Exhibit 10.7




                   LOAN AND SECURITY AGREEMENT

                  Dated as of November 27, 1996

                              Among

                BANKAMERICA BUSINESS CREDIT, INC.
                    as the Agent and a Lender

                               and

                   NATIONSBANK OF TEXAS, N.A.
     as a Lender, the L/C Issuer and a Co-Syndication Agent

                               and

               CAISSE NATIONALE DE CREDIT AGRICOLE
                  as a Lender and as a Co-Agent

                               and

          THE OTHER FINANCIAL INSTITUTIONS NAMED HEREIN
                           as Lenders

                               and

        CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE
                         as the Borrower


                        TABLE OF CONTENTS

                                                             Page

ARTICLE 1  INTERPRETATION OF THIS AGREEMENT                    1
     1.1  Definitions                                           1
     1.2  Accounting Terms                                     26
     1.3  Other Terms                                          26
     1.4  Other Interpretive Provisions                        26

ARTICLE 2  LOANS AND LETTERS OF CREDIT                         27
     2.1  Credit Facility                                      27
     2.2  Revolving Loans                                      28
     2.3  Letters of Credit                                    34
     2.4  Automated Clearing House Transfers and
          Overdrafts                                           40
     2.5  Purpose                                              41

ARTICLE 3  INTEREST AND FEES                                   41
     3.1  Interest                                             41
     3.2  Conversion and Continuation Elections                42
     3.3  Maximum Interest Rate                                43
     3.4  Closing Fee                                          44
     3.5  Unused Line Fee                                      44
     3.6  Letter of Credit Fee                                 44
     3.7  Other Fees                                           45

ARTICLE 4  PAYMENTS AND PREPAYMENTS                            45
     4.1  Revolving Loans                                      45
     4.2  Termination of Facility                              45
     4.3  Payments by the Borrower                             46
     4.4  Payments as Revolving Loans                          47
     4.5  Apportionment, Application and Reversal of
          Payments                                             47
     4.6  Indemnity for Returned Payments                      48
     4.7  Agent's and Lenders' Books and Records; Monthly
          Statements                                           48

ARTICLE 5  TAXES, YIELD PROTECTION AND ILLEGALITY              49
     5.1  Taxes                                                49
     5.2  Illegality                                           50
     5.3  Increased Costs and Reduction of Return              50
     5.4  Replacement of Lender in Event of Adverse
          Condition                                            51
     5.5  Funding Losses                                       51
     5.6  Inability to Determine Rates                         52
     5.7  Certificates of Lenders                              52
     5.8  Survival                                             52

ARTICLE 6  COLLATERAL                                          52
     6.1  Grant of Security Interest                           52
     6.2  Perfection and Protection of Security Interests      53
     6.3  Location of Collateral                               55
     6.4  Title to, Liens on, and Sale and Use of
          Collateral                                           55
     6.5  Appraisals                                           55
     6.6  Access and Examination; Confidentiality              56
     6.7  Collateral Reporting                                 57
     6.8  Accounts                                             58
     6.9  Collection of Accounts; Payments                     59
     6.10 Equipment                                            60
     6.11 Assigned Contracts                                   61
     6.12 Documents, Instruments, and Chattel Paper            62
     6.13 Right to Cure                                        62
     6.14 Power of Attorney                                    62
     6.15 The Agent's and Lenders' Rights, Duties and
          Liabilities                                          63

ARTICLE 7  BOOKS AND RECORDS; FINANCIAL INFORMATION;
           NOTICES                                             63
     7.1  Books and Records                                    63
     7.2  Financial Information                                63
     7.3  Notices to the Lenders                               66

ARTICLE 8  GENERAL WARRANTIES AND REPRESENTATIONS              69
     8.1  Authorization, Validity, and Enforceability of
          this Agreement and the Loan Documents                69
     8.2  Validity and Priority of Security Interest           69
     8.3  Organization and Qualification                       69
     8.4  Corporate Name; Prior Transactions                   70
     8.5  Subsidiaries and Affiliates                          70
     8.6  Financial Statements and Projections                 70
     8.7  Capitalization                                       71
     8.8  Solvency                                             71
     8.9  Debt                                                 71
     8.10 Restricted Payments                                  71
     8.11 Title to Property                                    71
     8.12 Real Estate; Leases                                  71
     8.13 Proprietary Rights                                   71
     8.14 Trade Names and Terms of Sale                        72
     8.15 Litigation                                           72
     8.16 Restrictive Agreements                               72
     8.17 Labor Disputes                                       72
     8.18 Environmental Laws                                   72
     8.19 No Violation of Law                                  73
     8.20 No Default                                           74
     8.21 ERISA Compliance                                     74
     8.22 Taxes                                                75
     8.23 Regulated Entities                                   75
     8.24 Use of Proceeds; Margin Regulations                  75
     8.25 Copyrights, Patents, Trademarks and Licenses,
          etc.                                                 75
     8.26 No Material Adverse Change                           75
     8.27 Full Disclosure                                      75
     8.28 Material Agreements                                  76
     8.29 Bank Accounts                                        76
     8.30 Eligible Revenue Equipment                           76
     8.31 Excluded Revenue Equipment                           76
     8.32 Former Parent Liens                                  76

ARTICLE 9  AFFIRMATIVE AND NEGATIVE COVENANTS                  76
     9.1  Taxes and Other Obligations                          76
     9.2  Corporate Existence and Good Standing                77
     9.3  Compliance with Law and Agreements; Maintenance
          of Licenses                                          77
     9.4  Maintenance of Property                              77
     9.5  Insurance                                            77
     9.6  Environmental Laws                                   78
     9.7  Compliance with ERISA                                78
     9.8  Mergers, Consolidations or Sales                     79
     9.9  Restricted Payments; Capital Change; Restricted
          Investments                                          79
     9.10 Transactions Affecting Collateral or
          Obligations                                          79
     9.11 Guaranties                                           79
     9.12 Debt                                                 80
     9.13 Prepayment                                           80
     9.14 Transactions with Affiliates                         80
     9.15 Investment Banking and Finder's Fees                 80
     9.16 Business Conducted                                   81
     9.17 Liens                                                81
     9.18 Sale and Leaseback Transactions                      81
     9.19 New Subsidiaries                                     81
     9.20 Fiscal Year                                          81
     9.21 Capital Expenditures                                 81
     9.22 Adjusted Net Earnings                                82
     9.23 Adjusted Tangible Net Worth                          82
     9.24 Fixed Charge Coverage Ratio                          83
     9.25 Use of Proceeds                                      83
     9.26 Restrictions on Canadian Freightways                 83
     9.27 Further Assurances                                   84
     9.28 Cooperation                                          84

ARTICLE 10 CONDITIONS OF CLOSING AND LENDING                   84
     10.1 Conditions Precedent to Making of Loans on the
          Closing Date                                         84
     10.2 Conditions Precedent to the Initial Funding
          Date                                                 87
     10.3 Conditions Precedent to Each Loan                    88

ARTICLE 11 DEFAULT; REMEDIES                                   89
     11.1 Events of Default                                    89
     11.2 Remedies                                             91

ARTICLE 12 TERM AND TERMINATION                                93
     12.1 Term and Termination                                 93
     12.2 Termination if Conditions Not Satisfied              93

ARTICLE 13 AMENDMENTS; WAIVER; PARTICIPATIONS;
           ASSIGNMENTS; SUCCESSORS                             93
     13.1 No Waivers Cumulative Remedies                       93
     13.2 Amendments and Waivers                               93
     13.3 Assignments; Participations                          94

ARTICLE 14 THE AGENT                                           96
     14.1 Appointment and Authorization                        96
     14.2 Delegation of Duties                                 97
     14.3 Liability of Agent                                   97
     14.4 Reliance by Agent                                    98
     14.5 Notice of Default                                    98
     14.6 Credit Decision                                      98
     14.7 Indemnification                                      99
     14.8 Agent in Individual Capacity                         99
     14.9 Successor Agent                                     100
     14.10 Withholding Tax                                    100
     14.11 Collateral Matters                                 101
     14.12 Restrictions on Actions by Lenders; Sharing
            of Payments                                       103
     14.13 Agency for Perfection                              103
     14.14 Payments by Agent to Lenders                       103
     14.15 Concerning the Collateral and the Related
            Loan Documents                                    104
     14.16 Field Audit and Examination Reports; Disclaimer
            by Lenders                                        104
     14.17 Co-Agents                                          105

ARTICLE 15 MISCELLANEOUS                                      105
     15.1 Cumulative Remedies; No Prior Recourse to
          Collateral                                          105
     15.2 Severability                                        105
     15.3 Governing Law; Choice of Forum; Service of
          Process; Jury Trial Waiver                          105
     15.4 WAIVER OF JURY TRIAL                                107
     15.5 Survival of Representations and Warranties          108
     15.6 Other Security and Guaranties                       108
     15.7 Fees and Expenses                                   108
     15.8 Notices                                             109
     15.9 Waiver of Notices                                   109
     15.10 Binding Effect                                     110
     15.11 Indemnity of the Agent and the Lenders by
             the Borrower                                     110
     15.12 Final Agreement                                    110
     15.13 Counterparts                                       111
     15.14 Captions                                           111
     15.15 Right of Setoff                                    111

                            EXHIBITS

               A   Form of Borrowing Base Certificate

               B   Form of Notice of Borrowing

               C   Form of Notice of
                    Conversion/Continuation

               D   Form of Assignment and Acceptance

               E   Form of Landlord's Waiver

               F   Financial Statements



                            SCHEDULES

               8.3  Jurisdictions

               8.5  Subsidiaries and Affiliates

               8.9  Debt

               8.12 Locations of Collateral, Real Estate,
                    Leases and Subleases

               8.13 Proprietary Rights

               8.14 Trade Names

               8.15 Litigation

               8.17 Labor Disputes

               8.18 Environmental Disclosures

               8.21 ERISA Disclosures

               8.28 Material Agreements

               8.29 Bank Accounts

               8.30 Included Revenue Equipment

               8.31 Excluded Revenue Equipment

               8.32 Former Parent Liens




                   LOAN AND SECURITY AGREEMENT

          Loan  and Security Agreement, dated as of November  27,
1996,  among  the financial institutions listed on the  signature
pages  hereof  as lenders (such financial institutions,  together
with  their  respective successors and assigns, are  referred  to
hereinafter  each individually as a "Lender" and collectively  as
the  "Lenders"),  BankAmerica Business Credit, Inc.,  a  Delaware
corporation, as agent for the Lenders (in its capacity as  agent,
the  "Agent"), NationsBank of Texas, N.A., as the L/C Issuer  (as
hereafter  defined) and as co-syndication agent for the  Lenders,
Caisse Nationale De Credit Agricole, as co-agent for the Lenders,
Consolidated  Freightways Corporation  of  Delaware,  a  Delaware
corporation,  with  offices at 175 Linfield  Drive,  Menlo  Park,
California   94025  (the  "Borrower"),  Consolidated  Freightways
Corporation  (the "Parent") and Leland James Service  Corporation
("Leland"),  affiliates of the Borrower and,  together  with  the
Borrower,  sometimes called Loan Parties (as  hereafter  defined)
hereunder.

                       W I T N E S S E T H

          WHEREAS, the Borrower has requested the Lenders to make
available  to the Borrower a revolving line of credit  for  loans
and  letters  of credit in an amount not to exceed  $225,000,000,
which  extensions of credit the Borrower will use for its working
capital needs and general business purposes;

          WHEREAS,  the Lenders have agreed to make available  to
the  Borrower  a  revolving credit facility upon  the  terms  and
conditions set forth in this Agreement;

          WHEREAS, the L/C Issuer has agreed to issue the letters
of credit provided for under such revolving credit facility; and

          WHEREAS,  the  Parent and Leland are  parties  to  this
Agreement and certain other agreements relating to such revolving
credit  facility  in  order to make certain  representations  and
warranties,  and  incur  certain  obligations  in  favor  of  the
Lenders, the Agent and the L/C Issuer;

          NOW,   THEREFORE,  in  consideration  of   the   mutual
conditions  and agreements set forth in this Agreement,  and  for
good  and valuable consideration, the receipt of which is  hereby
acknowledged,  the  Lenders,  the  L/C  Issuer,  the  Agent,  the
Borrower, the Parent and Leland hereby agree as follows.

                            ARTICLE 1

                INTERPRETATION OF THIS AGREEMENT

     1.1  Definitions.  As used herein:

          "Account Advance Rate" means eighty-five percent (85%),
provided,  however,  that if the average Accounts  Dilution  Rate
(determined  by  dividing the total of the amounts  described  in
clause  (i)  of the definition of Accounts Dilution Rate  by  the
total  amounts  described in clause (ii)  of  the  definition  of
Accounts Dilution Rate, in each case, for a twelve month period),

tested  monthly, exceeds seven percent (7%) but is not more  than
ten  percent  (10%) on a rolling twelve month basis, the  Account
Advance  Rate  shall  be  eighty  percent  (80%),  and  provided,
further,  that  if  the  average Accounts Dilution  Rate,  tested
monthly,  exceeds  ten  percent (10%) on a rolling  twelve  month
basis,  the Account Advance Rate shall be further reduced by  two
percent  (2%) for each percentage point that the average Accounts
Dilution Rate exceeds ten percent (10%).

          "Accounts"  means all of the Borrower's  now  owned  or
hereafter  acquired or arising accounts, and any other rights  to
payment  for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance.

          "Account Debtor" means each Person obligated in any way
on or in connection with an Account.

          "Accounts Dilution Rate" means the percent obtained  by
dividing  (i) the sum of all adjustments made to the Accounts  to
reflect  (a) correcting adjustments which consist of  short  pays
due   to   a   rate   adjustment  or  other   disputed   amounts,
(b)  uncollectable  items  being  transferred  to  the  bad  debt
allowance  account, (c) reclassifications to delinquent  accounts
for  further collection efforts, and (d) other non-cash  credits,
allowances,  discounts,  write-offs  or  other  offsets  to   the
Accounts  which  the Agent, in the exercise of  its  commercially
reasonable discretion, deems appropriate to reduce the  value  of
Accounts by, by (ii) the gross amount of all Accounts created  by
the Borrower.

          "ACH  Settlement  Risk  Reserve"  means  any  and   all
reserves  which the Agent from time to time establishes,  in  its
reasonable   commercial   discretion,   with   respect   to   ACH
Transactions.

          "ACH  Transactions" means all debts,  liabilities,  and
obligations now or hereafter owing from the Borrower to  Bank  of
America  arising from or related to the automatic clearing  house
transfer  of  funds  by Bank of America for the  account  of  the
Borrower pursuant to agreement or overdrafts.

          "Adjusted  Net  Earnings" means, with  respect  to  any
fiscal  period  of the Borrower, the Adjusted Net  Earnings  from
Operations  for such fiscal period plus the sum of the  following
to  the  extent deducted in computing Adjusted Net Earnings  from
Operations:  (a)  interest  expense, (b)  accrued  income  taxes,
(c)  depreciation and amortization expense, and (d) miscellaneous
expenses  (including  Letter of Credit Fees)  less  miscellaneous
income for such period.

          "Adjusted  Net  Earnings from Operations"  means,  with
respect  to any fiscal period of the Borrower, the Parent's,  the
Borrower's and their Subsidiaries' consolidated net income  after
provision  for income taxes for such fiscal period, as determined
in  accordance with GAAP and reported on the Financial Statements
for  such period, excluding any and all of the following included
in  such  net income:  (a) gain or loss arising from the sale  of
any  capital  assets  (excluding  Revenue  Equipment);  (b)  gain
arising  from  any  write-up in the  book  value  of  any  asset;
(c) earnings of any corporation, substantially all the assets  of
which  have been acquired by the Parent or the Borrower or  their
Subsidiaries in any manner, to the extent realized by such  other
corporation prior to the date of acquisition; (d) earnings of any
business  entity in which the Parent or the Borrower  or  any  of
their  Subsidiaries  has an ownership interest  (other  than  the
Subsidiaries) unless (and only to the extent) such earnings shall
actually  have  been received by the Parent or  the  Borrower  or
their   Subsidiaries   in   the  form  of   cash   distributions;
(e)  earnings of any Person into which the Parent or the Borrower
or their Subsidiaries shall have been merged, or which has been a
party  with  the Parent or the Borrower or their Subsidiaries  to
any  consolidation or other form of reorganization, prior to  the
date  of  such transaction; (f) gain arising from the acquisition
of  debt  or  equity securities of the Parent or the Borrower  or
their  Subsidiaries or from cancellation or forgiveness of  Debt;
and  (g) gain arising from extraordinary items, as determined  in
accordance  with  GAAP,  or  gain from  any  other  non-recurring
transaction.

          "Adjusted  Tangible Assets" means all of the  Parent's,
the  Borrower's and their Subsidiaries' assets on a  consolidated
basis  except:   (a)  deferred assets, other  than  deferred  tax
assets,  prepaid  insurance,  and  prepaid  taxes;  (b)  patents,
copyrights,  trademarks, trade names, franchises,  goodwill,  and
other  similar  intangibles; (c) unamortized  debt  discount  and
expense;  and (d) fixed assets to the extent of any  write-up  in
the  book  value  thereof resulting from a revaluation  effective
after the Closing Date.

          "Adjusted  Tangible  Net Worth"  means,  at  any  date:
(a)   the  book  value  (after  deducting  related  depreciation,
obsolescence, amortization, valuation, and other proper  reserves
as  determined  in  accordance with GAAP) at which  the  Adjusted
Tangible Assets would be shown on a consolidated balance sheet of
the  Parent,  the Borrower and their Subsidiaries  at  such  date
prepared  in accordance with GAAP; less (b) the amount  at  which
the  Parent's, the Borrower's and their Subsidiaries' liabilities
would  be  shown on such balance sheet, including as  liabilities
all  reserves  for contingencies and other potential  liabilities
which would be shown on such balance sheet.

          "Affiliate"  means, as to any Person, any other  Person
which,  directly or indirectly, is in control of,  is  controlled
by,  or is under common control with, such Person or which  owns,
directly  or  indirectly,  five  percent  (5%)  or  more  of  the
outstanding  equity  interest of such Person  (except  that  with
respect to the Parent or the Former Parent, twenty percent  (20%)
or  more of the outstanding equity interest of the Parent  or  of
the  Former Parent, as the case may be). A Person shall be deemed
to  control  another Person if the controlling Person  possesses,
directly  or  indirectly,  the  power  to  direct  or  cause  the
direction  of  the management and policies of the  other  Person,
whether  through the ownership of voting securities, by contract,
or otherwise.

          "Agent" means BankAmerica Business Credit, Inc., solely
in  its capacity as agent for the L/C Issuer and the Lenders, and
shall include any successor agent.

          "Agent   Advances"   has  the  meaning   specified   in
Section 2.2(i).

          "Agent's  Liens" means collectively the  Liens  in  the
Collateral granted to the Agent, for the ratable benefit  of  the
Lenders,  the  L/C Issuer, BABC, and the Agent pursuant  to  this
Agreement,  the  other Loan Documents or any other  agreement  or
instrument.

          "Agent-Related  Persons"  means  the  Agent   and   any
successor  agent, together with their respective Affiliates,  and
the  officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

          "Aggregate Revolver Outstandings" means, at  any  time:
the  sum  of (a) the unpaid balance of Revolving Loans,  (b)  the
aggregate  amount  of Pending Revolving Loans,  (c)  one  hundred
percent  (100%)  of  the aggregate undrawn  face  amount  of  all
outstanding   Letters  of  Credit  (less  any   Designated   Cash
Collateral therefor), and (d) the aggregate amount of any  unpaid
reimbursement obligations in respect of Letters of Credit.

          "Agreement" means this Loan and Security Agreement.

          "Anniversary  Date"  means  each  anniversary  of   the
Initial Funding Date.

          "Applicable Margin" means

               (i)  with respect to Base Rate Revolving Loans and
all  other  Obligations (other than LIBOR Revolving Loans),  one-
half percent (0.5%); and

               (ii)  with  respect to LIBOR Revolving Loans,  one
and one-half percent (1.5%).

          "Appraised  Value  of  Revenue  Equipment"  means   the
orderly  liquidation value of the Eligible Revenue Equipment,  as
set  forth in the most recent appraisal conducted by an appraiser
satisfactory to the Agent pursuant to Section 6.5.

          "Assigned  Contracts" means, collectively, all  of  the
Borrower's  rights and remedies under, and all moneys and  claims
for  money  due  or  to  become due to the Borrower  under  those
contracts  set  forth in Part A of Schedule 8.28, and  any  other
material  contracts,  and  any and all  amendments,  supplements,
extensions,  and renewals thereof including, without  limitation,
all  rights and claims of the Borrower now or hereafter existing:
(i)  under any insurance, indemnities, warranties, and guarantees
provided for or arising out of or in connection with any  of  the
foregoing agreements; (ii) for any damages arising out of or  for
breach  or  default  under  or  in connection  with  any  of  the
foregoing contracts; (iii) to all other amounts from time to time
paid  or payable under or in connection with any of the foregoing
agreements; or (iv) to exercise or enforce any and all covenants,
remedies, powers and privileges thereunder.

          "Assignee"    has    the    meaning    specified     in
Section 13.3(a).

          "Assignment  and Acceptance" has the meaning  specified
in Section 13.3(a).

          "Attorney  Costs"  means  and includes  all  reasonable
fees,  expenses  and  disbursements of  any  law  firm  or  other
external  counsel  engaged by the Agent, the  allocated  cost  of
reasonable  internal  legal  services  of  the  Agent   and   all
reasonable expenses and disbursements of internal counsel of  the
Agent.

          "Availability" means at any time the lesser of:

          (a) the Total Facility or

          (b) the sum of:

               (i) the Net Amount of Eligible Accounts multiplied
by the Account Advance Rate; plus

               (ii) the lesser of:

                    a) the Maximum Revolver Equipment Advance or

                    b)   the  Eligible  Revenue  Equipment  Value
multiplied by the Revenue Equipment Advance Rate;

          Less, in the case of each of (a) and (b) above, the sum
of (without duplication of amounts which have become ineligible):

               (A) the Aggregate Revolver Outstandings;

               (B)   following  the  occurrence  and  during  the
continuance  of  any  Event  of  Default,  reserves  for  accrued
interest on the Obligations;

               (C) the Environmental Compliance Reserve;

               (D) ACH Settlement Risk Reserve; and

               (E)  all  other  reserves which  the  Agent  deems
necessary  or desirable in the exercise of its reasonable  credit
judgment  to  maintain  with respect to the  Borrower's  account,
including, without limitation, reserves for any amounts which the
Agent or any Lender may be obligated to pay in the future for the
account of the Borrower.

          "BABC" means BankAmerica Business Credit, Inc.

          "BABC   Loan"  and  "BABC  Loans"  have  the   meanings
specified in Section 2.2(h).

          "Bank  of America" means Bank of America National Trust
and  Savings Association, a national banking association, or  any
successor entity thereto.

          "Bankruptcy  Code" means Title 11 of the United  States
Code (11 U.S.C.  101 et seq.).

          "Base Rate" means, for any day, the rate of interest in
effect  for such day as publicly announced from time to  time  by
Bank  of  America in San Francisco, California, as its "reference
rate"  (the "reference rate" being a rate set by Bank of  America
based upon various factors including Bank of America's costs  and
desired  return, general economic conditions and  other  factors,
and  is  used as a reference point for pricing some loans,  which
may  be  priced  at, above, or below such announced  rate).   Any
change  in the reference rate announced by Bank of America  shall
take  effect  at the opening of business on the day specified  in
the public announcement of such change.  Each Interest Rate based
upon  the  Base  Rate shall be adjusted simultaneously  with  any
change in the Base Rate.

          "Base  Rate  Revolving  Loan" means  a  Revolving  Loan
during  any period in which it bears interest based on  the  Base
Rate.

          "Blocked  Account Agreement" means the Blocked  Account
Agreement  among  the  Borrower,  the  Agent  and  United  States
National Bank of Oregon.

          "Borrowing"  means a borrowing hereunder consisting  of
Revolving  Loans  made  on the same day by  the  Lenders  to  the
Borrower  (or by BABC in the case of a Borrowing funded  by  BABC
Loans)  or by the Agent in the case of a Borrowing consisting  of
an Agent Advance.

          "Borrowing Base Certificate"  means the certificate  by
a  Responsible Officer of the Borrower, substantially in the form
of  Exhibit  A  (or another form acceptable to the  Agent)  which
(a)  is  required to be delivered on a weekly basis  pursuant  to
Section  6.7  (it  being understood and agreed  that  information
included  therein with respect to the Accounts  will  be  updated
weekly,  and that other information included therein with respect
to  Accounts of the type described in Accounts Dilution Rate  and
with respect to Included Revenue Equipment will be updated as  of
the  end  of each month), (b) sets forth the calculation  of  the
Availability, including a calculation of each component  thereof,
and  is  dated, as of the close of business on the last  Business
Day  of  the week covered by the certificate, and (c)  is  to  be
delivered  prior  to  the end of the third Business  Day  of  the
following  week;  all  in  such detail  as  shall  be  reasonably
satisfactory  to the Agent.  All calculations of Availability  in
connection with the preparation of any Borrowing Base Certificate
shall  originally  be made by the Borrower and certified  to  the
Agent;  provided, that the Agent shall have the right  to  review
and  adjust,  in the exercise of its reasonable credit  judgment,
any  such  calculation (1) to reflect its reasonable estimate  of
declines in value of any of the Collateral described therein, and
(2) to the extent that such calculation is not in accordance with
this Agreement.

          "Business  Day"  means  (a)  any  day  that  is  not  a
Saturday,  Sunday,  or  a day on which banks  in  San  Francisco,
California, are required or permitted to be closed, and (b)  with
respect to all notices, determinations, fundings and payments  in
connection with the LIBOR Rate or LIBOR Revolving Loans, any  day
that  is a Business Day pursuant to clause (a) above and that  is
also  a  day  on which trading in Dollars is carried  on  by  and
between banks in the London interbank market.

          "Canadian   Freightways"  means  Canadian   Freightways
Limited,  a corporation organized under the laws of the  Province
of   Alberta,  Canada,  and  a  wholly-owned  subsidiary  of  the
Borrower.

          "Capital  Adequacy  Regulation"  means  any  guideline,
request  or  directive of any central bank or other  Governmental
Authority, or any other law, rule or regulation, whether  or  not
having the force of law, in each case, regarding capital adequacy
of any bank or of any corporation controlling a bank.

          "Capital  Expenditures" means all payments due (whether
or  not  paid)  in  respect of the cost of  any  fixed  asset  or
improvement,  or replacement, substitution, or addition  thereto,
which has a useful life of more than one year, including, without
limitation, those costs arising in connection with the direct  or
indirect acquisition of such asset by way of increased product or
service  charges or offset items or in connection with a  Capital
Lease or a Synthetic Lease.

          "Capital  Lease"  means any lease of  Property  by  the
Borrower  which,  in  accordance  with  GAAP,  is  or  should  be
capitalized  on  the Borrower's balance sheet or  for  which  the
amount  of  the  asset  and  liability  thereunder,  as   if   so
capitalized,  should be disclosed in a footnote to  such  balance
sheet.

          "Change  in Control" means (a) the acquisition  by  any
"person"  or  "group" (as such terms are used  in  Section  13(d)
and  14(d)(2) of the Exchange Act (other than a Person who is not
an  Unrelated Person) of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act) of 25% or more of the outstanding shares of  voting
stock  of  the Parent; or (b) during any period of 12 consecutive
calendar  months,  commencing on the date of the  Agreement,  the
ceasing  of  those individuals (the "Continuing  Directors")  who
(i)  were  directors of the Parent on the first day of each  such
period  or  (ii) subsequently became directors of the Parent  and
whose   initial  election  or  initial  nomination  for  election
subsequent  to  that  date was approved  by  a  majority  of  the
Continuing Directors then on the board of directors of the Parent
to constitute a majority of the board of directors of the Parent.

          "Closing Date" means the date of this Agreement.

          "Closing Fee" has the meaning specified in Section 3.4.

          "Code"  means  the Internal Revenue Code  of  1986,  as
amended  from  time  to  time,  and any  successor  statute,  and
regulations promulgated thereunder.

          "Collateral" has the meaning specified in Section 6.1.

          "Commitment"  means,  at any time  with  respect  to  a
Lender, the principal amount set forth beside such Lender's  name
under  the  heading "Commitment" on the signature pages  of  this
Agreement  or  on  the  signature  page  of  the  Assignment  and
Acceptance  pursuant  to  which  such  Lender  became  a   Lender
hereunder in accordance with the provisions of Section  13.3,  as
such  Commitment may be adjusted from time to time in  accordance
with  the  provisions  of  Section 13.3  or  Section  2.1(b)  and
"Commitments"  means, collectively, the aggregate amount  of  the
commitments of all of the Lenders.

          "Contaminant"  means  any waste,  pollutant,  hazardous
substance,  toxic  substance,  hazardous  waste,  special  waste,
petroleum  or petroleum-derived substance or waste,  asbestos  in
any form or condition, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste.

          "Debt"  means,  without duplication,  all  liabilities,
obligations and indebtedness of a Person to any other Person,  of
any  kind  or  nature, now or hereafter owing,  arising,  due  or
payable,  howsoever  evidenced, created,  incurred,  acquired  or
owing,  whether primary, secondary, direct, contingent, fixed  or
otherwise,  and  including,  without  in  any  way  limiting  the
generality of the foregoing:  (i) the Borrower's liabilities  and
obligations to trade creditors; (ii) all Obligations;  (iii)  all
obligations and liabilities of any Person secured by any Lien  on
the  Property of such Person, even though such Person  shall  not
have  assumed or become liable for the payment thereof; provided,
however,  that  all  such obligations and liabilities  which  are
limited  in recourse to such Property shall be included  in  Debt
only to the extent of the book value of such Property as would be
shown  on  a  balance sheet of such Person prepared in accordance
with GAAP; (iv) all obligations or liabilities created or arising
under  any Capital Lease, Synthetic Lease or conditional sale  or
other title retention agreement with respect to Property used  or
acquired  by  a  Person, even if the rights and remedies  of  the
lessor,  seller or lender thereunder are limited to  repossession
of  such  Property; provided, however, that all such  obligations
and  liabilities which are limited in recourse to  such  Property
shall be included in Debt only to the extent of the book value of
such  Property as would be shown on a balance sheet of the Person
prepared  in  accordance with GAAP; (v) all accrued pension  fund
and  other  employee  benefit plan obligations  and  liabilities;
(vi)  all  obligations and liabilities under  any  Guaranty;  and
(vii) deferred tax liability.

          "Debt For Borrowed Money" means Debt for borrowed money
or  as evidenced by notes, bonds, debentures or similar evidences
of any such Debt of such Person, the deferred and unpaid purchase
price  of  any  Property or business (other than  trade  accounts
payable   incurred  in  the  ordinary  course  of  business   and
constituting  current  liabilities)  and  all  obligations  under
Capital Leases or Synthetic Leases.

          "Default"  means any event or circumstance which,  with
the  giving of notice, the lapse of time, or both, would (if  not
cured or otherwise remedied during such time) constitute an Event
of Default.

          "Defaulting  Lender"  has  the  meaning  specified   in
Section 2.2(g)(ii).

          "Default  Rate" means a fluctuating per annum  interest
rate  at  all  times  equal  to the  sum  of  (a)  the  otherwise
applicable Interest Rate (without any adjustment provided for  in
clauses  (B)  or  (C)  of  the proviso to Section  3.1(a)),  plus
(b)  two  percent  (2.0%).  Each Default Rate shall  be  adjusted
simultaneously  with any change in the applicable Interest  Rate.
In  addition, with respect to Letters of Credit, the Default Rate
shall  mean  an increase in the Letter of Credit Fee by  two  (2)
percentage  points (without any adjustment to such  Fee  provided
for in clauses (a) or (b) of the proviso to Section 3.6).

          "Designated Cash Collateral" means any cash  collateral
pledged  by  the  Borrower and designated as cash collateral  for
outstanding Letters of Credit pursuant to Section 2.3(j).

          "Distribution"  has  the  meaning  set  forth  in   the
Form 10.

          "DOL"  means the United States Department of  Labor  or
any successor department or agency.

          "Dollar"  and "$" means dollars in the lawful  currency
of the United States.

          "Eligible Accounts" means all Accounts of the Borrower,
unless  the  Agent  in the exercise of its reasonable  commercial
discretion  determines that an Account shall  not  be  considered
eligible  due to the risk of uncollectability or delay in  timely
collection.   Without limiting the discretion  of  the  Agent  to
establish  other  criteria  of ineligibility,  Eligible  Accounts
shall  not,  unless  the  Agent in its  sole  discretion  elects,
include any Account (without duplication):

               (a)   with respect to which more than 90 days have
elapsed since the date of the original invoice therefor;

               (b)    with   respect   to  which   any   of   the
representations, warranties, covenants, and agreements  contained
in  Section  6.8(a)  are not or have ceased to  be  complete  and
correct or have been breached;

               (c)  with respect to which, in whole or in part, a
check,   promissory  note,  draft,  trade  acceptance  or   other
instrument for the payment of money has been received,  presented
for payment and returned uncollected for any reason;

               (d)   as to which any one or more of the following
events  has occurred with respect to the Account Debtor  on  such
Account:   death  or judicial declaration of incompetency  of  an
Account Debtor who is an individual; the filing by or against the
Account   Debtor  of  a  request  or  petition  for  liquidation,
reorganization, arrangement, adjustment of debts, adjudication as
a  bankrupt,  winding-up, or other relief under  the  bankruptcy,
insolvency,  or similar laws of the United States, any  state  or
territory  thereof, or any foreign jurisdiction, now or hereafter
in  effect;  the making of any general assignment by the  Account
Debtor  for  the  benefit  of creditors;  the  appointment  of  a
receiver  or  trustee for the Account Debtor or for  any  of  the
assets of the Account Debtor, including, without limitation,  the
appointment of or taking possession by a "custodian," as  defined
in the Bankruptcy Code; the institution by or against the Account
Debtor  of  any  other type of insolvency proceeding  (under  the
bankruptcy  laws  of the United States or otherwise)  or  of  any
formal  or informal proceeding for the dissolution or liquidation
of,  settlement of claims against, or winding up of  affairs  of,
the  Account Debtor; the sale, assignment, or transfer of all  or
any  material  part  of  the assets of the  Account  Debtor;  the
nonpayment generally by the Account Debtor of its debts  as  they
become  due;  or  the cessation of the business  of  the  Account
Debtor as a going concern;

               (e)   if  fifty  percent  (50%)  or  more  of  the
aggregate Dollar amount of outstanding Accounts owed at such time
by  the Account Debtor thereon is classified as ineligible  under
the other criteria set forth in subparagraphs (a) or (r) hereof;

               (f)  owed by an Account Debtor which: (i) does not
maintain  an office in the United States or Canada to  which  the
Account  is  billed;  or (ii) is the government  of  any  foreign
country   or   sovereign  state,  or  of  any  state,   province,
municipality, or other political subdivision thereof, or  of  any
department,  agency, public corporation, or other instrumentality
thereof;  except to the extent that such Account  is  secured  or
payable  by a letter of credit satisfactory to the Agent  in  its
sole discretion;

               (g)   owed  by  an  Account  Debtor  which  is  an
Affiliate or employee of the Borrower;

               (h)   except as provided in (j) below, as to which
either the perfection, enforceability, or validity of the Agent's
Lien  in such Account, or the Agent's right or ability to  obtain
direct  payment to the Agent of the proceeds of such Account,  is
governed  by  any federal, state, or local statutory requirements
other than those of the UCC;

               (i)   which is owed by an Account Debtor to  which
the  Borrower  is indebted in any way (including any indebtedness
arising  from  damage  to  the  Account  Debtor's  goods   during
shipment)  or  which  is  subject  to  any  right  of  setoff  or
recoupment  by the Account Debtor, unless (i) the Account  Debtor
has  entered into an agreement acceptable to the Agent  to  waive
setoff  rights  or  if  the Account Debtor thereon  has  disputed
liability or made any claim with respect to any other Account due
from  such  Account Debtor; but in each such  case  only  to  the
extent  of  such  indebtedness, setoff, recoupment,  dispute,  or
claim;  provided,  however,  notwithstanding  the  foregoing,  an
Account shall not be considered ineligible if it is subject to  a
right  of  setoff  which right arises in the ordinary  course  of
business from a transaction not related to the Account ("Eligible
Setoff  Account"); provided, further, however  that  an  Eligible
Setoff  Account shall nevertheless be ineligible  to  the  extent
described  above  if (i) such an Account is owed  by  an  Account
Debtor  which  constitutes  one of the  fifteen  largest  Account
Debtors  of the Borrower, and (ii) the Borrower's obligations  to
such Account Debtor are greater than $50,000;

               (j)  which is owed by the government of the United
States   of   America   or  Canada,  by  any   state,   province,
municipality, or other political subdivision of the United States
of  America  or  Canada,  or  by any department,  agency,  public
corporation,  or other instrumentality of any such  entities,  to
the  extent the Dollar amount of such Account, when added to  the
aggregate  Dollar amount of all other Eligible Accounts  owed  by
any  of such entities, exceeds five percent (5%) of the aggregate
Dollar amount of all other Eligible Accounts;

               (k)  which is owed by any state, municipality,  or
other  political subdivision of the United States of America,  or
any    department,   agency,   public   corporation,   or   other
instrumentality thereof and as to which the Agent determines that
the Agent's Lien therein is not or cannot be perfected;

               (l)  which is an Interline Account;

               (m)   which is evidenced by a promissory  note  or
other instrument or by chattel paper;

               (n)   with respect to which the Account Debtor  is
located in any state requiring the filing of a Notice of Business
Activities  Report  or  similar report in  order  to  permit  the
Borrower to seek judicial enforcement in such state of payment of
such  Account, unless such Borrower has qualified to do  business
in such state or has filed a Notice of Business Activities Report
or equivalent report for the then current year;

               (o)   which  does not arise out of services  being
rendered in the ordinary course of the Borrower's freight carrier
business;

               (p)   arises out of a contract or order which,  by
its  enforceable  terms,  forbids, restricts  or  makes  void  or
unenforceable  the granting of an Agent's Lien  by  the  Borrower
with respect to such Account;

               (q)   which is not subject to a first priority and
perfected Agent's Lien;

               (r)  which has been classified by the Borrower  as
a  "type  8 account" and represents a past due Account in dispute
or subject to collection;

               (s)   if  the  Agent  believes in  its  reasonable
credit  judgment that the prospect of collection of such  Account
is  impaired or that the Account may not be paid by reason of the
Account Debtor's financial inability to pay; or

               (t)   which is owed by an Account Debtor which the
Agent, in its reasonable credit judgment, otherwise deems  to  be
uncreditworthy.

          If  any  Account at any time ceases to be  an  Eligible
Account  by  reason  of any of the foregoing  exclusions  or  any
failure to meet any other eligibility criteria established by the
Agent  in  the  exercise of its reasonable discretion  then  such
Account  shall  promptly  be excluded  from  the  calculation  of
Eligible Accounts.  With respect to Accounts described in clauses
(a)  and  (e)  above,  the  Agent's discretion  to  include  such
Accounts  as  Eligible Accounts shall not exceed  $10,000,000  of
such Accounts outstanding at any time unless otherwise authorized
by the Majority Lenders.

          "Eligible  Revenue  Equipment" means Revenue  Equipment
upon which there exists a perfected, first priority Agent's Lien.

          "Eligible  Revenue Equipment Value" means  the  orderly
liquidation  value of Eligible Revenue Equipment,  based  on  the
most  recent appraisal conducted by an appraiser satisfactory  to
the  Agent  pursuant to Section 6.5, but adjusted for  subsequent
purchases,  sales and other disposals according  to  the  monthly
reports received by the Agent pursuant to Section 6.7.

          "Environmental   Claims"  means  all  claims,   however
asserted, by any Governmental Authority or other Person  alleging
potential  liability  or  responsibility  for  violation  of  any
Environmental Law, or for release or injury to the environment.

          "Environmental Compliance Reserve" means  any  reserves
which  the  Agent,  after the Closing Date,  establishes  in  its
reasonable  commercial discretion from time to time  for  amounts
that  are  reasonably likely to be expended by  the  Borrower  in
order  for the Borrower and its operations and property to comply
with  any notice from a Governmental Authority asserting material
non-compliance with Environmental Laws; provided,  however,  that
for  the  purposes of calculating Availability, any Environmental
Compliance  Reserve amounts may be used to make  Revolving  Loans
solely  for  the purpose of making the environmental expenditures
described above.

          "Environmental Laws" means all federal, state or  local
laws, statutes, common law duties, rules, regulations, ordinances
and  codes,  together  with all administrative  orders,  directed
duties,  requests, licenses, authorizations and permits  of,  and
agreements  with,  any  Governmental  Authority,  in  each   case
relating to environmental, health, safety and land use matters.

          "Environmental  Lien"  means a Lien  in  favor  of  any
Governmental   Authority  for  (1)  any   liability   under   any
Environmental  Laws,  or  (2)  damages  arising  from,  or  costs
incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.

          "Equipment" means all of the Borrower's now  owned  and
hereafter  acquired machinery, equipment, furniture, furnishings,
fixtures,   and   other   tangible  personal   property   (except
Inventory), including Revenue Equipment and other motor  vehicles
with  respect  to which a certificate of title has  been  issued,
aircraft, dies, tools, jigs, and office equipment, as well as all
of  such types of property leased by the Borrower and all of  the
Borrower's  rights and interests with respect thereto under  such
leases  (including,  without limitation,  options  to  purchase);
together  with  all present and future additions  and  accessions
thereto, replacements therefor, component and auxiliary parts and
supplies  used  or  to be used in connection therewith,  and  all
substitutes for any of the foregoing, and all manuals,  drawings,
instructions,   warranties  and  rights  with  respect   thereto;
wherever any of the foregoing is located.

          "ERISA"  means the Employee Retirement Income  Security
Act of 1974, and regulations promulgated thereunder.

          "ERISA  Affiliate" means any trade or business (whether
or  not  incorporated)  under common control  with  the  Borrower
within  the  meaning of Section 414(b) or (c) of  the  Code  (and
Sections  414(m) and (o) of the Code for purposes  of  provisions
relating  to  Section  412  of  the Code,  determined  after  the
distribution  of  the  common  stock  of  the  Borrower  to   the
shareholders of the Former Parent).

          "ERISA Event" means (a) a Reportable Event with respect
to  a Pension Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate  from a Pension Plan subject to Section 4063  of  ERISA
during  a  plan year in which it was a substantial  employer  (as
defined  in  Section  4001(a)(2) of  ERISA)  or  a  cessation  of
operations  which is treated as such a withdrawal  under  Section
4062(e)  of  ERISA; (c) a complete or partial withdrawal  by  the
Borrower  or  any ERISA Affiliate from a Multi-employer  Plan  or
notification  that  a Multi-employer Plan is  in  reorganization;
(d)  the filing of a notice of intent to terminate, the treatment
of  a Plan amendment as a termination under Section 4041 or 4041A
of  ERISA,  or  the commencement of proceedings by  the  PBGC  to
terminate a Pension Plan or Multi-employer Plan; (e) an event  or
condition  which  might  reasonably  be  expected  to  constitute
grounds  under Section 4042 of ERISA for the termination  of,  or
the  appointment of a trustee to administer, any Pension Plan  or
Multi-employer Plan; or (f) the imposition of any liability under
Title  IV  of  ERISA,  other  than  PBGC  premiums  due  but  not
delinquent under Section 4007 of ERISA, upon the Borrower or  any
ERISA Affiliate.

          "Event  of  Default"  has  the  meaning  specified   in
Section 11.1.

          "Exchange  Act"  means the Securities Exchange  Act  of
1934, and regulations promulgated thereunder.

          "Excluded Property" means Real Estate (and any fixtures
and  intangible property (such as permits, maintenance contracts,
blueprints  and  designs) which are in  each  case  directly  and
specifically related to the particular parcel of Real  Estate  if
covered  by a mortgage of such Real Estate), the Excluded Revenue
Equipment  and stock of Subsidiaries of the Borrower existing  as
of  the  Closing Date other than the 65% of the stock of Canadian
Freightways Limited pledged to the Agent for the benefit  of  the
Lenders pursuant to the Stock Pledge Agreement.

          "Excluded   Revenue   Equipment"  means   the   Revenue
Equipment listed on Schedule 8.31.

          "FDIC" means the Federal Deposit Insurance Corporation,
and any Governmental Authority succeeding to any of its principal
functions.

          "Federal  Funds Rate" means, for any day, the rate  set
forth  in the weekly statistical release designated as H.15(519),
or  any  successor publication, published by the Federal  Reserve
Bank  of New York (including any such successor, "H.15(519)")  on
the  preceding  Business Day opposite the caption "Federal  Funds
(Effective)";  or, if for any relevant day such rate  is  not  so
published on any such preceding Business Day, the rate  for  such
day will be the arithmetic mean as determined by the Agent of the
rates  for  the  last  transaction  in  overnight  Federal  funds
arranged prior to 9:00 a.m. (New York City time) on that  day  by
each  of  three leading brokers of Federal funds transactions  in
New York City selected by the Agent.

          "Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereto.

          "Fee  Letter" means the letter dated November  5,  1996
from  BABC to the Former Parent reflecting certain fees  owed  to
BABC  in  connection  with this Agreement  and  the  transactions
contemplated  hereby, and accepted by the Former Parent  and  the
Borrower on that date.

          "Financial Statements" means, according to the  context
in  which  it  is used, the financial statements referred  to  in
Section  8.6  or  any other financial statements required  to  be
given to the Lenders pursuant to this Agreement.

          "Fiscal  Year"  means the Borrower's  fiscal  year  for
financial  accounting purposes. The current Fiscal  Year  of  the
Borrower will end on December 31, 1996.

          "Fixed  Charge Coverage Ratio" means, for  any  period,
the  ratio  of  (a)  Adjusted Net Earnings for  such  period,  to
(b)  the  sum of the following: (i) total principal and  interest
payments made or required to be made (without duplication) during
such period by the Parent, the Borrower and their Subsidiaries on
Debt  for  Borrowed Money plus any Letter of Credit  Fees  during
such  period,  (ii) Capital Expenditures net of asset  sales  and
(iii) accrued income taxes during such period.

          "Form  10" means the Registration Statement on Form  10
(including the information Statement on Form 14C included therein
at  the  time  of its effectiveness) filed by Borrower  with  the
Securities and Exchange Commission ("SEC") and declared effective
by the SEC on November 7, 1996.

          "Former  Parent"  means Consolidated Freightways,  Inc.
which may in the future be renamed CNF Transportation, Inc.

          "Former  Parent Obligations" has the meaning set  forth
in Section 8.32.

          "Funding  Date"  means the date on  which  a  Borrowing
occurs.

          "GAAP"  means generally accepted accounting  principles
set forth from time to time in the opinions and pronouncements of
the  Accounting  Principles Board and the American  Institute  of
Certified Public Accountants and statements and pronouncements of
the  Financial  Accounting  Standards  Board  (or  agencies  with
similar functions of comparable stature and authority within  the
U.S.   accounting  profession),  which  are  applicable  to   the
circumstances as of the Closing Date.

          "General  Intangibles" means all of the Borrower's  now
owned   or   hereafter  arising,  created  or  acquired   general
intangibles, choses in action and causes of action and all  other
intangible  personal property of the Borrower of every  kind  and
nature (other than Accounts), including, without limitation,  all
contract  rights, Proprietary Rights, corporate or other business
records,  inventions, designs, blueprints, plans, specifications,
patents,  patent applications, trademarks, service  marks,  trade
names,  trade  secrets, goodwill, copyrights, computer  software,
customer  lists, registrations, licenses, franchises, tax  refund
claims,  any  funds  which may become  due  to  the  Borrower  in
connection  with  the termination of any Plan or  other  employee
benefit  plan or any rights thereto and any other amounts payable
to  the  Borrower from any Plan or other employee  benefit  plan,
rights  and  claims  against carriers  and  shippers,  rights  to
indemnification,  business interruption  insurance  and  proceeds
thereof, property, casualty or any similar type of insurance  and
any proceeds thereof, proceeds of insurance covering the lives of
key  employees  on  which the Borrower is  beneficiary,  and  any
letter  of credit, guarantee, claim, security interest  or  other
security held by or granted to the Borrower.

          "Governmental   Authority"   means   any   nation    or
government, any state or other political subdivision thereof, any
central  bank  (or  similar  monetary  or  regulatory  authority)
thereof,  any entity exercising executive, legislative, judicial,
regulatory  or  administrative  functions  of  or  pertaining  to
government,  and  any  corporation  or  other  entity  owned   or
controlled,  through stock or capital ownership or otherwise,  by
any of the foregoing.

          "Guaranty"  means,  with respect  to  any  Person,  all
obligations  of  such  Person which in  any  manner  directly  or
indirectly guarantee or assure, or in effect guarantee or assure,
the payment or performance of any indebtedness, dividend or other
obligations  of  any other Person (the "guaranteed obligations"),
or  assure  or  in  effect assure the holder  of  the  guaranteed
obligations  against loss in respect thereof, including,  without
limitation,  any such obligations incurred through an  agreement,
contingent   or   otherwise:  (a)  to  purchase  the   guaranteed
obligations  or  any  property  constituting  security  therefor;
(b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or  other
balance  sheet condition; or (c) to lease property or to purchase
any  debt or equity securities or other property or services, but
excluding  the endorsement for collection of checks  received  in
the ordinary course of business.

          "Included   Revenue   Equipment"  means   all   Revenue
Equipment other than Excluded Revenue Equipment.

          "Initial  Funding  Date" means the date  on  which  the
first  Revolving Loan is made pursuant to this Agreement  or  the
first  Letter  of  Credit is issued pursuant to  this  Agreement,
which  date  shall  be  substantially  contemporaneous  with  the
consummation of the Distribution.

          "Intercompany   Accounts"   means   all   assets    and
liabilities, however arising, which are due to the Borrower from,
which are due from the Borrower to, or which otherwise arise from
any transaction by the Borrower with, any Affiliate.

          "Intercreditor    Agreement"   means    that    certain
Intercreditor  Agreement of even date herewith among  the  Former
Parent, certain of its Affiliates and the Agent.

          "Interest  Period"  means, as to  any  LIBOR  Revolving
Loan, the period commencing on the Funding Date of such Revolving
Loan  or  on  the  Conversion/ Continuation  Date  on  which  the
Revolving  Loan  is  converted  into  or  continued  as  a  LIBOR
Revolving  Loan, and ending on the date one, two,  three  or  six
months  thereafter as selected by the Borrower in its  Notice  of
Borrowing or Notice of Conversion/ Continuation; provided that:

               (i)  if any Interest Period would otherwise end on
a  day that is not a Business Day, that Interest Period shall  be
extended to the following Business Day unless the result of  such
extension  would  be to carry such Interest Period  into  another
calendar month, in which event such Interest Period shall end  on
the preceding Business Day;

               (ii)  any  Interest Period pertaining to  a  LIBOR
Revolving Loan that begins on the last Business Day of a calendar
month   (or   on  a  day  for  which  there  is  no   numerically
corresponding  day  in the calendar month  at  the  end  of  such
Interest  Period)  shall  end on the last  Business  Day  of  the
calendar month at the end of such Interest Period; and

               (iii)      no Interest Period shall extend  beyond
the Stated Termination Date.

          "Interest  Rate"  means each or  any  of  the  interest
rates, including the Default Rate, set forth in Section 3.1.

          "Interline Accounts" means Accounts that are  due  from
other freight carriers.

          "Inventory" means all of the Borrower's now  owned  and
hereafter  acquired  inventory,  goods,  merchandise,  and  other
tangible  personal property, wherever located,  to  be  furnished
under  any  contract of service or held for sale  or  lease,  all
returned  goods, raw materials, other materials and  supplies  of
any kind, nature or description which are or might be consumed in
the  Borrower's business or used in connection with the  packing,
shipping,  advertising,  selling  or  finishing  of  such  goods,
merchandise  and such other personal property, and all  documents
of title or other documents representing them.

          "IRS"  means  the  Internal  Revenue  Service  and  any
Governmental  Authority  succeeding  to  any  of  its   principal
functions under the Code.

          "Landlord's Waiver" means an agreement substantially in
the form of Exhibit E hereto (with such changes thereto as may be
approved  from time to time by the Agent) executed by a  landlord
of any premises leased by the Borrower.

          "Latest  Projections" means:  (a) on the  Closing  Date
and  thereafter until the Agent receives new projections pursuant
to  Section  7.2(f), the projections of the Borrower's  financial
condition,   results  of  operations,  and   cash   flow,   dated
September  9,  1996;  and (b) thereafter,  the  projections  most
recently received by the Agent pursuant to Section 7.2(f).

          "L/C  Issuer" means NationsBank of Texas, N.A.  or  any
Replacement   L/C   Issuer  pursuant   to   the   provisions   of
Section 2.3(k).

          "Leland"  means  Leland  James Service  Corporation,  a
wholly-owned Subsidiary of the Parent.

          "Leland  Guaranty" means that certain Guaranty of  even
date  herewith executed by Leland in favor of the Agent, the  L/C
Issuer and the Lenders.

          "Leland Security Agreement" means that certain Security
Agreement  of  even  date herewith executed  by  Leland  securing
Leland's obligations to the Agent, the L/C Issuer and the Lenders
under the Leland Guaranty.

          "Lender"  and "Lenders" have the meanings specified  in
the introductory paragraph hereof and shall include the Agent  to
the  extent  of  any Agent Advance outstanding and  BABC  to  the
extent of any BABC Loan outstanding; provided that no such  Agent
Advance  or  BABC Loan shall be taken into account in determining
any Lender's Pro Rata Share.

          "Letter  of  Credit"  has  the  meaning  specified   in
Section 2.3(a).

          "Letter  of  Credit Fee" has the meaning  specified  in
Section 3.6.

          "LIBOR  Rate"  means,  for any  Interest  Period,  with
respect  to  LIBOR Revolving Loans comprising part  of  the  same
Borrowing, the rate of interest per annum (rounded upward to  the
next 1/1000th of 1.0%) determined by the Agent as follows:

          LIBOR                      Rate                       =
LIBOR
                 1.00 - Eurodollar Reserve Percentage

          Where,

                         "Eurodollar            Reserve
               Percentage"  means for any day  for  any
               Interest  Period  the  maximum   reserve
               percentage  (expressed  as  a   decimal,
               rounded  upward to the next  1/100th  of
               1%)  in  effect on such day (whether  or
               not  applicable  to  any  Lender)  under
               regulations issued from time to time  by
               the    Federal   Reserve    Board    for
               determining    the    maximum    reserve
               requirement  (including  any  emergency,
               supplemental  or other marginal  reserve
               requirement)     with     respect     to
               Eurocurrency funding (currently referred
               to as "Eurocurrency liabilities"); and

                         "LIBOR"  means  the  rate   of
               interest  per annum (rounded  upward  to
               the  next 1/16th of 1%) notified to  the
               Agent by Bank of America as the rate  of
               interest at which dollar deposits in the
               approximate amount of the Revolving Loan
               to be made or continued as, or converted
               into,  a LIBOR Revolving Loan and having
               a  maturity comparable to such  Interest
               Period  would  be  offered  by  Bank  of
               America's  applicable lending office  to
               major  banks  in  the London  eurodollar
               market   at  approximately  11:00   a.m.
               (London time) two Business Days prior to
               the   commencement  of   such   Interest
               Period.

          "LIBOR  Revolving Loan" means a Revolving  Loan  during
any period in which it bears interest based on the LIBOR Rate.

          "Lien" means:  (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the  owner
of  the  property, whether such interest is based on  the  common
law,  statute,  or contract, and including without limitation,  a
security  interest,  charge,  claim,  or  lien  arising  from   a
mortgage,  deed  of  trust, encumbrance,  pledge,  hypothecation,
assignment,  deposit arrangement, agreement, security  agreement,
conditional  sale  or  trust receipt or a lease,  consignment  or
bailment  for  security  purposes; and  (b)  to  the  extent  not
included   under   clause   (a),  any   reservation,   exception,
encroachment,   easement,  right-of-way,   covenant,   condition,
restriction,  lease  or  other  title  exception  or  encumbrance
affecting property.

          "Loan  Account" means the loan account of the Borrower,
which account shall be maintained by the Agent.

          "Loan    Documents"   means   this    Agreement,    the
Intercreditor Agreement, the Patent and Trademark Agreements, the
Parent Guaranty, the Parent Security Agreement, the Parent Pledge
Agreement,  the Stock Pledge Agreement, the Leland Guaranty,  the
Leland  Security  Agreement, the Blocked Account  Agreement,  the
Post-Closing  Letter and any other agreements,  instruments,  and
documents  heretofore,  now  or hereafter  evidencing,  securing,
guaranteeing  or  otherwise  relating  to  the  Obligations,  the
Collateral,  or any other aspect of the transactions contemplated
by this Agreement.

          "Loan  Parties" means, collectively, the Borrower,  the
Parent, Leland and all new domestic Subsidiaries which are formed
pursuant to Section 9.19; and, individually, any of the foregoing
Persons.

          "Majority  Lenders" means at anytime Lenders whose  Pro
Rata shares aggregate two-thirds (2/3) or more of the Commitments
or,  if no Commitments shall then be in effect, Lenders who  hold
two-thirds (2/3) or more of the aggregate principal amount of the
Revolving Loans then outstanding.

          "Margin  Stock" means "margin stock" as  such  term  is
defined in Regulation G, T, U or X of the Federal Reserve Board.

          "Material Adverse Effect" means (a) a material  adverse
change  in,  or  a material adverse effect upon, the  operations,
business,  properties,  condition  (financial  or  otherwise)  or
prospects  of  the  Borrower or the Collateral;  (b)  a  material
impairment  of the ability of the Borrower to perform  under  any
Loan  Document  and  to  avoid any Event of  Default;  or  (c)  a
material  adverse  effect  upon the legality,  validity,  binding
effect  or  enforceability against the Borrower of  any  material
provision of any Loan Document; provided, however, that the  mere
occurrence  of a strike shall not in and of itself  constitute  a
Material  Adverse Effect, but the consequences of  a  strike  may
cause a Material Adverse Effect.

          "Maximum Rate" has the meaning specified in Section 3.3

          "Maximum  Revolver Amount" means $100,000,000  as  such
amount may be reduced pursuant to Section 2.1(b).

          "Maximum Revolver Equipment Advance" means $75,000,000.

          "Multi-employer Plan" means a "multi-employer plan"  as
defined  in  Section 4001(a)(3) of ERISA which is or was  at  any
time  during  the  current  year  or  the  immediately  preceding
five  (5) plan years contributed to by the Borrower or any  ERISA
Affiliate.

          "NationsBank" means NationsBank of Texas, N.A.

          "Net  Amount of Eligible Accounts" means, at any  time,
the gross amount of Eligible Accounts less:  (a) sales, excise or
similar  taxes;  (b)  returns,  discounts,  claims,  credits  and
allowances  of  any  nature at any time issued,  owing,  granted,
outstanding, available or claimed; (c) reserves, as determined by
the  Agent  in  the  exercise of its reasonable credit  judgment,
relating  to  Canadian  exchange  rate  translation  adjustments;
(d)  reserves, as determined by the Agent in the exercise of  its
reasonable  credit judgment, to reflect the prebilled  nature  of
the  Accounts  created by using the pick-up date as  the  invoice
date  rather  than  the  delivery  date;  and  (e)  reserves,  as
determined by the Agent in the exercise of its reasonable  credit
judgment,   relating  to  volume  discounts,  rebates,   customer
refunds, short-pays, unapplied cash, barter credits and any other
adjustments  regarding Accounts, as reflected on  the  Borrower's
general ledger system.

          "Notice  of  Borrowing" has the  meaning  specified  in
Section 2.2(b).

          "Notice  of  Conversion/ Continuation" has the  meaning
specified in Section 3.2(b).

          "Obligations"  means  all  present  and  future  loans,
advances, liabilities, obligations, covenants, duties, and  debts
owing  by  the Borrower to the Agent, the L/C Issuer  and/or  any
Lender, arising under or pursuant to this Agreement or any of the
other  Loan Documents, whether or not evidenced by any  note,  or
other  instrument or document, whether arising from an  extension
of  credit,  opening  of  a letter of credit,  acceptance,  loan,
guaranty,   indemnification  or  otherwise,  whether  direct   or
indirect  (including,  without  limitation,  those  acquired   by
assignment  from others, and any participation by the Agent,  the
L/C  Issuer  and/or any Lender in the Borrower's debts  owing  to
others), absolute or contingent, due or to become due, primary or
secondary,  as  principal or guarantor,  and  including,  without
limitation,  all  principal, interest, charges,  expenses,  fees,
attorneys' fees, filing fees and any other sums chargeable to the
Borrower  hereunder  or  under any of the other  Loan  Documents.
"Obligations"  includes,  without  limitation,  (a)  all   debts,
liabilities,  and  obligations now or hereafter  owing  from  the
Borrower to the Agent, the L/C Issuer and/or any Lender under  or
in  connection  with  the Letters of Credit and  (b)  all  debts,
liabilities  and  obligations now or  hereafter  owing  from  the
Borrower to the Agent, the L/C Issuer and Lenders arising from or
related to ACH Transactions.

          "Other  Taxes"  means any present or  future  stamp  or
documentary taxes or any other excise or property taxes,  charges
or  similar levies which arise from any payment made hereunder or
from  the  execution, delivery or registration of,  or  otherwise
with respect to, this Agreement or any other Loan Documents.

          "Parent"    shall    mean   Consolidated    Freightways
Corporation, the sole shareholder of the Borrower.

          "Parent  Guaranty" means that certain Guaranty of  even
date  herewith executed by the Parent in favor of the Agent,  the
L/C Issuer and the Lenders.

          "Parent  Pledge  Agreement" means that  certain  Pledge
Agreement  of  even  date  herewith pledging  all  stock  of  the
Borrower  and Leland to the Agent for the benefit of the  Lenders
to  secure  the  obligations  of  the  Parent  under  the  Parent
Guaranty.

          "Parent Security Agreement" means that certain Security
Agreement  of even date herewith executed by the Parent  securing
the Parent's obligations under the Parent Guaranty.

          "Participant"  means  any Person who  shall  have  been
granted  the right by any Lender to participate in the  financing
provided by such Lender under this Agreement, and who shall  have
entered  into  a  participation agreement in form  and  substance
satisfactory to such Lender.

          "Patent   and  Trademark  Agreements"  means  (i)   the
Supplemental  Security Agreement (Patents) and  the  Supplemental
Security  Agreement  (Trademarks), each  dated  as  of  the  date
hereof,  executed and delivered by the Borrower to the  Agent  to
evidence and perfect the Agent's Liens in the Borrower's  present
and  future patents, trademarks, and related licenses and  rights
and  (ii) the Supplemental Security Agreement (Patents)  and  the
Supplemental Security Agreement (Trademarks), each  dated  as  of
the  date  hereof, executed and delivered by the  Parent  to  the
Agent  to evidence and perfect the liens granted to the Agent  in
the  Parent's present and future patents, trademarks, and related
licenses and rights.

          "Payment  Account"  means  each  blocked  bank  account
established  pursuant to Section 6.9, to which the funds  of  the
Borrower (including, without limitation, proceeds of Accounts and
other  Collateral)  are  deposited  or  credited,  and  which  is
maintained in the name of the Agent or the Borrower, as the Agent
may determine, on terms acceptable to the Agent.

          "PBGC"  means the Pension Benefit Guaranty  Corporation
or   any  Governmental  Authority  succeeding  to  the  functions
thereof.

          "Pending  Revolving  Loans" means,  at  any  time,  the
aggregate  principal amount of all Revolving Loans  requested  in
any  outstanding  Notice(s) of Borrowing received  by  the  Agent
which have not yet been advanced.

          "Pension  Plan"  means a pension plan  (as  defined  in
Section  3(2)  of ERISA) subject to Title IV of ERISA  which  the
Borrower sponsors, maintains, or to which it makes, is making, or
is obligated to make contributions, or in the case of a Multiple-
employer  Plan   has made contributions at any  time  during  the
immediately preceding five (5) plan years.

          "Permitted Liens" means:

               (a)  Liens for taxes not delinquent;

               (b)  statutory Liens for taxes in an amount not to
exceed  $5,000,000 provided that the payment of such taxes  which
are  due  and  payable is being contested in good  faith  and  by
appropriate  proceedings  diligently  pursued  and  as  to  which
adequate  financial reserves have been established on  Borrower's
books  and records and a stay of enforcement of any such Lien  is
in effect;

               (c)  the Agent's Liens;

               (d)    deposits   under   worker's   compensation,
unemployment  insurance, social security and other similar  laws,
or to secure the performance of bids, tenders or contracts (other
than for the repayment of borrowed money) or to secure indemnity,
performance or other similar bonds for the performance  of  bids,
tenders  or  contracts (other than for the repayment of  borrowed
money)  or  to  secure statutory obligations  (other  than  liens
arising  under ERISA or Environmental Liens) or surety or  appeal
bonds, or to secure indemnity, performance or other similar bonds
in the ordinary course of business;

               (e)   Liens  securing  the claims  or  demands  of
materialmen,  mechanics,  carriers, warehousemen,  landlords  and
other  like Persons, provided that the payment thereof is not  at
the time required by Section 9.1;

               (f)    reservations,  exceptions,   encroachments,
easements,  rights of way, covenants running with the  land,  and
other similar title exceptions or encumbrances affecting any Real
Estate;  provided  that they do not in the  aggregate  materially
detract from the value of the Real Estate or materially interfere
with its use in the ordinary conduct of the Borrower's business;

               (g)   judgment and other similar Liens arising  in
connection  with  court  proceedings,  provided  that   (A)   the
existence of such Liens is being contested in good faith  and  by
proper  proceedings  diligently pursued, (B)  reserves  or  other
appropriate provision, if any, as are required by GAAP have  been
made therefor, (C) a stay of enforcement of any such Liens is  in
effect, (D) the priority of any such Liens is subordinate to that
of  the  Agent's Liens, and (E) the existence of any judgment  or
court  proceedings  upon  which such Liens  are  based  does  not
otherwise constitute an Event of Default under this Agreement;

               (h)  Liens on Excluded Revenue Equipment;

               (i)   Liens  on  the  Real  Estate  described   in
Section 8.32 to the extent permitted pursuant to Section 8.32 and
Excluded Property;

               (j)   purchase money security interests of sellers
or  financing  entities in connection with  Capital  Expenditures
permitted under Section 9.21; and

               (k)   Liens  in  existence on  the  date  of  this
Agreement which are set forth in Schedule 8.12.

          "Person"  means  any  individual, sole  proprietorship,
partnership,  joint venture, trust, unincorporated  organization,
association,  corporation, Governmental Authority, or  any  other
entity.

          "Plan"  means an employee benefit plan (as  defined  in
Section  3(3) of ERISA) which the Borrower sponsors or  maintains
or  to  which  the Borrower makes, is making, or is obligated  to
make contributions and includes any Pension Plan.

          "Prior  L/C  Issuer"  has  the  meaning  specified   in
Section 2.3(k).

          "Pro  Rata  Share" means, with respect to a  Lender,  a
fraction  (expressed as a percentage), the numerator of which  is
the  amount  of  such Lender's Commitment and the denominator  of
which  is  the  sum  of  the  amounts  of  all  of  the  Lenders'
Commitments.

          "Property"  means any interest in any kind of  property
or  asset,  whether  real,  personal or  mixed,  or  tangible  or
intangible.

          "Proprietary Rights" means, with respect to  a  Person,
all  now  owned  and  hereafter arising or  acquired:   licenses,
franchises,  permits, patents, patent rights,  copyrights,  works
which  are the subject matter of copyrights, trade secrets, other
proprietary information or materials, trademarks, service  marks,
trade  names,  trade styles, patent, trademark and  service  mark
applications,  and  other  intellectual property  or  proprietary
rights  and  all  licenses  and rights  related  to  any  of  the
foregoing,   including,   without  limitation,   those   patents,
trademarks, service marks, trade names and copyrights  set  forth
on  Schedule 8.13 hereto, and all other rights under any  of  the
foregoing,   all   extensions,  renewals,  reissues,   divisions,
continuations, and continuations-in-part of any of the foregoing,
and  all  rights to sue for past, present and future infringement
of any of the foregoing, in each case whether owned, licensed to,
or  otherwise held by such Person, whether now held or  hereafter
arising or acquired.

          "Real  Estate"  means  all of the  present  and  future
interests of any Person, as owner, lessee, or otherwise, in  real
property,  including,  without limitation, any  interest  arising
from an option to purchase or lease any such real property.

          "Reduction"    has    the    meaning    specified    in
Section 2.1(b).

          "Release"  means  a release, spill, emission,  leaking,
pumping,  injection,  deposit,  disposal,  discharge,  dispersal,
leaching or migration of a Contaminant into the indoor or outdoor
environment  or into or out of any Real Estate or other  property
in  violation of any Environmental Law, including the movement of
Contaminants  through  or  in  the  air,  soil,  surface   water,
groundwater or Real Estate  or other property.

          "Reportable Event" means, any of the events  set  forth
in  Section 4043(b) of ERISA or the regulations thereunder, other
than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.

          "Required Lenders" means at any time Lenders whose  Pro
Rata  Shares  aggregate  more than fifty  percent  (50%)  of  the
Commitments  or,  if  no Commitments shall  then  be  in  effect,
Lenders  who hold more than fifty percent (50%) of the  aggregate
principal amount of the Revolving Loans then outstanding.

          "Requirement of Law" means, as to any Person,  any  law
(statutory   or   common),  treaty,   rule   or   regulation   or
determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of  its
property  or  to  which  the Person or any  of  its  property  is
subject.

          "Replacement  L/C Issuer" has the meaning specified  in
Section 2.3(k).

          "Responsible  Officer" means the  chairman,  the  chief
executive  officer,  the president, the chief financial  officer,
the  treasurer and the controller of the Borrower, or  any  other
officer    having   substantially   the   same   authority    and
responsibility;  or,  with respect to compliance  with  financial
covenants  and the preparation of the Borrowing Base Certificate,
the  chief  financial  officer, treasurer,  assistant  treasurer,
controller, or director of financial accounting of the  Borrower,
or  any other officer having substantially the same authority and
responsibility.

          "Restricted   Investment"  means  any  acquisition   of
property  by  a  Person in exchange for cash or  other  property,
whether  in the form of an acquisition of stock, debt,  or  other
indebtedness or obligation, or the purchase or acquisition of any
other  property,  or  a loan, advance, capital  contribution,  or
subscription,  except acquisitions of the following:   (a)  goods
held  for sale or lease or to be used by a Person in the ordinary
course  of business; (b) current assets arising from the sale  or
lease  of  goods  or the rendition of services  in  the  ordinary
course  of  business of a Person; and (c) other  investments,  so
long  as  any such investment is materially consistent  with  the
Borrower's investment policy guidelines as approved from time  to
time  by  the Board of Directors of the Borrower (a copy  of  the
version  of  such  guidelines as of the date  of  this  Agreement
having  been delivered to each Lender); provided, that any change
from the guidelines previously submitted to the Lenders shall  be
submitted  to  the Agent for review and approval  and  shall  not
materially adversely affect the Lenders.

          "Restricted   Payments"  means,  in  respect   of   any
corporation:  (a) the payment or making of any dividend or  other
distribution  of  property in respect of capital  stock  (or  any
options  or  warrants for such stock) of such corporation,  other
than  distributions in capital stock (or any options or  warrants
for such stock) of the same class; or (b) the redemption or other
acquisition of any capital stock (or any options or warrants  for
such stock) of such corporation.

          "Revenue  Equipment"  means  Equipment  owned  by   the
Borrower  covered by a certificate of title, which  Equipment  is
utilized in the ordinary course of the Borrower's business.

          "Revenue  Equipment  Advance Rate"  means  seventy-five
percent  (75%),  provided, however, that  the  Revenue  Equipment
Advance Rate shall be reduced to sixty-five percent (65%) on  the
first  Anniversary Date and to fifty-five percent  (55%)  on  the
second  Anniversary Date, and provided, further, that so long  as
no  Default or Event of Default exists, upon receipt by the Agent
of  a  new appraisal pursuant to Section 6.5 establishing  a  new
Appraised  Value of the Revenue Equipment, the Revenue  Equipment
Advance  Rate  shall be restored to seventy-five  percent  (75%),
with such Revenue Equipment Advance Rate thereafter being reduced
to   sixty-five  percent  (65%)  and  fifty-five  percent  (55%),
respectively, on the first and second anniversary  dates  of  the
updated Appraised Value of the Revenue Equipment.

          "Revolving   Loans"  has  the  meaning   specified   in
Section 2.2.

          "Solvent"  means when used with respect to  any  Person
that  (a)  the fair value of all its assets is in excess  of  the
total  amount  of  its debts (including contingent  liabilities);
(b)  it is able to pay its debts as they mature; (c) it does  not
have  unreasonably small capital for the business in which it  is
engaged  or for any business or transaction in which it is  about
to  engage; and (d) it is not "insolvent" as such term is defined
in Section 101(32) of the Bankruptcy Code.

          "Stock    Pledge   Agreement"   means   that    certain
Supplemental  Security Agreement (Stock Pledge) executed  by  the
Borrower  in  favor of the Agent for the benefit of the  Lenders,
confirming   the  pledge  of  65%  of  the  stock   of   Canadian
Freightways.

          "Stated Termination Date" means January 2, 2000.

          "Subsidiary"   of  a  Person  means  any   corporation,
association, partnership, joint venture or other business  entity
of  which  more than fifty percent (50%) of the voting  stock  or
other  equity  interests  (in  the case  of  Persons  other  than
corporations), is owned or controlled directly or  indirectly  by
the Person, or one or more of the Subsidiaries of the Person,  or
a  combination  thereof.   Unless the context  otherwise  clearly
requires,  references  herein  to  a  "Subsidiary"  refer  to   a
Subsidiary of any of the Loan Parties.

          "Supporting Letter of Credit" has the meaning set forth
in Section 2.3(j).

          "Surviving  Indemnities" means any Obligations  in  the
nature  of an indemnity or hold harmless by the Borrower  or  any
other Loan Party in favor of the Agent, the L/C Issuer and/or any
Lender, arising under or pursuant to this Agreement or any of the
other  Loan Documents, which by its terms survives the latest  of
(the "Cut-off Date"):

               (i)  the termination of this Agreement,

               (ii) cancellation of all Letters of Credit, and

               (iii)      the payment of all principal, interest,
                    prepayment  penalties,  fees  and  all  other
                    Obligations   (not  in  the  nature   of   an
                    indemnity or hold harmless) due at  the  time
                    of  such payment under this Agreement and the
                    Loan Documents;

provided that there shall be excluded from such indemnity or hold
harmless  Obligations  all  amounts  that  are  due  and  payable
thereunder upon the Cutoff Date.

          "Synthetic  Leases" means (i) generally, a  lease  (and
related  documents) entered into in connection with the financing
of equipment which qualifies as an operating lease for accounting
purposes but which permits the lessee to be treated as the  owner
of the equipment for tax purposes, and (ii) specifically, each of
the synthetic leases described in the following sentence.  As  of
the  date of this Agreement, (x) Borrower is the lessee  under  a
synthetic  lease entered into on or about December 22, 1995  with
ABN  AMRO  Bank  N.V.  as agent and (y) Borrower,  together  with
certain  Subsidiaries  of  Former Parent,  are  lessees  under  a
synthetic lease entered into on or about September 30, 1994  with
BankAmerica Leasing & Capital Corp. as agent.

          "Taxes"  means  any and all present  or  future  taxes,
levies,  imposts,  deductions, charges or withholdings,  and  all
liabilities with respect thereto, excluding, in the case of  each
Lender,  the  L/C  Issuer and the Agent,  such  taxes  (including
income taxes or franchise taxes) as are imposed on or measured by
each  Lender's  net income by the jurisdiction (or any  political
subdivision thereof) under the laws of which such Lender, the L/C
Issuer  or  the  Agent,  as  the case may  be,  is  organized  or
maintains a lending office.

          "Termination  Date"  means the  earliest  to  occur  of
(i) the Stated Termination Date, (ii) the date the Total Facility
is  terminated either by the Borrower pursuant to Section 4.2  or
by  the Majority Lenders pursuant to Section 11.2, and (iii)  the
date  this  Agreement  is  otherwise terminated  for  any  reason
whatsoever.

          "Total   Facility"   has  the  meaning   specified   in
Section 2.1(a).

          "Transition  Agreements" mean those certain "Transition
Documents" as defined in the Form 10.

          "Triggering Event" means the occurrence of any  one  of
the  following events: (a) an Event of Default, (b)  Availability
is  $50,000,000 or less, (c) the average daily Dollar  amount  of
Revolving Loans outstanding for the immediately preceding  thirty
(30)  day period exceeds $15,000,000, or (d) the aggregate Dollar
amount  of  Revolving  Loans  outstanding  on  any  date  exceeds
$25,000,000.

          "UCC"  means  the  Uniform  Commercial  Code  (or   any
successor  statute) of the State of California or  of  any  other
state the laws of which are required by Section 9-103 thereof  to
be applied in connection with the issue of perfection of security
interests.

          "Unfunded  Pension Liability" means  the  excess  of  a
Pension  Plan's benefit liabilities under Section 4001(a)(16)  of
ERISA,  over the current value of that Plan's assets,  determined
in  accordance with the assumptions used for funding the  Pension
Plan  pursuant to Section 412 of the Code for the applicable plan
year  except  for  a Multi-employer Plan it means  the  share  of
unfunded vested benefits allocable to the Borrower and its  ERISA
Affiliates.

          "Unrelated  Person" means any Person other than  (a)  a
Subsidiary of the Parent or (b) an employee stock ownership  plan
or  other  employee benefit plan covering the  employees  of  the
Parent or its Subsidiaries.

          "Unused  Letter  of Credit Facility"  means  an  amount
equal  to $150,000,000 minus the sum of (a) the aggregate undrawn
amount  of  all  outstanding  Letters  of  Credit  plus  (b)  the
aggregate  unpaid reimbursement obligations with respect  to  all
Letters  of  Credit, as such amount may be adjusted  pursuant  to
Section 2.1(b).

          "Unused   Line  Fee"  has  the  meaning  specified   in
Section 3.5.

     1.2   Accounting Terms.  Any accounting term  used  in  this
Agreement  shall  have,  unless otherwise  specifically  provided
herein,  the meaning customarily given in accordance  with  GAAP,
and  all  financial  computations hereunder  shall  be  computed,
unless otherwise specifically provided herein, in accordance with
GAAP  as  consistently  applied and using  the  same  method  for
inventory  valuation as used in the preparation of the  Financial
Statements.

     1.3   Other  Terms.  All other undefined terms contained  in
this  Agreement  shall, unless the context  indicates  otherwise,
have  the meanings provided for by the UCC to the extent the same
are  used  or  defined  therein.   Wherever  appropriate  in  the
context,  terms  used  herein in the singular  also  include  the
plural,  and vice versa, and each masculine, feminine, or  neuter
pronoun shall also include the other genders.

     1.4  Other Interpretive Provisions.

          (a)   The  words  "hereof," "herein,"  "hereunder"  and
similar words refer to this Agreement as a whole and not  to  any
particular provision of this Agreement; and Subsection,  Section,
Schedule  and  Exhibit  references are to this  Agreement  unless
otherwise specified.

          (b)   (i)   The term "documents" includes any  and  all
instruments,  documents,  agreements,  certificates,  indentures,
notices and other writings, however evidenced.

               (ii)  The  term  "including" is not  limiting  and
means "including without limitation."

               (iii)      In the computation of periods  of  time
from  a specified date to a later specified date, the word "from"
means "from and including," the words "to" and "until" each  mean
"to   but  excluding"  and  the  word  "through"  means  "to  and
including."

          (c)   Unless  otherwise expressly provided herein,  (i)
references  to  agreements (including this Agreement)  and  other
contractual instruments shall be deemed to include all subsequent
amendments  and  other modifications thereto,  but  only  to  the
extent such amendments and other modifications are not prohibited
by  the  terms of any Loan Document, and (ii) references  to  any
statute  or  regulation  are  to be construed  as  including  all
statutory  and  regulatory  provisions  consolidating,  amending,
replacing,   supplementing  or  interpreting   the   statute   or
regulation.

          (d)   The  captions and headings of this Agreement  are
for  convenience  of  reference only and  shall  not  affect  the
interpretation of this Agreement.

          (e)   This Agreement and other Loan Documents  may  use
several  different limitations, tests or measurements to regulate
the  same  or similar matters.  All such limitations,  tests  and
measurements  are  cumulative and  shall  each  be  performed  in
accordance with their terms.

          (f)   This  Agreement and the other Loan Documents  are
the  result  of  negotiations among and  have  been  reviewed  by
counsel  to  the  Agent, the L/C Issuer, the Lenders,  each  Loan
Party and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders, the
L/C  Issuer or the Agent merely because of the Agent's,  the  L/C
Issuer's or Lenders' involvement in their preparation.

                            ARTICLE 2

                   LOANS AND LETTERS OF CREDIT

     2.1  Credit Facility.

          (a)   Total Facility.  Subject to all of the terms  and
conditions of this Agreement, the Lenders severally agree to make
available a total credit facility of up to $225,000,000 (as  such
amount   may   be   reduced  from  time  to  time   pursuant   to
Section 2.1(b), the "Total Facility") for the Borrower's use from
time  to  time  during  the term of this  Agreement.   The  Total
Facility  shall  be  comprised of  a  revolving  line  of  credit
consisting of revolving loans and letters of credit, as described
in Sections 2.2 and 2.3.

          (b)  Permanent Reductions.  The Borrower shall have the
right, at any time from time to time, without premium or penalty,
to  permanently  reduce the Total Facility  and  the  Commitments
(each a "Reduction"), and the Commitment of each Lender shall  be
reduced  by its Pro Rata Share of each Reduction, if all  of  the
following conditions are met as to each requested Reduction:

               (i)   The  Borrower shall give the Agent at  least
     five  (5)  days'  prior  written  notice  of  the  requested
     Reduction;

               (ii)  The  aggregate amount of such Reduction  and
     all prior Reductions shall not exceed $25,000,000;

               (iii)      Each requested Reduction must be in  an
     amount  not  less  than $5,000,000 or that  is  an  integral
     multiple of $5,000,000 in excess thereof;

               (iv)  The requested Reduction shall not cause  the
     Availability to be exceeded;

               (v)   The amount of each requested Reduction shall
     be  applied at the option of the Borrower (as designated  to
     the  Agent  in the written notice required under clause  (i)
     above)  to reduce (A) the Maximum Revolver Amount,  (B)  the
     Unused  Letter  of Credit Facility, or (C)  any  combination
     thereof, provided, that, each Reduction in (A) or (B) shall:
     (x)  be  in an amount of $5,000,000 or an integral  multiple
     thereof,  (y) not cause the Maximum Revolver Amount,  if  so
     reduced,  to be less than the sum of the unpaid  balance  of
     all Revolving Loans at such time and the aggregate amount of
     Pending  Loans  at such time; and (z) not cause  the  Unused
     Letter  of  Credit Facility, if so reduced, to be less  than
     the  sum  of the aggregate undrawn amount of all letters  of
     credit  at such time and the aggregate amount of any  unpaid
     reimbursement obligations in respect of Letters of Credit at
     such time.

     2.2  Revolving Loans.

          (a)   Amounts.   Subject  to the  satisfaction  of  the
conditions  precedent  set  forth  in  Article  10,  each  Lender
severally agrees, upon the Borrower's request from time  to  time
on  any  Business Day during the period from the Initial  Funding
Date  to  the  Termination  Date, to make  revolving  loans  (the
"Revolving  Loans")  to the Borrower, in amounts  not  to  exceed
(except  for  BABC with respect to BABC Loans or Agent  Advances)
such  Lender's  Pro Rata Share of the lesser of (i)  the  Maximum
Revolver  Amount and (ii) the Availability.  All of  the  Lenders
acting  in  concert, however, in their discretion, may  elect  to
make Revolving Loans in excess of the Maximum Revolver Amount  or
the  Availability on one or more occasions, but if  they  do  so,
neither the Agent nor the Lenders shall be deemed thereby to have
changed  the  limits  of  the  Maximum  Revolver  Amount  or  the
Availability  or  to be obligated to exceed such  limits  on  any
other  occasion.  If the Aggregate Revolver Outstandings  exceeds
the  Availability (with Availability for this purpose  calculated
as  if  the Aggregate Revolver Outstandings were zero) or if  the
Revolving  Loans exceed the Maximum Revolver Amount, the  Lenders
may  refuse to make or otherwise restrict the making of Revolving
Loans  as  the  Lenders  determine until  such  excess  has  been
eliminated,  subject  to  the  Agent's  authority,  in  its  sole
discretion,  to  make Agent Advances pursuant  to  the  terms  of
Section 2.2(i).

          (b)  Procedure for Borrowing.

               (1)    Each  Borrowing  shall  be  made  upon  the
Borrower's irrevocable written notice delivered to the  Agent  in
the  form of a Notice of Borrowing substantially in the  form  of
Exhibit B (each, a "Notice of Borrowing") (which must be received
by  the  Agent  prior  to  10:00 a.m. (Pacific  time)  (i)  three
Business Days prior to the requested Funding Date, in the case of
LIBOR  Revolving Loans and (ii) no later than 10:00 a.m. (Pacific
time)  on  the requested Funding Date, in the case of  Base  Rate
Revolving Loans, specifying:

                    (A)  the amount of the Borrowing (which shall
     be  in  an amount not less than $2,000,000 or that is in  an
     integral  multiple of $1,000,000 in excess  thereof  in  the
     case of LIBOR Revolving Loans);

                    (B)   the requested Funding Date, which shall
     be a Business Day;

                    (C)   whether  the Revolving Loans  requested
     are  to  be  Base  Rate Revolving Loans or  LIBOR  Revolving
     Loans; and

                    (D)   the duration of the Interest Period  if
     the  requested  Revolving Loans are to  be  LIBOR  Revolving
     Loans.   If  the  Notice of Borrowing fails to  specify  the
     duration  of the Interest Period for any Borrowing comprised
     of  LIBOR Revolving Loans, such Interest Period shall be one
     month;

provided, however, that with respect to the Borrowing to be  made
on the Initial Funding Date, such Borrowings will consist of Base
Rate Revolving Loans only.

               (2)   With  respect to any request for  Base  Rate
Revolving Loans, in lieu of delivering the above-described Notice
of Borrowing the Borrower may give the Agent telephonic notice of
such request by the required time, with such telephonic notice to
be  confirmed  in writing within 24 hours of the giving  of  such
notice  but the Agent shall be entitled to rely on the telephonic
notice in making such Revolving Loans.

          (c)   Reliance  upon Authority.  On  or  prior  to  the
Initial  Funding  Date and thereafter prior to  any  change  with
respect  to  any  of the information contained in  the  following
clauses  (i) and (ii), the Borrower shall deliver to the Agent  a
writing  setting forth (i) the account of the Borrower  to  which
the Agent is authorized to transfer the proceeds of the Revolving
Loans  requested pursuant to this Section 2.2, and (ii) the names
of the persons authorized to request Revolving Loans on behalf of
the  Borrower,  and  shall  provide the  Agent  with  a  specimen
signature  of each such person.  The Agent shall be  entitled  to
rely   conclusively  on  such  officer's  authority  to   request
Revolving Loans on behalf of the Borrower, the proceeds of  which
are  to  be transferred to any of the accounts specified  by  the
Borrower  pursuant to the immediately preceding  sentence,  until
the  Agent  receives written notice to the contrary.   The  Agent
shall  have  no  duty to verify the identity  of  any  individual
representing him or herself as one of the officers authorized  by
the Borrower to make such requests on its behalf.

          (d)   No  Liability.   The Agent shall  not  incur  any
liability  to the Borrower as a result of acting upon any  notice
referred  to in Sections 2.2(b) and (c), which notice  the  Agent
believes  in  good faith to have been given by  an  officer  duly
authorized  by  the Borrower to request Revolving  Loans  on  its
behalf  or  for  otherwise  acting  in  good  faith  under   this
Section 2, and the crediting of Revolving Loans to the Borrower's
deposit  account, or transmittal to such Person as  the  Borrower
shall direct, shall conclusively establish the obligation of  the
Borrower  to  repay  such  Revolving Loans  as  provided  herein.
Notwithstanding any provision in this Agreement to the  contrary,
the  aggregate  amount of all BABC Loans at any time  outstanding
shall not exceed $10,000,000.

          (e)   Notice Irrevocable.  Any Notice of Borrowing  (or
telephonic   notice   in   lieu   thereof)   made   pursuant   to
Section  2.2(b)  shall be irrevocable and the Borrower  shall  be
bound  to  borrow  the  funds  requested  therein  in  accordance
therewith.

          (f)   Agent's  Election.  Promptly after receipt  of  a
Notice  of  Borrowing  (or  telephonic notice  in  lieu  thereof)
pursuant  to  Section  2.2(b), the  Agent  shall  elect,  in  its
discretion, (i) to have the terms of Section 2.2(g) apply to such
requested Borrowing, or (ii) to request BABC to make a BABC  Loan
pursuant  to  the terms of Section 2.2(h) in the  amount  of  the
requested Borrowing; provided, however, that if BABC declines  in
its   sole   discretion  to  make  a  BABC   Loan   pursuant   to
Section  2.2(h), or if the requested borrowing  is  for  a  LIBOR
Revolving  Loan,  the  Agent shall elect to  have  the  terms  of
Section 2.2(g) apply to such requested Borrowing.

          (g)  Making of Revolving Loans.

               (i)   In  the event that the Agent shall elect  to
have  the  terms  of  this Section 2.2(g) apply  to  a  requested
Borrowing  as  described in Section 2.2(f), then  promptly  after
receipt of a Notice of Borrowing or telephonic notice pursuant to
Section  2.2(b), the Agent shall notify the Lenders by  telecopy,
telephone or other similar form of transmission, of the requested
Borrowing.   Each Lender shall make the amount of  such  Lender's
Pro  Rata Share of the requested Borrowing available to the Agent
in  same day funds, to such account of the Agent as the Agent may
designate,  not  later  than 12:00 p.m., (Pacific  time)  on  the
Funding  Date applicable thereto.  After the Agent's  receipt  of
the  proceeds of such Revolving Loans, upon satisfaction  of  the
applicable  conditions precedent set forth  in  Article  10,  the
Agent  shall  use its best efforts to make the proceeds  of  such
Revolving  Loans  available  to the Borrower  on  the  applicable
Funding  Date,  no  later  than  2:00  p.m.  (Pacific  time),  by
transferring  same  day  funds equal  to  the  proceeds  of  such
Revolving  Loans  received by the Agent to  the  account  of  the
Borrower, designated in writing by the Borrower and acceptable to
the  Agent; provided, however, that the amount of Revolving Loans
so  made  on any date shall in no event result in (i) the Maximum
Revolver Amount or (ii) the Availability being exceeded  on  such
date.

               (ii)  Unless  the  Agent receives  notice  from  a
Lender  on or prior to the Initial Funding Date or, with  respect
to  any  Borrowing after the Initial Funding Date, at  least  one
Business  Day  prior  to the date of such  Borrowing,  that  such
Lender will not make available as and when required hereunder  to
the  Agent  for  the account of the Borrower the amount  of  that
Lender's  Pro Rata Share of the Borrowing, the Agent  may  assume
that  each Lender has made such amount available to the Agent  in
immediately available funds on the Funding Date and the Agent may
(but shall not be so required), in reliance upon such assumption,
make  available  to  the Borrower on such  date  a  corresponding
amount.  If and to the extent any Lender shall not have made  its
full amount available to the Agent in immediately available funds
and  the  Agent in such circumstances has made available  to  the
Borrower  such  amount, that Lender shall  on  the  Business  Day
following  such  Funding Date make such amount available  to  the
Agent, together with interest at the Federal Funds Rate for  each
day  during such period.  A notice of the Agent submitted to  any
Lender with respect to amounts owing under this subsection  shall
be  conclusive, absent manifest error.  If such amount is so made
available,  such  payment  to  the Agent  shall  constitute  such
Lender's Revolving Loan on the date of Borrowing for all purposes
of  this Agreement.  If such amount is not made available to  the
Agent  on the Business Day following the Funding Date, the  Agent
will notify the Borrower of such failure to fund and, upon demand
by the Agent, the Borrower shall pay such amount to the Agent for
the  Agent's account, together with interest thereon for each day
elapsed  since  the date of such Borrowing, at a rate  per  annum
equal  to  the  Interest  Rate applicable  at  the  time  to  the
Revolving  Loans comprising such Borrowing.  The failure  of  any
Lender  to make any Revolving Loan on any Funding Date (any  such
Lender,  prior  to  the cure of such failure,  being  hereinafter
referred to as a "Defaulting Lender") shall not relieve any other
Lender  of any obligation hereunder to make a Revolving  Loan  on
such  Funding  Date, but no Lender shall be responsible  for  the
failure of any other Lender to make the Revolving Loan to be made
by such other Lender on any Funding Date.

               (iii)      The  Agent  shall not be  obligated  to
transfer to a Defaulting Lender any payments made by Borrower  to
the  Agent  for  the  Defaulting Lender's benefit;  nor  shall  a
Defaulting  Lender  be entitled to the sharing  of  any  payments
hereunder.  Amounts payable to a Defaulting Lender shall  instead
be  paid to or retained by the Agent.  The Agent may hold and, in
its  discretion,  re-lend to Borrower  the  amount  of  all  such
payments  received  or retained by it for  the  account  of  such
Defaulting Lender.  Any amounts so re-lent to the Borrower  shall
bear  interest at the applicable Interest Rate and for all  other
purposes  of  this Agreement shall be treated  as  if  they  were
Revolving  Loans, provided, however, that for purposes of  voting
or  consenting to matters with respect to the Loan Documents  and
determining  Pro  Rata Shares, such Defaulting  Lender  shall  be
deemed not to be a "Lender" and such Lender's Commitment shall be
deemed  to  be zero (-0-).  Until a Defaulting Lender  cures  its
failure  to  fund  its Pro Rata Share of any Borrowing  (A)  such
Defaulting  Lender shall not be entitled to any  portion  of  the
Unused  Line  Fee,  the  Letter  of  Credit  Fee  or  any   early
termination  fee under Section 4.2 and (B) the Unused  Line  Fee,
the Letter of Credit Fee and any such early termination fee shall
accrue in favor of the Lenders which have funded their respective
Pro  Rata  Shares of such requested Borrowing, shall be allocated
among  such performing Lenders ratably based upon their  relative
Commitments,  and  shall  be calculated based  upon  the  average
amount  by  which  the aggregate Commitments of  such  performing
Lenders  exceeds the sum of outstanding Revolving Loans  and  the
undrawn  face amount of all outstanding Letters of Credit.   This
section  shall  remain effective with respect to such  Defaulting
Lender  until such time as the Defaulting Lender shall no  longer
be  in  default  of any of its obligations under this  Agreement.
The  terms of this Section shall not be construed to increase  or
otherwise  affect  the Commitment of any Lender,  or  relieve  or
excuse  the performance by Borrower of its duties and obligations
hereunder.

          (h)  Making of BABC Loans.

               (i)   In the event the Agent shall elect, with the
consent  of BABC, to have the terms of this Section 2.2(h)  apply
to  a  requested Borrowing as described in Section  2.2(f),  BABC
shall make a Revolving Loan in the amount of such Borrowing  (any
such  Revolving  Loan  made  solely  by  BABC  pursuant  to  this
Section  2.2(h)  being  referred to as a  "BABC  Loan"  and  such
Revolving  Loans being referred to collectively as "BABC  Loans")
available to the Borrower on the Funding Date applicable  thereto
by  transferring  same day funds to an account of  the  Borrower,
designated  in  writing  by the Borrower and  acceptable  to  the
Agent.  Each BABC Loan is a Revolving Loan hereunder and shall be
subject  to  all  the  terms and conditions applicable  to  other
Revolving Loans except that all payments thereon shall be payable
to  BABC solely for its own account (and for the account  of  the
holder  of  any  participation  interest  with  respect  to  such
Revolving  Loan).  The Agent shall not request BABC to  make  any
BABC  Loan  if  (i) the Agent shall have received written  notice
from  any Lender, or otherwise has actual knowledge, that one  or
more  of  the  applicable  conditions  precedent  set  forth   in
Article  10  will not be satisfied on the requested Funding  Date
for  the  applicable  Borrowing, or (ii) the requested  Borrowing
would  result  in  (A) the Maximum Revolver  Amount  or  (B)  the
Availability being exceeded on such Funding Date.  BABC shall not
otherwise   be  required  to  determine  whether  the  applicable
conditions precedent set forth in Article 10 have been  satisfied
or  the requested Borrowing would exceed the Availability of  the
Borrower on the Funding Date applicable thereto prior to  making,
in its sole discretion, any BABC Loan.

               (ii)  The BABC Loans shall be repayable on  demand
and  secured by the Collateral, shall constitute Revolving  Loans
and  Obligations hereunder, and shall bear interest at  the  rate
applicable  to the Revolving Loans from time to time  (including,
without  limitation,  the  Interest Rate  increase  specified  in
clause  (A) of the proviso to Section 3.1(a) as to any BABC  Loan
made under the circumstances described in such clause).

          (i)  Agent Advances.

               (i)   Subject to the limitations set forth in  the
provisos  contained in this Section 2.2(i), the Agent  is  hereby
authorized by the Borrower and the Lenders, from time to time  in
the  Agent's  sole  discretion, (1) after  the  occurrence  of  a
Default  or an Event of Default, or (2) at any time that  any  of
the other applicable conditions precedent set forth in Article 10
have  not been satisfied, to make Revolving Loans to the Borrower
on  behalf  of  the  Lenders which the Agent, in  its  reasonable
business  judgment, deems necessary or desirable (A) to  preserve
or protect the Collateral, or any portion thereof, (B) to enhance
the  likelihood of, or maximize the amount of, repayment  of  the
Revolving  Loans and other Obligations, or (C) to pay  any  other
amount  chargeable to the Borrower pursuant to the terms of  this
Agreement,  including,  without  limitation,  costs,   fees   and
expenses  as  described  in Section 15.7  (any  of  the  advances
described in this Section 2.2(i) being hereinafter referred to as
"Agent Advances"); provided, that the Required Lenders may at any
time   revoke  the  Agent's  authorization  contained   in   this
Section 2.2(i) to make Agent Advances, any such revocation to  be
in writing and to become effective prospectively upon the Agent's
receipt  thereof; provided, further, that Agent Advances made  in
excess  of the Availability or the Maximum Revolver Amount  shall
be  made  to  preserve or protect the Collateral  and  shall  not
exceed  $5,000,000 in the aggregate outstanding at  any  time  or
result in the Total Facility being exceeded.

               (ii)  The  Agent  Advances shall be  repayable  on
demand  and secured by the Collateral, shall constitute Revolving
Loans  and Obligations hereunder, and shall bear interest at  the
rate  applicable to the Revolving Loans from time to  time.   The
Agent  shall  notify each Lender in writing of  each  such  Agent
Advance.

          (j)   Settlement.   It  is agreed  that  each  Lender's
funded  portion of the Revolving Loan is intended by the  Lenders
to  be equal at all times to such Lender's Pro Rata Share of  the
outstanding Revolving Loans.  Notwithstanding such agreement, the
Agent,  BABC, and the other Lenders agree (which agreement  shall
not be for the benefit of or enforceable by the Borrower) that in
order to facilitate the administration of this Agreement and  the
other  Loan Documents, settlement among them as to the  Revolving
Loans, the BABC Loans and the Agent Advances shall take place  on
a periodic basis in accordance with the following provisions:

               (i)     The   Agent   shall   request   settlement
("Settlement") with the Lenders on a weekly basis, or on  a  more
frequent  basis if so determined by the Agent, (1) on  behalf  of
BABC, with respect to each outstanding BABC Loan, (2) for itself,
with  respect  to  each Agent Advance, and (3)  with  respect  to
collections received, in each case, by notifying the  Lenders  of
such requested Settlement by telecopy, telephone or other similar
form of transmission, of such requested Settlement, no later than
10:00   a.m.  (Pacific  time)  on  the  date  of  such  requested
Settlement  (the  "Settlement Date").  Each  Lender  (other  than
BABC,  in the case of BABC Loans) shall make the amount  of  such
Lender's  Pro Rata Share of the outstanding principal  amount  of
the   BABC  Loans  and  Agent  Advances  with  respect  to  which
Settlement is requested available to the Agent, for itself or for
the  account of BABC, in same day funds, to such account  of  the
Agent  as  the  Agent  may designate, not later  than  1:00  p.m.
(Pacific  time),  on  the  Settlement  Date  applicable  thereto,
regardless  of  whether the applicable conditions  precedent  set
forth in Article 10 have then been satisfied.  Such amounts  made
available  to the Agent shall be applied against the  amounts  of
the  applicable BABC Loan or Agent Advance and, together with the
portion  of  such BABC Loan or Agent Advance representing  BABC's
Pro  Rata Share thereof, shall constitute Revolving Loans of such
Lenders.   If any such amount is not made available to the  Agent
by  any  Lender  on the Settlement Date applicable  thereto,  the
Agent  shall  be entitled to recover such amount on  demand  from
such  Lender together with interest thereon at the Federal  Funds
Rate  for  the first three (3) days from and after the Settlement
Date  and thereafter at the Interest Rate then applicable to  the
Revolving Loans.

               (ii)  Notwithstanding the foregoing, not more than
one  (1)  Business Day after demand is made by the Agent (whether
before  or  after  the occurrence of a Default  or  an  Event  of
Default  and  regardless of whether the  Agent  has  requested  a
Settlement  with respect to a BABC Loan or Agent  Advance),  each
other  Lender shall irrevocably and unconditionally purchase  and
receive  from BABC or the Agent, as applicable, without  recourse
or warranty, an undivided interest and participation in such BABC
Loan  or  Agent Advance to the extent of such Lender's  Pro  Rata
Share  thereof  by  paying to the Agent, in same  day  funds,  an
amount equal to such Lender's Pro Rata Share of such BABC Loan or
Agent  Advance.  If such amount is not in fact made available  to
the  Agent by any Lender, the Agent shall be entitled to  recover
such  amount  on demand from such Lender together  with  interest
thereon  at the Federal Funds Rate for the first three  (3)  days
from  and  after such demand and thereafter at the Interest  Rate
then applicable to the Revolving Loans.

               (iii)      From  and after the date,  if  any,  on
which   any   Lender   purchases  an   undivided   interest   and
participation  in  any  BABC Loan or Agent  Advance  pursuant  to
subsection  (ii)  above, the Agent shall promptly  distribute  to
such  Lender  at  such  address as such  Lender  may  request  in
writing,  such  Lender's  Pro  Rata  Share  of  all  payments  of
principal and interest and all proceeds of Collateral received by
the Agent in respect of such BABC Loan or Agent Advance.

               (iv)  Between Settlement Dates, the Agent, to  the
extent  no Agent Advances or BABC Loans are outstanding, may  pay
over  to  BABC  any  payments received by  the  Agent,  which  in
accordance  with the terms of this Agreement would be applied  to
the  reduction of the Revolving Loans, for application to  BABC's
Pro  Rata Share of the Revolving Loans.  If, as of any Settlement
Date,  collections received since the then immediately  preceding
Settlement Date have been applied to BABC's Pro Rata Share of the
Revolving  Loans other than to BABC Loans or Agent  Advances,  as
provided  for  in the previous sentence, BABC shall  pay  to  the
Agent  for  the  accounts of the Lenders, to be  applied  to  the
outstanding Revolving Loans of such Lenders, an amount such  that
each  Lender shall, upon receipt of such amount, have, as of such
Settlement  Date,  its  Pro Rata Share of  the  Revolving  Loans.
During the period between Settlement Dates, BABC with respect  to
BABC  Loans, the Agent with respect to Agent Advances,  and  each
Lender with respect to the Revolving Loans other than BABC  Loans
and  Agent  Advances,  shall  be  entitled  to  interest  at  the
applicable  rate  or rates payable under this  Agreement  on  the
actual average daily amount of funds employed by BABC, the  Agent
and the other Lenders.

          (k)  Notation.  The Agent shall record on its books the
principal  amount of the Revolving Loans owing  to  each  Lender,
including  the  BABC Loans owing to BABC, and the Agent  Advances
owing  to the Agent, from time to time.  In addition, each Lender
is  authorized,  at such Lender's option, to note  the  date  and
amount  of  each  payment  or prepayment  of  principal  of  such
Lender's  Revolving  Loans in its books  and  records,  including
computer  records, such books and records constituting rebuttably
presumptive  evidence, absent manifest error, of the accuracy  of
the information contained therein.

          (l)   Lenders' Failure to Perform.  All Revolving Loans
(other  than BABC Loans and Agent Advances) shall be made by  the
Lenders  simultaneously and in accordance  with  their  Pro  Rata
Shares.  It is understood that (a) no Lender shall be responsible
for any failure by any other Lender to perform its obligation  to
make  any Revolving Loans hereunder, nor shall any Commitment  of
any  Lender be increased or decreased as a result of any  failure
by  any  other  Lender  to  perform its obligation  to  make  any
Revolving  Loans  hereunder, (b) no  failure  by  any  Lender  to
perform  its  obligation  to make any Revolving  Loans  hereunder
shall  excuse any other Lender from its obligation  to  make  any
Revolving Loans hereunder, and (c) the obligations of each Lender
hereunder shall be several, not joint and several.

     2.3  Letters of Credit.

          (a)   Agreement  to Issue.  Subject to  the  terms  and
conditions of this Agreement and such other documents as  may  be
required  under  Section  2.3(c)(1), and  in  reliance  upon  the
representations and warranties of the Borrower herein set  forth,
the  L/C  Issuer  agrees  to  issue  one  or  more  stand-by   or
documentary  letters  of credit (each such letter  of  credit,  a
"Letter of Credit" and such letters of credit, collectively,  the
"Letters  of  Credit") in accordance with this Section  2.3  from
time  to time during the term of this Agreement.  Notwithstanding
anything  in this Agreement to the contrary, only the L/C  Issuer
has any obligation to issue Letters of Credit.

          (b)   Amounts; Outside Expiration Date.  The L/C Issuer
shall  not  have any obligation to issue any Letter of Credit  at
any  time:  (1)  if the maximum undrawn amount of  the  requested
Letter  of  Credit  is greater than the Unused Letter  of  Credit
Facility at such time; (2) if the maximum undrawn amount  of  the
requested Letter of Credit and all commissions, fees, and charges
due  from  the  Borrower in connection with the  opening  thereof
exceed  the  Availability at such time; or (3) if the  expiration
date  of  the requested Letter of Credit is later than  five  (5)
days   prior  to  the  Stated  Termination  Date  or  more   than
twelve (12) months from the date of issuance.

          (c)   Other  Conditions.   The obligation  of  the  L/C
Issuer  to issue any Letter of Credit is subject to the following
conditions   precedent  having  been  satisfied   in   a   manner
satisfactory to the Agent and the L/C Issuer:

               (1)  The satisfaction of the applicable conditions
precedent contained in Article 10;

               (2)   The Borrower shall have delivered to the L/C
Issuer,  at  such times and in such manner as the L/C Issuer  may
prescribe,  an application in form and substance satisfactory  to
the  L/C  Issuer and the Agent for the issuance of the Letter  of
Credit  and  such other documents as may be required pursuant  to
the terms thereof (including reimbursement documentation) and the
form  and  terms of the proposed Letter of Credit and such  other
documentation  shall be satisfactory to the  Agent  and  the  L/C
Issuer; and

               (3)   As of the date of issuance, no order of  any
court, arbitrator or Governmental Authority shall purport by  its
terms  to enjoin or restrain the L/C Issuer from issuing  letters
of credit of the type and in the amount of the proposed Letter of
Credit,  and  no law, rule or regulation applicable  to  the  L/C
Issuer  and  no request or directive (whether or not  having  the
force  of  law) from any Governmental Authority with jurisdiction
over  the  L/C  Issuer shall prohibit, or request  that  the  L/C
Issuer  refrain from, the issuance of letters of credit generally
or the issuance of such Letters of Credit.

In  the event of any conflict between the terms and provisions of
this  Agreement and any other agreement relating to the  issuance
of  Letters of Credit, the terms and provisions of this Agreement
shall control.

          (d)  Issuance of Letters of Credit.

               (1)   Request  for Issuance.  The  Borrower  shall
give  each of the Agent and the L/C Issuer two (2) Business Days'
prior  written notice of the Borrower's request for the  issuance
of  a  Letter  of  Credit.  Such notice shall be irrevocable  and
shall  specify the original face amount of the Letter  of  Credit
requested,  the effective date (which date shall  be  a  Business
Day) of issuance of such requested Letter of Credit, whether such
Letter  of  Credit may be drawn in a single or in partial  draws,
the  date  on which such requested Letter of Credit is to  expire
(which date shall be a Business Day), the purpose for which  such
Letter  of  Credit  is to be issued, and the beneficiary  of  the
requested  Letter of Credit.  The Borrower shall attach  to  such
notice  the  proposed form of the Letter of Credit that  the  L/C
Issuer is requested to issue.

               (2)  Responsibilities of the Agent; Issuance.  The
Agent  shall  determine  (such  determination  being  subject  to
verification   by  the  L/C  Issuer)  as  of  the  Business   Day
immediately preceding the requested effective date of issuance of
the  Letter  of Credit set forth in the notice from the  Borrower
pursuant  to Section 2.3(d)(1), (i) the amount of the  applicable
Unused Letter of Credit Facility and (ii) the Availability of the
Borrower  as  of  such date.  If (i) the undrawn  amount  of  the
requested  Letter  of Credit is not greater than  the  applicable
Unused  Letter of Credit Facility and (ii) the issuance  of  such
requested Letter of Credit and all commissions, fees, and charges
due  from  the  Borrower in connection with the  opening  thereof
would  not  exceed  the Availability of the Borrower,  the  Agent
shall  notify  the  L/C  Issuer to such effect  and,  subject  to
satisfaction  of all other conditions for issuance  thereof,  the
L/C  Issuer  shall issue the requested Letter of Credit  on  such
requested effective date of issuance.

               (3)   Notice  of  Issuance.   Promptly  after  the
issuance  of  any  Letter of Credit by the L/C  Issuer,  the  L/C
Issuer  shall  give notice to the Agent of the issuance  of  such
Letter of Credit and the Agent shall in turn give such notice  to
the Lenders.

               (4)   No  Extensions or Amendment.  The L/C Issuer
shall  not be obligated to extend or amend any outstanding Letter
of  Credit unless the requirements of this Section 2.3(d) are met
as though a new Letter of Credit were being requested and issued.
With  respect  to  any  Letter  of  Credit  which  contains   any
"evergreen" or automatic renewal provision, each Lender shall  be
deemed  to have consented to any such extension or renewal unless
any  such  Lender shall have provided to the Agent  and  the  L/C
Issuer, not less than 30 days prior to the last date on which the
L/C  Issuer  can  in accordance with the terms of the  applicable
Letter  of  Credit  decline to extend or  renew  such  Letter  of
Credit,  written notice that it declines to consent to  any  such
extension  or  renewal, provided, that if all of the requirements
of  this  Section 2.3 are met and no Default or Event of  Default
exists,  no Lender shall decline to consent to any such extension
or renewal.

          (e)  Payments Pursuant to Letters of Credit.

               (1)  Payment of Letter of Credit Obligations.  The
Borrower  agrees to reimburse the L/C Issuer for any  draw  under
any  Letter of Credit immediately upon demand, and to pay the L/C
Issuer  the  amount  of all other obligations and  other  amounts
payable to the L/C Issuer under or in connection with any  Letter
of  Credit  immediately  when  due, irrespective  of  any  claim,
setoff, defense or other right which the Borrower may have at any
time against the L/C Issuer or any other Person.

               (2)   Revolving  Loans  to  Satisfy  Reimbursement
Obligations.   In  the event that the L/C Issuer  honors  a  draw
under  such  Letter  of Credit and the Borrower  shall  not  have
repaid   such   amount   to   the   L/C   Issuer   pursuant    to
Section 2.3(e)(1), the Agent shall, upon receiving notice of such
failure,  notify  each Lender of such failure,  and  each  Lender
shall  unconditionally pay to the Agent, for the account of  such
L/C Issuer, as and when provided hereinbelow, an amount equal  to
such  Lender's  Pro Rata Share of the amount of such  payment  in
Dollars  and  in  same day funds.  If the Agent so  notifies  the
Lenders  prior to 11:00 a.m. (Pacific time) on any Business  Day,
each  Lender shall make available to the Agent the amount of such
payment,  as  provided in the immediately preceding sentence,  on
such Business Day.  Such amounts paid by the Lenders to the Agent
shall  constitute Revolving Loans which shall be deemed  to  have
been  requested by the Borrower pursuant to Section  2.2  as  set
forth  in  Section  4.4 and to have satisfied  the  reimbursement
obligations  relating to the draw under such  Letter  of  Credit,
notwithstanding any failure of conditions precedent to the making
of Revolving Loans, including Availability.

          (f)  Participations.

               (1)  Purchase of Participations.  Immediately upon
issuance   of   any   Letter  of  Credit   in   accordance   with
Section  2.3(d), each Lender shall be deemed to have  irrevocably
and  unconditionally purchased and received without  recourse  or
warranty, an undivided interest and participation in such  Letter
of  Credit,  equal to such Lender's Pro Rata Share  of  the  face
amount  of  such Letter of Credit (including, without limitation,
all  obligations  of the Borrower with respect thereto,  and  any
security therefor or guaranty pertaining thereto).

               (2)  Sharing of Reimbursement Obligation Payments.
Whenever  the  Agent  receives a payment  from  the  Borrower  on
account  of reimbursement obligations in respect of a  Letter  of
Credit  as  to  which the Agent has previously received  for  the
account  of the issuer thereof payment from a Lender pursuant  to
Section  2.3(e)(2), the Agent shall promptly pay to  such  Lender
such Lender's Pro Rata Share of such payment from the Borrower in
Dollars.   Each such payment shall be made by the  Agent  on  the
Business  Day  on which the Agent receives immediately  available
funds  paid to such Person pursuant to the immediately  preceding
sentence, if received prior to 10:00 a.m. (Pacific time) on  such
Business Day and otherwise on the next succeeding Business Day.

               (3)   Documentation.   Upon  the  request  of  any
Lender,  the  Agent shall furnish to such Lender  copies  of  any
Letter of Credit, reimbursement agreements executed in connection
therewith,  application  for  any Letter  of  Credit  and  credit
support  or  enhancement provided through the Agent in connection
with  the  issuance  of  any Letter of  Credit,  and  such  other
documentation as may reasonably be requested by such Lender.

               (4)  Obligations Irrevocable.  The obligations  of
each  Lender  to make payments to the Agent with respect  to  any
Letter  of  Credit  or  with respect to  any  credit  support  or
enhancement provided through the Agent with respect to  a  Letter
of  Credit, and the obligations of the Borrower to make  payments
to  the  L/C  Issuer  or to the Agent, for  the  account  of  the
Lenders,  shall be irrevocable, not subject to any  qualification
or  exception whatsoever, including, without limitation,  any  of
the following circumstances:

                    (i)   any  lack of validity or enforceability
of this Agreement or any of the other Loan Documents;

                    (ii)  the  existence  of any  claim,  setoff,
defense  or other right which the Borrower may have at  any  time
against  a  beneficiary  named in  a  Letter  of  Credit  or  any
transferee  of any Letter of Credit (or any Person for  whom  any
such  transferee may be acting), any Lender, the Agent,  the  L/C
Issuer,  or  any  other Person, whether in connection  with  this
Agreement,  any  Letter of Credit, the transactions  contemplated
herein  or  any unrelated transactions (including any  underlying
transactions  between the Borrower or any other  Person  and  the
beneficiary named in any Letter of Credit);

                    (iii)     any draft, certificate or any other
document  presented  under the Letter of  Credit  proving  to  be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

                    (iv)  the  surrender  or  impairment  of  any
security for the performance or observance of any of the terms of
any of the Loan Documents; or

                    (v)   the occurrence of any Default or  Event
of Default.

          (g)   Recovery or Avoidance of Payments.  In the  event
any  payment by or on behalf of the Borrower received by the  L/C
Issuer or the Agent with respect to any Letter of Credit (or  any
guaranty  by  the  Borrower or reimbursement  obligation  of  the
Borrower  relating thereto) and distributed by the Agent  to  the
Lenders on account of their respective participations therein, is
thereafter set aside, avoided or recovered from the L/C Issuer or
the  Agent  in  connection with any receivership, liquidation  or
bankruptcy proceeding, the Lenders shall, upon demand by the  L/C
Issuer or the Agent, pay to the Agent for the account of the  L/C
Issuer  or the Lenders, as the case may be, their respective  Pro
Rata  Shares  of  such  amount set aside, avoided  or  recovered,
together with interest at the rate required to be paid by the L/C
Issuer or the Agent upon the amount required to be repaid by it.

          (h)  Compensation for Letters of Credit.

               (1)  Letter of Credit Fee.  The Borrower agrees to
pay  to the Agent with respect to each Letter of Credit, for  the
account of the Lenders, the Letter of Credit Fee specified in and
in accordance with the terms of, Section 3.6.

               (2)   Issuer Fees and Charges.  The Borrower shall
pay  monthly  in arrears on the last Business Day of  the  month,
from the date of the issuance of any Letter of Credit, to the L/C
Issuer  or to the Agent solely for the account of the L/C Issuer,
a  fronting fee in the amount of one-eighth percent (0.125%)  per
annum  of  the face amount of such Letter of Credit (so  long  as
NationsBank is the L/C Issuer, and such other percentage  as  may
be agreed to between the Borrower and any subsequent L/C Issuer),
taking into account increases and reductions as specified in such
Letter  of Credit, and other charges as are charged by  such  L/C
Issuer  for  letters  of credit issued by it, including,  without
limitation,   its  standard  fees  for  issuing,   administering,
amending,  renewing, paying and canceling letters of  credit  and
all  other  fees associated with issuing or servicing letters  of
credit, as and when assessed.

          (i)  Indemnification; Exoneration; Power of Attorney.

               (1)   Indemnification.   In  addition  to  amounts
payable  as elsewhere provided in this Section 2.3, the  Borrower
hereby agrees to protect, indemnify, pay and save the L/C Issuer,
the  Lenders and the Agent harmless from and against any and  all
claims, demands, liabilities, damages, losses, costs, charges and
expenses  (including reasonable attorneys' fees)  which  the  L/C
Issuer or any Lender or the Agent may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of
Credit  or the provision of any credit support or enhancement  in
connection therewith.  The Lenders shall indemnify the L/C Issuer
upon demand (to the extent not reimbursed by or on behalf of  the
Borrower  and without limiting the obligation of the Borrower  to
do  so),  pro  rata, from and against all such  claims,  demands,
liabilities,  damages, losses, costs, charges and expenses  which
the  L/C  Issuer may incur or be subject to as described  in  the
preceding  sentence.   The agreement in  this  Section  2.3(i)(1)
shall survive payments of all Obligations.

               (2)  Assumption of Risk by the Borrower.  As among
the  Borrower,  the L/C Issuer, the Lenders, and the  Agent,  the
Borrower  assumes  all  risks of the acts and  omissions  of,  or
misuse  of  any  of  the  Letters of Credit  by,  the  respective
beneficiaries of such Letters of Credit.  In furtherance and  not
in  limitation of the foregoing, the L/C Issuer, the Lenders  and
the  Agent shall not be responsible for:  (A) the form, validity,
sufficiency,  accuracy,  genuineness  or  legal  effect  of   any
document   submitted  by  any  Person  in  connection  with   the
application  for and issuance of and presentation of drafts  with
respect to any of the Letters of Credit, even if it should  prove
to  be  in any or all respects invalid, insufficient, inaccurate,
fraudulent  or  forged; (B) the validity or  sufficiency  of  any
instrument transferring or assigning or purporting to transfer or
assign  any Letter of Credit or the rights or benefits thereunder
or  proceeds thereof, in whole or in part, which may prove to  be
invalid  or  ineffective for any reason; (C) the failure  of  the
beneficiary  of  any  Letter  of  Credit  to  comply  duly   with
conditions required in order to draw upon such Letter of  Credit;
(D)  errors,  omissions, interruptions, or delays in transmission
or  delivery of any messages, by mail, cable, telegraph, telex or
otherwise,  whether  or  not they be in  cipher;  (E)  errors  in
interpretation of technical terms; (F) any loss or delay  in  the
transmission or otherwise of any document required in order  make
a  drawing under any Letter of Credit or of the proceeds thereof;
(G) the misapplication by the beneficiary of any Letter of Credit
of  the  proceeds of any drawing under such Letter of Credit;  or
(H)  any  consequences arising from causes beyond the control  of
the  L/C  Issuer,  the Lenders or the Agent,  including,  without
limitation, any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto Governmental Authority.
None of the foregoing shall affect, impair or prevent the vesting
of  any  rights  or powers of the L/C Issuer, the  Agent  or  any
Lender under this Section 2.3(i).

               (3)   Exoneration.  In furtherance and  extension,
and  not  in  limitation, of the specific  provisions  set  forth
above,  any action taken or omitted by the L/C Issuer, the  Agent
or  any Lender under or in connection with any of the Letters  of
Credit  or any related certificates, if taken or omitted  in  the
absence of gross negligence or willful misconduct, shall not  put
the  L/C  Issuer,  the  Agent or any Lender under  any  resulting
liability to the Borrower or relieve the Borrower of any  of  its
obligations hereunder to any such Person.

               (4)    Account   Party.    The   Borrower   hereby
authorizes and directs the L/C Issuer to name the Borrower as the
"Account  Party"  therein  and  to  deliver  to  the  Agent   all
instruments,  documents and other writings and property  received
by the L/C Issuer pursuant to the Letter of Credit, and to accept
and  rely  upon  the  Agent's instructions  and  agreements  with
respect  to all matters arising in connection with the Letter  of
Credit or the application therefor.

               (5)    Nonwaiver.    Notwithstanding   any   other
provision  of this Section 2.3, the Borrower does not  waive  any
claim it may have against the L/C Issuer as a result of the gross
negligence or willful misconduct of the L/C Issuer in honoring  a
draw  under a Letter of Credit if the draw does not substantially
comply with the terms of the Letter of Credit.

          (j)  Supporting Letter of Credit; Cash Collateral.  If,
notwithstanding   the   provisions   of   Section   2.3(b)    and
Section  12.1,  any  Letter of Credit  is  outstanding  upon  the
termination  of  this Agreement, then upon such  termination  the
Borrower shall deposit with the Agent, for the ratable benefit of
the   Lenders,  with  respect  to  each  Letter  of  Credit  then
outstanding,  as the Majority Lenders, in their discretion  shall
specify,  either  (A) a standby letter of credit  (a  "Supporting
Letter  of  Credit")  in form and substance satisfactory  to  the
Agent, issued by an issuer satisfactory to the Agent in an amount
equal to the greatest amount for which such Letter of Credit  may
be  drawn, under which Supporting Letter of Credit the  Agent  is
entitled to draw amounts necessary to reimburse the Agent and the
Lenders for payments made by the Agent and the Lenders under such
Letter  of  Credit  or  under any credit support  or  enhancement
provided through the Agent with respect thereto, or (B)  cash  in
amounts  necessary  to reimburse the Agent and  the  Lenders  for
payments  made by the Agent or the Lenders under such  Letter  of
Credit  or  under  any  credit support  or  enhancement  provided
through  the Agent with respect thereto.  Such Supporting  Letter
of  Credit or deposit of cash shall be held by the Agent, for the
ratable  benefit of the Lenders, as security for, and to  provide
for  the payment of, the aggregate undrawn amount of such Letters
of  Credit  remaining  outstanding.  In the  event  an  Event  of
Default  occurs  and is continuing, the Borrower agrees  to  cash
collateralize  outstanding letters of  credit  ("Designated  Cash
Collateral") by means of making Revolving Loans or otherwise  but
the  Lenders are under no obligation to make Revolving  Loans  in
excess of the Maximum Revolver Amount or the Availability.

          (k)   Replacement of L/C Issuer.  If the credit  rating
of  the  L/C Issuer falls below A2 as rated by Moody's  Investors
Services, Inc., then the Borrower may as its option at  any  time
thereafter  replace the then current L/C Issuer (the  "Prior  L/C
Issuer")  with  a new L/C Issuer (the "Replacement  L/C  Issuer")
reasonably satisfactory to the Agent.  From and after the time of
the  appointment of the Replacement L/C Issuer,  all  Letters  of
Credit  will  be  issued by the Replacement L/C Issuer.   At  the
Borrower's  option and subject to any necessary  consent  of  the
beneficiaries, previously issued Letters of Credit  will  be  re-
issued  by  the Replacement L/C Issuer on a case by  case  basis.
Each of the Prior L/C Issuer and the Replacement L/C Issuer shall
have  all of the rights of the L/C issuer hereunder with  respect
to the respective Letters of Credit issued by it.

     2.4  Automated Clearing House Transfers and Overdrafts.  The
Borrower  may request and the Agent may, in its sole and absolute
discretion,  arrange  for the Borrower to  obtain  from  Bank  of
America  ACH Transactions.  The Borrower agrees to indemnify  and
hold  the  Agent  and  the  Lenders  harmless  from  all  losses,
liabilities, costs, expenses and claims incurred by the Agent and
Lenders  arising  from or related to such ACH Transactions.   The
Borrower  acknowledges  and  agrees that  the  obtaining  of  ACH
Transactions from Bank of America (a) is in the sole and absolute
discretion  of Bank of America, (b) is subject to all  rules  and
regulations of Bank of America, and (c) is due to Bank of America
relying on the indemnity of the Agent and the Lenders to Bank  of
America with respect to all risks of loss associated with the ACH
Transactions.

     2.5   Purpose  The proceeds of all Revolving Loans shall  be
utilized  by the Borrower solely for the purposes of meeting  the
Borrower's  ongoing  working  capital  needs,  and  for   general
business  purposes (including, but not limited to, the making  of
Capital Expenditures permitted under Section 9.21).

                            ARTICLE 3

                        INTEREST AND FEES

     3.1 Interest.

          (a)  Interest Rates.  All outstanding Obligations shall
bear  interest on the unpaid principal amount thereof (including,
to the extent permitted by law, on interest thereon not paid when
due)  from  the date made until paid in full in cash  at  a  rate
determined  by reference to the Base Rate or the LIBOR  Rate  and
clauses   (i)   or   (ii)  of  the  fourth   sentence   of   this
Section 3.1(a), as applicable, but not to exceed the Maximum Rate
described   in  Section  3.3.   Subject  to  the  provisions   of
Section 3.2, any of the Revolving Loans may be converted into, or
continued as, Base Rate Revolving Loans or LIBOR Revolving  Loans
in  the manner provided in Section 3.2.  If at any time Revolving
Loans  are outstanding with respect to which notice has not  been
delivered  to  the  Agent in accordance with the  terms  of  this
Agreement specifying the basis for determining the interest  rate
applicable thereto, then those Revolving Loans shall be Base Rate
Revolving  Loans and shall bear interest at a rate determined  by
reference to the Base Rate until notice to the contrary has  been
given  to  the Agent in accordance with this Agreement  and  such
notice  has  become  effective.   Except  as  otherwise  provided
herein,  the  outstanding  Obligations  shall  bear  interest  as
follows:   (i)  for  all  Base  Rate Revolving  Loans  and  other
Obligations  (other than LIBOR Revolving Loans) at a  fluctuating
per annum rate equal to the Base Rate plus the Applicable Margin,
and  (ii) for all LIBOR Revolving Loans at a per annum rate equal
to  the LIBOR Rate plus the Applicable Margin; provided, however,
that

               (A)  In the event that that the sum of outstanding
Letters   of  Credit  and  outstanding  Revolving  Loans  exceeds
$150,000,000, the amount by which the Revolving Loans, when added
to  the outstanding Letters of Credit, exceeds $150,000,000 shall
bear  interest at the Interest Rate otherwise applicable to  such
Revolving Loans plus one-quarter of one percent (0.25%); and

               (B)   In  the event that the Adjusted Net Earnings
for   the  fiscal  year  ending  on  December  31,  1997  exceeds
$53,000,000  and  no  Event  of  Default  has  occurred  and   is
continuing,  the  Interest  Rate on  all  Revolving  Loans  shall
decrease  by one-quarter of one percent (0.25%) from the Interest
Rate otherwise applicable to such Revolving Loans effective as of
the  first day of the month following receipt by the Agent of the
certified  audited financial statements reflecting such  Adjusted
Net  Earnings (except that if such decrease was not made  because
of  an  Event  of  Default,  then upon the  curing  thereof,  and
provided  that the other requirements of this clause  (B)  remain
satisfied, the decrease shall be made effective as of  the  first
day  of  the month following the curing of the Event of Default);
and

               (C)   In  the event that the Adjusted Net Earnings
for  the  fiscal year ending on December 31, 1997  is  less  than
$44,000,000,  the  Interest  Rate on all  Revolving  Loans  shall
increase  by one-quarter of one percent (0.25%) from the Interest
Rate otherwise applicable to such Revolving Loans effective as of
the  first  day  of the month following receipt of the  certified
audited   financial  statements  reflecting  such  Adjusted   Net
Earnings.

Each  change in the Base Rate shall be reflected in the  interest
rate  described in clause (i) above as of the effective  date  of
such change.  All interest charges shall be computed on the basis
of  a year of 360 days and actual days elapsed (which results  in
more  interest being paid than if computed on the basis of a 365-
day  year).   Interest  accrued on all Revolving  Loans  will  be
payable in arrears on the first day of each month hereafter.

          (b)   Default Rate.  If any Default or Event of Default
occurs  and  is  continuing  and the Majority  Lenders  in  their
discretion  so elect, then, while any such Default  or  Event  of
Default  is  outstanding,  all  of  the  Obligations  shall  bear
interest at the Default Rate applicable thereto.

     3.2  Conversion and Continuation Elections.

          (a)   The Borrower may, upon irrevocable written notice
to the Agent in accordance with Section 3.2(b):

               (i)  elect, as of any Business Day, in the case of
Base Rate Revolving Loans to convert any such Revolving Loans (or
any  part thereof in an amount not less than $2,000,000, or  that
is  in an integral multiple of $1,000,000 in excess thereof) into
LIBOR Revolving Loans; or

               (ii)  elect, as of the last day of the  applicable
Interest  Period,  to continue any LIBOR Revolving  Loans  having
Interest Periods expiring on such day (or any part thereof in  an
amount  not  less  than $2,000,000, or that  is  in  an  integral
multiple of $1,000,000 in excess thereof);

provided,  that  if  at any time the aggregate  amount  of  LIBOR
Revolving  Loans  in  respect of any  Borrowing  is  reduced,  by
payment,  prepayment, or conversion of part thereof  to  be  less
than  $1,000,000, such LIBOR Revolving Loans shall  automatically
convert  into  Base Rate Revolving Loans, and on and  after  such
date  the right of the Borrower to continue such Revolving  Loans
as, and convert such Revolving Loans into, LIBOR Revolving Loans,
as the case may be, shall terminate.

          (b)    The   Borrower  shall  deliver   a   notice   of
conversion/continuation substantially in the form  of  Exhibit  C
(each  a  "Notice of Conversion/Continuation") to be received  by
the  Agent  not  later than 11:00 a.m. (Pacific  time)  at  least
three   (3)   Business  Days  in  advance  of   the   Conversion/
Continuation  Date, if the Revolving Loans are  to  be  converted
into or continued as LIBOR Revolving Loans and specifying:

               (i)  the proposed Conversion/ Continuation Date;

               (ii) the aggregate amount of Revolving Loans to be
     converted or renewed;

               (iii)      the  type of Revolving Loans  resulting
     from the proposed conversion or continuation; and

               (iv)   the  duration  of  the  requested  Interest
     Period.

          (c)   If  upon  the  expiration of any Interest  Period
applicable to LIBOR Revolving Loans, the Borrower has  failed  to
select  timely  a new Interest Period to be applicable  to  LIBOR
Revolving  Loans  or  if  any Default or Event  of  Default  then
exists,  the Borrower shall be deemed to have elected to  convert
such  LIBOR  Revolving  Loans  into  Base  Rate  Revolving  Loans
effective as of the expiration date of such Interest Period.

          (d)   The Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/ Continuation.  All conversions
and   continuations  shall  be  made  ratably  according  to  the
respective  outstanding principal amounts of the Revolving  Loans
with respect to which the notice was given held by each Lender.

          (e)   During  the existence of a Default  or  Event  of
Default,  the  Borrower may not elect to have  a  Revolving  Loan
converted into or continued as a LIBOR Revolving Loan.

          (f)    After   giving  effect  to  any  conversion   or
continuation  of  Revolving Loans, there may  not  be  more  than
six (6) different Interest Periods in effect.

     3.3   Maximum Interest Rate.  In no event shall any interest
rate  provided  for  hereunder exceed the  maximum  rate  legally
chargeable  by any Lender under applicable law for loans  of  the
type  provided for hereunder (the "Maximum Rate").   If,  in  any
month,  any  interest  rate, absent such limitation,  would  have
exceeded the Maximum Rate, then the interest rate for that  month
shall  be  the  Maximum  Rate, and, if  in  future  months,  that
interest rate would otherwise be less than the Maximum Rate, then
that  interest rate shall remain at the Maximum Rate  until  such
time  as the amount of interest paid hereunder equals the  amount
of  interest which would have been paid if the same had not  been
limited by the Maximum Rate.  In the event that, upon payment  in
full  of  the Obligations, the total amount of interest  paid  or
accrued under the terms of this Agreement is less than the  total
amount  of  interest which would, but for this Section 3.3,  have
been paid or accrued if the interest rates otherwise set forth in
this Agreement had at all times been in effect, then the Borrower
shall,  to the extent permitted by applicable law, pay the Agent,
for the account of the Lenders, an amount equal to the excess  of
(a)  the  lesser of (i) the amount of interest which  would  have
been  charged  if  the Maximum Rate had, at all  times,  been  in
effect  or  (ii) the amount of interest which would have  accrued
had the interest rates otherwise set forth in this Agreement,  at
all  times,  been  in  effect, over (b) the  amount  of  interest
actually paid or accrued under this Agreement.  In the event that
a  court determines that the Agent and/or any Lender has received
interest  and  other charges hereunder in excess of  the  Maximum
Rate,  such  excess shall be deemed received on account  of,  and
shall  automatically be applied to reduce, the Obligations  other
than interest, in the inverse order of maturity, and if there are
no  Obligations outstanding, the Agent and/or such  Lender  shall
refund to the Borrower such excess.

     3.4   Closing Fee.  The Borrower agrees to pay the Agent  on
the Initial Funding Date a closing fee (the "Closing Fee") in the
following amounts and to be ratably applied as indicated:

          (a)   $125,000  to  BABC, $93,750  to  NationsBank  and
$62,500 to Caisse Nationale de Credit Agricole; and

          (b)   $1,125,000 for the ratable account of the Lenders
according to their Commitments.

The  Closing  Fee  shall be fully earned by the  Lenders  on  the
Initial  Funding Date.  The Agent, the Lenders and  the  Borrower
agree  that  the Closing Fee, unless paid in cash on the  Initial
Funding  Date,  shall be financed by the Lenders as  a  Revolving
Loan.

     3.5   Unused Line Fee.  Until the Obligations have been paid
in full and the Agreement terminated, the Borrower agrees to pay,
on  the  first day of each month and on the Termination Date,  to
the Agent, for the ratable account of the Lenders, an unused line
fee  (the  "Unused  Line  Fee") equal  to  three-eighths  percent
(0.375%) per annum on the average daily amount by which the Total
Facility exceeded the sum of the average daily outstanding amount
of Revolving Loans and the undrawn face amount of all outstanding
Letters  of  Credit,  during the immediately preceding  month  or
shorter period if calculated on the Termination Date.  The Unused
Line  Fee shall be computed from the Initial Funding Date on  the
basis  of  a 360-day year for the actual number of days  elapsed.
All  payments received by the Agent on account of Accounts or  as
proceeds  of  other Collateral shall be deemed to be credited  to
the Borrower's Loan Account immediately upon receipt for purposes
of calculating the unused line fee pursuant to this Section 3.5.

     3.6   Letter of Credit Fee.  The Borrower agrees to  pay  to
the  Agent,  for  the ratable account of the  Lenders,  for  each
Letter of Credit, a fee (the "Letter of Credit Fee") equal to one
and  three-eighths percent (1.375%) per annum of the undrawn face
amount of each Letter of Credit issued for the Borrower's account
at the Borrower's request, plus all out-of-pocket costs, fees and
expenses incurred by the Agent in connection with the application
for, issuance of, or amendment to any Letter of Credit; provided,
however,  that the Letter of Credit Fee set forth above shall  be
modified  in certain circumstances as follows: (a) in  the  event
that  the  Adjusted Net Earnings for the fiscal  year  ending  on
December 31, 1997 exceeds $53,000,000 and no Event of Default has
occurred and is continuing, then as of the first day of the month
following  receipt  by  the  Agent of  the  Borrower's  certified
audited  financial statements the Letter of Credit Fee  shall  be
reduced  by  one-quarter of one percent (0.25%); and (b)  in  the
event  that the Adjusted Net Earnings for the fiscal year  ending
on  December 31, 1997 is less than $44,000,000, then  as  of  the
first  day  of  the month following receipt by the Agent  of  the
Borrower's certified audited financial statements the  Letter  of
Credit  Fee  shall  be increased by one-quarter  of  one  percent
(0.25%).  If a decrease under clause (a) of the above proviso was
not  made  because of an Event of Default, then upon  the  curing
thereof  (and provided that the other requirements of clause  (a)
remain satisfied), the decrease shall be made effective as of the
first  day  of  the month following the curing of  the  Event  of
Default.   The Letter of Credit Fee shall be payable  monthly  in
arrears  on  the first day of each month following any  month  in
which  a Letter of Credit was issued and/or in which a Letter  of
Credit  remains outstanding.  The Letter of Credit Fee  shall  be
computed on the basis of a 360-day year for the actual number  of
days elapsed.

     3.7   Other  Fees.  The Borrower agrees to pay to the  Agent
for  its own account any and all fees set forth in the Fee Letter
between the Borrower and the Agent.

                            ARTICLE 4

                    PAYMENTS AND PREPAYMENTS

     4.1    Revolving  Loans.   The  Borrower  shall  repay   the
outstanding  principal balance of the Revolving Loans,  plus  all
accrued  but  unpaid interest thereon, on the  Termination  Date.
The Borrower may prepay Revolving Loans at any time, and reborrow
subject  to the terms of this Agreement; provided, however,  that
with respect to any LIBOR Revolving Loans prepaid by the Borrower
prior  to  the expiration date of the Interest Period  applicable
thereto, the Borrower promises to pay to the Agent for account of
the  Lenders the amounts described in Section 5.3.  In  addition,
and without limiting the generality of the foregoing, upon demand
the  Borrower  promises to pay to the Agent, for account  of  the
Lenders,  the amount, without duplication, by which the Aggregate
Revolver  Outstandings  exceed the  lesser  of  (i)  the  Maximum
Revolver  Amount  and  (ii)  the  Borrower's  Availability  (with
Availability  for  this purpose calculated as if  there  were  no
outstanding Revolving Loans or Letters of Credit).

     4.2   Termination of Facility.  The Borrower  may  terminate
this Agreement upon at least thirty (30) Business Days' notice to
the  Agent and the Lenders, upon (a) the payment in full  of  all
outstanding  Revolving  Loans,  together  with  accrued  interest
thereon,  and  the  cancellation of all  outstanding  Letters  of
Credit, (b) the payment of the early termination fee set forth in
the  next sentence, (c) the payment in full in cash of all  other
Obligations together with accrued interest thereon, and (d)  with
respect  to any LIBOR Revolving Loans prepaid in connection  with
such  termination prior to the expiration date  of  the  Interest
Period  applicable thereto, the payment of the amounts  described
in  Section  5.5.  If this Agreement is terminated  at  any  time
prior  to the Stated Termination Date, whether pursuant  to  this
Section  or pursuant to Section 11.2, the Borrower shall  pay  to
the Agent, for the account of the Lenders in accordance with each
Lender's  Pro Rata Share, an early termination fee determined  in
accordance with the following table:

                 Period during which               Early
                  early termination             Termination
                       occurs                       Fee
                On or prior to the                $750,000
                First Anniversary
                Date

                After the First                   $500,000
                Anniversary Date but
                on or prior to the
                Second Anniversary
                Date

                After the Second                  $250,000
                Anniversary Date but
                on or before the
                Third Anniversary
                Date

Notwithstanding the foregoing, in the event that all  Obligations
under this Agreement are refinanced pursuant to a credit facility
agented  by  Bank of America or any of its Affiliates  after  the
first  Anniversary Date, then (a) the above referenced applicable
termination  fee  shall  be reduced by  one-third,  and  (b)  the
termination  fee, as so reduced, shall be payable to the  Lenders
other  than  BABC.  If at such time BABC does not  then  hold  at
least  one-third of the Commitments, then assignees of BABC which
purchased  Commitments from BABC at such time as BABC  no  longer
held  at  least  one-third of the Commitments or  which  purchase
resulted  in  BABC holding less than one-third of the Commitments
(but  only  to  the  extent  of such assignment  reducing  BABC's
Commitments below one-third of the Commitments) shall  not  share
in  the  termination  fee.  In addition, in the  event  that  all
Obligations  under this Agreement are refinanced  pursuant  to  a
credit facility agented or participated in by NationsBank or  any
of   its  Affiliates  after  the  first  Anniversary  Date,  then
NationsBank  shall  waive  any portion  of  the  termination  fee
otherwise payable to NationsBank.

     4.3  Payments by the Borrower.

          (a)   All payments to be made by the Borrower shall  be
made  without  set-off,  recoupment or counterclaim.   Except  as
otherwise expressly provided herein, all payments by the Borrower
shall be made to the Agent for the account of the Lenders at  the
Agent's address set forth on the signature page hereto (as it may
be  changed  pursuant  to  a  notice  given  in  accordance  with
Section  15.8),  and shall be made in Dollars and in  immediately
available  funds, no later than 1:00 p.m. (Pacific time)  on  the
date  specified herein.  Any payment received by the Agent  later
than  1:00  p.m.  (Pacific time) shall be  deemed  to  have  been
received  on  the  following  Business  Day  and  any  applicable
interest or fee shall continue to accrue.

          (b)   Subject  to  the  provisions  set  forth  in  the
definition  of "Interest Period" herein, whenever any payment  is
due  on  a  day other than a Business Day, such payment shall  be
made  on  the following Business Day, and such extension of  time
shall in such case be included in the computation of interest  or
fees, as the case may be.

          (c)  Unless the Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that
the  Borrower  will not make such payment in  full  as  and  when
required,  the Agent may assume that the Borrower has  made  such
payment  in  full  to  the  Agent on  such  date  in  immediately
available funds and the Agent may (but shall not be so required),
in  reliance upon such assumption, distribute to each  Lender  on
such due date an amount equal to the amount then due such Lender.
If  and  to the extent the Borrower has not made such payment  in
full to the Agent, each Lender shall repay to the Agent on demand
such  amount  distributed to such Lender, together with  interest
thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

     4.4    Payments  as  Revolving  Loans.   All   payments   of
principal, interest, reimbursement obligations in connection with
Letters  of  Credit,  premiums and other sums payable  hereunder,
including  all  reimbursement for expenses and fees  pursuant  to
this  Agreement  may, at the option of the  Agent,  in  its  sole
discretion, subject only to the terms of this Agreement, be  paid
from the proceeds of Revolving Loans made hereunder, whether made
following a request by the Borrower pursuant to Section 2.2 or  a
deemed  request  as provided in this Section 4.4.   The  Borrower
hereby irrevocably authorizes the Agent for the purpose of paying
any  principal, interest, reimbursement obligations in connection
with  Letters  of Credit, fees, premiums and other sums  payable,
and  agrees  that  all  such  amounts  charged  shall  constitute
Revolving  Loans  (including BABC Loans and Agent  Advances)  and
that  all  such Revolving Loans so made shall be deemed  to  have
been requested by the Borrower pursuant to Section 2.2; provided,
however,  so long as funds in the Payment Account are  not  being
transferred  to  the  Agent as a result of the  occurrence  of  a
Triggering Event, the Agent agrees to advise the Borrower (i)  of
the  interest  and fees due by 10:00 a.m. (Pacific time)  of  the
date  due,  and if paid by 1:00 p.m. (Pacific time) on such  day,
such  interest and fees will not be charged to the  Loan  Account
and  (ii) of other amounts due pursuant to the Agreement  and  if
paid within a reasonable period of time such amounts will not  be
charged to the Loan Account.

     4.5   Apportionment, Application and Reversal  of  Payments.
Aggregate  principal and interest payments shall  be  apportioned
ratably  among  the  Lenders (according to the  unpaid  principal
balance of the Revolving Loans to which such payments relate held
by each Lender) and payments of the fees shall, as applicable, be
apportioned  ratably among the Lenders.  All  payments  shall  be
remitted  to  the  Agent and all such payments  not  relating  to
principal  or  interest  of  specific  Revolving  Loans,  or  not
constituting  payment  of  specific fees,  and  all  proceeds  of
Accounts  or  other Collateral received by the  Agent,  shall  be
applied,  ratably, subject to the provisions of  this  Agreement,
first,  to  pay  any fees, indemnities or expense  reimbursements
including  any amounts relating to ACH Transactions then  due  to
the  Agent from the Borrower (provided, however, that the  amount
of  ACH Transactions shall not exceed $1,000,000); second, to pay
any  fees or expense reimbursements then due to the Lenders  from
the  Borrower;  third,  to pay interest due  in  respect  of  all
Revolving Loans, including BABC Loans and Agent Advances, and  to
pay  interest and any fees then due to the L/C Issuer in  respect
of  Letters of Credit; fourth, to pay or prepay principal of  the
BABC  Loans and Agent Advances; fifth, to pay or prepay principal
of the Revolving Loans (other than BABC Loans and Agent Advances)
and  unpaid  reimbursement obligations owing to  the  Lenders  in
respect  of Letters of Credit; and sixth, to the payment  of  any
other  Obligation due to the Agent or any Lender by the Borrower,
including   any   unpaid  amounts  owing  for  ACH  Transactions.
Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement, unless so directed by the Borrower, or unless an Event
of Default is outstanding, neither the Agent nor any Lender shall
apply any payments which it receives to any LIBOR Revolving Loan,
except  (a)  on  the  expiration  date  of  the  Interest  Period
applicable to any such LIBOR Revolving Loan, or (b) in the event,
and  only to the extent, that there are no outstanding Base  Rate
Revolving  Loans.   The Agent shall promptly distribute  to  each
Lender,  pursuant  to  the applicable wire transfer  instructions
received  from each Lender in writing, such funds as  it  may  be
entitled  to  receive, subject to a Settlement delay as  provided
for  in Section 2.2(j).  The Agent and the Lenders shall have the
continuing  and exclusive right to apply and reverse and  reapply
any  and  all  such proceeds and payments to any portion  of  the
Obligations.

     4.6  Indemnity for Returned Payments.  If, after receipt  of
any payment of, or proceeds applied to the payment of, all or any
part  of  the  Obligations, the Agent or any Lender  is  for  any
reason  compelled to surrender such payment or  proceeds  to  any
Person,  because  such  payment or  application  of  proceeds  is
invalidated,  declared fraudulent, set aside,  determined  to  be
void  or  voidable as a preference, impermissible  setoff,  or  a
diversion  of  trust  funds, or for any other  reason,  then  the
Obligations  or  part thereof intended to be satisfied  shall  be
revived  and continue and this Agreement shall continue  in  full
force as if such payment or proceeds had not been received by the
Agent or such Lender, and the Borrower shall be liable to pay  to
the  Agent,  and hereby does indemnify the Agent and the  Lenders
and  hold  the Agent and the Lenders harmless for, the amount  of
such  payment  or proceeds surrendered.  The provisions  of  this
Section  4.6  shall  be and remain effective notwithstanding  any
contrary  action which may have been taken by the  Agent  or  any
Lender  in reliance upon such payment or application of proceeds,
and  any such contrary action so taken shall be without prejudice
to  the Agent's and the Lenders' rights under this Agreement  and
shall  be  deemed to have been conditioned upon such  payment  or
application of proceeds having become final and irrevocable.  The
provisions  of this Section 4.6 shall survive the termination  of
this Agreement.

     4.7    Agent's  and  Lenders'  Books  and  Records;  Monthly
Statements.  The  Borrower  agrees  that  the  Agent's  and  each
Lender's  books  and  records showing  the  Obligations  and  the
transactions  pursuant  to  this Agreement  and  the  other  Loan
Documents shall be admissible in any action or proceeding arising
therefrom,  and  shall  constitute rebuttably  presumptive  proof
thereof, irrespective of whether any Obligation is also evidenced
by a promissory note or other instrument.  The Agent will provide
to the Borrower a monthly statement of Revolving Loans, payments,
and   other  transactions  pursuant  to  this  Agreement.    Such
statement shall be deemed correct, accurate, and binding  on  the
Borrower  and  an  account  stated  (except  for  reversals   and
reapplications  of payments made as provided in Section  4.5  and
corrections  of  errors  discovered by  the  Agent),  unless  the
Borrower  notifies  the Agent in writing to the  contrary  within
sixty (60) days after such statement is rendered.  In the event a
timely  written  notice of objections is given by  the  Borrower,
only  the  items  to which exception is expressly  made  will  be
considered to be disputed by the Borrower.

                            ARTICLE 5

             TAXES, YIELD PROTECTION AND ILLEGALITY

     5.1  Taxes.

          (a)   Any  and  all  payments by the Borrower  to  each
Lender  or  the  Agent under this Agreement and  any  other  Loan
Document  shall be made free and clear of, and without  deduction
or  withholding  for any Taxes.  In addition, the Borrower  shall
pay all Other Taxes.

          (b)  The Borrower agrees to indemnify and hold harmless
each  Lender and the Agent for the full amount of Taxes or  Other
Taxes  (including  any  Taxes  or  Other  Taxes  imposed  by  any
jurisdiction on amounts payable under this Section) paid  by  the
Lender  or  the  Agent  and any liability  (including  penalties,
interest,  additions  to tax and expenses) arising  therefrom  or
with  respect thereto, whether or not such Taxes or  Other  Taxes
were   correctly  or  legally  asserted.   Payment   under   this
indemnification shall be made within 30 days after the  date  the
Lender or the Agent makes written demand therefor.

          (c)  If the Borrower shall be required by law to deduct
or  withhold any Taxes or Other Taxes from or in respect  of  any
sum payable hereunder to any Lender or the Agent, then:

               (i)   the  sum  payable  shall  be  increased   as
necessary  so  that  after  making all  required  deductions  and
withholdings (including deductions and withholdings applicable to
additional  sums payable under this Section) such Lender  or  the
Agent, as the case may be, receives an amount equal to the sum it
would  have received had no such deductions or withholdings  been
made;

               (ii)  the Borrower shall make such deductions  and
withholdings;

               (iii)      the Borrower shall pay the full  amount
deducted  or withheld to the relevant taxing authority  or  other
authority in accordance with applicable law; and

               (iv) the Borrower shall also pay to each Lender or
the Agent for the account of such Lender, at the time interest is
paid,   all  additional  amounts  which  the  respective   Lender
specifies as necessary to preserve the after-tax yield the Lender
would  have  received if such Taxes or Other Taxes had  not  been
imposed.

          (d)   Within  30 days after the date of any payment  by
the  Borrower of Taxes or Other Taxes, the Borrower shall furnish
the  Agent  the  original  or  a  certified  copy  of  a  receipt
evidencing   payment  thereof,  or  other  evidence  of   payment
satisfactory to the Agent.

          (e)   If  the  Borrower is required to  pay  additional
amounts to any Lender or the Agent pursuant to subsection (c)  of
this  Section,  then  such Lender shall  use  reasonable  efforts
(consistent with legal and regulatory restrictions) to change the
jurisdiction  of its lending office so as to eliminate  any  such
additional  payment by the Borrower which may thereafter  accrue,
if  such  change in the judgment of such Lender is not  otherwise
disadvantageous  to  such  Lender.   Borrower   shall   have   no
obligation to pay additional amounts pursuant to this Section 5.1
which  are  owing on account of such Lender's failure  to  comply
with its obligations under Section 14.10.

     5.2  Illegality.

          (a)  If any Lender determines that the introduction  of
any  Requirement of Law, or any change in any Requirement of Law,
or  in the interpretation or administration of any Requirement of
Law (in each case after the date of this Agreement), has made  it
unlawful,   or  that  any  central  bank  or  other  Governmental
Authority has asserted that it is unlawful, for any Lender or its
applicable lending office to make LIBOR Revolving Loans, then, on
notice  thereof by the Lender to the Borrower through the  Agent,
any obligation of that Lender to make LIBOR Revolving Loans shall
be suspended until the Lender notifies the Agent and the Borrower
that  the  circumstances  giving rise to  such  determination  no
longer exist.

          (b)   If  a  Lender determines that it is  unlawful  to
maintain  any LIBOR Revolving Loan, the Borrower shall, upon  its
receipt of notice of such fact and demand from such Lender  (with
a  copy to the Agent), prepay in full such LIBOR Revolving  Loans
of  that  Lender then outstanding, together with interest accrued
thereon  and  amounts required under Section 5.3, either  on  the
last  day  of  the  Interest Period thereof, if  the  Lender  may
lawfully continue to maintain such LIBOR Revolving Loans to  such
day,  or immediately, if the Lender may not lawfully continue  to
maintain  such LIBOR Revolving Loan.  If the Borrower is required
to  so  prepay  any LIBOR Revolving Loan, then concurrently  with
such  prepayment,  the Borrower shall borrow  from  the  affected
Lender,  in  the amount of such repayment, a Base Rate  Revolving
Loan.

     5.3  Increased Costs and Reduction of Return.

          (a)   If  any  Lender determines that,  due  to  either
(i)  the  introduction of or any change in the interpretation  of
any  law  or  regulation (in each case after  the  date  of  this
Agreement)  or  (ii)  the  compliance by  that  Lender  with  any
guideline  or  request  (in each case  after  the  date  of  this
Agreement) from any central bank or other Governmental  Authority
(whether  or  not having the force of law), there  shall  be  any
increase  in  the  cost to such Lender of  agreeing  to  make  or
making,  funding or maintaining any LIBOR Revolving  Loans,  then
the  Borrower shall be liable for, and shall from time  to  time,
upon demand (with a copy of such demand to be sent to the Agent),
pay  to  the  Agent  for the account of such  Lender,  additional
amounts  as  are  sufficient to compensate such Lender  for  such
increased costs.

          (b)   If any Lender shall have determined that (i)  the
introduction of any Capital Adequacy Regulation, (ii) any  change
in  any  Capital  Adequacy Regulation, (iii) any  change  in  the
interpretation   or  administration  of  any   Capital   Adequacy
Regulation  by  any central bank or other Governmental  Authority
charged  with  the interpretation or administration  thereof,  or
(iv)  compliance by the Lender or any corporation or other entity
controlling  the Lender with any Capital Adequacy Regulation  (in
each  case  after the date of this Agreement), affects  or  would
affect  the  amount  of  capital  required  or  expected  to   be
maintained  by  the  Lender or any corporation  or  other  entity
controlling  the  Lender  and  (taking  into  consideration  such
Lender's  or  such corporation's or other entity's policies  with
respect  to capital adequacy and such Lender's desired return  on
capital)  determines that the amount of such capital is increased
as   a   consequence  of  its  Commitments,  loans,  credits   or
obligations  under  this Agreement, then,  upon  demand  of  such
Lender to the Borrower through the Agent, the Borrower shall  pay
to  the  Lender,  from time to time as specified by  the  Lender,
additional amounts sufficient to compensate the Lender  for  such
increase.

     5.4   Replacement  of Lender in Event of Adverse  Condition.
In  the  event  that  any Lender has notified the  Borrower  that
circumstances  exist  which would cause the  Borrower  to  become
obligated  to  pay  or  the  Borrower becomes  obligated  to  pay
additional amounts to any Lender pursuant to Sections  5.1,  5.2,
or  5.3  as  a  result  of any condition described  in  any  such
Section, then, unless such Lender has theretofore taken steps  to
remove  or  cure,  and  has removed or cured,  the  circumstances
described in such notice or the conditions creating the cause for
such  obligation to pay such additional amounts, as the case  may
be,  during the ninety (90) day period beginning on the date  any
such  notice  was  given,  the  Borrower  may  designate  another
financial institution which is reasonably acceptable to the Agent
to  purchase the Revolving Loans of such Lender and such Lender's
interest  in Letters of Credit and such Lender's rights hereunder
and  assume such Lender's obligations hereunder, without recourse
to  or  warranty  by, or expense to, such Lender for  a  purchase
price  equal to the outstanding principal amount of the Revolving
Loans payable to such Lender plus any accrued but unpaid interest
on  such Revolving Loans and accrued but unpaid Unused Line  Fees
in  respect  of that Lender's Commitment and accrued  but  unpaid
Letter  of Credit Fees and upon such purchase and the payment  of
the  additional amounts described above and all other Obligations
owing  to  such Lender, such Lender shall no longer  be  a  party
hereto   or   have  any  rights  hereunder,  and  the   financial
institution replacing such Lender shall succeed to the rights  of
such Lender hereunder.

     5.5   Funding  Losses.   The Borrower shall  reimburse  each
Lender  and  hold each Lender harmless from any loss  or  expense
which the Lender may sustain or incur as a consequence of:

          (a)   the  failure of the Borrower to make on a  timely
basis any payment of principal of any LIBOR Revolving Loan;

          (b)  the failure of the Borrower to borrow, continue or
convert  a  Revolving Loan after the Borrower has  given  (or  is
deemed  to  have  given) a Notice of Borrowing  or  a  Notice  of
Conversion/ Continuation;

          (c)   the prepayment or other payment (including  after
acceleration thereof) of an LIBOR Revolving Loan on a day that is
not  the last day of the relevant Interest Period; including  any
such loss or expense arising from the liquidation or reemployment
of  funds obtained by it to maintain its LIBOR Revolving Loans or
from fees payable to terminate the deposits from which such funds
were obtained.

     5.6   Inability to Determine Rates.  If the Agent determines
that  for  any reason adequate and reasonable means do not  exist
for  determining the LIBOR Rate for any requested Interest Period
with  respect  to a proposed LIBOR Revolving Loan,  or  that  the
LIBOR  Rate for any requested Interest Period with respect  to  a
proposed  LIBOR  Revolving Loan does not  adequately  and  fairly
reflect  the cost to the Lenders of funding such LIBOR  Revolving
Loan,  the  Agent will promptly so notify the Borrower  and  each
Lender.   Thereafter, the obligation of the Lenders  to  make  or
maintain LIBOR Revolving Loans hereunder shall be suspended until
the  Agent revokes such notice in writing.  Upon receipt of  such
notice, the Borrower may revoke any Notice of Borrowing or Notice
of  Conversion/  Continuation  then  submitted  by  it.   If  the
Borrower  does  not revoke such Notice, the Lenders  shall  make,
convert  or  continue the Revolving Loans,  as  proposed  by  the
Borrower,  in  the  amount  specified in  the  applicable  notice
submitted  by  the Borrower, but such Revolving  Loans  shall  be
made, converted or continued as Base Rate Revolving Loans instead
of LIBOR Revolving Loans.

     5.7    Certificates   of  Lenders.   Any   Lender   claiming
reimbursement or compensation under this Article 5 shall  deliver
to  the Borrower (with a copy to the Agent) a certificate setting
forth  in  reasonable  detail the amount payable  to  the  Lender
hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.

     5.8   Survival.   The  agreements  and  obligations  of  the
Borrower in this Article 5 shall survive the payment of all other
Obligations.

                            ARTICLE 6

                           COLLATERAL

     6.1  Grant of Security Interest.

          (a)    As   security   for  all  present   and   future
Obligations,  the Borrower hereby grants to the  Agent,  for  the
ratable  benefit of the Agent, the L/C Issuer and the Lenders,  a
continuing  security  interest in, lien on,  assignment  of,  and
right  of  set-off  against, all Property  (other  than  Excluded
Property)  in  which  the Borrower now or hereafter  has  rights,
regardless  of where located, including, without limitation,  the
following (in all cases excluding Excluded Property):

               (i)  all Accounts;

               (ii) all Inventory;

               (iii)      all contract rights, letters of credit,
Assigned  Contracts, chattel paper, instruments, fixtures  (other
than  fixtures relating to Real Estate listed in Schedule  8.32),
documents, and documents of title;

               (iv) all General Intangibles;

               (v)  all Equipment;

               (vi)  all  money, securities, investment  property
and  other property of any kind of the Borrower in the possession
or  under the control of the Agent or any Lender, any assignee of
or  participant in the Obligations, or a bailee of any such party
or such party's affiliates;

               (vii)       all  deposit  accounts,  credits   and
balances with and other claims against the Agent or any Lender or
any of its affiliates or any other financial institution in which
the Borrower maintains deposits;

               (viii)     all  books, records and other  property
related  to  or  referring  to any of the  foregoing,  including,
without   limitation,  books,  records,  account  ledgers,   data
processing  records,  computer software and  other  property  and
General Intangibles at any time evidencing or relating to any  of
the foregoing; and

               (ix)  all  accessions  to, substitutions  for  and
replacements,  products and proceeds of  any  of  the  foregoing,
including,  but  not  limited  to,  proceeds  of  any   insurance
policies,  claims  against  third parties,  and  condemnation  or
requisition payments with respect to all or any of the foregoing.

All  of the foregoing, and all other property of the Borrower  in
which the Agent, the L/C Issuer or any Lender may at any time  be
granted  a  Lien,  is  herein collectively  referred  to  as  the
"Collateral."

          (b)  All of the Obligations shall be secured by all  of
the  Collateral.   The Agent may, subject to  the  provisions  of
Articles 13 and 14, in its sole discretion, (i) exchange,  waive,
or  release  any  of  the Collateral, (ii) apply  Collateral  and
direct  the  order  or manner of sale thereof as  the  Agent  may
determine,  and (iii) settle, compromise, collect,  or  otherwise
liquidate any Collateral in any manner, all without affecting the
Obligations  or  the Agent's or any Lender's right  to  take  any
other action with respect to any other Collateral.

     6.2  Perfection and Protection of Security Interests.

          (a)   The  Borrower shall, at its expense, perform  all
steps  requested  by the Agent at any time to perfect,  maintain,
protect,  and  enforce  the  Agent's  Liens,  including,  without
limitation:    (i)  executing,  delivering  and/or   filing   and
recording  of  the Patent and Trademark Agreements and  executing
and  filing  financing or continuation statements, and amendments
thereof,  in  form  and  substance  satisfactory  to  the  Agent;
(ii)  delivering  to the Agent the originals of all  instruments,
documents, and chattel paper, and all other Collateral  of  which
the  Agent determines it should have physical possession in order
to  perfect  and  protect  any security  interest  therein,  duly
pledged,  endorsed or assigned to the Agent without  restriction;
(iii) delivering to the Agent all letters of credit on which  the
Borrower  is named beneficiary; and (iv) taking such other  steps
as are deemed necessary or desirable by the Agent to maintain and
protect the Agent's Liens.  To the extent permitted by applicable
law, the Agent may file, without the Borrower's signature, one or
more  financing statements disclosing the Agent's Liens.  If  for
any  reason the Borrower fails to execute upon the request of the
Agent any financing statement, the Borrower agrees that a carbon,
photographic,   photostatic,  or  other  reproduction   of   this
Agreement  or  of  a  financing  statement  is  sufficient  as  a
financing statement.

          (b)   Without limiting the generality of the provisions
of  Section 6.2(a) the Borrower shall:  (i) register ownership of
goods covered by a certificate of title owned by the Borrower  in
the  name  of  the  Borrower,  (ii) hold  certificates  of  title
relating  to Included Revenue Equipment, for the benefit  of  the
Agent,  the L/C Issuer and the Lenders, (iii) process  each  such
certificate of title, including responding to correspondence  and
follow-up  with  the  department  of  motor  vehicles  or   other
appropriate Governmental Authority, to obtain a notation  of  the
security  interest  of  the Agent on each  certificate  of  title
relating  to  Included Revenue Equipment, and (iv)  deliver  such
certificates to the Agent.  Subject to the limitations set  forth
in  Section  6.10(d),  at  the Borrowers  request,  but  no  more
frequently than three times a month, the Agent shall redeliver to
the  Borrower  certificates  in its possession  relating  to  the
related  Revenue Equipment sold or otherwise disposed of  by  the
Borrower,  along with appropriate documentation  to  release  the
Agent's  Lien; provided, that the Agent shall make a  good  faith
effort  to  accommodate  additional  requests  for  releases   of
certificates  in  the Agent's possession from  time  to  time  in
response  to  any  urgent business need  of  the  Borrower.   The
Borrower   shall   process  all  requests  for  registration   of
ownership,  and  all applications for notation  of  the  security
interest  in favor of the Agent in all Included Revenue Equipment
promptly, and in any event within five (5) Business Days  of  the
date  any  such  Included  Revenue  Equipment  is  registered  or
licensed.  The Borrower shall respond to all communications which
could  affect  the  Agent's  Lien in any  such  Included  Revenue
Equipment promptly, and in any event shall provide copies of  all
such correspondence, excluding routine correspondence relating to
purchases  and sales of Included Revenue Equipment, to the  Agent
promptly  after  receipt by the Borrower  and  concurrently  with
transmission  of any response or correspondence prepared  by  the
Borrower.

          (c)   The Borrower shall use its best efforts to obtain
as   promptly  as  possible  a  valid,  binding  and  enforceable
Landlord's  Waiver from each Person which leases Real  Estate  to
the  Borrower.   In any event, not more than 90  days  after  the
Closing  Date,  the Borrower shall have delivered valid,  binding
and  enforceable Landlord's Waivers to the Agent with respect  to
not less than the lesser of 80% of the number of doors covered by
the leases listed on Schedule 8.12 or 75% of the leases listed on
Schedule 8.12.

          (d)  If any Collateral is at any time in the possession
or  control  of any warehouseman, bailee or any of the Borrower's
agents  or  processors, then the Borrower shall notify the  Agent
thereof  and  shall  notify such Person of the  Agent's  security
interest  in  such  Collateral and,  upon  the  Agent's  request,
instruct such Person to hold all such Collateral for the  Agent's
account subject to the Agent's instructions.

          (e)   From  time to time, the Borrower shall, upon  the
Agent's   request,  execute  and  deliver  confirmatory   written
instruments pledging to the Agent, for the ratable benefit of the
Agent  and  the  Lenders,  the Collateral  with  respect  to  the
Borrower, but the Borrower's failure to do so shall not affect or
limit  any security interest or any other rights of the Agent  or
any Lender in and to the Collateral with respect to the Borrower.
So  long as this Agreement is in effect and until all Obligations
(other than Surviving Indemnities) have been fully satisfied, the
Agent's  Liens  shall continue in full force and  effect  in  all
Collateral  (whether or not deemed eligible for  the  purpose  of
calculating  the  Availability or as the basis for  any  advance,
loan, extension of credit, or other financial accommodation).

     6.3   Location  of Collateral.  The Borrower represents  and
warrants to the Agent and the Lenders that:  (a) Schedule 8.12 is
a  correct  and  complete list of the Borrower's chief  executive
office,  the location of its books and records, and the locations
of  all  of  its other places of business; and (b) Schedule  8.12
correctly  identifies any of such facilities and  locations  that
are  not  owned by the Borrower and sets forth the names  of  the
owners  and  lessors or sublessors of and, to  the  best  of  the
Borrower's  knowledge,  the holders of  any  mortgages  on,  such
facilities and locations.  The Borrower covenants and agrees that
it  will  not  (i) maintain any Collateral at any location  other
than  those  locations listed for the Borrower on Schedule  8.12;
(ii)  otherwise  change or add to any of such  locations  without
giving notice of such changes and additions to the Agent no  less
often  than quarterly, or (iii) change the location of its  chief
executive  office from the location identified in Schedule  8.12,
unless  it  gives  the  Agent at least thirty  (30)  days'  prior
written  notice  thereof  and  executes  any  and  all  financing
statements  and  other  documents  that  the  Agent  requests  in
connection therewith.

     6.4   Title  to,  Liens on, and Sale and Use of  Collateral.
The Borrower represents and warrants to the Agent and the Lenders
and  agrees with the Agent and the Lenders that:  (a) all of  the
Collateral is and will continue to be owned by the Borrower  free
and  clear  of all Liens whatsoever, except for Permitted  Liens;
(b)  the  Agent's Liens in the Collateral will not be subject  to
any  prior Lien, except for Permitted Liens of the type specified
in  clauses  (e) and (j) of such defined term; (c)  the  Borrower
will  use, store, and maintain the Collateral with all reasonable
care  and will use such Collateral for lawful purposes only;  and
(d)  the  Borrower  will not, without the Agent's  prior  written
approval,  sell, or dispose of or permit the sale or  disposition
of  any  of the Collateral except for sales of Inventory  in  the
ordinary  course of business and sales of Equipment as  permitted
by  Section  6.10.  The inclusion of proceeds in  the  Collateral
shall  not  be  deemed to constitute the Agent's or any  Lender's
consent to any sale or other disposition of the Collateral except
as expressly permitted herein.

     6.5   Appraisals.   At  the  Agent's  request  in  its  sole
discretion whenever a Default or Event of Default exists, and  at
such  other  times not more frequently than once a  year  as  the
Borrower desires, the Borrower shall, at its expense, provide the
Agent  with  appraisals or updates thereof of any or all  of  the
Included  Revenue Equipment, from a credentialed  appraiser,  and
prepared  on  a basis satisfactory to the Agent, such  appraisals
and  updates to include, without limitation, information required
by  applicable law and regulation and by the internal policies of
the Lenders.

     6.6  Access and Examination; Confidentiality.

          (a)   The  Agent,  accompanied by any Lender  which  so
elects,  may  at  all reasonable times (and at any  time  when  a
Default  or  Event  of Default exists) have access  to,  examine,
audit, make extracts from or copies of and inspect any or all  of
the  Borrower's  records, files, and books  of  account  and  the
Collateral,   and  discuss  the  Borrower's  affairs   with   the
Borrower's officers and management.  The Borrower will deliver to
the  Agent  any  instrument necessary for  the  Agent  to  obtain
records  from  any  service bureau maintaining  records  for  the
Borrower.   The Agent may, and at the direction of  the  Majority
Lenders  shall,  at any time when a Default or Event  of  Default
exists, and at the Borrower's expense, make copies of all of  the
Borrower's books and records, or require the Borrower to  deliver
such copies to the Agent.  The Agent may, without expense to  the
Agent, use such of the Borrower's respective personnel, supplies,
and  premises  as may be reasonably necessary for maintaining  or
enforcing the Agent's Liens.  The Agent shall have the right,  at
any  time, in the Agent's name or in the name of a nominee of the
Agent,  to  verify  the  validity, amount  or  any  other  matter
relating  to  the  Accounts, Inventory, or other  Collateral,  by
mail, telephone, or otherwise.

          (b)    The  Borrower  agrees  that,  subject   to   the
Borrower's  and the Agent's prior consent for uses other than  in
a  traditional tombstone (disclosing in such tombstone,  however,
only  the  amount  of the credit facility provided  by,  and  the
parties  to,  this  Agreement),  which  consents  shall  not   be
unreasonably withheld or delayed, the Agent and each  Lender  may
use  the  Borrower's name in advertising and promotional material
and  in conjunction therewith disclose the general terms of  this
Agreement.   The Agent and each Lender agree to take  normal  and
reasonable  precautions and exercise due  care  to  maintain  the
confidentiality of all confidential information provided  to  the
Agent or such Lender by or on behalf of the Borrower, under  this
Agreement or any other Loan Document, and neither the Agent,  nor
such Lender nor any of their respective Affiliates shall use  any
such  information other than in connection with or in enforcement
of  this  Agreement and the other Loan Documents, except  to  the
extent  that  such  information  (i)  was  or  becomes  generally
available  to the public other than as a result of disclosure  by
the  Agent or such Lender, or (ii) was or becomes available on  a
nonconfidential  basis  from a source other  than  the  Borrower,
provided  that  such  source is not bound  by  a  confidentiality
agreement  with the Borrower known to the Agent or  such  Lender;
provided,  however,  that the Agent and any Lender  may  disclose
such   information  (1)  at  the  request  or  pursuant  to   any
requirement of any Governmental Authority to which the  Agent  or
such  Lender  is subject or in connection with an examination  of
the  Agent  or  such  Lender by any such Governmental  Authority;
(2)  pursuant  to  subpoena  or other  court  process;  (3)  when
required  to  do  so  in accordance with the  provisions  of  any
applicable  requirement  of law; (4)  to  the  extent  reasonably
required   in  connection  with  any  litigation  or   proceeding
(including,  but  not limited to, any bankruptcy  proceeding)  to
which the Agent, any Lender or their respective Affiliates may be
party  (or  a  party in interest with respect to  any  bankruptcy
proceeding); (5) to the extent reasonably required in  connection
with the exercise of any remedy hereunder or under any other Loan
Document;  (6)  to  the  Agent's  or  such  Lender's  independent
auditors, accountants, attorneys and other professional advisors;
(7)   to  any  prospective  Participant  or  assignee  under  any
Assignment  and  Acceptance, actual or potential,  provided  that
such  prospective  Participant or assignee agrees  to  keep  such
information confidential to the same extent required of the Agent
and  the Lenders hereunder; (8) as expressly permitted under  the
terms    of   any   other   document   or   agreement   regarding
confidentiality to which the Borrower is party or is deemed party
with the Agent or such Lender, and (9) to its Affiliates.

     6.7   Collateral Reporting.  The Borrower shall provide  the
Agent with the following documents at the following times in form
satisfactory to the Agent:

          (a)   on  a  weekly basis, a Borrowing Base Certificate
and  at the same time, such supporting documentation as the Agent
may request;

          (b)   on  a monthly basis, as of the end of each month,
and received by the end of the 20th day of the following month, a
report including all of the information provided in the Borrowing
Base Certificate;

          (c)   on  a monthly basis, as of the end of each month,
and  received  by  the Agent no later than the 20th  day  of  the
following  month,  an aging of the Borrower's Accounts,  together
with  a reconciliation to the Borrower's general ledger, and  the
Borrower's  computation  of  ineligible  Accounts  and   reserves
against  Availability, certified as accurate  and  correct  by  a
Responsible Officer of the Borrower;

          (d)   on  a monthly basis, as of the end of each month,
and  received  by  the Agent no later than the 20th  day  of  the
following  month, an aging or open item listing of all Borrower's
accounts payable to the fifteen Account Debtors with the  highest
amount  of  Accounts  owed to the Borrower;  provided  that  such
accounts  payable information shall not be required with  respect
to  the Account Debtors to which the Borrower is indebted  in  an
amount not in excess of $50,000;

          (e)   on  a monthly basis as of the end of each  month,
and  received  by  the Agent no later than the 20th  day  of  the
following  month (or more frequently if requested by the  Agent),
Revenue  Equipment reports certifying that the Agent's Liens  are
first priority perfected Liens on all Included Revenue Equipment,
and indicating (i) the orderly liquidation value of such Included
Revenue  Equipment  based  on  the  latest  appraisal,  (ii)  all
additions  to  and deletions from the Included Revenue  Equipment
during  such month (and cumulatively from the date of the  latest
appraisal),  and  (iii)  the original acquisition  cost  of  such
additions during such month and 70% thereof;

          (f)   such  other reports as to the Collateral  of  the
Borrower as the Agent shall reasonably request from time to time;
and

          (g)   with  the  delivery of each of the  foregoing,  a
certificate of an officer of the Borrower certifying  as  to  the
accuracy and completeness of the foregoing.

          If  any  of  the Borrower's records or reports  of  the
Collateral are prepared by an accounting service or other  agent,
the  Borrower hereby authorizes such service or agent to  deliver
such  records, reports, and related documents to the  Agent,  for
distribution to the Lenders.  Any report required to be delivered
pursuant to this Section 6.7 on a day that is not a Business  Day
may  be delivered on the next Business Day after such report  was
due.

     6.8  Accounts.

          (a)  The Borrower hereby represents and warrants to the
Agent  and  the Lenders, with respect to the Borrower's Accounts,
that:   (i)  each  existing Account represents, and  each  future
Account will represent, a bona fide sale or lease and delivery of
goods  by the Borrower, or rendition of services by the Borrower,
in  the  ordinary  course of the Borrower's business;  (ii)  each
existing  Account  is, and each future Account  will  be,  for  a
liquidated  amount payable by the Account Debtor thereon  on  the
terms  set  forth  in  the invoice therefor or  in  the  schedule
thereof  delivered  to the Agent, without any offset,  deduction,
defense,  or counterclaim except those known to the Borrower  and
disclosed  to  the  Agent  and  the  Lenders  pursuant  to   this
Agreement; (iii) no payment will be received with respect to  any
Account,  and  no  credit, discount, or extension,  or  agreement
therefor will be granted on any Account, except (A) in accordance
with the usual and normal business practices of the Borrowers  or
(B)  as reported to the Agent and the Lenders in accordance  with
this  Agreement;  (iv) each copy of an invoice delivered  to  the
Agent  by  the  Borrower will be a genuine copy of  the  original
invoice  sent to the Account Debtor named therein;  and  (v)  all
goods described in any invoice representing a sale of goods  will
have been delivered to the Account Debtor and all services of the
Borrower  described in any invoice representing the rendering  of
services  will  have  been performed, except  that  invoices  for
freight or other charges for the shipment of goods may be  issued
and dated as of the pick-up date.

          (b)  Borrower shall not re-date any invoice or sale  or
make  sales  on  extended dating beyond  that  customary  in  the
Borrower's  business  or extend or modify any  Account.   If  the
Borrower  becomes  aware  of any matter adversely  affecting  the
collectability  of  any Account or Account  Debtor  involving  an
amount greater than $250,000, including information regarding the
Account Debtor's creditworthiness, the Borrower will promptly  so
advise the Agent.

          (c)   Borrower  shall  not accept  any  note  or  other
instrument  (except  (i)  a  check or other  instrument  for  the
immediate  payment  of money, or (ii) in its ordinary  course  of
business in connection with "workouts" and bankruptcy proceedings
involving  account debtors) with respect to any  Account  without
the  Agent's  written  consent.  If the  Agent  consents  to  the
acceptance  of  any such instrument, it shall  be  considered  as
evidence  of the Account and not payment thereof and the Borrower
will  promptly deliver such instrument to the Agent, endorsed  by
the  Borrower to the Agent in a manner satisfactory in  form  and
substance  to  the Agent.  Regardless of the form of presentment,
demand,  notice  of  protest with respect thereto,  the  Borrower
shall  remain  liable thereon until such instrument  is  paid  in
full.

          (d)   The  Borrower shall notify the Agent promptly  of
all  disputes and claims in excess of $100,000, individually,  or
$250,000  in  the aggregate with any single Account  Debtor,  and
agrees to settle, contest, or adjust such dispute or claim at  no
expense  to  the  Agent or any Lender.  No  discount,  credit  or
allowance shall be granted to any such Account Debtor without the
Agent's prior written consent, except for discounts, credits  and
allowances made or given in the ordinary course of the Borrower's
business when no Event of Default exists hereunder.  The Borrower
shall  send  the  Agent  a  copy of  each  credit  memorandum  or
adjustment in excess of $500,000 as soon as issued or made.   The
Agent may, and at the direction of the Majority Lenders shall, at
all  times  when an Event of Default exists hereunder, settle  or
adjust  disputes  and  claims directly with Account  Debtors  for
amounts  and upon terms which the Agent or the Majority  Lenders,
as  applicable, shall consider advisable and, in all  cases,  the
Agent  will credit the Borrower's Loan Account with only the  net
amounts received by the Agent in payment of any Accounts.

     6.9  Collection of Accounts; Payments.

          (a)   Until  the  Agent notifies the  Borrower  to  the
contrary, the Borrower shall make collection of all Accounts  and
other Collateral for the Agent, shall receive all payments as the
Agent's  trustee, and shall immediately deliver all  payments  in
their original form duly endorsed in blank into a Payment Account
established for the account of the Borrower at a bank  acceptable
to  Agent and subject to documentation acceptable to Agent.   All
funds  deposited into a Payment Account shall remain  subject  to
the control of the Borrower until such time as a Triggering Event
shall occur.  Upon the happening of a Triggering Event, all funds
deposited  into a Payment Account shall be wire transferred  each
day  to  the Agent for application against outstanding  Revolving
Loans.  In the event that a Triggering Event no longer exists for
a  period  of  ninety  (90) consecutive  days,  the  Agent  shall
instruct  the  bank  maintaining  a  Payment  Account  to   cease
transferring  funds  to  the Agent and to  resume  following  the
instructions  of  the  Borrower.   If  the  Agent  requests,  the
Borrower  shall  establish a lock-box service for collections  of
Accounts  at  a  bank  acceptable to the Agent  and  pursuant  to
documentation  satisfactory  to  the  Agent.   If  such  lock-box
service  is established, the Borrower shall instruct all  Account
Debtors  to make all payments directly to the address established
for  such  service.   If, notwithstanding such instructions,  the
Borrower receives any proceeds of Accounts, it shall receive such
payments  as  the Agent's trustee, and shall immediately  deliver
such  payments to the Agent in their original form duly  endorsed
in blank or deposit them into a Payment Account, as the Agent may
direct.  All collections received in any such lock-box or Payment
Account  or directly by the Borrower or the Agent, and all  funds
in any Payment Account or other account to which such collections
are  deposited shall be subject to the Agent's sole control.  The
Agent  or  the  Agent's designee may, at any time  following  the
occurrence  and during the continuance of any Event  of  Default,
notify  Account Debtors that the Accounts have been  assigned  to
the  Agent and of the Agent's security interest therein, and  may
collect  them  directly  and  charge  the  collection  costs  and
expenses to the Borrower's Loan Account as a Revolving Loan.   So
long  as an Event of Default has occurred and is continuing,  the
Borrower,  at the Agent's request, shall execute and  deliver  to
the  Agent such documents as the Agent shall require to grant the
Agent  access  to  any  post office box in which  collections  of
Accounts are received.

          (b)   If  sales of Inventory are made, or services  are
rendered, for cash, the Borrower shall immediately deliver to the
Agent  or  deposit  into a Payment Account  the  cash  which  the
Borrower receives.

          (c)   All  payments,  including  immediately  available
funds  received by the Agent at a bank designated by it, received
by  the  Agent  on  account of Accounts or as proceeds  of  other
Collateral will be the Agent's sole property for its benefit  and
the benefit of the Lenders and will be credited to the Borrower's
Loan Account (conditional upon final collection) immediately upon
receipt of such funds.

          (d)   In  the  event  the Borrower repays  all  of  the
Obligations  upon  the  termination of  this  Agreement  or  upon
acceleration of the Obligations, other than through  the  Agent's
receipt of payments on account of the Accounts or proceeds of the
other Collateral, such payment will be credited (conditional upon
final collection) to the Borrower's Loan Account immediately upon
receipt of collected funds.

     6.10 Equipment.

          (a)   The Borrower represents and warrants to the Agent
and  the  Lenders and agrees with the Agent and the Lenders  that
all of the Equipment owned by the Borrower is and will be used or
held  for use in the Borrower's business, and is and will be  fit
for  such  purposes.  The Borrower shall keep  and  maintain  its
Equipment  in good operating condition and repair (ordinary  wear
and  tear  excepted)  and  shall make all necessary  replacements
thereof.

          (b)   The  Borrower shall promptly inform the Agent  of
any  material additions to or deletions from the Equipment (other
than  Excluded  Property) and, as required by  Section  6.7,  all
additions to and deletions from Included Revenue Equipment.   The
Borrower  will  not, without the Agent's prior  written  consent,
alter  or  remove  any identifying manufacturers  serial  number,
vehicle identification number or similar symbol or number on  any
of the Borrower's Equipment consisting of Collateral.

          (c)   The Borrower shall not, without the Agent's prior
written consent, sell, lease as a lessor, or otherwise dispose of
any  of  the  Borrower's Equipment (other than  Excluded  Revenue
Equipment); provided, however, that the Borrower may  dispose  of
Included  Revenue Equipment as permitted by Section 6.10(d),  and
may dispose of obsolete or unusable Equipment other than Included
Revenue  Equipment which is obsolete or unusable and has  a  book
value  no greater than $1,000,000 in the aggregate in any  Fiscal
Year,  or  $3,000,000 in the aggregate during the  term  of  this
Agreement, without the Agent's consent, subject to the conditions
set  forth  in  the  next sentence.  In the  event  any  of  such
Equipment  other  than  Included  Revenue  Equipment   is   sold,
transferred  or  otherwise disposed of pursuant  to  the  proviso
contained  in  the immediately preceding sentence,  (1)  if  such
sale, transfer or disposition is effected without replacement  of
such Equipment, or such Equipment is replaced by Equipment leased
by the Borrower or by Equipment purchased by the Borrower subject
to  a  Lien, then the Borrower shall deliver all of the net  cash
proceeds of any such sale, transfer or disposition to the Payment
Account, or (2) if such sale, transfer or disposition is made  in
connection  with  the  purchase by the  Borrower  of  replacement
Equipment, then the Borrower shall use the proceeds of such sale,
transfer  or disposition to  purchase  such replacement Equipment
and shall deliver to the Agent written evidence of the use of the
proceeds  for such purchase.  All replacement Equipment purchased
by  the Borrower shall be free and clear of all Liens except  the
Agent's  Lien and Liens specified in clause (j) of the definition
of Permitted Liens.

          (d)   The Borrower shall not, without the Agent's prior
written consent, sell, lease as a lessor or otherwise dispose  of
any  Included Revenue Equipment; provided, however, that so  long
as  no  Event  of  Default has occurred and  is  continuing,  the
Borrower  may  dispose of Included Revenue  Equipment  having  an
orderly  liquidation  value no greater  than  $2,000,000  in  the
aggregate  in  any  month and no greater than $8,000,000  in  the
aggregate  in any Fiscal Year, if such dispositions are  made  in
the  ordinary  course of the Borrower's business  and  consistent
with the Borrower's past practice.  The net cash proceeds of such
dispositions  shall be delivered or used as provided  in  clauses
(1)  and  (2)  of  the  second sentence of  Section  6.10(c),  as
applicable.

     6.11  Assigned Contracts.  The Borrower shall fully  perform
all  of its obligations under each of the Assigned Contracts, and
shall  enforce  all of its rights and remedies thereunder  as  it
deems  appropriate  in its business judgment; provided,  however,
that  the Borrower shall not take any action or fail to take  any
action  with respect to its Assigned Contracts which would result
in  a waiver or other loss of any material right or remedy of the
Borrower  thereunder.   Without limiting the  generality  of  the
foregoing,  the  Borrower  shall take  all  action  necessary  or
appropriate to permit, and shall not take any action which  would
have any materially adverse effect upon, the full enforcement  of
all  indemnification  rights under its Assigned  Contracts.   The
Borrower shall not, without the Agent's and the Majority Lenders'
prior  written  consent,  modify, amend, supplement,  compromise,
satisfy, release, or discharge any of its Assigned Contracts, any
collateral  securing  the  same, any Person  liable  directly  or
indirectly with respect thereto, or any agreement relating to any
of  its  Assigned  Contracts or the collateral  therefor  if  any
modification  or  other action would materially adversely  affect
the  business,  operations or condition  of  the  Borrower.   The
Borrower  shall  notify  the Agent and the  Lenders  in  writing,
promptly  after the Borrower becomes aware thereof, of any  event
or   fact   which  could  give  rise  to  a  claim  by   it   for
indemnification  under any of its Assigned Contracts,  and  shall
diligently  pursue  such right and report to  the  Agent  on  all
further  developments with respect thereto.  The  Borrower  shall
remit  directly to the Payment Account, all amounts  received  by
the  Borrower  as  indemnification or otherwise pursuant  to  its
Assigned Contracts.  If the Borrower shall fail after the Agent's
demand   to  pursue  diligently  any  right  under  its  Assigned
Contracts, or if an Event of Default then exists, the Agent  may,
and  at  the  direction of the Majority Lenders  shall,  directly
enforce  such  right in its own or the Borrower's  name  and  may
enter  into  such  settlements or other agreements  with  respect
thereto  as  the  Agent or the Majority Lenders,  as  applicable,
shall  determine.  In any suit, proceeding or action  brought  by
the  Agent  for  the  benefit of the Lenders under  any  Assigned
Contract for any sum owing thereunder or to enforce any provision
thereof,  the  Borrower shall indemnify and hold  the  Agent  and
Lenders  harmless from and against all expense,  loss  or  damage
suffered   by  reason  of  any  defense,  setoff,  counterclaims,
recoupment,  or reduction of liability whatsoever of the  obligor
thereunder  arising  out  of a breach  by  the  Borrower  of  any
obligation  thereunder  or arising out of  any  other  agreement,
indebtedness or liability at any time owing from the Borrower  to
or  in  favor  of  such  obligor or  its  successors.   All  such
obligations of the Borrower shall be and remain enforceable  only
against  the  Borrower and shall not be enforceable  against  the
Agent.  Notwithstanding any provision hereof to the contrary, the
Borrower shall at all times remain liable to observe and  perform
all  of  its duties and obligations under its Assigned Contracts,
and  the  Agent's  or  any  Lender's exercise  of  any  of  their
respective  rights  with  respect to  the  Collateral  shall  not
release  the  Borrower from any of such duties  and  obligations.
Neither the Agent nor any Lender shall be obligated to perform or
fulfill  any  of the Borrower's duties or obligations  under  its
Assigned Contracts or to make any payment thereunder, or to  make
any  inquiry  as to the nature or sufficiency of any  payment  or
property  received  by  it  thereunder  or  the  sufficiency   of
performance  by any party thereunder, or to present or  file  any
claim,  or  to  take  any  action  to  collect  or  enforce   any
performance, any payment of any amounts, or any delivery  of  any
property.

     6.12   Documents,  Instruments,  and  Chattel  Paper.    The
Borrower  represents and warrants to the Agent  and  the  Lenders
that   (a)   all   documents,  instruments,  and  chattel   paper
describing,  evidencing,  or  constituting  Collateral,  and  all
signatures  and endorsements thereon, are and will  be  complete,
valid,  and  genuine to the best of the Borrower's  knowledge  or
except  as is disclosed to the Agent, and (b) all goods evidenced
by such documents, instruments, and chattel paper are and will be
owned  by  the Borrower, free and clear of all Liens  other  than
Permitted Liens.

     6.13  Right to Cure.  The Agent may, in its discretion,  and
shall,  at the direction of the Majority Lenders,  pay any amount
or  do  any  act required of the Borrower hereunder or under  any
other  Loan  Document in order to preserve, protect, maintain  or
enforce  the  Obligations, the Collateral or  the  Agent's  Liens
therein,  and  which the Borrower fails to pay or do,  including,
without limitation, payment of any judgment against the Borrower,
any  insurance  premium, any warehouse charge, any  finishing  or
processing charge, any landlord's claim, and any other Lien  upon
or  with respect to the Collateral.  All payments that the  Agent
makes  under  this Section 6.13 and all out-of-pocket  costs  and
expenses  that  the Agent pays or incurs in connection  with  any
action  taken by it hereunder shall be charged to the  Borrower's
Loan  Account  as a Revolving Loan .  Any payment made  or  other
action  taken  by  the  Agent under this Section  6.13  shall  be
without  prejudice  to any right to assert an  Event  of  Default
hereunder and to proceed thereafter as herein provided.

     6.14  Power  of Attorney.  The Borrower hereby appoints  the
Agent  and  the  Agent's designee as the Borrower's  attorney  in
fact,  with  power:  (a) to endorse the Borrower's  name  on  any
checks,  notes,  acceptances, money orders,  or  other  forms  of
payment  or  security that come into the Agent's or any  Lender's
possession; (b) to sign the Borrower's name on any invoice,  bill
of  lading, warehouse receipt or other document of title relating
to any Collateral, on drafts against customers, on assignments of
Accounts,  on  notices  of assignment, financing  statements  and
other  public  records; (c) so long as any Event of  Default  has
occurred and is continuing, to notify the post office authorities
to  change the address for delivery of the Borrower's mail to  an
address  designated by the Agent and to receive, open and dispose
of  all mail addressed to the Borrower; (d) to send requests  for
verification   of  Accounts  to  customers  or  Account   Debtors
according  to  the Agent's usual procedures; and (e)  to  do  all
things  necessary  to  carry out this  Agreement.   The  Borrower
ratifies  and approves all acts of such attorney.   None  of  the
Lenders  or the Agent nor their attorneys will be liable for  any
acts or omissions or for any error of judgment or mistake of fact
or   law.   This  power,  being  coupled  with  an  interest,  is
irrevocable  until  this Agreement has been  terminated  and  the
Obligations  (other than Surviving Indemnities) have  been  fully
satisfied.

     6.15   The   Agent's   and  Lenders'  Rights,   Duties   and
Liabilities.    The  Borrower  assumes  all  responsibility   and
liability  arising  from or relating to the use,  sale  or  other
disposition  of  the  Collateral.  Neither  the  Agent,  nor  any
Lender,   nor  any  of  their  respective  officers,   directors,
employees or agents shall be liable or responsible in any way for
the  safekeeping  of any of the Collateral, or for  any  loss  or
damage  thereto, or for any diminution in the value  thereof,  or
for  any  act of default of any warehouseman, carrier, forwarding
agency  or other person whomsoever, all of which shall be at  the
Borrower's  sole risk.  The Obligations shall not be affected  by
any  failure  of  the Agent or any Lender to take  any  steps  to
perfect  the  Agent's  Liens or to collect or  realize  upon  the
Collateral, nor shall loss of or damage to the Collateral release
the  Borrower from any of the Obligations.  So long as any  Event
of  Default shall have occurred and be continuing, the Agent  may
(but  shall  not  be required to), and at the  direction  of  the
Majority  Lenders  shall, without notice to or consent  from  the
Borrower,  sue  upon or otherwise collect, extend  the  time  for
payment  of, modify or amend the terms of, compromise  or  settle
for  cash,  credit,  or  otherwise upon any  terms,  grant  other
indulgences, extensions, renewals, compositions, or releases, and
take  or  omit  to  take any other action  with  respect  to  the
Collateral,   any  security  therefor,  any  agreement   relating
thereto,  any insurance applicable thereto, or any Person  liable
directly  or indirectly in connection with any of the  foregoing,
without discharging or otherwise affecting the liability  of  the
Borrower for the Obligations or under this Agreement or any other
agreement now or hereafter existing between the Agent and/or  any
Lender  and  the Borrower, except to the extent that  Obligations
are paid as a result of any such action.

     ARTICLE 7


        BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

     7.1  Books and Records.  The Borrower shall maintain, at all
times, correct and complete books, records and accounts in  which
complete, correct and timely entries are made of its transactions
in  accordance  with GAAP applied consistently with  the  audited
Financial  Statements  required  to  be  delivered  pursuant   to
Section  7.2(a).   The  Borrower shall, by means  of  appropriate
entries, reflect in such accounts and in all Financial Statements
proper   liabilities  and  reserves  for  all  taxes  and  proper
provision for depreciation and amortization of property  and  bad
debts,  all in accordance with GAAP.  The Borrower shall maintain
at  all  times books and records pertaining to the Collateral  in
such  detail,  form and scope as the Agent or  any  Lender  shall
reasonably  require, including, but not limited  to,  records  of
(a)  all payments received and all credits and extensions granted
with  respect  to  the  Accounts;  (b)  the  return,  rejections,
repossession,  stoppage in transit, loss, damage, or  destruction
of  any  Inventory;  and  (c) all other  dealings  affecting  the
Collateral.

     7.2   Financial  Information.  The Borrower  shall  promptly
furnish  to  the Agent, in sufficient copies for distribution  by
the  Agent to each Lender, all such financial information as  the
Agent  or  any  Lender shall reasonably request, and  notify  its
auditors  and  accountants  that the  Agent,  on  behalf  of  the
Lenders,  is authorized to obtain such information directly  from
them.   Without limiting the foregoing, the Borrower will furnish
to  the Agent, in sufficient copies for distribution by the Agent
to  each Lender, in such detail as the Agent or the Lenders shall
request, the following:

          (a)   As soon as available, but in any event not  later
than one hundred twenty (120) days after the close of each Fiscal
Year,  consolidated audited and consolidating  unaudited  balance
sheets,  statements  of income and expense,  cash  flows  and  of
stockholders'  equity  for the Parent,  the  Borrower  and  their
Subsidiaries  for  such Fiscal Year, and the  accompanying  notes
thereto,  setting forth in each case in comparative form  figures
for  the  previous Fiscal Year, all in reasonable detail,  fairly
presenting  the financial position and the results of  operations
of the Parent, the Borrower and their Subsidiaries as at the date
thereof  and  for  the Fiscal Year then ended,  and  prepared  in
accordance  with  GAAP.  Such statements  shall  be  examined  in
accordance with generally accepted auditing standards by and,  in
the  case  of such statements performed on a consolidated  basis,
accompanied  by  a  report thereon unqualified  as  to  scope  of
independent certified public accountants selected by the Borrower
and   reasonably  satisfactory  to  the  Agent.   The   Borrower,
simultaneously with retaining such independent public accountants
to  conduct  such  annual audit, shall  send  a  letter  to  such
accountants, with a copy to the Agent and the Lenders,  notifying
such  accountants that one of the primary purposes for  retaining
such   accountants'   services  and  having   audited   financial
statements  prepared  by them is for use by  the  Agent  and  the
Lenders.

          (b)   As soon as available, but in any event not  later
than  thirty (30) days after the end of each month (other than  a
month  which  is  the  end  of  a fiscal  quarter),  consolidated
unaudited  balance sheets of the Parent, the Borrower  and  their
Subsidiaries  as  at  the  end of such  month,  and  consolidated
unaudited statements of income and expense and cash flows for the
Parent,  the Borrower and their Subsidiaries for such  month  and
for  the period from the beginning of the Fiscal Year to the  end
of  such  month, all in reasonable detail, fairly presenting  the
financial  position and results of operations of the Parent,  the
Borrower  and  their consolidated Subsidiaries  as  at  the  date
thereof  and  for  such periods, and prepared in accordance  with
GAAP  applied consistently with the audited Financial  Statements
required  to  be  delivered  pursuant  to  Section  7.2(a).   The
Borrower  shall  certify by a certificate  signed  by  its  chief
financial officer that all such statements have been prepared  in
accordance with GAAP and present fairly, subject to normal  year-
end  adjustments,  the Borrower's financial position  as  at  the
dates thereof and its results of operations for the periods  then
ended.   With respect to the last month of each Fiscal Year,  the
consolidated  financial  information described  in  this  Section
7.2(b) shall be provided on a preliminary basis and in draft form
not later than sixty (60) days after the close of such month.

          (c)   As soon as available, but in any event not  later
than  forty-five (45) days after the close of each fiscal quarter
other than the fourth quarter of a Fiscal Year, consolidated  and
consolidating  unaudited  balance  sheets  of  the  Parent,   the
Borrower  and  their Subsidiaries as at the end of such  quarter,
and consolidated and consolidating unaudited statements of income
and  expense  and  statement of cash flows for  the  Parent,  the
Borrower  and  their Subsidiaries for such quarter  and  for  the
period  from the beginning of the Fiscal Year to the end of  such
quarter,   all  in  reasonable  detail,  fairly  presenting   the
financial  position and results of operation of the  Parent,  the
Borrower  and their Subsidiaries as at the date thereof  and  for
such  periods,  prepared in accordance with GAAP consistent  with
the   audited  Financial  Statements  required  to  be  delivered
pursuant  to  Section 7.2(a).  The Borrower shall  certify  by  a
certificate signed by its chief financial officer that  all  such
statements have been prepared in accordance with GAAP and present
fairly,  subject to normal year-end adjustments,  the  Borrower's
financial  position as at the dates thereof and  its  results  of
operations for the periods then ended.

          (d)   With  each  of  the audited Financial  Statements
delivered  pursuant  to  Section 7.2(a),  a  certificate  of  the
independent  certified  public  accountants  that  examined  such
statement to the effect that they have reviewed and are  familiar
with  this  Agreement  and  that,  in  examining  such  Financial
Statements,  they did not become aware of any fact  or  condition
which  at  the time of such examination constituted a Default  or
Event  of  Default,  except  for  those,  if  any,  described  in
reasonable detail in such certificate.

          (e)    With   each  of  the  annual  audited  Financial
Statements delivered pursuant to Section 7.2(a), and within forty-
five  (45)  days after the end of each of the first three  fiscal
quarters,  a  certificate of the chief financial officer  of  the
Borrower  (i) setting forth in reasonable detail the calculations
required  to  establish that the Borrower was in compliance  with
the  covenants set forth in Sections 9.21 through 9.24 during the
period  covered in such Financial Statements and as  at  the  end
thereof, and (ii) stating that, except as explained in reasonable
detail  in  such certificate, (A) all of the representations  and
warranties  of the Borrower contained in this Agreement  and  the
other  Loan  Documents are correct and complete in  all  material
respects  as at the date of such certificate as if made  at  such
time,  (B)  the Borrower is, at the date of such certificate,  in
compliance  in  all material respects with all of its  respective
covenants  and  agreements in this Agreement and the  other  Loan
Documents,  (C)  no Default or Event of Default  then  exists  or
existed  during the period covered by such Financial  Statements,
(D) describing in reasonable detail all material trends, changes,
and  developments  in  each  and all  Financial  Statements;  and
(E)  describing the variances of the figures in the corresponding
budgets  and  prior  Fiscal Year financial statements.   If  such
certificate  discloses that a representation or warranty  is  not
correct  or  complete, or that a covenant has not  been  complied
with,  or  that a Default or Event of Default existed or  exists,
such  certificate  shall set forth what action the  Borrower  has
taken or proposes to take with respect thereto.

          (f)   No sooner than 60 days and not less than 30  days
prior to the beginning of each Fiscal Year, annual forecasts  (to
include  forecasted  consolidated balance sheets,  statements  of
income  and expenses and statements of cash flow) for the Parent,
the Borrower and their Subsidiaries as at the end of and for each
quarter   of  such  Fiscal  Year;  provided,  that  each   Lender
acknowledges  that,  as  of  the date  of  this  Agreement,  such
requirement has been satisfied with respect to Fiscal Year 1997.

          (g)  Promptly after filing with the PBGC and the IRS, a
copy of each annual report or other filing filed with respect  to
each Plan of the Borrower.

          (h)   Promptly upon receipt thereof by the Borrower,  a
copy  of  each actuarial report received by the Borrower from  an
outside Person concerning any Pension Plan.

          (i)   Promptly  after receipt of actuarial  information
relating  to any Multi-Employer Plan reflecting a change  in  the
amount  of the Unfunded Pension Liability of the Borrower, notice
of  the  aggregate  amount of Unfunded Pension Liability  of  the
Borrower.

          (j)   Promptly upon the filing thereof, copies  of  all
reports,  if any, to or other documents filed by the Parent,  the
Borrower  or  any of their Subsidiaries with the  Securities  and
Exchange  Commission  under the Exchange Act,  and  all  reports,
notices,  or  statements  sent or received  by  the  Parent,  the
Borrower  or any of their Subsidiaries to or from the holders  of
any  equity  interests  of the Parent, the Borrower  (other  than
routine non-material correspondence sent by shareholders  of  the
Parent  to the Parent) or of any Debt for borrowed money  of  the
Parent,  the  Borrower  or  any of their Subsidiaries  registered
under  the Securities Act of 1933 or to or from the trustee under
any indenture under which the same is issued.

          (k)   As soon as available, but in any event not  later
than  15  days  after  the  Parent's or  the  Borrower's  receipt
thereof, a copy of all management reports and management  letters
prepared  for  the  Parent  or  the  Borrower  or  any  of  their
Subsidiaries  by the independent certified public accountants  of
the Parent or the Borrower.

          (l)   Promptly after their preparation, copies  of  any
and all proxy statements, financial statements, and reports which
the Parent makes available to its shareholders.

          (m)  Promptly after filing with the IRS, a copy of each
income tax return filed by the Parent, the Borrower or by any  of
their Subsidiaries.

          (n)   Such  additional information as the Agent  and/or
any Lender may from time to time reasonably request regarding the
financial and business affairs of the Parent, the Borrower or any
of their Subsidiaries.

     7.3   Notices to the Lenders.  The Borrower shall notify the
Agent,  and,  with respect to matters described in  clauses  (a),
(c),  (d),  (e), (f) and (g), shall also notify each  Lender,  in
writing of the following matters at the following times:

          (a)   Promptly after becoming aware of any  Default  or
Event of Default.

          (b)  Promptly after becoming aware of the assertion  by
the  holder of any capital stock of any Loan Party or of any Debt
of  any  Loan  Party of $5,000,000 or more that a default  exists
with respect thereto or that such Loan Party is not in compliance
with  the  terms thereof, or the threat or commencement  by  such
holder of any enforcement action because of such asserted default
or non-compliance.

          (c)   Promptly  after becoming aware  of  any  material
adverse   change  in  the  property,  business,  operations,   or
condition  (financial  or  otherwise)  of  the  Parent  and   its
Subsidiaries taken as a whole.

          (d)   Promptly after becoming aware of any  pending  or
threatened  action,  suit, proceeding,  or  counterclaim  by  any
Person,  or  any  pending  or  threatened  investigation   by   a
Governmental Authority, which may materially and adversely affect
the Collateral, the repayment of the Obligations, the Agent's  or
any  Lender's  rights under the Loan Documents, or the  property,
business, operations, or condition (financial or otherwise) of  a
Loan Party.

          (e)   Promptly after becoming aware of any  pending  or
threatened strike, work stoppage, unfair labor practice claim, or
other labor dispute affecting the Parent, the Borrower or any  of
their Subsidiaries in a manner which could reasonably be expected
to have a Material Adverse Effect.

          (f)  Promptly after becoming aware of any violation  of
any  law,  statute,  regulation, or ordinance of  a  Governmental
Authority  affecting the Parent, the Borrower  or  any  of  their
Subsidiaries  which  could  reasonably  be  expected  to  have  a
Material Adverse Effect.

          (g)   Promptly  after  receipt of  any  notice  of  any
violation   by  the  Parent,  the  Borrower  or  any   of   their
Subsidiaries  of any Environmental Law which could reasonably  be
expected   to  have  a  Material  Adverse  Affect  or  that   any
Governmental Authority has asserted that the Parent, the Borrower
or  any  of  their  Subsidiaries is not in  compliance  with  any
Environmental  Law  or is investigating such Person's  compliance
therewith.

          (h)   Promptly after receipt of any written notice that
the  Parent, the Borrower or any of their Subsidiaries is or  may
be  liable to any Person as a result of the Release or threatened
Release  of  any Contaminant or that the Parent, the Borrower  or
any  of  their  Subsidiaries is subject to investigation  by  any
Governmental Authority evaluating whether any remedial action  is
needed  to  respond to the Release or threatened Release  of  any
Contaminant which, in any case, is reasonably likely to give rise
to liability in excess of $5,000,000.

          (i)   Promptly after receipt of any written  notice  of
the imposition of any Environmental Lien against any Property  of
the Parent, the Borrower or any of their Subsidiaries.

          (j)   Any  change  in  the Borrower's  name,  state  of
incorporation,  or form of organization, trade  names  or  styles
under  which  the  Borrower will create  Accounts,  or  to  which
instruments in payment of Accounts may be made payable and,  with
respect  to  any  jurisdiction where the filing  of  a  financing
statement  with  the  Secretary of State (or  comparable  central
filing  location) of such jurisdiction would be  insufficient  to
perfect  the  security interest of the Agent  in  the  Collateral
located  in  such  jurisdiction if there is  only  one  place  of
business  in  such jurisdiction, notice of any reduction  in  the
number  of  places  of  business in  such  jurisdiction  if  such
reduction  results  in three or fewer places of  business  within
such  jurisdiction, in each case at least thirty (30) days  prior
thereto (except that, in the case of any change in trade names or
styles, notice shall be sufficient if given at any time prior  to
such change).

          (k)   Within  ten (10) Business Days after the  Parent,
the  Borrower or any ERISA Affiliate knows or has reason to know,
that  an  ERISA  Event or a nonexempt prohibited transaction  (as
defined  in  Sections  406 of ERISA and 4975  of  the  Code)  has
occurred, and, when known, any action taken or threatened by  the
IRS, the DOL or the PBGC with respect thereto.

          (l)   Upon  request, or, in the event that such  filing
reflects a significant change with respect to the matters covered
thereby,  within ten (10) Business Days after the filing  thereof
with the PBGC, the DOL or the IRS, as applicable, or, in the case
of  a  Multi-Employer Plan, within ten (10) Business  Days  after
receipt thereof by the Borrower or any ERISA Affiliate, copies of
the  following:   (i)  each  annual report  (form  5500  series),
including Schedule B thereto, filed with the PBGC, the DOL or the
IRS with respect to each Plan, (ii) a copy of each funding waiver
request  filed with the PBGC, the DOL or the IRS with respect  to
any  Plan  and  all communications received by  the  Parent,  the
Borrower or any ERISA Affiliate from the PBGC, the DOL or the IRS
with  respect  to such request, and (iii) a copy  of  each  other
filing  or  notice filed with the PBGC, the DOL or the IRS,  with
respect  to each Plan of either the Parent, the Borrower  or  any
ERISA Affiliate.

          (m)   Upon request, copies of each actuarial report for
any  Plan or Multi-employer Plan and annual report for any Multi-
employer  Plan; and within ten  (10) Business Days after  receipt
thereof  by  the  Parent, the Borrower or  any  ERISA  Affiliate,
copies of the following:  (i) any notices of the PBGC's intention
to  terminate a Plan or to have a trustee appointed to administer
such Plan; (ii) any favorable or unfavorable determination letter
from  the  IRS  regarding  the  qualification  of  a  Plan  under
Section  401(a) of the Code; or (iii) any notice  from  a  Multi-
employer Plan regarding the imposition of withdrawal liability.

          (n)   Within ten (10) Business Days upon the occurrence
thereof:  (i)  any changes in the benefits of any existing  Plan,
the  establishment  of  any  new  Plan  or  the  commencement  of
contributions  to any Plan to which the Parent, the  Borrower  or
any   ERISA  Affiliate  was  not  previously  contributing  which
increase the Borrower's annual costs with respect thereto  by  an
amount  in  excess  of $5,000,000; or (ii)  any  failure  by  the
Parent,  the Borrower or any ERISA Affiliate to make  a  required
installment  or any other required payment under Section  412  of
the  Code  on  or  before the due date for  such  installment  or
payment.

          (o)   Within  ten (10) Business Days after the  Parent,
the  Borrower or any ERISA Affiliate knows or has reason to  know
that any of the following events has or will occur:  (i) a Multi-
employer   Plan  has  been  or  will  be  terminated;  (ii)   the
administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted
or  will  institute proceedings under Section 4042  of  ERISA  to
terminate a Multi-employer Plan.

          (p)  Promptly after becoming aware of the occurrence of
any strike by employees of a Loan Party.

Each  notice given under this Section shall describe the  subject
matter  thereof  in reasonable detail, and shall  set  forth  the
action  that the Parent, the Borrower, any of their Subsidiaries,
or  any ERISA Affiliate, as applicable, has taken or proposes  to
take  with respect thereto.  To the extent that such notices  are
required to be given upon a Person becoming aware of an indicated
matter  or  upon  a  Person's receipt of an  indicated  or  other
communication,  such Person shall be a Responsible  Officer,  any
comparable officer of the Parent, or any senior vice president or
any executive vice president of the Parent or the Borrower.

                            ARTICLE 8

             GENERAL WARRANTIES AND REPRESENTATIONS

          Each  Loan  Party warrants and represents to the  Agent
and  the  Lenders  that  except as  hereafter  disclosed  to  and
accepted by the Agent and the Majority Lenders in writing:

     8.1   Authorization,  Validity, and Enforceability  of  this
Agreement  and  the  Loan Documents.  Each  Loan  Party  has  the
corporate  power  and authority to execute, deliver  and  perform
this  Agreement and the other Loan Documents, and in the case  of
the  Borrower to incur the Obligations, and to grant to the Agent
Liens  upon and security interests in the Collateral.  Each  Loan
Party has taken all necessary corporate action (including without
limitation, obtaining approval of its stockholders if  necessary)
to  authorize  its execution, delivery, and performance  of  this
Agreement and the other Loan Documents.  No consent, approval, or
authorization of, or declaration or filing with, any Governmental
Authority,  and  no consent of any other Person, is  required  in
connection  with  the each Loan Party's execution,  delivery  and
performance  of  this  Agreement and the  other  Loan  Documents,
except for those already duly obtained.   This Agreement and  the
other  Loan  Documents have been duly executed and  delivered  by
each  Loan  Party,  and constitute its legal, valid  and  binding
obligations  enforceable  against it  in  accordance  with  their
respective  terms without defense, setoff or counterclaim.   Each
Loan   Party's  execution,  delivery,  and  performance  of  this
Agreement  and  the  other Loan Documents do  not  and  will  not
conflict  with,  or  constitute a  violation  or  breach  of,  or
constitute  a  default  under,  or  result  in  the  creation  or
imposition  of any Lien upon the Property of such Loan  Party  or
any  of  its  Subsidiaries by reason of  the  terms  of  (a)  any
contract,  mortgage, Lien (other than the Agent's  Lien),  lease,
agreement, indenture, or instrument to which such Loan Party is a
party  or  which is binding upon it, (b) any Requirement  of  Law
applicable to such Loan Party or any of its Subsidiaries, or  (c)
the  certificate or articles of incorporation or by-laws of  such
Loan Party or any of its Subsidiaries.

     8.2   Validity  and  Priority  of  Security  Interest.   The
provisions of this Agreement and the other Loan Documents  create
legal  and  valid  Liens on all the Collateral in  favor  of  the
Agent,  for  the ratable benefit of the Lenders, and  such  Liens
constitute  perfected and continuing Liens on all the Collateral,
having  priority  over all other Liens on the  Collateral  (other
than  Liens specified in clauses (e) or (j) of the term Permitted
Liens), securing all the Obligations, and enforceable against the
Borrower  (and other Loan Parties as to Loan Documents  to  which
they are parties) and all third parties.

     8.3  Organization and Qualification.  Each Loan Party (a) is
duly  incorporated  and organized and validly  existing  in  good
standing under the laws of the state of its incorporation, (b) is
qualified to do business as a foreign corporation and is in  good
standing in the jurisdictions set forth on Schedule 8.3 which are
the  only  jurisdictions in which qualification is  necessary  in
order  for  it  to  own  or lease its property  and  conduct  its
business and (c) has all requisite power and authority to conduct
its business and to own its property.

     8.4   Corporate Name; Prior Transactions.  During  the  five
(5) year period ending on the Closing Date, no Loan Party has not
been known by or used any other corporate or fictitious name,  or
been  a party to any merger or consolidation, or acquired all  or
substantially all of the assets of any Person, or acquired any of
its property outside of the ordinary course of business.

     8.5  Subsidiaries and Affiliates.  Schedule 8.5 is a correct
and  complete  list  of  the name and relationship  to  the  Loan
Parties  of  each  and  all  of  their  Subsidiaries  and   other
Affiliates.   Each  such Subsidiary is (a) duly incorporated  and
organized and validly existing in good standing under the laws of
its  state  of  incorporation  set forth  on  Schedule  8.5,  and
(b) qualified to do business as a foreign corporation and in good
standing in each jurisdiction in which the failure to so  qualify
or  be  in good standing could reasonably be expected to  have  a
material  adverse  effect  on  any  such  Subsidiary's  business,
operations,  prospects,  property,  or  condition  (financial  or
otherwise)  and  (c)  has all requisite power  and  authority  to
conduct its business and own its property.

     8.6  Financial Statements and Projections.

          (a)   The  Borrower has delivered to the Agent and  the
Lenders  the  audited  balance sheet and  related  statements  of
income,   retained   earnings,  cash  flows,   and   changes   in
stockholders equity for the Borrower and its Subsidiaries  as  of
December   31,  1995,  and  for  the  Fiscal  Year  then   ended,
accompanied  by the report thereon of the Borrower's  independent
certified public accountants, Arthur Andersen LLP.  The  Borrower
has  also  delivered to the Agent and the Lenders the  internally
prepared unaudited balance sheet and related statements of income
and cash flows for the Borrower and its Subsidiaries as of August
31,  1996.   Such  financial statements are  attached  hereto  as
Exhibit F.

          (b)   The  Latest  Projections when  submitted  to  the
Lenders as required herein represent the Borrower's best estimate
of  the  future  financial performance of the  Borrower  and  its
consolidated Subsidiaries for the periods set forth therein.  The
Latest  Projections  have  been prepared  on  the  basis  of  the
assumptions  set forth therein, which the Borrower  believes  are
fair   and   reasonable  in  light  of  current  and   reasonably
foreseeable  business  conditions at the time  submitted  to  the
Lender.

          (c)   The pro forma consolidated balance sheet  of  the
Parent, the Borrower and their Subsidiaries as at June 30,  1996,
as  described  in  Form 10 presents fairly and  accurately  their
consolidated  financial condition as at such  date  assuming  the
transactions  contemplated  by  the  Transition  Agreements   had
occurred on such date and the Initial Funding Date had been  such
date, and has been prepared in accordance with GAAP.

     8.7   Capitalization.  As of the date of this Agreement, the
Borrower's  authorized  capitalized  stock  consists  of  100,000
shares  of  common stock, par value $10.00 per  share,  of  which
100,000 shares are validly issued and outstanding, fully paid and
non-assessable.

     8.8   Solvency.  The Borrower is Solvent prior to and  after
giving effect to the making of the Revolving Loans to be made  on
the  Initial  Funding Date and the issuance  of  the  Letters  of
Credit to be issued on the Initial Funding Date, and shall remain
Solvent during the term of this Agreement.

     8.9   Debt.   After  giving effect  to  the  making  of  the
Revolving Loans to be made on the Initial Funding Date, the  Loan
Parties  and  their  Subsidiaries have no Debt,  except  (a)  the
Obligations,  (b) Debt described on Schedule 8.9, and  (c)  trade
payables  and  other  contractual  obligations  arising  in   the
ordinary course of business.

     8.10 Restricted Payments.  From June 30, 1996 to the Closing
Date, no Restricted Payments were declared, paid, or made upon or
in respect of any capital stock or other securities of the Parent
or any of its Subsidiaries.

     8.11   Title   to  Property.   Except  as   set   forth   on
Schedule 8.12 hereto, the Borrower has good and marketable  title
in  fee  simple to its Real Estate listed in Schedule  8.12,  and
each of the Loan Parties has good, indefeasible, and merchantable
title to all of its Property (including, without limitation,  the
assets  reflected  on  the August 31, 1996  Financial  Statements
delivered to the Agent and the Lenders, except as disposed of  in
the ordinary course of business since the date thereof), free  of
all Liens except Permitted Liens.

     8.12  Real Estate; Leases.  Schedule 8.12 sets forth  as  of
the  date  of this Agreement a correct and complete list  of  all
Real Estate owned in fee simple by any Loan Party, all leases and
subleases  of  real  or personal property by any  Loan  Party  as
lessee or sublessee (other than leases of personal property as to
which  each Loan Party is lessee or sublessee for which the value
of  such personal property is less than $250,000 individually  or
$5,000,000 in the aggregate).

     8.13 Proprietary Rights.  Schedule 8.13 sets forth a correct
and  complete list of all of the Proprietary Rights of each  Loan
Party as of the date hereof.  None of such Proprietary Rights  is
subject to any licensing agreement or similar arrangement  except
as set forth on Schedule 8.13.  To the best knowledge of the Loan
Parties, none of the Proprietary Rights infringes on or conflicts
with  any  other Person's rights, and no other Person's  property
infringes  on  or  conflicts with the  Proprietary  Rights.   The
Proprietary Rights described on Schedule 8.13 constitute  all  of
the  software,  data, documentation, advertising and  promotional
materials,  and other Proprietary Rights reasonably necessary  or
useful to the current and anticipated future conduct of each Loan
Party's business and upon Default the Agent or its designee shall
be entitled to use and exercise all such property and Proprietary
Rights.   The  Former  Parent and the Parent  have  entered  into
valid,  binding,  and  enforceable  agreements  transferring,  or
licensing for a period ending not prior to the Stated Termination
Date, to the Borrower all Proprietary Rights reasonably necessary
or useful to the conduct of the Borrower's business.

     8.14  Trade  Names and Terms of Sale.  All  trade  names  or
styles  under which the Borrower or any of its Subsidiaries  will
create  Accounts, or to which instruments in payment of  Accounts
may be made payable, are listed on Schedule 8.14.

     8.15  Litigation.   Except as set forth  on  Schedule  8.15,
there  is  no  pending  or  (to the best  of  the  Loan  Parties'
knowledge)  threatened, action, suit, proceeding, or counterclaim
by any Person, or investigation by any Governmental Authority, or
any  basis  for  any of the foregoing, which could reasonably  be
expected to cause a Material Adverse Effect.

     8.16  Restrictive Agreements.  None of the Loan Parties  nor
any  of  their  Subsidiaries  is  a  party  to  any  contract  or
agreement,   or  subject  to  any  charter  or  other   corporate
restriction,  which affects its ability to execute, deliver,  and
perform  the  Loan Documents and repay the Obligations  or  which
materially and adversely affects or, insofar as the Loan  Parties
can  reasonably  foresee, could materially and adversely  affect,
the  property,  business, operations, or condition (financial  or
otherwise)  of the Loan Parties or any of their Subsidiaries,  or
would in any respect cause a Material Adverse Effect.

     8.17  Labor Disputes.  Except as set forth on Schedule 8.17,
(a)  there  is no collective bargaining agreement or other  labor
contract covering employees of any of the Loan Parties or any  of
their  Subsidiaries, (b) no such collective bargaining  agreement
or other labor contract is scheduled to expire during the term of
this  Agreement,  (c)  no union or other  labor  organization  is
seeking  to  organize,  or  to  be recognized  as,  a  collective
bargaining  unit of employees of any Loan Party  or  any  of  its
Subsidiaries  or  for any similar purpose, and (d)  there  is  no
pending   or  (to  the  best  of  the  Loan  Parties'  knowledge)
threatened, strike, work stoppage, material unfair labor practice
claim,  or other material labor dispute against or affecting  any
Loan Party or its Subsidiaries or their employees.

     8.18  Environmental Laws.  Except as otherwise disclosed  on
Schedule  8.18  or  in  the  report entitled  "CFMF  Real  Estate
Environmental Report" and dated April 8, 1996:

          (a)   Each  Loan  Party has complied  in  all  material
respects  with  all Environmental Laws applicable to  their  Real
Estate  and business, and no Loan Party nor any of their  present
Real Estate or operations, nor their past property or operations,
is  subject to any enforcement order from or liability  agreement
with  any  Governmental  Authority or private  Person  respecting
(i)  material  non-compliance  with  any  Environmental  Law   or
(ii)  any  potential material liabilities and costs  or  remedial
action  arising  from  the  Release or threatened  Release  of  a
Contaminant.

          (b)   Each Loan Party has obtained all material permits
necessary for their current operations under Environmental  Laws,
and all such permits are in good standing and each Loan Party  is
in  material  compliance with all terms and  conditions  of  such
permits.

          (c)  No Loan Party nor, to the best of their knowledge,
any  of their predecessors in interest, has in material violation
of  any  Environmental Laws stored, treated or  disposed  of  any
hazardous waste on any Real Estate, as defined pursuant to 40 CFR
Part 261 or any equivalent Environmental Law.

          (d)  No Loan Party has received any summons, complaint,
order  or similar written notice that it is currently in material
non-compliance  with,  or  that  any  Governmental  Authority  is
investigating its material non-compliance with, any Environmental
Laws  or  that  it is or may be materially liable  to  any  other
Person  as  a  result  of a Release or threatened  Release  of  a
Contaminant.

          (e)  None of the present or past operations of any Loan
Party  is  currently  the  subject of any  investigation  by  any
Governmental  Authority evaluating whether any material  remedial
action is needed to respond to a Release or threatened Release of
a Contaminant.

          (f)  There is not as of the date of this Agreement, nor
to the best knowledge of any Loan Party has there ever been on or
in any Real Estate:

               (1)   any  underground storage  tanks  or  surface
impoundments,

               (2)  any asbestos-containing material, or

               (3)  any polychlorinated biphenyls (PCB's) used in
hydraulic oils, electrical transformers or other equipment.

          (g)   No  Loan  Party has filed any  notice  under  any
requirement  of Environmental Law reporting a material  spill  or
material  accidental and unpermitted release or  discharge  of  a
Contaminant into the environment.

          (h)  No Loan Party has entered into any negotiations or
settlement   agreements  with  any  Person  (including,   without
limitation,  the  prior owner of its property) imposing  material
obligations or liabilities on any Loan Party with respect to  any
remedial  action in response to the Release of a  Contaminant  or
environmentally related claim.

          (i)  None of the products manufactured, distributed  or
sold by any Loan Party contain asbestos containing material.

          (j)   No  Environmental Lien has attached to  any  Real
Estate of any Loan Party.

     8.19  No Violation of Law.  Neither the Parent, the Borrower
nor  any  of  their  Subsidiaries is in  violation  of  any  law,
statute,  regulation,  ordinance,  judgment,  order,  or   decree
applicable to it which violation could reasonably be expected  to
have a Material Adverse Effect.

     8.20  No Default.  Neither the Parent, the Borrower nor  any
of  their  Subsidiaries is in default with respect to  any  note,
indenture,  loan  agreement,  mortgage,  lease,  deed,  or  other
agreement  to  which the Parent, the Borrower  or  any  of  their
Subsidiaries  is a party or by which it is bound,  which  default
could reasonably be expected to have a Material Adverse Effect.

     8.21 ERISA Compliance.

          (a)   As  of  the  date of the most recent  information
received by the Borrower prior to the date of this Agreement, the
aggregate  amount of Unfunded Pension Liability among all  Multi-
employer  Plans  to which the Loan Parties may be  liable  (based
generally on figures for 1994) was calculated to be approximately
$153,000,000.

          (b)  Except as specifically disclosed in Schedule 8.21:

               (i)   Each  Plan is in compliance in all  material
respects  with the applicable provisions of ERISA, the  Code  and
other  federal  or  state law.  Each Plan which  is  intended  to
qualify under Section 401(a) of the Code has received a favorable
determination  letter from the IRS, or will be submitted  to  the
IRS  for  a  determination letter before the end of its  remedial
amendment period, and to the best knowledge of the Loan  Parties,
nothing  has  occurred  which  would  cause  the  loss  of   such
qualification.   The  Loan Parties and each ERISA  Affiliate  has
made   all   required  contributions  to  any  Plan  subject   to
Section 412 of the Code, and no application for a funding  waiver
or   an   extension  of  any  amortization  period  pursuant   to
Section 412 of the Code has been made with respect to any Plan.

               (ii)   There  are  no  pending  or,  to  the  best
knowledge  of  the  Loan Parties, threatened claims,  actions  or
lawsuits,  or action by any Governmental Authority, with  respect
to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.  There has been no nonexempt
prohibited   transaction   or   violation   of   the    fiduciary
responsibility rules with respect to any Plan which has  resulted
or  could reasonably be expected to result in a Material  Adverse
Effect.

               (iii)      (A) No ERISA Event has occurred  or  is
reasonably expected to occur; (B) no Pension Plan that is  not  a
Multi-employer   Plan   has  any  Unfunded   Pension   Liability;
(C)  neither any Loan Party nor any ERISA Affiliate has incurred,
or  reasonably expects to incur, any liability under Title IV  of
ERISA  with respect to any Pension Plan (other than premiums  due
and  not delinquent under Section 4007 of ERISA); (D) neither any
Loan  Party  nor any ERISA Affiliate has incurred, or  reasonably
expects to incur, any liability (and no event has occurred which,
with  the  giving  of notice under Section 4219 of  ERISA,  would
result  in  such liability) under Section 4201 or 4243  of  ERISA
with  respect to a Multi-employer Plan; and (E) neither any  Loan
Party  nor any ERISA Affiliate has engaged in a transaction  that
could be subject to Section 4069 or 4212(c) of ERISA.

     8.22 Taxes.  The Former Parent, on behalf of the Parent, the
Borrower and their Subsidiaries, has filed all Federal and  other
tax  returns and reports required to be filed, and has  paid  all
Federal and other taxes, assessments, fees and other governmental
charges  levied or imposed upon them or their properties,  income
or assets otherwise due and payable.

     8.23  Regulated Entities.  None of the Parent, the Borrower,
any  of their Subsidiaries, or any Person controlling any of  the
foregoing, is an "Investment Company" within the meaning  of  the
Investment Company Act of 1940, none of the Parent, the  Borrower
or  any of their Subsidiaries is subject to regulation under  the
Public  Utility  Holding Company Act of 1935, the  Federal  Power
Act,  any  state public utilities code, or any other  Federal  or
state  statute  or  regulation  limiting  its  ability  to  incur
indebtedness.

     8.24  Use of Proceeds; Margin Regulations.  The proceeds  of
the Revolving Loans are to be used for the purposes described  in
Section  2.5.  None of the Parent, the Borrower or any  of  their
Subsidiaries is engaged in the business of purchasing or  selling
Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.

     8.25  Copyrights,  Patents, Trademarks  and  Licenses,  etc.
Each Loan Party owns or is licensed or otherwise has the right to
use  all of the patents, trademarks, service marks, trade  names,
copyrights,  copyrightable  subject  matter  (including,  without
limitation,    computer   software   documentation,   advertising
material,    brochures,   and   databases),   data,   contractual
franchises,  authorizations and other subject matter  and  rights
that   are  reasonably  necessary  for  the  operation  of  their
businesses, without conflict with the rights of any other Person.
To  the  best knowledge of the Loan Parties, no slogan  or  other
advertising device, product, process, method, substance, part  or
other  material now employed, or now contemplated to be employed,
by  any  Loan Party infringes upon any rights held by  any  other
Person.  No claim or litigation regarding any of the foregoing is
pending   or  threatened,  and  no  patent,  invention,   device,
application, statute, law, rule, regulation, standard or code  is
pending  or,  to  the  knowledge of the Loan  Parties,  proposed,
which,  in  either case, could reasonably be expected to  have  a
Material Adverse Effect.  Upon Default, the Agent or its designee
shall  be  entitled  to use and exercise all  such  property  and
rights described in this Section 8.25.

     8.26  No  Material Adverse Change.  As of the date  of  this
Agreement no Material Adverse Effect has occurred since the  date
of the Financial Statements referred to in Section 8.6.

     8.27  Full  Disclosure.   None  of  the  representations  or
warranties  made by the Borrower or any other Loan Party  in  the
Loan Documents as of the date such representations and warranties
are made or deemed made, and none of the statements contained  in
any exhibit, report, statement or certificate furnished by or  on
behalf of the Borrower or any other Loan Party in connection with
the  Loan Documents (including the Form 10), contains any  untrue
statement of a material fact or omits any material fact  required
to  be  stated  therein or necessary to make the statements  made
therein, in light of the circumstances under which they are made,
not misleading as of the time when made or delivered.

     8.28  Material Agreements.  Schedule 8.28 hereto sets  forth
all material agreements and contracts to which any Loan Party  is
a party or is bound as of the date of this Agreement.

     8.29  Bank Accounts.  Schedule 8.29 contains a complete  and
accurate  list of all bank accounts maintained by any Loan  Party
with any bank or other financial institution.

     8.30  Included Revenue Equipment.  Schedule 8.30 hereto sets
forth  a  correct and complete list of Included Revenue Equipment
as of the date of this Agreement.

     8.31  Excluded Revenue Equipment.  Schedule 8.31 hereto sets
forth a correct and complete list of Excluded Revenue Equipment.

     8.32  Former  Parent  Liens.  Schedule  8.32  sets  forth  a
correct  and  complete  list of the Real Estate  upon  which  the
Borrower  has  granted or may grant on or prior  to  the  Initial
Funding Date Liens to the Former Parent to secure indemnification
obligations  contained in the Transition Agreements (the  "Former
Parent  Obligations").   The Borrower may  grant  Liens  on  Real
Estate having a fair market value not greater than $25,000,000 as
determined by an appraisal in form and substance satisfactory  to
the  Agent, at the time of the grant to further secure the Former
Parent  Obligations  to  the  extent required  by  agreements  in
existence  on the Initial Funding Date, and to secure liabilities
to other creditors.

                            ARTICLE 9

               AFFIRMATIVE AND NEGATIVE COVENANTS

          The  Borrower  covenants to the Agent and  each  Lender
that,  so  long  as any of the Obligations (other than  Surviving
Indemnities) remain outstanding or this Agreement is in effect:

     9.1   Taxes  and Other Obligations.  Each Loan  Party  shall
(a)  file when due all tax returns and other reports which it  is
required to file; (b) pay, or provide for the payment, when  due,
of  all  taxes, fees, assessments and other governmental  charges
against it or upon its property, income and franchises, make  all
required  withholding  and  other  tax  deposits,  and  establish
adequate reserves for the payment of all such items, and  provide
to the Agent and the Lenders, upon request, satisfactory evidence
of its timely compliance with the foregoing; and (c) pay when due
all  Debt  owed  by it and all claims of materialmen,  mechanics,
carriers, warehousemen, landlords and other like Persons, and all
other  indebtedness  owed by it and perform and  discharge  in  a
timely  manner all other obligations undertaken by it;  provided,
however,  so  long  as  a Loan Party has notified  the  Agent  in
writing,  it  need  not pay any Debt, tax,  fee,  assessment,  or
governmental charge, that it is (i) contesting in good  faith  by
appropriate  proceedings diligently pursued,  the  affected  Loan
Party or (ii) has established proper reserves for as provided  in
GAAP;  provided,  further, that no Lien (other than  a  Permitted
Lien) results from such non-payment.

     9.2  Corporate Existence and Good Standing.  Each Loan Party
shall maintain its corporate existence and its qualification  and
good  standing  in  all  jurisdictions in which  the  failure  to
maintain such existence and qualification or good standing  could
reasonably be expected to have a material adverse effect  on  its
property,   business,   operations,   prospects,   or   condition
(financial or otherwise).

     9.3   Compliance  with  Law and Agreements;  Maintenance  of
Licenses.  Each Loan Party shall comply, in all material respects
with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal  Fair
Labor  Standards Act).  Each Loan Party shall obtain and maintain
all    licenses,    permits,   franchises,    and    governmental
authorizations necessary to own its property and to  conduct  its
business as conducted on the Closing Date.  Each Loan Party shall
not  modify,  amend  or  alter  its  certificate  or  article  of
incorporation  other than in a manner which  does  not  adversely
affect the rights of the Lenders or the Agent.

     9.4    Maintenance  of  Property.   Each  Loan  Party  shall
maintain all of its property necessary and useful in the  conduct
of its business, in good operating condition and repair, ordinary
wear and tear excepted.

     9.5  Insurance.

          (a)   Each  Loan Party shall maintain, with financially
sound and reputable insurers having a rating of at least A-VII or
better by Best Rating Guide, insurance against loss or damage  by
fire  with extended coverage; theft, burglary, pilferage and loss
in  transit;  public liability and third party  property  damage;
larceny,  embezzlement  or  other  criminal  liability;  business
interruption;  public liability and third party property  damage;
and such other hazards or of such other types as is customary for
Persons engaged in the same or similar business, as the Agent, in
its  discretion,  or  acting  at the direction  of  the  Majority
Lenders, shall specify, in amounts, and under policies acceptable
to  the  Agent  and the Majority Lenders.  Without  limiting  the
foregoing,  each Loan Party shall also maintain, flood insurance,
in  the  event  of a designation of the area in  which  any  Real
Estate  and any of the Equipment located on such Real  Estate  is
located  as  "flood  prone" or a "flood risk  area"  (hereinafter
"SFHA"), as defined by the Flood Disaster Protection Act of 1973,
in  an amount to be reasonably determined by the Agent, and shall
comply  with  the additional requirements of the  National  Flood
Insurance  Program as set forth in said Act.  Upon  the  Majority
Lenders'  request, each Loan Party shall maintain flood insurance
for its Equipment which is, at any time, located in a SFHA.

          (b)   Each  Loan Party shall cause the Agent,  for  the
ratable  benefit of the Lenders, to be named in each such  policy
covering  or relating to Collateral, and other insurance policies
as  required by the Agent, as secured party or mortgagee and sole
loss  payee or additional insured, in a manner acceptable to  the
Agent.   Each  policy  of insurance shall  contain  a  clause  or
endorsement  requiring the insurer to give not less  than  thirty
(30)  days'  prior written notice to the Agent in  the  event  of
cancellation of the policy for any reason whatsoever and a clause
or  endorsement stating that the interest of the Agent shall  not
be impaired or invalidated by any act or neglect of the Borrower,
the  Parent  or  any of their Subsidiaries or the  owner  of  any
premises for purposes more hazardous than are permitted  by  such
policy.   All  premiums for such insurance shall be paid  by  the
applicable  Loan  Party when due, and certificates  of  insurance
and, if requested by the Agent or any Lender, photocopies of  the
policies,  shall  be  delivered to the Agent,  in  each  case  in
sufficient quantity for distribution by the Agent to each of  the
Lenders.  If the Borrower fails to procure such insurance  or  to
pay  the  premiums therefor when due, the Agent may, and  at  the
direction of the Majority Lenders shall, do so from the  proceeds
of Revolving Loans.

          (c)   The Borrower shall promptly notify the Agent  and
the Lenders of any loss, damage, or destruction to the Collateral
in  excess of $500,000 per occurrence, whether or not covered  by
insurance.   All insurance proceeds relating to Collateral  shall
be remitted to the Payment Account.

     9.6  Environmental Laws.

          (a)  Each Loan Party shall to, conduct its business  in
compliance  with  all  Environmental  Laws  applicable   to   it,
including,  without limitation, those relating to the generation,
handling,  use,  storage, and disposal of any Contaminant.   Each
Loan Party shall take prompt and appropriate action to respond to
any  non-compliance with Environmental Laws and  shall  regularly
report to the Agent on such response.

          (b)   Without limiting the generality of the foregoing,
each  Loan  Party  shall  submit to the  Agent  and  the  Lenders
annually, commencing on the first Anniversary Date, and  on  each
Anniversary  Date  thereafter, an update of the  status  of  each
environmental compliance or liability issue.  The  Agent  or  any
Lender  may request copies of technical reports prepared  by  the
Borrower or any other Loan Party and its communications with  any
Governmental  Authority to determine whether  the  affected  Loan
Party  is  proceeding reasonably to correct, cure or  contest  in
good faith any alleged non-compliance or environmental liability.
Such  Loan Party shall, at the Majority Lenders' request  and  at
such   Loan   Party's   expense,  (a)   retain   an   independent
environmental  engineer acceptable to the Agent to  evaluate  the
site, including tests if appropriate, where the non-compliance or
alleged  non-compliance with Environmental Laws has occurred  and
prepare  and  deliver  to the Agent, in sufficient  quantity  for
distribution by the Agent to the Lenders, a report setting  forth
the results of such evaluation, a proposed plan for responding to
any environmental problems described therein, and an estimate  of
the costs thereof, and (b) provide to the Agent and the Lenders a
supplemental  report of such engineer whenever the scope  of  the
environmental problems, or the response thereto or the  estimated
costs thereof, shall change in any material respect.

     9.7   Compliance  with ERISA.  Each Loan  Party  shall,  and
shall  cause each of its ERISA Affiliates to:  (a) maintain  each
Plan  in  compliance in all material respects with the applicable
provisions  of  ERISA, the Code and other federal or  state  law;
(b)  cause  each Plan which is qualified under Section 401(a)  of
the  Code  to maintain such qualification; (c) make all  required
contributions  to any Plan subject to Section 412  of  the  Code;
(d) not engage in a nonexempt prohibited transaction or violation
of  the fiduciary responsibility rules with respect to any  Plan;
and  (e)  not  engage in a transaction that could be  subject  to
Section 4069 or 4212(c) of ERISA.

     9.8   Mergers, Consolidations or Sales.  None  of  the  Loan
Parties   shall   enter   into   any   transaction   of   merger,
reorganization,  or  consolidation, or  transfer,  sell,  assign,
lease,  or  otherwise dispose of all or any part of its property,
or  wind  up, liquidate or dissolve, or agree to do  any  of  the
foregoing, except (i) for any merger of any Loan Party  with  and
into  the  Borrower;  (ii)  for sales or  other  dispositions  of
Equipment in the ordinary course of business that are obsolete or
no longer useable by such Loan Party in its business, or that are
otherwise  permitted  by Section 6.10; and (iii)  sales  of  Real
Estate,  provided that, in the case of Real Estate, no  Event  of
Default  has  occurred and is continuing, in  an  amount  not  to
exceed $25,000,000 during the term of this Agreement provided the
net proceeds of all sales are deposited into the Payment Account.

     9.9    Restricted   Payments;  Capital  Change;   Restricted
Investments.    None of the Loan Parties shall: (i)  directly  or
indirectly declare or make, or incur any liability to  make,  any
Restricted  Payments,  except  (A)  Restricted  Payments  to  the
Borrower  by  its  Subsidiaries, (B) provided that  no  Event  of
Default has occurred and is continuing or would result from  such
action, Restricted Payments to the Parent by the Borrower not  in
excess  of  thirty-three percent (33%) of  the  consolidated  net
income  of the Parent, the Borrower and their Subsidiaries  on  a
Fiscal Year, year-to-date basis, and (C) repurchases of stock  of
the Parent for use in the employee benefit plans of the Borrower;
(ii) make any change in its capital structure which could have  a
Material  Adverse Effect; or (iii) make any Restricted Investment
except  for  (X)  acquisitions of Equipment to  be  used  in  the
business of the Borrower so long as the acquisition costs thereof
constitute  Capital  Expenditures permitted under  Section  9.21,
(Y) acquisitions of all of the stock, in a non-hostile manner, of
entities  in a business similar to that of the Borrower, provided
that  any  domestic Subsidiaries resulting from such acquisitions
comply    with   the   requirements   of   Section   9.19,    and
(Z)  acquisitions of all or substantially all of the assets of  a
business  so long as such assets are to be used in the Borrower's
business;  provided, however, that without  the  consent  of  the
Lenders  the  cost  of  stock  and assets  acquired  pursuant  to
clauses  (Y) and (Z) in the aggregate does not exceed  $5,000,000
during  any Fiscal Year; and provided, further, that no Event  of
Default  has  occurred  and is continuing or  would  result  from
acquisitions described in clauses (X), (Y) and (Z).

     9.10 Transactions Affecting Collateral or Obligations.  None
of  the Loan Parties shall enter into any transaction which would
be reasonably expected to have a Material Adverse Effect.

     9.11  Guaranties.   None  of the Loan  Parties  shall  make,
issue, or become liable on any Guaranty, except (i) Guaranties of
the  Obligations  in favor of the Agent, and (ii)  Guaranties  of
obligations of Affiliates permitted by Section 9.14.

     9.12  Debt.   None  of  the  Loan Parties   shall  incur  or
maintain  any  Debt, other than: (a) the Obligations;  (b)  trade
payables  and contractual obligations to suppliers and  customers
incurred in the ordinary course of business; (c) provided that no
Event  of Default has occurred and is continuing or would  result
from  such  action,  Debt of the Parent and the  Borrower  (which
includes   financing   Capital   Expenditures   permitted   under
Section 9.21) in an aggregate amount outstanding at any time  not
to  exceed the greater of $25,000,000 or fifty percent  (50%)  of
the  amount  of  aggregate Capital Expenditures  permitted  under
Section  9.21  then  or previously permitted, provided,  however,
that the amount of additional Debt other than for the purpose  of
financing   Revenue   Equipment  may   not   exceed   $25,000,000
outstanding  at  any time during the term of this Agreement;  and
(d)  other Debt existing on the Closing Date and reflected in the
Financial  Statements attached hereto as Exhibit F or  listed  on
Schedule   8.9.   The  terms  and  conditions  of  any  agreement
(including amendments, modifications, waivers and restatements of
existing  agreements)  entered into by the Borrower  relating  to
Synthetic Leases shall not contain any financial covenants  which
are more restrictive on the Borrower than the financial covenants
set  forth in Sections 9.22, 9.23 and 9.24 of this Agreement  and
any  amendments  or  modifications to the interest  rate  or  the
amortization shall be acceptable to the Agent.

     9.13 Prepayment.  None of the Loan Parties shall voluntarily
prepay  any Debt, except the Obligations in accordance  with  the
terms of this Agreement.

     9.14  Transactions  with Affiliates.  Except  as  set  forth
below,   none   of  the  Loan  Parties  shall,  sell,   transfer,
distribute,  or  pay  any money or property, including,  but  not
limited  to,  any fees or expenses of any nature (including,  but
not limited to, any fees or expenses for management services), to
any  Affiliate,  or  lend or advance money  or  property  to  any
Affiliate, or invest in (by capital contribution or otherwise) or
purchase  or  repurchase  any  stock  or  indebtedness,  or   any
property,  of any Affiliate, or become liable on any Guaranty  of
the   indebtedness,  dividends,  or  other  obligations  of   any
Affiliate.  Notwithstanding the foregoing, provided that no Event
of  Default  has occurred and is continuing or would result  from
such  action, (a) each Loan Party may engage in transactions with
Affiliates  in  the ordinary course of business, in  amounts  and
upon  terms fully disclosed to the Agent and the Lenders, and  no
less  favorable to such Loan Party than would be  obtained  in  a
comparable arm's-length transaction with a third party who is not
an  Affiliate, provided, that excluding Guaranties which  do  not
constitute  a Guaranty of Debt for Borrowed Money, the  aggregate
amount  of the Loan Parties' aggregate investments in, loans  to,
and  Guaranties  for the benefit of, Subsidiaries and  Affiliates
made  following the Closing Date shall not exceed  $5,000,000  at
any one time outstanding, (b) the Loan Parties may make loans  or
advances in the ordinary course of its business to their officers
and directors in an aggregate amount not to exceed $3,000,000  at
any  one  time  outstanding, and (c)  the  Borrower  may  provide
fundings to Leland to enable it to make payments to its employees
and vendors in the ordinary course of business in connection with
services   provided   to  the  other  Loan  Parties   and   their
Subsidiaries.

     9.15 Investment Banking and Finder's Fees.  None of the Loan
Parties  shall pay or agree to pay, or reimburse any other  party
with  respect  to, any investment banking or similar  or  related
fee,  underwriter's  fee, finder's fee, or broker's  fee  to  any
Person in connection with this Agreement.  The Loan Parties shall
defend  and indemnify the Agent and the Lenders against and  hold
them harmless from all claims of any Person that the Borrower  is
obligated  to  pay for any such fees, and all costs and  expenses
(including without limitation, attorneys' fees) incurred  by  the
Agent and/or any Lender in connection therewith.

     9.16  Business  Conducted.  None of the Loan  Parties  shall
engage directly or indirectly, in any line of business other than
the  businesses and related businesses in which the Loan  Parties
are engaged on the Closing Date.

     9.17  Liens.  None of the Loan Parties shall create,  incur,
assume, or permit to exist any Lien on any property now owned  or
hereafter acquired by it, except Permitted Liens.

     9.18  Sale  and Leaseback Transactions.  None  of  the  Loan
Parties shall, directly or indirectly, enter into any arrangement
with  any Person providing for it to lease or rent property  that
it  has  sold or will sell or otherwise transfer to such  Person,
unless   such  transaction  is  a  transaction  permitted   under
Section 9.12 or involves an operating lease.

     9.19  New  Subsidiaries.  None of the  Loan  Parties  shall,
directly  or indirectly, organize, create, acquire or  permit  to
exist any Subsidiary other than (a) those listed on Schedule 8.5,
and  (b)  provided that no Event of Default has occurred  and  is
continuing or would result from such action, new Subsidiaries  to
engage  in  businesses similar to such Loan  Party's  businesses,
provided,  that  in  the event a Loan Party  forms  any  domestic
Subsidiary,  (1) the stock of such new domestic Subsidiary  shall
be  pledged to the Agent for the benefit of the Lenders, (2) such
new  domestic  Subsidiary  shall execute  a  Guaranty  containing
representation  and warranties and covenants  acceptable  to  the
Agent,  in  favor  of the Agent for the benefit of  the  Lenders,
which Guaranty shall be secured by a first priority Lien upon all
assets of such new domestic Subsidiary, and (3) such new domestic
Subsidiary  shall  become  a party to this  Agreement  and  other
relevant  Loan Documents, all in a manner in substance  and  form
satisfactory to the Agent.

     9.20  Fiscal Year.  The Borrower shall not change its Fiscal
Year.

     9.21  Capital Expenditures.  None of the Loan Parties  shall
make  or  incur  any Capital Expenditure if, after giving  effect
thereto, the aggregate amount of all Capital Expenditures (net of
proceeds  from sales of fixed assets) by the Loan  Parties  on  a
consolidated basis would exceed $30,000,000 for Fiscal Year 1997,
$35,000,000 for Fiscal Year 1998 and $60,000,000 for each  Fiscal
Year  thereafter  until  the Stated Termination  Date;  provided,
however,  that  up  to  $15,000,000 of unused  permitted  Capital
Expenditures in a given Fiscal Year may be carried  over  to  the
following Fiscal Year.

     9.22  Adjusted Net Earnings.  The Parent, the  Borrower  and
their  Subsidiaries on a consolidated basis will not  permit  the
Adjusted  Net  Earnings  for the fiscal period  specified  below,
measured  at the end of each fiscal quarter on a Fiscal  Year  to
date  basis  for  1997  and  on  a  rolling  four  quarter  basis
thereafter,  to be less than the amount set forth below  opposite
such fiscal quarter:

                Period                   Amount

              March 1997               $5,000,000

               June 1997               $15,000,000

            September 1997             $27,000,000

             December 1997             $40,000,000

              March 1998               $43,000,000

               June 1998               $45,000,000

            September 1998             $48,000,000

             December 1998             $52,000,000

              March 1999               $54,000,000

               June 1999               $56,000,000

            September 1999             $58,000,000

           December 1999 and           $60,000,000
              thereafter

     9.23  Adjusted Tangible Net Worth.  The Parent, the Borrower
and  their  Subsidiaries on a consolidated basis will not  permit
Adjusted  Tangible  Net Worth calculated without  regard  to  the
increase,  not  to  exceed $10,000,000 (after  giving  effect  to
income taxes), in the worker's compensation accrual reserve  over
and  above  the  level of such reserve reflected  in  the  Latest
Projections dated September 9, 1996 and delivered to  the  Agent,
to be less than the following amounts:

                Period                   Amount

             December 1996            $210,000,000

          March 1997 through          $195,000,000
             December 1997

          March 1998 through          $190,000,000
            September 1998

             December 1998            $195,000,000

          March 1999 through          $190,000,000
            September 1999

           December 1999 and          $200,000,000
              thereafter

     9.24  Fixed Charge Coverage Ratio.  The Parent, the Borrower
and  their  Subsidiaries on a consolidated basis will not  permit
the  Fixed  Charge Coverage Ratio, measured at the  end  of  each
fiscal  quarter, beginning March 1997, on a Fiscal Year  to  date
basis for 1997 and a rolling four quarter basis thereafter, to be
less than the ratio set forth below opposite such fiscal quarter:

                Period                    Ratio

              March 1997               0.5 to 1.0

               June 1997               0.8 to 1.0

            September 1997             1.0 to 1.0

             December 1997             1.1 to 1.0
           through June 1999

            September 1999             1.15 to 1.0

           December 1999 and           1.2 to 1.0
              thereafter

     9.25 Use of Proceeds.  The Borrower shall not, and shall not
suffer  or  permit  any Subsidiary to, use  any  portion  of  the
Revolving Loan proceeds, directly or indirectly, (i) to  purchase
or  carry  Margin  Stock,  (ii) to repay or  otherwise  refinance
indebtedness  of the Borrower or others incurred to  purchase  or
carry  Margin  Stock, (iii) to extend credit for the  purpose  of
purchasing  or carrying any Margin Stock, or (iv) to acquire  any
security in any transaction that is subject to Section 13  or  14
of the Exchange Act.

     9.26  Restrictions  on Canadian Freightways.   The  Borrower
shall cause Canadian Freightways to maintain substantially all of
its unconsolidated assets (other than shares in its Subsidiaries)
as  directly  owned  assets  of Canadian  Freightways,  it  being
understood that during the ordinary course of business assets are
bought,  sold,  replaced, substituted and  replenished;  provided
that,  notwithstanding  the foregoing, Canadian  Freightways  may
transfer any assets to the Borrower.

     9.27 Further Assurances.  The Loan Parties shall execute and
deliver,  or  cause to be executed and delivered,  to  the  Agent
and/or the Lenders such documents and agreements, and shall  take
or  cause  to be taken such actions, as the Agent or  any  Lender
may, from time to time, reasonably request to carry out the terms
and conditions of this Agreement and the other Loan Documents.

     9.28 Cooperation.  The Loan Parties shall cooperate with the
Agent  and  the Lenders in the syndication of the Total  Facility
and  shall  meet  with  other  prospective  lenders  as  may   be
reasonably requested by the Agent and the Lenders.

                           ARTICLE 10

                CONDITIONS OF CLOSING AND LENDING

     10.1   Conditions  Precedent  to  the  Closing   Date.   The
obligation  of  the  Agent, the L/C Issuer  and  each  Lender  to
execute  and  deliver this Agreement is subject to the  following
conditions   precedent  having  been  satisfied   in   a   manner
satisfactory to the Agent, the L/C Issuer and each Lender:

          (a)   This Agreement and the other Loan Documents  have
been  executed  by each party thereto and the Loan Parties  shall
have  performed  and complied with all covenants, agreements  and
conditions  contained herein and the other Loan  Documents  which
are  required to be performed or complied with them before or  on
such Closing Date.

          (b)   All representations and warranties made hereunder
and  in the other Loan Documents shall be true and correct as  of
the Closing Date as if made on such date.

          (c)   No Default or Event of Default shall exist on the
Closing Date.

          (d)   The  Agent, the L/C Issuer and the Lenders  shall
have  received such opinions of counsel for the Borrower and  the
other  Loan  Parties as the Agent, the L/C Issuer or  any  Lender
shall  reasonably request, each such opinion to  be  in  a  form,
scope,  and  substance reasonably satisfactory to the Agent,  the
Lenders, and their respective counsel.

          (e)  The Agent shall have received:

               (i)  The Parent Guaranty;

(ii) The Parent Security Agreement;
(iii)     The Parent Pledge Agreement;
(iv) The Stock Pledge Agreement;
(v)  The Intercreditor Agreement;
(vi) The Patent and Trademark Agreements;
(vii)     The Leland Guaranty;
(viii)    The Leland Security Agreement;
(ix) The Blocked Account Agreement as required to be delivered to
the Agent pursuant to Section 6.9;
(x)  A projected pro forma balance sheet of the Borrower dated as
of November 30, 1996 which balance sheet shall reflect no
material adverse changes from the pro forma balance sheet dated
June 30, 1996, and showing the Borrower to have at least
$215,000,000 in equity (calculated without regard to the
increase, not to exceed $10,000,000 (after giving effect to
income taxes) in the worker's compensation accrual reserve over
and above the level of such reserve reflected in the Latest
Projections);
(xi) Financial information of the Parent, the Borrower and their
Subsidiaries for the most recent fiscal quarter in the form
provided to the Securities and Exchange Commission;
(xii)     The Transition Agreements and all such other related
documents, instruments and agreements as the Agent shall request
in connection therewith substantially in final form;
(xiii)    Duly executed financing statements executed by each
Loan Party under all jurisdictions that the Agent may deem
necessary or desirable in order to perfect the Agent's Lien and
such documentation as the Agent may require with respect to the
actions taken or to be taken to perfect the Agent's Liens in
Eligible Revenue Equipment;
(xiv)     Copies of UCC lien searches with respect to the
Borrower for the states of California, Oregon, or Illinois, in
each case certified by the Secretary of State of the applicable
jurisdiction, under all jurisdictions;
(xv) Duly executed UCC-3 Termination Statements and such other
instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the
Property of the Borrower and of other Loan Parties (except
Permitted Liens);
(xvi)     Certified copies of resolutions of the Board of
Directors of each of the Borrower, the Parent and Leland
approving (A) the execution and delivery of the Loan Documents to
which the applicable corporation is a party, (B) the performance
of the Obligations and obligations of the Parent or Leland under
Loan Documents to which it is a party, and (C) the consummation
of the transactions contemplated by the Loan Documents;
(xvii)    A certificate of the Secretary or an Assistant
Secretary of each of the Borrower, the Parent and Leland
certifying the names and true signatures of the officers of each
of the Borrower, the Parent and Leland, respectively, authorized
to sign the Loan Documents;
(xviii)   A copy of the Certificate of Incorporation of each of
the Borrower, the Parent and Leland, certified by the Secretary
of State of the State of Delaware as of a recent date;
(xix)     A copy of the Bylaws of each of the Borrower, the
Parent and Leland, certified by the Secretary or an Assistant
Secretary of the Borrower and the Parent, respectively, as of the
date of this Agreement as being accurate and complete; and
(xx) A Certificate of the Secretary of State of the State of
Delaware certifying that each of the Borrower, the Parent and
Leland is in good standing as of a recent date.

          (f)   There  shall  have occurred no  material  adverse
change (as determined by the Lenders in their sole discretion) in
business, operations, profits or prospects of the Borrower  since
the  financial statements dated August 31, 1996, and the Borrower
shall, as of the Closing Date, have met the financial performance
projections contained in the Latest Projections delivered to  the
Lenders.

          (g)   The Agent shall have received evidence, in  form,
scope,  and substance, reasonably satisfactory to the  Agent,  of
all insurance coverage as required by this Agreement.

          (h)  The Agent shall have received certified copies  of
all  consents or approvals of any Government Authority  or  other
Person which the Agent determines is required in connection  with
the transactions contemplated by this Agreement.

          (i)   The  Agent  and  the Lenders shall  have  had  an
opportunity, if they so choose, to examine the books  of  account
and  other  records  and  files of the Borrower  and  other  Loan
Parties  and to make copies thereof, and to conduct a pre-closing
audit  which  shall include, without limitation, verification  of
Account,  and  Availability, and the results of such  examination
and  audit  shall  have been satisfactory to the  Agent  and  the
Lenders in all respects.

          (j)   All  proceedings taken or to  be  taken  and  all
transactions consummated or to be consummated as contemplated  by
the  Transition  Agreements and this Agreement,  all  other  Loan
Documents and all documents and papers relating to any thereof or
hereunder,  including  amendments, modifications  or  waivers  to
agreements relating to Synthetic Leases, shall be satisfactory in
form, scope, and substance to the Agent and the Lenders, and  the
Lenders  shall  be  satisfied  with  respect  to  the  terms  and
conditions  of,  and all matters relating to  or  affecting,  the
transfer and tax free exchange of all shares of the Borrower from
the Former Parent to the Parent.

          (k)   The  Borrower  shall have used its  best  efforts
between  November  19, 1996 and the Closing  Date  to  obtain  as
promptly  as  possible an executed Landlord's  Waiver  from  each
Person which leases real property to the Borrower.

          (l)  The Agent and the Borrower shall have entered into
the Post-Closing Letter.

          Execution  and delivery to the Agent by the L/C  Issuer
and  a  Lender of a counterpart of this Agreement shall be deemed
confirmation  by  the  L/C Issuer and such Lender  that  (i)  all
conditions precedent in this Section 10.1 have been fulfilled  to
the  satisfaction of the L/C Issuer and such Lender and (ii)  the
decision of the L/C Issuer and such Lender to execute and deliver
to  the Agent an executed counterpart of this Agreement was  made
by  the  L/C  Issuer or such Lender, as applicable, independently
and  without reliance on the Agent or any other Lender as to  the
satisfaction  of  any  condition  precedent  set  forth  in  this
Section 10.1.

          10.2  Conditions Precedent to the Initial Funding Date.
The obligation of the Lenders to make the initial Revolving Loans
on the Initial Funding Date, and the obligation of the L/C Issuer
to issue any Letter of Credit on the Initial Funding Date and the
obligation  of  the Lenders to participate in Letters  of  Credit
issued  on the Initial Funding Date, are subject to the following
conditions   precedent  having  been  satisfied   in   a   manner
satisfactory to the Agent, the L/C Issuer and each Lender:

          (a)   Upon  making any Revolving Loans or  issuing  any
Letters  of  Credit  on the Initial Funding Date  (including  any
Revolving  Loans  made to finance the Closing  Fee  or  otherwise
pursuant  to  Section 4.4 as reimbursement for  fees,  costs  and
expenses  then  payable under this Agreement) and  with  all  its
obligations current, the Borrower would have Availability  in  an
amount no less than $100,000,000.

          (b)   All representations and warranties made hereunder
and  in the other Loan Documents shall be true and correct as  of
the Initial Funding Date as if made on such date.

          (c)   No Default or Event of Default shall exist on the
Initial Funding Date, or would exist after giving effect  to  the
Loans  to be made, and the issuance of any Letters of Credit,  on
such date.

          (d)  The Borrower shall have paid all fees and expenses
of  the  Agent  and the Attorney Costs, including  the  fees  and
expenses of the Agent's outside counsel, Morrison & Foerster llp,
and  attorneys  fees  and costs incurred by  each  co-syndication
agent as required by Section 15.7, in connection with any of  the
Loan Documents and the transactions contemplated thereby, in each
case to the extent such fees and expenses have been billed.

          (e)   The  Borrower shall have paid in full the Closing
Fee.

          (f)   The  Distribution shall have  occurred  or  shall
occur  substantially contemporaneously with the  Initial  Funding
Date.

          The  acceptance by the Borrower of any Revolving  Loans
made  on,  or  of  any Letter of Credit issued  on,  the  Initial
Funding  Date shall be deemed to be a representation and warranty
made  by  the  Borrower to the effect that all of the  conditions
precedent  to the making of such Revolving Loans or the  issuance
of  such  Letter  of Credit have been satisfied,  with  the  same
effect  as delivery to the Agent, the L/C Issuer and the  Lenders
of a certificate signed by a Responsible Officer of the Borrower,
dated the Closing Date, to such effect.

          The  issuance of any Letter of Credit by the L/C Issuer
and  the making of any Revolving Loan by a Lender shall be deemed
confirmation  by the L/C Issuer and such Lender,  as  applicable,
that  (i) all conditions precedent in this Section 10.2 have been
fulfilled to the satisfaction of the L/C Issuer and such  Lender,
and  (ii)  the decision of the L/C Issuer to issue any Letter  of
Credit and of such Lender to fund any Revolving Loan was made  by
the  L/C Issuer or such Lender, as applicable, independently  and
without reliance on the Agent, the L/C Issuer any other Lender as
to   the  satisfaction  of  any  condition  set  forth  in   this
Section 10.2.

     10.3  Conditions Precedent to Each Loan.  The obligation  of
the  Lenders  to make each Loan, including the initial  Revolving
Loans on the Initial Funding Date, and the obligation of the  L/C
Issuer  to issue any Letter of Credit and the obligation  of  the
Lenders to participate in Letters of Credit, shall be subject  to
the  further conditions precedent that on and as of the  date  of
any such extension of credit:

          (a)   the  following statements shall be true, and  the
acceptance  by the Borrower of any extension of credit  shall  be
deemed  to  be  a  statement to the effect set forth  in  clauses
(i)  and (ii), with the same effect as the delivery to the  Agent
and the Lenders of a certificate signed by a Responsible Officer,
dated the date of such extension of credit, stating that:

               (i)   The representations and warranties contained
in this Agreement and the other Loan Documents are correct in all
material  respects  on and as of the date of  such  extension  of
credit  as  though  made on and as of such date,  except  to  the
extent  the  Agent  and  the Lenders have been  notified  by  the
Borrower  that any representation or warranty is not correct  and
the Majority Lenders have explicitly waived in writing compliance
with  such  representation  or  warranty;  and  except  that  the
Borrower  may,  from time to time, submit to the Agent,  the  L/C
Issuer  and  each Lender updated Schedules 8.3, 8.5,  8.9,  8.15,
8.17, 8.18, 8.29 and 8.32;

               (ii)  No event has occurred and is continuing,  or
would  result from such extension of credit, which constitutes  a
Default or an Event of Default; and

          (b)   without limiting Section 10.3(a), the  amount  of
the  Availability shall be sufficient to make such Revolving Loan
or  to  issue  such  Letters  of  Credit  without  exceeding  the
Availability or the Maximum Revolving Amount; provided,  however,
that  the  foregoing conditions precedent are not  conditions  to
each  Lender (i) participating in or reimbursing the  L/C  Issuer
for such Lenders' Pro Rata Share of any drawings under Letters of
Credit  as provided in Section 2.3, or (ii) participating  in  or
reimbursing BABC or the Agent for such Lenders' Pro Rata Share of
any  BABC  Loan or Agent Advance as provided in Sections  2.2(h),
(i) and (j).

                           ARTICLE 11

                        DEFAULT; REMEDIES

     11.1  Events  of Default.  It shall constitute an  event  of
default  ("Event of Default") if any one or more of the following
shall occur for any reason:

          (a)  any failure to pay the principal of or interest or
premium  on any of the Obligations when due, whether upon  demand
or otherwise;

          (b)  any representation or warranty made or deemed made
by  the  Borrower in this Agreement or by the Borrower or any  of
its  Subsidiaries  in  any  of  the  other  Loan  Documents,  any
Financial Statement, or any certificate furnished by the Borrower
or any of its Subsidiaries at any time to the Agent or any Lender
shall  prove to be untrue in any material respect as of the  date
on which made, deemed made, or furnished;

          (c)   any  default  shall occur in  the  observance  or
performance  of any of the covenants and agreements contained  in
this  Agreement and such default shall continue for  thirty  (30)
days  after  defaulting Loan Party becomes aware or  should  have
become  aware of  the occurrence of such default (except that  no
thirty-day  period  shall  apply to a  default  with  respect  to
Sections 6.2, 6.3, 6.4 (other than clause (c)), 6.5, 6.6(a), 6.7,
6.8(a),  6.8(b), 6.8(c), 6.8(d), 6.9, 6.10(b), 6.10(c),  6.10(d),
6.11,  7.2 (other than (g), (h), (j) and (k) thereof), 7.3,  9.2,
9.5  (other than insurance unrelated to the Collateral), 9.8, 9.9
through and including 9.16, or 9.18 through and including  9.27),
any  other Loan Documents or any other agreement entered into  at
any  time to which the Borrower or any other Loan Party  and  the
Agent  or  any  Lender are party (subject to any cure  provisions
contained  in any such Loan Document or other agreement),  or  if
any  such Loan Document or other agreement shall terminate (other
than in accordance with its terms or the terms hereof or with the
written consent of the Agent and the Majority Lenders) or  become
void  or unenforceable (without the written consent of the  Agent
and the Majority Lenders);

          (d)   default shall occur with respect to any Debt  For
Borrowed  Money  (other than the Obligations) in  an  outstanding
principal amount which exceeds $5,000,000, or under any agreement
or  instrument  under  or pursuant to which  any  such  Debt  For
Borrowed  Money  may  have  been  issued,  created,  assumed,  or
guaranteed  by  the Borrower or any other Loan  Party,  and  such
default shall continue for more than the period of grace, if any,
therein  specified, if the effect thereof (with  or  without  the
giving  of  notice  or  further lapse of  time  or  both)  is  to
accelerate,  or  to  permit the holders  of  any  such  Debt  For
Borrowed  Money to accelerate, the maturity of any such Debt  For
Borrowed  Money;  or any such Debt For Borrowed  Money  shall  be
declared due and payable or be required to be prepaid (other than
by a regularly scheduled required prepayment) prior to the stated
maturity thereof;

          (e)  any of the Loan Parties shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an  answer
or   otherwise   commence  any  action  or   proceeding   seeking
reorganization, arrangement or readjustment of its debts  or  for
any  other relief under the federal Bankruptcy Code, as  amended,
or  under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, action or proceeding; (ii) apply
for  or  acquiesce  in  the appointment of a receiver,  assignee,
liquidator, sequestrator, custodian, monitor, trustee or  similar
officer for it or for all or any part of its property; (iii) make
an  assignment  for the benefit of creditors; or (iv)  be  unable
generally to pay its debts as they become due;

          (f)  an involuntary petition or proposal shall be filed
or   an   action   or  proceeding  otherwise  commenced   seeking
reorganization, arrangement, consolidation or readjustment of the
debts  of  any of the Loan Parties or for any other relief  under
the Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency  act  or  law,  state or  federal,  now  or  hereafter
existing  and  either  (i)  such petition,  proposal,  action  or
proceeding shall not have been dismissed within a period of sixty
(60)  days  after  its commencement or (ii) an order  for  relief
against  such  Loan  Party  shall  have  been  entered  in   such
proceeding;

          (g)   a  receiver, assignee, liquidator,  sequestrator,
custodian, monitor, trustee or similar officer for or for all  or
any  part of its property shall be appointed and shall remain  in
place  for  a  period  of  thirty (30)  days;  or  a  warrant  of
attachment, execution or similar process shall be issued  against
any  part of its property and such warrant, execution or  similar
process   shall  not  have  been  vacated,  discharged,   stayed,
satisfied  or  bonded against pending appeal within  thirty  (30)
days from entry thereof;

          (h)   any  Loan  Party  shall  file  a  certificate  of
dissolution  under applicable state law or shall  be  liquidated,
dissolved or wound-up or shall commence or have commenced against
it  any  action  or  proceeding for  dissolution,  winding-up  or
liquidation,  or shall take any corporate action  in  furtherance
thereof;

          (i)   all or any material part of the property  of  any
Loan  Party  shall  be nationalized, expropriated  or  condemned,
seized  or otherwise appropriated, or custody or control of  such
property  or  of  such  Loan  Party  shall  be  assumed  by   any
Governmental Authority or any court of competent jurisdiction  at
the   instance  of  any  Governmental  Authority,  except   where
contested in good faith by proper proceedings diligently  pursued
where a stay of enforcement is in effect;

          (j)    any   Guaranty  of  the  Obligations  shall   be
terminated, revoked or declared void or invalid;

          (k)  one or more judgments or orders for the payment of
money  aggregating in excess of $500,000 in excess of the amounts
covered  by insurance, shall be rendered against any Loan  Party,
and  any  such  judgment or order shall not be paid  or  appealed
within  the  time period for appeal or not be bonded  against  or
stayed pending any appeal;

          (l)  any loss, theft, damage or destruction of any item
or items of Collateral or other property of any Loan Party occurs
which   (i)   materially  and  adversely  affects  its  property,
business,  operation, prospects, or condition; and  (ii)  is  not
adequately covered by insurance;

          (m)  there occurs a Material Adverse Effect;

          (n)  there is filed against any Loan Party any civil or
criminal  action, suit or proceeding under any federal  or  state
racketeering   statute   (including,  without   limitation,   the
Racketeer Influenced and Corrupt Organization Act of 1970), which
action,  suit  or  proceeding (1) is  not  dismissed  within  one
hundred  twenty (120) days, and (2) could reasonably be  expected
to  result  in  the confiscation or forfeiture  of  any  material
portion of the Collateral;

          (o)  for any reason other than the failure of the Agent
to  take any action available to it to maintain perfection of the
Agent's  Liens, pursuant to the Loan Documents, any Loan Document
ceases to be in full force and effect or any Lien with respect to
any  material  portion of the Collateral intended to  be  secured
thereby  ceases to be, or is not, valid, perfected and  prior  to
all  other  Liens (other than Permitted Liens) or is  terminated,
revoked or declared void;

          (p)   (i) an ERISA Event shall occur with respect to  a
Pension  Plan or Multi-employer Plan which has resulted or  could
reasonably  be  expected to result in liability of  the  Borrower
under Title IV of ERISA to the Pension Plan, Multi-employer  Plan
or  the PBGC in an aggregate amount in excess of $10,000,000;  or
(ii) any Loan Party or any ERISA Affiliate shall fail to pay when
due,  after  the expiration of any applicable grace  period,  any
installment  payment  with  respect to its  withdrawal  liability
under  Section 4201 of ERISA under a Multi-employer  Plan  in  an
aggregate amount in excess of $10,000,000; or

          (q)  there occurs a Change of Control.

     11.2 Remedies.

          (a)  If a Default or an Event of Default occurs and  is
continuing, the Agent may, in its discretion, and shall,  at  the
direction  of  the  Majority Lenders,  do  one  or  more  of  the
following  at any time or times and in any order, without  notice
to  or  demand on the Borrower:  (i) reduce the Maximum  Revolver
Amount,  or  the  advance rates against Eligible Accounts  and/or
Revenue  Equipment used in computing the Availability, or  reduce
one  or  more  of  the  other  elements  used  in  computing  the
Availability;  (ii)  restrict the amount of  or  refuse  to  make
Revolving Loans; (iii) restrict or refuse to arrange for  Letters
of  Credit;  and  (iv)  cash  collateralize  outstanding  undrawn
amounts under Letters of Credit by causing Revolving Loans to  be
made  or  otherwise.   If  an  Event of  Default  occurs  and  is
continuing,  the Agent  shall, at the direction of  the  Majority
Lenders,  do  one  or more of the following, in addition  to  the
actions described in the preceding sentence, at any time or times
and  in  any order, without notice to or demand on the  Borrower:
(a) terminate the Commitments and this Agreement; (b) declare any
or  all  Obligations to be immediately due and payable; provided,
however,  that  upon  the  occurrence of  any  Event  of  Default
described   in   Sections  11.1(e),  11.1(f),  or  11.1(g),   the
Commitments  shall automatically and immediately expire  and  all
Obligations  shall  automatically  become  immediately  due   and
payable without notice or demand of any kind; and (c) pursue  its
other rights and remedies under the Loan Documents and applicable
law.

          (b)   If  an Event of Default occurs and is continuing:
(i)  the  Agent  shall have for the benefit of  the  Lenders,  in
addition  to  all other rights of the Agent and the Lenders,  the
rights  and remedies of a secured party under the UCC;  (ii)  the
Agent  may,  at  any time, take possession of the Collateral  and
keep  it  on the Borrower's premises, at no cost to the Agent  or
any  Lender,  or  remove any part of it to such  other  place  or
places  as the Agent may desire, or the Borrower shall, upon  the
Agent's  demand, at the Borrower's cost, assemble the  Collateral
and  make  it  available  to  the Agent  at  a  place  reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver
any  Collateral at public or private sales, for cash, upon credit
or  otherwise, at such prices and upon such terms  as  the  Agent
deems  advisable, in its sole discretion, and may, if  the  Agent
deems  it  reasonable,  postpone  or  adjourn  any  sale  of  the
Collateral by an announcement at the time and place of sale or of
such  postponed or adjourned sale without giving a new notice  of
sale.   Without in any way requiring notice to be  given  in  the
following  manner,  the Borrower agrees that any  notice  by  the
Agent of sale, disposition or other intended action hereunder  or
in connection herewith, whether required by the UCC or otherwise,
shall constitute reasonable notice to the Borrower if such notice
is  mailed  by  registered  or  certified  mail,  return  receipt
requested,  postage  prepaid, or is delivered personally  against
receipt, at least fifteen (15) Business Days prior to such action
to  the  Borrower's  address specified  on  the  signature  pages
hereto,  as  such  address may be modified by a notice  given  in
accordance with Section 15.8.  If any Collateral is sold on terms
other  than payment in full at the time of sale, no credit  shall
be  given against the Obligations until the Agent or the  Lenders
receive payment, and if the buyer defaults in payment, the  Agent
may resell the Collateral without further notice to the Borrower.
In  the  event the Agent seeks to take possession of all  or  any
portion  of  the  Collateral by judicial  process,  the  Borrower
irrevocably  waives:   (a) the posting of  any  bond,  surety  or
security  with respect thereto which might otherwise be required;
(b)  any demand for possession prior to the commencement  of  any
suit or action to recover the Collateral; and (c) any requirement
that  the  Agent  retain  possession  and  not  dispose  of   any
Collateral  until  after trial or final judgment.   The  Borrower
agrees that the Agent has no obligation to preserve rights to the
Collateral  or  marshal any Collateral for  the  benefit  of  any
Person.  The Agent is hereby granted a license or other right  to
use,  without charge, the Borrower's labels, patents, copyrights,
name,  trade  secrets, trade names, trademarks,  and  advertising
matter,  or  any  similar property, in completing production  of,
advertising or selling any Collateral, and the Borrower's  rights
under  all licenses and all franchise agreements shall  inure  to
the Agent's benefit for such purpose.  The proceeds of sale shall
be  applied  first to all expenses of sale, including  attorneys'
fees,  and  then to the Obligations in whatever order  the  Agent
elects.  The Agent will return any excess to the Borrower and the
Borrower shall remain liable for any deficiency.

          (c)   If  an Event of Default occurs and is continuing,
the Borrower hereby waives all rights to notice and hearing prior
to  the  exercise by the Agent of the Agent's rights to repossess
the  Collateral without judicial process or to relevy, attach  or
levy upon the Collateral without notice or hearing.

          (d)   If  the  Agent, at the direction of the  Majority
Lenders  terminates this Agreement upon an Event of Default,  the
Borrower  shall  pay the Agent, for the account of  the  Lenders,
immediately upon termination, an early termination penalty  equal
to  the early termination fee that would have been payable  under
Article  4  if  this Agreement had been terminated on  that  date
pursuant to the Borrower's election.

                           ARTICLE 12

                      TERM AND TERMINATION

     12.1 Term and Termination.  The term of this Agreement shall
end  on  the  Stated Termination Date.  The Agent upon  direction
from  the Majority Lenders shall terminate this Agreement without
notice  upon  the  occurrence of an Event of Default.   Upon  the
effective  date of termination of this Agreement for  any  reason
whatsoever,  all Obligations (including, without limitation,  all
unpaid   principal  of,  accrued  interest  on   and   prepayment
penalties,  if  any, with respect to the Revolving  Loans)  shall
become immediately due and payable and Borrower shall immediately
arrange   for   the  cancellation  of  Letters  of  Credit   then
outstanding.  Notwithstanding the termination of this  Agreement,
until  all  Obligations  (other than Surviving  Indemnities)  are
indefeasibly  paid  and performed in full in cash,  the  Borrower
shall  remain bound by the terms of this Agreement and shall  not
be  relieved of any of its Obligations hereunder, and  the  Agent
and  the  Lenders  shall  retain all their  rights  and  remedies
hereunder  (including, without limitation, the Agent's  Liens  in
and all rights and remedies with respect to all then existing and
after-arising Collateral).

     12.2   Termination  if  Conditions  Not   Satisfied.    This
Agreement  shall  terminate and have no further force  or  effect
(other  than  Surviving Indemnities) if the Initial Funding  Date
has not occurred on or before December 31, 1996.

                           ARTICLE 13

   AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

     13.1  No  Waivers Cumulative Remedies.  No  failure  by  the
Agent  or  any  Lender to exercise any right, remedy,  or  option
under this Agreement or any present or future supplement thereto,
or in any other agreement between or among any Loan Party and the
Agent  and/or any Lender, or delay by the Agent or any Lender  in
exercising  the same, will not operate as a waiver  thereof.   No
waiver by the Agent or any Lender will be effective unless it  is
in  writing,  and  then  only to the extent specifically  stated.
No  waiver  by  the  Agent or the Lenders on any  occasion  shall
affect   or  diminish   the  Agent's  and  each  Lender's  rights
thereafter to require strict performance by the Borrower and  the
other  Loan  Parties  of any provision of  this  Agreement.   The
Agent's  and  each Lender's rights under this Agreement  will  be
cumulative  and not exclusive of any other right or remedy  which
the Agent or any Lender may have.

     13.2 Amendments and Waivers.  No amendment or waiver of  any
provision  of this Agreement or any other Loan Document,  and  no
consent  with  respect to any departure by  the  any  Loan  Party
therefrom, shall be effective unless the same shall be in writing
and  signed  by  the Majority Lenders (or by  the  Agent  at  the
written  request of the Majority Lenders) and the  affected  Loan
Party and then any such waiver or consent shall be effective only
in  the specific instance and for the specific purpose for  which
given;  provided,  however, that no such  waiver,  amendment,  or
consent  shall, unless in writing and signed by all  the  Lenders
and the affected Loan Party and acknowledged by the Agent, do any
of the following:

          (a)  increase or extend the Commitment of any Lender;

          (b)  postpone or delay any date fixed by this Agreement
or  any  other  Loan  Document  for  any  payment  of  principal,
interest,  fees or other amounts due to the Lenders  (or  any  of
them) hereunder or under any other Loan Document;

          (c)   reduce the principal of, or the rate of  interest
specified  herein  on any Revolving Loan, or any  fees  or  other
amounts payable hereunder or under any other Loan Document;

          (d)  change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Revolving Loans which is
required  for  the  Lenders or any of them  to  take  any  action
hereunder;

          (e)   amend  this  Section  or  any  provision  of  the
Agreement providing for consent or other action by all Lenders;

          (f)   release  any Guaranty or release  any  Collateral
other than as permitted by Section 14.11;

          (g)   change  the definitions of "Majority Lenders"  or
"Required Lenders"; or

          (h)   increase  the  "Account Advance  Rate,"  "Maximum
Revenue  Equipment Advance," "Maximum Revolver Amount,"  "Revenue
Equipment  Advance Rate," "Total Facility" or "Unused  Letter  of
Credit Facility."

and,  provided  further,  that no amendment,  waiver  or  consent
shall,  unless  in  writing and signed by the Agent,  affect  the
rights  or duties of the Agent under this Agreement or any  other
Loan Document.  In addition, with respect to the percentages  set
forth  in  clauses  (e)  and (j) in the definition  of  "Eligible
Accounts," neither such percentage shall be increased without the
prior consent of the Majority Lenders.

     13.3 Assignments; Participations.

          (a)   Any Lender may, with the written consent  of  the
Agent  (which  consent shall not be unreasonably  withheld)  and,
unless  a Default has occurred and is continuing with the written
consent of the Borrower (such consent of the Borrower not  to  be
unreasonably  withheld),  assign and  delegate  to  one  or  more
assignees that are commercial banks, other financial institutions
or a purchaser or successor in interest to substantially all of a
Lender's loan portfolio (provided that no written consent of  the
Agent  or  the Borrower shall be required in connection with  any
assignment  and  delegation by a Lender to an Affiliate  of  such
Lender  or to such purchaser or successor in interest)  (each  an
"Assignee")  all,  or any ratable part of all, of  the  Revolving
Loans,  the  Commitments and the other rights and obligations  of
such Lender hereunder, in a minimum amount of $15,000,000 (except
that each Person which is a Lender as of the Closing Date may, on
a  one-time basis, assign a minimum amount of $10,000,000) or  if
less  the  entire  amount of such Lender's Commitment;  provided,
however,  that  the Borrower and the Agent may continue  to  deal
solely  and  directly  with such Lender in  connection  with  the
interest  so assigned to an Assignee until (i) written notice  of
such  assignment,  together with payment instructions,  addresses
and  related information with respect to the Assignee, shall have
been  given to the Borrower and the Agent by such Lender and  the
Assignee;  (ii) such Lender and its Assignee shall have delivered
to the Borrower and the Agent an Assignment and Acceptance in the
form  of  Exhibit D ("Assignment and Acceptance") and  (iii)  the
assignor  Lender or Assignee has paid to the Agent  a  processing
fee in the amount of $3,000.

          (b)   From  and after the date that the Agent  notifies
the  assignor Lender that it has received an executed  Assignment
and  Acceptance  and  payment of the above-referenced  processing
fee, (i) the Assignee thereunder shall be a party hereto and,  to
the  extent  that  rights  and obligations,  including,  but  not
limited  to, the obligation to participate in credit  support  or
other  enhancement  for  Letters of Credit  hereunder  have  been
assigned to it pursuant to such Assignment and Acceptance,  shall
have  the  rights  and  obligations of a Lender  under  the  Loan
Documents, and (ii) the assignor Lender shall, to the extent that
rights  and  obligations  hereunder  and  under  the  other  Loan
Documents  have  been assigned by it pursuant to such  Assignment
and  Acceptance, relinquish its rights and be released  from  its
obligations  under  this  Agreement  (and  in  the  case  of   an
Assignment  and Acceptance covering all or the remaining  portion
of  an  assigning  Lender's  rights and  obligations  under  this
Agreement, such Lender shall cease to be a party hereto).

          (c)   By  executing  and delivering an  Assignment  and
Acceptance,  the  assigning Lender thereunder  and  the  Assignee
thereunder  confirm to and agree with each other  and  the  other
parties  hereto as follows:  (1) other than as provided  in  such
Assignment  and  Acceptance,  such  assigning  Lender  makes   no
representation  or  warranty and assumes no  responsibility  with
respect to any statements, warranties or representations made  in
or  in connection with this Agreement or the execution, legality,
validity,  enforceability, genuineness, sufficiency or  value  of
this  Agreement  or  any other Loan Document  furnished  pursuant
hereto;  (2)  such  assigning Lender makes no  representation  or
warranty  and  assumes  no responsibility  with  respect  to  the
financial  condition  of  the  Borrower  or  the  performance  or
observance  by the Borrower of any of its obligations under  this
Agreement  or any other Loan Document furnished pursuant  hereto;
(3)  such Assignee confirms that it has received a copy  of  this
Agreement, together with such other documents and information  as
it  has  deemed appropriate to make its own credit  analysis  and
decision  to enter into such Assignment and Acceptance; (4)  such
Assignee will, independently and without reliance upon the Agent,
such  assigning  Lender or any other Lender, and  based  on  such
documents  and  information as it shall deem appropriate  at  the
time, continue to make its own credit decisions in taking or  not
taking  action  under this Agreement; (5) such Assignee  appoints
and  authorizes  the Agent to take such action as  agent  on  its
behalf  and to exercise such powers under this Agreement  as  are
delegated  to the Agent by the terms hereof, together  with  such
powers  as  are  reasonably  incidental  thereto;  and  (6)  such
Assignee  agrees  that it will perform in accordance  with  their
terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.

          (d)    Immediately  upon  each  Assignee's  making  its
processing fee payment under the Assignment and Acceptance,  this
Agreement shall be deemed to be amended to the extent,  but  only
to  the extent, necessary to reflect the addition of the Assignee
and   the   resulting  adjustment  of  the  Commitments   arising
therefrom. The Commitment allocated to each Assignee shall reduce
such Commitments of the assigning Lender pro tanto.

          (e)   Any  Lender may at any time sell to one  or  more
commercial  banks,  or  other financial  institutions,  or  other
Persons   not   Affiliates  of  the  Borrower  (a  "Participant")
participating interests in any Revolving Loans, the Commitment of
that   Lender  and  the  other  interests  of  that  Lender  (the
"originating  Lender")  hereunder  and  under  the   other   Loan
Documents;  provided, however, that (i) the originating  Lender's
obligations under this Agreement shall remain unchanged, (ii) the
originating  Lender  shall  remain  solely  responsible  for  the
performance of such obligations, (iii) the Borrower and the Agent
shall  continue to deal solely and directly with the  originating
Lender  in  connection with the originating Lender's  rights  and
obligations  under this Agreement and the other  Loan  Documents,
and  (iv)  no  Lender shall transfer or grant  any  participating
interest  under which the Participant has rights to  approve  any
amendment  to,  or  any consent or waiver with respect  to,  this
Agreement or any other Loan Document,  and all amounts payable by
the  Borrower hereunder shall be determined as if such Lender had
not  sold such participation; except that, if amounts outstanding
under  this  Agreement are due and unpaid,  or  shall  have  been
declared or shall have become due and payable upon the occurrence
of  an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest  in
amounts  owing  under  this Agreement to  the  same  extent,  and
subject  to  the  same  limitation,  as  if  the  amount  of  its
participating  interest were owing directly to  it  as  a  Lender
under this Agreement.

          (f)    Notwithstanding  any  other  provision  in  this
Agreement, any Lender may at any time create a security  interest
in,  or  pledge,  all  or any portion of  its  rights  under  and
interest  in this Agreement in favor of any Federal Reserve  Bank
in  accordance  with  Regulation A of the FRB  or  U.S.  Treasury
Regulation  31  CFR  203.14, and such Federal  Reserve  Bank  may
enforce  such pledge or security interest in any manner permitted
under applicable law.

                           ARTICLE 14

                            THE AGENT

     14.1  Appointment  and Authorization.   Each  Lender  hereby
designates and appoints BankAmerica Business Credit, Inc. as  its
Agent under this Agreement and the other Loan Documents and  each
Lender  hereby  irrevocably authorizes the  Agent  to  take  such
action  on its behalf under the provisions of this Agreement  and
each  other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this
Agreement  or any other Loan Document, together with such  powers
as are reasonably incidental thereto.  The Agent agrees to act as
such on the express conditions contained in this Article 14.  The
provisions of this Article 14 are solely for the benefit  of  the
Agent and the Lenders and the Borrower shall have no rights as  a
third party beneficiary of any of the provisions contained herein
(other  than Sections 14.9, 14.10, 14.11, 14.12(a) and 14.16(d)).
Notwithstanding any provision to the contrary contained elsewhere
in  this Agreement or in any other Loan Document, the Agent shall
not  have  any duties or responsibilities, except those expressly
set  forth herein, nor shall the Agent have or be deemed to  have
any  fiduciary  relationship  with any  Lender,  and  no  implied
covenants,  functions, responsibilities, duties,  obligations  or
liabilities shall be read into this Agreement or any  other  Loan
Document  or otherwise exist against the Agent.  Without limiting
the  generality of the foregoing sentence, the use  of  the  term
"agent"  in  this Agreement with reference to the  Agent  is  not
intended  to connote any fiduciary or other implied (or  express)
obligations arising under agency doctrine of any applicable  law.
Instead,  such term is used merely as a matter of market  custom,
and  is  intended  to  create or reflect only  an  administrative
relationship between independent contracting parties.  Except  as
expressly  otherwise provided in this Agreement, the Agent  shall
have  and  may use its sole discretion with respect to exercising
or  refraining from exercising any discretionary rights or taking
or  refraining  from  taking  any  actions  which  the  Agent  is
expressly entitled to take or assert under this Agreement and the
other  Loan  Documents, including, without  limitation,  (a)  the
determination of the applicability of ineligibility criteria with
respect to the calculation of the Availability, (b) the making of
Agent  Advances pursuant to Section 2.2(i), and (c) the  exercise
of  remedies pursuant to Section 11.2, and any action so taken or
not taken shall be deemed consented to by the Lenders.

     14.2 Delegation of Duties.  The Agent may execute any of its
duties  under  this Agreement or any other Loan  Document  by  or
through  agents,  employees  or attorneys-in-fact  and  shall  be
entitled  to advice of counsel concerning all matters  pertaining
to  such  duties.   The  Agent shall not be responsible  for  the
negligence or misconduct of any agent or attorney-in-fact that it
selects  as  long  as  such  selection  was  made  without  gross
negligence or willful misconduct.

     14.3  Liability of Agent.  None of the Agent-Related Persons
shall  (i) be liable for any action taken or omitted to be  taken
by  any of them under or in connection with this Agreement or any
other  Loan  Document  or  the transactions  contemplated  hereby
(except  for  its  own  gross negligence or willful  misconduct),
(ii)  be responsible in any manner to any of the Lenders for  any
recital,  statement,  representation  or  warranty  made  by  the
Borrower or any Subsidiary or Affiliate of the Borrower,  or  any
officer thereof, contained in this Agreement or in any other Loan
Document,  or  in  any certificate, report,  statement  or  other
document referred to or provided for in, or received by the Agent
under  or  in connection with, this Agreement or any  other  Loan
Document,    or   the   validity,   effectiveness,   genuineness,
enforceability or sufficiency of this Agreement or any other Loan
Document,  or for any failure of the Borrower or any other  party
to  any  Loan  Document to perform its obligations  hereunder  or
thereunder  or  (iii) be liable for permitting  the  Borrower  to
retain or obtain any certificate of title for some period of time
to facilitate licensing, noting the Agent's Lien (for the benefit
of  the  secured parties) on the certificates, or  the  purchase,
sale,  transfer  or  other disposition of  the  Included  Revenue
Equipment.  No Agent-Related Person shall be under any obligation
to  any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or  conditions
of,  this Agreement or any other Loan Document, or to inspect the
properties,  books  or  records of the Borrower  or  any  of  the
Borrower's Subsidiaries or Affiliates.

     14.4 Reliance by Agent.

          (a)  The Agent shall be entitled to rely, and shall  be
fully protected in relying, upon any writing, resolution, notice,
consent,  certificate,  affidavit, letter,  telegram,  facsimile,
telex  or  telephone  message, statement  or  other  document  or
conversation believed by it to be genuine and correct and to have
been  signed,  sent or made by the proper Person or Persons,  and
upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected
by  the  Agent. The Agent shall be fully justified in failing  or
refusing  to  take any action under this Agreement or  any  other
Loan  Document  unless  it shall first  receive  such  advice  or
concurrence of the Majority Lenders as it deems appropriate  and,
if  it  so  requests,  it  shall  first  be  indemnified  to  its
satisfaction  by  the Lenders against any and all  liability  and
expense  which  may  be incurred by it by  reason  of  taking  or
continuing to take any such action.  The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under
this  Agreement or any other Loan Document in accordance  with  a
request  or consent of the Majority Lenders and such request  and
any  action  taken  or failure to act pursuant thereto  shall  be
binding upon all of the Lenders.

          (b)   For  purposes of determining compliance with  the
conditions  specified  in  Section 10.1,  each  Lender  that  has
executed  this  Agreement shall be deemed to have  consented  to,
approved  or  accepted or to be satisfied with, each document  or
other matter either sent by the Agent to such Lender for consent,
approval,  acceptance or satisfaction, or required thereunder  to
be  consented to or approved by or acceptable or satisfactory  to
the Lender.

     14.5  Notice of Default.  The Agent shall not be  deemed  to
have  knowledge  or notice of the occurrence of  any  Default  or
Event  of Default, except with respect to defaults in the payment
of  principal, interest and fees required to be paid to the Agent
for  the  account  of the Lenders, unless the  Agent  shall  have
received  written notice from a Lender or the Borrower  referring
to  this  Agreement, describing such Default or Event of  Default
and stating that such notice is a "notice of default."  The Agent
will  notify the Lenders of its receipt of any such notice.   The
Agent  shall  take such action with respect to  such  Default  or
Event  of Default as may be requested by the Majority Lenders  in
accordance  with Article 11; provided, however, that  unless  and
until the Agent has received any such request, the Agent may (but
shall  not  be  obligated to) take such action, or  refrain  from
taking  such  action, with respect to such Default  or  Event  of
Default as it shall deem advisable.

     14.6 Credit Decision.  Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty
to  it, and that no act by the Agent hereinafter taken, including
any  review  of  the affairs of the Borrower and its  Affiliates,
shall  be deemed to constitute any representation or warranty  by
any  Agent-Related Person to any Lender.  Each Lender  represents
to the Agent that it has, independently and without reliance upon
any   Agent-Related  Person  and  based  on  such  documents  and
information as it has deemed appropriate, made its own  appraisal
of  and  investigation into the business, prospects,  operations,
property,  financial and other condition and creditworthiness  of
the   Borrower  and  its  Affiliates,  and  all  applicable  bank
regulatory laws relating to the transactions contemplated hereby,
and  made  its own decision to enter into this Agreement  and  to
extend credit to the Borrower.  Each Lender also represents  that
it  will,  independently  and without reliance  upon  any  Agent-
Related Person and based on such documents and information as  it
shall  deem  appropriate at the time, continue to  make  its  own
credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and  to
make  such investigations as it deems necessary to inform  itself
as  to  the  business, prospects, operations, property, financial
and  other condition and creditworthiness of the Borrower and its
Affiliates.   Except  for notices, reports  and  other  documents
expressly herein required to be furnished to the Lenders  by  the
Agent,  the  Agent  shall not have any duty or responsibility  to
provide   any   Lender  with  any  credit  or  other  information
concerning   the   business,  prospects,  operations,   property,
financial and other condition or creditworthiness of the Borrower
and  its Affiliates which may come into the possession of any  of
the Agent-Related Persons.

     14.7  Indemnification.   Whether  or  not  the  transactions
contemplated hereby are consummated, the Lenders shall  indemnify
upon  demand  the  Agent-Related  Persons  (to  the  extent   not
reimbursed  by or on behalf of the Borrower and without  limiting
the  obligation  of the Borrower to do so), pro  rata,  from  and
against  any  and  all Indemnified Liabilities as  such  term  is
defined in Section 15.11; provided, however, that no Lender shall
be  liable  for the payment to the Agent-Related Persons  of  any
portion  of  such Indemnified Liabilities resulting  solely  from
such  Person's  gross negligence or willful misconduct.   Without
limitation  of  the  foregoing, each Lender shall  reimburse  the
Agent  upon  demand  for  its  ratable  share  of  any  costs  or
out-of-pocket expenses (including Attorney Costs) incurred by the
Agent  in  connection with the preparation, execution,  delivery,
administration,  modification, amendment or enforcement  (whether
through  negotiations, legal proceedings  or  otherwise)  of,  or
legal advice in respect of rights or responsibilities under, this
Agreement,  any other Loan Document, or any document contemplated
by  or  referred to herein, to the extent that the Agent  is  not
reimbursed  for  such expenses by or on behalf of  the  Borrower.
The  undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement  of  the
Agent.

     14.8  Agent in Individual Capacity.  BABC and its Affiliates
may  make  loans to, issue letters of credit for the account  of,
accept  deposits from, acquire equity interests in and  generally
engage  in  any  kind  of  banking,  trust,  financial  advisory,
underwriting  or  other  business  with  the  Borrower  and   its
Subsidiaries  and Affiliates as though BABC were  not  the  Agent
hereunder  and without notice to or consent of the Lenders.   The
Lenders  acknowledge that, pursuant to such activities,  BABC  or
its Affiliates may receive information regarding the Borrower  or
its  Affiliates  (including information that may  be  subject  to
confidentiality  obligations in favor of  the  Borrower  or  such
Subsidiary)  and  acknowledge that the Agent shall  be  under  no
obligation to provide such information to them.  With respect  to
its  Loans, BABC shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though
it  were  not  the  Agent, and the terms "Lender"  and  "Lenders"
include BABC in its individual capacity.

     14.9 Successor Agent.  The Agent may resign as Agent upon 30
days'  notice  to the Lenders and the Borrower.  BABC  agrees  to
resign  if at any time it does not have any Commitments  or  hold
any  Revolving Loans; provided, however, that if the sale by BABC
of  its  Commitments  and Revolving Loans, which  results  in  no
further  Commitments or Revolving Loans outstanding hereunder  by
BABC, is part of a sale, transfer or other disposition by BABC of
substantially  all of its loan portfolio, BABC shall  resign  and
such  purchaser  or transferee shall become the  successor  Agent
hereunder.  If the Agent resigns under this Agreement, subject to
the proviso in the preceding sentence, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders;
provided  that  unless a Default has occurred,  such  appointment
shall  be  subject to the prior written consent of the  Borrower,
such  consent  not to be unreasonably withheld.  If no  successor
agent is appointed prior to the effective date of the resignation
of  the  Agent, the Agent may appoint, after consulting with  the
Lenders,  a  successor agent from among the  Lenders.   Upon  the
acceptance of its appointment as successor agent hereunder,  such
successor  agent  shall  succeed to all the  rights,  powers  and
duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers  and
duties  as Agent shall be terminated. After any retiring  Agent's
resignation hereunder as Agent, the provisions of this Article 14
shall inure to its benefit as to any actions taken or omitted  to
be  taken by it while it was Agent under this Agreement.   If  no
successor  agent has accepted appointment as Agent  by  the  date
which  is  30  days  following  a  retiring  Agent's  notice   of
resignation,  the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform  all  of
the duties of the Agent hereunder until such time, if any, as the
Majority Lenders appoint a successor agent as provided for above.

     14.10     Withholding Tax.

          (a)    If   any   Lender  is  a  "foreign  corporation,
partnership  or trust" within the meaning of the  Code  and  such
Lender claims exemption from, or a reduction of, U.S. withholding
tax  under Sections 1441 or 1442 of the Code, such Lender  agrees
to deliver to the Agent and to the Borrower:

               (i)  if such Lender claims an exemption from, or a
reduction  of, withholding tax under a United States tax  treaty,
properly  completed IRS Forms 1001 and W-8 before the payment  of
any interest in the first calendar year and before the payment of
any  interest in each third succeeding calendar year during which
interest may be paid under this Agreement;

               (ii)  if  such  Lender claims that  interest  paid
under this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade or
business  of  such  Lender, two properly completed  and  executed
copies of IRS Form 4224 before the payment of any interest is due
in  the  first taxable year of such Lender and in each succeeding
taxable  year of such Lender during which interest  may  be  paid
under this Agreement, and IRS Form W-9; and

               (iii)      such  other  form or  forms  (including
forms  replacing  the forms describe above) as  may  be  required
under  the Code or other laws of the United States as a condition
to  exemption  from,  or reduction of, United States  withholding
tax.

Such  Lender agrees to promptly notify the Agent and the Borrower
of  any  change  in  circumstances which would modify  or  render
invalid any claimed exemption or reduction.

          (b)   If any Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing
IRS   Form  1001  and  such  Lender  sells,  assigns,  grants   a
participation  in,  or otherwise transfers all  or  part  of  the
Obligations of the Borrower to such Lender, such Lender agrees to
notify  the  Agent and the Borrower of the percentage  amount  in
which it is no longer the beneficial owner of Obligations of  the
Borrower  to  such  Lender.   To the extent  of  such  percentage
amount,  the Agent will treat such Lender's IRS Form 1001  as  no
longer valid.

          (c)   If  any  Lender  claiming exemption  from  United
States withholding tax by filing IRS Form 4224 with the Agent and
the  Borrower  sells,  assigns, grants  a  participation  in,  or
otherwise  transfers  all  or part  of  the  Obligations  of  the
Borrower  to  such Lender, such Lender agrees to  undertake  sole
responsibility   for   complying   with   the   withholding   tax
requirements imposed by Sections 1441 and 1442 of the Code.

          (d)   If  any Lender is entitled to a reduction in  the
applicable  withholding  tax, the Agent  may  withhold  from  any
interest  payment  to  such Lender an amount  equivalent  to  the
applicable  withholding  tax  after  taking  into  account   such
reduction.   If  the  forms  or other documentation  required  by
subsection  (a) of this Section are not delivered to  the  Agent,
then  the  Agent may withhold from any interest payment  to  such
Lender  not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.

          (e)  If the IRS or any other Governmental Authority  of
the  United States or other jurisdiction asserts a claim that the
Agent  did not properly withhold tax from amounts paid to or  for
the  account of any Lender (because the appropriate form was  not
delivered,  was  not  properly executed, or because  such  Lender
failed  to  notify  the Agent of a change in circumstances  which
rendered  the  exemption from, or reduction of,  withholding  tax
ineffective,  or  for  any  other  reason),  such  Lender   shall
indemnify the Agent and the Borrower fully for all amounts  paid,
directly  or  indirectly,  by  the Agent  as  tax  or  otherwise,
including penalties and interest, and including any taxes imposed
by  any  jurisdiction on the amounts payable to the  Agent  under
this  Section,  together with all costs and  expenses  (including
Attorney  Costs).   The  obligation of  the  Lenders  under  this
subsection shall survive the payment of all Obligations  and  the
resignation or replacement of the Agent.

     14.11     Collateral Matters.

          (a)   The  Lenders  hereby  irrevocably  authorize  the
Agent,  at its option and in its sole discretion, to release  any
Agent's Lien upon any Collateral (i) upon the termination of  the
Commitments  and payment and satisfaction in full by Borrower  of
all Loans and reimbursement obligations in respect of Letters  of
Credit, and the termination of all outstanding Letters of  Credit
(whether  or not any of such obligations are due) and  all  other
Obligations (other than Surviving Indemnities); (ii) constituting
property being sold or disposed of (A) pursuant to the procedures
set  forth in Section 6.2(b), or (B) as to other property if  the
Borrower  certifies to the Agent that the sale or disposition  is
made  in  compliance  with Section 9.8 (and the  Agent  may  rely
conclusively  on any such certificate, without further  inquiry);
(iii)  constituting  property  in which  the  Borrower  owned  no
interest  at  the  time  the Lien was  granted  or  at  any  time
thereafter; or (iv) constituting property leased to the  Borrower
under  a  lease  which  has  expired  or  been  terminated  in  a
transaction  permitted under this Agreement.  Except as  provided
above,  the  Agent  will not release any  of  the  Agent's  Liens
without  the prior written authorization of the Lenders; provided
that  the Agent may, in its discretion, release the Agent's Liens
on Collateral valued in the aggregate not in excess of $2,000,000
in any Fiscal Year without the prior written authorization of the
Lenders.  Upon request by the Agent or the Borrower at any  time,
the  Lenders  will  confirm in writing the Agent's  authority  to
release  any  Agent's Liens upon particular  types  or  items  of
Collateral pursuant to this Section 14.11.

          (b)   Upon  receipt  by the Agent of any  authorization
required  pursuant to Section 14.11(a) from the  Lenders  of  the
Agent's  authority to release any Agent's Liens  upon  particular
types or items of Collateral, and upon at least five (5) Business
Days'  prior  written request by the Borrower,  the  Agent  shall
(and  is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the
Agent's  Liens  upon  such  Collateral; provided,  however,  that
(i)  the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to
liability  or  create  any obligation or entail  any  consequence
other  than  the  release  of  such  Liens  without  recourse  or
warranty,  and  (ii)  such  release  shall  not  in  any   manner
discharge,  affect or impair the Obligations or any Liens  (other
than those expressly being released) upon (or obligations of  the
Borrower  in respect of) all interests retained by the  Borrower,
including (without limitation) the proceeds of any sale,  all  of
which shall continue to constitute part of the Collateral.

          (c)   The Agent shall have no obligation whatsoever  to
any  of  the Lenders to assure that the Collateral exists  or  is
owned  by  the Borrower or is cared for, protected or insured  or
has been encumbered, or that the Agent's Liens have been properly
or  sufficiently  or  lawfully created, perfected,  protected  or
enforced  or  are  entitled  to any particular  priority,  or  to
exercise at all or in any particular manner or under any duty  of
care,  disclosure or fidelity, or to continue exercising, any  of
the  rights, authorities and powers granted or available  to  the
Agent pursuant  to any of the Loan Documents, it being understood
and  agreed  that  in  respect of the  Collateral,  or  any  act,
omission  or  event related thereto, the Agent  may  act  in  any
manner it may deem appropriate, in its sole discretion  given the
Agent's own interest in the Collateral in its capacity as one  of
the  Lenders  and  that the Agent shall have  no  other  duty  or
liability whatsoever to any Lender as to any of the foregoing.

          (d)   From time to time as reasonably requested by  any
Lender,  the Agent shall request information from any Loan  Party
pursuant to this Agreement and shall provide such information  to
such Lender.

     14.12      Restrictions  on Actions by Lenders;  Sharing  of
Payments.

          (a)   Each  of  the Lenders agrees that it  shall  not,
without the express consent of all Lenders, and that it shall, to
the extent it is lawfully entitled to do so, upon the request  of
all  Lenders, set off against the Obligations, any amounts  owing
by  such  Lender to the Borrower or any accounts of the  Borrower
now  or  hereafter  maintained with such  Lender.   Each  of  the
Lenders  further  agrees that it shall not,  unless  specifically
requested  to do so by the Agent, take or cause to be  taken  any
action to enforce its rights under this Agreement or against  the
Borrower, including, without limitation, the commencement of  any
legal  or  equitable proceedings, to foreclose any  Lien  on,  or
otherwise   enforce  any  security  interest  in,  any   of   the
Collateral;  provided,  however, that no such  request  shall  be
required  if  the Agent has resigned and no successor  Agent  has
been appointed.

          (b)   If  at any time or times any Lender shall receive
(i) by payment, foreclosure, setoff or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations of the
Borrower  to  such  Lender arising under, or  relating  to,  this
Agreement  or  the  other Loan Documents,  except  for  any  such
proceeds  or  payments  received by such Lender  from  the  Agent
pursuant  to  the terms of this Agreement, or (ii) payments  from
the  Agent in excess of such Lender's ratable portion of all such
distributions by the Agent, such Lender shall promptly  (1)  turn
the  same  over to the Agent, in kind, and with such endorsements
as may be required to negotiate the same to the Agent, or in same
day  funds, as applicable, for the account of all of the  Lenders
and  for  application to the Obligations in accordance  with  the
applicable provisions of this Agreement, or (2) purchase, without
recourse or warranty, an undivided interest and participation  in
the  Obligations  owed to the other Lenders so that  such  excess
payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if
all  or  part  of such excess payment received by the  purchasing
party  is  thereafter  recovered  from  it,  those  purchases  of
participations  shall  be  rescinded in  whole  or  in  part,  as
applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but  without
interest  except  to  the extent that such  purchasing  party  is
required to pay interest in connection with the recovery  of  the
excess payment.

     14.13       Agency  for  Perfection.   Each  Lender   hereby
appoints each other Lender as agent for the purpose of perfecting
the  Lenders'  security interest in assets which,  in  accordance
with  Article  9 of the UCC can be perfected only by  possession.
Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and,
promptly  upon  the Agent's request therefor shall  deliver  such
Collateral  to  the  Agent  or  in accordance  with  the  Agent's
instructions.

     14.14     Payments by Agent to Lenders.  All payments to  be
made  by  the  Agent to the Lenders  shall be made by  bank  wire
transfer  or internal transfer of immediately available funds  to
their  respective wire transfer accounts listed on the  signature
pages below; or pursuant to such other wire transfer instructions
as  each Lender may designate for itself by written notice to the
Agent.   Concurrently  with each such payment,  the  Agent  shall
identify whether such payment (or any portion thereof) represents
principal,  premium  or  interest  on  the  Revolving  Loans   or
otherwise.

     14.15      Concerning  the Collateral and the  Related  Loan
Documents.  Each Lender authorizes and directs the Agent to enter
into this Agreement and the other Loan Documents relating to  the
Collateral,  for the ratable benefit of the L/C  Issuer  and  the
Lenders.   Each Lender agrees that any action taken by the  Agent
or  Majority  Lenders  in  accordance  with  the  terms  of  this
Agreement or the other Loan Documents relating to the Collateral,
and  the  exercise by the Agent or the Majority Lenders of  their
respective powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be for
the  benefit of and binding upon the L/C Issuer and  all  of  the
Lenders.

     14.16     Field Audit and Examination Reports; Disclaimer by
Lenders.   Except  as  otherwise  expressly  set  forth  in  this
Agreement, by signing this Agreement, each Lender:

          (a)  is deemed to have requested that the Agent furnish
such  Lender, promptly after it becomes available, a copy of each
field   audit   or  examination  report  (each  a  "Report"   and
collectively, "Reports") prepared by the Agent;

          (b)   expressly  agrees and acknowledges  that  neither
BABC nor the Agent (i) makes any representation or warranty as to
the  accuracy  of  any Report, or (ii) shall be  liable  for  any
information contained in any Report;

          (c)  expressly agrees and acknowledges that the Reports
are  not comprehensive audits or examinations, that the Agent  or
other party performing any audit or examination will inspect only
specific  information  regarding  the  Borrower  and  will   rely
significantly upon the Borrower's books and records, as  well  as
on representations of the Borrower's personnel;

          (d)   agrees  to  keep  all  Reports  confidential  and
strictly  for its internal use, and not to distribute  except  to
its participants or prospective participants or assignees, or use
any Report in any other manner; and

          (e)   without  limiting  the generality  of  any  other
indemnification  provision contained in this  Agreement,  agrees:
(i)  to  hold  the  Agent and any such other Lender  preparing  a
Report harmless from any action the indemnifying Lender may  take
or  conclusion the indemnifying Lender may reach or draw from any
Report   in   connection   with  any  loans   or   other   credit
accommodations that the indemnifying Lender has made or may  make
to  the Borrower, or the indemnifying Lender's participation  in,
or  the indemnifying Lender's purchase of, a loan or loans of the
Borrower; and (ii) to pay and protect, and indemnify, defend  and
hold  the  Agent  and  any such other Lender preparing  a  Report
harmless  from  and  against, the claims,  actions,  proceedings,
damages,  costs,  expenses and other amounts (including,  without
limitation  Attorney Costs) incurred by the Agent  and  any  such
other  Lender preparing a Report as the direct or indirect result
of  any  third parties who might obtain all or part of any Report
through the indemnifying Lender.

     14.17     Co-Agents.  None of the Lenders identified on  the
facing  page or signature pages of this Agreement as a "co-agent"
or  as  a  "co-syndication agent" shall have  any  right,  power,
obligation,   liability,  responsibility  or  duty   under   this
Agreement  other  than those applicable to all Lenders  as  such.
Without limiting the foregoing, none of the Lenders so identified
as  a "co-syndication agent" shall have or be deemed to have  any
fiduciary relationship with any Lender.  Each Lender acknowledges
that  it has not relied, and will not rely, on any of the Lenders
so  identified  in deciding to enter into this  Agreement  or  in
taking or not taking action hereunder.

                           ARTICLE 15

                          MISCELLANEOUS

     15.1  Cumulative Remedies; No Prior Recourse to  Collateral.
The  enumeration  herein of the Agent's and each Lender's  rights
and remedies is not intended to be exclusive, and such rights and
remedies are in addition to and not by way of limitation  of  any
other rights or remedies that the Agent and the Lenders may  have
under the UCC or other applicable law.  The Agent and the Lenders
shall  have  the  right, in their sole discretion,  to  determine
which rights and remedies are to be exercised and in which order.
The  exercise  of  one  right or remedy shall  not  preclude  the
exercise  of  any others, all of which shall be cumulative.   The
Agent  and the Lenders may, without limitation, proceed  directly
against the Borrower to collect the Obligations without any prior
recourse to the Collateral.  No failure to exercise and no  delay
in exercising, on the part of the Agent or any Lender, any right,
remedy,  power or privilege hereunder, shall operate as a  waiver
thereof;  nor shall any single or partial exercise of any  right,
remedy,  power  or  privilege hereunder  preclude  any  other  or
further  exercise  thereof or the exercise of  any  other  right,
remedy, power or privilege.

     15.2  Severability.   The illegality or unenforceability  of
any  provision of this Agreement or any instrument  or  agreement
required  hereunder  shall not in any way affect  or  impair  the
legality  or enforceability of the remaining provisions  of  this
Agreement or any instrument or agreement required hereunder.

     15.3  Governing  Law; Choice of Forum; Service  of  Process;
Jury Trial Waiver.

          (a)  THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS
AND  LIABILITIES OF THE PARTIES HERETO DETERMINED  IN  ACCORDANCE
WITH  THE  INTERNAL  LAWS (AS OPPOSED TO  THE  CONFLICT  OF  LAWS
PROVISIONS  PROVIDED  THAT  PERFECTION  ISSUES  WITH  RESPECT  TO
ARTICLE  9  OF  THE UCC MAY GIVE EFFECT TO APPLICABLE  CHOICE  OR
CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC)  OF  THE
STATE  OF  CALIFORNIA; PROVIDED THAT THE AGENT  AND  THE  LENDERS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

          (b)   ANY  LEGAL ACTION OR PROCEEDING WITH  RESPECT  TO
THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN  THE
COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE
NORTHERN OR CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION  AND
DELIVERY  OF THIS AGREEMENT, EACH OF THE LOAN PARTIES, THE  AGENT
AND  THE  LENDERS  CONSENTS, FOR ITSELF AND  IN  RESPECT  OF  ITS
PROPERTY,  TO  THE  NON-EXCLUSIVE JURISDICTION OF  THOSE  COURTS.
EACH  OF  THE LOAN PARTIES, THE AGENT AND THE LENDERS IRREVOCABLY
WAIVES  ANY OBJECTION, INCLUDING ANY OBJECTION TO THE  LAYING  OF
VENUE  OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH  IT
MAY  NOW  OR  HEREAFTER HAVE TO THE BRINGING  OF  ANY  ACTION  OR
PROCEEDING  IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT  OR
ANY  DOCUMENT  RELATED  HERETO.  NOTWITHSTANDING  THE  FOREGOING:
(1)  THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING  ANY
ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY OTHER LOAN PARTY
OR  ANY  OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF ANY  OTHER
JURISDICTION   THE  AGENT  OR  THE  LENDERS  DEEM  NECESSARY   OR
APPROPRIATE  IN  ORDER  TO  REALIZE ON THE  COLLATERAL  OR  OTHER
SECURITY  FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES  HERETO
ACKNOWLEDGES  THAT ANY APPEALS FROM THE COURTS DESCRIBED  IN  THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD  BY  A  COURT
LOCATED OUTSIDE THOSE JURISDICTIONS.

          (c)   EACH  OF THE LOAN PARTIES HEREBY WAIVES  PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT
REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS SET  FORTH  ON
THE  SIGNATURE  PAGE OF THIS AGREEMENT (AS SUCH  ADDRESS  MAY  BE
MODIFIED  BY A NOTICE GIVEN PURSUANT TO SECTION 15.8 AND  SERVICE
SO  MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER  THE
SAME  SHALL  HAVE BEEN SO DEPOSITED IN THE U.S.  MAILS.   NOTHING
CONTAINED  HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE  LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.

          (d)    NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  THIS
AGREEMENT  TO THE CONTRARY, ANY CONTROVERSY OR CLAIM  BETWEEN  OR
AMONG THE PARTIES, INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT
OF  OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT  AND
ANY  CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL AT THE
REQUEST   OR  EITHER  PARTY  HERETO  BE  DETERMINED  BY   BINDING
ARBITRATION.   The arbitration shall be conducted  in  accordance
with  the  United States Arbitration Act (Title  9,  U.S.  Code),
notwithstanding  any choice of law provision in  this  Agreement,
and  under  the  Commercial  Rules of  the  American  Arbitration
Association  ("AAA").   The arbitrator(s) shall  give  effect  to
statutes of limitation in determining any claim.  Any controversy
concerning whether an issue is arbitrable shall be determined  by
the  arbitrator(s).  Judgment upon the arbitration award  may  be
entered  in  any court having jurisdiction.  The institution  and
maintenance  of an action for judicial relief or  pursuant  to  a
provisional or ancillary remedy shall not constitute a waiver  of
the right of either party, including the plaintiff, to submit the
controversy  or claim to arbitration if any other party  contests
such action for judicial relief.

          (e)   Notwithstanding the provisions of (d)  above,  no
controversy  or  claim shall be submitted to arbitration  without
the  consent  of  all  parties if, at the time  of  the  proposed
submission, such controversy or claim arises from or  related  to
an  obligation  to  the Lender which is secured  by  real  estate
property  collateral  (exclusive  of  real  estate  space   lease
assignments).  If all the parties do not consent to submission of
such  a  controversy or claim to arbitration, the controversy  or
claim shall be determined as provided in Section 15.3(f).

          (f)   At  the request of either party a controversy  or
claim  which  is  not submitted to arbitration  as  provided  and
limited  in  Section  15.3(d)  and (e)  shall  be  determined  by
judicial  reference.  If such an election is  made,  the  parties
shall designate to the court a referee or referees selected under
the  auspices  of  the AAA in the same manner as arbitrators  are
selected in AAA-sponsored proceedings.  The presiding referee  of
the panel, or the referee if there is a single referee, shall  be
an  active  attorney or retired judge.  Judgment upon  the  award
rendered  by  such referee or referees shall be  entered  in  the
court in which such proceeding was commenced.

          (g)  No provision of Sections 15.3(d) through (f) shall
limit the right of the Agent or the Lenders to exercise self-help
remedies such as setoff, foreclosure against or sale of any  real
or   personal  property  collateral  or  security,  or  obtaining
provisional  or  ancillary remedies from  a  court  of  competent
jurisdiction  before,  after,  or  during  the  pendency  of  any
arbitration  or other proceeding.  The exercise of a remedy  does
not  waive the right of either party to resort to arbitration  or
reference.  At the Agent's option, foreclosure under  a  deed  of
trust or mortgage may be accomplished either by exercise of power
of  sale  under  the  deed of trust or mortgage  or  by  judicial
foreclosure.

     15.4 WAIVER OF JURY TRIAL.

          (a)   SUBJECT TO THE PROVISIONS OF SECTION 15.3(d), THE
LOAN  PARTIES,  THE  LENDERS  AND  THE  AGENT  EACH  WAIVE  THEIR
RESPECTIVE  RIGHTS TO A TRIAL BY JURY OF ANY CLAIM  OR  CAUSE  OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR  THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED  PERSON,  PARTICIPANT  OR  ASSIGNEE,  WHETHER  WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE  LOAN
PARTIES, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM
OR  CAUSE  OF  ACTION SHALL BE TRIED BY A COURT TRIAL  WITHOUT  A
JURY.   WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT  THEIR  RESPECTIVE RIGHT TO A TRIAL BY  JURY  IS  WAIVED  BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING  WHICH  SEEKS, IN WHOLE OR IN PART, TO  CHALLENGE  THE
VALIDITY  OR ENFORCEABILITY OF THIS AGREEMENT OR THE  OTHER  LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER  SHALL
APPLY  TO  ANY  SUBSEQUENT AMENDMENTS, RENEWALS,  SUPPLEMENTS  OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

          (b)   EACH OF THE LOAN PARTIES AGREES THAT IT WILL  NOT
ASSERT  AGAINST  AGENT OR ANY LENDER ANY CLAIM FOR CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES IN CONNECTION  WITH  THIS
AGREEMENT  OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

     15.5 Survival of Representations and Warranties.  All of the
Borrower's  representations  and  warranties  contained  in  this
Agreement  shall survive the execution, delivery, and  acceptance
thereof by the parties, notwithstanding any investigation by  the
Agent or the Lenders or their respective agents.

     15.6 Other Security and Guaranties.  The Agent, may, without
notice  or  demand  and without affecting the Borrower's  or  any
other  Loan  Party's obligations hereunder, from  time  to  time:
(a)  take  from  any Person and hold collateral (other  than  the
Collateral) for the payment of all or any part of the Obligations
and  exchange,  enforce or release such collateral  or  any  part
thereof;  and (b) accept and hold any endorsement or guaranty  of
payment  of  all  or any part of the Obligations and  release  or
substitute any such endorser or guarantor, or any Person who  has
given  any  Lien  in  any other collateral as  security  for  the
payment  of  all  or any part of the Obligations,  or  any  other
Person  in  any  way  obligated to pay all or  any  part  of  the
Obligations.

     15.7  Fees and Expenses.  The Borrower agrees to pay to  the
Agent, for its benefit, to each Lender with respect to costs  and
expenses  specified in clause (i) below, and to NationsBank  with
respect  to  audit costs to the extent specified  in  clause  (f)
below,  in each case on demand, all reasonable costs and expenses
that Agent (or as applicable, the Lenders or NationsBank) pays or
incurs   in   connection   with  the  negotiation,   preparation,
syndication,     consummation,    administration,    enforcement,
restructuring, work-out and termination of this Agreement or  any
of  the  other  Loan  Documents, including,  without  limitation:
(a)  Attorney Costs; (b) costs and expenses (including attorneys'
and  paralegals' fees and disbursements which shall  include  the
allocated   costs   of   Agent's  in-house   counsel   fees   and
disbursements) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with the Loan Documents and  the
transactions contemplated thereby; (c) costs and expenses of lien
and title searches and title insurance; (d) taxes, fees and other
charges  for  filing financing statements and continuations,  and
other actions to perfect, protect, and continue the Agent's Liens
(including  costs and expenses paid or incurred by the  Agent  in
connection with the consummation of Agreement); (e) sums paid  or
incurred  to  pay any amount or take any action required  of  the
Borrower  or any of its Affiliates under the Loan Documents  that
the  Borrower  or  any  such Affiliate  fails  to  pay  or  take;
(f)  costs of appraisals, inspections, and verifications  of  the
Collateral,  including, without limitation, travel, lodging,  and
meals  for  inspections  of  the Collateral  and  the  Borrower's
operations  by  the Agent or its agents and/or  NationsBank  plus
$500  per day (or portion thereof) for each agent or employee  of
the   Agent  and/or  NationsBank  with  respect  to  each   field
examination  or  audit and the preparation of  reports  thereof),
provided,  that  any  audits  conducted  or  participated  in  by
NationsBank  shall  not exceed one audit per Fiscal  Year  or  be
longer  than  five (5) calendar days; (g) costs and  expenses  of
forwarding  loan proceeds, collecting checks and other  items  of
payment,  and  establishing and maintaining Payment Accounts  and
lock  boxes; (h) costs and expenses of preserving and  protecting
the  Collateral; (i) costs and expenses (including attorneys' and
paralegals' fees and disbursements) incurred by each Lender after
the  occurrence and during the continuance of an Event of Default
relating to a work-out or restructuring of the Obligations or the
exercise   of   remedies;  (j)  costs  and  expenses   (including
attorneys'  and  paralegals' fees and disbursements  which  shall
include  the allocated cost of Agent's in-house counsel fees  and
disbursements)  paid  or  incurred  to  obtain  payment  of   the
Obligations, enforce the Agent's Liens, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions of  the
Loan  Documents,  or  to  defend any claims  made  or  threatened
against  the  Agent or any Lender arising out of the transactions
contemplated  hereby (including without limitation,  preparations
for  and consultations concerning any such matters); and (k)  out
of  pocket  costs  of  the Lenders incurred  in  connection  with
bankruptcy or insolvency proceedings involving the Loan  Parties,
including  without limitation fees and out of pocket expenses  of
counsel  to  the Lenders and consultants retained by  the  Agent.
The Borrower also agrees to pay the reasonable attorneys fees and
costs  incurred  by each of NationsBank and Caisse  Nationale  De
Credit  Agricole (including the allocated costs of their in-house
counsel   fees   and  disbursements)  in  connection   with   the
documentation  of  this  Agreement in an  amount  not  to  exceed
$30,000  in the aggregate.  The foregoing shall not be  construed
to  limit  any  other provisions of the Loan Documents  regarding
costs  and  expenses  to be paid by the  Borrower.   All  of  the
foregoing  costs and expenses shall be charged to the  Borrower's
Loan Account as Revolving Loans as described in Section 4.4.

     15.8  Notices.   Except  as otherwise provided  herein,  all
notices,  demands  and  requests that any party  is  required  or
elects  to  give  to  any other shall be  in  writing,  or  by  a
telecommunications device capable of creating a  written  record,
and  any  such  notice shall become effective (a)  upon  personal
delivery  thereof,  including, but not limited  to,  delivery  by
overnight  mail and courier service, (b) four (4) days  after  it
shall  have  been  mailed  by United States  mail,  first  class,
certified or registered, with postage prepaid, or (c) in the case
of  notice  by  such a telecommunications device,  when  properly
transmitted, in each case addressed to the party to  be  notified
at its address set forth on the signature pages below; or to such
other  address  as such party may designate for  itself  by  like
notice.   Failure or delay in delivering copies  of  any  notice,
demand,   request,  consent,  approval,  declaration   or   other
communication  to the persons designated above to receive  copies
shall  not  adversely affect the effectiveness  of  such  notice,
demand,   request,  consent,  approval,  declaration   or   other
communication.

     15.9 Waiver of Notices.  Unless otherwise expressly provided
herein,  the Borrower waives presentment, protest and  notice  of
demand  or  dishonor and protest as to any instrument, notice  of
intent  to  accelerate the Obligations and notice of acceleration
of the Obligations, as well as any and all other notices to which
it  might otherwise be entitled.  No notice to or demand  on  the
Borrower  which the Agent or any Lender may elect to  give  shall
entitle  the Borrower to any or further notice or demand  in  the
same, similar or other circumstances.

     15.10      Binding Effect.  The provisions of this Agreement
shall  be binding upon and inure to the benefit of the respective
representatives, successors, and assigns of the  parties  hereto;
provided, however, that no interest herein may be assigned by the
Borrower  without  prior written consent of the  Agent  and  each
Lender.   The  rights and benefits of the Agent and  the  Lenders
hereunder  shall, if such Persons so agree, inure  to  any  party
acquiring any interest in the Obligations or any part thereof.

     15.11      Indemnity  of the Agent and the  Lenders  by  the
Borrower.  The Borrower agrees to defend, indemnify and hold  the
Agent-Related Persons, and each Lender and each of its respective
officers,    directors,   employees,    counsel,    agents    and
attorneys-in-fact (each, an "Indemnified Person")  harmless  from
and   against  any  and  all  liabilities,  obligations,  losses,
damages,  penalties, actions, judgments, suits,  costs,  charges,
expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time (including at any time
following  repayment of the Revolving Loans and the  termination,
resignation  or  replacement of the Agent or replacement  of  any
Lender)  be imposed on, incurred by or asserted against any  such
Person in any way relating to or arising out of this Agreement or
any  document  contemplated  by or referred  to  herein,  or  the
transactions contemplated hereby, or any action taken or  omitted
by  any  such  Person  under or in connection  with  any  of  the
foregoing,   including   with  respect  to   any   investigation,
litigation or proceeding (including any Insolvency Proceeding  or
appellate  proceeding)  related  to  or  arising  out   of   this
Agreement, any other Loan Document, or the Revolving Loans or the
use  of the proceeds thereof which arise from assertions by third
parties, whether or not any Indemnified Person is a party thereto
(all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Borrower shall have no obligation hereunder to
any  Indemnified  Person with respect to Indemnified  Liabilities
resulting  solely from the gross negligence or willful misconduct
of  such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.

     15.12      Final  Agreement.  This Agreement and  the  other
Loan  Documents are intended by the Borrower, the Agent  and  the
Lenders  to  be the final, complete, and exclusive expression  of
the  agreement between them.  This Agreement supersedes  any  and
all  prior  oral  or written agreements relating to  the  subject
matter  hereof  (other  than the Fee Letter).   No  modification,
rescission,  waiver, release, or amendment of  any  provision  of
this  Agreement or any other Loan Document shall be made,  except
by  a written agreement signed by the Borrower (or other affected
Loan  Party) and a duly authorized officer of each of  the  Agent
the Required Lenders, the Majority Lenders or all of the Lenders,
as the case may be.  This Agreement is subject to the terms of an
Intercreditor  Agreement dated as of the date of  this  Agreement
among  BABC,  as Agent, the Parent, Menlo Logistics, Inc.,  Emery
Air Freight Corporation and Con-Way Transportation Services, Inc.

     15.13      Counterparts.  This Agreement may be executed  in
any  number  of counterparts, and by the Agent, each Lender,  the
Borrower  and  the  other Loan Parties in separate  counterparts,
each  of  which  shall be an original, but  all  of  which  shall
together constitute one and the same agreement.

     15.14       Captions.   The  captions  contained   in   this
Agreement  are  for  convenience of reference only,  are  without
substantive  meaning  and  should not  be  construed  to  modify,
enlarge, or restrict any provision.

     15.15      Right of Setoff.  In addition to any  rights  and
remedies  of the Lenders provided by law, if an Event of  Default
exists  or the Revolving Loans have been accelerated, each Lender
is  authorized  at any time and from time to time, without  prior
notice  to the Borrower (or other affected Loan Party), any  such
notice  being waived by the Borrower(and the other Loan  Parties)
to  the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of  the
Borrower  (or  other  affected Loan Party) against  any  and  all
Obligations  owing  to  such Lender, now or  hereafter  existing,
irrespective  of  whether or not the Agent or such  Lender  shall
have  made  demand under this Agreement or any Loan Document  and
although  such Obligations may be contingent or unmatured.   Each
Lender  agrees promptly to notify the Borrower (or other affected
Loan  Party) and the Agent after any such set-off and application
made  by such Lender; provided, however, that the failure to give
such  notice  shall not affect the validity of such  set-off  and
application.   NOTWITHSTANDING THE  FOREGOING,  NO  LENDER  SHALL
EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST
ANY  DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWER (OR  OTHER  LOAN
PARTY)  HELD  OR  MAINTAINED BY SUCH  LENDER  WITHOUT  THE  PRIOR
WRITTEN UNANIMOUS CONSENT OF THE LENDERS.

          IN  WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.

Notices:                        "BORROWER"

David F. Morrison               Consolidated Freightways
Chief Financial Officer         Corporation of Delaware, a
Consolidated Freightways        Delaware corporation
Corporation of Delaware
175 Linfield Drive
Menlo Park, CA 94025
                                By:/s/Robert E. Wrightson
Tel: 415-326-1700               Name:Robert E. Wrightson
Fax: 415-617-6702               Title:Senior Vice President

       and                      Address:   175 Linfield Drive
                                           Menlo Park, CA 94025
James R. Tener                  Telephone No.:415-326-1700
Director, Financial Accounting  Telecopy No.: 415-617-6702
Consolidated Freightways
Corporation of Delaware
P.O. Box 3175
Portland, OR 97208

Tel: 503-499-3199
Fax: 503-499-2131


Notices:                        "PARENT"

David F. Morrison               Consolidated Freightways
Chief Financial Officer         Corporation, a Delaware
Consolidated Freightways        corporation
Corporation
175 Linfield Drive
Menlo Park, CA 94025
                                By:/s/Robert E. Wrightson
Tel: 415-326-1700               Name:Robert E. Wrightson
Fax: 415-617-6702               Title:Senior Vice President
                                Address:   175 Linfield Drive
       and                                 Menlo Park, CA 94025
                                Telephone No.: 415-326-1700
James R. Tener                  Telecopy No.:  415-617-6702
Director, Financial Accounting
Consolidated Freightways
Corporation
P.O. Box 3175
Portland, OR 97208

Tel: 503-499-3199
Fax: 503-499-2131


Notices:                        "LELAND"

David F. Morrison               Leland James Service
Chief Financial Officer         Corporation, a Delaware
Leland James Service            corporation
Corporation
175 Linfield Drive
Menlo Park, CA 94025
                                By:/s/David F. Morrison
Tel: 415-326-1700               Name:David F. Morrison
Fax: 415-617-6702               Title:Vice President and Treasurer
                                Address:   175 Linfield Drive
       and                                 Menlo Park, CA 94025
                                Telephone No.: 415-326-1700
James R. Tener                  Telecopy No.:  415-617-6702
Director, Financial Accounting
Leland James Service
Corporation
P.O. Box 3175
Portland, OR 97208

       or

1717 N.W. 21st Street
Portland, OR 97209

Tel: 503-499-3199
Fax: 503-499-2131


                                "AGENT"

                                BankAmerica Business Credit,
                                Inc., as the Agent



                                By:/s/Joyce White
                                Name:Joyce White
                                Title:Senior Vice President
                                Address:   55 South Lake Avenue
                                           Ninth Floor
                                           Pasadena, CA  91101
                                Telephone No.: (818) 397-1800
                                Telecopy No.:  (818) 397-1805


                                "LENDERS"

Commitment:  $75,000,000        BankAmerica Business Credit,
                                Inc., as a Lender



                                By:/s/Joyce White
                                Name:Joyce White
                                Title:Senior Vice President
                                Address:   55 South Lake Avenue
                                           Ninth Floor
                                           Pasadena, CA  91101
                                Telephone No.: (818) 397-1800
                                Telecopy No.:  (818) 397-1805

                                Wire transfer information:

                                ABA No.:   121-000-358
                                Attention: Bank of America
                                           555 California Street
                                           San Francisco, CA
                                94104
                                Acct. No.: 12575-03561
                                Reference: Consolidated
                                Freightways


Commitment:  $35,000,000        NationsBank of Texas, N.A., as a
                                Lender



                                By:/s/Anne E. Carbone
                                Name:  Anne E. Carbone
                                Title: Vice President
                                Address:   NationsBank of Texas,
                                N.A.
                                           901 Main Street, 6th
                                Floor
                                           Dallas, TX  75202
                                Telephone No.: 214/508-0432
                                Telecopy No.:  214/508-3501

                                Wire transfer information:

                                ABA No.:   111000012
                                Attention: Business Credit/
                                           Regional Manager:
                                URGENT
                                Acct. No.: 0180019471
                                Reference: Consolidated
                                Freightways
                                           Corporation of
                                Delaware


Commitment:  $20,000,000        Caisse Nationale De Credit
                                Agricole, as a Lender



                                By:/s/Marcy S. Lyons
Copy all notices to:            Name:  Marcy S. Lyons
Marcy Lyons                     Title: Vice President
Caisse Nationale De Credit      Address:   Caisse Nationale De
Agricole                        Credit
101 California Street, Suite               Agricole
4390                                       55 East Monroe Street
San Francisco, California                  Chicago, IL  60603
94111                           Telephone No.: (312) 372-9200
Telephone:  (415) 391-0810      Telecopy No.:  (312) 372-4625
Telecopy:    (415) 986-4116
                                Wire transfer information:

                                ABA No.: 021-000238
                                Attention:     Stacey
                                Acct. No.:     Credit Agricole-
                                         Chicago Branch
                                #63000205
                                Reference:     Consolidated
                                Freightways

Commitment:  $35,000,000        Transamerica Business Credit
                                Corporation, as a Lender



                                By:/s/Matthew N. McAlpine
                                Name:  Matthew N. McAlpine
                                Title: Vice President
                                Address: 8750 West Bryn Mawr
                                Avenue
                                       Suite 720
                                       Chicago, IL 60631
                                Telephone No.:  773-864-3979
                                Telecopy No.:  773-380-6169

                                Wire transfer information:

                                ABA No.:  071000013
                                Acct. No.: 52-95416
                                       First Chicago
                                       One First National Plaza
                                       Chicago, IL 60670
                                Reference: Consolidated Freightways






Commitment:  $25,000,000        Congress Financial Corporation
                                (Western), as a Lender



                                By:/s/Vicky L. Balmot
                                Name:  Vicky L. Balmot
                                Title: Senior Vice President
                                Address:   225 South Lake Avenue
                                           Suite 1000
                                           Pasadena, CA  91101
                                Telephone No.: (818) 304-4900
                                Telecopy No.:  (818) 304-4949

                                Wire transfer information:

                                ABA No.:   021000021
                                Attention: Susan Freed
                                Acct. No.: 322-020530
                                Reference: Consolidated
                                Freightways
                                           Corp. of Delaware


Commitment:  $20,000,000        The CIT Group/Business Credit,
                                Inc., as a Lender



                                By:/s/Robert Castine
                                Name:  Robert Castine
                                Title: Assistant Vice President
                                Address:   The CIT
                                Group/Business
                                           Credit, Inc.
                                           300 South Grand Avenue,
                                           3rd Floor
                                           Los Angeles, CA
                                90071
                                Telephone No.:(213) 613-2522
                                Telecopy No.: (213) 613-2588

                                Wire transfer information:

                                ABA No.:   021000021
                                Attention: The Chase Manhattan
                                Bank,
                                           New York, NY 10041-
                                0199
                                Acct. No.: 144054227
                                Reference: Consolidated
                                Freightways
                                           Corporation of
                                Delaware






Commitment:  $15,000,000        BTM Capital Corporation, as a
                                Lender



                                By:/s/William R. York Jr.
                                Name:  William R. York Jr.
                                Title: Senior Vice President
                                Address:   BTM Capital
                                Corporation
                                           Trammell Crow Center
                                           LB-101
                                           2001 Ross Avenue,
                                Suite 3160
                                           Dallas, TX  75201
                                Telephone No.: 214/954-0770
                                Telecopy No.:  214/954-0781

                                Wire transfer information:

                                ABA No.:   011-000-390
                                Attention: Tim Gilbert
                                Acct. No.: DDA # 521-11235
                                Reference: Consolidated
                                Freightways
                                           Corporation of
                                Delaware






                                "L/C ISSUER"

                                NationsBank of Texas, N.A., as
                                L/C Issuer



                                By:/s/ Anne E. Carbone
                                Name:  Anne E. Carbone
                                Title: Vice President
                                Address:   901 Main Street, 6th
                                Floor
                                           Dallas, TX 75202
                                Telephone No.: 214-508-0432
                                Telecopy No.:  214-508-3501






                     AMENDMENT NO. 1 TO

                 LOAN AND SECURITY AGREEMENT

          This Amendment No. 1 to Loan and Security
Agreement is made as of February 28, 1997 by and among each
of the undersigned and amends that certain Loan and Security
Agreement, dated as of November 27, 1996 (the "Loan
Agreement"), among the financial institutions listed on the
signature pages thereof as lenders (such financial
institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), BankAmerica
Business Credit, Inc., a Delaware corporation, as agent for
the Lenders (in its capacity as agent, the "Agent"),
NationsBank of Texas, N.A., as the L/C Issuer and as co-
syndication agent for the Lenders, Caisse Nationale De
Credit Agricole, as co-agent for the Lenders, Consolidated
Freightways Corporation of Delaware, a Delaware corporation,
(the "Borrower"), Consolidated Freightways Corporation (the
"Parent") and Leland James Service Corporation ("Leland").
Capitalized terms used herein without definition have the
meanings assigned thereto in the Loan Agreement.

                          RECITALS

     A.The Borrower has requested that certain provisions
of the Loan Agreement be amended as more fully described
below.

     B.On the terms and subject to the conditions set forth
in this Amendment, the parties to the Loan Agreement have
agreed to the amendments to the Loan Agreement as set forth
below.

                          AGREEMENT

     In consideration of the foregoing, and for good and
valuable consideration, the receipt of which is hereby
acknowledged, the undersigned hereby agree as follows:

                          ARTICLE 1
          AMENDMENTS TO LOAN AND SECURITY AGREEMENT

     1.1    Amendment to the Definition of "Excluded
Revenue Equipment".  The definition of "Excluded Revenue
Equipment" set forth in Section 1.1 of the Agreement is
hereby amended and restated to read in its entirety as
follows:

          "Excluded Revenue Equipment" means the
     Revenue Equipment listed on Schedule 8.31,
     together with any personal property (such as
     licenses, maintenance contracts and insurance
     contracts) which directly, specifically and
     exclusively relates to such Excluded Revenue
     Equipment.  For the avoidance of doubt, Excluded
     Revenue Equipment shall include (a) any Revenue
     Equipment leased as of November 27, 1996 pursuant
     to a Synthetic Lease, and (b) any replacement of
     any such Revenue Equipment to the extent that such
     Revenue Equipment (i) was lost, damaged, destroyed
     or taken in connection with a casualty, (ii) was
     replaced with proceeds received as a result of
     such casualty, and (iii) was replaced by
     replacement Revenue Equipment which is leased by
     the Borrower under a lease agreement with the same
     lessor; provided that the monthly payments due
     under such lease agreement with respect to such
     replacement Revenue Equipment do not exceed the
     monthly payments which would have been payable
     under the Synthetic Lease with respect to the
     Revenue Equipment which was the subject of the
     casualty.  For the avoidance of doubt, the states
     listed on Schedule 8.31 with respect to Excluded
     Revenue Equipment identify the Excluded Revenue
     Equipment as of January 23, 1997.  Changes in the
     state of location of Excluded Revenue Equipment
     (or Included Revenue Equipment) on and after
     November 27, 1996 shall not affect the
     characterization of Revenue Equipment as Excluded
     Revenue Equipment or Included Revenue Equipment."

     1.2    Amendment to the Definition of "Permitted
Liens".  Clause (h) of the definition of "Permitted Liens"
set forth in Section 1.1 of the Agreement is hereby amended
and restated to read in its entirety as follows:

          "(h) Liens on Excluded Revenue Equipment and any
     Lien (i) in favor of ABN AMRO Bank, N.V., as Agent,
     under the Security Agreement dated as of January 23,
     1997 (without giving effect to any amendment thereto,
     the "ABN AMRO Security Agreement") made by the Borrower
     in favor of and ABN AMRO Bank, N.V., as Agent for
     certain "Lessors", in the "Collateral" (as defined in
     the ABN AMRO Security Agreement) described in Section
     1(d) of the ABN AMRO Security Agreement to the extent
     that such Collateral applies both to Vehicles (as
     defined in the ABN AMRO Security Agreement) and to
     Included Revenue Equipment, or (ii) in favor of
     BankAmerica Leasing & Capital Corp., as lessor under a
     Synthetic Lease, or in favor of the Former Parent if
     the Former Parent has guaranteed the Borrower's
     obligations under such Synthetic Lease, if and only if
     the description of collateral in the applicable
     security agreement applies both to Included Revenue
     Equipment and to Excluded Revenue Equipment, and the
     collateral described in, and terms and conditions of,
     the applicable security agreement are substantially the
     same (except that the collateral description may relate
     to other vehicles within the definition of Excluded
     Revenue Equipment) as the collateral described in, and
     the terms and conditions of, the ABN AMRO Security
     Agreement;"

     1.3    Amendment of Schedule 8.31 and 8.32.
Schedule 8.31 is hereby amended and restated to read in
its entirety as set forth on Schedule 8.31 attached
hereto.  Schedule 8.32 is hereby amended and restated
to read in its entirety as set forth on Schedule 8.32
attached hereto.


                          ARTICLE 2
            CONSENT TO AMENDMENT AND RESTATEMENT
               OF THE INTERCREDITOR AGREEMENT

     2.1    Consent to Amendment and Restatement of the
Intercreditor Agreement.  By its signature below, each
Lender consents to the execution and delivery of the Amended
and Restated Intercreditor Agreement substantially in the
form attached hereto as Exhibit A.

                          ARTICLE 3
               REPRESENTATIONS AND WARRANTIES

     Each Loan Party warrants and represents to the Agent
and the Lenders that:

     3.1    Representations and Warranties True and
Correct.  The representations and warranties contained in
the Agreement and the other Loan Documents are correct in
all material respects on and as of the date hereof.

     3.2    No Default or Event of Default.  No event has
occurred and is continuing which constitutes a Default or an
Event of Default.


                          ARTICLE 4
                        MISCELLANEOUS

     4.1    Effective Date.  This Amendment shall be
effective as of the date when the Agent has received a duly
executed counterpart of this Amendment from each of the
Borrower, the Parent, Leland and the Majority Lenders.

     4.2    Governing Law.  This Amendment shall be
interpreted and the rights and liabilities of the parties
hereto determined in accordance with the internal laws (as
opposed to the conflict of laws provisions) of the State of
California.

     4.3    Counterparts.  This Amendment may be executed
in any number of counterparts, and by the Agent, each
Lender, the Borrower, Parent and Leland in separate
counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.


          IN WITNESS WHEREOF, the parties have entered into
this Amendment on the date first above written.

                                "BORROWER"

                                Consolidated Freightways
                                Corporation of Delaware, a
                                Delaware corporation



                                By:/s/David F. Morrison
                                Name:David F. Morrison
                                Title:Executive Vice President and CFO

                                Address:   175 Linfield Drive
                                           Menlo Park, CA 94025
                                Telephone No.:(415) 326-1700
                                Telecopy No.: (415) 617-6702


                                "PARENT"

                                Consolidated Freightways
                                Corporation, a Delaware
                                corporation



                                By:/s/ David F. Morrison
                                Name :David F. Morrison
                                Title: Executive Vice President and CFO
                                Address:   175 Linfield Drive
                                           Menlo Park, CA 94025
                                Telephone No.:(415) 326-1700
                                Telecopy No.: (415) 617-6702