Document:

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS  AMENDED AND RESTATED  EMPLOYMENT  AGREEMENT is dated as of January 1,
2000,  by and between  Franchise  Finance  Corporation  of  America,  a Delaware
corporation (the "Company") and Stephen G. Schmitz ("Executive").

                                    RECITALS

     In order to induce  Executive to serve as Executive Vice  President,  Chief
Investment Officer and Assistant  Secretary of the Company,  the Company desires
to provide  Executive  with  compensation  and other  benefits  on the terms and
conditions set forth in this Agreement.

     Executive is willing to accept such employment and perform services for the
Company, on the terms and conditions hereinafter set forth.

     It is therefore hereby agreed by and between the parties as follows:

     1. DEFINED  TERMS.  The following  terms shall have the following  meanings
unless otherwise specifically defined in this Agreement:

     "ACTUAL  BONUS"  means the highest  annual cash bonus  payable to Executive
with respect to any of the three years  immediately  preceding  the  Termination
Year.

     "AGREEMENT" means this Amended and Restated  Employment  Agreement dated as
of January 1, 2000 between the Company and Executive.

     "ANNUAL  CASH BONUS"  means the cash  compensation  payable to Executive as
calculated and paid in a manner substantially  similar to the methods and timing
used to calculate and pay  Executive's  bonus for calendar year 1999;  PROVIDED,
HOWEVER,  that  during the term of this  Agreement,  neither the Company nor the
Compensation  Committee  shall  change such methods and timing in a manner which
will be less favorable to Executive.

     "BASE  SALARY"  means the annual base salary of  Executive  as set forth in
Section 4(a).

     "BOARD" means the board of directors of the Company.

     "CAUSE" means:

               (a) the willful and  continued  failure of Executive to perform a
          substantial  portion of his duties  with the  Company  (other than any
          such  failure  resulting  from  incapacity  due to  physical or mental
          illness),  after a  written  demand  for  substantial  performance  is
          delivered to Executive by the Board, which specifically identifies the
          manner  in  which  the  Board   believes   that   Executive   has  not
          substantially performed his duties;
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               (b)  the  willful  engaging  by  Executive  in  gross  misconduct
          (including, without limitation, fraud or embezzlement); or

               (c) the conviction of, or plea of guilty or NOLO CONTENDERE to, a
          felony.

     "CHANGE IN CONTROL" means:

               (a) any "Person" as defined in Section  3(a)(9) of the Securities
          and Exchange Act of 1934, as amended (the "Exchange Act"), and as used
          in Section 13(d) and 14(d) thereof,  including a "group" as defined in
          Section  13(d) of the Exchange Act but  excluding  the Company and any
          subsidiary  and any employee  benefit plan  sponsored or maintained by
          the  Company or any  subsidiary  (including  any  trustee of such plan
          acting as trustee),  directly or indirectly,  becomes the  "beneficial
          owner"  (as  defined  in  Rule  13d-3  under  the  Exchange  Act),  of
          securities  of the Company  representing  25% or more of the  combined
          voting power of the Company's then outstanding  securities (other than
          indirectly as a result of the Company's redemption of its securities);
          PROVIDED, HOWEVER, that, in the event that any such person becomes the
          beneficial  owner  of 25% or  more,  but  not  exceeding  50%,  of the
          combined voting power of the Company's then outstanding securities, no
          Change of  Control  shall be deemed to occur so long as the  Incumbent
          Directors (as defined below)  continue to constitute a majority of the
          Board in accordance with the terms of paragraph (c) below; or

               (b) the consummation of any merger or other business  combination
          of the  Company,  sale of all or  substantially  all of the  Company's
          assets  (other  than with  respect to sales of assets in the  ordinary
          course of business,  securitization  and whole loan sales  provided by
          the   Company's   interim  and  permanent   financing   arrangements),
          liquidation  or  dissolution  of the  Company  or  combination  of the
          foregoing  transactions (the "Transactions")  other than a Transaction
          immediately  following  which the  shareholders of the Company and any
          trustee or fiduciary of any Company  employee benefit plan immediately
          prior  to the  Transaction  own at  least  51%  of the  voting  power,
          directly or indirectly,  of (A) the surviving  corporation in any such
          merger  or  other  business  combination;  (B)  the  purchaser  of  or
          successor to the Company's assets (other than with respect to sales of
          assets in the ordinary  course of business,  securitization  and whole
          loan sales provided by the Company's  interim and permanent  financing
          arrangements); (C) both the surviving corporation and the purchaser in
          the  event  of any  combination  of  Transactions;  or (D) the  parent
          company owning 100% of such surviving  corporation,  purchaser or both
          the surviving corporation and the purchaser, as the case may be; or

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               (c) within any  twenty-four-month  period,  the  persons who were
          directors  immediately  before  the  beginning  of  such  period  (the
          "Incumbent  Directors")  shall cease (for any reason other than death)
          to  constitute  at  least a  majority  of the  Board  or the  board of
          directors  of a  successor  to the  Company.  For  this  purpose,  any
          director who was not a director at the  beginning of such period shall
          be deemed to be an Incumbent  Director if such director was elected to
          the Board by, or on the  recommendation of or with the approval of, at
          least  two-thirds  of the  directors  who then  qualified as Incumbent
          Directors  (so long as such director was not nominated by a person who
          commenced  or  threatened  to commence  an  election  contest or proxy
          solicitation  by or on behalf of a Person other than the Board) or who
          has  entered  into an  agreement  to  effect a Change  in  Control  or
          expressed an intention to cause such Change in Control.

     "CODE"  means  the  Internal  Revenue  Code of 1986,  as  amended,  and the
provisions of any successor law.

     "COMPANY"  means  Franchise  Finance  Corporation  of  America,  a Delaware
corporation.

     "COMPENSATION COMMITTEE" means the compensation committee of the Board.

     "EFFECTIVE DATE" means January 1, 2000.

     "EXECUTIVE" means Stephen G. Schmitz.

     "EXPENSE  PAYMENT"  means payments made to Executive for expenses which are
permitted under this Agreement and have been incurred but not yet reimbursed.

     "GOOD REASON" means any of the following without  Executive's express prior
written consent:

               (a) any  material  diminution  or adverse  change in  Executive's
          duties,  titles or responsibilities with the Company (or any affiliate
          thereof) from those in effect immediately prior to any such diminution
          or adverse  change;  PROVIDED,  HOWEVER,  that no such  diminution  or
          adverse change shall be deemed to exist solely as a consequence of the
          Company  ceasing to be a Company with  publicly-traded  securities  or
          becoming a wholly-owned subsidiary of another company;

               (b) if after a  Change  in  Control  there  is any  reduction  in
          Executive's  aggregate annual cash  compensation  (which shall include
          Base Salary and Actual  Bonus) in  Executive's  aggregate  annual cash
          compensation in effect immediately prior to such reduction;

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               (c) any  requirement  that  Executive be based at a location more
          than 35 miles from the Company's headquarters,  located in Scottsdale,
          Arizona  (or a  substantial  increase  in the  amount of  travel  that
          Executive is required to do because of a relocation  of the  Company's
          headquarters from Scottsdale, Arizona);

               (d) any failure by the Company to obtain  from any  successor  to
          the Company an  agreement  reasonably  satisfactory  to  Executive  to
          assume and  perform  this  Agreement,  as  contemplated  by Section 13
          hereof; or

               (e) during the thirty-day period immediately  following the first
          anniversary  of the  Change  in  Control  there is a  Thirteenth-Month
          Termination by Executive.

     "PERMANENT   DISABILITY"  means  the  total  and  permanent  disability  of
Executive  as  defined  in  the  Company's  long-term  disability  benefit  plan
applicable to senior executive officers in effect on the Effective Date.

     "RETIREMENT" means Executive's voluntary termination of employment pursuant
to late,  normal or early  retirement  under a pension plan (which may include a
defined benefit plan or a defined  contribution  plan) sponsored by the Company,
as  defined  in such  plan,  but  only  if such  retirement  occurs  prior  to a
termination by the Company for Cause or by Executive for Good Reason.

     "TERMINATION  DATE" means the date this Agreement is terminated,  except to
the extent the  provisions  of Section  16 are  applicable,  which  shall be the
earlier  of  December  31,  2002  or the  date  of  termination  of  Executive's
employment pursuant to this Agreement.

     "TERMINATION  YEAR"  means  the year in which  Executive's  termination  of
employment occurs.

     "THIRTEENTH-MONTH   TERMINATION"   means  the  voluntary   termination   of
employment by Executive for any reason or no reason at all.

     "VACATION PAYMENT" means payments made to Executive with respect to accrued
but unused vacation days.

     2. EMPLOYMENT.

               (a) Subject to the terms and  conditions of this  Agreement,  the
          Company  agrees  to employ  Executive  during  the term  hereof as its
          Executive  Vice  President,  Chief  Investment  Officer and  Assistant
          Secretary  or as an officer of the  Company  having the same or a more
          senior  title and  greater  responsibilities.  In his  capacity as the
          Executive  Vice  President,  Chief  Investment  Officer and  Assistant
          Secretary  of the  Company,  Executive  shall  report to the Board and

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          shall have the customary powers,  responsibilities  and authorities of
          an Executive Vice President,  Chief  Investment  Officer and Assistant
          Secretary for  corporations  of the size and character of the Company,
          as it exists from time to time, and as are assigned by the Board.

               (b)  Subject  to the  terms  and  conditions  of this  Agreement,
          Executive hereby accepts employment with the Company commencing on the
          Effective  Date,  and  agrees  to  devote  his full  working  time and
          efforts,  to the best of his ability,  experience  and talent,  to the
          performance  of services,  duties and  responsibilities  in connection
          therewith.  Executive  shall  perform  such duties and  exercise  such
          powers,  commensurate with his position,  as the Board shall from time
          to time  delegate to him on such terms and  conditions  and subject to
          such  restrictions  the Board may reasonably from time to time impose.
          Executive also agrees to serve, if elected, as a member of the Board.

               (c) Nothing in this Agreement shall preclude  Executive,  so long
          as in the reasonable determination of the Board such activities do not
          interfere  with  his  duties  and  responsibilities   hereunder,  from
          engaging in  charitable  and  community  affairs,  from  managing  any
          passive investment made by him in publicly traded equity securities or
          other property  (provided that no such investment may exceed 5% of the
          equity  of any  entity)  or,  without  prior  notice  to the Board and
          subject to Section 15 and  Section  16(b)  hereof,  from  serving as a
          member  of  boards  of   directors  or  as  a  trustee  of  any  other
          corporation, association or entity.

     3. EFFECTIVE DATE; TERM OF EMPLOYMENT. This Agreement shall be effective as
the Effective Date.  Executive's  term of employment  under this Agreement shall
commence on the Effective  Date hereof and,  subject to the terms hereof,  shall
terminate on the Termination Date;  provided,  however,  that any termination of
Employment  by  Executive  for Good  Reason or pursuant to the Change in Control
provisions  of Section 8 may only be made on 30 days' prior  written  notice and
any other termination of employment by Executive other than for death, Permanent
Disability or Good Reason may only be made upon 90 days' prior written notice to
the Company.

     4. COMPENSATION.

               (a) SALARY.  The Company shall pay  Executive  during the term of
          this Agreement the Base Salary, as calculated pursuant to this Section
          4,  payable  in cash not less  frequently  than  bimonthly.  As of the
          Effective Date, the Base Salary shall be $315,000.  As of January 1 of
          each annual  anniversary  of the  Effective  Date,  the Base Salary of
          Executive  will be  increased  from  Executive's  Base  Salary for the
          preceding  calendar year by the greater of (i) five percent,  (ii) the
          average  percentage  salary  increase  awarded to all employees of the
          Company who are not senior executive  officers of the Company or (iii)
          an amount determined by the Compensation Committee.

               (b) ANNUAL CASH BONUS.  In  addition  to Base  Compensation,  the
          Company  will pay to  Executive on or prior to January 30 of each year
          for performance in the preceding calendar year the Annual Cash Bonus.

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               (c) COMPENSATION PLANS AND PROGRAMS.  Executive shall be eligible
          to participate in any compensation  plan or program  maintained by the
          Company from time to time, which  compensation  plans and programs are
          intended  to be  comparable  to  those  currently  maintained  by  the
          Company,  in which other senior executives of the Company  participate
          on terms that are intended to be  comparable  to those  applicable  to
          such other senior executives.

               (d) STOCK OPTIONS AND RESTRICTED STOCK AWARDS. Executive shall be
          eligible  to receive  grants of stock  options  and  restricted  stock
          awards as determined in the discretion of the  Compensation  Committee
          under any stock  option plan or  incentive  plan of the Company or any
          affiliate.

     5. EMPLOYEE BENEFITS.

               (a) EMPLOYEE BENEFIT PROGRAMS,  PLANS AND PRACTICES.  The Company
          shall provide  Executive  during the term of his employment  hereunder
          with coverage under all employee pension and welfare benefit programs,
          plans and  practices  (commensurate  with his positions in the Company
          from  time to time and to the  extent  permitted  under  any  employee
          benefit plan) in accordance with the terms thereof,  which the Company
          makes  available to its senior  executives and which employee  pension
          and welfare benefit programs, plans and practices that are intended to
          be comparable to those currently maintained by the Company;  provided,
          however, such programs,  plans and practices will be no less favorable
          than those in existence as of the date of execution of this Agreement.

               (b) VACATION AND FRINGE BENEFITS.  Executive shall be entitled to
          no less  than the  number  of  business  days  paid  vacation  in each
          calendar  year to which  Executive  is entitled  immediately  prior to
          execution of this Agreement, which shall be taken at such times as are
          consistent with Executive's  responsibilities  hereunder. In addition,
          Executive  shall be  entitled  to the  perquisites  and  other  fringe
          benefits currently made available to senior executives of the Company,
          commensurate with his position with the Company.

     6.  EXPENSES.  Executive  is  authorized  to incur  reasonable  expenses in
carrying out his duties and  responsibilities  under this Agreement,  including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon  presentation by Executive from time to time of appropriately  itemized and
approved (consistent with the Company's policy) accounts of such expenditures.

     7. TERMINATION OF EMPLOYMENT.

               (a)  TERMINATION  BY COMPANY OTHER THAN FOR CAUSE OR BY EXECUTIVE
          FOR GOOD REASON. (i) The Company may terminate Executive's  employment
          at any time for any reason. If Executive's employment is terminated by
          the  Company  other than for  Cause) or if  Executive  terminates  his
          employment for Good Reason prior to the  Termination  Date,  Executive
          shall  receive  such  payments,  if any,  under  applicable  plans  or

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          programs,  including  but not limited to those  referred to in Section
          4(c)  hereof,  to which he is  entitled  pursuant to the terms of such
          plans or programs. In addition, Executive shall be entitled to receive
          the following:

                    (A) A cash lump sum payment  equal to the sum of three times
               (1) Executive's  Base Salary at the annual rate as of the date of
               termination  and (2) the Actual  Bonus,  except with respect to a
               Thirteenth-Month  Termination  which shall be paid as provided in
               Section 8(c) hereof; and

                    (B) a cash lump sum payment with respect to (1) the Vacation
               Payment  and (2) the Expense  Payment  which shall be paid by the
               Company  to  Executive  within 30 days after the  termination  of
               Executive's employment by check payable to the order of Executive
               or by wire transfer to an account specified by Executive;

                    (C)  Executive  shall  also  be  entitled  to the  following
               benefits:

                         (i)  continued  medical,   dental,   vision,  and  life
                    insurance   coverage   (excluding   accident,   death,   and
                    disability  insurance) and any fringe benefit or perquisites
                    in effect  immediately  prior to the date of termination for
                    Executive and  Executive's  eligible  dependents  or, to the
                    extent such benefits are not  commercially  available,  such
                    other arrangements  reasonably  acceptable to Executive,  on
                    the  same   basis  as  in  effect   prior  to  the  date  of
                    termination,   whichever  is  deemed  to  provide  for  more
                    substantial benefits, for a period ending December 31, 2002;

                         (ii)  immediate 100% vesting of all  outstanding  stock
                    options,  stock  appreciation  rights and  restricted  stock
                    granted  or  issued  by  the   Company  to  the  extent  not
                    previously vested;

                         (iii)  all  other   accrued  or  vested   benefits   in
                    accordance  with the  terms of the  applicable  plan,  which
                    vested benefits shall include Executive's otherwise unvested
                    account  balances in the Company's  401(k) plan, which shall
                    be vested as of the date of termination; and

                         (iv)  if  so  requested  by   Executive,   outplacement
                    services  shall be provided by a  professional  outplacement
                    provider selected by Executive; PROVIDED, HOWEVER, that such
                    outplacement  services  shall be provided to  Executive at a
                    cost to the Company of not more than fifteen (15) percent of
                    such Executive's Base Salary.

               (b)  CURE  PERIOD  OF  COMPANY   FOR  GOOD  REASON   TERMINATION.
          Notwithstanding  the foregoing,  in the event that Executive  provides
          the Company with a notice of termination  stating Good Reason,  except

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          in the event of a Thirteenth-Month Termination, the Company shall have
          30 days thereafter in which to cure or resolve the behavior  otherwise
          constituting  Good Reason.  Any good faith  determination by Executive
          that Good Reason exists shall be presumed correct and shall be binding
          upon the Company.

               (c)  PERMANENT  DISABILITY  OF  EXECUTIVE.  If  Executive  has  a
          Permanent   Disability,   the  Company  or  Executive   may  terminate
          Executive's  employment on written notice thereof, and Executive shall
          receive or commence receiving, as soon as practicable:

                    (i) amounts  payable  pursuant to the terms of a  disability
               insurance  policy  or  similar   arrangement  which  the  Company
               maintains during the term hereof;

                    (ii) the Actual Bonus, prorated by a fraction, the numerator
               of  which  is the  number  of  days  of  the  fiscal  year  until
               termination and the denominator of which is 365;

                    (iii) the Vacation Payment and the Expense Payment; and

                    (iv)  such  payments  under  applicable  plans or  programs,
               including  but not limited to those  referred to in Section  4(c)
               hereof,  to which he is  entitled  pursuant  to the terms of such
               plans or programs.

               (d) DEATH.  In the event of Executive's  death during the term of
          his   employment   hereunder,   Executive's   estate   or   designated
          beneficiaries  shall  receive  or  commence  receiving,   as  soon  as
          practicable:

                    (i) the Actual  Bonus,  the numerator of which is the number
               of days of the fiscal year until his death and the denominator of
               which is 365;

                    (ii) any death benefits  provided under the employee benefit
               programs, plans and practices referred to in Section 5(a) hereof,
               in accordance with their terms;

                    (iii) the Vacation Payment and the Expense Payment; and

                    (iv)  such  payments  under  applicable  plans or  programs,
               including  but not limited to those  referred to in Section  4(c)
               hereof, to which Executive's  estate or designated  beneficiaries
               are entitled pursuant to the terms of such plans or programs.

               (e) TERMINATION BY THE COMPANY FOR CAUSE OR BY EXECUTIVE  WITHOUT
          GOOD REASON

                    (i) The  Company  shall  have  the  right to  terminate  the
               employment of Executive for Cause. In the event that  Executive's
               employment  is  terminated  by  the  Company  for  Cause,  or  by

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               Executive  other than for Good  Reason,  Executive  shall only be
               entitled to receive the Vacation Payment and the Expense Payment.
               Executive  shall not be  entitled,  among  other  things,  to the
               payment of any Annual Cash Bonus in respect of all or any portion
               of the fiscal year in which such  termination  occurs.  After the
               termination  of Executive's  employment  under this Section 7(e),
               the  obligations  of the Company under this Agreement to make any
               further  payments or provide  any  benefits  specified  herein to
               Executive shall thereupon cease and terminate.

                    (ii)  Termination  of  Executive  for Cause shall be made by
               delivery to Executive  of a copy of a resolution  duly adopted by
               the  affirmative  vote  of  not  less  than  a  majority  of  the
               non-employee  directors  of the  Board at a  regular  or  special
               meeting of such directors called and held for such purpose, after
               30 days' prior written  notice to Executive  specifying the basis
               for such termination and the particulars thereof and a reasonable
               opportunity  for  Executive  to be  heard  prior  to  or at  such
               meeting,   finding  that  in  the  reasonable  judgment  of  such
               directors,  that any  conduct  or event  constituting  Cause  has
               occurred   and  that   such   occurrence   warrants   Executive's
               termination.

     8. CHANGE IN CONTROL.

               (a) Executive shall be entitled to the compensation  provided for
          in this  Section 8  hereof,  if  within  two  years  after a Change in
          Control, Executive's employment by the Company shall be terminated (A)
          by the Company  for any reason  other than (I)  Executive's  Permanent
          Disability or Retirement,  (II) Executive's  death or (III) for Cause,
          or (B) by Executive with Good Reason.

               (b) In addition,  Executive shall be entitled to the compensation
          provided for in this Section 8, if the following  events occur: (A) an
          agreement is signed which, if consummated, would result in a Change of
          Control,  (B) Executive is terminated  without Cause by the Company or
          terminates employment with Good Reason prior to the anticipated Change
          in Control,  and (C) such  termination  (or the action leading to such
          termination,  in  the  case  of  Good  Reason)  is at the  request  or
          suggestion  of  the  acquiror  or  merger   partner  or  otherwise  in
          connection  with the  anticipated  Change in Control,  except that any
          termination of employment as set forth in clause (C), above,  shall be
          presumed,  in the  absence  of clear and  convincing  evidence  to the
          contrary,  to have  occurred in  connection  with a Change in Control,
          whether or not a Change in Control actually occurs.

               (c) The Company shall pay or cause to be paid to Executive a cash
          severance  amount  equal to  three  times  the sum of (i)  Executive's
          annual  Base  Salary on the date of the  Change  in  Control  (or,  if
          higher,  the annual  Base  Salary in effect  immediately  prior to the
          giving  of the  notice of  termination),  and (ii) the  Actual  Bonus;
          PROVIDED,  HOWEVER,  that in the event that Executive's  employment is
          terminated  by  a  Thirteenth-Month   Termination,   Executive's  cash
          severance  amount  shall only be equal to two times the sum of (i) and

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          (ii) above.  This cash severance amount shall be payable in a lump sum
          calculated  without any discount or, at the election of Executive,  on
          any deferred payment schedule selected by Executive.

               (d) No compensation  or other benefit  pursuant to this Section 8
          hereof shall be payable under this  Agreement  unless and until either
          (i) a Change in Control  shall have  occurred  while  Executive  is an
          employee  of a  Company  and  Executive's  employment  by the  Company
          thereafter  shall have  terminated in  accordance  with this Section 8
          hereof  or (ii)  Executive's  employment  by the  Company  shall  have
          terminated in accordance with this Section 8 hereof in anticipation of
          the occurrence of a Change in Control.

               (e) Executive shall also be entitled to the (i) Vacation  Payment
          and the Expense  Payment,  (ii) the medical and other  benefits  under
          Section  7(a)(C)(i),  (iii) vesting of certain  security  rights under
          Section 7(a)(C)(ii), (iv) other accrued and vested plans under Section
          7(a)(C)(iii) and (v) outplacement services under Section 7(a)(C)(iv).

     9. EXCESS PARACHUTE EXCISE TAX.

               (i) If it is determined (as hereafter  provided) that any payment
          or  distribution  by the Company to or for the  benefit of  Executive,
          whether paid or payable or  distributed or  distributable  pursuant to
          the terms of this  Agreement or otherwise  pursuant to or by reason of
          any other agreement,  policy, plan, program or arrangement,  including
          without  limitation  any stock  option,  stock  appreciation  right or
          similar right,  or the lapse or  termination of any  restriction on or
          the vesting or  exercisability  of any of the foregoing (a "Payment"),
          would be subject to the excise tax imposed by Section 4999 of the Code
          by reason of being "contingent on a change in ownership or control" of
          the  Company,  within the meaning of Section  280G of the Code (or any
          successor provision thereto) or to any similar tax imposed by state or
          local law, or any  interest or  penalties  with respect to such excise
          tax (such tax or taxes, together with any such interest and penalties,
          are  hereafter  collectively  referred to as the "Excise  Tax"),  then
          Executive  shall be  entitled  to  receive  an  additional  payment or
          payments (a "Gross-Up  Payment") in an amount such that, after payment
          by Executive of all taxes (including any interest or penalties imposed
          with respect to such taxes),  including  any Excise Tax,  imposed upon
          the  Gross-Up  Payment,  Executive  retains an amount of the  Gross-Up
          Payment equal to the Excise Tax imposed upon the Payments.

                    (A) Subject to the provisions of this Section 9 hereof,  all
               determinations   required  to  be  made  under  this  Section  9,
               including  whether an Excise Tax is payable by Executive  and the
               amount of such  Excise  Tax and  whether a  Gross-Up  Payment  is

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               required and the amount of such Gross-Up  Payment,  shall be made
               by the nationally recognized firm of certified public accountants
               (the  "Accounting  Firm") used by the Company prior to the Change
               in Control  (or, if such  Accounting  Firm shall be a  nationally
               recognized firm of certified public  accountants,  as selected by
               Executive).  The Accounting Firm shall be directed by the Company
               or Executive to submit its preliminary determination and detailed
               supporting  calculations to both the Company and Executive within
               15 calendar days after the date of termination of employment,  if
               applicable,  and any other such time or times as may be requested
               by the Company or Executive.  If the Accounting  Firm  determines
               that any Excise Tax is payable by  Executive,  the Company  shall
               pay the  required  Gross-Up  Payment  to, or for the  benefit of,
               Executive  within  five  business  days  after  receipt  of  such
               determination and calculations. If the Accounting Firm determines
               that no Excise Tax is payable by Executive, it shall, at the same
               time as it makes such  determination,  furnish  Executive with an
               opinion  that he has  substantial  authority  not to  report  any
               Excise Tax on his/her federal,  state,  local income or other tax
               return. Any determination by the Accounting Firm as to the amount
               of the  Gross-Up  Payment  shall be binding  upon the Company and
               Executive absent a contrary determination by the Internal Revenue
               Service or a court of competent jurisdiction;  provided, however,
               that  no  such  determination   shall  eliminate  or  reduce  the
               Company's  obligation to provide any Gross-Up  Payment that shall
               be due as a result of such contrary determination. As a result of
               the  uncertainty  in the  application of Section 4999 of the Code
               (or any  successor  provision  thereto)  and the  possibility  of
               similar uncertainty  regarding state or local tax law at the time
               of any  determination  by the Accounting  Firm  hereunder,  it is
               possible that  Gross-Up  Payments that will not have been made by
               the Company should have been made (an "Underpayment"), consistent
               with the calculations required to be made hereunder. In the event
               that  the  Company  exhausts  or  fails to  pursue  its  remedies
               pursuant to Section  6(f)(i)  hereof and Executive  thereafter is
               required  to make a payment of any Excise  Tax,  Executive  shall
               direct  the  Accounting  Firm  to  determine  the  amount  of the
               Underpayment  that has occurred  and to submit its  determination
               and  detailed  supporting  calculations  to both the  Company and
               Executive as promptly as possible. Any such Underpayment shall be
               promptly paid by the Company to, or for the benefit of, Executive
               within five business days after receipt of such determination and
               calculations.

                    (B) The federal, state and local income or other tax returns
               filed by  Executive  (or any filing  made by a  consolidated  tax
               group which  includes the Company) shall be prepared and filed on
               a consistent basis with the  determination of the Accounting Firm
               with  respect to the Excise Tax payable by  Executive.  Executive

                                       11
<PAGE>
               shall make proper payment of the amount of any Excise Tax, and at
               the  request  of the  Company,  provide to the  Company  true and
               correct copies (with any  amendments)  of his/her  federal income
               tax  return  as  filed  with the  Internal  Revenue  Service  and
               corresponding state and local tax returns, if relevant,  as filed
               with the applicable  taxing  authority,  and such other documents
               reasonably requested by the Company,  evidencing such payment. If
               prior to the filing of Executive's  federal income tax return, or
               corresponding  state  or  local  tax  return,  if  relevant,  the
               Accounting  Firm  determines  that  the  amount  of the  Gross-Up
               Payment should be reduced,  Executive  shall within five business
               days pay to the Company the amount of such reduction.

               (ii) In the event that the Internal  Revenue  Service claims that
          any payment or benefit  received under this  Agreement  constitutes as
          "excess parachute  payment",  within the meaning of Section 280G(b)(1)
          of the Code,  Executive  shall  notify the  Company in writing of such
          claim. Such notification  shall be given as soon as practicable but no
          later than 10 business days after  Executive is informed in writing of
          such claim and shall  apprise  the Company of the nature of such claim
          and the date on which such claim is  requested  to be paid.  Executive
          shall not pay such claim prior to the  expiration of the 30 day period
          following the date on which Executive gives such notice to the Company
          (or such shorter  period  ending on the date that any payment of taxes
          with respect to such claim is due). If the Company notifies  Executive
          in writing  prior to the  expiration of such period that it desires to
          contest  such  claim,   Executive  shall  (1)  give  the  Company  any
          information  reasonably  requested  by the  Company  relating  to such
          claim;  (2) take such action in connection  with contesting such claim
          as the Company shall reasonably  request in writing from time to time,
          including  without  limitation,  accepting legal  representation  with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company and reasonably  satisfactory to Executive;  (3) cooperate with
          the Company in good faith in order to effectively  contest such claim;
          and (4) permit the Company to participate in any proceedings  relating
          to such claim; provided,  however, that the Company shall bear and pay
          directly  all costs  and  expenses  (including,  but not  limited  to,
          additional  interest and  penalties and related  legal,  consulting or
          other similar fees) incurred in connection with such contest and shall
          indemnify and hold Executive harmless,  on an after-tax basis, for and
          against any Excise Tax or other tax (including  interest and penalties
          with respect thereto) imposed as a result of such  representation  and
          any payment of costs and expenses.

                    (A) The  Company  shall  control  all  proceedings  taken in
               connection with such contest and, at its sole option,  may pursue
               or  forgo  any  and  all  administrative  appeals,   proceedings,
               hearings  and  conferences  with the tax  authority in respect of
               such claim and may, at its sole option,  either direct  Executive
               to pay the tax  claimed and sue for a refund or contest the claim
               in any permissible manner, and Executive agrees to prosecute such

                                       12
<PAGE>
               contest before any administrative tribunal, in a court of initial
               jurisdiction and in one or more appellate  courts, as the Company
               shall determine;  provided,  however, that if the Company directs
               Executive  to pay such  claim and sue for a refund,  the  Company
               shall  advance  the  amount of such  payment to  Executive  on an
               interest-free  basis,  and  shall  indemnify  and hold  Executive
               harmless, on an after-tax basis, from any Excise Tax or other tax
               (including  interest and penalties with respect  thereto) imposed
               with  respect  to such  advance or with  respect  to any  imputed
               income with respect to such advance; and provide , further,  that
               if Executive is required to extend the statute of  limitations to
               enable the  Company to contest  such claim,  Executive  may limit
               this  extension  solely to such contested  amount.  The Company's
               control of the contest shall be limited to issues with respect to
               which a  corporate  deduction  would be  disallowed  pursuant  to
               Section  280G of the Code and  Executive  shall  be  entitled  to
               settle or contest,  as the case may be, any other issue raised by
               the Internal  Revenue Service or any other taxing  authority.  In
               addition,  no position may be taken nor any final  resolution  be
               agreed to by the  Company  without  Executive's  consent  if such
               position or resolution  could reasonably be expected to adversely
               affect  Executive  (including  adversely  affecting any other tax
               position of Executive unrelated to matters covered hereby).

                    (B)  If,  after  the  receipt  by  Executive  of any  amount
               advanced  by the  Company in  connection  with the contest of the
               Excise Tax  claim,  Executive  becomes  entitled  to receive  any
               refund with respect to such claim,  Executive  shall promptly pay
               to the  Company  the  amount of such  refund  (together  with any
               interest  paid  or  credited   thereon  after  taxes   applicable
               thereto); provided, however, if the amount of that refund exceeds
               the amount advanced by the Company or it is otherwise  determined
               for any  reason  that  additional  amounts  could  be paid by the
               Company to Executive  without  incurring any Excise Tax, any such
               amount will be promptly  paid by the  Company to  Executive.  If,
               after the  receipt  by  Executive  of an amount  advanced  by the
               Company in connection  with an Excise Tax claim, a  determination
               is made that  Executive  shall not be entitled to any refund with
               respect to such claim and the Company  does not notify  Executive
               in writing of its  intent to  contest  the denial of such  refund
               prior to the expiration of 30 days after such determination, such
               advance  shall be forgiven and shall not be required to be repaid
               and shall be deemed to be in consideration  for services rendered
               after the date of the Termination.

               (iii) The Company and Executive shall each provide the Accounting
          Firm access to and copies of any books,  records and  documents in the
          possession of the Company or Executive, as the case may be, reasonably
          requested by the  Accounting  Firm,  and otherwise  cooperate with the
          Accounting Firm in connection with the preparation and issuance of the
          determination contemplated by this Section 9.

                                       13
<PAGE>
               (iv)  The  fees  and  expenses  of the  Accounting  Firm  for its
          services  in  connection  with  the  determinations  and  calculations
          contemplated  by this  Section 9 hereof shall be borne by the Company.
          If such fees and expenses are  initially  advanced by  Executive,  the
          Company  shall  reimburse  Executive  the full amount of such fees and
          expenses  within five business days after receipt from  Executive of a
          statement therefor and reasonable evidence of his payment thereof.

     10.  MITIGATION  OF  DAMAGES.  Executive  shall not be required to mitigate
damages or the  amount of any  payment  provided  for under  this  Agreement  by
seeking other  employment or otherwise  after the  termination of his employment
hereunder.

     11. NOTICES.  All notices or communications  hereunder shall be in writing,
addressed as follows:

         To the Company:

                  Franchise Finance Corporation of America
                  17207 North Perimeter Drive
                  Scottsdale, AZ  85255
                  Attention: General Counsel

         To Executive:

                  Mr. Stephen G. Schmitz
                  8267 East Angel Spirit Drive
                  Scottsdale, AZ 85255

Any such notice or  communication  shall be delivered by hand, by telecopy (with
machine confirmation) or by courier or sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in a notice duly delivered as described above),  and
the third  business day after the actual date of mailing  shall  constitute  the
time at which notice was given.

     12.  SEVERABILITY;  LEGAL FEES. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability  shall not affect the remaining  provisions  hereof which shall
remain in full force and effect.  In the event that any dispute  arises  between
Executive and the Company as to the terms or  interpretation  of this Agreement,
whether  instituted  by formal legal  proceedings  or  otherwise,  including any
action that Executive  takes to enforce the terms of this Agreement or to defend
against any action taken by the Company,  Executive  shall be reimbursed for all
costs and expenses,  including  reasonable  attorneys'  fees,  arising from such
dispute,  proceedings  or  actions,  provided  that  Executive  shall  obtain  a
settlement or final judgement by a court of competent jurisdiction substantially
in favor of Executive.  Such reimbursement shall be paid within ten (10) days of
Executive's  furnishing  to the Company  written  evidence,  which may be in the
form,  among  other  things,  of a cancelled  check or receipt,  of any costs or
expenses incurred by Executive.

                                       14
<PAGE>
     13. SUCCESSORS; BINDING AGREEMENT, ASSIGNMENT.

               (a) The Company shall require any  successor  (whether  direct or
          indirect, by purchase,  merger,  consolidation or otherwise) to all or
          substantially  all of the  business of the  Company,  by  agreement to
          expressly,  absolutely and unconditionally assume and agree to perform
          this  Agreement  in the same  manner and to the same  extent  that the
          Company  would be  required  to perform it if no such  succession  had
          taken place.  Failure of the Company to obtain such agreement prior to
          the effectiveness of any such succession shall be a material breach of
          this  Agreement and shall entitle  Executive to terminate  Executive's
          employment  with  the  Company  or  such  successor  for  Good  Reason
          immediately prior to or at any time after such succession.  As used in
          this  Agreement,  "Company" shall mean (i) the Company as hereinbefore
          defined,  and (ii) any successor to all the stock of the Company or to
          all or  substantially  all of the Company's  business or assets (other
          than  with  respect  to  sales  of  assets  in  the  ordinary  course,
          securitization  and whole loan sales provided by the Company's interim
          and permanent  financing  arrangements) which executes and delivers an
          agreement  provided  for in this  Section  13(a)  or  which  otherwise
          becomes  bound by all the terms and  provisions  of this  Agreement by
          operation  of  law,  including  any  parent  or  subsidiary  of such a
          successor.

               (b)  This  Agreement  shall  inure  to  the  benefit  of  and  be
          enforceable   by  Executive's   personal  or  legal   representatives,
          executors,  administrators,  successors, heirs, distributees, devisees
          and  legatees.  If  Executive  should  die while any  amount  would be
          payable to Executive hereunder if Executive had continued to live, all
          such  amounts,  unless  otherwise  provided  herein,  shall be paid in
          accordance  with the terms of this Agreement to Executive's  estate or
          designated  beneficiary.  Neither this Agreement nor any right arising
          hereunder shall be assignable or otherwise subject to hypothecation by
          Executive  (except by will or by  operation  of the laws of  intestate
          succession) or by the Company, except that the Company may assign this
          Agreement to any successor (whether by merger,  purchase or otherwise)
          to all or substantially all of the stock,  assets or businesses of the
          Company,  if such successor expressly agrees to assume the obligations
          of the Company hereunder.

     14.  AMENDMENT.  This Agreement may only be amended by written agreement of
the parties hereto.

     15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.  At any time during or after
Executive's employment with the Company,  Executive shall not, without the prior
written consent of the Company, use, divulge, disclose or make accessible to any
other person, firm, partnership, corporation or other entity any confidential or
proprietary  information pertaining to the business of the Company or any of its
subsidiaries,  pursuant  to the  policies  set forth in the  Company's  employee
handbook and compliance manual, as amended from time to time.

                                      15
<PAGE>
     16. COVENANT NOT TO COMPETE.

               (a)  During the period of his  employment  hereunder  and for the
          first to occur of (i) one year following the termination of employment
          of Executive or (ii) December 31, 2002, Executive agrees that, without
          the prior written consent of the Company, (a) he will not, directly or
          indirectly, either as principal, manager, agent, consultant,  officer,
          stockholder,  partner,  investor,  lender or  employee or in any other
          capacity,  carry on, be engaged in or have any  financial  interest in
          (other than an  ownership  position  of less than five  percent in any
          company whose shares are publicly traded),  any business,  which is in
          Competition  (as defined in Section 16(b)) with the existing  business
          of the Company or its  subsidiaries,  and (b) he shall not, on his own
          behalf  or on behalf  of any  person,  firm or  company,  directly  or
          indirectly,  solicit  or offer  employment  to any person who has been
          employed by the Company or its  subsidiaries at any time during the 12
          months immediately preceding such solicitation.

               (b) For purposes of this  Section 16, a business  shall be deemed
          to be in  Competition  with  the  Company  or  its  subsidiaries  if a
          significant   portion  of  its  business  is  providing  financing  to
          operators in the chain  restaurant,  convenience  store or  automotive
          service and parts industries in any portion of the United States.

               (c)  Executive  and the Company  agree that this  covenant not to
          compete is a reasonable covenant under the circumstances,  and further
          agree that if in the  opinion of any court of  competent  jurisdiction
          such restraint is not reasonable in any respect, such court shall have
          the right,  power and authority to excise or modify such  provision or
          provisions  of  this  covenant  as  to  the  court  shall  appear  not
          reasonable and to enforce the remainder of the covenant as so amended.
          Executive  agrees that any breach of the  covenants  contained in this
          Section  16  would  irreparably   injure  the  Company.   Accordingly,
          Executive  agrees  that the Company  may, in addition to pursuing  any
          other  remedies  it may have in law or in  equity,  cease  making  any
          payments otherwise required by this Agreement and obtain an injunction
          against  Executive from any court having  jurisdiction over the matter
          restraining any further violation of this Agreement by Executive.

     17. BENEFICIARIES;  REFERENCES.  Executive shall be entitled to select (and
change,  to the extent  permitted  under any  applicable  law) a beneficiary  or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's  death,  and may change such election,  in either case by giving the
Company written notice thereof.  In the event of Executive's death or a judicial
determination  of his  incompetence,  reference  in this  Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal  representative.  Any reference to the masculine  gender in this Agreement
shall include, where appropriate, the feminine.

     18.  SURVIVORSHIP.  The  respective  rights and  obligations of the parties
hereunder  shall  survive  any  termination  of  this  Agreement  to the  extent
necessary to the intended preservation of such rights and obligations, including
the  provisions of Section 16 herein.  The  provisions of this Section 18 are in
addition to the survivorship provisions of any other section of this Agreement.

                                       16
<PAGE>
     19.  GOVERNING  LAW. This  Agreement  shall be construed,  interpreted  and
governed in accordance with the laws of the State of Arizona  without  reference
to rules relating to conflicts of law.

     20.  EFFECT  ON  PRIOR  AGREEMENTS.  This  Agreement  contains  the  entire
understanding  between the parties  hereto and  supersedes  in all  respects any
prior or other agreement or  understanding  between the Company or any affiliate
of the Company and  Executive  including,  without  limitation,  the  Continuity
Agreement dated as of May 12, 1999 between the Company and Executive.

     21. WITHHOLDING. The Company shall be entitled to withhold from payment any
amount of withholding required by law.

     22.   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  or  more
counterparts, each of which will be deemed an original.

                                        FRANCHISE FINANCE CORPORATION OF AMERICA

                                        By /s/ Christopher H. Volk
                                           -------------------------------------
                                           Name: Christopher H. Volk
                                           Title: President, Chief Operating
                                                  Officer

                                        /s/ Stephen G. Schmitz
                                        ----------------------------------------
                                        Stephen G. Schmitz

                                       17<PAGE>   1
                                                                   EXHIBIT 10.15

                             MASTER TRUCK AGREEMENT
                            MOTOR CARGO, RENO, NEVADA
                                   1996 - 2000

This agreement, deemed made and entered into by and between MOTOR CARGO, INC.,
Reno, Nevada, hereinafter referred to as the COMPANY, and TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN & HELPERS AND PROFESSIONAL, CLERICAL, PUBLIC AND MISCELLANEOUS
EMPLOYEES, LOCAL UNION N0. 533, affiliated with the International Brotherhood of
Teamsters, AFL-C1O, hereinafter referred to as the UNION.

ARTICLE I - SCOPE OF AGREEMENT

Section 1 MASTER AGREEMENT. The execution of this master Agreement and any
attached Supplements on the part of the Company shall cover all truck operations
of the Company which are covered by this Agreement and shall have application to
the employees within the bargaining unit defined below.

Section 2 This Agreement shall not be applicable to those operations of the
Company which are covered by a collective bargaining agreement with a Union not
signatory to this Agreement or to those employees not designating a signatory
union as their collective bargaining agent nor to any other employee or
non-employee. Except as expressly provided, nothing herein or in the attached
supplements shall be construed as implying either a limitation or a guarantee of
work or assignment of any employee or group of employees.

ARTICLE II - RECOGNITION

Section 1 The Employer recognizes the Union as the sole and exclusive collective
bargaining representative of, all full-time and part-time Reno, Nevada based
pick-up and delivery employees, dock employees, and drivers employed by the
Employer, excluding mechanics, truck servicemen, office clerical employees,
watchmen, guards, and supervisors as defined in the Act.

Section 2 The Union recognizes that all of the powers, rights, functions, and
authority of the Employer, other than those expressly restricted or regulated by
one or more of the specific (as distinct from any implied) provisions of this
Agreement are retained by the Employer. Management shall be allowed broad
application of retained rights in making decisions and taking action during the
term of the Agreement. Retained rights shall not be the subject of further
bargaining without the prior written voluntary consent of the Employer.

<PAGE>   2
ARTICLE III - STEWARDS

Section 1 The Company recognizes the right of the Union to designate employee
job stewards and alternates. Duties as a Steward shall not interfere with his
duties as an employee nor with the work of other employees.

ARTICLE IV - LEAVES OF ABSENCE

Section 1 The Company may grant a leave of absence without pay or benefits to an
employee. An employee desiring a leave of absence shall secure written
permission in advance from the Company. The leave of absence shall be for ninety
(90) days and map be extended fox like periods up to a maximum of one (1) year.
An employee on an approved leave may retain insurance coverage provided he pays
the monthly insurance premiums in advance. The Company will notify the Union of
all approved leaves of absence. The Union agrees that in making request for time
off for Union business, due consideration shall be given to the men affected in
order that there shall be no disruption of the Company's operations.

Section 2 The Company agrees to grant the necessary and reasonable time off
without discrimination or loss of seniority rights and without pay, to any
employee designated by the Union to attend a labor convention, or serve in any
capacity or other short tern official union business, provided forty-eight (48)
tours written notice is given to the Company by the Union, specifying length of
tire off. The Union agrees that, in making requests for time off for union
activities, due consideration shall be given to the number of men affected in
order that there shall be no disruption of the Company's operations due to the
lace of available employees.

Section 3 During the period of any leave, an employee shall not engage in
gainful employment in the same industry, unless agreed to by the Company in
writing. Failure to comply with this provision shall result in complete loss of
any further job rights and immediate termination of the employee involved.

ARTICLE V - SENIORITY

Section 1 Seniority rights for employees shall be in accordance with the
provisions outlined in the supplements of this Agreement.

Section 2 The extent to which seniority shall be applied as well as the methods
and procedures of such application shall be as clearly set forth in each of the
supplemental agreements.

ARTICLE VI - MAINTENANCE OF STANDARDS

Section 1 No employee shall suffer reduction in his basic hourly wage rate now
being paid prior to the execution or adoption of this Agreement.

                                       2

<PAGE>   3
Section 2 The Company agrees not to enter into any written agreement or contract
with his employees, individually or collectively, which conflicts with the terms
and provisions of this Agreement. Any such agreement shall be null and void.

Section 3 Where new types of equipment for which rates of pay are not
established by this Agreement are put into use within operations covered by this
Agreement, rates covering such operations shall be subject to negotiations
between the parties. Rates agreed upon shall be effective as of the date
equipment is put into use if agreement can be reached within thirty (30) days,
if not then, rates agreed upon shall be effective as of the date they are agreed
upon.

ARTICLE VII - DISCHARGE OR SUSPENSION

Section 1 The Company shall have the right to terminate casual and probationary
employees (less than ninety (90) days) for any reason and to lay off any other
employee due to lack of work, shortage of equipment, emergencies over which the
Company has no control, or for other similar business reasons or for just cause.
However, nothing in this Agreement shall be construed as giving a person the
right to get or retain a job for which he is not qualified, not physically
capable, or which he neglects or refuses to do.

Section 2 Each employee will do his part to do the work assigned to him in a
workmanlike manner satisfactory to the customer and the Employer, realizing that
safe, economical, and reliable service to customers is the basis of existence
both for employees and the Company. The Company reserves the exclusive right to
direct and control employees and, where it deems necessary, reprimand,
discipline, and/or discharge an employee, for just cause. In the event of minor
failures or infractions by a regular, full-time employee, he shall not be
suspended or discharged without having received at feast one (7 ) prior written
warning notice for the same or similar infraction within the prior nine (9)
months. Three or more warning notices (not necessarily for the same or similar
infraction) within a nine (9) month period shall be considered just cause for
suspension or discharge.

        Warning notices under this Agreement shall be issued within ten (10)
calendar days after the event occurs or is discovered by the Company and, when
issued, a copy shall be mailed to the Union within five (5) days. An employee
shall have the right to protest a warning notice he feels is unjustified within
ten (70) calendar days from the receipt of said warning notice.

Section 3 It is understood that no prior warning notice need be given in the
event of such things as (but not limited to):

               Drunkenness on the job.
               Use, being under the influence, possession
                      or sale of drugs or narcotics on the job.
               Dishonesty,

                                       3

<PAGE>   4
               Unexcused failure to show up for work for three (3) consecutive
                      working days.
               Careless operation of equipment resulting in serious loss or
                      damage of equipment or load or upset of a unit or trailer.
               Speeding in excess of Company rules resulting in damage or
                      recklessness resulting in damage.
               Carrying of unauthorized persons, materials, or goods.

Section 4 If a suspended or discharged employee feels the suspension or
discharge was without just cause, the employee may request a hearing before the
operations manager or his representative provided such request is made within
five (5) working days after the suspension or discharge. Upon such timely
request, the employee shall be granted a hearing. At that time, the employee,
the Union, and any other interested party may present evidence or testimony or
argument in support of the contention that the discipline or discharge was
without just cause. After hearing all such evidence and testimony, the Company
shall give the employee and the Union within seven (7) Calendar days an answer
that confirms, modifies, or reverses the original discipline or discharge. If
this answer is not acceptable, the Union may request arbitration on the matter,
provided such request is made within five (5) working days after the answer is
given. Arbitration will be based on the same evidence and testimony that eras
given to the operations manager anal upon which he predicated his answer, except
upon proof that such testimony was not available at the time of original
hearing.

ARTICLE VIII - GRIEVANCE AND ARBITRATION

Section 1 Every reasonable attempt will be made by both parties to resolve any
grievance without arbitration. However, if the parties cannot arrive at an
understanding, the grievance may be submitted to a jointly acceptable neutral
arbitrator, provided arbitration is requested within thirty (30) days of the
event giving rise to the grievance. Arbitrable grievances shill be limited to a
claim of a violation of one or more of the specific (as distinct from any
implied) provisions of this agreement or a claim of unjust discharge or
disciplinary suspension unless prior voluntary agreement to arbitrate is
obtained in writing from both parties prior to proceeding to arbitration. If the
Union and the Company are unable to agree on an arbitrator, each shall designate
a qualified arbitrator and invest him with power to select a qualified
arbitrator. Any qualified arbitrator agreed upon jointly by such representatives
of the Union and the Company shall be the arbitrator and shall be empowered to
make a final and binding decision in conformity with the submission agreement
and the terms of this Agreement. Section 2 The arbitrator shall have no power to
change this agreement in any way, nor to impose conditions on the parties he
thinks the parties did or should have agreed upon. He shall be limited to
findings of facts and applying the provisions of this Agreement to those facts.

                                       4

<PAGE>   5
Except in the event of an unjust discharge, the Company shall not be required to
pay twice or to pap one employee for work done and paid for to another employee.

        The arbitrator shall render his award thirty (30) days after the closing
of the hearings. The decision of the arbitrator shall be final and binding and
shall determine the subject of the arbitration for the duration of this
Agreement.

        The compensation and expenses of the neutral arbitrator shall be borne
jointly by the parties to this Agreement.

ARTICLE IX - BONDS

Section 1 Should the Company require any employee to give bond, cash bond shall
not be compulsory, and any premium involved shall be paid by the Company. The
primary obligation to procure bond shall be on the Company. If the Company
cannot arrange for a bond within ninety (90) days, it must so notify the
employee in writing. If proper notice is given, the employee shall be allowed
thirty (30) days for the date of such notice to make his own bonding
arrangements.

        Standard premium shall be the minimum paid by the Company for bonds
applicable to all other of its employees in similar classification. Any excess
premium is to be paid by the employee.

        Section 2 In cases where bond cannot be arranged, or bond is cancelled,
the employee shall be on standby until he can obtain bond or replacement bond at
no extra cost to the Company.

ARTICLE X - EXAMINATION AND IDENTIFICATION FEES

Section 1 Physical, mental or other examinations required by a government body
or the Company shall be promptly complied with by all such employees, provided,
however, the Company shall pay for all such examinations, except in the case of
driver's or chauffeurs' license examination. Examinations are to be taken at the
employee's home terminal. Employees will not be required to take examinations
during their working hours, without pay for time so consumed.

        The Company reserves the right to select its own medical examiner or
physician, and the Union may, if it believes an injustice has been done an
employee, have said employee reexamined at the employee's expense.

        In the event of disagreement between the doctor selected by the Employer
and the doctor selected by the Union, the Company and the Union doctors shall
together select a third doctor within thirty (30) days whose opinion shall be
final.

                                       5

<PAGE>   6
Section 2 DRUG TESTING POLICY The Union fully supports the substance abuse
prevention and testing program as published by the Company in accordance with
applicable state and federal laws and D.O.T, regulations which the Company has
the full right to administer, enforce and to amend from time to time as it eight
deem necessary. The Employer will keep the Union fully informed of any changes
in the program. The Union reserves the right to file a grievance in an
individual case upon reasonable showing that the Employer's enforcement was
without justification or was discriminatory.

ARTICLE XI - UNIFORMS

Section 1 The Company agrees that if any employee is required to wear any kind
of uniform as a condition of his continued employment, such uniform shall be
furnished and maintained by the Company free of charge, at the standard required
by the Company.

Section 2 Voluntary pooling arrangement for the purchase of uniforms shall not
come within the scope of this Article.

ARTICLE XII - PASSENGERS

Section 1 No driver shall allow anyone, other than employees of the Company who
are on duty, to ride on his truck, except by written authorization of the
Company. This shall not prohibit drivers from picking up other drivers or
helpers in wrecked or broken down equipment for transportation to the first
available point of communication or repair.

ARTICLE XIII - COMPENSATION CLAIMS

Section 1 The Company agrees to cooperate toward the prompt settlement of
employee on-the-job injury claims when such claims are due and owing.

Section 2 The Company shall provide Workmen's Compensation for all employees as
required by State Law.

Section 3 When an employee is injured on the job, he shall receive full pay for
that day or his current tour of duty, as the case may be, with a minimum of
eight (8) hours' pay.

Section 4 In the event an employee is injured or becomes ill while on a run away
from his home terminal and return to his home terminal is deemed reasonably
necessary by an attending physician, the Company shall arrange and pay for
transportation by plane, or as directed by the doctor, to his home. In case of
death away from home terminal the Company shall bear the cost of bringing the
body home.

                                       6

<PAGE>   7
ARTICLE XlV - MILITARY CLAUSE

Section 1 An employee enlisting in or entering the Armed Forces of the United
States shall be granted all rights and privileges provided by applicable laws.

ARTICLE XV - DEFECTIVE EQUIPMENT AND DANGEROUS CONDITIONS

Section 1 The Company shall not require employees to take out on the streets or
highways any vehicle that is not in safe operating condition or equipped with
the safety appliances prescribed by law. It shall not be a violation of this
Agreement for an employee to refuse to operate such equipment unless such
refusal is unjustified. The employee may be assigned other duties or equipment
at the Company's option.

Section 2 Line or pick-up and delivery equipment, used in short line, peddle or
local operation, shall have steps or some other suitable device to enable
drivers to get in and out of the body.

Section 3 The Company shall install and maintain heaters and defrosters on all
trucks and tractors, except where climactic conditions make this unnecessary.

ARTICLE XVI - TIME SHEET,  PAY PERIODS AND PAY DAYS

Section 1 Pay day shall be at least semi-monthly, not more than seven (7) days
after the close of the pay period provided, however, that present arrangements
shall not be disturbed by this provision except by mutual agreement.

        The Company shall have a regularly designated pay day for employees, in
each of the various classifications.

        When a regular designated pay day falls on Sunday or a holiday, the pay
checks for the employee not designated to work on such Sunday or holiday shall
be made available on the preceding day.

        Upon quitting or discharge, the Company shall pay all money due the
employee in accordance with applicable Nevada State Law.

Section 2 The Company shall furnish each employee with an itemized statement of
earnings and deductions which are included in the check.

Section 3 Employees in line operations shall be required to complete all
required Company time sheets showing the arrival and departure at terminal and
intermediate stops and the cause and duration of all delays, time spent loading
and unloading, and same shall be turned in at the end of each trip.

                                       7

<PAGE>   8
        Employees in local operations will record their time as required by the
Company.

Section 4 All claims for wages or complaints thereof which an employee might
nave against the Company shall be filed within thirty (30) days of the payday
where the complaint occurred; otherwise, the Union, the employee, and the
Company agree that payment shall have been made in full.

ARTICLE XVII - POSTING AND BULLETIN BOARDS

Section 1 A copy of this Agreement, together with all supplements applicable to
work performed on or from the premises, shall be posted in a conspicuous place
in each terminal.

Section 2 The Company agrees to provide suitable space for the Union bulletin
board in each terminal. Postings by the Union on such boards are to be confined
to official business of the Union.

Section 3 The authorized business representative of the Union shall have access
to Company premises at reasonable times during regular business hours after
obtaining prior permission from the terminal manager to discuss Union matters
with employees. Interviews with employees shall be carried on in a place
designated by the Company and shall not interfere with the work or operations of
the Company. This privilege shall not be abused.

ARTICLE XVIII - SUB-CONTRACTING

Section 1 The Company reserves the right to sub-contract any work or services
performed by employees of the collective bargaining unit; however, the Company
shall not contract out work for the purpose of laying off regular full-time
employees or retaining such employees in laid off status.

Section 2 It is expressly understood that owner-operators, lessors, or
subcontractors of any kind and the men they employ are not to be considered
employees of the Company covered under this contract, nor are their operations
covered, controlled, or restricted in any way by this Agreement.

ARTICLE XIX - SEPARABILITY AND SAVINGS CLAUSE

Section 1 If any Article or Section of this Agreement or any Supplements or
Riders thereto should be held invalid by operation of law or by any tribunal of
competent jurisdiction or if compliance with or enforcement of any Article or
Section should be restrained by such tribunal pending a final determination as
to its validity, the remainder of this Agreement and of any Supplements or
Riders thereto, or the application of such Article or Section to persons or
circumstances other than those as to which it has been held invalid or as to
which compliance with or enforcement of has been restrained, shall not be
affected thereby.

                                       8

<PAGE>   9
ARTICLE XX - COMPANY RULES

Section 1 The Union recognized the right of the Company from time to tine upon
reasonable notice to establish such reasonable Company rules as it may deem
necessary, provided that such rules are not in conflict with the terms of this
Agreement. A copy of any Company rules reduced to writing shall be given each
employee and the Union. Employees will abide by reasonable rules arid
instructions of the Company not in conflict with the terns of this Agreement as
a condition of continued employment.

ARTICLE XXI - VACATIONS AND VACATION COMPENSATION

Section 1 A regular, full-time employee shall receive one (I) week of paid
vacation after completing one (1) near of continuous employment with the
Company. After two (2) years of continuous employment, a regular, full-time
employee shall receive two (2) weeks of paid vacation, three (3) weeks after ten
(10) years of continuous employment, and four (4) weeks after twenty (20) years
of continuous employment.

        Service means continuous employment with the Company uninterrupted by
termination. In the event of any termination and subsequent rehire, vacation and
vacation pay shall begin anew as in the case of a NEVI HIRE. Vacation rights and
related vacation pay is earned and vested on each annual anniversary date of
employment pertinent to the affected employee.

Section 2 Vacation pay shall be computed as follows: Pay for one (1) week ot
vacation shall be in the amount of one fifty-second (1/52) of the gross annual
earnings of the employee during the twelve (12) month period immediately prior
to the employee's anniversary date.

        Pay for two (2) weeks vacation shall be in the amount of two
fifty-seconds (2/52nds) of the gross annual earnings of the employee during the
twelve (12) month period immediately prior to the employee's anniversary date.

        Pay for the three (3) weeks vacation shall be in the amount of three
fifty-seconds (3/52nds) of the gross annual earnings of the employee during the
twelve (I2) month period immediately prior to the employee's anniversary date.

        Pay for four (4) weeks vacation shall be in the amount of four
fifty-seconds (4/52nds) of the gross annual earnings of the employee during the
twelve (7.2) month period immediately prior to the employee's anniversary date.

        Vacation pay shall be due and payable when the vacation is taken. Time
off for vacation shall be as agreed between the employee and the Company but the
Company shall have the final right to determine when vacations are taken.

                                       9

<PAGE>   10
        An employee who quits, or who is discharged after the completion of one
(1) full year of employment shall be entitled to a pro-rated vacation pay
allowance upon severance of employment, computed upon the same formula he would
have received had he completed such year of employment.

        Pro-rated vacation pay shall be paid with final check upon severance of
employment.

        Laid off employees, who have completed at least one (1 ) year of
service, who are qualified to receive pro-rata vacation pay at the time of
lay-off, shall have option of collecting accumulated pro-rata vacation pay for
the portion of employment year worked at the end of thirty (30) days following
the date of such lay-off. Lay-off status of more than thirty (30) days duration
shall not be counted in qualification for future vacation benefits should such
laid off employee later be recalled and returned to work.

        Should a laid-off employee be recalled and returned to work within one
hundred and twenty (120) days of layoff, all time accumulated prior to the date
of lay-off shall be used in establishing qualifications for future vacation
benefits.

        An employee transferred from one supplemental agreement and/or terminal
under this Agreement to another shall suffer no loss of vacation, provided the
employment is continuous.

ARTICLE XXII - PAID HOLIDAYS

Section 1 A regular full-time employee with seniority who has completed the
probationary period shall receive eight (8) hours' pay at his regular hourly
rate of pay for NEW YEARS DAY, WASHINGTON'S BIRTHDAY, MEMORIAL DAY, FOURTH OF
JULY, LABOR DAY, THANKSGIVING DAY, FRIDAY AFTER THANKSGIVING, CHRISTMAS EVE, and
CHRISTMAS DAY.

        Should any regular full-time employee work one of the above holidays or
any day celebrated in lieu thereof, he shall receive his holiday pay plus the
pay earned during that day. No employee shall be called on the above-named
holidays for less than a full day.

        When any of the above holidays fall on Sunday, the Monday following
shall be considered the holiday. If a holiday falls during an employee's
vacation, he shall receive pay for the holiday in addition to his vacation pay.

ARTICLE XXIII - CHECK OFF

Section 1 The Employer will deduct Union dues from the payroll payments for each
employee who authorized the deduction by voluntarily executing a written,
revokable statement requesting the Employer to make such deductions. The
Employer will forward the amounts so

                                       10

<PAGE>   11
deducted to the Union. The authorization may be cancelled at any time by the
employee by notifying the Company and the Union in writing.

ARTICLE XXIV - HEALTH AND WELFARE PROGRAM

Section 1 The Company will pay into the Teamsters Local 533 Health and Welfare
Plan the amount of $290.00 per month for each eligible employee for the Health s
Welfare benefits (medical, dental, vision 6 prescription) effective October 1,
1996 based on September hours.

Section 2 There will be no increase in benefits, but should the Trust determine
on or after October 7, 1996 additional premium is needed to maintain existing
benefits the Company will pay up to a maximum of $350.00 per month. Rates may go
up to a maximum $365.00 per month any time after January 9, 1998, $380.00
January 1, 1999, and $395,00 January 1, 2000. The Company agrees to payroll
deduction for any additional amounts needed by the Trust to maintain existing
benefits.

ARTICLE XV - PENSION PLAN

Section 1 The Company will maintain its own existing Pension Plan during term of
this Agreement. The Company may change and/or improve the program without prior
notice or bargaining, but may not eliminate the program during the terra of this
Agreement.

ARTICLE XXVI - NON DISCRIMINATION

Section 1 Membership in the Local Union is not compulsory. Employees have the
right to join, not join, maintain, or drop their membership in the Local Union
as they see fit. Neither party shall exert any pressure on or discriminate
against an employee as regard to such matters. The parties agree there shall be
no discrimination on the basis of race, creed, sex, national origin, or age as
required by law.

ARTICLE XXVII - PICKET LINES AND STRUCK GOODS

Section 1 There shall be no work stoppage or lock out during the term of this
Agreement. The Union recognizes that the Company has an obligation to serve the
public. It is understood that the Company must handle all goods and provide
uninterrupted service for any shipper, consignee, or other person who so desires
this service, The Union and all employees will cooperate to this end. In the
event of any action prohibited by this Article, the Union, its officers or
agents agree that it will use its best efforts affirmatively to end such
prohibited conduct.

        The Union voluntarily waives all rights to support or engage in sympathy
strikes.

                                       11

<PAGE>   12
Section 2 It shall not be cause for discharge or other disciplinary action in
the event an individual employee refuses to enter upon any property involved in
a primary labor dispute or refuses to go through or work behind any primary
picket line including the primary picket line of the Union and including the
primary picket lines at the Employers place of business provided the primary
picket line involved has been reviewed and approved by the Joint Council,
however, any such employee need not be paid for any work, run or shift not
completed and may be replaced by the Company.

ARTICLE XXVIII - UNION WAIVER

Section 1 All matters not otherwise limited or prescribed by the terms of this
Agreement shall be under the exclusive and total control of management. In
accepting the considerations and limitations herein agreed to by the Employer,
the Union unqualifiedly waives all present and/or future rights during the term
of this Agreement to require the Company to bargain collectively on any other
aspect of wages, hours, and working conditions affecting employment, whether
specifically contained herein or not, thus giving the Company the unilateral
right to manage the business subject only to the express terms of this
Agreement.

ARTICLE XXIX - TERM OF AGREEMENT

Section 1 This Agreement shall be in full force and effect from October 1, 1996
to and including November 30, 2000 and shall continue from year to year
thereafter unless written notice of desire to cancel or terminate the Agreement
is served by either party upon the other at least sixty (60) days prior to date
of expiration.

        Where no such cancellation or termination notice is served and the
parties desire to continue said Agreement but also desire to negotiate changes
or revisions in this Agreement, either party may serve upon the other a notice
at least sixty (60) days prior to November thirtieth (30th) of any subsequent
contract year, advising that such party desires to revise or change the terms or
conditions of such Agreement.

                                       12

<PAGE>   13
Date of Ratification 19th Day of September, 1996

MOTOR CARGO, INC.                   TEAMSTERS, CHAUFFEURS,
                                    WAREHOUSEMEN AND HELPERS AND
                                    PROFESSIONAL, CLERICAL, PUBLIC AND
                                    MISCELLANEOUS EMPLOYEES, LOCAL
                                    UNION #533

By:    /s/                          By:   /s/
   ---------------------------         ----------------------------
                                    By:
                                       ----------------------------

                                    By:
                                       ----------------------------

                                       13

<PAGE>   14
                                   MOTOR CARGO
                                  Reno, Nevada
                         LOCAL AND SHORT LINE SUPPLEMENT
                                   1996 - 2000

This agreement deemed made and entered into by and between MOTOR CARGO, INC.,
Reno, Nevada, hereinafter referred to as the COMPANY, and TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN & HELPERS AND PROFESSIONAL, CLERICAL, PUBLIC AND MISCELLANEOUS
EMPLOYEES, LOCAL UNION N0, 533, affiliated with the International Brotherhood of
Teamsters, AFL-CIO, hereinafter referred to as the UNION.

ARTICLE 1 - SCOPE OF AGREEMENT

Section 1 The execution of this agreement on the part of the Company shall cover
all full-time truck drivers, helpers, dockmen, warehousemen, checkers, hostlers,
and such other employees as may be presently or hereafter engaged in pickup,
delivery and assembling of freight within the jurisdiction of a signatory union
to this contract as outlined herein.

        Pick-up, Delivery, Local Cartage and Short Line as covered by this
Agreement shall mean those operations designated by the Company as short line
operations. This shall not be construed as preventing short line employees from
performing work that might otherwise be done by long line employees or vice
versa.

Section 2 Employees covered by this Agreement shall include, but not be limited
to, drivers, chauffeurs, or driver-helpers operating any vehicle operated on the
highway, street, or private road for transportation purposes. The term employee
also includes, but is not limited to, employees used in dock work, checking,
stacking, loading, unloading, shipping, receiving, assembling, and allied work.

        Regular employees are those employees that work continuously for the
Company and have completed their ninety (90) day probationary period. All terms
and conditions of this Agreement apply to these employees.

        Casual employees are "on call" and are not granted seniority or benefits
(other than wages) under this Agreement. Part-time employees are those normally
working less than forty (40) hours per week.

        Probationary employees are those full-time employees with less than
ninety (90) days of continuous service with the Company. After this ninety (90)
day trial period, full-time employees shall be placed on the seniority list.

                                        1

<PAGE>   15
ARTICLE II - GENERAL PROVISIONS

Section 1 There shall be no split shifts for full-time employees.

Section 2 The Company agrees to maintain a clean, sanitary washroom, having hot
and cold running water and with toilet facilities unless otherwise mutually
agreed to.

Section 3 A daily time record shall be maintained by the Company at its place of
business. All terminals with five (5) or more employees shall have time clocks.

Section 4 Individual meal periods shall be established by the Company at either
thirty minutes or one hour. Employees will be notified as far in advance as
reasonably possible of a change.

        No employee shall be compelled to take more than one continuous meal
period during his shift. Meal periods will begin no sooner than four nor more
than six hours after reporting. Meal periods shall not be compulsory at stops
where driver is responsible for equipment or cargo, nor shall the meal period be
compulsory when or where there is no accessible eating place.

Section 5 All employees shall be granted a fifteen (15) minute coffee break,
approximately half-way through the first half of their shift, and a fifteen (15)
minute coffee break approximately half way through the second half of their
shift. Such coffee breaks shall be taken without loss of pay and the employee
shall not be required to make up such time.

Section 6 Employees may be assigned to any work on an emergency, training,
temporary, or intermittent basis. Employees working in a higher pay
classification in any given day shall receive the higher rate of pay for all
hours worked during that day.

ARTICLE III - SENIORITY

Section 1 Seniority shah be established upon successful completion of the
probationary period of ninety (90) days continuous service with the Company by a
full-time employee. All terms and conditions of the Agreement shall apply to
regular, full-tine employees who have completed the probationary period. After
completing the ninety (90) day probationary period, an employee shall be placed
on the seniority list as of his date of employment.

        Terminal seniority, as measured by length of service at such terminal,
shall prevail over Company seniority or seniority under another supplement
except where the Company and Union agree to the contrary.

                                       2

<PAGE>   16
Section 2 When it becomes necessary to reduce the working force, the last
employee hired shall be laid off first and when the force is again increased,
the employees shah be returned to work in the reverse order in which laid off.

        A laid off employee shall be given ten (10) days' notice of recall
mailed to his last known address. The employee must respond to such notice
within three (3) days after receipt thereof and actually report to work in seven
t7) days after receipt of notice unless otherwise mutually agreed. An employee
shall lose all seniority rights and right of recall if on layoff longer than
twelve (12) months or upon failure to comply with recall as provided above.

Section 3 Seniority shall not apply to probationary, part-time or casual
employees. Probationary, part-time and casual employees shall not be used in
order to lap off currently working full-tine employees and further in the event
of a reduction of force, regular full-time employees shall have the right to
transfer to part-time or casual employee jobs without losing seniority if they
wish, rather than being laid off.

Section 4 The Company shall not require, as a condition of continued employment,
that an employee purchase truck, tractor and/or tractor and trailer or other
vehicular equipment or that any employee purchase or assume any proprietary
interest or other obligation in the business.

Section 5 All regular runs and positions are subject to seniority and shall be
and for bids. Posting will be at a conspicuous place so that all eligible and
qualified employees will receive notice of the vacancy. Such posting of bids
shall be made not more than once each calendar year, unless mutually agreed
upon, excepting bids for new runs, new positions or vacancies. The Company has
full authority to determine qualifications of any bidder.

Section 6 The Employer shall post in a conspicuous place at the employee's home
terminal and shall mail to the Union within thirty (30) days after the signing
of this Supplemental Agreement, a list of the regular employees covered by this
Supplemental Agreement arranged according to their seniority. The above list
shall be kept current. Protest to any future employee's seniority date or
position. On such list must be made in writing to the Employer within thirty
(130) days after such seniority date or position first appears, and if no
protests are timely made, the dates and positions as posted shall be deemed
correct. Any such protest which is timely made may be submitted to the grievance
procedure.

Section 7 In the event that the Company absorbs the business of another private
contract or common carrier, or is a party to a merger of line, the seniority of
the employees absorbed or affected thereby shall be determined by mutual
agreement between the parties, or the parties may agree to submit it to the
grievance procedure.

Section 8 Where any full-time employee is required by the Company to change
residence in order to follow employment as a result of an approved change of
operation, the Company shall move the employee or pay his moving expenses. This
shall not apply to moves within a

                                       3

<PAGE>   17
radius of one hundred fifty (150) miles. The Company shall not be responsible
for moving or moving expenses if employee changes his residence as a result of
voluntary transfer.

Section 9 Employees may be assigned to any work as required by the Company to
serve the customers. Any employee who neglects or refuses the work assigned by
the Company may be relieved and sent home from duty or reassigned by the
Company.

ARTICLE IV - EXTRA BOARDS

Section 1 Short Line Extra Board: Employees with seniority under this supplement
shall have the opportunity to bid for the number of extra board positions
designated by the Company for assignment on mileage paid work. Employees will
have the opportunity of having their names placed or. the extra board as a
secondary job. Successful bidders will be used on their regular work assignment
and be "on call" as extra mileage paid runs are needed. Where e:ctra board
mileage paid drivers are used at a terminal, the Company will assign runs on a
first-in, first-out basis wherever practicable.

Section 2 Long Line Extra Board: Short line supplement employees shall also have
the opportunity to bid on long line extra board positions, as designated by the
Company, to do extra board work as it comes up and still retain their Short line
supplement seniority and regular job. At such time as an opening occurs and the
employee elects to transfer to a regular position (not extra board) under the
long line supplement, he shall cease to accrue seniority under this supplement
and begin to accrue seniority under the long line supplement. In the event of a
subsequent reduction of force, he shall exert his seniority under the long line
supplement only.

ARTICLE V - HOURS OF WORK AND PAY

Section 1 Except as expressly provided in this Agreement, flexibility in methods
of payments, hours of work, and extra pay for extra wore or other reasons is
retained by the Company, any rates of pay or pay practices which are not in
conflict with the express provisions of the Agreement, may be continued and will
be posted in each terminal. When changes occur in such published rates, a copy
will be provided to the steward and the Union upon request. Such changes may be
made by the Company at any time.

Section 2 Except as expressly provided in this Agreement, present practices with
respect to scheduling work may be maintained. If changes become necessary, the
employees involved will be notified as far in advance as practicable.

Section 3 Wherever employees or work is specifically assigned on an hourly basis
by the Company such as on the dock or in local driving the following shall
apply:

                                       4

<PAGE>   18
Sub Section A. An Employee assigned on an hourly basis shall be paid for all
time spent in service of the Company as outlined in Sub Sections A through D
herein. Rates of pay provided for by this Agreement shall be minimums. Time
shall be computed from the time that the employee is ordered to report for work
and registers in and until he is effectively released from duty. All time lost
due to delays as a result of overloads or certificate violations involving
federal, state, or city regulations, which occur through no fault of the driver,
shall be paid for exclusive of meal periods.

Sub Section B. Any full-time regular employee called and reporting for duty
shall be paid four (4) hours' pay at his regular hourly rate if he is not given
work. If worked more than four (4) hours he shall be guaranteed eight (8) hours'
work or pay.

Sub Section C. When an emergency "call back" occurs, the employee shall be
guaranteed not less than two (2) hours' pay.

Sub Section D. All hours worked in excess of eight (8) hours in one (1) day or
forty (40) hours in any work week shall be paid for at one and one-half times
(1 1/2 X) the employee's regular rate. Overtime shall not be pyramided.

Sub Section E. Work shall be scheduled for five (5) consecutive days with a
limit of four (4) work weeks. The Union will be supplied at all tines with an
up-to-date listing of work weeks, start times and bid jobs.

Sub Section F. Holidays falling outside the regular scheduled work week shall be
paid in. addition to pay for actual hours worked in the week.

Sub Section G. Minimum hourly rates of pay for hourly assigned employees under
his supplement are as listed below:

<TABLE>
<CAPTION>
                            10/01/96      12/01/96       12/01/97       12/01/98       12/01/99
<S>                         <C>           <C>            <C>            <C>            <C>
Regular Full Time
Drivers - TOP               $15.86        $16.16         $16.66         $17.17         $17.66
1st 6 months                 10.95         11.50          12.00          12.50          13.00
2nd 6 months                 11.80         12.20          12.70          13.20          13.70
3rd 6 months                 12.70         13.10          13.60          14.10          14.60
4th 6 months                 14.00         14.40          14.90          15.40          15.90
</TABLE>

                                       5

<PAGE>   19

<TABLE>
<S>                                   <C>            <C>            <C>           <C>            <C>
Regular Part Time

Drivers - TOP                         $10.95         $11.50         $12.00        $12.50         $13.00
First 500 hours                         9.35          10.50           1.50         11.00          11.00
Dock - TOP                             10.75          11.25          11.25         11.75          11.75
First 500 hours                         9.20           9.65           9.65         10.15          10.15

Casual

Drivers - TOP                         $ 8.80           9.25           9.25          9.75           9.75
Dock - TOP                              8.65           9.15           9.15          9.65           9.65
</TABLE>

Note #1 No employee, regular, part-time or casual, who prior to the date of
        this Agreement was receiving more than the rate of wages designated in
        this schedule herein for the class of work in which he was engaged,
        shall suffer a reduction through the operation of this Agreement.

Section 4. Mileage Rates and Work. Whenever employees or work is specifically
assigned on a mileage basis by the Company such as line run, the Sub Sections A
through C shall apply:

Sub Section A. Minimum mileage rates for assignments under this supplement are:

<TABLE>
<CAPTION>
MILEAGE                              10/01/96      12/01/96     12/01/97      12/01/98      12/01/99
-------                              --------      --------     --------      --------      --------
<S>                                  <C>           <C>          <C>           <C>           <C>
SINGLE                                 37.03(cent)   37.53(cent)  38.03(cent)   38.53(cent)   39.03(cent)
SLEEPER (Split)                        39.03(cent)   39.53(cent)  40.03(cent)   40.53(cent)   41.03(cent)
Triples and 2 40's add                     2(cent)       2(cent)      2(cent)       2(cent)       2(cent)
48' and pup                                2(cent)       2(cent)      2(cent)       2(cent)       2(cent)

OTHER
Work Time                              $15.02        $15.52       $16.02        $16.52        $17.02
Break Down                              $7.51         $7.76        $8.01         $8.26         $8.51
Holiday                                $15.36        $16.16       $16.66        $17.17        $17.66
</TABLE>

                                       6

<PAGE>   20
ARTICLE VI - TERM OF AGREEMENT

The term of this Supplemental Agreement is subject to and controlled by the
MASTER AGREEMENT.

MOTOR CARGO, INC.                   TEAMSTERS, CHAUFFEURS,
                                    WAREHOUSEMEN AND HELPERS AND
                                    PROFESSIONAL, CLERICAL, PUBLIC AND
                                    MISCELLANEOUS EMPLOYEES, LOCAL
                                    UNION #533

By:   /s/                           By:   /s/
   ----------------------              -------------------------------

                                    By:
                                       -------------------------------

                                    By:
                                       -------------------------------

                                       7

<PAGE>   21
                                   MOTOR CARGO
                                  Reno, Nevada
                              LONG LINE SUPPLEMENT
                                   1996 - 2000

This agreement, deemed made and entered into by and between MOTOR CARGO, INC.,
Reno, Nevada, hereinafter referred to as the COMPANY, and TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN & HELPERS AND PROFESSIONAL, CLERICAL, PUBLIC AND MISCELLANEOUS
EMPLOYEES, LOCAL UNION NO. 533, affiliated with the international Brotherhood of
Teamsters, AFL-CIO, hereinafter referred to as the UNION.

ARTICLE I - SCOPE OF AGREEMENT

Section 1 For the purpose of this supplement, the term "Long Line" is any dry
freight operation so designated by the Company as under this supplement and not
within the scope of the Local and Short Line Supplement between the parties.
This shall not preclude long line employees from performing work that might
otherwise be done by local and short fine employees or vice versa.

Section 2 Employees covered by this Agreement shall include any employee driver,
chauffeur or driver-helper operating any vehicle operated on the highway, street
or private road for transportation purposes.

        Regular employees are those employees other than extra employees that
work continuously for the Company and have completed their ninety (90) day
probationary period. All terms and conditions of this Agreement apply to these
employees.

        Extra employees are those employees who normally work less than forty
(40) hours per week and have other employment and students enrolled in any
institution of learning and extra board employees having seniority under the
Short Line Supplement, or any of them. Long Line Extra Board employees (except
those under the Short Line Supplement) are on call and are not granted seniority
or other benefits (other than wages) under this Agreement.

        Probationary employees are those employees with less than ninety (90)
days of continuous service with the Company. After this ninety (90) day trial
period, full-time employees shall be placed on the regular seniority list.

Section 3 The Company expressly reserves the right to control the manner, means
and details if any, by which the owner-operator performs his services as well as
the means to be accomplished. They shall not be considered employees under this
contract. The Company reserves the right to sub-contract any work or services
performed; however, the Company shall not contract out work for the purpose of
laying off regular full-time employees or retaining such employees in laid off
status.

                                       1

<PAGE>   22
ARTICLE II - RATES OF  PAY

Section 1 Except as expressly provided in this Agreement, flexibility in methods
of payment, hours of work and extra pay for extra work or other reasons is
retained by the Company. Any rates of pay or practices which are not in conflict
with the express provisions of this Agreement may be continued and will be
posted in each terminal. When changes occur in such published rates, a copy will
be provided to the steward and the Union upon request.
Such changes may be made by the Company at any time.

Section 2 Except as expressly provided in this Agreement, present practices with
respect to scheduling work may be maintained. If change becomes necessary, the
employees involved will be notified as far in advance as practicable.

Section 3 The minimum mileage rates of pay for all miles driven under this
agreement where such rates apply shall be:

<TABLE>
<CAPTION>
MILEAGE                             10/01/97      12/01/96      12/01/97      12/01/98      12/01/99
-------                             --------      --------      --------      --------      --------
<S>                                 <C>           <C>           <C>           <C>           <C>
SINGLE                                37.02(cent)   37.53(cent)   38.03(cent)   38.53(cent)   39.03(cent)
SLEEPER (split)                       39.03(cent)   39.53(cent)   40.03(cent)   40.53(cent)   41.03(cent)
Triples & 40's add                        2(cent)       2(cent)       2(cent)       2(cent)       2(cent)
48' and pup                               2(cent)       2(cent)       2(cent)       2(cent)       2(cent)

OTHER
Work Time                             $15.02        $15.52        $16.02        $16.52        $17.02
Break Down                            $ 7.51        $ 7.76        $ 8.01        $ 8.26        $ 8.51
Holiday                               $15.86        $16.16        $16.66        $17.17        $17.66
</TABLE>

Sub Section A. Determination. Mileage shall be paid over the shortest practical
route traveled from point of origin to point of destination with the Company
realizing that conditions reasonably beyond the control of the Company or
employee may dictate alternate routes.

        Mileage will be paid by mileage shown on official state highway maps.
When final destination is not shown on the maps available, actual miles traveled
will be logged from the last point shown. Mileage shown plus actual miles shall
be used. In the event an error in mileage has been made, this error will be
corrected immediately.

        All runs or trips shall be paid for at the mileage rate for miles
driven.

                                       2

<PAGE>   23
Section 4 When an employee is called and reports for duty and no work is
provided, the employee shall be guaranteed a minimum of four (4) hours pay. The
four (4) hour guarantee shall not apply where an employee has been given at
least two (2) hours notice that no work is to be provided. Employees shall be
given at least two (2) hours notice when ordered to report for duty, at both the
hone terminal and at the end of the run where he has been effectively released
from duty by the Company.

Section 5 In all cases where an employee is instructed to ride or drive on
Company or leased equipment, he shall receive full pay as specified in the
Agreement. When instructed to deadhead on other than, Company or leased
equipment, he shall receive hourly rate of pay for time spent with a minimum of
eight (8) hours plus cost of transportation.

Section 6 On a turnaround operation involving the interchange of equipment in a
continuous through movement of schedules, the interchange of such equipment
shall be made at a regular designated point. Drivers shall not be released from
duty at such turnaround point.

Section 7 On breakdowns or impassable highways, each driver on all runs shall be
paid one-half (1/2) the hourly rate for all tine spent on such delay, commencing
with the first hour or fraction thereof, but not to exceed eight (8) hours out
of each twenty-four (24) hour period, except that when an employee is required
to remain with his equipment during such breakdown or impassable highway, he
shall be paid for all such delay time at one-half (1/2) the rate specified in
this Agreement. Where an employee is held longer than an eight (8) hour period,
he shall in addition be furnished clean, comfortable, sanitary lodging, plus
meals. The pay for delay time shall be in addition to ponies earned for miles
driven and/or work performed.

        All time lost due to delays as a result of overloads or certificate
violations involving federal, state, or city regulations, which occur through no
fault of the driver, shall be paid for at the regular applicable hourly rate in
this Agreement.

Section 8 The applicable hourly rate shall be paid to each driver for time spent
other than driving, which shall include, but not be limited to chaining tine,
tire changes, loading and/or unloading, dropping and picking up trailers and
hostling.

Section 9 When drivers are required to take a rest period or layover during any
one round trip, away from his home terminal, he shall be compensated as follows:

        For the first fourteen (l4) hours of each layover period after the run
end, no pay.

        For the next eight (8) hours, beginning with the start of the fifteenth
(15th) hour after arrival at the layover point, at the regular hourly rate of
pay, with a minimum guarantee of three (3) hours if not dispatched at the
beginning of the fifteenth (15th) hour.

                                       3

<PAGE>   24
        For the next ten (10) hours, no pay.

        For the next eight (8) hours the regular hourly rate of pay.

        And continuing on the same basis for each continuing eighteen (18)
hours. Each driver will receive $8.00 for meals after eight (8) hours layover.
These provisions will only apply at one layover point during any one round trip.

Section 10 Holiday pay for Long Line supplement employees shall be calculated
based on the currently applicable Short Line Heavy Duty rate.

Section 11 Drivers of tractor without trailer shall be paid on the same basis as
tractor-trailer drivers.

Section 12 Drivers shall, except by mutual agreement, be allowed one (1)
continuous hour for meals, but in no event less than thirty (30) minutes, nor
mare than one (1) hour in each ten (10) hour period. No driver shall be
compelled to take any part of such continuous hour before he has been on duty
four (4) hours or after he has been on duty six (6) hours. Meal period shall not
be compulsory at terminals where driver is responsible for equipment or cargo,
nor shall meal period be compulsory when or where there is no accessible eating
place.

ARTICLE III - SENIORITY

Section 1 Seniority shall be established upon completion of the probationary
period of ninety (90) days continuous service with the Company by a full-time
employee. All terms and conditions of the Agreement shall apply to regular,
full-time employees who have completed the probationary period. After completing
the ninety (90) day probationary period, an employee shall be placed on the
seniority list as of his date of employment.

Section 2 Terminal seniority under this supplement as measured by length of
service at a terminal shall prevail over Company seniority or seniority under
another supplement, except where the Company and Union agree to the contrary.

Section 3 When it becomes necessary to reduce the working force the last man
hired shall be laid off first and when the force is again increased, the
employees are to be returned to work in the reverse order in which laid off.

        A laid off employee shall be given ten (10) days notice of recall mailed
to his last known address. The employee must respond to such notice within three
(3) days after receipt thereof and actually report to work in seven (7) days
after receipt of notice unless otherwise mutually agreed. An employee shall lose
all seniority rights and rights of recall if on layoff longer than twelve (12)
months or upon failure to comply with recall as provided above.

                                       4

<PAGE>   25
Section 4 The Company shall not require, as a condition of continuing
employment, that an employee purchase truck, tractor, and/or tractor and trailer
or other vehicular equipment or that any employee purchase or assume any
proprietary interest or other obligation of the business.

Section 5 All regular runs and new positions are subject to seniority and shall
be posted for bids. Posting shall be in a conspicuous place so that all eligible
employees shall receive notice of the vacancy. Such posting of bids shall be
made not more than once each calendar year, unless mutually agreed, except bids
for new runs, new positions or vacancies.

        If either party at any time may find the present methods of bidding
inoperative as outlined, negotiations may be requested to correct any problems
arising under these procedures.

Section 6 The Employer shall post in a conspicuous place at the employee's home
terminal, and shall mail to the Union within thirty (30) days after the signing
of this Supplemental Agreement, a list of the regular employees covered by this
Supplemental Agreement arranged according to their seniority. The above list
shall be kept current. Protest to any future employee's seniority date or
position on such list must be made in writing to the Employer within thirty (30
) days after such seniority date or position first appears, and in no protests
are timely made, the dates and positions as posted shall be deemed correct. Any
such protest which is timely made may be submitted to the grievance procedure.

Section 7 In the event that the Company absorbs the business of another private
contract or common carrier, or is a party to a merger of line, the seniority of
the employees absorbed or affected thereby shall be determined by mutual
agreement between the parties, or the parties may agree to submit it to the
grievance procedure.

Section 8 When a branch, terminal, division or operation is closed and the work
of the branch, terminal, division, or operation is eliminated, an employee who
was formerly employed at another branch, terminal, division or operation shall
have the right to transfer back to such former branch, terminal, division or
operation and exercise his seniority based on the date of hire at the branch,
terminal, division or operation into which he is transferring, provided he has
not been away from such original terminal for more than two (2) years.

        When a branch, terminal, division or operation is closed or partially
closed and the work of the branch, terminal, division or operation is
transferred to another branch, terminal, division or operation in whole or in
part, an employee at the closed or partially closed down branch, terminal,
division or operation shall have the right to transfer to the branch, terminal,
division or operation in which the work was transferred if work is available
there. Such employee, however, shall go to the bottom of the seniority board and
shall have the right of job selection only in accordance with his seniority at
such terminal. However, he shall exercise his Company seniority for layoff
purposes and all other contract benefits.

                                       5

<PAGE>   26
        In all transfers referred to above, the employee must be qualified to
perform the job by experience in the classification.

Section 9 Where any full-time regular employee is required by one company to
change residence in order to follow employment as a result of an approved change
of operation, the Company shall move the employee or pay his moving expenses.
This shall not apply to moves within one hundred fifty (150) miles. The Company
shall not be responsible for moving or moving expenses if the employee changes
his residence as a result of voluntary transfer.

ARTICLE IV - EXTRA BOARD DRIVERS

Section 1. - Long Line Extra Board: An extra board shall be established by the
Company in accordance with the number of extra board positions it may from time
to time determine are necessary. Short Line Supplement employees shall have the
opportunity to bid on long line extra board positions as designated by the
Company, do the extra board work as it comes up and still retain their short
line supplement seniority and regular job. At such time as a regular (not extra
board) opening occurs and the employee elects to transfer to a regular position
under this supplement, he shall begin to accrue seniority under this supplement
and shall then exert seniority under this supplement only. This shall not be
interpreted to mean the Employer may not hire new regular long line drivers as
it determines openings exist.

Section 2 Where extra long line drivers are regularly used at a terminal, the
Company will assign runs on a first in, first out basis.

Section 3 Employees may be assigned to any work as required by the Company to
serve the customers. Any employee who neglects or refuses the work assigned may
be relieved and sent hone or reassigned by the Company.

                                       6

<PAGE>   27
ARTICLE V - TERM OF AGREEMENT

The term of this Supplemental Agreement is subject to and controlled by the
MASTER AGREEMENT.

MOTOR CARGO, INC.                   TEAMSTERS, CHAUFFEURS,
                                    WAREHOUSEMEN AND HELPERS AND
                                    PROFESSIONAL, CLERICAL, PUBLIC AND
                                    MISCELLANEOUS EMPLOYEES, LOCAL
                                    UNION #533

By:   /s/                           By:   /s/
   --------------------------          ------------------------------

                                    By:
                                       ------------------------------

                                    By:
                                       ------------------------------

                                       7

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