treasurer


CON-WAY SOUTHERN EXPRESS,       CON-WAY SOUTHWESTERN EXPRESS,
INC., as Lessee                 INC., as Lessee


By /s/Kevin C. Schick           By /s/Kevin C. Schick
Name Printed: Kevin C. Schick   Name Printed: Kevin C. Schick
Title: Treasurer                Title: Treasurer


CON-WAY TRANSPORTATION          CONSOLIDATED FREIGHTWAYS
SERVICES,  INC.,  as  Lessee       CORPORATION  OF  DELAWARE,  as
Lessee


By /s/Kevin C. Schick           By /s/Robert E. Wrightson
Name Printed: Kevin C. Schick   Name Printed: Robert E. Wrightson
Title:  V.P.  Controller  and Treasurer     Title:  Senior  V.P.,
Controller and Treasurer


CONSOLIDATED  FREIGHTWAYS,  INC.   CON-WAY  INTERMODAL,  INC.  as
Lessee
as Guarantor and Lessees'
Representative


By /s/R.Guy Kraines             By /s/David F. Morrison
Name Printed: R. Guy Kraines    Name Printed: David F. Morrison
Title: Assistant Treasurer      Title: Treasurer


BA LEASING & CAPITAL CORPORATION,
not individually, but solely
as Agent for the Lessors


By /s/James F. Simpson
Name Printed: James F. Simpson
Title: Vice President


By /s/ Sara Fitch
Name Printed: Sara Fitch
Title: Vice President


LESSORS:

BA LEASING & CAPITAL            ABN AMRO BANK N.V.
CORPORATION


By /s/James F. Simpson
Name Printed: James F. Simpson
Title: Vice President           By /s/Jeffery A. French
                                Name Printed: Jeffery A. French
                                Title: Vice President


By /s/Sara Fitch
Name Printed: Sara Fitch
Title: Vice President


IBJTC LEASING CORPORATION       CREDIT LYONNAIS
                                Cayman Island Branch


By /s/Hiroshi Suzuki            By /s/Thierry F. Vincent
Name Printed: Hiroshi Suzuki    Name Printed: Thierry F. Vincent
Title: Senior Vice President    Title: Authorized Signatory


                           SCHEDULE I
                               TO
                    PARTICIPATION AGREEMENT

         AGENT AND LESSOR ADDRESSES; LESSOR COMMITMENTS

AGENT:   BA LEASING & CAPITAL CORPORATION (address set  forth  in
Section 11.4)


LESSORS:

1.  BA LEASING & CAPITAL CORPORATION
    Commitment: $30,000,000  Commitment Percentage: 50%


2.  ABN AMRO BANK N.V.
    Commitment: $10,000,000  Commitment Percentage: 16-2/3%

3.  IBJTC LEASING CORPORATION
    Commitment: $10,000,000  Commitment Percentage: 16-2/3%

4.  CREDIT LYONNAIS CAYMAN ISLAND BRANCH
    Commitment: $10,000,000  Commitment Percentage: 16-2/3%





                            EXHIBITS


                               TO


                     PARTICIPATION AGREEMENT



                            EXHIBIT A
                               TO
                     PARTICIPATION AGREEMENT




                             FORM OF



                MASTER LEASE INTENDED AS SECURITY

                 Dated as of September 30, 1994


                              among

        CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE,
                 CON-WAY CENTRAL EXPRESS, INC.,
                    CON-WAY INTERMODAL, INC.,
                 CON-WAY SOUTHERN EXPRESS, INC.,
                CON-WAY SOUTHWEST EXPRESS, INC.,
             CON-WAY TRANSPORTATION SERVICES, INC.,
                 CON-WAY WESTERN EXPRESS, INC.,
                           as Lessees,


                 CONSOLIDATED FREIGHTWAYS, INC.,
                   as Lessees' Representative


                               and


                BA LEASING & CAPITAL CORPORATION,
              not individually, but solely as Agent
                for the Lessors from time to time
                under the Participation Agreement


                MASTER LEASE INTENDED AS SECURITY


       This  MASTER  LEASE  INTENDED  AS  SECURITY  (as  amended,
modified,  restated  or  supplemented from  time  to  time,  this
"Lease")  dated  as  of September 30, 1994 is among  (a)  Con-Way
Central   Express,   Inc.,   a  Delaware   corporation,   Con-Way
Intermodal,   Inc,  a  Delaware  corporation,  Con-Way   Southern
Express, Inc., a Delaware corporation, Con-Way Southwest Express,
Inc.,  a  Delaware corporation, Con-Way Transportation  Services,
Inc.,  a  Delaware corporation, Con-Way Western Express, Inc.,  a
Delaware corporation, and Consolidated Freightways Corporation of
Delaware, a Delaware corporation, as Lessees (each a "Lessee" and
collectively, the "Lessees"), each with its principal  office  at
Menlo  Park,  California, (b) Consolidated Freightways,  Inc.,  a
Delaware  corporation  ("Lessees' Representative"),  and  (c)  BA
LEASING & CAPITAL CORPORATION, a California corporation,  not  in
its  individual  capacity, but solely in its  capacity  as  agent
("Agent") for the benefit of the Lessors.

      WHEREAS,  pursuant  to the terms and conditions  set  forth
herein and in that certain Participation Agreement, dated  as  of
September   30,  1994,  (the  "Participation  Agreement")   among
Consolidated   Freightways,   Inc.,   a   Delaware    corporation
("Guarantor"),  Lessees, the several Lessors identified  therein,
and Agent, the Participants have agreed that Agent, on behalf  of
the Lessors, will lease to each Lessee and each Lessee will lease
from  Agent, on behalf of the Lessors, certain personal  property
described in Schedule I hereto and replacements thereto;

      AND  WHEREAS,  capitalized terms  used  but  not  otherwise
defined  herein (including those used in the foregoing  recitals)
shall   have  the  meanings  specified  in  Schedule  X  to   the
Participation Agreement, unless the context otherwise requires;

      AND WHEREAS, each Lessee may from time to time enter into a
Lease  Supplement  with  Agent for the  benefit  of  the  Lessors
covering certain of the Vehicles identified on Schedule I hereto;

      AND  WHEREAS, each Lease Supplement executed from  time  to
time  by  Agent  and  a  Lessee shall be incorporated  herein  by
reference;

      AND  WHEREAS, each Con-Way Lessee shall be primarily liable
for the obligations incurred under each Lease Supplement to which
it is a party and shall be secondarily liable for all obligations
incurred  under the Lease Supplements to which any other  Con-Way
Lessee is a party;

     AND WHEREAS, to secure Lessees' obligations under this Lease
and  the other Operative Agreements, Lessees will grant to Agent,
for  the  benefit  of  the Lessors, a security  interest  in  the
Collateral.

      NOW  THEREFORE,  for good and valuable  consideration,  the
receipt  and  adequacy  of  which are  hereby  acknowledged,  the
parties hereto agree as follows:


                            ARTICLE I
                     DELIVERY AND ACCEPTANCE

      Section  1.1.  Transfer, Acceptance and Lease of  Vehicles.
On  each Delivery Date, subject to the satisfaction or waiver  of
the  conditions  set  forth in Article III of  the  Participation
Agreement,  (a)  each Lessee executing a Lease Supplement  hereby
grants,  assigns,  transfers and sets over unto  Agent,  for  the
benefit  of  the  Lessors, an interest  in  the  Vehicles  to  be
delivered  on  such  Delivery  Date  and  covered  by  the  Lease
Supplement,  (b) Agent hereby agrees to accept delivery  on  such
Delivery  Date of the interest in the Vehicles to be so delivered
pursuant  to  the  terms  of  the  Participation  Agreement   and
simultaneously to lease such Vehicles to such Lessee  under  this
Lease  and  the  applicable Lease Supplement, and (c)  each  such
Lessee  hereby agrees, expressly for the direct benefit of  Agent
and  the  Lessors, to lease from Agent hereunder, for  the  Lease
Term, such Vehicles to be delivered on such Delivery Date.

     Section 1.2.  Acceptance Procedure.  Agent hereby authorizes
one  or  more  employees  of each Lessee,  to  be  designated  by
Lessees'  Representative,  as  the authorized  representative  or
representatives  of  Agent  to accept delivery  of  the  Vehicles
identified  on  Schedule I to each Lease Supplement  executed  by
such  Lessee  on each Delivery Date.  Lessees hereby  agree  that
such acceptance of delivery by such authorized representative  or
representatives and the execution and delivery  by  a  Lessee  on
each  Delivery Date of a Lease Supplement shall, without  further
act, constitute the irrevocable acceptance by such Lessee of  the
Vehicles which are the subject thereof for all purposes  of  this
Lease  and the other Operative Agreements on the terms set  forth
therein and herein.


                           ARTICLE II
                           LEASE TERM

      Section  2.1.   Interim and Base Periods.   Unless  earlier
terminated,  the  term  of this Lease shall  consist  of  (a)  an
interim period commencing, with respect to each Lease Supplement,
on  and  including  the applicable Delivery Date  of  such  Lease
Supplement,   and   ending  on  but  not  including   the   Lease
Commencement  Date  (the "Interim Period"), (b)  a  base  period,
commencing  on  and  including the Lease  Commencement  Date  and
ending  on  but not including the first anniversary thereof  (the
"Base  Period")  and  (c)  any Renewal Terms  (collectively,  the
"Lease Term").

       Section   2.2.   Lease  Commencement  Date.    The   lease
commencement  date  shall  be  December  15,  1994  (the   "Lease
Commencement Date").

      Section  2.3.  Lease Renewal.  Lessees' Representative  may
elect  to  renew  this  Lease for up to four successive  one-year
renewal terms with respect to all, but not less than all, of  the
Vehicles  subject  to all then-existing Lease  Supplements,  and,
solely with respect to Group B Vehicles, for a fifth renewal term
as  to all, but not less than all, of the Group B Vehicles (each,
a "Renewal Term") as provided in Article XI.


                           ARTICLE III
                 RENT; OTHER ECONOMIC PROVISIONS

     Section 3.1.  Rent Payments.  Lessees shall pay to Agent for
the  benefit  of the Lessors the amounts of Interim  Rent,  Basic
Rent  or  Renewal Rent, as applicable, determined  in  accordance
with  this  Section  3.1  and each Lease  Supplement.   Scheduled
installments  of  Basic Rent and Renewal  Rent  may  be  adjusted
pursuant  to Section 6.1.  All computations of interest  pursuant
to  the Operative Agreements shall be made on the basis of actual
number of days elapsed in a 360-day year.

             (a)   Interim  Rent.  With respect  to  the  Interim
     Period  for  the Lease, each Lessee shall pay to Agent,  for
     the  benefit of the Lessors, the amount of Interim Rent  set
     forth on Schedule II to each Lease Supplement to which  such
     Lessee is a party.  Interim Rent under each Lease Supplement
     shall  consist of interest accrued on the Supplement Balance
     of  such  Lease  Supplement at the  Interest  Rate  for  the
     Interim Period of such Lease Supplement and shall be payable
     on the Lease Commencement Date.

             (b)   Basic  Rent.  On each Payment Date during  the
     Base Period, each Lessee shall pay to Agent, for the benefit
     of  the  Lessors, Basic Rent under each Lease Supplement  to
     which  such Lessee is a party, consisting of the  amount  of
     Fixed Rent set forth opposite the applicable Payment Date on
     Schedule II to each such Lease Supplement and Variable  Rent
     accrued  on  the  Supplement  Balance  of  each  such  Lease
     Supplement  during  the Rent Period ended  on  such  Payment
     Date.
             (c)  Renewal Rent.  On each Payment Date during  any
     Renewal Term in effect, each Lessee shall pay to Agent,  for
     the  benefit of the Lessors, Renewal Rent under  each  Lease
     Supplement  to  which such Lessee is a party, consisting  of
     the  amount  of Fixed Rent set forth opposite the applicable
     Payment  Date  on Schedule II to each such Lease  Supplement
     and  Variable Rent accrued on the Supplement Balance of each
     such  Lease Supplement during the Rent Period ended on  such
     Payment Date.


      Section  3.2.  Place and Manner of Payment.  Rent  and  all
other sums due to Agent or any Lessor hereunder shall be paid  in
immediately  available  funds and if payable  to  Agent,  at  the
Agent's  Corporate Office, and if payable to  a  Lessor,  at  the
office of Lessor as it may specify to Lessees herein, or at  such
other  office  of  Agent or Lessor as it may from  time  to  time
specify  to Lessees' Representative in a notice pursuant to  this
Lease.   All such payments shall be received by Agent or  Lessor,
as  applicable, not later than 11:00 a.m. San Francisco time,  on
the  date  due;  funds received after such  time  shall  for  all
purposes  under the Operative Agreements be deemed to  have  been
received  by  Agent  on the next succeeding  Business  Day.   Any
payments  received  by  Agent  not  later  than  11:00  a.m.  San
Francisco  time,  shall  be  paid by  Agent  to  the  Lessors  in
immediately available funds no later than 1:00 p.m. San Francisco
time  on the same day and any payments received by Agent from  or
on  behalf of Lessees after 11:00 a.m. San Francisco time,  shall
be  paid to Lessors as soon after receipt as practicable, but not
later  than  1:00 p.m. San Francisco time on the next  succeeding
Business Day.  Lessees shall pay to Agent, for the benefit of the
Lessors,  or to a Lessor in the case of payments to a Lessor,  on
demand,  interest at the rate per annum which  is  2%  above  the
Interest  Rate in effect from time to time on any overdue  amount
of  Rent,  Administrative Charge or any other payment  due  under
this  Lease  and  (to  the extent permitted  by  applicable  law)
interest  from  the date due (not taking into account  any  grace
period) until payment is made.

     Section 3.3.  Net Lease.  This Lease is a net lease and each
Lessee's  obligation  to  pay all Rent,  Administrative  Charges,
indemnities and other amounts payable hereunder shall be absolute
and  unconditional under any and all circumstances  and,  without
limiting  the generality of the foregoing, Lessees shall  not  be
entitled  to  any abatement or reduction of Rent  or  any  setoff
against  Rent, Administrative Charge, indemnity or other  amount,
whether  arising by reason of any past, present or future  claims
of  any  nature  by any Lessee against Agent or  any  Lessor,  or
otherwise.   Except as otherwise expressly provided herein,  this
Lease  shall not terminate, nor shall the obligations of  Lessees
be  otherwise affected:  (a) by reason of any defect  in,  damage
to, or loss of possession or use, obsolescence or destruction, of
any  or all of the Vehicles, however caused; or (b) by the taking
or  requisitioning of any or all of the Vehicles by  condemnation
or  otherwise;  or  (c) by the invalidity or unenforceability  or
lack  of  due  authorization by Agent  or  any  Lessee  or  other
infirmity of this Lease; or (d) by lack of power or authority  of
Agent  or  any  Lessor  to enter into this  Lease  or  any  other
Operative Agreement; or (e) by the attachment of any Lien of  any
third  party  to  any  Vehicle; or  (f)  by  any  prohibition  or
restriction of or interference with Lessees' use of any or all of
the  Vehicles by any Person; or (g) by the insolvency of  or  the
commencement by or against Agent or any Lessor of any bankruptcy,
reorganization or similar proceeding; or (h) by any other  cause,
whether  similar or dissimilar to the foregoing, any  present  or
future  law to the contrary notwithstanding.  It is the intention
of the parties that all Rent, Administrative Charges, indemnities
and  other amounts payable by Lessees hereunder shall be  payable
in  all  events  in the manner and at the times  herein  provided
unless   Lessees'  obligations  in  respect  thereof  have   been
terminated or modified pursuant to the express provisions of this
Lease.   To  the extent permitted by applicable law, each  Lessee
hereby  waives any and all rights which it may now have or  which
may at any time be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender this Lease, in whole  or  in
part,  except  strictly  in accordance  with  the  express  terms
hereof.   Each rental, indemnity or other payment made by Lessees
hereunder  shall  be final, and no Lessee shall seek  to  recover
(except  as expressly provided in this Lease) all or any part  of
such  payment  from  Agent  for any reason  whatsoever.   Without
affecting Lessees' obligation to pay Rent, Administrative Charges
or  other amounts payable hereunder, Lessees may seek damages for
a  breach  by Agent or any Lessor of its obligations  under  this
Lease or the Participation Agreement.


                           ARTICLE IV
                           WARRANTIES

     Section 4.1.  Warranty Disclaimer.  EACH LESSEE ACKNOWLEDGES
AND  AGREES THAT:  (a) EACH OF THE VEHICLES LEASED BY IT IS OF  A
SIZE,  DESIGN, CAPACITY AND MANUFACTURE SELECTED BY SUCH  LESSEE;
(b)  EACH LESSEE IS SATISFIED THAT THE SAME IS SUITABLE  FOR  ITS
PURPOSES;  (c)  NEITHER AGENT NOR ANY LESSOR  IS  A  MANUFACTURER
THEREOF  OR  A DEALER IN PROPERTY OF SUCH KIND; AND  (d)  NEITHER
AGENT  NOR  ANY LESSOR HAS MADE OR SHALL BE DEEMED TO HAVE  MADE:
(i)  ANY  REPRESENTATION OR WARRANTY OR COVENANT WITH RESPECT  TO
THE  TITLE,  MERCHANTABILITY, FITNESS FOR A  PARTICULAR  PURPOSE,
CONDITION, QUALITY, DESCRIPTION, DURABILITY OR SUITABILITY OF ANY
VEHICLE  IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES
AND  USES  OF  ANY  LESSEE; OR (ii) ANY OTHER  REPRESENTATION  OR
WARRANTY  WHATSOEVER, EXPRESS OR IMPLIED,  WITH  RESPECT  TO  ANY
VEHICLE.

      Section 4.2.  Quiet Enjoyment.  In the absence of an  Event
of  Default,  neither  any Lessor nor the Agent  nor  any  Person
acting  by, through or under any of such Persons, shall take  any
actions  to  interfere with the Lessees' quiet enjoyment  of  the
Vehicles during the Lease Term.


                            ARTICLE V
                 POSSESSION, ASSIGNMENT, USE AND
                     MAINTENANCE OF VEHICLES

      Section  5.1.  Restriction on Lessees' Possession and  Use.
No  Lessee  shall nor shall any Lessee permit any  Sublessee  to:
(a)  use,  operate, maintain or store any Vehicle or any  portion
thereof:  (i) except in accordance with Section 5.3; or  (ii)  in
violation of any applicable insurance policy or law or regulation
of any Authority; (b) except as permitted by Section 6.1, abandon
any Vehicle; (c) except as permitted by Section 5.2, sublease  or
assign,  without the prior written consent of Agent, any  Vehicle
or  permit  the operation thereof by anyone other than a  Lessee;
(d)  except as set forth in Section 5.2, sell, assign or transfer
any  of  its  rights hereunder or in any Vehicle, or directly  or
indirectly create, incur or suffer to exist any Lien, on  any  of
its  rights  hereunder  or in any Vehicle, except  for  Permitted
Liens;  (e)  permit any Vehicle to be titled in any  jurisdiction
other  than  the jurisdiction in which it was titled on  its  the
Delivery  Date, except as permitted under Section 6.1(f)  of  the
Participation  Agreement; and (f) outside of  the  United  States
except  that  each Lessee may (and may permit any  Sublessee  to)
use,  maintain  and  operate any Vehicle outside  of  the  United
States on trips to and from a point of embarkation located within
the  United States.  Each Lessee will defend the transfer of  the
Vehicles by such Lessee to Agent, for the benefit of the Lessors,
against  the claims or demands of all Persons (other than  Lessor
Liens).

      Section  5.2.  Subleases.  So long as no Event  of  Default
shall  have  occurred and be continuing, any Lessee may  sublease
one  or  more Vehicles (i) to a wholly-owned Subsidiary  of  such
Lessee or to another Lessee without the prior written consent  of
Lessors  or  Agent  and  (ii) to any other corporation  organized
under the laws of the United States or any State thereof with the
prior written consent of each of the Lessors, which consent shall
not be unreasonably withheld; provided, that any Sublease entered
into  pursuant  to  this Section 5.2 shall satisfy  each  of  the
following conditions:

                  such  Sublease shall automatically expire  upon
     the  termination  of  the  Lease  Supplement  governing  the
     Vehicle subleased under such Sublease and shall be expressly
     subordinate and subject to this Lease and the Liens  created
     hereunder, and to the applicable Lease Supplement;

                  such  Sublease  shall be in writing  and  shall
     expressly  prohibit  any  further  assignment,  sublease  or
     transfer;

                  such  Sublease  shall not  contain  a  purchase
     option  in  favor  of the Sublessee or any  other  provision
     pursuant  to  which  the  Sublessee  may  obtain  record  or
     beneficial title to the Vehicle leased thereunder  from  the
     Lessee of such Vehicle;

                  such Sublease shall prohibit the Sublessee from
     making any alterations or modifications to the Vehicle  that
     would violate this Lease;

                  such  Sublease shall require the  Sublessee  to
     maintain the Vehicle in accordance with Section 5.3;

                 all of the applicable Lessee's rights, title and
     interest in, to and under such Sublease shall be pledged  by
     such  Lessee  to Agent, for the benefit of the  Lessors,  as
     collateral for such Lessee's obligations under the Operative
     Agreements,  by delivery of an executed original counterpart
     upon  the execution and delivery thereof, marked as the sole
     original  execution counterpart for Uniform Commercial  Code
     purposes,  to the Agent, and each Lessee shall, at  its  own
     cost   and   expense,  do  any  further  act  and   execute,
     acknowledge, deliver, file, register and record any  further
     documents which the Agent or Lessors may reasonably  request
     in  order  to create, perfect, preserve and protect  Agent's
     and Lessors' security interest in such Sublease;

                  no  Lessee shall, without Agent's prior written
     consent, permit or consent to any renewal or extension of  a
     Sublease  at any time when an Event of Default has  occurred
     and is continuing; and

                  Lessees' Representative shall notify Agent  and
     each  Lessor  in  writing not less than  30  days  prior  to
     entering into any Sublease, which notice shall include (i) a
     description  of  the  Vehicle  or  Vehicles  to  be   leased
     thereunder,  and (ii) the street address, city,  county  and
     State  where such Vehicle or Vehicles will be located during
     the term of such Sublease, and Lessees' Representative shall
     provide  copies  of  each Sublease to  Agent  upon  request,
     provided that if such Sublease will require that the Vehicle
     be  titled  or registered in a different jurisdiction,  then
     the applicable Lessee must comply with Section 6.1(f) of the
     Participation Agreement in connection with such titling  and
     registration.

The  liability  of each Lessee with respect to  this  Lease,  the
Lease  Supplements  and  each of the other  Operative  Agreements
shall  not be altered or affected in any way by the existence  of
any Sublease.

      Section 5.3.  Maintenance.  At all times during the term of
this  Lease, Lessees shall at their expense or shall  cause  each
Sublessee  to:  (a) maintain, manage and monitor the Vehicles  in
compliance   in   all  material  respects  with  all   applicable
requirements  of  law, Authority and/or insurance  policies;  (b)
maintain the Vehicles (or cause the Vehicles to be maintained) in
as  good operating order, repair and condition as it was  on  the
date  such Vehicles became subject to this Lease (assuming  that,
as  of  such date, each such Vehicle was in good operating order,
repair  and  condition),  ordinary wear and  tear  excepted;  (c)
maintain, manage and monitor the Vehicles in accordance with  the
terms of all applicable contracts (including, without limitation,
service contracts and insurance contracts) in a manner consistent
with  Lessees' customary practices; and (d) conduct all scheduled
maintenance   of  the  Vehicles  in  conformity   with   Lessees'
maintenance procedures then in effect for similar equipment owned
or   leased  by  Lessees,  and  applicable  warranty  guidelines.
Lessees  shall in any event maintain the Vehicles (or  cause  the
Vehicles  to  be maintained) in at least as good a  condition  as
comparable  equipment owned or leased by them  or  any  of  their
Subsidiaries.   Lessees will maintain or cause to be  maintained,
and  shall permit Agent and Lessors to inspect, any records, logs
and other materials required by any Authority having jurisdiction
to be maintained or filed in respect of any Vehicle.

     Section 5.4.  Repair, Replacement and Substitution.

            (a)  As soon as practicable after a Partial Casualty,
     the  Lessee  of the Vehicle suffering such Partial  Casualty
     shall  repair  and  rebuild the affected  portions  of  such
     Vehicle (or cause such affected portions to be repaired  and
     rebuilt)  to  the  condition required to  be  maintained  by
     Section 5.3.  In the event that any Part which may from time
     to  time be incorporated or installed in or attached to  any
     Vehicle becomes at any time worn out, damaged or permanently
     rendered  unfit  for  use for any reason whatsoever  (unless
     such  event  constitutes  a Casualty,  in  which  event  the
     provisions of Section 6.1 hereof shall apply), the Lessee of
     such  Vehicle,  at its own cost and expense,  will  promptly
     replace,  or  cause  to  be  replaced,  such  Part  with   a
     replacement  Part (a "Replacement Part") in accordance  with
     such  Lessee's customary practices, but in any event subject
     to  Section 5.3.  In addition, each Lessee may, at  its  own
     cost   and  expense,  remove  in  the  ordinary  course   of
     maintenance, service, repair, overhaul or testing, any Part,
     whether  or  not  worn out, destroyed, seized,  confiscated,
     damaged beyond repair or permanently rendered unfit for use;
     provided,  that  such  Lessee will,  at  its  own  cost  and
     expense,  replace  such  Part with  a  Replacement  Part  as
     promptly  as  is  commercially reasonable.  All  Replacement
     Parts  shall  be  free and clear of all  Liens  (other  than
     Permitted Liens) and shall be in as good operating condition
     as,  and  shall have a value and utility at least equal  to,
     the  Parts  replaced, assuming such replaced Parts  and  the
     Vehicles  were  in the condition and repair required  to  be
     maintained  by the terms of Section 5.3.  Any  Part  at  any
     time  removed from any Vehicle shall remain the property  of
     Agent,  for  the  benefit of the Lessors,  no  matter  where
     located, until such time as such Part shall be replaced by a
     Part which has been incorporated or installed in or attached
     to  such  Vehicle  and which meets the  requirements  for  a
     Replacement  Part  specified above.   Immediately  upon  any
     Replacement  Part becoming incorporated or installed  in  or
     attached  to  any  such Vehicle as above  provided,  without
     further  act:  (i) title to the replaced Part (the "Replaced
     Part")  shall thereupon vest in the Lessee of such  Vehicle,
     free  and clear of all rights of Agent and the Lessors,  and
     shall  no  longer  be  deemed a Part  hereunder;  (ii)  such
     Replacement  Part  shall thereupon vest in  Agent,  for  the
     benefit of the Lessors, as provided in Section 12.1 (in  the
     same  manner  as  the underlying Vehicle);  and  (iii)  such
     Replacement  Part shall become subject to  this  Lease,  the
     security  interest  created hereunder,  and  the  applicable
     Lease  Supplement, and shall be deemed part of such  Vehicle
     for  all  purposes hereof to the same extent  as  the  Parts
     incorporated or installed in or attached to such Vehicle  on
     the date such Vehicle became subject to this Lease.

              (b)    Upon  the  satisfaction  of  the  conditions
     specified  in  Section  5.4(a),  and  the  Replacement  Part
     becoming  subject  to this Lease and the  security  interest
     created  hereunder, Agent, on behalf of the  Lessors,  shall
     execute  and  deliver to Lessees such documents  as  may  be
     reasonably necessary to release the Replaced Part  from  the
     terms  and  scope of this Lease (but without representations
     or  warranties, except that the Replaced Part  is  free  and
     clear  of  all  Lessor  Liens),  in  such  form  as  may  be
     reasonably  requested  by  Lessees  and  are  in  form   and
     substance satisfactory to the Required Lessors, all  at  the
     expense of the applicable Lessee.

      Section  5.5.   Alterations, Modifications  and  Additions;
Removable Parts.

             (a)  Except as provided in Sections 5.3 and 5.4,  no
     Lessee  shall remove, replace or alter any Vehicle or  affix
     or  place any accessory, equipment or device on any  Vehicle
     if  such removal, replacement, alteration or addition  would
     materially impair the originally intended function or use or
     materially reduce the value or useful life of such  Vehicle;
     provided,  that each Lessee, at its own expense, will  make,
     or   cause   to   be  made,  any  alteration,   improvement,
     modification  or addition to or in respect  of  any  Vehicle
     that  may be necessary, from time to time, to comply in  all
     material respects with any applicable law, governmental rule
     or  regulation  or  any  provision of any  insurance  policy
     required to be maintained under Section 7.1 (any Parts being
     used  to  comply  with  this provision  shall  be  hereafter
     referred to as "Mandatory Parts").  All Parts affixed to  or
     installed  as  a  part  of any Vehicle, excluding  temporary
     replacements, shall thereupon become subject to the security
     interest  under  this Lease.  If no Event of  Default  shall
     exist,  any Lessee may remove, at its expense, any  Part  at
     any  time  during  the  term of this  Lease  (such  Part,  a
     "Removable Part"):  (i) which is in addition to, and not  in
     replacement  of  or  substitution for, any  Part  originally
     incorporated or installed in or attached to a Vehicle on the
     date  such  item became subject to this Lease  or  any  Part
     inreplacement   of  or  substitution  for  any   such   Part
     originally  incorporated or installed or  attached  to  such
     Vehicle; (ii) which is not a Mandatory Part; and (iii) which
     can  be  removed from any Vehicle without causing damage  to
     such  Vehicle or diminishing or impairing the value, utility
     or  condition which such Vehicle would have had at such time
     had  such  addition not occurred; provided, that:  (x)  such
     removal will not materially impair the value, use or  useful
     life  which the Vehicle would have had at such time had such
     Part  not been affixed or placed to or on such Vehicle;  and
     (y)  such Part is not necessary for the continued normal use
     of  such  Vehicle.  Lessees shall repair all damage  to  any
     Vehicle resulting from any alteration so as to restore  such
     Vehicle  to the condition in which it existed prior to  such
     alteration (ordinary wear and tear excepted).  Neither Agent
     nor  any Lessor shall have any obligation to pay for  or  to
     reimburse   any  Lessee  for  any  alteration  required   or
     permitted by this Section 5.5.

             (b)  As provided in Section 4.1 of the Participation
     Agreement  and  Section  12.1  of  this  Lease,  all   Parts
     incorporated  or installed in or attached or  added  to  any
     Vehicle  as  the  result  of alterations,  modifications  or
     additions  under  this Section 5.5, except Removable  Parts,
     shall,  without further act, vest in Agent, for the  benefit
     of  the  Lessors,  to secure Lessees' performance  of  their
     obligations  under the Operative Agreements, in  the  manner
     provided  in  clause (ii) of Section5.4 (a)  and  the  other
     applicable  provisions  of  Section  5.4  shall  apply  with
     respect to such Parts.  Upon the removal by a Lessee of  any
     Removable Part as provided herein, such Removable Part shall
     no  longer be deemed part of the Vehicle from which  it  was
     removed.   Any  Removable Part not removed by  a  Lessee  as
     provided  herein  prior to the end of the Lease  Term  shall
     become  the  property  of  Agent, for  the  benefit  of  the
     Lessors, atsuch time.

     Section 5.6.  Inspection of Collateral.  Agent, the Lessors,
and each of their agents and representatives shall have the right
at  all reasonable times, upon reasonable notice, to inspect  any
Collateral,  including  without  limitation  any  Certificate  of
Title.


                           ARTICLE VI
         RISK OF LOSS; REPLACEMENT; WAIVER AND INDEMNITY

       Section   6.1.   Casualty.   Upon  a  Casualty,   Lessees'
Representative  shall  give  prompt  written  notice  thereof  (a
"Casualty  Notice") to Agent, which notice shall specify  whether
the Lessee of the Vehicle suffering such casualty will:

             (a)   repay a portion of the Lease Balance equal  to
     the  Casualty Amount together with all Variable Rent accrued
     on such portion of the Lease Balance to the date of payment,
     which  repayment  shall  be made  no  later  than  the  next
     scheduled Payment Date occurring after such Casualty or,  if
     such  Casualty occurs during the last 5 Business Days  of  a
     Rent  Period,  then  no later than the second  Payment  Date
     occurring  after such Casualty, provided that in  any  event
     such  repayment shall be made no later than the last day  of
     the Lease Term (the "Casualty Settlement Date"); or

             (b)   replace the Vehicle with respect to which  the
     Casualty has occurred pursuant to the provisions of  Section
     5.4  (treating such Vehicle, for these purposes, in the same
     manner  as  a  Part), provided that upon the occurrence  and
     during  the  continuance  of  an  Event  of  Default  or  an
     Incipient  Default, such Lessee shall be obligated,  at  the
     option  of  the  Required  Lessors,  to  make  the  payments
     referred to in clause (a) above and shall not be entitled to
     exercise  any right or election of replacement as set  forth
     in this clause (b).

     If a Lessee has elected, or is required, to pay the Casualty
Amount  pursuant to clause (a) above, such Lessee shall  continue
to  make  all  payments  of Rent due under the  applicable  Lease
Supplement  until  and  including the Casualty  Settlement  Date.
Upon  payment  of the Casualty Amount in respect of  any  Vehicle
suffering  a  Casualty  on  such Casualty  Settlement  Date,  the
remaining scheduled payments of Fixed Rent, if any, shall each be
reduced by an amount equal to the product of the scheduled amount
of  such Fixed Rent prior to the receipt of such payment by Agent
multiplied by the Allocation Fraction under such Lease Supplement
of the Vehicle suffering such Casualty.

      Section  6.2.  Casualty  Proceeds.   All  proceeds  of  any
casualty insurance or condemnation proceeds ("Casualty Proceeds")
paid  or  payable to any Lessee or any Affiliate of a  Lessee  by
reason  of a Casualty or Partial Casualty to a Vehicle  shall  be
deposited  into a deposit account established by  Agent  for  the
benefit  of  the  Lessors  (the "Deposit  Account"),  unless  the
applicable Lessee shall have already complied with the applicable
provisions of Section 5.4 or 6.1 with respect to such Casualty or
Partial  Casualty.   Any Casualty Proceeds  paid  to  Agent  with
respect  to a Vehicle suffering a Casualty or a Partial  Casualty
shall  also be deposited in the Deposit Account.  Any  monies  in
the  Deposit  Account  attributable  to  a  Casualty  or  Partial
Casualty  shall  be remitted promptly to Lessees'  Representative
after the applicable Lessee's full compliance with Section 6.1 or
Section   5.4,  as  applicable.   Notwithstanding  the  foregoing
provisions  of this Section 6.2, and provided that  no  Incipient
Default consisting of an event described in Section 8.1(a) or (g)
or  an  Event of Default shall exist, if the aggregate amount  of
Casualty  Proceeds  at any one time outstanding  is  $250,000  or
less,  then  Lessees' Representative (on behalf of the applicable
Lessee)  may  receive  such Casualty Proceeds  directly,  without
delivery  to  Agent;  provided, that such Casualty  Proceeds  are
applied  in  accordance with the requirements of Section  6.1  or
Section 5.4, as applicable.  Notwithstanding any Casualty, all of
the  applicable  Lessee's obligations under this Lease  and  each
Lease  Supplement (including its obligation to make all  payments
of  Rent as they become due) shall continue unabated and in  full
force and effect as provided in this Lease.  Without limiting the
foregoing,  no Lessee's obligations under Section  5.4  shall  be
affected by the amount of any Casualty Proceeds received by  such
Lessee.


                           ARTICLE VII
                            INSURANCE

      Section  7.1.  Required Coverages.  At their  own  expense,
Lessees will maintain the following insurance coverages:

              (a)    primary  automobile  and  general  liability
     insurance  of not less than $3,000,000 per occurrence,  with
     excess  coverages of not less than $5,000,000 per occurrence
     and  $95,000,000 in the aggregate, in each case naming Agent
     and Lessors as additional insureds; and

             (b)  insurance against all risks of loss or physical
     damage to the Vehicles in a primary amount of not less  than
     $250,000  per occurrence and excess "all risk"  coverage  on
     the   Vehicles  in  a  blanket  amount  of  not  less   than
     $100,000,000, which insurance shall name Agent  and  Lessors
     as the sole loss payees.

So  long  as  CF  Financial Services (the  "Insurer")  shall  (i)
maintain  its  good standing as an insurer, (ii)  be  financially
sound  in  the  reasonable judgment of the Required  Lessors  and
(iii)   be   in   compliance  with  all   applicable   regulatory
requirements, Lessees may obtain primary insurance coverage  from
the  Insurer, with retained liability for physical damage to  the
Vehicles  and  for liability coverage required under  clause  (a)
above,  which  retained liability amounts, in  both  such  cases,
shall  be  in  amounts  not greater than  amounts  customary  for
similarly  situated companies operating comparable  equipment  in
the  same industry as Lessees.  Lessees shall obtain their excess
insurance and, if Insurer does not meet the criteria set forth in
the  preceding  sentence  or  is  no  longer  providing  Lessees'
insurance,  their primary insurance, from financially responsible
companies  selected by Lessees and having an A.M. Best rating  of
"A" or better or otherwise acceptable to the Required Lessors.

      Such  insurance shall (i) name Lessors and Agent as insured
parties thereunder as specified above (without any representation
or warranty by, or obligation upon, Agent or any Lessor) as their
interests  may appear, (ii) contain the agreement by the  Insurer
that  any  loss thereunder shall be payable to Agent and  Lessors
notwithstanding any action, inaction or breach of  representation
or  warranty by any Lessee or any other Person having an interest
in  any  Vehicle  (including, without limitation,  Agent  or  any
Lessor),  (iii)  provide that there shall be no recourse  against
Agent or any Lessor for payment of premiums or other amounts with
respect  thereto, (iv) provide that Insurer shall give Agent  and
each   Lessor  at  least  30  days'  prior  written   notice   of
cancellation, lapse or reduction of limits, (v) be  primary  with
respect  to any other insurance carried by or available to  Agent
and  the  Lessors, (vi) provide that the insurer shall waive  any
right  of  subrogation, setoff, counterclaim, or other deduction,
whether  by attachment or otherwise, against Agent or any Lessor,
and (vii) contain a cross-liability clause providing for coverage
of  Agent and each Lessor as if separate policies had been issued
to  each of them.  Lessees will notify Agent and Lessors promptly
of   any   policy  cancellation,  reduction  in  policy   limits,
modification or amendment.

      Section  7.2.  Delivery of Insurance Certificates.   On  or
before   the  Initial  Delivery  Date  and  thereafter  on   each
Subsequent  Delivery Date, Lessees' Representative shall  deliver
to  Agent  certificates of insurance satisfactory  to  Agent  and
Lessors evidencing the existence of all insurance required to  be
maintained  hereunder and setting forth the respective coverages,
limits  of  liability,  carrier,  policy  number  and  period  of
coverage.   Thereafter, throughout the Lease Term,  at  the  time
each  of Lessee's insurance policies is renewed (but in no  event
less  frequently  than  once each year), Lessees'  Representative
shall  deliver to Agent and each Lessor certificates of insurance
evidencing  that  all insurance required by  Section  7.1  to  be
maintained by Lessees with respect to the Vehicles is in effect.


                          ARTICLE VIII
                             DEFAULT

      Section  8.1.   Events  of Default.   The  following  shall
constitute  events  of  default  (each  an  "Event  of  Default")
hereunder and under each Lease Supplement then in effect (whether
any such event shall be voluntary or involuntary or come about or
be  effected by operation of law or pursuant to or in  compliance
with  any  judgment, decree or order of any court or  any  order,
rule or regulation of any Authority):

             (a)   any payment of Rent, Administrative Charge  or
     any  other payment payable by any Lessee hereunder or by any
     Lessee  or  Guarantor  under any other  Operative  Agreement
     (including  without limitation, any amount payable  pursuant
     to Article VII or VIII of the Participation Agreement) shall
     not  be paid when due, and such payment shall be overdue for
     a period of three Business Days;

             (b)   any representation or warranty made by  or  on
     behalf of any Lessee or Guarantor contained in any Operative
     Agreement or in any certificate, letter or other writing  or
     instrument  furnished or delivered to Agent or  Lessors  or,
     pursuant  thereto  shall  at any time  prove  to  have  been
     incorrect in any material respect when made, deemed made  or
     reaffirmed, as the case may be;

             (c)  any Lessee shall default in the performance  or
     observance of any term, covenant, condition or agreement  on
     its  part  to be performed or observed under Article  XI  or
     Section 13.10 of this Lease or under Section 6.1(c), (f)  or
     (g)  of  the  Participation Agreement (except to the  extent
     that  Section 13.10 incorporates Section 5.2, in which  case
     clause (e) of this Section 8.1 shall apply);

            (d)  any Lessee shall default in any material respect
     in  the  performance  or observance of any  term,  covenant,
     condition  or  agreement  on its part  to  be  performed  or
     observed under Section 7.1;

             (e)   any Lessee or Guarantor shall default  in  any
     material  respect  in the performance or observance  of  any
     other term, covenant, condition or agreement on its part  to
     be  performed  or  observed hereunder  or  under  any  other
     Operative  Agreement  (and  not  constituting  an  Event  of
     Default  under  any other clause of this Section  8.1),  and
     such  default shall continue unremedied for a period  of  30
     days  after  the  earlier to occur  of  (i)  written  notice
     thereof  by  Agent  or  any Participant  to  any  Lessee  or
     Guarantor  or  (ii)  any  Lessee  or  Guarantor  has  Actual
     Knowledge thereof;

            (f)  (i) any Lessee or Guarantor shall generally fail
     to  pay, or admit in writing its inability to pay, its debts
     as  they become due, or shall voluntarily commence any  case
     or  proceeding  or file any petition under  any  bankruptcy,
     insolvency   or   similar   law  or   seeking   dissolution,
     liquidation  or  reorganization  or  the  appointment  of  a
     receiver,  agent, custodian or liquidator for  itself  or  a
     substantial  portion of its property, assets or business  or
     to effect a plan or other arrangement with its creditors, or
     shall  file  any  answer admitting the jurisdiction  of  the
     court  and  the  material  allegations  of  any  involuntary
     petition  filed against it in any bankruptcy, insolvency  or
     similar   case  or  proceeding,  or  shall  be   adjudicated
     bankrupt, or shall make a general assignment for the benefit
     of  creditors,  or  shall consent to, or  acquiesce  in  the
     appointment  of, a receiver, agent, custodian or  liquidator
     for  itself or a substantial portion of its property, assets
     or  business; or (ii) corporate action shall be taken by any
     Lessee  or Guarantor for the purpose of effectuating any  of
     the foregoing;

              (g)   involuntary  proceedings  or  an  involuntary
     petition  shall be commenced or filed against any Lessee  or
     Guarantor under any bankruptcy, insolvency or similar law or
     seeking  the  dissolution, liquidation or reorganization  of
     any  Lessee  or Guarantor or the appointment of a  receiver,
     agent,  custodian or liquidator for any Lessee or  Guarantor
     or of a substantial part of the property, assets or business
     of  any  Lessee or Guarantor, or any writ, judgment, warrant
     of  attachment, execution or similar process shall be issued
     or levied against a substantial part of the property, assets
     or business of any Lessee or Guarantor, and such proceedings
     or  petition shall not be dismissed or stayed, or such writ,
     judgment,  warrant  of  attachment,  execution  or   similar
     process  shall  not be released, vacated  or  fully  bonded,
     within  60 days after commencement, filing or levy,  as  the
     case may be;

            (h)  any one or more of the following shall occur and
     the  liability  of the Guarantor and its Subsidiaries  on  a
     consolidated  basis  shall exceed, individually  or  in  the
     aggregate,  $30,000,000: (i) a contribution  failure  occurs
     with respect to any Pension Plan (other than a Multiemployer
     Plan) sufficient to give rise to a lien under Section 302(f)
     of  ERISA or Section 412(n) of the Code with respect to  any
     Pension  Plan (other than a Multiemployer Plan) as to  which
     any  Lessee or any Related Person to any Lessee may have any
     liability,  (ii)  there  shall  exist  an  unfunded  current
     liability (as defined in 302(d)(8) of the Code) with respect
     to any Pension Plan, (iii) steps are undertaken to terminate
     any  Pension  Plan,  (iv) any Reportable Event  occurs  with
     respect  to a Pension Plan for which notice to the PBGC  has
     not  been waived, (v) any action is taken with respect to  a
     Pension Plan which could result in the requirement that  any
     Lessee or any Related Person to any Lessee furnish a bond or
     other  security to the PBGC or such Pension Plan,  (vi)  the
     occurrence of any event which could cause any Lessee or  any
     Related Person to any Lessee to incur any liability, fine or
     penalty with respect to any Pension Plan or any increase  in
     liability  with respect to any Pension Plan,  or  (vii)  the
     occurrence of any event that could result in any increase in
     the liability (or contingent liability) of any Lessee or any
     Related Person to any Lessee with respect to post-retirement
     benefits under any Welfare Plan;

            (i)  any Operative Agreement or the security interest
     granted  under  this Lease shall (except in accordance  with
     its  terms),  in whole or in part, terminate,  cease  to  be
     effective  or  cease  to be the legally valid,  binding  and
     enforceable  obligation of any Lessee or Guarantor,  as  the
     case  may  be, or any Lessee, Guarantor or any Affiliate  of
     any  of  them shall, directly or indirectly, contest in  any
     manner  in  any  court the effectiveness, validity,  binding
     nature  or enforceability thereof; or the security  interest
     securing Lessees' obligations under the Operative Agreements
     shall,  in  whole or in part, cease to be a perfected  first
     priority security interest;

             (j)  Guarantor shall fail to perform in any material
     respect  any  covenant or condition under the Guarantee,  or
     shall repudiate or revoke the Guarantee;

             (k)   there shall have occurred any event of default
     in  the  performance  or observance  of  any  obligation  or
     condition  with  respect  to any indebtedness  owing  by  or
     guaranteed  by any Lessee or Guarantor having  an  aggregate
     principal  amount  in excess of $30,000,000  the  effect  of
     which  is to cause the acceleration of the maturity of  such
     indebtedness  prior to its expressed or stated  maturity  or
     the acceleration of such guarantee;

             (l)   a  final judgment or final judgments  for  the
     payment  of  money  are  entered by a  court  or  courts  of
     competent  jurisdiction against any Lessee or  Guarantor  or
     any Affiliate of any of them, and such judgment or judgments
     remain  undischarged or unstayed for a period (during  which
     execution  shall  not  be effectively stayed)  of  30  days;
     provided,  that the aggregate of all such judgments  exceeds
     $30,000,000; and

             (m)   Guarantor shall default in the performance  or
     observance of any term, covenant, condition or agreement  on
     its  part to be performed or observed under Section  6.2(b),
     (c) or (d) of the Participation Agreement.

      Section  8.2.   Remedies.   If any  Event  of  Default  has
occurred  and is continuing, Agent may exercise in any order  one
or  more or all of the remedies set forth in this Section 8.2 (it
being  understood that no remedy herein conferred is intended  to
be  exclusive of any other remedy or remedies, but each and every
remedy  shall  be  cumulative and shall be in addition  to  every
other remedy given herein or now or hereafter existing at law  or
in equity or by statute).

            (a)  Agent may proceed by appropriate court action or
     actions,  either at law or in equity, to enforce performance
     by  Lessees of the applicable covenants of this Lease or  to
     recover damages for the breach thereof;

             (b)   Agent  may  by  notice in writing  to  Lessees
     terminate  this  Lease, but Lessees shall remain  liable  as
     hereinafter provided; and Agent may, at its option,  do  any
     one  or  more  of  the  following:  (i)  declare  the  Lease
     Balance,  all accrued Variable Rent, all other amounts  then
     payable  by Lessees under this Lease and the other Operative
     Agreements  to be immediately due and payable,  and  recover
     any  other  damages and expenses (including  the  costs  and
     expenses  described in Article VII and Section 11.5  of  the
     Participation Agreement) in addition thereto which Agent  or
     any  Lessor shall have sustained by reason of such Event  of
     Default;  (ii) enforce the security interest given hereunder
     pursuant  to the Uniform Commercial Code or any  other  law;
     (iii)  enter upon the premises where any Vehicle may be  and
     either   remove  such  Vehicle,  with  any  damage  to   the
     improvements on such premises to be borne by Lessees (except
     to  the  extent such damage is due to the willful misconduct
     or  gross  negligence  of Agent or its representatives),  or
     take possession of such Vehicle; and (iv) require Lessees to
     return the Vehicles as provided in Article IX; or

              (c)   Agent  may  require  Lessees  immediately  to
     purchase the Vehicles for an aggregate purchase price  equal
     to  the sum of the Lease Balance, all accrued Variable Rent,
     Administrative Charges and all other amounts  then  due  and
     payable under the Operative Agreements.

Notwithstanding the foregoing, upon the occurrence of  any  Event
of  Default  described in subsection (f) or (g) of  Section  8.1,
Lessees  shall  automatically  and  immediately  be  required  to
purchase  all of the Vehicles for an amount equal to  the  entire
outstanding Lease Balance, together with all accrued unpaid  Rent
and  other  amounts  then  due and payable  under  the  Operative
Agreements   and,   to   the   extent  lawful,   the   applicable
Administrative  Charge,  without  presentment,  demand,   notice,
declaration,  protest or other requirements of any kind,  all  of
which are hereby expressly waived.

      Except for notices expressly otherwise provided for in  the
Operative  Agreements,  each  Lessee hereby  waives  presentment,
demand,  protest  and  notice  of  any  kind  including,  without
limitation, notices of default, notice of acceleration and notice
of intent to accelerate.

      Section  8.3.   Additional Remedies.  In  addition  to  the
remedies set forth in Section 8.2, if any Event of Default  shall
occur, Agent (at the direction of the Required Lessors) may,  but
is  not  required to, sell the Collateral in one or  more  sales.
Any  Lessor  or  Agent  may purchase  all  or  any  part  of  the
Collateral at such sale.  Each Lessee acknowledges that sales for
cash  or  on  credit to a wholesaler, retailer or  user  of  such
Collateral,  at a public or private auction, are all commercially
reasonable.   Any notice required by law of intended  disposition
by  Agent shall be deemed reasonable and properly given if  given
at least 10 days before such disposition.

      Section  8.4.  Proceeds of Sale; Deficiency.  All  payments
received  and amounts held or realized by the Agent at  any  time
when  an  Event of Default shall have occurred and be  continuing
and  after, pursuant to Section 8.2, the Lease Balance shall have
been  accelerated  or  Lessees  are  required  to  purchase   the
Vehicles,  as  well  as  all payments or  amounts  then  held  or
thereafter received by the Agent, shall be distributed  forthwith
upon receipt by the Agent in the following order of priority:

             first:   (i) so much of such payments or amounts  as
     shall be required to reimburse first the Agent and then  any
     Lessor  for  any tax (other than any income tax  payable  on
     interest  and on fees and other compensation of the  Agent),
     expense  or other amount owed to the Agent or any Lessor  in
     connection  with  the  collection or  distribution  of  such
     payments  or amounts to the extent not previously reimbursed
     by  Lessees (including, without limitation, the expenses  of
     any sale, taking or other proceeding, expenses in connection
     with   realizing  on  any  of  the  Collateral,   reasonable
     attorneys' fees and expenses (including the allocated  costs
     of  internal counsel), court costs and any other  reasonable
     expenditures incurred or reasonable expenditures or advances
     made  by the Agent or any Lessor in the protection, exercise
     or enforcement of any right, power or remedy upon such Event
     of  Default  whether pursuant to Section 8.2  or  otherwise)
     shall be so applied by the Agent first to itself and then to
     such  Lessors; and (ii) so much of such payments or  amounts
     as  shall  be  required  to  pay  the  reasonable  fees  and
     compensation of the Agent in connection with acting as Agent
     not  previously paid by Lessees, shall be distributed to the
     Agent;

             second:  so much of such payments or amounts  except
     those specified in clause third below, which under the terms
     of  this  Lease  and  the  other Operative  Agreements  have
     accrued,  including,  without limitation,  such  amounts  as
     shall  be  required to reimburse the then existing or  prior
     Lessors  for  payments  made by them to  Agent  pursuant  to
     Section  9.4 of the Participation Agreement (to  the  extent
     not previously reimbursed);

            third:  so much of such payments or amounts remaining
     as  shall be required to pay in full, in the following order
     of  application,  (a) any applicable Administrative  Charge,
     (b)  all  accrued  unpaid Variable Rent (including,  to  the
     extent  permitted by applicable law, interest  on  interest)
     and  (c) the aggregate unpaid Lease Balance, and in case the
     aggregate  amount so to be distributed shall be insufficient
     to  pay any of the foregoing in full all as aforesaid  then,
     ratably  to  the Lessors in accordance with their respective
     Commitment Percentages; and

            fourth:  so much of such payments or amounts as shall
     remain  shall be distributed to Lessees' Representative  for
     the benefit of the Lessees.

      Section   8.5.   Right to Perform Lessees' Agreements.   If
Lessees fail to perform any of their agreements contained  herein
or  in  any  other  Operative Agreement within  the  time  period
specified  therefor,  whether or not  an  Event  of  Default  has
occurred and is continuing, Agent, upon written instructions from
Required   Lessors  and  receipt  by  Agent  of   indemnification
satisfactory  to  it, and with 3 Business Days' prior  notice  to
Lessees' Representative, may perform such agreement and the  fees
and  expenses  incurred  by Agent (or one  or  more  Lessors)  in
connection  with such performance together with interest  thereon
shall  be  payable by Lessees upon demand.  Interest on fees  and
expenses so incurred by Agent or one or more Lessors shall accrue
at the rate provided in Section 3.2 for overdue payments.


                           ARTICLE IX
                       RETURN OF VEHICLES

      If Agent has terminated this Lease pursuant to Section 8.2,
Lessees  shall  (a)  maintain (or cause  to  be  maintained)  the
Vehicles  in  the condition required by Section  5.3,  store  the
Vehicles without cost to Agent or any Lessor and keep all of  the
Vehicles  insured in accordance with Article VII,  and  (b)  upon
such   termination   forthwith  package  and  deliver   exclusive
possession  of  such Vehicles to Agent, for the  benefit  of  the
Lessors, at a location designated by Agent, together with a  copy
of  an  inventory list of the Vehicles then subject to the Lease,
all then current plans, specifications and operating, maintenance
and  repair  manuals  relating to the  Vehicles  that  have  been
received or prepared by Lessees, appropriately protected  and  in
the  condition  required by Section 5.3  (and  in  any  event  in
condition  to  be placed in immediate service), to  Agent.   This
Article IX shall survive termination of this Lease.


                            ARTICLE X
                        EARLY TERMINATION

      If no Incipient Default or Event of Default shall exist, on
any  scheduled Payment Date after the first Renewal Term, Lessees
may,  at  their  option, upon at least 30 days'  advance  written
notice  from  Lessees' Representative to Agent and  the  Lessors,
purchase  all, but not less than all, of the Vehicles subject  to
all  Lease Supplements then in effect for the sum of (i)  accrued
Variable Rent payable on or prior to such Payment Date, (ii)  the
Lease  Balance,  (iii) the applicable Administrative  Charge,  if
any,  and (iv) all other fees and expenses and other amounts then
due  and  payable pursuant to this Lease and the other  Operative
Agreements.   Upon  the  indefeasible payment  of  such  sums  by
Lessees  in  accordance  with  the provisions  of  the  preceding
sentence,  the obligation of Lessees to pay Rent hereunder  shall
cease,  the  term  of this Lease shall end on the  date  of  such
payment  and  Agent, on behalf of the Lessors, shall execute  and
deliver  to  Lessees'  Representative such documents  as  may  be
reasonably  required to release the Vehicles from the  terms  and
scope  of  this  Lease  (without representations  or  warranties,
except that the Vehicles are free and clear of Lessor Liens),  in
such   form   as   may  be  reasonably  requested   by   Lessees'
Representative,   all  at  Lessees'  sole   cost   and   expense.
Notwithstanding the foregoing, Lessees may, at their  option,  at
any  time  and  from time to time, purchase any  Vehicle  for  an
amount  equal  to  the Casualty Amount of such Vehicle,  together
with  all accrued but unpaid Variable Rent on the portion of  the
Lease  Balance  represented  by such  Casualty  Amount  plus  the
applicable  Administrative Charge thereon, whereupon Agent  shall
transfer  its  interest in such Vehicle to  the  Lessee  of  such
Vehicle  in  accordance with the last two  sentences  of  Section
12.1;  provided that the amount of the Lease Balance repaid  from
the  Initial Delivery Date to any date of determination  pursuant
to   this  sentence  and  pursuant  to  Section  6.1(g)  of   the
Participation  Agreement  shall  not  exceed  $4,000,000  in  the
aggregate.


                           ARTICLE XI
                        LEASE TERMINATION

      Section  11.1.  Lessees' Options.  Not later than 360  days
prior to the last day of the Base Period or any Renewal Term then
in  effect,  Lessees  shall, by delivery of written  notice  from
Lessees' Representative to Agent and the Lessors, exercise one of
the  following options (provided that paragraph (a)  below  shall
not  be  applicable (i) with respect to Group A Vehicles  in  the
third  Renewal Term and (ii) with respect to Group B Vehicles  in
the fourth Renewal Term):

             (a)   renew this Lease with respect to all, but  not
     less  than all, of the Vehicles then subject hereto  for  an
     additional  one year Renewal Term (the "Renewal Option")  on
     the  terms  and  conditions set forth herein and  the  other
     Operative Agreements; or

             (b)   purchase  for  cash for  the  Purchase  Option
     Exercise  Amount all, but not less than all, of the Vehicles
     then  subject to this Lease on the last day of the Base Term
     or  Renewal  Term  with  respect to  which  such  option  is
     exercised (the "Fixed Price Purchase Option"), provided that
     with  respect to the Third Renewal Term, Lessee may exercise
     the  Fixed Price Purchase Option solely with respect to  the
     Group A Vehicles; or

             (c)   sell  on behalf of the Lessors for cash  to  a
     purchaser or purchasers not in any way affiliated  with  any
     Lessee  all,  but  not less than all, of the  Vehicles  then
     subject to this Lease on the last day of the Base Period  or
     of  any  Renewal Term then in effect with respect  to  which
     such option is exercised (the "Sale Option"); provided, that
     if  Lessees  have exercised the Fixed Price Purchase  Option
     solely with respect to the Group A Vehicles pursuant to  the
     proviso  of  clause (b), then the Sale Option shall  not  be
     available   with   respect  to   the   Group   B   Vehicles.
     Simultaneously with a sale pursuant to the Sale Option, each
     Lessee  shall  pay to Agent, as supplemental  Rent  for  the
     benefit  of the Lessors, from the gross proceeds of sale  of
     Vehicles  subject to Lease Supplements to which such  Lessee
     is  a  party,  without deductions or expense  reimbursements
     (the  "Proceeds"),  the aggregate Supplement  Balances  with
     respect  to Lease Supplements to which it is a party  as  of
     the  Termination Date (as determined after  any  payment  of
     Rent  on  such date).  If the Proceeds exceed the  aggregate
     Supplement  Balances  under all Lease Supplements  to  which
     such  Lessee is a party, such Lessee will retain the portion
     of the Proceeds in excess thereof.  If the Proceeds are less
     than the aggregate Supplement Balances as of such date under
     all  Lease Supplements to which such Lessee is a party, such
     Lessee  will  pay  or will cause to be  paid  to  Agent,  as
     supplemental  Rent for the benefit of the  Lessors,  on  the
     Termination  Date,  in addition to the  Proceeds,  the  Sale
     Recourse  Amount,  it being understood,  however,  that  the
     amount payable pursuant to this Section 11.1(c) shall in  no
     event be construed to limit any other obligation of a Lessee
     under   the   Operative   Agreements,   including,   without
     limitation,  pursuant to Articles VII and VIII  and  Section
     11.5  of  the Participation Agreement and Sections 11.3  and
     11.4 of this Lease.  A Lessee shall be treated as a party to
     a  Lease  Supplement  if  such Lessee  is  primarily  liable
     thereunder at the time the sale pursuant to the Sale  Option
     is  consummated, whether or not such Lessee was a  party  to
     such Lease Supplement at the time it was entered into.   The
     "Sale Recourse Amount" applicable to any Lessee shall be, at
     the  option  of  the  Required Lessors,  (x)  the  aggregate
     Applicable  Percentage Amounts with  respect  to  all  Lease
     Supplements  to  which such Lessee is a  party  or  (y)  the
     aggregate  Recourse Deficiency Amounts with respect  to  all
     Lease Supplements to which such Lessee is a party; provided,
     however,  that  in no event shall the Sale  Recourse  Amount
     exceed  the  aggregate  Supplement  Balances  of  all  Lease
     Supplements  to which such Lessee is a party  (after  taking
     into  account  all  payments of Rent  and  Proceeds  applied
     against such Supplemental Balances on the Termination Date).
     Agent,  on  behalf  of  the Lessors, shall  notify  Lessees'
     Representative in writing not later than five Business  Days
     prior  to  the  Termination Date whether the  Sale  Recourse
     Amount(s)   applicable  to  a  Lessee  shall  be  determined
     pursuant  to  clause  (x) or clause  (y)  of  the  preceding
     sentence.   In  addition  to the  amount  determined  to  be
     payable  by each Lessee pursuant to the foregoing provisions
     of this Section 11.1(c), such Lessee shall pay to Agent, for
     the  benefit  of  the Lessors, the applicable Administrative
     Charge  on  the  sum of the Proceeds and the  Sale  Recourse
     Amount.   The  obligation of each Lessee to pay the  amounts
     determined  pursuant  to this Section  11.1(c)  shall  be  a
     recourse  obligation of such Lessee and shall be payable  on
     the Termination Date.  All amounts paid to Agent pursuant to
     this Section 11.1(c) shall be distributed in accordance with
     Section 11.3 of the Participation Agreement.

      Section  11.2.  Election of Options.  Lessees' election  of
the  Fixed Price Purchase Option will be irrevocable at the  time
made, but if Lessees fail to make a timely election, Lessees will
be  deemed,  in the case of the Lease Term and each Renewal  Term
then  in  effect  (other  than the last  Renewal  Term)  to  have
irrevocably  elected the Renewal Option and, in the case  of  the
last  Renewal Term applicable to each Group of Vehicles,  Lessees
will  be  deemed  to  have irrevocably elected  the  Fixed  Price
Purchase  Option  with respect to such Group.  In  addition,  the
Sale  Option  shall automatically be revoked if there  exists  an
Incipient Default or Event of Default at any time after the  Sale
Option  is  properly  elected  and Agent  shall  be  entitled  to
exercise  all  rights  and  remedies provided  in  Article  VIII.
Lessees may not elect the Sale Option if there exists on the date
the election is made an Event of Default or an Incipient Default.

     Section 11.3.  Sale Option Procedures.  If Lessees elect the
Sale Option, each Lessee shall use its best commercial efforts to
obtain  the  highest  all cash purchase price  for  the  Vehicles
covered  by Lease Supplements to which it is a party.  All  costs
related to such sale and delivery, including, without limitation,
the  cost  of sales agents, removal of the Vehicles, delivery  of
documents and Vehicles, certification and testing of the Vehicles
in  any location chosen by the buyer or prospective buyer,  legal
costs,  costs  of  notices, any advertisement  or  other  similar
costs,  or  other  information and of any parts,  configurations,
repairs or modifications desired by a buyer or prospective  buyer
shall  be  borne entirely by Lessees, without regard  to  whether
such  costs  were  incurred by Agent, Lessees or any  potentially
qualified  buyer, and shall in no event be paid from any  of  the
Proceeds.    Neither  Agent  nor  any  Lessor  shall   have   any
responsibility  for procuring any purchaser.   If,  nevertheless,
Agent,  at the direction of the Required Lessors, or any  Lessor,
undertakes  any  sales efforts, Lessees shall promptly  reimburse
Agent  and/or any such Lessor for any charges, costs and expenses
incurred  in  such effort, including any allocated time  charges,
costs  and expenses of internal counsel or other attorneys' fees.
Upon a sale pursuant to the Sale Option, the Vehicles shall be in
the  condition  required  by Section  5.3  and  shall  have  been
maintained  in  good appearance for comparable  equipment  of  an
equivalent  period of service.  Agent, at the  direction  of  the
Required  Lessors, shall determine whether to accept the  highest
all  cash  offer for the Vehicles, which determination  shall  be
made by the Required Lessors.  Any purchaser or purchasers of the
Vehicles  shall not in any way be affiliated with any  Lessee  or
Guarantor.

      Section  11.4.  Appraisals.  If Lessees exercise  the  Sale
Option  and the aggregate Proceeds from the sale of all  Vehicles
subject to this Lease are less than the applicable Lease Balance,
Agent  (upon direction from any Lessor) shall engage an appraiser
of  nationally  recognized  standing,  at  Lessees'  expense,  to
determine (by appraisal methods satisfactory to the Lessors)  the
Fair  Market Value of the Vehicles that were subject to the Lease
as  of  (a) the first day of the Renewal Term in which  the  Sale
Option   was  elected,  and  (b)  the  Termination   Date.    The
Appraiser's  conclusion relating to the first day of the  Renewal
Term  shall  be  used  in  calculating the  "Recourse  Deficiency
Amount."   In addition, if the Appraisal concludes that the  Fair
Market  Value of such Vehicles as of the Termination Date was  in
excess  of  the aggregate Proceeds from the sale of all  Vehicles
subject  to this Lease, Lessees shall promptly pay to Agent,  for
the benefit of the Lessors, such excess, which together with such
aggregate Proceeds so paid to Lessors shall not exceed the  Lease
Balance.


                           ARTICLE XII
                  OWNERSHIP, GRANT OF SECURITY
            INTEREST TO AGENT AND FURTHER ASSURANCES

      Section  12.1.   Grant of Security Interest.   Each  Lessee
hereby  assigns, grants and pledges to Agent, for the benefit  of
the  Lessors, a security interest in all of such Lessee's  right,
title  and  interest,  whether  now  or  hereafter  existing   or
acquired, in the Collateral, to secure (subject to Section 4.4 of
the  Participation Agreement) the payment and performance of  all
obligations  of  Lessees or Guarantor now or  hereafter  existing
under  this Lease or any other Operative Agreement.  Each  Lessee
shall,   at  its  expense,  do  any  further  act  and   execute,
acknowledge,  deliver,  file, register  and  record  any  further
documents  which  Agent or any Lessor may reasonably  request  in
order to protect its title to and perfected security interest  in
the  Collateral, subject to no Liens other than Permitted  Liens,
and  Agent's  rights and benefits under this Lease.  Each  Lessee
shall  promptly  and  duly  execute and  deliver  to  Agent  such
documents and assurances and take such further action as Agent or
any  Lessor may from time to time reasonably request in order  to
carry  out more effectively the intent and purpose of this  Lease
and  the other Operative Agreements, to establish and protect the
rights and remedies created or intended to be created in favor of
Agent  hereunder  and thereunder, and to establish,  perfect  and
maintain the right, title and interest of Agent, for the  benefit
of  the Lessors, in and to the Vehicles, subject to no Lien other
than  Permitted Liens, or of such financing statements or fixture
filings  or other documents with respect hereto as Agent  or  any
Lessor  may  from  time to time reasonably request,  and  Lessees
agree  to  execute  and deliver promptly such  of  the  foregoing
financing  statements and fixture filings or other  documents  as
may  require  execution  by  any Lessee.   Without  limiting  the
foregoing, on and after the date the Lessees elect or are  deemed
to  have  elected  the Fixed Price Purchase Option  or  the  Sale
Option,  Agent shall have the unconditional right to  demand  the
execution  and  delivery by each Lessee of  bills  of  sale  with
respect   to  the  Vehicles  leased  by  such  Lessee   or   such
documentation as may be necessary to cause title to the  Vehicles
to  be  recorded  in the name of Agent, for the  benefit  of  the
Lessors.  To the extent permitted by applicable laws, each Lessee
hereby  authorizes  any  such  financing  statements  and   other
documents  to be filed without the necessity of the signature  of
such  Lessee,  if  such  Lessee  has  failed  to  sign  any  such
instrument within 10 days after request therefor by Agent or  any
Lessor.   Upon Lessees' Representative's request, Agent shall  at
such  time  as all of the obligations of each Lessee  under  this
Lease  or  any  other Operative Agreements have been indefeasibly
paid  or  performed  in  full  (other  than  Lessees'  contingent
obligations,  if  any,  under  Articles  VII  and  VIII  of   the
Participation   Agreement),  execute  and   deliver   termination
statements   and   other  appropriate  documentation   reasonably
requested by Lessees' Representative, all at Lessees' expense, to
evidence  Agent's  release  of  its  security  interest  in   the
Collateral.   At  such time, Agent shall execute and  deliver  to
Lessees'  Representative  such documents  as  may  be  reasonably
necessary (without representations or warranties except that  the
Vehicles  are free and clear of Lessor Liens) to release  Agent's
security interest in the Vehicles.

     Section 12.2.  Retention of Proceeds in the Case of Default.
If  any  Lessee  would be entitled to any amount  (including  any
Casualty  Proceeds  or  Partial Casualty Proceeds)  but  for  the
existence  of  any Event of Default or Incipient  Default,  Agent
shall  hold  such amount as part of the Collateral and  shall  be
entitled to apply such amounts against any amounts due hereunder;
provided,  that  Agent shall distribute such amount  or  transfer
such Vehicle in accordance with the other terms of this Lease  if
and when no Event of Default or Incipient Default exists.

       Section  12.3.   Attorney-in-Fact.   Each  Lessee   hereby
irrevocably  appoints  Agent  as such Lessee's  attorney-in-fact,
with full authority in the place and stead of such Lessee and  in
the  name  of  such Lessee or otherwise, from  time  to  time  in
Agent's   discretion,  upon  the  occurrence   and   during   the
continuance of an Event of Default, to take any action (including
any  action that such Lessee is entitled to take) and to  execute
any  instrument  which  Agent or the Required  Lessors  may  deem
necessary  or advisable to accomplish the purposes of this  Lease
(subject   to   any  limitations  set  forth  in  the   Operative
Agreements), including, without limitation:

             (a)   to  ask,  demand, collect, sue  for,  recover,
     compromise,  receive and give acquittance and  receipts  for
     money due and to become due under or in connection with  the
     Collateral;

             (b)   to receive, endorse and collect any drafts  or
     other instruments, documents and chattel paper in connection
     with the foregoing clause (a);
             (c)   to  file  any  claim or  take  any  action  or
     institute  any  proceedings  which  Agent  may  deem  to  be
     necessary  or  advisable for the collection  thereof  or  to
     enforce  compliance  with the terms and  conditions  of  any
     Collateral; and

             (d)   to perform any affirmative obligations any  of
     Lessee hereunder.

Each  Lessee  hereby acknowledges, consents and agrees  that  the
power  of  attorney  granted pursuant to  this  Section  12.3  is
irrevocable and coupled with an interest.

      Section  12.4.  Release of Liens.  Upon the replacement  or
substitution of any Vehicle or Part or Sublease, or  the  payment
of  all  amounts required pursuant to Section 6.1  in  connection
with  a  Casualty, in each case in compliance with the applicable
provisions  of the Lease, such Vehicle or Part or Sublease  shall
be  released  from  the  security interest created  hereunder  as
provided in Section 5.4(b).


                          ARTICLE XIII
                          MISCELLANEOUS

      Section  13.1.   No Waiver.  No delay or  omission  in  the
exercise  of any right, power or remedy accruing to Agent  and/or
the  Lessors  upon any breach or default of any Lessee  hereunder
shall  impair any such right, power or remedy, nor  shall  it  be
construed  to  be a waiver of any such breach or default,  or  an
acquiescence  therein or of or in any similar breach  or  default
thereafter occurring, nor shall any single or partial exercise of
any  right,  power  or remedy preclude other or further  exercise
thereof, or the exercise of any other right, power or remedy, nor
shall  any  waiver of any single breach or default  be  deemed  a
waiver  of  any other breach or default theretofore or thereafter
occurring.  Any waiver, permit, consent or approval of  any  kind
or character on the part of Agent or the Lessors of any breach or
default  under  this  Lease  must be specifically  set  forth  in
writing and must satisfy the requirements set forth in Article  X
of  the Participation Agreement with respect to approval by Agent
or the Lessors.

     Section 13.2.  Survival of Covenants.  All claims pertaining
to the representations, warranties and covenants of Lessees under
Articles  II,  III, IV, V, VI, VII, X, XI and XIII shall  survive
the   termination of this Lease to the extent such  claims  arose
out  of events occurring or conditions existing prior to any such
termination.

     Section 13.3.  APPLICABLE LAW.  THIS LEASE SHALL BE GOVERNED
BY  AND CONSTRUED UNDER THE LAWS OF CALIFORNIA, WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF.

      Section  13.4.   Effect  and  Modification  of  Lease.   No
variation,  modification,  amendment or  waiver  of  this  Lease,
including  any  schedules  or  exhibits  hereto,  or  any   other
Operative Agreement to which Agent or any Lessor is a party shall
be  valid  unless  the  same  shall have  been  entered  into  in
accordance with Article X of the Participation Agreement.

      Section  13.5.   Notices.  All notices, demands,  requests,
consents, approvals and other instruments hereunder shall  be  in
writing and shall be deemed to have been properly given if  given
as provided for in Section 11.4 of the Participation Agreement.

      Section  13.6.  Counterparts.  This Lease has been executed
in  several  counterparts.  One counterpart has been  prominently
marked  "Agent's  Copy".   Only the counterpart  marked  "Agent's
Copy" shall evidence a monetary obligation of Lessees or shall be
deemed  to be an original or to be chattel paper for purposes  of
the  Uniform  Commercial Code, and such copy  shall  be  held  by
Agent.

       Section  13.7.   Severability.   Whenever  possible,  each
provision of this Lease shall be interpreted in such manner as to
be effective and valid under applicable law; but if any provision
of  this Lease shall be prohibited by or invalid under applicable
law,  such provision shall be ineffective to the extent  of  such
prohibition or invalidity, without invalidating the remainder  of
such provision or the remaining provisions of this Lease.

     Section 13.8.  Successors and Assigns; Benefit of Agreement.
This  Lease shall be binding upon the parties hereto and, subject
to  Sections  13.9 and 13.10 hereof, their respective  successors
and assigns, and shall inure to the benefit of the parties hereto
and  their  respective successors and permitted assigns.   It  is
expressly understood and agreed that Agent is entering into  this
Lease  for  the  benefit  of the Lessors,  who  are  third  party
beneficiaries of this Lease and each Lease Supplement.

      Section 13.9.  Assignment by Agent.  Agent shall not  sell,
assign,  transfer or otherwise dispose of its rights or  delegate
its  obligations under this Lease to any other Person  except  as
permitted or required by the Participation Agreement.

      Section  13.10.   Assignment by Lessees.  No  Lessee  shall
sell,  assign,  transfer or otherwise dispose of  its  rights  or
delegate  its  obligations under this Lease to any other  Person,
except  as  permitted or required by Section 5.2  hereof  or  the
Participation Agreement.

     Section 13.11.  JURY TRIAL.  EACH LESSEE WAIVES ANY RIGHT TO
A  TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY  RIGHTS UNDER THIS LEASE OR ANY RELATED DOCUMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED  OR  WHICH
MAY  IN  THE  FUTURE  BE  DELIVERED  IN  CONNECTION  HEREWITH  OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION
WITH  THIS LEASE OR ANY RELATED DOCUMENT AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

       Section  13.12.   Section  Headings;  Table  of  Contents.
Section  headings and the table of contents used  in  this  Lease
(including  the  schedule) are for convenience of reference  only
and shall not affect the construction of this Lease.

      Section 13.13.  FINAL AGREEMENT.  THIS LEASE, TOGETHER WITH
THE  OTHER  OPERATIVE  AGREEMENTS, REPRESENTS  THE  ENTIRE  FINAL
AGREEMENT  BETWEEN THE PARTIES WITH RESPECT TO  THE  TRANSACTIONS
CONTEMPLATED  BY  THE  LEASE AND THE OTHER OPERATIVE  AGREEMENTS.
THIS  LEASE CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED,  RESCINDED
OR   CONTRADICTED  BY  EVIDENCE  OF  PRIOR,  CONTEMPORANEOUS   OR
SUBSEQUENT  ORAL  AGREEMENTS  OF  THE  PARTIES,  EXCEPT   BY   AN
INSTRUMENT  IN WRITING SIGNED BY THE PARTIES HERETO IN ACCORDANCE
WITH  THE  TERMS OF THE PARTICIPATION AGREEMENT.   THERE  ARE  NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      Section  13.14.  Timeliness of Performance.  The provisions
of  Articles VIII and XI pertaining to the delivery of notice and
the  performance of certain events on dates required by  Articles
VIII and XI are to be strictly adhered to by the parties hereto.


          [remainder of page intentionally left blank]
      IN  WITNESS  WHEREOF, the parties hereto have  caused  this
Lease  to  be  executed and delivered as of the date first  above
written.

CON-WAY CENTRAL EXPRESS,        CON-WAY WESTERN EXPRESS,
INC., as Lessee                 INC.,as Lessee


By /s/Kevin C. Schick           By /s/Kevin C. Schick
Name Printed: Kevin C. Schick   Name Printed: Kevin C. Schick
Title:Treasurer                 Title: Treasurer


CON-WAY SOUTHERN EXPRESS,       CON-WAY SOUTHWESTERN EXPRESS,
INC., as Lessee                 INC., as Lessee


By /s/Kevin C. Schick           By /s/Kevin C. Schick
Name Printed: Kevin C. Schick   Name Printed: Kevin C. Schick
Title: Treasurer                Title: Treasurer


CON-WAY TRANSPORTATION              CONSOLIDATED FREIGHTWAYS
SERVICES,  INC.,  as  Lessee          CORPORATION  OF  DELAWARE,  as
Lessee


By /s/Kevin C. Schick               By /s/Robert E. Wrightson
Name Printed: Kevin C. Schick       Name Printed: Robert E. Wrightson
Title:  V.P.  Controller
    and Treasurer                   Title:  Senior  V.P.,
Controller and Treasurer


CONSOLIDATED  FREIGHTWAYS,  INC.   CON-WAY  INTERMODAL,  INC.  as
Lessee
as Guarantor and Lessees'
Representative


By /s/R.Guy Kraines             By /s/David F. Morrison
Name Printed: R. Guy Kraines    Name Printed: David F. Morrison
Title: Assistant Treasurer      Title: Treasurer


BA LEASING & CAPITAL CORPORATION,
not individually, but solely
as Agent for the Lessors


By /s/Albert Z. Norona
Name Printed:  Albert Z. Norona
Title: Assistant Vice President

By: /s/Sara Fitch
Name Printed: Sara Fitch
Title: Vice President

                            GUARANTEE



      This GUARANTEE (the "Guarantee"), dated as of September 30,
1994,  of  CONSOLIDATED FREIGHTWAYS, INC., a Delaware corporation
(the  "Guarantor"),  is made in favor of  BA  LEASING  &  CAPITAL
CORPORATION,  a  California corporation,  not  individually,  but
solely  as  agent  for the benefit of the Lessors  (the  "Agent")
pursuant  to  that certain Participation Agreement, dated  as  of
September  30,  1994,  among  the  Lessees  identified   therein,
Guarantor,  Agent  and  the several Lessors  identified  therein.
Capitalized  terms  used herein and not otherwise  defined  shall
have   the   meanings  assigned  to  them  in  the  Participation
Agreement, unless the context otherwise requires.

      WHEREAS,  on  the  date  hereof, Guarantor  is  the  direct
beneficial owner of all the issued and outstanding capital  stock
of  CFCD  and Con-Way Transportation Services, Inc. ("CTS"),  and
CTS  is  the  direct  beneficial owner  of  all  the  issued  and
outstanding capital stock of each Con-Way Lessee;

      AND  WHEREAS,  pursuant to the Lease and the  Participation
Agreement,  Agent has agreed, on behalf of Lessors,  to  purchase
the   Vehicles  from  Lessees  and  concurrently  leaseback  such
Vehicles to Lessees pursuant to the Lease;

      AND  WHEREAS,  Lessors  are unwilling  to  enter  into  the
transactions  contemplated  by the Participation  Agreement,  and
Agent  is  unwilling to accept the appointment set forth  in  the
Participation Agreement unless Guarantor executes this  Guarantee
and  as an inducement to Lessors and Agent, Guarantor is entering
into this Guarantee and the guarantee provided for herein;

      AND  WHEREAS,  it is in the best interest of  Guarantor  to
execute   this  Guarantee  inasmuch  as  Guarantor  will   derive
substantial  direct and indirect benefits from  the  transactions
contemplated by the Participation Agreement.

     NOW, THEREFORE, Guarantor covenants and agrees as follows:

     SECTION 1  Guarantee.  Guarantor, as primary obligor and not
as  surety, hereby unconditionally and irrevocably guarantees  to
Agent  (both  individually and in its  capacity  as  Agent),  the
Lessors and each other Indemnitee and their respective successors
and assigns (individually, a "Beneficiary" and, collectively, the
"Beneficiaries") as their respective interests may  appear:   (a)
the  due,  punctual and full payment by Lessees  of  all  amounts
(including,  without limitation, amounts payable  as  damages  in
case of default) to be paid by Lessees pursuant to the Lease, the
Participation Agreement, and/or any other Operative Agreement  to
which  any Lessee is or is to be a party whether such obligations
now  exist or arise hereafter, as and when the same shall  become
due and payable in accordance with the terms thereof; and (b) the
due, prompt and faithful performance of, and compliance with, all
other  obligations, covenants, terms, conditions and undertakings
of Lessees contained in the Participation Agreement, the Lease or
any  other Operative Agreements to which any of them is or is  to
be a party in accordance with the terms thereof (such obligations
referred to in clauses (a) and (b) above being hereinafter called
the  "Obligations").  Guarantor further agrees to pay any and all
costs  and  expenses (including reasonable fees and disbursements
of  counsel)  that may be paid or incurred by any Beneficiary  in
collecting any Obligations and/or in preserving or enforcing  any
rights under this Guarantee or under the Obligations.

      The  Guarantee  is a guaranty of payment,  performance  and
compliance and not of collectability, is in no way conditioned or
contingent   upon  any  attempt  to  collect  from   or   enforce
performance or compliance by any Lessee or upon any other  event,
contingency or circumstance whatsoever, and shall be binding upon
and   against  Guarantor  without  regard  to  the  validity   or
enforceability of the Lease, the Participation Agreement  or  any
other Operative Agreement.

     If for any reason whatsoever Lessees shall fail or be unable
duly,  punctually and fully to pay such amounts as and  when  the
same  shall  become due and payable or to perform or comply  with
any  such  obligation, covenant, term, condition or  undertaking,
Guarantor  will immediately pay or cause to be paid such  amounts
to  the Person or Persons entitled to receive the same (according
to  their  respective interests) under the terms of the Operative
Agreements,  as appropriate, or perform or comply with  any  such
obligation, covenant, term, condition or undertaking or cause the
same to be performed or complied with, together with interest  on
any amount due and owing from the date the same shall have become
due and payable to the date of payment.

      SECTION  2   Guarantor's  Obligations  Unconditional.   The
covenants and agreements of Guarantor set forth in this Guarantee
shall  be  primary obligations of Guarantor, and such obligations
shall  be  continuing, absolute and unconditional, shall  not  be
subject  to  any  counterclaim,  setoff,  deduction,  diminution,
abatement,   recoupment,  suspension,  deferment,  reduction   or
defense (other than full and strict compliance by Guarantor  with
its obligations hereunder), whether based upon any claim that any
Lessee,  Guarantor,  or any other Person  may  have  against  any
Beneficiary or any other Person or otherwise, and shall remain in
full  force  and  effect without regard  to,  and  shall  not  be
released,  discharged or in any way affected by, any circumstance
or  condition whatsoever (whether or not Guarantor or any  Lessee
shall  have  any knowledge or notice thereof) including,  without
limitation:

     (a)  any   amendment,   modification,  addition,   deletion,
          supplement or renewal to or of or other change  in  the
          Obligations or any Operative Agreement or  any  of  the
          agreements  referred to in any thereof,  or  any  other
          instrument  or  agreement applicable to  any  Operative
          Agreement or any of the parties to such agreements,  or
          to   the  Vehicles,  or  any  assignment,  mortgage  or
          transfer  thereof or of any interest  therein,  or  any
          furnishing  or  acceptance of additional security  for,
          guaranty of or right of offset with respect to, any  of
          the  Obligations; or the failure of any security or the
          failure  of  any Beneficiary to perfect or  insure  any
          interest in any collateral; or the release or surrender
          of  possession  by  any Beneficiary of  any  collateral
          (including   without  limitation  any  Certificate   of
          Title);

     (b)  any  failure, omission or delay on the part of  Lessees
          or  any Beneficiary to conform or comply with any  term
          of  any  instrument or agreement referred to in  clause
          (a) above;

     (c)  any waiver, consent, extension, indulgence, compromise,
          release or other action or inaction under or in respect
          of any instrument, agreement, guaranty, right of offset
          or  security  referred to in clause (a)  above  or  any
          obligation  or liability of Lessees or any Beneficiary,
          or  any exercise or non-exercise by any Beneficiary  of
          any  right,  remedy,  power or privilege  under  or  in
          respect  of  any such instrument, agreement,  guaranty,
          right  of offset or security or any such obligation  or
          liability;

     (d)  any     bankruptcy,     insolvency,     reorganization,
          arrangement, readjustment, composition, liquidation  or
          similar  proceeding  with respect to  any  Lessee,  any
          Beneficiary  or  any  other  Person  or  any  of  their
          respective properties or creditors, or any action taken
          by  any trustee or receiver or by any court in any such
          proceeding;

     (e)  any  limitation on the liability or obligations of  any
          Person   under   the  Lease  or  any  other   Operative
          Agreement, the Obligations, any collateral security for
          the   Obligations   or  any  other  guaranty   of   the
          Obligations     or    any    discharge,    termination,
          cancellation, frustration, irregularity, invalidity  or
          unenforceability, in whole or in part, of  any  of  the
          foregoing, or any other agreement, instrument, guaranty
          or security referred to in clause (a) above or any term
          of any thereof;
     (f)  any    defect    in   the   title,   compliance    with
          specifications, condition, design, operation or fitness
          for use of, or any damage to or loss or destruction of,
          or  any  interruption or cessation in the  use  of  the
          Vehicles by Lessees or any other Person for any  reason
          whatsoever   (including,   without   limitation,    any
          governmental  prohibition or restriction, condemnation,
          requisition, seizure or any other act on  the  part  of
          any  governmental or military authority, or any act  of
          God  or of the public enemy) regardless of the duration
          thereof  (even  though  such duration  would  otherwise
          constitute  a frustration of a lease), whether  or  not
          resulting  from  accident and whether  or  not  without
          fault on the part of Lessee or any other Person;

     (g)  any  merger or consolidation of any Lessee or Guarantor
          into  or  with any other Person or any sale,  lease  or
          transfer  of  any  of  the  assets  of  any  Lessee  or
          Guarantor to any other Person;

     (h)  any  change  in the ownership of any shares of  capital
          stock  of  any Lessee, or any corporate change  in  any
          Lessee; or

     (i)  any   other   occurrence  or  circumstance  whatsoever,
          whether similar or dissimilar to the foregoing and  any
          other  circumstance that might otherwise  constitute  a
          legal   or  equitable  defense  or  discharge  of   the
          liabilities  of  a guarantor or surety  or  that  might
          otherwise limit recourse against Guarantor.

     The obligations of Guarantor set forth herein constitute the
full recourse obligations of Guarantor enforceable against it  to
the full extent of all its assets and properties, notwithstanding
any  provision  in  the  Participation  Agreement  or  any  other
agreements limiting the liability of any Beneficiary or any other
Person,  or any agreement by any Lessor to look for payment  with
respect thereto, solely to the Collateral.

      SECTION 3  Waiver and Agreement.  Guarantor waives any  and
all  notice of the creation, renewal, extension or accrual of any
of  the  Obligations and notice of or proof of  reliance  by  any
Beneficiary upon this Guarantee or acceptance of this  Guarantee,
and  the  Obligations,  and any of them,  shall  conclusively  be
deemed  to have been created, contracted or incurred in  reliance
upon  this Guarantee.  Guarantor unconditionally waives,  to  the
extent  permitted by law:  (a) acceptance of this  Guarantee  and
proof of reliance by any Beneficiary hereon; (b) notice of any of
the  matters  referred to in Section 2 hereof, or  any  right  to
consent  or  assent to any thereof; (c) all notices that  may  be
required  by statute, rule of law or otherwise, now or  hereafter
in  effect,  to  preserve  intact any rights  against  Guarantor,
including  without limitation, any demand, presentment,  protest,
proof  or notice of nonpayment under the Participation Agreement,
the Lease or any other Operative Agreement, and notice of default
or  any  failure on the part of any Lessee to perform and  comply
with   any  covenant,  agreement,  term  or  condition   of   the
Participation  Agreement,  the  Lease  or  any  other   Operative
Agreement;  (d)  any  right  to  the  enforcement,  assertion  or
exercise  against  any Lessee of any right, power,  privilege  or
remedy conferred in the Participation Agreement, the Lease or any
other  Operative Agreement or otherwise; (e) any  requirement  of
diligence on the part of any Person; (f) any requirement  of  any
Beneficiary  to  take  any  action  whatsoever,  to  exhaust  any
remedies  or to mitigate the damages resulting from a default  by
any  Person under the Participation Agreement, the Lease  or  any
other  Operative Agreement; (g) any notice of any sale,  transfer
or  other disposition by any Person of any right under, title  to
or  interest in the Participation Agreement, the Lease any  other
Operative  Agreement or the Collateral; (h) any and all  benefits
under  California  Civil Code Sections 2809,  2810,  2819,  2822,
2825,  2845,  2846,  2847, 2848, 2849, 2850, 2899  and  3433  and
California Code of Civil Procedure Sections 580a, 580b, 580d  and
726;  and  (i)  any  other  circumstance  whatsoever  that  might
otherwise  constitute a legal or equitable discharge, release  or
defense  of a guarantor or surety, or that might otherwise  limit
recourse against Guarantor.

      Guarantor agrees that this Guarantee shall be automatically
reinstated  if and to the extent that for any reason any  payment
by  or  on  behalf of Lessees is rescinded or must  be  otherwise
restored by any of the Beneficiaries, whether as a result of  any
proceedings in bankruptcy or reorganization or otherwise.

       Guarantor  further  agrees  that,  without  limiting   the
generality  of this Guarantee, if an Event of Default shall  have
occurred  and be continuing and Agent is prevented by  applicable
law from exercising its remedies under the Lease, Agent shall  be
entitled  to  receive  hereunder  from   Guarantor,  upon  demand
therefor,  the  sums  which would have otherwise  been  due  from
Lessees had such remedies been exercised.

       SECTION  4   Waiver  of  Subrogation.   Guarantor   hereby
irrevocably waives any claim or other rights which it may now  or
hereafter  acquire  against  any  Lessee  that  arise  from   the
existence,  payment,  performance or enforcement  of  Guarantor's
obligations under this Guarantee or any other Operative Document,
including  any right of subrogation, reimbursement,  exoneration,
or  indemnification, any right to participate  in  any  claim  or
remedy  of the Beneficiaries against any Lessee or any Collateral
which  Agent now has or hereafter acquires, whether or  not  such
claim,  remedy  or  right arises in equity,  or  under  contract,
statute  or  common law, including the right to take  or  receive
from  any  Lessee,  directly  or indirectly,  in  cash  or  other
property  or by set-off or in any manner, payment or security  on
account  of such claim or other rights.  If any amount  shall  be
paid to Guarantor in violation of the preceding sentence and  the
Obligations shall not have been indefeasibly paid in  cash,  such
amount  shall  be deemed to have been paid to Guarantor  for  the
benefit  of, and held in trust for, the Beneficiaries, and  shall
forthwith be paid to Agent to be credited and applied pursuant to
the   terms  of  the  Participation  Agreement  and  the   Lease.
Guarantor  acknowledges that it will receive direct and  indirect
benefits  from  the  financing arrangements contemplated  by  the
Participation  Agreement and that the waiver set  forth  in  this
Section  4  is knowingly made in contemplation of such  benefits.
Guarantor  hereby  absolutely,  unconditionally  and  irrevocably
waives  and agrees not to assert or take advantage of any defense
based  upon  an  election  of remedies  by  Agent,  including  an
election   to  proceed  by  non-judicial  rather  than   judicial
foreclosure,  which destroys or impairs any right of  subrogation
of  Guarantor  or the right of Guarantor to proceed  against  any
Person for reimbursement or both.

      SECTION 5  Rights of the Beneficiaries.  This Guarantee  is
made  for  the  benefit  of, and shall be  enforceable  by,  each
Beneficiary as its interest may appear.

      SECTION  6   Term  of Guarantee.  This  Guarantee  and  all
guaranties,  covenants  and  agreements  of  Guarantor  contained
herein  shall continue in full force and effect and shall not  be
discharged  until  such  time as all  the  Obligations  shall  be
indefeasibly  paid  in  full in cash and all  the  agreements  of
Lessees  and  Guarantor  hereunder  and  under  the  Lease,   the
Participation  Agreement and the other Operative Documents  shall
have  been  duly  performed.  If, as a result of any  bankruptcy,
dissolution,    reorganization,   insolvency,   arrangement    or
liquidation  proceedings (or proceedings similar  in  purpose  or
effect) or if for any other reason, any payment received  by  any
Beneficiary in respect of the Obligations is rescinded or must be
returned by such Beneficiary, this Guarantee shall continue to be
effective as if such payment had not been made and, in any event,
as provided in the preceding sentence.

      SECTION 7  Notices, Amendments, etc.  All notices, demands,
requests,  consents,  approvals and other  instruments  hereunder
shall  be  in  writing and shall be deemed to have been  properly
given   if  given  as  provided  for  in  Section  11.4  of   the
Participation Agreement.  No provision of this Guarantee  may  be
amended,  modified, supplemented or waived except as provided  in
Section 10.1 of the Participation Agreement.

      SECTION  8   Severability of this Guarantee.  In  case  any
provisions of this Guarantee or any application thereof shall  be
invalid,  illegal  or unenforceable, the validity,  legality  and
enforceability of the remaining provisions and statements and any
other  application thereof shall not in any way  be  affected  or
impaired  thereby.   To the extent permitted  by  law,  Guarantor
hereby  waives  any  provision of law that renders  any  term  or
provision hereof invalid or unenforceable in any respect.

      SECTION 9   Further Assurances.  Guarantor hereby agrees to
execute and deliver all such instruments and take all such action
as  Agent  or  any  other  Beneficiary  may  from  time  to  time
reasonably  request in order to fully effectuate the purposes  of
this Guarantee.

      SECTION  10   Miscellaneous.  THIS GUARANTEE SHALL  IN  ALL
RESPECTS  BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,  THE
LAWS  OF  THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICT
OF  LAWS  PRINCIPLES  OF  SUCH STATE.  This  Guarantee  shall  be
binding  upon  Guarantor  and  its  successors,  transferees  and
assigns  and  inure to the benefit of and be enforceable  by  the
respective   successors,  transferees,   and   assigns   of   the
Beneficiaries, provided, however, that Guarantor may  not  assign
any  of  its  obligations  hereunder without  the  prior  written
consent  of  Agent and each Lessor.  The table  of  contents  and
headings  in  this Guarantee are for purposes of reference  only,
and shall not limit or otherwise affect the meaning hereof.  This
Guarantee  may be executed in any number of counterparts  and  by
different parties hereto on separate counterparts, each  executed
counterpart  constituting an original, but all of which  together
shall constitute one agreement.

      IN WITNESS WHEREOF, Guarantor has caused this Guarantee  to
be executed as of the date first above written.


                         CONSOLIDATED FREIGHTWAYS, INC.



                         By: /s/ R. Guy Kraines
                         Name Printed: R. Guy Kraines
                         Title: Assistant Treasurer



                  COLLATERAL AGENCY AGREEMENT


      THIS COLLATERAL AGENCY AGREEMENT ("Agreement"), dated as of
October  21,  1994, is by and among (a) Con-Way Central  Express,
Inc.,  a  Delaware  corporation,  Con-Way  Intermodal,  Inc.,   a
Delaware  corporation, Con-Way Southern Express, Inc., a Delaware
corporation,   Con-Way  Southwest  Express,  Inc.,   a   Delaware
corporation,  Con-Way Transportation Services, Inc.,  a  Delaware
corporation,   Con-Way   Western  Express,   Inc.,   a   Delaware
corporation,   and   Consolidated  Freightways   Corporation   of
Delaware, a Delaware corporation, as Lessees (each a "Lessee" and
collectively, the "Lessees"), (b) Consolidated Freightways, Inc.,
a  Delaware  corporation,  as Lessees' Representative  ("Lessees'
Representative"),  (c) the Lessors listed on Schedule  I  to  the
Participation  Agreement  (as  defined  in  Section   1.1)   (the
"Lessors"),  (d) BA Leasing & Capital Corporation,  a  California
corporation,  not in its individual capacity, but solely  in  its
capacity  as  agent ("Agent") for the benefit of the Lessors  and
First  Interstate  Bank  of Oregon, N.A.("Bank"),  as  collateral
agent for Agent (the "Collateral Agent").  Terms used herein  and
not defined herein shall have the meanings assigned such terms in
the Participation Agreement.


                            RECITALS

      1.   WHEREAS, Lessees now own, and will from time  to  time
hereafter acquire, certain Vehicles, which Vehicles may from time
to time be subject to the Lease;

      2.  WHEREAS, Lessees have granted to Agent on behalf of the
Lessors a Lien upon the Vehicles and Lessees have agreed that the
Collateral  Agent  shall have possession of the  Certificates  of
Title related to the Vehicles on behalf of and for the benefit of
Agent; and

     3.  WHEREAS, Bank has agreed to act as Collateral Agent, for
the benefit of Agent and the Lessors.

      NOW,  THEREFORE, in consideration of the premises  and  the
mutual  agreements herein contained, and other good and  valuable
consideration,  the receipt and sufficiency of which  are  hereby
acknowledged, the parties hereto hereby agree as follows:

     SECTION I
                      CERTAIN DEFINITIONS

       Section  I.1   Certain  Definitions.   As  used  in   this
Agreement, the following terms have the following meanings.

           "Agreement" means this Collateral Agency Agreement, as
     it  may  be amended, modified or supplemented from  time  to
     time  in  accordance with its terms and  the  terms  of  the
     Participation Agreement.

           "Collateral  Agent" has the meaning set forth  in  the
     preamble, and includes any successor to Bank in its capacity
     as Collateral Agent.

           "Corporate Trust Office" means the principal corporate
     trust  office  of  the Collateral Agent, located  at:  First
     Interstate Bank of Oregon, N.A., Trust Loan Servicing  MP-2,
     2701  N.W.  Vaughn St., Portland, Oregon 97210, or  at  such
     other  address  as the Collateral Agent may  designate  from
     time to time by notice to Lessees' Representative and Agent.

             "Participation   Agreement"   means   that   certain
     Participation  Agreement, dated as of  September  30,  1994,
     among  Lessees,  Lessees'  Representative,  Agent  and   the
     Lessors listed on Schedule I thereto, as such agreement  may
     be  amended, modified or supplemented from time to  time  in
     accordance with its terms.

           "Release Notice" has the meaning set forth in  Section
     5.1.

      Section  I.2  Interpretation and Construction.  Unless  the
context  of this Agreement otherwise clearly requires, references
to  the plural include the singular, to the singular include  the
plural  and  to the part include the whole.  The words  "hereof",
"herein",  "hereunder" and similar terms in this Agreement  refer
to  this Agreement as a whole and not to any particular provision
of this Agreement.  Unless otherwise stated in this Agreement, in
the  computation of a period of time from a specified date  to  a
later  specified date, the word "from" means "from and including"
and  the  words  "to" and "until" each means "to but  excluding".
Sections and other headings contained in this Agreement  are  for
reference  purposes  only and shall not  control  or  effect  the
construction  of this Agreement or the interpretation  hereof  in
any  respect.  Section, subsection and exhibit references are  to
this  Agreement  unless otherwise specified.   As  used  in  this
Agreement, the masculine, feminine or neuter gender shall each be
deemed  to  include the others whenever the context so indicates.
Terms  not otherwise defined herein which are defined in the  UCC
as  in effect in the state of California on the date hereof shall
have  the respective meanings as described as such terms  therein
unless the context otherwise clearly requires.

     SECTION II
           APPOINTMENT AND DUTIES OF COLLATERAL AGENT

     Section II.1  Appointment.  Lessors and Agent hereby appoint
Bank  as  their Collateral Agent under and for purposes  of  this
Agreement.  Lessors and Agent authorize the Collateral  Agent  to
act their behalf under this Agreement and to exercise such powers
hereunder  as  are specifically delegated to or required  of  the
Collateral Agent by the terms hereof and with such powers as  may
be  reasonably  incidental  thereto.  Bank  hereby  accepts  such
appointment and agrees that all of its right, title and  interest
in  and  to  the  Certificates of Title shall be solely  for  the
benefit  of  Agent and the Lessors.  The Collateral  Agent  shall
take  all  instructions hereunder from Agent, on  behalf  of  the
Lessors.   Lessees and Lessees' Representative hereby acknowledge
and accept the appointment of Bank as Collateral Agent under, and
for  purposes of, this Agreement. The Collateral Agent shall  not
be  required to take any action other than as expressly set forth
herein,  or  to prosecute or defend any suit in respect  of  this
Agreement, unless it is indemnified to its satisfaction.

      Section  II.2   Possession of Certificates  of  Title.  The
Collateral  Agent  shall  maintain  physical  possession  of  the
Certificates of Title at its Corporate Trust Office in a  secure,
fire-proof  location,  except as otherwise specified  herein,  as
custodian  and bailee for the benefit of Agent and  the  Lessors.
The  Collateral Agent shall segregate such Certificates of  Title
in  such  a way that they may be readily identified and separated
from  other certificates of title that the Collateral  Agent  may
hold.   The  Collateral Agent shall permit each Lessee  (and  any
representatives  on their behalf) and Agent to inspect  and  make
copies of the Certificates of Title during normal business hours.

      Section  II.3   Agent  to Provide Schedules.   Agent  shall
provide  to the Collateral Agent from time to time notices  (each
such notice a "Title Notice") attaching lists of Certificates  of
Title  to  be  held  by  the Collateral Agent  pursuant  to  this
Agreement and to be delivered to the Collateral Agent by  a  date
specified  in  such Title Notice.  Each list of  Certificates  of
Title  attached  to  a  Title Notice shall  include  the  vehicle
identification number of each Vehicle and shall be  organized  by
state listing all Vehicles titled in each relevant state.

      Section  II.4  Collateral Agent to Provide Confirmation  of
Receipt  and  Lien.   Upon receipt of any  Certificate  of  Title
(including  any receipt of a Certificate of Title released  on  a
temporary  basis  pursuant to a Release Notice  and  subsequently
returned),  the Collateral Agent shall immediately  inspect  such
Certificate  of  Title to confirm that (i)  such  Certificate  of
Title is listed in a Title Notice or Release Notice and that  the
Lessee  designated as the owner of the relevant Vehicle  in  such
Title  Notice  or Release Notice is shown as the  owner  on  such
Certificate  of Title, (ii) the Lien of Agent (or  of  Agent  and
Lessors)  is  properly reflected thereon in accordance  with  the
form of Certificate of Title for the relevant state set forth  in
Exhibit A hereto (or such form for any additional state as  Agent
may  deliver  to  the Collateral Agent from time  to  time),  and
(iii)  no other Lien is reflected thereon.  The Collateral  Agent
shall notify Lessees' Representative and Agent immediately if any
matter  set forth in preceding sentence is not true with  respect
to  any Certificate of Title, whereupon Lessees shall immediately
take  such  steps  as are necessary in order to comply  with  the
terms  of  the  Participation  Agreement  with  respect  to  such
Certificate of Title.  Not later than the date specified  in  the
applicable  Title Notice or Release Notice, the Collateral  Agent
shall  provide to Agent and Lessees' Representative a  report  (a
"Summary Report"), which Summary Report shall:

           (a)   state  that  (except as  disclosed  pursuant  to
     paragraphs  (b), (c) and (d) below) it has received  all  of
     the  Certificates  of Title listed on the  applicable  Title
     Notice  or Release Notice and that each such Certificate  of
     Title  names  Agent (or Agent and the Lessors) as  the  only
     lienholder(s),

          (b)  identifying any such Certificates of Title that it
     has not received,

           (c)    identifying any such Certificates of  Title  on
     which  the  lien of Agent (or of Agent and Lessors)  is  not
     reflected, and

           (d)    identifying any such Certificates of  Title  on
     which any lien other than the lien of Agent (or of Agent and
     Lessors) is reflected.

Except  as  provided  in this Section 2.4, the  Collateral  Agent
shall  not  be  responsible  for  reviewing  or  correcting   any
Certificates of Title that it receives.

      Section  II.5   Delivery  of Certificates  of  Title.   The
Collateral  Agent  shall  deliver to  Agent  any  Certificate  or
Certificates of Title immediately upon Agent's request therefor.


                          SECTION III
                      EXPENSES; INDEMNITY

     Section III.1  Compensation and Expenses.  Lessees shall pay
to  the  Collateral  Agent  and any  successor  Collateral  Agent
appointed   hereunder,   from  time  to   time   (i)   reasonable
compensation  for  its services hereunder for  administering  the
Collateral generally as set forth on Schedule I hereto  and  (ii)
all  reasonable fees and out-of-pocket expenses of the Collateral
Agent  or  any such successor Collateral Agent,  (A)  arising  in
connection    with   the   preparation,   execution,    delivery,
modification  and/or  termination of this  Agreement  and/or  the
enforcement  of any of the provisions hereof or (B)  incurred  in
connection  with the administration of the Collateral and/or  the
preservation, protection or defense of the Collateral Agent's, or
any   such  successor  Collateral  Agent's,  rights  under   this
Agreement and in and to the Collateral.

     Section III.2  Stamp and Other Similar Taxes.  Lessees shall
indemnify and hold harmless the Collateral Agent from any present
or  future claim for liability for any stamp or other similar tax
and  any penalties or interest with respect thereto, that may  be
assessed,  levied or collected by any jurisdiction in  connection
with this Agreement or any Collateral.

      Section  III.3   Filing Fees, Excise Taxes,  Etc.   Lessees
shall  pay,  or reimburse the Collateral Agent for, any  and  all
amounts  in  respect  of,  all  search,  filing,  recording   and
registration fees, taxes, excise taxes and other similar  imposts
that may be payable or determined to be payable in respect of the
execution,  delivery,  performance  and/or  enforcement  of  this
Agreement.

      Section  III.4   Indemnification.  Lessees shall  pay,  and
indemnify (which indemnity shall survive the termination of  this
Agreement  and  the  resignation  or  replacement  of   Bank   as
Collateral Agent) and hold the Collateral Agent harmless from and
against,  any and all liabilities, obligations, losses,  damages,
claims,  costs or expenses of any kind or nature whatsoever  that
may  at any time be imposed on, incurred by, or asserted against,
the Collateral Agent in any way relating to or arising out of the
execution,    delivery,    enforcement,    performance     and/or
administration of this Agreement, including reasonable attorneys'
fees  and expenses; provided, however, that Lessees shall not  be
liable  for  the  payment  of any portion  of  such  liabilities,
obligations,  losses, damages, claims, costs or expenses  of  the
Collateral Agent that resulted from the Collateral Agent's  gross
negligence or willful misconduct.

     SECTION IV
                      THE COLLATERAL AGENT

      Section  IV.1  Representations of Collateral  Agent.   Bank
hereby  represents and warrants that (i) it is a  national  bank,
duly  organized under the laws of the United States  and  validly
existing  and  in good standing under the laws of  the  State  of
Oregon  and  has all requisite corporate power and  authority  to
enter  into  and  perform its obligations under  this  Agreement,
(ii)  it  has all licenses, consents and approvals (governmental,
regulatory   and  otherwise)  to  enter  into  and  perform   its
obligations  under  this  Agreement,  and  (iii)  the  execution,
delivery  and performance by it of this Agreement have been  duly
authorized  by  all necessary corporate action on its  part,  and
this  Agreement  is  the legal, valid and binding  obligation  of
Bank, enforceable against it in accordance with its terms, except
as  such  enforcement  may be limited by  applicable  bankruptcy,
insolvency,  moratorium  or  similar  laws  affecting  creditors'
rights generally and by the application of equitable principles.

     Section IV.2  Limitations on Duties of the Collateral Agent.

      (a)   The  Collateral Agent undertakes to perform only  the
duties expressly set forth herein.

     (b)  The Collateral Agent may exercise the rights and powers
granted to it by this Agreement, together with such powers as are
reasonably incidental thereto, but only pursuant to the terms  of
this Agreement, and the Collateral Agent shall not be liable with
respect  to any action taken or omitted by it in accordance  with
the direction of Agent.

      (c)  The Collateral Agent shall not be under any obligation
to  take  any  action that is discretionary on the  part  of  the
Collateral  Agent  under the provisions hereof.   The  Collateral
Agent  shall make available for inspection and copying  by  Agent
each certificate or other paper furnished to the Collateral Agent
by Lessees or Lessees' Representative under or in respect of this
Agreement or in respect of any of the Collateral.

      (d)  The Collateral Agent shall have no authority to grant,
convey or assign the Certificates of Title or change the notation
of  a security interest thereon or deal with the Certificates  of
Title in any other way except as expressly provided herein or  as
directed by Agent.

     Section IV.3  Resignation and Removal of Collateral Agent.

      (a)   The Collateral Agent may, at any time with or without
cause  by  giving  60  days'  prior written  notice  to  Lessees'
Representative  and  Agent,  resign  and  be  discharged  of  the
responsibilities  hereby  created,  such  resignation  to  become
effective upon the appointment of a successor Collateral Agent by
Agent, with the consent of Lessees' Representative, which consent
shall not be unreasonably withheld or delayed, and the acceptance
of  such  appointment  by such successor Collateral  Agent.   The
Collateral  Agent  may be removed at any time  (with  or  without
cause) and a successor Collateral Agent appointed by Agent,  with
the consent of Lessees' Representative, which consent will not be
unreasonably  withheld or delayed, provided that  the  Collateral
Agent  shall  be entitled to its reasonable fees and expenses  to
the  date of removal (if the Collateral Agent is removed  without
cause), and the indemnification of Section 3.4 shall survive  the
termination  of  the other provisions of this  Agreement  to  the
benefit  of  the predecessor Collateral Agent.  If  no  successor
Collateral Agent shall be appointed and approved within  30  days
from  the  date  of  the  giving  of  the  aforesaid  notice   of
resignation or within 30 days from the date of such removal,  the
Collateral  Agent  or Agent may apply to any court  of  competent
jurisdiction to appoint a successor Collateral Agent to act until
such  time,  if any, as a successor Collateral Agent  shall  have
been appointed as above provided.  Any successor Collateral Agent
so  appointed by such court shall immediately and without further
act supersede any predecessor Collateral Agent.

      (b)   If  at any time the Collateral Agent shall resign  or
otherwise become incapable of acting, or if at any time a vacancy
shall  occur in the office of the Collateral Agent for any  other
cause,  a successor Collateral Agent shall be appointed by Agent,
with  the consent of Lessees' Representative, which consent  will
not  be unreasonably withheld or delayed, and the powers, duties,
authority and title of the predecessor Collateral Agent shall  be
terminated  and  cancelled without procuring the  resignation  of
such   predecessor  Collateral  Agent,  and  without  any   other
formality  (except  as  may be required by applicable  law)  than
appointment  and designation of a successor Collateral  Agent  in
writing,   duly   acknowledged,  delivered  to  the   predecessor
Collateral Agent and Lessees' Representative.

       (c)   The  appointment  and  designation  referred  to  in
Section  4.3(b) shall be full evidence of the right and authority
to  make the same and of all the facts therein recited, and  this
Agreement shall vest in such successor Collateral Agent,  without
any  further act, deed or conveyance, all of the estate and title
of  its  predecessors  and the successor Collateral  Agent  shall
become  fully  vested  with all the estates, properties,  rights,
powers,  trusts, duties, authority and title of its predecessors;
but  any  predecessor  Collateral Agent  shall,  nevertheless  on
payment  of  its  charges and on the written  request  of  Agent,
Lessees'   Representative  or  any  successor  Collateral   Agent
empowered  to act as such at the time any such request  is  made,
execute   and   deliver   an  instrument  without   recourse   or
representation  transferring to such successor all  the  estates,
properties, rights, powers, trusts, duties, authority  and  title
of  such  predecessor hereunder and shall deliver all  securities
and moneys held by it to such successor Collateral Agent.  Should
any  deed, conveyance or other instrument in writing from Lessees
be  required  by  any successor Collateral Agent for  more  fully
vesting   in   such  successor  Collateral  Agent  the   estates,
properties, rights, powers, trusts, duties, authority  and  title
vested  or  intended  to be vested in the predecessor  Collateral
Agent,  any and all such deeds, conveyances and other instruments
in  writing shall, on request of such successor Collateral Agent,
be executed, acknowledged and delivered by Lessees.

      Section  IV.4   Status of Successors to  Collateral  Agent.
Every  successor  to the Collateral Agent appointed  pursuant  to
Section 4.3 shall be a bank or trust company in good standing and
having  power so to act and incorporated under the  laws  of  the
United  States or any State thereof or the District of  Columbia,
and shall also have capital, surplus and undivided profits of not
less  than $75,000,000, if there be such an institution with such
capital,  surplus  and undivided profits willing,  qualified  and
able to accept the trust upon reasonable or customary terms.

       Section  IV.5   Merger  of  the  Collateral  Agent.    Any
corporation  into which the Collateral Agent may  be  merged,  or
with   which  it  may  be  converted  or  consolidated,  or   any
corporation   resulting   from   any   merger,   conversion    or
consolidation  to  which the Collateral Agent shall  be  a  party
shall  be  the Collateral Agent under this Agreement without  the
execution or filing of any paper or any further act on  the  part
of  the  parties hereto; provided that such resulting corporation
shall satisfy the provisions of Section 4.4.

     Section IV.6  Indemnity for Lost Documents.  Notwithstanding
any other provision of this Agreement, the Collateral Agent shall
indemnify Lessees, Agent and Lessors for, and hold Lessees, Agent
and Lessors harmless against, any losses, liabilities, claims and
damages  that  such  person may incur as a result  of  the  loss,
misplacement,  destruction or mutilation of  any  Certificate  of
Title  that was previously delivered to the Collateral Agent  and
not  released  by  the Collateral Agent in accordance  with  this
Agreement.

     Section IV.7  Collateral Agent Looks Solely to Lessees.  The
Collateral  Agent expressly acknowledges and agrees that  neither
Agent  nor  any Lessor shall have any obligation or liability  to
the  Collateral  Agent  in  respect of this  Agreement,  and  the
Collateral Agent's sole recourse under this Agreement shall be to
Lessees.


                           SECTION V
                RELEASE OF CERTIFICATES OF TITLE

      Section V.1  Releases of Certificates of Title.  From  time
to   time,  the  Collateral  Agent  may  release  one   or   more
Certificates of Title to Lessee's Representative upon the written
instructions  of Agent (a "Release Notice"), it being  understood
that  Agent  shall deliver a Release Notice with respect  to  any
Certificate of Title which under the applicable provisions of any
other  Operative  Agreement is entitled to be released,  provided
that  the  terms of such release shall conform to such provisions
of  the  other  Operative Agreement.  Each Release  Notice  shall
specify,  with respect to any Certificate of Title, whether  such
Certificate  of  Title  is to be released  (a)  permanently,  (b)
temporarily,  and if so, the date by which it is to be  returned,
or  (c)  for  replacement or substitution, and if so, identifying
the  Certificate of Title that is to be delivered in  replacement
or   substitution  therefor  and  the  date  by  which  such  new
Certificate of Title is to be received.

     Section 5.2  Termination of this Agreement.  Upon receipt by
the  Collateral Agent of a notice from Agent that all obligations
of  Lessees  under the Operative Agreements have been fully  paid
and  satisfied,  the rights of Agent and Lessors hereunder  shall
terminate and the Collateral Agent shall hold all Certificates of
Title for the benefit of Lessees and shall take such other action
with  respect  thereto as Lessees' Representative shall  request.
Upon  receipt  by  the Collateral Agent of a notice  from  Agent,
which notice shall set forth a representation from Agent that the
giving  of such notice is permitted pursuant to the Participation
Agreement, to the effect that Agent has elected to terminate this
Agreement  with  respect  to  the  Certificates  of  Title,  this
Agreement  shall  terminate with respect to such Certificates  of
Title.   Upon such termination the Collateral Agent shall deliver
the applicable Certificates of Title to the Person designated  in
such  notice,  and shall take such other action  as  Agent  shall
request  to  evidence  the termination  of  this  Agreement  with
respect  to the Certificates of Title and the Collateral  Agent's
interest therein, at Lessees' expense.


                           SECTION VI
                         MISCELLANEOUS

      Section  VI.1  Amendments, Supplements and Waivers.    This
Agreement  may be amended, waived or supplemented pursuant  to  a
writing  executed  by the Collateral Agent,  Agent  and  Lessees'
Representative,  it  being  understood  that  the  execution  and
delivery  by  Agent of any such writing shall be subject  to  the
provisions of the Participation Agreement.

      Section VI.2  Notices.  All notices, requests, demands  and
other  communications provided for or permitted hereunder  shall,
unless  otherwise  stated herein, be in writing (including  telex
and  facsimile  communications) and shall be  sent  by  mail  (by
registered  or certified mail, return receipt requested),  telex,
facsimile  or hand delivery  (a) if to the Collateral  Agent,  at
the address set forth below:

               First Interstate Bank of Oregon, N.A.
               U.S. Corporate, T-19
               1300 S.W. Fifth Ave.
               Portland, OR  97201
               Fax:  (503) 225-4898
               Attention:       Ronald   J. Kallis,
                  Vice   President   &    Senior
                  Relationship Manager


and  (b)  in the case of each other party hereto, at the  address
for  such  party  set  forth in the Participation  Agreement,  or
(c) in any case, at such other address as shall be designated  by
such  party in a written notice to each other party hereto.   Any
notice, if mailed and properly addressed with postage prepaid  or
if properly addressed and sent by pre-paid courier service, or if
transmitted by facsimile shall be deemed given when received.

      Section  VI.3   Headings.  Section,  subsection  and  other
headings  used  in  this Agreement are for convenience  only  and
shall not affect the construction of this Agreement.

     Section VI.4  Severability.  Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall not
invalidate  the  remaining  provisions  hereof,  and   any   such
prohibition  or  unenforceability in any jurisdiction  shall  not
invalidate  or render unenforceable such provision in  any  other
jurisdiction.

      Section VI.5  Counterparts.  This Agreement may be executed
in   separate  counterparts  and  by  the  different  parties  on
different  counterparts, each of which shall be an  original  and
all  of  which taken together shall constitute one and  the  same
instrument.

      Section  VI.6   Conflicts with Operative  Agreements.   The
parties  agree  that  in the event of any  conflict  between  the
provisions  of  this Agreement and the provisions  of  any  other
Operative  Agreement,  the provisions  of  such  other  Operative
Agreement shall control.

      Section  VI.7   Binding Effect.  This  Agreement  shall  be
binding  upon  and inure to the benefit of each  of  the  parties
hereto  and  shall inure to the benefit of Agent and Lessors  and
their  respective successors and assigns, and nothing  herein  is
intended  or  shall  be construed to give any  other  Person  any
right,  remedy or claim under, to or in respect of this Agreement
or the Collateral.

      Section  VI.8   Governing  Law.  THIS  AGREEMENT  SHALL  BE
GOVERNED  BY,  AND CONSTRUED AND INTERPRETED IN ACCORDANCE  WITH,
THE  LAWS  OF  THE  STATE OF CALIFORNIA, WITHOUT  REGARD  TO  ANY
OTHERWISE APPLICABLE CONFLICT OF LAWS PRINCIPLES.

      Section  VI.9  Effectiveness.  This Agreement shall  become
effective  on the execution and delivery hereof and shall  remain
in  effect  so  long  as  the Collateral  Agent  shall  have  any
obligations hereunder.





          [Remainder of page intentionally left blank]
      IN  WITNESS  WHEREOF, each party hereto has  executed  this
Agreement  or  caused this Agreement to be duly executed  by  its
officer  thereunto duly authorized as of the day and  year  first
above-written.



FIRST INTERSTATE BANK OF
OREGON, N.A.,                   CONSOLIDATED FREIGHTWAYS, INC.,
as Collateral Agent             as Lessees' Representative


By:/s/ Ronald J. Kallis         By: /s/R. Guy Kraines
Name Printed: Ronald J. Kallis  Name Printed: R. Guy Kraines
Title:Vice President            Title: Assistant Treasurer



CON-WAY CENTRAL EXPRESS,        CON-WAY WESTERN EXPRESS,
INC., as Lessee                 INC.,as Lessee


By /s/David F. Morrison                By /s/David F. Morrison
Name  Printed:  David  F.  Morrison    Name  Printed:   David  F. Morrison
Title: Assistant Treasurer             Title:  Assistant Treasurer


CON-WAY SOUTHERN EXPRESS,       CON-WAY SOUTHWESTERN EXPRESS,
INC., as Lessee                 INC., as Lessee


By /s/David F. Morrison                By /s/David F. Morrison
Name  Printed:  David  F.  Morrison    Name  Printed:   David  F. Morrison
Title: Assistant Treasurer             Title:  Assistant Treasurer



CON-WAY INTERMODAL, INC.,       CON-WAY TRANSPORTATION
as Lessee                       SERVICES, INC., as Lessee


By /s/David F. Morrison                By /s/David F. Morrison
Name  Printed:  David  F.  Morrison    Name  Printed:   David  F.
Morrison
Title: Assistant Treasurer             Title:  Assistant Treasurer


CONSOLIDATED FREIGHTWAYS        BA LEASING & CAPITAL CORPORATION,
CORPORATION  OF DELAWARE,        not in its individual  capacity,
but
as Lessee                       solely as agent for the Lessors



By/s/David F. Morrison          By/s/James F. Simpson
Name Printed: David F. Morrison Name Printed: James F. Simpson
Title: Assistant Treasurer      Title: Vice President


LESSORS:

BA LEASING & CAPITAL            ABN AMRO BANK N.V.
CORPORATION


By /s/James F. Simpson          By /s/Diane D. Waggoner
Name Printed: James F. Simpson  Name Printed: Diane D. Waggoner
Title:Vice President            Title: Vice President


By /s/Kim Lee                   By /s/J.P Kranendonk
Name Printed: Kim Lee           Name Printed: J.P. Kranendonk
Title: Assistant Vice President Title: Assistant Vice President


IBJTC LEASING CORPORATION       CREDIT LYONNAIS
                                Cayman Island Branch


By /s/Hiroshi Suzuki            By /s/Thierry F. Vincent
Name Printed: Hiroshi Suzuki    Name Printed: Thierry F. Vincent
Title: Senior Vice President    Title: Authorized Signatory